Drumbeat: January 28, 2011

Chevron exiting coal mining

CHEYENNE, Wyo. (AP) -- Petroleum giant Chevron Corp. said Friday it plans to get out of the coal industry by the end of the year.

The decision came after the company determined that new coal technologies were developing too slowly to make staying in the industry a good strategy, Chevron Mining Inc. spokeswoman Margaret Lejuste said.

One of the technologies is known as coal-to-liquids, in which coal is processed into a fluid that can be burned.

"Those technologies are so far into the future, 10 to 15 years in the future, they made the strategic decision to focus on other operations other than mining," she said of the company.

Oil Rises Most Since 2009 on Concern Egyptian Unrest to Spread

Oil surged the most since September 2009 as unrest in Egypt raised concern that protests would spread to major oil-producing parts of the Middle East.

Crude gained 4.3 percent after a day of clashes between police and protesters demanding an end to Egyptian President Hosni Mubarak’s 30-year regime. Any disruption to Middle East oil supplies “could actually bring real harm,” U.S. Energy Secretary Steven Chu said on a conference call.

What Are the Implications of Political Unrest in the Middle East?

For decades the Middle East has been ruled by totalitarian regimes. The United States’ foreign policy toward these regimes has been determined largely by two factors: The oil reserves in these countries and/or their policy toward Israel. Indeed, until Saddam Hussein invaded oil-rich Kuwait he was not considered a threat. After all he was a sworn enemy of Iran.

Brazil Petrobras: Output Halted At Campos Basin Platform

RIO DE JANEIRO -(Dow Jones)- Brazilian state-run energy company Petroleo Brasileiro SA, or Petrobras, said Friday that it had halted oil production at a platform in the Campos Basin after an accident last week.

US probing Gulf blowout preventer testing flap

NEW ORLEANS -- The U.S. government is investigating whether a Transocean worker's handling of a key a piece of evidence in the Gulf oil spill probe affected the integrity of the examination of the device.

Oil Equipment Foes Stand Down, for Now

The assemblage of residents and business owners leading an effort to block the shipment of massive oil processing equipment across northern Idaho appear to have given up — at least as it relates to shipments planned by the oil giant ConocoPhillips.

New York Floats Rules for Cleaner Heating Oil

Buildings in New York City would burn cleaner heating oil and emit far less pollution under proposed rules announced on Friday.

Brazilian Dam Clears Hurdle

A significant hurdle in the construction of a huge dam on a tributary of the Amazon river was removed this week when Brazilian authorities approved the clearing of hundreds of acres of forest at the dam site and the construction of new roads to service the project.

The Gaping Gap Between The Price of Nymex and Brent. Which is Right?

More than ever, the price of oil depends on where you look. Oil prices have sunk to a two-month low around $85 a barrel on the New York Mercantile Exchange, but ICE's Brent oil futures are soaring toward $100 a barrel.

The gap between the two prices--more than $12 as of Friday morning--is the biggest ever. Nymex March futures were recently trading up 0.3% at $85.85 a barrel, while ICE March Brent trades up 0.6% at $97.97 a barrel.

The yawning chasm between the two most widely quoted prices proves the power of a small Midwestern town on the global oil market. Nymex futures are reflecting steadily rising inventories in Cushing, Oklahoma, the oil storage hub where anyone holding a contract when it expires must either purchase or deliver real barrels of crude each month.

Egypt jitters spill over to U.S. energy sector

HOUSTON, (Reuters) - Escalating violence in Egypt hit the shares of Apache Corp on Friday and sparked worry the unrest might spread to other Middle Eastern countries where other U.S. oil companies, including Occidental Petroleum Corp, have operations.

US Chu keeping eye on Egypt protests and oil market

WASHINGTON (Reuters) - U.S. Energy Secretary Steven Chu declined on Friday to say specifically whether he is worried that escalating Egyptian protests could disrupt Middle East oil supplies.

"We watch these things very closely, but the best way America can protect itself against these incidents is to decrease our dependence on foreign oil," Chu told reporters.

Israel Has Faith Mubarak Will Prevail

"It seems now we have quite an earthquake," says the cabinet member, paying respects to the Al Jazeera satellite news channel and digital technologies that dispersed the power to communicate and organize. "In the time of [Egyptian president and Pan-Arabist] Gamel Abdel Nasser, Egypt had one radio channel and transistor radios were all allowed to listen to one channel."

A retired major general found other metaphors — and more cause for concern. "We need to understand that we are living on a volcano," Ya'acov Amidror, former head of the Israel Defense Forces' Research and Assessment Directorate, told the Jerusalem Post. "Conditions can change from today until tomorrow. We must ask ourselves, what is the worst case scenario. We are on thick ice, but even that melts eventually."

What protesters in Arab nations do -- and don't -- have in common

(CNN) -- Protesters who have taken to the streets in several Arab nations of North Africa are angry at their own governments, and lashing out over some specific problems in their countries. But what they're looking for -- and, in the end, what inspired them to stand up and demonstrate -- is very similar, experts on the region said Thursday.

"They all want the same," said Emile Hokayem, with the International Institute for Strategic Studies in the Middle East. "They're all protesting about growing inequalities, they're all protesting against growing nepotism. The top of the pyramid was getting richer and richer."

Today's Trends: Panning Out

Panning out the zoom on our lens, gasoline and crude prices are up 11% and 18%, respectively, compared to 2007 levels. Interestingly, foreign exchange rates (after posting steady growth over the last two years) are sitting exactly where they were in 2007. At present, the typical inverse relationship between crude prices and the US dollar is not holding to form. Spot oil prices are 5% below their YTD average, even while the US dollar has softened versus the Euro. A shift by traders to more emphasis on fundamentals and macroeconomic data would be the most obvious explanation for the recent correlation breakdown.

Mexico oil output hits seven-month high in December

MEXICO CITY (Reuters) - Mexican crude oil output rose to its highest in seven months in December aided by a rebound in production at the country's two largest fields, state monopoly Pemex said on Wednesday.

Pemex pumped 2.574 million barrels per day last month, up from 2.512 million bpd in November when production took a hit due to maintenance at Ku Maloob Zaap, Mexico's largest field.

Average oil output declined last year to a 20-year low of 2.576 million bpd but fell only 1 percent from 2009, the smallest annual decline since 2004 when Mexican oil output peaked at 3.383 million bpd.

Lower 48 U.S. Nov natgas output up from Oct-EIA

NEW YORK (Reuters) - Gross natural gas production in November in the lower 48 U.S. states rose 1.1 percent from slightly revised October output, data released on Friday by the U.S. Energy Information Administration showed.

Talisman suspended shale fracturing in December

CALGARY, Alberta (Reuters) - Talisman Energy Inc shut down its North American hydraulic rock fracturing operations for eight days last month following a fluid release at a shale gas drilling site in Pennsylvania, a spokeswoman said on Friday.

Lawmakers Get Crash Course on Marcellus Drilling

Some state lawmakers are getting a crash course in Marcellus Shale drilling issues, one of the most complex topics they'll confront this legislative session.

Brazil central govt primary surplus doubles in 2010

BRASILIA (Reuters) - Brazil's central government primary budget surplus doubled in 2010 compared to the previous year thanks to a strong economy and income linked to the capitalization of oil giant Petrobras.

WikiLeaks: For Norway, Oil Wealth and Humanitarianism Go Hand in Hand

To judge from the WikiLeaked cable, the combination of Norway's financial heft with its righteous ethical stance concerned American diplomats because, well, it disproportionately affects US corporations — specifically, America's highly profitable and politically influential arms manufacturers.

Aramco planning shutdown of gasoline unit at Jeddah refinery

Saudi Aramco, the state-owned oil and gas producer, is planning a maintenance shutdown of a unit that produces gasoline components at its refinery in Jeddah, a person with knowledge of the plan said.

Chevron 4Q Earnings Soar to $5.3B

Chevron reported earnings of $5.3 billion ($2.64 per share - diluted) for the fourth quarter 2010, compared with $3.1 billion ($1.53 per share - diluted) in the 2009 fourth quarter. Results in the 2010 period included gains of nearly $400 million from downstream asset sales. Foreign currency effects decreased earnings in the 2010 quarter by $99 million, compared with a decrease of $67 million a year earlier.

The disastrous impact of fuel crisis

MEDIA reports last week claimed that the National Oil Company of Zimbabwe (Noczim) had had their entire cash resources seized by the Zimbabwe Revenue Authority (Zimra) due to default in payment of fuel importation duties and other imposts.

The reports stated that, with the seizure of its funds, Noczim was unable to effect payment for the petroleum which it had purchased, which petroleum was in tanks at Beira, in Mozambique, pending forwarding to Zimbabwe through the Beira Corridor pipeline. As a result, the reports said, a fuel shortage in Zimbabwe was imminent, with a major scarcity already prevailing in Harare.

The energy crisis can be overcome if we switch off the lights when we leave the room

KARACHI: The energy crisis in Pakistan can be overcome if we individually make an effort to conserve energy.

Power shortage linked to unaffordable fuel cost

KARACHI: The power shortage is not due to lack of capacity but it is owing to unaffordable fuel cost while the issue of load-shedding could not be resolved unless theft and misuse of the electricity are halted.

Argentina Looks to Wind for the Answer to its Energy Woes

Buenos Aires, Argentina -- In 2004, Argentina received a wake up call. The Latin American nation experienced a deep energy crisis as a result of a shortage in natural gas caused by the demand for energy skyrocketing and outstripping supply. Since then the country has made a conscious effort to diversify its energy sources, with wind power attracting particular attention.

Fear of debt: Should I finance my dream?

The '80s farm crisis was a good example of how dangerous too much, or the wrong kind of, debt can be. But it's also true that if it weren't for the banks that line the main streets of farm communities across the country, there wouldn't be many farmers on the land at all.

In a perfect world, we wouldn't need an institutional loan to get our farm off the ground. But I've watched too many entrepreneurs try to eke their way through and fail, partly because they were under-capitalized.

John Michael Greer: The power that remains

The passing of fitness icon Jack Lalanne, who died last Sunday at the age of 96, called up a modest flurry of tributes and retrospectives in the media, and a great many of these made a point I don’t think their authors had in mind. If I’d tried to dream up an imaginary example of the way our culture’s obsessions distort our sense of history, I doubt I could have managed anything half so telling.

Bamboo bikes factory set to put Africa into motion

Bamboo is grown locally in many regions of Africa and the manufacturing of bicycle frames does not require costly infrastructure or electricity. Bamboo-framed bicycles are lighter and stronger than steel-framed bikes, adaptable to difficult road conditions and can be easily modified for different needs, such as carrying farm loads, passengers, food, water and medicine.

Climate benefits of natural gas may be overstated

The United States is poised to bet its energy future on natural gas as a clean, plentiful fuel that can supplant coal and oil. But new research by the Environmental Protection Agency — and a growing understanding of the pollution associated with the full "life cycle" of gas production—is casting doubt on the assumption that gas offers a quick and easy solution to climate change.

Advocates for natural gas routinely assert that it produces 50 percent less greenhouse gases than coal and is a significant step toward a greener energy future. But those assumptions are based on emissions from the tailpipe or smokestack and don't account for the methane and other pollution emitted when gas is extracted and piped to power plants and other customers.

Exxon says drills record Sakhalin well

(Reuters) - Exxon Mobil Corp said on Friday it has drilled a well that has a record horizontal reach of 7.13 miles (11,475 meters) from a land-based rig to the Odoptu field offshore far east Russia.

The well, part of the Sakhalin-1 project, underscores the difficulty oil companies increasingly need to overcome to tap oil and gas reserves.

Unrest in Egypt LIVE

Follow Reuters' coverage as a wave of unrest grips Egypt over President Hosni Mubarak's 30-year rule.

Analyst Sees Volatility For Apache On Egypt Ties

NEW YORK -- Analysts at Houston energy research firm Tudor Pickering Holt on Friday said Apache Corp. could continue to come under pressure in the face of political uncertainty in Egypt. "APA probably bleeds for while until Egypt order restored (already off 8% this week)," analysts said in a note to clients.

Fuels debate should focus on science, not politics

“Cheap oil made Sweden rich.”

In testimony before the House Subcommittee on Energy and Air Quality on Dec. 7, 2005, Professor Kjell Aleklett of Uppsala University in Sweden made this startling public confession. Sweden is often upheld by my more liberal friends as a model for enlightened democratic socialism and state welfare, something like capitalism, but with all the sharp edges rounded off.

Andrew McKillop: Islamic power returns to Tunisia

For external players, the political economic element occupies the high ground, with political Islam conceived as totally hostile to Western economic interests. This usually relegates the other components far behind, or simply ignores them. In Iraq, but also in Afghanistan and in the standoff between Iran and the west, the understandable but not excusable obsession with present and future oil and gas supplies is underlain by oil depletion fear, pushing deciders to take quick and wrong decisions as the Peak Oil clock counts down. Unfortunately, these vital interests for the outside world are almost irrelevant to political Islam.

Obama's Sputnik Moment: Strategy Over Substance

Did you hear anything surprising in Obama's State of the Union address last night? Anything truly visionary? Me neither. Of course, that wasn't the point.

The SOTU was a continuation of what appears to be a strategic move to the political center, in preparation for a presidential campaign that's set to begin anew later this year.

The War - Did We Sacrifice A Million Lives And A $Trillion Cash Just To Hand Our Jobs To China?

While the Tea Partiers and the liberals squabble over important domestic issues, America’s corporate and military titans, at the expense of America’s workers and taxpayers and with the blessing of Congress and the President, are creating China’s economic miracle. The military, at a cost of over $1 trillion, has paved the way for China to acquire and the U.S. to lose access to vast mineral and petroleum resources. The oil industry, with U.S. government assistance, is building a safe haven in East Asia from the imminent crash of oil everywhere else, by cornering the entire supply. And foreign investment, largely American, is giving China on average nearly one million new jobs a month while American unemployment soars.

6 things you can do to screw up 2011

Buy that gas-guzzling car you've secretly wanted

Oil experts are predicting we'll pay $5 for a gallon of gas within a year or so. You don't believe it? Oil reserves are being used up while demand and oil prices are rising with the economic recovery. Tree hugger environmentalists say it's one impact from "peak oil," the point where half of the Earth's oil has essentially been depleted. (It's explained by the old supply and demand equation.) And when oil and gas prices go up, transportation, durable goods and everything from food to fertilizer — anything that is made from crude oil, which is pretty much everything — costs more. Unless you are one of those people who can afford anything, or you are living off the land, now is a good time to think about living more efficiently. If you plan ahead, you will be glad you bought that greener car.

Dunedin retailer blames big-box stores for shop's demise

Big-box development had been a trend for many years.

While there was some expectation that factors such as peak oil could change shopping trends, "that might be some time away and may be product-specific", she said.

10 essentials for surviving Doomsday 2012

If the Mayans are correct, doomsday is scheduled for Dec. 21, 2012. That gives you less than two years to get ready. Good thing I've gathered many of the tools and equipment you will need to survive, right here in this list.

World on the Edge: how to prevent environmental and economic collapse by Lester Brown

In this urgent time, World on the Edge calls out the pivotal environmental issues and how to solve them now.

We are in a race between political and natural tipping points. Can we close coal-fired power plants fast enough to save the Greenland ice sheet and avoid catastrophic sea level rise? Can we raise water productivity fast enough to halt the depletion of aquifers and avoid water-driven food shortages? Can we cope with peak water and peak oil at the same time? These are some of the issues Lester R. Brown skillfully distills in World on the Edge. Bringing decades of research and analysis into play, he provides the responses needed to reclaim our future.

Lilypad floating city concept

With global sea levels predicted to rise significantly over the next century due to climate change, a lot of people living in low lying areas are expected to be displaced from their homes. Architect Vincent Callebaut has come up with a possible relocation destination for these climate change refugees in the form of the “Lilypad” concept – a completely self-sufficient floating city that would accommodate up to 50,000.

Total's high friends in low places

De Margerie is one of the few energy executives who believe that peak oil is just around the corner. In a few years, he argues, supplies will top out at 95 million barrels per day (up from a record 88 million bpd now) and no amount of investment or ingenuity will be sufficient to push the total higher. "There will be a lack of sufficient energy available," he says, leading to significantly higher prices and more wealth and power for state-owned national oil companies, and the bullies who lord over them, which control access to some 70 per cent of the world's remaining conventional reserves. To stave off a global energy crisis, De Margerie asks, "Do we sit and wait?" Or exploit every opportunity from every source, including coal, solar and nuclear?

Tom Keene's Econo Chat: A Sell-Off Ahead for Oil?

Is peak oil discredited as a theory?

The peak oil guys are like the guys who didn't like the Cold War ending in the late 1980s. They keep looking for more evidence, but they are finding it harder and harder to define that peak oil is here. We're about to see North Dakota become a bigger producer of oil than Alaska. There is oil wherever people are putting holes in the ground.

Exxon Mobil's 2030 forecast: Natural gas to surpass coal as energy source

Exxon Mobil Corp. forecast Thursday that by 2030, natural gas will surpass coal as an energy source, oil demand will rise to 100 million barrels a day, and gasoline consumption will decline despite 400 million more cars on the world's roads.

Rex Tillerson, CEO of the Irving-based oil giant, forecast that "newly unlocked supplies of shale gas and other unconventional energy sources" will prove "vital" in meeting a projected 35 percent rise in overall energy demand.

Oil: into new frontiers

Depending on your perspective, it can be argued that at least one positive development has resulted from the sharp rise in oil prices of recent years. The influx of capital to oil companies from high prices, combined with expectations that prices are unlikely to fall very far, has boosted investment in oil exploration and production, especially in what the industry terms “frontier” areas – namely enhanced oil recovery (more oil from existing fields), the deep (or ultra-deep) water and the Arctic. Massive new reserves have been identified, proven up, and brought to production – whilst reserves previously considered impossible to reach are now no more than a horizontal drilling or steam injection technique away. All this should help ensure supply can meet global demand for far longer than was expected just a few years ago – pushing back the oft-cited “peak oil” date by decades.

The Peak Oil Crisis: Tradable Energy Quotas

Last week the British MPs, who make up the All Party Parliamentary Group on Peak Oil (APPGOPO for short), released a proposal for allocating fossil fuel-based energy to control carbon emissions and to ensure equitable allocation of energy during an era of declining availability.

The proposal is rather ingenious in that it incorporates a mechanism to limit and control carbon emissions into the atmosphere as well as dealing with the shortages that will develop from declining production of oil, coal, and eventually natural gas. A plan to equitably allocate energy and to restrict carbon emissions by all the peoples of the earth obviously has too many intricacies to discuss in detail here (If you are intrigued, as you should be, visit the following web site http://www.teqs.net/report/).

Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil)

One of the saddest aspects of the Internet is that it so often fails to make us smarter. In a mutant version of Gresham’s Law, loud amateurs too-often drown out the voices of experts. Here we an excerpt from a 1975 book that tells us more about Peak Oil than a typical dozen posts on most peak oil websites. It’s an example of expert knowledge effectively lost to society by the prolifferation of mental chass. At the end are links to more on this subject.

Welcome, ‘Peak Oil’

The day of reckoning is approaching and the world does not have a contingency plan.

The truth is that the world’s output of conventional crude oil peaked in 2005 and global oil exports are also past their prime. Furthermore, the unconventional sources (tar sands, heavy sour crude, ethanol, natural gas liquids, bio-fuels and shale) are struggling to keep up with the ongoing depletion in the world’s largest oil fields. Therefore, it is probable that the world’s current production of total liquids is at or near maximum capacity.

Oil below $86 amid weak indicators, earnings

That the U.S. economy, the world's biggest, continues to crawl was underlined by weak growth in durable goods orders for December and a rise in the number of Americans applying for unemployment benefits last week.

Meanwhile U.S. companies that are bellwethers for consumer spending reported disappointing earnings.

Oil May Rise to $90, Escaping ‘Bear Trap’: Technical Analysis

Oil is likely to rise to between $88 and $90 a barrel in the coming weeks and yesterday’s decline below a Bollinger Band support level may mislead investors into seeking an extended price drop, Cameron Hanover Inc. said.

Oil majors BP, Shell concerned about high oil price

(Reuters) - Oil giants Royal Dutch Shell Plc and BP Plc fear rising oil prices may hinder the recovery of the global economy, chief executives from both firms told Reuters on Friday.

Oil prices nearly touched a $100 a barrel this week, however prices fell on Friday to a near two-month low on weak economic data and talk of OPEC raising output to cool prices.

"We are concerned about the current price of oil, we don't want recovery slowed," Shell's Peter Voser told Reuters at the World Economic Forum in Davos, Switzerland.

Gas Profit at 7-Year Low Reduces Storage Growth

The returns for buying natural gas this spring and selling it for use next winter have dropped to the lowest level in seven years, discouraging companies from building new storage sites in the U.S. and threatening to put excess supplies on the market.

The price of gasoline

The scientific reason is more complicated. We have been producing oil in large quantities for about 70 years and still finding new sources of oil, however most of the easily produced oil has been found. The easily produced oil is about one quarter of all the oil that is known to exist. For the remaining 75 percent we know where it is and how much is there but it is difficult to produce. There are many technologies available but the costs are high. This means the price of gasoline will be higher.

JPMorgan Says OPEC Acts to Slow Oil, May Raise Later

OPEC will have to raise oil prices in coming years to maximize revenue even as it acts to quell crude’s rally toward $100 a barrel in the short term, according to JPMorgan Chase & Co.

Indications that members of the Organization of Petroleum Exporting Countries are raising output unilaterally are the first signs of a response to rising prices, said analysts at the second-largest U.S. bank by assets. Crude fell to a five-week low Jan. 24 after Ali al-Naimi, the oil minister of OPEC’s biggest member, Saudi Arabia, said the 12-member group will boost supply this year.

Indian leader: Unleash energy on tribal lands

WASHINGTON – To achieve energy independence, the United States should focus on tribal lands with vast untapped supplies of coal, natural gas, oil and wind, the leader of the nation's largest Indian organization said Thursday.

Jefferson Keel, president of the National Congress of American Indians, said tribal lands contain about 10 percent of U.S. energy resources, but provide less than 5 percent of national energy production. He blamed bureaucratic obstacles that prevent tribes from generating an estimated $1 trillion in revenue from energy sources.

Oil chiefs 'upbeat' for this year

Oil price volatility has failed to dampen the spirits of most oil executives who are optimistic that the future will be bright, a report reveals.

Oil companies are "upbeat" about capital investment, expect stable crude prices this year and see Asia and natural gas as emerging market opportunities, according to a study sponsored by the UK consulting and technical services company GL Noble Denton and published this week by the Economist Intelligence Unit.

AAR believes Russia govt not fully informed by BP-source

(Reuters) - The Russian shareholders of TNK-BP do not believe BP fully informed Russian authorities of their sharholder agreement before securing a lucrative deal with Rosneft, a source told Reuters.

"We don't believe that BP has informed Rosneft and (Russian Deputy Prime Minister Igor) Sechin or (Prime Minister Vladimir) Putin fully in detail on their obligations to TNK-BP," the source close to TNK-BP board told Reuters on Friday.

Rosneft, Exxon ink Black Sea exploration deal

DAVOS, Switzerland (AFP) – Russian energy giant Rosneft and US group Exxon Mobil struck a $1 billion deal Thursday to hunt for oil under the Black Sea, and promised more joint ventures to come.

Rosneft president Eduard Yurevitch Khudaynatov said he hopes to find a billion tonnes of oil and gas -- mainly oil -- in the 11,200-square-kilometre (4,320 square mile) Tuapse Trough, in waters off the Krasnodar region.

Shell’s Voser Looks to Rosneft for Exploration Deal

Peter Voser, chief executive officer of Royal Dutch Shell Plc, said he’s looking at a partnership with Russia’s state-owned OAO Rosneft to hunt for oil reserves.

“We are talking about potentially exploration” together, Voser said today in a Bloomberg Television interview in Davos, Switzerland. “Partnership with national oil companies is part of our business model. This is the way to go, we are driving this, and we’re quite happy to have these relationships.”

Cnooc Falls Most in Eight Months After Forecasting Output Growth Will Slow

Cnooc Ltd., China’s biggest offshore energy explorer, fell the most in more than two years in Hong Kong trading after forecasting slower production growth.

Iran oil payments issue to be resolved soon: source

(Reuters) - The impasse over payments to Iran for crude shipments to India is likely to be resolved in the next few weeks, a senior Indian government source told Reuters on Friday.

Iran continues flows to India

Iran will continue to supply oil to India for the time being, Iranian sources and Indian company officials said today, even though the two countries have yet to resolve a row over oil payments.

Australian LNG Project Costs to Rise, Macquarie Says

Woodside Petroleum Ltd., Santos Ltd., Oil Search Ltd. and Origin Energy Ltd. may need to spend $20 billion more than expected on Australian gas projects as labor competition intensifies, Macquarie Group Ltd. said.

That’s assuming the ventures experience 32 percent cost increases in line with the “blowouts” reported in the country in the past, Sydney-based analysts Adrian Wood and Kirit Hira wrote in a report today. The four companies now estimate their liquefied natural gas projects will cost a combined $64 billion during the next six years, the Macquarie analysts said.

Egypt protesters clash with police after prayers

Regional television stations were reporting clashes between thousands of protesters and police in several other major Egyptian cities, including the Mediterranean port city of Alexandria, Minya and Assiut south of Cairo and al-Arish in the Sinai peninsula.

Earlier, Internet service in Egypt was disrupted and the government deployed an elite special operations force in Cairo on Friday, hours before an anticipated new wave of anti-government protests.

Alabama's new AG pursuing BP suit as lead attorney

MONTGOMERY, Ala. - Alabama's new attorney general says he will be lead counsel in the state's lawsuit against BP PLC and others over the Gulf oil spill and that he hopes his presence at a federal court hearing shows the judge how important the case is to residents harmed by the disaster.

Luther Strange said Wednesday that he'll take the lead since the state is no longer using private law firms for the case.

Potential scams top 7,000 in BP spill compensation

NEW ORLEANS — The $20 billion fund responsible for compensating victims of BP's Gulf of Mexico oil spill has received more than 7,000 potentially fraudulent claims, many of which have been referred to the Justice Department for criminal investigations, the fund's administrator told a Senate panel on Thursday.

BP Investors Push Dudley to Sell More Oil Fields After $5 Billion Dividend

BP Plc shareholders said they want Chief Executive Officer Robert Dudley to expand the company’s record asset sale program, raising cash that will help fund a $5 billion a year dividend.

Report: Gulf oil spill was deadly time for turtles

WEST PALM BEACH, Fla. – More sea turtles were killed or injured in the Gulf of Mexico in the months following the BP oil spill than in any similar period during the past two decades, a report released Wednesday found.

EU moots link between resource efficiency and budgetary targets

EUOBSERVER / BRUSSELS - The European Commission is preparing to publish a set of resource efficiency targets in a paper this summer, potentially forcing member states to limit their consumption of fuels, minerals and water, amongst other items.

Obama seeks new path to environmental goals

WASHINGTON – Facing a Congress that is more hostile to environmental regulation, President Barack Obama is moderating his environmental goals: a clean energy standard that mixes nuclear, natural gas and "clean coal" with renewable sources such as wind and solar.

Urban renewal revived as 'intelligent cities

When the economy was roaring and housing booming, reining in suburban sprawl dominated the development debate under the name of "smart growth."

Now that the economy and housing have tanked, prompting more people to stay put, growth is taking a back seat. But smarts still matter. The new buzzwords: "intelligent cities."

Futuristic Volkswagen XL1 gets 261 miles a gallon

Delivering both stunning looks and high fuel economy, Volkswagen has unveiled a streamlined diesel plug-in hybrid XL1 concept in the Persian Gulf nation of Qatar for a big auto show there.

The fuel mileage works out to about 261 miles a gallon, says Automotive News. VW calls it the most efficient car in the world.

Electric car sales may get a boost

The day after President Barack Obama called for popularizing electric cars in his State of the Union address, two Michigan Democrats proposed legislation that would spend billions more on incentives for consumers to buy them.

GM: We don't need gov't loan to go green; Volt coming to 50 states

WASHINGTON — General Motors(GM), in another sign of its progress since a government-led bankruptcy, said Thursday that it is withdrawing its application for $14.4 billion in federal loans it had sought to help build more fuel-efficient cars.

For Excess Solar Flow, a Veg-O-Matic for Voltage

Until very recently, the solar industry was mainly concerned with getting a toehold in the production of electricity at a utility-level scale. Now a New Jersey company is looking for its niche in a different field — how to handle a system that is saturated with solar energy, sometimes enough to destabilize the electric grid.

Oil Decline Rate And Population

The rapid increase in the world’s population over the last hundred years is not merely coincident with the rapid increase in oil production. It is the latter that has actually allowed (the word “caused” might be too strong) the former: that is to say, oil has been the main source of energy within industrial society. It is only with abundant oil that a large population is possible. It was industrialization, improved agriculture, improved medicine, the expansion of humanity into the Americas, and so on, that first created the modern rise in population, but it was oil in particular that made it possible for human population to grow as fast as it has been doing (Catton, 1982). When oil production drops to half of its peak amount, world population must also drop by half.

Iraq's largest hydropower dam grinds to halt

BAGHDAD (AFP) – Record low water levels at Iraq's largest hydroelectric dam have ground turbines there to a halt, amplifying a power shortage that led to riots last summer, a top official said on Thursday.

Adel Mahdi, advisor to the electricity minister, said water levels at the Mosul dam on the Tigris River had fallen to 298 metres (977 feet) above sea level.

"It is the first time since 1984 when the dam was built that water levels have fallen this low," Mahdi told AFP.

Peak Water: What Is it -- and Are We There Yet?

Peak water is coming. In some places, peak water is here.

We're never going to run out of water -- water is a renewable natural resource (mostly). But increasingly, around the world, in the U.S., and locally, we are running up against peak water limits.

Koch Industries Unamused by Climate Spoof

From the sometimes bizarre front lines of the climate-change culture wars: It seems the brothers Koch, proprietors of the giant, Kansas-based industrial conglomerate and well-heeled supporters of Tea Party causes, have now set their sights on a group of anonymous pranksters who spoofed a Koch Industries press release last month — one that suggested the brothers were having a change of heart on climate change.

Lufthansa, Delta Jockey for Free Carbon Permits

The biggest expansion of Europe’s carbon market is pitting Deutsche Lufthansa AG against Japan Airlines Corp. and Delta Air Lines Inc. in a contest for free permits as traders struggle against computer hackers.

Climate tax on meat and milk could help reduce Europe's carbon footprint

Working on the conclusions of past studies that have put the proportion of global greenhouse emissions caused by the food production process at between 20 and 25 per cent, scientists at the University of Gothenburg in Sweden looked into the potential benefits of a special 'climate tax' on both meat and milk. They found that, simply by placing a tax of €60 per ton of carbon dioxide produced on the meat and dairy industry - less than half the amount levied by most European countries on petrol – overall greenhouse gas emissions could be cut by around seven per cent, almost overnight.

Perhaps more importantly, should the land that would inevitably be freed up by a movement towards more efficient agriculture be used for bio-energy production, then the decrease in the amount of harmful carbon being emitted into Europe's skies could be six times greater.

Will climate change burst the global 'food bubble'?

Lester Brown argues the pressures of rising population, consumption, water stress and global warming will pose the first serious challenge to civilisation through our food.

UN climate talks in focus at Davos forum

DAVOS, Switzerland – Businesses, especially U.S. ones, must get more involved in the global effort to slow climate change and help pressure politicians to enact policies that promote green growth, international leaders said Thursday.

"They are part of the problem and they must be part of the solution," South African President Jacob Zuma said at the World Economic Forum.

EU Will Show Stricter CO2 Goal Is Cost-Effective, Hedegaard Says

A European Union report next month will show that moving to a stricter emissions-reduction target will be cost-effective for the 27-nation bloc, Climate Commissioner Connie Hedegaard said.

Monster snowstorms still spell global warming

New York (CNN) -- The weather seems to be going berserk, with more snow dumped on our beleaguered Northeastern cities in a month than in a year, paralyzing business and our lives. Records are being broken even as we speak.

Common sense says that it's the freezing cold that is behind the freaky weather. But physics says otherwise.

Warming North Atlantic Water Tied to Heating Arctic

ScienceDaily — The temperatures of North Atlantic Ocean water flowing north into the Arctic Ocean adjacent to Greenland -- the warmest water in at least 2,000 years -- are likely related to the amplification of global warming in the Arctic, says a new international study involving the University of Colorado Boulder.

Re: Exxon Mobil's 2030 forecast: Natural gas to surpass coal as energy source (uptop)

Bill Colton, vice president of corporate strategic planning for Exxon, forecast that the oil industry will have "no problem whatsoever" in meeting the increased oil demand, despite predictions by "peak oil" theorists that the world faces an inevitable decline in supply.

Another day, and another group of oil analysts and major oil companies telling us, in effect, to "Party on Dudes!, no worries in sight," with most of the MSM only too happy to pass on the good news.

Of course, if Texas, where ExxonMobil is headquarted, were the sole source of oil for the world, global crude oil production would be down by over 70% from 1972. See definition for irony:


"Party on Dudes!, no worries in sight,"

Tom Keene: We're about to see North Dakota become a bigger producer of oil than Alaska. There is oil wherever people are putting holes in the ground.

Jeez ...More hand waving and plenty of evidence that, when you tell people what they want to hear, you don't have to qualify anything you say.

Another day of swimming against the flow....

There is oil wherever people are putting holes in the ground.

Now there's a certifiably false statement. Try drilling holes under London, Honolulu, or Helsinki and see what happens.

I wonder how much oil we could get from Tom if they put a hole in his head? I ask because one of my students assured me we could get by by making biodiesel by melting cows and people etc... (no really!)

No, No, No, don't you remember? People are used to make Soylent Green, not Red Diesel!. . . :<(

E. Swanson

Yes, and as we know, it doesn't make sense to turn food into fuel.

I seem to remember a story about a liposuction doctor, in California, getting in a little hot water for selling the copious quantities of suctioned fat to a biodiesel manufacturer. May be more valuable than Soylent Green

Yow! I thought my exhaust has been smelling a bit odd. It makes sense to me, though. No point in letting good fat go to waste.

Eco-boat powered by human fat attempts round the world speed record


How can someone say that and still have a job?

Well, I'm sure they are happy all over Texas and Oklahoma since all they need to do is uncap the old wells and start pumping. We have been told that oil is still there by some economist.

Now there's a certifiably false statement. Try drilling holes under London, Honolulu, or Helsinki and see what happens.

I don't believe that's what he meant. I believe he meant, If you drill anywhere in the Bakken shale you will strike oil. That is about 99% true.

I've heard of drilling promoters making claims something like that. Doesn't work that way that I ever saw.

That was such a stupid comment I had to open the link to see if there was more juicy fresh idiocy therein. What planet do these people live on? What do they smoke? Cumulative YOY gains for ND 2004-2009 amount to 137 kb/d - barely worth noticing in a typical megaproject. Contrast -329 kb/d for Alaska or -118 kb/d for California. All the Bakken is doing is putting a smile on Bron Dorgan's lips and cash in an assortment of banks.

It's not only minor press/internet players who are doing a pathetically poor job.

I just read the NYT lead online article about the riots in Egypt-lots of details about the actual street scence, but not a LINE explaining WHY.

KLR - And I'll toss out the obvious: yes...the Bakken is bringing some new oil on line. But the reason it will surpass Alaska is because the N Slope fields are sliding further down the decline curve every day. Who knows...in a 5 or 10 years I may have more oil on my driveway then is being pumped down the N. Slope pipeline.

You got that right, Alaska's decline over the same period was 329 kb/d, 309 kb/d of which was NS. But that's weighted a bit by 123 kb/d for 2006 alone, which would be at least partially due to BP patching up rust, I'd reckon. Average for 2004-2009 ex 2006 was only -41.2 kb/d, 2008/2009 for ND averaged 47.5 kb/d - this is ND's "ramp-up" har har har after a decade of achieving pitiful YOYs around 10 kb/d. So all we need is a economy destabilizing price spike to justify drilling the crap out of that shale, and Bob's your uncle, or whatever the Midwest equivalent is.

It would be fun to build an anti-investment presentation, .ppt or the like, attracting potential marks to dump money into one of these mature basins that just head deeper into the crapper every year. "Fail to make a fortune in US state offshore! Leases decline without fail! Guaranteed money sink! We must achieve energy independence - in Saudi Arabia!"

KLR, I'm afraid your info is outdated. ND is currently at 355K bpd (PDF, scroll to bottom)and that could double in 4-7 years. 700K bpd would certainly be big enough to make it on the megaprojects list if the keepers of the list were willing to put it on there.

EIA says 292.89 kb/d for Sep, with 82.67 kb/d average YOY for Jan-Nov 2010. This is wholly obviated by declines in PADD 5 and LA, at -65.45 and -21.33 kb/d respectively, for a total of -86.78 kb/d. Bakken can double all it wants, declines in these other mature provinces will match it all the way, and when the TAPS craps out due to MOL you will see a shark fin style decline that will wholly wipe out PADD 2 gains for up to a whole handful of years, unless BP takes some prudent steps to address future upstream issues no matter how it may affect their bottom line, and as I stated above, har har har.

US production is up a titch at 206.09 kb/d CTD for 2010. Great, it frees up more oil to go the BRICs and deludes people into thinking we have unlimited amounts of fossil fuels that could be tapped into if it weren't for tree huggers blah blah blah. And it makes good returns for investors.

BTW: most of the uptick is from Fed offshore, at 162.89 kb/d. That party will likely be over soon as well.

700K bpd would certainly be big enough to make it on the megaprojects list if the keepers of the list were willing to put it on there.

Megaprojects listed start with 40 kb/d oil peak flow.

Texans don't like being pushed around by Big Oil if it's Canadian.

Warnings that the pipeline could worsen the state's already potent refinery emissions and threaten water supplies have riled up people not normally inclined to cotton to environmentalists; TransCanada's heavy-handed approach to obtaining easements through rural property — a mix of dickering and threats of eminent domain — has populated the Sierra Club's recent meetings with rural residents whose political inclinations lean more toward the tea-party movement than eco-activism.


Here's an interesting metric. The decline in Texas crude production from 1998 to 2009 was 309,000 bpd (Texas RRC; I chose 1998 because we had a pretty good drop in 1999 as a result of low oil prices). Over the same time period, Canadian net oil exports increased by 258,000 bpd (BP). So the 1998 to 2009 net change in Texas production + Canadian net oil exports was a negative 51,000 bpd (the net combined change does turn positive by a few thousand barrels per day per year as we look at shorter time periods after 1998).

One impact of peak oil and higher oil prices is the increasing burden on budgets of countries subsidising petroleum products and food prices which in turn were driven up by high oil prices

Egyptian crude oil production peaked 1995/96. Declining oil production since then and increasing consumption have now intersected.

Egypt expects to up energy subsidies, maintain food subsidies

I have put a graph with oil production, consumption and exports/imports here:


Egypt is yet another classic example of ELM in the real world!

haven't seen this one posted:

UAE, Saudi raise oil output
Opec output rises 350,000 barrels per day in January


This is interesting. As late as January 20th it was reported that OPEC Refuses to Increase Output even if oil reaches $100 a barrel.

Most of the reporting agencies were reporting OPEC increased output by around 350,000 bp/d in December. OPEC, in their Monthly Oil Market Report said they actually increased production by 171,000 bp/d in December but that was after they revised November production down by 138,000 bp/d.

Tanker Tracker oil movements say OPEC deliveries were down in January but are starting to increase slightly in February. Tanker Tracker movements do not include Ecuador or Angola. This could throw things off as it did in December. Angola December production was down 103,000 barrels in December. They could be back to normal in January accounting for about 100,000 bp/d of that OPEC increase.

The big increases in December came from the UAE up 77 kb/d, Saudi up 62 kb/d, Kuwait up 32 kb/d and Venezuela up 36 kb/d.

Anyway OPEC's new Monthly Oil Market Report will be out February 10th with their January production. We shall see what they say, or rather what their "secondary sources" say they actually produced in January.

Ron P.

The MTI-Brent spread is closing fast today. I turned on the TV at about 6:30 CST this morning and the spread was over $12. It is now $10.56. WTI is up $1.41 while Brent is only up $0.22.

Ron P.

WTI up more than 2% in the space of an hour or so.

Correction on the cards?

This is the correction. $12 cheaper than Brent was not going to last.

As I write WTI is up $3.84 to $89.48 and Brent is up $2.14 to $99.53. The spread is now $10.05. The surge up by oil everywhere is caused by unrest in Egypt. Well, at least that is what CNBC is reporting.

Ron P.

So let me get this straight; the WTI has been paying as little attention as possible to eastern consumption lately (Brent). But now, with trouble in Egypt, we get WTI up $3.40?

Eastex, WTI is a grade of oil and incapable of paying attention to anything. Perhaps you meant traders? Yes traders pay attention to almost everything and weigh every event against every other event, or at least as much as they find it possible to do so. And traders of all stripes get concerned when there is unrest in the Middle East. The canal could be closed, pipelines could be closed or even blown up, the unrest could spread to Yemen or even Saudi Arabia.

Yes, you should get that straight, a blowup in the Middle East could very affect the price of WTI as well as Brent and all other benchmarks.

Ron P.

And likewise, (nearly all) cars are incapable of "driving down the highway"... but they are said to do so...

Egypt. They are not a big one, but they are an oil producer. They also control the Suez canal and I assume oil passes through that canal.

And a major pipeline


The Suez Canal is located in Egypt, and connects the Red Sea and Gulf of Suez with the Mediterranean Sea, covering 120 miles. Petroleum (both crude oil and refined products) accounted for 16 percent of Suez cargos, measured by cargo tonnage, in 2009. An estimated 1.0 million bbl/d of crude oil and refined petroleum products flowed northbound through the Suez Canal to the Mediterranean Sea in 2009, while 0.8 million bbl/d travelled southbound into the Red Sea. This represents a decline from 2008, when 1.6 million bbl/d of oil transited northbound to Europe and other developed economies.

Almost 35,000 ships transited the Suez Canal in 2009, of which about 10 percent were petroleum tankers. With only 1,000 feet at its narrowest point, the Canal is unable to handle the VLCC (Very Large Crude Carriers) and ULCC (Ultra Large Crude Carriers) class crude oil tankers. The Suez Canal Authority is continuing enhancement and enlargement projects on the canal, and extended the depth to 66 ft in 2010 to allow over 60 percent of all tankers to use the Canal.

SUMED Pipeline

The 200-mile long SUMED Pipeline, or Suez-Mediterranean Pipeline provides an alternative to the Suez Canal for those cargos too large to transit the Canal. The pipeline moves crude oil northbound from the Red Sea to the Mediterranean Sea, and is owned by Arab Petroleum Pipeline Co., a joint venture between the Egyptian General Petroleum Corporation (EGPC), Saudi Aramco, Abu Dhabi’s ADNOC, and Kuwaiti companies. Transit through the pipeline declined from approximately 2.3 million bbl/d of crude oil in 2007 to 1.1 million bbl/d in 2009.

Closure of the Suez Canal and the SUMED Pipeline would divert tankers around the southern tip of Africa, the Cape of Good Hope, adding 6,000 miles to transit.

I might also point out that rounding the Cape of Good Hope can be pretty dangerous - there are many shipwrecks off that coast.

There have been a couple of serious oil spills including "Castillo de Bellver" off Saldanha Bay in the '80's, as well as "Antipolis" and "Romelia" in the 70's.

Also, the ore carrier "Treasure" in 2000, spilling a lot of bunker oil.

During my last transit of the canal, the narrowest section was 1000 feet if you measure bank to bank. If you measure water navigable by ships, it is less than 200 feet wide. It is so narrow that ships must transit in north bound and southbound convoys because it is too narrow to pass.

I was ordered to reduce sail to avoid passing a freighter who was moving at the maximum 7 1/2 knot limit. My pilot was terrified we might cause the ship to swerve.

Unless my GPS was confused,the length of the canal was 84 miles.

The southern end at Port Suez was quite 'sporty' at nite. I might call it a seething cauldron. From town to canal is about 1 mile and there is nothing to stop anyone strolling to the canal bank.

$9.98 price difference as of last time I checked a minute or two ago.

Okay, for what it's worth, my .02 (worth exakitikly what you paid for it.)

The Brent /WTI arbitrage spread is indicating that relative to Chindia, North American demand is dead in the water/dead on arrival. There is no economic recovery going on here in NA. The stock market is puffed up on QE2 and profits from Blue Chips earned all overseas; not here.

My best guess is that NA economic growth expectations will not hit expected levels and data published to date will be revised downward. The stock market is over bought and by the middle of the year disappointing growth numbers will start impacting the debt markets.

Don't mean to be a wet blanket, but this is what I think.

Everybody, have a great weekend!
I am outta' here!

WTI closed at $89.34 and about $9.80 below Brent. The volume on the NYSE today was 1,351,224 on all contracts. That is about twice the normal daily volume. That is contracts on 1.35 billion barrels. I don't know if that means very much other than that is about 18 times as much crude oil as was produced in the entire world today.

Ron P.

Monday is the end of the month. Could the volume be people getting out of January and into February contracts?

jabber et al - Correct me if wrong (which I could be since my part of the oil patch is far from Cushing) but the reason WTI has a lower price is because a bottle neck exists at Cushing. The other day someone explained that Canadian crude and other sources are filling up Cushing faster than it can be transfered to Gulf Coast refineries. So anyone holding oil at Cushing is forced to lower their sales price if they want to move it out. Otherwise it will sit in Cushing and they'be charged a storage fee on top of the cash flow they aren't realizing. Again, this was somelese explanation I can't verify. But it did seem to make sense. So even if someone with Cushing oil could ship it to the EU and still make a profit less the transport costs it doesn't matter: if they can't pipeline it to the refineries they can't get it to the ship terminals either.

That's right, the two big Canadian pipeline companies, TransCanada and Enbridge, have recently built excessive amounts of pipeline capacity to Cushing, Oklahoma,and cheap Canadian oil is piling up in the storage tanks there. However, there is insufficient pipeline capacity to take it from Cushing to the Gulf Coast, so they can't load it on tankers and sell it in competition with Brent oil. The result is that the increasing volumes of Canadian oil are depressing the price of West Texas Intermediate, but not Brent.

Brent, on the other hand, is being forced up by increasing demand from China. There is currently no way to get the Canadian oil to China, so the price differential may persist for some time.

Both TransCanada and Enbridge are planning to build pipelines to the Gulf Coast, but it will 2013 before they start moving oil, at the earliest. In the interim, oil companies are thinking about using on the railroad option. People may begin to see 100-car unit trains of Canadian oil rumbling past them on the way to a seaport (Gulf Coast or Pacific Coast) in the not too distant future.

Re: Warming North Atlantic Water Tied to Heating Arctic

As noted yesterday, this article refers to a report in today's SCIENCE. The study used sediment core data taken from the Fram Strait to assess temperature of the water flowing into the Arctic Ocean from the Nordic Seas. Going back 2000 years, the researchers found evidence of small variations, most notably, the Little Ice Age from about 1500 to about 1900 CE, but then there was a warming which appears to be greater than anything seen over the previous 2000 years. The sediment data is rather high resolution, covering about 28 and 18 years for each slice of sediment. It's just another "Hockey Stick" curve, which adds confirmation to the results found using tree ring data...

E. Swanson

End of cheap food era as grain prices stay high

2011 seems to have ushered in a new era of doomerish articles from mainstream media.

"Even if we have a good year, we are not going to have the inventories we've seen before. I really do think the time of cheap food prices is over, and that's just it," said analyst Chris Mann of Traders Group Inc in Chicago.

"Everything is set to the point where supply equals demand right now. But if you pull one thing out of it, or if you disrupt the equation in some little way or tweak it, I think, with inventories as tight as they are, it will really have an impact on prices. A drought, a flood, anything," said Mann.

Given the role the U.S. played in wheat/corn/soybean exports last year and into this year (and indeed in every year), a national commitment to biofuel production, as expressed by Obama in his SotU, must look like a nightmare come true to every major grain importer on the planet.

Well oil and food are practically the same thing. Except oil can be turned into food, and not the other way around (despite our best efforts to do so).

So really the trump card is with the oil exporters. The U.S. really doesn't have much leverage with its food crop (it's all oil based anyway) and other countries can get by as long as they have access to oil.

"Doomerish"?? I thought that perpetually rising food prices would be welcomed as a GOOD thing by our corporate media. After all, perpetually rising HOUSE prices were trumpeted as an economic boom benefitting EVERYONE*.

*Meaning: Wall Street, banks, speculators, subprime brokers, scam artists, boiler room operators, and politicians.


But we can't resell the food.
...until we start getting a partial return from actually valuing humanure.

Re.: Tom Keene's Econo Chat: A Sell-Off Ahead for Oil?

We're about to see North Dakota become a bigger producer of oil than Alaska

I wonder how giddy Tom will be when take North Dakota's oil from them and give them nothing but Marshal Law in return.

Re: Will climate change burst the global 'food bubble'?

Lester Brown argues the pressures of rising population, consumption, water stress and global warming will pose the first serious challenge to civilisation through our food.

It has been the likelyhood of a convergence of factors, not Peak Oil, Climate Change, etc. alone, that has had my attention for years. An oldtimer told me long ago that "sh~t always happens in threes". Rather than some single Black Swan event (a possibility, of course), I assign a higher probability that an interaction/convergence of declining complex systems will be our undoing.

Brown's discussion of this, and his assertion that our food system will be the first major manifestation of this is downloadable free: World On The Edge http://www.earth-policy.org/books/wote as a PDF.

I have doubts about the rest of the title: How to Prevent Environmental and Economic Collapse. It's a bit like saying one can prevent heart disease after decades of eating cheese burgers and a quad bypass.

The story about Iraq's hydro grinding to a halt is one of at least three factors that don't add up nice! Population, weather, (food), unrest, lots of weapons, Iran, Kurds....
We need to get the heck out of Dodge.

The Tigris flows directly from Turkey, and the Euphrates goes from Turkey through Syria, then flows to Iraq. Water projects in the two countries have had a severe impact on Iraq.

Mahdi said Iraq also was eyeing with extreme worry Turkey's controversial Aliso dam on the Tigris, work on which began in 2006.

"If Aliso is completed, it will finish with the Tigris in Iraq completely," Mahdi said.

Mahdi said hydropower from Iraq's Haditha dam on the Euphrates was also operating at less than 50 percent of capacity because of water shortages due to irrigation and dam projects in Turkey.

ELM at work in Mesopotamia. How much of their own oil will Iraqis need to insure minimum supplies of electricity and water? It's clear that Iraq isn't in any position to fight wars for water, so their only choice is oil for water. It seems that oil and water do mix.

I assign a higher probability that an interaction/convergence of declining complex systems will be our undoing.

I'm all with you there.
That's one of things for which I have to thank TOD... or curse ya'll. :D - The complexity / interconnectedness of systems is quite something to really notice.

If it was just peak oil, I suspect we could deal with the problem somehow. But if any 2 or 3 things 'swan' at once; Oil, gas, coal, soil depletion, phosphorous, water aquifers, ocean food, indium, rain water supply, freezes, heat waves, droughts, etc. - than we will have a, um... serious situation on our hands.

One or two (more) consecutive years of extreme weather (or resource shortage) that ruins a large percentage of crops will have catastrophic consequences, for survival in some places, and economy in others.

Al Jazeera carrying live pictures of what they say is the Egyptian Government Party HQ on fire.

All internet and cell phones down, some satellite uplinks also allegedly jammed. Al Jazeera reports its local service in Egypt also blocked.

Have been watching for the last few hours - intense stuff!

Link for anyone else interested: http://english.aljazeera.net/watch_now/

Press TV Iran reports some international telephone lines to Cairo unexpectedly just restored. Clinton just called for that a few moments earlier too.

Just after she spoke Sky News presenter in Cairo held up one of many tear gas canisters fired at the crowds with "Made in the USA" proudly displayed on it.

Good job it didn't say made in Israel

Just saw images of the army tanks waving to the protesters. This could be all over if the army switches sides...

Massive army presence guarding government communications ministry and state tv though according to Sky. The army don't seem to be prepared to let the protesters storm that. According to Sky it is about the only building in the centre of Cairo they are protecting.

As the Chinese demonstrated in 89, if enough of the army is cowed into doing your bidding, and you are willing to use serious brutality you can prevail. So we won't know how this will play out until the fat lady sings...

Then, if the government falls, it will likely lead to a period of chaos, and unmet expectations, leading to who knows what.

If Egypt falls who knows how many more countries will follow?

From the link:

"Months of dry weather have given China's key wheat-growing province of Shandong its worst drought in at least 40 years. That threatens to put further pressure on surging food prices."

I'll take Al Jazeera over the NY Times as a first choice for a different point of view. Only with a range of information sources, can one hope to get an accurate picture of what's going on in the World. I usually have the BBC on streaming in the background each day.

CNN has become something that is dropped into the Toilet...

And the BBC has just in the last few days, made massive cutbacks to their News organization.

Choose Wisely,
The Martian.

Especially when Egyptian state media releases statements like this:

1628: Egyptian state TV channel al-Misriyah plays down protests, saying they are peaceful, and quotes a local official condemning Al Jazeera TV for "misinforming" the public.


Yeah, I'm sure the fires in the street across from the Hilton and sound of gunshots that Al Jazeera is live streaming on the web right now is all CGI and sound effects too.

Yes, first Tunisia, now Egypt from a simmer to a rolling boil. Apparently the internet has been shut down in Syria. Oil up. precious metals up, equities down. Chaos may be imminent. I thought it would hold odd until summer. I guess this would be called "above ground factor."

Note, these are food prices which are lighting the blue touchpaper.

Those food prices are rising because of bad harvests due to bad weather.

With the floods in Australia, its not going to get better any time soon - so we can expect further discontentment boiling over. Oil price shocks will make transportation costs, and thus overall costs, higher still.

This isn't something that will change before summer - how many other countries will fall in the meantime. In particular, how many middle east, oil producing countries, or their neighbours?

Fertile ground.

Wow, Egyptian TV blatantly broadcasting recorded peaceful footage of Cairo and claiming it as 'live'.

Hillary Clinton was just on and she was saying the US wanted to work with the Egyptian people and their government... not the other way around. I take that to mean that should there be a sudden change of the guard for some unforeseen reason the door is left open for a new government to maintain some kind of a relationship with the US. I guess you gotta hedge your bets...

For sure. They must be getting nervous - if Egypt falls how many more countries could follow?

Manny champagne moments for George W Bush, taking his bring democracy to Irak project at face value.

As the things start to warm up it looks like the invisible ink writing on the wall is starting to become more and more legible.


(CNN) -- With public pressure mounting against the government of President Hosni Mubarak, the future of Egypt, the broader Middle East and international stability hang in the balance.

Mubarak's best option is to offer Egypt a safe landing. He should lift the 30-year state of emergency, renounce his candidacy in Egypt's September 2011 presidential election and allow civil society to prepare for a free and fair election under full international supervision.

The promise of a clear road map for transition will defuse tensions and ensure stability in Egypt and beyond. Exiting politics pragmatically will also guarantee the safety of Mubarak, who is 82, and that of his inner circle.

The promise of a clear road map for transition will defuse tensions and ensure stability in Egypt and beyond. Exiting politics pragmatically will also guarantee the safety of Mubarak, who is 82, and that of his inner circle.

I think this is naive and that it is more likely that such an announcement would/will be oxygen for the fire.

How far up the ranks of the officer corps the public will for 'change' has gone, or goes now, is the key question to my mind.

Protests in Jordan as well, calling for ouster of the government. Army in Egypt may be refusing to put down the protesters and there are reports of fire exchanged between army and police in Port Said. If the army refuses to act the Egyptian government is finished. Interesting that earlier this week millions of dollars in gold headed out of the country was seized at the Cairo airport. Somebody was worried, and prescient.

I think this is naive and that it is more likely that such an announcement would/will be oxygen for the fire.

I agree that the statement itself is naive. However I think the fact that CNN is already running an op ed about government transition in Egypt is significant in and of itself.

I think this is naive and that it is more likely that such an announcement would/will be oxygen for the fire.

We saw in Tunisia where allowing some remnants of the old government to stay on in the transistion government was unacceptable. Thats kinda scary, because keeping on the more technocratic elements is essential to avoid major disruptions and instability. But, the desire to clean house is gonna prevail over the wisdom of planning a careful transition.

The U.S. is a big bully taking a massive fall- a warship which finds it is now the Titanic. Make bedfellows with it, and sure you will gain some power and influence in the short term, but ultimately you will lose everything.

Egypt deserves what it is getting for accepting all of this aid from the U.S., and not planning for itself.

They could learn to control their population, import food from other countries, create and issue a stable currency, etc. But they don't.

All countries significantly tied to the U.S. - notably the U.K., Canada, Mexico, China, and Egypt/Israel are suffering the consequences and will suffer even more, and they are going to learn the hard way what it's like to be in the vortex.

Ousting the Egyptian Govt. and forming another isn't going to cut it. These kids want their pound of flesh.......

Obama is on; let's go watch! ..........

I especially liked his statements regarding freedom of peaceful assembly,,,all that.

Seatle, 1999


They could learn to control their population, import food from other countries, create and issue a stable currency, etc. But they don't.

The same could be said of *any* Middle Eastern country, African country, South American country, most Asian countries, etc.

Fareed Zakaria was just on CNN. He pointed out that it's the countries that actually instituted economic reform and had some economic success that are troubled now. He says it created a middle class, and people who now feel they have a right to wealth.

The economically stagnant countries that did not change, like Syria, have not suffered much in the way of protests.

Downright pesky, that middle class.

Yup, which is exactly why the Plutocrats and their well paid propagandists in the U.S. are trying so hard to eliminate it.

Obama still hedging. Wouldn't take any questions, either.

Candy Crowley says that this is pretty disastrous for the US. Mubarak is flawed, but he's been a solid ally to the US and Israel. Crowley points out that whoever takes over if he falls may well be much worse. Apparently, a lot of experts on the region think it looks like Iran, when the Shah fell.

Egyptian state TV needs Baghdad Bob to calm the local population. Nobody could spin it like him.

The Egyptian trade minister went so far as to say that there would be no "Tunisia effect" in his country because the government was more adept at subsidizing food staples, such as sugar and oil.

Read more: http://www.mcclatchydc.com/2011/01/15/106878/could-tunisia-effect-topple...

A little sugar goes a long way........sometimes :-/

Ghung was you thinking of this clip when you wrote your comment


I guess Mary Poppins didn't translate well into Egyptian Arabic :-(

I guess Mary Poppins didn't translate well into Egyptian Arabic :-(

Umm, Super fragile caliphate's ex pal is.. fearocious?

That has to be the best post ever.

Umm, Super fragile caliphate's ex pal is.. fearocious?


But you forgot the lipstick.

The price of gasoline

The scientific reason is more complicated. We have been producing oil in large quantities for about 70 years and still finding new sources of oil, however most of the easily produced oil has been found. The easily produced oil is about one quarter of all the oil that is known to exist. For the remaining 75 percent we know where it is and how much is there but it is difficult to produce. There are many technologies available but the costs are high. This means the price of gasoline will be higher.

So there is still a lot of oil left.

In other words, adding this to more conversation measures, more NGL production(look out for the U.S.) and more unconventional oil may help to slow the Peak.

Still, these 75 % require high prices to even make it economically feasible to being drilling. The question is if the high oil prices required will be able to be sustained for a long period of time? As some have already pointed out, we may reach Peak Exports before Peak Oil. What good is there if there is even 99 % more oil left in the ground but it's all ultra-deep water and very heavy tar sands?

The economy will never be able to grow healthily without major regions of the world in deep recession(as now).

adding this to more conversation measures

Leiten, you mean conservation ? Conversation ain't going to help a lot.

The question is if the high oil prices required will be able to be sustained for a long period of time?

Most of the 'remaining 75 percent' is unconventional oil. Of course not only the price but also flow rates are important. In theory Canadian and Venezuelan tarsands can produce maybe 10-20 mbd each, but how many years would it take to make that happen ?

Canada & Venezuela to the rescue:


Their combined net oil exports fell from 3.8 mbpd in 1998 to 2.8 mbpd in 2009 (BP).

Yeah, conservation.

Flow rates is in part dependent on price, as well as technology(they reinforce each other).

I don't believe in a sudden revolution but technology improves exponentially. Could the world sustain oil at 90-100 dollars per barrel? If so, I think the so called 'plateau' could be here for a long, long time while OPEC increases it's production bit by bit. And don't forget Iraq(part of OPEC of course but still in the very lower stages of it's potential(realistic and as well as ideal) production).

I think I've moved to the position of Stuart Staniford... I'm still convinced of Peak Oil but I no longer subscribe to the notion of an imminent, very sudden decline.

Growth is more likely to be stalled and civil unrest is to follow. Food prices in particular will converge with higher oil prices and endless recessions to create a worsening spiral for most people. Still, this process will take years and years.

""Still, this process will take years and years.""

I strongly suggest you turn on the news......

""Still, this process will take has taken years and years.""

I second that. And

we may reach Peak Exports before Peak Oil

also misses the boat. Peak Exports has already happened. As has, very likely, Peak Oil Extraction. Unless, of course, Leiten meant "Peak All Liquids". But why we'd want to consider the double counting of ethanol, and the 2/3rds energy equivalent NGLs, on a par with crude, I don't know...

The proper way to count things are all liquids, but adjusted to the energy equivalent of crude oil. These may still rise, but it's questionable for how long and how much.

Still, the Peak may not (and probably won't) be a sudden crash.

We should all expect a lot of quasi-Third World countries like Egypt to be wrought in havoc, unrest and slight chaos.

And Egypt still wants to maintain food and fuel subsidies. Ha.

I wonder if water and food will become the oil of the future?
I read somewhere that Belgium is already exporting water to some Gulf states.
Saudi Arabia is on the cusp of a water crisis already.

The proper way to count things are all liquids

This is not the proper way to count if you want to estimate the URR of a single kind of resource. If you have a discovery curve for only crude oil, you don't mix that with a production curve for "all liquids".
See the thread below where I have some numbers.

Not to mention the issue of fungibility.

The wrong way to count oil is in barrels.

care to elaborate?

Saudi Arabia is on the cusp of a water crisis already.

Canada --the Saudi Arabia of freshwater!

Harm - At the moment Bbelgium may be the big water source. read a report a few days ago: after dropping their load LNG tankers are filling up with Belgium water and sailing back to the Persian Gulf.

In theory Canadian and Venezuelan tarsands can produce maybe 10-20 mbd each,...

Canadian tar sands could in theory produce 20 mb/d? Naw, not even in theory. The Canadian Association of Petroleum Producers, who are supposed to be the experts in the field say, in effect, "not even close."

Athabasca oil sands (Wikipedia)

As of December 2008, the Canadian Association of Petroleum Producers revised its 2008-2020 crude oil forecasts to account for project cancellations and cutbacks as a result of the price declines in the second half of 2008. The revised forecast predicted that Canadian oil sands production would continue to grow, but at a slower rate than previously predicted. There would be minimal changes to 2008-2012 production, but by 2020 production could be 300,000 barrels per day (48,000 m3/d) less than its prior predictions. This would mean that Canadian oil sands production would grow from 1.2 million barrels per day (190,000 m3/d) in 2008 to 3.3 million barrels per day in 2020,...

That's an increase of 2.1 mb/d by 2020. Many, including Nicole Foss, say that increase will never happen. They believe that the tar sands are at or very near their peak right now.

I would expect that a similar amount could be produced from the Orinoco Bitumen could possibly produce about that much also by 2020 but even with the aid of Google I was unable to find any expected production by 2020.

Ron P.

Good info; the components of LNG, tar sands oil, shale oil, and maybe Orinoco are contributing to the global production levels barely hanging on to the 80,000 MB/day mark. Adding the completely unrelated biofuels and coal derivatives pushes it above 84,000.

As of right now,
LNG ~ 8500
Tar sands ~ 2000
Shale oil ~ 1000

So the old-fashioned conventional crude is below 70,000. It's one of those things that always gets overlooked in the creative accounting practices.

Canadian oil sands development is back on track after a brief hiatus caused by the recent economic downturn. According to the CAPP 2010-2025 Canadian Crude Oil Forecast and Market Outlook

The average annual growth rate in oil sands production is six per cent over the forecast period. The 2009 volumes of oil sands production of 1.3 million b/d is forecast to increase to 2.2 million b/d in 2015 then to 3.5 million b/d by 2025. Many oil sands producers that previously put projects on hold have now confirmed that that they will proceed with these projects given the more favorable economic outlook

However, oil sands is not the only new oil production in Canada - there is also East Coast Offshore, Saskatchewan's share of the Bakken Formation, and Alberta's similar Cardium Formation. The CAPP is predicting that total Canadian oil production over the forecast period will be:

2009: 2.72 million b/d
2015: 3.29 million b/d
2020: 3.88 million b/d
2025: 4.34 million b/d

By 2025 Canada will probably be producing more oil than the United States, and almost all of the additional oil will go to export - unlike most oil producers, Canada's oil consumption has been decreasing rather than increasing. Canada has a lot of cheaper alternatives than oil.

But, no, 20 million b/d is not likely in the foreseeable future. Maybe 5 million b/d is.

They believe that the tar sands are at or very near their peak right now.

Then even 10 mbd are never reached. Obviously Foss doesn't believe in the improvements of THAI.

Petrobank gives its latest update on the Toe Heal Air Injection (THAI) oil recovery process and on multi-stage frac drilling advances It appears that it will take until 2015 to prove this technology out at 100,000 barrel per day volumes. So this will not have significant impact on oil supplied until after 2020. The multistage frac technique that is making the Bakken oil and similar formations productive will have more actual oil production until about 2025-2030. Full production from the Bakken and similar formations in world could produce several million barrels of oil per day by 2025. The THAI process increases oil from heavy oil and oilsands but it is not clear how rapidly it can be built out. THAI might double or quadruple the rate of ramping up of oilsand production. Oilsand production with current methods might ramp up at 2 million barrels per day every 10-15 years. Increasing the speed with which you can ramp up oilsand production will help to offset peak oil decline. Doubling available oil from oilsands to 400 billion barrels could delay peak oil by over ten years or extend a peak oil plateau.

I would expect that a similar amount could be produced from the Orinoco Bitumen could possibly produce about that much also by 2020 but even with the aid of Google I was unable to find any expected production by 2020.

Ron, Google Orinoco belt Wiki

Oil Sowing Plan 2005-2030 Source:The data in this article is taken directly from the official PDVSA web page.

Venezuela power policy guidelines until the year 2030 are drawn up in the "Oil Sowing Plan” ("Plan Siembra Petrolera"), which includes six development projects and consists of two stages: one to be executed in the period 2005-2012, and another, to be developed in the second stage, 2012 and 2030.

For the first period of this Plan, an overall investment of around US $56 billion[citation needed] has been estimated between 2005 and 2012. 70% of that amount will be financed by Venezuela — state operator — and the rest by the private sector.

Junin block 2 is under development in cooperation with Petrovietnam. It is expected to produce 200 thousand barrels per day by 2011. The development will include also a heavy crude upgrader; however, its commissioning date is not specified. Junin block 4 is developed in cooperation with CNPC (40%). It is expected to produce 400 thousand barrels per day Junin block 5 is developed in cooperation with Eni (40%). It is expected to produce 75 thousand barrels per day by 2013 with late production of 240 thousand barrels per day. The development will include an oil refinery for production of motor fuels. Junin block 6 is developed in cooperation with a consortium of Russian oil companies, including Rosneft, Gazprom Neft, Lukoil, TNK-BP and Surgutneftegaz. It is expected to produce 450 thousand barrels per day.

CaraboboCarabobo 1 is developed in cooperation with Repsol YPF (11%), Petronas (11%), ONGC (11%), Indian Oil Corporation (3.5%), and Oil India (3.5%). It consists of Carabobo block 1 North and block 1 Central. The expected production output will be 400 thousand barrel by 2013. The upgrader is expected to be ready by 2017.

Carabobo 3 is developed in cooperation with Chevron Corporation (34%), Suelopetrol (1%) pct, and Mitsubishi Corporation and Inpex (5%). It consists of Carabobo block 2 South, block 3, and block 5. The expected production output will be 400 thousand barrels per day by 2013. The upgrader is expected to be ready by 2017.

Good catch Han...I missed that: "conversation measures". Actually that may be a better phrase: all the politicians/citizens seem to do is talk about serious conservation measures. We have a long list of "conversation measures" to deal with PO also. It's becoming more obvious every day one thing we won't run short of is conversations about dealing with these problems. But what about applying real solutions to these problems? Well...we'll converse about that later.

As an unrelated comment/suggestion to Leanan(and others who are posting Drumbeats): could it be possible to narrow down the stories and make them more oil-centric(and less about climate change etc? Not all oil, of course, but a bit more focused on oil)?

Sometimes it's like 20+ stories and it takes a long time to scroll down, read up and then actually check the comments out. The discussion among the commenters also get better if there's fewer, but stronger/more potent, stories to focus around.

Just a suggestion of course.

Oh and hi Ron. Glad to see you active today. Do you have your own blog?
I often enjoy reading your deeply insightful(and especially data-heavy) comments.

I would be a reader if you created one.

You can collapse the threads you're not interested in; saves time.

Curious. So essentially there's no room for debate for some. If you have the slightest suggestion, better to flee entirely than to modify.

I never stop being amazed by how (some) human beings function.

Did you understand what he said? He wasn't telling you to shut up or go away. He merely offered you a tip that many have found helpful. If it's not helpful for you, fine, but no need to be rude about it.

"Did you understand what he said?"

Who is being rude of us? Let's all calm down now.

The drumbeat suggestion still stands, all the (non)drama amid us at present nontheless.

I meant that as a sincere question. Forgive me if I'm wrong, but you write like someone who is not a native speaker of English.

You made a friendly suggestion, and so did Ghung.

Where was debate cut off? (While it seems as if your suggestion was intended to trim the discussion back itself..)

Your question comes up from time to time, and it seems that many visitors here, myself included, like seeing a broad spectrum of issues that nonetheless have bearing on or are affected by Oil/Energy. There are a few ways to shoot through the comments so you can see what is interesting to you personally.


"I never stop being amazed by how (some) human beings function."

Me too. In fact, I have difficulty figuring out how I function most of the time. Perhaps functionality is a figment of our imagination, certainly overrated ;-)

Leiten, no I don't have a blog. I have thought about starting one but I guess I am just too lazy. I don't think I could accomplish much if I did. The only reason I even considered it was I thought some of my children and grandchildren might read it and figure out that perhaps I am not such a crazy old coot after all.

Ron P.

You're one of the few commenters here I always read whenever I see your name.
So if you create a blog, let us know in the comments section. It does not, of course, have to be written on everyday or written in essays each time.

Yair...would any of you clever blokes be interested to calculate the size of the hypothetical tank that would be needed to hold one days supply of crude for the world?

I am trying to convince aquaintances that there will be an issue with liquid fuel supply within their life times. Their eyes sort of glaze over if I mention numbers...they can't grasp the scale of the problem but if I was to say... "Imagine a tank a hundred feet high and from here to yonder gum tree..." or what ever...dunno, it may help them to visualise the amount of oil we use.

Thanks, I'm not crash hot with mathematics.

IIRC, it's about 1.25 cubic miles:

The global economy consumes approximately 30 billion barrels of oil (1.2 trillion U.S. gallons or 4.8×109 m3) each year.[5] Numbers of this magnitude are difficult to conceive by most educated people.[4][6] The volume occupied by one trillion U.S. gallons is about one cubic mile.


1.25 cubic mile is per year; You asked per day:

There is a catchy sounding comparison: 1000 barrels per second: 86 Mbpd and 24 hours x 60 minutes x 60 sec = 86,400 sec. That is 160 cubic meters per second.

A few examples: 40 space shuttles at take-off, 10 Saturn-5 (Apollo) rockets, one olympic sized swimming pool in 10 seconds. 4 Yosemite Falls, 4 tanker trucks a second, to name a few. Fifty supertankers a day. One tenth of Niagara Falls (visible flow). 1,600 Deepwater Horizons.

According to Google, "42 US gallons = 0.207947531 cubic yards".

So 85,000,000 * 0.207947531 = 17,675,540 cubic yards.

If the tank is 20 yard (60 feet) deep, then we need a tank covering an area of 883,777 square yards.

If the tank is square, then the length of a side is 940 yards (2820 feet).

So a tank a little over 1/2 mile on a side and 60 feet deep would hold a day's supply of oil.

Another covenient way of looking at is is to use "acre feet", a unit used in discussing irrigation, since it is the volume of water that covers one acre, one foot deep. According to google, "17,675,540 (cubic yards) = 10,955.9132 acre feet".

And "10,955.9132 acres = 17.1186144 square miles", so a day's supply would cover over 17 square miles a foot deep. Of course, the earth's surface areas is about 197,000,000 square miles, so it is not so much.

Yair...thanks fellers, I think Merrill's "half mile a side and sixty feet deep" analogy will help.

Check out Chris Jordan's art, Running the Numbers.


Oil Barrels, 2008 60x60"
Depicts 28,000 42-gallon barrels, the amount of oil consumed in the United States every two minutes (equal to the flow of a medium-sized river).

Request that global warming related articles be retained. There are a lot of articles I am not particularly interested in so I just skim the headlines quickly or ignore them. I can get through all the excerpts in a few minutes and then drill down for more depth when it is warranted based upon my interests.

They already cut back the drumbeat to four days. Let us not further dilute it. In any event, I don't think a change would be merited based upon one person's preferences.

Quite right. But I was not advocating a change merely on my own, but rather lifting an idea amongst others, which I think your reply illustrates and those of others.

Clearly you yourself have shown that I'm not the only one who is interested in filtering the news(climate change happens to be an area we both share in that regard).

In the end however, it's up to the editors. And I'm under no illusion that the Drumbeats need any dramatic, overt and sudden overhaul. They don't.
This is just a small, slight tweak I am suggesting.

No more no less.

Leiten, if you really don't want to read a particular commenter's posts or are averse to a specific topic of discussion you could use Firefox as your browser with the Greasemonkey ad on and write your own script such as this: http://userscripts.org/scripts/review/4107 and create your own killfile for those specific cases.

If I don't want to read something I just scroll past it.


To be specific, you can collapse entire threads and subthreads. There's a (+) or (-) symbol in the left corner of each comment. Those symbols control thread display. It works well.


Article about BP in Russia, with reference to a new spill. I thought US readers would like to know they are not alone.

The moves came as the British oil group, which was at the centre of the Gulf of Mexico oil spill last spring, admitted it had shut down the UK's only onshore UK oil field, Wytch Farm, after a pipeline leak.

BP said it had closed Wytch Farm, near Poole in Dorset, in November after spilling "around one barrel" of oil, the equivalent of 150 litres, but hoped to have it back up and running as soon as the weekend.

17000 barrels a day we've been missing. No wonder the price of petrol is going up.

Development of shale gas is coming to France. Total published a flier in English about the shale play in SouthEast France (pdf)
There are some good geological informations in the flier. Total is expecting it contains up to 85 TCF (trillion cubic feet?) in a formation they say to be similar to the North American Fayetteville & Woodford Shale Gas Plays. Total is looking for partners to help develop up to 50% of the play... they even give their contact info in case you have a couple billions $ to invest.
There is also some action going on in Paris bassin to exploit shale oil: 100 billions barrels in place but the best expectation is to recover 0.5-1% of that amount over decades.

Interesting 66...thanks. And here's a little clarification. First, the 85 TCf is classified by Total as a resource...not a reserve. Sounds like a small distinction but it's not. Reserves are volumes of NG that can be produced. The resource they describe is NG in the rock. They offer no expectation of how much of the NG could be produced economically at any particular price. Eventually they may prove there is a huge volume of NG that can recovered at concurrent prices. But the drilling program they describe is a very preliminary test of the potential and not a production effort. This is a very necessary and critical phase in every untested trend and may have significant positive results...or may kill the whole play. Time will tell.

I did discover one very incorrect statement in the presentation: " The success of producing gas from North American shales can be attributed to the successful application of horizontal drilling & low cost multi stage fracture stimulation techniques." This couldn't be any more wrong. The frac'ing phase of SG development is very expensive. Sometimes more money is spent fracing the well as drilling it. During the tail end of the SG development in east Texas as many as 12 separate fracs were pumped down a single horizontal well. In the very hot Eagleford Shale play (which isn't really a shale gas play) as many as 50 fracs are being pumped down an individual horizontal well.

So there may be a big SG future in France...or not. And even if there proves to be a significant volume of "technically recoverable" NG from this play very little will be produced if the cost/profit ratio doesn't meet at least minimum requirement. Based on plan proposal Total offers I'll guess it will take 3 to 6 years (if they started today) before they would have a good handle on the economic viability of their SG.

Now various lobby groups want to cut the petrol price in the UK:


The question goes out: right or wrong? Is it not good to tax fuel ahead of the curve(or at least in the midst of it)? Or will it be too much too fast?

The UK economy actually shrank in the last quarter so there is no pressure on Osbourne and the boys to ease up a little bit. How easy is it for politicians to defend tax increases on something as basic as petrol prices?

It's noteworthy that the prices on petrol are the highest in history at the moment in the UK. Even higher today than in 2008, despite almost 50 dollars lower price.
This is mainly explained by tax increases(both directly and indirectly through the VAT rise)

It is mainly explained by the massive devaluation of the pound against the dollar immediately after those dollar oil highs in mid 2008. In July 2008 the $ was at 1.98 against the pound making the oil price of $133 per bbl about £67 . . . today oil is at $99 (Brent) and the $ exchange rate of 1.58 is making it £62 . . . The fuel duty and VAT rise doesn't help but the 20% devaluation of the pound was the kicker to the highest ever prices of petrol in the UK.

The CNN coverage of the situation in Egypt has been newly titled as "Brink of Collapse." Of course they have no idea how right they are, or why. Or maybe one of their news writers has been reading Tainter? Naaah.

Their reporter there says that other than the government, life as usual is going on there. Airport's operational, planes are leaving on time, and journalists and other foreigners are not having any problem traveling the country. The protests are aimed solely at government institutions, nothing else.

That's so strange. If we ever reached this point in the US, there's no way it would be safe to travel the streets.

"If we ever reached this point in the US, there's no way it would be safe to travel the streets."

Exactly. We in this country are used to only having "white people problems" as Louis CK puts it. "God, why does my ATM make me push a button for English! This is bull****!"

The rest of the world is way more used to dealing with the realities of life and carrying on with business. I fear how we will handle the end of our long vacation from reality.

Now dont shoot the messenger:

Hydrogen power for largely unmodified vehicles?


website: http://www.cellaenergy.com/

Not sure where the energy comes from for the hydrogen. EDIT: ah, website suggest using the variable generation of offshore wind farms to produce hydrogen by electrolysis of seawater, reducing need for expensive submarine cable connections.

website suggest using the variable generation of offshore wind farms to produce hydrogen by electrolysis of seawater, reducing need for expensive submarine cable connections.

Because hydrogen pipelines and/or hydrogen tankers are so much cheaper. Perhaps they plan on miracling they hydrogen right into your fuel tank. You wont even have to go to the fuel station to fill up! /sarc

Electrolysis of seawater doesn't produce hydrogen. It produces sodium hydroxide and chlorine.

maz - FYI There is no method of building a transport system for anything (electricity, oil, NG, water, hydrogen, people, etc) than spooling electric cables along the sea floor. Additionally building a processing system to do such conversions might easily double the costs of the facilities.

For years and years I have been wondering what a Black Swan would look and feel like. Mish calls it the unwatched pot coming to a boil. I don't know if this ME uprising is THE Black Swan that kicks the bottom card loose but it is interesting that this is how a Black Swan will happen.

I'm glad I was not short crude oil today without a sell stop. I couldn't afford too many $4,250 mistakes and Monday may be limit up.

I did buy all the parts for my 14 X 39 foot hoop house today, tomorrow may be a good time to buy some 50# bags of rice, flour and sugar. Oh yes, and another 40# of dog food. No big deal, just in case.

I'm not sure we can call this a Black Swan. Disruptions due to food and energy prices are pretty much expected. This is a better example of non-linearity or chaotic patterns, I'd say.

The Black Swan here would be peace breaking out amid fair distribution of resources following Jubilee.


What Are the Implications of Political Unrest in the Middle East?

Any drastic changes in Middle Eastern political arrangements have broad implications for the rest of the world. Nowhere would the consequences of radical political change be felt more than in energy markets, at least in the immediate aftermath.

What are the possible scenarios and what would be their effects?

Scenario 1. The uprisings in Egypt and Tunisia are contained either through concessions and/or brutal measures by the government. It seems unlikely, however, that either government will be able to get away with too much brutality. Given that none of these countries are oil-rich the effect on oil prices should be negligible.

Scenario 2. It seems most likely that the regimes in both countries are on their way out. The pressure will now be on both governments to make concessions to their people and make amends for the appalling economic performance and widespread kleptocracies that have robbed their people of material wealth for decades. The change may not occur overnight, but the process is clearly underway toward the exit of the existing regimes in both countries.

Scenario 3. The events in Tunisia, Egypt and possibly Yemen electrify the populations of countries in the Middle East, spurring popular uprisings across the region. Governments throughout the region give way to new leaders and systems of government and the ensuing uncertainty results in runaway oil prices. Highly unlikely.

Seeing more articles like this...not sure I agree with the predicted effect on oil prices.

Here's some more related articles about events/impacts in Northern Africa:

The Oil Market Holds Its Breath http://seekingalpha.com/article/249489-the-oil-market-holds-its-breath?s...

Rising Oil Prices: Fundamentals and Geopolitical Risk http://seekingalpha.com/article/249465-rising-oil-prices-fundamentals-an...

"People are concerned that this could change the face of the Middle East, and no one knows what direction that might take,” opines oil analyst Phil Flynn of PFGBest Research Chicago via the LA Times. “Will it be liberal and democratic or will it be fundamentalist and Islamic?"

Fundamentals are critical in the long run for oil prices, of course, and that surely plays a role in the recent rise. But there's a new factor in town, albeit one that's no stranger to higher prices in the annals of energy markets: fear.

Are We Witnessing the Start of a Global Revolution? North Africa and the Global Political Awakening, Part 1 http://www.globalresearch.ca/index.php?context=va&aid=22963

Some key net export data for 2005 to 2009, plus Chindia's net imports. Note that Chindia's net imports in 2009 (7.3 mbpd) exceeded Saudi Arabia's 2009 net exports (7.1 mbpd).


According to the comment by Undertow above, in 2009, the northbound flow of crude thru the Suez canal was about 1.o million bbl/d in 2009 and the flow thru the SUMED Pipeline was another 1.1 million bbl/d. Given that the imports to Chindia have increased such that they are taking a much larger fraction of the output from around the Persian Gulf, has the available flow thru the Suez choke point dropped, and by how much? Could it be that there is no longer much concern about the possibility of a shutdown of the Suez Canal, is all the flow northbound could now be carried thru the pipeline?

E. Swanson