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DrumBeat: August 15, 2008
Posted by Leanan on August 15, 2008 - 10:07am
Tropical Storm Fay Forms Over the Dominican Republic
(Bloomberg) -- Tropical Storm Fay formed out of an area of low pressure over the eastern Caribbean Sea today and may pose a threat to Florida and the eastern Gulf of Mexico.The system was located over the Dominican Republic as of 5 p.m. New York time. It was moving west at 14 miles (22 kilometers) per hour, according to the U.S. National Hurricane Center's Web site. Fay is the sixth named storm of the 2008 Atlantic hurricane season, which began June 1 and runs through Nov. 30.
The hurricane center projects the storm's track could pass over the eastern Gulf of Mexico by Monday. The Gulf is home to more than a quarter of U.S. oil production.
Shell Not Yet Evacuating Staff in U.S. Gulf on Possible Storm
(Bloomberg) -- Royal Dutch Shell Plc, Europe's largest oil company by market value, said it is has not yet started evacuations of offshore staff in the U.S. Gulf of Mexico as a tropical depression may develop in the Caribbean.``We have not initiated any evacuations and there is no impact to Shell-operated production at this time,'' Shell said in a statement on its Web site yesterday. ``It is too early to know if the system may impact the Gulf of Mexico,'' it added in a statement. Shell said it is prepared to begin evacuations to reduce offshore staffing levels, if necessary.
Brazil Navy plans maneuvers to defend new oil find
SAO PAULO (Reuters) - Brazil's armed forces will hold maneuvers next month to show they are capable of defending new offshore oil reserves that could convert the country into a global energy player, a senior official said on Friday.
Nigerian troops kill 12 militants in delta attack
PORT HARCOURT, Nigeria (Reuters) - Twelve Nigerian militants and a naval officer were killed in a gunbattle on Friday near a Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) natural gas plant in the oil-producing Niger Delta, military and security sources said.
Why oil is headed for $100 a barrel -- or lower
In the 11 months ending early last month, the price of oil nearly doubled, reaching more than US$147 a barrel. Even some in the oil industry were a little unnerved by this trend, since it raised the eventual prospect of a severe global economic slump.But there would be no help for consumers or businesses hurt by high oil prices, some analysts argued. Even as rich countries cut consumption modestly, fast-growing new industrial powers like China would use much more oil, squeezing limited global supplies and leading to US$200 oil within the next few years.
Maybe, but then again, maybe not.
Zenn and the art of small, electric vehicles
It might sound surprising, but all-electric vehicles are already on American roads. They just haven't quite made it to the highway yet.
Electric bikes sell briskly as gas prices climb
NEW YORK - When Honora Wolfe and her husband moved to the outskirts of Boulder, Colo., she wanted an environmentally friendly way to commute to her job as a bookshop owner in the city.Wolfe, 60, found her solution about a month ago: an electric bicycle. It gets her to work quickly, is easy on her arthritis and is better for the environment than a car.
So far, the international economic consequences of the war in the Caucasus have been fairly minor, despite Georgia’s role as a major corridor for oil shipments. But as I was reading the latest bad news, I found myself wondering whether this war is an omen — a sign that the second great age of globalization may share the fate of the first.If you’re wondering what I’m talking about, here’s what you need to know: our grandfathers lived in a world of largely self-sufficient, inward-looking national economies — but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism.
Writing in 1919, the great British economist John Maynard Keynes described the world economy as it was on the eve of World War I. “The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth ... he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world.”
And Keynes’s Londoner “regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement ... The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion ... appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalization of which was nearly complete in practice.”
But then came three decades of war, revolution, political instability, depression and more war. By the end of World War II, the world was fragmented economically as well as politically. And it took a couple of generations to put it back together.
So, can things fall apart again? Yes, they can.
On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.
China's Three Gorges project generates 250 bln kwh of electricity since operation
YICHANG (Xinhua) -- China's Three Gorges hydropower project has generated 250.4 billion kilowatt-hours of electricity as of Friday since its first turbine began production in July 2003.The amount is around eight percent of the country's total electricity consumption in 2006, which stood at 2.82 trillion kwh.
Ill. residents to pay 30% more for gas
Illinois gas customers will pay as much as 30 percent more than last year, Ameren said Thursday.Higher worldwide demand for energy has driven up the market prices of petroleum and natural gas, the company said.
As Gas Prices Swell, Trailers Shrink
Back in the glory days of guilt-free driving and dirt-cheap gas — say, around 2004 — motor home aficionados worshiped at the altar of size. Who cared if a 34-foot luxury R.V. got six miles to the gallon? Now, of course, things are different. A fill-up for a diesel-swilling movable McMansion might soon cross the $500 threshold. Credit is tight, the economy is concave, and motor home sales have tumbled each year since peaking in 2004; this year is shaping up to be the worst overall since 1992. Analysts are predicting that the R.V. industry has yet to hit bottom. But there is a ray of hope in the new wave of smaller motor homes and campers that can be towed by any car — like the Go. If this trend were a movie it would be called “Honey, I Shrunk the Camper.”
Connecticut Energy Scarcity & Security Analysis
In the wake of the Peak Oil & Natural Gas Forum held in November 2007, Representative Terry Backer has taken the lead to further investigate this issue and has recently been appointed as Co-Chairman of the 2008 Energy Scarcity & Security Task Force. The first meeting convened Wednesday, August 13, 2008. The following information provides insight into the group’s efforts to remedy a very serious and growing problem surrounding petroleum and natural gas issues and the current fuel crisis.
U.S. crude futures fall more than $3, below $112
NEW YORK (Reuters) - U.S. oil futures fell more than $3 on Friday, dropping below $112 a barrel to a 15-week low as the dollar rallied broadly on worries about other economies slumping, fueling growing concerns about sliding demand.
OPEC Report Warns of Sharp Oil Inventories Build, Stockpiling
The Organization of Petroleum Exporting Countries Friday warned a global economic slowdown will lead to further weakening of oil demand growth, and highlighted the potential for a sharp build in crude oil inventories."With current OPEC production well above the expected demand for OPEC crude, there is potential for a sharp build in crude oil inventories," OPEC said in its monthly report.
The current contango structure of the crude oil futures market, where near-term futures' contracts months are cheaper than delivery dates in the future, indicated current supply is more than sufficient to meet demand and would further encourage stock building.
BP: Force Majeure Declared on Baku-Supsa Oil Pipeline
Supsa oil pipeline, which was shut earlier this week following a military conflict in Georgia, has declared force majeure on exports, a spokesman for BP Plc said on Thursday.
Venezuela assures Paraguay of diesel supply
Venezuela will send an additional shipment of 70,000 cubic meters of diesel to secure Paraguayan fuel reserves, said on Thursday Cíbar Granada, the next president of Paraguayan state-run oil company Petróleos Paraguayos (Petropar).
OTTAWA–Statistics Canada says sales of new motor vehicles slipped to 143,270 units in June, down 1.0 per cent from May as buyers shied away from gas guzzlers.Sales of new trucks, including minivans and SUVs, dropped 2.4 per cent to 63,746 units, continuing a trend that began at the start of the year.
Studies and reports suggest that housing and food costs are chiefly responsible for the growing inflationary pressures. In Saudi Arabia, rents, fuel and water costs increased by 18.5 per cent in May. Food and beverages grew by 15.1 per cent in the same period. With regards to inflation in Kuwait in February, rental rates increased by some 16 per cent, followed by rise of 15 per cent in drinks and tobacco products and 9 per cent in food stuffs.
Recurring floods at uranium mine hurt Cameco
TORONTO - Cameco Corp. posted a 27-per-cent drop in quarterly profit and trimmed its 2008 production outlook yesterday, while the company's CEO said to expect delays in overhauling its Cigar Lake uranium project after additional flooding this week.Speaking on a conference call, CEO Jerry Grandey said the company would need some time to determine the full impact of the water inflow reported Tuesday.
However, he acknowledged it would affect the company's overhaul of the mine, which has been under repair since it flooded while under construction in 2006. The mine is the richest undeveloped uranium deposit in the world, with the potential to supply 10 percent of global needs.
Soaring fuel prices and green pressures herald comeback for Britain's waterways
Britain's waterways are on the brink of an astonishing revival – and some of the UK's biggest trucking firms are leading the way. The UK's long-neglected latticework of canals and rivers, which once helped to jump-start the industrial revolution, are poised for a renaissance.
Drivers Spend More on Fuel Than Cars for First Time Since 1982
(Bloomberg) -- Consumers spent more on gasoline than vehicles and parts for the first time in 26 years in May and June, as U.S. pump prices headed for a record.Gasoline accounted for about 4.4 percent of spending in June, compared with 3.9 percent for autos and motor parts, according to the U.S. Bureau of Economic Analysis. Both were at about 4 percent in May. The last time gasoline exceeded cars and parts as a percentage of spending was in January 1982.
``Prices of cars, particularly on a quality-adjusted basis, have been trending lower for many years, and the price of gasoline is obviously hugely higher over the past few years,'' said Dana Johnson, chief economist at Comerica Bank in Dallas. ``The two trends have crossed.''
Mexico sees 2009 oil output at 2.7-2.8 mln bpd
MEXICO CITY (Reuters) - Mexico's state-run oil monopoly Pemex sees 2009 crude production at between 2.7 million and 2.8 million barrels per day, Carlos Morales, the head of exploration and production, said on Thursday.Pemex estimates this year's production at around 2.8 million bpd.
Rebel leaders 'disappeared' by Mexican govt - mediators
MEXICO CITY (Reuters) - Mexican security forces kidnapped and "disappeared" two members of a leftist rebel group that bombed energy pipelines last year, said a panel mediating guerrilla and government talks on Thursday.
Saudi oil policy is key to what OPEC may or may not do to influence price trends in a world of highly volatile oil prices. Since the oil price began its inexorable rise in 2007--reaching a record level of $147 per barrel in June--there has been growing speculation over what Saudi oil policy actually consists of.
Feverish efforts continue to end a gas supply shortage that has run pumps dry at several Calgary-area Petro-Canada stations.Operators at Petro-Canada's Edmonton refinery have been working non-stop to repair the facility's catalytic cracking unit -- or "cat cracker" -- an integral piece of equipment that breaks down crude into higher-yield fuels such as gasoline.
US Refinery Operations Status: Valero Restarting Port Arthur Unit
The following table lists unplanned and planned production outages at U.S. refineries as reported by Dow Jones Newswires. The information is compiled from both official and unofficial refining sources and doesn't purport to be a comprehensive list.
Halliburton confident oil's slide will not reduce orders
Dubai: Halliburton, the world's second- largest oilfield-services provider, said crude oil's 17 per cent slide this quarter is unlikely to reduce orders for drilling and exploration contracts."Customers are basing decisions on significantly lower oil prices, and they plan very long-term projects that don't switch on or switch off based on the oil price," CEO David Lesar said in a telephone interview from Houston on Wednesday. "I don't really see it having a major impact on our business."
Energy crisis myth: Let free market solve the problem
We do not have an energy crisis that needs government management. Rather, we have an economic problem best left to free markets. In a free society, prices and human ingenuity will provide the optimal energy portfolio, not a central planner. Prices will tell us how much energy should be converted from oil, coal, natural gas, hydro, wind, biofuels or solar.
Survey: Gas prices No. 1 concern of workers
Despite a steady decline in gas prices of late, American workers still consider them the No. 1 concern in their everyday work lives, according to the Adecco USA Workplace Insights Labor Day Survey 2008 conducted between July 30 and Aug. 1. It surveyed 1,186 full- and part-time adult workers.
Pakistan: A people in turmoil as politicians bicker
Musharraf's future has been an abiding obsession for Pakistan's political elite. But three kilometres from the Parliament building in a grim Islamabad slum called "One Hundred Quarters" the conversations are different.Musharraf's fate hardly rates a mention in the small makeshift hut where Cornelius Gull lives with 12 members of his extended family. They are busy trying to work out how they will survive the deepening economic crisis.
The inflation rate surged to 24.3 per cent last month, compared with 6.3 per cent a year ago. Poor families like Gull's have been hit hard by the fast-rising cost of food and fuel. Food-price inflation is at nearly 34 per cent.
Some suppliers get their wood from landscaping companies that must remove the remains of trees they cut down. Now many of the contractors — or their customers — are choosing to use the wood themselves.“I've had to hunt all over to find the volume of wood [I need],” he said.
Not only is the supply harder to come by, but the price also has gone up.
“The chainsaws need gas, the log splitters need gas and the trucks use diesel fuel, so the price is up,” he said.
California’s game-changing solar deal
In a move that could alter the economics of the global solar industry, California utility PG&E on Thursday announced that it will buy 800 megawatts of electricity produced from two massive photovoltaic power plants to be built in San Luis Obsipo County on the state’s central coast. The 550-megawatt thin-film plant from Bay Area startup OptiSolar and a 250-megawatt PV plant from Silicon Valley’s SunPower dwarf by orders of magnitude the five-to-15 megawatt photovoltaic power stations currently in operation around the world.
UK: Shock warning on sea levels
THE COASTAL map of the Westcountry could be dramatically redrawn by the waves if expert predictions of a rise of up to four metres in sea level become a reality.It would go far beyond previous expectations that remote and sparsely populated coastal areas would be beyond salvation, and mean that large swathes of towns and even cities could be swallowed up by the English Channel over the next century.
NEW YORK (CNNMoney.com) -- Home heating bills are expected to soar this winter and Americans, already struggling with high gas and food prices, are bracing for more financial hardship.On average, consumers are expected to pay $1,182 to heat their homes this year, up 20% from last year, according to recent estimates from the Energy Information Administration (EIA).
But the outlook for the Northeast, where 8 million households depend on heating oil, is even more worrisome. Homeowners in the region are expected to spend an average of $2,725 on heating oil this winter.
The looming spike in heating costs could pose an even more serious threat to household budgets than the high price of gas, according to Tancred Lidderdale, a senior EIA economist.
"When gas prices go up consumers have options," he said. They can drive less or use public transportation. But when it comes to home heating, "households have fewer options."
Petrol glut spells bleak years for Asian refiners
Singapore • Refineries in Asia face falling petrol prices and growing losses in producing the fuel, as the prospect of a sustained global supply glut looms over the industry in the next few years.After more than five years of robust profits, the value of petrol against benchmark Brent crude has slid into discounts last month, and more losses are expected due to additional output capacity in Asia and the Middle East as US demand falls.
High gas and oil prices have a benefit — encouraging innovation, exploration and conservation
We’re not out of the woods on gas prices yet, and might never be.We should keep running scared. We must think about that much-debated "peak oil" moment when global crude production reaches its zenith and begins an inevitable decline. Some say that day is already here, or soon will be.
I’m guessing it could be 20 years away. But even if that’s correct, we would be fools not to be preparing for it now.
Gas prices lower, but not to stay
"Going forward, people should not assume this is more than a temporary break in prices," said Steve Andrews, co-founder of the Association for the Study of Peak Oil & Gas in Denver."They should make buying decisions, the homes they buy, their vehicles. They should make those decisions with an eye toward more expensive petroleum in the future probably because there will be a little less of it."
ASPO-USA encourages "prudent energy management . . . during an era of depleting petroleum resources" and promotes the concept that global oil production is near its peak, after which easy-to-recover, inexpensive oil will be in shorter and shorter supply.
Alaska: Council considers oil prices, energy conservation issues
The Homer City Council considered ideas on the subjects of oil prices and energy conservation at their Monday meeting while hearing presentations by Rep. Paul Seaton, R-Homer, and Daniel Lerch of the California-based Post Carbon Institute.(Also: Homer in good shape to tackle energy volatility, says expertLerch, program manager for the institute and author of "Post Carbon Cities: Planning For Energy and Climate Uncertainty," gave a PowerPoint presentation to the council during their Committee of the Whole meeting that pondered the concept of "peak oil" -- the idea that production of easily accessible oil has already hit its zenith and will inevitably continue to decline -- and suggested actions that communities like Homer could take to soften the blow of oil price volatility.
WITH a big push from two local men, Bega has started on the road of becoming a Transition Town – a place aware of its reliance on energy and of reducing the volume of oil it uses.
Sir Ben sounds warning to the industry
By 2050, predictions are that world food demand will double as a result of the increasing global population and wealthier lifestyles, meaning that in 40 years, the world would have to triple total food production on less cultivable land, Sir Ben told the floor. “By 2050, the prediction is that 50 per cent of the world’s arable land may be unusable due to over-irrigation and over-grazing,” he said.Even though the world is close to peak oil production, demand for that commodity is expected to rise. “In the medium term, it is inevitable that energy prices will rise even higher, and the industry needs to think of the costs of that and the effect on its carbon footprint.”
Probing Question: Is peak oil a myth?
Unprecedented summer gasoline prices are squeezing Americans' wallets and also expanding their vocabularies, as terms like "peak oil" gain common usage.Peak oil, economists say, is the point at which oil production maxes out: The easily available reserves are gone, and the cost of extracting and refining the remaining stuff exceeds the price it fetches on the open market. After the peak, the theory goes, production starts to fall.
Experts worry that if such a decline in production happens too rapidly, it could outpace the development of viable energy alternatives, resulting in a drastic spike in prices. Others believe that peak oil is a myth, that we could never drain the world's oil supply to the point of such a crisis.
Boom times for traditional energy sources
This is the world of 21st-century energy, which around here looks surprisingly like 19th-century energy. There is little evidence that the old, conventional sources of energy are about to disappear, or that the free market by itself is going to drive a transition to clean, renewable power.With oil, gas and coal near record prices, there is an obvious market incentive to invest in renewable energy sources, such as wind and solar power. But those same high prices have also incited fossil-fuel companies to ramp up their drilling and mining.
Oil falls to $113 on bearish global demand
LONDON (Reuters) - Oil dropped by $2 to $113 a barrel on Friday to trade near the lowest since early May, pressured by faltering global demand and rising supply.Crude has fallen sharply since reaching an all-time high of $147.27 a barrel on July 11 partly on concern about weakening demand and fell as low as $112.31, the lowest since May 2, on Tuesday.
"The demand side is a major concern. Supplies from OPEC countries are rising but there is a shortage of buyers. The industrial use in China has been cut back," said Gerard Burg from National Australia Bank.
OPEC trims 2008 oil demand growth
OPEC on Friday cut its forecast for global oil demand growth in 2008 for a fifth month and said production is more than adequate, signalling a more comfortable supply and demand balance.
Lower Crude Prices May `Improve Refining Economics,' OPEC Says
(Bloomberg) -- Refining margins may improve with lower crude oil prices, which have fallen from an all-time high last month, according to the Organization of Petroleum Exporting Countries.``The recent sharp fall in crude oil prices may help improve refining economics and cap discretionary cuts by refiners,'' OPEC said in a monthly report today. Lower input costs make it cheaper to produce fuels such as gasoline and diesel.
BP Says Unclear When BTC Pipeline Will Be Repaired
(Bloomberg) -- BP Plc, Europe's second-largest oil company, declined to say when an oil pipeline in eastern Turkey will resume pumping as it continues to assess damage to a section engulfed by fire last week.
Iran, Turkey fail to reach deal on new pipeline
ISTANBUL, Turkey - Iran and Turkey signed several cooperation agreements Thursday but failed to complete a deal for building a new natural gas pipeline — a project the United States has opposed.
Saudi Arabia in Turkmen oil, gas plants talks
ASHGABAT (Reuters) - Turkmenistan's President Kurbanguly Berdymukhamedov has invited Saudi Arabia to build oil and gas plants in the gas-rich Central Asian nation, Turkmen state television said on Friday.
British drivers pay £1 more than they should every time they fill their tanks because petrol giants refuse to pass on plummeting oil prices, it was claimed today.Despite costs finally falling with wholesale figures down 18 per cent, the saving is not being passed on to the customer.
Cheap Chindian Cars and High Priced Oil Don't Mix
In the U.S. we complain about high fuel prices but most Americans can actually afford their cars and can, grudgingly, afford higher gas prices. Ultimately, the percent of our salary that goes to fuel is still relatively low. If prices get high enough you may drive less but you are still going to drive. The same cannot be said for China and India. Demand has already pulled back in the U.S. and as fuel costs rise, expect to see a larger proportionate decrease in demand in the countries that have been touted as its largest consumers.
China car sales slow on oil prices
BEIJING – The rapid growth in Chinese sales of sedans, SUVs and light trucks slowed sharply in July as sales rose just 6.8 per cent over the same month of 2007, the lowest monthly expansion rate in two years, an industry group reported Friday.Sales of sedans rose by just 1.6 per cent, according to the China Association of Automobile Manufacturers.
It was the fifth straight month that sales growth has declined. Growth was at double-digit monthly rates early this year.
Nigeria rebels 'rescue' hostages
A militant group in Nigeria's oil-rich Niger Delta region has handed over two German hostages kidnapped last month.The Movement for the Emancipation of the Niger Delta (Mend) said they rescued the two men from another militant group who had kidnapped them.
China defaults on 40,000 t palm oil - exporters
SINGAPORE (Reuters) - Chinese buyers have defaulted on at least 40,000 tonnes of RBD palm olein after a drop of more than 8 percent in prices on Friday, Malaysian exporters said.
China to ban small coal mines for improving pit safety record
China is to ban the building of coal mines with high gas danger whose annual production capacity would be below 300,000 tons, according to a new guideline for coal mine safety, the State Administration of Work Safety told Xinhua on Thursday.
Quelle Surprise! Speculators May Have Had Something to do With Oil Price Runup
Since roughly February, a solid minority of commentarors, including this blogger, have questioned the thesis that the rapid increase in oil prices was solely the function of supply and demand. It was disconcerting to see what reactions this stance elicited. There was often an unwillingness to read what was written, and instead turn the post into an exercise in projection. Use of the word "speculator" is taken to mean the author 1. thinks speculation is bad (no, depends on circumstances), 2. is economically illiterate and 3. is a Peak Oil denier (a lot of vitriol here).
Portland is a hub for the car-free and care-free
No matter how you choose to get around this outpost of half a million free-wheeling souls, car keys aren't required.Founded in the mid-19th century as a shipping and logging center (which prompted one of its first nicknames, Stumptown), Portland has been a poster child for progressive urban planning for decades. And as lofty fuel prices drive destinations to tout their pedestrian- and biker-friendly attributes, the city's extensive mass transit, green credentials and neighborhood-centric culture are garnering even more attention.
"We still have parking lots filled with SUVs," says Shelby Wood, who writes PDXgreen, a column and blog about sustainable living, for Portland's daily newspaper, The Oregonian. But here, she adds, "it seems normal to do things that still strike other parts of the country as awfully different" — from raising free-range chickens in backyards to creating crosswalk "bike boxes" that let cyclists get ahead of cars at busy intersections, with the goal of reducing collisions.
Making a Solar Cell Component without Using Fossil Fuels
Solar energy is touted by some as the solution to the world's energy woes. But the process of making the various components requires fossil fuels, both for power and for the components themselves, some of which are based on petroleum.A new company, BioSolar, aims to kick petroleum to the curb, at least in the realm of building solar photovoltaics, cells of crystalline silicon that turn sunlight into electricity. Such photovoltaic cells rely on conventional plastic polymers to provide a protective backing, also known as backsheets. Those plastics are made from—you guessed it—petroleum.
Ikea to Sell Solar Panels Alongside Kitschy Housewares, Futons, Meatballs
Ikea, purveyor of cheap living room sets and futons for 20-somethings worldwide, will soon be offering another product you can pick up in a flat-pack: solar panels.
China: Wind power industry expands with elusive profits
In 2007, China became the world's fastest-growing market for wind power following the United States and Spain, with capacity increasing 3.28 million kw. This year's wind capacity is estimated to exceed 10 million kw, or 1.7 times that of 2007.Chinese Academy of Engineering member Ni Weidou, however, doesn't view all these developments positively.
"The industry is growing too fast. I can't help but worry," he said.
Could the decline of oxygen in the atmosphere undermine our health and threaten human survival?
Slower economy saps climate action
OSLO (Reuters) - An economic slowdown is sapping enthusiasm for a costly drive to fight climate change but persistently high oil prices are a lifeline for a "green revolution" of renewable energy technology, experts say.
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The OPEC August report (PDF) is out. Here's their estimate of world production in July (if Darwinian hasn't beaten me to it)
Does anyone know what tanker rates are doing??
They should be exploding.
Thanks
FF
This from Bloomberg last week
Thanks
Doesn't make much sense to me.
FF
Unless you assume current reported crude production is somewhat detached from reality...
Reported August production should be interesting. Looking as if it's going to be way down but no real figures yet.
So down, because demand is 'soft' as OPEC puts it?
Interesting.
What was masking this all along for first half of '08? The China pre-Olympics demand (as claimed by OPEC)?
No one in China can buy until the gov't works out either a price rise or a continuation of the tax rebates. Nobody knows what to expect, so everybody's sitting on their hands. And here we're taking inventories in crude and products down to the absolute possible bottom before anyone will do any buying. I imagine buying will be at an absolute minimum until the elections.
Signs that we're very close to or at the bottom: Even the people in here are thinking about unloading oil investments, all the media headlines are about the end of the commodity bubble, and all the vehicles in the poker room parking lots are SUVs again.
the vehicles in the poker room parking lots are SUVs again
A CRITICAL leading indicator !
Best Hopes for Price Elasticity of Demand,
Alan
Moe,
I really appreciate your insights on the market. I've read many-many posts of yours, so this time I'll keep it very simple by asking:
Do you think there is a floor to WTI spot in the ***PRESENT*** geopolitical and economic situation - and if so what's that level?
***PRESENT*** i.e.: coming recesseion in Europe, financial troubles everywhere, relatively strong dollar, relatively weak Chiniese demand and the BTC closed *** PRESENT***
(My reading of the situation very briefly: 107-108 floor now, prices in trading range between 110-130 until mid September, price spike in October and WTI spot at USD 150 in late November)
What's yours?
ROFL!
I do remember posting during oil's rise early this year that I didn't think $3.50/gal was high enough to cause lifestyle changes. I posted later that $4.00/gal looked like it was. Around here we're back in the $3.70 range, and I don't think that's high enough. Here's hoping gasoline moves back up to $4.00+.
BTW, it seemed to me oil had a nice close today. It looked like it had been trying to set up $113 as a floor. All week it has bouncing back up every time it dipped below $113. Today it as low as 111-and-change and stayed below 113 almost all day, until a rise late in trading pushed it back over 113 (~$113.50 at the moment).
In norway the price of gas is more than twice as high and they have high taxes on cars. I think some people prefer using the bus or a smaller car but some are still driving large cars.
Undertow, you do a far better job than I at posting from PDF files so I will leave it to you.
Worth noting: Saudi Arabia production for May has been revised downward by 24 kb/d to 9,155 kb/d. The EIA has Saudi May production at 9,400 kb/d. That is 245 thousand barrels per day higher than OPEC's "external sources" say they are producing.
Altogether the EIA has the OPEC 13 producing 1,556,000 barrels per day more than OPEC says they produced in May 2008. I find that very significant. Why is the EIA fudging the numbers so much? Or is it OPEC's "external sources" who are fudging the numbers lower?
Ron Patterson
Thanks.
Quote from the report:
So, according to OPEC:
Interesting. A lot of people will either be seriously wrong or seriously right come September-October.
I wish this darned crystal ball of mine would work. The gypsy lady told it would :)
U'mmm. Not sure what to say.
The post Paralympic (Sept. 18) up-tick in demand may not be that large (certainly <1 million b/day, perhaps as small as 100,000 b/day, most of China is unaffected by the Olympics and Beijing demand is not zero), but an up-tick, not a downturn, seems certain to me.
Alan
A lot people seem to expect China's demand for commodities to fall after the Olympics are over, and because of the sagging US economy.
I wonder. The Olympics cost them an estimated $42 billion. The earthquake cleanup is expected to cost them $150 billion.
Just the rail expansion plans in China will take some resources. From memory, 20,000 km of new railroads, electrify about 15,000 km, 230 more miles of subways in Beijing, more than that in Shanghai, and comparable in major cities around China.
And this is just a minor part of the total infrastructure being built.
Alan
As part of the Olympic coverage, there was a report on some of Beijing's suburbs. They have names like "Vancouver Forest", "Sydney Coast", and "Napa Valley".
The suburbs they visited had enormous houses with lawns, cathedral ceilings and private pools. Chinese businessmen are even better at spending money than they are at making money.
Maybe JHK is correct about American suburbs being toast, but Chinese suburbs are just getting started.
It's the 1950's all over again Chinese style.
The IEA reported the other day that they expected demand in China to increase after the Olympics, as the factories that have been shut down for the Olympics get rolling again. The idea that demand will go down after the Olympics is soooo last spring, Leanan.
Yes, we all know it. We read the same report.
This is just the whole point of the guessing game.
Somebody is bound to be really wrong.
You are missing a important factor here. /if/ the the whole price run up was due to china preparing for the Olympics, then it bodes ill for the rest of the world if such a build out for one single city with a fraction of the world population caused such a price rise in everything from food to raw steel.
I ain't missing it. I've been pointing that out for years.
I think the moment of truth will come a little later than that--after the elections.
I used to think that it would be after elections but not any more.
Given if what I heard was correct and Obama is going to announce Hillary as his running mate in Reno this weekend. And Obama/Hillary ticket is pretty much a sure win for the Democrats.
I think the the next big move will now before the elections. To much is going into this move to push oil down there has to be a big pay off.
http://market-ticker.denninger.net/
I pretty much agree with this article however besides the surge in oil shipments earlier this month it also looks like the really BIG boys have decided to shake down the financial markets. The full court push on oil is not just sending a bunch of light sweet to the US.
As far as I can tell it looks like everything comes to a head in October we won't make it to Nov.
And as far as I can tell esp if you include the action in Georgia the only logical conclusion is that and attack on Iran is planned in late Sept/October at the latest early Nov.
Next and here is the part thats scares the piss out of me. From what I can tell by late September/October it looks like the US may be pushing close to MOL. If I'm right these crazy bastards are going to attack Iran with the US effectively days away from being out of oil precipitating a major internal crisis and martial law.
Further more at the same time they are going to play serious hardball with Russia over Georgia.
I hope like hell I'm wrong and its just a money play but things have been setup for something big.
I hope I'm wrong hopefully we are are just seeing some financial brinkmanship thats spilling over into the real world but I won't breath easy until Bush is out of office.
Memmel do you have any evidence that they will attack Iran in a couple of months? People have been predicting war with Iran for several years now.
In the absence of a war, what do you think will be the price of oil by election day?
Its more a process of deduction something is going down. I don't know what but the only thing that makes sense now seems to be a strike on Iran. The evidence points to big things in the offing before the election. Iran is all I can come up with.
In the absence of war my best guess is probably between 120-145 and as I said before 160 by Dec. The problem is I expect a price spike to 160 by end Dec at the latest and I've confident the spike can start from wherever we are say 110 and blow through 150 in a matter of weeks. Timing a spike like this is impossible.
It could ramp up a bit then take off or go right up who knows. We had basically or first real post peak volatility move over the last 6 months. The next one will be stronger and faster.
The assumption is that the current price of oil was artificially depressed and KSA will use it as an excuse to cut when in reality demand is going to come surging back.
Read about gold the price of gold is tumbling right now but you can't buy any real gold. Oil in my opinion is right now in the same strange setup the price is really low but I bet if you want to take delivery no one has any for sale.
The Iran attack thing is much more complicated to suss out now. I agree with others that the Georgia fiasco was intended as a distraction and to occupy Russian forces. Another miscalculation in that it was over much too fast. I think it makes an attack a little less likely. Or, perhaps this is just the excuse for a greater presence, thus further justifying the attack on Iran... Who knows with those outlaws in the WH....
The other thing that has occurred to me is the recent claim the US has denied Israel any support for an attack. The caveat? But call us first if you do. This looks an awful lot like (im)plausible deniability being set up.
Cheers
I don't think anything major with iran will happen till after the Olympics.
We still have to please our Chinese masters up till the point we try to slit there throat.
I dunno I'm just reporting the results of looking at all the puzzle pieces. Right now only two things come up. And attempt to reduce tensions in the US before the elections and ensure high oil prices are not a main topic of the election plausible but weak given my market analysis indicates prices can head up strongly well before the election. That was my first conclusion and I think its to some extent partially right.
The second one was and attack on Iran which keeps coming back as the highest probability. Most of us feel that if Bush attacks or if the Israeli's attack it will only be after the election while Bush is a lame duck
but realistically that does not do Mcain any good so and attack before the election will either propel Mcain to victory or ensure he is defeated since Mcain does not have high odds right now it makes sense that and attack on Iran before the election actually has a higher probability then one after.
Regardless of how you view it the probability of and attack on Iran is very high until after Bush leaves office. If Mcain wins then it would start increasing again but just the work needed to get a new President in office would delay the timing of such and attack. Mcain simply would need time to get moved in if you will :)
Of course as always all the current interesting moves could be for some reason we know nothing about and may not know for a long time if ever.
If the news I heard about Obama/Clinton is right then that pretty much sealed the deal. The reason is that Clinton will support whatever action happens in Iran and Obama better or he could end up being the next JFK.
The Clintons are just as firmly in the hands of big oil as Bush.
This would mean and attack on Iran has a pretty decent plan B if Mcain still loses.
I think we all pretty much agree that at some point Israel will act unilaterally and attack Iran they really don't have much choice in the matter Israel cannot survive a nuclear strike.
In my opinion for Israel its a question of when they would attack Iran and they are not going to wait forever. Israel is also losing its best window of opportunity once Bush leaves office.
Also Iran could have a nuclear device complete basically anytime in the next two years. And further more even if they don't have operational devices in that time frame they would have enough enriched uranium to ensure they have the ability to put one together fairly quickly.
I actually think in a sense they are telling the truth in that the main plan is to build a stockpile of enriched bomb grade uranium not neccarily to immediately create a nuclear device. They really don't need to since stockpiles of enriched uranium can readily be hidden and they could "go nuclear" later. The country is large enough that they probably could get a bomb assembled fairly quickly.
I think they will of course continue to proceed with building all the components just that they may hold off for a long time on actually assembling and testing a device until something happened that made the right time. So in my opinion the general strategy is to build a large stockpile of enriched uranium get it hidden away work on all the other bomb components but not put any of it together and test until the US is further weakened. It could be 5-10 years before they actually test a device and join the nuclear club. By then of course their missile capability would be very mature.
I think people miss that Iran is in this for the long haul and they have plenty of time. Assuming of course they can enrich enough uranium before their facilities are attacked.
And even if they are they would simply rebuild and keep going so eventually either they get invaded or they get the bomb.
To be honest I can see the viewpoints of both sides. Iran wants to secure its future and feels like becoming nuclear armed will ensure that it becomes a great country again and everyone else does not want to live in a world with a nuclear armed Iran for obvious reasons. Given Iran's ambitions anyway I could right a book on all of this I'm sure :)
Suffice it to say until Bush is out of office I won't breath easy.
What is the nature of this info source? Water cooler talk? Well-placed friend? Deep Throat II? This seems fairly unlikely as a successful ticket would preclude Hillary running again till 2016 and would leave her responsible (to the uneducated masses and partisans, at least) for the coming chaos.
One thing I am certain of: any attack by Israel will be with the full knowledge and support of the BuCheney WH. Proving it, of course... (im)plausible deniability...
Cheers
The source was good enough that I'm willing to repeat it here.
If I'm wrong then I'll reveal my source and you can see why I found it credible.
Tell you what I'll send a confidential email to Lenanan and she can confirm why I'm willing to
say this.
She has the email from me.
I read the e-mail, and I'm unimpressed.
The tone of your response might indicate you thought I was doubting you. I wasn't. My questions weren't rhetorical and weren't pointed.
I'd be surprised if she accepted the under ticket. We shall see what we shall see.
During the last election I thought I'd found a site doing analysis that really had it nailed. I could see no flaw in their logic. I was sure Bush would lose by as much as two or three percent of the vote and take the electoral without any real drama. I was certain of this (almost.) We all know what really happened. I was so bummed out people kept asking me if I was OK...
Here's to good sources!
Cheers
from the "Automatic earth" :
Massive US Naval Armada Heads For Iran
http://europebusines.blogspot.com/2008/08/massive-us-naval-armada-heads-...
Operation Brimstone ended only one week ago. This was the joint US/UK/French naval war games in the Atlantic Ocean preparing for a naval blockade of Iran and the likely resulting war in the Persian Gulf area. The massive war games included a US Navy supercarrier battle group, an US Navy expeditionary carrier battle group, a Royal Navy carrier battle group, a French nuclear hunter-killer submarine plus a large number of US Navy cruisers, destroyers and frigates playing the "enemy force".
The lead American ship in these war games, the USS Theodore Roosevelt (CVN71) and its Carrier Strike Group Two (CCSG-2) are now headed towards Iran along with the USS Ronald Reagon (CVN76) and its Carrier Strike Group Seven (CCSG-7) coming from Japan.
They are joining two existing USN battle groups in the Gulf area: the USS Abraham Lincoln (CVN72) with its Carrier Strike Group Nine (CCSG-9); and the USS Peleliu (LHA-5) with its expeditionary strike group.
Likely also under way towards the Persian Gulf is the USS Iwo Jima (LHD-7) and its expeditionary strike group, the UK Royal Navy HMS Ark Royal (R07) carrier battle group, assorted French naval assets including the nuclear hunter-killer submarine Amethyste and French Naval Rafale fighter jets on-board the USS Theodore Roosevelt. These ships took part in the just completed Operation Brimstone.
The build up of naval forces in the Gulf will be one of the largest multi-national naval armadas since the First and Second Gulf Wars...
Sorry memmel,
I didn't get it. What are you trying to say? Oil going to 85 now and to 150 later this year? I may be tired but I just can't get what you wanted to convey.
Could you please elaborate?
I don't know for sure how low oil will go. 80-85 is one of the technical limits 110 is another. So far the supports holding fairly well at 110.
What we do know from past experience is that a ME war generally causes a big spike in prices lets assume that they will double if we strike Iran. If this happened at 145 then it would have been devastating but by pushing the price down to say 100 then we would only see something like 200. Given that earlier this year it looked like 160-200 was a sure bet without a strike by pushing the price of oil down like they have we just about get the price spike for free.
If they get it down to 80 which would be surprising the the attack on Iran costs almost nothing on the price front since it would spike to 160 from the attack. Understand that I think we will hit 160 in December with or without and attack on Iran.
Whats weird is the math works out. Lets assume over the next month or two that even though the price is low OPEC will cut way back on deliveries. With maybe one more surge sending all the tankers out before the strike.
This gives them 3 months of low prices lets say 100 on average. After the strike we see prices go to say 200 which would happen lest say 6-8 months early. So in exchange for pushing prices down now for a few months they get 6 months of 200 dollar oil early as a present.
Given that I think the real price in Dec should be 160 this is a 40 dollar war premium. Assume the real price right now was say 140 instead of 100 or so then they make back the depressed price in a few months.
Net result is it cost OPEC nothing and the war spike from 80-110 keep us in a bearable price range where as a spike from 140-150 probably puts us into the red zone of 200 dollar plus oil.
The point is no matter what we are going to see a price spike but the interesting thing is that the way things are setting up the spike can be attributed to and attack on Iran if they execute.
The effect of and attack on Iran on the price of oil has been cut at least in half by what is in my opinion manipulation of the markets coupled with the large surge of oil right when the the market is weakening.
Obviously and I stress I could well be all wrong but the thing that lead me down this path is that the price of oil will have to naturally start heading up before the election if they wanted to ensure really low oil prices during the election then this surge would have had to come later on in Sept.
We will see but I'd not be presenting this scenario if I could come up with a better answer. My previous one of cheap oil for the election just does not work out well enough. That may be all thats going on but its pretty weak vs the above.
My thoughts (almost) exactly. I'm running a blog (300 visitors and 1500-2000 PI per day) and I just said the other day that my gut feeling is oil being pushed down for a reason, namely: Those who do it know there is going to be a spike there later this year and it's better starting from 100 instead of 150. (Technically speaking: it's not speculation with oil but manipulation of the dollar, thoroughly effecting all commodities.) However, you don't need a war for this theory. It works well sans (more) armed conflicts.
My guess is 150 for late November, so I think it is a wash. :-) I read all your other thoughts on the matter, so here is a short version of mine.
Back in May 2007 I made a prediction of USD 82 for October 1st. It was 82. In late November I started to build price models. I don't like tho models and they are under revision. But they work(ed) for the short run: I predicted USD 130 for the summer and June&July averages were just that. I also prdeicted an average price of USD 120 for 2008. We shall see.
So how do we get to an average of 120 if we have an average of 115 in July and a price of 147 at the same time? Well, if one is to believe my model is correct, prices have to retreat for the remainder of the sumer and then some. But there will be an October sipike (I think), mainly due to supply&demand. The dollar cannot hold forever, I don't think we will see EUR:USD much below 1.35 this year.
The main thing is, that price elasticity of demand is not a constant -- and it doesn't move to one direction. It is a bimodal function. Oil is inelastic until a certain price level, then it becomes fairly elastic... that's the time when demand destruction occurs. The remainder of the consumers are richer, so oil becomes even more inelastic, until the next round of demand destruction. Rinse and repeat.
price elasticity of demand is not a constant
An important insight !
However, there are so many "price elasticity of demands" and so many time lags (examples: airlines have multi-month time lags, consumers change the vehicle fleet at varying rates, etc.) and structural effects (new Urban rail for example) that I wonder how bi-modal it is.
ABest Hopes for New, incisive thinking,
Alan
Hillary? I just don't see it.
No comment wait and see :)
Was listening to "Marketplace" this morning on the daily commute and heard a story that could have been right out of Gail's post on "local electric" on Wednesday.
A resurrected hope in local hydropower
Thanks for posting this.
Some quotes:
I'm trying to work out a detailed export land model (ELM) based on the great work of westexas and Khebab. Right now, I'm creating groups within the exporter pack.
We have 40-something exporters, out of which 20 are called top exporters (92.5% of all exports). We also have a top 5, as shown in westexas' and Khebab's paper. However, I came up with a different grouping.
I think it would be wise to deal with KSA and Russia first, as their net exports (if added together) are some 15.5 mbpd. In other words: the two countries account for 35% of all net exports.
Let's take a look at KSA first!
Here is Russia.
Here are the two countries together.
And for greater insight, here is the sum of net exports of the two countries between 2004-2008.
As we all know, Russia's exports are declining 4-5% y.o.y... Have a nice day, folks.
Nice work. It's always good to verify for oneself.
The unsolved piece of the puzzle for me is the quality of the crude oil exported, that is API gravity and sulfur content.
ENI has published some rough numbers on production broken down based on crude type, from which I made these two quick graphs (hat tip to Rembrandt for the link):
(Already posted on Aug 13th DB)
However, the data does not seem to indicate that the quality of oil produced is going down, as it should as we approach the half point in production, working our way down to heavier crude and worse quality deposits. I wonder if I'm getting this right?
Further, does anybody has comparative crude quality data for the Lower 48 to compare with? How did the L48 produced oil quality profile change before and after the peak?
Odd - how does that jibe with the EIA's graph of LSC decline?
Thanks. Exactly what I was looking for.
I can't explain the discrepancy. I don't know if I'm reading the ENI data correctly, if it's reliable and what the 'Unassigned' category in their data contains.
However, if we take their numbers as correct, then the mix has not significantly worsened - only slightly so.
I'm quite puzzled by this and I would hope somebody with more knowledge could enlighten us.
There is one thing still not accounted for.
The energy contend of NGPL.
If one makes the the energy adjustment (a barrel of NGPL contains like 70% of the energy a barrel of crude does) the curve looks different.
Or you can creat a C&C exports curve as well.
Nice.
I'm a bit surprised by the flat domestic consumption curve of Russia. Is it really correct?
I am quite sure, that this is NOT correct.
In the past five years, auto sales have tripled. By 2010, many forecasters see Russia overtaking Germany to become Europe's No. 1 auto market with sales of more than 4 million vehicles.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080521/AUTO01/805210384
It's not ENTIRELY flat.
It was 2,622 tbpd in January 2003 and it is 2,780 tbpd now. That is an increase of 158 tbpd or 6%. I'll create you a graph of Russian consumption ASAP.
It's just the scaling that made you doubt the graph. BRB.
I did a google search and indeed all results show domestic consumption didn't change very much since 1998.
Here you go.
From the lead article at the top of this drumbeat comes this:
I thought I got this thing but I don't understand how producing more oil will slow the peak. Wouldn't it hasten it?
Producing all currently producing fields at maximum rate would bring the peak forward (as opposed to producing at lower rates).
The quote means higher prices will encourage oil companies to either produce from fields which were not previously worthwhile (at a lower price) or to explore for new oil fields. i.e. they will add extra production as a result of higher prices.
Yes and Yes :)
1. Producing more from new smaller fields:
New smaller (previously uneconomical fields) can slow the decline)
2. However, pushing existing fields at rates past what is good for their max recoverability may indeed hasten the decline from those fields, once they start to decline (depending on reservoir type, afaik).
Quelle confusion!
Does anyone have a good answer to this question:
How does speculation in oil futures and options affect the current market price of oil?
I bookmarked an excellent post of SamuM's on this: Permalink |.
Thanks, Dude and SamuM, very good post. There is no causal link between speculation in the oil futures markets and the spot-price of oil, and there is no evidence of manipulation of the markets through hoarding.
Well, Cushing sets the spot price of WTI to the closing price of the front month futures.
The speculators bids up/down the front month price, cushing follows with the spot price.
Is there somewhere on the web that tracks the term contract prices commercial users of oil actually pay?
Cushing doesn't set the price of oil on the spot market. People bidding for oil sets the price. At the end of each day, Cushing apparently sets the "counter" that determines whether price has gone up or down based on futures prices. But prices on the spot market are not fixed based on futures prices.
Can you explain what a "counter" is please?
Sorry, but I picked up that Cushing set the WTI price based on the futures market here on TOD.
If you want the reference I will search it for you.
Do you know about Brent and Tapis? Is the mechanism the same?
Here 'ya go, mate: INTERNATIONAL CRUDE OIL PRICING
The two-headed spectre of oil price speculation and manipulation raises it's head(s) again.
Data Raise Questions On Role of Speculators
Looks like the witch hunt is still on. I wonder if they'll find any real witches to drown?
Further at WSJ:
FTC Proposes Rule Barring Oil Manipulation
And the discussion rages on...
Could be that the recent price decrease has been mostly due to speculators shorting oil futures.
It would be poetic justice if requlators clamped down on speculation only to see prices reach the stratosphere as a result.
I believe at first it was the reduction in (mainly Chinese) demand -- until the 25th of July. From then on, it's the dollar. A correlation well above 90%
The article, "Probing Question: Is peak oil a myth?", is very disappointing.
Can they spell the word Geologists! peak oil was not proposed initially by economists.
That's a complete myth. There is no way we can increase production by 5 mbpd based on CTL and shale oil, 0.1 mbpd maybe.
No, As demand increases, prices increase. And when prices increase, demand go down! as we are seeing right now. Demand is reacting much faster to price changes than investments in new technology which requires a stable price environment.
Your comments mirror the ones I was about to post.
Peak Oil isn't a "theory", it's a fact, but some would not want to admit this is a problem, so we see commentaries such as this one. The author conflates conventional oil (i.e., the sort you can simply pump out of the ground) with unconventional oil, such as tar sands, CTL and oil shale. Since the problem of Peak Oil is the decline in conventional oil production, the author's conclusions are rather meaningless. Once production of conventional oil hits maximum, we will find that the cost of the other sources of liquid hydrocarbons are higher, since much more effort will be required to provide these products to the market. Peak Oil means the end of cheap energy, especially for transportation.
There's an also an add in a sidebar for a report Future Global Oil & Gas Supply: A Quantitative Analysis by Rafael Sandrea. The add says they will sell you one of these reports for $5,000. If you hurry, you can buy it before 1 Sept and it will cost you only $4,200. Such a deal...
I attempted to register to make a similar comment to reply directly on www.physorg.com, but the site rejected my e-mail address. Go figure.
E. Swanson
Hirsch projected 5 mb/d for CTL - after 13 years.
Didn't he revise his figures downward subsequently, though? Telling that he dismissed kerogen right off the bat.
In 13 years, an additional ~2 mbpd will be lost from depletion for conventional oil in the US alone.
To be sure, that's true, but he's throwing everything we have at depletion, and not including things like MT or relocation. Or writing off whole sections of the country, like Sin City.
I didn't bother to read the thing. The title says it all.
The piece was in fact better than the title, which was just a tag to entice readers.
The whole piece was more about: peak is real, it's coming and high prices may slow the decline, but that's it.
I do agree that the quotes and some details were not exactly Einstein quality though :)
Probing question: Is peak oil a myth?
We're getting "more efficient" at drilling it?
Data posted here by JonFriese and others indicates just the opposite to be true. Not only is the oil and gas recovered per drilled foot in rapid decline, but the cost to drill each foot is rapidly increasing.
Then there is the additonal question of the degradation in the quality of the oil produced.
How one can call that "more efficient" is a mystery to me.
What he possibly meant to say that with new searchtechs they can better tell where to drill exactly.
But that would be counter-intuitive, wouldn't it?
If better technology allows you to pick better locatons, then your success rate should be higher, should it not?
If better completion technology allows you to enhance recoveries, then recoveries should be higher, no?
Either way, your recovery per foot drilled should be higher. But, according to JonFreise, it is not.
Something's wrong with this picture.
There is evidence that the accuracy is going up (Rockman's comments on the same below) but the need to drill more feet is overwhelming that improvement.
From http://www.theoildrum.com/node/3810
I believe increase in drill feet is from horizontal drilling, rapid decline rates forcing ever more wells to be drilled, and the number of shallow depth pools shrinking and drillers moving on to deeper pools.
Somewhere around was a study in the rig count vs maximum depth that showed that rigs were shifting to deeper depths.
By not looking at the data? I find most people are happier with self consistent stories than actual data.
Here is the graph you mention. It is amazing that people feel this is going to get better and not worse.
Now, if the industry could drill two feet for less than the cost of one foot (and keep up such improvements) then it might be possible for the cost of drilling for gas to go down. But they can't, as proved by this chart of cost per Gj.
It is clear technology is losing the race against depletion. Clear to anyone who charts the EIA data in Xcel that is.
It all becomes apparent in the bottom line. The increases in the earnings of domestic oil and gas producers have struggled to keep pace with the increase in the price of oil and gas, and this even though a large chunk of their production is from legacy reserves.
I agree. I guess I have said this before, but I think the E&P players should be looking into the number of people behind in payments. When the credit runs out, it is going to be ugly.
Hey,
Have you looked into Texas production rates recently? This EIA article was brought to my attention and I cannot explain the rapidness of the supply increase.
http://tonto.eia.doe.gov/energy_in_brief/natural_gas_production.cfm
I looked into the # of drilling rigs in Texas and they are increasing but not so much faster than the past that this rapid run up makes sense. My other thought was that if the World Oil articles were right about shale gas not being profitable that producers were waiting on a price spike and were holding back production. When prices finally hit a profitable level, they let the gas on the market. Any thoughts / data one way or the other?
That statement is false. What else can I say?
As per the Texas Railroad Commission, statewide production was as follows:
Q1 2007 Gas Well Gas: 1438.1 BCF
Q1 2007 Casinghead Gas: 171.0 BCF
Total Q1 2007 Gas production: 1609.1 BCF
Q1 2008 Gas Well Gas: 1466.8 BCF
Q1 2008 Casinghead Gas: 189.8 BCF
Total Q1 2007 Gas production: 1656.6 BCF
That is a YOY increase of 2.3%
http://webapps.rrc.state.tx.us/PDQ/generalReportAction.do
I can tell you that the Texas Railroad Commission figures are absolutely correct. I have several overriding royalty interests and you can caluculate your royalty checks based on their reports.
Thanks! That was my expectation. Now, what is the EIA doing I wonder?
The only legitimate reason I can think of to account for the difference is that there is some gas production located offshore Texas that falls within Federal and not Texas Railroad Commission jurisdiction that the EIA nevertheless classifies as Texas production. The probabilities of this, however, seem rather remote, no?
I suspect a more likely explanation is that the EIA is playing fast and loose with the facts. This should not come as a surprise. John Williams makes a pretty good case over at Shadowstats.com that various government agencies do the same thing with inflation, GNP and labor statistics. So it just makes sense they would do the same with oil and gas production statistics.
I saw that too in one of the World Oil articles you linked. If I'm not mistaken the source was Chesapeake Energy. It's an example of the type of perfidy of which these corporations are capable.
That was back in July 2007 when Chesapeake made that claim--that it had gas production choked back waiting for a better price. The reason they put out this type of false information is so stockholders won't get wind of just how bad things really are. (Bank executives, afterall, aren't the only executives who lie.) I've often said that "resource plays" are the oil industry's answer to "subprime loans." Because of the nature of the production curve, they provide huge immediate profits but, if gas prices don't go up, the long-range profits are pretty grim.
I believe if one does a little research he will find out that Chesapeak's claim that it had production choked back awaiting a price increase was belied by the derivitavie positons it held at the time. You don't commit to sell future production at today's price if you're waiting for prices to go up. But more condemning is its production history:
Again, from the Texas Railroad Commission, statewide monthly gas well gas production for Chesapeake Operating:
and companywide production from Chesapeake quarterly reports:
If Chesapeake indeed had its production choked back in July 07 waiting for a better price, then why didn't it unchoke it when prices soared during Q1 08 and Q2 08? If it had all this production held back, one would have expected to see a huge surge of production beginning in Q1 08. But that surge never happened.
I'm sure the Chesapeake executive that made that claim in July 07 never dreamed that natural gas prices would almost double in the next year.
I suspect that Chesapeake, as well as many other domestice oil and gas producers, may be on the verge of experiencing Peak production.
DS -- This is the problem with all these "experts" throwing around terms w/o fully understanding them. Or maybe they do and just don’t care if they confuse folks. In the oil patch we are much more efficient then ever before. But efficient means we're drilling far fewer wells to find what's left thanks to the advances in 3d seismic primarily. It means we drill a lot fewer dry holes because we can more easily condemn many prospects with the latest seismic technology. Computer power now lets me analyze seismic much more "efficiently" then ever before. About 30 years ago it would take a month or two to analyze an offshore block with the old paper 2d sections. Now, on a seismic work station, I can accomplish that and much more in just a few days. Yes...much, much more efficient. But, as many here know, doesn't translate to finding more oil/gas. It just means we're real good at finding the little bit that's left. I've pointed out before that oil/gas exploration has never been as easy as it is now. But that certainly doesn't mean we can duplicate the discovery efforts of the last 50 years. If it ain't there we can't find it. The new technology has allowed development of plays like the GOM sub salt and Deep Water offshore Brazil. As much as those new reserves are needed they can't replace the mega fields of the good ole days.
So we’re back to the same problem we’ll always face with the MSM and the public’s view of the issue: some folks will take factually correct statements and draw very erroneous conclusions from them. And as those who know better attempt to correct the misrepresentations good ole Joe Six-pack’s eyes will glaze over and he’ll switch stations to the wrestling channel.
The metaphor I once saw used here on TOD was that at one time the search was for basketballs, and then baseballs, and now BBs.
I have no doubt that geologists like yourself do a wonderful job of finding those BBs, and that you need to be commended for that. But this does nothing to lessen the fact that it still takes a hell of a lot of BBs to make up for one basketball.
My problem with this story is the assertion that geologists like yourself can find enough BBs (and with Natural Gas, maybe there's still a few baseballs around to be found) to make up for the deflating basketballs. I find that claim highly dubious. To use a metaphor I just used on another thread, it's like the doctor trying to keep his 90-year-old patient alive. With modern-day science, technology and medicine he certainly has a much greater shot at giving his patient a few more years claim on life than what a doctor 50 years ago did. But he cannot give his patient eternal life.
If that was my analogy, the smallest was marbles. I suppose the analogy could be refined to actually be in a real mean or avg. ratio... I wonder what that might be.
Cheers
I read the same thing and I understood it as the typical misunderstanding of fundamentals.
1) "We are getting better at drilling." Of course that much is true: technology has made both locating and getting to smaller deposits much easier.
HOWEVER, and this is the thing we should be concentrating on:
2) All the data says that this "better at drilling" is being negated by ever increasing drilling depths, ever increasing well bores and decreasing number of available economic deposits to drill.
So, 2) overrides any wins in 1). End of story. Technology does not trump geology.
EDIT: Rockman beat me to it and with a much better explanation.
As pointed out by the Archdruid a myth is a story which teaches us a truth. Therefore peak oil can be both a myth and a scientific theory predicting the rate of petroleum extraction. Consider how some have beatified St Marion King Hubbert to a status reserved for biblical prophets. Look at how there are disputes about the definition of terms, especially what oil is, comparable to how monks debated the dancing talents of angels on pinheads.
I'm concerned with the article posted about the Oxygen Crisis. Anyone here in the know about this? Sounds like it is an unresearched area without much data/information. I'm curious to see what TOD members think about this topic. Makes me think about getting that greenhouse up and running. Although if I remember correctly the biosphere experiments/humans failed in part due to low oxygen.
This is best described as maverick research. Up there with cold fusion. There is some evidence that oxygen levels are falling, very slowly, but there are far more pressing environmental concerns. Atmospheric science is not clear cut at the best of times. This researcher has at best a questionable reputation.
I'm not going to lose sleep over it.
Astonishing! There are over one billion people on the planet who are starving right now but I just had a big meal so I don't think I'll lose any sleep over that either.
Respiratory ailments are rising dramatically and as a life time asthma sufferer you have no idea what it feels like to be gasping for air. Years ago I lived in Pasadena and I went to my Dr. for treatment because on bad days (32%) I would have attacks. I ran long distance so I literally couldn't go out of doors when the pollution index was beyond a certain level. My Dr. finally told me that I should live close to the beach (not Long Beach) because the onshore flow was much higher in oxygen than the air in Pasadena. I moved to the South Bay (Hermosa Beach, CA) and the difference was remarkable. I could manage to live in L.A. because I was close to the beach.
There was a study that was covered in the L.A. Times back in the eighties (no I don't have a link) that measured lung development among pre-adolescents and they published the results of all areas of L.A. county. The worst area was Long Beach primarily due to the harbor with all of the ships and tankers releasing noxious fumes into the area. The children there had 50% of the lung development of normal children.
I know that the focus is on oil extraction but I think we'll run out of air to breathe before we run out of fuel to burn. Fortunately I'll be one of the first to go.
I'm rather surprised that the Guardian would publish this sort of thing. If we are currently at less than half of one percent CO2, then we would be at a globe frying 1000 parts per million by the time we got O2 down to 20% from 21%. Sure, there are some lags and anomalies in the reabsorption of CO2 and the emission of O2 and there is the question of sequestration of O2 in ocean dissolved CO2, but at 20% there's a hell of a lot of oxygen to get rid of with who knows what knock on effects in order to move the number just a little bit.
I am reminded of a passage from Lovelock which referred to the difficulty in starting fires at less than 15% and the difficulty of stopping them at greater than 25%. He supposed that a balance point at 20% was perhaps a result of this relationship. If the world had only damp tropical forests and swamps a few hundred million years ago the balance point between fire and vegetation could have been 30%. Probably hard to get a forest fire going in the Amazon at a lot less. This may account for the deposition of vast amounts of carbon as coal - up until the carbon was gone [temporarily!] and the temperate zones gained preponderance. These swings took millions of years to happen so I'm not expecting humanity to come up with a scheme to convert a fifth of the atmosphere to oxides any time soon.
From top links, Peak Oxygen. I gotta pain in all the diodes down my left side. I'd been wondering about that for some years and never looked into it. I guess that does up the ante. Down from 35% to 20% or less and we need 6-10% to survive. That local areas like cities can deplete oxygen to 15% amazes me. We could have atmospheric dead zones if overall levels fell only another 5% or so.
cfm in Gray, ME
Las Vegas casinos pump oxygen into the air to keep you from getting tired. Maybe this will become a trend for other homes and businesses.
Do they still have any of those oxygen bars? That was quite the trend for a while.
Really.
snopes.com: Casino Lore
Love the idea but this dismisses it as urban legend.
Came across a link regarding Toyota (late 90s) planning an optional oxygen pump to keep drivers awake. Beats Vivarin, I suppose.
I guess that will teach me to do 30 seconds of Google research before I post. I never thought it was controversial, so I didn't question it.
Yes, the casinos still have oxygen bars.
Hi all, I'm a long time reader, seldom post cause I don't have much time at the library computer, but this story about oxygen intrigues me too. I'm not worried about any immediate effects but just theoretically, isn't it true that all the excess oxygen in the atmosphere is due to the presence of the fossil fuels that never decomposed? I remember reading that in biology classes and had the thought way back then, well, does that mean that if we burned all the oil, gas and coal all the O2 would disappear! Of course I know that it would be impossible to actually burn it all but does my analysis make sense?
Limestone is the bigger sink. About 3% of annual CO2 emissions come from making cement.
But give humanity enough time and energy ....
Alan
I think this needs to be read with extreme skepticism. 15% oxygen is what you breathe at 10,000 feet and many people would have lots of problems (heart, lung) at this concentration. For a whole city area like Las Vegas to be at this level is very hard to believe. I would like to see some hard data before I swallowed this story.
Don (MD)
With all due respect, I must point out that the concentration of O2 is the same all the way to the stratosphere. However, as one gains elevation, the density drops. The 500 millibar level is about half way thru the atmosphere and that is at about 5.7 km above sea level or 18,000 ft, as seen in this weather map. Even though the concentration at 5 km is the same as sea level, one must "process" twice the volume of gas, thus, one's lungs must work twice as hard.
E. Swanson
I tend to agree with your skepticism on this one. Total atmospheric CO2 levels are currently somewhere around 380 ppm on a molar (volumetric) basis; this is an increase of approximately 100 ppm over pre-industrial levels. Every extra molecule of CO2 in the atmosphere is a molecule of O2 no longer present, so the that extra 100 ppm CO2 represents a reduction of 100 ppm from the available oxygen. This is 0.01% (i.e., from 21.00% to 20.99%). Even if one considers that a lot of the fossil-fuel-derived CO2 released over the years may have been absorbed by the oceans, we're still talking about reductions in atmospheric oxygen of a few hundredths of a percent.
While reduction of the oxygen in the atmosphere is a scary prospect, this article doesn't take the trouble to look at any ROM estimates of how much industrial activity has contributed to a drop.
15% oxygen, if arrived at by burning carbon would mean carbon dioxide poisoning. Technically at 10,000 feet the fractional concentration of O2 is nearly the same as at sea level, but pressure and density of all atmospheric components are scaled down proportionately, so the ability to supply body tissues with oxygen is seriously reduced. I think the bodies short term regulation of breathing is based upon CO2 concentration, so an unacclimatized person can have oxygen depletion, but not be getting the signal to breathe harder.
If 15% O2 was arrived at by burning hydrogen, it wouldn't poison you, however the amount of energy liberated by the combustion would heat the air by (order of magnitude, I'm not looking up heat capacities, etc.) something like a thousand degrees -that would be the urban heat island on steroids.
Funny....volume on Nymex has dropped to close to nil, at least for gold, oil, & silver. I don't recall anything like this happening at this time of day since I've been watching. I wonder what's up? Maybe it is just the site I'm using to track. Funny though.
Edit: it appears to be back. It looks like the dry spell lasted about 8 minutes.
One of the commentators on one of the many different email newsletters I sift through was indicating that central banks have been huge players in both the monetary and metals markets this week. Purportedly the goal is to support the dollar and kill off the commodity bull as both are encouraging inflation. He expected that this intervention would end today or Monday.
Now, I have no way of corroborating this, but apparently huge amounts of gold have been sold and U.S. debt is being scooped up. (Weren't there some observations the other day about recent treasury sales finding willing buyers?)
Could this account for what you are seeing?
These markets are so boring I can't take it.
And all it would take to spice things up is one Russian jet taking out one pipeline pumping station in Georgia !
I wonder how many want to go short oil into the weekend ?
Alan
Exactly Alan:
There would have to be lots and lots of good news this week end for the price to go down a little by Monday. Most anything could cause a limit up Monday and the shorts are screwed. Something big could cause limit up for several days and the only alternative is to jump out the window.
I didn't see this posted up top.
http://articles.moneycentral.msn.com/Investing/SuperModels/CouldOilPlung...
Just a thought...
By saying don't switch from H2 to vespa yet because...oil below $65 per barrel... because of efficient new vehicles...
isn't this guy just saying that there's no need to switch to new vehicles because everyone else will so you don't have to, so keep driving your SUV?
what a knob...
Yeah, and that "coming global recession" may also impact your plans to trade in the Hummer for a Vespa. I like how it's just one of a list of things, like a grocery list that includes "12 pack of anthrax".
BLACK-GOLD BLUES
U.S. green lights 'anything into oil'
Defense Department OKs facilities turning natural produce into energy
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=72275
Anyone else seen this? It looks like DOD is on to something that might actually work.
I do think the article title says it all: "U.S. green lights 'anything into oil'"
So, we are going to strip mine our farms and forests to burn all that "biomass" in our cars?
What happens when that "biomass" doesn't get put back into the ecosystem? (and I don't mean as heat, CO2, etc.)
How long would it take to completely destroy our soils with this?
How can people promote this stuff without thinking of the consequences?
We're getting desperate, I think.
That biomass needs to go back into the soil to feed the soil ecosystem that provides everything for us.
We are desperate, and it seems that we are going to eat the planet rather than deal with the facts. Homo "sapiens" my ass.
Do we even still have an ecosystem?
It seems to me that the problem is the definition of "waste".
Of course we do (still have an ecosystem) - it's just a matter of how able it is to provide us with food, water, air. And it's a matter of how many of us.
Yes, absolutely, the word "waste" is fraught with crazy utilitarian overtones. Crop and forestry residues that go back and feed the soil are not "waste" in any sensible definition of the word.
I knew an engineer in California who honestly thought that if a single drop of a river's water reached the ocean, it was a waste.
Complete, utter abstraction and detachment from reality.
Five billion barrels is only 1/3 of our imports. Follow the math and you can see bogus claims.
Five billion barrels per year is 13.7 million barrels per day, or close to 70% of overall U.S. consumption. That's nearly all of our imports.
It's WingNut Daily - take it with a few kilos of NaCl.
"Anything into oil" sounds like thermal conversion. It's how that turkey parts plant was described.
But reading the article, it sounds like what they're actually doing is producing methane from waste. Which is not exactly a breakthrough.
Near as I can tell from their web site, they are hoping to find or engineer bacteria that can make the conversion more efficient, maybe even make oil instead of gas...but they're a far way from that.
Well, apparently they found Bigfoot, so I guess anything is possible today.
http://www.cnn.com/2008/US/08/14/bigfoot.body/index.html
"Well, apparently they found Bigfoot, so I guess anything is possible today."
Wasn't that where Nate was on a fishing trip?
You won't get any argument from me on the source, about as accurate as the Daily Kos except on the other extreme. However, even a stopped clock is correct twice a day.
I was curious if anyone had heard about DOD backing it. I know the Pentagon takes a "roll the dice" approach with some research and was wondering it this was one of those projects.
I definitely wasn't interested in hearing a hysterical response. If it keeps the landfills smaller, is profitable and makes cheap particle board furniture a thing of the past, I would be quite happy that my tax dollars are funding it.
"It is a truism that almost any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so, and will follow it by suppressing opposition, subverting all education to seize early the minds of the young, and by killing, locking up, or driving underground all heretics.
An armed society is a polite society. "
Robert Heinlein
If you use Wingnut Daily as a source, you are almost guaranteed to get one. Come on, they're the site that publishes Jerome Corsi's abiotic oil articles. The ones where he claims offshore oil proves oil is abiotic, because dinosaurs never walked on the bottom of the ocean.
If you followed the links in the article you posted, you'd find company's web site. Their media section has an article that mentions someone at the DOD who supports the idea, as well as the names of local congress critters who also support it. But near as I can tell, the support is of the psychological variety. There's no mention of money.
Like I said, no argument on the source but it seems there is more to this than the standard "billion barrels of oil" trash.
http://www.tiftongazette.com/local/local_story_211113721.html?start:int=0
I've been trying to find out if the contract is real but this type of thing won't show up in standard contracting channels, ie sole source research. Seven demo plants isn't exactly small change so this must have impressed someone.
Or maybe the announcement is supposed to generate the needed funding.
I noticed no hysterical responses. Here are your hysterics (from the bottom of your cited article):
This is know-nothing nonsense, and you wonder why people react with disdain.
From Energy Crisis Myth posted upthread.
Unfortunately there's also a Second Law of Thermodynamics. And shouldn't the word 'choice' read 'shortage'?
Problem solved. Why didn't I think of that? It is just fuel that is the problem.
Alas, another economist who thinks he understands engineering and science. Sure, there's no shortage of electricity just now, so, to him, there's no "crisis". Also, there's a tremendous amount of solar energy which illuminates the Earth every day, again no problem, right? Lets just capture that solar energy and use it to light up the night and drive all our cars. The trouble with this is that the economics of doing this mean that it would cost more in today's dollars to capture and store solar than to pump oil out of the ground. So, oil being a finite resource, the crisis is that the cheap energy (read: oil) we have enjoyed and upon which we have built our modern world will not be available much longer in the quantities to which we are accustomed.
You really got to love these "free market" wing nuts. I wonder whether this professor would accept putting his salary out for bid to the "free market"? We hear that California is having trouble meeting it's budget. Wouldn't it be great if the politicians decided to put each professor out on contract to the students, who could "vote" on which courses to take and which to drop. I can only imagine the result would be that professors who taught easy courses and gave good grades for average work would be promoted and the rest might find their income cut or worse, lose their positions. Or, let the professors submit bids for the job of teaching the youngsters, with the low bidder getting the task. Again, the "free market" approach would require that the only standard allowed would be the dollar amount of the bid. No need to consider the experience or education of the bidders. I submit this would produce a big shake up in the ivory towers of America. It's obvious that there's no need for any intrusive "quality control", is there Professor?
E. Swanson
You could get some guy from New Delhi to do his job (better) for maybe $6000 per annum. He could teach the kids over the Net.
What's amazing is that the author of the above linked economics article, has an impressive set of credentials in the dark "science" of economics.
Here are some small snippets from his bio:
Paul T. Prentice, Ph.D. President ... is considered a leading expert on general economic conditions and their impact on agriculture.
... Dr. Prentice is regarded as one of the most popular writers in the field. His clear, concise analysis is widely distributed and quoted in the agricultural and business press -- from the Wall Street Journal to the Farm Journal. He has been interviewed on national TV (NBC, CNN), and was noted in Newsweek as "a respected consultant".
... 1999 to present: Adjunct Lecturer, College of Business and Administration, University of Colorado at Colorado Springs.
* Teach a course in Principles of Economics to MBA students.
Russia: Poland risks attack because of US missiles
Hey, Ribbentrop, are you there? It's me, Molotov...how have you been. We should get together, it'll be just like old times.
Starting to get a little scary out there. Putin has got the itch.
Yo Tovarisch! Long time, no war! How's it going? Yeah, time to get back in the saddle...
Oh, I don't know. Imagine how the US would have reacted during the cold war if the Soviets had tried to put missiles in Cuba or some place like that?
Oh, right.
First of all, unless I have my history wrong, the Soviets were putting nuclear weapons in Cuba, while we are putting missle defence system in Poland.
Even if this statement was justified, it doesn't change the fact that Putey-Pute does have the itch. He is doing his best to restart the cold war, and re-assert Russian power.
Not that our guy is much better, but Putin is not playing nice.
I don't know about you... but if I were living in Poland or in any of the Baltic states I'd start looking for some firewood... NOW.
Look at this table:
The data is from the EIA, the modifications (red rectangles) are mine.
http://www.eia.doe.gov/cabs/Russia/NaturalGas.html
The amount is negligible for the Russians... but essential to these countries. And I happen to live in Hungary, which is not very far by any measures...
Poland appears to be a transit country. should there be no gas to Poland, Rostock, Germany is affected, too.
I'm sure Euan could weigh in on this. The Baltic states could easily be in trouble though.
I don't care one way or the other, but when you are getting 47% of your NG from a country, picking a fight with said country is pretty pushy.
Hi Eastender,
A few days ago you were saying that you were going to present your price model for oil. Do you know when you will get around to doing that?
Thanks,
Suyog
Shouldn't take long. I'll be done with modelling net exports by Monday. Present and past elasticity I know, assumptions are easy to make (incorrect ones are a lot easier though), so I think I'll have preliminary results in a week. Maybe less.
As for the price elasticity of demand: I found it to be a bimodal function. It usually is pretty low (in the range of -0.04 ----- -0.08), but at certain times it jumps up (-0.25) that's when demand destruction occurs.
Then the remaining consumers tend to be richer, so elasticity goes down (-0.03) and then back up as additional demand is under further destruction. And so on and so forth.
Rough numbers I can do tonite. A more precise version is not far either. How much can you wait? :-)
Thanks a lot, eastender. I can wait for a week. Can you do this as a guest post?
It might get lost in the drumbeats.
As for the guest post: I'm not sure about that. :-) I'm not one of the editors so I have as little a say regarding that as any other readers here.
But I promise I'll let you know one way or another. I'll post a short version in the Drum Beat, and in case you don't show up I'll send it to you via e-mail.
Regarding the "shrinking trailers" article linked above, smaller doesn't necessarily mean cheaper.
I saw one of these on the road a couple of days ago. The F550 one starts at $200k!!!!
No mention that I could find on the website about gas mileage, but I guess that's ok since it can use biodiesel. And it has solar panels too! So it has to be green, right? Or to paraphrase the old adage: "If you have to ask the mileage..."
But the most egregious statement is on the purchasing info page - OF COURSE this is a business vehicle: