Oil independence to be won through grants to vehicle R&D - Dissappointing Swedish News.

Once again Sweden, the first nation to proclaim its intention to become oil independent, acts disappointingly in a way far removed from what many believed were its true intentions. As reported in the Swedish daily newspapers on the 24th July, the Swedish State are to finance a research and development program to produce better environmentally suited vehicular technology. It is hoped Swedish vehicle industry suppliers as well as other companies will participate in the program to increase the competitiveness of Swedish vehicle industry. The total budget is 800 million kronor, 282 million (35 percent) coming from the State, the rest from the industry.

Says Thomas Ostros, the minister responsible for trade and economy, “the aim of this three-year initiative is to improve the environment, reduce oil dependency and increase competitiveness.”

They hope to produce technology that industry will apply to offer more energy efficient vehicles, new engines, increased use of renewable fuels and modern hybrids.

Hardly inspiring confidence in what could be achieved, Volvo boss Fredrik Arp pointed out that bringing a new engine to market costs 5 billion. Later he said Volvo Cars needed to produce more with fewer employees and announced a cut of 1,000 jobs this autumn.

Clearly, the Swedish State are stuck between a rock and a hard place without showing they have the slightest clue of how to get out. On the one hand, Sweden is the European country most dependent on the vehicle industry for jobs. On the other having declared the intention of oil independence by 2020, they are sitting with the Oil Commissions report in their laps that suggests biofuels are the answer.

What the State and the Oil Commission have not even begun to face up to is that:

• Modern road transport is a burdensome invention. Over 40% of the space in cities is dedicated to it, prime agricultural land is sacrificed to it, and the costs of much of it are externalised to an extent it is hard to see when present damage can be rectified, let alone the damage from the predicted 14% increase in volume predicted for 2020. Most of the energy used to construct, maintain and run the system actually goes into the system itself. Precious little of the energy is actually used to move goods or people.

• In the instructions to its Department of Road Transport, the government use the term ”transport system” synonymous with the road network. The wider implications of this are that more environmental alternatives like water or rail are not in their brief, but left to other (less well financed?) departments further cementing the dependence on road (and fossil fuel) transport.

• Without the energy-dense oil that 99% of all transport runs on, the energy intensity of society must be radically reduced if it is to provide a standard of living anything like today’s. No technology or biofuel can solve this equation.

• Social inventions and demand –killing technology like urban planning, relocalisation, local food systems etc, are off the agenda thanks to the short-sightedness of the Oil Commission.

• Economic growth, stimulated by all the so-called new technology that can be invented on an 800 million budget, is a mirage and a very risky strategy. Too risky just to be accepted blindly as the way forward. The underlying assumptions, however politically explosive, need to be examined out of respect for the Swedish people who place their faith in their Government and authorities. As oil prices spiral, regardless of how much biofuel you can wring out of rubbish and forestry waste, the economy will likely shrink. If Sweden has not worked out how living standards can be kept they will be wishing they put their money into something else than an old-fashioned, doomed, transport concept.

Swedish news: Daily newspaper slags off oil commission.

Comments on the oil commission’s report have been very few in the Swedish media. Perhaps because it was released during the holiday period or because the issue is so complex, that in criticising the report you show how much you do not know. SvD, the right wing Swedish national daily newspaper, however, takes the Oil Commission to task for “giving us a vision of wood-burning”.

In its editorial from 11 July, former Editor-in-chief Hans Bergström denounces the Oil Commissions six months of work as failing to deliver to a standard of what would normally be expected of a government report.
In short he says the report fails to address: - financial dimensions including budgets, investments, subsidies etc.
- the present increase in transport Sweden is experiencing.
- how research budgets will be prioritised – by for example reducing medical research.
- the disadvantages and benefits of investing in bio-fuel alternatives against for example, stimulating exports.

Perhaps the most scathing criticism comes as he rails against the idea that Swedish crops and forestry products should be converted to fuel. As he puts it, these raw materials should be processed (at least into food) and turned into value-added products, not just burnt.

The criticism, however correct, itself begs the question of how an energy intensive society is going to get its energy to do all that value adding and exporting activity when oil supply shortfall drives energy prices sky-high. But then the commission did not address that either.

Mood picture

I attend the course in Units of Trust

Reflections

I was doing Internet research into how Unit Trusts (see earlier post) advertise their investment opportunities. I was struck by how far away the organizations that benefit from my money are from me. I just get barely a piece of paper from the bank or building society advisor. In the Unit Trust scheme I met in the image stream you get to be close to the organization and get together personally with them. And it was useful stuff. Much better and more human!

PREAMBLE

This is the third investigation into Unit Trusts. The first one visited an exhibition of the organization and the organizations offering placement opportunities. These visits have raised several questions, including how a 10,000 SEK investment would provide anything useful, as 4% gives 400 SEK (what you might get as yearly dividend from conventional placements) equivalent to one carrier bag of food. Not much per year.

On the other hand, 10,000 SEK is the equivalent of the quarter of your food bill for one year. You would want to see a reasonable result for your money. Of course, if you were to eat up the 10,000 SEK we are talking of a food bill for 3-4 months!

This goes to show I cannot get my head around economics. It seems to be a system that allows you to compare apples and pears with each other.

In contrast. Units of Trust are dealing with realities – the number of days in a year, hours you can work, calories you need to eat, etc. I can’t see how systems that aren’t anchored in simple realities like that can be useful.

From an investor’s point of view you come close to the organizations, you make a commitment. They get capital and customers - an incredible benefit for them.

QUEST: My quest is to understand how an involved organization is expected to serve its customers and investors in the scheme. I need to be clearer about how it all works.

My quest, then, is to visit such an organization again to learn how they teach starting up organizations to use their facilities best. To join in the training, or process, or see the process where these organization that join, how they are trained and developed, as well as what is offered by unit trusts.

TAPESCRIPT

I am walking over the cobblestones of the square I visited earlier, towards the small town hall where I earlier met the facilitator group. I get the feeling this group is heavily involved.

A sign on the door invites you into the introduction to Units of Trust entrepreneurs’ day.

People are sitting at round tables in groups of four or so.

I sit down, collect a notepad, pencil and file.

One person welcomes us.
"This is the start of your journey towards providing sustainable services as an entrepreneur. I congratulate you on your choice, you are doing a good thing for society and lot of people are counting on you, and waiting to invest in your offering."

“This is not like anything else. Many really want to support you and see it works well because they want what you have to offer. The purpose of these first sessions is to explain the principles behind how this can work. So that was my introduction. Any questions?”

“I know nothing about business.”
-“No problems we’ll help you with that.”
“I am not sure what I want to do, just something.”
- “OK. You can still go on the course. You are welcome, something will come up while you are on the process.”

The first exercise to do he calls the Basic Frameworks of Life.

What we have to do is write down what we think they are. On a square, the group have to put everything around that framework.

I am in a group of four. We get started.
“Human life?” someone asks.
- “Yes.”

We start to list what we consider are essentials:
• Shelter
• Food
• Social security
• Health care
• Education
• Transport
• Culture
• Clothing
• Household goods

Then we are asked to identify a maximum, minimum and a reasonable standard.

For water, I venture 50 liters a day, but do we need 2 liters a day – or hour – I realize I am unsure.

Maximum is 7000 liters, equivalent to the average US citizen or household.

We note these down on the square.

Shelter.
Minimum spare meters 13 square meters
Largest = say 50 per person.
Reasonable, lower quartile.

Food
4000 KWh per year for a family
(If you go over what is reasonable you get fat!)
(We must be able to find minimum and reasonable standards of vitamins and minerals etc which are needed.)

Clothes
Minimum
Not being cold – a minimum wardrobe – one pair of shoes.
Five changes of underwear if you wash once a week

The whole group is getting into it, quantifying and qualifying. We quickly realise too much or too little is a burden. There is a comfort range that needs identifying..

In terms of security

Minimum
Always know you can get the minimum
Maximum
Never want for anything……

This exercise certainly makes you think. We carry on discussing details.

I wander around the other groups, they are identifying units and then evaluating max and min. Most have never thought of this before

Indoor temperature 21 constant
Minimum 17c Not too hot, not too cold.

The facilitator asks how much disagreement there is

”Not a lot so far.”
“Where was the difficulty – in quantifying and qualifying?”

The facilitator draws the point out that you know standards when you see them.

“If you were going to invest in an organisation what level and services would it be offering?”

We were not in agreement about what was reasonable – in fact we had difficulty quantifying a lot of the dimensions.

Someone comments they find this strange as we have done research for so many years so why is it not available?

(“And what has this got to do with investment? Someone wonders skeptically)

"We’ll come to that. Let’s have a break.'

Coffee and biscuits are available, and we mill around chatting.
One guy is into aviation. I tell him of my exploits into trying to invent a flying saucer

I also meet a farmer, he is into corn and wheat growing for bread making.

People seem to be engaged in what they are doing, mostly one man or mom and pop operations.

A guy from a large bank is present. I ask what he is doing here. "We need to change,' he says 'that is why we are on the course.'

We are called back to our groups.

I sit at the same table, the banker is with us.

Time for a DVD. A film of points. The point of points. Numbers flash on the screen

The presenter is walking through a field.

”Here I am in this field, what is behind all this? How many hectares is it? How long did it take to plant? How many people will it feed? How many hours do I need to work?”

He continues as he starts to walk across the field. “It’s a very simple equation. That is the basis of all human activity. How can we achieve what is reasonable for everyone with what we have?”

He presents a numerical framework for us. A hectare is an area of land, there are 1 600 working hours in one year and 365 days.

We have 1.2 or 1.5 hectares of agricultural land per person and a certain number of hectares of forest and other land to include water and stuff.

It is very simple.

He reminds me of David Attenborough.

The film continues. Lorry driving. Machines have similar limits. Based on fuel, man-hours to manufacture, and the lifetime of the machine and maintenance hours, and the fuel to drive them, related to amount of work that has to go into make the fuel plus the agricultural land or land needed. Back to hectares/ or calories and working hours.

And for an organization. On this simple basis, this way of accounting and counting, we can describe how we create a standard of living. And also to equate the standard with the areas of land involved.

Then you know how many hours and hectares and the machine and organization. You always come back to the same measurements and units.

The DVD shows pictures of ships and boats carrying freight.
The Presenter: “each boat has a capacity to carry in terms of volume and tonnes. And there is an effort in terms of man-hours and fuel required to carry the freight to another area. Easy to work out if you include the speed of transport. All these simple things are the basis of points system. But what does this have to do with organizations?”

The facilitator asks if we understood the film…

“I still don’t get what a point is, just what the basis is,” says someone.

“True, but let’s not jump the gun.”

We are given a new exercise; a pyramid.

You have to put things in order. You have to choose one of the things from the square like 4000 calories of food. You have to break them down into things that make up the basics.

See if you can identify different levels but at the bottom you have to come down to the basics - to man hours, land area and water etc.

My group discusses – and decides to choose - the flat example, 13 m2 for all. Someone else means it is difficult but agrees anyway.

We get sticky labels and start to discuss levels.

At the bottom is the land the building is on. Then there is the required to produce energy.
Then the materials. How much land do you need for that?
We park that question.

Then there are man-hours to build and then maintenance, upgrades etc.

There is metal for pipes etc. That has a man-hour component.

For materials there are the man-hours required to get materials out of the earth. The only thing that is not clear about this is the minerals taking from the land. You need land to take it from. Non-productive land, I had not thought of that.

We seem to have identified a lot of layers to work on.
• The actual delivery of the service is at the top.
• Running
• Then there is the set up.
• Underneath that, basic materials at the bottom in two sections Land to produce bio material and land where we extract materials from the crust

So the group concludes we have three separate levels under this particular service.
"Are we getting there?” The facilitator asks. I wonder, but the facilitator seems pleased anyway.

The facilitator: “What have we learnt from this?”

I venture: “This about minerals …it is not land area but it is in tonnes.”

“Yes, it explains the boat bit,“ he replies.

You have tonnes of minerals, not originating from the biosphere.

“Are we agreed it is working?” He asks. “We identify that all services originate from fields, water and minerals. There are three basic levels: extraction, construction and maintenance and running.”

Every group has identified the same levels, we just have not thought of it before like that.

So, we have come to a juncture. Homework is to take the service we are thinking of offering and to break it down into the pyramid. Thinking of what is required in the context of maximum, minimum and reasonable.

Obviously, the time frames for construction and running are different, as construction effort would be divided over time, so the different levels need to be treated differently. We are just required to map them out. The facilitator closes the session for today.

Everyone starts to pack up, I go over to chat to the facilitator.

I was expecting more open space type exercises. He replies it is not always useful for training. We must start up with the basics.

You are seeing the point now of developing the facilitator group. I like the ideas of the facilitation team. I realize I could set up a separate facilitation organization myself.

He leaves me I continue wandering around, not much is going on. I think it is time to go. As I leave I see a lemonade stall. I find this amusing as business courses always use lemonade stalls as examples.

I take the lift back to the departure hall; I see the exhibition stand is still there. I sit next to a woman on the bench I started from.

She says:” I’m wondering if I should invest in unit trusts.”
“I recommend it,” I say.

Farmyard – geese – ducks - this is what I associate with her.
I ask her about her impression from visiting the stand.
She feels it is a good idea, almost too good to be true, she always mistrusts things like that!

Reflections
I feel we are living off the work done by our forefathers to create systems and structures. Today we are using metal, machines, materials put together by those who came before us. Yet we are using them in a non-sustainable way. You could say we are not working in the same way.

I am also surprised that the figures for what is reasonable living standard are hard to find. And that to work out from a systems perspective how much materials are needed by us – I believe society is looking the wrong way somehow. Suppose a train is coming from the other direction?

Questions
None just yet – I would like to understand points better.

Immediate uses

I like the DVD idea. Maybe I’ll try it if I can borrow a camera – and write the script.

I think the comparisons I learned about could be used immediately to show the way forward for various systems or collection of systems. The diagram below shows the difference between different operations that require different inputs for construction and operation. A double Hi is an operation that should be replaced (Road transport system) a Hi on construction and Lo on running should be kept (Rail network). Lo on construction and hi on running costs should be replaced.





Verifications

The New Scientist has an article showing how much material is needed to run London. (Population 7.5 million)
Input
WATER 1,000 million tonnes

FOOD 2.4 million tonnes

FUEL 20 million tonnes

TIMBER 1.2 million tonnes

PLASTICS 2.1 million tonnes
.
METALS 1.2 million tonnes

GLASS 0.36 million tonnes

CEMENT 2 million tonnes

BRICKS; BLOCKS;SAND;TARMAC 36 million tonnes

OXYGEN 40 million tonnes

PAPER 2.2 million tonnes




output

c02 60 million tonnes

household waste 4 million tonnes

INDUSTRAIL WASTE 11.4 million tonnes

SO2 0.4 million tonnes

NOX 0.28 million tonnes

SEWAGE 7.5 million tonnes


I visited a historical spa organization and presented the idea of raising capital and giving right of use in return. We calculated that raising $100,000 dollars, with $1,000 from 100 people would be possible, if we offered right of use of holiday apartments at a rate equivalent to cost of production of the service, which was at roughly $100 a week. Several other conversation with people leads me to change my earlier skepticism. As long as the “unit holder” uses the right to use and pays the production costs, it is a good, non taxable deal all round.

Why Oil commission fails to deliver route to oil independency

Last week, the commission on oil dependency, tasked with charting Sweden’s way out of dependency, issued its report. The Swedish Parliament and public sector is to review the proposals for decision after the elections in September. Disappointingly, the report fails to address the heart of the issue - dependency and management of risk for societal collapse - instead it chooses to concentrate on technical solutions for energy supply. The commission’s failures illustrate the magnitude and breadth of the challenges facing the western world and the lack of capacity of the present political and scientific bodies to address it.

Many were overjoyed when Sweden announced its intentions to walk along the road to oil independence. And on the face of it, a list of suggestions for stimulating alternative energy sources is a useful result. However, the report’s fundamental flaw is that is does not address the risks involved in Sweden’s dependence on oil for the provision of a standard of living for its people. The report spends less than one page on this aspect. On the other hand, it does identify that of the four areas of operation, transport, agriculture, industry and housing it is only the transport and agriculture sector where no alternative is available. Independence, to the commission, is not the same as zero consumption. Independence means there are alternative, renewable sources available.

In fact, according to the report, Sweden is not actually at any risk from oil depletion. The authors take pains to point out that the reason for the commission’s work is to fulfill Sweden’s climate obligations. They state their belief that neither peaking of oil production nor spiraling oil prices presents any risk to the transport system and thereby hardship to the economy or the Swedish people.

Although not mentioned in the report, this is actually the view of the Swedish energy authority. Their recent report sees no risk in bottlenecks in refining capacity, political unrest, peaking of production or failure to find new reserves.

This means that the oil commission has not addressed the issue of how to manage oil dependency. They reduced the problem to “what to put in the fuel tank”. This is quite a leap of faith. The transition will require massive investment. If oil supplies do fail to keep up with demand, the resulting slowdown of economic growth, reduction of taxes etc would mean the substitutes the commission believes can be found will lack financing.

The commission also takes a leap of faith concerning the time factor, which their report does not address. Take the most ambitious part of their report: transport. Consider they have a window of fourteen years to stimulate the equivalent of 50% substitution of biofuels in the Swedish vehicle park based on today’s consumption. (Some degree of this will be achieved by efficiency savings.) The proposals after debate and analysis will be enacted in next year’s public sector budget to take effect first in 2008. That leaves just twelve years. Trends are going in the opposite direction: 5% increase in car sales, 9% increase in trucks and medium size trucks are up 17% just this year. The recent Hirsch report shows clearly how only a crash program can achieve the level of impact required.

The commission assumes technology can simply replace and expand current levels of energy intensity to promote economic growth. They call themselves technology optimists, meaning that by putting in appropriate measures, technological development and spread will be stimulated enough to provide a means for both economic growth and energy supply.

These assumptions are also seriously flawed. Let us take the first one: that new technology can supply the equivalent of current levels of energy intensity. This is an untested assumption, and a dangerous one. Technology failing to deliver will leave Swedes living in a high energy dependant society with nothing to fuel their economy or even energy to power agriculture.

Secondly, just because a technology performs its task adequately does not mean it is a guaranteed commercial success. Technical performance does not mean commercial success, it is merely a prerequisite. So, even if the Government’s stimulation packages result in new wonderful technology, there is no guarantee of commercial success. Especially as most European nations could not produce enough biomass to fuel even public transport.

Thirdly, energy-saving technology has historically resulted in increased energy use. (The Jeavons paradox.) For example, homes are more energy efficient today, but use more total energy as they are larger.

Interestingly, of the packages suggested for government intervention, (excluding research, which has an impact in a longer time frame,) three of five are directed at the vehicle industry. In presenting his report, the Prime Minister underlined the importance of the vehicle industry as Sweden has the highest percentage employment in the industry of all European nations.

Therefore, the proposals for technological development are biased towards subsidizing and stimulating the vehicle industry. The transport system using personal vehicles is not in question, the commission’s aim being to preserve the industry.

It is far from clear that any European country apart from Sweden has enough biomass to produce fuel to bring about and drive this transformation. And it is far from clear that it is even possible to support growth of transport in Sweden. But even if it were possible, a sustainable non-oil using society cannot support a large vehicle production industry or even entertain the idea of a society on the car and lorry.

The path suggested by the oil commission then, is extremely risky. A report from The Royal Swedish Academy of Agriculture and Forestry analysed and compared two scenarios, one technology optimism, the strategy preferred by the commission without question , and the other a crash program to reduce energy intensity levels. The report asks what the consequences would be if each strategy were to be wrong. If technology optimism fails, millions of people would be left without a way to clothe and feed themselves as the cheap energy they relied on no longer is available. If the low energy option fails, you have a society without economic development , but at least with food, clothing and housing and social cohesion. The commission, if they have read this report, seem to have ignored its conclusions.

The commission’s results illustrate that the problem of a societal infrastructure driven by cheap energy is a multi-layered problem and requires much work from many different angles until actionable insights can be produced.

Since December when they convened, there has been a round of construction of roads, large shopping centers around cities and closure of local shops. Sweden is becoming more oil dependant by the day.

Like large corporations that realize they must break themselves up before the competition does, nations must decide their strategies. Transition to low energy intensity before they are forced to, or place their faith in yet-to-be-realised technology. Sadly, many believed Sweden was leading the way. In reality, it is clinging to an outdated concept of societal structure based on mass transport.

Oil commission presents report

Stephen Hinton analyses the report released from Sweden’s Oil Commission.

Some nine months after Sweden officially announced it was to break its dependence on oil, the commission set up to answer the question ”how” presented its report Wednesday the 28th June. This report comes against the background of news reports of deep disagreement among the members and reports from the Swedish Energy Authority dispelling any risk of energy vulnerability through “peal oil”. The task given to the commission was to present concrete proposals to break dependence on oil. These proposals should show how, by breaking this dependence, long term energy supply would be secured, new technology stimulated, competitiveness increased and improved use of forestry and agriculture as energy sources.

Early in the report the commission analyses in which respects Sweden is dependant on oil. Sweden produces 647 TWh. Oil makes up 207 TWh (including losses). The three sectors that are dependant on oil are Transport, 95 TWh 97% oil, Agriculture and fisheries, 70% dependant using 7 TWh and the Building trade where 67% of the energy is from oil at 2 TWh. To get things in perspective, the commission’s diagrams show how losses from nuclear energy (149 TWh) are higher than the total energy used from oil (137 TWh). The main reason given for drastic reduction of oil combustion is its climate disruption effect through greenhouse gas emissions. This will be helped by the price increases.

The Prime Minister, in his presentation of the report, underlines however the importance of the energy security dimension. At the same time, this reduction in use of oil should not make the conditions for economic growth more difficult than today.

The next step in the commission’s thinking is harder to follow: what is meant by breaking oil dependence and the creating the conditions for achievement of the concomitant national goals? The report makes it clear that they foresee use of oil continuing beyond 2020, but that their proposals will bring about a reduction of oil use.

Five main measures:
• Overall increase of energy efficiency by 20%.
• Development of fuel from agricultural sources.
• Increase in Electricity as energy transfer medium
• Support development of biogas, but not support of fossil natural gas
• Development of EU regulations and measures