When We Run Out of Oil…

If you pay attention to any of the relevant facts about oil production (i.e., supply), oil consumption, and why it’s likely we’re in the Middle East fighting a “war” (e.g., to deploy a strategic military position to ensure a steady flow of oil), then you probably do like I do: waver between complacency and sheer terror over the prospect of running out of oil.

I’ve been following oil geeks at The Oil Drum for some time, and while they clearly give solid and deep analysis of all the current data and conjecture in the oil industry, it’s this “Crash Course 17A-Peak Oil” video by Chris Martenson (from his Crash Course on economics) that I’ve embedded below and is one that will give you a very concise snapshot of where we are in the world with respect to peak oil.

Having learned more than I ever wanted to know about the looming fate of us all in a world soon hungry for energy, I gave up a 34mpg Mercedes diesel in favor of a Toyota Prius — one I routinely get 48mpg in as an average — since I can see strategically that the world’s dependence on a finite resource is accelerating while that resource is dwindling and getting more expensive to deliver. Not a pretty combination. It’s also why I’ll be buying a plug-in hybrid in the next year or two when I find one that fits my strategic and tactical needs for transportation. Gas prices in the next two years will only go one way….up.

Bottom line? If you’re not thinking about your business and personal life in a world with shrinking energy reserves, then you’re not paying attention and need to be….now.

GoodGuide: Holding Producers Accountable

When I wrote yesterday’s post Food, Inc.: I will never look at dinner the same way again I intended to point out some tools you can use to make informed decisions about what you eat and the companies that are producing your foods.

GoodGuide is both a website and a free iPhone/iPod Touch application which allows we mobile users to “simply scan the barcode of the product and immediately see detailed ratings for health, environment and social responsibility for more than 50,000 products and companies. GoodGuide provides this information about personal care, household chemical, toy and food products for free on your iPhone / iPod Touch and is adding thousands of products every month. By making information about consumer products transparent, GoodGuide’s goal is to help people shop smarter and motivate companies to offer even better products.

On their homepage you can learn about the issues, see food recalls and other related news, and my favorite thing to do, browse ratings of other products. If you signup you can create a “Favorites” list and begin amassing a database of your preferred products.

Besides the obvious power this is putting in the hands of consumers, what’s most interesting to me (and to our clients) is how empowered consumers will likely have applications that go far beyond food product and the food distribution companies. Imagine you’re a furniture manufacturer and consumers can make choices to buy products from companies that don’t use formaldehyde. What would you do if your sales started to drop? You bet….start making formaldehyde-free furniture. (For more see the Wall Street Journal on “New Bill Could Limit Formaldehyde in Furniture” and SFGate’s article “What’s in furniture? It’s enough to make you sick“).

So if you’re primarily interested in being an empowered consumer, download the free GoodGuide and apps like it. If you’re in the business of producing goods or selling services that rely on other’s products, you’d better understand the entire supply chain of those goods and get ready for heightened awareness and accelerated choices by consumers!

…and people wonder why I drive a Prius

[click for larger view]

It is so obvious from even casual observation that consumption of oil for energy is continuing to accelerate. Too many people I know continue to choose gas guzzlers when they buy a new car, as if “someone out there” will take care of what’s happening to world oil supply.

From the Economist:

A Developing Thirst

GLOBAL demand for oil is set to rise from 84.7m barrels per day (bpd) in 2008 to 105m bpd in 2030, says the International Energy Agency in its latest annual energy report. Transport will account for 97% of this increase as rising numbers of cars hit the roads of the developing world. Demand from these countries will overtake that of the industrialised OECD nations by 2030. By then, America, Japan and Europe will be using less oil than in 1980. But the thirst for oil will balloon in Asia — and in India and China in particular — where demand is predicted to rise by as much as 400% compared with 2008.

Entering the Age of Energy Scarcity

no-gasWhen former President George W. Bush indicated in several interviews that “history will be my judge” — referring to the reasons his administration went to war — a disturbing number of people still seem to believe that our invasion of Iraq has something to do with stopping terrorism in the Middle East, instead of “fighting them at home” and spreading freedom and democracy in that region.

If that were true it should’ve been a priority, and relatively easy, to convince our pals, the House of Saud, to give up their monarchy and become a democracy. But because our presence in that region is about protecting “our national interests” (that would be a steady flow of oil, especially from the Kingdom of Saudi Arabia) and ensuring we get our fair share (though that share is larger than any other country receives), having a strategic position in the Middle East is what Bush was driving toward, and is now counting on, as historians review his focus on protecting a dwindling resource vs. an all out effort to find replacements for oil.

One of the sites I follow is called The Oil Drum, a site run by oil geeks who run article after article that are highly detailed and often over my head. That said, it’s one of the few places I can go to understand the incredible complexity of the energy marketplace and read opinions by those in-the-know and gain some insight.

It’s not hard, however, to ascertain one fact from all the prognostications and writings within this site: we’re either just past, now at, or damn close to peak oil production and that by 2020 we’ll begin to see a major dropoff in world oil production.

2020!?! That’s less than 11 years from now and with What happens when demand outstrips supply? If you paid attention in 7th grade you’ll know that prices increase in that scenario, if you can even get some. Read More

Is Chevron committing an act of treason?

fox-batterySaw this tweet this morning from tech visionary, pundit and publisher Tim O’Reilly, which brought me to this article on “NiMH Batteries, Chevron Patents and the Future of Plug-in Hybrid Cars” and a sudden onset of disbelief and dismay, though after eight years with the Bush/Cheney oil-centric administration, nothing energy related that has favored an oil company (or been allowed to continue unchallenged) should come as much of a surprise.

The next thought was that this country not only needs patent reform desperately, but in the case of a fox (an oil company) guarding the hen house (NiMH battery use which could easily accelerate the building of hybrid cars) we need to find ways to have some form of intellectual property eminent domain so the foxes (like Chevron) can’t control our metaphorical food supply in the form of stored electrical energy.

It says in part, “If NiMH batteries are being used so successfully, why are American manufacturers fixated on Li Ion batteries? Part of the reason is that petroleum company Chevron owns the patent for the Ovonics NiMH traction battery. Under the ruse of saying they have not had sufficiently convincing proposals brought to them, Chevron continues to deny licenses to any company proposing to manufacture new NiMH traction batteries.

As is usually the case in matters of intellectual property, markets and trade, there are undoubtedly complexities involved in this patent and the use of it. It’s altogether possible I’m not seeing some subtlety or nuance that goes beyond what seems obvious on the surface. But come on…can this restraint of NiMH battery use by Chevron be any more obvious?

Where would be be today, right now, with delivering robust and powerful hybrid cars if there weren’t barriers to manufacturing NiMH batteries? It’s one thing for a company to strategically leverage technologies that pose a threat to an incumbents business, and quite another to bury it or place too many obstacles and barriers in front of its use. But when all of us have so much at stake with climate change, national security with oil, and an economy so dependent upon that oil, a disloyal act like this — working at cross-purposes to the imperatives of our nation — can only be described with one word: treason.

Save $125 Billion With Solid State Light Bulbs

Thomas Edison, inventor of the light bulb (and 1,000’s of other things!)

All of us need to get rid of our incandescent light bulbs.

The US Department of Energy (DOE) has projected that our nation could save 29% of our national lighting energy consumption by 2025 — $125B in energy costs — if all of us converted to solid state lighting (SSL’s which mainly are LED‘s and OLED‘s).

The DOE has this site devoted to SSL technology and even an “L Prize” for innovation and breakthroughs in SSL.

Ever since I purchased a Toyota Prius and a Neuton rechargeable lawnmower, I’ve been both delighted and stunned with the compromises one has to make today to be more energy efficient: the Prius averages 47mpg but is less substantial (and luxurious) than what I’m used to in a car and the Neuton batteries (lead acid’s) and its engine is inefficient enough that I have to cut my lawn every five days or the mower bogs down.

I’ve been on the hunt for LED lights for my home — and 40w, 60w and 100w bulbs seemed to be scarce and certainly NOT available at retailers like Home Depot or Target — but they’re now beginning to appear from companies like EarthLED (and their 100w bulb replacement with a tiny fan in it to keep it cool and ensure the life is long) to companies with initiatives like those at GE and at Philips.

The kicker is that these bulbs are still quite expensive. Read More

Keeping Your Eye on the “Peak Oil Ball”

While walking the dog early in the morning, I usually look at news headlines, primarily using the New York Times free iPhone app.

One article caught my eye early today, OPEC Orders Cut in Oil Production. It started out with, “The OPEC cartel said Friday that it would reduce its oil production by at least 1.5 million barrels a day to stem what it called “a dramatic collapse” in oil prices as the world economy slows down and oil demand shrinks” and then continues to point out how many countries have set social program and other country revenue-based spending on much higher per-barrel prices, and so there is a tremendous incentive to cut production in order to increase prices.

Though it’s clear OPEC members are trying to find a way to get prices back up, it’ll probably take quite awhile. Can’t we just revel in the good news that demand is shrinking and that gas prices are falling at the pump, airfares are already dropping, shipping costs will probably go down, and that we can breathe a sigh of relief?

Then a fleeting thought ran through my mind, one that I fear many might have and will fall back into old behaviors and go ahead and buy that new gas-guzzling SUV or low mileage car (or make other short-term decisions), “Oh great…maybe I didn’t have to buy that Prius after all!” and then remembered this MinnPost article I’d read in August along with this tremendous Potential Energy podcast in September (both on peak oil), coupled with one of THE most comprehensive, objective and sobering programs I’ve watched in a long, long time: PBS’ Frontline show called “HEAT” (you can watch the entire show online and it’s worth the investment of your time).

In that MinnPost article, the writer explains the predicament we’re in with the help of energy expert Matthew Simmons:

Along with others, Simmons has been warning about peak oil for two decades, but he’s not the first. M. King Hubbert, a geophysicist with Shell Oil, accurately predicted in 1956 that U.S. oil would peak by 1970. That’s when the United States went from being a producing nation to being one that today imports 70 percent of the oil it consumes.
Unlike climate change theorists, who rely on data and modeling, “peak oil” advocates rely on known production data that in every case shows a bell-curve history of discovery to increasing production to decreasing production to exhaustion. Taken together, the data from all oil production sites, along with such other information as the ratio of dry-hole to successful-hole drilling and economic growth rates, have helped geoscientists develop “peak” scenarios that are broadly accepted.

So should we be more focused on peak oil (and running out of it) or climate change?

Read More

Plugin Hybrids Closer…

Even with gas prices down — though temporarily as global supply is dwindling (read about peak oil and listen to this sobering-but-informative Potential Energy podcast) — I’ve continued to find ways to strategically shift my and my family’s behaviors when it comes to recycling, using a rechargeable lawn mower, and now moving away from conventional cars to a hybrid.

Though there are strict covenants in my housing development — making a whole house natural gas generator, solar or wind driven energy options legally unavailable for us — I predict that as energy costs continue to rise, there will be modifications made making alternative energy sources mainstream and homeowner’s associations like mine willing to amend covenants.

I know, I know, there are a lot of other people that have been at this “green” thing for a long, long time, but the world auto manufacturer’s are finally responding to electric vehicle production which will bring the costs down to affordable levels and, even though we’re a year or two away from luxury versions of hybrid cars that get great mileage and are more carbon clean, I went ahead and stepped down to a Prius in order to step up and do my part.

Today is day four with my new Toyota Prius and I’m finding myself already in love with this car (though again, it would be nice if it were just a bit more luxurious). Though not broken in yet (conventional experiences shows 10,000 miles on the odometer is when peak efficiencies and mileage kicks in), I’ve been averaging 49.2mpg. Not bad, but I’m hyper-aware of what could be my mileage with a plugin hybrid electric vehicle (PHEV) more complete battery pack like the Hymotion from A123 Systems, the company co-developing the PHEV system for the upcoming Chevrolet Volt.

Unfortunately, the cost of the Hymotion L5 is $9,995 plus $400 destination fee, requiring something goofy like 29 years to payback the additional investment (and that’s with $3.00+ gas prices).

How does 236mpg sound? The PriusChat forum has this thread on PHEV Prius modifications and this VERY comprehensive overview of the Hymotion install AND videos of the results that are incredibly interesting…like this hypermiler’s ability to squeeze out 236mpg on his home commute (NOTE: there is a technique in the Prius where one can slightly depress the accelerator and place the engine — driven either by gas or electric — into ‘glide’ mode, essentially turning it off).

With Toyota considering a Prius standalone brand to the Volt and other carmakers getting into the plugin game, no question there will be economies of scale that will make PHEV’s significantly more affordable than adding a $10,000 upgrade to a $29,000 car.

Consider the Impact of Behavior Changes…

One thing that hasn’t been discussed enough during the explosion in gas prices, the financial meltdown, is the impact on multiple industries with consumer changes in behavior. Sellers of non-imperative products are finding it rough going: car manufacturers to their dealers; insurance companies and consumer electronics; clothing and, frankly, retailers of all types; the tactical behavior changes people are making to save money are going to really make an impact this Fall selling season.

I’ve been observing my own behavior changes as I struggle to become more energy self-sufficient while still living in a housing development with pretty stringent convenants (would be tough, for instance, to stick a windmill in my backyard or solar panels on my roof!). Fortunately, my incentives to be ‘greener’ and more self-sufficient outweigh the inconveniences.

For readers of this blog, you’ll recall I purchased a Neuton rechargeable lawn mower this summer and posted about it here. For the same reason our family recycles like crazy (it takes two cans to hold everything and our trashcan is always half full), I bought it in order to start the process of making ourselves increasingly ‘green’ while experiencing what it’s like to be dependent on the substantially weaker energy we can pack into batteries vs. what’s in a lawnmower tank filled with gasoline.

The mower has precipitated a behavior change in me. Since I mulch, it sometimes take two passes to properly cut and make sure the grass is dispersed. It’s frustrating since it’s turned a 50 minute lawn cutting adventure in to nearly two hours (actually I learned to cut it once now…but have to cut every four days instead of once a week). I also have to make certain both batteries are charged otherwise I can’t cut the lawn in one evening, and I’ve forgotten a couple of times delaying my ability to cut the lawn by a day!

This week I’m taking delivery of a new Prius and will be giving up my Mercedes E320 CDI (the diesel version). Yes, the MB got great gas mileage, was safer, more comfortable and with more snob-appeal, but the Prius is the best compromise between fuel efficiency and comfort I could find (and I plan to hack it with non-destructive hacks like this one) and is my inevitable step toward a plugin hybrid when they’re more widely available (and when, like it’s rumored with Toyota, there will be step-up models that are more luxurious along with a possible separate Prius brand).

What does this all mean for you? If you’re delivering web applications, using them or trying to get them adopted within your company or organization, you must consider behavior changes necessary for successful adoption since few people are strategic goofballs like me, willing to compromise and step-down, in order to step-up and be more green (although one could argue I’m NOT an early adopter when it comes to cars but hey, I’m in Minnesota and like substantial cars for our winters).

It takes alot longer than you think — barring a crisis like gas price spikes or a financial meltdown — to see people change their behavior all on their own. Though it’s possible that in our current state of global flux we have a golden opportunity to introduce new things requiring behavior modifications (and people should be more open to compromise and changes), there is also a limit to what people can change all at once, so tread lightly while giving strong consideration to the implications of behavior change on whatever you’re delivering to yourself or for others.

Schwans: Strategic Planning for the Long Term

Rarely do I watch local news, but a couple of weeks ago I happened to catch a story on our local CBS affiliate’s 10PM newscast about Marshall, MN-based Schwans and their amazing propane trucks. This is a lesson in strategic planning for the long term, and how gleeful they must be in a day when diesel fuel is approaching $5 a gallon!

Schwans is a company that got into the home delivery business when in 1952, Marvin Schwan packed his beat-up 1946 Dodge panel van with 14 gallons of his family’s signature ice cream and delivered it to rural families in western Minnesota. At the end of that historic trip, all 14 gallons were sold and the Schwan home-delivery business was born.

Now a multi-billion dollar private company with 22,000 employees and a dependence on trucks to deliver their goods — especially the sizeable home delivery portion of their business — they were admittedly stunned and taken aback during the oil crisis of the 1970’s and initiated a very long term strategic plan to ensure they weren’t in that position again.

This article (and the accompanying video there which I watched that night) says in part, “Our sales were based on the fact that we’re driving down the road and going to people’s houses, and so that’s really where the concern came in and said ‘We need to do something different,'” said Shannon Lens, Director of Fleet Acquisition at Schwan Foods.

What they did was take the mandate of Schwan Foods founder Marvin Schwan to find an alternative fuel. They discovered propane being used on a very small scale in Ohio. They eventually bought the propane technology and started converting their trucks. By the 1980s, most of the fleet was propane powered.”

This company is now paying $2 per gallon for propane fuel that runs the 5,200 trucks in their fleet nationwide.

Propane is no panacea since it’s a byproduct of oil refining. Still, as I’ve said before in many ways on this blog, there’s been a lack of leadership exhibited in the last eight years on finding any alternatives to oil, motivating we citizens to conserve, and going to war to ensure we get the last remaining oil resources vs. those emerging economies China and India.

Strategic planning, risk management and leadership are things one would hope for in our Federal government and not just with companies delivering pizza and ice cream.