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Drumbeat: May 4, 2009
Posted by Leanan on May 4, 2009 - 9:37am
Peak Oil: Global Oil Production’s Peaked, Analyst Says
Dust off those survivalist manuals and brush up on your dystopias: Peak oil is back.Global production of petroleum peaked in the first quarter of last year, says analysts Raymond James, which “represents a paradigm shift of historic proportions. Unfortunately, mankind better get ready to live in a peak oil world because we believe the ‘peak’ is now behind us.”
Raymond James’s notes that non-OPEC oil production apparently peaked in the first quarter of 2007, and given precipitous falls in oil output from Russia to Mexico, there’s not much hope for a recovery. OPEC production—and thus global output—peaked a little later, in the first quarter of 2008, Raymond James says.
The contention rests on a simple argument: OPEC oil production actually fell even as oil prices were above $100 a barrel, a sign of the “tyranny of geology” that limits the easy production of ever-more crude.
Going green can cost too much green
Going green isn't easy, especially during a recession.For two years, the city of Durango, Colo., bought electricity for all its government buildings from wind farms. The City Council ended that program this year, reverting to electricity derived from coal-burning plants and saving the cash-strapped city about $45,000.
"It's very hard for us to lay off an employee to justify green power," City Manager Ron LeBlanc said. "Those are the tradeoffs you have to face."
Across the country, government agencies are either cutting or shrinking programs that use or fund renewable energy projects. Green power — from wind farms, solar power or other renewable energy sources — remains more expensive than traditional power sources.
"We are on the cusp of a period of technical innovation like the automobile industry has never seen," says Mike Jackson, CEO of AutoNation, the largest U.S. auto retailer. "There will be more change in the next five to 10 years than there was in the last 100."The first victim of that rapid change may be the Prius-style hybrid.
U.S. sees continued stream of LNG cargoes
NEW YORK (Reuters) - The United States saw a steady supply of liquefied natural gas imports during the weekend and increased imports are expected in the coming days and weeks.U.S. import terminals that sat largely idle during the winter are now seeing an uptick in cargoes of the super-cooled gas as demand elsewhere falls toward summer, leaving more cargoes for the United States to absorb.
Tupi oil is 'second independence for Brazil'
Brazilian President Luiz Inacio Lula da Silva called Friday for officials to finalise new oil laws giving the country a greater stake in recent oil finds, saying the legislation was urgently needed to guarantee Brazil's future."This is a second independence for Brazil," Lula said, commemorating the first crude oil pumped from the Tupi field off the country's southeast Atlantic coast.
Lula wants a working group he formed last year to complete work on proposals to change Brazil's concession-based oil law, said a Dow Jones Newswire report.
The president has pledged to use the newfound oil riches to ease Brazil's crushing poverty and improve the country's education system.
Saudi Stocks Surge to November High on Signs Recession Easing
(Bloomberg) -- Saudi shares climbed to the highest since November as Gulf markets gained on signs the global recession is easing and oil traded near a five-week high.
Power play: Metering tools slash energy costs
(Fortune Small Business) -- The minute a lightbulb burns out in your place of business, Don Howell can tell you about it. By e-mail, that is - the tall Virginian won't show up at your office door. His company, ADMMicro, installs power metering equipment that can tell when an air conditioning filter needs to be changed or whether a freezer door has been left open.
How the crisis is changing you
A new set of American values is emerging from the ashes of 600,000 layoffs a month, a lost decade in stocks, and the worst housing crash ever. These values may ring familiar to anyone who lived through the Great Depression. But for most of us it amounts to a large-scale makeover of the way we think about money and life.We're not just cutting our bills, we're rejecting materialism. We're placing safety and intrinsic rewards like relationships and personal growth ahead of profit. We're embracing family and community and asking how we can help others, not just ourselves.
"We've hit a hard pendulum swing," says Douglas Brinkley, a professor of history at Rice University in Houston. And he, along with many others, believes the changes in the nation's core values could last for decades.
Prosperity without Growth? - The transition to a sustainable economy
Prosperity Without Growth? says that the current global recession should be the occasion to forge a new economic system equipped to avoid the shocks and negative impacts associated with our reliance on growth. Ahead of the G20 Summit in London, the report calls on leaders to adopt a 12-step plan to make the transition to a fair, sustainable, low-carbon economy.
Chinese subsidies boost rural consumption
In an effort to get thrifty Chinese to spend more money, Beijing expanded a pilot programme to subsidise electronics purchases for farmers in February.The government pays 13% of the retail price for designated models of refrigerators, washing machines, colour television sets, mobile phones and personal computers.
Official figures show rural electronics purchases surged by 70% in March from the previous month. The scheme is expected to run till 2012.
Altering Planes, and the Way They Fly, to Save Fuel
FOR the aviation industry, its fate inextricably linked to the price of oil, fuel conservation is more than environmentally sound — it’s a matter of survival. That is why, in research labs and in airline conference rooms, any measure is open for discussion if it reduces the use of fuel.
RENSSELAER — Even as the Capital District Transportation Authority posts another record-breaking year of ridership gains, it still plans to continue slicing bus service.Ridership for the regional transit system grew by 11 percent in the fiscal year ended March 31, rising to nearly 15.2 million. That compares to an 8 percent increase the year before, to 13.8 million, which was the highest in at least 20 years.
Yet CDTA is poised to roll back another 10,600 hours of service on May 24 in the second of three phases planned this year. CDTA expects to reduce spending by some $2.2 million this year by cutting about 35,000 hours of service in all.
Saudi cuts oil drilling as demand slows
Top oil exporter Saudi Arabia plans to release 15 oil rigs by the end of the year as it reduces drilling activity with slowing global demand, oil industry sources in the kingdom said on Monday."We feel we have huge extra capacity," said one. "Why do we need to drill?"
Industry 'disappointed' with Norway round
Norway's oil and gas industry said today the latest oil and gas licensing round was "disappointing" after the government accepted bids for only about a fifth of the offshore acreage sought by companies.
THOMAS HOMER-DIXON AND JULIO FRIEDMANN: Clean coal? Go underground, Alberta
Alberta appears to be in a box - an energy box - that constrains policy options in every direction. The province's wealth is critically tied to exploitation of its vast hydrocarbon resources. But faced with declining reserves of conventional oil and natural gas, it has been forced to turn increasingly to the tar sands, which pack a huge carbon punch. And in a warming world, carbon is seen as a menace. The strategy could severely crimp Alberta's ability to sell energy at home and abroad, even make it a pariah.There is an alternative: coal.
It can be done but what is it we are doing?
"Oh Lord, make me carbon-neutral, but not yet.”If St Augustine were in charge of UK energy policy, he might utter such a prayer. The sheer scale and cost of putting Britain on the path towards zero carbon is only beginning to become apparent.
Carolyn Baker: Review of A Presidential Energy Policy by Mike Ruppert
This is probably the most important book review I've ever written because A Presidential Energy Policy is unquestionably the most crucial book for anyone aware of the collapse of civilization, which is well underway, to read and understand. It is second only to Mike's first masterpiece, Crossing The Rubicon: The Decline of The American Empire at The End of The Age of Oil (2004).
Population Growth And Its Dire Consequences For The USA (review of America on the Brink: The Next Added 100 Million Americans, by Frosty Wooldridge)
Solving the problem is basic to our future. It will of course be solved, since Mother Nature has a way of balancing imbalance, but if left as at present, the balancing will continue harshly in places like Darfur, but also here at home. Solutions seem submerged at present in the effects of our pressing economic problem not the causes of which population growth is a primary contributor. We obviously need to curb our present runaway importation of legal and illegal immigrants, as well as increase our foreign aid for family planning, but this book gives all readers the facts, underling the urgency of our plight.
Pakistan: Village electrification through solar energy
BALOCHISTAN is rich in renewable energy (RE) resources and the Alternative Energy Development Board (AEDB) has identified many RE projects in remote areas of the province.Though the AEDB says it is all set to launch the identified projects, the federal government has not provided funds so far this year for the projects. In the long-term, solar thermal power plant is considered as an economical and cost-effective energy source, since there is no fuel cost.
Mexico's symptoms signal a wider malaise
The deepening crisis led, inevitably, to a search for scapegoats. Those deemed responsible for the toxic waste were identified and 16 were rounded up and taken to be beaten and harangued in the public square.No, this is not what lies in store for those who presided over the decline and fall of the global banking industry but the fate of millers and bakers in Paris found guilty during the Great Famine of the early 14th century of adulterating flour with animal droppings. The French could stage a good demo even then.
The Parisian protests were not an isolated incident; they took place during the long disintegration of the early medieval economy, which started in the second half of the 13th century and culminated in the Black Death in the middle of the 14th century.
Responding to the triple crunch: Financial meltdown, climate change and dwindling energy supplies demand a newer world order
There is no sense of vision. The world faces not just the credit crunch, but a triple crunch – in financial meltdown, in energy supply and in intensifying climate change. The global peaking of oil is imminent, leading to a potentially cataclysmic rundown in supplies within perhaps 40 years, and of gas supplies within 100 years. Most scientists now believe that on present trends, global average temperatures will reach 3-4ºC higher than pre-industrial levels by 2100, twice the "safe" threshold, unleashing destruction of croplands, biodiversity and water supplies that could threaten the survival of a majority of the world's population. Yet the political response worldwide to these overwhelming challenges is glacial.
Shell, Hess, BP Profit From Storing Oil in Contango Trade
(Bloomberg) -- BP Plc, Royal Dutch Shell Plc and Hess Corp. are among oil companies whose first-quarter earnings were boosted by storing crude in tankers in anticipation of higher prices.Since at least November, oil traders have benefited from the so-called contango market, where crude contracts for delivery in the future are more expensive than near-term supply.
Consolidated Edison Says New York Summer Power Prices Will Fall
(Bloomberg) -- Consolidated Edison Inc., owner of New York City’s utility, said customers will pay less for electricity this summer than last year after natural-gas prices declined.The average New York City residential customer’s electricity bill may drop 7.6 percent to $96.27 a month, based on 300 kilowatt-hours used, said Michael Clendenin, a spokesman for the New York-based company, in a telephone interview.
Qatar to Export 500 Megawatts of Summer Power in Three Years
Bloomberg) -- Qatar, the world’s largest producer of liquefied natural gas, will be able to export 500 megawatts of electricity during the peak-demand summer months within three years, the nation’s energy minister said late yesterday.The exports will be possible after the country more than doubles its electric-generation capacity in the next two years, Abdullah bin al-Attiyah said in an interview at a conference in the capital, Doha.
Australia: Government attacked over 'anti-rail' report
CLAIMS in a NSW Government report that buses are a better public transport option for Northern NSW than putting trains back on the Murwillumbah-to-Casino track or extending the rail line to Coolangatta have been slammed by NSW Greens.
How it works: Volt’s beauty is flexibility
The hybrid powertrain will act as the bridge between today's conventional gasoline-powered cars and trucks and tomorrow's fuel cell-powered transportation. This link is important for a couple of reasons - the use of electricity reduces the world's dependence on fossil fuels and it cuts emissions, most notably greenhouse gases. Depending upon the hybrid vehicle in question and the manner in which it is driven, potential fuel savings range between two and 3.25 litres per 100 kilometres. So, what's the hang-up? The problem is that the word "hybrid" is largely misunderstood.
Egypt Aims to Cut Wheat Deficit to 25 Percent by 2012
“Our wheat self-sufficiency is at 56 percent,” said Saad Nassar, an adviser to Agriculture Minister Amin Abaza, in an interview in Cairo today. “We are adopting several strategies to raise it to 75 percent in three years.”Egypt, the Arab world’s most-populous nation, aims to improve wheat productivity per feddan (1.03 acres) to 24 ardabs from 18 ardabs now, he said. The country will increase the area devoted to wheat cultivation and reduce waste created during the delivery process, Nassar said. It will also end a rural practice of using wheat as feedstock for domestic animals and birds.
U.S. Energy Independence? Get Real, Oil Execs Say in Survey
(Bloomberg) -- Most oil-industry executives scoff at the idea that the U.S. can wean itself off foreign crude in the next couple of decades, a survey showed.Only 16 percent of oil and natural-gas executives said that by 2030 the U.S. will be able to depend solely on its own energy supplies, according to a survey by KPMG LLP’s Global Energy Institute. A majority said it will be after 2015 before it’s “viable” to mass-produce alternative energy.
“The executives’ perceptions of energy independence mirror their views on the viability of alternatives in the near-term,” Bill Kimble, executive director of the institute, said in a statement. KPMG surveyed 382 U.S. financial executives in the oil and gas business last month.
OPEC’s Oil Output Fell 0.3% in April, Survey Shows
(Bloomberg) -- The Organization of Petroleum Exporting Countries cut oil output by 0.3 percent in April as Mideast members moved closer to production targets agreed to last year, a Bloomberg News survey showed.Oil output averaged 27.58 million barrels a day last month, down 75,000 from March, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 25.255 million barrels a day, 410,000 more than their target of 24.845 million.
Crude Oil Declines in New York After Reaching Five-Week High
Bloomberg) -- Crude oil fell in New York, after closing at a five-week high at the end of last week.Crude oil for June delivery fell 55 cents, or 1 percent, to $52.65 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 12:24 p.m. London time.
China to Shut Small Oil Refineries, Metal Smelters
(Bloomberg) -- China, the world’s second-biggest energy consumer, plans to shut more small-scale oil refineries and outdated metal smelters by 2011 to boost efficiency and lower pollution.
Amazon Crude: Ecuador's Fight With Chevron
(CBS) Chevron is America's third largest company behind ExxonMobil and WalMart. One way it became that big was by buying Texaco in 2001. Now, that purchase of Texaco has pulled Chevron into a titanic struggle in the Amazon.The people who live in a remote region of Ecuador are suing Chevron, saying reckless oil exploration poisoned the most important rain forest on earth.
Borrowers to Sell $6.5 Billion of Company Bonds as Yields Fall
(Bloomberg) -- China Petroleum Corp., the country’s biggest oil refiner, and Bahrain are among borrowers with plans to sell bonds this week after yields on investment-grade debt fell to the lowest level in seven months relative to benchmark rates.
Plant managers face prison for 2002 oil spill
From January 2001 to June 2002, however, employees routinely bypassed the facility’s treatment system in order to discharge nearly 13 million gallons of untreated liquid waste directly into the sanitary sewer system.Additional evidence showed that the company’s management staff took steps to conceal the lack of treatment from regulatory officials by making false statements and by tampering with legally required compliance samples.
Federal officials were tipped off when nearly 70,000 gallons of used industrial oil was dumped into a Dearborn storm sewer in April 2002. From there, it flowed into the Rouge River, the Detroit River and Lake Erie.
The dumping affected 17 miles of shoreline and cost more than $4 million to clean up.
U.S. students try life on Qatar campuses
Qatar — a tiny, oil-rich Persian Gulf nation — is offering substantial financial aid to most foreign students who need it — often chopping tuition to a quarter of what it costs at home, according to the government.Qatar has struggled to diversify its economy away from oil and gas revenue. It sees the university sponsorships as a way to build its academic credentials — locals also attend classes — and bolster its workforce. The government offers foreign students the option of repaying each year of study with a year of work in Qatar.
Traffic set to slow as stimulus gears up
Drivers across the country will have to contend with far more roadwork — and all the frustration that goes with it — as states prepare to launch a spate of new highway projects this summer. The work is part of President Obama's $787 billion economic stimulus package and is meant to create jobs by repairing roads and bridges."People will see more construction. There's no question about it," says Brian Blanchard, the chief engineer for Florida's Department of Transportation. That work will begin at the same time more cars will likely be vying to squeeze onto the roads, because gas prices are expected to be lower this summer than they were last year, AAA spokesman Troy Green says.
Food banks see more who need and more who give
The recession has caused more people to seek help at food banks, but it's also prompted an outpouring of generosity."We're up in terms of food and funds," says Ross Fraser, spokesman for Feeding America, the nation's largest network of food banks. He says food donations are up 20% and cash donations are up 46% from a year earlier.
Vacant foreclosed homes spawn blight, crime
Officer Mark Castillo pulled up to a vacant foreclosure near International Boulevard that was surrounded by mounds of garbage. After checking on the house, he went to the backyard and grasped the boards nailed in front of the garage door. The door readily opened, and he recoiled from the stench of urine and filth. Inside, an elderly man huddled on a makeshift bed surrounded by fast-food wrappers, matches and old clothes."I know I can't be here," the man, Alfonso Granera, 71, told Castillo. He agreed to meet the officer in a couple of hours for a ride to a shelter.
"These places quickly become a breeding ground for all kinds of crime," Castillo said, pointing out the crawl spaces under the house, which he said criminals use for illegal stashes. "Drug crews run a corner, they use vacant properties to hide drugs and weapons."
Annie Russell lives alone but not in solitude.While she was laid up for almost nine months by an injured knee, neighbors checked in on her regularly. They brought her ice packs, fetched water and did her grocery shopping.
Twice a week year-round, everyone in Russell's community is assured dinner with friends in the large common house of Silver Sage Village in Boulder, Colo. It's a potluck of sorts. Residents can cook the meal together in a communal gourmet kitchen.
"If somebody just wants a place to live and doesn't want to commune with their neighbors, this is not for them," says Russell, 68.
Projects such as Silver Sage are called co-housing. European-inspired housing built around a common area and a social compact that all residents agree to, co-housing has existed on a small scale in the USA for years. Now, the concept is coming to senior housing, a trend supported by advocates who favor independent living for the old.
BLM to get $300 million for stimulus projects
LAS VEGAS – The Interior Department is sending more than $300 million in federal stimulus money to the Bureau of Land Management to update its facilities and jump-start renewable energy projects across the country, Interior Secretary Ken Salazar announced Saturday.
China triples wind power capacity goal: report
BEIJING (AFP) – China has more than tripled its target for wind power capacity to 100 gigawatts by 2020, likely making it the world's fastest growing market for wind energy technology, state press said.China is aiming for an annual wind power growth rate of 20 percent for the foreseeable future, Feng Junshi, an official with the National Energy Administration, told a Beijing conference, according to the China Daily.
ADB head: Asia must tackle poverty, climate change
BALI, Indonesia (AP) -- Asia must do more to cut poverty and take the lead in fighting global warming, the Asian Development Bank president said Monday, as the region emerges from the economic crisis with more clout on the world stage.The global turmoil suggests the era of rich Western nations having unlimited appetite for Asia's exports "has passed," Haruhiko Kuroda told the bank's annual meeting in Bali, Indonesia. That puts the onus on the region's governments to boost their own domestic economies, he said.
Australia Delays Carbon Trading Because of Economy
(Bloomberg) -- Australia delayed plans to trade carbon-dioxide emissions by a year to 2011, blaming the economy, while remaining open to reducing greenhouse gases under an international agreement.The decision was made amid signs the proposal will detract from growth as the nation’s economy heads into its first recession for 17 years.
Bolivia's Chacaltaya glacier is gone: Bolivia's Chacaltaya, A Tourist Favorite, Has Melted Away
CHACALTAYA, Bolivia -- If anyone needs a reminder of the on-the-ground impacts of global climate change, come to the Andes mountains in Bolivia. At 17,388 feet above sea level, Chacaltaya, an 18,000 year-old glacier that delighted thousands of visitors for decades, is gone, completely melted away as of some sad, undetermined moment early this year.''Chacaltaya has disappeared. It no longer exists,'' said Dr. Edson Ramirez, head of an international team of scientists that has studied the glacier since 1991.
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http://www.theglobeandmail.com/servlet/story/RTGAM.20090504.wroilpatch04...
Mr. Potter is completely wrong in his analysis. Nature just published a few papers basically saying that we can only use about a quarter of our fossil fuel reserves (or half a trillion tons of carbon). More than that will make a temperature increase of more than 2°C very likely (http://www.nature.com/nature/journal/v458/n7242/full/nature08019.htm).
So, those who would like to sink their money in tar sands need to think again. More and more countries will follow the Californian lead of limiting the carbon intensity of their fuels. Oil sands, Alberta, and the investors will be the losers, because tar sands are just about the worst for carbon intensity of all fuels (apart from destroying the local environment).
Actually, the longer it takes to restart enthusiasm for tar sands, the better for the investor, because they will get the message in time.
(P.S. automatically replacing "oil" in oil sands by "tar", which it is.)
States and cities borrow big
"governments — federal, state and local — have been a magnet for investors seeking safe investments. "
This is the reaction I would expect under today's economic circumstances.
I wonder what "good ratings" are and how long they will last.
All those "assets" they build with those bonds - big new town halls, public safety buildings, schools and the like - are going to turn into heavy liabilities. Anything that takes a lot to maintain. Property taxes will go through the roof.
cfm in Gray, ME
Some more numbers for Brazil
http://tonto.eia.doe.gov/country/country_time_series.cfm?fips=BR#prim
One of my current pet peeves is that Brazill, a net oil importer as of 2008, was widely described in the MSM as "Taking market share away from OPEC." If we total net oil imports, net natural gas imports and net coal imports, on an oil equivalent basis it looks like Brazill imported the energy equivalent of about 460,000 bpd in 2007, from fossil fuel sources (EIA).
Even if we look at total primary energy production and consumption, which presumably picks up the biofuels component, their 2006 consumption was 9.6 quadrillion btu's against production of 8.0. If we extrapolate recent trends, it would take Brazil about 20 years to become fully energy independent on a primary energy consumption basis.
So true WT. I saw nothing in the MSM about Brazil efforts to ramp up their LNG import capabilities. A couple of months ago they took delivery of the first mobil offshore LNG unloading vessel. I suspect part of the plan is to use imported LNG to allow greater oil imports in the future. But no doubt a biiger component of the plan is to use their energy resources to grow their own economy. It's easy to see a parallel with the North Sea countries that used that play to support their own needs first and export what was left over.
On a primary energy consumption basis, it appears that Brazil was (net) importing the energy equivalent of about 730,000 bpd of oil equivalent in 2006. This is a prime example of how oblivious the MSM, with some notable exceptions like Neil King at the WSJ, are about net energy export issues.
Jeff, this link was posted a few days ago I think. But the point I wish to make here is that Brazil's Tupi Oil Field is being touted as proving all Peak Oil theories wrong:
Time to buy oil service stocks: Part 1
So not to worry, the Tupi has proved the Peak Oil theory a crock....Right?
Ron P.
The POD People--Party On Dudes!
Loved this quote from the referenced link:
Nuff said.
On a dreary Monday morning it was heartening to see this:
Food banks see more who need and more who give
It's a reminder that people can be generous and have empathy for the plight of their unknown neighbors.
This clip is from that USA Today article:
Best hopes for even more generousity...
Which reminds me..."Stamp Out Hunger" day is this Saturday. You can leave nonperishable food in a bag by your mailbox, and your mail carrier will deliver it to a local food pantry. (No glass containers, please.)
Was mulling over just how many stories you've linked to here in your career, Leanan. Your first batch of contributions to Drumbeat was on June 14, 2006 - curiously enough, including news about Al Gore mentioning peak oil, which he also did recently - and reticently, in the view of some here - that was 1055 days ago. Lord knows how many days off or the average number of posts you've made - let's say 925 days total and 20 stories average - ack, 18,500 news items? Plus commenting here and posting/commenting at peakoil.com. How do you do it?!?!?
Great that you're up to the task, any way you cut it. Always get the willies when Gail takes over! My hat's off:
Gail does a crack job of filling in as well, too, I should mention.
One question - what happened to your Pteranodon avatar at peakoil.com? Always hungered for some raw fish when you'd post there...
I've been meaning to fix that avatar. PeakOil.com did some massive server upgrades, that resulted in a lot of headaches. The avatars went away. I have to add it again, but I still haven't figured out how to edit my profile in the new system.
Ah, go to the sidebar and select User Panel>Edit Profile>Edit Avatar. You have to do a bit of wandering around to change settings now, they do have some nifty new features, like a profanity filter. Server's nice and stable now, too, unlike poor Alex Jones's...
CBS 60 Minutes continues their somewhat topic-relevant streak...
Amazon Crude - Scott Pelley Reports On A Multi-Billion Dollar Lawsuit Over Oil Drilling Pollution
I see only losers here...
Pete
Chevron tells me that 60 Minutes is way off base:
'60 Minutes' Promotes $27-Billion Leftist 'Fraud' Efforts Against Chevron
The current plan is that I will be making a trip to Ecuador to visit the site related to the litigation in early June. I don't know the exact dates yet.
It's just a matter of definition...
‘Great Recession’ Will Redefine Full Employment as Jobs Vanish
Is there any redeeming commentary in this article?
Pete
TPM, (Talking Points Memo), discusses Peak Oil, TOD and Gail the Actuary in this piece posted yesterday:
Limits to Collapse
TPM is a liberal blog that was very popular during the last presidential campaign. It was often quoted on MSNBC. It still has a very wide following.
This article predicts that Peak Oil will not have all that dramatic effect. I have predicted for some time that the effects will indeed be very dramatic, but take much longer to manifest itself than most people expect. The collapse will come but not for several more years.
Please be patient, disaster is just around the corner. :-(
Ron P.
Ron -- I guess the simplist analogy is the guy dying of lung cancer getting hit by a car on the way to chemo. Suddenly the cancer isn't his primary problem. And, IMO, we are seeing much of the doom aspects of PO today. It might have been caused by the economic downturn but what we see today is the kind of collapse I've expected. And when the guy recovers from his hit-and-run he'll be back to chemo waiting to see what kills him first: the cure or the cancer.
Left or Right, a LOT of people are really hanging onto the idea that the 'recovery' will happen.. HAS to happen. And that it happens because the system is built that way.. not that we have to get involved now and create a different kind of recovery than the World Market Engineers even have a word for.
I'm watching Democracy Now! which is celebrating Pete Seeger's 90th birthday.. and when asked what he thinks of the party they threw him, he says. 'Normally, I'm against big things. I think the world's going to be saved by millions of small things.. too many things can go wrong when they get big.'
Happy Birthday, Pete!
http://www.democracynow.org/
(Springsteen, at the Inaugural Concert, I think said this about Seeger.. “At 90, he remains a stealth dagger through the heart of our country’s illusions about itself.”)
How timely...
The Bottom
Re: Oil executives knock energy independence. Up top.
I'm beginning to think one's view on energy independence is closely related to one's view of life in general. Oil executives probably have worked for someone else most or all of their careers. They got where there are by towing the company line and promoting the product.
They probably have never seriously thought of striking out on their own knowing that the odds are that they would indeed strike out. They are a timid bunch. The risks they take are with other peoples money for the most part. And their mind set is to be cautious and that has got them to their high positions.
Dependence on the corporation has given them security. They view independence as insecurity. They want to be "slaves" to others. They do not see the rewards of being independent. All they see is the risk and the possibility of failure. They do not think about what will happen to the country as a whole as the supply of oil drops year after year with few/no options except imported oil.
Their mind set is safety in the status quo and short term thinking.
I doubt that any of them would seriously consider quiting their job and buying a farm for example and living outside the work place environment. They think those who do are not "real" and foolish.
Energy dependence is a non-goal. It is a non-policy that puts the United States in a weak position with a poor outlook for the future. It is victory for the status quo. It is sad that the leaders of a major industry have so little foresight. Will American petroleum executives follow the auto executives into oblivion? Looks like it.
X -- I'm not sure if I understand your position. You believe the US economy can survive if we stopped importing oil? Perhaps you're thinking in the very long term. Granted there has been some positive movements in the area of alternatives since the price shock last year. But we're many decades (if ever) from not being dependent upon oil imports. Specifically, all the efforts to switch to renewable resource will require a huge expendature of our current energy mix.
As far as the industry not understanding PO you need to seperate the statements of the CEO's of public oil companies from what they say privately. Such surveys are done just to feed the MSM hype with industry leaders more then ready to toss them red meat. Anything to help support the stock price. The industry has been keenly aware of PO for almost 20 years. We just never called it that. For us it has been the "reserve replacement issue. Interesting how you critisize them for not "buying a farm and living outside the work place". I know quit a few who have done just that in one form or another. You need to remember that more then half the oil/NG in the US is produced by small prinvately owned oil companies. We know the future better then most and have been anticipating it for some time. The biggest bump in the road with regards to these plans is the current economic melt down. But the long term view is still there. And we're all preparing for it privately.
Russian statistics for Q1 2009 was released.
Impressive data about natural gas... Where is it published?
http://www.economy.gov.ru/ - Ministry of Economic Development
English version of the site is not updated regularly.
A lot of the decline in Russian gas production is widely attributed to a decline in European demand. Anyone have numbers for other gas exporters supplying gas to Europe? And is there a price differential?
The EIA doesn't have the 2008 data out yet, but their 2007 natural gas changes relative to 2006 were as follows:
Production: -0.4%/year
Consumption: +0.9%/year
Net Exports: -3.9%/year
http://tonto.eia.doe.gov/country/country_time_series.cfm?fips=RS#ng
Russia's consumption, as a percentage of production, is so high that small changes in production produce huge changes in net exports. For example, based on the 2007 numbers, a -5%/year decline rate in production, with no increase in consumption, would result in a -20%/year decline rate in net exports.
http://uk.reuters.com/article/usTopNews/idUKTRE5431R520090504?pageNumber...
Forget Peak Oil. Forget H1N1. Forget AGW. Forget global financial crisis. Those are trivia. This is the game changer:
It's the fossilized remains of a pliosaur.
The History Channel had a documentary about it called Predator X. Which was pretty interesting.
But a game-changer? 150 million years ago, maybe.
Boy, its tough to get you to crack a smile.
No, it isn't. You just have to be funny.
Ouch.
The May solar price survey was just released today and showed further drops in solar module prices, with Europe hitting a new record low.
We still have a long way to go for grid parity, but it's nice to see the progress.
Onwards,
Dennis
Are those really PV getting cheaper due to MFG improvements, or is it as much a function of a sick economy? Is that price just going to rebound if Oil and the Stock Market regrows?
I'm all for solar PV as ONE of the BB's we invest well into.. but to have people waiting for a benchmark like 'Grid Parity' is possibly a fantasy that may never play out.
I'd be more willing to bet that parity will arrive when the Utility Price comes UP to meet the costs of Solar.
Get em' while they're cheap! (You just have to see that 'cheapness' in your crystal ball of what tomorrow's energy and money picture will look like)
Jokuhl-
You ask a great question.
I see most of the current price drop as supply having finally caught up with demand. As the price of polysilicon falls, the price of solar modules can sustainably drop. And solar manufacturing costs are falling - as I posted about last week at www.SETenergy.org re First Solar's costs falling 5% in the 1st qtr.
Will there be upward price pressure for solar once energy prices rise again?
I think so - but I think it will lead mostly to the delay of further price cuts. 2005-08 is an example: solar prices stopped falling in price during that time and rather increased ~10-15% even though supply more than tripled (not a bad rise in price compared to other fossil fuel prices that increased 50-100%). Now that supply is catching up, I think we will see new record low prices for solar in late 2009-2010 even if fossil fuel prices start on an upward path again.
It's gonna be an interesting ride ahead-
Dennis
Thanks for the details Dennis.
I do hope you're right. I really do want to get our region to invest in Personal and Community owned power backup. (or Supplemental Generation, as they fill both needs)
Bob
Dennis, As we discussed in this sub thread a few days ago, could the emergence of major thin film producers be influencing the market?
You only mention First Solar as a thin film play but, there's Nanosolar, a privately held company that has huge manufacturing capacity. I remember reading some time back that their single plant would produce more MW of solar panels than the rest of the US (World?) put together! If one player can produce more capacity than all the rest of the players put together at a cost less than 1/3 of their competitors, I'd say that's a disruptive technology! There are other thin film innovations that are yet to come to market. Surely, at some point, we should see a shift away from the older technology towards the newer, lower cost technology?
As can be expected, in any market, the older players using old technology that lack access to the new technology are likely to fall by the wayside as may be the prognosis for Evergreen. How many traditional solar PV panel manufacturers are doing anywhere near as well as First Solar?
Alan from the islands
To the editors - Gail Khebab etc
this is OT and goes back to Khebab's Feb 25 deconstruction of the IEA - really excellent work - but he made a telling comment:
"The trouble seems to come from thousands of small-large and small fields that are composing 30% of the post-peak resource base (Figure 12). This category decline at 10+%, twice as fast as the Super-Giant/Giant category. Unfortunately, it is impossible to keep track of new projects in this category and I don`t know how much supply we can expect."
This, to me, sounds like a comment someone could make about the dawning and evolving UNG industry. That is, prior to the rise of Unconventional NG we had fairly clear, and bleak forcasts for NG
Now, with the ability to exploit small fields, the total NG industry and forcast has changed.
Matt Simmons claims that 42% of all conventional oil comes from fields of a few thousand barrels a day. There are (i think he said) 70,000 such fields.
this compares to the 580 fields that the IEA studied, that make up 58% of the total supply
I am suggesting we do not understand the economics of such small oil fields, the technology used, or maybe even the global geology. This the "scrap" below the radar of large companies, and top analysts.
These small fields are not reported on in the megaprojects database.
Could there be an analogy between UNG and conventional oil, in that the availability and dispersion of such fields may mean that the supply dynamics are different from what we think?
I'm throwing this out there because I don't know how to model it, but the percentage of small fields is very significant. Small fields have a large impact on supply and may be a factor in the difficulty everyone seems to be having with supply forcasts
and from Memmel lower down
"Exactly the small fields have complex economics if you will. For example under the current economic conditions small offshore fields probably won't be redeveloped with secondary gas/water injection once primary production declines. Stripper wells have their on economic pattern and contribute 2mbd to US production for example. In many cases decisions to not continue production or move to more extreme extraction measures in many fields means they won't be developed again in the near future. As and example a lot of the oil production in Texas is from fields that where capped back in the 1980's and not developed again until thirty years later.
I estimated using the WAG method :) that about 15% of the worlds oil production was in this high risk category.
This fits well with Kehbab's estimate of 30% of the worlds oil production coming from small fields. Some of the high risk oil is in larger fields on the edge of steeper declines so given that 15% seems to be a very good ballpark estimate.
The only positive is that we are probably not doing a very good job of counting the contribution of smaller fields to the worlds oil supply in the first places I'd not be surprised if we are not underestimating the contribution of these fields by several mbd say 2mbd or so. So we could very well not even see the decline in the official numbers for some time. The WAG method indicated we would enter steep decline in 2008 this is in rough agreement with Kehbab's more realistic results but I think both approaches suffer from using the official totals since they should start from some "real" production level thats probably higher then the official numbers or better simply outside of the official numbers.
What this means is official production numbers will probably be high for a while even though real production is falling rapidly. In fact you get a sort of strange result in that as smaller production fails more oil will be sourced from monitored production and storage resulting in even higher initial estimates of both the oil supply and the amount in storage. Whats happening is some small tank storage associated with some small fields is drained as the field declines and its being replaced with "official" storage thats actually counted coming from larger producers.
I wonder if Kehbab can come up with a guesstimate of the amount of oil thats both in this high risk group and also not in the official estimates this is oil we need to adjust for.
Also of course for the same reason we probably have consistently underestimated the contribution of smaller fields so we probably also underestimate how many are approaching steep decline. All of this will serve to make the initial fall from the decline of small fields difficult to predict since I believe that we are missing enough data to make the initial error on the same order of magnitude as the decline rate. I've got no idea if the various potential sources of error tend to cancel or not. So the big question is is there any systematic bias thats skewing results for small fields.
And fantastic work Kehbab ! I've been concerned about this for some time its great to see some real work done on the problem."
and Rockman:
"I don't know gogh. I don't follow overseas activity even though I may be heading over "there" later this year. Just a WAG but I can imagine the numbers are understated to a degree. Those operations aren't as transparent as they are in N. America. But as far as US activity, as someone else mentioned, we are the land of small operators. Most don't realize that the small US operators collectively produce more then all the major oils combined. Exxon is big but last ime i saw the numbers they owned less then 5% of US reserves."
OK sorry I'll stop with the reposting of comments, but to me this seems like a very significant issue.
It throws many forcasts and projections into doubt
Here are the graphs from Simmons's 2000 paper THE WORLD'S GIANT OILFIELDS:
Regarding microfields this is certainly the case in the US that they decline gently, but not really elsewhere: EIA data on Distribution and Production of Oil & Gas Wells. The huge number of stripper wells has cushioned our decline over the years. Perhaps this is what you're getting at? It hasn't applied to other nations, many of which have gone into serious decline, owing to reliance on offshore production mostly.
I recall one very prominent/controversial poster stating something along these lines a few years back.
&
This casts a whole new light on the drive to focus primarily on the 'giant' field production and planned projects, doesn't it?
Regarding large and small fields, and the impact on future production, my impression has always been that if the mixture of field sizes is likely to make the downside quite steep. This happens, because when the big wells finally reach decline, and the little fields will be declining as well. We now have Cantarell in decline. It won't belong before some of the other big ones are in decline as well. Small wells won't be able to offset these big declines. So this steep decline is the major effect.
I think the stripper type wells will add kind of a long flat tail to what is produced--so there will be a steep decline, followed by low production, at 10% to 20% of highest production.
I think of stripper wells as being almost like Enhanced Oil Recovery. After the "easy oil" comes out (under good pressure, and water cut not too high), It sometimes makes economic sense to pump out the rest that slowly dribbles out. In the US, we have a lot of very old wells, on land (where costs of stripper wells are fairly cheap), so it makes sense to keep pumping out as long as we can get it out. This makes a very long tail of low production using what we thing of as stripper wells.
If oil is offshore, it is expensive to maintain wells, producers take what they can get fairly easily, then leave. Stripper wells will be used much less in these locations. This is one reason the decline offshore is much steeper than onshore.
Heavy oil tends to always act like oil from stripper wells. It gives a very long flat production curve. This oil was generally passed over, as being too slow and too expensive to extract. If it is used now, it will also tend to add to the long flat tail.
For what it is worth, this is a link to an EIA exhibit showing the US distribution of wells by the amount produced. The same kind of information is available by state.
Gail -- the analogy of stripper wells to EOR is good. I don't remember if I made this point earlier regarding US marginal production vs. foreign production. Even though the data on foreign is scant the big difference is the presence of independent operators in the US. For the most part they don't exist in the lands of NOC. NOC's can only be efficient at a larger scale. Much of the US stripper production is operated by folks who are essentially paying themselves a salary to operate their fields. If they had to hire someone to handle the work many of those fields would become instantly non-commercial. Most folks here don't realize how unique the US is when it comes to the oil industry. Almost no where else in the world are the minerals rights owned by the citizens and not the gov't. Given the inefficiency of any gov't to operate in a free market, matters are much worse when it comes to small scale operations. I believe it was Dude who mentioned how lucky we are to have the small operators. They are the ones who are providing what little margin we have today in this country...not Big Oil. It's analogous to the family farms vs. corporate farming.
Concerning the article up top "How the crisis is changing you"
I am so tired of these articles that interview Bob and Julie making lunches for themselves and conclude that we are changing consumption patterns. So I latched on to the one study quoted, a January 2009 online study from Northwestern Mutual, which they call the "Reality Report". They interviewed 1000 volunteers aged 25 and over, and came up with conclusions that are suspect if only because they use words like "increasingly" and make strange generalizations.
First of all there is no previous study with that methodology for them to compare to, so how do they know whether any of the numbers have changed?? Secondly, I am not reassured that they use internal controls that make any sense. For example, 39% of respondents say anyone can achieve their goals if they put their mind to it, but only 27% strongly believe that they themselves will achieve what they want in life. Though 88% feel that spending quality time with family fits their definition of success, and only 53% feel they are being a very good parent, only 9% have parenting as their top priority goal. The most common top priority goal involved money (about 30% of respondents).
They make a statement that "most do not believe that money will bring them happiness" when in fact 71% said that success included being financially prepared for the future, something that 10% felt they were doing "very well".
I think that what people "expect" to be doing is a poor predictor of what indeed will happen. I see 42% "expect" to save more money next year, and 54% "expect" to SPEND as much or more. We don't know how many "expect" to be earning more, but revolving debt was increasing until recently (http://www.chrismartenson.com/blog/other-shoe-drop-consumer-credit-cards...). Maybe foreclosures and bankruptcies are helping raise our newfound savings rate of 5%.
In other words, I think people are spending less only when they can't, not because they suddenly get it that consumerism is killing the planet, or because they are becoming more virtuous and touchy-feely realizing that quality family time is all that matters in the end. In other words, if anything, the new attitudes are just deep enough to be used in the service of the next round of advertising ("buy a bigger car so you can harmoniously drive as a whole family to the mall").
I don't see the contradiction in this. You could interpret "being financially prepared" as simply making lots of money and keep spending BAU, but frugal living and staying debt-free is an equally valid way to look at financial health.
Staying debt-free is good advice that I often hear on TOD and The Automatic Earth. Debt is obligation to the old financial economy, and any way to decouple your life from the financial economy is a good thing.
I guess this is what I saw: the study was the only instance of "polling" a large number of people (instead of just finding a couple of anecdotes involving people who reinforce the premise of the CNN article).
The article's premise, that people are spending less and valuing family more was only supported by the fact that most people in the study disagreed with the idea that "money brings you happiness", and that most of them agreed that their definition of success involves close relationship with family. I guess the level of preoccupation with "being financially prepared for the future" argues that people could be saving more and spending less, but there is not comparison with a point in the past to support that argument.
Finally the conclusion reached by westexas and ELP, and also John Michael Greer in The Long Descent is that being prepared for the future is most likely to involve community ties. This idea is not on the horizon for a study like this, where "preparation" means saving money, and the 88% who feel that they are not very much involved with community activities do not conceive of prioritizing this in the next few months. Instead the priorities were widely scattered, 10% here and 12% there centering around financial issues, and others involving getting more education, traveling more, etc... 4% said that they would like to become a "better person".
I understand what you're saying. The study was vaguely worded, but even so, you don't need a scientific study to see the stark contrast to the "Cash, Money, Cars" mentality of the bubble years.
The idea behind debt-free is not so much about saving money for the future as it is about freeing yourself from financial obligations. When I told my friends about being debt-free, they started joking about credit card collector posses coming to loot your house. Maybe that won't be so far from real life.
In other words, I think people are spending less only when they can't, not because they suddenly get it that consumerism is killing the planet, or because they are becoming more virtuous and touchy-feely realizing that quality family time is all that matters in the end.
I think you are right in this observation: demand is responding to availability, buying to money supply--not the other way around. Those with the available money continue life as usual.
This is why I don't support any calls for people to change their ways and become more virtuous, because they will not. If you want change, change the environment: if there is no (or increasingly expensive) oil, then I will not (or cannot) buy any. So long as there is availability and money, so long will people consume.
Peak oil is back ...as posted in the WSJ today, according to a Raymond James analyst.
http://blogs.wsj.com/environmentalcapital/2009/05/04/peak-oil-global-oil...
Now there's something to chew on -- a main-stream brokerage house saying that peak-oil is now in the rear-view mirror. I wonder how/if the Saudis are going to respond to this? Are they going to say that peak-oil is just a bunch of BS or are they simply going to ride along with the upward oil prices?
Hey, this is big. Thanks for the link Jim. And I notice Leanan now has it up top. Don't know who was first but again, this is big. Raymond James is one of the few banking and investment services that is not in any real trouble. The fact that Raymond James said this and the fact that it was published in the Wall Street Journal should carry a lot of weight.
One caveat, non-OPEC peaked in 2004. The highest quarter for non-OPEC was the fourth quarter of 2004, just 4,000 bp/d higher than the first quarter of 2007. 2004 was also the highest year for non-OPEC production. And in case anyone is interested, the highest month for non-OPEC production was December of 2003. This is using EIA data and includes Indonesia as a non-OPEC producer.
Ron P.
Here is a bit more detail about the Raymond James report http://www.ogj.com/display_article/360983/7/ARTCL/none/none/MARKET-WATCH...
Hothgor is running wild in the comments section..
Thanks for your note in there, Paal.
There was some debate back in the "old days" as to whether Hothgor is a paid troll. I sure hope that he is paid. If he is not on someone's payroll, that is one unbalanced dude.
In any case, my favorite criticism came from (apparently) someone else. I was accused of "Personally destroying the Peak Oil movement," and compared to Saddam Hussein. I was somewhat disappointed in the latter characterization. I had hoped that he would go all the way and compare me to Adolph Hitler.
Sorry, I guess I was away from class that day. What was the justification for you being labeled Anti Peak Oil? The ELM doesn't exactly conjure up visions of Utopia.
Just curious on the history.
Cheers,
I think that because I supported Deffeyes' prediction of a near term peak, and because I supported Simmons' work regarding a near term Saudi peak, I was personally responsible for destroying the Peak Oil movement, with the premise presumably being that when the peaks didn't arrive as scheduled, the Peak Oil Movement would be destroyed, with yours truly as the destroyer (wan't that a line in "Ghostbusters?"). Who knew I wielded such power?
Sigh, the old "you don't get the Month and Date right, so the entire premise is false" argument.
I think Ken Hovind and Ted Haggard have used that one.
Thanks
Holy cow, that dude really is unhinged!
Well, at least you get characterized as someone of substance. I just get told I'm not funny.
Cheers!
I thought you were funny. And the response rather harsh, but likely unintentionally so. She strikes me as not intentionally cruel, but a bit of Spock type.
lilith
:-)
I still have my lamprey jpg ready if Hothgor ever returns, although I think he showed up under different monikers for awhile.
A new attack on oil interests in Iraq
There does not seem to be a lot of damage, but this is the second attack in few days on oil interests or facilities in Iraq.
Regards,
Nawar
BMI: Norway's oil production to drop by 28.8% by 2018
Regards,
Nawar
Here is what Khebab is forecasting for Norway's net oil exports (Initial projected 10 year net export decline rate shown):
The EIA shows them down to about 2.25 mbpd in 2008. It looks like he is showing a middle case scenario of about 0.5 mbpd for 2018.
Khebab makes sense to me, and here is another production/exploration disappointment for Norway:
Regards,
Nawar
The only good news here is that the oil companies are seemingly turning their backs on the reckless Norwegian Gmt, sending a strong signal : "we don't believe there is much oil left out there ...!"
Regarding the BMI-comment just above here:
(Norwegian production will be )..... 1.82 million b/d within 10 years, said analyst BMI.Norway lost 1,2 mb/d in 7 years and during the next 10 years they will only lose another 0,4 mb/d (??!!)
What drug is he on ? Where does ideas like this come from ? Is OG-journal a serious journal? Obviously WT/Khebab are much closer to the truth at 0.5 mb/d, although I feel this is on the lower side.
Norway's consumption is pretty low, so it's not a big difference, but the chart shown is for actual and projected net oil exports. Here is the outlook for production & consumption:
http://www.energybulletin.net/image/uploads/38948/image015.png
WT I feel your curve-forcasts are too symmetrical , almost mirrored from the peak-point. I'd expect the post-peak portion of the curve to stretch a little more like this , making the 2018 production volume larger than you imply. ...
Most prognistication-curves show this shape, which I also think will be the case.
Given the high proportion of Norwegian production that is from offshore fields I don't think there will be a long tail and WT's projections may therefore be more correct. See my post below for the logic.
Cheers!
I follow your general sentiment here BOP for offshore production, but WT/Khebab give Norway NO tail at all. After all they still find oil out there ...although in smaller and smaller fields and pockets and further there are still great hopes (fata morganas some would say...) for new finds in certain northern stretches of water - no permits yet given - that may cancel WTs very grim forecast.
The Norwegian Petroleum Directorate has a completely different take on this .... they see oil "for ever and ever" meanwhile our politicians have their eyes wide-shut.
Source in english - here
Just have a look at their "FleXibilitY" only 2 years from now in 2011. "FleXibilitY" = 1 mb/d , jezzz, I think I just give WT/Khebab the benefit of doubt here ... 0,5 mb/d it is .
I frequently quote the Texas Stage Geologist, who in 2005 talked about the possibility of Texas matching its 1972 peak production rate, or at least significantly increasing production. BTW, I consulted with Khebab (Samuel Foucher) on the modeling, but he did the heavy lifting.
GoM oil production forecast to reach record high b 2013
I guess deeper wells, deeper decline rates!..
Regards,
Nawar
and for an alternative outlook :
http://www.theoildrum.com/node/5081
there was a detailed analysis posted on here within the last few days by simmons on the deepwater gom but i can't find it right now.
Whether or not this is true, the likely, occasional big storms in the GOM will create some amount of volatility with those production numbers, no?
Nawar -- It's not so much the depth of the wells that produces the steep declines. The reservoirs tend to be rather high quality and thus flow at very good rates. Add to that the policy of using production techniques that favor rate over ultimate recovery. That's always the trade off. The front end cost of DW projects is so high that max rate is always deemed more important then recover factor. It's the only way to generate acceptable rates of return on the investment. Then you have to consider the high operating costs in DW. That also shortens field life. One last negative: there are lifting techniques that would sustain such reservoirs if they were onshore, but the DW environment doesn't allow their application.
Rockman:
You bring up a point that I don't think has been factored into any of the modeling I have seen on TOD or elsewhere.
There is no tail on DW production. Instead there is a sharp cutoff at a position on the tail that represents the final point of economic recovery (FPEC).
DW structures are expensive to maintain and costly to reach. As we march further out into DW we can also expect the FPEC to march back up the tail.
Most of the models that I have seen give long tails for all superprojects including DW. That just ain't going to happen. Since a significant portion of the operating cost is energy costs a general rise in the price of FF is not going to grant much of a life extension. The structure costs are sunk costs but most of the operating costs will be energy and manpower.
So a rise in FF will have negative impact on margin even as it makes production more valuable.
What is the requirement in GOM for structure retirement? As FF prices rise this will become increasingly expensive and will have a bearing on the FPEC. I have this sense of the industry walking out on a very thin plank. Your thoughts?