GLOBAL RESOURCES ANALYSIS
SOLUTIONS | INSTALLBASE MIGRATION
One of the biggest challenges (and also biggest economic write down) is the needed change of our fossil powered installbase. This means everything that use fossil energy: Cars, trucks, busses, trains, tractors, forklifts, generators, planes, etc, etc. If transition needs to be done in a relatively short time period the much increased write down speed of the complete mobility investments will burden the economy again (after it's already burdened by high energy prices and negative economic growth). The Hirsch Report for US Department of Energy describes this problem extensive. This report concludes that transition has the lowest capital (and therefore economic) damage if transition could take place over a long period of 20 years, and that transition of the installbase will cost severely more if there was only 10 years to transite the installbase the economic damage will be severely, but it could be done, and when there was no time to transite the installbase before PeakOil occurred US DOE said it will lead to economic collapse. As it looks early 2008, by the price rises of oil/gas/coal (and elements and food), and by the still accelerating demand, despites the prices PeakOil is not over 20 years, and not over 10 years, but PeakOil is occurring right now. The Hirsh Report of the US DOE (Department of Energy) can be free found on the Internet in PDF format on http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf. Transition of the installbase is a crucial and big part in addressing the PeakOil caused problems. Economic is will be finding a balance between new investments with lower fuel costs, or keeping old investments with higher fuel costs, for every company and household, for each fossil fueled device present or needed. Write down times will severely be shortened, installbase transition always has its price. Used fossil fueled devices will has severely lower than by investment projected prices. Car lease companies who not anticipate on the value effects by PeakOil needed change of installbase of their fleet, will certainly go bankrupted, because the value of their fleet will be melting as snow in the sun due to PeakOil. This is the reason why renewable energy will become cheaper than fossil energy. Or better said: fossil energy will become much more expensive than renewable energy. The possibility of use of fossil energy in old fossil investments is the reason why the demand of fossil fuel will be still high, even when prices are very high and renewable energy (electrical power) is cheaper. Even when renewable energy is available against lower prices, companies and people will purchase fossil energy because they don't have to buy or invest in new devices. Of course many of the existing investments will be convert to electrical power. Batteries or hydrogen plus fuel cell and electrical direct drive on 2 wheels will be made possible by dedicated car converting companies. Belgium has lowered the fossil fuel tax because of the high prices. This is not right. It will softens the hit, but increases the final damage. Governments must take their responsibilities in proclaiming the need of installbases severely. The best way to do that is by one simple fiscal legislation rule that allows quicker write down (shorter write down period) of fossil fueled investments. Of course energy will be severely expensive than it was in the good old days of cheap fossil energy. Of course the total mileage of commuting and transport will be reduced significant by these new high energy prices. Of course air travel and air transportation will totally collapse due the high energy demands, hydrogen based power would be possible but the energy demand of air travel and air transport is to high in times of severe higher energy prices and negative economic growth. People will not live on a whole year on minimal means just to go on holiday one week a year. Of course videocalling will replace traveling, but the installbase for videocalling is very easy to realize. But maybe new types of low energy airships will come. Other low energy demanding office technologies will find their way into the business world: remote desktop technology is already available, and one step further on that road will give full XML based office data structures. An other big issue for governments to promote. Wise governments stop traffic congestion policies (they will not be needed any more in times of PeakOil) and put the officials and civil servants that worked on that dossier and the already reserved budgets in proclaiming of remote desktop office in times of PeakOil. Mobility and transport seems to be the main problem area in transition, but that's not the truth. All home/office/water heating in the most countries of the world are based on fossil fueled devices. They all must become electrical or hydrogen powered of replaced by other concepts (warmth pumps etc). All houses and commercial buildings will have PV solar panels on roofs and wall, roof rain water storage, waste water recycling, DC networks, power management unit met advanced software, etc.
Author: Gijs Graafland
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