Drumbeat: November 10, 2009

Interview With Russian President Dmitry Medvedev: 'Oil And Gas Is Our Drug'

SPIEGEL: In a recent article that you wrote entitled "Go, Russia," you spoke of your country's "humiliating" economic "backwardness." Why hasn't Russia managed to overcome its dependency on natural resources in the time since the end of the Soviet Union?

Medvedev: Because people quickly get addicted to drugs. Trading gas and oil is our drug. People can't get enough of it, even when prices are going through the roof. Five years ago, who could have imagined an oil price of $150 a barrel? Trading in natural resources is easy, it leads to the illusion of economic stability. Money flows in -- considerable sums of money. Acute problems can be effectively resolved with it. You don't need any economic reforms; you don't need to deal with diversifying production. We could rid ourselves of this lethargy if we would only learn the right lessons from the crisis.

Energy body rejects whistleblower allegations of oil cover up

London, England (CNN) -- The International Energy Agency has rejected reported allegations from a whistleblower that world oil reserves have been exaggerated to avoid panic buying in the oil market.

IEA: something for everybody in the 2009 outlook

Perhaps the most significant numbers in the World Energy Outlook, at least in terms of the current policy and the international climate negotiations, pertain to China. Indeed, the IEA suggests that if China actually follows through on all of the goals and targets it has announced (for renewables, nuclear power, energy efficiency and the like), it alone could account for 25 percent of the reductions that the world needs to make by 2020 in order to remain on track for limiting global warming to 2 degrees Celsius. Put another way, China would be doing more to address global than either the United States or Europe.

The dollar is weak because ...

NEW YORK (CNNMoney.com) -- Here's the latest twist on the timeless chicken versus the egg debate. Which came first: the stock and commodities rally or the weaker dollar?

There is no denying that the dollar has lost a fair amount of ground over the past few months while at the same time, stocks, oil and gold have skyrocketed.

But is there a real cause and effect relation here? And if so, what exactly is it? Has the greenback slid against other currencies because stocks and commodities are surging or is it the other way around?

Mexico: Refining sector could be opened to private participation

Mexico's energy ministry Sener will attempt to open the country's refining sector to private participation in a new energy reform currently being prepared, deputy minister of energy planning Jordy Herrera told reporters at an event in Mexico City.

A proposal by Mexico's President Felipe Calderón in 2008 had the same goal, but it was strongly opposed by the country's political left and not included in the reform that ultimately passed.

Brazil's Petrobras eyes Angola's deep water oil

LUANDA (Reuters) - Brazilian state-owned Petrobras (PETR4.SA: Quote) is interested in developing Angola's ultra-deepwater oil exploration, known as pre-salt, Brazil's Trade and Development Minister Miguel Jorge said on Tuesday.

Angola shares a similar underwater rock formation as Brazil, which in 2007 made a pre-salt discovery of some 8 billion barrels of crude in its Tupi field.

Study: Cooperation key to growth in oil sands supply

HOUSTON, Nov. 10 -- Although the oil sands industry will continue to develop in Alberta despite the jolt it received when oil prices plunged last year, total Canadian oil exports to the US face constraints, according to a study by the Center for Global Energy Studies, London, and Geopolitics Central, Calgary.

Oil sands production will increase by 1.19-1.99 million b/d during 2009-20, depending on the degree of economic and environmental cooperation among major countries, the study says.

Cooperation extensive enough to keep the global recession relatively short and ensure strong and lasting growth afterward would support oil prices and enable oil sands production in Alberta to rise from 1.21 million b/d in 2008 to 3.2 million b/d in 2020.

The Palin Persuasion

The popular and sensible approach to energy policy is obvious. Remove the restrictions on offshore oil exploration--if Obama thinks it's fine for Brazil to drill offshore, why can't the United States? Lower tariffs and reduce subsidies for domestically produced ethanol. Get rid of the regulations limiting the construction of oil refineries. Dismiss airy prophecies about "peak oil," "green jobs," and "limits to growth." Pledge, instead, that Americans will have access to as much of the cheapest, cleanest energy they need to stimulate the economy. Palin is right. No limits. "All of the above" is best.

Carolyn Baker: From The Wilderness To The End Of Civilization

Why would someone go to a movie that is essentially an interview of someone else? Don't we go to movies to be entertained or watch documentaries in order to be inundated with voluminous information and breath-taking cinematography? What would compel anyone to sit for 82 minutes watching some guy chain smoking while he's being interviewed about the collapse of industrial civilization in a room that looks like a bunker?

If incessant adrenalin rushes enhanced by stupefying special effects are what you desire, seeing "Collapse" should be postponed until you are ready to hear, see, and feel how Director Chris Smith's uncanny discernment is brilliantly conveyed in one of the most poignant, but inspiring movies of this decade.

Kenya's wind power project snagged

NAIROBI (AFP) – A Kenyan wind power project aiming to be the biggest in sub-Saharan Africa suffered a setback Tuesday after talks with one of the key investors foundered, an official said.

After the Recession, Will the World Face an Energy Crisis?

Here's the bad news about the global recession potentially coming to an end: the recovery could spark a massive energy crisis with increased demand for fossil fuels from China and other developing countries, tighter oil supplies and skyrocketing oil prices. And this is just in the near future. The longer-term picture looks even more daunting: if the world continues guzzling oil and gas at its present pace, global temperatures will rise by an average of 6 degrees Celsius by 2030, causing "irreparable damage to the planet."

The warning from the International Energy Agency (IEA), an intergovernmental energy watchdog based in Paris, could add extra weight to the negotiations leading up to the climate change summit in Copenhagen next month, where leaders will attempt to come to an agreement on a successor to the Kyoto Protocol limiting greenhouse gas emissions. "Saving the planet cannot wait," reads the agency's annual World Economic Outlook report, which was released Tuesday. "The time to act has arrived."

But the energy crisis may be even more critical than the IEA is saying. According to a report in The Guardian newspaper Tuesday, the organization, under pressure from the U.S., has in past reports deliberately underestimated just how fast the world is running out of oil. The paper quoted an unnamed senior IEA official as saying that the U.S. encouraged the agency to "underplay the rate of decline from existing oil fields while overplaying the chance of finding new reserves."

Saudis bomb rebels, blockade Yemeni coast: Offensive raises concerns of new proxy war pitting Tehran against Riyadh

CAIRO - Saudi Arabia on Tuesday imposed a naval blockade on the Red Sea coast of northern Yemen to combat Shiite rebels along its border, an adviser to the government said, in the latest escalation of fighting in the southern Arabian peninsula.

The Saudi move comes as Iran, the region's dominant Shiite power accused by the Arabs of backing the rebels, warned neighboring countries not to interfere in Yemen's internal affairs.

Saudi warns Yemeni rebels to retreat from border

SANAA (Reuters) - Saudi Arabia said on Tuesday it would continue its offensive against Yemeni rebels unless they retreated well away from its borders, after insurgents said they had seized more territory near the world's largest oil exporter.

Saudi Arabia is getting increasingly drawn into a conflict to its south between the Yemeni government and Shi'ite Muslim rebels, which Riyadh fears could weaken the kingdom's stability.

World needs Canada’s 'dirty oil', says IEA

The world needs Canada's so-called dirty oil, the International Energy Agency said Tuesday even as it called on leaders to make decisive moves to slash greenhouse gas emissions at a United Nations-sponsored negotiating session next month.

"World leaders gathering in Copenhagen next month for the UN Climate Summit have a historic opportunity to avert the worst effects of climate change," IEA executive director Nobuo Tanaka said in a statement after releasing the agency's annual World Energy Outlook analysis.

IEA sees 1.3 billion people without power in 2030

LONDON (Reuters) - The proportion of the world's population with access to electricity will rise over the next 20 years but more than a billion people will still be without power in 2030, the International Energy Agency (IEA) said on Tuesday.

The IEA, which advises 28 industrialised countries on energy policy, said most of the people still living without power in 2030 would be in Sub-Saharan Africa and South Asia with four out of five of these people in rural areas.

World oil demand growth to be led by Asia - IEA

LONDON (Reuters) - China and India will be responsible for most of the world's oil demand growth over the next two decades, the International Energy Agency (IEA) said on Tuesday.

The agency's annual World Energy Outlook said if government policies stay as they are, Indian oil demand is likely to rise by 3.9 percent every year until 2030, while Chinese demand will rise by 3.5 percent annually over the same period.

This compares with just 1 percent year-on-year oil demand growth for the world as a whole. Most industrialised economies in the Organisation for Economic Cooperation and Development (OECD) will see demand fall due to greater energy efficiency.

A developing thirst: How demand for oil will change by 2030

GLOBAL demand for oil is set to rise from 84.7m barrels per day (bpd) in 2008 to 105m bpd in 2030, says the International Energy Agency in its latest annual energy report. Transport will account for 97% of this increase as rising numbers of cars hit the roads of the developing world. Demand from these countries will overtake that of the industrialised OECD nations by 2030. By then, America, Japan and Europe will be using less oil than in 1980. But the thirst for oil will balloon in Asia—and in India and China in particular—where demand is predicted to rise by as much as 400% compared with 2008.

Investment in renewables falls by 20 per cent in 2009

The renewable power sector has been hit by a significant fall in investment over the past year, according to the International Energy Agency (IEA).

Energy companies around the world have been cutting back on project spending as a result of falling energy demand faltering cash flows because of the global financial crisis.

However, renewables-based power generation has suffered far worse than any other sector, with investment expected to fall by almost one-fifth.

Gazprom Expects Gas Demand to Recover Within 3 Years

(Bloomberg) -- OAO Gazprom, the world’s biggest natural-gas producer, expects demand for the fuel to rise in the next two or three years, narrowing the oversupply caused by the recession and new production projects.

“We are in a long-term business,” Deputy Chief Executive Officer Alexander Medvedev said today in a Bloomberg Television interview in Washington. “In two, maximum three years, we will be back on track with demand for gas because we see the first signs of economic recovery.”

Iraq's Kurds to hold on to oil revenues -Barzani

BRUSSELS (Reuters) - The president of Iraq's Kurdish region criticised the central government on Tuesday for its failure to draw up a clear law on sharing oil revenues and said the Kurds would hold on to what they earn for now.

Speaking during a visit to the European Parliament, Masoud Barzani said Kurdistan had the right to retain the income from the export of about 100,000 barrels of oil per day, despite a law stating that all Iraq's oil and gas assets are shared.

"The Iraqi oil ministry has failed ... in their laws and therefore we are not obliged to adhere to the oil laws of Iraq because they have failed in producing a much more transparent situation," Barzani told a news conference.

Independence Hub may resume production Tues - owner

HOUSTON (Reuters) - The Independence Hub, a major hub for natural gas production in the Gulf of Mexico, may resume production Tuesday evening as workers return to the facility following the passage of Tropical Storm Ida, said owner Enterprise Products Partners.

The fight over the future of food

NEW YORK/WASHINGTON/MILAN (Reuters) - At first glance, Giuseppe Oglio's farm near Milan looks like it's suffering from neglect. Weeds run rampant amid the rice fields and clover grows unchecked around his millet crop.

Oglio, a third generation farmer eschews modern farming techniques -- chemicals, fertilizers, heavy machinery -- in favor of a purely natural approach. It is not just ecological, he says, but profitable, and he believes his system can be replicated in starving regions of the globe.

Nearly 5,000 miles away, in laboratories in St. Louis, Missouri, hundreds of scientists at the world's biggest seed company, Monsanto, also want to feed the world, only their tools of choice are laser beams and petri dishes.

Carbon capture projects around the world

A quick survey of carbon capture projects and efforts around the world:

Power for U.S. From Russia’s Old Nuclear Weapons

MOSCOW — What’s powering your home appliances?

For about 10 percent of electricity in the United States, it’s fuel from dismantled nuclear bombs, including Russian ones.

“It’s a great, easy source” of fuel, said Marina V. Alekseyenkova, an analyst at Renaissance Bank and an expert in the Russian nuclear industry that has profited from the arrangement since the end of the cold war.

But if more diluted weapons-grade uranium isn’t secured soon, the pipeline could run dry, with ramifications for consumers, as well as some American utilities and their Russian suppliers.

The Peak of the Oil Age - The Uppsala World Energy Outlook

A new study has been accepted for publication in the journal of Energy Policy. The article performs an analysis of the oil production forecast done by the International Energy Agency in 2008 and highlights several shortcomings as well as confirms other parts.

'Collapse' is the strangest doomsday film yet

It's telling that Hollywood also has a batch of scary, post-apocalyptic films coming our way. Roland Emmerich's "2012" takes off this weekend, promising a vivid, special-effects-filled look at the Earth's possible demise. There are more bad vibes in the air. John Hillcoat's brooding adaptation of Cormac McCarthy's "The Road" opens this month, offering a bleak view of a father and son attempting to survive in an ash-covered America. Denzel Washington returns, "Road Warrior" style, in January, starring in "The Book of Eli," another stark, days-end vision of the future.

But what is surely the strangest film about our doomsday fantasies arrives Friday. Called "Collapse," it features a spellbindingly weird one-man monologue by Michael Ruppert, a former LAPD officer and investigative journalist who believes that we are about to run out of oil, an event sure to plunge the world into a state of collapse. If you ever thought it was impossible to top Beck's over-the-top fantasies, listen to Ruppert who says that "what I see now is the end of a paradigm that is as cataclysmic as the asteroid event that killed almost all the life on Earth, and certainly the dinosaurs."

Tropical Storm Ida activity statistics update

Offshore oil and gas operators in the Gulf of Mexico are evacuating platforms and rigs in the path of Tropical Storm Ida. The Minerals Management Service’s Continuity of Operations Plan team is monitoring the operators’ activities. This team will be activated until operations return to normal and the storm is no longer a threat to the Gulf of Mexico oil and gas activities.

Based on data from offshore operator reports submitted as of 11:30 a.m. CST today, personnel have been evacuated from a total of 126 production platforms, equivalent to 18.1 % of the 694 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. These structures remain in the same location throughout a project’s duration unlike drilling rigs which typically move from location to location.

Floods force Mexico to shut 20,000 bpd oil - paper

MEXICO CITY (Reuters) - Mexico's state oil company Pemex has been forced to shut down approximately 20,000 barrels per day of oil production due to flooding, Reforma newspaper reported on Monday.

Pemex was not immediately able to confirm or deny the report, which cited local Pemex executive Jose Serrano.

Heavy rains have caused extensive flooding in Mexico's Tabasco state.

A Reuters photographer in the region witnessed several flooded oil installations in Tabasco and neighboring Veracruz state, including what appeared to be a drilling site, crude oil separation tanks, and a pipeline manifold.

Special Report: Improved oil, gas demand, price forecasts raise drilling rig trend

The US working drilling rig count has started to reverse its steep drop as expectations for crude and gas prices and demand have become more bullish.

Angolan Oil Output To Surge Over Next 5 Years

LONDON - Angola's oil industry is booming as money pours in after the end of three decades of civil war, and officials say output could increase by as much as two-thirds over the next five years.

Buoyed by a scramble for energy and raw materials by China and other emerging nations, oil companies are spending tens of billions of dollars drilling oil and gas wells deep below the Atlantic many miles off the African coast. Production capacity has increased steadily over the last two years and oil analysts say Angola could now comfortably pump at least 2 million barrels per day (bpd) and is increasingly only held back by political constraints.

Shell’s Nigerian Oil Output Yet to Recover After Rebel Amnesty

(Bloomberg) -- Royal Dutch Shell Plc, operator of Nigeria’s largest oil venture, has yet to see a rebound in output after a three-month truce that’s quelled violence in the country’s crude producing region, production reports show.

Combined output from ventures operated by Shell Development Production Co. and Shell Nigeria and Exploration and Production Co. fell 10 percent to 410,690 barrels a day at the end of October from early September, according to reports obtained by Bloomberg News. Precious Okolobo, a Shell spokesman in Nigeria, declined to comment on the figures. “We continue to repair facilities to try and bring up production,” he said.

Ukraine to convert IMF cash to pay for Russian gas

KIEV (Reuters) - Ukraine will convert Special Drawing Rights (SDRs) from the International Monetary Fund to pay for November's Russian gas bill, Deputy Prime Minister Hryhory Nemyrya told a television channel late on Monday. SDRs are a nominal monetary unit of the IMF. In August the fund injected about $250 billion of liquidity to its 186 members and Ukraine received the equivalent of $2 billion. Ukraine has been paying around $500 million a month for Russian gas. EU leaders are concerned Kiev may fall behind its payments for Russian gas, prompting another energy crisis that in January led to supply cuts affecting hundreds of thousands in Europe.

ADNOC takes a knock as Japanese oil imports decline

The UAE and its chief oil producer, the Abu Dhabi National Oil Company (ADNOC), have taken the hardest hit from a decline in Japanese oil purchases.

In recent years, Japan has been the biggest buyer of ADNOC’s crude, placing the UAE consistently among the top two oil exporters to Asia’s biggest economy.

But in September, Japan’s oil imports from the country had dropped 28 per cent from a year earlier, by more than 278,000 barrels per day (bpd), Japanese government figures show. The decline was equal to 12 per cent of the Emirates’ total September oil output of about 2.23 million bpd.

Raymond J. Learsy: The Price of Oil and the Massacre at Fort Hood

The relationship between the price of oil and the slaughter that took place at Fort Hood is hardly as far-fetched as it would appear. In an instructive article that was reprinted as an Op-ed in the NY Post on Saturday Nov 7, one Stephen Suleyman Schwartz, Executive Director of the Center of Islamic Pluralism, talks about the influences that apparently formed Major Nidal Hassan's murderous hatred.

The Philippines: Price freeze sparks supply problems at gas stations

MANILA - Some gas stations in the provinces have begun to report low fuel inventories and untimely deliveries, raising fears that the government-imposed ceiling on prices have sparked a supply shortage.

Qatar: Diesel crisis blamed on hoarding

DOHA: A temporary diesel crisis that hit some petrol stations in the country recently following alleged hoarding and black marketing by some shady operators is over, it is learnt.

The Ministry of Interior had to intervene and come up with a novel idea of setting up a number of committees with petrol station workers also on them, to keep a strict vigil on the affected facilities.

Ecuador Government Declares Electricity Emergency Due to Blackouts

QUITO – The Ecuadorian government declared an emergency in the electricity sector due to a generating shortfall at the nation’s biggest hydroelectric plant, which has forced the adoption of energy rationing programs across the country.

Somali pirates attack another oil tanker

LOS ANGELES -- Somali pirates, firing rocket-propelled grenades at a Hong Kong-flagged oil tanker, have launched their deepest attack ever into the Indian Ocean, according to the European Union Naval Force (EU Navfor).

“This was the longest range of a pirate attack off the Somali coast ever,” EU Navfor said. The attack on the BW Lion was launched by pirates in two fast attack skiffs 400 nautical miles northeast of the Seychelles and 1,000 nautical miles east of Mogadishu.

Barack Obama says he will go to Copenhagen climate change conference

A key global treaty to stop global warming almost collapsed last week after poorer nations threatened to walk out unless rich countries like America agree to cut their emissions.

However President Obama said he thinks a deal can still be done and he will go to Denmark in mid-December to make sure it happens.

Spain's windfarms set new national record for electricity generation

Wind energy provided more than half of Spain's total electricity needs for several hours over the weekend as the country set a new national record for wind-generated power.

With high winds gusting across much of the country, Spain's huge network of windfarms jointly poured the equivalent of 11 nuclear power stations' worth of electricity into the national grid.

International Energy Agency warns falling investment risk to economic recovery

PARIS (AP) — The global financial crisis has led to a dangerous drop in energy investment around the world which could choke off the nascent economic recovery, the International Energy Agency said Tuesday.

...The IEA, a policy adviser to 28 mostly industrialized oil-consuming nations, estimates that the financial and economic crisis is responsible for a $90 billion drop in global oil and gas investment this year, a 19 percent cut from 2008.

"Falling energy investment will have far-reaching and, depending on how governments respond, potentially serious consequences for energy security, climate change and energy poverty," the IEA said in its annual World Energy Outlook report.

The resulting drop in oil and electricity supplies could "undermine the sustainability of the economic recovery," the IEA warned.

IEA Cuts 2030 Oil Demand Forecast on Economy, Climate Policy

(Bloomberg) -- The International Energy Agency cut its long-term forecast for global oil demand as the economic crisis saps consumption in developed economies and environmental policies encourage alternative energy use.

Global oil demand is expected to advance 1 percent a year to 105 million barrels a day by 2030 from 85 million barrels a day in 2008, the adviser to 28 nations said today in its annual World Energy Outlook. The figure is below last year’s 2030 estimate of 106 million barrels a day.

“The global financial crisis and ensuing recession have had a dramatic impact on the outlook for energy markets,” the Paris-based agency said in its executive summary of the report. “World energy demand in aggregate has already plunged with the economic contraction.”

IEA report sees oil price at $100 a barrel in 2020

PARIS: The International Energy Agency forecast on Tuesday that the oil price would be $100 a barrel in 2020 and $115 in 2030, saying oil demand would rise by one percent per year.

Energy demand to rise rapidly without CO2 deal: IEA

World energy consumption will rise rapidly over the next 20 years, pushing up costs and increasing greenhouse gases, unless a deal is reached to curb carbon dioxide emissions, the International Energy Agency (IEA) said on Tuesday.

In its annual World Energy Outlook, the IEA said global energy demand would increase by an average of 2.5 per cent per year over the next five years if governments made no changes to their existing policies and measures.

IEA Expects Gas Glut as Unconventional Output Rises

(Bloomberg) -- There may be an “acute glut” of natural gas in the next few years because of rising production of so-called unconventional fuel in the U.S. and Canada, according to the International Energy Agency.

Global unconventional gas output will rise to 629 billion cubic meters in 2030 from 367 billion cubic meters in 2007, or to 15 percent of worldwide supply from 12 percent, the Paris- based adviser to 28 countries said in its annual World Energy Outlook. Gas supply capacity is set to outpace annual demand growth of 2.5 percent between 2010 and 2015, the IEA said.

“The looming gas glut could have far-reaching consequences for the structure of gas markets and for the way gas is priced in Europe and Asia-Pacific,” the IEA said in the report today.

IEA says oil-gas price link may break

An oversupply of natural gas NG-FT and continuing pressure on oil CL-FT supplies could break the link between gas and oil prices, the head of the International Energy Agency (IEA) said on Tuesday.

In many parts of the world outside the United States gas prices are contractually linked to world oil prices but this link has been under pressure in a market that looks awash with cheap gas for years ahead.

Oil stat shock

What the Guardian is saying is that the IEA has been massaging its figures on account of pressure from the US government.

As Morgan Downey over at Scarce Whales points out, that’s a very grave allegation indeed; the IEA after all is an OECD taxpayer-funded institution.

But given the numbers of abrupt revisions the IEA has had to make to its forecasts of late would it be too much of surprise?

As the Guardian states the body is expected to publish its latest World Energy Outlook on oil demand and supply on Tuesday, with the market expecting some “substantial” downward revisions to its long-term forecast for global oil demand.

Kevin Drum: Watching the Watchdog

It's pretty much impossible to know how seriously to take this. It's almost certainly true that analysts within the IEA disagree with each other about long-term projections, and it's also probably true that there are regional pressures of various kinds within the organization. That's pretty normal for international groups.

But is the U.S. actively pushing the IEA to produce figures that it knows to be wrong? And are these two anonymous sources the first ones to ever go public with this? Hmmm. I'm not so sure about that. But the IEA's 2009 World Energy Outlook comes out on Tuesday (last year's projections are above), and we'll see what they have to say then.

Ida makes landfall on U.S. Gulf Coast, hits oil supply

MOBILE, Alabama (Reuters) – A weakening Tropical Storm Ida lashed the U.S. Gulf Coast with drenching rain and high surf on Tuesday as it moved ashore after shutting down almost 30 percent of Gulf of Mexico energy production.

Ida, once a Category 2 hurricane, made its first U.S. landfall at around 6:40 a.m. EST on Dauphin island, the barrier island off Mobile, Alabama, packing maximum sustained winds of 45 miles per hour (75 kilometers per hour).

The Backside of Peak Oil

It's no secret that production in the United States has been tumbling down the backside of peak oil for the last three decades.

I haven't met anyone that believes U.S. production will ever return to its 1970 production level. Believe me, peak oil in the U.S. isn't a myth. It's about as real as it gets.

In fact, it gets downright ugly when you look at our top oil producers.

Let's take a closer look. . .

Goldman Keeps Crude Forecast at $85 a Barrel by End of Year

(Bloomberg) -- Goldman Sachs Group Inc. is maintaining its forecast for West Texas Intermediate crude to reach $85 a barrel by the end of this year and $95 next year as it expects the market to shift into a “global deficit” in coming months.

“Strong activity” in China’s petrochemical and metals sectors is likely to provide support to global oil demand, while production outside the Organization of Petroleum Exporting Countries is set to decline, generating “further price and returns upside,” Goldman’s analysts led by Allison Nathan said in a report dated Nov. 9.

CNN Student News: Economy News

JONATHAN STERN, OXFORD INSTITUTE FOR ENERGY STUDIES: National oil companies and their governments have taken over the access to all their oil. So, anything that is cheap and easy to produce they will do themselves. They now have the technology and the money to buy the technology. They don't need the IOCs for that.

DEFTERIOS: The IOCs, or international oil companies, are left battling it out for more costly prizes where their expertise and technology remain in demand. Recent discoveries in Kazakhstan, the Gulf of Mexico and off the coast of Brazil have allayed fears of what many call peak oil, the term used to describe falling global production. The new finds, however, come with a heftier price tag.

World oil demand to grow 700,000 bpd in 2010 - OPEC

DOHA (Reuters) - Global oil demand will grow 700,000 barrels per day (bpd) in 2010, OPEC's Secretary-General Abdullah al-Badri said in a speech delivered on his behalf on Tuesday.

China and India will lead global economic growth next year, with the producer group forecasting world GDP growth at 2.7 percent next year, up from an earlier forecast of 2.3 percent in July, he said in the text of a speech.

OPEC Won’t Raise Output Because of Stockpiles, Qabazard Says

(Bloomberg) -- OPEC won’t need to raise oil production levels when it meets next month in Angola because stockpiles are “very high,” the group’s head of research said.

“I don’t see that production should be increased,” Hasan Qabazard said in an interview today in Doha, Qatar. “Stocks are a worry, particularly the product stocks. At current calculations we will go to stock build early next year.”

The Organization of Petroleum Exporting Countries made a record 4.2 million barrel-a-day cut in production targets last year as fuel demand tumbled during the worst recession since the 1930s. The group has left quotas unchanged at its three meetings this year.

China slashes Iraq debt for oil deals

China has agreed to forgive 80% of $8.47 billion in debt owed by Iraq, sealing a preliminary deal struck more than two years ago, Iraqi officials said today.

The agreement comes as China's imports of Iraqi crude rise and Chinese oil companies like China National Petroleum Corporation eye contracts to develop Iraq's vast oil reserves as the world's 11th largest oil producer emerges from years of war and sectarian bloodshed.

ANALYSIS - Oil rally complicates China fuel pricing

BEIJING (Reuters) - China's latest fuel price rise may be its last easy fuel pricing decision for a while.

Under a pricing regime that links retail fuel prices to the the global cost of crude, the government upped pump prices for gasoline and diesel by about 7 percent from Tuesday, taking them to the highest ever.

But the system's clarity, the main reason for its introduction at the start of the year, only operates when crude is below $80 a barrel, a level the global benchmark is bumping up against.

China May Have to Raise Gas Price on Higher Costs

(Bloomberg) -- China, the world’s second-largest energy user, must increase domestic natural gas prices to accommodate higher-priced supplies from Qatar and Central Asia, an analyst said.

Liquefied natural gas supplies from Qatar on multiyear contracts may cost 3.95 yuan per cubic meter, or about $16 per million British thermal units after regasification, at the city gate, about 58 percent higher than what households and businesses pay for the fuel in Shanghai, said Tony Regan, a consultant at Tri-Zen International Ltd.

Newcastle Weekly Coal Exports Fall; Ship Queue Rises

(Bloomberg) -- Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, fell by 11 percent last week while the number of vessels waiting to load increased.

E.ON Sells Grid to Tennet for 1.1 Billion Euros to End Probe

(Bloomberg) -- E.ON AG sold its German power network to Dutch electricity-grid operator Tennet BV for 1.1 billion euros ($1.7 billion) to help settle a three-year European Union probe into whether it thwarted competition.

Taylor claims US sought to oust him from power

THE HAGUE, Netherlands -- Charles Taylor claims he was indicted for war crimes as part of a U.S. "regime change" plan to gain control of West African oil reserves.

The former Liberian president has made the allegation in a typically defiant final day of direct testimony in his own defense at the Special Court for Sierra Leone.

PTTEP Won’t Comment on Oil Spill Cause Amid News Report Claim

Bloomberg) -- PTT Exploration & Production Pcl, facing an Australian investigation into the country’s third- worst oil spill, declined to comment on a news article that said the Timor Sea leak was caused by improper capping of a well.

“The company is declining to comment on the possible cause of the incident ahead of the Federal commission of inquiry,” Roley Myers, Perth-based spokesman for the Thai company, said by phone today. The company has seen the news article, he said.

Pennsylvania lawsuit says drilling polluted water

AVELLA, Pennsylvania (Reuters) - A Pennsylvania landowner is suing an energy company for polluting his soil and water in an attempt to link a natural gas drilling technique with environmental contamination.

George Zimmermann, the owner of 480 acres in Washington County, southwest Pennsylvania, says Atlas Energy Inc. ruined his land with toxic chemicals used in or released there by hydraulic fracturing.

‘Reclaim town hearts’

“We have constructed urban places for the last 50 years assuming cars have primacy, with everything built around them,” he said.

“That was the thinking from the 1950s to the 1990s, but now, in the noughties, we are getting different impressions.”

Dr Tolley said health through exercise, Peak Oil and climate change are all forcing changes on our designs and have “put pedestrians and cyclists back on the top of the pile”.

Communities try to prevent pedestrian traffic deaths

Some communities are working to curtail sudden, puzzling increases in pedestrian traffic deaths while safety advocates urge states to spend more federal transportation dollars on sidewalks, crosswalks and safety programs for walkers and bicyclists.

More than 76,000 Americans have been killed walking or crossing the street in the past 15 years, and pedestrians account for about 11.8% of all traffic fatalities, according to the groups Transportation for America and the Surface Transportation Policy Partnership. However, less than 1.5% of federal transportation money is spent on projects for walkers and bicyclists.

Of fish and men: A fable of modern times

Do you think that the US are frantically trying to look for alternate sources of energy just because of climate change? In a decade or so, the petrochemical refinery will most likely be a white elephant, whereas the skills of the fisher folk and the mangrove forest will be vital in keeping their neighbours alive.

Local resilience has started to become a concept that is being propagated by more and more grassroots NGOs the world over. But you can't have local resilience without a working local eco-system.

Crude World

In Crude World: The Violent Twilight of Oil, Maass presents humanity with a snapshot of the implications of our oil addiction. Examining oil collection and storage and transportation from locales in the furthest reaches of the globe, “Crude World” is authentic, persuasive, and damning.

“Across the world,” Maass writes, “oil is invoked as a machine of destiny. Oil will make you rich, oil will make you poor, oil will bring war, oil will deliver peace, oil will define our world as much as the glaciers did in the Ice Age.” “Crude World” depicts the inner workings of this petroleum machine to “reveal an order in the world’s disorder.” The power to create great opportunity is part of the myth of petroleum; Maass travels the globe in order to create lively vignettes of the opposite destiny.

Solar Thermal Electricity Production to Jump 100-Fold, IEA Says

(Bloomberg) -- Power generation using giant mirrors and solar panels to concentrate the sun’s rays and turn turbines will expand more than 100-fold over the next two decades, according to the International Energy Agency.

Solar thermal production will increase to 124 terawatt hours of energy in 2030 from less than 1 TWh in 2007, the Paris- based group said today in its annual energy outlook report.

Japan eyes solar station in space

TOKYO (AFP) – It may sound like a sci-fi vision, but Japan's space agency is dead serious: by 2030 it wants to collect solar power in space and zap it down to Earth, using laser beams or microwaves.

The government has just picked a group of companies and a team of researchers tasked with turning the ambitious, multi-billion-dollar dream of unlimited clean energy into reality in coming decades.

U.A.E. Atomic Program May Propel Region Into Nuclear Arms Race

(Bloomberg) -- The United Arab Emirates, which plans to award the Persian Gulf’s first nuclear power contracts this year, may start a regional arms race as its neighbors seek similar technology, according to a Chatham House report.

“Risks from nuclear proliferation cannot be eliminated entirely” from the U.A.E.’s program, Ian Jackson wrote in “Nuclear Energy and Proliferation Risks: Myths and Realities in the Persian Gulf,” published today. “It is possible that the genuine desire of Gulf states to engage in civil peaceful nuclear power could possibly tip the region into a nuclear arms race, especially if state intentions are misunderstood.”

Recession Opens ‘Narrow Window’ to Cut Global CO2, IEA Says

(Bloomberg) -- The global economic crisis has opened “a relatively narrow window of opportunity” to halt the increase in greenhouse gases released by power plants, factories and cars through 2020, the International Energy Agency said.

Annual emissions from using energy may peak at 30.9 billion tons over the coming decade, assuming there is “radical and coordinated policy action across all regions,” the Paris-based agency said today in its World Energy Outlook. The report reiterated estimates first published on Oct. 6, including its forecast that global energy use is set to decline this year for the first time since 1991 because of the recession.

“The financial crisis offers what maybe we a unique opportunity to take necessary steps as the political mood shifts,” the IEA report says. “But this saving will count for nothing if a robust deal is not reached in Copenhagen.”

Texas Gov. Perry: Cap-and-trade would harm state

AUSTIN, Texas — Texas Gov. Rick Perry told renewable energy industry officials that a cap-and-trade climate bill in Congress would increase taxes and devastate the state's energy sector.

Perry, contending that the climate bill would mean "economic disaster" in Texas, said the state is encouraging alternative energy sources while improving the environment.

Climate change makes English winemakers see red

DORKING, England (Reuters) – The pickers working their way along the hillside, clipping bunches of small, dark purple grapes from the rows of vines and dropping them into plastic buckets are harbingers of a warmer planet.

In recent years, aided by milder springs and autumns, a few British wineries have revived a red winemaking tradition which died around 600 years ago.

US seeks climate framework, not legal pact: experts

WASHINGTON (AFP) – Lack of action on the climate change bill bogged down in the US Senate will not stop Washington from seeking a framework to curb carbon emissions at next month's summit in Copenhagen, experts say.

"I don't think that anyone is expecting a legal pact at this point," Michael Levi, an expert on climate issues at the New York-based Council on Foreign Relations, told AFP.

But US President Barack Obama already hinted this week that the United States would seek to create a "framework for progress" at the summit, which he said would pave the way to stem a "potential ecological disaster."

The Maldives' battle against extinction

As its own gesture the Maldives now aims to go "carbon-neutral" by 2020. That means switching to renewable energy sources where it can, and balancing the carbon it does emit through measures like planting forests elsewhere.

There is a major problem - the islands' main earner, top-end tourism, cannot be environmentally friendly. All the clients, and all manner of extraordinary luxury foods from Europe and elsewhere, are flown in.

Glorious vision in Kenya's sky melts away

Mt. Kenya's ice cap was so stunning that some began revering it as God's home. But most of the shining glacier has now disappeared, robbing communities of water and leading to a crisis of faith.

India environment minister under fire over glaciers

India's environment minister came under fire Tuesday from scientists for denying climate change was causing Himalayan glaciers to melt and disputing the work of the UN's top global warming body.

On Monday, Environment Minister Jairam Ramesh said there was no "conclusive scientific evidence" linking global warming to the melting of the glaciers and questioned work by the Intergovernmental Panel on Climate Change (IPCC).

The IPCC, a UN body regarded as the world's top authority on climate change, has warned Himalayan glaciers are receding faster than in any other part of the world and could "disappear altogether by 2035 if not sooner".

The above links concerning the IEA all get their genesis from the IEA's World Energy Outlook, published in Paris earlier today. The Executive Summery can be found with this link. IEA World Energy Outlook Executive Summary The link was posted by Klackon early this morning on yesterday's Drumbeats. It is a bombshell:

All the growth comes from non-OECD countries:OECD demand actually falls. The transport sector accounts for 97% of the increase in oil use. As conventional oil production in countries not belonging to the Organization of the Petroleum Exporting Countries (OPEC) peaks around 2010, most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources.

The IEA is saying non-OPEC crude production has peaked, or will peak around next year. Actually it peaked in 2004 and it has taken the IEA six years to come around to admitting such. Now they are saying that the predicted 20 million barrels per day increase over the next 21 years must come from OPEC.

It is a little confusing because they say conventional non-OPEC oil peaks in 2010 but all their data refers to all liquids. However what we can glean from their projections is alarming.

All increase, in crude oil, must come from OPEC countries. This means that OPEC nations must increase their production by almost 800,000 (C+C) barrels per day, per year, every year! With OPEC countries needing to come up with 2 million barrels per day just to replace depleation, I don't think this is possible. In fact I think OPEC peaked in 2008.

Ron P.

And then there is that pesky problem with net oil exports. . .

All of these articles talking about the future of oil are surely showing that peak oil is becoming better known and accepted even in the MSM.

The "Ater the Recession..." Time article above included the following bit:

"The dire predictions about the world's depleting fossil fuels are in fact known to those closest to the oil wells: oil executives. Yves-Louis Darricarrère, global chief of exploration and production for the French energy giant Total, told TIME last week that the world has "oil reserves of about 40 years at current demands." "It is not so easy to supply the world," Darricarrère said in an interview in south Yemen, where the company just opened a liquefied natural-gas plant.

"We will reach a plateau and start to decline."

He said that expanding access to alternative-energy options like electric cars and solar panels will only "add some years to the end" of the world's oil reserves."

He didn't say that "we have already passed the plateau and are now starting the decline" but this is pretty close to the language we have been using here for a while.

I'm a TODer too, but I never claimed or believed that there will be a 40 year long plateau. I rather believe that the plateau is more or less starting to ebb away right about yesterday AND in 40 years time I believe we are at some 20-25% of todays production. (let's not bring ELM into this happy opinion)

Actually I think the situation is even more extreme: OPEC needs to provide 800,000 bpd yearly, replace 2 Mbpd of their own depletion, and also replace the depletion of the post-peak non-OPEC countries! So effectively they should be adding some 4 Mbpd new production yearly, every year for the next 21 years.

I cannot do a detailed calculation, but would this be possible even if we believe the official OPEC reserve numbers?

@westexas: IMHO the net export thing is not really a problem here. IEA calculated total demand growth (domestic demand for oil producers, and the demand of oil consumers). The growth of domestic producer demand does impact exports, but also increases total demand. So IEA says that 105 Mbpd are going to be needed, and implies that 105 Mbpd are going to be produced - this would match regardless of the net export level.

The REAL problem is though this demand-based production estimation. I am going to need one million dollar this year, so I predict that I will also earn it!

The bombshell is the Guardian piece about IEA whistleblowers saying the US has pressured them to fudge the figures and that PO is essentially now.

This Guardian piece about IEA whistleblowers) is really the most important story to come out in a long time. If we can not trust the official data that is put out then all of this analysis is just spitting in the wind. I'm sure memmel has told you so written all over his face right now.

IMO the only data you can trust is the price consumers pay at the pump. If this price is rising faster than wages then gasoline is becoming less affordable - so, less will be consumed at some stage.

Is your gasoline cheaper now than it was 10 years ago?

Is it more affordable than 10 years ago for the average wage earner?

It's currently being debated on Slashdot


Many of the comments go on about the oil shale (and a quote like "Oil producers have no motivation to lie about oil reserves" !), but claim they are not being developed because of all the NIMBYs. I have not yet seen anything stating anything like "flow" "EROEI" or even "Export Land Model" ;-)


"Bombshell" is an understatement.

Unless that story turns out to be wildly wrong or a hoax, it's a turning point in the public perception of the oil situation. And since we all act based on our perceptions, not reality, it could have a huge impact on our situation.

As for the political scandal part of it--was it just Bush involved? was Obama in the loop since the 2008 election? did it go back to Clinton?--that could be its own embarassing, but far less important, mess.

The Guardian is a very serious and respected British newspaper, if they’ve published the article it means they had high quality information…

The Guardian is a very serious and respected British newspaper, if they’ve published the article it means they had high quality information…

But, the very next paragraph in Leananns excerpt claims global warming will heat us up by 6C by 2030! No climate scientist has that fast a warming even on the tail of their predicted distribution. You'd probably have trouble finding one to give you even 1C by then. It is just so completely wrong, that their credibilty is completely zeroed out! Whenever I see a totally outrageous statement about something I know something about, I have to assume that the integrity of the source is very low/non-existent.

Totally outrageous?

BBC radio this morning had an interview with an Australian climate scientist. He said that he's seeing changes that only a few years ago he thought he would never live long enough to see.
(sorry, if I knew I would be using the interview for reference I would have remembered details... I think the BBC host was Dan Daymon (spelling?)... the scientist discussed alternate energy, carbon sequestration, mammal species extinction, and the possibility of Australia becoming an "Exxon-Mobil nation.")

Go try making the 6C by 2030 claim over at realclimate. I think you will be trashed. I agree that things are changing faster than models indicated, but current warming rates are in the .1 to .2 per decade range. Twenty thrity is only 20 years away, so anything much beyond about .4C implies a major acceleration in the rate of change. I could believe .6C by 2030, but 6C is on the higher end of predictions for even 2130.

of course more insidious motives could be ascribed with the unsupportable six degree number being tossed out to remove all credibility from anything else in the article

Time magazine said the same thing. I would guess the 6C thing came from the IEA, not the Guardian.

You might be right, I just clicked on the Guardian article, and saw nothing about it. Its also quite possible that someone made a typo which wasn't caught .6C (point 6) wouldn't have been entirely out of line.

In the days when the Guardian made the transition from being the regional 'Manchester Guardian' to the national 'Guardian' it was often known as the 'Gruaniad' after much satirical abuse by 'Private eye' magazine - due to it's apalling number of typos..

Haven't posted in a while but this Guardian article, if true, sums up what was suspected for the past few years. Moreover, I thought the OPEC countries would always use global warming as an excuse to cut back on oil supply. So, it's not too surprising they would make claims about an increase in global temperature.

i don't know what's true, but if the article/whistleblower is accurate (and forecasts for whatever reason have been unreasonable over-estimates for some time), it suggests to me that our leadership has been very, very foolish.

my train of thought: i'd assume, if the u.s. pressed for higher estimates, then our leaders have been privy to the secret folder (with the real forecasts) for years. why then under the bush administration would the government curtail alternative energy r&d? why then wouldn't our leaders push a gas tax to help wean the economy off fossil energy? why then would obama talk about al qaeda and the taliban as an existential threat, when he knows what the real and imminent threat is? to me, this fails the sniff test.

as i've said before, i am making preparations for energy-related calamity, because calamity is possible, but this guardian article doesn't make much sense to me.

about turning points, i'm not sure this article can serve as a turning point. until the public is informed of the true numbers/forecasts, the public (by and large) is trusting its leaders to navigate the ships of states. the public will continue doing what it has been doing until told to do otherwise.

To protect the interests of the fossil fuel lobby. The whistleblower stated right up front that markets would panic if this was accepted as common knowledge, suggesting a quick retreat from carbon intensive industry. The FF industry has contributed heavily to anti-AGW campaigns, you notice. If the direst projections are correct this is insane and "makes no sense." The bottom line trumps all.

i hear you, klr... but that suggests that our leaders (every president for the last thirty, forty or fifty years) have been co-opted *entirely* by the ff industry. is that what you are saying?

The "ff" industry is the basis of industrialism! "Co-opted" doesn't begin to touch the depth of the issue.

They go to the EIA and IEA for data on reserves/resources; I doubt your typical pol's interest goes much further than that, requiring nothing insidious here. As Alekett asserts, Caruso could well be characterized as evil in a sense; or perhaps he was simply a patsy, being leaned on to formulate rosy scenarios for public consumption. Or the data is vague enough to create the impression of cornucopia, and it's not in his job description to demand full disclosure from the OPEC nations - who really knows?

Past that between the spectres of modern campaign financing, lobbying, and the likes of Al Gore calmly reassuring everyone that a transition to renewables will be a seamless 10 years beyond which we can wholly divest ourselves of fossil fuels, I'm in no way surprised peak oil has basically gained no political traction. Roscoe Bartlett delivered his spiel alright - to an empty chamber. The only thing that will really deliver the message is incontestable evidence of price surges and shortages.

my train of thought: i'd assume, if the u.s. pressed for higher estimates, then our leaders have been privy to the secret folder (with the real forecasts) for years. why then under the bush administration would the government curtail alternative energy r&d? why then wouldn't our leaders push a gas tax to help wean the economy off fossil energy? why then would obama talk about al qaeda and the taliban as an existential threat, when he knows what the real and imminent threat is? to me, this fails the sniff test.

Because one, they weren't interested in the welfare of the citizenry, they already had a pretty good idea that TSWHTF, and that they really weren't going to be able to tell the truth and keep their power. They never had a plan with the sheeple's welfare in mind!

And two there is nothing like keeping people distracted and afraid of the boogey man to keep them from paying attention to what they were really doing which is looting and pillaging the entire country and the world for their own benefit.

So now they hold all the cards and they bluffed everyone into folding.

What exactly did you expect?! It smells exactly like I thought it would all along.

you could be right, fmag, but just to make sure i hear what you're saying: you're sure that the government of the united states of america (our elected representatives as a body) have been interested for the past fifty years mainly in "looting and pillaging the entire country and the world" for their own personal gain? and they are running the country and the world off a cliff accidentally in their drive to have lots of possessions and power?

There's a word for all this: capitalism. It's been headquartered in the US for quite a while now. The factions of wealth and power at the top are so embattled with each other that they are as oblivious to the world and its inhabitants as are T Rex's in battle with each other are to the trees and lesser creatures under their feet.

With PO, industrialism goes into decline and capitalism becomes increasingly maladaptive (to put it mildly). And we're not going to have any version of Marxist socialism either, because it too is premised on industrialism. We are going to forced to radically retrench, to return to the soil so to speak. How we get around the war-and-profit addicts so that we can begin to deal with this is the really big problem in the near term.

dave - can you expand on how you think capitalism will be maladaptive ? I have a friend I routinely argue with that thinks free market capitalism will find a way around this - if only the market were allowed to work they would adjust to the new "reality", we would conserve more etc. etc. Is it really just a matter of scale then - sure, market capitalism can survive - it's just not going to serve several billion people ?

"How we get around the war-and-profit addicts.." - that's a great way to frame the question...


Capitalism is unable to price finite resources. It is unable to price the damage done to the ecosystem. It takes into account only the immediate, i.e. 10 years or so, not the future beyond that.

One counters that regulation would fix this. But capitalism means winning, and winning means buying the gov't and the regulators. Some of small free market capitalists grow into big monopolists, and big monopolists can and do buy (and have bought) the gov't.

What's needed is gov't that isn't owned by capitalism, and makes decisions that go against profit considerations when needed, that takes a serious look at the future, tells people the truth about what it sees, argues about it openly, and ultimately acts on it. Such a gov't wouldn't go around closing enterprises that were more or less working -- it would help them. But neither it would hesitate to help cooperatives and other forms of organization. And it would not hesitate to nationalize dysfunctional sectors that are leading us to disaster.

But more than anything else, it would recognize that industrialism is in decline and that the key thing is to reconnect people with the soil, and help the millions rebuild their lives in small localized regionally self-sufficient communities. It would put a priority on helping everyone to survive comfortably rather than rescuing profits at the top. Our highly materialistic middle class life in the West is toast.

A truly gigantic adjustment to our approach to everything is needed on that account. There needs to be some kind of rough plan for a smooth glide into sustainability.

All this without even talking about the war machine. Also, I know that there is not going to be any kind of smooth glide into anything. But without some kind of vision, there is no hope at all. There is no way to critique the current order without some vision of the alternative.

End of rant!

Your rant pretty much covers it. But we have another problem further complicating things. The deeply held free market extremism represented by the Chicago School. This means the US has a lot of people who wouldn't be beneficiaries strenuously arguing against anything that might imply the government regulation of any sort is needed. We have not only the fact of greed, but the philosophy that unbridled greed is the wayto build paradise on earth.

IMHO a great deal could be accomplished by changing the basic rules of corporate charters so that a corporation's bottom line would be how much good it does for the human community, as opposed to making a profit regardless of the social/environmental damage it may do (and does in spades!)

Yep, that's about it in a nutshell.

My gut says that it is mainly denial and not a broader conspiracy. Most people's first reaction to peak oil is that "that can't be", or "there must be something wrong with the numbers". And then they see the reassuring statements from the cornucopians, and that puts their minds at rest.

The people who were exerting pressure on the IEA would clearly know a lot more about energy than your average Joe. And yet I would be inclined to say that it is likely that not many of them are "big picture" types of people. Most people focus in on a much smaller area of expertise, and know a whole lot less about stuff outside of their area. Peak oil really only comes into focus when you study the big picture - otherwise it becomes easy to convince yourself that the energy that we "need" will come from someplace else.

The Guardian-IEA whistleblower story just popped up on CNBC. The IEA, they said, strongly denied the allegations.

I will post the link if it appears on their website. Posted videos usually lag the actual story by at least one hour however, sometimes as much as two hours.

Ron P.

The whistleblower story should come as a surprise to no one who has followed the genesis of the financial crisis. The Passionate Eye (CBC Documentary program) ran a documentary just last night about how former Commodity Futures Trading Commission Chair Brooksley Born attempted to impose any sort of transparency regulations on derivatives contracts 10 years ago but was completely stonewalled, ridiculed and eventually dismissed by Congress on the advice of extreme free-marketeers from the Fed and Treasury including Greenspan, Bob Rubin, Tim Geihtner and others plus the mainstream business media who thought it would scare the markets.

She's now basically saying I told you so. And Greenspan has admitted his modus-operandi for the past 20-40 years had been completely misguided.

Yet the same folks are still in power.

There is no doubt in my mind that there are one or more Brooksley Borns within the IEA and that we will/have seen the same lobby by power brokers interested only in BAU not necessarily due to conspiracy (though Greenspan was quoted as saying a free market will take care of fraudsters on its own as well) but simply due to inertia and because people "don't want to scare the markets". and the same result will occur and worse.

It is, unfortunately, human nature.

If one simply accepts the fact that free markets are 'free to fail' then, by definition, they are self-regulating.

How can the "efficient market hypothesis" possibly be valid when you have people at the top layers of government deliberately withholding information so as to not disturb the markets?

Here is the link Ron mentions:

I don't understand what the fuss is all about, to my mind this: http://www.reuters.com/article/GCA-Oil/idUSTRE58M40T20090923 is the big oil story of the year.

Global oil and natural gas reserve replacement fell to 88 percent of production in 2008, despite a 23 percent increase in development spending in that year

Leanan, whats become of toto?

yes, my toto radar went off a few days ago.

In addition, the summary notes the consequences of falling energy investment:

Falling energy investment will have far-reaching and, depending on how governments respond, potentially serious consequences for energy security, climate change and energy poverty. Any prolonged downturn in investment threatens to constrain capacity growth in the medium term, particularly for long lead-time projects, eventually risking a shortfall in supply. This could lead to a renewed surge in prices a few years down the line, when demand is likely to be recovering, and become a constraint on global economic growth. These concerns are most acute for oil and electricity supplies. Any such shortfalls could, in turn, undermine the sustainability of the economic recovery. Weaker fossil-fuel prices are also undermining the attractiveness of investments in clean energy technology (though recent government moves to encourage such investment, as part of their economic stimulus packages, are helping to counter this effect). Cutbacks in energy-infrastructure investments also threaten to impede access by poor households to electricity and other forms of modern energy.

Taken with your bombshell quote above, I don't see how this is possible either. westexas will hopefully share some of his scenario data about the (im)possibilities of OPEC increasing exports by ~800k bpd each year.

Of course, the two key numbers are the volume of oil actually (net) exported and the post-2005 cumulative net oil exports (CNOE). Sam's best case is that the (2005) top five net oil exporters, in the 2005-2013 time frame, are depleting their post-2005 CNOE at the rate of about 9%/year.

Incidentally, check out the WSJ story on severance payments down the thread. From outward appearances, many unemployed people, living off severance payments and savings, seem to be fine, but they are rapidly depleting their capital. This is very much analogous to the net export situation, where the actual decline in annual net exports has been small (analogous to spending on the personal level), but the remaining CNOE are being depleted at a furious rate (analogous to the personal capital depletion rate).

From the WSJ article on severance pay down the thread:

By Mr. Joegriner's own calculations, the family will be out of money in six months if he doesn't find work. "It will be D-Day," he says. "But on the outside, no one has any idea that we're in trouble."

Thanks, WT. I think the two examples (exports and severance) point to a critical issue: human nature. It would be beneficial if more people were self-aware of the importance of ELP rather than "keeping up with the Joneses", but, alas, this is not human nature.

Moving the ball further down the field, I find the IEA summary to be unbearably optimistic. In discussing the ramifications of Climate Change, they note:

A critical ingredient in the success of efforts to prevent climate change will be the speed with which governments act on their commitments. Saving the planet cannot wait. For every year that passes, the window for action on emissions over a given period becomes narrower — and the costs of transforming the energy sector increase. We calculate that each year of delay before moving onto the emissions path consistent with a 2°C temperature increase would add approximately $500 billion to the global incremental investment cost of $10.5 trillion for the period 2010-2030. A delay of just a few years would probably render that goal completely out of reach.

I don't like making predictions, but I'll predict this much: Real action on emissions WILL be delayed by just a few years (as it has for decades), leading to exponential cost increases and higher temperature increases - just as people delay the realization about severance or exports that you point to.

However, I must say the IEA summary is quite gloomy, even with the positive aspects based on unrealistic assumptions.

Try to keep an eye on the differences between 'Human Nature' and Culture. A lot of the behavior of the populations in the West has more recent roots, and contrary behaviors will show up when there's enough pressure to delaminate from the flowstreams of our recent industrial and socio-religious habits. (In particular, I think about the Calvinistic Work Ethic, and attitudes about class and ownership)

I'm not saying they'll get better, necessarily. Turbulence comes first, then a new settling out..

As westexas has mentioned before, the five top exporters (Saudi Arabia, Russia, Iran, Norway, UAE) have net exports of 22.623 Mbpd and the two importers (USA and China) have net imports of 14.861 Mbpd in 2008. Source: EIA Country Profiles (2008).

Any guesses on when these exporters will not be able to fulfill the oil needs of the two importers? I read somewhere that China will need to import 3 million more bpd by 2015, and US net imports will be influenced by whether we can lower our consumption at the rate production declines (2%/year).

Sam's best case is that the (2005) top five net oil exporters will be down to 14 mbpd some time around 2017 or so.

Kevin Drum from Mother Jones is the one blogger who has consistently been on top of the peak oil stories. He used to be more widely read in the blogosphere but has gotten squeezed out by others who tend to come over as more assertive. You can tell a Drum post because he always comes across in measured tones, and admits to something he doesn't know.

Agreed. It's kind of sad, but it seems to be human nature: people who assert their views forcefully and with confidence win out over those who express themselves with less conviction. We see that even in the peak oil community - heck, even in the comments here. People who are willing to go out on a limb get respect...no matter how many times they're wrong.

IMO, this is why going after Yergin, etc., based on how often he's been wrong is a non-starter. It just doesn't matter whether "experts" are right or wrong. We just want them to act like they know what they're talking about.

people who assert their views forcefully and with confidence win out over those who express themselves with less conviction.

Yes. Some years ago I watched one of these "Who's the next millionaire"-Shows on TV. One candidate was a corporate consultant. The guy was the incarnation of self-assuredness.

The first, or second (50 or 100 Euro) question, however, was just some funny playing with words, as usual. Every ten-year-old would have known the correct answer (I don't quote this here since it was in German.) Our consultant insisted one of three wrong answers. All cajoling of the presenter wouldn't put him off his decision - he left with 0 Euros prize - and yet with all that confidence!

Just like what Bertrand Russell was getting at:

"The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts."

"The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts."

The biggest reason I am very wary of people like Jay Hanson. Too damn sure of themselves, and especially about extremely complex subjects.

Kevin Drum's blog Talking Points Memo still seems to be going strong and staying relevant.


TPM is Josh Marshall's blog. Pretty much all politics there.

Kevin Drum was at Washington Monthly before Mother Jones.

I like Kevin, because he is careful to state all important caveats and uncertainties. Thats the sort of thinking that we need more of. Instead it seems that loud and heavily biased screeds win viewers.

Kevin Drum is how I first came to the Oil Drum. Before he was with the Washington Post, he had a blog called Calpundit, focussing on California politics. I had gotten Calpundit via a link from a columnist at the Sacramento Bee, during all the media feeding-frenzy at the time the Gray Davis recall and election of the Governator was coming down. And Calpundit had a link at one point to the Oil Drum, which I clicked on, I suppose four or five years ago now.

Antoinetta III

A highly recommended front page story in the WSJ, basically an analysis piece interspersed with several accounts of why many people now desperately wish that they had slashed their spending months and years ago.

Life on Severance: Comfort, Then Crisis

Overall, companies have been eliminating or trimming severance packages. For those who do receive severance, the median pay allotted is 12.5 weeks' salary, down from 21.8 weeks a decade ago, according to outplacement firm Challenger, Gray & Christmas. But this downtown has brought heavy layoffs to the financial and auto industries, two places where generous exit packages remain more common. The dramatic changes in such sectors mean that many of the eliminated jobs will never come back. Some workers may suffer a permanent hit to their standard of living.

Those affected often have trouble accepting their diminished prospects. Hefty severance packages, while intended as a safety net, can lull the unemployed into a false sense of security. Some people continue spending as before. "There is an end date when that severance is going to run out," says Ellen Turf, chief executive of the National Association of Personal Financial Advisors. "At that point, the only life preserver is unemployment or getting another job....It's an awful situation."

My 2¢ worth, from early 2007:


I am now suggesting EELP--Emergency Economize, Localize, Produce

Interesting read.

I think much of the human nature behind the difficulty in facing reality can be summed up by this part of the article:

"We were stupid," he says. "You become accustomed to a certain lifestyle. When your world changes and things dictate that you change, you're pretty stubborn to give things up."

I fear the same thing will happen in regards to Peak Oil awareness.

The headline, inadvertently, pretty much sums up the overall economic/energy outlook: "Comfort, Then Crisis."

That was an amazing article. Perhaps because I come from a long line of peasants, I found it really hard to understand why people would behave that way. Sure, I can understand being reluctant to give some things up. But $50 flower bouquets for your wife every week? That's $2,600 a year. Jeez. It wouldn't even mean anything, if you got them every week. If I was his wife, I'd have told him to knock it off. Or buy cheaper flowers. Pick some from the yard, even.

It's a rich treasure trove of analogies for our entire economic/energy outlook. I think that the unwillingness to downsize, until the wolf is practically chewing his way through the front door, is a sort of a Consumer Mutual Assured Destruction--in other words, no one wants to be the first consumer on the block to admit that he can't maintain the high consumption lifestyle.

I used to chat with a guy in my office building, about Peak Oil and my ELP recommendations. He said that everything I told him made sense, but he didn't want to unilaterally downsize if everyone else in the neighborhood was maintaining their lifestyle (haven't seen him for a while; I think that he was laid off).

Rockman and I passed through the Economic Valley of the Shadow of Death in the Eighties; actually we probably did it twice--1986 and late 1988, early 1989, and as I said before, a lot of my ELP essay was based on how I kept my family fed in the Eighties. One of the advantages of unilaterally downsizing, as in ELP, is that you better equip yourself to be able to accept lower paying jobs (or pay cuts) and thereby keep food on the table.

I'm not sure when it happened, but, at some point, it seems that we went from practicing Capitalism to practicing Conspicuous Capitalism. In addition, people can (and often do) imagine things being better than they are now, and start planning for those better times (I'll buy a better house, better car, live Large, et al). Yet, people often resist imagining that things will be worse than they are now, and rarely plan for those worse times.

Americans are optimists, to their own detriment. We are the greatest nation on Earth, and we'll kill anyone who says otherwise!

Americans aren't lazy, just complacent. Don't know about the rest of the world, but I do know that:

There is a great deal of human nature in people.
- Mark Twain

It's pretty typical of the lies people tell themselves about their situation. It's both denial, and "keeping a brave face on it so as not to upset the children".

To change would be an acknowledgement that things are going to be different - people who have had high-level careers sometimes cannot fathom the possibility of dropping back a few rungs on the ladder.

Illargi had a link to a Frontline article Sunday about New York's Upper East Side:


I was recovering from some hard gardening Sunday and sat and watched for a hour, flabbergasted as person after person told about running through their savings and running up huge credit card debts. Reminded me of the stories of the 18th century French aristocracy hollowing out personal and national wealth to keep up lavish lifestyles.

I couldn't figure out why the New Yorkers hadn't cut back long before they had $80,000 and up credit card debts.

For that matter, I can't figure out why my own mother is only now realizing that IN has to equal OUT or bad things happen.

Some of these folks are finally on the verge of getting it. The guy in the article has a wife who is a paralegal and she doesn't want to look for a job because they can't afford child care. Jee whiz golly, the former executive is already doing the stay at home dad stuff. If she can get work and he can't, send her out to hold down a job and downsize until they can live on her income while he stays home with the baby. If they are willing to take in a border and grow potatoes (a little garden, so fun and educational for the children, you know) in Silver Springs, they might even be able to stay in their house.

Fascinating report.

I felt kindof bad for the HR guy who is going to all the networking meetings. I went through a similar experience in 2000 when the software industry hit the wall.

I was fortunate to have got 30 days of paid consulting as part of my severance, at a firm that specialized in people reinventing themselves. I really had the opportunity to think through what I really wanted, instead of having the job define me via title, status, brand name etc etc.

Those "elevator pitches" (hate 'em) really don't do anything to help people understand what makes them happy or valuable - it's all part of the process of turning employees into commodities which can be continually swapped out for the cheapest one that will do the job.

All those seasoned industry folks at the meetings - basically viewed by the system as obsolete.

I think what many people will come to realize is that divesting themselves of all their "stuff" and living much lighter is going to be much more fulfilling long-term.

In a declining economy, when you slip off the ladder then you are best off accepting the fact that the rung you finally get a grip on is going to be several rungs lower than where you were.

The big problem is that so many employers would rather hire someone young, inexperienced, and barely qualified rather than someone older with tons of experience and qualifications that has had the misfortune of slipping off the ladder.

The real laugh was that the guys whining about money while getting their hair done were probably spending more for that one session than I spend at my barber for a whole year.

One of the principals in our HR dept is flying to Florida this week to pick up a recently purchased vanity dog, and then come back to work and decide who has to be fired so the org. can meet its budget.

Well, I come from more than one line including peasants and not-so-peasants. The peasant finds it hard to understand that behavior. But the not-so-peasant also recalls endless harping on who was 'ahead' and who was not - mind-bogglingly persnickety comparison of wages, salaries, Christmas presents, etc. For fear of losing status, the players of that game would never, not in a million years, have told the guy to knock it off. <sarcanol> I think I'll just chuckle and chalk it off to "diversity" - what else to do? </sarcanol>

Or this one:

A few days later, Mr. Joegriner received an offer and a contract. Despite the earlier enthusiasm, doubts began to surface. "What if we went all the way out there and they laid me off?" After fruitless negotiations, he turned down the job. The reason: The position didn't include a guarantee of severance pay. Says Mr. Joegriner: "I just couldn't take the risk."

So he is going to sit at home and burn through savings instead.

The thing that surprised me about the article was how many people didn't slash spending from the day they got laid off. Many of them probably saw the layoffs coming ahead of time - *that* would have been the time for them to slash spending.

IMHO, Mr Joegriner should have taken the out-of-town job, and gone there alone, in order to have income, to try and pay down some of his bills, and build up some savings, at the same time as cutting back on his family's expenses.

He could have spent 6 months to a year finding out if the job would pan out, before moving his family out to join him. At the same time, he could also have been searching for something closer to the family, while living in an inexpensive rental.

My great grandparents moved to South Africa from Eastern Europe. My great grandfather went over in 1896 to get set up and start a business. His son went in 1903, and the rest of the family, my great grandmother and the 4 daughters didn't join them until 1910, partially due to the Boer War.

I think people have lost the ability to make long-term plans.

I think it is more that people are reluctant to take what might be perceived as a step down. If they have to take a new job, they want one with the pay and the perks of the old one. That's just not gonna happen, but it takes people a while to realize and come to terms with this.

Now in theory the very day you got laid off you could cut your spending to the bone. But if everyone else in your community still has a job, then it looks bad, so people want to keep up appearances a lot longer than they should.

I agree with what westexas said above about how this in a way is a metaphor for how society is "facing" some of the other issues that we see coming up.

Goldman CEO making the rounds claiming GOD is on their side while, as the author states, the White House remains eerily silent http://www.huffingtonpost.com/charles-gasparino/post_439_b_351116.html

The CEO is correct Brian.. GOD (Government Of Democrats) is on their side. I actually don't care much for the Repubs either...they are equally to blame IMHO. But the initials didn't work with them.

Bravo Rockman.

Grand Old Dissemblers, maybe?

GOD, GOP... same sh*t it's just that the flies wear different colored ties!

Nader's line is the best-the two parties only differ in the speed that they drop to their knees and service their owners http://www.truthdig.com/report/item/20090810_nader_was_right_liberals_ar...

A new, very good article from The Guardian on the issue: "Too fearful to publicise peak oil reality"


if a gas "glut" does develope, wont this stimulate economic growth, consumption, waste, food production, population growth, oil demand.

a glut in ng doesnt have to amount to much, just a few percent. taking the increase of gas in storage as "oversupply", for the us, just over 1 bcfd, and comparing that to 2008 dry gas production amounts to less than 2%.

sometimes bad is bad.

I'm dreaming of a dark Christmas
Not like the ones I used to know
Where tree tops don't glisten
And children won't listen
To hear our many tales of woe!


Can't find the hot new toy? Blame the economy
Where's my hamster? With inventories thin, holiday shelves are already going empty

NEW YORK (AP) -- Robotic toy hamsters, the latest Barbie dolls and stylish boots are disappearing from store shelves as holiday shoppers start to get serious. But don't confuse this with the days of Tickle Me Elmo.

Instead of a throwback to great buying binges of the past, the empty shelves are just another sign of bad times.

And here's a toy that is completely usless because the majority of Americans no longer have any brain activity to measure.

Other toys that are already becoming hard to find include Mattel's Mindflex, which measures brain activity through a helmet,

Home made tin foil hats are set to make a huge comeback this year!

I saw this coming, which is why I've already done most of my Christmas shopping. I'll buy the last couple of things within the next week, then I'm done. That means I won't be setting foot inside the stores at all after Thanksgiving. I have tried to avoid that rediculous, lemming-like rush to the stores after Thanksgiving for years now.

I guess the empty store shelves will make it easier to shut down and liquidate the stores after the holiday season is over.

I'm lucky as I'm Orthodox and hold Christmas at Christmas (Jan 6th-7th)so I get to buy marked down items at "post Christmas sales". I save a bundle that way. If the Christmas sales are bad then the overhang of stock should give some huge bargains at the sales.

A new article just published in The Guardian: Too fearful to publicise peak oil reality

The economic establishment accepts the world soon won't be able to meet energy demands, but wants to keep quiet about it.

The fear is that panicky markets can cause enormous damage – panic-buying that prompts fights over resources, which in turn could lead to power cuts in some places and other such mayhem.

If this is true, that is it would really cause such fears, is keeping quiet about it still justified? However I don't believe it would cause such panic. But at any rate the truth must come out and the sooner the better. Better let it trickle out now rather than hit us like a ton of bricks in a few years. A little panic now would be better than a huge panic then. I guess it is a question of when "Peak Panic" will hit.

Edit: Sorry lb262 I did not realize you had already posted the link when I posted this. I checked before posting the link and nothing was there but by the time I had typed and posted, your post appeared.

Ron P.

no prob

"Pennsylvania lawsuit says drilling polluted water "

There's another lawsuit over drilling the Barnett Shale too.

"Wolf Eagle Environmental sampled the ambient air in the Town of DISH, Texas at seven locations on August 17 to 18, 2009. The air sampled was analyzed for Volatile Organic Chemicals, Hazardous Air Pollutants, Tentatively Identified Compounds and NOX.

In the conclusion section of the report, Wolf Eagle stated“Air analysis in the Town of DISH confirmed the presence in high concentrations of carcinogenic and neurotoxin compounds in ambient air near and/or on residential properties.” The report further indicated that many of the compounds in the air exceeded the Short-term and Long-term Effects Screening Levels (ESLs) according to Texas Commission on Environmental Quality (TCEQ) regulations."


re the IEA fudging the numbers:
they now fall into the camp of all other "managed" US Govt statistics - employment, GDP growth rates, etc

as someone said, "we no longer have markets, only interventions" all markets are manipulated, and financial chimera abound

but "'twas ever thus" - markets and numbers have always been manipulated - governments and individuals have always tried to gain an advantage.
the great thing about the commodity markets is that you can't lie for very long. supply and demand will dictate price. the market, eventually, will reflect reality

There is the possibility that this leak is timed to set up massive shorting by Goldman and cronies-hard to say.

Interesting - my reaction to stories such as the Guardian one about fudging the reserve data is that of course the numbers are crap. It's apparent that all the official numbers published about just about everything are manipulated if it is in the interest of those publishing them to do so. They may be right or they may not, but it is naive in the extreme to take any of it at face value. It should not be a surprise to anyone.

Further, when a story such as this shows up in some conventional publication like the Guardian, one should immediately ask "why now?". Who benefits? Maybe it is just what it appear to be - a news story - or maybe it is more manipulation.

All of this equates to zero trust. Sure this manipulation has always occurred in greater and lesser amounts, but once it gets to the point that the masses stop trusting anything the government says then there are serious social implications.

I've been there for a long time now - I don't believe any of it and I don't have the time or ability to independently research or verify everything either. I have a few sources I've grow to trust fairly well in specific areas, but the rest I just assume that what I'm hearing is manipulation or propaganda, watch and wait to see how it pans out, and try not to get too worked up right away.

Your initial feeling on this one matched mine-as you state, Why now? Re zero trust, the US government gives money to Goldman at basically 0% because they have allowed them to call themselves a "bank"-the system was set up so that large banks would get cheap money which they would lend out (after taking a healthy slice) to build up the overall economy. This is unprecedented-giving taxpayer money at 0% to a large hedge fund with nothing in the way of spin off benefits at all for the country. It is unbelieveable how Obama doesn't even get questioned on this.

That's just it - it's entirely believable, and indeed should be expected. The general outlines of what happens should not be surprising if one's mental model is reasonably accurate. The details are what is surprising and what make it interesting.

There is the possibility that this leak is timed to set up massive shorting by Goldman and cronies...

I doubt it, oil is up a few pennies this morning. (Now down two cents. It is bouncing around unchanged.) The story seems to have almost no effect on the market. I think Goldman and cronies would be way to smart to short on such news. They stand an even chance of losing as gaining. Anyway it seems that shorting would be the wrong bet on such a rumor. It should make the price of oil rise.

Ron P.

I´ve created this little table as answer to the IEA report.

Properties of material obtained

Energy content
Adversity of and effort for production

Energy consumption for production

Crude Oil
sinking (rising watercut)
sinking (getting heavier, tainted with H2S, heavy metals)

sinking, hydrogen fraction lower
offshore, water injection
Natural gas for water and oil pumps (driven by gas turbines)
Manifa, Khurais, Ghawar, Saudi Arabia

Tar Sand

0.5 barrel/metric ton
much lower than oil, low hydrogen content, high anorganic content
cold climate, high gas consumption
Natural gas for heating, diesel for trucks
Alberta, Canada

Natural Gas
sinking (shift to shale gas)
tainted with H2S and other nonhydrocarbon gases
constant after processing
hydrofracing. Acid stimulation

Electricity and liquid fuels for pumps and drilling
Shale plays, USA

thinner coal beds
rising ash and water content

sinking (shift to subbituminous coal and lignite)
much overburden, need to go underground
especially electricity and liquid fuels for transportation
Wyoming, West Virginia, USA; Germany

HTML code fail ?

I've updated my software (Sokath) to version 0.3.1. It can be downloaded here:


Bug Fixes:

- The annoying errors are gone. Added default values to region files.
- Koppelaar curve not updated in Overall Panel
- P/Q vs Q rises above maxY
- Legend and Settings are merged in every panel
- "Prices" is first option in Demand and Supply Panel
- Changed North-America color from yellow to pink
- Fixed miscellaneous issues with Demand and Supply Panel
- Implemented function that draws background lines
- BP Data updated to 2009
- Koppelaar Data updated to 2050

The EIA's October IPM has just been released. In the first eight months of 2009, world crude oil production is averaging 71,989 m/b/d. World crude oil production is below 2004 crude production and all years in between. 2009 world crude oil production for the first eight months is about 1.8 m/b/d less than 2005 for the same period.

There are a lot of things I don't understand about the IEA however there are several other things that are obvious to anyone who has been awake for the last forty years or so. When OPEC was created many of the countries involved raised their proven reserves by billions of barrels of crude. There was no new discovery, this was just a paper increase so their OPEC allotment would be higher. The early papers of Jean Laherrere and Colin Powell showed this. Later Matt Simmons "Twilight in the Desert" re-affirmed much of the early findings. For many years those bloated reserves did not go down though the country exported millions of bpd and little was new discoveries. The IEA has to accept KSA and other OPEC pronounced reserves. They cannot say “KSA lies through their teeth” (I can but IEA can‘t :). IEA has to continue to count the paper barrels created in the beginning. Only trouble is paper barrels do not refine very well. Further if the local population knew how badly the kings and princes ripped off the good life, they would be upset.

So it should have been pretty well known that the numbers were sick and the engineers rotating in and out of OPEC countries certainly know the truth. All you have to do is ask; no conspiracy. Now blaming the US for “Pressure” is pretty typical too, especially for a left leaning Euro publication. It may be true but it makes a much better story if Bush made them do it. It will sell more papers.

The reason crude is pretty stable is it’s not quite time to panic yet. When it is time to panic I certainly would not want to be short any hard commodity. I think even Pork Bellies will limit up for a few days:).

Speaking of Pork Bellies check out pictures of Wal-Mart … yuck pooey and we are worried about what people? They have guns and that’s a worry.

Remember, armed gangs will not go hungry.

When OPEC was created many of the countries involved raised their proven reserves by billions of barrels of crude.

Not to nitpick but OPEC was created in 1960. It was the mid 80s before they ALL dramatically increased their "proven" reserves. They did it because OPEC decided to base quotas on the amount of proven reserves.

Ron P.

roland horne has a different interpretation:


Is it basically as follows? I don't cue up videos.

Undoubtedly some exaggeration is likely, however it is also true that prior to 1987 many of the reserve estimates had been quantified much earlier by concessionaires who were using conservative US practices. Until 1987, OPEC countries had no particular motivation for precision in reserves estimation, and in fact may have preferred to keep the magnitude of their good fortune to themselves. In 1987, they suddenly had a good reason to investigate more carefully and to report the numbers to the other OPEC members (and thus to the world).

Future of oil (pdf). That's an old one. Iraq was claiming 289 bbo at the end of the 80s, too - Saddam going hog wild. I like the old table of US reserve estimates, including Hubbert, from the 1962 report. M King was squarely in the minority with his low ball estimate, but we saw what happened subsequently, didn't we?

Congressional Research Service: U.S. Fossil Fuel Resources: Terminology, Reporting, and Summary

U.S. proved reserves of oil total 21.3 billion barrels and reserves of natural gas are 237.7 trillion cubic feet. Undiscovered technically recoverable oil in the United States is 145.5 billion barrels, and undiscovered technically recoverable natural gas is 1,162.7 trillion cubic feet. The demonstrated reserve base for coal is 489 billion short tons, of which 262 billion short tons are considered technically recoverable.

Surely recoverability varies a lot with price (not to mention labour costs).

I have been hearing personal reports from local farmers that there are PROPANE shortages all over Minnesota farm country.
Apparently the high requirements of crop drying are over running supply? Or is this a tactic to raise the Midwest propane prices which are running way below the rest of the country?

That has happened in previous years. The northern middle part of the country is at the end of the pipelines, so they're the first to suffer if there's a shortage. Seems to happen at this time of year especially.

They actually had congressional hearings about it a couple of years ago.

I think they're expecting the solution will be a new pipeline, from Canada. Then they won't be last in line any more.

one factor is the rise of ung. ung is generally leaner in ngl than conventional gas. according to the doe, from 2000 to 2009 ytd, extraction loss from ng marketed production declined from about 5% to about 4%. propane makes up a large part of extraction loss.

farmers concerned about the cost of propane should find a way to utilize ng. if they cant do that, what chance is there for cng use in transportation ?

propane price(used here primarily for front yard gas grills and meth manufacture) has not declined along with the price of ng. front yard gas grills are "yard art" here, displacing "yard art" of old, parked cars.

Someone yesterday asked about Saudi oil production and prices. Here is a little chart I put together showing SA average daily production by year versus the average inflation adjusted price by year.

The production data (Red Line)is from table t11c from the EIA. The price data (Blue Line) is from here: http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_...


Sorry. Should read 100,000s BPD

I had month-by-month figures in mind. Like this:


I used EIA F.O.B. Costs of Imported Crude Oil by Area data - nominal costs should work fine, and this set goes back to 1973, although I didn't have the chance to use all that since EIA monthly production data for KSA only goes back to 1994. BP has annual data back to '64, of course.

You can see them attempting to follow the curve, up until the spike in '05, after that it's "Uncle!" You can't blame the crew here for thinking something was seriously wrong with them in '07, they pumped flat out for a spell and then dropped production, in total defiance of the price signal. Apparently they can play catch up, if only to that 11.2 kb/d level, but even that's being obliterated by continuous rising domestic consumption. And most of their NG is associated so they have to work in more oil production to utilize it...quite the bind.