Houston ASPO - the Workshop day

Seven am breakfasts in O’Hare are not a habit I plan on developing but there was I, for the second day running, at the same table even at Wolfgang Pucks.. But all in a good cause, as I headed off to Houston for ASPO. Going to the hotel - very new and needed, as the cabby proudly told me,– he asked which Convention I was here for (there is an Olympics meeting of some sort down the hall). I explained about Peak Oil and though initially he had not heard about it, he then mentioned a Houston City Council effort to have the cab companies use hybrids. This is now on hold, since it did not appear to be a well-received suggestion. Concerns that he brought up included the small size of the cars, that they were only 4-cylinder and would not stand the wear that a cab life would impose, and that the cabbies, who have to buy the cabs, could not afford the $3,000 to replace the batteries. Apparently the cab companies had suggested that they would comply right after the police Department bought theirs. Talking at an ASPO break about this, apparently Denver are experimenting with the process, but have only just introduced it with a few cabs., and a quick Google shows that a number of cities have already bitten that bullet.

With getting here a little late I walked into the first joint sessions after they had started, and, as with the ASPO in Cork, the atmosphere immediately conveyed that the meeting would be a success. (Though the initial judgment was made because I had to drop my bag and lean against the wall since there were no free seats, and when more were brought they were still not enough). The audience was obviously knowledgeable and the questions were technical, as were the answers. For the first “Workshop” day the sessions were divided, with TOD stalwarts Stuart Staniford and Euan Mearns giving the story of their incredible detective work in, as an audience member put it, developing the story of Saudi oil with virtually none of the resources or computing power of Aramco, and yet coming very close to what has to be the real story. Stuart explained how the numbers that he, and others at TOD, had put together and painted the picture of Ghawar depletion, (which is in the citation so I won’t repeat it) and Euan put this in the broader context of Saudi Arabia in general. Gail Tverberg acted as moderator to the session and the discussion. Perhaps the crux of the issue is that the authors do not think that Saudi Aramco can produce the volumes that they claim for Ghawar since, in part they assume a higher recovery factor that has been historically true for this type of rock, and with around half the production gone, things are not looking all that good. Reference was made in questions to other papers coming in the meeting that will bring further light to the topic, including such a comment from Matt Simmons.

When the discussion gets lively I also have a bad habit of listening, rather than taking proper notes, and so since all this afternoons material was intensely informative I would recommend not just downloading the powerpoints, that will be posted soon after the meeting (if not sooner) but also getting the DVD’s – the discussion and comments don’t make it to the slide presentations, and this is where a lot of the value lies. This was also true (though I only sat in a bit of it) for the concurrent sessions, which dealt with Investing – and which are going to force me to get a DVD copy for myself. The discussion when I dropped in was very lively (another full room) and very informed. There was a comment from one of the speakers that they had met with the Navy Admiral concerned with nuclear power, who expressed significant concern over the coming lack of skilled manpower in the civilian industry, just at the time when the old plants need to be replaced. The issues covered ranged over the spectrum, and though I did come in to the comment “that’s why we call it Deathanol,” which suggested that the discussions were a bit along the lines of some of the comments in Dubuque, I, like you, am going to have to wait until my DVD copy arrives before I know the rest.

After the break the investment session continued in the one session, and in the other the Millennium Institute and Charles Hall with staff and students, talked about the Threshold 21 model that it is described in more detail at the Millennium site. The program that has been developed is interactive and free, so that you can visit the web site, download the model, and input your own assumptions and see where the results will lead you. It deals with the complex interactions that occur in fuel use, and with the ability to enter data it helps those who try the model to better understand some of the strategies and what they might lead to, in trying to address the coming events.

Back in the investment group the discussion had changed to the need for LNG capabilities, the decision for Qatar to apply a moratorium, and the concern as to where US sites, such as the one in Freeport, TX, will get their supplies as they come on stream over the next two years. Contracts they might have, but not, perhaps, the wherewithal at this time to meet them (while Asian customers have all been committing to long-term contracts in buying up the available supply.)

There was a very tasty Mexican buffet, old and new friends were met and made, and then in a more relaxed mood we migrated to the Ballroom, where David Strahan began a session on “Views from Europe.” (And I had left the ubiquitous yellow pad upstairs, though there were many in the audience taking notes). He began with a slide showing a surfer on the Houston Ship Canal riding the bow wave from a ship. The record for this “free ride” is apparently 4.5 nautical miles in 22 minutes, since unlike the natural sea waves, the bow wave is relatively stable as is the canal water, as the ship, and surfer progress. But all free rides end, and so our travel on the cheap oil of the past is over. This is recognized more in European press than in the US, though he ended his remarks with a note from the current British Prime Minister “the UK does not anticipate a problem in the foreseeable future.” (Not defining foreseeable).

He was followed by Aage Figenschou of Simmons and Co, who could be said to have “done a number” on the USGS survey and the optimistic forecasts of folks such as CERA. He noted that the USGS had made a correction to their original forecasts of discoveries, (which are the basis of many predictions from other nations) based on ten years of experience, and that they had revised the annual discovery rate down from 22 billion barrels to 9 billion barrels (I may have these units wrong the slides went by fast). When this correction is applied to both crude and NGL projections and taken with demand growth, he computes a total drop from 3,300 gb to 2,800 gb worldwide and this leads to a peak in production in 2017. He then went on to comment on the projections made by other sources, including BP, IEA and CERA pointing out the growing discrepancies between the volumes forecast, and what then came to be. He had titled his talk “The Road to Damascus” with the underlying suggestion of a late life conversion by the IEA, and repeated a comment they made relative to Saudi Aramco predictions that “there was no ‘official’ reason not to believe the KSA data.” It is worth downloading the slides for this since the incremental change in numbers through sequential slides show better than I can convey, the disparities that grow between projections and reality, and the appearance in the CERA figures, of a magical transformation in around 2009 to bring everything back to the old situation. In looking at the total world surplus capacity (an expensive luxury that cannot be too high because of cost) the number is difficult to project but where it was once counted in the millions (Ed. Note which usually included the unrefinable Manifa oil) it is now down to around 350,000 bd which ain’t much.

Jeremy Gilbert and Chris Skrebowski then joined the group on stage for a question and answer period, talking about an industry “that knows well that they are in deep trouble,” with Big Oil going nowhere, and with suggestions that it is time for some companies to just fold their tents. (In his remarkd Jeremy did demur at Aare's description of the BP data).

Well the official conference starts tomorrow, if it is as good as today’s prequil, come early, grab a seat, and be prepared for – Hmm! Well it is going to be some pretty grim news, I suspect.

As usual my apologies to speakers that I may have misquoted, blame an unsteady hand, and presentations that were sufficiently full of information that I listened too much and wrote not enough – and so I too will get the DVD’s.

Thanks for sharing this information with us. I enjoyed reading it and look forward to more reports from the Conference.

Sad about the cabbies and Houston where the old urban legends about cars supercede reality and experience. The most reliable cars in the world have been many of the 4 cylinder Japanese vehicles - vastly more reliable than the big American made jobs that have been used by cabbies for years. Also the notion of replacing batteries, shown false through all experience but persisting as legend. Oh, well.

Great discussion of the opening of the conference - thanks so much for sharing this with us.

Hopefully the real-life experiences of hybrid-driving cabbies in Vancouver and Victoria will outweigh all the urban legends.

Probably 50+% of the cabs I saw in Vancouver and Victoria were Prii. Did not hear about anybody replacing batteries before the 200K retirement. I did hear that the regenerative braking reduced brake job intervals from ~50K to never.
Also the vast majority of cabs have only one occupant, so a Prius is more than big enough. Cab companies just need some mix of mini-vans and station wagons to dispatch only when needed.

$3000 is probably what they pass hand-to-hand off the ticker every week. They can afford it.

There is a crying need for a truly heavy duty workhorse hybrid that can be used by both police depts and taxicab companies. As far as police depts are concerned, there are thousands of municipalities that would love to buy something more green and energy efficient than a Crown Vic, and are under heavy pressure from their boards and the public to do so, but there just isn't anything that can really stand up to the wear and tear. What you will typically see is that police departments will buy hybrid SUVs for the police chief, crime lab, etc. (i.e., users not doing chases or running 12 hours/day), but NOT as patrol cars. There is a whole set of things that need to be beefed up for a vehicle to work as a patrol car: frame & suspension, brakes, electrical system, etc. Even most conventional SUVs are not built to stand up to 12 hr/day continuous operation.

I could be wrong, but I think all the retrofitting is because they are so unreliable in the first place. Of course you can't use a Prius to push a damaged 3/4 ton pickup out of an intersection, so certain capabilities would be lacking (although usually they just call a tow truck anyway) but in terms of wear and tear and required maintenance from just driving, especially with 12 hrs days, I bet statistics would show a stock Prius beating out a refitted CV any day. Any data to support your contention they aren't up to it? Remember the favored vehicle of the Taliban? Small toyota pickups. Nothing got harder duty than that. I'm sure they didn't do thousands of dollars of retrofitting either.

I waas giving you the perceptions of the cabby and what he understood the position of the cab companies to be. Bear in mind that some of them get used cars at say $3,000 and refurbish and sell to the cabbies at $5,000 - not much room in there for a Prius yet. (His story and numbers not mine).

Absolutely - I wasn't taking what you wrote in this regard as your positon. I was just sad to see that the old perceptions remain so pervasive. Certainly the issue of initial cost would be real, even if reliability is not.

As much as I am supportive of hybrids, there is another serious issue in using (at least the current generation Prius) for taxi and public safety applications.

The generation and conversion of 40-60KW of electric power on-board (The Prius power system uses 240 VDC which is processed through an inverter to 440V 3-phase AC for the traction motor) generates MASSIVE amounts of broadband white noise that blankets the radio spectrum from about 2 MHz to well over 250 MHz.

This doesn't impact the reception of AM and FM broadcast stations with transmit powers typically of thousands of watts. However it seriously degrades the reception in land-mobile two-way radios in this vehicle. (The typical two-way base station transmits typically only a few tens of watts, or at most a few hundred watts, toward the mobile receiver.)

I have personally observed the usable range for two-way radio systems installed in the Prius to be one-half or less of the typical due to desensitizing of the receiver by this on-board noise. (I am a land-mobile radio systems engineer.)

Two-way dispatch radio is critical to fleet operations such as taxis, public safety and delivery fleets. This electrical noise issue must be addressed before hybrids are going to be accepted by fleet operations.

Note: The noise in question drops off at higher frequencies and affects primarily the 30-50MHz ""Low-Band" VHF, 150-170 "High Band" VHF and 220 MHz. There is no noticeable problem at 450-510 MHz "UHF" or in the 800/900 MHz bands used by trunking radio systems and cell phones.

It was the inability to hear weak signals for radio coverage tests and measurments in my Prius that made me replace it with a Jetta TDI turbo-diesel. The diesel is exceptionally quiet electrically, especially since the diesel doesn't have sparkplugs that have traditionally be a source of noise in gasoline engines.

This is an excellent example of the kind of problems that arise as new technology is introduced. These problems are not unfixable, but they do require re-engineering something. In this case, it could be better electronic shielding of the Prius inverter, wiring, and motor, or changing over to higher frequency radios or cell phones (GHz) instead of VHF two-way radio. Not rocket science -- but each of these things take a few years to optimize and a few years for fixes to filter through the system.

It is unavoidable that there will be numerous analogous problems in rolling out renewable energy sources. For example, thin film photoelectric cells are not likely to be as robust to weathering as thick, old-style silicon cells. No doubt clever tricks could be invented to swap-out/electrically reconnect bad ones, they could be built directly into roofing material (note that this interacts with replacing failed cells), replaced cells and/or roofing tiles could be recycled to reclaim hard-to-get metals, various add-ons for existing roofs could be tested, etc, etc. I think it is very hard to guess at all these interactions in advance. We just have to do it. One use of subsidies is to allow some of this experimentation to happen earlier than it might if adoption were based on current economic viability.

My worries about whether 'business as usual' can actually successfully make small changes like the one above along with myriad other larger changes required to electrify transport, re-localize the economy, reorganize suburbs, continue to supply cities, and so on, all in the next 20 years are echoed by GreyZone here. Let's say, it still seems possible.

Ah yes, but the vested interest lie industry wins when it is wrong, not by winning the argument, but by sowing the seeds of doubt, ideally through press releases that are reported by unquestioning, but respected journalists and papers with editors and politicians who maybe influenced by dark sources of funding into failing to question their sources of information.

"Nobody needs to go anywhere else. We are all, if we only knew it, already there." (Aldous Huxley "Island" 1962, p38)

Thanks for the writeup! I'm sure I'm not the only one who had to skip both Cork and Houston and get DVDs instead. Yes, it's a pale imitation, but at least saves some fuel and less GHGs are emitted, fwiw.

Hope you all have a good time and cover new ground on the issues that have been lately on table (OPEC maintenance schedules, ELM, price trends & the rest).

Thanks HO for the commentary on yesterdays' sessions. I arrived last night...light rail out to the airport in Portland, OR, then two+ hours to get from the Houston IAH airport via SuperShuttle to my hotel room in downtown for the ASPO conference. A study in contrasts, shall we say.

Today's sessions very stimulating. Just as soon as I get to feeling a bit optimistic about humanity's ability to deal with PO, I look at the data again and get pretty bummed out. We can do this, but where's the tipping point? Nobody seems to know, including Boone Pickens (drumbeat), Tom Whipple, Matt Simmons, etc., etc.

The tipping point in the U.S. will be when lines start forming at the gas stations. Our balancing act is just about over and the teeter-totter will smack the ground very soon.


Judging by the third quarter OECD inventory trends, it won't be the US where the shortages hit but more likely a european country.

Since Europe exports Gasoline to the US I disagree.
They will stop exports before they suffer internal shortages.
Even in a open market your talking about one buyer on a pipeline and the other needing a tanker.

The gas lines of the 70's were the result of price controls. No one in this administration thinks that price controls are a good idea, hence we will in all probability not have gas lines but rather $7.50 / gallon on the sign out front. That will keep the lines more than adequately short.

The supply will be whatever it will be, the price will simply adjust to keep the good stuff flowing to those willing or capable of paying.

There won't be lines at gas stations. There'll be higher prices.

Greetings from Houston. It is one bitchin conference. Jeffrey gave his presentation today on the ELM, the question was asked if he thought that although the model says of course the long term trend is reduced exports available, what about the short term? Will there be mor available for importes to buy in the near future? Answer: No. So if he's right, that means ( to me anyhow ) that in the face of continually rising demand, the game is already over.

Matt Simmons gave a great talk during lunch -- the clanking of plates was a bit distracting but the talk was riveting nevertheless.

Suprise guest speaker towards the end of the day: Jim Kunstler. Most of the talks I've managed to attend have been really impressive (translation: chilling).

"The GOOD news is that we have successfully avoided a hard landing...Unfortunately the only alternative is a crash."

Anybody show up in camo gear with pump action shotgun(s) in tow?

Thanks ExtraO. Keep us posted.

I am new to Chicago and living in Hyde Park. I am hoping to find others who live in Chicago and share concerns about Peak Oil. Please contact me at kevinaugustine@juno.com thanks much, Kevin Walsh