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Olson: New Technology, Old Technology, and the Future
New Technology, Old Technology, and the Future By Lynn Olson "Once again I will impose on the hospitality of John Atwood and write an essay that is entirely off-topic - so here goes, folks: Ive been thinking about the implications of Peak Oil and climate change. Im not one of the chicken-little types that thinks the electrical grid will collapse in ten years time, or agriculture will run short of (fossil-fuel based) fertilizer. Im enough of an economist to know the market, even though it is heavily manipulated by oil companies and OPEC, will still decide how the transition away from fossil fuels will happen. We wont just suddenly run out one year; instead, the price of oil will go up - and up - and up, broken by the inevitable market disruptions and political turmoil. So the long-term (over decades) trend will be steadily upward, descending only when fossil fuels are almost entirely phased out and used only for chemical feedstocks (instead of fuel). The survivalists think that Western Civ will collapse of its own weight and complexity, and the USA, at least, will descend into some kind of Mad Max end-times movie of guns, stored-food, and local-militias. I dont. The market will speak instead. People forget that until very recently, the price of gas was only a small part of the total lifecycle cost of a car or truck. Think about it. If a $20,000 car is driven for 120,000 miles over a ten-year lifetime, and consumes 20 mpg, it uses up 6,000 gallons of gasoline. At US$1 a gallon, the price of gas from Reagan through Clinton, thats only $6,000. Big deal. No wonder Detroit sold a lot of upscale body-on-frame trucks disguised as SUVs. Why not? Big and luxurious, the way Americans like it. If the 5,000 lb behemoth consumes a miserable 13 mpg, thats still only about $9,000 over the life of the vehicle. Its really not all that much if you want to haul your family, and a boat or trailer, out to the boondocks in air-conditioned CD/DVD player comfort. The 13 mpg SUV looks a little different at $4 a gallon. Now thats $37,000. Uh-oh; thats the price of the vehicle. At the existing European price of $8 a gallon, thats $74,000. Now were talking real money. If worldwide Peak Oil becomes a reality over the next ten years (and independent consensus opinion in the oil industry is that it will), then the USA will be seeing $10 a gallon - before 2018. Now that SUV will be eating $90,000 over its lifetime. Most SUVs will see the junkyard before the ten years is out - the operating costs will be just too high for many people, especially for an aging, out-of-style vehicle. Were not talking about a collectible musclecar here, like a Shelby Mustang, but one of millions of Ford and GM family-haulers with a trailer hitch on back. Notice how little effect a gas-guzzler tax, or all the advertising and environmental-awareness political campaigns have. The real question is simple: is the price of fuel a significant part of the cost of the vehicle? If it is, people make different decisions, and entire fleets get replaced fairly quickly. It also puts all the scare talk about the Federal fuel tax, or a potential €ścarbon tax€ť, in perspective. Nobody, even the most extreme environmentalists, is talking about a €ścarbon tax€ť so high it would triple the cost of gas. Yet thats would it would take to quickly turn over and replace the fleet with something different. Until then, the fleet will stay on the road, gradually getting less attractive to own (and certainly to sell) as fuel prices continue to increase. What would a world of $1, $3, $10, and $30 a gallon gasoline/methanol look like? For most of the 20th Century in the USA, the real (corrected for inflation) price of gasoline was around $1 a gallon (with a brief spike in the Seventies). Not free, but pretty close to it. Comparable to the price of bottled water. There was basically no incentive to operate an economical vehicle or use public transportation. At the beginning of the 20th Century, gasoline was of poor quality (low octane, prone to detonation, many contaminants) and very expensive in real-dollar terms. Prices didnt drop, and quality go up, until motoring became a mass market in the late Twenties (which was when tetraethyl lead became a common additive, and engines raised compression ratios). The USA enjoyed a period of €śhappy motoring€ť for about three-quarter of a century, with gas prices level or decreasing, the highway system expanding, cars getting better year by year, suburbs growing, and public transportation declining. The world of 1908 was different. The roads outside of cities were primitive, dusty tracks, stifling in the summer, and muddy disasters during the rest of the year. If you wanted to travel any distance, you took the train, either 1st, 2nd, or 3rd-class, whatever you could afford. And trains went everywhere, even deep into the interior of the least developed colonies of the Imperial Powers. Steamships powered by coal that powered steam turbines crossed the oceans in speed and comfort. Telegraph systems followed the railways, and spanned the continents and oceans. By modern standards fuel was expensive, and was either dusty, dirty coal, or expensive and clean oil. For most people in the industrial world, heat was a pile of coal, cooling came from the ice-man and his horse-drawn cart, and light came from gaslight or the new-fangled Edison bulbs. In some ways the world before World War I was a more civilized one than the one we know now; no income taxes in most countries, no passports (really!), trade between nations at levels not seen until the end of the 20th Century, no war-on-drugs laws, a laissez-faire libertarian paradise (except in sexual affairs, where laws were draconian and enforced with a definite class slant). In this world of comparatively expensive energy, a high level of civilization was possible - indeed, one that was growing very rapidly all over the world. Was it more inequitable than the present? In the advanced countries, income levels were about as unequal as in the USA now, and class tensions undoubtedly played a role in stoking World War I. But the real engine behind the Great War was the competition between the Imperial Powers - the ones that had, and the ones that wanted in. And the net effect of both World Wars was to eventually destroy the colonial system completely, with the exception of the USA and USSR. And we know whos left standing now - but for how long? What about the world of 1958? This is one I remember, growing up in the Far East as the son of a diplomat. Crossing the Pacific in an ocean liner was certainly more pleasant than a cramped, noisy, and interminable trans-Pacific flight. But real-dollar prices were much higher than now; I remember air and ocean fares being about comparable around $1000 each - and that was in 1958 dollars, with gold at $35 an ounce! So tourism was for the well-to-do with time on their hands (grey-haired retirees in hawaiian shirts and shorts), business executives, and diplomats. Men wore suits, ties, and well-polished shoes when the first Boeing 707 took to the air. Airfreight existed, but like international phone calls, was very expensive. Certainly the idea of airfreighting flowers from Chile to the USA just to take advantage of cheaper labor would have seemed the height of absurdity - from any political or economic perspective back then. In 1958, we all expected automation would make working weeks gradually shorter, opening up a new age of leisure, and fossil fuels would be phased out by fission and fusion power. We also thought the cure for cancer was just around the corner - polio had been wiped out all over the world only a few years earlier, and DDT was making a real dent in tropical diseases. The advanced nations had top income taxes set 90% (with the exception of Switzerland, of course), and income structures were much flatter than at present. It was entirely possible, and quite common, for blue-collar man working in a garage, or a low-ranking white-collar businessman, to own a pleasant car and a home, and have a wife at home to take care of the kids. This was no nostalgic illusion; the great triumph of the Progressive movement was a flattening of class structure in a way never before seen in American or European history. So looking back from 2008, there were many aspects of America, Canada, and Europe that were actually better than the present - I dont think anyone from that era would have expected the growth of the hyper-rich, the outsourcing of the American industrial base, and the gradual destruction of the progressive legacy on the altar of Milton Friedman economics. That Europe avoided some of the American extremes is partly a reflection of a different media structure and a very different historical experience. The fuel-substitution movement started in earnest during the late Seventies, but was intentionally derailed by the Saudi policy of suddenly dropping the price of oil. By the Eighties, the Saudis had Harvard MBA-trained economists that warned them that continued high prices would make the West shift over to other fuels - leaving the Saudi with depreciated oil assets. By setting OPEC prices at a level just slightly under alternative fuels, the oil-producing cartel was able to bankrupt the energy-independence movement at the same time the Reagan administration withdrew the Carter-era Federal subsidies. (Europe, with less reliance on market mechanisms than the USA, continued with a wide range of government incentives to improve fuel efficiency, to the point where the per-capita fuel use in Europe is now half what it is in the USA.) The Saudis could accomplish this €śbeggar-thy-neighbor€ť policy by pumping oil faster than anyone else, since they had the largest single oil field in the world - Ghawar. However, the Eighties OPEC oil-price crash was a one-time event; this time, the Saudis are now running at full capacity, Ghawar has been operating for well over a half-century, and is now requiring a substantial amount of salt-water injection to maintain pressure at the wellheads. There is not going to be a repeat of the Eighties for the simple reason that no country in the world has the physical ability to pump oil that fast, and more importantly, total world consumption is now at a far higher level than twenty years ago. The entire system has been running at capacity for nearly a decade - there is no spare capacity left. That is why relatively small disruptions have such large effect on the futures market - markets are reflecting the lack of spare capacity, and pricing the commodity accordingly. What was only just starting in the late Seventies is going to have to be re-started in earnest this time around. We now have a lot less time, and have wasted eight years in an expensive bid to control the resources of the Middle East by military force. The success of the Middle East Full Spectrum Dominance project (summed up in the Project for a New American Century) is now seriously in doubt, and the future of the Middle East is an open question. No crystal ball will tell us who will control the oil of the Middle East in five years time, much less fifty years. All we know is that oil is going to be very expensive. The oil companies have been looking for fifty years with the best technology at their disposal, and no replacements for the immense Ghawar field have been found anywhere in the world - not in the artic, not in the antartic, and not in the deep oceans. When the Mideast (Saudi Arabia, United Arab Emirates, Iraq, and Iran) starts to deplete, thats going to be it. The reserves everywhere else are significantly smaller, the world is consuming oil at a thousand barrels a second, and the rate of consumption is still increasing. The curves of consumption and maximum rates of extraction are going to intersect - either now, or ten years from now. So what does 2058 look like? Whether we like it or not, the transition away from fossil fuels will be well advanced, and the countries that do the best job will be the leaders of the late 21st Century. The countries that resist will experience the fate of all declining empires - less influence, isolation, cultural decadence, and looking for someone, anyone, to blame, anyone but their own society and the choices they made collectively. Will they strike out in anger and rage? Will the USA be one of them? The choice is up to us. Whats interesting is that technologies of the past that were discarded a long time ago are starting to look good again. I remember riding the trains in Japan - I took a train every day to and from Canadian Academy, just outside of Kobe. Id look in at the operators controls, and could see the Ammeter, with a scale that read both Plus and Minus Amps, and scaled in hundreds of amps. As the train accelerated out of the station up to the running speed of 100~120 kph (pretty fast for a local train), it would consume amps, and as it went downhill or coasted down to a stop, it would return amps back to the system. Not only that, but the whole electric train was run off of hydroelectric power - Id seen the dam on a construction tour of Kansai power, it was about the size of Hoover dam, the most stupendous construction Id ever seen, a sign of the might and power of technology. All of this to power fast, quiet, smooth electric trains, and the rest of modern society that Japan had back in 1958 - radio, television, cities lighting up at night, pachinko parlors, a whole civilization born out of the Meiji-era modernization of the late Nineteenth Century. Even as a 9-year-old, I was impressed by the sheer scale of achievement - all the way from late-medieval society in less than a century, then climbing back from the bombings of World War II in less than a decade. A phenomenal achievement for any society. But back to that train. My made-in-Tokyo 2008 Prius does the same thing today, every time I drive it to the grocery store. It would be nice to have that same big round Ammeter showing all of those wonderful amperes recirculating back and forth as the car accelerates and then recaptures that same energy as it slows down or goes downhill - a geekish thrill I know, but its great to know whats going on as the machine does all of its wonderful workings. Why hide it? Steam-turbine-electric steamships and diesel-electric locomotives go back to the 1908 era, and have been the standard for economy, power, and long-term reliability right up to the present. In cars, we call this series-hybrid, where the conventional power source is optimized for long-term fuel efficiency (and is actually a small electric power plant), and a generator/motor combination acts as the transmission. In a ship, this has the merit of multiple motors to drive multiple props, simplified maneuvering with differential prop control, and the latest variant, external prop motors that can be rotated on their axis, making tugboats unnecessary. In a diesel train, the generator/motor has an infinite number of effective gear ratios, and has the highest torque at rest, just when the train needs it the most. No gears to turn, no clutch to waste power and burn out, and General Electric figured it all out a long time ago. Its high time that these technologies made it to a car you and I can buy. In a year or two, there should be what are called €śplug-in€ť variants, where the battery pack is several times larger, and can be charged up at night. This improves fuel economy from the 45~50 mpg that Prius drivers already get to a more interesting 75~100 mpg. Now were talking. And the plug-in concept can be extended much further - there are serious proposals to make the plug-in inverter go both ways, so fleets of plug-in hybrids could actually back up the entire electrical grid! This isnt as far-fetched as it sounds - several people have already modified their Prius to act as a UPS for their entire house. The car has plenty of power to do this - the 3-phase/500VAC 50 hp motor/generator can accept more than 30 kilowatts, several times what a house consumes, and the Prius automatically starts and stops the 75 hp gas engine to keep the battery in the correct charge range. And a Prius is a lot smoother-starting, much quieter, and has far lower toxic-gas emissions than any emergency-power system you can buy. Plus you can drive it whenever you feel like it - try that with your Honda back-up generator. The Prius is just one example of industrial technology thats been available for decades being re-designed for a consumer purpose (the Prius is a series/parallel hybrid using planetary gearing for the motor, instead of straight series power). This sort of lateral thinking is what well be seeing more of in the future. Whats been holding back the transition to go beyond fossil fuels is a lack of imagination, courage, and appropriate long-term capital allocations in the corporations that service the industrial economies. Not surprisingly, companies invested in old-tech are running active Internet campaigns of disinformation to discourage people from looking elsewhere. But I can tell you, when you drive down the street in utter silence, you dont go back. Noise and vibration arent cool anymore. (Stomping out some fairy tales: the Prius uses conventional NiMH batteries, not NiCads. Last time I checked, nickel wasnt especially toxic or awful, and Toyota will sell you a brand-new battery pack for $3000 once the 150,000 mile Hybrid Synergy Drive warranty runs out. Or you could just get a set from a junkyard for $1000 if you want to play around with making your own plug-in hybrid. Owners are reporting battery life of at least 200,000 miles - by the way, replaced a Ford automatic transmission lately? Not cheap, was it?) The Prius is just the first of a whole fleet of vehicles. An obvious next step would be a plug-in series-electric with independently computer-controlled electric motors for each wheel, and a small, quiet turbodiesel running off a wide range of fuels, not just gasoline. Another example of existing industrial technology, made available to the consumer. Electric trains are going to start looking good again - and whats wrong with that? Theyre a superb way to travel - fast, quiet, luxurious, and put modern air travel to shame. When can we start? Where do I sign up? Yes, I know some people think the lights will go out, well be riding in oxcarts again, and well be living in medieval villages in agrarian squalor. Maybe in some parts of the world, in an empire that is dying, and refusing to deal with reality. If people want to live in a theocratic medieval fantasy - they are more than welcome to it. Been there, done that. But not me, baby. Ill be in that solar/electric Swiss-made Zeppelin, flying to see the launch of the first fusion-powered spaceship. Nikola Tesla was right - the future is electric! References: A Thousand Barrels a Second: The Coming Oil Break Point and the Challenges Facing an Energy Dependent World by Peter Tertzakian http://www.amazon.com/Thousand-Barre...dp/0071492607/ American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century by Kevin Phillips http://www.amazon.com/American-Theoc...dp/B00119O0M8/ Europes Last Summer: Who Started the Great War in 1914? by David Fromkin http://www.amazon.com/Europes-Last-S...dp/037572575X/ A Solar Grand Plan: By 2050, Solar Power Could End U.S. Dependence on Foreign Oil and Slash Greenhouse Gas Emissions by Ken Zweibel, James Mason and Vasilis Fthenakis http://www.sciam.com/article.cfm?id=a-solar-grand-plan Posted: May 13, 2008 at 6:49 pm in History, Uncategorized " http://www.clarisonus.com/blog/?p=241#more-241 -- Message posted using http://www.talkaboutaudio.com/group/rec.audio.opinion/ More information at http://www.talkaboutaudio.com/faq.html |
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