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VK2AAB > FUEL 14.09.10 09:25l 255 Lines 14027 Bytes #999 (0) @ WW
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Subj: The Hirsch Report Book
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Interview with Bob Hirsch on his teams new bookThe Impending World
Energy Mess
by Steve Andrews
Robert L. Hirsch, Roger Bezdek and Robert Wendling have coauthored a
new publication, this time a book called The Impending World Energy
Mess: What It Is and What It Means to You, a book to be released by
publisher Apogee Prime late this month. Hirsch will present material
from his upcoming book at the October 7-9 ASPO-USA conference. Please
see the full agenda for details at aspousa.org. He has spent his
entire career working in the energy realm, from the oil sector to
numerous forms of electric power generation. In 2005, this team
published The Peaking of World Oil Production: Impacts, Mitigation &
Risk Management. Steve Andrews caught up with Bob Hirsch last week for
Steves last interview and final work with the Peak Oil Review. (Steve
co-established the Peak Oil Review the Tom Whipple some 243 issues ago
in January 2006 and has both enjoyed and enormously appreciated a very
close collaboration with Tom for nearly five years; Steve is now
moving on to other endeavors.)
Andrews: In your earlier work dating back at least five years, you
resisted forecasting a time frame for peak oil. There seems to be a
bit of a change on that front in your book. Care to comment on that?
Bob Hirsch: In years past, there was considerable uncertainty in my
mind about when the decline of world oil production might begin.
Recently it became clear to me that its going to be sooner rather than
later. I believe that the onset of the decline of world oil production
is likely in the next two to five years. And when I say oil, I mean
all liquid fuels.
Andrews: You say that once declining oil supplies hits, were likely to
experience deepening worldwide economic damage. How is that likely to
unfold? What is your most likely scenario?
Hirsch: Our thinking is that what happened in the two sudden oil
shocks of 1973 and 1979 is very likely to be repeated when oil decline
sets in. Those were two real world examples of oil shocks surprising
people and causing panic. We believe that the same kind of thing is
going to happen again, except that the problem is going to last much,
much longer because, unlike before, there will be very few unused oil
supply valves to turn on this time.
While economies have changed since the 1970s, the dependence on and
importance of liquid fuels has not. And human nature hasnt changed.
People panic when they get suddenly frightened. Even though -peak oil?
is recognized by a number of people, it is yet to be realized on a
wide scale.
In the book we avoided consideration of such things as anarchy, wars,
and other catastrophes that are conceivable. We see very little chance
that things will be any better than what we describe, but things could
easily be worse.
By the same token, we have faith that humankind is not going to
collapse because of the oil decline problem. The world is in for
considerable pain for a long time. Nevertheless, we have great faith
in human resilience. People will come around, get very pragmatic, dig
in and do whats necessary to meet the challenges. As a result, when we
get through all of this-which is going to take longer than a decade-
the societies that emerge are going to be much stronger and much more
pragmatic than they are today.
Andrews: You note that there will be no quick fixes. What mix of crash
programs are you currently recommending as the focus of any
accelerated policy efforts today?
Hirsch: We sketch practical, physical mitigation options for the
world. They are the ones we described in 2005, plus or minus a few
changes due to our being a little smarter now in some areas. In the
book, we added what we call administrative mitigation, such as forced
carpooling, forced telecommuting, and rationing. There is benefit to
be gained from those options, but their implementation will not be
simple.
For instance, rationing seems like a relatively simple concept but
after one considers the details, it is incredibly complicated due to
decisions that have to be made, the bureaucracies that have to be
built, and the enforcement that has to be implemented. Understanding
the complexities is necessary for practical decision-making.
Andrews: You introduce a new acronym in your book. What does LFROI
stand for?
Hirsch: It stands for Liquid Fuels Return on Investment. The point is
simply that if we have to invest liquid fuels into a process that is
going to produce liquid fuels, we had better get a large multiplier on
our liquid fuels investment or it is not worth the effort. The concept
is clearly of fundamental importance. Options where LFROI is of
particular concern are biomass-to-liquids processes, like corn and
cellulosic ethanol, where large liquid fuels investments are required
for harvesting and transporting biomass to processing.
Andrews: Following up there-since 1978, the most consistent investment
weve made in alternative fuels is in ethanol from corn. If you were to
address the US President and Senate as Energy Czar, what would you
tell them about the policy we pursued vis-a-vis ethanol from corn?
Hirsch: I would tell them to learn from past mistakes. Corn-ethanol
was appealing in many ways, but it turned out to be a loser from
energy, cost, and environmental standpoints. People were grasping at
straws pun intended, sorry. People in the federal government wanted
to do something to impact oil imports and to help farmers. I want to
protect farmers myself; part of my growing up was on my grandfathers
farm.
Instead of grasping at this or that option which sounds good,
government needs to demand serious, unbiased energy analysis so that
pragmatic decisions can be made, and the private sector can carry out
intelligent, unimpeded implementation. Right now were messed up
because governments are picking winners and losers and strangling our
energy systems.
Among other things we discuss in the book are solar and wind electric
generation systems which are losers because they dont provide what the
public demands-electric power on demand; and dont forget the often
ignored fact that electric power generation options will have little
impact on our oil import and impending oil shortage problems for a
very long time.
Andrews: You state that societal priorities will change dramatically.
Can you expound on that?
Hirsch: One of the biggest issues on the table now is climate change-
global warming. Related concerns are going to have to give way to the
urgent needs of immediate human existence after world oil production
begins to decline. Our economies cannot flourish with very high-priced
liquid fuels that are in deepening shortage. Massive, rapid, serious
mitigation will be required. We cant do everything at once, which
means that global warming efforts and the dreams of a renewable energy
future are going to have to be secondary to the urgent, large need to
regain some sort of reasonable economic equilibrium.
Andrews: How will some of those changing societal priorities role down
to impact individuals?
Hirsch: Every one of us will be impacted by the decline of world oil
production. Liquid fuel costs are going to escalate dramatically-thats
what happened in 1973 and 1979, and it will happen again. There will
be shortages, which will cause all kinds of problems. There will be
rising unemployment and dramatic declines in stock markets. And there
will be inflation. It happened before, and it is logical that it will
happen again, except this time the pain will last a lot longer.
The question then becomes what can each of us as individuals do to
protect ourselves. In our second-to-last chapter, we discuss the
issues and investments that people should avoid, places where you can
look to protect your nest egg, and things that you can do to minimize
your personal damage. For instance, if you have a house in the
country, far from a grocery store and places where you might work,
youre likely to get hit very hard when the value of that property
declines. Remember, the primary reason those places were viable was
abundant, cheap gasoline, which allowed people to get to and from
them.
Andrews: When it comes to making personal choices, you write that
individuals need to understand the situation in order to make the most
intelligent choices. What is the key to that understanding here? Why
arent more people getting this?
Hirsch: The key to making intelligent choices is having 60-80% of the
relevant information. Less than 50% is often insufficient, while
waiting for over 90% means you probably waited too long. The subject
of the decline of world oil production (peak oil) is distasteful and
painful, so trying to hide from the substance may be understandable,
but the problem will not go away. How many of us really like to hear
bad news, and how many of us are pragmatic enough to act soberly on
bad news?
The current and the previous U.S. administration tried hard to
minimize discussion of peak oil, because its really bad news. When the
public consciousness is raised on this subject, the public will be
furious with governments: why didnt you tell us about this and what
are you doing about it? Educating yourself ahead of the problem gives
you the best chance of effectively coping, rather than being swept
along with the current.
Andrews: Going back a bit, what choices are you making in your
personal and family life that anticipate our looming energy problems?
Hirsch: One of my slides for my forthcoming presentation at the ASPO-
USA conference in Washington is titled Some of What Ive Done. It lists
six points. Years ago, I went through the mental and emotional
adjustment associated with whats likely to happen when world oil
production declines, and I pondered when it might begin; I determined
then that I didnt know, but I wanted to be in front of the problem
rather than behind it, so I peak-oil-proofed my investments and
personal life to the degree I thought reasonable.
For reasons outlined in our book, I got out of almost all stocks and
bonds. I invested in some three-year annuities, which paid good
interest and which I could quickly exit, and I reasoned that gold was
going to go up dramatically when oil-related inflation hit. We moved
to a home closer to shopping and mass transit, and I traded my gas-
guzzler for a Prius. The first four steps turned out to be fortuitous
because they helped us to weather the Great Recession. Given that I
now believe that world oil production is likely to begin declining
within two to five years, I think Ive done about as much as I can do
to protect my household.
Andrews: In the book you state that you dig into realities that others
are reluctant to discuss. How so?
Hirsch: We were referring to the impending decline of world oil
production and what it means; the climate change issue, both the
uncertainties and the deplorable games being played by many in the
environmental community; the realities of other energy sources,
including renewables-we use the term people are intoxicated on
renewables; and finally, what actions people might take to minimize
the damage that is likely when world oil production goes into decline.
Andrews: For people who are already familiar with your paradigm-
shifting report of 2005, is your book primarily a logical building on
that foundation or do you think you have diverged substantially from
the findings of that study?
Hirsch: The findings of our 2005 study have held up remarkably well
over the last five years. Nobody has strongly argued that our
mitigation estimates were wrong. One could argue the details of our
estimates, but the story remains basically the same. In the book, weve
updated our earlier considerations and added some things.
One of the biggest differences between 2005 and today is that, back
then, we tended to think in terms of peak oil as a relatively sharp
peak-production rising and then suddenly turning around and going into
decline. That was what happened in the US Lower-48 States. Now we dont
think in terms of a sharp peak because world oil production has been
on a fluctuating plateau since the middle of 2004 - world oil
production has been essentially flat. We see that plateau as very
likely continuing for the next two to five years and then decline
setting in. So when I say peak oil, what Im really talking about is
the impending decline of world oil production from the existing
fluctuation. I sometime use the term peak oil because its widely used,
but its not now a strictly accurate descriptor. By the way, can you
think of anyone who predicted the current five-year world oil
production plateau? I cant.
Andrews: So, at the end of the day, why did you write the book?
Hirsch: Along with you and many others, Ive been talking and writing
about this subject for years. A number of books and articles have been
written, but the issue is still below the horizon for the general
public. My hope was the kind of book that we could write might make a
useful difference, so we undertook the effort.
By laying the oil, energy, and climate issues out in writing and
carefully selecting our words, we hoped to be able to better
communicate with a wide audience of intelligent lay-level people and
to conceivably make a difference. Thats why we wrote the book.
Andrews: Why should people buy the book?
Hirsch: People should buy the book because the issues are very
important to them in their personal lives. They need to understand the
problems, however distasteful. The chances of not getting burnt are
essentially zero. Being forewarned is to be forearmed.
---------------
You can find the article at;
http://www.energybulletin.net/stories/2010-09-13/interview-bob-hirsch-his-team%E2%80%99s-new-book%E2%80%94%E2%80%9C-impending-world-energy-mess%E2%80%9D
73 Barry VK2AAB
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