DrumBeat: May 14, 2007
Posted by Leanan on May 14, 2007 - 9:05am
WTI Benchmark Temporarily Breaks Down: Is It Really a Big Deal?
Since the adoption of formula pricing in 1986, West Texas Intermediate (WTI) has served as one of the main international benchmarks, along with Brent and Dubai, against which other types of crude oil are priced. While Brent remains the dominant benchmark for oil pricing outside the US, the latter’s oil imports are usually priced off WTI. In principle, the movement in WTI prices is supposed to reflect supply-demand conditions in the US, the largest consumer in the world, burning more than 20.5mn b/d of the 84.5mn b/d consumed worldwide in 2006. But the recent disconnection of WTI from the other benchmarks, resulting in WTI trading at large discounts to Brent, revived the debate on whether the WTI benchmark has been ‘broken’ and whether oil market participants should adopt another benchmark that better reflects the supply-demand balance.It has long been recognized that the link of WTI prices to other international benchmarks and to oil prices in other US regions is partly dictated by infrastructure logistics. The recent behaviour of WTI prices is a clear example of how pipeline logistics can dislocate WTI not only from the rest of the world, but also from other US regions.
Matthew Simmons has posted some new presentations at his Web site. (PDF)
● The Peaking Of Offshore Oil And Gas: Is The Party Over? Or Just Beginning To Get Exciting?
● Is Hydrocarbon Energy Entering Its Twilight Age? (If So, Can The World Survive?)
Kurdish Leader: Oil Law Is a Deal Breaker
To Iraq's Kurdish leadership, the issue of how to apportion the third-largest pools of oil in the world is "a make-or-break deal" for the country as a whole, a top official told United Press International."The oil issue for us is a red line. It will signify our participation in Iraq or not," Qubad Talabani, son of Iraqi President Jalal Talabani and the Kurdistan Regional Government's representative to the United States, said in an interview from his Washington office.
Red light shows on South Africa’s fuel gauge
IN THE next 10 years, SA will depend increasingly on fuel imports to sustain economic growth. It means substantial investment in fuel storage and handling, transportation and refining. Putting it plainly, our refineries are operating at full capacity; our road and rail transport systems for carrying fuel are stretched to the limit; our pipelines are too expensive and too few; and our roads are crumbling.
Nepal still facing petroleum shortage
Panic over poor availability of fuel continued throughout the country, as Nepal Oil Corporation (NOC) pumped out limited supply of oil amid the Indian supplier IOC's silence over issuing normal supplies to Nepal, local media reported on Monday.
Indonesia: Fuel shortages keep fishermen from going to sea in Lombok
Hundreds of fishermen in Lombok, West Nusa Tenggara, have been unable to go to sea for the last four days due to a fuel shortage in their area.
Scandal Again Looms Over Mexico’s Oil Company
One worrisome problem, due to its potential impact on the national economy, is a possible new scandal in connection with Mexico’s most important state-owned company, the oil and gas conglomerate Petroleos Mexicanos, or Pemex. This involves former Pemex officials, including Fox’s director general Raúl Muños Leos, as well as members of the 100,000-plus Oil Workers’ Union — economically one of Mexico’s most powerful unions.
U.K.: Brown to build five eco towns
GORDON BROWN will attempt to trump David Cameron on green issues by announcing that he will create five new environmentally friendly towns when he becomes prime minister.
When it comes to giving up our cars, government must drive a better bargain
I suffer from "car brain" every time I am handed car keys. I lose all sense of logic. Somewhere deep in the reptilian core of my brain, lizard-thinking takes over. When car brain rules, any vague feeling of goodwill I have towards the environment evaporates. I enter a persistent vegetative state where I avoid walking and public transport at all costs.
Weaning the U.S. off foreign oil: Higher fuel efficiency is first step
Wouldn't it have been great if President Bush, or some leader in this country, had turned the Sept. 11 tragedy into something we all know should have been started decades ago: America's determined march to energy independence? None of us would have opposed such a campaign at that time. By now, 51/2 years later, we would have made substantial progress.
From a big fat tax to more efficiency to boosting production, there are ways to do it - but which really stand a chance?
Price and availability remain the bane - and the hope - of E85.
U.S. loans for coal plants clash with carbon cuts
A Depression-era program to bring electricity to rural areas is using taxpayer money to provide billions of dollars in low-interest loans to build coal plants even as Congress seeks ways to limit greenhouse gas emissions.
Australia: Public purse props up fossil fuel industries
Government support for the coal industry and coal-fired electricity is so generous that in some cases it has led to the construction of coal-fired power plants when other types of electricity generation would have been cheaper, the report by the Institute for Sustainable Futures at the University of Technology Sydney has found.
Deforestation: The hidden cause of global warming
In the next 24 hours, deforestation will release as much CO2 into the atmosphere as 8 million people flying from London to New York. Stopping the loggers is the fastest and cheapest solution to climate change. So why are global leaders turning a blind eye to this crisis?
Saudi Aramco to Reduce Arab Light Oil Exports to Asia in June
Saudi Aramco, the world's largest state oil company, will cut Arab Light crude oil exports to Asia for the first time in at least three months as part of an overall supply reduction to the region.The Dhahran, Saudi Arabia-based oil producer will lower shipments starting in June, said three refinery officials who received notices and asked not to be identified because of confidentiality agreements. The producer has been reducing Arab Medium and Arab Heavy sales by between 9 percent and 10 percent of total contracted volumes.
AP Moller Maersk North Sea oil, gas production falls yr-on-yr in April
P Moller Maersk said oil production at its partly owned Dansk Undergrunds Consortium (DUC)'s 14 oil fields in the North Sea totalled 275,700 barrels per day during April, down 7% from a year earlier.The production of gas reached 495 mln cubic metres, down 42% from a year earlier.
Crude Oil Rises as U.S., European Refineries Report Incidents
Crude oil gained for a third day after incidents at refineries in Europe and the U.S. raised concern gasoline might run short this summer....U.S. stockpiles are the lowest for this time of year in 16 years and gasoline may remain the "primary driver" of oil prices, the International Energy Agency said last week.
Are world oil prices about to repeat last year's surge to record levels?
Climate change drives farm revolution in Australia
Farmer James Fagan uses satellites to guide his tractor when it plants his crop in the heart of Australia's drought-hit eastern wheat belt.His tractor, working on autosteer and guided by satellite technology, plants the length of the paddock in lines so straight that every centimeter of land is utilized for growing crops.
The Fagan farm, 250 kilometers (150 miles) west of Sydney, is among a growing number of Australian farms that have turned to advanced technology to fight the effects of climate change which threatens their annual crops.
"We're on a knife-edge," James' brother Ed said. "This was a pasture and its just been destroyed over the last five years because of the drought," he added.
One billion to be displaced by 2050, global warming a factor, group warns
At least one billion people risk fleeing their homes over the next four decades because of conflicts and natural disasters that will worsen with global warming, a relief agency warned Monday.In a report, British-based Christian Aid said countries worldwide, especially the poorest, are now facing the greatest forced migration ever -- one that will dwarf those displaced by World War II.
World's city mayors eye climate change at New York summit
Mayors from more than 40 of the world's largest and most polluted cities are to open a summit here Monday in the hope of agreeing on ways to tackle climate change and promote the use of clean energy.
Interview with Opium for the Masses, an Intelligent Band for Discerning Listeners
We are facing an inevitable energy crisis where industrialized nations are fighting over the table scraps of the 20th century. Peak Oil is coming in the next few years (if not already), and we have no energy plans to replace our huge consumption of fossil fuels. America, with its 5% of the world population, consumes 25% of its fossil fuels. No matter what energy companies or the government says, there is no replacement to America's energy consumption. Our economy is directly tied to energy and its availability. This is why we are in Iraq, it's a resource war. If competition heats up amongst industrialized states, resource wars, of larger scale, may be coming.
Almost everyone agrees Australia must reduce its greenhouse emissions.How we should achieve these reductions is the main point of debate.
Preferred policies involve laundering carbon or uranium.
But inevitably, attention must turn to our energy consumption and its accepted role as a generator of greenhouse emissions.
Bahamas: Blood, Oil and War
Today we wish to bring one fact to the public’s attention. We underscore the point that promises always come with price-tags.And for sure, there are prices over which we - as Bahamians - have absolutely no control. It necessarily follows that those who make promises should make sure that they can truly deliver.
We make this observation as we note that we have no control over the price we pay for oil. We make this observation as we take note of the relation between the fight for oil, war in Iraq and other atrocities around the world. As we see it, quite a few of these struggles are all about oil.
India to quit Indo-Myanmar gas pipeline project
Oil and Natural Gas Corporation Limited (ONGC) has decided to leave Indo-Myanmar gas pipeline project following Chinese influence on military administration in Myanmar. According ONGC officials, opposition from Bangladesh for laying pipeline to transport gas to India from Myanmar via North Eastern states and West Bengal upto central India was the main hurdle for ONGC to carry out the project.
Ghana: President Kufuor in lights-off blues
President J. A. Kufuor was at the receiving end of the bitter side of the current energy crisis last Friday when his security men had to shove off people in the dark on three different occasions when there were intermittent power cuts during the commissioning of the Volta Star Textiles Limited formerly Juapong Textiles.
Southern Africa states ratify agreements over energy crisis
Member states in the Southern African Development Community (SADC) have signed agreements that seek to tackle energy problems in the region.
Slovenia to Contribute to EU Energy Supply Warning Scheme
Attending a meeting of the EU Network of Energy Security Correspondents (NESCO) on Thursday, 10 May, Franc Zlahtic of the Economy Ministry told STA that Slovenia's role in collecting data across the EU and pointing out possible energy crisis situations would be foremost in keeping an eye on the gas end electricity transfer network.
Ghana: Energy crisis renders over 2,300 workers jobless
Thousand of Ghanaian workers have lost their jobs since the current energy crisis began in August 2006, according to statistics at the National Labour Department....Quite expectedly, the manufacturing sector, which heavily depends on electricity, tops the list with about 60% of all companies that declared bankruptcy within the period.
Sources at the NLD explained that these companies range from textile, pharmaceutical, mining, construction to hospitality industries.
BC's Billion-Dollar Wind Power Giveaway
We're heavily subsidizing private power developers. Will Californians profit big?
WHO'S AFRAID of Big Oil? Apparently, California's elected officials. Gasoline prices are stuck well above last year's record highs and about 50 cents above the national average. Yet state politicians are not saying or doing a thing, except for raking in political cash from the oil companies and flying around the world on their dime.
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"Like many hard-headed Australian farmers, James Fagan is skeptical about dire warnings of global warming by scientists and politicians. "
Seems like all the US Fagans say that, too. :-(
Sorry, was that hard-headed or thick-headed?
25 Pictures of the USA in 1940
Even more Pictures of the USA in the 40's
Roger from The Netherlands
Chrysler sold, Ford up next
Members of Ford Motor Co.'s founding family are discussing the sale of part of their controlling stake in the money-losing automaker, three people with direct knowledge of the talks said.
The value of the shares has plummeted to $584 million from $2.3 billion since Bill Ford, great-grandson of the founder, became chairman eight years ago. The automaker eliminated dividends in September, wiping out about $85 million in annual income the family received as recently as 2001, when the shares paid a 30-cent dividend.
Ford shares rose to $8.46 today in trading in Frankfurt after DaimlerChrysler AG said it will sell 80.1 percent of its Chrysler Group to Cerberus Capital Management LP.
the dog that guarded the gates of hell will be "guarding" uaw pension fund ?
A posting by Charles Stross of a lecture he gave is particularly interesting for what he says about transport.
Which introduces the idea of transportation rationing not by distance, carbon, or any other metric - but by time taken.
Now you could say air travel is already doing a good job of increasing time wasted by 'security' at the airport, and multiple occupancy lanes increase time taken on the roads for those travelling wastefully (but also waste fuel). Maybe there is scope for similar developments elsewhere ?
8am: Shower. Save the water. Save the planet
http://news.bbc.co.uk/2/hi/uk_news/magazine/6635759.stm
Interesting idea.
From the link on Saudi cuts above:
The world is calling on OPEC to increase production because of the expected summer crunch. But OPEC says they will do nothing until they meet in September, then decide.
Yet in the meantime Saudi continues to cut, piecemeal style, a little bit almost every month since their peak in the summer of 2005.
February production of the original OPEC-11, was down 1,950 million barrels per day since their peak in September of 2005. Yet Saudi continues to cut...and cut....and cut. But of course all these continued tiny cuts are all voluntary! Right Robert?
Ron Patterson
One thing I don't understand is how are the Asian refineries making up for the reduced supplies? If they buy more oil on the spot market, shouldn't that cause spot prices to go up a lot?
I think so. The Dow Jones version of this story said:
Thanks. That makes sense.
But the Saudi's have been cutting supplies to Asian refineries since November last year. I am wondering how they have coped with reduced supplies so far. There are no reports of fuel shortages from countries affected by the cutbacks.
Prices have gone up in Asia and Europe.
And some have said that the Asian refiners can't handle heavy crude. There was that story about China rejecting some shipments because their refineries couldn't handle that much heavy sour. So maybe the cuts were not that big a deal.
The interesting thing is, for the first time, Saudi Arabia is cutting back the light stuff, too.
Yup! That is the key!!
So far the cuts were for heavy or medium grade crude. Now they are beginning to cut the supply of light grade crude. The next few months should be interesting.
News.google- Asian Fuel Shortage -and get a different opinion. Or better still just news.google Fuel Shortage because it is a worldwide problem.
Fuel is being diverted from Africa, (those unable to pay higher prices) to Asia, (those able to pay higher prices).
Hey, think about it. You say they are buying more oil from the spot market. The Asian spot market is simply tankers willing to sell to the highest bidder. If some Asian country outbids Zimbabwe or wherever for oil, and averts a shortage in that part of Asia, that just means the shortage is shifted to someone else who could not afford to bid high enough.
Ron Patterson
The African countries, are they bidding on spot crude or do they bid on refined product? Do they have their own refineries, or do they bid on crude that is later refined in a third country?
I just watched the very excellent documentary, Manufactured Landscapes. In it there is a section on the ship salvaging area of Bangladesh. There is a shot of 100 men carrying by hand a giant, 2 and a half inch cable along the tidal flats. In the bonus features, the filmakers say they asked the foreman why they didn't use their winch to pull along the cable. The foreman did some quick math, saying hiring 100 men at 10 cents an hour cost them $10. The diesel for the winch would cost them $15. Is this our future?
Here is a website by a well known photographer and teacher, who visited that part of Bangladesh (he is also a videographer and perhaps the video you saw was partly his doing). He has a pic of a cable gang:
http://www.luminous-landscape.com/locations/ship-breaking.shtml
His conclusion:
Yes. But first and foremost in agriculture.
Also Jeffery Brown's estimation of our future. I bet OPEC is reading TOD and thinks Jeffery has the "nut flush". Cut back on contracted volumes and allow selling on spot market to the highest bidder. Makes perfect sense.
Jeffery, I have to give you a hand on this one, that was a very insightful call on your part. Your other comments are with out a doubt coming to "fruition" as well, as much as I don't like reading any of it.
Farmland or light rail accessable? I bet you will say farmland...
Best, D
What about Nepal?
I can't help but think there's a lot of countries that will be going the way of Nepal. They can't pay their fuel bill, so they've been cut off. They are begging for delivery to be resumed, but they can't pay. And I don't see how they will ever be able to pay. They've fallen so far behind. I guess they're hoping that oil will get cheaper, or their economy will boom, giving them more money to spend.
I also recall a story from 2004, when oil prices first started to spike. The forests were being denuded, as people turned to firewood instead of fossil fuels for cooking.
Nepal sells hydroelectricity to India, which desperately needs every MWh it can get (with more projects in the pipeline). So there is hope for them long term. Nepa; is probably a net energy exporter and can expand that.
Not true for other nations.
Alan
Nepal has a huge population problem... several times larger than the 1900 level, to which it must eventually find a way back. The current growth rate is 2.17 (CIA Factbook 2006, via Wikipedia). Ominous signs.
ciao,
Bruce
Drawing inventories still.
From IEA May Oil Market Report
And that is JUST from OECD. I suggest the remaining shortfall is being demand destroyed in poorer countries.
Pushing my T+3 week for KSA's failed ability to meet summer demand, September is a joke for reassessment - by the we can expect:
1) Oil supplies to be even tighter as stocks are drawn all summer.
2) Gasoline to be potentially critical(but not necessarily for the same reasons).
3) Natural gas and heating oil prices rising rapidly in anticipation of a tight winter.
4) An economy shaky at best.
What happens after that is the stuff of nightmares...you fill in the blanks.
5) the coming hurricane season in the GOM, which ist again expected to become intensive this year
If the U.S. is not going to be able to refine enough product to meet demand for the summer driving season, will it really be able as has been suggested to import the shortfall? Whose refining surplus is available for export? Is Europe poised to meet this demand?
Demand is a function of price, so rest assured demand will be met, just not the way motorists would want it to.
Oil pumped out of the ground now in the middle east, has to be piped to an export terminal, loaded onto tankers, sailed to Europe, offloaded, piped to a refinery, processed into gasoline, piped to an export terminal, loaded onto tankers, sailed to the US, offloaded, loaded onto trucks, and finally driven to your local gas station.
I am not excatly sure how long this takes. But I feel it's safe to say that even if OPEC raised output today. Europe can not save your summer driving season.
We tend to talk of demand as an immovable point - but it is better to say - demand will meet supply via price(and some politics).
Price will rise - some plants may squeeze out some more capacity, imports will rise as we divert 2 supertankers (VLCC class) full of gasoline a week from someone else in the world who cannot afford the new price. Demand will shrink due to the new pump prices (however little/big)...until they meet in the middle.
Gone are the days of supply will meet demand. Even if you think there is a still a few more years to peak, we are on a plateau until then...this is the new economics of depletion.
Exactly right. In any market there are a range of consumers with different marginal utilities for the good being supplied. The buyers with the lowest marginal utility for oil will be the first to drop their demand when the price of the oil exceeds their marginal utility. And so it will go, all the way down to the point where the price gets so high that there is nobody left to buy.
Hurin:"Demand is a function of price". Maybe. IMO, the current USA gasoline price increase trend is not sharp enough to choke off demand before supply issues arise. Possibly the prices will rise faster in late May and June.
If demand for gas in the U.S. is inelastic, this is certainly not true for all consumer spending. When American consumers feel unable to cut back on gas consumption in the face of high gas prices, demand destruction hits other sectors, as we saw in the April consumer spending numbers. May consumer spending stats should be interesting.
However, I suspect that in the longer term cutbacks in consumer spending circle back and ease pressure on energy supplies. If people are buying less, they are making fewer trips to the store. Long haul truckers are delivering less inventory to retailers, manufacturers cut back their deliveries of their own inputs, etc.
In other words, the pressures of summer gas supply/demand exigencies could easily tip us into recession.
And this is right too. Consumers with the means to afford the higher prices will simply pay them, and cutback on some other good of lower marginal utility. It is only those consumers with nothing else left to cut back on that will have no choice but to cut back on their consumption of gasoline or diesel or fuel oil.
If a poor person cannot afford to fill up the gas tank, then the gas tank won't get filled up. That is what we really mean by demand destruction. Sad, but true.
kenny you are dead on. I think the feedback loop has started and will show up in MSM later this year or early next.
The US's refineries cannot refine enough to meet demand, a situation that's existed for many years now. We import well over a million barrels of gasoline per day alone. Much of that product comes here to the west coast, thus the much higher prices at the pump.
Have you tried cutting down on driving?
Another important point is that it is LIGHT crude, where previously also heavy and medium were cut.
This is one of the great mysteries of our time. Is KSA running out of oil, or cutting voluntarily?
One factor to consider: OPEC makes more money when they pump less. Unlike farmers. Having thousands of farmers means each one can only increase profit by growing more. The cumulative effect, of course, is usually a glut, and they make less.
Not so in the oil world. A few extremely large "oil farmers" can cut production, and make more.
If you had a choice between 1) pump more and make less, or 2) pump less and make more, which would you choose?
Another fact to consider: At $60 a barrel, it looks like world fossil consumption is falling, or flatlining. To pump more now would mean a fall in prices. OPEC knows this, even winos in the park know this. My guess is that world fossil oil consumption falls mildly and semi-permanently at more than $60 a barrel. World consumption fell 11 percent after the 1979 price spike. That spike was worse in absolute terms (adjusted for inflation) but this one may be more sustained. Nevertheless, oil prices are double and triple or even five times late 1990s levels. Sooner or later, the screw will turn.
By the way, check out crude oil production in North America (not just the Lower 48) for the last 30 years. It is a flatline, despite cheap-o oil prices for most of that period. As a founding member of the Fossil Flathead Society, I call that "Cole's Plateau" (as opposed to Hubbert's Peak).
No one can say what makes the Lower 48 any more instructive than North America as a whole. Indeed, if our ancestors had been a little more aggressive in their fevered dreams of Manifest Destiny, maybe the USA and North America would be the same. Alak and alas, we let things slide away, and so we have Hubbert's Peak, instead of Cole's Plateau.
Last note: Veep Cheney was in Iraq (according to Sunday's LA Times) and told Iraqis if they didn't get that oil law passed, then come September they would find Congressional support for US troops in Iraq would dissolve. Hmmm. You can put women back into the Stone Age, kick out non-Islamics, and in general create anarchy, but man if we don't get that oil, we are leaving.....
I am fascinated at how you can go from one subject to another without using even one linebreak. 'Semi-permanently' is that even a real word?
My guess is that you're home schooled, and that your mom just invented her own grammar as she went along.
Btw. Your plateau is no longer a plateau. You can add more continents to it, if you feel like. But since you can't add another planet, your point is moot.
And my guess is that childish insults aren't helpful.
I'm fascinated by the fact that BC spouts off about all manner of "flatlining" ideas without offering up any document links to substantiate whatever the hell he is talking about. I thought TOD was a meat-grinder and this guy gets a free pass? Now that's fascinating!
I suspect most people just aren't reading his posts. Not least because his wall 'o text style makes it very difficult to read.
check
I have considered suggesting that he use paragraphs but resisted as I thought it might be perceived as too snarky. But now that this has been brought up, I second the notion that line after line with no breaks is not bearable and I refuse to read him anymore.
BenjaminCole
Okay, check out British Petroleum's website, then look at their world statistical review. You will see world oil consumption in 2005 rose 1.3 percent. World oil consumption rose 3.5 percent in 2004.
We are waiting for June's annual report from BP, which will reveal world oil consumption in 2006. But, look, from 3.5 percent increase to 1.3 percent in one year. Prices were even higher in 2006.
It is not so far-fetched to believe that consumption flatlined in 2006, or is currently, or indeed, may even be declining. Why this good news causes such outrage and umbrage is beyond me.
Further, if you review the statistics, you will see that consumption has already flatlined for deacdes in Europe (BP calls it Eurasia), and nearly so in North America. Moreover, that flatlining occured in an era of cheap oil prices! What will happen in the new $60 a barrel regime? economies and buyers do respond to price signals.
in short, the developed world, outside the Far East, is already using less oil than before. Whole nations, such as Germany, Great Britian and France, are using less oil than 20 years ago, or even than in the 1970s. Check it out.
Even India reportedly used less oil in 2005 than 2004. More recent reports suggest Indian oil consumption is going up again. China is a killer, using lots more oil (although they have been making oil strikes, and claim they will not import increasing amounts, in years ahead).
The USA is also a killer, as we seem to consume at ongodly levels. Althoguh that means we can reduce more easily.
Okay, so you have the document link. Go look for yourself. But mostly, I think we look at each other's ideas for what we can gain, not for the chance to make insults. I like many of the posters here, and many disagree with me. That is what makes this a fun forum!!!!
In the absence of meat, meat grinders sit idle.
Alan
Give it up Hurin. His rose-colored glasses are so thick he can no longer tell truth from fiction. If he wants to disregard Hubbert (a very experienced Phd) and invent his own mathematical models of oil production/depletion, let him. He can babble harmlessly to himself in the corner over here.
At some point (perhaps when he is hungry enough) he will take those glasses off long enough to read a book or two on how the models are constructed. And perhaps he will learn what EROI means and that a 100 EROI barrel of West Texas crude is not the same as a 3 EROI barrel of tar sands glop.
Best let the children day dream a bit longer.
The Parliament is supposed to approve the law by end-May; so Cheney's September deadline seems like recognition that the May target date will not be met. Interesting that VP Cheney is using the Democratic Congress as a threat to the Iragi Government. We know that Congress Democrats, including Obama and Clinton, are in favour of the proposed oil law and the Irag Constitution that gave rise to it. AFAIK the Iraq Constitution is the only state Constitution in the world that specifies how oil is to be marketed - " by moderb marketing methods" which I suppose translates as Big Western Oil Companies. This is the same neocolonialist approach favoured by the French Government in the post-war liberation of French colonies in Africa. The locals obtained an "independent Government" while France controlled and still controls their natural resources. Iragi "independence" meant that US companies were consulted about the prosposed law before the Iragi Parliament. Strange that. But we know that Cheney involved US energy companies in pre-2003 studies of Iragi oil fields, without any communication with Congress; so he may regard such secrecy s "normal Democracy". According to Al Jazeera Iraqi parliamentary opposition to the proposed oil law is growing with even former US stooges such as ex- Prime Minister Allawi now against. And if the US does not gain control of Iragi oil, to have it become what RR called "foreign US oil interests" ( e.g. pillage) then what's the point of occupiing Irag.
BenjaminCole's claim that US production since 1970 peak has "flatlined" demonstrates gross ignorance of the real data. As I replied to him in a prior drumbeat when he first made this claim, he is completely factually in error. US production has fallen at a roughly 2% clip annually leading to roughly half the oil production today that we had in 1970. This graph from the EIA clearly demonstrates the lie of Cole's original assertion. Since I called him on this false statement, he has since moved on to claiming "North America" but Mexico was not even in production on a large scale when the US peaked, thus showing the error of his analysis right there. He completely fails to understand what the term "finite resource" means. He ignores or is totally ignorant of the oil production history of Texas, Alaska, the North Sea, the lower-48 US, Yibal, etc.
BenjaminCole's other assertions have also failed the "sniff test" of real data. His 3 gallons of oil per pig from pig manure is perhaps the most sensational but his current assertions are no less faulty. His assertion that global consumption is "flatlining" is based on the FALSE belief that if demand rose, the production must rise to accomodate it. What he fails to realize is that if production has peaked, then consumption CANNOT rise and would give the exact same appearance as his false expectation.
Instead, demand remains strong, there are fuel shortages globally, and even fuel riots as the remaining fuel goes into a bidding war, just as Jeffrey Brown has predicted. They just have not happened in the OECD nations yet so BenjaminCole thinks that this means everything is ok. Notice how tiny and constrained his perspective is? He tosses out the entire developing world, ignores the news items (such as those Darwinian referenced), bases his entire belief system on faulty theory that ignores thermodynamics, then claims that we are all wrong.
I do not find even many cornucopians making statements as ridiculous as BenjaminCole.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Greyzone! I keep posting that it is North American crude oil production that has made a plateau, not US production! See Cole's plateau further down in the posts, done graphically. Very pretty. North American production has been roughly flat for decades, in the face of cheap oil. Mexico is a mess now, so maybe this plateau will start losing some elevation. On the other hand, $60 a barrel oil may spur more production elsewhere. But it is not a peak, for sure.
For those who do not have EXCEL or are just too lazy to check BP's data for yourselves here is Cole Plateau:
Note that current production in North America is roughly the same as it was when the US peaked in 1972. Some would call this a bumpy plateau.
I assume that this plot is Total Liquids, or C + C + NGL.
As we all know, the Lower 48 peaked in the time frame predicted by Hubbert, right at the 50% mark on the HL plot, and the HL plot showed a strong linear pattern prior to the peak.
Mexico peaked in the time frame predicted by Khebab, based on his HL plot (right around the 50% of Qt mark).
In Canada, slowly increasing production from the tar sands has so far offset declines in conventional production, allowing Canada to show an increase in production.
So what we have are two regions, the Lower 48 (and total US) and Mexico that are declining as predicted by the HL models, with one region--Canada--that benefits from highly energy intensive tar sands production.
The key lesson from this plot is that the increasing tar sands production from Canada can't even offset the declines from the US and Mexico (and the conventional decline in Canada)--and this is without even getting into the net energy aspect.
Meanwhile, as predicted by the HL plot, using the Lower 48 as a model for the world, world crude + condensate production is declining.
What you have done with this plot is to simply show one very mature region (US), one region at peak production (Mexico) and one region benefitting from the tar sands production (Canada).
What you did not show is that Mexico--our #2 source of imported crude oil--is in terminal decline, with first quarter oil exports in 2007 down 16% from the first quarter of 2006.
If you want to compare regions and do a sum of the production, why don't you plot the Lower 48, Norway and the UK. They have more in common with the US than does Canada and Mexico (in terms of the stage of depletion).
Alternatively, why don't we just plot production from the small number of countries with increasing production and pretend that the declining countries don't exist?
What a great graph! Remember, this is largely an era of cheap oil. Also note the large surge in production following the 1979 oil price hike. I wonder if that can happen again. You know, this just does not look like a peak, does it fellas?
The USA looks ugly, but not North America. Okay, so tell me what makes the Lower 48 more instructive than the results obtained (so far) in North America?
I know King Hubbert had a Phd. and I don't. That does not make North American production into a peak. Alan, I offer you a honorary position in the Society of Fossil Flatheads!
I decline membership.
IMO, you have six different political and economic regimes, each with an impact of the production curve.
Lower 47, Texas, Alaska, Canada (conventional), Canada (tar sands) and Mexico.
Given the differences, aggregating them (and yes, I prefer Lower 47 & Texas to Lower 48 due to the production limiting Texas RR Commission) is foolish and not logical,
Best Hopes for Reality Based Planning,
Alan
PS: Why not throw South America in as well ? It makes as much sense.
Hothgor(?)
Hothgor had pretty good writing skills, unlike our new troll, BC.
No...just another mercenary on the information front lines...better to ignore. Wants to raise some doubts to those that haven't been here for ages and know better. This always happens when things get dicey and heated in crude world.
It's really just a sign that those that wish to cloud the issue are getting nervous.
You'll also notice that they appear in the Drum Beats, but hardly ever the main articles. Just shows they have no data legs to stand on and fear those that could actually crush their debates in milliseconds.
One more comment comes to mind on KSA/OPEC cutting back when they should be increasing to meet demand:
When do WT/SS/RR settle their bet?
Okay, I know that this is still not definitive, but we can never truly prove KSA cannot ramp (as a negative). However, failure to ramp this summer is about as damning circumstantial evidence we can get.
I know, let's move the goal posts to the late fall - if they don't increase for the winter heating season. Then, maybe if they don't increase for next summer driving season...
Silly, yes! But unfortunately we can't prove anything until we can see their books, or they crash hard off a cliff. Everything else will have an excuse.
Stomach turning. I think it is almost time to stick a fork in KSA, they are done as King.
I raise a glass to their exemplar run of 30+ years as production King.
When do WT/SS/RR settle their bet?
We don't have a bet, although I do have a $1,000 bet with a TOD reader that oil prices won't reach $100 this year:
The $1,000 Bet on Oil Prices
I believe that bet will be settled in my favor on 12-31-07. If Saudi has peaked - which I still do not believe they have - then there is a good chance I would lose that bet. But I did put my money where my mouth was. What I have with SS and WT is a difference of opinion about whether Saudi has entered a permanent, involuntary production decline.
Okay, I know that this is still not definitive, but we can never truly prove KSA cannot ramp (as a negative). However, failure to ramp this summer is about as damning circumstantial evidence we can get.
Which is what I have been saying. What would be convincing to me is if our inventories fall - as they typically start doing in May - then we will call on them for oil by summer. But, due to our refinery problems, our crude inventories have actually be rising. And crude prices have shown no indication of a great shortage. They are actually below the levels of a year ago.
I also note that the news report indicates that the cuts being made were previously agreed upon at OPEC meetings. So this should not have come as a big surprise. My impression is that the U.S. is currently oversupplied with crude, but that the rest of the OECD may be undersupplied. If the U.S. was undersupplied and prices were rising - and Saudi made a cut - then that would be a pretty damning indictment to me.
Hi Robert,
I guess I was trying to address the impossibility of agreement with the topTODrs.
Does the 'US' inventory really predict peak? I would suggest that US inventory draw may lag by sometime until price becomes unbearable in the US as well.
In this first phase of Saudi cuts (voluntary or other), it doesn't appear that what little the US does get from them is not being cut. This is where price and politics intermix.
MSNBC tried to debunk the "gas boycott" e-mail campaign, and found itself at the receiving end of the wrath of the happy motoring public.
Here's how you can lower gasoline prices: With just two, simple, no-cost steps, drivers could send prices tumbling
I think they should frame it as
"What makes you 5% so special that you think you can consume 25% of the world's oil indefintely?"
"What makes you 5% so special that you think you can consume 40% of the world's oil exports indefintely?"
We earned it! It's our manifest destiny! The American way of life is non-negotiable!
It's our hard work, Christian morals, and capitalist economic system that have put us in the position to take or buy the oil, therefore we deserve it.
Just like we "deserve" food, clothing, shelter and health care, we "deserve" energy.
Unfortunately we have created an entitlement society filled with people who believe it is the responsibility of others to provide all of their perceived "needs".
Frankly, with all that free energy from fossil fuels floating around, there is no one that can claim that his income is based on his own personal efforts. We are all using ancient sunlight, and I think it makes at least as much sense to include everyone for a part of the spoils as to let the winners of the global pyramid game take it all.
And we'll get what we deserve.
Our expectation in the US, an exponential increase in Total Petroleum Imports:
http://www.theoildrum.com/uploads/28/Data_4weeks.png
The “Export Land” Reality:
http://static.flickr.com/97/240076673_494160e1a0_o.png
The result so far, Americans going into debt to pay for their petroleum bill (normalized plot of Brent crude versus US person Saving Rate, both = 100 in 2000):
http://www.theoildrum.com/files/PSR_Brent.png
I am beginning to think that Matt Simmons is right, and perhaps conservative, i.e., a $200 oil price in 2010, in constant 2005 dollars. Absent an immediate recession/depression, I think that we are about to see a blowout bidding war for declining Total Petroleum export capacity.
(All plots by Khebab)
A nuclear power is beginning to unravel:
http://www.dawn.com/2007/05/14/top7.htm
http://www.dawn.com/2007/05/14/top1.htm
We truly live in interesting times......
Extremely interesting times. I see very little reporting on Pakistan. Maybe because it's complex?
Any additional links much appreciated.
I think there is very little reporting on Pakistan because they don't have oil and because they don't export or import anything in significant quantities to have an impact on the rest of the world.
It is a failed state in the middle of a severe energy & environmental crisis and Islamic extremist influence is increasing rapidly. Dictator Musharaff is hanging on to power by his nails.
Here are links to a couple of Pakistani newspapers:
http://www.paktribune.com/index.shtml
http://www.dawn.com/
LOL.
Good catch of stories, suyog.
Pakistan unraveling has been one of my pet concerns. As if the world doesn't already have enough problems, this one has some explosive juju power to it should it get out of hand.
Another “Export Land” example, single digit production decline = double digit decline in net oil exports
http://www.ameinfo.com/119845.html
Oman oil output declines
Stuart placed his "society collapses" line at 11% decline.
http://www.theoildrum.com/story/2005/8/24/161535/296
There is no way the US is going to allow that to happen without military action. I can easily foresee blockades on countries that resist exporting or at least "off the market" shipments from those counties willing. I cannot imagine a diplomatic outcome, not for the next two years anyway.
Darn! I don't want to be a Matt Savinar Defcon 1 !
When does 5 + 2.5 = 15?
The simplistic mathematical model of Export Land assumes that consumption is half of production and that production declines at 5% per year, while consumption climbs at 2.5% per year.
Over the first 4.5 years of the model, this results in about a 15% per year decline rate.
Note that the countries with the two largest producing fields in the world, Saudi Arabia and Mexico, have shown year over year production decline rates of about 10% and 6% respectively, and both have double digit decline rates in exports (probably about 15% for Saudi Arabia, about 11% for Mexico, all on a month to month basis, quarterly decline in exports for Mexico is sharper).
West Texas
I have followed TOD for a long time, but i am a new poster. I have read your posts with special interest. What you are implying, is in effect a catastrofic scenario unfolding in 5-10 years. Your writings is very difficult to counterattack. I believe you are right, but what makes me somewhat confused, is that you seem to be(with some eceptions)a lone star, like Don Quishote fighting the windmills.
IF YOU ARE RIGHT IN WHAT YOU SAY, then we are freaking doomed.
Still a little confused, but making preparations for the worst case.
Kenneth
Check out Stuart's update on Ghawar. His report is probably worth over $1,000 per copy, and it would be priced that way if done by a consulting company.
I think that we are only in the very early stages of a ferocious bidding war for declining oil and petroleum product exports. Just wait till Russia starts showing a year over year production decline, combined with their enormous increase in consumption.
What kind of preparations? How can we in the industrial countries prepare for the oil shock. Even not driving a car and trying to use as less oil as possible doesn't make us less susceptible for the times to come.
Meanwhile my IMHO Peak Oil can be regarded as a new chance, restructuring our society and economy. The idea of endless growth is a deception, so many people unfortunately don't (want) to see. If there is no Peak Oil, as Heinberg mentions in one interview, then there will be anyway peak water, peak topsoils or any other king of peak which is probably not yet anticipated by many experts.
So maybe, the earlier Peak Oil will happen to become reality, the less intense will be the fall off from our living standard. Formerly I was very optimistic about the future (renewable energy etc.), however doing some simple arithmetic opens one's eyes. Oil is not replaceable and that's the reason, as many in TheOildrum have pointed out, the imminent future will become gloomy (but from a scientific perspective as well interesting). A known danger, which PO is for all us here in TOD, is still half a danger.....
Marotti32
With preparations, i mean personal preparations. The countrys/governements are not doing anything, and they will not do anything before the crisis is obvious, and it´s to late.
There are all kinds of scenarios for what will happen in the PO crisis, from the Olduvai scenario to the cornucopian scenario.
There is a very good old rule, that you prepare fore the worst and hope fore the best.
It´s up to every individual(with family) to prepare, because no one else will do it for you. And this coming crisis is something totally new and unprecedented for mankind.
Best Kenneth
What kind of preparations? How can we in the industrial countries prepare for the oil shock ?
http://www.lightrailnow.org/features/f_lrt_2006-05a.htm
http://www.lightrailnow.org/features/f_lrt_2007-04a.htm
Not enough, but something that has elasticity of supply (the harder times get, the more transportation that can be squeezed out for relatively low marginal additional cost).
Best Hopes for SOME preparation (or at least an effective reaction),
Alan
Kenneth-Swede:
The Peak Oilers are very smart, and man they are persuasive. This is a very educational forum. But other smart guys say we will be able to boost even crude oil production going forward, including the International Energy Agency (IEA) and CERA (Cambridge Energy Research Associates).
As a founding (and lone) member of the Fossil Flathead Society, I wonder if the truth lies in the middle somewhere. I see that crude oil production flatlines in North America starting in the 1970s – no peak, but no growth either. This is largely an era of cheap oil, however. No one can say what makes the Lower 48 more instructive than North America. Personally, I think North America is more instructive. We picked the low-hanging fruit here, and went elsewhere. Now, we are getting to fruit in the middle of the tree.
Where I am more optimistic than most TOD'ers is on crude demand. The world can consume less crude oil, and has done so in previous oil price spikes, notably after 1979, when oil demand worldwide fell by 11 percent. Took ten years to recover and then only when oil was cheap again. I believe that is an instructive episode. Why is it not instructive?
I used to think we were headed for another oil glut. In giddy moments, I still do. After reading TOD, I have been semi-converted, but remain agnostic on some issues. Fossil crude production will become more difficult, but at $60 a barrel, I suspect it will not plummet. Happily, bio-fuels are coming on. But mostly, demand will be crimped.
Out 10 years or so, it is possible we will see plug-in hybrid cars. That will radically decrease fossil crude consumption. In the meantime, look for smaller cars, hybrids, and less driving. Nukes, bio, and hydro, wind and solar.
In short, there will be hardships. Tripling the price of oil is not all ice cream and cupcakes, and nether-region services from Pamela Anderson. For many countries and people, this hurts, Who knows? Oil may hit $80 a barrel, causing even more hardships.
But we can avoid collapse. Ghawar is not the world. And the KSA still only has 50 or so "rigs' (new wells being drilled) compared to roughly 1,500 in the USA. One might suspect they are not really even trying.
BenjamineCole
I hope you are right in your assumptions. But i feel, that the fact, that we find only one barrel oil per 4-6 barrels we use is proving, that we are running out of oil. Then i don´t believe that we can substitute that for transportation with EV cars other than for a small amount for the richer people. And where do you get the energy to load up those PHEVs? Energy is energy you can´t substitute it with fantasy, can you?
Kenneth
Swede-
the Export Land Model has to make assumptions, and model assumes that oil exporting countries will continue to export all oil production that is not consumed.
is that realistic?
it may actually be too optimistic.
To Benjamin Cole – As the official Big Ugly Tod Troll, (no acronyms please) I feel it my duty to give you some unsolicited advice.
If you have a topic you wish to comment on do a search of the site with some key words first. Most of what you post about has been thoroughly discussed up one side and down the other by some very savvy folks and is disrespectful not to at least check and see if your comments might just be naive, irritating, wrong, etc.
Ditto if you have a Q.
I do, (and I am sure most others also) understand your attraction to this forum and its
Homie, cozy, under the bridge safety kind of feeling, and intellectual content.
But you may want to do as I do and before you push the “post comment” button think twice.
Are you an paid or official member of the TOD staff, or another poster? If you are a meeber of TOD staff, and wish me to post less often, then I will do so. If you are another poster assuming some role of authority, I think you are off-base.
I get paid in table scraps.
Seriously it's not a matter of frequency but of content.
Please re-read my post above and consider.
Just a friendly suggestion based or hard learned lessons.
He is not off-base. He is trying to help you. You would do well to heed his advice.
BC you are at least 1.5 yrs behind and need to catch up.
It would be wise to read archived TOD at the bottom. This is the most educational website I have ever encountered(!). There is tons of first class material if you care to look. If you want classic TOD replayed for your benefit - you are being unreasonable to say the least. Better get reading as no matter where you live this is important.
Please don't respond, thanks, D
''And the KSA still only has 50 or so "rigs' (new wells being drilled)''
Err... I think you will find that they have doubled the rig count to 100 with an intention to go to 120-140.
They will be going flat - out soon.
Not really. For example:
Unsupported assumption.
Top 10 oil exporters last year exported 32.7Mb/d (net) on production of 43.9Mb/d, or about 75% (link).
So internal consumption is only half the assumed level.
Unsupported assumption.
Net decline rate from Q1 2006 to Q1 2007 for those top 10 exporters was -0.59Mb/d, or 1.3% of their production.
So decline rate - which may or may not be involuntary - appears to be about a quarter of the assumed level.
Unsupported assumption, and failure to note that this variable isn't subject to geological constraints like production.
Even keeping the assumed growth rate, plugging in actual data (25% consumption, 1.3% decline rate) gives the following...
...in five years.
When you multiply large errors, you get a really large error. The simplistic assumptions used as a baseline for the exportland model give an export decline rate of six times what you get by plugging in values from real data.
I never claimed that the Export Land model is representative of all exporters, although it closely fits the collapse in net oil exports by the UK, and the ongoing rapid decline in Mexican exports.
I was just trying to show how the interaction of a decline in production and an increase in consumption causes a rapid decline in net exports, e.g., the estimated 15% range decline in Saudi exports (month to month).
Check out the 2006 export numbers down the way.
Copy of my post from the Ghawar thread:
Ghawar and Cantarell are two largest producing fields in the world. In both cases, we are seeing rapidly thinning oil columns, between water legs and gas caps (secondary for Ghawar, primary for Cantarell). I have long described these two fields as warning beacons heralding the onset of Peak Oil.
From 2/06 to 2/07, Saudi Arabia declined by 10%, Mexico by 6% (C+C, EIA).
I estimate that Saudi oil exports probably fell by about 15%.
Mexican exports fell by about 11%, the overall first quarter was down 16%, year over year.
Using Brent as an index price, the world paid about 1.7 trillion dollars for oil in the 20 months leading up to 5/05. In the 20 months after 5/05, with world C+C production down by about 1%, the world paid about 2.7 trillion dollars for oil.
Absent an immediate recession, I am increasingly beginning to think that Matt Simmons is probably right, or even conservative, in his estimate of world crude oil prices--$200 in 2010, in constant 2005 dollars.
I would simply reiterate the advice that I have been giving for over a year--Economize; Localize & Produce and assume that your income drops by at least 50% and assume that gasoline is over $8 per gallon in the US.
BTW, just a reminder. Remember that the collapse in the Saudi stock market corresponded to the onset of their "voluntary" production cutbacks in the first quarter of 2005.
Update:
2006 EIA Net Export Data Are Out
http://www.theoildrum.com/story/2006/1/27/14471/5832
Hubbert Linearization Analysis of the Top Three Net Oil Exporters
Posted on January 27, 2006 - 1:47pm
Guest Post by westexas
The EIA's estimates for net oil exports by the top net oil exporters (one mbpd or more, Total Liquids) is out: http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html
As I predicted in January, 2006, Net Exports by the top three (Saudi Arabia, Russia and Norway) fell.
Production by the top three was down 1.7%, but net exports by the top three fell by about 4%. Note that on a month to month basis, instead of an annual average basis, the decline in net exports is much sharper.
The only increase in consumption for the top three was for Russia (from 2.8 mbpd to 3.1 mbpd). The EIA reported consumption increases for all three from 2004 to 2005.
Perhaps a more precise name might be in order, then, since it does not fit the majority of major exporters.
I'm curious about your assessment of this prediction of yours.
Russia has shown steadily-increasing production for the 16 months since your HL-based prediction. Were that to continue, at what point would you conclude that Hubbert Linearization failed in the case of Russia?
Actually, from 2005 to 2006 (corrected), the aggregate increase in consumption by the top three was 2.3% (total liquids).
From 2/06 to 2/07, the aggregate decline in production by the top three was about 5.3% (C+C, EIA), producing an aggregate double digit decline in net exports by the top three (month to month).
Those numbers sound familiar.
In regard to Russia, their post-1984 cumulative production through 2004 was about 94% of what the HL model predicted it would be, using only data through 1984 to generate the model. They have now "caught up" to where they should be, and I expect to see a decline in production no later than next year, probably this year.
You folks should look at what Asian bench-mark crudes have been retailing for: Tapis has been over $74 for weeks now, and the Aussie benchmarks are at $70, the Chinese marker at just under :
http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm
US bench mark oil is cheap by comparison - clearly Asian oil prices will shift higher and I am pretty sure the Tapis high from last year ($84 as I recall) will get taken out this summer.
Petrol prices here in NZ would be at a new high had not the NZ$ strengthened by nearly 20% in the past 6 months. As it is they are at $1.55 - I reckon they would have closer to $1.80 had the $NZ not recovered. However even these elevated prices seem to be having no effect on the NZ consumer, last retail sales data was a blowout!
Interesting point about our strengthened dollar softening the petrol price... Many people are predicting a fall in the NZ dollar soon, but I haven't read too much on it yet. Any thoughts? If it does fall, a lot of people here could be in for a bit of a shock regarding petrol prices.
"You can never solve a problem on the level on which it was created."
Albert Einstein
Its something that is poorly covered in NZ - you hear endless groans about what the high $ is doing to exporters, but what it is also doing is
a) protectings NZs from much higher petrol prices
b) bringing down the cost of the imported trinkets (flat screen plasma etc) that NZs seem to be fixated on.
However, whichever way you look at it, its malign for the NZ economy - point b) continues to worsen the NZ trade deficit (a staggering 9.2% of GDP) and the retail blow out sends the Central Bank into paroxysms; hence interest rates have got higher to go. But once they have gone so high they choke off demand then what? The bank has to keep the lid on inflation and if they lowered rates then the $ would fall mightily, leading to a surge in petrol prices (and everything else that flows from it) and a jump in the costs of imports - result more inflation.
I really cant see an easy way out for NZ, mainly because of this oil price conundrum. Record levels of debt (in common with other countrys of the anglosphere), a housing bubble (which hasnt popped yet, but will) and a massive trade imbalance, which will eventually collapse the $.
But as is the case in the US, things would have probably muddled along, had teh oil price not set off the fires of inflation from 2003 onwards, a situation that most pundits seem to have ignored.
Interesting take on the home front. Thanks for the thoughts.
"You can never solve a problem on the level on which it was created."
Albert Einstein
I am still confused, but on a higher level.
Kenneth
Welcome to the club
This is known as "progress".
Who are "we". I ,too, believe Westaxas is correct but I do not see France, for example, as doomed. Sure things will slow down. Output will fall but not catastrophically: France will adapt and continue enjoying life, hoping that global warming will be mitigated. The US is very likely to be a basket case within a year.
What the US will face first and foremost is a culture crisis: the end of consumerism. Much will depend on how that is handled. The US doesn't have very much historical experience to fall back on. Pioneer mythology might come in handy, although that relied economically on the ecological bounty of an entire continent. Theocracy has its proponents. As a variety on that theme, apocalyptism is also in the cards, with the rapture fanatics on one side, and those expecting cannibalistic hordes from the city roaming the countryside on the other side. Close to that group are the survivalists, inspiring themselves on the Wild West meme. And of course the ecologist approach, whether inspired on native American traditions or cutting-edge science, that ends up in permaculture villages.
Those are the strongest historical cultural memes, and they will be influenced with foreign culture and new ideas as well. Choose well.
I am hoping for "Old Urbanism" for most, and "going to town every other Friday if it isn't raining or snowing" for the country folk.
Music and cooking (GOOD cooking) at home can take a larger role in people's lives, as well as participating in sports and community. Helping the old man down the street can be good training for children.
Best Hopes,
alan
What's also interesting about the Oman Q1 drop is that exports to China actually rose by 4.4% year-on-year. This means the amount available to foreign importers ex-China fell by almost 20%. China is the thirsty elephant in the room, and with its huge FX reserves it's got dollars by the bucketful to buy oil.
One caveat BTW: Because Oman exports nearly all of its oil, the implied domestic consumption increase from these figures seems unusually high (+54%), so maybe there were peculiar factors involved (e.g. some Q1 production was diverted into inventory for export at a later date).
WT wrote
"I am beginning to think that Matt Simmons is right, and perhaps conservative, i.e., a $200 oil price in 2010, in constant 2005 dollars. Absent an immediate recession/depression, I think that we are about to see a blowout bidding war for declining Total Petroleum export capacity."
You know as well as everyone knows this economy will never stand $200.00 oil in its present auto based configuation. Subtract housing ATM declines we are screwed.
Jeffery, could you change the channel I don't like this movie, I think it will end badly.
Who in thier right mind whould want to be president in the next 4 years? (or ever imho)
We've got the printing press.
I am not having a go at you, but that comment suggests seems to show no understanding of the American people whatsoever, doesn't it?
The American people aren't going to see such a converstation as constructive... they don't even know why such a question is asked...
American exceptionalism is a dangerous but firmly embedded mindset that will survive the peak in the same way Wily Coyote survives running over the cliff... standing their confused feet wheeling for an improbable amount of time before the inevitable plunge to earth.
Most Americans live in a make-believe world where the narrative of their nation's history, founding and rise really bears little resemblance to tha facts, sadly. Peak Oil is just another jarring disconnect where the real world impinges on the Disney version.
At least that is the way it has appeared to me since moving to the US...
Well, your assessment is a pretty accurate one but I know from conversations with people of other nationalities and ethnic groups that cultural chauvanism isn't a peculiarly American affliction (Ask a Han Chinese person what he/she thinks of the Dalai Lama and Tibetan independence).
The problem -- for the time being, anyway -- is that America has the military might to project its delusions onto a good bit of the rest of the world. That, in no small way, contributes to our overwhelming popularity around the globe.
"Peak Oil is just another jarring disconnect where the real world impinges on the Disney version."
Nominate this for quote of the day...well done, sir.
It is going to be a really loud wake up call.
The days of the 300# queens (and kings) driving their 8000# Excursions to the welfare office are rapidly coming to an end.
The unfortunate thing is that MSNBC is correct, minor changes in our driving habits could lower the price of gasoline very substantially, but we are too irresponsible as a nation to see our own part in the crisis. If people would just carpool take public transit once a week for a school or job commute, or plan their grocery store expeditions so that they eliminated 1/2 of the one item trips, supply would so exceed demand as to lower prices,plus have the advantage of having the energy savings going directly into the pocket of the person saving the gasoline. Plus, it would cut traffic, cut pollution and save driving time by eliminating trips and lower all of our stress levels.
But this is obviously socialism ! Its every persons right to sit in a SUV stuck on the freeway idleing, then pull off to buy another $50 worth of gas every two days.
My guess is that all of those things will come very easily once gasoline is selling above $10/gal.
Along with price increases for everything else. And what of all this $10 gal. price shock?
Reduced sales of all kinds of good and services = Job cuts = rising unemployment = straining of government budgets, etc. feeding off itself.
Sure, a $10 gal. recession will hit our demand and perhaps lower oil/gas prices some, but the real question is at what price point does such price demand destruction gather enough momentum to be near impossible to stop from tipping all the above sort of negative feedback effects into a near impossible to stop economic snowball-from-hell?
We'll soon find out.
I'm not suggesting $10/gal tomorrow, but it might not take too many years to get there. If we go up from $3.00 to $4.00 then that will be a 33% increase in less than 1 year. Sustain a 33% increase and you are at $10 in less than 4 years.
By the way, just a reminder that people could cut their commuting costs by 50% just by carpooling with one other co-worker. Not everyone can or will do this, but when we get to $10/gal I bet a lot will consider it. Implementing widespread carpooling would not necessarilly have any negative economic impacts -- except for the petroleum industry.
I completely understood you weren't suggesting such a price tomorrow. Still my points posed remain and it was why I wondered: "at what price point does such price demand destruction gather enough momentum to be near impossible to stop from tipping all the above sort of negative feedback effects into a near impossible to stop economic snowball-from-hell?"
I guess we'll soon see.
Actually IMO it wouldn't take much, maybe 4.00 to 5.00 if tax based but with the exception of forcing cash payment.
This way you soften the impact on the rest of the economy which at this point is credit based anyway (you would need to outlaw cash advances on credit cards, but that is a stroke of a pen) and transport costs wouldn't go up much if basic transport needs (commercial diesel?) are exempt from the fuel tax.
It's just the carrot that doesn't work.
A few $ tax on each gallon and making gas payable in cash would be a extremely well working stick.
Only problem is that they would probably need the National Guard to enforce it, and they are somewhere else.
Catch 22, eh?
Something I would love to see some statistics about:
One can divide energy or fossil fuel consumption, into two categories: end consumer use, and use somewhere along the chain of providing some product or service to an end consumer. The lines are a bit arbitrary, like any sort of accounting, but still...
For example, if I drive to a coffee shop for a latte, the gasoline I burn is end consumer use. Let's even say that the gas burned by the guy behind the cash register to get to work is also end use. But the gas burned by the delivery truck that brought the various latte ingredients to the shop, that is not end-user consumption.
What fraction of gasoline usage is end-user consumption?
If I choose to walk or bicycle to the coffee shop, but I buy the same latte, then the total fuel consumption involved in my errand has not dropped to zero.
I consume fossil fuels both directly, by driving or flying or taking the bus &c., and indirectly, by buying goods and services that required fuel consumption.
How much of what is required is a change in indirect consumption?
Of course, goods and services can be provided by a variety of means, some consuming lots of fuel, and others consuming much less. But these shifts in process don't happen overnight.
Anyway, whenever I hear that we can solve the gas price problem by just driving less, I always think that only half the problem is being addressed. But probably not really half - I would love to get a better sense of the actual fraction!
My first web search turned up:
http://www.mitpressjournals.org/doi/pdf/10.1162/1088198054084590?cookieS...
which cites a number of studies where the fraction of indirect energy consumption ranges roughly 35% to 65%.
This is why the indirect savings of Urban Rail SYSTEMS exceed the direct oil savings (getting people out of their cars).
Urban Rail promotes the "other TOD" (Transportation Orientated Development), a more energy efficient urban form.
On a related note, Zara's, my neighborhood grocery can undersell Walmart for milk.
Why ?
They get it from Brown's Dairy, 7 blocks away :-)
All-in-all New Orleans is at a low energy point for transportation (ocean shipping, closest port to the Panama Canal, Mississippi River (N-S) and Intercoastal Canal (E-W) barge traffic and six Class I railroads with what was (is ?) the busiest railroad bridge in the world).
Best Hopes for TOD,
Alan, typing from a local coffee shop today that I walked 4.5 blocks to
PS: I had some trouble with your link. A message about cookies that did not make sense
Maybe this link will work:
http://www.mitpressjournals.org/doi/pdf/10.1162/1088198054084590
I think walkable neighborhoods can have a huge multiplier effect. Mass media, especially television, is a huge force in cultivating the desire to consume, consume. If people can find personal satisfaction through interactions with their neighbors, hanging around in neighborhood society instead of sitting on the couch passively absorbing the barrrage of marketing messages, it can change what people desire, the set of markers that people use to assess their own status.
Beyond that, if people know their neighbors, they can share tools, hand-down used clothes, help each other out when somebody gets sick. Life with a local community is vastly more efficient!
An excellent point !
I live frugally, I spend MUCH much less than my 3 siblings (Phoenix, Austin, Manhatten) and am certainly the poorest of the 4. I also think that I am the happiest and certainly the most fulfilled of the 4.
I have gone negative financially since Katrina, but amidst the misery and suffering and devastation, I am as happy as I have ever been ! The emotions are intense though and I must step back into the calm of doomer porn on TOD :-)) I have a strong streak of empathy.
There may be 1,000 people like me here in New Orleans and we have come to recognize each other. Actively, even heroically helping, and having the time of our lives doing it ! We sometimes pass people to help off to each other. A lose network :-)
Being engaged socially is a major plus, with many benefits.
I see the social isolation endemic in Phoenix and wonder.
Best Hopes,
Alan
Much like you, Alan, and apropos JimK's comments about community life, as much as I am pessimistic about what lies ahead of us, I am also figuring it will be an incredibly rich emotional time for those who are in a good community.
I believe I am located in one such place with a high level of community involvement, good old common sense, and a lot of practical skills that should come in handy when TSHTF.
Best hopes for community resiliance.
I thought suburbia was built because people "wanted" exactly the opposite thing - to get rid of their annoying neighbours and run away from the unsafe things. Makes you think whether it all comes down to the consequences of giving people what they "want".
Hi Alan,
Thanks for more description of your "daily life"!
It helps "argue" for some "best mitigation paths" for the often-discussed social and political obstacles.
re: "Actively, even heroically helping, and having the time of our lives doing it !"
Brings a smile - and a reminder to re-orient myself.
Just to clarify -- this new poster on TOD who calls himself Jim K is not me. I don't know who he is, but he should not be confused with the author of "The Long Emergency."
Jim Kunstler
Saratoga Springs, NY
A friend of mine grew up in Labrador. She told me that if new folks moved in there, it'd be about 5 generations before their offspring wouldn't be considered newcomers. I've been posting here for over a year now - is there any official TOD threshold?
What's really difficult: my middle name is Herbert! I have seen Mr. Kunstler referred to as JHK - oh, it does set alarm bells off in my mind: who is trying to impersonate me! So I understand the sensitivity. But I've been carting those initials around for 51 years now, so I'm even less likely to give them up!
Since the issue came up: I live outside Portland, Oregon these days & work as a software developer in the electronics industry. I studied physics in college, where I also got a bit into geology and was introduced to Hubbert's work.
Hey, I don't have any past-due debts. At least you're not getting calls from collections agencies. The last guy that had my current phone number, whew!
LOL!
"You can never solve a problem on the level on which it was created."
Albert Einstein
Hi,
Interesting comments, everyone.
It occurs to me (to be "devil's advocate" for a moment), unless the "man" understands that the geologic supply is limited, the rest makes sense, really. I mean...the infrastructure was developed over time (previous generation, not this one), so if "the man" did what he was told to do and supposed to do (work hard), he has the expectation of success within the immediate society - no?
No one told him that any of the variables would change. The invariable of availability is part of the landscape, artificial though it is.
What is the value of a house? Simple: what it sells for. That is, IF it sells. There's plenty stories of foreclosure auctions where homes don't sell at all. This is May. Wait till you see October, with millions more mortgages resetting, and gas prices at $X a gallon.
What is interesting is another take on that very same event, this from the San Diego Union Tribune:
http://www.signonsandiego.com/news/metro/20070513-9999-1m13auction.html
So it seems there was plenty of interest, but some folk thought the prices were still too high. Note that Southern California had tremendous housing price increases and IMO few people here have the incomes to truly afford the overpriced condition, so a lowering of price of 10%, even 30%, will still leave SoCal houses very highly priced compared to many locations.
I wonder if any of the people who went through foreclosure were able to go back and purchase a condo right next store to their old one at half the price, thus making the same condo affordable again.
Tom A-B
Who would give them a loan?
Good Point!
A question I posed earlier: does it make sense to own non-agricultural residential (or commercial for that matter) real estate anywhere?
Alan Drake had a plausible reason for owning a highly specific type of real estate: if you buy or build a relatively small highly energy efficient housing unit, in the right area.
The problem is that the typical stand alone US housing unit is large, in a suburban area, and very energy intensive, i.e., the real estate melt down is in its early stages.
One could make an argument for buying the right kind of properties, at some point in the future, for example that could be subdivided and made more energy efficient (and close to mass transit lines), assuming more flexible zoning restrictions. But that point, IMO, is off in the future.
WT, I purchased a home 10 months ago in Galveston that meets that criteria, and I paid $80K for a 1500 Square foot house about 4 blocks from the Gulf behind the Galveston Seawall. My total expenses, including taxes and insurance and utilities run about $850/month. I've had to put in another $10K for remodeling, and I'm about 1/3rd through with my improvements. I'm 2 blocks from the city bus, within 1 mile of several major employers,and within 3 miles of five groceries,a great library. And, I reguard housing as a consumer item as I must live somewhere. I pay my housing costs with 2 days work a month.
My thought on housing is that they will probably try to inflate the economy to get rid of the horrendous debt levels, and prevent massive bankruptcies. So, owning inner city property near transit and work will be a good investment if the rate is fixed.
Across the street is a house that sold for $40K a year ago. The purchasers put in another $40K in remodeling and are attempting to sell it for $139K, and have had it listed for about a year. Its a two bedroom and cute, but only about 900 square feet. They probably have to get at least $100K in order to break even since like most flippers they are in hock to their eyeballs.
But, um....Galveston? That's kind of in harm's way, isn't it?
That must be the one that sold for 40K, and took another 40K in remodeling.
The good news is plenty of scrap wood for the woodstove.
Unless it's all plastic that's been shaped to look like wood!
The photo shown is from the great hurricane disaster of over a century past. Galveston has successfully weathered hurricanes since then because of its seawall and its levees. Older homes built in the city proper tend to be considerably above the surrounding land area and behind the seawall itself, both of which give advantages in lower intensity storms. Of course, in the event of a high intensity storm, you simply evacuate. To not evacuate is foolish.
Galveston is a wonderful small city though financially downtrodden somewhat. Bob's choice is not a bad one at all, though I personally would simply choose further inland (and have) for both weather and climate change reasons.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Leanan, I have a 14 ft concrete reenforced with granite aggregate and steel seawall between my house and the Gulf. My house survived the 1900 storm, and several hurricanes since. Of course, there ain't no free lunch, so I have flood and windstorm insurance,and they cost about $1800 a year for my house. The year before last when Rita threatened Galveston I went fifty miles north-east and stayed with my father at his second-floor senior citizens apartment in Houston.
My stuff is just stuff-i'd hate to lose it, but its just stuff.
I'm 4 blocks from a very good wade fishing location. On Saturday my son and i bought a pound of bait shrimp and caught 8 whiting that we kept and fried for dinner with a salad, plus a bunch more whiting and sand trout we threw back.
Citrus,figs, mangos and avo.cados grow very well here. The seabreeze moderates the temperature, and it seldom freezes.
The wind is off the gulf and unpolluted most of the year. Since I'm a landman, I have to travel most of the time, but there are a world of oil companies in Houston using contract landmen, and its a business I expect to thrive in the post-peak climate. There is the University of Texas Medical Branch about 1/4th of a mile from my house, so the health care is great.
I'm sure there are prettier places than Galveston, but I love it. I'm sure there are safer places from Hurricanes, but we're real low on the earthquake threat or forest fires. I doubt anyone has ever died in a blizzard, and very few in tornados not connected to a hurricane.
I know.
But I really think things are changing. That what's happened in the past few decades is not necessarily a pattern for what is going to happen in the future. (That is a theme in Diamond's Collapse - that humans think what has happened in the recent past - a few decades, a few human generations - is how it will always be. Even though nature works in longer cycles.)
Many geologists are calling for a "managed retreat" from the coasts. I don't know if it will be managed, but I do think there will be a retreat. Between peak oil and global warming, insurance will become unaffordable, infrastructure unsustainable.
Bob, I don't know Galveston, but while the general line of thought is probably valid, in most any major US city and near the inner city there is a very high chance that it would not be for the simple reason that the property has to survive first contact with a crisis.
It might be a good way to go after this blows over though.
musashi, I've placed my bet and will take my chances. But, at 55 with diabetes, in a die-off I'm dead. So I'm planning for a worsening in the general economic circumstances here in the US, but not a total collapse like is happening in sub-Saharan Africa. More of a Soviet collapse than a Congo descent into savagery.
Yes, I can see your point (I'm significantly older then you are) and hope you are right.
I guess I'm just a old warhorse that is going to play it out for the hell of it, come what may.
One of the "tricks" I read about happened when a contract was written and the loan applied for, it was in the records as a 'sold" house. If the loan did not go through, which started to happen frequently and probably still is, it does not revert back. Its still a sold house to the govt. stats.
Quid Clarius Astris
Ubi Bene ibi patria
You can't make this stuff up: from the Housing Bubble
It looks like they increased their "cash flow," i.e., borrowed (including refinancing costs), about $80,000 per year for five year.
C R E A T I V E F I N A N C I N G !
They can always mortgage their kidneys.
For those for whom a house is a home and not an investment, the answer to the question is 'priceless.' There has always been a huge danger in turning any of the 'basic needs' (food, clothing, shelter, medical care, education... last two my additions) into quickly traded commodities, and we have done this with all of them. Now they are all subject to whims of highly speculative marketplace contortions.
Crude prices are down a little, gasoline supplies are up a little but pump prices at our local station are 15 cents a gallon higher this week than last. What gives???
In the latest report, gasoline inventories only increased on the West Coast, which is isolated (in regard to gasoline) from the rest of the country. Absent California, gasoline inventories fell again, by about 700,000 barrel.
So, the inventory situation that produced spot shortages in Iowa and Colorado (terminals and gasoline stations temporarily running dry) has only gotten worse in most of the country.
We are beginning to see that perhaps gasoline is not so fungible as previously thought. Different fuel mixes, for different environments and different environmental regulations can further fragment the market. How will the other 49 states feel if California has gas and they don't?
As Professor Goose said elsewhere, this might be a very interesting summer.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
I posted this at the end of yesterday's Drumbeat, but wanted to give it more viewership. It sounds quite plausible.
Interesting new theory on honeybee CCD:
Beetle and Yeast Responsible for Colony Collapse Disorder?
http://technocrat.net/d/2007/5/13/19745
Mutli-Trophic Interaction Facilitates Parasite-Host Relationship Between An Invasive Beetle and the Honeybee
http://www.ars.usda.gov/research/publications/publications.htm?SEQ_NO_11...
Thanks for the links.
Fascinating example of evolution with yeast and beetles. I would expect more observance of honey bee swarming to account for CCD.
We may find CCD has multiple causes.
Here's a link to another ag related story--Peak milk. Not really, but it seems the price of many foods, from pizza to chocolate will be affected. And there may be more effect on third world nutrition than tortillas.
"Milk prices worldwide are rising at the fastest rate ever and won't be falling anytime soon because of growing demand in China and Latin America and dwindling government supplies."
http://www.bloomberg.com/apps/news?pid=20601109&sid=aYY2c5.WySz4&refer=home
Dairy is an example where PO and GW combine to create a double whammy. If drought cuts local milk production then milk products have to be transported some distance at increasing cost. If there is no break in the Australian drought I guess more milk powder (price up 60% this year) and cheese will be brought in from NZ. There will be bidding war with the Brits and Japs who also like NZ dairy except Oz will have a freight cost advantage. We'll sell them uranium to pay for it.
I take it that was an ironic joke? NZ (famously) is not a uranium buyer, and likely never will be.
Remember Michael Moore's 'Bowling for Columbine' take on the Fear Factor, and the 'Invasion of AFRICAnized bees, bigger and more aggressive than the nice little European bees'?? Now it's African Beetles? The Cell Towers seemed like a neat, techno-babble diversion.. but we'll see.
I read a post by a Scotsman who has an 'Organic Only' Bee Business, and says that of the 1000 or so members of this group of organic bee-keepers, NONE has suffered a Colony Collapse. It was a private posting, so I don't offer the link, but I think I recall Eric Blair saying this was his experience as well, thus far.
Heaven forbid we let this GMO story, or the Industrial Beekeepers who spray the hives with insectisides take hold.. 'What we need is a diversion..'
Natural Gas passed the $8 mark this morning. Stands at 8.06 as of this writing. Isn't this the low demand season for NG. Its been slowly climbing since the end of winter.
Quid Clarius Astris
Ubi Bene ibi patria
The summer is a high demand season due to Air conditioning and power generation.
Maybe just a preview of what is coming then, summer is just around the next corner.
Woohoo! Time to get those danged geo-thermal internet pipes!
I saw the presentations over the weekend.
In particular, the "ocean power is the last frontier of cheap energy" was interesting. No details beyond tidal power, wave power, etc. But a good trailhead for thought!
Natural Gas for January, 2008 delivery is selling for $10.03 right now.
With a few more CNG cars available, we will probably see natural gas and gasoline (oil) move in lock-step. As far as electrical generation goes, it's sad to see high-quality natural gas being used in non-transportation situations where wind, nuclear, hydro, tidal, etc would work just fine.
I found this story interesting because I really don't expect to see press releases such as this:
TransGlobe Announces Egyptian Dry Hole
Rigzone has plenty of stories on discoveries, but dry holes? Perhaps is was reported because they did find a whiff of hydrocarbons (but not where they were looking):
Every morning I read the NYT and the WSJ. I feel like I'm reading Pravda, looking for subtle hints of what's really going on. The discussion here is a completely different world. One or the other is fantasyland. Either everyone here is making it up, conspiring to deceive, or our major papers are verging on complete irrelevance.
False choice - it's entirely possible that both or neither are true.
The most obvious choice you're missing is that many people here are simply and honestly mistaken. There's lots of potential reasons for that (people who don't "believe" are unlikely to seek out or return to sites like this, the tone can be hostile to "non-believers", groupthink and confirmation bias, etc.), but the simplest and IMHO one of the most likely is simply that reasonable people can examine the same evidence and rationally come to different conclusions.
No conspiracy required. From anyone.
Pitt: What you miss re the MSM is that there is no "conspiracy", they are simply trying to make a living. Set up a fantasyland scenario whereby newspapers make more money if their articles are factual, well researched and relevant to the actual needs of the society, and you will see top-notch newspapers literally overnight. Their only job is to increase circulation to increase ad revenue- period. Most adults realize that by 2007 newspaper reading is for entertainment purposes only (if that).
Never said there was.
Neither did the poster I was responding to.
You just appear to have gone off on a tangent.
Any evidence backing up your claim, or are your posts "for entertainment purposes only"?
Here's one fairly recent and informative article about the economic and political pressures on the NYT: Panic on 43rd Street
But really, Pitt the Elder, if you want to argue the fact that MSM, and even the NYT, are not driven by the corporate interests of profit, for which "entertainment" is the name of the game now a days rather than public interest "investigative news reporting," you should be the one doing some homework.
You can start with: The Media Monopoly, by Ben Bagdikian
Then try: Danny Schecter's "The More You Watch the Less You Know"
Also: Project Censored
How about: Bottom Line Pressures Now Hurting Coverage from the Pew Research Center.
If this isn't enough "evidence" for you I can provide a lot more, but I suspect you're not really interested in disputing any of this. The truth is that the MSM, of which the NYT is a full fledged member of the ruling clique, is more about being an info-tainment provider than news useful to an informed citizenry.
And when it comes to the NYT and PO, that's like looking for Iraq's WMD!
Why would I want to? I've never suggested anything of the sort.
What I have suggested is that most large media outlets are not devoid of useful information, and hence can be read for informative as well as entertainment purposes. The simple fact that major newspapers cover at least some important world and national events is evidence of that.
By the way, none of your links work. Not that they look like they're anything other than "media doesn't cover enough (of my preferred news)", which may suggest that media is poor, but not that it's useless from an informative perspective.
RE: the links not working. Oops! I goofed on the tags.
Well, here goes again:
The Media Monopoly, by Ben Bagdikian
Danny Schecter's "The More You Watch the Less You Know"
Project Censored
Bottom Line Pressures Now Hurting Coverage from the Pew Research Center.
But as long as you're playing a semantics game, I didn't ever suggest the MSM weren't covering "at least some important world and national events," but what they do cover and how they do so more often than not is largely "useless" to providing citizens with information in a context that would lead to better understanding.
WRT to our energy use dilemma, the NYT is truly useless. Case in point: Oil Innovations Pump New Life into Old Wells from March 5th, 2007
This article has been deservedly critiqued here: Deconstructing the New York Times, as well as here on TOD
Or how about any NYT reporting on the Hirsch Report or the more recent GAO's Crude Oil: Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production?
A quick search of the NYT's own search engine reveals they reported zero, nada, zilch on either of these reports.
Such significant information that could prove of great value to making informed decisions and expressions of concern to their public officials is totally lacking! (Edited to add: This sort of breach in our Republic's 4th estate responsibilities is damning and yet all too typical today of our key media outlets.)
Meanwhile they waste miles of paper space for info-tainment purposes on a daily basis. So, sure they print a lot of information, but what good is all this information when it misses covering such important issues that should be front page coverage.
I think it's clear that they (meaning their corporate bean counters) don't want too much hard reality intruding on their money making info-tainment. But, hey, if you're happy with this state of affairs, alright for you. Some of us are not, and that's what BrianT was commenting on.
(Also, how about asking yourself how it could be that a large number of American's still believe that we found WMD in Iraq, or that Iraq was involved in 911, when neither of these things are true. Essentially, it boils down to the fact that the MSM profits quite handsomely on obfuscating and confusing the public with all manner of news information offered up as entertainment.)
It's not "a semantics game" - I'm pointing out that you're committing a straw man fallacy by attacking a position that I've never held.
Now, your assertion...
...is qualitatively different from the assertion that I challenged for lack of evidence. You're making an opinion statement about news, and I may or may not agree. The previous poster was making an assertion about what "[m]ost adults realize", which is an assertion of fact, rather than of opinion. If he'd said "I believe that most adults realize...", I wouldn't have hassled him.
Picky? Of course. I'm a scientist by trade, so I know what it takes to make a sound argument. The majority of arguments on TOD are little more than statements of opinion offered as statements of fact, and that creates the risk of confirmation bias and groupthink making people utterly convinced about "facts" that are utterly wrong.
Not everybody needs to cite sources and use data as aggressively as RR, SS, and EM, but separating belief from data is an easy first step. And probably the most important one.
Confirmation bias, groupthink, and vetting information based on how it compares to currently-favoured beliefs, rather than how it's supported by evidence.
i.e., exactly the things I'm arguing against.
Moreover, I disagree with your assertion that that's the fault of all the major news media. Based on my experience, it's much more likely to be due to insular, self-referential web communities, like I would prefer to see TOD not be. I occasionally lurk at freerepublic.com, for example, simply to get an idea how the right-wing fringe is viewing an issue.
The answer is, usually, "in childish lock-step".
News reports there are hailed as gospel if they come from "correct" sources, or contain "correct" information, whereas stories from "wrong" sources are reviled out of hand - and often helpfully labelled with tags like "barf alert!" so you don't even have to read it to know which it is. Anything that disagrees with the group is automatically wrong until evidence becomes utterly overwhelming. Failure to report the "correct" stories is not merely differing priorities, but abrogation of responsibility to the point of irrelevance, or even left-wing conspiracy. Evidence is secondary at best, and is usually irrelevant.
Compared to that kind of self-referential reinforcement of pre-existing ideas, I think regular news media has relatively low culpability in keeping the lunatic fringe lunatic.
Godraz: Very impressive rebuttal.
You may also be interested in http://www.prwatch.org/
VNRs are more common in the US than here, I believe, but we are all being subjected to them to a lesser or greater degree. Free corporate propaganda makes for cheap "news" items...
The books that they sell on their site are well worth the read too, for a more indepth look at how corporates control public perception.
"You can never solve a problem on the level on which it was created."
Albert Einstein
I don't think you've contradicted his point, which is that, between TOD and NYT/WSJ, at least one is deeply wrong about their overall vision of What is Happening in the World.
This could be so even if neither is reporting direct falsehoods.
The first thing you must understand is that 99.9% of US journalists don't know very much of anything about the subjects on which they are reporting.
The second thing you must understand is that the MSM is a business, and they are first and foremost in the business of keeping their customers and advertisers happy. This means not telling people bad news that they don't want to hear, and not saying anything that is going to upset the advertisers. (Reporting on other people's misfortunes, however, is hugely popular and profitable.)
The third thing you must understand is that the most important news does not lend itself to 30-second soundbites or one-column McStories. Most Americans lack the attention span or patience to learn about complicated issues like peak oil or global warming. Lack of demand = lack of supply.
The one thing to be said for US media is at least they don't have the gall to name themselves "Truth" (= "Pravda" in Russian).
I personally find UK media + Internet blogs to be a much more reliable source of information -- if you know how to intelligently filter them.
davebygolly,
Try reading the Financial Times. Sign up for one of those free trials. Here's some quotes from a recent story about India's infrastructure
I find the FT more "mature" than the WSJ & NYT.
GeeWiz, it's important to read Pravda in a society like ours. Long as you keep your expectations adjusted and read elsewhere, as you so clearly do, it's no problem.
I think I started treating NYT as Pravda about 1966.
Mebbe you should give a read to an older classic like Chomsky's Manufacturing Consent.
I suggest that you try the Financial Times I find they are more receptive to the idea. In fact, they even printed some of my letters.
I just got back from a couple of weeks in Switzerland and Italy. Since I went with a friend who had lived in Switzerland for six years, we were able to adapt quite easily to using trams and trains and the like. Even though another friend loaned us a car for the duration, we used it only minimally, riding trains as much as possible instead.
I must say, I now understand Kunstler's remarks about the US rail system much better than I did before. In both Italy and Switzerland, there are wonderful fast quiet electric trains going all over the place (very unlike here). They're frequent, on time, well used, and pleasant.
One of the most striking features of the experience for me was the difference in the level of stress between freeway driving and sitting in a train car watching the Italian countryside go by. The train ride was much nicer and I got to see a lot more--and I like driving--and I like driving in Italy better than in the US. The trains allowed me to relax and enjoy the trip much better than I ever could have by car.
...and they save energy!
Having traveled by rail most of my life I can confirm that - traveling by rail is much more pleasant and rewarding experience than by car. Having said that, there are significant drawbacks - rail can not get you around town (trams/metro excluded), anywhere in the coutry etc., and in addition it is hard to use it when carrying a lot of baggage.
I have thought a lot of a system that would combine the efficiency of the rail with the freedom of the car. I think in future we may very well have combined rail/electric cars service - where you use fast rail for the first up to 300-400miles of the trip. On the destination you will be awaited by a cheap all-electric car (even 30-40 miles range would do) that can take you around town. Even in US with its low densities such system could cover >90% of the population.
LevinK,
The problem with the U.S is that most of us use our cars for the wrong reasons.
There is no sense using a car for a commuter trip that is essentially identical 5 days in a row 50 weeks a year. Ditto for the grocery shopping trip, or the trip to the soccer field, or other sceduled event to gathering points. Without public transportation a person must use a personal car.
A personal car would still be required for a family vacation in the Midwest and west. Most farmers and ranchers need them all the time. Distances are too vast with unique destinations without population. But if almost every U.S. household shrunk down to one car, and didn't use it except occasionaly on weekends and for vacation, gas consumption would drop enormously.
The U.S. cannot seamlessly move to that vision as long as efficient public transportation doesn't exist. That is our problem and it won't change as long as governement, business and energy decision makers keep telling us there is no problem with personal auto's for commuting.
And the Swiss are investing 31 billion Swiss francs over 20 years in a a variety of rail improvements (more than half in trans-Alp tunnels, but also many other improvements).
Adjust for population and currency, and this is comparable to the USA spending $1 trillion !
Best Hopes for Swiss Rail (and Italian too),
Alan
I lived in South America for quite a few years, and while we had several cars we used the train and subway to go into the city as it was much more relaxing then driving and you didn't waste time looking for parking.
There is a lot of nightlife and a dinner and a movie often extend to 2 am.
What made it possible is that public transit was totally and absolutely safe even at that time. This will never happen in the US.
This will never happen in the US
MANY more times than once, I have stood at the corner of Carondelet & Canal (opposite Bourbon) with the other drunks and off duty workers waiting for the St. Charles streetcar to arrive at 3 & 4 AM.
An entertaining time :-)
I have noted more people walking (and bicycling) in the wee hours of the morning in my neighborhood than I observed in Manhatten, despite our lower density.
Best Hopes for 24 hour service :-)
Alan
Well, I'm not worried about my personal safety either :-), but I would probably not take my daughters with me on the public transportation I have seen in the US, particularly at night time.
I freely admit I have only seen some of it.
There is an interview on msnbc with John Hofmeister, the president of Shell Oil.
Hate to tell you this John. But that is an article of faith, not a scientific opinion.
Ahhhh! My eyes, my eyes.
It's worth noting that he never said otherwise.
He's right, though. Even if we immediately started transitioning to a post-oil infrastructure, we'd be relying on the existing infrastructure for decades. A 5% reduction in oil demand every year still leaves the US consuming over 10Mbbl/d of the stuff in 2020.
The only likely alternative to continuing to use the existing oil-based infrastructure while we build a new one is societal collapse, and - no matter how much some people here seem to be cheering for it - most people will work hard to avoid that.
Fortunately, even (data-based) peak-is-now predictions tend to suggest there will be tens of millions of barrels of the stuff sloshing around every day in 2020. Just fewer tens of millions than CERA might suggest.
Pitt: Your estimate of US oil consumption in 2020 assumes the economies of China and India conveniently discontinue their ascent in GDP and use of crude oil. Good luck.
It does nothing of the kind.
In fact, it is nothing of the kind - I made no "estimate". All I said was that we're going to need to use the current infrastructure for a long time, even in the case of a fairly-rapid weaning off oil that starts immediately.
You're reading things into it that were never there.
My problem with this guy, is that he's essentially saying, we go on as we used to until science comes and saves us from our oily ways. Instead of pointing to science he might as well have said Jesus.
Or maybe not, since if Jesus does return he will be going to a place where every day is like Halloween.
There is no plan B.
I think you may have responded to the wrong post.
You must have, since I've never said anything even REMOTELY like that.
If you'd like to address something that I actually said, that would be much more useful.
It's pretty clear to me that "this guy" referred not to you, but to John Hofmeister.
I mean, it would be pretty weird if the post was addressed to you, and he called you "this guy." Essentially, talking about you as if you weren't there.
He's addressing what you said, but talking about Hofmeister, not about you.
Not really.
Addressing someone present in the third person is an argumentative tactic for isolating and attacking them. By attacking someone present while referring to them as if they were not, you implicitly suggest they are an outsider to a group that you and "the audience" (people not involved in the argument) belong to. The idea is to use the us-vs-them reflex to make your accusations more likely to stick.
Not sure how common it is, although I have seen it before. I grant, however, that it's probably more likely I misinterpreted the posts. Oops.
Although I agree with your point in principle, can you say "anal-retentive"?
I could be mistaken, but I think you are at risk of alienating people from reading your posts with that kind of nit-picking. It is important for us to be careful with our arguments/observations/etc., but sometimes it is worth NOT commenting on a perceived fault in reasoning...
"You can never solve a problem on the level on which it was created."
Albert Einstein
"I could be mistaken, but I think you are at risk of alienating people from reading your posts with that kind of nit-picking."
Hehe. NZ, I don't think you're mistaken at all. If I had to guess, it was probably Pitt who advised Clinton to say: "It depends on what the meaning of the word 'is' is."
Yes, although I don't see that it's called for.
It appears that I misread a post, so I immediately owned up to it. Someone then wondered how that might have happened, so I explained.
I completely disagree.
If peak oil is as serious as many people here believe, then it's much too serious for the goal to be "happy fuzzy agreement" rather than "an honest and objective view of the facts". Flawed reasoning - particularly reasoning based on unquestioned beliefs - is one of the worst enemies of rational assessment of a situation.
All arguments - mine included - should be carefully and skeptically examined in light of available evidence, not merely compared with currently-favoured beliefs. An argument - and its supporting beliefs - that don't fit the data should be amended or discarded, no matter how cherished the belief or how embarrassing it might be to admit to being wrong.
Which, really, isn't all that bad - you get used to it after a while. ;)
I actually have no disagreement with you, but you do realise you missed the entire point of the post, right?
"You can never solve a problem on the level on which it was created."
Albert Einstein
No, I just disagreed with your advice.
People who are alienated by someone who points out flaws in reasoning typically aren't the best candidates for adopting sound reasoning methods anyway, as it involves being very open to the possibility that one is wrong. Scientific analysis means you eagerly look for ways in which your argument is flawed, because each error found and corrected brings you one step closer to the truth.
So if pointing out errors alienates someone, that person is acting irrationally. I can potentially head that off by dint of more diplomatic phrasing - and perhaps I should - but I don't agree that one should adopt a "don't upset the applecart" approach just to keep people ignorant-but-happy.
You might be right that such an approach would be more useful in a realpolitik sense, but (a) I don't think it would be, and (b) I'm not interested in that kind of machination. Form, I'll change - more-diplomatic phrasing is rarely a bad idea - but not function; attempting to manipulate people by strategic action is more than this is worth.
In retrospect, "this guy" may be referring to the oil exec interviewed in the article.
In that case, I merely disagree with you. I didn't find his statements to indicate that he was waiting for a magical scientific breakthrough to save us. Indeed, I didn't see particular evidence that he offered a suggestion for what was going to drive energy and oil production in the future, other than the notion that drilling in more places and non-corn biofuels would help.
He may be as much of a fanatic as you suggest, but this interview doesn't paint that picture.
This guy is a real American! the surging economies of Asia, Russia, eastern European countries, Brazil... never heard about.
It's just the US economy and their demand for oil, which determines the price of oil. My god, if this guy is investing what he is talking, he will lose great bucks!
There's no evidence he believes as you say based on the interview. He's arguing that prices will go up if oil companies aren't allowed wider drilling rights - it sounds like a political push, to me.
With regard to the WTI Benchmark Breakdown story...it misses a couple of points.
First, the day-to-day variation shows lots of scatter as the article points out. But if you look at it from a 5-day moving average (which smooths the daily variations slightly) you see that the 5-day average for WTI is almost always greater than Brent for the entire period extending back to 1990. So, the fact that Brent has been averaging higher than WTI since the middle of March is hardly conclusive proof that the WTI benchmark is "broken."
Second, and perhaps more importantly, is that when you consider the WTI benchmark weekly price compared to gasoline prices, you will find that gasoline prices and the WTI took a marked departure from each other during the summer of 2004, specifically July 2004.
Can you say "politics?" Gasoline became so undervalued compared to the WTI benchmark oil that it continued it's downward price compared to WTI's climb until just about 6-weeks before the 2004 election. At that time gasoline finally began to climb while WTI continued to climb.
Since the end of January 2007, gasoline's price climb has been much steeper than oil (WTI). However, gasoline's price climb is headed back to historical values relative to the WTI benchmark, not some devalued price that has characterized the market since July 2004. If gasoline was back to the historical relationship that existed prior to July 2004, average gasoline prices for all grades and all regions would be at $3.372/gallon rather than the national average of $3.097/gallon that the EIA reported last week.
This disconnect was very prevalent last summer when the WTI (and Brent) were reaching new highs AND gasoline was as discconnected as ever from the oil prices. Gasoline prices "should have been" at more than $3.93/gallon in the middle of August 2006, not the $3.09/gallon reported by the EIA if the pre-July 2004 trends had held.
Maybe the WTI benchmark isn't broken...maybe it's just been the devaluation of gasoline over the past several years compared to historical trends (to avoid gasoline prices in the $3/gallon range for long periods prior to elections?) that is finally bringing gasoline prices back in line with oil (benchmark) costs.
A new article has been posted at TOD:Canada.
A Political Storm Over Canadian Energy Security
Good post. Especially coupled with the BC wind-hydro story on the Drumbeat today. Thanks for calling attention to it.
Here is a picture of Prince Charles' Poundbury village, which is a model for Britain's "green" towns. The car is definitely not the center of life here.
http://www.byen.org/poundbury/images/poundbury7.jpg
I'd love to live in one of these ...
Let us not forget that Prince Charles has an entourage of around 80 flunkeys - all with motorcars and with large travel expenses. He supposedly has an ecofriendly house (really a small palace) as it is heated by wood-chips from his private forests. I hardly need point out that all the woodland in the UK would not heat the houses in the UK for a single winter.
Let us try and separate reality from spin. Please.
One is reminded of Marie Antoinette, who set up a little pretend farm on the grounds of Versailles, and would "play farm" with her Ladies in Waiting.
here's the transcript from GWB's press conference today on Cafe and Alternative Fuel Standards
For Immediate Release
Office of the Press Secretary
May 14, 2007
President Bush Discusses Cafe and Alternative Fuel Standards
Rose Garden
1:21 P.M. EDT
THE PRESIDENT: Thank you all for coming. Good afternoon. I just finished a meeting with the Administrator of the Environmental Protection Agency, Secretaries of Transportation and Agriculture, and the Deputy Secretary of Energy. Thank you all for being here.
We discussed one of the most serious challenges facing our country: our nation's addiction to oil and its harmful impact on our environment. The problem is particularly acute in the transportation sector. Oil is the primary component of gasoline and diesel, and cars and trucks that run on these fuels emit air pollution and greenhouse gases.
Our dependence on oil creates a risk for our economy, because a supply disruption anywhere in the world could drive up American gas prices to even more painful levels. Our dependence on oil creates a threat to America's national security, because it leaves us more vulnerable to hostile regimes, and to terrorists who could attack oil infrastructure.
For all these reasons, America has a clear national interest in reducing our dependence on oil. Over the past six years, my administration has provided more than $12 billion for research into alternative sources of energy. I'd like to thank the Congress for its cooperation in appropriating these monies. We now have reached a pivotal moment where advances in technology are creating new ways to improve energy security, strengthen national security, and protect the environment.
To help achieve all these priorities, I set an ambitious goal in my State of the Union: to cut America's gasoline usage by 20 percent over the next 10 years. I call this goal 20-in-10, and I have said -- sent to Congress a proposal that would meet it in two steps: First, this proposal will set a mandatory fuel standard that requires 35 billion gallons of renewable and other alternative fuels by 2017. That's nearly five times the current target.
Second, the proposal would continue our efforts to increase fuel efficiency. My administration has twice increased fuel economy standards for light trucks. Together, these reforms would save billions of gallons of fuel and reduce net greenhouse gas emissions without compromising jobs or safety.
My proposal at the State of the Union will further improve standards for light trucks and take a similar approach to automobiles. With good legislation, we could save up to 8.5 billion gallons of gasoline per year by 2017, and further reduce greenhouse gas emissions from cars and trucks.
Last month, the Supreme Court ruled that the EPA must take action under the Clean Air Act regarding greenhouse gas emissions from motor vehicles. So today, I'm directing the EPA and the Department of Transportation, Energy, and Agriculture to take the first steps toward regulations that would cut gasoline consumption and greenhouse gas emissions from motor vehicles, using my 20-in-10 plan as a starting point.
Developing these regulations will require coordination across many different areas of expertise. Today, I signed an executive order directing all our agencies represented here today to work together on this proposal. I've also asked them to listen to public input, to carefully consider safety, science, and available technologies, and evaluate the benefits and costs before they put forth the new regulation.
This is a complicated legal and technical matter, and it's going to take time to fully resolve. Yet it is important to move forward, so I have directed members of my administration to complete the process by the end of 2008. The steps I announced today are not a substitute for effective legislation. So my -- members of my Cabinet, as they begin the process toward new regulations, will work with the White House, to work with Congress, to pass the 20-in-10 bill.
When it comes to energy and the environment, the American people expect common sense, and they expect action. The policies I've laid out have got a lot of common sense to them. It makes sense to do what I proposed, and we're taking action, by taking the first steps toward rules that will make our economy stronger, our environment cleaner, and our nation more secure for generations to come.
Thank you for your attention.
END 1:27 P.M. EDT
What's the likelihood that we'll hear GWB more directly address PO in a press conference this summer?
____________________
MySpace.com/ziontherapy
Right down there with "snowball in hell" odds.
OFF TOPIC, And Sad
Benefit to rebuild New Orleans
THE BLOCKBURNER
SUNDAY, MAY 20
S.Robertson & Cleveland in the CBD
On Sunday, May 20, Handsome Willy's is proudly sponsoring "The Blockburner" an all-day street jam to benefit the New Orleans Fire Department in the rehabilitation of their firehouses, most of which remain damaged since Hurricanes
Katrina & Rita.
Some of the city's best bands and deejays have come together with local businesses to support our firefighters as they prepare for hurricane season, and we need you to help get the word out! The price of admission includes food and drinks all day, and all proceeds go directly to the NOFD.
This is a strictly grassroots event, so please help us get the word; pass this email on, place the flyer on your myspace, call all your friends, and above all, come celebrate in honor of New Orleans' first responders.
For more information, call 504-460-7365,
or visit
http://www.handsomewillys.com/blockburner.htmlfirestations
...........
The French came in immediately after Katrina and asked what were the most critical needs.
"Fire protection in the flooded areas"
They picked 5 flooded firehouses scattered around the 80% of the city that was flooded and rebuilt them in just over a month (enough for minimal coverage). Later they did two more firehouses.
The balance of the firehouses (as of two months ago, last time I checked) have still not been rebuilt due to FEMA delays. The firefighters live to double bunks in too small trailers and exit single file to respond to fire alarms.
Also, in GWBs infamous Jackson Square speech, he specifically promised the return of the streetcars. We have not even started on rebuilding the flooded streetcars and progress in painfully slow on reopening the St. Charles streetcar line (to Napoleon by late summer, finished by mid-2008). Again, the people I know at RTA get red faced describing FEMA.
Viva la France !
Best Hopes ?
Alan
PS: I will attend this benefit, one of many
Washington, DC, is not your friend, Alan. If you and the other residents of New Orleans can find a way without Washington, then take it.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Hi Alan,
Thanks (once again) for another "glimpse".
re: "The French came in immediately after Katrina and asked what were the most critical needs."
This is very significant (IMHO) -
1) To *ask*, rather than assume or "tell".
2) To think in terms of "needs".
3) Working "with", as opposed to "for" or "against".
All part of the "best paths".
Just on the demand side:
I posted a while back that the European OECD countrys demand for oil was virtually unchanged from 2003-2006 despite the fact that over that 4 year period their economies had grown something like on average 2.5% a year (approx 10% cumulative).
Much has been made of the fact that demand must be being destroyed in poorer countrys ie Africa. And yet seemingly despite this economic growth in these territories seems to be unaffected (if you ignore places such as Zimbabwe where the contraction is man made):
http://news.bbc.co.uk/2/hi/business/6653939.stm
Granted most of what passes for growth in these places is commodity extraction, nonetheless it seems at the moment that even where oil demand is curtailed (destroyed) it is not necessarily leading to economic contraction.
I think most of you guys heard about how Bank of montreal lost a ton of money on Natural gas derivatives right? Well BMO stock hardly suffered. Here is one that did. These guys did.
"Bank of Montreal (BMO.TO: Quote, Profile , Research) suspended its relationship with brokerage firm Optionable Inc (OPBL.OB: Quote, Profile , Research) on Tuesday, and confirmed two of the bank's commodities traders are on leave pending an external review." The stock is down 90% in 7 trading days.
http://stockcharts.com/h-sc/ui?s=opbl
China's April Crude Oil Imports Rise 23 Percent to New Record
http://biz.yahoo.com/ap/070515/china_oil_imports.html?.v=1
3.62 mbd