I regularly get friend requests for LinkedIn and Facebook (I'm still dabbling with Google+). One thing that neither of these sites have is a "landing page". I'd like to have a web presence that lets me state my rules of accepting their connection. Of course, none of these sites offer this because the strong social pressure to accept all links is part of the reason that they have grown as successfully as they have. The fact that there is no good way of rejecting someone, other than ignoring them, is great for Facebook, but bad for me.
So - this posting is meant to resolve this. I am being very selective on my social networking, and I have been since starting on LinkedIn. In order to connect with you I'd like to know you well enough to ask a favor of you. At a minimum this means that we have to have met. Most likely it means that we have had a conversation long enough so that in six months I can contact you and remember exactly the context in which we met.
Since I use LinkedIn mostly as a means of being introduced to people, if I don't have a strong connection to my primary links, I find I have no social capital to ask for introductions to their links, and so the primary link is pointless. Therefore, this isn't a beauty contest of who is "worthy" to be connected to me; it's just that, if I don't accept your invitation, I don't feel worthy of asking you for favors in the future.
Thanks for your understanding.
Thursday, November 24, 2011
Thursday, November 17, 2011
The Gates Notes
Bill Gates had a really good writeup on the need for energy storage and what we're doing at Energy Cache. Check it out.
Saturday, September 17, 2011
Why Hubbert’s Peak May Not Happen, and Why That Misses the Point
I was asked by one of the executives at Idealab to comment on today's Wall Street Journal essay by Daniel Yergin, entitled "There Will Be Oil". I'm currently reading his book, The Prize now; unfortunately, I thought very little of his essay. Here's what I wrote:
What a disgraceful, sensationalist, condescending, collection of half-truths! The first half was inexcusable, and the second half was simply bad. The author is partially correct in some areas, but for all the wrong reasons, and his final conclusion is simultaneously wrong, and irrelevant.
Why Hubbert’s Peak May Not Happen, and Why That Misses the Point
Let’s keep something in the forefront of our minds – we care about the future price of oil. Hubbert’s analysis matters because it predicts rapidly escalating oil prices. Any conclusion which claims that massively increasing oil prices will prevent Hubbert’s peak, misses the point entirely, and is so bafflingly daft as to border upon willful intellectual fraud. We’ll be saved from skyrocketing oil prices as soon as the skyrocketing oil prices arrive and are here permanently. Hooray!
It's true that Hubbert's analysis ignored economics. He took his analysis simply from the geophysics of extraction. However, the economic analysis results in some curious results - literally the physical manifestation of the philosophical argument of "what happens when an immovable object meets an unstoppable force?". In this case, the immovable object is the oil supply and an unstoppable force is the demand for oil.
In both cases, neither force is truly unstoppable. Better technology, especially spurred by higher prices, will shift the oil supply curve. As oil gets more expensive, other means of supply become feasible. We can drill deeper and deeper (and expose ourselves to more Deepwater Horizon type accidents). We can turn a frozen mixture of tar and sand into oil by injecting steam and scrubbing like crazy (not too far removed from recovering oil from a Walmart parking lot in Wisconsin in January – see, two can play the sensationalist game). In the mid-90's I've worked in the oil fields in Canada doing what's called "tertiary recovery". Primary recovery is when the oil flows out of the ground. Secondary recovery is when water is injected into an oil field to push up the remaining oil. Tertiary recovery is when solvent (ie, soap) is injected into the field in hopes of scrubbing the last few drops of oil from the rock walls. Tertiary recovery is done when the value of oil recovered exceeds the cost of scrubbing. But let's not kid ourselves on what the value of oil needs to be for these processes to be economic.
On the other side is demand. People have been arguing strongly for conservation since Carter. Here too, we see oil prices at work. As oil prices rise there is a greater and greater incentive to implement conservation and efficiency efforts. These are now becoming fashionable and practical, but during the Reagan administration (and many times since), it was considered downright "un-American" to even consider conservation. However, the article makes the hilarious claim that increased efficiency, which has barely made a dent in the inexorable growth of oil consumption, will actual cause demand to "slacken" by 2020 - in light of booming growth from BRIC (Brazil, Russia, India, China) countries as well as existing first-world countries.
However, before I address the many fallacies in the article, let's examine what we've discovered. Skyrocketing oil prices will increase supply. Huge leaps in the price of oil will spur efficiency savings, "reducing" demand. So, as soon as we see massive increases in the price of oil, and we'll be saved!
Now, back to the argument that we will all be saved from the calamities of skyrocketing oil prices due to Hubbert’s peak through the benevolent gift of skyrocketing oil prices. What actually happens to oil production, and Hubbert's global peak, depends on the relative elasticity of oil supply and demand, relative to oil prices. Which immovable object and which unstoppable force is truly unstoppable? Which of these global titans will win - is it the Earth's relentless difficulty in providing oil, our our insatiable thirst of consumption?
If the supply-side proves to be stronger - if the Earth absolutely will not provide more oil, regardless of price, then we shall see Hubbert's peak occur. We will see oil production decline regardless of demand. Each new day of decreased production will see further escalating prices. Now, if the demand-side proves to be stronger. If people absolutely will not reduce oil consumption regardless of price. If people will pay any price for oil, then we will not see Hubbert's peak. We will see continued oil production, straining to match the daily rise of oil consumption. This oil production will come from further and further fields, and processes, which only become economic through increased oil prices (as we are seeing with the tar-sands, and tertiary recovery, and some other things the author mentions). We could see a production "plateau" that the author mentions.
So, let’s quickly examine the elasticity of oil supply and the elasticity of oil demand in order to determine which is more likely to bend. As a fun example of oil demand elasticiy, let’s look at one indicator of how strong our demand for oil is. Shown below is the total vehicle-miles driven on all US roads (data from DOT). It shows steady growth, almost doubling in amount, from 1985. The only remote dip occurs due to the greatest economic collapse this country has seen since the Great Depression. The consequences of this collapse? It set us back about 2~3 years. Oh, and we’re back to climbing again. So, we can conclude that oil demand is very inelastic, and unlikely to change much.
So, now we turn to our analysis of the elasticity of oil supply, and at the same time, let’s addess one of the author’s more heinous misdirections. Hubbert's analysis was done with the assumption that oil prices would be reasonably stable. This is why he neglected improved technological means of discovery. Since oil prices have been reasonably stable since the 1950’s the analysis has proven robust. However, with extremely high oil prices will come the economic pressure that drives further expansion. The author claims that
Ignoring the hint that ethanol could save the day (the economic and thermodynamic policy disaster that corn ethanol has been), let’s examine this glorious increase in US production in historical context:
Excellent. So after West Texas Intermediate hit a record high of more than $130/bbl in 2007, the US managed to increase its production to match that of 2003. If only oil prices would hit $2000/bbl, then we’ll be back to the go-go times of the 1960’s and we can all drive cars with fins and big-block V8 engines! It’s pretty safe to conclude that oil supply is very inelastic and huge changes in price are needed to move the needle on oil production.
So, let's look at what has happened - in both cases we see that any increase in oil production, or any decrease in oil consumption require astronomical increases in oil prices, and that's all anyone cares about. I suppose there is a sense of smugness in watching Hubbert's peak not arrive while witnessing $200/bbl oil. But nobody cares about the shape of the curve, we care about oil prices and that's what the author has failed to address.
---
Ok, I was planning on going through the article, paragraph by paragraph, and point out the half-truths, the misstatements, and the childish name-calling, but I’ve got pancakes to make. The only point of this article is, as I see it, to take regulatory pressure off of the oil industry, and to remove pressure (policy or otherwise) from developing alternative energy sources, because we can all realize that “everything will be just fine”. My advice? Buy oil futures. And invest in renewable energy.
What a disgraceful, sensationalist, condescending, collection of half-truths! The first half was inexcusable, and the second half was simply bad. The author is partially correct in some areas, but for all the wrong reasons, and his final conclusion is simultaneously wrong, and irrelevant.
Why Hubbert’s Peak May Not Happen, and Why That Misses the Point
Let’s keep something in the forefront of our minds – we care about the future price of oil. Hubbert’s analysis matters because it predicts rapidly escalating oil prices. Any conclusion which claims that massively increasing oil prices will prevent Hubbert’s peak, misses the point entirely, and is so bafflingly daft as to border upon willful intellectual fraud. We’ll be saved from skyrocketing oil prices as soon as the skyrocketing oil prices arrive and are here permanently. Hooray!
It's true that Hubbert's analysis ignored economics. He took his analysis simply from the geophysics of extraction. However, the economic analysis results in some curious results - literally the physical manifestation of the philosophical argument of "what happens when an immovable object meets an unstoppable force?". In this case, the immovable object is the oil supply and an unstoppable force is the demand for oil.
In both cases, neither force is truly unstoppable. Better technology, especially spurred by higher prices, will shift the oil supply curve. As oil gets more expensive, other means of supply become feasible. We can drill deeper and deeper (and expose ourselves to more Deepwater Horizon type accidents). We can turn a frozen mixture of tar and sand into oil by injecting steam and scrubbing like crazy (not too far removed from recovering oil from a Walmart parking lot in Wisconsin in January – see, two can play the sensationalist game). In the mid-90's I've worked in the oil fields in Canada doing what's called "tertiary recovery". Primary recovery is when the oil flows out of the ground. Secondary recovery is when water is injected into an oil field to push up the remaining oil. Tertiary recovery is when solvent (ie, soap) is injected into the field in hopes of scrubbing the last few drops of oil from the rock walls. Tertiary recovery is done when the value of oil recovered exceeds the cost of scrubbing. But let's not kid ourselves on what the value of oil needs to be for these processes to be economic.
On the other side is demand. People have been arguing strongly for conservation since Carter. Here too, we see oil prices at work. As oil prices rise there is a greater and greater incentive to implement conservation and efficiency efforts. These are now becoming fashionable and practical, but during the Reagan administration (and many times since), it was considered downright "un-American" to even consider conservation. However, the article makes the hilarious claim that increased efficiency, which has barely made a dent in the inexorable growth of oil consumption, will actual cause demand to "slacken" by 2020 - in light of booming growth from BRIC (Brazil, Russia, India, China) countries as well as existing first-world countries.
However, before I address the many fallacies in the article, let's examine what we've discovered. Skyrocketing oil prices will increase supply. Huge leaps in the price of oil will spur efficiency savings, "reducing" demand. So, as soon as we see massive increases in the price of oil, and we'll be saved!
Now, back to the argument that we will all be saved from the calamities of skyrocketing oil prices due to Hubbert’s peak through the benevolent gift of skyrocketing oil prices. What actually happens to oil production, and Hubbert's global peak, depends on the relative elasticity of oil supply and demand, relative to oil prices. Which immovable object and which unstoppable force is truly unstoppable? Which of these global titans will win - is it the Earth's relentless difficulty in providing oil, our our insatiable thirst of consumption?
If the supply-side proves to be stronger - if the Earth absolutely will not provide more oil, regardless of price, then we shall see Hubbert's peak occur. We will see oil production decline regardless of demand. Each new day of decreased production will see further escalating prices. Now, if the demand-side proves to be stronger. If people absolutely will not reduce oil consumption regardless of price. If people will pay any price for oil, then we will not see Hubbert's peak. We will see continued oil production, straining to match the daily rise of oil consumption. This oil production will come from further and further fields, and processes, which only become economic through increased oil prices (as we are seeing with the tar-sands, and tertiary recovery, and some other things the author mentions). We could see a production "plateau" that the author mentions.
So, let’s quickly examine the elasticity of oil supply and the elasticity of oil demand in order to determine which is more likely to bend. As a fun example of oil demand elasticiy, let’s look at one indicator of how strong our demand for oil is. Shown below is the total vehicle-miles driven on all US roads (data from DOT). It shows steady growth, almost doubling in amount, from 1985. The only remote dip occurs due to the greatest economic collapse this country has seen since the Great Depression. The consequences of this collapse? It set us back about 2~3 years. Oh, and we’re back to climbing again. So, we can conclude that oil demand is very inelastic, and unlikely to change much.
So, now we turn to our analysis of the elasticity of oil supply, and at the same time, let’s addess one of the author’s more heinous misdirections. Hubbert's analysis was done with the assumption that oil prices would be reasonably stable. This is why he neglected improved technological means of discovery. Since oil prices have been reasonably stable since the 1950’s the analysis has proven robust. However, with extremely high oil prices will come the economic pressure that drives further expansion. The author claims that
“Overall U.S. oil production has increased more than 10% since 2008. Net oil imports reached a high point of 60% in 2005, but today, thanks to increased production and greater energy efficiency (plus the use of ethanol), imports are down to 47%.”
Ignoring the hint that ethanol could save the day (the economic and thermodynamic policy disaster that corn ethanol has been), let’s examine this glorious increase in US production in historical context:
Excellent. So after West Texas Intermediate hit a record high of more than $130/bbl in 2007, the US managed to increase its production to match that of 2003. If only oil prices would hit $2000/bbl, then we’ll be back to the go-go times of the 1960’s and we can all drive cars with fins and big-block V8 engines! It’s pretty safe to conclude that oil supply is very inelastic and huge changes in price are needed to move the needle on oil production.
So, let's look at what has happened - in both cases we see that any increase in oil production, or any decrease in oil consumption require astronomical increases in oil prices, and that's all anyone cares about. I suppose there is a sense of smugness in watching Hubbert's peak not arrive while witnessing $200/bbl oil. But nobody cares about the shape of the curve, we care about oil prices and that's what the author has failed to address.
---
Ok, I was planning on going through the article, paragraph by paragraph, and point out the half-truths, the misstatements, and the childish name-calling, but I’ve got pancakes to make. The only point of this article is, as I see it, to take regulatory pressure off of the oil industry, and to remove pressure (policy or otherwise) from developing alternative energy sources, because we can all realize that “everything will be just fine”. My advice? Buy oil futures. And invest in renewable energy.
Thursday, August 18, 2011
What in the world is going on?
I gave a presentation to Idealab today. This was something I prepared when I was at the X PRIZE Foundation in 2009, for a group of manufacturing executives at an MIT conference. I updated the data for what's been happening these past two years.
I am really pleased with the opportunity I had to really dig into finding good data and case studies. I modeled it after Hot, Flat and Crowded by Friedman - a book I can highly recommend.
I should make one correction. When I first put this slide deck together, two years ago, the inputs that I provided to the model at www.climateinteractive.org resulted in a temperature increase of 2.6C by 2100. For some reason when I tried the model recently, I noticed some changes to their page, and the temperature increase was only 1.8C by 2100. This is a huge difference, and I'm going to contact them to see what changes they made to their model that resulted in this difference. What's interesting is that the CO2 concentration is similar in both cases, around 450ppm, so the change appears to be in the temperature calculation from the CO2 concentration.
I am really pleased with the opportunity I had to really dig into finding good data and case studies. I modeled it after Hot, Flat and Crowded by Friedman - a book I can highly recommend.
What in the world is going on web
View more presentations from afyke.
I should make one correction. When I first put this slide deck together, two years ago, the inputs that I provided to the model at www.climateinteractive.org resulted in a temperature increase of 2.6C by 2100. For some reason when I tried the model recently, I noticed some changes to their page, and the temperature increase was only 1.8C by 2100. This is a huge difference, and I'm going to contact them to see what changes they made to their model that resulted in this difference. What's interesting is that the CO2 concentration is similar in both cases, around 450ppm, so the change appears to be in the temperature calculation from the CO2 concentration.
Monday, May 16, 2011
House Renovation
I've been in the joys of house renovation for the past few months. It's been a great opportunity to start with a fresh sheet of paper and radically improve the efficiency of its subsystems (HVAC, insulation, lighting, etc). I've also taken to installing the network infrastructure for the house (which is interesting, given the obsolescence cycles of the computer/networking industry). I'm going to list good vendors that I've worked with, occasionally, in upcoming blog posts, but the first one is Optimized Cable Company (www.optimization-world.com). They were a handy source of cheap, quick networking components for the home.
Sunday, March 06, 2011
Flipboard and Content Creation vs Consumption and the rebirth of Facebook
Thanks to my recent success at the Tech Coast Angels event, I find myself with a new iPad (version 1). I had been wanting an iPad for some time, but could never quite justify the purchase. Since I ended up with one, I've enjoyed using it. And, thanks to the iPad, I've discovered something remarkable.
I've been a Facebook user since mid-2007. I should write an entire blog post on my initial love affair with Facebook and then my slow decline. I remember my first purging of (non-)friends, my first set of rules for directing work-related invites over to LinkedIn, my first concerns over privacy, my concerns over Facebook's dismissive attitude of privacy, my long period of absence, where I still had my Facebook account, but never logged in, and then finally my eventual joining of the many others who either suspended, or canceled their accounts entirely. I haven't been a serious Facebook user since mid-2009.
So what caused me to come back? In a word - Flipboard.
Flipboard has solved a dilemma I have had with Twitter and Facebook for a while. That is, I like to use this blog to project information, but I like to use Facebook and Twitter to consume information. By placing this information in the format that Flipboard does, I find it far more engaging than the chronological scroll-information-dump format that either Facebook or Twitter defaults to.
Adding Reddit was a lot more involved (see link) but I really see this as a great tool. I can't remember where I read it, but laptops are great for content creation and iPads (and the like) are great for content consumption. Apps like Flipboard really show why this is so.
So what caused me to come back? In a word - Flipboard.
Flipboard has solved a dilemma I have had with Twitter and Facebook for a while. That is, I like to use this blog to project information, but I like to use Facebook and Twitter to consume information. By placing this information in the format that Flipboard does, I find it far more engaging than the chronological scroll-information-dump format that either Facebook or Twitter defaults to.
Adding Reddit was a lot more involved (see link) but I really see this as a great tool. I can't remember where I read it, but laptops are great for content creation and iPads (and the like) are great for content consumption. Apps like Flipboard really show why this is so.
Thursday, March 03, 2011
Energy Cache Triumphant at TCA Pitch Event
It's great to be receiving this recognition from the Tech Coast Angels as this pitch event is a premier event in Southern California's technology scene. What's particularly gratifying is that the competition, at this level, was extremely talented, and so to actually take away the top prize is a real privilege.
Energy Cache is an early stage technology company, backed by Pasadena incubator, Idealab. Our extremely low-cost energy storage solution improves grid reliability, better manages the transmission network, and enables wide-spread adoption of renewable energy at the lowest possible cost to consumers.
Energy Cache was founded to provide a solution to the grid's problem of increased volatility. Mass adoption of renewable energy, the fact that peak demand continues to grow faster than average demand, and the fact that it is getting harder and harder to build transmission lines, is really driving the need for energy storage at a very large scale. Without storage, these problems will be solved the way the grid has always solved problems - by building more capacity and putting in greater capacity margins. This will result in far greater electricity prices than without storage. There are a whole bunch of other advantages for storage, which I'm pretty excited about, but this boils down to building the grid that we need for the future.
Idealab's mission is to create and operate pioneering technology companies. Founded in 1996 by entrepreneur Bill Gross, Idealab has founded more than 75 companies including eSolar, Inc., Energy Innovations, Overture Services, Inc., CitySearch, Picasa and Internet Brands. Current operating companies are providing innovative technology solutions in industries such as software, search, robotics and alternative energy fields.
So, congratulations to the other finalists in the competition, and thank you to the Tech Coast Angels for putting on the event!
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