Applying a Peak Oil Filter to Financial Choices

Peak Moment 222: "If peak oil occurs, it will dominate most everything else that we do, because energy drives everything." Financial consultant Jim Hanse's peak oil filter doesn't just guide investment decisions for his client portfolios. He applies it to his personal lifestyle (you may be surprised to learn what car he drives). He's also concerned about community impacts when fuel prices are higher, like centralized hospitals dependent on people driving to them, rather than many smaller localized facilities. Jim makes an important point: "If I get it right but my community gets it wrong, it could overwhelm everything I've done personally."

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  Education

[waswestkan]

And here I thought that those who make Peak auto products came out with line of engine oil filters :) Another interesting interview although it's not information that I can personally make use of at this time. My understanding is that the refineries are concentrating on gasoline product ion& that leave Diesel production short. I pretty sure the fuel use by locomotives & ships isn't the light fuel oil used by trucks tractors etc. .

[peakmoment]

Yes, if you watch the video, Jim talks about diesel as a real indicator of how tight oil supplies are.

You can't make personal use of this info at this time? Nothing you can or need to do to increase your security/flexibility as oil prices go up? You must get electricity from solar or wind, have a home garden, a well with manual pump, bicycle everywhere, car share -- and are partnering with others in your community to meet other essential needs.

[vention4wh]

2. Now I'm going to concentrate on adapting my lifestyle to the point where I'll be much more comfortable in the next financial downturn. I'll do solar, rain catch, permaculture and have both of my extra rooms rented out to permaculture and organic gardening types like me. It should be fun.

[auroraglacialis]

Addint to my last comment, i would want to say that the most viable concepts I have seen for biofuel is to use floating contraptions in the oceans that grow algae to produce oil. But I dont think that expanding agriculture onto the already badly damaged oceans is something humans should so. Ethanol may be a good solution for a local economy using minimal fuel for essentials, but not for millions of people driving cars.

[auroraglacialis]

I dont know what these numbers are supposed to mean. if oil would have an EROEI below 1, they would not pump it. I never heard that before. Oil has an EROEI of about 15 for conventional oil and goes as low as 3 for tar sands. Ethanol is about in the range of tar sands. But no matter if they use corn or something else - it will take up more land than there is available. Already land is getting scarce and humans use 40% of photosynthetic capacity - no way this can increase much more.

[switchgrassfuel]

my stats on ethanol and oil energy balance are from a April 2012 ethanol blender pump directory at my local gas station. it has oil at 0.81 and ethanol at 1.87. now i am wiling to say that since my info is sponsored by ethanol it might be byest and even thou ethanol is made mostly with corn i think of corn as a starting place. the industry is evolving and improving. their are people trying to make it better every day.

[auroraglacialis]

I've debated energy a lot as well&did a pHd in earth science. EROEI for conventional oil is somewhat along the lines of 20:1. Tar sands are 5:1. Ethanol is said to be between 1:2 to 6:1, so at its best, ethanol is about as good as tar sands. Ethanol also takes up huge amounts of land. To grow enough corn to run everything at E90 in the US, IIRC all agriculture would have to be dedicated to this. It displaces food production and natural areas. It is unacceptable for social and ecological reasons.

[switchgrassfuel]

Energy return on energy invested always seems to come up. why don't you look at the energy return on oil and compare it to ethanol. ethanol might not be perfect but its energy return is better than oil when you count its co- products. and remember nothing goes to wast. i have debated ethanol for years and i still believe that it is a step in the right direction for some people. i also will add that it has a lot of improving to do. hopefully it don't need as much land and water in the future.

[auroraglacialis]

The numbers vary between about a 1:1 ratio of oil for fertilizer, herbicides, tractors, machines, fermentation, distillation and transport - meaning that there is no gain at all - ranging to something like a 1:2 ratio, meaning that it takes 1 gallon of oil or ethanol to make 2 gallons of ethanol. Thats a rather bad EROEI. The US can actually do a bit more of that because they have a lot of land, but globally, this is nonsense as it competes with food and many countries are smaller.

[switchgrassfuel]

even in the US their cutting back on production of ethanol because of corn prices. but the US consumes so much fuel that they need the 13 billion gallons a year they produce from corn. even in gas equivilents gallons that is a lot of fuel. and it didn't take that much diesel to get it.

[auroraglacialis]

I have a question that may be a bit heretic but is he saying in the video that we actually should invest in oil and coal companies as part of the portfolio? Because in a weird way it would make sense, as declining oil production means oil scarcity and this drives up the price of oil and thus the profits of the oil companies who can then ramp up unconventional oil and grow their business. I'd not do this for moral reasons, but from an investment standpoint it looks like investing in oil is AAA?!?

[auroraglacialis]

I cannot say much about MN but want to tell you a story from Germany. Here, it is now almost December and there are still fields full of corn standing around. As I understand it, the machines to harvest this corn that has replaced almost all other grains because of the demand for E10 fuel, are running day and night but they cannot harvest it all. It takes massive amounts of diesel to run these machines and recent studies showed that even this E10 makes little sense, so they are cutting it.