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Drumbeat: April 11, 2009
Posted by Leanan on April 11, 2009 - 10:47am
Saudi Arabia could soon move ahead with plans to develop its heavy oil resources, helping to dispel fears that less investment could trigger a future crude supply crisis.Dark and viscous, with the appearance and consistency of treacle, heavy oil has gained prominence in recent years as a source of transport fuel for the world, as new discoveries of more desirable light crude oil have failed to keep pace with the rate at which existing fields are being emptied.
But the price of crude, which has decreased by about two thirds from its record peak of US$147 a barrel last July, and the continuing drop in global energy demand has caused oil producers to rethink investment plans, especially concerning large, expensive heavy-oil projects that require long lead times.
Under investments causing ripple all around!
(MENAFN - Arab News) The abstract is now taking a concrete shape. The issue of investments in new capacity, or the lack of it to be specific, is starting to take center stage. Investment bank Barclays is reporting that investments in the sector are down by at least 12 percent."While everyone has been so focused on short-term demand, it now looks like we'll see some real tightening in the market in 2010 due to the drop-off in non-OPEC supply," said Amrita Sen, analyst at Barclays Capital in London. "There could be a real run-up in prices just as the world economy begins to recover, which is the last thing the economy needs on the way out of a recession."
Oil Giant Chief Predicts Shortfall in Investment in Russian Oil Industry
The shortfall in investment in the oil sector will reach R300bn in 2009, Rosneft head Sergey Bogdanchikov predicted today. In his words, "the shortfall in investment may lead to a reduction in oil production from 490m tonnes to 450m tonnes over five years". Over the period between 2009 and 2013 the shortfall in investment may reach R2,800bn. Bogdanchikov said however that according to an optimistic scenario "should sufficient investment be made, oil extraction in the country could increase and reach 700m tonnes a year".Bogdanchikov also said that at present 93 percent of the new oil deposit development projects are unprofitable due to fiscal burden and high tariffs for natural monopolies. In his words, "fiscal burden and income tariffs constitute around 70 percent of the price of oil". Thus, he said, "an oil company manages only 7 percent of the price of oil; everything else is taken away".
Venezuela Aiming to Ship 1 MMbopd to China
Venezuelan President Hugo Chavez said here Thursday that he has reached an agreement with Chinese counterpart Hu Jintao on a plan to boost Venezuela's oil shipments to China to 1 million barrels per day next year.
Jubail: the biggest is getting bigger
In 1983 Saudi Arabia’s Jubail Industrial City was cited in the Guinness Book of Records as the largest engineering and construction project ever attempted. In 2009 it’s still getting bigger. Benjamin Millington went onsite to gauge the scale of expansion.
Russia, Ukraine Discuss Natural Gas Talks
Prime ministers from Ukraine and Russia discussed resumption of talks concerning natural gas delivery, an issue affected much of Europe in January.
Oman oil income sees record rise of more than 48% in 2008
A surge in oil prices and the country's output boosted Oman's hydrocarbon revenues by more than 48 per cent to a record level in 2008 and allowed to net its highest ever budget surplus, official data showed yesterday.
As UK shoppers tighten their belts, organic farmers feel the squeeze
At least two organic farmers a week are leaving the movement as consumer demand for premium food stagnates and costs rise.As evidence emerges that the organic revolution has stalled in the face of rising food prices and job uncertainty, the industry's two biggest certification bodies have told the Guardian that a total of at least eight members each month are quitting their schemes.
In addition, the National Farmers' Union said, "a small number at breaking point" wanted to leave but could not, because they had converted less than five years ago and would have to pay back all the subsidies they had received.
Peru faces water versus oil dilemma
Last month, Peru's top court ruled that oil exploration should be halted in the protected Cordillera Escalera mountains while the government approves the regional development plan.In a country where the faith in the independence of the judiciary is only gradually being restored, the Constitutional Tribunal's ruling was unexpected.
The ruling set an important precedent as it was based on the international human right to drinkable water.
Industrial farms could leave eastern Wash. with dry wells
Scott Collins' family has been farming in arid eastern Washington since his great grandfather first homesteaded the 1,500-acre, dry-land wheat farm more than a century ago.But the 58-year-old Collins fears he may be the last of four generations on the farm.
That is because the groundwater he and his family depend on could be in jeopardy if a proposed cattle feedlot and other industrial-sized projects like it are built in his rural Franklin County.
Water crisis rocks LA, Mexico City; who's next?
WASHINGTON (UPI) -- Water, water hardly anywhere. Water crises are rocking two of the world's largest cities as Mexico City starts a 36-hour water cutoff and Los Angeles is in the midst of a water dearth.The problem, however, is far wider than two of the most populous cities in the Western Hemisphere. Beijing, the capital of China, has a serious water shortage. The Israelis and the Palestinians are at loggerheads over control of the key aquifers west of the River Jordan that are vital to sustain both peoples. An unprecedented world population of 6.8 billion people -- more than three times that of 80 years ago -- and the inexorable reality of global climate change are guaranteed to make the long-term crisis worse.
Silver lining at the N.Y. Auto Show
The buzz is that the White House wants to adopt a single national fuel economy standard, which would help both automakers and customers.
For the past five years, Shuman has been barnstorming across the United States, preaching the gospel of economic "localism." It's an appeal to community values as well as economic self-interest, a call to support locally owned businesses that don't outsource, don't pack up their businesses and leave on a moment's notice, and who recycle their customers' dollars back into the community.
Education needed for energy crisis
While talking with the Star News, Shuster expressed his belief that between use and population growth, the world will run out of conventional oil reserves in 30 years.Shuster’s book, “Beyond Fossil Fools: The Roadmap to Energy Independence by 2040,” describes the current problem, as well as available solutions and a detailed plan for the future.
“I believe this is the most important issue of this century,” he said. “If we don’t fix this one, nothing else makes much difference.”
Al Gore is about to feature in a new movie, but he's not going to like it very much. Titled Not Evil Just Wrong: The True Cost of Global Warming Hysteria, the film presents a devastating account of the shaky foundations and hefty price of Mr. Gore's brand of self-interested and hypocritical alarmism.Created by the Irish film making duo of Phelim McAleer and Ann McElhinney -- who made another excellent documentary about the "dark side of environmentalism" called Mine Your Own Business-- Not Evil provides the perfect rebuttal to Mr. Gore's An Inconvenient Truth.
Obama, Who Vowed Rapid Action on Climate Change, Turns More Cautious
WASHINGTON — President Obama came to office promising swift and comprehensive action to combat global climate change, and the topic remains a surefire applause line in his speeches here and abroad.Yet the administration has taken a cautious and rather passive role on the issue, proclaiming broad goals while remaining aloof from details of climate legislation now in Congress.
Biofuel Production Threatens Water Supplies
The production of bioethanol may use up to three times as much water as previously thought, a new study finds, becoming the latest work that could burst the biofuel bubble.
China keeps Chavez close, but not too close
BEIJING (AFP) — Despite his gushing compliments this week, Beijing has been careful to keep Venezuelan President Hugo Chavez at a distance as it tries not to jeopardise its relations with Washington, analysts say.
Fall River — Bristol Community College’s Institute for Sustainability and Post-Carbon Education, founded last fall, will host its first event Tuesday: a conference on the effects of a world with dwindling oil reserves.
The Top Ten Reasons for Energy Independence
For those who wonder how to convince resistent people we must move away from fossil fuels due to Climate Change, I have one word of advice: Don't.There's actually no need. Not because Global Warming isn't real - it is, and the overwhelming evidence is that it's largely fueled by human actions - but because there are other reasons why we should move away from fossil fuel-based energy. The elegant thing about a multi-pronged approach like this is that you can always find some reason to convince someone with. For example, hard-core conservatives may simply refuse to believe anything people do could affect "God's perfect world" but they are perfectly willing to accept that we should not be sending half a trillion dollars a year to foreign oil producers who mostly hate us, and who export terrorism along with their oil.
How to Profit from Energy Illiteracy
Politics is a painfully slow and inadequate way to go about forming an energy strategy, but it seems to be the only way we have.
Designing Through a Depression
All of us who purchase these things should be thinking — and no doubt are, more and more these days — do I need this? Is there another one that’s more efficient? That uses less packaging? Will last longer? Has less square footage? Looks better? Is more fun to use? Is something I want to pass on to my grandkids? (This last notion, which aims for design to create things that are not throwaway but built to last, was recently termed “heirloom design” by innovator/inventor Saul Griffith, who under the umbrella of Squid Labs is working on everything from wind power to low-cost eyeglasses for the developing world.)
Time to speak up for American oil
President Obama talks a lot about reducing dependence on foreign oil, making energy less expensive, and creating good jobs. Yet he's turning his back on an answer for all three – more oil drilling in American waters. The administration would do well to listen to the American people, who support this common-sense step by more than 2-to-1 margins.
Asian firms the new players in Iraq’s oil industry
LONDON (AFP): The predominance of Asian operators among bidders for a chunk of Iraq’s vast oilfields shows the rising power of small and flexible state-run companies prepared to take risks, analysts say.
Homes that use natural gas for heat could save big
COLUMBUS, Ohio (AP) — The 60 million American homes that rely on natural gas for heat can expect substantially lower bills next winter thanks to a glut in supply and the weak economy.Just as distributors start to lock in contracts for the coming winter, natural gas prices have fallen almost 75 percent. Not all of that will show up as savings on the heating bill, but it should still mean noticeable savings.
Utilities also generate about a fifth of the nation's electricity with gas, and many of their customers should notice price breaks as well.
Hawaii's total energy cost index is set at 4.18, nearly three times the energy cost index in Wyoming. Other lowest-cost states included: Idaho, Utah, Kentucky, West Virginia, Missouri, Nebraska, Indiana, Iowa, North Dakota, South Dakota, Arkansas, Kansas, South Carolina and Oklahoma.Hawaii's energy costs are so high no other state even comes close to the premium paid by people living in the islands. The energy cost index for those living in Hawaii was 51 percent more than for those living in New York, the second-highest cost state. Hawaii's electricity index was 74 percent higher than New York's and the state's gas index was 13 percent higher. Other highest-cost states included: Connecticut, Alaska, Rhode Island, Massachusetts, New Hampshire, California, New Jersey, Maine, the District of Columbia, Maryland, Delaware and Florida.
Obama may cede Iran's nuclear rights
According to the Wall Street Journal, the Obama administration is "carefully considering" the setting up of an international uranium fuel bank in Kazakhstan, which could form the exit strategy for the historic US-Iran standoff. That is why the visit by the Iranian President Mahmud Ahmadinejad to Astana, Kazakhstan, on Monday assumes exceptional importance.
The death of the small town has been widely exaggerated. On the contrary, small towns are thriving just as they have for decades, in perfect balance. Population is steady, infrastructure is sufficient, all goods and services required are available, and it is rarely more than 25 miles to the nearest Wally World — an outing everyone enjoys. There is very little unemployment; kids know that they will either take over the family farm or business or that they will have to seek their futures elsewhere, or some combination of working elsewhere until family concerns or opportunities call them back.
A new study of New York City bicycling accidents over a decade found that one in five cyclists who died had alcohol in the body.
Green light at the end of the bicycle path
As the ultimate green and healthy consumer activity, biking is worth fighting for — and it's gaining friends in high places. If cycling truly becomes a mainstream transportation option here, the impact in reducing global warming and air pollution could be enormous.
Renewable energy 'green bank' idea takes root
A coalition of energy companies hopes to reinvigorate the market for funding renewable energy projects by creating a government-backed “green bank” to serve as a conduit for billions of dollars in federal loans.Under the plan, outlined in federal legislation sponsored by Rep. Chris Van Hollen, D-Md., the bank would be an independent, wholly owned corporation of the federal government focused solely on loaning money to a range of projects deemed to promote clean energy.
These could include power lines to connect remote wind turbines with areas of high demand, landfill methane capture projects and refineries that turn organic material into fuels.
The bill also includes funds for new nuclear power plants but only if other funding programs that might be open to those projects are exhausted.
Japan solar subsidies lure fewer users than planned
TOKYO (Reuters) - Japan's subsidies for home solar panels have attracted far fewer applicants than planned, industry data showed on Wednesday, underscoring the likelihood of bold government steps to promote solar power.
In Big Green Push, Australia Thinks Too Small On Solar
The government is pushing through a carbon trading scheme that will penalize big greenhouse gas emitters; a major piece of renewables legislation is due for approval within months, setting a target of 20 percent green energy by 2020.But supporters say these shiny targets may be undermined by policymakers who think too small -- limiting the most generous rebates for renewables to the first 1,500 watts of capacity, or about half the minimum of the 3,000-5,000 watts used by the average Australian home.
Expert: Don't 'rinky-dink around the margins' of climate change
Auden Schendler is blowing a metaphorical raspberry at the kind of hybrid-driving, plastic bag-banning environmentalists for which Seattle is known."The problem is, too many Americans are saying: 'I've got my Prius and that's all I need to do,'" Schendler, the executive director of sustainability at Aspen Skiing Co., said during a luncheon in downtown Seattle Friday.
Climate change hits Australia first, and hard
In the 1959 Gregory Peck classic “On the Beach,” humanity's last holdouts in the aftermath of a global nuclear war huddle in Australia and wait for the inevitable atomic wind to carry the rest of the species away. When it comes to today's real-world climate crisis, though, Australia is going first, not last.
Report: Iowa corn growers lose $259 million on global warming
DAVENPORT --- A report released Thursday by Environment Iowa showed that Iowa corn growers lose $259 million a year because of global warming.The annual loss to Iowa farmers tops all 50 states. Illinois is a close second, with a $243 million annual loss, according to the report. The report says that agriculture and the renewable-energy industry can help slow the problem.
Joe Romm’s Solution to Climate Change
The solution is centered around achieving ~14 “stabilization wedges”. One wedge = one billion fewer metric tons of CO2 emitted globally, compared to projected levels. Again, this is possible with current technologies, and has a net cost of zero. The basic strategy is to replace all coal as quickly as possible, and to electrify transportation as much as possible.Though there’s no silver bullet, but there is “one” solution: we must deploy every conceivable energy-efficient and low carbon technology that we have today as fast as we can. In order to reach the target carbon concentration of 350ppm, we have to deploy all 14 wedges of energy savings by 2040. Though increasingly serious implementation will begin soon, starting around 2030 multiple climate-caused catastrophes will cause drastic measures unthinkable today to be implemented. We must reverse the trend of increasing emissions by 2015-2020 at the latest, and we must have substantial action before 2012 or we’re toast.
Chu wants labs to work on energy, climate change
In a speech today at Sandia National Laboratories, U.S. Energy Secretary Steven Chu compared unchecked global warming to riding on the Titanic.“Lots of people see there’s an iceberg ahead, but it takes a long time to turn the boat around,” Chu said. “If we turn it now, we can mitigate the blow.”
Germany urges deeper US greenhouse cuts
BERLIN (AFP) – Germany's environment minister warned on Saturday that if Washington does not go beyond its current greenhouse gas cutting commitments, agreement on a new climate pact this year will prove difficult.
Earth's Arctic Freezer Turning Into Hothouse
UXBRIDGE (IPS) - The world is losing its northern freezer as Arctic winter ice is in sharp decline, NASA scientists reported this week. Even with below average winter temperatures, Arctic ice is thinner and covers less area than it did a decade ago.Arctic sea ice is the cooling mechanism for the global climate system. As it declines and the region warms - already three to five degrees Celsius warmer - then inevitably there are local, regional and hemispheric climate impacts.
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Bank failure Fridays - not even Good Friday is sacred:
North Carolina, Colorado Banks Shut as 2009 Failures Reach 23
Mish's reply:
"In the US, the Bank of Happiness would likely get raided by the IRS. Participants would be subject to an official crackdown asking for back taxes and huge penalties."
Bizarre... I just posted on a system exactly like this. Not a new thing, though the article implies it is. Perhaps it is for them.
Cheers
People should be moving more deeply into the cash and barter economy since the "official" economy is so heavily tilted in favor of the large banks, credit card issuers, hedge funds, and megacorporations.
They can't audit us all!
If it wasn't so sad i would say you should play 'another one bites the dust' every time a bank fails. Still i find it very interesting that the only place to find out about these bank failures is searching for the articles online that no news channel has mentioned 'bank failures' for many months. They just keep on repeating 'the recovery is just around the corner' mantra. Baghdad bob anyone?
C+C verses All Liquids
As people know when I quote oil data on this list I am talking about Crude + Condensate. There are two reasons for this. First the EIA only gives data for all nations as C+C. Second, and most important, is I regard C+C as the only reliable way to measure when oil peaks in nations as well as the world.
I regard “all liquids” as a totally nebulous figure. It is more of a smokescreen and sometimes disguises the real oil production data. One reason for this is that all liquids include biofuels such as ethanol and palm oil. These fuels require massive amounts of fossil fuels to produce so in essence it gets counted twice, once when extracted from the earth and again when it produces biofuels. Also of course is the fact that NGLs are seldom used for the same purposes as crude and should not be counted as the same thing.
I maintain that the growth in all liquids is primarily due to the growth in biofuel production and hides part of the true decline in oil production. For instance in 2007 the US’s percentage of “other liquids” included in their total oil production was 40.12%. For the world in 2007 the figure was 13.52%. Those figures in 2004 were 37.72% and 12.77% respectively.
I have stated several times on this list that non-OPEC oil production peaked in 2004. Yesterday Ace corrected me on this point stating that non-OPEC peaked in 2007. Well yes and no. Non-OPEC C+C peaked in 2004 while all liquids peaked in 2007. And just in case you are interested non-OPEC C+C, 2008 verses 2004, was down by 761,000 barrels per day. Over the same period all liquids was up by 55,000 bp/d. However all liquids was down by 285,000 bp/d in 2008 verses 2007, the year non-OPEC all liquids peaked.
All above data are from the EIA's International Petroleum Monthly.
Ron P.
Ron, what are natural gas liquids usually used for?
In western Canada, natural gas has been the most common heating source for decades. All buildings are heated by it. There are also some uses for industrial and chemical production.
While I believe we hit Peak Oil circa 2006 (plus or minus a couple of years makes no difference, and I don't like to see people squabbling over such petty details), I don't think we have yet hit Peak NG. What bothers me is that until we hit it, we will do exactly the same thing we did with cheap oil, squander it.
It is my understanding that when one cools the natural gas that is extracted, some of the heavier molecules condense out as liquids. Companies can get more for the liquids than they can for natural gas, so they sell it as a liquid. The "dry" natural gas is sold to heat homes, to make fertilizer, and for various industrial processes. The natural gas liquids are ethane, propane, and butane.
Butane is often blended into gasoline. Propane is sold for heating, crop drying, and use in petrochemical production. Ethane is used in making plastics. It can also be used as a fuel or as a refrigerant gas.
Gail -
Quite correct.
These natural gas processing plants are typically quite large and complex operations with lots of large-scale cryogenic equipment. In outward appearance they look like a moderately large chemical plant. The amount of energy needed to run them, as well as water requirements are non-trivial.
In the US they are so tightly integrated into the whole hydrocarbon supply chain that most of the material never sees the light of day, so to speak: pipelines going into the plant supply the raw natural gas, and pipelines going out deliver the 'clean' natural gas to the gas pipeline network, while other pipelines deliver the separated heavier hydrocarbons to downstream customers, some of which are nearby dedicated users.
Another example of the interlocking complexity of our whole fossil fuel/petrochemical infrastructure.
Natural gas liquids, mostly propane but also butane, are used primarily for heating. Oil is used primarily for transportation. Some oil, fuel oil, is used for heating but I know of no propane powered vehicles. There are natural gas powered vehicles but neither natural gas or LNGs, (Liquied Natural Gas), are counted as part of "all liquids".
There are propane service companies around here (Dayton, OH) that power their vehicles with propane.
Hi Ron,
According to Environment Canada, there are 160,000 propane powered vehicles in this country, plus an additional 20,000 that operate on compressed natural gas.
Source: http://www.ec.gc.ca/cleanair-airpur/CAOL/OGEB/fuels/reports/ccme/ccme2_2...
Cheers,
Paul
Okay, I said "I know of no propane powered vehicles." Well now I do. Perhaps we will be seeing a lot more propane and natural gas powered vehicles in the future. Well, that is if all those stories are true about the vast quantities of natural gas reserves we have.
Does anyone have any idea as to how difficult it is to convert a conventional gasoline powered car into a natural gas or propane powered car?
Ron P.
Ron,
This is becoming more common in the UK. It's fairly easy to find LPG (propane) filling stations here.
Most petrol and some diesel engines can be converted although diesel engines usually run on a mix of diesel + propane.
There's some more info and faq at http://www.drivelpg.co.uk/index.php and a Shell page at http://www.shell.co.uk/home/content/gbr/products_services/on_the_road/ga...
LPG at filling stations is about half the cost of petrol in the UK encouraging people to switch. I nearly did a few years ago when I was driving 100 mile round trip every day.
In Sydney (Australia) all service stations have at least one LPG pump (and have for at least the past 20 years) but not all rural areas have LPG. Most taxis and a portion of private cars also use LPG and the govt has offered subsidies to convert. Price is about 50-60% of the cost of petrol.
Propane and butane sound like pretty useful liquids to me. You would think that natural gas liquids can be extracted from natural gas using less energy than turning crude oil into diesel or gasoline -- can someone confirm this?
Most forklifts that I have seen use propane as a fuel. This is because forklifts are often used indoors, and propane powered engines cause less pollution than other internal combustion engines.
During the 1980's and 1990's, most taxis here in Vancouver, BC were powered by propane. Nowadays, hybrids are the most popular taxis here. I also know that Tehran, Iran had plans to convert its taxi fleet to propane. These propane taxis were never that efficient, possibly because they were regular gasoline engines converted to run on propane.
The only use of butane that I know of is for lighter fuel.
I do agree that there probably isn't enough NGL to make much difference as far peak oil is concerned.
I think that companies are maximizing what they can get as NGLs right now, because the price is better than for plain natural gas. So we are getting as much now as we will ever get.
Question:
Does natural gas from conventional gas production contain more NGLs than natural gas from unconventional natural gas production?
This might be important as we switch more and more to unconventional production.
If I remember correctly, "associated gas" (that is, gas that is dissolved in petroleum) is quite a bit wetter than most other natural gas. It seems to me that that was why Rune was saying that IEA the forecasts of an increasing proportion of NGLs were so unlikely. Associated gas is a subtype of conventional gas, so unconventional natural gas would tend to be dryer.
that is a difficult question to answer. every gas reservoir has it's own reservoir fluid composition. i believe that the barnett shale, for example, is a rich(high % of intermediate h-c components) natural gas. and i only say so because the barnett grades into a volitile oil content in the deeper part of the play. anyone with more direct knowledge of the ngl content of the barnett on here ?
the bakken "oil" play has an area containing a rich gas/condensate and the oil region contains associated gas with a high ngl content, up to ~ 1800 btu/scf.
on the other hand we have coalbed methane.
Re: Designing Through a Depression
The article makes it sound like there's nor problem to the current recession/depression if only we just let the designers loose to think up more techno gadgets. The folding bike shown looks great, the only problem is they cost $800 each! that's a hefty penalty to pay for the ability to fold it and store it in the trunk of the Merc to be able to ride from the car park to the office. Not many out-or-work laborers going to be able to buy one of those...
E. Swanson
$800 sounds good to me. The ones I was looking at were $1300.
I want a folder because I live upstairs don't have anywhere to store a bike on the ground floor. My stairs are nonstandard, and it's incredibly difficult to get a full-size bike up them, regardless of weight.
The Strida is not going to be a good road bike, as it is a single speed design. There's an option for a shifter, but, even with that, I would not want to ride one fast with those little wheels. There wouldn't be enough gyroscopic stability, IMHO (and I used to ride 50 miles a day, some times rather fast). Then too, they are made in Taiwan...
E. Swanson
I'm told the best folding bikes are made in Europe and Asia. That's where they're in most demand, as people use them in conjunction with trains and such.
Which reminds me of one of my pet peeves...why is all this stuff designed for other countries not available here? It's cheap, durable, seemingly ideal for a post-peak world...and not available in the US. Why not?
The "$100 laptop" costs $400 in the US (because you have to buy one, give one), and doesn't come with the crank/pedal that allows it to operate off the grid. The D.lights look really cool, but they're apparently only interested in selling to distributors. I guess I can understand why the Lifestraw isn't sold in the US. It doesn't work on Giardia, and so someone would probably get sick and sue.
I think the Dead Kennedys nailed it with the title of their opus,
"Give Me Convenience, or Give Me Death!"
http://en.wikipedia.org/wiki/Give_Me_Convenience_or_Give_Me_Death
You may want to take a look at this site. Their bikes have a good reputation.
http://www.bikefriday.com/2009
Cheers!
Was glad to read that Auden Schendler is getting out and speaking about his new book, "Getting Green Done." I finished reading the book earlier this week. Auden is in charge of sustainability at Aspen Ski Company and has also worked for Amory Lovins, Rock Mountain Institute. He has also written quite a few articles on climate change for major publications including a recent one in Scientific American magazine.
His book is an interesting work with lots of real life stories on how difficult it is to get people to conserve energy and reduce CO2 production, even when it produces strong financial returns. He is very passionate about climate change issues which is what this book is about. For over a year now, he and I have had a number of discussions about peak oil and its implications so I know he is very peak oil aware. However, I was surprised there was no mention of this threat included in his recent work. For some reason most people even when confronted with overwhelming evidence about peak oil seem to want to ignore it. Perhaps he did not want to dilute his climate change message, I don't know. Peak oil is a very related issue and at least a brief discussion on this topic would have been an important addition to his work. I hope you get a chance to read this book and can decide this for yourself.
As with the Oped news story about getting the message (whichever message) to different groups using language they are able to hear, ( http://www.opednews.com/articles/The-Top-Ten-reasons-for-En-by-Scott-Bak... ) he might feel that bringing BOTH PO and CC into the discussion will simply send too many ears reeling into 'La La La, I can't hear you!-ville', and so chooses to nail home a point with one catastrophe at a time, no matter how completely intermingled they may be.
Bob
that could be the case. I will ask him about it....once he finishes his book tours.
Those concerned with peak seem to find it easy to dismiss ACC with the toss off, "What's good for one..."
Those concerned with ACC seem to find it east to dismiss PO with, "Huh?" and/or "But ACC will kill the planet!!"
The problem is, both are generally true. The first is not actually true, it's just mostly true. (Think Princess Bride.) Some solutions, nuclear, e.g., don't work for ACC in the short term because you simply can't build enough plants fast enough, but help with some portion of PO somewhat effectively, at least on a regional basis.
The second isn't actually true, either, but it is true of human civilization - at least as we know it.
Not many seem to see them as completely intertwined as some of us do. The positive and negative feedbacks are significant. Less oil = less energy to do work... of all kinds. That means less energy for transition. More severe weather means less oil (hurricanes) and less food. Less food and oil means less work to mitigate either.... etc. (Simplistic, I know.)
I don't know how to get people to realize that less energy means big changes. I don't know how to get them to think generations ahead so that ACC seems urgent now. I don't know how to get them to realize the economic downturn will not be short, that it means permanent change, that it means our ability to deal with ACC and PO are diminished, that it means a paradigm shift.
But a big step in the right direction would be to get POers and ACCers all pulling together. How do we get from Set A, Set B and Set C (intersect) to just set C?
Right now, my plan is to post, plan, and eventually build and teach by example.
Protest? Marching? Don't know. Maybe this time the best thing we can do is to just start doing what needs to be done so others can see not everything must change and that a healthier way of life awaits.
Aigooo....
Cheers
yes, that is why I like the Transition Towns approach. It seems to bring together the peak oil, climate change, local/healthy food, permaculture, smart growth, public transit and energy efficient builder types.
Here is what a nearby local community is doing to unpromote renewable energy development http://www.chicagotribune.com/news/chi-ap-mi-boardmandams,0,652037.story I testified before this group a while back to try and help them understand the implications of this type of decision. Guess they have other priorities on their minds.
Jim:
Good point! I almost added a chapter on peak oil (and one on transportation too) but in the end, felt the subject was too far afield from the subject of my book, which focuses closely on implementation of climate solutions from the corporate perspective, less on broader policy questions. Also, I'm not an expert on peak oil, and felt others had done and will do, a better job of explaining it. But in my climate discussion at least a mention of it would probably have made sense!
The article linked above Biofuel Production Threatens Water Supplies reminded me with a discussion I had with a farmer I met from Cheyenne, Wyoming. He was telling me that the aquifer is almost completely drawn down there, and they may have to stop irrigating from the aquifer (and I would suppose, stop getting drinking water from the aquifer) shortly.
What amazed him was that investors had put in an ethanol plant, and were raising irrigated corn for use as input for the ethanol plant, using up what little water there was in the aquifer. How sustainable is this?
I wonder if we stop using aquifer water for irrigation and industry, whether it might naturally recharge enough for household use in just a few years?
Or is even that use more than an aquifer can bear?
Most ancient aquifers were initially "charged" by the melting glaciers thousands of years ago. They are not likely to recharge anytime soon. In the meantime, in places like WY, NE, OK, CO, TX, there won't be many households left to service in only a few years after their water source fails them.
Some aquifers collapse after too much water is withdrawn from them. This is shown by earth subsidence and cracking in some areas where aquifers are being overdrawn.
Collapsed aquifers will NEVER refill.
Gail, here is a list of ALL U.S. ethanol plants. The only thing it shows in Wy is a little Wood-Waste demonstration plant.
It wouldn't use much water, and, obviously, no extra water would be used to grow "wood-waste."
BTW, don't those Coal Mines up there use a lot of water?
Edit: Forgot the List.
It looks to me as though the corn ethanol plant went bankrupt.
There used to be a company called Wyoming Ethanol Since it distributed distillers grains within a fifty mile radius, one must assume it processed corn. It and its new owner filed for bankruptcy last year.
There is now a demonstration scale cellulosic ethanol plant in the state.
I can see why a refinery using irrigated corn would go bankrupt early on. I didn't check to see whether the fellow I talked to was up to date on his information.
Edit: I found another floundering corn ethanol plant. Big Horn Basin Ethanol halts new Wyoming ethanol plant; cites feedstock, technology concerns. This was also a corn ethanol plant, that never made it to its first day of production.
Elegant dismission Gail, I have a sensation that kdolliso is "Crying Over Spilt Ethanol" , his favorite food for thought and the reason for him to live is crumbling as I type.
I feel a little pity for him, but not much, b/c what else can he think of when the last ethanol plant goes belly up.
I see ethanol as something close to a scam - not more - but not less either.
Don't worry about me, Paal. My car will run on gasoline, or ethanol.
What are YOU going to do if gasoline, and diesel goes to $10.00/gal, and ethanol is $3.50?
I'd petition my congresscritter for repeal of the subsidy if that were the case.
And, I would co-sign it. :)
I've already gone through with the transition in adopting Duke Nukem's ways
Short distances : Jet-pack ... and for longer distances : Tele-porting.
bank failures? why does anyone need a bank? for electronic transactions.
two weeks ago my bank offered 6 month CD's yielding 2.2%. that sign sort of disappeared. but i was at a brand spanking new mall in bergen county new jersey, so new they were hanging a sign over the main entrance with a crane while shoppers were busy going in, a bank there had a 1 year CD yielding 1%, ONE PERCENT!!!!!! what does that mean? the banksters dont want you to save. they want you to borrow. credit cards are most typically 20 to 32%. sure a 30 year fixed mortgage for a home is currently 5%. shouldnt folks make enough wages from working to buy stuff without borrowing? and if one can buy stuff without borrowing and maybe save some, why the low yield? this mall was an upscale mall. a super market catering to natural foods was doing a booming grand opening business with a custom coffe bar and banks of buffet take out trays and lots of packaged food from all over the world. a swank burger eatery named after a TV chef sold $4 milkshakes. JHK was no where to be seen. of course al gore was no where to be seen either. a police helicopter was flying over the area for over an hour. i sat by a window and obsevered. no one looked up.
everyone appeared intend to get in the mall to buy...something.
i expect a massive crisis when the predicted collapse of the consumer paradigm manifests itself. but when? soon? why no one seems the least worried by the disaster? this scene has placed doubts in my mind. the doomer porn of civilization ruined and zombies prowling the streets, where only those mobile and brutal enough to kill for a tank of juice will survive...HELP! i need doomer reinforcement!
In Alberta, banks are offering term deposits (= CD) at 1% to 3% to retail customers, but I have been going instead for bonds at 4.75% from Canadian banks. My best investments remain mineral rights and private-equity junior petes.
The biggest problem I have is finding the good investments (look up "Harris's Lament" on the Internet). They are snapped up by word of mouth and never appear on the market. You have to get to know people in the industry. This is another example of why your best asset should be networking with people who can make a difference.
My weekly newspaper in small town Wisconsin has a quarter-page ad from Edward Jones promoting an investment with 5.25% yield. The vehicle? Tax-free municipal bonds, final maturity May 1, 2030, underwritten by (drumroll...) the taxpayers of Miami-Dade County!
Next week: an exciting investment opportunities in bridges...
From the article on Hawaii:
What is the cost for electricity in Iceland? Hawaii ought to be able to take more advantage of the geothermal potential it has. I suppose and Icelander is more apt to consider a heat source as valuable than someone from Hawaii, but clearly that has to change.
Theres something clearly wrong with those numbers. Even here in uber-pricey PG&E land, energy hogs are charged $.35 a KWhr at the magins, average users less. I think the nationwide average is more like $.11 IIRC. I think she got a decimal point wrong! But, that shouldn't be surprising journalists are **ALL** math and physics dummies.
http://www.neo.ne.gov/statshtml/115.htm
That was what I found most striking about the article. Hawaii is better suited to alternative energy than most. They have plentiful wind, geothermal, ocean thermal, biofuel, and solar resources. People are very environmentally conscious there, and worry about the oil for their power plants spilling on the beaches that attract tourists from all over the world (and are the lifeblood of their economy). And they pay the highest prices for energy in the nation.
Yet renewable energy still isn't economical there. They've tried them all, but still get most of their energy from oil.
Doesn't mean it's impossible, but it does suggest that there's a steep price to pay. Either by the consumer, or by the taxpayer (to subsidize renewable energy).
Even at $0.29/kwh, I am surprised that wind power can't compete. May be the government should start the project. I just don't trust corporations to do the right things for long-term projects -- for them, if it's not economical in the next 5 years so why bother. May be the state should start subsidizing some sort of renewable by placing a higher tax on FF sources. Hmmm -- if they can rid of those FF lobbyists.
On sensiblesimplicity.lefora.com I recently posted the following: "Hawaii has great potential for self-sufficiency in food and energy although those are currently out of reach for political reasons." This, I must admit is a somewhat educated guess since I am new to Hawaii and have not developed the background to back this up. But I'm sure its not the FF lobbyists. I will be looking more seriously into the details but I suspect it's just another example of a general proposition I've come to: No solution is given serious attention if it threatens the current power structure. By structure, I mean something deeper than the apparent institutions. You can have all the institutional reform you want but if you leave the same CLASS of people in charge, those reforms will be subverted. Before there can be real progress the current elites must be totally discredited and this can't be done by pointing out the consequences of policies, those consequences must be experienced as real. Less abstractly, Peak Oil will not become real to people in general until they cannot pay for gas at the pump.
That is untrue. It's out of reach because the population of Hawaii is in massive overshoot.
Even the (relatively) sparsely populated Big Island has twice the population it had in the old days - when Malthusian pressures drove King Kamehameha to conquer the other islands.
There's been some fascinating research done there. Scientists analyzed the soil under the ancient stone walls, and compared it to the soil not under the walls. The comparison showed the Big Island soil is exhausted from intensive agriculture.
Islands are bad places to be when it comes to resource limits. You are really trapped. There are stories of ancient Hawaiian battles where not many died in the actual fighting, but there was massive starvation afterwards, because the land could not support both the existing residents and the invaders.
Hawaii does have wind farms. And geothermal. They had ocean thermal in the past, but it's gone now. There were tax incentives for solar, but they went away when the '70s energy crisis did. They also have a plant that burns garbage, and they were talking about an ethanol plant.
They're trying. It's just not working.
With apologies, Leanan. I think it's time fort your picture; I saved the bookmark, and look at it for inspiration from time to time:
http://ia300212.us.archive.org/3/items/Kau_Windfarm_small/kausmall.jpg
I'm just putting the link, as it isn't my picture. It's a Hawaiian wind farm, abandoned when the gov't subsidies ran out, as I recall.
Oh Oh, that was a grim wind-park. It got me googling for more ..
http://static.panoramio.com/photos/original/10681524.jpg (award winning IMO)
http://www.geocities.com/daveclarkecb/Australia/WindFarms/DeadWindPowerI...
I had an Easter Islands flashback or a Mad Max moment.
What disturb me with those images is that if society will not give priority to disassemble ugly, failed and for_no_more_use infrastructure today - still with a lot of cheap energy - what then tomorrow ?
Will the Big Apples Skyline come down completely at natures own command ?
According to the website of Orkuveita Reykjavíkur (the main provider of electricity and heating in the capital area in Iceland - owned by the public) the price of electricity in Iceland is 7,35 krónur/kWh (krónur is the Icelandic currency). One dollar is about 127 krónur.
I know Hawaii's costs are very high compared to the rest of the US, but I thought the comparison was something like $.40 vs $ .11.
Hawaii gets most of its electricity from oil. The Big Island gets some of its electricity from geothermal. (I visited the geothermal plant, and talked to the person in charge last summer.) As I recall, the problems with geothermal are that it is generated in an area that is quite remote from where most people live. Making better use of it would require more transmission lines.
Also, it is base load transmission, that can't be ramped up and down. The amount of base load power needed within a short distance of the generating station is not very high. Hawaii doesn't use much at night, because everything shuts down then. If I remember correctly, there are plans to add some variable ("dispatchable") generation from the geothermal, using newer technology.
Looks like Social Security is getting ready to die much sooner than expected.
http://www.businessinsider.com/henry-blodget-the-social-security-bomb-20...
"Now that date could be as early as 2010, apparently."
"I base this prediction on my belief that more people will opt for retirement than are currently projected and that entitlement program tax receipts will be below current projections. Also, nearly every prediction by the CBO has been revised to the worse over the past year so I am “riding the trend” with this prediction."
If the economy does another big dive, even this may be optimistic.
Coot, it is all part of the same pie. Social Security will collapse when the US economy collapses, not before. When the US is unable to pay its debts then SS will die because SS is just another debt owed.
But for those who insist this is wrong I would ask them to consider what would happen if the US dropped all SS payments. Many more mortgages would go into default, billions in credit card payments would stop, many retail markets would collapse and unemployment would take another huge leap higher because of the money not being spent by retired people. This would be enough to push an already fragile economy over the edge.
So if Social Security collapses before the economy as a whole, then this would trigger the collapse of the entire economy.
Ron P.
It doesn't have to collapse into a crisis. Just have expense exceed income.
At which point they institute an emergency "means test" and start collecting taxes on income above 100,000.
Everyone know what they will do, they just don't have the guts to do it till an "emergency".
Agree, a good way of looking at it. SS is just one of many promises to pay that the US government has made. SS is the largest, but there are also the Federal employees, veterans, RR retirement (not as important as it used to be), and let's not forget the government rescue of private pension plans (not the general funds on Wall Street, but plans such as the UAW once the US carmakers go bankrupt.)
SS is just another government program, and SS taxes are just another form of Federal tax.
Then of course there are the promises of healthcare, and the looming expansion of said, along with promises to make sure everyone has a college education....
This list could get to be quite long.
It seems to me the general bias on TOD is for a deflationary phase. But there is another possibility: inflation. This is generally discounted because all the money being poured out by the government is going into the upper brackets of the economy. But IF there should be a populist backlash (a small but not negligible possibility) then an end run around the destruction of labor's political power may be achieved by more direct payment to the working class. (Sorry for that term. I know that TOD and TAE are devoted to middle class interests and are unaware that anything below that exists. Hey, the very term "middle" is the giveaway.) In this case, expect demands that Social Security not only remain intact but be broadened. Much has been made of younger workers unwillingness to pay for the elderly but as it begins to sink in that those elderly are their destitute parents which they will find themselves supporting directly, they will call on the government to pay up. If so money will no longer be poured in to the so-called black holes of the financial system (really, it's going into some very favorably placed pockets), but into the general economy.
Welcome to TOD!!
A couple of observations:
The Fed is pumping money into the economy in an attempt to counter the current deflationary downdraft resulting from the destruction of credit. Many posters here are concerned with the potential for high future rates of inflation, or a period of extended stagflation as occured in the 1970s. Some of us lived through that and it was not a comfortable time.
Not sure about the devotion to middle class interests. There are a wide range of views here and the same range in income brackets including at least one panhandler living out of his car.
If the Fed seeks to spark consumer demand then the last thing they will want to do is curtail SS. Both the poor and the elderly tend toward low incomes and as a result they spend what funds they get. High income earners have the choice to save or spend.
The long term bias on TOD is toward inflation due to the future constraints on oil supply. This will have an impact on the price of all goods and services and the prices will rise to reflect scarcity or demand will be destroyed as folks transition away from FF. We are all trying to figure that phase out.
Pitch your tent and stay awhile. Just don't mention Darwin, birds, and windmills in the same post otherwise all hell breaks loose around here.
Cheers!
"Now that date could be as early as 2010, apparently."
The same with Pensions:
Pensions May Be ‘Garbage’...
http://www.bloomberg.com/apps/news?pid=20601070&sid=aazS4bEfFmzs&refer=home
The sooner the better.
SS and bankrupt pension funds give the population a false sense of security.
They are not sustainable and the sooner they fail, the sooner people are forced to take responsibility for themselves ( and their family and their neighbors).
The same is true for the Federal Government - the sooner that Distraction fails, the better.
I wonder how those of us who are older than 65 can be expected to "take responsible for themselves", as you call it, since they aren't likely to find work again. SS has been around long enough that they've already spent a life time "investing" some of their earnings to take care of folks older than themselves. Pension funds are also the result of funds collected during one's working years. For retirees, it's not a distraction, it's a basic part of their lives.
Perhaps you think the old should simply crawl off into a corner and starve. If you think that's a good idea, then I think you should volunteer to go first into the Euthanasia Parlor...
E. Swanson
Create work. Nobody should make it to retirement without at least a couple of skills.
I know it sounds easier than it is, but it isn't the government or business that creates jobs, it's us.
Blackdog, you are part of a community (I assume you are not a hermit living in the wilderness - at least not yet ;).
You will not be on your own and you will probably be more valuable to your neighbors than many of their strong, healthy young people.
The pensions and SS are ponzi that are no longer sustainable now that 'growth' is over.
if ss is a ponzi, why is it necessary for the govt to borrow so much money from the ss "trust" fund ?
as of right now, the ss trust fund is in the $ 3 trillion range and increasing. this trend is expected to continue until about 2017, depending upon assumptions in the projection.
ss may not be sustainable, but as of right now, ss is in a lot more solvent than the treasury.
Ah yes, someone who read Ayn Rand when they were 16.
I liked Ayn Rand at 16 -- is there anything more cool than being hero for being a complete azzhole when you are 16?
I wish Atlas would shrug, so these useless elite parasites would finally go away, and we could all improve our lives.
I never finished Randy Ayn's garbage (my over-active gag reflex saved me) so your point here was lost on me.
+ 100
I read Ayn Rand at age 14. Was enthralled. Then I grew up.
+1,000,000
I never read her. At 17 read Karl Marx, and was enthralled. I was a commie for about a month, then I figured out it was a load of @#$%.
I read "Atlas Shrugged" in my 30's and enjoyed it greatly.
Funny thing is, I didn't get the same message out of that book that most of her fans, detractors, or even (I'm led to believe) the author herself got out of it.
For one thing, the biggest fans look to me an awful lot like the folks she cast in the worst light. The core message of rebellion by simply dropping out of the system is something I hear all the time from people who scoff at Ms. Rand and her work.
I can't say as it made any practical recommendations, but perhaps she had more of a sense of humor than most people credit her for.
[Edit]
Or perhaps, since when I was 16 I was busy reading everything that Asimov had written to date, I could read just what she wrote instead of reading what she meant. I have been informed that there is a lot of stuff in there that was "code" for one group or another. And The Mule would kick John Galt all the way to Vega, on a bad day.
I disagree --
A lot of people now realized that they CAN'T retire b/c their nest-eggs were looted during this financial collapse. The thing is this will put a lot more strain on the already burdened unemployment number.
Overall, I do agree that all this will create a larger gap in Social Security for the future generations -- what a difference a Trillion dollar here and there when our debt and obligation is at +50 Trillions and climbing. This year, our federal budget is running a 2 Trillion deficit alone and we are projected to be in deficit for at least 10 more years.
Can you really believe that we will not try to inflate our way out of this?
I think the deflationists generally believe that we will try, but fail.
Hello TODers,
If you desire to deflate the debating power of a PO denier, techno-cornucopian, or a Singularity devotee': IMO, you can't go wrong by offering counter-arguments related to the critical nexus of energy, the Non-Substitutable Elements NPKS, and food.
Just ask them: "Have you hugged your bag of NPK today?"
Depleting I-NPK flowrate-->Insufficient food-->Insufficient job specialization-->Insufficient new techno-magic-->No Singularity.
For example:
http://www.sciencedaily.com/releases/2008/08/080825103527.htm
--------------------
Fertilizer Technology Used Worldwide, But Few New Products Since 1970s
ScienceDaily (Aug. 26, 2008)
About 75% of fertilizers and fertilizer technology used around the world today were developed or improved during the 1950s to 1970s by scientists and engineers at the Tennessee Valley Authority (TVA) in the United States, says John Shields, a former TVA official.
..Dr. Norman Borlaug, 1970 Nobel Laureate, says, "I am concerned about the state of the fertilizer industry itself. With the price of energy increasing, we need to find cheaper, more effective ways to nourish food crops. The price tag for increasing productivity in Africa will be quite high. The fertilizer industry needs to do everything in its power to minimize that cost. Farmers are paying way too much for fertilizer products because we are transporting millions of tons of material that is not nutrient and because much of the nutrients in applied fertilizers are never used by the crop. Nutrient losses to the environment are high with consequences for global warming and water pollution...
--------------------------------
Recall what Borlaug recently said [paraphrased]: "Without a sufficient I-NPK flowrate, it's Game Over."
Another weblink, from Pakistan, to help further show how I-NPK flowrate plus no techno-advance have far-reaching cascading blowbacks:
http://www.dailytimes.com.pk/default.asp?page=2009%5C04%5C11%5Cstory_11-...
------------------------
Decline in wheat production to lower GDP growth
KARACHI: The GDP growth rate of Pakistan is expected to decline further as the wheat production target would be missed by 6.8 percent, initial estimates of wheat production show.
Any change in the agricultural productivity sends a ripple effect throughout the economy affecting the vital macroeconomic indicators.
..Since 2000, the per annum increase in wheat production is a paltry 0.44 percent. Besides the economic dimension, there is a more important Human dimension to this problem. Since our population growth rate is approximately 2.3 percent, the consequences for the food security can be grave given this dismal growth rate. Pakistan ranks 61 out of 85 countries in the 2008 Global Hunger Index.
-------------------
Malthus isn't wrong.
As most TODers know: the vast majority of people have No Mental Grasp of just how much FFs and other energy is devoted to our food. Recall my earlier link that stated in some local areas that the food/energy intensity has increased 100 times compared to earlier pre-FF agriculture.
The humorous? visual example I used before to try to shockingly illustrate this phenomena of 'food/energy ignorance' is that most people non-think in such a manner that they just assume that:
++++
.. untold billions of Alaskan King crabs and Maine lobsters suicidally roam the land offering themselves up to be eaten, plus bearing gifts of chocolate and fresh bananas in their uplifted claws.
+++++
Thus IMO, JHKunstler's 3,000 mile Caesar Salad doesn't sufficiently convey to the reader this food/energy intensity. YMMV.
IMO, if the coming techno-cornucopian Singularity has any claim to validity: fertilizer techniques and new products should have strongly advanced over the past decades to where I-NPK mfg. & transport & field application should now be the very least of our concerns--yet just the opposite has occurred as ever more people, now 1 billion [UN FAO], join the list of the malnourished and/or starving.
We have already mostly depleted the naturally superphosphated bird & bat guano [the lowest hanging fruit], the Atacama Desert nitrates, and the beneficiated flowrate of raw ores of P & K will be increasingly difficult to sustain as we go postPeak in FFs. Recall that these industries started with a pickaxe, shovel, and wheelbarrow until cheap energy brought giant draglines, countless miles of conveyor belts, and 3500 feet deep elevator shafts.
Yet, we continue to needlessly waste huge amounts of NPK versus ramping full-on O-NPK recycling:
http://www.chitowndailynews.org/Chicago_news/Study_Chicagos_tainted_wate...
---------------------------
Study: Chicago's tainted water killing marine life in Gulf
The U.S. Geological Survey yesterday released the results of a study detailing the root causes of phosphorus and nitrogen pollution in the Gulf of Mexico, naming Chicago as the nation’s top offender.
..Chicago’s waste water, treated at the Metropolitan Water Reclamation District, flows out of the city, making its way to the Mississippi River and the Gulf of Mexico. According to the USGS study, Chicago ranks first in discharging water tainted with phosphorous and nitrogen, chemicals that can accumulate through every day items like laundry detergent and lawn fertilizer.
The study looked at 150 watersheds in the Mississippi River Basin. It was able to determine water sources for each watershed.
----------------------
I am disappointed the author, Alex Parker, didn't use his publishing power to promote O-NPK recycling, in every form from humanure to composting yard & kitchen residue.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
It's the ethanol. They grow a lot of corn in Chicago, you know.
Good people of the Oil Drum,
May I ask -what is the best information/estimate we have regarding EROEI phrased in the following way:
In the world's most efficient year, one barrel of oil invested into production returned approximately XX new barrels of oil. Today, one barrel of oil invested into production produces XX new barrels of oil.
Thanks in advance -I'm gearing up for heated holiday debate.
The two charts below have been updated for the IEA March 2009 OMR
http://omrpublic.iea.org/
and the Platts OPEC production estimate for March 2009
http://www.platts.com/Oil/Resources/News%20Features/opec/prod_table.xml
The IEA has reduced 2009 demand further downward to 83.4 mbd, or a drop of 2.8% from 2008. Consequently, it is likely that OPEC-11 compliance with the announced 4.2 mbd cuts will remain at about 80% well into the second half of this year. This implies that world crude, condensate and oil sands production will decline slowly until about the middle of 2010. Afterwards, the decline rate will increase. The average annual production decline rate from Dec 2009 to Dec 2012 is now estimated to be 2.7% as shown below.
click to enlarge
Assuming that world demand has finished falling, the OPEC cuts combined with non-OPEC natural decline should cause prices to increase. However, it could take until late 2010 for oil prices to exceed $100. If OPEC cuts further at their May 28 meeting, then oil prices could reach $100 by the end of this year.
As demand is foreast to be an average 0.3 mbd greater than demand from April to the end of this year, oil stock levels should start falling. US crude oil stocks have been increasing since July 2008 but US distillate stock have started to decrease in the last few weeks by about 5 million barrels.
http://tonto.eia.doe.gov/dnav/pet/hist/wcestus1w.htm
http://tonto.eia.doe.gov/oog/info/twip/twip_distillate.html#stocks
click to enlarge
This new downward 2009 demand revision of 1 mbd by the IEA might be too much as seasonal fourth quarter demand is usually greater than third quarter but the IEA shows 4Q2009 demand to be slightly less than 3Q2009 which is unusual.
http://omrpublic.iea.org/
For more info on declining oil production please refer to my previous stories.
World Oil Production Peaked in 2008, March 17, 2009
http://www.theoildrum.com/node/5177
Non OPEC-12 Oil Production Peaked in 2004, February 23, 2009
http://www.theoildrum.com/node/5125
I'd like to suggest adding the price curve to the first graph. It'd be much easier to intuit. Not critiquing what you have, just suggesting an addition.
Change of topic: Virtually everyone producing info/reports/graphs on oil production and uses one of several different sets of data, EIA, IEA, BP, etc. I've often thought the best approach would be to average these and use that as production.
Does this make any sense?
Cheers
For a lot of reasons you could assume that the 2008 data is very corrupt.
If you assume 2004-2005 was the real peak then your steep drop shifts in 2-3 years.
So basically simply shift over your Oct 10 number to today.
I think the general slope on the backside is a stair step down.
We just fell down the first step. I'm guessing that real production right now is in the 70-72 mbd range.
If I'm right I think we have another steep drop this year down to around 68-70 mbd.
So I think we will hit that this year. After that one more steep drop in the 4-2 mbd then I think the down steps will be smaller. This last one would take us down to 62-64 mbd.
The three big drops are coming from three simultaneous events and are in total about 12-15mbd.
The below list of causes overlap to some extent and add up to well over what I expect the actual to be.
And they all activate over the next 2-3 years because of their nature its difficult to group them in one year most have been active since about 2000 already to some extent but often heavily dampened by the sharp
price increases. Collectively if you read them you should see that the rapid price increase acted is a major negative feedback loop effectively hiding all of these behind a large increase in investment and capitol flows. Money papered over our true situation until it failed.
1.) Old giant and large fields. Over the next four years I expect us to lose 2-6 mbd from very old large fields. The steep decline of these is entirely from use of various horizontal wells.
2.) Shallow offshore smaller fields. Herds of these fields will simultaneously decline another 2-4 mbd.
Many will not enter secondary recovery.
3.) A effective end to in field drilling. New wells in old fields played a huge role in keeping production on plateau over the last several years however by 2008 these wells where ineffective in the sense that I believe they increased the depletion rate in many fields above 20% of remaining URR. Production from these fields should decline rapidly. Also of course many of the new wells where horizontal ones. This alone is good for 4-8mbd drop over the next several years. This is probably the number one top skeleton in the closet and I can't stress how large it may be.
4.) Many fields hitting 90%+ water cut or gas problems or other problems. This is a variant or addition to 3 and has to do in a large part with using both horizontal wells and in field drilling for bypassed oil.
Once the bypassed oil or thin oil layer is gone you simply have a high water cut field with production limited by the water handling. Fields could see production rates drop 50% in the worst cases. This cause
is another 2-4mbd potential loss world wide.
5.) Infrastructure age and lack of investment in general this is a combo of what Simmons is concerned about coupled with the new financial climate. Also of course age of the overall work force is a big part of the issue. Above ground investment and infrastructure problems should easily cause another 1-2 mbd declines.
However this is also another time bomb because you have some powerful feed back loops from the other decline sources and this. If a field is in rapid decline and we have financial/infrastructure problems that are very large to fix then probably even less will be done. Alaska is probably the poster child for this I expect the infrastructure abandonment and pull back from investment to probably be the primary controller of investment in Alaska. Of course we have issues all over the world in all our mature basins.
And of course the recent price drop will give the above play a huge role in investment pull back. The Canadian tar sand production will also probably begin to decline for example. Overall depending on how this plays out it could also represent another 2-4mbd drop over the next 2-3 years. The recent drop in prices will also play a large role in investment going forward generally leading to people capturing as much cash as they can at the expense of future investments this is almost its own time bomb.
6.) Light sweet vs Heavy sour vs Natural Gas. I think that at some point declining natural gas production and the loss of light sweet or Peak Lite will play a explosive role in EROEI and secondary real product production from the remaining oil. I believe we went through this in 2007-2008 and natural gas prices spiked and oil prices spiked. Getting the extra gasoline and diesel out of the heavy sour crudes is really just a variant of GTL. In my opinion how this hits is highly variable but longer term it will prove to be the end of our civilization as btu or energy content becomes effectively unified. NG and oil on a BTU basis will approach the same price and then coal with ever narrowing discounts based on quality.
For oil this represents a 25-50% drop in real product return from the remaining heavy oil supplies. Within ten years I expect this one to become dominate but it should show within the next 2-3 years. Best guess is this represents another 2-4 mbd decline as measured from supplied product. Its complex since steam and electricity generation are also tightly coupled. Also of course a wide range of products especially ammonia based fertilizers will be hit by this. Spiraling costs here also work to divert investment from oil to natural gas destabilizing the situation further. And last but not least the seasonal variation in NG usage will interact badly with a heavier sour oil supply.
8.) War this is not readily quantifiable but anywhere from 2mbd - 30mbd depending on the nature of the war.
Overall your talking about a 14-28 mbd range for sources of decline. This of course should be offset to some extent by new fields coming online. We can easily assume going forward 2-4 mbd. Or for three years 6-12mbd offseting or a net decline of 2-22mbd over the next three years.
Heck of a range :)
On the demand side its really simple as long as you can burn oil and make money or even maybe make money you will. So as long as using oil is generally profitable we will use it regardless of cost until the costs overwhelm the utility of oil. Price does not matter except for its overall economic effects.
So outside of new projects coming online you have a large number of forces that in general will feedback on each other skyrocketing NG prices for example serve to make investment in heavy oil sources uneconomical.
The feedbacks serve to amplify the effects probably at worst to at least square them. 8*8 = 64
64*28 = 1792 mbd
72 - 1792 = -1720 mbd.
I'd suggest the absolutely worst case scenario is negative by a order of magnitude and thus the chances of a complete collapse of our oil based civilization in the next 10-20 years which would increase this negative response itself by a few orders of magnitude is well over 100%.
I put the probability of our civilization collapsing at about 202724.69%
Lyapunov exponents at work.
http://en.wikipedia.org/wiki/Lyapunov_exponent
Of course you can bet against me assuming I personally make it the next 10-20 years.
Given these odds individual survival is effectively impossible to predict.
Better odds getting hit by lightening.
It does of course suggest to super survivalists that once they get into one of the stable regions that are dense in phase space that they probably are wasting their time working to much on individual survivability far better to work on collective regional stability.
All is not lost.
http://books.google.com/books?id=wGCPkY868NgC&pg=PA60&lpg=PA60&dq=Stable...
It turns out that despite these terrible precentages that Chaos practices ELM however the critical factor is to ensure you have a regional island of stability since isolated stable regions have chaotic conditions effectively at your doorstep.
If you plan on hiding out in your mountain refuge your probably dead.
My theory if you will actually predicts that the only regions that will survive are those that are both reasonably rich in natural resources and where a strong ELM component predominates. This my assertion of the formation of enclaves is also 100%.
" 2.) ............ Many will not enter secondary recovery."
yes, no and maybe. many offshore fields are put on pressure maintenance from day one and "secondary" recovery is not necessary. and granted, many are just too small to consider secondary recovery -or- pressure maintenance.
" the depletion rate in many fields above 20% of remaining URR."
would you please define URR ? i assume you mean simply reserves ? i often see the term urr and take that as ultimate recoverable reserves. ultimate recoverable reserves is meaningfull one time and one time only - before any oil is produced. oil that is already produced cannot be called reserves.
i suggest that we use the term "ultimate recoverable oil" to mean already produced oil plus reserves.
"remaining reserves" is similarly redundant.
But unequivocal, like remaining URR.
By saying remaining URR the point is stressed that in many fields most of the oil has probably been pumped.
From reviewing various fields and recovery with modern technology a depletion rate of 10-20% is readily doable in short overall these smaller fields exploited with advanced technology from the beginning have a lifespan of 5-20 years. The reason to talk about remaining is that for many of the older fields in existance the technology used in extracting them has evolved significantly over the life of the field.
Fields that may have been produced with a low depletion rate say 3-5% 20-30 years ago have maintained stable production at the expense of ever increasing depletion rates approaching what seems to be close to our maximum depletion rate of 20%. Some fields can deplete faster but this seems to be the highest one that makes economic sense.
For example say a field has 100GB of oil its a true monster bigger than Ghawar. During the first 50 years of production 50GB are produced or the depletion rat is 1% or 1GB a year. During the next 10 ten years
say 20GB are produced or 2% depletion with 30GB remaing. Then say they up it to 3GB per year with 30GB remaining or 3% of URR but the problem is its 3GB/30GB = 10% or a depletion rate of remaning reserves of 10%.
You don't need to actually increase the rate just hold it constant if the field was produced the entire time at a rate of 3GB then obviously when its down to 30GB remaining it has ten years of life left. One can assume of course that at some point near the end of the life of the field that the production rate will fall and of course the depletion rate will fall but say that high depletion rates can only be maintained for 50% of the second half of oil production or that only 75% of the oil in a field can be pumped at a high rate.
The key point is that continuous technical advances over time have converted a lot of our large old fields into the same rapid depletion rapid decline profiles as our smaller fields.
Lets say for example your field started with 60GB of oil as a reasonable URR and your pulling it down at 1GB a year technical progress keeps the production rate constant for almost 60 years but obviously eventually your depletion rate of remaining reserves is exploding as your able to maintain constant production rates against a rapidly dwindling reserve base.
Underlying my assertion that we will probably see a sharp fall off in oil production is simply this the bulk of the worlds oil is produced from infield drilling in fields that have been known for decades these workover wells have gotten very sophisticated over the decades as technology has advances and resulted in most of the worlds fields have a square wave production profile. As long as new discoveries and technical advances increasing the depletion rate worked this was practically of no consequence however once you have fully developed the mature fields and further application of technology is of no use its important.
Basically we effectively have no where left to drill in our mature basins and we cannot practically extract them any faster and worse I'm suggesting our current extraction rate leads to a depletion rate of the remaining URR of close to 20%. Of course this is not sustainable and we are not going to run out of oil in five years but it does mean if I'm right that the production rate will drop dramatically over the first 5-10 years post peak before production stabilizes with a slower decline rate at about 50% of our current production level.
The single most important thing for global oil production is workover wells in existing fields and the technologies used. Nothing else is even remotely close new discoveries are noise vs this. Assumptions about the decline rate of existing fields made by most researches have no fundamental basis and generally assume BAU. I'm saying BAU has a bad ending.
"If a field is in rapid decline and we have financial/infrastructure problems that are very large to fix then probably even less will be done."
Oil always preceeds "financial/infrastructure problems".
And demand collapse will preceed supply collapse.
Sunday, April 12, 2009
Quantology Revisited: The Negative Convexity Implications Of Delta-Hedging
Posted by Tyler Durden at 10:39 AM
I thank readers who provided tremendous insights on the market illiquidity post. However, one point that nobody mentioned, which may very well be at the heart of the problem, has to do with the issue of negative convexity from a delta-hedging perspective. Zero Hedge had previously discussed the implications of this very peculiar phenomenon two months ago in the context of CDO trend chasing in the CDS market and how negative convexity (especially in illiquid markets) leads to explosive and self-fulfilling rallies on either side.
tyler is talking the .1% Tail wagging the 97% Dog.
The Ultimate Fat Tail 6 Sigma Deviation Event initiating
the Non Linear "Shark Fin" collapse.
"
I thank an anonymous reader for presenting the missing piece of the puzzle, and taking the convexity argument one step further from merely structured finance to the entire market. I welcome responses and apologize for the thematic wonkiness, however there is only so much simplification that can be presented. But a simplified attempt: we have crossed into territory where the negative convexity consequences of delta hedging will keep on pushing the market in a straight line in whatever direction it is moving until we see a violent reversal and the delta hedge breaks due to lack of vol to "feed it", which will be, in the parlance of our times, the market's epic fail."
http://zerohedge.blogspot.com/2009/04/quantology-revisited-negative-conv...
Anytime now. But before oil supply collapse.
The Black Scholes End Game is upon us:
If the formula is applied to extended time periods, however, it can produce absurd results. In fairness, Black and Scholes almost certainly understood this point well. But their devoted followers may be ignoring whatever caveats the two men attached when they first unveiled the formula.
Though historical volatility is a useful – but far from foolproof – concept in valuing short-term options, its utility diminishes rapidly as the duration of the option lengthens.
http://www.aleablog.com/warren-buffett-on-the-black-scholes-formula
"
To summarize: the deficit for the first half of fiscal 2009 is $956.80 billion, more than three times the $312.75 billion deficit for the first 6 months of fiscal 2008. The total shortfall for fiscal 2008 was $454.80 billion, while the CBO projection for fiscal 2009 is $1.85 trillion, or four times as much. Tax receipts, meanwhile, are down anywhere between 50% and 90%, depending on where you care to look.
So tell me again, why does Bloomberg single out Japan for a headline that includes the words "Massive' Future Cost"? If by "the future", we mean that stretch of time that starts tomorrow, the US is in for more agony and horror than anyone seems to -be willing to- realize. And that's just on the economic front. And no, it's not just the US that's faring poorly, but for the vast majority of Americans, that won't be much, if any, comfort."
http://theautomaticearth.blogspot.com/
I've been saying 450 S&P by MAYDAY, but it could just as easily be
Frozen S&P by MayDay.
"Delta hedging of GS, DB, BNP and other dealers listed/OTC equity derivatives books could be what others construe as a 'sinister plot' to goose up US markets. OTC derivatives are many times bigger than listed and often hedged on listed markets. Clearly many books got caught short upside gamma and that will force them to buy indices and individual names as market goes up. The higher the market goes, the more they need to buy. Markets are getting too small for all the large players to operate efficiently. All of them need to get smaller or some will die."
http://zerohedge.blogspot.com/2009/04/quantology-revisited-negative-conv...
For my own reference in the future for when questioned
on the PPT and how it operates, operated.
And on how oil preceeds financial/infrastructure:
"
I’ll leave you with some good strong quotes from Ned Hill, an economist in Cleveland I must admit I never heard of before, who addresses the car industry trouble, but who might as well have been talking about the demise of America as an empire:
• "If you go back to 1980 to 1982, with the upheavals in the steel, rubber, glass and auto industries, that really was the end of an economic era that started in the 1890s. This is the last movement in the symphony." [...]
• "It takes almost 20 years to rebuild your economy, and usually you waste five to six years because of denial."
http://theautomaticearth.blogspot.com/2009/04/april-11-2009-last-movemen...
Exactly.