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DrumBeat: November 21, 2007
Posted by Leanan on November 21, 2007 - 10:05am
Threat of $100 crude raises global alarm
Oil hovered on the brink of $100 a barrel on Wednesday. Mixed data on US crude inventories did not quite push it over the threshold. But the world is having to accustom itself to the idea of a three-figure oil price. The implications for the health of the world economy are troubling.“Until recently, there has been less concern about oil in the $90s than there was when it was $60 or $70. But it is obvious that oil at $100 is going to have much more impact than oil at $70,” said Daniel Yergin, chairman of Cambridge Energy Research Associates.
“Over the next few weeks, we are going to see these prices flowing through to US consumers, at a time when we have other serious economic problems.”
Oil hesitates on drive to $100 a barrel
NEW YORK - It didn't happen Wednesday, it may not happen Thanksgiving day, but the price of oil seems destined to burst through the $100 mark sometime soon, leaving higher pump prices and rising heating fuel costs in its wake.Energy futures balked on that drive Wednesday after the government reported that supplies at a key oil terminal in the Midwest rose for the first time in weeks. Analysts said it was a pause, not a retreat for energy futures that reached as high as $99.29 in electronic trading overnight.
Giving Thanks For Oil and OPEC
When you sit down for your Thanksgiving meal this week, don't forget to thank the oil. No, not the extra extra virgin olive oil or the polyunsaturated high omega 3 vegetable oil, but the crude -- the dead dino, fossilized pond scum, ancient sunlight, rock oil -- aka, petroleum.
Big oil, its lobby court bloggers in media push
HOUSTON, Nov 21 (Reuters) - Executives at large oil companies often say that the U.S. public -- unnerved by high gasoline prices -- does not understand or appreciate how expensive it is to keep the nation's engines running.And now in a first, two big energy companies and the American Petroleum Institute (API), the U.S. oil industry's main lobbying group, have reached out to a conservative band of bloggers to tell their story.
"We recognize here that there are many different channels of communications that exist today," Jane Van Ryan, new media advisor at API, said. "We've been looking into the blogosphere for the last several months, and there were a few people who seemed to be a little more knowledgeable about oil and gas."
Factors that contribute to Peak Oil crisis
Finally, because many oil exporting nations are experiencing both depletion and increased domestic consumption, these exporting nations will soon reduce exports (see research by Rembrandt Koppelaar and Jeff Rubin). For example, in 2007 the Mexican government announced that due to declining production, Mexico will reduce oil exports to the U.S. by 150,000 barrels per day on the average over the next four years, by 500,000 for the following two years, and that its oil reserves will be depleted by 2014.
Mexico struggles to control month-old oil spill, gas leak, fires at damaged Gulf platform
Workers were still battling a nightmarish combination of gas and crude leaks, fires and oil slicks at a damaged Gulf oil platform on Wednesday, almost a month after it was damaged in an accident that killed at least 21, an official said.Since the Oct. 23 accident, the damaged platform has experienced bad weather and at least three fires.
Chrysler plugs in to electrics
Chrysler will unveil three electrically driven concept vehicles at the 2008 Detroit Auto Show in January.
Thoughts about oil and Arctic refuge
As much as BP would like to convince us that they don't need our oil and they will be going someplace else for it (if we don't cater to their every whim) - the truth stands that there is not an everlasting surplus of oil to provide to the world. BP and every other oil producer support this statement when they justify the $3.39 gallons of unleaded at the pumps. If they don't want to take the higher taxes proposal, here's an idea: We can hold onto the oil and charge them more for it later on down the road. In that scenario, they gouge our pocketbooks now, we could gouge theirs later - on a much larger scale.
The dominant theme that emerged from the cacophonous OPEC summit that concluded in Riyadh on Nov. 18 was countries that have amassed huge piles of dollars from selling oil don't like seeing the value of their currency reserves eroded. While the host Saudis urged restraint lest the dollar fall even more, Iranian President Mahmoud Ahmedinejad scorned the greenback as a "worthless piece of paper."
Castro: Oil Costs And Development
Chávez could invoke an illustrative example which Cuba is well aware of: with what it costs to import a single barrel of oil at the end of 2007, 13.52 tons of light oil could have been purchased in 1960, including their transportation, that is to say, nearly 50 times the amount today. In these circumstances, a country like the Bolivarian Republic of Venezuela would continue to supply the United States with oil, a non-renewable resource, for practically nothing. The earth would continue to sink as its oilfields are drained of the oil that supports them.
With crude approaching $100 a barrel, consumers should brace for record gas prices and higher airfares - just in time for the holidays.
US oil futures have come within spitting distance of triple figures and the all-time inflation-adjusted peak of $101.70. And while prices have eased over the past few days, the medium- and long-term trend is up. The picture is one of “extreme fundamental tightness”, as Barclays Capital puts it.
Shell could resume some Scotford production soon
Royal Dutch Shell could boost output within a few days from its fire-damaged Scotford oil sands upgrader as it looks to restart one of two major producing units at the site, a spokesman for the company said on Wednesday.
BP Whiting on schdule for 300,000 bpd by year end
BP's refinery in Whiting, Indiana, was still on schedule to ramp up crude distillation to 300,000 barrels per day by the end of 2007, said a source familiar with refinery operations.When the company released its third-quarter earnings, officials announced plans to restore full production at the Whiting refinery by the second quarter of 2008 and 300,000 bpd by year end.
China to increase oil output, exploration - Wen
China will boost oil output at state refineries and increase exploration to ease a domestic supply crunch that has led to nationwide fuel price hikes, Premier Wen Jiabao said Wednesday.
Court sides with US oil firm over Ecuador tax row
An international tribunal has ordered Ecuador to temporarily halt demands to charge U.S.-owned City Oriente a controversial windfall oil tax approved last year, according to court documents released by the company Wednesday.
Petro-Canada denies it's willing to swap assets with Russians
Petro-Canada yesterday denied reports it would be willing to swap heavy oil assets with Russia's largest company, OAO Gazprom, for a piece of a massive Russian gas field.
Venezuelan shipment of 16,000 barrels of gas/diesel averts Guyana fuel crisis
The Venezuelan Embassy has announced that it had facilitated "a shipment of 16,000 barrels of gasoline and diesel fuel," which arrived in the country yesterday following an emergency request from the Government of Guyana.
Australia: Taxpayers lose out on petrol subsidy
QUEENSLAND motorists are missing out on $100 million in fuel savings each year because the legislation that underpins the state's 8.34c-a-litre petrol subsidy scheme is "rubbish" and open to manipulation.
Kuwaiti operator takes delivery of mega oil tanker
State-owned Kuwait Oil Tanker Co. (KOTC) has taken delivery of a new giant oil tanker as part of a 600 million dollar nine-vessel deal, its chairman said Wednesday.
New Oil Crisis: An Engineer Shortage
You've heard the reasons for high oil prices: instability in the Middle East, booming demand in China and India, the sagging dollar. Now add another one to the list: Engineers.
Energy Bulletin and the Reality Report(audio)
Bart Anderson of Energy Bulletin recaps recent news related to resource depletion, climate change and more. In the past several weeks, with the rising price of oil, Energy Bulletin's readership has increased by over 40%.
U.S. should lead on conservation
Our technological breakthroughs are indeed miraculous, but mankind still cannot create one of the essentials of life - water - or one of the great luxuries of life: petroleum. There are limits.Oddly, we seem to have hardly noticed. In the industrialized world, especially in the United States, we consume precious resources as if abundance were our birthright. And we're angered by anyone who suggests otherwise.
Germany at Odds With UK on Renewable Goals
LONDON - Germany wants European states to meet their own renewable energy targets as much as possible, rather than pay other countries to do it for them, deputy environment minister Matthias Machnig said.Britain favours the latter trading approach.
New Report Warns Biofuel Crop Cultivation May Worsen Global Warming
Expanding biofuel crop plantations through deforestation worsens global warming and harms local livelihoods and the environment, says the International Institute for Environment and Development in a new report.The report, "Up In Smoke? Asia and the Pacific", presents new evidence that biofuels could turn into a rush for "fools gold" across Asia as huge social and environmental costs outweigh the benefits.
North Dakota: Officials Discuss Fuel Supply
Rud said fuel dealers have said the tight supplies are as bad as the oil embargo of the 1970s.Also: Fuel supply shortages discussed"We can't keep taking the crumbs on the end of the pipeline," Rud said.
China oil thirst 'not explosive'
China's unquenchable thirst for oil is contributing to sustained high prices, but it is not the main factor in crude's latest surge toward new records, analysts said on Wednesday.Speculative trading, geopolitics such as unrest in the Middle East and US efforts to fill its oil reserves, as well as the weakness in the US currency, are more important reasons for crude nearing $100 a barrel, they said.
China imports diesel to ease shortage
China's biggest oil company says it will import 750,000 barrels of diesel this month to ease shortages that have disrupted trucking and caused long lines at filling stations.
Iraq boosts oil exports after re-opening Kirkuk pipeline
Iraq has boosted its oil exports to almost two million barrels a day (bpd) after reopening a pipeline to Turkey and hopes to sharply raise output in 2008, a senior oil official said on Wednesday.
Running On Empty: A new exhibition considers the lessons of the 1973 oil crisis
With fuel prices reaching record highs and concern about the planet’s dwindling resources mounting daily, Mirko Zardini, director and curator of the Canadian Centre for Architecture (CCA), thought the time was ripe to revisit the moment when the reality of an energy crisis first crashed into the public consciousness. The exhibition 1973: Sorry, Out of Gas, on view at the CCA until next April, considers that decade’s oil crisis and the architecture community’s response, which included significant experiments and research that Zardini fears are now being ignored.
Geologists study geothermal heat as an energy source
As the United States' energy crisis looms large in our future, scientists and researchers are trying to quickly develop alternative energy sources and production before fossil fuels run out. One option that other countries have discovered and utilized is the extraction of geothermal energy from miles beneath the Earth's surface.
Just as mankind was once expelled from Eden’s world of naked innocence by the knowledge of good and evil, so the Modern Investor is rapidly learning the facts of Peak Oil. That’s inherently unsettling because we know that economic growth has always proceeded apace with the growth in oil supply. So what happens to economic growth when the oil supply peaks and then declines? Is our economy, like Wile E. Coyote, coming to the edge of the cliff? Is it time for an intelligent investor to panic?
Brazil’s new and notable oil discovery
The find is a slap in the face for those geologists who said there were no more large oil provinces to be found, especially as it comes soon after the large discovery in the Bay of Bohai off the Chinese coast.
Petrobras output takes a tumble
Brazilian giant Petrobras saw its domestic oil output fall 2.3% in October from September's figures - its fourth straight monthly drop - with production falling 5% year-on-year as rig glitches took their toll.
Black Friday: Why This One Is Especially Dark
I have no crystal ball, nor do I claim to have well-developed psychic powers, but I'd be willing to bet almost anything that next Thanksgiving season will be dramatically different from this one. A dark curtain of despair has descended, along with $100 oil, on Wall Street, and the amount of debt that the American working and middle classes are trying to juggle is, as Stan Goff so eloquently stated in his article on my site, "Middle Class Angst", nothing less than "pre-volcanic."
TransCanada Seeks to Build C$983 Million Gas Pipeline
TransCanada Corp. said it will seek approval for a C$983 million ($996 million) natural-gas pipeline project to increase access to production in northwestern Alberta needed by Canadian oil-sands producers.
Kuwait dinar jumps as dollar slide tests Gulf pegs
Kuwait let the dinar make its second-biggest daily gain on Wednesday since the oil exporter dropped the dollar peg in May, as the U.S. currency’s global slide raised pressure on Gulf neighbours to follow its lead.
Canterbury tourism body steps up green moves
Lincoln University tourism professor David Simmons said on Monday he had chaired a Christchurch conference to discuss tourism's future when long-haul flights as a luxury activity were being questioned. In the face of "peak oil" (where usage was outweighing cheaply sourced new oil finds) and climate-change concerns tourism needed to develop a sustainable model, he said.
US backs plan to build new nuclear power plant in Armenia
The US is backing Armenian plans to build a new atomic power station by 2016 to replace a Soviet-era nuclear plant that has raised safety concerns, a US diplomat said.
Bush Fiddles While the World Burns
The U.N. Intergovernmental Panel of Climate Change that put this report together was awarded the Nobel Prize in October. It's been studying the problem for five years. They've now released four reports on the subject. This latest is the most blunt.But the Bush administration says, "We don't have a view on that."
Stop any bus and wake up some sleeping wino in the back, and he would have a view on that. How can the George Bush administration possibly not have a view on it?? It's the potential fate of the world.
Oil prices strike record high near 100 dollars
World oil prices surged to a record peak above 99 dollars per barrel on Wednesday on the back of the falling US dollar and tight global crude supplies, traders said.In early trading on Wednesday, New York's main contract, light sweet crude for January delivery, rocketed to an historic 99.29 dollars.
In London, Brent North Sea crude for January delivery jumped to an all-time pinnacle of 96.53 dollars per barrel.
Here's why the U.S. is facing up to its thirst for oil
In its report, the task force concluded the U.S. Department of Defence can use coal and shale for all its fuel needs - all 312 million barrels of oil a day - by 2011. (The U.S. Air Force is the biggest military user of oil by far, requiring 219 million barrels of jet fuel a day; it is already testing synthetic fuels to replace conventional fuels.) The task force found the U.S. can produce between 7.65 million barrels and 9.35 million barrels a day from unconventional resources by 2035. This oil would be produced as follows: (1) from oil shale, 2.5 million barrels a day; (2) from oil sands, 0.5 million b/d; (3) from coal, 2.6 million b/d; (4) from heavy oil, 0.75 million b/d; and (5) from depleted and abandoned wells, a minimum of 1.3 million b/d and as much as three million b/d.The task force describes this goal as aggressive but realistic. If accomplished, it would mean that the U.S. would meet all of its anticipated increase in oil demand by 2035 from domestic production - with several million barrels a day left over to reduce oil imports significantly.
Crude crunch coming: Industry wisdom now recognizes there are practical limits to the world's oil supply
Market theory predicts that higher prices will encourage development of supply. This time, the dictators who control much of the world's oil reserves have so much money coming in and so little concern for others that they lack the usual motivation to produce.No wonder Western energy executives are beginning to worry that demand will soon outpace supply.
But doom and gloom is not the only upshot of $100 oil. In fact, many analysts see pricey oil as the jolt the economy needs to cut greenhouse gas emissions and foster more energy efficiency. That's because as oil gets costlier, the incentives rise for new investments in energy efficiency and renewable options. Initiatives such as plug-in hybrid cars or cellulosic ethanol become more cost-competitive. Higher oil prices also ratchet up the pressure on Congress for new laws supporting renewable, cleaner energy sources on a larger scale.
Total CEO sees little respite from high oil price
The head of French oil giant Total warned on Wednesday that oil prices would remain high as crude prices inched closer to $100 a barrel."Today, there is not much chance for oil prices to decline," Total Chief Executive Christophe de Margerie said.
OPEC countries set two values for oil
Saudi Arabia's King Abdullah on Saturday brushed aside allegations that OPEC is a monopoly controlling the price of oil. The near-$100-a-barrel price from this year's spike has, in inflation-adjusted terms, "not reached its rate during the early 1980s," he pointed out.While everyone else is paying more for gasoline, however, the king gave Saudi motorists a 30 percent discount two years ago. Saudi 91-octane fuel now sells for about 46 cents a gallon; premium, 95-octane gasoline goes for 61 cents.
Using a rate of inflation calculated the old-fashioned way, as by John Williams at his shadowstats.com site, instead of the lying, distorted way that Greenspan and Boskin created to do it, Mr Conrad has confirmed with his own calculations that real, in-your-face, pay-me-now, price-rising inflation is actually running at or above 10%.Using this inflation data, he has thus calculated "the oil price history using the 1980 CPI method. It turns out that 1980 barrel of US$39.50 crude is the equivalent of over US$200 per barrel in today's anemic dollars." Yikes! Oil would have to rise to US$200 a barrel just to reach the old high price in inflation-adjusted dollars! Yikes! US$200 per barrel, thanks to a falling currency!
Death toll in Saudi pipeline fire rises to 40
A total of 40 people died when fire broke out on a gas pipeline in Saudi Arabia on Sunday in one of the deadliest such incidents to hit the oil-rich kingdom, state oil giant Saudi Aramco said.
Shell Mulls Stakes Sale in Two Nigeria Blocks
Royal Dutch Shell PLC is considering selling $900 million worth of interests in Nigerian offshore blocks as it restructures and reduces its business in the troubled region, people familiar with the matter said Tuesday.
Shell Pitches `Several Hundred Billion' Dollar Project to Putin
Royal Dutch Shell Plc and partners told Russian President Vladimir Putin that developing Arctic gas fields big enough to supply global demand for a decade may cost "several hundred billion" dollars.
The American people, meanwhile, are caught between distaste for anti-democratic governments abroad and their own nation’s shameful reliance on imported oil, much of it from the Middle East, for transportation.Perhaps such policy failures would be more meaningful if motorists, the next time they fill up their gas tank, would envision a woman barely in her 20s facing 200 lashes for no crime at all.
Kidnappers Release Schlumberger Employees in Sudan
Schlumberger announced that the three employees abducted in Sudan on October 23, 2007 have been released. All three, one Egyptian, one Iraqi and a Sudanese, appear to be physically well and unharmed after their ordeal. They are currently undergoing a thorough medical check up before being reunited with their families and we request that they be given privacy during this time.
Australia: Top ex-pat scientist urges population curbs
HALTING population growth in developing countries should be part of a global strategy to reduce mankind's impact on the environment, according to an eminent expatriate Australian scientist.Immediate past president of the Royal Society, Professor Lord Robert May said that, given the threat of climate change, a declining global population was "a prerequisite" if humanity was to achieve a sustainable ecological footprint in the future.
New Technique May Halt Corrosion in Offshore Pipelines
Researcher Rohan McDougall is amongst those taking part in a Bio-Industry Forum in Darwin today.He says that by using natural materials that mimick seaweed, the resource industry could significantly reduce offshore bacterial corrosion.
"It's distinct from traditional bio-cides that kill bacteria. It regulates bacteria's behaviour, stops them from sticking to the surfaces of pipes," he said.
Climate change a growing threat in Tibet, media report
Climate change is causing more weather-related disasters than ever in the Himalayan region of Tibet, where the temperature is rising faster than the rest of China, state press reported Wednesday."Natural disasters, like droughts, landslides, snowstorms and fires are more frequent and calamitous now," Xinhua news agency quoted the director of the Tibet Regional Meteorological Bureau, Song Shanyun, as saying.
"The tolls are more severe and losses are bigger."
Japan pledges 2bln dlr Asia aid to fight climate change
Japanese Prime Minister Yasuo Fukuda on Wednesday unveiled a two-billion-dollar aid package to help developing Asian nations fight pollution and combat climate change.The initiative, announced by Fukuda at a summit of Asian leaders, includes soft loans and training programmes over five years, and is aimed at helping the region tackle global warming and push forward with economic development.
Asian leaders sign vague climate pact
Leaders of 16 Asian countries, including top polluters China and Japan, agreed to a vague pact on climate change on Wednesday, trying to put aside discord over Myanmar's suppression of democracy protests.
The world’s scientists have done their job. Now it’s time for world leaders, starting with President Bush, to do theirs. That is the urgent message at the core of the latest — and the most powerful — report from the Intergovernmental Panel on Climate Change, a group of 2,500 scientists who collectively constitute the world’s most authoritative voice on global warming.
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A new Energy and Environment Round-Up has been posted at TOD:Canada.
You can go further back. Most of the "barbarian incursions" recorded by the Romans can be correlated to crop problems among the Gauls and Germans that set them in motion.
New Bush Administration Furnace Standards do Nothing
Minimum AFUE for gas furnaces raised from 78% to 80% in 2015.
Minimum AFUE for oil furnaces raised from 78% to 82% in 2015..
Most furnaces already exceed these standards, many (about 1/3rd) are 90+% AFUE.
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/19/AR200711...
Best Hopes for Intelligent consumers and state efficiency standards,
Alan
Watching Bush play at President is a lot like watching a tractor-mounted post hole digger. Spin, spin, spin and all that we get is a deeper hole.
Sometime you hit some big rock and it stops, or you run outta digging tool.
But stop the hole digging does.
Imaging what it would be like if the world was under adult supervision, notably the White House
Homo Semi-Sapiens
Heh. That would be great!
"You can never solve a problem on the level on which it was created."
Albert Einstein
I guess he's waiting for new and better technology. Oh, I guess you pointed out it's already here. Better technology doesn't do a whole lot if you can't get people to use it.
Alan,
There is a faction in this country that thinks energy conservation is un-American, a threat to the status quo, starting with Dick Cheney. Did you really expect at this late stage the Bush administration would bite the hand that feeds it.
Future of levee project rests, literally, on clay
Today I'm at home and I'll be watching CNBC to see how the NYMEX market responds to the EIA weekly petroleum report. Specifically, Robert Rapier noted a time delay in the indicators and I want to see what it looks like "live" or to see what delays may be inherent even on a cable business channel like CNBC.
There is much discussion this morning about the price of oil, the dollar, etc. A representative was on from Pinacle Gas Resources suggesting that today oil prices will sail right through $100/bbl and will probably head to the $108-110 range (all the majors are reporting lower energy production not higher , but it's not peak oil, it's just production problems). And what woud you classify peak oil as?
Currently $150 call options for June oil.
However, has anyone been paying attention to the spot market (for either WTI or Brent, for example)? Yesterday, the WTI spot market closed at $99.16, the highest I've ever seen it. Of course, some will tell us it's still not as expensive as 1980 or it's the dollar.
Now I know that the futures and spot market prices tend to trend together and the price points tend to separate upon contract expiration but the spot price is soaring and leading the price surge.
Looks like those wo thought oil woulf hit $100 before hitting $86 are going to be right again. Are we getting ready for the next price range survey?
So I suppose the question is, what is "expensive" oil? $100 a bbl oil and few outside the financial markets are doing anything other than grouse. And Simmons is telling us (rightly so) that at 15 cents a cup that oil is cheap. Meanwhile some do gooders are proposing a gas tax for carbon related reasons - starting 10 cents a gallon and increasing 10 cents a year until its not needed any longer (man, can I get some of what their smoking?)
So, what's "expensive" - how do we define that and what's the dollar amount?
RE: Twilight Zone Buying Power...posted above by Leanan...If one looks at the 'real' inflation figures, as computed pre 1980, as opposed to the 'post 1980 inflation computations', $100 oil is cheap...
http://www.atimes.com/atimes/Global_Economy/IK22Dj02.html
...snip...'And since I am always on the lookout for ways to illustrate how inflation causes the loss of buying power of dollars, it is fortunate for me that MoneyandMarkets.com happened to come along and write: "Suppose you put US$500,000 into a money market account earning 4% a year back on November 7, 2002. Compounded daily, you'd have US$610,694.69 as of yesterday."
Immediately I know that he and I travel in totally different circles, as all my hoodlum friends and me TOGETHER couldn't come up with US$500,000 to put into some stinking money market fund. So I was getting ready to say "Bah!" and leave, when he says: "But wait! Over that same five years, the dollar has lost another 28% of its purchasing power. So, what one dollar bought in 2002, will only buy US$0.72 worth of goods and services today."
At that, I start sensing something sinister and important here, but I know that I am too stupid to understand exactly what, so I will keep my mouth shut and my hand inching towards the pistol I have under my jacket, just in case. This "freezing like an armed deer in the headlights" tactic turned out to be very fortuitous, as he was somehow persuaded to go on to explain: "So that US$610,694.69 in savings that you accumulated and thought you protected so wisely in a money market fund? Well it will only purchase US$439,700 worth of goods and services - 28% less than you thought!"...snip...
We could define "becoming expensive" as a significant increase in the hours an individual has to work to afford a barrel of oil.
In other words, it's relative.
Someone making $10 an hour needs to work 7 hours for a barrel at $70, and needs to work 10 hours for a barrel at $100. Three more hours.
Someone making $100,000 a year is making about $50 an hour, and needs to work 1.4 hours for a $70 barrel, 2 hours for a $100 barrel. 36 more minutes.
So more expensive oil hits the poor harder. So if you're rich, you have few problems. But ...
Where does "profit" come from? How do you actually "make money"? If money is just a representation of obtainable services and resources within the system, then having more money means you have more access to services and resources. But the services and resources available are limited to the system as a whole, to society, to the planet, so if you have more, someone else or something else has less.
Profiting in the pre-peak age meant that you were taking more from a growing pie. Profiting in the post-carbon age means taking more from a shrinking pie.
Taking more of the remaining oil reserves, one type of cheap energy, drives up the price, and depletes the oil in the ground.
Taking more from the poor, such as requiring more work for the same pay, does not have the same effect in driving up prices, but the increased demands on the poor affects the actual supply of poor people. When you take more and more from people who already have so little, they have increasingly less to support themselves, and they get sick, dehydrated, hungry, and eventually die. Taking more from the poor will deplete the supply of poor people.
So, in reality, if you're rich, you're not protected, because all the other rich people are also competing for the dwindling supply of all easily-exploitable resources, from oil to poor people, your pain will just take longer to feel.
That is not necessary, and was true just a few times at history.
May I ask you why? We can increase our energy usage even on the post-carbon age. And there is no proof that all the value we obtain comes from energy. (Although both may be the case on a few decades or centuries.)
No, it's always been true. Any physical item in anyone's possession came from someone else (tribesman, colleague, competitor) or something else (land, trees, plants, animals).
This includes the flesh and bone making up the human body. It was made out of food. That 150 pound frame is not found in other plants, animals, or the soil anymore.
Granted, on an individual level possession is temporary (it gets taken away, you use it up, you die), but as society renews itself the possessions are passed down. As society grows, more possessions are acquired by the group.
Now, it is readily noticeable on a planetary level, as shortages of resources and refined products are widespread.
There is no proof that the value we obtain comes from energy? I challenge anyone to find a single thing that humans do in living their lives and/or "creating value" that doesn't require energy.
We cannot increase our energy usage for a system dependent on oil to function when the oil is already running out. When oil was plentiful, we used it for fuel, asphalt, and plastics to build out nuclear and other alternative energies, as well as support the lives of billions of people. There are now additional billions of people dependent on oil, while oil production has plateaued and will soon decline. It's like suggesting that you can convert your car to run on propane or ethanol, after you have already run out of gas in the middle of nowhere. Or like suggesting your body could run on synthetic blood plasma, after you are already bleeding to death.
Had we invested our one-time-use energy sources all in renewable energy from the get-go, like solar, wind, hydro, biofools, etc., then, yes, after oil peaked we could conceivably still grow our system, because our system wasn't dependent on oil, it was dependent on the renewable energy infrastructure we created with oil, oil which would then be no longer necessary. As long as we didn't run short of anything else that we had used to build a renewable energy infrastructure.
But in our current system, all of the produced oil in our plateaued oil-dependent system has already been spoken for, having many current uses (pesticides for crop yields, plastics for food packaging, diesel for trucking and training yesterday's products to today's consumers for tomorrow's desires and needs). To use an amount for something else, means 6.6 billion people have to give up that amount of oil they are currently dependent on and currently using to exist, grow, profit, and expand.
"Growth" is not possible without additional resources and/or additional energy, and these resources and energy must be processed by the system we currently use, not the one we want.
But whatever system we inhabit, growth ends eventually, because on a finite planet we're going to run out of something eventually.
Basically the problem is you have a sort of base lifestyle in any economy for the US its probably around 15-20k or so away from the coasts. This is what it costs to live a basic life. Rising commodity costs have a greater impact on the base then they do for wealthier people since a poor person is spending say 90% of his income for food/shelter/clothing/transportation. Above this base your talking more about lifestyle choices with disposable income.
Now in a sense your argument is not correct because the poorest person is contributing little to the consumption economy since they simply don't have much disposable income. The richer person is just as effected since in general their job depends on the ability of others to consume so when they cut consumption slightly eventually the net effect is one member of the 100k plus crowd looses his job and ends up in a lower paid position.
A obvious example is when the housing market dried up all the people making good salaries providing for the market lost their jobs. Although its indirect in the case of the wealthy the absolute impact is the same.
So if your spending more money for gasoline your not buying something else at the end of the day the impact is the same regardless of wealth. In the case of the wealthier people its concentrated in the individuals that lose their jobs as apposed to spread out amongst a class but the effect is not diminished.
This is why I think the ohh we can afforded higher prices is a bunch of bunk. We made it this far borrowing money but that won't last forever. The only way to really adsorb higher fuel prices is to increase efficiency and it does not matter at what level you started. The fact we are already more efficient per dollar today does not change the fact that if oil goes up we have to increase to compensate.
I probably changes the ratios i.e if your 90% efficient then oil needs to double before you increase your efficiency 1% to compensate. Vs if your 50% so the relative effiency gains needed seems to be true but thats a different argument from whats often presented. We cannot absorb higher prices but the % change needed in efficiency to overcome higher oil prices is lower. Opposing this is it gets increasingly harder to increase efficiency as your approach 100%.
This is why I think we are going to see large price increase before we finally see demand drop. Most of the demand drop will be outright destruction not conservation.
The only way to really adsorb higher fuel prices is to increase efficiency and it does not matter at what level you started
Memmel,
I beginning to think that creative alternatives will be used to decrease gas demand. Loss of licence for more crimes. Higher taxes on car registration, cut down on the number of cars on the road thru discouragement.
Having to take drivers test every few years. No one under 21 drives...
Different strategies to cut down on number of cars/drivers period in addition to the more often covered subject of higher efficiencies.
Making it a "Luxury". (That we can no longer afford)
John
I don't think so. The problem is the price point at which gas becomes a burden varies wildly even in the US. I drive like 2000 or so miles a year for example and make a good salary so I could afford fuel if it was made from vegetable oils. When they make plug-in hybrid mini-vans my fuel usage would drop to practically zero. Its the people that have made bad life style choices and are straining their income and the poor that will get hit the hardest.
The point is that if you give it half a though and or willing or make a decent salary you can get out of buying gas. So the effects are really fragmentary for society. People that change wont really be effected the poor can manage.
But you can see how it would really fragment our society it stands to become a issue similar to abortion.
"So I suppose the question is, what is "expensive" oil?"
One criterion of 'expensive' is to compare its cost to that of some other product that can be used in its stead. As long as it costs less than some realistic competative product in the here and now, it is 'not expensive'.
This is not very deep economic theory. Until the price rises a lot, there will be nothing competative, and there will be a plentiful supply of economist talking heads saying 'oil is not expensive'. IMO, saying that oil is not expensive is not useful a useful comment even if it is technically 'true'.
I'm doing much the same... do you have a link that shows current call options on oil?
For the sake of poops and giggles, here's my completely uneducated prediction. Crude supplies will be better than expected. Heating Oil will draw more than expected. WTI will drop initially but recover within an hour or two to where it is now (98.12)
Then Mexico has the best oil engineers in the bidness along with the best "FEMA" org in the World.
http://gcaptain.com/maritime/blog/gcaptain-tip-line-pemex-oil-rig-fire/
Someone go here and cut/paste the photo of KAB 101
burning. This is the "first" fire. Not the Second, BTW.
h/t rigzone and Leanan of course-8).
http://gcaptain.com/maritime/blog/gcaptain-tip-line-pemex-oil-rig-fire/
Arkansaw of Samuel L Clemens
No, I'm getting the reporting off the floor.
First. Joe Kernan is an idiot.
Talking to the FIMAT guy (who has been dragging his feet
BTW):
JK "Nothing has happened this year. Why are oil prices as high as they are."
FIMAT Guy "Nonplussed." Mouth Gaping.
Bloomberg gets it. Finally. 8:30 Sue Keenan at NYMEX.
I never did see the other Markets open on CNBC (commercials)or Bloomberg (Commercials as well after Keenan)
Bloomberg-"Panic Buying" at NYMEX
$98.31
I still say TRIPLE YERGIN by JAN. 30th!
(for those not dressed in Yergineze, that's $114)
Yes, that will be a Three-Yergin Night
Problem is, unlike 3 dogs on a 3 dog night, 3 Yergins won't keep ya very warm.
Yergin Nights - Thousands of neverending stories about oil.
Why is Dancing Dan the guy we love to hate?
He's just doing what the puppet masters tell him to do.
When we hit $105 it should be declared "Goldman Sachs Day".
Wow! Instanteous spike on CNBC!
Currently $150 call options for June oil.
Spindoc replies:
Okay kids. That's just crazy. Haven't we had enough fun seeing how high we can make the NYMEX go? The game is getting boring and it's time for investors to pull their money out of the NYMEX and stop playing "day trader".
So my table will be devoid of substantive discussion tomorrow. No PO, no Dow, no War, certainly no politics (despite being in NH).
I can't decide if this is common courtesy and politeness, or a classic symptom of Sleepwalking into the Future...I want to talk about the Meat!
At least this year, most of us probably have something to be thankful for. Not sure what next year's Thanksgiving is going to be like.
You might find the following entertaining, though it may strike many as all too real:
"Why should we give thanks that the future holds no cheap oil? There are several reasons, but the first is that cheap oil has fueled a 50-year-long party in the industrialized West that has left us with an unsustainable economy that is wrecking the planet. The recent awareness of global warming is beginning to put a damper on our out-of-control binge, but not fast enough to slow the heating of the planet. Rising oil prices will force a cutback in consumption. Rising oil prices will also chill the fantasy of endless growth and force us to confront the reality of planetary limits.
I have no crystal ball, nor do I claim to have well-developed psychic powers, but I'd be willing to bet almost anything that next Thanksgiving season will be dramatically different from this one. A dark curtain of despair has descended, along with $100 oil, on Wall Street, and the amount of debt that the American working and middle classes are trying to juggle is, as Stan Goff so eloquently stated in his article on my site, "Middle Class Angst", nothing less than "pre-volcanic."
http://carolynbaker.net/site/content/view/221
With the French/Germans leading the way:
"So if the average French citizen wants the unions to work longer hours or get fewer benefits a l' American, they won't succeed quietly if the unions slated for this fate refuse to go along. In America, if the President, insulated in Washington, DC, surrounded by vast bureaucratic marble tombs filled with government drones and then, another ring of slums filled with the very poor, can't be besieged very easily. But Paris, like London or Rome, is a vital city and the center of radicalism, union organizing and the media is right next to the government palaces and infrastructure.
So they are easily attacked. The unions, seeing the writing on the walls, seeing how the unions in the US have been ruthlessly destroyed from 37% of the working population to a miserable 7% and dropping fast, are digging in their heels just as the ones in Germany are doing. So these strikes are rapidly growing to be a General Strike. Sarkozy, fresh from his visit to the very anti-union Bush, simultaneously calling for war with Iran, a very unpopular move, and a bigger war on the unions, is probably going to end up in more trouble than De Gaulle ever was."
http://elainemeinelsupkis.typepad.com/money_matters/2007/11/french-strik...
http://www.fcnp.com/index.php?option=com_content&task=view&id=2123&Itemi...
Article from the Falls Church online press about the story in the Journal.
Have them read this.
Whats interesting is that in my opinion we are at the very beginning of a bidding war between OECD countries in fact at best it could be called a partial bidding war oil supplies are still doing reasonably well. These high prices are then being supported primarily by panic/must have buying by the poorer countries. This could explain to some extent why the spot market is so strong since some countries are being forced to by on the spot market to avert shortages. This makes sense since current oil prices are really not justified by OECD inventory reports therefore the "rest of the world" must be a important factor for most of them the economic horror of peak oil has already started.
Just imagine where prices will go once OECD oil supplies come under real strain.
From today's drumbeat: Your Petro-dollars at work http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20071120/OPINION02...
So what does everyone think? Granted, this is atrocious, but isn't there an element of "Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother's eye" at work here? It seems to me that a far more appropriate response than a sententious and ultimately hypocritical gum-beating and finger-wagging would be for all Americans who felt strongly about this issue to immediately cut their use of gasoline by 15-20%. Actions speak much louder than words -- especially from a country whose attorney general can't decide if water-boarding is torture.
Box Office Mojo: Let's talk about Three Days of the Condor. Why did you prominently feature the World Trade Center?
Sydney Pollack: I was looking for the logic of where the [Central Intelligence Agency (CIA)] might be [located]. I didn't want to have a building that said CIA on it because I didn't think that would exist. I figured they would want some kind of anonymity and that the best kind of anonymity are these two massive buildings with thousands of offices and you wouldn't know who's where. [Production Designer] Stephen Grimes was great—he had a nose for locations—and he found the Twin Towers. He found the alley, which was spooky and eerie and weird, for the [climactic] meeting in Three Days of the Condor.
Box Office Mojo: Did you shoot inside the Twin Towers?
Sydney Pollack: Yes. We shot the lobby, the second floor mezzanine lobby, the hallways, the elevators, down the hallway to the office. I loved them. I used to go [there] with my kids. My youngest daughter and her new husband came to visit me in New York and it was the first place I took them—the World Trade Center—up to the top. I loved those buildings. I used to occasionally use a helicopter to come in from [John F.] Kennedy [International Airport] or wherever and, coming in at sunset, looking at Manhattan, it was the view of the city—it made the composition of the shot—the skyline—perfect.
...Box Office Mojo: This was following the 1973 Arab oil embargo?
Sydney Pollack: Yes. But it was before the lines at the [gasoline stations]. We were prescient on this picture by accident, not by design. We were saying, let's find a crisis where these aren't a bunch of bad guys trying to make money for themselves; these are guys that honestly think they're saving America—that's why Cliff Robertson['s character] says: "what do you think [Americans are] going to want us to do when the cars don't start or when there's no food on the table? Are they going to want us to be moral or are they just going to want to get the oil? You know damn well what they're going to want. They're going to want the oil."
www.boxofficemojo.com/features/?id=2314&pagenum=2&p=.htm - 30k
I don't really understand that -- we all know it's about oil. You don't hear too much wailing and gnashing of teeth about Sierra Leone or the Maldives, for example-- despite the ongoing repression and corruption in those places, for example, there apparently there is nothing there that the government or the corporations want.
But since we know it's all about oil, perhaps we can move on and stop making movies and writing editorials. Perhaps we could engage in a little direct action. Such as personally decreasing the use of those things that inflame this behavior, without waiting for the "government" to do something. We have seen how effective the government is.
We can all live just fine with less -- at least, those of us who have access to the Oil Drum. And more than merely enduring relative privation, and cutting the thermostat down to 68 for example, we can be thankful for our abundance, and share some of it -- hopefully without feeling too smug about our correct moral choice.
Happy Thanksgiving, everyone!
Oooo....no.
Look up American defeats in battle.
You won't find them.
They're x'ed out of our collective memories.
No Korean "war" monument, case in point.
"We can all live just fine with less -- at least, those of us who have access to the Oil Drum. And more than merely enduring relative privation, and cutting the thermostat down to 68 for example, we can be thankful for our abundance, and share some of it -- hopefully without feeling too smug about our correct moral choice.
Happy Thanksgiving, everyone!"
We can't all live just fine with less, because
the US Wealth Distribution is completely skewed to the Top .1%.
And asking everyone to take equal hits will be a non starter.
"Suburbia is a cyborg. It is a techno-industrial grid within which its human residents are trapped, conformed, dependent units in a vast, entropic feedback loop. It is also - as a whole - dependent on an inconceivably extravagant and uninterrupted inflow of materials from across the globe. Without that uninterrupted inflow, Suburbia will convulse and perish."
"It is this extreme instrumentalism - the old joke about the dog having no use for anything it couldn't mate with, piss on, or eat - that leads directly to our loss of enchantment with nature... precisely because nature is free-of-charge, and therefore without value. Worthless, and often worse... dangerous... hence, suburban germophobia, hatred of "weeds," the association of nature with dangerous disorder."
Who knows what phase the Moon is in now?
Who knows what the record of the Patriots is?
http://carolynbaker.net/site/content/view/221
Get out of debt. Happy Turkey Day!
Arkansaw of Samuel L Clemens
mcgowanmc - yesterday someone accused me of being a talented writer. Right on here too, in fact they accused me of being "the most talented" which is meaningless since I am a high school drop out. Logically impossible to have talent in my case. However, there are some very talented writers on here actually, and you're one of the brightest stars.
Communicating is simply getting your point across, which I think you do as well as any here. It's just that your High School doesn't get to take the credit for it.
I know that my own writing suffers here because I'm trying to do too many things at once, and I get scattered.
Bob
I guess I'd like to learn to be a real writer, but that takes money for college classes (rather put that $$ if I could get it into learning machinist skills, and the local college has a good gunsmithing program) but then, well..... no one ever made any money stringing words together that I can see. Yeah yeah someone will mention Jack London or um, guy who does stories about military stuff .... wrote Hunt for Red October, yeah, there's an outside chance, a very outside one, but it's not real. You can't count on it like you can count on digging ditches. Even high-tech has proven to be a bubble, if you've ever blown bubbles you know there's a stage just before the longer-lived ones pop when they're just barely there. Islands of bubble-stuff dance around their surfaces and you wonder what's holding them together, some of the surface seems to be not there. Then they're gone. That's high tech.
But sloppin' out horse stables, that's the work around here. I could not even get a job at a tech writer writing manuals (which I'd be good at) because I don't have a college degree (or a high school one as has been mentioned). I want to try getting work at the local laundromat because well, I like laundromats, and I think I can fix some of the machines that are down, and don't mind mopping floors etc. Give me time to think too. So, any writing I do is gratis, for a reason besides money, rants on here and screeds against the bankster class and so on.
Writing is something that can definitely be self-taught. You don't need college.
And it might not be a bad choice for the post-carbon age.
Robert McKee is a successful screenwriter who wrote a book called Story: Substance, Structure, Style and The Principles of Screenwriting. He was born in 1941, so his mother lived through the Great Depression. She was the one who insisted that he become a writer. She thought it was the most secure job there was, because people will always want entertainment.
Um, what?
There seems to be so much writing these days that its value has gone down. Now, someone to write restaurant menus that don't have too many mis-spellings, or write stuff on how to do stuff. sure.
But shovelin' horse sh!t is no kidding, good money around here. So might be working at the laundromat if I can get it. Street musician is the eternal Good Job, which is why they never teach it in any school. So is drawing people well and quick, doing caricatures.
Writing is pretty futile though, it's something you do because you just have to mouth off when you really ought to keep quiet. I could think about it but I'd sure not count on it.
No, McKee's mother specifically wanted him to get into entertainment. (And it's true - even during the Great Depression, people went to the movies.) McKee claims that what's important is being able to tell a story, not details like spelling.
Also note that writing is something you can pursue "on the side." It used to be that writers, especially screenwriters, spent years doing mundane jobs as well as writing. They worked as cops, insurance salesmen, soldiers, waiters, etc. IMO, that lent a lot of depth to their writing. A lot of screen writers today are kids fresh out of college, and it shows. They have some fresh ideas, but their lack of experience outside the world of middle class suburbia is often glaring.
"They worked as cops, insurance salesmen, soldiers, waiters, etc. IMO, that lent a lot of depth to their writing."
Hmm...story about a formerly middle class guy, driving his shiny new Prius around when the economy starts to tank, his business goes in the crapper, he gives the car to the repo people "Take it, see if I care!" and moves to the country where he learns to farm and meets a fair-haired maiden...
(have to get a love interest in there somewhere, right?)
Art very seldom pays.
Technical writing/communications pays.
No defined career path either of above.
All university writing programs simple:
Write daily
Allow peers/profs to read your work
Submit to criticism (critique others)
Complete book length work
Submit book for formal critique
Put all student work in deep storage
Start being a writer
All the above can be done outside university
It will be slower & indirect - so what
Your are critiqued here on content not style
Your style is appreciated & buys tolerance
Do what you want, you should know you're good
On the flip side there is the famous Flannery O'Connor quote:
When asked if she thought universities were stifling writers she replied, "I don't think they are stifling enough of them!"
Someone once told me that talent is not taught but cultured.
What good would cutting gasoline use by 20% be?
Instead paying $100 for gasoline in some amount of time... sure, a person could just spend $80 on gas. Maybe they would car pool to work or something... but that wouldn't change the amount that Saudi Arabia sells, or the world market buys.
Think about it, what would "Mr. 20%" do with that $20 he saved at the pump?
If I recall correctly, a typical American spends 101% of what they earn in a year. Mr. 20% would end up buying something with his $20 savings. Perhaps he'd splurge on an extra Pizza Hut meal for his family.
Where does that $20 end up?
Exactly the same spot as it would have if he bought the gasoline in the first place.
It is a world economy, a big huge global economy. Money spent equals energy consumed. It doesn't matter how the money is spent, where it is spent, or why it is spent. If you spend money, energy is consumed at the energy/money ratio (use the world GDP and world energy production to calculate that ratio, if you wish).
So, what is Mr. 20% to do?
Well, he certainly can not spend the $20... because that will just consume the same amout of energy.
He can't put it in the bank... because $20 in savings equals up to $200 in "created money" via loans. Whoa, wrong choice their buddy.
He could hold on to it for a while, maybe in his piggy bank... but he wants to spend 101%, so I'm not sure how long its going to stay in that cute little fellow.
He could tear up, burn, or otherwise destroy it... but I'm not so sure that $20 destroyed would have any impact on the global economy, particularly when the banks and Fed can create money to match "demand".
What Mr. 20% needs to do is to pray... that the global economy slows down. Less global money moving around. Slower "velocity of money". Less credit money... a slowdown, akin to the ones following the previous oil crunches... Yes, that would probably do it. Unfortunately, I don't think Mr. 20% can do it alone... Then again, the way things are going, he can just sit back and relax, because this recession is already well underway.
Michigan
What is it with this "created money" bugaboo? As if there is any other kind!!
If everybody deposited their energy savings, the economy would shrink (good!) and more money would be available for worthy investment.
Don't forget, there is a credit crunch on and it's not going away. Credit crunch == bankers are becoming more careful.
If you are truly tied up in a moral knot worrying about how the bank will lend your money, why not seek out a worthy investment yourself and eliminate the bank as the middle man?
But for myself, I can't for the life of me figure out why fractional reserve banking gives people the willies.
I suppose I mean "credit money" versus "currency", although I get your point that it is all "fiat money". Gold standard anyone? I think Ron Paul would like your vote. :-)
I don't think that everyone putting more money in the bank would slow the economy... then again, that IS what the folks in Japan did, isn't it? Hmm... something to think about...
No matter how the money is spent, the same energy will be consumed... but it does certainly make a difference what a person spends it on, as far as being prepared for the uncertainties of the future.
I could spend my $$$ on a nice big 1080P HDTV... or I could spend it on putting in a very nice garden. The energy will still be consumed, but at least I'm one step further along the long road to sustainability.
If you watch business TV you'll see analysts worrying every day about the populace cutting back on their spending. Off the top of my head, 70% of the US economy is consumer spending.
This is one reason why recessions tend to be sharp. Suddenly everybody says "OMG" and starts to save when they see other folks losing their jobs and having trouble getting new ones.
The energy will still be consumed...
There is truth in this... but as you mentioned, it really does matter how the energy is used because peak oil mitigation will involve making changes to our lives that cost money and will involve investing money to build more sustainable infrastructure for a post-peak world.
Yup. I came across an article the other day that said we'd be okay even if consumers stopped spending...because we no longer manufacture anything. So it would be China's economy that would be hurt by a consumer slowdown, not ours. o_O
The idea of consumers stopping spending... i.e. not borrowing as much... less use of credit cards... less home equity loans... less new mortgages... it does look like that is happening... but what happens when folks realize that 11% or higher inflation is making future purchases more expensive? Will people keep cutting back on credit purchases, or will they step it up?
China... yes, china. It is odd to think of how much energy the USA consumes (25% of total) when we really probably consume even more. After all, China's consumption is greatly for the benefit of the USA. I wonder, if the USA consumes 25% of the energy, how much do we use when we add up all the energy consumed for our imported goods and services? Perhaps this can be calculated from US GDP vs. World GDP???
We may not manufacture all that much, but we still do all the distribution and retailing... so what is "bad" for China is also "bad" for us.
michigan,
You make a very important point here, how much energy and CO2 is embodied in our imports. In MN we are supposed to reduce CO2 by 15% by 2015 compared to 2005 levels, a greenhouse gas study has been done showing 1990 and 2005 levels with projections for 2020 and the source of the greenhouse gases. I made the statement when I first read the report that nowhere are greenhouse gases from imports considered with the exception of imported energy, electricity and fossil fuels. Imports from China are hiding U.S. pollution and must be accounted for.
Minnesotta, eh? You have WCCO-TV, right? Very good news articles on peak oil and energy. I wish our local media was as on top of the issue...
Yes, all imports and exports must be considered.
I suspect that the only way Minnesotta could reduce their contribution to CO2 by 15% would be for the Gross Spending of Minnesotta to be 15% less (using inflation adjusted money).
Of course, people are born everyday all over the world, so even if Minnesotta reduced by 15%, will someone else, China perhaps, make up for it with their own increased consumption?
I believe this is referred to as "The Tragedy of the Commons".
Here is a slightly bigger issue...
How much of the fossil fuels are we going to burn? Are we going to burn up 100% of what we can get at? Or, can we stop ourselves (as a species) at 90%, or 80%, or 70%? What do we have to do collectively to be able to restrict consumption to that target? Is it even possible for our species to restrict its energy use?
A Minnesotan here too! I agree 15% drop CO2 in basically means to me a 15% decrease in gross spending. But for the indefinite future, it seems there's plenty of money to throw away at debt reduction.
The curious thing to me is why everyone is willing to work so hard, while a little bit better money management would mean wasting less money on senseless consumption, less money on debt interest, and waste less time sitting in traffic too!
So on pure laziness, I'd imagine it is better to work less, earn less, spend less, and be happy! And for those who are cursed by too much money, there's plenty of good investing to reduce the need for future consumption!
Minnesota doesn't have nothin' in fossil fuels, and we burn a lot of coal for electricity, natural gas for heat, and oil for transportation. I don't see how our use can't just keep increasing, especially considering fossil fuels used in trade.
I don't see anything that can change this EXCEPT higher prices, but as you point out - if we just 'outsource' our consumption to places that have cheaper labor and energy we're not really solving anything.
Lots to be thankful for, but I don't see our success as an entitlement. Does it take a critical mass of fear to lead change, or do we believe the economists - that a critical mass of fat consumers solves all problems?
We have nothing in fossil fuels but we do have a lot of wind, especially in St. Paul when the legislature is in session.
:-)
But seriously, I wonder how much of the retail price of an average Chinese good actually goes to China?
I'd guess considerably less than 1/3. So what are they thinking?? But even if it really was all going to China, if it's not spent this X-mas, some foreigner somewhere will eventually not spend it back into the US!
In the meantime, I guess through sheer force of mind over matter the Wile E. Coyote moment lasts a little longer....
I know my own spending is really down to 10% of what it was out in Silly-Con Valley.
I was driving on average 50 miles a day which means a gallon of gas which means $150 or more a month, I'll eat my hat if I'm spending $15 a month worth of gas now. Rent used to be over a thousand bucks, now rent = some chores. Car insurance was $900 a year, bike insurance now is $120 a year. $150 a month Food Stamps is proving to be very adequate.
Xmas shopping list is very short but if I can't earn the money to buy a present with, I'll make something. Paints'n'paper.
Physically and mentally I am MUCH better off living at the bottom of society than striving for the ever-receding goal of living anywhere near the top.
Sounds like you are living much closer to sustainability than many of us.
I've thought about quitting my job and living off savings for a while, or even getting a very low paid job, just to have enough money to keep afloat. There are two complications...
1. If I quit, they'll just hire someone that is currently without a job. (I actually know who the replacement would be and that she hasn't been able to find a full time job). So, if you added up my spending plus her spending, it will be more or less the same before I quit and after I quit. We'd just be switching hats, so to speak.
2. I like having health insurance. I like that my spouse and child have health insurance. If we had free health care in this country, I'd probably would stop working, and focus all my time on moving my family and community towards sustainability.
My dream is to own an annualarized passive solar home, that generates its own electricity, on a nice piece of land, where I can grow an abundance of food for my family. At the moment, I'm a long way from my dream.
Michigan - it's only been for the last 4 months so far, and I have health ins. as part of the Welfare package - in fact you can't pick and choose, you apply and then they assign you what benefits they figure you need. I was encouraged by the friend I'm staying with to apply, since a mutual friend of ours has used it. So, there I am.
No one stepping into my old shoes because high tech is dying.
A big hero of mine is a fellow named Ran Prieur, you should go to his site and read his every word. But there are others too - the guy who wrote a book called Radical Simplicity (it has a feather on the cover) believes in living on too little to tax, and staying within his global "fair share" among all humans on the planet. It's worth reading too.
In my own case I'm a failed small business owner. I will have to declare bankruptcy, and am hoping to hold off doing that for a couple of years so my IRS debt will age enough to be taken care of as part of the chapter 7 procedure. Meanwhile, I'm living very cheaply. If I had more experience with horses I'd find lots of odd-job type work around here, feeding, cleaning out stalls, etc., which people are willing to pay well for. There's other odd work around here, lots of $7 - $10 an hour jobs which means it's the same as California as far as pay goes. I'm hoping to develop a craft or a skill that can make me some money though. I can wield a mop with the best of 'em, but I'd rather learn to make really good guitar picks or draw good caricatures or something, and until I get more familiar with the garnishment laws around here, I actually don't want to earn very much - it just makes me a target for plunder.
And this just occurs to me now - as the Depression deepens and the Empire gets to the snarling and spitting stage, one thing we may see is a huge increase in garnishment of wages for the most idiotic reasons. Not reasonable, rational reasons like my own situation, owning the CC and car loan co's a buttload of money, but stupid reasons like voting for the wrong guy, registering in the wrong party, weird Byzantine rationalities involving gas usage or National Service or God-knows-what. So we're not all out of the woods on this issue even those very few of us with no debt. Thus, living very cheaply, "below the radar" should be a subject of intense interest for all of us.
1) is just a weird rationalization
2) if you can, get off the health insurance treadmill. I've never used a hospital in 36 years. I want to keep it that way. I've had issues, including back problems so bad I laid on the floor for two weeks. I went to a chiropractor, paid out of pocket despite having insurance (wasn't covered), and they fixed me right up. I also got Lyme disease so bad that I couldn't walk. Fixed it with oxygen and colloidal silver for a grand total of $400, and I still have the oxygen and colloidal silver machines. I had a friend with heart issues -- they were going to put him on the kind of drugs that you never get off of. I gave him $0.15 of potassium chloride and he was healed in a week. (He had a potassium deficiency, a common problem which is never identified by the so-called medical experts.)
Modern medicine is nothing but a scam. You are actually, genuinely better off diagnosing and treating yourself for everything except for physical trauma (the proverbial motorcycle accident) and infectious disease. Disaster health insurance -- with a $5000 deductible for example -- is not expensive, about $150 a month for a couple.
If Mr.20% was motivated to make a positive difference with the saved money, he would invest it in a renewable energy company.
This was in yesterday's Financial Post
Ontario blows it
Dealing with erratic wind power brings huge costs
The provincial government is paying 11c/kWh which is twice what it gets from consumers.
Thus wind power cannot be scaled up. Could these end up being expensive white elephants?
Richard Wakefield
London Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Ontario is largely old hydro & old nuke. The near term new capacity will be natural gas, and 11c/kWh is certainly competitive with that.
Winter is the other Ontario peak demand period, and hydro is lowest then and wind highest (if ON in comparable to US wind).
Hydro can be turned up & down FAR faster than wind so grid stability (if ONHydro has a good network of transmission) is a non-issue.
So to answer your question, Ontario wind projects will NOT end up being expensive white elephants.
Alan
Is this the same Tom Adams, Executive Director of Energy Probe? He seems to have had a turnaround - previously pro-wind, anti-nuclear:
Now he is saying wind power has been a disaster. Ok, fair enough, people can change their opinion. But it makes it very difficult for Energy Probe to claim :
I don't think this guys opinion is worth 2c.
Ontario's large wind farms completing one year of service generated on average 29% of what they could have under ideal conditions.
Wind Turbines are usually very efficient with regard to Energy Out/Energy In
See http://www.bwea.com/ref/faq.html#efficient
- However this reads as if they are talking about 'load factor' - i.e. percentage of the year that the wind blows sufficiently.
To have a wind farm on 29% is actually quite good. And 'intermittent' generation from wind is not as big an issue as is sometimes potrayed.
http://www.bwea.com/ref/stop.html
N.B. Nuclear has it's own form of intermittency too..
http://www.iht.com/articles/ap/2007/10/22/business/EU-FIN-Britain-Britis...
Did you read the whole thing? It said in the summer the BEST output was 19%, but as low as 13%. It also said there were many dead calm days when there was no output at all. It also said that hourly fluctations were causing output problems for the whole grid. It also said the best winter output was at night when the demand was not required.
You can't just use an average or the occational peak output and say wind turbines are good investments. It's the details, as always, that must be looked at. With these numbers they sound very useless.
Bottom line is wind power is not universally applyable to everywhere. Certainly not here when you take into account the cost of construction at $1.5M each, and the price the province has to pay for the power and looses when it sells it. No one it going to accept a double increase in their electrical bills. It will spark protests.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Ontario is not Manitoba or Quebec. It does not have enough hydro potential to expand that source significantly. Great if you can pull a few more MW out, but most of the new electricity will not be the "free electricity" that you are used to. Today's 5c/kWh is a mix of <1c/kWh old large hydro, some slightly pricer smaller hydro (say 1.5c/kWh), some old nuke (say 4c/kWh) and more expensive coal & NG.
Perhaps Ontario needs a few more transmission lines, but I cannot see wind being a significant issue with your large variable hydro resources (AFAIK, Niagara is fixed output. Take the water as it comes, when it comes, for excess water goes over the falls immediately instead of staying in storage).
Match variable hydro with wind. When wind blows, cut back on hydro. When wind slows, speed up variable hydro. And if you run short on variable hydro, use NG.
Going forward, winter demand should grow faster than summer (for the reasons noted). Wind seems a better option than NG for a variety of reasons (new build nuke is a decade away).
Adding more wind, even at 11c/kWh, will not double your bills. It will be diluted by your cheap power sources. The same is also true of NG.
If Ontario could live on what Niagara produces, your "fuel cost" would be less than 1c/kWh. Pay a flat fee to be hooked up to the grid and little more. But you cannot conserve to that point.
Best Hopes for a Hydro/Nuke/Wind Grid in Ontario,
Alan
But that doesn't make any sence. Why would you cut back on a very cheep source of continous output to allow an much more expensive sporatic source to produce? You are favoring an expenisve intermitant renweable resource, over a reliable cheep renewable resource. How is that logical? Or is it that wind power is so sexy and in vogue?
NG for e- output is rediculous option when we are in NG decline and need it to heat our homes.
BTW, there has been a number of other sites in Ontario that have been marked as potential hydroelectric power. In fact, a number of them used to work but where shut down when Ontario Hydro took control many decades ago. They are now being considered to be reopened. Local e- power.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Let me explain. Water comes down a river and is held back at a dam (i.e I explicitly did not include Niagara).
Within limits, that water can let through the dam whenever the operator wants it to. Right now, this evening, tomorrow, next week or even next month (for most dams).
(Overall, Canadian hydro generates about 60% of the time, US Hydro about 50%, we just get to chose when they are idle and when not). So your dams sit idle, generating nothing, 40% of the time. The beauty is that you can chose which 40%.
You can chose to idle the hydroelectric plants when there is plenty of wind blowing or when there is little demand (fine fall night @ 3 AM). Think of wind as "Hydro Extender" (like Hamburger Helper). It makes the Hydro go longer.
Due to that white stuff problem you have up there, less water flows down the rivers in winter (just like less wind blows in summer), Given the growing electrical demand for heating (ground source heat pumps) that is precisely when you need "Hydro Extender".
I am all for bringing back the small hydro plants and I won stocks in three Canadian companies that do precisely that. Canadian Hydro Development, Great Lakes Hydro & Innergex.
But none of the three has talked about the vast unused potential of Ontario, just waiting for redevelopment. They do add a small dam every year of two.
If Ontario can phase out coal plants AND cope with increased electrical demand (see heat pumps) with rehabilitated nukes and small dams, FINE !
I do not think that you can. New nukes are a decade away, so your other choices are wind or natural gas. Natural gas will not be significantly cheaper and will likely be more expensive than wind, it is needed for home heating and it emits Greenhouse Gases. None the less, Ontario's choices will likely be wind or NG.
One advantage NG has is that in a dry year you can burn NG to make electricity, but in a wet year you can let the Albertans sell it to the USA. With wind, you send electricity south in a wet year.
If Ontario builds too much wind, you can sell the surplus south, most likely at a profit.
I have not done a comprehensive review of Ontario's electrical needs, but I suspect that in an ideal mix of hydro, nuke and wind, less than 10% should come from wind. You would want enough wind to make up the hydro winter shortfall.
Best Hopes for a Non Greenhouse Gas mix,
Alan
So let me see if I have your logic right.
We let up on clean cheep electrical output from hydro to allow for a more unreliable expensive output from wind (including building new ones which will add more CO2 to the atmosphere). The water will go over the falls whether we use it or not. So what we don't use cannot be "held back", it's totally wasted potential. (at night the falls is almost shut down as they divert water to the holding lakes, which is then used during the day for output. Every night that lake is topped up, once full, the falls water is let loose again. So "holding back" that lake in favor of wind makes no sense.)
So your reasoning is not logical. Seems the romance of wind is more important that the logic of what it can actualy do.
With wind so sporatic, to the point of disrupting the entire system due to its swings, and its output at a mere 13-19% it makes no sence at all to build more. How many would be needed to make up 10% of total requirements? How many billions will be wasted? How long to build them? (The 20 or so that went up in Shelbourne took 2 years to build). It's very likley that a new nuke plant (which is in the works anyway) would be up and running sooner with more output. (and less CO2 output to contruct? The Wind Turbines come from Holand and TRUCKED from Halifax)
Just like Ballard Power giving up on fuel cells, I think it will just be a matter of time when the realization is that wind power just cannot work as advertised. They realized that now in Quebec as the province sold off their entire windfarm to Canadian Hydro Inc. They are about to get a rude awakening. Since that province owns all the other e- output why would they sell off that? Because it's a big money loser and its output is not what was expected.
BTW, within 2 years 2-3 Bruce reactors will be back on line, plus one at Pickering. More than enough power. Getting off coal completely is a big mistake that will be regretted down the line. My prediction is they will have to build new ones because wind and solar will be flops.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
So let me see if I have your logic right
WRONG !
You seem not to comprehend what I am saying.
Alan
The article you linked stated Intermittency [of wind] creates a major challenge for grid reliability
Is obviously terribly wrong.
Hydro generation in Ontario is now 4,745 MW, up from ~1,000 MW this morning. Hydro is quickly dispatched and they clearly have the capacity to swing production quickly & dramatically.
Zero mention was made in the article of Ontario's massive, dispatchable hydropower, the perfect match to wind. A clear sign of bias and deceit on their part.
Ontario Power Generation had this on their website.
Outside of the special case of Sir Adam Beck/Niagara (Which seems to be less than half of OPGs generation) and some small run-of-river plants, the bulk of OPGs hydro can be dispatched at will. So much water comes down river, it is stored behind a dam till needed.
Ontario has a growing need for winter generation due to more heat pumps replacing oil and NG heat. A stereotypical Ontario River system gets ZERO new water when there is snow on the ground. OPG has only so much water stored behind the dam and must parcel this out as needed.
A hypothetical. A slightly drier than average year (not a major drought, just below average, water typically varies 30% year to year, wind only 12 to 15% year to year). No mid winter thaw to release solid water into the rivers.
All nuke plants going 100% 24/7. Niagara flow down due to dry year and no thaw reduces water into Great Lakes. Say 750 MW all of February. With 1,500 MW of wind, OPG can conserve their water through a late January blizzard. If wind annual average is 29% and 13% to 19% in summer, this implies about 40% all winter long. *LOTS* of water saved in those 25 river systems.
Without wind, OPG could drain their reservoirs dry and have to start burning natural gas during that January Blizzard and continue till the spring thaw. (Or burn coal if that plant is still available).
The actual situation is more complex but I tried to simplify it.
*IF* Ontario can meet 100% of it's electrical needs in a dry year with just nuclear and hydro, so be it. The only reason to add wind would be for security and for exports to the Americans. My first look seems to be that Ontario cannot supply 100% of their growing demand from nuke & hydro without building a couple of new nukes in addition to restarting the old ones.
best Hopes for a Hydro/Nuke/Wind Grid,
Alan
Hydro just went to 4,799 MW
That document said the same thing. That intermittency was a "challenge". Something happened in Germany, should try to find out what it was.
I still don't get your notion of being "held back" behind dams. That's not allowed in Ontario. Once a dam has it's fill it must be allowed to release the rest. So any unused water for power just flows away. Even the artificial lakes at Niagara work the same way. Once the lake is filled, the diverters are raised the water goes over the falls.
So nothing in hydro is "saved" for later, not even in winter.
Really. Which ones? The whole idea of the second tunnel is to make sure that never happens.
There used to be a NG generation station in Markham, went by it every day to work. It was a temporary stop gap waiting for Nuke reactors to come on line. It's gone now. Wind output is only a VERY small fraction (when it can), so there is no way it can suppliment huge suppliers. Besides, what happens when a hot high pressure system rests over Ontario at 33C and everyone's AC units are blasting, the system is near brownouts but there is no wind? Then how useful are wind turbines? How will the public react when brown outs start and wind turbines are sitting there idle? What level of support will there be for new wind turbines after that happens? And it will happen.
Richard Wakefield
London, Ont.
The more complex society becomes, the more myth and fantasy people invent to explain it.
I still don't get your notion of being "held back" behind dams. That's not allowed in Ontario. Once a dam has it's fill it must be allowed to release the rest. So any unused water for power just flows away
It is clear that you do not understand operations of hydropower. I am unsure if you have an "idea fixe" (you want coal because it will save you a couple of dollars/month) and will refuse to learn, or it is my fault and I have not been clear enough.
Let me try once more.
Most of Ontario's hydropower does NOT come from Sir Adam Beck/Niagara Falls but from the other 24 river systems.
A typical river system has a series of dams on it, lets say 5 dams, A B C D E.
The maximum power is extracted from a given m3 of water when the dam is full, so OPG tries to keep most of the reservoirs full. But it cannot keep all of them full all of the time.
Every day, even in goos fairly wet weather, OPG will run the generators full out during peak demand (about 5 to 6 PM this time of year would be my guess) and drain the reservoirs down by 3 cm to 50 cm. Overnight they would refill and be ready for more generation the next morning. At 7 AM, one of two generators may be turned on for most of the dams. etc. Hydro goes up and down to fill the gap between nuke power and demand as needed. I do not know of coal dispatch at OPG.
During the winter and during a dry period, OPG will drain the reservoir behind A first, then B, then C, D and finally E until some fresh water (melted snow or rain) comes into the reservoirs.
The actual scheduling is MUCH more complex than this (OPG surely has spent tens of millions just on dispatch planning & control) but this gives you a general idea. But you can (hopefully) see that your statement So nothing in hydro is "saved" for later, not even in winter is completely wrong.
The Third Niagara Tunnel will have no effect during the winter other than reduced frictional losses. The flow out of the Great Lakes ALWAYS goes down in the winter (frozen water does not flow into the Great Lakes, so less water flows out). The Third Niagara tunnel is to catch more of the Peak Flow out of the Great Lakes,. Peak is almost always Spring, some weeks/months after the thaw and continues at good levels in a typical Summer & Fall.
Per OPG, 60% of the time Sir Adam Beck cannot take all of the water available today (they sometimes rent a turbine from the American side to use Canadian water in and ship the electricity generated back to Ontario, but only when New York has a spare turbine available). After spending $900 million on the 3rd Niagara Tunnel & supporting, that 60% will be reduced to 15% of the time.
Increased use of geothermal heat pumps will reduce summer a/c demand for two related reasons. Ground Loop heat pumps are simply more efficient (less electricity to make the same cold) and ground loop heat pumps do not suffer the same loss of efficiency when it gets very hot outside as do regular air source air conditioners.
The new Toronto downtown cooling with cold lake water will also reduce summer electrical demand some.
As I stated before, Ontario should see more winter demand increase than summer. And winter is hydro's weak time (frozen water does not flow into rivers & hydroelectric turbines) and wind's best time.
If Ontario can keep it's reservoirs full, and improve it's grid, I suspect that they can keep the lights on during a summer heat wave with just hydro & nuke. Wind can help keep those reservoirs full before the high pressure system comes in. (This typically means little rain as well).
Alan
Posted in todays drumbeat. Better take a read Alan.
“The environmental benefits of wind are not as great as its champions claim,” said Euan C. Blauvelt, research director of ABS Energy Research, an independent market research firm in London. “You’ve still got to have backup sources of power, like coal-fired plants.”
http://www.nytimes.com/2007/11/23/business/23wind.html?_r=4&adxnnl=1&ore...
Richard Wakefield
London, Ont.
The more complex society becomes, the more myth and fantasy people invent to explain it.
Ontario, due to it's large hydro resource, does not need to keep coal as standby if you build enough wind. Cut them up and sell the old coal plants for scrap.
Your idle hydropower plants are more than adequate for the proposed 12% wind generation share of total generation.
Note below on the % of average idle time for Canadian hydropower.
Alan
Sorry Alan, but that's not what these experts just said in the quote. There is no way Ontario will get to 12% output with wind. The Star today had an article noting that 110 wind turbines will be finished by next fall near the Bruce Nuke plant. Cost? $400 million. Output? Claimed at 160Mw, but at 20% that will be about 40MW. How much will it cost to build 12% output for Ontario's needs? BILLIONS!! Never happen.
Richard Wakefield
London, Ont.
The more complex society becomes, the more myth and fantasy people invent to explain it.
Several points.
You, quite understandably, conflate two separate measurements of utility planning.
One metric is energy or power. Your anti-wind FP article quoted Ontario wind as 29% power/nameplate. That is the annual average power from a wind turbine is 29% of it's nameplate. So please use 29% and not 20% when dissing wind with your neighbors. And 160 MW of wind should produce 160 x (29 or 32%) x 24 x 365.25 MWh per year. About as much energy as 51 MW of new nuke power (nuke is not 100% either although OPG is a world leader in nuke reliability).
Since the Financial Post source is a technically illiterate or deliberately biased piece, I suspect that future Ontario wind turbines will be closer to the new USA 32% capacity factor rather than 29%.
The other, more obscure metric, is a measure of firm capacity. Utilities like to have a 10% to 15% surplus over peak demand that they can count on as needed and this is a weakness of wind. This is NOT a measure of the actual energy produced !
A given hydropower plant may have a capacity factor of 40%, but a firm capacity of either 100% or 90% of nameplate.
A coal fired plant in mothballs for a "33 C High Pressure system stalled over Ontario" may generate 0 MWh in a given year but have an 80% capacity factor (downrated since it is in mothballs) (And yes, I withdraw my earlier statement and think some coal plants should be mothballed or seasonally idled (run only in summer) and not scrapped).
All coal fired and nukes are generally calculated at 90% firm capacity of nameplate in the USA (at least in Texas where I know the details best) (Canadians may do their sums slightly differently).
Wind at 20%# of nameplate seems to be based on their average summer generation. If Ontario moves to a winter peak (see ground loop heat pumps, cold water cooling in Toronto), that figure should more than double.
Texas, which almost zero hydro, allocates a capacity factor of 10% to 12% of nameplate to wind. But their windfarms are producing in the 33% range and they are adding over 1,000 MW/year. Wind is cheaper than natural gas !
This means that Texas will need to keep a large # of cold & idle NG plants around to balance off their new and rapidly growing wind power plants.
All OPG choices cost BILLIONS ! Just the way it is. New nukes are billions, 3rd Niagara Tunnel is $900 million (a bargain BTW), redoing old hydropower plants is pricey. NG plants are cheap but their fuel is expensive.
Alan
# If a 2,000 MW coal or nuclear plant is given a firm capacity rating of 90%, this equals a 10 GW wind farm with a firm summer capacity of 18%. But if OPG uses a slightly different definition of firm capacity, and counts coal & nuke at 100% (and says that they want a 20% excess of firm capacity over peak vs. 10%) it all adds up the same.
"...but that's not what these experts just said in the quote
They said
Note the word "like". Coal need not be the back-up source. It can be natural gas (Texas) or Hydro (Denmark, Sweden, New Zealand, where 30% of the power can come from wind without adjustment because half their power is hydro).
My "back-of-the-envelope" calcs show that if OPG built three or four #new nukes and went ahead with planned hydro upgrades, they could handle 12% of the annual total MWh from wind and not have to burn coal most years. In the driest years, OPG may need to reactivate some coal plants.
Hydro would be the "back-up sources of power". Wind is very variably on a daily basis, but quite steady on an annual and even seasonal basis (10% to 15% annual variance for wind vs. 30% for hydro). OPG has good confidence that, in the month of November, it would get XXXXX MWh from wind, but would be unsure as to the daily timing of those XXXXX MWh, so it adjusts hydro generation as needed, just as it adjusts hydro every few minutes to follow changes in demand.
# Possibly five new nukes with demand growth.
Alan
Getting off coal completely is a big mistake
The apparent heart of your anti-wind bias. Better to burn coal if it reduces my bill by $3.18.
As much of the USA is no better, so be it.
Alan
I'm not anti-wind. Never said I was. Please don't put words in my mouth.
I'm against ANY technological solution that does not work, or works poorly, or is illogical. If there are places where wind works, then by all means put them up. The issue is at what LEVEL of wind is considered a viable resource? Why does you opinion that 20% is good trump my opinion that 20% is bad? What physcial evidence makes your opinion superior? It's a judgement call.
Coal works, there is technology to make it cleaner. The implementation of which is much cheeper than building wind turbines compared to the output we get from them.
Richard Wakefield
London, Ont.
The more complex society becomes, the more myth and fantasy people invent to explain it.
You want coal because it can save you a dollar or two per month on your electrical bill, Global Warming be Dammed !
That is your position.
You have stated that "not one dime" should be spent to prevent Global Warming on another thread.
Well, using wind instead of coal will likely add several dozen dimes to your monthly electrical bill. I admit it.
Wind will be cheaper than natural gas in the future though IMHO.
And Canada, unlike the USA, signed Kyoto, so you are stuck with getting rid of coal. Wind is your most economic and cleanest option.
Alan
Alan, please don't tell me what my position is. You are creating a straw man argument of my position so you can try to make my ligitimate challenges look foolish.
In the long run it is those who dogmatically support a flawed system that will look foolish once the flaws become appearent. Those promoting the Hydrogen Economy are just beginning to feel that.
Look, I've spent the last couple days asking people if they bought a product that only produce 20% output would they be happy with it. Everyone has said obviously not. When I then explain that wind turbines only produce 20% output that are taken aback, did not realize, and now don't think they are such a good thing. I didn't prompt them, just told them what the report said.
Yes, and why? Because Oil depletion is the bigger threat. And oil depletion will curb the ability to funnel resources into climate change. That's why. Even if I agreed 100% with AGW, I would still say the same thing. It's the logic of the situation. Governments have spent $50 BILLION over the past 20 years on AGW and it has done nothing to reverse CO2 emissions. That $50billion could have been used to rebuild railways, or be used to switch homes to GSHPs, prepare communities to live locally, build greenhouses so we can grow food all year, etc...
It's not just that. Since every sector of the economy is dependant on e- power then when the price goes up, so does the cost of running business and the rest of the economy. So prices go up. So does taxes. Hospitals use a huge amount of e-, so when that goes up, they have to pay more, and my taxes goes up to pay for that.
Rip it up. There is no way Canada can get to 6% below 1990 emissions since during that time our emissions went up 30% under the very government (Liberals) that ratified it. So Kyoto for Canada is a worthless piece of paper. Besides, there's other provinces that won't give up their coal at all as it is their PRIMARY source of power.
Richard Wakefield
London, Ont.
The more complex society becomes, the more myth and fantasy people invent to explain it.
So a Canadian signature on a treaty is worthless ?
And Ontario cannot POSSIBLY do more than another province ?
As to your claim that no one else is giving up coal, let me quote from memory.
British Columbia - New small hydro & some wind
Alberta - More wind
Sask. - More wind, may buy hydro from Manitoba
Manitoba - Hydro and looking to sell more
Ontario -8 More wind, more nuke, more hydro
Quebec - Massive exporter of hydro
Prince Edward Island - About to become a net exporter of wind power
New Brunswick - I do not know
Nova Scotia - More wind
Newfoundland - More hydro
Other than New Brunswick, your fellow Canadians seem to be moving in the right direction.
If your argument is that coal fired electricity is cheaper, that is conceded. Not as much cheaper as you may think, but still cheaper.
You have said that you do not value reduced GHG and other coal pollution. I do.
I see GW as the larger threat but Peak Oil as the more immediate one.
I would be VERY pleased to see Ontario reactivate all it's mothballed nukes, life extend them, and build more. I would like Ontario to squeeze every kWh that it can out of it's hydro resources. And I would like Ontario to start building new wind turbines at a steady and growing rate. 12% of total annual MWh from wind is very doable and IMO desirable.
The cost uptick will be modest,
Alan
"No one it going to accept a double increase in their electrical bills. It will spark protests."
Of course, investing in admittedly expensive Alternatives is also a hedge against the (pretty likely) arrival of a day when an .11 KWH is actually a bargain.
College wasn't cheap, either, and I can barely make a conclusive case that it has paid me back, but I did it with the trust that it was an investment proven by so many others, that I would also benefit from it, and in a variety of probably intangible ways.
Best Hopes for clean and simple power sources.
Bob
"No one it going to accept a double increase in their electrical bills. It will spark protests."
Suppose, however, that a population goes without electricity for several months, as has happened in Baghdad, and then a new electric supply is created, but at a significantly higher price. Some will be willing to pay.
But not the poor of course. I find it highly contradictory that we have the NDP socialists in this province calling for such things as wind turbines, but at the same time they cry the loudest when electrical prices go up! They claim the poor can't afford the high prices. You can't have it both ways.
The cost to produce e- in the province should be cheep, we have the hydro production which is 1/5 what they charge, and nuke plants that will last decades more. What the problem is is population growth, fueled by high rates of immigration, that swamps the system and forces the government to import very expensive power from the US.
Example, the solar farm planned for Sarnia will provide, they claim, power for 7,000 homes. Do the math. At 250,000 new immigrants in Canada a year, half of which come to Ontario, that solar farm will be swamped within one year of immigration.
We don't have a power output problem. We have a population growth problem. Any "solutions", including "solutions" for AGW, will get swamped by the growth in population.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
What is the seasonal pattern of natural gas prices in Canada - does this enhance or reduce the value of greater wind power being in winter?
I strongly suspect that Ontario NG prices are very closely tied to US NG prices.
US NG prices vary quite a bit, and the major factors are weather (cold/warm winter and, with NG electrical demand being the marginal supplier, hot/average summers) and new supplies/depletion of NG (with LNG becoming a larger factor).
Cold winter weather spikes NG price up, warm winter spikes them down.
Ground loop heat pumps are growing in Ontario, and this will shift the peak demand IMO. First, more electrical heating demand in winter, and, because Ground Loop heat pumps are more efficient than air source air conditioners, reduced electrical demand in summer.
Ontario is blessed with some very large, almost free hydroelectric power (their half of Niagara Falls is 2 GW, and more in St. Lawrence) and they have a fair number of older nukes.
Going forward, Ontario can either reduce demand in other areas of electrical demand or get new generation. (Their nukes might start retiring soon, I do not know).
Wind is an economic choice for new generation. Although with the rising loonie and improving technology, I might suggest cutting the price paid for new wind (10c or 9.5c ?).
Best Hopes,
Alan
That's what I'll be putting in next summer. Verticle system (we have excellent ground water at 20ft, so quick recovery time). The system will cost $25K to put in. But the provincial and federal govs kick in $9,000 in rebates/grants.
Several nuke reactors are being rebuilt now and slated to go on line next year. Most of the reactors have at least 10 years left. Pickering is the only one that will need to be rebuilt (4 reactors) and they will be. A new nuke plant is planned as the gov is on record to wanting to close all coal plants (supposed to have done them all by now).
A new tunnel is under construction at Niagara for more output. Should be on line in a few years.
But at a mere 19% output wind turbines are a real problem. I'm just waiting for the other shoe to drop. The $350M solar farm in Sarnia. It's output will also be very disappointing. 6 sunny days in the past 3 weeks, daylight only 1/3 of the day in winter. And it's cost to the government is expected to be 4-5 TIMES the current price for e-.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Living where you do, this is probably not an issue, but make certain your house is extremely well-insulated before installing a ground-loop heat pump. We had one installed last year in a leaky older house in Colorado, and the long run-times have largely negated its efficiency advantage. (Of course, the person who sold us the system neglected to mention this, and my research didn't turn it up...)
Good point pianoguy1,
For 25k you can superinsulate and heat your house with very little energy, I am always amazed at the expensive HVAC systems installed when insulation is cheaper and lasts the life of the house, unlike HVAC equipment.
25k sounds expensive compared to the 6000-6500 price tag I hear about in my classes.
Flaws in EM Theory
"the person who sold us the system neglected to mention this"
I have had my HVAC/R instructors mention several times in class that their are unscrupulous people in the field. Sound like you bought from one of them.
Flaws in EM Theory
The system I'm getting is a WaterFurnance. A Canadian Comapny that has their factory in the US. They've done a lot of installations.
And in Canada, everything is expensive. Even our higher dollar hasn't changed that much. It would have been $5K cheeper if I went horizontal, but ripping up 1200 ft of our back yard down 5 ft would not have been viable and highly distructive. Drilling bore holes is expensive.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Oh, yes. The house is 50 years old, with R12. My plan is to rip out all the external brick siding, put in all new batt between the frame, then add 4 inches of high R foamboard and then stucco the outside. That should put it to R50. The attic I upped to R60.
The GSHP will also heat my greenhouse which will be attached to the house once the addition is put on. So while the home is not heated, the GSHP will heat the greenhouse when it needs it. But that is mostly at night. During the day when the sun shines the greenhouse gets above 30C even though it's -20C outside. So some of that I'll blow into the house on those days. Last year the greenhouse used 24x100lbs bottles of propane. So we calced the requirement of the GSHP to supply that.
Also, we live on the largest underground lake in the province, only 20 ft down. So with 6x150ft bore holes in this slow moving river, there will be very quick recovery times for the coils.
I'm actually looking forward to this. Especially once others start complaining about their NG bills.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
I don't think they'll end up being seen as a bad investment.
Maybe the wind doesn't come at convenient times for our present habits, but at least it comes back. That's more than can be said for our existing power supplies. We just might have to start using the power when it's offered to us.
Make Hay while the Sun Shines and the Wind Blows. And if you do have a white elephant.. can I ride him?
Bob
'If you're having a problem with someone.. walk a mile in their shoes. That way, you're a mile away from them.. and you have their shoes.'
We have a never ending constant high suppy of renewable electrical output now -- Niagara.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Good Start.. but having some eggs in other baskets is still wise, and of course necessary, as Niagara doesn't power the whole province, does it?
Bob
Not with New York sucking at the juice from the other side of the border. ;-)
Since it's all part of the same grid, then yes. Nukes are about 50%, so hydro from Niagara is at least 30%.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Two links to Ontario Hydroelectric Generation.
A pictorial (Sir Adam Beck is @ Niagara). Many of the others are quite small. Not a complete list. Innergex & Canadian Hydro Development own several of the powerplants shown.
http://www.industcards.com/hydro-canada-on.htm
This website has the real time generation of hydroelectricity by Hydro Power Generation. They say a third of Ontario Power's electricity comes from all hydro (Niagara + all other).
http://www.opg.com/power/hydro/
Ontario Power Generation (province owned) is adding a new tunnel to Sir Adam Beck @ Niagara and they added 192 MW of new generation in 2005. The new tunnel will reduce friction and supply the new generation. The benefits are less energy lost to friction (> electricity) and letting less water go over Niagara Falls during high flow unused. Today 60% of the time, some water is lost. After 2010, only 15% of the time will energy flow unused over the falls.
This newly captured water will NOT be during the winter, when the flow out of the Great Lakes slows (that white stuff problem).
By treaty, the tourists get a certain amount of water but they get more if the hydropower plants cannot use it.
Besides Niagara, Ontario has 2,650 MW on the St. Lawrence & Ottawa, supplying 8% of demand (these plants have a low capacity factor). NW Ontario 600+ MW, NE Ontario 1,000+ MW installed.
Hound Chute proposes repowering a 3.6 MW power plant as a 10.2 MW power plant. At Lac Seul they are adding 12.5 MW in new turbines to an existing site.
On the Lower Mattagami they are in the project definition stage of adding from 150 MW to 450 MW of new generation to existing plants and restructuring to more "Peak Only" hydro.
On the Upper Mattagami River, they would replace 24 MW with 35 MW.
As you can see, new developments of hydroelectric power in Ontario will be limited.
Best Hopes for Good Rains,
Alan
Hydropower went from 1182 MW to 1283 MW while I was writing this, It DOES vary by dispatch.
And why did Ontario Power NOT expand a bit more to grab that last 15% of the time when water is spilled ? That is extra renewable generation that will last for centuries. And one day, the US and Canada will not waste so much energy for the amusement of tourists.
Just this one alone, a big increase, how many wind turbines does that represent? 1500!!! Which will cost $2.3Billion and take 70 years to build.
Sorry, Alan, I just don't see how wind can compete for other sources. Not at the output they produce. Look, wind is not univerally applyable to everywhere. Ontario is one of those where it just simply does not work.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Wrong,
The Lower Mattagami River is already fully developed. All this would do is add more turbines BUT NO MORE WATER to the river.
Same water, more turbines, means the turbines sit idle more often (following the American practice of overpowering dams).
A small amount of new power should come on-line from 2% or 4% or so improved efficiency, and water would not be wasted during floods but I would expect very few additional MWh/year from this repowering.
However, it will allow greater volume control of the river, which is precisely what works well with wind.
The project is still being defined, which means it is a dozen years from completion (or longer).
BTW: Ontario Power is now @ 2,602 MW of hydro. They are turning the rivers up the morning.
Alan
Isn't Niagara fed by snow melt?
The Colorado and the rivers of China and India are dying due to decreased snow melt. Which will also make life harder for the builders of nuclear reactors.
Richard,
I see you live in my area. I also see that you seem to be deceived by all the misinformation that is being propagated by the local anti-wind groups. The bias of these particular authors is obvious based on their comment near the end of the article:
As far as I'm concerned, building more coal generation is simply burying our head further in the sand, and pushing the hard decisions off on our children.
You compare the current rate paid for electricity to the 11 cents that will be paid for wind generation, but forget to mention the billions of dollars in subsidies these industries have received in the past, both to develop their technology and operate. The real cost of our electricity is not the price we pay on our monthly bill.
If you want an accurate assessment of the impact of wind generation on the stability of Ontario's grid, have a look at the comments from the Ontario Power Authority on this comprehensive report: Ontario Wind Integration Study
The real problem I have with the local anti-wind groups is that it is obvious their main concern is how the turbines might affect the view out their windows, but they drag out all these other issues that have no factual basis.
I think it's more than NIMBY. I think it's ideology.
I see the same thing with the trolls bashing every electric car at Greencarcongress.com or Autobloggreen.com. I see it with global warming and peak oil issues all over the Net. It's like people feel personally insulted to be confronted with alternatives.
The problem here is that cars, suburbs, shopping malls, and credit cards are now part of what Dick Cheney calls "our way of life". To attack any of those things is to personally attack each person who thinks he has done well obeying the system or eventually will do well. Even the tiny idea that wind power is right means that the foundations of our economy might be in error. That is why several at this site have reported such angry, personal responses to their attempts to get out the word on peak oil.
In fact, it works the other way too. Years ago I was derisive of car safety advocates because I found a book in which one leftist accused the car industry of making capitalism palatable to the masses. In other words, he was willing to use car safety as an excuse to destroy Joe Sixpack's love affair with the automobile and thus his support for capitalism. Now that I've learned about the unsustainability of that love affair, do I try to sabotage cars, or do I do the principled thing and argue the long-term injustice of the system towards everybody?
So the 13-19% ACTUAL measured output is not factual? How many times have you been by the turbines in Shelbourne and they are either not moving or bearly move? I've seen it lots of times.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Don't let the facts get in the way of your obvious hatred of wind turbines Richard - nobody is disputing the output from the turbines, our arguments are based on the totality of their impact.
Here's a link with the subsidies to nuclear generation (which I support by the way) compared to wind. Based on US data but I'm sure very close to Canada's situation.
So I guess, I should judge the turbines by how often I see them spinning; how very scientific.
Did you even bother to read the report I referenced above that was commissioned by the OPA and IESO Just a guess, but I suspect that compared to you they have just a little more knowledge about all the facts regarding impact and utility of wind generation on Ontario's grid.
I'm not surprised to see you using the same tactics as all wind opposition - highlight the minor issues of wind generation and say nothing about the major issues of other forms of generation, and where possible mix in as much misinformation as possible. I also see you like to get the last word in based on the above comments and are close-minded, so I'm not going to waste my time with any further responses to you.
Let me ask you this. Replace "wind turbine" with any other item. Say, car, or computer, or you home furnace. What if those averaged out 20% performance? Would you be happy with that? Of cource not! No one would. So why is it that 20% performance from a wind turbine is better than 100% performance from hydro power? Because that is what is suggested. Curb hydro use in favour of wind.
It also begs the question, at what level of performance would you finally admit wind turbines are useless? 15%? 10%? 5%? Tell us what your value is. I can tell you what mine is for them being useful. More than 50% performace and that's being generous, 75% would be better.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
is better than 100% performance from hydro power?
Wrong.
Very few hydroelectric plants operate at a steady rate#. The national average for the USA is about 50% and Canada 60% (hopefully Canada will add more turbines to your existing hydropower plants and get you % down to 50%).
http://www.opg.com/power/hydro/
Clearly shows large differences in hydropower output in Ontario throughout the day. I documented over a 400% variance yesterday.
Ontario does not have enough water, even in a wet year, to get remotely close to 100%. And more, as I showed in a detailed summary, the potential for new hydropower is small. OPG says that Ontario gets a third of their electricity from hydropower.
# I have worked on the recently commissioned hydroelectric project in Iceland, Karahnkujar. It is designed for a steady 540 MW output to drive one aluminum smelter in remote East Iceland. It keeps 5 turbines running and 1 spare.
During the winter, the reservoir will drop an average 48 m, 80 m winter drop is the design maximum (from memory).
Alan
I just read through that Wind Integration Study, and cleary the NP article got its numbers from this document.
Page 28
Don't need to say any more, this document just proved what the NP article said.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Just finshed the whole document. Wow, this is really bad. The output is worse than the NP noted. The document clearly notes several times that their output is not what was hopped for, and that the 1 years study has just a much of a chance of being a good output year as a bad output year. They are going to have to wait for more years of data. But it's clear that at numerous times the fluctation in output is a "challenge" in their words.
This is worth reading folks as it's an eye opener on how much output one really gets from wind. And it's not good.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
And you've just provided another perfect example missing the forest for the trees, a common mistake of wind turbine opposition. You're hopeless.
So when would you consider them useless. 15%? 10%? 5%? Tell us your number please. Then tell us why your number trumps mine.
Seems to be the romance of wind out trumps logic of their true abilities.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Re: Here's why the US is facing up to it's thirst for oil
This is a review of the Strategic Unconventional fuels Task Force of the Dept. of Defence. It apparently came out at the end of September, but I haven't seen anything on the report so far, which seems strange for a US Government report, quite probably because it is too disturbing. As I've noted on TOD before, our military is very dependent on fossil fuels. The report says that the airforce uses 219 million bbls of jet fuel each year, and our total useage is 312 million bbls. of fuel. I don't know if this includes the mercenaries use of fuel, too .This makes our Strategic Petroleum Reserve pretty small.
It said in 2035 the the US Dept of Defense projected daily production of:
2.5 mbopd oil shale, 500,000 BOPD from domestic tar sands (yes, we have some), 750,000 BOPD from coal to liquids, and 1.3 to 3 mbopd from tertiary recover in old fields, plus 8 million barrels a day of conventional crude
Ain't it amazing !!!
Maybe this is proof of a multi-dimensional reality, and we got the report from another universe Bob Ebersole
Bob, least you forget the neo-cons make their own reality. The great unwashed (us) merely observe, and while we are observing, the neo-cons are making more reality...Unless we are speed readers and have great comprehensive skills it will be impossible to catch up...but that is the plan.
River I love the mental picture you wrote.
I read somewhere about a guy who was driving a Porsche or something fast while on LSD. The guy "realized" that he was making reality as he went. The road, trees, stuff alongside the road, all came into being as he thought 'em up - therefore he could go as fast as he liked, as fast as he imagined the stuff. Then he hit a tree he hadn't thought up.
If this is how the neocons work they will run into that tree sooner or later.
Thats not something he wrote, it's a actual quote from i think either donald rumsfeild or dick chenny.
You're right - that came out a few years ago. Damn those rumsfeild and chenny.......
Anyone remember the old George Of The Jungle cartoon? Watch out for that treeeeeeeee...! WHAM.
fleam, it is not an actual quote but a paraphrase and I did not claim to be the originator. I thought that all on TOD would be familiar with the verbiage by now. If you want to see what the neo-cons actually said, pen to paper, google 'Project For A New American Century.' Its all there, and with all the cretins signatures. BTW, some have since recanted.
Doesn't "recanting" also mean putting old liquor into new bottles?
If you're not part of the solution, you're part of the precipitate.
— Stephen Wright
The "making reality" quote is from a great 2004 Ron Suskind article in the NYT magazine:
http://www.nytimes.com/2004/10/17/magazine/17BUSH.html
However, the source is probably not Rumsfeld or Cheney. Suskind identifies him only as "a senior adviser to Bush."
Rove, perhaps? It sounds like Rovian sociopathy to me.
| The problem will solve itself.
| But not in a nice way.
The US Military Oil Consumption
The US military uses about 395,000 barrels of oil per day outside of Iraq. In Iraq the peak fuel usage appears to be about 360,000 barrels per day. When we put it in daily figures, against a national consumption of 21 mbpd, the 0.3-0.6 mbpd used by the military is of little consequence. There are far better targets to consider for fuel efficiency, primarily being transportation amongst civilians (over 10 mbpd, more than 30 times the military daily consumption). Given that the 312 million barrels in the article is apparently an annual figure despite erroneously stating that it is daily, and the strategic reserve is 700 million barrels, that means the strategic reserve can power the military for a full two years. That doesn't seem small to me. Additionally, the article is clearly in error, using what should be taken as an annual figure as a daily figure. The article asserts that the US military uses 312 million barrels of oil per day while the planet produces 85 million barrels per day? Innumerate journalists again... The 312 million barrels is close to an accurate annual figure if we assume 395,000 barrels per day outside Iraq and another 360,000 barrels per day inside Iraq as reported by the Defense Logistics Agency. Given those numbers we get 275.5 million total barrels, which at least would be in the same ballpark as the article's number.
In short Here's why the U.S. is facing up to its thirst for oil is a very poorly written article.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Actually the figures are not yearly but are 1000's of barrels.
The innumerate journalist got confused with MMBbl (million) and MBbl (thousand).
I wonder if it also includes industrial use for the production and maintaince of miltary hardware. It takes a lot of energy to produce tanks, planes, helicopters, ammunition, etc. If they haven't included this, consumption is bound to be significantly higher.
Seems extremely flawed since I doubt any production will come from shale. The other sources listed, such as tertiary recovery, tar sands, and heavy oil will be need to domestic consumption, such as food, transportation of basic goods, and infrastructure maintaince. There is no way that these source can support both domestic and military consumption. With out a domestic economcy to support the military, there is no miltary. Also I beleve US domestic conventional crude is only at about 5.6 Mbpd.
Summary of Weekly Petroleum Data for the Week Ending November 16, 2007
Holy Crap! Down 1.1M barrels. They were expecting 750k Up!
$100 here we come.
So much for heating homes this winter.
Yes...got locked out on my edit:
No sign of DEMAND slowing whatsoever!!!
Yep, Distillates(fuel oil/diesel) and Propane - still falling and well below 2006 levels.
Now there is only PRAYER for a warm winter.
I Still want to know what is up with propane?? ~7% lower than other stocks!?
Since there is little other choice than driving demand will not slow till the government puts some plan in place to let it slow. This could be light rail, rationing, higher CAFE standards, require at least three people per car on some roads, etc.
Until then people will be in favor of voluntary cut backs on driving because they expect it means more fuel and less crowded highways for them when the other guy volunteers to not drive.
There was a lot of variation in the predictions this week. Pup55 at PO.com complied this list:
For the past couple of weeks I've been taking what "they" expect, and then putting a negative sign in front of it. So they expected +750k...my formula yields -750k pretty close. Last week they were expecting -800k barrel...using my formula yielded -(-800k) or an 800k barrel gain, the reality was a 2.8mb gain...not perfect but better than what "they" were expecting.
Frankly, I put NO weight on the 'consensus'.
They are just throwing darts.
They have a 50/50 chance of being on the right side (and that is all that matters for a *hit* to them).
Apparently, those estimates are based on a "normal" week. They don't really take into account unusual problems (like shut-in production due to storms, etc.).
...or demand outstripping supply!!
That's right.
Since Memorial Day, they have a worse record than flipping
coins.
European Markets are down 2.4% BTW
DOUBLECHECK THOSE NUMBERS!! Below find copy of email I just sent to Neil Reynolds of the Globe and Mail:
>>>
In your article "Here's why the U.S. is facing up to its thirst for oil" you write that the entire USA consumes 20 million barrels per day, while the US Department of Defense uses 312 million barrels per day, and the Air Force alone uses 219 million barrels of jet fuel per day.
Doesn't compute. What about the other numbers in your piece?
<<<
Hans Noeldner
"Civilization is the presence of enlightened self-restraint"
Looks like the Defense and Air force numbers should be in thousands, not millions. A common mistake made by innumerate people.
-Don
The United State Military is preparing a preemptive strike against the known universe. It will take a lot fuel to get there. Big detours around black holes too.
The journalist has confused MMBbl and MBbl.
I don't know who is more at fault, the innumerate journalist, or the Task Force for using stupid notation. Hey, why not use Roman numerals?
I know that the stupid notation is traditional, but that doesn't make it less stupid.
Hi all I think this is important.
I've come up with a alternative way to calculate URR.
Based on this post.
http://www.theoildrum.com/node/3236#comment-267072
And this link.
http://www.touchbriefings.com/pdf/2590/Ferro.pdf
We define 50% URR as the point that your producing 50% water and 50% oil. The oil industry has often been said to be the water industry with oil as a by product.
The point at which this was reached is around 1995 its a broad peak but we where for sure past peak by 2000.
In other words using 50/50 as the sign that 50% URR has been reached Hubbert basically nailed it.
In any case the calculation is trivial your 100% depleted when your producing 100% water.
Using numbers from the paper
280 mbd Water
80 mbd Oil
gives 1 - 80/(280+80) = 78% depleted.
I don't have a publication date but it certainly lends credence to my assertion that we are actually 80% depleted globally and will shortly suffer a production crash.
Memmel, I think, overall, you could be very close to correct here. But I have just one caveat.
Okay, so you are nearing 50% water cut, or above it. Then you plug a lot of wells above the point of excessive water cut. Then you plug others very close to the top and install a short vertical arm that hugs the very top of the oil reservoir. Plus you shut some wells completely down because they are lower on the anticline.
Sound familiar? We had a long thread about exactly that because that was what they did in North Ghawar.
But I digress. You then lower your water cut considerably. But suddenly, because you are nowhere close to 50% water cut, by your formula, you are nowhere close to 50% depletion?
But I agree with your overall assessment on the 50% water cut. I just think that Ghawar, and perhaps a lot of other Saudi fields, are not at 50% water cut because they are sucking only from the very top of the reservoir. This means that when the water finally does hit, their production will suffer a catastrophic collapse.
Ron Patterson
Yes but your just in a sense invoking the super straw effect which means your water cut will eventually be much higher later. People that played the game of horizontal wells at -t0 will be getting hit with 90% water cuts when you make your measure so all averages out over time. At best horizontal drilling results in a faster approach later to 90% water cut at which point production rates collapse.
So its not linear in time and our increases in decline rates could be ascribed to advanced drilling methods that delayed the dive down. So we managed to plateau at 80% for a few years but this is just my shark fin model from a water cut perspective and it works both ways. But water cut is the smoking gun that I'm probably right.
Also, not all oil fields have water legs. However, the giant and super giant fields, e.g. East Texas, Prudhoe Bay, Ghawar, etc., do tend to have water legs with active or partial water drives. East Texas has watered out--just a skimming operation now with a 99% water cut. I think that the water cut at Prudhoe Bay is at about 75%.
But is a perfect barometer for the sort of global perspective that I'm looking at. Since its a relative measure and the population of fields with and without water drive is assumed to be fairly constant the exact distribution as long as fields that have water problems represent at least a significant minority is not relevant. Thats the beauty of ratios the details are divided out.
That is really sharp, memmel. Thank you.
I like the water cut idea but I think the math is wrong.
Let's divide the production in 11 segments
100 oil 0 water
90 oil 10 water
80 oil 20 water
70 oil 30 water
60 oil 40 water
==================
50 oil 50 water
==================
40 oil 60 water
30 oil 70 water
20 oil 80 water
10 oil 90 water
0 oil 100 water
seems to me that if total flow volume is constant, say 100 barrels a day, you always extract more oil getting to the midpoint than you do afterwards.
Looks like you are about 72% extracted at 50% water cut.
What am I missing?
No its a property of a ensemble of fields. A individual field spends a lot of its productive life with zero water cut. A field hits 50% near the end of its life. Fractional Flow stuff.
Consider a group of 100 equal sized fields 50 just starting production and 50 at 99% water cut the average is 50%.
It only works with large groups of fields not for a individual field its a statistical effect. YOu can come up with a wide range of groupings and at 50% URR the groups have a 50% water cut given a constant fluid flow.
Or you could consider it a boundary value problem before you start production your at 0% water 100% oil. When you finish your at 100% 0% oil. Thus on average at 50% your at 50% URR.
Real fields produce no water say for 50% of their life and near the end its 3:1 or so for about the last third of the fields life up to 99:1 at the end. The water production is pretty much a exact inverse of the oil production peaking at the end. So you could say that the total fluid produced is about 50% oil and 50% water for a field. And this mean becomes stronger the more fields you consider.
It best to not try and apply this to a individual field but it works out with a minimum of two fields. I don't see it as a property of a individual field.
Or you could consider it a boundary value problem before you start production your at 0% water 100% oil. When you finish your at 100% 0% oil. Thus on average at 50% your at 50% URR.
Perhaps I am confused. But it seems to me that you are mixing the reservoir ratio (oil+water) and the extraction ratio.
Understand, I'm not starting a food fight, but I still suspect that a 50% water cut across a reservoir (or reservoirs), regardless of well numbers, means the reservoir (or reservoirs) is/are about 75% depleted.
Perhaps I do not understand URR as a subset of OOIP.
No that fine I'm not talking about water cut at all. This is different. The idea is that on average for a group of water driven fields your producing either oil or water for your total fluids. New fields produce 0% water dead fields 100% water. Water cut is something different. Your right I think for a field when a field is producing 50% water its about 75% depleted. But consider two fields one with zero water cut and one with 50% the average depletion is 25% thats what I'm talking about as you see you cant do it for one field.
The boundary value stuff is just to show that the water production and the oil production have equal inverted bounds don't worry about it I was just saying the production profiles have the same constraints just inverted so water production and oil production are related thus oil URR and water URR are related.
Try it this way forget about water cut first :)
When we first started pumping oil we pumped very little water vs oil. Right after we pump the last barrel of oil we will pump 100% water.
In general if you consider all the fluids ever pumped or the total for the whole world. It will be about 50% oil and about 50% water. Think of it as a bottle of vinegar and oil salad dressing. If you tilt it at a angle then you see that you get this diagonal band starts off pure oil then is 75% oil 25% water then 50/50 then 100 water.
So when you hit 50% then your about halfway. The unknown is the ratio of oil to water in general. If its say 1:3 for all of history which I doubt then we would hit 50/50 at 75% water. In the last 100 years we have not pumped three barrels of oil for one barrel of water. Serious water injection programs did not really start till the 1960 or later. The reason I'm comfortable with it bing about 50/50 is you end when your 100% water. So in general as your noting your producing 75% of the water to get the last 25% of the oil. What your missing is that you actually have 25% of the production with effectively no water production thats why its lower 50% as opposed to your 73%. Globally for example we produced oil well into the 1950's before water injection became deployed and it was not widely used till later in the 1970 or later. All this oil produced at natural pressure or zero water cut needs to be accounted for.
We can explore the idea for sure but even as it stands it looks like we are well past 50% URR unless I'm totally off base. A lot of people believe we are at peak oil in the 50% URR sense because we are at peak production I contend that 50% URR came and went and no one noticed. We hit peak production capacity back in 1995 but we had so much oil then prices plummeted. Later overtime technical innovation allowed us to continue to increase production despite being past 50% URR. However the water/oil percentage shows the true state.
The US for example is probably offset the other way. Water injection to maintain pressure was used much later so the 50% URR peak from water% is actually after the production peak. Thus the US should have a fatter tail than the rest of the world. So I think the US actually hit 50% real URR using the water metric after its absolute oil production peak. This is just a artifact of when widespread water injection was used to produce oil. In general the method was delayed in the US. Its a bit ironic that we where so greedy we inadvertently practiced conservation.
Again at best it seems I'm underestimating the actual depletion percentage scenarios where I'd be over don't seem to make much sense way to much oil has been produced without a water cut at all. So I'm pretty certain a production crash is coming if this is a reasonable approach. My approach says we are probably 80% depleted globally. If its conservative then its higher by no matter how you do the math we are going to have to see big production drops soon or I'm completely wrong.
I don't know anything about the time related periods for average water cuts in fields, but if a field remains at 100:0 (oil:water) for a year and 50:50 for 2 years and 10:90 for 10 years (as an unrealistic example) - then you would be 50% depleted half way through the 50:50 cut... I have no idea how close this comes to reality though.
Closing some wells in a large field to lower the water cut also seems to be an issue - but as Memmel points out, it may be a useful tool for looking at a range of fields/averaging out water cut/depletion over time.
My question is: Does that make it only useful in hindsight? Does it have predictive value?
"You can never solve a problem on the level on which it was created."
Albert Einstein
Correct the point is that as you go through the number of possible configurations of oil and water production they form a Gaussian curve centered on 50/50 representing the most common situation when your at 50% of oil production. Few of the permutations that are not centered on 50/50 are actually physically reasonable.
What does it tell us. Well for one Hubbert is brilliant since if you look the result from a water perspective is a peak around 1995 and a URR of 1250GB EXACTLY the same as Hubbert predicted. By using the alternative approach of water cut percentage the large variations in oil production don't effect the outcome. So by watching water cut we don't have to worry about all the political economic effects.
So we pump at about 30GB a year this gives 8.3 years more production but we probably will see a steep drop before then
and this last 250GB will take 20 years or more to extract assuming we continue to extract. This affirms what I've been saying that I expect production to effectively crash soon.
Next we can confidently assume that URR estimates esp since 1980 have been seriously inflated world wide and we should with confidence revisit reserve estimates vs actual production. I think you will soon find that they are off by 50% or more from all sources.
What we have done is developed some incredible technology for oil extraction instead of peaking in 1995 we have manged through sheer technical excellence bit in general only to extract faster see this post.
I believe I've effectively proved it.
http://www.theoildrum.com/node/3203#comment-267238
Aren't you replacing one thing we don't know with another thing we don't know?
Short answer is no.
Long answer is that buy using ratios the unknowns cancel.
The debate would be on assuming that your at 50% URR when you hit 50% water cut. I'd argue its a quite reasonable metric.
It can in a sense be proved since once a field reaches stripper status 90%+ water cut the remaining oil recovered is about 10% of the total URR. You can work your way backwards from there to show on average its correct. Its a emergent property or the ensemble or group. Sort of like stat thermo.
Not surprising since oil extraction is really a total fluids problem.
So we know for certain the water cut in Saudi oil fields?
Simmons in Twilight in the Desert mentions that Ghawar's water cut was 35-36% in 2004. I guess that means that Northern Ghawar, where most of the oil was being produced at the time, was only 36% depleted.
On average ? I think Ghawar is simply too big to do this with only Saudi Arabia you could do it for the entire middle east to less the effect of Ghawar ( Same problem for Mexico ).
You want a ensemble of equivalent fields but that can be handled by taking a bigger sample. In the real world you probably want a thousand fields or more to feel comfortable with the results. Overall the middle east seems to be about the same as the rest of the world they have some pretty high water cuts in general. Obviously you would have to actually do it to know for sure.
If you exclude Ghawar since its such a outlier then outside of Ghawhar off the top of my head they are probably 50% depleted. Old fields that are not producing are kept at 100% water cut not removed btw. Ghawar itself is more depleted how much is debatable but 70-80% is my guess this would probably put them overall at about 60%. And by Ghawar I mean the north end of the field not the south end.
Ghawar itself is a real outlier so its going to skew any Saudi stats.
Another possible partion is to treat the giant fields as a group and all the rest. Your actually trying to avoid individual field effects so I'm not sure the population of giants is enough to treat as a group.
The result can be shown to be stable by removing a random set of fields and redoing the results. Once you have enough fields that adding or removing one has no effect then you probably have a large enough population. Again you can see you probably want to tiptoe around Ghawar until you get to the level of the world its probably going to skew the data.
In general ensemble properties seems to work with a population of a few hundred to a few thousand simply because the individual effect drops to 1-.1%. This is all statistical analysis stuff I'm just using handy rules of thumb. At the end of the day you have Ghawar then the rest of the world its best to leave it out and treat it by itself. Sorry for the rambling but its one friggin big field.
It would be interesting to divide this up along ranges oil fields seem to fall naturally into about 4-5 groups. Kings Queens etc .. And of course by large region. I think that will highlight that we are also very low on "easy oil".
I think you will find that the smallest fields are significantly less depleted than the global average.
And again remember a field that goes dormant is not removed.
Note that I did not include dead fields but thats because our largest fields are still producing at a high water cut. So its ok for the world but if you start trying to take smaller samples then you need to account for dropouts.
You could probably handle Ghawar better if you could cut it up into zones and just count wells. The "field" size would be the same as the number of wells in a given zone. Then a watered out field would be one with no oil production. Of course you would need to know the per well production numbers which I suspect are a tad hard to obtain. In any case this is a approach for large regions and the world not for fields and I suspect its unstable below 100 fields and sensitive to very large fields until you get the population up. Otherwise your getting wrapped up into actual per field water production which is different and field dependent.
Hi memmel,
I read your post from the office this morning and I've been itching to get home and reply. I hope the animated discussion which you provoked hasn't run its course.
Basically you've scratched the surface of a body of technique known as decline analysis, itself a part of reservoir engineering (which is what I do for a living). The mathematical transformation you describe (basically, watercut=%recovery of reserves) does in fact apply to a highly specific physical situation...
...which is rarely if ever realized in practice.
The way watercut develops with time, or with cumulative production, depends on all the above factors but mostly on the nature of the rock fabric (which affects how water displaces oil from the rock pores), permability variation between reservoir layers, and the gross geometry of the reservoir (e.g. dip angle). In particular there is a huge difference between fields with "bottom water" (typical of Central North Sea Palaeocene reservoirs) and "edge water" (e.g. Northern N Sea Jurassic reservoirs). And if you're doing the analysis on a basin scale, well, a population of the former will still behave very differently, in aggregate, from the latter. Some fields can produce dry oil up to very high recovery factors, and then suddenly turn to water. Others can produce water in small but increasing amounts from very early on. But the physics of real reservoirs means that the linear relationship rarely if ever holds, whether for wells, fields or basins. If only 'twere that simple.
If you'd like to learn more about reservoir engineering, I can make some book reccos. Unfortunately they are specialist professional texts and can be expensive, though some are surprisingly readable for the scientifically literate generalist, which is what you write like. Even more unfortunately, a lot of them went out of print during the lean years of the 90s and are almost impossible to get hold of. But you might get lucky.
Cheers,
PUD.
Cool yes this sounds about right its a idealized situation.
But understand that I'm just using it as a basis to generate a global average. So in the mean even though every field is different you end up with the overall system in a sense giving a sort of macro or bulk answer not all that different from a ideal field. So by considering the average of hundreds or thousands of fields your actually fairly confident that your idealization is not wrong. In fact I'm also assuming a sort of standard field size. In general at least for oil fields most deviations from the ideal would result in lower overall production.
Its enough in my opinion to be VERY confident that if we are producing 288 mpd of water to get 80 mpd of oil no way in hell are we at 50% URR and 80% is probably optimistic.
Since I get the exact same answer as Hubbert did in 1980 of a URR of 1250 GB with a peak in 1995 it makes me suspicous that he may have actually used this method and simply chose not to publish this approach. He was actually a hydrologist
as I suspect your aware. I could see him understanding the implications of the water cut but not for whatever reason wanting to present that way. From his other papers it sounds like he used several approaches and just published one of them.
Since I think its pretty obvious we are not at 50% URR but past it this implies that the URR estimates used in a lot of models presented here are seriously flawed to the tune of over 500-750GB which is a huge error. In short the manufacture of paper barrels seems to have been a booming business and this includes a lot of the western oil companies. So if I'm right its not just the Saudi's that have been playing the inflation game but the real status of the oil reserves presented by the Majors in their SEC filings is far less. Shell was the tip of the iceberg.
My best guess is that since a lot of the booked reserves are not in the US proper that people have found it convenient to give them the benefit of the doubt. And since modern extraction methods allow you to pretty much run a field close to maximum production right to the end the truth of the situation would only come out when you ran out of new fields. And of course the shield of Enhanced recovery can be used. So if I'm right the magnitude of the farce boggles the imagination.
Anybody familiar with a study by Eban Goodstein, Polluted Data, that appeared in the American Prospect five years ago?
Makes you wonder about similar estimates thrown about concerning alternative energy and the like. He finds equal fault with academic research too - in case you're thinking this is strictly related to industry assessments and thus common sense.
I've heard the same thing about regulations to ensure accessability for people with disabilities. I used to work for an agency involved with that, and its staff consisted of people who knew a lot of cheaper ways to meet federal regulations. Nearly all of them had disabilities themselves, so they took these issues seriously. On top of that, few people really believed that accommodating such persons in the workforce would be so successful, and thus create more employment.
Smart Metering:
http://news.bbc.co.uk/1/hi/magazine/7103981.stm
''Playing the meter
How smart meters monitor households' energy usage
In detail
The way we pay for gas and electricity is going to change fundamentally, says Gordon Brown. But will "smart meters" make us energy-obsessives?
A humble box under the stairs is being hailed as the path to a household energy revolution and lower carbon emissions as a nation.
So-called "smart meters" are the next generation of gas and electricity meters which will be able to tell consumers and suppliers how much energy is being used in the home at any given moment. ''
Yeah, I've got one.
Upshot?
Forget everything except heating/cooling. Cut that usage/find alternatives and you can make a sizeable difference.
In the future we will be able to accurately monitor the gas and electricity we dont get...
And can you still make it go backwards with a current transformer..
More fuel problems in Africa: ZIMBABWE: First diarrhoea, now possibly plague
Excerpts:
Before anybody jumps me, yes, I'm aware that Zimbabwe's problems are largely the result of Robert Mugabe's advanced case of recto-cranial inversion. However, IMO the results are very similar to what could expect in many African countries if world oil and gas prices were to triple.
This is the face of collapse in Africa, and I suspect we'll become very familiar with it as the next two or three decades unfold.
Did anyone read that link to the Brazil find?
Check these snipits.
If 8BB is a LARGE find then we are in trouble. This guy obvioulsy does not get it. It may supply Brazil for a few decades, but does nothing to relieve production loss elsewhere in the world.
Richard Wakefield
London, Ont.
No one is ahead of their time, just the rest of humanity is slow to catch on.
Yes, that is very nice news for Brazil, and irrelevant for the world (or even for the US alone).
Brazilian press gets that. It's your press that is missquoting it.
Yeah, I thought that in order to be called a "province" it had to have a lot of big wells.
But note the hostile language: "Slap in the face", "Eat their words". Would you see such aggressive words used if a scientist have been proven wrong about the number of moons around Saturn?
This author is taking the mere discussion of Peak Oil personally, as an insult or threat. He acts the way people act when you bring up fishy things about 9/11. You'd think that they all feared losing some kind of power over the world if too many heard our ideas.
With all the discussions of global warming lately, I thought that this little tidbit from the Monthly Weather Review, April 1906, Vol. XXXIV, No. 5, p 159, would interest some readers. There are many fun energy-related details and ideas in the following text, including some early concerns about a possible urban heat island effect.
Interesting, too, is that New York is said to use 100,000 tons of coal daily back in 1906 (at least during the winter). Is this right? Manhattan had about 2.3 million people in 1910, so that would be something like 23 tons of coal per person per day. A truckload per person daily. Pretty amazing figures.
-best,
graywulffe in CVO, OR
Ummmm, 23 tons of coal per person times 2.3 million would be 52.9 million tons of coal not 23 tons. 100,000 tons of coal per day would be 86 pounds per person per day, about right.
Hey TOD's check your math at least one time before you post.
Ayyyeee!!! Yeah, I had just woken up... I should have seen my arithmetic error immediately. Thanks for the correction.
It's an amazing picture, however the conversion: 100,000 tons of coal being brought into New York daily.
-best,
graywulffe in CVO, OR
You have calculated persons per ton of coal.
Below is the second post to my blog at
http://peaktimeviews.blogspot.com/2007/11/assessing-impact-of-current-oi...
Assessing the financial impact of the current oil situation and 2008 prospects
Let's consider the following points
Re the USD (part 1):
1. The fall in the dollar's value since August 2007 has taken place against a backdrop of a slightly improving US trade deficit.
2. From point 1., it is just logical to deduce that, if the US trade deficit had instead worsened during that period, the dollar would have fallen further.
Re crude oil prices and supply/demand balance:
3.
On Nov 20, 2006 WTI = $59 and EUR = $1.28, so WTI = EUR 46.
On Nov 20, 2007 WTI = $98 and EUR = $1.48, so WTI = EUR 66.
That's for a WTI price rise of 66% in dollars and 44% in euros in a year.
4. This yearly WTI price rise cannot be explained by Iran-related geopolitical tensions, which were actually higher a year ago. It cannot be explained by speculative pressure either, since NYMEX net positions a year ago and now are fairly similar. Therefore the price rise can only be explained by a deterioration in physical supply and demand balance.
5. To support the inference in point 4., it's worth noting that,
on Nov 21, 2005 WTI = $58 and EUR = $1.18, so WTI = EUR 49.
However, on Nov 2005 speculative positions at NYMEX were net short at historic record levels, so a year later we had both increased speculative pressure and increased geopolitical tensions, yet the oil price was roughly the same. Therefore, reasoning like in point 4., we deduce that supply and demand balance should have improved during 2006. And indeed, as we see in the IEA Oil Market Report (OMR) at http://omrpublic.iea.org/, total OECD closing stocks were:
for 4Q2005, 4083 mb amounting to 81 days of forward demand
for 4Q2006, 4180 mb amounting to 84 days of forward demand
6. In contrast, and adding support to point 4., OECD closing stocks for 2Q2007 were the same as for 2Q2006 (in mb and days). But more importantly, OECD stocks experienced a net *draw* of 380 kb/d during 3Q2007, contrasting with a 1160 kb/d net *build* in 3Q2006, and an average 280 kb/d 3Q net *build* over the past five years (and anecdotically, with Japanese crude stocks falling to their lowest level in at least 20 years.) Which clearly shows the worsening in supply/demand balance over 2007.
Re oil production:
7. According to the EIA, world oil production peaked on a monthly basis on May 2005 for (Crude Oil + lease condensate = CO) as well as for (Crude Oil + lease condensate + Natural Gas Plant Liquids = CO + NGL). If we consider All Liquids (which includes biofuels) then the peak month was July 2006.
8. Also from the EIA, for all 3 categories (CO, CO +NGL and All Liquids), production for the first half of 2007 has been the same as (actually slightly lower than) that for the first half of 2006 (73.23 vs 73.48, 81.20 vs 81.26, and 84.28 vs 84.35 mb/d respectively).
9. There are strong reasons that expect that 2008 world oil production will not be higher than in 2007, as shown by Stuart Staniford at
http://www.theoildrum.com/node/3236
Re oil demand and price projection:
10. According to the latest (Nov 13) IEA OMR, average global oil demand was/is expected to be:
for 2006: 84.7 mb/d
for 2007: 85.7 mb/d (+1.2%)
for 2008: 87.7 mb/d (+2.3%)
11. Therefore, with constant production over the 3 years, if a 1.2% increase in demand caused in 44% increase in price in euros, a 2.3% increase in demand can be expected to cause a 44 x 2.3/1.2 = 84% price increase in euros, to a price in Nov 2008 of EUR 121. Assuming EURUSD stays at 1.48, that's $180. (Realistically, it is very unlikely that stocks experience such big drawdowns during 2008 as to meet all of the projected demand. Rather, the estimated price can be reasonably thought of as that needed for causing the amount of demand destruction that will allow stocks to remain at acceptable levels.)
Re the USD (part 2) and the US economy.
12. However, the EURUSD = 1.48 (and consequent WTI = $180) assumption in point 11. may not be realistic for the following reasons:
a. If US oil and petroleum products imports remain constant, an 84% increase in the oil price can be expected to cause the US trade deficit to worsen, which in turn can be expected to cause a further fall in the dollar (as per points 1. and 2.).
b. An 84% oil price rise will greatly increase the current account surplus of oil exporters and as a result their foreign exchange reserves, very likely to the point of compelling them to at last unpeg their currencies from the dollar and further diversify their foreign exchange reserves from it.
c. Moreover, the $200+ oil price expected to result from factors a. and b. can in turn be expected to increase the pressure for oil exporters to start pricing and trading their resource in other currency/ies, thus adding further downward pressure to the dollar and conceivably taking it to its "Wily E. Coyote moment".
13. In assessing the impact of a doubling of the oil price on the US economy, (neo)classical economic analysis can be expected to point out that the share of energy in US GDP is still low. Recent oil price action, however, shows how easy it is for the oil price to double, and a doubling here, a doubling there, and pretty soon you're talking about real share. Therefore a $200+ oil price (which BTW assumes peace and love between the US and Iran) can be reasonably expected to add significant inflationary pressures in the US. If, however, the US Federal Reserve adjusts its monetary policy REACTING to those inflationary pressures once they are manifest, it is very likely that by then the dollar will have already lost a substantial part of its international trade and reserve currency status.
Conclusion:
The currently expected oil supply and demand situation for 2008 portends at least a doubling in the dollar oil price and poses a significant risk of triggering the much-feared collapse in the dollar value. The only alternative is a significant "endogenous" (i.e. not due to higher oil prices) reduction in oil consumption in the main consumers (US, Europe and China, in that order). Which in turn can be reasonably expected to occur only as a result of a US-led OECD recession (causing a Chinese deceleration of economic growth). A new Fed monetary policy focused on the preservation of the dollar value for international transactions through checking its global supply growth can do the trick.
If the ECB does not have the nerve to follow a similar path, and issues whatever amounts of euros are needed e.g. to prevent any bank from falling, that will lay to rest the expectations of the euro challenging the dollar status as the main international trade and reserve currency.
Beach Boy, Excellent analysis of future prices. This is as good as any bodies projections. I will say this, as a small retailer, if crude goes to $200 barrel, there will be massive unemployment. As 70% of the US economy is based on consumers, no body will be buying anything other than necessities. Think of the disconnect for local and state governments with all that sales and property tax revenue lost.
Nice. Thank you.
I wonder indeed if the Euro is a good candidate as the main international trade and reserve currency. As good or better may be the Swiss Franc, Norwegian Crown, or perhaps the Russian Ruble?
Hello TODers,
http://news.yahoo.com/page/election-2008-political-pulse-voters-mood
------------------------
"My husband and I are happy," said Murray, 46, a homemaker from Montpelier, Miss. "We just wish we could buy more into the American dream."
There is a widespread unease—shared by 77 percent—that the country has meandered off in the wrong direction.
----------------------------
I suggest that these people should wish to buy more of the coming AMERICAN REALITY by becoming Peak Aware, then maximizing their opportunity to practice ELP and full biosolar critical-mission investing at every possible scale.
Imagine if one state, but ideally a large watershed, went whole hog in this direction by the Governor formally launching massive Peak Outreach to every citizen. Pretty quickly, the population would polarize into those that would be gung-ho for paradigm change, and those who would oppose such a program [biosolar-MPP vs detritovore-MPP]. My guess is that most would aggregate towards the biosolar direction-- no wisdom in continuing to try riding the dying FF-horsehead pump.
The legislature would then have no problem passing laws to speed the required changes: RR & TOD, population control laws, expelling illegals, very high and punitive taxes for any tourists, forbiding in-migration by legal citizens, building a seven-year supply of food, ammo, seed, and fertilizer reserves, strategic bicycle & wheelbarrow reserves [with a plan for cheap, but effective SpiderWebRiding to hook onto the RR & TOD buildout, plowing the golf courses, massive programs for composting, humanure recycling, specie protection combined with massive reforestation, community building of solar hot water and cooking devices, cutting FF-imports at an accelerated rate, abolishing low mileage cars [then quickly moving to no personal cars], turning off almost all outside nightime lighting, maximum and quick justice for those who violently misbehave, etc, etc. Basically: all the excellent ideas posted here on TOD and other websites.
Those in denial; those with delusional wishing to cling to the last dregs of FFs can easily migrate to those enclaves suggested by Hirsch's fifteen FF-favored states. The inevitable thermodynamic contraction of the FF-spiderweb will force this in time anyway--might as well further force the denial & delusional crowd together while you can.
Then when postPeak ELM kicks in: the Overshoot component in the detritovore areas will really go machete' moshpit nuts in record time. I would expect a breathtaking fast-crash, followed by maximum catabolic degradation in these areas from these effects.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
"Go Machete moshpit nuts in record time"
Bob Shaw at his best.
Rail is the target of saboteurs...
http://news.yahoo.com/s/nm/20071121/wl_nm/france_strike_dc
Funny, someone just mentioned a short story the other day (drumbeat) about the origin of the word saboteurs... apparently from the French for 'shoe', as in a shoe thrown into a machine.
It's known as TERRORISM in the USA.
And a backhand to all the pro-railers here.
Provocateurs more like. The aim is to discredit the strikers and undermine public sympathy for them. Don't mistake this for a simple strike about money, it is about destroying the French way of life for the sake of profits.
The French were stupid or more likely naive to allow their Country to be taken over by the neocon cabal. Hopefully they will come to their senses and resist the asset stripping, sorry, "reform" of their Republic. I'm not hopeful though, the French are up against a ruthless and determined opposition that will use any means to attain their goals.
Billions of jellyfish wipe out Irish salmon farm
The jellyfish were a species normally found in the warm waters of the Mediterranean.
This reminds me of the squid invasion story on some California coastline. They were also typically found further south.
Link...link?
Ah...found it...it's about the Humboldt squid that has been building populations along the California coastline since 2002. They are voracious eaters and have had a documented effect on the Pacific whiting population. The squid distribution was "previously confined to more tropical climates".
National Geographic News: California Squid Invasion Threatening "Fish Stick" Species
I also read that as large fish stocks are being decimated jellyfish populations are growing to fill the vacant ecological niche.
The Oil Drum issued a press release today pointing people to The Oil Drum's response to the Wall Street Journal story. We are particularly interested in getting the story out to newspapers who might be considering writing an article about high oil prices, oil shortages, or some similar topic.
It might be worthwhile for folks at TOD to e-mail a copy of this press release to local newspapers and others who might be interested in it.
ISEOF? As in IsEOF()? Very droll!
--
Jaymax (cornucomer-doomopian)
I found two direct online references to TOD, here is CBS News
The media analysts now seem to acknowledge the issue of decline rates, and are addressing the question of where new production will come from. They are getting there slowly. Given that we have only just arrived at a tangible peak, it is quite a rapid response.
Contrary to some beliefs, the media are quite open to ideas from online blogs. While they may have a desire to not upset advertisers, there is an equal or greater desire to break big stories. We know that journos do look at blogs quite a lot.
In the past journalists would mostly have to make do with PR from oil companies, and optimistic announcements from people like CERA. I think that PO activists have had an affect on CERA, they can't really claim "cheap oil forever". Journalists wouldn't read about counter claims in obscure technical journals, but they do read the web. The Internet has made the playing field a lot more level than ever before.
Credible information from sites like TOD does make a difference, and it can get to the media relatively quickly.
Bob: What they are doing is jumping on the bandwagon while at the same time attempting to discredit their source.The WSJ deals with "real life" while TOD deals with wonkery. The MSM will use info gleaned from the Net while still attempting to retain an artificial air of superiority.
Here's a new twist on the Iranian nuclear program. It appears that the Saudis are worried that Iran will retaliate vs. any American strike on their nuclear facilities by striking Saudi oil assets.
What would that do to oil prices?
http://vwt.d2g.com:8081/2006/04/_saudis_fear_iran_is_after_the.html
This is a *NEW* twist?
This has been a concern for years.
Americans are choosing wood over heating oil:
http://www.bloomberg.com/apps/news?pid=20601109&sid=aULJHfYrYsYs&refer=home
Interesting if a larger switch in this direction will have an effect on wood prices and if so how that will affect research on cellulosic ethanol.
It's old news. A cord of wood in rural New England rose from $140 to $185 in 2005-06. It's pretty steady this year despite rising oil and propane. The supply is quite elastic. There's a lot of cruddy hardwood and the extra $40 a cord is enough to pay a living wage to cut it. Also there's a discontinuity in demand. So far the increase in demand is largely from folks who had woodstoves but were casual about using them at $2/gallon heating oil. At $3 they stoke religiously, but it will take a couple more bad years to get significantly more stoves, let alone hideously expensive dual fuel furnaces, installed.
A new Bullroarer has been posted at TOD: Australia/New Zealand:
The Bullroarer - Thursday 22nd November 2007
Includes petrol and diesel reaching record highs in New Zealand (combination of high oil prices and local currencies pulling back from recent highs).
Also more coverage of the Queensland Government's (wrong) response to an inquiry that suggested scrapping that state's fuel subsidy because it was not effective (Leanan had one link above as well).
cheers
Phil.
Why does TOD get slower and slower until it virtually dies every day between around 0200Z and 0500Z? Takes around 5 mins to go from clicking a link till displayed, when daytime it's instantaneous
Anyway, has this been picked up yet?
TIME Magazine December 3 Edition: Peak Possibilities
Wow.
--
Jaymax (cornucomer-doomopian)
Now THAT is the Mainstream Media!!! This outdoes the WSJ and then some. It's been an amazing year for THE DEBATE.
no the question should be how they claim it will be handled.
how do they end the article basicly.
"Either way, the beginning of the end of the oil era may be upon us, well ahead of schedule."
is how it ends. They said neither "don't worry" nor "we're doomed".
I thought it was an accurate and fair article, they covered all the main facts with little prejudice.
Bob: Actually, I thought it was more cornucopian than the WSJ article. The Journal implied that declining global oil production would be a major economic problem (should it occur). This article states that a "hopeful" viewpoint is that declining global oil production can be handled relatively easily with enough ingenuity, something the WSJ does not foresee. The TIME article also took pains to avoid mentioning the declining oil exports issue, while labelling "peakists" as obsessed with war.
Peakists are obsessed with war and economic collapse, so that was a fair comment.
What was mentioned in the first post in this very thread?
"War has historic links to global climate change"
Peakists go round saying "peak oil will inevitably lead to resource wars", and then say "war? who mentioned war?". You ain't fooling anyone but yourself.
It's always been disappointing that Peak Oilers have very little awareness about how they come across.
Bob: If the Bigotry shoe fits you can wear it. The problem with this country is those goddang "Peak Oilers".
Yep, it's all YOUR fault.
Is there a reason why GCC leading to war and peak oil leading to war are mutually exclusive?
Peak oil leads to war because there aren't enough of the necessary resource, oil, to go around, and people fight for it.
Climate change leads to war because radical environmental changes leads to less access to a wide array of necessary natural resources, and people fight over what's left.
Did I miss something?
Oh yes, you and many others miss this point.
I am not questioning the merits of the discussion, I am merely pointing out the discussion takes place a lot.
Where did the editors of Time learn their etiquette? Usenet?
Trolls.
They're blaming the messenger for the bad news. Our "favorite" themes are war and economic collapse? Excuse me, but that's my economy too. Pointing out the obvious apparently makes one responsible.
I suspect that we will see more of this as peak oil enters the mainstream consciousness. The polite, frozen smiles we're accustomed to seeing at at cocktail parties could turn to snarls, resentment and accusations of "eager catastrophizing" as the hypothesis unfolds into a new and painful reality.
Unfortunately peak oil is not a hopeful story, even with the romantic heroes of solar power and windmills. But defeatism has at times in the past been a crime akin to treason. Maybe we should all keep our mouths shut at the dinner table this Thanksgiving. :-)
George (in Amsterdam)
I wonder if the Patriot Act covers such rabble rousing.
I thought that the story that someone described a few days ago about his father's village in Europe n the Second World War was a pretty good metaphor.
A young man trying to warn the village that the approaching Nazis were killing everyone in sight was beat up by village elders for trying to upset the status quo.
Erm, I didn't get the same as you from what he wrote.
I think he's trying to get the readers to go "well, if these people were right about peaking, maybe they're also right about war and economic collapse" - he also contrasts it, not with anything presented as 'fact' or 'realistic', but with "a more hopeful take ..."
It is the lead in to the ultimate paragraph, the one to leave a strong thought behind in the readers head. I see no "blame the messenger" anywhere in the article. I see "you better listen up to what these people have been saying folks, in case they're right".
--
Jaymax (cornucomer-doomopian)
Re-reading the article I see your point. It is a good article and I suppose I reacted to the words "favorite themes" as if the author was suggesting we were rooting for war and economic collapse. If anything, I believe the opposite is true - we are more alarmed at the prospect of these events as we believe they are all too likely.
Being called "motley" didn't help - oh well, if the shoe fits...
(Note to self: measure twice, cut once.)
It looks as if the MSM is finally beginning to understand the problem of Peak Oil. We've seen an explosion in media interest with many articles appearing about the "high" price of oil and it's products. The TIME article's first paragraph asks the appropriate question.
Later on, they note that:
But, this comment or the other comments from OPEC don't answer the key question from the first paragraph, which is, why is the price of oil going up if the market really is "well supplied"? Speculators do not set the spot price and much of the world's oil is traded that way. If the "Invisible Hand" is really at work, the speculators would quickly find themselves with oil that cost them more than they could sell it for in the short term and the price would have long since gone down. But no, that's not happening, is it?
The Editors at TIME make the point clear in a rather subtle way. Note this sentence:
Notice the question mark on the end of a statement. The Editors don't believe we've got 2 or 3 more decades until oil peaks, so they left that question mark there to show their disbelief. Cool editing, IMHO!
E. Swanson
Of course, the media, and financial commentators, are yet to put basic supply, demand, and fungibility together and realise that the REASON there is no shortage for Tesoro Corp etc, is BECAUSE they're paying $90+/bbl, whereas in many places around the world where they can't afford $90/bbl there are increasingly severe shortages.
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Jaymax (cornucomer-doomopian)
I don't understand this business about speculators driving up the price. It would seem that that could only function for a short time. If there was really plenty of supply people would search around for a cheaper price or they might cut back on usage a bit. After a while the speculators would start dumping their unsold stocks causing a temporary glut and a price collapse.
With full regard for peak oil, CO2 emissions and climate change, UK “Transport Secretary Ruth Kelly has set out proposals for a third runway and a sixth terminal at Heathrow” airport, London, by 2020. “The new runway would … allow the airport to handle about 700,000 take-offs and landings a year. Currently there are 480,000 a year.”
http://news.bbc.co.uk/1/hi/uk_politics/7106524.stm
It would also create plenty of space to park redundant aircraft, but presumably that’s not the intention.
I recently had the experience of trying the alternative to flying: To move my wife and dog to Europe, I booked passage on the Queen Mary 2, as the ship features a pet kennel which you can visit during the voyage.
I don't have the math for cross-Atlantic per passenger fuel consumption by ship vs. air, but let me tell you, it was a great way to travel. I'd do it again in a minute.
Yeah, but the government is going to set up a hotline for householders to ask how to reduce their carbon emissions... that'll help ;)
On a related note, I wasn't going to replace my slow old set top box, but my ISP sent me a new one for free. It uses more power than my old one, plus requires an extra two power adaptors, adding to the phantom load.
Getting consumers to use less energy is going to be tough if companies send out free upgrades like this.
Does your new set-top box allow the unwashed masses to consume more, leading to more expected profits for the ISP in some way? Is it bigger, better, faster, more?
If so, there's the reason as to why you got it.
It's almost as if getting enough consumers to use less energy will be next to impossible.
Unfortunately I agree. Despite public expressions of support for action, nothing will happen until they are forced to act, by legislation or high prices, whichever comes first.
They'll try to legislate against the high prices before the high consumption.
Ain't democracy triffic!
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Jaymax (cornucomer-doomopian)