Category: Geopolitics

List of Warmest Years on Record Globally

9 of the top 10 hottest years globally have occurred over the past decade, when measured using three different global temperature data sets. The top 20 warmest years have all occurred during the last 24 years.

How do the record high temperatures over the spring and summer in the US compare on a global basis? While numerous articles on global temperature trends exist [1], I decided to go to the primary temperature data sources to find out. Below I have created a list of the 20 warmest years on record globally, using three data sets: NASA GISS, the UK Meteorogical Office, and NOAA / UAH [2]. While the three data sets vary in length from 40 to 150 years, the 20 warmest years turn out to have all occurred in the last 24, making it possible to construct an average temperature for the hottest 20 years.

Rank Year Global Avg Temp (F) [3]
1 2010 58.28
2 1998 58.22
3 2005 58.15
4 2007 58.06
5 2002 58.05
6 2009 58.04
7 2003 58.03
8 2006 58.02
9 2011 57.98
10 2004 57.90
11 2001 57.89
12 2008 57.75
13 1995 57.70
14 1997 57.68
15 1999 57.65
16 1990 57.64
17 1991 57.64
18 2000 57.64
19 1988 57.59
20 1987 57.54

Since this is a divisive topic prone to political obfuscation, it’s worth noting that both the NASA Goddard Institute and the UK Meteorological Office officially support the theory of anthropogenic global-warming, while the research scientist responsible for the University of Alabama-Huntsville data set does not support this theory.

[1] This has been a popular topic: Economist, Live Science, ArsTechnica, Science Daily, and Wikipedia

[2] Here are the original data sets:

GISS Data: http://data.giss.nasa.gov/gistemp/tabledata_v3/GLB.Ts.txt and www.movingandstoragesite.com moving and storage

NOAA/UAH: http://vortex.nsstc.uah.edu/data/msu/t2lt/resume builder online/uahncdc.lt

Hadley Meteorological Centre UK: http://www.metoffice.gov.uk/hadobs/hadcrut4/data/download.html#regional_series

[3] The data in this blog post was constructed by averaging data from the three underlying data series. The NASA GISS estimate of global mean baseline temperature of 14 degrees Celsius was used to adjust the temperature deltas provided by the original data series in order to show global mean temperature in Fahrenheit terms here.

Here is my excel spreadsheet with data and calculations.

Posted on by praveenghanta 7

Explaining the India – China Wealth Gap

As of 2011, China had a per-capita GDP (PPP) around $8400 per year while India’s per-capita GDP was  $3700. China has routinely exceeded 10% real annual GDP growth over the last two decades, and India’s GDP growth has been impressive, it has rarely exceeded 8%. China’s growth has exceeded India’s since its economic liberalization, but its turn towards capitalism also began earlier. China’s Deng Xiaoping began to liberalize China’s economy beginning in 1978, while in India P.V. Narasimha Rao and Manmohan Singh were not able to bring about serious economic reform until 1991. If India had liberalized at the same time as China, how much narrower would the wealth gap be? How much of the income gap between India and China is explained simply by timing?

Over the 13 years from 1979 to 1992, India’s per capita GDP (PPP) roughly doubled from $480 to $972, at an annualized per-capita GDP growth rate of 5% for the period. China’s economy averaged 10% growth over this same period! Since 2002, India’s per-capita GDP growth has averaged 9.5% on a PPP basis [1]. If India had grown at its more recent average of 9.5% per year over that period, per capita GDP would have risen to $1562 by 1992 – and India’s economy would be over double the size that it is today [2]. Fast-forward to the present, and this earlier liberalization would have led to a current per-capita GDP of $6000 in India, almost double current levels and in the same range (of middle income nations) as China [3]. One effect experienced in China has been an acceleration of growth post-liberalization – economic growth accelerated as reforms took hold. Had this occurred earlier in India as well, it’s possible that the 90’s and 00’s in India would have benefited from 9.5% GDP growth as well. If we use a 9.5% assumption for India’s growth from 1979 to present, then we get a present-day per-capita GDP in India of $8000 – not substantially different from China [4]!

Despite their huge differences, with China as an autocratic capitalist state and India as the world’s largest democracy, the two nations’ growth paths have not really been that different. All of the differences in government, corruption, infrastructure don’t really seem to have mattered that much, as a simple head start of 13 years drowns it all out. What a difference 13 years makes! The good news: India’s development was unnecessarily delayed, but is now well underway.

[0] All of this is based on the World Bank’s purchasing-power parity GDP per-capita data, as provided by Google’s public data service via http://crosscountrymovingcompanies.biz. This is GDP divided by mid-year population and adjusted for the difference in purchasing power in each country (normalized to US prices and quoted in dollars – this gives you a sense for how poor people in these nations really are).

[1] From the Google chart, 3582/1723 = India’s economy grew 2.08 times from 2002 through 2010. This equals a compound annual rate of growth of 9.57%.

[2] Take the 9.5% growth rate post-2002, and apply it to the 13-year period starting in 1979 at $480 GDP/capita (PPP). This gives you $1562 by 1992.

[3] If we then assume that India’s economy grew exactly as it did historically from  1992 – 2011 (growing 3.8x), and multiply this by 1562 (the new starting point in 1992), then we get a 2011 GDP/capita of $5946.

[4] Now assume that India simply grew at a 9.5% rate from 1979 on – the rate that it has managed from 2002-2011 (a period which includes the financial crisis). This would 1.095 ^ 31 = 16.67x growth. From a starting point of $480 GDP/capita, this would leave India at $8000 GDP/capita (PPP) by year end 2011.

P.S. In researching this post, I noticed that India’s growth rates compare much more favorably in PPP terms than they do in exchange rate terms. This might be explained in part by the fact that the Rupee has been much more volatile than the Yuan over time. While inflation is now rising quickly in both countries, particularly in metro areas, perhaps India has remained less expensive than China over time. Comparing these two graphs shows the difference when comparing unadjusted $ GDP/capita to PPP GDP / capita. I use the PPP measure as it more accurately reflects the quality of life experienced by someone living in either country, since cost matters just as much as income.

Posted on by praveenghanta 0

Countries By Peak Oil Date – 2011 Data Update

In 2009 I wrote a post in which I compiled a comprehensive list of the world’s oil producing nations by peak-oil status, based on BP’s annually-released Statistical Review of World Energy. I’ve updated that list here using the data released in 2011, which includes production data through 2010. The new list shows that several more countries have either passed peak production or are currently stuck on a production plateau. Here is the data:

Country Peak Prod % Off Peak 2010 Prod Peak Yr
US 11,297 -33.5% 7,513 1970
Venezuela 3,754 -34.2% 2,471 1970
Other Middle East 79 -52.2% 38 1970
Libya 3,357 -50.6% 1,659 1970
Kuwait 3,339 -24.9% 2,508 1972
Iran 6,060 -30.0% 4,245 1974
Romania 313 -71.5% 89 1976
Indonesia 1,685 -41.5% 986 1977
Trinidad & Tobago 230 -36.6% 146 1978
Iraq 3,489 -29.5% 2,460 1979?
Brunei 261 -34.0% 172 1979
Peru 196 -19.8% 157 1980
Tunisia 118 -32.7% 80 1980
Other Europe & Eurasia 12,938 -97.1% 374 1983
Other Africa 241 -41.0% 143 1985
Russian Federation 11,484 -10.6% 10,270 1987
Egypt 941 -21.7% 736 1993
Syria 596 -35.4% 385 1995
Gabon 365 -32.8% 245 1996
Argentina 890 -26.9% 651 1998
Uzbekistan 191 -54.5% 87 1998
Colombia 838 -4.5% 801 1999?
United Kingdom 2,909 -54.0% 1,339 1999
Australia 809 -30.5% 562 2000
Norway 3,418 -37.5% 2,137 2001
Oman 960 -9.9% 865 2001?
Yemen 457 -42.2% 264 2002
Other S. & Cent. America 153 -14.2% 131 2003
Mexico 3,824 -22.6% 2,958 2004
Denmark 390 -36.0% 249 2004
Malaysia 793 -9.7% 716 2004?
Vietnam 427 -13.5% 370 2004
Italy 127 -16.4% 106 2005
Saudi Arabia 11,114 -10.0% 10,007 2005?
Chad 173 -29.7% 122 2005
Equatorial Guinea 358 -23.5% 274 2005
Nigeria 2,499 -3.9% 2,402 2005?
Ecuador 545 -9.1% 495 2006?
United Arab Emirates 3,149 -9.5% 2,849 2006?
Algeria 2,016 -10.2% 1,809 2007
Angola 1,875 -1.3% 1,851 2008 / Growing
Other Asia Pacific 340 -8.2% 312 2008?
Canada 3,336 – 3,336 Growing
Brazil 2,137 – 2,137 Growing
Azerbaijan 1,037 – 1,037 Growing
Kazakhstan 1,757 – 1,757 Growing
Turkmenistan 216 – 216 Growing
Qatar 1,569 – 1,569 Growing
Rep. of Congo (Brazzaville) 292 – 292 Growing
Sudan 486 – 486 Growing
China 4,071 – 4,071 Growing
India 826 – 826 Growing
Thailand 334 – 334 Growing
Peaked / Flat Countries Total

64,182 78.2% of world oil production
Growing Countries Total

17,912 21.8% of world oil production

This analysis shows that since 2009, a considerably larger proportion of the world’s total oil production is occurring in countries that may be at or past peak production. Only 12 countries are definitely still pushing oil production past previous highs. Saudi Arabia is a bit of a question mark – it produced 10% less than its peak year (2005) in 2010, but claims that it has ample spare capacity and reserves to push beyond the old highs.  The 2010 data may also suffer from the after-effects of the financial crisis, although world oil prices and production did rebound sharply in late 2009 and 2010. While the 2012 data will show higher total world production, will they show increasing reliance on a shrinking number of growing producers?

[1] Here is my spreadsheet, based on the BP data. All production numbers in the table above are expressed in thousands of barrels of oil per day. Unless you’re ready to learn how to become a real estate agent, it’s time to start saving.

[2] The original 2011 Katy TX BP Statistical Review of World Energy spreadsheet can be found here.

[3] As in the first version of this list, a country must be 10% below peak production, and its peak must have occurred more than five years in the past, to be considered as having peaked.

[4] The notes in the original list still apply for the following countries: Russia, Malaysia, Other Africa, Nigeria, Chad, and Ecuador.

Posted on by praveenghanta 6

China’s GDP May Exceed US GDP by 2017

When measured in purchasing power parity terms (PPP), China’s GDP stood at $7.9 Trillion in 2008, compared to 2008 US GDP of $14.4 Trillion. If China’s GDP growth exceeds US GDP growth by 8% for the next 8 years, then China’s GDP will exceed US GDP by 2017 [1].

China need not continue growing at a 10% clip to surpass the US – it simply needs to exceed US GDP growth by 8%, which it has done for most of the last 3 decades. If the US recovery from the Great Recession is prolonged, it’s quite possible that US GDP growth will hover between 0 and 1% for some time. In that scenario, China need only maintain 8% GDP growth over the next decade. They appear likely to accomplish this feat in both 2008 and 2009, during the heart of the recession!

In nominal (exchange-rate) terms, China’s 2008 GDP was only $4.4 Trillion, still less than a third that of the US. But that will change with a weakening dollar and an appreciating yuan, and this may be accelerated if key commodities like oil eventually begin trading in currencies other than the USD. The NextBigFuture blog takes into account the historical trend of US-Chinese exchange rates, and concludes that even in nominal terms, China’s GDP will surpass US GDP in 2017.

Don’t be surprised if eight hence, China has the world’s largest economy. After all, China and India were the world’s largest economies for most of the last few millenia [2]. The world economic order appears to be reverting to norm.

[1] The US economy was 82% larger than the Chinese economy in 2008, when measured in PPP terms. 8% growth compounded over a decade yields 85% growth (1.08^8) – which means that the Chinese economy will just barely surpass the US economy in eight years if China’s growth continues to exceed US growth by 8%. In concrete terms, assume that China grows at 10% per year over the next eight years, and that the US grows at 2% per year. In 2017, China’s GDP would be $16.9 Trillion, compared to US GDP at $16.85 Trillion.

[2] See the chart on pdf page 4 of this paper presented to the International Conference of Commercial Bank Economists:

Click to access ICCBEChinaIndia.pdf

Posted on by praveenghanta 2

How Much Should the US Spend on Defense?

In this time of fiscal constraints and global insecurity, how much should the United States spend on national defense? US defense spending hit $710 Billion in 2008 when foreign wars are included [1], amounting to roughly half of all worldwide defense spending [2]. The table below compares US defense spending with US GDP, with our adversaries’ defense budgets, and with the rest of the world.

Category Amount (2008 USD) Comparison
US Defense Spending $710B 4.98% of 2008 US GDP [3]
World Defense Spending $1470B US share is 48.3% of world defense spending [2]
US Adversaries’ Defense Spending – China, Russia, Iran, Myanmar, Venezuela, Cuba, North Korea $217B US Defense spending is 3.3 times that of our adversaries [4]
World Minus NATO $442B US Spends 1.6 times the World minus NATO [5]
World Minus Major US Allies – UK, France, Japan, Germany, Italy, South Korea, Australia, Canada, Israel $473.3B US Spends 1.5 times the World minus major allies [6]

Defense hawks have advocated that the US spend at minimum 4% of GDP on defense annually. This would equate to a defense budget of roughly $570 Billion in 2010, roughly in line with President Obama’s FY10 budget. But aligning defense spending with GDP is somewhat arbitrary, as US defense spending as a percentage of GDP has varied significantly over time.

A more rigorous approach would involve comparing US defense spending to world defense spending, and to its adversaries’ defense spending. The US could match the defense spending of the entire non-NATO world for roughly $450 Billion. With NATO members as long standing allies, the US could match the defense spending of all its theoretical adversaries combined for 37% less than it spends today. The combined defense spending of credible adversaries (China, Russia, North Korea, Iran, and some Arab nations) would still amount to less than half of America’s defense budget!

As the US begins to contemplate fiscal discipline (as lenders slowly run out), cutting the military budget will be unavoidable. Gradually cutting $200B annually from the US defense budget would make a huge impact on the deficit. Thankfully, it appears that cuts of this size can be made without jeopardizing the defense of America itself.

[1] From the US DOD Green Book, FY2009 defense spending appropriations total $709.58 Billion – see pdf page 14 (page 6 as marked on the document) for the FY2009 constant dollars figure.

[2] There are a number of estimates of total worldwide military expenditure. The Center for Arms Control and Non-Proliferation and SIPRI both estimate that total worldwide defense spending equaled roughly $1.47 Trillion in 2008. US spending of $710B equals 48.3% of this total. The Center for Arms Control’s numbers match the US DOD numbers and NATO numbers, lending credibility to these estimates.

[3] The US BEA provides its estimate of 2008 US GDP on page 8 here – $14.264 Trillion.

[4] This estimate includes all potential US adversaries that spent more than $1B on defense in 2008, per the Center for Arms Control. The 2007 estimate for North Korea was used.

[5] NATO countries excluding the US spent $318 Billion on defense in 2007 (see page 4 of the pdf). This number was not inflation adjusted, making it a very conservative estimate for 2008.

[6] All US allies with defense budgets greater than $10B are included here, per the 2008 Center for Arms Control estimates. Saudi Arabia, Turkey, Brazil, and Spain are not counted as major allies here, making this a conservative list of major allies. All countries included on this list are secular democracies with almost no likelihood of engaging in future conflict with the US. Collectively, the UK, France, Japan, Germany, Italy, South Korea, Australia, Canada, and Israel spent $287 Billion on defense in 2008.

Posted on by praveenghanta 6

Is Peak Oil Real? A List of Countries Past Peak

Only 14 of the 54 oil producing nations in the world are still increasing their oil production. The era of cheap oil is definitively over, as shown below.

Is peak oil real? The BP Statistical Review of World Energy provides the data needed to answer this question. Using the 2009 edition, I have compiled a list of all oil producing countries and regions in the world, along with the production status of each, ordered by year of peak production. BP groups minor producers into categories like “Other Africa”, and “Other Middle East”, and that notation is used here. All production numbers are quoted in barrels/day.

Country Peak Prod. 2008 Prod. % Off Peak Peak Year
United States 11297 7337 -35% 1970
Venezuela 3754 2566 -32% 1970
Libya 3357 1846 -45% 1970
Other Middle East 79 33 -58% 1970
Kuwait 3339 2784 -17% 1972
Iran 6060 4325 -29% 1974
Indonesia 1685 1004 -41% 1977
Romania 313 99 -68% 1977
Trinidad & Tobago 230 149 -35% 1978
Iraq 3489 2423 -31% 1979
Brunei 261 175 -33% 1979
Tunisia 118 89 -25% 1980
Peru 196 120 -39% 1982
Cameroon 181 84 -54% 1985
Other Europe & Eurasia 762 427 -44% 1986
Russian Federation 11484 9886 -14% 1987*
Egypt 941 722 -23% 1993
Other Asia Pacific 276 237 -14% 1993
India 774 766 -1% 1995*
Syria 596 398 -33% 1995
Gabon 365 235 -36% 1996
Argentina 890 682 -23% 1998
Colombia 838 618 -26% 1999
United Kingdom 2909 1544 -47% 1999
Rep. of Congo (Brazzaville) 266 249 -6% 1999*
Uzbekistan 191 111 -42% 1999
Australia 809 556 -31% 2000
Norway 3418 2455 -28% 2001
Oman 961 728 -24% 2001
Yemen 457 305 -33% 2002
Other S. & Cent. America 153 138 -10% 2003*
Mexico 3824 3157 -17% 2004
Malaysia 793 754 -5% 2004*
Vietnam 427 317 -26% 2004
Denmark 390 287 -26% 2004
Other Africa 75 54 -28% 2004*
Nigeria 2580 2170 -16% 2005*
Chad 173 127 -27% 2005*
Italy 127 108 -15% 2005*
Ecuador 545 514 -6% 2006*
Saudi Arabia 11114 10846 -2% 2005 / Growing
Canada 3320 3238 -2% 2007 / Growing
Algeria 2016 1993 -1% 2007 / Growing
Equatorial Guinea 368 361 -2% 2007 / Growing
China 3795 3795 – Growing
United Arab Emirates 2980 2980 – Growing
Brazil 1899 1899 – Growing
Angola 1875 1875 – Growing
Kazakhstan 1554 1554 – Growing
Qatar 1378 1378 – Growing
Azerbaijan 914 914 – Growing
Sudan 480 480 – Growing
Thailand 325 325 – Growing
Turkmenistan 205 205 – Growing
Peaked / Flat Countries Total – 49597 – 60.6% of world oil production
Growing Countries Total – 32223 – 39.4% of world oil production

Only 14 out of 54 oil producing countries and regions in the world continue to increase production, while 30 are definitely past their production peak, and the remaining 10 appear to have flat or declining production [1]. Put another way, peak oil is real in 61% of the oil producing world when weighted by production. Since 2008 capped a record run for oil prices, most countries and oil companies were trying all-out to increase production. While a handful of producers (think Iraq) might be limited by above-ground factors, the majority of producers simply couldn’t do any better in 2008 [2].

The evidence of the demise of the cheap oil era has become insurmountable. In the face of the highest oil prices on record, the great majority of the world’s oil producers were incapable of taking advantage and producing more oil. Many nations including the US saw their oil production peak decades ago – there simply is no turning the clock back. This list shows that we are relying on a small number of countries to keep providing cheap oil. We need to move faster to alternatives and greater energy efficiency, before the last fourteen peak as well.

* More information on these countries:

  • Russian Federation – Russia’s oil production collapsed by the early 90’s as the Soviet Union collapsed, but despite a decade of growth, Russia’s own oil execs don’t think the old peak can be surpassed.
  • India’s production appeared to plateau in 1995, and has stayed within a steady range since. The EIA forecasts Indian oil production to remain flat or decline slightly in the near future.
  • Republic of Congo (Brazzaville) hit a production plateau in 1998, though current production is still very close to 1999 peak levels.
  • Other Central & South America – The remaining countries of the Americas hit a production peak in 2003, though it’s still too soon to know if this will be final peak.
  • Malaysia has been on a production plateau since 1995, and the EIA projects flat or falling production.
  • Other Africa – Oil production in much of Africa is potentially impacted by above-ground constraints, so it’s definitely possible that production will rise here. It will rise from a low base of only 50,000 bpd however, and may not have much impact on total world production.
  • Nigeria is impacted by domestic insurgencies in its oil-producing regions, and may be able to lift production if the political situation improves.
  • Chad’s oil production history is too short to definitively identify a peak in production, but the drop-off since 2005 has been dramatic.
  • Italy has been on a production plateau for over 10 years, and it’s unlikely that a mature economy is significantly under-exploiting its resource potential.
  • Ecuador’s production grew rapidly until 2004, but has leveled off and declined somewhat since then.

[1] To be considered past-peak, a producer’s current (2008) production has to be at least 10% less than its best year, and the best year must have occurred prior to 2005. Some countries’ production has been artificially constrained by political and other non-geological considerations. But in some of these cases, it will be difficult to pass an old peak because decades of depletion have occurred since that peak. Iraq peaked in 1979, making it all the more difficult to pass that now.

[2] While OPEC maintains formal production quotas, it is widely believed that only Saudi Arabia had true spare capacity in 2008, while all other OPEC nations were producing at capacity. The truth is unclear, since OPEC nations do not provide detailed reserve statistics for their oil fields.

Total has created its own short list of oil producers past peak, and Wikipedia has a list here.

Posted on by praveenghanta 13

How Long Until Greenland Melts?

It would take 7400 years to melt Greenland at currently observed ice melting rates, and many hundreds of years even with a non-linear increase in melting rates.

Numerous studies and direct observation show that Greenland’s ice sheet is melting, and the latest studies show that snowfall on Greenland is not sufficient to offset this loss. If the entirety of Greenland’s ice sheet were to melt, sea levels worldwide would rise by roughly 20 feet. This rise would severely damage or wipe out many of the world’s major cities, and accordingly the threat of catastrophic sea level increase is listed among the primary threats of global warming.

This brings to light an important question: how long do we have until Greenland’s ice sheet melts, or until its melting causes a significant amount of sea level rise?

Greenland’s ice sheet has a total volume of 2.6 million kilometers cubed, and according to a recent study, lost an average of 222 km cubed of ice in the last couple of years. In 2007, the year that Arctic ice cover set a new summertime minimum, 350 km cubed of ice was lost. Assuming this extreme rate continues, Greenland will be fully melted in 7400 years. Of course, ice melt rates are non-linear, and so this rate could increase considerably as temperatures rise.

Assume for a moment that the rate of ice melt rises by an order of magnitude (10x) beyond the 2007 record. 740 years of melting would still be required to melt all of Greenland, and even at that rate sea levels would rise only 2 feet by 2100! If the ice immediately begins melting at 100 times the record rate, then a real catastrophe would ensue, as sea levels would rise by the full twenty feet before the end of the century.

What would it take to trigger a catastrophic increase in Greenland’s ice melt rate? Unfortunately, this isn’t yet well understood, with some research showing that Greenland’s ice sheet could tolerate significantly higher temperatures. This is based in part on research showing that during the last interglacial period, 125,000 years ago, about half of the Greenland ice sheet persisted despite temperatures 5C higher than today. It’s a good idea to keep this and the melt rate calculations in mind when weighing the threat of AGW-induced sea level rise against potential solutions.

Posted on by praveenghanta 6

How much energy do we need?

energyvshumandevelopment

Energy usage vs UN Human Development Index, 1997

How much energy do we need? In traditional economics, this question is meaningless, as humanity simply consumes the amount of energy demanded at the market-clearing price. But in a resource-constrained world, this question becomes pertinent. Can the world’s energy supplies power a future in which all of mankind uses the same amount of energy as the average American? What level of energy usage is possible, and as fossil fuel sources run short, what kind of renewable energy investment will be required? Let’s examine some scenarios:

Scenario 1: The World at American Standards

The United States consumes 100 quadrillion btu of energy annually. If the world’s population stabilizes around 9 billion, bringing the entire world up to US energy consumption would require 6000 quadrillion btu per year. This is more than twelve times current energy production, a figure that even optimistic forecasters doubt possible. If solar panels cost 50 cents per watt installed (90% cheaper than today and cheaper than coal), an investment of $500 Trillion would be required to provide this amount of energy.

Scenario 2: The World at European Standards

The graph above shows that the US could cut per capita energy consumption by 70% without a significant drop in quality of life. Achieving this standard worldwide would require total energy production of 1800 quadrillion btu per year, still more than triple today’s capabilities. An investment of $150 Trillion would provide enough solar energy to power the world at these standards, a number over double current world GDP.

Scenario 3: Current Energy Usage per Capita

The scenarios above assume that the developing world eventually reaches parity with the industrialized world. Assume instead that current energy usage is maintained on a per capita basis, with the world’s population stabilizing at 9 billion. The world would consume 700 quads of energy per year. This level of energy usage would require $60 Trillion in investment, which might be achievable over time.

Conclusion

Unless energy prices drop by 99 percent via nuclear fusion, the world’s economy is likely to be energy-constrained in the future. It’s highly unlikely that the entire world will ever reach an American or even European level of energy consumption, and even current energy consumption levels will require a massive investment to reach sustainability. The calculations above assume that renewable energy will become significantly cheaper than coal, and yet the cost of replacing the world’s energy infrastructure is enormous. But in the long run, it will be necessary!

Calculations

At 50 cents per Watt installed, what’s the price per kilowatt-hour that I’m assuming? Assume that a 1kW solar system produces 1800 kWh per year, as according to SolarBuzz. Over a 30 year lifetime the system would produce 54000 kWh. If this system costs $500 at 50 cents per watt, then $500 / 54000 kWh = 1 cent per kWh. This is much cheaper than retail delivered electricity generated from coal.

Scenario 1:

1800 kWh * 3413 btu / kWh = 6143400 btu per $500 system

6000 quadrillion btu / 6143400 btu/system = 976 billion 1kW systems needed

At $500 each, that’s $490 Trillion.

Scenario 2: 1800 is 30% of 6000, so 1800 quadrillion btu would require $147 Trillion in investment.

Scenario 3: 700 is 11.6% of 6000, so 700 quadrillion btu would require $57 Trillion in investment.

Posted on by praveenghanta 7

Return on our Iraq Investment

As the fifth anniversary of the start of the Iraq war comes and goes, the Bush administration touts the success of the “surge” in American force levels begun last year, while those opposed to the war point to a litany of failures to denounce the entire enterprise. Both the administration and presidential hopeful John McCain contend that success in Iraq will pay huge dividends for future generations. Which side is right, and how can we measure the true cost (and benefits) of our Iraq engagement?

An estimate of the Iraq War’s return on investment can measured by weighing estimates of its total cost against its current and projected future benefits. On the cost front, the most conservative measure of the cost of the war is $600 Billion, roughly the amount directly spent on the war over its first five years. The benefits of the war can be measured in terms of its effects on US national security, US political relations, US energy security, and potential social and economic benefits for Iraq.
Read the full entry (461 words) …

Posted on by praveenghanta 0

Why are Oil Prices so High? An Energy Primer

10/21/2008 Update:Supply and Demand have now driven prices down significantly, as fears of a global depression, and reduced driving worldwide, have led to decreased use of oil. How significant was speculation in the runup to $147 oil? Certainly it played a part, just as speculation played a part in the dot com boom and the housing bubble. But oil is still up 700% from its lows around the turn of the century, and that’s due to the fundamentals explained further below.

05/22/2008 Update: As this article has become far and away my most-read, and since oil is now cruising towards $140 a barrel, I thought an update was deserved. For those without the time to explore the links below, oil is rising for a simple reason: oil production has not risen significantly since 2005, while demand for oil worldwide continues to rise rapidly. The simple law of supply and demand is moving oil prices up, and no number of Congressional hearings will change that.

With news of crude oil prices topping $110/barrel today, it’s no surprise that the price of gasoline and oil are once again on people’s minds. As an introduction, here are a few links on the global transportation energy (oil) situation today, and on various risks that we might face in the future.

What is Peak Oil? – This Wikipedia article on peak oil outlines the notion that oil production must someday hit a peak, since oil is a finite resource drawn from Earth’s crust.

Export Land Model – Jeffrey Brown, an independent oil geologist, and others at The Oil Drum provide insight into the effects of a simultaneous plateau or drop in oil production coupled with rapidly rising oil consumption in oil exporting countries. The ELM is a simple model that graphically illustrates some of the forces driving energy prices rapidly higher.
Read the full entry (271 words) …

Posted on by praveenghanta 3