DrumBeat: January 13, 2007
Posted by threadbot on January 13, 2007 - 10:05am
Venezuela to nationalize 'absolutely all' energy sector
Chávez tells parliament: 'We have decided to nationalize the whole Venezuelan energy and electricity sector, all of it, absolutely all.'
Climate Change and the Coming Energy Crisis
Imagine this situation: Two of your dearest friends, a retired couple, have just returned from vacationing on a remote, sparsely populated island on another continent. They invite you to dinner and announce their surprising plans. They intend to move to that country with their grown children, reduce their consumption, grow their own food, and help their grandchildren survive the terrible years ahead.Within ten or twenty years, they believe, Canada will be a miserable place to live because of fuel shortages. The price of oil will skyrocket. Houses will be unheated, and hardly any cars, planes, tractors, or trucks will be moving. The economy will be paralyzed. Millions will starve or freeze in poverty, especially in northern cities. Violence will prevail as marauders try to seize the necessities of survival. That's why your friends have decided to leave.
The U.S. sees its alliance with a republic of just 8.4 million people--about the same population as New York City--as key to securing energy supplies at a time when China and the rest of Asia are competing for new sources. The Caspian, which is largely unexplored, probably accounts for 7% of the world's oil reserves, and the oil flowing through the new West-bound pipeline still represents a mere 1% of global supply. But ultimately some of the gas from Khazakstan and Turkmenistan's much larger natural-gas fields across the Caspian from Baku could flow through BP's pipelines, turning to the West rather than to Asia. "The pipeline is changing the strategic map in a very major way," says a senior State Department official.
Snatching Victory from the Jaws of Defeat: How the Democrats can Keep from being Arrested
Call it the downsizing of America. When you throw in peak oil and global warming, it seems inevitable. Conventional wisdom has it that Americans do not want to hear that tough times are coming, and that somebody inevitable will be scapegoated for the loss of empire and easy motoring -- the most likely scapegoats being those identified as liberals and lefties, including the Democrats, whether they like it or not. The ground has been prepared by a generation of demonization of liberals. Hence their terror.
Cheap oil's life is likely to be short
The slide in petroleum may or may not have run its course for now, but whatever happens in the next few months, it would be unwise to expect long-term relief from expensive energy.
Biofuel demand will make WTO accord possible
The booming demand for corn as a fuel source will make it easier for the US to agree to cuts in farm subsidies, making a new global trade agreement possible this year, the US ambassador to the EU said.
Greenfuel Technologies teams with IGV in Germany to turn greenhouse gases into biofuels
Under the terms of the agreement, GreenFuel and IGV will share proprietary algae bioreactor technology in an effort to accelerate the commercialization of biofuel production from recycled carbon dioxide in power plant flue gas emissions.
Hydrogen cars still a long way from take-off
The dream of hydrogen-powered cars emitting only water vapour is slipping further into the future as car companies grapple with some of the problems.
European Energy Group Says Wind Power Now Cost Competitive
Wind power in Europe is emerging as a cost-effective option to the more conventional power choices of coal and natural gas, as these power plants face increased costs and fuel risks, according to a new briefing from Emerging Energy Research (EER), an advisory firm that tracks emerging technologies in global energy markets.
Investing Cautiously in Solar Energy
Towards the beginning of the summer, as fuel prices were skyrocketing, the public and government started to seriously consider alternative forms of energy. The government has been offering tax-rebates for buyers of hybrid cars in an effort to promote the changeover. With this type of legislation, we can expect to see progress made in other types of environmentally friendly initiatives.
U.S. Sustainable Energy Announces Patent Pending for New Organic Biofuel
The new biofuel, referenced internally as SoyMazia 128, demonstrates several properties superior to any other green fuel source available, including a heating value of 128,000 BTU per gallon.The USSE biofuel costs less than fifty cents per gallon to produce, and 1 bushel of soybeans can create literally 5 gallons of biofuel - in comparison to 1.5 gallons for any other biodiesel on the market.
Syria says oil production witnessing gradual decrease
Syrian Minister of Petroleum and Mineral Resources Sufian Alaw said on Friday that the country's oil industry is facing great challenges as the production was witnessing a gradual decrease.
Venezuela minister threatens oil belt takeover
Venezuela's new economy minister warned yesterday the Opec nation could “nationalise” the multibillion dollar heavy crude projects in the Orinoco oil belt run by US and European companies if talks for the state to take a majority stake in the enterprises break down.
Africa: Continent 'Entitled to Reap the Benefits of Atomic Energy'
There must be no restrictions on African use of peaceful nuclear technology, speakers said at the continent's first conference on nuclear energy's contribution to sustainable development.
China's Middle East journey via Jerusalem
The crucial Saudi role in the proposed buildup of China's strategic oil reserves should not be underestimated. China is planning to build four strategic reserve bases at Zhenhai, Daishan, Xingang and Huangdao, which when completed next year will be able to hold the equivalent of one month's national oil imports. Beijing plans to expand the reserves to the equivalent of three months' net oil imports by 2015.
16 Asian nations to agree on boosting energy security
Leaders of 16 nations from South Korea to Singapore are expected to agree to boost Asia's energy efficiency and combat climate change by seeking new fuel sources, particularly biofuels, according to a draft document seen on Saturday.
Energy inefficiency could kill pure cellular
Noting that energy costs represent the third most expensive operating expense (OPEX) for carriers today — and that energy costs continue to fluctuate and could rise — the authors claim that the increase in data traffic resulting from the rise of mobile broadband "will push per-subscriber energy OPEX for cellular solutions past acceptable barriers".
Chavez promises Nicaragua 200-year oil supply
Venezuela will supply Nicaragua with 10,000 barrels of affordable oil per day, and build a refinery and 32 power stations that will produce 80 megawatts of electricity.'The oil that Nicaragua will need for the coming 200 years lies in Venezuela,' Chavez said.
Senate measure might threaten TXU's plans
A bipartisan Senate bill introduced Friday would place mandatory caps on global-warming gases and could threaten utility companies across the country that own coal-fired power plants — including TXU's plans to build new coal-fired plants in East Texas.
With three ethanol plants proposed for the Cape Fear region, some people want to know what else might arrive with the new jobs and tax revenue.
Pakistan: Nepra slams govt for forcing higher tariff
In an unprecedented move, the National Electric Power Regulatory Authority (Nepra) has protested against the government for what it called bulldozing the regulatory process by forcing higher tariffs in the name of energy crisis without providing even the basic information.
Pakistan: Need to expedite exploration of alternate energy emphasized
The seminar was aimed at initiating a constructive debate on the issue and finding out possibilities of viable energy and water options for the country. The speakers were of the view that rich Coal reserves in Pakistan can help meet the demands for over five decades.
American Chamber of Commerce says Dominican energy crisis grows
The Dominican Energy Consortium (CDEEE) is seeking a solution in the wrong place by pursuing renegotiations of contracts, when instead the solution lies in fighting fraud.
Lloyd's boss demands action on climate change
Governments and businesses must act now against climate change, and the United States needs a bigger public debate about its risks, the chairman of the Lloyd's insurance market said.Peter Levene warned that vast storms bigger than Hurricane Katrina are likely to batter the United States in coming years despite a relatively calm 2006 Atlantic hurricane season.
"Today the insurance industry faces the prospect of a 100-billion-dollar mega-catastrophe twice the size of Katrina," Levene said in a speech at Washington's National Press Club.
Global Warming Scare Hits Ski Country
Residents of Park City, Utah Turn Out in Force to Hear About Global Warming, and the News Wasn't Good
2nd Annual Indiana Energy Conference continues Saturday
The first speaker presentation will be from Richard Heinberg, a leading expert and author on the subject of Peak Oil. His presentation will focus on ways the average citizen can prepare themselves, and their communities, for a world that will be forced to be less dependent on petroleum for everything from transportation to agriculture.
Peak Oil Passnotes: Oil Down, Browne Down
The oil market is, as usual, performing a strange dance. It has opened the year showing great weakness with little signs of abating. As we mentioned last week this was not unexpected. But what is the most interesting development is that the $54.50-$55 floor price that has been so resilient over the past 18 months has finally been broken.
Someone wants to start a peak oil task force in Minneapolis.
Rich in oil and gas, Texas looks to geothermal
HOUSTON - Texas is known for oil and gas, but the state said on Friday it will sell its first leases for development of geothermal energy.
Aramco postpones Khursaniyah oil and gas project
According to an official at Saudi Aramco, the oil giant postponed the commissioning of the 500,000 bpd Khursaniyah oil and gas project to the fourth quarter of the year, a few months later than the previously announced date without giving the reason for the delay, Arab News reported.
Bulgaria wants to reopen two nuke units
Bulgaria will try to push the European Commission to let it reopen two nuclear reactors closed due to safety concerns.
Globalization Promotes Oil Depletion
Due to globalization and "free trade", more and more businesses are shutting down factories in nations with higher wages, moving production to low wage countries in East Asia, Eastern Europe, and Central America. People in higher-wage nations should not only look at this in terms of employment loss, but in depletion of oil and increased pollution.
Russia cuts duty on Belarus oil exports
MOSCOW - Russia has reportedly agreed to slash the duty on oil exports to Belarus by 70 percent and Belarus will share with Moscow a substantial amount of profits from the refined oil products it sells to Europe.
9 South Korean workers in Nigeria freed
LAGOS, Nigeria - Nine South Korean pipeline workers and a Nigerian kidnapped in southern Nigeria were released Friday with the help of a youth group in the restive oil region, the regional government said.
According to the figures I've seen, we reached the peak of world oil production in December 2005. If that is so, what does it mean for China?
Administration: No Plan To Strike Iran (AP)
We believe that we can interrupt these networks that are providing support through actions inside the territory of Iraq, that there is no need to attack targets in Iran itself," Gates told the panel, adding that he continues to believe that "any kind of military action inside Iran itself, that would be a very last resort.
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Iran Policy is "good for Peak Oil".
Yeah, it's interesting after Emperor Junior's speech and then the capture of the Iranians by American soldiers, the price of oil didn't shoot up significantly yesterday.
If you listened to a lot of the idiocy at the beginning of this crusade, there were more than a number of people talking about blowing up the Middle East, it seems they're still in charge. Anyone thinks they can blow up the Middle East for less than $100-$200 a barrel, they really are crazy.
Or maybe everyone thinks its just more incompetence, but that's getting pretty expensive too.
Kevem, my friend.
Come one. I don't even really get it. That's how I know you are not an American. Golf balls in outer space. We get much dirtier than that now. Whatever.
I always loved you , Brother. When you wanna hang out, I'll give you some lines - John or Mary.
Movie response is horrible. Think they filmed it in 1987. Assholes. I need some pancakes. These douchemonkeys.
austex seems pretty cool. I wonder how much he knows about oil? Seems like a young Jimmy Martin. He should go back to Fenway if that's how it's gonna be, though.
You sure sound a lot like that rectal ooze, oilCEO
Swco posted this link last night.
http://www.eluniversal.com.mx/finanzas/55660.html
"The production of the main oil deposit of Mexico, Cantarell, will collapse drastically as of September of this year."
It is in Spanish and I would just love to read it. Can anyone translate it and post the text on TOD? It is quite short and should not be a problem.
Ron Patterson
Sure thing, old chap.
PEMEX WILL MAINTAIN PRODUCTION FROM MULTIPLE SOURCES [translator's best guess for a colloquialism]
It will produce 700 Mb/d less than last year
===
Production from Mexico's main oilfield, Cantarell, will fall rapidly from September this year.
According to the PEMEX 2007 Annual Operating Plan, the development will be producing 700 Mb/d less than the maximum achieved last year, which was 2.1 MMb/d.
With the remaining level of production from Cantarell it will be possible to maintain current levels of production of gasoline - in the Magna and Premium brands - which the country consumes. However, it is equivalent to 50% of the total run of PEMEX's six refineries.
The document, which EL UNIVERSAL has obtained, states that in the fourth quarter Cantarell will be producing 1.329 MMb/d due to its accelerating decline, which will make it harder to achieve the production and export targets fixed by the federal government fot this year.
The plan, which is the driver for the Mexican oil industry, states that as of the end of January of this year the reservoir, considered the sixth largest in the world, will produce 1.723 MMb/d on average, and in December it will be delivering 1.429 MMb/d. However, not even the additional volumes from the Ku-Maloob-Zaap development, which according to ex President Vicente Fox were going to offset the decline of Cantarell, will be enough to prevent the depletion of Mexico's exploitable reserves.
INVESTIGATION DEMANDED
Referring to the matter, Jorge Chavez Presa, the undersecretary for Energy Policy during the administration of Ernesto Zedillo, stated that it is necessary to undertake an audit of PEMEX's use of the additional resources which it received during Vicente Fox's administration, "which were much higher than its budget under the three previous administrations and which have not generated additional production or reserves, as we can see in Cantarell".
He stated that the ex president had not fulfilled his historic responsibility. "Every administration gave its successor the means to increase oil production. But Calderon inherited a declining industry".
Interviewed during the "2007 Seminar on Economic Perspectives on the Challenges for 2006-2012", organized by the Mexican Independent Institute of Technology, the professor said that there was a need for transparency and accountability in "a matter that affects us all".
"We need to know what happened to all the extra resources that PEMEX received. Was the wasted money invested under the PIDIREGAS framework? [translator's note: no idea what this is]. We need to be critical".
He explained that under Fox, institutions did not function properly, neither the State Comptroller nor the Senior Auditor, because "PEMEX had all the money in the world due to the high price of oil, and didn't know how to use it".
Better title
PEMEX STILL HAVING PRODUCTION PROBLEMS
literally
PRODUCTION FROM PEMEX IS STILL ITCHY
(A "Picada" is a big platter of several kind of finger food - hence my initial guess. I was too proud to use the help of Google Translate).
From a native Spanish speaker,
PEMEX PRODUCTION STAYS IN A NOSEDIVE
In Spanish Spanish, at least, "En picado" is the way airplanes fall when they stall.
http://www.spanishdict.com/AS.cfm?e=picado
Nice. Certainly seems to fit the facts as described in the article. But isn't the gender wrong? Not the first word to flip gender between the Old World and the New World, of course.
Thanks for the translation. You too, Plucky.
Looks like a steep drop off. Anyone have any estimates on how much Ku-Maloob-Zaap will be producing? Must be huge if they expect it to make up the difference.
This story says 200 Mb/d - doesn't even come close to plugging the gap:
http://www.rigzone.com/news/article.asp?a_id=28090
Remember that 200 Mb/d is an UPPER limit on production which MAY be reached at SOME TIME in the future...
My mistake. That 200 Mb/d is a capacity UPGRADE (FPSO). Following article says the project is/was ramping up to 800 Mb/d (last paragraph). I don't know if that includes the 200 in the other article. As before, upper limit, possible, future, sometime etc.
http://www.pemex.com/index.cfm?action=content§ionID=8&catID=40&subca...
Yeah I remember reading about it in the past and it being a very big field.
I live in Texas and took a year of Spanish in college, but am defintely not fluent. Is this article saying that current production is 263 kpd and going to ramp up to 800 kpd by 2011?
Numbers are correct, but article is dated 2002. So a lot of that increase has already happened and won't be replacing Cantarell.
From the article, it sound like K-M-Z is a cluster of mini Cantarell clones. I think they might be offset fault blocks of the same formation. Certainly the process parameters are similar, on a smaller scale.
I've started to wonder what the post-peak decline rates are going to look like for some of these regions where one field accounts, or accounted, for half or more of their production. It's somewhat unusual for a large producing region to be so dependent on one oil field. For example, the East Texas Field only accounted for about 7% of Texas production in 1972, when we peaked.
One example of what happens when one big field declines is Alaska, which had about a 6% decline rate in the first 12 years or so after Prudhoe Bay peaked, versus a long term decline rate of about 2% for the Lower 48.
In any case, Saudi Arabia, Mexico and Kuwait (all top 10 net oil exporters) are all in the same boat, hugely dependent on one oil field.
The problem is that, while these regions may show somewhat of a rebound in the future (but still well below their peak production), the short term decline rate in all three cases could be vicious, because they are so dependent on one field. Obviously, this appears to be precisely what we are seeing in Mexico.
No, the story says 200 kbpd (thousand barrels per day) not mbpd (million barrels per day). Please get the units right as it makes a rather large difference. Or, if you want to express it in mbpd, please do the conversion - 0.2mbpd.
Who? Stop raggin on the newbies. Teach'em how to do it. Member, Darwinian don't know the diff between a mill and a thousand, See what I'm seeing? Understand? Put your fuckin shirt on. Yo! ...We don't get fooled again... pick up my guitar and play... just like yesterday... the change it had to come... I knew it all along...
For goodness' sake let's not get into a flamewar over this. I would rather expend my energy on debating the date and nature of Peak Liquids, whether it's 90 Mbd, 90 mmb/d or even 85 million (were you confused by that?). Anyone who thinks that K-M-Z is producing 200 million barrels per day would probably misconstrue the entire article. There's nothing unusual about a language that requires meanings to be glarked from context - English would be a good example.
The upstream oil business takes a proudly independent view of unit system standardization. M, MM and MMM are customary abbreviations for thousand, million and (occasionally) billion. To confuse matters further, they can be either uppercase or lowercase. If we're being strictly metric (implied by k), wouldn't 200 mbpd be 200 milli-barrel-poise-day?
This will become a familiar song and dance; due to under/misplaced/bungled/poorly blah blah blah investments, the production from the Giga field will trend lower...never a mention of geology, because you can't beat up on geology and pass the buck.
Sadly, oil was the one thing that Mexico had going for it in a global trading situation. Shortly, they will be down to the, is it? 1.5 million barrels for domestic consumption, IF they aren't obliged to export that first and drive on the remainder. If the USA had the per capita oil consumption of Mexico it would be self sufficient. How about a Continental Energy Policy based upon per capita consumption and may the most efficient win? Given the solar potential of Mexico, I'd bet on a big transfer of capital. While business is presently chasing the lowest labor cost, at some point energy availability will drive location.
As I recall, Mexican hotels are required to have solar hot water heaters; in this regard they are ahead of us. Mind you, in Mexico it doesn't take much more than a bucket on the roof. But they have started.
'...because you can't beat up on geology and pass the buck.'
This is one of the things which makes peak oil such a pleasure - I grew up in a time when numerous lies and falsehoods were being exposed, and unquestioned beliefs being challenged, and then watched that process (with its own flaws, of course) come to a stop, and be written off as a 'low point' of American history.
When less comes out of the pipeline, and essentially ever less following that point, Americans can have a lovely discussion with reality. I, for one, expect to enjoy seeing how reality won't care about anyone's opinions (including mine - I am older now, and realize just how much evil humans do to one another, but hate is like that).
After all, they already dismissed people trying to deal with that problem decades ago.
In a way, it is amusing - when the American military left Karlsruhe, the base library was given as a gift to the city's library system. Over the years, as the library sold off its older books, I have collected a fairly interesting collection of 1970s books concering sustainable living, from organic gardening to insulation and building techniques to solar systems for heating and electricity. The amount of thought, talent, and wisdom in those books makes it hard to imagine they come from the same time and place in which magazines like People and Us were first launched.
Or not, seeing how America is today.
And as for some people who care about peak oil 'credibility' - the people concerned about this in 1978 weren't worried about 'credibility,' they were worried about how to live differently. Seems like they were the deluded ones, as Americans have no interest in being told how to live better, whether it is 6 weeks of vacation or universal health care, or functioning transit systems and walkable living spaces.
I, along with a good number of people, were wrong to think that oil production would clearly decline by the later 1980s, or before 2000. We weren't wrong in looking at what that meant, and how to prepare for it.
The future is now - enjoy it.
You need to watch SNL more. You shoulda seen the piece on the news about Steve Jobs and Apple. Don't get me started on Beckham.
The Future? You seen "Children of Men" yet, or what? They're talking about this as top ten this year. I'd say that's close. Read Slate. Saw it here last year. The Bond is always early.
I actually decided to check the phrase the 'future is now,' hoping for the Doonesbury strip - not often you read 'pox' in a comic, before realizing that the Doonesbury strips found on the net aren't indexed by text. It seems as if the expression is pretty commonly used - no surprise, but for some reason, I always thought it was a particularly apt expression from the end of the days when a true football fanatic was sitting in the White House. There are many things you can say about Nixon, but his attachment and understanding of football seems to have been a part of his life.
And this was the first time in my life America confronted massive abuse of presidential powers, a stupid and losing war where the solution was to expand it into surrounding countries, and a background of currency problems and no longer growing oil production. Which is a rear view memory, by the way.
Time for another martini - but Martini Bianco, which apparently has as much wormwood as absinthe, but less alcohol. Keeps the edge off, so to speak.
Thanks a million Plucky for this translation and posting.
Of course it is all Fox's fault. He should have figured out a way to keep Mexico's oil reservoirs from peaking and going into steep decline. Perhaps he should prayed to Our Lady of Guadeloupe to petation God to put more oil in the ground.
Sorry for the sarcasm but I just could not help it. Someone must always be at fault. Fault must always be found and the culprit must be ostracized from society.
Ron Patterson
edit:
nevermind better version already posted
Energy analyst and author David Shields has written extensively on Pemex. On NPR a few days ago, he predicted that overall Mexican production would fall by at least 800,000 bpd from late 2006 to 2007, because of the collapse in Cantarell's production--as predicted by the WSJ article last year.
In that article, the WSJ, quoting an internal Pemex report, noted that Cantarell's remaining oil column of about 800'--between an expanding gas cap and a rising water leg--was thinning at the rate of about 300' per year.
This is a link to an article about a presentation by Shields: http://socrates.berkeley.edu:7001/Events/spring2006/02-09-06-shields/ind...
If you scroll down, you will see an image of Shields pointing to a Cantarell Field production graph. He is pointing out the more optimistic decline rate that Pemex was using in public versus the more pessimistic, i.e. realistic, decline rate.
Mexico has the following characteristics:
(1) Its largest field, Cantarell (accounting for more than half of its recent production), is a prolific carbonate reservoir, with a rapidly thinning oil column, between an expanding gas cap and a rising water leg.
(2) It has consumed more than half of its recoverable reserves, based on the HL method.
(3) The operator has issued misleading information about the estimated decline rate of its largest field.
(4) Its production is declining.
Saudi Arabia has the following characteristics:
(1) Its largest field, Ghawar (accounting for more than half of its recent production), is a prolific carbonate reservoir, with a rapidly thinning oil column, between an expanding gas cap and a rising water leg.
(2) It has consumed more than half of its recoverable reserves, based on the HL method.
(3) The operator is strongly suspected of issuing misleading information about the estimated decline rate of its largest field.
(4) Its production is declining.
I have repeatedly described Ghawar and Cantarell--which account or accounted for about 10% of world crude oil production and which account or accounted for more than 20% of the net exporters by the top 10 net exporters in 2005--as two warning beacons burning brightly in the night sky, heralding the onset of Peak Oil.
As I pointed out yesterday, one of the odd things about the fourth quarter was the plunge in US oil imports, while Chinese oil imports were hitting new records. Let's see, where is Bush sending large US military forces?
Nope. Nothing to worry about. Continue buying large debt financed SUV's to drive to and from suburban mortgages.
Thanks for this propitiously timed thread, posters. Has anyone on this board heard of Larry Walker?
From www[dot]madisonpeakoil[dot]blogspot[dot]com
Mexico's Coming Oil Crisis
January 23
A presentation by Larry Walker
Madison, WI - Exact location will be posted here as soon as it's determined.
7:00 p.m.
Mexico's Cantarell oil field is about to play out a classic peak-and-rapid-decline scenario over the next 3 years. This will pose special challenges for Mexico's government, its national oil company Pemex, the U.S., and the world oil market.
Sponsored by Community Action on Latin America.
In English with Spanish translation.
More information from Carol Bracewell.
this will completely accelerate the illegal immigrant situation, where Mexico and Canada join the U.S. With one currency and probably one sovereignty! It's gonna be a mess, but Queen Hillary will be in charge by then.
but as long as there is ESPN, soap network, rosie vs donald, etc.... who the heck cares?
Saudi crude oil production (EIA data; crude oil = crude + condensate) dropped from 9.6 mbpd in 9/05 to a projected 8.5 mbpd in 2/07.
From 1/06 to 7/06, Saudi production dropped from 9.4 to 9.3 mbpd--by 100,000 bpd. The Saudi oil minister blamed the "voluntary" decline on an inability to find buyers, even for "their light, sweet oil."
Apparently, the Iraqis and Russians were looked harder for buyers, because they increased their production by 830,000 bpd from 1/06 to 7/06.
Let's see, for every barrel of oil that the Saudis couldn't find buyers for in July, relative to January, the Iraqis and Russians were able to sell 8.3 barrels.
Over this January to July time frame, US light, sweet spot prices went from $61.63 to $74.41 (I realize that different grades of crude sell for different prices in different parts of the world).
Two possibitlies:
(1) Saudi production is declining--as predicted by the mathematical and historical models--despite their best efforts, because of depletion or
(2) The Saudis are voluntarily cutting back production as oil prices hit the highest US nominal level in history--because they couldn't find buyers for all of their oil, even "their light, sweet oil"--while Iraq and Russia were able to sell an additional 830,000 bpd (even "their light, sweet oil") over the same time period.
Given that we have an example of the operator of the world's second largest oil field lying to the public about their largest field, which of these two scenarios for Saudi Arabia is more likely?
Did you notice that in Plucky's translation, Cantarell is "considered the sixth largest field in the world"? Would they be talking about remaining reserves in the field? Or have they never let their people know how big the field was to begin with?
The row over money at Pemex is interesting too: These things tend to easily get out of hand, in a volatile political climate combined with sharp decreases in resources AND revenues. Reminiscent of the GAO mentioning $450 bilion was missing from US coffers last year. Just disappeared. Just that Pemex revenues are an order of magnitude bigger for Mexico.
By the way, your Ghawar-Cantarell comparison looks solid and spot on. It's a really bright idea to use Ghawar to bankrupt Iran, the apparent latest bright genie to come from the White House basement.
6th in terms of reserves, 2nd in terms of production rate.
Ah, that explains the discrepencies.
I've always wondered about that.
Why? You're a democrat. No discrepancies there. I've never wondered about you. Tcck. Tcck! Tcck. Is this thing on? Heeellllloooo?
It is at times like these that I wish Super G would take me on as his personal consultant/trainer/publicist/trainer
...and change his name to...
Super Jihad
(ya gotta see Alexander and Colin to understand... and Athens and Ollie Stone)
Philip of freaking Macedon. You'll make a musician out of him yet! Sailorman will laugh so hard when he sees this movie his left nut will fall off.
Yes, they were probably talking about remaining reserves. When Cantarell was producing 2.1 mb/d it was definitely the world's second largest field in number of barrels per day produced.
Ron Patterson
One of these days, one of you pansies is gonna actually publish some real numbers on Cantarell. You know Westexas can't do it. So why don't you do it yourself? Why do you wait for Oil CEO? Zeus himself asks this question. Hell Awaits.
Apparently, the Iraqis and Russians were looked harder for buyers, because they increased their production by 830,000 bpd from 1/06 to 7/06.
Or they may have been willing to sell for a lower price. As I pointed out yesterday, about half of the members of OPEC - including Iran, saw their production drop over the same period. Different countries manage their oil in different ways, just like different companies have different philosophies. But again, you ignore the data that doesn't support your argument. It seems that to you that data simply doesn't exist.
I also read something interesting a few days ago. I forget how many years ago the article said, but there were 15 oil fields capable of producing more than 1 million barrels per day. That number has dwindled to 4. Yet during that time worldwide oil production has greatly increased. That's one reason it is a mistake to point to these majors and ask how world oil production will increase once the other 4 are all definitely in decline. Well, it isn't like there isn't a precedent for that.
How many countries, showing reduced production from 1/06 to 7/06, complained about an inability to find buyers for their oil, even "their light, sweet oil?"
Robert,
Let me get this straight.
The number of fields capable of producing one mbpd or more has dropped from 15 to 4.
At least three of those remaining four are in decline or crashing. We just can't confirm that Ghawar is in decline or crashing, but we know that they had to redrill the field with horizontal wells, because the vertical wells watered out, and they are still--at best--getting one barrel of water for every two barrels of oil.
The only new one mbpd and larger field on the horizon is the Kashagan Field that--at best--won't hit peak production until 2020.
You are using all of the above as evidence for rising world oil production?
How many countries, showing reduced production from 1/06 to 7/06, complained about an inability to find buyers for their oil, even "their light, sweet oil?"
So then you think that Iran, a country that has not peaked, just lowered production because...? Obviously because they didn't have enough buyers to justify keeping the production rate high.
You are using all of the above as evidence for rising world oil production?
As I said to Ron yesterday, no need for straw men. Let's talk about what we know. I found the reference:
http://www.peakoil.net/AIMseminar/UU_AIM_Robelius.pdf
It was from Thursday's Drumbeat. It says:
20 years ago, 15 fields had the capacity to produce more than 1,000,000 b/d. Today only four field can produce that much.
So, in the past 20 years, 9 fields capable of producing more than 1 million bpd dropped out of the super-major category, leaving only 4 of the orginal 15. How did world oil production fare? Was it sharply down? No, it was sharply up. World C+C production during the past 20 years has increased by almost 20 million bpd.
The lesson here? Just because the remaining 4 fields are in or will shortly be in decline, does not mean the entire world will be in decline. Smaller fields may pick up the slack, as evidenced by what happened in the past 20 years. I am not suggesting that world oil production won't start to decline 3-5 years from now. But I am suggesting that arguing for a worldwide decline based on the decline of the remaining 4 majors ignores the historical precedent.
Let's back up.
Daqing is actually producing less than one mbpd with a 90% water cut.
The Kuwaitis have admitted that Burgan is in decline. I have seen references to rising water cuts, but I haven't seen a specific number.
Cantarell is crashing, with up to a 40% annual decline rate as their remaining oil column of 800' (as of early 2006) thins at about 300' per year.
Ghawar had to be redeveloped because the vertical wells watered out, and the horizontal wells still have, at best, a one third water cut.
So, three of the four are in decline or crashing. We just can't confirm the Ghawar decline.
These fields account, or accounted, for around 14% of world crude production.
The other fields that were producing one mbpd or more just didn't disappear. They are still producing. For example, even though Prudhoe Bay has a 75% water cut, it is still producing about 400,000 bpd. So, we are still getting sizable contributions from the sum of the older fields. But what happens at peak is that the new production coming on line can't make up for the underlying decline of the existing production.
As Deffeyes' mathematical model predicted, world crude production is declining.
How in the world can you expect to see rising production when: (1) We are past the 50% of Qt mark (and declining as predicted) and (2) it's a near certainty that all four of the current super giants are in decline or crashing?
Or let me put it this way. Let's assume that Ghawar is declining. I'm not sure when the first one mbpd and larger field came on line, but it was decades ago. During this time period, for decades, we have always had stable to rising production from one mbpd and larger oil fields.
Assuming Ghawar is declining, we are now where we have never been in the modern oil business--with all past and current one mbpd and larger oil fields in decline. This is supposed to lead to rising oil production?
I might add, that what you are in effect saying is that Saudi Arabia can peak, without the world peaking. I think that this is literally the first time I have heard this argument.
The other fields that were producing one mbpd or more just didn't disappear.
Neither will Ghawar, Burgan, etc.
How in the world can you expect to see rising production when: (1) We are past the 50% of Qt mark (and declining as predicted) and (2) it's a near certainty that all four of the current super giants are in decline or crashing?
How did production go up by 20 million bpd when 9 out of the 15 super giants went into decline? That's the point you are missing. There is historical precedent here. You are just choosing to ignore it. What you are ignoring is that a number of fields producing less than 1 million bpd made up for all of the production from those in decline, and a whole lot more.
I might add, that what you are in effect saying is that Saudi Arabia can peak, without the world peaking.
That's not at all what I am saying. I am saying that Saudi has a lot of smaller fields that can make up for Ghawar's decline. Again, we have historical precedent for this, because it is exactly what happened when the past 9 super giants declined.
Robert,
In these frequent exchanges between you and WT I don't think you have mentioned the decision of KSA not to honor the contract amounts of crude for certain Asian customers. Can this reported fact be reconciled with your assertion that the market conditions supported their claim that they couldn't find buyers for their oil?
In these frequent exchanges between you and WT I don't think you have mentioned the decision of KSA not to honor the contract amounts of crude for certain Asian customers. Can this reported fact be reconciled with your assertion that the market conditions supported their claim that they couldn't find buyers for their oil?
The Asian event happened after oil prices had fallen sharply, and OPEC had agreed to production cuts. The other event happened while prices were high, but inventories were very full and rising. I don't think it takes a rocket scientist to understand that inventories that are at record levels and rising means purchases are going to have to slow down. Hence, their statement is consistent with what was going on with inventories at the time.
The reality is both you and WT pick the data and interpretation you chose to focus on and neither can actually prove your position because reality in SA is a state secret. I don't think the truth is as obvious as either of you think, and after reading the debate, I give each about a 50% chance of being right. Both models fit some but not all of the data or history. I have long since thought we will simply have to wait and find out the hard way when peak happens. As has been made abundantly clear, even with the best data, and without necessarily any malice or intent to decieve, oil companies and nations have always been over optimistic about when peak would occur in a given region or set of holdings. On the other hand, peak has also been called early in several cases by the pessimists, particularly the world peak.
No wonder the world is confused.
Note that Saudi Arabia is showing a year over year decline in production for the first time since 1999.
The 1999 decline corresponded to the lowest (nominal) oil prices we have seen since 1986.
The 2006 decline corresponded to the highest (nominal) prices in history, and Saudi Arabia started declining in 2006, exactly as predicted by the mathematical and historical models.
So again, the absolutely key difference is that Robert is predicting higher oil production for Saudi Arabia.
I am predicting lower production.
We can argue the "why"--which we have done to the point of producing widespread nausea on TOD--but in regard to up or down production for 2006, that is not in dispute.
Yes, but note the price has declined since then. One thing we can say for sure, if prices rise to circa $75, and Saudi production doesn't rebound, this will be VERY telling.
For the time being, it is a reasonable hypthesis that the Saudi's restricted production in expectation of declining prices. After all, many commentators were pointing at building of inventories over this period.
Many expect prices to rebound above $70 in the not too distant future. I'm not so sure about this, but one thing is clear, if prices rise again soon, it will be a very interesting experiment.
westexas -
Is it possible that KSA has reduced production since 1999 in order to avoid glutting the market due to other sources of oil coming online, notably Russia?
Since KSA is considered the world's "swing producer", with the ability to most affect pricing (debatable in today's financial markets where I would argue speculation is the name of the game, not true supply and demand), wouldn't it be in their best interests to try and keep prices higher by reducing their output of crude?
KSA has less influence over the markets as more 3rd parties enter the game, notably Russia. KSA has a lot to lose by a price crash and a lot to gain by keeping prices steady in the $60 - $70 range. As they discovered, the world didn't come to a crashing halt at $74/barrel, so they're probably working to keep prices propped by cutting production.
Iran not yet peaked? Good lord man, they produced over 6 mb/d in 1974 and are now producing about two thirds that amount. They produced over 5 million barrels per day as late as 1978 then all hell broke loose with the revolution. Production dropped to 1.38 mb/d in 1981 then in 1989 they began the slow process back to normalcy. But like Saudi Arabia, they were never able to reach their former peak. However Saudi Arabia came a lot closer to it than Iran.
Iran reached a second, but much lower peak of 4.139 mb/d in 2005 but this year, though they are producing flat out, have produced an average of 4.029 mb/d. No, Iran has definitely peaked. They peaked in 1974 and have come nowhere close to that peak since. But of course this was all because they do not have enough buyers.
How much do you want for that bridge of yours Robert? Why don't you just erect a toll gate on it instead of trying to sell it?
Ron Patterson
Iran not yet peaked? Good lord man, they produced over 6 mb/d in 1974 and are now producing about two thirds that amount.
Well, Ron, maybe you guys should huddle up and get your story straight. According to this HL of Iran that WT did:
http://graphoilogy.blogspot.com/2006/01/4-biggest-oil-exporters.html
They are at 47% of Qt. Your mistake is in not considering geopolitical factors at play. For instance, some would argue that Venezuela has peaked. That's ludicrous. Their production is down because it is mismanaged. Likewise, Iran production has been up and down over the years for reasons completely unrelated to a geological peak.
Be that as it may, Iran produced flat out in the seventies until 1978. They peaked in 1974 and during that time they had the very best engineers in the world, until the Shaw was expelled. Even with the world's best engineers, from the US obviously, their production dropped from over 6 million barrels per day in 1974 to 5.2 mb/d in 1978.
It is precisely because of those geopolitical problems that you speak of that the Hubbert Linerization gives a false reading on Iran. Iran has between 35 and 40 billion barrels of reserves.
Roger and I agree on most things but we are not partners by any means. We both go our own way and on some things we may very well disagree. If he says Iran has not peaked, then we would emphatically disagree on that point. Iran has definitely peaked and their production is declining much faster than the EIA data currently indicates.
Ron Patterson
Ron -
I would make the argument that their 'peak' in 1978 may have had a lot to do with internal political/economic issues and the ensuing revolution that took place. I can imagine that investment in their oil infrastructure has been pretty minimal over the last 25 years.
I don't think that's too big of an assumption to make, actually. Let's say Iran turned into a democracy tomorrow and we could pop in there with the latest and greatest technology for efficiently extracting oil. I would imagine that might help us increase output from Iran without too much difficulty.
So yes, you are correct that they may have peaked in 1978, but again due to lack of data, we cannot say whether this is necessarily due to geologic reasons (past peak), or due to infrastructure/technology/investment reasons.
We won't know until we get our grubby little protrubances on those fields.
I think whether or not Iran has peaked is questionable. ASPO thinks they haven't peaked yet (or at least that before 2010, they'll have a second "mini-peak," as many Middle Eastern countries have).
But Simmons says they are past peak, and so does Bakhtiari. I would think Bakhtiari would know, if anyone does. FWIW, Bakhtiari thinks Iran's proven reserves are only 35-45.
Iran is having trouble even meeting their quota the past few years. Maybe the peak is for "logistical" reasons, and what the U.S. keeps saying is true: if they open up to IOC's, their production will increase. But realistically, that's not happening.
Thanks for that link, L.
My god, look at the discrepencies in reserves numbers on his chart!
Very distressing.
And he's been right, so far. ASPO's prediction, ca. 2003:
The reality, according to Stuart:
(The green bars are Iran.)
Little sign of the "second peak" ASPO predicted. Iran's production has been basically flat.
WestTexas, we know where you currently stand on your outlook. Why continue to basically re-post the same info every day?
Yes, I suppose that it is somewhat repetitive to discuss Peak Oil issues on a Peak Oil website. Silly me.
But to some extent, this is Deja vu all over again.
I got so frustrated over arguing with Hothgor over this same point--that we can replace super giant oil fields with a collection of smaller oil fields--that I quit posting on TOD, until some recent CERA stuff came out.
What is beyond amazing to me is that Robert is arguing that Ghawar, Cantarell, Burgan and Daqing can all decline or crash, but that we can still see rising world oil production--when, as Deffeyes predicted, world crude oil production is declining, and as I predicted, Saudi oil production is declining, and as I predicted, net exports by the top three net exporters are declining.
BTW, I suggested to Robert several days ago that we simply agree to disagree--which is the same suggestion that I made to Hothgor.
BTW, I suggested to Robert several days ago that we simply agree to disagree--which is the same suggestion that I made to Hothgor.
But as long as you continue to argue a point that I think has a pretty weak basis, I will continue to challenge that point. It's OK to agree to disagree, but I am not going to sit back and watch a monologue when I think your evidence is full of holes and you are essentially ignoring big pieces of the picture.
Robert,
You have agreed that we could peak as early as 2009.
(1) Is 2005 versus 2009 even worth arguing over?
(2) Why are you so adamant that Saudi Arabia and the world have not peaked, when their crude oil production is declining, as predicted by the mathematical and historical models?
Is 2005 versus 2009 even worth arguing over?
This is the point you keep missing. I am not arguing about the date. I believe peak is later. But that's not my argument. My argument is that you are ignoring a lot of stuff to make your case. You are data mining and cherry-picking. If you tried to make this case to the mainstream media or to a scientific audience, they would eat it alive. It would not pass peer-review.
Why are you so adamant that Saudi Arabia and the world have not peaked, when their crude oil production is declining, as predicted by the mathematical and historical models?
That's what our debate was about, remember? I laid out the evidence in some detail.
Robert,
I am getting tired of seeing you debate Westexas on something that does not matter.
Let's drop it.
My brain tells me you are right. My gut tells me Westexas is right. I don't need conflict like this;-)
That is exactly how I feel too!
Don,
On this rare occassion II agree with you 100%.
At this point, I for one tend to skim over this so-called 'debate' and go on to something more interesting.
I think this is really getting to be an ego thing between Robert Rapier and Westexas. Sort of an: "I'm smarter than you. No, you're not! Nyah, nyah, nayhnaha!"
Robert and Westexas: Play nice! And PU-leeze, give it a rest!
Hard as it may be for you to believe, but not everybody out here is hanging on your every word.
I am shocked! shocked!
I think that the "debate" has gone from annoying to something more like surreal.
Maybe just a wee bit, but I find it remarkable how they've both managed to be so civil. Hats off to 'em.
Robert and Westexas: Play nice! And PU-leeze, give it a rest!
First of all, I think we are playing nice. Second, I stopped caring about your opinion some time ago. It followed post after vacuous post from you that all simply boiled down to "but you're biased. Why can't you just admit it?" After about 10 revolutions on that broken record, I frankly gave up on you. That is all.
Playing nice is such a rare spectacle. This does seem to be an example that proves it possible.
"Always tell the truth. This will gratify some people, and astonish the rest."
- Mark Twain
of course, he also said..
"The problem with these Gentlemans' Agreements, is these Gentlemen ain't Gentlemen!"
I wouldn't dare try to take sides on the RR WT issue, as if I could! I'm gratified AND astonished to find this level of level-headedness on the internet.
"Strive mightily, as Lawyers do in Law; but eat and drink as friends."
- W'm Shakespeare
Count me in as an attentive bystander in the on going WT & RR civilized debate on S.A. and Peak Oil. While I can at times almost recite verbatim the W.T. litany of H.L. I find the discussion progressive enough and thorough enough to hold my rapt attention. New information and needling provide the on going conduit and power to sustaining the lively discourse on TOD. To those growing weary of what they consider a tiresome debate I advise you to use the scroll down feature on your mouse. Such as I do for several other posters. To the titans please carry on as the amusement and practical knowledge that underscore your contention works quite well for me! Bravo and Encore!
Well, time will tell.
What we do know, at this point in time, is that my predictions--using the mathematical models--for declining Saudi production and declining oil exports are (so far) correct (I realize that you dispute the "why"), while your predictions for rising Saudi production and rising oil exports are (so far) wrong.
What we do know, at this point in time, is that my predictions--using the mathematical models--for declining Saudi production and declining oil exports are (so far) correct (I realize that you dispute the "why"), while your predictions for rising Saudi production and rising oil exports are (so far) wrong.
Yet exports did rise last summer and set new records. At that point, your story changed to "We are outbidding other countries for available crude." Your evidence? None at all. That is just what it had to be, because the evidence we did have didn't fit your prediction.
Let's review the evidence that fits your model: 1). Falling imports - obviously fits, even though imports fall for many other reasons; 2). Rising imports - as we saw last summer, this also fits. So, what doesn't fit? How would we know if the model is wrong, given that both rising and falling imports are explained away as fitting the model?
Here is another prediction from me: Imports will fall over the next 2-3 months, and pick back up this summer. We will hit the same import levels, if not higher, as we did last summer. We will do this without bidding oil back up to the previous record levels. This will be evidence against your position. If, in the absence of some unusual geopolitical factor, oil prices sky-rocket as our imports come up, it will be evidence consistent with your position.
My specific prediction, one year ago, was that Saudi Arabia and Russia would join Norway in showing lower exports. Saudi Arabia and Russia have both admitted to lower exports.
With a couple of assumptions (continued increases in domestic consumption and a guess as to the Russian decline in exports), net exports by Saudi Arabia, Russia and Norway may be down by as much as 2.5 mbpd in 2/07, from their 2005 exports.
I predict that Saudi Arabia and Russia will never again exceed 15.8 mbpd (Total Liquids, their 2005 level) in exports on an annual basis and I predict that Saudi Arabia will never again exceed, on an annual basis, their average 2005 crude + condensate production level of 9.55 mbpd
Excluding NGL, KSA's 2005 production was 9.05-mbd (as tracked by IEA). Early figures show 2006 was 8.9-mbd. After being challenged four times, Jeffrey finally gives me a number by which to fail his theory: that the 2005 Supply Rate will not be breached.
KSA has announced on several occasions that its sustainable rate is presently 8.6-mbd. It has pledged to increase this to 10-mbd by Aug 2009. Subject to OPEC quota reallocations due to the three new OPEC members in that period, we now watch and wait...
I don't buy this AT ALL. Jeffrey's "case" IS about the date.
The cherries are ripe, and the trees are loaded, then.
I don't buy this AT ALL. Jeffrey's "case" IS about the date.
But my beef is not with his date (although I believe it is wrong). It is with the way he is only looking at evidence that supports him, and ignoring the rest. Just as he did last year when he pointed at falling imports, completely ignoring the fact that 1). Turnaround season was underway; and 2). Inventories were still climbing. He argued that this didn't matter, and just referred back to his model. You just can't ignore the rest of the picture.
Cherry-picking data won't convince anyone who is not already predisposed to that belief. If that's the goal - to convince those that are already predisposed - then it's different from my goal which is to convince the rest that we have a problem.
An edifying comment.
Does one have to have a 100% airtight case, though, to convince those "not predisposed to belief"? Someone can always come up with a "could" statement, like your one about Iran and Russia perhaps selling at a lower price. Preponderance of evidence is favorable to WT, if not "convincing."
If 100% is required, I tremble for us all.
It occurs to me that "100% certain of peak" is that small lettering at the bottom of one's rearview mirror.
Does one have to have a 100% airtight case, though, to convince those "not predisposed to belief"?
It isn't about having an airtight case. It is about having a case that isn't full of holes.
Preponderance of evidence is favorable to WT, if not "convincing."
To you. Not to me. Not to the MSM. Not to the scientific community. Not to the government. So, it is nice that you are convinced. It would be nicer to convince those who can enact policies to help mitigate the crisis.
I said "if not convinced." I'm not convinced. I said the evidence was favorable to WT. If "not" to those that you mention in the list, and WT is right, then it will be wailing and gnashing of teeth for those who have chosen not to be cautious.
Any argument that has a "hole" is by definition not airtight. Therefore, it IS about being airtight.
What constitutes "full" of holes? When do we shut up about the details and just do something?
This very long chain of hair-splitting illustrates exactly what I complain about on this site: the sometimes ridiculous focus on trivial timing or number-crunching issues. The overall truth is that the oil will run out. That in and of itself should be alarming enough all by itself. If everyone can agree to that, then what the HELL is the problem? Obviously, no matter which of these people are right, the oil age is coming to an end. There are precisely two possible responses: either do something now, or do it later.
If we act now and peak occurs today, then great! We make the best possible start on changing over. If the peak occurs at anytime in the future, and we act now, even better!!! We have more cheap energy to make the transition! If we start later, no matter how much later, there will be less cheap oil to ease us through the transition. I cannot see how this could possibly be a good thing.
I must believe that everyone can see that any delay in action brought on by an argument about peak timing will be counterproductive. Every drop of oil used inefficiently due to arguing the number of angels on the head of a pin is inexcusable.
Robert Rapier, are we to change our goals because you believe the peak will be later? If so, why? If not, why argue this point?
While the basic rules and procedures of science require a very strict adherence to form, the nature of life requires decisions be made with imperfect knowledge. In the case of impending catastrophe, the very worst thing one can do is demand perfect knowledge. If you notice that an avalanche is headed your way, do you run or do you wait to confirm it will hit absolutely, positively? The only way one can absolutely know that the avalanche will hit and kill you is to be hit. That is perfect knowledge.
In the case of peak oil, we know we will be hit. Why wait to make the transition? Why make arguments that will be made irrelevant in due time and which will not further our preparations?
The oil industry has and continues to support a deliberate misinformation campaign about global warming. Without a doubt those executives who are pushing this propaganda are guilty of the equivalent of crimes against humanity. Let's not let the peak oil debate become guilty of that.
Robert Rapier, are we to change our goals because you believe the peak will be later? If so, why? If not, why argue this point?
The point that is missed here by you, and others who complain that any of this is hair-splitting, is that it isn't our goals that we must change. If I could impress my goals upon the world, we would have no problems. But it is the public, the government, the mainstream media that must be convinced that we have a problem. We won't do much convincing if we don't peer-review our own arguments and make sure they are sound.
Do you see? How do you propose to convince the masses? Do you think Deffeyes has been taken seriously? Do you think he will be? Why or why not? Do you think the sensationalist strategy is working?
I think Deffeyes has been taken seriously.
But most people just don't see peak oil as a problem, even if they accept his premise.
I haven't read his most recent book yet, but his first one sort of encouraged that point of view. He made a very convincing case that oil production was peaking, and soon. But the last chapter was pretty much, "We'll switch to wind and solar, and everything will be fine."
I don't think TOD will be taken seriously by enough people until we are well past peak and the argument is long over. This is "how many angels fit on the head of a pin." Even if KSA manages to rise to a new production level, information posted here makes it seem inevitable that:
a) It will not be sustainable for long.
b) It will not compensate for falling
production in the rest of the world.
This argument has used up enough space. We have all heard the arguments on both sides many times. It is really not that important in the long run. Let's wait and see who can claim victory.
Robert,
Please read my comment on the MSM further down.
Regarding the government, they already know. Simmons speaks to many in power. The DOE issued the Hirsch report. The U.S. Army Corp of Engineers seconded that report. Roscoe Bartlett rattles Congress's cage.
The public is in thrall to the media. (Again, see post below.)
Have you seen the Judge's new movie, "Idiocracy?" It pretty sums up what I think of the masses. The masses believe in invisible sky beings. The masses lived and continue to live in New Orleans despite numerous warnings by the media and government about the crappy levees. The masses watch Survivor. How in the world can we make an argument dumb enough, and terrifying enough, to convince them that their world is coming to an end? May not be possible.
The masses are lucky if they can spell peak oil.
I think that no strategy will work. I think that the masses, should the MSM deign to inform them, will look upon this information with some interest until "Desperate Housewifes" comes on, and, as their eyes glaze over, they will retreat to their fantasy world.
I think we are due for a good old dose of die-off.
I come here for the optimism, the determination to find a tech way out, the wonderful economics arguments, and the ego battles. Very amusing stuff. Certainly beats "Survivor."
Oh please, what utter nonsense.
It's called natural selection. Get used to it.
Robert, your arguments are interesting and articulate, but I really think you're overstating the importance of this forum.
Public is on crack tv.
It is in forums like this where ideas are born and movements take shape. Who do you think people will start listening to once Peak Oil is obvious? It will be the kinds of people who have had these debates back and forth for some time.
Nah, I think it will be the credentialed who will be listened to. If not Deffeyes, how about Goodstein? Professor of physics and Vice-Provost at CalTech. Wrote Out of Gas: The End of the Age of Oil. Occasionally hosts peak oil symposia at CalTech.
I'd like to see Goodstein and Deffeyes collaborate, actually. Deffeyes is great on the oil geology stuff, but weak on alternatives. Goodstein, being a physicist, understands the problem of EROEI of alternatives, and has done a lot of calculations on how much wind, solar, nuclear, etc., it would take to replace oil.
Of course, that still leaves the whole economic issue out of it, but it's probably best to start out with baby steps.
Maybe I'm cynical, but I don't think the MSM gives much of a rat's ass about WT or his HL. I think, Robert, that you vastly overestimate the importance of this debate. IMO it's a tempest in a teapot. The MSM will grab on when prices go up higher and don't come down again. This occurrence may have more to do with economics than PO. I think we have our noses much too close to the issues and the data.
Agreed.
Maybe I'm cynical, but I don't think the MSM gives much of a rat's ass about WT or his HL.
From time to time, generally during some oil crisis, the MSM does perk its ears up and listens to some of the peak oil talk. What do they hear? Critics pointing at all the failed predictions and denigrating the idea of Peak Oil. So, they put their heads back down and carry on. Peak Oilers have low credibility with the MSM. That's why they don't give a rat's ass. But that needs to change, and the only way to change it is to argue the case with solid data.
But the only un-failed predictions that can be verified are those that HAVE HAPPENED!
Oh, jeepers...
But why do we have failed predictions? Why have people even felt the need to call an exact year, when the error bars of the HL are pretty wide? The argument needs to shift from calling an exact date (and in my opinion, the failed predictions on this are due to the predictors ignoring relevant data) and argue the case a bit differently. Calling a peak and then watching production rise from there provides fodder for ridicule.
Instead, the evidence needs to be laid out that 1). We are making withdrawals from the fossil fuel bank without making any deposits; 2). Many credible studies suggest that we have pulled around half our principal out of the bank; 3). The entire developed world runs on cheap fossil fuels; 4). The era of cheap fossil fuels is over; 5). We need to wean off fossil fuels regardless due to global warming.
Now, something along those lines I can defend. I can add pieces to the case that can't be picked apart. What I won' do is try to call the peak year with incomplete data. I feel 90% certain that we are close (within 10 years). I feel that we can't rely on Saudi to keep providing us with oil. So, I am certainly in the camp of "We need to do something right now." My debate with Jeffrey, which I have enjoyed, is really about tactics and strategy. While some others just see this as a war of egos, it is nothing of the sort for me. It is about making a better case.
Nicely said!
I would guess this is already a mainstream position.
I'm sure there are more polls that would show we have a consensus, but to just go find the easy one:
http://www.resultsforamerica.org/calendar/files/031705_car_tech.pdf
Oh what the heck, one more:
http://www.commondreams.org/pressreleases/september99/091399b.htm
And that's way back in 1999.
It is common to think "we are in the wilderness" here at TOD, and of course some do bring out those handy words "delusion" and "denial" ... but the observable fact is that most people want a change/improvement in energy consumption.
Of course they all want better fuel economy. They think the government can legislate better technology so their hummer gets 40 mpg. I'm not joking. The majority are clueless.
The only way to get a huge jump in fuel economy is to downsize. The future size of the personal auto is going to be about the size of golf cart.
I think some of them do wish they could do that, it's true.
But:
http://www.cantonrep.com/index.php?ID=328565&Category=5
... we are talking about "pre-adaption" right? Gas is cheap enough that my car (ok, a Prius) only costs 5 cents per mile in fuel costs. How cheap does it have to be?
I think the interesting tension in Peak Oil is about how much warning we have, how steep the production decline will be, and how much pre-adaption is required ... and the fact that nobody knows ;-)
Disagree. The MSM is ill-equipped to deal with "solid data." And even if they were not, Jeffrey's a really small fish. If the critics were going to be pointing at failed predictions, it would Campbell, Kunstler, Deffeyes, and their ilk, not Jeffrey.
IMO, the only thing that will increase our credibility is an oil shock. Just as this warm winter has suddenly given global warming credibility.
It's silly, of course. This winter would likely have been mild even without global warming, though perhaps not quite as mild. And if next winter is brutally cold, people will probably use it as proof that there's no such thing as global warming. But that's how it works, unfortunately.
The MSM is ill-equipped to deal with "solid data."
What they do is ask a scientist, or usually their go to guy has been Yergin. But is this a case that would convince most scientists? Speaking as a former scientist (which is really why I am picky about data; I know what it takes to initiate a paradigm shift) I can emphatically say "No."
Depends on the scientist, I would say. Some already believe. Some don't, and won't ever.
In any case, I doubt Jeffrey's opinion on matters will hold great sway in the scientific community, no matter what he says or how he says it. Scientists generally don't go looking at blogs for evidence.
In any case, I doubt Jeffrey's opinion on matters will hold great sway in the scientific community, no matter what he says or how he says it.
I disagree. There have been a lot of paradigm shifts in the scientific community, many from previous unknowns. It all comes down to how you present your data, whether it explains the evidence, and whether it explains the evidence much better than the reigning paradigm. The first step is getting it through peer-review and getting it published. Then other scientists start to read your argument, and if you have presented a solid case they start to be convinced and they start to talk about it. Pretty soon, it is creeping into the MSM.
Such as?
EXACTLY. When Jeffrey announces he's submitting his work to Science, that's when I'll worry if it can convince scientists.
The way I see it, no reasonable scientist (and yes, there are some unreasonable ones) denies the reality of peak oil. The paradigm shift is not that oil will peak and decline (or maybe already has). The paradigm shift will be in "how does that affect us?" And that will be unprovable until it happens.
IOW, the problem is not that the scientific community does not believe in peak oil. They do. The problem is that they, like the rest of the public, believe the "price signal" will create innovation that will fix the problem.
Such as?
Barry Marshall, for one:
http://en.wikipedia.org/wiki/Barry_Marshall
When Jeffrey announces he's submitting his work to Science, that's when I'll worry if it can convince scientists.
But for a good, solid case, someone else may be willing to carry it forward and submit it a journal. This is all about influencing people to take action. This argument needs to play out in Science. But not in its present form.
I wouldn't call Barry Marshall an outsider. He may have had unique idea, but he was not an outsider.
If that's what you want, your time would be better spent making the case yourself than trying to get Jeffrey to do it.
I wouldn't call Barry Marshall an outsider. He may have had unique idea, but he was not an outsider.
First, he was a complete unknown. Second, his discovery turned the medical establishment upside down. It was strongly resisted by other doctors, and especially pharmaceutical companies. But his case was compelling.
If that's what you want, your time would be better spent making the case yourself than trying to get Jeffrey to do it.
I am making the case. But the case is not strong enough to submit to a scientific journal. That's the Catch-22. It takes a strong case to convince most bystanders (Global Warming took quite a while) and the reason it is tough to make a strong case is that the data are not transparent. So, I think we have to make a little bit different case that is not so concerned with whether we peaked last year or will peak next year.
But he was not an outsider. He was a physician who specialized in gastroenterology precisely because he wanted to research H. pylori and ulcers.
That doesn't make him an outsider.
In any case, what kind of paradigm shift are you looking for here? Does any serious scientist believe that oil will not peak? Abiotic oil would be a paradigm shift, not peak oil.
That doesn't make him an outsider.
Well, outsider is not really the term I meant. More like relative unknown. The vast majority of doctors in the world, and probably in his speciality, probably wouldn't have known his name. So he made his case on the data.
In any case, what kind of paradigm shift are you looking for here?
On either timing of Peak Oil (sooner rather than later) or that we absolutely are not doing enough to prepare, or that this is a crisis that is not being taken seriously enough. Any of those would be good.
Well, I think Westexas really is an outsider. A researcher toiling in obscurity is different from someone who is not a researcher at all.
I don't think any of those can be proven scientifically, though. The first might make a paper, if you had the data, but the reaction is likely to be, "Oh well, technology will save us." The other two are not really scientific questions.
If you really hope to convince the scientific establishment, Deffeyes is probably our best bet. He was a professor at Princeton, so he's got credibility, and he's presumably got contacts, which may be even more valuable.
If you really hope to convince the scientific establishment, Deffeyes is probably our best bet.
But he has been guilty of sensationalism, and has made himself an easy target as a result. And if oil production does increase from here, which I fully believe that it will, his credibility will be shot and he will have lost his ability to argue the case convincingly. On the other hand, if oil production does decline from here, then he will gain some listeners.
Nah. The problem isn't sensationalism. It's that he wrote a popular book. Call it Carl Sagan syndrome. That's why I mentioned contacts. Getting a partner who hadn't written a popular book would be the easiest way of getting credibility.
For a Science audience, I think the most useful focus would be on an estimate of the ultimately recoverable resource. A nice twist could be a focus on net URR, after subtracting the energy cost of production.
The year of maximum production is just too noisy and really rather meaningless - if the plateau is bumpy enough, the year of the maximum could bounce around between several rather remote contenders, depending on what precisely is measured or tabulated to generate the production figures.
The year in which 50% of net recovery is reached, that is also a much more meaningful figure than the year of peak production.
One of my hobbies is Monte Carlo simulations, running lots of scenarios of a system's evolution, tweaking the various input parameters slightly. To play with different models of petroleum resources and production & thereby even get a meaningful measurement of the error in the net URR estimate... that could make a nice Science article.
I remember seeing someone here announcing an open source project, I think at sourceforge.net, to build a simulation model for petroleum resource extraction - but I haven't managed to coax any searches to recover that. Must've been in the last twelve months or so.
What they do is ask a scientist.
NO. That is not what the MSM does. As a corporate entity, it supports an agenda designed to further the status quo, to protect the rich, and generally screw the rest of the world.
What the MSM does is go through its collection of compliant scientists who will make the statement they want the public to hear. You imply they pick a scientist in some unbiased way as if every scientist will tell the truth, as if scientists all speak exactly the same "truth."
What the MSM does is maintain, expand and guard jealously their role as the gatekeeper of information. Their decisions are not based on seeking "truth." These decisions are intended to further the bottomline, PERIOD. If the economy tanks because people realize that our oil enhanced ways are coming to an end, that means collapsing advertising revenues. The people who determine that you will see twenty reality shows this season instead of well-written drama, comedy, or documentaries are the same people who are not about to give air-time to anyone telling the "truth."
As a former science writer, I can tell you that every single scientist I've interviewed had an agenda, usually revolving around furthering their careers. The image of scientists as this disinterested breed is a media driven image. The scientists who actually are altruistic will never be seen on television. Why? Because they're too damned busy doing science. (The scientists you do see on TV who are in fact altruistic are usually touting some non-news item: space, medical breakthroughs, or other piece that is not controversial -- the more "gee-whiz" the better.)
The MSM will remain the enemy of realistic discussion of peak oil long after the peak hits. They will run "happy" stories about tech breakthroughs, people making do, lost pets found in an abandoned SUVs; you will see great graphics, snappy editing, heart-warming writing, wonderful musical intros, but very few negative takes; and the MSM will run "exposes" showing how peak oil is a scam, how such and such scientist, part of some think tank funded by Exxon, believes that oil will last for another 100 years. If you are expecting the MSM to somehow pull its lips off the collective, corporate arse and save us through a masterful media campaign, you have not been paying attention. The MSM shamelessly echoed the Bush administration's lies and got us into Iraq. The MSM shamelessly lets right wing ideologues poison the political environment in the name of "fairness."
No. The MSM is the enemy. They will see us all head down the wrong road. Instead of a road leading to a sensible, sustainable world, we will follow their lies to the "showers."
AND WE WILL LOVE IT.
Geez, guys. You keep piling on.
Alas. . . tis true though.
Besides, as I pointed out to SAT, the world peak work I did just supported Deffeyes' work, and the semi-original work I did on exports and Saudi Arabia was inspired by Simmons' work.
However, if you do a Google search for Net Oil Exports, the EIA is #1 and #2. I'm currently #3, out of 4.6 million listings. Luis' article is #4.
Chomsky has made the point that in television especially, people want to hear two-minute platitudes between commercials. Anything else becomes eye-glazing, especially if it questions the prevailing paradigm.
Imagine that.
Say your goodbyes. I always liked the man. I just thought his stuff was a bit rash. I talked to someone over the holidays who saw him recently. I mentioned that he hadn't really written anything lately. They confirmed he could barely talk. Now I know there are several definitions of "could barely talk." I'm just saying. I got mine, I know who I wuz talking to.
Parent is Leanan on MSM and GW.
I believe the climate has changed markedly.
But before I make my statement I would like to note that the meteorologists take great pleasure in rebuffing people's questions, those being "isn't this very warm year and winter because of global warming?"...
And they respond ." No you fools its not. Its El Nino or this or that but ITS NOT global warming."
And all the while they keep this steady mantra in the background of "global warming is coming folks, dont' say we didn't tell you, big chunks of ice are melting and its gonna get warmer!!"
Well big whoop! They want to convince us yet what we see and observe doesn't pass their acid test. YET ,,,BIG YET...we all know that its an AVERAGE they scream about and what causes AVERAGES? Ups and downs and when there are far more ups than downs then guess what? The average goes up somewhat!!!
Now my observations. I spent all of the 1950's next to a pretty large lake near a town in Missouri. Almost every winter that lake froze over hard as a rock and we and many townspeople skated on it for weeks and weeks. It didn't break up til real late in winter, real late,more like early spring.
As well many many days sitting in grade school we could see snow most of the winter and played in it at recess. Many years of this.
I have not seen that lake freeze over. Not once during the 70's , nor the 80's nor the 90's.Well maybe very thin sheet in the 70's but not enough to matter.
We used to go to Forest Park which had lots of small lakes and ice skate most of the winters when I was in high school.
Even here on the farm back in the early 90s' I ocassionally had to go chop pond ice for the horses and cattle. For the latter 90s and the last 6 years not once have I seen the ponds on my farm ice over. Not even a bit.
I run around in shirt sleeves and a vest. I used to have to wear insulated coveralls. I used to spend a lot of time chopping firewood and burning it. In the last 3 years thats been very very rare.
I don't care what a bunch of meteorologists whistle thru their buck teeth. Something is sure the hell changing and its not their call. Its real. Its happening.
I think the records for the last 8 or so years bear this out and I get tired of them yammering about ITS NOT GLOBAL WARMING.
IPCC's AR4 should be released by the UN Feb 7th. They have indicated that there will be more emphasis on explaining this phenom as Climate Change ... not Global Warming. There will be an effort to explain Regional ramifications as well as overall planetary trends.
The 100 year trend is still about 3C. But regionally, we will see some areas go 10C while others see temp drop. Some will be drier. And others wetter or more humid. Most boomers have lived thru an era of extreme global calm. In the 80's we were warned that this calm period was not the norm and that we should be prepared for increased severe episodes. Now Climate Change caused by GHG is enhancing accelerating and enhancing that trend back to normal varied weather. Predictable weather was easy during the calm era.
Anecdotal tales are not helpful. Due to el nino, Siberia and the Yukon are facing the coldest weather since 1944. In November, our avg temp was -21C. In three years we have gone from near record light snows to near record heavy seasons. Far too many confuse weather and decadal weather cycles with climate. Hopefully the MSM will use the present awareness due to mildness to take the discussion to a higher plane.
What a load of crap. I believe my senses. You believe what you want. At some level I just don't csre what you believe. At other levels you are just so full of shit.
Go crawl out of here. Die.
Liar!
I provided the link two days ago to show that your statement about this winter in the Yukon being the coldest since 1944 is laughably false. Anyone who wants can produce another hundred to make the same point for all Siberia.
Why do you lie?
If you were born that way, why lie about things that can easily be checked?
Why do you continue to pollute TOD?
Why do you continue to pollute TOD?
I find this a fascinating question.
I'm an amateur bible "scholar," and don't believe it has much historical basis. Now, how many Christian forums do you think I comment on? The answer is ZERO. What's the point?
When you think of the time an energy these expert trolls spend here, it actually gets downright frightening. I might feel a little pity for him if I knew he was on a respirator or something.
Smekhovo is right. Data for Whitehorse in Yukon territory are actual temperatures around 18 max/10F min. Average for January 15th would be -2 / -9 F according to Yahoo and Weather.com...
Number 1, I don't think the mainstream media is that advanced to pick apart anything.
Number 2, I don't think the scientists of the world have even seen oil depletion math approaching the detail that they are used to on most topics.
We lack any kind of oil depletion fundamentals besides a few hueristics and empirical fits. I suppose a scientific audience could judge curve fits but they wouldn't pursue it much further than that.
Talking about passing peer-review, I have been absolutely eating alive all of the reserve growth estimates done by Attanasi & Root, a couple of USGS scientists. This is a very interesting topic, the topic of "the enigma of reserve growth", and one that apparently did not pass too strenuous a peer-review -- I am continually amazed that it passed any kind of causual perusal.
The topic is loaded with basic statistics and A&R absolutely fail at paying attention to the most basic of statistical principals relating to the censoring of data. And this is the stuff that the right-of-center cornucaopians have been referencing for years!
westexas -
I would say that yes, it is worth arguing over if the science has holes in it. We can agree that the world is round, but if you make that assertion through satellite analysis and I do it with measuring tape and conjecture, chances are that your methodology will be far more useful in the future and mine was just a damned good calculated guess.
Same thing here - if the science isn't any good, the analysis won't get much play outside of the echo chamber known as The Oil Drum.
On an aside, we need to remember that there is a difference between a "puzzle" and a "mystery". A mystery is when we don't have enough information to form a picture and we need to collect more data. A puzzle is when we have loads of data, but cannot put it into context that makes sense or provides us understanding. We've all got plenty of data to chew on, but the analysis is what differs greatly around here.
A question:
A man is driving a car on a one mile long circular track.
He drove Lap #1 (one mile) at an average speed of 30 miles per hour.
How fast does he have to drive on Lap #2 (one mile) so that the average speed for both laps (a total of two miles) was 60 miles per hour?
Q: How fast does he have to drive on Lap #2 (one mile) so that the average speed for both laps (a total of two miles) was 60 miles per hour?
A: 30 mph. (30 mph + 30 mph = 60 mph:)
try again
I think he is putting you on, but I am not absolutly sure.
No, I am totally serious, it's just simple math.
Do we have to take relativity into account? Including the collapse of the Earth, racetrack and all, into a black hole due to its proximity to an object with infinite (hint) mass-energy?
infinitely fast
We have a winner!
The key is time. To travel two miles at an average speed of 60 mph takes 2 minutes. The first lap consumed 2 minutes (30 mph for one mile).
So, how fast did Texas have to drill to keep its oil production rising after it peaked in 1972? Infinitely fast?
All we know is that we deployed every rig we could get our hands on, as oil prices spiked by about 1,000%. We succeeded, the number of producing wells went up by 14% from 1972 to 1982. But production fell by about 30% from 1972 to 1982.
The problem was that we were facing the physical reality that we could not drill fast enough to reverse the decline in existing fields. Physical limits are such a pain.
So, today how fast does Saudi Arabia have to drill to keep their production rising, after it hit the same stage of depletion at which Texas peaked? So far, despite a massive increase in drilling activity, apparently not fast enough.
As I said, physical limits are such a pain.
(I borrowed this question from a Geophysics mag.)
It's no problem. We'll just develop a Star Trek transporter beam for instantaneous travel. When the cost of travel gets high enough, it'll be economical to develop a transporter beam.
Transporter beams will be useful to extract oil, too. We'll be able to extract the world's oil reserves thanks to the combined miracles of economics and good ol' ingenuity.
:-)
TIMING, AND THE WASTE OF A 2 LAP DRIVE TO PROVE....NOTHING
The problem with the "2 lap" exercise as given by westexas is of course there was a time limit set right at the opening, and then a distance limit matched to the exercise, so that all the time is used in the first half of the distance, instant proof that nothing can ever be done! At the pace Westexas is going, he is in danger of proving beyond a doubt that the oil industry could have NEVER existed, it was all a mirage! This is the type of exercise that does cause people to turn and walk away from the peak oil debate....If I control all the imput data, (and of course, de facto I do if I say I do, since no real usable data is ever provided by the "real" oil producers of the world, I can cobble together just the type of two lap exercise as described, in fact, I can build those models all day.
That is not, by the way, to say that if I spend my time cobbling up these models, that one of them will not finally turn out to be correct. It's like shooting various color paint out of a shotgun. I can paint, very carefully what "my" physics predicts the pattern on the wall will look like. And if you give me enough shots over enough years, I can match the painting I predicted. I'm a freakin' genuis! "My" physics is proven!! I have, after all, a closed model to work in. Sooner or later, I KNOW I am going to be right, randomness if nothing else will give me that, at least closely enough I can call it a match.
Those claiming some kind of "inside" knowledge of peak oil have certainty on their side. If you keep pumping oil, SOONER OR LATER, you are going to go into decline, field by field, nation by nation (abiotic oil excluded from discussion), and each area will peak. Thus it has to be assumed that this is true with world peak. But when? How long will I have to keep firing the paint filled shotgun? How long before most of my audience says "ohhh, good grief, the new has worn off this show, I will catch the peak train when it comes, and try to manage it then instead of wasting valuable time waiting."
BECAUSE, TIME IS VALUABLE. This is the absolutely crucial mistake made by those who say "timing don't matter". OF COURSE IT MATTERS.
I am 48 years old. I can pretty much calculate my decisions IF I assume peak is coming, but is still 30 years away. I would be 78 years old then. What does that mean to me NOW? Well, I could go ahead and buy that new Buick, and feel assured that I would be pretty unable to drive it by the time peak came. In fact, given the lifespan of a new Buick, it would be pretty much junk scrap by the time peak came. Investments? If I feel the economy is going to do o.k. with no peak for 30 years, I still have an investment window to build up reserves and try to plan for my "peak oil" dotage with that great friend of an old man, money. My skirt chasing, Buick drivin' days will be over by then, but I have a pretty nice window to squeeze in some in the meantime, don't I? So the REAL WORLD DIFFERENCE between say this model:
http://www.energybulletin.net/image/primer/aspo_oil_and_gas.png
(showing projected production of oil/gas by ASPO)
and say this one:
http://www.eia.doe.gov/oiaf/aeo/figure_1.html
(showing projected prices for energy to 2030 as given by Department of Energy's EIA)
THE REAL WORLD DIFFERENCE is HUGE in how I would live my life, isn't it?
I could buy that new Buick Lucerne, put my "discreetly" younger mistress's azz in the seat, and crank up "The Road Goes On Forever, and The Party Never Ends" courtesy of ole Robert Earl Keen and live out the good life IF the EIA of my own trusty and trusted Department of Energy is correct. Look at that chart again. Would you not GLADLY take that price scenario for the years out to your old geezerdom? It would be the greatest period since the 1980's and 1990's! The road really does go on forever, or close enough for my old mortal bones. :-)
THE TIMING MEANS EVERYTHING. Don't believe it? Ask the folks down at the hedge fund who bet on higher natural gas and put themselves at risk of working as greeters at WalMart. Now anyone with half a brain KNOWS that natural gas is NOT, over the long term, going to get cheaper. But, how long of a term? The investors are NOT willing to wait, they have things to do and things to buy. You can be right in fact, but wrong in timing. And if you are, "peak oil" will be the least of your problems, down at the city shelter, shoving around for a place in line for that free winter coat and shoes.....
IN LIFE, TIMING DOES MEAN EVERYTHING.
Roger Conner known to you as ThatsItImout
"If you keep pumping oil, SOONER OR LATER, you are going to go into decline, field by field, nation by nation (abiotic oil excluded from discussion), and each area will peak."
Of course, as predicted by the historical and mathematical models, both world and Saudi crude oil production are now falling. The endless debate is "why."
"Of course, as predicted by the historical and mathematical models, both world and Saudi crude oil production are now falling. The endless debate is "why."
And when, and for how long. Remember that we have seen real world and Saudi production fall before.....for almost half a decade....and by damm near a quarter of total volume, back in the late 1970's....and yep, some folks bet their money....
They would have been better off playing the lottery....
RC known to you as ThatsItImout
WT, you obviously know your stuff when it comes to petroleum. IMO though, you are underestimating the power of economics. Higher prices will lead to substitution and innovation. You make some excellent points regarding field declines, however I believe that total liquid production can continue to increase even if C+C plateaus or even declines.
Are you taking total liquids into account or is your main focus on crude production/exports?
Westexas understands economics at least as well as RR does. That is not the issue.
I Don Sailorman hereby declare the issue "de minubus" and therefore let us shut off this fruitless debate.
Fossil fuels can be viewed as a continuum, from natural gas, to natural gas liquids, to condensate, to light/sweet crude, to heavy/sour crude, to bitumen to coal. (Shale Oil is kerogen, a precursor to bitumen, that has to be "cooked" to turn it into oil.)
We especially want Liquid Transportation Fuels (LTF's)--gasoline; diesel; jet fuel. We get the most bang for the buck by refining light/sweet.
As light/sweet reserves deplete, we move to the endpoints--toward natural gas and coal, which require more money and energy to turn into LTF's. We will also be competing with other users of these fossil fuels (much like the competition, by different users for corn).
I should also point out that the world uses--from fossil fuel + nuclear sources--the energy equivalent of the one Gb of oil every five days. We use the energy equivalent of all of ExxonMobil's proven oil and gas reserves in less than four months.
The question you are asking, in effect, can we keep growing the economy, using different energy sources? Or, how long can we keep up an exponential growth rate against a finite resource base?
IMO, alternative energy sources and nonconventional sources of oil will serve to slow, but not reverse (at least not for a long time) the upcoming decline in total energy production.
Why don't you take a stab at answering my question above (the lap question)?
"substitution" and "innovation" are abstractions.
"field declines" are concrete. . . falling out of the sky.
It's like the marketing lesson I got from some Ivy League types. You repeat the same message over and over and when you are soo sick of it you never want to say it again...
they will finally start to listen.
Robert, I haven't been a member of this board for very long - what is your forecast for peak/plateau liquids?
From my perspective, we can get to 90 million bpd and we will not peak before 2010. I can see a peak in the 2010-2015 range based on what we currently know. In addition, in no way do I believe that Saudi has peaked. I believe that their production reductions were voluntary, and despite much speculation, nobody has offered up any evidence to the contrary.
However, it is not clear to me that we will be able to bring new production online as fast as demand grows. In this scenario, supply remains tight and prices stay pretty high right up until we do peak. So, it's not like I am forecasting happy times for everyone. I just believe that our arguments need to be based on sound reasoning, and we aren't looking at half a picture and making conclusions based on that.
90 mbpd--total liquids or C+C?
The cornucopians always count total liquids. They'll count condensate, tar sands, ethanol, biofuels, melted down pork bellies and adipose chicken butts before they admit they're wrong.
Total liquids are what drives much of the world economy. Why wouldn't you want to count them?
Nice how the debate shifted from peak oil to peak whatever the f@ck you can pour out of a can. It makes all the cornucopians feel much better about themselves. This is crap. It's all about the EROEI. Slice it any way you want, when the cheap oil runs out the hard to get liquids become untenable too. What part of that don't you understand?
Sorry the current reality doesn't fit into your doomer/mad max visions.
EROEI is an important metric, but in regards to liquid fuel it's overrated. The inputs are what matters, and although crude oil is at/near/whatever you believe to be the peak, there are still plenty of other inputs to create liquid fuels.
I think the point is that it takes plenty of liquids to "create" other liquids: so, for example, if you count ethanol in the category of "all liquids," you're essentially double counting: you haven't subtracted the amount of oil (boe) from the ethanol.
"All liquids" is a scam. Let's keep it simple: C + C.
I think the point is that it takes plenty of liquids to "create" other liquids: so, for example, if you count ethanol in the category of "all liquids," you're essentially double counting: you haven't subtracted the amount of oil (boe) from the ethanol that it takes to create the ethanol.
"All liquids" is a scam. Let's keep it simple: C + C.
Exactly.
You guys can keep it as simple. For myself however, I'm worried the most about the following two items:
1) Being aware of when will my daily life be impacted by a lack of liquid fuels
2) How can I allocate my investments so that I can maximize my chances for a better future
Confining my analysis to only "C + C" won't get these two objectives accomplished.
IMO, there are two good reasons to use C+C rather than "all liquids." One, Hubbert linearization is based on geology, and doesn't really apply to ethanol. Two, "all liquids" has some double-counting. The oil it takes to produce those liquids is not subtracted from the total, but it's used up, gone. It's not available for you to put in your car. From the end user's POV, it's not clear that all liquids is any better than C+C.
Oh really? So how many barrels of oil are used to make one barrel of ethanol?
And when I ask this, I'm NOT asking about BOE - which could include natural gas based fertilizers, or coal generated steam inputs, but am specifically referring to crude oil inputs.
I don't think there's any consensus on that.
I've done some extremely rudimentary analysis on it, and it looks like crude oil inputs into ethanol are low enough to debunk the double counting theory. Here is a presentation that has some basic info on the energy inputs for ethanol:
http://www.eere.energy.gov/cleancities/toolbox/pdfs/shapouri_webcast.pdf
Can you post your analysis here? I would very much like to see that
Although I used Excel to break down and sort the information, I didn’t save all of my data/calculations. Like I said before, it was very rudimentary - and I guess really it was just breaking down other people's analysis and determining my own conclusions. I used a couple of different sources that seemed objective and informed for the information and that were fairly recent, and stayed very conservative (ie took the higher numbers). The information I searched for was based on ethanol production from corn.
I do remember some of the key numbers:
1 gallon of ethanol = roughly 77000 btu
Total oil based inputs = roughly 18000 btu
The bulk of the crude based inputs were used running the farm machinery, transport of feedstocks, and transport of the finished product to terminal. I did not count the crude oil used to manufacture the equipment, transportation, and manufacturing facilities since I do not know the average useful life versus production output for these items. I also did not count the crude oil inputs for processing the soil amendments such as potash/phosphate. I would think the crude oil input versus ethanol output for these items would be relatively low if they are spread out over their useful lives.
One thing that surprised me is how much fertilizers contributed to the input profile. Although these are derived from fossil fuels, the feedstock is generally natural gas. Another thing that surprised me is the rate of efficiency improvements over just the past five years. I would assume this would continue as producers will attempt to maximize profits.
Ethanol is still a weird ethical dilemma because of the food versus fuel issue, and don't really agree with the premise, but it is what it is and it doesn’t look like it’s going away. In another thread Robert mentioned that he thought Biodiesel was a better alternative, and after reading up on today I would definitely agree.
If a thread ever gets started regarding Ethanol, maybe I'll come back to it, re-gather the information and we can break down and debate the numbers in more detail.
That's still about 25%. Less than I thought but not insignifigant.
How many BTUs of NG went into it?
Austex said in reference to ethanol...
Although these are derived from fossil fuels, the feedstock is generally natural gas.
Ya' ain't just whistlin' Dixie there Austex, the most valuable, clean, easily processed fuel in the world being swallowed to make a heavily processed liquid at great expense. Ethanol is NOT a fuel creation industry. Unless it improves GREATLY in some way, it is nothing but a fuel switching industry, gobbling up the finist finite fuel on earth (natural gas) to be converted, along with topsoil and water, to motor fuel for transportation.....I asked once, if you have decided to burn natural gas in transportation (which you are doing by way of ethanol) why not just burn it directly as CNG? Monthes ago I asked. I have not yet seen an answer.
Roger Conner known to you as ThatsItImout
you have decided to burn natural gas in transportation (which you are doing by way of ethanol) why not just burn it directly as CNG?
Exactly. You end up with just about the same amount of transportation BTUs, without any soil depletion or food versus fuel issues.
I asked once, if you have decided to burn natural gas in transportation (which you are doing by way of ethanol) why not just burn it directly as CNG? Monthes ago I asked. I have not yet seen an answer.
Answer: Ethanol can be blended with gasoline and used in the car that I have sitting outside right now. Unfortunately, unless they come up with a snazzy bolt on, I cannot fill up with CNG. On top of that, it’s a current win win for our politicians
Expensive oil has resulted in NGL, CTL, and Ethanol subsitution. Like I said, it is what it is, it's not going away - and the amount of production from these sources will be significant enough to disrupt a peak date for fuel liquids. How much I'm not sure, but just between Qatar and SA - 1 mpd will be coming into production from GTL's over the next few years.
I do believe however, much of the growth of corn based Ethanol has been promoted with our tax $. Just glancing at the inputs and land usage, I would think that oil would need to be greater than it is today for it to not need subsidies
Yeah post what's up. You're real new. We see your stuff. Just post up.
We Need More Pixels. "Wipe Out Low Def In Our Lifetime."
Are you hearing that, My Brothers? Are you hearing that, Step Back? That's called marketing. It's like sex except better.
Prosperity is a product of net energy (the energy available to the non-energy producing share of the economy) and the efficient use of net energy, in ways that increase the pleasure of citizens. The expansion in total liquids is currently driving down average net energy, and thus undermining prosperity.
This principle underlies the economy's push for more btu's from coal (whether in the US, India or China) and, in combination with the structure of agri-business, explains why ethanol, except in Brazil, is a corporate welfare program. Going 'green' with ethanol, while striving to maintain prosperity, necessitates burning even more coal.
It is an attribute of the peak oil event, now well underway, that net energy from conventional oil declines. It is unclear, since the non-conventional liquids are currently produced on a conventional platform, whether non-conventional will ever have a superior return compared to conventional liquids. In any case, net energy and therefore prosperity are forced to rely on greater and greater innovation. Innovation of course is not just about gadgets. Doing without most gadgets while maintaining social stability is, it seems to me, an innovation worth pursuing.
If I can borrow from Alan, here's hoping we can think of better ways to employ the remaining net energy.
The cornucopians always count total liquids. They'll count condensate, tar sands, ethanol, biofuels, melted down pork bellies and adipose chicken butts before they admit they're wrong.
I don't know if that was aimed at me, but I am certainly not a cornucopian. When I say 90 million bpd of total liquids, I could just as easily be saying 5 million more barrels of C+C than we are currently producing. As I have argued here before, the proper metric is neither total liquids, nor C+C. It is somewhere in between. It would be an overall net liquids, something like total liquids minus the fossil fuel inputs it took to make them.
The peak oil debate started with people counting conventional oil, and many of us predicted that November '05 would be the peak. Now the EIA and CERA and everyone else is telling us we're wrong because they started adding in stuff they never did before. They basically changed the metric so they could prove us wrong. Well the lying government and industry (same thing) are as honorable with their oil numbers as they are with every other statistic they spout. What good does it do me to go service my stripper well that's 200 miles away every week if I must burn more Nigerian crude than what I pull out of the ground to get it? However whatever I do pull out gets counted in the U.S. total as if I'm really helping out the situation, bah. What good does it do to count the tars sands because when natural gas becomes scarce they'll get zero? Basically they are changing natural gas into liquid fuels, hastening peak nat. gas. All this is going bye bye. I don't believe for one minute they can keep this up, and I doubt very seriously that Russia, Iran, and Nigeria can, or will make up for declining production elsewhere, much less add another 5 mbpd on top of that. Every nation in the world is in decline and turning our food into liquid fuels doesn't change the equation one bit.
Every nation in the world is in decline...
Not true. A number of countries are not yet in decline.
Here is an attempt at an analysis of the projects that are in the works:
http://www.theoildrum.com/story/2006/4/6/4461/28812
That also suggests that 90 million bpd is achievable, and was done by someone who believes we are pretty close to peak. What is your analysis based on?
A very plausible scenario. But the most DISTRESSING scenario, if you asked me (which you didn't, I know!) An increase of 5 million barrels a day might put everyone to sleep....
90 million bpd for what ? one month, or 90 million bpd average for an entire year ? there is a vast difference.
I should have said most major oil producing countries are in decline, not "all". As to the article, those are forward looking projections only. They also assume everything keeps working at peak efficiency, no shutdowns, no surprises. Of course, if there are shutdowns or surprises that won't count, right? From the article:
The Achilles heel of this whole methodology, in my opinion, is that we have a very poor handle on the decline part of it.
Ding, ding, ding! Give that man a cigar. Let me ask you a question. If the Canadians abandon the tar sands project does that count toward the peak, or can we still add that in as "undeveloped reserves"? If I put ethanol in my tank, and skip the taco, does that double the liquids fuel output? Can I add my farts into the natural gas equation? No? What about cow farts, do they count?
I would have one thing to add. I think it is technically feasible with an all out push under ideal circumstances to get world output of 90 mbpd. I do not, however, think it is the prudent thing to do. Peak oil is not just a geological problem either, politics could well play a major role.
Robert, I can go you one better, I can increase the world oil output by 50% in one year using your method. I just take all the oil and natural gas in the world up to Canada, pour all the oil into the ground, dig it up and melt the whole stinking pile down with the natural gas, and voila! I have increased the world oil output 50%.
Robert, I can go you one better, I can increase the world oil output by 50% in one year using your method. I just take all the oil and natural gas in the world up to Canada, pour all the oil into the ground, dig it up and melt the whole stinking pile down with the natural gas, and voila! I have increased the world oil output 50%.
Yet your scenario is a fantasy. The mega-projects list is based on actual projects that are in the process of being constructed. So no, you didn't do me one better. The fact is that people that know quite a bit about this industry believe that 90 million bpd is feasible, including Peak Oiler Chris Skrebowski.
Feasible under ideal circumstances, maybe, but not for long.
Well, we have gone from "Bullcrap" to "feasible under ideal circumstances." That's what I call a good day.
I don't know that if we do get there, we can stay for long either. Maybe we see a steep decline from there. Maybe before we get there, supply fails to keep up with demand, oil prices go to $150 a barrel, and a worldwide recession sets in and we have flat production at 86 million bpd before peaking. Lots of things can happen.
But I don't dispute that we are standing near the edge of the cliff. I am just concerned with how to get this message out in a credible manner such that people take it seriously.
Maybe I should rephrase "ideal" to insane. If everyone picked a day in May and pumped all out like there's no tommorrow, they might be able to get that high for a month. I still don't think it's possible to average anywhere near 90 mbpd for an entire year, even if they did somehow manage to pull off the miracle of the century, like you say, the dropoff on the other side would most likely be severe. A BTU saved is a BTU earned, the U.S. should conserve instead of being a-holes.
"Look how vigorously these experts disagree" is not a good message.
Absent from this discussion is the element of conservation. We should not look at attaining new record Peak Rates as a race or contest. As the EIA pointed out in Y2K when they addressed Peak Oil, a hurry-up towards potential Peak Rate only serves to increase the ultimate decline rate.
In Y2k, EIA suggested that a reasonable target was 96-mbd in 2016, yielding a Post Peak NEt Decline Rate of 2%. Amid several scenarios, it illustrated that sustaining growth into the future to strive for say, 146-mbd, would then lead to a PPNDR of 10%.
We see this reality in the TrendLines Scenarios. With all else equal on the URR limitations, raising ones Peak Rate only serves to bring on a shorter plateau and/or more aggessive PPNDR.
The main thrust of the Peakster argument in the Peak Oil debate is that crisis will develop upon realizations that the globe is in overall Decline. And the steeper that Decline, the worse the outcome. The models show us that we can mitigate the Decline Rate by striving for a "lesser" Peak Rate. Lack of future will in itself will be painful with underlying growing Demand based on population and GDP growth. But IMHO, better "not to grow" than to face early Decline or worse: aggressive Decline.
Unfortunately there is presently no mechanism to bring on meaningful discussion of Zero Oil Growth. The (Rimini) Protocol was such a venture, but is stymied. Perhaps tying it to Kyoto or Kyoto2 that is being developed for 2012 is such a vehicle.
In less than 30 days, the UN's IPCC AR4 will be released. It succeeds IPCC 2001 and will give all stakeholders and decision makers a new baseline to discuss Climate Change mitigation for the 2100 to 2300 time lines. As i mentioned earlier in the week, leakage of some of the GCM results that form a foundation for this Report suggest sea levels will rise 7 feet by 2300. Depending on how staggering folks find that prospect will determine how aggressive the mitigation efforts will be.
You can't just use a list of new projects with their claimed additions to production, without also using your experience of how previous such claims have worked out in reality.
If you use that experience, 90 mbpd will no longer seem feasible.
I was already discounting the 90 mbdp number. If you add up the projects and subtract expected depletion, the total was well over 90 mbpd.
The noise level is going up in here compliments of the lunatic fringe again. The recognized monthly reporting and Outlooks have used "all liquids" since 1993. Laherrere and Campbell for ten years. URR estimates have included non-conventional sources since Hubbert's addressing them in 1949.
Campbell's major loss of credibility was his clinging to a narrow definiton of Peak Oil from y2k to February 2004 in spite of overwhelming interest in "all liquids". His major published targets now on behalf of ASPO are based on "all liquids".
Lesson learned.
Except by TOD purists.
Colin Campbell still tracks Regular Conventional oil and freely shares that information with academia, but he is reluctant to "headline" its course in favour of not demeaning the main message.
Since relinquishing the Y2k Date, Colin has published new dates running from 2003 to 2006. We presently interpret his data to indicate that the Conv Peak was in April 2005. The moving targets are subject to ridicule, but are a reflection of the methodology. As nations report past consumption, current reserves and future resources, the Date necessarily changes with those URR components.
Having said that, i must admit that folks seekig this Date comprise a heavy portion on our website which we have tracked for several years (along with all liquids).
WRT the double counting, until 2006 the components concerned did not have inputs that need recognizing considering the accuracy of the decimal point. When their status did warrant acknowledgement, most of the oilco's and Agencies did address their desire and willingness to report on a NET basis in 2006 and future Outlooks and stats. This fact may not be well known and hence the reluctance to trust 2006 figures.
I would add that you have to broaden the concept to include all scarce inputs it takes to make total liquids.
Peak oil (c & c) is historically significant because it signals the arrival of a major obstacle to economic prosperity: declining net energy. Peak oil may coincide with the peaking of net energy, or it may not. Total net energy may have already peaked, it may peak in the future. Perhaps we will learn how to outrun the decline in net energy by the adoption of innovative ways to use that which is available in the future.
For those concerned with the availability of transport fuel here is a thought: about 700 Americans will die in crashes involving motor vehicles in the coming week, as will 50-60 Canadians.
Global net oil per capita peaked in 1979. Net total energy has been flat since then. I.e., any "progress" since then has been towards increased inequity. The flatness since 1979 has been mostly due to natural gas. If NG falls off a cliff before long, then what???
Total liquids. About 5 million bpd above the current record.
Bullcrap!
RR,
That's a lot of oil. Where will it come from? Africa? Undeveloped SA fields? Tar sands? Ethanol? CTL?
This source(s) of oil has to compensate for a potentially steep decline.
Good points. It's nice to see objective commentary, and I enjoy reading your posts. Two questions for you (or anyone else educated in the subjects):
1) Regarding investments, what companies do you think hold the most promise going forward from an investment perspective?
Currently, the integrated oil companies are making money hand over fist, but the more I study on the subject, the more I'm beginning to think the majors will take a hit in the refinery pieces of their business down the road. I'm thinking this may occur because of the major refinery expansion plans in the oil producing countries could lead to less available feedstock (coupled with declining exports in general), leading to reduced margins for the majors. Along with Devon and Anadarko, I'm holding a small position in Chevron and am beginning to question if I'm putting my money in the right places (long term).
Also, do you think any alternative energy companies would be worth investing into at this point? I’ve been holding off because I don’t see any clear leaders in this area, but I’m not that educated on the subject.
2) I’ve read some good content on this site regarding ethanol and it seems like there is some expertise in this area by people that post on the board. Would it make more sense to concentrate resources into biodiesel instead? Obviously they both compete with food sources, I’m just asking from purely a liquid fuel standpoint.
TIA
Regarding investments, what companies do you think hold the most promise going forward from an investment perspective?
I work for an oil company, so I will withhold comment on that one. I think my own company is seriously undervalued, but I don't publicly talk about the company I work for because I don't want anyone to get the impression that they endorse my views.
Also, do you think any alternative energy companies would be worth investing into at this point? I’ve been holding off because I don’t see any clear leaders in this area, but I’m not that educated on the subject.
You hit on the right point about no "clear leaders." A lot will go bankrupt as they experience their first trough in the cycle. But I do favor solar power more than any other alternative.
Would it make more sense to concentrate resources into biodiesel instead?
Yes:
Biodiesel: King of Alternative Fuels
:-)
and 20 yrs ago there actually WAS excess capacity. your paradigm (demand = supply) is highly cornucopian.
WT
Just a question with a probably obvious answer.
Do they seismic(sp?) test on a regular basis to determine where the oil is located (and) its relationship to injected water so that they can alter pressures on the different injection wells to maximize production by avoiding "straight through" water situations.
Gas cap - Injected gas to maintain pressure and to force oil lower?
I assume yes to both but...
A lot of operators are doing 4D seismic (3D at different time periods) to plot the movement of reservoir fluids and contacts.
The most common way of monitoring rising water contacts is when structurally lower wells become non-economic to produce because of rising water cuts.
There are a lot of different ways to do water floods. The two primary types are water injection into the oil bearing interval, or water injection into the water leg (e.g. Ghawar). At Prudhoe Bay, they are injecting water into both the gas cap and the water leg. Their models indicated that the water would move very slowly through the gas cap, and it was an efficient way to keep the pressure up.
In a field like Cantarell, which has a gas cap, the gas/oil ratio in structurally higher wells can get so high that they shut the wells in (the gas cap expands, as the oil column thins). Cantarell is a gas cap expansion drive reservoir combined with a water drive, augmented with the nitrogen injection program that Pemex implemented.
The problem for all of these big fields is what happens when the field waters out, e.g., East Texas with a 99% water cut.
WestTexas, didn't SA only fairly recently bring the lower half of Ghawar into production (mid/late nineties)? I'm curious as to when you think this portion of the field will suffer the same fate as the northern half.
My understanding is that the reservoir quality decreases significantly as one goes from north to south. "Down Under" posted a note, which supports Morton's work, that in some portions of the field, the oil column has thinned by 90%.
A good article on the field by Morton: http://home.entouch.net/dmd/ghawar.htm
If you haven't read Simmons' book, you might pick up a copy.
Thanks for the read, that was an informative article.
What are your thought regarding Burgan? I read that they are going to maintain a plateau (1.7 mpd?), but haven't seen the intensity of analysis on this field as I've seen regarding Ghawar and Canterel.
Yes, where is our friend "Down Under"...he can put many of these debates about Ghawar to rest.
NO, Saudi did not just recently bring the lower half of Ghawar into production. Incriment I of Haradh, the very southern tip of Ghawar was brought on line in 1996. Incriment II was brought on line a few years later and Incriment III was brought on line in February of 2006. All three incirments of Haradh produce less than 800,000 barrels per day, already with massive water injection.
It is interesting to note that when Haradh III came on line, it hardley slowed Saudi's decline rate. Haradh III is supposed to produce 300,000 barrels per day, though no one knows what the true production really is. Saudi must come up with about 800,000 barrels per day of new production just to keep up with the decline in other fields. Haradh III did not even come close to that and that was the only new oil Saudi brought on line last year.
Also, Haradh is very heavy very sour oil and the field is much shallower than the central and northern sections of Ghawar.
Ron Patterson
Hi Ron, based off of the article that WT posted I found a better breakdown of Ghawar here:
http://www.gregcroft.com/ghawar.ivnu
The API rating of the lower areas doesn't look to be heavy, however the issue with the lower production rates that you mentioned might be related to the low permeability of the source rock.
WT might be able to analyze this data better, but wouldn't the lower production rate lead to a longer plateau and longer overall field life for these lower areas?
That is typical. The lowest fruit is picked first. The oil exploited later is more difficult to extract.
IMO, this is what many miss when they say things like, "There still lots of areas that haven't been produced yet." There's a usually a good reason why they haven't been produced.
Like Deffeyes says, we've used up half the oil, and the second half will be much harder to extract than the first half was.
I think the lower porosity and lower permeability means that the spaces for oil are much smaller and further apart. This means that the reservoir holds much less oil. But you are correct, giving up its bounty much slower means it will last longer.
Ron Patterson
Jeffery,
thanks for the reply, there is alot more to this stuff - obviously
"At Prudhoe Bay, they are injecting water into both the gas cap and the water leg. Their models indicated that the water would move very slowly through the gas cap, and it was an efficient way to keep the pressure up."
I guess I'm oversimplified in my thinking that oil floats. I also asssumed that the gas cap was injected gas (CO2) or some such gas to send oil lower.
My gut feeling also tells me you are right in the "R" debate. I will have to agree with posters above that the only time PO will be taken seriously by the MSM is when it is biting them in a the ass.
My fishing buddy grew up in Bakersfield, his father worked in the oilfields. His always clear comments about the MSM is how there are only nice looking babes as newswomen, it is so much about ratings (infotainment?).
My feeling all along is that the US will need a very hard slap to get everyones attention focused on energy. I have come to the conclusion that it will likely get very ugly eventually.
Reading "Blood and Thunder" the history of the american southwest(circa @1850). Might be a good primer for our future.
4D (explained by westexas) works in certain circumstances. Sometimes you see the injection water spreading like an ink stain. Sometimes you can barely convince yourself that there's an oilfield there in the first place. In general, 3D (and 4D) woorks best offshore because it's a lot quicker & cheaper to sail a boat boustrophedon (showing off his classical education) over the field with the seismic array behind it. Flat sandy or rocky deserts are often OK for this as well.
Article here about 4D in Cantarell http://worldoil.com/magazine/magazine_detail.asp?ART_ID=2385 with permanently installed seafloor geophones. You would still use a boat to tow the seismic source around. The displacement mechanism in Cantarell is so simple that I wouldn't have thought that 4D would give you a lot of useful extra information.
Gas cap - some reservoirs have an initial gas cap. Cantarell didn't; it appeared after production start up due to pressure drop and gas coming out of solution. This tends to slow pressure decline because of the higher compressibility of gas. Right now PEMEX are replacing all production from the field with injected nitrogen, so pressure will be falling slower (or not at all), though the gas cap is still getting bigger. When it fills the entire reservoir you turn off the lights and go home (oversimplification for humorous effect).
OK so the gas cap is likely a hydrocarbon also (gas flares?)? Can you inject nitrogen while siphoning off the hydrocarbons. Do they use the gas to run thier equipment if it is less valuable because of transport issues?
This oil stuff seems like tooth paste in a tube full of rocks.
Primary gas caps (there in the first place) or secondary gas caps (gas that came out of solution or was injected, and percolated to the top of the reservoir) are generally hydrocarbon, in fact mostly methane. You can position wells to avoid producing from the gas cap if that is what you want. Cantarell is a bit unusual because PEMEX is injecting nitrogen, so the gas cap and any gas produced from it will become (on average) increasingly nitrogen-rich and hydrocarbon-poor.
As far as I know, PEMEX avoids producing directly from the Cantarell gas cap. The produced gas is all gas that was dissolved in oil in the reservoir. "Siphoning off" is actually not too far from the truth.
They do not re-inject any of the produced gas; nitrogen is the only thing they inject. Most of it is sent to the national gas supply network, but some is probably used in-field as fuel for pumps, compressors, generators etc. Associated gas is the most popular fuel in the oilfield, as it is available when and where you need it, it is cheap (the operator sells the fuel to itself), and it is relatively clean and easy to manage.
All oilfield process facilities are built with the capability of flaring all produced gas in an emergency, but normally they flare at a nominal level just to keep the burners alive (like the pilot light in a gas oven).
Just to re-emphasise; the large-scale injection of nitrogen makes Cantarell unique.
Thank you for satisfying my curosity. I just find it interesting.
WT,
There is at least one more possibility (and I can actually think of a few more). Maybe the Saudi's were flush with US dollars (we know that they are) and did not want any more paper. They figured that they could monetize the crude in the guts of the earth as an when they need money.
For all their oil wealth SA has not had a great economy.
http://www.eia.doe.gov/emeu/cabs/saudi.html
They do have large reserves in the bank ($110B) but they have run budget and trade deficits. From my armchair I'd say they need the cash.
2008 is shaping up to be the year of the oil flood, as so many major projects previously planned to arrive before will finally come online.
This may make 2007 look small for major projects, though. I seem to recall there is a certain debate here, between someone who thinks we have truly peaked, using some rule of thumb heuristical techniques from a good 50 years ago, and someone with private knowledge (which can't be shared, understandably enough considering where it comes from) who is certain that oil production will increase mightily.
Sure, there are a number of variables - the world's economic state comes to mind - but it looks ever more as if the future remains ever farther in the future, while depletion is here today.
What I find amusing, if that is the word for it, is how people who keep insisting peak is 2010, 2012, 2015, etc. don't quite see that the difference between 2008 and 2010 is the same difference as between 2006 and 2008 - that is, the future is now, even if it hasn't quite arrived yet.
Objects in the rear view mirror may appear like a final missed opportunity.
I prefer William Gibson's dictum:
"As I've said many times, the future is already here. It's just not very evenly distributed."
http://en.wikiquote.org/wiki/William_Gibson
This is certainly true as far as the future of oil production is concerned. But don't worry; it's getting more evenly distributed every year.
It certainly wouldn't surprise me to see a "surge" in oil capacity in the next year or two.
There was a similar situation during the gold boom of the late 70s. Mines which had been long shut down were reopened due to the high gold prices. They got shut down again.
Long closed oil fields, closed down by major oil companies, are being bought up and reopened by smaller companies. Add enough straws to the near empty array of oil fields and you may very well suck up a production increase. However, if we could hear the slurping sound (that every parent of a young child is familiar with) it would probably be deafening throughout the world.
The price at the pumps yesterday was 79.9 cents/liter, down from $1.10 last summer. The average citizen has no idea why the price goes up or down, although many speculate that it has something to do with long weekends and greedy oil companies. But when the price goes down, everyone is reassured that all is good.
Peak oil is a difficult term for the average distracted adult to get his head around. It sounds like a good thing. That's OIL being pumped and we've never pumped more of that pure black gold! Congratulations! But why are you charging me so much at the pump??!! Oil stained brine or greasy gas, now those are thought provoking terms. I can almost hear the slurping sound.
Speaking as an economist, the short-term fluctuations in the price of oil have little or nothing to do with fundamentals of supply and demand. Both supply and demand are based on opportunity costs, and in turn, opportunity costs are invariably based on expectations, not on realities.
Then it gets complicated, because the expectations we're talking about here are the expectations that speculators and other traders have of the expectations of other speculators. And this second level of expectations is dominated by what the speculators think the other speculators think about the third and fourth level of expectations. All of this was lucidly explained in the great book by John Maynard Keynes, "A General Theory of . . ." published in 1936.
BTW, Keynes himself was a successful speculator and made more than one fortune lying in bed and reading a few newspapers for an hour a day. (In fact, Keynes was successful at whatever he did--one of the reasons, I think, for his fundamentally optimistic outlook on life.)
I agree - the best analogy I can think of is that watching daily changes in crude oil prices is like monitoring the DJIA at 5 minute intervals and trying to draw conclusions about the overall market.
This gets into one of the more subtle points about a logistical/geological peak - how hard will things be pushed to generate an immediate profit or meet immediate 'demand'?
For example, a field can be managed for maximum production on a daily basis, or for maximum production in terms of total production volume - but not both. A refinery or pipeline can have maintenance deferred, inspections delayed, and otherwise run until a problem requires repairing - at which point, a shutdown occurs. (Which is not unanticipated or 'unplanned' - merely that the timing is unknown, not that it won't occur.)
I do think that in many places, people are working on the assumption that the future is now, in the George Allen era Redskins formulation - increasing production today matters more than what happens in 10 years. For example, in former exporters like Indonesia or the UK, which need to keep production up, as they become net importers of oil.
It will not surprise me in the least to see a final surge to win the war (wait - is that an echo?) against declining production, because it seems profitable to those pumping the oil. And certainly better, in the eyes of those producers, than having their customers replace oil. And for the customers, it is easier to believe in the oil fairy, than grinding their teeth, or changing how they live.
This is a rehash of a 1970s era debate - but this time, the argument is with what comes out of the pipeline, and no one else.
The future is now.
you're not related to ross perot are you ? but seriously now those long abandoned fields (onshore at least) dont really amount to much , they were abandoned for a reason. offshore may be an exception. i read recently that talisman energy was going to spend $ 700 million (and i dont know if that was net) to reactivate a norse offshore field, planned to produce 40,000 bpd in 2009, i think. it is truely the odd animal* that can be economically reactivated and operated.
* i am involved in a prospect involving a failed waterflood ( early 70's). plans are to re-enter a structurally high well to see if any oil has migrated there over the past 30 or so yrs.
While i agree with u, there is an element of credibility and believability that is problematic. The MSM gets tired of gettig it wrong.
...like CNN reporting the USA was in Recession every month from Nov y2k to mid 2003.
... like GW'ers saying the 1998 El Nino based Global Temp Record would be broken in 1999, y2k, 2001, 2002, 2002, 2003, 2004, 2005 & 2006. By Jan 5th, they were already sending press releases that WMO may declare 2007 the hottest. Yeah.
MSM response: Yes, broken clock correct twice a day too.
Same with Peak Oil. MK Hubbert was in National Geographic with spread showing 1995 at the Peak. Campbell first said Decline would be in 1998. Laherrere picked Y2k.
The credible remain Ivanhoe's 2010, EIA's 2016, IEA's 2020 and others ... Not the upward and outward revisioners.
The danger at TOD that Robert et al see correctly is that this site has far too many space cadets. It is bad enuf calling the future and being very wrong very soon (Bakhtiari & WebHubbleTelescope). The dominant post at TOD is that Peak is behind us. It kills the message 'cuz almost every month since early 2003 i have been publishing new monthly, quarterly or annual Supply records that defy these baseless boasts...
There are lotsa snipers and oneline wonders from the lunatic fringe that don't see a problem with false bravado. We all know who they are...
Freddy, I think you've made some good points.
As I've looked at peak liquid isssue, I've attempted to leave out any bias. Unfortunately, it seems as though many who are involved in the debate do not take this approach. I believe many actually want peak to happen for a variety of reasons (ex environmental, they bought their cabin in the hills, whatever). This leads to a biased approach during their analysis which consists of only investigating and following up on information that will lead them to their desired outcome.
And BTW, if you think this site has people on the lunitic fringe, you should go browse peakoil.com for a good laugh.
In the Spring and Summer of 2004, Colin Campbell was clearly overworked. He begged for help in his newsletters. At that time he was making errors as high as 6-mbd in his Depletion Model updates. When i pointed this out with each new monthly release and that the errors were getting worse, i was ousted from YahooEnergyResources & PeakOil.com as my figures challenged their set Agenda. My growing and more vocal impatience with worse errors after the taking on of a new "helper" likely inflamed the situation.
In the end, ASPO conceded, retracted and reissued the offending Newsletters with corrected tables and actually put my website in the Newsletter. But they have not invited me back to post in the forum regardless of the kind comments there by Leanan, Rembrandt and other supporters. The situation with the Depletion Model is very much better and a new "liberal rounding" component was added for my benefit!
I mostly ignore the wacko's and snipers at the many mailing lists and forums where i frequent. They are the mere Noise one must contend with to get to some of the excellent posts by the shining stars.
Much of the problem surrounding peak oil isn't precision, it is preparation.
Projects which will take a decade or two to complete (whether rebuilding effective rail networks in North America or replacing its current vehicle fleet) are not really that sensitive to whether peak was 2005 or will be 2011.
Part of the problem is that much of what is being discussed here involves time scales which most people seem unable to recognize, which has also been a bit enlightening. The 'what if there is no oil tomorrow?' game is at best a game for local conditions over small timescales - the 'what will societies do when oil production is unavoidably 75 mbpd?' is something involving a decade or two.
That such a time will arrive however, is hard to dispute. And only dealing with the situation when it is unavoidable will lead to massive problems.
About a month ago, a couple of TOD members asked if i could attribute an AVG to the 13 Outlooks in our Peak Oil Depletion Scenarios. This seemed worthwhile and was included in the next version. From that data, i can advise, fyi, that Decline leading to the 75-mbd threshold will likely to be attained in 2043.
I realize that 75 was likely a figure just thrown up as an example, but it begged the question.
I've seen similar articles, but here's another one regarding our corn ethanol being taken from the mouths of the poor (esp. in Mexico)
http://www.timesonline.co.uk/article/0,,3-2544525,00.html
Rolling Stone carries an article on TXU as well:
Go Texas! We're Number One! Let us be the first (but not the last) to foul our own nest! For big money! Yes!
Corn inventory alert
You might have seen stories in the press about Mexico's tortilla price "surge" (to use a newly popular word). Here's the big enchilada... from Reuters: corn inventories at historic lowpoint, 3 week buffer supply...
http://preview.tinyurl.com/wdla8
Looks like it's not just Mexico who should be worried.
Hoo, boy. Like Robert says, this is going to be a fiasco.
Indeed - I was talking about the food-vs-fuel issue the other day, and a lot of people just don't see how it is possible. I didn't have time to lay out more detailed arguments as to why this is a concern, but this development might help to raise awareness.
Agreed... but the tortilla side is quite serious.
http://preview.tinyurl.com/yfhuba
Given the strange weather patterns we are currently seeing in the Midwest, I am
not sure we will be able to see a corn harvest in 2007 equal to 2006. As I see it
that would mean we would have to import the shortfall. Since worldwide grain production
is down that would be very, very bad.
The thing that bothers me, is the indifference coming from the general public. They just don't grasp the inevitability of situation. First the poor are effected then everyone.
Here is something else I noted about corn last year.
I never hauled a single load to the farmers bins/silos. All I hauled went straight to the big two(ADM/CGB). I don't remember seeing anyone else putting any in the bins either. In fact I think they emptied last years stored corn as well before the harvest.Maybe they filled them with beans(soy that is). Little wheat grown last year. This year its bigtime due to prices. Yet many will do the corn followed with corn I believe. So we may have a bigger harvest if the weather complies. Planting time comes we can tell.
BTW 5 new ethanol plants starting up in this end of Ky. See a lot starting up in N. Carolina as well.
There was literally mountains of it stored on the ground as well under enormous tarps. We ended up with a fair crop but the very bad weather just crushed it into the ground and the rising creeks took the rest. If you had hill ground you were pretty much ok but still a hell of a lot was just tromped into the ground with the combines. It takes a very special corn header to pick up downed corn stalks.
Missouri and Illinois I do not know much about. I suspect that with the rapid runup in prices that they just hauled it all to the majors.
This being the case only the big wheels have the stored grain and that which was put on contract by the farmers.
Could be bad. Dunno. The grain brokers know for sure though. The ones who are imbedded with the big guys and do their marketing.
I am thinking. Bad news ahead for those who like tacos. Thats me as well. Lots of hispanics around this area. . They do our tobacco around here since you can't get your kids to do anything anymore.Used to be the women stripped a lot of tobacco but I don't see even that anymore.
Hi airdale,
Your reference to tobacco farming brought back some NC mountain memories. I grew Burley for a couple of years because we had an 'allotment.' Hard work, but a real community/family thing when planting, harvesting and working it off. The auctions were a real scene. Few farmers in the NC mtns growing 'bakker' any more. Can't say I'm sad to see tobacco itself go, but I hate that the small farm lifestyle has all but disappeared.
And for those who want to understand why farmers, including corn growers, will not over time gain from the rising price of corn, here is the relevant paragraph from the story:
"The ethanol boom, fueled in part by a federal requirement to use more renewable fuels, has cheered grain farmers but has also inspired higher land rental rates. Livestock feeders face sharply higher feed costs and worry they will be out-bid for grain. Still, USDA has estimated that grocery and restaurant prices, will not rise significantly."
The feed costs are what is worrying the feedlot operators.
Many farmers are not into feeding out. They 'background' or produce calves for the auction. The calfs gain a lot of weight before weaning. The backgrounds use the calves to harvest their fields of grass and market them before winter and having to carry them over.
They then feed little corn. Mostly just rolled hay in the winter and pasture in the rest of the year. A wise cow/calf farmer will stockpile some winter pasture as well.
Its the feedlots who are in a bind.
Land going up? Most have their land. Will rent go up? Not necessarily. The farmers here pay around $75 to $100 per acre. Why does the price of corn matter to the landowner? He gets his half of the crop or third depending on how you agree but cash rent shouldn't change that much.
The farmer sees his land appreciate then he has more assets to borrow on. He will dig into his CPR and HEL to increase acreage and with money he made off last years runup he will be able to purchase more land even if at higher prices. That means with a tight grain market he can afford to do that.
I see quite a few putting away a lot of profit this last year. Those who didn't get drowned out from the massive rains. Those , like my buddy with 3,000 acres , who were able to get it early and inbetween and not sit on they butts like many.
I think the farmers are making very good profits.
That story might not reflect reality. And why won't grocery and restaurant prices rise? They all ready have and IMO will some more.
The USDA is sometimes , maybe most times very poor on forecasting.
These are the idiots that brought us kudzu, asian lady bugs, carp, multiflora rose and many other stupid ideas. They are good bean counters but as knowing whats best for farming and agriculture , many are not, that good. I have had quite a few ag extension agents look over my farm and make suggestions. I didn't find that I could take them serious. Some didn't even know what type of soil we were standing on. You show them a funny insect on , say milo and they shake their heads and say they will get back with you. By then a lot of the damage is done.
Example: We went big time into GPS. They made all these claims. We found most to be worthless. Didn't work in the dirt. Worked in the lab maybe. Not in the dirt. They never did get the tilt factor figured out. I had to show them how crooked the tracking rows were and that they coinsided with the rises in the field. 'Oh they said..well we never saw that...Yeah I said because YOUR FIELDS were flat and had no PTO ditches. "What are PTO ditches they asked?" "Fools, fools you don't know ditches drain creekbottom fields and we cut them with a ditcher on a PTO shaft running at 8 mph across the fields?"
In summary the farmer stands to make some real profits. The USDA is wrong IMO. He grows the crops and the USDA quasimodos push the Ethanol thing,then want the farmer to not get the run up price as a result?
Demand is there and the price goes up. BUT Oh..farmer guy why should you profit on this. Everyone else will but the guy who supplies the Feedstocks? He shouldn't profit..its obscene!
Bah.
Just means that Chicken meat will get more expensive. But it is hormone infested and not good for you. So on the whole a good thing - for some. Unfortunately for my family, it is not going to stop my wife from continuing to pump my daughter full of chicken nuggets.
BTW you can still get chicken wings for pennies on the pound at wholesale.
With Canadian natural gas running out in a handful of years, and the MacKenzie Valley pipeline in uncertain territory (see Stoneleigh's article at TOD Canada), we get back to Dave Cohen's question last year: "Where will Canada get the gas"?
Total and Husky have publicly spoken abour nuclear, but even in the best of circumstances that would take at least 10 years. As seen below, the circumstances are not that good: two newly elected politicians speak out against it, more or less spontaneously.
Both also want to raise taxes and lower CO2.
For the oilsands industry this means:
It gets harder all the time to see how the industry can save itself. That may sound outrageous, but it wouldn't be the first time that Alberta, like US oil shale, simply implodes.
Natural Resources Canada last week published October natural gas production numbers. Canadian ytd production of marketable gas is up about a percentage point over the first ten months of 2005, but production for 2006 will in all probability still be about 3-4% below the peak in 2002.
New well completions for all of 2006 are down by about 5% from 2005, though still more than 4 times the per annum number in the mid-nineties.
Canada acts as a buffer for USA demand. In August, usa working gas was 16% above the 5-yr avg and prices were tumbling. The writing was on the wall. Early figures show 2006 usa nat'l gas production was 2.9% above 2005. They didn't need an accleration of our exports which clealy would have driven prices to the $4 area.
There is much ado over reduced Cndn imports but it is wrongly attributed.
Freddy, I don't argue with your basic premise, but I have seen you put up the 2.9% increase number a few times and I think it can be misleading without some elaboration.
Based on EIA figures for US gas production, an increase of 2.9% over 2005 represents about 524 BCF of gas.
The hurricanes reduced US gas production in 2005 by about 540 BCF based on MMS numbers.
Therefore, while the 2.9% number might make it seem that overall US gas production is increasing, it is actually flat or possibly a hair down from 2005 after considering the hurricane loss and recovery.
I'm sure you will tell me if something is wrong with my numbers..
Earl, the numbers aren't really important. U have an obvious grasp of the nat'l gas situation. My reference to strong gas figures is based on the negative comments by many forum members thru a cornucopia of threads wherein they see nothing but crisis for gas users in the short term.
These posts have been prominent since early 2003 on many forums. Yet they have not borne out. And EIA continues to show stability 'til 2014.
The recent peak in gas was 2001: 19.6-Tcf
And how much have we fallen off since then? 10%? 20%? 30%?
U would think so listening to the defeatists among us.
In reality, with last year's 18.5-Tcf, the usa is down less than 6% and producers are poised to bring in 18.9-Tcf this year and 19.1-Tcf next year (2008).
On other boards, many of these posters were boasting that gas would be at a sustained $20 to $30 by today. And the Recession would be in full steam. They loaded the forums with a cornucopia of so called gas experts and pundit backgrounders as if that made their forecasts authoratative. And we remember well the warning that the entire pipeline system would cease to have pressure in the 450-Bcf Spring troughs before us in 2004 & 2005 & 2006. The Spring 2007 scary stories have already commenced.
Seeing $6 pricing causes them no end of pain and especially when they see my name. And it feels good...
Wow. My first job out of college was in the nuclear power business. This was on the design/construction side, not operations. During my first months in the company, all the drawing boards (something we used back then) were covered in plans for a nuclear steam generator for use in the Orinoco Heavy Oil Belt.
This was in the mid 80s, with oil prices on a steep downward slope. We were putting the project into mothballs: it had vanished without trace by the end of my first year in the company, which turned out to be my penultimate year (work it out). The factory closed in the early 90s. I'm pretty sure the senior design engineers would all be retired or worse by now, and you would have to restart from scratch.
A very good friend of mine at college, also studying engineering, saw this coming. He stayed on to do his PhD, and I remember him telling me that he was going to dedicate himself to keeping nuclear engineering alive as an academic discipline in the UK. According to the letter I got from him with this year's Christmas card, he's never been so busy in his life.
edited
What does that mean? edited? Freddy edited it? Or it was edited for him.? edited. Freddy would never edit his own shit. Only the Gods edit Freddy.
A frog from Quebec that wants to interfere again with provincial jurisdiction Energy policy and wants to meet our Kyoto commitments by sending a $7-billion cheque to Russia for carbon credits. And he was the Environment Cabinet Minister that helped get his Gov't kicked out for 13 years of "do nothing" governance and Corruption.
Yup that's a recipe for prime minister material.
Methinx the polls show that Canadians have had their fill of socialism for a while. His bump lasted what ... 29 days??!!
Scotland wants independence now. Whaddya think about that? CryWolf won't talk to me anymore, but I'll be looking into this 29 days thing.
I like "28 Days Later." One of the best movies ever made. I like the post-apocalyptic stuff. But Freddy knows this. They keep teasing me with a sequel.
I like the way the dudes from Scotland goof on Northern Ireland. Fuckers, What is that all about? But the Welsh are OK. Yeak right. Get it together.
In thinking about the potential of compressed air energy storage the thought of using depleted oil fields entered my mind. Does any one know the cumulative amount of oil the US lower 48 has pumped since 1859?
Oilfields are emtied via small gauge wells, airflow require large gauge wells. Old oilfields will probably not be directly suitable for compressed air storage.
When I link to an article and return, the return point is the top of Drumbeat, not the point of the link. This is annoying and wastes time. Is this considered a glitch?
It just stopped doing it!
If you hold the shift key down when linking, you will simply open another window with the link and therefore will no longer have this problem.
Ron Patterson
You can also Right-Click the link and select Open in New Window (or in New Tab).
Rick
Re: Expensive tortillas:
Inflation adjusted price of corn: http://inflationdata.com/Inflation/Articles/Corn_Inflation.asp
Listen to some "experts" discuss the corn and commodities/ethanol markets here:
http://www.iptv.org/mtom/market_analysis.cfm?ShowNumber=3219
I have read some of it. This is the kind of dialog one hears all the time from the forecasters/traders. Out in the fields the farmers know way ahead if its going good or bad as the combines roll. They have instant readouts on yield as they roll across the fields and of course each semi load we run off tells them precisely the harvest yeild. I scale twice as I dump the trailer.
The grain bin folks though have no real idea at that time. They are just busy trying to keep up. Later they make pronosticastions and are usually all over the board trying to sway farmers and get them to give away their harvest. Its all a game but the farmers don't bite, at least not the smart ones. They play those markets extremely well, usually.
Last year one of the very biggest operator in this area sold all his corn at once and then the corn price jumped a whole dollar!! That was stupid on his part. One dollar on a bushel is not chickenfeed.
Many years I only got $1.15 or thereabout on spot for my corn. I got the hell out and sowed my fields down, turned them into hay and made far more money and did all the work myself. Never hired any equipment.
But the land price like they say is skyrocketing. Mine appraised at slightly over $3200/acre a year ago. I paid $445 in when I brought it.
My dad brought land in the 60's for $45/acre and quite good land.
I am sure its way beyond $4000/acre in the middle of the corn belt now.
I say the future looks very bright for farmers. Very good indeed.
Airdale,
Very grateful for your reporting on what you are seeing going on in farming.
Would you be revealing trade secrets, if you gave us some data on farm economics?
For instance: If a guy has a 1000 acres in corn, what is he spending on pesticides and fertilizer? How much is sinking into maintaining his capital stock (buildings, machinery etc)?
Of course all this varies according to soil, weather, and whatever nature or luck throws at you. But I'd bet almost all of us are in the dark and haven't the sketchiest idea what's involved here.
Since farming really is an energy biz, I'd love to see an article giving us a primer and some very rough numbers. I don't think that would be out of place on the Oil Drum. I wonder if the eds have any thoughts.
Then again, maybe there was an article and I missed it.
Ahhh.. a very big order.
Let me take a general shot at it.
Farmers are really NOT farmers as we speak of them. Its a very vague term. Break it down this way. There are landowners who have varying amounts of acreage. Some may be OPEN and therefore tillable and some may be woods and not tillable(as yet). Then you have folks who work land. This may in fact be the landowner IF he has enough land to work it and make a profit after his capital outlays(equipment,etc). There is a point at which the equipment can break you (bankrupt you) if you haven't enough land to justify it.
Ok so far. Now along comes a guy who is termed an Operator. He wants to farm land. He may or may not own some of his own. He usually starts by having been an 'old timer farmer' in that his family had some land and he had some old equipment and sorta of works slowly into the more land and newer equipment. Lots of guys like that. Its hard for someone who doesn't have a background to just invest and start farming. You need experience, good banks to lend money on your reputation and the ability to get landowners to trust you and make deals with you. Not likely if your an unknown.
Ok so far. The landowners and operators then become the mix of 'farming' today. The landowners might just have 30 acres to rent or share. Share means the operator gets half of the profits and the landowner the other half BUT the landowner must cover the cost of some of the "inputs". Inputs being cost of seed,fertilize and so forth,,even the cost of hauling the grain to mkt and perhaps drying it.
Ok..more to go. They may not do a half and half deal but more like the operator pays all inputs and provides all equipment and the landowner just provides the land and gets then just 1/3 of the profit. Well he really gets 1/3 of what the grain brought as it was sold. It could have been sold on the 'spot' mkt or via contracts but usually most small landowners just take spot. The operators might sell some spot but it big will always do commodity contracts and either store the grain at the graineries or in their own bins on their land or the landowners bins. The landowner might also want some of his stored and play the market as well.
So we have two entities and various mixes of working the land.
Now all of the knowledge usually rests with the operator(who may only do his own land but usally does a mix of others who he makes deals with and some he might cash rent) and that knowledge is of supreme importance. He decides when to drill the seed, what pesticides/herbicides etc to use and when to use it. How to prepare the seedbed. What the weather is doing. When to harvest. A lot of judgement and skill is used at these points.
In my case I sometimes drive tractors or semis for an operator who also rents some land and shares(sharecropping) some land and has some land of his own or his families. He needs help at crucial points during the year to make this happen. He can't afford to hire and keep employees during slack times so its all seasonal and they usually don't pay very much. Can't afford to anyway and the ones he hires are usually living a lower standard of life and in the rural areas where cost of living is cheaper. They move around a lot too. To drive a semi for farming doesn't require a CDL usually,depends on each state. I have a CDL and therefore don't worry about it but I never use it except to help my friend. I never used to drive trucks either and don't even wish to think about it.
You then have the operators, landowners, farmhands. They all work together to cultivate the land and bring in a harvest.
Costs are referred to as INPUTS. The operator tries to understand what the various crops will do as far as the market goes. He then has to keep his inputs below what the crop brings(various crops, harvested at various times,etc..complex) and if he does meet his inputs then he takes a loss. He wants the price to exceed his inputs. Inputs are many and varied. Employee pay, housing,electricity,diesel,new equipment, maintaining old equipment,and many many many more. Most keep one person busy just doing record keeping and accounting. Some times its the spouse yet they all have computers as well as satellite services that can display realtime weather as well as a streaming display of commodity markets and prices. Real time.
Many are into 'precision farming'. This is an area I have worked in and implemented extensivley. Use of computers as well as GPS coupled with autosteer of tractors or just precision tracking while drilling seed or harvesting and even spreading lime as well as fertilizer and can get very complex. Such as variable rate application of fertilizer and spraying of crops. This prevents waste and supplies just the exact amount of whatever at just the right place and right time.
Fertilizer is costly and you want to maximize its use. Same as with seed. The drills are very complex and can be huge. Plant 32 rows at one pass.
So numbers are very hard to come by and generalities are hard to make.
Its constantly shifting and you have to remain current on seed varieties, the weather, the market, keep your landowners happy, keep you land under control, keep some onery farmhands corralled , and pay the bills as well as keep the wife happy and the children going to school. Be constantly repairing you equipment all the time. I have seen combines become stuck in the mud, break very expensive parts and trucks blow tires or get stopped by Dept of Motor Vehicles with sometimes fines in the neighborhood of $3,000 and more.
The farmer/operator has a very tough job and he can't be sick too long or off work. Winter is the time to get caught up. Breakdowns in the field can kill you. Weather can kill you. Farm bill are very complex and must be completely understood.
I can't venture cost inputs since they change so much but many are extremely concerned with the fuel costs. Enough to sometimes go get a tanker and haul their own in order to save. They use an enourmous amount of diesel and must have it ready at all times.
When a piece of equipment is idled in the field then you might be basically loosing lots of money the longer it sits there. When you do not have the fuel ...then you are in very very much trouble. Last year was very worrysome for farmers in that regard.
Without diesel nothing can happen. The semi I drive achieves about 3 mpg. This counts all activity and its lousy but thats because of many factors. They have 2 40 gal saddle tanks. If I was running over the road it would be far better mileage but sitting at the scales or the dump pits at the graneries is why. You can't just shut off a big diesel with turbochargers and crank it right back up as you wish. Different that diesel automobiles. You have to let the turbos run down and the oil as well. Due to repairs being very expensive you baby the engine. These rigs are capable of extremely long life if cared for.
Most operators/farmers now own their own rigs and sometimes haul for others as well since this takes care of the cost inputs. Many also own their own heavy equipment. Track hoes, dozers and front loaders. They use them for other purposes as well as clearing land and so forth. I had some nearby farmer boys install my septic tank last year and chamber fields as well. They had the equipment and do it on the side as well as farming thousands of acres.
My fried farms 3,000 plus acres. He has 200 hp tractors and many smaller ones. Some use tracked Caterpillar tractors. There are all varieties of equipment. A new combine can easily cost a quarter million and not counting the header which is switchable.
These folks have to farm with a very big footprint or get out. No other way to do it and justify the equipment costs.
The little farmer. I did that for a while as well. Most now just rent their land or some form of sharing. If you run cattle then you can get by with little equipment as decent costs. You might do pigs but thats going the way of huge confinement operators as well as chickens. Basically cattle is it except for niche farming like sheep or goats.
In Ky due to the loss of tobacco many are turning to niche farming. I buy a very nice country salt cured hickory ham from a farmer in Muhlenberg county and he and his wife do it all on their farm. He makes a good living at it. His prices are kinda high. $2.45 per lb but the ham is worth every penny.
This is what is happening as far as I experience it. Farming is what might save our asses when TSHTF. We live on a fairly thin layer of topsoil. When the fertilizers go due to peak oil then we are going to have to become very very good at farming the way it used to be and doing that niche thing. Some raise chickens and some milk cows and some meat animals and work out a system whereby we can survive.
That thin layer of topsoil might be all we have left. There won't be time to watch Oprah or Reality shows or American Idols. Everyone will be busy working the land or doing some niche job, like washing others clothes or whatever. We will likely do a lot of bartering.
We are totally unprepared for all of this if thats what it comes to. Only those who are doing it now have the means and the skills and the land.
How to further qualify or quantify all the above is something you can try to find out via the USDA and the FSA offices that exist in each county in each state. They sometimes know whats going on to a degree but most often are just learning it from the farmers and are not really good leaders in this area. They are basically college grads who want to help but need to learn one hell of a lot first. I have known a few who could actually get down in the dirt and prove something. Most rely on a college/university ag school and the profs there who might be doing a lot of research on farming. It appears though that this is an area that is always changing and causes many farmers great consternation. I doubt seriously if ANY of them have an appreciation for PO. GW for sure. PO maybe a few. I have not heard many farmers who have any idea about PO either. The ones I talk to just brush it aside.
Its not a pretty picture out there. The only good thing is grain prices are up and looking good. Some years the farmers just eat their losses. Sometimes they commit suicide like in Australia. Many have a very hard life. Many are in deep debt. I don't know why they persist but they do. I know some that are quite rich. I know some that barely survive. Its a mixed bag. Without them we would all be toast.
Hopefully farming has advanced. I see used up fields and good fields. I see good farming and bad farming. Technology has been very well used in agriculture. The advances are mind boggling. I installed a program called Farm Works that allows a farmer to know every detail of his operations, has geophysical data on every inch, what he did , when he did it and will tell him what to do next. We used it one year and the operator decided it was not something he could spend time on. Required too much data entry. I was using handheld PDA that had attached GPS units. I could track every inch of a field and scout out waterholes, ditches and the soil fertility. The technology was extremely advanced yet many farmers are shy of too much technology.
The tractors I spoke of have many embedded systems and modules. If the hitch is acting up it throws an error code into the main computer. I have to go retrieve them and diagnose the failure. Usually a sensor of which there are huge numbers. Sometimes I have to do upgrades or flash ROM memory. Its very complex and fieldhands have no clues about using it. They can hardly drive using the GPS lcd screen that tells them when to turn at the headlands, the field being automatically laid out as a virtual highway by the computer.
Far removed from the ass end of that mule and the walking plow. We have come a long way. We may revisit that mule ass and that plow in the near future if we are not very very careful and wise.
airdale
P.S. I hope this has helped some to explain about modern agriculture.
I am not an expert on agronomy or other fields. I just state what I see and experience. Some may not apply to other areas of the country.
Thats the way I see it in western Kentucky ,"The Land Where I Was Born and Raised"....as per "I am a Poor Wayaring Stranger"......BTW George Clooney is a Kentuckian..who sang that song in the movie "Oh Brother Where Art Thou"
Thanks a ton, Airdale. Cool overview. 25 years ago, in my teens, I spent a few months working on farms during summers. Dairy mostly, but those guys had crops,too. But my tasks were simple and I didn't pay much attention to the complexity of whole operation. Which obviously has increased substantially since then. I knew nothing of precision farming.
Wow only $4,000 an acre. Willamette valley OR prices would be cheap at $10.000 more than likely $15,000. Most of this is due to the nursery industry who can afford to pay it. Nursery is in decline compared to the last several decades. Fuel prices making shipping to high and abundant competition. prics holding high yet.
Does anyone have any knowledge about the new biofuel, SoyMazia 128 news item above? RR?
Yea, I'm surprised that article hasn't had any comments.
Consider that the cost of a bushel of soybeans is around $4. How can you get 5 gallons of biodiesel out of a bushel for less than 50 cents per gallon? That means your biodiesel would cost less than $2.50 when it cost $4 to get the beans. Doesn't add up.
I looked at the article as well. It didn't seem to add up to me either. Previous methods for making biodiesel from soybeans extracted the vast majority of the oil. This one can't possibly extract much more oil, so what's the catch? I would have to look at the patent, but my guess is that the case is overstated.
Another back of the envelope calculation:
a bushel of soybean is about 60 lb
5 gallons of diesel is roughly 35 lb
so 60% of the weight of the beans is converted to biofuel? Is that realistic?
Methanol is added as well to produce the biodiesel. But no, I don't think that 5 gallons of biodiesel from 60 lbs of soybeans is realistic.
Thanks, guys. After reading your comments, I went ahead and watched the "video" at the company website. My gut says "scam" all over the place. Let's not waste anymore time on this. He won't even call it biodiesel, because its some magic formula better than biodiesel. He's giving away the first 10% of profits to battered women, battered children and battered animals.
Taken from battered investors.
The article said 5 gallons of biodiesel equivalent. That includes the energy in the gas and char produced in the process. It sounds to me to be either a variant of F-T or TDP.
I found the article quite interesting and if you follow further there is a video on the usse website. The claim is that this is not biodiesel but a new and different form of biofuel. If the guy is selling mouse milk we will soon know, as he indicates production will be 20,000 gallons a day in the next 9-10 weeks. The $.50 claim is based on utilizing the value of the other products including an organic fertilizer. 5 gallons per bushel would mean the potential for 15 billion gallons of biofuel, if you used all of the US Soy production. That would amount to 357 million barrels or 1 million barrels per day. How exciting that if we stop using soybeans for anything else, and dramatically increase the potential yield for fuel by a factor of three, we can replace 5% of what we now use. Are we screwed or what?
Thanks, treeman. I agree this is either great news or mouse milk and we should know soon. They have hired a communications firm, to deal with the phone calls.
Since announcing their energy discovery in 2006, USSEC has averaged more than two thousand inbound information requests every week, a significant testament to the impact of their technology and what it means for the future."
Iran and Venezuela back oil cuts
"more conventional power choices of coal and natural gas"
Fraud?
Welcome to the REAL WORLD of business.
http://www.prosefights.org/gas/gas.htm
Fix up ...hopefully.
http://www.prosefights.org/gas/gas.htm
Maybe interesting to find out how much money invested in Quaneco.
And who invested?
P. T. Barnum Never Did Say
"There's a Sucker Born Every Minute"
http://www.historybuff.com/library/refbarnum.html