07 April 2010

What Technology Can Do

A few weeks ago the Economist had a fascinating article about deep water oil drilling. If we can make such rapid progress in fossil fuel energy technologies, it is probably safe to conclude that should we choose to direct public resources into fossil alternatives, then we can make rapid progress there as well.

This is not to suggest anything specific about the relative roles of the public and private sectors -- they are mixed up in complex ways and both have important roles to play in processes of accelerating technological innovation. The remarkable graphic above indicates that technological change happens fast when we focus attention and other resources on challenges that once seemed impossible.

Here is an excerpt from the article:
Until the mid-1990s, says Robin Walker of WesternGeco, an oil-services company, there was a general view that successful offshore oil-drilling operations were limited to a water depth of around 600 metres. But this had less to do with the challenge of accessing the oil than with finding it in the first place. Giant platforms like Thunder Horse and Perdido provide the necessary muscle, but advances in computing at the exploration stage have been just as important when it comes to tapping deepwater oil. In this most physically demanding of industries, software, as much as hardware, is changing the game.

To give an idea of the difficulty of deepwater drilling, Mr Walker uses an analogy. “Imagine a large offshore oil rig as a matchbox,” he says. Next, imagine the matchbox on top of a two-storey building, with the upper floor filled with water and the lower floor filled with rock, sand and, in some cases, salt. Striking an oil reservoir with a drill pipe is then like hitting a coin at the base of the building with a strand of human hair. The penalties for getting it wrong are enormous. An industry rule of thumb puts the cost of drilling a deepwater “dry hole”—a well that does not strike oil—at around $100m; BP says it can be as high as $200m.

With the stakes so high and the margin for error so small, “you need to know before you drill,” says Stuart Strife, Anadarko’s head of exploration in the Gulf of Mexico.

46 comments:

  1. "...it is probably safe to conclude that should we choose to direct public resources into fossil alternatives, then we can make rapid progress there as well."

    I find that statement completely without merit, and surprising coming from a scientist. "Public resources" are not the rub of the magic genie bottle.

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  2. Inscription unearthed in Pompeii: "If we can make such rapid progress in aqueduct technologies, it is probably safe to conclude that should we choose to direct public resources into heavier-than-air flight, then we can make rapid progress there as well."

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  3. Until the late 1990's, geologists didn't think there was any mechanism to transport large quantities of sand into deep water as far from shore as the Perdido platform. The first discovery of the "Lower Tertiary" sand way out there was more or less accidental in a well that was actually being drilled (unsuccessfully) for a deeper limestone target.

    It's not enough just to have the technology. There has to be a plausible hypothesis for drilling to test. Once there was a plausible geological hypothesis for getting large quantities of sand out there, the technology followed.

    http://www.shell.com/home/content/media/news_and_library/press_releases/2010/perdido_31032010.html

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  4. "direct public resources into fossil alternatives, then we can make rapid progress there as well."

    I disagree. The new offshore technologies are more expensive than the existing ones and are only viable because the value of oil has risen faster than the cost of extraction.

    The problem with renewables is they are low density sources which require a large infrastructure to extract small amounts of energy. This means we need technologies that significantly reduce the cost of exploiting renewables which is a much more intractable problem. My feeling is most renewables will never be economically viable.

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  5. "...it is probably safe to conclude that should we choose to direct public resources into fossil alternatives, then we can make rapid progress there as well."

    "I find that statement completely without merit, and surprising coming from a scientist. "Public resources" are not the rub of the magic genie bottle."

    Don't you think it's reasonable to state that technologies on which developmental money is spent tend to develop faster than technologies on which developmental money is not spent?

    For example, suppose the U.S. government were to spend $5 billion a year for the next 10 years on developing liquid fluoride thorium reactors (LFTRs). Don't you think that $50 billion would result in much more rapid development of LFTRs than would otherwise occur?

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  6. "If we can make such rapid progress in fossil fuel energy technologies, it is probably safe to conclude that should we choose to direct public resources into fossil alternatives, then we can make rapid progress there as well."


    Yes, this one really is a stinker. It's called magical thinking, Roger, and I would think that you'd know better. Investors chose to put their money on the line to develop this oil drilling technology. If it was equally likely that "alternative" energy technology would produce profits, investors would be happy to take advantage of it.

    Unless you think that your Representatives and Senators are better judges of future technology advances. You've gone pie-in-the-sky on us, Roger. All potential technological advances are not created equal. We've done miraculous things with modern medicine, but we still can't cure the common cold, and it's not for lack of investment.

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  7. There is a lesson for climate change policy from offshore oil - that human ingenuity will make possible tomorrow what seems impossible today - but that is better applied to adaptation than to alternative energy sources.

    Contrary to every successive wave of Malthussian scaremongering humans have proved fantastically inventive at adapting (and adapting to) their environment and will go on doing so.

    The problem with alternative fuel sources is that with one or two exceptions the economic fundamentals are too difficult for technological change to make a difference on any large scale. When the cost of fuel is already zero, improving the way we get at it won't make much difference.

    The only non-fossil fuel source where technological change could make a difference would be nuclear but, welcome as the nuclear renaissance is, no-one thinks it will displace fossil fuels which are with us for the foreseeable future.

    Rather than applying social, political, physical and every other form of engineering to a futile attempt to regulate the global temperature why not leave humans to do what they always done: adapt creatively?

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  8. -5-Mark B.

    Your ideology is showing;-)

    We have nuclear bombs, aircraft carriers, penicillin, massive dams etc. because of directed technological innovation.

    To suggest that we cannot direct innovation in particular directions is an unsupportable view, simply based on history.

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  9. "To suggest that we cannot direct innovation in particular directions is an unsupportable view, simply based on history.

    Yes we can. However, there is no basis to conclude that the results will be as you suggest. Wishful thinking. I agree with Mark B. Raven hits the nail on the head as well.

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  10. Doesn't the need for public funding indicate a very low probability that the technologies in question will ever be economically competitive without ongoing subsidies? The giant oil platforms are by no means guaranteed to be profitable, but there was at least a plausible case to be made that they would be. Otherwise the money wouldn't have been invested.

    It would be interesting to see a risk and uncertainty analysis as rigorous as that used for expensive oil platforms, applied to climate models and alternative energy technologies.

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  11. Roger

    I support state support of new technologies at historical levels of funding.

    A Guardian journalist (on my behalf) asked British environment minister Ed Miliband if he intended changing the funding of new energy sources from regressive right wing increases in fuel bills to general taxation.

    He replied that he had no plans, and that as life under his left wing regime was so benificent, I shouldn't complain.

    Left wing in the mould of Reagan and Thacher, I retorted.


    P.S. AFAIK You haven't fulfilled your promise to reveal why you prefer low carbon technologies.

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  12. -11-eric144

    "You haven't fulfilled your promise to reveal why you prefer low carbon technologies."

    It is coming:
    http://rogerpielkejr.blogspot.com/2010/04/climate-fix.html

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  13. The call for "public resources" to fund wishful thinking brings to mind this quote:

    “Personally, I like the University. They gave us money and facilities; we didn’t have to produce anything. You’ve never been out of college. You don’t know what it’s like out there. I’ve worked in the private sector. They expect results.” --Dr. Ray Stantz

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  14. "If we can make such rapid progress in fossil fuel energy technologies, it is probably safe to conclude that should we choose to direct public resources into fossil alternatives, then we can make rapid progress there as well."

    No doubt if we spend enough public resources we can figure out how to make the wind blow all the time at constant velocity to make wind power closer to economic viability.

    Likewise if we spend enough public resources we can figure out how to make two new sun's spaced at 120 degrees and eliminate clouds so that it is sunny all the time and solar power is closer to economic viability.


    BTW, was this article composed on April 1?

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  15. You guys are great ;-) Well, I could be wrong, and there might be no hope for technological progress in low-carbon energy. If you guys are wrong, you might appear on a list like the following:

    1. “There is no reason anyone would want a computer in their home.” — Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC), maker of big business mainframe computers, arguing against the PC in 1977.

    2. “We will never make a 32 bit operating system.” — Bill Gates

    3. “Lee DeForest has said in many newspapers and over his signature that it would be possible to transmit the human voice across the Atlantic before many years. Based on these absurd and deliberately misleading statements, the misguided public … has been persuaded to purchase stock in his company …” — a U.S. District Attorney, prosecuting American inventor Lee DeForest for selling stock fraudulently through the mail for his Radio Telephone Company in 1913.

    4. “There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television, or radio service inside the United States.” — T. Craven, FCC Commissioner, in 1961 (the first commercial communications satellite went into service in 1965).

    5. “To place a man in a multi-stage rocket and project him into the controlling gravitational field of the moon where the passengers can make scientific observations, perhaps land alive, and then return to earth – all that constitutes a wild dream worthy of Jules Verne. I am bold enough to say that such a man-made voyage will never occur regardless of all future advances.” — Lee DeForest, American radio pioneer and inventor of the vacuum tube, in 1926

    6. “A rocket will never be able to leave the Earth’s atmosphere.” — New York Times, 1936.

    7. “Flight by machines heavier than air is unpractical (sic) and insignificant, if not utterly impossible.” – Simon Newcomb; The Wright Brothers flew at Kittyhawk 18 months later.

    8. “Heavier-than-air flying machines are impossible.” — Lord Kelvin, British mathematician and physicist, president of the British Royal Society, 1895.

    9. “There will never be a bigger plane built.” — A Boeing engineer, after the first flight of the 247, a twin engine plane that holds ten people

    10. “Nuclear-powered vacuum cleaners will probably be a reality in 10 years.” -– Alex Lewyt, president of vacuum cleaner company Lewyt Corp., in the New York Times in 1955.

    More here:
    http://listverse.com/2007/10/28/top-30-failed-technology-predictions/

    This of course is a religious debate absent experimentation, so my recommendation would be to give it a try and see what happens. Fair enough?

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  16. Craig. I'm sure the distinction is correct.

    However, I remember a BBC TV documentary about a major Japanese corporation. It was extremely regimented, everyone wore the same clothes, bowed to management etc.

    At one point, the reporter exclaimed "what's that" ?. The camera panned to a young guy with a beard, Levis, tee shirt and a cigarette hanging from his mouth. The Japanes guide replied "He's a genius. He does what he likes".

    I am also reminded that in the early days of computing, large salaries were paid to individuals to do absolutely nothing. What they did was the copyright of the corporation. That is how the much of the original work on the WIMP (mouse) interface was developed at Xerox Parc. By a guy playing with the design of chinese temples.

    Again, Bill Gates original partner at Microsoft claims that LSD was absolutely crucial to the development of micro computers and there would have been no windows without it. That was in a UK television documentary.

    Gates himself did LSD

    http://www.veryimportantpotheads.com/site/gates.htm

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  17. Not every technology can be brought to reality by throwing money at it. In some cases we run up against the limitations of materials or precision or logistics or thermodynamics. There is no way to make a big truck loaded with goods get 50 mpg no matter what you do. Unless you use wind to pump water back up into a hydro-power reservoir, there is no way to overcome the intermittancy problem. There are a number of technologies which we have been promised for decades but which are still decades away from being commercially viable (without subsidies): solar power, fusion power, personal jet packs, etc. They may or may not eventually become feasible. It seems unwise to make plans on the assumption that they will.

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  18. eric144- I'm sure with enough mind expanding chemical stimulation and public funds, another SST could be in put in service and achieve similar financial results.

    ;)

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  19. Oil exploration technology is a suite of technologies. From geophysical data processing to navigational technologies to drilling technologies among others.
    To imply that money can be tossed at other areas the state decides are with merit to get similar results is not really reasonable.
    The most important thing is that oil and gas are real, and their chemical properties make them very rich in energy.
    Wind and solar are limited not only by physical limits of devices that can convert wind or sun into energy, but by the physical limits of the wind and sun itself.
    Perhaps what the graph shows is that AGW promoters have failed to reality into account as they seek to push carbon out of the energy mix?
    If ony we had permitted ourselves to pursue nuke power, and to not fall into the enviro-fear industry position of irrational opposition for fission.

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  20. "I could be wrong, and there might be no hope for technological progress in low-carbon energy. If you guys are wrong..."

    I'm not sure that was our point exactly.

    The argument that because one thing progresses "quickly", that means any other thing, given a similar amount of effort put behind it, would also progress "quickly" is simply fallacious. (I'm thinking its an example of the complex question fallacy.)

    For example, something like research into superconductive material might not be prone to the same type of progress even if far greater sums were thrown into the mixer.

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  21. The enabling technology of computer power has made this possible as it has in so many areas. Some alternative energies simply run up against the laws science e.g. photo-voltaic cells and wind turbine. This is probably true for fully electric vehicles as well. The only one that seems to have potential is nuclear.

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  22. Hollywood regularly risks $100M or more for production of a film that may or may not generate much revenue, much less a profit. Risk vs. reward is the foundation of a capitalistic society. Advocating investing our tax dollars in projects with a high risk vs. low reward ratio has been the staple of those who seek to "improve" our country via public "investment". How may trillions of dollars have been re-directed from private hands into the public coffers in the name of the public good? Can anyone legitimately argue that most of that money has accomplished the goals originally promised? Have we eliminated poverty after spending hundreds of billions over the last 50 years? Have we eliminated lethal threats against us worldwide by investing in our military? Have we enjoyed the fruits of a highly educated and literate workforce produced by our public education system? Have we eliminated crime in our cities after billions spent on policing? Have we eliminated drugs in our culture after spending billions on prevention and interdiction? Do those retiring in the next several decades believe that they will be collecting any retirement funds from the Government? Do we have a modern, efficient civil infrastructure and mass transit system throughout our country after the investment of hundreds of billions? For every technological advancement created by NASA that has been developed into a viable commercial product, billions more have been wasted with no overt benefit to our country. If we are to believe that government bureaucrats are going to solve our energy problems (or health problems), then we are in store for more of the same. At what point do we as citizen realize that solutions to our problems do not lie at the end of a tax form, but at the end of a P&L statement. Give someone entrepreneurial incentive to take risks with chance to make a fair and reasonable profit, and our society will benefit as a whole. Imagine the advanced society we would be living in if much of the trillions in tax dollars wasted over the last 50 years trying to solve problems were instead made available to the marketplace via the people who earned it. Private investment without the burdens of excessive taxation, regulation, and oversight would spark innovation, research, and create new markets in energy and energy production.

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  23. Roger #8

    The gov't built most of those things at great cost. I think Fleming might object to you referring to his discovery of penicillin as directed research. The US gov't also spent billions trying to develop a nuclear airplane.

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  24. Billions of public funds have already been spent on alternative energy generation. I think there's a National Laboratory in Boulder devoted to the area. Additional billions on development of improvements for existing energy generation methods and systems. Some of the latter on nuclear power systems. There's a National Laboratory in Pittsburgh devoted to coal. There's a National Laboratory in Idaho devoted to nuclear energy. Oh, and fusion gets tons o' money at a place in California.

    In addition to these devoted facilities, there have been uncountable numbers of other focused research programs and Centers of Excellence involving private industry, universities, and national laboratories. And most recently, the Federal Government has been making loans of money to focused research areas.

    It's not for the lack of money, IMO. The problem is somewhere else. Let's see, what could that be? Maybe a product or service that's just as reliable and cost effective as those already existing hasn't been produced yet. Maybe politics plays a large part.

    eric144 @ 16

    Oh, that explains Windoze.

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  25. Windoze huh? There was a sign on the lawn at a drug rehab center which said: "Keep off the Grass".

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  26. I'd like Craig, Mark B. (the other one ;-)), Eric, etc. to answer this question:

    "...suppose the U.S. government were to spend $5 billion a year for the next 10 years on developing liquid fluoride thorium reactors (LFTRs). Don't you think that $50 billion would result in much more rapid development of LFTRs than would otherwise occur?"

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  27. markbahner-

    I don't know much about the cost effectiveness of LFTR's now or ten years from now, no matter what the investment from govt or private capital sources.

    I remember back in the 60's when the rage was the SST. Boeing, with Nasa funding, was developing it's prototype in competition with the British French partnership. Eventually Nasa pulled out and Boeing folded, would not continue on its own. The British French partnership was a matter of national pride and neither wanted to be the one to say stop! Concorde was a beautiful aircraft and applauded by all. One problem, it was a total financial failure. The size of the investment doesn't guarantee success even if it comes from public sources. There is a lesson to remember from the SST experience when the commercial viability was not endorsed from the competitive arena. Just my opinion.

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  28. "You guys are great ;-) Well, I could be wrong, and there might be no hope for technological progress in low-carbon energy. If you guys are wrong, you might appear on a list like the following:

    1. “There is no reason anyone would want a computer in their home.” — Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC), maker of big business mainframe computers, arguing against the PC in 1977."


    Roger - this is truly embarrassing. So your logic is "They said it couldn't be done in the past, therefore all things can always be done in all cases?" How far would that fly in an undergraduate philosophy class?

    Your faith in technological rabbits-from-hats tricks is certainly greater than I imagined.

    The fact is, of course, that we put a man on the moon because it was known that it could be done - there were no unknown scientific problems to solve, just engineering challenges. JFK didn't propose that we build a teleporter or a telepathy machine - he asked for a challenge that could be accomplished.

    All technological challenges are not created equal, and all do not have but-for-the-money solutions. Batteries, wind and solar power are not new technologies. The low-hanging fruit has been picked, and unless you want to bet the farm on blind faith, there is no reason to think that there will be any fundamental breakthroughs any time soon. And new nuclear reactors? Try getting them past today's NIMBY/eco-paranoiacs.

    And Roger - you have no idea as to my ideological affiliations. I suspect that my environmental activism started when you were still in short pants. That doesn't make me a fool.

    Coal and oil are used for a reason - they are energy-dense. No amount of money will squeeze orders-of-magnitude more horse-power out of energy-thin wind or sunlight. Cool science-fiction machines are not waiting for government pay-masters to build them.

    The numbered list above is the equivalent of big lottery winners telling how they won the big money with their lucky numbers. Post hoc wisdom is a game anyone can play, and one that serves no purpose. Of course, there were ten thousand similar predictions, and nine thousand nine hundred and ninety were wrong. You've cherry-picked winners and generalized them as you see fit. If you can do that, certainly you can make a killing on Wall st or in Las Vegas. But then, in the real world, you need to predict winners, not pick from them after the fact.

    I've been waiting since the Nixon administration for the cure for cancer. How did that technological challenge work out? Nixon's problem was that unlike JFK, he chose a challenge that wasn't guaranteed to fall when money was thrown at it.

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  29. http://4.bp.blogspot.com/_-uualVqzFPk/S7e_YfHdX2I/AAAAAAAAAIw/zhnzHf5Wqlc/s1600/EIA+World+Supply.jpg

    Taking that into consideration plus the land export model I'd say thinking technology is going to miraculously save the day is a bit naive. The EIA is also notoriously optimistic.

    understanding the economic implications of what this means also goes a long way towards understanding what is coming

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  30. @ Roger #15

    well despite technological advances US domestic oil production is about half its peak today and continues to decline

    not a single oil field on the planet has ever been able to be brought back after its peak no matter what tertiary techniques have been applied and when they have been used from the beginning when a field is exploited have resulted in basically zero extra volume and world record steep decline rates---> see the North Sea and Cantarell for example

    oil field discovery has been lagging production and demand since the late 1960's.....

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  31. -30-carl

    You write "despite technological advances US domestic oil production is about half its peak today and continues to decline"

    I suppose I'd say instead, "because of technological advances US domestic oil production is about half its peak today and continues to decline"

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  32. Interesting comments here, no doubt.

    For those who think that fossil fuels will forever remain cheaper than alternatives, I disagree.

    For those who believe that directed investments cannot accelerate innovation, I disagree.

    But perhaps we have witnessed the end of technological innovation in the energy sector in our lifetimes. Somehow, I doubt it;-)

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  33. @#30

    except it hasn't been the case and oil field production history across the globe indicates this, so does basic physics and geology

    you can only force the oil out based on pressure and permeability of whatever the oil is trapped in......you hit a natural wall of diminishing returns when you get to the halfway point......at that point nothing can be done to raise production

    US domestic oil after the "oh crap" moment of the early 70's(where Hubbert was found to be deadly accurate) which saw a world record spike in drilling activity proved this. Plus they also learned the heard way that trying to overdrive a well or field also can permanently damage the field. There's that nasty physics again. US oil production since then has relied on the tried and true typical method of using water to force the oil out. The water cut in the US these days is up around 99% !! In other words you get 1 gallon of oil for every 99 gallons of water you circulate thru the field. Nothing high tech about it.

    The US literally gets big portions of its oil from a whole bunch of stripper wells from very very old declining oil fields using 40 year old technology.

    Every super giant oil field ever found is in decline......in order to meet the expected future demand in the next 30 years the world would have to find about 6 Saudi Arabia's and get em into production quicker than is even possible. The bulk of our current oil comes from dying fields already in decline.

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  34. fossil fuels won't remain cheaper, but as they cross paths price wise the leverage also drops accordingly......an exponential wall of diminishing returns

    directed investments can help, but they can't violate the laws of physics

    no we have not seen the end of tech innovation but once again you still can't violate the laws of physics

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  35. -34-carl

    I'm all for obeying the laws of physics. Pretty sure I never said otherwise;-)

    Your comments in 33 provide a compelling reason for investments in energy innovation, no?

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  36. Take Fusion - lots of money has gone into tokamaks even though we are pretty sure it is a dead end WRT economical energy production.

    There are altenatives. Polywell, DPF, Field reversed configuration, but the government has effectively shut them out. Polywell is funded by the Navy not the DoE. Field reversed is being done by some x-Microsoft people, and DPF subsists on any loose change it can scrape up.

    Sure the government COULD do more. The problem is agencies get captured and would prefer to avoid competition. What happens to the ITER 50 year plan should the Polywell 5 year plan work out?

    Plasma Physicist Dr. Nicholas Krall said, "We spent $15 billion dollars studying tokamaks and what we learned about them is that they are no damn good."

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  37. 1. “There is no reason anyone would want a computer in their home.” ...

    2. “We will never make a 32 bit operating system.” — Bill Gates

    3. ...

    4. “There is practically no chance communications space satellites will be used to ...

    5. ...


    Roger,

    All of what you point out is 100% true. And those are all wonderful and useful technologies. However, none of that would have been the slightest reason for the Abraham Lincoln administration to dedicate funds (scarce resources) to pursue any of those wonders.

    There are enormous, gigantic, double huge market incentives to come up with a reliable electric generation technology that produces power at a lower cost than fossil fuels.

    Since that is the case the government should stay out of the way. Markets processes are very very good at finding the lowest cost solutions. Political processes are very good at directing benefits to supporters or constituents. As long as senator Byrd is appropriations chairman you can be certain that whatever alternative technology is being developed in West Virginia will get funding regardless of its merits as an energy source.

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  38. sure, but it would be far better spent getting ready for what replacing oil with something that has 1/10th the energy density which is what we face using alternatives

    this means that whatever assumptions people have about our current lifestyle and way of life need to be thrown out the window cause they simply are not feasible with alternatives

    we are not going to power 250 million cars or the incredibly profligate housing we use or convert oil into food

    These are huge problems, thinking innovation is going to make the physics involved go away or the conclusions it forces on the situation change is naive. Innovation won't deal with the basic psychology of man either. Fundamentally this is a social problem not a technological one. Energy could be unlimited and man would still over consume what the planet provides even faster right into a die off situation. Energy is limited though and man is still doing the same. This is a social problem. The forced realization of finite and very limited and dwindling energy supplies carries some very severe penalties and consequences. The gap between alternatives vs what we enjoy now is bigger than what can be bridged using alternatives. In other words consumption is going to come down and it is going to come down rather drastically. Nothing wrong at all with pursuing alternatives with all due haste, but it is vitally important to understand what can and cannot be done and where we can go with this. This means had better start investing in a lifestyle that will survive the transition because little of we do now is going to make it thru.

    You seem as others do to always imply that technology can solve our problems, it can't. It isn't even close. Oil production is limited by physics no matter what technology is brought to bear. All mined resources are. Technology doesn't address man's long history of zero foresight either. Man typically simply cannot fathom dwindling resources and energy, it's the way we are wired. This must be overcome.

    Is all this insurmountable? nope, wanna see what part of our future looks like? take a look at Cuba and look up their history.

    When the USSR fell apart all their client states lost their shipments of oil with about 30 days warning. They survived but people starved, Cuba is now far different than it was before. We face a similar but slightly slower transition but not only on a far grander scale but the change in our energy consumption is ten time bigger. Dwindling oil production and the land export model puts us on a collision course of exports to us being cut off in around 25-30 years. How well or easy do you think it will be to go from 20 million barrels of day of oil to 4 million barrels per day in that time frame? Do you grasp what this means and implies?

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  39. -37-Abdul Abulbul Amir

    Thanks for your comment.

    There are two objections to the argument that governments can manage innovation in particualr directions. One has to do with technology and the other with government. Here you focus on the latter.

    Your description of markets and governments is fine. At the same time we have hydroelectric dams, interstate highways, aircraft carriers, launch vehicles, the internet, nuclear power, solar power, vaccines, etc. etc. etc.

    So regardless of theory or ideology, governments can and do direct innovation in particular ways, and it shapes outcomes.

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  40. -38-carl

    Thanks for the comment. No, I don't subscribe to the more apocalyptic views of peak oil (or peak energy).

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  41. (1) hydroelectric dams, built by the government for public use of electricity. The really huge ones were make-work projects. None could be built today.
    (2) interstate highways, built by the government, under a federal mandate partially based on defense, for public use. Probably couldn't be built without governmental eminent-d0main power.
    (3) aircraft carriers, built by the government ( and explain to me how these things aren't sitting targets )
    (4) launch vehicles, built by the government, but originally not for public use / applications. Oh, and The Space Shuttle Program has been a debacle compared to the original plans.
    (5) the internet, built by the government, but originally not for public use
    (6) nuclear power, originally built by and for the government for defense purposes. Basically a failure in the USA, with the exception of aircraft carriers and submarines ( also built by the government ).
    (7) solar power, continues to be a failure after more that 5 decades of promises
    (8) vaccines, I'll have to pass on this one
    (9) energy policy in the USA after over 3 decades of life for the Department of Energy. A complete failure. Basically a debacle.

    I think we are at the intersection of the energy and environment political footballs and climate change is the sledge hammer that will be used to ensure that our so-called energy policy will forever be subservient to our so-called environmental policy. But only so long as the net votes of the public fall the right way.

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  42. @39

    Roger,

    It is not that government is incapable of shaping innovation. It can. It is just that things that markets can do well will be done at lower cost and thus a higher standard of living for everyone than if those things were subject to the pork barrel political process. We have to live with the government we have not on with the vision and sacrifice we would like it to have.

    I could be wrong, after all the Soviets were such a model of innovation, low cost production, and resulting high standard of living.

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  43. -42-Abdul Abulbul Amir

    Thanks, I don't think that we disagree. Just as I am not advocating violating the laws of physics, I also am not advocating a Soviet model of innovation;-)

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  44. "(6) nuclear power, originally built by and for the government for defense purposes. Basically a failure in the USA, with the exception of aircraft carriers and submarines ( also built by the government )."

    If nuclear power is "basically a failure in the USA," why is it providing ~20% of the electrical energy generated in the U.S.?

    http://www.nei.org/filefolder/US_Nuclear_Generating_Statistics.xls

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  45. "this means that whatever assumptions people have about our current lifestyle and way of life need to be thrown out the window cause they simply are not feasible with alternatives"

    "is all this insurmountable? nope, wanna see what part of our future looks like? take a look at Cuba and look up their history."

    Whenever people make ridiculous claims, I'm always interested in figuring out whether they truly believe what they claim.

    Per Wikipedia, Cuba's per-capita GDP is approximately $10,000 (PPP), and the U.S. per-capita GDP is approximately $45,000.

    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

    How would you like to bet anywhere from $1 to up to $50 per year for 2010 onward, that the U.S. GDP will be below $40,000 in that year? The value will be determined by the average value given in Wikipedia. If that value is below $40,000, I lose; if the average value is above $40,000, you lose.

    To make it worth your while, I'll give you 10-to-1 odds. That is, if the bet is $50 and you lose, you pay me $50. But if I lose, I pay you $500.

    This bet can continue as long as you like, except that whoever is ahead, on net, can't stop the bet. Only the person who is behind, on net, can stop the bet.

    How about it?

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  46. "If nuclear power is "basically a failure in the USA," why is it providing ~20% of the electrical energy generated in the U.S.?"

    Nuclear power is basically a failure because it provides only ~20% of the electricity in the U.S.

    ReplyDelete