Wow, you really are a Jedi.
But 90% of the human race hasn't died yet. The disturbance in the Force that you felt is from the near future.
---Futilitist
Russ_Watters does not like this.
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The Etp Model Has Been Empirically Confirmed
- Thread starter Futilitist
- Start date
- Status
But 90% of the human race hasn't died yet. The disturbance in the Force that you felt is from the near future.
---Futilitist
Russ_Watters does not like this.
It's bullshit, which is disappointing, not to mention perplexing coming from a generally respectable company like Lockheed.
We finally agree on something, Russ!
---Futilitist
Russ_Watters isn't sure about this one.
Russ,
I think it might be instructive at this point to review how all of this got started.
http://www.sciforums.com/threads/oi...modynamics-the-etp-model.145678/#post-3291958
Here are my answers to the 6 initial arguments you came up with in your failed attempt to try to refute the Etp model.
1) "For the most part, the use of energy does not add value to the economy, it removes value from the economy..."
You are completely wrong about this. The physics of energy underlies everything, including the economy. And all processes in the universe are subject to the first and second law of thermodynamics. Oil currently produces a net energy gain to the economy and to civilization. That is why we use it. After 2021 or so, oil will no longer have that ability.
"Petroleum’s primary contribution to the economy is that it is an essential element in the overall energy production process. Energy is as necessary to an economy as capital and labor, and petroleum has an exclusive position in that hierarchy; it is used to power the majority of the world's transportation equipment. The value of a hydrocarbon can be determined by the quantity of energy it is capable of supplying. The energy content (exergy) of a unit (barrel, gallon, etc) of a liquid hydrocarbon can be determined from its API gravity (see Study Graph# 20, Exergy vs API). A barrel of 35.7° API crude has an energy content of 5.88 million BTU, but not all of that energy is available for use by the general economy. A substantial portion of that energy is needed to extract the crude, and produce its finished products.
The extraction phase of petroleum requires an input of work in the form of goods, and services. The energy that comes from the well head in the form of crude must be converted into the components needed in the extraction process. These include not only the actual drilling of the well, and drilling equipment, but a huge number of tools, services, and direct energy inputs. To provide these the energy that comes from the well head in the form of crude must be used in the production of these needed goods and services. This conversion of energy into goods and services takes place in the Petroleum Processing System. Other energy forms, such as electricity and natural gas used in the process are not adding energy, they are merely exchanging energy with the petroleum they are helping to extract and process. Because petroleum must act as an energy source to have value, it must be capable of supplying at least enough energy to support its own production. The total energy used in the extraction and processing of petroleum must be less than, or equal to the energy content of the petroleum. If it were greater the energy production from petroleum would stop.
Over the forty six year period that the process was evaluated, on average, it required 4.9 BTU taken from the extracted crude to provide 1 BTU of work in the form of goods and services, which then could to be put back into the well head. This is an efficiency of 20.05%, which is about equal to the efficiency seen in most internal combustion engines. After petroleum is extracted about 4 out of every 10 BTU of its total energy content is used in the processing, and distribution of its finished products. The production of petroleum, and its products is a very energy intensive industry.
When petroleum can no longer provide energy to the general economy it will have little, or no value. Its only possible use would then be as an energy carrier; this assumes that some other energy source could replace petroleum's immense energy supply. As the energy to extract a unit of petroleum increases by 1 BTU the energy delivered to the economy declines by almost 5."
~The Hills Group
2) "It's largely based on Hubbert's work..."
Wrong. It is not based on Hubbert's work at all. The Etp model is derived from the Entropy Rate Balance Equation for Control Volumes.
3) "Related to #2, it seems to be just curve-fittings of old data..."
Wrong again. The Etp price curve is not a curve fit. It is derived directly from the Etp model, and, when checked against the price data since 1960, it has a correlation coefficient of 0.965. It is just so good, it looks like a curve fit to you.
"The ETP model is an equation derived from a Second Law statement; therefore it is a Second Law statement. The input to the the equation comes from the EIA 1960 to 2009 cumulative production report. The hypothesis that the cost of petroleum is driven by the energy needed to produce it is tested in graph #9. As the price of petroleum is historically the only data set available relating to petroleum that we can be certain is almost 100% accurate, and the ETP equation is a Second Law statement a correlation coefficient of 0.965 leaves little doubt that petroleum prices are controlled by its production energy requirements."
~The Hills Group
4) "It wrongly assumes that the price of oil is directly and strongly related to the energy required to extract it."
What? Of course the price of oil is directly and strongly related to the energy required to extract it. It takes energy to produce energy, and that energy costs money. An oil producer must somehow account for this energy cost to make a profit. Oil consumers must foot the bill. That is just common sense.
"The cost of producing petroleum can be determined from the energy required to produce it. This statement has several implications that are not generally recognized. It indicates that the quantity of petroleum that remains to be extracted is not just a property of the volume of the resource that remains in the ground, but that it is effected by the quantity that has already been removed. The total quantity of extractable petroleum is a specific value determined by the properties of the fluid, and the rate of entropy production in the system. This is equivalent to stating that the price will continue to increase until the product becomes unaffordable to the end consumer. The ETP equation gives a means to determine when that point will be reached.
To extract petroleum, and to produce its products requires energy. As the extraction process progresses the energy required per unit increases. This occurs because the petroleum industry is always first removing the highest value oil available. This can also be shown from the entropy production that must accompany any process for it to go forward. The fact that the energy to produce energy increases with time is a thermodynamic certainty. It is assured by the Second Law. As energy is a necessary component of the economy (nothing can be accomplished without it) acquiring it comes at an increasing cost, and that includes the energy industry."
~The Hills Group
5) "They don't control for inflation in most of their calculations/curve fits, which makes them basically just curve fits of inflation itself."
Adjusting for inflation is not the correct way to do it.
"The Etp model is a thermodynamic equation of state. Its output is in energy units. Any determination of $ units for an energy system is done after the energy calculations have been performed. Inflation, or deflation are thus regarded as effects, not causes. They occur as a result of the system's energy change of state. Defining them further would be redundant, if they exist, they would already be included."
~B.W. Hill
6) "They don't explain what the diverging graphs are supposed to mean. Which one is the price of oil supposed to follow?"
I think it is pretty well explained. Perhaps you should look again.
After 2012 the price of oil will follow the "Maximum Consumer Price" line.*
So, Russ, you were completely wrong about everything. You still are.
* (note---To be exact, I should have said that after 2012 the price of oil will not generally exceed the "Maximum Consumer Price" line, since it represents the thermodynamic price limit, but I figured you would understand my meaning. You pretended that you didn't. But, after much effort, we eventually cleared up your intentional misunderstanding.)
---Futilitist
Russ_Watters hates this.
I think it might be instructive at this point to review how all of this got started.
http://www.sciforums.com/threads/oi...modynamics-the-etp-model.145678/#post-3291958
Here are my answers to the 6 initial arguments you came up with in your failed attempt to try to refute the Etp model.
1) "For the most part, the use of energy does not add value to the economy, it removes value from the economy..."
You are completely wrong about this. The physics of energy underlies everything, including the economy. And all processes in the universe are subject to the first and second law of thermodynamics. Oil currently produces a net energy gain to the economy and to civilization. That is why we use it. After 2021 or so, oil will no longer have that ability.
"Petroleum’s primary contribution to the economy is that it is an essential element in the overall energy production process. Energy is as necessary to an economy as capital and labor, and petroleum has an exclusive position in that hierarchy; it is used to power the majority of the world's transportation equipment. The value of a hydrocarbon can be determined by the quantity of energy it is capable of supplying. The energy content (exergy) of a unit (barrel, gallon, etc) of a liquid hydrocarbon can be determined from its API gravity (see Study Graph# 20, Exergy vs API). A barrel of 35.7° API crude has an energy content of 5.88 million BTU, but not all of that energy is available for use by the general economy. A substantial portion of that energy is needed to extract the crude, and produce its finished products.
The extraction phase of petroleum requires an input of work in the form of goods, and services. The energy that comes from the well head in the form of crude must be converted into the components needed in the extraction process. These include not only the actual drilling of the well, and drilling equipment, but a huge number of tools, services, and direct energy inputs. To provide these the energy that comes from the well head in the form of crude must be used in the production of these needed goods and services. This conversion of energy into goods and services takes place in the Petroleum Processing System. Other energy forms, such as electricity and natural gas used in the process are not adding energy, they are merely exchanging energy with the petroleum they are helping to extract and process. Because petroleum must act as an energy source to have value, it must be capable of supplying at least enough energy to support its own production. The total energy used in the extraction and processing of petroleum must be less than, or equal to the energy content of the petroleum. If it were greater the energy production from petroleum would stop.
Over the forty six year period that the process was evaluated, on average, it required 4.9 BTU taken from the extracted crude to provide 1 BTU of work in the form of goods and services, which then could to be put back into the well head. This is an efficiency of 20.05%, which is about equal to the efficiency seen in most internal combustion engines. After petroleum is extracted about 4 out of every 10 BTU of its total energy content is used in the processing, and distribution of its finished products. The production of petroleum, and its products is a very energy intensive industry.
When petroleum can no longer provide energy to the general economy it will have little, or no value. Its only possible use would then be as an energy carrier; this assumes that some other energy source could replace petroleum's immense energy supply. As the energy to extract a unit of petroleum increases by 1 BTU the energy delivered to the economy declines by almost 5."
~The Hills Group
2) "It's largely based on Hubbert's work..."
Wrong. It is not based on Hubbert's work at all. The Etp model is derived from the Entropy Rate Balance Equation for Control Volumes.
3) "Related to #2, it seems to be just curve-fittings of old data..."
Wrong again. The Etp price curve is not a curve fit. It is derived directly from the Etp model, and, when checked against the price data since 1960, it has a correlation coefficient of 0.965. It is just so good, it looks like a curve fit to you.
"The ETP model is an equation derived from a Second Law statement; therefore it is a Second Law statement. The input to the the equation comes from the EIA 1960 to 2009 cumulative production report. The hypothesis that the cost of petroleum is driven by the energy needed to produce it is tested in graph #9. As the price of petroleum is historically the only data set available relating to petroleum that we can be certain is almost 100% accurate, and the ETP equation is a Second Law statement a correlation coefficient of 0.965 leaves little doubt that petroleum prices are controlled by its production energy requirements."
~The Hills Group
4) "It wrongly assumes that the price of oil is directly and strongly related to the energy required to extract it."
What?
Of course the price of oil is directly and strongly related to the energy required to extract it. It takes energy to produce energy, and that energy costs money. An oil producer must somehow account for this energy cost to make a profit. Oil consumers must foot the bill. That is just common sense."The cost of producing petroleum can be determined from the energy required to produce it. This statement has several implications that are not generally recognized. It indicates that the quantity of petroleum that remains to be extracted is not just a property of the volume of the resource that remains in the ground, but that it is effected by the quantity that has already been removed. The total quantity of extractable petroleum is a specific value determined by the properties of the fluid, and the rate of entropy production in the system. This is equivalent to stating that the price will continue to increase until the product becomes unaffordable to the end consumer. The ETP equation gives a means to determine when that point will be reached.
To extract petroleum, and to produce its products requires energy. As the extraction process progresses the energy required per unit increases. This occurs because the petroleum industry is always first removing the highest value oil available. This can also be shown from the entropy production that must accompany any process for it to go forward. The fact that the energy to produce energy increases with time is a thermodynamic certainty. It is assured by the Second Law. As energy is a necessary component of the economy (nothing can be accomplished without it) acquiring it comes at an increasing cost, and that includes the energy industry."
~The Hills Group
5) "They don't control for inflation in most of their calculations/curve fits, which makes them basically just curve fits of inflation itself."
Adjusting for inflation is not the correct way to do it.
"The Etp model is a thermodynamic equation of state. Its output is in energy units. Any determination of $ units for an energy system is done after the energy calculations have been performed. Inflation, or deflation are thus regarded as effects, not causes. They occur as a result of the system's energy change of state. Defining them further would be redundant, if they exist, they would already be included."
~B.W. Hill
6) "They don't explain what the diverging graphs are supposed to mean. Which one is the price of oil supposed to follow?"
I think it is pretty well explained. Perhaps you should look again.
After 2012 the price of oil will follow the "Maximum Consumer Price" line.*
So, Russ, you were completely wrong about everything.
You still are.* (note---To be exact, I should have said that after 2012 the price of oil will not generally exceed the "Maximum Consumer Price" line, since it represents the thermodynamic price limit, but I figured you would understand my meaning. You pretended that you didn't. But, after much effort, we eventually cleared up your intentional misunderstanding.)
---Futilitist
Russ_Watters hates this.
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That's pretty cool, I didn't know they were already eating their own cookies either. It's a bit cumbersome to handle, but otherwise should be a viable alternative.
Accidents are accidents. No pollution during normal operation, at least.
Write4U
Valued Senior Member
But is that not artificially maintained? Besides, what do we really know about the cost of production of oil? Perhaps their profit margin was so high that a drop in profits (by keeping prices low), stil provides an overall profit.What rising oil prices?
The rise must come evntually and that's when the fun starts. Inflation is bound to happen at some point.
I am not so worried about tomorrow, but what will happen after "tomorrow".
You are dreaming. Oil prices are not going to rise. The Etp model proves they are going to fall. But, since you can't figure out how to deal with the truth, you just ignore reality. Not very scientific or mature.
Also, please post a graph of your oil price forecast. Thanks. It seems like you would want to have something like that on record, since you think I am so wrong. Put your money where your mouth is. I've asked 3 times. Are you afraid to embarrass yourself? That never stopped you before.---Futilitist
I cannot believe that any sane person would use principle of "strength through exhaustion" , as
we did with whale hunting.
But now where is the whale oil? Ooops, there are no whales left to kill.
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Publicly traded companies are required by law to publish their financial records quarterly for all to see. So we do indeed know quite a bit about the cost of production and profits of the oil companies. And most are indeed still profitable even at current oil prices. For example:
http://www.cnbc.com/2015/07/31/exxon-mobil-earnings-q2.html
So despite oil prices falling by half, Exxon Mobil is still quite profitable.
Yes, and that's part of the miscalculation in this "ETP model". Futilitist probably thinks he's being clever with a prediction that will take a few years to fail rather than some of his previous predictions which were failing as he was typing them (hey, at least he's learning something). But because the graph is not inflation adjusted, inflation will just hasten its demise. Over a couple of years it won't be huge, but oil prices will inevitably move in the wrong direction over the long term, due to inflation alone. Fracking has reset the previous exponential curve to a new starting point, but it will continue upwards again.
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Write4U
Valued Senior Member
That goes to show how vulgar oil profits were in the past. Highway robbery, literally.
If those excess profits had been used for research and development of alternate energy sources, that would have been ok, but instead all those financial resources are now mainly used for cracking open the earth itself (fracking) in a desperate search for more of the same.
The rest is used mainly create more wealth (money growing money), instead of product.
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You can blame the oil companies if you wish, but you are incorrect. Alternatives could never have made up the gap because it has always been thermodynamically impossible. The concept was always based on false hope. But that mostly unacknowledged truth is not exactly a comfortable one. You are comfortable with the convenient argument framed to blame the oil companies.
Since most people can't seem to handle the answers given by the Etp model, going back to your comfort zone makes some sense.
Exxon Mobile has only remained profitable by cutting exploration and buying back stock. The oil industry is shrinking, just as the Etp model predicts.
In order to have inflation, you need economic growth. The net energy decline forecast by the Etp model means the end of world economic growth (very soon, not years from now).
In your distorted view, how long will oil prices remain too low to pay the full cost of production?
---Futilitist
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Write4U
Valued Senior Member
Well, not just the oil companies, but all people who led us into this mess. Tghe automobile was created to replace horses, which dirtied the streets with their feces. In its place we got little puffs of smoke, so much more pleasant to the senses.
No one had the foresight to ask what the result of trillions of tonnes of these little puffs of smoke would be. Well here we are.
I certainly agree with you prediction of depletion and exhaustion of natural resources. I can even see a certain connection with ETP, but my question remains if ETP is in any way causal to, or a result of, energy use fluctuations and its resulting price adjustments.Since most people can't seem to handle the answers given by the Etp model, going back to your comfort zone makes some sense. --Futilitist
exchemist
Valued Senior Member
I very much share your frustration about the N American oil industry, but would point out that those oil companies that are not US-based have accepted climate change science for over 20 years. The one I used to work for is basing its future strategy on the world shifting from oil to gas to reduce carbon emissions and is investing millions in CCS.
So I submit it's a more nuanced picture than simply one of "Big Oil lies about climate science".
exchemist
Valued Senior Member
Yes LNG tankers run on "boil-off gas" from the cargo when laden and on bunker fuel on the empty return leg. That's why they are steam turbine ships - almost the only ones there are, apart from nuclear submarines. As I said before, low speed diesels are not very happy on gas, so a dual-fuel steam-raising boiler and a turbine is the preferred method of propulsion of these ships. Though maybe nowadays some are dual-fuel medium speed diesels: those are now pretty well established and reliable.
That's basically a criticism of capitalism: oil companies have no such obligations. Remember, they are just selling a resource they pump out of the ground. It happens that they sell a lot of it and demand makes it profitable. But in terms of profit margin, many natural resources have or have had very high profit margins, by nature. Gold? Diamonds? Hydroelectric power? The Hoover dam is nearing 100 years old and is a pure profit machine! Do you find that obscene?
Neither of those predictions is matching reality: oil production is continuing to rise and the world economy is humming along just fine, China notwithstanding. Your magical, invisible, causeless collapse remains invisible.
In case you haven't noticed, I'm no longer responding to stupid/trolling questions.
I was wrong about one thing though: I thought you had smartened-up about making wrong-as-you-type-them "predictions". Apparently not. If you are to be successful in keeping-up this fantasy, you're going to need to figure out a way for an inverted collapse to be a "thing".
Hey Russ.
I said:
"Exxon Mobile has only remained profitable by cutting exploration and buying back stock. The oil industry is shrinking, just as the Etp model predicts.
In order to have inflation, you need economic growth. The net energy decline forecast by the Etp model means the end of world economic growth (very soon, not years from now)."
I said the oil industry is shrinking because of loss of revenue. It is. Your answer is that I am wrong because production is continuing to rise. But that is a non-sequitur. The industry could be downsizing and production could still increase for a while. That is exactly what is happening.
The world economy is certainly not humming along just fine. We may still have some anemic economic growth, but that is at least partially due to desperate central bank policies that would have been unimaginable just a few years ago. It is not unreasonable to question whether economic growth can be maintained while net energy declines. In fact, it is a very logical position based on the laws of physics. Your position, that GDP does not depend on energy, is not logical or reasonable.
So, both of my predictions above do, in fact, match reality.
The predictions above are not dependent on being caused by a collapse. It is the other way around. Collapse will be the result of the those predictions. You characterize the coming collapse as "magical, invisible, and causeless", but the two predictions above are the cause! That is hardly "magical", just logical. The collapse will happen as a direct result of declining economy due to net energy loss. It may not be visible to you yet. The final, total collapse is obviously still in the future. Just not very far into the future.
The English language has an expression to describe a seemingly functioning system that is, nonetheless, doomed in the near future:
The writing is on the wall.
---Futilitist
I said:
"Exxon Mobile has only remained profitable by cutting exploration and buying back stock. The oil industry is shrinking, just as the Etp model predicts.
In order to have inflation, you need economic growth. The net energy decline forecast by the Etp model means the end of world economic growth (very soon, not years from now)."
You are playing word games.
I said the oil industry is shrinking because of loss of revenue. It is. Your answer is that I am wrong because production is continuing to rise. But that is a non-sequitur. The industry could be downsizing and production could still increase for a while. That is exactly what is happening.
The world economy is certainly not humming along just fine. We may still have some anemic economic growth, but that is at least partially due to desperate central bank policies that would have been unimaginable just a few years ago. It is not unreasonable to question whether economic growth can be maintained while net energy declines. In fact, it is a very logical position based on the laws of physics. Your position, that GDP does not depend on energy, is not logical or reasonable.
So, both of my predictions above do, in fact, match reality.
The predictions above are not dependent on being caused by a collapse. It is the other way around. Collapse will be the result of the those predictions. You characterize the coming collapse as "magical, invisible, and causeless", but the two predictions above are the cause! That is hardly "magical", just logical. The collapse will happen as a direct result of declining economy due to net energy loss. It may not be visible to you yet. The final, total collapse is obviously still in the future. Just not very far into the future.
The English language has an expression to describe a seemingly functioning system that is, nonetheless, doomed in the near future:
The writing is on the wall.
---Futilitist
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Correct and when the price of oil increases the oil industry will expand. Pretty simple really.
True.
I am convinced that the central bank policies mitigated the size and duration of the recession.
Energy consumption decreases when the economic output decreases. As the economic output increases the consumption of energy increases.
When the price increases and oil industry grows your prediction will be wrong. When the economic growth increases that prediction will be wrong also.
You keep predicting total collapse, death and horror but it never happens. I hope you do not find that too disappointing.
And the writing says both your predictions and the Etp model are bogus.
Correct. Human civilization is self organizing. No one is really "in charge", and, thus, no one is to blame.
The price of petroleum is controlled by two factors:
1) The cost of production.
2) The $ amount that the end consumer (the NEGs) can afford to pay for it.
What the end consumer pays must be sufficient to cover the cost of production. All production cost must be borne by the end consumer, who includes the end buyer, and the societal cost required to produce petroleum, and its products.
The energy content of a unit of petroleum is fixed by its molecular structure. The energy to produce a unit of petroleum, and its products increases with time as a result of the entropy production of the PPS (Petroleum Production System). The energy remaining for use by the general economy declines, and the economic activity that the petroleum can power also declines.
~BWHill
Using only the production history of oil and the second law of thermodynamics, the Etp model has accurately forecast the price of oil with an accuracy of 96.5%. So, if we accept that the oil production history is at least reasonably accurate, and we accept that the laws of thermodynamics are real and accurate, then the Etp model must be doing what it seems to be doing. The Etp model is accurately forecasting the price of oil.
---Futilitist
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You are working very hard to see things exactly backwards.
The main question seems to be whether:
1) GDP results in energy use.
or
2) Energy use results in GDP.
I think the answer is obvious. You can't do anything without energy. So, energy use results in GDP.
The economy runs on energy. If the available net energy decreases, the economy will shrink. How could it be otherwise?
---Futilitist
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LOL!
I predict doom of the human race and all life on the planet.
My graph
I am correct. Sad part for me is I wont be around to gloat "I told you so". Didn't require much effort on my part to model doomsday either.
Commodity prices strongly impact revenues: there can be/have been/are wild swings in price over the short to mid-term that cause large changes in revenue. But through all of that, production follows a pretty smooth curve. No sane person would measure "oil industry is shrinking" against revenue instead of production in the context that we need here. I'd accuse you of playing word games, but I don't think your grasp of the economics is good enough for that to be true - you simply haven't a clue what you are talking about.
I'm well aware that you inverted your logic when you picked-up the ETP Model, but that doesn't make the predictions any less wrong than the ones you discarded. Whether the collapse(which you said was in progress in 2013) causes oil prices to fall or oil prices and production fall due to causeless magic, which leads to economic collapse (which you are claiming now), none of what you are saying is happening (as pertains to your model) is acutally happening. It's all a figment of your imagination/faith.
You know, right now in another part of the forum, there is a batshitcrazy loony toon flooding a thread with at least 3 totally unrelated conspiracy theories at the same time. But your level of commitment to your delusional ignorance exceeds even his: at least his conspiracy theories have *something* behind them: even if they are disgraced experts, at least there are actually people with credentials speaking out about them. You, on the other hand, are dreaming this up from scratch. It's an impressively elaborate halucination. But hey - at least you're good at something, right?
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