DrumBeat: March 20, 2007
Posted by Leanan on March 20, 2007 - 8:55am
Bush pitching alternatives to automakers
President Bush will get a chance on Tuesday to smooth over hard feelings that arose last year when he twice postponed meeting with executives of U.S. automakers.In a visit that will carry symbolism for struggling companies that were once a mainstay of the U.S. economy, Bush will tour Ford Motor Co. and General Motors Corp. factories in the Kansas City area to get a glimpse of their latest hybrid cars and pitch his alternative-energy ideas.
The green economy is booming, but you don't have to build a solar power station to get a piece of the action. There's literally a land rush on as renewable-energy companies look to secure locations for wind farms and solar arrays. If you move fast, you may be able to buy and flip the rights to the downtown rooftops and rural ridges that renewable-energy developers regard as prime real estate. There are two plays in this game, wind and solar, and each has its own rules.
Inspired to launch a renewable-energy business, [John] Plaza chose biodiesel, a clean-burning alternative to petroleum diesel that can be made from most types of vegetable oil. He cashed in his 401(k), mortgaged his home and sold his ski boat to buy a 5,000-square-foot warehouse in an industrial section of Seattle.
Beyond Petroleum: UC Berkeley Sells Out to Energy Giant
Could this be a “win-win” agenda for the University, the public, the environment, and industry? Hardly. In addition to overwhelming the University’s research agenda, what scientists behind this blatantly private business venture fail to mention, is that the apparent free lunch of crop-based fuel can’t satisfy our energy appetite, and it will not be free, or environmentally sound.
OPEC "Complacency" To Send Oil Price On Upward Spiral
The decision by the Organization of Petroleum Exporting Countries to maintain its current output policy Thursday could lead to a sharp spike in oil prices, warned the London-based Centre for Global Energy Studies Monday.“OPEC's complacency in Vienna has set the scene for another upward price spiral," said the CGES in its monthly oil report.
Ahead of the peak summer demand season, the group warned that "OPEC needs to raise output to let refiners boost transport fuel stocks in 2Q...Refiners will need to boost runs rapidly and to do so they will need more crude than is currently available," said CGES.
Workers hint at concessions to aid an ailing Pemex
Petróleos Mexicanos, the world´s third-largest crude producer by volume, may find union leaders open to reducing unfunded pension debt and increasing worker flexibility when contract negotiations get under way.Carlos Romero Deschamps, head of the 124,000-member oil workers union, said the time has come to tackle problems that have run up Pemex´s debt, resulted in imports of natural gas and gasoline and caused crude reserves and production to decline. In the coming weeks, the union and Pemex will begin talks to renew the current two-year contract, which expires on Aug. 1, he said.
Angola, one of the poorest places on Earth, is an oil industry darling
A corrupt, underdeveloped and war- scarred country, Angola, a West African country, is one of the poorest places on earth. But ask any energy executive and another picture emerges: a place of immense riches, solicitous of foreign investors, and among the fastest growing oil exporters in the world.
South Africa, Russia explore energy ties
South Africa is considering helping Russian state oil firm Rosneft and gas giant Gazprom in making liquid fuel from natural gas or coal, a cabinet minister said on Monday.
India not keen on binding global pact on emissions
India is not keen to sign any global agreement on limiting emissions, however, New Delhi is willing to take only voluntary steps in the area of energy efficiency and reduction of emissions. With increasing global concerns on climate change, the discussions on energy efficiency, reduction in emissions and the move to renewable forms of energy have become more intense.
Three Kidnapped in Southeastern Nigeria – Police
Two foreigners and one Nigerian were kidnapped in southeastern Nigeria over the weekend, police officials said Monday, raising fears that a spate of abductions in the country's volatile, oil-rich Niger delta region was spreading to other areas.
America's Farmers--the Arabs of the Midwest
Now, having spent my youth on a farm, I am sympathetic to farmers and agriculture in general. I have no quarrels with this price increase and the profits it brings to our farmers. In fact, I think it’s great.Clearly, though, not all would agree.
Certainly not the biofuel naysayers who saturate the Internet with deceptive stories and manufactured “data.”
Demand for oil crops forecast to increase
The predicted demand from the biofuel market for oil and starch crops from 2010 was likened to "a steamroller about to hit us", a farmers' meeting was told.
Investors Managing $4 Trillion Call on Congress to Tackle Global Climate Change
For the first time, dozens of institutional investors managing $4 trillion in assets today called on U.S. lawmakers to enact strong federal legislation to curb the pollution causing global climate change. Joined by a dozen leading U.S. companies, the investor group outlined the business and economic rationale for climate action as they called for a national policy that reduces greenhouse gas emissions consistent with targets scientists say are needed to avoid the dangerous impacts of global warming.
A team of NCSU scientists and engineers says it has developed a biofuels technology capable of converting animal fats - including lipids from dead chickens, hogs and cattle - into fuel for commercial airliners and fighter jets.
Department of Energy Submits $23.6 Billion Spending Plan to Congress for FY’07
U.S. Department of Energy (DOE) today submitted the Department’s $23.598 billion spending plan to Congress for Fiscal Year (FY) 2007, a $45 million (0.2%) increase over the FY’07 request, as a result of the FY’07 Continuing Resolution. The spending plan will allow DOE to continue making marked progress in achieving President Bush’s goal of bringing more clean energy sources to market to help cut dependence on fossil fuels, increasing our energy and economic security and boosting competitiveness.
Report: Shell eyes other oil sands firms
Anglo-Dutch giant Royal Dutch Shell may be considering deals or takeovers of Canadian oil sands players that need access to refining, the National Post reports.
Gulf governments plan oil pipelines
Gulf governments are planning oil pipelines that would bypass the world's most vulnerable energy choke point, the Strait of Hormuz, aiming to avoid possible Iranian threats to global oil shipments.If built, two pipelines could ferry as much as 6.5 million barrels of oil a day around the strait, an amount equal to nearly 40 percent of the daily exports currently shipped through the narrow channel at the entrance of the Gulf.
Disappointments From PetroChina May Just Be Beginning
PetroChina retained its title as Asia’s most profitable company, posting record earnings of 142.2 billion yuan ($18.2 billion) for 2006. However, the results were below analyst expectations and investors were dismayed by a 13% slide in second-half earnings as costs rose and refining losses deepened....A number of analysts appear to believe that the disappointments are just beginning.
The Mexican Peak Oil Crisis: Lowest rate of oil output in seven years
Sean Brodrick at Money and Markets writes that it appears Peak Oil has affected Mexico, as, “In December 2005, Mexico sent the U.S. 1.7 million barrels of oil per day (bpd). This past December, Mexico only exported 1.2 million bpd to the U.S.”
New maps may unlock giant "heavy oil" reserves, expert says
Some of the world's largest—but hardest to reach—oil reserves could be tapped with the help of a little-known scientific field called rock physics, a Canadian scientist says.
As water grows scarce, nuclear power can help
Because nuclear power produces large amounts of energy without emitting global-warming gases, it is drawing increasing attention. But it also can play a key role in dealing with another environmental problem that we can't afford to ignore: water shortages.
Uganda: Fuel Shortage Gets Worse
MTN's spokesperson Tina Byaruhanga said telephone communication is not likely to be disrupted, unless the shortage persists. MTN Uganda uses 150,000 litres of diesel per month to run more than 350 base stations countrywide.
Understanding Empire: Hierarchy, Networks and Clients
The Somali experience in failed empire-building reveals another even darker side of imperialism: A policy of ‘rule or ruin’. The Clinton regime’s failure to conquer Somalia was followed by a policy of playing off one brutal warlord against another, terrorizing the population, destroying the country and its economy until the ascent of the Islamic Courts Union. The ‘rule or ruin’ policy is currently in play in Iraq and Afghanistan and will come into force with the impending Israeli-backed US air and sea attack on Iran.
Official defends editing climate papers
A former White House official accused of improperly editing reports on global warming defended his editing changes Monday, saying they reflected views in a 2001 report by the National Academy of Sciences. House Democrats said the 181 changes made in three climate reports reflected a consistent attempt to emphasize the uncertainties surrounding the science of climate change and undercut the broad conclusions that man-made emissions are warming the earth.
Spending on forecasting can offset climate warming threat
Every euro spent on weather forecasting technology can bring sevenfold savings in dealing with the consequences of climate change, the World Meteorological Organisation (WMO) said Monday.
Ex-CIA chief says U.S. must act on climate
The United States must act to cap its emissions of greenhouse gases and join the fight against climate change or risk losing global leadership, a former CIA director said in a report released on Monday.
Bill McKibben: Global warming knocking at your door
If you take global warming seriously, for instance, the prospect of using 36 calories of energy to grow and transport one calorie of California lettuce east doesn't make much sense. Peak oil and climate change alone may mean that the economy will grow gradually less national and global, and more regional and local.
Esso/BHP could put carbon under sea
The gas conditioning plant is required to treat new production from the Kipper gas field. The downside is that it would emit a million tonnes of CO 2 every year. While not quite in the same league as a coal-fired power station, this is not the right approach to achieving urgent CO 2 reductions.
The scientifically unsustainable theories of global warming are bad enough without the ecoalarmists who fabricated the myth in order to justify oil price gouging by the oil barons to curb the demand for oil.
DOE solicits more oil for U.S. reserves
The U.S. Department of Energy announced its aim to buy up to 4 million barrels of crude oil for the Strategic Petroleum Reserve.The two sites that may receive either some or all of the additional reserves are the West Hackberry, La., site, and the Bryan Mound, Texas, site. Energy Department will accept bids through April 3 and make final decisions by the following week.
India to build 5 MT crude oil strategic reserve
India will build its first strategic crude oil storage of 5 million tonnes by 2012 and will raise it to 15 million tonnes in the next phase as part of steps to ensure energy security, the Rajya Sabha was informed on Tuesday.
China may build strategic oil reserve in Lanzhou to store Kazakhstan crude
China may select Lanzhou in northwestern China's Gansu province for the Phase II strategic oil reserve programme, to store crude from Kazakhstan, the official Shanghai Securities News reported, citing a China National Petroleum Corp advisor.
The Effects of Rising Fuel Costs on U.S. Trade
The dollar/oil relationship must be maintained to keep the dollar as the International Reserve Currency. However, the price of oil is expected to rise steadily as the supply/demand imbalance increases and the value of the dollar declines. Rising oil prices result in increasing inflation, negatively impacting the global economy, particularly oil-dependent economies such as the U.S. An increase in inflation could negatively affect the demand for the U.S. dollar. If the demand for the dollar decreases substantially, the dollar/oil relationship could be challenged by the major oil producing countries.
Norway: Arctic reserves are key energy supply, but environment must be protected
"If the U.S. Geological Survey is right, 25 percent of the world's undiscovered petroleum reserves could be found in the Arctic. Thus, the Arctic region could be part of the solution to the growing energy needs of the world," said Oil Minister Odd Roger in opening a conference on the northern region.
Canada to end oil sands aid, add green-car rebates
Canada's minority Conservative government, pressured to do more on the environment, will phase out some oil sands tax incentives, introduce rebates for hybrid vehicles, tax gas guzzlers and subsidize renewable fuels.
Oil, shipping gain as Arctic warms
Global warming, blamed for melting polar bears' icy Arctic habitat, could be a boon to the shipping and oil industries in the far North, according to a new U.S. report.
Kremlin May Force BP To Share Oil Venture
BP has warned western investors that it could soon be forced to share control of its highly profitable Russian joint venture, TNK-BP, with a Kremlin-controlled energy group such as Gazprom or Rosneft.
Oil Technology Still Poor in Nigeria
THE Senate President, Chief Ken Nnamani has regretted that even with the creation of the Petroleum Technology Development Fund (PTDF) in 1973, use of update technology as the key to the transformation of Nigeria's oil and gas industry is lacking, hence leading scarcity and conflicts invariably.
Switchgrass: Ideal for Biofuel?
In the quest for economically viable cellulosic ethanol, switchgrass has garnered attention as a hardy, low-cost energy crop. While cellulosic ethanol is still agreed to produce emissions benefits over corn-based ethanol, and while the adaptability of switchgrass to different growing conditions remains one of its virtues, some farmers who have grown switchgrass say the crop's cost of production can be considerably more than corn.
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Red Queen Update
We haven't talked about natural gas for awhile - here are a couple of things to ponder:
1) Canadian crunch: From Baker Hughes, we have the following:
Canadian NG rig count:
2006 year-on-year increase in rigs (percentage):
Q1 was 128 (+31%)
Q2 was 42 (+23%).
Q3 was -21 (-5.0%)
Q4 was -125 (-29%)
Now, to 2007:
Q1 so far: -190 rigs (-34%) (first 11 weeks compared to same in 2006)
Q1 so far -78 rigs (-17%) (first 11 weeks compared to same in 2005)
Since July 2006, year-on-year Canadian NG rigs are down an average of -128(-27%) per week, and accelerating:
...............07 count........06 count.....YOY........%change
2/2/07.........431..............592........-161........-27%
2/9/07.........409..............576........-167........-29%
2/16/07........397..............596........-199........-33%
2/23/07........368..............579........-211........-36%
3/2/07.........344..............561........-217........-39%
3/9/07.........305..............558........-253........-45%
3/16/07........208..............526........-318........-60%
The decrease in the later period is presumably due to break-up (early spring).
Let's assume Canada's NG production profile per well is similar to that of the US, i.e., declining 40% or so in the first year. The 30% decrease in drilling activity should then result in a (30%) x (40%) decrease in Canadian NG supply, or about 12%. That's 2.5 billion cubic feet per day, given total Canadian production of about 20 billion cubic feet per day. Presumably, that gas won't be exported to the US, meaning Canadian exports to the US (currently a bit less than 10 billion cubic feet per day) will drop by 20% in the near future.
2) Barnett shale red queen: The Barnett shale, in the vicinity of Dallas/Fort Worth in Texas has been one of the "saviors" of US natural gas supply in recent years. It is a source of unconventional, tight gas, i.e., fracturing needed, high capital costs, high initial depletion rates. According to the Texas Railroad Commission:
Barnett Shale - Gas Well Gas Production –
January 2004 through December 2004 = 380 Bcf
January 2005 through December 2005 = 495 Bcf
January 2006 through November 2006 = 571 Bcf
For 2005 production accounts for 9% of Texas
Production.
Drilling Permits Issued –
January 2004 through December 2004 = 1,387
January 2005 through December 2005 = 2,006
January 2006 through December 2006 = 3,180
So, the number of drilling permits issued went up by 60%, and the gas produced went up by 15%. And this is basically the best we have in the US for natural gas supply at this moment! Makes you go "hmmmm".
Thanks for the update I saw a survey report last week indicating 42% of U.S Natty producers would reduce drilling if the price was less than $7.50 per MCF. At current pricing they are indeed not expanding, not treading water but creating a potential big problem for the fall. However the Estrogen Choir on CNBC is singing the praises of lower prices.
You need to know the decline from all existing wells, which is less than the new ones... If drilling activity drops 100%, production will not decline 40% because the avg well declines say 25%. In this case, and given that canadian production was previously flat yoy, a 25% rig reduction results in a 6% decline, or, with half exported, a 12% decline in exports, say 400bcf.
The 160 canadian rigs didn't disappear, they migrated south. US avg in 06 was 1290, now 1440. Nice of them, we need around 10% more each year to stay even; however, as you note, canadian production is going down, and meanwhile tar sands will take maybe 300bcf more in 07. My latest guess is that canadian exports will decline 700bcf...
Where can you get current canadian production numbers?
I think that's exactly what I said (you say 12%, I say 12%), isn't it? I probably did overplay my hand a bit, but if drilling activity drops to nothing, the production will go down somewhere in the neighborhood of 40% - take a look at this (albeit for the US) -
Follow the line downward from 2004 to 2005 (i.e., no drilling), and you find that roughly 20 bcf/d out of the 50 bcf/d has vanished, i.e., 40%. Part 2 of my comment suggests that all these rigs are being dumped into the US just to maintain production, so the loss will still be there.
The most current Canadian numbers I used were EIA, but I'm sure there's a source in Canada that's more up-to-date.
Thanks for posting the chart. I've seen it before, but printed it this time.
I think you might be looking at 2 years... 32% means what it says, look at the slope of the line dividing 05 and 06.
If canada is the same, and if they previously had enough rigs to hold production steady around 6600 bcf, then a loss of 25% rigs will cut yoy production 8%, or around 500bcf. Of course this means that exports will go down this amount plus any increased consumption, and I separately heard that tar sands will soak up at least 300bcf more this year, so I now expect exports down 800bcf, a little less than my earlier guess of 1tcf.
Also worth noting that every year new wells decline at faster rates as we drill into eg tight sands, so even tho production has held steady on account of more rigs drilling more holes the slope is steepening, exlaining why we need more rigs every year. The trend averages 1% higher/y since 1990, but is accelerating, from say .5% higher/y to over 1% higher/y now. IMO we are the coyote that ran off the cliff, and is just now beginning to look down.
http://www2.nrcan.gc.ca/es/erb/prb/english/View.asp?x=449 has some useful Canadian natural gas production numbers. They have a different pdf file for each month.
I notice that the data source you give shows that US natural gas imports from Canada were down 5% for the year 2006, compared to 2005. This was before the drop in rig counts.
It should be an interesting year. We should be able to tell by mid-summer if Saudi Arabian oil production has peaked, because inventory draw-downs cannot continue for long and they will likely be called on to increase their production to meet rising demand. In the same way, we should learn the truth about our natural gas production situation.
Natural gas in storage last week was at 1516 Bcf, 11.6% above the five year average, which would be 1358 Bcf. This comfortable number is still well below last year's figure of 1840 Bcf. If Canadian exports to the U.S. continue to fall by 5%, that would be a drop of 18 Bcf per month. If U.S. production continues to fall by 2%, that will cost us another 40 Bcf per month. This means that in less than three months we are likely to drop down to the five year average, and by the beginning of the winter we will drop below the bottom of the average range, which would be a bad thing. The decline figures of 5% for Canadian exports and 2% for U.S. production are not especially high estimates, as previous TOD posts have postulated U.S. production declines in 2007 as high as 7%.
With winter ending, the natural gas storage numbers will not be pushed around as much by the weather, and we should be able to track the supply and demand situation fairly closely. There will be a clear call for more North American natural gas this year. We will see if it can be delivered.
I don't think us ng production will decline this year, rig count is up enough to maintain prod. However, the rigs came from canada, now down 25%. Their production looks to me to be down 8%, or 500bcf, and with tar sands increased demand 300bcf would mean exports down 800bcf, but accelerating into winter.
http://www.dailyreckoning.com/Issues/2007/DR031907.html
The finance guys know about peak oil more than we think.
Thats Agora with Byron ->http://www.dailyreckoning.com/Writers/ByronKing.html
and Marc Faber by the way. Its not really mainstream (?),
at least the two guys mentioned belong to the small known clique of us "fringe peak-oilers".
The little article on growing switchgrass caompared to corn really suprised me after reading so much about how switchgrass will grow anywhere without fertilizer and with very little inputs of any kind.
How is it that farmers calculate that they can grow swithgrass for about twice the cost of growing corn?
Chalk it up to lack of experience. Switchgrass is being grown in the county just east of me as fuel for a powerplant in Ottumwa, Iowa. Yields are only 3 tons/acre about 1/4 of projected potential.
Switchgrass grown in a monoculture has limitations, a better energy source would be a diverse mixture of native prairie plants approximating the original prairie in a given area. In the northern tallgrass prairie, switchgrass is a minor component with "big bluestem" as the dominent grass and "indiangrass" playing a lesser role. The hope for switchgass was genetic modification for super yields, probably from companies, Monsanto and the like, so the large agri-business players could profit. The key to the prairie is plant diversity and with this comes natural soil building and sustained fertility. With a proper rotation schedule, the prairie could be harvested for biomass and maintain a dynamic soil indefinitely without fossil fuel inputs.
This is a link to the DesMoines Register article on switchgrass that is referenced in the article.
http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20070318/BUSINES...
It sounds like they are using a lot of fertilizer and herbicides, both derived from fossil fuels, and the yield is quite low.
This is a link to the Berkeley study that indicates that Cellulistic ethanol can be expected to have a very favorable energy return.
http://rael.berkeley.edu/EBAMM/
If you "Download the Model" from this site, it gives an Excel spreadsheet showing how much of various inputs and outputs are expected.
This is also a quality link to the possibility of cellulosic ethanol. The key is to use some, not all of the biomass each year (think buffalo on the prairie).
Carbon-Negative Biofuels from Low-Input High-Diversity Biomass By Dr. David Tilman and others
http://www.agobservatory.org/library.cfm?refid=96611
I have been asked several times how the water usage in an oil refinery compares to that of an ethanol plant. I documented that calculation today:
Water Usage in an Oil Refinery
An oil refinery uses 0.5 gallons of water per gallon of crude. The ethanol plant uses 4 gallons of water per gallon of ethanol.
This is just an FYI in case you ever need a reference for this information. I have been asked about it via e-mail several times over the past year.
Ugghh! That's a lot of water... especially if ethanol production keeps growing. Do you happen to know how much, if any, is recycled, or is it "lost"?
In an oil refinery it is treated and discharged. I would imagine that it is the same in an ethanol plant. But the problem is that fossil aquifers are being drawn down. So, even if 100% of the water is treated, the current situation is unsustainable.
Water is recycled, by the way. The numbers I quoted are just the make-up water inputs. The internal water usage for both would be somewhat higher.
Robert
any idea how many gallons of water is required for a gallon of oil from oil sands?
It might be a very intersting analysis to determine how water consumption will change with the change in fuels mix over the next 5 years.
Water is the "ne plus ultra" commodity.
we take it for granted in north america.
the largest users by a wide margin are agriculture.
so if we have to decide between water for farm irrigation and water for ethanol production, who wins?
any idea how many gallons of water is required for a gallon of oil from oil sands?
I have seen that number, but I forget what it was. Higher than 0.5 gallons per gallon of oil production. I think it was in the range of 1 to 2 gallons per gallon of oil, but don't quote me on that.
http://www.energybulletin.net/22348.html ...
'The study says that strip mining in the oilsands requires two to 4.5 cubic metres of water to extract one cubic metre of synthetic crude oil.
The water becomes heavily polluted in the process and only 10 per cent is returned to the river, with the rest held in huge storage ponds that are among the largest manmade structures on Earth.
"These environmental damages related to bitumen production … could eventually affect an area about one-fifth the size of Alberta, or about the size of England or Greece, since this is the extent of the deposits," the study says.'
I believe from other sources that the actual water usage is somewhat greater.
Correct. I've seen 3-5 barrels of water for every boe.
This may have been where I had seen the reports of 1-2 gallons of water per gallon of oil:
http://www.whiskeyandgunpowder.com/Archives/2006/20061113.html
He doesn't cite a source, though. This is one of those touchy areas for me, though, because my company is pretty heavily involved, and I have a difference of opinion as to whether we should be doing this. So, I am going to bow out of further discussion here.
It's about four in most reports. And of course the industry claims increasing re-use of water, but as they recycle perhals 10% these days, what does that add up to? The tailings ponds can by now be seen from Mars, I'd guess.
There's no shortage of water in the midwest, so water won't stop the ethanol madness here, but water could certainly be the nail in the coffin for other areas where there is less rainfall and where the corn already has to be irrigated to get the desired yield.
Really? Where do they get it?
http://en.wikipedia.org/wiki/Ogallala_Aquifer
I did a quick report for a food supply paper and ran into info on the largest aquifer in this country getting depleted. This adds to my concerns about peak oil and peak about everything else but uranium.
Whoa...Peak Uranium was in 1980.
Source: World Nuclear Symposium 2006
We are using recycled bombs to make up the shortfall at the moment.
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It's all about population!
This statement is taken totally out of context and mistakenly implies that we are near a uranium peak similar to the oil peak. Here are some statements from the linked article that are actually representative:
So after the uranium "peak", prices dropped rapidly. Hmmm..
Oil companies probably spend several times this much every year on exploration! Note that in the late 1990's, uranium exploration expenditure was around $10 million a year, a pittance. If you don't look for it, you don't find it.
So we saw maximum production in 1980, but that was because no one wanted to buy extra uranium for the decade after 1980. If the market isn't there, the uranium is not produced!
The situation with uranium until recently was like what would happen with oil if, for some reason, the Soviet Union and the West had stockpiled about 200 Billion barrels of oil in something like the SPR, and then decided that they needed to sell down these stockpiles. Imagine the reaction of the oil markets to a 20 million barrels a day sell off from the SPR, and the likelihood this could continue for 20 years. Imagine how many marginal oil producers would throw in the towel as oil prices plummetted.
When I get a moment I will look into this further, as I certainly may have made the mistake of misunderstanding the nature of the 1980 production peak.. but...then why are we using recycled bombs for fuel?
Is it easier to handle the bomb material than mine new material?
I ask this since I really don't understand this aspect.
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It's all about population!
First, START and other disarmament treaties made excess uranium less useful.
Second, Pu239 is vastly superior for weapons purposes if you can do a decent implosion.
My mistake...it is a false production peak...lack of demand.
Analysis: Demand to stress uranium supply
Of course, this should not diminish the fact that there is a significant amount of production to be made up, especially with so many new reactors being discussed/planned.
Thanks for pointing out my mistake.
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It's all about population!
Hmmm....why am I reading articles about unexplored parts of Australia and America for that matter? I'll have to dig back through and post some stories, but from what I have been reading, we have plenty of uranium in the ground, it's just not being actively mined.
Yes, and Hydrogen is the most abundant element in the Universe!
It's true!
Not even relevant. Uranium supply has been adressed ad nausium, repeatedly demonstrated as being sufficient for millenia.
If you say so.
Did you say millenia?
Reference?
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It's all about population!
Oh come on! This was done only a couple of weeks ago!
http://www.theoildrum.com/node/2323
Ogallala is in the Great Plains, not the midwest. The great lakes are, if I'm not mistaken, the largest bodies of fresh water in the world. The Ohio River has roughly 200,000 cubic feet of water passing any given point per second. Currently it's at flood stage due to heavy rain and nearly 400,000 cubic feet per second is being measured at Cincinnati. see this graph, Y-axis on the right for flow volume:
http://newweb.erh.noaa.gov/ahps2/hydrograph.php?wfo=iln&gage=ccno1&view=...
I've seen a lot irrigation circles used for corn in southern Indiana, but aquifer use/ irrigation for corn in Ohio is very rare. It usually rains plenty, and if it doesn't corn yields just suffer. Water in the midwest is usually obtained directly from lakes/ rivers rather than by drilling into aquifers although that certainly happens too.
Yes the midwest is the last refuge for water, which is one (only) of the reason(s) to stay in Dayton, Ohio. Buried aquifer can produce high quality water.
Greg
Ohio is indeed a very dull place to live. I often wonder why I'm still here. Tried to move away twice- once to Boston, another time to Oregon. somehow I just could never escape.
But then again, a small to mid size city in Ohio will be better off than most places in the U.S. As we've already noted, at least we won't have water shortage problems. We still have plenty of farm land. Some reforestation has occurred sucessfully (e.g. Wayne Nat'l Forest). And I have a hunch that, for better or worse, the high-sulfur coal will probably be exploited again. A few coal mines are already re-opening after decades bc/ with the increased cost of coal, it is now profitable to mine despite the additional cost of removing the sulfur or mixing it with imported low-sulfur coal to remain below emission limits.
On the other hand, our near complete lack of public transportation is a draw-back as is the fact that a large percentage of our population lives in the suburban-exurban wasteland of Cinti-Dayton, Cleveland-Akron-Canton and Columbus.
But, all in all, despite Ohio's lack of culture, our decaying industrial blight, and our surburbian wasteland, perhaps it won't be such a bad place in the end.
"But, all in all, despite Ohio's lack of culture, our decaying industrial blight, and our surburbian wasteland, perhaps it won't be such a bad place in the end."
I applaud your "optimism." :-)
Do you know what kept pulling you back to Ohio?
"Do you know what kept pulling you back to Ohio?"
1) Family
2) Wife refused to move
3) Cost of living
4) Dumb luck
The first 3 are all very valid reasons. Who knows, you might end up being happy to be there.
Hey! Come on you guys, don't be so hard on Ohio....why in Kentucky, we consider Cincy and Cleaveland absolutely metropolitan!
All kiddin aside, has anybody wondered why firms in Japan-Europe, and even a few U.S California firms have moved production to the Ohio River area (KY, IN, OH, IL and even a bit of a rebound in Pennsy)? Let's see, lots of water....lots of coal...still able to grow food....remaining marginal amounts of natural gas....cheap real estate, river system that provides cheap transportation to an area a third as large Europe, far inland from attack (New York, LA make juicier terrorst targets, if someone blew up something in Cleaveland, would the national press even notice it? :-)....and a native population that considers any job better than being a greeter at Walmart a career....we better shut up or we will create an influx to the region if peak hits full force.....shhhhh, be very, very quiet....:-)
(and as for culture, the last time I checked, the Cleaveland Orchestra and art museums, the Louisville Center for the Arts and the Actors Theatre weren't half bad....and for the blue collar set, the Cincinnatti Reds, Cleaveland Browns, Kentucky horsetracks, and the Rock and Roll Hall of Fame....I have no interest in going bi-coastal....:-)
Roger Conner Jr.
Remember, we are only one cubic mile from freedom (and I am only ten miles as the crow flies from the Ohio River :-), and happy for it!
Any missile silos or military bases close by because you could be a target of a nuclear attack (jk).
Only fair to ask since I got barraged for saying the same things about Kansas City.
no missile silos or military bases, but the only steel-manganese alloy plant in the US is nearby. this steel is apparently quite important for tanks & planes. A few years back the plant was going out of business but the US gov't bailed them out by paying the plant to produce and store 2 years worth of finish product in on-site warehouses in case of military emergency bc/ there is apparently no source of manganese in the US. It's imported from Africa somewhere. Also a uranium enrinchment plant is not too far away. Most of the coal that runs the midwest factories comes right by here on train or river barge. I figure those factors makes us a pretty good target.
Hello Phin and everyone, I feel like - umnnnn - (I'd like some attention)(please):
I have an "invitation".
I invite anyone on this forum who brings up, posts, contemplates, discusses or in any other way mentions "nuclear attack", "nuclear war", "fallout from nuclear weapons", and so forth...
...for every word(thought)/minute (kind of like b/d) spent thinking or talking or writing about the number of nuclear weapons and the likelihood of their use...
To please spend an equivalent number of minutes looking at any of the following sites, taking any one of several recommended actions...
Or, to simply spend these few minutes meditating on the number of people, even as we speak, possibly numbering in the thousands (like TOD) - or even tens of thousands - who spend most of every waking moment actively working to prevent the "unthinkable".
http://www.peacenorth.org/component/option,com_bookmarks/Itemid,1/catid,10/, http://www.wand.org/stand/mondays/monday8_8_05.htm, http://www.nukewatch.org/lanl/index.html, http://www.psr.org/site/PageServer?pagename=Home, and many others. And for those who (I think someone mentioned some time ago) don't like UCS, I will say they have an interesting program aimed at educating(young) scientists on nuclear weapons issues. http://www.ucsusa.org/global_security/international_security/, http://www.idds.org/. (IDDS has done some neat things.)
There is a HUGE shortage of water from Texas panhandle through eastern Colorado, western Kansas, into Nebraska. Lesser shortage to the east, north and south.
Farms are being abandoned in Western Kansas to scrounge ranching because of cost of pumping Ogallala.
Big snows this past winter in the central Rockies well help alleviate some of the drought pressure here in the plains states, especially along the major river systems, so the near term situation is better than it has been in some time. But the longer-term prognosis is still bleak, as the large reservoirs and the Ogallala Aquifer are still in bad shape.
http://www.drought.unl.edu/dm/monitor.html
http://www.npwd.org/Ogallala.htm
Correction, well below average snowpack this year in the west.
http://www.wrcc.dri.edu/snotelanom/basinswen.html
Then from the drought monitor narrative in your link
"The above-normal temperatures caused many river flows to increase because of early melt of the below-normal snowpack."
For the eastern plains, the date of snowpack disappearance influences the cessation of thunderstorm formation. When the snowpack disappears precipitation becomes less frequent. This usually happened about the first of july. the last several years it has been gone by mid may, early june.
Weather worries plentiful as spring approaches
http://www.brownfieldnetwork.com/gestalt/go.cfm?objectid=002A2E1C-EFCB-9...
The data sets I've seen are 3-4 gallons of water per gallon of corn ethanol.
Gasification has a much better ratio.
Thanks, Robert,
Is there any chance this can go somewhere in "The Book"? (Or did you already do this?)
In reply to Euan Mearns article yesterday, I posted a reference that shows horizontal to vertical well production ratio is 3.9 to 1. I also further quoted from the article that demonstrated that this was for wells whose horizontal length was up to 5000 feet. The horizontal wells in KSA are 10,000 feet and longer (3km and up). This would suggest that the production ratio versus verticals is more like 8:1 or even higher.
If using this ratio of vertical to horizontal production, Euan's graph becomes a catastrophic decline, further supporting Stuart's contention that KSA is in decline.
After reviewing this, coupled with Euan's apparent lack of knowledge of the changeover from horizontal to vertical wells, coupled further with Euan's omission of 2006 data (when it is the 2006 data that convinced Stuart of KSA decline), I do not see how Euan's article can in any way be considered a response to Stuart's position. In fact, I now regret having "dugg" the article at all. Further, I find the article's omissions and errors seriously undermine the credibility of the entire article.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
From the article up top:
We basically have a supply/demand imbalance, where demand is being met by drawing down inventories.
As I said yesterday, and as Robert has also pointed out, a lot of questions are going to be answered pretty quickly. Unfortunately, I don't think that anyone is going to be happy about the answers we get.
It’s about time somewhere other than in the biosphere that someone noticed that current oil production is significantly below current demand. This is due in no small part to booming US demand – up about 900,000 bpd so far in 2007 over 2006 – but actually even without the US, world demand still exceeds available supply. So far rapid inventory rundowns have been neglected or inexplicitly downplayed by the energy analysts, getting prominently noted only by the IEA.
Saudi Arabia may have as little as three months before a fairly critical inventory situation may develop within the US. Will SA heed the clarion call for more production? Or will they just provide some other excuse, such as blaming the expected SPR purchases in May, June, and July, not wanting to micromanage supply, or perhaps technical issues such as mechanical problems, and keep output the same?
I would not agree that "rapid inventory rundowns have been neglected or inexplicitly downplayed by the energy analysts". The prevailing view amongst the analyst community is that these injventory drawdowns are a result of OPEC's output cuts. Therefore, when inventories have come down to a level ore acceptable to OPEC, they will restore cut supply to the market.
Whether or not OPEC (in essence Saudi Arabia) can do this has been discussed at length on this board. Opinion remains divided, to say the least.
However, there does appear to be a growing consensus that the truth of the matter will be revealed in the coming months as refineries come back into service after maintenance, gasoline demand increases in the driving season, aircon demand picks up and concern over potential hurricanes increases....
Some may be blaming OPEC, but even that would be mostly incorrect. Inventory draws started in the fourth quarter 2006 before the first OPEC cuts were even discussed. Granted in the first quarter 2007, roughly half of the inventory drop after mid-January can be explained by OPEC – but maybe not. With warmer than normal weather in the world, production cuts by OPEC should have been mostly offset by lesser weather demand.
The current round of OPEC cuts were agreed in September 2006 and began to be implemented in October, with varying degrees of adherence. A further cut was announced in December (if I recall) because the first round of cuts were not deeemd to be having the necessary effect.
There were massive inventory drops in heating oil, residual fuel oil and propane (as well as NG) in the US in February as the north-east experienced the coldest weather seen in 30-odd years. This more than countered the effects of historically warm weather seen elsewhere in the northern hemisphere.
In addition, gasoline set record demand levels throughout the US winter season.
Warning: Conspiracy theory ahead.
Consider this. The Arab countries want to keep Iran safe from a USA attack while still appearing to support the US. So what do they do? They keep their quota low and underpump oil, drawing down stocks all over the world so that the US can't attack Iran because they wouldn't be able to handle the loss of Iran's oil.
Substrate, that make perfect sense to me. Its simply in their best interests to hold back a little bit.
If oil goes to back to $75, the admin may just reconsider.
I have certainly been repetitive, but insofar as I recall, I have also been very consistent:
(1) Deffeyes is probably right, world crude oil production peaked in 2005;
(2) Simmons is probably right about the advanced state of depletion in Saudi Arabia and
(3) Net oil exports are falling faster--and probably much faster--than overall world crude oil production is declining.
I think that the oil markets are like a bottle of nitroglycerin sitting on your kitchen table--temporarily stable, but likely to suddenly explode when moved.
Mr. Brown,
I want to thank you for your work. I don't know what motivates you to keep posting--you keep talking about practical responses to the imminence of approaching challenges, while others want to make careers of being "right."
Some at TOD seem especially concerned about their professional careers, while you take a real risk. Perhaps because I no longer believe in large-scale social policies helping anyone but the moneyed, I am more tolerant of those who would rather be "wrong and alive" than those who would rather be "right and dead." This overstates the debates here at TOD, of course, but I get the sense that some at TOD want to be "heroes"--they want TOD to provide the analysis that tips the scales that saves the day (and their career).
In reality, being a hero is a horrible thing to be--it means you're ahead of the curve and can expect no reward for what you're compelled to do. As a teacher, I sometimes find that it's less important that I actually succeed at communicating, than if I at least try one more time.
Ah, yes. Ric Williams. I knew that name had a familiar ring. Ric thinks that I am looking to be "rewarded by the system."
http://www.theoildrum.com/node/2332#comment-165537
Of course his uniformed comments were immediately corrected by myself and others, but that didn't stop him from repeating himself here today. I would say that the education system has failed him, but sadly he is a part of the education system.
But I am thankful that someone who wears their ignorance like a badge of honor isn't teaching my kids. I want them to be able to think for themselves.
I think we need informed comment on that issue before concluding such a thing.
I suspect that the official Saudi line on this issue is something like : "Yes sure, full-contact wells CAN produce at a far higher rate. But we are interested in sustainability : drawing out the oil gently without damaging the reservoir, provoking coning etc... We used to suck the oil out with a vertical straw, but this damaged the reservoirs. To keep the reservoirs going reliably for 30 years, we're doing it nice and steady"
and there's no way that I know of to contradict such a position.
On the other hand, that would imply that the wells are hugely over-dimensioned and voluntarily choked back. This would give them a massive short-term production capacity if they opened the chokes, which they have shown no obvious signs of using.
Excellent point Alistair and something I was also thinking about yesterday.
As an example, Saudi says it will be able to produce Haradh III at 300 kbpd plateau for 30 years with MRC horizontals and waterflood. To me this implies that it is intentionally foregoing potentially higher supply in the near term in order to maximise production in the long term.
It is hard to see how it could otherwise maintain this plateau with a 1.7% annual depletion rate for this field (according to Nansen Saleri). The wells must intitially be significantly choked back (and the water-flood be more of a water-trickle) to achive this.
By comparison, we have seen fields elsewhere in the world that are produced from the start with tertiary production technology (North Sea springs to mind as an obvious example). These fields reach peak production within 2 or 3 years and then go into steep decline.
MRC and water flooding is not the way to conserve a field.
At this point I see no reason to be nice this is a friggin lie plain and simple.
If anyone else but the Magical Kingdom of Saudia Arabia had said this you would have called it.
M, what would be the way to conserve a field such as Haradh? To keep it going reliably for 30 years (assuming there was that much oil there) and maximise the ultimate recoverable oil?
This is a serious, non-hostile question. I have no idea. Your blunt dismissal doesn't enlighten me in the slightest.
My understanding is that water injection does not "conserve" a field but it does increase the total recoverable volume of original oil in place. The reference that I gave noted that in extreme cases recoverable oil could be as much as 6 times higher than with vertical wells. This may be one factor in why KSA believes they have the reserves that they do. But the notion of conserving a field via water injection doesn't ring very true. Rather, water injection is one of the surest ways to produce a field, not conserve it. And in fact, water injection works so well that the dropoff is often catastrophically abrupt. Witness Cantarell or Yibal.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
That's the setup you would want to maximize production of the field using the latest technology available today.
Assume anyone else on the planet had said they developed a field this way what would you think they were planning to do ?
Next the Information Manager forgot to add the blurb that the field has a maximum production rate of 500kbd if needed to cover demand.
If your going to claim to be a swing producer and that your conservative don't you think you should also give the reserved production capacity in your statement ?
Better yet explain in a bit more detail how your going to manage the field ?
Next this project has been in the news several times with no mention of this attempt to normalize production for 30 years if this was the goal then it would have been brought up far earlier and you would even have a few papers on the subject since its a intresting claim to say the least.
To me its blatantly obvious this spin was appended later.
Despite the claims to the contrary everyone including MKSA is running their fields close to peak production. They may rotate individual wells out for resting that's fine and be conservative but that's not exactly choking back supply.
The field is designed to be produced at a certain rate if you start turning off pumps handling salt water your will eventually have a maintenance nightmare.
MKSA can do two things they can rotate a percentage of wells in and out and they can decommission a entire field shutting down the water pumps correctly. I know in the US in Louisiana we have a hell of a time keeping the pumps operational that are for flooding because once you get salt water in a pump its corrosive as hell you don't want to turn off a salt water pump.
If you look at MKSA production profiles outside of this rotating well level the next step they take is to basically shutdown a whole field.
One more thing while I'm on a roll. If they have soooo much oil why choke back production on what should be a medium size field for KSA ?
Who cares if this one field lasts thirty years they have a bazillion barrels of oil just waiting to be tapped and we will develop better technology.
Agreed - Haradh III is small by Saudi standards - they are claiming recoverable reserves of about 6.45 billion barrels. One would think they should have bigger and easier targets to go after in the 130 billion barrel portfolio of undeveloped reserves.....
My theory on this is that the majority of what remains to be developed falls into one or both of the following categories:
Heavy API, sour, and other poor quality crudes: significantly discounted value in the present market due to global shortage of complex refining capcity. Also high sulphur content, high vanadium, etc
Problematic reservoirs: poor permeability/porosity, heavy fracturing, very thin oil columns, etc.
While I am not ready to call peak on Saudi Arabia, I am inclined to think we are nearing the end of the easy-to-produce, high reservoir-quality medium and light grades.
M,
I can't look for it right now, but there was a poster a while back who'd worked at Haradh (sp?) - wasn't there? I recall he/she (assume he) posted only once.
"this project has been in the news several times with no mention of this attempt to normalize production for 30 years if this was the goal then it would have been brought up far earlier and you would even have a few papers on the subject since its a intresting claim to say the least.
To me its blatantly obvious this spin was appended later"
See this pdf: http://www.saudiaramco.com/sa/webServer/general/Summary_Fifty_Year_Crude... Dated February 24, 2004, CSIS, Washingtron DC. Pages 21 and 22.
The "blatant spin" was announced 2 years before they started production at Haradh III.
Page 4 sets out Saudi Aramco's Perpsective over a 50 year time frame: sustainable performance, maximum hydrocarbon recovery, life-cycle economics, prudent reserves management. These are consistent with their infrastructural investment in Haradh III, and with their stated production profile.
"If your going to claim to be a swing producer and that your conservative don't you think you should also give the reserved production capacity in your statement ?"
With regards to the above statement, I do not think that Saudi claims to be the swing producer, others bestow that (technically correct) title upon them. In other words, they are the swing producer whether they like it or not.
As to "reserved production capacity", they have repeatedly claimed thay can produce well above current output levels, yet are derided (here and elsewhere) for so doing. True or not, they claim in this presentation that maximum Sustainable Capacity is planned at 10 million BPD through 2016, a rate based on their market outlook. In 2016, the plan is to increase to 12 million BPD MSC.
"Better yet explain in a bit more detail how your going to manage the field ?"
Pages 21 and 22 make it abundantly clear to a layman like myself how Saudi intends to manage Haradh III. They show the location and type of all the wells, they state a plateau production rate of 300 kbpd for 30 years starting July 2006, they state an annual depletion rate of 1.7% and they show how water cut is expected to increase over that time (up to 22% by 2036).
I do not want to be a Saudi apologist, but your claims are becoming increasingly shrill. The information you seek (in this case) is available and has been for over three years. It is your choice as to whether you choose to believe all, part or none of it. For my part, I have read the presentation several times, in parts it is hugely enlightening. It is possible it is all lies, but, if so, they do it very credibly.
Memmel,
As with all things in Saudi Arabia, I imagine the truth is somewhere between one and the other.
You say that "MRC and water flooding is not the way to conserve a field". Would you not agree that, conservatively managed, this technology ultimately allows for greater recovery of OOIP than traditional vertical or simple horizontal wells?
This must be true as these methods (MRC/waterflood) were originally labelled "secondary" and "tertiary" recovery technologies, implying that they allowed for recovery of resource that could not (efficiently?) be reached utilsing "primary" methods (ie vertical wells).
Alternatively, MRC wells and water-flooding (inter alia) also allow for economic maximisation of a field, ie maximising the Net Present Value of a field's resource through front-loading production to the greatest possible extent (eg North Sea).
So it seems to boil down to whether one thinks that Saudi Arabia has opted to produce Haradh III conservatively to maximise physical output over time (economically sub-optimal in NPV terms) OR to engage in NPV maximisation.
The former would lead one to lend credence to Saleri's claim that Haradh III would plateau at 300 KBPD for 30 years despite an annual depletion rate of 1.7%. The latter would lead one to believe that Haradh III is now pumping at maximum and will likely go into steep decline within the next two years.
Either outcome is possible.....
Bunhead,
I hope that you see that "conservatively to maximise physical output over time" is an oxymoron.
Pumping seawater, sending out dendritic horizontal bores, are both ways to get a lot out fast, but not the MOST. If they wanted to make a field last, they would take natural pressure for as long as that lasted, then gently pump out the remainder with nice putt-putt donkey pumps. They would NOT use EOR.
I meant to maximise the volume of production over time through a prudent production programme as opposed to the financially-optimised NPV profiles adopted by (publicly quoted) companies in the North Sea.
As to your other point, I agree in theory. However, I do not think the US government would be overly impressed with this production profile.....
depletion of a solution gas drive reservoir will result somewhere in the range of 10 to 20 % OOIP (depending on fluid and rock properties)
a water driven (or well managed waterflood) will recover in the range of 40% of OOIP.
Okay I agree they mention this earlier. I saw nothing in that document to indicate how they where going to get 300kbd for 30 years and just a 20% water cut at the end.
And why stop at 30 ? That should have at least carried it out to say 60 years when would water cut hit 60% ?
According to this the field will produce for close to a hundred years at a good rate or does it collapse at 31 years. What's the oil column look like over this time period.
Is this all we have this one slide ?
I might add that depending on the oil column its reasonable to actually claim a steady production rate for this field.
Maybe more information is published elsewhere but this report you sited has no facts and no references. Since its
a semi-technical overview you would expect at least a few references at the end ?
Now given the oil column in the field and oip and recovery estimates etc you could see how this was going to be done.
Next this document claims all these reserves and shows exploratory wells how come the fields are not delineated.
I mean why not a single slide with the discoveries and estimated OIP for these untapped fields what are the names?
As far as I know they named all the other fields once the size of the discovery was known even if it was not developed. We don't have one single name for these untapped reserves.
Next on page 12 it shows OIP steadily increasing yet we know for a fact that their claimed reserves when from 170 in 1989 to 257 in 1990 this dramatic event is never explained why keep secret this steady increase in OIP estimates for 10 years ?
All the claims is this report should have a steady paper trail behind them what about a single discovery announcement.
I'm done with KSA announcements if you want to trot them out as facts then show me a consistent story that backs up this paper. A lot of pressure has been placed on people concerned that KSA is at peak production. No problem but
on the same hand to dismiss it with a report so riddled with holes and no supporting evidence is simply not fair.
The case that KSA has peaked now is basically done either its right or wrong. Real proof not bogus reports missing simple and obvious pieces of information is needed to dismiss this claim.
Its past time for people that think KSA is peaking now to support their claim and time for real proof that KSA is what they say they are.
Shrill more pissed that it looks increasingly like Democracy and the responsibility of or government to lead/protect its citizens has been cast to the wayside.
The problem is not KSA the problem is America you know we
know their exact situation if we don't thats even more of a problem.
To be honest I hope I'm wrong its one thing to talk about conspiracy theories etc its another to accept that the President lied about Iraq WMD and it looks like lied about KSA. Along with crap coming out about global warming. We are a country that may have some very serious problems and will soon be facing some tough decisions. Realizing that your goverment has swindled you is not and easy position to take. And where do the lies stop ?
Thats the problem.
hehehehe i like that writing. time has come, people will open their eyes. it is a mini revelation some times. hmm. ask yourself, why and how does our society (europe US) function?
time is near [chuckle]
Boy this is really reaching. First of all they are producing 300 kb/d from Haradh III but the plateau of 30 years is a projection from the folks who tell us that they have probably have 900 billion barrels of reserves. It is to be taken with a grain, nay a huge chunk, of salt. I am astonished that you would simply take their word for it.
Some horizontal wells do not increase production per well all that much, others more so. Of course it depends on the type of horizontal well you are talking about. They come in at least three different flavors. I call your attention to SPE paper #93439.
http://freeoil.1111mb.com/spe/spe93439.pdf
Of course this is in Ain Dar, which Saudi, three years ago, admitted was 60% depleted. (Along with Shedgum).
The horizontal wells in Haradh III of course are not for that reason, (water control). But they only produce 300 kb/d from there as opposed to 2 mb/d from Ain Dar/Shedgum.
The horizontal wells in the old fields are so they can skim the top layers of oil from the watered out fields. People say that they have "managed their water problem" and "lowered their water cut." Of course they have. They have stopped pumping from where the water is and started pulling oil form where the water ain't. Well there is still water there, in the top ten feet of the reservoir, just much less than below.
And by the way Saudi admitted, three years ago, that Ghawar was 48% depleted. And that was using the most optimistic estimates of recovery rates and guesses at how much recoverable oil remains in the reservoir. But even taking their wildly optimistic guesses, that would put Ghawar at about 54% depleted today.
http://www.saudiaramco.com/sa/webServer/general/Presentation_Fifty_Year_...
Ron Patterson
It is seriously difficult trying to play devil's advocate on this website.
Your point about the horizontals at Ain Dar is well taken. However, as you state, these are wells sidetracked from existing vertical wells, as opposed to the purpose-drilled MRC horizontals at Haradh III.
I am sure that Aramco would have drilled MRCs at Ain Dar/Shedgum if they had had access to Haradh III era technology when they started producing it in 1951... hardly an apples to apples comparison.
A better comparison might be reserves-related production.
Aramco proven reserves for AD/S are 40.8 billion barrels, of which they had produced 26.9 billion by 2004. Water injection started in 1965, by which time I guess they had already produced about 2 billion barrels. So in 40 years they produced circa 25 billion barrels at an average of 1.70 million bpd, or 1.5% of proven reserves per annum.
Over the period from 1972 to 2003, AD/S consistently produced at 2 million bpd or higher, except during the mid 1980's when Saudi throttled back due to lack of demand.
The plan for Haradh III is to produce 1.7% per annum of estimated reserves of 6.45 billion barrels over the next 30 years. This is a slightly higher recovery rate than the average at AD/S under water injection, but not notably so. It is very much in line with the average production at AD/S between 1972 and 2003 if we strip out the low volume years in the 1980's.
I do not therefore see what is so hard to believe about a projected production plateau of 300 kbpd for a field of less than 6.5 billion barrels. The fact that they have pre-drilled both water injection and MRC horizontal wells pre-addresses the issues described above at AD/S: "to maintain maximum distance from the Oil Water Contact, ... to revive dead wells, recover oil in the top zones, and control water production"
So why is it so hard to believe Aramco on this issue? Their output profiles are consistent with previous history, and they are using new technology to overcome previously-experienced problems.
Bunyonhead, I really doubt that Haradh III has 6.5 billion barrels of reserves but that was not my main problem with your post. I was speaking mostly of the your "water trickly, choaking back" assertion. Really now!
Well I would not call 10,000 barrels per day per well, compared to 3,000 bp/d per well for Hardah I, as choking back. I have been unable to locate the water injection facts for Haradh III but I found this for Haradh I:
I would lay odds that Haradh III gets about half a million barrels per day of water as well. That is hardly a trickly. Ghawar total is getting over seven million barrels of water per day.
And you must pump at least as much water in as you get barrels of oil and water out, else pressure will drop and a gas cap will form and your horizontal wells near the top of the reservoir will produce nothing but gas. In other words if you have a 50% water cut and are producing 1 million barrels per day from a given field, this means you are producing two million barrels of oil + water per day. Then you must inject at least two million barrels of water per day just to maintain the current pressure and keep a gas cap from forming.
Of course the water cut in Haradh is not 50% but it is in a lot of Saudi's reservoirs. That is why they must inject so much water.
Ron Patterson
What if Ghawar is actually almost watered out and they are using this time to move assets to Switzerland or the Canary Islands or Paraguay and planning to "fly the coup"
or "flee the coup" before TSHTF. They are certainly not going to tell the truth while they are packing their bags and trying to get out the door before anyone notices.
Great...that oughta help with my sleep problem...thanks.
:p
===================
It's all about population!
Am I good are what I my wild ass guess was 4:1 to 10:1
With no supporting evidence :)
The multi laterals would be higher for KSA I'd say pushing close to 30:1
m,
Duly noted by the memmel fan club.
(Are you and Grey going to write something up?)
BTW, (just a real aside) - if there's any chance you might use a little more punctuation (periods at the ends of sentences, caps at the beginning of the next sentence), we club members would be most appreciative (really) :) (It makes it tons easier to read.)
it might remove to much of m's flowing writing. Id say it would be nice to have, but if it stops you from writing M, then keep the fluid style.
fan n° 3 ?
People certainly do understand exponentials. It's just context-dependent.
Next time you go to a family reunion, or read an obituary, think of that lovely granny, who used to be a blushing bride of 17, but who now has (or had) 7 great-great grandchildren, 87 great grandchildren, 24 grandchildren, 8 children ...
People know, they understand. Instinctively, all simply imagine that the energy to support all this will be there. It always has been.
Historically, and in legend, tough times and mass starvation are temporary, if notable events. Growth is constant over time.
So if the message is to be "things are different this time", then we need to make up a new story. "The Sky is Falling" won't cut it any more. The sky has fallen before.
Dont want to pick to hard on Mearns, he is doing better than most in writing and discussing,
However, I had the same feeling, the piece was written a little bit too fast and not thought through enough. TOD can do better than that.
Moreover EM kind of replied strangely and chose not to answer some major comments, but at the same time (or later) commented on small things. Hmm...
At the end he seems to agree with the changed quality of the wells, but has only left that in the middle of the comments as a reply (his updated graph where: 1 well horizontal = 3 wells traditional). Maybe, EM, you should update the article with your latest position and info???
Who is "we"?
I have read quite a number of discussion on peak oil and the possible decline of industrial civilization and almost always there was a strange presumption being made: Either "we" collaps or "we" might find an answer. I have always wondered who would fit the definition of "we". JD a while ago argued that "we" would find an escape into space in the end, and there it hit me: Space might theoretically be an escape but certainly not for all 6,5 billion people on earth.
It struck me that surviving flourishing communities might live nextdoor to collapsing communities in the future. Take just a small look into this article:
http://www.reuters.com/article/bondsNews/idUSN1819328820070318
What I want to say with this? That more and more I am starting to believe that what we might experience will not be a collaps in the sense of an event, but more in the sense of a century long decline.
In other words, catabolic collapse. Exactly what Tainter, Diamond, Greer and others (including Leanan) have been arguing all along.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Don't leave out Kunstler. "The Long Emergency" is still the best layman-accessible book on the topic. (See that, JMG? Time to write a book!) It isn't called the "Long" emergency for nothing.
That is what Greer believes. He calls it "catabolic collapse." And he argues that it can actually be the worst possible scenario, in the long run. Basically, because we'll have plenty of time to extract all the resources and totally trash the environment on the way down.
On a global scale it even might be happening as we speak: Just look at the Uganda link. Mind you, I am not totally convinced about a coming collaps, but let's just toy around with the idea.
When a growing number of people become absolute havenots in our backyards, and I mean truly absolute havenots, no housing, hard foodsituation, this might be seen as an exploitable reasource by some.
Whoah! And here I am not being a marxist ;^)
In last Saturday's Financial Times there was an article about slavery
in today's world.
The article mentioned that 200 years ago, when the slave trade (not slavery per se) was abolished in England, a slave cost around $40,000 in today's money - today it can be as little as $200
I hate to mention this, but there does seem to be a loose connection between the discovery of oil in the USA and the Civil War (which was partly fought over slavery).
I guess we will find out when the oil gets really low.
Modern slaveowners go through the useful life of the slave very quickly and pass costs on to the state.
Leanan,
Do you have a link where Greer argues this in detail?
I tend to disagree. Earth's resources are just not sitting there waiting to be snatched. Quite a few economic and technological ducks have to be in a row for resource extraction to intensify and environment trashing to proceed with speed.
For instance, resource use and emmissions in Russia decreased across the board after the USSR gave up the ghost.
If you're interested in this topic I suggest you read today's article - Entropy and Empire. It contains the link you're looking for.
Perhaps you should provide a link to the article?
Edit: allow me: http://canada.theoildrum.com/node/2381
Here:
http://www.xs4all.nl/~wtv/powerdown/greer.htm
Thanks. That was quite an interesting read.
I think the point would be that the easily extracted resources would be trashed. It's sort of a variation of Hoyle's claim that if we fail, no other society will achieve our level of complexity, because the resources won't be there.
Broadly, I agree. However, I'm not sure I'm willing to frame this prospect in tragic terms.
Well, Hoyle was a SF fiction writer as well as an astromer. He wanted humans to expand out into space, as a way to get around resource constraints.
Greer, OTOH...I suspect the archdruid wouldn't have a problem with a less complex way of life. The issue is how we get there. Hopefully not a catabolic collapse that leaves the soil exhausted, the trees cut down, and the rivers and lakes poisoned for 100,000 years.
If knowledge can be maintained, then I can imagine a complex society...just a lot less populous one.
=====================
It's all about population!
I'm sorry to ask that, but how would you define a "catabolic colapse"?
A catabolic collapse is slow. It takes decades, even centuries, and may happen in fits and starts. Gradually, all capital and resources are converted to waste. Societal complexity crashes to below the level that existed before the complex society arose or arrived...but it happens in slow motion.
The EROI problem seems to predict a faster collapse or better a forced change in what we consider civilization. Peak oil pales in comparison to peak EROI we are looking at going from resource that have a 20:1 return to as low as 2:1 thats a tenfold change in energy recovered. This is why I think there will be nothing slow about the collapse. As we have to replace equipment manufactured with cheap oil with stuff developed using low/expensive EROI sources we have to see a pretty quick reduction in the extent of our civilization. Base energy costs act in a way similar to fractional reserve banking compounding in about the same way. It takes a while to figure out why high energy costs have such a large effect on the economy and that it takes time for them to take their toll but if you treat the problem the same as fractional banking/interest/inflation it seems to work in practically the same way but inverted.
The collapse of the American car industry can be directly linked to rising oil costs yet it takes years before the final straw.
ie: Look at the collapse of the Sumarian civilation. It took over 1000 years and was primarly due to the slow poisioning of agricultural land with accumulated salt. Less ariable land supports less population which in turn weakens the assoiciated culture. That's catabolic collapse.
More mortgage news. CNN's breaking news banner:
The city was sold to scrap and most of it made it to China I understand. Since the auto collapse we can't possibly need all those homes....lots of salvage work in that area if you ask me. Matter of fact, I think recycling/salvaging will be HUGE post peak, but I haven't figured out enough details to commit to it with to much time invested in school...damn.
Not if there's no industry to buy it.
I believe it was Newcor steel that changed how steel was made. They buy scrap, melt it and have a lower cost to smelt their steel. In addition, they get long standing relationships by buying the farm land around them and distributing direct to their factory where they can handle the steel. There will be industries who need stuff and whoever has the cheapest cost, will win. Like I said, I haven't developed the meat, but accessing stuff all around us is far cheaper than digging in the ground and burning FF. I'm planning for lots of cheap, laid off workers for my labor pool. Thanks for the point though.
And a video:
I should post more from my finance boards. NEW was delisted last tuesday from the stock exchange. They have been declared dead for roughly two weeks I think. Wait till Wells Fargo starts talking. They are still buying sub prime loans I understand in spite of the recent downturns. They are conservative from those I speak with, so I wonder how they could become the #1 sub prime lender while remaining conservative.
Don't think this one has been posted yet. Seems Iran finally managed to tick off Russia enough to lose their support in the nuclear standoff with America.
http://www.nytimes.com/2007/03/20/world/europe/20iran.html?hp
That story has been noted here.
I wondered if it might have anything to do with the fact that Iran has been discussing long term LNG supply contracts with E.On/Rurhgas, one of the big European utilities. Russia is the major supplier of (pipeline) NG to this group and I imagine is not highly enamoured by the prospect of Iran stealing market share from it..
Maybe a conspiracy theory too far, but Vladimir Putin has frequently (and successfully) shown in the past year that he is unafraid to play the hard-man when it comes to energy
That's a very perceptive remark. I think you're on to something there.
Wonder what Jerome thinks?
From a more macro perspective, it would benefit Russia if Iran were prohibited from developing any nuclear power generation. This would force Iran to use its NG reserves for domestic energy requirements. That would really put Russia in the driving seat for any future OGEC entity (Gas OPEC).
Obviously they cannot support the UN Security Council resolution while helping build Bushehr...
Putin plays the long game, foregoing some revenue from building Bushehr is a small oppotrtunity cost in relation to controlling global NG prices...
I suspect that what Putin wants is not Iran consuming all of their natural gas, but beholden to Russia to move it around. Also, Putin is seeing the wisdom (from his own perspective) of the UN's recommendation that Iran be allowed to build the reactor but forced to purchase enriched fuel from Russia.
In that scenario, Russia wins-wins... by controlling the output of Iranian natural gas and by selling enriched fuel back to Iran. Iran becomes an economic slave state to mother Russia. This is not what the west ultimately wants but it is probably preferable to an independent Iran selling oil and gas under its own control and enriching its own nuclear fuel (whether for reactors or bombs).
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Replying to an earlier comment [red queen ] on Canadian rig count, I might add that there has been a certain apprehension amongst Canadian 'gassy' companies who are income trusts. The government changed the rules regarding taxation of income trusts last November and that, coupled with the major drop in gas prices after the hedge fund speculation bubble popped has led to a reticence to put money into capital expansion projects in the near term.
While I haven't ferreted out many references, the press releases and annual reports of several have indicated a worry that too much money allocated for drilling may hurt the trusts' ability to maintain their distrbutions to unitholders. This situation may persist for a while until the impact of the change in trust taxation rules changes works its way through fully.
I wouldn't read too much into this from a point of availability of drilling prospects, but rather that a certain consensus may be going about in Calgary that a pause while prices reload could be in order to repair or reinforce the balance sheets. The annual reports and recent releases of some of the gassier trusts such as Progress Energy [peg.un] and Peyto [pey.un] may have something on that. They can be found through the Toronto Stock Exchange site, tsx.com. Gas prices are still falling at the moment and I sense that current costs and obligations call for a floor of perhaps $5. The yo yo continues.
http://www.stltoday.com/stltoday/news/stories.nsf/nation/story/AD6F978E6...
Computer Programmer hit delete on Alaska's oil fund.....interesting read...
Hello Tate423,
Thxs for the link. Wait till Wall Street crashes so bad that the money managers cash out, then hit delete on everyones' 401k, IRA, and pension funds to help cover their tracks. That will be a sad day.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
So that's how you make a golden parachute--hit the delete key.
I always did think econ and bus admin was that simple.
Actually it already feels like they are doing their best to make it look like business as usual at the front door as they load your money in the getaway car out the back.
And the car is headed to Dubai!!!
Made my morning....
Found this bit from the Boston Globe McKibben article interesting:
What's up with that?
http://www.berkshares.org/
Some communities are creating local currencies that are not inflationary and based on something "real." For a little more information, check out:
http://www.ithacahours.org/
Leanan, Its purpose as I read the article a few weeks ago was to stimulate growth in the town. Businesses sign up to accept the towns 'money" You get a "discount". Don't remember the exact figure, but I think it was close to ten percent. You pay 100 dollars and get 110 of the towns money to spend. It keeps the "dollars" in the town and it supports the local businesses, instead of traveling to WalMart Sams, etc.
Appears to be legal the way they have it set up. Its not another "currency" technically the way I read it.
If it works probably see more of it.
Thanks for the update on the NG and Canada. The most under reported story in energy imo. If the NE doesn't have a late winter very cold blast, then we will see what happens if there is a huge demand for Air conditioning in the areas that use NG to make their electricity. If so.
Well like waiting for the summer and what will happen in SA and oil output, NG supply does not meet demand and can't fill the reserves.
Wake up call ARRRRGGG X's deux.
Quid Clarius Astris
Ubi Bene ibi patria
Ah, interesting. Yes, if anything is going to be done about the monetary system, it's going to have to be from the grassroots.
Maybe ... but my bet is that the monetary system is well on the way to correcting itself through a well deserved total loss of faith and a resulting meltdown.
Dollars, Euros or whatever only have value because others will accept them in trade for something of value. Once faith in the existing monetary unit is gone its over. If that is what you mean by the "grassroots", I agree.
Giving the power to inflate to the prime beneficiaries of inflation is about as bad a concept as I can imagine.
In Germany there are allready a lot of "Community Currency Systems". It works very well in a ELP environment.
This IS the money future
Roger From The Netherlands
Would you bother to name a few? Just curious ..
I read something on this just recently from the BBC...
http://news.bbc.co.uk/2/hi/europe/6333063.stm
Interesting, thanks. One has to read foreign publications to get informed about that what is happening in the neighborhood ..
I cant find the article but I have read a bit about many southern german towns who have held on to some old ways and adopted SEVERAL local currencies that are valid. You know how everything is getting put on the web and efficiencies are being wrung out of everything? Imagine everything being free market based. We agree free markets make better decisions than govt. What if you had a hybrid govt based on free econ principles? It could be decentralized in a manner the states would like and if you could integrate an invisible hand, imagine how well the world would work....ok back to my real work.
In the article America's Farmers--the Arabs of the Midwest the current corn yield per acre is given as '135 and climbing' (from 90).
I was doing some research on leather shoes in the book 'The Organization of the Boot And Shoe Industry in Massachusetts before 1875 by Blanche Evans Hazard Cornell University 1921' and came across the following paragraph
This was farmed by hand and horse without synthetic fertilizer or GM crop varieties. Are we really do that much better according to the above mentioned article?
A very nice example of how "nature" imposes limits on technology.
Seen an interesting graph of corn yeild in Nebraska since 1886. Long term yeild trend pre 1940 was 25 - 40 bushels per acre.
That 124.5 bushels per acre was a record back then. It's common now, largely due to fertilizers, pesticides, irrigation, and mechanized planting and harvesting. That 124.5 bushels was also optional back then in a world of less than 1 billion total people. It's no longer an option today in a world of nearly 7 billion.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
So wuldnt farming be a GREAT business to be in if you are fully prepared to reduce nearly all FF inputs? I mean lots of demand and poor supply. I wouldn't sell my harvest into the futures market that's for sure!
I reside in Memphis Tn, They are planning on building a large plant here to make ethanol. Access to the Mississippi river with the barges to bring in the product to make the ethanol, and access to water.
However the water, I bet, will not be coming from the Mississippi. It will be accessed from the Memphis water supply, which is a huge underground aquifer. Many companies have moved here to access this water supply over the years.
Whats interesting also is the state of Mississippi is now suing/threating to sue the City/Memphis light gas and water for "stealing" the water. Don't know all the details, but I think it arises from the way the water flows into the aquifer, and I think it routes thru MS before pooling under Memphis.
Memphis is one of the few cities that tap water tastes very good.
When asked what he was investing in T Boone says "water rights".
I wonder about the draw on the aquifer, and what is happening to it. Of course the "white coats" say all is well, consume on.
Quid Clarius Astris
Ubi Bene ibi patria
Im very familiar with Pickens. He said he would warn everyone one time and he did back in 2005 I believe it was. That article got me thinking....
The more I read about oil, the more I realize water is more important. It's the whole limits to growth thing. I mean there is only so much of stuff. Pickens became a billionaire in under 5 years I think starting with like 100M or something. He's got the performance to match his mouth.
"Pickens became a billionaire in under 5 years I think starting with like 100M or something."
That first 100M is a real bitch, though.
True, but his CAGR is phenomenol, which was the point...
We do much much better in terms of bushels per unit of human labor.
From the "Eco-Idiots" article linked at the top:
'This work is speculative and relies on the idea that the sun shows regular cycles of activity on time scales of 10 to 10,000 years and that its heat output and activity are related..."
Let's think about this - a "regular " cycle that varies in time-span from 10 to 10,000 years???
Seems highly irregular to me, don't you think, Spock?...
What a great article, a perfect example of GW denier gibberish. I love the part where he comes up with this convuluted premise that Al Gore is funded by the oil companies. Yikes! I need an aspirin...
Take two---they're small.
Al Gore will be testifying before Congress tomorrow in the AM.
Grist reports on it here.
Gee, I wonder why Bush had a hankering to visit the auto factory today?
Pure coincidence.
Clearly it's just pure coincidence.
Just remember everybody:
"They call it pollution,
We call it life..."
I think everyones gonna remeber that gem as the sea laps at their doorstep
Animal Fats into Jet Fuel
Gives an entirely new meaning to the phrase "When Pigs Fly."
:-P
Using liposuction fat as well has been suggested before, but I have an even better idea: Let people pay for their flight by contributing lipo fat. Just check it along with your luggage. It will be made into jet fuel on the spot, and when the tanks are full, the plane departs. And since the plane will be carrying less weight per passenger, range will be greatly increased. There is of course the danger that checked pets might go "missing".
The cost of that fat is going to be pretty danged high. Lets see,.. cost of removing fat from one human.
Several thousand dollars.
of course we could "innovate" a much cheaper, though I suspect a much more painful way at a much cheaper cost. Though infections and their cost and thelost labor will also have to be considered.
Of course you could donate your body to a company to use it as mulch or jet fuel. Family of 1000 donated bodies receives one seat at the back of the plane, on a domestic flight, of less than 200 miles. Each family could talk about they day they get to fly on the "big bird".
Or if you donate your body to Monsanto for fertilizer,.. you get 10 percent of your body weight back in processed, modified food.
onward and upward in building this great society of innovation and reckless consumption.
Quid Clarius Astris
Ubi Bene ibi patria
I will be happy to donate. How do I sign up?
Is Halliburton telling us the Market is signaling that there is no more profitable $55 dollar oil? Or is the producer telling Halliburton that they think the barrel in the ground is worth more than oil in the barrel? Either way it sez that the returns available at current prices are not sufficient to promote the production.
As WT sez we are entering into the bidding war for the remaining oil and the price at which we are trying to buy it $55-$60 is not generating increasing enthusiasm about investing in production. May have to raise the ante
http://www.halliburton.com/default/main/halliburton/eng/news/source_file...
Cantarell down 18% yoy in February
February production statistics now available: ...
in bpd........................................... Feb 06 ................. Jan 07 .................... Feb 07
Total Cantarell fields .............. 1,911,880 ............. 1,591,381 ............. 1,566,721
Total KMZ (incl "otros") .............. 391,745 ................. 462,247 ................ 495,206
Total Mexico ........................... 3,310,861 ............. 3,142,744 ............. 3,147,628
The bad news is that both Cantarell and total production are down from year-ago levels (by 18% and 5% respectively). In testimony before the Energy Committee of the Mexican Senate in November 2006, PEMEX CEO Luis Ramirez Corzo said that production at Cantarell would decline by an average of 14% per year between 2007 and 2015.
imo we should use 18%, or 1.5%/m, for ghawar collapse assumption, 6% for sa balance. Pretty much matches what happened yoy.
So a 6% total decline rate for KSA. This makes sense they are putting 2% into mothballs for a rainy day and going down by 6%. This would say that they are trying to keep 2% or better in spare capacity. By better I assume its slightly additive although they would be cycling more wells back into production to offset decline. In all they must be trying to keep at least 500kbpd in reserve at all times so they at least have some leverage. Maybe as high as 700kbd. 8% is a bit steep but a 5-6% overall decline makes more sense. The trick in a sense for them is to drop their production faster than their decline rate so they can show a rebound later. If this is true then we should expect there production to continue to decline over the next month or two. If they are really constraining production then the decline should stop cold now since its served its purpose. They may not raise production but we should see the decline stop now.
No, I don't believe that Chavez all by himself accounts for all the financial "upgrading" for heavy crude. Anyone?
I believe that Cantarell produces heavy crude. The decline from 2/06 to 2/07 was 345,000 bpd. David Shields expects the decline to accelerate to about 500,000 bpd per year (on a month to month basis, not average production per year basis). I was expecting the spread between light/sweet and heavy/sour to narrow as the Cantarell crash kicked in.
You know, discussing Peak Oil was more "entertaining" (I suppose is the closest word) when it was more theoretical. Somehow, it is all getting a little too real.
On some level, I suppose we are all in Peak Oil Denial. We graph it, we discuss it to the nth degree, but we really don't think that we will actually see refineries curtailing their operations, because of a lack of crude oil, and gas stations running out of gasoline, and suddenly it's no longer a given that you can drive across town to the grocery store without giving a second's thought to whether you can get gasoline, or whether you can afford the trip, or whether the grocery store is fully stocked with food. Or, if you can afford to buy food and gasoline, whether you should be worried about the hungry looking guys on the street corner.
Somehow it is all getting a little too real.
Indeed, and I feel like I didn't get started ELPing soon enough...
Jeffrey,
I think this is precisely why I am on your side in your debate with Robert. He sticks to what we have learned to see as the "scientific" approach, whereas you are more inclined towards interpreting the science.
Broadly speaking, the result of that difference is that you are willing speak out when you're 85% sure, while Robert wants 95% or more certainty.
But we no longer recognize that what we think is science has lost its precautionary principle, and the scientific method has often become an excuse for inaction. "Wait till we know more, we need more research."
This misguided interpretation of what constitutes science (the need to be 100% certain) has already deprived us of the option to fight climate change with anything else than extremely drastic measures. Hybrid cars, biofuel development and emissions cuts are useless now, they're 30-40 years late.
The exact same thing threatens to happen with peak oil and peak energy in general. For all we know, it may already have. This is not to say that Robert is wrong in principle or theory, but he is in practice.
If there's a 50% chance that a brick will fall on your head in a minute, you get out of the way. In the case of our bigger questions, GW and PO (and don't forget Great Depression 2), we simply ain't moving.
And we say we do that for scientific reasons, and claim there's credibility to be lost. The fact is, there's a lot more than credibility at stake.
PS one of the best Peak Oil articles in a long time, a good fit with your Titanic story, was in yesterday's Drumbeat,
Iceberg Dead Ahead Captain
Broadly speaking, the result of that difference is that you are willing speak out when you're 85% sure, while Robert wants 95% or more certainty.
One thing has become clear to me. Regardless of how often I explain my actual position – and this has probably been done on this board 50 times – people are going to put this sort of spin on it. I guess that’s what I get for expecting people to take time to listen to what I am saying.
PS one of the best Peak Oil articles in a long time, a good fit with your Titanic story, was in yesterday's Drumbeat,
I have my own Titanic story in the essay I just wrote. I threw subtlety out the window in the hope that people would come to understand my position. After that, I am through repeating it. If you think I am unwilling to speak out until I am 95% sure, then more power to you.
I'm at a loss to see what the difference between what Jeffrey is advocating vs. Robert. Let's see...peak oil, conserve, advocate for change, both are out there looking for oil...
Everybody here agrees that there is an iceberg dead ahead (although some may disagree that the ship will necessarily sink). But yelling out "impact in 5...4...3...2..." -- and then nothing happens -- is a mixed bag. Yeah, you might get attention and maybe sell some books, but the message doesn't stick because you were wrong. It's not just a matter of principle.
I think you are jumping the gun on this one. The price of oil has been falling for the last 8 months and has not exceeded $62/barrel for several months now. It will get real when price of gasoline exceeds $8/gallon and sporadic shortages cause the supply chain to get unreliable.
I think it will take around 5 years to get there. Hopefully they will be making a lot of plug-in hybrid cars by then!
Exports, Exports, Exports
If all we had to worry about was a slow decline in world crude oil production, I would agree with you, but from an importers point of view, I think that we are looking at what is effectively a crash in production, e.g., Mexico's oil exports were down by 23% from 1/06 to 1/07.
IMO, we are probably looking at a 50% or more decline in net exports by the current top 10 net oil exporters, within five years.
In that case, the price of oil should be skyrocketing. It has not happened yet. How soon do you think the proverbial s*** will hit the proverbial fan? Do you think it will start as early as this summer?
I think that it is beginning to happen now, since we have been drawing down OECD crude + product inventories at a pretty furious rate.
It is not an encouraging sign when the second largest source of crude oil imports for the US (Mexico) is curtailing and canceling outright crude oil deliveries to Gulf Coast refineries.
WT you are an essential element here.
I for one must believe that for as many times as you try to bid us adieu that the number of that failing is always at least as many.
Jeffrey,
I know a great many people share the view I'm about to express. You will not hear from people that don't have accounts, nor from many people like myself that simply don't have enough time to post. But know this: there are more people passing through TOD ether that greatly appreciate your views than not.
I don't have enough context to judge exactly what (from whom) you mean by your powers that be comment. Do what you deem best. But trust me on this - your absence would be missed by a great many people.
Hi Jeffrey,
I'm glad you're planning columns. Could you post links here?
It's messages like this that bother me. I was planning to take a vacation from "drumbeats" (I have to). But...what's going on?
Is there not some translating we could do between offended parties? (whoever they might be?)
I can't imagine Robert is offended, as you and he are a team (of sorts).
Also, I thought we were just getting to the point of having some good ideas about how to come up w. something about the "model".
In other words...Please...no adieu(s).
I can't imagine Robert is offended, as you and he are a team (of sorts).
Just to set the record straight, I have lodged no complaints with anyone.
Thanks for your ELP advice. I've lurked here regularly since Katrina. Of all the informative posts I've read here, yours were the ones that spurred me to action. As of TODAY, with the payment of our final mortgage pmt, we are now 100% debt free. That wouldn't have happened without PO awareness, and your practical advice. Thanks
Standing Clapping. Good Going.
In the process of the same myself.
Closer.
You know, oil HAS skyrocketed. It's up over 500% from its 1990s lows. Why does it have to "skyrocket" any more than it has?
I've asked this question before and nobody has an answer - but how many poor oil consumers are driven out of the global market by each $1 increase in price? How many would be driven out by a jump from $60 to $80? Given that number driven out, how long can the party go on in the wealthy nations for whom that is but a drop in the bucket?
What you do not realize, regardless of your personal status in life, is that if you live in the United States your standard of living is almost certainly better than 80% of the rest of the world, and that's at its worst! At its best, you are living at the very bleeding edge of society's "haves" while the "have nots" go hungry.
Everyone thinks oil has to skyrocket without realizing that for 75% of the human race this has already occurred. Take off your blinders and stop thinking in USA only terms.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
I agree completely, but would like to add one thing.
The US Dollar has fallen dramatically during the last five years, causing any increase that Americans feel to be exagerated in comparison to those who earn their living in Euros, and purchase their gas in Euros. When oil tripled in dollars it "only" doubled in Euros, thus the effects are not being felt as severely by the other rich nations who for the most part are accustomed to paying high prices already.
Further relative strength in foreign currencies will only serve to enable the rest of the world in the bidding wars to come.
Why $8 per gallon?
A friend in So. California says gas is the most expensive she has ever seen it there. She was always bragging before that where she lived, near Long Beach, it was cheaper than the rest of CA. Yesterday she said it was 3.07 for unleaded regular. She is making plans for working from home as much as possible. Fortunately, her employer, Boeing, is very open to telecommuting.
I think you will find that it gets real long before $8.
Why $8 per gallon?
Because people in many European countries pay close to that amount so I don't see why Americans should have a hard time paying that much. Of course they will have to spend less on other things, but so what? Americans spend $450 billion on Christmas presents every year and $300 billion on importing oil. Even if the oil import bill doubles, we can afford it as long as we cut back on Christmas presents :-) And when it comes to a crunch, people will buy small cars, combine errands, cut back on vacations, etc.
I don't think as long as gas is below $8/gallon we will have empty shelves in supermarkets and physical scarcity.
Suyog: IMO, the first area where problems will arise is trucking. The average mpg of transport trailers is very low (I believe it is 6 mpg) and the industry is struggling at $2-$3 in the USA.
Lets see. 150 billion gallons/year gasoline. Extra $5/gallon. Total $750 billion dollars.
US GDP. Say 12 trillion. The increase in gas spending is about 6% of GDP, which will no longer be available for other purchases. I would guess that this will result in at least doubling the unemployment rate in the US, which would be more than enough to put us into major recession/depression, further spiralling us down.
No, the US cannot pay $8/gallon without totally crashing the economy.
Carter is not president, and it is not likely that gas stations or grocery stores will run out of supplies because we will not resort to rationing. However, price may climb to the point that many reduce consumption.
Is this possibly related to what you guys were talking about yesterday in reference to the strangeness in the oil futures market?
So, everyone and their cousin seem to be filling up SPR's these days (China, India, US). With oil at $60, they must think it's pretty cheap...
CW
Global peak: 2007 - 2010
Global decline rate, Post peak: 2%
Economic response: Severe global recession, ~5 years, then slow recovery
Interesting comment on another board
http://boards.fool.co.uk/Message.asp?mid=10461194&sort=whole#10461266
"When word of a crisis breaks out in Washington, it's no accident that the first question that comes to everyone's lips is: 'Where's the nearest carrier?'" (Bill Clinton)
When it comes to Bush's plans for Iran (and hence the flow of oil through Hormuz, aside from Iran's own production), instead of 'follow the money', might I suggest that you 'follow the carriers'? And what's happening now is really quite unusual. As has been already mentioned, in the last few weeks we've seen two carrier groups in the region for the first time since the attack on Iraq, the Eisenhower and more recently the Stennis.
Bearing in mind that the US 'only' has 11 big carriers, it's worth looking at where the rest of them are :
CVN-76 Reagan - active in the Philippines as the carrier guarding Japan/Korea/Taiwan
CVN-68 Nimitz - leaving San Diego "in April", notionally to relieve Ike in early May??
CVN-65 Enterprise - "Surge-ready" now, ahead of a deployment from Norfolk later in the year? Only got back from Gulf on 18th November
CVN-75 Truman - In Norfolk, surge-ready from next month - would go before Enterprise?
CVN-72 Lincoln - in Seattle, refit finishes on Monday so surge-ready when?
CV-63 Kitty Hawk - Started maintenance period "smaller than last year's" (which lasted 6 months) in Japan on Jan 8th
CVN-73 Washington - towards end of major refit in Norfolk ahead of move to Japan next year - surge ready when?
CVN-71 Roosevelt - started 9-month refit earlier this month
CVN-70 Vinson - big mid-life upgrade and refuelling, ready in 2009.
[from http://www.news.navy.mil/local/cvn68/ etc and http://en.wikipedia.org/wiki/Category:Active_aircraft_carriers_of_the_Un... ]
It's interesting that it's the 'deep reserve' Kitty Hawk and Lincoln that have had recent stories of sailors being used to do contractors' jobs in the interests of getting them ready more quickly. For instance, Lincoln's sailors painted the whole ship at night and on weekends whilst she was in dry dock recently, rather than waiting for contractors to do it as normal : http://www.news.navy.mil/search/display.asp?story_id=28368
I can't help thinking that what's happening in the Pacific is the key to all this, as they have to have at least one carrier near Japan/Taiwan/North Korea, a role normally performed by the Kitty Hawk based in Japan. It's not clear when the KH will be ready other than 'before July', but the Lincoln could be surge-ready in the area by May. Not clear when the Washington will be ready, I suspect it won't be until the autumn.
The circumstances of the Reagan's departure from San Diego on January 27th are a bit weird :
http://www.reagan.navy.mil/reagan_news/news_releases/07news_releases/005...
"Ronald Reagan will be filling the role of USS Kitty Hawk...as it undergoes scheduled maintenance in Yokuska, Japan....
According to Capt. Terry B. Kraft, Ronald Reagan's commanding officer, the ship was made ready for the unscheduled surge deployment..."
Hmm - anyone see the discrepancy? :-) It's kinda interesting that the Reagan's 'unscheduled' departure from San Diego was three weeks after the KH started a 'scheduled' maintenance, and the two possible covers for it are being rushed through the docks. I must admit, I've only just found that press release, and I'm gobsmacked by it.
There is also the interesting observation that a new guy has just been put in charge of the US forces in the Middle East. For the first time ever, the regional commander is from the Navy - but William Fallon is no sailor, he flew Intruders in Vietnam. Carrier-based bombers.
Obviously the above doesn't mean that the US will attack Iran. But if they wanted to, then they already have more means to do it than they have been in years, let alone once Nimitz arrives. Now it could be argued that they need one carrier just to support operations in Afghanistan, although at a pinch that could be satisfied by land-based aircraft, Harriers from the two amphibious carriers in the area, and NATO support. So that lot might free up another US carrier, which would give them three in the area once Nimitz is there, two in Norfolk that could be there by May, and the Reagan which could be there in a week once either the KH or Lincoln could cover Japan - again May???
The next biggest Western carrier is France's Charles de Gaulle. She's due another 18 month refit in the summer, but guess where she is now? Arrived off Iran last week. Funny coincidence that.
Even more interestingly, the French started a crash programme in December to enable their Rafales to drop LGB's (http://www.aviationweek.com/aw/generic/story_generic.jsp?channel=awst&id...) despite not yet having laser designators themselves. The Rafales can carry Scalp missiles (aka Storm Shadow, like baby Tomahawks) although the French don't yet have the capability to plan a route for them (haven't they heard of Google Earth? :-)) ). Anyone get the feeling that they're not quite ready for this?
As for the RN - HMS Ocean was due for a refit this spring, but instead is just off out, destination unknown (?) having taken part before Christmas in the RN's biggest amphibious exercise for five years.
Following an 18-month upgrade ending last year, Ark Royal was due to take Ocean's place as the amphibious support carrier and has been busy training. Illustrious came out of maintenance six months ago and has been training with RAF Harriers. She'll be one to watch - if my theory's right she might set off in the next six weeks, with Ark Royal coming off the subs bench in the summer.
Relevance to this board? Well it could all blow over of course, but if they're ever going to hit Iran, they're shortly going to have a window of opportunity of 2-3 months with miles more firepower than the area has seen for four years. Not just yet, it just feels like it will all come together in May - gets a bit hot going into summer of course, although that's less of a problem if there's no boots on the ground. So I'd suggest the people on the other side of Bert's contango are looking at the number of Tomahawks being lined up off Iran over the next four months - and aren't especially bothered about the contango over 12 months.
In particular I wouldn't want to be short once Nimitz is in the area, although if they're serious I'd guess the Truman or Enterprise would also (boldly?) go. On the other hand, the departure of the Eisenhower from the Gulf would be a signal that things were calming down - although it would take the departure of the Stennis (in August??) to really convince me. The disposition of the British carriers would also be a pointer, that might be easier to scuttlebutt.
So sure, this is all couldawouldashoulda armchair admiral stuff. On the other hand, it goes to show why so many people are prepared to accept that mega contango for a few weeks (not 12 months) of pain. I'd suggest that the shorters enjoy the next few weeks whilst the good times last - but at least think very hard about their positions in the 'whatif' event that the US carriers are not lined up in the Gulf of Oman just to top up their tans.
And not for the first time, you have to ask the question - what the hell is Reagan up to?
"...it just feels like it will all come together in May"
May, hmmm, What's happening in May? Oh, that's right Hugo Chavez nationalizes all of Big Oils asset's in Venezuela.
Couldn't have anything to do with that could it?
/me hands out tin foil hats . . .
just for interest when do peoples models predict that the oil supply imballence is expected to occure this year - we could be heading for a "investors are worried about a potential situation with regards to the oil supply in iran" price spike this summer (winter here in australia)
Purdue University chemical engineers claim an environmentally friendly process for producing liquid fuels from biomass could provide all of the fuel needed for the entire US transportation sector.
http://www.e4engineering.com/Articles/298627/Boosting+biofuel+efficiency...
If I can paraphrase: "As long as you don't count the energy that goes into making the hydrogen, the process is much more efficient"...
Scientists are terrible economists, alas...
CW
Global peak: 2007 - 2010
Global decline rate, Post peak: 2%
Economic response: Severe global recession, ~5 years, then slow recovery
Hello Oil Drum:
I am aware that we are in dire need of alternative energy sources to replace our dwindling gasoline supplies. As such, I have a couple of questions to posit:
1. What is the EROI of your average modern PV solar panel? This figure must include energy used in manufacture, transport, installation, etc.
2. What is the EROI for one of those newer Stirling engine powered reflectors? How about a wind turbine?
3. Where in the world is Carmen Sandiego and/or Waldo?;-)
I think that answering the first two questions would be an interesting experiment of whether we, as a species, are even capable of keeping a decent sort of civilization going after oil becomes scarce. If I am correct, as things are currently run, all of these items must be built using oil based MFG.
I have no idea, but I do know that zero PV factories are run with PV power. Also, zero ethanol factories burn ethanol to distill their product.
"I do know that zero PV factories are run with PV power. "
You've said this before. Do you actually know it, or are you just saying it?
Oh.. you were just saying it..
(and it was the first hit on my 3-word search, ya smarmy bugger, ya!)
"11. Solarex made their PV factory solar powered, so creating a 'solar breeder'. "
http://www.biothinking.com/solarfactories.htm
There are some great signs of solar progress on that page.. nice to see.
That there was a skinny branch to climb out on, capslock.. be careful out there!
Bob
(You can look up the ethanol one as your penance.. I'm not really that curious about it, but I'll bet someone is trying it)
apologies.. Bugger was inappropriate.
please replace with 'goofball' .. nice, mild and offensively inoffensive.
RRF
Applied Materials is putting up one of the largest roof mounted solar systems ever installed on a commercial building. Apparently it will power a good portion of their plant.
as far as 'As things are currently run' , I would offer the unsurprising idea that of course all Manufacturing and Transport of Raw and Mfd Materials today is heavily if not entirely based on the presence of Petroleum energies and feedstocks. We will have to find ways to run them differently.
I understand the lifetime EROEI of PV to be in the range of 10 or more, which seems decent to me. (and a payback of 'embedded energy in as little as 18months.. DOE). I guess wind would have a pretty broad EROEI range, with the various scales and types of turbines, and I hold out some hope for using the shapely coastline of Maine and other places for various forms of Tide and Wave power. There will be biomass fuels, Solar Sterlings, etc etc.
The question I ask is what are the lynchpin materials and processes that may constrain these technologies to only really be affordably managed within an Oil Economy? Purifying Silicon is very energy-intensive, but will work with electricity. How about mining, refining and moving the other (Gallium?) needed ores? ('Impure Silicon' itself is extremely common.. 2nd most in the crust, I think?) But you do need other materials to create the Photo-diode effect within the layers of Silicon. Copper Supply, Insulation (often rubbers and PVC plastics, for many electric wires.) Can we keep up the supply of these things? This is one great concern for me with Nuclear, which requires a complex set of conditions and supplies to remain stable and safe. (Refined Fuels, Highly Trained Engineers, Large political and industrial economic supports, Security considerations)
Wind, Hydro and Solar Heat power can all be made at home, as well as by a large shop or a massive factory-complex, using anything from junk materials (from a tech society) on up, so I don't think they are entirely dependent on an oil infrastructure to continue to grow and allow resourceful neighbors to 'get by' at least, in increasing numbers as Petrol leaves us.. and some of it (Wind and Hydro presently) have clearly shown that they can produce sufficient energy to power large industrial equipment.. so why wouldn't we have at least a chance to continue to pursue the development of these, the 'Hippie Alternatives'?
Bob Fiske
here's a great listing of Tide/Wave techs that have been designed/possibly tried..
http://peswiki.com/index.php/Directory:Tidal_Power
Note: Some sections of this site make Overunity claims and mention dangerous themes such as 'Free Energy'. This poster used a polarized mental filter to avoid excessive exposure to 'Overhopeful' variations of science. The tidal power page has some interesting designs, though..
So lets see its rising tumbling and staying flat for three different reasons according to the MSM.
re: the costs of switching to "environmentally friendly" cars
http://clubs.ccsu.edu/recorder/editorial/print_item.asp?NewsID=188
a Prius is potentially less environmentally friendly than the hummer due to the extra cost of manufacturing (mostly in terms of the nickel in the batteries).
(also a slashdot story)
edit:
This article is probably contains a moderate amount of mis-information such as:
The nickel can be recycled, in a smiler manner to which the lead within Pb-H2So4 batteries can be recycled. or it can be passed on and used within other processes, offsetting the need to mine nickel for that process. This results in a minimal (direct) environment impact from using nickel.
Secondly it is not known if the cost of fuel is included in the cost/kilometer-liftetime calculation.
Third, the environmental impact of the nickel mining at Sudbury is not as bad as made out. (wikipedia on saudbury)
(edit again)
4th: they use a quite short lifetime for the preus - 1/3 of the hummer
so all up i would say this is a load of FUD.
Hello TODers,
Hopefully, all FF-corporations will spend the necessary safety & maintenance funds to prevent future refinery explosions.
http://www.nytimes.com/2007/03/21/us/21explode.html
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An explosion and a fire that killed 15 contractors and injured 180 other workers at the giant BP oil refinery in Texas City two years ago was caused by company deficiencies “at all levels,” a federal safety panel reported on Tuesday.
Ending its investigation of the disaster, which sent 43,000 people fleeing to indoor shelters and resulted in more than $1.5 billion in financial losses, the Chemical Safety and Hazard Investigation Board found that safety measures at the plant repeatedly fell victim to cost cutting — even after 23 accidental deaths at the plant in the 30 years before the explosion on March 23, 2005.
The consultants found “little organizational stability” and said they had never seen such “intensity of worry” about a catastrophe “by those closest to the valve.”
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If the executive offices were physically located in the middle of this infrastructure--it would have never happened.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Hello TODers,
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The Lords of Narc
MONTERREY, Mexico — American-trained, high-tech special forces units have turned to the dark side here, using their skills to protect and enforce Mexico's drug lords instead of their native government.
Calderón cannot afford to lose. And neither can Mexico.
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http://daily-times.com/ci_5483589
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I started hearing about this last year and from what I recall, these guys were trained at the renamed School of the Americas where we train shady characters to go back and "help" their govt's. These guys are armed to the teeth and are fully prepared to use it. Those guys on the border dont get it but it doesnt matter. The people and drugs will find their way into this country. Its called inelastic demand.