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IEA: without Iraqi oil, we'll be in deep trouble by 2015
Posted by Jerome a Paris on June 29, 2007 - 9:22am in The Oil Drum: Europe
In a stunning interview for the French (reference) daily Le Monde, Fatih Birol, the chief economist of the International Energy Agency (i.e. the intergovernmental body created after the oil shocks of the 70s to coordinate the West's reaction to energy crises) effectively says that peak oil is just around the corner, and that without Iraqi oil, we'll be in deep trouble by 2015:
Si la production n'augmente pas en Irak de manière exponentielle d'ici à 2015, nous avons un très gros problème, même si l'Arabie saoudite respecte ses engagements. Les chiffres sont très simples, il n'y a pas besoin d'être un expert. If Iraqi production does not rise exponentially by 2015, we have a very big problem, even if Saudi Arabia fulfills all its promises. The numbers are very simple, there's no need to be an expert
And as long as the US occupies Iraq, production will not increase... Houston, we have a problem...
The whole interview is amazingly frank and free of diplomatic obfuscation. He blasts biofuels ("not based on any kind of economic rationality"), he notes that Africa is suffering the most already from expensive oil, he points out that even a slowing of China's growth will not reduce oil demand, and he talks pretty explicitly about production peaks and depletion:
D'ici cinq à dix ans, la production pétrolière hors-OPEP va atteindre un maximum avant de commencer à décliner, faute de réserves suffisantes. Il y a chaque jour de nouvelles preuves de ce fait. Au même moment aura lieu le pic de la phase d'expansion économique de la Chine. Les deux événements vont coïncider : l'explosion de la croissance de la demande chinoise, et la chute de la production hors pays de l'OPEP. Notre système pétrolier sera-t-il capable de répondre à ce défi, c'est la question. Within 5 to 10 years, non-OPEP production will reach a peak and begin to decline, as reserves run out. There are new proofs of that fact every day. At the same we'll see the peak of China's economic growth. The two events will coincide: the explosion of Chinese growth, and the fall in non-OPEP oil production. Will the oil world manage to face that twin shock is an open question.
He says it again twice in the interview: the gap between demand and supply will widen, and he blasts our governments for doing so little:
Malheureusement, il y a beaucoup de paroles, mais peu d'actes. J'espère vraiment que les nations consommatrices vont comprendre la gravité de la situation, et mettre en place des politiques très fortes et radicales pour ralentir la hausse de la demande de pétrole. Unfortunately, there's a lot of talk, but very little action. I really hope that consuming nations will understand the gravity of the situation and put in place radical and extremely tough policies to curb oil demand growth
Of course, we might need to curb more than "demand growth", and actually move to curb "demand" itself, but his words are at least quite direct and explicit. Even more interestingly, he puts the finger on two important but rarely discussed items: field depletion (he mentions an 8% decline rate for mature fields, but indicates that even a 1% difference in the actual number would mean huge volumes by 2020), and Saudi reserves:
Je crois que le gouvernement saoudien parle de 230 milliards de barils de réserves. Je n'ai pas de raison officielle de ne pas y croire. Cependant l'Arabie saoudite de même que les autres pays producteurs et les firmes internationales devraient être plus transparents dans la présentation de leurs chiffres. Car le pétrole est un bien très crucial pour nous tous, et notre droit est de savoir, selon des standards internationaux, combien de pétrole il nous reste. I understand the Saudi government claims 230 billion barrels of reserves, and I have no official reason not to believe these numbers. Nevertheless, Saudi Arabia - as well as other producing countries and oil companies - should be more transparent in their numbers. Oil is a crucial good for all of us and we have the right to know how much oil, as per international standards, is left
While not a direct attack on Saudi numbers, this is by far the most explicit voicing of doubt about their reserves from any official of a major organisation that I have ever read. "No official reason to doubt"??? That's a pretty gaping hole there to sneak other kinds of doubts... He notes that he believes Saudi Arabian promises to be able to bring its capacity from 12mb/d today to 15mb/d in 2015, but notes at the same time that (i) it's the only place in the world (other, potentially, than Iraq) where production can grow and (ii) it's less than the expected demand growth by then from China alone.
While none of these facts should be surprising to my regular readers, it's quite something else to see them explicitly stated by one of the top officials of one of the major energy watchdogs of the Western world.
The only question left is - will our governments listen, now?
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Jerome - thanks very much for this translation - amazing stuff? So if Birol is chief economist at IEA does that mean a major shift in IEA reporting standards or will he be sacked?
I sense a significant increase in main stream media PO coverage and in growing acceptance at higher political levels. If Mr Birol wants an unofficial reason to doubt Saudi reserves he may want to look at Lies, damned lies and BP statistics, or maybe he already did?
Pardon my french, but doesn't Birol actually put it rather stronger than your translation suggests.
I read:
If Iraqi production fails to rise exponentially from now on until 2015 we have a very big problem...." ???
Classical economic theory rests on the solid foundation of the fourth Law of Thermodynamics.
You're correct. "if it has not risen massively by 2015" would be a better wording, maybe.
thanks for the post Jerome.
trans:
If Iraqi oil production doesn't increase exponentially from today to 2015,
/we have a major problem
/a serious problem ...
/etc.
We'll be in deep doo-doo in any case. While Iraq may be the last largely untapped reserve aboard this planet, it can only plateau the peak. Sooner or later we all must deal with the slow but maddening decline. After all, demand is ridiculously inelastic. Demand only drops due to demand destruction. Since Africa is notorious for poverty, demand destruction will occur there first. But it's not just Africa. Consider the case of Iran, of all places.
As we type, Iran became the first country to invoke gasoline rationing. Iranians decide to suddenly torch gas stations in protest, which only makes matters all the worse. Talk about poetic justice. What better place to have to invoke gas rationing. All we need to do is shut the gasoline valve the rest of the way to bring Mahkmoud Ahmadinejad to his knees. And be sure to take a monkey wrench to the valve handle to shut it tight. Then, we just sit back and watch the Iranians do our dirty work for us.
All the better, Europe will have plenty of incentive to shut that valve on Iran. Officials of the EU need to get re-elected so anything they do to slow the inevitable rise in petrol prices will get them a constituency. So, shutting the valve on Iran means more petrol for Europe.
That'll leave our friend Mahkmoud a rough choice. Either build refineries OR continue trying to build a nuclear bomb. But he cannot have both. He had better choose wisely. The power over Iran is in the hands of the EU officials. They can shut that valve or leave it partially open. The EU can effectively say "Either you cut out your nuke programme or we finish shutting the valve". Welcome to the post-peak world!
Petrol prices high enough yet? Just wait!
Thanks for including the original text along with your translations. I hope that future article translations will follow this example.
I first got on the topic of the oil peak from Jay Hanson's infamous dieoff site. When I heard GW Bush wanted to invade Iraq I knew what it was about. He wanted for his friends a nice largely untapped oil province to make gigabucks from to plateau the peak. From the day gas was 99 cents/gallon in 1999 on I knew that gas prices were going to rise.
I took Bush's Iraq invasion to be a sign that we are getting awful close to the oil peak. I also see the 9/11 disaster to be a perfect excuse to generate fear to distract the public. It sure worked! Fun conspiracy theory: The Bush and bin Laden family are awful close. Bush could have easally called up bin Laden to order the 9/11 disaster like ordering a pizza. Then, Bush sits back and lets 3,000 people die and two buildings go down to make the excuse. Believe it or not, your choice.
Have some fun with Google about 9/11 oil and the like. There was a book put out by an European about just the conspiracy theory. It's a fun read. And, yes, Peak Oil is barely mentioned.
Some fun things:
The Bush family are a family of oilmen. They are PO - aware.
The Arabs are also PO - aware.
Our "intelligence" agencies are PO - aware. (think of the Soviet oil peak of 1988)
The Bush and bin Laden families are intertwined about oil.
Osama bin Laden was, after all, one of the CIA's employees. (he became a loose cannon!)
Put that all together and you can cook up an absolutely killer conspiracy theory! :)
Petrol prices high enough yet? Just wait!
Re increase in media coverage.
The present trend on the internet on peak oil seems to be down- whereas there is an slight upwards trend in the Blogsphere.
Google trends says:
http://www.google.com/trends?q=peak+oil&ctab=0&geo=all&date=all&sort=0
and Blogpulse says ( last 6 months:)
http://www.blogpulse.com/trend?query1=peak+oil&label1=peak+oil&query2=&l...
kind regards/And1
"Peak Oil" is not the only words searched on when people are trying to discover when oil peaks. "Oil Production" is the word I most often search on because I want to know who is up and who is down in oil production this month.
Oil Production gives an entirely different profile and in the Blogpulse, well over twice as many hits.
And there are many other words peak oilers search on. Just measuring the hits for "Peak Oil" does not give an accurate picture of things.
Ron Patterson
These things can be read so many different ways. The insurgents are destroying the world economy etc etc.
I am yet to be convinced the production potential is there? I am not saying it isn't just the situation exists where someone can be blamed for removing access to it..whether it exists or not...
and thats the problem with this Iraq mess... no clarity
Boris
london
Given the atrocious reservoir management during the oil for food sanctions era and the lack of investment and development of Iraqi oil it's crazy to think that today's 2 million barrels per day represents the geological potential of the province. The fact they can still extract so much indicates a resource capable of delivering much more with aggressive development.
Wouldn't that have damaged the reservoirs and thus limit future production from those damaged fields?
This is the problem. You may well be right but no one can really say, and moreover people can make audacious claims that oil price volatility would not exist if it wasn't for..
US intervention
Iranian intervention
Islamic fundamentalists
etc
etc
...
how much credence does one give to the pre war claims that Iraqi production can be raised to 12mbd... one such figure bandied about at CSIS in the run up.
I have seen some very wild claims about what is out there. Have you a sound source or perhaps some idea of Iraq's potential?
I am totally open to any evidence anyone has especially given I must confess to total ignorance on the subject
Boris
London
Fact of the matter is in post-Saddam Iraq oil production has not been able to achieve anything greater than the pre-2003 invasion...
This is the true failure of the neo-conservative strategists. It wouldn't matter to policy makers if all this "sectarian strife", IED, suicide bombing bloodbath was going on as long as oil production at least increased (in fact, I always assumed that talk of a "calm Iraq" was bullshit--these guys knew that, they put it up as another one in a series of window dressings to moo the cattle along--the "American people".) Actually to revise that, it doesn't seem to matter that this bloodbath is going on and oil production is down and doesn't seem to be rising. La de da, policing fundamentalists who've been living under a fascist for decades, who we "supported" for a long amount of time--the neocons own point! Funny thing, is then the same criticism arises, for a different era--this time instead of from the right, from the far left, a 1980s version of the same condemnation, except the neocons only focus the 90s.
Anyway, after we get into in Iraq, we disband the Sunni army... I mean: come on, from the looks of it they specifically sent Bremer over there to fuck shit up worse... That had to be their thinking, imho. If we can't have the honey pot, we'll make damn sure no one else will die trying. This only goes to strengthen my initial argument. Want another irony? I got it straight out of this month's foreign affairs. Wolfy testifies to congress in '03 that General Shinseki is wrong, we don't need more troops. At the time, the military was not particularly happy with the war (attempting to follow the Powell doctrine to avoid another Vietnam). And, come to think of this, they still are pretty upset. The absurd irony is now the military wants troop reductions from the Iraq War--as, get this--the White House goes for a "surge". These civilians (our fearless leaders) are just playing a game, I'm convinced, even if a deadly serious one.
Of course, we all know that oil is the primary driver (not sole reason, but primary driver) of the war in Iraq. Put hardcore conservatives in charge of our type of economy and culture, and you get this type of behavior. However, now that I think about it the Kennedy and Johnson administrations did this same type of thing, with even hazier strategic thinking (I know, I know, hard to imagine! The democrats are lousy two-faced wussies--who would of thought they were capable of starting their own disastrous wars?) The Nixonites took it over, and we know that story. Elements from the Nixon/Ford administrations created this foreign policy. Cheney, Rumsfeld, and the neocons ideological children, Wolfy, Perle ad naseum.
Point of the matter is these guys know the 70s, know how finance works--they're all ex-corporate academic types, dominant backgrounds in transnational integrated oil companies, or oil services companies (big H/KBR in the "house".) They know energy, and Iraq was/is all about energy--and the fact of matter is that oil production there has not risen in the last 4-1/2 years.
And this is because the country is a wreck! People that talk about increasing Iraqi oil production are in denial how badly this war is going. They simply don't know the history of the country, the situation on the ground, etc. I am continually astounded that 40% of the military still thinks this war is going fine and Dubya is actually doing a good job... These soldiers are goddamn Spartans, that's for sure. That's intense... My hat is off to them since they're simply taking orders from incompetent civilian strategists.
To summarize:
I'd love to hear a Pollyanna scenario for Iraqi oil production, but I'm afraid anyone indulging it would quickly enter fantasy which would simply result in me ridiculing them. But I am open to thoughts. A brutal adaptation of Goldilocks is the more likely story here, but we humans can't control where our fairy tales go very well, now can we?
Hi Boris,
I wonder also if the potential is there. Here is the HL plot for Iraq oil, with a normal trend along the edge of the envelope as an indication of potential. Pretty dismal. Unless they have a new field to open up somewhere, it does not look that they will make their 115Gb reserves.
(1960-2006 EIA data with 1975 cumulative from Richard Nehring)
IIRC the Iraqi eldorado theory is that it is essentially a new basin in the west of the country and would not follow the older production profile?
ie second peak
but then again?
Boris
London
I think Boris is right.
The pre-Iraq invasion (2003) US made Iraqi oil maps sized up Iraq reserves as remarkable and with a potential for a new yet discovered super-giant.
Ref: Maps and Charts of Iraqi oilfields: Cheney Energy Task Force
http://www.apfn.net/Messageboard/04-12-05/discussion.cgi.46.html
Various sources have claimed that Iraqi daily production using currently known reserves, but with improved recovery could mount up to as much as 6Mbpd. As for how long, I haven't seen any estimates.
Ref2: http://www.atimes.com/atimes/Middle_East/HJ26Ak01.html
Of course, as-yet-to-be-discovered fields can always produce great amounts of oil. At least to the point when they are (not) discovered and appraised.
I think Al-Husseini's criticism of the IHS Iraq oil resource estimate is a good reminder how wrong estimates can be.
is an extra 4mbd enough to mitigate this 2015 deadline?.. frankly sooner rather than later is my wish..why wait for the day of days.
Perhaps the message is Iraq won't and we are there already.
the credo is apocalypse now..assume peak now, we are there or there abouts anyway by most peoples guesses.
If Iraq really is the only screw left to turn you might as well cash in your chips now and start a new game. more stories about spanish solar power stations please.
Boris
London
What about building those recently canceled trams in Leeds, South Hampshire and Liverpool ?
Best Hopes for the English building 1/3rd as many new tram lines as the French,
Alan
Sheffield, Tyne & Wear and Manchester still in limbo.
In Edinburgh we have just approved a new tram line but it was forced through the Scottish parliament by the oppostion as our SNP leaders do not have majority vote and did not want the trams to go ahead!
Interestingly one casualty in this deal is Edinburgh Airport-city centre tram link which has been posponed/cancelled. This is likely a smart move as in post peak times I do not expect as much air travel.
SNP had mentioned peak oil on their website some time ago, so I am wondering if they are dropping in on this site occasionally. Their oppostion to the trams stemmed mainly from spiralling costs which seem to afflict many large projects these days. eg our scottish parliament building which was supposed to cost circa £50m eneded up costing £414m!!!!
Marco.
That is why I said English and not British. The Scots are doing a better job of it than Westminster. Not perfect, surely, but then no one is doing an ideal job of it.
France, Switzerland, Thailand and Brazil are, IMHO, getting large parts of the puzzle right, but NO ONE has a complete game.
Best Hopes for more steps. small and large, in the right direction,
Alan
I have to say, I don't really see the benefit of trams.
Realistically the one thing you can say about a bus route is that it regularly travels through particular points. It should be ridiculously easy to arrange recharging of electric buses at key parts of the route (say flywheel, liquid battery, even compressed air) sufficient to carry it around the rest of the route.
So why go to the expense of tramlines, overhead wires, etc.?
Trams are dramatically cheaper than the Rube Goldberg set-up you describe.
Rolling resistance of steel on steel is an order of magnitude less than rubber on concrete/asphalt (i.e. low grade diesel).
Carrying your batteries with you is an enormous waste of energy when one can tap directly into the grid (and feed back as well when braking). Remember that it is not JUST the weight of the batteries but the structure to hold them, the rolling resistance to move the batteries + structure, the limited life of the batteries, etc.
A 2004 estimate was that simple over head wires were $2.5 million/mile for double track.
The French are building new tram lines (to a high level of aesthetics typically) for 20 to 25 million euros/km for ALL costs (trams, electrical, barn, spares, controls, training, etc.) Figure the trams to last 30 to 40 years, track a century or more (how long do roads last ?)
No technology to debug#
Best Hopes for No Gadgetbahn,
Alan
# The French could not resist and put in a couple of km of no overhead wire. A "3rd rail" turns on 12 or 15 m sections when a tram is overhead (safety considerations). PROBLEMS, PROBLEMS !
In Michelin HQ city and a couple of others they put the tram de pneu. No rails, rubber tires, but other wise similar. Problematic (not nearly as bad as above) is the judgment. Higher electrical consumption as well (duh !)
The conservative proven technology solution works reliably with minimal costs per pax-km.
'How long do roads last'
Roadway deterioration is largely dependent upon the number of large axle loads, subgrade quality/drainage and freeze thaw cycles (among others).
Rural concrete interstate (say 10,000-20,000 vehicles/day) in northeast US can provide 40 years of service with relatively minimal maintenance.
Flexible pavement (asphaltic concrete) is less costly at the front end but requires much more significant investment over a similar time period.
Current design life of modern NE US bridges is 75 years.
Concrete ties in heavy Class I service (an order of magnitude greater loads than a rural interstate lane) are expected to last at least 50 years (only two decades experience). In lighter duty service "indefinite".
Heavy rail (141 lb/yard) should last 40 years in all but the heaviest service (Powder River Basin spur). In lighter duty service, a century plus is a reasonable expectation.
The Greenbush commuter rail line (pax only service south of Boston, about to open) concrete ties, 132# or 135# rail (from memory) and concrete ties should have an indefinite life span except for the wooden ties used for at grade road crossings.
Rail bridges, without salt exposure, should also have century plus life expectancies. Many 100+ year old rail bridges remain in service without any significant life expectancy issues. Others have abutment and other ancillary issues.
Best Hopes for long lived infrastructure,
Alan
There is some amount of planned design flaw in roads. One time on the History Channel on "Modern Marvels" they showed how they build a runway for the 747s. It ends up being a road on steroids built out of concrete.
A runway must be made to hold up a 100-tonne vehicle with 3 landing gear and tolerate it going 200mph. But the funny thing is that for a runway, it's only about twice the thickness of a concrete roadway meant to hold up a semi. Why not make roads like runways and get it over with? It would save the government a lot of money - and save gas on many commuters not wasting gas stuck in traffic from "road construction".
Also, a road that'll last will last for many years to come as bicycle and rollerblade users as they use it for decades. Is it too much like making sense to make a road to last more than 3 years?
Build a concrete road to hold up a semi for 20 years and you have a road that'll hold up a bicycle user for a thousand years, like La Via Appia of Olde Roma.
Petrol prices high enough yet? Just wait!
It's been done in places: Portions of the German Autobahn were built to allow tracked vehicle (i.e. tanks) travel and to be used as emergency airstrips without suffering as a result, same in places in Switzerland.
It's my understanding that some of these roads in what became East Germany got pretty much $0 spent on them from the end of ww2 through to the failure of the Soviet Union and were still able to safely handle traffic at 100 kph.
It often looks obvious but it isn't. Adjust the discount rate higher and spending 20% more now on a road is more expensive than building the whole thing over in twenty years.
It seems like you're investing in the future; You are. But every investment has an opportunity cost. You could use that extra 20% for something that has a higher return.
Alan:
Just read the above in the context of $2.5mm per mile of overhead and thought of a system powered by 3rd rail sections but with the 3rd rail confined to station platform areas. The LR would enter the station to load and discharge and at the same time would connect to electrical supply. 3rd rail would be located under platform apron in such a way that it is not open and accessible to public.
Operation would be a form of "pulse and cruise." This is reported to give the highest mileage in auto applications and should do the same in LR. Train sits in station and loads passengers while at the same time taking on energy to take it to the next station stop. Train accelerates out of station while still pulling power from 3rd rail ( and it is the acceleration phase that has the highest energy demand). LR then cruises through to the next station stop where the process is repeated.
Outside the station area the LR maintains speed through combination of momentum, or capacitor discharge to drive motors, or by pulling power from a flywheel that was energised at last station stop. I'm thinking of station intervals as being similar to current urban bus spacing not as widely spaced as Toulouse - Paris. On severe grades it might be necessary to install 3rd rail to assist with the climb but in most urban settings this likely would not be required. Seems to be a relatively inexpensive solution.
Comment?
Cheers!
Not a massive fan of trams myself.
Particularly in the UK where our streets are congested enough as it is without adding tram lines to the chaos.
There is also the issue of low frequency vibrations caused by metal on metal rolling as the trams pass. This is a significant problem for many houses in Manchester where new tram lines have been built. The vibrations cause cracking in house foundations.
Now considering that much of Scotland's housing stock consists of tenement type buildings lining the main thoroughfares and you can see why the return of trams would not be welcome.
After the demise of trams they were largely replaced with Trolleybuses.
These were so quiet that they were known as the "silent service" (or the silent death...)
They didn't survive the cheap diesel of the 60s/early 70's. By the early 70's they were all gone.
To me trolleybuses represent a much better solution. Much lower investment than trams, & in our congested roads, their ability to move around double parked cars, delivery vans etc is their coup de grace over fixed line trams.
Trolleybuses can now be built in tram like lengths, so the argument over capacity is null & void. With certain lengths of their route the buses can run in dedicated bus lanes and so can pick up scheduling advantages in rush hour traffic.
They may not be quite as efficient as trams, but you have to grant them the lower up front capital cost (which in the UK is the real make or break factor for large public schemes) and better integration & flexibility. And the nimby's have less objections due to lower noise & vibration issues and no road disruption during construction.
If trams were proposed for anywhere I lived (especially near my house) I'd activity campaign against them. And this is from a guy that lives within the fallout range of the local nuke and doesn't mind it one bit....
Andy
Noise and vibration are a function of engineering detail.
The Canal Streetcars (built in house in New Orleans with trucks by Brookville, also used in new PCC II streetcars in Philly) have no preceptiable vibration. Less than a diesel bus or truck for sure (and this is on the Jello like soil of New Orleans, where a train a km away has bounced me in bed).
Over grass tracks they are as quiet as a passing car. Over concrete tracks, as quiet as a passing 5 ton delivery truck.
Since the roads are "free" the upfront capital costs can be lower for electric trolley buses. Longer term they are often the "second best" solution (they do require not one but two overhead wires BTW). ETBs do not significantly increase ridership (historically +3% over diesel) and trams do (+26% for new French trams over buses they replaced in the first year, usually higher % in the USA).
Less space for cars is, IMO, a good and not a bad thing *IF* there is a private ROW for tram that is not held up by congestion. In other words, it is good when trams move faster and cars move slower from my perspective post-Peak Oil.
If your perspective is that trams are for other people, and trams are just a bus replacement, then I could see disagreement. (Hope that is not a straw man).
Still, ETBs do have their place. They are "Step 3" of my plan.
http://www.lightrailnow.org/features/f_lrt_2006-05a.htm
Best Hopes for More and Better Trams post-Peak Oil, everyone is going to need them,
Alan
Our buses run 24/7. As far as I'm concerned a 5 ton delivery truck is way too noisy at 2am. Plus any new trams in the UK will not be built to the best standards but will be built by the cheapest bidder. So what do you think is going to happen noise wise? The clatter of the old trams were one of the few reasons people were glad to see the back of them.
I'm sorry, but I subscribe to working with the best you've got. Within the confines of what we've got in the UK, I see trolleybuses as being the quickest to implement at the lowest cost. In Glasgow bus ridership already beats the trains hands down so I don't think it'll be a problem convincing folk that trolleybuses are a good thing. Plus it'll get rid of those damn diesels for once and all. (Can you tell I'm a cyclist?)
The roads ain't free, they are paid for already by the rest of us car drivers via our Vehicle Excise Duty (road tax).
But because this is the situation, I'd prefer trolleybuses as they mess up the roads less.
And in the UK, capital costs are still king. I'd rather get a medium sized well thought out trolleybus system than a small, expensive, goldplated tram system that hardly serves anyone. And being the UK, that is exactly what'll happen.
Put it this way. In the UK the only way we'll get either trams or trolley's is if the infrastructure is paid for by grants/regional/local authority. The actual service will be provided by a franchise/concession allowing a supplier to provide a monopoly service at agreed prices. the supplier will provide the rolling stock.
Thus the public authority is going to universally want low up front engineering costs and the supplier low rolling stock costs. You'd also be wise not to upset homeowners or rail unions (another reason I'd want to stay away from steel rails).
the problem I have with this is the underlying assumption that peak oil=no cars.
Really?
The way I see it, no oil=lots of little short range electric vehicles with all the attendant double parking etc that we have now. Small, short range electric vehicles are already available for reasonable costs so to think that the personal vehicle is going to pack up and die due to a lack of oil is one of the more interesting assumptions that I question about peak oil. Personal mobility is very highly cherished (otherwise we wouldn't be discussing trams/trolleys in the first place) and I don't see it going without a fight.
Buses are for other people. Can't stand the damn things myself. Not too keen on trains/trams either.
I've always said that public transport has two problems:
1> The public (they smell and are frequently violent)
2> The transport (slow, expensive, unreliable..)
But, hey, other than that its fine ;-)
Lower population and electric cars are definently the way forward. And if all else fails then I can always ride my bike.
Andy
Our streetcars (but not our buses) also ran 24/7 before Katrina. Every day but Mardi Gras :-)
I'd rather get a medium sized well thought out trolleybus system than a small, expensive, gold-plated tram system that hardly serves anyone
You assume trolley buses will be done well but trams will be done poorly. Under that assumption, I would also chose good design and management over poor design and management. But I do not see the quality of management as being dependent upon mode.
Some narrow streets are only practical with trolley buses unless the entire street is devoted to the tram.
The French experience (and I am actively searching for official confirmation of this ATM) [sterotype] is to:
1) select a very heavy bus line for conversion to tram
2a) Take two lanes entirely away from rubber tires and have grass running (except on cross streets). Some streets are turned into grassy lanes.
2b) Take two lanes and make the surface faux cobblestones. Cars can use it, but they avoid it unless congestion is high.
Taking the tram largely out of traffic makes it faster and more reliable (some of your objections) AND cheaper to build and operate.
3) Add pedestrian and bicycle facilities along the way (Grenoble is going to a bike + tram network with service vehicles, the goal is few private cars)
Low floor trams work quite well with bicycles. The French are pushing that combination with Grenoble the most extreme example.
Financing of public projects need not be static. You make dour projections based upon the dismal British history. One can assume more of the same as the UK slips further behind France.
You assume that ETBs are going to be substantially cheaper than trams. I question that assumption. Slower = more vehicles = more cost for rolling stock and more operating expense. And costs are shifted (street repair vs tram installation)
20 to 25 million euros/km (1.5 euros/pound ?) is reasonably close to affordable.
Perhaps the Scots lack the management and design skill of the French (the Americans certainly do) and all you can muster in a post-Peak Oil world is a "second best" stop-gap solution. So be it. Better than nothing !
Just do not delude yourself that it is not a second best solution,
Best Hopes for the Best Solutions,
Alan
That wasn't my assumption. I assumed that for a given capital cost we'd get a much larger trolleybus system than a tram system. Also if road maintainance costs can be pushed onto motorists (or shared with freight/delivery trucks) then it further lowers the cost for the trolleybus operator as they aren't solely responsible for track maintainance like trams are.
I think there may be a fundamental disconnect between our visions here. In the US and France you have nice large grid iron pattern cities with wide thoroughfares which you can easiy tap into to allow dedicated running lines for trams.
In both Glasgow & Edinburgh this is most certainly not the case. Glasgow has a very long history of trams. Indeed at one time it had a world class tram system the soldiered on until 1967.
BUT, if you'd ever seen a Glasgow tram then you'd understand many of my objections. They are, to all intents and purposes, the same size as a modern double decker bus. They're non-articulated like modern UK trams. When they were taken out of service it was easy to replace them with double decker trolleybuses and diesel buses. Here's a nice pic:
Even going back to 1902, all of Glasgow's roads have been shared access and I don't see it ever going over to dedicated tram lines. Our main thoroughfares aren't large enough to contain dedicated tram lines. They never were.
Not only that but the main reason for the trams was to connect outlying Glasgow suburbs to the city to enable the workforce & professionals to commute into and out of town. This means that you'll need a very extensive tram line network. At its heyday the Glasgow tram system had over 150 miles of double track. No doubt nowadays you'd need more to cover some of the newer developments.
I think the other reason I see trolleybuses as a bus replacement rather than a tram replacement is that many Glasgow suburbs already have good rail connections to central station. To me setting up a tram network is a bit too much like duplication. If you want to ride on rails out of the flow of traffic then you already have that choice pretty much anywhere in Glasgow.
All of our buses are already low floor.
Unfortunately our dour British history is already dooming us to fall further behind the French in other areas. I have my doubts that we'll get the next generation of nuclear facilities by the time we really need them. Certainly the government doesn't seem to be making encouraging noises. If it refuses to give any support either financially or with guaranteed power purchase price agreements with the national grid then operators are likely to come to the conclusion that it is not worth building new nukes in the UK until after a power shortage pushes up our electricity costs. By this time we'll be running a grid heavily dependant on russian gas.
Now where did I say we'd need either more vehicles or that they'd be slower? 1 modern computer controlled articulated trolleybus (that happens to look like a tram) can replace 3 buses. It can also accelerate & decelerate much faster than trams can allowing a quicker service. See: http://www.tbus.org.uk (no affiliation to myself BTW)
Indeed the French have a very nice looking prototype in Nancy and Caen, see: http://www.tbus.org.uk/article.htm
I'm still not convinced that spending millions to lay track over hundreds of miles of our most valuable roads will give us that much benefit.
Horses for courses (but no diesels please).
Andy
A propos Nancy:
http://www.lightrailnow.org/features/f_ncy001.htm
I didn´t check, but it could have been written by alan :-)
From what I have heard, it was not one of the best managed project in France, even taking into account the new technology.
If you accept the premise that extremely expensive, scarce oil and natural gas will have a rippling effect throughout the industrial economy, this assumption makes perfect sense. It will be likely, IMO, that your 'small, short range electric vehicles, will be prohibitively expensive given that the industrial infrastructure to manufacture and ship them will have been dependent on oil.
The assumption doesn't make sense only if you assume a future source of energy, say nuclear, that will at least fully replace crude oil and natural gas and allow BAU for industrial civilization.
Public transport sure does have the 2 problems you mention. Being exposed to the public means a larger danger of violence. This is a reason I bought my present car. BUT it does not remove that risk completely. There is always a hazard of traffic altercation when you drive. Equipping the car with cameras that are visible to other drivers can reduce the risk of altercation but never remove it altogether.
Second, public transport is never going to be as fast as driving your own vehicle. This is why people prefer to drive over transit more than the risk of violence. Plus, in America at least, many people have no choice but to drive for their mission to and from work.
Post-peak does not mean zero cars but it does mean fewer cars. After all, there will be SOME gasoline, but simply not enough to allow "happy motoring". That's a big difference. Post-peak means that as gas prices rise, people will be forced to either live closer to work, change jobs, or otherwise look to an alternative to driving. If you live close enough, a bicycle to use can come into play. The main deterrent to bicycle use is exposure to traffic and weather. If a huge number of people are forced to use bicycles (as likely will happen) the traffic exposure issue goes away.
I currently live 10 miles from work, just about close enough to allow bicycle use. But the car traffic serves as the deterrent. A tipping point will surely be reached when bicycle users are plentiful enough that car traffic will have to give way to bicycle traffic. How far down the road will that occur is anyone's guess.
In terms of real-life safety, bicycles are (if used correctly) pretty safe, owing to slow speed. It turns out that you are safer if you have long hair than if you wear a helmet. Not scientific, John Stossel took a bicycle with a range finder to check distance drivers leave for a cyclist. The cars went closer if the user wore a helmet but kept the most distance if the user wore a wig. Good thing I have long hair without a wig! Just the thing for the day I'm forced onto a bicycle.
Petrol prices high enough yet? Just wait!
"Being exposed to the public means a larger danger of violence. This is a reason I bought my present car."
Now you only need to buy a road too, and you can drive in private!
Not to mention the risk of a violent death in a traffic accident vs. a public transport incident.
It is like tea-leaf readings.
A large part of the 2003 (pre and post) US invasion justification was that the fabulous oil riches would see the Iraqis straight - rebuilding after shock and awe would be paid for by ‘oil’ revenues.
Such propaganda legitimized the invasion two ways: first, there was ‘bounty’ to be had there (no matter how it would be organized, divided, managed, etc.), second, there would be no need to ‘fund’ or ‘control’ Iraq - everyone would be a winner, the invaders, the locals and even the 'world.'
"Propaganda" is indeed the right word. The architects of the invasion, for all their willful blindness and arrogance, are not morons, and they've known about PO for a long time. So if you see the precipice closing fast, and you'd like to at least slow the descent, how do you do so? I'd think about engineering some premature supply declines, exploiting the price spikes to turn off some demand and get people prepared, psychologically at least.
"...consuming nations will understand the gravity of the situation and put in place radical and extremely tough policies to curb oil demand growth." Nothing works better than price to curb said growth. The result is: 1) Introduction of the scarcity narrative; 2) A push toward conservation and alternatives; 3) An above-ground excuse for shortages; and 4) A much longer horizon for the ultimate depletion of the ("our") Iraqi oil.
I'm not so sure. while oil was a big factor in their strategic thinking it seems to operate on some parallel plane..... a distorted reality.
I think the planers and voices calling for the war are morons
they just seem unable to work outside of this industrial-miltary complex thing.
There seems to be some massive contradiction at the heart of geopolitical stratergising
Boris
London
"I think the planers [sic] and voices calling for the war are morons"
Occam's Razor meets ad hominem attack?
For morons, they've made some excellent investment decisions over the past decade.
I won't dispute the vacuousness of the "empty suits" that spin the TV tale for us. But the people who installed them, support them, and beat the drum for them are anything but morons. Look at that "embassy" - it's a citadel, for pete's sake - that's going up in Baghdad. Or those fourteen huge, permanent bases: Their construction was planned and underway years ago, while the notion of an "insurgency in its last throes" was still being sold to us. No one in the US administration ever intended an exit of any kind, military, political, or colonial. Now they have their "long war" narrative to justify the endless occupation. Endless, anyway, until only the strippers are still pumping in-country.
The point is that the oil has to be secured, so that if "we" can't have it, then nobody can. So long as the whole world declines together, the US still has a shot at clinging to preeminence, but if China gets that Iraqi oil, we're history.
I think this is totally correct..and I think the difference is deciding what one describes as moronic..I guess.
this is real fiddling while rome burns stuff as it forces a end game mentality onto all the players.
I would describe that as Insane... being clever about how one goes about ones madness is stupid.. i think...
its just an opinion though.
Boris
London
There's morons, and they can't help it.
And there are insane people, and they can't help it.
And there are the sociopaths, and it isn't clear if they can help it or not.
And then there are just the greedy and manipulative people who seize the reins and for whatever reason, we all seem to give them a pass. Some of them are quite charming -- maybe that's why they get away with it.
Read the newly re-issued, abridged translation of Casanova's "Histoire de Ma Vie" -- being from the 18th century it is far enough removed to put it above contemporary politics, but the dynamic is about the same.
NeverLNG:
"There's morons, and they can't help it.
And there are insane people, and they can't help it.
And there are the sociopaths, and it isn't clear if they can help it or not."
Just ask a typical Economist and they will clarify your confusion:
1) All humans are "sociopaths".
2) "insane people" are sociopaths who try and "help it" i.e. try and be otherwise
3) "morons" are incompetent sociopaths
Competent sociopaths are cheered by "insane people" and "morons" since they generally compete poorly for scarce resouces, which is a good thing.
Thank you. I was confused. ("I was blind, but now I see....")
DaveR - I think you need to use this with extreme caution. Back in 1980 (pre-OPEC reserves inflation), Iraq had official reserves of 30 billion bbls. And since 1980 they have produced only 16 billion barrels leaving 14 billion or so remaining. Since 1980 we would need to allow for some reserves growth owing to new technology (horizontal drilling and 3D seismic) and new discoveries - if they have made any.
So on the one hand I agree that 115 Gb is utter fantasy - but I'd guess the actual remaining discovered / developed figure lies closer to 15-20 Gbs.
Hi Dave,
where do you get your curve?
is my fit, with the assumption that pre-1980 data are somewhat reliable.
Not satisfied with it, especially because I just don't have the data. Euan?-)
After 1980 with the beginning of war/quotas etc.. , who knows? 6mbd might be impossible, but 4mbd seems realistic for a while. URR would be 50-60Gb, meaning depletion is above 60%.
Please, with a grain of salt..
Cheers, Dom
United States oil reserves were 39 billion barrels in 1970 when production peaked. In 2006 they were almost 21 billion barrels. In 36 years the U.S. reserves and production have fallen to roughly half of their 1970 values. Since 1970 the US must have produced more than 70 billion barrels. Thus while it is clear that reserves and production for the U.S. are in a long term decline curve, one should not look to 1980 reserves as being the final tally for all oil that was to be found and developed in Iraq.
For years people have been advising the U.S. to become less dependent on oil. For years people ignored the warnings. As the prices spike higher than overall inflation, people will have to reduce the amount of oil they use, or reduce what they spend on other things. Oil spiked much higher than wage inceases.
Wickipedia Chart:
Hi rain,
I must admit, I'm a bit confused at your point (or is there a number of them
?-)
Are you saying that reported reserves have little to do with real ones? That reported reserves are always too low?
That has been hashed around here a thousand times, hasn't it? Besides, reserves for what: US sovereign territory (which the definition can change - which is what your chart shows), US lower-48 (where the definition can't change so easily).
Or is your point that the situation is serious but not desprerate; that it is depserate but not serious; or something else??
Cheers, Dom
Hi Dom,
Mine was an eyeball fit to the envelope of the production data. Presumably it is a lower bound.
Dave
A recent PIW headline that says a lot, in a very few words:
Petroleum Intelligence Weekly Headline (6/22/07):
Iraqi Crude Exports Rise to US, Drop Sharply to Asia in June
I think Fatih has been dropping heavy hints at least since ASPO-3 in Berlin, 2004. At that conference I was surprised to hear him say, at the end of his talk, something like "At least, that is what I say in public. Catch me in private and ..." Afterwards, a BBC journalist did catch Fatih in private whereupon the journalist was told to stop asking awkward questions. See "Is the world's oil running out fast?", Adam Porter, BBC News Online, 7 June 2004, http://news.bbc.co.uk/1/hi/business/3777413.stm.
Although Jerome, you raise a very good question. Just how much can Fatih get away with regarding his employers? With the Al-Husseini brothers becoming increasingly outspoken and hinting at limits, Fatih may feel he has a precedent.
I actually talked to his boss earlier this week (Claude Mandil) when we both spoke at a Brussels conference. He said that we were right to worry about a non-Middle East peak, but stayed on the line that the Middle East still held vast reserves.
Reminds me about that saying about a man finding it diffilcult to understand something if his salary depended on him not understanding it.....
Greetings, I am a long-time lurker on TOD. Jerome, very nice find on this article. Its the kind of material one can share with someone ready to be convince, but needing an familiar source. Best Regards, Natural
While it is very difficult to tell what oil reserves Iraq really has, it is easy to see that someone is currently very keen to exaggerate them:
My letter:
A much better rebuttal of this is to be found in the href="http://www.mees.com/postedarticles/oped/v50n21-5OD02.htm"> MEES
We had this thread on TOD about the same article.
Great letter Aflred, thanks. I have corrected the link below. That was also very revealing:
MEES Petroleum Resources Of The Western Desert of Iraq
Ron Patterson
THE OTHER SHOE. THE NPC BECOMES THE “TIE BREAKER”
If the original schedule can be maintained, a report of major importance is due to be released at the end of June 2007, or within a matter of days.
This will be the second of the "twin towers" reports on energy, the first being the already released report by the GAO concerning preparation for Peak Oil or lack thereof. The GAO Report proved to be a pebble dropped in the sea. It was very non-specific, dealing in the concept that a peak could occur, no one knows exactly when, and we need to do something, but no one knows exactly what. The GAO Report was vague, it's authors seemed to be almost completely unaware of modern technical developments, it was a report that could have been written in 1977. It's final conclusion, when boiled down to street lingo was, "we need a plan."
Now, the National Petroleum Council prepares to release it's major report on Oil and Gas.
http://www.npc.org/
Will it tell us more? The Report is designed from day one to be much more inclusive and exhaustively researched than the GAO Report, which was so limited in scope from day one that it only served to embarrass those who wrote it.
And there is a promising precedent in the case of the NPC, that being the famous, or infamous, depending on your viewpoint, natural gas report of 2003. The natural gas report was a correction of an earlier report, and was absolutely candid in pretty much repudiating most if not all of the conclusions of that earlier, rosy outlook report:
http://www.npc.org/
Balancing Natural Gas Policy –
Fueling the Demands of a Growing Economy (2003)
The 2003 natural gas report should be in every energy aware persons library or on the hard drive of thier computer. It strikes to the very heart of the very serious issues facing the natural gas supply/demand crisis, including rapid depletion of fields, ballooning growth in demand, North American isolation as a natural gas market, Canada's problems in raising demand, the crisis of natural gas use in rising electrical consumption, so and on and on.
Will the Oil and Gas Report be as frank and involved? It's scope is broad and deep. It has a mix of talant unprecedented in the history of the study of this issue. It seems to have been requested in a spirit of great frankness, with Energy Secretary Bodman using the words "Peak Oil" in the original request letter:
http://www.npc.org/Global_Scope_Paper.pdf
http://www.npc.org/NPC_presentation-62106.pdf
http://www.npc.org/NPC_Global_Study_pres-V52-21507.pdf
On the other side of the coin, many of the individuals and firms at the top of the organizational pyramid have already made thier disdain of the "peak" idea known, few more clearly than the current chair of the NPC, Mr Raymond of ExxonMobil. And of course, we know where Mr. Danial Yergin of CERA stands.
However, in the case of the Natural gas study, Mr. Yergin was a very high ranking advisor. This did not stop the NPC from being very candid. Perhaps the presence of Matthew Simmons on that panel swayed things-it is to be noticed that Mr. Simmons is not on this Oil and Gas Report panel, a surprise given his interest and high public profile on exactly these issues.
By the way, if one feels that the coming NPC Report, while interesting, is off topic to Jerome a Paris's keypost "IEA: without Iraqi oil, we'll be in deep trouble by 2015" please check out the NPC links provided above. Among the advisors on the NPC Gas and Oil Report, representing the IEA is, you may have guessed.... one Fatih Birol, the chief economist of the International Energy Agency. Is Mr. Birol already releasing, whether the NPC will be willing to or not, what he has learned in his contacts and study involving among his normal duties, his work on the NPC Report?
Only time will tell.
Thank you for your time and consideration
Roger Conner Jr.
Remember, we are only one cubic mile from freedom
Well written comment, nice to start putting some history (though just the last years) and names together.
I didnt know this, thanks for the info.
I'm not expecting much from the NPC study. I'm expecting something along the lines of the big issue being above not below ground factors, which we keep hearing over and over again from CERA.
I think even Smokey is being optimistic. I expect them to repeat the company line. "Peak Oil is nonsense. There is no problem, and if there were it would be because of lack of investment, not geological factors. The stone age did not end due to lack of stone..." Of course, they'll probably throw in the caveat somewhere, "However, it is important to international energy security that nations with oil and gas reserves remain open to projects from corporations with the expertise to fully produce those reserves." They might even be blunt about it and change "remain open" to "be opened".
Thank you Jerome for posting this here and at ET. This needs wider coverage.
In fact, I'm a little puzzled as why this news has not taken on in the US/UK English speaking media?
I just did Yahoo/MSN/Google News search and these comments from Dr Birol are not anywhere to be seen in the English language news.
Granted, I was a wee bit less worried when IEA had their old stance "Everything is alright, KSA will just ramp up, go home, there's nothing to see here".
With the latest outing by Dr Birol, I feel like the countdown for the last cornucopians has begun...
He did discuss SA - precisely to say that _even if all went well in SA_ (his tone in saying this suggesting that it was by no means a done deal) we'd still need Iraq, because *there simply are no other reserves around*
So it was quite a broad - and thus pessimistic - assessment.
Yes, I know he discussed KSA.
Exactly my point why I'm worried.
Just as you note, Birol's comments are a veiled admittance, that KSA will not be enough, whatever the situation.
Iraq needs to ramp up (to expected 6mbpd, I assume) and do it fairly fast.
Ah, gone are the days when IEA could be trusted for "go home, no need to worry" opinions :)
_That_ is why I'm worried.
I guess my question is why did he choose Iraq to focus on? Why not the much bigger known producers such as SA or Russia? Sure Iraq MAY have a few million extra barrels up its sleeve but even then it wouldnt get close to what these others produce - let alone what organisations such as the EIA have previously said these two giants of oil production COULD produce. So why not ' we will be in deep poo if SA/Russia cant crank up production'. I suspect there are several subliminal messages here........
good point... its slightly dangerous as it introduces geopolitical interpretations. This is why i was concerned about the comment to start with
How do we go about raising the issue without conflating international rivalries.. a real pandora's box
Boris
London
Real-politik types always assumed that the Iraq invasion was about resources and their control, an act -V or XXI- in the Great Game (oil, water, pipelines, transport routes, imports, even agriculture, business opportunities, the shifting of tax payer money, etc. etc.) Yet, there were many reasons for it, difficult to tease out, rank in importance, understand.
Others have argued that oil ‘production’ was a minor consideration: in effect Iraq’s oil ‘production’ has been curbed (thru lack of cooperation or as some might like to say because of Iraqi /Saddam mismanagement- under bombs...) and controlled for a long time (oil-for-food) by the International Community.
Kept deliberately low to save to the goop some say, or simply because of general confusion on the one hand and prudent unwillingness to invest without the guaranteed, and very consequent, strong arm control on the other.
The take over has not worked so far.
Ignoring geo-politics is perilous.
Hello TODers,
If there is any virgin oil giants in Iraq: they might be found in the exploration blocks in this map:
http://i82.photobucket.com/albums/j269/raystanford/cheneyiraqoilmap.jpg
Does anyone know if KSA has ever found any fossils fuels on their side of the border this far north? You would think if KSA had no luck, then Iraq will probably find nothing either as the underlying geology is probably the same. Maybe blocks 8,9 offer the best chance to strike oil.
EDIT: just found this 2003 link with seismo-graphics that explains possible Iraqi potential:
http://www.geotimes.org/oct03/feature_oil.html
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Thanks for the geotimes link, Bob. Reading requires work, but pontificating is easy.
That didn't work out as planned, did it? Written in October, 2003. It's hard to stop laughing (or crying, I'm not sure which).Fatih Birol focuses his remarks on Iraq, and rightly so. Without Iraq's production potential, a near term peak in oil production is pretty much a done deal. Well, actually it's a certainty anyway, we're only talking about the date.
I for one am glad to see a focus on this ongoing tragedy. On the other hand, there will still be some oil in the ground for everybody's children and grandchildren. That's the good news.
best,
Dave
Did anybody see, or have any comments about, Putin's latest affront: Laying claim to the North Pole? Here is a link to it in the Daily Mail:
http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_ar...
What caught my eye, besides the man's never-ending audacity, was this quote:
Twice the oil of Saudi Arabia?
Bob in D.C.
http://livingwithoutoil.blogspot.com
http://my-words.org/Beyond2010-top/top.htm
We need to start looking at alternatives fast. This is a great initiative to develop sustainable energy. Technology buffs will be interested in how these turbines look like regular wind turbines.
With Peak Oil nearly upon us its time we all start working to develop this technology.
1.2 megawatt tidal turbine being built in Ireland’s Strangford Lough:
http://giftofireland.com/Siteblog/2007/06/29/worlds-largest-tidal-turbin...
MCT's are awesome stick a wind turbine on top and add an OWC on too and build lots of them in the oceans. Then you can connect them to land on both sides and the connection can also act as an interconnect between the two places. Have people seen Airtricity's plan for a European offshore wind super grid? Very exciting as long as we have enough copper left....
You can fool some people some of the time
but you cant fool all the people all the time
Although it's unlikely the oil will ever be exploited (if it's there in the quantities claimed) to me it's just yet another example of the great game entering a new phase. We seem to have had so many examples this week of the industry subtly acknowledging peak now.
- First the CEO of Shell talks about supply not being able to meet demand.
- Second the IEA says we're dependent on developing Iraqi oil reserves to increase production.
- Third OPEC say 'demand' will drop by 2010
- Now Putin is trying to nationalize oil that isn't even in Russia!
Is it me or does the situation smell more and more like desperation?
(WTI above $70 now)
Oh yes.
The Law of the Sea is horrendously complex. Only experts understand it. One version of the basics, much of it contested in various spots:
UN
A putative land link between Russia and the pole is being put forward.
... a group of Russian geologists returned from a six-week voyage on a nuclear icebreaker. They had travelled to the Lomonosov ridge, an underwater shelf in Russia's remote and inhospitable eastern Arctic Ocean.
According to Russia's media, the geologists returned with the "sensational news" that the Lomonosov ridge was linked to Russian Federation territory, boosting Russia's claim over the oil-and-gas rich triangle. The territory contained 10bn tonnes of gas and oil deposits, the scientists said.
Guardian
Regarding the North Pole / Puitin claims - I guess
It’s all about having claimed it first - so that the US can not claim it ... without having a dispute in the Hague or Un or wherever they sort out such international issues.
Norway is having an unsolved issue with Russia - played out since the 70s ... its not going away -
The area is nicknamed the Gray-zone, and is shown as the small patch in the picture. They argue about dividing through a perpendicular borderline from the actual shoreline or whether to follow the longitude parallel.
Guess what they believe is beneath the sea bed?
Jerome, thanks!
I'm basicially illiterate in French, I really appreciate a Gallic perspective and wish we had more French news on TOD.
The elephant in the living room is the Iraq War. The Bush stated war aims have changed several times since the US invasion, and the Neocons have never admitted the real reason-its about the oil. The Kuwait Gulf war was for the same reason, and Iraq's war with Iran, too.
There's no way to win, and only US withdrawl has a remote chance of pacifying the country. Now, the US puppet government is negotiating to hand out the spoils to the western multinationals. Its evil and sad, and I have no solution.
We certainly need the Iraqi oil... so this is what Bush says to encourage the Arabs to be nice to us Westerners:
http://www.indystar.com/apps/pbcs.dll/article?AID=/20070629/NATIONWORLD/...
How stupid can a man get, to suggest Iraq should be more like Israel?! Plz.. Now I have given up all hope.
Note that Israel is the only Middle Eastern state where both sunni and shi'ite Muslims are treated equally, have the vote and are able to participate in a reasonably honest and competent democratic government. Israeli Arabs are no worse of than Blacks in the U.S.--and indeed, their relative position is better than that of Native Americans in the U.S.
Unfortunately, I do not think Iraq has the potential to become a viable multiethnic state, as Israel is.
You're forgetting occupied Palestine, where all the adults - including women - have voted for a long time. But shame on them, they voted for the wrong party! We'll just have to punish them until they recant their support of Hamas in favor of the party selected by the US and Israel.
Do you regard Hamas as a legitimate government? Are you anti-Palestinian? The West Bank used to be part of Jordan, but because the royal family hates and fears the Palestineans, the West Bank was cut loose to fester on its own. Recall the events of Black September, 1970.
True enough. But Jordan's "royal family" was another invention of those clever British, just like calling the lands of the trans-Jordan a country in the first place. Legitimacy is lacking all the way around, IMO, and the suffering Palestinian people were left with no other option - vote for change, or for MAU (misery as usual). Electing Hamas may be viewed as a protest vote or an act of desperation, but it happened.
Jordan's "royal family" were the rulers of Mecca until Ibn Saud (the father of all of Saudia Arabia's kings) grabbed it from them. The British put them where they are today - in a place where the Palestinians always were in a majority. No one asked the Palestinians.
If you really want to know a little about why the Middle East is turning ever more radical, keep in mind that Europe and the States have consistently tried to destroy any popular government. Take a look at Our Second Biggest Mistake in the Middle East for a good explanation.
Interesting and balanced perspective in that link, and I thank you for disabusing me about the Jordanian Royal Family. Maybe their made-up country was some sort of consolation prize for losing Mecca.
Truly, the trans-Jordan is the defacto Palestinian nation, by numbers alone.
Isn't it telling that we here still refer to the area by the British term "Middle East" instead of calling it SW Asia.
Alfred,
Thanks for making the points that should be obvious to everybody. For some reason a lot of Americans can't fathom what really has been happening in the ME and we always get silly arguments defending US policy and Israel.
I should also like to add that the article I referred to, about Bush saying that Iraq should be more like Israel, is probably the most insulting thing that an imperialist could come up with. If Bush had any reason in his head, he wouldn't have done that.
How is Hamas not a legitimate government? They were elected in a very democratic way.
... if "one man, one vote, one time" is your benchmark for legitimacy.
Re: Oil in Iraq's Al-Anbar Province?
Is the story of ‘massive untapped oil reserves’ fact or fictions? by Sharif Muhsin 'Ali, former Director-General of the Iraq National Oil Company. (See this MEES letter for a list of former INOC officials.)
On the subject of Iraq's oil production (or future lack thereof), see my Iraq: Land of Opportunity and Adventure?Also, when I see Dave Rutledge's graph...
... all I see is noise. I believe there's a lot of oil left in Iraq to exploit, but I can't possibly guess how much -- and neither can anyone else. Given the 1st Gulf War, the sanctions, and all the other "aboveground" factors, it is pointless to estimate a URR on the production history. But, some of you probably know that already.
Agreed!-)
The Bushies might just be trying to get the Iraqi Sunnis to agree to the proposed oil law. If they can be convinced that there is plenty of oil in their region, they might not care as much about what happens to the oil from established fields.
Iraq is badly in need of a law that divides the oil among Shi, Sunni, and Kurd. Shi and Kurd have developed oil, each in their own territory. Sunni have none. Political progress might be made, near term, if Sunni could be conned into believing that they have some oil of their own.
It is just too convenient to be believed by me and I don't have the suspicious mind of a Semite. Just another example of 'western' colonialist trying to manipulate the natives.
I am not sure that would really be progress. Con jobs come back to bite you.
My French is rusty, but I'd translate Birol's remarks as follows:
Iraqi oil production has now been suppressed relative to its true production potential (whatever that turns out to be) for going on two decades.
The longer that *full* Iraqi production is delayed, the more important Iraq becomes as the world's only potential "spare capacity," of any note, to use the term very loosely.
UN sanctions, and then the U.S. invasion, have dramatically increased the relative significance of Iraqi oil. The longer Iraq remains too volatile for heavy investment in the oil infrastructure, the longer its production will be suppressed, and the more important its oil becomes.
Consequently, the longer the U.S. stays in Iraq, the more strategically critical it becomes for the U.S. not to relinquish influence over Iraq. Success in Iraq for the U.S. is defined by bringing full Iraqi oil production on line, a goal of course that the U.S. is probably incapable of achieving.
kenny,
I'd define success as getting all of the URR out and delivered to the US, but not necessarily at the maximum achievable rate. After all, easing the decline is more important than another year or so of BAU.
I think Iraq has lots of potential for increased production.The Taq,Taq field was originally discovered in 1978.Addax has drilled 3 appraisal wells since been given a licence by the Kurdish State.They are multi-zone wells with zone thickness of 100-300 ft.Flow rates are in the range of 18-30000 bl/da at depths of aprox 8000ft with API of 44-50!!These are screamers!Addax expects fully devoloped field prod of 200m bl/da.
And their are lots more pot fields to be appraised!
And the other players in the ME have reason to frustrate American aims. There have been reports of KSA providing arms and support to Sunni insurgents. The US harps on Iranian support of Shia insurgents (and these claims may, or may not, be valid), but little mention is made of the potential KSA involvement.
If Iraq does have the FF potential ascribed to it then clearly it would be in KSA's interest to ensure that it does not come under American control. This perspective may help explain King Abdullah's reference to an illegal US occupation of Iraq at the last meeting of the Gulf Co-operation Council. His first foreign state visit after assuming the throne was IIRC to China, not to the US. This suggests he seeks to countervail US influence.
This also may explain the continued US sabre rattling with respect to Iran. Iran provides the US with the opportunity to declare "It is not us and our demand for Iraqi oil wealth that you need to worry about - it is those crazy Shia and their Iranian fellow travellers. You need our 3 carrier task forces, and our Iraqi forward operating bases, as a bulwark to protect you against those wildly unpredicatable, hegemonic, imperialistic, militaristic Iranians." It was the American security umbrella that maintained US hegemony in Europe during the post WWII period and we may be observing the same strategy being attempted in the ME.
Also interesting is the minimal MSM coverage of Putin's purported attempt to annex the North Pole. No outcry. No gnashing of teeth. No lines being drawn in the snow. Nothing. Of course when your entire force structure is tied down in some barren desert you wouldn't want to let the public know how truly vulnerable you may be to arctic adventurism. The greatest security threat to the US is not Iraq, Iran, or Putin, but that clown George IV. Curious to see how long it takes before the American people figure this out.
Jerome,
I just read the BBC article: http://news.bbc.co.uk/1/hi/business/3777413.stm
-which starts "If you think oil prices are high at $40 a barrel then wait till they are four times that much."
-Well, we are already nearly twice that in 3 years since when the article was written. If you had told people back then that oil would be consistently higher than $60 and nudging $70-$80 then most people would have predicted an outright global recession -but it hasn't happened... (yet)
In fact, the world trundles on, burning up the stuff, paying the new higher price like it wasn't so bad. Meantime Africa burns.
How much higher does it -will it- go before people really start to change? My guess is it has to double again from here -somewhere over $100 -probably more like $120+. Even then US gasoline prices will be less than the UK pays NOW.
We seem like the frog in water that is slowly being heated, perhaps we NEED a sudden jolt to cause action.
Regards, Nick.
Indeed, this is one of the laugh-a-minute facts about oil price rises.
In the UK gasoline is currently 94.9p/litre. The fuel duty is 48.35p/litre and there is Value Added Tax at 17.5% on top of the whole lot.
This gives a pre tax price of just 32.4p/litre If you remove the seller/distributor fixed cost/markup of perhaps 7p/litre total then the ex refinery cost is just 25.4p/litre.
Thats just $80.77 USD per barrel. Benchmark that against the cost of crude at approx $70/bl.
If the price of crude was to TRIPLE then I'm going to assume (for the sake of argument) that the cost of ex refinery gasoline will triple too.
This only makes ex refinery gasoline in the UK about 76.2p/litre. Add back on the 7p/litre distribution plus tax plus VAT and the final retail price is likely to be....
£1.54/litre.
So a tripling of crude prices doesn't even double UK forecourt gas prices.....
That's only a 62% rise. It doesn't even double and probably wouldn't even cause an economic slowdown for your average motorist in the UK.
Now consider the situation in the US. Given a tripling of crude prices and you're likely to see over doubling of forecourt gas prices.
So who do you think will be doing the most conserving as crude prices spike beyond $180/bl.
Europe or the US.
My money is on high crude prices shaking lots of spare "demand destruction" out of the USA quite quickly while Europe keeps on trucking, business as usual.
$180/bl? Walk in the park. Its $1,000 that I'm worried about.
Andy
I'm USA citizen. I'm not particularly happy about how lots of things are done here, but there is a problem with your rhetoric. US is a geographically big country. People travel long distances to go to work. There is no mass transit. Demand here should not be glibly characterized as 'spare'. We are in deep trouble. Except, that we do have the spare acreage on which to do something with biofuels in our southwest.
The US is going down the drain - if U don't start to act upon these gas-issues ahead of you yesterday -
There is no time to loose, seen from my neck of the woods - god bless the world, because we will be dragged down with you.
One solution, imposed by macroeconomics and "the market", will be to not drive to work. Since there will be no job to drive to.
Reality will not accommodate the past mistakes the US has made.
People can move closer to work, close enough to walk or bicycle. Or carpool in a 50+ mpg car.
It is *NOT* the fault of the distances between US cities. No big deal because few people NEED to drive between them.
It is the fault of deliberate policies by the US and state gov'ts to kill our pre-WW II cities and downtowns and devote our future to suburban (and then exurban) sprawl.
The stubborn refusal of many suburbanites will kill the economy for us all if we do not force them to change.
The USA spent $300 billion on imported oil in 2006. More this year (higher prices, higher consumption, less domestic oil production, you do the math).
We imported $800 billion more than we sold in 2006. More this year. One day, (-$1+ trillion) oil exporters will not be interested in our paper.
We have no "right" to imported oil.
My PARTIAL solutions.
http://www.lightrailnow.org/features/f_lrt_2006-05a.htm
http://www.lightrailnow.org/features/f_lrt_2007-04a.htm
I think it was Kunstler who said "American suburbia is the greatest misallocation of resources in the history of the world". $42 trillion wasted, large parts of which will be abandoned, one way or the other.
Best Hopes for Transit Orientated Development,
Alan
It should be mentioned as a reminder from time to time that not every American lives in suburbia. Quite a few people (like Alan) reside in liveable, walkable urban neighborhoods. Quite a few other people (like myself) reside in liveable, walkable small towns.
The close-in suburbs are going to have to transform themselves into urban neighborhoods, while the farther-out exurbs are going to have to transform themselves (or return to being) free-standing small towns. Rational and efficient transport choices can help. It remains to be seen how many communities will actually be able to summon the collective will to transform themselves. Those that can't will likely become the next ghost towns.
Hi WN,
Yes.
Well, just a comment.
re: "It remains to be seen how many communities will actually be able to summon the collective will to transform themselves. "
Collective will
+
Energy AKA money AKA resources and way to organize all of these...both (at least) are necessary. Are they not?
There are people out there who "need" an F-350 Super Cab, not to move material or equipment for work, but to have something bigger than their neighbor or taller/more intimidating than the other things on the road. IOW, it's pure social climbing or aggression. If this is the "non-negotiable American lifestyle", it needs to die.
American vehicles got much better economy/lb over the last 15 years, but economy stayed mostly flat; the improvements went to size and performance. 0-60 in 8 seconds isn't a need (my 40-MPG 5-passenger car is rated at 11+, and I usually drive it much more conservatively). A brick-like profile isn't a need. Jacked-up 4x4's with oversize tires are not a need. Towing travel trailers and powerboats is conspicuous consumption, not a need.
A Prius or Honda Civic HF will cover the same long distances as a Dodge Durango. Distance is an excuse. We need to stop making excuses.
Engineer: For all the reasons you list, I am more positive about a post-peak economy than most.Wealth creation does not suffer when some moron finally wakes up and switches from a F-350 to a Civic.
The switch from an F350 to a Civic is not sufficient. More than one credible analysis now suggests that total global production might fall by as much as 30-35 mbpd by 2020. Under such a scenario it doesn't matter what hybrid you drive as there is no fuel available. Our economy soaks up 21+mbpd and we produce (including NGLs and refinery gains) just about 8mbpd (5+ mbpd crude and condensate). That number is going to fall and if the other numbers fall there will be zero imports available plus something like 6mbpd total (C&C plus NGLs, etc.).
So your poor moron can't move to a Civic. He has to move to an entirely electric car or change his lifestyle and have access to all-electric mass transit, which has to be built in the midst of a global depression as the entire global economy is shrinking rapidly.
Interestingly, Bakhtiari has had the most accurate of all forecasts so far and his is the one that lops 30mbpd off production by 2020. That's a 35% fall in total production if it occurs. As Stuart has noted before, the market cannot respond that fast under normal circumstances. If we want to make this move then we need to make this move now with external assistance to drive the market via tax incentives, tax penalties, etc. Yet Congress just demonstrated that they are incapable of doing anything remotely like this.
Given the behavior of our leaders in Congress plus pessimistic forecasts like Bakjtiari's (or Ace's), how can you justify saying that wealth creation will not suffer?
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
A mostly-electric car will do. Even in 2030, the USA will still be producing something like 4-5 mmb/d, so some fuel will be available. EV and PHEV conversions of existing vehicles can supply some of the required displacement. Solar PV and wind will both be considerably cheaper and can help supply the electricity.
Congress is way behind the public on this (just look at the vote on the immigration bill, where it took the Senate weeks to clue into public anger over the rewards for law-breakers). The leaders right now are the public, followed closely by states like California. If Congress doesn't block them, things may be a whole lot better than the picture from Washington suggests.
Grey: Chart global GDP growth over the last 100 years vs global oil supply growth (% each year) over the same period. What you get is global oil supply growth slowing until now it has been on a 3 year plateau, with no discernable direct effect on global GDP growth. If you feel that oil consumption and wealth creation are the same thing, explain why.
We have one prior case study of when oil production declined globally - 1979-1982. Coincidentally, this was the largest recession since the Great Depression. Coincidentally, this recession ended in short order after production began to increase again.
Do you have another historical case where production actually declined for several years outside of major wars? Further, do you believe that wealth creation is completely independent of energy consumption? If you do, then we will simply have to agree to disagree.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
We have two, actually - the first oil shock in 1973 led to no production growth in 1974 and a 5% decline in production in 1975 (EIA data).
For both of these shocks, oil production crashed by 10% - from about +5% per year to -5% per year - over the course of 1-2 years. And yet, world GDP grew kept growing.
Interestingly, the second oil shock was only worse for the US - which, as you say, had a serious recession; the rest of the world experienced 1-2% GDP growth in the depths of both oil shocks. Arguably, the US's poor performance in the latter may have been due to rationing and other botched mitigation efforts.
False dilemma - there's plenty of room between "tightly follows" and "completely independent".
As it happens, though Germany has had essentially flat total energy use - and dropping oil use - since 2001 or so, despite a growing (and improving) economy with a strong manufacturing component.
So while nobody's saying that wealth creation and oil or energy use are completely independent, evidence suggests that their relationship need not be tightly coupled.
There are lower bounds on efficiency dictated by simple physics. You cannot avoid that it takes a minimum of so much energy to perform some bit of work. Thus you can only push efficiency so far though clearly much farther than we currently are doing. Eventually we will approach that lower bound and at point there is nothing that we can do except increase available energy. That is where alternatives come in. But the real key is speed. How fast will fossil fuel energy decline? How fast can we impose efficiency improvements coupled with rolling out alternatives?
And that is the big question - can we impose efficiency gains and roll out alternatives at a faster rate than fossil fuel availability declines? We do not know.
By the way, those nations that have already heavily pursued efficiency, such as Germany, are closer to that lower boundary beyond which they cannot go without actually altering how they live.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Look at it this way:
I'm not sure how all the supply and efficiency wedges could add up, but when you consider that we can achieve large synergies using simple tools like domestic cogenerators the situation does not look at all bleak to me.
Hi Pitt,
Thanks and I like your naming "logic-names".
Here's my question though. Actually, several:
1) re: "And yet, world GDP grew..."
Why is that, do you suppose?
How was the "GDP" counted at that time?
Could it be the case we had the phenomenon of disasters increasing GDP, yet without lasting positive additions to the economy?
2)re: "False dilemma"
"there's plenty of room between...
Well, this seems to be a very critical point.
How much room?
Is the amount of "room" increasing or decreasing?
How do we analyze this?
What about the very important point of increasing efficiency as a primary factor in our desire to understand and explicate what is happening in the land between "tightly follows" and "completely independent"?
In other words, how does simple increasing efficiency enter into the picture?
Might it not be that increasing efficiency accounted for increasing GDP, due to more use of same/lesser amounts of energy?
In which case, we are still coming up against a limit, but a different limit.
How to analyze this?
What happens once you have maxed out on the efficiency wedges? Then what?
re: "So while nobody's saying that wealth creation and oil or energy use are completely independent, evidence suggests that their relationship need not be tightly coupled."
Okay...if not "completely independent", then *HOW* "tightly coupled? Yes or No? To what extent "Yes"? To what extent "No"?
3) re: "botched mitigation efforts"
This is something you've mentioned in passing before, and I'd like to really focus on it.
It seems crucial, esp. if it turns out to be the case we are , after all, in "peak now".
--What "botched efforts"?
--Why?
--What does or would have a "non-botched" effort look like?
And so forth. Similar questions. I see these as very important.
The problem I have yet to see anyone satisfactorily answer is ... a large fraction of the US economy is currently creating suburbia. Manufacturing housing, autos, roads, and servicing these things. It's not just carpooling or driving smaller cars. The jobs to drive to aren't going to be there. That is the problem.
The jobs to drive to aren't going to be there. That is the problem
That is a problem, not THE problem.
As the dollar crashes and we cannot afford our imports, "things will change". "Creative destruction" was the motto when we were shipping manufacturing overseas.
Oil or goods from China ? A little of both, but not much.
Build essential goods here (eyeglass frames come to mind, one US company left) will create more employment. Bicycles and adult tricycles.
Trees will not stop growing post-Peak Oil, so energy efficient small housing near TOD will employ some. Retrofitting and insulating worthwhile homes.
12 million jobs currently filled by illegal aliens. Job opportunities there for desperate people. Agricultural employment (Have lawyers picking grapes ?)
MASSIVE CHANGES, painful adjustments, ruined lives, reduced life expectancy (see USSR > Russia).
People will scramble and adjust to survive.
Or not,
Best Hopes,
Alan
I find your optimism currently unjustified, Alan.
Do you remember what M. King Hubbert himself said about the depression?
You seem to believe that science and raw materials will trump monetary policy. Why? They never have before even though monetary policy is completely myth. As Hubbert himself notes monetary policy and science are fundamentally incompatible and have only gotten along this far because both were growing exponentially but now the physical sciences are starting to see the end of the line for the doublings they can do but monetary policy expects doublings to go on forever.
All the technies here at TOD seem to assume that science will carry the day yet all of our distribution systems are based on the hoary myths of economics and economics ruled in the 1930s, not science. Why will science rule this time? None of you have ever answered this question adequately and seem to simply presuppose that it must be so because your technical brains say it must be so. Yet none of you can answer why we shut the country down in the 1930s either and once shut down we had no real idea of how to get it rolling again short of a global war.
I fail to understand this happy faced optimism in the face of human psychology which is addicted to its theologies(like economics).
Hubbert argued that we must, absolutely must, replace economics with a real science. We have failed to do so in the intervening decades since he stated these words and the crisis is almost upon us. I see no basis for assuming we will replace the folklore of the economic system with real science in the middle of the crisis either.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
The USSR had a complete economic collapse, a near total social collapse and political disintergration. Many (especially men) chose suicide (often indirectly, go out get drunk with minimum clothing in winter).
Life expectancy for men dropped a decade. Russia defaulted on their debt. Ukraine is a basket case today.
Yet they reformed and regrouped.
Some humans curl up and die. They disappear. The rest do whatever they have to do or die trying (and those disappear as well).
I want to help those still here, struggling, by pre-positioning viable solutions regardless of how bad it gets.
Best Hopes for <4% annual decline in world oil exports,
Alan
Assisted by significant foreign investment which forsaw opportunity by rebuilding the ruins to the strains of "I want to give the World a Coke! And live in Harmony!!"
If the bottom falls out of the US economy then the rest of us go down too. There may be a few NZ sheep herders left but they will not reinvesting in the US or offering "A Lot of Ewe!" in harmony or otherwise.
The recovery of world oil prices also played a very significant role in Russian recovery to the point that this source of income made it possible to "buy out" all those harmonic coke bottlers and the other deluded westerners who thought they would make their fortunes off the back of mother Russia.
The future will not be the story of s single destroyed lily pad which is revitalized through interaction with other pond life but the draining of the entire pond itself so that we all end up drowning in the muck at the bottom.
Not even the prospect of war would serve to aid recovery. The only benefit of the Iraq fiasco is that it demonstrates that if you are willing to make the choice to "Live Fee or Die" (with the concept of freedom being specific to your belief structure) then even the world's most lavishly equipped and best trained military may be rendered impotent.
Please note that I do not consider myself a Doomer. I think the "Doomers" are wildly optimistic.
Iraq's oil reserves, real or imagined, are of massive strategic importance for the United States, and the rest of us, if the oil is really there in the ground.
I think we have to assume that Iraq's potential oil production is significant, just how significant is difficult to determine. Clearly Bush/Cheney believe that Iraq's untapped oil reserves are gigantic, on a Saudi scale. However, they, and the powerful men around them, HAVE to believe this, because without some fantastic new source of 'cheap' and plentiful oil riding over the horizon like the US cavalry - we are in deep trouble!
But actually getting this 'oil mirage' out of the ground and then out of Iraq, is another story altogether! The Iraqi resistance movement will never let the American occupation forces rob and suck their country dry of its only real asset and source of wealth. The resistance seems to consist of around six main groups, which may disaree on a lot of things, but the one thing they agree on is never, ever, letting the Americans get away with stealing their oil without paying an enormous price. Blood for oil.
How many barrels of blood are the American people willing to pay for every barrel of Iraqi oil? Clearly they are willing to bleed Iraq to death, but what about American lives? Even if Iraqi lives are worth little, surely the lives of their own people have a value? If the United States is forced to occupy Iraq for decades and fight the resistance for decades, one is looking at tens of thousands of American casualities. In the next couple of decades the United States could well lose over fifty thousand dead and hundreds of thousands of wounded. The Iraqi people will be slaughtered in return, with casualities perhaps in the millions!
Also the longer the US remains in Iraq, and with casualities rising and results meagre, the more likely it is that the war will spread out over Iraq's borders to engulf the region as a whole, leading to untold deaths and destruction. In the short term war with Iran is a real possibility. The American political establishment is violently anti-Iranian, as is Israel. Iran is seen as the last real threat or obsticle to total US/Israeli dominance of the entire Middle East. The dream is, that with Iran gone, a Pax Americana could become a reality. There would be 'peace' and then the oil could be accessed relatively easily and most importantly, the Middle East's oil would be under total American control for the forseeable future.
This 'prize' is of almost inconceivable strategic value, perhaps the greatest single source of wealth and power in all history. Therefore, the American establishment will do anything that's required to ensure success in this enterprise.
But there are lots of flies in the ointment. First, the resistance of the Iraqi people. Second, the Iranians will fight as well and make Iraq look like a picknic! Third, will the American people really support the strategy of eternal war in the Middle East with all that it entails?
Personally I don't believe anyone will ask them! What the American people think doesn't matter all that much to the elite that rules the United States. Vietnam was a grubby colonial war, to show the world the US had balls; Iraq is of far more importance, it's literally a fight to the finish a matter of life or death. American democracy won't survive a twenty to thirty year campaign in Iraq. America will/could degenerate into a kind of Christian/Fascist regime, with life and liberty for the few and virtual slavery for everyone else.
So everyone is going to be paying an awful lot for Iraq's oil, one way or another. The big question is, are we really willing to pay this price?
A recent PIW headline that says a lot, in a very few words:
Petroleum Intelligence Weekly Headline (6/22/07):
Iraqi Crude Exports Rise to US, Drop Sharply to Asia in June
Which is fine, as long as US troops are willing to die to keep the oil flowing:
NARRATIVE DISCORD
WSJ: Critiques of Iraq War Reveal
Rifts Among Army Officers
Colonel's Essay Draws
Rebuttal From General;
Captains Losing Faith
By GREG JAFFE
June 29, 2007; Page A1
Excerpts:
Good points. I believe that a strong analogy can be drawn to the US Vietnam War experience in which then junior officers formed judgements that influenced their subsequent behavior as senior officers. By the time of the first Gulf War, General Powell was US Chief of Staff, and he was reluctant to commit military forces unless absolutely neccessary and for strictly limited objectives.
So although I have come to deeply regret America's involvement in Iraq and the use of ground troops in Afghanistan, I see a costly-to-obtain benefit. The American Army and Marine junior officers such as Yingling and Burton, as they eventually become senior leaders, will become more conservative in the use of ground forces.
It is certain that Iraq can't save the world from the consequences of decline. But it is also unrealistic to expect that Iraq will be America's oil colony shipping exclusively to the US (and a few crumbs for the UK). Those slow moving supertankers will be a target for the whole middle east, assuming that somehow the oil can be loaded on them and not blown up in the pipelines. It won't be American blood that will decide, it will be the ongoing successful disruption of attempts to grab Iraqi oil that will decide. I wonder when the US will institute the draft and send millions of soldiers to the middle east, the current limited engagement policy is a failure.
Since the 1990s, we've been witness to the Iraqi Holocaust: Millions have died, millions displaced, millions wounded physically and mentally. For some reason, intelligent people are unwilling to admit this; unwilling to admit their shared responsibility for this most massive crime of our times. Only plantive cries of "We need the oil or our economies will suffer." Our economies deserve to go bankrupt over the Iraqi Holocaust.
There was no justification for the Nazi's reign of death.
There is no justification for America's reign of death.
I think you have it in reverse. Nearly every American of even average discernment now recognizes the extent of the suffering in Iraq: the civilian deaths, the multinational refugee crisis, the flight of Iraq's moderate, educated classes, one of the world's most successful ethnic cleansing projects, etc.
What Americans by and large don't acknowledge is that it might just possibly have had something to do with Iraq's oil reserves all along. I think this realization will come, and then, for the first time, Americans will be forced to take a cold hard cost/benefit-type look at the war. All the pretend reasons for us being in Iraq still get in the way of that.
Agreed: Never underestimate the power of denial.
Sorry to say kenny, but I run into "American[s] of even average discernment" every day who don't have a clue, have no knowledge of the scale of enormity. Then there are those with a megaphone of sorts in the blogosphere, like Kunstler, who say absolutely nothing of this great crime.
This is not mearly Blood for Oil; it is Holocaust for Oil.
jbunt
hey karlof1
Why do you not just say billions died and billions wounded. Tell it like it is, you effing asshole.
I see we have our first Holocaust denialist. Truth's more than you can handle huh.
jbunt
karlof1
Millions of dead Iraqi's and millions of wounded Iraqi's - you bet I deny an Iraqi holocaust of that magnitude!!
Writerman,
I think that you and others have failed to see the benefits from the failed U.S. occupation of Iraq and its low rate of production now and for the next few years:
Oil that is not produced now in Iraq can be produced ten or thirty years out, when it will be much more precious than oil is now. Whatever we can do to turn a cliff into a bumpy plateau is to the good. However, I do not advocate indefinitely prolonging violence and disorder in Iraq, but . . . it is going to happen. When the U.S. finally does cut back on its presence, look for all-out civil war in Iraq, with civilian casualties going into the millions. Thus I foresee quite a number of years before Iraqi oil will flow at high levels--which is a good thing.
N.B. I do not advocate killing people to diminish the impact of Peak Oil. But I think the disintegration of Iraq will help to mitigate the high rate of decline in oil production in decades to come--pain now, gain later.
Agreed: Their pain - Our gain.
That is what war is all about: pain inflicted on others in return for gain to those whose way of life is not negotiable. To be fair, however, U.S. troops have had quite a bit of pain and death inflicted upon them, as is also the case for British and other coalition participants.
Perhaps a more accurate statement is: Pain upon the poor and the powerless to get benefits for the rich and the powerful.
Thinking about westtexas's Export Land model, another achievement of the U.S. is that they have taken a vibrant industrialized, urban (if non democratic) nation and basically plowed it under and sowed it with salt. So much for domestic consumption getting in the way of exports.
Excellent observation: The Iraqis won't be snapping up Hummers in large numbers any time soon.
Dear Don,
It's nice to hear your voice again. I was begining to think you'd sailed off into the sunset!
I think you're partially correct, but if the situation relating to oil reserves is as dire as it appears to be; then we don't have the 'luxury' of letting the stuff just sit in the ground, we need it now.
There's also the whole moral aspect to consider here. How do we justify the destruction and slaughter in Iraq? What kind of people do we become, what values do we have if we allow our leaders to rape Iraq, beat it to a pulp, strip it bare and steal every penny in its purse?
I think we turn slowly into monsters; depraved, cruel, brutal and without humanity or mercy; like the Nazis in the Ukraine. Do we really want to go down that dark and deadly route to perdition? Surely we need to stop, think and consider the alternatives, before we plunge onwards, like lions led by donkeys!?
I also believe the pain we dish out in the Middle East may come back to us tenfold down the line.
The Nazis were popular in the Ukraine because:
1. Nazis hated the Russians, and so did the Ukranians.
2. Nazis killed Jews, which was in good old pogrom-style Ukranian tradition, except the Nazis were more efficient.
Note that the U.S. is popular among the Kurds in Iraq because Kurdistan is peaceful and relatively prosperous since the ousting of Saddam. The U.S. occupation could have been successful if we had put 500,000 to 600,000 into the country, but except for some fired generals, nobody advocated that. (Also, with the reduction in U.S. ground forces during the Clinton administration the U.S. simply did not and does not have the boots to put on the ground. It can take decades to rebuild a military force after only eight years of gutting it and hollowing it out.)
"Iraq" is not so much a country as a convenient fiction.
If the US is really serious about bringing democracy to the middle east, perhaps it could begin by asking the Iraqi people whether they want to continue to live in a united Iraq or to partition it. Then we might ask them whether they want our troops to stay or to leave.
It seems to me that what the Iraqi people want is the only legitimate justification for doing anything in Iraq.
The United States of America is not a country, it's just fiction thought up by a few English aristocrats who didn't even know the land at all and who couldn't have cared less about the people who lived there.
English aristocrats refused to believe that the U.S. was a country. To some extent, that was what the War of 1812 was all about, to assert the sovereignty of the U.S. over U.S. citizens who were working on the high seas and being impressed into the British Navy.
Please get your history straight.
Unlike some so called countries, the U.S. truly is one country, e pluribus unum.
The question we face in the near term is how far we're willing to go for moral causes. Do you want to march, get pepper sprayed and arrested? It's a small price to pay compared to the widespread slaughter we're witnessing, but....
Heck no, I'll be ELP-ing over here, telling myself that I can lead through example by conservation and the like, leaving the wetwork to others. I'll even get to vote in another year-and-a-half! Isn't democracy great? We can replace those warmongers with - uh - Hillary or Joe or....
The ordinary people who lived downwind of Bergen-Belsen or Auschwitz were guilty of mass murder through their willful blindness. Some would say they were helpless to effect substantive change anyway. But surely, they - we - have to do SOMETHING.
Writerman: You appear to subscribe to the common conspiracy theory that the Iraq adventure is solely about securing Iraqi oil for the future benefit of the US economy. Question: how do you rationalize the BILLIONS of dollars which have (and are continuing) to fall off the back of the supply truck?
It's our tax money that's falling off the truck. The booty will be reaped by stockholders of the majors.
I 'rationalize' it by observing that the warmongers who led us down this path were too stupid to consider the ramifications of what they were doing. The blowback, the fog of war, the ugliness and costliness, the uselessness and all that.
They had a onetrack mind. They are Nazis. There's no better description.
I can not stop to imagine how much renewable energy solutions and fuel efficiency research - and embedding of the same which could have been undertaken in the US for all those money spent in Iraq …
Those money spent on the war – and waiting to be spent in the years to come are “money strait out the window” … benefiting no one …. THOSE money are spent to destroy stuff – and create enemies -
The US is having “a freeze frame” policy – running to standstill. How much wasteful time is not spent in news desks and in front of newspapers and TV-sets – by the worlds citizens – how much blood has not flooded the streets of Baghdad and beyond due to these stupid American(UK) behaviors … how much waste…(!)
And eventually when the Iraqi oil hits the pump (in the future)– its “game-over” anyway , because this oil is only a small fragment of oil in total – AND oil is still the one-time pick – a fading source
Queue word :
exponential functions combined with ; chinese / indian / other car growth, these are not making more oil flow into the US – just the opposite.
Thanks Jérôme for bringing up this amazing interview.
What a contrast of viewpoints for an organization that does not have "inflection point" in its vocabulary! Their last forecast does not seem to acknowledge any visible production problem unless they are talking about productive capacity :).
IMO, the best proof that peak oil is close is the 2003 invasion of Iraq. Almost all wars are motivated by access to resources and this one is no different.
About undiscovered oil in Iraq, The USGS is saying (crude oil only, 1996 assessment):
F5: 14.153 Gb
F50: 42.653 Gb
F95: 83.927 Gb
so there is only 5% chance that we will find more than 84 Gb of crude oil in Iraq between 1997 and 2025! and there is a good chance that this forecast is optimistic.
In addition, there is no guarantee that we will find a giant or even a super giant field that could make a significant difference. We often forget that peak oil is about of flow rates and not about reserves. Finding small fields will only thicken the post peak decline curve, not delay the peak itself.
It is true that the Western desert is relatively unexplored but the geology of the region is well known (see reference posted above).
Even if we imagine the highly improbable event that the civil war /insurgency in Iraq will stop tomorrow, it will take years before new fields can be developed and brought online. All we can hope is a rebound in production by giving a second life to the existing large fields (reserve growth) as it was the case for Russia after the end of the cold war.
Khebab,
We often forget that peak oil is about of flow rates and not about reserves.
That should be The Bumper Sticker
Peak Oil
It's all about Flow Rate
That's the point that needs to be driven home. Whenever one talks to someone about the energy situation or Peak Oil, They talk about how much was found or is to be found.
Based on the curves at this point in time no matter how much you find now it will not effect the peak date too much, It will make the graph look like the US's after finding Prudoe bay. A little bulge off the side.
BUT, BUT, Bottom line,
HOW MUCH PER DAY EXPORTABLE?
Paraphrasing what you Said.
- Peak Oil -
It's all about flow rates...
With WT's Export Land model,
We're hosed.
John
PS
How long until we get to the It won't Make Any Difference anymore time comes?
When would the projected demand/production ratio reach a point where it wouldn't matter even if you found a Ghawar every two years or so.
It wouldn't affect the amount of exportable oil on the market significantly.
An additional section from the original Fatih Birol interview in Le Monde:
(my capacity with the language is "reading knowledge", so buyer beware)
Happily we have Jerome here to amend this post, if I'm leading readers astray!
Some more from the original interview, freshly but inexpertly rendered:
Confirm according to promises? sounds a bit like wishful thinking, even a large increase from SA wont make up for the current shortfall and growth expected. It must all hinge on Iraq. To whoever said the war was too expensive remember it must cost a lot to have a military constantly on patrol and in practice anyway, and the extra cost / 'benefit' of the war in Iraq must be counted against this not a state of no military, also if long term resource wars are looming I bet the US was just waiting to test out some of its new toys too!!
Would the increase in production from SA use agressive techniques which will speed up the decline when it does occur?
What ? -
the IEA is still swallowing the camels whole ... what an appetite
wow - wow -wow- woooooooooooooooooooooWWWWWWWWWWWW!
This should be ON ALL FRONT-PAGES OF ALL NEWSPAPERS IN THE WORLD - every day for ONE full year - when will they wake up , them average Jonses ? (average Jonses = Governments AND the UN ... in this case..)
DID THIS KILL BIO-FUELS ...
or ? - did it at least hurt Biofuels ?
Just realized there is an error in the translation:
the biofuels will remain too expensive to produce
should read:
the biofuels will remain very expensive to produce
Apologies for this mistake and other yet undetected errors.
This needs to be trumpeted widely, and thrown in the face of every corn-state pol.
Sometimes I wish the market would just crash BEFORE the big war... that way people can learn to live with less before they learn to die.
Thermodynamics will humble us, yes.
www.lawnstogardens.com
There is another passage, where he talks about the near term risks of underestimating average decline rates of existing fields (currently thought to be 8%). Jerome mentioned it briefly above, but it probably should be translated in full. Maybe later.
it spells .......
well - there is no need for researching this, just make small cars with small engines it is done before - AND it is easy and cheap (!)
IT takes just politics, and in short time it will explain itself.
If anybody is interested in having the complete interview translated (assuming it doesn't appear in the Anglo press somewhere in the meantime), drop a line to Jerome or myself.
Better he do it for obvious reasons. But if he is too busy, I will do it.
I would love to see a full translation of this article.
Google's auto-translation of it naturally leaves something to be desired: http://tinyurl.com/2ulvqs
Curious, this is the same Fatih Birol that said in 2004:
"If Saudi does not increase supply by 3 million barrels a day by the end of the year we will face, how can I say this, it will be very difficult. We will have difficult times. They must invest."
(http://news.bbc.co.uk/2/hi/business/3777413.stm)
Now in that year (2004), did SA in fact increase production by 3mbpd?
No.
Was a rhetorical question. Maybe I should have asked "Did we hit difficult times?
It's now 3 years later and S.A. still hasn't increased production, and there's still not obviously "difficult times", at least, not for OECD nations that the IEA largely represents. So it appears at the least he overestimated demand growth. Or perhaps he thought sustained $60+/b prices would be more damaging to the economy than they have been so far.
KSA did increase production quite rapidly in his timeframe - from 8.4mb/d the month before he spoke to 9.2mb/d by the end of the year. At its recent production peak, KSA was about 1.5mb/d above the level he was addressing, and is currently only about 0.5mb/d above.
So it seems he has a track record of overstating the case somewhat.
Probably the latter. That the world economy can handle $70 oil was likely a revelation to a lot of people, including the Saudis who immediately put that knowledge to good use. :-)
That just about sums up what I believe atm. It seems a tad crazy to assume their production would decline by 1 million bpd, but then suddenly stop for 6 months...
One difference between Texas and Saudi Arabia is that Texas' largest field only accounted for about 7% of peak production in 1972, versus around 50% or more for the Saudi's largest field. What we probably saw in the past year was the effect of most of the north end of Ghawar watering out. At the same time, the Saudis have desperately been trying to increase their production from other fields.
I suspect that we may see a series of production plateaus, or slightly net increases (to levels below the 2005 peak), followed by new production lows, and temporary plateaus, in production going forward in Saudi Arabia as the Saudis are constantly fighting to reverse the declines of the largest oil fields. Note that the initial Texas decline, in 1973, was quite low.
In any case, Texas in the Seventies, like Saudi Arabia now, was characterized by falling crude oil production and higher crude oil prices: http://static.flickr.com/55/145186318_27a012448e_o.png
It's Deja Vu All Over Again
You keep claiming that; let's see if it's actually true:
From the EIA (via GreyZone) and IEA, we see that KSA production declined from Aug 2006 to Feb 2007, and has since been constant.
From the EIA's price data, we see that the price of crude oil reached a high in Aug 2006 and then fell until January 2007.
Please, I invite you to look at the data for yourself to verify that I'm right.
So what we have, then, is KSA production falling as oil prices were falling, and KSA production stable as oil prices are rising. That is not quite the exact opposite of what you claimed, but is certainly not compatible with it.
Now, you could question why KSA isn't raising production to take advantage of these higher prices, and try that to make an argument that their production is, if not declining, at least unable to rise. That argument, at least, would have the benefit of not contradicting the available evidence.
The problem there, of course, is there are many possible explanations for why KSA oil production is not rising, including the one they themselves claim - that the world doesn't need anymore oil from them right now. Let's examine what the situation would be if they were telling the truth.
If the world doesn't need extra oil but they supply it anyway, there will be a surplus of oil. Basic economics tells us that a surplus of a good will drive down the price for that good. Recent research - discussed here - has suggested that the price elasticity of gasoline is 0.05, meaning that a 1% increase in supply would drive the price down by 20%. Assuming the elasticity of oil is similar, KSA would be shooting itself in the economic foot - a 10% increase in their production level (back to last year's highs) would represent about a 1% increase in world levels, which would drop prices by about 20% (back to January's levels), which would reduce their overall income by about 10%.
i.e., the rational economic choice in this market is for KSA to not substantially increase production right now. Which is basically what they've been saying.
So one straight-forward explanation for KSA's oil production over the last year or so is simply that they've been trying to keep prices comfortably high by responding to market conditions.
One theory to explain the current data is a simple explanation that requires KSA to act in their own self-interest; a competing theory is one that assumes they've been lying for years about the core of their economy and are even now intentionally perpetrating a massive fraud on the rest of the world.
Occam's Razor is pretty clear on which of these theories is to be preferred.
I have no idea whatsoever as to where you are getting your price elasticity of demand of oil numbers come from. Could you provide a link.
Yes, I do know a lot about the price elasticity of demand for oil and also for gasoline. Unfortunately, it would take about a three thousand word essay and a dozen references to explain why the real-world numbers are no where near to yours. But where did you get those ridiculous numbers?
Here - a 2006 econ paper from UC Davis.
This paper's been discussed on TOD a couple times in the last few months, although perhaps not prominently enough for everyone to have seen it.
From published research. If you can conclusively demonstrate that the price elasticity of oil is substantially different, it seems likely there's a paper in it for you.
Based on your information, what is the approximate price elasticity of oil?
The price elasticity of demand for oil (or for most anything) is highly dependent on the time variable.
In the instantaneous short run, all goods are completely price inelastic, by definition.
In a long run where capital investments can be made and where consumers can adapt in various ways, the price elasticity demand for a product such as oil is much much much lower than it is in a short or intermediate run.
Estimates vary, but some published numbers have put the price elasticity of demand for gasoline--over a long run of say twenty years--as about minus one: that is a ten percent (real) price increase in gasoline will result (other things staying the same) in a ten percent decrease in quantity of gasoline demanded (amount consumed).
The problem, of course, is that "other things" (such as population, living patterns, incomes and tastes) do NOT
remain the same, and hence it is difficult to isolate out the effect of price elasticity of demand.
The fact that gasoline (and other oil products) are highly price inelastic in the short run has been known and researched for more than forty years. There are scores of well-known studies, going back to the nineteen sixties at least. Disagreements come much more in estimates for long-run price elasticity of demand because of the failure of "ceteris paribus," as mentioned earlier.
Given that that's precisely what I (and the research I was quoting) was saying, I don't see what your complaint was about, then.
Gas/oil is price inelastic in the short run - on this we're agreed.
Price inelastic means small changes in supply result in large changes in price - by definition.
Ergo, a small increase in supply would result in a large short-run decrease in price.
Ergo, there's a strong chance it would not be in KSA's economic self-interest to increase oil production right now.
That is the conclusion that follows from premises you agree with.
Currently available data shows a slow consistent decline. Where are you getting that it "stops" declining for 6 months? This is from the EIA:
Do you have data for April and May? And even with April and May I do not see any period that constitutes a 6 month "stop" in decline yet.
I would be interested in seeing the data that justifies your conclusion, thank you.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
I guess it simply depends on which data set you use. The most often-quoted figure for current Saudi production has hovered around ~8.4-8.6 since January or so. And since their refinery cuts to Asia have maintained the same % shortage all the way through July, ~10%, I see no reason to believe anything has changed dramatically since March.
Remember, they are out to make money after all. I'm sure they were just as surprised as you were to find out the world economy is somehow plugging along just fine in many places with $70+ crude. I'm not talking about the US and the sub-prime fiasco, westexas.
Greyzone.
How many months are there in a year? :-)
I presume some on the above table are not all 2006.
Could you re-post it please.
thanks
The last 3 dates should be 2007. Typographical error there is mine. The table covers 15 months. Does that help? Sorry for the confusion.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
thanks.
The annual decline rate for February, 2006 to March, 2007 was 9.2% per year.
Re: Effects of high oil prices
Normalized US Personal Saving Rate versus Brent prices: http://www.theoildrum.com/files/PSR_Brent.png
Recently, the decline in the PSR rate has accelerated, coincidentally as oil prices have risen again.
In any case, kind of funny how both the Saudis and Russians are now talking about "voluntary" production cutbacks.
So, if you are the #1 and #2 net oil exporters in the world, and your production is in irreversible decline, do you admit to it, and cause massive conservation measures worldwide and massive efforts to bring on more alternative energy, or you do claim that your production decline is "voluntary," in order to discourage conservation and alternative energy?
And if you are in an industry that is dependent on debt financed discretionary spending do you find it in your perceived short term interest to agree with the Saudis and Russians that any production declines are "voluntary?" Party on dudes! While you still can.
I would advise ELP.
Yes but the annual decline rate from Jan 07 to June 07 is...?
I bet it is remarkably different.
The IEA's latest Oil Market Report does, and it says that KSA oil production hasn't varied by even 1% from February through May. Based on the last 4 months, KSA's production is showing zero decline.
So I would not say they've had a 6-month period without declines, but the evidence certainly does say that their production rate has been rock-solid for the last third of a year.
Based on that - and on the progressive way in which fields tend to decline (i.e., an n% rate rather than all at once) - evidence is suggesting that KSA is not in the terminal decline people were predicting.
Strawman alert! People were not predicting KSA was in terminal decline. They were predicting Northern Ghawar was in terminal decline. There is a rather large difference, you know? It might be well to not stretch what other people said, such as Stuart and even Euan Mearns, in order to win debating points.
Or, if you are really so confident, you can take Stuart up on his bet for total KSA production. Go ahead, Pitt. You seem to know it all so make some money.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
You are in error.
Stuart concluded "Saudi Arabian oil production is now in decline". Not "Northern Ghawar", Saudi Arabia.
westexas agreed with that conclusion, and further claimed that Darwinian also agreed with it.
Chris Vernon asked "whether this is a deliberate production cut or beyond control depletion", to which Luis de Sousa, tate423, and toonsmith cited "high rig count" as tells for it being involuntary. Again, KSA and not Northern Ghawar.
Ace includes in his article "Saudi Arabia is in decline now" and forecast declines every month through the end of 2007 (although, to be fair, he predicted increases in later years). KSA and not Northern Ghawar. totoneila agreed.
In fact, Stuart wrote an entire article devoted to showing that KSA production was involuntarily declining, and the majority of responses in that thread were in agreement.
In fact, some of the very few people to differentiate between Northern Ghawar production and KSA production in their analysis of the overall situation in comments (rather than articles) were you and me, so it seems strange for you to assume that this differentiation was widespread but that I was unfamiliar with it.
It might be well to not assume people are doing things you wish they were doing in order to make up debating points.
As it happens, I wasn't referring to anything that either of those people had said at all; I was referring to the comments of other posters, often (but not always) in threads based on the (excellent) work of those two.
So - as often happens when one jumps to conclusions - you're barking up the wrong tree.
False Dilemma Fallacy. I can agree with the evidence that "KSA is involuntarily declining" theories are premature while at the same time not be confident that it will increase its production 10% past its recent peak.
From my comment up the thread (slightly edited for clarity):
And, from my response to that comment:
Repeating an unfounded claim doesn't make it any more true.
As I previously noted, Brent prices are currently more than 90% above the average price in the 20 months preceding 5/05, and they are more than 10% higher than the average price for 2006.
So far, events in Saudi Arabia are unfolding as I expected: Higher crude oil prices & lower crude oil production.
Who knows what the future will hold, but I expect to see lower Saudi crude oil production.
In any case, it appears that one of us, more than a year ago, explicitly warned of a Saudi production decline (and a net export decline).
Oil if finite. It's not if oil fields, regions and the world decline. It's when.
Crude oil production histories from the Lower 48, Total US, Russia, North Sea, Mexico, Saudi Arabia, and now the world (EIA, Crude + Condensate) are all consistent with their HL models.
Let me know when Saudi production, on a year over year basis, exceeds its 2005 level.
Until then, what's the point of endlessly debating whether Saudi Arabia is in long term decline?
Of course, hard core corncucopians will probably never concede that Saudi Arabia is in a long term involuntary decline. If that is your position, I hope you are right, but I would not count on an infinite rate of increase in energy consumption against a finite resource base.
You keep saying that as if it means something. Let's check it against the real world:
2006 average: $65
Summer 2006: $72
i.e., summer price was about 10% higher than year-long average
So it should be no surprise that summer prices would be higher than year-long average prices. Moreover, the price for brent oil is about 5% lower than it was in July 2006, when it averaged $74.
Accordingly, it's disingenuous to suggest that the price of oil has risen since last year, when in reality its price has been lower in every month this year.
Every month.
(To be fair, it appears as if June will break that trend, since there was a lull in oil prices in June 2006.)
Fair enough. But it is incorrect to suggest that they've shown declining production in the face of rising prices. The fact is that their production declines stopped when the price of oil started rising five months ago.
Yawn.
You warned of declines from the top three exporters - KSA, Russia, and Norway.
Norway had already been declining for a couple years, so no points there.
Russian production has grown, so negative points there.
KSA production was at a multi-decade high, so predicting a decline from that is a pretty thick limb to go out on.
So your prediction record is not good evidence that your current views should be believed.
Of course. And, since I've never suggested otherwise, how does that relate to anything I've said? Why do you bring it up at all?
HL was created to model Lower 48 and US, so no points there - a model always fits its source data.
The HL model for Russia is a very poor fit, has predicted the opposite of reality for the last year and a half, currently predicts unprecedentedly-large declines, and is becoming a worse fit every day.
HL would have predicted a KSA peak in 2000 - see RR's article - so it has proven to be unreliable on KSA data.
HL has been shown to be frequently unreliable, and has not been shown to be frequently reliable. Available evidence does not suggest HL is a reliable predictive method.
There were many predictions over the last few months that KSA was undergoing long-term, involuntary, and rapid decline, so it seems pertinent to point out that the evidence available at this point does not support such a conclusion.
It is unlikely anyone fitting that description reads TOD, so refuting their hypothetical positions is largely pointless.
Thank you Jerome for this astonishing information.
The likely answer to your last question is : our governements are not listening but some others are!!
It is quite obvious to me that the targets of this interview are not the governing bodies of western countries. There is nothing new in asking our developed countries to moderate their oil demand. This is on most media at least for the past 3 years.
The targeted audience of this disturbing interview is more likely the exporting countries, OPEC countries and SA in the first place, and this is new!!
The delivered message is the following : "stop playing game with us!! stop your bullshit about oil reserves!! If you keep hiding us your reserve, we will play tough with you"
This is maybe a first signal that the OECD countries are willing to hear the disturbing truth about the (in)ability of exporting countries to cope with the growing oil demand.
This is a giant leap forward since it implies that IEA (=western countries) is slowly moving away from denial!!
huileDePierre