Energy Futures: The CTL/EOR Couplet

There has been much commentary on peak oil and rising crude oil costs in the near future. In fact, there seems to be a general anxieity about the future supply of energy. For the Polymath, the consideration of Energy Futures will at a minimum, involve demographics, Economics, technology and energy resources. Peak oil alarmists, such as Matt Simmons, are not wrong in their analytical techniques. They are wrong in their scope of considerations. Matt Simmons draws the very correct conclusion that if oil consumption patterns continue and no ‘unconventional’ oil or fuel switching opportunities present themselves, we are headed toward a persistent and economically devastating oil crisis.

However, a Polymath, asking the general question, ‘What will energy supply and demand look like in the future’ ignores subject and industriy boundaries to pursue a comprehensive answer. Because of this, when Matt Simmons was predicting $500 oil, we were predicting $85 oil. As oil prices ran up to nearly $150 per barrel subsequent to the predictions of Simmons, et al, we stuck to our guns and continued to state without equivocation that oil would oscillate around an $80 to $85 per barrel price. The more polymathic approach proved to be correct. It generally will.

A full consideration of Energy Futures is well beyond the scope of this article. However, because of its pervasive effects on the shape of future world economies, it is considered by the Polymathica Academy within the course work of The Future 101. Put simply, a superior knowledge of futurity is one of the benefits of Polymathica Institute Fellowship. Here we will consider the twin opportunities of Coal to Liquid (CTL) and Enhanced (tertiary) Oil Recovery (EOR) Technologies. We will do so, because its impact is imminent and the technologies are fairly well developed. It shapes the near future in several ways and is not particularly susceptible to claims of unwarranted and overly optimistic speculation.

Coal Liquefaction has an estmated cost between $30 and $45 per barrel. Its first use was by Nazi Germany when the Allied Forces interfered with their access to petroleum. It is currently implemented in commercial scale operations in South Africa. Because China has large coal reserves and very little oil, it is under active development there. The potential supplies of CTL oil equivalents are huge. U.S. Coal reserves are equivalent to approximately 4,116 billion barrels of oil. This compares to world oil reserves of approximately 1,365 billion barrels. Consequently, the U.S. alone has more than three times the oil reserves of the world with this technology.

The criticism of CLT has been that it produces approximately twice the CO2 as conventional oil production. Environmental interests are insisting that if this technology is deployed, it must be done with CO2 sequestering. The sequestering process adds to the cost and reduces industry and investment interest in the technologies. There is, however, a much better and undoubtedly feasible solution.

This brings us to CO2 Enhanced Oil Recovery (EOR), a method by which up to an additional 50% of the oil recovered through primary and secondary oil recovery methods can be recovered. A DOE review of just six regions concluded that they contained 43.3 billion barrels of additional reserves utilizing this method. From this, it is estimated that the onshore reserves of the U.S. are 89 billion barrels. The upside estimates are as high as 240 billion barrels of stranded oil that can be recovered in the U.S. alone by this method. Costs vary, however, the DOE funded study, dated February 7, 2008, estimated typical costs in the $45 - $55 per barrel range. Again, we emphasize that this is not speculative technology. It has been used on a limited basis since the 1960’s.

There are a couple of important considerations in determining the practical impact of the CTL/EOR couplet. One is the issue of how many barrels of oil can be gotten in EOR from a barrel of CTL. The answer limits the total production by this method that does not require CO2 sequestering of CTL production. Estimates vary between two and three barrels of EOR that can be produced from the CO2 created by liquifying coal to produce one barrel of oil. What this means is that, by the upside estimate, we have 80 to 120 billion barrels of CTL and that this will recover 240 billion barrels of EOR. The additional 320 to 360 billion barrels of U.S. oil is more than the oil reserves of Saudi Arabia and would make the U.S. the number one oil producer in the world. Even by the estimate of 89 billion barrels, based upon no technological advancements in the processes, the CTL/EOR couplet increases U.S. oil reserves from 21 billion barrels to 140 to 155 billion barrels. This would place it behind only Saudi Arabia and Canada in oil reserves.

While the U.S. has, by far, the greatest potential for increased reserves through CTL/EOR, other regions, most notably Russia and Venezuela also have significant exploitable reserves. Consequently, rather than a impending oil crisis and price run-up, in reality, the world oil market has a massive supply overhang below $100 per barrel, and probably below $80 per barrel. In other words, if the price of oil remains above $80 per barrel for a sustained period of time, the CTL/EOR Couplet will become progressively more commercialized, placing downward pressure on oil prices. In this way, the conventional oil supply and the CTL/EOR oil supply will find a dynamic equilibrium between $75 to $85 per barrel. We emphasize that there will be price shocks both above and below this price range as markets speculate in advance of short term supply/demand disequalibria. From there, the price will fall to around $55 to $65 per barrel over the next twenty years as consumption per GDP dollar decreases, demographic shifts impact consumption and other oil supply and fuel switching opportunities become economically and technologically feasible.

This is just one small example of how practiced Polymathy leads one, over time, to a different and more informed world view. None of the preceding is unavailable to the mainstream media. Its significance, however, is not properly appreciated and communicated because it runs counter to a world view fabricated from compartmentalized pieces of information. This is a temporary situation and recent publications, such as the 2008 DOE piece will allow the opportunity to slowly diffuse into the public awareness. We strongly encourage the serious Polymath to follow the links in this article, especially the 2008 DOE study, to gain a more complete understanding of this issue.

A Finely Crafted Life

In our previous post we spoke about the Information Age Income Explosion that is being instigated by the implementation of advanced robotics and artificial intelligence technologies. Not only will this cause incomes to, at least, quadruple over the next twenty years, it also will take much of the drudgery out of the work experience. We expect that the typical work week for the knowledge class may fall to between 25 to 30 hours. The combination of affluence and leisure will cause members of the knowledge class to progress through Maslow’s hierarchy and, over time, develop a culture of self-actualization. From this, we introduce the idea of ‘A Finely Crafted Life’.

The analysis and pursuit of a finely crafted life is a distinctly Information Age way of thinking and, as such, is far from fully developed or even well explored. We begin with the concept that life is experienced through various modalities. Each person, based upon their unique character, has a specific preference as to the degree to which they want to experience life through each modality. When a modality is under-experienced a person feels unfulfilled. When a modality is over-experienced a person feels harried. A balance between actual and preferred modalities creates a sense of self-actualization.

We propose a preliminary list of life experience modalities, in alphabetical order, as follows: Aesthetic, Creative, Intellectual, Kinesthetic, Procreative, Productive, Sensual, Social, Spiritual and Status. A Finely Crafted Life is a highly personalized thing. One person may need a very high expression of the Aesthetic in order to be fulfilled, while a different person may need little there but will need a significant expression of the Intellectual. Therefore, A Finely Crafted Life begins with self knowledge. Which modalities are personally the most important and which need only be experienced to a minor degree? From this self knowledge, one can consider how appropriately each is currently being expressed and what strategies may facilitate a more accurate expression.

You will note that we do not refer to balancing work and personal life. These are activities that, to varying degrees, provide opportunities to experience one or more modality. In other words, a well selected job can fulfill Intellectual, Productive, Social, Status and Creative modality needs. We readily admit that, in the Industrial Age, work was an especially important activity, since it enabled or limited one’s ability to engage in other activities that satisfied various modalities. However, if a job is highly enabling (pays well) one can come to ‘need’ their job. However, if one like’s one’s job, it is because it satisfies the modalities that are important to the individual. While work will be essential to membership in the knowledge classes, its emphasis will decrease for most people.

As the profoundly affluent knowledge class emerges, their members will begin to focus more directly upon how to craft a life that provides them with their unique distribution of modality desires. Those with a strong productive need will find productive activities. Those with a strong intellectual need will spend time learning. Because Polymathica is defined as a global community of refinement and erudition, there will be a distinctive slant to what most of its Members consider to be a finely crafted life. Certainly we would expect a greater emphasis on the modalities of Intellectual, Creative, Aesthetic, Spiritual and Status than the general population. In one interpretation, we would expect to be able to define the culture of Polymathica, using the cultural calculus, as a generalized factor within the definition of a finely crafted life.

Because we all will live the rest of our lives in the future and Members of Polymathica will be among the first to enter the knowledge class, younger Members should fully consider how they will want to prosecute their life and what, to them, is meant by a finely crafted life. As more seasoned Members consider how they wish to transform their lives through Membership, they should be fully cognizant of the principles of a finely crafted life. Because the Industrial Age was not particularly friendly to people of refinement and erudition, there will probably be significant opportunity for improvement.

The concept of a Finely Crafted Life will be one of several persistent threads that will define Polymathica and permeate our discussions of it. We suggest the following exercise. Using a spreadsheet, list each of the ten modalities across the top and assign to each a value between 1 and 10 describing how important it is to you. Now list each activity that you engage in that contributes to your experience to each modality. Rate it on how much it contributes to each modality. This worksheet will provide a structure with which you can consider strategies for transforming your life.

The Cultural Calculus: An Example of Polymathic Methodological Transfer

Psychologist Charles Spearman hypothesized that for every intellectual task the performance of an individual is determined by traits specific to the task (s) and traits general to all or most intellectual tasks (g). Suppose we chose 100 people at random and gave them a test on number progressions. A performance rank order would result. Now suppose we gave the same 100 people an analogy test. There are three distinct relationships the two results could have to one another.

The first is that they are inversely correlated. In other words, a person who scored in the top 50 on one test would have a greater than random chance of scoring in the lower 50 on the second test. This is the constant intelligence theory that says that everyone has about the same amount of intelligence and if a person is better than average in one task it is because they are applying more of their intelligence to it. Consequently, they have less to apply to other tasks and they can be expected to score below average on those tests.

The next theory is the random theory. In other words, g=0 and all the proficiency a person has in a specific intellectual task is related to traits that only affect that intellectual task. If Spearman is correct, the rank order of a person on one test will have predictive value on the other test. The greater the predictive value the more g dominates the explanation of intellectual performance.

The problem of determining the predictive value between many tests was a difficult one and Spearman developed Factor Analysis to deal with it. It turned out that Spearman was correct. In fact, it turned out that g explained most of the difference in intellectual performance between people. Thus, a new and more rigorous definition of IQ was born. IQ is a measure of g, which is extracted from the results of questions diagnostic of many types of intellectual tasks.

Factor Analysis has been utilized polymathically in geochemistry, ecology, hydrochemistry and economics. Marketing analysis has used a simpler form by creating correlation matrices. Here we are going to give an example of an intentional rather than accidental use of polymathy to develop a Cultural Calculus. In doing so, we will provide a theoretical basis for a new way to evaluate history, understand the present and contemplate the future.

Suppose we gave a number of people a questionnaire that explored their attitude toward abortion. We could then assign values to each person with 1 representing someone who believes that abortion should be illegal in all circumstances and that anyone involved in an abortion should be considered to have committed or been accessory to murder and 100 representing someone who believes that abortion should be legal at all points in a pregnancy and, nobody, including the father or the courts, my abridge that right. We would expect that this questionnaire would result in a bimodal population if plotted on a graph where the x axis is the value between 1 and 100 and the y axis is the number of people with the specific rating. We would expect the left mode to be represented by people who believe that abortion should be illegal except in the cases of incest or rape or to save the life of the mother. The right mode, we expect would be centered on people who believe that abortion should be legal in the first trimester of a pregnancy.

Now suppose we gave the same people a questionnaire that explored their attitude about welfare. We, again, would expect a bimodal population with one group centering around a view that welfare should be limited, locally administered and with significant assistance from the philanthropic and religious communities and the other group centering around a federally mandated suite of government entitlement programs.

Let us expand our graph to three axes, with x being the rating on the abortion scale, y being the rating on the welfare scale and z being the number of people at each particular (x,y). We believe that now we will find a conical mound centering around those who take a low numbered position with regard to both abortion and welfare and another centering around those who take a high numbered position to both. We are not sure whether those not among the two major nodes will be evenly distributed or if there would be one or more smaller nodes. Some people might argue that the graph would have more than two modes. Others may argue that concentrations would be small and the majority of people would reside on a 100 X 100 plane of relatively little topography. We are unaware of any studies of this nature and, consequently, the disagreement cannot be definitively resolved.

Since very few people can visualize hyperdimensional objects, we are going to add one more questionnaire and then stop. Now we will include a questionnaire on the degree to which government should abridge the freedom of action of citizens and enterprises for the sake of preserving the ecological status quo. At the low end will be people who believe that the government has no right to abridge such actions at all and on the other extreme are people who believe that the government has an absolute obligation to proscribe and assess fines for any act that may disturb the current environmental conditions. Now, since we need the z axis for our third questionnaire, we will need to do this a little differently. We will make a volume comprised of 100 X 100 X 100 = 1,000,000 cubes each of which represents one unique (x,y,z) and capable of holding many dots. We believe that this exercise would render two very dense centers surrounded by a halo of loci of decreasing density as the radius from the center increases. For those familiar with astronomy, it would look like two globular clusters, one centered around moderate positions in favor of abortion, welfare and environmental restrictions and one that centered around moderate positions against abortion, welfare and environmental restrictions. Again, we are unsure whether there would be smaller clusters at different locations.

We can imagine that the same questionnaires are given to a statistically valid and consistent group of people over time. We now can see our concept space evolving. Perhaps clusters will become more dense or less dense. Perhaps a piece of a cluster will break off and travel to a different locus, picking up members as it goes. Perhaps portions of our concept space will develop a new attractor and start growing and increasing in density spontaneously. Perhaps we can see the distance between the two major clusters become closer or farther apart. In other words, we will be watching a movie of cultural fragmentation, coalescence and evolution.

Of course, Cultural Analysts, well versed in the more complex mathematical methods required to extract meaning from a larger number questionnaires will take this several steps further than we will here. They will create hyperdimensional models that will move, transform and evolve in ways that can only be approximately represented in three dimensional models. Using factor analysis, they can create a kind of central definition of culture, perhaps extracting central or core factors that define each culture. Even though not easily visualized, characteristic statements, then, can be made about the conformation of the concept space and how it has changed over time.

Not only is this an example of methodology transfer being utilized in the Polymathic Method, it also allows us to provide a more complete explanation of the meaning of Polymathica. If questionnaires were given to people to assess their sense of refinement and erudition, we consider it obvious that few people would find themselves in the 90’s on a scale of 1 to 100. Most of civilization has become rather crass, crude, hedonistic, vulgar and anti-intellectual. Consequently, Polymathica is creating an attractor at one end of the refinement and erudition dimensions of concept space that, we hope will begin to grow through accretion and become more defined through shared cultural literacy.

This post also gives us a common pattern language with which to discuss issues of culture.