DrumBeat: June 17, 2008
Posted by Leanan on June 17, 2008 - 9:06am
Senators jab OPEC over high oil prices
WASHINGTON: Eleven senators called on the Bush administration Tuesday to file a complaint with the World Trade Organization against eight members of the OPEC oil cartel, saying they are violating trade rules by colluding to hold down global oil supplies.The senators, all Democrats and one independent, maintained "the very existence of OPEC" violates the GATT trade agreement that prohibit nations from setting quotas or imposing other restrictions on exports.
Airlines to Congress: Do something about oil
U.S. airlines are calling on Congress to take action as soaring oil prices push jet-fuel costs to levels that are pushing the industry toward financial ruin. Reuters writes that the industry today is expected to "call for urgent congressional action to stem what they believe is excessive speculative trading in oil markets. The focus on commodities trading is the industry's strongest appeal to the government to address global prices, which have nearly doubled this year and have decimated industry balance sheets."
Rising cost of food devastates Haiti
In a country where about 80 percent of the 9 million residents already were struggling to survive on $2 a day before the price hikes hit, the situation has gone from bad to dire."Before these price increases, poor Haitians were spending 80 percent of their income on food," said Angel Aloma, head of South Florida-based Food for the Poor, one of the largest aid groups working in Haiti. "Now they've gone from 80 percent to impossible."
The number of Americans who believe that the war in Iraq was a mistake has surpassed the number who felt the same way about Vietnam during that war. At the same time, a much quieter U.S. military build-up is underway on another continent. The ultimate objective of the two efforts is the same: securing Big Oil’s access to the regions’ oil. The impact in Africa will likely be the same as in Iraq: perpetual occupation, instability, and growing anti-Americanism.
We've been here before. $139.89. Record oil prices. 28 years ago, after the Iranian Revolution, the world suffered an oil price shock that resulted in chronic shortages. How did the world get itself out of the conundrum in 1980? Simple -- it turned the world into Swiss cheese; it drilled the world full of holes, and came up with three large fields: The North Sea, Prudhoe Bay in Alaska and Russian Oil fields.Today we are in the same position we were in 1980, except there are no major fields left to be brought on-line, and all the aforementioned fields are facing serious depletion.
The crude oil soap opera from Saudi Arabia
MUMBAI: Is Saudi Arabia these days ruling the world? If the crude oil gyrations and the global oil-talks are of any indications, the lives of most people on earth, especially those oil-addicted Western countries, are dependent on Saudi Arabia.
Record-high corn prices slow ethanol expansion
Record-high corn prices, among other market conditions, have ethanol producers slowing expansion and analysts crunching numbers to find the industry's break-even point.On Monday -- the eighth consecutive day that corn prices set a record -- major ethanol producer VeraSun Energy Corp. said it will delay starting two nearly complete ethanol plants "until ethanol market conditions improve," spokesman Mike Lockrem said.
Have U.S. Drivers Reached Filling Point of No Return?
It took some time, but Americans are responding to rising energy costs by driving smaller cars and cutting back on miles they log on the road.See also: Tipping Points and Energy CostsBut why now, with gasoline fetching $4 a gallon, instead of a year ago, when it pushed past $3, or in 2004, when it pierced $2? Energy prices have climbed steadily for the past five years, but only recently have there been any real signs of conservation.
"I think we've reached a tipping point," said University of California, San Diego, economist James Hamilton. "There are a lot of hard numbers that show that we've actually reached a point where people are responding."
CNN: Economist Predicts 'Game Over' Because of Rising Oil Costs
Senior business correspondent and program host Ali Velshi, along with CNN’s Greg Hunter, interviewed “economist and author” Dr. Stephen Leeb about the consequences of high oil and gas prices during its June 14 broadcast.“I fear it is game over,” said Leeb, president of Leeb Capital Management. According to Leeb, we have to find “somebody to sit down and commit maybe $100 billion just in research and then implement a very comprehensive energy plan or I fear it is game over.” Leeb didn’t say if he meant “game over” for the energy industry, the economy or civilization as a whole.
When Gas Stations Run Out of Gas
Consumers aren't the only ones getting squeezed at the pump. Many gas station owners can't afford to buy gas either.
Saudis playing 'high stakes game' ahead of oil summit
The chief energy correspondent at the Financial Times in London, Carola Hoyas, says a 200,000-barrel increase is no certainty."It doesn't necessarily mean that's the level we'll get on Sunday at the meeting, and maybe they're just filling out the market," she said.
"They want to see how much that would impact the market, and so far the answer is not at all."
Refining shortage cause of high oil price: UAE
DUBAI (Reuters) - High oil prices are due to a shortage of refining capacity in industrialized nations, the United Arab Emirates Oil Minister Mohammed al-Hamli said in remarks published on Tuesday."There are not enough refineries to meet growing demand," Hamli told the Gulf News daily.
Kuwait Says Oil Over $100 Is Too High; Support Saudis
(Bloomberg) -- Kuwait followed Saudi Arabia in saying crude oil prices are too high as evidence mounts that energy costs are restraining growth and accelerating inflation.``I think it's high,'' Kuwait Finance Minister Mustafa Al- Shimali said in an interview in Isfahan, Iran, today. A reasonable oil price would be ``more or less $100,'' he said.
Myth-makers caught short in oil speculation
BRUSSELS - As in military science there is the danger of "fighting the last war", so in economic science there is the danger of puncturing the last bubble. This is especially hazardous when what one has is not, in fact, a bubble. Then, the myths of such a bubble are what need puncturing. So it is today with oil prices, which this week hit a record US$139.89 a barrel.
Economics of Oil Futures Trading, Part II
Q: Do speculators raise spot prices and futures prices when a commodity will be scarcer in the future?Yes, but if a commodity like oil is expected to be less scarce and more abundant in the future, speculators would lower both spots prices today and futures prices. It works both ways, but speculators don't receive attention when they are lowering spot prices, only when they are raising spot prices.
As the cost of diesel fuel soars and the economy slows, hundreds of small to mid-sized trucking outfits are folding - leaving legions of trained drivers looking for work."It's turned around quite a bit," Lingyak said. "It used to be the drivers who could pick and choose. Now we can pick and choose."
WA premier urges restraint in power use
Premier Alan Carpenter has appealed on prime-time TV and radio for West Australians to conserve power during the state's gas crisis.Mr Carpenter recorded the announcement on Tuesday to reinforce the message that householders and businesses must limit their electricity and gas use following the Varanus Island gas plant explosion and fire on June 3.
City lights go out after gas explosion
THE Rudd Government is preparing for lower-than-expected national economic growth as the lights have begun to go out in Perth because of the disastrous West Australian gas explosion two weeks ago.From today, Perth's skyscrapers and shops will shut down lifts and turn off lights in an effort to save energy as the mining-boom state enters its third week of severe gas shortages.
Energy crisis worsens in Marshall Islands
The Marshall Islands government is to be urged to declare a state of emergency over the worsening energy crisis.The Pacific Magazine is reporting the Marshall Islands national disaster committee has approved a report, recommending that cabinet take pre-emptive action before a disaster hits.
U.S. motorists tap out gas stations
TIJUANA – U.S. drivers crossing into Mexico in search of cheaper gasoline and diesel fuel are straining supplies in Tijuana, gas station owners said.Near the Otay Mesa border crossing, the owner of a Pemex station posted a letter near the cashier's booth explaining diesel will be sold only to frequent customers who have an account at the station.
Canada: Renters wary of meters
Like almost 90 per cent of tenants in highrise apartments, Kim's utility costs are included in his rent.But Kim's landlord and many others in Ontario are installing smart sub-meters ahead of a yet-to-be-proclaimed section of the Residential Tenancies Act that will allow landlords to unilaterally make tenants pay directly for their power. If they get tenants to voluntarily agree to pay now, they won't be subject to requirements to first complete energy upgrades and monitor electrical use in each unit for at least a year to calculate rent rebates before they make the switch.
5 electric cars you can buy now
With gas prices soaring, plugging in has its appeal. But there are trade-offs: high costs and low speed.
Reliance to Raise Crude Oil Imports From Saudi Arabia
(Bloomberg) -- Reliance Industries Ltd., India's biggest company, is increasing crude oil imports from Saudi Arabia as it seeks to secure supplies because of rising demand for fuels in India and the rest of Asia.Reliance, based in Mumbai, is boosting purchases by at least 90,000 barrels a day, accounting for 30 percent of Saudi Arabia's output increase of 300,000 barrels a day this month, P.M.S. Prasad, president of the company's oil and gas business, said in a telephone interview.
We are fed a production-line diet that is homogenised and bolted together from standard commodity parts. The parts, many of them created out of American agricultural surpluses, are largely controlled by an oligopoly of US-based trading and processing companies - Cargill, ADM, Bunge - that are little known in the UK. All three companies are now expanding in China and heavily involved in spreading the western industrialised diet, with its unsustainable dependence on fossil fuels and extravagant use of grains. As the Chinese move up this processed-food chain, the diet-related diseases that have afflicted us in the west are growing there too.
Midwest floods feed grain price inflation
Beyond the short-term losses from physical damage and lost business, the worst flood to hit the U.S. breadbasket in 15 years has added momentum to the recent surge in food prices worldwide.
Australia: Rudd in the hot seat
Kevin Rudd, if we can start with oil. You and Brendan Nelson are both arguing over very small savings at the bowser, although his small savings are bigger than your small savings, that's if you have savings in the end.But isn't it time to look Australians in the eye and tell them the news is only going to get worse on oil?
The message from the markets is inflation, inflation, inflation
All eyes are now on Khursaniyah, Saudi Aramco’s newest field. Saudi Arabia now earns $1 billion a day slaking the world’s thirst for oil. Only $64,999,000,000,000 to go before all the world’s oil is gone, according to Morgan Stanley economist Stephen Jen.Outside America, watch out: dollar pegs and growing economies make a dangerous brew.
Angola: Oil Production - Country Beats Nigeria Again
FOR the second consecutive month, Angola has beaten Nigeria to emerge Africa's highest oil producing nation, a development which underscores Nigeria's dwindling fortunes in the sector and Angola's steady rise as an oil producer of note on the continent.
US Coal Production Unlikely to Sate World Demand
HOUSTON - US coal production has room to grow, but expansion is unlikely to meet surging world demand because miners fear a boom-bust cycle, key reserves are declining, and regulation has tightened.
Earthquake Repercussions Spur Rethinking of China’s Dam Building Strategy
One such problem that graphically illustrates the law of unintended consequences is this: While the Three Gorges Dam was supposed to control flooding, it is now actually increasing flood risk and putting millions of Chinese living downstream at grave risk. Since the river now flows with much less silt, it also flows much faster. This faster-flowing river is, in turn, putting much more force on a set of dikes that have been built over the centuries to contain the river. The very real threat now is that some of these dikes will be gouged out by the rushing water, collapse and unleash a flood of water onto the cities and towns downstream.
Is America's suburban dream collapsing into a nightmare?
While the foreclosure epidemic has left communities across the United States overrun with unoccupied houses and overgrown grass, underneath the chaos another trend is quietly emerging that, over the next several decades, could change the face of suburban American life as we know it.This trend, according to Christopher Leinberger, an urban planning professor at the University of Michigan and visiting fellow at the Brookings Institution, stems not only from changing demographics but also from a major shift in the way an increasing number of Americans -- especially younger generations -- want to live and work.
"The American dream is absolutely changing," he told CNN.
This change can be witnessed in places like Atlanta, Georgia, Detroit, Michigan, and Dallas, Texas, said Leinberger, where once rundown downtowns are being revitalized by well-educated, young professionals who have no desire to live in a detached single family home typical of a suburbia where life is often centered around long commutes and cars.
Instead, they are looking for what Leinberger calls "walkable urbanism" -- both small communities and big cities characterized by efficient mass transit systems and high density developments enabling residents to walk virtually everywhere for everything -- from home to work to restaurants to movie theaters.
Southern towns shrink, economic woes grow
Those who live here often tolerate driving an hour each way to shop for groceries or dresses, and that far or farther to work. They accept the empty storefronts on the main streets of every little town, and they try to ignore stigmatizing news reports about their region. They endure slow dial-up Internet connections, long stretches of lonely roads rolling past fallow farms and the absence of siblings who left to find jobs. They bear it all because, for them, the ability to live in a region they love outweighs the inconveniences and hardships of life in a vanishing place."This is a great place to live, and a lot of people would like to stay here but they can't because there aren't any jobs," says Lovell Burrell, 47, a disabled heavy equipment operator. "All my brothers and sisters, everybody I went to school with, has left here to find work."
Will gas prices plateau after hitting another record?
The price of gasoline set another record Monday, but the average is going up in relatively small increments, signaling either a normal summer plateau or a breather before the run-up resumes.
Nigeria oil rebels reject Niger Delta summit
LAGOS, June 17 (Reuters) - Nigerian militants responsible for the bombing of oil pipelines and the kidnapping of foreign workers in the Niger Delta said on Tuesday they would not take part in a peace summit called by the government.The Movement for the Emancipation of the Niger Delta (MEND), whose campaign of violent sabotage against Nigeria's oil industry has helped push world oil prices to record highs, said next month's summit was "bound to fail".
Brigadier-General James Ellery CBE, the Foreign Office's Senior Adviser to the Coalition Provisional Authority in Baghdad since 2003, confirmed the critical role of Iraqi oil reserves in potentially alleviating a "world shortage" of conventional oil. The Iraq War has helped to head off what Brigadier Ellery described as "the tide of Easternisation" – a shift in global political and economic power toward China and India, to whom goes "two thirds of the Middle East's oil."
The sheer hypocrisy of this debate on oil
This seems, on the surface, to be one of the greatest paradoxes of the modern world: while democracies such as those in the European Union have been sufficiently insensitive to the wishes of their consumers as to have provoked disturbances over the price of petrol and diesel - augmented as they have been by very high taxes - totalitarian states such as China have pre-empted the possible political consequences of high domestic gasoline prices.
Oil prices will hurt Jihad Inc
The bottom-line is that the world must find cures for its oil addiction and combat terrorism.But the silver lining in the cloud of rising oil prices might just be a decline in Jihad. Terror might actually be easier to control if oil prices continue to go north. In other words, if the world is focussed on bringing down high oil prices, it is likely to find collateral solutions to the problems of terrorism since the two are inextricably linked.
First, "vast" is relative. These reserves pale in comparison with what we've already consumed and won't return the U.S. to pre-peak levels, much less meet contemporary consumption. Second, accelerating the consumption of this last domestic resource not only robs it from our progeny but also impedes our military's ability to defend us during future conflicts. Our Defense Department is the world's largest oil consumer, using 3.5 million gallons of oil per day for U.S. combat operations in the Middle East alone. These last reserves are, in a meaningful way, our strategic petroleum reserve. Consuming them apace is morally unjustifiable and egregiously shortsighted.
Manila Offers Loans to Convert Bus and Taxi Engines
MANILA - The Philippine government said on Monday it would lend up to 1 billion pesos (US$22 million) to owners of taxis and buses to convert their diesel engines and cut their reliance on costly imported fuel.
Gaza 'genius' helps besieged city survive a year of Israel's blockade
Fayez Annan turns the silver key to start the power, pushes the green button on the standard industrial jog-run-stop switch on the dashboard, and eases the white Peugeot 205 into the main east-west shopping street in Gaza City.With traffic abnormally sparse, thanks to the acute fuel shortages caused by the Israeli blockade, he soon reaches the distinctly un-urban and pedestrian-scattering speed of 37 miles per hour (60kph).
But then Mr Annan is proudly trying to make a point that, while it might be electric, this Peugeot is no milkfloat.
Thunder Horse platform finally pumping after three-year delay
BP's long-delayed Thunder Horse platform in the Gulf of Mexico is finally pumping oil and gas.BP spokesman Ronnie Chappell said today that Thunder Horse started pumping from a single well on Saturday, launching the start of a lengthy commissioning process.
"There's still a lot of work to do. There are other wells to prepare for production and others to drill and complete. But we're on track, making good progress, and on schedule to have the field online by year-end," he said.
When the structure 150 miles southeast of New Orleans reaches its full daily capacity of 250,000 barrels of oil and 200 million cubic feet of natural gas, Thunder Horse will be the biggest producer in the Gulf.
Thunder Horse originally was slated to start producing three years ago. But system and design troubles prompted lengthy delays for repairs.
Wholesale prices bolt higher in May
WASHINGTON - Wholesale prices bolted ahead in May at the fastest pace in six months as energy and food prices marched higher.
Market full of oil, price trend "fake": Ahmadinejad
ISFAHAN, Iran (Reuters) - The market is full of oil and the rising price trend is "fake and imposed," Iran's president said on Tuesday, partly blaming a weak U.S. dollar which he said was being pushed lower on purpose."At a time when the growth of consumption is lower than the growth of production and the market is full of oil, prices are rising and this trend is completely fake and imposed," President Mahmoud Ahmadinejad said in a televised speech.
Can the world do anything – fast – to stop the surge in oil prices?A newly announced boost in oil production by Saudi Arabia is a start.
And recent steps by several Asian nations to cut subsidies for oil consumption should reduce global petroleum demand.
No guarantees, but such actions may ease the price pressures that pushed oil to a record $139 a barrel earlier this month. Energy costs have become a driving force of inflation besetting US and global consumers.
Paulson, Darling Face `Stagflation' Risk on Oil Price
(Bloomberg) -- Finance ministers from the world's richest nations face another week of inflation headlines after signaling concern that the global economy risks a dose of stagflation as commodity prices soar.Officials from the Group of Eight ended talks in Osaka, Japan, on June 14 by saying record fuel and food costs threaten to spur inflation. They also pose a ``serious challenge'' to growth, eclipsing the credit squeeze, the ministers said.
U.S., China to tackle energy, currency at Annapolis meeting
ANNAPOLIS, Md. (AP) — With global oil prices hitting records, energy is expected to be a key topic when high-level delegations from the United States and China convene for two days of discussions at the U.S. Naval Academy.
Uganda: Country Will Not Export Crude Oil - Museveni
UGANDA will not export crude oil but have it refined to maximise returns from exploration. This was announced by President Yoweri Museveni at the Organisation of Islamic Countries (OIC) first business forum in Kampala yesterday.
A row between oil giant BP and its Russian partner TNK has escalated after a Russian executive compared BP’s chairman to arch Nazi propagandist Joseph Goebbels.
Gazprom's oil division to boost output 15% to 356mln bbls in 2008
MOSCOW (RIA Novosti) - Gazprom Neft, the oil producing arm of energy giant Gazprom, said on Tuesday it plans to boost output 15% to 48-48.5 million metric tons (352-356 million barrels) in 2008."Output is expected to rise to 48-48.5 million metric tons in 2008 from 42 million metric tons in 2007," Gazprom Neft's vice president for finances, Vadim Yakovlev, said.
Top court won't review Exxon Indonesia lawsuit
WASHINGTON (Reuters) - The U.S. Supreme Court declined on Monday to hear an appeal by Exxon Mobil Corp. seeking to dismiss a lawsuit by 11 Indonesian villagers who claim the company's security forces committed human rights abuses at a natural gas processing plant in the Aceh province.
McCain touts energy conservation and oil exploration
DALLAS (Reuters) - Republican presidential candidate John McCain will call on Tuesday for energy conservation and the lifting of a ban on oil and natural gas exploration as two ways to help address the nation's "dangerous" dependence on foreign oil.McCain, an Arizona senator who has wrapped up his party's presidential nomination, has made energy independence and fighting climate change key components of his bid for the White House.
Segway Glides as Gasoline Jumps
With gasoline prices and global warming on their minds, more Americans are getting out of their cars and riding to work -- and riding on the job -- on the once-maligned Segway.
Qatar Airways to try GTL-Kerosene mix fuel from next year
KOZHIKODE: Qatar Airways will use Gas-to-Liquid (GTL) and kerosene mix as fuel for its aircraft from next year to facilitate lesser carbon emission, a top airline official said today.
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My bet: Saudi's announced production increases don't happen. Wonder what the excuse will be?
Well, my favorite is the original early 2006 excuse, that they couldn't find buyers for all of their oil, even their light/sweet oil.
What are all the excuses they've used so far? That's one. Another I can remember is the 2004 and maybe on into 2005 (?) was that it isn't oil production that's the problem, it's refinery capacity in the U.S.
And to put their planned (hoped for) increase in production in perspective, from 2005 to 2008, they probably will have increased their domestic consumption by about 500,000 bpd. I still wonder if they are curtailing domestic refinery runs (and then increasing imports of petroleum products, which aren't widely reported) in an attempt to boost reported crude oil exports. The net export numbers won't show up until some time next year.
I got to thinking about if there was any way to track oil consumption within the KSA and thought about car sales as an indicator. I found this:
The population is about 27 million in the KSA, so just about 2.0% of the population bought cars last year. In the U.S. in 2004 there were about 7.5 million cars sold out of a population of 285 million (link), thus about 2.6% of the population bought a car that year. Also, the record in the U.S. for year to year increase was 5.88% in 1972-1973 but if you look at the KSA stats above, it's pretty close to that. So the KSA would probably have similar ownership per capita as the U.S., given another decade or two without TSHTF. Reduced exports indeed!
*edit* I made a mistake in one of the numbers that I corrected.
Any idea what their average fuel economy is? Or what models sell best?
Nope, but seemingly you could estimate the consumption based on the range you see in other countries if you knew how many were on the road. My quick googling didn't come up with that one...
Lots of interesting results from this google, like this one. That China is an active player in the Saudi auto market was surprising.
Well, we won't have to listen to their excuses for much longer if this is true:
Scientists find bugs that eat waste and excrete petrol
Silicon Valley is experimenting with bacteria that have been genetically altered to provide 'renewable petroleum'
bugs that eat cellulose and make crude.
I very much hope they are storing it in a bio safety level 4 building.
I'm not gonna bother to read any more than what you posted - I can well believe that a former software executive thinks you can pour crude oil into a Lexus, but I cannot imagine why I would want to read any more of it.
The pitch and volume is getting hysterical - "there's no place like home, there's no place like home........".
There is just so much bloody nonsense out there - water carbs, bugs that shit gasoline, what have you. I've said before that we've all been wallowing in so much energy for so long that we cannot even see it. There is just a ridiculous amount of useful energy in a gallon of gasoline, and in spite of that it takes a lot of fuel to move a vehicle. And how many gallons have you used in your lifetime? Consequently, people have no intuition at all about how much energy it takes to move an automobile. The end result is that people are desperate to believe in anything that promises to keep them in unlimited energy, but the fact is that nothing can.
Boy will they be pissed when they figure it out - but in the mean time it's a golden opportunity to separate the scientifically illiterate from their money.
This has been all over the news lately. Let's see the EROEI, eh? If you have to spend a large amount of energy on making buffers, media, electron donors and keeping environmental conditions just right to culture those bacteria you ain't goin' nowhere. Here's an analog from another industry: for some years, bioremediation has been the future of toxic waste disposal and many people have gotten funding to develop strategies to do it and implement them. Thus far, it isn't working nearly as well as hoped because it is damn difficult to get a particular strain of bacteria to grow where you want them, they tend to grow where they want to grow or they just get eaten by the native bacteria because they don't have a niche in the ecosystem. That's not to say it can't be done, though. If this guy has something he'll be a bajillionaire faster than you can say "12 mpg SUV", but my money's on that he's a snake oil salesman (I'm speaking figuratively).
Hmmm, Geopolitics is driving up the price, not demand. Dam those crazy Iranians
I would just like to say here that I posited Sep 05 that Thunderhorse had sustained
extensive damage.
We still don't have photos of TH after Katrina.
I don't think it was hurricane damage.
In a way, it's worse. It's designing for conditions we have little previous experience with.
It was hurricane damage and it was all over the news when it happened. The pictures were on CNBC within a couple of days after Hurricane Dennis. Here are pictures from July 13, 2005. And it was Dennis, not Katrina. Thunder Horse is well east of where Katrina hit.
BP's Thunderhorse platform still listing precariously - pictures
Exactly, and we never got a pic of damage after Katrina.
Even as we accidentally got one of a like sized platform getting it's
superstructure crushed under the Mobile Bay Bridge.
I think he was talking about the delays that happened after Dennis.
And even Dennis...it's not clear that it was actually the hurricane that caused the damage. They've been pretty secretive, but it sounds to me like the problem was a design issue with the ballast mechanism or software. With the platform abandoned due to Dennis, there was no one there to fix it when it started to go all pear-shaped.
Here's an article from the Chicago Tribune:
Leanan is correct. The first problem was a design flaw. The big problem was with the seafloor manifold system, which leaked like a sieve, presumably because of some type of chemical reactions that they did not anticipate.
"Leanan is correct. The first problem was a design flaw. The big problem was with the seafloor manifold system, which leaked like a sieve, presumably because of some type of chemical reactions that they did not anticipate."
Yes, But we never did get a pic of TH after Katrina even as Shell
was very forthcoming about the "brain surgery" repairs to Mars.
BP was, per the article in Drumbeat today, like Goebbels.
And that manifold thing didn't come to light until last year, I think.
Note the "we're on schedule" talk in that article as well.
I wouldn't expect to get a photo if there was no damage. I'm sure there were some taken, but why would any newspaper publish them if they didn't show anything interesting?
I think they'd rather have blamed it on hurricane damage if they could. It's an act of god, not their fault. Welds that don't hold together...that's just embarrassing.
I was in support of the Thunder Horse on a derrick barge from Mar 06-Aug 07. The Valve thing is correct that was the reason it turned on its side. The saltwater damaged all sorts of stuff and it had to be replaced. The subsea equipment was almost all made by one company and the welds all had microscopic bubbles. The bubbles all at one atmosphere caused stress fractures when sent to the bottom. I don't recall how deep it was but I remember it was extremely deep. My vessel was picking up all those subsea modules and placing them on transport modules. It was interesting to watch, the TH was a HUGE vessel you cant imagine unless youve seen one.
matt
Thanks for the info. Interesting stuff.
What happens in a case like that? Did the contractor have to pay to replace their bad welds? Or was BP stuck with the bill, since they accepted the work?
I was subcontracted to a company that was subcontracted to BP.....so third hand info but.....
The engineer on my vessel in charge of the lift said all the subsea stuff was going to a warehouse ashore to be laid out and inspected pending a lawsuit. I would guess it depends. If the maker constructed it to the right tolerances requested then they are covered. If the way the welds were constructed were sub standard then they contractor eats it. It was such a huge job my vessels day rate was 300k and there was several tugs and barges besides out there not to mention the delay on thunderhorse. However all that oil they did not pump is worth a lot more now right? Hard to say how it comes out in the wash. I am glad to be on shore again I only miss the $$$$
Thanks so much for your report. I really would like to see more basic reports from the trenches, from the guys and gals engaged in the whole spectrum of the petroleum industry, and I think I speak for many in making this request. We get so analytical here that it's refreshing to hear stories like this. They may seem mundane to those doing the work, but they help put flesh and bones on the charts and graphs we are almost exclusively entertained with.
It's not listing. That's just how BP does horizontal drilling.
Gail did an article on Mars that demonstrated your point.
I refer back to my farm.
The big rigs work great, as long as they're working.
But there is no back up plan when they fail.
Come on guys. The pictures of TH after Katrina were some of the most famous. One of the platforms' legs had given way and the whole platform was tipped at about a 45 degree angle towards the ocean. There was a question for a few months as to whether they could save it or not. As it turned out, IIRC, they had to rebuild all of the legs at the ocean floor level.
That was from an earlier storm.
Post the pic and I'll show you.
"On 8 July 2005, the platform was evacuated due to the anticipated close proximity of Hurricane Dennis over this period – the rig was secured and the personnel left. It is not known whether a valve in the ballast system failed or was accidentally left unsecured.
On 11 July a passing vessel reported a problem with the platform and BP personnel returned to find it in a distressed situation with a 20°–30° list; it was in danger of capsizing and sinking into deep water."
http://www.offshore-technology.com/features/feature582/
many dont understand the complexity and difficulty of (particularly offshore) oilfield operations. thunderhorse is on the leading edge of technology and unfortunately $hit happens.
i say congratulations to bp and all their talented hard working crews for bringing this project to initial production. unfortunately, they have focused a lot of attention and negative publicity on themselves.
Seems like you could simply 'prove' your point with some links. So - show us.
(Hard for the 'no pictures' crowd to post links to non-existant pictures.)
Photos?
Google has plenty of 'em!
Thanks, Google!
No, thank YOU for producing actual proof of the claim. (VS a claim w/no backing esp. when being able to provide proof isn't a large burden.)
Except...he wanted photos of it after Katrina, not after Dennis.
Come on, folks. Do you really think any of us diehard peak oilers missed the photos of Thunder Horse after Dennis?
It is a semisubmersible not a platform fixed to the seafloor. The ballast tanks filled up and it tilted. They had to replace all sorts of equip but the legs were unharmed.
GOM avg. wind speed drops 2 kts as Thunderhorse crew holds their breath. 4 X # of Thunderhorse crew = # of fingers and toes crossed. If all goes well this will offset some of the VenMex decline.
I hope they are not challenging Fortuna, by fixing it just for the start of the next hurricane season.
Just out of curiosity, if they tap out in the GOM, can this thing be towed across the Atlantic?
'Problems With Ethanol'
'As service manager for Bluewater Boats, Holly Hill, I would like to add to the June 11 article by Joe Crews ("Ethanol blended into mix at many area gas pumps"). For boaters, ethanol- (alcohol-) laced gasoline can cause various expensive problems, and even if a boat is new, fuel problems are not covered by warranty.
Ethanol-enhanced fuels attract water and will hold it in suspension until it reaches about 0.5 percent water by volume; then both the ethanol and water separate from the gasoline and fall to the bottom of the fuel tank where it is "sucked up" by the fuel pump and delivered to the motor. The water-ethanol mixture does not ignite and could leave a boat dead in the water, requiring a tow. If offshore in rough weather, that could be dangerous.'...snip...
'Ethanol is here to stay, for now, and it will cost the consumer a lot more money than higher food prices and reduced fuel economy of engines. Not only will the boater suffer, but users of lawn equipment, portable generators and other small engines will have similar problems and expenses.'
BILL GRANNIS, New Smyrna Beach
http://www.news-journalonline.com/opinion.htm
" small engines will have similar problems and expenses.'"
float valve breaking down, leaking and draining "gas" into the crankcase. (older models)
water collecting in the bowl.
to name two.
Elwoodelmore, I owned a marine engine shop on the Chesapeake Bay for many years. One of the most common problems was water accumulation in fuel tanks of gas powered boats. In many cases when the carburetor is seperated for examination the float bowls would be filled with a milky jello substance of water/gas that had been sitting for some time. My shop had a special cleaning solution tank for carbs and it was well used. We also carried rebuild kits for all commonly used carbs in stock...Holleys, Quadrajets, Carters, to mention a few.
We had more than one instance where the fuel tanks were completely rusted through on the bottom. The common tank is heavy duty steel with galvanized coating. Monel (SS) tanks did not rust through but usually these were installed in expensive and larger yachts. Since these steel tanks are large and installed prior to the cabin sole (rear deck) the entire rear deck would have to be removed prior to tank replacement. Not only is this very costly, it is very dangerous work. Gas fumes confined in the hull of a boat are serious business and can explode with devastating consequences.
I keep my hurricane generator tank completely drained as well as the carb. I avoid ethanol whenever possible but it is getting harder to find ethanol free gas. We have some really sharp cookies running the country now...maybe they hope to stimulate the economy by way of large repair bills paid to vehicle service departments and small engine repair shops. I predict that this issue will get more attentiion from the public when some politician's limo stops running because water fouled the injectors.
Some of the chatter between Coasties and boaters aware of the ethanol problem is that it will take a tragedy for the problem to be fixed. In Oregon, the state mandated E10, but exempted marine gas. But that's poven to be bogus as marine gas is such a small % of sales and it's not economical for fuel distributors to maintain seperate stocks.
river, i don't have much experience, but this is what happened to a neighbor's lawn mower. the owner's manual clearly stated to not use ethanol.
the only reason they had me work on it is that i told them i was a better mechanic than plumber(not much of a plumber either).
Any report on the actual flow rates from Thunderhorse? Take a look at the chart of Mexico's production on Rembrandt's Oil Watch Monthly. Is it any wonder that combined petroleum exports from Venezuela & Mexico (VenMex) to US shores declined at an annualized rate of -32%/year from 10/07 to 3/08? In the past four weeks, 28 days, Gulf Coast crude oil inventories have fallen at the rate of 800,000 bpd. Also take a look at the plot of Russian production.
Consider what is happening here. We have four top ten net oil exporters (Russia, Norway, Venezuela & Mexico) showing declining net oil export rates that range from bad, Russia, to catastrophic, Mexico. And these are key Proximal Petroleum Producers--VenMex to the US, Norway & Russia to Europe.
So, Asia wants increased exports from the Persian Gulf and Africa to meet increased demand, and Europe and the US want increased exports from the Persian Gulf and Africa to offset declines from their Proximal Petroleum Producers.
Is it any wonder that oil prices are up more than $50 since early October? We are currently on track to see oil prices double about every 12 months, as importers bid for declining net oil exports, and I expect to see a continuing acceleration in the overall net export decline rate.
Demand destruction is a reality. Oil prices will not keep doubling every 12 months. The economic impact of the current doubling is already killing or reshuffling economic activity. Global recession can prevent supply shocks, even if caused by supply shocks. We may have dramatically lower prices a year from now, coupled with dramatically slowed economic activity.
China is still subsidizing gas sold to consumers, it's about half the price of gas in the U.S. There's no demand destruction there yet. http://www.csmonitor.com/2008/0611/p08s01-comv.html
I wonder how much longer they're going to be able to do that.
The economist's case against subsidies is that they decrease the productivity of the economy by interfering with the optimal allocation of resources that the market provides. Lower productivity means less wealth and disposable income.
If this argument is valid, and most economists would rather sell their daughters into sex slavery than admit otherwise, then the net effect of ending fuel subsidies in China will be a wealthier population moving even more quickly to the per capita energy consumption levels of the 'developed' world.
There is demand construction in China because oil not only is a building block of wealth, but provides the means to achieve and enjoy comfort and status.
I expect that the process of demand construction will continue in Chindia and similar regions well beyond the $300 per barrel level.
Global demand is still increasing. Oil supplies are still depleting. Until demand starts falling faster than net exports, the price will continue to rise.
Furthermore, price increases is the mechanism by which demand is destroyed. Once a certain level of demand is eliminated, the price MUST rise again to eliminate the next level of demand. This is the core of Westexas' argument.
Depletion never sleeps. So the only way prices will be stable is if demand is continually shrinking. But (absent a worldwide depression) it is only high prices that will cause demand to continually shrink. What that means is that prices must and will continually rise.
Two very minor points:
1) It would be "Until total demand in oil importing countries starts falling faster than net exports". Once you start talking about net exports rather than overall world production declines, you also need to distinguish between demand in oil exporters (which contributes to the decline in net exports) versus demand in oil importers.
2) There are three ways that demand can be reduced: reduced activity due to price increases, conservation (allowing similar activity at a reduced demand level), or reduced activity due to economic contraction independent of energy prices (e.g. the housing/credit related slowdown we are currently experiencing). Overall, we should not expect much in the way of conservation other than in response to price increases, but one could envision a leader making a moral appeal for conservation (not that it worked all that well for Carter).
In regards to westexas' comment, above, offering doubling of prices every 12 months as an expectation: I don't think anyone has a workable model as to what price increases result in what degree of demand destruction. Much has been made in the traditional media about crude prices doubling in a year, but that is measuring from a low level coming off the $80 peak in 2006. Looking at that price, we see something more like 75% in two years. This is more in line with the trend we've seen this decade.
If we weren't already in a housing/credit slowdown, prices would have had to be still higher to balance demand (in importing countries) and supply (of net exports).
I strongly suspect that there is a fairly thin band of price elasticity for oil, and a solid core of in-elasticity. We may observe an acceleration of price increases needed to accomplish a given level of demand destruction.
I think it is too early to anticipate doubling of prices every 12 months, though we may get there eventually.
Just my opinion, that...
Of course it's when, not if, that we have a recession/depression.
My point is that there probably won't be any real stabilization point with the net export decline, at least not for quite a while. Net exports fall. Oil prices go up to equalize supply & demand. Then net exports fall at a faster rate. And as lower income consumers are priced out of the oil market, higher income consumers are able to shift a higher percentage of income from discretionary spending to non-discretionary food & energy spending.
BTW, interesting discussion from Mish about the EU having problems staying together (already some signs of people declining to accept Euro's from economically weaker countries):
http://globaleconomicanalysis.blogspot.com/2008/06/central-banks-clash-o...
The story was pretty explicit that 250k/day is scheduled for December and that the ramp up will be pretty granular as they hoop up individual wells. But no number except the final one.
"Any report on the actual flow rates from Thunderhorse?"
one article stated that one well (of 25 total) was put on production on saturday. if this was an average well, then maybe 10,000 bpd.
once the equipment is checked out, i would assume that the remaining wells could be brought on fairly rapidly. they have more wells to drill, presumably, before they reach the 250k bpd capacity.
My local public radio station (WMFE) ran a story this morning about Florida Senator Bill Nelson's opposition to drilling off the coast of Florida. As a "counter balance" they had a fellow on from (I believe) FLIPPA who argued that we should drill in Florida because it would provide a petroleum source closer to the refineries on the gulf coast.
This made me think about your comments about gulf coast stocks, declines from VenMex and increased shipping times to the gulf and wondered if this FLIPPA fellow wasn't acknowledging precisely that.
I checked the WMFE web site, but the story isn't up yet. I think generally they are about a day behind in posting their stories.
I am tired of the simplistic supply/demand equation, which tends to smooth over the realities.
Hey Westexas,
Can you come up with a supply/demand for each grade? Is there data out there about the maximum refinery demand for heavy crude, for example?
I would bet that if you only looked at light sweet crude, and ignored all other, that the ELM (export land model) would be scary.
P.S. Go Thunder Horse!
This is not what you are after, but it got me thinking, because this data is available:
Click for a larger version
This may be obvious to you who've have followed the industry, but to me it looks like out of those three, Arabian heavy leads as a price trend and naturally sets the bottom of the price for all three.
Also, it is interesting to note that at least the % difference between Tapis and Brent has clearly shrunk and become less volatile, as the prices of both have risen since about 2002 (down from a temporal maximum of about 50% to a near steady 6%).
Now, if all the buyers wanted was the light sweet variety one would imagine an increasing price difference between low and high API crudes as demand rose and supply did not. However, the reverse has happened (as far as I can tell from the above data, for the above three varieties).
What does this imply?
The data is from EIA. Those with more time and inclination can do a statistical analysis.
This is a great graphic. If one were to superimpose the worldwide production graphic on this one several things, I believe, would become evident. From 2004 - 2005 there was a surge in world-wide production, and in the price, indicating that demand was running ahead of supply. Then ca 2005 production starts leveling off and the price begins an exponential rise, indicating that demand is running even more ahead of supply. Just by eyeball, it doesn't seem like the increases in production being discussed are going to do much but possibly slow down the price increase a bit. To bring the price down substantially I would think we would need another yoy surge in production like that in 2004 -2005. Not likely to happen.
Net exports and prices on this graph:
http://bp2.blogger.com/_kdcZbozWthI/SDG4AV6iFzI/AAAAAAAAAco/QjBizrOxLfc/...
The reason for the oil price in one picture.
For several months now, I've been pushing the idea that light-sweet has peaked and is now in decline, with its decline rate being mitigated by greater refining of heavy. This seems more clear based on the Atimes item linked above that discusses the global refinery ratio, and when one adds the fact that most new refinery build-out is for procesing heavy and heavy-sour, and almost exclusively in Asia/Middle East. Here is something that looks promising but access is restricted. This also looks good as it has a blog and forum for use by those with expertise. These I got from a quick google. Since Colin Campbell is able to get figures for his model, they must be published somewhere, and probably cost money to obtain.
Whether it's that or the fact that light sweet crude demand passed supply already in late 2004, I'm not sure it matters.
The premium for light sweet seems to be on the rise at least in absolute terms:
Click for a larger version
Russian Oil Production as Seen Through a Rosneft Company Report
In the first quater of 2008; 5 of 7 Russian oil companies were reporting oil production declines compared to Q1 2007. Russia as a whole declined in production. Rosneft posted double digit increased oil production. Most of this increase was through acquisitions, but they posted a 6.3% gain through organic growth (drilling). Rosneft may see a large increase in production in 2008 with the first phase of the 3 billion barrel Vankor field project added to its production portfolio. Vankor is in what the Russians desribe as East Siberia. This is a new development and is expected to peak at 430,000-666,000 bopd production. Some Russian oil officials have described Russian production as on a plateau.
Vancor Oil Field (information about Vancor Field contained in Rosneft Q1 2008 Financial Report--large PDF file)
Rosneft and the Korean National Oil Company have been bouncing seismic off the Pacific Kamchatka Shelf north of Sakhalin Island for two years and authorization to drill a well has been given.
UK: Official inflation at 3.3%, climbing to 4%
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/17/bcninf...
These official figures though give great weight to things like your new computer having a few more Mhz than the old one, but exclude many real world costs like somewhere to live:
For an estimate of the impact on a real family which chooses to live in a house etc:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/17/bcncow...
For poor people where food is a big component of consumption the situation is even worse:
http://www.dailymail.co.uk/news/article-1026907/Its-bad-70s-Food-prices-...
Lies, damn lies, and Government statistics?
The government figures would be hilarious if the whole thing weren't so tragic. Here's a wonderful snippet from the BBC.
Prices for food, drinks, energy, stationery, books, holidays are all skyrocketing, but don't worry: you can go and buy a DVD to make it all better! :S
Violinist,
Are you sure you weren't reading The Onion or Private Eye online?
Though who needs satirical magazines these days anyhow? In times like ours, satire truly writes itself.
I feel we need much higher prices to significantly affect demand.
Upon arriving to work I parked by some cheap Chevy; the engine was running and some guy was sitting inside, using the A/C to cool himself off. This at 75 degrees outside - a perfect weather whichever way you look at it. Generally I'm used to seeing such things in suburban Atlanta, but @4.05 for regular in the nearby Chevron frankly I didn't expect it.
Not much hope
(sorry Alan)
$4.05 sounds good to me; it's $4.55 in Mendocino Co.
Missouri goes to 10% Ethanol. Now has lowest Gasoline Price in the Nation:
http://domesticfuel.com/2008/06/13/ethanol-credited-for-lowest-national-...
Other factors are at work, of course; but, the ethanol mandate is given a lot of credit.
Missouri will be a great place to open an engine repair shop in the near future. Too bad few will have the $ to get their SUVs, pickemups, boats, mowers, etc, repaired.
A cautionary note to all concerned: If you are going to leave a vehicle or any gas powered motor unused for long periods of time with ethonol in the tank, fuel lines/pumps/injectors/carburetors, add gas stabilizer to the tank. Then run the engine to insure the stabilizer is circulated into the fuel system.
How does the additional cost of fuel stabilizer effect the overall cost of using ethanol?
See my posts upthread if you don't know what this refers to.
'The remaining gasoline after the water-ethanol mixture settles out now has a lower octane, and if used in a high horsepower motor, it could cause detonation and serious internal engine damage. Even fresh out of the pump, ethanol fuel delivers less power to a motor and decreases fuel mileage, making the motor use more gas than before.
Boats are used infrequently compared to a car, so when a boat is in storage the corrosive effects of ethanol go to work. In late-model electronic fuel-injected (EFI) outboard motors, expensive electric fuel pumps ($400-$700) can rust up solid or corrode internally. Filters and other fuel-related components can plug up or be damaged by the solvent effects of ethanol. It all will cost boaters thousands of dollars in repairs as time goes on.
To minimize the ethanol problems, a boater should have a water-separating fuel filter installed in the boat and use a fuel stabilizer additive (not an octane booster) to help keep the fuel from oxidizing. Keeping the fuel tank full minimizes the chance of water absorption from condensation. It is best to use the boat often to prevent corrosion problems and try to stay away from ethanol fuels.'
http://www.news-journalonline.com/opinion.htm
River--Thanks for your info on this issue. Unfortunately, the word I get is even the staibizer and separating filters aren't enough, and the filters must be changed annually at a minimum. Like I said upthread, someone or a group is going to die because of engine problems caused by ethanol in marine gasoline. My thinking is to completely drain the fuel system and add it to the car's tank so it gets used quickly and fill-up with fresh fuel each outing, if they're spaced more than a week or two apart. I also wonder what E10 will do to 2-stroke engines given their gas-oil blended fuel mix.
A Missouri gallon is only worth 0.96 gallons of real gasoline. Louisiana (or at least New Orleans) prices for real and not adulterated gasoline are lower.
Best Hopes for Truth in Gasoline,
ALan
Looks like Louisiana is $3.947/gal.
http://www.fuelgaugereport.com/sbsavg.asp
Missouri is $3.832
I'll go for .985; $3.947 X .985 = $3.887 Oops, Mo Wins.
Seriously, though, Alan, the real question, probably, is what would the prices be, Nationally, if ethanol wasn't replacing 6% of our gasoline demand?
Ethanol math !!
Correct math
$3.832 / 0.96 = $3.992 equivalent for real gasoline
Ethanol is a loser.
Beat Hopes for No forced mixing of Bio-diesel in my Diesel,
Alan
At least biodiesel doesn't have the energy deficit that ethanol has.
Biodiesel can be a premium diesel fuel if it is made from appropriate oil stock, the only problem is if you have any natural rubber fuel lines or gaskets in your fuel system that are soluble in it.
That doesn't mean that we should use it everywhere, but I think that it would be ideal for running farm country on.
The energy content of bio-diesel varies a bit by source stock but is generally lower and never higher than #2 diesel (#2 diesel very low sulfur is <1% less energy/volume than #2 diesel).
Alan
How did you come up with .985? A gallon of gasoline contains 115,000 BTU, a gallon of ethanol - 75,700 BTU, thus a gallon of ethanol contains only 65.8% of the energy of gallon of gasoline.
With 10% ethanol: 0.9 + 0.1x0.658 = 0.9658
The real price of MO gasoline:
3.832 / 0.9658 = $3.97 - 5% higher than in LO
It's true that ethanol boosts octane levels, but in modern cars this does not affect mileage - at least I haven't noticed any improvement between regular and premium and I'm kind of mpg tracking addict.
In my 1997 Honda Accord, driving at steady highway speeds of about 60 mph, I tend to average:
32 mpg with 87 octane fuel
35 mpg with 92 octane fuel
These are averages, usually for, say, 10 gallons of consumption. And, again, it's highway mileage, not urban "assault" driving where I haven't noticed much of a difference in fuel economy between the grades.
Interestingly, even with a $0.30/gal spread between 87 octane and 92 octane fuel, I save money buying the 92 when I'm going on long-distance highway trips:
32 mpg with 10 gallons combusted = 320 miles
35 mpg with 10 gallons combusted = 350 miles
Meaning nearly one less gallon of fuel used to cover 350 miles with 92 octane. So, for a fill-up to fuel travel over a 350 mile distance:
87 octane: 10.938 gallons * $4.30/gal = $47.04
92 octane: 10.000 gallons * $4.60/gal = $46.00
If most vehicles behave like mine, and people respond, I suspect that the spread between 87 and 92 should increase, by something like $0.10 in my highly-constrained example.
-best,
Wolf in YVR BC
BTW, most E30 is 92 Octane. And, it usually sells for $0.20 - $0.30 Less than Unleaded.
graywulffe, I suspect a Honda Accord has a fairly high compression ration (~10.5::1) like my Insight. With some experimentation, I find that generally the 90 octane gives me optimal mileage. This confirms the recommendation I have heard is in the service manual. The lower octane apparently triggers the anti-knock sensor to adjust the timing to compensate, slightly lowering mileage.
For cars with lower compression ratio (~9::1), the 87 octane would be best and, as I understand, has the greatest energy density.
From Wiki...Below are some of the antioxidants (stabilizers) that can be added to gasoline to maintain water in suspension.
'Gasoline additives increase gasoline's octane rating or act as corrosion inhibitors or lubricators, thus allowing the use of higher compression ratios for greater efficiency and power, however some carry heavy environmental risks. Types of additives include metal deactivators, corrosion inhibitors, oxygenates and antioxidants.'
Butylated hydroxytoluene (BHT)
2,4-Dimethyl-6-tert-butylphenol
2,6-Di-tert-butylphenol (2,6-DTBP)
Phenylene diamine
Ethylene diamine
http://en.wikipedia.org/wiki/Gasoline_additive
and here is a quick way to get stabilizer for your gas tank that is filled with a mixture of real gas and corn squeezins...ON SALE!
Gas Stabilizer
GOLD EAGLE
STA-BIL
Keeps stored gasoline fresh
Prevents varnish and gum deposits
Used in 2 and 4 cycle engines
8 fl. oz.
Treats 20 gallons of fuel
Part# 770164
List Price:$12.42
You save 20% !!!
Your Price: $9.94
http://www.jackssmallengines.com/Gas_Stabilize.cfm
Thanks River. I went googling and found this page that has mucho info about E10 caused problems. Other links found report problems encountered by boat owners with fiberglass fuel tanks whose resins are disolved by E10. From the linked site:
Karlof1,
You could have mentioned that the problems in your link were, basically, confined to "Vintage" Bertram, and Hatteras boats.
The link you refer to is the one cited by the link I posted, which you'd have seen had you bothered to go there. Also, my own research shows the problem of E10 rotting fiberglass is NOT restricted to older vessels. Ethanol is corrosive, pure and simple. Your attempts to obfuscate that are immoral.
I did go to your link. Did you read your own link? It said, at the bottom, that these problems were, basically, confined to "Vintage" Bertram, and Hatteras boats.
Immoral? Holy Schmoly. Guess what the Storage tank that that E10 is in is made of. Lined with Fiberglass would be my guess.
Missouri goes to 10% Ethanol. Now has lowest Gasoline Price in the Nation
Hmm. I have a couple of questions. Since Missouri went to the mandate on January 1, why do they just now have the lowest gas prices? Just last week, Oklahoma had the lowest gas prices. Even today, according to Gas Buddy, Oklahoma gas is 1 cent a gallon more expensive than Missouri's. And I get better gas mileage as a result. So, which is "really" cheaper? Oklahoma's gas gives you more miles for the $.
In reality, states rotate over where the gasoline is cheapest. Missouri has rotated into first (6 months into the mandate), and suddenly it's the ethanol mandate. Check back in two weeks and see if they are still in first place.
Need to subtract state taxes to get realistic comparison. Even then,of course, there are regional differences, although not so much between OK and MO. Mo has 17.6 state gas tax and OK has 17.0 state gas tax. New York's tax is 44.5.
http://commonsensejunction.com/notes/gas-tax-rate.html
Louisiana has a 20 cent/gallon tax on gasoline, for comparison.
Alan
I stated in my post, and if you followed the link to the story it stated, clearly, that the ethanol was just one factor. It stated, taxes, proximity to pipeline (in which Mo is in good shape, but Ok is probably in even better shape,) as being two of the major reasons. I don't remember if "refineries" (such as those in La) were mentioned.
Jeez, I can't imagine the interest. It really was just sort of a throw-away, "isn't that interesting" comment.
Just out of curiousity: even using kdolliso's incredibly high energy content for ethanol, the difference is in the range of 1-5 cents against non-ethanol mandate states on a 388 cent product, which doesn't exactly sound earth-shattering to me. On a practical level will that actually make a difference to anybody on the buying side? (Clearly it's one way to provide support to farmers, but surely there are less environmentally damaging ways to vote them the money.) Even if you buy 150 dollars of gas you'll have "saved" just 1.93 dollars.
Of course, embryonic; you're, absolutely, Right. It's not a big deal.
However, the fact that we're now producing 9.2 Billion Gallons/Yr (600,000 Barrels/Day) probably IS a big deal. Ia State studied this and contend that Ethanol is holding the price of Gasoline down, on average, about $0.35 gal, nationwide. Others, such as Merril Lynch, put it as much as 60 cents/gal.
http://www.card.iastate.edu/publications/DBS/PDFFiles/08wp467.pdf
$0.35 X 144 Billion Gallons would be $50 Billion/Yr. Not a bad payoff on a $4.6 Tax Credit.
There are *MUCH* better ways to use that $4.6 billion. Investments that will provide over a century of Non-Oil Transportation.
http://www.lightrailnow.org/features/f_lrt_2007-04a.htm
Alan
Hello AlanfromBigEasy,
All I can say is I hope you and Ed Tennyson are called soon to testify/explain your ideas to a Senate Committee.
When that happens: I hope you guys can convince them that RR & TOD has to happen at a record pace, to try and offset the future hammerblow effects of WT's ELM, otherwise, we will be forced to cobble together simple, narrow gauge minitrains much uglier than this beauty:
http://www.monon.monon.org/sobendpixs4/03-26storyland-train2.jpg
http://www.monon.monon.org/sobendpixs4/03-26storyland-train1.jpg
I hope there are some TOD engineers working on easy ways to adapt a 4-cylinder Honda Civic motor plus a generator setup to quickly power lots of these minitrains. Just in case ELM starts to overrun our capacity to quickly change. Time will tell.
EDIT: Might it just be much easier, more efficient, and quicker to just use a Toyota Prius as the 'locomotive' straddling the narrow gauge track, then pulling 10-15 passenger and/or freight cars? Or is that just more of 'wild & crazy' thinking?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
$0.35 X 144 Billion Gallons would be $50 Billion/Yr. Not a bad payoff on a $4.6 Tax Credit.
So the tax credit is the only cost? Interesting. However, we have tacked on about $5/bu to a slightly over 10 billion bushel corn harvest. There's $50 billion in increased corn prices. In fact, there have been a number of areas of inflated prices as a result of the ethanol mandates. You conveniently overlook this in your analysis.
If in fact $50 billion was saved, it really amounts to just a government-mandated transfer of wealth.
Also, this assumes that all of the ethanol production is due to the credit. Perhaps it is. If so, this requires admitting that the very existence of the entire industry is dependent upon the credit.
If you want to use $6.00 Corn (the price before the floods,) okay; we'll start there.
First: Corn was Never $2.00/bushel. That's the subsidized price that the cattle producers, and Tyson, was paying. The rest of the difference between the real price, and that subsidized price is what I, and the rest of the taxpayers were paying. It came out to about $11 Billion/yr. Just go to treas.gov and look at Commodity Credit Corp.
So, I'll give you $3.00 bushel increased costs for field corn. That's about $0.06/lb. 2.6 lbs of corn in a pound of beef = $0.16 for a pound of hamburger. Maybe, $0.03 in a box of corn flakes. Whew!
We exported about 2.6 Billion Bushels this year. That's an extra $7.8 Billion we brought home to the States.
13.1 Billion Bushel minus .6 Billion Bu expected carryover = 12.5 Billion Bushels X $3.00 = $37.5 Billion - $7.8 Billion exports = $29.7 Billion for American farmers vs $50 Billion for Saudi Sheiks. I know which side I like.
13.1 Billion Bushel minus .6 Billion Bu expected carryover = 12.5 Billion Bushels X $3.00 = $37.5 Billion - $7.8 Billion exports = $29.7 Billion for American farmers vs $50 Billion for Saudi Sheiks. I know which side I like.
I notice the tax credit conveniently fell out of your analysis. And why would you say "before the floods"? Did the floods not happen? I have warned about this for a long time; that by increasing demand to such levels, as soon as there was a crop shortfall due to natural disaster prices would skyrocket. That's an inconvenient truth.
But bottom line is as I said. It is just a wealth transfer. And it wasn't a transfer from Saudi sheiks. In case you haven't noticed, they are making more than they ever have. If you are correct, and ethanol is depressing gas prices, it came out of the pockets of American refiners, cattle ranchers, and poultry farmers. Whether you think that was a good idea, that's exactly what it amounts to, not the Saudi Sheik example you love to tout. The ramifications in the refining industry are - when margins are low, so are investments in refining infrastructure.
Mexico was having severe problems with corn at $4 per bushel. I shudder to think of the impact of $8. If our leaders have even a shred of moral fibre in their beings, they would declare that for the duration of this emergency corn etahanol shall be illegal. Unfortuantely expecting moral rectitude from our leaders is a fools game.
They don't need to make it illegal, they just need to turn off the subsidy.
Economics will take care of the rest.
A wise decision indeed.
Pickens told lawmakers during a hearing on renewable electricity that he expected "the price of oil will go up further
Without alternatives, the cost of foreign oil will drain the United States of more resources, he said.
"In 10 years, we will have exported close to $10 trillion out of the country if we continue on the same basis we're going now. It is the greatest transfer of wealth in the history of mankind," he said.
Homegrown fuel is ONE solution to this.
Biofuels will account for 63 percent of oil supply growth from non OPEC countries this year, taking global production of crop-based fuel to more than 1.5 million barrels a day, the IEA said today.
http://www.worldwideag.net/index2.php?option=com_content&do_pdf=1&id=126...
Bottom line: Without Biofuels, crude would be quite certainly around 200$ a barrel as of today.
And that would mean, fertilizers, diesel and the other inputs into agricultures would be higher by magnitude.
$3.93 in Concord, NH.
Try $10.48 / US Gallon -I kid you not- the local Texaco station is selling Diesel at this price...
...in UK of course! Ouch...!!
One guy even put Petrol up to £2/litre to 'squash demand' -he made the front page... ($15.20/USG)
Nick.
I think the idea that change is needed is growing. I was shocked today when my work college asked about my little car and mentioned he wants to buy one. About 4 weeks ago he was saying I don't care if gas is $10 I'll drive my stupidly big car anyway, I love it.
I was shocked (shocked I say!)when I got off the bus in front of my building this morning. Out in front light rail construction is going on(Phoenix). We have a station and a traction power substation (TPS) under construction right in front of our building. So anyway there's some construction workers, probably electricians, working around the TPS and they have their personal vehicles. Now everyone knows that construction workers have to have their big pickups right? Wrong. These guys all have brand new compacts! One guy had his tool box all set up in his hatchback. I was floored. Heartened, but floored.
A good friend is CFO for a fairly large construction company. With some input from me, he has been downsizing the company fleet since Katrina. ENORMOUS resistance at first (and other company owners have asked his company owners "What's Up" with his guys showing up for estimates in Toyota Camry's instead of pick-up trucks).
Now everyone sees "what is up" and son of company owner may get their first company Prius.
Best Hopes for small steps,
Alan
I was over in Paris last weekend and they have loads of cute and cuddly Smart cars and scooters -everywhere.
C'est le new 'cool' it seems...
Oh and the rentable bicycles -big hulking things so nobody nicks them...
In fact its so much in reverse of Chicago (visited in Feb.) that you actually look up if a large Pick-up drives by. Oooo, look at that! I wonder how eee can afford l'essence? He is either tres riche ou tres stupide n'est pas! :o)
Nick.
Well that's a phrase we won't hear too much of in the future (unless you're in the UK)
If you're in the U.S. you just burnt through your year's quota of oil.
Good work Alan!
The best way to convince people is to involve them in getting the benefits.
I don't think the cerebral/physical difference is quite the issue. From my point of view, everyone has hundreds more things they ought to think about than they have time to think about. (Is my diet ok? Should I change bank account? Should I make changes to use less oil? What have I done to offend my wife? etc) What seems significant is that the practical effects of making changes are now giving immediate benefits, whereas in the US three years ago there'd have been virtually no short-term benefits from changing to more efficient cars. Given the time he made his pitch, I'm impressed with Alan's powers of argument.
The guys from different construction companies interact, especially at the field supervisor level. Before they got some guff for their "little cars' (Camry's etc.) and "I guess y'all can't afford anything bigger/better" and now they are returning it (I heard 3rd of 4th hand).
"I don't think y'all are going to get this bid. Too much overhead with those gas guzzlers of yours".
The first move to smaller cars was late 2005/early 2006 I believe; post-K when the city was being resettled. I had talked with him before that, but I think the gas price spike and how close we came to gas lines convinced him that there was WAY too little slack in the system.
Best Hopes for Small Steps,
Alan
Some more anecdotal stuff:
Last weekend, I was up in the mountain resort area of Crestline about 70 mi north-east of Los Angeles (I live in Pasadena, CA) helping a friend fix up a newly-purchased vacation home. She had several contractor and electrician types working on the house who arrived in the usual assortment of Explorers, Jeeps and F-250 pickups. She drives (at my urging) a Toyota Prius. A year ago, these construction types would have dismissed the Prius as some sort of Hollywood enviro tree-hugger green chic. Now they are actually envious -- one guy actually volunteered "My God, you actually were able to get one???" .
I have noticed a dramatic slowdown in average speed on the Los-Angeles-area freeway system. I would guess that about half the drivers are now doing 60-65 during non-rush hours instead of 75-80. However, it seems to be leading to increased conflict as the remaining half (a rather large percentage in big SUVs and pickups) now impatiently hot dog from lane to lane trying to get around the slower drivers. In the past we had conflict due to the California max speed limit for large trucks being lower than for cars. Now we have THREE speed ranges jockeying for lane space on the CA freeways.
Yesterday, at 11:30 PM (i.e. light traffic on the I-10 Santa Monica Fwy), I had my 2006 Jetta TDI on cruise control at 58 (where I can get about 43-44 mpg) in the second slowest of 5 lanes. For over 10 miles, I had a Cadillac Escalade tailgating me constantly honking and flashing his lights......
One other thing I find puzzling is that despite the high prices, I am seeing over a 50 cent spread in diesel prices just within the L.A. basin.
Good going! There are some people out in the world ready to listen in. Of course, the quickest way to get an American to listen, is to appeal to their pocketbook. :)
That sort of behavior is typical. I can't get the other drivers in my family to go light on the A/C. It can be 65 degrees outside (its never humid in Cali), and the first thing they do is turn on the AC. It seems almost impossible to reprogram the vast majority of people, energy is not even a concept to them, but obtaining comfort from pushing buttons is.
Todays fillup wasn't too bad 4.459. That was only 1cent more than last week. This is the first fillup that was't at leat .05 to .10 (or more) higher than the previous one in months.
'Let's talk about Political Candidates for a second...
Over the weekend Senators released their financial disclosure documents.
The following ought to raise alarms among voters - or perhaps not, given how silly we all are as Americans when it comes to personal financial management:
"Senators John McCain and Barack Obama released their Senate financial disclosure statements on Friday, revealing that Mr. McCain and his wife had at least $225,000 in credit card debt'...snip...
'Another charge card, held by what was described as a “dependent child,” had also accumulated debts of $15,000 to $50,000. In addition, a credit card held jointly by the couple was carrying $10,000 to $15,000 in debt, the filing indicated, at a stiff 25.99 percent interest rate. "
Good God.
At least $225,000 in revolving debt, with at least some of it carrying "subprime" rates? By the way, that $225,000 is the minimum - it could be as high as $565,000, but the Senate does not require exact disclosure - just ranges.
What in the Sam Hell is McCain doing?
And how can you possibly service that with the base salary as a Senator of $169,300 per year, before taxes?'...snip...
http://market-ticker.denninger.net/archives/P2.html
Because of his wife, he is a multimillionaire and owns several homes. So, this just makes this CC debt all the more stupid. And this is a fiscal conservative who is going to cut our federal deficit? The man is an idiot, pure and simple.
He said himself that he had a lot to learn about economics. His expertise is foreign affairs. In fact, this sounds a lot like GWB's economic policy; have you looked at our national credit card balance recently?
"What in the Sam Hell is McCain doing?"
in training to surpass bush's record of running up the national credit card by $4T ?
Today at 10am (ET) on C-SPAN (That's now)
Senate Energy Cmte. hearing on Renewable Energy Resources
Watch at http://www.c-span.org/watch/
Boone Pickens again explicitly said to the committee that he believes this is "Peak Oil"
Also Matt Simmons was on Bloomberg yesterday
Click above for story and video in new window.
Yeah, saw that peak is real moment on live TV. Some of the senators appeared to agree with Pickens. This hearing though was about building a PTC (Power Transmission Corridor) using Federal subsidies. Pickens also said we can't drill our way out of the current mess.
Some approximate quotes for those who missed it:
"I think the issue is so critical - we are in an emergency...They (oil producers) don't have as much oil as they say they do. It isn't there...And I do believe in Peak Oil. We have peaked out."
[...]
"We are caught in a trap...We have got to go to renewables there's no question about it."
[...]
"Could we drill our way out of it? No - there's no way we could do that...Don't have the idea our problems will be solved with a big discovery in ANWR!" (he gave a little geology lecture explaning why)
- T. Boone Pickens to Senate Energy and Natural Resources Committee.
This idea of sending in independent auditors to the national oil companies is really needed I think. I agree totally with Simmons on this one. wtf are we doing guessing about this stuff. However, this is probably something akin to the search for WMD's and could lead to conflict. This should at least be debated in the forum of the UN
Why would the National Oil Companies agree to have their reserves audited by independent auditors? How would it benefit them? How would you force them to be audited if they refused?
Why would the UN mandate it? Their oil is their oil and it is for them to do what they want with it.
That is the problem. Appealing to their global responsibilities? Start enforcing sanctions (food for oil?). I don't know...it would probably get ugly. But why should we be guessing about if there is enough oil left to last us x number of years. Can't we all just get along! Anyone else have a good argument to appeal to the sensiblities of the national oil companies?
Perhaps they would respond nicely if we simply stopped buying their oil?
Campbell's Oil Depletion Protocol was made public in 2002, I believe. Heinberg published a book with it as the title. IMO, it is the proper way to procede. The problem is admitting that there are limits to growth, that the West's lifestyle is indeed negotiable because unsustainable.
I have proposed the need to come clean about Peak Oil in order to establish the rationale for the Change in direction the USA, specificly, must make. I hope the ASPO-USA Conference will help policy makers realize this truth.
Air Canada cutting 2,000 jobs, trimming capacity
http://www.cbc.ca/money/story/2008/06/17/aircanadacuts.html
I have been telling my family for 2 years to travel now...while they still can (afford it, find a seat, safely do it..etc).
The job losses are starting to pile up. But worse, it isn't temporary.
I've been saying the same to my friends: if you don't care about the climate, now is the time to fly as you may not enjoy that privilege for much longer.
Every time I get on a plance, I wonder "is this the last time I will ever be able to fly?" Every time I get off a place, I say "god, I hope this is the last time I ever have to fly!"
U.S. car miles traveled peaked in the second quarter of 2007. Long haul trucking capacity has declined several percentage points this year and continues to scale back. Airlines are cutting their schedules.
Demand can be cut faster than higher fuel efficiency transport options can be brought online. In the U.S., peak transportation may be at hand.
Except that there is this from the EIA's most recent TWIP:
This has been pretty consistent recently in the weekly reports. Someone is using more aviation fuel this year than last. If it is not the airlines, who is it?
Well, airlines ARE using the fuel, of course.
Global aviation is up 5-8% this year (if H2 doesn't plummet).
People are still flying, because the prices are not going up.
The prices are not going up, because there is significant overcapacity in the industry AND air fare demand is very elastic.
Hence, people fly, until the airlines go bankrupt, overcapacity is removed and prices go up. At least until the oil prices crash (when recession becomes steep enough).
But 2009 may not be as pretty as H1 of 2008. Not for airlines and not for kerosene sellers either.
Hello Shargash,
From the TWIP: "Distillate fuel demand has averaged 4.1 million barrels per day over the last four weeks, up 0.7 percent from the same period last year."
I suspect the growing frenzy to try to Globally Mine, Globally Beneficiate, then Globaly Distribute I-NPK might account for some percentage of this growing diesel demand.
I don't see yet: billions of people using billions of wheelbarrows to move I-NPK billions of miles one way, then hauling grains, eggs, milk, and veggies the other direction.
Recall the words of TODer Souperman2 [paraphrased]: "For every barrel of crude supply lost to Hubbert Downslope depletion--it creates a year's worth of manual labor for 12 people."
I sure wish I could post the photolink again that showed 50,000 [or more] wheelbarrow workers--sadly now removed [Error 404].
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Read this then contemplate the state of US infrastructure;
"The Greatest Story Never Told"
Finally, the U.S. Mega-Bases in Iraq Make the News
by Tom Engelhardt
http://www.commondreams.org/archive/2008/06/16/9653/
"It’s a “16-square-mile fortress,” housing perhaps 40,000 U.S. troops, ...
As the Washington Post’s Tom Ricks, who visited Balad back in 2006, pointed out — in a rare piece on one of our mega-bases — it’s essentially “a small American town smack in the middle of the most hostile part of Iraq.” Back then, air traffic at the base was already being compared to Chicago’s O’Hare International or London’s Heathrow..."
“In less than four months, Balad Air Base Dirt Boyz have placed and finished more than 12,460 feet of concrete and added approximately 90,000 square feet of pavement to the airfield"
Tinfoil Hat Time
I have previously described my conversation with a French investment banker at ASPO-USA. I opined that a US attack on Iran would be to World War Three as Germany's attack on Poland was to World War Two (in that it would coalesce most of the world, especially Europe, against the US). He disagreed. He said that Western Europe and the US were secretly working together on plans to control the flow of oil from the Persian Gulf and to direct it to Europe and the US, and away from China. I thought that his scenario was scarier than mine.
Note the recent sharp declines in oil exports from VenMex and Russia and Norway (RusNor?), referenced in my comment up the thread. Europe and the US are trying to get more oil from the Persian Gulf and Africa to offset declines from Proximal Petroleum Producers, while Asia (especially China) is trying to get more oil from the Persian Gulf and Africa to meet increased demand--resulting in the ongoing rapid increases in oil prices.
One fly in the ointment is that Obama does not appear to have much enthusiasm for the Neocons' plan. So, presumably John (100 years, maybe a 1,000 years in Iraq) McCain has to be elected president.
So. . . I wonder if we might see a coordinated release of oil from OECD countries, in order to cover what they will describe as a "temporary" export shortfall?
Update: Vince Farrell, on CNBC, just talked about the upcoming producers/consumers (Elect John McCain?) meeting in Saudi Arabia. He urged Bush to release oil from the SPR, in order to drive the price down.
McCain did call the energy crisis the biggest single problem we face, is against corn ethanol, and is against coal liquification. Obama's both for corn ethanol and coal liqufication (so much for fighting special interests). I think McCain's got the jump on Obama in terms of energy policy.
As long as Bush & Cheyney still hold out hopes for an attack on Iran, I do not believe you'll see a release from the SPR. I think Bush cares less about getting McCain elected than he cares about protecting his legacy by fixing the mess he made in the middle east, the mess being that he has greatly strengthened Iran by taking out Saddam and installing the al Maliki government. And in general the neocons care more about establishing the American empire than they care about who runs it for 4 or 8 years. In short, a release from the SPR will be a sign of capitulation by Bush & Cheyney.
I have wondered for a while whether Western Europe would drive off the cliff with the US. There is little doubt Britain will. But the farther East you go in Europe, the bigger the energy shadow cast by Russia (as well as other shadows). I would think it would be prudent for Europe not to alienate Russia or China too much. But Europe has sone some spectacularly stupid things in the past, and they certainly could again. Interesting times we live in...
There is an important additional issue to consider, with no tinfoil hat to worry about. Chavez has explicitely stated that if the US attacks Iran he will cut off all Venezuelan oil exports to the US.
Therefore, unless the US is planning to sieze the oil-producing province of Venezuela, the oil supply shock will be huge, and it could last for very long.
I don't think it necessary requires a tinfoil hat. From the link that Leanan posted above as 'Ex-British Army Chief in Iraq Confirms Peak Oil as Motive for War; Praises Fraudulent Reconstruction Programmes'
So, if they admit, perhaps it has some truth to it.
These are the resource wars. Perhaps the MSM are not touting it as such at full blast, but what's going on in ME and Africa is classic resource grab by means of proxy (Nigeria) and direct use of military force (Iraq).
The Brit Brigader story linked here and up top lends credence to your French banker.
Fails the smell test in my view. A deployment like that, with long, vulnerable supply lines from the US to the Middle East, unpopular with every country being squeezed by this, with choke points in the Gulf, around the Horn of Africa, the Suez Canal, the Straits of Malacca, at a time when the US & UK are the only NATO members who aren't cutting down naval activity in response to the oil price.
The theory's too far fetched.
Some Texas poker players went all in without having a good hand.
In ACE's recent article on Saudi production he said :
"The trend of the recovery factor for Saudi Aramco indicates that there has been no effect on the recovery factor by recent technological advances in producing wells."
I though KSA was at the forefront of high tech? Do we see the same effect elsewhere – improved technology just gets the oil out more quickly, not more oil overall?
We are repeatedly told that the USA peaked at 50% URR and that this is how Hubbert predicted it. When I look at the production curve for the USA the area under the line post peak, at the moment, would seem to be declining more slowly than would be expected for a 50% peak.
What is happening in the USA? ... are the EOR techniques actually improving the recovery rate (unlike KSA) or do we expect a rapid decline rate eventually so that the pre and post peak production volume is the same? ie: Are the decline rate and the depletion rate the same value in the USA now?
Yes, according to Matt Simmons.
I've heard others claim it depends on the geology of the field in question, but Simmons seems pretty convinced that high-tech production methods don't increase the overall amount of oil recovered.
As someone who isn't an oil professional, but has read many of the descriptions of what happens in extracting a field, it would seem to me that advanced extraction techniques present an either-or situation.
You can extract the oil faster but leave more stranded in the water, or you can extract at a lower rate and pull more oil out.
For the past 50 years all the pressure has been on faster.
"We" (my idea, Khebab's hard work) generated a Lower 48 production HL model based only on production data through 1970. The post-1970 cumulative production, through 2004, was 99% of what the model predicted it would be. BTW, Hubbert did predict peaks at the 50% mark, but he basically made two If/Then statements. If URR for the Lower 48 is 150 Gb, then we peak in 1966. If URR for the Lower 48 is 200 Gb, then we peak in 1971. The 200 Gb number appears to be more accurate, and the Lower 48 peaked in 1970.
I used a similar analysis of Russian production (using production data though 1984 to predict post-1984 cumulative production) to suggest in January, 2006, that Russia would probably resume a production decline within one to two years, i.e., by the end of 2007.
These two HL case histories have obvious implications for world conventional crude oil production and for our HL based estimates of future net oil exports by the top five net oil exporters.
digfficult to compare the us, onshore at least, with ksa. in the us, it was typically primary depletion followed by secondary waterflood and tertiary co2. in the us, each recovery phase was typically applied at or near the economic limit. it was easier then to identify the incremental amounts.
for ghawar, at least aramco began pressure maintenance early in the field life and alledgedly maintain production at gravity stable rates. imo, eor for ghawar doesn't have much potential precisely because of the high efficiency of gravity stable production. all this smart well technology, multi laterals and monitoring is more correctly termed ior(improved oil recovery),imo.
unfortunately, i think the steep decline phase is what we are looking at for ghawar.
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7 Ways McCain Can Use Energy to Beat Obama by James Pethokoukis
http://www.usnews.com/blogs/capital-commerce/2008/6/16/7-ways-mccain-can...
"Climate change is never going to rise to the status of a top-tier political issue" is how one top climate-policy expert recently described the political lay of the land to me. Just take a look at the results of a recent NBC News/Wall Street Journal poll. The top issue for voters (27 percent) was job creation and economic growth. Right behind was the war in Iraq (24 percent). Then came energy and gas prices (18 percent). Far down the list were the environment and global warming, at a minuscule 4 percent. So despite all the media attention on global warming as an existential threat to humanity, it still scores a bit below illegal immigration in the hierarchy of voter concerns.
And there lies an opportunity for John McCain to turn the issues of energy and the environment to his advantage in his race against Barack Obama. Here are a few pieces of advice for Team McCain that I have gathered after talking to some political folks in recent days.
Ha Ha Ha. Just seven ways? Why not invent 20 or 30 ways, wouldn't that feel even better?
This just shows how desperate the mcSame people are feeling. Guess what, McSame will not be controlling the campaign agenda.
Uh, McAne will lose on the top two and will be done before one gets to issue #3. He knows nothing about economics and is as bad as you can get on Iraq. A flip flop on global warming won't cut it.
McCain finds no 'virtue' in U.S. oil policies
KrisCan
KrisCan Speaks with James Howard Kunstler
http://www.kriscan.com/archives/58
Looks like she's posted an interview with Kunstler (note: it comes in four parts). It's kind of amusing...Kunstler acts a bit like a jackass in the beginning but settles down - probably a defense mechanism.
Body language is interesting.
No kidding!
The herky-jerky youtube presentation doesn't help, but it was fun to see the posturing and fidgeting.
I think that JHK might have had a couple of beers before the interview, and it seems the bugs were bad.
Anyway, just want to say to Kris to keep it up. Your videos are always entertaining, informative, and funny. Although JHK has done essentially nothing to prepare for peak oil, he can't be accused of living in a McMansion or an overly ostentatious house. Anyway, JHK, you might check out some natural bug spray because that DEET stuff is just not good for you.
r4ndom,
A somewhat complex answer regarding effects of new technology. In new fields, like the Deep Water Thunderhorse coming on this month at 250,000 bopd, new techonology will get it out faster and probably recover more than older technology. But in older existing fields, like Ghwar in SA, new technolgies may increase flow rates while lower ultimate recovery a little. In the 1990's SA did a lot of horizontal drilling in Ghwar et al. Not only did flow rates jump but the percentage of water also went down some. But then you're back to rapid decline rates due to the rapid production rates. I have heard for many from expats that worked SA that they've been pulling the fields much to hard and we're significantly reducing ultimate recovery.
I'm in no way disputing that, but I just wonder as that would be tantamount to stupidity of megalomaniac proportions.
Surely they want to maximize the overall return for the only marketable asset they have? After oil, it's back to herding camels or selling back all the stock they've bought?
Also, this sounds to me like this is in direct opposition to what the House of Saud has told publicly that they will leave fields in the ground for the coming generations (of Saudis).
I bet the PR chief for the family must be smiling right now :)
Thanks, I figured it was more nuanced, sounds like it's more complex than I'd picked up on so far even.
Two stories today reference the idea that a refinery shortage is behind high oil prices. I must be missing something. Can someone explain how this could be true?
I would think that a refinery shortage would put a limit on how much oil they could purchase, which would put a cap on demand for oil. Limiting the demand of something should act against increasing prices. The price of the finished product would go up, because the refinery shortage would limit the supply. With capped input costs (oil prices) and capped finished product supply, crack spreads should increase, and it would be a sweet time to be a refiner.
That's not what we're seeing today. There is also the not-so-small matter of declining US refinery utilization, which makes no sense if there is a shortage of refinery capacity.
Am I missing something? Or are these people talking out of their ass?
I've been trying to understand this myself.
Also, if there were refinery shortages and a mismatch between API specific supply and demand, then the prices of various crudes would obviously diverge, right? At least the price difference between them would grow. However, based on my reading, the reverse has happened (see my post/graph above).
Now, what about all those Iranian tankers on the Gulf full of heavy sour crude that are waiting for buyers?
Somebody really needs to put all the pieces of this puzzle together.
Door #2.
That's what I've been thinking all along. But when numerous people continue to repeat something that sounds downright moronic to me, I begin to ask whether the moron might, in fact, be me. So I thought I'd float the question to see if someone could provide a rational explanation for the phenomenon or, failing that, to get some confirmation that these people really are morons.
http://www.theoildrum.com/node/2975
Declining Net Oil Exports Versus “Near Record High” Crude Oil Inventories: What is going on? (September, 2007)
Hello WT,
Just to make your posting a little more real: I expect your predicted trends to eventually make global product flowrates of sulfur, I-NPK, pesticides, and herbicides, to be trending down too. Obviously, this will not be good for our global food supplies. We really need to get moving on O-NPK recycling, IMO.
Have you hugged your bag of NPK today?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Let us somewhat artificially split the oil/products market in two pieces. The first half, light sweet crude, is supply limited, but there would seem to be plenty of refining capacity. The second half, heavy crudes, would seem to be refinery limited -that is what the Iranian tankers are indicating isn't it? Since the products from heavy crude are mostly interchangeable with those from light sweet, building more heavy oil refining capacity should easy the shortage somewhat. Maybe the propaganda, about lack of refining capcity being the problem is a half truth, as opposed to the big lie. Of course US refining capability -being for light sweet, is not a bottleneck.
Does coking capability further complicate this issue? IIRC adding coking capability means more fuel (less asphalt) per barrel. In principal this could reduce the shortage somewhat.
One point. The ongoing rapid crash in the Cantarell Field--second largest producing field in the world--is going to take a lot of heavy/sour crude off the market.
A refining bottleneck should increase the price of gasoline and lower the price of crude.
What you're missing is dishonesty. These people know better. They're just lying.
I expect the Kuwaiti oil minister to lie. But the Asia Times article starts out sensibly, explaining why speculation isn't behind the rise in oil prices. Then the writer provides the explantion: refinery shortages.
I guess my problem is that I expect that people who write articles for publication to know a little bit about what they're writing about, or at least to be able to engage in a little basic critical thinking. Sometimes I feel like I'm in the movie Idiocracy.
Ah, you're wondering about the pundit rather than his sources. There is where ignorance is more likely.
I have some lengthy pieces to write, including about the media and energy issues. And the short of it is that yes, you are in the movie Idiocracy.
Virtually anyone who has ever been quoted in the press or reads an article about something in their specialty has the same reaction - wow, they really got that wrong.
It shocks me that the same people just assume that everything else they read is basically correct.
It all comes down to diesel. There's a worldwide shortage of diesel. Thus, the price of diesel is very high.
You can make diesel from heavy crude, but there's a shortage of refining capacity for heavy sour crude. Without the right refining equipment, even the high price of diesel doesn't justify using heavy crude.
There's plenty of refining capacity for light crude, but there's a shortage of light crude supply. Refiners are bidding up light crude because they can make so much on it because of the price of diesel.
Thus, light/heavy spreads have widened to record levels: http://cfcr.ml.com/GetDoc.aspx?e=96GFIIQ37YRpmuDyDABTCKh0FYQdMVM60nzs%2f...
I hadn't thought about it from quite that angle (despite harping on the diesel thing for a while now). Even so, it seems perverse to call that a refinery shortage rather than a conventional crude oil shortage. And even at that, it can only explain the delta of light over heavy. It does nothing to explain why heavy oil is so much more expensive than it used to be.
Moe, I agree with you. I believe that the biggest problem is a shortage of refining capacity for heavy sour crude. I do not believe that the Iranians and Saudis are lying about 'the market being sufficiently supplied'...From their point of view it is...with heavy sour crude that they have discounted to light sweet. Yet, this heavy sour crude is sitting in Iranian leased tankers in the Persian Gulf. Why?
I think we need a further breakdown of ELM to show exports of light to heavy crude. Perhaps this data is unavailable?
One fact is certain: If Cheney wants a war with Iran a great way to get JSP behind him is to create high fuel prices during a deflationary recession with stagnant wages and declining jobs.
I am certainly no expert in the oil biz but I know a thing or two about the history of geopolitics and how easy it is to manipulate the public into a frenzy for war. The 'let us go democratize Iran' scam will not work again, so the neo-cons need a new humbug.
Hi River, I agree with you. Now that we are pinning ELM down to two separate worlds, the light and the heavy crude, we most definitely need to visualize suppliers and refiners in this way. I asked for this clarity up thread, about six hours ago. Can you believe how long it is taking to get results. :)
I provided you with a few links above. Here is another providing another small piece of the puzzle. And that small pieces are all one can find IS the problem. From another link: "Heavy oil exports rose over six per cent to 1.15 million bbls a day while light crude exports jumped nearly 18% to 646,400 bbls a day from 2005." This item is from one of the links I posted above. The link's parent is Schlumberger. Given you're in the oilbiz, you might contact them directly and see what info they might provide.
Thanks for that PDF! It completes one piece of the puzzle for me. So, the spread between heavy and wide has indeed been widening, just as hypothesized. I should have plotted different crudes on my graph above in this thread.
Also, it is worth noting that distillate crack spreads seem to be increasing across the board.
Even kerosene (aviation petrol) crack spread is near record high.
That's an extra ouch for the airlines, who are already hurting from the very high base crude price.
If ML is right, the gap will not close for the foreseeable three year or so (barring crashing of demand).
If so, then the airlines truly are toast - even if base crude price for them was to drop to $100-110 per barrel. The spread is just too wide and that would mean an additional 35-45% increase in fuel costs over 2007 (year-to-year).
There is no way they can survive without passing a bulk of that to fare prices, regardless of how their derivative price protections work (60-70% average, for the next 6-8mo or so).
If any of you hold airline stock now, it might be the time to check their fundamentals and ability to stand bleed for a long time :)
The most that you could say is that there is a mismatch between refining capacity for heavier grades versus lighter grades. I'm not even sure that is the case.
The people who dream up the talking points want to throw out any possible issue in order to direct attention away from the main problem - plateaued supply. It's the same reason that magicians tend to have pretty assistants in skimpy outfits.
Those in the media who repeat the talking points read whatever comes up on the teleprompter.
You are of course right about the supply.
But people don't look at that, they look at the price.
Thus, they are interested in any and all gimmicks that might explain away the rise in price.
Never mind the supply.
I think Soros said it the best: fundamentals are driving the price, but there is a bubble superimposed on top of that base movement in price.
I bet my money on that. The bubble may not necessarily be all speculative. It can also be a temporal refinery mismatch "hike", but it will inflate, if the mismatch corrects faster than the base supply turns bad.
So, a correction of some sort might be in the cards, although in the grand scheme of things, I doubt it makes that much of a difference. Still a lot of pundits would come out and say "peak oil debunked!", if a correction were to happen.
We shall see, when we see.
SamuM, I do not see that a shortage of refining capacity for heavy/sour crude is in any way a debunking of PO fact. It is just one more above ground factor.
I am simply looking at the situation from the point of view of the oil producers. They say the market is adequately supplied and from their point of view the market is...if the consuming nations do not purchase what producers have for sale.
I do not see how it is the responsibility of oil producers to insure that purchasers of crude oil have the correct type of refineries in place to refine what is currently available for sale. If there is a shortage of sweet/light oil for export is that the fault of producers?
As for bubbles in the oil market the only change I see is that investors are looking for a place to make a return over inflation on their money. Investors look out over the markets and what is available? Stocks? Bonds? Treasuries? Real Estate? Land? ETFs?...losers. Worse yet, all of the 'investments' that I mentioned above and more are now being manipulated by the Treasury, the Fed, congress and Wall St. But commodities...well, some are making money in commodities...some are losing money in commodities...but at least the winners are beating inflation. Investors are gamblers but IF they win they want a return over the amount they bet. Bernanke attempted to reinflate the RE bubble. It didn't work and instead the slosh that he created headed to a casino where the Fed and Treasury could not change the chips and rules whenever they wanted. The new chips are commodities. So his experiment has failed...and we will collectively pay for his mistake and it is going to be very painful.
Yes, I agree. But tell that to everybody else watching CNBC/CNN/FOX/whatever :)
Again agree. Then again, they may be not directly lying in their own opinion, when they say there is enough liquids on the market (combined), even if it's of the wrong variety.
Silly of course, but another year or so lost in confusion and they are able to deny easy light oil peak. I believe this is part of their long term pricing strategy: deny, slow down substitution, ensure long term price after plateau/decline.
Well...this is a pretty straightforward headline on Reuters:
World crude production has peaked: Pickens
Panic over. All our transport problems are solved!
Not one, but two vehicles for the future...
Honda unveils its first hydrogen cars
Or if you trade in your old SUV you could get one of these...
Cardboard bike unveiled
Any ideas on which will turn out to be the more practical? ;)
Next up. A cardboard, hydrogen powered, car. But seriously, how about a cardboard car? Or maybe a cardboard electric scooter. Instead of HOV lanes, how about cardboard car lanes to deal with the safety issue?
my favorite is the electric powered inflatible pup tent that can be folded up and carried on your back :
http://www.xpcarteam.com/
(click on products)
Just finished a "town meeting" over the phone with my U.S senator Barasso (Wyoming). Interesting that the standard comments came from some particpants about drilling the OCS and ANWR. He didn't claim that would solve the problem but he said states should have the option to allow drilling on the continental shelf areas. I wonder if the ANWR drilling might become "offshore" before they get the field developed and depleted? Doubt that any one wanting to drill ANWR considers that! Too much of what the senator said was long on generalities but short on specifics as concerns our current energy mess. I hate to say it but I doubt he hears much from the oil lobby about peak oil.
I did try to put in a plug for Alan Drake's electrification of the nation's railroads. Ran out of time to get a response but we gotta plant the seeds whenever the opportunity comes along. No magic bullets to cure our energy woes but we gotta do something to conserve. At least Alan's proposal is something positive that could really make a significant difference over time.
THANKS !!
You do not know how encouraging that is !
Best Hopes,
Alan
Alan;
You've probably got more people plugging for your Light Rail proposals than you'd suspect. My challenge now in Maine is to find some of the preparatory baby-steps that will keep moving our representatives in this direction. There is generally some encouragement for this path, but the magnitude of it is daunting to the keepers of our stretched economy. How to get the Nose of this 'Big Pill' into the tent.
Many thanks for your Best Hopes!
Bob
I'm lobbying in Massachusetts in hopes of expanding the MBTA as far as possible, and by that I mean ME, VT, CT, and BY. Wish me luck.
Ed Tennyson and I are working on a proposal for MBTA to add-on to the order for EMUs (self propelled electric passenger rail cars that can operate singly or in trains) for SEPTA (Philly). This order replaces the cars that Ed ordered 42 years ago.
Please send me an eMail :-)
Best Hopes,
Alan
"Scarlett, I do give a damn"
"
Likewise. Here in Australia it is difficult. Very large distances, with sparse population. But we are pushing for it.
Can someone help me?
I need a good link to explain why the argument "we made it through the great depression" is bunk... I have seen good links from here or postings on here that explain how different we are from the Great Depression US - but it'd be great if anyone has a good link to hand.
Cheers
1. We didn't all make it out of the Great Depression
2. It really sucked while it was going on
3. It took a World War that caused 50 million deaths to pull us out of it.
What, that's all? Any neocon worth his cocaine would say that's a small price to pay for manufacturing our own reality. On to World War III!
It wasn't an energy crisis. Ask them how things turmed out for nations that faced incurable commodity crises: Maya, Anasazi, Angkor Wat, Rome...
Cheers
I need a good link to explain why the argument "we made it through the great depression" is bunk.
"we" - as in the people in the conversation most likely did not participate/'made it through'
"we" as a nation/world - plenty of people did not. What makes *YOU* think that *you* will be part of the 'make it' group?
As my dad would say 'what's this we thing kemosabe? Do you have a turd in your pocket and want to share?'
Yeah, the use of "corporate pronouns" is on the rise as promoted by the propaganda system, especially The Weather Channel.
I would argue the "we" part of "we made it through the great depression" makes the article bunk as many did not; nor did WW2 end it, as in the UK's example of continuing depression after the war. I have no link to offer. I just did my own studying and obtained this knowledge over the years. Often one must read books, not the internet.
I think these are factors - based on somewhat "educated" guesses:
WW II developed a manufacturing base. Post WW II the USA had the benefit of being about the only industrial country that did not have its manufacturing capabilities decimated (i.e. aside from Pearl Harbor, the US was not carpet bombed) so we were able to maintain the momentum provided by the war itself.
Even during the Depression the gov't wasn't flat broke as it is now - there were gov't resources to be used to help pull us back from the brink (i.e. the New Deal).
At least some members of gov't hadn't forgotten that they served the people and not just lobbyists.
Lower overall population and (this is a guess) a larger percentage of this population able to be somewhat self sufficient (i.e. more farms and just a larger general knowledge base back then vs. more specialization today).
Plus the GI bill after the war IMO played a great part in jump starting post-war prosperity.
... how different we are from the Great Depression US
We had 70 more years of going UP Hubbert's Peak.
Gas was 20-30 cents a gallon and would be for about 20-30 years
There was only 10 - 20 or so food consumers per farmer, Now it's about 50 to 1
The Green Revolution was ahead of us.
US Debt was not there
US PRIVATE Debt was not there (on the scale it is today)
Everyone knew how to and DID grow a garden
SOOOOO MANNNNY differences.
The 1930's etc were a different moral code. "I don't take handouts, I want to work/earn what I get" vs a generation coming up on "GrandTheftAuto" Smash and grap morals.... the "I DESERVE...." generation
on and on.
There are a lot of good books of the history of the depression. I like John Kenneth Gailbraiths version. He lets some people off the hook that are skewered in other's histories but he is a great writer and adds lots of humor to the prose...not easy when writing about such terrible personal tragedy for so many people.
One thing that has not changed is that there are plenty of scoundrels in government and economics now just as there were in the great depression era. The dismantling of the Glass-Steagle Act, which was one of the safeguards put in place to avoid another great depression, was carried out by such scoundrels.
Denninger at Market Ticker has an interesting slant on what is going on with oil vs the Fed:
'See, The Fed and Congress can't debase the inherent value of a gallon of gasoline. If your car would go 30 miles on it ten years ago, it will today. And tomorrow. And 20 years hence. The utility value can't be destroyed, unlike the "paper value" of a Treasury Bond if The Fed takes $400 billion worth of trash on its balance sheet in alphabet-soup swaps!
This is extremely dangerous because when utility commodities start being treated as a currency you're done as a Central Banker. Your ability to control that market becomes a literal zero - unlike Gold and (to a lesser extent) Silver, where you could buy "reserves", the central banks are not empowered to buy oil, wheat, corn and soy, nor could they do jack with it if they did - the value in these things is in their utility, and they cost real money to store, unlike bits on a disk somewhere!'
http://market-ticker.denninger.net/archives/P16.html
People back then were really, really tough.
I mean, the Americans were considered the softies in World War II and you should see what the draftees had to put up with on the far-flung fronts. A large number of families simply threw their teenaged kids out during the Depression so they'd have enough food to feed the younger ones. The teens became homeless drifters, good practice for their future as infantrymen.
The Russians were losing 20 to 50 million of their best and brightest to Stalin, and then turned around and lost another 20 million to Hitler, ending up stronger than when they started. The Germans, who had just lost nearly a sixth of their male population to a war, were getting themselves hyped up to do it again.
Of course, all their grandfathers griped at them about how soft they were compared to folks back before electricity and medicine.
So the problem is that we've never asked people to suddenly become that tough after having had it easy for so long.
European population was young and had grown tremendously over 19th centruy making a larg pool of young men who had to do something. War is perfect for this situation as economy is not always so well managed to maintain 100% emoployment or even close. So vaccines and modern medicine reducing child mortality along with unstable economy lead inevitably to wars. European populaiton and Japanese are now stable or declining, same in China and MAD with nukes prohibits war to some degree. At any rate lots of countries have huge populaitons of men in young adulthood for military purposes, see Arabs, India, etc. so that war in a serious economic downturn or due to PO is very likely. This is however a good thing to reduce excess population as mother nature's natural balancing process has been prevented by human technology.
1930's world population ~2 billion
2008 world population ~6.7 billion
In "The Black Swan", Taleb spends a little time on what he refers to as the "retrospective distortion" of history --i.e. as if looking in the rear view mirror of the lucky survivor tells the whole story. It doesn't.
"We made it so far" is the narrative fallacy that 2 yr old turkeys tell each other the day before Thanksgiving. You'd have to read the book to better understand. But basically, all those who didn't make it through the first Great Depression are not here to tell their story, their missing part of history. History is always incomplete and wrongly biased towards an optimistic outcome.
Yes, someone made a comment a week ago about the Irish "making it" once they got to the USA. I pointed out that most of those that got to New Orleans died, tens of thousands digging one canal, many more in epidemics, heat stroke, etc.
Alan
I found this site that shows a nice graph of the traffic to theoildrum.com.
http://siteanalytics.compete.com/theoildrum.com/?metric=uv
Traffic is up about the same as the price of oil in the last 6 months.
Bad news from the Midwest floods that bodes ill for the rest of the year: "The American Red Cross said Monday its disaster relief fund has been completely spent, and the agency is borrowing money to help flood victims throughout the Midwest." http://news.yahoo.com/s/ap/20080617/ap_on_re_us/midwest_flooding
Hello TODers,
http://www.resourceinvestor.com/pebble.asp?relid=43688
-------------------------------
...The International Atomic Energy Agency just released its Uranium 2007: Resources, Production and Demand report...
...And In Situ Leach (ISL) mines are having a problem finding sulphur – at any price (sulphur is up over 1000% in price over the last 3 years) to mix in their solutions to help extract the uranium.
-------------------------------
Don't you wish you had a huge warehouse full of sulfur?
It will be fascinating to see postPeak if the demand for food wildly outweighs the demand for electricity. Recall that currently over 60% of sulfur goes to make I-NPK to grow our food.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
About the WSJ article on drivers reaching the tipping point, I always wondered what it would take for car buyers to give up their trucks and SUVs, and things have tipped dramatically. Just a month ago, I could find Altima Hybrids on sale for $22,500. They're now selling for $24,000 (full MSRP minus a factory rebate). I was really surprised how well truck sales were holding up at $3 a gallon, but one Ford exec says $3.50 gas was the breaking point. $3.50 nationally would've been about $3.80 in California which would've been about 3 months ago. It's up to $4.60 now for regular, and people are lined up out to the street at Costco to save 15 cents a gallon on gas. Good thing I don't drive much.
http://www.leftlanenews.com/fords-mulally-350-a-gallon-gasoline-was-brea...
Hello TODers,
Recall that I have posted links on this before, but it still strikes me as a huge environmental catastrophe in the making:
http://www.miningweekly.com/article.php?a_id=135841
-------------------------------
Bonaparte says Namibian phosphate sampling plans well advanced
...The phosphate deposits off Namibia were delineated during regional studies in the 1970s but have remained undeveloped to date. The deposits occur as unconsolidated sea floor sediments, which could now be efficiently mined by applying currently available dredging technology.
----------------------------------
Any TOD dredging experts care to reply?
Hello TODers,
http://www.bloomberg.com/apps/news?pid=20601081&sid=aqnKJVOXBluI&refer=a...
--------------------------
Food Prices to Stay High Until 2015, World Bank Economist Says
...The World Bank says that the cost of transportation to landlocked countries such as Mali often doubles the price of fertilizer. In Thailand, by contrast, delivering fertilizer accounts for only around a fifth of its price, Sallah said.
``There are headwinds in increasing supply, including global warming and the high cost of fertilizer,'' Sallah said.
---------------------------------
Too bad there was no PostPeak and ELM analysis in this link. In other words, are they just briefly alluding to the possibility [or Fact?] that food prices will stay high until the Overshoot population decline rate is sufficient to match the Hubbert Depletion and ELM rate? How many people might die between now and 2015 to bring this cheap food pricing equilibrium about again? 500 million, 1 billion, 2 billion, more? From memory: I think we are already at 35,000 per day of kids under five.
Recall that the POT topdog, Pete Doyle, said we need record harvests everywhere, from now on, if we hope to avoid huge famines. I would suggest that we do not see evidence yet that farmers are having easy and highly productive fun in their fields, but that the Grim Reaper is instead gearing up for a record harvest.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I was browsing over at Jeff Master's site and he posted this link - maybe a bit off topic but historically linked to TOD.
NOAA: New Orleans at Risk From Cat. 2 Hurricane
http://abcnews.go.com/US/wireStory?id=5179858
Doesn't a CAT2 seem a bit low of a standard to build to.
Even CAT3 would be better.
New Orleans was promised Cat 3 protection in 1968 by the US Army.
Through a mixture of incompetence and malfeasance, we did not even get Cat 2 protection.
After Katrina, we were supposed to get the long promised Cat 3 protection by 2010. But GWB and Cheney slowed things down and now 2011, maybe.
Best Hopes for Good Luck for the next 3 years,
In 2008, we may be helped by the unusual quantity of cold water coming down the Mississippi River, from both spring melt (heaviest in a decade) and recent Iowa floods.
Alan
My brother has a Road Home house I'd like to invest in. The primary roadblock - besides the bank having lost the paperwork - is my reticence to live in a flood zone that stands a farily high chance being flooded. (It sould be noted I am including sea level changes in my long-term planning.)
Cheers
The issue in New Orleans is two fold. Rainwater flooding (of which New Orleans has superb pumping capacity, only street flooding with 20" to 24" of rain in 24 hours) and whether the US Army screws up.
After 2011, we should have Cat3/4 protection and the odds of a strong Cat 4 or 5 direct hit are quite low.
Where in New Orleans is the home ?
Road Home was offering elevation grants till last Monday to raise existing flooded homes.
Sea level rise in the next 30+ years is likely to be minimal and the state is planning to use new off-shore revenues (we get half from leases made after 2005) to coastal restoration. Unlike EVERY other sea level city we have an effective mitigation strategy with a successful prototype. Divert spring Mississippi River water into the swamps with low energy gates in the levees and let river silt build up the coast.
Post-Peak Oil New Orleans has quite a few advantages. We are the low energy transfer point for 2/3rds of the USA (6 of the 7 Class I Railroads, one of the busiest RR bridges in world, the Mississippi River and East-West Intercoastal Canal cross here), the expanded Panama Canal opens in 2014 and we are the closest Gulf port to the Panama Canal.
Pre-Katrina we were tied with New York City for fewest miles driven by residents (my goal this year is <60 gallons). Our local cuisine is based on local ingredients and what came by water in the 1800s.
And one can truly live here, rather than just wait for doom :-) Superb food and music, beauty and character.
Best Hopes for New Orleans,
Alan
This website has made me truly understand the problem we are facing.
But I would like one graph that i think is *very* important and that I've never actually seen.
Month-Month Consumption (aka Demand) of Crude Oil vs. Production... or, put a better way, percent rise/fall in Demand vs. rise/fall in Production.
yes, this site is brilliant.
as for your Q I'd say Demand is "virtual and imaginary" thus it's just an artificial number used by some institutions to pretend that they are doing a job ... of some kind.
Supply = Supply (demand) B/c everything prodused is sold and used "the same day" . Demand for oil, in the conventional understanding of the word is gone or dead IMO. There is just an auction ....
isnt the difference between supply and demand just inventory? supply = production and demand = production - inventory(crude oil + refined products)- refinery gain. i suppose this would be wholesale demand. i assume that is why crude oil traders watch inventory so closely, it gives them a guage on demand.
Hello TODers,
With all the problems China is having lately, I am beginning to seriously wonder if their Olympic Games will be a huge bust because they will have much more serious concerns to attend to:
http://news.bbc.co.uk/2/hi/asia-pacific/7459628.stm
----------------------------
More floods threaten south China
----------------------------
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Whatever the cost, China is not going to let the games be a bust.
The Olympics in London in 2010 will be though.
We will be further into peak oil by then, and the British Government sould be effectively bankrupt.
See the article on UK inflation.
Hello TODers,
Recall that some NPK-newbies wanted some more information. IMO, the following link is mostly a "Hurrah, aren't we just Great PR release".
http://www.gulf-daily-news.com/Story.asp?Article=220525&Sn=BUSI&IssueID=...
---------------------------------------
Fertiliser industry's role in food security praised
He said the world consumption of fertilisers witnessed a major growth amounting to eight per cent during the period from 2005 to last year which equals seven million tonnes annually.
Forecasts indicate that demand for fertilisers will increase at an annual rate of around 2.9pc during the period from last year to 2012 which means doubling the annual rate witnessed in the last five years of the previous decade.
The world fertiliser consumption will reach around 173m tonnes this year and this rate will increase to reach 193m tonnes in 2012.
--------------------------------
As Usual: No mention of the Hubbert Downslope and ELM effects possibly making these projections very difficult to make as the population grows 70 million/year.
I think the UN FAO does a better job of pointing out the possible difficulties ahead if one carefully analyzes this document with a critical thinking mindset [57 page PDF Warning]:
ftp://ftp.fao.org/agl/agll/docs/cwfto11.pdf
-----------------------------------
Current world fertilizer trends and outlook to 2011/12
[Page 14]...High oil prices could depress the use of oil-based fertilizers which have been behind much of the increase in farm production during the past half century.
[Page 15]...Freight rates have become a more important factor in agricultural markets than in the past. Increased fuel costs, stretched shipping capacity, port congestion, and longer trade routes due to altered trade patterns, have pushed up shipping costs...The impact of transport costs on fertilizer prices will grow as fertilizer is produced in fewer localities close to raw materials and ample energy availability.
[Page 15]...The decline in the United States dollar against most currencies since 2005 has made imports from the United States cheaper and lessens the true impact of the rise in world prices. This is a major reason behind the brisk world import demand that, in spite of high prices, shows little sign of retreat.
[Page 17]...Conversion of grain areas to vegetable and fruit production will translate into higher fertilizer demand as average application rates for the latter is about double those for grain crops.
[Page 20]...At the same time, concerns about the impact of nitrogen and phosphorous losses to the environment will call for increased recycling of organic nutrient sources.
[Page 29]...Nitrogen and phosphate production capacity exists in only 11 and 6 countries respectively. High transport costs in land locked countries contribute to prohibitively high fertilizer prices. An array of other factors which further limit input and output markets, severely constrain fertilizer use.
[Page 34]...Nitrogen use efficiency is declining as nitrogen fertilizer consumption increases faster than grain production.
Yields and nitrogen use efficiency should be increased simultaneously.
------------------------------
I believe I have discussed and newslink-addressed multiple times all of the issues listed above with a Peak-Everything-Outlook that is not included in many agricultural reports. Please feel free to examine my postings in the archives for further details.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Great find and thanks for the snippets! It's good that the obvious things are finally coming obvious to FAO also.