Archive for the ‘Energy’ Category
The stock market is not crashing yet, but there are lots of other market crashes happening in the financial world right now. Just like we saw back in 2008, it is taking stocks a little bit of extra time to catch up with economic reality. But almost everywhere else you look, there are signs that a financial avalanche has begun. Bitcoins are crashing, gold and silver are plunging, the price of oil and the overall demand for energy continue to decline, markets all over Europe are collapsing and consumer confidence in the United States just had the biggest miss relative to expectations that has ever been recorded. In many ways, all of this is extremely reminiscent of 2008. Other than the Bitcoin collapse, almost everything else that is happening now also happened back then. So does that mean that a horrible stock market crash is coming as well? Without a doubt, one is coming at some point. The only question is whether it will be sooner or later. Meanwhile, there are a whole lot of other economic crashes that deserve out attention at the moment.
The following are 11 economic crashes that are happening RIGHT NOW…
As I write this, the price of Bitcoins has fallen more than 70 percentfrom where it was on Wednesday. This is one of the reasons why I have never recommended Bitcoins to anyone. Yes, alternative currencies are a good thing, but there are a lot of big problems with Bitcoins. Why would anyone want to invest in a currency that could lose 70 percent of its purchasing power in just two days? Why would anyone want to invest in a currency where a single person can arbitrarily decide to suspend trading in that currency at any time?
An article by Mike Adams of Natural News described some of the things that we have learned about Bitcoins this week…
#1) The bitcoin infrastructure cannot handle a selloff. Once the rush for the exits gains momentum, you will not be able to get out. Only those who sell early will be able to exit the market.
#2) The bitcoin infrastructure is subject to the whims of just one person running MTGox who can arbitrarily decide to shut it down whenever he thinks the market needs a “cooling period.” This is nearly equivalent to afinancial dictatorship where one person calls the shots.
#3) Every piece of bad news will be “spun” by exchanges like MTGox into good-sounding news. As bitcoin was crashing yesterday by 60% in value in mere hours, MTGox announced it was a “victim of our own success!” So while bitcoin holders watched $1 billion in market valuation evaporate, MTGox called it a success. Gee, then what would you call it when bitcoin loses 99%? A “raging” success?
The price of gold was down by about 4 percent on Friday. Gold has now fallen below $1500 an ounce for the first time since July 2011. Overall, the price of gold has fallen by about 10 percent since the beginning of the year, and it is about 22 percent below the record high set back in September 2011.
Yes, the price of gold is likely being pushed down by the banksters. And yes, gold is a fantastic investment for the long-term. But there will be times when the price of gold does fall dramatically just like we saw back in 2008.
The price of silver fell by about 5 percent on Friday. If it falls much more it is going to be at a level that presents a historically good buying opportunity.
Just like gold, there will be times when the price of silver swings dramatically. But the truth is that silver is probably an even better long-term investment than gold is.
The price of oil declined by about 3 percent on Friday. Many will consider this a positive thing, but just remember what happened back in 2008. Back then, the price of oil dropped like a rock. If the price of oil gets below $80, that could very well be a clear signal that a major economic crisis is about to happen.
#5 Consumer Confidence
As I mentioned above, consumer confidence in the U.S. just had its biggest miss relative to expectations that has ever been recorded. The following is from an article posted on Zero Hedge on Friday…
Well if this doesn’t send the market into all-time record high territory, nothing ever will: seconds ago the UMich Consumer Confidence plummeted from 78.6 to 72.3, on expectations of an unchanged 78.6 print. This was not only a 9 month low in the index, but more importantly the biggest miss to expectations in recorded history!
#6 Retirement Accounts
According to Wells Fargo, the number of Americans taking loans from their 401(k) accounts has risen by 28 percent over the past year…
Through an analysis of participants enrolled in Wells Fargo-administered defined contribution plans, the bank announced today that in the fourth quarter of 2012, there was a 28 percent increase in the number of people taking loans out from their 401(k) and that the average new loan balances increased to $7,126 from those taken out in the fourth quarter of 2011 – a 7% increase from $6,662.
Of the participants who took out loans, the greatest percentage were to people in their 50s (34.2%), followed by those in their 60s (28.9%) and then by those in their 40s (27.3%). The increase among participants in their 50s was nearly double the increase among those under 30. This is based on an analysis of a subset of 1.9 million eligible participants in retirement plans that Wells Fargo administers.
“The increased loan activity particularly among older participants is concerning because those are the years when workers can start to make ‘catch-up’ contributions and really need to focus on preparing for retirement,” said Laurie Nordquist, director of Wells Fargo Retirement.
#7 Casino Spending
Casino spending is declining again. Many people (including myself) would consider this to be a good thing, but casino spending is also one of the most reliable indicators about the overall health of the economy. Remember, casino spending crashed during the last financial crisis as well. That is why it is so alarming that casino spending is now back to levels that we have not seen since the last recession.
#8 Employment In Greece
Over in Europe, things just continue to get worse. According to numbers that were just released, the unemployment rate in Greece has soared to27.2 percent, which was up from 25.7 percent the previous month. That means that the unemployment rate in Greece rose by 1.5 percent in just a single month. That is not just a crash – that is an avalanche of unemployment.
#9 European Financial Stocks
European financial stocks have been hit particularly hard lately. And for good reason actually – most of the major banks in Europe are essentially insolvent at this point. This week, European financial stocks fell to seven month lows, and this is probably only just the beginning.
#10 Spanish Bankruptcies
According to Reuters, the number of Spanish companies going bankrupt has risen by 45 percent over the past year…
A record number of Spanish companies went bust in the first quarter of 2013 as companies remained under intense pressure from tight credit conditions and meager demand, a study showed on Monday.
The 2,564 firms filing for insolvency proceedings in first three months of the year was a 10 percent rise from the previous quarter and a 45 percent increase on the same period in 2012, the survey by credit rating agency Axesor said.
#11 Demand For Energy
Just like we saw back in 2008, the overall demand for energy in the United States is falling rapidly. There are some shocking charts that prove this that were recently posted on Zero Hedge that you can find right here.
Yes, it is good for people to use a bit less energy, but it is also a clear indication that economic activity is really starting to slow down.
But despite everything that you have just read, the Dow and the S&P 500 have been setting new record highs.
Fortunately, there are a few voices of reason out there. For example, just check out what Marc Faber recently told CNBC…
In the near-term, the U.S. stock market is overbought and adding that any more near-term gains portend big trouble for the market, “The Gloom, Boom & Doom Report” publisher Marc Faber told CNBC on Monday.
“If we continue to move up, the probability of a crash becomes higher,” Faber predicted in a “Squawk Box” interview, saying it could happen “sometime in the second half of this year.”
As I have written about previously, a bubble is always the biggest right before it bursts. I hope that we still have at least a little bit more time before it happens, but I wouldn’t count on it.
The economic fundamentals tell us that the stock market should be plunging, not rising. At some point the boys over on Wall Street will get the message and the market will catch up to reality very, very rapidly.
But for the moment, the American people are feeling really good. According to CNN, Americans are now more optimistic than they have been in six years…
As the stock market continues to show record highs, the number of Americans who say things are going well in the country has reached 50% for the first time in more than six years, according to a new national survey.
So what do you think will happen for the rest of the year?
Do you think that the good times will continue to roll, or do you believe that the bubble is about to burst?
When asked what socialism was, Lenin responded, “The power of the Soviet State and electrification of the country.” Apparently, the leaders of North Korea haven’t made it to that page in the Little Red Book yet.
<— If you believe that the only way a country can have a properly running infrastructure to include roads and energy is through a big, giant government that controls everything… explain this!
In the simplest terms, socialism is defined as “State ownership of the means of production” where every economic action is centrally planned and centrally controlled by the government. In comparison, capitalism is defined as “private ownership of the means of production” where every economic action is controlled by the business owner responding to the demands of the market and not the government.
The US economy is currently a mixed economy of capitalism and socialism that would best be described as fascism, or the marriage of corporations and government. Mussolini said, “This should properly be called corporatism.”
The state of Michigan has determined that it is time to “put all of its chips on green” with a new energy mandate declaring that by the year 2025, 25% of the state’s energy must come from renewable or green energy sources. There are a multitude of reasons ranging from providing clean energy to creating jobs. For an understanding of job creation through government stimulus, read the first part of this article. click here
The politicians constantly tell the uneducated serfs that the government knows what is best and that we should just listen to their wisdom. We are constantly told that only a government can provide all of these things that could never come about in a market economy. There is just no way! The whole lie is glossed over with Newspeak terms such as Public-Private Partnerships (remember fascism from above) or Government Investment. When was the last time one of these investments sent the people a dividend check? It’s all bull.
As far as government being an investment firm, I would like to withdraw all of my funds and close my account. The Public-Private partnerships are nothing more that the public picking up the tab with the profits remaining private. Considering that so many subsidized firms go bankrupt, the government is the worst investment firm in the world as evidenced here by the number of green energy companies that have gone belly-up and the money that has been flushed down the drain with them. Solyndra is not an isolated incident.
This malinvestment is not restricted to the 20th and 21st centuries. In the 1800’s, the common belief was that the only way for railroads to exist was with the full force of the government throwing money at it. James J. Hill built the Great Northern Railroad without a single tax dollar – it was privately financed. Instead of having the army “clear the land,” Hill negotiated rights of way with the Indians and other inhabitants. Hill was able to provide such a great service that his rates were lower than his subsidized (tax eater) competitors. When the subsidized firms were going bankrupt, Hill turned a profit while charging lower rates. The difference between Hill and the others was that he was a market entrepreneur where the others were political entrepreneurs. Hill did the things that the competition was either unwilling or unable to do. They got their financing by sucking up to and cutting deals with their political patrons. Most of them would have been more suited to running dress shops in Boston rather than running railroads. For more on Hill and other market entrepreneurs, click here
Why does the government invest in these companies? Because no investors in their right mind would! Think of a company such as Apple or Microsoft looking for capital investment. Based upon their successes they could probably self-finance, but if they did seek outside funds, they would not have too much of a problem because of their successful track records. The investor would of course do his/her due diligence to make sure that the investment was safe to ensure that the investment was profitable. In order to survive, private investors cannot take many losses. They will go out of business quickly… or seek a government bailout.
The government does not operate on the profit motive. The government operates on the public opinion and vote purchasing motives. The government does not need to show any results… only the appearance of results. This can easily be done by shifting money around, showing neat graphs, juking statistics, and an endless media onslaught of horizontal enforcement telling us, “The government is doing the right thing.”
It’s time to take the government out of the equation. It’s time to abandon the idea of central planning and central control of the means of production. It’s time to end the political favoritism granted to political entrepreneurs which is malinvestment at best and money laundering at worst.
Stop the mandates. If something is such a good idea and will be profitable, it does not require a mandate. Mandates and laws can never create an outcome that was not already possible. “If the world is round, can the king declare it to be flat? And if it is flat, can the parliament pass a law that makes it round?” ~St. Thomas More
Stop the social engineering. The purpose of energy companies is to provide energy and turn a profit, not to create jobs. The jobs will come as a byproduct of this economic activity. Let the different types of energy compete on the open market. The best form(s) will win out and provide the best value. It could be coal, solar, natural gas, industrial hemp, or something that has not even been discovered yet. Without an energy source proving itself, we will never really know. Why would we put so much hope into something that is unproven?
Licensing, permits, and regulations must go. The idea that these things protect the consumer and provide safety is nothing but a myth. People can be protected from harm by fully enforcing property rights. If a company contaminates a person’s land, that company should be held liable and make restitution for the loss to the actual victim. Regulations have actually been used by the political entrepreneurs for their own benefit. That’s why they hired the lobbyists to write the regulations and get them passed. Licensing, permits, and regulations serve only one purpose – to keep new actors from entering the market protecting the politically connected existing firms.
There are two ways to make money in the market. 1. Offer a product that people will voluntarily exchange money for, or 2. Use your political connections to cripple your competition with regulations. This was done against Hill in the form of the Interstate Commerce Act of 1887 which enforced minimum pricing regulation, in other words… price fixing.
“When buying and selling are controlled by legislation, the first things to be bought
and sold will be legislators.” ~P J O’Rourke
Intellectual Property laws, meaning patents need to go. Patents are nothing more than a government granted monopoly to engage in commerce and a strict prohibition against everybody else from engaging in the same commerce. An idea is not a physical thing and cannot be considered real property. For a really good explanation of IP laws, see this article.
Stop the exclusivity of markets. Yes, multiple firms can service the same city. It works with every other type of industry. It can and has worked with utility companies in the past. This restriction of the market has eliminated competition and the value that competition brings to the consumer. If monopolies are bad, why do people support them for certain industries? The Myth of Natural Monopoly
Stop the subsidies, stop the government malinvestment, and stop the looting of the taxpayers. The history of subsidies has been horrible at best. The price for some things may be lower at the cash register but the difference is made up from your paycheck. By propping up these dinosaurs, the creativity of the market has been stifled. If these new energy sources are worth their salt, they will distinguish themselves as so. If something is viable, private investors will flock to it. And no, the greedy capitalists that would sell their own mothers for a profit are not keeping new technology off the market to protect Big Oil. If something new came along that was more profitable, those greedy capitalists would sell out the existing firms… for the profits. Greed is good.
The most important thing is for the people to stop believing in The Myth of the State. These politicians are not wise and all-knowing. Most of them are idiots and have little understanding of economics or energy. They do understand lobbyist money, vote purchasing, and appealing to the emotions of the masses. They do not have your best interests at heart.
“How can we blame the free market when we haven’t even tried it yet?”
Franklin D. Roosevelt
A couple of years ago, Spain “put their chips on Green.” They have a 25% unemployment rate. Is that the real meaning of 25 by 25?
Lou – Freedom Feens
It doesn’t matter how abundant liquid fossil fuels might be; it’s their cost that impacts the economy.
Many people think “peak oil” is about the world is “running out of oil.”
Actually, “peak oil” is about the world running out of cheap, easy-to-get oil. That means fossil fuels might be abundant (supply exceeds demand) for a time but still remain expensive.
The abundance or scarcity of energy is only one factor in its price. As the cost of extraction, transport, refining, and taxes rise, so does the “cost basis” or the total cost of production from the field to the pump. Anyone selling oil below its cost basis will lose money and go out of business.
We are trained to expect that anything that is abundant will be cheap, but energy is a special case: it can be abundant but costly, because it’s become costly to produce.
EROEI (energy returned on energy invested) helps illuminate this point. In the good old days, one barrel of oil invested might yield 100 barrels of oil extracted and refined for delivery. Now it takes one barrel of oil to extract and refine 5 barrels of oil, or perhaps as little as 3 barrels of unconventional or deep sea oil.
In the old days, oil would shoot out of the ground once a hole was drilled down to the deposit. All the easy-to-find, easy-to-get oil has been consumed; now even Saudi Arabia must pump millions of gallons of water into its wells to push the oil up out of the ground. Recent discoveries of oil are in costly locales deep offshore or in extreme conditions. It takes billions of dollars to erect the platforms and wells to reach the oil, so the cost basis of this new oil is high.
It doesn’t matter how abundant liquid fossil fuels might be; it’s their cost that impacts the economy. High energy costs mean households must spend more of their income on energy, leaving less for savings and consumption. High energy costs act as a hidden “tax” on the economy, raising the price of everything that uses energy.
As household incomes drop and vehicles become more efficient, demand for gasoline declines. Normally, we would expect lower demand to lead to lower prices. But since the production costs of oil have risen, there is a “floor” for the price of gasoline. As EROEI drops, the price floor rises, regardless of demand.
This decrease in real incomes and ratcheting-higher energy costs could lead to a situation where energy is abundant but few can afford to buy much of it.
The relative abundance of fracked natural gas and low-energy density fossil fuels like tar sands and shale has led to a media frenzy that confuses abundance with low cost. This article (via correspondent Steve K.) illustrates the tone and breezy selection of data to back up the “no worries, Mate” forecast of abundant cheap liquid fuels: An economy awash in oil. (MacLeans)
Not so fast, reports Rex Weyler of the Deep Green Blog. Here is Rex’s response to the above article.
Fair point about the volume of unconventional – deepwater, shale gas & oil, tar sands, etc. – hydrocarbons. These reserves may even produce peakies and/or sustain the plateau longer than some observers believe. However, biophysical restraints remain real; peak oil remains real; peak net energy appears imminent, and the impact on economies is already being felt globally. Points to consider:The dregs: In spite of huge shale & tar reserve discoveries, peak discoveries remain well behind us, in the 1960s. My father, a petroleum geologist his entire life (and still, in Houston, Kazakstan…), knew about shale and tar deposits when I was a teenager in the 1960s. He called them “the dregs.” These deposits are not really news within the oil industry. And they are the dregs because of high cost, low EROI and rapid depletion.
EROI: The volume of these low-net-energy reserves could extend peak oil production for decades, but at fast-declining net energy returned to society. We high-graded Earth’s hydrocarbons, just as we high-graded the forests, fish, copper, tin, water, and so forth. We’ve taken the best, highest EROI hydrocarbons, the 100:1 free-flowing wells of the 1930s and 40s. We’re now into the 3:1 and 2:1 tar sands.
For example: damming rivers in Northern BC, to send electricity to the fracking fields, to send shale gas to Alberta, to cook the boreal substrate, and mix the black sludge with gas condensate shipped in from California and by pipeline from Kitimat to Fort McMurray, to mix with the bitumen, to pipe to Vancouver Harbour, to ship to China, to burn in a power plant, to supply electricity to their manufacturing empire.
By the time any of this energy gets used to actually make something useful to someone in society, and by the time that user puts that usefulness to work to feed, clothe, house, or heal anyone, there is no net-energy left.
Our food in North America is already negative net energy by1:10 at best, up to 1:17 or worse for much of the crap we eat. This matters. EROI at well-head, EROI at the consumer pump, and EROI at the point of society’s actual service all matter.
Well-head EROI, counting all public subsidies, is now in the 5:1 to 1:1 range for all these “non-conventional” (meaning the dregs) hydrocarbon deposits. Money can be made. Some energy can be delivered to Society, but this is already way below the well-head EROI that could likely run the current complexity of the human society, much less “grow” economies.
The degrading reserves take us down along the EROI curve, in which Net Energy returned to society falls off a cliff around 6:1, and is in freefall by 3:1. Net-energy alone kills the idea of much economic growth from a booming hydrocarbon bonanza (other than some great stock plays along the way). Furthermore, depletion renders the idea ever more unlikely:
Depletion: Depletion rates on these gas fields have arrived quickly and appear drastic by historic industry standards. The fracking fields peak early and decline swiftly. In the Bakken shale field – one of the great North American saviour fields – the average well has produced ~ 85k barrels in its first year and then declined at about 40% per year. The newer average wells peak earlier and decline faster, so the overall trend is down.
The depletion moves the production process along a function that approaches zero net energy… Down we go along the EROI curve… 5:1 .. 4:1 .. 3 .. 2 … and then really complex society breaks down. An Amish farmer gets 10:1.
The Bakken break-even oil price is $85, so there is no profit in any of this right now, but of course there will be if global depletion exceeds demand from crashing economies.
Depletion – both in volume and quality – and depletion for all industrial materials and energy stores, EROI, and economic stagnation all work as feedback loops. No one knows the bifurcation points in this complex system. We try to predict those, but miss by a longshot sometimes. Complex societies crash in this manner, declining returns on investments in complexity, from Babylon to London and Washington. See J. Tainter, H. Odum, N. Georgescu-Roegen, Hall, Cleveland, et al.
Here are some depletion data on The Oil Drum: Is Shale Oil Production from Bakken Headed for a Run with “The Red Queen”?.
See A Review of the Past and Current State of EROI Data (PDF) by Hall, Cleveland, et al. (source: www.mdpi.com)
There is a lot of EROI data here: Obstacles Facing US Wind Energy. (The Oil Drum)
Below is the EROI curve, only the “We are here” point at 10:1 is the modern average, and from a few years ago. The new conventional stuff is coming in lower and and the enhanced recovery, shale and tar fields are already over the falls at 6 or 5:1 for the better stuff (best dregs), and 3:1 to 1:1 for the dregs of the dregs, the deeper shale and tar sands.
So yes, our friends are correct about the great volume of tar, shale, deep, heavy hydrocarbons, but increasing production of world liquid hydrocarbons much beyond the current 85mb/d is not likely, and increasing net production is even less likely. As you may know, net production per capita peaked in 1979. Actual net production is peaking now. This is the figure that counts: Actual current Net Production Delivered to Society.
Growing this figure is technically possible, and may happen with some massive production bonanzas, i.e. we may see actual production push above 90mb/day, or higher, and may even see net production increase, but a major glut of hydrocarbons? No. Not remotely.
When settlers first came to North America, they found copper nuggets the size of horses exposed in river beds. China just bought the best known, last, huge, moderate-to-low-grade, strip-minable, high-cost copper field in the world, in Afghanistan, for $billions over the western bids. There will be others, but rest assured: They will be lower grade, higher cost, and the competition will be more intense. When was the last time you bought a “copper” fitting at the hardware store. They’re crap. The alloys are crap. Because the ore quality is in decline and the costs of extraction are rising. Same with oil, trees, tin, coal….
Make no mistake: The war for the dwindling materials and energy flow is well underway.
Thank you, Rex, for this commentary on EROI and the quality and cost of hydrocarbon resources. Complex systems like economies are nonlinear, and so history does not necessarily track linear extrapolations of present trends. With that caveat in mind, the preponderance of evidence supports the notion that fossil fuel energy may remain abundant in the sense that supply meets or exceeds demand in a global recession, but the price of liquid fuels may remain high enough to create a drag on growth, employment, tax revenues and all the other economic metrics impacted by high energy costs.
Charles Hugh Smith – Of Two Minds
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.
For the second month in a row, the substantial increase in the all items index was mostly the result of an increase in the gasoline index, which rose 7.0 percent in September after increasing 9.0 percent in August. The other major energy indexes increased in September as well.
That’ll leave a mark.
Let’s have a look inside at the unadjusted figures.
Notables are Dairy, fruits and vegetables, up 0.5% and 0.4% respectively, while meats and cereals were each down a similar amount. Non-alcoholic beverages were up 0.7% on the month, which is a curious change.
Energy commodities were up in a seirous way, other than piped gas and electricity; all sorts of fuels were up 4.1% (again, unadjusted.) And all items less food and energy, unadjusted, was up 0.3%, not 0.1%, which is a 3.7% annualized rate of increase in core.
Apparel was up 4.1% while used vehicles were down 2.1%. Demand problem? Hmmm….
Finally, physicians and hospitals were up 0.4 and 0.5%, respectively, on the month.
If you want to see real stunners, look in the detail tables. Women’s clothing was up a shocking 24.2% on the month for outerwear and 13.4% for dresses (!) Girls wasn’t much better, up 10.1%. It appears that whatever the “new fashion” game may be for this fall the clothing designers are screwing women in a big way; my recommendation would be to not bite on that bait.
Another interesting internal indication in the data is that car and truck rental prices were down over 7% on the month; this maybe an indication of travel softness. These figures have been weak for the last year, and this is a rather notable secondary indication on business travel in particular.
Last year, Kirk Dorius and I travelled to London to participate in the kickoff of the Weinberg Foundation, an advocacy group for thorium energy. I am pleased to announce with them the formation of an “All-Party Parliamentary Group” or APPG that contains members of both the House of Commons and House of Lords, to consider the potential of thorium as an energy source.
In a word, “Duh.”
Here’s the thing folks, when you boil it all down — thorium is a no-brainer when it comes to a nuclear fuel and fuel cycle, assuming you want power and not bombs. It also is the enabling pathway to petroleum independence without changing the consuming end of the pipeline.
Many “green” evangelists are all ga-ga over electric cars. But they forget that while chargers are quite efficient (~80-85%) and electric motors are too (~85% for the best of what we can offer today) the fact remains that batteries have a crap energy density (meaning the amount of energy the contain per unit of both mass and volume is poor), they have a poor energy acceptance rate (how quickly you can charge said battery, requiring hours .vs. minutes to fill a fuel tank) and in addition they simply shift where the energy production takes place (to the coal plant behind the undesirable neighbor’s house.) In other words they simply move the exhaust pipe instead of getting rid of it.
Indeed when you stack the inefficiencies electric cars don’t look so good. A typical gasoline or diesel car is somewhere around 30% efficient end-to-end (that is, the number of BTUs of energy that go into the fuel tank .vs. the amount of energy that actually moves the car.) The rest is lost as heat in some form or fashion, whether out the tailpipe, rejected by the radiator or as friction somewhere in the middle.
But neither do electric cars. When we stack efficiencies we see the problem quite quickly:
30% (conventional nuclear or coal) to 50% (combined-cycle such as natural gas) at origin. 90% efficiency in transmission (transformers, loss on the electrical line, etc) 85% efficient (battery charger) 80% efficient (battery itself, assuming 50% charge state — much less at 85%+ of full charge, perhaps as little as 50%) 85% motor, controller and gearing (in the car) ===== 15.6 – 26% end-to-end
Oops; that’s no better and if you start with 30% gross at the generating end it’s actually worse!
So the argument for “energy efficiency” doesn’t work in favor of electric.
Why does this mean we should use thorium?
Simple — thorium reactors can be run not on pellets of fuel as conventional reactors using water as both a moderator and coolant, but rather with the fuel dispersed in a molten salt used as the working fluid and a fixed moderator in the reactor chamber.
This is a huge win for a number of reasons:
- The reactor runs at much higher temperatures. Typical operating temperatures are in the 550-650 Celsius range as opposed to water-cooled reactors which are limited by the critical point (374 Celsius); beyond that temperature irrespective of pressure water does not remain liquid. This means that the heat of vaporization is zero, which in turn limits the useful working temperature of the coolant. The other problem with water is that to approach the critical temperature requires containment at extraordinary pressures; 217 atmospheres to be exact (over 3,100 psi!)
- LFTR reactors run at normal atmospheric pressure. A big part of the danger with conventional reactors comes from the properties of water at high temperature. In order to keep it liquid you must hold it under extraordinary pressure. Everything is much more difficult from an engineering perspective and any failure of that pressurized state is catastrophic as the water instantly flash-boils to all steam, resulting in the reactor having no coolant! This is also why a conventional reactor requires uninterrupted power all the time; you cannot allow the coolant temperature to go over the critical point and since the fuel produces decay heat after shutdown you therefore must provide continual coolant flow until that heat is extracted. The failure of that continual flow is what led to the Fukushima disaster. LFTRs do not suffer from this problem as they do not operate under high pressure. If all power is lost at a LFTR plant the coolant containing the fuel can be allowed to drain by gravity into tanks where, with no moderator present, the reaction stops and it simply cools over time on its own. This passive safety was tested and proved effective in the United States in the test plant operated at Oak Ridge some 40+ years ago!
- You can use the higher process heat level, up to 650C, to directly convert any carbon source to liquid hydrocarbons. Coal happens to be a convenient source of both thorium and carbon, but in point of fact carbon can come from any source — including atmospheric CO2. The Germans figured out how to turn coal into liquid synfuel during WWII and we have refined that process since then.
- Reprocessing is continuous and online in form; the reaction products are thus nearly all consumed over time, producing a waste footprint that is a tiny fraction of conventional nuclear plants. Conventional uranium-fuel-cycle reactors only have ~5% of the fuel material in the reactor that is actually fissile; the rest is bombarded over time. Some turns into plutonium that can then be reprocessed and burned up, but a large amount of the remainder winds up as highly-radioactive byproducts that are dangerous for enormous lengths of time. A commercial LFTR would be built with “online” reprocessing to separate out the neutron poisons (specifically Xenon) and introduce more thorium as the fuel is consumed. The result is that most of the reaction byproducts remain in the reactor until they are reduced to less hazardous (or non-hazardous) elements and compounds; the decay heat released in this process also is harvested to produce useful energy instead of being dispersed in big cooling pools.
This is not necessarily a “cheap” oil replacement, but “cheap” is relative. Can we produce $20/bbl equivalent oil products with this technology? No. Can we match $100/bbl oil? Probably, and that’s the point — we can both produce electricity and 100% independent liquid hydrocarbons to fuel our buses, trucks and cars.
In addition we would be using a far safer technology than we use today for nuclear power.
I highlighted this alternative in Leverage for a specific reason — behind every unit of GDP is a unit of energy. If we are to ever rationalize our federal government spending on all things, including most-particularly our military, we must become energy independent.
We proved that these reactors can work in the 1950s and 60s at Oak Ridge. This is not “pie in the sky” technology or the subject of science fiction. It is a matter of science fact that we can, if we’re willing, exploit to resolve our domestic energy requirements.
It appears that Britain is going to join China and India in heading down this road, leaving America behind.
We cannot afford to be left behind.
Incidentally, you might be interested to know that we, right now, have the technology to create a 100% renewable form of energy; one that would satisfy the most ardent environmentalist, at the same time be the most efficient source of power ever used. It’s called thorium. It’s real and our own Navy has been using it since 1964. If you would like to learn more, go to Coalition of Freedom.
The Coalition of Freedom
Jobs, Opportunity, and Prosperity
“Find out why America is not energy independent and what you can do to help change that.”
You are cordially invited to a regional organization meeting for the Coalition of Freedom, Friday March 9th at Sawmill Creek Resort in Huron, Ohio.
The meeting time will start at 7:30pm and will last till 9:30pm. Doors open at 7:00am. (See the attached flyer for address and phone number) .
The Resort has a bar and restaurant that will be open before and after the meeting. (blue jeans are fine but please wear a collared shirt)
All members of the Public interested in Thorium Energy are invited to attend……so please distribute this email freely.
“Thorium has the realistic potential to cross political party lines and Unite Republicans and Democrats under the banner of common sense.”
Thorium is America’s Future
The topics of discussion:
1) Explain what the Coalition of Freedom is and what their mission is.
2) How Thorium energy is a game changer for America and Northern Ohio.
3) Pushing for LFTR’s Liquid Flouride Thorium Reactors in Northern Ohio.
If you do not know about Thorium Energy please review these three videos below.
4) Planning an Ohio Bike Week event to raise awareness of LFTR and looking for volunteers, donors, and sponsors. (Thorium Remix Party).
- Bringing other attractions such as the Vietnam Veterans Traveling Wall Memorial
- The Liberty in America Bus
- Other recognizable speakers to be mixed in with a Rock and Roll Concert and celebration.
5) Relating “American Exceptionalism” and a “Smaller Federal Government” (thru State Sovereignty) to the campaign to establish LFTR in Northern Ohio.
6) What effect LFTR assembly line production will mean to Unions and to their politics and what type of Jobs and pay can be expected by the manufacturing industry.
- LFTR plants will be created as modular components on an assembly line….we have the manufacturing know how in Northern Ohio to make LFTR a reality.
7) We will demonstrate of how you can actively engage local political powers (Democrat and Republican Central Committees) to help make LFTR a reality and push for American Exceptionalism.
8) How your group can help and how you can advertise your cause at Ohio Bike Week with us.
9) How you can help the effort by locating investors for Flibe energy.
If you plan on attending you do not need to RSVP but we would appreciate any notice you might give us so we can plan on how large of room we will need.
If you plan to attend or want more information please email Ken Kay.
The Coalition of Freedom is not a Tea Party Group. It is a non-partisan Pro-America organization concerned with Energy Independence and State Sovereignty. This is a union friendly event.
Thank You in advance for attending this gathering.
Thank you in advance for encouraging your group members and business associates to attend this meeting.
Jon P. Morrow
View Flier For Event: COF MARCH 9th INVITE 1