Drumbeat: August 8, 2010

The Kalamazoo River 'mess' is a lot more than that: An oil spill in Michigan's Kalamazoo River points out the grave flaws in America's energy policies

If the BP blowout in the Gulf of Mexico is causing us to reconsider deep-sea drilling, then last week's oil disaster in Michigan should give us pause about constructing new oil pipelines. And taken together, the spills spotlight what's wrong with our nation's energy direction.

Patrick D. Daniel, chief executive of Enbridge Inc., apologized last week for "the mess we made." He was referring to the pipeline rupture that dumped about a million gallons of crude oil into Michigan's Kalamazoo River. Though we're sure that Daniel genuinely regrets that it was his company's turn to advertise the obvious dangers of continuing our nation's dependence on oil, this time, sorry's not good enough.

Michigan oil spill caused by 5-foot tear in pipeline

Alberta (Reuters) - Oil that fouled a Michigan river system spewed from a rip less than five feet long in an Enbridge Inc pipeline, a company executive said on Saturday after crews extracted the ruptured piece.

Minerals Service Had a Mandate to Produce Results

NEW ORLEANS — On March 5, 1997, an obscure federal official with a puckish grin entered a hotel ballroom here and greeted 1,000 jittery oilmen on what would prove a landmark day.

For years, fading interest in the Gulf of Mexico had punished the local economy and left Louisiana to mourn its “Dead Sea.” Now, rising oil prices and new technology were setting off the deep-water version of a gold rush. Interest in drilling ran so high that the official, Chris Oynes, was heading into the annual lease auction with a record number of sealed bids.

In giddier times before the bust, his predecessor presided over the auction in a jaunty red blazer, but Mr. Oynes was far too conservative for that. Or so everyone thought — until he opened his briefcase and brought down the house with a size 46 scarlet jacket, an omen of the coming deep-water boom.

“They knew symbolically what this meant,” Mr. Oynes said in a recent interview. “In Louisiana terms: ‘Let the good times roll.’”

Iraq embargo food for thought

As trade sanctions on Iran are tightened, a similar programme of restrictions imposed 15 years ago on its neighbour Iraq continues to serve as a lesson to governments and companies alike.

Abuses of the oil-for-food programme by prominent western companies are still bubbling to the surface several years after they were committed.

Scores killed and wounded in Iraq explosion

Iraq (Reuters) - The explosion of a power generator, possibly triggered by a bomb, at a busy market in Iraq's southern oil hub Basra Saturday killed dozens of people and wounded scores more, morgue and security sources said.

Gulf spill investigators eye undersea evidence

NEW ORLEANS — Now that BP appears to have vanquished its ruptured well, authorities are turning their attention to gathering evidence from what could amount to a crime scene at the bottom of the sea.

The wreckage — including the failed blowout preventer and the blackened, twisted remnants of the drilling platform that exploded, burned and sank in mile-deep water in the Gulf in April — may be Exhibit A in the effort to establish who is responsible for the biggest peacetime oil spill in history.

'Good news' on BP oil spill may be premature

THE OBAMA administration has announced that three-fourths of the oil that leaked into the Gulf of Mexico from BP's Macondo well is contained -- evaporated, skimmed, collected, burned off, dispersed or dissolved. The remaining fourth, said White House energy chief Carol M. Browner, will also slowly degrade or disappear, making the risk of catastrophic contamination smaller.

Could it be that President Obama overstated the severity of the spill when the leak was still gushing, calling it the "worst environmental disaster American has ever faced"? He, of course, was hardly the most theatrical -- remember Cajun pundit James Carville's on-air exclamations of, "We're about to die down here"?

Internal Combustion Engines Are Still 85% Inefficient

You might be surprised to hear, that after all this time, with so many compelling reasons to make vehicles more energy efficient, that the internal combustion engine still only uses 15% of the energy it receives from gasoline. I sure was.

What is ‘sustainable’ transport?

Prime Minister Julia Gillard’s catch phrase for this election is "sustainable". No longer, according to Gillard, should we look to a big Australia, but a "sustainable" population.

In a speech in western Sydney on July 21, Gillard emphasised the squeeze on health services, transport, roads and infrastructure. She hinted her "sustainable population" mantra would ease the squeeze.

Apart from rhetoric largely designed to pander to irrational fears of immigrants and prejudices against asylum seekers, Labor has failed to explain what it means by "sustainable".

VaTech uses commuter carpooling programs

RICH CREEK, VA. — It's 6:50 a.m. and mist is still rising from the fields along the Virginia-West Virginia border when the guys pull into the United Hydraulics parking lot.

About a half-dozen of them come, mostly in pickup trucks, carrying lunch coolers and wearing work boots and Virginia Tech Facilities Department shirts. They hail from small communities just across the state line, such as Oakvale, Lindside, Bozoo.

They greet one another, then fold themselves into a blue Dodge minivan to make the 35-mile trip to the Blacksburg campus together.

New Ford Explorer is 85% recyclable

The new Ford Explorer isn't even here yet, but the automaker is boasting about how much of the vehicle can be recycled after it finished living a long, long life.

Ford says the new Explorer, the crossover it introduced a week ago in a series of splashy debuts around the country, is 85% recyclable. That's because it makes greater use of "bio foam" and recycled fabric on the seats.

Gasoline From Thin Air?

An enzyme found in the roots of soybeans could be the key to cars that run on air.

Vanadium nitrogenase, an enzyme that normally produces ammonia from nitrogen gas, can also convert carbon monoxide (CO), a common industrial byproduct, into propane, the blue-flamed gas found on stoves across America.

Parents turn to swapping for school clothes

MIAMI — Kelly Trella has found a way to get rid of her 2-year-old son's old clothes: She swaps them.

Trella was looking for a way to clear out her basement when she stumbled upon a magazine article about thredUP, a children's clothes swapping website. She signed up and has been swapping gently used clothes from her Meriden, Conn., home ever since.

But Will It Make You Happy?

SHE had so much.

A two-bedroom apartment. Two cars. Enough wedding china to serve two dozen people.

Yet Tammy Strobel wasn’t happy. Working as a project manager with an investment management firm in Davis, Calif., and making about $40,000 a year, she was, as she put it, caught in the “work-spend treadmill.”

So one day she stepped off.

Inspired by books and blog entries about living simply, Ms. Strobel and her husband, Logan Smith, both 31, began donating some of their belongings to charity. As the months passed, out went stacks of sweaters, shoes, books, pots and pans, even the television after a trial separation during which it was relegated to a closet. Eventually, they got rid of their cars, too. Emboldened by a Web site that challenges consumers to live with just 100 personal items, Ms. Strobel winnowed down her wardrobe and toiletries to precisely that number.

Gwynne Dyer: Russian response to wildfires gives an early glimpse of climate change impact

It cannot be proved that the wildfires now devastating western Russia are evidence of global warming. Once-in-a-century extreme weather events happen, on average, once a century. But the Russian response is precisely what you would expect when global warming really starts to bite: Moscow has just banned all grain exports for the rest of this year.

At least 20 percent of Russia’s wheat crop has already been destroyed by the drought, the extreme heat—circa 40 º C for several weeks now—and the wildfires. The export ban is needed, explained Prime Minister Vladimir Putin, because “we shouldn’t allow domestic prices in Russia to rise, we need to preserve our cattle and build up supplies for next year”. If anybody starves, it won’t be Russians.

N.J. scientist who coined 'global warming' term tries to avoid the limelight 35 years later

On recent trips to Europe, Wally Broecker was treated like a celebrity. From London to Rome, the 78-year-old Columbia University geochemist was mobbed by reporters who hailed him as the father of global warming.

Today, on the 35th anniversary of the publication of his paper "Climate Change: Are we on the Brink of a Pronounced Global warming" in Science magazine, Broecker is again fielding calls from members of the media. They want to interview the man who was credited for the now-iconic phrase "global warming."

Analysis: Climate talks stumble from Page 1

BONN, Germany – The new climate change treaty under negotiation for the past 2 1/2 years begins with a brief document called "A Shared Vision." The problem is, there isn't one.

Absolutely fascinating article there on Mr Oynes, the ex-head of the MMS.

Not really interesting unless you are fascinated by how bureaucracy works.

The only snippet worthwhile I could find is:

The engineers were action-oriented and confident; they trusted machines. The (environmental) scientists were deliberative and academic; they worried about what they might not know. Engineers typically had local roots. Scientists often came from out of state. The engineers called their rivals the “free thinkers down on the third floor.”

I am fascinated by how bureaucracy works. I'm fascinated by how all sorts of things work.

. “In Louisiana terms: ‘Let the good times roll.’”

And as I recall here on TOD there was a LA resident who was speaking in glowing, positive terms about the money flowing in from the oil fees and even spoke about the idea of secession with 'we've got oil and the cash flow from that oil'.

Wonder if they had a change of heart yet?

Regarding Michael C. Lynch's intention to present evidence that "many" in the past were incorrectly predicting an imminent peak in oil production, I expect he may point to this 1982 report from the National Research Council titled Energy in Transition 1985–2010. The report predicted that global oil and natural gas production would peak in the 1990s and then decline steadily.

In the next several years all the problems, domestic and international, stemming from U.S. oil imports are likely to intensify unless we succeed in moderating our demand for both oil and gas, which translates into increased oil imports, at least in the short term. In the longer term the development of other domestic energy forms (at first mainly electrical generation by coal and nuclear power, later synthetic liquids and gases derived from coal and oil shale, and finally solar and other long-term energy sources) will also contribute increasingly to the moderation of oil imports.


Given the probability that world oil production will peak in the 1990s and decline gradually thereafter, it is thus extremely unlikely that the United States will be able to offset its declining domestic production of fluid fuels by increasing its share of world imports. Instead, political and economic pressures on the United States to decrease its share of imports will steadily mount.

Clearly, this report would support his position that predictions were made that were incorrect. However, does that say anything about predictions being made 30 years later? Let me put it another way -- would Mr. Lynch be willing to limit himself to medical diagnostic methods of 1982 or would he want to take advantage of the improvements made over the last 30 years?

Clearly, this report would support his position that predictions were made that were incorrect. However, does that say anything about predictions being made 30 years later?

Yes. It says you have to be very careful that there might not be even more production right around the corner. Again.

Certainly David White proclaiming the peak of US oil production "within a few years" in 1919 might lead one to believe that this routine of declaring peak, waiting, and peak doesn't happen, has been going on for a very long time. As to the techniques today being better than those available to the NPC back in the 80's, well, maybe they are. And maybe they aren't. You quote does not seem to say how exactly those estimates were made, and its certainly a reasonable statement to make if you simply remove the timeframe, we all know that sooner or later we won't be able to produce more...the problem is we're always producing more than we thought just a few years ago. Right up until the point we can't.

Yes and let me remind you of my Blibbit Theory. If you have ten pounds of crap in a five pound bag, most would predict that the bag would be about to rupture. But it did not. Then someone heaped five more pounds into the bag. But because the prognosticators were wrong before, in predicting rupture at ten pounds, are they just as likely to be wrong now?

People have, in the past, thought that oil in the ground was getting rather scarce. But we have since they made those predictions, pumped hundreds of billions of barrels from the ground. Because they were wrong before, does that mean that they are even more likely to be wrong now? Or does the fact that hundreds of billions of oil have been pumped since that prediction mean that they are far more likely to be correct this time?

Ron P.

No one claims that peak won't happen( well, I can't speak for the abiotic types, but I don't know how seriously they are taken). I am simply saying that after the odd multiple decades, or centuries, of making bad peak/running out predictions, learn from them and do better next time. Don't just recycle the same bad ideas every couple of half decades or decades, and pretending its any more valid this time. Thats all I'm saying.

IMHO no claims, it just appears that the annual maximum of global oil production occured in 2005 and has not been exceeded even though prices have been higher since then. Could production go higher? Of course, but it might be very painful at the pump. ELM raises its ugly head too.

Another thing not normally addressed is the price at the pump may go way down (percentage-wise) but if wages go down more, then fuel becomes less affordable. I remember seeing an old picture of a dozen men standing in front of a filling station. The price of gas was 25 cents/gal. The caption was; "not one man in this picture made more than 25 cents per hour". What is minimum wage now; $7.50/hr? Not to worry, gas is still cheap.

How facts backfire

"The general idea is that it's absolutely threatening to admit you're wrong," says political scientist Brendan Nyhan, the lead researcher on the Michigan study. The phenomenon – known as "backfire" – is "a natural defense mechanism to avoid that cognitive dissonance."

. . . Part of the answer lies in the way our brains are wired. Generally, people tend to seek consistency. There is a substantial body of psychological research showing that people tend to interpret information with an eye toward reinforcing their pre-existing views. If we believe something about the world, we are more likely to passively accept as truth any information that confirms our beliefs and actively dismiss information that doesn't (confirm our beliefs).

. . . And relentless self-questioning, as centuries of philosophers have shown, can be exhausting. Our brains are designed to create cognitive shortcuts – inference, intuition and so forth – to avoid precisely that sort of discomfort while coping with the rush of information we receive on a daily basis.

The author is focused on political issues, with a look at persistent myths among both conservatives and liberals, but the topic is certainly relevant to Peak Oil issues, on both sides of the debate.

But I would argue that the post-2005 crude oil production versus price facts (especially 2005 to 2008) argue for what was (so far) an effective global crude oil peak in 2005, especially in regard to conventional production--in marked contrast to the large increase in crude oil production in the 2002-2005 time frame, in response to rising oil prices.

Deffeyes' prediction was for a global crude oil peak between 2004 and 2008, mostly likely in 2005 (and an erroneous observation about a 2000 peak doesn't count as a wrong prediction; he never backed away from what his model showed).

From your link:

And rather than facts driving beliefs, our beliefs can dictate the facts we chose to accept. They can cause us to twist facts so they fit better with our preconceived notions.

Sidney J. Harris, American author and syndicated columnist expanded this principle a bit.

Perhaps the most important advance in the behavioral sciences in our times has been the growing recognition that the perceiver is not just a passive camera taking a picture, but takes an active part in perception. He sees what experience has conditioned him to see. What perceiver then sees what is really there? Nobody of course. Each of us perceives what our past has prepared us to perceive. We select and distinguish, we focus on some objects and relationships and we blur others. We distort objective reality to make it conform to our needs or, our hopes, our fears, our hates, our envies, our affections. Our eyes and brains do not merely register some objective portrait of other persons or groups but our very active scene is warped by what we have been taught to believe, by what we want to believe and by what we need to believe. It is impossible to reason a man out of something he has not been reasoned into. When people have acquired their beliefs on an emotional level they cannot be persuaded out of them on a rational level, no matter how strong the proof or the logic behind it. People will hold onto their emotional beliefs and twist the facts to meet their version of reality.
- Sidney J. Harris

Of course we all do this, both you and I. The trick is to try to recognize when we are doing this, when to admit we are wrong, just down in the dirt wrong.

TOD should run a special thread titled: Lets Admit Things We Were Just Wrong About.

I will start the ball rolling with this:

When oil prices were rising in 2008 I thought, as the oil supply diminished, oil prices would just keep rising until they were way above $200, possibly even reaching $300 a barrel.

I wuz wrong. Not that I have not been wrong about other things but this is the only one I can think of right now... ;-)

Ron P.

I was in the same price camp as you, but I generally tried to stay clear of specifying when we would see multiples of $100 oil. But did expect to see an annual price in the $60 range in 2009? Nope. I do think that the progression in year over year annual oil price declines is very interesting. From $14 in 1998, to $26 in 2001, to $62 in 2009. If this pattern holds, the next year over year price decline will bring us down to the $120 range.

Regarding being open to opposing points view, I emailed Elwood (who has made several posts about Saudi condensate reserves) this morning and asked him if he could send me some supporting information regarding Saudi condensate reserves.

Don't hold your breath. Elwood is way out in left field on this one. Condensate, as the name implies, condenses out of natural gas. Saudi is desperately short of natural gas.

Great News For Oil Prices: Saudi Arabia Is Building Its First Nuclear Power Plant

According to the EIA, Saudi Arabia is the largest oil-consumer in the Middle East and one of the largest sources of oil consumption growth is electricity production since the nation must burn oil during the summer to generate electricity. Thus any power generated by a nuclear reactor frees up oil for export. This means more oil to sell for Saudi Arabia and more oil supply available for the global market.

The only way to produce condensate is to produce natural gas. And Elwood is claiming they have massive amounts of condensate. That means they must have massive amounts of natural gas. It would be much cheaper for Saudi to burn all that natural gas to produce electricity instead of that precious high priced crude oil. But they still burn oil to produce electricity.

So when Elwood shows that they have stopped burning crude oil for electricity and are burning some of that khuff gas he is always blowing about, then you can give some credence to what he has to say.

And when they do I will be the first to say "I Wuz Wrong"!

But as I said, don't hold your breath. ;-)

Ron P.

Peak oil is now-ish. There's been plenty of good analysis showing that to be true, and that's really close enough to be useful. It does not matter much if next year we eek out a slightly higher production rate (especially if it's by juggling the numbers, counting various other fuels, etc.). Making predictions on the exact year is a fool's errand that just sets people up for the game of gotcha Lynch is playing now.

The society at large is not going to use the information about the exact year of peak oil production in any proactive way. That knowledge has existed since the 1950s, and we have the peak in US production in the 1970's as an example. "We" will not do anything - other than fight.

Take the long view - try to understand the implications of PO. Use that knowledge to make as many useful changes in your life as you can, understanding that it may not be enough. Take action on a personal, local level and don't worry about Lynch and the others. They really do not matter at all.

(I just stuck this at the end of the thread Ron, I know I'm not telling you anything new!)

Peak oil is now-ish.

Yeah, that is what I have been saying for about five years now.

Ron P.

Within a decade or so is good enough precision. If you knew the exact year, or month or day, what difference would it make?

In a few hundred years likely no one will remember Lynch or any of us, and few will really understand about peak oil either. Anyone alive then will be living a very different existance. But it is still possible that something I do now could make a useful difference to someone then (maybe, if I get lucky) - I just think that it's unlikely to be through arguing about the exact date of the peak.

I see no evidence to counter the timing of "now-ish", and an awful lot to support it.

Saudi is desperately short of natural gas.

really ?

here is ksa gas production from bp statistical reviews:

year: bcm production

1992 38.3
1993 40.0
1994 42.8
1995 42.9
1996 44.4
1997 45.3
1998 46.8
1999 46.2
2000 49.8
2001 53.7
2002 56.7
2003 60.1
2004 65.7
2005 71.2
2006 73.5
2007 74.4
2008 80.4
2009 77.5

were you perhaps expecting them to produce it all in one year ?

if i were the king of saudi arabia, i would have order it done.......yesterday, but i am not, so i have to live here in reality.

what color is the sky in your world ?


Apparently they started burning their very high priced oil in their boilers to produce electricity last year, 2009 and are still doing it this year. They also burn a lot of gas and oil to produce water. They have the largest desal plants in the world there.

Looks like, from your data, that gas production started to drop in 2009. Strange, with all that khuff gas coming on line it should have been the other way around.

But they are still burning oil in their boilers. If they had all that khuff gas that you claim that would not be happening.

Ron P.

you are not getting it.

rhetorically speaking, why is the us burning imported ng when all that coal is available ?

aramco is developing gas and condensate in ghawar, got that ?

non associated gas production which you apparently claim is non existant has been increasing more or less steadily since at least '93.

so any reasonable person would agree that aramco has been able to significantly increase gas production.

So when Elwood shows that they have stopped burning crude oil for electricity and are burning some of that khuff gas he is always blowing about, then you can give some credence to what he has to say.

aramco is burning some of that khuff gas,in fact aramco is producing 102 % of what was produced in '93.

i doubt you will be able to understand that.

drilling and equiping sour gas wells takes time, got that ?

installing sour gas processing equipment takes time, got that?

It would be much cheaper for Saudi to burn all that natural gas to produce electricity instead of that precious high priced crude oil. But they still burn oil to produce electricity.

when you are king of saudi arabia, you can do that. their domestic petrochemical industry might object, however.

here, i will link the articles westex asked for. when you finish reading these articles, please feel free to discuss the subject further:

a study of ghawar permian khuff condensate has to start with the south pars/north dome field of iran and qatar:


you are probably aware of this aapg article:

Ghawar: The Anatomy of the World's Largest Oil Field*


Figure 1 shows the khuff permian gas reservoir covering nearly all of ghawar.

and a pdf showing the figures from the aapg article:


and of course, greg croft has this available for $850 which has a section on the permian khuff.

The Ghawar Oil Field, Saudi Arabia


here are three articles discussing khuff gas condensate in place in a general sense:

Khuff Gas Condensate Development


“This paper addresses some key reservoir and production issues related to gas and condensate recovery from Khuff reservoirs in the Middle East – namely Ghawar Khuff, North Field and South Pars. These fields represent somewhere between 1,000 and 2,000 Tcf initial gas in place , with 30 to 70 billion barrels of condensate in place.”

[1]1 Potential Petroleum Resources of the Paleozoic Rocks of Saudi Arabia)


“Although these `retained areas' constitute only about 15% of the sedimentary basins of Saudi Arabia, they include 255 billion barrels (40 Gm3) of oil and 181 trillion cubic feet (5.1 Tm3) of gas, or 27% and 5% of the world's oil and gas reserves, respectively (Tartir and Shamlan, 1990). The first Paleozoic hydrocarbons were….”

Paleozoic Gas Exploration in Eastern Saudi Arabia during the Last Decade


from there, we move on to the condensate content of ghawar permian khuff and devonian jauf:

Modeling a Rich Gas Condensate Reservoir with Composition Grading and Faults


“The Hawiyah Jauf Reservoir is a complex structural-stratigraphic trap located along the east flank of the uplifted Ghawar structure. The two important aspects of this reservoir are fieldwide composition variation and reservoir compartmentalization. The reservoir fluid samples obtained during developmental drilling show remarkable differences in fluid properties and condensate yields. The condensate yield of collected samples varies form more than 250 STB/MMscf to less than 100 STB/MMscf, and the reservoir fluid at the gas-water contact exhibits the near-critical behavior. Furthermore, the complicated fault system subdivides reservoir into several major compartments.”

Quantifying Production Impairment Due To Near-Wellbore Condensate Dropout and Non-Darcy Flow Effects in Carbonate and Sandstone Reservoirs With and Without Hydraulic Fractures in the Ghawar Field, Saudi Arabia


“As the gas bearing formations are found across the greater Ghawar area, the gas quality varies considerably from North to South. The condensate yield varies from 30 bbl/mmscf for lean gas to 300 bbl/mmscf for very rich gas. Lean gas has been in production for more than a decade. Gas from condensate rich reservoirs has entered the production stream recently.*”

*that article was presented in 2002.

Compositional Grading in the Ghawar Khuff Reservoirs

“It was found that both condensate content and hydrocarbon compositions decreased with depth and/or temperature while acid gas composition increase with depth. The composition of hydrogen sulfide varied from zero, at a threshold depth and temperature, to over five mole percent at greater depths. The observed variations of composition with depth were contrary to what would be expected from gravity-chemical equilibrium considerations.”

It doesn’t appear that much is published about basic reservoir properties except many references to the variability of rock porosity and permeability.
this one gives pressure and temperature estimates for jauf and khuff formations in the ghawar area:

Sensitivity Study On Geomechanical Properties To Determine Their Impact On Fracture Dimensions And Gas Production In The Khuff And Pre-Khuff Formations Using A Layered Reservoir System Approach, Ghawar Reservoir, Saudi Arabia


“The reservoir is deep with an initial pressure of 8,750 psi and temperature of 301° F. The fluid gradient is on the order of 0.15 psi/ft.”

“Khuff reservoir in South Ghawar, Saudi Arabia is a heterogeneous tight carbonate formation. There is a wide variation in formation permeability and porosity within 100 to 200 ft of formation thickness. The formation constitutes mainly of dolomite and limestone with streaks of anhydrites that act as non-producing sections and possible barriers. The reservoir pressure is on the order of 7,500 psi with a fluid temperature around 280° F.”

this one from october, 2007 gives an overview of some of the gas condensate projects going on in ghawar:

SAUDI ARABIA - The Arab Light Producers - Ghawar Group


and here is saudi aramco’s discussion of their mega projects, june 2008

Saudi Aramco's Mega Projects

i beg leanans forbearance on posting these extensive links.

...he is always blowing about...

what the hell is wrong with you ?

But they are still burning oil in their boilers. If they had all that khuff gas that you claim that would not be happening.

They may not have the pipe infrastructure to get the gas from the field to the consumption point.

But I bet they have the infrastructure to get oil from production to transhipment point and can move oil as need be to the consumption point.

But I bet they have the infrastructure to get oil from production to transhipment point and can move oil as need be to the consumption point.

that would require understanding something that would make it difficult to hold onto pre-concieved ideas.

yep, the information is in the email.

No one claims that peak won't happen( well, I can't speak for the abiotic types, but I don't know how seriously they are taken). I am simply saying that after the odd multiple decades, or centuries, of making bad peak/running out predictions, learn from them and do better next time. Don't just recycle the same bad ideas every couple of half decades or decades, and pretending its any more valid this time. Thats all I'm saying.

Phew, what a relief! Good to know we no longer have to worry about the peak. By the way, would you mind pointing out where all this oil is that we've discovered?

By the way, would you mind pointing out where all this oil is that we've discovered?

Since when? Saleri seems to cover the size of what we've discovered to date pretty well, no point in reinventing the wheel. Figure 1 being the interesting one of course.


Whats wrong with using all THAT stuff before we worry about going out and finding MORE?

Yes, Saleri seems to cover it alright, by invoking an assertion.

From a previous comment of mine:

I've uploaded Richard Nehring's presentation from the ASPO 2007 (Houston) conference. He has done significant work on the extent of reserve growth we might be able to expect and distinguishes how near-peakists and late-peakists view reserve growth. (He calls it 'recovery growth' in his presentation.)

His view is that for the near peakists recovery growth doesn't have time to make a material difference while for the late peakists recovery growth is what allows for there to be a late peak.

Note that he further points out that reserve growth has "Only a modest effect on the maximum level of world oil production" but "A significant effect on how long high levels of world oil production can last." This is just a product of the math but it's worth pointing out.

In other words, he is saying that we can stay on a plateau for much longer — if the recovery growth can match the decline rate.


I concluded when I was studying this part of the picture that recovery rates weren't currently increasing in the manner needed to extend the plateau. Further, I concluded that they were unlikely to suddenly rise to the occasion considering how expensive EOR is and how long it takes to institute the various extended recovery techniques. Nehring's rebuttal to that is the familiar "high prices will solve that." (Slide 22)

Now that we have a history of high prices, it would be interesting to see if there are in reality more/larger fields doing EOR. The megaprojects databases tell us whether more fields are being put into production (and it appears the high-price hasn't done much/anything for that).

In other words, he is saying that we can stay on a plateau for much longer — if the recovery growth can match the decline rate.

Excellent way to look at it. If you look at an individual field, the initial estimate is used to determine the maximum extraction rate. If the reserve additions are made to maintain that rate to counteract the exponential decline, the curves end up looking like this:

This looks artificial but then again the accounting rules for estimating reserves is a bureaucratic artifice. The typical field never shows a long-lasting plateau and it ends up looking more like the dashed curve below.

Basically what you're saying is because a group which you label as peak oil forecasters has been wrong before, then all future forecasts made by any else who predicts PO must also be wrong. But that logic has some problems -

First of all, where is the evidemce - five years after PO - that a new peak is on the horizon?

Secondly, if we label a group of all those who didn't predict PO before but have predicted it in the future, wouldn't everyone in this group, including you, be wrong for failing to realize a peak is occurring?

Thirdly, just because they were wrong before, with less information, that does not prove they will be wrong the next time.

By your logic, for example, if the medical profession has been wrong before about something, say the flu, they could never be trusted again, and therefore if you had a bad flu, you would rather rely on your own opinion about medicine and treat yourself with what you have on hand at home, since you have told us so often credibility is entirely ruined when a prediction doesn't pan out.

Boy, I certainly didn't say all that, or even imply it. And advocating doing the same thing over and over again and ignoring how wrong it was last time is hardly a recipe for doing it right this time. Evidence of a new peak on the horizon? Sure, go drill 10,000 wells into the Orinoco tomorrow and presto, new peak. Big deal, creating a new peak at a moderate cost isn't the main issue.

I certainly didn't say credibility was "entirely ruined" just because one prediction or another doesn't pan out. That would lead me to discount all of Hubberts work as a geoscientist just because he got 3 of his 4 1956 predictions wrong. Now, discounting the validity of his model, that is perfectly legitimate.

How about we all advocate doing it RIGHT this time, instead of just doing the old wrong stuff over and over again?

No, all he was saying is that Bayes Theory always seems to work. Prior knowledge can always be used to improve the next prediction.

The only people that you can prove wrong are the ones that "shorted" the peak date. There might be just as many out there that made a "long" estimate, but you can never officially say they were wrong, unless we are way down the peak. That is another reason it makes no sense to complain about how many people were short on the prediction. The bias will always be in that direction.

Put Bayes and this observation together and you can really make some progress. This is what I posted last year:

Even though a substantial spread exists in potential outcomes, we have to consider that most of these have occurred in the past and we should discount negative results in any future projection. In other words, since nearly half of those that show large variance in peak date have occurred in the past, we can eliminate the possibility that an alternate history will put the actual peak much beyond the next decade. One can justify this argument by simply considering adding Bayesian priors and running the Monte Carlo from the current date. I believe that this spread in outcomes has probably contributed (along with unanticipated reserve growth) to the usual problem of jumping the gun at predicting a peak date.

Prior knowledge can always be used to improve the next prediction.

The key word being CAN. Doesn't mean it actually IS.

True that no one has really applied Bayes.

You can blame the vanishingly small intellectual curiosity within the geology community for anything related to resource depletion for this state of affairs.

How else can we explain this situation other than to say that no one seems to care. The way the media works, the geologists would be considered the "experts", but when asked, of course they wouldn't have a clue simply because no one does this stuff.

The one caveat is that they do use Bayes if it has anything to do with improving extraction effectiveness. I saw a paper recently by a Canadian university in a central province that used Bayes techniques to enhance their exploration imaging techniques. So when money is at stake, of course they will use it!

You can blame the vanishingly small intellectual curiosity within the geology community for anything related to resource depletion for this state of affairs.

No...you can blame microscopic perspective of the geologic community. Claims that they don't use probability methods for example...and then it turns out they use them all the time and have entire professional organizations devoted to the mathematics of the geosciences, including that which incorporates probability. That isn't the geologic communities fault, its yours for not checking first. Claims that oil depletion is a new topic no one is paying attention to when federal regulations were being written to codify regulations determined by it before you were born.

Anyone can say make any prediction they want. That's akin to reading restaurant reviews.

What is important is the analysis. I am sure that David White pulled out his Probability & Statistics 101 book back in 1919. Yeah, that's the ticket. :)

What is important is the analysis. I am sure that David White pulled out his Probability & Statistics 101 book back in 1919. Yeah, that's the ticket. :)

Why would he need to? Can you actually reference a single future prediction of global oil production which even takes into consideration the frequency of how often Hubberts profile is predictive in nature?

How about this one, can you reference a single future prediction of global oil production which puts a density function of some sort on the size of the undiscovered resource yet to be produced which must be added to reserves to get the correct endowment to even fit his bell shaped curve to...the 1 time in 4 it may know what its doing with that information?

Doesn't do much good to have statistics if ya ain't using it.

I am not even sure what you are referring to.

Let me put it this way: I don't really care how people in the past got something wrong. If they did it wrong, nothing I can do about it. All I can do now is apply the best practices of analysis to the data at hand. Of course if I had a time machine and could go back to the 1950's knowing all the recent advances in probability theory, I could probably make much better predictions than Hubbert could.

BTW, What exactly was in that recent issue of Mathematical Geology that you were referring to? And why do you even read recent research reports? If you claim that people make the same mistakes over the years, like the guy in 1919, why do you even bother to even keep up? According to your logic it is all wrong in any case.

BTW, What exactly was in that recent issue of Mathematical Geology that you were referring to? And why do you even read recent research reports?

Well crap, I had the reference a week or so ago when you claimed last time that geologists didn't do stochastic/probability stuff, its sitting on my desk, I'll get it for you tomorrow. After finding it just by title to refute your claim that geologists don't do that type of stuff, I actually went back and read it. Fascinating stuff.

And....why do you even read recent research reports... are you KIDDING? I read everything I can get my hands on as of late. While I have concentrated on practical subtopics within the resource depletion debate over the past 5 years, you could say...I am expanding my focus as of late. :>)

Ah, but the devil is in the details. This table appears at the end of the report:

The peak in the 1990s only occurs in scenario I (Present Conditions) whereas the other two scenarios (Moderately Enhanced Conditions and National Commitment) push off the peak until sometime between 2000 and 2010!

So, what were the "Present Conditions"?

This scenario projects future oil and gas production as if the uncertain policy and financial conditions of 1976 remained in effect through 2010. It depends on the following assumptions.

* Price controls on domestic oil and gas remain in effect and keep domestic oil and gas prices below world market prices.

* Current environmental considerations, including requirements for environmental impact statements and strict environmental quality standards, remain in effect.

* Public lands continue to be withdrawn from exploration.

* Development of the outer continental shelf continues to be a two-stage process, involving both exploration permits and federal and state production permits.

* Exploration and production technology continue to evolve at current rates.

In other words, a peak occurs in the 1990s if everything goes wrong. What about the moderate scenario?

Moderately Enhanced Conditions Scenario

This scenario projects oil and gas production under a set of assumed government incentives. The assumptions are the following.

* Federal offshore areas are leased at an accelerated rate.
* The offshore permit process is streamlined.
* Wellhead prices for “new” gas are decontrolled.
* Evolution of exploration and production technology accelerates modestly, mainly because decontrolled prices make enhanced recovery economical.
* Transportation of natural gas from the Alaskan North Slope is available by 1985.
* There is no change in land availability.
* Environmental regulations, including environmental impact statement requirements and environmental quality standards, remain in effect.

Whoa, I got this one wrong. I thought they were referring to world production, but they are talking about domestic production? So, they really are in the Michael C. Lunch camp after all? What were they thinking?

The gasoline from thin air article was in the Daily Telegraph a few days back: It is great example of magical thinking: At some point in the far, far distant future, we may be able to produce a small amount of gasoline from thin air at some hideous EROEI if a series of incredibly improbable technical advances and huge genetic engineering and enzymatic obstacles are overcome and a source of high purity carbon monoxide can be found at a cheap enough cost.

This is just such magical technofairy guff, designed to continue the false hope of "Happy Motoring" forever.

I would back Douglas Adams' Infinite Improbability Drive as our future automotive power source over this source any day.

Clean energy: China charges ahead of the world

Environmental disasters and China's reputation as a prime polluter have driven some of that urgency. The country has become the world's largest energy consumer and its biggest carbon emitter.

Now it's investing billions of dollars in greener, more efficient energy production. Recent incentives and policies encouraging alternative energy have helped Chinese companies leapfrog over competitors to lead the world in areas such as solar power.

As a result, much of the manufacturing for photovoltaic cells and panels has gone to China.

I'd also encourage anyone interested in China energy issues to review the in depth Publications put out by Berkeley Lab's China Energy Group. These reports are absolutely top notch.

(TOD member Sparaxis is apparently a member of that group.)


"Gwynne Dyer: Russian response to wildfires gives an early glimpse of climate change impact"

From the above article :-

"The rule of thumb is that with every one-degree C rise in average global temperature, we lose 10 percent of global food production. In some places, the crops will be damaged by drought; in others by much hotter temperatures. Or, as in Russia’s case today, by both. "

This is rather alarming, with population growing as it is...when are the majority of people going to catch on ? I guess we'll know when the price of pizza in the developed world goes up...(from yesterday's CNN headline)

I would add flooding to that list of constraints; (interesting that an organization with links to Al Qaeda has been the most effective at suppling aid.)

"Pakistan floods 'hit 14m people'"


"According to the federal flood commission, 1.4m acres (557,000 hectares) of crop land has been flooded across the country and more than 10,000 cows have perished.

A UN official, Manuel Bessler, told the BBC that with crops swept away by floodwaters, some Pakistanis could be forced to rely on food aid to get through the winter."

There's another disaster being reported today :-

"Landslides kill at least 127 in China"

"...The landslides occurred early Sunday morning after heavy rains started pummeling the area Saturday, authorities said.

They caused the Bailong River to become obstructed and overflow, and sent water rushing water over its banks, state-run CCTV reported...."

Food aid is being requested there too.


One has to start wondering where all the food aid is going to come from.

The real game changer may be climate change reducing global grain supply.

the world runs on seeds (grains).

Asia flooding plunges millions into misery ......


Your link don't work. Try this one:
Asia flooding plunges millions into misery

BEIJING — Floods and landslides across Asia plunged millions into misery Sunday as rubble-strewn waters killed at least 127 in northwestern China and 4 million Pakistanis faced food shortages amid their country's worst-ever flooding.

Ron P.

From the above article ....

"Moscow has just banned all grain exports for the rest of this year.

At least 20 percent of Russia’s wheat crop has already been destroyed by the drought, the extreme heat—circa 40 º C for several weeks now—and the wildfires. The export ban is needed, explained Prime Minister Vladimir Putin, because “we shouldn’t allow domestic prices in Russia to rise, we need to preserve our cattle and build up supplies for next year”. If anybody starves, it won’t be Russians. "

Exactly what is peak oil? Different Takes On Peak Oil, Same Result – Price Spikes Predicted

Peak oil is more an economic and political phenomenon than it is a geological phenomenon. I think we’re past $40 peak oil but I don’t think we’re past $200 peak oil. There are technologies, as an example, miscible CO2 flooding to recover oil from allegedly depleted oil fields. There are new basins, albeit remote, frontier basins. There are new technologies that allow dry gas or LNG to be substituted for liquid oil. It’s an economic function because these technologies and substitutions require higher energy prices. At $200 oil, we’ve got lots of oil.

That was the answer Rick Rule, founder of Global Resource Investments, Ltd. gave when asked what he thought about Peak Oil. I do not agree with that at all. Of course both economics and geology plays an important role in when oil peaks, but peak oil is when the flow of oil peaks, regardless of the cause!

If oil rises to the $200 level it will be because that geological constraints have held up production and we have, at the same time, a robust economy that demands and can afford $200 oil. And that is not bloody likely in my opinion.

People talk about demand outstripping supply. This is just wrong. This cannot possibly happen as long as price is the arbitrator. The price will always rise until enough demand is killed so that the supply equals exactly what is demanded. This is what happened in 2008. The price rose to over $140 a barrel but there was always enough oil... at that price.

What a lot of people forget is that all this has a dramatic effect on the economy. Higher oil prices pull more money out of the economy, keeping things in doldrums. It keeps unemployment high, it pulls billions per day out of the economy of importing nations and makes it very difficult for their economies to recover.

So what is peak oil? It is when the flow of oil pumped from the ground peaks. That is exactly what it is, nothing more, nothing less. The question then becomes "what causes peak oil?" Is it geology, politics or economics? Of course all three determine exactly when oil peaks. But geology determines the scarcity of oil and as oil gets harder to find and more expensive to produce then economics will determine how much of that scarce oil will be produced. And one will always affect the other.

Ron P.

I love that -- $40 peak oil vs. $200 peak oil. Ha. How about $82.32 peak oil? $78.47 peak oil? So I guess we can have a new peak with each price movement.

economic or political or geological phenomenon

I would consider it a phenomena that has slipped though the cracks. No definitive geology text has done any serious work on the topic. And of course, all contemporary economics theories do not trouble themselves with resource constraints.

Since no one wants to claim ownership, I would call it an econophysics phenomena since at least this discipline acknowledges that statistical aggregation plays a huge role in our understanding of behaviors.

Yeah, the last time you said something like that someone else pointed out the obvious. I assume you didn't catch it, otherwise you wouldn't keep saying it.


How dare people actually get together and talk about math and geology!


Or publish journals which have stochastic modeling and geology!


"How dare people actually get together and talk about math and geology!"

...and what good has it done us?

Improved seismic comes to mind, but don't let me introduce any practical applications into the topic if it was just meant as a rhetorical question.

And improved seismic certainly was a game changer in Texas and the North Sea, which accounted for about 9% of total cumulative global crude production through 2005.

Yup, its been one of those technologies which has improved quite a bit even in the few decades I've been kicking around the business. I'm always surprised people challenge into a "gee what good has that math and science stuff done for us" when the results on any reasonable time scale are so obvious in some many different areas. Top drive systems, MWD, LWD....power tongs! (can't forget floorhands). Seismic, synthetic mud systems, all the technology which makes drilling in 5000' of water possible, let alone profitable.

And perhaps the same kind of improved technology can keep other producing regions' post-peak decline rates down to the 3.5%/year and 4.6%/year decline rates that we have respectively observed in Texas & the North Sea.

And that is why the dispersive discovery model has an exponential increase in search rate.

However even with this exponential increase, the model predicts diminishing returns.

Model schmodel. Its been diminishing returns since the Orinoco was found in 1935, I don't need a model to compare it to any other discovery year to tell me that.

But we have to ask if it is diminishing returns counter-acted by furious effort or by a gradual back-off. This makes all the difference in the world in what kind of tail we see.

Then you must define "furious" and "gradual". And that is a question with both raw oilfield activity such as drilling rates, the success of that rate (it has been increasing as of late), the economics of investment for the large scale projects which can't easily be bootstrapped out of cash flow, heck, even the transition into the unconventionals and the balance of that development against continued reserve growth in existing conventional fields.

Where would you propose to start?

I already started. On this TOD post, I used a power-law acceleration which is not as aggressive as an exponential growth and bumped the URR from 2 to 2.8 trillion barrels. This barely budged the position of the peak.
The key point is that a huge amount of excess discovery can sit in the fat tail, and if we don't show the same aggressive search, we won't see the benefits apart from an extended long slow decline.

People don't appreciate these subtleties, because to see the effects you have to do the math. But few are willing to do the math.

I really doubt you can find this kind of analysis anywhere in the literature.

I already started. On this TOD post, I used a power-law acceleration which is not as aggressive as an exponential growth and bumped the URR from 2 to 2.8 trillion barrels.

Cool. Now, what basis do you have for using a power law function to accelerate ANYTHING? Are you claiming that it naturally exists within human economic activity? Or in the oilfield specifically? Is it a natural tendency in discovery process modeling perhaps? The urge happened to strike you some particular afternoon? Do you treat it as some engineering fudge factor?

And this change in URR, what is your basis for the number you use, let alone deciding to increase it for fun by 40% over your past estimates? Did you base your URR on the endowment work of Rogner? Nehring? Saleri? There aren't many reputable sources for those numbers, and certainly yours look extremely low even if we do it like Hubbert did, which would assume a similar level of development in the world as was in the US in 1956. I think the world is much less developed than the US in 1956, but for the sake of argument, lets calculate it on Hubberts ratios. Hubbert in 1956 basically scaled up 82 BBO into 150 BBO or 200 BBO URR scenario's using the equivalent of back of the envelope resource assessments for various regions? Did you derive your number like this? If so, the approximate URR would look something like this:

[1000 (cumulative production) + 1200 (current reserves)] X 1.82 or X 2.4 which calculates out to a URR of 4 trillion barrels or 5.2 trillion. Those numbers would certainly fall into the range which Richard Nehring talks about, perhaps a smidge high.

So why are your numbers so much lower? Do you honestly believe that Saleri's endowment figures of nearly 14 trillion can yield only 20% recovery? Thats not even a really good primary recovery efficiency for decent conventionals, and the heavy oil efficiencies have gotten downright ridiculous, unless you are assuming in advance that us petroleum engineers are going to suddenly forget everything we learned in the heavy oils of the Kern River field, an unlikely scenario.

To heck with the fat tail, if you can't establish the basis for just these two entry level positions, whatever you make up for the fat tail, skinny tail, make believe tail, is irrelevant.

So, whats the basis for your beginning?

I explained the power-law usage right in the post.

I have to chuckle at the rest of your panic-stricken questions. I actually did a post where I created an infinite URR showing a tail that went as 1/Time and you can find that the peak position still does not change that significantly.

So those huge discoveries you claim have to occur as close to "now" to have any effect on increasing the peak. Human greed plays such an important effect that if we did have those discoveries now, then we would have much higher production rates, and we would be using and essentially wasting oil for the most trivial applications. One thing you fail to understand is the fundamental greedy nature of humankind.

So to get this 5 trillion available now, you would have to decrease the extraction rate by a factor of 2. So let it be known that ReserveGrowthRulz2 says that the relative extraction rate is in the 2% to 3% range, instead of the more acceptable 5% or higher. I am sure you would get a lot of credibility among your colleagues if you were known as the guy that believed in a 2.5% extraction rate.

And once again, I don't care what Hubbert did. I just do the math but with your "20 Questions" approach, I won't immediately drop everything and punch in some numbers that were simply assertions.

I explained the power-law usage right in the post.

Oh...you explained all sorts of things in the post. I noticed an entire slew of wonderfully intricate curve fitting techniques attached to a partial discovery profile. In the mathematical world is it normal to use bell shaped curve discovery profile things when the actual data doesn't fit that profile?

Certainly I can't get away with that sort of distortion in front of the geologic community, maybe mathematicians don't mind those types of schenanigans?

I have to chuckle at the rest of your panic-stricken questions.

The basics is the basics, and hardly voiced in a panic manner. And why all the distortions of my questions? I don't claim that discoveries have to be now, but I certainly will maintain that you must reflect at least the past as reasonably as possible. I'm not even sure what you are talking about with "extraction factor", so I certainly can't be tagged with assuming it might be 2-3% when no one has ever presented me with a coherent definition of it within the industry in question, certainly I've never been asked about in under oath either. And if I don't know what this particular "factor" is, it is unlikely my colleagues will either, we tend to use the same jargon and language. Maybe there is an equivalent in the oilfield and you are making up njew names to confuse the issue?

As far as your math and the 20 questions approach, I'm not sure what you are referring to. So far math has been the mostly wonderfully complex thing I've ever seen to do something as simply as fitting a particular string of data.

Is there any reason you just don't advocate using Excel instead? Maybe you could do a guest post on that? Works for the average Joe, supplies them with the same thing you generate and with orders of magnitude less complexity, much more useful than all the showing off. Complexity for its own sake is rarely an advantage.

Or publish journals which have stochastic modeling and geology!


It is now called Mathematical Geosciences, since the last article got published in 2007. Apparently Mathematical Geology isn't that expansive a subject so that they have to include all of geosciences.

BTW, You and your predictable 20 Questions approach still haven't explained what that great paper in the recent Mathematical Geology/Mathematical Geosciences is all about.

I'll fetch it for you tomorrow.

Just listening to the fervent drive to deliver 'Good News' from the Gulf this morning had some of these words ringing in my ear.. a distant echo..

Martin: Charlie take me out to those kids will ya?
Vaughn: Martin? Martin, you gonna shut down the beaches on your own authority?
Martin: Well, what other authority do I need?
Meadows: Well technically you need a civic ordinance or a resolution by a
board of selectives -
Vaughn: That's just going by the book. We're really a little anxious that
you're, uh, you're rushing into something serious here. It's your first
summer you know.
Martin: What does that mean?
Vaughn: I'm only trying to say that Amity is a summer town. We need summer
dollars. If the people can't swim here they'll be glad to swim at the beaches
of Cape Cod, Hampton, Long Island.
Martin: That doesn't mean we have to serve them up a smorgasbord.
Meadows: But we never had that kind of trouble in these waters.
Martin: But what else could have done that to that girl?
Vaughn: Boat propeller?
Medical Examiner: Well, I think, uh, possibly, uh, yes a boating accident. A
boat -

Jaws - screenplay by Peter Benchley, Carl Gottlieb

Uh oh, there I go with the Spielberg films and those darned 'Fear Tactics' again.

"Come on in y'all, the water's fine!"

Interesting article on Nevada Geothermal electrical production. Expect 2.2 to 3.5 GW of production soon.


But new transmission lines to cross prehistoric fossil area in contension. Reason: transmission lines can miss the immediate fossil area but they are ugly and will spoil the view in the 50 square miles of the proposed fossil national park where kids can dig up artifacts (huh?).

Of course, a coal fired plant can be built most anyplace but those 500kva transmission lines from geothermal sites in the outback are really really ugly. /sarcoff

I don't know if anyone posted this yet, but if not, here is a public pension story:

Battle Looms Over Huge Costs of Public Pensions

State and local governments promised their retirees at least $1 trillion more in benefits than they have in their pension plans, leading to battles over who should pay to fill the gap.

We have entered a "civil" civil war. I don't know if it will stay civil, but their are numerous battle lines drawn. Interesting that the NYT takes a position against public unions keeping their pensions intact.

It's much worse than $1 trillion...and the remaining so-called "funded" pensions are often expecting 8% growth rates. More like -8% growth rates are in the future, in my view...

I hate to beat a dead horse, but better than a live one I guess. With all the talk of old predictions being wrong, it's useful to remember that good ol' MKH got it right way back in 1976 when he said that peak was due in 1995 but due to OPEC "tampering" with supply, the peak might be pushed back by ten years. That would be 2005. Which was the year that annual crude oil production peaked?

1976 Hubbert Interview

In his 1956 paper, he said that the global peak year was uncertain, but he thought that it would be within 50 years, i.e., by 2006. Regarding his 1956 paper, he basically made two If/Then statements--If Lower 48 URR are 150 Gb, then the Lower 48 peaks in 1966 and if Lower 48 URR are 200 Gb, then the Lower 48 peaks in 1971. Key point is that a one third increase in projected Lower 48 URR only postponed the projected peak by five years.

Pipeline would ship oil and jobs south
Article in Toronto Star from president of Communications, Energy & Paperworkers Union regarding bitumen pipeline from Alberta to US refineries.

An unlikely coalition of Calgary oil workers, Nebraska farmers, Michigan mothers, Greenpeace shock troops and a powerful U.S. congressman have a chance to achieve what many thought impossible — bring a Canada-U.S. oil pipeline project to a screeching halt.


Rammed through despite serious opposition, the first Keystone, built by TransCanada Corp., cost Canada thousands of jobs. An analysis by the Informetrica think-tank demonstrated that besides exporting 400,000 barrels of heavy crude a day, it also shipped out 18,000 high-paying Canadian jobs. Twice the size of TransCanada’s first Keystone is the new project, Keystone XL. It will shoot out 900,000 barrels of heavy crude in a one-way ride to the U.S. The number of jobs lost is expected to be more than double the 18,000 already gone.

Canadian governments, since the mid-1980s, have been happy to feed America's energy addiction to maintain a favourable balance of trade. As long as there were plenty of other jobs - spun by ever increasing exports to the U.S.- nobody much cared, especially politicians and businessmen.

After last week's announcement that unemployment has risen in Canada to 8% with the loss of 139,000 full time jobs in July (along with ominous signs of further U.S. slump) be on the watch for a more protectionist mindset north of the 49th parallel. What was unthinkable six months ago - saying no to the insatiable American energy market - could become very politically savvy if conditions continue to sour. Canadians are nice when it is profitable to be so, less so when not. What's more, our politicians are aware that we vote, like the rest of the world, according to our pocket books.

P.M. Stephen Harper has been successful so far in convincing Canadians that the oil patch and the national interest are one and the same. Yet the public is highly fickle. The idea that 36,000 high paying jobs may be whimsically exported to the U.S. won't sit well in an atmosphere of rising unemployment.

Harper is keenly aware that his early summer lead in the polls has evaporated. Furthermore, he's been known to turn 180 degrees for the sake of political expediency. He wants a majority. A minority he can live with. Losing out to the opposition is not in his game plan.

Ever the policy wonk and opportunist, Harper could become as nationalistic on the energy front as Trudeau ever was, if he thought he would gain from it. Curtailing oil sands development through the control of energy exports would put him on the same page as former Alberta premier and fellow Conservative, Peter Lougheed. Moreover, while the Conservative Party in Canada is noted in history as having negotiated free trade, it is also the party that nipped earlier attempts at reciprocity. Harper can be as free trade or as protectionist as he wants to be and still live up to his party's reputation.

The funny part is that regulators in the U.S. may end up saving Harper the trouble by simply killing the Keystone XL project.