Sunday, November 19, 2017

The Soft Belly of The Oil Industry: an Upcoming Seneca Collapse?


Ugo Bardi explains his idea of an impending "Seneca Collapse" of the world's oil industry at the session on climate change of the meeting of the Club of Rome in Vienna, on 10 Nov 2017. What follows are not the exact words said, but a text which maintains the gist of this brief comment. It was focused on the concept that the oil industry has a "soft belly" in the fact that it produces mainly fuel for engines used for transportation. If this market were reduced by the introduction of electric vehicles and other transportation innovations, the whole industry could collapse. That would be a good thing for the earth's ecosystem and for humankind in general.



Dear colleagues, we are having an interesting discussion on how to stop climate change and I think I could add some thoughts of mine on the basis of my recent work that I published in the form of the book titled "The Seneca Effect". 

The problem we have been discussing is how to limit emissions and we saw that it needs to be done fast and even drastically if we want to avoid the worse effects of climate change. Obviously, it is not easy. (image from Skeptical Science

Most of what has been said today was based on a "top-down" approach, which I may also describe as supply-limiting. That is, we are speaking of a carbon tax, of emission limits, and the like; measures that governments should take in order to limit the production of fossil fuels. I don't have to tell you that it is an effort that has been ongoing for several years and yet emissions keep growing. It doesn't seem to work

So,  can we take the opposite approach? That is, look at the demand side in a "bottom-up" approach? 

To discuss this point, let me introduce the concept of the "Seneca Effect" or the "Seneca Cliff." Here is the shape of the Seneca curve. 

You know that I use the term of "Seneca Effect" taking inspiration from something that the Roman philosopher Seneca said long ago; "growth is sluggish but ruin is rapid". And you see how the curve looks like the projections for emission reductions we have been seeing here. 

So, the question is, what causes the collapse we see in the Seneca Curve in complex systems? Well, we can use system dynamics to model the collapse and we know it is not a "top-down" effect, nobody from outside forces the system to collapse. It is a very general phenomenon caused by the interactions of the various elements that compose the system which cooperate to bring it down. And that's a trick that can be exploited: as I say in my book, "The Seneca Effect", collapse is not a bug, it is a feature. 

Let me see to explain it using the oil industry as an example: see the figure drawn on the board. 



Now, you see the segmented line I drew, it keeps going up. It is what the oil companies expect for the future. Their projections, by Exxon for instance, say this: given sufficient investments, we can keep growing the oil production for a number of years, maybe a decade or more. 

That's what they have been doing; despite various dire warnings, the oil industry has been able to keep production growing. It is true that conventional oil ("crude") peaked at some moment between 2005 and 2010, but it didn't really decline. Then, the production of "all liquids" kept growing by exploiting other sources such as shale oil. 

Of course, the problem is that if the industry continues to make an all-out effort to increase, or at least maintain, production, all we were saying about the need of reducing emissions goes out of the smokestack. Forget about keeping warming below 2 degrees. It would be a disaster. 

But look at the Seneca curve in the graph. It would generate more or less the kind of rapidly declining production curve we need for our future survival

The oil industry doesn't predict anything like that, but it is vulnerable, very vulnerable. The industry has a "soft belly:" the collapse of the demand. That is, we don't need governments to enact draconian regulations: if the market for a product disappears, then the industry producing it will disappear. Can it happen? Yes, it can.

The key point of the oil industry's vulnerability is in the need of large investments to keep the whole thing moving. Facing increasing production costs, they have been able to survive by growing and exploiting economies of scale. This has been possible because investors thought they were investing in a growing industry. 

But things have been changing and the market of the oil industry is at risk. Consider that typically a good 50% of the oil industry production is gasoline. To this, you may add about 20% of diesel fuel and the result is that some 70% of the output of the industry is for internal combustion engines used for transportation. 

So far, this has been a growing market, but the electric transportation revolution is coming, and not just that. There is a whole systemic change under the concept of "Transportation as a Service" (TAAS). The combination of the diffusion of electric vehicles and the optimization of the system may rapidly reduce the demand for gasoline and diesel fuel.

We don't need a large reduction in the demand for transportation fuels to generate a spiral of decline for the oil industry. Less demand means less production, less production means the loss of economies of scale, and the loss of the economies of scale means higher costs that translate into higher prices which also depress the demand. And so it goes until it reaches the bottom. 

As Lucius Annaeus Seneca said, long ago, "ruin is rapid". And the ruin of the oil industry is not a bad thing for the earth's ecosystem and for us all. 



__________________________________________________________________

Notes: 

- According to this interpretation, Elon Musk is the most subversive person in the world. Also, the most subversive thing you can do, nowadays, is to buy an electric car. In my case, I drive an electric motorcycle although I must confess that I still have and drive an old hybrid, not yet a fully electric car. I hope to be able to do better in the near future.

- Did you ever ask yourself why Elon Musk and his company, Tesla, are so ferociously and continuously attacked everywhere? Well, read the note above and you'll understand. 

- The "soft belly" phenomenon described here is relative to the oil industry, but it doesn't apply to the other two sectors of the fossil fuel production: coal and gas, which produce mainly electricity, not fuel. At least, it could avoid the true catastrophe that would occur if someone were to decide to move toward technologies such as "coal to liquids" and "gas to liquids."

- A similar concept to the one discussed here, demand management ("bottom-up) as superior to supply management ("top-down") has been described by Carolyn Hansen and Raj Thamotheram in a recent draft article which appeared on linkedin.






Sunday, November 12, 2017

Are you ready for a new round of mass exterminations?

This article is reposted from INSURGE. 

The great “pulse” of mass exterminations that occurred during the 20th century (graph created by Rummel). According to this chart, 262 million people were exterminated during the last century, mainly by governments in a series of actions that Rummel defines as “democides”. The question is, could something similar occur in the future? It turns out that mass exterminations are like earthquakes, their occurrence cannot be predicted exactly; but we can estimate the probability of an event of a certain size to occur. And the more time passes, the more likely a new pulse of mass exterminations becomes.



In this sobering exclusive analysis for INSURGE, Professor Ugo Bardi dissects historical statistics on war to unpick the patterns of violence of the past and uncover what this says about the present — and our coming future. He warns that statistical data suggests we are on the brink of heading into another round of major wars resulting, potentially, in mass deaths on a scale that could rival what we have seen in the early 20th century. Far from mere doom-mongering, Bardi’s warning is based on a careful assessment of statistical patterns in the data.Such a future, however, may not be set in stone — given that for the first time we are able to assess our past to discern these patterns, in a way we could not do before. Perhaps, then, the path to freedom from the patterns of the past remains open. The question is: what are we going to do with this information?


Humans are dangerous creatures; this much is clear. During the 20th century, about one billion humans were killed, directly or indirectly, by other humans.

Not all these murders were intentional, but a good fraction was, including some 262 million people killed in what Rummel calls “democides”, the government-organized extermination of a large number of people for political, racial, or generally sectarian reasons.

If we add the number of people murdered piecemeal (maybe 177 million during the 20th century), the total is nearly half a billion people killed in anger by other people.

Considering that about 5 billion people died during the 20th century, we can say that during that century the probability of dying killed by another person was about 10%. Not bad for creatures who claim to have been created in the image of a benevolent God.

No other vertebrate on Earth can do anything even remotely comparable, even though chimps and other apes may be cruel with their kin and occasionally engage in skirmishes which we could define as small-scale wars.

Today, by comparison with the turbulent mid-20th century, we appear to be living in a relatively quiet period and it has been argued by Steven Pinker that our times are especially quiet in comparison to the past (though exactly how quiet remains a matter of debate). But there is a big question: for how long will the lull last?

It is, of course, a very difficult question, to say the least. Nevertheless, a good way to be prepared for the future is to look at past trends. In the case of mass exterminations, the historical data is scarce and unreliable, but we do have some. The Conflict Catalog (here) is authored by Peter Brecke and contains information on 3,708 conflicts, going back to the 15th century. It is a good place to start.

The “War Fatalities” data in the Conflict Catalog includes both civilian and military victims, even though they don’t seem to include those mass exterminations that didn’t involve military operations — for instance the extermination of the Native Americans in North America. Nevertheless, it is a fascinating set of data. Here is the plot.


You see that the graph is dominated by 20th century wars, with the Second World War marking the historical maximum. It doesn’t mean that earlier times were quieter: let’s zoom into the data by plotting them on a scale that expands the data bars by a factor of 10.




Now, you see better the bursts of war in the past, including the Thirty Years War during the early and mid1600s, as well as the French Revolution and the Napoleonic wars during the late 1700s and early 1800s.

Now, let’s zoom in by another factor of 10, and see the result:



Now, the periods that looked quiet don’t seem to be so quiet, after all. War seems to be endemic (and sometimes epidemic) in human history, at least during the past six centuries.

So what can we say about this data?

A first point is the apparent increase in intensity with time. But the data are not corrected for population growth, which seems to be a key factor explaining the increasing trend.

For instance, the worldwide democide pulse of the 20th century generated 260 million victims for a world population of about 2.5 billion people. The Thirty Years War in Europe, during the 17th century, caused some 8 million victims in the European population which, at the time, was 80 million people. The ratio is nearly the same in both cases: about one person in 10 was killed. It seems that the intensity and the rate of major conflict pulses are approximately constant in proportion to population.

Do we see any evidence, then, of a periodicity of the data? Apparently not in the plots above. But we could try to smooth the curve by averaging. Here are the results shown in a plot made by “OurWorldInData.” This data is the same that I plotted before, but on a logarithmic scale. The data has also been smoothed and the result is the red line.






At first glance, this graph seems to indicate a periodicity of about 50 years, but that may not be true. Look carefully: the cycles are not all of the same duration.

So, the oscillations are probably mostly an artifact of the smoothing. In reality, mass exterminations don’t seem to be cyclical. Rather, they seem to follow a “power law” — that is their probability is inversely proportional to their size (Roberts and Turcotte (1998) and Gonzalez-Val Rafael (2014)).

It is a result that we have to take with caution because the data is uncertain and scarcely reliable, especially over long time spans. But it seems reasonable: it puts wars in the same category of forest fires, avalanches, landslides, earthquakes, and more.

All these events have a common characteristic: large events are triggered by small ones. A rolling pebble may generate a landslide while an abandoned lit cigarette may generate a forest fire. It is the same for wars, where the tendency of small wars to generate large ones is called “escalation.”

These events tend to follow “power laws.” It means that large wars are less probable than small ones. But we can’t say when a new war will start, nor how big it will be. It is the same for earthquakes. It is this uncertainty that makes earthquakes (and wars) so destructive and so difficult to manage.

It means that, statistically, a new pulse of exterminations could start at any moment and, the more time passes, the more likely it is that it will start. Indeed, if we study even just a little the events that led to the 20th century democide that we call the Second World War, you can see that we are moving exactly along the same lines.

We are seeing the rise of hate, violence, racism, fascism, dictatorships, rising inequality, sectarian ideologies, ethnic cleansing, oppression, and the demonization of various modern “untermenschen” (sub-humans). All this can be seen as the precursor for a new, large war engagement to come.

We are already seeing an arc of democides that starts in North Africa and continues along the Middle East, all the way to Afghanistan and which may soon extend to Korea. We can’t say if these relatively limited democides will coalesce into a much larger one, but they may become the trigger that generates a new gigantic pulse of mass exterminations.

If the proportionality of democide size with population size holds, we should take into account that, today, there are three times more people in the world than there were at the time of the Second World War. The resulting 21st century democide could therefore involve anything between half a billion and a billion victims, or even more; especially considering that this time nuclear weapons could be used on a large scale.

Can we do something to avoid this outcome? According to Rudolph Rummel (1932–2014), who studied wars all of his life, democracies are much less likely than dictatorships to engage in wars. In this interpretation, promoting democracy could be a good way to avoid wars.

This is debatable: we might question the extent to which Western democracies have really refrained from engagement in wars. Or we might say that a healthy democracy is an emergent property of a sane society just as war is an emergent property of a sick one.

So when a society gets sick, impoverished, divided, and violent, it gets rid of democracy and engages in war. It seems to be exactly what’s happening to us nowadays: we are weakening and jettisoning democracy, and gearing up for a new, large pulse of mass exterminations.

The past 50 years or so of relative calm, at least between Western states, may have deluded us into believing that we have entered a new era of ‘long peace’. But that may have been just an illusion if we look at the continuous eruptions of warfare of the past half millennium. Wars seem to be too inextricably linked to human nature for it to be stoppable with mere slogans and goodwill. Theoretically, everyone is against war, but when flags start waving, reason seems to fly away with the wind.

Yet, there is more to be said on these trends. It is often said that all wars are for resources, but this may not be true. Wars need resources. You could say that resources generate wars, rather than the opposite. So, the great cycle of growing democides of the past half-millennium has taken place against a background of increasing population and wealth accumulation. That made it possible to build and maintain the social and military apparatus needed to make wars.

But now? Clearly, we are seeing the start of a phase of dwindling resource availability. Mineral resources are becoming more expensive, arable land is being rapidly depleted of nutrients, the atmosphere is being poisoned and climate is rapidly changing in ways that are going to harm humankind to levels which, at present, we can’t even imagine. There is less and less surplus to be invested in wars.

Of course, there are still plenty of reasons to go to war against each other; in particular to take control of the remaining resources. And it is also true that democides don’t need to be expensive; some recent democides such as the one which took place in Rwanda in 1994 did not require more sophisticated weapons than machetes. Then, it may be even easier to engineer a democide by denying low-cost medical assistance to the poor.

Yet, there remain great uncertainties as we are rolling over to the other side of the great cycle of what we call the “industrial civilization” that spanned several centuries.

While wars and exterminations were a common feature of the growing phase of the cycle, will they also be in the declining phase? We can’t say. What the future will bring to us, only the future will tell.

But for the first time in human history we are able to look back at the past with a birds-eye view that can inform us of the patterns of behaviour we are bringing into that future — thus, for the first time, perhaps, we can collectively learn from the lessons of our past to create a future with somewhat different patterns.


Ugo Bardi is Professor of Physical Chemistry at the University of Florence, Italy. His research interests encompass resource depletion, system dynamics modeling, climate science and renewable energy. He is a member of the scientific committee of ASPO (Association for the Study of Peak Oil) and blogs in English on these topics at “Cassandra’s Legacy”. He is the author of the Club of Rome report, Extracted: How the Quest for Global Mining Wealth is Plundering the Planet (Chelsea Green, 2014) and The Limits to Growth Revisited (Springer, 2011), among many other scholarly publications.



Wednesday, November 8, 2017

The Seneca Paradox: if mineral depletion is a problem, how is it that we don't see its effects?



With oil prices remaining low and with production apparently more than sufficient to satisfy the demand, most people have jumped to the conclusion that all mineral resources are abundant and not a concern for the foreseeable future. Yet, the problem remains: mineral resources are not infinite. The solution to the conondrum may be in the "Seneca Effect." It is an insidious kind of effect that hides future risks behind an apparently safe and robust growth. 


The story of the Club of Rome starts with the issue of natural resources. In the 1960s, it had become clear to the Club's founder, Aurelio Peccei, that the world's resources were finite and to ask the question of how that was to affect humankind. It was the origin of the first and the best-known report to the Club of Rome, "The Limits to Growth," published in 1972.


The 1972 report already provided answers to the question of depletion. It turned out that resource scarcity would limit the growth of the world's economy and, eventually, lead it to decline. This conclusion was often misunderstood as meaning that humankind would soon "run out" of oil, gas, or some other resource; but that was never stated in the report and it never was the point.


In 2014, the Club of Rome produced another report titled "Extracted" in English and "Der Geplunderte Planete" in German that reiterated the earlier conclusions. The author of the report, Ugo Bardi, a researcher at the University of Florence, Italy, concluded that the problem of mineral depletion was real and that it was progressively getting worse.

Yet, these conclusions are far from being generally accepted. Depletion, it seems, is still considered a non-problem, especially in the extractive industry. "If depletion is really a problem," industry representatives often say, "how come that we are still producing mineral commodities at the highest rates ever seen in history? Besides, we observe that our production costs are not significantly increased when we use lower grade ores."

So, is mineral depletion an existential threat to human civilization? Or is it just a marginal problem that can be fixed by some technological improvements? This is truly a fundamental question for the future of humankind. An answer is provided by the latest report to the Club of Rome that was published in 2017, "The Seneca Effect."

Taking inspiration from something that the ancient Roman philosopher Seneca said, the author of the study, Ugo Bardi, examines the trajectory of an economic system subjected to the dual strain of mineral depletion and pollution. The result is the "Seneca Curve", a graphical depiction of Seneca's statement that "Increases are of sluggish growth, but the way to ruin is rapid." It is something well known in everyday life, but the study could confirm it using mathematical models. Here is the curve as calculated by simulations.


The "Seneca Effect" or the "Seneca Paradox" explains why mineral depletion is a problem but, at present, we are not feeling its effects. We haven't yet reached the summit of the curve and we are not seeing the cliff awaiting us. So far, the extractive industry has been able to mask the effects of depletion by means of economies of scale. That has been possible as long as production keeps increasing, which has been the case up to now for most mineral commodities. The problem is that this strategy cannot last forever: mineral resources are not infinite. 

A good example of this effect can be found in the oil industry. At present, all fears of "running out" of oil seem to have been dispelled by the low market prices and by the still increasing production. Both factors give the impression of an abundance of cheap oil that could last for a long time - if not forever. But this is exactly the result of the shape of the Seneca Curve. As long as we don't reach the start of the cliff, we don't see it. 

But ruin, as Seneca said, may be rapid. Consider the current climate situation and the urgent need of reducing carbon emissions. Consider the rapid switch to electric vehicles, often seen as a way to fighting climate change. Consider that in the US more than 60% of the market for crude oil product is for private vehicles. Then, you see that if people were to start replacing their old cars and trucks with electric ones (something that they should do by all means for the sake of our survival), the oil industry would lose a big bite of its market. 

For the oil industry, losing a significant fraction of their market is not just a question of downsizing;  it is their death knell. It is here that the "Seneca Effect" starts playing its role. The economies of scale which had allowed the industry to overcome the effects of depletion become diseconomies of scale, increasing costs and reducing profits. The industry becomes unable to attract new investments; it starts shrinking and eventually disappears: it is what Seneca said, "ruin is rapid". 

The decline of the oil industry has already been ongoing in several regions of the world and the loss of efficiency due to scaling down is well documented (see, e.g. Hall et al. 2014). In recent times, the US industry has been able to start a new cycle of oil extraction with "Shale oil" (more properly, "tight oil") but that simply means to postpone the unavoidable and the Seneca Cliff of shale oil may be just around the corner. 

Humankind is facing a difficult situation right now, with the twin threats of depletion and pollution working together to cause a decline that could be very rapid, as it is has been often the case for past civilization. The "Seneca Effect" makes the situation all the more insidious because at present we have only a few hints of the future decline but when we will see the cliff in front of us it may be too late to avoid it in full. 

Yet, today we have powerful tools in the form of the science of complex systems. If we are willing to use them, these tools allow us to understand the future and to be prepared for it. If we understand the threats we face, they may be seen as opportunities. So, the impending ruin of the oil industry is not a threat but an opportunity to avoid, or at least mitigate, a future climate disaster. 

Once we understand this point, the strategy becomes clear: do not fight the unavoidable; do not try to keep the oil industry alive at all costs; that's exactly what makes the Seneca Cliff steeper. Instead, favor the unavoidable change. it means helping the oil industry to disappear by favoring its replacement by something less polluting and more sustainable. Similar strategies are possible for many polluting industries still common today.

As always, the future is nothing but the choices we make and there is still time to make good choices. The Seneca cliff of the human civilization will happen only if we choose to make it happen. 










Monday, November 6, 2017

Lawsuits in science: the Jacobson vs. Clack case


Recently, Mark Jacobson, researcher at Stanford University in California, filed a libel lawsuit against the US National Academy of Sciences (NAS) and Christopher Clack who published a study in the academy's journal that criticized Jacobson's work. Was it a good idea? Well, I think not. Let me tell you a little story about that



Several years ago, in 2003, I published my first book on crude oil (in Italian). Not long after, I found on the Web that the president of a well known Italian organization of professional economists had written on their website that, "I bought Ugo Bardi's book and I found that it was written by an incompetent in order to cheat the public and make some money" (something like that, in Italian).

What made me really angry about that was not so much being defined "incompetent" by an economist; that may be seen as an honor under some respects. It was that I knew that he had not bought my book. I had given a copy to him as a gift once that we had met during a public debate on an Italian TV channel. And now he whined about having spent money that he never spent. It truly made me see red.

So, I went to see a lawyer and he told me that, yes, this was a clear case of slander and I had all the rights to sue the guy and asking for a compensation from him for having besmirched my good name of a professional. And that was what I did - I sued him.

In life, everything you do is always an experience and this lawsuit was not an exception. It seemed to me crystal clear that I was right and he was wrong: apart from not even having paid for a copy of the book he was criticizing, his criticism was just gratuitous slander. Yet, I discovered with this lawsuit that whatever the law says can be interpreted in various ways and that's after all why lawyers exist. In theory, I had a strong case against my opponent. In practice, I soon discovered that he had much more clout than me and that he could muddle the waters quite effectively.

I'll spare you the various details of the story. The main point is that my opponent's lawyer endeavored to demonstrate that his client was right in defining me an incompetent because that was what I was. How could he demonstrate that? Well, it was all about the TV interview when I had given a copy of my book to his client. Apparently, my incompetence had been so glaring in that occasion that everyone had noticed it. So, the lawyer requested a record of the interview and also asked everyone who had been present what had been said. Specifically, whether I had been able to answer the questions I had been asked.

You may not believe that, but at some moment the lawsuit turned into a discussion about whether the day of the interview I could exactly quote how many barrels of oil were buried in some remote place of Central Asia. Since I had said that I didn't know that, it was clear proof that I knew nothing about crude oil and how was it that I had written a book on that subject? It could only have been a scam in order to cheat the public and make some money.

For a scientist, it is unbelievable that decisions about someone's competence can be taken on the basis of such flimsy factors such as what someone said in a particular occasion, but it is what politics is about. It is the way the political debate works and if you are a scientist and you don't know that, well, tough luck for you.

Eventually, this story exhausted everybody and we found an agreement in which my opponent agreed to pay for the legal expenses and a trifle more as compensation - an amount that didn't even remotely repay me for the time I had lost. And that was the end of it, fortunately.

So, there are a few things that I learned from this story. The first is that you never, never, never say in public "I don't know" about something you might be supposed to know, even if it is a marginal detail. It is one of the oldest tricks of the arsenal of propaganda: someone asks you a question, you say you don't know the answer, which you think is an honest thing to say, and that immediately becomes proof that you are incompetent in everything. Never fall into this trap! If they ask you something you don't know, change subject, answer another question, invent something, insult somebody else. But never, ever say "I don't know". Think about that, do politicians ever do that? (*)

The second thing I learned is that you never, never, never sue someone unless there is some specific reason that goes well beyond revenge. It is a lot of lost time, it is expensive, there is a huge risk of losing plenty of money and even if you win, it won't be a big gain. Then, why in the world should you embark on such a silly enterprise? Think about the story I just told you: I had seriously risked being officially declared an incompetent by a tribunal! And not just that; you know that the press and the social media don't need proof to brand someone an incompetent. That Ugo Bardi was an incompetent could have gone viral and become part of the common knowledge about me. But the worst thing could have been for me of being accused of having tried to silence the people who didn't think like me because I was in it just for the money. Or maybe just because I was evil.

Fortunately, these events took place well before social media had become what they are nowadays. The fact that it was all in Italian also helped. The noise died out quietly and now this story is basically forgotten.

Now, let's return to the present time and about Mark Jacobson having sued NAS and the authors of an article criticizing his work. Was it a good idea? Honestly, I think not. I have read some of the material related to the lawsuit: it seems to me that Jacobson may have some good reasons for suing but also that his case is far less clear-cut than it was for my case, when I had sued the economist I was telling you about.

But the point is another one: it is clear that this story will go political. It is already going political as you can read here, here, and here. Jacobson is taking a lot of flak from an array of sources engaged in denying current climate science and disparaging renewable energy. He is being accused of trying to intimidate his opponents, of lying, of being intolerant of other people's opinions; the usual stuff. When the debate goes political, nearly everything becomes legitimate and we live in an age when everything can become the obvious truth when it is amplified by the social media. And so, independently of how the actual lawsuit will end for Jacobson, I think this story is not going to end well for science.




(*) I have another example of the damage that comes when you say in public that you don't know something. It happened to me when I made the mistake of engaging in a discussion with a climate troll. He asked me a series of abstruse questions about the temperature of the atmosphere and I told him that he should have asked a specialist in atmospheric science. That led to a brief viral burst of messages on the Web stating, "Professor Bardi really doesn't understand much about climate science." It was all in Italian and, fortunately, it disappeared rapidly. 






Saturday, November 4, 2017

Keeping the Morale High: Measuring Pollution by Simple Instruments

I think it was General Heinz Guderian who said that when the morale of the soldiers is low, especially when they are in a defensive position, you give them something to do, for instance preparing an attack. And I think the situation in which we are requires something like that. It doesn't mean having people physically attacking someone, but taking an active role; doing something.

Here, Miguel Martinez reports about the installation a pollution measurement device in Florence, the Airquino, in a public garden managed by the Nidiaci Commons. The instrument is very simple and it provides data on various atmospheric pollutants. It is a way to take an active role in fighting pollution and keeping the commons alive and well. A good idea coming from Italy!


The Air as Commons at the Nidiaci

By Miguel Martinez

On Wednesday November 8, technicians of the Institute of Biometeorology of Italy's National Research Council will come to the Nidiaci Commons in Florence's Oltrarno to install the first AIRQuino device in the district.


This is a simple plastic box, with a sensor and a chip which can accurately detect all the main air quality parameters and updates the data every two minutes.

This project, funded by the Regional Authority, aims at creating a dense network of small, very low cost monitoring stations, next to the official network of stations. The latter perform better, but are far more costly and there are only seven in all of Florence.

The Nidiaci garden, right behind the Carmine church where Masaccio ushered in the Renaissance, is run as a Commons by the families of the Oltrarno district. Their Impatto Nidiaci project focuses on spreading awareness and improving the quality of life of the residents of this historic district.

A district overrun by tourists and traffic, where an understaffed cooperative has to clean all the public parks according to an impossible schedule: when they do manage to come, everything from used nappies to electric batteries to the leaves from the trees is sent to the incinerator.

In the last few months, the families have introduced separate waste collection, set up an educational garden, imposed a smoking ban in the garden, purchased solar lamps to provide more sustainable lighting, used the leaves from the trees – hitherto thrown away in the general waste as in all public gardens in Florence – as compost.

The AIRQuino project will allow residents to become directly active in monitoring their own quality of life. To understand the operation of the AIRQino, Italian speakers can watch Italian speakers can watch this video.


Wednesday, November 1, 2017

A Seneca Cliff for the Web as we know it?





We can't ignore the evidence any longer. The "Web", intended as a constellation of independent information providers is dying. It is going through a Seneca Cliff of its own, being replaced by a "Trinet", controlled by the three giant companies, Google, Amazon, and Facebook.

I have been noticing it with the stats for "Cassandra's Legacy". You can see how the decline in the number of contacts has been steady over the past year. Here are the stats:



We don't yet see a Seneca Cliff, that is a rapid drop in the audience (don't look at the drop at the end of the graph; it is just because the data are for the current month). I think it is mainly because I have been trying to contrast the decline by publishing more posts, but that has not been sufficient to change the trend. Here are the data for another blog of mine, "Chimeras"



In this case, the blog used to be visited by students looking for text to cut and paste for their term papers on mythology. They are not coming anymore; evidently, they found other sources of information. Or maybe the search engines don't lead them to my blog anymore. Hard to say, but it is a fact.

So, what's happening? As always, things change and, in our times, tend to change fast. Many of us can remember the "age of mass media," now obsolete as steam engines and mechanical calculators. It looks incredible that there existed a time when everyone was exposed to the same information, provided under strict control by the government. In the Soviet Union, it was under control of the Communist Party. The West was theoretically more open but, in practice, you had access only to information that was controlled by one or the other of the two parties sharing power.

Now, in an age of privatization, every one of us has picked up the job that once was in the hands of the dominant party (or parties). We have become our own censorship agents and we have been busily building up walls to keep away from us information that goes against our individual party line. It is the concept of "information bubble," or "echo-chamber," or "walled garden."

The difference is that, while once the different echo-chambers were aligned along national borders, now they are fragmented in a pattern embedded within the various language islands of the Web, of which the English one is probably still the largest, at present. Add to this fragmentation the fact that people's brains are different and the result is the phenomenon called "opinion polarization". People across the street where you live will behave in ways that are completely incomprehensible to you if they happen to be part of a different information bubble. And chances are that you'll see each other not only incomprehensible but truly evil.

Nowhere this phenomenon is more evident than with the actions of the Trump administration. If you are a reader of this blog, you are likely to think that actions such as supporting coal burning and removing the environmental protection legislation are not only incomprehensible but evil. But they are perfectly understandable if you think that they are taken by people who live in an information bubble where it is an accepted fact that climate change is a hoax concocted by the left in order to impose a world dictatorship and enslave the American people.

It doesn't matter how powerful you are, even if you are the president of the United States, you are still sensitive to the echo-chamber effect. Again, the situation is not much different than it was when dictators tended to believe their own propaganda.

So, where are we going? I think we can say that the Web is like an ecosystem and that it is being colonized by informational lifeforms which compete and evolve in order to occupy as much virtual space as possible. What we are seeing nowadays is just a phase of a continuing evolution: changes are ongoing, and everything will change in the near future in ways that are difficult for us to understand.

The main problem, here, is not so much the evolution of the virtual ecosystem of the Web but the fact that we - as human beings - live in a real ecosystem and that this real ecosystem is being disrupted by what we are doing to it. The virtual and the real ecosystem interact in the sense that our view of the real ecosystem is filtered by the virtual ecosystem to which we have access. But while there are many possible virtual ecosystems, there is only one real ecosystem. And if we destroy it, as we are doing, the virtual echo-chambers won't keep us alive.

But, after all, the real ecosystem is the result of the virtual ecosystem stored in the DNA of the creatures populating it. If the model stored in the DNA turns out to be bad for the survival of the phenotype it creates, then that DNA is ruthlessly eliminated from the genetic pool of the planetary biota. The same will be the destiny of the bad echo-chambers of the Web. And so it has been and it will be. It is the way the universe works.



Monday, October 30, 2017

Biofuels: Can They Save the Airlines from the Seneca Collapse?


Painting planes green is much easier than making them run on biofuels.


"Can the airlines be run on biofuels?" As it often happens, this simple question doesn't have a simple answer. First of all, it is a question that makes sense only in terms of a "sustainable" plane, that is one that doesn't run on fossil fuels. That's a major technological problem. Whereas cars can be made to run on battery-powered electric motors, the power/weight ratio of the combination is simply unacceptable for a passenger plane that could provide a performance comparable to that of current jet planes. Hydrogen planes have been proposed, but they are a nightmare for several reasons and it is unlikely that they could become practical in the short and medium term future.

That would leave only biofuels as a "sustainable" fuel that could power the current fleet of jet planes. Indeed, a small number of tests have been carried out showing that it is possible to fly planes using biofuels. But can it be done on the large scale needed to get rid of fossil fuels?

The first problem is whether biofuels are truly carbon-free. Most likely, the current fuels made from crops are not; in the sense that they involve extensive use of fossil fuels for their manufacturing. In many cases, however, even the current generation ("1st generation") of biofuels can provide a significant saving in the use of fossil fuels for the same amount of energy produced. This is the case, in particular, for ethanol produced from sugarcane in Brazil. But there is a more fundamental question is: what would be the consequences of ramping up biofuel production to the levels needed to power the current airline fleet?

In a recent paper on Nature, Rulli et al. discuss the effect of the large scale cultivation of 1st generation biofuels on various parameters of the world's economy, including the global food supply. They don't specifically examine the needs of airlines, but we can use their results for analyzing this sector. First of all, the total amount of jet fuel consumed in the world is reported to be 6,000,000 barrels per day. It corresponds to about 7% of the total world combustible liquids production, but note that jet fuel is a refinery product, so the actual fraction is larger. But let's stick with 7% for lack of better data. We may consider this value as approximately the fraction of transportation energy used by airlines since crude oil represents 93% of the total.

Rulli et al. estimate that if we were to arrive at a 10% reliance on biofuels for the world's transport, that would leave food for no more than 6.7 billion people and, since the current world population is about 7.6 billion people, almost one billion people would starve. Now, since the airlines consume about 7% of the world's transport energy, feeding the airlines with biofuels would move us dangerously close to the threshold that would lead to killing a large number of people for the purpose of keeping planes flying. Maybe that won't happen if we are careful, but it is not impossible.

Of course, these data are for first-generation biofuels. There is much enthusiasm for 2nd and 3rd of second and third generation biofuels from cellulosic plant tissues or algae which, theoretically don't impact on the food supply. Sure, but today the production of these fuels is non-existent or at best negligible. How long will it take to ramp up their production to the levels we are discussing here? And are we sure that they will work as promised?

The problem, here, is not just a technological one. We are dealing with a complex system, the world's economy coupled with the planetary ecosystem. In these systems, you can't change just one thing and leave all the rest unchanged. Once we start to produce biofuels on a very large scale, it becomes extremely difficult to stop at a certain threshold. If we have a product and a market for it, both tend to expand and it is nearly impossible to stop the expansion of something that generates a profit.

That would bring big problems, to say the least. Rulli et al. estimate that arriving to supply 1st generation biofuels in an amount corresponding to 20% of the transport energy would leave no more than 4.4 billion people alive in the world. That is, it would kill some 3 billion people. Or, if dealing with 2nd or 3rd generation biofuels, it would lead to whatever disaster generated by the appropriation for humankind an even larger fraction of the planetary photosynthetic activity than it is done today. The ecosystem has limits, after all.

Unfortunately, it is unlikely that ethical considerations would affect decisions in this field. The system is made in such a way that if producing fuels for the rich is more profitable than producing food for the poor, which is normally the case, the system will produce fuels, even though that implies killing billions of people. So, we can only hope that biofuels will turn out to be too expensive even for the rich; but that may not be the case. With so much research and development ongoing, production costs might be lowered enough to turn biofuel into an effective weapon of mass destruction (and I wouldn't be surprised to discover that this is one of the reasons why biofuels are promoted so aggressively in some quarters).

Or, more simply, we may hope that the Seneca Collapse of the world's economy will take care of the "airline problem" once and for all. As I said many times, the Seneca Cliff is not a problem, it is an opportunity. In this case, it could lead us to develop better transportation technologies; more efficient and more benign for the ecosystem - although probably slower. But that's not a problem, either. It is an opportunity to travel only when you need to, and to enjoy the trip, too!




 Some further data on the extent of land needed for the cultivation of biofuels for airlines. 
First of all, the total amount of jet fuel consumed in the world is reported to be 6,000,000 barrels per day . It corresponds to about 7% of the total world combustible liquids production. Now, we need to compare the values measured in barrels with the needs of the airlines, measured in liters. A barrel contains 159 liters, so 159*6=1000 makes about 1 billion liters/day, or 3.6x10^11 liters/year. Let's now consider the most efficient biofuel production: ethanol from Brazil's sugarcane. It can produce 6000 liters/ha per year  http://biotechnologyforbiofuels.biomedcentral.com/articles/10.1186/1754-6834-1-6  Note that ethanol is not as energy dense as jet fuel. It has only about 70% of the energy density of gasoline http://www.afdc.energy.gov/fuels/fuel_comparison_chart.pdf. Which means that the airlines would consume 3.6*10^11/0.7 = ca. 500 billion liters of ethanol/year. 
So, assuming that the whole production of Brazilian ethanol is dedicated to airplanes, we would need more than 80*10^6 hectares (eighty million hectares). The total arable land in Brazil is reported to be: 75 Million ha. http://www.tradingeconomics.com/brazil/arable-land-hectares-wb-data.html It means that the whole agriculture of Brazil should be dedicated only to produce fuel for the airlines. 
That is, of course, absurd, but it is also true that the world's total arable land is = 1,407 x10^6 ha (https://en.wikipedia.org/wiki/Arable_land), about 20 times the area available in Brazil. So, the airlines would need only about 5% of the total which is, by the way, just slightly larger than the global arable area used for biofuel production today  (about 4%)  http://www.nature.com/articles/srep22521. But note also that not all the arable land has the same good productivity as the land used for sugarcane production in Brazil, so the real fraction needed would have to be considerably larger than 5%, probably still less than 10%. How many people would starve if we were to arrive to that, it is impossible to say. 


Saturday, October 28, 2017

The Seneca Cliff of the Gold Industry.






This article is reposted from Steve St. Angelo's website with the kind permission of the author. It illustrates a typical theme of the "Cassandra's Legacy" blog, the fact that all human enterprises are dynamic; they evolve, change, and adapt to the challenges generated by the environment. 

In particular, the mining industry follows a typical dynamic cycle of exploitation generated by the gradually declining profits that come from mining less and less concentrated ores. It is true for crude oil and it is true for gold as well. The latter is perhaps the mineral mined today at the lowest possible concentrations. For gold, concentration (or ore grade, if you prefer) is the crucial parameter that determines the cost of production. As a consequence, the gold mining industry is especially fragile and vulnerable to depletion coupled to market oscillation. The current situation is explained by Steve Rocco in detail in this fascinating and informative post. 


THE FRAGILE GOLD INDUSTRY: Gigantic Equipment, Massive Capital Expenditures & Rising Costs


The gold industry has been built on the leveraging of debt and energy.  The days of using human and animal labor to produce the precious yellow metal are long gone.  While some gold is still mined the old fashion way, the overwhelming majority is produced by using colossal-sized mining equipment, massive amounts of capital, energy, and materials.  Thus, the global gold supply comes via a very complex industry with a lot of moving parts.  When one of these critical parts are in short supply or removed, then the entire gold supply system disintegrates.
An example of one of the newest complex gold mines in the world is the Pueblo Viejo Mine in the Dominican Republic, owned by Barrick (60%) and Goldcorp (40%), which cost a staggering $3.7 billion to build.  The Pueblo Viejo Mine started production in 2013 and is now running a full capacity.  Gold production at the Pueblo Viejo Mine is over one million ounces per year.  According to Barrick, it’s cost of sales at Pueblo Viejo was $564 an ounce in 2016.  However, cost of sales does not include “all costs.”  We must also factor General and Administrative, Exploration-Evaluation, Mine Closure and Income Tax expenses.
However, these additional expenses do not include the initial $3.7 billion cost to build the mine.  According to data, the Pueblo Viejo Mine has approximately 15.5 million oz (Moz) of proven and probable gold reserves.  Even though additional gold discoveries at the mine will be added in the future, if we assume a 15-year initial payback period, the annualized capital cost would be an extra $250 per oz of gold produced.
Thus, the $564 cost of sales plus $250 capital cost now equals $814 an ounce.  But, this does not include the additional expenses which would push the actual total cost from the Pueblo Viejo Mine over $900 an ounce.  This is just my simple calculation which shouldn’t be compared to the industry’s more complex accounting of Net Present Value.  Even though the Pueblo Viejo Mine is Barrick’s lowest cost gold mine in the company, Barrick’s total cost to produce gold last year was $1,125, based on the $1,251 spot price.  Again, that is my simple “Net Income Break-Even Analysis.”
Regardless, the Pueblo Viejo Mine is a very advanced complex mine that processed 7.5 million tons of ore to produce the 1.1 Moz of gold last year.  According to Barrick’s 2016 Sustainability Report, the Pueblo Viejo Mine consumed the following in 2016:
Pueblo Viejo Mine Materials & Energy Consumed:
  1. 4.9 billion gallons of water
  2. 3,100 metric tons cyanide
  3. 338,000 metric tons lime
  4. 18.7 million GigaJoules of Energy (3.1 million barrels of oil equivalent)
There are many other materials not included in that list above, but the ability to produce gold at the Pueblo Viejo Mine is only possible from a very complex supply chain.  The majority of materials and energy consumed by the Pueblo Viejo Mine has to be transported to the Dominican Republic Island in the Carribean.
For example, Barrick’s mining equipment fleet at the Pueblo Viejo Mine includes following (info from OSIsoft Report):
  1. (34) CAT 789 Haul Trucks
  2. (2) Hitachi 3600 Shovels
  3. (3) CAT 994F Front Loaders
  4. (30) Support equipment
The estimated maintenance budget for just the haul truck fleet is $18 million.  And when one of the 34 trucks goes out of service, it cost one hell of a lot of money.  The truck downtime cost is $700 per hour.  The six tires the CAT 789 Haul truck uses cost approximately $30-40,000 a piece and last a little more than a year.  The CAT 789 Haul truck gets about 0.3 miles per gallon.
(CAT 797F transported by Mercedes Semi-tractor)
Now, the featured picture (above) that I used for this article is not the CAT 789; it is the CAT 797.  The CAT 797 weighs twice as much as the CAT 789, used at the Pueblo Viejo Mine.  However, I just wanted to give an idea of just how big these haul trucks can get.
Furthermore, the mining, excavating and hauling of ore out of the Pueblo Viejo Mine is controlled by high-tech computerized systems.  The hauling of the ore by the large truck fleet is monitored by state of the art technology that designs the most efficient method to remove the ore out of the mine, so very little time is wasted.  Again, time is money.
We must remember, the more technology that is used in a system, the more complex and fragile it becomes.  Of course, technology is great at making large operations run more efficiently and faster, but the downside is that if one or more critical parts are removed, the complex mining system breaks down.  What would happen to gold production at the Pueblo Viejo Mine if cyanide becomes in short supply?  Without cyanide, the processing of gold ore grinds to a halt.
While I have provided one example of the enormous cost and massive amounts of capital needed to produce gold and one mine, let’s take a look at what is going on at the top 8 gold mining companies in the world.

Top 8 Gold Mining Companies Costs & CAPEX Spending Surge

It is quite amazing how much more it costs to produce an ounce of gold today than it did at the beginning of the century.  The huge rise in the total cost to produce gold is why the price is nearly five times higher.  Unfortunately, many precious metals analysts suggest that the increase in the gold price is due to either market sentiment or increased demand.  I have stated in several articles that the tremendous increase in the gold price was due to the rise in the price of oil:
However, there are additional factors that also impact the cost to produce gold.  For example, the gold mining industry now has to move a great deal more ore to produce the same amount of gold it did in 2000.  The next chart shows the falling yield in the top gold mining industry from 2005 to 2013:
In just eight years, the top five gold miners experienced a near 30% decline in average gold yield from 1.68 g/t (grams per ton) to 1.2 g/t.  If we went back five more years to 2000, I would imagine it would be closer to a 40% decline in average yield.  Thus, it now takes the processing of 40% more ore to produce the same amount of gold today.  Which means, it now takes a hell of a lot more energy and materials to produce gold today than it did 16 years ago.
This next chart puts into perspective the increased cost to produce gold today versus in 2000:
This graph shows the increase “Cost of Goods Sold” for producing gold at the top 8 gold mining companies in the world.  Even though many of the companies have seen a decline in the Cost of Goods Sold since the peak in 2013, the overall figure is still much higher than it was in 2000.  Some of the companies included in the chart above have seen their Cost of Goods Sold increase significantly because they increased their gold production substantially.  However, Barrick did not have that excuse.
Barrick produced 5.9 Moz of gold with a $553 million cost compared to $5.4 billion in 2016 on 5.5 Moz of gold production.  Here we can see that Barrick’s Cost of Goods Sold increased ten times while production is about the same.
According to the data at YCharts.com and these companies’ annual reports, the total Cost of Gold Sold in 2000, was $4.9 billion ($4,953 million) versus $23.6 billion ($23,588 million) in 2016:
Now, what is amazing about the figures in the chart above is that the Cost of Goods Sold figure has more than quadrupled while total gold production in the group only increased by 2 Moz.  The top 8 gold miners Cost Of Goods Sold increased from $206 per oz in 2000 to $907 last year.   The huge increase in cost to produce gold is the very reason the price surged from $279 in 2000 to $1251 in 2016.  Let’s look at the comparison:
Cost of Goods Sold vs. Gold Price:
2000 vs. 2016 Cost of Goods Sold = 4.4 times increase
2000 vs. 2016 Gold Price = 4.5 times increase
So, if we removed all SUPPLY & DEMAND forces from the equation, it is quite surprising that the gold price is up by the same amount as the cost to produce gold.  However, we need to also look at the rise in capital expenditures.  During the same period, the top 8 gold miners total capital expenditures increased from $1.7 billion ($1,723 million) in 2000 to $6.1 billion ($6,088 million) in 2016:
Again, we can see that total capital expenditure (CAPEX) increased from $72 per ounce in 2000 to $234 an ounce in 2016, while overall production only increased by 2 Moz.  The group’s CAPEX spending only increased 3.2 times versus the 4.4 times in the Cost of Goods Sold, but it shows that it cost a heck of a lot more money to sustain or replace production.
If we understand that the present value of gold is tied to its cost of production, then we would realize it has a PRICE FLOOR.  Sure, the gold price could spike lower, but its average annual price has remained close to (or above) its cost of production for quite some time:
This chart represents my “Net Income Breakeven Analysis” for Barrick and Newmont, the two top largest gold companies in the world.  As I also mentioned above, Barrick’s cost to produce gold in 2016 was $1,125 when the spot price was $1,251.  Thus, the market has priced gold above its cost of production (in these two companies) since at least 2000.
Lastly, the gold mining industry needs a vast amount of materials, parts, energy as well as a very complex supply chain system to produce the precious yellow metal.  If one part of the supply chain breaks down, then it becomes extremely difficult or impossible to produce gold.  While there are many fragile aspects of the modern high-tech gold industry, I believe ENERGY is the most crucial.
Once the world starts to experience a decline in global oil production, the vast supply chain system will begin to break down.  This will impact the largest mines the most.  I will be writing more about this subject matter and also why a declining global oil supply will push the price of gold up much higher.
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Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014). His most recent book is "The Seneca Effect" to be published by Springer in mid 2017