The Oil Drum: Canada

This is a guest post by Ugo Bardi and Pietro Cambi. Affiliations, ASPO- Italy and www.eurozev.org. It is a fantastic account of how a 1970s Fiat 500 has been retrofitted with batteries and an electric motor to create the Post Peak Car. Be sure to watch the videos linked to at the bottom of the page.

Fig 1. Chantal poses with the little 500 at the Ecoauto fair in Torino, September 2007. It is not a toy car, it is Chantal who is a tall girl.

This is a guest article by Mark Yates, The Oil Drum member googlepeakoil.

Introduction

There is an urban legend that goes "car companies are withholding the 100 mpg car". It might not have been true before... and now while not withholding it, the 100mpg is ready - they're just being very very slow to make it and sell it!

For many years the car companies have said the "the batteries aren't ready" (here and here *) and I'm sick of reading it. They are in fact so "ready" that within a few months to a year 3 relativley small automakers (further details below) will be thumbing their noses at the big 4 auto companies as they bring to market electric cars (and a pickup) with 300-700hp electric motors, 100mph+ top speed and 100-200+ mile ranges per charge. Which might lead many to ask, "why are car companies saying the batteries not ready". Meanwhile, several groups of people such as Calcars have been converting various hybrids into Plugin Hybrids capable of in excess of 100mpg (in combined city/highway driving). The technology easily exists for the 100mpg production car. Please, "big auto" just make some yourselves!

* This page at Calcars lists where the various car companies are on PHEVs.

Today's headlines lead with coverage of the on-going crisis in the debt markets, and an explanation of the financial engineering underlying much of the global liquidity bubble. Debt ratings have not been adjusted to reflect current market conditions, meaning that 'asset' valuations are over-stated. No institution wants to force asset sales for fear of revealing just how much real valuations differ from nominal ones, but eventually such a sale will occur - with the potential to cause an abrupt repricing of a wide range of 'assets' (many of which will actualy be revealed to be essentially worthless). Leverage will magnify the losses, leading to a very serious financial crisis. One estimate (below) puts the potential losses, once assets are eventually marked to market, at 20 times the sum involved in the LTCM crisis in 1998 - so far, and getting worse by the day.

The Round-Up is also convering the Canadian energy scene, as well as environmental and international news, in that order. Oil companies leaving Venezuela and aiming for the oil sands are finding that all is not clear sailing, while China is entering the oil sands for the first time. Nunavut seeks control over future oil and gas revenues, Newfoundland and Labrador wants to bypass Quebec in selling electricity to the US, and the slow down in natural gas drilling is hurting frontier communities in Alberta and BC.

Credit crunch will 'shred investment portfolios to ribbons'

The near collapse of two Bear Stearns hedge funds has lifted the rock on our 21st century mutant capitalism, exposing the bugs beneath to a rare shock of naked light.

When creditors led by Merrill Lynch forced a fire-sale of assets, they inadvertently revealed that up to $2 trillion of debt linked to the crumbling US sub-prime and "Alt A" property market was falsely priced on books.

Even A-rated securities fetched just 85pc of face value. B-grades fell off a cliff. The banks halted the sale before "price discovery" set off a wider chain-reaction.

"It was a cover-up," says Charles Dumas, global strategist at Lombard Street Research. He believes the banks alone have $750bn in exposure. They may have to call in loans....

....Wobbles are turning to fear. Just $3bn of the $20bn junk bonds planned for issue last week were actually sold. Lenders are refusing "covenant-lite" deals for leveraged buy-outs, especially those with "toggles" that allow debtors to pay bills with fresh bonds. Carlyle, Arcelor, MISC, and US Food Services are all shelving plans to raise money. This is how a credit crunch starts.

"This is the big one: all investment portfolios will be shredded to ribbons," said Albert Edwards, from Dresdner Kleinwort.

In Europe we take our electricity supply largely for granted, almost all Europeans have reliable grid electricity at affordable prices. This isn’t the case everywhere in the world and may not always be the case in Europe. Electricity is a particular concern in the UK where a generation crisis is brewing with the decommission of the aging nuclear fleet, the closure of around a third of the coal fleet under the EU Large Combustion Plant Directive and the rapid depletion of North Sea gas.

To take a glimpse at what life might be like without today’s reliable supply we take a trip to Africa, Uganda, courtesy of Nokia who have carried out an investigation looking at how people manage to keep their mobile phones charged and maintain some degree of electricity use at home in off-grid parts of the country.

Advertising for urban Kampala battery charging services, Uganda, Jan Chipchase, 2006

After an overpriced lunch which was redeemed by the interesting company, it was time for the afternoon sessions.  I only got good notes on two of the speakers, but man, one of them was a doozy!

Bill Davis, Ze-Gen

The 2 PM session began with what may be the biggest non-traditional concept for the next ten years, Ze-Gen.  Bill Davis ran through the potential of waste gasification for us.

The untapped potential is enormous.  The current electric production from waste is less than 3800 megawatts (not sure if this is USA or worldwide).  The potential is closer to 110 GW (110,000 MW) and $26 billion/year.  It also reduces the environmental cost of transport, and something like 1.8 tons of CO₂ equivalent per ton of waste processed (including fugitive methane emissions from landfills).  Depending on the policy details, there may also be renewable energy credits available (people differ on the renewability of waste).

This is a guest post by Alan Drake, a letter he sent to his youngest brother.

Peak Oil in Greater Detail

“Oil companies should fire all of their geologists and geophysicists and hire economists to replace them since economists are SO much better at finding oil”.
---- Old Saying in the oil patch

Here's some random facts to illustrate how inelastic supply of oil is once an oil province hits it’s “Hubbert Peak” and the super giant fields deplete...

This is a guest post by Gail the Actuary.

1. I love my SUV. Why can't we continue to use oil and gas as in the past?

George W. Bush has given us one reason why we need to make changes - Unstable foreign oil supply. Al Gore has given us another reason - Climate change.

There is a third reason that trumps the first two - WE DON'T REALLY HAVE A CHOICE. Demand for both oil and natural gas continues to rise each year, as the result of China, India and other countries wanting to adopt a lifestyle more like that in the United States. As we saw in Oil Quiz - Test Your Knowledge, world oil supply is likely to decline in the near future. With demand increasing and supply decreasing, there is certain to be a significant gap in the not too distant future.

Natural gas is similar. Like oil, we started with a finite quantity of it, and it is now depleting. The main difference is that we are dealing primarily with a gap between North American supply and demand, rather than world supply and demand, because natural gas is difficult to transport. Demand is rising, because natural gas is viewed as a less-polluting source of energy.

Natural gas supply is likely to decline in the next few years, because most of the larger, more productive sites have already been tapped. New natural gas wells are getting smaller and smaller, so that more and more new wells need to come on line each year, just to stay even. For a while, we were able to make up our shortfall with imports from Canada, but these have begun to decline. In the next few years, both US production and imports from Canada will be declining. It is doubtful that liquified natural gas imports from overseas will be able to fill the gap.

(7 more questions and answers under the fold...along with a study guide! Go Gail Go!)