What would be the medium-term effects of long-term cheap oil?

[Quartz]

Imagine someone creates a process to mass-produce oil from CO2 and H2O that is cheap. All you need is energy. Which you can get from your local nuclear reactor / wind farm / whatever.

What would be the medium-term effects of this? A decrease in the importance of the Middle East and the proliferation of nuclear energy are obvious, ditto a decrease in pollution, but what else?

[Der Trihs]

I don't see how it would decrease pollution; whether it comes from the ground or a factory it creates pollution when burned.

As for other effects; it would slow down any attempts to stop the greenhouse effect from wrecking the economy and ecology even more. It would have some uses for creating aircraft fuels and the raw material for plastics and fertilizers, but the damage done would outweigh the advantages IMHO.

[Delayed Reflex]

This is essentially the concept of biofuels (plants turn CO2 and H20 into organic matter using sunlight as the energy source, which we then can turn into combustible fuel). A "mechanical" option of turning CO2 and H2O directly into fuel could be carbon neutral as well PROVIDED that the energy it uses is itself carbon neutral (on a life-cycle basis).

In most cases though, it makes more sense to harness the energy directly - ie. use the energy in the form of electricity rather than use it to generate fuel. The fact is, even if you can somehow find a very efficient process for creating fuel from CO2 and H2O, most of the processes that burn fuel (ie. internal combustion engines) aren't that efficient, so you will ALWAYS be using way more energy to make the fuel than you will in the end get out of it in useful work. Chances are, in the short-medium term it would likely INCREASE overall GHG emissions due to not using your energy efficiently. You may have heard the same thing about corn ethanol - while sunlight is renewable, the fertilizer, harvesting, and processing into ethanol all use energy from fossil fuels.

The only advantage of using energy to generate hydrocarbons is so that it can be used with current infrastructure and technology.

[Wesley Clark]

I don't see how it would decrease pollution; whether it comes from the ground or a factory it creates pollution when burned.

As for other effects; it would slow down any attempts to stop the greenhouse effect from wrecking the economy and ecology even more. It would have some uses for creating aircraft fuels and the raw material for plastics and fertilizers, but the damage done would outweigh the advantages IMHO.

It creates CO2, but that CO2 would just be pulled back out of the atmosphere and turned back into oil at wind farms or nuclear plants which would not produce CO2. So it would be a fairly neutral source of CO2. It would pull out as much as it put back in.

What do I think the effects would be? I think massive economic damage to oil producing nations (obviously) which isn't just the middle east but also the US, Canada, Mexico, Venezuela and others.

I have no idea what effects it would have on political stability in the middle east. With countries like Saudi Arabia, Iraq, Kuwait or Iran not able to rely on oil revenues, domestic unrest could increase. I don't know if that would be a good thing or a bad thing.

[Quartz]

This is essentially the concept of biofuels

No it isn't.

In most cases though, it makes more sense to harness the energy directly - ie. use the energy in the form of electricity rather than use it to generate fuel.

Electricity has the problem of transmission losses and lack of storage facility.

The fact is, even if you can somehow find a very efficient process for creating fuel from CO2 and H2O, most of the processes that burn fuel (ie. internal combustion engines) aren't that efficient, so you will ALWAYS be using way more energy to make the fuel than you will in the end get out of it in useful work.

This is not relevant. My OP postulates power + H2O + CO2 = Oil. Yes, it won't be 100% efficient, but we're getting the power from nuclear, wind, solar, whatever, not coal or oil.

Chances are, in the short-medium term it would likely INCREASE overall GHG emissions due to not using your energy efficiently.

I disagree, but anyway I'm asking after the medium term, not the short term. All those nuclear reactors and wind farms are going to take time to build.

[Quartz]

I don't see how it would decrease pollution; whether it comes from the ground or a factory it creates pollution when burned.

As for other effects; it would slow down any attempts to stop the greenhouse effect from wrecking the economy and ecology even more. It would have some uses for creating aircraft fuels and the raw material for plastics and fertilizers, but the damage done would outweigh the advantages IMHO.

But it's carbon neutral. You're taking CO2 from the air and turning it into oil, which then gets burned and goes back to CO2 in an endless cycle. Yes, some CO2 will be emitted by the other parts, but that will be minimal, and more than offset by the carbon not emitted by burning fossil fuel deposits.

[marshmallow]

What would be the medium-term effects of this? A decrease in the importance of the Middle East and the proliferation of nuclear energy are obvious, ditto a decrease in pollution, but what else?

A decrease in pollution? Walk me through this one.

[Fear Itself]

A decrease in pollution? Walk me through this one.Fossil fuels release carbon that was previously sequestered underground. Fuel manufactured from C02 and H20 reuses the same atmospheric C02 over and over.

[marshmallow]

Fossil fuels release carbon that was previously sequestered underground. Fuel manufactured from C02 and H20 reuses the same atmospheric C02 over and over.

I was thinking more of the all the carcinogenic substances in car exhaust.

[Der Trihs]

But it's carbon neutral. You're taking CO2 from the air and turning it into oil, which then gets burned and goes back to CO2 in an endless cycle. OK; I understand what you mean now.

Still; there would be other pollutants as marshmallow points out. Probably not as dangerous on the worldwide scale as C02 may ultimately turn out to be, but unhealthy. Probably at least somewhat less unhealthy than the pollution from natural oil since I presume it wouldn't be synthesized with any unnecessary sulfur, heavy metals and so on added in.

[Little Nemo]

A reduction in the price of plastic products.

[marshmallow]

So expect the smog problem around large cities to get even worse, right?

[WarmNPrickly]

There is nothing hypothetical about this really. Hydrolysis of water produces hydrogen. The water gas shift reaction produces water and carbon monoxide. More hydrogen and carbon monoxide are used in the Fischer Tropsch process to get gasoline.

It all takes a huge amount of energy, and there is no way around it.

[Quartz]

There is nothing hypothetical about this really. Hydrolysis of water produces hydrogen. The water gas shift reaction produces water and carbon monoxide. More hydrogen and carbon monoxide are used in the Fischer Tropsch process to get gasoline.

It all takes a huge amount of energy, and there is no way around it.

But it's not currently economic, else we'd be doing it already. So, please assume that someone has cracked the economic issue, and tell me what you think the medium-term effects would be.

[WarmNPrickly]

The only reason it's not economic is because of the energy. Since you are effectively undoing the reaction you used to get energy out of the oil in the first place, there is no thermodynamic way around it unless you are invoking magic. Every chemical transformation is going to lose energy. Like they said above, you are much better off just using the electricity directly.

[E-Sabbath]

I'm kind of curious about what the results would be if we built a gasoline-powered electricity plant. Compared to coal, how efficient would it be? How polluting? I figure we could get some massive economy of scale here.

[Una Persson]

I'm kind of curious about what the results would be if we built a gasoline-powered electricity plant. Compared to coal, how efficient would it be? How polluting? I figure we could get some massive economy of scale here.
It is impractical to build a gasoline-powered plant to compete with coal, for the reason that doing such would not leverage gasoline's potential well enough. You would build it to compete with combined cycle natural gas turbines, which currently can hit efficiencies over 60%. Whereas the best steam-turbine coal plants are probably in the 42-45% range, depending on many things which I need not bore people with. In short, you could achieve much higher efficiency burning gasoline than coal.

Competing against natural gas turbines, I think you *could* end up being slightly more efficient than even those, due to reduced latent heat losses from the gasoline combustion, due to the higher C/H ratio. The reason no one uses gasoline in a gas turbine is due to many things, almost all of them being economics. However, you might also not be able to get the compression you want in the turbine due to the knock properties of gasoline, to it would be much better to use #2 oil in the turbine rather than gasoline. And in this mythical process, I would assume that #2 could be made just as well as gasoline.

[E-Sabbath]

Correct, Una, I was simplifying when I said gasoline. I meant petroleum product in general. I was wondering about something that had slight real-world implications. What if, instead of burning gas in cars, we burnt the product in the power plant and charged the cars off it? How much pollution would there be, relative to A: electric cars powered off coal plants, and B: gas powered cars?

Ignoring for the moment, the issues with electric cars and so forth, I was wondering about just relative pollution levels.

Assuming, and no, this isn't _fair_, but it would be accurate, typical scrubbing in your average coal plant, (eg, one that's been three quarters rebuilt instead of fully so, so it didn't need to update to emissions standards), versus a newly built and maximally efficient and scrubbed petrol plant.

[Magiver]

A decrease in pollution? Walk me through this one. Diesel engines are just slightly more expensive to produce than gasoline engines and produce the mileage of hybrids. It would put more cars on the road that pollute less for the money spent. In addition, diesel from algae results in the conversion of Co2 so it cycles it rather than releasing additional co2 stored in fossile fuels. On top of that it would use the same distribution system currently used to fuel cars so the infrastructure is already in place.

To answer the op, all the money spent on imported oil would be recirculated in the economy of those countries importing the oil.

[Alex_Dubinsky]

I have no idea what effects it would have on political stability in the middle east. With countries like Saudi Arabia, Iraq, Kuwait or Iran not able to rely on oil revenues, domestic unrest could increase. I don't know if that would be a good thing or a bad thing.
Dude, how could that be a good thing? The poorer a country gets, especially right after being pretty well-off, the more non-liberal its people become. It always baffles me why this principle isn't more widely understood.

[Alex_Dubinsky]

I was thinking more of the all the carcinogenic substances in car exhaust.
Yes. That is a serious concern that all the hype about CO2 sidelines. Although, we've been good about passing laws to address it, so our cars are not as bad now, and artifically-produced fuel I figure could be very clean.

There is nothing hypothetical about this really. Hydrolysis of water produces hydrogen. The water gas shift reaction produces water and carbon monoxide. More hydrogen and carbon monoxide are used in the Fischer Tropsch process to get gasoline.

It all takes a huge amount of energy, and there is no way around it.
So what is the efficiency of that, exactly? You don't often hear of nuclear-made fuel as a transportation solution, but that could be for political reasons.

Correct, Una, I was simplifying when I said gasoline. I meant petroleum product in general. I was wondering about something that had slight real-world implications. What if, instead of burning gas in cars, we burnt the product in the power plant and charged the cars off it?
Gasoline is one, especially valuable, component of petroleum. Oil-based power plants exist, and charging battery-powered cars from them would certainly be much cheaper money-wise (as any advocate of battery-powered cars would point out). I think CO2-wise, it'd be about the same, more or less. Maybe a bit more efficient. Someone can perhaps be more exact (though probably it's hard to calculate). But there's another advantage of generating energy in fossil-fuel power plants: we can scrub their exhausts in a way that's impossible for cars.

[Alex_Dubinsky]

To answer the op, all the money spent on imported oil would be recirculated in the economy of those countries importing the oil.
The money spent on importing oil also gets recirculated in the economies of those countries importing the oil. There's a very good explanation of that, but people don't get it anyway so I won't bother. The only thing you might say is importing oil raises the prices of other imports.

[Magiver]

The money spent on importing oil also gets recirculated in the economies of those countries importing the oil. There's a very good explanation of that, but people don't get it anyway so I won't bother. The only thing you might say is importing oil raises the prices of other imports. Excuse me, what don't people get? By all means, enlighten us on the balance of trade.

[Alex_Dubinsky]

Excuse me, what don't people get? By all means, enlighten us on the balance of trade.
Because if you spend a dollar on arab oil or indian programmers, that dollar eventually gets spent back on our economy. "What about the time the dollar's not here?" Well, that would cause deflation which the Fed prevents by printing more money, so we don't see the deflation. "What if they just keep the dollars because they love dollars?" Ok, maybe the dollar is special, but imagine the scenario for any other country whose currency doesn't get hoarded. "What if we just keep spending without waiting for dollars to return?" Then due to floating exchange rates all foreign things become more expensive until we can't afford them anymore (meanwhile, all our goods become cheaper for foreigners to buy). The dollars must come back.

There may be subtle effects of spending our money abroad (both negative and positive). For example, bad things happen if the in-out flows change shape and velocity (oil shocks, etc.) and good things happen from the act of exporting (the best goods for the lower prices get exported, and that improves competition across the economy.) But largely, the dollars we spend abroad return to be spent on our economy and that's what everyone has to remember.

You've been enlightened.

[Der Trihs]

The only reason it's not economic is because of the energy. Since you are effectively undoing the reaction you used to get energy out of the oil in the first place, there is no thermodynamic way around it unless you are invoking magic. Every chemical transformation is going to lose energy. Like they said above, you are much better off just using the electricity directly.That depends. In this scenario, petroleum is being used as an energy storage medium, not as an energy source, and modern electric car batteries still aren't as good as gasoline engines in terms of output and endurance. Same goes with many other applications; modern batteries aren't up to the job.

[Magiver]

Because if you spend a dollar on arab oil or indian programmers, that dollar eventually gets spent back on our economy. "What about the time the dollar's not here?" Well, that would cause deflation which the Fed prevents by printing more money, so we don't see the deflation. "What if they just keep the dollars because they love dollars?" Ok, maybe the dollar is special, but imagine the scenario for any other country whose currency doesn't get hoarded. "What if we just keep spending without waiting for dollars to return?" Then due to floating exchange rates all foreign things become more expensive until we can't afford them anymore (meanwhile, all our goods become cheaper for foreigners to buy). The dollars must come back.

There may be subtle effects of spending our money abroad (both negative and positive). For example, bad things happen if the in-out flows change shape and velocity (oil shocks, etc.) and good things happen from the act of exporting (the best goods for the lower prices get exported, and that improves competition across the economy.) But largely, the dollars we spend abroad return to be spent on our economy and that's what everyone has to remember.

You've been enlightened. If there aren't products to buy with petro dollars then industries or government bonds are purchased which means the money continues to flow overseas. We are paying people to buy us up.

Thanks for the enlightenment.

[Delayed Reflex]

That depends. In this scenario, petroleum is being used as an energy storage medium, not as an energy source, and modern electric car batteries still aren't as good as gasoline engines in terms of output and endurance. Same goes with many other applications; modern batteries aren't up to the job.

But gasoline engines are only ~20-25% efficient these days. Even if you had a 100% efficient method of reversing the combustion process, you are losing a lot of energy when you are actually burning the gasoline. Electric motors are very efficient (over 85% for sizes that would be used in automotive use (http://www.engineeringtoolbox.com/electrical-motor-efficiency-d_655.html)). Let's look at the processes on the whole:

Petroleum as storage medium
1 kJ power -> 1kJ fuel (100% efficient process) -> 0.25 kJ work (25% efficient gasoline engine) or 0.4 kJ work (40% efficient diesel engine)

Electric vehicle
1 kJ power -> 0.8 kJ to battery (20% transmission/charging losses, probably higher than it actually would be) -> 0.68 kJ work (85% efficient electric motor)

And that is with an impossible process for creating the gasoline in the first place - if there was a process that was even 50% efficient I would be impressed. Thus, we can see that electric vehicles would be a much better use for our electricity than to create gasoline from an efficiency perspective. So the issue is really that current battery technology isn't up to snuff. However, 55% of miles driven in the US are in the city, and in the "medium term" I expect battery technology to be sufficient to meet the needs of city driving (in the form of plug-in hybrids). On top of that, the 55% of city miles driven currently use over 55% of the fuel.

The arguments for or against this hypothetical are similar to those for/against hydrogen, except with hydrogen you don't have existing infrastructure and technology in place like you do for petroleum products.

[Magiver]

The arguments for or against this hypothetical are similar to those for/against hydrogen, except with hydrogen you don't have existing infrastructure and technology in place like you do for petroleum products. You also don't have the density storage of energy with hydrogen.

The problem with battery cars is that they limit the utility of a vehicle whereas a diesel does not. And if you solve the battery density problem there will still be the high cost of the batteries. It's great that people do X amount of driving on a daily basis but if they need X+Y milieage then it takes a hybrid to cover that gap and you still don't have the full utility of a diesel and have added considerable cost to the vehicle. Less cost equals more people driving efficient cars.

And it's not just cars that should be viewed in this scenario. Trucks represent a tremendous amount of fuel used and they cannot be replaced with hybrid technology. Any changes in national energy policy should include the fuel used by trucks.

[Quartz]

The only reason it's not economic is because of the energy.

So suppose you fix that? Suppose you find just the right mixture of catalysts and cheap power to produce oil economically?

[Quartz]

You also don't have the density storage of energy with hydrogen.

Everyone, can we please stick to my OP?

[sweeteviljesus]

This is essentially the concept of biofuels
No it isn't.

I don't understand why it isn't. The idea behind your post seems to be what would happen if gasoline were a cheap, renewable resource not dependent on the Middle East, and that is what biofuels are trying to buy us.

[Lemur866]

It would be silly to burn gasoline to power electric plants which would charge car batteries.

If you're going to use electric cars, the economics of electrical generation aren't going to change. It's still cheaper to run coal-fired plants than petroleum-fired plants.

If we want to convert to electrical vehicles there's no need to keep importing petroleum.

As for the economics of producing cheap synthetic gasoline, well, the problem with cheap synthetic fuel is that most of the cost of the fuel comes from the energy to run the plant. If you have dirt-cheap electricity, then you can produce cheap synthetic hydrocarbons. But if you have dirt-cheap electricity, then why not produce electric cars that are recharged by that same dirt-cheap electricity?

If you've got cheap electrical energy you can use it to produce all sorts of products that you can use to power cars--hydrogen, synthetic hydrocarbons, batteries, compressed air, whatever. But this isn't really "cheap oil", it's cheap electricity that can be transformed into different storage media.

[Alex_Dubinsky]

But if you have dirt-cheap electricity, then why not produce electric cars that are recharged by that same dirt-cheap electricity?
Because really, engines work much better than batteries.

[Delayed Reflex]

I don't understand why it isn't. The idea behind your post seems to be what would happen if gasoline were a cheap, renewable resource not dependent on the Middle East, and that is what biofuels are trying to buy us.
Well the difference is that biofuels use solar energy specifically for the conversion of CO2 + H20 into biomass (then you can use any power source to turn the biomass into fuel), while in a direct method you can use any power source to create the fuel, so in that sense they are different. However, my point was that they are conceptually similar from a carbon neutrality and fuel independence standpoint.

Because really, engines work much better than batteries.
Actually I'd say electric motors are better than combustion engines (from an efficiency perspective, at least), but petroleum products work better than batteries (from an energy storage perspective). The balance of which is the dominating factor (energy conversion vs. energy storage) is what will determine whether we will move towards "electric vehicles" vs. "electrically producing fuel". My personal opinion is that with plug-in hybrids, we will be moving mostly towards using electricity directly (primarily offsetting city-driving fuel use), with electrically producing fuel not coming into play until we need to start replacing non-city driving petroleum use.

[Magiver]

Actually I'd say electric motors are better than combustion engines (from an efficiency perspective, at least), but petroleum products work better than batteries (from an energy storage perspective). The balance of which is the dominating factor (energy conversion vs. energy storage) is what will determine whether we will move towards "electric vehicles" vs. "electrically producing fuel". My personal opinion is that with plug-in hybrids, we will be moving mostly towards using electricity directly (primarily offsetting city-driving fuel use), with electrically producing fuel not coming into play until we need to start replacing non-city driving petroleum use. I see the electric as useful for city driving but it lacks the distance of a hybrid or the towing capacity of a diesel. Dollar for dollar diesels engines and biodiesel technology will put more cars on the road. I would love a turbo diesel Focus wagon. Give me 150 hp and 250 lbs of torque with 45 mpg. It would be fun to drive, economical and useful. I'm there. Put a bow on it.

[Delayed Reflex]

I see the electric as useful for city driving but it lacks the distance of a hybrid or the towing capacity of a diesel. Dollar for dollar diesels engines and biodiesel technology will put more cars on the road. I would love a turbo diesel Focus wagon. Give me 150 hp and 250 lbs of torque with 45 mpg. It would be fun to drive, economical and useful. I'm there. Put a bow on it.
I agree increasing the prevalence of diesel is definitely a good thing, though what's to prevent both from happening? A quick Google news search seemed to indicate that Volvo, Volkswagen, Nissan, BMW, Toyota, Mercedes, and probably more are looking into plug-in diesel hybrids. Certainly it's not impossible to both increase the prevalence of cheaper, diesel only cars, AND plug-in hybrids (of both gasoline and diesel varieties)?

[Magiver]

I agree increasing the prevalence of diesel is definitely a good thing, though what's to prevent both from happening? A quick Google news search seemed to indicate that Volvo, Volkswagen, Nissan, BMW, Toyota, Mercedes, and probably more are looking into plug-in diesel hybrids. Certainly it's not impossible to both increase the prevalence of cheaper, diesel only cars, AND plug-in hybrids (of both gasoline and diesel varieties)? Honda bowed out of the US diesel market when they pulled their 2010 Accord. When you look at the ROI of a hybrid it is very dependent on the price per gallon of gas as to whether the extra cost will be recovered. it's a completely different story with diesel hybrids. The difference in cost will never match the gains made because diesels are already producing hybrid level efficiencies. Currently gas powered hybrids are using an Atkinson Cycle engine which means a stand-alone engine and not something pulled off the shelf. It would take something radical in diesel technology to make it useful for hybrids.

With that said, I give you an example of a rotary Atkinson engine (http://en.wikipedia.org/wiki/Atkinson_cycle) that could theoretically burn diesel. Check out the animation in the upper right. I have no clue where it's at in the way of engineering but here's a site from a company called White Smoke (http://white-smoke.wetpaint.com/page/Rotary+Engine). You can find an example of the prototype moving through the cycles.