Drumbeat: July 20, 2011
Posted by Leanan on July 20, 2011 - 10:23am
This series takes an astrophysicist's-eye view of the predicament we face managing resource limitations, energy production, climate change, and economic growth. The approach is often playfully quantitative, with the aim of arriving at a fresh perspective on our world. Weekly articles stress estimation over exactness, because often a reasonably complete picture can be developed without lots of decimal places. Estimations of this type can be used to bring clarity to complex issues, or to evaluate the potential of proposed energy solutions. Hopefully, readers will gain the courage and techniques to start making valuable estimations of their own. The series starts out with a two-part assessment of the implications of continued growth, then settles down to tackle a variety of cute questions relating to energy storage, biofuels, home energy, transport, climate change, etc.
US to Regulate Offshore Drilling Contractors in 'Select' Cases
U.S. officials are pursuing a relatively narrow approach to regulating offshore drilling contractors and service providers, such as Transocean and Halliburton, after reviewing their scope of authority over such companies in the wake of the Deepwater Horizon spill.
Is an "Oil Shockwave" America's Biggest Energy Threat?
War games have long been used to prepare the military for battle, but what about the national threat of a global energy crisis? According to an advocacy group called Securing America’s Future Energy (SAFE), Middle East turmoil, a shaky national economy, and heavy dependence on foreign oil have combined to make America’s energy supply “dangerously vulnerable.”
Argentina: 'There is no fuel shortage, just a longer wait to fill up,' De Vido says
Planning Minister Julio De Vido, denied this morning that the country is suffering from a fuel shortage, assuring that “there is no lack of petrol or diesel, however, just a longer wait to fill up,” adding that, “in December it will be exactly the same.”
Cyprus: No more night or weekend cuts but ‘crisis not over’
AS OF yesterday authorities announced that power cuts would be limited to one per day without night or weekend blackouts, Trade and Industry Minister Antonis Paschalides said.Since the Mari naval base blast took out the island’s main power station ten days ago, some areas islandwide have been subjected to two and three power cuts each day, some lasting more than the initially-stated two and a half hours. Other areas have had fewer, or no cuts at all.
Fuel shortage hits Uganda airport
Some planes landing at the Entebbe International airport last week were forced to fly to the Jomo Kenyatta International airport or Dar-es-Salaam to refuel.The shortage of aviation fuel at the Kampala based international airport was blamed on a decision by Kenyan authorities to divert jet fuel destined for Uganda, a landlocked country that heavily relies on Kenya's Mombasa port.
Growing Population, Economies Fuel Asian LNG Demand
Southeast Asian demand for liquefied natural gas (LNG) will play a significant role in the global LNG trade as forecasts call for growing populations and economies in the region and demand for cleaner-burning natural gas.
Can global energy get any stormier?
Shell is selling its stake in a huge Canadian Arctic gasfield and pipeline. Already-shrinking ConocoPhillips is resigning from the oil majors by splitting itself in two. The clean-energy industry is in crisis because of politics and economics. Germany has quit nuclear energy, and Japan is discussing the same move.What unifies these disparate events? They are more evidence of an unprecedented shakeup in global energy and the power geopolitics that flow from it.
Australia to Dominate Floating LNG Market through 2016
Australia's proximity to growing liquefied natural gas (LNG) demand in Asia, its sizable conventional and unconventional gas resources, stable fiscal regime and accessibility to international oil and gas companies, are driving LNG development in the Land Down Under.
Liberia's throw of the resource-curse dice
Deep undersea offshore from west Africa is a 625-mile long geologic formation that is one of the world's least-covered magnets for oil companies from around the world. Already this formation, created in the Cretaceous period as many as 100 million years ago, is producing some 3 million barrels of oil a day, a volume that in three years or so may grow to more than 7 million barrels a day. The current sources for this bonanza are Ghana and Nigeria and further down the coast in Angola, but Liberia and Sierra Leone -- better known for their devastating civil wars -- may also become serious petrostates.
Oil and gas in the South China Sea
WHY is there so much tension in the Spratly archipelago in the South China Sea? Why are there six claimant countries for small islands and islets which otherwise are useless, except for those who want to go on an honest-to-goodness self-exile after plundering their country?The answer it seems is oil and gas. The other answer is control of navigational waters through which pass much of the supplies of countries like Japan.
German utilities look to Russia for gas and money
The faster-than-planned nuclear phase-out in Germany together with a tax on nuclear power is eating away earnings at the power companies, with RWE forecasting three years of falling profits.It has also put limits on a source of power that has lower carbon emissions than coal-fired plants. This has hit RWE as Germany's largest emitter of the greenhouse gas and also EnBW as it relies more heavily on nuclear power than competitors.
Chevron to pay U.S. $1.1 mln penalty over Gulf leases
(Reuters) - Chevron will pay a $1.1 million civil penalty for illegally claiming transportation deductions for certain oil leases it holds in the Gulf of Mexico, the U.S. Interior Department said on Wednesday.
BP seeks White House emails on oil spill response
NEW ORLEANS (AP) -- BP is seeking a court order compelling the White House to turn over emails by a former top adviser to President Barack Obama about the administration's response to last summer's massive Gulf oil spill.
A Civic Solution to the Energy Crisis
I explained it this way. The strategy rests on the notion that government is the bane of Nigerian governance. What the country needs are citizens committed to roof solarisation plans in which they construct private homes configured to optimise solar energy. The principle is that if a house can have a roof, then it can produce, use, and conserve its own energy. The current idea of erecting a dejected looking solar panel guarded by an equally solitary iron cage is too tokenistic for the scale of the problem. It consumes space and transforms what should have been mainstreamed in everyday life into the hi-tech equivalent of a village shrine. It looks like an edifice erected to an important deity.
The chicken and egg challenge facing electric cars
Does the electric car revolution depend on public charging points? That's the question being asked as a new recharging network is set to open.
US Air Force: We want to use biofuels
WASHINGTON — The US Air Force is ready to switch to biofuels to help power its warplanes but the price of alternative fuels remains too high, military officials said Tuesday.Anxious to reduce its reliance on oil, the Air Force has approved the use of synthetic fuels for nearly all its aircraft and expects to get the green light for biofuels by the end of 2012, Undersecretary Erin Conaton said.
Biofuel demand in US driving higher food prices, says report
Demand for biofuels in the US is driving this year's high food prices, a report has said. It predicts that food prices are unlikely to fall back down for another two years.
A conversation with Rob Hopkins (and hosted by Richard Heinberg)
Richard Heinberg hosts a conversation with Rob Hopkins on New Thinking in Transition. The podcast begins with Rob giving an update on what is going on in the Transition movement and introducing the upcoming Transition handbook, and is followed by a Q&A.
Indian Refiners Said to Seek Saudi Oil Next Month as Iran Warns of Cutoff
Indian refiners asked Saudi Arabian Oil Co. for at least one additional shipment in August as a payment dispute jeopardizes Iranian cargoes, four people with knowledge of the matter said.Iran has told customers in India that they won’t receive shipments next month unless outstanding bills are paid, according to the people, who asked not to be identified because they aren’t authorized to speak to the media. Indian refiners have said global sanctions against Iran over its nuclear program have made banks unwilling to transfer oil payments.
FACTBOX - Iran's oil trade under sanctions
(Reuters) - Iran, which faces international sanctions over its nuclear programme, has warned India that it could halt crude oil shipments from Aug. 1 if there is no solution to a seven-month payments freeze imposed by India's central bank.
Did U.S. firm use bribery to land fuel contract for U.S. forces in Iraq?
A lawsuit in Florida has cracked open a rare window into the cloistered world of high-level war contracting, as a billionaire oilman defends himself against allegations that his company paid off Jordanian government officials to control supply lines of fuel to U.S. forces in Iraq.
Gadhafi Could Remain in Libya Under French Plan
France says it is possible that Libya's crisis could be resolved through a plan that would allow embattled leader Moammar Gadhafi to remain in the country if he gives up power.
Libya rebels suffer heavy casualties at Brega
(Reuters) - Eighteen rebel fighters were killed and up to 150 wounded in clashes with forces loyal to Muammar Gaddafi for control of the eastern oil hub of Brega Tuesday, a doctor in a rebel-controlled town said."Yesterday it was a disaster," Dr Sarahat Atta-Alah told Reuters at Ajdabiya hospital in eastern Libya Wednesday.
Venezuela boosts proven natgas reserves by 11.3 tcf
CARACAS (Reuters) - Venezuela boosted its proven reserves of natural gas by 11.3 trillion cubic feet (tcf), taking reserves to 195.1 tcf as of the end of 2010, according to the government's gazette circulating on Wednesday.The gazette did not specify from where the new reserves came.
Energy Department to install fuel cells at 8 military posts
(Reuters) - The Energy Department said on Tuesday it would install 18 fuel cell backup power systems at eight U.S. military posts, as part of a partnership with the Defense Department to bolster energy security.
NEW YORK (CNNMoney) -- In an office building in downtown San Francisco, 42 people are trying to sell solar power using a model previously used mostly for things like restaurant deals or haircuts.One Block Off the Grid, a start-up company run by a 32-year old former online gaming entrepreneur, is hoping the power of online group deals can do for solar what it's done for the service industry. Call it the Groupon of solar power.
Deffeyes: Who pushed the year 2010 into the winner's circle?
If we take the new EIA spreadsheet at face value, the year 2010 outproduces 2005. "The King is dead. Long live the King." It doesn't alter the big picture. Oil production is not growing significantly. With oil prices up, it is going to be very difficult to pull out of the recession.Of course there is curiosity. Who pushed the year 2010 into the winner's circle?
Crude Oil Climbs as U.S. Inventories Declinel, European Debt Concerns Ease
Oil advanced for a second day in New York on signs that crude stockpiles are shrinking in the U.S., and on speculation that European leaders may agree on steps to address the region’s debt crisis during talks tomorrow.The industry-funded American Petroleum Institute said crude supplies fell the most in six weeks. An Energy Department report today may show inventories dropped for a seventh week, the longest run of declines in two years. Euro-area government chiefs are meeting tomorrow in Brussels for the second time in a month as they aim to break a deadlock over a new Greek rescue.
Analysis: Russia's biggest contingent liability: oil
(Reuters) - With a sovereign debt of just 10 percent of GDP and half a trillion dollars in reserves, Russia has a balance sheet that the United States and Europe can only envy as they battle their debt crises.But a closer look at Finance Minister Alexei Kudrin's latest fiscal plans reveals two concerns: he is betting that oil prices will stay high for years; and even if he is right, the pace of budget consolidation will slow significantly.
By his own reckoning, the books would only balance with oil at $125 per barrel next year, reflecting the impact on the public finances of the global slump that put an end to years of surpluses generated at much lower oil prices.
Asian ministers discuss South China Sea, security
BALI, Indonesia - Territorial disputes and flare-ups in the South China Sea were expected to take center stage at Asia's largest security forum this week, after Vietnam and the Philippines accused China of interfering in efforts to explore for oil and gas.
Solution in sight for India-Iran oil payments issue - U.S. official
(Reuters) - A solution to a seven-month long payments issue between India and Iran over crude supplies is in sight, after six months of work with the United States, a U.S. official said in India where Secretary of State Hillary Clinton is visiting.
Malawi Protestors Defy Court to Demonstrate Over Fuel, Government Policies
Tens of thousands of Malawians defied a court order and held protests in the biggest cities against government policies and a fuel shortage, said Rafiq Hajat, director of Malawi’s Institute of Policy Interaction.
Shell, BP Pay Talks Set to Resume in South Africa Tomorrow to End Walkout
Royal Dutch Shell Plc (RDSA), BP Plc (BP/) and other oil companies operating in South Africa will probably resume pay talks to end a 10-day strike that has caused fuel shortages.
Venezuela model for oil change
A new contract model adopted on a Venezuelan heavy oil project should be applied across the board to provide the necessary fiscal incentives for foreign investors to tap the country’s reserves, a legal expert has argued.
Cnooc to Buy Failed Opti Canada to Increase Oil-Sands Reserves
(Bloomberg) -- Cnooc Ltd., China’s biggest offshore oil producer, agreed to acquire bankrupt Opti Canada Inc. for $2.1 billion in cash and debt to increase its oil-sands reserves, and pledged to buy more energy assets globally.
China May Plan Ninefold Coal Gas Output Hike, Bernstein Says
China may increase subsidies for coal-seam gas production amid a plan to increase output ninefold by 2015, Sanford C. Bernstein & Co. said.The world’s biggest energy user may unveil a proposal to extract natural gas from coal areas, possibly with an output target of 9 billion cubic meters by 2015 from about 1 billion cubic meters a year currently, Neil Beveridge, a Hong Kong-based analyst at Bernstein, said in an e-mailed report today. The U.S. currently produces more than 50 billion cubic meters of coal- seam gas, also known as coal-bed methane, he said.
Russia approves Total entering Arctic gas project
(Reuters) - Russia approved Total's participation in an Arctic gas project on Wednesday, an antitrust official said, exempting the French oil major from laws limiting foreign investment in strategic sectors.
Gazprom signs gas supply deal with IOC
(Reuters) - Gazprom said on Wednesday it signed a memorandum to supply the Indian Oil Corporation Limited with 2.5 million tonnes of liquefied natural gas (LNG) a year for up to 25 years.This is the fourth gas deal Gazprom, the world's largest gas producer, has signed with Indian companies this year.
Oman on brink of mega gas project
Need has compelled the Oman to try to exploit its hard-to-reach tight gas in a project with BP. The task is difficult, but Oman has little choice.
ConocoPhillips Spin-Off: Minimized Downside, Volatility but Less Upside Than Expected
Tough question: Does this strategy reflect the company's attitude toward peak oil? In that view of the world, global oil reserves are limited or shrinking and there will be a premium on exploration and development activities as well as reserves ownership. Additionally, the refining segment will be increasingly squeezed by lower demand and higher feedstock costs.
Cheniere to spend $6 billion on LNG terminal
LAKE CHARLES, La. - Cheniere Energy Partners LP plans to spend at least $6 billion to modify its liquefied natural gas terminal in southwestern Louisiana to export natural gas.
Russia Aims to Boost Gas Supply to Europe After Nuclear Exit
Russia will consider opportunities for increasing direct natural gas supplies to Europe and potentially build new pipelines as Germany shifts away from nuclear power, Russian Energy Minister Sergei Shmatko said.The retreat from nuclear may create increased demand that would support pipeline projects such as OAO Gazprom’s planned South Stream or the expansion of the Nord Stream pipe to Germany, Shmatko told reporters while accompanying President Dmitry Medvedev at a meeting with German Chancellor Angela Merkel in Hanover.
Radiation-Tainted Beef Spreads Through Japan’s Markets
MINAMISOMA, Japan — Even after explosions rocked the Fukushima Daiichi nuclear power plant, Kuniaki Sato, who raises cattle here about 20 miles from the crippled complex, said he had received no clear warning from the government about the possible dangers of radiation to his herd.So six weeks after the accident, on April 23, he shipped 12 of his prized cattle from his farm to market.
Staff Tells N.R.C. That U.S. Rules Need Overhaul After Fukushima
The Nuclear Regulatory Commission’s rules are a patchwork that needs to be reorganized and integrated into a new structure to improve safety, the agency’s staff told the five members of the commission on Tuesday at a meeting.The session was called to consider reforms after a tsunami caused the triple meltdown at the Fukushima Daiichi nuclear plant in Japan. But how speedily the commission will take up the recommendations is not clear.
Uranium find in India could be world's largest - report
(Reuters) - A huge deposit of uranium found in Andhra Pradesh could turn out to be among the biggest reserves of the mineral in the world, reports said on Tuesday citing the head of the country's atomic energy department.The Tumalappalli mine in the state has confirmed 49,000 tonnes of ore and there are indications that it could hold reserves totalling three times its current size, The Times of India quoted Srikumar Banerjee as saying.
Judge stops transport of megaloads through W. Mont
MISSOULA, Mont. (AP) — A judge has upheld a request by Missoula County and three conservation groups to stop Imperial Oil/Exxon Mobil from transporting massive oilfield equipment modules through western Montana.
Yellowstone River oil spill takes toll on wildlife
BILLINGS, Mont. (AP) — Wildlife officials captured an oiled hawk Tuesday and were trying to capture more than a dozen other animals that might have been harmed by a broken Exxon Mobil pipeline that spilled an estimated 1000 barrels of oil into the Yellowstone River in MontanaThe U.S. Fish and Wildlife Service said that an animal rescue team on Tuesday captured a Cooper's hawk that had been oiled and hoped to rehabilitate it.
During Hillary Clinton's India visit, nuclear power is front and center
With Secretary of State Clinton in India this week, the US and India are attempting to make up for decades of estrangement. However, disagreements about a 2005 nuclear deal threaten progress.
The only way an SUV (sort of) makes sense
Behold the Four Horsemen of the Ecological Apocalypse: The monster house, the private jet, the Dubai indoor ski resort – and the SUV.Yes, the SUV. The human race has been hard on Mother Nature, and the SUV is one of our egregious blows. Last year, I drove one that sucked down almost 24 litres of premium fuel every 100 kilometres.
Our view: 56 mpg could be a bridge too far
Have you ever done the financial calculations on whether to buy the hybrid version of a car or its conventionally powered twin? It's hard to justify the investment. If the gas-sipping hybrid costs about $4,000 more, which is typical, you'll have to drive about 80,000 miles at current gas prices before the purchase starts saving you money.
Opposing view: Raise standard to 60 mpg
America's oil addiction is putting our wallets at the mercy of Big Oil and volatile foreign countries. As high gas prices continue to burn through Americans' paychecks, it is clear that cutting our country's dangerous addiction to oil will require building better, more fuel-efficient cars and trucks.
Futuresense expert predicts major changes ahead
Hybrid cars have been billed as a natural progression, however, he said, price was still a major deterrent for many and city car-pooling would become the solution.``Inevitably, peak oil, climate change and green cultural sensibilities will make fossil fuel cars more impractical,'' he said.
``The tipping point will occur when people realise they don't need to own a car and city car-pooling will take on a new meaning as we order personal trips as we need them. Imagine the robotic smart taxi arriving at your door – no need to worry about maintenance, insurance, fuel, rego or roadside assist.''
A New Study Takes The Wind Out Of Wind Energy
Facts are pesky things. And they're particularly pesky when it comes to the myths about the wind energy business.For years, it's been an article of faith among advocates of renewables that increased use of wind energy can provide a cost-effective method of reducing carbon dioxide emissions. The reality: wind energy's carbon dioxide-cutting benefits are vastly overstated. Furthermore, if wind energy does help reduce carbon emissions, those reductions are too expensive to be used on any kind of scale.
First lady teams up with grocers nationwide
A collection of retail heavyweights will join first lady Michelle Obama's campaign to bring fresh fruits, vegetables and other nutritious foods to the USA's "food deserts" — impoverished areas with little access to healthy foods.National chains, including Wal-Mart, Walgreens and SuperValu, and some regional retailers have agreed to open or expand more than 1,500 stores to bring more nutritious and fresh food to underserved communities. The companies' executives are joining the first lady at the White House today to make the announcement.
U.S. health body recommends free birth control coverage
WASHINGTON (AP) – Millions of women stand to gain free access to a broad menu of birth control methods, thanks to a recommendation issued Tuesday by health experts advising the government.An Institute of Medicine panel recommended that the government require health insurance companies to cover birth control for women as preventive care, without copayments.
Rising U.S. per capita income directly traces the path of U.S. oil production whereas the bunch in Washington measures everything in dollars, oblivious to the crucial role of energy. However, oil executive M. King Hubbert, the originator of the “peak oil” hypothesis, theorized that a no finite resource could support exponential growth and that production rate plotted verse time would show a bell-shape curve. That is at some time production would have to peak, declining as rapidly as it had risen. Today’s situation proves his thesis, e.g., American incomes have flattened as has its energy production. With a rising population and emerging economies, demand outstrips supply. Coupled with a declining dollar, one BTU of energy today cost thousands of times what it did in 1970. The radical falloff in energy density of BTUs per dollar implies a precipitous drop in American living standards. Billionaire developer Sam Zell recently warned of a potential 25 percent decline in living standards. America’s future may look like its past.
Ensuring fair shares in a world of limits
As worldwide demand increases for natural resources that are already in short supply, how should aid donors and campaigners respond?
David Suzuki: Natural gas is not a solution for climate change
Can a fossil fuel help us avoid the harmful effects of other fossil fuels? It’s a question that’s come up lately as natural gas is eyed as a cleaner alternative to oil and coal.
Africa a frontier carbon market
Africa is seen as the next frontier for investment in carbon offset projects while China and India prepare to roll out their own cap-and-trade schemes.
East African drought a sign of things to come
As the debate rages in Australia about the merit of putting a price on carbon, millions of people in East Africa are already suffering the impact of climate change. In the Horn of Africa, the countries of Kenya, Uganda, Somalia, Ethiopia and Dijbouti are facing a devastating drought with little but food and water distribution programs standing in the way of starvation. Most people in the region are already poor and living directly off the land. They cannot expect to grow their own food again until, at the earliest, 2012 when the rains may return. Until then, they are completely dependent on aid provisions.
RISING sea levels could threaten the existence of small island states such as Tuvalu, Kiribati, the Marshall Islands and the Maldives. If the international community cannot or will not slow global warming, the least it can do is help those states prepare for life after land by recognizing a new category of state — the deterritorialized state.If we do nothing and these nations become uninhabitable, their citizens will not only become displaced persons seeking refuge in other countries; they will also lose control of their vast maritime zones, including valuable fisheries and mineral deposits, which will likely become the property of neighboring states or the global commons.
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Saudi Oil Exports to Dive Long Term
http://www.emirates247.com/business/economy-finance/saudi-oil-exports-se...
Not news to Jeffrey Brown, but the source is interesting. From a Riyadh based firm and published in media owned by a member of the Emirates ruling families.
I suspect that the "slowly rising oil production" was required by local political correctness in the Kingdom.
Best Hopes for Accepting Truth,
Alan
I think this is new data
...an average of 582,000 bpd of crude will be burned for power generation in 2011, up from 170,000 bpd in 2006.
Thanks Alan, this is big news since the source is from a firm in Saudi Arabia itself.
Peak oil exports is the exact same thing as peak oil for perhaps 90 percent of the population of the world. And peak oil exports happened in 2005. We began feeling the effects of that peak in 2008. The crash is well under way. It has started slowly but will likely pick up speed soon.
Ron P.
And the apparent only release is via Emirates in media owned by a member of the Dubai ruling family.
A quick Google showed nothing else out there.
H'mmm
Truth in small doses ?
Alan
Something similar was published in the WSJ a month ago.
Rising Saudi Thirst for Oil Drives Plans to Go Nuclear
I've noticed this with the Arab press. Stories of a "sensitive" nature are often printed two weeks to a month after they appear in the western press.
I will note that this article is much more numeric, and mentions "Citing official data" - access to official data. Although typos are apparent.
As noted here, access to detailed official Saudi data is almost non-existent.
I do agree that cultural norms for breaking bad news are worth noting. Especially since there will likely be more bad news to come.
The WSJ apparently interviewed the study's author.
Emirates 24/7 got a copy of the report - In a study sent to Emirates 24/7, Jadwa said ...
Little Hope for Sharing,
Alan
We're going to need a new distraction soon. I'm board with the old ones.
The traditional distraction for the leaders is to have war or rumors of war.
Sometimes the people in the trenches wise up and, well that can't happen.
David Weber had the same thought and it was the title of the third Honor Harrington novel he wrote, "A Short Victorious War."
Craig
That indeed seems to be the pattern for many Big Things. I believe the strategy was successfully used for the Fukushima nuclear reactors, radiation, contamination, etc.... ;)
***
EDIT: Case in point! ==>
http://inhabitat.com/physicist-claims-fukushima-disaster-health-risk-gro...
How many head of cattle are too hot to handle? What a mess.
Radiation-Tainted Beef Spreads Through Japan’s Markets
http://www.nytimes.com/2011/07/19/world/asia/19beef.html?_r=1
Now Japanese agricultural officials say meat from more than 500 cattle that were likely to have been contaminated with radioactive cesium has made its way to supermarkets and restaurants across Japan in recent weeks. Officials say the cattle ate hay that had been stored outside and exposed to radiation.
Contaminated hay has been found at farms more than 85 miles from the crippled Fukushima Daiichi plant
“It’s finished,” he said. “Nobody will ever want to eat beef from Fukushima again.”
_______________________________________
There is an interesting stress between "Not enough radiation detectors available to assess the damage" and "banning the sale of Geiger counters". These are two different types of equipment, but thought provoking. It is becoming very clear that there is not enough stock IN THE WORLD to cover the need and demand generated by this one event.
I am currently working for a metals recycling business and our yard in Europe recently purchased radioactive contaminated metal. We decided we needed to purchase some detectors for our US location to be on the safe side... It has been quite the eye opening experience, to say the least!
The speed may be unexpected by most. Remember, as EROEI declines, in order to sustain more and more energy must be expended, which of course increases demand for oil at the source, thus reducing net exports even more! ELM may be the daemon of the dive.
Craig
edit: The faster we go, the behinder we get! My prediction: more and more frantic efforts to extract less and less net oil (and coal), until when EROEI hits the magic "1," it stops!!!! finis.
In 2005, Saudi Arabia net exported 9.1 mbpd (total petroleum liquids, BP), when they consumed 18% of their total petroleum liquids production.
In 2010, Saudi Arabia net exported 7.2 mbpd, when they consumed 28% of their total petroleum liquids production.
At the 2005 to 2010 rate of increase in Saudi Arabia's ratio of oil consumption (C) to oil production (P), their C/P ratio would approach 100% (and thus zero net oil exports) in about 15 years, around 2025.
As a "What If" scenario, this C/P analysis suggests that post-2010 Saudi CNE (Cumulative Net Exports) would be on the order of 20 Gb. Interestingly enough, if we combine Venezuelan and Saudi numbers and do the same C/P analysis, we only get 21 Gb of post-2010 combined CNE.
I realize these numbers sound crazy to most people, but do the math for Saudi Arabia. Take the natural log of 28% divided by 18%, and then divide by five years. You get a five year rate of increase in the Saudi C/P ratio of 8.8%/year. Then take 100% divided by 28% and take the natural log, and divide by 0.088 and the answer is 14.5 years (time remaining until Saudi Arabia hits a 100% C/P ratio). Of course, my math could always be wrong, so please let me know if I made a mistake.
We all agree with your analysis, and it's relevance to these discussions, but can't you just build us a pretty picture to explain this paragraph? I mean, it is a really important point of view, but I think many people's eyes glaze over when reading this kind of data.
Sam's middle case projection is that (2005) top five post-2005 CNE will be at least 50% depleted by the end of 2012 (his best case projection is at least 50% depleted by the end of 2014). Imagine a fuel gauge that shows top five CNE with a full "Net Export" tank at the end of 2005. Here is Sam's middle case projection for what the fuel tank would look like at the end of 2012:
In other words, Sam's middle case projection is that the annual volume of net exports from the (2005) top five will be down by 34% in 2012, relative to 2005, but that they will have shipped more than half of their post-2005 supply of Cumulative Net Exports by the end of 2012. Note that 2010 top five net exports were down by 12% from their 2005 level. The top five numbers are currently falling between Sam's middle case and best case projections.
Do you have, at hand, figures for ELM showing past and present energy cost levels, rate of increase, cf. net production and as a factor in computation of ELM? I am looking, in particular, for confirmation or dismissal of possible feedback loops from data at hand, and if comfirmed the rate of increase, overall impact and predictive values. Thanks.
Craig
Is that the new "Cowboy fuel gauge"? Maybe my Dad can read this kind of graphic better than he understands me presently.
I've always wondered about the lack of gas production in KSA. Perhaps this comparison isn't apt, but in 1980 they produced only 1.7% of what the US did; in 2010 it was up to 13.7%. US gas production had only increased 10% over that time, KSA was up 880%. Seems like the hydrocarbons are there but they're just not trying hard enough; or all the subsidies for oil are nullifying efforts to move to gas; or I'm off base and it's just that much more an oil-prone province than gas. But wasn't most of the big dry gas finds in the US located at least not far from where the oil basins were as well? And KSA has no qualms about where pipelines will run, of course.
Naturally they've tried to dig up more gas, even to the extent of inviting all those outside companies to poke around in the empty quarter. And having all your associated gas shut down when reducing quotas for oil doesn't help, either. Maybe the move to gas comes naturally when a nation becomes a net importer.
Saudi Arabia used to flare almost all the natural gas produced by their oil wells, which means it didn't count as production. Some of their wells had as many as 20 flare stacks to get rid of the gas associated with the oil they were producing. They were the brightest objects on Earth as seen by orbiting astronauts.
Now that they are short of gas, they are probably wishing they hadn't done that.
Everybody is wasteful with gas at first, though; was the Saudi experience more extreme than that of other nations?
I have a spreadsheet of GHGs by source on another computer, including NG flaring; think I got that from the EPA website. Forget if the global situation is improving or not. This source shows Alberta already at 90.2% of gas conserved in 1993: Alberta - a leader in reducing natural gas flaring & venting |. Up to 95.7% three years ago. Where were they at 40 years ago, say? Haven't the time at the moment to research this further.
Interestingly enough this week's TWIP focuses on KSA and lack of summer months export capacity: This Week In Petroleum. Since they're no longer paying IHS for data this analysis is full of references to JODI. They are practically as in the dark on many aspects of this matter as we are.
Alberta has been pursuing a policy of discouraging flaring and encouraging companies to put their associated gas into the natural gas system for a long time.
This was actually the source of some really nasty court battles and federal-provincial government fights during the 1930's and 40's. Originally, the oil and gas resources were under control of the federal government, which allowed companies to flare gas indiscriminately. The Turner Valley oil field was the largest in Canada and people could see the flares (and smell the sour gas) from Calgary. The amount of gas flared at Turner Valley would be worth at least $10 billion at current prices, and this fact didn't escape the attention of the people watching the flames from 100 miles away. There were a lot of people upset at the amount of valuable energy going up in flames.
Things got particularly intense nasty during the Depression, after the federal govt transferred the resources to the provincial govt (not realizing how much they were worth), and the provincial government started passing conservation legislation. The oil companies got the rules disallowed by the federal government and courts, whereupon the provincial government embarked on a "We can pass legislation faster than you can overrule it" assault (they did a lot of this during the Depression), passed law after law, and eventually got some rules that stuck. This is the origin of the Alberta Energy Resources Conservation Board, and some of the particularly snarky nature of Alberta's attitude to the federal government.
Probably the only limitless resource there ever was in Canada. (LOL couldn't resist, sorry)
Perhaps attitude by and towards "Toronto the Good" could rival that !
Best Hopes for Stirring Up Regional Friction from a safe distance,
Alan
Yeah, I kinda miss WHT as well. In five years I never knew him to pass up an opportunity like this to sneer at someones "heuristics". Didn't he mention the other day that he had finally found someone smarter than him to argue with about math on another blog somewhere?
Cheers,
Jerry
Just to play devil's advocate, but what is stopping the KSA government from cutting back on domestic consumption? Could they offset the benefit the public gains from internal consumption with more dollar hand outs or other welfare programmes funded by increased exports? Would the public be prepared to sacrifice their consumption in this way?
I'm guessing that the Sheiks would be concerned for their personal safety. I don't have the exact numbers, but I think that refined petroleum products in Saudi Arabia sell for a small fraction of their cost in most other countries. Also, given generally rising oil prices, I believe that Saudi Arabia has, so far at least, seen generally rising nominal cash flows from export sales, even as net export volumes have declined.
In any case, given an ongoing decline in production, unless an exporting country cuts their consumption at the same rate as, or at a rate faster than, the rate of decline in production, the resulting net export decline rate will exceed the production decline rate and the net export decline rate will accelerate with time. I'm afraid that Net Export Math is relentless. The ELM and some case histories:
The "low hanging fruit" is reducing oil burned to generate electricity - largely in the summer when natural gas supplies run short of increased demand. Current plans call for an additional +1 million b/day of oil burned by 2020 !
The WSJ article mentioned nuclear power. In addition, a HV DC line is being made with Egypt, where they burn their NG there and ship the power to KSA.
Three obvious solutions - Conservation (say building standards + a/c efficiency standards), import NG (or electricity) from Qatar and solar PV and solar thermal (KSA is a GREAT place for solar water heating).
Smelting aluminum with partially oil based electricity is economic lunacy, but it creates jobs.
OTOH, in ten months significant solar PV could be installed in the Persian Gulf. IMHO, at least a couple of GW.
Best Hopes for Less Oil Fired electricity,
Alan
PS: UAE is ~40% oil fired electricity, for a population that is ~80% non-native. Construction of four Korean nukes will limit that.
Solar, nuclear and other alternatives to burning oil will probably come too little, too late in my opinion. I've got a compilation of related links at the bottom of this post:
What is "our" oil doing in their economy? -- Saudi oil consumption trends
Incidentally, I'm doing "Cowboy Integration" to get post-2010 CNE for Saudi Arabia. They net exported 2.6 Gb in 2010 (BP). Net export declines tend to show a triangular "Shark Fin" pattern, so to get the area under a triangle, i.e., a rough approximation for post-2010 CNE, we multiply 2.6 Gb/year X years of net exports X 0.5.
For a rate of increase of 8.8%/year in the Saudi C/P ratio, we get post-2010 CNE of about 20 Gb.
For a rate of increase of 6%/year, we get 28 Gb.
For a rate of increase of 4%/year, we get 41 Gb.
For a rate of increase of 2%/year, we get 82 Gb.
Note that the observed rate of increase in the C/P ratio for the (2005) top five (Saudi Arabia, Russia, Norway, Iran and UAE) from 2005 to 2010 was 5%/year (BP). This same C/P analysis suggests post-2010 CNE for the top five of about 92 Gb, using the 5%/year number.
For Global Net Exports (top 33 net oil exporters in 2005), the 2005 to 2010 rate of increase in the C/P ratio was 2.9%, which suggests post-2010 CNE on the order of 310 Gb, with 15.5 Gb having been net exported in 2010.
A law of psychology:
When people have no hope, they will care not for the consequences of their actions.
If the rules of KSA would start to cut back domestic consumption, people would get even poorer, moving them towards the point where they have nothing to lose. It spells "unrest in the Middle East". It is, s demonstrated this spring, to risky.
But on the other hand; if KSA stop exporting totally,they will have no other income than some tourism (haji) and so they will have to export some.
Iran increased the public subsidy for the poor a full month before reducing subsidies. So one full month of increased welfare and a second just arrived when oil and food prices increase.
Given the short time horizon of the poor, a "good deal".
Best Hopes for Market Price Oil,
Alan
Saudi Crude Exports 1990-2010 (kbpd)
Note that Saudi Crude Exports as tracked in IEA/OECD import data shows that none of the post 2003 "surge" shows up in OECD countries as extra imports. Saudi crude imports across the OECD as a whole peaked in 2003.
Saudi exports tracked into IEA/OECD countries
For 2010 the IEA reports
If/when we start sliding down the back side of the curve, all these "inconsistencies" will be irrelevant, don't you think?
Libya crisis could see Brent hit $175/b in 2012: BofA Merrill Lynch
Seems like it is going to take a lot longer than most folks realize for Libyan oil production to return to normal. And of course all this is contingent on the war ending soon, which is a long shot at best.
That being said, I don't agree with Merrill Lynch. I think the deepening recession will never let oil prices rise that high.
Ron P.
Bingo.
One of the best hedge fund managers of the world, Ray Dalio(who manages over $90 billion dollars), said that we're looking at a crisis between 2012/2013.
Here's an interesting profile of him, btw.
I personally think that we would be lucky if we got that far.
The Eurozone debt crisis is slowly metamorphing into something far bigger, engulfing Spain and Italy. I think it's inevitable that we will see a bigger bailout fund in Europe, possibly doubled or more. Nevertheless, the flawed fundamentals stay the same.
One of the more interesting things which I think is overlooked, however, is the average crude price. The 2011 average oil price beats the 2008 average oil price, something never mentioned or written in the media. Although a 2008-type oil shock can cause damage, I think long-term prices over $100 is more damaging to the economy over the long term because they destroy the soundness of the fundamentals in a more deeper way if it persists.
They slowly erode down any protection that there is, prompting endless more stimulus packages and bailouts as the debts just rise and rise and rise and then you need to do extreme austerity á la Ireland, Greece or Latvia.
They had deep structural issues before the crisis so they got hit first, but they won't be last as peak oil insists and deepens.
Large economies like the U.S. or the U.K. will just print money instead, opting out of the tough choices, but the price for that is a deeply debased currency and falling real wages, which will prolong the crisis as people can't deleverage enough.
Peak Oil is not a single event in my mind, but an ongoing, intensifying, process that keeps eating away at the world economy slowly but surely. I think the lack of spectacular fireworks could be one reason why some more apocalyptic doomers tune out at the lack of a total, very immediate, meltdown.
Undulating plateaus are boring. But those of us willing to pay attention, they are more survivable.
I disagree. When prices whipsaw high and low, no one's really sure what to do. Oil companies don't know which wells to develop. Individuals don't know whether to conserve or wait it out. Persistent high prices are a problem, but their stability sends messages that allow better planning. Oil companies have a better grasp on what to look for. Individuals buy smaller cars, move closer, set up car pools, etc. Nations stop burning oil for electricity. And so on.
And poor people in poor countries quit eating, as the constantly high prices trickle through to food prices. That shouldn't be a problem, unless they decide not to die quietly.
Very quietly :-(
http://nazret.com/blog/index.php/2011/07/16/a-grotesque-symbol-of-starvi...
Alan
The women are binding their bellies with rope, so as to stop hunger pains, and giving their food to the children. 11,000,000 are at risk of starving.
The comments are interesting:
"If you watch ETV these days, you will not find anything suggesting that millions of Ethiopians are starving. Instead, you will see the faces of fat EPRDF thugs having endless meetings. You will see TPLF cronies talking much about the imaginary double digit economic growth. They have no shame at all. OMG!!!!!!! "
The income depends on tourism and the rain.
http://en.wikipedia.org/wiki/Kenya
Exactly, and such articles as this one linked up top will become so common they will hardly be noticed anymore. East African drought a sign of things to come
There are several articles on the web today about the Somalia famine. I saw one story on CNN about it today but nothing much elsewhere.
Somalis dying in world's worst famine in 20 years
Of course there are always multiple reasons for famine. There is climate change, conflict, declining resources and so on. All the horn of Africa are suffering, not just Somalia.
Africa famine: world's richest countries guilty of 'wilful neglect'
Could it be that misery in Africa has become so commonplace that people just don't pay much attention anymore.
Ron P.
"Could it be that misery in Africa has become so commonplace that people just don't pay much attention anymore."
I think this may be true. There have been so many crises/tragedies lately that the West may be becoming complacent. It seems like there is always a drought somewhere, and I have not seen the media aggressively making the case that this one is qualitatively different.
I was 7 years old during the Ethiopian famine of 1984 and it made a huge impression on me. Perhaps it was just that I was a child, and went to a Quaker school, but it really seemed like many people here in the USA were taking it seriously and were treating it like a real emergency. Now it seems like it is barely mentioned.
To take this seriously, it would have to be admitted this is a continuing trend not likely to be mitigated by a short term change in the weather or other conditions. And we currently have a massive "heat wave" in the United States. "Wave" implies it is just a cycle, not really characterized by record heat. Even when record heat is admitted, I hear no mention of possible global warming as even a partial cause by any of the weather people on TV. To admit any of this in the media or by any one within the political establishment would require an admission that nothing can or will be done about any of these problems. We have written off Africa for starters but I believe that attempts at mitigation, while perhaps righteous, are futile in the long term. Dieoff has begun and will just continue to get worse year after year until it finally reaches a neighborhood near us.
The use of the term "famine" implies a temporary phenomenon implying that we can just provide aid to get them through the hard times then things will be better when things return to normal. Normal is not going to return.
The trouble is we all live locally. Here in central MO, this has been quite a hot spell, but I remember 1988 and 1980 and I'd laugh at anyone claiming this to be a record. My understanding is that the average temps are higher because of less cooling off at night. We haven't even broken 100 yet this year and the highs locally are always a few degrees below what is forecast.
less cooling off at night
H'mmm
The predicted impact of GREENHOUSE gases.
{sigh}
Alan
www.weather.com has a link to "Average & Record Temperatures" at the bottom of the 10-day forecast for any city. It gives the record temperature and the year it was set for each day of the month.
Kansas City, MO has topped 100 every day this week according to my car temp gauge. Combined with the humidty, it feels 105-110.
hillco: How wet is it where you live? Very high temps pretty much require dry land and air, otherwise most absorbed solar energy goes into evapoation. Out in West Texas, Oklahoma and much of Kansas is has been very hot; most days 105 or more. In the areas with standing water or saturated soils, I would expect most solar heating goes into evaporation, raising dewpoints and humidity more than temperatures. Some pretty high numbers have been claimed for the heat-index in Iowa (like 129, and 131). I bet that was mainly the result of a lot of local evaporation...
Maybe that is it. I remember the temperature being hotter, but that summer didn't start out near as wet as this one. We had a ton of rain in May and June, but I'm running the sprinkler on the garden the last three weeks. Due points are running around 75.
This evening Brian Williams had a weather reporter sitting with him describing the extreme heat all over the US. At one point he asked her if the heat could be part of "a longer trend". The reporter brushed the question off as "too hard to tell".
We can't see no global warmin' from heah.
"a longer trend"... What an incredibly coy question!
Some people won't believe it 'til their butts spontaneously combust.
Now, I wish I could arrange that!
They may be right. Unfortunately we won't know until it is in the rear view mirror, now what does that remind me of? It could be a trend or it could be an anomaly but it will take time to tell. A single event is not a trend, it will take a number of events to make a trend. I think the answer was fair but maybe the question lacking.
NAOM
Interesting. When you look at a map showing how much today's highs are expected to be above normal, perhaps a third of the country is unusually hot. By area, that is; probably 60% or more of the population is affected.
Just turn off your TV, radio, and don't read the papers. There. No famine. Sometimes I envy the illiterate and ignorant.
Exactly!
If God had meant for men to read,
He would would have given Moses a Tablet Computer in each hand:
[ i.mage.+]
Go yea and congregate with your brethren in the church of your denomination.
Let your spiritual leaders guide you to the true truth.
Only they know how to correctly interpret the holy scriptures.
Do not use your brain unattended. It is the Devil's playground.
_____________________
oh yes: /end sarcasm --lest yea believe the above is meant to be taken literally
+1
You and I are nearly the same age. I STILL think of children with bath-ball sized tummys and flies in their eyes whenever I hear "Ethiopia" mentioned. So when this famine hits an even larger area, when the pop density has doubled in that area, and when the drought itself is most likely going to be worse, and NO ONE CARES, then I wonder how bad our world has become, if this is not enough pain to be felt any longer.
Could it be that misery in Africa has become so commonplace that people just don't pay much attention anymore.
And they are 'over there' - How many times has a worldwide issue been dismissed by the American posters here on TOD as not important because it doesn't effect 'em?
In fact at the start of this month one poster was claiming there is no water problem as he could get drinking water cheap - thus from his local POV all is OK.
I've locked horns with you before, but I think you really hit the crux of the issue on this one.
Many posters on TOD believe that we are already in, or will shortly experience "overshoot" followed by "dieoff". If this is in fact true, stories like this one would become extremely commonplace. As catastropic events happen more and more often, people will quickly stop paying attention.
"Oh, those poor people! Get them off our lawn."
There were 200 people living in the riverbed in Atascadero. They were "moved-on", up the river, out of town. Now, town, mind you, is just a collection of franchise and big-box buildings indistinguishable from any other off-ramp. There are whole families living in vans. They could park overnight at the Walmart, but that was stopped, too, at the same time.
Hard times generation
http://www.youtube.com/watch?v=dK_RnxYdrqU
I'm not making a comparison to other countries. I am observing that, currently, the suffering is noted, but the response is to call the police.
This is an age old response. Segregate the population into classes, the property owning get to keep their property and the none property owning get to work cheap if work is available otherwise they get to starve quietly and if they are not quiet they are put in work camps or shot.
Couldn't agree more. My comment: so what exactly are we doing about it? Me? You? Any of us?
We sit back, complacent and smug in our superior knowledge about the **** that is about to Hit The Fan, and mostly try to get our families lined up in such a way as to be able to survive. Meanwhile, if we are hoarding, and preparing, even those efforts add to the problem in the present.
Are we making any serious attempts to educate anyone (other than friends and family - in itself a not particularly rewarding endeavor)? Have we come up with some brilliant plan to remedy or change anything?
Are we any better than 'Joe Sixpack,' who sits on his couch and sips on a Bud while watching 'reality' TV?
Drink up, friends.
"break out the booze and have a ball — if that's all there is",
(Peggy Lee)
Craig
Here are a couple of suggestions of things "you can do about it" that don't involve hoarding:
Believe it or not, this is the "brilliant plan" that allows many people to lead healthy, productive, meaningful lives today and this plan will only become more important in the future.
Best Hopes for Simplicity.
Jon
Okay on some... physically cannot ride that bike any more (or, sadly, dance with my partner).
All the rest, except #1, are done or in progress. TV is a problem - we use NG and BBC dvds to educate our grandkids.
Wish things were relly simple; solutions seldom are. It always takes a bit of resolve.
Craig
In the states, taking a shower is a problem. If you made a portable shower truck and showed-up at the Walmarts, It would be used. But, can you imagine the liability? And how do you get the crazy out of the shower. This illustrates two problems here. There is a large roaming crazy population due to changes made decades ago. Displaced families are thrown in among them. This is also a litigious society. Beyond that, it takes money to fuel, clean, drive, and maintain the trucks. The rebirth of the public bath?
A place to park is a huge problem. The newly impoverished live in vehicles, if they are lucky enough. Just a place to park, with laundry and other facilities, would be a great thing. The "CarTel", if you like dark humor. This has all the same problems plus laws and zoning.
In China, back in the day, if a village was starving, the government would send troupes... to guard the villagers away from the roads, where they were an embarrassment, and keep them contained within the village.
____________________________
Peggy Lee
http://www.youtube.com/watch?v=5BjhJLhSbYg
Yeah-- and our cultural definition of "normal" is getting narrower and narrower while our definition of "crazy" is getting broader and broader.
I have clients now who could have been working in 1978-- maybe part time-- in record stores, as house painters, as movie theater ticket takers, in other small businesses, maybe even in higher-level jobs. They would have seemed just eccentric then.
Now, I can't get them placed in shelters or even in group because everyone thinks they are too weird. They are afraid of the world, and the world is afraid of them.
Technically, everybody's crazy now! But, there's a pill for that.
-Also-
Employers only want to offer jobs to those who hold one already. They do not want to hire the unemployed.
Unemployed? These Companies Won’t Hire You
http://www.mainstreet.com/article/career/employment/unemployed-these-com...
New Orleans has a very tolerant attitude towards differences. As an example, we are the most Tourette Syndrome friendly city.
Best Hopes for Different People,
Alan
what exactly are we doing about it?
Today I was on a conference call for a hour with two VPs and a subordinate of a major utility - talking about the economics and possible business case for the utility (+ others) electrifying railroads and selling "power at the wire" to the RRs. And using the RR RoW as a transmission corridor.
This was a first contact - a time to plants seeds of ideas.
Also worked on an article directed to the military on the strategic value of electrified rail for the Home Front.
That was today - several other projects out there as well.
Best Hopes for Doing Something,
Alan
I've tried talking to people...good luck with that.
"There are none so blind as those who will not see. The most deluded people are those who choose to ignore what they already know." (John Heywood 1546)
Buy a jug of something; use it up and it's gone. We all know this. Small jug, big jug, jug as big as the world. Despite this fact that no one would disagree with, some people still believe in magic jugs that never get empty. World size ones.
It's a great song, should be the World Anthem.
Jersey Patriot, your reasoning is right in principle but I disagree with the ease that your argument makes of the timescale. There won't be enough time to adapt the economy. Europe had several decades of tough regulation to get where it is today, via higher fuel taxes and car standards that prompted the changes you write about.
Persistently high prices will indeed force the changes you write about but it won't be in a proactive way, like Europe did, when oil and energy was still cheap. That offset the cost. A country like America, which has poor public transportation means, doesn't have that luxury. Both when it comes to time, as well as the cheapness of oil that was the case in the 90s and the first half of the 21th century.
Ron, I tend to agree, at least with the principle involved. I am not so certain, though, that realitiy might not stick its ugly head in and keep prices going.
More and more I see the play out between ELM and the Peak as forcing producers to drill more and more wells, in less and less accessable places, costing more and more in energy and forcing EROI ever lower. As this plays out, even with global recession or (dare we speak it?) depression, those oil costs will be driven upwards and onwards, in order to produce the bare minimum necessary for minimally function of a depressed economy. Until, as I have positted, EROEI = 1. Then it all stops.
Craig
Craig, I cannot see that scenario playing out at all. Oil can go higher and higher only if we recover from the recession. If the recession gets deeper, or if it turns into a depression, this will drive prices down because people will just not have any money to buy products.
In a serious worldwide depression I can see demand falling to 50 million barrels a day, or somewhere close. Perhaps even lower. The world still has the capacity to produce that much oil quite cheaply. The marginal barrel, at current production, is somewhere around $70 a barrel to produce. But if demand were only 50 million barrels per day, that marginal 50 millionth barrel would only cost $10 to $20 to produce. That is because that much oil could likely still be produced from older onshore or shallow water fields. In my estimation anyway.
Ron P.
I don't think either of you is wrong. Timing is the variable missing here.
If we consider the marginal wells, some production will continue, no doubt. Will that be sufficient? There is a number, what I do not know, that represents a baseline of urgent need. When high priced oil is being used for that need, all bets are off.
Again, the closer EROEI gets to 1, the more energy is used in producing a unit of oil. At 1, there is no use in drilling - it is impossible. Except, that is, for products that are urgent, using non-oil energy sources for extraction. Here I am thinking of PG, PC and PO as being depleted resources, and using hydro/solar/wind/tidal/geothermal mix for extraction, and the products being used for medical and non-replaceable urgent things. Plastics, fertilizers, pharmaceuticals, and lubricants for example.
The problem will be that 50mb/d may be a stretch... and may not suffice. Especially if some significant part of that is directed to 'other' products, valuable only to a wealthy few, and being unessential to society.
And, while the 'finis' scenario may be extreme in the near to mid term, isn't reduction to 50mbd somewhat dire in itself?
Craig
Ron,
Without additional investment, our current 84 million b/day will turn into 50 million b/day quickly enough.
A -40% decline. Assuming a simplistic -8%/year (Saudi w/o additional drilling), 5 or 6 years. Quick shut-in of high cost production.
And a half decade with the drilling and support industries "dying on the vine" means that revving back up will be difficult.
Hopes for a Better Future,
Alan
If Brent hit $175, would WTI still be stuck at $100! "So spreadable, its incredible"!
Hi Ron. You mean in nominal terms? With the new improved 'Super Jobs Mega Life Is Great This Time It Will Work For Sure' stimulas program (aka QE3) just around the corner, might not at least spikes to this level be a real possibility? (and possibly knock-on psychological effects, including increased awareness about this whole peak oil 'theory')
My prediction is that late 2012 will be the year that I will attend a BBQ and not be the only person there who has heard of PO, and that a conversation will be possible, rather than the dull cow eye looks and a change of topic back to some 'completely unrelated' topic like how various economies are struggling 'at the moment'.
You mean nominal dollars? No, I never mean nominal dollars, I always mean dollars of the day I write unless I specifically say the year. Oil will not reach $175 a barrel in 2011 dollars. If we have runaway inflation then oil could easily reach $500 a barrel really be $50 in today's dollars.
Ron P.
Sorry. Yes. I meant nominal dollars.
There must be some serious automatic sell positions at $99, because it looks like a glass ceiling.
Well that is just WTI. The average price this past week in the US was a bit higher.
Crude Oil Estimated Contract Prices
Still, at $105.49 a barrel we still have the cheapest oil in the world. We have those Wall Street speculators to thank for keeping prices so low. ;-)
Ron P.
Reading the world In a loaf of bread
The new normal?
Postmaster says days are numbered for Saturday mail delivery
College budget cutbacks go outside the box
Part of the GWB/Cheney/Republican strategy to strangle recovery of New Orleans was to limit postal deliveries. I remember postal workers picketing the Main Post Office (after working double shifts) demanding more sorting machines, postal vehicles and authority to hire workers.
May I suggest 6 day delivery on walking routes (<1% of routes), 5 day delivery where miles driven/day are, say, 4 miles or less (see primitive EV), 3 days where miles driven are 25 miles or less (more sophisticated EV) and once/week for more than 25 miles per route (gas/diesel postal delivery).
One more incentive to move out of Exurbia.
Best Hopes :-)
Alan
Your suggestion would not sit well with Sen. Tester. Those rural states have a lot of Senatorial clout. Here is a crazy idea. Why not make people and bulk mailers pay for the mileage to and from the post-office? I know that would whack out the system where a stamp takes you anywhere in the country, but we have computers and stuff to figure this out now.
Bulk mail seems like stone-age advertising too.
Rural Free Delivery is an idea whose time has come, and gone.
from wikipedia
Before Rural Free Delivery, rural citizens of the US had to go to the post office in the cities to get their mail; some still do ... Rural Free Delivery was introduced nationwide in 1897
Low hanging fruit is reducing oil consumption. RFD once/week unless customer stops by earlier at post office to pick up their mail seems reasonable.
Alan
Yes, "Rural Free Delivery" is a huge perk to people that often have a dismal view of their government. Sometimes I wonder how folks say one thing and do the other without wondering for a minute that they are beneficiaries of the FEDERAL government. Also some say that Fed-EX or UPS is superior. Funny thing there. They do not do rural delivery in extreme cases. Instead FedEx has the US Postal Service deliver their goods on the public's dime. So much for the "free market" or the so-called efficiency of the private companies, which we herald in our country as superior. ;-)
Wonder how the politicians discuss this with their constituents that demand that we cut the budget?
Oct
Ixnay on the ulkbay ailmay.
(Sign-up for every mailing list in the world and burn the stuff. Alternative energy is as close as your mailbox!)
Our household has a junk mail problem that has brought me to the brink of existential despair. We get junk mail for all our dead relatives, sure-- that happens to a lot of people, but we get junk mail for relatives who we've never heard of, offspring of people who were contemplated, but never actually born.
A few years ago, our poodle was invited to join some panel of economic and foreign policy experts... I know that was because the New Yorker subscription was in his name, and I know it was a scam, but it came with a commemorative certificate and tickets and everything, pretty convincing, and very scary.
We get junk mail for companies that help you learn how to deal with junk mail, companies that tell you how to get rid of annoying junk mail from companies that try to help you get rid of junk mail, and companies with enticing offers for how to reap enormous rewards from your junk mail while bringing down terrible suffering on your enemies.
Would I like to get off these mailing lists? You bet, but I've researched it thoroughly, and the time and money required to put an end to this staggering waste of natural resources and human energy exceeds the gross national product of many small countries. A metaphor for so many modern problems...
Woodstove.
Wonderful thing, woodstove.
The smallest fire you can make is two sticks burning. I once insulated a little room too much: the heat of two sticks burning would drive you out. Cracking a window would let in the howling, wind-blown rain. No fire would let the wet air dampen everything. Had to take a third of the insulation down. Quite a surprise.
Made an igloo once.
Quite a surprise, too.
Why didn't you just leave the fire off? Sounds like a cozy sleeping bag to me.
I get probably half a dozen credit card offers every week. I take out the postage paid envelope, seal it up, and put it in the email empty. So the usury machine has to pay the postal service the money for it to be mailed and they they get their junk mail back. Win - Win.
Another idea is to put some lead weights or steel washers in the postage paid return envelope before putting it back in the mail. I don't know if this makes a difference, but it's worth a try.
I put anything with my name or any other personal information on it into the paper shredder. It also shreds plastic credit cards, which is also useful.
Never let people have more information about you than they need to have, which in most cases is none at all. If they are persistent, use your dog's name and elected representative's address and telephone number.
A Mate of mine in Denmark many years ago used to dump all the jumk mail along with all his neighbours in a tub full of water plus any other paper he could get his hands on. When the tub was full of the gooey mess he would ladle it out into a home made press and store the compressed blocks under the eves of his house. Helped keep his wood burning stove running during the winter.
In winter, we just throw most junk mail in the stove. In summer, shredded junkmail and paper makes great mulch for flowers, under the regular mulch. The worms love it. My wife's work uses green paper and printer ink. She brings home a large bag of shredded paper every week. Composts nicely. I suppose it could be recycled other ways, but it's a free input to my system.
Ghung, I fear junk mail probably contains a lot of heavy metal. certainly you don't want to be burning or composting the glossy heavily colored brochures. Its too bad, it started out as celulose, but a lot of stuff has been added to it, some of which may not be healthy.
In regards to mail delivery, is daily mail delivery necessary in this day and age?
I think even just a MWF delivery schedule would work for most people, and anything urgent would be private companies (FedEx, UPS, courier) anyway?
Pedal power enthusiasts may enjoy this, the ""Whike"", from the Netherlands:
... a wind assisted trike. I saw this recently on PBS, Globe Trekker - The Netherlands featuring Brianna Barnes. She scooted around nicely on this thing, and I figure if she can do it anyone can.
Appologies if this has been posted previously.
I like the idea and it looks like a well made machine but I'd be a bit nervous to use it other than on a long, open road.
In traffic, a sudden stiff breeze could put you under a truck. But then, I'm a wimp about clipless pedals.....
The sail can be removed and stowed during no-sail circumstances for pedal only cruising.
I think it needs a jet engine or something else to give it more pop. ;-)
Here ya go.
Pulse Jet bike....
http://maddoxjets.com/maddoxjets_Videos.html
That's a lot of fun!
Here is an engine that runs on HDPE:
The same plastic as in milk-jugs and
rattly supermarket bags.
Recycle!
http://bduncan1.weebly.com/hybrid-rocket-engine.html
http://www.youtube.com/watch?v=YF0rZkKlN1E
I figure if she can do it anyone can.
In a normal bike the human has to control the direction of the bike and the energy input.
On this fun-sized-death-on-wheels one has direction AND energy input that is variable and that ever-changing force vector has to be managed.
Not everyone will be able to handle that.
Besides how would you talk on your cell phone while bike riding in such a thing?
Extreme wind-biking and a trip to the emergency room is likely.
This is old hat the Dutch used to have sailing carts in the 17th century for transporting troops along the sands, reputed to go as fast as a galloping horse.
Summary of Weekly Petroleum Data for the Week Ending July 15, 2011
Usual (since start of year) upwards "adjustments" to total petroleum stocks this week totalling 2.5 million barrels (of which crude 1.3 million).
Crude stocks at Cushing fell 0.9 to 36.7 million barrels last week and are curiously now below last year at this time. Stocks have fallen by 5.2 million barrels in the last 14 weeks - that's an average fall of 370,000 barrels per week over the last three months since the record high at the start of April.
Just for laughs (we're talk'n Fox News after all)....
Flashback: When News Corp. Poisoned Fox News Employees For Christmas
See: http://mediamatters.org/blog/201107190011
On a somewhat related note, on May 31st of this year we replaced the PL-L36 and 60-watt halogen-IR PAR38s in a retail store (one of the client's smaller outlets) with Philips' 17-watt EnduraLED PAR38s and I just received a copy of their most recent NSP statement. As the summary table below shows, their energy usage during this billing period fell from an average of 469 kWh per day to 257, a 45 per cent reduction.
ENSC paid eighty per cent of the cost of this lighting retrofit and the remaining 20 per cent will be repaid by the client on their NSP account over twenty-four months, interest free; in effect, for every dollar they'll pay back over these twenty-four months, they'll receive almost five dollars in energy savings, plus the lamps which have a rated service life of 45,000 hours are covered by a full four-year bumper to bumper warranty (materials and labour), so they won't have to buy another PAR38 lamp for at least four-years which, in itself, is a substantial cost savings (they'll save approximately $120.00 per socket in lamp replacement costs over the life of these LED lamps). Lastly, whereas their old halogen lamps cast everything in a dirty pale yellow light, these new Philips EnduraLEDs provide a nice clean, crisp, jewel-like white light and make colours pop, which hopefully translates into increased sales. What's not to love?
Addendum:
Some "before" snaps:
http://i362.photobucket.com/albums/oo69/HereinHalifax/BeforeA.jpg
http://i362.photobucket.com/albums/oo69/HereinHalifax/BeforeB.jpg
http://i362.photobucket.com/albums/oo69/HereinHalifax/BeforeC.jpg
And some "afters":
http://i362.photobucket.com/albums/oo69/HereinHalifax/AfterA.jpg
http://i362.photobucket.com/albums/oo69/HereinHalifax/AfterB.jpg
http://i362.photobucket.com/albums/oo69/HereinHalifax/AfterE.jpg
Cheers,
Paul
"Whats not to love?" Oh you underestimate the people that are against efficient bulbs. They have think tanks dedicated to not loving them. Reminds me of Mr. Burns plotting to corner the energy market. LOL.
I think it is that people are against change, any change, to their comfort zone of BAU.
When I read the past story of people complaining about how a PV panel on a neighborhood wood power pole was unsightly, the pole already covered in wires, the irony made me chuckle. NIMBY!
Anchoring is a powerful phenomena....
Rgds
WeekendPeak
An argument over the prettiness of a solar panel on a telephone pole--the ultimate symbol of stupidity.
'Not on my ugly, blighted utility pole'
I managed to visit my favourite electrical wholesaler yesterday. It is over the bridge, in the next state but I was on business across the road. They are building a new display room for lighting and have a row of cabinets with the Philips LED lamps plus their T5s and HIDs. It is so new they don't have all the prices yet but I nearly fell over when I found out the little MR16 spots were around 120 pesos, way cheaper than anyone in town, the standard light bulb replacement only 60 pesos. They had the candle lamps but no prices yet. I guess I will be summoning up my courage to cycle across that bridge, they will be getting some more business.
NAOM
Twisty light bulbs are smelly, eew!
Chunnel buys more Freight Locomotives
http://www.europeanrailwayreview.com/rail-industry-news/eurotunnel-buys-...
5 added to fleet of 11.
It is unclear how much of this reflects increased freight shipments by rail and how much opportunity to buy used specialty locos in anticipation.
SCNF (French rail) has a goal to double rail freight. Not switching modes at the Chunnel is an economic advantage for shipping by rail. Not to mention higher diesel prices for trucks.
Best Hopes for more Electrified Freight Rail,
Alan
£20m tool to be used to dismantle nuclear site
I wonder how much the tool to dispose of the 16-piece reactor dismantler will cost...
And the tool to get rid of the disposal tool :)
NAOM
Bizarre Christchurch Aftershocks. Note the following article was originally titled "SIS on trail of suspected Israeli spies" but has now been retitled "Investigation cleared Israelis of spy claims: PM"
Investigation cleared Israelis of spy claims: PM
Wondering why the Indian government is refusing to pay for oil and fertilizer -- I don't think they are going to cut budget deficits this way.
Fertiliser dept alerts MEA on potash cartel
This is what happens when a novice player tries to play hardball with the big boys:
US shale gas weakening Russian, Iranian petro-power, study finds
So sayeth the economists
S - "Rising U.S. natural gas production from shale formations has already played a critical role in weakening Russia’s ability to wield an "energy weapon" over its European customers,". I'm totally lost on this one. AFAIK we've shipped one tanker of LNG from the US to England. And this has already "weakened" Russia's influence. I'm speechless...a very rare state for me. LOL.
Yes, the Baker Institute economist can come up with some stunningly jaw dropping statements. Probably didn't factor in Merkel's switch from nuclear to NG.
Yes . . . the Baker institute and Amy Myer's Jaffe. Famous for this great paper of February 2000:
http://www.foreignaffairs.com/articles/55627/amy-myers-jaffe-and-robert-...
Great call, Amy & Robert! When people say things that wrong, they should be ignored from then on.
To Ms. Jaffe's credit, she went back four years later and wrote "Not So Cheap". Still not a great article, it blames high oil prices on terrorists, and the "civil war" in Chavez's Venezuala. We would have had endless cheap oil, if it weren't for those darned above ground factors. "Post war Iraq" gets a very brief mention.
I guess it's "civil war" when it opposes the interests of the US, and "counter-terrorism" when it favors those interests.
Rockman - The document is mainly an argument for developing the Marcellus shale.
If the Marcellus Shale is developed, then the US gas production rises from about 22 tcf to 28 tcf by 2040 and the US is largely self sufficient in gas, at least in the next decade or two. (Note that oil is ignored.)
Therefore, the US does not need to import LNG and LNG supplies can be used by other importing nations.
Europe benefits from these redirected supplies as well as the development of shale gas in Poland, Germany, Austria, and smaller amounts in other countries.
Taken together (US shale gas, European shale gas, LNG from friendly countries) the market for gas from Russia, Iran, and Venezuela (are they the new axis of evil?) can be minimized in line with US geopolitical objectives.
On the other hand, if the Marcellus Shale and the Polish shales are not developed then the US must import LNG, Europe is not as well supplied, and this whole lovely picture of global domination via energy policies falls to pieces.
However, the analysis seems highly US and Eurocentric. Japan is hardly mentioned, and LNG will be a factor there given the state of their nuclear industry. Russia is sending more Siberian gas to China. And as someone else noted, Germany will need more gas to offset their sunsetting of nuclear energy.
Merrill - But thst wasn't what he said: "has already played a critical role in weakening Russia’s ability". "HAS ALREADY". Total BS. Now if he had said ME LNG has weakened Russia's position that would have been another matter. Since I have no sense of the volumes involved I don't know if that is valid or not.
As far as future impacts of global SG development he's certain free to speculate to his heart's content. IMHO his predictions would be just as valid as yours or mine. And our collective opinions aren't worth cr*p...again IMHO. LOL.
I get a tad frustrated with folks thinking the SG plays are the new sliced bread. I drilled my first fractured shale well over 30 years ago. Along with thousands more drilled by other operaters. And just like the SG boom several years ago those much earlier efforts were driven by NG prices. Other factors are giving it a boost these days. The drilling/completing technology has improved a good bit...but at a very significant expense. But the biggest factor IMHO is the near hysteria of the public companies to add reserves in order to boost share price. Consider the recent sale of Petrohawk to BHP for $12(?) billion. I wouldn't have an idea what PH was worth but folks I know heavily involved in the Eagle Ford claim the price was several times what they felt they were worth.
The point being that were it not for the Wall Street driven public companies there would be little SG developed until NG prices have risen significantly IMHO. Again, name the privately owned oils (and there are plenty of us who drill only for profit and not stock hype)that are drilling in these plays. And then we are back to the feedback loop of price driven demand destruction. And that's my main critcism of future expectations being offered without that consideration. And lets not forget how I make a living: I need as many profitable drilling projects as I can get my hands. And I'll probably not be able to spend $50 million of this year's budget for lack of opportunities. I'll make a big bonus only on the profits I generate...no stock options.
You should read the report, because small business, free enterprise, and shale gas are the sustaining basis of truth, justice and the American Way. You, sir, are the salvation and cornerstone of the nation. Keep your chin up.
And there is a whole section "VI. Geopolitical Trends: The Outlook for Russian Exports" starting on page 43.
As I've mentioned before, it's looking more and more lik this is going to change. I'm not going to say more now, but sooner or later there will be a drumbeat article highlighting it. For now I'll wait.
I am reminded of a Bloomberg article last year about Brazil--a net importer of petroleum liquids--taking market share away from OPEC.
Having a memory, does not a good slave make.
I don't think their model had a variable for water availability for all these SG wells, and it looks like they they think these wells will never deplete.
From Shale Gas and U.S. National Security
[From a post written by Kenneth B. Medlock III, the James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics at the Baker Institute Energy Forum.]
Ecolab buys water management firm Nalco for $5.4bn
Russia Arctic Route to Rival Suez May Aid Sovcomflot IPO: Freight Markets
also Arctic Sea Routes Opening Up For China
Re: US Air Force: We want to use bio fuels, up top.
The world just got crazier. I didn't think it was possible.
We are now and have been for many years in a state of perpetual war related to oil security. The Air Force is one of the main consumers of oil in this war. Now it wants to fight perpetual wars for oil security with bio fuels, i.e. use bio fuels to subsidize oil.
Why? Evidently it thinks the end game is that these wars will fail and it will not have enough oil to fly its planes.
If that is the case who else in the world will have enough oil to attack us? The Taliban? Al Qaeda? I doubt it.
If oil becomes so rare that the Air Force can not commandeer enough to fly its planes, it is game over.
Using bio fuels which are to become unsubsidized while oil remains subsidized makes no sense. Unsubsidized bio fuels will likely decline in availability over time. Subsidized oil will also decline, perhaps even faster, since it is non renewable.
If the Air Force consumes signifcant amounts of bio fuels, it may drive the price above oil since bio fuel supply is likely to remain smaller than oil in the foreseeable future.
It will then have enough bio fuel, but the American economy will be more oil dependent than ever.
So the Air Force faces a situation where both fuels will likely be in decline. How does switching from one declining fuel to another declining fuel solve the Air Force's fuel problem?
There is one solution for the Air Force: peace. Stop messing around in oil producing areas of the world and causing resentment that leads to terrorist attacks. Stop bombing civilians. Stop wasting precious oil.
If the Air Force has its way, it will waste oil and then waste bio fuel to the point nothing is left. Then they will call it victory.
To my mind there are no victors in wars for oil security. Only losers. If appears the Air Force wants to make sure bio fuels go down with oil.
Wow! Subsidize biofuels to fight a war for subsidized oil? Where do all those subsidies come from? Does the term, "National Debt" mean anything to anyone?
Now I am beginning to think maybe running out the SOR isn't such a bad idea after all. At least we wouldn't be able to use it for military marrauding any more. Vive le empire! Vive le USA.
Craig
The damage done is of biblical proportions.
They will never forget.
Goes clear back to WWI and further.
"Blood and Oil"
http://www.youtube.com/watch?v=XB4E8w-AlqI
http://en.wikipedia.org/wiki/Nuclear_aircraft
http://en.wikipedia.org/wiki/Aircraft_Reactor_Experiment
http://en.wikipedia.org/wiki/Tupolev_Tu-119
Does anyone really think the rest of the world will just let us keep the money if USA Inc. rolls up the empire and goes home? There's no going back.
Yeah, but an F35 will look so cool with one of these on the side.
Edit:- Does anyone know how much oil the combined military services do consume?
Vast amount I'm sure.
F35s?
I am going to presume most flights will be UAVs, as they use less fuel ;)
Aw, what fun is that?
You can really burn some fuel in one of these puppies.
Isn't is cheaper to just mangle the entire internet, powergrid control systems, and computerized infrastructure of your enemy. Biofuels could power a lot of computers. LOL
You mean like this?
http://i289.photobucket.com/albums/ll225/Fmagyar/USAFBiofuels.jpg
You'll end up being called 'Fred the Photochop' ;)
NAOM
This article has the Navy's 'Energy Security' Logo in there, as it talks about Obama's Earth Day visit to see the 'GREEN HORNET', biofuelled jet fighter..
http://biofuelsdigest.com/bdigest/2010/04/01/obamas-energy-policy-shift-...
Guess the safe political path was 'A little bit country and a little bit Rock and Roll..'
Another "swoosh" logo design.
At least it honestly proclaims the navy's mission in the world!
http://biofuelsdigest.com/bdigest/wp-content/uploads/2010/04/F18greenhor...
http://www.google.com/search?tbm=isch&hl=en&source=hp&biw=1024&bih=383&q...
Global oil stocks release seen on halt for now
I don't understand that logic. The release failed to curb oil prices? Okay but what would have happened if there had been no release? The release of 60 million barrels last month just might have kept prices from jumping ten to twenty dollars a barrel. It just might have kept the global economy from sinking deeper into the abyss.
It is just not logical to say that the release of 60 million barrels did absolutely nothing simply because prices did not fall by several dollars a barrel.
Ron P.
One. If this oil had not been released, would this have made a difference in OPEC production?
Even if not, you have the time and ability to logically analyze this news. The vast majority are not even aware that there was a release, and even if they are aware, the bottom line for them is the price at the pump. If the release doesn't reduce the price at the pump, it does not have the political effect intended. So why bother? Besides, they should hold back their ammunition until closer to the election.
ts - I haven't kept up but has any of the 60 million bbls reached a buyer yet? I know for a fact no oil was released for the first few weeks after the announcement. It's probably good to remind folks that the price of oil is only one factor in determining the price of gasoline. And good to remember that this price is determined by the sellers and what they think their market will pay. There have cases where fuel prices moved in the opposite direction of oil prices. And it's also good to remember that the released oil will take many weeks to be shipped to the refiners (not counting what volume may be held as inventory) and to be refined and sent to the market. At the very least I suspect it will be many weeks before this "new" gasoline" hits the market.
And there's stil the question if the global export volume has remained the same over this time period. If we knew that exact number we might find out there has been or no net increase of oil on the market.
Well...just like the logic in QE2, I say we double down, until it works :)
Or until the next election is over.
I assumed that the story that Darwinian quoted was accurate. Shouldn't assume, of course. And, yes, there are many factors in the price of gas but that is irrelevant to the average consumer.
"The Energy Department will deliver about 7.7 million barrels of crude oil from the U.S. Strategic Petroleum Reserve in July, according to a notice on its website. The rest of the 30.64 million-barrel release will be delivered in August. ".....
“Barrels are going to other countries because of the Brent premium,” said Kyle Cooper, director of research for IAF Advisors in Houston. “If you are a refiner who can get your hands on WTI, you are going to process it because the margins are out of sight. The crack spread is wide enough that you will do well even with more expensive grades.”
http://www.bloomberg.com/news/2011-07-20/crude-oil-climbs-as-u-s-invento...
Gaddafi removal not being discussed - Tripoli
Read the whole thing
I don't take their denial seriously, but this report is probably an intentional leak either to cover up their progress or to show how far they've got left(as a way to show displeasure to their Western intermediaries, via the mass media).
Either way, I think the solution to the conflict won't come until either Gadaffi himself decides to step down and/or he is assassinated.
Either way, I think the solution to the conflict won't come until either Gadaffi himself decides to step down and/or he is assassinated.
Or, he runs out of supplies, and we can just take the oil without him being able to stop us.
You mean like we took the oil from Iraq? Of course we did not take a single barrel from Iraq, hell we did not even get a discount. We had to pay the OPEC world price for the oil just like everyone else.
And you think we will just take the oil from Libya? I am curious just to why you would think we would do that? There is no instance in recent history of us just taking anything without paying the world price for it, the same price every other nation pays when they take the oil or other commodities from another country.
Just why would think we would change our policy at this late date?
I know, I know, we just took the land from the native Americans but I did say "recent history", so please don't anyone get snarky. And besides we were all Colonial Brits in those days, not Americans. ;-)
Ron P.
What has been the United States' interest in the Middle East?
Nothing implied.
Nothing snarkey.
The question is asked flatly.
History is not my strong suite.
________________________________
Now, THIS is snarkey:
I know nothing of my own past.
I don't my own language
Even though I never left my lands.
I know nothing of the appropriate ways
To live without digging coal and oil
From the earth.
It's all in the eyes of the beholder. What I meant, but didn't elaborate very well, was that we could setup a rebel government and call them the legitimate government. Then, buy the oil from them. Now, if you are Gaddafi, pinned down in a corner, and your oil is being bought from your rebellion forces, you might call that taking it.
http://www.nytimes.com/2011/07/20/us/politics/20freshmen.html?_r=1&hpw
Cost-Cutters, Except When the Spending Is Back Home
Now I see a pattern.
Electricity Demand Soars in Mid-Atlantic States
It has been unusually cold here. I am inland from the coast in Central California. The wine grapes are growing fungus:
http://www.pressdemocrat.com/article/20110717/BUSINESS/110719642?Title=V...
My friend in Tacoma, Washington says this is looking like another year without a summer... more than last year.
The heat elsewhere also lower's yields:
http://www.wral.com/weather/story/9886553/
"In my opinion, it's one of the worst corn crops in recent memory,"
40 percent of the state's corn crop is considered poor or very poor,
Soybeans, for example, are "not growing at all right now,"
The commodity markets rally.
North of Seattle, summer, what summer? My early corn is completely hosed. It's tasseling out without ear formation, or only a foot tall, or just deformed. The later planted corn is looking better, but heavy bird damage completely wiped out some varieties.
It's also been perfect conditions for wheat leaf stripe virus. One of my heritage varieties is just dead grass. Another is 18" tall and already headed out, so I'm looking at low yields there. Interestingly, the hard red ND bread wheat and Sonora White (from California) are affected but heading out anyway.
Best hopes for a good potato crop. The potato blight also loves cold, damp springs.
As the earth warms, it becomes a roiling cauldron of greater extremes... with an overall upward trend. The hot and dry and the cold and wet both reduce crop yields.
I think predictability goes down, too. If you plant different crops, the surprise may reverse.
I hope happy plants find a way in your gardens.
Flintsone's cartoons adopted as official historical documentation..
"One group, Texans for a Better Science Education, has put out a call to pack Thursday's public hearing with testimony urging board members to adopt materials that question Charles Darwin's theory on the origin of life. A vote is scheduled Friday."
LMAO!! We are truly doomed!
Texas politicians plan to boldly lead us back to the 12th Century, instead of the 21st Century.
In any case, I thought that Palin might be a real life Nehemiah Scudder*, but Perry might be the leading candidate. I suppose a Perry/Palin administration would truly be a sign of the Apocalypse.
*http://en.wikipedia.org/wiki/If_This_Goes_On—
(Heinlein)
Kinda like this?
If you are young
And have an interest in science
Or have technical skills
This is not the place for you
You are despised
You are reviled
You are in danger
Watch your words
Act dumb
Sadly, that brings to mind the actions of the Khmer Rouge regime in Cambodia against professionals and intellectuals. In the movie 'Killing Fields', acting 'dumb' was a survival strategy.
Yes, right down to not wearing glasses. Glasses were a sure sign.
I don't expect a decapitating attack: where the intelligentsia of a revolution are removed. Nor a pogrom. Just marginalization, prejudice, and random mayhem... like what is directed at the Amish.
But, then again, no one expects...
http://www.youtube.com/watch?v=uprjmoSMJ-o
If the media and officials are free to create this situation, then they should be denied the participation of their targets in their economy.
They killed intelectuals. But not singeled out based on eye-wear. That is a myth. Unfortunateley left wing political pilgrims visiting the country finding out they actually did not kill people based on glasseyes will make the conclusion the rest (the true acusations) were lies to. A known phenomena.
I thought these were savy politicians, haven't they learnt anything from the Dover trials from a few of years ago that. The intelligent design crowd were made to look like a load of idiots, pushing the same agenda in the same way will only give a similar result.
They may well be savy, -about how to appeal to low-information big-fundamentalist voters. Getting policy actually implemented may not be the motivation, getting the support of various interest groups is. Oftentimes reactionary stuff, with no chance of becoming actual implemented policy is pushed, because it pushes the right buttons for certain interest groups.
Uh, Charles Darwin had nothing to say about the Origin of Life, his theory was about the evolution of populations by means of natural selection. Americans are truly ignorant! :-(
India will lose 400,000 BPD from Iran according to this report:
http://www.bloomberg.com/news/2011-07-20/indian-refiners-said-to-seek-sa...
Why not airlift payment for 4 of the $5 billion in a mutually agreeable form (euro bills, dollar bills, gold at an agreed upon price) and give US$1 billion in rupees for Indian products and services.
I really do not buy this "we cannot process payments" excuse.
Alan
$4 billion is approximately 82 tons of gold. After that importing 400,000 bpd will cost approximately 30 tons of gold per month. At that rate, India will run out of gold in a few months. If they decide to pay in currency bills, they will have to arrange $1.5 billion per month. I don't think that much physical currency is available.
Maybe a better solution is barter; India partially pays for Iranian oil with refined gasoline. But I think they can't do that because of sanctions.
The USA had several currency flights to Iraq. About $1 billion/C-17
There are many multiples of $5 billion in circulation.
Audit trail went cold once in Iraq.
There are 200 euro notes ($100 is largest US currency bill in general circulation). Not sure of weight/bill but it should not take too many flights to pay off the debt.
And India can buy more gold in Zurich, London or other places any time it wants.
Alan
Wow,
I highly recommend reading the very first article up top, 'Galactic Scale Energy'.
One gem from that article:
I haven't fact-checked the calculations, but even if the author is off by a couple of factors of ten giving us 140,000 years, the author still makes the point in an ironclad fashion.
This article, or one like it, ought to be required reading by everyone on the planet.
This article is rather similar to Issac Asimov's short article 'Fecundity Unlimited' which extrapolates a small population growth rate, makes fantasy assumptions to facilitate the point being made, and asserts that given 'magic technologies', every carbon atom in the known Universe would become incorporated into human flesh by ~ 11,000C.E.
All humans need to be educated on the exponential function, Liebig's Law of the Minimum, and the Limits to Growth.
The only thing more certain than Limits to Growth is our inability to disabuse most folks of 'magic thinking', along with the IBGYBG attitude.
Heis:
There is no way the math could be wrong, so maybe his 1400 years is 1420. Or we could add another thousand years, by including every galaxcy in the known universe! A trivial and silly article for those who already understand, but it has its place. The real ironclad point, is we've had exponential growth since the beginning of the industrial revolution, and even with the most fantastic assumptions, the end is closer to us than the beginning.
With not fantastic assumptions, the bend of the curve is already upon us. So we won't be able to put off coping with the end of the exponential growth period for some far off other time.
http://www.youtube.com/watch?v=F-QA2rkpBSY&feature=related
Apologies if the link has been posted previously (pretty sure it would have been). No harm in a refresher though.
It's a very good golden oldie, the Bartlett video. Just like the Galactic article it explains the consequences (and folly) of exponential growth, which any steady year-over-year percentual increase is.
Many or most still do not get it. They perceive the way out is building differently, still growth but build it differently.
Bartlett explains all the consequences but still we think we can engineer our way out of this human made mess with more engineering. Many say their "engineering" is good, it's not the same, "just but a Prius", cover the landscape with solar panels and windmills. It's the kind of thinking Bartlett mentions "the answers to problems are solutions", deal with consequences at a later date.
Hey, hey, what about all those parallel universes?! There's gotta be some oil or sumthin even better in them, right?
Take a balloon, any balloon. Keep blowing it up. That is continued expansion. It does not matter if it is exponential or not. It really does not matter what the material is either. Not size for that matter or strength. Once the whole balloon has expanded until it is only one atom thick then expansion is over. The next step is bursting.
NAOM
"Everything we write depends on an imagined future. It’s not too much to say that narratives are like icebergs: nine-tenths of the meaning of a story lies not in its words, but in the past and the future that its words evoke." - John Rember
http://mfainabox.com/blog/generations/
Does anyone ever wonder if we imagined a better future, we might get one?
Best to all,
Kate
Many do :)
Where's my vein opener? I know it's around here somewhere... Maybe in the sofa cushions!
I found this encouraging: "1 2 3 Go" by Bella Nova. Have no idea what it's about, I just enjoy the Blade-Runner confluence of cultures. Gives me hope, somehow. Perky, too! Became the Wake Up song at the lab:
http://www.youtube.com/watch?v=9kv_qonIsgo&ob=av2e
"the passivity of Americans in the face of restrictions on civil liberty, offshoring, propaganda disguised as news, an oligarchy disguised as a two-party system, theft disguised as financial deregulation, and permanent damage to the land and water by people who won’t clean up their messes."
Ya know... if you withdraw into a world of odd happinesses and make it work for you, like running a museum or feverishly creating, the world can go away even as it flows all around you. Little will touch you and you need not know. Living far away works too, but can be boring after a while. Escape Escape Escape!
There is no purpose, other than making babies. Too many babies...
I think people may have domesticated themselves into something untenable... like our creation, the domestic chicken. Chickens lay more eggs than they could ever hope to hatch successfully. There is an inherent inability to be fulfilled.
On the other-hand, the movie "Radio Bikini" has a scene of the Bikini Islanders and their sparsely peopled paradise. They are swept onto a desert island by the bomb-team, put into two-story barracks housing on either side of a dusty street, and the ships of Gatorade and Pampers arrive to this day. Their happiness is gone.
The big reset may be the better future. That's why so many hope and cheer its coming. A return to working together and loving each-other like we used to. The island Chief's words...
Make your own world.
There is no 'we'. Not really.
Well there's a culturally specific statement if I've ever seen one.
(Perversely, any culture that this applies to might have to 'own' such a truth collectively..) /snark
Birth defects linked to coal and pesticides:
http://medicalxpress.com/news/2011-07-birth-defects-linked-coal-pesticid...
polycyclic aromatic hydrocarbons (PAHs) from inhaled coal smoke.
Neural tube defects
http://en.wikipedia.org/wiki/Polycyclic_aromatic_hydrocarbon
Natural crude oil and coal deposits contain significant amounts of PAHs
PAHs known for their carcinogenic, mutagenic and teratogenic properties
High prenatal exposure to PAH is associated with lower IQ and childhood asthma.
U.S. Consumers Relying on Credit for Basic Necessities
Jobless Claims in U.S. Rose 10,000 Last Week
It reminds me of the old company towns where people would be paid in scrip which could only be redeemed at the company store where goods were overpriced. Workers quickly found out that they could never actually get ahead, and were sinking further and further in debt..
1 in 3 Michigan seniors can't afford basics, study says
About cash flow:
Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.
--Charles Dickens, David Copperfield
Usually the term connotes something transitory - but does anyone really expect prices to go back down (negative inflation) for very long?
"DALLAS - A dangerous scene played out early Thursday morning as thousands of people hoping for Section 8 vouchers ran for a spot in line." - July 15th.
http://www.wfaa.com/news/local/Authorities-fingerpoint-over-blame-in-Dal...
5000 people stampede for a chance to get 100 housing vouchers. Collapse at work...
Edit : Should be fair warning for anyone trying to turn medical assistance or educational programs into voucher programs. I can't imagine what the bread lines will look like...
Well, if people age out before they get to the head of the education line, or die before they get to the head of the medical line, then, problem solved, I guess. But OTOH, if that's not what the societal "we" want, then "we" will have to run an economy robust enough to support such things sufficiently to avoid long lines, even if doing so involves, say, "spoiling" the Cape Cod view, or triggering some people's nuclear neuroses. Can't really have it all both ways.
Japan names more Fukushima evacuation areas
http://www.straitstimes.com/BreakingNews/Asia/Story/STIStory_693082.html
Cows eating contaminated feed double expected level in Japan
http://www.cattlenetwork.com/cattle-news/latest/Cows-eating-contaminated...
Japan Halts Sale of Fukushima Beef
http://online.wsj.com/article/SB1000142405270230366190457645585212535957...
State to buy all radioactive beef
http://search.japantimes.co.jp/cgi-bin/nn20110721x2.html
That's almost sufficient to trigger a case or two of nuclear neuroses...
Give me a moment... Give me a moment... I'm still looking through the DSM IV...
Followed by:
External power supply cut at 2 Fukushima reactors
WTI just spiked over $100 - now $100.10 - let's see what happens now.
Edit: immediate effect - CNBC removed WTI price from rapid updates box (key markets/commodities) at bottom right of screen. Neither Bloomberg nor CNBC have mentioned the spike above $100 on air.
Current summary of the day according to the financial networks.
"Stocks are flying high" - Bloomberg
"The (stock-market) train has left the station and is on the move" _ CNBC
Update: And now CNBC just finally mentioned it briefly when covering the natural gas inventory report just released.
Nat Gas Storage report.
Weekly Natural Gas Storage Report
Isn't it a bit of an obfuscation to concentrate on WTI anyway, as Brent has been well over $100 for a good while now and is a much more widely used benchmark?
It's such a bizarre dis-connect to see those scenes from Dallas over vouchers and hear the stock-
casinomarket being rah-rah'd.Yes, it is and I've commented on that previously. The goal recently seems to be to keep the casual observer thinking that "oil" is below $100 by continually concentrating on WTI. When WTI spiked over $100 earlier they tried their best to ignore it and are probably hoping it stabilises back below $100 so they can concentrate on the "buy stocks now and party on" message.
The lower priced WTI does not benefit the US consumer - but really enriches the refiners with direct access to it as they are selling product at world prices which remain mostly in synch with the world oil markets - not WTI. Thus US consumers see sub $100 oil and wonder why they are paying gasoline prices equivalent to $115 oil.
Right, thanks. I figured that was what was going on.
In West Texas and West Central Texas we are having problems getting oil picked up. Last month, our operator had over 5,000 barrels of oil in stock tanks that we couldn't get picked up, and we almost had to shut-in a good deal of our production this week, because of a lack of storage, but finally some trucks showed up.
Apparently a lot of trucks have been shifted down to South Texas, because of the long hauls there, and I wonder if more operators are doing long haul deliveries to the Gulf Coast, rather than to Mid-Continent refineries (and thus contributing to the trucking shortage).
In any case, I call it the "Whack-A-Mole Personnel & Infrastructure Game," i.e., as soon as we take care of one shortage of personnel or equipment, a new shortage pops up.
And I've noticed that crude stocks at Cushing have actually been declining recently from their record high in April.
The WTI/Brent spread might be closing in the medium term as well and at $18.80 is now about $4 below the recent record spread.
Bloomberg WTI Cushing - ICE Brent Spread
Given the price differentials, it would be worthwhile for companies to truck crude oil from North Dakota to the Gulf Coast to take advantage of it.
It would be more efficient to move it by rail, and much more efficient to move it by pipeline, but until the facilities are built I imagine there will be a lot of crude oil being trucked down US highways from border to border.
What the status of a pipeline west from Alberta to the Pacific? It seems to me that North American producers in general need to be planning on heading for coastal regions, since the Mid-Continent refiners aren't doing anyone but themselves any favors.
The approval process for Enbridge's Northern Gateway pipeline to Kitimat is ongoing. They are currently holding public displays in towns along the route, and public hearings are scheduled for early 2011. Given the amount of political stroke of the Western politicians supporting this project, I get the feeling that environmentalists, NIMBYs, and native people may find themselves quietly ignored by the powers that be, much to their horror and distress.
Also, Kinder Morgan is talking about expanding the TransMountain pipeline to Vancouver to 700,000 barrels per day. Since Vancouver has one refinery capable of processing 64,000 b/d, and the Washington State market is saturated with Canadian oil, I think most of that oil will go to export. I'm not sure that exporting 500,000 b/d or so through Vancouver is that great an idea since supertankers barely fit under the bridges and the channels will have to be dredged to give them enough draft, but they could do it without any kind of government approval or review process, and that's what's important.
The First Nations will file suit against the pipeline.
The case, after a number of years, will finally be heard by the Supreme Court. Based on prior rulings, the odds favor supporting the First Nations.
BTW, Alberta oil interests have precious little stroke in British Columbia.
Alan
If all y'alls trucks out west are suppose to be helping us down here in the South, they aren't. We can't get anything hauled down here either. By the 25th of every month all the major trunk lines running west to east towards Houston, like Enterprize (Trans-New Mexico) are full and all the LACT stations along it get shut down and nothing moves unless it gets trucked to rail yards and put on tanker cars. There is a giant new rail car terminal being built near Harwood, Texas to move oil. I am told that some of the bigger Eagle Ford players down south are actually having tanker cars fabricated to lessen truck hauls. When I was a kid one of the biggest crude oil buyers in Texas was Scurlock; Ed Scurlock owned thousands of tanker cars that hauled oil to the Gulf Coast, even as far as the East Coast and those rail cars played a significant role in fueling the war effort in the mid 1940's.
Wyoming ships Texas qazillions of tons of coal by rail, I am not sure why Bakken oil from N. Dakota can't be shipped by rail, with no rest stops in Cushing. If the tub is drained in Cushing clearly the WTI to Brent parity would lessen, yes?
What's puzzling is that total US C+C production has been between 5.4 mbpd and 5.6 mbpd since the fourth quarter of 2009. I guess that increasing Mid-Continent production is offsetting declines from Alaska and the Gulf of Mexico--plus presumably increased use of trucks on long haul runs to coastal areas is contributing to the trucking problem.
I posted an article yesterday commenting on the crack spreads with WTI.
Alot is being made with the SPR releases and oil price in the press. It seems that the fate of the European debt crisis is what really is controlling price now. As it seems that is more resolved lately, confidence returns and the dollar shrinks, boosting oil. IMO European debt is not really fixed, who knows the turmoil ahead.
Yes, I saw it. The WTI refining spread has narrowed a bit in the last few days and has now dropped to about $31 down from the record $35 set last week. But that's still huge!
Bloomberg WTI 321 Refining Crack Spread
Whether the pullback is temporary or whether the crack and Brent spreads widen again we'll have to wait and see. Goldman Sachs says the spread will close, CitiBank says the spread will double. Roll the dice :-)
I suspect that an increasing portion of US refinery capacity in coastal areas, has recently been, will continue to be, devoted to processing imported oil and then exporting the refined product. So, US domestic producers, as much as possible, need to find a way to link the price of their product to the global crude oil price, which tends to prevail in coastal areas.
Rumor on CNBC is that if WTI closes above $100 or if Brent closes over $120, look for another SPR release.
I would guess that the preference for foreign crude by US refiners would be more a function of consistency in supply and the ability to buy on a long term contractual basis than price, assuming grades are the same, don't know. It has only been since 2009, as you point out, that daily domestic volumes have become consistently reliable. It would be interesting to know for instance what the incremental delivered price of oil per barrel is from Venezuela to Corpus Christi by tanker (small ones I guess that don't require de-lightering offshore) compared to oil trucked from Cushing, dock to dock, same end user, similar quality of the crudes.
I suspect that Gulf Coast refiners are paying $117 because they have to. Here is a missive I sent out to some joint venture partners (and thanks to Undertow for posting the crack spread info):
The crack spread, which is the difference between the price of crude oil and the price of refined product, is now about $35 per barrel, which is insanely high. I can remember only a dozen years ago that the price of crude was only $10/bbl, and now the refineries are making nearly three times that much in profit.
It's an unstable situation, but while it lasts it's certainly a lot of fun for the refiners who have access to the cheap oil. They know it won't last so they won't invest any money in expanding their refineries.
US refinery utilisation by PADD Week Ended 7/15
Refiners with access to WTI are clearly running pretty much flat out unsurprisingly...
That train might hit a wall if Moody's or S&P downgrade the US credit rating to AA. I'm waiting on the sidelines - if things get nasty with the debt ceiling or if the credit rating drops, I'll watch the market tank, then snap up a bunch at a guesstimated bottom, then bring home the bacon when investors return to the market a couple weeks later. Come on, drop like a stone!
I am with you on this but am still puzzled why apparently so few people seem to be using the same strategy. The stock market keeps going up, indicating that most investors must think there is nothing to worry about. Anway, to me, it is too scary to be in the market at this time.
From U.S. Army: Chiarelli: 'Without energy, Army stands still and silent'
also Pentagon Strategy Addresses Energy Challenges
UN official warns climate change could lead to conflicts over resources
also UN countries divided over security council climate role
also from Deutsche Welle: UN says climate change threatens global security
I'm really getting the feeling that the whole damn system is a "dead man walking" towards the edge of a precipice.
And, on que, the U.S. Congress gives their answer to the U.N. ...
US panel votes to bar climate funding
Mother Nature may have a few surprises
Mass Extinction Easier to Trigger Than Thought
Cloud computing can achieve annual energy savings of $12.3B
Meh. Reads like a puff piece for somebody with data-transport bandwidth to sell at a nice stiff price. Maybe that would be AT&T. "The cloud" is a fancy-sounding marketer-invented nebulous moniker for what functions as a "computer center". People have forgotten the huge disadvantages of those, but they will re-learn soon enough.
The computations still get done somewhere, and the "cloud" chip will be much like your local chip; it's not like forty years ago when there were major differences. Nowadays nearly every chip has sleep modes which greatly reduce the power differences between your chip and a centralized one; that's not like forty years ago either.
And really, apart from weather forecasting, FPGA design, or the like, it's the local graphics display that does nearly all the computing. The "cloud" approach just tacks on extra joules for modems and routers to transport the data to and from a CPU chip halfway across a continent or a planet. Plus, even local data storage doesn't go away since any sane "cloud" user will want to backup in case of service outage, or one of those massive "cloud" data losses, or even some grandstanding judge shutting down the "cloud" provider for a while over some arcane patent dispute.
Of course, "the cloud" will certainly be convenient (at a price) for businesses whose people travel a lot. But if they're consuming umpteen kilowatts by traveling a lot, who needs to care about a few hundred milliwatts one way or the other for the actual computing?
Which approach "wins" on joules? I dunno - but the victory will at the very best be by a nose, and the difficulties of estimating who wins will put even the most fruitless EROEI arguments to shame.
Edit - would we have to build another continent to provide enough shoreline just to dock enough of these things to make a difference, while they're dumping power into the grid?
I notice that I have 5 gb of free "cloud" storage available to me from Amazon. No thanks. The "cloud" is a term that very hip people on CNBC use to fool people into thinking they know what they are talking about.
I have 7 GB of free cloud storage at gmail. Using 16% of it. I love it!
Cheaper and cleaner electricity from wave-powered ships (w/ video)
on-board battery with a capacity of 20 megawatts
Batteries are measured in power x time, such as 20 megawatt hours.
Sails look much more efficient to me.
Alan
The power is not for on-board use. I think their aiming to download power to the grid [to offset variability in other renewable energy sources, like wind or PV].
Its scalable if you don't think to hard about the cost of all those boats. Not sure about the batteries either.
Sounds like a good setup for using flow batteries.
NAOM
Why not run a long extension cord back to land?
As the original article mentioned, the 'extension cord' is the most expensive part of offshore power generation. Somewhere in the neighborhood of $500,000/Km
The US uses about 1TW so a fleet of one million of these would do. How much do they cost each? lets say 10 million dollars that is only 10 trillion dollars. Only half of what we gave the global bankers (20 trillion transaction guarantees, with 20% expected payback rate according to Stieglitz noble in economics). Let's do it.
Sigh. Collect the energy out at sea and bring it to the grid by lugging the battery/ship to shore. Average power, what, 400kW? We'll need millions of these just to make a dent in energy production.
Oh, and the costly, well-salted, constantly-rusting generating equipment will be idle much of the time, and yet he's already naming a price per kWh? LOL. It's usually a very long way from a toy in some professor's wave tank to a structurally sound, seaworthy, operational, economically-feasible device.
Physorg.com was what, seduced by the use of the cool jargon "3D printing" in the press release?
Edit - oops, put this in the wrong place up above - would we have to build another continent to provide enough shoreline just to dock enough of these things to make a difference, while they're dumping power into the grid?
IEA 30-Day Review of Libya Collective Action
also from IEA Stock release review – July 21, 2011 FAQs
Answers to questions
Q: Last week the OMR projected even greater tightening in the third quarter. Wouldn’t this argue in favour of extending the stock release for another 30 days?
Q: Why has it taken so long for oil from the release, notably in the US, to be made available to the market?
Q: What is the envisaged time line for replenishing stocks after the release?
Q: Brent has flipped back in to backwardation recently. Is that indicative of a successful stock release?
Q: Is it true that the IEA did not extend the release because member countries were opposed?
I don't think the plan was ever to release more oil after 30 days. The real test is what happens in another month's time as I think that's always been when a second release was penciled in.
Q: Why has it taken so long for oil from the release, notably in the US, to be made available to the market? As I understand the law sets the methodology for release: companies have 30 (?) days to submit bids and the the gov't takes X days to evaluate and award. Then the oil has to be pumped from the fields and shipping arranged by the buyer (a refinery or someone choosing to hold it in storage). Takes time.
Q: What is the envisaged time line for replenishing stocks after the release? Haven't heard any prediction but would think it would be many months.
Q: Is it true that the IEA did not extend the release because member countries were opposed? I read somewhere that was the case and it was the other countries that were very opposed.
Rock,
I recall you said recently that supposed internal disagreements within OPEC might actually suit OPEC. I'd have eaten a barrel of crude if the IEA had announced another release after only a month :-) I won't make that bet about next month.
tow - Just a theory like a brokerage house can hold a huge pile of Company X stock and can then push the stock with its clients and sell on the bump. Or dis the stock and make a bundle on short bets.
Now consider how one simple statement (or an alleged OPEC dispute...or a real one) by the KSA can swing the futures market by hundreds of millions...even billons. Remember about 1 billion bbls of futures are traded daily if I understand correctly. So maybe a $10 price swing generates a $10 billion wealth transfer. Own just 1% of the market and make $100 million. Do that a couple of times a month and you make around $2.5 billion/year. And AFAIK there is no global SEC to monitor such activities…not even sure if there’s an enforceable law against doing it. I would think the KSA could have enough layers of dummy corps to hide it all.
But like I said…just a silly unsupported theory. But if I knew a week ahead of time every public statement the KSA was going to release I could make millions and no one could prove a thing.
Hello first time poster here. I have been lurking for a while and I want to run a theory past you folks.
I think I know why WTI is behaving oddly. I think the administration is preparing for war.
I believe that there are pipelines that run between the gulf and Cushing. (I am sure I read that here on the oil drum but I do not remember the post). The “problem” is that the oil is flowing from the gulf to Cushing, not the other way. That combined with the flow of oil from the shale and tar sands is filling up Cushing. This makes no economic sense to me. Why pay north of $117 in the gulf and sell for $95 in Cushing?
The release of the SOR was timed to hit the refineries in august. The latest oil report says the amount of refined products increased the in past period. Where is the shortage? I think they are stuffing the supply chain, Topping off so to speak.
Over on Max Keiser we have a report that the CIA agent who wrote “siriana” says that Israel plans to bomb Iran in September. Are we going to war with Iran? Is this why oil is being stockpiled in Cushing?
What do you folks think?
You think the oil companies are in cahoots with Obama's Administration ?
COP owns one of the Cushing-Gulf pipelines.
COP also owns several refineries in the MidWest with crack spreads in $31 to $35 range.
One division loses money (basically empty) but another division has a printing press in overdrive.
Best Hopes for COP profits :-P
Alan
Alan,
Yes that’s what the article’s all say. I was thinking more along the lines of an executive order. However you are right a $35 crack spread is a license to print money as long as they can processes significantly more WTI than they have to ship up from the Gulf. None of the articles I read spoke to that I issue.
From COP website
Ponca City Refinery The Ponca City Refinery is located in Ponca City, Okla., and has a crude oil processing capacity of 187 MBD. The refinery processes a mixture of light, medium and heavy crude oil. Most of the crude oil processed is received by pipeline from the Gulf of Mexico, Oklahoma, Texas and Canada. Additional foreign crude is purchased into the Gulf Coast and delivered by pipeline.
Now the Seaway pipeline has a capacity of 350 MBD per day. So if you are correct then I would expect that Seaway would be running as little as possible. So the question is how much are they shipping up to Ponca? They can only process 187 MBD per day.
Do they report how much oil they are shipping up from the gulf thru that line? Is there way we can find that out?
Don
Doesn't COP also have some MidWest refineries as well ?
The MidWest has a shortage of refining capacity compared to demand. For decades, they have imported a % of their refined products from the Gulf Coast refineries (which currently pay world/Brent prices). In a market, the highest cost marginal supplier sets the price.
Alan
Blue –Interesting theory. AFAIK pricing is acting exactly as I would expect to: there are more sellers than buyers. Thus to sell your oil you have to cut your asking price…pretty much how most transactions work. As far as the oil flowing the other way that would be one heck of a tight lipped conspiracy. First, you just can’t flip a switch and make the oil flow backwards in a pipeline. Many thousands of tons of heavy equipment would have to be realigned by hundreds of workers. Then the many hundreds to thousands of folks involved in the system would have to be kept quiet. The next problem would be that if the govt were trying to stockpile oil in Cushing it would have been full many months ago. Not sure but I think the total storage capacity is around 40 million bbls. Or about 6% of the oil in the SPR (not "SOR") facilities. So what’s the advantage of hiding a little bit more?
But hey…many folks still believe the moon landing was faked. So maybe it was another successful conspiracy.
I'm not able to compute most of that postulate, but the prospect of an attack on Iran has been floated a lot recently, and is hard to buy, as much as some are SO eager for it.
I have to think that Israel could get a nod maybe from Washington/London for such a move, but not from hardly any other Capital.. and with the recent activities around Arab Uprisings, I would be very skeptical that the IDF would really take this shot.. now maybe they're hoping Gov. Perry, Lieberman and other Godly American Roughnecks will help toss these lightningbolts in on their behalf.. but I doubt this will play out, unless purely by an unlucky chance combo of SNAFUs.
Blue
Your theory - like all the numerous theories predicting some kind of military action against Iran in the very near future that have thus far failed to materialise - is utter bunk.
For starters, the Mid-west has insufficient refinery capacity to supply its local market, and the bulk of pipelines coming from the Gulf are carrying refined products, not crude oil. For seconds, the industrial and market infrastructure has been around for many decades, and you're ignoring the way that "legacy" issues are distorting things at present - you could theoretically reverse pipeline flows and send crude from Cushing to the Gulf ( bear in mind that Cushing stores less than 72 hours of US crude consumption ) - but the mid-West would quickly suffer a gasoline and diesel shortage. For thirds, even if Libyan production wasn't shut in, there is no way in hell that any US administration is ever going to launch a military attack against a major global oil producer during the peak of the Atlantic hurricane season - just look at the production impacts that the US has experienced over the 2004-2008 time frame ( hundreds of millions of barrels of lost production due to hurricanes ). For fourths, US commercial crude inventories are currently declining - which I take to mean that, en gros, there is a belief that prices are going to rise, based on market fundamentals, not strategic risk forecasts.
But the real question is why you think that it is vaguely realistic that the US is going to launch a military attack against Iran; seriously, WHY? For what reason, to what purpose, to what end?
Fracking fuss at Beaver Run Reservoir:
http://www.truth-out.org/fracking-drinking-water-source-80000-pennsylvan...
http://maps.google.com/maps?q=Beaver+Run+Reservoir&hl=en&ll=40.490826,-7...
How much bribery was involved?
x - Good catch. As I've pointed out using surface pits or surface disposal is not allowed in Texas. We use mobile steel tanks to keep the nasties out of the ground. And they rent relatively cheap. So they probably didn't use a surface system to save money on temporary storage as much as to save money having it disposed of safely.
Bribe who? I have no way of knowing if what they did was illegal. Not too long ago it was legal in PA and NY for local municipalities to dump that crap into their systems. And if it was illegal that only counts if you get caught. From what I've read the Yankee regulators were not prepared to deal with all the new activity. Maybe there was no one to bribe because there was no one watching.
Again, bragging about Texas (and La), we have inspectors running around our drill sites on a regular basis. And no one breaks the rules (intentionally anyway): too easy to get caught and way too expensive if you are. And how tough is La.? Drilling in La. the ground is often swampy so you put a short ring dike around your location. Of course if it rains, as it often does in those parts, rain water accumulates inside the ring levee. No problem, right? Just pump it back over the levee. Nope: in La. you can't pump accumulated rain water onto the ground or you get a big fine. Imagine what they would do to an operator if they caught him dumping frac fluid on the ground. And yes: over the years I've spent tens of $thousands trucking rain water to hazardess waste disposal sights.
China to install 1.4TW of fast neutron Nuclear reactors by 2100.
"PWR capacity in China is expected to level off at 200 GWe about 2040, and fast reactors progressively increase from 2020 to at least 200 GWe by 2050 and 1400 GWe by 2100."
from http://www.world-nuclear.org/info/inf63b_china_nuclearfuelcycle.html
PWR stands for pressurized water reactor
OPEC Exports Rise From Middle East on Demand, Oil Movements Says
That may sound impressive but it really is not. Exports from OPEC is still down over one million barrels per day from the 2011 high of 24.19 mb/d set the four weeks ending February 12th.
Below is what Oil Movements report for OPEC exports, excluding Angola and Ecuador.
Before Libya
After OPEC increase to offset Libya decline
Yet OPEC's OMR shows OPEC production increased by over half a million barrels per day in June even after the Libyan decrease. Oil Movements shows a slight increase since June but the Libyan decline has not been replaced. And for sure we do not see the dramatic increase that Saudi was supposed to have produced.
Ron P.
From your figures. Pre Libya outage average: 24.0 mb/d. After Libya average: 22.8 mb/d.
Libya's normal crude exports are about 1.3 mb/day. So it seems that none (or very close to none) of the lost Libyan crude exports has been made up by other countries.
If you're mother hasn't taught you already ...
The dangers of cannibalism
I have spent some time this week sitting in the heat and pondering the lack of cannibalism. This makes a lot of sense ->
Eat one little finger-- just one-- and you get labeled as a cannibal forever. I believe the politically correct term is, "people who eat people."
The differences between amyloid-type dementias, vascular dementias, and lewy-body dementias seem to be pretty specific. For flat-out terror, nothing beats lewy-body, though the worst hallucinations are transitory and you can still keep some of your personality and sense of humor if you're lucky. The amyloids, it seems like you lose appropriate affective response, and that would be a bit worse, IMHO.
What was the line from 'Book of Eli' - 'Show me your hands'
Re Amyloids: Is that why Zombies are no fun at parties?
http://www.nytimes.com/2011/07/20/opinion/20cullen.html?_r=3
You'd think information like that would be a wake up call for action to drastically reduce GHG emissions. However, the only way to characterize the global response is an attitude that it is easier to 'adapt to higher temps'. It's not my response, but it does seem to be the overall world and especially US attitude. What those people thinking it will work out fine for us to adapt to a warmer world need to know is, the weather could kick into a much higher range of extremes. To some extent we are already seeing these extremes, and there is no need to mention them all because we are all too aware of the recent climatic disaster events. However, what we are seeing now may be the softer side of what is to come. Tipping points for methane emissions, ocean acidicy, semi-permanent droughts, desertification and exceedingly higher temps are all possible pitfalls to having the attitude of simply adapting. But that does seem to be the concensus response.
Chance favors the concentration of wealth, study shows
This is consistent with historical observations.
However, they apparently did not model the redistributive mechanisms:
- top down confiscation and redistribution by the guy in charge, e.g. seizure and redistribution of church property in Reformation Europe, seizure and redistribution of the lands of nobility by despots in Russia and China.
- bottom up redistribution by revolution and liquidation of the wealthy, e.g. France, Russia and China.
- civil and international war, which involves confiscation of the losers' assets and often involves dissipation of the capital of the victors.
In addition, a sufficiently serious plague can result in many fortunes reverting to the state in the absence of heirs.
What Was in the Oil Spilled during BP's Gulf of Mexico Disaster?
Iran, India oil rumpus has wider implications: Clyde Russell
http://in.reuters.com/article/2011/07/22/idINIndia-58391020110722?type=e...
Hi,
I've uploaded a new version of my software to my website.
The biggest changes are:
* Vietnam Hubbert Curve has been added
* Added custom implementation of Jeffrey Brown's Export Land Model, featuring Saudi-Arabia
* Bug Fix: Multi Hubbert Mode works again for the UK
A conclusion: Saudi-Arabia probably won't be able to export oil after ~2030.
You can find it here: http://sokath.sourceforge.net/
I am willing to post a few screenshots of KSA if you want to see results in this thread.
Natural gas pipelines as a storage for wind energy (Google translation)
There is an interesting concept for converting surplus renewable electricity to methane and, therefore, help solve the problem of large-scale energy storage while utilizing existing infrastructure:
Original German-language content available here. The provider itself also explains the basics here (google translation).
As far as I researched it, the process bases on the Sabatier reaction. There are pilot plants operating in Germany which test the scalability of the concept.
If the concept works in a scalable and economic way, this might mean that renewable transportation could be based on methane instead of electricity (e.g. natgas-powered vehicles instead of electric cars). The transition to renewable methane would be also much easier as to the so-called "hydrogen economy", since methane infrastructure (pipelines, storage facilities, power plants, and even fuel stations) is already in place.