Drumbeat: April 27, 2009

China's oil demand fell by nearly 6% in Q1 of 2009

China's oil demand fell by nearly six per cent year-on-year in the first quarter of 2009, Energy Intelligence (EI), the US-based energy advisory firm has said.

In a new update, EI said that Chinese net crude imports and domestic production averaged 7.39 million barrels per day. That is 5.6 per cent lower than the corresponding figure in 2009.

EI did not take into account stockpiles that the Chinese government has allegedly been building to make use of the low oil prices. The statistics exacerbates the widespread fear among analysts that oil demand, and therefore oil prices may seriously suffer this year because of low "actual demand".

PetroChina Profit Slips 35%

PetroChina Co., the largest listed Chinese oil firm by capacity, said Monday its net profit in the first quarter fell 35% from a year earlier on lower oil prices and weaker energy demand.

Net profit for the three months ended March 31 was 18.96 billion yuan ($2.78 billion), down from 29.31 billion yuan in the year-earlier period. Revenue fell 30% to 181.58 billion yuan.

The International Energy Agency expects China's oil demand to contract by 0.8% this year, revising a forecast made earlier for growth of 0.6%.

Mexico oil operations normal despite flu - Pemex

MEXICO CITY (Reuters) - Mexico's state oil company Pemex said on Monday all of its operations were normal despite the outbreak of a swine flu epidemic in the country that has claimed at least 103 lives.

The Need To Redefine OPEC Regulatory Policy

The global economic crisis has struck the energy and oil markets hard. Oil prices have declined, and the intensity of the crisis in the oil market is such that even the recent decisions taken by OPEC to cut crude production rates, and in particular the organization's 19 December 2008 consensus to cut production significantly from the beginning of January 2009, have failed to contain the slide. Had it not been for interruptions in the supplies of Russian natural gas to Europe and the severe cold winter in that region, one could have expected even lower oil prices.

This economic crisis will not last for ever. However, the notion of guaranteed supplies of energy is a strategic and long-term issue, which has been pursued by the industrialized countries permanently ever since the 1970s. The experience of the past several years, before the emergence of the recent economic crisis, suggests that future energy crises will be serious and unavoidable. The upward trend of global prices of crude in recent years, before the current crisis, was a result of such factors as supply and demand imbalances and in particular a shortage of supply capacity .

OPEC's Badri suggests visiting Russia for oil talks: source

Moscow (Platts) - OPEC secretary-general Abdalla el-Badri may visit Moscow soon to discuss cooperation between the oil producers' group and Russia, currently the world's biggest oil producer, a source in the Russian government said Monday.

The talks would address possible mutual steps to support oil prices, the source said.

Cook Inlet Wells Still Shut Down, Some May Not Restart

Production remains suspended on offshore platforms in Cook Inlet due to continued volcanic activity at Mount Redoubt, on the Inlet's west side, and operating companies now think that it will be difficult to restore production in some of the shut-in wells.

"We anticipate we would have difficulty on a number of wells," when operations are resumed, Roxanne Sinz, spokeswoman for Chevron Corp., said in an April 21 e-mail. "Overall production will be less after the shut-in period as opposed to just before the loss of all oil production."

Aramco priming Nuayyim pumps

Saudi Arabia's 100,000 barrels per day Nuayyim oilfield should be ready to start production by the middle of June, according to reports.

The field is one of three Saudi schemes due for completion by the middle of this year to boost the country's oil production capacity to 12.5 million bpd. Nuayyim's oil will be Arab Extra Light crude, which is prized by refiners for the ease with which it can be transformed into transport fuels.

Energy sources key to solving auto crisis

It was evident during the opening of the Society of Automotive Engineers conference in Detroit last week that questions about where to get energy for vehicles still vexes carmakers both foreign and domestic.

Energy efficiency: Beat the bust by going green

Spend money on energy efficiency during a recession? It's a much brighter idea than you think.

Kunstler: The Joker

Even if the Mexican swine flu turns out to be something of a false alarm, it will require billions of dollars in unexpected new outlays for prevention operations here in the USA -- reinforcing the false idea that the nation has bottomless resources (the same idea that has been driving the bail-out fiesta). My guess is that the fear emanating from the story will be a potent generator of paranoia in the meantime, leading to widespread closures of things, canceling of events, restrictions on travel (official or otherwise), and a sell off in the financial markets. And that's if the flu turns out not to amount to anything.

Squeeze That Sponge

Often stymied in their quest for new crude, Western oil companies are squeezing more out of the reserves they already have.

Despite the engineering advances of the past century, nearly two-thirds of crude still gets left in the ground. So oil companies are raising the ante, investing billions of dollars in cutting-edge technology to increase the amount of crude they can tap.

The potential rewards are huge: Raising the average recovery rate world-wide to 50% from 35% would boost the world's recoverable oil by about 1.2 trillion barrels -- equal to the whole of today's proven reserves, the International Energy Agency says.

Crude futures plunge as flu scare rekindles economic worries

(Platts) - Global crude futures started the week on a significantly lower note Monday, dragged down by concerns about the impact of the swine flu outbreak on the world economic recovery and comments by Algerian oil minister Chakib Khelil that it may not be necessary for OPEC to further cut output, market sources said.

"The falls are driven by the outbreak of the [swine] flu, which is also driving equities lower," a crude trader said. He also pointed to signs that OPEC could refrain from further cutting its crude output target at its next meeting in late May.

Cost of gas barely budges in last two weeks

NEW YORK - The average price for a gallon of gasoline in the United States rose less than a penny in the past two weeks as the economic downturn help to keep a lid on retail prices, according to the Lundberg survey released on Sunday.

Governments Must Cooperate for "Power-Down" as Oil Runs Out

Oil production is expected to fall by around 3% per year, beyond the oil peak. To avert catastrophe, oil-producing nations must agree to reduce their production by 3% per year and oil-importing nations to reduce their imports by an exactly matching amount. Production will fall and must be planned to fall, while consumers take-up the slack in supply.

Some stockpiling to prepare should times turn perilous

Ammo. Canned goods. Vegetable seeds. Fortified water by the case.

They are reportedly flying off the shelves, these staples of the stockpile crowd.

“Survivalist” isn’t the right term, not in a downturn that has got everyone nervous. “Preparedness” or “self-sufficiency” — that is what they are saying.

What will we tell the next generation?

LAST month, the chief scientific adviser to the British Government, Professor John Beddington, predicted a global catastrophe by 2030 on the simple premise that while global demand for food, water and energy is escalating, the supply of these three essentials is diminishing.

He predicted civil unrest and international conflict.

If this scenario was to come true, I can imagine a voice in the future asking us — particularly those of us who had the privilege and responsibility of a public voice — the following questions.

Shell, BP Profits May Drop Most in Five Years on Oil

(Bloomberg) -- Royal Dutch Shell Plc and BP Plc, Europe’s largest oil companies, may post the biggest drop in quarterly earnings in at least five years after the recession dragged down crude prices.

Iran can make more of its energy riches: U.S. envoy

SOFIA (Reuters) - Iran could make more of its vast resources if relations with the west improve enough to allow more investment in its energy sector, the United States' new Special Envoy for Eurasian Energy, Richard Morningstar, said on Saturday.

The world's fourth-largest crude producer also sits on the world's second-largest gas reserves but U.S. sanctions imposed by the Bush administration have hindered gas export growth.

The Impending Mother of All Oil Shocks

The other day I had an interesting conversation with someone who decides how much a small but significant portion of the world's oil reserves gets pumped.

I asked a question, "So long as the revenue from the oil that you pump is enough to meet the immediate needs of your country, why pump more?"

My point was that as the prospect of running out of easy-to-extract oil starts to hit the collective consciousness, and as demand creeps up (as it will), oil will spike again, and again. So why not just wait?

China Agrees to Buy LNG From Exxon’s Papua New Guinea Venture

(Bloomberg) -- China, the world’s second-biggest energy user, has agreed to buy liquefied natural gas from Exxon Mobil Corp.’s $11 billion venture in Papua New Guinea, said two people with knowledge of the transaction.

A state oil company signed an agreement to buy 2 million metric tons of LNG a year, about 32 percent of the project’s proposed output, under a multiyear contract, said the two people, declining to be identified because the talks are confidential.

Mystery of Kazakhstan’s bigest private oil producer

In the purchase by Kazakh national company KazMunaiGas (KMG) and China National Petroleum Corporation CNPC of 100 percent stock of the largest private oil producing company Mangistaumunaigas (MMG,) the most desired asset - the Pavlodar Petrochemical Plant (PPP or the Pavlodar refinery) - has remained untouched. KazMunaiGaz and CNPC Exploration and Development Company Ltd. (CNPC E&D) have signed an agreement to purchase 100 percent of Mangistaumunaigas common stock from Central Asia Petroleum Ltd (CAP,) KMG press service reported. However, the report is silent on the value of the future acquisition of Kazakhstan’s largest private-owned oil producer (the recoverable oil reserves of its fields are over 180 million tones.)

OPEC to Reduce Production If Needed, El-Badri Says

(Bloomberg) -- OPEC, supplier of 40 percent of the world’s oil, will reduce oil production if necessary to support prices, Secretary General Abdalla el-Badri said.

“I am sure if at the May meeting there is a need to cut, they will take that decision,” el-Badri said today in an interview in Algiers. “In OPEC member countries, 35 projects have been delayed because of falling oil prices.”

3 Reports That Should Indicate Continued Firming of Oil Prices

Seasonal demand is picking up steam. To confirm this I look to statistics from the Federal Highway Administration. February saw an increase in US motorists average daily driving, which is the first increase in 15 months, or approx the length of the current recession. Daliy mileage during February rose 2.7% from a year earlier, not to mention that this year had one day less due to the leap year calendar.

Too early to tell? Yes, it is too early to tell if the trend will continue. What is important is that the direction of the tide has shifted and a temporary floor for gas prices has been put in. We will need to see March numbers to confirm that the trend is continuing. In the meantime, quantitative easing should put pressure on the greenback. Along with contango demand, this should provide price support.

Is There Enough Natural Gas?

The US alone has enough natural gas reserves to power home heating, industrial demand, 50% of its cars and trucks, and to replace 50% of the coal-fired plants with natural gas generation! This is, indeed, wonderful news. So, I stand by my recommendation that Energy Secretary Chu step down, or, be fired.

“Is Our Transportation System Sustainable?”

Even though America only accounts for 5% of the world’s population, it uses about 20,680,000 barrels of oil per day. Despite US peak oil production during the 1970’s, consumption and net imports have always been on the rise, while the domestic production rate has been declining tremendously. The US imported about $246 billion worth of oil in 2007, which is $468,000 per minute. Most of the imported oil comes from OPEC, and 68% of all petroleum is consumed by transportation, 25% industries, 4% residential, 1% utilities, and 2% commercial.

Kuwait to pursue production target of 4mbpd for 2020: Sheikh Ahmad

(KUNA): Kuwait will proceed with planned oil investment and expansion projects with an eye to achieve its production target for 2020 at 4 million barrels per day (bpd), Kuwaiti Oil Minister Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah reaffirmed on Sunday. Addressing Asia’s major oil producers and consumers at a one-day meeting here, Sheikh Ahmad said that Kuwait sticks to a plan to build a refinery in China with a capacity of 300,000 barrels per day (bpd) by teaming up with Asia’s top oil refiner Sinopec Corp, as well as a 200,000-bpd refinery in Vietnam through joint venture with Japanese firms and Petrovietnam. “Kuwait recognized the growing long-term demand in the developing countries, especially in Asia, and consequently the necessity of expanding the upstream and downstream capacity,” he said at the Third Asian Ministerial Energy Roundtable Meeting, co-hosted by Japan and Qatar.

ExxonMobil tenders for five LNG carriers

ExxonMobil has sent out tender documents to shipowners and yards for up to five LNG newbuildings to serve its Papua New Guinea (PNG)-based liquefaction project. Shipbuilding sources say they are reviewing a tender for vessels of between 150,000 cbm and 180,000 cbm. Four or five ships will be required, depending on the size selected.

Supertanker Rates to Jump on Losing Single-Hull Ships

(Bloomberg) -- The worst market for supertankers since the 1973 Arab oil embargo is setting the stage for prices to double by the fourth quarter as ship owners scrap aging vessels and delay orders for new ones.

Prices on the benchmark Saudi Arabia to Japan route will rise to at least $32,000 a day in the fourth quarter, from $16,007 now, Oslo-based Fearnley Consultants A/S estimates. That’s more than the $26,994 shown by freight derivatives, contracts used by investors to speculate on future rates.

Brazil’s Tupi Oil Field May Be Hurt by Rig Shortage

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, may be hurt by a rig shortage as it begins development of the Tupi field, the largest discovery in the Americas since 1976, according to Jefferies & Co. Inc.

The company expects to almost double the numbers of rigs operating in deepwater offshore Brazil to 68 by 2012, from 38 today, according to Jefferies analyst Jud Bailey.

It’s “questionable” whether six of these rigs can even be built because the contractors are “small marginal´´ players, Bailey said April 24 in an interview from Houston. Others rigs may be delivered as much as a year late, he said.

General Synfuels to Test Oil Shale Technology in Wyoming and Colorado

Company predicts breakthrough technology will drastically cut oil shale recovery costs and minimize environmental impacts.

Province should start investing more in green, not nuclear energy

Ontario is facing not one, but three major crises, all interrelated. The economy has slowed to a crawl. Global warming is threatening to undermine world stability and we appear to be reaching, or are past, peak oil production.

Yemeni forces free oil tanker, arrest 11 pirates

SAN'A, Yemen - A Yemeni security official said on Monday that coast guard forces had freed a hijacked Yemeni oil tanker and arrested 11 pirates.

You've bought your last car

Actually, you've probably bought the last of a lot of things, but I remember being struck when I first heard James Howard Kunstler say, "Most Americans have bought their last car." So I'm going to use the example of cars to demonstrate why that is and why we won't get off of fossil fuel in time.

Dr. Mark Jaccard - Sunday, 26 April 2009 (podcast)

Dr. Mark Jaccard, a professor at Simon Fraser University's School of Resource and Environmental Management and a former member of the Intergovernmental Panel on Climate Change, discusses the essay he contributed to the Thomas Homer-Dixon edited book Carbon Shift: How the Twin Crises of Oil Depletion and Climate Change Will Define the Future (Random House, 2009), as well as the current provincial election campaign especially the NDP's plan to axe the carbon tax, with Joseph Planta.

Honda May Develop Plug-In Autos as Obama Alters U.S. Policy

(Bloomberg) -- Honda Motor Co., the only company selling hydrogen-powered cars to U.S. drivers, may also develop plug-in models as U.S. policy shifts to favor battery-powered autos.

Honda, which began leasing hydrogen fuel cell FCX Clarity sedans in Los Angeles last year, still sees hydrogen as the best long-term alternative to gasoline as a fuel that can cut carbon exhaust tied to global warming, President Takeo Fukui said in an interview. Still, the company will respond to a push by the Obama administration for carmakers to sell plug-ins, he said.

Qantas May Cut Business Class Seats as Demand Plunges

(Bloomberg) -- Qantas Airways Ltd., the Australian carrier that says it invented business class 30 years ago, may remove some premium seats as companies force executives to fly coach or stay at home.

Chrysler wins union concessions

UAW says it reaches agreement on modifications in collective bargaining accord needed to keep automaker out of bankruptcy.

GM to cut 21,000 U.S. jobs, confirms it is scrapping Pontiac brand by end of 2010

DETROIT - General Motors said Monday it will cut 21,000 U.S. factory jobs by next year and phase out its storied Pontiac brand as part of a major restructuring effort needed to get more government aid.

The struggling automaker also says it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of debt-for-equity swap.

Searching for Deeper Pockets

Amid tight credit and tough market conditions, clean-technology companies without large backers are looking to better-capitalized suitors. This trend became apparent in the solar-power industry over the past few weeks.

Tailwinds for the wind industry

The president spent Earth Day at an Iowa factory that makes wind turbine towers and announced new regulations for offshore wind farms. Meanwhile, Interior Secretary Ken Salazar has been talking up the potential of offshore wind to generate as much as 20% of the eastern seaboard’s electricity that is now provided by coal-fired power plants.

But such scenarios won’t come to pass unless the administration seriously tackles the transmission grid problems that are keeping wind from becoming a nationwide source of green energy, according to panel of wind industry executives who spoke at Fortune Magazine’s Brainstorm Green panel this week.

Surf's Up

Scotland is placing big bets on tidal and wave power. The outcome is still very much in doubt.

Rallying to run Boulder's coal plant without the coal

BOULDER, Colo. — Boulder is progressive, many say. Boulder is green. Boulder is striving to meet the Kyoto Protocol.

And Boulder has a coal plant within its city limits.

True, the Valmont power plant is owned by Xcel Energy, and true, the electricity feeds into the grid and doesn't necessarily power homes in Boulder. But still, the three tall smokestacks on the eastern side of town have, for a growing number of residents, become a symbol of the old energy economy where fossil fuels are king.

Smart Meter, Dumb Idea?

New devices promise to cut energy use by giving consumers more information. Critics say they aren't worth the cost.

Going the Distance

China wants to use melting snow on the Tibetan Plateau to power neon lights more than a thousand miles away in Shanghai. And to make that vision a reality, it is dusting off a 40-year-old technology for moving electricity -- ultra-high-voltage power lines.

Moore’s Law and the Law of More

It is not an exaggeration to say that the team that President Obama appointed to promote his green agenda is nothing short of outstanding — a great combination of scientists and policy makers committed to building an energy economy that is efficient, clean and secure. Now there is only one vacancy left for him to fill. And it’s one that only he can fill: Green President. Is he ready to do that job with the passion and fight that will be required to transform America’s energy future? Hope so. Not sure yet.

Poll: Jobs over ecology

For the first time in more than a decade, Americans surveyed by the Gallup Organization said they care more about stimulating the economy even if that means the environment suffers to some extent.

In a March 2009 telephone poll of 1,000 Americans, 51 percent said they believed America should put more of a priority on jobs and industry. For more than a decade, Gallup has been asking that question and the environment had always held the lead, until now.

The Green House of the Future

What will the energy-efficient house of the future look like?

It could have gardens on its walls or a pond stocked with fish for dinner. It might mimic a tree, turning sunlight into energy and carbon dioxide into oxygen. Or perhaps it will be more like a lizard, changing its color to suit the weather and healing itself when it gets damaged.

A Full Agenda

LamarMcKay, BP's new head of U.S. operations, talks about the Obama administration's policies, the future of biofuels and more.

Food bowl on brink of $5bn catastrophe

THE nation's key food bowl, the Murray Darling Basin, is on the verge of economic collapse as the value of production plunges by at least $5 billion, experts say.

Drought and declining irrigation water have plunged inland Australia's heartland into crisis with the loss of at least one third of the basin's $15 billion annual income. Worse is predicted for the coming financial year if the drought continues.

Galapagos Penguins Need ‘Condos’ With Global Warming

(Bloomberg) -- The Galapagos Islands, renowned for rare animals that inspired Charles Darwin’s theory of evolution, may have to create special shelters to save species from global warming and rising sea levels.

Scientists who met there last week decided the indigenous penguin needs “condos” built in cooler, higher areas to nest more safely, Giuseppe Di Carlo, marine climate-change manager at Conservation International, said in an interview. Shadier bushes would protect plants and animals such as birds and tortoises that produce too many of the same sex in hotter weather.

Report: Climate change bodes ill for SE Asia

BANGKOK—Southeast Asia will be hit particularly hard by climate change, causing the region's agriculture-dependent economies to contract by as much as 6.7 percent annually by the end of the century, according to a study released Monday.

The Asian Development Bank study focused on Indonesia, the Philippines, Thailand and Vietnam. Those countries are especially vulnerable because they have large coastal populations facing rising sea levels and rely heavily on rice and other agriculture products which could suffer from water shortages as well as floods. Vietnam was found to be the most vulnerable.

Irish temperatures to rise 1.8C by 2050

A new report has predicted climate change will have significant impacts on Ireland within a matter of decades.

This will include far more intense rainfall and an increased number of droughts.

Research conducted at NUI Maynooth and published by the EPA projects winter rainfall will increase by 10%, while summer rainfall will drop by up to 17% by 2050.

Washington forum draws worst greenhouse polluters

WASHINGTON (Reuters) – Diplomats from the world's biggest greenhouse gas polluters including the United States, China and India are set to take part in a forum on Monday at the U.S. State Department aimed at getting a U.N. agreement to curb global warming.

The two-day meeting of so-called major economies is meant to jump-start climate talks in advance of a December deadline, when the international community meets in Copenhagen to find a follow-up agreement to the Kyoto Protocol, which limits climate-warming greenhouse emissions and expires in 2012.

Obama's Democrats drag feet as US opens international climate talks

Washington - The Obama administration will try its hand starting Monday at finding a consensus among 17 leading economies on climate change as the US State Department sponsors the "Major Economies Forum on Energy and Climate" in Washington. The week-long talks, which include India and China, are part of the process leading up to a major world meeting in Copenhagen at year's end that is to forge a follow-up to the Kyoto Protocol on global warming, which expires in 2012.

But US President Barack Obama's government goes into the meeting with a hand weakened by his own majority centre-left Democratic Party in Congress, where legislators are already debating whether to scale back a far-reaching proposal introduced last month that would boost incentives for renewable energy and for the first time force companies to pay for pollution that is blamed for global warming.

Shaping the post-carbon economy

The good news is that we can achieve what's needed, we can afford to do it, and we can do it all without curtailing growth. The latest version of the McKinsey global carbon abatement cost curve identifies opportunities to stabilise emissions by 2030 at 1990 levels, or 50% below the "business as usual" trend line.

Making these reductions would cost about €200-350 billion annually by 2030 – less than 1% of projected global GDP in 2030. The total up-front financing would be €530 billion by 2020 – less than the cost of the current US financial-sector bailout plan – and €810 billion by 2030, which is well within range of what financial markets can handle.

Selling The Green Economy

Few things are more appealing in politics than something for nothing. As Congress begins considering anti-global-warming legislation, environmentalists hold out precisely that tantalizing prospect: We can conquer global warming at virtually no cost.

Utilities amp up lobbying over climate debate

WASHINGTON — Fifty of the nation's largest electric utilities amped up spending on lobbyists by 30% late last year to influence the debate in Congress just underway on one of the biggest issues facing lawmakers: climate change.

From Duke Energy, with 4 million customers, to American Electric Power, which sells energy in 11 states, the companies spent a total $51 million in the last six months of 2008, $12 million more than the same period in 2007, a USA TODAY review of lobbying reports shows.

Re: Squeeze that Spunge, linked uptop (WSJ)

A lay person reading this article would come away with the impression that regions like Alaska and Norway must be doing pretty well because of enhanced recovery techniques. Two excerpts from the article, and some EIA numbers:

Prudhoe's recovery factor today is expected to be more than 60%, compared with less than 40% when production began in the late 1970s. At the start of the 1980s, the field was expected to last about 30 years. . . Prudhoe's total recoverable reserves are now estimated to be several billion barrels more than what was envisaged when production started.

Total Alaskan production has fallen from 2.02 mbpd in 1988 to 0.72 mbpd in 2007, a decline rate of -5.4%/year. The three year decline rate since 2004 was -7.8%/year (EIA).

One company noted for its successful use of 4D is Norway's StatoilHydro ASA. At its Norne field under the North Sea it has carried out repeated seismic surveys to discover changes in subsurface structures and to monitor flow rates of water, gas and oil in real time. Such techniques have helped lift the recovery factor at Norne to 52% from 40% and extend the field's life past 2015.

Norway’s crude production has dropped from 3.23 mbpd in 2001 to 2.18 mbpd in 2008, a decline rate of -5.6%/year. The three year decline rate since 2005 was -7.1%/year (EIA).

hmm, so the article is claiming that this is new tech and we'll all be better off

hang on , next comes the statement that the "west" should help out those Arab countries with the same tech.....

I suspect they doing that already from other articles I've read on this site....

either way , down we go......

( and you didn't mention ELM ? ;) )


Since you asked, note that we have an advertising supported media outlet reporting "happy face" talk from the oil industry--AKA "The Iron Triangle"

Net Oil Exports & "The Iron Triangle" (July, 2007)

To some extent, what we are seeing across the board, from large sectors of the energy industry to the auto/housing/finance industry, media and beyond, is the "Enron Effect," i.e., many people know that we have huge problems ahead, but their paychecks are dependent on the status quo.

The suburbanites are caught in the middle of this, although they have a strong inclination to believe the prevailing message from the "Iron Triangle." As in the movie "The Sixth Sense," for most of us the automobile based suburban lifestyle is dead, but we just don't know it yet, and we see only what we want to see.

Note that there is an inherent flaw in the Drill Baby Drill position. We have all of these case histories of discrete mature regions that peak and decline, even with the use of the best available technology. It's not if, but when that conventional production peaks.

Then we have unconventional, but regions like Canada are not exactly flooding the market with oil, and the 11 year decline in net oil exports from Venezuela more than exceeds total current net oil exports from Canada.

Typical MSM happy talk - as usual for MSM this Guy Chazan is confusing recoverable reserves and their flow rates, he also believes "Peak oil" theorists believe the world's oil and gas supplies are fast running out ... an out and out lie!

adequate flow rates (above ground) to enable BAU growth are dependent on adequate, profitable, investment ...

reserves (below ground) will only be recovered at all if the consumers can afford to pay the price required, and there's no precise mention of the extra costs involved (even if the technology can be invented) so, who can tell whether this would avoid peak oil?

forbin -- What really cracks me up when folks start talking about helping those “dumb Arabs with western technology" is that there is no such thing. The companies which have been forging all this progress are the Halliburton's, Schlumberger's, etc. These are international corporations. Some may have headquarters in the US but that's as far as the tie goes. Actually, over at least the last 15 to 20 years, much of our new technology was initially developed and tested for markets outside the US. For instance, we started drilling horizontal wells in the Gulf of Mexico in the early 90's. Many of the techs that worked with me were Scots who had developed their skills in the North Sea.

WT can tell a lot of stories about secondary oil recovery techniques used in west Texas. But the Saudi's have had some of the smartest EOR experts in the world working for them for more then 25 years. Bottom line: it's not USA technology. It's the service companies' technology. and they fly the flag of which ever country is paying them at the moment. And the OPEC countries have bigger checkbooks then anyone else...even now.

What this particular WSJ reporter (and many others) is missing, or willfully ignoring, is that the decline rates cited for Alaska and Norway, and the -4%/year long term decline rate for Texas, are net, after the new and improved technology has been tried--at least for the fields where secondary/tertiary recovery techniques can be profitably implemented. I would think that the enhanced recovery contribution from fields in these areas, where secondary/tertiary recovery techniques have so far not been used, will be pretty small, relative to total production.

I would think that the enhanced recovery contribution from fields in these areas, where secondary/tertiary recovery techniques have so far not been used, will be pretty small, relative to total production.

From a publication (ARI(Advanced Resources International)studies):

"There is an extensive network of more than 2.000 miles of CO2 pipelines from Colorado to the Permian Basin in Texas and New Mexico. The Permian Basin now produces approximately 1 mbd. About 16% of this oil production is attributable to more than 40 ongoing CO2 flooding projects, wich injects 1,1 bcf/d (63.000 tons per day) of CO2 to enhance oil recovery."

And for one field:
"while doubling the field's production rate to 20.000 bd."

As I noted up the thread, the decline rate that we have seen in Texas, Norway & Alaska is net, after secondary/tertiary recovery techniques have been implemented (CO2 injection is considered tertiary). Since Texas peaked in 1972, the decline rate has been about -4%/year.

It appears that New Mexico's decline rate has been about -2%/year since 1970.

And the one mbpd for the Permian Basin appears to be a very old number, unless it is BOE.

And the one mbpd for the Permian Basin appears to be a very old number, unless it is BOE

2005. It's from DOE. They expect an additional 2 to 3 mbd from CO2-EOR, assuming a technically recoverable reserve base of up to 89 Gb in 10 basins. "Unfortunately, little of this oil is recoverable due to the current CO2 supply shortage. In Texas, current oil leases are roughly 20% primary, 60% secondary (waterflood) and 20% tertiary (CO2)."

must be boe then

must be boe then

From the article: "Enhanced national energy security from an additional 2 to 3 million barrels per day of domestic oil production in 2020." And: "The general underground injection process is also applicable to coalbed methane recovery."

I was talking about Permian Basin production. Total Texas production was only around one mbpd in 2005.

Anyhow, my point was that they have high expectations from CO2-EOR flow rates in the future. About 50% or more of total U.S. production.

Achilles' Heel of Aging

I am amazed at the amount and diversity of research that goes on. This article is about research to extend human life. Not surprisinly, this guy consults for Sirtris, a GlaxoSmithKline company developing sirtuin-based drugs, and to the vaccine company Genocea.

Question for the readers: given the current and short term future of world economic events, do you think huge, expensive medical research and development like this will continue? If so, from where will the funds come?


Question for the readers: given the current and short term future of world economic events, do you think huge, expensive medical research and development like this will continue? If so, from where will the funds come?

Sinclair's research is surprisingly affordable. It requires a lot of skilled labor, but little energy. Remove over regulation and it gets even more affordable.

The users will happily pay for it. Assume a world population of only a billion people. Assume that 99.9% are peasants and only 1/1000 are elite. That is still a million elite people willing and able to pay for life extension. It will happen. Few realize it, but it has already happened. There are already some fiftysomethings looking like and living like thirtysomethings. You might have even met some, How would you know?

The shiny, happy people at CNBC tried to argue that the swine flu outbreak is a normal flu season outbreak, just unusually late, which those Mexicans didn't notice because they don't monitor flu like we do.

But this is why the experts are worried:

In Mexico, young adults appear most at risk

With normal flu, it's old people and children at highest risk. You rarely see healthy adults die of it.

But you can understand why CNBC is trying to downplay it:

EU health chief: Don't travel to Mexico or U.S.

That's not gonna be good for business...

The State Dept. will be issuing a travel warning telling Americans to avoid all nonessential travel to Mexico.

Did I just imagine it, or was the Flag button briefly up and then gone? (I hit it by mistake trying to reply, and then I hit "unflag.")

It moved to the right.

I guess that is why they moved it. . . for keyboard/visually challenged persons like me.

BTW, the CNBC auto guy said that he was certain that US automakers would return to sales levels of 16 million vehicles per year.

Maybe it keeps moving around to hide ;-)

Or maybe its just a start of capture the Flag game (Halo anyone?)

I strongly suspect that this virus is already more widespread, but less lethal than initial reports indicate. There will have been massive underreporting of the disease in Mexico, where people were dying for a month before swine flu was identified. That means only the most serious and lethal cases will have been reported, the vast majority of cases will have resulted in symptoms identical to normal flu and ignored.

That means it is almost certainly already a global pandemic, but will not have a large death toll. (I hope) that only a tiny minority of people will suffer lethal over-reaction from their immune system when they catch the virus. It requires a strong and healthy immune system to kill it's owner, so only the fit and healthy die of this disease, and then only if they are genetically susceptible and/or have other environmental triggers.

Too early to panic, but watch the news carefully.

Leanan, yes, I was thinking about the flu outbreak earlier today and it occurred to me that it was the wrong time of year. Or may be I should say it is normally too warm at this time of year for flu. Has Mexico had a particularly cold Spring?

The second thought was is this the real deal or a timely event on which to piggyback some preplanned action/measures onto? I imagine it would be pretty tough for angry citizens to organise demonstrations etc. during a perceived flu pandemic.

Whatever! I've no need to leave my farm as long as I've got enough provisions so I might as well stock up with things I'd buy anyway just in case.

I believe that the EU have also given a travel warning to limit travel to the US and Mexico to essential visits only.

Leanan, yes, I was thinking about the flu outbreak earlier today and it occurred to me that it was the wrong time of year. Or may be I should say it is normally too warm at this time of year for flu. Has Mexico had a particularly cold Spring?

Too Cold?

We are talking about Mexico City, The coldest night(min temp), normally in Jan. is 7C or 44F and Daytime high of 21c or 69F.

(edited by Ed)
Today was a freezing 53f low and 84f high.

Today it was a low of 53F and a high of 84F


So I don't know if the temp has that much to do with it?

Keep wishing
(end edit)


Temperature has a lot to do with it as flu is normally a cold weather disease. Presumably because the lower temperatures aids the flu virus survival and transmission. Hence my puzzlement about the time of year and location, which are not your usual conditions for flu outbreak. Mexico would seem to be far too warm for the birthplace of a flu pandemic.

There seems to be something rather odd about this particular outbreak. One idea that comes to mind is that Mexico is not the origin of this human transmissible form of the disease. Somewhere cooler in the Southern Hemisphere currently or somewhere in the Northern Hemisphere during the last winter perhaps?

It's not clear that temperature is that important. Flu is highly seasonal, but this is true even in the tropics, where there's no variation in temperature. Flu coincides with the rainy season in the tropics. It's possible that flu spreads during winter and the rainy season because people stay indoors more, and are thus more exposed to each other. The fact that children are in school may also be a factor. Kids are a lot more infectious than adults.

As I understand it (as a layman), it's the temperature at the time of transmission from animal to human that is important. Cool weather is needed to reduce the temperature between human and animal to a range acceptable for viral transmission. Presumably, once the virus has fully adapted to the human to human transmissible form, it isn't as affected as much by temperature variations.

In the tropics I see that influenza is more prevalent during the cooler rainy season. All it takes as far as I'm aware is for the temperature in the human nose to be reduced sufficiently enough for the virus to survive transmission. After that other factors take hold regarding the success or failure of the virus in its human host.

The link between temperature and transmission is not understood. Why the flu is seasonal is still unknown.

Actually it is known. The link is not between temperature and transmission. It is between humidity and transmission. When a person sneezes or coughs they send out millions of tiny droplets that contain billions of flu virii. When humidity is high, these droplets accumulate moisture, become heavy and fall to the ground very quickly. When humidity is low, these droplets tend to float in the air for a long time which increases the possibility that someone else will inhale them. The flu season occurs during winter because that is when the air is dry. Also, during winter people have low levels of vitamin D in their blood which makes their immune system weaker.

The humidity argument doesn't work for the rainy season in the tropics, though the Vitamin D argument might.

I think that the seasonal pattern is largely due to reduced sunlight exposure, and thus reduced Vitamin D levels. Many infectious diseases like the flu, many cancers and diagnoses as MS correlate with low Vitamin D levels.

That doesn't explain the seasonal pattern in the tropics.

Yes it does. Flu season in the tropics coincides with the rainy season when there are extended periods of moderate to heavy cloud cover. With the majority of the inhabitants of the tropics having darker skin than most "northerners" they need more exposure to stronger sunlight to maintain adequate levels of vitamin D. I suspect that the pharmaceutical companies do not want this to become common knowledge. Vitamin D is not patentable and is cheap and fairly easy to make.

Alan from the islands

The shiny, happy people at CNBC tried to argue that the swine flu outbreak is a normal flu season outbreak, just unusually late, which those Mexicans didn't notice because they don't monitor flu like we do.

I agree it is dangerous happy-talk. It is possible they are right. But, the frustrating thing is that at this point in time, we can only say "we don't yet know". I think it will be a few more anxious days before we know if we are facing (A) a nasty pandemic, (B) a bit worse than usual seasonal flu, or (C), all just a false alarm. It is not too early to start practicing better hygiene and not too costly forms of "social distancing", but it is too early to panic either.

Hello TODers,

Regardless if this flu becomes a global pandemic or not: this article suggests that poor Mexico will just get economically hammered; the vultures are circling to pick over the corpse:

Swine Flu: Implications for the Market

..What does seem clear is Mexico’s (EWW-iShares MSCI Mexico Index Fund) instability and vulnerability to this crisis. As a country already “on the brink”, we see this situation as disastrous for Mexico. While the economic fallout will obviously depend on the virility of the Swine Flu, we see this as the potential “knock-out” punch to Mexico’s growing list of problems...

..In 2009, Mexico is suffering contagion from the global economic slowdown (the Mexican government previously estimated -2.8% GDP growth in 2009), a sharp decline in remittance payments, and a violent and destructive drug war. Early estimates have this outbreak costing Mexican companies $85 million a day in lost revenue, a figure likely to increase. The Mexican Central Bank will have its hands full defending the Peso (FXM- Currency Shares Mexican Peso Trust). There are early reports that Mexico will tap its $47 billion credit line from the IMF...
If this Mexican young adult death # continues to rise as fast as Cantarell depletes-->Hold onto your sombreros! Let's just hope that today's 5.6 earthquake was not a minor precursor rumble to something much worse...

from the story, is there enough ng ?

"This website is a bit confusing. “Dry Natural Gas”, “Wet after Lease Separation”, “Associated” and “Nonassociated&r... I’m just going to add all the 2007 columns together and come up with a “total” US natural gas reserve estimate of 742,447 billion cubic feet, or, 742.4 TCF."

dry natural gas (methane) is the kind we use. dry ng is derived from the "wet after lease separation". associated and non associated together add up to wet after lease separation. the wet volume shrinks by the amount of ngl extracted. so the author is more than tripple counting.

this post needs to be tripple flagged.

Natural gas is inherently a difficult subject. No one can write a moderately advanced article and go back and explain all of the details. I wouldn't be too hard on the author.

Associated gas is natural gas that is dissolved in oil, when it is extracted. It it the natural gas that comes out when oil is extracted.

Non-associated natural gas is other natural gas. There are various kinds of non-associated: "conventional", tight gas, shale gas, coal bed methane. Unconventional is the sum of everything but conventional.

The other terms have to do with which stage of extraction and distribution you are dealing with. I find it helpful to look at volumes on different bases, for example here.

The EIA has a glossary which defines a lot of terms. It can be helpful as well.

yes, i understand what dry ng, wet ng, associated ng, non associated ng and ngl's are, having been a petroleum engineer for 34 or so yrs.

adding dry ng to wet ng(from which dry ng and ngls are derived) ,together with associated and non associated wet ng (which adds up to wet ng, total) amounts to (more than) triple counting. 77777 (5 flags)

This is something that Super G may want to take a look at - the ability to flag news postings to indicate a downthread post on their accuracy.

There is a lot of brain power on TOD and this would help harness it (improve the bpRObpI as it were).

Elwood has picked up on a factual discrepancy that I missed on a quick scan. Allowing accounts to flag errant or questionable news items would help to quickly separate the news wheat from the news chaff especially for those that lack Elwood's 37 years in industry.

Sorry, I didn't understand what the issue was. I admit I haven't really read it. (Yet is no longer an issue--clearly not worth reading.)

Re: Squeeze that sponge

Once again the report has "Peak Oil theorists" saying that oil will run out soon. To be more accurate, our claim is that oil production / supply will peak soon, or has done so already. What the article points out without saying so is that we continue to look for expensive, energy-intensive, complex ways to get more oil out of the ground. The easy stuff is gone, as Matt Simmons says.

The article does at least suggest that the economics continue to make it harder to invest in these new techniques, without specifically linking the economic downturn with the Oil Shock of 2008.

i love this guy

Is there enough natural gas?
(Fire Chu)

following up from my post yesterday, we need to have a debate about this. I posit that this nat gas option is a credible, realistic alternative as a liquid fuel for transportation.

read the article, then please prove me wrong

Finite is finite.

The absolute best we can hope for by deploying LNG or any other alternate fossil fuel source as a transportation fuel is a delay in the inevitable shift to non-depletable sources at a sustainable rate.

As a resident of a northern US state where the majority of the homes are heated with natural gas using natural gas as a transportation fuel sounds like shivering in the dark to me.

[Edit for perfectly illustrative quote from article]

Now, 32 years (or 79 years) is not forever,

Up from the 19 years that the official numbers give.

I ask: what are my kids going to heat their homes with? If the official numbers are accurate, what am I going to heat my home with in 20 years?

The numbers don't work.

And, as a comment on the linked article notes, reserves and flow rates are different beasts.

I'm talking independently of flow rates.

Advocates of using natural gas as a transportation fuel admit up front that it won't last very long.

That being the case, why bother with it at all? It seems a lot of expense for something that will run out in the lifetimes of a good chunk of the people alive today, and displace critical uses (household heating, fertiliser production) that natural gas is already used for.

It's like burning the house down to keep warm. Yes, it will work for a bit, but it is so obviously ill-advised that it is stunning that anyone is so shortsighted as to suggest it.

Even the US Green Party supports this. As does T. Boone Pickens. The idea being that natural gas is just a bridge to wind, solar, etc.

So we're burning down the house to survive the winter, in hopes we'll be able to build a new house before it gets cold again.

Fire Chu anyway but skip the natgas transport 'alternative'.

- The distribution system can't handle a cold winter with the current demand, much less large numbers of autos and trucks. How long will it take to build more pipeline capacity.

- Even with new gas fields with large production, depletion of individual fields is rapid and gas rig count decreases weekly. How will production gain enough reserve capacity to serve a large increase in customers? I don't think capacity can be increased overnight.

- How long would it take to convert half the existing auto/truck fleet? Longer than it took to build it is the correct answer as there is no industrial infrastructure to perform the conversions on a large scale. Also, converting the thousands of individual vehicles w/ different engine designs, outputs, tank configs, drive train characteristics, etc. would be uneconomical. There would be one or two types of gas conversions for the most common vehicles, such as for Toyota Camrys and Ford F150 prickups.

- The auto industry is dying. What will build new Natgas vehicles? The new auto industry will be smaller and likely produce craft- built products, such as Bentley's. The shrinking demand for cars is an obstacle to a new drive infrastructure, unless it has profound advantages such as zero pollution or the energy source is. In other words, changing from depleting oil to depleting gas is uneconomical.

Costs-per-car make individual conversions too expensive for owners and any 'savings' would provide too little incentive for the natgas industry to build out a fuel system. Costs per industry are too expensive for the teetering-on-the-edge of bankruptcy car makers.

"Fire Chu anyway" Really? Why?

The way I see it his job is to set the best course to get from a fossil fuels economy to a renewable economy. That's not something that can be done in 100 days.

On the other hand, promoting a CNG happy motoring future without addressing the FF to renewable transition, especially when oil has just peaked, is a termination offense.

poly -- I think you're right about a more thorough discussion. I can't really pass judgment on his ideas from just a quick read. But I'll fall back on my same old tired line about "reserve numbers" folks throw around. They are meaningless, IMO, unless they also include a pricing model. I work with companies involved in the unconventional NG plays. Just consider this NG source alone for a moment. In the last few years we have proved many trillions of cf of recoverable NG in the gas shales which no one suspected even 10 years ago. These reserves can be readily developed with existing technology. But at one price? That's the key. At $3.50/mcf don't expect to see much NG coming on to the market. But at $10 -$14/mcf you might see that magic number of fueling half of our domestic motor fuel use for the next 80 years or so. But the potential may never be realized due to the volatility of the market.

The consumers/auto builders need to be confident that NG will be there should they expand heavily in that direction. The NG industry needs to be confident that the market will be able to meet the price threshold for the industry to develop such a huge reserve base. A year ago NG hit $13/mcf. Now it’s $3.50/mcf. To go forward with a major expansion of NG as a motor fuel someone needs to provide a confident projection of NG prices for the next 10 to 15 years. I can’t do that. You can’t do that. No one can. The only possible way to diminish the pricing risk is for gov’t intervention. Only problem there is that I don’t know what sort of effort the gov’t could muster given all the diverse forces which would hammer such an effort. As little confidence as I have in the gov’t to properly manage such matters, we have seen first hand during the last year the absolute inability of the free market to deal with short term pricing cycles when developing long term solutions. Look at the fate of alternatives today which were being headlined last summer. Current energy prices have crippled those efforts. They are still good ideas but few will invest in them during a low pricing period. The numbers jsut won't attract the big $'s. Clever folks here at TOD have come up with many long term solutions to our energy problems. Unfortunately, I’ve seen no one offer any scenario which might allow such solutions to be implemented. That’s not a criticism directed at folks here but at the political/economic system we must work under. A good idea which cannot be implemented is of no value. Just a guess on my part but I would bet the US could benefit greatly by switching large scale to NG for motor fuel. But I just don't see it happening anytime soon.

thanks for your post - you obviously know what you are talking about (unlike me :-) )

i agree pricing is a key issue. but I think when oil hits $200, this will become much more tenable as the $/btu gap widens

and re price volatility 2 things
- increased and forcastable demand from autos would tend to reduce volatility,
- Govt can step in with a "strategic gas reserve" approach similar to the SPR to smooth out demand

if price volatility and demand forcast are the biggest stumbling blocks, in your view, then i think we are in good shape.

these are business issues, not technology or geology

But there's the rub poly. You might be able to forecast a certain demand from autos but can you guarentee that demand so the companies will drill up the NG. OTHO, can youi guarentee to the auto makers that the NG will be there at a price that makes their vehicles viable in the market place. There's always a pricing risk in any investment. That doesn't necessarially mean the deal won't fly. But after the price swings we've seen the last 12 months just try to convince either side of the fence there's a reasonable viable forecast to be had. The basis for investing 100's of billions of $'s today have to be based upon forecasts 5 to 15 years into the future. Even if you had THE magic crystal ball who would beleive you.

ROCKMAN I think the US NG market will remain volatile until the LNG market matures a bit. And of course Europe and Russia are big unknowns. Not that you can't make LNG cars and at some point we probably will its just that I think you will need more stability and demand globally before they really take off.

My own opinion is NG will never really become viable but simply converge on a btu basis with oil. This may bring more NG online like your proposing but I tend to think that we will find that the fictional BOE will become a real item. Expanding NG demand via expansion of a NG powered fleet is probably going to be difficult your simply going from one expensive fuel source to another that requires extensive facilities.

Now with that said a move by commercial trucks to NG or some sort of mix NG/Diesel scheme is highly probable in my opinion. Indeed just about any situation where controlled fueling is possible will probably begin to switch over to NG as even though they converge the cost of switching is probably doable.

Expect electricity prices to go through the roof and this feedback is probably far more important than anything else if we try to expand expensive NG reserves.

I'm not exactly disagreeing just simply stating that expensive NG is probably of no use to our way of life we get hammered across a wide range of other industrial uses dependent on cheap NG.

Also of course the use of NG in refining heavy sour crudes is important. Expensive NG tends to make burning NG to run a coker pretty unattractive limiting the utility of upgrading the crap crudes.

I do foresee us using UNG for fertilizers plastics etc etc all the high grade uses. The real good news is we probably will continue to have plenty of nitrogen fertilizer expensive yes but not any absolute shortage.

We are as addicted to cheap NG as we are to cheap oil I guess I just don't see expensive NG as a cure.
The negative feedback from a strong floor in NG prices offset any gains from expansion of NG use in transportation.

What I think really drives the dilema is its a result of partial substitution. When we partially substituted for oil over the last several decades we set up a situation where further expansion of the partial substitution starts to set up a positive feedback loop with overall negative consequences.

Whats really underlying this is the weird way declining EROEI works. As you hit the EROEI wall you tend to get the situation that the only viable solution is to pullback investment in expansion of exploitation of the resource and effectively ride your existing investment down.

Its a bit strange but basically it seems to me the financial aspect of EROEI works like this.

The price will increase of course but companies engaged in energy will eventually have to take their excess profits and not reinvest them in expanding extraction at high cost instead they will have to spend the bulk of the profits paying out dividends and via share buyback programs recycling the wealth back into the general economy. Attempts to expand production simply drain the economy of money forcing it to collapse.
If it collapses fast enough prices will collapse hammering expensive expansion plans.

We literally just went through this cycle. The next time it starts up I suspect you will see a lot more cash flow back into investors and a lot less put int production expansion. I suspect that this time around what we will see because of the above is that investment will only result in NG production from UNG plays to become effectively flat maybe slowly declining. Steep declines are entirely possible esp in overall NG production. What I think is pretty much certain to not occur is any rapid expansion of UNG production.

Same for that matter for oil or basically any other resource I really think that EROEI translates into a requirement for ever more of the profits to be channeled back into the general economy via returns to investors with less and less spent on expansion of low and declining EROEI resources.

So right now I really don't see us ever rapidly expanding energy production again I think we are entering the boa constrictor phase of peak oil. The economy will now be slowly strangled over the next several years.
Energy prices will keep rising but nothing will be done because of EROEI nothing can be done. Any expansion of the energy industry simply destroys demand somewhere else in the economy.

A way to look at this is from now on out as we plant our fields of corn we will save less and less seed corn for the next year prices will rise and availability will drop. But the trick is the farmer if you will will loan his profits back to his customers to purchase what corn remains at these new high prices. Some of course will not get a loan and won't have cash from their own work so they will be left to starve.

If the farmers tempted to hoard a lot of seed corn for next years planting prices will increase rapidly and to many of his customers will starve to death as their is really simply not enough corn almost regardless of price.

Eventually of course you will see some sort of systematic failure but I think this is the game we will play for the next 2-3 years. For the consumer economy falling living costs driven by falling real estate prices and falling rents from the oversupply of houses and even commercial real estate will work to free a significant amount of cash flow for energy this coupled with reinvestment of profits back into the general economy by energy companies will work to stave of the day of reckoning for several years.

Eventually of course the consumers of energy will be unable to translate it into profitable work and you have a net economic decline that should snowball into a fast and final crash.

So I just don't see anything really happening until after inflated prices for all goods that are in excess are destroyed. The primary places this will occur of course is in housing and to a lesser extent automobiles. And even here we won't be done until it reaches the point that long term loans are no longer used for houses. This generally implies the price will drop low enough that a short term loan of some sort becomes viable. Same for that matter for the whole economy the duration of debt terms will continue to drop with less and less long term credit extended. This is probably another way that the oil and gas industry will be prevented from expanding as the longer term dept markets are destroyed they are forced to hold ever more capitol for expansion eventually of course they will not only not use any debt but only a fraction of their profits for expansion.

Overall the market will punish any oil and gas company that tries to expand rapidly either via reinvestment of profits or esp via taking on debt. Investors will squeeze the golden goose until no more eggs are forthcoming they simply have no choice practically every other area of the economy will be reduced to razor thin or negative profit margins as the only source of wealth becomes the energy sector. We become stuck in the classic catch 22 of people building houses for people with no net productive work forthcoming.
You hit the wall where we can simply no longer generate any profit from further energy extraction at any price. The economy literally and figuratively runs out of gas.

You're right about the fuel substitution. For example, heating oil has decreased in absolute terms, while natural gas has progressively gained market share for decades. Oil is hardly used for electricity now, while natural gas has filled in the gap. Natural gas is beginning to gain market share in transportation, even if from a tiny base, particularly in fleet vehicles. Last summer, it was reported by many companies that home natural gas conversions increased 50%. Expect a similar situation for electricity with a cap and trade system.

The baseline BTU price gap between natural gas and oil to narrow as oil is substituted for natural gas. And likely coal in the future.

"They are meaningless, IMO, unless they also include a pricing model."

reserve estimates do include a pricing model:

“Proved oil and gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e. prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided by contractual arrangements, but not on escalations based upon future conditions.”

where the wheels come off, imo, is when a public traded company is able to convince an independent engineering consultant that they can see the future and make enough assumptions to "pump" the reserves up to a predetermined/preconcieved notion of what can be recovered 20,50 or 100 yrs in the future based on limited production history and data.
reserve evaluators are the world's second oldest profession, imo.

Good reserve estimates elwood...good and valid reserve estimates. I was talking about those yahoos who through out 100 tcf recoverable NG without stipulating the price platform. We both know there are is a lot of NG that can be recovered today IF the price is there.

And hey....don't pick on those public liars...I mean public companies. I've been paid good money in the past to pitch their fantasies.

imo all. there is just too much focus on size. reserve size that is. there is a desire to look as succesful as possible. a lot of the reserves hype began way back in the '80's when t boone was making a run at phillips because of his claim that phillips wasn't protecting shareholder's value because their reserve were understated. and as i recall it, reserves were probably understated , not the least of which was for tax reasons. petroleum engineers sported crew cuts, narrow ties, pocket protectors and slip sticks(i exaggerate only a little).

Not all bad elwood. I've done some that were fairly accurate. P/off the client but there are even limits to my imagination. You probably recall Shell Oil paying a price a few years ago for inflating reserves to make shaeholders happy. Had to take a big PR hit when they wrote them down eventually.

Rockman wrote:

Clever folks here at TOD have come up with many long term solutions to our energy problems. Unfortunately, I’ve seen no one offer any scenario which might allow such solutions to be implemented.

If your estimates of unconventional NG reserves are accurate and there is quite a bit available, wouldn't it make more sense to burn the NG in a combined cycle electric generating plant? That way, the conversion to electricity would be near 60%. Then, use the electricity to run our cars or operate heat pumps, which use the electricity with high efficiency. The overall efficiency would be much better than simply burning the NG in a typical IC engine or in a furnace. The resulting CO2 emissions would be lower and the other air pollutants would be reduced as well. The energy cost of liquefying the NG must also be considered as a drain on the system efficiency as well.

The electricity from the NG plants could easily be dispatched, unlike nukes, thus the variable energy from renewables could be used when available. All the pieces of this puzzle exist today, it's just that we need the political will to do it, which is why the reactionary Repugs like Gingrich must not be allowed to get their hands back on the throttle...

E. Swanson

Dog --sounds like you know what you're talking about. Makes sense to use an exisiting (though perhaps in need of a big upgrade) then building all that new infrastructure. But, as you point out, there are competing interests. Back to the same problem: potential solutions which won't be enacted for what ever political or social reasons.

I think the plan in the article is incomplete because it burns up the rest of the resource without allocating any to the infrastructure turnover to renewables. It's a plan that maximizes profits in the short term to keep the party going, and ends in Big Stone Heads.

polytropos says,
"I posit that this nat gas option is a credible, realistic alternative as a liquid fuel for transportation."

I think that it is an alternative, but we must remember that we are dealing with one of the great natural endowments in geological and energy chemistry. Natural gas is VERY special stuff, useful in so many modern chemical operations. Many of the things people often claim are made from oil are not...they are made from natural gas. This includes specialty plastics, foams, insulations, paints and solvents, the list could go on for a long time, natural gas IS that special.

The problem is simple: If we use such a valuable asset for transportation, should we not at least be responsible enough to use it with the greatest possible efficiency? Do we want to be blowing this extremely valuable asset, which is expensive to handle and move around by the way, out the giant tailpipe of a V-10 "superbad" 4-wheel drive truck designed for no other purpose than to impress the "good ole boys" down at the local bar?

When the first generation of plug hybrids are built, we should consider natural gas as a possible fuel for the onboard fossil fuel charging engine. This would be revolutionary, as the efficiency of these vehicles should be VERY high, and there then would be absolutely 0% crude oil powered vehicle. The only way I could endorse natural gas in transportation is to use it in the absolutely most efficient way. Using it as a "bridge fuel" creates the terrible possibility that just when we need it most in about 30 years to help in the development of the renewables and advanced plastics/materials industry, it would be so expensive and hard to extract we could not rely on it as a chemical of choice.

One more thing: Why, WHY, will no one discuss methane recapture? The closest thing to renewable natural gas we have, and TONS of it avaiable by way of landfill gas, sewage, manure from agriculture (which we are now just funneling into rivers and streams with the lost of the methane, the nitrogen, and the phosperous!)



i read the article down to where he/she triple counted ng reserves, i see no need to read beyond that point. please see my previous post, or alternately prove that triple counting is not the case.

maybe chu needs a reprieve.

Dear elwoodeldmore: I see your point in that he counted reserves in multiple; however he was also only counting US reserves as I read the article. An energy infrastructure based in renewable energy is imperative to the future of the country. However, considering the development lead time of creating a truly renewable energy infrastructure, if LNG imports are cheaper than Oil imports, would a switch to a NG based transportation infrastructure be beneficial to American society if taken in the context of continuing creation of a renewable based energy infrastructure?

exwildcat. yes, i think the country(world) can make the transition to a more sane world, but will the country(world) ?

Michael Fitzsimmons, the author of Is There Enough Natural Gas?, goes beyond triple counting into the realm of fantasy:

The US Geological Survey estimates total global natural gas hydrate reserves in “the range of 100,000 to 300,000,000 TCF”. To put these numbers in perspective, that equals about 10,000 times the world’s estimated coal reserves and 15 to 40,000 times the world’s remaining oil reserves. That is, the world’s natural gas reserves have more energy content than the world’s coal and oil reserves combined.

Here are other significant problems I see with his analysis:

1. no consideration of peak natural gas, that is, the rate of extraction peaking and thereafter declining.

2. no consideration of how the massive increase in natural gas demand would affect price

3. no consideration of the impact of exponential population and economic growth if his plan is implemented. His estimate of the future consumption of natural gas is linear, that is, the reserve divided by current consumption rate.

4. In one of his comments he assumes the cost of drilling to expand the natural gas supply would be paid for by the profits of selling natural gas. He seems to assume the additional cost would be minor.

5. He advocates that replacing the burning of gasoline with natural gas reduces fossil carbon emissions without consideration for the accumulation of CO2 in the atmosphere. Reducing emissions does not reduce the concentration in the atmosphere and in fact continues to increase it.

6. He does not consider what happens to society when all the natural gas is consumed thereby depriving us of all its other valuable uses in heating, fertilizer production, plastic production and industry. If we consumed all the petroleum and natural gas, we might not be able to heat urban buildings without choking on the pollution.

7. He refers to converting transportation to using natural gas to give us more time to convert to renewables but fails to provide a plan for that conversion. He seems to assume that both can be done without slowing the conversion to renewable sources.

8. His calculation assumes 50% of the current U.S. automobile fleet runs from natural gas and ignores diesel powered commercial vehicles. If ELM is correct, this scenario would collapse quickly on the falling edge of peak oil due to its reliance on diesel to continue commercial trucking.

9. He does not include the energy, presumably electricity, needed to compress the natural gas for use in vehicles.

10. He assumes 250 TCF from the Haynesville Field:

Consider that Chesapeake Energy (CHK) predicts the Haynesville Field (east TX / northwest LA) will become America’s largest natural gas field and the fourth largest gas field in the world. It is estimated to contain 700 TCF with recoverable reserves of 250+ TCF.

11. He increases the U.S. recoverable reserves with this reasoning:

Focusing back on US reserves, the most recent independent review of America’s natural gas supply was estimated to be 2,247 TCF (Navigant Consulting Inc., July 2008). Robert Hefner estimates 3,000 TCF. Let’s take the average of these two estimates and call it 2,550 TCF and further assume this number is 50% optimistic: so the real reserve number is 1,225 TCF.

The EIA in 2007 estimated U.S. proven reserves of natural gas to be 238 TCF.

Nowhere posted about this late in yesterday's DB, but it deserves the light of day.

The Dilemma Over Coal Generated Power

It's a target rich discussion....

Profit trumps belief?

In fact, right now Rogers is building two new coal plants. "You're talking a great game, but you're building coal-fired power plants," Pelley pointed out.

"I am following through on what is job one for me, making sure my customers have affordable, reliable, clean electricity," Rogers said.

Touching on The Tragedy of the Commons?...

If capturing carbon in the U.S. is decades away, consider that China and India now put more carbon in the air than we do and the Chinese are opening coal-fired plants at a rate of one a week. None captures its carbon. Rogers has broken ground on his two new coal-fired plants despite warnings from scientists, like NASA’s Jim Hansen.

"So when Jim Hansen says that to save the planet, we should stop building coal-fired power plants today you say what?" Pelley asked Rogers.

"I say, 'Mr. Hansen, can't get done, won't get done,'" Rogers replied. "We've got to keep our economy going. We've got to make the transition. And I'm gonna do everything I can with the greatest sense of urgency to make the transition. But to do what you ask me to do now is just not doable."


Trouble is, there is a Marshall plan today, and it's rebuilding Wall Street. Add to that Congress projection of record federal deficits of a trillion dollars. And it turns out not even the industry that warns of the end of our way of life is paying for it.

This story does put the two sides in proper context. The scientists (including me) think coal burning and CO2 emissions must be curtailed, while the electric power industry thinks their mission is to provide the cheapest electric power to their customers which means burning coal. This has all been painfully obvious for at least 25 years to anyone who has thought thru the problem. Yet, there's no agreement on how to deal with the situation. Worse, there's a continuing stream of propaganda and disinformation from the political world.

When it gets right down to the choice of having a job or preserving the natural life support systems, most people will just say "Screw Mother Nature". Learning that has made me a total doomer, a view I acquired decades ago...

E. Swanson

It's Mother Nature that forces that answer due to the future discounting phenomenon: Survival today trumps worrying about survival in the far off future. A job today means survival today. Therefore: Screw Mother Nature
(But actually she is screwing with us)

Perhaps you fail to understand that in the end, Nature will have the last laugh and the joke will be on us uppity monkeys with our large craniums and big egos...

E. Swanson

No. I fully understand. Which is why my comment ends with the paradoxical "But actually she is screwing with us".

You see, the laws of Nature and Evolution almost inherently require that we weigh near term survivability issues more heavily than the long term ones. Those of our ancestral lineage who did not think short term, failed to pass their long-term view genes along to us.

Thus, we were pre-wired to think short term because that is what maximized short term chances for survival (at least survival to age of procreation). However, that same pre-wiring doomed us to long term unsustainability. Nature gets the last laugh.

"Affordable, Reliable, Clean Electricity.." Pick any two, as long as it's the first two.

..and in a couple years.. 'Well, ONE outa three ain't bad, I didn't say it had to be affordable for EVERYONE!'..

I got an e-mail from James Hamilton (economist known for his work linking oil prices and the current recession) saying that his latest Econobrowser post links to three Oil Drum posts.

Oil shocks and recessions

Here I provide some more background on the relation between oil price increases and economic recessions.

At the EIA meeting I attended, Steven Chu quoted the work of James Hamilton. So maybe our work is having (or will have) some influence.

Dear all

Does anyone have a link showing how net energy changes with cumulative production from any individual oil field(s)? From searching on TOD I can find plenty of stuff on net energy and its implications but am struggling to find any specific worked examples for actual fields that track this as a function of production and have been sufficiently depleted to make the data complete (or nearly complete).




Hi thewatcher,

I don't know about any worked examples, but I remember mention of Howard Odum doing a study of stripper wells in Texas and finding they were energy break even. You might go look for his work.

If the data for oil exists, it would be in the Texas Rail Road commission database. They would have the best information tracking oil fields as they peaked and declined. Or Louisiana. They have a great public oil and gas database. I have not tried to look up historical data however.


watcher -- As Jon mentioned the Texas RRC would likely be your most accessible source of info but I still don't think it will get to your answer. The economics (the only measure of EROEI you can really figure) in very mature fields is dominated by operational expenses. All I can offer is a real life example I dealt with. In S Texas there is a shallow oil field that has produced since the 1940's. It's somewhat unique in that it produces solely by gravity drainage. The oil is pumped out of the well by a small (the size of a big lawn mower) pump jack run by electricity. A typical well makes only one bopd by pumping about 8 to 10 hours. A couple who lives on the land operates this portion of the field. They own 23 wells. They have been producing them for over 30 years. When oil was selling for $18/bbl they were getting $8/bbl due to sulfur deduct. But they handled the operations themselves...no employees. Thus net income was all profit to them. At low prices they were netting around $25k/year. This is probably as much as their small ranch earned them per year. When oil hit $100/bbl they were probably netting over $500k. Due to the gravity drainage these wells will continue producing for the next 100 years.

Granted, this is may seem like an extreme case but it's not an uncommon story for very mature fields. If one had access to their electrical expenses as well as maintenance items you could do an EROEI calculation. It might be very low. But it doesn't matter to that couple. As long as the wells net them positive income they keep producing them. The last time I saw the number the average production from oil wells in the US was around 10 bopd. Thus it's easy to imagine a good bit of our reserves are at a relatively low energy gain. But they are profitable and thus will continue producing. Despite what you read in the MSM, oil production in the US is not dominated by the majors and big independents. The majority of our oil is produced by small operators. This make the US very unique in the world. It also explains why we are still the third(?) largest producer of oil in the world.

It will always be $’s in vs. $’s out. And when the profit is earned by individuals who are essentially paying their own salaries, the profits don’t have to be too great. I eventual came to be a little jealous of their situation. Life is full of uncertainties. But they (and their children and grandchildren and great grand children) will be earning a decent living as far into the future as they can see.

Greetings all. It's been a couple of weeks since I've been able to pay any attention to the Oil Drum. An eventful couple of weeks.

But, I have come back to discover a vastly reduced number of daily comments and the disappearance of certain posters who had become regulars. What did I miss?

Otherwise, I continue to be disappointed that we can't seem to collapse fast enough.

I don't think you missed anything. Your last line probably explains the lower traffic: not much going on on the oil or economic fronts.

Plus, it's spring. People are outside in their gardens or whatever, not inside on the computer.

(It's gotten a little too warm, IMO. Almost 90F in April is too damned hot.)

Thanks Leanan. I was trying to read if there was a different tone to posts - and I will say there appears to be a bit less acrimony. And I see the new Flag implementation and think that's a good idea. But nothing seemed obviously different, but I didn't want to step in anything.

We're having truly difficult weather here as well, not so much the high temps as the lack of rain. We are looking at a fire season that could get real ugly. And we continue to get these "cold fronts" that push the lows down into the 50s (unusual for this time of year).

The spring garden has been a disaster, though I have been harvesting english peas - they were better than my other spring bean plant at surviving the late frosts.

So, I'm now planning on putting in my summer planting a bit early - anybody have suggestions for very heat tolerant vegetables? I'm already planning on okra, cowpeas and black beans. I'm looking for plants that will hold up under weeks on end of 95 degree weather and intense sun.

The flagging system has been in the works for awhile, and is not a result of anything that's happened in the last week or even month. It's been pretty quiet around here.

They're not vegetables, but sorghum and millet domesticated in sub Saharan Africa, are drought and heat tolerant, particularly millet. Another grain to consider is sesame.

Collard Greens seem to take the heat and they are tasty also.

Jerusalem Artichokes for next year (Plant the chokes in the autumn)



Melons like the heat but are thirsty.


psunflwr and absitively,

Thanks for the suggestions. I'm not sure I have the room to make the grains worthwhile, but it might be worth trying just to see if they work - then I could look for room.

I love Collards, but can't grow them in the heat here - they get swarmed by aphids - I usually plant them around labor day and harvest from late Nov until it gets to hot (around start of April)

I will try the Orach - a similar tropical that I'm also going to try is Malabar Spinach.

I keep trying the melons and pumpkins, and I know they used to grow lots of watermelon south of here, but I just can't seem to give them enough water to get them through to harvest. Try try again.

I know Greyzone commented a few days ago on why he wasn't making comments, except on fairly rare occasions. In his words:

I stopped commenting here on any regular basis because there is real work, important work, to be done by people who understand what is happening.

This is closely related to the gardening issue, but there are also other kinds of things people are doing to prepare.

WRT traffic here at TOD, I think people are missing the obvious: I suspect a LOT of regular readers - and posters - think we hit Peak last July. For many, that's reason enough to shift focus. I also think a number of the other reasons explored are correct.


Interesting. We've been thinking that TOD will likely have to shift focus, too, if peak oil is in the rear view mirror.

The problem is that there's a lot more consensus on peak oil than on what to do about it.

Leanan -- Perhaps it's a simple as gasoline under $2. Human nature (just like mine): no immediate pain (high prices) = declining interest. Not knocking anyone here but it's easy to see the root cause. We all tend to seriously address problems immediately ahead of us. Unfortunately many of our problems require long term planning. Whether we recognize it consciously or not, we are continuely faced with a political/free market/social system that refuses to take the long term view. A lot of lip service for sure but no follow through. I'm sure many here are as frustrated as I am with regards to the number of good ideas presented on TOD while understanding that few, if any, will be actioned. I hadn't thought about it before the topic came up but I think I'm about talked out myself. Maybe that's a more common condition around then some would guess. I still pass through if for no other reason then respond to any tech questions. New bits of data are interesting but for the most part, thanks to the wide and clever variety of folks here, I think we've covered the big picture fairly well.

Besides the obvious problem of what future world everyone wants being different, another serious problem is in how we go about solving problems, or even looking at them.

E.g., if it were my choice as Global Emperor and All-around Arse of All Trades, I'd start with the worst case scenario and work backwards to figure out what we *must* do, regardless of whose fantasy we're all living. I would next look for solutions that work regardless of outcome.

Those steps would offer a good enough outline to start with, I think.

Sounds like a good topic for the Campfire: What's your worst case scenario, and what steps do we need to take at the absolute minimum? (Too much detail is a bad thing. KISS it.)

Or, What Things Should/Do We Need To Do, No Matter What?


My experience is probably not typical - but probably half or more of my recent posts were delected (prior to the implementation of the flag system). Contrary views may not have a place on this site.

The problem is not contrary views. It's the rude and trollish way you express yourself.

Please review our guidelines and adjust your posting style accordingly.

And if you have any questions about why something was deleted, please e-mail me privately rather than complaining in the comments.

You have bought your last car

I think this article does a great job of explaining our current difficulty. The damage of high energy prices prevents a change to cleaner forms of energy. I think the price volatility argument is excellent and I have worried about this issue since reading Beyond Oil: The View From Hubbert's Peak by Deffeyes.

EROI analysis gives a similar viewpoint. Rising prices are often the sign of rising energy costs. (Deeper drilling, more complex completions, etc). This means less energy is available to society and forces a contraction in the wider economy. Switching energy sources requires huge infrastructure changes, and is costly in terms of money and energy. Again, a contraction is forced on the economy.

I do think that there will be future winners and losers. Those with energy will have an economy and goods to trade for more energy. Those without energy will become poorer and will soon be without the funds to compete for more energy. Every time we go through a price spike the the energy haves and have nots will diverge. The energy rich keep stable and the poor will get poorer.

I don't disagree with the general premise...but I suspect most Americans have not bought their last car. Yes, a lot of people are hurting financially, but a lot more are still doing okay. And their cars will be the last thing they give up.

A few days ago, I posted a link to a "luxury vs. necessity" survey. The bad economy had more Americans deciding that air conditioning and dishwashers were luxuries, not necessities. But the number who thought cell phones were a necessity increased. And one item on the survey was considered a necessity by everyone: a car.

Your point is well taken. The timing is very uncertain. For some people, in some areas, it is likely already true. I know a few couples who are down to one car because of collision and part failure. I don't think they will have funds for two cars ever again. I hope to be surprised.

Hi, Leanan. I don't have the figures for how many Americans have at least one car but it's clearly less than the number of cars on the road since some people own multiple cars. If we had that number we could test my assertion fairly easily in the future. Let's call it x. If (x / 2) + 1 people buy a car before I what expect to happen actually happens, then the assertion will be wrong.

What I didn't mention in the article is that I expect the number of car sales per year to keep dropping. We could easily be at 4 million in annual sales in three years, thus increasing the time to turn over the fleet even more.

@WNC: yes, some people will convert their own vehicles to EV or LNG, but will they resell them? Probably not, I think they will keep them as long as they can if they are good cars for such conversions, especially EV conversions. Thus their current car is their last car, just using a different power source.

Besides, there may not be as many conversions as might be expected. There are a lot of very heavy cars out there that are completely unsuited to EV conversions without spending $40k or more just on the batteries. Our current vehicle fleet is very poorly suited to EV conversions (I'm in the middle of a conversion myself right now). LNG conversions might be a better bet.

Edited. I misunderstood what you were saying.

This study has some data.

Experian Automotive found single- and two-vehicle households are almost neck and neck, at nearly 34 percent and 31 percent, respectively.

However, households with three or more vehicles maintain the single largest category, at nearly 35 percent.

And according to this:

About 75% of Americans own at least one car.

It seems to me that with the average household owning 3 cars, there's a lot of room to cut back while still buying a car.

Especially if the government starts that "cash for clunkers" program.

Fabulous, thank you for digging up that data. Let's compare notes in 2015 and see where we stand :-).

By my calcs, that's about 228 million on the road.

'At's a lots'a motzarella!


Since the flagging system is now in effect I am going to resume some commenting on the DBs and see how it goes as far as disruption and acrimony.

On traffic and vehicles.

This last Saturday I rode my motorcycle over to Illinois and jumped on I-57 heading north. Like to Carbonddale, city where my wife was born and both my children obtained their Masters.

I have traveled this route many many times so I know the patterns. Likewise the routes to St. Louis where I find I-55 to be also more devoid of much traffic.

What I observed on 57 was astounding. I saw almost no 18 wheelers. Very very little automobiles. In fact long stretches of no traffic. This was midday of Saturday. Normally this is a very heavily traveled interstate since it ends in Chicago.

The Pulaski and Alexander County Mounties patrol and set up radar traps constantly for the revenue. The speed limit is 55 trucks,65 cars, but trucks usually roll at the 80's and cars as well.

Yet almost no traffic. Messed up my mind.

And the small towns I stopped in were almost like boarded up.

So IMO the traffic volumes have dropped astoundingly in a short period. This means to me that folks are absoutely and most definitely 'Getting It'. The fiscal crisis must have been the showstopper since PO never seemed to get traction. Yet when its 'money' on the table then ohhh everyone gets it.

My observations. No data to back it up. Just what I saw and I ride these areas a lot or used to. Now more just ocassionally.

I was looking for a tortilla press BTW. As well as just basking in the sun and lack of wind. BTW everyone here notes a lot the huge amount of wind we have been getting. It seems to blow furiously most of the time anymore. You really notice it on a motorcycle.

Airdale-I blew a curve on a country road yesterday. Shot over a drainage ditch and hit a sloppy field. Motored on across the corn field to a woman raking her yard,took a hard left to her driveway thru her yard and back on the twolane. She never even looked up. I rarely do this. Not in years have I blown a gentle curve. But I took the high side(outside) when I shouldn't have. Never lost it either. It was an adrenalin high to be sure. My bike was a mudball.

How many times did you have to stick a leg down - any ?

Glad to here it was only a matter washing off. My first and only missed curve cost me a fractured rib. I'm am thankful for that as I crossed through another lane of traffic with no control.

Take care !


No stickee legee down.

Nope. I used to ride trail bikes a lot and being lighter I could use my legs that way. But with a huge(relatively) LowRider I wouldn't unless at parking lot speed.

What I did was made a hard right to jump over the drainage ditch beside the roadway, and when I came down I kept the wheels perfectly straight and aligned. Didn't move the throttle and didn't touch the brakes.

I very slowly dropped down to about 25mph when half way across the field and rode all the way to the womans house with a driveway.

Keeping speed up means the gyroscopic effect keeps you straight and upright.




I know this is a really stupid question, but does LNG = LPG? If so, I'll look into shipping my car over. If not, gotta sell it.


There's a big difference chemically. NG (natural gas) is CH4 while LPG (Liquified Petroleum Gas) is mostly propane, C3H8, and perhaps some butane, C4H10. Because the molecules of LPG are heavier, they become liquid at lower pressures than LNG. You are not likely to run a car on LNG, although compressed natural gas (CNG) is being used for some cars and even for diesel engines in busses.

E. Swanson

Any chance my LPG vehicle is easily converted to CNG?


I can't really answer that, since I have not investigated the problem. Then too, it would depend on where you were moving towards. There might not be a CNG facility available. You might buy your own compressor to tap into the gas supply where you will live. But, either way, you would need to change the tanks and CNG tanks are rather large for the amount of storage they provide. The diesel buses used in Atlanta have the tanks mounted on the roof and they cover a rather long section of the top...

Where I live, there are several companies that sell propane (LPG) for campers or outdoor grills and the connections are standard such that the tanks can be filled by any supplier. If you were going to move to a location in the U.S., it's likely that you could find a supplier nearby. One big issue is price. I just paid $2.50 a gallon for propane to be delivered to my house for heating, which is down from the winter peak of about $3.25 a gallon. That's more than gasoline and there being less energy per gallon in propane, the cost per mile would be higher than gasoline...

E. Swanson

Sorry, I don't know the answer to that.

Converting to CNG from LPG (Sept. 5, 2008) says it is possible but not economical because none of the parts are interchangeable.

Thanks, everybody.

I do suspect that there will be a lot more EV conversions of compacts and subcompacts than the author is anticipating, though. Won't do for highway use or long distance commutes, but for getting back and forth to the grocery store, it will do for most people.

This will be a good self-employment opportunity for quite a few people - set up your own electric car conversion business.

I do think that there will be future winners and losers. Those with energy will have an economy and goods to trade for more energy. Those without energy will become poorer and will soon be without the funds to compete for more energy. Every time we go through a price spike the the energy haves and have nots will diverge. The energy rich keep stable and the poor will get poorer.

I would disagree with this premise, because the oil producing countries can not produce anywhere near enough food to keep their populations fed. Therefore, those countries with surplus food (or the capability to produce surplus with adequate energy supplies) may be in a better bargaining position as they can swap food for energy (oil).
The USA in particular has the largest capability to produce more food than our current population requires, so the USA may well be in a somewhat better bargaining position in being able to trade its surplus food for the oil it wants/needs.

The USA in particular has the largest capability to produce more food than our current population requires

Hmmm ... maybe ... but the current USA, eventually unsustainable, way of producing food relies on lots of Fossil Fuel inputs ... and several one time use inputs like soluble phosphorus ... and a stable climate ... and credit ... the past is not necesarily a reliable predictor of the future!

ELM is likely to rapidly hit any agriculturally critical imports the USA may require quite soon, certainly long before middle east oil runs out, drought might be a problem too ... to say nothing of available credit! ... in general money is only lent to relatively rich people who don't really need it and who can be expected to pay it back with interest.

There is no need for FF inputs using natural farming methods. There is, imo, no problem maintaining current production except for a period of rehabilitation for I-NPK fields.


If an American without a job can not buy food while an oil producing country has plenty of money and the desire to purchase, the food made in America will be sold to the highest bidder while Americans starve. Because greed trumps altruism, it does not matter if the U.S. has a surplus of food relative to the demand of its impoverished citizens.

Auditors: Nearly 25% of Companies May Not Be Going Concerns
CFO.com April 22, 2009

A research firm predicts 3,589 companies will report that their auditors doubt they will continue as going concerns. The auditors of nearly one-quarter of companies feel that the companies may not live out the year....To be sure, what the findings mean has yet to be determined . Still unclear is whether audit firms are being more conservative in their forecasts because regulators have indicated they will keep a close watch on going-concern opinions.

That's over the next 12-24 months. Over the next decade, I'm thinking it is more like 50-75% that are not going concerns - and that might be optimistic.

This is just one more reason why I really can't see stocks as a good long-term investment right now. I guess if you are a trader and think you are better than average, good luck to you. Of course, that same luck might go just as far for you at Las Vegas or the race track.

I would expect the Iron Triangle to counter this report by projecting that investing now in Sunbelt tanning salons and golf courses is THE Golden Investment Opportunity of a lifetime./sarcasm off

And then there were three: Range, Abengoa, Bluefire

Source: Chemical and Engineering News

Hello TODers,

Big Sandy Family Firm Producing Innovative Farming Equipment That Eliminates the Need for Fertilizer

..Progressive Agriculture Inc. has recently started producing heat exchangers which utilize the Canadian trademarked BIO-AGTIVE System to inject carbon from tractor exhaust into the soil during seeding as a crop nutrient.

"The CO2 that comes out and the NOX that are in there are nutrients that stimulate root growth," said Ken Yirsa. "It provides a food source for the bacteria that is in the soil."

Progressive Agriculture, owned by the Yirsa family, says they have gotten some outstanding results from the innovative technology. The say during some tests the system has outperformed fertilizer and they now no longer need it anywhere on their farm.
IMO, this is a fascinating development for reducing or maybe eliminating the need for purchasing ammonia or urea [N-products] plus carbon sequestration, but I would think soil sample testing would show that they would still need to add P & K [plus maybe some other trace nutrients like S]. My guess is that diesel exhaust is very low in the Elements P & K.

Quick google shows: http://en.wikipedia.org/wiki/Diesel
Chemical composition

Petroleum-derived diesel is composed of about 75% saturated hydrocarbons (primarily paraffins including n, iso, and cycloparaffins), and 25% aromatic hydrocarbons (including naphthalenes and alkylbenzenes).[15] The average chemical formula for common diesel fuel is C12H23, ranging from approx. C10H20 to C15H28.
Yep, no P & K, so agriculture still has a potential topsoil Liebig Minimum to combat as FFs and P & K ores deplete postpeak. Have you hugged your bag of NPK today?

I don't get this part:

"The CO2 that comes out and the NOX that are in there are nutrients that stimulate root growth," said Ken Yirsa. "It provides a food source for the bacteria that is in the soil."

How can CO2 be a food source for bacteria in the soil? Bacteria require reduced, not oxidized, forms of carbon to feed on (just like us).

Hello Jason,

Sorry, but I am not a soil scientist nor a chemist. Perhaps a more qualified TODer will research this topic, then bang out a future keypost. :)

Depending on the ultimate ERoEI results: this small company might be a great investment [or not]. I would imagine Deere Co and Caterpillar researchers are already closely eyeballing their work, and obviously the big Haber-Bosch factories have billion$$$ in infrastructure riding on the outcome. P & K is still the agro-bottleneck,IMO.

Republicans and Flu Preparedness:

Famously, Maine Senator Collins, the supposedly moderate Republican who demanded cuts in health care spending in exchange for her support of a watered-down version of the stimulus, fumed about the pandemic funding: "Does it belong in this bill? Should we have $870 million in this bill No, we should not."

Karl Rove, from his perch at the Wall Street Journal, criticized the inclusion of "$462 million for the Centers for Disease Control, and $900 million for pandemic flu preparations," on the grounds that "health care also added jobs" in the previous year. Such expenditures were, to Rove, "disturbing" and an example of President Obama's "lack of engagement and leadership."

Obama addresses National Academy of Science

There will be no single Sputnik moment for this generation's challenges to break our dependence on fossil fuels. In many ways, this makes the challenge even tougher to solve –- and makes it all the more important to keep our eyes fixed on the work ahead.

But energy is our great project, this generation's great project. And that's why I've set a goal for our nation that we will reduce our carbon pollution by more than 80 percent by 2050. And that is why -- (applause) -- and that is why I'm pursuing, in concert with Congress, the policies that will help meet us -- help us meet this goal.

My recovery plan provides the incentives to double our nation's capacity to generate renewable energy over the next few years -- extending the production tax credit, providing loan guarantees and offering grants to spur investment. Just take one example: Federally funded research and development has dropped the cost of solar panels by tenfold over the last three decades. Our renewed efforts will ensure that solar and other clean energy technologies will be competitive.

My budget includes $150 billion over 10 years to invest in sources of renewable energy as well as energy efficiency. It supports efforts at NASA, recommended as a priority by the National Research Council, to develop new space-based capabilities to help us better understand our changing climate.

And today, I'm also announcing that for the first time, we are funding an initiative -- recommended by this organization -- called the Advanced Research Projects Agency for Energy, or ARPA-E

Just give a $5/watt rebate for Roof Top Solar. I cannot understand why roof top solar is not getting a chance ?

What is the problem with roof top solar ??

The Stated Energy Agenda (Partial) - For the moment..

Create Millions of New Green Jobs

* Ensure 10 percent of Our Electricity Comes from Renewable Sources by 2012, and 25 percent by 2025.
* Deploy the Cheapest, Cleanest, Fastest Energy Source – Energy Efficiency.
* Weatherize One Million Homes Annually.
* Develop and Deploy Clean Coal Technology.
* Prioritize the Construction of the Alaska Natural Gas Pipeline.

* Weatherize One Million Homes Annually.

Great! 100+ years from now, they'll be done!


For those that weren't on the ACORE webinar today:

Kansas Wind May Power Graceland


They present a plan for KS to get 20 GW of renewable power by 2030, allowing the state to be an electricity exporter.

Onwards to sustainability,


Off Topic: Swine Flu announcements from 1976:

Regarding the currently upgraded Swine Flu to pandemic status.

In the Hong Kong pandemic flu of 1968 I had just agreed to a 6 month temporary assignment to Sytems Design and Development in upstate New York and moved my wife and two children into an apt on an estate in Woodstock.

We found soon that the last residents had cases of that flu which we all four immediately caught.

It was the worst sickness I had ever experienced. All of us vomited over and over and what we ate was immediately vomited up. We had very high fevers and spent about two weeks total in bed before it finally ran its course and we had survived it. Others in nearby apts were similiarly infected. We could not travel to the Doctor either since we were so debiliated and sick.

We were lucky to have not been among the million who were killed by that flu.

This current flu I am taking very very seriously for that reason.

I told my preacher that I will NOT be attending any services and will not be spending any time around others unless abolutely necessary.

So today I went to the book store many miles away and purchased a lot of good reading material and also the latest Computer Pilot Magazine issue with some nice new aircraft to run on my desktop.

When it blows out I will then consider leaving the farm but not until. Only very very rarely.

That sickness from the Hong Kong flu is still part of my memories. I wish it on no one.

Airdale-So I may be posting alot when not gardening,look for commenting counts for everyone to go up, perhaps....time to hunker down..at my age for sure

'Atlas Shrugged' author sees resurgence

In the midst of the credit crisis and the federal government's massive bailout plan, the works of Rand, a proponent of a libertarian, free-market philosophy she called Objectivism, are getting new attention.

"If only 'Atlas' were required reading for every member of Congress and political appointee in the Obama administration. I'm confident that we'd get out of the current financial mess a lot faster," Wall Street Journal columnist Stephen Moore wrote in early January.

It's obviously getting attention from the general public. Rand book sales are "going through the roof," said Yaron Brook, the president of the Ayn Rand Institute. According to Brook, "Atlas Shrugged," her most famous novel, has sold more copies in the first four months of 2009 than it did for all of 2008 -- and in 2008, it sold 200,000 copies. It's been in Amazon.com's top 50 for more than a month.

Ayn Rand was a favorite read when I was 16. Is it cool, or what , to be a hero for being a total azzhole when you are 16?
I wish Atlas would hurry up and shrug, so we can get rid of these parasitic elitists, and their sociopathic ideas and behavior.
The species would be better off with these delusional parasites gone.

Oddly, I took the opposite lesson from the financial crisis than Ayn fans did. I saw it as evidence that we needed more government regulation, not less.

You understand complexity, most people are not educated to think critically, and base reality on simplistic story and myth.
I am with you.

Ayn Rand's "Atlas Shrugged" is based on a series of mythical lies, namely:
1. There are self-made men (John Galt, and women ie. Ms. Rand) who "deserve" to take the bulk share of the pie because without these ultra-special people all the rest of us are nothings, and
2. There are parasitic people who deserve nothing and live as mean spirited monkeys on the backs of the all deserving Galts

The truth is much more muddied than these extremist ideas. No man (or woman) is an a self-made island. We are each the product of our parents, our teachers, our villages. Without the entire support fabric of a complex society, all the larger than life heroes would be picking through the garbage heaps just like the rest of them.

Also, many people who are labeled as lazy and parasitic often suffer from mental disease. No one gets up in the morning and says to themselves, Today, I want to be the worst person I can possibly be.

So the Atlas Shrugged manifesto is one extreme view of the world just as the Communist manifesto is another (that each should take according to their minimal needs while contributing all according to the maximum of their abilities).

I agree with you, However I think that a free market would be better, in a perfect world, however we are past the point of a completely free market in my opinion. A truly free market requires responsibility, integrity, a perspective of understanding the consequences of one’s actions, and the ability to make decisions on the basis of long term gains for many and not a short term jackpot for a few. In today’s market where bad decision making, both in government policy and market decisions, there are no consequences, only bailouts from the treasury and subsequently taxpayers. In light of this we have only one option to increase regulation on financial institutions/markets as the culture of greed on Wall Street leads only a perpetual seeking of short term profit with little regard to consequence or long term strategy.

Is anyone else disturbed by the fact that Larry Summers lobbied to get the Glass Steagall act altered to deregulate the derivatives market, became the president of Harvard University, made 5mil from a hedge fund last year, is now the chief economic advisor to the president tasked to fix a problem he helped start?

In the free market that we had in our earlier years as a nation people like Larry Summers would be lucky if they only got tarred and feathered and run out of town to the wilderness if not executed or imprisoned for their lack of foresight and/or moral proclivity to not profiteer off the average joe. However in today’s society, a society that will make people like that presidents of prestigious learning institutions, and presidential advisors, I would say that the only option is greater legislation. More laws to keep the predatory financial culture of greed in check if not the government itself in check. That being said I hate enlarging the government except when it cannot be avoided, and in a day where Wall Street or D.C. has little integrity or concern for the citizens (in regard to financial markets) of this nation the only solution is legislation.

Galt's Gulch, the fictional village of economic outlaws in Ayn Rand's novel, Atlas Shrugged. In the novel, Galt's Gulch was hidden in the Rocky Mountains and protected by a holographic shield so perfect it was called "almost magical"

Galt's Gulch is a high-tech retreat in Ayn Rand's novel Atlas Shrugged—a place where all the "disappearing" productive people can meet, relax and recharge.

Inspired by my hometown


I have property not to far away, in Crestone.

Nuclear is the corporate winner:

Local windfarm is threatened by RWE's new nuclear plans
By Sarah Arnott
Turbines are within RWE's Kirksanton proposal

RWE's plan for a new nuclear power station at Kirksanton, near Sellafield, would mean the destruction of a community-owned wind farm already producing electricity on the site.

The three companies running the Haverigg wind project on the Cumbrian coast only found out that their land was part of the German utility's plan when the full list of nominated sites was published by the Government earlier this month.

The "General Synfuels to Test Oil Shale..." slightly set off my BS meter, with a few quick calculations to confirm.

Somebody tell me if I've got some conversion factor wrong or something:

If they say 700 million barrels will come from a 500 acre field, that means 1.4 million barrels per acre, or dividing by 43,560 sq. ft. per acre, or 32 barrels per sq. ft. Since there are 5.61 cubic feet per barrel, then the pay zone would have to be 32 * 5.61 or 180 feet thick of 100% kerogen, ignoring the fact that kerogen does not equal oil. What is the % pore space and expected recovery factor for oil shale? Does this match with the 1.4 million barrels per acre? Sounds to me like it does't.

I read it the same way you did.

Consider the East Texas Field, the largest Lower 48 oil field, which covers about 120,000 acres and which made close to 6 Gb, an average of about 50,000 barrels per acre.

So, these guys are asserting that they can recover oil at about 28 times the rate per acre that we observed in the largest Lower 48 oil field, which had a very high quality reservoir, and BTW the drilling density was so high and the reservoir characteristics were so good that the recovery factor was extremely high in the East Texas Field.

If memory serves, the actual totall volume of oil that Shell produced from their pilot shale project, using the freeze wall technique, was extremely small--I believe about 1700 barrels (not per day, total volume).

Jon Wellinghoff, the new chairman of the Federal Energy Regulatory Commission,

Speaking at a conference yesterday, Mr. Wellinghoff said the U.S. can make do without new nuclear or coal plants, Green Wire reports: “We may not need any, ever,”

He pitched for more distributed power, that is, more local generation and consumption of energy. And future demand for power should be less, if energy-efficiency measures are implemented


After a drought of tech articles deemed not interesting enough to post, a twofer day!

It looks like at least one country wants to pursue the NG route:
India prepares for shift to gas-based economy

* Once gas is available in a large number of cities, city buses could switch over to compressed natural gas (CNG) as would many private cars. Malls, offices, hospitals and restaurants could be directly chilled by gas, using vapour absorption chillers

SiXtron sees explosive market for safer solar coating

The startup has developed a replacement for the highly combustible silane material used to coat crystalline silicon solar panels. SiXtron says its technology is not only cheaper, it removes the need for many of the costly handling procedures that silane requires.


Barwicz predicted that a 20-gigawatt crystalline solar market, which is predicted by 2012, would create an addressable global market for SiXtron of $500 million.

RE: You've Bought Your Last Car;

Andre Angelantoni says,

I often hear people say that my predictions for the future are wrong because when the price of oil goes up we will move to something else. The high price will provide a greater incentive to move to alternatives. That's true — but it's not the whole story. The price of oil must meet all of these conditions:

* it must be high enough to encourage the move to alternatives
* it must be sustained, that is, not volatile, and
* it must not get too high.

If the price is too low, obviously there isn't much incentive to move to an alternative except for those who understand the damage our use of oil is causing or who understand it's not going to be abundant much longer.

If there is too much price volatility, people will be unsure it is wise to spend money on alternatives. They keep the equipment they have and wait for more certainty. That's why SUV sales have gone back up now that gas is (temporarily) lower.

All this is true, but then he makes an assumption that is easy to make, that the damage price is higher than the incentive price. This isn't required and in fact the following is what is really happening:b oil prices are already too high. Economic damage started when prices rose above $40 barrel. If %80/bbl is required for alternatives requiring a functioning economy, we will never get there.

Oil is becomiing a luxury item like a Louis Vuitton bag ...

I think a sustained but slowly growing price over time would have gotten the job done.

Question. If there were adequate gas supplies to delay the impact of peak oil by a certain number of years, would it not be more efficient to build gas or convert coal plants to gas while using electric vehicles, rather than building a whole new infrastructure for natural gas vehicles? That way as we build up wind, solar, and nuclear we would have the same vehicle type as we change power sources.