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ASPO VI

A SUPPLY AND DEMAND

FRAMEWORK FOR A FULL

PLANET

By Nathan John Hagens

The University of Vermont

Gund Institute

nate@theoildrum.com

A BRIEF DISCUSSION OF

SUPPLY

PART I - SUPPLY

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The History of Life on Earth and Human Evolution

Graph credit – Dr. William Stanton

The History of Life on Earth and Human Evolution

Graph credit – Dr. William Stanton

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Graph credit- Cutler Cleveland Boston University

ENERGY COMPOSITION OF THE LAST 200 YEARS

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Different infrastructure requires different power densities

Different energy sources have different amounts of energy

per unit volume and per unit mass

?

Graphic credit –Cutler Cleveland – Boston University

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XASPO VI

A SUPPLY AND

DEMAND FRAMEWORK

FOR A FULL PLANET

By Nathan John Hagens

The University of

Vermont Gund Institute

www.theoildrum.com

Growth requires Net Energy

A B C D

Gross

Resource X=A+B+C+D

D=Direct Costs

C=Indirect Costs

B=Environmental Costs

A=NET ENERGY

Source: “EROI – Towards a Consistent Framework” Mulder, K, Hagens, N AMBIO 2007

NET

ENERGY

PEAKS

AND

DECLINES

Source – Energy and Resource Quality p186 –

Hall, Kaufman and Cleveland

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OIL AND GAS LIQUIDS

ASPO Scenario

Net Energy from Oil and Gas Liquids

From: “Burning Water – Energy Returned on Water Invested”, Mulder, Hagens, Fisher 2007

WATER AS AN ENERGY CONSTRAINT

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Data from Marano, Ciferno 2004

Externalities must be accounted for…

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A FRAMEWORK FOR A FRAMEWORK FOR A FRAMEWORK FOR A FRAMEWORK FOR

SUPPLYSUPPLYSUPPLYSUPPLY

• ENERGY QUALITY – All BTUs are not equal in their impact on society

• ENERGY QUANTITY – It takes energy to procure and deliver energy – the NET is what matters to society

• NON-ENERGY INPUTS – As we move away from best-first, other inputs will begin to limit scale: Water, Land, Soil, GHGs, etc.

1. We value the present dramatically more than the

future via steep discount rates.

2. We easily become distracted by and habituated to

readily available novelty.

3. Via natural selection, we are programmed to

compete for resources by whatever metric our

current environment dictates.

PART II - DEMAND

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“We have only two modes—complacency and panic.”

—James R. Schlesinger, the first energy secretary,

in 1977, on the country's approach to energy

“America is addicted to oil”

—President George W. Bush January 2006

CORRECT, but why?

CORRECT, but why?

THE TIME HAS COME FOR

LATERAL THINKING

• Ecological Economics

• Evolutionary Psychology

• Cognitive Neurosciences

• Hunter Gatherer Studies

• Anthropology

• Darwinian Ecology

• Neuroeconomics

• Systems Ecology, Geology, Climate Science

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To know where we are going we have to know where

we came from, what drives us and who we are.

Graph credit – Dr. William Stanton

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BEHAVIOR IS BEST UNDERSTOOD THROUGH THE LENS OF EVOLUTION

FROM MACLEAN: THE TRIUNE BRAIN

HOMO SAPIENS

EVOLVED AMIDST

SCARCITY

Graphic Credit: Dr. Peter Whybrow – UCLA – Author of “American Mania”

DUMBO, CAUGHT WORRYING ABOUT WATERING

HOLE DEPLETION RATES, DID NOT LEAVE ANY

DESCENDANTS….

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A Thought Experiment

• Would you prefer a 15 minute massage right

now or a 20 minute massage in 2 hours?

• And, would you prefer a 15 minute massage

in a week or a 20 minute massage in a week

and 2 hours?

(Rational)

(Emotional)

(Laibson, 2005)

When using our emotional brain we STEEPLY value the present

The Limbic (emotional) system is myopic The Limbic (emotional) system is myopic –– it cannot see the futureit cannot see the future

The The NeocortexNeocortex (rational) system treats the future the same as the present(rational) system treats the future the same as the present

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Pathological Behavior – Dynamic

Inconsistency

• Patient activities that many of us plan (and

intend) on doing tomorrow

• Watch less TV

• Read more books

• Spend less on credit cards

• Exercise more

• Improve diet, floss, quit smoking,etc

• Save the environment…..

Within 24 hours tomorrow turns into today

STEEP DISCOUNT RATES AND

IMPULSIVITY

• Current smokers>non-smokers or ex-smokers

• Alcohol dependent subjects> controls

• Cocaine dependent subjects> controls

• Heroin addicts > age-matched controls

• Pathological gamblers > age matched controls

• Children > young adults > older adults

• “High risk” takers > “low risk” takers

• Low scorers on standard math tests > high scorers

• Stressed people > relaxed people

• Men > women (Daly/Wilson)

SOURCE: "Intertemporal Choice" Chablis et Al, The New Palgrave Dictionary of

Economics 2007

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An addicts discount rate (steep)

A typical human discount rate -moderate

A market discount rate –mathematical and precise

1 hour 1 day 1 week 1 month 3 years

The Present over the Future – measured in “Discount Rates”

COMPLACENCY

( )

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and PANIC

EVOLUTION – SOMETIMES WE ARE “TRICKED” BY OUR ENVIRONMENT

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HIJACKED!

EXPECTED VS UNEXPECTED REWARD

Dr Wolfram Schultz testing on chimpanzees – Cambridge University 2003

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?But USA only has 300 million

people!!

According to July 2007

Time Magazine,

2 million+ pathological

gamblers

4 Million+

addicted to food

15 million+

compulsive

shoppers

16 million+

addicted to sex

or pornography

Unknown millions (still

a debate on whether a

formal addiction)

19 million+

addicted to alcohol

(7.7%)

3.6 million

addicted to illegal

drugs

71.5 million

addicted to nicotine

80-90% of adults

routinely ingest

caffeine

The “Wanting ” feels better than the “Having”

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WAL-MART: GENEVA, NEW YORK; 6 AM, FRIDAY NOVEMBER 26th 2004

Lauren Long, Finger Lakes Times

IT BEGINS TO LOOK LIKE AN ADDICTION

1700 2006�A long time ago

The discovery of energy in fossil fuels has exponentially increased our ‘grab-bag’ of unexpected returns

Rave clubs, scuba diving, NASCAR, etc

Bread, butter and ale

A visit from a cousin

Riding a horse

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More Novelty

Less Novelty

Natural Selection of the “fittest”

Graph credit – Dr. William Stanton

Niall of the 9 Hostages

402 A.D.

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R1b Y

Niall of the Nine

Hostages

We are all of us in this

room descended from

the best of the best at

acquiring resources

and moving up the

mating ladder.

The ASPIRATION Gap

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2007 New 545 foot yacht being built

Easterlin – “Explaining Happiness” 2004

THE HEDONIC TREADMILLTHE HEDONIC TREADMILLTHE HEDONIC TREADMILLTHE HEDONIC TREADMILL

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Source: Juliet Schor, The Overspent American: Upscaling, Downshifting, and the New

Consumer

WHAT IF THE IRISH ELK COULD HAVE PLANNED AHEAD?

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We cannot change our drive to want more

We CAN change how we define ‘more’

Energy/Capita vs. % Very Happy – (worldvaluesurvey.org)

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SUMMARY• We are conditioned, via our ancestors and

through culture to steeply value the presentover the future

• Our behaviors, some innate and some learned, are intrinsically based on pursuit of those brain chemicals that historically met with success…

• Our evolutionary brain scaffolding gets hijacked by novelty items that are plentiful in the oil age

• The older the brain part, the more potential it has to dominate/override our behavior…

What ARE the resources we

should be competing for?

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Forget About Peak Oil and

Climate Change….

How do you design your own life for YOU?

WHY NOT BEGIN

HERE??