DrumBeat: March 18, 2007

Europeans Do It Better
If fears of population implosion result in paid parental leave, improved childcare and more support for mothers' careers, it won't be the first time a government has done the right thing for the wrong reason. But isn't it weird to promote population growth while we wring our hands over global warming, environmental damage, species loss and suburban sprawl? The United Nations projects that in 2050 the world's population will reach 9.2 billion! When we think of overpopulation the usual image is of some teeming Third World slum, and indeed most population growth will come in the developing world. But actually it's the developed world that's doing the earth in. Every American uses as much energy as forty-eight Bangladeshis, and as many resources as an African village. Europeans and Japanese aren't far behind. What feels right for a nation or an ethnicity--we need more Russians! more Italians! more Scots!--might be wrong for the human race, to say nothing of polar bears.

Army Foresees Natural Gas Crisis

The Pentagon has been talking recently about going oil-free by 2050, a fairly radical initiative given the hidebound nature of the institution and the complexity of the technologies it employs.

But oil apparently is among the least of the Army's energy problems.

According to this newly-minted memorandum , the Army's assistant chief of staff for installation management is more worried that the worldwide supply of natural gas will dry up within 25 years. Says the memo:

"Current Army assumption is that natural gas may cease to be a viable fuel for the Army within the next 25 years based on price volatility and affordable supply availability."

If the Army's assumptions are correct, the situation may "threaten the Army's ability to house, train and deploy soldiers," adds the memo.

Nigerian pipeline spill could impact U.S. gasoline supplies

A pipeline spill in the Niger Delta region has cut production by 187,000 barrels per day. There is no known cause for the leak and no timeline for repairs. This may prove important for the U.S. as Nigerian crude is light and sweet, which makes it ideal for producing gasoline. As the United States heads toward the summer driving season, these grades are more sought after.

Countries oil reserves may cause upheaval

Simmons' conclusions indicate that the Saudis are using super aggressive methods to pump more oil at a faster pace from these wells. Simmons contends that this is a system that drillers use to squeeze the last bit of oil from drying wells.

Simmons adds that such expensive horizontal drilling technology used by the Saudis would not come into play if their vertical wells were producing without substantial problems.

Ambassador Denies that Brazil Has Ethanol Slaves

The ambassador of Brazil in Great Britain, José Maurício Bustani, in a letter published this Saturday in the British newspaper The Guardian, refutes a story that appeared in the publication on March 9 charging that Brazil is using slaves in its sugar cane plantations.

Oil Profiteers Will Earn Our Outrage

Washington needs to investigate speculation in crude oil to find out who is profiteering from the rise in energy prices. The oil companies, of course, are making a fortune. But they don't seem to be the catalysts in driving prices higher.

High costs put on hold new refinery projects

Refinery project cancellations have accelerated in recent weeks as escalating costs raise more questions over the future profitability of new units making key transport fuels.

Russia bolsters Gulf energy strategy

President Putin's high-profile tour to the Gulf follows on from the visit of King Abdullah, then Crown Prince, to Moscow in 2003, the highest ranking Saudi official visit to Russia since 1926. Significantly an agreement was reached to co-ordinate energy policies. A momentum now seems to be building up following this.

Political fears scare oil investors in Southern Sudan

The 2005 peace agreement, which ended two decades of civil war in Southern Sudan, not only brings the opportunity for millions of people to return home and begin new lives but also gives investors an opening in a needy country with large oil reserves.

Wall Street drools over prospect of capturing Iraq oil wealth

The Iraqi cabinet's adoption last week of a law creating the legal framework for turning over the country's oil wealth to American corporations has touched off a chorus of salutes from the Bush administration, congressional Democrats and the corporate-controlled American media.

Russian atomic energy industry to become self supporting by 2015

The Russian atomic energy industry will become self-supporting and build new units with its own funds by 2015, First Vice-Premier Sergei Ivanov said here on Friday.

Global oil glut hidden by rig dearth makes drillers good bet

The professionals most familiar with the so-called oil shortage know there is an estimated 3tn barrels under land and sea. That is why they are making their biggest bets in drilling rigs where the scarcity is no illusion.

Global warming is a 'weapon of mass destruction' - Climate experts hit back after being accused of overstating the problem

Sir John Houghton, former director-general of the Meteorological Office and chairman of the Royal Commission on Environmental Pollution, entered the debate over the seriousness of climate change after two meteorologists were reported as saying that "some scientists have been guilty of overplaying the available evidence". He said he agreed with the Government's chief scientist, Professor Sir David King, that it posed a greater threat than terrorism.

Arctic could have iceless summers by 2100

Climate models show a complete melting down to open ocean in warmer weather, maybe as early as 2040.

Ski industry goes green to fight warming

The ski industry is going green to help offset the pollution that feeds global warming — a phenomenon that challenges the resorts' very existence with the threat of later snowfalls and earlier snow melts.

Open Letter from Brian O'Leary to Al Gore

You have asked the public to address the important question: "How can we reverse global climate change?" I agree that taking on that task is critical for our collective survival. You have also stated that we must freeze and drastically reduce our carbon emissions. I totally agree.

The most promising answer to your question is surprisingly simple and can be summed up in two words: new energy. My experience finds that serious discussion of new energy is still politically incorrect in mainstream circles, which is appalling. Delays in implementing life-saving innovation will be at our collective risk and peril. The urgency for action in these times is unprecedented in human history. Quantum leaps in energy innovation, which some of us in the scientific community are aware of, can provide the needed solution, hopefully in time to avert global disaster.

British Columbia Aligns With California to Create a Green Bloc Along Pacific

The premier of British Columbia wanted to bring coal-burning plants and offshore oil rigs to this lush province, so environmental groups were ready for a fight as he prepared his government's annual policy speech last month.

They were stunned when Premier Gordon Campbell delivered a list of green promises that surpassed their most ambitious dreams.

Houston's role in energy may not end — just evolve

Halliburton's plan to move its top office to Dubai has touched a nerve in Houston.

True, just one chief executive is leaving the oil-field services firm's hometown. But it raises an unsettling question: Can Houston remain a global energy hub if much of the industry's growth is taking place on the other side of the world?

Oil Boom Runs Out of Gas

Energy prices appear to have leveled off. They're likely to stay flat for a time. At least that's the prediction of Charles Ober, the prescient manager of T. Rowe Price New Era.

Troops search for kidnappers in Nigeria

Nigerian troops raided several villages on the outskirts of the country's main oil center of Port Harcourt Saturday in search of gunmen suspected in a spate of kidnappings targeting foreign oil workers, a military spokesman said.

Mitsubishi Heavy to borrow money using CO2 credits

Mitsubishi Heavy Industries Ltd. plans to finance a Bulgarian wind farm by using the resulting greenhouse gas emission rights as collateral, the first such financing plan in the world, a report said Saturday.

Can farmers farm the sun?

...Photosynthesis crops used to convert solar energy into biomass is very inefficient: only a tiny fraction of the sunlight is converted to biomass. Even less can later be converted into ethanol.

If farmers really want to harness sunlight for energy, the best process is not ethanol but solar electricity. Farmers should cover their fields with solar-electric panels which directly covert sunlight into electricity. In effect, farmers will farm the sun.

Thailand: Importing palm oil for bio-diesel production under consideration

The government may allow imports of palm oil to produce bio-diesel due to a shortage of palm oil in Thailand, said Energy Minister Piyasvasti Amranand.

Urenco profits soar as uranium goes nuclear

Urenco, the nuclear fuel company, is set to reveal record profits this week on the back of soaring uranium prices. The company, which enriches uranium for power stations, is expected to confirm a burgeoning order book when it announces its annual results on Tuesday.

Diet for a smaller planet - review of Bill McKibben's Deep Economy: The Wealth of Communities and the Durable Future

He begins with a short chapter reviewing the last few centuries of economic strategies that have operated under the assumption the human condition will improve by growing the pie. McKibben reminds us of growth's darker side, diminishing our well-being as economies consume unsustainable quantities of fossil fuels, minerals, water and other resources, pollute the air and transform the atmosphere to one untenable for human survival, and create more inequality than prosperity.

Six protesters die in Indian land clashes

India's attempt to imitate the Chinese economic boom by handing farmland to big business turned violent yesterday as police and villagers fought pitched battles in the paddy fields of West Bengal, leaving at least six dead and dozens injured.

...The state's Communist government has ordered some 22,000 acres (9,000 hectares) to be turned over to a special economic zone for an Indonesian-owned petrochemical complex.

Lester Brown: The Coming Decline of Oil

Oil has shaped our twenty-first century civilization, affecting every facet of the economy from the mechanization of agriculture to jet air travel. When production turns downward, it will be a seismic economic event, creating a world unlike any we have known during our lifetimes. Indeed, when historians write about this period in history, they may well distinguish between before peak oil (BPO) and after peak oil (APO).

India: Forest land diverted for wind energy projects

Adivasis in Dhule district, Maharashtra, are protesting the diversion of forest land for wind power projects. About 340 hectares of forest land has been diverted for wind energy projects in Sakri taluka of Dhule district, promoted by Suzlon Energy Limited.

A Realistic Path to Hydrogen and Fuel Cells

The auto industry is coming to the view that the motor vehicle, as currently configured, has a limited upside. Hiroyuki Watanabe, senior managing director of Toyota Motor Corp., has said his company hopes there will be 3.4 billion vehicles on the roads by 2050, a four- or five-fold increase, though the human population is expected to grow only by 50 percent. Restraining this market growth are smog, global warming, and fuel supply concerns. Toyota’s analysis is that hybrids and improved conventional engines will buy time, but only fuel cells will power the low-impact products that enable this market expansion.

ChevronTexaco - Hydrogen: Where Do We Go from Here?

Substantial hurdles remain before hydrogen can become a widely accepted fuel. Among the items on the industry’s to-do list: lower costs system-wide; develop rigorous codes and standards; solve storage and distribution issues; and educate consumers about the benefits and safe use of this potentially new fuel. Over the next five years, we are planning to lead a team in a U.S. Department of Energy program to gather data, demonstrate applications in real-world settings, and determine the most viable route to a hydrogen future. In this pre-commercial stage of development, public-private collaborations are key to advancing hydrogen technology.

Solar suspense

"(The world's) peak oil production is five to eight years away," Borrello said. "Everything after that, we will produce less oil, so we've got to seriously find some alternative energy."

Some scientists estimate the world's oil supply could peter out in 80 to 100 years, Borrello said, and rising gasoline prices could force consumers to revert to different energy resources even sooner than that.

Texas plant powers state's electric grid using only biodiesel

Chicken fat and a $3.5 million investment are behind a breakthrough in the way Texans heat, cool and light their homes and offices.

Edison develops wind power plan

Southern California Edison will upgrade and expand transmission lines throughout the San Gabriel Valley and Inland Empire as part of a $1.7 billion project to deliver wind power from Tehachapi, company officials said.

Sioux Falls man hoping duplex sets an example

Jon Hart says they called his plans "ridiculous" and "overkill."

But there it stands anyway, his new duplex in southeast Sioux Falls. It's being built with the most energy-efficient features he could find despite discouraging words from a few contractors.

Hart - who writes poetry as well as supervises construction of his home - has an ideal in mind for his new home: "heat with a candle, cool with an ice cube, irrigate with spit, mow with scissors."

..."I think all houses that aren't built this way will be obsolete in five years," he said. "It's well worth it if they just do the math."

Oil Profiteers Will Earn Our Outrage

From that link:

You raise an important issue: Why aren't the politicians jumping up and down over gas prices?

There is no shortage of fuel. Even OPEC couldn't cause a shortage by reducing production levels.

No, there's really an excess - an excess of speculators' money in the energy market. And they make money by jacking up the price of fuel without regard for what it does to the overall economy.

So many people just don't get it. There is no shortage? Even OPEC couldn't cause a shortage? The next thing he will be telling me is about the car that runs off water that the oil companies are keeping off the market.

Yes, there is speculation. Yes, it increases volatility. But there is also a very tight supply/demand balance, especially with the OPEC cuts. In fact, if you look at inventories, the market has been undersupplied for months. That can't go on too much longer without causing some havoc.

The irony, of course, is that it's the rightwing Post. Even if it were "speculators" driving up the price...so what? Isn't that how the free market is supposed to work?

I know this may be an unpopular thought, even around here, but how can we be sure that speculators are not driving down prices instead of pushing them up?

While I am not as sophisticated as the poster SAG, the recent trends in the futures market favor selling short contracts later in the year about $7 higher than current prices. This may cause speculators to sell oil they don't own, hoping that the price of oil does not go past $65 later in the year.

Even by the optimistic standards of the EIA, and contrary to the article above stating the supply will exceed demand through 2007 and 2008, all indications are that demand is about 2 million bpd over last year and supply gains are a fraction of that. Therefore it doesn't make sense that oil prices have fallen over the last few months.

Therefore it doesn't make sense that oil prices have fallen over the last few months.

I've begun to wonder about this a little bit myself.

However, we do need to keep recent oil prices in perspective--they are close to two-thirds higher since 5/05 than in the 20 months prior to 5/05 (Brent spot price of $62 on average after 5/05 versus $38 before). I suspect that this price spike was enough to kill off a lot of demand (and some people) in poorer countries, but it was obviously not enough to kill off any meaningful demand in rapidly developing and richer countries.

But we effectively have a supply/demand imbalance in OECD countries, where demand is being met by drawing down inventories. This can't continue indefinitely.

As I have suggested several times, the next round of bidding for declining petroleum exports will be much, much tougher than the last round of bidding.

BTW, the "Export Land" model rolls on. The NYT today, in an article on Venezuela, noted that Venezuelan car sales up up about 50% year over year. In many of the exporting countries like Venezuela we are seeing a lethal (lethal for export capacity) combination of strong cash flow and subsidized petroleum prices.

Well WT... maybe the uber-rich folks who've been speculating on oil futures are the same folks who hold scads of repackaged mortgage securities.

Maybe they've figured out that candle burns poorly from both ends .

perhaps a better analogy is that a candle can't support any weight if a blowtorch is applied to the middle :)

The bank of international settlements, (BIS) shows a $5.8 trillion derivative position in oil contracts held by central banks on its books. Since they would not be necessarily trading for a profit motive, you have to allow for this in trying to understand the market movements.

It is likely in my opinion that they are shorting the market at the moment, and that they can use the SPR and other worldwide storage as collateral in case they get called to deliver. There are also hints that the Iraqi oil production has been sold forward even though it is still in the ground with uncertain prospects of coming out in volume.


The above are some good explanations of what may be happening. I'd just like to point out that if the price of oil was being intentionally held below its market clearing value, demand will not only exceed supply but malinvestment in the energy and transportation industry will occur as businesses and individuals make incorrect decisions based on the current price.

In addition, inventories would be run down. I don't think the use of the SPR would be a viable alternative in the long run to stop the inventory decline (within the US) because the oil could not be efficiently distributed through the country in a major emergency.

Less problematic is that if speculators alone were keeping prices down, then eventually market forces over time would cause their trading positions to reverse – and the market would go back near equilibrium.

i have always assumed that "speculation" can drive the price down as well. the msm all seem to agree oil will stay in the $ 60 range and gas below $ 3 for the coming year(all the new projects coming onstream). once a story gets repeated a few times it becomes fact, not to be questioned. welcome to the world of the gannet rag.

Aren't oil companies themself saying peak oil is many decades away, and that alternatives are plentiful. Why is it so surprising many come to the conclusion there is a conspiracy to keep prices high.

Not surprising since if they started telling the truth about how much oil is out there, investors might start questioning why exactly oil executives should recieve such lavish bonuses. BP' John Browne had his cut in half over some minor issues such as oil spills and safety lapses.
If they came clean about the supply situation I imagine there would be a public demand many of them go to jail.

In fact, if you look at inventories, the market has been undersupplied for months. That can't go on too much longer without causing some havoc.

You would have thought that someone would have looked the mathematical models and the probability of vastly increased consumption in the exporting countries and then tried to warn us of a rapidly developing oil export crisis.

You would have thought that someone would have looked the mathematical models and the probability of vastly increased consumption in the exporting countries and then tried to warn us of a rapidly developing oil export crisis.

Well, if one of those mathematical models had been shown to work with some sort of precision, then people would have probably listened. But when you say "Saudi is peaking because the HL is where Texas was when it peaked", and then I show that this was not in fact the case, you followed up with "Regardless, Saudi is still peaking." Then you start looking for data points to try and salvage your prediction, instead of letting the model provide the prediction. You have your modeling exactly backwards in this case.

Let's review here. What about the HL suggests that Saudi has peaked? And do you believe that the HL has the ability to call a peak with less than a 5-year error range? If so, please justify that answer.

Robert most of the bottom up analysis give basically the same result. The most important number from HL is a good estimate of depletion rates I think it gives the best answer for this question. Next it gives good enough of a URR estimate to handle obvious fraud like we have in the ME.

Other information bottom up analysis current events etc can be and should be used to bracket the date of peak down to a single year. As of now I have more faith in the depletion rates from HL than any other method. Look at the slope of your lines not the URR intercept. Picking the right URR needs additional data either via carrying HL out post peak or external information. We must use all the information we have and HL provides critical pieces what I consider the best estimate for depletion rates and a choice of URR's that can be easily limited with other information.

For some reason you have decided to put on blinders.
My god the experts are claiming decades of oil is left even off by 5% its enough to show that the experts are wrong and enough to start a mitigation policy.

Finally again the depletion rate in my opinion is the hardest piece of information to figure out the fact HL provides it is very important. And I've said repeatedly that the peak year prediction is not done with HL alone WT was implicitly using external data if you read his posts I was doing the same I just did not think about it until you wrote your article. I know for a fact I was I suspect anyone that has used HL does.

HL is not sufficient for predicting the year of peak no reason to belabor the point. I'm not sure WT ever made that assertion if so then I think its obvious its wrong.

Robert most of the bottom up analysis give basically the same result.

When you write “basically the same result”, what do you mean? Peak within 10 years? Yes, I would agree with that. But we are being told, again and again, that Saudi peaked in 2005 “as predicted by the HL.” My point is that the HL can’t predict any such thing. It would have predicted a Texas peak in 1956, and you couldn’t have confidently concluded that Texas peaked until 1982 or so. A Saudi peak in 2002 would have been consistent, and a Saudi peak in 2012 would be consistent. This is important. The precision of the method has been vastly oversold.

The most important number from HL is a good estimate of depletion rates I think it gives the best answer for this question.

How so? Tell me mathematically how you pull the depletion rates out of the HL. Recognize that the slope points down even if production is constant. Complicated by that is the fact that URR is moving. So, it is not simply a matter of looking at the slope. It can be done, but I don’t think it is as straightforward as you seem to believe.

Next it gives good enough of a URR estimate to handle obvious fraud like we have in the ME.

The Texas URR has increased by 50%. In my next essay, my hypothesis is that the HL will show that Saudi’s URR is growing, and has grown at a fairly brisk pace in recent years.

For some reason you have decided to put on blinders.

I don’t believe I have any blinders on at all. I am just waiting for someone to define the parameters that are required to predict peak. The parameters at the moment are incredibly broad. So, I look to other factors. I don’t think the HL gives me any useful information at all in the case of Saudi.

HL is not sufficient for predicting the year of peak no reason to belabor the point. I'm not sure WT ever made that assertion if so then I think its obvious its wrong.

Well, I think you might be surprised about that. Even when he appeared on TV to debate the issue, he built his case around the HL. He kept saying that Saudi is right where Texas was when it peaked. So the core of his position is that the HL is the key to determining a Saudi peak. Look back at the essays he has written on it and tell me I am wrong. Show me where he is relying heavily on above-ground factors. Look at the number of times “as predicted by the HL” appears in his arguments. Then you may have a better handle on where I am coming from.

I just had an "aha" moment. I just tested a hypothesis of mine, and think you will be quite surprised at what I just uncovered. It is directly related to something I wrote in the response above, but no hints yet. I want this one to be a surprise. I will try to write this up some time this week.

Next look at Russia right now HL is off by up to 4 years on the date of peak in my opinion and its a tough problem. I think we might be able to tighten it up to the year. If not we have to wait. Right not all I want to know is if no plateau makes sense. Can we maybe maybe not. But no one else is even claiming Russia will peak in the next 4 years. If they even manage to hold production steady for 3 years that makes a big difference IMHO maybe enough to keep our undulating plateau going for a while.

Leanan...once again...great collection of articles.

Continuing a little bit from yesterday's discussion...for those looking for places to hold up PP (post peak) and have the bucks to do it, check out these prime properties:

Abandoned missile silos become safe homes

20th Century Castles - Unique Underground Properties

You know...ruminating on this even more...abandoned missle silos would also be much more efficient heating and cooling due to constant underground temps. Heck...throw a few large solar panels and wind generators up topside and you could be secure and grid-free.

This is sounding better all the time.

Reminds me of that "Raptorman" site. He wrote a blog about the U.S. being overrun by zombies - day by day, as if it were happening in real time. At one point, he and a few others not yet infected holed up in a missile silo.

My only problem with an old silo for a home - What if the "other guys" don't know it has been decommissioned, and still have it targetted.

A direct hit from a 1MT nuke, will not make a nice afternoon in country.

It's all about population!

I had another thought...

Without fossil fuel support or an extremely vulnerable and expensive solar/wind system, you cannot power such a beast.

The air movement/filtration system alone must require some signifcant juice. Then you must have lights, and without an air movement system candles or lamps would be lethal.

Heating would be a real trick too. Putting in a wood stove 100m below the ground sounds interesting, and electric or FF heating would be unrealistic as well.

It's all about population!

Folks with the creativity & foresight to live in a missile silo probably don't consider being a ground-zero target a disadvantage. Au Contraire... Slowly dying of thirst, exposure & radiation poisoning over a week or 2 sounds like something to be avoided in the event of an attack on silo targets, which would not be a small exchange.

Americans (US citizens) carry their history; they seem to imbued with a sprit of independence, a possibility of going it alone, and killing aggressors to defend their homestead (Wild West and Indians...); planning and tech superiority and glorious isolation, will see them thru. The new pioneers, with solar panels, and a stock of axes! Their own wells! Generators! A friend who is a doctor... There is truth to it, in the sense that the US still has land, unoccupied places.

However these 18th cent visions are outdated, for most of the world. Neither Belgium or Bangladesh, or Denmark or Algeria (miserable as it is today), or Americans in Iraq, can contemplate that kind of individualist hubris. It is either, build or maintain a viable community, share, organise, give and help, trade reasonably, and stop war. Not through defense or killing but through compromise and negotiation.

You refer to American exceptionalism. It's outdated everywhere except in (US) America where the myth lies on.

cfm in Gray, ME

The Desmoines Register is running a series of articles on cellulose ethanol. Since a cellulose plant is being built in Iowa, the articles include a lot of real-world information about what it takes to make this work.

Message from the editor: Iowa has chance to be energy leader

From the sidebar on that article, three graphics:

* Why stover is vital for Iowa's soil

* How biodiesel is made

* How stover becomes ethanol

FWIW, Maine wants to be a world-class leader in ethanol production too. The growth-uber-alles Governor and Legislature want to chip the forest. They ignore a couple of things: 1) that the forests are owned by corporations from away and 2) they are already largely chipped for other purposes. But it sounds good and shows they know what they are talking about with respect to our energy addiction. Oh, and that's supposed to be a stepping stone to the "hydrogen economy".

cfm in Gray, ME

From the column over to the left of the article:

But a new form of the fuel that uses the leftovers in a cornfield might keep Iowa as the nation's top ethanol maker.

That is probably one of the biggest misconceptions about cellulosic ethanol - that it is new. People have been working on the problem for decades. That's why I caution people on their exuberant optimism. Some of these problems are tough nuts to crack, or they would have been cracked long ago.

As I said to a writer last week, "Think affordable manned mission to Mars, and now you start to get an idea of the challenges." This isn't like doubling the clock speed on your computer processor; just give it a couple more years and problem solved.

So noting that the Army is planning to go oil-free by 2050 and the Army fears that natural gas may cease to be viable is good news to me. That implies that alternatives will be or have been found. And if they are planning to do without oil and natural gas then we wont need to be bogged down in wars trying to get oil and natural gas. Then we can have the army re-tasked to address things like floods, hurricanes, droughts, and so on.
Great news!

I noticed that the article about the Army and the oil and natural gas links to this document. It is called Scope of Work (SPW) Performance Work Statement (PWS) The Impact on the Army from the Changes in the World Supply and Demand Situation for Natural Gas over the Next 25 Years.

It looks like an RFP (or a predecessor document to an RFP) for a study to be done on the topic listed by September 30, 2007. Does anyone know anything further about this? Was a contract signed for this study?

Whoever it was that recommended Neal Stephenson's Cryptonomicon, I want to thank you. While it has taken me longer to read that book than any other book I have ever read, I finally finished it today and it was well worth the time. It kept me company during some of those cold and rainy periods in Aberdeen.

I brought a handful of books to Scotland with me, and I am trying to decide whether to read A Beautiful Mind or Spin next. Anyone read either one of them? I also have More Than Human, To Say Nothing of the Dog, and The Viking, and then I am going to have to figure out the library system here.

Any recommendation from anyone who has read these is appreciated. I will probably get started on one of them in just a bit.

To Say Nothing of the Dog--it will keep you laughing.

'Fraid I'm not familiar with any of these books, however as a compliment to the recent mood here on Drumbeat I would like to bring to the attention of those not already aware of it, a rather interesting TV series that was aired here in the UK in the 1970's called "Survivors" which is shortly to be available in it's entirety on DVD. It was available before as separate series (there are 3 series) at a higher price. Here is a flavour of it taken from a review in DVD Times:

"The opening sequence is a carefully scripted mime - a play without words, showing a scientist's spherical flask accidentally dropped and a kind of flu-like disease carried by businessmen to the airports of the world. In a first episode which begins lightly enough, the plague gradually overwhelms the whole structure of life: schools close, hospitals are swamped, the electricity fails, the rural railway station is mournfully deserted. The last train from London has been cancelled. There is never going to be another."


Another link:


Link from Amazon.co.uk:


I found the series a riveting portrayal of a post-cataclysmic collapse, and the day-to-day struggles of those remaining to survive. It has achieved something of a cult status in the UK.

"To Say Nothing of the Dog" is very funny.

"Whoever it was that recommended Neal Stephenson's Cryptonomicon, I want to thank you."

My very most favorite book!

A humorous aside for Sunday…

British Prime Minister Tony Blair… took part in a comedy sketch from his Downing St office for the Comic Relief charity this week.


The linguistic nuances will mostly be lost on our American TODers… but “I’m not bothered/Am I bovvered” is a comedic “in-phrase” in UK at the moment…

It’s also a great commentary on the language and mannerisms of under-educated British youth…

You have to admire his guts… but then he did also play guitar in a rock band once upon a time…

(I try in vain to imagine GWB trying to do something similar… )

The ultimate false peak?

I got up late this morning and tried to catch up on a few posts I missed last night. Caught this on the Matt Simmons thread from late last night by Roger Conner Jr.:

As my first reference, I will give the definitive one: History. I personally would not dream of accepting a global peak until we have AT LEAST matched the 1978 to 1982 period of roughly 5 years straight down at a full fifth of production down. That's what happened then, and it was the ultimate "false peak", as oil production rebounded at a speed and to a level that had been thought until then completely impossible. The so called "Plateau" we are seeing now borders on nothing more than measurement error compared to the massive and long decline of the 1970's.

For starters Roger has his dates all wrong. It was actually 1980 when world oil production turned down for the second time. There was a one year drop in 1975 due to the Arab oil embargo. Then it was up for four straight years before it moved down for five straight years and it turned positive again in 1986. It was 1988 before the world produced more oil than it did in 1979.

So correcting Roger, his “definitive” peak was a bit later than he speculated. However I very well remember that oil crisis, and let me correct Roger, and everyone else who believes that anyone who lived through that crisis could have mistaken it for a true peak in world oil production. That is, was that period, 1980 thru 1985 a true false peak?

No, emphatically NO! The term “Peak Oil” was never heard in those days, except from one person* of whom I will speak below. So why did no one think this was the peak in world oil production. Because we all knew why world oil production was dropping. There was a blood war in the Middle East! Iran and Iraq went to war in 1979 and their oil production dropped like a rock. In 1980 the conflict was affecting production along the Kuwait-Iraqi border and their production started to drop.

Then Iran threatened to sink tankers in the Straights of Hormuz and in late 1981 production started to drop in Saudi Arabia and the UAE. Saudi production dropped from an all time high of 9.9 mb/d in 1980 to 3.388 mb/d in 1985, a drop of over six and one half million barrels per day. No one but no one thought this might have been the peak in world oil production because we all knew the reason for the decline.

And Roger, if we ever see such a conflict again a conflict such as we saw in the Middle East in those days, a conflict dropping 9.4 mb/d off the world’s oil supply as that conflict did, then I promise you, we will not mistake that for a natural decline in world supplies. And any discussion of peak oil must take that conflict into consideration.

As I stated above one person did talk about peak oil even before world oil production turned down for five straight years in 1980. That person was M. King Hubbard. A few days ago there was a video on the oil drum with Hubbard talking about the world peak. (For some reason I cannot locate it right now.) But Hubbard speaks of such an event as we saw in the Middle East in the early 80s. He predicted the peak would be around 1995 unless we had a conflict that cut world oil production dramatically for a few years. He said, if my memory is correct, that the peak could be pushed out by as much as ten years if such an event happened.

In conclusion, the plateau we are seeing right now, the plateau which Roger to compare with the massive war decline in the 80s, happened when everyone except possibly Iraq and Nigeria was producing flat out. And everyone continued to produce flat out until November of 2006 when OPEC quotas started to affect world production.

No doubt the conflicts in Iraq and Nigeria affect production somewhat. But their effect is nothing compared to the Iran-Iraqi war and the ensuing “Tanker Wars” that cut production in the rest of the Middle East. And I must add such conflicts as we are having right now, especially in Nigeria, are probably mild when compared to conflicts in the next couple of decades.

It is for this reason that I think the plateau that we are on right now is the peak in world oil production. And dragging in the 1980s Middle East conflict and the disruption in world oil production that conflict caused and pointing to that as a possible “False Peak” is disingenuous at best.

Ron Patterson

Didn't the large production declines come at a time of rapidly falling prices ('81-'85), caused by a horrible recession? It seems that the oil producers also had logical reasons for cutting off some supply, after seeing the price start to fall. IMO production declines must be taken within the context which they occur. If production decreases for the next four years amid soaring prices there will be no question about what's happening.

Didn't the large production declines come at a time of rapidly falling prices ('81-'85), caused by a horrible recession?

Good Lord Cheapseats, how could you possibly get it so wrong. Historical oil prices are found in dozens of places on the internet, all you had to do was google: "Historical Oil Prices". One of the many pages brought up would be this one:

The first column is actual price and the second column is adjusted for inflation in 2006 dollars. Notice prices peaked in 1981. Saudi production that year was 9.815 mb/d, down only slightly from their peak of 9.9 mb/d the year before. They have never since produced more than they produced in 1981, the year prices peaked.

1978 9.00 26.14
1979 12.64 32.98
1980 21.59 49.63
1981 31.77 66.20
1982 28.52 55.98
1983 26.19 49.80
1984 25.88 47.18
1985 24.09 42.40
1986 12.51 21.62
1987 15.40 25.68
1988 12.58 20.14
1989 15.86 24.22

As you can see, during the Iran-Iraqi war and the "Tanker Wars" oil prices shot up and did not come down until oil production rebounded after the war.

And by the way, the "horrible recession" as you put it was caused by those horrible oil prices.

Ron Patterson

Ron, thanks for your reply, the data is most helpful. So, we agree that the price of oil hit a relative peak in 1981, and then spent the rest of the eighties falling. I do share your concerns about inflation generally, but I doubt that the Saudis were calculating their oil prices in 2006 Dollars.

By the way, the crushing monetary policy from the early Volker years may have had something to do with that recession as well.


Cheapseats, you misunderstood my post. All three columns were just copied and pasted from the site. I meant to imply nothing about inflation. The 2006 dollars column was just to show what the true prices were. Oil prices during the early 80s were the highest in history until now. That was the point. One can only get true prices when gauged in constant dollars. That is when they are adjusted for inflation.

Oil prices in 1985 were still higher than any time in history before 1980. And they were higher in 1985 than any time after that year until 2004. Measured in constant dollars of course. In other words, from 1980 thru 1985 world prices were the highest in history until the recent run up in prices that started in 2004.

Ron Patterson

This chart here gives you a far better picture of what oil prices were doing in the early eighties, and why. Of the three highest spikes, the first spike is the Arab oil embargo, the second spike it the Iranian revolution and the Iran-Iraqi war and the third spike is.....guess what....Peak oil!


Ron Patterson

Ron, according to your inflation adjusted data, the oil price started declining after its 1981 relative high. It went down almost every year of that decade. If the Saudis saw a price decline coming it makes sense for them to reduce their output. That's all that I'm saying... Not trying to be nit-picky.

Cheapseats, Saudi production peaked in 1980 and went down slightly in 1981. But prices did not peak until 1981. Prices were going up while producion was going down. Then in 1982 prices were still higher than they were in 1980 yet Saudi production was still dropping.

But the thing you don't seem to realize is that you are putting the cart before the horse. It was very low oil production that caused oil prices to rise. And regardless of the fact that prices were slightly lower in 83, 84 and 85, except for the previous three years, they were still at all time record highs.

And more importantly, prices did not return to normal until Saudi started increasing production. In other words, production was dropping during the early 80s right when oil prices were higher than any time in history! It just makes no sense whatsoever that Saudi would cut production while prices were at world record highs.

And then in the 90s they produced flat out right when oil prices were at near record lows.

To the Saudis credit, they knew that oil prices were causing a world recession and did everything in their power to increase producion in the late 80s and drive prices back down.

And one more point. It is just so well documented exactly why Middle East production was so low during the early 80s. There was a war! And the Saudis would never cut production when oil prices were at near record highs, as they still were in 1985, because of low prices. That is an oxymoron. And then why would they ramp up production in the late 80s when the bottom was dropping out of oil prices?

Ron Patterson

"the Saudis would never cut production when oil prices were at near record highs"

Saudi Production:
1981 9,815
1982 6,483
1983 5,086
1984 4,663
1985 3,388

Oil prices may have been high, as they are now, but they were moving lower, steadily over a period of four years by about 10% per year. Why is it so hard to beleive, given that they don't like price declines, that they could hold back some of their production. There was a war, but their exports didn't cease, they just slowed. Maybe they respond to falling prices (even ones that are historically high) by holding back some oil in the hopes of keeping the price declines from going to far.

Sound familiar? Its happening right now. Prices were in or above the 60s for about a year(summer '06), and OPEC was already used to their new price range. OECD stocks became abnormally high(as evidenced in the EIA chart that we've all seen), they knew what was coming and they started cutting production.

It seems they have a long history of cutting production while prices are moving lower.

hi cheapseats

i think you were trying to find about ASPO in Melbourne on another Drumbeat. Best to contact me via:



Updated Peak Plateau Charts

Total liquids production peaks in mid 2009 on a slowly changing plateau. NGLs and biofuels are offsetting the C&C decline.(assumes that Saudi Arabia does not have surplus production capacity)

C&C production is forecast to decline.

It would seem like energy available in BTUs would be dropping, or at least be flat, wouldn't it?

Net energy, taking out the double counting for biofuels and the declining EROEI would likely be decreasing more.

I'd agree. Ethanol and NGLs have a lower energy density than crude oil so the energy content of total liquids production is probably flat now.

Skylar made some interesting comments about EROEI and peak oil on this story

Skylar said

"Peak Oil is often discussed as a volumetric quantity.

Maybe we should be more focused on "Peak EROEI" for that determines the net work we can do.

If your presumptions above are true, we must reach "Peak EROEI" before we reach Peak Oil.

It would be interesting to calculate EROEI at Peak Oil and then project at what point along the downslope tail that EROEI becomes one.

Perhaps we won't get a Gaussian curve afterall.

Perhaps the tail will abruptly stop at some date: ER = EI."

Considering the nature of this vs HL I'd say that they are saying basically the same thing. Has Chris Skrebowski pulled the peak in ? I remember his earlier predictions where around 2010-2011 don't remember if it was all liquids or just C+C.
In any case if he is pulling in then the HL method and the bottom up method seem to be converging on 2008-2009 with peak C+C already in the past.

I don't think the decline rate is right 0.5% world wide his method seems to persistently underestimate decline.
And I've not seen it back casted to see how it preforms in the past. I would say the method in complementary to HL IMHO.

Hi Memmel,

From Chris Skrebowski’s latest megaproject database update in Feb 2007 Petroleum Review,
he says in the last paragraph:
”It is only possible to draw two conclusions from this latest megaprojects analysis. First, data on production, project performance and depletion rates is wholly unsatisfactory, particularly for the Opec producers. Second, the large volumes of new capacity being added between 2007 and 2012 may not translate into the sort of increased production flows the world economy needs to underpin economic growth.”

He doesn’t refer to a world peak oil date, but based on his statement above, he might be implying that peak oil will occur in the middle of the 2007 to 2012 period, say about 2010. I also think that he means peak total liquids as his database includes many NGL projects: Saudi Arabia - Hawiyah, Khursaniyah; Iran - South Pars 9 phases; Qatar Ras Gas trains 5,6,7 and Qatargas trains 4, 5, 6, 7. He also includes a few GTL projects. He doesn't include biofuels.

The world C&C decline rate of -0.5%/yr is not based on Chris Skrebowski’s methodology. I use only the project information from his database plus project information from other sources.

The -0.5%/yr is an output of my forecasting model based on the assumptions below.

Assumptions for C&C production chart

142 existing projects/fields in production

Decline rates are assumed to be 6% for these fields except when field specific decline/increase rates are known, for example:

Canada (tar) 14%/yr increase
Kuwait Greater Burgan 14%/yr decline
Saudi Ghawar 8%/yr decline
North Sea existing 10%/yr decline
Mexico Cantarell 14%/yr decline

119 forecast projects/fields in production

If the project is for a genuine new field eg deepwater Angola, Gulf of Mexico then decline rate is 4%/yr.

If the new project is really a workover of an old field, eg Shaybah expansion, Al Shaheen expansion then a decline rate of 6%/yr is assumed.

Other assumptions

Production from existing and new fields/projects are subtotalled into 35 countries/regions in the world. The sum of production rates from the fields/projects do not exactly add up to the EIA actual data supplied for that country. This requires the use of "Other" category representing smaller/unknown fields.

For example, the EIA actual production for the USA for Nov 2006 is 5.15 million barrels/day. "Other" fields production is forced to be 0.67 million barrels/day because the production from the eight fields/projects falls short of the EIA number. The "Other" fields production is assumed to decline at 4%/yr. If this does not occur then the assumptions and production figures may be revised.

Annual decline rates are converted into monthly decline rates.

It is assumed that these projects have a ramp up period to peak production.

Where possible I try to get exact starting months for project production. However when a project is scheduled to produce in a few years, say in 2010, I often assign January as the start month due to considerable uncertainty in start dates.

I have not assumed any standard additional delays in project start dates compared to the start dates given by the operator. In reality, it is becoming common practice for projects being delayed by not just a few months but by years, eg Kashagan.

It is assumed that all projects with peak oil production of over 40,000 barrels/day are included in the model.

It is assumed that Saudi Arabia does not have surplus production capacity.

The database behind the chart is updated for monthly EIA data. It is also continuously updated for project changes -start dates, production volume changes, project cancellations.

Reserve data are not used as inputs in the model. Eg Canadian tar sands represent huge reserves but the increase in production rates is more important.

Continuous Revisions of Assumptions

Every time the database is updated with EIA numbers, it provides an opportunity to compare the forecast for that month with the actuals. This reasons for this variance are a source of additional information on a country's production.

If the variance between actual and forecast is too great then assumptions might be changed.

For example, I don't have much field specific information about Congo (0.24 million barrels/day) and Equatorial Guinea (0.40 million barrels/day). The actuals for the total of "Africa other" were higher than the forecasts so I have made an exception for these two countries and being optimistic have assigned 0% decline rates. The actuals are now tracking the forecast much better.

For China, my forecasts seem just a little low compared to the actuals, which might indicate that the country is trying very hard to squeeze every bit of oil out of the ground using EOR methods.

North Sea production is proceeding as forecast.

Saudi Arabia's production is perhaps under voluntary constraint so matching forecast to actual is invalid.

Actuals for Russia, Iran, Iraq, Kuwait and Mexico are tracking well compared to forecast.

Hmm the only real problem seems to be the decline rate of 0.5% .
Also I'm making the assumption that we will see more project delays etc in the future that only really matters if the decline rate is slightly higher. I've always assumed a worldwide "real" decline rate of 2% this includes WT export land model. And this seems to be a number that comes out of other methods. Even a 1% decline rate over 0.5% makes a big difference in the short term impact of peak oil since we hit the demand/production spread earlier.

I'm not so worried about the production estimates you have to assume they will almost always come lower than anticipated thats fine. Its the difference in decline rates that I find troublesome that not that easy to explain.
Is it simply caused by the fact that in the past more energy was derived from C+C and the all liquids is in a sense covering a higher decline rate in C+C.

If you have the data for C+C split out that might explain the differences. So I'd have to guess even though its not clear from the data that we are seeing a 1% or greater decline rate in C+C that being covered by the growth of other liquids. This makes sense. Is it true ?

It would be nice to understand this better.

I think the low EROI from the new sources may also be a significant factor thats hard to model. I don't think its important in the short term but its going to be in the future as NG declines.

What I think that is important is when the demand is going to significantly exceed supply and how fast the spread grows. Once we ar 4mbpd down in the sense that the spread is that much I'm assuming that the world will move into a post peak mitigation strategy. I feel that if your right we are a lot better off since we will approach this slowly. The biggest technical breakthroughs that could help us post peak would be efficient cheap solar cells and better batteries.
I feel like we are putting a lot of work into these so every year we can get by is actually important. I think that if we had cheap solar cells/batteries and say cellulose ethanol plants in production before peak becomes painful it will make a big difference but we could be ten or more years away from solving these or it could happen next year. Fusion has been just around the corner for years and cheap solar cells/batteries represent just as complex a problem as fusion.

I don't think rolling out cheap solar cells will save the day but it makes a huge difference on the social/political front since it gives us a reason to focus on moving off of oil and dubious oil replacements toward electric and rail.

So I'd really love understand why 0.5% vs other models it in my opinion makes a big difference.

Sorry the decline rate is for C+C says so on the graph :)

My mistake. Read my other thread I'm bothered by the 0.5% world wide decline rate I think its low.

If it is low then we will see a significant spread between demand and production in 2008 earliest late 2007 IMHO.

Thats why I'm predicting a surprising peak in prices in the fall of 2007 as the first symptom we are post peak.

"cheap solar cells/batteries represent just as complex a problem as fusion.

Not really. Fusion is very difficult, but batteries are now cheap enough that the total lifecyle cost of an electric vehicle would be less than that of an Internal Combustion Engine (ICE) vehicle, with mass production. http://www.epri.com/corporate/discover_epri/news/downloads/EPRI_AdvBatEV...

Even solar PV would be cheap enough, if you had no alternatives. Both work right now, and are coming down in price quite quickly.

Pretty solid reply Ron. Sums it up well. I was scratching my head in parts, so I checked.


Download 4.1c gives world production, 4.1a shows opec declines.


As you know, we have had this little debate before, and at least in my case I agreed to disagree....on the major points:

(a) Dates: I won't argue exact dates, I was roughly going from eyeballing ASPO charts (which always show the peak before the 1980 line) and my memory (I actually was involved in the gasoline business as a retailer at the time) I will yield a bit here and there, I didn't actually look up all production dates as I wasted time doing the last time we had this discussion, simply because I spend too much time on TOD arguing about things that don't matter already.

(b) No one used the term "Peak Oil in the 1970's" Well, sue me. Of course they didn't. They didn't have the media savvy in those days that folks on the web do now. Most of them said (showing thier lack of knowledge in those days) that we were "running out". Alvin Toffler in his great chapter on energy called "The Commanding Heights" in the multi-million selling volume "The Third Wave" said simply that the oil age was over "in a matter of years, not decades." National Geographic had pictures of giant windmills that make the current generation look like a childs spinning toy. In my home state of Kentucky, we spent millions on environmental studies in preperation to build a giant coal to liquid plant on the Ohio River. Beechcraft, the airplane maker spent hundreds of millions developing the Starship, a Burt Rutan rear propeller plane that would get some 30% or 40% better fuel efficiency, while GM displayed the "ElectricVette" a full electric battery Chevette, and Briggs and Stratton built the first hybrid gas electric car with onboard battery storage, and plug hybrid capability. (gee, does all of this sound like 'back to the future' all over again....)

Yet, your assertion is that no one believed the age of oil was indeed coming to a close, because they did not know the magic mantra to cast the spell, the chant of "Peak Oil"? (!!!!)

The rest of your assertions seem to try to explain the difference between then and now being because, to use you bold letter phrase "There was a blood war in the Middle East!"

Gee, aren't we glad there isn't one now....of course, locking out one of the biggest producers in the world due to full land invasion, war and a bloody insurgency, holding the other at bare survival level with sanctions while we hash out nuclear policy, and seeing Saudi Arabians commit the largest act of mass murder of Americans on our own soil by terrorism in history, an act of war that Mao, Stalin, Hitler or Yamamoto couldn't pull off.....geee, peace is a wonderful thing isn't it?

"The tanker war". Of all the excuses for the 1980's problems involving oil, I have always found this one the absolutely most easy to dismiss and actually redicule if I were that type of person. I'm not, but I beg in this case that you look at the charts of world oil production in that period and since, and the declines in production around the world, and try to actually attribute a world decline in production in the '80's or at any other time to the tanker wars. But of course, I said that the last time we discussed this.

Then you go on Ron to make this assertion:
"And everyone continued to produce flat out until November of 2006 when OPEC quotas started to affect world production."

First, I do not believe that for so much as a second, and if your annoyed at me for believing that Saudi Arabia has often throttled back production for price and political reasons, you will be really annoyed at the article by
Euan Mearns, over on TOD Europe right now, called "Saudi production laid bare", and doubly annoyed at my reply to it, in which I assert again and often that Saudi Arabia has often moved production around, only they can know how much oil they have, and "peak" may or not be the reason that oil prices have spiked and production has declined....there is simply no way to know whether peak oil Saudi or peak oil the world happened yesterday, or will happen tomorrrow, or perhaps 30 years from now. Declining production proved NOTHING in the 1970,s, nothing in the late '70's or early '80's, and will prove NOTHING now, at least not for a half decade or more....in other words, we KNOW exactly as much now as we did in the 1980's.

What is important about that is that there were many people who went into the alternative energy business, or did not invest in the investments they could have because "the crash was coming". These people believed, whether they knew your magic chant "peak oil" or not, that the oil age and the American age of expansion and prosperity were OVER. They invested that way. The young technicians and risk takers gave their careers to answering Jimmy Carters call to patriotism to find a way to get away from fossil fuel consumption. And they LOST EVERYTHING, including the most productive work years and the best investment years of their lives. THAT IS WHY IT MATTERS. FOR THEM, IT WAS A FALSE PEAK. THEY BOUGHT IT. THEY LOST.

People are now bing advised to MAKE THE SAME STUPID AZZ MISTAKES AGAIN. On TOD just yesterday, a person was ridiculing the idea of buying stocks and investing in America. There are young people who are beside themselves, distraught that "peak" will destroy their future. They are buying into the most idiotic of scenarios, not investing, not planning for the possibility that peak or a great crash might not actually happen, or may be years away. The type of hysteria mongering we hear based on little or often NO factual evidence is starting to do real damage to peoples lives.

to the young in our audience, I would say,

Thank you.
Roger Conner Jr.
Remember, we are only one cubic mile from freedom

Leanan; Best public information service in blogdom!! Thanks again.

Matt Simmons is on UCTV today, if you can get it. 1 hour Simmons presentation from So Cal. It's on from 3 to 4pm in the Pacicfic time zone.


I just caught the last 20 minuets this morn but it was vintage Matt at full throttle complete with all the charts. He gives the outline for the 'Manhattan Project', addresses trucking in the U.S., local food production, reserves transparency, and globalism.

A good chance to copy of a superb speech to share. It's easier to explain to people why I am a 'Peaknik' if they get the big picture from an expert.

Will it be available online, live and/or archived?

This afternoon is a rebroadcast. On the archive, not yet, but I'll find out and post it. I emailed them just now and will call them tomorrow morn. They have a 'podcast' program.

Yes please let us know if/when it becomes available.

Some of us don't get US TV :-)

:-) Looks like they are going to get it out on Video-on-Demand in about two weeks. We should all be able to watch in the clear. Will let Leanan know when that happens.

Countries oil reserves may cause upheaval

Leanan, thanks a million for posting this link from the Palm Springs Desert Sun.

The word is gradually leaking out, those vast Saudi Reserves are a complete myth. If that word leaks out slowly, then the impact of that knowledge on the financila world may be slightly mitigated. But regardles, it will be a bombshell.

Ron Patterson

Yes, I agree it's good to see this kind of article in a regular newspaper. Is "The Desert Sun" a regular newspaper with large circulation in Palm Springs or something smaller?

I don't know... but you might have thought a real newspaper would be expected to know the difference between "countries" and "country's"


First Saudi Arabia. . . then Russia.

If Russia does start declining this year or next year, I expect to see a decline in net oil exports by the current top 10 exporters of 50% or more within five years.

I'd like to see Russia revisited mainly because all other large oil producing regions have been able to maintain basically a plateau in production around peak. We have not seen that with Russia.

If your right and it has a sharp peak it would I think be caused by the decline in the older fields being great enough to overcome new production coupled with investment problems which are significant in Russia. So it would be interesting to look at Russia on a basin by basin basis this might make their situation clearer. Without a smoking gun I'd have to say we must see at least 1-2 years of flat production before decline in general it should be longer but I think investment problems are going to prevent Russia from pouring the money into the oil fields like we did in the US. But we should still see relatively flat production at the beginning. This has not happened yet. With that said Russia has a fairly significant internal consumption and they could easily be hiding decline issues now by claiming higher internal consumption than is real or better supplied all we know are exports. In some ways they are less opaque than KSA.

Tidbits like this point to the fact that all might not be well inside Russia.


But in general with out a plateau now I'd have to say peak itself was at least 1-2 years off with decline taking 1-2 years to go low enough to be obvious so up to 4 years before Russia is in definite decline. In any case a sharp peak argument needs a lot of support.

For KSA the key reason I believe they are toast now is they drank their own kool-aid and did not ramp up production of the rest of their fields soon enough so they are going to be chasing the back side of the peak down with a much lower production level than they have today before they finally decrease the decline rate same with Mexico.

From the article: Global Oil Glut Hidden by Rig Dearth...

The number of offshore drilling rigs on order at shipyards, a measure of demand, has jumped to 115 from 18 five years ago, according to ODS-Petrodata. With few rigs yet delivered, the number of offshore rigs operating worldwide is little changed in the past five years, at 657.

I am confused. If most remaining oil is offshore and rig count has not increased at all in 2 years, how can the world be experiencing a burst of new drilling.

The rig utilisation has gone to near 100% for offshore, and rig rates have quadrupled due to the oil companies and NOCs bidding against eachother for the last remaining deepwater rigs. They are locking these high rig rates into 2012, and all the new deepwater rigs in the shipyards have contracts on them right now.

The boom is in demand, not so much in actually drilling as it is constrained by supply.

How under utilized could rigs have been. At best the increase is a boomlet.

I would say that generally speaking there has been a four-fold increase in day rates. This speaks volumes for the demand side, however, as you pointed out, the supply of offshore rigs hasn't been changing much as it is subject to the realities of shipyard capacity.

Has anyone done an analysis of the potential impact of telecommuting on oil consumption in the event of near-term supply problems? Has this topic been discussed on TOD before?


Matt Simmons discusses this in all of his presentations.

We're saved!
Nasa find trillions of barrels of hydrocarbons

Cassini Spacecraft Images Seas on Saturn's Moon Titan
March 13, 2007
(Source: NASA/JPL)

Instruments on NASA's Cassini spacecraft have found evidence for seas, likely filled with liquid methane or ethane, in the high northern latitudes of Saturn's moon Titan. One such feature is larger than any of the Great Lakes of North America and is about the same size as several seas on Earth.

Cassini's radar instrument imaged several very dark features near Titan's north pole. Much larger than similar features seen before on Titan, the largest dark feature measures at least 100,000 square kilometers (39,000 square miles). Since the radar has caught only a portion of each of these features, only their minimum size is known.

The imaging cameras, which provide a global view of Titan, have imaged a much larger, irregular dark feature. The northern end of their image corresponds to one of the radar-imaged seas. The dark area stretches for more than 1,000 kilometers (620 miles) in the image, down to 55 degrees north latitude. If the entire dark area is liquid-filled, it would be only slightly smaller than Earth's Caspian Sea.


Now all we need is enough oxygen to burn it with.

Oh, and some way to fetch it back from Titan.

Silly doomer.
Don't you know the market will invent a solution?!?

Why their is water their also you can use nuclear power for electrolysis of water and throw away the waste hydrogen and keep the valuable oxygen to burn hydrocarbons with.

Or do we just do dumb things like this on earth ?

Thank God they can't bring it back here and burn it!

A great new (March 5th, 2007) Simmons slide show can be found at:

A lot of stuff about Saudi Arabia and the rest of the Middle East in the second half of the show.

My apologies if this has been posted before.

Ron Patterson

Re: Can farmers farm the sun?

This article is so stupid I just can not resist commenting on it. The main problem with solar energy is not it's production but its storage. How is the solar energy that is produced by PV panels going to be stored? The author doesn't say. Then he criticizes biomass to ethanol as inefficient after which he states that solar panels may increase efficiency from 6% to 15%. Wow, what efficiency!!
Photosynthesis has evolved over billions of years and is the most efficient (and cheapest) way of capturing and storing solar energy. To even suggest that poor Indian farmers should give up crop production for temporary electricity from PV panels is beyond idiocy and borders on the criminal IMO.

"How is the solar energy that is produced by PV panels going to be stored?"

It doesn't have to be. The nice thing about solar is that we evolved around it, and our consumption matches it's production quite nicely. Until solar is more than, say, very roughly 35% of all kwh's, no storage is needed. Now, you might need to plan for the occasional cloud cover - there are ways to handle that, but that's a long discussion.

"6% to 15%. Wow, what efficiency!!"

He's comparing PV to photsynthesis, which is perhaps 1% efficient, if you're lucky. It may be cheap, but it's not efficient.

Actually, the best system would probably use biomass burned in powerplants as a buffer for variation in wind and solar.

Mexico's Pemex described as being in a 'critical situation':


Declining production, declining reserves.......and confirmation that Cantarell's production declined a staggering 11.9% last year.

Things look exceedingly bad down Mexico way.

Hello Andyh,

Thxs for posting this info. Mexico's water problems are also described as being in a critical situation too:

Mexico is facing serious water problems

As to water supply and treatment, if things do not change the national crises are expected to hit flashpoint within 15 years.

Already, over the past half-century, there has been a 50 percent drop in Mexico’s water supply according to the National Water Commission (Conagua).

Making matters worse, in many areas nationwide with residential service the water is not fit to drink, a problem that is exacerbated by people having to buy expensive bottled water to drink and for cooking (with payment for this water being a socioeconomic reality that people interestingly accept). Some World Water Day speakers further suggested that there is a mushrooming public sector private enterprise collusion problem, this to keep the profitable business of potable water sales and distribution booming.
Mexico is going to have a rough time expanding their potable water supply and sewage treatment loops as income from oil exports plummet and acquifers deplete. I have posted numerous earlier links on seawater intrusion into acquifers along the coastline, and the massive waste by leakage of their decrepit water infrastructure.

Calderon has a very difficult task ahead of him: people will go nuts when they run out of energy and water at the same time. They need countless billions and billions of dollars that they don't have, won't have postPeak. Yikes!

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Hi Bob
Yes the Mexican situation seems to be dire. In a sad sort of way it maybe instructive - Mexico looks to be the first example of a major producer tipping IMO into verifiable decline who's government overwhelmingly depends on oil revenue. Other countries have of course previously gone into decline (US, UK etc etc), but none I think who are as dependent on the income from oil as Mexico. Mexico may well be a bell weather for what happens to single resource dependent economies. And of course what then happens in the ensuing turmoil in Mexico viz a viz their big Northern neighbour is worth an essay in itself.

Unless things drastically change: I think Mexico will be our North American version of Africa's Zimbabwe. I still cannot tell if the NA elites' response will be SuperNafta or a very long Berlin Wall. If the Mexican rich and powerful start leaving and taking their money with them--my guess is for the Border being closed. Carlos Slim Helu' [world's third richest after Gates and Buffet] could probably sink Mexico by himself:


Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

I think you probably will see a initial attempt to close the borders as wealthy Mexicans flee to the US Europe and South America. Immigrants now in the US will try to extract their families expect chaos at the border. Expect Mexican immigrant with money here to have their relatives fly to Canada and enter from the north. I think the US will in a sense look the other way to a good extent welcoming any Mexicans with wealth.
But soon after that they will close the borders I could easily see a combined mainly Mexican force developed to secure strategic eras inside Mexico. I'd have to think Mexico city itself is toast.

After this I think you will see whats left of Mexico join the US under the super Nafta plan but it would be a fractured state not the country of Mexico as we know it.
Basically it will get absorbed and the real "American Border " pushed south and Baja absorbed along with defensible states in southern Mexico. Other parts will be left basically lawless. We will just happen to be able to bring under joint Mexican/American control states rich in natural resources.

With Mexican demand destroyed and a portion of the population granted some sort of American work permit probably not full citizenship Mexican internal consumption will be no more and American oil companies will be free to pump the remaining oil in collusion with the wealthy Mexicans. The Mexicans that made it out will be grateful and won't cause a lot of trouble in the US but will because they only have partial citizen ship work for lower wages with many of the factories in former Mexican land.

Inside the US the large Hispanic population will be played like a fiddle to support the final rape of Mexico as we dress it up as saving Mexico from anarchy.

Later on this large influx of poor Mexicans will probably get drafted into the joint army to fight the oil wars popping up later this century with immigrants from the lawless regions of Mexico supplying a lot of the cannon fodder.

If trouble brews in the US you could have a interesting situation where these battle hardened Mexican forces are used to put down riots in the US in places such as San Antonio.

Also note that this shows the beginning of what I think will be common over the next decades which is the central government will abandon certain regions to anarchy preferring to concentrate on retain control of vital areas.

I think at some point you will get parts of the US falling into anarchy maybe not permanent but for a multi year period. I just can't see the LA region making it forever without massive riots followed by police control followed by simply quarantine the region or basically blockading it for a few years until control is regained. At that point it would become a lightly controlled wasteland with not real government.

In any case over time the regions under the effective control of a central government will be less than the historical borders. And in time the same game will be played out in America to eliminate demand.

I don't see this as being caused by peak oil per-se but by peak EROI as we move to lower EROI sources and become a military state its natural to take positions that are easily supplied and defended.

I don't think that we will see massive problems but LA is almost certain to go down probably trigged by the combination of a influx of refugees from Mexico and a earthquake and the US concentrating on securing Tijuana/San Diego. Phoenix is another potential hot spot simply because it will have similar problem areas. Miami might fail if hit by a major Hurricane.

In general I think the combination of martial law and a quite internal refugee system as people move towards the center of the country or back with family and friends will stay pretty stable. We will have for the first time a significant portion of our population in abject poverty but this will be made up of recent Mexican refugees and displaced Americans and the government and the backlash against the Mexican refugees and riots will be the excuse needed to drop socialist programs for all the poor. Periodic riots and military response will ensure that this underclass becomes a permanent fixture in America. Educated Americans will do well managing the workers from this group as we fall back to a more 18th century style of life with significant class divisions.

Outside of some voluntary dislocations to escape regions that are in turmoil and a slight initial lowering of the standard of living for the educated with the poor Americans falling into the new underclass we won't see much effect here except for this new and obvious underclass which becomes permanent as they lose access to education and social services.
On the demographic front I'd say the expanded America would gain 25 million wealthy educated Mexicans and lose say 50-75 million native Americans to poverty with maybe another 25 million poor Mexicans under its control. The Mexican population is about 100 million so this leaves 50 million Mexicans stranded in the uncontrolled regions. The actual number of poor Mexicans that enter the original US and make up the new lower class here is probably less than 5 million if that the majority will be formerly poor and lower middle class Americans.

On the technical front expect the greatest innovation to be in military hardware followed by renewable and nuclear fission/fusion.

Hello TOders,

I hope everyone is prepared to see food prices start to escalate upward. Please see the two national charts of drought forecasts from Accuweather:


It has been very hot and dry in Az [currently 88F], I have noticed my neighbors running their rooftop combo heatpump & A/C units since the beginning of March. Ditto for car A/C.

If this is a real hot summer for the US: it will be interesting to see if the coal and natgas burn rate prevents the building of sufficient inventory for the winter.

Don't forget to see Leanan's NASA dustbowl target in the Heartland at the bottom of yesterday's Drumbeat.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Hello TODers,

Stabbed as girls chant 'kill him, kill him'
I wonder what the ratio is of violent videogame hours/studying peaceful cooperation and tolerance. I bet these kids have never heard of M.L. King.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

two of the articles:

Global warming is a 'weapon of mass destruction' - Climate experts hit back after being accused of overstating the problem

Sir David King "... it (climate change) posed a greater threat than terrorism."


Arctic could have iceless summers by 2100

Climate models show a complete melting down to open ocean in warmer weather, maybe as early as 2040."

In my opinion the weather changes brought about by such an event would probably cause many times more problems than terrorism - its just a little ironic to see those two linked one after the other. People can't have it both ways as climate change directly effects everyone while terrorism, as deplorable as any individual event is, only directly effects a few people. (the government reactions to such events do have much wider implications, but that is another debate)

Perhaps this could be a good way to get peoples attention to the potential scope of the problem posed by this topic.

/end rambling


I'm not sure calling global warming a 'weapon of mass destruction' is a good idea. After all, everyone knows the WMD did not exist.


By disturbing a massive ocean current, melting Arctic sea ice might trigger colder weather in Europe and North America.

Global warming could plunge North America and Western Europe into a deep freeze, possibly within only a few decades.

That's the paradoxical scenario gaining credibility among many climate scientists. The thawing of sea ice covering the Arctic could disturb or even halt large currents in the Atlantic Ocean. Without the vast heat that these ocean currents deliver--comparable to the power generation of a million nuclear power plants--Europe's average temperature would likely drop 5 to 10°C (9 to 18°F), and parts of eastern North America would be chilled somewhat less. Such a dip in temperature would be similar to global average temperatures toward the end of the last ice age roughly 20,000 years ago.

and lastly:
If the Great Conveyor Belt suddenly stops, the cause might not matter. Europeans will have other things on their minds--like how to grow crops in snow. Now is the time to find out, while it's merely a chilling possibility.

Hello TODers,

My previous posts on the need for 150 million wheelbarrows and bicycles is not too far off the mark:

The biking industry is mired in a slump. The sector happily rode a wave of popularity in the 1980s and '90s when mountain biking and road racing were the rage, but sales in recent years have been flat, said Bryant. Like a lot of companies targeting outdoor sports, Shimano is trying to tap new technologies in an effort to win back the 161 million Americans who haven't ridden a bicycle since they were children.

Asked whether Armstrong, the retired road-racing professional and seven-time Tour de France champion, inspired them to get on a bike, Americans said "no," according to Bryant.

"Bicycling got kind of elitist," Bryant said. "Our surveys showed people didn't necessarily want fitness or competition. They told us they loved riding as kids and would ride as adults if they could do it again in a carefree way."
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

They told us they loved riding as kids and would ride as adults if they could do it again in a carefree way.

They would ride as adults if they didn't have ride on roads with 2 ton SUVs roaring by at 60 mph.

$4 or $5 gas should change that bit. The SUV, the speed, and the interest in non-motorized transportation.

Good time to buy a bike shop.