Drumbeat: August 29, 2009

Gas Reserves Hit New High, Forcing Prices Downhill

Natural gas producers are running out of storage space, pushing the cost of their product lower than it has been since 2002.

The latest price drop comes as the government reported that salt caverns, aquifers and other underground areas where natural gas is stored are filling up.

Venezuela Becomes U.S.’s Second-Biggest Fuel Supplier

(Bloomberg) -- Venezuela became the second-biggest supplier of fuel to the U.S. last quarter, as exports of oil, gasoline and refined products slipped less than sales from other producers amid slowing demand in the world’s largest economy.

Venezuelan exports to the U.S. fell 5.4 percent to 1.39 million barrels a day in the second quarter, from 1.47 million a year earlier, based on figures posted on the U.S. Department of Energy Web site. Venezuela jumped to second place from third, leapfrogging Saudi Arabia, which shipped 32 percent less fuel.

Aramco boosts drilling in seismically tough Red Sea

London: Saudi Aramco, the world's largest state-owned oil company, has boosted exploration in the Red Sea, seeking deepwater reserves away from its historical focus in the east of the nation, according to its area exploration manager.

"We are at the highest level of exploration operation ever, covering more territory than ever," Ali Al Hauwaj told Dimensions, the firm's in-house magazine.

"Some of the areas Saudi Aramco is now exploring are vastly different geologically from the traditional exploration areas in the kingdom."

Analysis: Drilling Picks Up in The Far East

With a burgeoning and industrializing population, China is a major factor in the price of oil. When Chinese imports pick up, the price of oil follows, and Chinese imports of crude oil have been on the rise lately.

The third-largest importer of oil according to the EIA, China has been on a mission to diversify its crude supply. While drilling offshore the Far Eastern country has proved successful, and China has made great strides to explore and develop worldwide.

Three Triggers for Higher Crude Oil Prices

Force #1 — The Crisis at Our Border. Mexico’s oil production is on the slippery slope of doom. Pemex, Mexico’s national oil company, said that it now expects to produce 2.6 million barrels a day this year, a big drop from earlier estimates of 2.8 million barrels a day made just months ago.

Pemex’s total oil output fell 7.8 percent in July. Production from its supergiant oil field Cantarell dropped by 41 percent year-over-year! And Mexico’s exports to the United States dropped 13.4 percent year over year to 1.07 million barrels a day. That’s down one-third from July 2007’s export levels.

I’ll say that again — in just two years, Mexico’s oil exports to the United States have dropped by one-third.

Bangladeshi civic group protests gas leases to foreign firms

Dhaka - A pro-left civic group Saturday protested the Bangladeshi government's decision to award rights to two foreign oil firms to explore and exploit three natural gas blocks with export options in the Bay of Bengal.

...The leftist groups have long opposed such gas export options by the companies under the Production Sharing Contract, which was drafted by the past military-backed government in 2008. The groups cite the country's own severe fuel crisis in opposing the exports.

Time for Natural-Gas Autos?

"CASH FOR CLUNKERS" DEMONSTRATED, AMERICANS love a deal. And Congress may have yet another for you when it returns from summer recess.

The plan is to offer tax credits worth up to $12,500 on the purchase of new cars and trucks. The catch is that your new vehicle must run on natural gas -- compressed natural gas, or CNG, to be precise. A Senate bill, the counterpart to the House's NAT GAS Act, also would offer up to $64,000 in tax credits on fleet vehicles, and up to $100,000 to anyone opening a CNG filling station.

Jimena Strengthens to Hurricane South of Mexico, U.S. Says

(Bloomberg) -- Tropical storm Jimena strengthened to a hurricane in the Pacific Ocean south of Mexico, the U.S. National Hurricane Center said today, while Danny weakened to a tropical depression overnight as it continued to move slowly to the north-northeast off the U.S. East Coast.

Jimena was about 285 miles (455 kilometers) southwest of Acapulco, Mexico, as of 11 a.m. New York time, and moving toward the west at about 9 mph, the center said in the advisory. The storm, with maximum sustained winds of about 80 mph, may become a “major” hurricane -- with winds of 111 mph -- by late tomorrow as it turns to the west-northwest, the center said.

Oil giant 'is price gouging'

OIL giant Caltex has announced a $298 million profit for the first half of this year - a 52 per cent increase on the same period last year - amid claims the company is price gouging.

Caltex Australia CEO Julian Segal said the earnings boost was in part due to a jump in the firm's refinery profit margin from 7c a litre to 8c a litre over the period.

Regulating Derivatives Is Accepted After Crisis, Gensler Says

(Bloomberg) -- A consensus has emerged in Washington on the need to regulate the derivatives market, a reversal of the political climate in which restrictions were rejected in 2000, Commodity Futures Trading Commission Chairman Gary Gensler said.

Mexico to issue tender for ethanol production

Mexico’s state-owned Petroleos Mexicanos (Pemex) will invite tenders next month for a contract to produce 176 million l./year of ethanol, according to a senior government official.

Energy Secretary Georgina Kessel said the bidding round, which will be concluded in December, aims to promote ethanol as a transportation fuel as part of a wider plan by the government to reduce pollution and diversify the country's energy mix.

Captain Planet

IN THE rough-hewn hall of the Little Yarra Steiner School in Yarra Junction, environmental architect Michael Reynolds is fielding questions from a crowd of would-be disciples. And he's hearing a familiar lament. "We want to build an Earthship, but we've spent 4½ years trying to get planning approval," says a man in his late 30s. "We originally wanted to follow your principles very closely but realised there were some things we just had to compromise. It was the only way we were ever going to get it approved."

"Exactly," Reynolds fires back, pacing around the stage with remarkable vigour for a man who has only just stepped off a 17-hour flight from the United States. "That's just crazy. We don't have time for that. What the planet needs right now is a billion Earthships. But right now, conventional junk housing is the easiest thing to get a permit for, while the right thing to do - green, sustainable, zero-carbon-emission housing - causes someone to have to fight for years to get permission. Therein lies the problem. It's not the technology - that's here, we can do it, anybody can do it. The problem is that we won't let ourselves do it."

Don Shelby Meets With Famed Global Warming Author

"Everybody knows pretty much what we need to do," said McKibben. "We've got to move off fossil fuel and onto renewable, clean energy. The question is not whether we're going to do it. In 100 years, we'll do it. The question is whether we are going to do it fast enough to deal with the onrush of climate change. And given what science tells us now. Given that science tells us we're already got too much carbon in the atmosphere. That 350 parts per million is the most we can safely have and we're already at 390. Given that, the question becomes can we do this fast enough."

Reading Peak Oil Deniers Is a Waste of Time

Three bombs were dropped on the peak oil community this week, in what smells like a coordinated attack timed to incite public uncertainty about the validity of the peak oil argument, and question the importance of mitigating climate change and transitioning to renewables.

The peakers are mobilizing a response, an onerous task made necessary only because their critics' bombs received prominent placement in major publications with large readerships, not because their critiques had any serious validity.

I will leave it to the capable hands of authentic petroleum geology experts to debunk the latest critiques. It is in order, however, to give the public a brief look at who these critics are, and their abysmal track records, which I have tracked and debunked since 1996.

British firm opens oil field in India

BARMER, India (AFP) – Britain?s Cairn Energy on Saturday began pumping crude from a vast oilfield in the Indian desert state of Rajasthan that is set to increase the country's crude output by 20 percent.

Two officials in Texas go after one of state's biggest benefactors: Exxon

DALLAS (AP) — A pair of elected officials in Texas is going after Exxon Mobil, a name synonymous with the state, for allegedly stuffing abandoned oil wells with piles of junk, sludge and tools so other companies could not drill in the same places.

The Texas Supreme Court recently reversed a jury's finding that the world's largest publicly traded oil company intentionally wrecked the wells nearly 20 years ago.

The state land commissioner and comptroller, however, don't want Texas to drop the case.

"They sabotaged the wells," said Land Commissioner Jerry Patterson, who began a campaign against Exxon in July by asking state regulators to levy massive fines. "If they're allowed to get away with that, that puts the world on notice: They can do what they want. It's bad public policy."

Iraq 2010 budget sees oil prices at $60 per barrel

BAGHDAD (Reuters) - A committee reviewing Iraq's budget proposals for 2010 has recommended spending plans be based on average oil prices of $60 per barrel and average crude exports of 2.15 million barrels per day, a government spokesman said on Saturday.

Iraq's approved federal budget for 2009 was based on income from oil prices averaging $50 per barrel.

Cos may be asked to sell surplus coal at discount

NEW DELHI: Steel, power and cement companies will have to sell surplus coal from their captive blocks for 20% less than the government-determined price, according to a policy being framed by the coal ministry.

As the notified price of coal is already 40-50% lower than market rates, the proposal is certain to nix these companies’ plans of making some tidy profits.

Easy solar energy: Is the writing on the wall for fossil fuel?

JEDDAH: Investment in green technology has gone far beyond earth closets and recycled brown paper bags, admirable first steps though they were. When a major global industrial player commits to it to the extent that the corporate giant Siemens AG has, that alone is a convincing argument that the world is looking for cleaner ways of producing energy other than burning fossil fuels. Moreover, it is a very strong indication that the alternative power generation market is also commercially viable.

Coal is still king

We can't continue to use the atmosphere as a dump for carbon dioxide emissions, say governments concerned about global warming. Rather than storing this colourless, odourless, tasteless gas way up there, they reason, let's store the carbon dioxide way down here, buried under ground or in the oceans.

And since burial solves the carbon dioxide problem, they then conclude, we can with a clear conscience crank up our use of coal.

Firm Wants U.S. Inquiry in Lobby Case

Lawyers for a Washington lobbying firm have asked federal prosecutors to investigate a former employee who the firm says sent fake letters to members of Congress urging them to oppose climate change legislation.

A spokesman for the firm, Bonner & Associates,said the request was dated Aug. 12, adding that the firm’s owner, Jack Bonner, “is quite serious about prosecuting this individual and making sure he doesn’t do this again.”

The man who doubted Al Gore

We rely on authority for the vast majority of what we believe, but global warming theory does not rank as knowledge of the same order as whether Iceland exists or the moon is made of green cheese. My reason for believing in the existence of Iceland is that a conspiracy to conjure it out of geographical thin air is passing unlikely. But anthropogenic global warming is different. Far from being an established fact, it is a hypothesis whose allegedly disastrous consequences will occur sometime in the relatively distant future. It also comes attached to considerable psychic satisfactions and political advantages for its promoters.

Climate change may pose risk to country's security: Study

NEW DELHI: Climate change may pose a risk to the country's security as the impending rising sea-level and melting of glaciers threaten to redraw the world map, a study has warned.

Conducted by Institute for Defence Studies and Analyses (IDSA) working group, the study, released by union environment minister Jairam Ramesh, delves into the possible adverse impact of climate change on the strategy and tactics of the armed forces.

Utah Gov. Herbert says he will host first 'legitimate' debate on human-caused global warming

SALT LAKE CITY — Utah Gov. Gary Herbert says he will host the first "legitimate" debate about whether humans contribute to global warming later this year, highlighting skepticism on the topic that is quickly coming to define his new administration.

The Cow Turns Green

Vilified as an environmental disaster, the meat industry, abetted by science, is now trying to change its ways.

A Sometimes Lonely Trek for Global Warming Awareness

As she has plodded along, Ms. Browne said, she has come to understand her journey as a one-woman survey of the American mindset on global warming, though one, she readily concedes, that is deeply unscientific. Normally a glass-half-full type, she says the trip has made her “more pessimistic.”

“Mostly people think it is a problem,” she said, “but mostly they think it will not impact them anytime soon.”

Re: Reading Peak Oil Deniers Is a Waste of Time. Up top.

I agree but there is a reason they are coming out of the woodwork again now IMO. We are heading into fall and winter. The oil/gasoline market often drops off after the summer driving season and makes a low in January.

Last year was a an extreme example of the phenomenon with a dramatic drop in prices during the fall and early winter. By predicting a price drop now the Peak Oil Deniers will, just like the rooster who takes credit for the sunrise, be able to point to their prescience at the summer top later this year and early next.

They will be fooled again as the economy regains some strength and Chinese demand keeps prices from falling to the extremes of last fall and winter.

The deniers are like the people who stay on shore after the hurricane warning.
They seek tragedy, and hope others will not stop them.
When they print articles in the media, it causes others to believe in the lie.
Then innocent people are harmed by the consequences of statements like "There is no hurricane, that radar is wrong..." " It will hit somewhere else....we have plenty of time." "It will not be that bad...." Thousands of people have lost their lives from ignoring warnings. Peak Oil is no different. There will always be people who deny and ignore the warnings.

However, with Peak Oil, the imminent danger is not apparent because we have not had anything like peak oil in our lives. While we have seen pictures of hurricanes, the only thing close to peak oil was the embargo in the 1970s which only lasted a short time. Also, peak oil seems to be having a slow movement, with the full effects not being felt for years. Its almost as though its being hidden on purpose by the media not wanting to drive a panic????

The general population simply thinks we can drill for more oil, and it will be there.
I guess it will be a last minute wake up call when the pumps are closed down.

The trouble is that the deniers don't believe there is a hurricane coming, peak oilers do, but both continue to sit on the beach anyway. One enjoying the sun shine, the other nervously watching the horizon while erecting a canvas wind-shield. When the hurricane arrives both are going to be swept away.

Say, out of a billion people in the West, only a small percentage are Peak Everything aware and out of that group a very small percentage seem to be doing anything about it. So we potentially have an infinitesimally small number of people actually preparing to meet what is arguably the biggest threat humans have ever faced. Deniers are not the only ones in denial when viewed through the lens of action taken. No?

There are a large number of potential "show stoppers" out there ranging from peak oil, peak water, peak food, debt, etc., etc. Assigning each one even a small probability of occurrence results in a high probability that it will hit the fan.

To me, a collapse of some kind is on the near horizon and cannot be avoided.


There are a large number of potential "show stoppers" out there ranging from peak oil, peak water, peak food, debt, etc., etc. Assigning each one even a small probability of occurrence results in a high probability that it will hit the fan.

To me, a collapse of some kind is on the near horizon and cannot be avoided.


This is why my outlook has become so grim. It kind of all comes together in Jared Diamond's "Collapse." It's never just one thing that causes everything to go to shit. It's a combination of things that come together - death of a thousand cuts, nickel and dimed. It's the same with any "good" disaster - you can try to assign blame to some single element, but it's really the small errors made before hand that lead to the large error. There are just far too many problems converging at once...any single one could be overcome, but not all - or a few - at the same time.

"A collapse of some kind is on the near horizon and cannot be avoided."

Whole hearted agreement here!!!!

That's only half an analogy so far.

The Peakers are on that beach trying to convince enough others to help join together to build something substantial so that there is a chance of many of them surviving.

Of course, some Peakers will have also gotten busy looking to see if there are ways to get off the beach.. which in this analogy it would be pretty fair to say we all live in low-lying coastal areas as far as our energy dependency is concerned.

'NonDeniers are in denial too..' .. getting a bit cyclical. If you're suggesting that making an effort to get more people engaged and informed is a form of denial, not accepting that 'too few are engaged and informed'.. it sounds like you're suggesting that one simply accepts that status-quo and not try to challenge it.

The difficulty with the hurricane metaphor is that it seems to happen often enough that more people die in the evacuation than in the hurricane, with the effects of the hurricane rather trivial except maybe over a few thousand acres scattered here and there hard by the sea. There's just so much "crying wolf" that it's become almost impossible for non-specialists to find any signal amidst all the noise. And the noise is so overwhelming that if they paid heed they'd have no time left in which to live life.

We have the same problem here in the north with snowstorms. The smallest threat of a flake is routinely and histrionically hyped into the portent of ultimate millenarian doom. The "news" channels have 24 hours to fill, but on most days there's just a few minutes of news, so they simply fill the rest with rubbish. As a mayor of Chicago said, trying to change the subject in an unguarded moment that unhinged some of the nannies with way too much time on their hands: yes, it gets cold in Chicago in winter, so don't go out naked.

And for most people the signal itself is trivial. So the rational approach becomes to ignore the hype, which - no surprise - is what has been happening. For the great majority, the odds of dying in any kind of storm are negligible even if they pay no attention beyond looking outside. Storms are simply not even a noteworthy cause of death for the USA as a whole - not even in the year of Katrina when the gross odds were about 1:150,000, readily attained in a single and not terribly long car trip - and never have been even before useful weather forecasts of any kind existed.

Now, for AGW or oil, unlike storms, one can't really point usefully to the last occurrence. That leaves little to go on save for magical speculations and pronouncements from wizards who sound about like the almost perfectly ignorable weather-hypers. In the end there's nothing for a lay person to see save for a few more drops in a fathomless sea churning with every manner of wild exaggeration - and therein may lie a problem.

Reading Anthropogenic Climate Change Deniers is also a waste of time. One can debate severity of impacts or the best policy proposals to address the problem, but not the basic physics or the mounting evidence of a much more rapid onset than anticipated.

BARMER, India (AFP) – Britain?s Cairn Energy on Saturday began pumping crude from a vast oilfield in the Indian desert state of Rajasthan that is set to increase the country's crude output by 20 percent.

Does anyone know the name of this field? And how large the reserves are?

Reading the article it says that by 2011 the production will be 175,000 bpd. I would hardly call this 'vast'. What are India's production currently and is it declining?

anyone got any further info?

I was going to ask the same questions.

What I know is that 175 kbd peakproduction is one of the bigger megaprojects that come on stream nowadays. It needs 100 of them to produce 17,5 mbd. For (new) fields that produce 17,500 bpd 1000 are necessary to produce 17,5 mbd.

India (C+C) peaked in 1995 at 703,000 barrels per day yearly average. Their monthly high was 712,000 bp/d. They have basically been on a plateau ever since averaging between 640,000 and 698,000 bp/d. This year they are averaging 673,000 bp/d through May.

In 1989 they produced an average of 700,000 barrels per day but then went into a sharp decline. They produced only 534,000 bp/d in 1993. But then apparently they put on a new field and reached their peak two years later. A 20 percent increase would put them around 800,000 barrels per day if they can do it. That is a big if however. A monthly chart of India's production shows a constant monthly decline since last November when they produced 707,000 bp/d.

Ron P.


The field is listed in the Megaprojects wiki: "Mangala Area (Mangala; Bhagyam; Aishwariya)." Nothing to see here, move along. Production peaks in 2012.

Re: Utah Gov. Herbert says he will host first 'legitimate' debate on human-caused global warming

I notice that this story is from the Washington Examiner. I think one must also take note that they post articles by that well known Republican, Newt Gingrich, the latest one which has this comment:

The Obama Administration, still in the middle of a war with the radical wing of Islam, is waving a white flag of surrender....

Think about that. Was the Bush Administration actually "at war with the radical wing of Islam"? Were we fighting Saudi Arabia's "radical wing", which might mean the Wahhabi branch of Islam? If so, why were we buying oil from them? Would old Newt stop buying oil from those guys, if he were to be elected the next President? Inquiring minds want to know...

E. Swanson

The latest stat was YOY military spending is up 14.8% for the USA-now Afghanistan needs to be ramped up while Iraq continues indefinitely-for how long will all this be blamed on Baby Bush-when does the responsibility shift (if ever)? The Dems swept into power 2 1/2 years ago on a promise to get out of Iraq-the USA has got a lot more problems than just stupid Republican politicians.

Problems with military spending? What happened to the last two major politicians who were serious about avoiding and staying out of unnecessary and counterproductive wars?

Are you trying to re-write history?

The Democrats did not "sweep into power" in 2006, since they did not gain a filibuster proof majority in the Senate, giving the Republicans the advantage with their solid block voting. This is still the case and is one reason the Health Care bill has not passed and we are not likely to see Universal Health Care come out of the mess. The Republicans have continued to try to block any efforts at reform of the Reagan Neocon agenda and are still operating in campaign mode, dispensing massive loads of cow pucky thru their buddies in the conservative media. Where are their calls for a return to a Glass-Steagall Act type of control on the financial industry or for any punishment of the thieves on Wall Street?

We are up to our eyeballs with trouble in Iraq, even though Iraq was never a direct threat to the U.S. the way they were claimed to be. Clinton was stuck with the aftermath of Desert Storm, which left Saddam in place and Bush 43 had apparently decided to invade even before 911. It's sort of like what happened in Vietnam, where events during the Eisenhower administration put Kennedy in a bind, which then escalated into Johnson's war and Nixon's bombing and invasion of Cambodia and Laos. The power hungry conservative political guys never seem to learn.

As for the military budget, that which was passed recently was a late passage of the Bush Administration's 2009 budget. Also tell us whether your data for last year included the Supplemental Appropriation which was used to fund the wars in Iraq and Afganistan, but which was not officially part of the normal DOD budget..

E. Swanson

Iraq was a direct threat to the oil industry, and our future supply of oil after Mexico and Canada are depleted. That was made clear when they invaded Kuwait. Bush 1 thought he could control Saddam, by kicking his A$$, but it did not work, so we had to go and end it with Bush 2. If we had not stopped them, they would control all reserves in the middle east. Obama is not getting out of Iraq as fast as he said, because he now knows "The Rest of the Story!"

The real trouble will start when the Russia and China duke it out over the middle east oil. The Iraq war was just a prelude to a massive blow out (Armageddon) probably around 2030.
The US will not be in that war because of a financial implosion and government insolvency in 2012.
That is if an asteroid, global warming or some other event does not destroy us first.


I agree with your anti-revisionist push-back.

Let's face it, if President Obama dared to actually cut our military budget, even 1%, he would be vilified by the defense industry lobbyists, their Congressional lackeys,The Limbaughs and Becks and Hannities, and all the Joe the Plumbers and folks running around with the fading 'support our troops' yellow ribbon magnets on the bumpers of their Middle-Eastern oil-guzzling pick ups and SUVs.

In the 2010 defense budget the administration proposed cutting back just the rate of growth (not an actual absolute cut, just a growth cut) and the people and institutions who equate military power (nay, just the proxy military spending)as the sole indicator of our 'national greatness' had a cow.

The military has been on a re-invigorated pork-fest post-9-11. Unmanned aerial vehicles have been a huge growth area. Sense-though-the-walls technology and mine and RPG and IED-resistant vehicles have been another huge growth area. While all the counter-insurgency stuff has been taking off, TPTB have steadfastly resisted scaling back any of the high-tech gold-plated cold-war type weaponry, since the military is determined to poise to fight the Ruskies and those commie atheist Chines as well.

Everyone please recall that the President George W. Bush administration and the Defense Industry was in a tizzy after GWB was elected in 2001: President Clinton had cut defense budgets somewhat, the Ruskies were in retreat, and we desperately needed a new threat to justify maintaining or hopefully elevating defense spending.

So we provoked an incident by flying aircraft too close to the Chines coast, and finally got what we wanted when the PRC shot at, damaged an EP-3E aircraft, and forced it to land on Hainan Island. Then there was a brew-ha-ha when the Chinese detained and questioned our the crew members and thoroughly examined every bit of equipment on that aircraft. Note that the Chines did not torture anyone.

Meanwhile, while our leaders were trying to provoke a U.S.-PRC cold war to justify reflating the growth in the military budget, earnest CIA folks were trying to interest Bush and Cheney in reports with such catchy titles as 'Bin Laden planned to strike U.S. with aircraft within 6 months'...the tribe in power at that time had a blind eye to the real threat (I honestly hope so...) but was more than happy to launch off on two wars you know about and a bunch of ongoing action few know about, keeping the complex in gravy and also assuring (they thought) our access to ME oil by camping out there for the next 100 years.

So back to President Obama and the Dems having no guts to cut defense spending and stop our empire building in the Middle-East: How many of us have written the President and their Congresspeople asking for them to cut the defense budget and withdrawal from the ME?

I have.

The fight to audit the Fed is being led by Ron Paul, a Republican. It sounds like you feel he is getting a lot of support from Obama on this one. There are some good politicians on both sides-it isn't nearly as simple as your good team/bad team nonsense.

The latest stat was YOY military spending is up 14.8%
The Dems swept into power 2 1/2 years ago on a promise to get out of Iraq-the USA has got a lot more problems than just stupid Republican politicians.

The problem is twofold, firstly the dems only got a narrow majority legislatively. And that is somewhat illusory, as the so-called blue-dog Democrats are really tough to bring along on anything even semi-liberal. Then there is the fact the the Republicans have gotten so much milage out of the "Dems are weak on defense and unpatriotic" schloc, that the Dem politicians bend over backwards to appear tougher than them. So military spending just ratchets upwards, because we've created a political dynamic whereby anyone who tries to do otherwise is destroyed politically. A similar thing has happened with regards to harsh prison sentences, every politician has to demonstrate he is tougher on crime than his opponent -so the US which already has by far the highest percentage of citizens in prison, just keeps ratcheting up the prison population (and the cost of maintaining it).

I find it interesting that most people "believe" in global warming, but not in peak oil.
The solution to both problems is no more fossil fuels, but somehow, if we think we are "protecting the environment" it is a more noble cause. Both global warming and peak oil are out of human control, and that makes people nervous. But, now Bill Gates wants to start a project to control the weather - by floating cooling barges under hurricanes to reduce their strength?

Why don't we just build a huge air conditioning system for the world to stop global warming, and use fossil fuel to power it, then both problems will be solved at once. /sarconal

Re: Michael Lynch - "I'm sure that whoever pays him for his work appreciated it as they fight for their survival against a turning tide of public opinion."

I'm puzzled as to who would be backing him. Whose survival depends on denying Peak Oil? Certainly not the petroleum companies, who have nothing to gain with denial and are pleased to see the price hikes. Executives of publicly-traded petroleum companies cannot speak out in public too much against Peak Oil in case they get sued by a shareholder for declining share prices, but my conversations with those in the industry indicate that everyone is well aware of how much trouble it is to maintain production.

"I don't know why the Times would choose to print such insouciant invective as Lynch's op-ed, but apparently that's what passes for coverage of the peak oil story today."

The mass media like to be objective by printing "both sides of the story" even if there is only one side. Also, controversy sells papers and gains viewers.

Having said that, I do appreciate reading what people of opposing views have to say, if only on the principle that you should keep your friends close and your enemies closer. Particularly with the advent of the Internet, it has become all too easy to fall into group think and only associate with like-minded bloggers (the silver bugs are bad for this). We should know what deniers are writing, if only so that we have rebuttals ready if Uncle Bob quotes them and says we just have to drill more.

With the new emergency internet shutdown law, the feds can control that too.
Lynch is paid by the feds to keep people believing in "no problem" for a few more years.

Nowhere there is no new emergency internet shutdown law. The proposed bill, S.773 - Cybersecurity Act of 2009, is in committee and has never reached the Senate floor, and possibly never will. But if it does it still must pass the House and be revised a dozen times or more before it would go to the President. But basically, as it stands now, it is a bill to help ensure that the net would stay up in case of emergency.

There are a lot of blogs out there who say this gives the President powers to completely control or shutdown the entire internet. Most of these are the same blogs who say the new health care bill will give the President power to pull the plug on granny.

The whole matter is, in my opinion, an exercise in futility. The internet is World Wide and no one controls it. Sites, in any particular country, can be blocked by the government of that country however as many already are blocked in many countries.

Cybersecurity Act of 2009
A bill to ensure the continued free flow of commerce within the United States and with its global trading partners through secure cyber communications, to provide for the continued development and exploitation of the Internet and intranet communications for such purposes, to provide for the development of a cadre of information technology specialists to improve and maintain effective cybersecurity defenses against disruption, and for other purposes.

I did not know that Lynch was paid by the feds. Are you talking about the Federal Government or the Federal Reserve? Anyway, which agency is paying him if it is the Federal Government? But most importantly what is your source of this information?

I am no Lynch fan, in fact I am one of his strongest critics. I do not think however that adding conspiracy theories to the debate adds anything to the credibility of TOD.

Ron P.

It is my understanding that the bill gives the White House the power to disconnect private networks-I don't know how you come up with shutdown the Internet from that. You state the bill is to ensure the Net stays up, and in the next sentence state that the Net is world wide and no one controls it. It would appear that some interests in the USA have the opinion that the flow of information on the Net should be under tighter government control, as in China.

It is my understanding that the bill gives the White House the power to disconnect private networks-I don't know how you come up with shutdown the Internet from that.

Yes, that was my point exactly. If you re-read the post I was replying to and my reply, the purpose of my post should become obvious to you. I make the exact point you make above.

You state the bill is to ensure the Net stays up, and in the next sentence state that the Net is world wide and no one controls it.

Yes, that is exactly why I said:

The whole matter is, in my opinion, an exercise in futility.

You wrote:

It would appear that some interests in the USA have the opinion that the flow of information on the Net should be under tighter government control, as in China.

Terrorist should not be able to post advocating terrorist activities such as blowing up buildings, attacks on Congressmen or the President. And that is possible even now to block such sites. I may be wrong but I really don't believe we need a bill to do that.

Just as freedom of speech does not give you the right to shout fire in a crowded theater, it does not give you the right to encourage people to blow up buildings, trains or planes killing hundreds innocent people. You may have a different opinion on that point Brian but I think most people would agree with me. Advocating violence, murder and assignations are not covered by the first amendment.

Ron P.

Jeez, Ron-I thought you were the one advocating violence, murder and assassinations. Seriously, what would even motivate you to throw out boneheaded statements like that one.

Seriously, what would even motivate you to throw out boneheaded statements like that one.

Bonehead posts like you are constantly make.


Lynch is a consultant to big biz, which is no stranger to the DC power-structure, but which is far more immediately dependent upon the consumers being willing to keep-on-truckin', and being good k-mart shoppers - as if nothing was wrong. Us nervous nellies in the PO community might upset the apple cart.

He's being rewarded by acting as a stabilizer against consumer revolutions in dangerous areas like 'Conservation', 'Saving' and 'Thrift'. Buying what you need, not just what you want.

Whose survival depends on denying Peak Oil?


Why so much attention for Lynch ? Someone who says that deep water fields off Africa and South-America can prevent PO from happening (soon) deliberately deceives readers of his article. Besides, mentioning this off shore fields is in contradiction with saying that there are trillions of barrels of oil more to extract. Saying that, why mentioning 50 billion or so deep off-shore barrels that important ?

Whose survival depends on denying Peak Oil? Certainly not the petroleum companies, who have nothing to gain with denial and are pleased to see the price hikes.

Do the following thought experiment, replicate our planet, but on earth-2 the people understand that PO is coming. On earth-1 not so. Perhaps short term earth-2 oil prices will be higher. But, down the road, the earth-2 residents will make a mighty effort to mitigate the effects of PO. One of the effects of this mitigation is that future price rises are limited. In earth-1 those who own the remaining oil -effectively own the planet.

One minor error or typo. Chris Nelder states:
"I first came across Lynch on the Energy Resources forum at Yahoo around 1992, which pre-dated the current crop of blogs and web sites devoted to discussion on peak oil."
The Yahoo group energyresources was started Feb 29, 2000. It was originally on ONElist which was later acquired by Yahoo. Lynch was active on the USENET during the later half of the 1990's

I think he also typoed "12000 GB" for "21000 GB" when describing Lynch's newest reserve estimates.. but I got the point.

Yes, there were a couple of typos that slipped through as I rushed to meet deadline. I submitted corrections before publication but for some reason they weren't done and I don't have the ability to fix them :-(. Will post a corrected version (with original links intact) to my blog tomorrow. Thanks for the feedback y'all.

Concerning the link up top: Aramco boosts drilling in seismically tough Red Sea

Saudi supposidely has 260 billion barrels of reserves on the East Coast in the triangle area where the other Persian Gulf producers have their reserves. With that kind of reserves they could just poke a hole about anywehre in that area and oil would come gushing out. If they truly had those reserves they could produce all the oil they would need to produce for decades to come at an extremely low cost per barrel of oil.

If that be true then why on earth are they drilling in the Red Sea, in 2 kilometers of water then through a 700 foot salt bed which, according to the article up top, can distort seismic images. Oil from this area would be extremely expensive to produce. Why would they produce oil for $50 a barrel when they can produce it for less than $10 a barrel. It just doesn't make any sense.... Unless... unless all those easy access reserves are a total myth.

Note: Would Aramco exaggerate their reserves? A sidebar to this 2007 New York Times article, Dr. Nansen G. Saleri, Manager, Reservoir Management, Saudi Aramco, says he believes Saudi has 900 billion barrels of reserves. With that kind of oil they are going after some of the most expensive oil on earth to produce. Oil Innovations Pump New Life Into Old Wells

Ron P.

Oil Innovations Pump New Life Into Old Wells

Ron, this is the kind of stuff that optimists use to keep on saying that there is no peak oil soon.
Increase the production of 500 old fields from 10.000 to 60.000 bd and there is allready 25 mbd extra oil. Only from fields well past peak.

Henri, on that page there is this link: The Reports of Oil's Demise are Greatly Exaggerated

The attempts to pump new life into the Kern River field was started in 1964, 45 years ago. This is part of the new technology they keep harping about. All these new methods were instituted over four decades ago and are now, like Kern River, in steep decline.

Henri, if you have already done it once, you cannot do it again. We have known about water and steam flooding for over half a century. There is nothing new here. When the Kern River flooding started there was no type of injection being done on that field, water, steam, gas or otherwise, only down hole pumps to such the oil out.

People who tout water, steam or gas injection as something new to enhance oil recovery are just displaying their ignorance.

Ron P.

Ron, I know these recovery techniques are not new. However, the question is how many 'past-peak' countries in the world are there still where EOR can make a substantial gain in production. Not in preventing world oilproduction going down, but making the decline a few % less steep.

Henri, that's just the point. There are no countries in the world where this type of EOR was not done years ago. Saudi has been doing water injection for over forty years, ditto for all other OPEC and non-OPEC countries.

All gains have been already made and counted. And this type of EOR has already been figured into estimated recoverable reserves.

About making the decline less steep, that is what Aramco says they are doing. They are using MRC (Multiple Reservoir Contact) horizontal wells along with the water injection they have been doing for decades, to slow the decline of some of their fields to 2%. MRC wells however are nothing but super straws. They slow down decline rate while greatly speeding up depletion rate. They are just sucking the water out a lot faster. When the water finally does hit those horizontal wells, the oil will be, for all practical purposes, gone. Their decline rate will drop off a cliff when that happens.

Ron P.

"A dose of reality for enhanced oil recovery (EOR) projection"

"How Technology Increases Oil Production"

Peter Wells also gave an estimate for EOR from OPEC last year:

There was also a presentation a few ASPO conferences back that had a good overview...I don't have the link handy.

I visited Kern River and talked to the Chevron folks there. These are links to a couple of posts I wrote A Visit to Chevron's Kern River Heavy Oil Facility and Kern River Production Estimates versus What is Economic.

You are right, Kern River is now in decline. They use new techniques to better spot small amounts that have been bypassed in previous go-arounds. Once Chevron reaches the point where it is non-economic, they will stop. Someone pointed out that it will be so expensive to cap the large number of wells, that Chevron may well continue beyond the time it ceases to be economic.

There is quite a bit of heavy oil in the world, that could theoretically be extracted with a technique similar to this (perhaps with SAGD, which uses steam injection but with horizontal wells, instead of the vertical wells that are in Kern River). But steam injection is very slow and quite expensive, and (at least the way it is done now) burns a lot of natural gas. It would be very difficult to ramp up production very much with this method.

But steam injection is very slow and quite expensive, and (at least the way it is done now) burns a lot of natural gas. It would be very difficult to ramp up production very much with this method.

How do wells respond if steam injection is intermittent? I'm thinking that concenrated solar thermal might be a good fit for this sort of application. Being that the needed steam temperature is much lower than for say a thermal-electric power plant, the cost per Joule should be pretty low. But you don't get a consinuos supply of steam, so your injection rate goes up and down depending upon the sunshine. Once we break the link of using fossil fuels to acquire new fossil fuels, we can (almost) laugh at low EROEI.

The key sentence in that article "Oil Innovations Pump New Life Into Old Wells" is this one:

The 12-country cartel [OPEC], which added Angola as its newest member this year, is poised to control more than 50 percent of the oil market in coming years, up from 35 percent today, as Western oil production declines.

Read that again: declines. The article spends eight paragraphs trying to persuade you that Western oil production is increasing, and will increase further thanks to "technology advances", and then mentions in passing that in reality, Western oil production is declining.

Surely the schizophrenia is becoming obvious even to its suffers?

Hello Darwinian,

Thxs for starting this minithread discussion on the DB toplink: "Aramco boosts drilling in seismically tough Red Sea".

I agree with what you said, plus I would also add my prior weblinks on OPEC tarmats, and how Aramco is probably now running into real tough EOR & EXOR problems in going after the barrel dregs in their old and aging reservoirs.

Thus, it would make sense that Aramco is now having drill bits '..part the Red Sea'. Are they planning on naming a drill platform Yahweh, Allah, or Moses? Isn't Energy & Elements the true religion of all Life?

I guess humans get to postPeak '..wander the global deserts' next until we finally find our way back to the New Olduvai Gorge on Ellesmere Island and other remaining outposts.

I hope these Aramco topics are explored at the upcoming Denver ASPO.

We are saved ! According to the Torygraph happy days are here again, mostly thanks to American shale gas, that he calls tight gas.
A new age of cheap energy approaches
Amazingly, the byline starts with a lie: the Internet edition says, "A drop in fuel bills is a timely, if temporary, respite from economic gloom, says George Trefgarne".
But the Printed Paper edition (I have it in front of me) says: "A surge in gas supplies is good news for the consumer and bad news for bullies like Putin, says George Trefgarne"

The article is a hoot, I can't restrain myself from posting some selected bits:

The trend for gas and electricity bills is downwards; diesel is back at the same price as regular gasoline; the world is practically choking on gas, and is potentially awash with oil. /.../
Even the price of oil should come down as the market realises just how much spare production capacity there is, left idle by Opec cutting production and by new projects coming on stream. In other words, there is going to be a second economic stimulus, perhaps as large as the trillions of dollars injected into the banking system by governments and central banks worldwide. /.../
Second, if consumers are the winners, the big losers will be all those dictators and bullies who spent the Noughties strutting about on the world stage, their egos and their state coffers puffed up by oil and gas revenues. Top of the list: Vladimir Putin, Prime Minister of Russia. Note: he has not invaded anywhere this August. Even his friends in Iran are feeling the pinch.

How come prices have fallen so much? To understand why, you need to get up to speed on the exciting phenomenon of so-called tight gas. This, after coal, could perhaps be the world's most prolific energy source. Hitherto, we have relied on conventional deposits of gas. But tight gas is locked into difficult rock formations, such as shale, and in the past couple of years the industry has found low-cost ways of fragmenting those rocks in order to get at the gas, particularly in America. The result is that US gas reserves have effectively doubled, almost unnoticed; and the same technology can be readily applied in Canada, Australia, Asia and even parts of Europe.
As we go into the autumn, US gas storage units are almost full to bursting. Facilities once designed to import are being turned around for export. When it comes to gas, America is the new Russia. And for the rest of the world, tight gas equals one thing: freedom.
How has this amazing development come about? Well, my friends, it is the market at work. The high prices of the past decade incentivised a scramble for new technology and projects which are now producing.

Strange that the British readers instead of thanking Mr Trefgarne, the man in the rose-colored shirt, they ganged-up on him, and called him a clown, said petrol had simply gone up to equal the price of diesel, not the other way around and other gloomy things.

according to the msm, resources (probable,possible and speculative included) are called ng reserves and now gas in storage is reserves too. maybe the author started to write about one thing and ended up writing about something else.

This is a real hoot.


Saw the brief TV ad on the treadmill and looked it up, then saw it is a viral marketing site from Sony for the movie '2012'.

Buy your survival lottery tickets now!

Indeed it is, because it's fake.

And this smells like spam.

I make a bigger splash sliding 20 ft down a rock.

This isn't fake though: http://www.kriscan.com/

Right, it is unbelievable and I don't believe it. Two buckets of water and jumped further than he slid and higher than his point of origin. It's a joke. But I love a good joke and I loved this one.

I used the word unbelievable deliberately, but still, I'm grinning ear to ear

It would have been more interesting had it been analyzed for its impossibility and put forth as a question as to how many people would possibly believe it to be true. There will for sure be some that will swear up and down that it is true, some that aren't sure, and others that know it's been faked. Just as there are people that believe a magical tube in your car will generate magical hydrogen which will magically enhance your gasoline and give your Hummer 100 miles per gallon. There will be believers, dis-believers and agnostics. But in what proportion? Are scientifically illiterate people more likely to believe that the magical hydrogen tube works, or that someone can build a slip-n-slide and launch someone through the air a few hundred feet and land in a kiddie pool without serious injury? Are more people going to be able to distinguish that the slip-n-slide is fake because they've had experience with one? Because they've busted their ass trying to pull diving tricks in a kiddie pool? Will more education in physics allow people a better understanding so that more people aren't duped by magic hydrogen tubes - or are we programmed to believe it because we hope that it's true, so that we're doomed anyway?

Anyway, though I posted a response, I think this could have been presented as evidence or anecdote but due to the presentation of this video link as "har har" I also felt compelled to flag it.

From The Daily Beast

behind the scene politics that caught my interest

Letters Show Oil-Lockerbie Link

...“The wider negotiations with the Libyans are reaching a critical stage and, in view of the overwhelming interests for the United Kingdom, I have agreed that in this instance the [prisoner transfer agreement] should be in the standard form and not mention any individual,” Straw wrote. Six weeks after the government reversed its position on the bomber, the BP deal went through. The son of Libya's leader, Saif Gaddafi, said it was "obvious" the two countries were talking about Megrahi during the negotiations. BP and Lord Mendelson maintain the deal had nothing to do with the bomber's release.