President Bush Questions Saudi Ability to Raise Oil Supply
Posted by Gail the Actuary on January 17, 2008 - 10:45am
Last night, on ABC's Nightline, Terry Moran interviewed President Bush in Riyadh, Saudi Arabia, during his trip to the Middle East. When discussing what President Bush might say to the King of Saudi Arabia to lower oil prices, George Bush said:
If they don't have a lot of additional oil to put on the market, it is hard to ask somebody to do something they may not be able to do.
If Saudi Arabia doesn't have a much additional oil to put on the market, the veracity of what Saudi Arabia has been saying about extra capacity is brought into question. More importantly, it starts raising questions about Saudi Arabia's true long-term oil production capability. Can Saudi Arabia really ramp up oil production in the future? Are the high reserves posted by Saudi Arabia and other Middle-Eastern countries really indicative of high future production capability?
The interview with George W. Bush can be seen at this link. The above quote is about 1:55 into the interview.
This is a link to a Press Release we did with respect to this story. Feel free to link to it in your Blogs.
Interview
Terry Moran's interview with George Bush starts by asking, "What can you say to the king here to get those high oil prices down?" George Bush answers "If it is possible, your majesty, consider what high prices is doing to one of your largest customers . . ." (Emphasis added)
If it weren't for the blockquote in the introduction, I don't think I would have noticed the "if it is possible" introduction to this response. Its existence seems to further point to a question of whether an increase in Saudi oil production is really possible.
Moran then asks whether Americans might expect a tougher approach, one in which we essentially say, "you owe us" for all we have done for you. Bush then responds with his statement, "If they don't have a lot of additional oil to put on the market, it is hard to ask somebody to do something they may not be able to do."
Dependence of Official World Oil Production Forecasts on Future OPEC Oil Production
One would think that future oil production forecasts by the US Energy Information Administration (EIA) and the International Information Agency (IEA) would based on something fairly solid - perhaps a detailed analysis of reservoir capabilities, or at least some type of audited reserve estimates of the different countries.
Unfortunately, future oil production forecasts by these organizations are really forecasts of how much oil the world is likely to need, not how much can be pulled from the ground. The assumption is made that somehow OPEC will be able to cover any shortfall. The International Energy Association determines how much will be needed in total, then assigns the remainder to OPEC as a Call on OPEC.
The EIA used to use a similar approach, but now has modified it a bit, to include a new exogenous oil supply model, Generate World Oil Balances (GWOB). Even with the incorporation of this model, the result is very similar to IEA's "Call on OPEC". We read in EIA's 2007 Annual Energy Outlook's "Key Assumptions":
OPEC oil production is assumed to increase throughout the reference case forecast, making OPEC the primary source for satisfying the worldwide increase in oil consumption expected over the forecast period (Figure 3). OPEC is assumed to be the source of additional production because its member nations hold a major portion of the world’s total reserves—exceeding 902 billion barrels, over 70 percent of the world’s estimated total, at the end of 2006. The reference case values for OPEC production are shown in Figure 3.
The problem with the above assumption is that OPEC's reserves are not audited. In fact, OPEC's reserves are seriously in question. If what President Bush is saying is true - that Saudi Arabia really can't increase production much -- President Bush's statement should start to raise questions about the reasonableness of future world oil production estimates by EIA and IEA. Without the ability to "call on OPEC", demand quickly outpaces supply. Peak oil in the next few years is likely as well, if we cannot rely on the Middle-East to ramp up production.
George Bush is not alone in mentioning oil supply problems.
If George Bush were the only one making statements about oil production problems, one might attribute his statement to a misunderstanding, or a slip of the tongue. We find, however, that the Wall Street Journal quoted Alan Greenspan on December 15, 2007, as saying that global oil supply peaked earlier and lower than previously contemplated. Jeff Rubin, chief economist of CIBC World Markets, was quoted by the Toronto Star as saying that he thinks peak oil is here. The Economist, in a recent edition writes that Christophe de Margerie, the boss of Total, thinks that the world's oil production may be nearing its peak.
It almost begins to sound as if peak oil is so widely known and acknowledged that George Bush has a hard time not mentioning one of the related issues--the inability of Saudi Arabia to raise production. It is just such a normal part of conversation and thinking, that it slips into a major interview on ABC's Nightline. I wonder what we will hear next?
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What I found interesting is that as best that I can tell, no one in the MSM is reporting this comment.
Of course, I have, on occasion, expressed my opinion on this subject:
Texas and the Lower 48 as a Model for Saudi Arabia and the World (May, 2006)
http://www.energybulletin.net/16459.html
The following graph, updated with 2006 and 2007 to date data, is from the above paper, which used data through 2005.
I have acknowledged that, if 2005 does turn out to be the final Saudi peak, there was some degree of luck involved when Khebab and I posted this paper.
Uncanny.
Ah, the classic "How to lie with statistics" chart. You can make any trend look like any other by manipulating the scales of the chart, to create appearance of a correlation, which is what you have done. It's total junk statistics, and completely meaningless. You lose a lot of credibility by using hoary old tricks like this.
I guess you can always impress some of the more gullible in the audience with charts like this. You should be in marketing!
As I asked you the first time you delivered your ad hominem attack on Khebab and me, precisely how have we provided misleading data?
The original chart was done in early 2006 using Saudi data through 2005, and posted online in the Energy Bulletin.
All that we have done is to add the 2006 and 2007 to date Saudi data to a chart that was done almost two years ago.
So, precisely how have we misled anyone?
BTW, the 2006 chart was just a graphical representation of a point I first made in January, 2006:
Hubbert Linearization Analysis of the Top Three Net Oil Exporters
Posted by Prof. Goose on January 27, 2006
[ED: This is a guest post by westexas...]
i dont see your presentation as misleading at all. the chart is clearly labled top and bottom, left and right. the scales are shifted, but the scales are the same, i.e. 1yr=1yr and 1bpd=1bpd. the magnitude of the quarterly production numbers are not what is important,their relationship to each other is as shown.
that demonstrates us peak was about 1/3 ksa's apparent peak and occures about 33 years earlier.
and as always, the standard disclaimer applies, past performance is no guarantee of future returns.
yes, bobcousins, exactly how is this chart misleading ?
RECESSION!
America is falling apart, it's time to pay for greed, foolishness and aggression.
My prediction is that the USA will eventually divide into two or three smaller countries. Of course, after a period of unrest, riots and perhaps a civil war (Red vs. Blue states).
The two states that have the size, geography and the history to secede would be Texas and California (with or without a few neighbouring states). There is also some sentiment for secession in Vermont, but it is questionable whether DC would let that happen so close by.
Another, more long-term, view says that the fault lines between the nine nations will reassert themselves as the centralizing power of the US wanes.
A little dust up in the 1860s established the precedent that states cannot leave the union unilaterally.
However, there is a little-known (and intentionally not discussed) pathway within the constitution itself to dissolve the union and allow the 50 states to each go their own way.
Article 5 includes a provision that allows 2/3 of the state legislatures to call a constitutional convention; neither the US congress, nor the Prez, nor the Supremes would have any say in this and would be powerless to stop it.
Once a constitutional convention is called, anything is fair game in terms of the amendments that can be proposed. They could even propose an amendment that would effecively terminate the constitution and dissolve the union.
Once such an amendment was proposed to the states, if it were ratified by 3/4 of the states it would become effective. Again, all three branches of the US government are completely bypassed, and are completely powerless to stop it.
There is actually a very good legal precedent for this: the constitutional convention that drafted the present constitution. It was called for the purpose of amending the old Articles of Confederation. It instead proposed scrapping the old Articles and doing something completely different. This is exactly why the delegates to that convention wrote Article 5 the way they did - they wanted to leave open the possibility of doing it again.
Hardly anyone knows about this. It is deliberately not taught in the schools or mentioned in the MSM or by any government official, for obvious reasons. State governors and state legislators probably do know it, though. Should the federal government ever get to the point that it is nothing but dead weight and more trouble than it is worth, you might be surprised how quickly this could all happen. The USA could be dissolved just about as quickly, and just about as surprisingly, as the USSR was.
Saudi Arabia planned to reach peak capacity in 2009. How long they might hold that plateau, is an unknown variable. The UAE was forecast to reach peak production by 2012. Iraq has much potential to grow production if they can form a stable government. Iran boasted of great reserves. Before Bakhtiari (retired Iranian National Oil Company manager) died he indicated Iran had proven reserves of about 40 billion barrels. If Iran will get santions lifted they might prove more oil. Kuwait is unlikely to produce more than four million barrels a day as they decided they should not push production in Burgan to higher levels. Algeria and Libya have seen declining reserves in large older generation fields. They have discovered more oil on previously unexplored blocks. Nigeria and Angola have potential to increase production for some time to come. Indonesia is seeing more E&P interest with higher oil prices and might be able to continue to produce for years to come, although they may yet need to import oil. Some OPEC members' internal oil consumption has been growing more rapidly than OECD consumption according to reports I have read. OPEC production neared 32 million barrels. If they grow consumption by as little as 3% annually, then they will need almost a million barrels a year of oil production increases for themselves alone. ASPO indicated that many of the newer fields being brought into production will deplete out in ten years. There is a constant need to replace production. A common error some made was assuming that any new oil project would increase oil supply while ignoring the depletion within exisiting projects. Many of the new projects scheduled for completion will be needed to replace the depletion of exisiting fields. Because natural gas liquids production is not regulated by OPEC, some OPEC countries were increasing their liquids production. The tendancy for some groups to be switching from gasoline to compressed natural gas cars decreased some of the demand for oil. A switch to smaller cars in America will be inevitable if costs are to be contained.
My calculation of 3% growth of OPEC oil consumption neglected the fact that much of OPEC's oil was exported. This was an error. U.S. net oil/product imports increased this week compared to this week last year (1.3% -- EIA) in spite of record high oil prices and a rumored economic slowdown.
Saudi Arabia's ability to increase production? In late 2006 oil prices dropped to about 60 dollars a barrel and they found themselves unable to increase production, but willing to decrease it. Some of the supply issue was political, some was project engineering and geology.
In his February 2005 report Hirsch reported that the median age for the US fleet was 16 years. It is hard to see in a recession how the fleet is going to be replaced any quicker. Much of it may be scrapped, but that is a different issue. Car pooling, minibus point to point services (like in Africa and the Caribbean), reduced and shorter trips; and more use of public transport will most likely take up some of the slack. The recession and or increasing cost of oil products will also result in fewer journeys.
Anyway gasoline is more of a discretionary fuel.
The big issue is going to be diesel and Aeroplane A-1 (Jet fuel). These are very similar blends. Diesel is a vital fuel while jetting around is more discretionary. When shortages become apparent my guess is that the military, agriculture and haulage will get first crack at the available supplies while air travel will get very expensive.
Though currently, it is outlying areas in the U.S. that seem to be suffering sporadic diesel problems.
Interestingly, gasoline appears ever less 'discretionary' in the eyes of those using it. At least if you see how declining expenditures in other discretionary areas continue, while money continues to be poured into the gas tank.
Even more interestingly, Europe has apparently turned its back on 'regular' gasoline (talking about details concerning octane, the ways to measure it, etc. is not important here) - in part, according to the radio news a couple of days ago, because the price for it at Rotterdam has been steadily increasing. As have European exports to America.
If you will, Europe is offsetting some of the increase in fuel prices through a strengthening euro combined with a bit of trading of 'unwanted' gasoline at a nice mark-up - however, since Europe is very much a diesel market compared to the U.S., I don't have any idea how much of for how long Americans can afford to pay euro prices for diesel when competition grows fiercer. I do know that the dollar doesn't go as far as it used to, though.
Fast forward five years:
You forgot to mention the part about national oil companies being inefficient, and if only they would let Exxon-Mobile-BP-Chevron-Total run their oil production, we'll easily have enough oil for 100, or 500, or 1,000 years.
"And if only shortsighted democrats and the environmental fanatics had let us drill in ANWR and off our coastlines, the US could once again regained its energy independence..."
I saw that one at the intrade forum recently. One guy seriously believed that the reason oil companies aren't finding all the giant oil fields on the US continental shelf is that their lobbyists are so impotent compared to the "powerful environmental lobby"!
Yeah, and it matters not one jot which of the candidates gets elected, at least among the apparent leaders. Clinton's going to scare the Saudis with ethanol; Obama's going to make nice-nice and sweet-talk them; the R's are going to invent negative elasticity and unleash the market in a magical way that drops price with increasing demand; so Santa Claus will be selling gasoline at $1/gallon by Christmas 2009.
Oh, and since they all had to go through Iowa, the winner will also open portals to half a dozen more North Americas where they will have corn grown to make ethanol. Check Isaac Asimov's short story, "Living Space" for details.
The festivities which erupt once it becomes clear that the price trendline has not improved should prove interesting. Government being what it is, expect it to impose $25/gallon worth of time-wasting inconvenience in order to fail at lowering the price by 25 cents. The havoc that wreaks will serve as a convenient excuse and cover for having no means to cope with the subprime mess and all its ramifications - above all, the politically-incorrect ramification, assiduously denied since about 1970, that persons who consume stuff must eventually produce something in exchange.
You're a really sharp guy, Nate - don't tell me you think Bush will still be in office!
Or do I misunderestimate you?
"Give my chance a plan to work."
"More and more of our imports come from overseas"
You're a really sharp guy, Nate - don't tell me you think Bush will still be in office!
Or do I misunderestimate you?
"Give my chance a plan to work."
As much as I hate to say it, it looks like George W Bush has accidentally stumbled onto the truth. If what he says is true (which I believe to be the case ie KSA not being able to increase oil production) then it calls into question what the Saudi's have been saying regarding their ability to supply all that additional oil. I can easily imagine King Abdullah relaxing at home, lying on his majestic, king size bed and watching TV, sucking back a brewski and then spitting out in shock and horror as he watches that putz W inadverdantly announce to the world that perhaps all that oil that Saudi Arabia says it can produce may not be the case. In short, it's one thing if I or any of the far more learned and respected individuals who post on this site say the Saudi's are lying. It's quite another when the President of the United States (even if he is a patent moron) says it in a televised interview.
SubKommander Dred
Doubt that stumble, Sub. Dred, it is more likely he is distancing himself from knowledge of Saudi oil reserves. I think that he would have full knowledge about what is happening with oil in Saudi Arabia, the US has been involved in Saudi security since the 2nd world war. President Bush I imagine would rather appear to be just a hapless bystander than a complicit insider to peak oil.
I think we might expect more of these cute little 'stumbles'. When you are walking down the street sometime with a pal kick the curb and break into a stumble it looks pretty real and any idiot can do it:)
Looks like Matthew Simmons was accurate in his assessment of Saudi oil reserves in his book, 'Twilight in the Desert', as much as many of his critics wanted to dismiss them.
If you read his book, not only does he build an argument for the Saudi's being close to peak or at peak oil production, but his in depth analysis with charts, water injection history, percentages and other researched solid numbers leaves one very certain of his assertions. I don't know how anyone could read that book and not feel Simmons had a clear grasp of their situation.
Fact is Saudi oil production (extraction) has been declining recently, and that's really saying something considering how much investment they've put into drilling in the past few years.
Fact is, we can produce trillions of amperes of electrical energy from, coal, natural gas, and renewables, but the days of cheap texas tee to energize transport are numbered. Hold onto your 10 gallon hats, cause we're all about to come to know the true meaning of Peak Oil!
Looks like Matt Simmonds was correct In that he was the only one to add everything up.( The King has no clothes)If you read the following previously linked article he talks about Saudi Enginneers not even knowing the whole picture.
http://www.financialsense.com/editorials/casey/2008/0109.html
Once Saudi production starts terminal decline there will be no way of covering up the \July 2006 peak C+C+NGL
It is not fact, but an untested assumption. We cannot continue to burn coal in unlimited quantities. Nature will stop us by throwing some nasty climate change events at us. In Europe, there is again practically no winter. A warm zero degree in Moscow where it should be -10 by now. Arctic summer sea ice extent was at record lows in 2007. Many cold snaps in areas which should be warmer demonstrate we have increased heat exchange between the equator and the polar caps. We are doing a live experiment with the world's climate. Peak oil AND global warming as a DOUBLE challenge is not yet well understood
Not to mention that US coal production has already peaked in btu terms and world coal production will peak around 2022.
Peak Oil gets little notice in the MSM-Peak Coal doesn't even exist there (yet).
Gail, what you seem to be suggesting -- that the "elites" are fully peak oil aware, but hiding it from the masses -- is something I have been giving a lot of thought to.
It certainly casts the Iraq war in a different light, doesn't it? And the bipartisan complicity in indefinite occupation of Iraq, belligerence against Iran, etc?
It seems fairly certain that Bush and Cheney have been aware of peak oil for quite some time. Both Bush and Cheney worked in the oil industry prior to being elected. Cheney gave speeches prior to his election that showed he understood the concept of oil depletion. Cheney was also head of the secretive 2001 Energy Task Force, that apparently received considerable input from industry.
There have been a number of peak oil reports commissioned by the Federal Government. Bush and Cheney certainly would have access to these. Two of these reports appeared back in 2005. One of these was PEAKING OF WORLD OIL PRODUCTION: IMPACTS, MITIGATION, & RISK MANAGEMENT (also called the "Hirsch Report") for the Department of Energy. The other was Energy Trends and Their Implications for US Army Installations, prepared for the US Army.
Full text of Dick Cheney's speech at the Institute of Petroleum Autumn lunch, 1999
by Dick Cheney
http://www.energybulletin.net/559.html
Incidentally, Matthew Simmons participated in Dick Cheney's energy task force and this study must have been a major input:
The world's giant oil fields
http://www.simmonsco-intl.com/files/giantoilfields.pdf
That lead him to the problem of aging Saudi oil fields which he covered in his book:
http://www.twilightinthedesert.com/
Gail...I bring this up only because I get hounded about the PPT being a conspiracy theory, but what you are saying also sounds like a conspiracy. Some have asked, "If true, how could so many people have kept this a secret for so long?"
I then ask you the same. I think it is possible, but there are those here at TOD that do not think so.
If people aren't talking about something they know about, but that might cause panic if others knew about, I don't really consider it a conspiracy. It is just acting in one's own best interests.
Yes, there is no peak-oil hiding conspiracy, there never was.
Peak-oil is hidden on plain sight, where most people can't see it because of very few "authorities" that say it doesn't exist. Those "autorities" are on a so small number that it doesn't need a conspiracy to gather them, just coincidence of interest.
If anything is remarcable in the way people don't perceive peak-oil is their tendency of beliving what other people say, ignoring what they see.
The WSJ is becoming more and more peak oil aware by the day.
Today's article about CERA's 4.5% average decline rate is openly skeptical of what CERA has to say. Even a few months ago, they would have taken CERA's press release and printed it. There is also a video called "Study Shows Oil Production Down", further expanding on CERA's report.
Drumbeat discusses this article further.
double post
I applaud the WSJ, tepidly, for growing a bit of a pair. If they keep this up, they may be ready for middle school soon. They are right to question the findings, not least of which because CERA, as well-documented here on TOD, is very poor at prognosticating. It's not really their job, however, to share the truth, but to satisfy their clients. Anything is possible, right? So, they aren't lying if they say this stuff. But the numbers don't lie.
My spreadsheet tells me that at 2% rise in demand we'll need between 104mb/d and 106mb/d to meed new demand. A 4.5% depletion rate means we need to cover about 31mb/d in declines for a total of around 50mb/d. According to data I've seen recently (linked on my blog), we're finding reserves of about 8 billion a year. What does 8b in reserves equate to in production? I'm thinking it's a small percentage of 50mb/d!
So, CERA would have us believe a trend 25 years in the making is suddenly going to reverse itself and we'll start finding and producing an additional 5mb/d per year between now and 2017?
I call bull hockey.
Let's look at the numbers: KSA has MAYBE 3.5mb/d (al Huseini). Iraq MAYBE another 3.5mb/d (generally accepted). Tar sands in Canada another 2-3mb/d by that date (Generally accepted numbers). Nigeria, et al.? A couple million (my guess from news articles)? Where else is there any significant new production in the next ten years other than little dribbles here and there, such as Tupi? Let's add another 3mb/d just to be optimistic.
Maxing these numbers out I get 15mb/d by 2017. Where's the other 35mb/d?
Now, I'm a layman who knows what little I know largely due to stumbling upon TOD and EB, so everyone feel free to correct my numbers, but don't thin they are far off.
CERA is either blowing smoke, drinking the KoolAid, playing propaganda mouthpiece or knows something the rest of us don't. I'm betting it's not 2 or 4.
Cheers
It may also be that people don't WANT to see it since the ramifications could be catastrophic.
Hi Dragonfly,
Yes, the psychological factors enter in, is my experience. And "want" is such an elusive term, especially when it pertains to "don't want" AKA "denial".
I, too, wonder about all these guys. It's kind of strange, really. Sometimes I think Cheney is on the same page as, say, our dear, road-friendly Chimp. Only Cheney is convinced that he has to save the world, and that he knows exactly the way to do it. For now, anyway.
At other times, such as this evening (experience shared on DB)...I'm reminded that it's about impossible to tell how people understand things, even when they do. (Or might, or seem to, or may logically, but not emotionally...etc.) We all know how that is.
"One does what one wants, but one cannot want what one wants." Einstein.
This sounds like Dubya has some information (probably from NSA, CIA - not EIA) that casts some doubt on KSA assertions they can goose production to 12+M bbl/d and sustain that rate. The way he says it may be a calculated challenge to their oil-production manhood to compel them to put up or shut up.
Of course KSA does not make such a decision in isolation; all the talk from OPEC so far is they're expecting a recession (at least) to hit the U.S. and possibly go global, and they most definitely do NOT want to repeat their financially catastrophic experience of the 1980s.
My guess is that KSA will ignore Bush, play it cool, and keep production approximately flat until it's clear where the world economy is going. They will not lose any friends with this policy. Bush's Mideast trip looks like a too-late joke to try to prop up his sagging legacy and the whole Muslim world is snickering or ignoring him.
Dick Lawrence
ASPO-USA
Dick,
Flat production = declining net exports. At their current rate of increase in consumption, the Saudis need to increase their production at about 1% to 2% per year, just to maintain flat net exports.
WT: I can't remember if you and Khebab factored this into your estimates, but it is most likely (as estimated by the EIA) that a dramatically increasing % of those declining exports will be heading to Chindia, not the USA.
I don't think he needs to get his information from the NSA or CIA. I think he will know before the spooks. Prince Bandar isn't called "Bandar Bush" for nothing. I haven't figured out if the Bush family owns the Saudis, or the Saudis own the Bushes, but I do not believe that they are not in direct, regular, and frank communications.
Sure he has more information...he is friends with the House of Saud...is this news?
Over cocktails, they discuss these things as FRIENDS.
Sorry, this is not a CIA, NSA thing. These people are buddies to the BUSH family. Not underground, just fact.
This article is new on Common Dreams today:
http://www.commondreams.org/archive/2008/01/16/6404/
"How the Pentagon Planted a False Hormuz Story."
I urge TODers to read it entirely. I post it here because I believe that the effort to widen the resource war into Iran is based upon just the kind of geological reality that we have run up against in spite of the public denials on the part of our government.
Most Americans will still believe the fabrication that menacing Iranian boats threatened the Us Navy in the Gulf on the eve of GWB's Middle East tour, and this will remain part of the drumbeat for wider war.
The Democrats will most likely refuse to go along with the facts regarding this matter, and the media will refuse to evaluate itself once again until years later. Only this time the media will congratulate itself for a propaganda job well done.
GWB's comments related to Saudi production will weave into the message that we are being victimized by evil Islamofascists who will not give us their oil at a fair price, and so we must take charge and divvy up the petroleum in a fair and just way for the whole world.
I don't know whether to laugh or cry. Probaby Cry.
With all of this as a backdrop, I heard a leading Pres candidate the Mittster say in Michigan, (paraphrasing)
"I plan to make the US car manufactures competitive again"
"Under My leadership, I want to see to it that America is NOT dependant on Foriegn oil"
Folks, THAT is the reality of our National preparations and a good indication of how our Gov. will be there to "Help" us. We will soon all be post KatRita New Orleanians.
Good luck everyone, Individual/Community planning is the only thing we have.
We are Leaderless, and Rudderless and the "future's brightness" has dimmed to the point where you "Don't Need Shades" any longer.
And while speaking of Saudi Arabia, Give another read to something that might be prophetic about THIS June. It will make you laugh. Chip is quite funny(he's the one who wrote Ghawar Is Dying)
Remember he wrote this a couple of years ago.
Welcome to the DIM Ages
Sad to say that all these unrealistic calls for ending our foreign oil dependency will in fact be satisfied. We will no longer depend on foreign oil, simply because they won't send us much if any at all, after they don't have sufficient excess to export.
If you have masochistic tendencies, you might want to read "The Fourth Turning" which predicts World War or Civil War in the USA circa 2020 as a culmination of the crisis period we are now entering, based on historical patterns and generational characteristics. Seems fairly evident to me.
June 14th is my birthday not cool man...
Pick another day please ;-)
Samsara: I heard the haircut complaining about CAFE standards. The rethug candidates are a joke, but overall the whole bunch (Dem and Rethug) are either blind without a cane, purchased or possibly a combo of the two. Just today the US guv is talking about some sort of "stimulus" injection-no one points out that possibly the gigantic investment in Wind and Solar power that will be necessary is not going to get going all by itself. Not to mention rail. Look out for yourselves, because the captains of the Titanic sure as heck aren't.
I recall an article posted on this site a few month ago that looked at what happened to exports of an exporting country once they reached their country peak. The conclusion was that it took 9 years for exports to be reduced to zero.
We already know that Mexico, the third largest exporter to the USA is in significant production decline. Now Bush is essentially telling us Saudi production has hit the wall. So the button has been pushed on the 9 year clock clearly for Mexico and probably for Saudi.
And the USA imports 60% of what it uses with two of our three biggest suppliers now facing the total end of their exporting ability within a decade.
Holy crap!
Add this the declining US domestic production and the relentless 3.5% annual deterioration on EROEI and the numbers are more than alarming. Imagine only enough oil in the USA in a mere 13 to 18 years to fuel 1/4 of what it does now.
I can imagine almost total economic collapse, starvation, inadequate shelter (no heat, water, sewerage or garbage collection), and social unrest to the point of civil war, and I am not really all that imaginative.
Once an exporting country peaks, the net export decline rate is a function of consumption as a percentage of production at peak, the production decline rate and the rate of change in consumption.
The mathematical Export Land Model (ELM) went to zero net exports in 9 years, in the same time frame as Indonesia (8 years) and the UK (7 years). The ELM and these two countries had relatively high consumption relative to production, about 50%. Mexico is in the same "red zone" as the UK and Indonesia. I expect to see Mexico approaching zero net exports by 2014.
Our middle case is that Saudi Arabia will approach zero net exports around 2031:
http://www.energybulletin.net/38948.html
Our Saudi comments:
Thanks for posting the reference. I remembered the 9 years, but not the other details; not bad considering my age and increasingly poor memory.
It was an excellent article, which made me realize that the USA (and other nations with high imports) would be the first to fall rather than the last man standing. I have played with various peak oil dates, various decline rates, and varying number of years for exports to cease, and whatever the combination, the result is never good.
A decade or two and we are, as Samsara optimistically describes, in the DIM ages.
This was on the IEA OMR for December 2007:
Some of this increase (500kb/day) must be from Saudi. Maybe they really do still have swing capacity?
It seems (if the IEA is right) that the May 2005 and July 2006 peaks may have been passed. I am however somewhat suspicious. I am wondering whether the IEA is massaging the figures in order to try and manipulate the markets. If there really was that much extra oil in the market the price would have dropped much more than just down to $90.
Up in NW Oregon and SW Washington, we have just experienced the largest, or perhaps second largest storm in (white man's) history. There is a lot of damage, and it is interesting to see the response of FEMA to this situation, compared with what I know of the Katrina devastation.
I don't mean to compare the magnitudes of the two events, only the response. It is clear to me that these are being regarded, at some level, as natural experiments to which FEMA will fine-tune the response. It occurs to me that FEMA is far from the bumbling incompetence that has been portrayed -- quite the contrary, they are building a vast network of control points, and developing strategies for different eventualities as the energy budget is cut and the economy collapses.
I doubt that chaos is in our future. We might look like former East Germany, or perhaps Singapore -- in any case, it will be a strictly-controlled society, basic needs will be attended to -- the Katrina experiment is designed to explore how little they can provide without provoking revolt -- but luxuries will belong to the tiny upper class. "Freedom" will somehow remain the meme -- people will still be able to choose between Coke and Pepsi-- but libertywill be lost. That will be no great catastrophe, we weren't using our civil liberties anyway.
A useful mental model I've been following is suggested in Seven Tomorrows by Paul Hawken et al. They outlined seven future scenarios (they were doing it for the 1980s, but I see them really coming into relevance right about now).
In the late 1970s (when the book was published), the scenario that we seemed to be on track to follow was "Mature Calm". We were struggling with energy and other resource shortages, but were starting down the path toward serious energy conservation and development of renewables. This was the America of Jimmy Carter, "Soft Energy Paths", "Mother Earth News", "The Whole Earth Catalog", etc.
They had two other scenarios that suggest what would have happened if the late 70s Evangelical revival had taken a different, much more "green", humane, and benign path, and what would have happened if we continued on the "Mature Calm" pathway but things still got worse anyway (i.e., PO eventually happened, but with us already having become more energy efficient and with greater investments in renewables already in place). This last one - "Living Within Our Means" is the scenario that many of us here are hoping for. Unfortunately, because of decisions not made and paths not taken over the past few decades, we're unlikely to be able to get there from here now.
What I think happened in the 1980s with Reagan is that the US tried to change course out of the "Mature Calm" pathway and back on to the "Official Future" pathway. Unfortunately, it was not sustainable, and thus guaranteed that not only would we not get "Mature Calm", we also wouldn't even be able to get "Living Within Our Means".
What we're getting instead is a progression down the other set of scenarios.
First we're getting "The Center Holds". This is Dick Cheney's America. This is what you get when you strive for the "Official Future" and the world doesn't cooperate, when you fall short of resources and people don't do what you want. You begin to bring in increasingly authoritarian controls (sound familiar), and redouble your efforts to get the resources to sustain BAU (sound familiar). What you have just reported wrt FEMA fits right in to the "Center Holds" scenario. I expect more of this kind of stuff for a little while, yet.
Of course, we all know this won't work. The resources will continue to deplete, the economy will decline, the world will get ugly, things won't work. We're moving past "Peak Everything". That describes "Chronic Breakdown", where things keep getting worse and worse, and the unsolved problems pile up. The crises start coming faster than FEMA can handle them. The numbers of discontent people start adding up faster than the databases and telecom intercepts and CCTV monitors and RFID tags can keep track of them. The bridges collapse faster than they can be repaired. This is our immediate future, staring us in the face right now.
We also know that even this is likely to be just a transitional phase. Things are likely to get much worse. The economy cannot be sustained at more than a fraction of the present level, and maybe not the population either. Maybe we can avoid total collapse and manage a soft landing to a permanently lower level, maybe not. Either way, this matches up pretty closely to their "Beginnings of Sorrow" scenario. This is our long term future. It didn't have to be, but due to the decisions made over the past three decades, the more benign "Living Within Our Means" probably no longer can be our future.
I can just imagine a USA with 25% of our present oil - but my imagining doesn't leave any room for any private automobiles on the roads. Motor fuel rationing will take bigger and bigger slices of the pie for military, government, freight, and mass transport; the slice for individual motorists will keep shrinking until it is completely gone. Even total electric NEVs are pretty iffy - I suspect that the few that will be out there will eventually all be requisitioned by one unit of government or another to get essential stuff done. Feet, bicycles, and whatever minimal and totally inadequate mass transit that localities can manage to cobble together: that's the future USA of my realistic imagination.
Visit any 3rd world country, and you can get a good advanced look in 3D & living color at exactly what the USA will be like.
I'd have a horse and buggy. I'm sure all my nieghbors would do the same.
Unfortunately, even having a horse and buggy takes quite a bit of work and planning. You need the horse, and food and medical care for the horse. You also need the buggy. It helps if you have a stable enough environment that no one comes and steals them.
That's the one good thing about walking and about bicycles. They are not going to steal your feet, and you can leave your shoes under the bed at night. The bicycle can be brought inside, too (and inside of various business establishments if it gets to the point where even a good lock and chain are not enough).
"stable"
Very nice pun!!
Despite my name, I live on a ten acre farmette in a very rural South Central Illinois county. Most of my neighbors either have horses, mules, or both. A few acres of my land is devoted to hay production . The largest Amish community in Illinois is thirty miles north of me. So when cars are no longer functional I don’t think it is too much of a stretch that I can get a horse, and with my mechanical abilities, and that I am a master cabinetmaker/carpenter, building a wagon shouldn’t be that difficult.
Anybody having problems with this site today? Really slow and giving me problems.
It's kind of old news to me, I was convinced that Saudi Arabia capacity was in question the day Bush decided to take control of Iraq oil. Five years later, now that Saudi Arabia giant fields are showing signs of advanced depletion, we are seeing Iraq production coming back to its old self under American control of course. I don't believe in coincidence in geopolitics!
Khebab
nice to hear your common sense - we all know about you mathematical expertise.
i felt since 7/05 ; GW & the King walking holding hands at the crawford ranch that something big was up-probably no more production available & bush's poll nos. plummeting at the time.
Gail thanks for getting this out.GW was kind of testy w/ moran- i think they had a tough Q/A earlier this year so GW was ready to 'volley' back. As long as MSM doesn't focus on this [ as moran didn't w/ a F/U question ,like 'saudi's say ' ...' &this contradicts .....]no big deal.
WT thanks for catching this too.
i'm suprised its taken so long to join the dots.
saudi arabia has been pumping at or near capacity for about 25 years. meanwhile iraq with the second largest reserves has been constrained by war, sanctions and poor infrastructure for about the same period of time.
so as saudi declines in output iraq under saddam or his sons becomes the number one producer and more importantly the nation that holds the fate of the american dollar which is linked to the oil price.
a scenario america was not going to allow.
Congressman Wexler brought up Kucinich's House Resolution 333 yesterday to impeach Cheney for the lies he told justifying the invasion and occupation of Iraq... http://www.youtube.com/watch?v=3VRRtTA41hg.
You can still add your name at http://www.wexlerwantshearings.com/.
Make sure to read this one.
You will conclude I believe that he should be impeached.
Cheney's Law
http://www.pbs.org/wgbh/pages/frontline/cheney/etc/synopsis.html
Sorry... here's the permanent link to H. Res. 333.
Yes, I've promoted Cheney's Law since it's first airing in October. I highly recommend seeing all of the rock hard evidence presented in The Dark Side as well.
"After 9/11, Vice President Richard Cheney seized the initiative. He pushed to expand executive power, transform America's intelligence agencies and bring the war on terror to Iraq. But first he had to take on George Tenet's CIA for control over intelligence."
Wexler: Cheney impeachment ‘far stronger than Watergate.
It has always been obvious that President George W. Bush and Dick Cheney
were fully aware of oil depletion, and with their backgrounds how could
it be otherwise.
In securing Iraq's oil reserves they have acted in America's best interests, and obtained a valuable breathing space of possibly a decade
before the supply situation becomes critical.
Tony Blair is a cautious politician and they must have put forward very
convincing evidence (no doubt confirmed by the UK oil companies), in
order to persuade him to risk his career by joining in the invasion of
Iraq, in the face of bitter opposition by his own leftist party.
Instead of criticising and talking of impeachment, we should be grateful.
Bull.
What makes the supply situation critical is the way we live. The far right capitalists refuse to change our consumption patterns (but will exterminate our liberties) because if we had to live within our means again, we would begin again to question the distribution of wealth, the competence of our owners, and the purpose of our labor. Debt-based affluence was designed to make people feel comfortable and stop thinking. That caused excess consumption of fuel. So we did it to ourselves.
Our invasion, besides being a war crime, is responsible for the additional deaths of hundreds of thousands of Iraqis, and for driving millions of the survivors out of their homes. Do you believe that this is better than being honest with the American citizenry and calling for conservation? Do you have so little faith in the marketplace - the essence of Bush's supporters' religion - that you think America can't survive $8 a gallon gas?
This war was not in your best interests or mine, because it was meant to steal what ordinary Americans can no longer earn due to the reality of globalization. The profits of that globalization go to a few Americans, who buy your politicians and media and tell you what to believe. None of this fraud was sustainable for even 5 years.
And Mr. Toad, were you aware that, led by the United States of America, the world came to the verdict at the Nuremburg Trials that countries don't have the right to steal and enslave abroad to offset the misfortunes of their economies (which were actually caused by America's Great Depression)? No liebensraum or oil fields for Fascists. Therefore, none for us either. If you don't like it, join the Aryan Nations who don't hide their tribal aggression behind high-minded slogans. Just remember that without international law, the US is fair game too.
S390,
You can crystalize my thoughts perfectly. I wish I could boil it down as good as you.
Thank You. You hit it perfectly as you often do.
Respectfully
John
Right freeking onnnnnn!
This occasional injection of realism is what allows me to hang out here. Not that anyone cares about a hairy old troll.
I also say good on ya to alanfrombigeasy for his following post. (I think it needed to be posted at least 3 times if not more).
And your follow ups S390 we all need to remember what is happening big picture and how we got here in order to avoid repeat.
A SUPPER BIG CHEERS!!!
Absolute and Complete BS !!!
In securing Iraq's oil reserves they have acted in America's best interests, and obtained a valuable breathing space of possibly a decade,,,
Igniting a civil war taht will kill a million people, chasing 4 or 5million people out of their homes, destroying American crediability AND any sense of morality count for nothing, less than dust, I am sure in your calculation.
Well, for half the dollar cost of the Iraq War and less than 0.00001% the human cost), The USA coudl have cut consumption by MORE oil per day than Iraq produces, and be well on the way to reducing US Oil use by 25%. -62% reduction in US OIL in 30 years per Millennium Institute models.
Step One, for Less than half the Price of Iraq (Less Global Warming, AND something Americans could be proud of instead of profoundly ashamed
http://www.aspo-usa.com/index.php?option=com_content&task=view&id=168&It...
Best Hopes for sending Bush & Cheney to The Hague,
Alan
Absolute and Complete BS !!!
In securing Iraq's oil reserves they have acted in America's best interests, and obtained a valuable breathing space of possibly a decade,,,
Igniting a civil war taht will kill a million people, chasing 4 or 5million people out of their homes, destroying American crediability AND any sense of morality count for nothing, less than dust, I am sure in your calculation.
Well, for half the dollar cost of the Iraq War and less than 0.00001% the human cost), The USA coudl have cut consumption by MORE oil per day than Iraq produces, and be well on the way to reducing US Oil use by 25%. -62% reduction in US OIL in 30 years per Millennium Institute models.
Step One, for Less than half the Price of Iraq (Less Global Warming, AND something Americans could be proud of instead of profoundly ashamed
http://www.aspo-usa.com/index.php?option=com_content&task=view&id=168&It...
Best Hopes for sending Bush & Cheney to The Hague,
Alan
Absolute and Complete BS !!!
In securing Iraq's oil reserves they have acted in America's best interests, and obtained a valuable breathing space of possibly a decade...
Igniting a civil war that will kill a million+ people, chasing 4 or 5 million people out of their homes, destroying American credibility AND any sense of morality count for nothing, less than dust, I am sure in your calculation.
Well, for half the dollar cost of the Iraq War and less than 0.00001% the human cost, The USA could have cut consumption by MORE oil per day than Iraq produces, and be well on the way to reducing US Oil use by 25%. -62% reduction in US Oil consumption in 30 years per Millennium Institute models.
Step One, for Less than half the Price of Iraq and with Less Global Warming, AND something Americans could be proud of instead of profoundly ashamed
http://www.aspo-usa.com/index.php?option=com_content&task=view&id=168&It...
Best Hopes for sending Bush & Cheney to The Hague,
Alan
This may be America's big test. Do we the citizens judge our rulers by their respect for our liberties, or by their ability to maintain order at all costs?
The fishy thing about Watergate is that Nixon's crimes (besides his war crimes) were beginning to be understood before Watergate. His use of Federal agencies to intimidate dissenters was known. The economy was going bad, and the puppet state in Saigon was in a holding pattern after all we'd spent on it. Yet the man won an overwhelming victory in November 1972.
I think what killed Nixon was that he declared the Vietnam War over for the US in 1972. As long as he maintained an atmosphere of wartime fear and anxiety he could get away with murder. The euphoria of the herd that authority had won out over the counterculture and that the US hadn't yet "lost" in Vietnam got him that victory. But the instant he stood before the public as a peacetime president, they started to judge him for his past crimes.
I'll go further. The public hired Nixon in 1968 to wipe out the hippies and the anxiety caused by open dissent. All they wanted out of Vietnam was to hear that America hadn't "lost". He carried out the crimes they demanded, from Cambodia to Kent State to COINTELPRO. When they no longer needed him, they turned on him. A truly Machiavellian society.
And that's why Bush will not let the war in Iraq end. As long as it lasts, we think we need a tyrant. If we still had troops fighting in Vietnam in 1974, Nixon would not have been impeached. If we were out of Iraq now, Bush would be impeached.
Let's break the pattern and impeach a wartime president, or soon wartime presidents will be all we have.
This may be America's big test. Do we the citizens judge our rulers by their respect for our liberties, or by their ability to maintain order at all costs?
The fishy thing about Watergate is that Nixon's crimes (besides his war crimes) were beginning to be understood before Watergate. His use of Federal agencies to intimidate dissenters was known. The economy was going bad, and the puppet state in Saigon was in a holding pattern after all we'd spent on it. Yet the man won an overwhelming victory in November 1972.
I think what killed Nixon was that he declared the Vietnam War over for the US in 1972. As long as he maintained an atmosphere of wartime fear and anxiety he could get away with murder. The euphoria of the herd that authority had won out over the counterculture and that the US hadn't yet "lost" in Vietnam got him that victory. But the instant he stood before the public as a peacetime president, they started to judge him for his past crimes.
I'll go further. The public hired Nixon in 1968 to wipe out the hippies and the anxiety caused by open dissent. All they wanted out of Vietnam was to hear that America hadn't "lost". He carried out the crimes they demanded, from Cambodia to Kent State to COINTELPRO. When they no longer needed him, they turned on him. A truly Machiavellian society.
And that's why Bush will not let the war in Iraq end. As long as it lasts, we think we need a tyrant. If we still had troops fighting in Vietnam in 1974, Nixon would not have been impeached. If we were out of Iraq now, Bush would be impeached.
Let's break the pattern and impeach a wartime president, or soon wartime presidents will be all we have.
This may be America's big test. Do we the citizens judge our rulers by their respect for our liberties, or by their ability to maintain order at all costs?
The fishy thing about Watergate is that Nixon's crimes (besides his war crimes) were beginning to be understood before Watergate. His use of Federal agencies to intimidate dissenters was known. The economy was going bad, and the puppet state in Saigon was in a holding pattern after all we'd spent on it. Yet the man won an overwhelming victory in November 1972.
I think what killed Nixon was that he declared the Vietnam War over for the US in 1972. As long as he maintained an atmosphere of wartime fear and anxiety he could get away with murder. The euphoria of the herd that authority had won out over the counterculture and that the US hadn't yet "lost" in Vietnam got him that victory. But the instant he stood before the public as a peacetime president, they started to judge him for his past crimes.
I'll go further. The public hired Nixon in 1968 to wipe out the hippies and the anxiety caused by open dissent. All they wanted out of Vietnam was to hear that America hadn't "lost". He carried out the crimes they demanded, from Cambodia to Kent State to COINTELPRO. When they no longer needed him, they turned on him. A truly Machiavellian society.
And that's why Bush will not let the war in Iraq end. As long as it lasts, we think we need a tyrant. If we still had troops fighting in Vietnam in 1974, Nixon would not have been impeached. If we were out of Iraq now, Bush would be impeached.
Let's break the pattern and impeach a wartime president, or soon wartime presidents will be all we have.
Before you sign the petition, realize that your name will be published in the Congressional Quarterly.
Question: What was one of Valerie Plame's last assignments before being outed by the White House?
Answer: Saudi Arabia.
Ref: http://www.fromthewilderness.com/free/ww3/060804_coup_detat.html
Now what Mike Ruppert apparently even missed was what else was Valerie Plame doing? She was spying on KSA, specifically Saudi Aramco, apparently attempting to verify or falsify Aramco's claims of reserves and production capacity.
So people are surprised that Bush uses language like this? Did you really think that Iraq was about WMDs or was it about oil? He knew! If it was about oil, then it follows that Bush knew about the global supply problem that was due to develop late in this decade. Knowing that, it becomes obvious why they acted as they did. And further, this is all consistent with Bush and Cheney's statements prior to entering the White House, such as Cheney pointing out we'd need a new Ghawar every few years, an impossibility. He knew!
They've known all along. Stick that in your pipe and smoke it. And, for good measure while you drool over would-be Democrats who will "save" the republic, remember that Valerie Plame was leading this operation of spying on KSA so she knew too, and knows now, which means Joe Wilson knows and so does every other major Democrat on the hill.
Some of you still think political action is possible to change course. You think this because you want to believe that these people don't know and therefore if you just educate them you can change their minds. But they already know. They already have their plans. They've done extensive modeling of this, far more than TOD can ever accomplish. They are largely committed to their path. And they are going to drag you down that path whether you like it or not.
Welcome to 2008.
Dear Greyzone,
I believe your assertions and conclusion are accurate. It's sad but true. It would be a comfort to think otherwise, but it's getting harder all the time.
In a way it's also kind of comfort to imagine that our leaders are 'morons' 'idiots' or 'fools' who just don't Know. They just blunder around and, poor souls sort of do the best they can, given their limited intellects, abilities and knowledge. If only we can get some clever guys in there, everything will be better!
I often feel that the general attitude that Bush is a total moron is an oversimplification. Even a stopped clock tells the time twice a day. This is kind of the way I see his remarks in Saudi Arabia. I mean this guy was born into a oil dynasty, he's surrounded by oil people, something must have rubbed off on him after all those years!
In private Bush is said to be a very different kind of guy. His Texas ranch has won environmental awards because it's so eco-friendly. The solar panals, the water system, the massive underground heat storage system. Bush would probably have made a pretty good rancher. He certainly seems happy and relaxed when he's on his ranch.
Clearly the guy has got a lot of issues with his family and proving himself, showing them he isn't a dumb-fuck failure. His mother was apparently a bully, harsh, and quick to scold and give a slap. His father was absent and busy being a success. Bush was the runt of the litter. It must have been hard for the little boy who wanted the approval, attention, time and love of his parents to receive rebuke after rebuke and literally be pushed away.
Even now, the guy is so clearly out of his depth, in the hardest job in the world, the most public job in the world, and all these smart people, like his mother all over again, think he's messing-up again. Why can't you be more like your big brother Jeb?
If one looks at his body language at these press conferences he looks like he's being torn apart inside. He doesn't know whether to run or fight. He jigs, turns, lunges, winks, grins, blinks, twists, bobs, sniggers... He appears like he's terribly afraid someone will see through his carefually constructed public facade, that everyone was right all along, that he is inadequate and a failure. So he over-compensates, turns himself into a cowboy, almost a kitsch, parody of Texan good ol' boy. But this is a mask too. Inside the little boy is rattling around inside the enormous, empty, husk of the grown man's body, and it's cold, dark, and ultimately, very lonely and lost.
You apparently have your facts inverted. George Bush was born in 1946. Jeb is his little brother, not his big brother. Jeb was born in 1953. George is the senior by about 7 years. As for the rest of what you were attempting to say, I'm not sure if I can make heads or tails of it. Is Bush a moron? Is he faking it? But to insinuate that he's compensating for being the "runt" of the litter is totally in error and starts from a completely wrong assumption leading to totally erroneous conclusions.
Hi Grey,
In defense of writerman, I've heard some "stories" of GWB's childhood, which I don't want to take the time to research. I appreciate that writer has his facts wrong. And, appreciate, your focus on the facts.
I think what writerman is trying to say is, for people with, say, frequent evidence of emotional callousness (do I have to reference that, too?), just as an example...there is, AFAIK, always a "story". It doesn't mean writerman has the right story. That's my take-away from his post.
more from http://www.fromthewilderness.com/free/ww3/060804_coup_detat.html...
As Saudi Arabia's largest banker he handles the accounts of the royal family and - no doubt - ARAMCO, while at the same time he is a named defendant in a $1 trillion lawsuit filed by 9/11 victim families against the Saudi government and prominent Saudi officials who, the suit alleges, were complicit in the 9/11 attacks.
Both BCCI and Mahfouz have historical connections to the Bush family dating back to the 1980s. Another bank (one of many) connected to Mahfouz - the InterMaritime Bank - bailed out a cash-starved Harken Energy in 1987 with $25 million. After the rejuvenated Harken got a no-bid oil lease in 1991, CEO George W. Bush promptly sold his shares in a pump-and-dump scheme and made a whole lot of money.
Hi Grey,
re: "Joe Wilson knows and so does every other major Democrat on the hill."
There's a kind of distinction I've been trying to make. It's about what it means to "know".
What and how does someone process a "factoid" and do they possess enough education and understanding to do something like...see the implications? (In any terms that might be meaningful to you?)
My experience is there is almost no connection between "knowing" about "peak oil" and what you, Grey, might call "knowing".
There's a vast inner world, so to speak, and human process things in different ways. (Or, don't process them, even.)
When it comes to this topic, it inspires more "cognitive dissonance" than most. I've seen endless varieties of it. (I've even experienced several :)).
For one thing...I don't mean to be (what)...contrary here, because, for certain individuals, you are no doubt right on in your assessment.
It's just that - look, what if you were in the position of say, Cheney - back then?
Am I safe to assume that an invasion (do I have to add - involving slaughter on such a scale, etc. etc.) - would not be on your list of responses?
Right there, what I'm saying is...it's hard to draw a line between the "knowing" and how it fits into everything else in a person's psych. Really tough.
Now another issue is: is education of the type I'm implying possible? For eg., AFAIK, every member of Congress received an "oil poster", ASPO-style some years ago (2 or more). Does this mean they "know"?
So, on the fine point of: Can existing "alternative" leadership "save " us?
Well, perhaps. Most likely, new leadership is required. Someone(s) who actually understands in what "we" consider to be a meaningful sense. (Someone like you, Grey.)
re: "They've done extensive modeling of this, far more than TOD can ever accomplish."
Well, presumably "they" can read, I'll say that, anyway. :)
I have a feeling that Bush and Cheney may have been put in the White House because of oil. To take the oil Iraq had and to drive up the price with a risk premium. Any U.S. oil company that controls production has made $Billions off the price of oil running up from $20 per barrel to $100 per barrel. If you can spend $100 million electing someone to the White House that will do your bidding and make an extra $100 billion in profits, that is one great return on investment.
Here is the exact quote of the words of President Bush as given in the keypost by Gail the Actuary:
"If they don't have a lot of additional oil to put on the market, it is hard to ask somebody to do something they may not be able to do."
Now unless President Bush clarified his remarks to a much greater degree in the rest of the video interview, the sentence quoted by President Bush tells absolutely nothing, except perhaps what we want to hear, depending on our viewpoint. I cannot watch the video as I have very slow dial up internet, so please advise if Bush clarified his above remark in greater detail.
Note that Bush is talking about "oil they can put on the market". This tells us nothing about Saudi reserves, but simply about what they can put on the market NOW. It is very possible that Saudi Arabia cannot market more oil now for all the reasons I have mentioned in my prior posts (back to those in a moment), but there is no indication in the Presidents words that Saudi Arabia is "peaked" for good on production. Politicians talk in the very short term. The long view is still in question....
I have posited on more than one occasion that the Saudi's simply miscalled the world demand picture in the projections they made in the 1990's regarding oil consumption post 2000, and got caught short. U.S oil consuption growth had been nearly flat through the late 1980's early 1990's, as had been Europe and Japanese oil consumption growth. The Saudi's had no reason to believe that world demand would climb nearly as rapidly as it has in the last 10 years. Where did they goof?
China. India. The huge growth in oil demand and consumption is linked in an absolute way to Chinese and Indian growth. KSA like the rest of the world just flat mis-guessed the rise in Asian oil consumption.
What this meant is that they far underinvested in E&P projects in the 1990's. Remember that in the 1990's, oil was givaway cheap. There are folks on this string of posts saying that "Saudi Arabia produced 'flat out" for the last 25 years...." Why would they do that? Give away oil at historic low prices, invest billions out of their own money in finding and developing oil in a world that was willing to give less than $25 per barrel for it? (!!) That is simply nonsensical on the face of it...
I think Bush is right. The Saudi's cannot bring more oil to market now. Can they bring more oil to market later? Who knows. I don't think we have ANY IDEA what the Saudi's can bring to market in the next decade, absolutely none. And that's the way they like it.
The Saudi's may be completely peaked out. Then again, they may not.
I have been told that sometimes you just have to follow your instincts. And I am not trying to convince anyone else of anything, I am simply speaking for myself....I keep getting this sense that there is something not right in this whole story.....all of a sudden, we are running out of gold, silver, steel, wheat, corn, oil, natural gas, even coal and uranium (!!!!!!)....I have a friend in the investment brokerage business who was in glee the other day....he said he told his investors to get out of stocks, and just before the recent downtown in the market. Where were these investors being told to go? You guessed it, commodities, metals, grains, oil.....the perception now is that commodities is the safe place to be!!
I remember being warned for years....trading in futures and commodities is risky, to be done by the pros and the speculators only....now, everyone is pouring money into commodities, into energy futures and stocks, just when all of these are at historic highs! Buy high and sell low, unless you believe that commodities and energy are the investments that defy all historic patterns and actually do go up and up and never come down....
Why does this sound like a bubble in the making to me? There is something screwy going on. When the little sentence quoted by President Bush can be made into evidence that Saudi Arabia and the world has peaked.....don't get me wrong, they may have, but using a sentence like that as evidence seems to be a case of desperately believing in a scenario, and then hearing ANYTHING anyone says as evidence to support it. (once again, as an example, Christophe de Margerie is trotted out as a "peak oil" supporter, when he has stressed over and over again that he is NOT a peak oiler in anyway that M. King Hubbert would accept, but sees the problem with oil as logistical and political
Something just smells fishy about this whole "Peak Everything", "Invest now, it may seem high but it will only get higher! Call this number for opportunities in gold, wheat, corn oil, natural gas, hell, whatever, IT'S ONLY GOING UP!!!
Why does this whole scene seem so familiar? Once more around the treadmill, from Dutch Tulip mania to Dot Com and real estate, the names change but the suckers get pulled in every time.
But like I said, that's just me.
RC
TIIM,good post I've been trying to find a chart I seen a couple of yrs ago it was from 1960 to 1980 and the rise in commodities.They over layed with a chart from 1990 til 06 with the 60-80 chart almost perfect match in rise.The phrase it's different this time which I really don't like might be true this time or generation.With 50 million new people to feed world wide other countries wanting to upgrade living standards and the two biggest Chinda growing like weeds.But it all lead to inflation.
TIIM,good post I've been trying to find a chart I seen a couple of yrs ago it was from 1960 to 1980 and the rise in commodities.They over layed with a chart from 1990 til 06 with the 60-80 chart almost perfect match in rise.The phrase it's different this time which I really don't like might be true this time or generation.With 50 million new people to feed world wide other countries wanting to upgrade living standards and the two biggest Chinda growing like weeds.But it all lead to inflation.
While I a agree that there is always a tendency for special interest groups to read too much into any new development affecting their field, I'd make two points in response to your post.
First, in Peak Oil Theory terms, it doesn't matter whether Saudi Arabia goes into decline now, next week or in 2037. Enough appears to be known about reserves in the rest of the world to be sure that we'll be past the all liquids peak in 10-15 years tops - unless there's a massive uptick in discovery (of stuff that can come on stream quickly). Bush's comments were significant IMO because they departed from the long-held top-level position of complete non-acknowledgement of any constraints on the Saudi's ability to inject more oil into the system whenever they want. He could easily have fudged a non-committal reply along the lines of the Saudi's acknowledging the importance of global economic fundamentals and agreeing to take them into account their next meeting.
Second, while some people are certainly using elements of Peak Oil Theory to drive a commodities investment bubble, it takes only a basic understanding of the ramifications of PO to theorise that the modern markets themselves are probably going to be one of the early casualties of governments' failure to acknowledge Peak Oil in time to make adequate preparations for it. It would be ironic if the thing that bursts the commodities bubble is Peak Oil itself.
Your thinking would be spot on except for one fly in the ointment:
Given that we live in a finite world with finite resources, we know that SOMEDAY we WILL be past "Peak Everything".
We know that the day WILL come when it will no longer just be a "bubble", it will be for real. Prices for everything will be going up because supplies of everything will be going down, permanently.
The question thus becomes: Do we have any good reason to think that this "someday" might have arrived, that it actually is now?
The statement I quote above is very clearly in the context of what President Bush would say to the king of Saudi Arabia, and thus relates to Saudi Arabia.
I should point out that there is another interview, referred to as a Roundtable Interview done in Saudi Arabia. It is available from the White House website.
Here are some of the things the President says in the Roundtable Interview. These excerpts point to the fact that Bush is aware that demand is rising faster than supply, so prices are rising, and further emphasizes that a lot of OPEC countries cannot increase supply. In this interview, it is not as clear that Saudi Arabia in particular cannot increase supply.
Umm ...
This is entirely consistent with an underlying problem of unexpected demand outstripping production capacity [as a function of investment, not Peak Oil per se] ... in other words it supports what Roger Connor says above, and yes, it is explicitly about KSA.
And for heaven's sake, everyone here minutely parsing what the famously incoherent George Bush has said in order to get closer to that magical head-for-the-hills-moment ...
'Is our children learning?' 'OMFG, it's Peak Oil going mainstream at last!'
Hi Gail,
Interesting find. Thanks.
Hello Westexas,
A scary thought occurred to me last night... it was sort of an IMPORT Land Model. If the U.S. economy continues along its direction, oil consumption will decline and the "surplus" production will be taken up (rather quickly , I think) by growing economies. Less oil would lead to less economic activity, weaker dollar. Weaker dollar means less ability to buy foreign oil... if one can find any surplus in a market that's on the downward side of the production curve. Spiral that feeds on itself.
The economy may just become too weak to even start implementation of Kunstler's recommendations.
Can Deffeyes' 4 Horsemen be far behind?
8-(
I agree. I had a simmular thought the other day as I was perusing the financial blogs the other day.
We have been/are exporting our economic activity, our vibrance.
It is the decoupling question at issue and it looks more and more like the rest of the world can absorbe at least a good size chunk of the action.
Make no mistake though the US economy is so massive that the rest of the world will definitely feel it.
Not if we sneeze but for sure if we get the trotts.
We are facing a relentless shift--from an economy focused on meeting wants to one focused on meeting essential needs. Unfortunately, a majority of Americans live off the discretionary spending of other Americans.
The really big difference between today and the seventies wrt. any 'released oil' due to a US recession is two-fold:
1. back then there was a ton of easy oil that remained to be got so there was no question of even a small supply shortage
2. on the demand side there where only a handful of really big oil users, China and India usage was just a tiny fraction of what their demand has grown to so many more oil munchers waiting to take up any slack now.
Personally I'm quite looking forward to having a chicken run and some fresh herbs in my locally grown home cooked food. Its the upcoming attempt to maintain the Pizza-Hut, Suburbia, Fly-to-let lifestyle 'at all costs' that raises the biggest concern. I simply do not think the majority of people will understand what is hitting them.
Nick.
btw. Is TOD a bit slow today or is it just me?
It's a lot slow. SuperG is working on it. I understand that they may have to take the site down for a while to fix the problem.
I thought that it was interesting that the various proposals being discussed by Congress to "help" Americans all seem to involve various ways of encouraging more consumption.
Strange, isn't it. Figuring out how to conserve energy, and using the energy saved to help with production related to long term needs would seem to be a lot more sensible.
The really big difference between today and the seventies wrt. any 'released oil' due to a US recession is two-fold:
1. back then there was a ton of easy oil that remained to be got so there was no question of even a small supply shortage
2. on the demand side there where only a handful of really big oil users, China and India usage was just a tiny fraction of what their demand has grown to so many more oil munchers waiting to take up any slack now.
Personally I'm quite looking forward to having a chicken run and some fresh herbs in my locally grown home cooked food. Its the upcoming attempt to maintain the Pizza-Hut, Suburbia, Fly-to-let lifestyle 'at all costs' that raises the biggest concern. I simply do not think the majority of people will understand what is hitting them.
Nick.
btw. Is TOD a bit slow today or is it just me?
It's a simple question not requiring quantum physics or elaborate models to answer: IF you accept Peak Oil is here or near AND you accept that Global Warming is a serious threat - and particularly the new 350 ppm from Hansen, et al., - and going much faster than previously assumed AND you see the economic collapse we are currently witnessing as more likely than not to lead to the edge, or full into, a Greater Depression, then can you doubt TSHHTF (The Shit Has Hit The Fan)?
Answer: No.
If we had a normal cycle of economic activity going on, we'd weather the recession and have the funds to prepare for Global Warming. Still, many would die/be displaced/go hungry, but all in all, the world would be pretty much the same if we could keep warming to that 2 degrees. But we don't. Have a normal cycle.
If we *just* had Peak Oil to handle, innovation, community, relocalization, greening everything could end up creating a better, more sustainable world. (If they could kill the Fed and all it's in-bred cousins.) Pretty well, actually, but, still some drop in economic output, some hunger, some deaths. In the end, it wouldn't look like it had been a world-wide disaster in the history books. But we don't. Have *just* PO.
We have a perfect storm of the ecosystem tipping way out of balance, oil production falling with (at this time) no truly viable, short-term or long-term answer and the economic strength needed to handle both disappearing faster than sand through an hourglass. Nature, true to her Chaotic little heart, is throwing us a massive set of positive feedback loops and we are about to see what happens when a planet-wide short circuit happens.
I just don't see any way to handle all three at the same time unless there is massive decentralization, localization and community building - all while keeping critical systems such as communications and the sharing of knowledge accessible.
Look at the feedbacks: Economic trouble helps raise the costs of everything and/or eliminates funding for solutions. Oil falling sucks GDP out of economies all over the world while the high costs of fuel reinforce the basic economic storm, particularly at the individual level. The solutions to Peak Oil are the same as for Global Warming, for the most part, but can't be implemented widely enough to fix the problem. This leads to a greater strain on economies, but more importantly dislocation leading to greater imbalance and conflict... leading to more economic chaos (though a probable reduction in fuel use).
What is mildly, in a black humor sense, amusing is that the economic bottom is falling out *first.* It won't be Global Warming or Peak Oil *creating* the crisis after all. While I expected a downturn a year ago, I didn't yet know it would be a potential depression. That the economic stupidity that has lead to current meltdown ends up being the heat engine feeding The Perfect Storm is... ironic. TPTB may well end up owning a world not worth owning.
I'm not much of a writer, so this post is chaotic and probably not worth owning.
Cheers
But what's driving the financial meltdown really?
From The Hirsch Report
Without the massive recent jump in oil prices would sub-prime have really been such a problem?
You know an interesting short term question and I've been away from the Oil Drum for some time so it may have been beaten to death, but what is the elasticity of oil demand in terms of a recession? I took a real quick at oil demand in the US in the last two recessions and it really just leveled off or declined quite modestly. Put this in the context of global demand and a modest, solitary US recession may likely not have much impact on world oil demand.
When I mentioned this very briefly some days back someone came back, that to paraphrase, and I hope I am capturing the gist of it, "You are right there wasn't much of a decrease in oil demand in the last two recessions but this is going to be a very, very serious recession." Which really makes my point. However, most of the current headlines trumpet any decline in oil prices as over concern that there may be a looming recession. As it is becoming evident how accurate some experts past predictions have been, to put it bluntly a recession does not save us from PO.
At least initially, my guess is that oil demand is relatively inelastic (certainly in the current media climate that's my guess), until it becomes a very serious problem.
Of course we can take comfort that the largest American bank lost some 10 billion in "write-offs" last quarter, more than its total fourth quarter revenues and is being propped up by foreign nations. I mean its not like other major banks around the world aren't doing the same.
This is a new report by the Congressional Budget Office called Effects of Gasoline Prices on Driving Behavior and Vehicle Markets. If only looks at gasoline, not diesel or other forms of petroleum. Their estimates of elasticity seem to be 6% short term, and 40% long term (15 years). According to that report:
I'm not sure how good these estimates are.
Thx, I guess conservatively we say about a 25% increase in gas prices year over year, so we will see what happens with global demand. Also suspect 2008 will tell us what happens to demand, in PO times, in a recession.
"If they don't have a lot of additional oil to put on the market, it is hard to ask somebody to do something they may not be able to do."
Now this maybe a bit tin foilly but why now, why is Bush finally making statements like this? I mean the MOL was much worse last year, granted oil hit a 100.00 dpb just recently but isn't the price supposed to be all speculation...or does he know something we don't? Are the weekly oil reports the whole story?
It just seems to me to make statements like the above and to have such an extended visit he must think that supply is really tight maybe more so then is being portrayed by the government reporting and the MSM.
In regards to Bush's comment and the discussion on how Saudi Arabia may be at peak oil production, I found the views in this interview of Henry Groppe to be quite plausible. Here is an excerpt from the interview:
It's also interesting to see what he thinks of Saudi oil reserve analyses done by out side people -- I assume he means Matt Simmons and TODers.
Shell, with some of the best engineers in the business, was gearing up their surface production facilities in the Yibal Field, to handle an expected increase in oil production, when they were hit with a flood of new water. So, people make mistakes, even in fields that they operate.
In any case, let's assume that Saudi Arabia is producing about 8 mbpd (C+C) in 2015. This would be a production decline rate of about -2%/year from the 2005 level of 9.6 mbpd.
If we apply this 2% rate to the total liquids number (about 11 mbpd in 2005) and plug in the 2005 to 2006 rate of increase in consumption (+5.7%/year), Saudi net exports would drop at about -6%/year from 2005 to 2015.
As long as Saudi Arabia is showing increasing consumption, they have to show a sustained steady increase in production--just to keep net exports flat. The US is in the opposite position. In order to keep our net imports flat, we have to reduce our consumption at the same volumetric rate at which our domestic production declines.
Of course Saudi Arabia has reserve capacity. They are just withholding it as part of a long term plan.
Step one: restrain production to end the growth of world oil production
Step two: wait while oil prices climb
Step three: use petrodollar windfall to 'rescue' distressed companies
Step four: open oil spigot, crash oil prices
Step five: watch while alternative energy producers go bankrupt, experienced personnel at international oil companies take early retirement
Step six: cut production and raise oil prices after competition eliminated
B/S. OPEC is doing all they can to smooth out oil prices. We won't see $65 again-if the price drops to $75 OPEC will be talking production cuts no matter what.
This is in the London Times today..
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_...
You can comment... I'd encourage anyone so inclined to do so.
A Scotsman,
You must know that you cannot throw out raw meat like that without attracking the dogs! :-)
This is probably a dead string by now, but what the hell, I am in the mood to muse a bit.
First, let's take the title of the piece you linked: "World not running out of oil, say experts."
That statement is of course a well known red herring.
Of course the world is not "running out" of oil. When peak oil started to become well known, the Peak community was always very careful to point out that "peak" is not "running out". However, as the discussion continued, the peak community has become more and more lax in what they say, and now you hear peak activists using terms such as "running out" and "the end of the oil age" very frequently.
This is an error that undercuts the credibility of what "peak" is.
There are also arcane mathematical models being put forth in the peak community that would indicate that exporters of oil will suddenly stop exporting. For many of these exporters (including some very large ones in OPEC) oil is the only source of revenue they have. The models presume something very unlikely, that being that while these nations stop exporting, they will continue to expand and grow in thier home market demand! In other words, they would cut off the only source of income they have, but continue to grow as economies! We would have cause to doubt such a scenario.
Of course CERA needs no introduction here on TOD, so let's dive right into what CERA's position is, as stated in the article:
"A landmark study of more than 800 oilfields by Cambridge Energy Research Associates (Cera) has concluded that rates of decline are only 4.5 per cent a year, almost half the rate previously believed, leading the consultancy to conclude that oil output will continue to rise over the next decade."
CERA goes on to to say 100+ million barrels per day by 2017
ThatsItImOut
Hadn't thought of the Export Land Model in those terms...good point. It does raise the question of how the exporters will replace oil for domestic energy generation in order to maximise oil exports.
Several OPEC countries are well placed geographically for large scale solar energy production. In fact, generating and exporting electricity to starving Europeans might be even more profitable in the long run than extending the life of oil fields.
Imagine much of Iraq covered with massive parabolic trough generators, wiring profitable electricity to the rest of the region and the Eurozone. Oh, maybe GB and TB did already....
I try to restrict myself to referring to "the end of the cheap oil age".
If anyone is still reading this thread, following news links on the CERA story led me to Freddy Hutter's site at http://trendlines.ca/ (migraine alert regarding the site design!).
The last slide in his PowerPoint presentation (http://trendlines.ca/TrendLinesSubmission2toNPC-70824ver3.ppt) shows his average of the major (ASPO, CERA, IEA etc) forecasts for the peak. For what such an average is worth, it comes out between 2020 and 2025.
Half empty,
Thanks for the reply...unfortunately my post was not completed, and I was attempting to edit it (due to a lock up by my Mac :-(
The rest of the post was to say this:
CERA sees some 100 million barrels per day plus by 2017 as the "optimistic" scenario. The EIA and NPC Report say we will need some 120 million barrels per day by 2030. The darkest scenarios see 85 million barrels per day some two years ago as peak (already occuring in the past).
If we split the difference, we get a number around 100 million barrels per day (with convergence by NPC (barring massively increasing Saudi production) and Total's De Marjorie as around that number), and only about a 15 year window between dark scenario (2005 peak) and sunny (around 2020, after that, who knows?) My point: 15 years is a very short window to plan mitigation if peak occurs even as late as 2020, per Hirsch report and other knowledgable sources.
CERA seems to have no problem with world supply being narrowed essentially down to OPEC. The NPC report pretty much assumes that OPEC, and in particular Saudi Arabia will have to make up the increased production to get us over 100 million barrels per day, or to paraphrase Simmons in "Twilight In the Desert", all roads lead to KSA.
This dismisses the issue of money. OPEC, and KSA in particular will be pulling in massive amounts of it from oil consumption in the U.S., Japan, Europe, China, and Asia in general. The bleeding of the world economy will become a massive strain if not completely unbearable.
CERA then goes to a fascinating argument, that supply may outgrow demand. This is not as far fetched as some believe. Per capita growth in oil consumption in the U.S., Europe and Japan has been flat for over a decade, maybe a good deal longer. The growth in developing countries (China and India in particular) has more than made up for flat demand in the most developed countries. But advanced design and technology may reduce the growth in Asian consumption more than some now expect.
Saudi Arabia, as I pointed out in a prior post "Tale of Two Speeches" is deeply concerned about demand destruction, and are therefor reluctant to invest billions in E&P and development of oil producing infrastructure. This of course makes it less likely that they can live up to the expectations of CERA/EIA/NPC report, which call upon them to invest billions of dollars (even hundreds of billions) to produce billions of barrels. Every month of Saudi indecision reduces the likelihood of them being able to produce the amount of oil in the future that the world is counting on them to produce.
CERA is correct to point to the effect of regulation and technology that will hopefully mitigate carbon release as an engine to hold down growth of consumption in the most advanced nations.
It is obvious that CERA places a great deal of importance on "unconventional" oil, the tar sands in particular. Some have referred to the tar sands extraction as a "mining" operation. If the tar sands are to be exploited by "mining", then they have no long term future as a method of providing major oil. The expense of extraction and the water/natural gas demands are just too great to allow "mining" the tar sands to be viable.
The only hope is "in situ" extraction, and advances are being made on this front. Whether they will be made fast enough is another question.
As I said in my post that was lost in my Mac lockup, the one thing that the most militant peakers have in common with the optimists at CERA is an absolute belief in the perfection of thier own wisdom. CERA says 100 million barrels plus per year "Will be" done, not "may be" or "if our projections are correct" or "is possible", but "will be."
Just as certainly, the most militant peakers say it "Cannot be done", not "might not" or "if our projections are correct" or "given these conditions", but simply "cannot be done".
Either way, we can see that the difference between all camps keeps narrowing. We can see that the time frames are getting shorter in which to respond.
There are at least a dozen very good reasons to work toward reducing petroleum consumption, especially in the most advanced nations. Carbon release, national security, national autonomy and destiny, balance of trade, economic efficiency, humanitarian reasons to assist the poorest nations, building a road toward diversification and locality appropriate energy production and use, conserving petroleum for chemical processes in which it is very hard to replace, etc.
And then there is the possibility of near term peak oil. It may have already happened. It could happen in 5 years, or 10 or 20 years....or more. But the risk is increasing that it is near enough in time so as to pose a real danger for the advanced nations, and to prevent the poorest ones from reaching prosperity.
Even without the peak oil problem, the need to move away from petroleum consumption can be demonstrated easily. With impending peak oil accepted as any measurable possibility, the need become immediate and crucial.
We simply cannot afford to risk the loss of a technical culture it took centuries of great effort to build.
Systemic reduction of petroleum consumption for me is the "holy grail" of the peak oil cause. I am not where I need to be personally on this. The nation (U.S.) is not, and the world is not. But reduction of petroleum consumption, and alternatives to petroleum consumption are for me the be all and end all of the peak oil activist cause. Predictions and labels are nothing more than sport.
I state once more: It is the blindness that we are running in that presents the greatest danger. If I could KNOW with absolute certainty that "peak oil" in the permanent geologic sense was yesterday, or tomorrow, or 5 years from now, or 30 years from now, I would know how to plan and to invest. Action would be immediate. But it is not having any way of knowing that creates the problem, and kills the ability to build consensus on a joint response.
We simply cannot know if the world will peak at 85 million barrels per day, or 100, or 150. We can guess, we can estimate, but we cannot know. We can know this: If we have to purchase an ever increasing amount of oil from nations outside the U.S., the U.S. will run out of money long before it runs out of oil. It can be presumed that the same is true of Europe and Japan...and China and India, although they are newer to the game, so it may take a bit longer. The consuming nations are bleeding to death, whether they know it or not. And not just the U.S., but all petroleum consuming nations.
CERA never seems to understand: There is one thing worse than the oil not being "out there". A worse fate for the United States is if it is "out there", allowing us to buy our way into poverty and slavery.
I refer to the U.S, because I am an American. But the same fate is shared by all petroleum consuming countries.
Thank you.
RC
ThatsItImOut
I hope your Mac sorts itself out, we need more posts like this.
Your words should be stencilled across the bathroom mirror of every presidential candidate and world leader (substituting their country for the US) so they can read it every morning.
I am in the UK and, while there are growing signs of political awareness of Peak Oil here, it is depressing to see the vested interests working to undermine public awareness of the seriousness of the situation. This week alone, we've had stories in the main national newspapers from CERA and, previously, BP on exactly the same theme: "Yes, supply is tight but Peak Oil is waaaay off in the future."
As a result, most people who've even heard of Peak Oil assume that, at worst, there'll be a bit of delay in getting back to cheaper petrol until they start pumping all those billions of barrels of oil out of the shale and tar sands.
There are some noteworthy, if unsurprising, aspects to the anti PO spin:
With the honourable exception of the Guardian (unfortunately one of the lowest-selling national newspapers), all the papers either ignore the Peak Oil issue or roll along with the disinformation campaign being run by the oil industry.
It's not that the key UK politicians don't know the real situation. Blair obviously did. Brown must do. There is an All Party Parliamentary Group on Peak Oil and Gas in Westminster. These ad hoc groups really have no direct influence over policy but its existence shows that the issue is least being debated inside the Palace of Westminster, if not visibly in the real heart of government.
Today the European Union demanded that the UK increase its target for renewable energy to 15% in 2020. That could mean nothing or it could mean they think we should be in a position to cope with a 15% shorfall in FF supplies (say, a drop of 4% a year from 2017, which fits in with one of the more commonly-seen PO dates).
Last week, the UK Government's chief scientific advisor said on the radio that he thought all UK transport would be electric by 2020 to 2030. He might know something about cutting our oil dependence, or he might just have been in propeller-head mode, I don't know. If he knows, and someone's thought through the implications of such engineering such a move among Brits who own - and are in large part addicted to - almost 30 million cars, then we are indeed approaching scary times.
What scares me about all this is we're in a situation where all the key people in all the key places - the US, the EU, OPEC, ANZ, Chindia - know we're approaching five minutes to midnight on Peak Oil (i.e. 2 - 12 years).
NONE of them can go to their people to say "the party's over" until the party really IS over, because they'll lose credibility.
NONE of them have any answers that would be half so effective as creating worldwide public awareness of the Peak Oil issue to galvanise grass roots responses, but they can't do that fast enough - or at all if the oil, auto, global casino and agribusiness interests have their way.
EVERYONE on the planet will suffer because of this impasse.
Every time, it comes down to the same thing. No-one else is going to warn people about Peak Oil so we'll have to carry on doing it ourselves.
Sod CERA.
David King actually just retired as chief scientific advisor which probably allows him to speak more freely. In an interview on BBC tv "Straight Talk" with Andrew Neill last week he said (apparently talking about climate change) something about having persuaded the government to bring certain factors into the public domain in future and that he remained confident that would happen. He did not say what these factors were but I strongly suspect PO. I'd bet he knows all about it.
As I have noted several times, in what I call the Phase One decline, cash flows from oil export sales would increase even as export volumes decline, because oil price increases offset the export declines. In Phase Two declines, oil price increases can't offset the declines in export volumes.
Note that a consumption increase is not necessary for a net export crash. The UK showed practically no increase in consumption as it went from peak net exports to zero in seven years.
As I also outlined, I would think that virtually every oil exporting country in the world would fall somewhere between Indonesia and the UK in terms of per capita income, energy subsidy/taxation and rate of change in consumption.
Indonesia went to zero net exports in 8 years.
The three examples I have used--the ELM, the UK and Indonesia--all showed approximately linear declines, i.e., close to constant volumetric declines. In fact, if one just used the initial ELM decline, it suggested zero net exports in 8 years, versus the 9 years that the model actually showed.
The 2006 and 2007 to date data indicate that the top five net exports are going to decline at about one mbpd in both 2006 and 2007 from a peak of about 23 mbpd in 2005. Extrapolating this out puts the top five in the vicinity of zero net exports around 2028. Our middle case, based on the mathematical models, shows the top five approaching zero net exports is 2031.
It must be remembered that part of what is going on is the diversion of raw crude oil for export to the production of value added products (refined products like gasoline, fertilizers, petrochemicals & plastics, etc.) for export. Part of the growth of the domestic economy of the exporters is in the development of these production facilities. Rather than shipping the raw material and importing processed goods back, they are doing the processing themselves. It makes good economic sense for them to do so.
This does not account for ALL of the oil diverted to their domestic economies, but it does account for some.
True to some extent, but then you have the UK and Indonesian case histories--with virtually no increase in consumption and a rapid increase in consumption respectively--that resulted in a most recent net export peak to zero in seven and eight years respectively.
Let's assume a relatively high case production decline rate for Saudi Arabia (-5%/year, BTW, Texas was -4%/year), with zero increase in consumption. From a total liquids production level of 11 mbpd and a consumption level of 2 mbpd in 2005, in 2031 they would be producing 3 mbpd and consuming 2 mbpd, for net exports of 1 mbpd (this again assumes a -5%/year decline rate and zero increase in consumption). Our middle case in our quantitative model shows them at zero in 2031.
So, our middle case shows them going from 9 mbpd to zero in 26 years.
And a -5%/year production decline rate and zero increase in consumption shows them at one mbpd net exports in 2031, from 9 mbpd in 2005.
If we take the opposite situation and assume flat production at 11 mbpd and escalate consumption at +5.7%/year (their 2005 to 2006 rate) they would be exporting about 2 mbpd in 2031.
So, if we look at these three case histories, you get zero, one mbpd or two mbpd in 2031--versus 9 mbpd in 2005.
WT,
Britian at least has some other marketable finished (value added goods it can sell, so oil was not it's only source of revenue. Indonesia I don't know much about, but they don't seem to have many other major sources of income.
We are still early in the game. How long can Britain and Indonesia continue to grow once it goes to negative oil export and has to import heavily?
One point in favor of your argument would be Japan, which has never exported oil or gas (only imported) but has grown by virtue of selling finished goods. If I were the Brits, I would be studying every book and report I could on Japan....another island state, no home oil, no home natural gas, but an economy that has thrived for a half century!
We cannot expect that every nation can be a Japan however....until we de-couple from petroleum, it has to come from somewhere. The Saudi's for example will most likely not become a Japan when their oil and gas production and export begins to drop (and that day WILL come, we are just not sure when).
When Saudi export begins to drop, it would be safe to assume that thier own home market consumption will have to begin to drop too....we just don't know how long the lag time will be. Either way, it will be a very uncomfortable situation for many OPEC producers, who have been used to being able to waste oil without consequences.
The Saudi's and other OPEC members actually have more incentive long term to look for alternatives to oil and gas than many consuming nations. They have the money now to fund a possible transition.
Without oil exports, they will not be able to make the changes. Ironic, that oil could fund the move away from oil.
RC
We can continue to argue "why," but Saudi net oil exports fell at a rate of -5.5%/year from 2005 to 2006 (EIA, Total Liquids).
The 2007 decline will almost certainly be higher than -5.5%/year.
In regard to consumption, some estimates put their 2007 rate of increase in consumption at about 10%.
Saudi Arabia and the rest of the Gulf States owe the world an honest accounting of their reserves and production capacity. It is difficult for the consuming nations to make plans when the data is closely held and unaudited. It is simply too important a resource to the world to allow secretive and deceptive management. The world needs a resource management agency more modeled like the IAEA.I would propose a group of skillful, intelligent, and tactful representatives from the OECD countries arrange a summit with the producers to develop a transparent system.We need people like Matt Simmons as our representatives, not political micro cephalics. It is their oil. They are entitled to produce as much or as little as they see fit but we need to work with them in a cooperative spirit. If they decide that producing as much as they can as fast as they can is not in their long term interest, we should respect that. Were I in their shoes I would move to adding value to their product which could mean refining, petrochemicals and plastics etc. At some point in the future, oil will be too valuable to waste as solely a transport fuel.
Congressman Roscoe Bartlett chauffeured President Bush around a factory in my hometown today. Read the release and watch a short video clip here. (Roscoe can be seen at the beginning and the end of the video.)
I've been wondering why my Congressman hasn't returned any of the numerous letters and emails I've sent him on Peak Oil over the past year and a half. He, or his staff, always sends a prompt reply when I write about global climate change.
I wonder if Roscoe brought up PO in the meeting he had with the President yesterday or during the tour today, or if he's complicit in the NeoCon plan to address it???