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The Evolving situation between Russia, Belarus and Azerbaijan
Posted by Heading Out on January 9, 2007 - 12:00pm
It hardly seems any time at all since we heard that Belarus and Russia had signed an agreement that had set the price per thousand cu meters at $100, Gazprom was going to use part of the money, over time, to purchase a 50% share in the Belarus pipeline company, and another crisis had been averted.
Except that the story dealt only with natural gas, and there is a second fuel, oil, that also makes its way from Russia, through Belarus, to places like Germany and Poland. It carries about 20% of the total supply. (The photo on Robert Amsterdam’s site shows you how large the diameter of the Druzhpa pipe is, large enough, he notes, to carry 1.2 mbd of oil to Germany and Poland. It is thus one of the highest capacity pipelines in the world . And on Monday Russia turned that tap off. For much the same reasons as, last year, they closed the tap on the natural gas pipeline feeding through Ukraine. Large volumes of the fuel headed west were being siphoned off. It is not, in fact, the Russian government that is directly involved in this dispute, at least superficially and at this point, but rather the Russian oil pipeline company Transneft. Their story is that, as with Ukraine, Belarus did not want to pay the new duty on the oil, that Russia was now demanding .
Last month, Russia imposed an export duty of $180 per ton of oil sold to Belarus, a severe blow to the country's reprocessing industry and government revenue. Belarus responded by imposing an import duty of $45 per ton of Russian oil that crossed its territory.
UPDATE: When I said that most countries had reserves that would get them through the crisis I forgot to look at Belarus, and they apparently only have a week's worth. And the second point is that without customers for their oil, Russia might have to cut back production by up to 1 mbd, since it will run out of places to store the oil, and has only a very limited means of alternate shipping (which includes a lot of railcars.)
UPDATE 2 It now appears that Russia refused to meet with the Belarus delegation today.
However, a quick resolution to the dispute seemed distant after the Russian government refused to meet a Belarussian delegation that arrived in Moscow on Tuesday.
Andrei Kabyakov, the Belarussian deputy prime minister, flew there for talks with his Russian counterpart but failed to start negotiations.
"The Russian side told us... they are not yet ready for talks," Vladimir Naidunov, Belarus's first deputy economy minister, told reporters in Moscow.
The same source also mentions that President Putin has warned Russian oil companies to consider cutting production.
Belarus had been taking the cheaper Russian oil and refining it, and then selling it on at a considerable profit. This provided a subsidy to the nation that Russia has apparently got tired of paying. However, with legitimate supplies to the country turned off, but with oil passing through the Druzhpa line on its way west, Belarus apparently felt that they had to act to keep their refineries operating.
"On 6 January the Belarussian side without any warning unilaterally started the illegal tapping of oil from the Druzhba pipeline designed solely for the transportation of oil to consumers in western Europe," said Semyon Vainshtok, president of Transneft.
"Nine hundred tonnes of oil have been illegally tapped from the pipeline in the last 24 hours alone ... and a total of 79,000 tonnes since 6 January."
According to the Russian deputy Trade and Economic Development minister, Mr Sharanov, Belarus had seized the oil to cover the $45 a ton transit fees. The stoppage has cut the flow of oil to countries such as Poland which gets around 92,000 bd through the pipe, and another 24,000 bd delivered by tanker. It has also closed supplies, which flow through the Southern branch to Hungary , Slovakia and the Czech Republic. It is not, however, completely clear that who shut the line since Rigzone quotes the Belarus pipeline spokesman thus
There was no information available from Polish or Belarusian pipeline authorities as to when supplies would be resumed.
The Belarusian government would at minimum keep the oil tap turned off until talks start between Sidorskiy and the Kremlin, a Belgaztrans official told Deutsche Presse-Agentur dpa.
The unfolding events show the clear benefits of having some form of a strategic reserve of fuel. And in this case it appears that all the countries affected have got sufficient oil set aside that it will not be a serious problem for a while.
The German government confirmed that the pipeline, which supplied two refineries in Germany, had been shut down.
Andris Piebalgs, the EU's energy commissioner, said he was seeking an "urgent and detailed explanation" of the cuts from authorities in Belarus and Russia. Ferran Tarradellas Espuny, the Commissioner's spokesman, added that Poland had 70 days of reserves and Germany 130 days to ensure no short-term fallout from the dispute.
However the talks, that appear to be beginning in Moscow < a href=http://www.timesonline.co.uk/article/0,,2-2537540,00.html> about the crisis may not be resolved that quickly
A government delegation from Belarus flew to Moscow last night to try to negotiate a settlement. But Mr Sharonov said that there would be no talks until Minsk cancelled its tax. Europe should expect to see the natural resources giant use the same ploy in the future to extract market prices for oil and gas out of former Soviet states, experts said.
And if this were not enough of a problem to raise questions on Russian reliability, in the face of relations with its neighbors, Azerbaijan has just shut off the supply of oil to Russia, following the doubling of gas prices from Russia to Azerbaijan.
Azerbaijan, which has its own substantial gas and oil reserves, imported about 4.5 billion cubic meters of natural gas from Russia in 2006 to cover domestic consumption. But the country refused to meet Russia's demand that it pay US$235 (€180) per 1,000 cubic meters of gas — up from US$110 (€84.50).
Last year, SOCAR exported 1.172 million tons of oil via the Russian-controlled pipeline running from Baku to the Russian Black Sea port of Novorossiisk.
An international consortium led by BP PLC that is developing offshore oil fields in Azerbaijan will continue to use the Baku-Novorossiisk pipeline in addition to a new U.S.-backed pipeline running from Azerbaijan to Ceyhan, Turkey, known as the BTC.
In a related development, the government sharply raised the domestic prices Monday for gas at the pump, electricity, water and natural gas for industrial use.
However, given the developing situation the Baku-Novorossiisk may not be running as full since one of the producers has recognized that Azerbaijan power stations are switching to oil, and thus will need the oil, they have cut off exports, until at least April, when they anticipate supplies from the Shakh Deniz field. The other oil producer the Azerbaijan International Operating Company (AIOC), will continue to supply around 70,000 bd to the pipeline.
Well the Chinese wanted to secure their imports of oil by ensuring that a large portion come by land and thus be safe from the threat of naval interdiction. I am not sure that the current goings on will give them any great confidence in that option either.
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Jumping in with some info here:
From the Financial Times:
So we are told that Belarus has been stealing $2bn from Russia (but that concept of "stealing" disappears as the FT chooses to call "profit" what would be designated as "loot" anywhere else), but that Russia is nevertheless wrong to take action.
So, let's see...
But of course, we cannot "do away" with oil, it's not even considered, so we have to bludgeon Russia and others to keep on supplying us.
More here: http://www.dailykos.com/story/2007/1/9/94633/38095
Hello Jerome,
This Belarus-Russian situation is tailor-made, if it continues to a full-blown crisis, whereby I expect Tom Clancy-type political realignments to occur. Polonium, gunshot corpses in the bloody snow, and various other covert and overt persuasive negotiating skills. Stay tuned.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Belarus is in the wrong here, clearly, and Europe is just collateral damage. Europe should be pressuring Belarus to play nice, not Russia. Europe could also enter into talks with Russia about building common infrastructure to bypass problematic states and guarantee Russian distribution in the future. That would be a win-win for Europe and Russia. But no, we get the Europeans posturing and playing at morality again.
I absolutely agree. But the russians are also to blame, because they did not give a timely notice to their partners. Even at the price of some delay and more losses from pipedraining, this is what they should have done before shutting it down. This is not the way to keep good relations with your customers and prove yourself as reliable supplier.
The case with Ukraine was slightly different, because then the Russians tried to reduce the supplies to Ukraine only, but the Ukranians continued to drain, what they considered "theirs" and hence the shortages at the other end of the pipe. But it was basically the same unilateral thing, again. In both cases I don't think it was on purpose, I rather see it as a typical socialist style negligence.
I have a hard time feeling sympathetic toward the Russian's clams.
Russia only pays Turkmenistan $65 per tcm for its NG and sells it to Europe for over $200 per tcm. Turkmenistan doesn't like it but has to live with it because it is currently the only way they can export NG.
Now the Russians are objecting because Belarus is retaliating for a unilateral increase in prices by doing to them what Russia is doing to Turkmenistan.
Nobody forces or blackmails Turkmenistan to sell its NG. If they invest in pipelenes as GasProm did they can get the price they want. In contrast forcing your supplier to pay unprecedented charges by stealing his produce and sabotaging his relationship with his partners is an outright blackmail IMO.
There is also another thing you are missing. Gazprom exports to Europe for ~$230/tcm, but 3/4 of its production is sold internally in Russia for ~45$/tcm. Thus the average price it earns is ~$91/tcm and it can be argued that it charges only $26/tcm for Turkmenistan using its infrastructure.
Russia pays Turkmenistan $100 per tcm and not $65. Turkmenistan is in the process of bringing its prices closer to market levels.
http://www2.pravda.com.ua/en/news/2006/9/6/6301.htm
As someone predicted a year ago, the Russians have admitted to lower oil exports year over year, as the rate of growth in production slowed dramatically, and as the rate of increase in domestic consumption increased dramatically.
What if the decline in export capacity is accelerating, as Russia slips from showing a slight increase in production to a permanent decline in production?
"Voluntary" production cuts in Russia, just like Saudi Arabia? (Check out Leanan's headlines today)
A conservative Export Land model: http://static.flickr.com/97/240076673_494160e1a0_o.png
Note that the UK went from exporting one mbpd to being a net importer in six years.
WT: A question about the oil market: Today Aramco announced that they are cutting supplies to customers (supplies already contracted for)meanwhile, the spot price of crude is falling. I would assume this action is being taken because the contract price is tied to the spot price and Aramco doesn't like the price. I would have expected that rather than cutting supplies, a negotiation would have ensued whereby Aramco's price would have risen somewhat and contracted amounts would flow. Am I right to assume this was offered yet Asian customers declined to pay more?
This is way out of my experience and knowledge.
In regard to the oil price situation, my guess--and it's only a guess--is that two things are driving the current downward spike: (1) the fact that the Nymex traders are going to work in short sleeves and (2) some hedge funds bailing out (or being forced to bail out) of highly leveraged positions. We saw something similar in the natural gas market last year, as one hedge fund took huge losses because of their speculative bet on natural gas prices.
In any case, my prediction for 2007 is that Russia will join Saudi Arabia is showing lower oil production. I have begun to wonder a little bit about somewhat of a future rebound in Saudi production. If Ghawar really is crashing, and not just declining, it's possible that overall production will fall so fast that mathematically Saudi Arabia may show some kind of rebound to a production level lower than their peak, but in any case, I think that 2007 will clear things up.
Right, all the recent price disputes between Russia and its former empire have been leading up to this. Why? To provide cover for Russia when it needs to make voluntary production cuts.
There is no reason not to suspect that price disputes are occurring at the same time that Russia's production is falling--in fact the two would probably go together. They have already admitted to lower exports. The only question is whether lower production this year will accelerate the decline in exports.
The inevitable decline in fossil fuel production is driving most of the current tension and is going to lead to much more in the near future. Judging by the current MSM (not just western) propaganda the true source of the conflicts will never be identified. I think the powers that be got caught by surprise with the pace of resource depletion. They were trapped into the same trance as the rest of the population by the endless repetition of "there are decades of oil and gas left" mantra for the last 40 years.
Worth repeating...
Breaking News: GM places it's bet on cheaper oil, or Westexas vs. General Motors! :-)
UPDATE 1-AUTOSHOW-GM says oil price to drop, yen undervalued
By Kevin Krolicki
DETROIT, Jan 9 (Reuters) - Oil prices are set to decline sharply in 2007, dropping as low as $40 per barrel because of increasing production and a slowing U.S economy, the chief economist of General Motors Corp. (GM) said on Tuesday.
"Last year, I said oil prices would be in the forties," GM chief economist Mustafa Mohatarem told a conference of auto analysts. "Obviously, I missed that forecast by a few dollars. I think they will be in the forties this year."
In January, 2006, crude oil on the New York Mercantile Exchange was trading in the mid-$60 level, rising to a record high of $78.40 in mid-July. On Tuesday, crude oil was trading slightly under $55, the lowest level in 1-1/2 years.
Oil traders have cited forecasts for heating oil demand in the United States to average about 24 percent below normal for this time of the year due to abnormally warm winter weather.
Mohatarem on Tuesday cited rising oil production from non-OPEC economies and slower global economic growth as reasons for forecasting a slide in oil prices, a move that could take some of the pressure off the embattled U.S. auto industry.
"On the balance, the risk for oil prices is that they are more likely to go down than to go up," he said, saying one Wall Street forecast for $100-per-barrel oil had convinced him that the market was peaking.
"This morning the price is down to $54, so we're on our way to $40," he said.
http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=...
In a somewhat related story, GM showed it's "Volt" a series hybrid (although they don't like to call it that) showing a real world car that could be revolutionary, getting 100 plus miles per gallon in mixed used, and infinite onboard fossil fuel mileage in local around town driving, due to the electric drive (the cars wheels are never driven by the fossil fuel engine, used only as a range/performance enhancer by keeping the batteries charged)
It is a stunning piece of technical work, EXACTLY the car that the "Plug hybrid" supporters have always known has been possible for years, but is at least 3 to 5 years away, if ever. The combined weight of projections from General Motors, ExxonMobil, the Department of Energy's EIA, and CERA mean that no one in the executive suites are in a hurry on the effort needed to reduce energy consumption. And the American public and press seem just as uninterested, as the Volt showcar was not even featured on most national news coverage of the North American Auto Show, instead pushed off center stage by a new flashy Rolls Royce with a push button umbrella compartment and a Ford minvan with an artificial "electronic fireplace" and the full assortment of mobile hotel electronics, done up in art deco pastel colors (it was an atrocity, to put it mildly, but the crowds loved it...:-(
Oh well, a few thousand more troops in the burning sand and the road goes on forever and the party never ends,,,,,
Roger Conner known to you as ThatsItImout
I was on a panel with this gentleman (the chief economist of GM) about 18 months ago discussing US energy security and Chinese oil demand. Privately, between sessions, I engaged him in discussion about oil depletion, peak oil, and alternatives, and he was--to put it bluntly--the economist's economist in his thinking. He said "There's something about energy that makes even sane people crazy talking about it", "Oil is just like any other commodity", and that "when oil gets to a certain price, we will switch to alternatives", denying that declining oil supply might create any problems. I asked him where the energy would come from to produce those alternatives (having just shown the assembled conference that for China to reach an E25 blend target would require 21% of its arable land), but he wasn't accustomed to thinking in those terms. To him, the input was nothing more than financial cost, which he argued would be feasible in a regime of high oil prices. So I reprised the Simmons bet with him for 2010 (the one he did with the NY Times columnist), and I fully expect to be paid. So despite GM's nod to alternative-powered vehicles with their concept cars, I truly doubt they are actually convinced of a peak oil crisis any time in the future.
Isn't it possible that Saudi Arabia can hide their production woes in 2007 behind the fact that there is little demand for them to produce at 10mbpd?
Due to market speculators, it is possible that 2007 will not see new highs, so SA will not produce more.
I hope you are not saying 2007 will definitely see Saudi Arabia force to go all out as they have done in 2005.
What's the point of a long-term contract if one party can change its mind?
This is from the BBC
http://news.bbc.co.uk/2/hi/business/6243573.stm
"However, Russian Energy Minister Viktor Kristenko said the row with Belarus which led to the pipeline closure constituted a "force majeure" - which means that the events are beyond the country's control and it is free of its obligations."
Brian, I don't think you can assume that at all. All this has to do with the current OPEC production cuts. Saudi is leading the way in production cuts. According to the EIA they produced, crude only, 8.8 mb/d in both November and December. http://www.eia.doe.gov/emeu/steo/pub/3atab.html
Those contracts go back several months but the cuts are more recent. They simply had to cut some of their promised deliveries if they were to keep their commitment to OPEC to cut production.
However Saudi Arabia began cutting production long before they were obligated to by the OPEC cut agreement. They produced only 8.8 mb/d in October, a month before the OPEC cuts were scheduled to go into effect.
Okay, they were under no obligation to OPEC to renege on their promises to Asian customers in October. Yet they produced the same amount of oil before the cuts went into affect as they did after the cuts went into affect.
Is it any wonder why some of us doubt the word of Aramco? But I can't say as I blame them. They have the perfect cover now. They no longer must claim that they have oil but no customers. They now can say "we have customers but are obligated to our commitment to OPEC to cut production.
Another point. The Saudi price of oil is not directly tied to the NYMEX. It is more closely tied to the Oman/Dubai crude price.
http://www.mees.com/postedarticles/oped/v49n37-5OD01.htm
Ron Patterson
Darwin: Thanks for the info re Saudi crude pricing.
So KSA has been producing 8.8 million bpd for the last 3 months, but are supposed to be experience a pervasive, always present decline of 8.8% year over year? I guess next your going to tell us that that 8.8% decline can occur only in the first 9 months of the year and still be valid :P
No - they are experiencing a decline in existing fields (according to reliable sources - you know, people actually responsible for what comes out of the pipeline at Aramco). They are also bringing a series of new and new/old projects on-line (edit- or in the case of old/new, reactivating old projects).
The discussion concerns the pace of acknowledged current Saudi decline, new production in the short term, anticipated decline, and anticipated new production in the longer term.
Seeing as a few of those numbers will only be known in the future, the debate tends to be one of forecasting, if not prophecy.
Personally, I don't think the Saudis are ever going to go beyond 12 mbpd, much less 15 mbpd, but that is merely my opinion - plus that of a certain Saudi who would be expected to be in a position to know something about the basis for such forecasts. (OK, to dispel the suspense - he is Saddad al-Husseini, the former head of production at state-owned Saudi Aramco.)
It won't surprise me much if Saudi Arabia never goes above 10 mbpd ever again, though it can't be ruled out. After all, OPEC intends to defend $60 a barrel, the world's new $20 level.
Hi expat,
Thanks.
Expat says:
"Seeing as a few of those numbers will only be known in the future, the debate tends to be one of forecasting, if not prophecy."
In my last set of questions (Jan 3), to WT Jeffrey and Robert R, (and after asking, I unfortunately was unexpectedly away for several days)...I was trying to get at something like this:
What - exactly (specifically) - is the description of the "data" that, if it were known, would settle the question? And, could someone please just set this out? (For the novice.)
Or...is it the case, that even with perfect "data", one could still not say something definitive that would satisfy the position Robert R is presenting, in terms of his questioning WT Jeffrey*s position?
In other words, is it the case, that having a set of numbers, for example, production to date, all information on field exploration and initial estimates, etc. (whatever else one might say) - having this, we could say - *for sure* - with what we could describe as "scientific certainty" ...what, exactly? (URR?)
That we have numbers to fit into a Hubbert model? That we can thus predict the URR?
Or, would the issue then (with "perfect data") be "no model needed - we know everything we need to know" in order to...predict, say, URR? (Is URR all we*re after?)
(Of course, it seems, even w. URR, we*d need to get into other factors about how production might look on the downside of Hubbert.)(but let*s put this aside for a minute.)
In other words, Roger C says "We*re running blind" (not a direct quote, my approximation of what he says). Okay, so, my question is: Is blind both a missing data state *and* a theoretical state? Or, simply a "missing data" state. Given data, then no quarrels?
(Or, could someone still pick a quarrel w. Hubbert?) (But they*d be grasping at straws, or ...we can bring in the other Hubbert-bolstering models to make the case...)
So, it seems we should be able to reach a consensus position on what is an accurate statement to make...?
Something like this: Just as an example: (Fill in the blanks):
"---If we knew X, (details on what X consists of)
---Then, we would know...Y.
---Which, when place into models of consumption A,
gives us the following implications: (whatever they may be). The models have these limitations...(whatever).
But not knowing this crucial X set, we can look at other factors as well, such as Jeffrey*s list of "coincidences?" etc."
Yes?
Am I making sense? If not, can you please help me out here? Thanks.
PS. Which is not to minimize at all Jeffrey*s list. The list might be part of the sample statement, in either case.
PS2 for some reason, it*s not letting me use single quotes tonight and still want to post while I can.
It makes sense as the main topic of the discussion is essentially the future, which means the unknown, though not the unknowable.
At this point though, we can start spinning into various philosophies and tangents, but to give a clear idea of how hard the future is to know, the fall weather North America and Europe have been experiencing for the last 5 or 6 months was not part of any reasonable discussion about oil consumption beforehand. And if there is a sudden turn in mid-March to -10 (either scale) weather for weeks with a meter of snow covering the ground over a continental scale, things will look very different again.
And using price as an indicator is fraught with even more problems, which is why I like to focus on concrete measures - for example, yes, Saudi Arabia, Russia, and Norway are exporting less. Why that is, and what that means, then again becomes a discussion with different perspectives.
It is easy to get lost in the game, which is why the amount of oil coming out the pipeline is a good measure (not counting the entire logistical/geological discussion) to avoid losing sight of what is going on - currently, worldwide oil production (edit - conventional, etc., etc.) is declining, and has been for more than a year by all reliable sources of information available.
My opinion remains unchanged - peak has arrived, and from this point on, that reality will be ever harder to avoid. But it is just an opinion, which means as the facts change, so will my opinion. Till now, the facts haven't changed - though if we wish to argue logistical/geological peak, that could get complicated. My opinion - the current coming logistical peak (less demand from America as its economy faces hard times seems a fair prediction) will merge fairly seamlessly with the geological peak, in a way making it hard to recognize - as it will seem that merely more investment/higher prices after an economic decline will lead to higher production just at the point where higher production becomes geologically impossible - and then I expect the arguments to last a few more years, until it is beyond dispute, the amount of oil being pumped will never again increase. I tend to avoid that discussion in general - whether we could have produced more oil 'if' is not all that fruitful in my eyes.
I don't think those customers were given the choice between taking less and paying more - I've seen no reports that would suggest that. Aramco just cut the level supplied unilaterally - they did it before while the price was still over $60/bl.
WT: Two seconds after I posted I remembered that your consistent thesis is that Aramco doesn't have the ability to meet these contracts. No reply necessary.
An interesting Financial Sense editorial: http://www.financialsense.com/fsu/editorials/dorsch/2007/0109.html
Most interesting thing I saw was a chart showing that Russian oil exports to non-CIS countries were down by 600,000 bpd from June, 2006 to December, 2006.
Note that total Russian and Saudi consumption (total liquids) increased by 560,000 bpd from 2004 to 2005. I suspect that we probably saw at least this much of an increase in 2006. Ponder the impact of these two countries increasing their domestic consumption by about one mbpd every two years. Note that their total liquids exports in 2005 were 15.8 mbpd. In 2005, it took all of the exports from the next seven largest exporters to equal Russian and Saudi Arabia's combined exports.
Saudi crude + condensate production will apparently be down by 1.1 mbpd by February, 2007, from the high in 2005.
WT,
Do you or anyone else know what crude oil inventory levels are in China?
I've heard that they are building up their inventories. Say they want to increase their inventories by another two months of demand in 2007. This means that at consumption of say 7 million barrels/day, they need 7 mmb/d*60 days=420 million barrels.
420mmb/365 days equals a significant additional demand of 1.2 million barrels/day. Given "voluntary" production cuts in Russia and Saudi plus China's increased demand, the net export storm could start in about Oct - Dec 2007. Expect China to be just as aggressive this year in buying oil assets as in 2006.
They are building their own SPR. I think Phase One is around 100 million barrels or so, but they apparently plan to ultimately more or less match the size of the US SPR: http://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves
The wikipedia link
http://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves
says that "China has begun development on a 800 million barrel strategic reserve" "to be completed by 2008".
the source of this is http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BBDDC6EA6-C0E8-4...
and http://www.iht.com/articles/ap/2006/10/06/business/AS_FIN_ECO_China_Oil_...
Another way to estimate China's demand just for their SPR, not for daily consumption, is to assume China SPR=100million barrels on Jan 2007. This means they need an additional 700 million barrels to achieve 800 mmb target.
700 mmb/(two years Dec 2008 - Jan 2007) or 730 days = 0.96 million barrels/day. This is a significant demand increase.
How many other countries need to increase their SPRs? What about increased SPR demand growth from India, South Korea, Middle East and others?
Found a recent article which states that "India is a new-comer in the community of strategic oil reserve holders. It has begun the development of a strategic crude oil reserve expected to be pegged at 40 million barrels."
http://www.bruneitimes.com.bn/section/opinion/26Dec2006-4.php
40 million barrels is only about 15 days on crude oil demand in India. That's not much!
Say that India starts filling their SPR in April 2007 and takes a year. 40 mmb/365 days gives increased demand of 0.11 million barrels/day. That's not much demand but it still takes half of the North Sea's Buzzard production.
Hello TODers,
Copy of my REDDIT post:
Europe, Asia, and Russia need to sit down now and hammer out some agreement that follows the framework of ASPO's Energy Depletion Protocols, otherwise this kind of situation will be occurring constantly greatly increasing the chance of resource wars. Mutual cooperation for Detritus Powerdown and Biosolar Powerup should be preferred to the last man standing scenario.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hello TODers,
Of course, things are going just swimmingly in Turkmenistan too. Suspected activists are surrounded by six 'interviewers' and strongly urged to stay calm before the election:
http://www.gundogar.org/?0220043703000000000000011000000
----------------------------------------------
The government steps up security in advance of elections for Niazov’s successor.
There are six candidates for the February 11 ballot, but if everything goes to plan, acting president Gurbanguly Berdymuhammedov will become the next head of state.
---------------------------------------
Obviously, this country cannot afford expensive Diebold electronic-voting machines, but threatening reformers that they will die boldly in exact imitation of a hanging chad, or an incorrect vote is a very cost-effective way to eliminate vote recounts from a close election.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Are these the symptoms of scarcity? The consequences of growing demand in face of dwindling production?
Oil Production in the North Sea will go down at least 200 kb/d this year, and demand is not exactly matching. Gas Production is at peak.
In the joint conference of the European Commission and the German executive, this crisis was taken as another sign for energy diversification, failing once more to acknowledge the real problem: growing energy consumption is no longer desirable or even possible.
Hello Totonelia and Luis
Today Jan 10th the EU commission presented the new energy and climate change strategy. It has to be approved, naturally.
The EU will unilaterally save 20% emissions (base year 1990) by 2020 and up to 30% (Kyoto #2 ??)if other industrialized nations- like the US, Canada, China and Australia would commit themselves also :-)
links:
http://europa.eu/press_room/index_en.htm
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/16&forma...
Q&A http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/17&forma...
Limiting Global Climate Change to 2 degrees Celsius
Summary
The Communication, a key element of the Commission's new energy and climate change strategy, sets out proposals for action by the EU and the rest of the international community to prevent global climate change from irrevocable consequences This means limiting global warming to no more than 2°C above the temperature in pre-industrial times. The Commission's central proposal is that, under a future global agreement, the group of developed countries should cut their emissions of CO2 and other 'greenhouse gases' responsible for warming the planet to an average of 30% below 1990 levels by 2020. The EU should take the lead by committing autonomously to reduce its own emissions by at least 20% by 2020 – a cut that should be increased to 30% as part of a satisfactory global agreement. In the longer term, greater emission reductions will be necessary and developing countries will also have to be part of the global effort: worldwide emissions will need to be cut by up to half of their 1990 levels by 2050.
Regards And1
In face of Peak Oil reducing emissions is easy; the hardest part is to reduce those emissions (energy consumption) and keep society together and the economy afloat.
Before throwing our hats in the air lets wait and see what reforms and measures the Commission has to achieve such goals.
Re "the hardest part is to reduce those emissions (energy consumption)" .
100% correct. We have heard these tunes before, but it is on the other hand not impossible.
Professionally I can demonstrate and calculate that is easily done. A lot of our energy use is luxury or habit related. I am pt.reducing my family energy consumption. In 3-5 years it will be reduced by at least 1/3 primarily by reducing domestic and transport energy use. Transport & domestic energy is 70% of the Danish Primary energy use so this is the best place to start.
My family could on a very short notice reduce our annual energy consumption 20% almost without sacrifice for us and little or no damage to society. It is my family's lazyness and habit that prevent us for doing something effective momentarily.
Reduce room temperature in winter from 23-20 oC gives +/-15 % heating energy savings ~= 4-5% of Family energy footprint. Making my home more draught free and better insulated will reduce heating energy use by 1/3. No more tumbler dryer, better use of washing machine and installation of solar heater for hot water instead of electrical heater will halve our electricity use. Flourescent lamps, one 40 mpg car instead of the present two. Light foot on accelerator = 20% petrol savings etc.
So what we need is "stick and carrot policies" and some elected leaders willing to ask the right questions to energy system specialists and willing to implement the results in legislation. More expensive energy could help and tax benefits/ loans for jumpstarting society in the right direction. It works. The Marshall aid jumpstarted Denmark after ww2.
And if The EU council of ministers approve on the 20-30 % savings, I will throw my golf cap in the air (hcp 11.4).
Reducing domestic energy and energy supply systems(oil, Gas, district heat, firewood, electricity)use will possibly work positive for the national economy.See report on this here (free to download) http://shop.ceps.be/BookDetail.php?item_id=1399 .