Drumbeat: August 1, 2009

Proof Positive Peak Oil is Here

While being a bull on the oil market has been tough for much of the last year, I maintain that we are in a secular bull market in oil due in large part to one of the most significant economic events of the 21st century – the peaking of worldwide oil production. According to the US Energy Information Agency (the statistical division of the US Department of Energy), the summit of worldwide oil production occurred in May 2005. While the event received only mild concern then, the news has been more recently overshadowed by the fall in real estate prices, the near collapse of the banking system and the most severe economic contraction since the Great Depression.

U.S. Rigs Gain for Third Week, Baker Hughes Says

(Bloomberg) -- Oil and natural gas rigs operating in the U.S. increased this week by five, or 0.5 percent, to 948, in the third consecutive increase, according to data published by Baker Hughes Inc.

Natural gas rigs rose by two to 677, Baker Hughes said today on its Web site. The count is down 58 percent from a peak of 1,606 on Sept. 12.

The combined oil and gas rig count rose to a 22-year high in 2008, peaking at 2,031 Aug. 29 and Sept. 12. The count has fallen by 51 percent in the past year.

Nigeria on the brink

Four days of violence in Nigeria have left hundreds dead, destroyed towns and villages across the north, brought the cold-blooded police shooting of an Islamist rabble-rouser and left the outside world horrified. Nigeria, with 140 million people, is Africa’s largest country. It is also one of the most corrupt, unstable, unequal and fissiparous: in half a century of independence it has seen civil wars, separatist rebellions, military coups, ethnic vendettas and a terrible descent into virtual ungovernability. What happens in Nigeria matters not only to Africa: it affects the huge diaspora in Britain, distorts the oil market, drives international criminality and opens the gates to extremism and terrorism.

Six Crises, 2009: A Half-Dozen Ways Geopolitics Could Upset Global Recovery

The prospect of a wholesale collapse that sent millions upon millions of Mexican refugees fleeing across the northern border so far seems remote. But Mexico’s army has its own problems with corruption, and a sizeable number of Mexicans regard Calderon’s razor-thin 2006 electoral victory over a leftist rival as illegitimate. With Mexico’s economy reeling and the traditional safety valve of illegal immigration to America dwindling, the potential for serious trouble exists.

Meanwhile, Mexico ranks with Saudi Arabia and Canada as the three suppliers of oil the United States could not do without. Should things come unglued there and Pemex production shut down even temporarily, the shock on oil markets could be profound, again, sending its waves throughout the global economy. Long-term, PEMEX production has been sliding anyway, thanks to oil fields well-beyond their peak and restrictions on foreign investment.

Oil boom: 100,000 bpd for 25 years!

New discoveries of commercial oil reserves in Uganda can sustain production of up to 100,000 barrels a day for 25 years, says the Ministry of Energy and Mineral Development.

Natural Gas Conversions Could Cost a Couple Hundred

But they don't. It costs between $12,500 to $22,500 to convert a gasoline-powered car to natural gas in an autoshop. That old gas hog just can't be greened up for cheap. Now. But it could be.

Natural gas conversions don't have to cost that much: there is no technological problem driving what it truly needs to cost for auto mechanics to make a living at it. The true cost is only a few hundred dollars in parts and labor. The reason for this incredible difference is exceedingly interesting, as Robert Rapier notes in a well researched piece over at The Oil Drum on the feasibility of switching from Gasoline to Natural Gas.

The two blows that killed the industry

No industry in history has held more promise, been more welcomed, received more favours and failed more spectacularly than the commercial nuclear power industry.

Michael Pollan: Out of the Kitchen, Onto the Couch

Women with jobs have more money to pay corporations to do their cooking, yet all American women now allow corporations to cook for them when they can.

Those corporations have been trying to persuade Americans to let them do the cooking since long before large numbers of women entered the work force. After World War II, the food industry labored mightily to sell American women on all the processed-food wonders it had invented to feed the troops: canned meals, freeze-dried foods, dehydrated potatoes, powdered orange juice and coffee, instant everything. As Laura Shapiro recounts in “Something From the Oven: Reinventing Dinner in 1950s America,” the food industry strived to “persuade millions of Americans to develop a lasting taste for meals that were a lot like field rations.” The same process of peacetime conversion that industrialized our farming, giving us synthetic fertilizers made from munitions and new pesticides developed from nerve gas, also industrialized our eating.

Good Farming Was More Advanced A Hundred Years Ago

Working from the premise that we will eventually run out of plentiful supplies of manufactured fertilizers, I have been reading old farming books written before artificial fertilizers became easily available. I am amazed at the sophistication with which science approached the subject of soil fertility once it become evident in the mid-1800s that farmers were rapidly depleting the native richness of their soils and had to find ways to restore it using livestock manure and green manure crops. In some ways, what science advocated then was more advanced than farming practices are today.

If we have to produce food for growing populations without large supplies of manufactured fertilizers, the science of a hundred years ago is going to be back in vogue. Even if we don’t run out of fertilizers, advanced manure science will be very useful for anyone wanting to avoid the high costs of commercial fertilizer. (Don’t laugh at the term, “manure science”— agricultural colleges are now conducting what they called Manure Science Review days.)

Senate Democrats Tie Climate Effort to National Security

Senate Democrats are increasingly relying on the connection between global warming and national security as they craft legislation to curb greenhouse gas emissions.

At an Environment and Public Works Committee hearing yesterday, former Sen. John Warner (R-Va.) urged quick action on cap-and-trade legislation as a way to prompt a larger global response to climate change. Absent congressional action, Warner, a former secretary of the Navy, warned of more climate-induced migration and other environmental stresses that put U.S. national security at risk.

"There's a building base of evidence that global warming is contributing to much of the instability of the world today," Warner said. "If we do nothing, we can be sure nothing else is going to be done of any consequence."

Chevron puts land-based natural gas drilling on hold

NEW YORK » Chevron said yesterday that its second-quarter profit fell 71 percent, and the second-largest U.S. oil company put its entire land-based natural gas drilling operation on hold, citing dismal demand.

"By the end of the year, we will not have a single gas land-rig running," George Kirkland, Chevron's executive vice president for global upstream and gas, said in a conference call.

With natural gas plunging to about a quarter of its value last year, "it really doesn't make sense right now to be drilling those gas wells," he said.

Sixty jobs face axe at oil service company

Oil service firm Schlumberger has dealt the north-east another jobs blow, warning that nearly 60 positions are at risk in Aberdeen.

Yesterday’s revelation by the Houston-based firm came just days after oil giant Shell said “substantial” staff cuts were likely among its global workforce.

Other companies have already axed posts or hinted at redundancies in the north-east as the combined impact of the global recession, weaker energy demand and a plunge in oil prices from last year’s record high takes its toll on the wider sector.

Some Calgary gas stations running on empty

Some Calgary service stations have run out of gas on the cusp of a busy long weekend.

A bad storm last week cut power to two Edmonton-area oil refineries. While both returned to normal operations this week, Imperial Oil and Petro-Canada are still trying to replenish dealers that have run dry.

"We are curtailing the volume of gasoline delivered so we can equitably allocate what gasoline is available to our customers across the entire province," said a spokesperson for the company, Sneh Seetal. "We are also bringing in product from outside the region."

Bring urgency to Arctic plans

Escalating temperatures, ice cap meltdown, threatened livelihoods and disappearing species. As if the assault of global warming on Canada's Arctic weren't enough, the laser beam of world attention on its oil and gas riches and future marine transport prospects has brought a new set of challenges to the boil.

Not a moment too soon, Prime Minister Stephen Harper's government has relaunched its northern strategy, identifying four priorities for action: exercising Canada's Arctic sovereignty, protecting our environmental heritage, promoting social and economic development, and improving and devolving northern governance.

88 months and counting

Picture the scene. It's the beginning of the second world war. Germany's industrial war machine is in full production and Hitler is advancing across Europe. Back in England, the government decides that the cost and planning complications of building tanks and aircraft are just too great and lets the factories – who would be willing to build if there was a demand for them – close. In compensation, it offers the firms a grant from an already existing budget to carry out research and development.

As bizarre as it sounds, a rough equivalent of this otherwise unimaginable scenario is playing itself out at the Vesta wind turbine factory on the Isle of Wight – the subject of a high-profile sit-in protest by some of its workforce. The company says that the government has failed to make the domestic market happen, and so plans to shut up shop. The government, for its part, braces to endure a crushing symbolic failure just as it publishes its strategy for a transition to a low-carbon economy, and it is reported that it has offered the firm a little compensatory R&D money (£6m).

Have Renewables Really Eclipsed Nuclear Power?

Wow, have renewables really become more important than nuclear power in America’s energy mix? Yes and no—it depends what you are counting.

Pickens Plan in a pickle

Clean-energy investments have dried up during the recession, threatening the former oilman's plans for a wind-powered renaissance. But he isn't giving up yet.

Wise Words with Deb Harper

Peak oil is going to be reached really soon, and we use oil for more than just making our cars and airplanes go. We use it for making polyester, like the skirt I’m wearing. We use it to make insecticides, which you can argue whether that’s a good thing or bad thing, and fertilizer. (Oil) is going to be running out and it will run out in my children’s time. I realize we’re finding new (sources) of oil, but we have to stop being so crazy about using energy. We’ll know we’re healed when we become more sane about wastefulness about energy.

Letters on Climate Bill Were Forged

A grass-roots lobbying firm has acknowledged forging letters opposed to the climate bill that were sent to a Virginia lawmaker. The office of Representative Tom Perriello discovered that a half-dozen letters it received had nearly identical language signed by a made-up person at Creciendo Juntos, a Latino group, and five fake members of the Albemarle-Charlottesville branch of the N.A.A.C.P.

Climate Crock of the Week: What's Up with Anthony Watts [take 2]

Peter Sinclair producer of the well-known "Climate Crock of the Week" video series, posted a video debunking weatherman Anthony Watts who runs a Climate Denier Den also known as his Watt's Up With That blog.

The video was auto-scrubbed by YouTube after Watts claimed the video broke YouTube's copyright rules. The video has since been reviewed by a number of US copyright experts and (big surprise) there appears to be nothing that could be construed as anything but fair use.

Exxon Spends More on Lobbying than Entire Clean Energy Industry Combined

Guess it pays to be the biggest oil company in the world--even though their profits are at the lowest they've been in six years, Exxon still managed to spend more money on lobbying efforts for the climate bill than the entire clean energy industry combined.

Scientists hit back at climate scepticism

FIFTEEN senior Australian climate scientists have hit back at the resurgence of climate scepticism among the nation’s politicians and the media, warning that the threat from climate change is real, urgent and approaching a series of ‘‘tipping points’’ where it will feed on itself.

India wants climate change pact at Copenhagen

NEW DELHI (AFP) – India insisted Friday it wanted to reach a global agreement on fighting climate change at the upcoming UN summit in Copenhagen but reiterated its opposition to binding carbon emission cuts.

"We are not defensive, we are not obstructionist. We want an international agreement in Copenhagen," Environment Minister Jairam Ramesh Ramesh told reporters in New Delhi.

But India "simply is not in a position to take on legally binding emissions reductions targets," he said, while pressing rich nations to provide technical and monetary aid to help developing countries fight global warming.

Where Europe Buries Carbon

Carbon capture and storage (CCS) made its world debut in Northern Europe in 1996, when Norway’s state-owned oil and gas company started burying carbon dioxide that had been stripped out of natural gas at its Sleipner West offshore field. Rather than venting the CO 2 —and paying Norway’s punishing US $50 per metric ton carbon tax—the firm pumped it into a saline aquifer 1 kilometer below the seabed. Sleipner has sequestered over 11 million metric tons of CO 2. Extensive testing says that the gas is staying put.

In pictures: How global warming is changing the face of the northern hemisphere

Slowly but surely the Breidamerkurjokull glacier is melting away.

This 60 mile long expanse of ice has edged from the mountains into a lagoon and over the past 30 years has shown no sign of moving back.

Over this time professional photographer Ragnar Sigurdsson has been documenting the alarming phenomenon that has been taking place.

"Some Calgary service stations have run out of gas on the cusp of a busy long weekend. A bad storm last week cut power to two Edmonton-area oil refineries. While both returned to normal operations this week, Imperial Oil and Petro-Canada are still trying to replenish dealers that have run dry."

Much ado about nothing. The other gas stations have plenty and it's not as if cars are lining up in the streets waiting for fuel. I fill up at Co-op, and if I hadn't seen this news report, I wouldn't have known there was any problem. Since this is a long weekend with hot, sunny weather, half of Calgary is out in the mountains anyway.

Re: Global Warming and Climate Change articles up top:


The cool weather has slowed down crop development but on the other hand there has been little heat stress and yields will likely be very good.

Yes Mr. X, things have been rather cool this summer over much of the U.S. There have also been areas with record high temperatures as well. But, remember that the U.S. Lower 48 covers only a small fraction of the total area of the Earth, 3,536,342 sq miles out of 196,935,000 sq miles, or 1.79% of the total. Iowa only covers 55,875 sq miles, or 0.028% of the total. What happens in Iowa says nothing about GLOBAL climate. While you are at it, please take notice that the Arctic sea-ice is melting rather rapidly this summer. The area of the Arctic Ocean is about 5,440,000 sq miles, or about half again the size of the entire U.S. Lower 48.

You may go back to sleep now..

E. Swanson

The Summer in England has been cold and wet as well.

According to Accuweather, the reason for the recent cooler conditions is that the jet stream has taken an unusual southerly track over the middle of the U.S. They claim "Winter-like Jet Stream Leads to July Extremes", which might "explain" the weather. The story has rolled off the screen, but the headline says it all.

No problems, the weather keeps on changing. But, it's climate that is the potential problem, not the short term weather last week. The trouble is, Accuweather doesn't attempt to answer the obvious next question: What's the cause of the southerly dip in the jet? For one possible answer, given that the Arctic sea-ice is melting, it would seem reasonable to conclude that there are corresponding upward displacements in the jet stream where warmer air is being pushed northwards as the circulation loops intensify. Or, it could be that the THC circulation in the Greenland Sea has weakened, which could show up as a cold area in the North Atlantic, exactly what one sees in the ocean temperature anomaly data...

E. Swanson

It seems to be a pattern each year. My WAG is that extreme warming at the pole is causing the Jetstream to push Southwards (thermal expansion?). In Europe this means we're receiving relatively cooler weather as a result in the Summer.

Using this rather rickety hypothesis as a basis of what to expect; then as we're getting a lot of cool weather, even more so than previous years, it would indicate that the warming in the Arctic is correspondingly more extreme this year than previously.

What I notice this year is that the weather seems more chaotic or inconsistent, for example one day it will be 31°c followed by say 18°c the next. Something I put down to the push and pull of various warming processes competing as they try to rebalance themselves. My position here in Europe being unfortunately where they compete.

If we're rapidly heading towards an ice free Arctic in the summer and essentially adding another ocean to our climate system (how does that effect climate models?) then we are conceivably in the midst of an abrupt climate shift (ie. within a decade). The outcome of which would be?

It doesn't need a "cause", it's just weather, it's chaotic. Probably the loops in the jet stream just so happened to settle for the high summer as they did this year (and as they tend to do in winter - pick a random winter temperature map and there's a decent chance you'll find a giant cold finger hanging over the upper Midwest.) Roll the dice: maybe next summer it will be chilly in Seattle and hotter than Hades in the upper Midwest. Or not. No way to know.

To be sure, there's always variation and the jet stream moves around from day to day. However, we've seen reports of thousands of record cold temperatures, as I commented on a few days ago such as the report a few days ago from Accuweather, and the article I pointed to offered an explanation based only on the jet stream. The fact that there were so many records over such a short period makes the situation unusual, since many of those reporting stations have been around since the founding of the Weather Service back in the 1880's. The title of the Accuweather story about the pattern being "winter-like" says that this situation looks to be very different from previous historical summer time experience.

Google found that the Accuweather report was reprinted by a newspaper, so you can read the whole thing. The strangeness of a winter jet stream pattern appearing in summer should be obvious. The ending is similar to your comment about the weather changing constantly. However, if this pattern represents a new alignment of forces, future weather won't be like that in the past. And, we will have to live with the results, be they natural or man-made.

For example, the Year Without a Summer in 1816 was characterized by repeated outbreaks of cold air from the north. Most of the U.S. population was living in the original 13 colonies along the Eastern coast. In New England, the cold resulted in frost and freezes, which killed the crops in mid-summer. A pattern such as that today would destroy the food crops in the mid-west, resulting in famine. Food prices would skyrocket and the economy would take a big dive, one even worse than we've seen since December 2007 as people spend most of their money for food, leaving little for other purchases. I doubt that such would be easily dismissed as a "roll of the dice", as millions would starve or die fighting.

E. Swanson

Friday night failures...

5 more banks fail

Regional banks in Oklahoma, Florida, Ohio, Illinois and New Jersey fall, bringing the national tally up to 69 for 2009. The closures cost the FDIC $912 million.

I appreciate these updates, Leanan. These and the EIA's "This Week in Petroleum". Thanks to Gail, too, while you were away.

(Just so you don't think you're wasting your time. I don't have a comment to make about bank amalgamations ... not yet, anyway.) :-)

Squeeze on Pay, Benefits May Crimp Recovery

The Labor Department's Employment Cost Index -- a broad measure of worker compensation ranging from health benefits and 401(k) contributions to hourly pay -- was up 1.8% in the second quarter from a year earlier for civilian U.S. workers.

For private-sector workers, the index was up 1.5%, the smallest annual increase since the government began tracking the data in 1980.

I don't know how the labor department is calculating this index, but it seems to me that wages of those who still have jobs are likely up even less than this calculation shows. So many people have reduced hours, or reduced bonuses, or furlough days, that the real result is likely a lot worse. When you add to this the number of people who are working part-time jobs instead of full time jobs, or are unemployed all together (some of whom have already run through their unemployment benefits) the result is very bad.

No kidding, the lack of pay and benefits may crimp recovery. When the solution to the problems of all of the companies with financial difficulty is to lay off workers or cut pay and benefits, it seems like the solution to one problem is just the start of the next one.

Congratulations to Robert Rapier who's natural gas conversion article got mentioned in an article over at > article over at gas 2.0 which then got reprinted at the the Reuters link above.

I get the impression there are a lot of folks who quietly read the articles at TOD looking for original material.

-- Jon

It was great that Robert's article got picked up. Thanks to Leanan for finding it, and your comments too.

I think quite a few people read Oil Drum posts, looking for material. Some of them quote us, but just as often they don't. But it does work to slowly get the word out.

"......as Robert Rapier notes in a well researched piece over at The Oil Drum on the feasibility of switching from Gasoline to Natural Gas."

not well researched enough to capture the not so subtle difference between resources and reserves.

i'm starting to wonder if half the oil drum even understand the difference.

lrd posted this july 30:

Proved reserves have a better than 90% probability of actually being reserves.
Probable reserves have a 50% to 90% probability of actually being reserves. And may have 50% probability that they don't exist.
Possible reserves have a 10% to 50% probability of actually being reserves. And perhaps a 90% probability that they don't exist.
Speculative reserves are someone's speculation that there could conceivably be such reserves. There is a probability greater than 90% that they don't exist.

the only reserves mentioned by the potential gas committee was proven and probable. everything else was refered to as resources.

Robert did talk about the difference, and quote amounts at the expected level as well. I don't see it as a problem.

robert wrote:

“Assuming for the sake of argument that the 2,074 trillion standard cubic feet cited in the study is accurate, that the "probable, possible and speculative reserves eventually equate to actual reserves,...."

the pgc committee never refered to reserves, although the media did (repeatedly).


“Announcing the 2008 PGC Natural Gas Resource Estimates and Biennial Report”

“The national PGC estimate of potential gas resources is the sum of 89 separate geologic province estimates of the gas volumes believed to be (a) present in known gas reservoirs but not yet booked as proved reserves (probable resources),
(b) resident in undiscovered gas reservoirs located in presently gas-productive areas (possible resources), and (c) resident in undiscovered gas reservoirs located in geologically favorable areas that are not presently gas-productive (speculative resources) in the province.”

to summarize: resources (not equal to) reserves.

to summarize: resources (not equal to) reserves.

Yeah, I see two big problems there. First, you appear not to understand what "for the sake of argument" means. If you take that at face value every time you hear it, you probably get into lots of unnecessary arguments.

Second, there were other examples made assuming that only a third of the reserves are ever recovered, and there is a caveat to that effect. I can only presume you stopped reading the article after making your conclusions based on "for the sake of argument." I have no other explanation for your comments above.

what got my rankles up was your reference to probable, possible and speculative resources as probable, possible and speculative reserves.

i understand the meaning of "for sake of argument". and with due respect, it appears you do not understand the distinction between resources and reserves.

One thing I have learned is that when someone says "with all due respect.." they mean the exact opposite of that. And these things always end up being a big waste of my time.

If you got rankled, well, there are a lot more important things to get rankled about - especially given that the essay was clearly a thought experiment. Personally, I find your objection silly in that context. The 2,074 in fact provides an upper limit for the thought experiment, because for the purpose of argument the upper limit for the reserve could theoretically equal the resource.

For the average person, it matters not a whit; it just gives some rough level of perspective on those numbers. It wasn't intended to represent a +/-30% estimate. As with my thought experiment on replacing gasoline with solar energy, you should really maintain perspective on what a thought experiment actually is. If I say "assume the moon is made of blue cheese", it doesn't add much to the argument to insist it has to be Gouda.

the number 2074 tcf has been repeated so many times in the media (at least four (4) times in your post alone) that the general public probably believes it. thank you for your efforts to perpetuate the public's missunderstanding.

what i find silly is your refusal to acknowledge that resources do not equal reserves.

thank you for your efforts to perpetuate the public's missunderstanding.

Which matters exactly how? If I spent my efforts trying to educate the public on the differences, eyes would have simply glazed over. For the purpose of the essay, it didn't matter. You wanted the essay to serve a different purpose. I suggest you write your own essay, and you can argue whatever you want. You can explain in great detail that the public misunderstands these issues, when actually the public doesn't care.

what i find silly is your refusal to acknowledge that resources do not equal reserves.

Are you for real? Someone asked me to do this and I refused? Likewise, I can't believe you don't know the difference between diesel and gasoline, and refuse to acknowledge it.

At this point you are just playing games, and I should have gone with my instinct that you would just end up wasting my time. I think we will all be better off if you write your own essay next time, and just ignore mine in the future.

you are still not getting it, are you ?

"Assuming for the sake of argument that the 2,074 trillion standard cubic feet cited in the study is accurate, that the "probable, possible and speculative reserves......."

you cited a study that purports to estimate probable, possible and speculative RESERVES when the study made no such claim. that is wrong, no matter what context it is presented in.

ignore your posts ? i do most of the time, but when you talk natural gas and resources being reserves, i just cant let that pass by.

No, I got it from your first post. It is you who isn't getting it. Let me explain.

You wanted the focus to be on the fact that we can't possibly count on 2,074 trillion scf because of the nature of what that number represented. You wanted a discussion of reserves versus resources. You wanted perhaps something like Dave Cohen wrote:


What I wrote was intended to put the published numbers in perspective with respect to the amount of energy we use. I quoted the news reports; I don't recall if I ever saw the actual report (although I have the Nagivant Consulting report that was based on the PGC assessment). So I am commenting on what was in the news.

I see three potential problems leading to your misunderstanding. First, I didn't cite the study, I quoted the news reports. Had my interest been in debunking the news reports, then I would have written an essay more like the one you wanted to see.

Second, you have tunnel vision around this issue, and as such you are more concerned about issues that the average person doesn't care anything about. The average person who reads that essay is going to take something away from it that wouldn't be changed at all if I focused more on the reserves/resources issue. In fact, they might have taken away less, because that wouldn't have been of much interest and I might have lost them. Again, your tunnel vision is placing a level of importance on the issue far greater than will the average person.

Third, I just noticed that the title was changed with respect to the original. In the essay I wrote on my blog, it did not have "Do We Have" in it. Again, you may have read that and thought that my essay implies that we actually have 2,074 trillion scf available. My intent wasn't to argue that we have 2,074, but you seem to think that was my intent.

Now truly, this has gone on long enough. I understand your point quite clearly. You either don't understand mine, or you feel yours is so important that it should have been the focus of the essay. Either way, I don't have much more interest in this. My suggestion to you is this: TOD posts guest essays all the time. Instead of arguing with me in Drumbeat, write up an essay and focus on the points that you think are important. I would even be happy to format and post it for you. And it would reach a lot more people than you are going to reach by arguing the same point over and over to me in Drumbeat.

Reserves are 237 Tcf according to the EIA annual report. Big difference. R^2 just say you made a mistake and move on.

Would you be so kind as to quote my mistake? If I am quoting news reports, and commenting on them - and they happen to have made a mistake - that isn't my mistake.

Well, I read stuff that journalists write all the time that is false. Sometimes, I get caught with my pants down by trusting the journalist to get it right. No big deal. I feel pretty silly and say I am sorry for repeating misleading information.

How a man reacts when confronted with an obvious error he made always says so much more about him then how he reacts when lauded for an obvious success he has had.

Try these words RR:

"I made a mistake, but I don't think it was material to the point I was making." Done.

If the other guy wants to argue the error was relevant, let him and ignore him, or engage him in some manner other than the starting point of, "I know you're going to waste my time."

Based on this thread alone, I'd say you've got the time.

Simple as that. You can't look reasonable as you peck out several thousand words to explain why your error wasn't an error at all because it was immaterial.

If it was an error, it was an error, and whether it was material or immaterial to the point you were making in your paper is completely immaterial to whether it was an error.

Your tit-for-tat playground exchange with the other guy - who is being just as hardheaded, really does not comport with your intellect.

Taking criticism without being defensive is about as anti-human as anything I've encountered.

We can all work harder to get better at it.

How a man reacts when confronted with an obvious error he made always says so much more about him then how he reacts when lauded for an obvious success he has had.

And that would be well and good if I had made a mistake. But I didn't. I wrote an article, that is essentially: "Per news reports, X. This is what X would mean." Your argument and that of elwood is "The news reports confused resources for reserves. Therefore, when you quote the news reports, you made a mistake." I just don't see it that way. All of us comment all of the time on news reports. If the news says "Life discovered on Mars", and I write "News reports say..." and then they retract it the next day, that doesn't make my comment wrong - even if I talk about the possible implications of the news reports.

That's just the way I see it. My essay started "You may have seen the recent news that a report by the Potential Gas Committee says natural gas reserves in 2008 rose to 2,074 trillion cubic feet." That statement is correct, because that is in fact what the news reported, as shown in my quotes. Whether the 2,074 is resources or "possible reserves" really doesn't make any difference to the points in my essay, which was merely to put that number in context of the amount of gasoline we consume. "2,074 trillion" without context doesn't mean any more to the average person than "2 trillion."

This is not a debate about whether the 2,074 refers to reserves or resources, but that is the sticking point for several of you. I have not debated that point. As I have said repeatedly, feel free to write that essay debunking the news reports. That is just a different essay with a different focus.

Based on this thread alone, I'd say you've got the time.

I wouldn't have jumped in here if I didn't have a bit of time today, because this is inevitably what happens when I do jump in here. But if you look, my "jumping in frequency" has gone down a lot relative to where it used to be because of these sorts of endless arguments.

So you read the news report, saw that they made an order of magnitude error, and then wrote an essay about the report without mentioning this error?

Well, his own verbiage

Assuming for the sake of argument that the 2,074 trillion standard cubic feet cited in the study is accurate, that the "probable, possible and speculative reserves" eventually equate to actual reserves, and that the gas is economically recoverable, that is enough gas for 53 years of combined current natural gas consumption and gasoline consumption. If you assume that only the proven plus probable reserves are eventually recovered, the amount drops to about 1/3rd of the 2,074 trillion scf estimate, still enough to satisfy current natural gas consumption and replace all gasoline consumption for almost 20 years.

Maybe I'm blind, but I just do not see the problem. He clearly states in his article that proven + probable are at 1/3 of the 2,074 Tscf mentioned in the news report, someone else in a comment quoted proven at 237 which make RR's comments seem reasonable to me - it would put probable at around 445, and possible + speculative at around 1365. I just don't see where his egregious error is. He gives two scenarios for a thought experiment, what if the 2,074 number pans out, and what if only the proven + probable pans out. I just don't see anything that is the stumbling block folks are making of it.

(edit: fixed some math, grammar and typos)

Especially when the American number is actually far less important in the big scheme of things than the global one (bear in mind that some of the readership and even many of the contributors on here don't live in the United States) in terms of a thought experiment on this subject. People with a doomer agenda are not going to like anything that suggests that the end is not nigh, however.

You are correct Barrett, it was a great article and Robert's verbiage could have not been clearer. I deeply appreciate his continuation to this list. But there are always nitpickers, and I must confess I am occasionally one of them. But I have the good sense to let it go after one or two posts. It really gets annoying when one just keeps it up post after post after post.

Keep up the good work Robert.

Ron P.

I'm certainly puzzled, every time you stick your head in somebody wants to start a tar baby fight. Sometimes with N. Hagens, but mostly with you. It annoys me because I enjoy and benefit from the articles, we're destroying a shared resource if we make it dreadful for folks to post articles here and they leave.

Thanks RR for all your contributions to the discussion.

Please ignore the trolls and save your time for writing material that I and other TOD members treasure. TOD and TAE are under troll attack; you can't reason with them.

Yeah, I'm not sure where they went wrong. Your argument is clear as day to me.

Slice of central US safe from recession shrinking

That prudent financial bent, matched with the high prices paid for crops and energy in the past few years, has largely protected Goshen County and a core group of several hundred other counties in 10 states from the recession's chokehold. The Associated Press Economic Stress Index shows they make up a "safe zone" that covers a long swath of middle America, from the Great Plains south to Texas.

But the safe zone is shrinking. Energy production and prices are sliding, especially for coal and natural gas. Crop prices are dropping, too, as there's less demand in Asia for American wheat, corn and soybeans. There were 800 counties in the safe zone a year ago, a number that dropped to about 300 counties in May and slid further to 200 counties in June.

Also some interesting comments on energy extraction in these areas:

The number of rigs in Wyoming drilling for coal bed methane dropped to zero in May, down from 19 the previous year, while the number of conventional rigs drilling for natural gas and oil is off by more than half. No coal mines have closed, but annual production could drop as much as 10 percent as the recession stalls the need for electricity nationwide.

"The prices of coal are down. Production is going to be down," said Marion Loomis, executive director of the Wyoming Mining Association. "So we're going to see a pretty significant reduction probably this year, and it's really just based on the amount of electricity that the country is using."

There is a lot of hype in the media and from our feckless government about carbon sequestration and storage. Little is being said about the danger of "carbon eruptions or terrestrial burps" of this friendly gas going to the surface and suffocating life. Carbon is heavier than air therefore it will smother everything at the surface if released in a large eruption.

On August 21, 1986, an eruption occurred at Lake Nyos which triggered the sudden release of about 1.6 million tonnes of CO2; this cloud rose at nearly 100 kilometers (62 mi) per hour.[4] The gas spilled over the northern lip of the lake into a valley running roughly east-west from Cha to Subum, and then rushed down two valleys branching off it to the north, displacing all the air and suffocating some 1,700 people within 25 kilometers (16 mi) of the lake.

People are terrified of having a relatively safe nuclear storage facility in their backyard. How are they going to feel about hundreds of millions of tonnes of CO2 sequestered under their homes? Should we continue to tell them how harmless it is? After all we enjoy it in our sodas and champagne.


Better a few thousands killed occasionally by losses of sequestered carbon dioxide (quite unlikely) if it will slow down the rate of Climate Change/Global Warming.

Billions are likely to die as a result of your "friendly" gas.


Alan - I'm not convinced that it isn't just another distraction or "stonehead" that will expend a lot of resources, make a few parties wealthy with virtually no results in the end. How much carbon would need to be sequestered in order to begin to make a dent? My first guess would be...a lot.

Face it people are so accustomed to luxury they will grasp at any techno solution rather than alter their lifestyles. It's like an alcoholic trying to negotiate with the beast: "I'll only drink beer but I'll lay off the scotch."

What if they told everyone in America that you could only drive your car every other day. That would make a huge difference right away and it would be fair (if there is such a thing). But we're not going to do that so we're left with these half-measures.


Yep: Driving your car every other day is a half measure. The other half of the measure is not driving the days in between. Now that's a full measure but only on the Olduvai.

After all the CO2 is sequestered and the trees die, what then? If we human beans can overshoot population by at least 5X, spend a lot more than we will ever make, bailout banksters, interfere with the auto business, redistribute wealth in so many ways as to discourage individual enterprise; then wouldn't it figure that we would get rid of too much CO2?

C: Do you believe in evolution?
H: No!
C: You don't think humans evolved from monkeys?
H: I sure don't see any difference.

Yet another ...

P: We have met the enemy ...

What about Cern's black Hole? Can a nanomachine really make grey goo?

These and so many other things recently is why I am growing a garden at least until singularity or Maitreya shows up.

Wow, crude near $70 again.

Considering massive quantities of methane has been trapped in geological formations (i.e natural gas) for millions of years, I'm not terribly concerned.

Daxtatter - CH4, or methane at ambient temperatures is lighter than air. I wouldn't be worried about that either.

It's worth remembering that the atmosphere is well mixed. That is, the difference in density has an effect only for a short period in the local area at which a gas is released into the air. The release of Freons in a confined space is often cited as a potential problem, as they are denser than air, but in those cases, the release likely results in the cooling of the gas, as the gas is produced by boiling the liquid, which thus makes the cloud rather dense.

The release of CO2 from an underground reservoir would be different. A slow release would be hardly noticed, unlike the particular case you pointed to where the release was the result of the overturning of the deep water in the volcanic lake. My guess is that a fast release might be more like a volcanic eruption, that is, the gas would be quite warm and tend to quickly rise above the surface as a result.

E. Swanson

My guess is that a fast release might be more like a volcanic eruption, that is, the gas would be quite warm and tend to quickly rise above the surface as a result.

That guess would be wrong. The CO2 is stored under pressure probably around 1000 psi, likely in the gaseous state but perhaps liquid depending on the formation temperature. No amount of pressure will liquefy CO2 above 88 deg. F. Even if the subterranean temperatures were high, the decompression of the CO2 would result in a large temperature drop which could cause the CO2 to condense into liquid. CO2 also has a curious property unlike most gases that when rapidly decompressed it sublimates into a solid, often referred to as "snow" or dry ice. This is exactly how dry ice blocks and nuggets are made, but of course temperature, pressure and phase affect the result widely.

A CO2 tanker hauls CO2 as a liquid. Gradual boil off is managed with a pressure relief valve. In the case of a valving malfunction and rapid decompression, the contents sublimate into snow, requiring that the truck be re-pressurized, adding liquid and left to revert to liquid. This can take a very long time.

A sudden breach of a CCS system would likely result in a large plume of white, and very cold and dense CO2 vapour followed by a snow shower. This is often seen when one discharges a CO2 fire extinguisher. I see no reason why an underground reservoir would act any different.

Depending on how the CO2 escapes, it can have some dramatic effects. A 4" hose attached to a vented hose storage stand was accidentally and briefly energized. Unfortunately, the end of the stand in the ground was not blinded as per spec. The ground under that ramp tarmac on a very hot day was injected with liquid CO2, resulting in about a 15 foot crater, some twisted piping and some red faced engineers.


If the storage of CO2 is deep underground, then a failure of containment would imply the existence of some pathway to the surface. The flow thru that channel would be constricted by the size of the channel on the way to the surface. A large channel, perhaps a pipe, would release the CO2 as a gas and the pressure drop would accelerate the CO2 to some high velocity as the gas vented into the atmosphere.

I still think the result would be somewhat like a volcano, with a crater formed as the gas is vented. One can't know before hand what form of crater might result, but the high rate of flow suggests to me that a likely result is that the CO2 exits the surface with an significant upward component of velocity. Thus, I think the possibility of local health effects from excess CO2 would be minimal. The "red faced" engineers in your example are still around, I presume.

E. Swanson

Considering massive quantities of methane has been trapped in geological formations (i.e natural gas) for millions of years, I'm not terribly concerned.

And, most of this methane has some CO2 associated with it as well.

I would agree, that sequestering CO2, as gas under high pressure may not be the best idea. But, most sequestration suggestions involve it being in solution in brine, hence the statements that any rapid (with regard to the potential to form a lethal pool of gas at the surface) release is highly unlikely. The best sequestration is within rock formations containing silicates, as the low temperature replacement of silicates to silicon dioxide and carbonates (all common solid minerals), is the natural way our planet regulates the long term (million year timescale) level of atmospheric CO2.

Oh, please. We have way too much democracy in this respect - people who have too much time on their hands forever manufacturing something new to be scared of. Like the stopped clock, on rare occasions they're even right. But so what? They get their undies in a bundle, who cares? In reality they're so "safe" that they're highly likely to outlive both their minds and their bodies by several years, something unprecedented in all of Earth history. What more does anyone need?

Apparently, the IPCC states that 99% of the CO2 would remain sequestered for hundreds of years (I saw that on wikipedia, so you may want to take it with a grain of salt).

Re: The two blows that killed the industry

Nuclear power's chief failing, then as now, remains economic.

Sadly true. Nuclear power cannot compete with cheap and abundant fossil fuels. In the latest example of it, Norilsk Nickel company (the world's top producer of nickel) has stopped using nuclear icebreakers to transport metal to world markets. They acquired five diesel ice-capable freighters. Since the icebreakers were built in Soviet times specifically to haul nickel from Dudinka, they now stand idle at the pier, more than half the crew fired. Now their hope is global cooling or Arctic oil exploration.

The Darlington Nuclear Power Plants only cost three times as much as initially budgetted not six. At five bucks a watt that not bad for a nuke.

I'm not sure how you define initial, but when Ontario Hydro's Board of Directors approved construction of Darlington in 1973, its estimated cost was $2.5 billion and that number was subsequently revised to $3.95 billion in 1978. When the first shovel hit the ground three years later, it was set at $7.4 billion and by the time it started supplying power to the grid, the final price tag was $14.4 billion. From start to finish, a six fold increase is correct.


According to the US Energy Information Agency (the statistical division of the US Department of Energy), the summit of worldwide oil production occurred in May 2005.

From the article up top, while I agree completely with the thrust of it, that claim is inaccurate. The EIA summit for worldwide oil production (C+C as defined in that essay) is presently listed as July 2008, just before the price crashed. March 2008 also exceeds May 2005.

Here are the numbers:

EIA Monthly Oil Production Statistics

If one uses conventional C+C, May 2005 is the peak AFAIK.

Tar sands are not conventional.


Couple of things. First, that number above is C+C per the EIA, and if you click on the link you will see that July 2008 is 600,000 bbl/day above May 2005. If you look at the EIA definitions, nowhere do I see tar sands included in the C+C definitions. Tar sands liquids show up in the "total liquids" category. Further, even if it was included in C+C then it was also in the May 2005 number, and production at that time was 3/4 million barrels a day of syncrude.

The issue isn't whether it is a big difference, but if one starts off by making a claim that is in error, it takes away from the rest of the article. If I say "December 16th is the longest night of the year" when it is really December 21st (my birthday), that statement matters even though the difference is only a few minutes of darkness.

Now if you said "Per Matt Simmons, May 2005 was the peak", then what Simmons said is still wrong, but then my issue is not with the author who made a simple statement of fact: Peak oil was May 2005.

The Crude oil plateau was July 04 thru November 08. The peak was officially in July of 08 but we will never know because the data was well within the margin of error. But the plateau was the important thing, the exact month of the peak simply doesn't matter. And the longest day of the year is June 21, my birthday.

Ron P.

I almost used the example of June 21st, but inevitably some nitpicker would say "Don't you know that all days are 24 hours long?" :-) So I figured I was on safer ground with "longest night."

At certain locations, on the year prior to US Presidential election years, the longest and shortest days are June 22nd and December 22nd.

Luckily for you two, the "skip Leap Years every century on the '00 year" was nullified by the "except when divisible by 400 years" rule. This would have shifted the dates permanently (within your remaining lifespans) to June 22 & December 22 with occasional 23rds.

Best Hopes for the Gregorian Calendar,


Doesn't this get back to the ol' argument of whether there was a specific peak oil date or whether there was a plateau from May 05 to July 08? My understanding is, it was a plateau which caused the price of oil to rise as greater demand could not be met by supply, so those that could afford oil simply paid more. Capeche?

Along with Farming of 100 years ago, we have Food Prep of 60 years ago, both things that will change as we grow less energy dense.

There have been several articles in the local paper about how the fact of obesity in the USA is getting worse and Health Care will be paying for this trend for years down the road. The above two articles tie in with this. We have been able to get away from food raised in the local areas to food shipped from hundreds of miles away, and to food packaged in a box at some distant factory, filled with extra things that have over time led to our obesity problems.

I remember as a child not getting candy, and not drinking a lot of sodas. Nowadays Most kids have been on a candy diet for almost all of their lives. High concentrations of "High Fructose Corn Syrup" has not done any of us any good either. That is a Factory farm product, Something you never got with home farming before the Green Revolution.

Sooner or later we are going to have to either willingly change our habits, or we are going to be forced to change them. No more getting our meals out of boxes or cans, and having to really get our hands around the food we eat.

I know that most of the readers of TOD are likely to not fall into the Eat out of a Box catergory, but I am sure you know someone that does. Helping them change is part of the solution.

Hey CEO;
Long time no see.

My wife just went to a film called 'Two Angry Moms' about the quality of food being served at public schools, and learned that the default lunch beverage at our daughter's first grade school this fall is going to be chocolate milk. The snacks are often full of the additives and preservatives that we have decades of studies showing strong links to ADHD and behavioral problems with students, but they keep serving it.


There were students who have even remarked that what they are being taught in nutrition classes is contradicted by the food provided at the cafeteria.

We've gotta stop poisoning our kids, and training them to shrug their shoulders over obvious hypocrisies..


My wife got nailed by a copperhead (that's a snake) while weeding her garden of Eden, and complications put her in hospital for a couple of days. She came back to report that the diet there was obviously not helpful to the tons of fat people therein with diabetes and heart problems.

Ok, so to mitigate skyrocketing medical expenses, first, change diets, second, ride bikes, third, let old guys like me die when nature intends.

See, us engineers can think of solutions to any problem. Now, did you hear the one about the engineer waiting to get his head removed by a defective guillotine?

I heard it told using a defective electric chair.

And then there was the one about the murderous train conductor who could not be fried in the electric chair. Why? Because he was ...

Then again, how did we transition from the engineering of a profits-maximizing food system to talking about killing machines?

We're not letting you die until you do a Campfire post on your completed Thermal Engines, Wimbi.

I don't know if that fool engineer told them where they should put the grease, but he was probably on the block for being the engineer who said 'The Glass ISN'T half full or half empty, it's just twice as big a glass as you need for the job!'

Hospital Food! Ach! It's there as an antidote for the Pharmaceuticals! At least it's not addictive..

I particularly liked the allegory about the population being served military style field rations. It brings to mind the vision of an imprisoned population of indentured debt slaves being fed rations consisting of the minimum nutrition to achieve the maximum return on investment.

Unfortunately we seem to be in a positive feedback loop healthwise, where a population slowly sickening from longterm food related illnesses the better it is for the healthcare business and the GDP. There's benefits to the GDP growing, transporting, processing and selling the offending foods plus finally treating the disease and illness created by it. Not to mention the wholesale transfer of wealth from the public to the corporate coffers. While the slow degeneration of the populations health has little negative effect on a consumption based economy.

Like narcotics, nutritionally poor processed foods have become an important part of the economy and therefore cannot be removed from it. There will be no top-down change and any bottom-up changes will probably be nullified by the State (eg. compromising the organic standard) in order to protect the economy and its main actors.

I'm not sure when people are going to realise it, but they have to take personal responsibility to look after themselves with decreasing dependency on the system. This cannot be achieved if every minute and every asset is devoted to partaking 100% in the system (ie. working, investing, living and being entertained in it). My conclusion is that this just isn't going to happen, therefore futile wasting time on trying to change it.

let us try this again:

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.

resources are hand waved into existance.

The difference b/w resources and reserves is immaterial. Troll alert ;)

(Seriously, thanks for the clarifications)