ENERGY INDUSTRY IN CRISIS: SRSrocco Report Interview

The U.S. and global oil industies are in crisis mode.  I sat down with Dan Ameduri at Future Money Trends to discuss the details of the energy crisis and how it will impact the precious metals.

I would recommend new and long-time followers of the SRSrocco Report site to listen to the interview as the information helps to CONNECT THE DOTS.  I know this is true, because it happens to me all the time.  I constantly listen to interviews and research data on information I have read or heard before, but there is always something new to learn.

Furthermore, it takes learning fundamental information first, then it becomes CRYSTAL CLEAR later how it all connects together.  That is why I try to do at the SRSrocco Report.

TOPICS IN THIS INTERVIEW:

07:30 Is it a good thing to see a stronger dollar and stock market???

12:00 Energy Return investment 45 years ago vs. now

16:40 Steve’s Predictions for Energy 2020 to 2025

21:00 Steve’s expert advice on Silver Market Today

26:20 Investing with extreme volatility in Stocks

You can also view the original youtube video at Future Money Trends here: Energy Industry In Crisis: Steve St. Angelo Interview / SRSrocco Report

Please look out for two new articles to come out next week.  One will be on the GOLD-DOLLAR PEG and how U.S. oil imports forced President Nixon to drop the Dollar convertibility into gold in August 1971.  The other article will be on, HAS A PEAK IN SOLAR POWER taking place in the United States?

If you haven’t read this article, I highly recommend it:

FORENSIC EVIDENCE:  Why Manipulation Of The Silver Market Will End

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62 Comments on "ENERGY INDUSTRY IN CRISIS: SRSrocco Report Interview"

  1. Another great interview.

    However, like many of your followers, I can’t get over the hump of the laws of thermodynamics trumping supply and demand pricing of energy. So I am looking forward to an interview with Bedford Hill and a discussion of the value of a barrel of oil versus the price of a barrel of oil.

    Happy New Year to you and your family.

    SteveW

    • I think it makes sense to me after spending much one on it. What I think Steve is saying is that supply and demand only works off of the base price of cost of production. For example, supply and demand will cause the price (which on a chart is centered around the price of production) to go up and down but only a little bit. It won’t cause the price to go below the actual price of production. And even then, remember, in order for supply and demand to work, there has to be enough supply, yes, but also enough demand for the product. And the free market only has demand for a product if it is of value, otherwise there is not much value in the product. Well, if that product loses its utility value, then it becomes worthless because it’s no longer of use. This, the market no longer wants it. It’s not longer willing to pay for a product which is of no utility value or cannot be recycled.
      If food goes bad, no one will pay for it. It no longer has any value, for the most part. Or if a car has no engine or transmission and is old, it only has a very small value for recycling but no utility value other than that, thus no one will buy the car. If a cow is dying and only has a few months of milk production left, farmers won’t pay 98% what a healthy cow is worth for the sick cow. If a product is worn out and has no more usable energy in it, it’s utility value is diminished greatly. Same with oil. Would people pay for gas at the gas station if it didn’t power their cars? Nope. The utility value of the gas would have diminished and no one would pay for gas.

      • How can a gallon of gasolene have no utility value it’ll take my car 35 miles?

        • How valuable is a car if you can’t buy tires, spark plugs, air filters, and you don’t have a job to get too? How much gas would you need?

          • maybe we should all buy new electric cars and slap a solar array on the house while we can still get them. What happens to our electric grid? How much will scarce diesel cost for the coal trains, what will our kws cost? Yeah, we’re toast.

        • I did not say gas has no value. I am simply using that as an example in relation to the utility value of a product offered to the free market. You completely missed my point. The point is, fossil fuels is derived from oil. In it’s simplest form, fossil fuels then offers units of energy to power the vehicle. The amount of BTU’s per barrel of oil is diminishing. Most people do not understand this. Much of the energy in a barrel of oil is waste heat, not usable energy. And a large percentage of the energy is lost in transporting it’s end product to the user. So there is a diminishing amount of units of energy per barrel of oil after it’s refined and made into fossil fuel. That amount of usable energy will then exceed global energy consumption requirements. There is a point when GDP growth stops because of this (not counting the papering over done by the government, which only masks the problem for a time). Eventually, that gas won’t get into your car because it won’t be delivered to the gas station because oil won’t offer any usable energy to the end users.

          The value of any product which has genuine demand in the free market has utility or extrinsic value. The utility value is what gives value to that product. Gas only has value because it provides the utility value of energy. If it didn’t, it would have no value, thus supply and demand wouldn’t matter (since in order for supply and demand to work, there has to be demand which means there has to be utility value In demand).

  2. Turn around the pyramid and the eye drops off.

    http://www.kitco.com/ind/Claire/images/2014-07-21/clip_image006.jpg

    Looking forward to oil/dollar/gold. Can’t get this picture in my head. Yet. It’s the fundamental piece that’s missing. I know it is. But i like the detail teasing. You cannot buy finite stuff with infinite currency to infinity.

  3. so is there agreement that at some point, the lower viability of the ores, and the price or scarcity of oil will mean there will be no more metal taken out of the ground?

    • Imagine what the value would be if one had to dig it up by hand.

      • Exactly, any easily retrievable mine sites are not in production, thinking Chocolate Mt. here; the ores working now are not feasible without heavy machinery, and without oil they would need one heck of a solar array and suitable equipment. Does anyone even make electric heavy machinery?

        • Exactly, without cheap oil surplus, growth that’s needed to maintain the financial system is compensated through exponential growing debt. Oh, btw, to produce electric heavy machinery, you need oil. A more local, physical world is approaching. If we can keep up the electric grid, we have a chance to survive. When the grid goes down, all bets are off. .gov is in the know, watch what they do, not what they say.

  4. Thomas Malthus | January 6, 2017 at 5:59 pm |

    To summarize:

    – the oil industry is going to collapse permanently because the cheap to extract oil has been found and burned up – what remains is not economically viable

    – the stock and bond markets are going to implode wiping out the global economy (and civilization)

    – buy gold and you will be fine

  5. I heard on the same day it was released, was very informative thanks Steve Cheers

  6. we can’t eat gold, and it will be a Mad Max world?

    • You can’t eat a buck either… now wait… yes you can… that other kind of buck, the one with flesh and bones… 😉

  7. Tom Cloud’s report stated 1.6 billion Muslims under Sharia law would be permitted to buy gold/silver
    at the end of 2016? What happened. If one Muslim in every thousand Muslims bought 1 lousy ounce
    demand would be 1,600,000 ounces. He also stated gold was stopped being imported to India
    and its 1.5 billion people who would turn to silver. Am I to surmise that no Muslims or people of India
    are interested?

  8. Thomas Malthus | January 6, 2017 at 8:53 pm |

    And the Fed would simply release 10x that amount in new paper gold and again crash the price

  9. Thomas Malthus | January 6, 2017 at 9:19 pm |

    You cannot eat it — but you can worship it.

    And that gives people hope…. it’s false hope of course

    But if people like Steve lost the faith they’d soon lose their minds and sink into deep depression.

    There is no reasoning with such people – just as there is no reasoning with someone who believes in renewable energy — or God

    When hope is involved facts and logic do not apply

    • Thomas Malthus,

      I see you have been busy giving out YOUR FREE ADVICE here. Keep up the good work. Maybe you might want to consider starting your own blog if you have that much time and energy.

      Again, keep up the excellent work as it motivates others to reply and comment. Basically, your unbridled large number of comments actually helps traffic and lively interaction on my site.

      Thanks for all your hard work.

      steve

  10. Steve,

    Your conclusion on future oil price is wrong because you overlook one detail that has already became a fact. Subsidised oil production is de facto a process of transformation of oil role in the economy from a source of energy into a source of hydrocarbon material. At this time, despite Musk’s dreams, liquid fuel has no alternative or replacement in the economy, and it must be produced, which it is. At high EROI oil paid in energy terms for its own conversion into fuels, and making of an affluent economy. At low EROI, now, it can still pay for its own conversion into fuels, but not for the affluent economy any more. At the point of EROI 1, if the economy miraculously survies that long, oil will complete its transformation into a source of hydrocarbon material with net energy loss, as you know food has done long ago. The only question remains: what can replace oil with EROI about 30, which economies can actually do that, how long will it take, and how many billions will die elsewhere. But there is life at sub-1 EROI, it simply is another epic technological transition, such as from firewood to coal, from coal to oil, and the missed oil to nuclear. Some countries can afford that already — Australia has plenty of cheap coal and gas, but not oil, and has to convert transport to the fuels it has; Russia has everything including advanced nuclear — no worries there; Norway and Uruguay have enough hydro for a comfortable future, and so on. Some have little or nothing, some have an illusion that solar can support their affluence — well, time will tell how all that turns out, but there is no total inescapable doom due to diminishing EROI of oil. It is survivable, and for some it is enabling.

    • When was oil produced from drilling, at a net energy loss?

      • He’s saying in the future you can produce enough oil to keep the trucks running if you run a lot of nukes to power the extraction and refining.

        Theoretically this may be true but nobody ever presents a public analysis of modern nuclear power and uranium availability. I don’t know of anyone with a public face who knows a lot about it.

        • The problem of uranium availability ends with construction of fast reactors that can burn uranium-238. Russia is doing that already, with two such reactors operational, the last commissioned in 2016. The public faces you refer to are in Russia, lead scientists who work on that project, but not much avilable in English outside conferences. Fast reactors were made a national priority in Russia a few years ago, and they inherited an operational one from the USSR — BN-600. Now they built a new one, BN-800. The industrial one is already designed, BN-1200 (the numbers show electric power in megawatts), but suspended at the last moment in order to get data on a radically new desing — lead-cooled fast reactor. It is unow being built, called BREST-300. If that one works well, they want to design a large one for 1200 megawatts, then make a choice between the concervative sodium-cooled and the advanced lead-cooled ones. Also adding such reactors to the mix at a ratio of 1:3 with the current slow water-cooled designs completely solves the problem of nuclear waste: the ‘waste’ uranium-238 from three slow reactors is burnt by the fast one, preferably on the same site. In the end, one gets about 100 times of electric energy for the same amount of waste, which is less toxic and shorter-lived than now. The goal is to put back into ground the same amount of waste radiactivity as was taken out of it in form of uranium. Fascinating stuff.

          • You said “The problem of uranium availability ends with the construction of fast reactors that can burn uranium-238.”

            How does that solve the uranium availability issue? Those plants are using uranium-238, which IS an isotope of uranium. In fact, it is the most common isotope.

            Naturally occurring uranium is composed of three major isotopes, uranium-238 (99.2739–99.2752% natural abundance), uranium-235 (0.7198–0.7202%), and uranium-234 (0.0050–0.0059%).[6]

            This doesn’t solve the problem, it speeds the problem up since it uses up uranium. Uranium -238 is the most common uranium isotope found in nature, which means it speeds the problem up even more, since this means that an infrastructure system using mainly Uranium would eat up it’s most efficient and available isotope.

            Uranium is a very limited natural resource. ALL power plants to date that I am aware of use both those main Uranium isotopes available.

            Now, from the rough calculations I have done, just to sustain America’s current population, we would need around roughly 2600 1-GW plants. The US currently has around 100 commercial nuclear plants in operations.

            To fuel a conventional 1 GW nuclear power plant, approximately 163 metric tonnes of uranium is needed each year according to the World Nuclear Association (WNA).

            A new nuclear power plant is licensed for 60 years, meaning each power plant will need a 60 year supply of uranium to operate.

            This means that each new plant will require 10,00 metric tonnes of uranium to operate for 60 years.

            As of 2009 (the last year reported), the identified reasonably assured and inferred US uranium resources totaled 472,11 metric tonnes.

            This sounds like a lot, but it really isn’t at all. Not to even sustain the whole infrastructure (which it couldn’t without transport energy anyway, which I will get to later).

            This amount of vailable uranium in the US will only supply a total of 48 1 GW Nuclear Power Plants for their 60 year lives.

            To sustain America’s projected population by the year 2100 (500 million), we would need over 4000 1GW nuclear power plants! That’s way more uranium than we have and that is only to last next century!

            The US simply DOES NOT HAVE the required amount of uranium to create enough power plants to replace fossil fuels!

            According to same NWA source, the identified reasonably assured and inferred uranium resources for the world total about 6,306,000 metric tonnes.

            This is only sufficient to power and supply 645 1 GW nuclear power plants for their 60 year life!

            That is NOT enough to supply the world with nuclear energy, nor is it enough to supply America with nuclear energy for long enough.

            This means that THE ENTIRE WORLDS uranium resources isn’t even enough to supply America with enough nuclear power plants!

            As of 2016, the world has a total of 508 1 GW nuclear power plants operating or under construction, thus the ability to significantly expand the number of nuclear power plants is greatly limited by the availability of fuel (uranium resources).

            Lastly, even if there was enough uranium, nuclear power can only replace the electric grid at best. We would still need transport fuel derived from fossil fuel to mine and transport the uranium and other minerals/materal and metals needed to produce nuclear energy and build the plants and handle it’s waste safely. it still requires very much fossil fuel to do this, so it would still be imppossible without fossil fuel.

            Nevertheless, the calculations clearly show that there is not enough uranium to replace fossil fuel for the next few decades alone.

            Nuclear fuel breeding won’t work either. I’ve looked into this as well. Not realistic at all.

    • Well, what is the EROI on nuclear? With a fantastically high EROI for nuclear what you say seems true, but I have never seen a comprehensive accounting for the number.

      You need a full accounting for the externalities of the inevitable accidents and insurance costs. Fukushima alone may have wiped out net energy for the industry for quite some time. You need to account for the full cost of decommissioning the plants at end-of-life and dealing with all waste.

      It seems something of a red flag that there is no such thing as a private insurance policy for a nuclear operator. Not a single nuclear plant would be operating without government indemnity.

      • Depends on whose nuclear. If oil refining process is very roughly the same across the world, nuclear is not even close to be roughly the same. In the US, the EROI is rather low due to lack of efficient enrichment. Efficient enrichment is done with centrifuges, and the current most advanced ones are ‘generation nine’, in Russia. In Europe, China and other places the centrifuges are about generation 5, which is still very good compared to diffusion enrichment that was used in USA.

        Then there are plant designs. To compare apples to apples, the current most numerous fleet of Russian commercial reactors is comprised of VVER-1000 designs. They are very safe, but after Fukushima everyone went into a freak mode, and the upgraded version is VVER-1200 — about twice the price of VVER-1000, as it can unattended contain core meltdown and pretty much anything imaginable. Still, the price does not exceed US5B per unit, and even that depends on where is it is put. Belarus is building a two-unit station with VVER-1200, and the price is seven billion US. Decommissioning is now a part of a ‘hundred-year contract’ that is the current export offer from Russia. The matters of waste are also included, as the principle of such contract can be ‘build, own, operate’ — including return of used fuel to Russia. Essentially, the host country provides land and pays for power, everything else is done by the vendor. Makes economic seense, if the vendor gets free uranium and plutonium extracted from the returned fuel, and the host country does not have a waste problem to deal with at all. I don’t know how insurance is handled, but I think for UAE any damages were vendor’s liability — Koreans are builting their plant.

        In the end, in US nuclear EROI is about 15 — the number I saw, though I cannot tell if it is anywhere close to real. For a properly structured nuclear industry, with centrifuges and fuel reprocessing, the EROI is 50 or more, which makes sense based on the current wholesale price of electric power in Russia, about 1.6 US cents per kilowatt-hour.

      • See my calculation I provided above, Bob. There simply is not enough uranium to produce even the most advanced nuclear power plants in the number the world let alone a large country such as the US or RUSSIA needs for the next few decades alone.

        Even if nuclear energy power plants provided sufficient EROI (which they do when other factors at not factored in), even when transportation and maintenance and building and waste/recycle costs are factored in (which greatly reduce EROI), and even if there was enough transport fuel for mining and transporting the raw material/ore and metals/minerals nodded (which there isn’t), then there would still not be enough raw uranium to sustain one large country for more than a few decades, let alone the entire world. This is the problem. Nuclear may offer sufficient EROI in of itself, but like fossil fuel, it has very limited usable energy resources from which it is derived. Thus, EROI does not at all matter if there is not enough raw material to provide enough high EROI kind of energy.

        • > How does that solve the uranium availability issue? Those plants are using uranium-238, which IS an isotope of uranium. In fact, it is the most common isotope.

          It will be better if you read the basics of nuclear fuel cycle before engaging into an argument about it. I will try to make it short and simple, but I excuse myself if I fail at explaining nuclear physics in one blog comment.

          Modern nuclear power plants, with two named exceptions, do not burn U-238. They burn only U-235, which reacts with neutrons in slow spectrum. U-238 that comprises about 97% of all uranium in their fuel does not undergo fission. The only reaction with U-238 is neutron capture, which ultimately produces plutonium and heavier actinides, but only a small fraction of U-238 undergoes that reaction chain. Most of U-238 in the fuel goes from mine to waste without any nuclear reactions. In short, that is the cheapest way to use uranium for power — it is called an open fuel cycle, an obvious misnomer, and a waste of uranium. But that is not all the waste. The U-235 fraction of natural isotope mix undergoes enrichment from 0.7% to 2~3% for commercial power reactors, and the enrichment process also sends U-235 to waste: the US diffusion process cut-off is 0.4% U-235 content, the best centrifuges cut-off is 0.1% — that makes huge difference in economics. But still, 0.1~0.4% of U-235 out of 0.7% goes to waste and never gets into a reactor. Then there is the fuel campaign, which is again optimised for economics, and does not burn all the U-235 in the fuel, and sends U-238 and remaining U-235, plutonium and actinides to waste. In the total result, only several tenth of a percent of uranium is burnt. The fast neutron spectrum reactors with a closed cycle Russians are completing now burns almost all the uranium, with small exception of several heavy actinides that have better uses or are not worth burning.

          Electric power can replace any other power source. Synthetic liquid fuels were, are and can be produced from coal and water, even without regard to EROI of coal. That turns liquid fuel into an energy carrier, not an energy source as it has been since oil discovery.

          • You should first probably take the time to learn to read properly before claiming I don’t know this or that and putting words in my mouth. When I said “those plants”, I was referring to the ones you brought up which use U-238.

            First of all, if you did any research, you will see that my calculations were done on plants that use U-235. So yes, of course I know that America uses U-235, which is why I U-235 in my calculations. That should have been obvious to you.

            Secondly, I never brought up U-238 until you did. And I never said that U-238 by itself can be used. Of course not. That’s basic stuff.

            You claimed that U-238 “solves the problem of limited uranium availability” by saying that Nuclear plants can use U-238.

            …which it does not, in theory. It may make it more economic and prolonged, but it doesn’t solve the limited uranium scenario we have.

            In theory it claims to, but in reality, insofar as thermodynamics go, I see that it does not. There is always going to be waste heat or waste material because nothing is ever done with 100% efficiency. The theory you speak of must have been pulled off of some pro-nuclear propaganda website because when it comes to nuclear energy, nothing is ever 100% efficient 100% of the time. I would like to seer firsthand evidence that the Russians have been thus efficient in their new reactors and not the claims they’ve made because I don’t buy it at this point.

            The idea behind the U-Pu breeder reactor is to use the plutonium from a number of LWRs to load a special kind of reactor with a core with plutonium as fissile material surrounded by uranium-238 as fertile material. In this reactor, cooled by a liquid metal and operating with fast neutrons, it would be possible to generate more fissile plutonium from uranium-238 in the blanket than is fissioned in the core during operation of the reactor. For that reason this kind of reactor is called a fast U-Pu breeder reactor, which does not mean that the breeding process goes fast.
            The spent fuel from the breeder reactor would have to be reprocessed to separate the fission products, which interfere with the fission process. From the remaining uranium and newly formed plutonium fresh nuclear fuel would be produced and placed into the reactor. By repeating this cycle again and again it would be possible to fission about 60% of the atoms in natural uranium, some sources even claim 100%. This theoretical concept is the source of the dreams and promises of the nuclear industry of ‘unlimited energy, too cheap to meter’.

            In practice the breeder concept involves a cycle of three processes: breeding in the reactor, reprocessing of spent fuel and fuel fabrication. Each of the three components of the breeder cycle must operate flawlessly, continuously and exactly tuned to the other two components, in order to let the system actually breed more fissile material from non-fissile uranium than it consumes. If one component fails, the whole system fails. In fact, none of the three components have ever demonstrated operation as required, let alone the three components together as one integrated continuously operating system.

            Process losses occur in each of the three components, resulting in a breeding ratio less than unit, even if all would operate as planned. A breeding ratio less than unit means that the cycle generates less fissile plutonium than it consumes, so during the operational lifetime of the breeder cycle the reactor has to be supplemented with plutonium from conventional reactors.

            During the past 50 years intensive research has been conducted on the U-Pu breeder concept in a number of countries (USA, UK, France, Germany, former Soviet union and Japan). The investments amount to more than $100bn. The international research was concentrated on the LMFBR, the Liquid Metal-cooled Fast Breeder Reactor, a heavily promoted concept during the 1980s and 1990s. All efforts, to my knowledge, failed.

            Presently the nuclear industry avoids the term ‘breeder’ or ‘LMFBR’ and uses preferably the terms ‘fast reactor’ or ‘Generation IV reactor’ or ‘closed-cycle reactor’. When speaking about these reactor types the nuclear world usually has fast U-Pu breeder reactors (LMFBR) in mind. From a publicity point of view this change of name has an understandable reason, because the concept proved to be technically unfeasible and consequently ‘breeder’ and ‘LMFBR’ are blacked names connoting a failed concept.

            The failure of the breeder concept is not caused by protests of environmental activists, nor by actions of leftist politicians, nor for economic reasons, as the nuclear industry asserts, but is caused by fundamental technical limitations. Implicitly the nuclear world assumes the availability of 100% perfect materials and 100% complete separation processes. None of these two conditions are possible, as follows from the Second Law of thermodynamics. By virtue of this law can be argued beforehand that the breeder cycle likely will not work.

            The breeder reactor is not a stand-alone system, but part of a cycle of three components: a special reactor, a reprocessing plant and a fuel fabrication plant. The cycle has to be started up with plutonium recovered from spent fuel from conventional reactors. The spent fuel from the liquid-metal cooled fast reactor has to be reprocessed to remove the fission products, activation products and actinides. The recovered uranium and plutonium would be reused. Due to rapidly increasing radioactivity of the spent fuel with each cycle, reprocessing and fuel fabrication become increasingly difficult. The isotopic compositions of the recovered uranium and plutonium become less favorable each cycle. Due to the unavoidable and increasing separation losses, the cycle produces less fissile nuclides than it consumes. For these reasons, among other, the breeder cycle is technically unfeasible.

            Russia could be releasing information on their “supposed advanced power plants and facilities” for national security and defense reasons as part of the typical back and forth propaganda campaigns governments and intelligence agencies play in the information warfare and energy crisis which is of national and international security concern to all countries.

    • Subsidised? Yeah, right…

      How many times it was written over here that we cannot maintain the system without cheap surplus energy? Lets subsidise oil until your $ is worth 0. Sounds like a good idea! Intrest rates at zero on a hundred trillion in debt and we can still buy oil with worthless dollars from stupid arabs.

    • Reader,

      While the future will unfold differently than we expect, the price of oil will continue to fall because of the LACK OF VALUE IN IT. Subsidizing oil will not change the fact that the price will still decline. You fail to realize the falling net energy means LESS MONEY TO BID UP THE PRICE.

      The governments will not be able to do much when the U.S. & Global Oil Industries start to really collapse. Because, they will be dealing with their own problems of collapse.

      steve

      • The lack of energy value, yes. But the value as the best fuel for transport will remain even at sub-1 EROI. The entire world economy, with trucks, ships and planes have no alternative to liquid hydrocarbon fuel, and that cannot be changed quickly. That is the value of oil you do not account for — it has a captive market.

        That implies a change of the role, and subsidised production is impossible without another source of energy with good EROI. Today is must be cheap foreign coal and gas, burnt in foreign countries, as there is nothing else to choose from. Hence low-EROI oil is providing the transportation fuel, while high-EROI energy sources provide affluence, which can and is imported into USA via financial system. That is a change of role of oil I mentioned — it is already happening.

        This arrangement can indeed collapse in many ways: due to a break in financial system, due to trade wars, due to shooting wars, and so on. But if USA manages to maintain a deficit budget with external sponsors, the low-EROI oil will provide fuels, and high-EROI sources will provide affluence transfered into USA via financial system. It is a very fragile arrangement, and it will break, but it has been working for quite some time now.

        • The problem is, when the higher EORI fuel is run out then the low EROI fuel wont be enough for the financial system or infrastructure or to transition to higher EROI like nuclear, since that relies on transport fuel for mining the raw material, and that’s assuming if there was enough uranium, which there is not.

    • Nuclear EROI is high due to the energy density of the fuel itself — true. However, you don’t take into account other factors in relation to nuclear EROI.

      Thorium may not be as problematic, but the cost of using Uranium (which is a finite resource) is in mining, enriching and machining and maintenance. High numbers may be the marginal cost of producing one additional unit of energy, not taking into extremely high fixed costs at front & back end (i.e. building, decommissioning, maintenance). Nuclear power plants require very high maintenance and MANY of them are old and falling apart. And also, the energy required in dealing with nuclear waste material, etc. There are the energy costs for decommissioning the nuclear reactors as well. Not promising.

      • Russia has the most advanced nuclear designs today, by decades ahead of any potential competitors, and they do not even mention thorium. Even seemingly small changes in nuclear designs require many years of development, and thorium is a revolution — no one is ready fro thorium today, not in 20 years. The best nuclear technology until about 2050 is fast reactors with closed fuel cycle and on-site fuel reprocessing — in Russia that will be achieved in stages between 2020 and 2030. And none of us who read this blog really care what happens after 2050.

        • I already answered this point in your response to me above, so let me re-post it in case you were not able to read it/missed it. In short, it doesn’t matter how more advanced Russia’s nuclear plants are, they still require uranium. And their efficiency isn’t greater enough to skew any of the general calculations here by much. With or without thorium, uranium is still needed, to the bet of my knowledge. Fast reactors still use a fair amount of uranium.

          Naturally occurring uranium is composed of three major isotopes, uranium-238 (99.2739–99.2752% natural abundance), uranium-235 (0.7198–0.7202%), and uranium-234 (0.0050–0.0059%).[6]

          Uranium -238 is the most common uranium isotope found in nature, which means it speeds the problem up even more, since this means that an infrastructure system using mainly Uranium would eat up it’s most efficient and available isotope.
          Uranium is a very limited natural resource. ALL power plants to date that I am aware of use both those main Uranium isotopes available.
          Now, from the rough calculations I have done, just to sustain America’s current population, we would need around roughly 2600 1-GW plants. The US currently has around 100 commercial nuclear plants in operations.
          To fuel a conventional 1 GW nuclear power plant, approximately 163 metric tonnes of uranium is needed each year according to the World Nuclear Association (WNA).
          A new nuclear power plant is licensed for 60 years, meaning each power plant will need a 60 year supply of uranium to operate.
          This means that each new plant will require 10,00 metric tonnes of uranium to operate for 60 years.
          As of 2009 (the last year reported), the identified reasonably assured and inferred US uranium resources totaled 472,11 metric tonnes.
          This sounds like a lot, but it really isn’t at all. Not to even sustain the whole infrastructure (which it couldn’t without transport energy anyway, which I will get to later).
          This amount of vailable uranium in the US will only supply a total of 48 1 GW Nuclear Power Plants for their 60 year lives.
          To sustain America’s projected population by the year 2100 (500 million), we would need over 4000 1GW nuclear power plants! That’s way more uranium than we have and that is only to last next century!
          The US simply DOES NOT HAVE the required amount of uranium to create enough power plants to replace fossil fuels!
          According to same NWA source, the identified reasonably assured and inferred uranium resources for the world total about 6,306,000 metric tonnes.
          This is only sufficient to power and supply 645 1 GW nuclear power plants for their 60 year life!
          That is NOT enough to supply the world with nuclear energy, nor is it enough to supply America with nuclear energy for long enough.
          This means that THE ENTIRE WORLDS uranium resources isn’t even enough to supply America with enough nuclear power plants!
          As of 2016, the world has a total of 508 1 GW nuclear power plants operating or under construction, thus the ability to significantly expand the number of nuclear power plants is greatly limited by the availability of fuel (uranium resources).
          Lastly, even if there was enough uranium, nuclear power can only replace the electric grid at best. We would still need transport fuel derived from fossil fuel to mine and transport the uranium and other minerals/materal and metals needed to produce nuclear energy and build the plants and handle it’s waste safely. it still requires very much fossil fuel to do this, so it would still be imppossible without fossil fuel.
          Nevertheless, the calculations clearly show that there is not enough uranium to replace fossil fuel for the next few decades alone.
          Nuclear fuel breeding won’t work either. I’ve looked into this as well. Not realistic at all.

          • And concerning Russia’s ‘more advanced’ plants which use thorium, I don’t think it is promising. Some scientists are already claiming that thorium system probably doesn’t yield a positive energy balance because the thorium process never brings 100% perfect materials and there are never a 100% complete separation processes.

            From a website recommended by a CERN researcher, another article on thorium nuclear: http://www.stormsmith.nl/i35.html.

            Excerpt:

            Feasibility

            The feasibility of the thorium breeding cycle is even more remote than that of the U-Pu breeder. This is caused by specific features of the thorium cycle on top of fundamental limitations. The realisation of the thorium-uranium cycle would require the availability of 100% perfect materials and 100% complete separation processes. None of these two prerequisites are possible, as follows from the Second Law of thermodynamics [more i42, i43]. It can be argued beforehand that the Th-U breeder cycle will not work as envisioned. In addition it would be questionable if the energy balance of any thorium fuelled nuclear power system could be positive.

  11. Thomas Malthus | January 7, 2017 at 6:38 am |

    Nah… I don’t need the money

  12. If oil isn’t powering the economy, then the existing power structure goes away too. So does the just in time delivery system, global trade, large shipping, Amazon, fiat dollars, UPS, air travel, etc. We will become local and we will be pushed into community interdependence. Some communities will survive others will burn. It just depends on their access to resources and how the people react. At some point Gold and Silver will work for transactions because they are recognized as money. At this point I’m thinking of other useful items. Skills and bartering items such as finished wood, knives, house building materials, copper pipe, bullets, nails, gardens, orchards, non-gmo seeds, paint, tape, animal husbandry, canning, beer, wine, weed, whiskey, etc will all be back in demand. Gold and Silver have always been money within this kind of system. They will be money in the next system, assuming we live through the chaos.

  13. Diogenes Shrugged | January 7, 2017 at 11:47 am |

    Maybe I’m just dense today, but there are a couple of points I’d dearly like to have clarified:

    1. Why does cost of production anchor precious metals prices but not crude oil prices? Is supply-and-demand the overwhelming factor for oil prices? After all, though a barrel of oil is less fungible than a few ounces of silver, aren’t they both “stores of value?”

    2. Why would we expect to see precious metals prices rise in the future if they only keep pace with their cost of production? Cheaper oil would suggest lower costs of production and cheaper precious metals prices. What, exactly, would cause that relationship to diverge? Why should I buy precious metals if they never rise in price beyond their cost of production?

    Stoneleigh and Ilargi at https://www.theautomaticearth.com/ have written at length about EROI and the coming oil crash for many years, and their assertions coincide extremely well with Steve’s. I’m curious, Steve, whether you’re aware of their work, and if you are, how you regard it.

    Thanks very much, sir. Few websites are so compelling (as this one is) that I faithfully read the articles and listen to the interviews twice.

    • 1. Oil price does follow cost of production. That’s why $120 oil almost blew up the system.
      2. See 1. The price of oil is way under cost of production, because oil above $70 is not affordable for the global industrialized world –>> thermodynamics

      Oil too expensive, world economy collapses. Oil too cheap, oil producing countries collapse. Pick your poison.

      The fogs of fiat got us here, and it will keep us here until it can’t. Between 2020 and 2025, probably before, mayor changes will affect our lives. The paper ‘price’ of precious metals will be your story to tell by the campfire. If you’re lucky.

      I have a question for you. What happens when oil exporters don’t accept fiat currencies anymore for their commodity?

      • Diogenes Shrugged | January 7, 2017 at 3:54 pm |

        Thanks, houtskool. At about 17:30 in the interview, Steve says that the cost of oil production since 1900 has generally matched the oil price with a 96.5% correlation. This makes sense on a chart spanning 116 years, but the oil price during the last several years appears to me to have deviated from that trend. As long as debt was being assumed everywhere at a gallop, plenty of money was sloshing around to jack up oil prices. Now that we’re in the vicinity of peak debt, the consumer is falling away and oil prices are falling. That explains the demand side. On the supply side, overproduction keeps prices low. Yes, countries and companies will collapse as time goes on because oil prices will continue to fall. I see this as supply and demand, but for loans, not for oil. In other words, the principal driver for the price of oil is the amount of debt money sloshing around.

        I can imagine precious metals prices rising as thermodynamics forces production costs to rise, but not higher. Again, there won’t be enough money sloshing around to drive those prices higher. Steve talked about oil exporters selling off their US Treasury reserves to stay afloat. Well, a lot of parties will be selling off their precious metals reserves to stay afloat once this monetary deflation (i.e. cascading defaults) really gets underway.

        Your question as to ‘what happens when exporters refuse to accept fiat currencies’ might be a good one ten or fifteen years from now, but the dollar looks like it’s going to be accepted, and indeed coveted, for a very long time to come. Besides, in ten years, exports might no longer be an issue at all. Wherever you go, all production, if there is any, will be consumed domestically. At least, that’s what I think I’m hearing from Steve.

        • On the supply side, they are “overproducing” (prices falling with that) because they’re “working harder” as debt is thrown their way but as a result are getting less and less usable energy from that oil to the end user in the market after all the energy costs from transportation, maintenance, and exploration are factored in (all which require most of the usable energy in the barrel that they pull out of the earth, in conjunction with waste heat).I think that is how I am understanding this.

        • I’ll get back to you. Its 1:43 am over here 😉

          http://www.usagold.com/goldtrail/archives/another1.html

        • Diogenes, good points. Adding debt to compensate for the missing net energy goes exponential as we speak. Problems that occur due to low oil prices will go exponential too, so it works both ways imho. I don’t know about the dollars lifespan, but i think deals are being made behind the curtains, like oil for gold. ‘Another’ , see link in other comment, wrote about that 20 years ago. Our current money system is severely distorted, the $ will be used to drag down other regions on the planet so there’s more oil available for the US.

          Trump is in a hurry to build the southern wall, in Europe we can already hear voices to break up the union. Afraid as they are for tens of millions of refugees coming from the south as soon as their last pieces of net energy are being sucked out to maintain the north for a little longer.

    • I am still trying to put this together, even with my understanding and background in economics. Trying to tie the thermodynamics understanding in with my knowledge of economics is what makes it a little more complex.

      I don’t know how on point this is with Steve and The Hills group, but after studying so much of what they say, what I have understood so far is this — and again, it may or may not be 100% on point with what they’re saying, but I am trying to use my understanding of economics to harmonize with the thermodynamics of it, with what I have understood thus far, so this is what I gather so far:

      There is cost of production for oil, but cost of production is ultimately dependent on economic demand and utility value. Cost of production is not the profit of a product sold. The profit is the premium the free market is willing to pay on top of cost of production, though cost of production and premium = total price. So cost of production is the baseline which separates loss from profit. Precious metals have stored economic value (the energy to mine it was already burned energy, so the energy to mine it already went into it, therefore it is stored economic energy). The fact that it is a store of economic energy and that it is a very rare metal gives (along with being used for thousands of years as currency) is what gives it intrinsic value. It is also a very concentrated form of energy in a small compact form (because it takes far more oil energy to mine gold than it does silver), thus it has a very concentrated amount of wealth in it’s small compact form. Silver takes less energy to mine and thus has less stored energy concentrated, and is therefore a less concentrated form of wealth. Silver is called “poor mans gold” for a good reason. But both have a good amount of overall value.

      Now, both metals don’t play a monetary role officially (just yet), so they are still priced as commodities. Once the time comes where they play a monetary role again, all the gold and silver ounces in the world or nation will then have to be valued against overall total debt/assets. This is what will officially make it shoot up in price at some point, dramatically. Now, whether this happens through an economic crisis and panic as never seen before (a complete collapse) or by government decree remains to be seen, but gold and silver will gain back it’s monetary value if either one of these happen.

      Oil has no monetary value. It’s large and bulky and is not a concentrated form of wealth. Back in the days when oil was worth more and thus had more value, if someone would want to store their wealth in oil, they would have to build massive warehouses to hold all that oil. That would mean maintenance costs to maintain all that!

      So for that reason alone hopefully more people can see why gold and silver historically is and has been true money: it’s fungible! Not fungible = not easily transported and storage/maintenance costs to store the wealth.

      Gold also gives people privacy as they hold their wealth because it is so concentrated and small. oil does not.

      Gold and silver is a claim on stored/spent energy. Currency is supposed to be too (but it’s real value is only by government decree and thus not intrinsically valuable).

      Now the complicated part on the thermodynamics of it, in trying to tie it in with economics….from what I understand thus far from Steve and The Hills group (hope I am on point that this is what I gather from them):

      If a product is being produced and there is diminishing demand for it (or manipulation causing artificial scarcity, such as with precious metals), then there is too much supply, thus driving down the price towards the cost of production, if demand stays down long enough. But, eventually, if there is still no demand, production is cut, otherwise, if the product continues to be produced at or below cost, there will be a loss on the producers side. Oil right now is being produced at below cost (if we were to factor in all the money so the could be propped up and service their debt). Oil below 70-100 dollars a barrel is gutting the industry. Yet they keep producing all this oil because the overall grid system requires that amount of oil and debt to continue working/operating. The transpiration and shipping system and travel industry, the internet grid, etc., all require more energy. So most of the oil produced is needed to keep that system up and as much is being produced as they can (and the debt is allowing them to keep producing at a loss) and running but less usable energy is getting to the end users/consumers. So companies cut jobs and less people have money and consume less energy (less driving, etc.).

      If the producer is producing a product that has no real demand, then that product goes on fire sale below even the cost of production. For example, going out of business stores or companies will often sell everything for %50 off or 80% off, which is at cost or below cost of production.

      If something is on a fire sale being sold at below cost of production, then it virtually has very little to no real value (since it is being produced and sold at a loss).

      The smaller oil companies are not making any money. They are producing oil at a loss. The large oil industry is going in that direction as well and are being gutted and have been able to survive thus far due to being propped up financially by the debt. The low prices are gutting them still. Well, ultimately because there is less and less demand in the overall economy and more oil stock, thus causing prices to drop, the oil companies are still jacking out oil almost like a fire sale is going on and they’re doing it at a lost or with the help of easy money to be propped up. And as they max produce all that oil at a loss, after it’s converted to transport fuels, there is a diminishing amount of usable energy or transport fuels being produced from all of that drilling. So you have a lot of oil production but less and less fossil fuel being converted from the oil. Oil companies could find the easy low hanging fruit (oil) in the early and mid 1900’s and it didn’t take as much money to drill for oil and explore.

      But now that we have exhausted our cheap oil wells and took all the low hanging easy-to reach fruit, all that is left is the very very deep, low quality dirty oil. As the global energy consumption requirements expand, we are finding far less energy to keep that growth up.

      Energy costs of exploration, extraction, and transportation have gone up greatly. So when we subtract the energy required for those things and the waste heat from the average barrel, we are getting about only 8% energy from the average barrel to the end users in the market, whether they be in business or private citizens. Decades ago, in the 1900’s, we were getting about a 61% net energy yield per barrel. So now we only get 8%, which means about 92% of the energy per barrel that we get is used for energy costs (exploration, extraction, and transportation, etc.) and unavoidable waste heat (second principle of thermodynamics).

      So it doesn’t matter who comes in (government or banks and large institutions) and tries to bid up the price of oil because there is a diminishing amount of usable energy oil companies are pulling out of each barrel, so the net value of that oil is falling based on the thermodynamics of the diminishing usable energy (again, most of the energy in oil is not used). We are not finding more oil (not large enough to last us decades and to satiate future projected growth) so that remaining amount of usable energy per barrel will continue to diminished and this energy is what makes up the utility value of oil.

      Once there is no more usable energy in oil for transportation fuels (which are a derivative of oil), then there will be no net energy available in the raw oil and thus the market price will collapse on it. The cost of production will result in an overall loss because there will be no energy produced which will yield a profit, eventually.

      • Thanks Stephen. That’s it, completely agree. One thing about the value of oil vs gold/silver: oil is flow (energy), gold and silver is stock, produced by the flow (oil). When the flow gets in trouble, as we can see now in oil and coal (we are at peak net energy), the stock will dry up. We can still buy physical gold and silver that was mined with leveraged human energy; oil. When the leverage dissapears, we have to dig it up by hand. There’s your future value of gold and silver.

        No guarantees of course, food is also a stock produced by the flow; oil/energy. When that stock dries up, we’re in trouble.

  14. Fascinatedbutconfused | January 8, 2017 at 12:33 pm |

    I have listened and read all here, but I am still confused. If energy is getting more difficult to find, extract, and transport….then why would the price fall? My simple mind tells me that falling EROI just means available supply is drying up…..which in turn would drive the price up. What am I missing?

    • Oil companies must make a profit to stay in business. At $120,- the world cannot afford oil, demand dries up, price collapses. With $120,- oil, all the money that’s needed to pay for the oil won’t go to other parts of the economy. Less clothing, cars and kitchens sold, economy collapses. Cheap surplus energy gave us the leverage to grow. The cheap part is over, and so is the leverage to maintain growth in a manner the system needs. So it will implode.

      If we cannot afford a car due to low wages, expensive cars and a debt overload, cars won’t be sold, and that industry collapses. Same with oil. If we cannot afford expensive energy, the energy won’t be sold. As simple as that.

      • Fascinatedbutconfused | January 9, 2017 at 9:34 am |

        So does that mean we are in collapse now? Are you saying that oil prices will continue to fall because the economy is currently grinding to a halt?

        • Yes. There will be attempts though to prop things up with QE, and oil prices will rise, but that’s only temporary. They cannot fight gravity with promises.

  15. Thomas Malthus | January 8, 2017 at 5:46 pm |

    Replacement of oil by alternative sources

    While oil has many other important uses (lubrication, plastics, roadways, roofing) this section considers only its use as an energy source.

    The CMO is a powerful means of understanding the difficulty of replacing oil energy by other sources. SRI International chemist Ripudaman Malhotra, working with Crane and colleague Ed Kinderman, used it to describe the looming energy crisis in sobering terms.[13] Malhotra illustrates the problem of producing one CMO energy that we currently derive from oil each year from five different alternative sources. Installing capacity to produce 1 CMO per year requires long and significant development.

    Allowing fifty years to develop the requisite capacity, 1 CMO of energy per year could be produced by any one of these developments:

    4 Three Gorges Dams,[14] developed each year for 50 years, or
    52 nuclear power plants,[15] developed each year for 50 years, or
    104 coal-fired power plants,[16] developed each year for 50 years, or
    32,850 wind turbines,[17][18] developed each year for 50 years, or
    91,250,000 rooftop solar photovoltaic panels[19] developed each year for 50 years

    http://en.wikipedia.org/wiki/Cubic_mile_of_oil

  16. And concerning Thorium:

    From a website recommended by a CERN researcher, another article on thorium nuclear:

    http://www.stormsmith.nl/i35.html.

    Excerpt:

    Feasibility

    The feasibility of the thorium breeding cycle is even more remote than that of the U-Pu breeder. This is caused by specific features of the thorium cycle on top of fundamental limitations. The realisation of the thorium-uranium cycle would require the availability of 100% perfect materials and 100% complete separation processes. None of these two prerequisites are possible, as follows from the Second Law of thermodynamics [more i42, i43]. It can be argued beforehand that the Th-U breeder cycle will not work as envisioned. In addition it would be questionable if the energy balance of any thorium fuelled nuclear power system could be positive.

  17. Thomas Malthus | January 9, 2017 at 2:34 am |

    Prices fall when people are unable to afford to pay the price required for a resource

    This is what happens when people cannot afford oil

    https://www.youtube.com/watch?v=z4DLB_jmCJg

  18. And lasty, one last thing I wanted to add with regards to Nuclear Energy.

    A comment was made that the EROI of US nuclear is around 15 and that the more advanced EROI nuclear is around 50.

    I would seriously question these sources since I wonder if it considers government energy financial aid substantives in their EROI calculations. But, even assuming this this is true, the problem is THERE IS NO INFASTRUCTURE IN PLACE TO RUN TRANSPORTATION OFF OF NUCLEAR ENERGY (which produces grid electricity).

    To my knowledge, vehicle engines cannot run of nuclear energy derivatives. Such engines have not been mass produced or invented. So it seems that in order for Nuclear to also run mass transportation, it would have to use batteries for electric vehicles to power them.

    And therein lies the problem:

    Calculations show that a large tractor-trailer truck carrying goods to transport would need around a 70,000 POUND battery with todays currently battery technology to transport the goods and run. This of course wouldn’t work. This is a massive amount of energy required and we don’t have the energy density in battery technology to do this, nor to date are there compact mobile engines developed to run specialized nuclear fuel derivatives (and I doubt if it would be possible due to the radioactive material among other issues, including safety combustion issues, etc.).

    This means that, even if this could work — that even IF we could run electric trucks and cars off of current or next gen battery technology, it would consume SO MUCH electric car energy in transportation of goods alone, let alone personal/public transport use, that even the highest EROI factor of Russia’s most advanced nuclear technology from their Fast neutron spectrum reactors — which, for arguments sake I am assuming is true, is said to be around 50 —then we would see that EROI factor of 50 completely diminish into the negative territory.

    Anyone who runs calculations knows roughly how much energy a fully functional electric grid to replace our current fossil fuel and coal-run grid would take. A EROI calculation has not been done thus far with regards to nuclear running our grid on electricity, including transport, but anyone who is aware of how it is done would have a good idea to know that that number is so massive (the energy required to use nuclear to run a fully electric grid including transportation) that that would COMPLETELY dissolve that 50 number of the EROI factor of the most advanced nuclear plants to date.

    EROI calculations to date DO NOT factor in running the entire transportation grid system also, to my knowledge with all the calculations I have seen.

    All the nuclear EROI calculations I have seen (and I have probably seen all) have either an EROI on the lower end or the calculations on the higher end around 50-70ish are usually done by nuclear energy special interest groups or governments and are HIGHLY inflated (and they do this by leaving out EROI factors in their calculations) and biased and thus highly questionable. But even they at best are not high enough to not end up in the negative EROI territory once a FULLY functioning electric transport grid is accounted for.

    And therein lies the problem. There aren’t enough nuclear plants to just replace coal and keep the current non-transport grid intact and that would have to be built up quickly in the next 10 years (and this aint gonna happen).

    Well, that won’t be useful without trucks and ships being able to transport all the goods and heavy material (lumber, metal, etc.). So ignore the fact that current battery technology can’t allow nuclear power to charge batteries to power the trucks and trains to move goods and raw material. Even if it could, it would push that EROI factor of 50 in the negative category. The number would be so huge a rough guess on rough calculations is all that would be required.

    This is the problem the “nuclear will save us” folk miss. Without the transportation system working, and the mining sector working, nuclear power replacing fossil fuel and coal is a complete “la la” dream.

  19. Clearly our battery technology is not going to work for transportation of goods..

    One company is attempting to run a fleet of electric trucks using hydrogen cells. The hydrogen is going to be generated by a large PV system located in an optimal location in the west.

    Is it possible that nuclear power be used to generate hydrogen which could then be used in transportation and have it be effective?

    Thanks,

    SteveW

    • Hi SteveW,

      No, I don’t think it would work, honestly.

      Right now over 90 percent of the hydrogen available in the U.S. is either extracted from fossil fuels or made using electrolytic processes powered by fossil fuels, thus negating any real emissions savings or reduction in fossil fuel usage. Last I checked, most of the hydrogen manufactured today is not made from the hydrolysis of water, because of the energy input needed. Instead, it’s made from natural gas, etc. This is not spoken of very much by the hydrogen advocates for obvious reasons.

      Now, could that energy input be replaced using electric battery charged by nuclear energy? Yes, but that would be even less efficient than using a direct battery powered electric car, IMO. Electric Vehicles are at least three times more energy efficient than Hydrogen fuel cell vehicles from the research I have done (though neither cars offer a favorable EROI in reality).

      The real problem is that hydrogen itself is a storage system and not an energy source also (it needs natural gas/oil or electricity, etc.) and weight and handling is a big issue as well (for example, with current technology, it means transporting the hydrogen under considerable pressure which, in turn, implies large amounts of additional weight, etc). Hydrogen gas has no where the energy density of oil so it has to be compressed.

      When you boil it all down, whether hydrogen “fuel cell” electric vehicles are more or less energy efficient than the straight electric battery powered hydrogen vehicles really ends up being a moot point because at the end of the day, both cars use a very large amount of electricity and the trucks completely demolish them on electricity requirements.

      But the energy it takes to build those “fuel cell” cars and trucks (which would have to be from recycled and mined metals, which requires a tremendous amount of energy alone) and to create the technology for them would all require such massive amounts of electricity, and then in turn would have to use electricity from their batteries to produce electricity using hydrogen and oxygen would seem less efficient. At that point it would just be better to have straight up battery electricity because the end result is that it will be using stored battery electricity to use electricity rather than use stored battery electricity to then use hydrogen and oxygen to then create more electricity. That creates a bigger inefficiency on the drivers side, in theory, I believe. Would be better to just use the electricity straight from a stored battery source. Maybe it would be less electricity for those who have to produce it and store it for the vehicles, but that requires calculating all of the electricity costs in transporting and storing and processing the hydrogen, which then probably undoing any electricity saved on the drivers end.

      Hydrogen stations for transport would have to be built. Or delivery pipelines, which would require a MASSIVE infrastructural undertaking and A LOT of metal and energy and would require A LOT of maintenance. Lots of electricity. So again, any savings on the drivers end would be offset by the extra costs on the producers or supply end, in theory/practice.

      So in the end, yes nuclear plants could in theory produce electricity which then can charge batteries for use in hydrogen fuel cell cars as opposed for larger batteries for full on electric cars which don’t use hydrogen, but that saved electricity would again be offset in the cost to transport and process and maintain the hydrogen and it’s grid system, which would need to be built on a national/global-scale (more electricity need).

      So the end result is, you end up with the same problem: nuclear power would be producing all of the energy electricity for cars, either directly or indirectly via smaller batteries and a massive infrastructure system needed for the hydrogen fuel cell vehicles.

      And you still have the energy density problem provided by electric batteries and hydrogen which wouldn’t work for large transport vehicles/trucks. Maybe smaller cars, but large transport trucks and trains is highly essential and without them the entire infrastructure collapses.

      And many people overlook battery use. Batteries have to be replaced and require minerals/metals (including exotic elements for next gen technology), which require heavy use of oil to mine. Many metals require A LOT of oil to mine. So the question is, how can electric energy be stored in batteries when those batteries require the energy density of oil to mine those metals/minerals (which electric powered machines cannot do)? Even for smaller fuel cell batteries for hydrogen cars.

      And the replacement rate for these batteries would be absolutely astronomical because you have millions of people replacing their batteries every period, or whenever they are faulty, etc.

      Next gen nuclear power plants could produce hydrogen as well, in theory, but problem is A) how much can it produce to meet hydrogen vehicle demands and B) nuclear plants are very stationary and not mobile. So that wouldn’t work well. So it would have to produce electricity which is then stored in batteries to whatever degree at least. But even if the nuclear plants could supply even most of the hydrogen directly, so that it cuts it’s electricity use, because hydrogen fuel cell vehicles are far less efficient than battery fuel cell vehicles, it will still use more electricity for it’s batteries to make up for that inefficiency, thus also cutting the lifespan of the batteries used. So they might think they are saving and cutting electricity costs by passing it on to the consumer, but the consumer will just have to return more often for refueling the hydrogen, which means more electric use in charging those batteries.

      I just don’t see how nuclear can support such a massive electric city and transportation system for more than a few decades at best. And that is ignoring the massive cost and undertaking it will be and the many years (which, if the Hills Group is correct, we don’t have more than 5-10 years left until it breaks down badly) it will take to get up and running.

      • Thanks for the great and comprehensive reply.

        How about if they just ran the trucks (or cars) directly on hydrogen. Could a vehicle carry enough H2 so that the number of refueling spots could be greatly reduced and eliminate the inefficiencies of another conversion?

        Thanks,

        SteveW

        • To run cars directly on and store hydrogen…I think you would be talking about the hydrogen combustion engines then I assume? Those were before the hydrogen “fuel cell” vehicles. But neither vehicles run directly off of just hydrogen. The combustion hydrogen vehicles were far more inefficient than the fuel cell vehicles and they still required natural gas to start the combustion process of processing the Hydrogen to produce energy, etc. They carried compressed hydrogen. I think that’s the closest thing to that and I think for small cars that’s not very efficient because it takes energy to keep it compressed and store it. A lot of energy is lost during the electrolysis process. The fuel cells don’t have to carry so much hydrogen. They are just filled up at a hydrogen station and the that goes into the fuel cell to process it and make energy and I think the more advanced systems now have a battery to store excess energy.

          So if they were to use hydrogen more ‘efficiently’ it would have to be something like the fuel cell, since the earlier generation of combustion hydrogen cars were a flop. But even then, the real efficiency comes from the battery and not the fuel cell itself when it comes to fuel cell vehicles. So they would just need a much more advanced form of battery technology for future fuel cell vehicles, which will require more exotic minerals and metals to be mined. Right now as far as the cost to energy factor goes, fuel cell vehicles are way too horrible. I couldn’t imagine what it would be for trucks in the long run if they could achieve that. So the cost is a big issue in slowing down any transition to fuel cell vehicles. If battery technology is able to carry 2-4 times the energy density their makers are claiming they will in 10 years, then perhaps battery electric vehicles are the only thing closest to a ‘efficient’ solution, though electric cars themselves energy-wise still are not very good in the EROEI department over their lifespan. Even a company like Tesla I believe is still technically producing cars at a net loss, but only are able to do so because of government energy money/subsidies, etc. Technology consumes energy and many people don’t take this into account when they think about electric and HHO fuel cell electric cars. Even much of the material used to make the cars are petroleum derivative products.

          But even if we make more advancements in fuel cell and battery technology in 5-10 years, there is no way possible that they can replace the heavy machines and equipment used to mine metals and minerals. Even if we were able to do electric trucks. The massive machines used in mining use up so much oil and no kind of electric or hydrogen vehicle can match the energy use and density of oil that these machines themselves consume mass quantities in such short periods of time. It would take thousands of tons of electric batteries to even begin to try to scale that up.

          An electric infrastructure which uses eclectic and hydrogen electric vehicles may at best (and I am being very generous here) eventually use smaller scale trucks for transport (maybe half the size of current tractor trailers), but there would need to be more of them to match the efficiency of todays diesel tractor trailers, which means far more electricity used. But even if they are able to do this, all that metal and mineral raw material which will go into the heavy use of batteries and electric cars and machines and trucks would still require heavy use of mining machines which use transport fossil fuel. I just don’t see how there can be any other alterative for that. So we sill run into a big problem even if we did get everything right in transportation and shipping. It’s really not much different than trying to fuel a rocket ship to the moon with electric battery power —aint gonna happen.

          And the more advanced the batteries used, the more harder to mine it’s products will be, such as certain minerals, etc. The most advanced batteries today already use very advanced raw products which are more rare and harder to find and thus harder to mine, which equates to more oil or energy and cost required to mine them.

          But remember, a fully electric transport shipping infrastructure (if it could be done) is what will greatly drive down those EROEI numbers which the most advanced nuclear power plants can provide. And we don’t even have those as our staple nuclear plants in the US. Those ones offer a much lower EROEI (around 15 from what I can find). If America needed an EROEI of 1:30-50 just to maintain it’s GDP growth, then remember, that was with machines and vehicles which mostly use transport fuel derived from fossil fuel, which have a better EROEI than electric.

          Well, if in a best case scenario we have the best nuclear plants which offer us an EROEI of 1:50 (and we would have to build them since the best ones we have now I believe offer an EROEI of 15) and that is providing we have enough plants built, then we can’t scale that up to it’s oil equivalent because SO MUCH of that EROEI would be offset and negated by the electric transportation and shipping grid and that is not accounting all of the energy needed to built the infrastructure and plants to begin with. And also keep in mind that much of todays electricity also comes from coal, so if we really want to do correct calculations we can say that EROEI number from fossil fuel which is needed as a bare minimum for economic growth should be even higher, as EROEI would also come from coal>electricity>energy.

          So if nuclear provides electricity to power the electric public transport and shipping and power infrastructure, and agriculture, it would also have to make up for the electricity coal provides, not just that which comes directly from fossil fuel. That alone would cut the overall nuclear EROEI in half, as nuclear would have to make up for that shortfall as well, since coal cannot be mined without the energy density of fossil fuel (the massive machines used to mine coal are far larger than and consume even more energy than tractor trailers do).

          So just as a guessing man, and I will be conservative here and not add the electric grid building energy requirements, that EROEI of 1:50 could end up being 1:25 just from nuclear having to provide the electricity to make up for coal and natural gas alone, then the electric transportation and shipping and agriculture grid. easily end up being 1:1 or even less, but mostly likely fall into the negative category. So even an EROEI of 1:15 wouldn’t be enough to sustain the current GDP, let alone allow it to grow. And without growth, pensions and bonds are all greatly impacted by this.

          Agriculture is another industry that uses fossil fuel very heavily. Most of the machinery use fossil transport fuel and natural gas already is inefficient and more needs to be used in the machinery or vehicles that use them.

          All in all, even with the most advanced electric or hydrogen fuel cell cars, even if they filled up at nuclear plants or at home, roads still need to be maintained (roads uses oil derived chemicals as well), street lights, and buses and pipelines and shipping, which requires much energy. Transport and shipping is tough enough, but the real problem is that there are no efficient oil alternatives to keep agriculture and mining going and without those two industries, civilization can’t survive the way it has, even if we have the best electric cars and trucks.

          • Thanks Stephen. It is dismally complete.

            It appears that even with advanced nuclear or fission, SPARC or similar (https://www.youtube.com/watch?v=KkpqA8yG9T4), we still need a suitable substitute for liquid petroleum fuels or we are screwed.

            Soo, I guess it is back to stream shovels, coal locomotives and Stanley steamers or horse and buggy and bicycles.

            As for dark, bad roads, I live in Michigan and we are used to those.

            SteveW

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