Drumbeat: September 11, 2009
Posted by Leanan on September 11, 2009 - 10:08am
Analysis: Pemex Strives to Increase Production through Offshore Drilling
The petroleum industry in Mexico is in a race to catch up. Although a major non-OPEC country and the seventh-largest oil producer in the world, production in the Latin American country is on the decline.In fact, the EIA reports that the country's production has fallen from 3.5 million barrels of oil a day in 2007 to 3.19 million barrels of oil a day in 2008. Furthermore, according to the agency's Short-Term Energy Report published in March 2009, production is expected to slip even further. In 2009, production in Mexico is expected to average 2.9 million barrels of oil a day, and then in 2010, production is predicted to fall to 2.7 million barrels of oil a day.
Mexico’s PRI May Favor Raising Oil Price Estimate in Budget
(Bloomberg) -- Mexico’s largest party in the lower house of congress might seek to raise the estimate for the price of Mexico’s oil exports in next year’s budget, lawmaker Oscar Levin said.
U.S., Canada to conclude joint survey of extended continental shelf in Arctic
SAN FRANCISCO (Xinhua) The United States and Canada will conclude a joint 41-day exploration of the continental shelf and ocean basins in the Arctic, which may find evidence to support the two countries' claims to the rich oil resources sleeping under the sea floor.According to the U.S. State Department, two ice breakers, the U.S. coast Guard Cutter Healy and the Canadian Coast Guard Ship Louis S. St-Laurent launched the joint mission on Aug. 7. The two ships were scheduled to cross the icy areas from the north of Alaska to Alpha-Mendeleev Ridge and eastwards toward the Canada Archipelago. The mission will conclude next Wednesday.
CALGARY, Alberta (Reuters) - Another round of significant oil price increases could come within four to five years because oil companies slashed investments to cope with last year's plunge in oil prices, Peter Voser, Royal Dutch Shell Plc's (RDSa.L) chief executive, said on Friday.
Shell Sees Time, Not Technology, as Renewable-Energy Challenge
(Bloomberg) -- Royal Dutch Shell Plc, Europe’s biggest oil company, said large-scale deployment is a bigger challenge than technological advances in replacing fossil fuels with renewable energy sources.It typically takes 25 years for new energy sources to build their share of global energy supplies to 1 percent, Shell Chief Executive Officer Peter Voser said today at a conference in Calgary. The Swiss-born Voser, 51, succeeded Jeroen van der Veer as CEO at Shell, based in The Hague, in July.
Repsol Says It Makes Venezuela’s Biggest Gas Find
(Bloomberg) -- Repsol YPF SA, Spain’s biggest oil company, discovered a Venezuelan gas field containing as much as 8 trillion cubic feet of fuel, one of the world’s largest finds.The field’s potential gas resources would be enough to supply Spain for more than five years, the company said today in an e-mailed statement. Venezuelan President Hugo Chavez and Repsol Chief Executive Officer Antonio Brufau discussed the find in Madrid today, the company said.
ExxonMobil has trouble hawking fields
US supermajor ExxonMobil has been unable to sell four Canadian fields as low natural-gas prices discourage potential buyers.The properties, which include ExxonMobil’s stake in the Yukon Territory’s only producing gas field, have not attracted any suitors since they were put up for sale on 4 May, Bruce Rauch, an ExxonMobil asset-enhancement manager based in Calgary, said.
Shell’s Renumeration Chief, Attacked Over Pay Awards, to Retire
(Bloomberg) -- Royal Dutch Shell Plc, Europe’s biggest oil company, said the chairman of its renumeration committee, who came under attack from shareholders over executive pay awards earlier this year, is standing down.
Oil-Rich Caspian Neighbors Say They Didn’t Mean to Snub Iran
(Bloomberg) -- Iran’s northern neighbors agreed to discuss the boundaries of the energy-rich Caspian Sea with President Mahmoud Ahmadinejad after his government protested its exclusion from a regional meeting.
Storm little threat to Gulf flows
US oil producers and refiners said operations were normal on Friday morning as they monitored a storm system in the western Gulf of Mexico that has a low chance of becoming a tropical cyclone.
Environmental Groups Wait to See Definitive Action From Obama
The White House's main effort has been to undo several Bush-era policies on climate control, air pollution and the regulation of roadless forests. Those actions, combined with court decisions that have struck down other rules, have given President Obama a relatively blank canvas on which to redraw U.S. environmental policy. But the administration has been cautious, leaving key issues in limbo and questions unanswered about the way it would balance environmentalism and the economy.
The electric-fuel-trade acid test
IN 1995 Joseph Bower and Clayton Christensen, two researchers at the Harvard Business School, invented a new term: “disruptive technology”. This is an innovation that fulfils the requirements of some, but not most, consumers better than the incumbent does. That gives it a toehold, which allows room for improvement and, eventually, dominance. The risk for incumbent firms is that of the proverbial boiling frog. They may not know when to switch from old to new until it is too late.
HOUSTON -- With the world population headed toward 9 billion by 2050, Texas author James McWilliams wants more genetically modified organisms and more subsidies to feed people, not cattle.His new book, Just Food: Where Locavores Get it Wrong and How We Can Truly Eat Responsibly, is sure to irritate organic food fundamentalists. He recently talked to Forbes.
Michael Pollan: Big Food vs. Big Insurance
No one disputes that the $2.3 trillion we devote to the health care industry is often spent unwisely, but the fact that the United States spends twice as much per person as most European countries on health care can be substantially explained, as a study released last month says, by our being fatter. Even the most efficient health care system that the administration could hope to devise would still confront a rising tide of chronic disease linked to diet.That’s why our success in bringing health care costs under control ultimately depends on whether Washington can summon the political will to take on and reform a second, even more powerful industry: the food industry.
Climate Bill Will Save Each US Household $5,600 Due to Reduced Oil Imports: EIA
According to the EIA, oil imports would drop by 590,000 barrels per day by 2020 under ACES. Currently the US imports about 9.8 million barrels of crude oil per day.So in terms of actually reducing US dependence on foreign oil that's not really that much, but it does add up in terms of money saved. Cumulatively though 2030 the US would save $658 billion -- or $5,600 per household. Or, using the same cumulative math, $466 per household per year through 2030 just from reduced oil imports. That's in constant 2007 dollars, by the way
8 signs you’re an energy-hogging jerk
Following the advice may not make you any less of a jerk, but at least it will make you a more energy-efficient jerk, noted John Rogers, a senior energy analyst with the Union of Concerned Scientists in Cambridge, Mass., who helped compile the list.
Obama Administration: US Has Overinvested In Oil, Gas
The Obama administration opened a new front in its effort to impose $31.5 billion in taxes on oil and gas companies, saying that the nation puts too much emphasis on oil and gas at the expense of other industries.The chief economist in the Obama administration's Treasury Department testified before a Senate panel that current subsidies "lead to overinvestment" in the oil and gas industry. That went beyond previous statements about the need to protect taxpayers and was the clearest signal yet that the federal government hopes to end its role in nurturing domestic oil and gas production.
"To the extent that current subsidies for the oil and gas industry encourage the overproduction of oil and natural gas, they divert resources from other, potentially more efficient investments, and they are inconsistent with the Obama administration's goals to reduce greenhouse-gas emissions and build a new, clean energy economy," Alan Krueger, the Treasury's chief economist, told the panel.
Import prices spike as oil rises
WASHINGTON (Reuters) -- U.S. import prices spiked 2% in August as the cost of oil rose, the Labor Department said on Friday.The increase, twice what analysts polled by Reuters had expected, was the fifth rise in the last six months. It followed a July drop of 0.7%.
Excluding petroleum, import prices increased a much milder 0.4% in August after falling 0.3% in July. Petroleum prices were up 10.5% and fuel import costs were up 9.8% -- both the sixth increases in the past seven months.
The Biggest Threat to the U.S. Oil Supply
My colleague David Lee Smith detailed the matter of Cantarell's dangerous decline curve in a seminal piece back in 2007. At that time, production had slipped by 20% in a little more than one year, from 2 million to 1.6 million barrels per day. The declines have only gotten more dramatic.Last summer, Cantarell dropped below the 1 million barrels a day. This July, output registered a 40% year-on-year decline, to a little more than half a million barrels per day. That's a 72% decline from peak production rates in 2005.
Pemex Sells $1.5 Billion of 5.5-Year Bonds in Overseas Markets
(Bloomberg) -- Petroleos Mexicanos, the largest oil producer in Latin America, sold $1.5 billion of 5.5-year bonds to help finance a record investment plan, according to a person familiar with the transaction.Pemex, as the Mexico City-based company is known, sold the bonds to yield 2.75 percentage points above U.S. Treasuries, said the person, who declined to be identified because he’s not allowed to speak publicly.
Mexico's Fading Oil Output Squeezes Exports, Spending
Mexico's oil output is falling faster than expected, increasing the chance that the country will lose its status as a major oil exporter in coming years and face a worsening budget shortfall.Output at state-owned oil monopoly Petroleos Mexicanos's offshore field Cantarell, once the world's second-largest oil field, has plunged to 500,000 barrels a day from its peak of 2.1 million in 2005.
"I don't recall seeing anything in the industry as dramatic as Cantarell," says Mark Thurber, assistant director for research at the Program on Energy and Sustainable Development at Stanford University.
Pemex Sees “Doubts” About Chicontepec Profitability
(Bloomberg) -- Petroleos Mexicanos, the state- owned oil company, needs to find a profitable way to develop its Chicontepec field, Chief Executive Officer Juan Jose Suarez Coppel said.There are “certainly doubts” about the field’s profitability and the technology that should be used, said Suarez Coppel, who took the helm of Latin America’s largest oil producer on Sept. 8. “Chicontepec has a great potential, and we have to keep investing to find a way to exploit it in a profitable manner,” he said today in a Radio Formula interview.
Sinopec to double oil refining size
CHINA Petroleum and Chemical Corp, commonly known as Sinopec, plans to spend 24 billion yuan (US$3.5 billion) to double capacity of a refining project in Fujian Province.Asia's biggest oil refiner will expand the refinery - part of China's first Sino-foreign integrated refining and petrochemical project - in the southeast China's province to 24 million tons a year, or about 480,000 barrels per day, according to a newsletter issued by its parent company yesterday.
Crude Reality – A Closer Look at the Almost Perfect Crime
Interestingly, the U.S. government chose not to publicly disclose that they were involved in crude oil swaps – because their intention was to stall manically rising prices, creating a temporary “physical glut” in the market place - and to DRIVE CRUDE OIL PRICES DOWN. Their actions were only recorded “buried” in foot notes of the Department of Energy’s Annual Report where, I’m certain, they assumed no one would ever look.
Did S.C.’s gouging law worsen gas shortage?
The S.C. law that prevents price rip-offs might have prevented something else during the monthlong statewide gas shortage that started a year ago today.Some gas stations refused refills because of skyrocketing prices, an industry official said.
“That law and threat from the (state) attorney general kept plastic bags on the pumps,” said Michael Fields, executive director of the S.C. Petroleum Marketers Association. “If they knew their next load would cost $5.50 (a gallon), they knew they would be accused of gouging. ... They knew no one would believe, ‘I gotta charge this because this is what it costs.’”
ExxonMobil, Qatar Gas put more downward pressure on LNG prices
Last week, the Henry Hub spot price for natural gas touched $1.83/million btu. On August 28, the Purvin & Gertz LNG netback at the Isle of Grain was $2.13/million btu for Algerian LNG. At Lake Charles the netback price touched $0.44 for Nigerian LNG and close study of all sources reveals that the potential for prices to go lower is real. While ExxonMobil is in a leadership position, they are joined by many others including Royal Dutch Shell, Total GDF-Suez, BG, Chevron plus national oil companies that include Saudi Aramco, Sonatrach, Sonangol and Gazprom among others. Even with a strong growth in demand for all categories of natural gas, it is now reaching the point where LNG has a commanding lead by virtue of its low and falling extraction cost. One possible consequence of this in Europe is that Gazprom's North Stream and South Stream pipelines no longer make economic sense.
When Vladimir Putin visited Ankara last month, one of the Russian prime minister’s main objectives was to breathe new life into Turkey’s long-held dream of developing civil nuclear power. The planned reactor at Akkuyu on Turkey’s south-east coast, conceived in the 1970s and now being developed by a Russian-Turkish consortium, is still delayed by haggling over the price. But Turkey has made clear it is firmly committed to acquiring nuclear generation capacity.Shelving the project back in 2000, Bulent Ecevit, then the country’s prime minister, said the world had turned against nuclear power. Now, as Tony Blair, the former UK prime minister, once said, it is back “with a vengeance”. If the world is to meet its demand for energy and address the threat of climate change, then plenty of other countries will, like Turkey, have to acquire civil nuclear technology for the first time.
San Francisco gets smart with green technology
San Francisco is using advanced technology – and the strong arm of government – to turn the city into one of America's greenest.
Darpa Seeks to Tap Water’s Power Potential
The quest for limitless energy has preoccupied military researchers for years, and Darpa, the Pentagon’s far-out science arm, has often led the way. Now the agency is looking for yet another method to harness cheap and environmentally friendly energy that would be as simple as turning on the tap.Well, sort of. Darpa is soliciting proposals for using seawater to create liquid fuel. Their hope is to harvest the abundance of carbon and hydrogen in ocean water, and somehow convert the molecules, via chemical reaction, into usable energy. Since fuel is mostly made up of hydrocarbons, the right interplay between water molecules and the carbon dioxide lurking among them would — in theory — yield fuel compounds.
For a growing number of people in the world, 350 is no longer just a number. In the past year several nations have waged a campaign to reduce the presence of carbon dioxide in the earth's atmosphere to 350 parts per million. Scientists say this level is the safe limit for humanity due to the effects of this greenhouse gas.Journalist Bill McKibben took this apocalyptic piece of scientific data and used it to launch a worldwide campaign to fight global warming. The founder and director of 350.org, McKibben visited Israel this week as a guest of a coalition of local environmental organizations.
People, Let's Get Our Carbon Down
But this environmentalism can't just be about the dangers we'll face if we don't take action--Green the Block means embracing the changes we must make as a way to build inclusive, thriving local economies. We need to put people to work swinging hammers--not building luxury condos for people with easy credit but installing insulation in old homes and solar hot-water heaters on roofs. We need urban farming and strong local businesses standing up to the big boxes that suck the life and money from communities.
Russia tells OPEC: We never promised you anything
Russia will make no apologies to OPEC for boosting oil CL-FT production to record monthly highs and can invest in new fields while crude trades at current levels around $70 (U.S.) per barrel, the country's energy minister said.Sergei Shmatko told reporters the world's No. 2 oil exporter would apply zero export duties for East Siberian oilfields from the end of September, although it would step in to regulate the oil sector should world prices plunge again.
“We never had any obligations (to OPEC). When we were communicating, we never promised anything,” Mr. Shmatko said late on Thursday, after OPEC members decided to retain output cuts.
Shtokman timing 'down to demand'
Gazprom may delay the launch of the giant Shtokman gas field beyond 2013 should demand in Europe not recover fast enough, the Russian company's export chief said today.Deputy chief executive Alexander Medvedev also told Reuters Gazprom was considering partnering with South Korean state-owned company Koren Gas Corporation (Kogas) at a liquefied natural gas project in Russia's Far East.
U.S. Energy Department Inventory Data Signals Good News for Oil Producers
The price of crude oil wasn’t exactly surging on Thursday – but apart from that, there was no end to the good news for oil producers.The U.S. Energy Department noted in its weekly inventory data that crude oil stockpiles fell 5.9 million barrels, well above estimates for a decline of just 1.6 million barrels. This suggests, for the time being at least, that energy consumption is on the rise.
Halliburton betting on deepwater projects
Halliburton Co., the world's second-largest oil field-services provider, is betting on deepwater oil and gas drilling in the Gulf of Mexico, Brazil and West Africa to bolster earnings.Explorers have contracted 16 new deepwater rigs, which are expected to arrive in the second half, Tim Probert, president of Halliburton's drilling division, said in an interview. Some 30 more rigs will be delivered in 2010 and early 2011, he estimated.
ArcelorMittal to Complete Saudi Arabia Oil Pipe Mill in 2011
(Bloomberg) -- ArcelorMittal, the world’s largest steelmaker, said it will complete a mill in Saudi Arabia to make pipes for the oil industry in 2011, at least two years later than scheduled, to tap a revival in demand.
Analyst: Shell could be first to liquefy gas offshore
Royal Dutch Shell Plc, Europe's largest oil company, may be the first company to develop a floating liquefied natural gas project with the location likely to be off northern Australia, an energy consultant said.“The pioneering floating LNG project is likely to occur somewhere where you have got benign sea conditions and where you have got a stable fiscal and political environment,” Daryl Houghton, senior LNG consultant at Poten & Partners, said at a conference in Darwin today. “That sort of sounds like northern Australia to me.”
Energy Information Administration Alludes to Speculative Money Affecting Oil Prices
In response to Congressional pressure for greater energy market transparency, new EIA director Richard Newell said his agency will now harvest more information about the energy markets and conduct deeper assessments of price factors.
Shell’s Hamburg Refinery in No Danger of Closure, Minister Says
(Bloomberg) -- Hamburg’s economy minister said he’s “less worried” that the city’s refinery could be closed down following its proposed sale by Royal Dutch Shell Plc after holding talks with the oil producer.Shell, which is reviewing the future of its refineries worldwide, offered reassurance that the sale of the plant won’t lead to production moving elsewhere, Axel Gedaschko, State Minister of Economic and Labour Affairs, said by phone from Hamburg.
Breakup shows credit markets are back
EnCana wants to break up.That is as clear a signal as you’ll ever get that credit markets are back.
EnCana’s strategically sound but poorly-timed decision to split its U.S. natural gas division away from its Canadian oil sands, gas and refining assets last year was delayed for one reason: Cenovus Energy, the new company which would be home to the heavy oil properties, was having trouble borrowing at competitive interest rates.
Valero’s Klesse Bets All on Beating Waxman-Markey Climate Bill
(Bloomberg) -- Valero Energy Corp. Chief Executive Officer Bill Klesse is so sure the Waxman-Markey climate bill will fail to become law that he’s making no strategic adjustments to cope with the legislation.“We are not altering our business model based on this legislation because we think the legislation is so poor for all the constituents, the consumers, everybody,” Klesse, 63, said in an interview at the company’s headquarters in San Antonio.
As head of the biggest U.S. refiner, Klesse may have little choice but to bet on failure of the bill, which passed the U.S. House in June. Valero said it stands to lose more than any other company and can’t turn on a dime to blunt the impact.
UK climate scepticism more common
The British public has become more sceptical about climate change over the last five years, according to a survey.Twice as many people now agree that "claims that human activities are changing the climate are exaggerated".
Four in 10 believe that many leading experts still question the evidence. One in five are "hard-line sceptics".
The survey, by Cardiff University, shows there is still some way to go before the public's perception matches that of their elected leaders.
Australia overtakes US as biggest polluter: report
SYDNEY (AFP) – Australians have overtaken Americans as the world's biggest individual producers of carbon dioxide, which is blamed for global warming, a risk consultancy says.British firm Maplecroft placed Australia's per capita output at 20.58 tons a year, some four percent higher than the United States and top of a list of 185 countries.
Warming turns global poor's staple into poison
SYDNEY: Cassava - the staple of 750 million impoverished people in Africa, Asia and Latin America - is turning more toxic with much smaller yields, thanks to global warming and carbon levels.
World must help China shift to clean growth: Stern
BEIJING (Reuters) - China will have to retool its engines of economic growth to help the world avoid increasingly dangerous levels of greenhouse gas emissions in coming decades, a leading expert on the economic impact of climate change said.Nicholas Stern, formerly a British Treasury official and World Bank chief economist, told a meeting in Beijing on Friday that transformation would rest on rich countries leading the way by cutting their own emissions and helping poor nations, including China, now the world's biggest emitter.
Total CEO Expects Higher Crude Prices, Supply Squeeze in 2014
(Bloomberg) -- Total SA Chief Executive Officer Christophe de Margerie said oil will probably rise to more than $145 a barrel on concern supplies may fall short as soon as 2014.“We are running the risk of another oil crisis when demand outstrips supply around 2014 or 2015,” de Margerie told Le Parisien newspaper, according to spokesman Paul Floren. “There won’t be enough oil and gas by the middle of the next decade.”
Crude futures peaked at $147.27 a barrel in New York in July 2008 and tumbled almost 70 percent in the second half of the year as the global recession eroded demand. Prices have since climbed 62 percent.
Oil producers must invest in new capacity to avoid a jump in prices, de Margerie said. The slump in crude futures and tightening credit markets have forced explorers to scale back spending plans and scrap expansion projects.
“It is worrying and we must take this into account now and not wait for 2014,” the CEO said.
Crude Oil May Decline as Fuel Supplies Rise, Survey Shows
(Bloomberg) -- Crude oil futures may fall as fuel stockpiles increase and refineries prepare to idle units for seasonal maintenance.Fourteen of 31 analysts surveyed by Bloomberg News, or 45 percent, said futures will drop through Sept. 18. Ten respondents, or 32 percent, forecast that the market will rise and seven said prices will be little changed. Last week, 50 percent of analysts said oil would fall.
Natural Gas Poised for Biggest Weekly Gain Since May on Economy
(Bloomberg) -- Natural gas futures in New York are poised for their biggest weekly gain since May on speculation a recovery in the U.S. economy is gaining momentum, spurring demand for industrial fuels.Natural gas soared 15 percent yesterday, the biggest one- day gain in almost five years, sparked by Energy Department data that showed a smaller-than-forecast increase in U.S. stockpiles. Confidence among U.S. consumers probably increased in September for the first time in three months as the pace of job losses slowed and the economy showed signs of pulling out of the recession, according to survey of analysts by Bloomberg News.
Commodity Inflows Reach August Record, Barclays Says
(Bloomberg) -- Investments in commodity products advanced to $2.63 billion last month, at least double the amount recorded for any August, with investors favoring Europe over the U.S., Barclays Capital said.Exchange-traded products got $1.74 billion and commodity- linked mutual funds took in $472 million, the bank said in a report late yesterday. The monthly figure includes structured products. European ETPs got more than their U.S. equivalents, the second time that’s ever happened, Barclays said.
Exxon Mobil Says Landowner Protests Won’t Stall PNG LNG Project
(Bloomberg) -- Exxon Mobil Corp., operator of a proposed $12.5 billion liquefied natural gas project in Papua New Guinea, says landowner protests won’t jeopardize a development decision for the venture.“It’s not causing us delays,” Decie Autin, upstream project manager for Exxon in Papua New Guinea, told reporters at the South East Asia Australia Offshore Conference in Darwin today. A final investment decision is on schedule for the end of the year, she said during a presentation.
Oil majors propping up Myanmar regime: rights group
BANGKOK (AFP) – Energy giants Total and Chevron are propping up Myanmar's junta with a gas project that has allowed the regime to stash nearly five billion dollars in Singaporean banks, a rights group said Thursday.France's Total and US-based Chevron have also tried to whitewash alleged rights abuses by Myanmar troops guarding the pipeline, including forced labour and killings, two reports by US-based EarthRights International said.
Norway Election Loss May Spark Arctic Victory for Shell, Exxon
(Bloomberg) -- A defeat for Norway’s Labor-led coalition in next week’s election may pave the way for oil companies such as Royal Dutch Shell Plc, Exxon Mobil Corp. and StatoilHydro ASA to explore more of the country’s Arctic waters.The Labor Party, split between promoting jobs and protecting the environment, is undecided on opening more areas, while its partners oppose new drilling. The coalition trails in polls, suggesting the next government may be a more exploration- friendly, center-right group or a Labor minority administration.
Norway Aug oil output falls to 1.91 mln bpd
OSLO (Reuters) - Norway's oil production fell to a preliminary 1.91 million barrels per day on average in August from 2.07 million in July, the Norwegian Petroleum Directorate said on Friday.
China’s August Power Generation Rises to a Record
(Bloomberg) -- China’s power generation rose to a record in August after the domestic economic recovery spurred demand from businesses and factories.Power output increased for a third month, gaining 9.3 percent to 344.3 million megawatt-hours, the National Bureau of Statistics said in Beijing today. Power generation had climbed 4.8 percent in July and 5 percent in June after contracting for three straight months.
Hugo Chávez deepens petroleum and military ties with Russia
Moscow – Eight visits in eight years. Venezuelan leader Hugo Chávez has been here so often that the Moscow media calls him "Russia's comrade-in-arms-and-oil," a phrase that neatly summarizes the growing politicization of a relationship whose profitable core is trade in weapons and energy.
Hugo Chavez wraps up 9-country tour in Spain
MADRID – Venezuelan President Hugo Chavez will focus on energy and oil agreements during a visit Friday to Madrid, the last stop of a nine-country tour.Chavez will hold brief talks with Prime Minister Jose Luis Rodriguez Zapatero and King Juan Carlos during his half-day stopover.
"We come here to continue working with the Spanish government, to revise agreements, energy, oil and cultural projects," Chavez said in comments broadcast by Venezuelan state television.
Australia in $60 bln Japan, S.Korea gas deals
CANBERRA (AFP) – Australia on Thursday announced liquefied natural gas (LNG) deals worth up to 60 billion US dollars with Japan and South Korea, raising its status as a major energy supplier.Prime Minister Kevin Rudd said Chevron Australia would supply three firms from the planned Gorgon field off the country's west, just weeks after joint venture partner ExxonMobil's record 41 billion US dollar deal with PetroChina.
Mexico’s rapid decline in oil production is proving peak oil proponents right
The proponents of peak oil—the theory that the world is no longer finding enough new oil from conventional sources to keep up with increases in oil consumption—can rightfully point to Cantarell as confirmation for one part of their theory. Once a field goes into decline, peak oil proponents have argued, the decline in production is shockingly rapid.Cantarell is now Exhibit #1.
UK 'could face blackouts by 2016'
The government's new energy adviser says the UK could face blackouts by 2016 because green energy is not coming on stream fast enough.Ministers have previously denied that the UK is heading for an energy gap.
But David MacKay, who takes up his post at the Department of Energy on 1 October, says that the public keep objecting to energy projects.
This, he says, is creating a huge problem, which could turn out the lights.
How Wishful Thinkers Are Forced To Reconnect With Energy Reality
One day Energy Secretary Ed Milliband sets out his proposed expansion of the U.K.'s wind power-led alternative energy revolution; the next day, Vestas, the U.K.'s largest wind turbine manufacturer, shuts down a big part of its British operations citing "low demand" and public opposition to onshore wind farms.Just bad luck or bad PR? Not quite. Simply another blatant example of the ongoing "disconnect" over energy between those suffering from WTS (Wishful Thinker Syndrome) and the hydrocarbon-fueled present and future energy realities.
Peak Moment Television: The Waking-up Syndrome (video)
Ecopsychologist Sarah Edwards, PhD, explains stages people often go through when facing the implications of climate change and resource depletion. She outlines various aspects of Denial, Anxiety, Awakening, Despair, Powerlessness and eventual Acceptance. Differentiating these from the normal grief process, Sarah emphasizes how we can face inevitable feelings of grief and free our energy for positive, practical action in our personal and community lives. (http://eco-anxiety.blogspot.com)
Q&A: Examining the No-Impact Life
New York City–based writer Colin Beavan was casting around for a new book idea a few years ago - and fretting over the state of the planet - when he had an epiphany. He and his family - wife Michelle and baby daughter Isabella - would live for an entire year while making as little impact on the environment as possible. That meant no motorized transportation, no elevators, no nonlocal food, no caffeine and (eventually) no electricity. TIME talked to Colin and Michelle about the new book and documentary on their green year, No Impact Man, and why pulling the plug on modern life was the best thing that ever happened to their family.
Calif. lawmakers weigh rules on renewable energy
SACRAMENTO, Calif. – Increasing California's use of renewable energy would seem like a relatively simple goal, but it has become one of the hottest legislative debates as lawmakers rush to finish their business for the year.
Car dealers appeal ruling on California emissions
WASHINGTON – Auto dealers and business leaders on Thursday appealed a decision by the Environmental Protection Agency that allowed California to establish the nation's first greenhouse gas standards for cars and trucks, setting the stage for a potential attempt to block the global warming rules.
Mountaintop Coal Mines Face New Scrutiny Under Obama
(Bloomberg) -- President Barack Obama is starting to dismantle Bush-era environmental rules that have let mining companies like Massey Energy Co. dig coal more cheaply by removing mountain tops and dumping the debris in nearby streams.Government agencies are reviewing regulations by former President George W. Bush to ensure they haven’t jeopardized water quality around mines, Michael Shapiro, the Environmental Protection Agency’s deputy administrator, said in an interview.
GM rolls past 1 million miles in fuel cell demo
BUFFALO, N.Y. – General Motors Co. is now 1 million miles into its fuel cell experiment and company officials say having everyday people drive a test fleet of pollution-free cars has convinced them they are on the right track.The automaker on Friday said it passed the 1 million-miles-driven mark in its fuel cell Chevrolet Equinox vehicles, with about 5,000 people rotating in and out of more than 100 cars over the past 25 months.
Regenerative Agriculture: The Transition.
In the face of peak oil and in order to curb carbon emissions, methods of farming that depend less on oil and natural gas, respectively to run machinery and to make synthetic fertilizers, must be sought. Such options are to be found within the framework of regenerative agriculture, but the transition from current industrialised agriculture to these alternative strategies will prove testing.
Can he fix it? Sarkozy's carbon-tax plan derided by environmentalists
A "carbon" tax on transport, homes and factories, intended to make France a "green" model for other large economies, was unveiled yesterday by President Nicolas Sarkozy.But the convoluted proposals, including mechanisms to refund most of the new energy levies through tax breaks and "green cheques", were condemned by critics as half-hearted and a bureaucratic nightmare.
UN climate chief: Big greenhouse gas cuts needed
DALIAN, China – Rich countries must commit to deeper cuts in greenhouse gas emissions if they want China and India to sign onto an accord to curb global warming, the top U.N. climate official said Friday."We need to see that leadership from rich countries," said Yvo de Boer, executive secretary of the U.N. Climate Change Secretariat, at the World Economic Forum. "Without rich country leadership, we will not get developing country engagement."
Climate clean-up not up to developing states only: OPEC
VIENNA (AFP) – Oil-producing and developing countries should not bear the brunt of efforts to clean up the environment, the OPEC crude producers' cartel insisted on Thursday, ahead of a major climate conference in December.Developed countries "cannot shift the responsibility of cleaning the world or cleaning the environment on developing countries," OPEC secretary-general Abdullah El-Badri told a press conference following a late-night meeting of the cartel at its Vienna headquarters.
S.Africa must lead efforts to avert climate change: EU
KLEINMOND, South Africa (AFP) – The EU on Friday urged South Africa to lead emerging powers such as China and India to commit to cutting carbon emissions, as world leaders grapple ambitious targets on global warming.
As Hill Debate on Climate Flounders, EPA Plows Ahead on Emission Rules
The Obama administration is finalizing rules to control industrial greenhouse gas emissions amid growing skepticism about the prospects of Congress passing a comprehensive climate change bill this year.
Effects of Arctic warming seen as widespread
WASHINGTON – Arctic warming is affecting plants, birds, animals and insects as ice melts and the growing season changes, scientists report in a new review of the many impacts climate change is having on the far north.
Greenland's melt mystery unfolds, at glacial pace
The dynamics of the ice sheet on Greenland — and the much larger ones on Antarctica — were not included in sea level rise projections by the U.N. expert panel on climate change in 2007 because the phenomenon was poorly mapped at the time.The picture of what happened in Greenland is just starting to come together, and scientists are still in the dark about how the underlying causes were set in motion, how much was owed to natural variances and how much to man's tinkering with the global climate system.
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9/11 The Falling Man (video 71 minutes) Not yet released in the U.S.
On Sept 12 the Associated Press published a picture of a man falling to his death from the World Trade Center. The reaction to this picture was such that it was never published again (at least in the U.S.). This image, along with pictures of others who had also jumped from the burning towers, have been magically airbrushed from the landscape of our national consciousness. This worthy documentary is an effort to acknowledge that people with no alternative will choose to take their lives. These images are a stark contrast to the heroic images of the rescuers that we chose to focus on.
A million people kill themselves annually worldwide. About one person every 32 seconds. Suicide is a major category of violent death. Not all these people have "no alternative" but to take their own lives, in the sense that it's either that or burn to death, altho many may feel that they have no alternative. Perhaps some are just sick of living. In any case, suicide is a fact of life and is so pervasive that it may as well be considered a human universal.
Darwin's Dog;
I can't even be angry here.. but you're missing the point entirely.
The point of this film and his mentioning it here is not about suicide, but about our unwillingness to confront any horrible reality, either in the present, past or future. These people were not suicidal an hour beforehand, but were immersed in a situation whose horrific truth we have since glossed over with heroic firefighter shots for 8 years, while underneath, I think many of us are still in shock from this turn of events.
The reason to look at it here at TOD, is that we now see another horror unfolding, and the Niceness Police are out there putting Bunting and Doilies on top of everything, proclaiming 'Freedom' and 'Heroism' .. while Rome is packed with tinder and doused with kerosene.
I'm just a bit baffled by your response, because this need to face the stark reality of what seems to be unfolding is surely one of your strengths.
Best,
Bob
As I pointed out in another comment today, lots of people want to live in someone else's life, because their lives might be lacking. There seems to be a basic need to Gloss over the mightmares we wake up from, so as not to continue to feel bad about our lives. When you continue to feel bad, or things get to where suicide is the only escape that scares us as a whole.
Reality is we here@(TOD) tend to understand that our island is running out of trees and people still want to Burn wood everywhere. It is not that we aren't just as scared as the Rosy Bunting crowd, it's just that we aren't fooling ourselves that that direction will help.
Waves at Jokuhl,
Charles.
I was living on Long Island at the time and I remember what happened on this day eight years ago very well.
At an earlier time in my life I was a volunteer firefighter and was even Fire Chief of our small volunteer fire crew for awhile. When I first became a firefighter I had had no training whatsoever and we did some pretty stupid things in our gung-ho zeal to put out fires. Finally, after a couple years, I was sent along with two other members of our crew to a fire academy for two weeks intensive training. We were bombarded with videos of firefighters being killed in a multitude of different ways, the purpose being to teach us not to get killed ourselves by being stupid. It was sobering to realize that some of the things firefighters had done to get themselves killed we had done ourselves and had simply been lucky. The thing that got pounded into our heads was that a firefighter should never do anything that put him- or herself at risk of needing to be rescued by his/her fellow firefighters except when there is a human life at stake. And even then, the risk needed to be evaluated and no one should judge a firefighter harshly if he/she decided to not put him- herself at risk to save another. Not to save property, pets, or a corpse should the firefighter ever place him- herself at risk. Period.
On 9-11-01 firefighters were ordered up those towers and their presence in the stairwells actually impeded the evacuation of the buildings. When the towers collapsed many firefighters died. They are now considered "heros." I couldn't help but feel at the time that the Fire Marshals or whoever it was that ordered those firefighters into the twin towers were stupid and needed to be disciplined for their murderous stupidity. It was a moot point, however, since most of those who issued the orders were also dead.
The take home lesson here, I think, is that when one finds him- or herself "immersed in a situation (of) horrific truth," it is no time to loose one's head and do something stupid. Just as those firefighters should have evacuated the vicinity of the burning buildings and saved those they could on the ground, including themselves, we today who are faced with the "unfolding horror" of resource depletion, mass extinction, ecosystem degradation and impending population collapse, had better not make the situation any worse than it already is by stupidly rushing in with some desperate technocopian "fix" designed to maintain some "greener" version of business as usual.
"What man has loosed upon the sea can not be undone.
Oh what fools we mortals be, each and every one."
-Eliza Gilkyson
That would be the perfect response to the folks who believe they know enough about the Saharan and Australian desert ecosystems that they could just go in and terraform them in a grand geoengineering scheme to mitigate global warming. See current discussion at realclimate.org http://www.realclimate.org/index.php/archives/2009/09/climate-services/#...
Irrigated afforestation of the Sahara and Australian Outback to end global warming
http://www.springerlink.com/content/55436u2122u77525/
FMagyar - That's absolutely right but we are conditioned to believe that someone will step in at the last minute and save us. Last week Kenya Asked for $400 million to save its forest.
They should have asked for military aid to put down an insurgency instead; then they might have had a chance of getting something.
Joe
Rich nations, give us $400 million or the Mau is toast! Holding a forest ecosystem for ransom. Trouble is, the Mau is already so degraded that it's beyond "saving." It is, or rather was, the upper watershed of the streams that provide hydroelectric power for Nairobi. Depleted water flow is already resulting in brownouts in the capital - for those unable to afford gasoline or diesel generators, that is. Except that intermittent current to the Mombasa refinery is resulting in gasoline & diesel shortages. No water for irrigation resulting in famine for the masses is one thing, but when rich whites have to go without air conditioning in the East African heat, now that's entirely another matter. Oh what ramifications the destruction of a forest can have!
DD I can understand your cynicism. The Kenyans themselves might be less concerned with the loss of biodiversity than the economic ramifications of the loss of the Mau.
However the equatorial regions are the most affected by climate change. It's occurring in the present there rather than some future threat. To let them completely collapse their environment and not lift a finger until they become another basket-case seems a little tone-deaf. We keep talking about how important rainforests are to the climate of the planet shouldn't we at least try?
Joe
Kenya's population is exploding. The growth rate jumped from 1.53% in 2000 to 2.76% in 2008. The average Kenyan woman gives birth to five children and the median age of Kenyans is 18 yrs. The birth rate grossly exceeds the annual increase of GDP. Famine looms as aquifers deplete, streams dry up & every scrap of wood is snatched up for fuel. Corruption at every level of government is rife, tourism is in decline as ecosystems are ruined and animals go extinct. The Mau forest ecosystem is already so severely degraded that there's no point in trying to "save" it as there's virtually nothing left to save. So no, we shouldn't even try. The attempt is futile.
Perhaps you are right in saying that it is so severely degraded that it can't be saved and trying might indeed be futile. However I think I would have less of a problem if an organization were to proclaim that they had a plan to recreate a rain forest even an artificial forest like ecosystem in the area where at one time there was a healthy forest.
As opposed to going into a currently existing healthy desert ecosystem and try by extreme means to completely modify that ecosystem into an artificially irrigated green zone thereby destroying the original ecosystem and creating who knows what, seems to me to be many orders of magnitude more dangerous.
Where is family planning for chrissake? Can't we reward people for sterilization and offer abortion on demand?
But I guess that wouldn't jibe with "Christian" values.
Joe
That's a laugh, your talking about the folks who are up in arms about saving the souls of fertilized zygotes. They usually don't give a rodent's rear end about the travails and potential misery of actual living breathing human beings.
Fmaygar,
You do yourself a disservice by either being actually ignorant of the mores and beliefs of the right to life camp or else you are just exhibiting the same bone headed closed mind attitude you accuse others of holding.
If you survey say a thousand right to life advocates selected at random you will not find that the women have six or eight kids each.I have lived among such people all my life and the largest family I can think of has only five kids and more of them among my acquaintances have only one or two than have three.Four kid families are not common.
Believing that life starts at conception is not at all the same thing as being opposed to birth control-the vast majority of evangelicals obviously practice birth control.And in case you are wondering I can tell you from considerable experience that Baptist girls enjoy a roll in the hay as well as any but they do tend to be a little more discreet and more careful about thier pills and diaphragms and so forth-the social price they pay for having a "love child" or known lover is higher than in most other subcultures.
You get laid but not on the first date pretty well sums it up.
My baby sister is a specialist nurse(and adjunct professor) who looks after premature infants-I have spent a lot of time discussing this issue with her and the bottom line seems to be that this is one of those questions that can be answered either way,truthfully,since it is a value judgement as to what a human life actually is.In another decade or so it will probably be possible to routinely save fetuses or babies,take your choice,that are only four months along.Damn few women can look at pictures of a fetus of thier own for very long and listen to it's heartbeat,etc, and then abort without serious emotional repercussions.
Personally I am an eeeeevilotunist (thats mostly why I fly under false colors here) and tend to agree with you that a fertilized egg is not yet a "real human" but that is a VALUE judgement.
If that egg ever morphs into a tiny little monkey with hands and fingers and ears etc and I have reason to believe that half of its genes are mine personally I might consider destroying it murder or at least the next thing to murder.
The reason I get my drawers all in a bunch over this is that you cannot further the cause of reason by calling people names and ridiculing thier beliefs.There are tens of millions of these people and if the name calling and ridicule can be toned down it is entirely possible to build useful bridges between the culture of the evangelicals and the culture of the conservationist/ecologist/democratic volunteer working for a universal health insurance program ,etc.
Now tomorrow there will be a yard sale and bake sale held right down the street from my house where these same people who don't give a rats ass about others are raising money for somebody who is really sick-not a chirch member-and they will collect a lot of twenties from people living on ten bucks an hour.Every week they collect money at church and every quarter they send a significant amount to Africa to support a missionary who teaches not only the Christian faith and philosophy but also basic public health,reading, and arithmetic.
I trust that you and others who don't mind insulting these people will not mind this little lecture.
OFM - I didn't mean to offend with my offhand remark about christian values.
Nevertheless here's my point:
Mexico has a population problem. Africa has a population problem. Asia has a population problem. As a matter of fact the U.S. has a population problem. What is the kool-aid that the conservative right drinks that makes it blind to that obvious fact? I've had Christians tell me without batting an eye that the world has enough room for 10 billion people or more. Mother Theresa when asked about human populations overwhelming the earth replied: "We should worry about caring for the poor. Let god worry about the planet."
A christian believes that it is their biblical right to "subdue the earth". How sad. Personally I don't need some anachronistic tome to teach me right from wrong. BTW I spent 12 years in catholic school having the gifts of the lord beaten into me by the Sadistic Brothers of Perpetual Torture. (The Franciscans)
If I offended any Christians...I want you to forgive me.
Joe
I am a Christian. Your opinion did not offend me, but if it had I would out of hand forgive you. Not all Christians are the same when thinking about the world around them.
I don't think we just pave the place over and make a big parking lot out of it.
Charles.
No I don't mind the lecture, and I am aware that there are many good people who happen to be Christians. Quite a few in my extended family. I happen to contend however, that they would be good people regardless of whatever particular faith they were brought up in, Christian or something else.
As for my snarky cynical remark, it has a lot to do with my personal extensive experience with the hypocritical, irrational, intolerant, holier than thou attitude of many cowards who hide behind the mantle of religion. It's definitely not personal, don't take it that way. However if the shoe fits then by all means wear it.
Personally I have a hard time dealing with people who insist that the mythologies of bronze age goat herders have any relevance to my life, whether or not they are personally good compassionate people.
Research has shown that evangelical teens / conservative protestant teens:
1) have sex for the first time earlier than almost every other groups (e.g. protestant blacks), or: have sex first time at the roughly same time as others (16 - and what is a few months here or there?)
2) use contraception and abortion less (duh)
3) so have more unwanted pregnancies / more babies
just one general short link:
http://atheism.about.com/b/2008/10/30/evangelical-teens-earlier-sex-earl...
However, the whole issue is certainly somewhat more complicated than this first blush. A confounding factor is socio-economic level (generally, in the West, the lower the level the more teen pregnancies to term). Some studies have shown or hint at the more important role of a support group of adults, and that this varies in different communities. Abstinence pledges delay first time sex; evangelicals tend to have less partners, etc.
Note that the US is the no. 1 country in the ‘developed’ world re. no. of live births for girls under 20, and by far:
http://www.nationmaster.com/graph/hea_tee_pre_percap-health-teenage-preg...
(note: these numbers are old and all have sunk since.) Still, that is the most interesting point.
My own simplistic thinking is that teens will be teens and in a rather homogenous (re. dating and consuming) culture like the US it matters little if they are prayer freaks, choir boys, atheist geeks, buddhists, etc. and that it is teaching and acceptance, availability, of contraception (particularly the condom) that are key.
Telling teens that condoms don’t always work or don’t protect from disease is dishonest, as is stressing the dire trauma of abortion, the dangerous effects of the pill, etc. (See adult support group.)
Anecdote (Switzerland.) A 5th grade class is offered a new activity - working with copper. The teach asks, what could we make, hey lets have some suggestions?
Smart guy, giggling, A Penis!
His rival: Nah, a condom, the super dooperest safest ever!
Class dissolves into wild laughter, general hysteria, some of it nervous. Poor teach found himself slotted right after sex-ed.
See this for the US - Switz. contrast (I’d actually be quite suspicious of the numbers themselves)
http://www.nationmaster.com/graph/hea_tee_pre_sha-health-teenage-pregnan...
You want to get a kid to do something?
Just tell him/her not to do it because it is bad.
I agree that to discuss this truthfully out in the open is the best way to go for all the reasons that are obvious.
Yea, and those Christian missionaries will NOT teach a syllable about birth control and family planning.
Ask the Pope what his edicts are on birth control.
Sending some collection plate money 'over there' and sending a few folks to talk about foot-powered water irrigation pumps in between gospel lessons is like pissing in the wind...a drop in the bucket, and the root cause doesn't get addressed, not one iota.
But a lot of folks, in your experience the group of which only about 30-40% (my guess) have 'only 3 or four kids' and the rest have 2 or less, will go to bed at night feeling really good about all the good works they have done.
We have got about a thousand bigger things to worry about and try to fix besides trying to outlaw abortions...but that subject takes up a HUGE amount of the Republicans' time.
LOOK! Over here! Not over there...or there...or there...
As a fairly broad-minded and pro-life Christian who also has adopted kids I take extreme exception to your comments. You are completely off the mark to say that pro-life people don't care about all human beings, and unlike many, those I know are willing to put their money and effort where their mouth is.
To Everybody has responded:
I have a very hard time myself dealing with the shortcomings of Christianity and I recognize the truth of all your comments.You should hear what I say about them in private sometimes!
But most of them are not really that serious (I'm serious)any more and reality dictates that thier views be taken into account.They GET serious when they are attacked.
Again I state my main point-you cannot change people except for the worse by ridiculing them and calling them names.
We are a scientifically literate group.Nobody here will tolerate talk about superstitious blacks(percentage wise a LOT OF christian fundamentalist there) or baby eating Jews or that sort of crap .We don't hold ignorance against other groups and make fun of them.
From the scientific pov the evangelical christian is a highly successful subculture.They are doing exactly what everybody else is doing-listening to such leaders as they have faith in,and that has worked out just fine for them.Such values as we have in terms of brotherhood ,fair play,etc are largely rooted in the christian ethics system.
The use of a little common sense and ordinary courtesy in this matter would go a long way toward creating a better society.
But if you are determined to keep as many right wing republicans as posssible in office I cannot think of an easier or cheaper way to work towards that goal than to drive these people into thier camp wholesale with gratitious insults .They can read.They have internet.They have radios.Believe it or not.
Joe, you should know from my past posts that I hate cynicism. Damn do I hate cynicism. However in this case DD is not being cynical at all he is being totally realistic. He is calling it like it is, delivering the bloody truth whether you like it or not. That is NOT cynicism.
That being said I must add my two cents worth. Some guys talk about doing this or that to save this or that. Totally fu**ing useless. You might as well try to save the Haitian rain forest after it has already been destroyed. You are battling human nature, the human instinct for survival. People will do what they need to do to survive. If that includes killing the last chimp for food or cutting down the last tree that is what they will do. People living on the verge of starvation don't really give a damn about your efforts to save this patch of forest or this animal from starvation.
Ron P.
"Damn do I hate cynicism"
If you had added hypocrisy I would be in COMPLETE agreement with you.
Well said Sir!
Drip irrigated hybrid poplar plantations on the Colorado Plateau are bad enuf..
Same thing goes for grandiose 'geoengineering' proposals such as fertilizing the Southern Ocean with Fe to promote C sequestration as algal biomass, or polluting the stratosphere w/ SO2 aerosols to increase albedo. Even the less grandiose proposals - everything from electric trains powered by Th reactors to building bridges out of plasticized wood - one sees in here had better be carefully evaluated for unintended consequences before some overly enthusiastic fool actually tries to get rich quick by implementing them.
Not sure we need to go to Irrigation to reforest these two areas.
Considerable areas of what is now part of the Sahara dessert where once wooded plain (in the north) and savannah (in the south).
In Australia there are still 500mm (20") dry rainforests. There is some suggestion that dry rainforests could have existed on considerable less rainfall. One theory is that the extinction of megafauna lead to increased fuel loads (particularly in northern Australia). This increased the size, intensity & frequency of fire events. In turn changing vegetation mixes to favour Eucalypt and other combustion loving species at the cost of the combustion sensitive. In hidden valleys and canyons the remnants of these old forests were protected by their geography. Some think the pre megafauna extinction forests of Australia could have been a third palms, a third conifers and a third other species (that included but was not dominated by Eucalypts).
I'm sure that the use of high labour, low tech, low fossil fuel methods could restore these areas to something at least approximating their old coverage (and carbon loads).
Obama's medical insurance reform bill is such a "fix" transferring the burden from the individual to society and, by desperately trying to maintain longevity, exasperating a population collapse.
Your comment is exasperating. A general lack of knowledge exacerbates the dialog on medical insurance reform.
Didn't anyone under sixty ever learn to spell or use a dictionary?
If overpopulation and resource depletion cause population collapse through insufficient food, pollution or disease,, which version of society would fair better:
A. a society that places the cost burden of health care on the individual thereby eliminating individuals who can not pay; or
B. a society that distributes the cost burden of health care to all thereby diverting resources to save everyone equally?
I think the social system would drain society's resources desperately trying to do the impossible: keep everyone alive. Thus, population collapse would be more brutal.
Let me re-phrase that for you.
If a population faces collapse due to resource exhaustion, disease, or pollution, which society would fare better:
A) A society in which healthcare goes to those who can pay the most - the old rich, or their children; or
B) A society in which healthcare goes to those who can contribute most to the rebuilding of the society - the young, who are nearly all poorer than the old?
Do you recall the catch-cry used in times of emergency, "women and children first"? It seems to have been forgotten, as does the reason for it.
That said, the grey power / baby boomer political lobby is now powerful enough that I completely agree with your conclusion.
(Disclosure: I am neither a woman nor a child. I am acquainted with some of each, though.)
Gallantry sacrifices the able-bodied in favor of those who are dependent. It works when there is a surplus of resources to compensate for the loss which would not be the case during population collapse. Obama's health insurance reform, far from forgetting, is in the spirit of woman and children first.
In a severely deflated Keynesian economy I am doubtful the young would be poorer than the old because the old would have difficulty storing wealth as we currently know it.
Health care predominately goes to children and the elderly, not to the able-bodied. The young (able-bodied adults) who could contribute the most to survival and rebuilding would generally not need health care. Socialized health insurance takes the wealth from everyone, except the poor, equally and redistributes the health care to the sick (children and elderly) while concentrating wealth for the insurance agents.
Targeting health care to the sick and injured who would likely recover to become the able-bodied would minimize the burden and maximize the return. Option B would likely fair better than option A which would fair better than socialized uniform health care.
I don't like replying this late, but I had to take exception to this:
It is, as the linked article illustrates in fine measure, a natural reaction to resource constraints. Insufficient resources? Save the future.
I may be OT here. - The link to the vid does not work for me. Slap in yr face 404.
The meme of the falling man from the WTC has been used in several lame artistic projects, none of them well-known or gone mainstream.
To my surprise, the ‘new’, to us in Europe, very popular TV series, *Mad Men*, see wiki which is about advertising in the 60s, uses it in its introduction.
You Tube and others cut the intro, it is quite impressive, a man falls, or rather jumps, from the towers, spins, etc.
see here, from In media res
So the falling man becomes a useful, amorphous, blanket symbol for perdition - no other word will do as the forces in play are not detailed. The falling man becomes a lame cultural meme to signify risk, loss, annihilation. Not unexpected, and the juxtaposition of Ad Agency and images of past disasters is quite telling. The relation to energy can only be made, as all will understand, indirectly.
Refusing to examine what is really happening can serve, or cost, depending on the interests of different parties.
Yes, but given the alternative between experiencing the pain of slowly burning to death as opposed to the rather quicker and probably less painful option of jumping to my death from a very high place, I think I would choose the later.
I'm assuming that I know for a fact that there is absolutely no chance of being saved. This is quite different from committing suicide for reasons of clinical depression or choice due to known terminal disease. I think it's comparing apples to oranges.
To be honest I'm not even sure that I'd really consider jumping to avoid burning as a form of suicide even though the end result is death. The motivation is really the avoidance of extreme pain.
The appears not to work, Joe Michaels.
try this one.
joemichaels,
I get a 404 error.
I guess it's still not released in the U.S., even over the InterTubes!
look above your post
Re: UK 'could face blackouts by 2016'
Some may remember Prof. David MacKay and his book "Sustainable Energy- Without the Hot Air"
Time will tell if the dept that had Malcolm Wicks as a politician in residence will take a blind bit of notice, but its positive move at the moment.
Someone in government that can speak sense; something of a miracle.
I totally agree. Prof. MacKay's book - which he made freely available on line - is a thoroughly scientific look at our energy situation. He does not come at the issue with any baggage or loyalties. He says it as it is.
The current government have left it too late to use his advice. I only hope that David Cameron's energy secretary will hire him as well.
Too late?
What I took away from MacKay's book is that renewables cannot meet the UK energy need. 30-40% maybe but all? - no chance. Unless we reduce power demand by 2/3rds.
Granted their timing is bad - when discussing the 'energy gap' but are you inferring that renewables are really the answer for the UK?
Juxtapose that with the "How Wishful Thinkers Are Forced To Reconnect With Energy Reality" article up top.
So what's it going to be? Reality? Or, may I suggest magical thinking to support BAU with a sprinkling of pixie dust...
Partly why I referenced Malcolm Wicks. He was always anti peak oil and significant change in energy generation and got kicked out last year so maybe there has been a shift in the dept's policy/outlook.
Saying that, Wicks has now got an "appointment to the Privy Council and ... the Prime Minister's special representative on international energy issues" so its not right to get hopes up.
Don't worry about it. He won't be in the job for more than 9 months max. Can't see Cameron wanting to keep him around.
The UK energy problems won't be solved by any government - the energy business is not nationalised, any solution will be provided by private investment.
Negative thoughts about an imminent lack of sustainable energy are not tolerated even by opposition MPs, my MP has 'faith' that a technological solution will be found.
Any admission that growth is over means we can't pay back existing debt with interest let alone new debt, and the whole place runs on lots of debt. A world without debt sure isn't BAU!
Build a cable to Norway ASAP, we got a healthy investment climate in our electricity trading area.
If I remember correctly in freshman econ they teach that there is such a thing as a demand curve that essentially says that under any given set if conditions there will be so much of any given commodity bought at any given price and that as the price increases the quantity purchased falls,the natural consequence of buyers either economizing and using the commodity more sparingly or efficiently or substituting something else.
The supply curve essentially says that as prices increase there will be more product brought to market,unless politics or physical limits interfere.The intersection point of the two curves dictates both supply and price and technically speaking supply and demand cannot be mismatched-even though many business/journalist types ignore the proper terminology and talk about demand exceeding supply etc.
Assuming these basic concepts haven't been redefined or overturned since the dark ages when I learned them,my question is this:
How could it make any possible large difference over any extended period of time whether there are speculators and traders in the oil market?Perhaps they are able to capture a portion of the revenues that would otherwise have gone to the producers but if they were absent then producers would simply get ALL the money at any given level of production and price rather than MOST of it.
A second question arises from the first.Doctors are known to own and operate VERY profitable medical liability insurance companies,effectively moving some of thier earnings from one pocket to another, presumably mostly for tax /investment purposes.They are also known to invest in big pharma and in pharmacies too.
Oil companies might be doing something similar BEYOND the point of processing and distributing.
Does anybody have any idea how much speculating in oil is the result of the producers themselves speculating?It looks as if they are very favorably situated to engage in such activites as many of them are flush and lots of them-all the bigger ones at least- must have excellent inside info.
It seems to me that the ONLY reasonable explaination for oil prices hanging at sixty five or seventy bucks is that there is nobody in the world capable of profitably producing enough at a lower price to drive the price down,a couple of Opec countries possibly excepted.QED the stuff you hear about oil being overpriced on the fundamentals is just more bau smokescreen.
Some body set me straight if I have made a fool of myself.
Demand for oil is to a certain degree inelastic.
Maybe the oil producers, realizing that there is only so much left, don't want to give it away any cheaper than they have to and are probing the ultimate inelasticity. It looks like they may have found the price area where it is not too hot and not too cold.
As far as speculators and insiders etc.
The Casino markets have become a game all their own and in the short term game playing trumps fundamentals but long term fundamentals always assert themselves. Short term meaning months long measured in years.
I don't know jack about oil specifically just markets in general from experience. Maybe I am missing something unique to the oil markets........I don't know.
porge -
I would concede the point that over the long term speculators do not and cannot greatly influence the price of oil. But that's not really what they're trying to. They want to be able to influence the price long enough so that they can, one way or the other, reap a short-term profit. Sometimes it works, and sometimes it doesn't. There is also a big distinction between speculation and manipulation: the former is usually legal, but the latter is often illegal or of dubious legality.
Plus, another thing to keep in mind, is that prices for commodities can be manipulated in many ways other than merely playing the futures market. I don't recall the author, but a number of months back there was a very interesting article on TOD on the subject of commodity price manipulation. If I recall correctly, the example explored by the author in quite some detail was the scandle in Japan a number of years ago over the conspiracy by a number of parties to control the copper (?) market.
The methods used were quite sophisticated and involved a lot more than just buying and hoarding copper. A lot had to do with controlling the perception of surplus and shortages rather than actually physically creating such. It took years before the authorities and the trading public really found out what was taking place and the perps brought to justice. This was made possible through the collusion of high-ranking people in both the Japanese copper industry and the commodities markets.
Though I am not sufficiently knowledgeable about the oil business or the oil markets to make any accusations, it would appear to me that if it can be done in one commodity market, it could very likely be done in another. It is of course illegal, but since when does that stop crooked people from doing crooked things?
Illegal.
Who's watching the watchmen?
The Bunker-Hunts tried to corner the silver market and had quite an impact on the price, so like you say it can be done.
I was also reading something the other day about Goldman and oil. The basics where that Goldman was ramping oil (the $200 forecast, etc.) for the purpose of selling hedging derivatives of which Chinese companies were suckered into buying as protection from escalating oil prices. Seemingly the whole business was so scurrilous that the Chinese Government has intervened saying its ok for the companies to default on the derivatives. Basically saying its ok to default on a scam and the government will back them up.
And, to a certain degree it is very elastic.
US Demand first five months of 2008 verses first five months of 2009 from the EIA in KB/D. EIA Petroleum (Oil) Demand
2008 2009 Pct Ch. Jan. 20,247 19,125 -5.87% Feb. 20,029 18,706 -7.07% Mar. 19,831 18,672 -6.21% Apr. 19,815 18,471 -7.28% May. 19,798 18,176 -8.92%OECD demand, same period.
2008 2009 Pct Ch. Jan. 49,393 46,599 -6.00% Feb. 49,879 46,600 -7.04% Mar. 47,696 45,909 -3.89% Apr. 48,379 44,735 -8.15% May. 46,946 43,354 -8.28%US consumption down almost 9 percent in one year? That is over twice as much as oil production fell world wide. Non OECD consumption was obviously up during this period. Here is world C+C production for this same period in KB/D.
2008 2009 Pct Ch. Jan. 73,894 71,621 -3.17% Feb. 74,079 71,804 -3.17% Mar. 74,252 71,825 -3.38% Apr. 73,660 71,999 -2.31% May. 73,980 71,332 -3.71%I would say oil consumption is very elastic. Nothing drives down consumption like a good recession.
However I would agree with you that speculators do not and cannot influence the price of oil. Specualtor are both long and short at the same time. Not the same speculators of course. There are literally thousands of them. They do not consult each other when making trades. Therefore any influence they have on the price of oil is purely by chance. One day there might be more going long than short and then on another day they go the opposite direction.
Does anyone actually believe that speculators consult the thousands of other speculators and conspire to drive the price up or down? I would seriously doubt that.
Remember, the futures market is a zero sum game. There are always just as many losers as winners. Speculators are always trying to outsmart each other.
Ron P.
Yes, one of the things we have learned just over the past year is that demand for oil is not nearly as inelastic as has been previously assumed.
Does anyone believe that it is necessary for there to be explicit consultation?
You imply that since in no case does any customer ever provide the money which speculators take in, then the customer isalways left unharmed and never paying any more than s/he would have without speculation. So why was it that the price of retail gasoline at the pumps tracked the speculative price rise precisely? Would the $Cdn price per litre gasoline have gone from $0.85 to $1.35 back to $0.95 in a single year based purely on fundamentals? Do you contend that that extra $0.40 / litre paid by every consumer for six months was a completely harmless event?
That was manipulation through use of the speculator market. The future price of WTI / Brent should never have gone beyond $120 tops, (or in fact the $75 we're seeing as factual today) and the fact that there aren't a lot of heads rolling simply indicates the power and size of the manipulators.
Well said. When the market is as tight as a drum, every speculator in the game figures it out quickly, without colluding, and finds it much easier to drive the price. See also: Enron electricity traders in California, circa 2000.
This is a point I find challenging to explain to those who say 'we had no oil scarcity in 2008; the price rise is attributable to speculation.' Speculation amplifies the price swings when underlying fundamentals are tight.
The speculators advantage is not having to take a position but the hedgers have no choice.
Speculators definitely add cost to the commodity by taking more winners than losers out of the market.
One could argue that the speculator provides liquidity and hence a ready insurance policy for the hedgers but that has become an expensive premium for the hedgers to pay and of course the end users take it in the shorts as usual.
For sure many speculators have short careers but the ones that make it through the learning period are generally very good at what they do.
Re whether speculation drove the oil prices up last year, I was wondering if someone can clarify this issue for me: Before July 08 the OPEC and non OPEC producers were producing all the oil they could. Where was all this oil going? Was it being stored in super tankers? Or, was it being used? If it was being stored, why we didn’t hear about it—ala Jan. 09? If it was being used, then it proves that the price of $145+ p/b was supply & demand driven. Thus once the demand returns—after this recession is over— the price will return back where it was and possibly exceed it. Unless, of coarse, peak oil deniers claim that producers have now increased their production capacity beyond 2008—which is doubtful. Brian
weren't the chineese stocking up on diesel and crude oil to refine into diesel to avoid any embarrasing black outs during the olympics? that is the explaination i have heard.
I heard that, too. That, and the continuing (at the time) decline of the US dollar, and some nervousness about production due to hurricanes, MEND guerillas, and so on.
Oh, and large trading banks "hedging" against the decline of the dollar by buying commodity futures.
Give the Chinese their due: they're fast learners. Instead of just trying to buy more and more oil, they're now buying oil fields (and supply guarantees). Let's see the banks manipulate the futures in the oil fields market!
That is a step closer to resource wars.
If they actually own oil fields they will no doubt try to station military near by and the rest will follow.
This progression is following a typical script it seems.
gregvp and Porge,
It doesn't seem accurate to say that Chinese are fast learners because they are buying oil fields directly. The Japanese actually came up with this concept in the 1980s and failed. In all likelihood, the same will happen to the Chinese. They may think they have locked resource prices down, but the owners of those resources will think differently, like they did with Western and Japanese "owners". China is not going to be able to station troops in Nigeria, say, to stop Nigerians from selling to the highest bidder. Not only would it be against all international laws, but they would have to enforce colonial rule all over the world.
Yes. It is following a script. Western oil cos tried to enforce their claims on other nation's resources and failed. Japan tried and failed. China will try and fail.
That meant there were plenty of people still willing to buy at $140+, and few willing to sell for much less. A price can't go higher than buyers will support, and there were plenty of us willing to do so besides speculators.
Until we couldn't, that is, and then the price collapsed.
Buyers have as much power to drive down prices as suppliers and speculators do to drive it up -- it just take willpower and effort for the buyers rather than simply money for the speculators.
My personal fleet mileage is well over 30mpg now, whereas 3 years ago it was below 20. We CAN make individual decisions that affect the macro scale.
Yes there is a lot of room to improve efficiency when it comes to oil use but as habits change and inefficiency gets wrung out then the demand for oil will be very firm but of course lower.
You went from 20 to 30 probably pretty easily but 30 - 40?
By the way, good job.
I second the good job sentiment by Porge. Walking, bicycling, batt-bike, golf cart, and/or a small ICE MC/Scooter/trike/street-legal quadATV can easily jack your avg. fleet MPG much higher.
I did not say that and neither did I imply that. Short term swings in the market may indeed be because of a "herd mentality" of a lot of speculators. When some technical signal gives a "buy" a lot of speculators jump in and buy, causing a short surge in futures prices, but not necessarly spot prices. But it usually takes only a day or so for prices to swing back to where supply and demand takes it. Daily short term swings in the futures market are usually caused by speculators reading news or hearing rumors. Long term swings are always caused by the fundamentals.
There is absolutely no intentional price manipulation by speculators. They do cause short term swings in the price of oil however. But these swings are just as often down as up. In the end it is a zero sum game. It is absolute nonsense to claim that speculators HARM consumers when speculator activity drives prices down just as often as it drives prices up. And remember, it is always a short term effect so we are only talking about pennies if their activity moves spot prices at all.
Absolutely yes! Before the recession set in there was a hard demand for gasoline. That drove prices up. That effect was fundamental. Then the recession killed demand and drove prices back down. These things are caused fundamentals and have nothing to do with speculators.
Remember oil futures speculators are no different than any other kind of speculator. They watch the news, they watch OPEC, they watch their charts, they watch the economy and they all try to GUESS which way the market is heading. On average half of them get it right and the other half get it wrong. And they trade on news and rumors always trying to outsmart the other traders.
Ron P.
Depending on what you mean as a zero sum game I agree and disagree.
Each contract is a zero sum game but the cost of the commodity generally is higher to the end user because of the hedgers paying "extra" for the security they get by selling or buying forward.
Think of a farmer...........if he had to put up a bunch of capital to grow crops that he didn't know would be worth enough to pay back the outlay would he risk it?
But paying a little extra up front knowing what you can sell for takes all the risk out.
The futures market is always a zero sum game, minus commissions of course. Commissions make it a slightly negative sum game.
This is simply wrong. Hedgers are not paying extra they are just hedging. This helps as often as it hurts the consumer. A gas company hedge and buy gas futures figuring gas would go higher. This would enable him to keep prices to his customers low if prices go up but it will also insure that the customers do not get a break if the price falls. He hedges to guarantee a level price to his customers.
Again, the futures market is a zero sum game. That is, for every dollar gained in the futures market there is a dollar lost. Speculators and hedgers lose just as often as they win. When hedgers win then his customers win. But when hedgers lose then his customers lose. He is just trying to be frugal and make sure his customers have a fair price. He is not gambling like the speculators are. And hedging does not cost him anything "extra" other than the commissions he pays and big hedgers pay almost no commissions.
And by hedgers here I am talking about true hedgers, not the so called "Hedge Funds" which are not hedgers at all but are speculators in the purest sense of the word.
Ron P.
You explain things well.
You assume that the "winners" are passed on to the customer. That is not my experience.
I specifically remember a certain computer company back in 1993 that had huge earnings and once the earnings statement was dissected it was determined that they actually made a killing hedging currency to buy components in other markets.
Since they earned on the futures contracts and had killer earrings overall it can be assumed that they did not sell the computers for less because their components cost less.
But I guess what you are saying is that in other quarters the earnings were probably diluted by losing on their futures bets. Hmmm.
I might be thinking this too much.
It might be differrent in the markets you are familiar with but price gouging in the spot market seems to be very common even in gasoline.
I mean the inventory that was in the station tanks was purchased for much less than the futures prices but the prices at the pump were raised immediately and not based on the cost of the inventory.
I do see your logic but I just don't think that the businesses are that nice to us that's all.
Edit: It should be noted that the computer companies sales were actually down.
I don't think you understand the term "hedge". Hedgers, on the energy buying side, are usually utilities or sellers of such things as propane gas to users. They hedge to guarantee an affordable price to their customers. Hedgers on the sell side are usually the producers of the product, whatever it is, that guarantees them a fair price. It guarantees a profit so they can stay in business another year but robs them of any windfall profits should the price of their product go up.
A large cotton farmer will often sell his crop in the spring, sometimes before it is planted. This guarantees him a fair price for his cotton should the bottom fall out of cotton prices. But on the other hand he loses any windfall profit should cotton prices go through the roof. Though he sells his cotton in the Fall, he gets the price he agreed upon in the Spring. He has hedged against catastrophic losses and has guaranteed himself a fair profit. That is why they call it "hedging".
That is what hedging is. A computer company trading currency futures, or speculating in the FOREX market, would not be hedging unless he has agreed to sell his computers, or parts, to a foreign country at a given price in a foreign currency. He could then hedge that currency just in case that currency fell against the dollar. He would still have his guaranteed price. But he would lose any windfall profit if that foreign currency rose against the dollar.
That is the definition of hedging. A computer company, taking company money and playing the FOREX trade would simply be gambling with company funds. If that were a public company, like Dell, then the trader could go to jail because that would be illegal.
Speculating in currencies is not hedging. It is speculating pure and simple. Computers are sold on the open market for what the market will bear and have absolutely nothing to do with whether or not the manufacturer made a killing in the futures market.
Please understand this. Killings cannot be made by hedging. Hedging only guarantees a fair price but also prevents any windfall profits. Killings are made by speculators. You said "they actually made a killing hedging currency". They may have made a killing speculating in currencies but they were not hedging.
The very reason anyone hedges is to reduce risk! But when they reduce the risk of huge losses they also guarantee that there can never be any huge profits, only fair profits. Hedging guarantees a fair profit but no more. There are never any "winnings" in hedging. You have a product to sell or a product to buy so to guarantee that you can sell or buy your product at a fair price when you need it you hedge by either selling it or buying futures for that product months before delivery.
Hedge, definition: To buy or sell YOUR product at a set price NOW for FUTURE dilevery.
Ron P.
You are correct. I didn't quite get the concept. It is locking in basically. So I guess that computer company had some splainin to do.
Like I said before, you explain things well.
The speculators are dealing in a paper market, and although for them it is a zero sum game, just like in any other market (like stocks and shares) an excess of buyers to sellers of contracts forces up the price to balance supply and demand.
Unfortunately some people, hedgers, are actually taking physical delivery with the same pieces of paper so they can end up paying more for their product because of the speculators paper games.
The futures market price is balancing supply and demand of contracts not physical oil hence the speculators can slow down the non-discretionary parts of our economy by overpricing the oil.
The futures market (like the stock market) with it's trading periods is deliberately set up to allow gambling as well as legitimate hedging. Separate physical markets and gambling markets would eliminate any suspicion of market manipulation, so why isn't it arranged that way? I suspect that many of the speculators and market makers are the large financial institutions corruptly influencing the Government and making their billions from the average Joe.
There is no longer such a thing as a free market, anybody who thinks otherwise is the sucker the traders are looking for!
Yes, prices are set on the margin, so only those speculators on the margin need to be privy to what's going on, the majority don't count and are usually left wondering what happened. Speculators are trend followers and will follow the trend set at the margin providing they have confidence in it, this is when optimism acts as an accelerant or insider knowledge.
Like propaganda, market manipulation can only work with the tacit agreement of those being manipulated (ie. people must know what the game is to be able to be part of it).
Thanks for the data and I see your reasoning on oil demand being elastic.
As far as speculators...........they don't directly conspire but many use the same methods and act as a crowd.
At some level the large producers and consumers of the commodity have to hedge forward in the futures market and that is what the speculator tries to key in on.
Manipulation.now that is another aspect that I think has gotten worse.
I love this website. I always learn a ton just throwing out thoughts.
Thanks Darwinian and everyone else that shares their knowledge.
I beg to differ.
Taking a look at the big enough picture, you can see oil cunsumption being down less than 3% worldwide, with then change in GDP of the world at the same time being twice as much (from a cca. 5% positive last July yoy to less than 0% this year).
Oil usage is largely inelastic in the world. There are some places, like the US where there can be major cutbacks due to consumers being more frugal, but there are lots of other places where it simply is not true.
As far as there is oil out there in the market, someone is going to buy it and use it -- whatever the price may be. There are temporary gluts only. Having been and being in this big a recession surely does not help consumption in consuming (OECD) nations, but even the circumstances of the economy in this past year have caused but a dent in the consumption of China and India.
Some consumption is elastic, sure. The US consumption is more elastic than, say, the German. Let alone the Chinese. The next time consumption again becomes elastic is when a nation (or rather: a set of individuals and groups) get priced out of the market totally.
On another note: do you remember our dispute over potential C&C production this year, Ron? I told you I see it at 71 mbpd after the first signs of OPEC cutbacks have been reported, and you were telling me (and others) no way it is going to be less than 73.
I beg to differ.
In 1979 world oil production, and of course consumption, was 62.674 mb/d. By 1983, just four years later, consumption had dropped to 53.275 mb/d, a drop of 17.45 percent. That is how elastic world oil consumption is.
World oil consumption cannot exceed world oil production. Well, not for very long anyway. Talking about the inelasticity of world oil consumption is nonsense. It is exactly as elastic as world oil production. If world oil production dropped 50 percent then world oil consumption would drop 50 percent.
To tell you the truth Eastender, I don't remember that at all. Could you post the URL, I would like to see exactly what I said myself. I am not denying it because my memory is not too good lately but that just doesn't sound like anything I would say.
Ron P.
Sure. The thing I wanted to say, but couldn't get accross (perhaps due to my inability) is this: As long as there is prroduction of x mbpd, there will be consumption of roughly x mbpd, no matter the price. We tend to consume it all, unless there is a recession like now. But even now, we consume it all, the glut seems to have been temporary to me. And really, oil isn't cheap at all. As far as elasticity is concerned, let's see the numbers.
Price drop of 50%
Consumption drop of 2.5%
Elasticity = 0.05
Pretty inelastic if you ask me, although it normally is a negative number and now -- temporarily, I believe -- a positive. There was and is a lack of credit in the OECD and that caused almost the whole drop.
Your memory is just fine, Ron. My mistake, I had it backwards. Here is the link but you were right. I somehow remembered you said 73 when in fact you said 72 (and I said 71). Here is the link if you wanna take a closer look, but -- as I said -- I was wrong and you were right.
http://www.theoildrum.com/node/4748/432196
and
http://www.theoildrum.com/node/4748#comment-432217
Thanks for the link eastender. Damn I'm good arent I! :-) I knew I predicted that non OPEC would be down only slightly. Now it looks like it may be up only slightly. A little more production out of the US than I expected. But non OPEC is declining and nothing will stop that.
But I nailed world production. Glad I got that one right anyway.
Take care,
Ron P.
"It seems to me that the ONLY reasonable explaination for oil prices hanging at sixty five or seventy bucks is that there is nobody in the world capable of profitably producing enough at a lower price to drive the price down,"
The key word is "enough", since there are plenty of old conventional wells out here that can produce at $20, but of course can't supply the entire demand. Oil is therefore priced at the cost of lifting the last barrel needed to satisfy demand, which will keep it much higher.
On the rare occasions when I find someone who actually wants to hear me out on Peak Oil, this is one of the more difficult points to explain, the idea that oil prices are based on the marginal rates, not the average or cheapest rates. Some people argue with me that oil went down to $30 during the Panic of 2008, and therefore should be sold at that price, but I remind them that everything went down last autumn. That's why they're called panics. But unlike other things (except bullion), oil recovered in price because we still need it no matter what.
Yup, I can't think of any other market that sets the price so much at the margin except leveraged Real Estate.
Also, the global nature and arbitrage of the oil markets sees to it that there isn't much regional difference even though there probably should be based on the big differences in the costs from region to region.
Unless I am wrong thinking this way?
Lower dollar values raises stocks, gold, and oil prices without really answering the question.
I think it means that the inelasticity point is currect, and any substitution is very slow to happen. In the short term this gives boom and bust cycles, as we see in natty markets, while longer term it creates economic havoc and a slow push for alternative energy sources.
The problem we face, as I have said since long before I was peak-oil aware, is keeping the base cost of energy low. The only real way to do that today is to reduce usage. That's quick, but not easy.
Dale,
Yes,the marginal barrell has to be the key to the price over any extended period.I understand hedging very well and Darwinian has done a fine job of explaining it.
Marginal prices and hedges are day to day realities in farm country.
I can't see that anybody has refuted my argument that over any extended period of time the price of oil is set by the fundamentals,so long as there is still some competition among sellers.
If I own a well that can produce at twenty and I can sell at seventy I have a very strong profit incentive to pump for all shes worth-but if I am flush I might hold back-my personal one well oil company could not influence the market price but I could still believe that later on I can get an even higher price that will more than make up for the loss of money I can earn by selling oil now and investing the sales proceeds.
I do not doubt that there are such animals as panics, bulls, and bears and that oil prices can rise and fall above and below the price determined by the fundamentals for maybe a few weeks or possibly a few months and or that traders and speculators might possibly cause these price swings to last longer and be greater than they would in a more placid world with fewer things to roil the markets.Real estate and stock market bubbles can last for years.
But if there really IS competition, then there MUST be suppliers who are getting along ok at say sixty five per barrell at thier current level of production who could AND WOULD sell a LOT MORE OIL IF THEY COULD PRODUCE IT.If they could produce it IN QUANTITY THAT OF COURSE WOULD START PUSHING PRICES DOWN.
Now maybe some of the multi nationals have some shut in production wells that can't be profitably pumped at sixty five-they would do better then to buy whatever crude they need to run thier refineries.Certainly there is a good bit of shut in production inside OPEC right now.
Speculators and traders be xxxxed I just can't see how they could change these basic facts-unless they aren't facts.
Bottom line-the world will buy and burn so many barrels each and every day,on average ,over any extended period long enough to allow supply disruptions caused by storms etc to average out.
The higher the price the fewer the barrels and the fewer the barrels the higher the price ,the more barrels brought to market the lower the price,the lower the price the more barrels the market will absorb.
Now whether the money all winds up in the producers pockets or not,I can't see how anyone can make a real case for the price of oil being determined by any thing OTHER than the fundamentals.Maybe it would help others see the point I am trying to makle if we quit calling traders and speculators by those names and called them shippers and processors.They are just more middlemen.
Maybe I can express it another way that's simpler. The customer doesn't even know (and why should he really even care?) where the money goes,he just buys so much at any given price.That price is set by the fundamentals of supply and demand.
Maybe traders can hoard oil and cause a temporary runup in prices-a hurricane can cause a temporary slump in production and cause a temporary run up in prices.How is the guy filling up affected?Exactly the same way-except as Darwinian points out,when that hoarded oil is finally sold it will probably push prices DOWN about as much as hoarding it pushed prices UP at the time it was hoarded.
Taking that hoarded oil off the market would not have depressed production at the time of hoarding it -the effect would be the exact opposite-by lowering the supply available it would tend to support the current price at that time and actually support rather than depress production.
Another way of looking at the entire issue is to view politics,storms ,traders,speculators ,and all the legitimate middle men as sources of noise that get between the producer and the comsumer-communication might be temporarily inhibited in either direction but either the producer or the consumer will soon send a signal that overrides the noise.
Of course this whole supply and demand thing is a hypothetical "snapshot "model that assumes a more or less static world.Maybe all we need to know to explain high steady prices is that all the new buyers in the market are using the oil they buy for more important purposes than commuting in oversized trucks-the world really isn't a static place if the time frame is considered.
Sometimes the pros are so close to the forest they can't see it because the trees are blocking the view.Or maybe I should just keep my mouth shut,stay in the shallow end of the pool, and not argue about things that just might be over my head.
There seem to be a lot of pundits out there saying that what has recently driven up the price of oil is bets against the dollar. As the reasoning goes, people are using their dollars to bid up the price of commodities (including oil) rather than hang onto the dollars. The obvious driver is a fear of inflation that could erode the value of the dollar.
You could almost look at it as though oil is the one world currency and the dollar is being devalued against it.
Maybe. But you could say the same thing for any commodity.
Yes I guess so. It makes you ask yourself what true wealth really is or more specifically what it isn't.
Well, when it comes to oil things are a bit more complicated than what is depicted on your typical Econ 101 supply and demand chart.
First of all, the role of inventories is an important one. Almost all crude oil that is initially pumped out of the ground goes into inventories, if you include the oil in pipelines and tanker holds as "inventory" (and it is indeed commonly regarded as such). Demand pulls it out, but there actually is quite a bit of space from the absolute bottom (i.e., "minimum operating level", or MOL), and the absolute top (no more space to put anything anywhere). It makes a very great deal of difference where the world is wrt inventories. If we are close to MOL, then the price of oil will shoot up dramatically as holders of inventory will want to avoid dipping below MOL. If we are close to maxing out on storage capacity, then the price will drop like a rock as producers and holders of inventory desperately try to unload it. If we are somewhere comfortably in-between, then price doesn't seem to budge very much in response to short-term fluxuations in supply or demand. Then of course, it is not just a one global market, but a whole bunch of national markets, and different grades of crude, and disruptions to the supply chain due to aboveground geopolitical factors, etc., etc. Charting this real life system is much more complicated than anything you are likely to see in an Econ 101 book.
Then there is the time dimension. Most of that speculative trading that you ask about does not involve spot prices, but rather futures. There are always going to be speculators in every futures market. One reason is simply that it is an easy way for investors to diversify their portfolios without actually getting into the underlying businesses. Then again, there are also always going to be those who believe that they are going to be among the lucky few who are consistently winners rather than losers. The main reason why many players take positions in the futures market for oil, even though they
might not themselves be producers or big consumers of oil, is because they believe that changes in the price of oil will impact them in some way, and they take positions in oil futures as a way to hedge their risk. That can be considered "speculation", but most of us would argue that it is perfectly legitimate speculation.
The futures market and the real-time spot market are not totally divorced from each other. Movements in the spot market (reflecting real-time changes in supply and demand) will often be amplified in the futures market. Similarly, movements in the futures market can also influence spot prices. For example, if there is a big run up in oil futures prices, in anticipation of impending supply shortages, then this might cause those with inventory to hold on to it in anticipation of being able to get a better price for it later - thus becoming something of a self-fulfilling prophecy, at least in the short run.
There is a catch in that last phrase, though. Such speculative-driven movements can occur in the short-term. However, such things cannot be carried on forever, especially given the role of inventory limits on oil pricing. Holders of oil inventories can only hold on to oil for so long, and then they approach the upper limits of their storage capacity, and must then start making drastic price cuts to unload their surplus.
This, at any rate, is a still very much oversimplified attempt (and thus probably not absolutely accurate) to describe what is happening with a very, very complex system.
Of course the ultimate speculator with the ultimate power is the producer choosing to leave the oil in the ground. Inventorying / storage costs $0. Just line up a friendly bankster to finance cashflow for the period. Agreed, requires collusion, so not likely workable across long-distance transport routes, but shouldn't be too difficult at all with N American local production.
American corn production to increase while Chinese production falls due to drought:
http://www.cattlenetwork.com/WASDE--Corn-Production-To-Increase--Record-...
http://www.straitstimes.com/Breaking%2BNews/Asia/Story/STIStory_428534.html
India suffers from drought also:
http://www.straitstimes.com/Breaking%2BNews/Asia/Story/STIStory_428531.html
Conclusion: continued strong corn prices due to ethanol and exports IMO.
Hello X,
Thxs for the linky info. I would also include the prior linkys posted by other TODers on the sad Mexican water situation. As I feebly recall: they would welcome a couple of relatively benign GoM hurricanes to bring in much-needed rain [South Texas,too?].
We are getting rain here in central Texas right now but the highland lakes are flirting with all time record low water levels. We could definitely use a few hurricanes to recharge the Edwards aquifer.
Yes, India is the worlds second most populous country and its having problems with its harvests and food. Monsoon rainfall down 20% and the worst since 1972, hoarders are being hounded, legislation being introduced to limit the amount of Indian produce that can be stored by multi-nationals (which will force them to import) and export bans on sugar, wheat, oils, etc. Repeated promises by the government to release supplies from its reserves which never get released and practically no supplies left in private hands. The brown stuff is getting closer to the fan.
China are basically emptying the US reserves of soya beans and will probably do the same to the new crop once its finally in.
But elsewhere bumper crops are depressing prices, particularly wheat. Mexico and Guatamala are also having draught and problems with their corn harvests. But lack of money is usually the cause of famine and not necessarily the lack of food.
"GM rolls past 1 million miles in fuel cell demo"
Their Chevy Equinox has a 168 mile range on compressed hydrogen, calling it "an eco-friendly alternative to petroleum-powered cars" - with no mention of where the hydrogen comes from.
I'm sure they're thinking of the Vernal Equinox, must most people on TOD would see this as the Autumnal Equinox of the personal automobile.
BTW, I was a high-schooler in 1970 or 1971 when our Science Club got a demo of a compressed-hydrogen fuel-cell car. It was a Mini Cooper with a row of gas cylinders on the roof, a zirconia cell in the boot, a GE electric motor under the bonnet, and a raft of car batteries in the back seat. Forty years later, GM is touting it as new technology. For them, anyway.
Well, if the hydrogen is made from natural gas, that actually is more eco-friendly then burning regular (not considering energy inputs for implenting a fuel cell car). It's not sustainable either, but more eco-friendly it is.
The law of thermodynamics kicks in as to why this is a bad idea..
Hydrogen is made by breaking something else with Hydrogen atoms down to hydrogen. This takes energy. Then, the energy is released when the Hydrogen is burned with Oxygen (H20)
The problem is that the creation of Hydrogen gas takes more energy then the burning of it. It's a net energy loser. One would be better off to make an electric car and run it off the energy you would have used for creating Hydrogen instead. So, Hydrogen is an energy carrier, not a source.
True as far as your statement goes, but it's still more complicated.
Electrical drive is more efficient than an ICE, and there's no way to run a fuel cell on methane right now. But the embodied energy of the batteries together with their finite lifetime means that EV's use less oil or natgas at the cost of higher consumption of the other forms of energy that are needed for their manufacture.
Then we could argue about how the hydrogen fuel could be made by hydrolysis rather than stripping FF's, and how hydropower is a cleaner and more sustainable source of the necessary electricity, although neither claim is always true.
It comes down to the fact that we in the developed world use too much of everything, and we simply can't consume our way out of an overconsumption problem.
This is why I tend to ignore any articles about hydrogen fueled vehicles. What ever happened to Arnie's California hydrogen highway? Pretty much dead with other California dreamin'.
And yet there is always hope.
However, there is still the argument that hydrogen could be used as a storage medium for things like electricity for wind when the current demand cannot utilize the electricity from the wind. The argument then revolves around what is the best medium for storage. Would batteries be better than hydrogen, for example?
Battery / flywheel / pumped storage = ~80% round trip efficiency
Hydrogen electrolysis (60%) + fuel cell (60%)+ storage = ~30% round trip efficiency
The efficiency of a battery decreases as it ages.
The battery is probably the least durable of the 6 items.
Pumped storage is energy efficient when one ignores the energy needed to construct a reservoir.
Hydrogen leaks from its storage tank.
Energy efficiency does not consider the availability of resources needed to construct the 6 items.
Determining which option is more viable is more complicated than comparing energy efficiency.
I'm afraid that the size of the investment required to totally change out the infrastructure and totally change out the vehicle fleet is the game-ender when it comes to H2. We simply can't afford it. On the other hand, plugging a vehicle into an outdoor outlet at home each night isn't all that big a deal, nor is filling up a tractor or fire truck with biodiesel rather than petrodiesel.
Not to mention that present fuel cells have enough platinum catalyst in them that their price runs in the range of $1,000,000 per car, with no mitigating technology in sight. PHEV's / battery EV's are the only rational transition technology to some alternative future.
No, somehow I can't believe that there's over 23kg of Pt in a fuel cell.
The one I saw in '71 used a palladium-on-carbon catalyst, and it took only grams of Pd to make it work.
I don't have any numbers at hand, so I can't assess whether the previous poster is correct or not, but I think the point that they're trying to make is the following:
The energy required to extract the natural gas from the ground and then strip the hydrogen atoms from the natural gas molecules may be less than the mechanical energy recovered by combining those hydrogen atoms with oxygen in the fuel cell to drive a motor. If the energy required to strip the hydrogen atoms from the natural gas is sufficiently small and the efficiency of the fuel cell is much greater than the combustion engine and transmission (drive train), there is a chance that the natural gas to fuel cell approach may be more efficient that burning the natural gas directly.
In either case the natural gas is the primary energy storage device.
It is a lot more complicated than that. It depends on the duty cycles.
If you have a car that mostly makes 20-40 mile trips between rechargings, it doesn't make a lot of sense to haul around a deadweight of batteries for 100-250 mile range.
But if greater than 40 mile range is needed occasionally, the fuel cell is probably the better non-FF consuming way to do that (assuming that the hydrogen is produced from renewable energy forms).
I'm not sure about the case of a vehicle that will travel 100-150 miles per day, it still strikes me that you'd be expending too much energy just hauling it's own fat reserve (batteries) around.
This is where a small battery trailer could come in handy, when you want that extra range.
a couple of trailers ....
http://www.scribd.com/doc/19182287/Genset-Trailer-Long-Range-Extender
http://www.evnut.com/rav_longranger.htm
Thanks for the links!
Now, if we could standardize the hitch and plug, then battery trailers could be offered by filling stations, ready charged. This is much simpler than the idea of changing battery packs.
There's a business idea. Make an adapter kit for the various plugs!!
What about "battery stations" for want of a better phrase, pace George Monbiot. He suggests a situation where you simply drop off your current battery, replace it with a new fully-charged one and off you go again. In the meantime, your old battery gets recharged and is picked up by the next customer.
This makes Dmitry Orlov's boat plan sound pretty tempting:
How common is crime on the water? Are there pirates or the like?
at times very vulnerable i think; secluded place, no witnesses or help.
we bought a smaller sailboat recently- one that 2 can sleep on- & though i don't think seriously about this as a 'fulltime' option i would want another - a second, partner boat- to live/travel with.
i am near a large river system & think of our sailboat as a transportation means. the same safety issues apply; though there are likely to be other boats nearby. i'm hoping for some arable land near the river, near a 'village' i hope we relocate to.
" VirTec Labs is proud to introduce it's latest line of LifeChannel products. Improvements allow Users to now sense Taste as well as Smell while connected to the WebLinkage. Look for your experiences to be more fully connected." The AD read as Henry got into his WebLinkage that morning.
=====
Think of a world where the Butterfly Effect, is right there at your fingertips, all you have to do it Plug into the WebLinkage interface Module, a bit of headgear like a pair of glasses and a Bluetooth merged. You can live in someone's else's life, more than a Reality TV show from way back when, Live the life you only dreamed of.
VirTec Labs implants the BioDataChip (BDC) in Your head and you will get paid for every User/Hour of viewing, You will be Listed in the LifeChannel system, and get free downloads from the WebLinkage.
Go out there and Live Life to the Fullest, and get paid for it.
++++++++
The above is a rough outline of the story I wrote last night. It takes place in a not to distant future where Our world is heading. What with people wanting to know via Forums, and Twitter etc what you are doing every minute of your day, you'll be able to Link into other lives via the hardware and software Chips in the brains of others, telepathy with a twist.
No more worries of Peak Oil, Climate Change, or anything that happens to be bothering us right now. Imagine not needing the hands to get online, getting plugged into a vast network of Living In someone elses life, the Ultimate couch potato.
We all see a Gloomy Doomy future, I thought why not see a twisted side of where we could go instead. Of course not everyone would approve of the New Way of things. But once you got used to getting in your WombChair each night for a romp in the WebLinkage you might not leave for a while.
Charles E. Owens Jr.
also known as Author at Large.
http://news.yahoo.com/s/time/20090911/us_time/08599192144500
Seems the people out there in the streets are really looking for the "Recession" to keep on Keeping on. I wonder how far out the Ripple Effect will go? But Time paints a dire picture when the Fed wants to Paint an upswing and positive feel good information.
Seems like our push for Localization and Smaller Greener cities might be done by Force of change instead of Willingness of change.
Charles.
Consumer sentiment strongest in 3 months
Cautiously, Small Investors Edge Back Into Stocks
Fundamentals are still ugly, but I'm wondering if we might get something resembling a double-dip.
I find the two consumer articles very disconcerting since it means that at least some people are drinking the Kool Aid. I have seen no meaningful data which suggests any significant positive economic change.
Whether these people are in denial or simply believe MSM/government propaganda is unimportant - they will be ultimately hurt. My concern here is that they will find that the emperor truly has no clothes and cease to believe anything that anyone says regardless of supporting facts.
IMO the worst thing that could happen is a W recession where people's hopes are built up and then dashed to smithereens.
Todd
Todd, it seems to me that despite all of the wealth destruction of the last year or so, there remains much "wealth" to be crushed out of the American middle class. Per capita American energy consumption -- particularly petroleum consumption -- can only go down. Four percent of the earth's population will eventually use 4 percent of the earth's oil. A lot of people still don't get that.
Unfortunately (and thanks partially to the efforts of folks like Dan Yergin, Mike Lynch and Ray "Creamy Nougat Center" Learsy), the average Amurrican is getting a pretty muddled message re: the natural resources available for his/her future disposal. You're right -- a lot of people are going to get burned. As you point out, there really is nothing to support an economic recovery beyond hope that all of your neighbors might go bust and you'll be able to scarf up their stuff at bargain basement prices.
That article has a link to this photo gallery, called The Remains of Detroit. Amazing pictures.
Re: Obama Administration cites over investment in oil and gas, up top.
I have several times in the past pointed out to critics of ethanol subsidies that oil and gas are heavily subsidized. The subsidies comes in several forms.
The most costly both in money and lives are the never ending wars for oil security in the Middle East. If we include Iraq's invasion of Kuwait, these have been going on for nearly 20 years at the cost of trillions of dollars and thousands of lives.
Then there is the oil depletion allowance which shields oil income from taxation due to depletion. Ethanol does not receive a soil depletion allowance although one of the arguments against it that it depletes the soil.
Royalty payments in kind are another one. This shields oil producers from pricing risk since they do not have to raise cash to pay the royalties to the government. Plus there have been shenanigans going on in the Interior Dept. between its employees and oil companies. Oil companies do not own the oil on government property. American citizens own it. The royalties are all Americans get from the deal.
And then there is the Strategic Petroleum Reserve. While it has come in handy in the recent past, it is nonetheless a form of subsidy that withholds crude oil that would otherwise be dumped on the market and likely reduce prices somewhat. Ethanol producers would love to have a strategic ethanol reserve to remove the surplus of ethanol.
This is a partial list. There are others.
I am glad to see the Obama Administration finally addressing the issue. When we extract oil faster because of subsidies all it does is increase the depletion rate. Subsidizing a depleting resource so that we reach its end faster makes no sense.
I have several times in the past pointed out to critics of ethanol subsidies that oil and gas are heavily subsidized. The subsidies comes in several forms.
Yes, and you have been corrected each time. If you want to hold ethanol to the same standards, it gets a whole lot more subsidies than the blender's credit. That is a direct payment for gallons produced. The oil industry "subsidies" are mostly in the form of tax deductions - in many cases open to all manufacturing industries. So if you want to open up that can of worms, we can start talking about protectionism from Brazilian ethanol, etc.
Second, the oil industry pays in enormous taxes. Even as subsidized ethanol plants were going bankrupt and the government was bailing out the financial sector, the oil companies continued to pay a huge tax bill. If you add up the subsidies and the taxes, ethanol is a net taker. Oil is a net provider of revenues to the government. So say what you want about the oil industry, but you can't complain about them not paying a heavy price to governments.
A rough agenda is up for the (30th) Oil and Money conference in London (Oct 20-21): http://www.energyintel.com/om/program.asp. They e-mailed me one with more detail but I can't find it on their site. If anyone is going, let us know about it.
Unrelated P.S. It is unbelievable that people think that you can bring down bad regimes (Myanmar) by isolating them and making them poorer. In fact that entrenches the regimes, as we've seen in Cuba, North Korea, and lots of others.
I have a strategy for bringing down oppressive regimes that I believe would be extremely effective - but I don't think anyone would ever try it. I refer to it as the "Pop & Porn" blitzkrieg. The idea is to load up aircraft with CD and DVD players, catchy music, movies, pornographic magazines, pop culture magazines, and the like...then fly it all in and drop it out of the planes (with the little parachutes and everything). Everyone will becomes so addicted to listening to music, watching movies, spanking the monkey, and wondering about the latest fashion trends that they won't care about the regime any more...they'll eventually grow to resent it and given enough time want to overthrow it because they'll realize that they're being denied all of this music, movies, and porn they've grown to enjoy.
A "charming" little story, linked on Calculated Risk, about a bank exec reportedly taking over a bank owned $12 million beachfront home, and using it for long weekends and parties, and refusing to show the house to prospective buyers. Aren't we glad we bailed out the financial institutions?
http://www.latimes.com/business/la-fi-malibu-wells11-2009sep11,0,740504....
Wells Fargo exec used Malibu Colony home lost by Madoff-duped couple, neighbors say
A top bank executive was seen spending weekends and hosting parties in the $12-million beach house. The bank says it will 'conduct a thorough investigation of the allegations' by neighbors.
Right.
The investigation begins tonight. Here is the schedule.
4 - 6 Meet and Greet the investigators at the beach house. Wine will be served.
7:30 Discuss investigation over a catered dinner of Prime Rib and Sea Bass. Wine will be served.
10pm Investigate Deck overlooking the ocean. Cigars and Brandy will be served.
11pm - Bambi the Investigator shows up in Police outfit. Shots will be served. Bring your own dollar bills.
12 - 12:03 Wells Fargo CEO investigates Bambi's assets and balance sheet. Bambi will be serving.
A follow up investigation will be scheduled for next weekend. Remember, what happens at the investigation, stays at the investigation.
Most amusing post I've seen here in a long time :-)
relative to "overinvesting" in oil and gas, here is an abstract of: "Production decline curves and payout thresholds of horizontal Woodford wells in the Arkoma Basin, Oklahoma. by richard andrews, oklahoma geological survey.
" Through august 2008, the Woodford Shale in SE Oklahoma produced > 180 billion cubic feet gas from > 630 horizontal wells. Average production per well is ~ 700,000 scfpd with initial rates as high as 5-10 mmcfd. Typically, wells are drilled with a 4000 ft horizontal lateral close to the center of the formation and fracture treated with 3-9 stages utilizing ~200,000 pounds proppant per stage. The degree of induced feracturing liberates gas from microfractures in higher volumes for longer periods than compared to verticl wells.............Initial annual declines are 50 - 75 % but gradually fall to ~4%."
and here is the meat:
"Payout thresholds accur when net revenue (70% of gross) equals well cost. Depending on depth, lateral length and the number of frac stages, drilling and completion costs are estimated at $4-$6 million. Results of this study show that above average wells will pay out in a few years with wellhead gas prices >=$8/mcf, at $5/mcf, payout for most wells is >=5 years whereas below average wells will never pay out. Due to gas price indexing, discounted spot prices of only $2/mcf make most horizontal Woodford wells in this play area uneconomical."
in other words zero reserves.
and i think the administration makes the mistake of calling it overinvesting. more like overspeculating with opm.
I was talking to a friend of mine this morning. He knows three brothers that split $100 million in bonus money last year for a lease of their property in the Haynesville Shale Play. I wonder what they would get now?
elwood -- maybe we'll get the true economics of some of the other shale gas plays in the near future. My former client was already seeing shrinking margins as drilling/completion costs kept rising. And this was before NG prices cratered. How hast did it get really bad? In 1Q 2009 they went from 18 rigs to 4 rigs in the TX SG play. How much did they want to get rid of those rigs? They paid $40 million to cancel those contracts. And these were the rigs they had planned to drill on the many thousands of acreas they had spent 10's of million of $'s to lease. And what happens to those leases if they don't drill? They all revert to the mineral owners. That's the view they have of NG prices in the short/mid term picture. I would tend to agree with them.
Earlier this week, a few of us were debating the relative merits of replacing older coal-fired power plants with new, more efficient generating stations as a way of reducing our consumption of this fuel and the environmental harm done therein. I remain somewhat sceptical, but I'm glad Alan brought it up as it certainly merits further discussion (a future campfire topic perhaps?).
On the way home tonight, I stopped in on one of our clients, and as we discussed how things were coming along I took a couple pictures, including this one:
As I added it to the audit file, a couple things came to mind. In this particular area, we replaced sixteen 2-lamp F96T12 fixtures with twelve 4-lamp F32T8 tandem industrials. The connected load dropped by 1.08 kW and the projected energy savings are 2,808 kWh/year based on the client's 50-hour working week. The cost of this "new capacity" is just under $1,000.00 CDN per kW; by comparison, a new coal-fired power plant might come in at four times that. Assuming two kWh are produced from each kg burned, the electricity saved in just this one small area would displace the need for some 1.4 metric tonnes of coal each year.
No new coal-fired power plants !
Cheers,
Paul
Paul -- I'm with you. I'd like to see all the utility savvy folks out there toss in some facts. I'm on the pessimistic side of the fence that believes Americans will use the cheapest substitute in the effort to carry on BAU as best as possible. And if this means a huge increase in coal burning at the expense of the environment then that's the way we'll go. Thus it would be nice to see some hard numers on how we might reduce some of the damage with more efficient plants etc.
This day in history:
1970 -- US: Ford introduces the Pinto despite knowing a design flaw causes the gas tank to explode in collisions. Ford reasons that correcting the flaw would cost $137 million & settling lawsuits would cost only about $49 million, so they do not change the design.
If I recall correctly, many of the Pintos that were involved in accidents and burned were hit at horrendous speeds and that there were other issues (such as gas caps being left off, etc.). If Americans had actually embraced small cars such as the Pinto and stayed with it, then we would be in a much better position now. A big part of the uproar over the Pinto was a backlash against small cars, and occurred in a time when America was rejecting all the energy limitation bad dreams of the past, because it was now Morning in America(tm). Soon it will be Mourning in America.
Beyond which, the basic point your comment appears to be making is that corporations have no morals - which is universally true and one reason why corporations should not have the rights if humans. Think about the decisions made by tobacco companies, where the actual purpose of the product was to addict people to something that provided them no benefits and would eventually kill them.
Hi Twilight,
According to this report, Ford's own internal testing confirmed that "[i]n crashes over 25 miles per hour, the gas tank always ruptured." (my emphasis)
See: http://www.engineering.com/Library/ArticlesPage/tabid/85/articleType/Art...
Cheers,
Paul
trekker -- Sadly the US gov't has a similar calculation on other safety issues such as airlines etc. They actually have a cost per life lost that jutifies (to them) not forcing corrections.
I think this information has been posted at TOD recently, but in case it has not...
http://www.sciencedaily.com/releases/2009/09/090910084259.htm
Science Daily seems to find this research credible, I guess?
There are some amazing statements in this article, including:
“There is no doubt that our research proves that crude oil and natural gas are generated without the involvement of fossils. All types of bedrock can serve as reservoirs of oil,”
Another supposed technocopian breakthrough that will keep us awash in oil for hundreds, nay, thousands of years!
I am *NOT* a geologist, but I know that oil does not form in reservoir rocks, but source rocks. It then migrates upwards to reservoir rocks with a cap rock on top.
Regardless of source, we have over 100 million years of accumulated trapped oil we are burning today (at the rate of 1 million years/year ?) and no significant oil is bubbling up from below.
Just wait another 100 million years and we can do this all over again !
Alan