Drumbeat: August 14, 2009

U.S. natgas rig count climbs for a fourth week

NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States rose 7 this week to 688, the fourth straight weekly gain after sinking last month to the lowest level in more than seven years, according to a report on Friday by oil services firm Baker Hughes in Houston.

U.S. natural gas drilling rigs are still down sharply since peaking above 1,600 in September, and now stand at 898 rigs, or 57 percent, below the same week last year.

During the week ended July 17, 2009, the natural gas rig count dipped to 665, its lowest level since May 3, 2002, when there were 640 gas rigs operating.

Tighter access to credit and a 70 percent slide in natural gas prices to about $3.50 per mmBtu over the last year have forced many producers to scale back gas drilling operations.

But while the steep decline in drilling this year has started to slow production and tighten supplies, most traders agreed it has not been enough yet to offset recession-related cuts in industrial demand and slight gains in imports of LNG.

Consumer inflation was tame in July

WASHINGTON - U.S. consumer prices were flat in July as energy costs retreated following a big surge in June. Over the past 12 months, prices dropped the most in nearly six decades as the recession and lower energy costs kept a lid on inflation.

Oil thefts continue in Mexico

MEXICO CITY (AP) -- They bleed the fuel lines just about anywhere, drug cartel members and other criminals, sucking millions of dollars of Mexican petroleum from makeshift taps hidden in sheds or on remote desert stretches, with thousands of gallons ending up in U.S. refineries.

Mexican police busted gas thieves twice this week, said Carlos Ramirez, spokesman at Mexico's state oil monopoly Petroleos Mexicanos, or Pemex.

In a colonial village a few hours west of the capital, police caught nine people Thursday who had siphoned more than 17,000 gallons (64,350 liters) of fuel from a pipeline into waiting tanker trucks. On Wednesday, just one hour south of the California border near the popular beaches of Rosarito, police plugged three different taps, including one that was operating inside a small, wooden shack.

But those busts will do little to plug a stream of stolen petroleum products, millions of dollars worth of which is smuggled across the border and sold to U.S. refineries, according to the U.S. Justice Department.

Is It Time to Buy Oil?

Despite a recent run-up, the price of oil is currently half that peak, and ConocoPhillips' stock price has tanked in lockstep with the oil free fall. Buffett clearly bought oil too early. But is it still too early for us to buy oil stocks now?

Petrobras Profit May Slump 29% on Oil Price Decline

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, may say second-quarter profit slumped 29 percent after crude prices declined from a record.

Recession slows Ontario Power Generation

Ontario Power Generation's electricity output fell 19 per cent during its second quarter as lingering effects of the economic recession took their toll on power demand in the province.

The good news is that generation from OPG's fossil-fuel plants, primarily coal, plunged by two-thirds.

Canada's electric carmaker skids on economy, oil prices

TORONTO -- Shares of Zenn Motor Co tumbled as much as 17.6% on Friday after the maker of electric cars reported a deeper quarterly loss and a big drop in revenue as the weak economy and low oil prices cut into sales of its zero-emission vehicles.

The company lost $2.6-million, or 8 cents a share in its third quarter ended June 30, compared with $1.9-million, or 6 cents a share, a year earlier.

Warming ocean contributes to global warming

The warming of an Arctic current over the last 30 years has triggered the release of methane, a potent greenhouse gas, from methane hydrate stored in the sediment beneath the seabed.

Scientists at the National Oceanography Centre Southampton working in collaboration with researchers from the University of Birmingham, Royal Holloway London and IFM-Geomar in Germany have found that more than 250 plumes of bubbles of methane gas are rising from the seabed of the West Spitsbergen continental margin in the Arctic, in a depth range of 150 to 400 metres.

Methane released from gas hydrate in submarine sediments has been identified in the past as an agent of climate change. The likelihood of methane being released in this way has been widely predicted.

Cisterns save rainwater, quench environmental thirst

Exploding populations from Phoenix, Arizona, and Las Vegas, Nevada, to suburban Los Angeles have turned the issue of water supply from problem to crisis. "The way we use water is so wasteful and so inappropriate today, according to the California Water Plan, there is already so much demand for water, it already exceeds supply," says Lipkis.

And human consumption isn't the only problem, because as cities grow, so does the amount of pavement and concrete that seals the natural watersheds. That in turn prevents rainwater from refreshing underground aquifers, nature's water tanks. And rainwater is exactly what Lipkis is hoping people will start to think about.

Proven oil reserves of OPEC go up to 1.02 trillion barrels in 2008

OIL is found in the minds of men, energy fraternity is often found boasting about. It continues to be the case — even today. Global oil scene does is not that bleak, as is being painted by some. Pundits are now coming round the assertion that there is enough oil beneath the surface to keep this crude driven civilization going. The issue is taking it out of ground and overcoming the impediments in the process.

Saudi Arabia is rightly referred to as the global gas station — indeed not without reason. Eyes remain focused on Saudi Arabia — for it provides insight into the future direction of the industry. In recent weeks the Saudi crude production capacity — as per the earlier pronouncements — and despite skepticism of some — touched the 12 million barrels a day mark. This was achieved by carrying out developments at three of its oil fields and extends Saudi spare capacity to almost 4 million bpd. Indeed this was done at a cost — but indeed should go a long way in soothing the nerves of the otherwise jittery market.

In the meantime, it is also a known that Saudi Aramco wants to improve its oil recovery rate to 70 percent from 50 percent over the next 20 years by focusing on enhanced oil recovery (EOR) techniques and other new technologies.

Tradable Energy Quotas (TEQs): A Policy Framework For Peak Oil And Climate Change [PDF]

The severity of the climate emergency is widely recognised, yet the other side of our energy crisis is less commonly discussed. With UK oil production in decline for a decade now, and global oil production possibly having peaked in 2008, there is a real tension between our need for energy and our obligation to reduce our usage of high-carbon fuels. Both sides of the challenge bring real urgency.

With the pace of oil and gas depletion quickening, Governments must put in place safeguards not only against energy price increases, but also against outright scarcity of fuels. An energy rationing system must be ready to prevent the intense competition for fuels that will otherwise develop, and to ensure that every energy-user can access their fair share. Such a system must also support efforts to reduce our dependence on fossil fuels, while guaranteeing that we meet the Climate Change Act’s carbon reduction targets, and it needs to be in place and tested well in advance of energy shortages.

The Future of the Crude Oil Industry to 2015

The National Oil Companies (NOCs) dominate the crude oil industry in the Exploration and Production (E&P) sector. Out of the top 10 E&P companies in terms of production in 2008, seven were NOCs. The NOCs have an even stronger hold over the overall crude oil reserves. Of the top 10 companies in the world in terms of crude oil reserves in 2008, nine were NOCs.

China Cashes In On Overseas Shopping Spree

The second largest energy consumer, China is quickly becoming one of the most significant energy players in the world.

Increasingly in need of fossil fuels to power its burgeoning economy, China's state-owned oil companies have sought to acquire oil and gas access rights beyond its borders, snapping up additional reserves that span both hemispheres.

Energy Firms See Positive Long Term Trends

Groppe’s findings: Actual imports have been as much as 1.25 million to two million barrels a day less than what has been claimed to have been exported in official statistics. Ignoring volatile weekly inventory numbers and dismissing claims of oil-filled tankers sitting idle in the Caribbean as largely fanciful, he has concluded that much of what has transpired in the past two and-a-half years “can be traced to specific changes to the supply-demand balance.”

Groppe postulates that much of the recent strength in the crude oil market is due to reduced exports from Saudi Arabia. He concludes “I would expect oil to approach $100 later this year and correct back to $50 or $60 the middle part of next year. And then do it again.”

Analysts skeptical about Pemex's 2009 production forecast

Mexico's state oil company Pemex recently revised its 2009 production forecast down to 2.65 million b/d from 2.75 million b/d, but the company's forecasts are usually taken with a grain of salt given its repeated inability to meet its own predicted production levels. According to BNamericas, analysts believe the drop could be even more severe. National production averaged 2.59 million b/d in the second quarter of the year and 2.67 million b/d in the first quarter.

Output continues to slide on the natural decline of the prolific Cantarell field, which at its peak accounted for more than half the country's total production.

Even before Pemex revised its outlook to 2.65 million b/d for 2009, consultancy IPD Latin America was expecting the company to be producing less than 2.5 million b/d going into next year, managing director John Padilla told BNamericas.

Opencast coalmine surge 'weakens UK's authority at climate change talks'

Coal production in Britain has increased sharply after a surge in new opencast coal mines, undermining the government's claim to be a world leader on combating climate change.

Dozens of opencast coal mines have been authorised by ministers and local councils across the UK, reversing a decade-long decline in coal production in Britain and often against intense local opposition.

The Failures Of Alternative Energy

It was a bad sign when T Boone Pickens gave up, at least partially, on building a mammoth wind farm in Texas. The process was not only going to be expensive; the ability to get the energy from the windmills to large population centers would be complicated by flaws in the electric grid. Wind energy may end up being local for years. Those who want to take advantage of the “green” benefits of turbines may have to live or work near them.

Solar energy is also in the midst of a painful transformation from being the poster child for alternative energy to one in which a number of companies have folded and many others are in deep trouble. Large solar power firm LDK Solar (LDK) posted poor quarterly results and its stock lost almost one-fifth of its value in a day. The recession has cut investment in alternative energy and there is still only limited proof that solar technology can be deployed broadly enough to be a substantial, global new source of energy. One or both of these issues has decreased demand enough so that there is an oversupply of unsold solar panels. Solar energy companies are being squeezed by both falling sales and worsening gross margins.

US reluctant to sign a civil nuclear accord with Pakistan

LAHORE: Despite Pakistan’s frantic efforts to conclude a civil nuclear accord with the United States to overcome its crippling energy crisis, the United States is reluctant to oblige due to the trust deficit between Washington and Islamabad on the issue of nuclear proliferation.

India’s fast nuclear reactor project costs rise 40 percent

CHENNAI - India’s first fast breeder nuclear reactor, coming up at Kalpakkam near here to produce 500 MW of power, is facing a cost overrun of over 40 percent, but officials hope it will achieve criticality by September 2011 after a year’s delay.

Award-winning economist addresses energy crisis

BUTTE VALLEY — The world is poised for the third industrial revolution, said economist Woodrow Clark, a keynote speaker at Butte College's third annual Sustainability Conference, which continues today.

...The second industrial revolution relied on fossil fuels and has lasted 100 years, Clark said during an afternoon presentation.

The third industrial revolution will involve renewable resources and "leveraging resources in a way that doesn't keep violating our environment," he said.

Peak energy and cultural fragmentation

Americans look very fond of talking about secession despite being quite homogeneous culturally speaking. European, on the other hand, are very wary of it. A Free Vermont movement, for instance, would be unthinkable in France, and even in areas where independence could have some legitimacy, it is rarely claimed. The party I belong to, for instance, is adamantly against secession and demands only a large internal autonomy, similar to the one American states enjoy, within a federal Europe, and we are quite typical in that matter. Only extremists, or the very successful, fight for outright independence.

Yet some kind of independence is bound to come. The French state, as it exists today, simply cannot survive peak energy. At some point in the future local authority will take over even if they still pay lip service to a rump central authority. The problem is that without some kind of shared identity, those successor polities will be weak and likely to fight among themselves. This is probably what doomed, culturally speaking the lowlands sub-roman britons : their tribal identity still living but weakened by romanization they were subverted by Germanic speaking who converted them to their language and culture.

Organic producers suffer as green fingered customers go it alone

An increase in amateur gardeners keen to grow their own food is taking its toll on organic farms and shops that deliver vegetable boxes.

Hundreds of health food shops and farms around the country now offer a vegetable box scheme whereby they deliver seasonal produce to their customers each week. But in the last year they have had to compete with an increasing army of credit-crunched householders who have decided to give vegetable growing a go.

A spokeswoman for Abel & Cole, one of the biggest box scheme providers, said: "Trading has been difficult this year. It was tough in the spring and this summer we have been affected more than usual because more people are growing their own seasonal produce."

After years of decline, Cleveland aims to go green

CLEVELAND (Reuters) – Orchards and vineyards may soon spring from the blight of thousands of abandoned buildings in Cleveland, a city struggling to rise from years of decline and home foreclosures.

Once a proud manufacturing powerhouse, Cleveland has lost nearly 10 percent of its population since 2000, the fastest drop of any U.S. city except for hurricane-hit New Orleans.

...The county has 36,000 abandoned homes that are a magnet for crime. As many as 18,000 must be demolished at a cost of several hundred million dollars. Proposals for the empty land include orchards and vineyards to help property prices recover, as few expect the city's population decline to reverse.

"This isn't a market for new housing," said Mark Seifert, executive director of local nonprofit the East Side Organizing Project. "And it certainly won't be in my lifetime."

Bank of America May Expand Commodities Group 25% in Three Years

(Bloomberg) -- Bank of America Corp., the biggest U.S. lender, may expand its metals and energy team by 25 percent in the next two to three years as a rebound in commodities attracts billions of dollars of investments.

Iran: Whose War?

A nuclear power industry, conversely, is sound strategic thinking for Iran. Peak oil, the point at which global oil production can no longer keep up with the world’s energy demand, has already occurred or will happen very soon. At that point, humanity will have to turn to other forms of energy or turn the clock back on its technology-centric infrastructure, which could lead to a worldwide “Road Warrior” scenario. No alternative solution has materialized that can provide the amount of energy that nuclear power can generate.

Any oil-exporting country that hopes to emerge as a regional power in the post-peak world order will need to have an independent nuclear industry in place when the wells run dry. The key to having truly independent nuclear energy is the ability to refine your own uranium. Telling Iran that it can have a nuclear energy industry but can’t refine its own uranium is like saying it can have an auto industry as long as it makes its cars in the U.S. from American steel and uses American labor. Dependence on other countries for refined uranium is a strategic liability that Iran will not and should not agree to. An independent nuclear energy industry is the only chip Iran brings to the table, and we’re asking them to hand it over before they sit down.

Sinochem builds new refinery, eyes Kuwait, Total tie

BEIJING (Reuters) - Chinese state oil trader Sinochem is quietly building its first wholly-owned major refinery in southern China, and is eyeing strategic partnerships with Kuwait's state oil firm and French major Total, industry officials told Reuters.

Sinochem aims to complete the 240,000 barrels per day plant in Quanzhou city, Fujian province in 2012. It is set to be China's next major greenfield refinery as the world's No.2 oil consumer adds refining capacity to fuel strong economic growth.

StatoilHydro lines up Snohvit down-time

Norwegian operator SatoilHydro said today the Hammerfest LNG plant at Melkoya, which recieves gas from Snohvit, in northern Norway will be shut down on Saturday for up to three months for upgrading and maintenance work.

Iran says Opec ceiling stays

Iran's Opec governor Mohammad Ali Khatibi said the oil cartel will not consider any changes to its crude output ceiling increase given the high levels of oil inventory in consuming countries.

"Because oil has been stored in various parts of the world, Opec will not discuss its ceiling cut in its next meeting," Khatibi said in an interview with Mehr news today.

Firms' concerns freeze 'oil city' hopes in Venezuela

Reporting from Soledad, Venezuela - Like nearly everyone else in this sleepy fishing town, unemployed former soldier Miguel Fernandez is eagerly anticipating the massive "oil city" that President Hugo Chavez has promised to build here on the banks of the Orinoco River.

"There was a rumor last week that the first well was being drilled. Half the town rushed out there looking for work," Fernandez, 23, said. But the project was only a small field test, and there were no jobs. "We were all disappointed."

Chavez's vision for the huge new oil complex 400 miles southeast of Caracas will cost $36 billion and ostensibly add half a million barrels of oil a day to Venezuela's output by 2012, reversing a decade-long decline in output.

Venezuela oil union vote delayed

Elections to determine the leaders of Venezuela's oil unions have been pushed back again as the government struggles to keep opposition forces at bay and ensure candidates who support President Hugo Chavez emerge victorious.

Ship operator pleads guilty in SF Bay oil spill

SAN FRANCISCO – The Hong Kong-based company that operates the cargo ship that caused a 2007 oil spill in San Francisco Bay pleaded guilty Thursday to criminal charges.

Fleet Management Ltd. pleaded guilty to charges of obstruction, making false statements and negligent discharge of oil, and agreed to pay a $10 million fine under a deal reached with prosecutors. A federal judge still must approve the deal.

Stephen Schork: Oil Rallies If Stock Market Does

Norman: In the last interview, I said let’s take a look at the whole green movement and alternative energy. We have a president in place now who is really behind this trend. What sort of an impact, if any, do you think it’s going to have in the short term and in the long term?

Schork: Well, ultimately I think it has an upward skew on price, and my concern is that with this administration … unlike the prior administration – with the Bush administration, all things were on the table. Now this isn’t going to be a pro-Republican/Democrat argument, but what is clear with this administration is their outward hostility toward the oil and gas industry.

If we just take some of the quotes on Reuters and on Fox and so forth with regard to their stance, it is a nasty rhetoric. So I think this administration, unlike the other administration, has taken the approach that it’s all or nothing, that we’re putting everything behind the green agenda, which I fully support.

McLuhan's Wake: Media and Environment

"Too much of anything," McLuhan said, "will always bring the opposite of what you thought you were getting." Coal, the new fuel of the 18th century that was supposed to save England's forests by replacing wood as the Industrial Revolution's source of power, is now threatening forests with toxic air and global warming. The airplane travel that was supposed to make faraway and exotic places reachable, has turned the world into crowded tourist traps of homogenized sameness -- "No one goes there anymore," said Yogi Berra, "it's too crowded." The bulldozers, excavators, chainsaws and factories that were supposed to make our human lives so much easier, are now causing the environmental degradation that might make our lives -- and the lives of many other creatures -- extremely difficult. In compliance with the Fourth Law of Media, McLuhan predicted ominously, "Even the global village is coded, in the end, to reverse."

Do Lawmakers Really Understand The Energy Markets?

In her advocacy for the tougher regulations, Sen. Maria Cantwell (D-Wash.), a member of the Senate's Energy and Natural Resources Committee, said this year's hike in oil prices raised questions about manipulation of the markets.

"Oil supplies are near 20-year highs," she said in a written statement, "and demand for oil is at a 10-year low -- so why have gasoline prices gone up a dollar a gallon since the beginning of the year?"

Why, indeed?

Wake-Up Call In The Dark

At 4:11 p. m. on Aug. 14, 2003, Ontario and much of the northeastern United States experienced the largest blackout in North America's history. But dark times can have a silver lining: Although the blackout was later traced by a Canada-U. S. joint task force to a series of errors at FirstEnergy Corp. of Ohio, it raised unprecedented public awareness about the risks of an over-taxed grid.

"The blackout brought home -- literally -- the fact that we assume electricity will always be there. The truth is, the grid can't deal with our constant demands: running air conditioners 24/7, firing up a dishwasher when it contains four glasses and four plates, putting two pairs of pants and three shirts into the dryer," says Torontonian Jocelyn Laurence, former editor of Green Living magazine and partner in Castlebridge Communications. Ms. Laurence took her cue from the blackout to teach her children more about energy conservation and to be extra diligent in her electricity use, both at home and at work.

Utilities Hatch Ambitious Plans to Own and Operate Large-scale PV Projects

In years past, solar photovoltaic (PV) installations were largely done in a piecemeal fashion, planned and implemented one rooftop or ground-mounted system at a time. But as solar technology has improved and as state governments demand more renewable generation through portfolio standards, large-scale projects are becoming more common. A growing number of utilities, rather than depend on independent power producers to build these projects, have launched multi-million dollar initiatives to own and operate their own solar assets.

Lithium and Obama’s Electrification of America

America’s future energy course is being charted today because of the ramifications of peak oil, because cars pollute too much, because of global warming, because America wishes to end her dependence on foreign supplied energy and to be blunt… Americans need jobs.

“A new energy economy is going to be part of what creates the millions of new jobs that we need,” President Obama.

Because of these reasons a whole new industry, a domestic automotive and industrial lithium-ion battery industry, is going to be built.

The low-hanging fruit

At Monday's National Clean Energy Summit 2.0 at UNLV, an array of high-powered political and industry leaders gathered to talk about renewable energy, climate change and the recession. It was a wide-ranging discussion, covering almost every aspect of the green movement.

But a thread running through the conversation had a more practical, pragmatic flavor. According to several participants, the fastest way to reduce greenhouse gas emissions and grow the economy is to concentrate on energy efficiency. This was described as going after the "low-hanging fruit."

Climate-Protection Talks Make ‘Marginal’ Advance, Pershing Says

(Bloomberg) -- Slight progress was made at United Nations climate negotiations in Bonn to bridge gaps between commitments industrialized and developing nations are prepared to make, U.S. lead negotiator Jonathan Pershing said.

The focus of five days of talks ending today was to shrink a 200-page negotiating text toward what UN author Michael Zammit Cutajar said should be about 30 pages by December, when envoys plan to approve an accord in Copenhagen. Only “marginal” progress has been made, Pershing said today in an interview.

Money key stumbling block at UN climate talks

PARIS (AFP) – Developing countries will need billions to curb carbon pollution and cope with its consequences, and where that money will come from has emerged as a major stumbling block as another round of UN climate talks winds down in Bonn.

The five-day negotiating session ends Friday, with many participants expressing frustration at the lack of progress only four months ahead of the Copenhagen climate conference slated to deliver a planet-saving global climate treaty.

Dumpster diving + computer = 100 trees

DOBBS FERRY, New York (CNN) -- Jude Ndambuki teaches high school chemistry, but when he's not in class, you might find him Dumpster diving for discarded computers.

For the past eight years, the Kenya native has been refurbishing computers, printers and other electronic educational resources otherwise headed for landfills, then sending them to grateful students back home.

"The children in Kenya have very few resources; even a pencil is very hard to get," said Ndambuki, 51, who lives in the New York City suburb of Dobbs Ferry. "Being one of the kids who actually experienced very dire poverty in Kenya, I feel any part that I can play to make the life of kids better, I better do it."

In lieu of compensation for the considerable time, expertise and expenses he devotes to his Help Kenya Project, Ndambuki asks that recipients plant 100 trees for every computer they receive. By connecting computer recycling, educational development and environmental conservation, he hope

Transition is the mission for sustainability collective

What if most of the yards in Ashland grew some sort of edible garden? That's one of the goals of Transition Town Ashland, a group that aims to increase local resiliency to deal with the challenges of uncertain economic times: climate change, exponential population growth and peak oil, organizers said.

The (un)Happy Planet Index 2.0

In the final year of the first decade of the third millennium, humanity stands at a crossroads. Depending on the choices we make now, future generations will either look back at our time with anger or with gratitude. Currently, we are set on the former course. Should we continue our reckless over-consumption of resources and destruction of the environment, driven by an insatiable appetite for economic growth, our descendants will face a world of scarcity, uncertainty and conflict.

Country oblivious to next oil shock

Currently the oil price is around US$70 a barrel - in the midst of the deepest post-war recession on record.

Just four years ago today's "depressed" price would have been a record high.

Where do we think oil will be trading when economic recovery and oil demand returns? The price may be volatile but the trend will be ever upwards. Have we learnt the lesson that global Gross Domestic Product is inextricably linked to cheap and abundant oil? As prices rise, global GDP falls.

Robert Hirsch is an energy consultant to the US Department of Energy. His studies of the link between past oil shocks and global GDP suggests there is roughly a one to one ratio - ie, for every 1 per cent decline in global oil production, there is a commensurate 1 per cent fall in global GDP.

Demand forecasts IEA forgets decline fields

Still, one main issue has not been covered. Due to lower global investments in upstream and still high costs of projects (deepwater, heavy crudes or sour crudes), the normal production levels of most fields could be under pressure. If no investments are being put in revamping existing production capacity, based on assessments production is expected to be decline by 6-10% per year. When taking the lower base line, this would mean a shortage of around 5 million bpd. The latter production decline needs to be countered, additional investments are needed to revamp mature oil fields, set up IO and EOR operations and stop decline. At present, this has not been the case. Most mature oil (and gas) field regions are facing lower investments. North Sea operations, Saudi Arabia's giant fields or Iranian operations, are facing continuing decline rates. Supply could be hit dramatically if this is not countered soon. Demand will be increasing, if the global economy recovers. Supply is not as secure as presented by the IEA. The statements that Russian oil production has increased is not caused by higher overall production but largely by lower internal demand and more available volumes for exports. Moscow also needs more cash to quell growing domestic unrest, aka exports are being targeted. Some of this additional crude supply could again be threatened if gas supplies continue to falter the coming years.

'Our country will have absolutely no control over its energy prices'

If the oil depletion allowance and intangible drilling costs are eliminated as tax incentives as proposed, Americans will see our imported oil dramatically increase by 20% to meet current energy needs. The bottom line for the American consumer is that our country will have absolutely no control over its energy prices and needs.

China May Boost Energy, Mining Acquisitions by Half

(Bloomberg) -- China, unfazed by failures to invest in Rio Tinto Group and Unocal Corp., will boost spending on oil and mining acquisitions by at least half this year to take advantage of lower valuations after commodity prices slumped.

Gas flows through Ukraine tumble

Gas transit from Central Asia and Russia through Ukraine towards Europe fell 37.1% in the first seven months of this year compared to the same period a year ago.

...Europe and the former Soviet region have slashed their gas consumption this year as the global economic crisis hits their industries and production slows, reported Reuters.

LNG Surplus to Reach a Record, Wood Mackenzie Says

(Bloomberg) -- Liquefied natural gas producers may earn smaller margins as low demand and new export plants lead to a record surplus and lower prices, Wood Mackenzie Consultants Ltd. said.

New projects in Qatar, Yemen and Indonesia may reach capacity next year, said Frank Harris, global head of LNG at the Edinburgh-based firm. Ventures planned for 2015-20, including those helmed by ConocoPhillips, Royal Dutch Shell Plc and Woodside Petroleum Ltd., may be forced to sell the fuel for less as supplies exceed consumption.

“There’s quite a lot of surplus this year,” Harris, who has advised international oil companies, said by telephone from Edinburgh yesterday. “Next year will be worse and it may peak in 2011.”

Crude Oil Risks Pullback to $60 Next Week: Technical Analysis

(Bloomberg) -- Crude oil needs to rise above $73 a barrel by next week or face a pullback toward $60, Schork Group Inc. said.

Oil has been unable to rise above an eight-month high of $73.38 a barrel reached on June 30, even as it crossed $70 each trading day this month. If the buyers fail to break resistance, they risk losing control within days, according to Stephen Schork, president of the Villanova, Pennsylvania-based consultant.

Oil won't rise even as economy recoups: report

NEW YORK (Reuters) - World oil prices are unlikely to rise much even as the global economy rebounds, Oil Analyst Ed Morse writes in the next issue of Foreign Affairs.

Oil prices are unlikely to go above $75 to $85 a barrel, as world output capacity rises and demand stagnates after oil prices spiked to a record $147 last year, Morse, the managing director of LCM Commodities, writes in Foreign Affairs' upcoming September/October issue.

OPEC kingpin Saudi Arabia has massively increased output capacity, which could help keep oil within the $40 to $75 a barrel range Morse claims is desirable for the Kingdom.

Oil May Fall as Supplies Climb Amid Weaker Demand, Survey Shows

(Bloomberg) -- Crude oil futures may fall on speculation that U.S. fuel inventories will extend gains as the recession saps demand, a survey of analysts showed.

Twenty of 40 analysts surveyed by Bloomberg News, or 50 percent, said futures will decline through Aug. 21. Ten respondents, or 25 percent, forecast that the market will rise and 10 said prices will be little changed. Last week, 58 percent of analysts said oil would fall.

Wall Street players oil up rigged game

You'll recall the great oil price rise of 2008, which not only doubled gas prices across the border, but led to worldwide food riots in poorer countries. In retrospect, what made this price hike truly weird was that oil production had actually increased during this period, while global demand had dropped. The price hike was apparently in defiance of the laws of supply and demand.

Was this Econ-101 nightmare the result of "peak oil," or what? Or could Wall Street have had a hand in this, along with similar episodes in the past?

In a recent article in Rolling Stone magazine, journalist Matt Taibbi implicates the New York investment bank Goldman Sachs in "every major bubble since the depression," including the late '90s tech stock mania, the subprime real estate craze, and the bipolar commodities market of 2008.

Shell halts Utorogu outage on pipe attack

Supermajor Shell said today it had stopped its Utorogu gas plant in Nigeria's southern Niger Delta after an incident on the Escravos-Lagos Pipeline System.

The pipeline system carries gas from the Niger Delta to feed power stations in the southern part of Africa's most populous nation, including the commercial hub of Lagos, and feeds into the West African gas pipeline structure.

Norway oil fund surges, owns 1 pct global stocks

OSLO (Reuters) - Norway's $397 billion sovereign wealth fund said on Friday it now owns 1 percent of the world's stocks and signalled the end of its emerging markets asset ramp up after posting its best ever quarterly results for April-June.

Buoyed by a broad financial market rally from the depths of the global downturn, Norway's oil fund posted a 12.7 percent return on its investment, or a $45 billion gain -- its biggest quarterly gain in relative and absolute terms.

China’s July Power Use Rises 6% on Economic Recovery

(Bloomberg) -- China’s power demand rose 6 percent in July as the government’s stimulus spending boosted economic growth and increased industrial use of electricity.

Chubu Finds More Damage at Nuclear Plant After Quake

(Bloomberg) -- Chubu Electric Power Co. may burn more fossil fuels to keep lights on and machinery running in Nagoya, Japan’s third-largest metropolitan area, as the utility finds more earthquake damage to its Hamaoka nuclear plant.

Both functioning reactors at Hamaoka shut down after a 6.5- magnitude quake on Aug. 11 and as of today Chubu found 39 problems, including neutron monitor and auxiliary transformer malfunctions. There’s no estimate when the reactors will resume operation, spokesman Toshimitsu Shibata said by phone.

Chesapeake Says Waste Wells May Have Caused Texas Earthquakes

(Bloomberg) -- Chesapeake Energy Corp. wells drilled through the Barnett Shale, the biggest Texas natural-gas field, may have caused earthquakes in the Dallas-Fort Worth area, the company and university scientists said.

Oklahoma City-based Chesapeake shut both wells, used to dispose of saltwater that is a byproduct of gas production, as a precaution after university seismologists told executives June 29 that the center of some quakes lay near the base of one of the wells, Steven Turk, vice president of the company’s southern operations, said in an interview.

Volt vs. Prius: What's the better deal?

NEW YORK (CNNMoney.com) -- The Volt may get 230 mpg. GM says it will cost only 40 cents to fuel up the car from a household outlet. But it still may not be worth it to buy one.

So what's the problem? You won't save enough on fuel costs to compensate for the likely higher sticker price.

Blacklight Power Returns With More Lab Validation

The latest in its saga is news that three researchers at Rowan have run a second round of tests on Blacklight’s solid fuel. The trio say they have verified that the fuel is capable of continuously releasing more energy than is put in to start the reaction. And this time, they made the fuel themselves rather than receiving from the company — a significant difference from the first test, when associate professor Peter Jansson told me he wasn’t sure what Blacklight did to prepare the material.

Most importantly, the Rowan group says they have gotten 6.5 times more energy than the maximum energy potential of the materials involved. The implication is that Blacklight’s special hydrogen atom, the “hydrino”, is making an appearance. Hydrinos supposedly have an electron in an extremely low orbit around the nucleus; getting it there releases the extra energy.

Climate change fueling forest fires in Europe: Greenpeace

MADRID (AFP) – Greenpeace Thursday warned of an imminent "global emergency" as climate change fuels forest fires that have already destroyed tens of thousands of hectares in southern Europe this year.

"Climate change is driving a new generation of fires with unknown social and economic consequences," said Miguel Soto, Greenpeace Spain forests campaigner.

Cheap Climate-Change Fix Needed, Lomborg Center Says

(Bloomberg) -- Cheap solutions are needed to slow global warming such as painting roofs white rather than programs to cut carbon emissions that may cost countries $250 billion a year, a study released by Danish professor Bjoern Lomborg said.

India against US trade barrier for climate policy

BONN, Germany – India's chief climate change negotiator says his country wants a global warming agreement that forbids trade barriers against nations that refuse to accept limits on their carbon emissions.

India has introduced language into a draft climate change accord that is largely directed against efforts by U.S. Congress to impose trade penalties on goods and services from countries that do not commit to specific action against greenhouse gases.

While their glaciers melt and rivers dry, China and India only add to climate woes

China and India are partners in crime. Both countries like to preach to the West that the industrialized nations must do more, set higher targets, reach their goals faster, while they continue their own heedless behavior. In fact, China and India have agreed on an emissions goal - for the Western nations, not themselves: A 40 percent reduction in greenhouse gas emissions by 2020 - probably an impossible target in just 10 years.

As if that were not enough, the two states are also calling for the United States and other Western nations to pay them up to 1 percent of their gross domestic product for climate-change initiatives. One percent of the U.S. GDP comes to $14.4 billion. Yu calls all of that "quite fair."

Climate Change Measure Should Be Set Aside, U.S. Senators Say

(Bloomberg) -- The U.S. Senate should abandon efforts to pass legislation curbing greenhouse-gas emissions this year and concentrate on a narrower bill to require use of renewable energy, four Democratic lawmakers say.

“The problem of doing both of them together is that it becomes too big of a lift,” Senator Blanche Lincoln of Arkansas said in an interview last week. “I see the cap-and-trade being a real problem.”

Antarctic glacier 'thinning fast'

One of the largest glaciers in Antarctica is thinning four times faster than it was 10 years ago, according to research seen by the BBC.

A study of satellite measurements of Pine Island glacier in west Antarctica reveals the surface of the ice is now dropping at a rate of up to 16m a year.

Since 1994, the glacier has lowered by as much as 90m, which has serious implications for sea-level rise.

Study Finds Big Storms on a 1,000-Year Rise

The North Atlantic Ocean has spawned more hurricanes and tropical storms over the last decade than it has since a similarly stormy period 1,000 years ago, according to a new study.

The research, published yesterday in the journal Nature, tries to trace the pattern of storms along North America's Atlantic and Gulf coasts back to A.D. 500, well before humans were recording weather observations.

GM says:

"The price of oil is going to go up"

Last sentence in article about the Volt.



So is the price of electricity, especially the electricity that is generated by burning oil, coal and natural gas. Next thing you know GM will be promoting wind and solar ;-)

And, from a financial standpoint, it might be best to keep your Prius...

Volt vs. Prius: What's the better deal?

It'll take higher gas prices, or a big subsidy from GM, for the new plug-in Volt to be cheaper to drive than the Toyota. But that doesn't mean it won't find buyers.

The Volt may get 230 miles per gallon, and GM says it will cost only 40 cents to charge up the car from a regular household outlet. But guess what...it still might not be worth it to buy one.

The problem: You might not save enough on fuel costs to compensate for the likely higher sticker price.

My personal situation is as follows: I own a Prius, and bought it not just for fuel savings but also to make a statement and vote for the development of these cars with my wallet. I know I could have purchased a Kia and save money in the long run, but it's a vanity purchase.

Sorry, $40K is way too much for a car... GM needs to look at their demographic...

My personal situation is as follows: I own a Prius, and bought it not just for fuel savings but also to make a statement and vote for the development of these cars with my wallet. I know I could have purchased a Kia and save money in the long run, but it's a vanity purchase.

I wouldn't be so sure your decision will cost you money in the long run. Obviously if gas spikes to $10, you will find yourself ahead. But, even if fuel remains cheap, the Prius was cited as having lowest overall cost of ownership. I bought one for much the same reasons as yourself. Although I like to justify such decisions on purely financial grounds -as I think there are a lot of less altruistic people for which that argument is needed, it clearly wasn't the whole reason for the decision.

Demand forecasts IEA forgets decline fields

Still, one main issue has not been covered. Due to lower global investments in upstream and still high costs of projects (deepwater, heavy crudes or sour crudes), the normal production levels of most fields could be under pressure. If no investments are being put in revamping existing production capacity, based on assessments production is expected to be decline by 6-10% per year. When taking the lower base line, this would mean a shortage of around 5 million bpd.

This is precisely what dispersive discovery predicts. Even with a continuously accelerating search effort to discover and develop new fields, a decline will set in. The logistic sigmoid provides a good example of this. The characteristic shape is a result of a continuous exponential increase in discovery effort, even well into the downside tails.

The fact that this report states that even more search and development is required shows how futile the entire scenario (and their analysis) is. These analysts really do lack the insight that a good constrained resources model could provide. They still live in the world of unconstrained supply & demand.

And in what may be a more important development in hybrid EVs,

The world's lightest electric bicycle.

25 miles on battery (vs. 40 on Volt), but at a much lower price. 90 minutes recharge. Muscle instead of ICE assist.

Review with internal link to manufacturer at


Best Hopes for Bicycles,


I think that electric assist bicycles are a fantastic idea, especially for people in urban areas. Purists might say that a person should be able to do without the assist, but in some areas, the hills can be killer if you're not in fantastic health. Not only that, just because a person has the capability to make it up that hill on just muscle power doesn't mean that they want to. (You might not want to get all sweaty.)

These and electric scooters, I predict, will make a large impact in US urban areas as prices of gasoline shoot up to 10 dollars a gallon and higher. (Assuming we don't have full economic collapse by that point.)

~Durandal (http://www.wtdwtshtf.com)

If the hill's too steep get off & walk the bike up it.

If the hill's too steep get a different gear. What I notice is that many people tend to lack the balance to maintain a slow forward pace in some ridiculously low gear. It is actually very easy to climb any paved grade as long as you have the right gear and can sustain a slow attack speed.

Now, if you have a gravelly rutted hill, all the minor adjustments necessary can prevent that.

The point of a bicycle is economy and simplicity. Multiple gears, batteries and electric motors, bells & whistles, add cost and complexity to a bike. I bought my kids fancy mountain bikes and they just broke them. So I bought them sturdy used single speed bikes and they had a much harder time breaking them. You don't need ultra-low gearing or an electric motor to get up a hill on a bike. All you need to do is get off the thing and walk it up the hill. Doing so is probably quicker than pedaling like crazy while going so slowly that you fall over. All this technocopian infatuation with gadgetry & gimmickry is stupid. Such infatuation is going to interfere with accommodation to the harsh post-PO reality, in which common sense not gadgets will be necessary for survival.

Yes, you are right! I commute 6km each way to work on my 11 year old Miyata 3-speed. Rain or shine. I do get off the bike and walk up the hills. It`s easy and pleasant to walk too. If my job weren`t so far away I`d prefer to walk the whole way!

My bike is very simple so it never breaks and I guess I`ve saved quite a bit of money by not getting a car.
Also no expensive fitness club for me!

I`m lucky too in that there are small safe and infrequently traveled country roads here (Japan) and bike paths and sidewalks. As the economy gets worse and worse I notice fewer and fewer cars passing me ---cars that are around are tiny and going slowly---and I really cheer about that yay!!!

Bizarre claims. Ever look at a road bike from the year 1900 or so and compare it to today's road bike? Pretty much the same geometry. So much for "technocopian infatuation".

I actually ride a single speed bike to work, but wouldn't think of it when riding in the Alps where you occasionally run into 25% grades.

There are so many things wrong with the comment.

Things do break. Jeez, my single speed hub was rendered useless one day last winter when some water vapor iced up inside it and caused the freewheel mechanism to stop working. I essentially had to skateboard the bike home.

As with everything, you get what you pay for. Spend money for some good componentry and shifting is effortless.

Kids love their mountain bikes but they try to pedal too much and get tired too fast. They eventually learn.

Take a low-geared mountain bike and ride alonside a person walking up a hill, maintaining their walking pace. After awhile you start feeling guilty because it feels like you are lounging in a lazy-boy compared to the effort they are expending.

If the hill's too steep get a different gear. What I notice is that many people tend to lack the balance to maintain a slow forward pace in some ridiculously low gear. It is actually very easy to climb any paved grade as long as you have the right gear and can sustain a slow attack speed.

Partly it is the case that many stock bicycles don't have very low gears. That and the fact that few would try to learn to acquire the balance necessary. I used to ride Mtn Bikes, and it is true that a skilled rider with low enough gearing can climb incredibly steep slopes. The limit being either when tire/road friction fails, or it becomes impossible not to fall over backwards (i.e. you gotta be able to keep your center of gravity uphill of the rear axle). But those angles are usually well above 30degrees!

But in my younger days I used to do balance stuff, like tightrope walking, riding bikes across glass smooth ice etc. And even with that sort of training, and the determination represented by the effort needed to acquire it, steep hill climbing is never easy.

Agreed. Electric bikes can get people who would drive instead onto bikes. Nothing wrong with that.

Heck, look at how popular powered bicycles are in places like China. Even people who don't have cars and are experienced at bicycling like to have some help on the hills. Especially if you're towing a load.

Higher-end but stock road bikes have a fairly high gear ratio, but the level right below that typically has a third "granny" chain-ring. I use a regular 53/39 set in the Alps and usually have no problem. There are also compact cranks that allow an extra lower gear. Pro riders often use these because they like to spin fast going up hills, so they are willing to drop a gear to maintain a faster pedaling cadence.

Any Mtn Bike has low gears that you don't even have to worry on any asphalt.

Partly it is the case that many stock bicycles don't have very low gears.

Yup. For a time some years back they were derided as "granny gears". Yet another triumph of fashion, with perhaps an admixture of testosterone, over usefulness. I think it's considerably less work to ride up a hill than to walk up it (unless there's just too much loose gravel or it's really super-steep), but maybe that's just me.

Also, I'm a bit lost here - what on earth is this balance issue that keeps coming up (or is that falling down?); just how slowly are we talking about? Are we talking normal riding for some utilitarian or at least quasi-utilitarian purpose, or extreme-sport mountain biking? I routinely see people ride exceedingly slowly while they're waiting on traffic, or for an opportunity to pass a pedestrian (many of whom waddle deathly slowly indeed) on a path, all the more so if they're clipped in.

Of course, I can also think of a particular paved spot that's marked with red-circle signs as too steep, but really it's not difficult at all, just avoid doing something stupid such as putting your entire upper body over the handlebars and you're fine. The signs are merely bog-standard lawyer-excreta deposited by Safety Nazis with far too much government-overpaid time on their hands. If this is the level of issue we're talking about, well, what's there to say?

The "balance" thing is me making observations on how inexperienced cyclists feel they have to pedal like crazy going up a hill, otherwise they feel like they will fall over. These are the same people that can do unbelievable moves on ice skates, BTW .. as another observation.

I agree that it is all a matter of practice.

I knew a guy who would compete in ultra-marathons like the Death Valley run, but who would rather take an elevator than climb stairs because he didn't want to risk breaking a sweat.

I worked with a guy that ran stairs for exercise but would never walk up them because he was too tired. I can make it up a few flights about the same time as folks disembark from the elevator -- I just don't get it. All of us sit around all day long.

It's just not socially acceptable to sweat in the office or in formal situations. Remember the grief John Kerry got because he visibly sweated under the lights during his acceptance speech?

By the same token it is not acceptable business relations for someone to know that you ride an electric bike into work. Stylishness trumps practicality in many situations.

For me, I just don't care, the rule I follow is try not to wear polypropylene or wool if you are going to sweat. I don't seem to notice my own smell unless I have polypropylene or wool on.

Biking is perfectly acceptable in places like NY. Sweating isn't, though. A lot of people find a way to shower after they get to the office, or at least change clothes.

This is one of my sister's pet peeves. She thinks they should ban dry cleaners. If they banned dry-cleaners, wool suits would go the way of the dodo, at least in summer. Then workplaces couldn't make people dress up in wool suits...and wouldn't have to air-condition the building to subarctic temperatures so that it's comfortable to be dressed that way.

One building I frequent went from "ice cold" in years past to "pretty warm" this summer -- it used to be warmer indoors in winter than in the summer! But now I can't do more than a flight or two without consciously going slowly or I break an undesirable sweat. The receptionists that used to wear sweaters and have heaters under their desks are happier, but I gotta say I like it cold year-round.

For most of the places I've been in Austin and Colorado, some people think you're crazy but you're respected in middle-professional circles for biking year-round, as long as you keep tidy at work. Dallas, Birmingham, and Atlanta, not so much -- but my exposure has been limited. DC, anything goes.

"...or at least change clothes."

I take a change of clothes. I ride to and from work wearing bicycling clothes, and take my work clothes and shoes in a duffel bag, strapped to my bike rack on my bicycle. I just need to get to work about 15 minutes before work starts, and change clothes and shoes.

Biking is perfectly acceptable in places like NY. Sweating isn't, though...

True enough, and yet what's a little amusing is that NYC subway stations, especially on the numbered (former IRT) lines, which are mostly cut-and-cover construction with very thin cover topped with blacktop, are like some combination of a furnace and a sauna throughout the summer and into the early fall. Five minutes is more than enough time to become soaked.

Most people take the subway into Manhattan and downtown Brooklyn, not because driving wouldn't be faster - astonishingly, in many cases it would be - but simply because it's physically impossible to provide the parking spaces. And they end up smelling like something that's not a rose, same as the cyclists.

I used to be a NYC subway commuter. Yes, it can be very hot in the summer (contrary to Alan's claims). But it's not that bad, because usually, you're not in the station for long. Now, if you get a subway car with broken air-conditioning, that's hell on earth.

I don't think it's the smell that's the big issue. It's the look. You don't want to be dripping sweat all over the paperwork, nor looking sweaty and grungy.

Nobody could smell John Kerry on television, yet a huge deal was made about his visibly perspiring during his acceptance speech. So much so that the two parties ended up arguing about what temperature to set the thermostat during the debates - the GOP wanted a higher temp, hoping to make Kerry sweat.

I do not remember ever claiming that subway stations could not get warm. The extent that the tunnels between lines can warm up is a problem in thermodynamics (after 100 years even large heat sinks can get partially saturated).

London had the "Cool the Tube" contest, looking for ideas, and found one.



About sweating as you bike to work----I use a mixture of ethanol and a flower oil (such as lavender or bergamot---I mix it myself) on the skin where I sweat. This seems to counter odors. If it`s really hot then the best thing is a few drops of Chanel no. 5. Even if you sweat, Chanel no. 5 will COMPLETELY take all the odor away and you`ll smell like Chanel no. 5---in fact the sweat seems to activate the power of the perfume.
In my experience sweat dries and it seems to stay in the clothing not on the skin. For the face and neck, a simple wash with a damp handkerchief. Other than that, good perfume works very well. Sure it`s expensive but it`s so much more fun to buy than gasoline!!

Perfume is a worse curse than sweating. Chemical sensitivity and the headaches that it causes other people outdoes the occasional gym-room odor.

I'm inclined to agree. I hate perfume. Chanel No. 5 is among the worst. Along with Giorgio.

It's just not socially acceptable to sweat in the office...

As a favor to a coworker 15 yrs younger than me who has back problems, I've been pruning hybrid poplars with a chainsaw this summer in my spare time. (I'm not ordinarily directly involved with poplar research.) The temp here has been in the 95 - 98^oF range in the early afternoons lately. There's not a breath of breeze in the poplar plantation and those irrigated trees are transpiring so heavily that in amongst them the humidity must approach 100%. I run one tank (approx. 1 hr.) and I'm as soaked with sweat as if I'd been pounded with a brass Rainbird 30H impact sprinkler @ 80 psi. I come into the office to rehydrate & cool down under the evaporative cooler literally drenched with sweat. Guess this explains why I have no social life. :)

Purists said the same thing about bicycles with gears at one point, also.


It has been said that de Vivie invented something which already existed, in Britain, and simply made the derailleur better known.

Traditional cyclists did not appreciate his gears. The organiser of the Tour de France, Henri Desgrange, dismissed them in L'Auto as fit only for invalids and women. De Vivie campaigned for his invention and rode every morning up the col de la République for the joy of passing riders without them.

Gears are important. You can really mess up your knees by climbing hills in too high a gear. Take care of your knees and they'll take care of you, even more so in a world where people are walking and biking more.

Also the high gears will deplete faster the muscle-glycogeen storage, which deplete fast anyway if you (have to) push hard in hill or mountain climbing. So keeping a high cadence is better for two reasons.

Our Insane World:

You guys have seen the one of the person walking the dog, holding the leash out the window of the SUV, right?

Darn -- I hope that picture is "photoshopped". If it's really true, -- hmmm it can't be -- can it?

As if it's a bad dream and when all TODers wake up -- it'll be gone.

I really, REALLY hope that picture is photoshopped. Yow!

Ha ha , it got me googling and ehh no photoshop ...... but they come even shorter .. and here they even give priority downward(!)

It is a phoney photoshopped picture. The shadows in your link are different from the shadows in the picture posted. Also, when was the last time you saw an escalator out in the weather?

R U kidding me ?
I thought you were 'King of Google' (!) Also for some reason shadows shift during the day ;-)

Sorry, my mistake. I assumed they were the same picture. Upon closer inspection I see that they are not.

If it's 'shopped it's a good job. Looks to me like all the shadows and reflections are right.

Of course, on such a low res image it's hard to tell.

Ah, now enter phase 2 of this nightmare:

"Here was evidence of the best and worst of the people who had inhabited the Years of Vice and Profligacy."

Ahh, yes... And here's my response:

Maserati Clunker: BiTurbo Traded In for $3500

Someone traded in a rare Maserati as part of the Cash for Clunkers program. The 1985 Maserati BiTurbo only had 18,480 miles on it, and the owner was having trouble selling it. As 1985 Maseratis are not famous for their fuel efficiency, the car qualified under cars.gov as a clunker...

And it'll get CRUSHED!!!!!!!!!

Can I hear a Woooo-Hoooo!!!!!!!

I'm willing to give him/her the benefit of the doubt and assume they have COPD.

Nope. Just lazy. The photo was from a MSNBC story. The dogwalker admitted that there was no reason other than laziness.

And trikes...


Let's hope the electric bike becomes a truly mass marketed item soon,as it seems to me that thet are still GROSSLY overpriced for what you get-a very modestly sized battery,and a very small electric motor ,in essence,plus control electonics that don't appear to me to be any more advanced that those in hundreds of every day products.

I believe that if these things become popular,I will be able to buy one at the local business that sells and services lawnmowers and generators and such for well under half the prices quoted by low volume manufacturers selling thru low volume dealers or over the net.And if it breaks,there are mechanics in the back and parts on the shelf.I could get it back the same day,most likely,except from April to mid July ,which is peak grass around here.

Which brings me to another point, or rather ,question,for anybody with engineering/marketing expertise,or anybody,for that matter.

How long will it be before we can buy truly mass marketed(at big box stores) solar pv ,all boxed up including everything KNOWN to be needed for a more or less typical installation at a typical house?Obviously it would be more practical to sell seperately some or all of the materials needed to physically mount the system at different houses.

Wild ass guesses are more than welcome as far as I am concerned!


Siemens introduced the concept of a pv kit that could be retailed at the Big Boxes 3-4 years ago. It didn't take off to say the least. I'm going through a pv install now, and I'm fairly impressed at how they've broken it up into fairly manageable steps:

1 day for mounting racks
1 day for panel install
1 day for electrical connection to grid-tie inverter.

Battery kit would certainly add time and roughly double the cost. Now we are in HUAW mode for a net meter install, but this doesn't take a bunch of clock time. So the indusry is maturing a bit on the install process and, as we've seen, costs of manufacture have fallen to near-competitive levels.

DIY is possible now with the learning curve on the above steps so far along on the install side. Clearly though, one would still need a great deal of expertise on electrical.

It seems like to make retail work, you would need a new type of house, one that has 'plug and play' optionality for solar install. You could envision a bay for the inverter, a bay for batteries, and a dedicated area (roof or not) with optimal southern exposure in the home design. With that type of housing stock in place (as if that were simple) the retail possibilities open up. So my WAG is 10 years minimum, or essentially still 'over the horizon'. But the way forward can at least be imagined....

Steve ,

How about a guess as to wnen the electric bikes will be mass marketed like lawnmowers?Any one else too please!

I think it would be pretty easy if there were demand for it. There's tons of electric-assist bikes for sale in Asia and Europe. There just isn't that much interest in them here. If there were, they could be imported fairly easily. As long as they don't go faster than 20 mph, they are considered bikes, and regulated as such.

There is already a cottage industry for parts and small-time builders, like this one:

  • http://http://www.electricrider.com/crystalyte/phoenix.htm]http://www.electricrider.com/crystalyte/phoenix.htm
  • Note that for any serious cyclist $1000 is not that much money for a bike, and these kits can be fairly "stealthy" especially with some customization.

    As with everything, I'm sure quality and battery technology/cost will vary widely, now and in the future.

    If they were in Walmarts,maybe the masses would buy them.
    Joe Sixpack doesn't buy anything you can't get either tjhere or at least in a store very nearby.

    Pep Boys (auto parts store) here in LA is selling electric bikes for about $500, pretty much just what you were looking for.

    I could get one but I only ride a mile to work as it is and pretty flat here, no need for an electric!

    If I end up moving much farther from work I would definitely consider it. I would hate to get one of these $3000 models anyway, how could you ever park it anywhere safely? I'd rather have a $500 model with a removable battery pack I can take inside with me if it seems necessary.

    Yikes. Three thousand dollars and as with any bicycle, there's no way to secure it properly. I'll have to pass.

    I bought a used 1100cc Honda Shadow this year for only $2000. It gets 45mpg and no need to assist during hills of any size. Plenty of good mechanical gear to recycle & re-use out there that uses minimal petroleum vs. new manufacture.

    I've been commuting for several years now on an E-bike (Wavecrest/Tidalforce M-750X) 14 miles round trip for 0.4 KWH, or over 1000 mpg in energy equivalent.

    This is a high-end bike that I paid about $3500 for, though there are plenty of conversions available for about $1000. Expensive? Each day I ride it, I save $2.50 in gas and $3 in parking, not counting any other car expenses. It quickly pays for itself.

    An E-bike is truly sustainable because you can get enough solar panels to power it for under $1000. People often point out that we can replace only a fraction of cars with electrics in 10 years, and then the grid can't handle the load. Bicycles are a real and feasible solution.

    Yes, bicycles (all types) are the most practical quick fix we have !


    That the natural limits of growth are escalating price spikes as I've posted on here, is quite close to the core observation I made at the beginning of a lifetime of writing about growth induced collapse of natural economic systems. What makes sense of why we'd design our whole life support system to fail catastrophically is ultimately finding a mistake in our model of nature, an "expert error" in describing how things work.

    Ask questions, particularly about how the scientific method needs to be "renovated" a little. Where I begin to understand it by observing that nature has both deterministic causation and opportunistic causation, sort of like electrons and electron holes in different arrangement. The foundation I discovered for it was a unification of the conservation laws in a general law of continuity in change. It very much helps show where the discontinuities like the ones we are throwing ourselves into come from...

    Modern science so far only recognizes a primary role in how nature works for one of the two.
    What we're seeing, and experiencing, is that even very expertly controlled physical systems can be pushed to their opportunistic limits (breaking the continuity of the opportunities they need) driven by deterministic mental models that ignore that.

    Re: Climate Change Measure Should Be Set Aside, U.S. Senators Say

    Looks like the Republicans want to delay the cap-and-trade bill by attempting to split it into two sections, one dealing with energy and the other with the problem of climate change. But, as we all know, the two problems are intimately connected and can't be separated in any meaningful way. The politicians need BAU to keep their jobs, so they are trying every trick in the book to keep the economy rolling toward the cliff.

    E. Swanson

    I've given up expecting them to do anything serious to address enregy depletion/climate change.

    Instead I'm investing in beachfront property. There is a twist though - it's all about 65m above current sea level.


    Why is the National Guard trying to hire domestic people herders??

    Why you ask?

    Because 95% of the people on this planet, and 99% of the people in the U.S. are sheep.

    Sheep need a Herder to keep the their Flock together......A good Dog? Or the National Guard?

    The National Guard have better weapons......

    Let's see here.. Outbreaks of a pandemic level of some pathogen, civil unrest due to many possible causes such as political corruption, economic collapse, (insert misc conspiracies here.) You never know when compulsory sharing of your personal resources will come into play as well, beyond the normal means known as taxes. Enjoy!

    That's the answer I was fishing for.

    Seems like the National Guard won't be the only 'sheep' herders in town.

    Dispute flares over control of military reservists

    WASHINGTON (AP) -- The Pentagon and the nation's governors are squabbling over who should be in charge of military reservists called up to deal with natural disasters.

    The current law is unclear. The Pentagon is floating a proposal on Capitol Hill that would put the Defense Department in charge. The military sees that as a natural extension of its use of federal forces.

    But governors say the Pentagon move is a strike at state sovereignty....Defense Secretary Robert Gates has made it clear he does not favor ceding control of federal forces to state governors.

    Sauce for the goose is sauce for the gander.

    I wonder how Mr. Gates would feel if the governors decided to keep the (State!) National Guard troops at home where they belong? Then there wouldn't be any need to call up Federal reservists for emergencies.

    I would like to propose that post-peak individualist survival stories are not promoted to main topics on the front page of TOD as it distracts from the core message of resource depletion. One example is the recent post on building a survival homestead. I'm not saying these should not appear on the site, but please can we at least keep them to the campfire section?

    Send suggestions like this to the editors via e-mail. They don't read the DrumBeat, at least not every day.

    Some of us try to read Drumbeat every day, at least when we aren't traveling.

    When threads are long,new comments are inserted between older responses,sometines making it time consuming to figure out who is responding to who/which/whatever,and follow thier reasoning.

    That's why I usually open with the name of the person whose comment am replying to.Even though my own comment may be general in nature,it helps define the background/context of my remarks.

    Click on the icon with the single speech balloon and the up arrow.

    That will take you to the "parent" of the comment - the post it's replying to.

    These "survival homestead" stories are what keep TOD interesting. I say that they should be given priority over technocopian chart wizard forecasting based on dubious data. Note the number of replies to the two type stories. The stories you object to typically have twice or three times the number of replies than the so-called "core message" stories receive. This is indicative of their relative appeal to readers. Actually, I think that TOD staff does a good job balancing the two type stories.

    I don't think the number of comments necessarily correlates to the appeal of a story. IME, a lot of comments generally means a flamewar has broken out. If all we wanted was a lot of comments, we could post stories expressing skepticism about climate change every day.

    Personally I come here for the "technocopian chart wizard forecasting"

    I agree that those colorful charts are pretty to look at. :)

    We publish individual stories on Campfire (among other types of Campfire posts) on Wednesday and Saturday nights. It is usually Nate and Jason and Glenn that post them. I was pinch hitting Wednesday, since the others weren't available.

    Most people don't look on the separate Campfire page, so we have been putting them on the main page as well. It would be a possibility to put them only on the Campfire page, if people would look for them there.

    Do others have thoughts on this? I know that some people like the Campfire posts very much; others don't like them at all.

    The Campfire page is fine where it is. I'm glad to see TOD going beyond "rapid resource depletion, yup we're hosed" to sharing various authors' thoughts on what to do about it.

    the TOD frontpage is fine as is - scrolling the page for your fav articles /DBs is no problem.

    I think is good to have the campfire post on the main page and fail to understand why this is so offensive to some people. I have not been checking the campfire page and would not have seen it if it had not be put on the main page.

    The main focus of the oil drum seems to be predicting where we are headed and campfire could provide good balance if it addresses the issue of what to do once we get there.


    I think is good to have the campfire post on the main page and fail to understand why this is so offensive to some people.

    It's not necessarily all campfire posts, but I think the more survivalist-type articles are an embarrassment to some people. Especially for non-US (and to a lesser extent, non-UK) readers. The whole survivalist thing is quite foreign to most of the world. It just seems really strange and nutty to them.

    I can understand that point of view. It's a matter of what audience we want. To take an extreme example - we could post recipes for "long pig," and some people would no doubt approve. Others would be seriously turned off. Mainstream America would think we were lunatics.

    After rereading RC's campfire post maybe I understand now how the survivalist type articles could be offensive. I did not take Todd's article to imply the notion of take care of yourself and too bad about everyone else. This is notion is offensive to me also.

    Offensive is not the right word, leanan's description as 'embarrassing' is much closer. I would not advise someone to visit a site full of survivalist planning as they would think I was mental. It is already an uphill battle getting the peak oil word out and this does not make it any easier.

    The whole survivalist thing is quite foreign to most of the world. It just seems really strange and nutty to them.

    Yanks acting out fantasies from their past ;)

    To elevate my friendly dig somewhat, the evolution bozos argue about:

    Does natural selection operate at the level of the gene (see the common interpretation of Dawkins though of course genes have no volition of their own they do sometimes attack other genes..), the individual (obviously, the phenotype, or what?), a group, defined as genetically similar, or even groups defined in other ways, such as soldered by culture and functioning through cooperation and altruism?

    Naturally (sic) enough, the survival of a human individual (note, almost always with family members in the case discussed) need not be burdened with such quasi-philosophical underpinnings.

    More prosaically, 95% of people in Europe, Japan, Bangladesh, and many other places, can never hope to even dream of owning land that might feed them - in isolation.

    About long pig, the discussion elsewhere, this new(ish) book is probably essential reading:

    An Intellectual History of Cannibalism by Catalin Avramescu, translated by Alistair Ian Blyth.

    Review in the LRB:


    The study on storms is seriously defective in comparing the frequency of ancient depositional events with recent storm frequency, because most storms included in the figures for recent years are short-lived oceanic events which never reach shallow water, and so never produce any deposition. If these oceanic events are omitted from the counts for the last fifty years it appears to me there would be no short term or long term trend.


    Mann et al. correct for this. The basic process is to scale the frequency of overwash events by the modern frequency of landfalling hurricanes in that particular area and then take some sort of average to get an idea of how much more or less activity there is in the entire basin. They're not assuming that all ancient hurricanes made landfall. Otherwise, the peak ~1000 AD would not be comparable in magnitude to the modern one. I would show more concern about the very limited number of overwash events in each regional record.

    I agree, it is a liberal plot to deny my divine right to prosperity.

    Yep, this report has been ripped apart for absolute rubbish. The blogospere is awash with even pro-AGW folk who think it's nonsense. Mann is now playing to the crowd that might applaud him but unfortunately he is discrediting himself.

    I think climate audit had a bit to say on it (amongst others)



    McIntyre's site has been one of the more vocal anti-global warming sites for several years. They promoted Loehle's deeply flawed paper back when it came out, then backpeddled after RealClimate posted a commentary revealing numerous errors. Loehle had to quickly issue a correction, while there were more than 1600 comments on ClimateAudit as the process unfolded, many cheerleading for Loehle.

    McIntyre has built a career on trashing Mann's work, using various statistical analysis techniques. Whether Mann et al. and the "Hockey Stick" are correct, the paleoclimate stuff is always going to be questioned, as there are numerous sources of error. That does not undermine the facts found in physics which tell us with near certainty that the climate will warm as we add CO2 and other greenhouse gases to the air...

    Thanks for the link. McIntyre gives a direct link to Mann's paper, which I hadn't thought to read, given that NATURE wants lots of bucks for their reports and our local library only has the hard copy...

    E. Swanson

    ClimateAudit is a fairly interesting site to read as they take statistical analysis to the extremes of empiricism. They do a great job of using every statistical trick in the book, yet have no real interest in the modeling aspects or any of the physics or science.

    Blacklight Power Returns With More Lab Validation
    For example, hydrino hydride ions having extraordinary binding energies may stabilize a cation (positively charged ion of a battery) in an extraordinarily high-oxidation state as the basis of a high-voltage battery

    this sounds a lot like the dihydrogen monoxide story...

    Re:Wall Street Players oil up rigged game

    Don't expect Barack Obama, whose administration is shot through with Wall Street alumni, to do much in the way of regulatory change in either the oil market or the financial sector. In fact, the employees of Goldman Sachs were the leading private contributors to presidential campaign of Mr. Hope 'n' Change, to the tune of $981,000.

    Looking back over the last couple of years there has been a tremendous amount of speculation that last years run-up in oil prices signaled that peak oil had begun its inexorable death march (which may in the long run become a self-fulfilling prophecy).

    But any clear-eyed evaluation of events should leave a lot of us feeling like tourists on the Boardwalk being takin' in a game of 3-card-monty. Goldman Sach's (among others) have rigged this slot machine to pay off. I have little doubt that we are in a global economic crisis but I have a sneaking suspicion that there will be winners in this crash...it just won't be you and I.


    Speaking of which, Morgan Downey was on CNBC the other day: Oil Prices a Bubble? No. He's a fundamentals guy all the way, causes a bit of a stir here by suggesting that oil inventories are actually currently low.

    I agree with Downey, current surpluses don't look out of line with steady demand. Prices are high but not high enough to keep people riding their (eleotric) bikes. Earlier this year, demand was crushed; the supply overhand looked massive. Not so now.

    I think oil prices are a bit low, the trend price from 1999 is $80/ barrel. The world is a lot poorer than it was last summer. There are two constraints on oil prices, one is dollar availability and the other is divergence between crude and diesel. Low crude prices mean more diesel surplus that weighs on storage, storage costs are leveled against crude. (Low diesel consumption a result of low business activity.) As diesel use rises, and price for diesel increases the constraint on crude will shrink.

    Diesel led crude higher last year, particularly in Europe. Not so, now because of economic conditions in Europe.

    Low dollar (and hard to get dollar) is balanced by lower diesel demand in China and India and demand in the US has cratered. Most places that sell diesel do so @ par with unleaded gasoline, which is a real relative drop compared to the past several years where diesel sold @ a premium to unleaded. No real bull market in diesel means a sideways market for crude.

    We are a 'black swan' away from a crude shortage. KSA 'spare capacity' hasn't been demonstrated. Do we want to give it a try? A cutoff from Nigeria, a shtudown in Mexico (or hurricane) a confrontation w/ Iran or a reignition of violence in Iraq would shift the production load to Saudi Arabia in a New York minute.

    I would guess that a 3% production cut from here would cause a crude price melt- up and another money panic. Not very robust system. I think that is the heart of Morgan Downey's observation.

    I've spent a good deal of time trying to develop an understanding of the way oil is marketed over the last few months and a couple of things now seem obvious to me.

    There is no question that producers,mainly Opec,engage in curtailing production in order to support or raise prices.

    There is no question that higher prices curtail consumption ,and that a balance of average price and average consumption over any period of a few weeks or months is struck as the result of the law of supply and demand.

    So in effect the speculators are siphoning off some money from the money that WOULD have found it's way into the producers pockets,by inserting themselves as middle men.

    Now it seems reasonable to me that the tradres/speculators/bankers involvement may contribute quite a bit to volatility in supply/demand /price and this is obviously not good.

    But is there really any good reason to believe that over the long run oil would be noticeably cheaper if we could cut out the middlemen?

    Why wouldn't the money they get just flow straight to the producers,given that so many barrels will sell for so much on any given day,on average?And that they will curtail production to get the amount of net revenue they want?

    We might actually have LESS money leaving the country as a result of traders/speculators being in the market.This seems obvious to me,but I am a babe in the woods in this respect.

    What do you think?Anybody?

    Is there really any good reason to believe that over the long run oil would be noticeably cheaper if we could cut out the middlemen?

    Wall street banks taking our cash (via free cash injections from Fed and Treasury) and buying speculative oil with no intention of accepting said oil but making speculative investments is called parasitism. But they only take a little you think.

    Think again. Like any tick on a host, bankers have too many straws sunk into this sick carcass known as our economy.

    I totally get supply and demand and I believe that we'll get there sooner or later. But right now the rise in wholesale oil prices is about GREED.

    "The world's most powerful investment bank (GS) is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
    Matt Taibbi


    I don't disagree about the greed part.i'm just asking if Opecand the other producers wouldn't be pocketing the money the middlemen are pocketing now.

    They would be positioned to do so,sfaics

    Probably. I don't know. Is that why countries are nationalizing their resources? Is that why the U.S. is maintaining the largest peacetime force in the history of Earth civilizations?

    I do believe that free markets have not been good for average working Americans and as the bills come due for soaring deficits the little guy will be left holding the bill.

    OFM don't you think that wealth will provide but a few decades of security? What happens after that?



    The plant will now be designed to capture 65 percent of carbon emissions from converting so-called brown coal, or lignite, into gas fuel. The original plan was to capture half of the carbon that would be stored underground, said Todd Terrell, the utility's director of corporate communications.

    I didn't even know Mississippi had coal, but apparently it's poor quality. They actually had a scheme where they were 'mining' underground CO2 and piping it elsewhere to attempt to push out stranded oil at one point. Now it looks like they might use emissions from this plant.

    Bank failures, you ain't seen nothing yet! Just wait until the commercial foreclosures hit.

    Elizabeth Warren "We Have A Real Problem Coming" Video on page.

    Elizabeth Warren, head of the Congressional Oversight Panel, which yesterday released quite a sobering report on the true state of the banking industry, explains what is really going on with the increasingly irrelevant balance sheets of the bailout banks (all of them). Once again underscores what a farce the stress test was, the complicity of the accountants in making the transparency initiative a sham, and why the banks are still as underwater as they ever were.

    This video is a real shocker folks. Ms. Warren is no raving blogger either, she is head of the Congressional Oversight Panel. She speaks with knowledge and authority.

    Ron P.

    Proven oil reserves of OPEC go up to 1.02 trillion barrels in 2008.

    From the article:

    Aramco has also been particularly successful in its water cut: For example, the Abqaiq Arab-D reservoir, which produces 300,000 bpd, has a water cut of 35 percent. Oil recovery from the field is expected to increase to 70 percent. Ghawar’s water cut is 28 percent and it produces 5 million bpd of oil, he said. “Horizontal wells and equalizers to reduce the pressure draw down helped with the water cut,” Nasser added. “We previously had horizontal wells and people are now talking about SMART equalizers. It’s expensive up front, but good over the long term.”

    A choice to be made: believe Nasser's 28% or the estimates from others.

    I'd certainly like to see a knowledgeable response to this article. Numbers like 70% field recovery and "trillions" of barrels in OPEC are far from what we have been seeing from Simmons and others. If true it changes the peak oil picture in a big way. Who to believe?

    Based on the logistic (HL) models, Saudi Arabia in 2005 was at about the same stage of depletion at which the prior swing producer, Texas, peaked in 1972, and despite the fact that annual US oil prices increased from $57 in 2005 to $100 in 2008, Saudi Arabia has shown three straight years of production below their 2005 annual rate.

    Reasonable people can of course disagree as to whether 2005 was the final Saudi peak, but if 2010 annual oil prices are higher than 2009 and if the Saudis have still not matched or exceeded their 2005 annual production, they will have shown five straight years of production below their 2005 rate, and I would think that the "It's all voluntary" excuses will be getting pretty hard to believe.

    In any case, the critical number is Net Oil Exports, and if the Saudis had simply maintained their 2005 net export rate of 9.1 mbpd, they would have (net) exported 10.0 Gb from 2006 to 2008, inclusive. Based on EIA data, they (net) exported 9.1 Gb in this time frame, and I think that it is extremely unlikely that they will ever again exceed their 2005 annual net export rate.

    The 2006-2008 net export data points are falling between Sam's middle and best case outlook for post-2005 Saudi cumulative net oil exports, and his best case is that by the end of 2015, Saudi Arabia will have shipped 50% of their post-2005 cumulative net oil exports.


    I realize that reserves data is really meaningless. It is the flow rate that can be reasonably expected which will detrmine peak oil. It is the size of the tap and not the size of the tank. But when you say that the saudi oil output has not breached the 2005 high, how does that take into account the quota system used by OPEC. That is, when they lower production to keep prices high. This is an outside intervention and may not mean that their production capacity has decreased? So the lower overally production could be a result of a lower production quota (Especially this year). Can you help in deciphering this anomaly.


    Texas oil production was also restricted, until 1972, when we went to a 100% allowable, with the exception of two large oil fields. IMO, Saudi Arabia was producing at very close to 100% of capacity in the 2005 to 2008 time frame.

    I think that the key difference between Saudi Aramco and Pemex is that the latter has admitted that its best production is watering out.

    IMO, Saudi Arabia was producing at very close to 100% of capacity in the 2005 to 2008 time frame.

    Don't forget some giant fields, like Khurais, were not producing (anymore).

    If Saudi Arabia's old oil fields never depleted, every new barrel of production would mean a net increase of one bpd, but in the real world, very old oil fields that are several decades old tend to be at an advanced stage of depletion (although lots of people, e.g., Peter Huber & Michael Lynch, seem to believe in magical non-depleting oil fields, tended to by fairies and elves, with unicorns grazing in the pastures).

    A really interesting question is the volume of new oil production in Texas put online from 1972 to 1982, as total oil production fell from 3.5 mbpd to 2.5 mbpd. I don't know what the answer is.

    In any case, two things we do know: (1) Peak Oil does not mean that we stop finding and developing new oil fields (e.g., I just found a new multipay oil field; our initial test well was only the second well to be drilled in a area of 5,000 acres, but it won't do anything material to reverse the Texas production decline) and (2) If North Ghawar is suffering severe water encroachment, it will take a lot of new oil to offset the decline.

    Several articles on TOD about KSA oilfields show that some giant fields are only about 20-30% (of their URR) depleted.

    As I said, "If North Ghawar is suffering severe water encroachment, it will take a lot of new oil to offset the decline." And I suspect that a rapid decline in production at North Ghawar took the Saudis by surprise in 2006. Even the Saudis at various times have suggested that their existing wells are declining at about -8%/year. At this decline rate, they would have lost 2 mbpd of existing production in just the 2006 to 2008 time frame.

    But I certainly agree that the myth of never depleting oil fields in the Saudi desert is hard to kill, and it's not just a result of too much sun exposure in the desert. As I have described several times, the Texas State Geologist in 2005 was talking about the possibility of bringing Texas oil production back to its 1972 rate, 33 years after we peaked, with--you guessed it--"the use of improved technology."

    As I said, "If North Ghawar is suffering severe water encroachment, it will take a lot of new oil to offset the decline."

    Yes. If so then Nasser's mentioned 28% water-cut is one of the saddest lies in history of mankind.

    It's possible that they have brought the overall water cut down as they shut-in high water cut wells. But the crux of the problem is that their best production, on the north end of the Ghawar complex, is probably watering out.

    Several articles on TOD about KSA oilfields show that some giant fields are only about 20-30% (of their URR) depleted.

    Naaw, I have never seen any of those articles. Do you have a URL? All of Saudi's giant fields are way past 50% depleted with the possible exceptions of Khurais and Shaybah. The really big giant, Ghawar, and the lesser giants, Safaniya, Abqaiq, Berri, Zuluf, Marjan and Abu Sa'fah are all way over the hill.


    One challenge for the Saudis in achieving this objective is that their existing fields sustain 5 percent-12 percent annual "decline rates," (according to Aramco Senior Vice President Abdullah Saif, as reported in Petroleum Intelligence Weekly and the International Oil Daily) meaning that the country needs around 500,000-1 million bbl/d in new capacity each year just to compensate.

    Fields that are only 20 to 30% depleted do not decline at a 5 to 12 percent rate.

    Ron P.

    I can't find the list with percentages, but if the high estimates for Safaniya, Berry, Zuluf are the truth, it could be so. Of course the 5-12% decline rate speaks against these higher estimates. What Saif says is in flat contrast with the optimistic talk of Nasser.

    Table 1 - Lower and Higher estimates for Saudi's individual fields according to Colin Campbell's book "Golden Century of Oil 1950-2050", 1991, pages 296 & 341; Rand, 1975; Simmons, "Twilight in the Desert", 2005; Robelius, 2006.

    Field Discovery Year Lower Estimate (Gb) High Estimate (Gb)
    Dammam 1938 0.325 1.05
    Abu Hadriyah 1940 1.055 1.76
    Abqaiq 1940 12.5 19
    Qatif 1945 3.2 9
    Ghawar 1948 66 150
    Fadhili 1949 0.95 0.96
    Safaniya-Khafji 1951 21 55
    Khursaniyah 1956 2.3 4
    Khurais 1957 8.5 19
    Manifa 1957 11 23
    Abu Safah 1963 6.15 7.81
    Berri 1964 7.3 25
    Zuluf 1965 8.5 20
    Fereidoon-Marjan 1966 10 10
    Marjan 1967 8 9.26
    Janan 1967 0.5 0.5
    Karan 1967 0.01 0.01
    Shaybah 1968 5.71 19.82

    Rest of small fields deleted

    The timing of Peak Oil has nothing to do with the size of reserves.

    Peak Oil is about the consumer affording the necessary escalating cost of production.

    Peak Oil is about the consumer affording the necessary escalating cost of production.

    Well no, that is not what it is about at all. Peak oil is about flow rates. Peak oil will be, or was, when the maximum number of barrels per day is produced. That is the peak. So far that date, or year, was 2005 when the world produced 73,728,000 barrels per day of crude oil. If we ever exceed that then that point will be the date of peak oil, but I doubt that will ever happen.

    But... about recovery rates. The article says Saudi hopes to go from 50% to 70%. That is just heaping one absurdity upon another. Does anyone really believe 50%?

    Ron Patterson

    Nope, oil is no different from all the other 'mined' commodities that have peak production, from herrings to iron ore. World peak oil flow rates (and flow rates of all other commodities) are all about human decisions - producers will invest as much as it takes as long as there is a profit, but the oil flow rates get ever more expensive to produce as time goes on. The USA could invest much more on infill drilling etc and produce much more oil than it is, but it would cost so much to sell at a profit that nobody would buy it and the producers would go out of business.

    Consumers have to be able to afford the price as the price rises, at some stage (which we can't predict) they won't be able to afford to buy more oil than last year and we get peak demand and an 'over supply' situation. The price of the oil doesn't have to go up to make the oil less affordable and cause a peak, incomes and access to credit can fall and produce the same effect.

    Peak happens no matter what with a finite resource.
    The existence of a production curve with a maximum production rate tapering off in both directions is an inevitable consequence of producing a limited resource.

    What you are describing are second order mechanisms, which have an element of truth to them but are not the thing themselves.

    It's a bit like explaining movie projectors in terms of film reviews.

    The USA could invest much more on infill drilling etc and produce much more oil than it is, but it would cost so much to sell at a profit that nobody would buy it and the producers would go out of business

    The increase in Texas oil production on this graph (blue) corresponded to an annual oil price increase of about +2%/year. The decline in production corresponded to an annual rate of increase in oil prices of about +22%/year. The Texas production decline also corresponded to the biggest drilling boom in state history.

    The increase in North Sea oil production on this graph (black) corresponded to an annual oil price decline of about -3%/year. The decline in production corresponded to annual rate of increase in oil prices of about +19%/year.

    Xeroid, you are really confused. The U.S. Peaked in 1970, Mexico in 2004, Norway in 2001, the U.K. in 1999, Oman in 2000 and I could go on but what's the point. All these peaks were based on the year of peak production and nothing else. Peak oil is peak oil. The year of peak oil means the year of peak production. How could it possibly mean anything else?

    Sure all the things you mentioned influences flow rates. But all the investments in drilling rigs or technology could not change the fact that the U.S. peaked in 1970 or the fact that the North Sea peaked in 1999. And despite what influences flow rates, the peak is still the date of maximum flow rate? Again, how could it possibly be otherwise? If it means anything else then the word "peak" does not mean peak.

    Ron P.

    So far that date, or year, was 2005 when the world produced 73,728,000 barrels per day of crude oil. If we ever exceed that then that point will be the date of peak oil, but I doubt that will ever happen.

    Who, when did that happen? So the EIA just revised down production for 2008 and now 2005 is the peak year again (as of August 12th 2009 International Petroleum Monthly). I guess this must have been discussed here in the last couple of days and I missed it.

    Edit: Found the thread http://www.theoildrum.com/node/5664#comment-528697

    As Ron pointed out, the difference between 2005 and 2008, before the revision, was within the margin of error and after the revision, it's still within the margin of error. IMO, the more important metric is the cumulative post-2005 shortfall between what we would have produced at the 2005 rate and what we actually produced, despite US annual oil prices going from $57 in 2005 to $100 in 2008 . This is all consistent with Deffeyes' prediction for a world peak in the 2004-2008 time frame, most likely in 2005. (And Deffeyes did observe, circa 2001 or so, that the production peak was actually 2000, but he never backed away from what his model predicted, i.e., a peak in the 2004 to 2008 time frame.)

    As Ron pointed out, the difference between 2005 and 2008, before the revision, was within the margin of error and after the revision, it's still within the margin of error.

    True and I've said exactly the same thing many times which was why I queried the wisdom of Robert Rapier's original blog posting on the subject (the one picked up and used by JD otherwise I wouldn't mention it) and said I expected a revision down. Truth be told I still think there's a lot of revising down could be done (and we might see it yet) if the unvarnished truth was known. But that's just my opinion.

    Interesting also Morgan Downey's current claim that oil stocks are much lower than claimed and that currently world oil production in reality is 1mb/day below world consumption. (Link posted elsewhere in Drumbeat http://scarcewhales.blogspot.com/2009/08/cnbc-appearance.html )

    BTW, I don't know if you saw the recent item about the huge decline in Russian gas exports. Obviously, lower demand was a contributing factor, but I wonder to what degree. Do you know if any other regional producers have shown similar declines in exports?

    Russia's gas exports down 45% to 48.8 bln cu m in 1H09

    The EIA was predicting 2009 demand decreasing by 1.8 mbd last May.

    The EIA said it expects world oil demand to fall by 1.8 million bpd this year from 2008's levels as consumption remains weak because of the global economic downturn.

    Now, in the August STEO, the EIA is stating 2009 consumption has decreased by 3.1 mbd.

    Preliminary data indicate that global oil consumption declined by 3.1 million barrels per day (bbl/d) in the first half of 2009 compared with year-earlier levels. OECD countries accounted for 2.8 million bbl/d of the overall decline, while non-OECD consumption recorded a decline of only 300,000 bbl/d.

    They are really bad predictors but they could be saying that demand is 1.8 mbd less and consumption is 3.1 mbd less which would agree with Morgan ;)

    People (CNBC, news media in general) cling to the old saw that increasing money investment has a natural consequence of increasing oil production and that idea dies hard.

    And Deffeyes did observe, circa 2001 or so, that the production peak was actually 2000,

    It may be true for corn but ...

    There are a lot of overlapping peaks. Some peaks are more important than others; the USA domestic peak in 1970 was critical to the 'energy shortage' of 1973 and shortly after.

    There is the 'Non- OPEC peak' which shifted pricing power to OPEC in 2004.

    There is the availability peak (relative to dollar demand or relative to industrial output) in 1998- 99. Those figures are here on TOD.

    There is the Mexico - Canada peak of reliably accessible energy, (the bitumen in Canade being a wild card). Simmons has consistently called the 2005 worldwide peak in conventional crude. Ckearly there is a rough consensus that a plateau, if not a dramatic production peak has taken place within the past decade. Despite large inflation- adjusted production investments.

    Even if Saudi reserves are what they say they are, the reserve- economic consequence relationships deteriorate because of the shrinkage of the overall supply bases. Too many different sources of supply are in various states of depletion against steady demand growth. The barrel - by - barrel accounting may be difficult but the net/net decline is unmistakeable and the outcome certain particularly since investment leverage is a) shrinking and b) not working anyway.

    The peak(s) will be more clear next year and even more clear the following year. Also, consider that investment in production will rise (even at lower prices than 2008) there is a greater investment being made in consumption so the rate of ruinous consumption is accelerating.

    It's not the size of the tap as much as the size of the shovel used to dig your grave.


    And why is the cost of production escalating?

    Could it perhaps be because the reserves are becoming exhausted?

    Nah. That couldn't be it!

    Could it perhaps be because the reserves are becoming exhausted?

    No, the world is nowhere near exhaustion, yet! Peaking has nothing to do with the size of the reserves. The flow rate at any time has to do with how much profitable investment is made. There is still plenty of oil in the world, but because the easy oil is used first we are forced to use more and of the more expensive stuff. Geology just explains why the oil gets more expensive to produce as time goes on, it can't tell you when peak flow will occur. Likewise we don't know how much consumers can afford before demand peaks.

    The decisions to drill more wells (or not) all around the world not just in the USA, are made on the basis of making a profit, oilcos are no different in that respect from any other company.

    An oil patch is not like a milkshake. There is no physically possible way to drain it clean to the bottom at a constant flow rate, therefore production will increase, peak, and drop off. Since all the oil production in the world is just a bunch of fields of various sizes the same rule applies to the world as a whole.

    All the investments and profits in the world can't change that. It's just one of those things that money can't buy.

    There is still plenty of oil in the world, but because the easy oil is used first we are forced to use more and of the more expensive stuff. Geology just explains why the oil gets more expensive to produce as time goes on, it can't tell you when peak flow will occur.

    This hides the answer why geological peaking takes place, no matter of any other factors. It is difficult, if not impossible, to keep high flow rates when the easy oil is gone. However xeroid, the timing is in many countries partly influenced by investments. Had some countries done more investment, then their geological peak would have been postponed or they would have been on plateau-production for a longer time (by adding smal(ler) fields on time). Same for countries and regions (14) who are pre-peak. But with low oilprices few countries are going to do massive investments. When the moment is there, problably it is too late to avoid worldproduction going down. Also, the worldeconomy doesn't stand high oilprices for a long time. Pricespikes of $150 or more that last only a few months or less are not enough, many new oilprojects started in 2008 are delayed or cancelled.

    Han, please observe standard list protocol. Your reply to my post had absolutely nothing to do with anything I posted. You should have clicked "Post a comment" not "Reply".

    Ron P.

    I'm sure it was just a mistake. It happens quite often to the post at the bottom of the thread.

    So it was. Until now I didn't even notice how I can see the difference, apart from that it is obvious from the text.

    Ghawar’s water cut is 28 percent and it produces 5 million bpd of oil,...

    We should remember that water cut can rise virtually overnight due to fractional flow. I'm too dang lazy to look up old Stuart Staniford posts but he gave a great description of fractional flow and the sigmoid curve that represents a well 'watering out', or going from a water cut of ~30% to ~85% very quickly.

    adding to this. Norwegian (Oslo's CBD) top-notch office-space rental costs is down 40% - compared to the same time last year.Something is churning ...

    150 US Banks May Reach Point of No Return as Toxic Loans Exceed 5% of Holdings

    More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival. The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

    While 5 percent can be "fatal" for home lenders, commercial real estate lenders may be able to withstand higher rates, said William K. Black, former lawyer at the Federal Home Loan Bank of San Francisco and the OTS. Commercial loans carry higher interest rates because they’re riskier, he said. "At the 5 percent range, you’re probably hurting," said Black, an associate professor of economics and law at the University of Missouri-Kansas City. "Once it gets around 10 percent, you’re likely toast."

    So we have a bit of wiggle room. Thanks for that link, Ron, here's Tyler's piece on the report per se: August COP Oversight Report: $658 Billion In Total Level 3 Assets, Small Banks Need "To Raise Significantly More Capital" | zero hedge.

    Wait a minuite...

    While 5 percent can be "fatal" for home lenders, commercial real estate lenders may be able to withstand higher rates...

    "At the 5 percent range, you’re probably hurting," said Black, an associate professor of economics and law at the University of Missouri-Kansas City. "Once it gets around 10 percent, you’re likely toast."

    From Ms. Warren's video: ...and the esitmates out of folks like Deutsch Bank are that we are talking about 50 and 60 percent default rates on these (commercial) mortgages.

    Wiggle room??? Am I missing something here?

    Ron P.

    Probably not, the quote from Black just suggests that institutions focused on the commercial sector may be somewhat more impervious to the need to build capital, owing to the riskier nature of commercial loans; also the study omitted the 19 stress testers, so there's another massive chunk taken out of the picture. Without a doubt this will be one hair raising fall; and right now you have all this blather about how the Recession's Over!

    Recession's Over! If You Want It, to paraphrase John Lennon. Unless You Live in, Oh, Spain, For Instance.

    "So we have a bit of wiggle room." No, we just "know" this this fellow is saying this or that. We don't really know "know" anythinng.

    My lying eyes see things different. They see my cities around here backstopping development from a couple years ago that will go into the toilet as revenues diminish, i.e. less taxes collected. Here in Nevada the budget passed June 30th is already underwater and the commercial mortgage problem that Ron sighted has not hit the fan too much as yet. If you simply change the accounting rules back to reality, it would have hit the fan last spring.

    No wiggle room to get out ... just postponed the date to crash.

    Elizabeth Warren is the author of The Two-Income Trap, that argues that families now must have two working parents to support the lifestyle that one used to.

    And speaking of bank failures...Denninger reports that the year's biggest bank failure is taking place now. The timing is weird, because they usually wait until close of business. There must have been a reason that wasn't possible this time (likely a run on the bank).

    The teams of FBI people investigating the bank for past illegal activities in recent days probably hurt their credibility, and increased the complexity of any resolution. Maybe that's why they felt compelled to "start early" on this one?

    Colonial's fall is truly ominous. This will be worth watching. Timing and size are worth noting, as is FDIC reserves...

    The video was a shocker. Essentially I heard "hang on to your arse" because we are about to see a lot of bank failures.

    Couple this with Denninger's latest and I would predict the financial mess is starting to unravel. Will FDIC needing to go back to the trough for more funds make the MSM news?

    No health care reform this year folks, the banks & pending stock market crash will suck the wind out of those ideas. What a great way to start off the new school year.

    From the Denninger artucke:

    becoming the largest U.S. bank failure of 2009 after an expansion into Florida saddled the lender with more than $1.7 billion in soured real-estate loans.

    They probably got into the Florida condo market. Just about six miles to the southwest of my house are three new large condos. They were all built on a lagoon because oceanfront property in the area was already taken or way overpriced. All three are virtually empty. One has a marina that can hold perhaps a hundred large boats. There are three boats there now. Anyway I am sure they are all bank financed and the banks will likely have to write the loans off or collect a few cents on the dollar.

    The story is no different in South Florida. There was a story on TV the other day about a new sixteen story condo in Ft. Myers. There was one unit occupied. The owner of that one unit was desperately trying to get out because the condo was otherwise deserted but they were giving him the run-around.

    Ron P.

    "Anyway I am sure they are all bank financed and the banks will likely have to write the loans off or collect a few cents on the dollar."

    That's the problem Ron. The bank will not write that loan 'mark to market' till it is sold. And the sad part is you and I have to buy it.

    Same thing here, Grand Sierra Resort which years ago was the largest casino in the world converted the top several floors to high priced condos about three years ago. Guess what??? I think the bank is still running the show but you can buy a half million dollar condo for 50K or less. The fixtures are worth more than that.

    The fixtures are worth more than that.

    Not any more.

    "Installed but never used" fixtures are beginning to show up on eBay.

    Just bought two Baldwin mortise locks, new (never installed) but "surplus", for $20 each +$7 shipping. To be used to replace two that show wear after 79 years of use. Missed an "installed but never used" mortise lock that went for $10.85 + shipping.

    I promise you that Baldwin list, or even discounted, prices from the dealer are several multiples of what I paid :-)


    Hi Alan:

    My mistake. I meant that the fixtures "cost" more than that. Worth, like you pointed out, is an auction value.


    There are quite a few Colonial Bank offices here in the Central Florida area. I don't really know what their exposure is, but this area would have been in the news more for the collapse of house prices if the debacle in SW Fla had not led the country.

    For those who like to keep abreast of the bank meltdown try this website

    And from South EAST Florida - Ft. Lauderdale Beach to be exact - and involving Chicago and The Donald (if only in name) - I humbly submit to you:

    Soured loans on big Florida condos sinking Chicago's Corus Bankshares

    Heavy with $182 million in construction loans, the long-awaited Trump International Hotel and Tower, a luxury hotel condominium in Fort Lauderdale beach, stands furnished, but empty, with not a single tenant inside.

    One of 34 South Florida projects financed by Corus Bankshares Inc, a lender based in Chicago, the 24-story, 298-unit oceanfront hotel condo had deposits on 70% of its units, but after the bust of the real estate market, the buyers either walked away or filed lawsuits against the building that has yet to open.


    Could be worse. You could be the only tenant.

    Reminds me of Stephen Kings The Shining. Creepy!

    When the Vangelakos' travel from Weehawken, N.J., to spend a week or a few days in their Florida home, they have exclusive use of the pool, game room and gym, but they miss having a few tenants around.

    "Being from the city, it's very eerie," Vangelakos said. "It's almost like a scary movie."

    A large, circular fountain in front of the building is dry. The automatic glass doors that lead to the front lobby are locked. On the front desk is a guest sign-in sheet. The last entry: Feb. 13, 2009.

    "It's like time froze here six months ago," Ewing said.

    Well, GEAB is predicting a "fall event" that will set off the next level of the crisis. Maybe this is it?

    Was reading some speculation that the FEDs will soon shut all banks down for a while (bank holiday) to prevent bank runs. Then they`ll let you take only a little money out at a time after that, while they use the deposits to pay interest to their creditors (holders of T-bills).
    Gotta keep the govt running after all!

    I even read this could happen as soon as August 26 (the day after the FDIC meeting).

    If this did happen what would the effects be around the world, I wonder??

    Probably not good, I`m guessing!!

    That is a preposterous notion that won't happen.
    I promise you that the US is not going to knuckle to any creditor as long as they can print money and have the worlds undisputed military power.
    Think about it.

    Think about it.

    I have, and not lending the USA dollars and not accepting dollars for anything the USA imports would solve many of the other countries' financial, peak oil and climate change problems - and that is what they are discussing already.

    The rest of the world thinks it is the current big debtors/consumers that should cut back, pay back and consume within their means - IMO most right thinking people would agree. Now we are past 'peak net exports' of oil the 'net exporters' don't have a shortage of customers willing to pay a good price for the oil with currency that can actually be exchanged for something else.

    The current exponentially increasing FIAT $ (and UK £) debt situation isn't sustainable IMO. IMO if the USA starts to seriously inflate away their debts the creditor nations will make sure that it's the USA that suffers, military power or not - the USA can only afford the military expenditure because other nations lend the money to do it. Why would you pay somebody to come and destroy your country and kill thousands of your innocent civilians? Don't assume every Government is run by psycopaths.

    I don't assume every government is run by psychopaths just the US.
    And functionally it really isn't that money is being lent so much as it is resources and products being given cheaply.
    PAX Americana is the reason that the US gets away with everything.
    No one wants to see global chaos so everyone shuts up and plays along.
    I agree with you in what would be the best thing to do but it won't happen.

    I don't think this is true.

    The hardest thing for any business to find is a paying customer. If the customer wants to pay with this or that kind of money, the business will make accomodations.

    Saudi Arabia takes dollars and that's what matters. (So will Mexico, Canada, Nigeria and other oil producing countries).

    Don't confuse the commodity value of money with its use as a marker for transactions.

    China's (and other countries) dollar concerns relate more to investment strategies (interest returns) in commodity money. China is as much of a speculator in currency markets as it is a producer. China produces massively, but they have lost their best customer and their workforce lacks the means to replace American buyers. Because of investment strategies, China still buys US securites and 'hot money' investment dollars still flow toward China. On one hand is what the Chinese say they don't like, on the other is what the Chinese actually do.

    What is increasing worldwide is government or sovereign credit, which promises a speculative return (usury), not cash. Cash - which is debt derived - is shrinking. This is why we are having a 'crisis'. Too much credit and not enough cash. The world's credit(s) are trapped within the closed cycle of high finance which are equipped to leverage credit into cheap profits.

    Credit rarely emerges and then does so with heavy penalties attached: see the 'Cash (credit) for Clunkers' program that requires the purchase of a $20000 car for a subsidy of $3500. The subsidy is really an interest free loan to the car makers. The car buyers are saddled with enormous debts that have large interest penalties. Because cash is scarce, few (almost none) paid cash for their new cars. Instead, the government removed cash from the marketplace and bundled it with the subsidy and sent it into yet another 'black hole' of bad ... credit: the world's auto industry.

    The US car industry gains the interest on $18 - 20 billion and the subsidy of $3b. The car buyers transfer a portion of their cash earnings to the companies. The cars themselves rapidly become worthless as all cars do by depreciation. So much for the utility of credit!

    The creditor nations themselves are in a kind of trap; if they demand 'repayment' then they have gained absolutely nothing! They receive one kind of paper in exchange for another. Any form of dollar denominated paper really can only be spent in the USA, even if it's transferred to another, that other must spend the dollar in the US ultimately.

    Up to recently, the paper would be bartered for what was unobtainable elsewhere; freedom and a vibrant consumer culture. Now, our 'culture' is falling flat, much of it is imported from China and the remainder looks increasingly like old- time fascist European 20th century culture.

    This is a problem but is balanced by the shrinking of available cash dollars. People don't want more credit; most in the world (who have means) are unwilling (or unable) to either borrow or lend. The exception is China which is lending/borrowing furiously to buy GDP numbers on another piece of paper. Time will tell whether this is folly or not (folly.)

    Eventually, credit will shrink as it cannot be paid in any meaningful way; when a demand is made for real production rather than more paper. Old debts will be washed away, either in an orderly way by negotiation (and rueful acknowledgment) or they will simply vanish into a disorderly rout of defaults, repudiations, currency runs and bank collapses. After this, inflation may happen - it may happen in China or India first. Right now, deflation of US and OECD debts is almost inevitable.

    In that case, the dollar and 'money materials' will become markers of exchange. This might include the 'olde English' tally sticks! Whatever works, but ...

    ... while sovereign credit expands, the availability of cash dollars shrinks.

    It is a shocker for the that it was aired in the Main Stream media.

    Saudi arabia is changing to enhanced oil recovery.

    In the meantime, it is also a known that Saudi Aramco wants to improve its oil recovery rate to 70 percent from 50 percent over the next 20 years by focusing on enhanced oil recovery (EOR) techniques and other new technologies.

    Licknark, me thinks it will take a few millenia longer than 20years before 70% of it is dragged out the ground. It's all about extraction rate mate. Not much use to us if these wells are blowing out Xmbd of slightly oily water.

    Besides, ""wants to improve its oil recovery rate"" is just doublespeak for "wants the world to continue being relaint on it's oil so it can prevent wholescale uprising ofyoung unemployed and increasingly impoverished and disenchanted population"


    I am reminded of the East Texas oil field (the oil field that won WW II).

    It STILL produces 1.1 million barrels/day !

    Unfortunately, it is 99% water.

    What will the ultimate recovery % of East Texas be, by say, 2250 ? Probably pretty high.


    According to the SPE the East Texas field has now reached a 70% recovery factor, so perhaps it is conceivable that Saudi Aramco can maintain the current 5 million barrels per day from Ghawar.

    Of course, they are currently disposing of about 2 million barrels per day of brine in doing so: when they are at the stage East Texas is in now, one would expect they will be producing 500 million barrels of brine per day along with the 5 million barrels of oil. I wonder what proportion of the oil produced will be needed to dispose of that much brine?

    Also, the average well is limited in how much liquid it can produce, especially when it is a stripper well which has to be pumped. Few, if any, East Texas wells now produce more than ten barrels per day of oil, or a thousand barrels per day of liquids. So to produce five million barrels per day of oil from a field like this, you would need more than 500,000 wells.

    Saudi Aramco currently appears to drill about 300 onshore wells per year. To achieve current production with stripper wells by 2030, they would need to drill of the order of 25,000 wells per year.

    Of course, there is always the possibility of a technological breakthrough. But I would put the probability of that happening at about the same level as the probability of a hard freeze in Baghdad in summer.

    "...one would expect they will be producing 500 million barrels of brine per day along with the 5 million barrels of oil."

    " So to produce five million barrels per day of oil from a field like this, you would need more than 500,000 wells."

    that may be true if ghawar was located in a typical rule of capture state/county. the fact is that aramco has managed their reservoir in such a way that they have taken maximum advantage of gravity segregation, this required that the depletion rate remains low thus water throughput,number of wells and water cut all remain low relative to the east texas example.

    you cannot say this about east texas. the high recovery in east texas occured via gravity segregation in spite of the excessive rate/over-developement.

    other examples of high recovery by gravity segregaation despite high throughput rates are lost soilder and wertz in wyoming. the common denominator is relatively steep dip and low viscosity crude. ghawar will probably recover in the 65% range as is typical for a gravity drainage reservoir.

    Saudi aramco are focusing on enhanced oil recovery so they must have started to deplete. Think about it they are focusing on old already producing fields not new fields and it is not on increasing production it is on enhanced recovery.

    Good point Allen. I've arrived to the discussion late but I'll add that I've seen an ultimate recovery rate exceed 90%. Long story why Shell produced that field way past its economic limit. But in water drive reservoirs it's very possible to recover 95%+ of the oil in place. But as you say, that last 40%+ comes out the ground very slow...and at an ever increasing cost. Which is where much of US production is right now. We have a great many fields recovering large amounts of oil. The good news: decline rates for these fields is very low. A good solid base. The bad news: there really isn't any way to increase the RATES beyond current levels. The new big oil fields we're developing in the Deep Water GOM give us a nice pop when they come on line but they'll never have anything remotely close to the life span or recovery rate of our old heritage fields. Thus our domestic oil production future: a slow decline of old production + the rapid decline of the new fields = an ever increasing dependence on imports.

    Thank goodness we have the military strength and sufficient self-righteousness so we'll be able to take what we need from the rest of the world when push comes to shove.

    ROCK! Been wondering what you were up to, worried you'd been, to coin a term, "1986'd."

    The sunk cost of the US oil infrastructure is amazing, all those wells drilled by everybody and their grandma over the years, waiting for Ma and Pa to work the pumpjacks. The contrast between the US situation and the rest of the world would make for an interesting study, with some eye-grabbing charts.

    This piece about OPEC's reserves going through another roof gives itself away in rather obvious fashion:

    The increase in Venezuela’s reserves in recent years has been very sharp from the 76 billion barrels in 2003, as the country now adopts the policy of adding non-conventional heavy oil deposits to its conventional oil reserves.

    That stuff is some real sludge. Place outdoors in an arctic environment and you'd have material you could form into custom shaped furniture.

    And Venezuela's production and net oil exports have been falling since 1997. While Chavez has certainly not helped matters, the start of the decline in production preceded his rise to power. At their 1997 to 2008 rate of decline in net oil exports, they would be approaching net oil importer status around 2025.

    Appreciate the thought Dude. Besides the new gig been recovering from double knee surgery. Too many years running up and down drill floors I guess. Those days may be over now.

    You might know but some may not that the recoverable reserve numbers depend as much (or more) on the price platform as the actual amount in place. Run the price up from $50/bbl to $100/bbl and you can honestly say that Vz's recoverable numbers have increased several hundred percent. The flip side; drop price projection and they lose 70% of their future production.

    The current recovery systems like water injection, CH4 injection, fracing methods and solvent injection used by Saudi Arabia are not EOR? I wonder what new recovery methods they will try in getting 40% more oil to the surface?

    And what is the cost in both money and energy (EROEI getting smaller)?

    Sounds like mostly a big fish story, just like their claim to soon have production capability of 16 mbpd.

    Maybe Kunsler was on to something regarding the rise of piracy on the high seas.

    West weighs arming ships

    ISTANBUL — Challenging a global aversion to guns aboard ships, France has put troops on tuna boats in the Indian Ocean, and Belgium is offering military units to its merchant vessels off the Horn of Africa. Now, U.S. lawmakers are weighing similar action to fight piracy.

    Opponents fear such moves will escalate the violence and raise a minefield of legal issues.

    In June, the U.S. House of Representatives passed an amendment that would require the Department of Defense to put armed teams on U.S.-flagged ships passing through high-risk waters, specifically around the Horn of Africa where Somali pirates have become a scourge of world shipping.

    The amendment now goes to the Senate. A separate bill introduced last month would grant immunity from prosecution in American courts to any "owner, operator, time charterer, master, or mariner who uses force, or authorizes the use of force, to defend a vessel of the United States against an act of piracy."

    ...A range of maritime groups and insurers oppose arming ships because of liability issues and fears that violence could provoke an arms race with the pirates. Still, some ship-owners hire private guards; Israeli commercial boats are believed to routinely carry arms.

    Jeez! I cannot understand why the braintrust that gave us AIG bailouts and Eel- lectric cars cannot figure out a simple convoy system.

    One convoy of twenty ships plus one escort (and working radios mean more escorts if required) means the end of the pirate problems.

    I guess the braintrust cannot think past the 'GI Joe' solution ...

    I suspect the scheduling costs for convoying are higher than you think.

    It's probably more profitable right now to hire a squad of mercenaries.

    I'll make another of my occasional shoutouts for Firefox extensions that will juice up your postings:

    CoLT, which allows you to create an embedded link to the page you're on, like this: The Oil Drum | Discussions about Energy and Our Future, instead of http://www.theoildrum.com.

    CustomizeGoogle, which removes click tracking, allowing you to create links from Google searches; without it the links you make are directed to Google themselves, thus don't work. This is just one of many features this extension offers, such as removing ads or disabling the sending of cookies to Google Analytics, where they keep track of everything you search for - really creepy, that.

    Text Formating Toolbar:



    at the push of a button, embed images, etc.

    CoolPreviews:What I like most about this one is how you can highlight text and then search for that text in Google/Wikipedia/etc. with a right-click. Its primary function is to open up a link in a preview window, which closes after you move the mouse off it.

    Hope this is of interest/help to some of you.

    Weather (Hurricane) Alert.
    Atlantic may soon see first named storm: NHC

    NEW YORK (Reuters) – The Atlantic Ocean could see its first named storm of the hurricane season in a day or two as a low pressure system off the west coast of Africa gains strength, the U.S. National Hurricane Center and other forecasters said Friday.

    The energy market has focused on the system, located about 200 miles southwest of the Cape Verde Islands, because it has potential for significant development as it marches across the Atlantic toward the Lesser Antilles at 10 to 15 miles per hour over the next two weeks.

    The U.S. National Hurricane Center gave the Cape Verde system a high chance - greater than 50 percent - of becoming a tropical cyclone over the next 48 hours. Some forecasters said the system could affect the U.S. East Coast late next week.

    The NHC was also watching a tropical wave producing showers over Hispaniola and the Bahamas. The NHC gave the system, which some forecasters said could affect the Gulf of Mexico next week, a small chance - less than 30 percent - of becoming a tropical cyclone over the next 48 hours

    You can follow it here: Graphical Tropical Weather Outlook It is the big circle below the red "2". Click inside the circle and get a larger picture of that area. The clouds below the center show that it is starting to rotate.

    Ron P.

    Weather Underground is the place to go to get tracker info.....


    The Sea surface temps are wild....

    You're not kidding. If anything gets into the Gulf with low shear, it's going to be a very bad day.

    Tropical Storm Ana. HWRF has it good for NOLA. Hillbilly.

    HWRF is ?

    Ana would arrive on the Gulf Coast on about the first day of the "evacuation" season.

    We can have hurricanes for almost half the year. But ones strong enough to warrant evacuation (average every 4 or 5 years) are within three weeks (+ or -) of September 10th.

    Gulf waters are hot.


    HWRF is a computer model. Bill looks nasty.

    Bill has a good chance of being a "fish hurricane" or just hitting Bermuda.



    Weather (Hurricane) Alert.
    Atlantic may soon see first named storm: NHC

    Say hello to Tropical Storm Ana

    Re: Warming Ocean Contributes to Global Warming

    The results indicate that the warming of the northward-flowing West Spitsbergen current by 1° over the last thirty years has caused the release of methane by breaking down methane hydrate in the sediment beneath the seabed.

    Professor Tim Minshull, Head of the University of Southampton's School of Ocean and Earth Science based at that the National Oceanography Centre, says: "Our survey was designed to work out how much methane might be released by future ocean warming; we did not expect to discover such strong evidence that this process has already started."

    This is one of the positive feedback loops that they've been warning about for years. I must be a paranoid neurotic because that scares the hell out of me. Gut feeling...we'll run out of air to breathe long before we run out of fossil fuels to burn.


    ...we did not expect to discover such strong evidence that this process has already started.

    No one could have foreseen!

    I'm never surprised by the "This is happening much faster than we thought." reports, which are now the norm, it seems. I 'knew' many years ago, when I first heard all the AGW stuff, that it was not going to take until 2100 to see the extreme effects they were talking about for the 21st century. The cores that proved that the Earth sometimes "flips" into a new climate, in as little as a decade or so, just confirmed my suspicion that the planet will likely react much more quickly and severely to our chemical contributions than we would like, or than the scientists would suspect (or maybe just feel they can state publicly without being pinned as extremist scare-mongers).

    2013 man! That's TEOTWAWKI! (Just to stay away from the 2012 crazies).
    (Actually I picked 2016 originally, about 4 years ago, as the year most people would realize, climatically, what we are really in for, then decided it would happen faster than *I* thought too.)


    - RL
    Once there was a world
    We thought we had forever
    Now there's just today

    It's been a long but productive week and just before the final whistle, I squeezed in two more audits.

    The first of these two is a courier company. The lighting in the sorting and truck loading area consists of single 8 ft. HO continuous strips spaced approximately seven and a half metre apart. Each 8 ft. strip consumes 125-watts and supplies roughly 8,000 mean lumens which translates to be 64 lumens per watt, not taking into account luminaire losses and several years of dirt depreciation. This space is illuminated 24x7, but unoccupied during the time the trucks are out on the road; with new high efficiency tandem F32T8 industrials (100 lumens/watt) and occupancy sensors, we can cut this client's lighting load by two-thirds and, at the same time, increase light levels by 15 to 20 per cent.

    Next, we have a 4,000 m2 warehouse that contains a mix of 455-watt metal halide steelers and 2-lamp F96T12 industrials. We'll be replacing these HIDs with 6-lamp high bay fluorescents that consume 222-watts, cutting this portion of their load by just over half. In addition, "vertical" lumens -- a critical consideration in the case of narrow isles with tall racking -- will more than double, as these new fixtures do a far better job illuminating the sides of racking than do steelers, which tend to pool most of their light at the floor. The 8 ft. industrials will be replaced by new F32T8 tandems with a 0.77 BF for maximum energy savings.

    Thus, in the last ninety minutes of the business day, our annual energy savings under the direct install programme increased by six figures, and we cut another quarter million plus metric tonnes a year from NSP's CO2 emissions. Just two more days until Monday.... yippie!


    I always like to see your real-life examples of saving energy simply and cost-effectively. I can't help but wonder what a 100 people like you would do with a bit larger fraction of Obama's stimulus money!

    Thanks, Paleocon. I drive through commercial and industrial districts and see one building after another where we can do better; often much better. Lights turned on when there's more than adequate daylighting; lights left on in spaces that are unoccupied for long stretches of time; and lighting systems that consume twice as much electricity as need be due to obsolete hardware. The amount of energy we waste is staggering.

    There are countless examples to draw upon and I would love to share more, but I appreciate this is something largely tangential to main discussion and I want to be respectful to the other members of this forum (which is why I typically post these types of entries late Friday night).


    Can anyone explain this to me. Oil is not my bag but i am assuming there is a EROEI problem here.

    The article claims the oil sands contain 1.4 trillion barrels of recoverable crude. That is questionable at best. If you Google oil sands reserves you will get anything from 1.7 trillion barrels to less than a tenth of that figure. Canada itself claims 179 billion barrels total reserves. Of course all but a few billion barrels of that is in the tar sands. Oil reserves (most recent) by country

    However only a tiny amount of that can be recovered each year because it must be mined with heavy shovels and trucks then processed using vast amounts of natural gas and water.

    Book Review: 'Tar Sands' by Andrew Nikiforuk

    If you’ve been following energy news with a discerning eye, then you already know better than to buy into all the hype about the Canadian tar sands. Far from being a panacea for declining supplies of conventional oil, the sands could never contribute more than a proverbial drop in the bucket to daily world oil production. And even achieving this modest rate of production would require such staggering quantities of water, natural gas and boreal forestland as to leave Alberta resembling “a third-rate golf course in the Sudan” before the bulk of the sands’ 175 billion barrels had ever been produced.

    The Book: Tar Sands: Dirty Oil and the Future of a Continent

    Ron P.

    This Byron guy is a flat out liar over at the Daily Reckoning

    What Byron is talking about it the amount of resource in place. With current technology, the estimate is that 175 million barrels of oil is recoverable. There are other technologies being worked on. For example, a reader named "ms" posted this comment on my post about Canadian oil.

    E-T Energy, of Alberta, has developed a new method for oil sands production that claims to be much more energy efficient than mining or SAGD. It also claims to be able to produce from deposits too deep to mine and too shallow for SAGD.


    The January 2009 presentation has more technical info:

    The amount extracted annually is not very high (about 1.2 million barrels a day in 2008). It seems to me that technology will be a big player in deciding what is extracted in the future.

    There is a huge market for this in China and Japan, if technology can improve output. The likely method of transport is rail to the West coast, and ship from there. See these articles:

    CN's revolutionary pipeline on rails and

    Oils sands: Canada to China, Japan, India not US

    Re: Recession slows Ontario Power Generation

    We don't have Ontario's large industrial base so, consequently, we haven't been as badly impacted by the current recession as elsewhere; nonetheless, Nova Scotia Power's electricity sales in July were down 7.6 per cent y-o-y and down 5.1 per cent for the year to date (unadjusted for weather).


    I think 5% of that 7.6% drop is due to your efforts in installing energy efficient lighting or there have been fewer good hockey games on in the early evenings.

    Hi Neil,

    I wish I could take credit, but note the pronounced drop during the overnight hours. Then, mid-month, there's a significant upward shift in demand which may be due to a major power consumer resuming operation (e.g., a pulp and paper or tyre manufacturing plant).

    As you know, it wasn't all that long ago that electricity demand throughout much of North America doubled about every ten years and utilities such as Ontario Hydro, BC Hydro and Hydro-Québec were scrambling to build new plant and string new wire. Twenty-five years ago, when the Canadian economy was experiencing another major downturn, I was working for the Ontario Ministry of Energy trying to get various utility conservation initiatives off the ground. Unfortunately for me, the province was saddled with an enormous electricity surplus due to a sharp fall in industrial demand (that, combined with a string of overly optimistic forecasts and complications arising from the long lead times in getting its new nuclear fleet online) so, politically speaking, I was dead in the water. Meanwhile, on the other side of Queen's Park, my counterparts at OH were frantically performing CPR on the growth monster; e.g., their "Stamp out cold feet - go electric heat" campaign and tv commercials such as these:


    It's hard not to think of all the lost opportunities that arose from that particular folly.

    [After reliving my "bitter years", I'm off to watch something a little more uplifting, starting with this: http://www.youtube.com/watch?v=7I01BwClpSk]


    Oil May Fall Below $10 in Next Decade, Prechter Says:


    this is confusing to me, oil dropping to possibly below $10? maybe as low as $4?
    nat gas is already as low as $3.27 per mcf.

    I am an elliot wave follower, and just learning cycles in the markets (though not an expert) but nat gas is almost free, i understand the 5 yr high supply of nat gas at all time highs, but goodness gracious!, could the deleveraging we are seeing get oil and gas much lower as bloomberg suggest? up to the point where oil and gas are pretty much worthless or free? all due to deleveraging?
    i am confused. I thought oil and nat gas prices would increase due to peak oil as the rest of the world obtains, or trys to obtain the american dream. so what is it? where is the peak oil factored in this? because all i see is oil and nat gas prices falling. except at the gas pump.

    geewiz, no need for confusion. This is an economy based forecast (the Elliott Wave) that has no bearing whatsoever to geology based reality.

    Faulty premise: "the future will be just like the present (BAU) only later". Yippee, globalization is here to stay, forever.

    Such optimism would be admirable except that our short term past is no future.

    PS: Good to be back.

    I had a computer meltdown in May, had it in the repair shop three times for servicing (my warranty covered "repair" not "replacement"), had my hard-drive and mother-board replaced, and still was glitchy and gremlin-ridden. B/c of a local backlog in repair orders my computer had to be sent to Markham Ontario, a distance of over a thousand kilometers. My machine alone probably took care of a few barrels of oil.

    Missed my daily diet of doomer porn!

    PS2: I'm away on holidays tomorrow until the end of August. Will resume my daily reading of the Oil Drum in September (barring any other problems with my computer). Meanwhile, keep up the good work. Cheers!

    Grrrreat to have you back, Mr. Zadok; you've been sorely missed!

    All doomers are hereby put on notice.


    Thanks Paul. Looks like you've been keeping busy lately. Keep up the good work!! Tom

    Zadok, Kind Regards. Read U Soon.

    Thanks Lux. Cheers!

    Hi GeeWiz,

    There was a lot of discussion of this in Thursday's DrumBeat. See at:

    I also subscribe to EW theory - and got slightly bruised the other day for defending in the DrumBeat, but not too bad ;-)

    As for the shocking number of $10 a barrel, remember that Prechter is talking about nominal dollars (meaning the raw price, not adjusted for inflation). Check out this table of nominal oil prices :

    Below $10 per barrel was the norm before 1975, and the recent year of 1998 averaged $11.91 - couple that with some strong deflation and major economic problems and it seems more possible that a (temporary) plunge back to below $10 could happen - with a strong enough wave structure.

    FWIW, Stoneleigh of Automatic Earth is reportedly very good with Elliot Wave analysis. No, it doesn't take into account geology, but it's not meant to. It's more a predictor of human behavior.