Drumbeat: January 12, 2010

EIA sees US natgas production down 3 pct in 2010

NEW YORK (Reuters) - The U.S. Energy Information Administration on Tuesday slightly raised its estimate for domestic natural gas production in 2010 but still expected output this year to be down 3 percent from 2009 levels.

In its January Short-Term Energy Outlook, EIA said it expected marketed natural gas production to be down 1.8 billion cubic feet per day, or 3 percent, this year, primarily due to steep declines from initial production at newly drilled wells and the lagged effect of reduced drilling activity.

World oil demand to grow 1.47 mln bpd in 2011 - EIA

(Reuters) - The U.S. Energy Information Administration on Tuesday said it expected world oil demand to rise to 86.65 million barrels per day in 2011, up 1.47 million bpd from 2010.

US gasoline likely to top $3 in spring, summer - EIA

WASHINGTON (Reuters) - The price U.S. consumers pay for gasoline is expected to top $3 a gallon this spring and summer, the Energy Information Administration said on Tuesday in its new monthly forecast.

"Pump prices are likely to pass $3 per gallon at some point during the upcoming spring and summer," the EIA said. "Because of growth in motor gasoline consumption, the difference between the average gasoline retail price and the average cost of crude oil widens in 2010 before starting to level out in 2011."

Bomb hits Russian gas pipeline - agencies

MOSCOW (Reuters) - A bomb destroyed part of a main gas pipeline in Russia's Muslim region of Dagestan, agencies reported on Tuesday.

White House garden ‘ex-seeds’ expectations

WASHINGTON - To Michelle Obama, her White House garden is more than a plot of land. It's also a soapbox.

The South Lawn garden has given Mrs. Obama a platform to speak out about the country's childhood obesity problem, extol the benefits of eating fresh food, and teach children early to appreciate vegetables.

U.S. Carbon Output to Climb 1.5% on Economic Growth, EIA Says

(Bloomberg) -- U.S. carbon dioxide output from energy use should rise 1.5 percent this year as the economy recovers from the worst recession since the Great Depression, the Energy Information Administration said today.

Emissions from coal, oil and natural gas consumption should increase based on “projected improvements in the economy,” the EIA said in its January Short-term Energy Outlook.

Vatican says ‘Avatar’ is no masterpiece

VATICAN CITY - The Vatican newspaper and radio station have called the film "Avatar" simplistic, and criticized it for flirting with modern doctrines that promote the worship of nature as a substitute for religion.

U.S. Overtakes Russia as Biggest Natural Gas Producer

(Bloomberg) -- The U.S. overtook Russia as the world’s largest natural-gas producer last year as U.S. suppliers tapped unconventional resources while demand in Russia plunged amid the country’s worst economic decline on record.

U.S. output advanced 3.9 percent in January through October to 18.3 trillion feet (519 billion cubic meters), according to the latest Department of Energy data. Russian output, about four-fifths of which comes from state-run OAO Gazprom, plunged 17 percent in the period to 462 billion cubic meters.

Chevron Had $56 Million 4th-Quarter Refining Loss, Sankey Says

(Bloomberg) -- Chevron Corp., the second-largest U.S. oil company, had fourth-quarter refining losses of more than $600,000 a day as fuel demand faltered and costs increased, Deutsche Bank analyst Paul Sankey said.

Profit from refineries and filling stations was “sharply lower” than in the third quarter because the margin between crude costs and gasoline and diesel prices narrowed, San Ramon, California-based Chevron said yesterday in a statement. The company’s refineries had about $56 million in losses, offsetting gains from higher energy prices and a 9.2 percent jump in oil and gas output, Sankey said today in a note to clients.

Saudi craving for oil comes at a price

As Saudi Arabia’s economy has grown in recent years, industrial capacity and car ownership have increased exponentially with it.

It is no surprise that demand for oil is increasing at such a rate that, when combined with a shortage of gas and the inefficiency of power generators, supplies by the world’s biggest oil exporter are likely to be constrained, analysts warn.

Domestic Saudi consumption of oil jumped by 16.4 per cent year on year in August because of an unprecedented surge in the burning of crude, according to a report by the International Energy Agency in November. As a result, the IEA has revised up its forecasts for Saudi domestic oil consumption to 2.6m barrels a day in 2009 and 2.8m barrels a day this year.

Last year, the kingdom said it increased its production capacity to a record 12.5m barrels a day. But, to meet domestic and industrial power demand, it burns 1.25m barrels a day, according to the ministry of water and electricity.

Aramco sees demand rising

"Prices have started to recover and demand for oil is rising gradually," Reuters quoted Falih as telling Watan. "Aramco stands ready for all possibilities to supply energy."

The kingdom's oil output capacity capacity stood at 12.5 million barrels per day, Falih added.

Phil Flynn: When bullish is not just bullish enough

Peak Freaks worried about peak oil, as opposed to peak demand, may find one more reason to rest at least a little easier. For the first time in seven years production at Pemex Oil in Mexico may actually rise. Bloomberg News reports that Petroleos Mexicanos, the state-owned oil company, may produce more crude in 2011 as new discoveries come on line, arresting seven years of plunging output. The company says it may produce 2.55 million barrels a day next year, up 50,000 barrels from 2009. What is more, the company plans to increase output to near 2.69 million barrels a day in 2010. Bloomberg says that Pemex pumped 2.602 million barrels a day through November 2009. Pemex output entered its seventh year of declines this month, as the company aims to find new deposits and bring discoveries online to replace aging fields. Pemex Chief Executive Officer Juan Jose Suarez Coppel has said the company may pump 2.5 million barrels of oil a day in 2010. The company expects to add production from new fields that are part of its Crudo Ligero Marino project as well as fields in the Campeche sound, the location of Cantarell, the world’s third-largest field when it was discovered in the 1970s. Production at the $11.1 million Chicontepec onshore field and additional onshore projects may also climb next year. Cantarell accounted for about two-thirds of the oil Mexico produced at the peak of production in December 2003, fell by 35 percent in November from the year-earlier period. The production declines cost Pemex about 300 billion pesos ($23.4 billion) in lost sales last year. This forced Mexico’s government, which relies on oil revenue to fund about a third of its budget, to raise taxes to narrow the widest budget deficit in bout 20 years.

The New Oil Index is About to Create Even More Opportunity for Investors

Speculators in New York won't be calling the shots anymore. Not in oil, anyway.

The way we price it. The places we trade it. The companies that stand to profit most.

It's all about to change.

Britain's 'energy crisis' not yet over

LONDON (UPI) -- Britain's gas crisis is not yet over as demand continues to soar in times of a bitter cold spell.

Facing one of the coldest winters ever, British consumers are hoping that the gas flow continues unabated. While the cold has been easing over the past days, energy giant BP Monday announced it would close down a North Sea gas pipeline for a week of maintenance, putting further pressure on the British grid after a pipeline pumping in crude from Norway was temporarily shut down last week.

How are farmers coping with the snow?

Farmers are facing big bills as they struggle to deal with the heavy snowfall, with shed roofs collapsing, drinking water freezing and crops unable to be harvested.

The Chavez Spiral

With petroleum prices down around $71 a barrel from a high of $147 the Venezuelan government is struggling to make up for the revenue shortfall to save programs that placate the poor by providing cheap food, fuel and other government giveaways. Making matters worse, the once mighty Venezuelan petroleum industry has been laid low by politicization, corruption and mismanagement; rather than producing 3.3 million barrels per day, industry analysts believe the production is closer to 2.3 million. Instead of maximizing profits by producing its quota, Venezuela's state-run oil fields are either underperforming or have collapsed altogether. Refining capacity also is in steep decline so Venezuela must import gasoline to meet internal needs--buying it at the market rate, selling it to domestic consumers at the much lower subsidized price and eating the difference.

Shell CEO: Nigeria No Longer Drives Oil Output Growth

Royal Dutch Shell PLC no longer looks to its troubled Nigerian operations to drive growth in its oil and gas output, said Chief Executive Peter Voser in comments posted on the company's website Tuesday.

"Nigeria is still a heartland for Shell, but we no longer depend on it for our growth aspirations," said Voser. "This gives us more flexibility in deciding when and how to develop oil and gas resources in Nigeria."

Nigeria May List Stock of Petroleum, Phone Companies

(Bloomberg) -- Nigeria may begin trading shares in state-owned Nigerian National Petroleum Corp. and Nigerian Telecommunications Ltd. on the domestic stock exchange this year, the head of the bourse said.

Nigeria: Fuel shortage and the destruction of local refineries

The focus has shifted to refineries. It is no longer news to read or hear that the JTF has destroyed what it classified as illegal refineries. What is news is the number of refineries that would be smashed by the task force. By the last count, at least 878 facilities not licensed to refine petroleum products have been destroyed by task force in the Niger Delta. At least 12 of such facilities were destroyed in January 2009. One hundred and fifty were destroyed in November the same year. In that operation, over 2,000 drums of refined petroleum products and 16 fuel tankers loaded with refined products worth millions of naira were confiscated in addition to 10 other assorted cars and buses used for the operations.

Death of rationalization

When the consequences of peak oil start to make themselves known, it will become cheaper to hire an extra person if that reduces the energy consumption or the capital tied up in machinery. If not sooner, then it will eventually no longer be profitable to replace a machine that (finally) breaks down with a new machine instead of having an extra person at hand.

Michael Klare: US turns persuader not policeman

Many of us who supported Obama hoped he would achieve substantial progress during his first year in office. These expectations have not been met. The disappointment many of us feel is to some degree the product of inflated expectations. Because we expected so much, it is natural that we lament the lack of progress on the issues he championed so forcefully during his election campaign. But this also reflects a misreading of Obama’s temperament and the environment in which he is forced to operate. A methodical, pragmatic leader, he is not prone to dramatic actions. And being painfully aware of the limits to American power – limits greater than those faced by any recent US president – he is disinclined to undertake any initiatives that would further strain America’s already overtaxed capabilities.

In New York City, a Chilly Library Has Its Rewards

Under a little-known contract provision titled “Extreme Temperature Procedures,” unionized workers at branches of the New York Public Library can accrue compensatory time when the temperature inside dips below 68 degrees for a couple of hours. Similar clauses exist for libraries across the city.

Plugging into electric wheels in Detroit

Focusing on alternatives to gasoline, autoomakers are rolling out more electric cars and hybrids at this year's show.

Navistar to get $37M for 'super truck'

Navistar International Corp. said Tuesday it will receive more than $37 million in federal funding to develop a new "super truck" in partnership with the U.S. Department of Energy.

The goal of the program is to develop new technologies resulting in a 50 percent improvement in fuel efficiency.

Obstacle No. 64 to dealing with climate change: The cult of celebrity

Chris Mooney and Sheril Kirshenbaum, among others, detail the consequences to one of the most notable scientists who did bridge the gap between science and celebrity in last year's book, Unscientific America. Carl Sagan was denied membership in the National Academy of Sciences in large part because he had dared to go public.

It took until NASA's chief climatologist, James Hansen, was well into his 60s that he finally conceded he was obliged to get involved in public policy debates, if for no other reason than the science his field was producing implied a miserable future for his descendents. His first book, Storms of my Grandchildren, wasn't published until he was 68, and in it he devotes much space to explaining why he took so long, even though the dangers posed by climate change had been clear long ago.

GM's Lutz: Higher gas tax would help

Bob Lutz wouldn't seem a likely candidate to argue for significantly higher gasoline taxes, or to suggest that such taxes would be a good thing for the auto industry. But in a meeting with journalists at the auto show Monday, he did just that.

"If the rise in gasoline prices is gradual, I think that all of us in the industry would frankly welcome that, because there is nothing more illogical than forcing fuel-saving technology when gasoline is extremely cheap," he said when asked about any concerns about oil again rising above $80 a barrel.

Lutz was asked if that means he would favor higher gasoline taxes, as in Europe where taxes drive fuel to more than $5 a gallon. He said he couldn't speak for GM, but he said he saw a lot of value in a steady tax rise to much higher levels.

Gas Pains: The Problems with a Gas-Fired Bridge to Clean Energy

Natural gas is often seen as the “bridge fuel” to a clean-energy future—it’s abundant, reliable, and has about half the emissions of coal. Today, a couple of reminders of just how tricky it can be to really make that gas-powered energy revolution a reality.

Petraeus: Iran's nuclear infrastructure can be bombed

The deployment in the Middle East of the USS Dwight D. Eisenhower carrier strike group in the first week of January adds muscle to the words of Gen. David Petraeus, CENTCOM commander, on Jan 10 that Iranian nuclear infrastructure, albeit strengthened against attack with enhanced underground tunnels, wasn't fully protected.

"Well, they certainly can be bombed," he said to CNN. "The level of effect would vary with who it is that carries it out, what ordnance they have and what capability they can bring to bear."

Why Investors Are Crazy For Rare-Earth Metals

For now the world is still obsessed with the price and geopolitics of oil.

Every other commodity remains secondary.

But while the internal combustion engine will be with us for awhile, the world is changing, and oil will slowly fade in importance.

The Mekong River Under Threat

Until the 1980s the Mekong River flowed freely for 4,900 kilometres from its 5,100-metre high source in Tibet to the coast of Vietnam, where it finally poured into the South China Sea. The Mekong is the world’s twelfth longest river, and the eighth or tenth largest, in terms of the 475 billion cubic metres of water it discharges annually. Then and now it passes through or by China, Burma (Myanmar), Laos, Thailand, Cambodia and Vietnam. It is Southeast Asia’s longest river, but 44% of its course is in China, a fact of capital importance for its ecology and the problems associated with its governance.

CNBC's Kilduff: $100 Oil in Next Six Months: Network contributor says China pushing prices higher; blasts the peak oil theory as dated

Peak oil is a theory that there exists a point in time when the maximum rate of global petroleum extraction is reached. However, a recent BusinessWeek article disputed this theory and Kilduff explained that when this idea was conceived, there wasn’t the technology to confirm such a theory.

“With new technologies every day, Larry,” Kilduff said. “This was thigh problem with the peak oil theory from the beginning. How could you have the hubris to tell me that we had the knowledge and the science to help us find this oil? Our cell phones were as big as cars. Now they fit in your pocket, right? Now, the same thing goes for satellite technology that can find oil and new drills that can get to places without harming the lands anywhere near what we had in the '50s and '60s and '70s.”

'Peak oil' expert confronts the challenge it poses

Dr Bentley said yesterday: “The world’s supply of conventional oil is close to peaking and may already have peaked.

“What is economically significant is the possible sharp decline once the peak has passed.

“A 3% or 4% reduction per year will quickly cause large price increases and, possibly, rationing. Any large scale switching of supply from oil to gas for things like electricity generation, transport or heating, will simply bring forward the date of the supply peak for gas.”

'Peak oil' a myth

During his era of cheap oil it is understandable that Hubbert failed to appreciate the impact that rising oil prices would have on consumption and, consequentially, on oil production. Worldwide "peak oil" is a myth stemming from the failure to recognize that a worldwide shortage of any commodity in demand results in higher prices, thereby stifling demand.

Markets misled us in runup to recession

Currently, we face enormous costs from climate destruction, energy depletion, rising economic debt and eroding civic disunity. Our markets enabled us to borrow from each of these resources. This is why our recovery must be built on increased conservation, improved energy efficiency and more renewable, local energies. These are the best choices for our personal and social development.

Since the 1980s, we have been borrowing against the future. No one cared about climate change. And no one researched peak oil production. Most economists thought the growth in global imports would be good for the U.S. economy. A growing concentration of media ownership encouraged us to consume our way to happiness. Now many are depressed and obese.

There must be a better way in the 21st century.

Iraqi oil may rival Saudi Arabia

NEW YORK (CNNMoney.com) -- Iraq's ravaged oil industry is on the verge of a major reconstruction and experts now believe that by the decade's end it could rival the world's top oil producers.

But major challenges lie ahead.

Oil falls to near $81 on reports of warmer weather

Oil prices fell to near $81 a barrel Tuesday on expectations a frigid cold spell in parts of the U.S., Europe and Asia will ease in coming weeks, weakening crude demand.

By early afternoon in Europe, benchmark crude for February delivery was down $1.16 cents to $81.36 a barrel in electronic trading on the New York Mercantile Exchange.

ANALYSIS - China's power woes give little impetus to oil prices

BEIJING (Reuters) - China's winter power supply crunch, the fourth in six years, is unlikely to trigger major oil imports like those seen five years ago.

In 2004, during the country's worst power shortage in decades, hundreds of small firms and factories in booming eastern and southern province export hubs were behind a surge in China's diesel imports as they snapped up stand-alone generators.

This time, it's the economically less developed central provinces that have been worst hit as a bitter cold snap sent residential power consumption surging, and unlike five years ago there is a surplus of generating capacity.

Oman Exports Fell 22% in Year to November on Lower Oil Prices

(Bloomberg) -- Oman’s exports in the first 11 months of 2009 fell 22 percent from a year ago as oil prices declined, the nation’s economy ministry said on its Web site.

The 2009 Drilling Rig Correction - A Retrospective

When we began to focus on the potential for an industry correction in the spring of 2008, we never anticipated that it would be as severe or as swift as it turned out to be. When the drilling rig count was in its freefall period early in 2009, we began to look for analog time periods to see if we could gauge the severity of this downturn. After comparing various historical drilling rig corrections, we settled on the 1981-1986 period as the one we wanted to model.

Second group claims Togo team attack

A second separatist group has claimed it was behind last week's deadly shooting on the Togolese football team in Angola's oil-rich enclave of Cabinda.

The attack was initially claimed by Rodrigues Mingas, head of the Forces for the Liberation of the State of Cabinda-Military Position (FLEC-PM), who lives in exile in France.

But a larger group known as the Front for the Liberation of the Enclave of Cabinda-Armed Forces of Cabinda (FLEC-FAC) has said they had opened fire on Togo's convoy on Friday, killing two of the squad.

Nigerian Gunmen Kidnap Four Shell Workers in Ambush

(Bloomberg) -- Nigerian gunmen kidnapped three Britons and a Colombian working for Royal Dutch Shell Plc during an ambush at Obehi, near the West African nation’s oil hub of Port Harcourt, police said.

“Their police escort was shot dead and the driver was shot and injured,” Rita Inoma-Abbey, a police spokeswoman, said in a telephone interview today from Port Harcourt. “We’ve sent our men after them.”

ExxonMobil makes Black Sea splash

ExxonMobil is joining a Black Sea exploration agreement with Brazilian energy company Petrobras and Turkey's state oil company TPAO.

‘Golden’ Brazil Asset May Help Devon Top $7.5 Billion Sale Plan

(Bloomberg) -- Devon Energy Corp., the biggest independent U.S. oil and natural-gas producer, may beat a target of generating as much as $7.5 billion from asset sales as Brazil tightens its grip on the oil industry, boosting the value of the company’s holdings in the country, Oppenheimer & Co. said.

Coal Price Forecast Raised at ANZ on Stronger Chinese Demand

(Bloomberg) -- Power-station coal price forecasts for this year were raised 19 percent by Australia & New Zealand Banking Group Ltd. on rising demand from China because of government stimulus measures and cold weather.

Environment at risk as public transit falls out of favor

In the war over the future of public transit in the eco-obsessed Bay Area, the biggest casualty could prove to be the environment.

India can be solar power leader: PM

NEW DELHI — Indian Prime Minister Manmohan Singh laid out ambitious plans to make his country a global leader in solar power on Monday as he launched a government initiative to boost use of the technology.

Solar can help secure India's energy independence and tackle climate change, Singh said, as well as offering new opportunities for industry in a country with a crippling shortage of power.

China scraps limits on foreign wind turbine parts

BEIJING (AFP) – China has scrapped restrictions on the use of foreign parts in wind power turbines, state media reported, as the nation seeks access to more advanced technology to meet its clean energy targets.

Migratory birds bear brunt of climate-charged weather

(PhysOrg.com) -- As global climate change fuels more frequent and intense hurricanes and droughts, migratory birds, especially those whose populations are already in decline, will bear the brunt of such climate-fueled weather, suggest a pair of new studies.

Kyoto to Copenhagen: Why UN's glacial global warming talks need overhaul

Copenhagen, Denmark – Take 45,000 participants, complex global-warming issues, and negotiators from more than 190 countries. Add a last-minute dash of presidents, premiers, and prime ministers, and what do you get?

Evidence at the recent Copenhagen climate talks that the whole process is overdue for an overhaul, according to several specialists.

Spring Bronze Weather Stripping

I had some difficulty finding a diversified source of spring bronze weatherstripping (which can last for a century). Local stores had only one size, or only plastic/rubber.

I finally found a site and bought (and partially installed) some.


I was impressed with their short strips to go around lock catches, as well as other options.

Best Hopes for Durable Weather stripping,


Human (bicycle) powered hauling


The Future is Here, just not evenly distributed,


The "Peak Oil a Myth" article requires registration.

Nevertheless, the following quotation is special:

Worldwide "peak oil" is a myth stemming from the failure to recognize that a worldwide shortage of any commodity in demand results in higher prices, thereby stifling demand.

Which is EXACTLY what peak oil leads to: higher prices, and stifled demand, because demand, by definition, cannot exceed supply!

This is the fallacy of Distinction Without a Difference.

It hides the truth in plain sight.

In regard to the "Peak Oil is a Myth" du jour articles, perhaps I should just post the Texas/North Sea case history every day (which is practically the case anyway):


In any event, if the oil industry could not bring production back to peak levels in two regions developed by private companies, using the best available technology, with virtually no restrictions on drilling, during periods of rising oil prices, why wouldn't other regions--and then the world--peak and decline in a similar manner?

Michael C. Lynch's response to this question, when I posed it to him, was to basically pretend that Texas & the North Sea, which jointly accounted for about 9% of total cumulative world oil production through 2005, don't exist. He said those are clearly areas in which he would choose not to drill.

Incidentally, in the following (early 2004) article the Saudi Oil Minister reiterated their support for the $22-$28 OPEC price band, and they made good on their promise, when they significantly increased their net oil exports in 2004 & 2005:


Mr Al-Naimi said: "Saudi Arabia continues to be committed to OPEC's $22-28 price band. There are signs that worldwide inventories have begun to build but no one really knows for sure. I do not believe there is a fissure [within Opec]. There is dialogue. Opec in general is committed to the band," he said.

But then only two years later, in early 2006, when oil prices were more than twice the upper limit of the OPEC price band, the Saudi Oil Minister complained about problems finding buyers for all of their oil, "Even their light, sweet oil." Why didn't they offer to sell another one, two or three mbpd at $28 per barrel?

In regard to the "Peak Oil is a Myth" du jour articles, perhaps I should just post the Texas/North Sea case history every day (which is practically the case anyway)

Exactly! That's why I call you a "tireless educator on the matter of declining net oil exports." In just a few more years you'll be in the same group as Bartlett (tireless educator on the matter of exponential growth) and Heinberg (tireless educator on the matter of energy and general resource depletion).


The End of Retirement

A "tireless educator on the matter of declining net oil exports." Well...I guess that's a better title than "redundant pain in the as..." Never mind.

You thaw out yet WT? Looks like another Blue Northner heading your way. I was suppose to be on a barge rig in Terrebone Ph last weekend but got delayed. Coman said the drill floor was like an ice rink. With my worn out knees it's hard enough to walk without all that mess.

I like that. I shall call myself RPA from now on.

Actually, weatherwise it looks like seasonal temps for the next few days, although I didn't escape the freeze without damage--lost an outside pipe on Sunday. When I arrived home Sunday after mapping in another billion barrel oil field at the office, my lovely bride was blissfully unaware of the fact that a busted pipe was flooding the entire area underneath our pier and beam house.

BTW, check out the item on Russian NG production down the thread. . .

A billion bbls here and a billion bbls there....pretty soon you'll be able to retire and take up plumbing.

Dare I suggest RPitA - mnemonically it's got a certain truth. Not that I'm saying there's anything wrong with repeating tat which should be repeated!

From the same CNBC peak oil hogwash Kilduff remarks

Our cell phones were as big as cars. Now they fit in your pocket, right?

and based on that blind faith in our miraculous technologies, why don't cars fit in your pocket?

Actually, early mobile phones, prior to cellular technology, would fit inside a briefcase.

I've overlooked c.1953 Lesney Co. with miraculous E.London tech savvy made cars that fit in pockets, the Matchbox.

"Our brains used to fill our skulls, now they're miniaturized and fed to us remotely from a squawking chicken box."

p.s. My kid's toy car fits in his pocket. It's the only car he'll own.

Say, don't y'all know that there is an inverse relationship between the size of cell phones and the size of oil fields? As cell phones shrink, proven reserves rise, and all new fields are larger.

Oh, and all of our children are good looking.

I think we should call the way that works the "Lake Woebegon Law of Inverse Proportion."

See how simple it is to work around peak oil?

One guy at Real Climate proposed - in all seriousness - that you could draw a correlation between anything, thus all are devoid of meaning, but especially CO2 and temps. His example was Mars bars and _____. Their consumption is increasing, resulting in, uh, a warmer planet full of plain nougat. You'd become quite hungry reading that thread!

Some commentators rose to the occasion of course. More Mars bars did result in greater emissions. Actually posting about it here will result in increased CO2 as well...now I'm getting dizzy...

This very comic was used earlier today by PZ Myers from Pharyngula to finally come around to the idea that evolution is indeed wrong! He does a good job of explaining the math.

Yes, it was a very good thread and I posted this link proving that the decrease in pirates is directly linked to global warming. Courtesy of the Church of the FSM http://www.venganza.org/about/open-letter/

But what of the recent unpleasantness off the coast of Somalia? It would appear that the number of pirates has increased, at least in that locale.

The obvious conclusion is that temperatures must be dropping proportionately, probably also locally, because of the limited extent of the increase in pirates. Given England's past reputation for piracy, and its current drop in temperature, I think we can see that the correlation holds, at least in that locale.

I hear that Texas and Wall Street are also experience local cooling. I leave it to the readers to draw their own conclusions.


Actually, Kilduff has solved the problem:

This was thigh problem with the peak oil theory from the beginning. How could you have the hubris to tell me that we had the knowledge and the science to help us find this oil? Our cell phones were as big as cars. Now they fit in your pocket, right?

All you have to do is make the barrels smaller, and there will be plenty of barrels full of oil!

Sort of like ice cream containers at the grocery store!

They'll all be the size of a pint of Ben and Jerry's one of these days (and not as good).

But it was a "thigh" problem he said. But he can't be right because I know that thighs got bigger while cell phones were shrinking.

He is either evidence-challenged or correlation-corrupted.

Exactly, and further it fails to differentiate between those things that are optional and those things that are necessary. While demand for window squeeges might fall if the price goes to high, little will happen except that more discarded rags will be saved to wash windows. Food, air, water and not optional although the form might be (beans over beef, any water over bottled water). Energy beyond food is not optional for civilization especially this industrialized civilization. Stifled demand has consequences beyond extending the plateau we are no on with oil. Stifled enough it will crash the world economy. Perhaps if it is a dramatic enough crash some oil that might have been extracted will never be extracted and thus we won't technically run out. But at that point who will care?

...demand, by definition, cannot exceed supply!

I think I might disagree with that. For instance, if demand for food exceeds supply, price will rise, but that will not diminish demand, which will still be there until sufficient people starve to death. Then demand will drop.

I don't have time to work out how that would apply to demand for oil. I think it does, though.

I still have to puzzle out exactly what that means in your context, but as I said I may disagree.

The result will be energy shortages, as documented at Energy Shortage | Worldwide Energy Shortages, of all places. These shortages mostly taking place in countries like Kenya that we Western urbans don't give much thought to.

I understand your point, but I was referring to "econo-speak," where "demand" does not mean what one would like to have, not what one needs to survive, but what one is "ready, willing, and able" to spend to get it. "Supply" is what is there to meet that demand.

And if the supply isn't there, the demand, ipso facto, cannot exceed it.

(More simply: you can't buy what ain't there.)

Great, but why are you replying? Are you and Zaphod42 one and the same? Is "mikeB" the proper name for his other head?

I figure if you're a producer and the world is undeniably shrinking in supply, you're going to send your oil where markets are most robust, short-shrifting more tenuous markets. Over at peakoil.com there have been various threads documenting fuel shortages over the years; someone should attempt to collate all that info. The locations are sometimes surprising, farmers going without diesel near Jeddah in the KSA was an eye-opener. They're the Saudi Arabia of oil and they can't meet domestic demand! Or rather it's more profitable to export it.

Link up top: 'Peak oil' a myth (The link can be viewed only if you disable scripts.)

They are changing the rules of the game. It is no longer "Peak Oil" but "Plateau Oil".

All of these responses to higher oil prices push "peak oil" further into the future. Thus, "peak oil" is like the desert mirage that recedes as one approaches it...

Today, in the context of world petroleum production and factoring in rising oil prices, "peak oil" becomes "plateau oil." There will be no abrupt peaking of world oil production followed by a decline as postulated by Hubbert. Instead, there will be an extended period when oil continues to be available at "prevailing prices." Over time, prevailing prices will fluctuate along a rising trend line, thereby prolonging "plateau oil."

Non-OPEC oil peaked, or plateaued if you will, in 2004. Adjusted for inflation oil prices in 2004 averaged $42.97. The average price has risen ever since. The same adjusted for inflation numbers for 2008 averaged $91.35, over twice as much. Yet non-OPEC oil production fell between 2004 and 2008 by 800 thousand barrels per day.

Of course you could say that non-OPEC production has been on a five year plateau ever since, and it has. However it is a descending plateau that has descended even though prices have risen ever year.

But really this is all beside the point. Peak oil is peak oil even if the peak lasts for a decade it is still peak oil. But the dumbest part of their argument is that prices will fluctuate along a rising trend line. Non-OPEC, which procuces 58 percent of the world's oil, has been fluctuating along a declining trend line. And, I expect OPEC to follow a similar pattern though at present they do have between one and two mb/d reserve capacity.

Ron P.

Edit: Mike, I was typing this post while you were posting yours. Had I known I would have posted it as a reply. However you hit the nail on the head, it is Distinction Without a Difference. They are simply calling "Peak Oil" by another name and pretending it is something totally different. It is not. Plateau Oil is the exact same thing as "Peak Oil". A longer peak is still peak!

But the dumbest part of their argument is that prices will fluctuate along a rising trend line. Non-OPEC, which procuces 58 percent of the world's oil, has been fluctuating along a declining trend line.

Ron, they said prices will rise, not production.

I suppose we could call it a "butte," and it would still be the same thing. (Would it be Butte Oil, or Oil Butte?) A rose by any other name...

Some wanted to include NGL's, Ethanol, refinery gain, GTL, CTL, etc. in oil production stats.

The U.S. crude production is up YOY, the Saudi production decline is artificial as they shut-in production because of a glut and a fall of prices to the $30-40 per barrel range. Russian production reached 10 MBOD; something peakers would not have admitted possible some years ago. OPEC has millions of barrels of oil capacity shut. Canadian tar sands to oil projects were delayed due to the glut of oil. Deep sea drilling rig orders were canceled in masse.

You can spin a statistic any way you like.

I saw Kilduff on Kudlow.

Isnt the 30,000' Wilcox discovery announced by McMoran in shallow water he touts as salvation natural gas??

This guy wouldn't know a barrel of oil if he was swimming in it.

It would be some weird oil at that depth.


People like Kilduff miss a subtle point. It is true our technology is improving for oil and gas discovery and extraction, but in practice this is only making an impact on ~5 T of our 20 T in natural gas and ~10-20 mbpd on global 80+mbpd. If we find oil/gas 20% cheaper on 20% of our production but the other 80% is 10% more costly (including dry holes), we are losing ground and fast. To extrapolate the latest and greatest E&P tech on the entire BTU production is a frequent mistake. Technology is winning the skirmishes against depletion (on the best locations) but is losing the war (on all locations/production).

Not to mention the extant global debt put into place to pay for energy and consumption, making future energy more costly either a)due to higher debt service or b)due to currency reform.

Peak Oil was 2005 C+C. (and 7/2008 on monthly basis). I wonder what year Kilduff realize/admit he missed some things about the Peak Oil argument?

I wonder what year Kilduff realize/admit he missed some things about the Peak Oil argument?

It's not beyond the realm of possibility that peaking will never be acknowledged.

Declining flow rates could always be blamed on financial crises, or "demand destruction," or "lack of investment," or hurricanes, or....

Confusing proximate with ultimate causes seems be the default mode.

I agree.

And I'll add, "greedy Arabs," "greedy Chinese," "socialism," "Big Oil monopolies," "eco-nazi treehuggers," "incompetent NOCs"...

Catton points out in Overshoot that it was the same back when he wrote the book. The number of people who will understand the ecological/geological basis of our predicament will always likely remain relatively small.

But not tiny. The number of people who understand climate change is quite large.

I wonder where climate change would be today if not for Al Gore and An Inconvenient Truth. As that article I just posted up top points out, we live in a cult of celebrity, where Sarah Palin is considered as qualified to comment on climate change as James Hansen.

Our best bet for raising awareness of peak oil is probably to get someone like Michael Moore to make a movie about it.

Except I don't think he will. He's too savvy, and probably recognizes peak oil as too depressing. It's worth a chapter in his book, but probably not a movie.

Our best bet for raising awareness of peak oil is probably to get someone like Michael Moore to make a movie about it.

Possibly. I know many people who worked their tails off to expand the conversation for climate change to the point it is now. If you ask them what it was like twenty years ago they will describe exactly what we are experiencing with peak oil now. Plus, it's easy to forget that a lot of general environmental awareness had to occur before people would even be open to seeing An Inconvenient Truth.

I have no illusion that the whole of our species will understand what's happening to us but I think it's quite possible we could get to 25% or even maybe (crosses fingers) 50%. Some subgroups will never see it, but such is how it works, it seems.

"Peak Oil" is a burned societal issue. The mnemonic is culturally scorched. If mass awareness would/could result in positive change it will have to first be framed as something else.

Why do you say that, Nate? Wouldn't some of us in our more pessimistic moments have said the same thing about "global warming?"

Yup, and "global warming" has already been scorched enough to yield us "climate change" which is now getting scorched as well. And none of the above carries enough social weight to be a tool of meaningful change.

Right along with "manufactured doubt" must be "terminology obfuscation" as tools to affect social awareness.

As I've posted before, the Pentagon doesn't consider PO a myth, or climate change for that matter. The Joint Operational Environmet report from 2008 (JOE 2008) seems to consider both high on their list of probabilities:


Perhaps if we could get more right-wing pro-military types to read this "myth", at least some would take Peak Oil as more than alarmist dribble. The PO crowd has a marketing problem.

Before Christmas, I participated in a symposium at the US Naval War College (graduate school for the US Navy). They were interested in what scenarios they should model in their "war games". I talked about peak oil and the possible impacts on the financial system and international trade. They seemed quite interested. They were also interested in reading what Admiral Hyman Rickover had to say, back in 1957.

I understand that. But all those terms are used interchangeably and are being used at inter-national levels.

This was just a dream a couple decades back.

Yes, progress is slow and it won't be enough, but let's also recognize how much distance has actually been covered.

I think part of our problem is that we have been sending the wrong message out about what peak oil is. We have focused on a decline that perhaps can be offset with renewables and increased efficiency, when the real #1 impact is likely financial disruption and recession. In many ways, it is a double problem, but people don't understand that.

What if there was no message that would work?

What if, as Greer points out, we are dealing with a predicament (unsolvable situations that must be adapted to) rather than problems (that have solutions)?

Climate change is in the same situation. To stop the impacts of either climate change or peak oil requires a wholesale change in how we run the world. At one point I thought that might be possible, but I can see now that there was much I was missing.

Here is what I wrote on the World Changing site last year:

"I once thought the way you do Alex but no more. Here is what I wrote to some colleagues recently:

"Not too long ago I thought I could bring sustainability to the business community but the truth is that I just didn't understand all the forces at work.
I didn't understand the inertia in the system...or even how colossal the system really is.
I didn't understand that the drive for profit would mean businesses would never willingly accept the end of growth.
I didn't understand that politicians must create growth to keep unemployment down and thus civil unrest too (and to get re-elected).
I didn't understand how money was made and the fraud that is the fractional reserve banking system (yes, I'm reading 'The Case Against the Fed;' can you tell?).

I could go on but won't. I was frustrated and sad, especially to see nature so plundered as the machine grinds on."

So, in my new view, this game was never really winnable by the time I got into it. It took me a long time to get to that point because every fiber rebelled against that notion. Say that the game is un-winnable to certain people and watch the sparks fly.

I think a more constructive context to work within now is either the Transition model (proactively design the low energy future) or like those in DMAT's (Disaster Medical Assistance Teams) who understand that they go to work only after the disaster has struck.

Unfortunately aangel I think your appraisal of the situation is all too correct. Had folks gotten behind Jimmy Carter's proposal way back when then maybe, just maybe, we would have had the time to generate something closer to a solution then a reaction. And I also think we might be past the point of developing rational reactions. When the truth becomes undeniable to the masses I suspect we'll only have very distasteful reactions to offer. And if I didn't have an 8 yo daughter I wouldn't loose much sleep over this prospect. As a society we're going to reap what we have sown. We've prospered this long by being one of the toughest (and greediest) kids on the block. Soon we may not be the toughest nor the most hungry. And it's difficult to not imagine that turf battle getting very ugly.

Rocky, you're spot on! Makes you want to cry, doesn't it.

Strange species, homo sapiens. Do you suppose they'll be missed?

I agree with the predicament viewpoint - it is now about mitigation and coping.


I have been looking for a good recent book on finance and banking accessible to the well informed lay person.

I have been reading your comments here and I am seriously impressed with your thinking and willing to bet my money on your opinion of this book.

Is this "The Case Against the Fed " the book I'm looking for?

Have you read another that might be better in terms of providing historical background?

Thanks in advance.

Hi, ofm, and thanks for the compliment.

The Case Against the Fed does a very good job with the history portion and I learned a lot from it. I have some quibbles with the tone of the book in places, but it wasn't so bad that I wouldn't recommend the book.

He has a longer book that goes into more detail but I haven't read it and can't offer an opinion:

Ron Paul has a book called "End the Fed" that I might pick up to see if there is anything new in it versus Rothbard's thinking.

I think part of our problem is that we have been sending the wrong message

I think the bigger problem is that PO (or any LTG argument) is deeply theatening to the American free market capitalist model and its many defenders. Humans are first and foremost political animals, analysis and problem solving come a distant second. So destroying the messengers credibility is the reflexive response.

Well, to give some of us a little credit, the impact of financial disruption and recession was not at all clear until it hit last fall. At least to engineers like me, who aren't immersed in finance. There've been a lot of posts on TOD connecting the dots between oil, energy, EROEI, fiat currency, and growth, more in the last year than before.

Maybe it just takes a personal financial hit to see in your own life that the extra immediate cost to improve efficiency isn't going to be affordable, so the long term savings won't happen either. Then scale it up ...

This is a good point. Show people a problem that, if not addressed, means losing arable land in some backwater country, or slightly warmer winters, and most won't care. But tell them that the problem threatens their money (lose their beach house, for example), and you'll get a response.

I started thinking that maybe the new movie Avatar is trying to fill the cultural need to come to terms with insatiable resource depletion. In Avatar it seems like the evil ones are the ones who are usually heros....the US military. This is quite the subversive movie. yet probably many people in the military who see it would only have the same reaction that others are having when they see it.....depression and regret about the current way the world looks.

It is a brilliant idea, usually all the technology and advanced hardware signals the brilliant power of the protagonist (US military here). But suddenly that`s all changed and it is threatening and demonic and nature is the unbelievable wonder.

Looking back on this time, probably Avatar and Farmville will be credited with getting the PO message out in a simple completely understandable way better than many academics, writers, bloggers, etc. ever could and that is not a negative reflection on academics, etc (I toil in academia myself) but just a realistic assessment. Even my own students aren`t particularly interested in PO.

Most people cannot get this message through articles and charts; they need to get it through a simple story.

I am amazed how cultures come up with a story to help them process information need to reach the next step.

pi -- maybe I missed it but there were no active US military depicted in the movie. There were mercenaries (some who might have been ex-military) who were contracted by the corporation. In fact I don't recall any depiction of the US or any other gov't involved in the ops. All the horrors were perpetuated by an amoral corporation. I doubt that was accidental on the director's part. As far as I could tell the closest specifically acknowledged rep of the US military was the crippled former Marine. I've read that some took the movie as an anti-war statement. Granted war is always to be avoided if possible but when their world was threaten the indigenous folks declared war. And then waged it without mercy. Except at the end. They allowed the survivors to leave the planet. I would have preferred to see them take the philosophy credited to a N. Viet officer when asked what to do with the French POW's: 'Kill them all and they'll send no more". But the director's approach does now leave room for the sequel I suppose.

Our best bet for raising awareness of peak oil is probably to get someone like Michael Moore to make a movie about it.

There are already several films on Peak Oil. Crude Awakening is quite good and it's been out there since 2007. Then too, Ruppert's Collapse might fit the bill, if it ever hits the main stream. Most big time films are pushed out to many screens simultaneously, as the major studios have distribution systems available to promote their products rapidly and thus boost the media buzz to a maximum. When the sheeple hear of a "big" new film, the natural reaction is to want to see it and the promoters take advantage of that.

Maybe what's needed is a new film with a few well known "stars", sort of a re-make of Road Warrior. Maybe the writers were trying to get the point across after MadMax, but that effort was rather crushed by the time Beyond Thunderdome appeared, since Gibson had acquired star power by then. Also, Beyond Thunderdome was so far from the typical suburban/urban reality that the impression may have been more like a typical science fiction flick, which was enjoyed for it's entertainment value without any lingering message for the general public...

E. Swanson

I don't think any of the peak oil movies yet made is particularly good for reaching a mainstream audience. Moore has that knack. Plus, he's enough of a celebrity that people would go see it for that reason alone. That was my point, really - celebrity matters.

I don't think Ruppert's Collapse will work. It's actually not Ruppert's Collapse, it's Chris Smith's Collapse. And Smith has said the title refers not to the collapse of civilization, but to the collapse of Ruppert's life - due to his obsession with peak oil.

Probably the best hope we have is for Bruce Willis to make another movie. Something like "Die Hard...Die Oily". He did, after all, put the fear of asteroids in folks.

Lets see, a script with maybe a combination of Michael Douglas in Falling Down with Escape from New York and touch of social collapse such as Lord of the Flies mixed with the plucky back to nature survivalism of Robinson Crusoe, set in some medium sized derelict town in Michigan presently undergoing "urban renewal", perhaps Flint or Pontiac or even Detroit.

Lets pitch it to Washington as a Shovel Ready Stimulus Project. The actors could simply play out their lives in a Survivor setting, only it's for real. Only a few people need apply for the acting slots, since everyone else would quickly be done in by the roving hoards of the hungry and cold Trolls living under the bridges. The pay? Food and a little extra gas for the car...

EDIT: I forgot, there's no problem, The economists know how to fix everything...

E. Swanson

It would have to be a story that people could relate to - not one about peak oil but one where peak oil is just an obvious part of the plot, and where the story can help people to understand what PO is and some of the effects that follow. A stealth education if you will, which would allow people to begin seeing it in their own lives.

It would have to not only be a peak oil story but one with some positive action plan - otherwise people would be catatonic/violent/steep discount rated zombies. I think a culture change message that make peoples lives more fulfilling with fewer externalities that oh by the way would also be a good strategy for a world with less energy might have traction.

No, my point was that the audience should not realize that they have understood and accepted PO. The movie is a stealth delivery system for that little chunk of knowledge. But it is planted and after some germination time they become much more accepting of the idea.

I agree with that. (and wonder if similar dynamic wasn't at play in "Avatar")

Could be, but I didn't see anything stealthy about the message in "Avatar". The plot sort of hit you upside the head with a 2x4. Beautiful, tree-hugging natives (not exactly peaceful, tho) and evil soldiers with bulldozers.

That aside, it was a pretty cool movie. IMAX 3-D is the way to go.

PS And I keep wondering how they power all the gear in these movies... evil TOD, to take away the suspension of disbelief!

You missed Cameron's stealthy message: unsustainable civilization pitted against sustainable civilization.

Take a good guess at what unbreathable gas is in Pandora's atmosphere. There are clues all through out the move, but it was never directly stated.

Read the definition of Unobtainium. It does not mean a substance that is unobtainable because the Navi chase the miners away.

Those "soldiers" are ex-soldiers, mercenaries hired by a mining corporation to provide security.

The technology exists to repair a vet's spinal cord, but the government will not pay for it in their messed up economy.

What did Moat mean when she mused to Jake about seeing if he could be cured of his insanity?

Jake told Eywa that there was no green left on his home planet (I do not recall the planet being identified as Earth), the skypeople had killed their mother (the environment needed to sustain life) and they would eventually do the same to Pandora.

The aliens were chased back to their dying world.

The movie can easily be viewed as a technological civilization against a primitive one, or as an evil mining corporation out to get the aborigine's resources at any cost, but there is another subtle story, a parable for our times, being related.

Written by waterplanner:
And I keep wondering how they power all the gear in these movies....

A microgram of unobtainium costing 2 cents for life.

You're right -- I heard all of that, except the bit about Jake being cured of his insanity. I must have been too busy ducking the stuff flying out of the screen at me. :-)

To me it was Universal Soldier crossed with The Last Rainforest convolved with Starship Troopers.

The Vatican says to not be fooled by Avatar's message.

The pope explained in the message that while many experience tranquillity and peace when coming into contact with nature, a correct relationship between man and the environment should not lead to "absolutizing nature" or "considering it more important than the human person."

I'm shocked!

The Catholic church's response is the same as with science in the time of Galileo Galilei: it fears the loss of power.

Written by The Vatican:
"So much stupefying, enchanting technology, but few genuine emotions," said L'Osservatore in one of three articles devoted to "Avatar" in its Sunday editions.

"Everything is reduced to an overly simple anti-imperialistic and anti-militaristic parable," it said.

These comments reveal the subtle, clever nature of the movie because the Vatican misunderstands the stealth ecological message that condemns human industrial, technological, and consumptive civilization. I suspect the Vatican thinks only God is more important than humans which relegates the importance of the ecosystem to parity with or lesser than a human. Since it is antiabortion, it probably views human life more important. This arrogant human bias suggests the Vatican ultimately thinks humans can survive without a functioning ecosystem. If humans must respect the ecosystem as a deity to prevent its unsustainable exploitation, then the church stands immobile as an obstacle to a solution to excessive resource consumption despite their past eco-friendly rhetoric. One more barrier to overcome....

A series might work: "Little House In The Big Collapse".

It would be relatively simple to crank out a low-budget depiction of a Greer-esque future society. Take a run-down suburban tract, add veggie gardens, dimly lit interior shots, everything with cracks in it, patches on clothes. The end of the movie Threads would be close to the mark. Mostly it would be challenging to erase hallmarks of modern comfort, fat in body weight for instance.

Dumb continuity errors were a big problem with that TV show Jericho. So the town is almost out of food yet people are somehow managing to have their hair styled?

I went to see "The Road" the other night. Very well done, but BLEAK. Man, talk about Doomerism! Whatever Peak Oil has in store for us, it will never be as bad as the world depicted in that film.

Viggo Mortensen gives a fine performance, and the attention to detail is remarkable. Everyone is filthy.

Oddly, I found it liberating in a strange way -- after years of obsessing about PO and the financial crisis, after walking out of the theater I could again appreciate the abundance, joy and life all around me. The film is that powerful.

Dumb continuity errors were a big problem with that TV show Jericho. So the town is almost out of food yet people are somehow managing to have their hair styled?

I couldn't even watch more than the first few episodes, it was so bad. The biggest howler, the one that had me on the floor laughing and then giving up on the show for good, was when they had the corn harvest, and everyone went out into the still green corn fields to pick the plump ears and store them in rubbermaid containers. Not to mention the very idea of raising corn like that in western Kansas. The mountain ranges there didn't do much for me, either. Nor the fallout that remained radioactive for only 12 hours. And I could go on and on.

The problem with the idea of having Hollywood produce something is that it would be Hollywood that would be producing it.

I have read or started reading a dozen or so doomer type novels.Every single one STINKS in terms of presenting anything like a realistic picture of a post crash life style or environment.

If any one here has read something that passes the smell test of realism I would like to hear about it.

I don't go to movies based on books any more since I have never seen one that lives up to the book, and seldom go at all.

Incidentally "The Road" is a truly great book but it is a psychological study and has nothing to say in a material sense.. It is utterly and totally irrevelant in terms of providing any insights into life after a crash -unless the reader is so niave as to need to be told life will be tough.
My estimation of the author is that he is an incredible writer but that he knows nothing whatsover about the physical world as evidenced by this book.I have not read any of his other work.

The spare description of the degraded environment is totally unrealistic in every single respect and absolutely nothing in the book explains how such a state of affairs could come to pass.

While it is not stated in the movie either, all signs point to an asteroid strike: Sunlight blotted out resulting in the death of all plant and animal life. Nothing to eat. Subsequent and persistent earthquakes. Massive die-off. About as bad as it can get.

By not revealing the incident, or having to write it into the plot, the story can focus on the human drama of the aftermath without all of the cliches associated with most disaster movies. You might want to see this one.

Hey I hear an asteroid is going to pass within 80,000 miles of the Earth this morning! Great.

(PS - Do NOT bring kids to see this movie.)

I read the book and thought it was tedious, pointless, fairly predictable, and had significant plot flaws. If everything dies then everything will be dead. There is nothing to be learned from examining this, and I found no drama in it, only pointless focus on misery and death.

I am not spending any effort preparing for asteroid strikes or whatnot, as there is nothing one could do to prepare for such an event. I'd rather examine what our world might actually look like, and The Road is not it. I wish I had not spent the money and time reading it, and would certainly not waste my time watching it.

Oh well, to each his own. The people in the showing that I attended seemed moved by it, as I was. However, it is not a "prepper" movie or a survival tutorial. I won't say any more as I don't want to be a spoiler. I did pick up the book once but did not buy it as the style in which the book was written did not appeal to me.

The only novelized survival manual I've read is the book "Patriots - Surviving the Coming Collapse" by James Wesley, Rawles. It has a lot of detail about what one might wish to stash in one's bunker. As for the other aspects of the book, well, that's a matter of personal taste.

ofm: You might try Wm. Forstchen's One Second After. It is about the aftermath of an emp attack. I thought that Bill (we know each other and are good friends) was actually pretty realistic. A bit optimistic about how people in my town (yes, it is actually set in my home town, and some of the characters in the book are real people I actually know, which made for a really spooky reading experience) pull together, and there are a few things I would have preferred were a little different, but those are just minor quibbles.

Oh no. Infact I think Gore - while being a good spokesman - has inadvertently politicized it (atleast has become the focal point of politicized attack). M Moore is even more poisonous in that sense.

May be someone not seen as a representative of either political parties would be a good spokesperson. Unless we can get both Gore & Cheney to issue joint statements ;-)

I don't think it's a bad thing, to be politicized. It's the only way they'll talk about it at all.

We need MSM Peak Oil Bingo cards. We could add in few economic terms too. "Nobody could have foreseen", "Unexpectedly lower", and "Perfect storm".

See my note up the thread about the Saudis complaining of a lack of buyers for $65 oil, only two years after they pledged unyielding support for $22 to $28 oil.

“Well if we do it will be very expensive, Larry,” Kilduff said. “And I have been opponent of the peak oil theory my entire career, not for the least of which reasons was that this morning's announcement from McMoRan Exploration and several other companies who might have made the oil find of a decade in shallow Gulf waters. And it's a real game-changer for the companies involved and it’s in a neighborhood that is going to be one of the biggest finds in decades.”

Can we conclude that his entire career started sometime this morning after the McMoron announcement. Sure sounds like it.

Again, my favorite TFD (Technological Fairy Dust) article from 2004:

Oman's Oil Yield Long in Decline, Shell Data Show

The Royal Dutch/Shell Group's oil production in Oman has been declining for years, belying the company's optimistic reports and raising doubts about a vital question in the Middle East: whether new technology can extend the life of huge but mature oil fields.

Internal company documents and technical papers show that the Yibal field, Oman's largest, began to decline rapidly in 1997. Yet Sir Philip Watts, Shell's former chairman, said in an upbeat public report in 2000 that "major advances in drilling" were enabling the company "to extract more from such mature fields." The internal Shell documents suggest that the figure for proven oil reserves in Oman was mistakenly increased in 2000, resulting in a 40 percent overstatement.

A key issue is to what extent that TFD: (1) Increases ultimate recovery or (2) Increases the production rate, by consuming remaining reserves at a faster rate. As I noted on the Iraq thread, even if it is true that Iraq can postpone the acknowledgement of Peak Oil by a few years, we do it by increasing the rate of depletion of our remaining conventional crude oil reserves.

And then there is the Net Export elephant in the room.

If Sam uses his most optimistic production scenario for the (2005) top five net oil exporters and his lowest projected rate of increase in consumption, the net result is that he projects that the top five, in the 2005 to 2015 time frame are depleting their post-2005 CNOE (Cumulative Net Oil Exports) at about 9%/year.

Since these countries account for about half of total world net oil exports, IMO a plausible estimate for the global post-2005 CNOE depletion rate is 5% to 7% per year, which in turn suggests that in 2006, 2007, 2008 and 2009 world importers have already burned through 20% to 25% of the total remaining post-2005 supply of global net oil exports. But of course, the key question facing us is who will be the new judge on American Idol?

Pay no attention to that 9ft. enraged grizzly bear running toward you! The technology will exist to make him fit in your pocket tomorrow!

I have searched the web for data on this new discovery. Almost all say "hydrocarbons" were found. The closest thing to saying there might be oil was this:
McMoRan, Energy XXI jump on Gulf of Mexico find

The companies said Davy Jones well drilled to a depth of 28,263 feet and met 135 net feet of hydrocarbon bearing sands, which could contain a mixture of crude oil and natural gas. The exact breakdown of the resource has not yet been determined.

They have no idea how much gas may be down there. The "hydrocarbon" bearing sands are 135 feet thick but there is no mention of how long or wide the sands may be. At any rate I think the term "hydrocarbons" are just a way of saying; Natural gas with a small outside hope for crude oil." But at over 28 thousand feet, it is doubtful.

Ron P.

Peak Oil was 2005 C+C. (and 7/2008 on monthly basis). I wonder what year Kilduff realize/admit he missed some things about the Peak Oil argument?

Peak Oil for the U.S. was 40 years ago, but there are still people who do not admit it. I wonder how they rationalize their position. Of course they blame the hippies :) But that is hardly a comprehensive basis for said position.

How to explain peak oil to everybody (even Paris Hilton)
Target your peak oil message to your audience
Posted by Sharon Astyk (Guest Contributor) at 2:23 PM on 22 May 2008

If the person is an Aging Hippie:

What to say: "You were right about everything. Absolutely everything. Growing your own food. Renewable energy. The economy. Drugs. How sexy greying ponytails are. Not trusting old people ... oh wait ..." Well, almost everything.

What to suggest: Stop looking so smug.


I wonder how they rationalize their position

Back in the middle 1970's I thought that it was pretty smart of the U.S. to stop drillin' and drainin' our oil and let the Saudis and whoever else could extract their oil cheaper sell it cheaper while we conserved our own.

Today I think that the markets and environmentalism may have done some of that inadvertently. But now I am pessimistic that, even if some meager amounts do appear, we aren't capable of using it wisely.

That's correct FF. They discovered a NG reservoir just below 28,000' in 20' of water off the La. coast. All I've seen is estimates from McMoRan's partner. They tossed out 2 to 6 trillion cf of NG but you have to take that number as very tentative. Will take a few more wells to get a any reliable estimate. And completing/producing a well at such a depth can't be taken for granted either. The well was originally drilled by ExxonMobil but they stopped to soon. McMoRan re-enetered the existing casing and drilled deeper.

And correct Ron: won't be any crude oil at this depth/temperature. But there may be condensate. Whether that yield is 5 bbl/million cf or 200 bbls/million cf won't be known until they flow test it.

won't be any crude oil at this depth/temperature.

how 'bout the deepwater gom ? chevron claims they have found what they have called oil at similar depths. jacks, etal.

That's the odd and surprising thing about the DW elwood: a much lower temp gradient then you would project. Those who understand such matters tell me it has to do with the big salt masses in the DW. I'm told they tend to act like a radiator and keeps the sediment cooler. There's also a low temp gradient along a portion of the La coastline also. It's the result of a very rapid burial of sediments. I don't think the McMoRan is in that area but not 100% sure. Hopefully they get a flow test soon and offer an answer. But a little inside bird told me that they think it will be NGL's.

Those who understand such matters tell me it has to do with the big salt masses in the DW. I'm told they tend to act like a radiator and keeps the sediment cooler.

If temperatures were in equilibrium then gradients would be inversly proportional to conductivity. So if salt is a better thermal conductor than rock it could have lower the gradient. And we know if you get enough salt together under pressure if flows -kinda like rock in a glacier, and that would carry heat around too.

First of all, Chevron announced it as "Barrels of oil equivalents", so what percentage is gas, we don't know. Also, the announcement was right before the Senate was to vote on offshore oil development...

As to salt, remember it only has about half the density of rock, therefore, 10,000 feet of salt is only equivalent to 5,000 feet of stone, in terms of how much pressure and heat is involved.

in consolidated rock,pore pressure is dependent on the fluids contained therein, mostly water. only where geopressured (rock column supported by pore pressure) does the density of overlying rock come into play.

if the rock column caused pore pressure, the pore pressure would not deplete.

a normal gradient is the gradient of a water column, ~ 0.43 psi/ft depth.

The announcement I saw said "2 trillion to 6 trillion cubic feet of natural gas". It also said 20,000 acres, and that it would take "at least 10 wells at a cost of $150 million to $175 million each to bring the field into production".

So it is natural gas. According to the EIA, 1.87 trillion cubic feet of natural gas was marketed in the U.S. in October 2009 (the latest month they have numbers for). So this discovery will supply the U.S. for one to three months. I'm glad we have such discoveries every month or two (we do, don't we?), because this is probably real gas reserves, unlike shale gas, where you don't know how much you've got until the well stops flowing.

Of course, one well doesn't exactly prove 20,000 acres, and I suspect ten wells are not enough to drain 20,000 acres.

I'm sure this discovery will make some money for the companies involved, if they can raise a couple of billion dollars to drill the development wells, and if the Federal Government doesn't impose special taxes to rake off any profit.

But it doesn't make much difference to the overall picture.

True Ird. Won't change PO (or PNG for that matter). But still good for the country: The gov't will get $1 billion royalty (1/6) per trillion cf produced (@$6/mcf). And that also reduces our import imbalance by $6 billion/TCF. And the shareholders of the companies make money (which they'll pay taxes on) and the companies will have more money to pay salaries and drill more wells. And the companies McMoRan pays to drill all those wells (if they really do drill that many) will have $1 billion+ worth of income which they'll pay taxes on as well as pay more salaries for a lot of folks in S La. who are sitting on unemployment right now.

All in all very good news. But no salvation for sure.

The gov't will get $1 billion royalty (1/6) per trillion cf produced (@$6/mcf).

That should buy lots of good weaponry. After all, who really needs repaired infrastructure, a new energy system and universal healthcare?

aangle -- Federal mineral royalty income 2001-09 = $100 billion. You tax $'s at work.

Looks like all that money is well spent. I'm not sure but I think this story says we are winning...NOT.


"Here is a shocking statistic that you won't hear in most western news media: over the past nine years, more US military personnel have taken their own lives than have died in action in either the wars in Iraq or Afghanistan."

"The US Department of Veteran Affairs calculates that over 6,000 former service personnel commit suicide every year."

Those nasty Al Queda have figured out how to get us to fight for them. Jihad American style.

Money well spent? We're still spending away my friend.


Let’s put that in proper perspective: The US Military population is about 1.5 million with 330 suicides per year that is a rate of 22 per 100,000. The US male suicide rate is 17.7 in 2005 per wiki. The US Military suicide rate is about equal to the male rate for most of Europe.


What % is USA and allies (NATO, Japan, S. Korea, Taiwan, Israel, KSA, Kuwait, Iraq ?, Karzai Afghanistan) ?

I heard we outspent everyone else 3:1.


McMoRan Exploration Co. home page has a .pdf on the find.

Marsh Island is in the center of Louisiana's GOM coastline, the prospect is very close to the coast, hence the odd description of it as a shallow well; at 20 ft of water that's true, but then there's the 28,263 feet to the pay zone.

Geothermal Gradients and Subsurface Temperatures in the Northern Gulf of Mexico, by Joseph Forrest1, Ettore Marcucci and Paul Scott, #30048 (2007). Marsh Island forms the boundaries for Vermillion and Cote Blanche bays on the LA coast. Looking at the temp gradient maps here the 300F temps are hit at around 17-21k ft, so this isn't oil by any stretch.

elwood -- take a look at KLR's Figure 8. It shows that DW temp anomaly very clearly.

FYI for all the folks that might wonder why they chose 300 degrees as a benchmark: once you drill a well you have to run electronic tools down the hole to see exactly what you've found. At 300 degrees you're approaching temps where this much of this equipment won't function. There are special tools (HTHP: High Temp - High Pressure) that can handle 300+ degrees but only to a point.

Most wireline tools are tested to 350F after that they require special tools with cooling systems or thermos containers for the electronics.

When you pull the electronics from the housing they may look like BBQ.and the customer eats the cost of the tool.

So true chip. Burned up a triple combo ealier this year and it costs us $350,000. And that was the insured cost. Even worse it was on a dry hole. Double ouch!

A dry hole! How is that possible? I keep reading about all this new technology that insures that there will be no more dry holes. ;-)

Seriously, I did think the frequency of dry holes had been dramatically reduced. Is that not the case?

Ron P.

There was that story the other day about XOM's Failure Rate. NB, this link isn't the original story. Surprising news, EIA data suggests a much better track record for the industry as a whole, in the US at least. Perhaps that's the problem, prospects are lower in less mature basins for some reason.

Yes...a DRY HOLE!!!. Actually it was one of the weakest prospects I've seen in quite a while. I was just one of the consultants involved in drilling the well. Wasn't my company. I would have fired any manager who would approve such a well. Not only did they spend $23 million to drill a well that should have only cost $8 million they took some chances along the way that might have hurt/killed a few of us.

They did have 3d seis but didn't have one of the key seismic components. Good 3d seis (not all 3d's are created equal) interpreted by good prospect generators (not all generators are created equal) has greatly increased the probability of success. Depending on what geologic trend you're working it can run up as high as 80%. Tougher trends more like 50%. But that's a lot better than the bad old days of 10 -15% success rate. In fact, we won't even review a prospect unless it has 3d control. And even then we tear it apart looking for flaws. So if you use good 3d and do good geology along with it you can find oil/NG along the Gulf Coast much easier now than ever before. But there just aren't that many fields left to find. Right now we're focused on deep (16,000' - 18,000') reservoirs holding NG + NGL's. These are typical of the plays left. Without the 3d edge the success rate would probably be less than 20%. And that would only be if you could talk someone into drilling such a prospect. With good 3d interpreted by one of the best (my geophysicist) we may run a 50 to 70% success rate. Just as important we have very little competition now due to capital scarcity in the oil patch. We're buying drill-ready deals that the generators have spent tens of millions of $'s on 3d and many years putting them together. I'm not sure how much longer we'll hold this fox in the hen house position but it looks good for at least another year.

ROCKMAN your statement here is important.

We're buying drill-ready deals that the generators have spent tens of millions of $'s on 3d and many years putting them together. I'm not sure how much longer we'll hold this fox in the hen house position but it looks good for at least another year.

I believe this economic situation is very important for the US's production profile. Basically the overall prospect may have been marginally profitable or at a loss however because they are selling at a loss then you may make money.

And its a loss even if you buy at cost because the money was invested over years and never payed a return at all. I suspect most of these deals go at a loss.

Thus they effectively offer you a subsidy making your operation technically profitable. Without this cascade of losses and sales many NG/Oil prospects in the US probably would not get drilled or not any time soon.

Obviously price crashes simply add momentum to the mess giving he survivors years of prospects and even partially developed fields to work with.

Any way I think its and important factor thats often overlooked and works as and effective subsidy.

That sounds an awful lot like the situation for Texas in the 30s, from what I've read. A lot of independents folded, a great amount of consolidation and streamlining. Main source here is the book Wildcatters. It helped that roughnecks could be found who would literally work for beans. The anecdote about a well being plugged with smashed up pallets and sawdust was striking as well.

Early 80s you had a drilling boom too. What is with these economic shakeouts that makes people want to punch a bunch of holes in the ground?

Yep its been going on for a long time. The boom bust aspect of US oil production has to my knowledge not been well researched.

As the oil exists regardless of the financial games each bust subsidizes the next boom by have delineated more assets and marketed down the costs as companies fold.

Its probably the reason why US oil production was aggressively perused despite cheaper alternatives.
The steady stream of losses coupled with real value i.e more was learned about the oil field eventually resulted in profitable production if you ignore regaining all the losses.

Obviously I question the real profitability of US oil production over the longer term say since 1965 since one would have to not only include the money lost but also the profits esp vs other investments.

Its the interesting nature of capitalism that losses are marked down on par i.e if you invest 100 dollars in a scheme to make 200 dollars and it fails your losses are marked to 100 dollars. Not to say a safer investment of say 100 to 110 dollars. The accounting methods we use for losses tends to naturally underestimate the real loss. And that does not even touch on malivestment.

For example US oil production probably should have really shut down some point post peak as cheap OPEC oil came online ans should have only resumed ad a much later date once prices had risen much higher.

Little US oil should have been produced until say oil went over 40 a barrel or something like that eventually providing the highest return. Basically what I'm trying to say is all oil should theoretically have been produced at the same profit margin so if you have oil that costs 2 dollars to produce and the profit margin was 10 then 3 dollar cost oil would not be produced until costs had equalized regardless of profit margin.

Obviously thats a artificial construct but its at least a way to think about accounting for a finite resources decades into the future. What interesting is you get maximum profit plus maximum efficiency of use with this scheme as all the 2 dollar oil us used up first thus production of 2 dollar oil peaks and is already in decline before you start extracting the 3 dollar oil. Assuming that 3 dollar oil leads to higher production i.e new peaks then this is against a very efficient market that had endured huge profits for the post peak 2 dollar oil. Profit margin drops but since the market had adapted to expensive it and is efficient market expansion i.e growth soon brings profit margins up surpassing those of 2 dollar oil as the market again moves to increase efficiency and reintroduce lost efficiencies from the high priced post peak 2 dollar oil era.

To some extent this happened where we did onshore first then offshore however it was done too early i.e as soon as it was even marginally profitable so efficiency gains in the market where minor.

Obviously with work oil usage per capita could be made very very small. And obviously this sort of approach leads to population control as resource management is paramount. And of course it acts as a alternative resource incubator as things such as renewable energy sources are free to operate even if they have much higher fixed costs as they need only be profitable while oil production was insanely profitable.

So although a bit crazy at first you see how in the end the basic concept actually works very well over the long run which was the point of the concept.

I'd argue that this sort of minimization of costs regardless of profit accounting this forms the real baseline for determining loss from a failed venture. I.e losing 100 today should be tallied against investing it 10-20 years in the future in the same endeavor using the above model where profit margins would have been much higher say a investment of 100 would have yielded 1000 dollar return.

Obviously the way we have developed our society not just oil production suffers the same magnitude of loss. Using this approach the real losses for the last few hundred years are almost impossible to calculate best guess is 100 fold higher than using our accounting methods. Its staggering really.

To some extent this shows up in the popular literature where you had the flying cars of the 50-60's concepts and three day work weeks etc and the belief we where on the verge of immense wealth because concepts similar to the above came out of the Great Depression and war i.e people where using frugal concepts mentally and distributing the influx of wealth to all.

Of course it did not happen but thats not to say they where wrong really. If we had learned our lesson then perhaps things would have been different. Instead the people of the time already where ignoring the rapid increase in mis-investment already taking place and rapid loss of hard won efficiencies.

Anyway I think that this sort of maximum frugality is the right approach. Its important because hopefully you should be able to see that its impossible to transition a wasteful society to such a frugal society as they simply did not spend the decades of investment needed to create the infrastructure needed to support a frugal society. Thus despite the fact that people see it could exist and argue we can readily change rapidly to such a society its actually impossible. Not improbably but impossible as there is a real need to build it in over decades. We literally cannot go there from here there is no route or path between where we are now and where we need to be.

Thats not to say a new society cannot be created but its not a simple transition of the old into the new as there is no direct route for the transition. The new society would leverage whats left of the resources from the old society slowly developing frugal processes to create a new society but just like when a oil company goes bankrupt and as bought out by a firm with a clean balance sheet at pennies on the dollar the same with our society we cannot be both the old bankrupt firm and the new one its simply not possible.

Our leaders of course recognize this but they are trying mightily to transition an smoothly take control of the new society as the old one crashes. However not one person regardless of their old position makes it through to the new. At best random events my allow a few to transition painlessly but its really simply random moves which happen to align for a few. Probably reasonable local leaders that have wealth but don't flaunt it that manage to shepherd their people through make it. But some will some won't regardless thus nothing is assured.

Sorry to take it this far but its in my opinion important as incorrect loss accounting leads to fake profitability and overtime almost incalculable real losses if the accounting is done correctly.

KLR -- From my personal experience the answer is greed. Every boom and mini-boom I've watched first hand resulted in a lot of dry holes. Folks get $'s signs in their eyes and start drilling crap. I lived through the late 70's boom and I would guess that half of those 4600 rigs running at the peak were drilling wells that had little or no chance of working.

I've also read the '30 depression was a big reason for ExxonMobil et al becoming such huge companies. One of XOM's biggest cash cows for decades was Friendswood Field south of Houston. The story: XOT tried unsuccessfully for years to lease the mineral rights. But when the owner went belly up they bought the property (minerals and surface) for next to nothing. The surface rights alone eventually came to be worth 10s of billions of $'s. In fact, I don't know the status today but back in the mid 90's I saw a report indicating that XOM real estate asset far exceeded the value of the oil/NG assets. If the slump in the oil patch/economy goes on much longer we'll see more opportunistic moves by XOM et al. The XOT acquisition was just the beginning. Devon, Chesapeake et al won't be too far behind IMHO.


I kinda of like the way that rolls off the tongue, I think it would make a great insult.

Something that could be used when talking to or about cornucopians and technologists when they blabber on about solutions without any basis in reality. What a freakin "Dry Hole" that guy is.
Yo! Quit being such a "Dry Hole"!

FM -- A little insider poop from the oil patch: calling someone a "dry hole" is about the second worse insult you can toss at someone. Being a "worthless hand" typically tops the list especially in field ops.

Hey, Ron, do you think that if they use nanotech the can get the equipment small enough to make it work? I mean, we already learned today that if the exploration gear gets small, the fields get large, didn't we? So... maybe the Lake Woebegon effect will work on drilling equipment?

Of course, if you use pipe a few nanometers in diameter, the flow rate might be restricted, but that is small concern for a cornucopean.

Any time the find is measured in cubic feet it is gas; in barrels it is oil. This one was announced on Kudlow in cubic feet, so you're absolutely correct... it is gas.

And, more to the point, at 28,000 + feet, it will most likely always be gas, due to pressure and heat.

Of course, since it will be compressed into LNG, it will end up in total liquids anyhow, won't it?

"Fuel taxation is the third rail of politics," Bob Lutz said. (see up top)

No wonder Washington is in such a mess. For any logical person, the kind of fuel tax proposed by Lutz makes absolute sense: it might reduce carbon emissions, could reduce the trade deficit, and perhaps most importantly could reduce the Federal budget deficit.

But I suppose it wouldn't help major campaign contributors make such large profits from government handouts that they can pay themselves multi-million dollar bonuses.

Do all the politicians in Washington (and in Austin, and the other state capitals) think voters are completely stupid?

Ird -- I don't think most politicians think the public is stupid as a rule. But IMO they take it for granted that many don't get involved too deeply in the process. Thus it's to their benefit not to get the public stirred up and have them engage in the process. But slapping a fuel tax on them (which I fully support) might get the public motivated. And a motivated public must scare a lot of those politicians

Taxing is almost a moot point while running such massive deficits. Why not do away with all taxes and just borrow as long as we can? We can just print money to pay the debt service, too. /snark off

It's interesting how many Peak Oil aware Oil Patch types (including RR) are all in favor of higher energy taxes. I would levy a high energy consumption tax offset by eliminating the Payroll (Social Security + Medicare) tax, and use the energy tax revenue to fund Social Security/Medicare, with part of the proceeds used to fund electrified rail. But this would require us to recognize that we can't have a virtually infinite rate of increase in our rate of consumption of a finite fossil fuel resource base.

Link up top: Iraqi oil may rival Saudi Arabia

But those terms might be tough for the oil companies.

"They will completely and entirely fund the development of those fields, and get very little profit in return," said Lothian.

This statment is the exact opposite of what one Jay Park said on Stuart's thread, Iraq Could Delay Peak Oil a Decade.

I have been involved for a number of years with the Iraqi oil industry, and I am familiar with the Technical Service Contracts (TSCs) which were awarded in the First and Second Petroleum Licensing Rounds by the Petroleum Contracts and Licensing Division (PCLD) of the Iraq Ministry of Oil (MoO)...

The remuneration fees are certainly very modest. However, there is 100% recovery of the Contractor's costs, so I disagree with the comment above. Indeed, there is even an "R" factor component in the remuneration fee calculation that creates an incentive for the Contractor to incur higher costs than it otherwise might pay (a feature that the economists call "goldplating").

Park says he has inside information and that the development costs will be entirely borne by Iraq. Yet the article linked above says the development costs will be entirely borne by the contractors!

Now I am confused. Who is correct here?

Ron P.

Interesting question, but I suspect that ultimately the development costs will be borne by you and me.

Ron -- If I recall the story correctly the operators will pay the costs but then recover the same from the revenue stream. If production pans out as they project iraq essentially gets a free loan out of the deal. As well as the bulk of the production. That's not to unlike how deals are traded (a "carried" working interest) in the US today EXCEPT the paying parties do end up with the bigger chunk of the revenue stream after payout.

Thanks Rockman but I am still confused. Stuart states in his thread:

The first round, in June, were for fields that were already in production and set up contracts in which companies get paid a fee per barrel for all production over the existing level.

Now that just ain't much. Production must pan out or they get virtually nothing. And suppose it doesn't pan out. Current production is about 2.4 mb/d. Suppose they eventually get production up to only about 4 or 5 million barrels per day, or about 2 mb/d above existing levels, which I believe will be the case, will they still get all their expenses back plus the $1.15 to $2.00 a barrel?

What I am trying to figure out here Rockman, are the oil majors taking a huge risk here or, as Jay Park suggest, taking virtually no risk at all?

Ron P.

I didn't follow the details too closely (I actually find it rather uninteresting...too much smoke and mirrors for my taste) Ron but there are different trades depending on production enhancement vs. exploration. But, IMHO, none of these trades are much benefit to the majors. I suspect Shell et al are involved hoping they get a toe in the door on better deals. The majors need to book reserves...not cash flow from what will amount to construction projects. Last I heard ExxonMobil had more than $30 billion in their cash accounts. They need to book big reserves and not more income that will sit there idle. Most importantly, none of the major oil companies have the personnel to do this work. They can't drill their own leases without heavy support from the service companies. When Chevron was out there drilling Jack in the DW GOM is wasn't Chevron personnel doing the work. Of the 140 souls on board maybe 2 or 3 were Chevron employees. It's the Halliburtons and Schlumbergers of the world who can take on these types of projects...not ExxonMobil et al. Any major or NOC that won a contract would immediately farm out most of the work to the service industry IMHO. Except the Chinese, of course. They ship their own less experienced folks in. Not nearly as efficient but they would rather pay one of their engineers $500/month then pay an expat $1800/day.

Hi Rockman,

The Chinese think long term when everybody else is focused on next week.

How long will it take for those inexperienced but talented engineers to catch up?

And how long will it be , given the remarks you and others make occasionally about the retirement of our aging petro engineers and the boom/ bust oil cycles until they have the market cornered in oil talent the way they do in rare earth metals?

Not too long mac. With this type of on-the-job training natural selection is at its best: the quick learners become good hands. The slow ones are crippled or killed. I've worked a number of contracts where half the reason the expats were on board was to train the FNG's. The scariest was Africa. It was hell just getting them to wear safety glasses and gloves. Too much macho BS with those hands. One Sunday morning we had to completely shut down operations on the drill ship and had everyone on the chopper pad for 8 hours trying to beat safety issues into them. We were just getting too many near misses. I finally cancelled my contract and didn't go back. Two bouts of food poisoning was bad enough but when they almost dropped a welding tank on me I decided the money wasn't enough. The deplorable sights on the drive from the airport (Equatorial Gunea)to the chopper base didn't help either.

And yep...many are ready to go to the house now. I would guess we would have seen a lot more leave by now had it now been for the 401k meltdown. My current boos had built his dream house in the Hill Country. Then he lost 60% of his savings so retirement delayed

Police extremist unit helps climate change e-mail probe

A police unit set up to support forces dealing with extremism in the UK is helping investigate the leaking of climate change data in Norfolk.

In November it was revealed that the computer server at the Climate Change Unit at the University of East Anglia had been hacked and e-mails leaked.

An inquiry was started by Norfolk Police.

Now it has been revealed the force is getting help from the National Domestic Extremism Unit, based in Huntingdon.

"While this is not strictly a domestic extremism matter, as a national police unit we had the expertise and resource to assist with this investigation, as well as good background knowledge of climate change issues in relation to criminal investigations."

"Good background knowledge of climate change issues in relation to criminal investigations" - so this is the group that deals with eco-terrorism and the like?

Completely off topic:

So, the Bidens, Bil Clinton, and the Obamas are here in Wilmington for Jean Biden's funeral.

After Obama gets done blasting auto and bank executives for private jet travel, what does he use to cover the vast ~120 miles from Washington D.C. to Wilmington, DE?

Why Air Force One, of course!

The entire flight must have take 15 min. Obama could just as easily taken Marine One, or Biden's favorite method of travel, the Acela.
But, because he landed at New Castle County Airport (south of Wilmington) to go to the funeral (north of Wilmington) they've had to shut down major roadways, side streets, and call up hundreds of county police officers for security.
Mr. Obama, don't you think in the time that it would have taken to get to Andrews AFB, fly to Wilmington, and go in another motorcade across town, it would have been easier, cheaper, AND faster to take Marine One right from the White House to a grassy spot near the service? Cripes, it's not much further than it would be flying to Camp David.

Thanks, big O! >:-/

For what it's worth, this being the President of the US, there might be some other considerations that go into such choices.

Hail Caesar. Whatever happened to "first among equals"? Yeah, I know.

Marine One is bristling with all sorts of stay safe equipment, too.

I hope he stops at the neat restaurant at the airport. Wasn't it called Wilmington International at one time?

Air Transport Command? WWII themed? A big fire years ago destroyed it, and it was shut for a long time. It's reopened, but I haven't been back.

Thats exactly what he should use. It is safer and they don't have to close as many roads.

Re: U.S. Overtakes Russia as Biggest Natural Gas Producer (uptop)

If we extrapolate the reported Russian natural gas production number through December, their 2009 production was about 19,600 BCF, versus 23,100 BCF in 2007 (EIA). In 2007, consumption was 16,700 BCF, resulting in net exports of 6,400 BCF. I assume domestic consumption has dropped, but for purposes of illustration, if consumption has not dropped, their net exports would have gone from 6,400 BCF to 2,900 BCF in two years, a drop of 55%. (Edited to correct math error)

So, how much of the production decline was related to depletion, and how much was related to pipeline issues?

I think the number one factor is a drop in demand. Their customers were all trying to get out of their contracts. They couldn't sell what they were producing. And natural gas isn't as fungible as oil (yet, anyway).

I really don't think we can read much into production numbers now. When everyone's producing all-out, sure. When demand has dropped like it has, it's impossible to tell what is depletion and what is voluntary cutbacks.

What's curious is that Norway appears to be producing at max capacity.

I think every other producer in Europe is producing at flat out capacity (and, if you believe Matt Simmons, so possibly is Gazprom), there's a lot of LNG coming in and storage is being drained. Despite the recession UK gas consumption this winter so far exceeds recent demand prior to the recession thanks to the cold weather. I suspect most of Europe has similar near record demand.

Gazprom's production drop is larger than after the fall of the Soviet Union. Simmons theory suggests that Gazprom has been declining now for a few years but was able to cover this with storage games (mostly) until last winter. Gazprom of course denies this.

I'd better add for completeness that Simmons also states that the US fiddles Natural Gas production figures as well and states that "official" production reporting models were adjusted to this end.

I probably missed this being posted somewhere already on TOD...but here we go again...endless oil supplies:

Shifting demand suggests a future of endless oil
Technology, politics and consumer behavior could keep industry pumping


I know I got an e-mail about it. It seems to be the same article as from a few days ago, but with a different name. See this article from January 7. It was discussed in the January 7 Drumbeat, I believe.

Avoiding dangerous warming by 2100 'barely feasible' - environment - 12 January 2010 - New Scientist

For a 50:50 chance of keeping a global temperature rise within 2 °C by 2100, we must halve emissions by 2050. This is the message of climate models by Keywan Riahi of the International Institute for Applied Systems Analysis in Laxenburg, Austria, and colleagues. That means 70 per cent of global energy production must be zero-emissions by 2050.

To see if that target was realistic, the team used factors such as the average rate of technology diffusion in the past. Our prospects are poor even if we roll out sources like wind and nuclear power as fast as we can, plus any new ones that become available before 2050.

All 5 comments submitted so far are marked "This comment breached our terms of use and has been removed." Doom brings out the profane in people it seems.

Maybe genetic engineering is the answer. We could photosythesize like plants, and would no longer need agriculture. Of course, we'd all be green, but think of the energy it would save.

Alternatively plants could evolve mobility, as depicted in Brian Aldiss's novel Hothouse. Billions of years from now, natch. Don't think we have time for much lab work of this nature right now.

Plants did evolve mobility. They are now called FISH. That evolutionary adaptation worked so well that we now find lots INSECTS and ANIMALS on land and BIRDS in the air as well. Trouble is, in these forms, increased mobility requires greater flows of energy than that available from straight photosynthesis and internal energy storage as well, thus the movers and shakers feed off the plants. Sounds rather like society in a weird sort of way, as all those city dwellers "feed" on the production of the farm boys, who are willing (or forced) to sit out the growing season...

E. Swanson

HUH? Friendly ref at WIKIPEDIA suggests earliest fish evolved from "coral-like sea squirts," specifically Tunicates. Are YOU testing us? ;) Or skipping a few steps? I know what you're getting at, at any rate. The plants in the book had evolved to fill most niches previously occupied by animals, leaving very few of the latter around. It's a very entertaining read, especially the ocean filling mangrove swamp and the city sized "spiders."


You are probably familiar with the classic case of the Lynx and the snowshoe rabbits population cycle as first discovered by examining the records of the fur buyers (-I forget the name of the company , having a senior moment!) in the early days up in Canada.

I had never thought of it in so many words but after reading your comment I being a farmer feel sort of like a rabbit somehow supporting a hundred foxes.

Things may be pretty bleak for a while when we fail to deliver the weregeld to the cities and the foxes come looking for us.

I think it was the Hudson Bay company mac.

Even better, in such a circumstance you want to maximise the surface area (to increase the amount of incident sunlight), so my inexorably expanding stomach would become a good thing not a bad thing!

My vote: Beamed power. Then we'd only need to eat for nutrients.

I always wanted to write a SciFi storey, where the energy source looked like a hybrid of a tree, and an electric eel. Just plug your power cord into the tree, and you got power.

Theoretically if you think about nano technology and assume some sort of power source no real reason why we could not eventually derive our energy from builtin synthesis.

Perhaps we would keep breathing but it would be optional. But assuming you have a energy source then you could synthesis basic nutrients and vitamins.
Sure some losses would perhaps occur but they would be minimal.

If you eat food then one could imagine the system would work in reverse scavenging the flood of nutrients and storing it as say electrical power in and advanced capacitor or other storage. If you continued to eat past storage capacity then it would simply be burned off effectively flared and the gut absorption turned down. You would exhale a lot of C02 get a fever and the runs :)

I don't see why this Borg style gut is not doable indeed we already do some of this in hospitals today with IV nutrient feeding..

Of course we already have a pretty good mechanism that does this its called fat :)

Cool! Like a 'current' bush, eh?

Of course, we'd all be green, but think of the energy it would save.


The ideal color for a photosynthetic pigment would be black – the color that absorbs all light falling on it.

Interestingly the molecules of Chlorophyll and Hemoglobin are quite similar...


A&P (a national grocery store) announced its results this morning. They weren't good, and they aren't expecting much improvement.

Christian Haub, Executive Chairman of the Board, said, “The US food retail market continues to face one of the most difficult and challenging environments in many years which analysts expect will extend through the first half of 2010. Unemployment, deflation and the resulting price competition combined with consumers’ drastic changes in spending behavior has severely impacted both our industry and our business."

Dear Leanan

Your link isn't working at least to a Canadian.

Article looks interesting

Try it now. I changed to the MSN version.

It is interesting that the EIA now agrees with the IEA that Non-OPEC all liquids will peak this year. Table 3b. Non-OPEC Crude Oil and Liquids Fuel Supply (million barrels per day)

Total Non-OPEC Liquids
2009    2010    2011
50.29   50.71   50.57

World All Liquids Consumption (Table 3a)
2009    2010    2011
84.10   85.18   86.65

World All Liquids Supply
2009    2010    2011
84.19   85.62   86.69

I would make bets that they peaked in 2009. At any rate Non-OPEC Crude + Condensate peaked in 2004. Just adding bottled gas and biofuels to the mix gives a false impression Non-OPEC has not yet peaked.

Notice that in just two years world oil supply is supposed to increase by 2.50 mb/d and it will ALL have to come from OPEC... then some. Also notice that we consume just a tad less than the world produces. Is that a coincidence or what. ;-)

Ron P.

They clearly missed Aramco's "12.5 mbd capacity", the recent shallow water miracle in GOM, Brazil's Tupi and Iraq's imminent miracle (all oil/no bombs). And, as everybody knows, all that technology just around the corner. Sarcasm/off

Gas flows now from the Sahara to Spain
210 Kms of underwater pipes and 500 Kms to Hassi R'mel the gas source in Algeria. The gasoduct runs as deep as 2,160 mts under the Mediterranean, it starts at BeniSaf where the pumping station is, and gets to Spain at the beach of El Perdigal in Almeria.
In 2010 the flow should attain 8 billion cubic meters a year, although it will be some six months until it reaches the maximum flow.
The underwater pipes were laid by Castoro Sei, an Italian ship. The steel sections were made in Japan of high-carbon steel by Mitsui and Sumitomo.
The job took nine years by Sonatrach(Algeria), Cepsa and Iberdrola (Spain), Endesa (Italian now, used to be Spanish) and GDF Suez.
Many ecological issues had to be solved for this project: an underwater reserve park, problems with fishermen and air quality in El Pedregal.
This gas is of strategic importance to Spain and lessens the European dependence on Russian gas.

There was some discussion 18 months ago about the interplay between Algeria and its Spanish and Italian customers in the comment section of this article.

Here's the graphical review in units of cubic meters from the Energy Export Databrowser:

Except for my mention of France, which I wouldn't include today, I'll stick with my comment from July, 2008:

Looking at the charts it seems that Spain, France and Italy will be forced into a cozy relationship with Algeria, sucking up as much of the Algerian output as possible.

-- Jon

You are right Callahan, and the relationship between Sonatrach (Algeria) and the Spanish companies has often been strained. No fault on the part of the Algerians, it was our companies who wanted to buy cheap and sell dear. A year ago Gazprom tried to get the Algerians into some sort of agreement to put the squeeze on us, it came to nothing. So far.

The steel sections were made in Japan of high-carbon steel by Mitsui and Sumitomo.

Truly bizarre. I was just reading about Sumitomo's steel pipes this morning in Fingeltons 'In Praise of Hard Industries'

Amazon link: http://www.amazon.com/Praise-Hard-Industries-Manufacturing-Information/d...

If you click on 'Look Inside' then search for 'Sumitomo' it will take you to page 162+ describing their incredible pipe manufacturing (the Rolls-Royce of pipes).

Great update santa. I remember when the found all that NG but didn't know what to do with it. Never heard about the Spain p/l plan. But that seems to calc to be around 150,000 mcf/day. Not insignificant but based upon the last consumption figure (2006) it represents less then 5% of their daily usage. But my research did show the NG consumiton has more than doubled in the last 9 years. And Spain has twice as much nuclear sourced power (50%) at the average EU country. Surprised me.

I read a newspaper article a few weeks ago concerning bringing water (or Nat Gas, can't remember which) from the Papua New Guinea Highlands to Queensland, via pipes laid under the waters of the Torres Strait. Gravity did all the work, essentually. The killer was that it was 'effectively impossable' to make pipes that could withstand the pressure of 15m of water...

I think the most important article today was:

Bomb hits Russian gas pipeline - agencies

This was a very short item, and it noted briefly that at the 496th KM, unknown people blew up the pipeline, 'causing a fire.'

Applying this to almost any pipeline, almost anywhere, that provides evidence in support of my projection that Iraqi oil will not reach 12 mbpd due to the vulnerability to sabotage. My projection is that unknown people will blow up many pipelines this year, including some in Iraq, and some in the US. Perhaps some in SA as well? Hope not, but who knows?

down the memory hole...
when i was a young lad back in the mid 70's i read about peak oil in local newspapers and national magazines. "they" predicted that oil would run out in 30 years at those past rates of consumption.
now "they" say oil will run out in 30 years at current rates of consumption.

i like the previous posts which point out the weak spot of graphing data. the only data i see is prices going up and wages going down (except for gold man sacks).

and the bloomberg link some weeks ago about $1.60 a gallon gaz-o-leen.

and some further evidence for glopal warning. sea turtles down texas way getting hypothermia.

yeah, the amount of money spent on the military can put solar panels on every roof, windmills in every community, an electric car for every one who wants/needs one, free health care. and what of military oil consumption? above top secret? and military carbon footprint? a graph someone?

can anyone quantify the carbon foot print of the movie avatar? should be easy to graph out the carbon foot print of ONE BILLION DOLLARS.

wimps in the ny pub library and england in general...i'm on my third "mom & pop" job where they dont turn on the heat in winter nor the air conditioning in summer. so looks like i will be perfectly acclimated (sic) to the new paradigm of less consumption, reduction in lifestyle, dystopian near future chosen for us all, that is the lucky ones who dont die off.

"it's all good"

I can't resist keying off of your comments on the military.

When was the last time anyone heard an honest description of why people want to kill Americans (and their allies)? All of this military spending to chase down a bunch of bearded bums in sandals near their homes, total disruption of travel in the world to stop the odd maniac with a bomb in his shoe or skivvies. Why are they so motivated?

A few years ago there was a speech by Bin Laden describing why he hated us and the Saudi government. I suspect if we spent .001 percent of our military budget analyzing that speech and responding to it in some positive way, like trying to convince the Muslim public that he is wrong or, heaven forbid, behaving better ourselves then the world would be a better place.

...behaving better ourselves ...

I don't know if you've been following the news since the (most likely fraudulent) Iranian election last summer, but that appears to be exactly what the US has been doing with respect to Iran. There's been no taking sides and a hands off approach. No comments other than general ones about free and fair elections. It's undercut the Iranian regime's ability to point to The Great Satan as the cause of all their problems, which has left them with no outside entity to use to rally the population.

Interesting times, and an interesting approach. Much more effective than saber rattling.

For the most part same with Venezuela.

Generally when the Great Satan won't play ball with you and your regime depends on fighting a war i.e cold war, work on drugs, war on terror etc etc you go and beat up on one of your neighbors.

So the hands off policy and lack of rhetoric is just as destabilizing if not more so than the fixation of a country as and enemy thats half a world away. North Korea for that matter is having problems also.

I'd argue that in Venezuela and in Iran Bush leaving and Obama was seen as a defeat of the Great Satan and time to move past war. The fact this did not happen i.e there was no freedom after the good fight is destabilizing.

In a real sense our enemies are not really much better than we are just different and I think thats becoming obvious.

I don't think there has really been a regime change in the 20th century that was not almost immediately corrupted assuming it started with good intentions. Its a bit sad but true.

Perhaps Panama ??

Humbaba, weren't you destroyed by Gilgamesh or somethin? ;-)

Yeah, it's all good!

Regardless of how much oil there is elsewhere in the world, the fact is that peak oil in the USA ocurred around 1970. No amount of technology ever reversed the decline. The only reason we have any oil left is offshore and a few onshore fields on life support.

Now the problem is how to pay for imports. That's difficult when you loose half your manufacturing jobs in a couple of decades.

The Vatican newspaper and radio station have called the film "Avatar" simplistic, and criticized it for flirting with modern doctrines that promote the worship of nature as a substitute for religion.

Hmmm ... worshipping nature is a prominent part of many religions from thousands of years.

update : should have been under the main thread.

Boiler upgrades, new heat pumps to warm UK homes

With the recent stretch of snowy, icy weather in many parts of the eastern US, UK and Europe, keeping warm has been on a lot of people’s minds. For Britons, that will become a bit easier — and greener — to do, thanks to a couple of new developments.

The electronics company LG announced today that, starting this spring, it will begin marketing its air to water heat pump in the UK. The firm claims the innovative pump can reduce carbon dioxide emissions by 90 per cent, compared to conventional heating systems powered by fossil fuels.

See: http://www.greenbang.com/boiler-upgrades-new-heat-pumps-to-warm-uk-homes...


I am not sure how this escaped the notice of TOD contributors.

This appears an indirect way of OPEC saying we may be headed to $100 oil.

OPEC Won't Act Unless Oil Exceeds $100 - Kuwait SPC

The Organization of Petroleum Exporting Countries won't act in its upcoming March meeting in Vienna unless crude oil prices exceed $100 a barrel, a member of Kuwait's Supreme Petroleum Council said Tuesday.

"OPEC will not consider it an alarming event if oil hits $100 as we have become accustomed to oil at $100 a barrel," SPC member Imad Al Atiqi told Zawya Dow Jones in an interview.


Good point!

The affected citizens in this video don't seem to happy with the ng companies.

Texas city sick because of natural gas pipeline?

A small Texas town located atop one of the nation's most productive natural gas fields is awaiting a new round of test results after state regulators found a cancer-causing pollutant in the air.

Interesting... we have been hearing that it is demand that has peaked... yet the EIA says demand will rise 1.47 mbd in 2011. And yet, back in 2006-7 the DOE, and some very interesting people, wrote about peak production.

Notable Recent Statements Relating to the End of the Era of
Easy and/or Cheap Oil.

Commentator Statement Reference

David O’Reilly,
Chairman, Chevron
“The time when we could
count on cheap oil... is
clearly ending.”
CERA Energy
Conference. February

Samuel Bodman, U.S.
Secretary of Energy
“The era of cheap and
abundant petroleum may
now be over.”
Christian Science Monitor.
July 8, 2006

Jeroen van der Veer,
Shell Chief Executive.
“Peak oil does exist for
easy-to-drill oil…”
Cummins, C., Williams, M.
Shell's Chief Pursues
Simple Goals. WALL
January 17, 2006.

Alpha Oumar Konare,
African Union
Commission Chair.
"The era of cheap oil is
Era of cheap oil is over.
Reuters. 02/04/2006

Viktor Khristenko,
Russian Energy
“... the era of cheap
hydrocarbons is over".
OVER'. The Telegraph.

Guy Caruso,
“The era of low cost oil is
probably over.”
Holmes, J. Four Corners
Broadband Edition.
Australian Television
Program. 10 July 2006.


Difficult as it may be to believe, BAU commentators and MSM are all repeating the latest spin that it is really just demand that peaked. Supply is great!


That peak demand bit is annoying. It's as if their saying people of their own volition just decided without any input they would reduce their demand, and that led to peak demand. "We just don't want as much anymore - don't really need it like we use to", (now many of us are driving tiny little economy cars to avoid the price of oil when it hit 4.72 in California and 4 something around the country). Yeah, it's called demand destruction due to higher prices. Once people have committed to purchases of economy cars they aren't suddenly going to use more gas.

As a parallel to this, we got a propane fireplace when a fill up of our tank was 120 dollars. Then it went up to 290 dollars just 2 years later and we installed propane wall heaters that used much less gas. The propane service keeps records and they called to tell us we needed another fillup. I said, no we switched units and burn less now and she said in a very dissapointed tone, Oh, ok, bye. Again the lesson is higher prices causes demand destruction.

The U.S. Energy Information Administration on Tuesday said it expected world oil demand to rise to 86.65 million barrels per day in 2011, up 1.47 million bpd from 2010.

Am I off base, or does that seem a tad conservative to anyone else? Well, even if it is conservative, if that amount of increase occurred for the next 10 years, that would translate into a 15 mbd increase in production. Add to approx. 85 mbd at present, would result in 100 mbd by 2020. I suppose if we use crude, LNG & CNG, ethanol, biodiesel, Athabasca tar sands, Venezuela heavy oil, drill like mad anywhere and everywhere, then stick a few thousand more straws in Ghawar we might just make it! Just a full on technological war type effort to extract the absolute maximum possible out of the Earth's crust and from its fauna, compressed, fermented, refined, and just maybe we could break a 100 mbd for one year! Then collapse from exhaustion and watch production drop like a stone from depletion and environmental degradation. But just knowing we broke a hundred would make it all worthwhile. Woo hoo!!!