Higgenbotham wrote: Sun Jan 25, 2009 6:26 pmThere's another point in the discussion about marginal barrels, and that is the net energy extracted from the barrels on the margin. What I mean by that is those marginal barrels may have cost $80 to produce at the peak of the boom but since our accounting system is money based rather than energy based, there is no telling whether those marginal barrels were even produced at positive net BTUs. That's why I've thought for a long time that peak oil isn't actually needed to limit the economy--it can be limited before peak is ever reached.
I'm sure there are people out there who have thought about his more than I have, but I really haven't seen the concept laid out in a big picture manner. Not to say it hasn't. Look hard enough on the Internet and you'll find most anything. The way I think of it is there is a marginal energy producing "system", say the Canadian Tar Sands projects. It would be represented by drawing a boundary around the system and accounting for all the energy flows in and all the energy flows out. For example, if equipment is moved into the system to extract energy, then the energy used to produce and move that equipment would be an energy expenditure of the project. Likewise, any workers who travel to Alberta to work on the project. And so on. I don't know, but it may be that even though the project produces money profits, it may operate at an overall energy loss, in the sense that more overall energy flows into the project than flows out. Since the economy runs on energy, operating projects that operate at an overall energy loss would begin to grind down the economy without anybody realizing why. And I suppose there could be some threshold above loss where that would be the case too. Certainly, at constant production rates over time, replacing a barrel of easy to extract oil with a barrel produced in a marginal tar sands project is a net negative.
Higgenbotham wrote: Tue Jan 27, 2009 11:11 amIt's probable that the problem has not been fully expressed because it requires a rudimentary knowledge of systems theory to express it, and it requires an advanced knowledge of systems theory to model it. The world is not at the point of accurately modeling these kinds of problems.
Modeling would probably require that the modeler construct 2 worlds--the actual one in which the marginal energy project took place and one in which it did not take place. The world energy production and expenditures would need to be compared under the 2 scenarios and netted out to determine if the marginal project had net energy benefit. There are all kinds of complications in that. For example, if a single man is unemployed and living in Alabama, finds employment in Alberta, expends energy to travel there, lives in a housing unit that was built because the project came into existence, marries and has a family because he now has a decent wage, etc., how does his energy expenditure compare to the alternate world in which the marginal energy project did not take place? As I've generally implied before, this in my opinion is the kind of thinking/technology that will be required to move into a "real" information age and we may be several decades or centuries away from it. Doing a project because it has political appeal ("creates jobs"), money profits, and/or because the losses can be socialized will eventually move humanity backwards and that is what seems to be starting to occur across the board.
In this way, peak oil can be predicted as a complex system breakdown which has nothing to do with how much oil has been pumped out of the ground or how much is left to extract (in other words, the magical halfway point that the peak oilers point to), but instead whether systems theory predicts a net energy benefit to the project vis-a-vis an alternate world in which the project is not undertaken.
PS Modeling this problem also has a time dependency associated with it because the energy expenditures to do a project are done up front before any energy flows are obtained from it. Therefore, in theory, a project that grows slowly in the absence of a credit boom, and does not generate huge expenditures of energy up front before any is produced, is less likely to generate system lockup. For example, in the simple extreme that can be easily visualized, if Keppel is building 5 million rigs and using a lot of energy to do it, the energy expenditures to build the rigs could lock up the economy before the rigs are utilized to produce the energy.