Drumbeat: January 4, 2013

Japan: 'Warmth-sharing' movement spreads

Winter cold is not only uncomfortable but also sometimes expensive, and increased power use this time of year adds an extra burden to the already taxed power grid, which is why both the government and ordinary people appear to be willingly adopting "warmth sharing," or the communal use of warm and toasty places to save electricity.

In addition to saving power and reducing carbon dioxide emissions, two benefits that the Environment Ministry hopes to gain from the movement, the concept can help provide companionship to elderly people living alone and help restaurants boost profits.

The idea was introduced this year as part of the ministry's "warm biz" campaign to reduce wintertime electricity use.

Iceland bets on oil to boost fragile economy

OSLO (Reuters) - Iceland is opening its waters for exploration to energy firms, and involving the help of oil-rich Norway in the process, as it looks to make use of its energy resources and boost its fragile economy.

On Friday Iceland and Norway are scheduled to sign a deal that will see Norwegian state-owned firm Petoro take 25-percent stakes in Icelandic oil licences awarded last month to London-listed firms Valiant Petroleum and Faroe Petroleum.

Oil Slips a Second Day in New York on U.S. Jobless Claims

Oil trimmed its second weekly gain in London after U.S. Federal Reserve officials signaled the winding down of a stimulus program this year, raising concern the economic recovery may falter in the world’s biggest crude user.

Brent futures dropped as much as 1.3 percent, trimming its weekly increase to 0.2 percent. Members of the Federal Open Market Committee said they will probably end their $85 billion monthly bond purchases sometime in 2013, according to minutes of its latest meeting released yesterday. The U.S. unemployment rate may have held at 7.7 percent, the lowest since December 2008, according to the median forecast of economists surveyed by Bloomberg ahead of a Labor Department report today.

OPEC oil output falls in Dec, lowest in a year-survey

LONDON (Reuters) - OPEC oil output fell in December to its lowest in more than a year as Iranian exports dipped again because of sanctions, top exporter Saudi Arabia cut output and supplies from Iraq eased, according to a Reuters survey.

Crude supply from the Organization of the Petroleum Exporting Countries averaged 30.62 million barrels per day (bpd), down from a revised 30.71 million bpd in November, the survey of sources at oil companies, in OPEC and consultancies found.

OPEC to Cut Crude Exports on Demand Trough, Oil Movements Says

The Organization of Petroleum Exporting Countries will cut crude shipments this month by 1 percent as demand tapers off after peaking for the northern hemisphere winter, according to tanker tracker Oil Movements.

The group that supplies about 40 percent of the world’s oil will export 24.02 million barrels a day in the four weeks to Jan. 19, down 250,000 barrels from the previous period, the researcher said today in an e-mailed report. The figures exclude Angola and Ecuador.

Brazil oil output slips for 8th month in November

BRASILIA (Reuters) - Brazil's output of oil and natural gas fell for the eighth straight month in November, with maintenance of offshore oil platforms run by Petrobras limiting production, the country's oil regulator said on Thursday.

Alaska December Crude Output Down 6.5 Percent From Year Earlier

Oil production from Alaska’s North Slope slid 6.5 percent in December from a year earlier as output from existing wells shrinks and isn’t matched by new additions.

Production averaged 582,150 barrels a day last month, down from 622,355 barrels in December 2011, the state tax division said on its website. Output was up from 581,938 barrels a day in November.

UAE oil storage terminal set to start ops in 2014

An oil storage terminal being built in the UAE port of Fujairah by Singapore-based Concord Energy and a subsidiary of China's Sinopec is expected to start operations by late next year, Concord Energy said on Friday.

Asia's strong oil and oil products demand have prompted many oil producers and trading houses such as Litasco, Noble Group and Azeri SOCAR to secure oil storage rights in the Gulf region.

South Korea Cites Bias in Move to Ban Japanese Ship Lines

South Korea’s government is moving to bar foreign shipping lines from contracts in the state-run energy sector as it supports domestic companies struggling to recover from the global downturn.

Intercontinental Has Record 2012 After Changing Swaps to Futures

Intercontinental Exchange Inc., which agreed last month to buy NYSE Euronext, reported record volume for 2012 after it converted energy swaps to futures contracts.

Petrobras Losing on Record Gas Use for Power

Petroleo Brasileiro SA, Brazil’s state-run energy company, is selling at a loss record amounts of natural gas for electricity generation as hydropower dams operate at the lowest water levels in more than a decade.

Petrobras, as the company is known, increased imports of the fossil fuel to 11.9 billion cubic meters (420 billion cubic feet) last year through November, the most for any year since at least 2000, when Brazil’s oil regulator started keeping records. Petrobras may be losing 240 million reais ($117 million) a month by selling imported liquefied natural gas, or LNG, at a discount of about $6 per million British thermal unit, said Marco Tavares, chairman of research firm Gas Energy.

Grocery prices are predicted to rise in 2013

Expect to pay more this year for milk, eggs, beef, poultry and pork.

The U.S. Department of Agriculture Economic Research Service predicts a 3 to 4 percent increase in costs for these items in 2013 largely because of the severe drought in the Midwest last year.

Chavez still suffering ‘severe’ respiratory infection

CARACAS — Venezuelan President Hugo Chavez is still suffering a "severe" respiratory infection that has hindered his breathing as he struggles to recover from cancer surgery in Cuba, the government said on Thursday.

What Peak Oil Has to Do With the Future of Meetings

“Some say we have reached peak oil; some predict it will be in the next five to 15 years,” she says. “Oil will become a scarce resource. It will be more expensive, and this will have a huge impact on travel and manufacturing. All of our plastics come from oil, too. So a rethink on raw materials in the future will be necessary.”

Because travel will be so much more expensive (“the golden age of budget travel is over,” says Flatters of Trajectory), the focus on meeting costs will intensify. “Pressures on costs will remain prominent for businesses in the meeting industry,” says Dr. Rhodri Thomas, director of the International Centre for Research in Events, Tourism and Hospitality at Leeds Metropolitan University. “It will simply become more expensive for people to meet. Meetings will continue, but it creates a pressure for organizations to look at cutting costs in other ways.”

Peak oil video is a must

On New Year’s Day, I received an email with an attached video entitled “There’s No Tomorrow.” It’s about a half-hour long and explains how our planet is being exploited by the rich and powerful with assistance from governments around the world.

It also illustrates how this exploitation will be complete around the middle of this century when the vast majority of carbon-based resources will have been depleted. At that point, the world’s population is expected to be around 9 billion and life on Earth will be an utter nightmare.

Taqa signs $12bn coal plant deal with Turkey

Abu Dhabi plans to develop coal-fired power plants across Turkey at a cost of up to US$12 billion (Dh44.08bn).

The UAE and Turkey signed an agreement yesterday that will see the Abu Dhabi National Energy Company, known as Taqa, spearhead the massive project.

The unwelcome renaissance: Europe’s energy policy delivers the worst of all possible worlds

WHILE coal production and use plummet in America, in Europe “we have some kind of golden age of coal,” says Anne-Sophie Corbeau of the International Energy Agency. The amount of electricity generated from coal is rising at annualised rates of as much as 50% in some European countries. Since coal is by the far the most polluting source of electricity, with more greenhouse gas produced per kilowatt hour than any other fossil fuel, this is making a mockery of European environmental aspirations. How did it happen?

Damage, flooding on grounded Shell oil rig but no spill

(Reuters) - A Shell oil drilling rig grounded off an Alaska island since a New Years Eve storm has suffered damage from waves and flooding but has spilled none of the 155,000 gallons of fuel and other oil products aboard, officials managing the incident said on Thursday.

Salvage experts were flown to the stricken Kulluk drillship on Wednesday and Thursday, which remains upright and stable not far from Kodiak Island, officials said at a news conference.

Did Alaska Tax Liability Play Role in Shell Oil's Drill Rig Fiasco?

Hopes of avoiding millions in state taxes may have faded for Royal Dutch Shell when the clock struck midnight on Jan. 1 and 2012 became 2013. Just hours earlier, its Arctic drill rig, the Kulluk, had grounded on an island in the Gulf of Alaska, exposing Shell to a unique Alaska property tax on equipment dedicated to oil and gas development and exploration.

If the rig had been just three miles from state shores, the tax could have been avoided. Instead, because the vessel had found its way back to Alaska just in time to ring in the new year, the company's hopes for good weather and a quick run to port in another state were dashed in the worst possible way.

Rig Owner Will Settle With U.S. in Gulf Spill

The driller whose floating Deepwater Horizon oil rig blew out in 2010, causing a massive oil spill, has agreed to settle civil and criminal claims with the federal government for $1.4 billion, the Justice Department announced Thursday.

Transocean’s $1.4B settlement with Justice Department to pump millions into recovery projects

NEW ORLEANS — A $1.4 billion settlement between the Justice Department and Deepwater Horizon rig owner Transocean Ltd. will pump hundreds of millions of dollars into projects designed to help the Gulf Coast recover from the nation’s largest offshore oil spill.

Together a Century, City and Oil Giant Hit a Rough Patch

Chevron has spent millions in recent years trying to shore up its relationship with Richmond, Calif., but many residents still oppose the company’s efforts to repair a refinery hit by a fire.

Gas Drilling Is Called Safe in New York

ALBANY — The state’s Health Department found in an analysis it prepared early last year that the much-debated drilling technology known as hydrofracking could be conducted safely in New York, according to a copy obtained by The New York Times from an expert who did not believe it should be kept secret.

Bans and Rules Muddy Prospects for Gas Drilling

In three decades of drilling, John C. Holko said, his oil and gas business has never faced such a hostile environment.

Years after he negotiated leases for gas drilling in upstate New York, strict rules on hydraulic fracturing that state environmental officials proposed threaten to put 20 percent of that land off limits, he estimated. And local drilling bans adopted by town boards could put him out of business altogether, he said.

Fracker Ad Clashes on Screen With Damon’s ‘Promised Land’

Before many Pennsylvania movie-goers settle in for Matt Damon’s film about the fight over natural gas drilling, they will see a message from the energy industry offering “straightforward facts” about hydraulic fracturing.

The unorthodox, on-screen pre-buttal of “Promised Land,” which opens nationwide today, is part of an industry campaign aimed at heading off criticism about the process, also called fracking. Instead of direct attacks, which the industry used against the documentary “Gasland,” they have described Damon’s movie as derivative, boring, condescending and cliched.

Rail Traffic Declines To Start 2013

The first reading on rail traffic showed a modest decline to -0.1%. The beginning of the year is usually a volatile period for rail traffic trends, so it’s better to take a bit longer view here. The 12-month moving average remains modestly positive at 2.23%. That’s consistent with an economy that is expanding, but still muddling through.

Chevy Volt sales triple

Chevy Volt sales are cranking up. General Motors sold three times as many Chevrolet Volts in 2012 as it did in 2011, which was the car's first full year on the market.

Are high-mpg gas cars better than hybrids?

As gas prices fluctuate between $3 and $4, car buyers continue to seek relief at the pump by focusing on cars with high fuel-efficiency. But unlike in recent years, in which hybrids were considered the best bets for consumers wanting high fuel economy, auto observers are now saying gas-powered vehicles may now be the biggest bang for the buck.

Across the board, car companies are making their high-mpg gas cars faster and more powerful, which makes them more attractive than their counterparts from a few years ago.

The Wind Industry Gets to Draw Another Breath

In the last-minute tax maneuvering in Congress this week, wind power came out well.

Wind not only got an extension of its tax credit in the federal budget compromise, but the rules were also restructured: while the extension runs for only one year, the nature of the deadline has changed. Projects do not need to be finished and feeding electricity to the grid by next New Year’s Eve; construction only needs to be started.

Congress Renews Credit for Biodiesel Industry

The Congressional budget deal brokered this week kept tax breaks in place for a variety of industries, but biodiesel got something even better: a retroactive reinstatement of a dollar-a-gallon credit going back to January 2012, when it lapsed.

The Reluctant Composter

When your children repeatedly beg you to compost, your options are limited. After all, “No, because Mommy and Daddy don’t care about preserving the Earth for you, your children and your children’s children,” is not the message most parents are trying to send.

The time to compost had come.

Mississippi Seen Navigable Until Jan. 26 as Rocks Removed

The drought-depleted Mississippi River will remain safe for barge traffic at least for the next week and possibly until Jan. 26, as the U.S. Army Corps of Engineers makes progress in removing submerged rocks.

Mike Petersen, a Corps spokesman, said water levels near the so-called rock pinnacles at Thebes in southern Illinois will remain above 10 feet through Jan. 10. Expedited work to remove the obstacles will add an additional two feet of depth to the channel by Jan. 11, he said yesterday in an interview.

Cost of combating climate change surges as world delays - study

(Reuters) - An agreement by almost 200 nations to curb rising greenhouse gas emissions from 2020 will be far more costly than taking action now to tackle climate change, according to research published on Wednesday.

Here are two articles that together paint an interesting picture for KSA this year:

Saudi GDP growth to fall in 2013

Saudi Arabia’s economy recorded one of its best periods in 2012 when it surged by 6.8 per cent but growth is expected to dive by more than 50 per cent despite the approval of a record high budget, according to a key Saudi investment firm.

The Riyadh-based Jadwa Investments said Saudi Arabia, the largest Arab economy and world’s top oil exporter, could overshoot spending again this year but growth would not be as high as last year since the country sees oil production at around 9.6 million barrels per day, slightly lower than in 2012.

Saudi Arabia Sets Record Budget for 2013

The government plans to spend SAR820 billion ($219 billion) in 2013, Finance Minister Ibrahim Alassaf said as he presented the budget to King Abdullah on Saturday.

That amount is 19 per cent higher than the SAR690 billion that the world’s largest oil exporter budgeted for 2012. It is slightly below the estimated SAR853 billion that the government actually spent this year, but analysts said actual spending was on track to continue climbing in 2013.

So GDP is expected to drop by 50% in 2013 while government spending increases by 19% over 2012. Clearly, KSA has a huge incentive to maximize oil production since oil production accounts for 80% of government revenues.

Yet, oil production is expected, at least by some, to average around 9.5 mbpd.

As Ron's recent graph shows, since 2005 9.5 mbpd was the upper limit of KSA production until early 2011 when the Arab Spring and Iran sanctions prompted them to increase production. They are now falling back to around the 9.5 mbpd level, it appears, and if that's true I would suggest that that 9.5 mbpd is their true long term production limit that they were able to exceed temporarily. Why else would they be dropping back to that level when they have every reason in the world to maximize oil revenue? And if their economic growth does drop by half this year, what does that portend for social stability in the kingdom? Some will say that KSA is cutting back voluntarily to maintain oil prices, but can they really afford to cut back when they need every dollar of revenue? Of course, nobody outside KSA knows, and only time will tell. But the only answer that makes sense to me is they have no choice.

(Ron, if I am misinterpreting your graph please correct me.)

No, I think you have a pretty good handle on things. The chart has the last data point as October with Saudi production at 9,721,000 barrels per day. The December OPEC MOMR is out with the November data. It has Saudi down another 48,000 barrels per day at 9,673,000 barrels per day. And the link up top: OPEC oil output falls in Dec, lowest in a year-survey says Saudi is down even further in December:

The survey indicates Saudi Arabia trimmed output in the last two months of 2012 in response to lower demand, helping to bring OPEC supply the closest it has yet been to its 30 million bpd output target since it was set a year ago.

Ever notice how Saudi either "trimms" or "cuts" its output, it never just "falls"? Obviously when Saudi output drops it is always on purpose, never for any other reason.

All that being said, I think Saudi is a lot more stable than a lot of people realize. I don't think they are about to have an "Arab Spring" uprising any time soon. However I could be wrong but the point is, having a relative there, I keep close tabs on the situation and they look remarkably stable... so far anyway.

Ron P.

Ron P... glad you posted this morning. I had a question about Thunderhorse oil production. You had made a comment a few days ago that Thunderhorse had a peak of oil production at 242,000+ barrels a day in Sep 2009 and at last count was only producing 20,144 barrels a day in Sep 2012. Is this correct?

If so, Thunderhorse is producing less than a tenth of its peak production. With this sort of decline rate, I wonder how long they can keep producing oil and remain commercially viable. It doesn't seem like Thunderhorse will be in operation for 21 more years as it was originally forecasted.

Yes, but there may be an error in my data. Jean Laherrere sent me the below graph that shows Thunder Horse September production at 28,000 barrels per day.

I found at this site: Deepwater Natural Gas and Oil Discoveries and Fields lease number G09868 listed for both Thunder Horse and North Thunder Horse. Apparently that is North Thunder Horse and I left out one for Thunder Horse main. I will correct that error and correct everything but it will likely be tomorrow before I fix the problem as I am booked heavily today.


Ron P.

Ron P... I see what you mean. I went back and took a look at the new Oct figures for each lease in N. Thunderhorse & Main Thunderhorse:

Total Barrels Oct 2012

G09866 = 164,899
G09867 = 7,437
G09868 = 230,576
G19997 = 141,796
G21778 = 141,566
G14658 = 172,203

Total = 858,277 / 31 days = 27,686 bd

Now, I don't know if the G09867 lease has listed all the oil production for October, but it looks very close to Jean's 28,000 bd Sep 2012 figure.

I look forward to your update either tomorrow or when ever.


I think I have it fixed now. Here is the latest, through October. Jean's chart is through September. But there was little change from September to October.

Thunder Horse production in barrels per day.


Ron P.

I hate to ask for projections...but how long do you think thunderhorse has a major player?

Thunder Horse is not a major player today. What Thunder Horse, Jack 2, and other GOM plays, along with Brazil Pre-Salt is showing is that Deep Water plays will not be a major player as Peak Oil plays out over the next few years. Their combined effect has been to delay the peak by only a year or so.

What no one knew, at first, was the very steep decline rates of the deep water reservoirs. Thunder Horse now has a decline rate of above 30% per year. The other deep water GOM reservoirs are not a lot better.

Ron P.

This has to be one of the great oil company clusterf**ks of all time. That's around a 50% YOY exponential decline in oil production since Sept 2010, and the water cut is approaching 50% - and BP has put billions of dollars into developing the field. When its production numbers started to look funny a couple of years ago, I could only say, "It shouldn't really be doing that", but at this point in time I would say the Fat Lady is walking out onto the field and the audience is singing, "Na Na Hey Hey (Kiss It Goodbye)". I doubt BP will get another two years out of this field, never mind another 21 years.

I don't think we will get any straight answers out of BP personnel on what went wrong, and I hope they all are polishing up their resumes. That's what HR told us at Amoco long before the BP takeover - always keep your resume up to date because you never know when you'll need it.

Between this and the Macondo blowout, it is questionable whether BP itself will be around 2 years from now. It might be taken over by a less accident-prone giant multinational. Fire the top management and half the staff, that's the routine (speaking from experience.)

Apparently the problem is extremely high vertical perm. When the early severe production decline started showing up, an industry source told me about it. I forwarded the info to a reporter who wrote a story about it. BP was, shall we say, less than pleased about the reporter's inquiry. I told the reporter that he (and his questions about Thunderhorse) were as about as welcome as a skunk at the BP company picnic.

What exactly is "extremely high vertical perm?" Thanks.

The permeability (and porosity) of the reservoir is not necessarily uniform in all directions. (Hence it is common to test the porosity & permeability of core samples in horizontal and vertical directions on any core samples taken.) If the reservoir were to exhibit a high vertical permeability relative to the horizontal permeability then there is the chance that the predominant fluid flow would be in that direction. The result is that you may get coning of the oil/water contact up around the well bores and start producing water a lot sooner in the field's life-cycle than was planned.

Interesting. So did they screw up with the cores or something? Or were they just hoping it wouldn't be as bad as it is?

Leanan - We can produce a high perm reservoir without severe coning. But that requires producing at a relatively slow rate. I don't know it for a fact in the case of Thunderhorse but I've seen many cases of 'premature water production' resulting from pulling a well too hard. What makes the dynamic worse is that the ability of a reservoir to flow oil and water is also a function of the saturation of that liquid. That's why it's called relative permeability...relative to the saturation. A well may be flowing 100% oil but the pores in the rock may contain 20 - 30% water. But at that low sat the perm to water is zero: it won't move. But cone a well and you can increase the water sat around the well bore high enough that the perm to water shoots up. Even worse is that the increased water sat obviously reduces the oil sat so perm to oil decrease. Then you have to pull the well even harder to keep the oil rate up. And that causes even worse coning.

And once you've increased the water sat around the well bore just cutting back the flow rate won't usually lower the water cut. There are chemical treatments that can be pumped into the reservoir to try to fix the problem. But I've rarely seen them change the dynamics very much...often not at all. As a result of coning only a smaller percentage of the oil that would have moved towards to that well bore (the "oil sweep"). So the URR projected won't be achieved. In many cases the only fix is to abandon that well and drill a new one some distance away where you haven't coned the water up. But that can be very difficult/expensive/impossible in a DW situation like Thunderhorse. Another problem is that the oil/water separation equipment on a platform is sized according to the time frame when you originally expected water to increase. Bring the water in prematurely and you may quickly exceed you separation capability. And with the limited space on an offshore platform adding more separation isn't easy/fast/cheap.

Coning can bring on other problems besides high water cut. If the reservoir isn't very well consolidated the sand can actually start moving into the production tubing. Imagine making a sand pile of a table top vs. at the bottom of a pool: you'll never build the wet pile as high as the dry pile...the sand actually "flows". Sand production can damage surface production equipment. If the volume gets too high it can completely plug the tubing and kill the flow entirely.

If anyone needs to enhance their oil-field vocabulary; here is the source for an oilfield dictionary.


RM: Lots of good stuff in that/your comment/comments.

Even if you properly measure the core (presumably you have this from when you drilled?), what if the properties change laterally fast enough to be significant. So you derive some sort of production shedule that works assuming the rock proerties don't change laterally, then the earth says Gotcha!

As I have observed before, the earth is full of surprises. Sometimes good surprises, but quite often not so good.

All these comments are valid. Reservoir modelling is a complex subject and includes variables of porosity & permeability (as mentioned), production ('flow') rate influences (also mentioned) and of course the integrity of the matrix (sand influx - see above). We have not mentioned secondary porosity (fractures - natural or otherwise - in the mix) which are all classic variables in the eventual well performance. Whatever, the reservoir engineer must juggle a heady brew. And based on a narrow survey sample (the well bore, plus some lower resolution seismic). BP will have some of the best engineers in the business. However, the sample they work from is always limited and as a result there will always be fields that cannot be fully understood in advance.

I strongly suspect (though I can't prove it) that there is a tendency these days to drill fewer delineation wells before committing to a development plan. This is partly because of the high cost of drilling in deepwanter/arctic/ultradeep etc areas. Also partly because the improvements in seismic imaging and reservoir modeling has led us to believe we are smarter than we really are.

For all: There’s also another potential unpleasant reality in how a field is produced: decisions based upon goals and not the circumstances. Can’t know for sure but as mentioned the models can vary significantly depending on whether optimistic or pessimistic estimates are made. Many times I’ve seen the most optimistic parameters used not because they were believed to be good estimates but because they generated numbers closer to the goal management has set. I’ve seen more than a few wells destroyed this way.

Along those same lines not all models lead to the same answers. I have a software package that models coning. Even for the same set of assumptions the model output can vary greatly. The software doesn’t just create one answer. There are 6 different models developed by engineers a whole lot smarter than me. Thus instead of one projected production curve vs. coning I see 6 plotted. And the range between the extremes can be significant…on the order of 50%. So one curve says I can do 800 bopd without premature water production and another saying my limit is 400 bopd. So which calculation do you use? The 6 different modelers are all experts in the field. So who’s correct? In reality all 6 might be correct but for different reservoirs. IOW Model A might be accurate for Reservoir X but misses the mark for Reservoir Y. And Model B may do just the opposite. What one does is take the established production history of a particular reservoir and run all 6 models and then curve fit to see which one better matches the actual production. A good approach if you have that data…but often you don’t.

So back to Thunderhorse: did management go with an overly optimistic model because they believed that model or did they choose to believe the model that predicted higher sustainable flow rates? Don’t know in the case of Thunderhorse but based upon how much they missed their projection something very wrong must have been in play.

And once again I’ll leave you with my rather crass but heartfelt opinion of folks who readily accept an answer because it came out of a computer: modeling is a lot like masturbating…it’s OK as long as you don’t start believing it’s the real thing. A real example from a year ago: a YOUNG Halliburton log analyst calculated a zone in my well would produce water. When I told him the well flowed 400 bopd with no water he said “well yeah but the software said it would produce only water”. And the tone in his voice indicated a rather defensive position on the subject. It took a while to get him to understand what was wrong: his log analysis software was valid. But a major reservoir parameter in the calculation was measured incorrectly by the logging tool. A rather unique physical condition caused the false reading. His problem wasn’t bad software but accepting an invalid input. In this case because 2 + 2 didn’t equal 4 because one of those 2’s was actually 35. He didn’t know that. The majority of geologists wouldn’t know it either. But I’ve seen this example of Mother Earth screwing with us: An operator plugged a well and walked away because they didn’t understand the situation just like that Halliburton hand. But another company did: they twinned that plugged hole and put the well on for 3,000 bopd and recovered 3 million bo from the reservoir. Mother does enjoy a good joke from time to time.

BTW I had to explain the situation to a geologist with the La. DNR. His boss thought we were trying to run some sort of a scam. When he looked at the log and saw the production I reported he knew it couldn’t be correct. Now there’s at least one geologist working for the state that understands “low resistivity oil pay”. And noI don’t educate other geologists about this phenomenon. Ignorance is bliss in this case: their ignorance is my potential bliss. LOL.

For geo et al: the sand had a R of 0.3 o/m. The low R was caused by authogenic iron rich chlorite coating the sand grains. All it took was xray diffraction and SEM to realize what was going on. But I would not have done that detailed analysis had there not been a big mud log oil show through the zone. My owner was very impressed with how smart I was. In reality it wasn't so much smarts but just experience with such situations. That might have been BP's problem: some really smart hands that didn't have a lot of experience with DW reservoirs.

I think it's also worth keeping SA's exports in mind. From the Export Data Browser (http://mazamascience.com/OilExport/) one can see that SA's exports have been pretty flat since about 2005 with a bit of a drop during the height of the recession. Laid on top of this, production has increased a little bit.

Also, I think their production goes up a bit in the summer to cover their air conditioning use. Once summer is over, they seem to drop their production but still pretty much maintain their exports. It's probably more complicated than this but surely their internal seasonal demand must figure into their plans.

Hey, let us not forget that since 2005 Saudi has brought over 3 million barrels per day of new production on line. Oil Megaprojects Now they have Manifa coming on line in late 2014 and that's it. No more biggies coming down the pike for Saudi.

Ron P.

No more biggies coming down the pike for Saudi

Perhaps, but it's hard to know what they have and what they can do. I still find the interview of Henry Groppe by David Strahan in 2007 to be worth considering. Here are a few excerpts from it:

David Strahan:[You think] that the Saudi has not yet peaked - geologically speaking - what do you forecast for Saudi production over the next few years?

Henry Groppe: Our analysis has been that the Saudis, I think, in a very sound fashion developed a long-term business plan many, many years ago - a goal of producing from 8 to 9.5 million barrels a day of oil for the foreseeable future. And their reasoning was that that was something that they could expect to accomplish - considering not only the resource base, but also all of the required infrastructure, the capital investment, the technology, the personnel - recognizing that as their production declines in the big oil fields, like Ghawar, and so on, they have to replace it from other, smaller, more difficult to develop and manage fields, they will be having to use more of all of this per barrel produced. . . .

DS: Many people are, nevertheless, still pretty bearish about Saudi oil production prospects. What do you think they're going to do in the next few years - when and how long can they maintain that production do you think?

HG: Since they are the incremental producer of the world - everybody else in the world is producing at - essentially - at capacity - they have been very intent on creating some cushion above this 8 to 9.5 million barrel a day production goal range. . . . I would expect them to be able to do that [8-9.5 million barrel a day] for the next 15 to 20 years - beyond that we don't know enough yet.

DS: You seem to have a fairly confident, fairly bullish outlook on Saudi Arabian production, whereas many people are very suspicious of the claimed reserves. How can you be so sure in your view, given those doubts?

HG: We've analyzed the work of some of the people with the greatest doubts, and we don't find it to be very deeply rooted in long - real factual analysis of reserve data. . . . one of my youngest partners left after 14 years with me, four and a half years ago, and has been working there in long range planning for significant parts of their business. And he comes back to visit regularly. We have visited Saudi Arabia regularly for 50 years, and we've found no significant departure from [the]use of Exxon standards. Furthermore, they contracted with Core Laboratories, beginning about four years ago, to do probably the most extensive field reservoir analysis that they'd ever done for any company for any field in the world, and they're the world's eminent laboratory, consulting, reservoir and reserve evaluation company. And they came up with a very different conclusion from these views that they're going to have trouble maintaining production, and production through Ghawar is on the verge of imminent collapse. So, I have much more confidence in all that than I do in any kind of outside analyses based on much, much more superficial data than all of those evaluations. Plus, I maintain my relationships with the key people who work there, who ran the business, who are still in constant communication with the Saudis, still have very close relationships, and most of them share the view that I've just expressed.

And in case anyone thinks that Mr. Groppe is just another cornucopian, the interview continues:

DS: So, you're pretty confident about Saudi Arabia's ability to maintain its production for the next 10 or 15 years - does that mean that global peak oil can be put off for that long as well?

HG: Not at all. The system we're operating under is that production will be declining in all of the rest of the world. The Saudis have the ability to maintain a relatively constant level of 8 to 9.5 million barrels a day. So, they, therefore, will manage this incremental supply to achieve a price which constrains total consumption to match whatever the production is at that price in all the rest of the world, declining, plus 8 to 9.5 million barrels a day.

The rest of the interview is interesting as well and can be found here:


The average Saudi production rate for 2006 to 2011 inclusive was 10.5 mbpd (BP, total petroleum liquids*). Saudi consumption rose at 6.2%/year from 2005 to 2011, hitting 2.9 mbpd in 2011.

If we assume a flat total petroleum liquids production rate of 10.5 mbpd, at the current rate of increase in consumption Saudi Arabia would hit zero net oil exports in about 20 years. But of course, net export declines tend to be front-end loaded, with the bulk of Cumulative Net Exports (CNE) being shipped early in the decline phase of a net export decline. IMO, Saudi Arabia will never again exceed, in any subsequent six year period, the volume of cumulative net exports that they shipped from 2006 to 2011 inclusive.

*Of course Groppe appears to be talking about crude oil

Interesting interview. On the other hand, early in 2010 Groppe also called for $8 natural gas by the end of the year and continue upward from there. The guy doesn't have a perfect record.

2002 to 2011 Saudi Net Oil Exports (BP, total petroleum liquids):

2002: 7.2 mbpd
2003: 8.3
2004: 8.7
2005: 9.1
2006: 8.7
2007: 8.2
2008: 8.4
2009: 7.3
2010: 7.2
2011: 8.3

As global (Brent) crude oil prices doubled from $25 in 2002 to $55 in 2005, Saudi net oil exports increased at 7.8%/year, from 2002 to 2005.

As global (Brent) crude oil prices doubled from $55 in 2005 to $111 in 2011 (with one year over year decline, in 2009), Saudi net exports fell at 1.5%/year, from 2005 to 2011.

As noted below, I estimate that Saudi Arabia, through 2011, may have already shipped more than one-third of their total post-2005 CNE (Cumulative Net Exports).

Here's an eye-opening video that graphically depicts the scale of effort Saudi Arabia is making to get the oil out of the ground.

From Qurayyah to Khurais

Boggles my mind.

growth is expected to dive by more than 50 per cent

is not the same as

GDP is expected to drop by 50% in 2013

it seems they mean that growth would be 3.4% in 2013

Thanks for the correction. GDP is not expected to drop, GDP growth is. Even so, not good news. I agree with Ron that KSA is rather stable, but that stability seems to be built on a combination of bribes and threats of violent repression. KSA's quick response of promising bigger government hand outs during the Arab Spring, in my opinion, does not speak to a high level of comfort there.

I highly recommend “On Saudi Arabia,” by Karen Elliott House. It starts off a little slowly, but the latter chapters are excellent.


From the Pulitzer Prize–winning reporter who has spent the last thirty years writing about Saudi Arabia—as diplomatic correspondent, foreign editor, and then publisher of The Wall Street Journal—an important and timely book that explores all facets of life in this shrouded Kingdom: its tribal past, its complicated present, its precarious future.

Through observation, anecdote, extensive interviews, and analysis Karen Elliot House navigates the maze in which Saudi citizens find themselves trapped and reveals the mysterious nation that is the world’s largest exporter of oil, critical to global stability, and a source of Islamic terrorists.

In her probing and sharp-eyed portrait, we see Saudi Arabia, one of the last absolute monarchies in the world, considered to be the final bulwark against revolution in the region, as threatened by multiple fissures and forces, its levers of power controlled by a handful of elderly Al Saud princes with an average age of 77 years and an extended family of some 7,000 princes. Yet at least 60 percent of the increasingly restive population they rule is under the age of 20. The author writes that oil-rich Saudi Arabia has become a rundown welfare state. The public pays no taxes; gets free education and health care; and receives subsidized water, electricity, and energy (a gallon of gasoline is cheaper in the Kingdom than a bottle of water), with its petrodollars buying less and less loyalty. House makes clear that the royal family also uses Islam’s requirement of obedience to Allah—and by extension to earthly rulers—to perpetuate Al Saud rule.

Behind the Saudi facade of order and obedience, today’s Saudi youth, frustrated by social conformity, are reaching out to one another and to a wider world beyond their cloistered country. Some 50 percent of Saudi youth is on the Internet; 5.1 million Saudis are on Facebook . . .

In House’s assessment of Saudi Arabia’s future, she compares the country today to the Soviet Union before Mikhail Gorbachev arrived with reform policies that proved too little too late after decades of stagnation under one aged and infirm Soviet leader after another. She discusses what the next generation of royal princes might bring and the choices the kingdom faces: continued economic and social stultification with growing risk of instability, or an opening of society to individual initiative and enterprise with the risk that this, too, undermines the Al Saud hold on power.

Regarding Saudi Net Oil Exports:

Net Export Math Explained in Two Charts

The ECI ratio, which is simply the ratio of total petroleum liquids production to liquids consumption, gives us a measure of how much net export capacity a given oil exporting country has. 

The rate of change in the ECI ratio, given a multiyear decline in the ratio (and absent exogenous effects on production such as political unrest, e.g., Russia in the early 1990’s, and clearly voluntary reductions in production, e.g., Saudi Arabia in the early 1980’s), appears to provide us with a reasonable estimate of when a given oil exporting country might approach zero net exports.  Furthermore, some simple math allows us to estimate remaining Cumulative Net Exports (CNE).

The GNE/CNI ratio, which is the ratio of Global Net Exports of oil (GNE) to Chindia’s Net Imports (CNI) is very similar to the ECI ratio.

The following chart shows normalized ECI values for the Six Country Case History* (with 1995, the Index Year,  = 100%) and normalized ECI values for GNE and for Saudi net exports (with 2005, the Index Year,  = 100%).  Also shown are normalized GNE/CNI values (with 2005, the Index Year, = 100%).


The index years (Year One on the graphs), 1995 for the Six Country Case History, and 2005 for Saudi and global data, were inflection points, when production and net exports virtually stopped increasing, or peaked. 

The next chart shows estimated Post-Index Year Remaining CNE (Cumulative Net Exports), by year, for the Six Country Case History, For Global Net Exports, For Saudi Arabia and for Available Net Exports.   The estimates are based on extrapolating the six year rates of decline following the Index Years, i.e., the production/net export inflection points.


At the end of 2001, estimated remaining post-1995 CNE for the Six Country Case History were down to 39%.  The actual value at the end of 2001 was 25%.

At the end of 2011, estimated remaining post-2005 CNE for Saudi Arabia were down to 62%.

At the end of 2011, estimated remaining post-2005 Global CNE for were down to 78%.

At the end of 2011, estimated remaining post-2005 Available CNE for were down to 52%.  In other words, based on extrapolating the 2005 to 2011 rate of decline in the GNE/CNI ratio, at the end of 2011 the estimated total post-2005 cumulative volume of Global Net Exports of oil that will be available to about 153 net oil importing countries was down by about half.

*Six Country Case History: Indonesia, UK, Egypt, Vietnam, Argentina, Malaysia


Thanks for this tip, though I see that Thomas Lippman's 2012 book "Saudi Arabia on the Edge: The Uncertain Future of an American Ally" is getting much better reviews. I am embarrassed by my ignorance of Saudi Arabia.

The Reluctant Composter - On the earthworms one might wish to go look at the last decade worm "business" - B&B Worms. http://www.happydranch.com/articles/Worms_Turned_Disaster_for_Farmers.htm (Did you know that the IRS has rules which don't allow you to write off worm farming as a farm operation?)

Sounds like a business opportunity for someone. Earthworms are edible and are high in protein. If nothing else some fish farmers should be able to use them as feed. I guess the IRS probably wouldn't accept my ideas for a grasshopper or locust farm as farming either. Hopefully there will come a time when we can start over from scratch and put some sanity into our government's institution. Claiming that worm farming isn't farming makes no sense!

Claiming that worm farming isn't farming makes no sense!

About every 15 years someone comes up with a pyramid scheme for worm farming. The 1st big one was the 1970's and after that blew up the IRS rules got changed.

Besides the species of worm Eisenia fetida used in composting has the foetida for a reason - their colomic fluid is rather pungent. I remember having 0 success with fishing with such worms as a youth.

It sounds like the Kubus milk culture scheme in South Africa in the 1980s.

I know some people who were taken in by it. You purchased an envelope of "activator" and grew it in a glass of milk. You then dried the resulting culture and sent the powder back for payment. Supposedly the powder was used for beauty products.

But it was a Ponzi scheme. The money from new growers was used to pay off older growers. It was mainly rural Afrikaners who were taken in because the promoter was himself an Afrikaans-speaking farmer and they trusted him.

The scheme caught on like wildfire. Millions of rands were involved. People believed that they were entitled to a good profit because they were actually producing something rather than investing in some dubious venture. It was no good pointing out to them the promoter could have started a factory and kept all the profits for himself if it was a genuine business opportunity.

Iceland bets on oil to boost fragile economy

Iceland has oil? Like Hawaii, Iceland is completely made up of volcanic rock so there's definitely no oil onshore or in the nearby waters. Not sure how far into the ocean Iceland's economic zone extends. Maybe someone here can fill me in.

F - there are maps available here showing the offshore acreage of Iceland. It shares historical maritime boundaries with the equally unexplored offshore assets of Norway (including Jan Mayen island) to the north and the Faroe Islands (Denmark) to the southeast.


Earlier exploration off Greenland has so far come up with nothing tangible after several wells and about a billion dollars. However, this work has all been undertaken on the east coast of Greenland.


Hostile environment and a long way from any market.

However, this work has all been undertaken on the east coast of Greenland.

Actually, all the drilling so far has been off the west coast. Geologically, the east coast looks better. But the ice there doesn't.

My mistake - I meant the west! Too much looking at the 'other side' imprinted in my brain.

Iceland is a volcanic island that is split by the Mid-Atlantic Rift and the seafloor on the Iceland Plateau is all volcanic basalt. One would think that Iceland could probably claim the seafloor halfway to Greenland and halfway to the Faeroe Islands (both Danish possessions) but again the seafloor is all volcanic basalt. One would think it would be one of the least likely places on Earth to find oil.

It's always worthwhile to drill a few wells to make sure the geologists haven't missed anything, but I wouldn't hold my breath waiting for them to strike oil.

Here you can find information about the Dreki area they want to explore in Icelandic waters:


It´s continental crust similar to that in Norway.

That's very interesting. The Dreki prospect is part of the Jan Mayen Micro-Continent, which is believed to have been a fragment of the Norway-Greenland continental shelf which broke off when the Atlantic Ocean formed. Norway owns part of the micro-continent as a result of its ownership of Jan Mayen Island, but Iceland owns the other part.

As I said above, it's worth drilling it to see if there's anything there, but I wouldn't hold my breath waiting for a big oil strike. However, "big" is a relative concept and Iceland has only a bit over 300,000 people. Any oil strike would be big for them.

Iceland and Norway share the mineral rights in the majority of the Jan Mayen ridge, with each having a 25% stake on the others side.

People here have high hopes for striking oil, but as you say the might be very premature. The conditions for oil production are not exactly easy, at 1000+ meters depth in open ocean north of the arctic circle about 200 miles off the sparsely populated north east coast of Iceland. I imagine you would have to find quite a lot of oil for it to be viable to start production in a new area in these conditions.

"Fracker Ad Clashes on Screen With Damon’s ‘Promised Land’"

"Instead of direct attacks, which the industry used against the documentary “Gasland,” they have described Damon’s movie as derivative, boring, condescending and cliched."

Yes, that message has already been forwarded by the local rep:

"...I probably would have gone to see... But it appears to be a rather boring movie... As I've always said life is too short to drink bad wine or watch boring movies."


From the comments section:

The energy industry is pulling out all the stops to kill this movie. As reported in the Wall Street Journal, they are targeting film reviewers with their version of the "facts" and paying people on social media to attack the movie.

You obviously don't live near any of this or you wouldn't be so flippant.


It's not a documentary, it's a yarn. Interesting that a mere yarn would attract such an effort.

Fracking lobbyists prepare case against Matt Damon's Promised Land

"A leading lobby group, Energy in Depth, has put out a "cheat sheet" of pro-fracking talking points to counter any bad publicity that may arise following the release of the new Matt Damon film, Promised Land. The film, directed by Gus Van Sant, stars Damon as a gas company salesman who travels the dying towns of the American heartland, buying up drilling rights from struggling farmers."


What this movie really needs is flaming Cokes at the concession stand!

life is too short to drink bad wine

Bad wine is sometimes vinegar and if you happen to need vinegar it can be 'pricey' http://www.lavecchiadispensa.it/shop/index.php?lang=eng

watch boring movies

Considering he's in the business I'm guessing going to pay for what you get to see on a daily basis, I would expect it to be "boring".

eric - Hopefully I'm not mischaracterizing the movie since I'm just repeating what I've seen in the reviews: "Considering he's in the business I'm guessing going to pay for what you get to see on a daily basis, I would expect it to be "boring".". Heck no: if they had drill rigs, frac trucks and goofy geologists running around I would rush out to see it. But from what I've read there's not a bit of the mechanical side shown in the movie. Just landmen trying to hard trade for leases. Now that's boring. I've seen that in real time and it rates right up there with watching paint dry. LOL.

It can very amusing/frustrating watching Hollywood depict any activity that one knows about. For instance in "Armageddon" when the well comes in and is blowing oil up through the derrick and coating all the hands who were cheering and laughing. I'm pretty sure that wasn't the reaction of those hands who died when the Macondo well blew out. Hollywood apparent thinks oil blowing out of a well head and dripping into the ocean is a happy event. My engineer was a volunteer fireman for many years and couldn't stand the movie "Backdraft" because of all the errors only a fireman would catch.

Promised Land: Stellar cast, but the film is a fracking disappointment

The star power is deceiving, and the energy companies might be smarter to ignore the film than fan the controversy by attacking it. Promised Land is a low-budget effort, far too awkward and contrived a drama to change many hearts and minds. This film’s depth of insight into the practice of fracking is, literally, presented at a primary-school level: In one scene, an environmental activist does a demonstration to a first-grade class on how bad chemicals can hurt nice water and animals.

Two stars out of five. Just another Hollywood film which is better avoided in favor of reruns of "Dallas".

Link up top:
Alaska December Crude Output Down 6.5 Percent From Year Earlier

Oil production from Alaska’s North Slope slid 6.5 percent in December from a year earlier as output from existing wells shrinks and isn’t matched by new additions.

Production averaged 582,150 barrels a day last month, down from 622,355 barrels in December 2011, the state tax division said on its website.

Slowly but steadily heading towards the 350k bpd threshold for TAPS.

The 6.5% decline rate in Alaska production is real. However, the 350,000 bopd "threshold" fro TAPS is not. The actual threshold is somewhere around 100,000 bopd, perhaps lower. See A TAPS Bottom Line if you are actually interested.

Alaska , sometime this week you had given me the same reply on the MOL for TAPS . As far as my understanding goes from the posts on TOD, whereas 100000 Bopd may be the technical threshold(this is, as you indicated as per the statement filed by XOM to SEC),the economic threshold may well be 350000Bopd .Making false statements to SEC is standard practice so I would not be surprised . Why ? I don't know, but my guess is that they hope to persuade the administration to open ANWR by the time they get to the economic threshold and allow them an extra cushion of time to enable them continue operations in case they sense a delay in this opening of the ANWR to satisfy the regulatory authorities .Just a WAG. What is your take on this viewpoint?

Actually, I think the main reason that Alyeska and its owners (BP, Exxon, and ConocoPhillips) have been pushing the 350K bopd line is for reasons related to state production taxes. Former half term governor Sarah Palin pushed through a tax plan called ACES ("Alaska Clear and Equitable Share") which increased taxes on producting fields such as Prudhoe. Note that this was Palin v.1, "Drill Baby Drill" was Palin v.2 when she had become a national candidate.

The major oil companies have been fighting to overturn ACES ever since. Part of their campaign is to push the idea that oil is running out and that TAPS will shut down sometime in the near future if ACES isn't overturned. Their general line is more or less "...trust us, if you get rid of ACES we can increase production...." Of course they have never been very specific about how they will increase production, but have only offered a lot of blue sky and promises.

Note that to run TAPS at 100K bopd would require additional investment (heaters, etc). However, given that N Slope production is still quite profitable even with ACES, and the cost to decommision N Slope oil fields and TAPS, I am quite sure that it will be done. (Presuming of course that oil stays at or above its current prices.) In fact, I believe some of the preliminary steps to operate TAPS at lower flow rates are already being done (don't have the reference handy at the moment).

Absent additional major discoveries, Alaskan production will continue to decline. However, based on what I see, TAPS will continue to operate for a long time to come.

New from Congressional Research Service [CRS] …
Geoengineering: Governance and Technology Policy

…To date, there is limited federal involvement in, or oversight of, geoengineering. However, some states as well as some federal agencies, notably the Environmental Protection Agency, Department of Energy, Department of Agriculture, and the Department of Defense, have taken actions related to geoengineering research or projects.

If geoengineering technologies were to be deployed, they are expected to have the potential to cause significant transboundary effects.

With the possibility that geoengineering technologies may be developed and that climate change will remain an issue of global concern, policymakers may determine whether geoengineering warrants attention at either the federal or international level. If so, policymakers will also need to consider whether geoengineering can be effectively addressed by amendments to existing laws and international agreements or, alternatively, whether new laws and international treaties would need to be developed.

Is Biopower Carbon Neutral?

… If Congress considers a renewable electricity standard or other measures (e.g., farm bill energy programs) that include biopower, there may be concerns about the carbon neutrality of biopower. The premise that biopower is carbon neutral has come under scrutiny as its potential to help meet U.S. energy demands and reduce U.S. greenhouse gas emissions is more closely examined.

… an informative report

Funding and Financing Highways and Public Transportation

This report begins with a discussion of the problems associated with the trust fund financing system (which supports both federal highway and public transportation programs) and then explores possible options for financing surface transportation infrastructure. Among the key points:

- Raising motor fuel taxes could provide the highway trust fund with sufficient revenue to fully fund the program in the near term, but it may not be a viable long-term solution due to expected future declines in fuel consumption.
- Replacing current motor fuel taxes with a fuel sales tax or a fee based on vehicle miles traveled (VMT) raise a variety of financial and administrative concerns.
- The political difficulty of adequately financing the highway trust fund could lead Congress to consider the desirability of changes to maintain the trust fund system or eliminating it altogether. Such changes might involve a reallocation of responsibilities and obligations among federal, state, and local governments.
- Interest in improving transportation infrastructure with private and nontraditional funding sources, such as tolls, public-private partnerships (PPPs), and federal loan programs is increasing, but many projects may not be well suited to alternative financing.

The Protection of Lawful Commerce in Arms Act: An Overview of Limiting Tort Liability of Gun Manufacturers

International Corporate Tax Rate Comparisons and Policy Implications

Distributional Effects of Taxes on Corporate
Profits, Investment Income, and Estates

Tax Deductions for Individuals: A Summary

The Debt Limit: History and Recent Increases

I am very skeptical of these "public-private partnerships" of all sorts.
Generally the public puts in the money, while the plutocrat financiers make the profits
for awhile and then once the golden goose is killed by increased fees for expanding profits,
the public is left holding the bag.

Moreover in cases like the Tappan Zee Autos only new bridge fiasco proposed at taxpayers cost of $5 Billion, the reason against Green public transit is that it "makes less money".

For whom?
And for what purpose? Green Transit is a lot cheaper for both the government and the public as they do not need to spend $9300 a year for a private car. Maintenance is a lot less and of course the environmental damages from Auto Addiction are enormous in terms of land wasted, wasted resources, greenhouse emissions etc etc.

A valid form of public-private partnership from days of yore are traditional Main Streets.
The city government maintained Transit access and the Main Street business paid the taxes for increased access to their stores.

But when do these private toll-collectors ever pay their true costs?
They do not and their only skin in the game is to extract as much monopoly profit as possible.

New from GAO ...

Causes and Consequences of Recent Bank Failures

Between January 2008 and December 2011—a period of economic downturn in the United States—414 insured U.S. banks failed. Of these, 85 percent or 353 had less than $1 billion in assets. These small banks often specialize in small business lending and are associated with local community development and philanthropy. These small bank failures have raised questions about the contributing factors in the states with the most failures, including the possible role of local market conditions and the application of fair value accounting under U.S. accounting standards.

Ten states concentrated in the western, midwestern, and southeastern United States—all areas where the housing market had experienced strong growth in the prior decade—experienced 10 or more commercial bank or thrift (bank) failures between 2008 and 2011.

In many cases the cause was pretty simple -- the local bankers, real estate developers, construction company owners, and politicians cooked up some real estate development scheme that blew up 2008.

Loans to your golfing buddies are not necessarily a good idea.

Since Jan 1 2009: 229 of 434 bank failures were in 4 states.
Ga 79
Fl 64
Il 53
Ca 33
Next highest
Mn 20
Wa 16


Illinois is kind of surprising. FL and CA were hard hit by the mortgage crisis, and GA had very loose banking regulations that encouraged mass fraud. But IL? I'd have guessed AZ before IL.

And relative to the population size, CA is pretty small.

But these numbers are misleading because we basically threw money at all the big banks because we decided they were too big to fail. Lots of TARP money but that got lots of scrutiny & paid back. Most of the help came from the Fed sine the Fed bought a lot of their toxic-assets and the Fed has been giving them zero interest money for like 6 years now. Basically a massive stealth bail-out.

Are high-mpg gas cars better than hybrids?


When people can buy a midsize Camry or Fusion hybrid that gets 40 mpg for under $30,000 I don't see why anyone would buy an "econobox".

Because $30,000 will buy you a house in some places?

I don't spend much time driving. I wanted a cheap, durable car. I bought a Corolla.

Corolla is a popular car for good reasons, it does what it is suppose to do, is reliable and does not cost a lot. The new Ford Focus is set to become popular world wide for similar reasons. I don't consider Corolla nor Focus to be econo boxes, when people think of economy cars they generally think about doing without and being less than pleased.

If you can buy a house for $30K, it is probably not a very safe place to live.

Or a small town/rural area off the beaten path.

Consumer Reports Feb 2013 issue has an article on best new-car values. And they don't base value purely on the cost of the car. Therefore "econoboxes" are not necessarily "good value". They use a formula that takes into account "cost, benefit & risk." They state "The cars that are the best values are those that combine a low cost to operate, good reliability, and good performance in our tests."

In general, as most of us would suspect, small sedans are fairly good value whereas SUVs and luxury vehicles are not. However there are some rankings that might surprise some people.

They have a number of tables for the different size/types of vehicles and their value score.

Some highlights:

Top value for Small Hatchbacks is the Toyota Prius ($26,750) followed by Honda Fit ($16,915) with Ford Fiesta ($17,795) & Focus ($22,185) bringing up the rear.

Top value for Small Sedans is Toyota Corolla ($18,404) with the Nissan Versa ($15,490) at the bottom.

Top value for Family Sedans is Toyota Camry Hybrid ($29,052) followed by Camry non-hybrid 4-cyl ($23,830). In 9th place in this category is the 6-cyl Camry non-hybrid ($32,603).

Edmunds has a pretty cool True Cost to Own calculator:


Using pretty conservative fuel cost estimates, a new luxury Suburban SUV, with a V8, would cost about $75,000 to drive 75,000 miles over a five year period--right at a dollar per mile. A new Toyota Corolla would cost $34,000, or about 45¢ per mile.

You can buy a Corolla for less than $20k. For the additional $10+k you can send your kid to college for a year, buy 3,000 gallons of gas or save the money for a rainy day. Besides that, if you keep the car for ten years it will probably be worth more than the hybrid with exhausted batteries.

Unless you are a rich guy who can afford to take chances with your money simpler is better.

So far at least Prius resale prices have held up pretty well. IMO by the time batteries give out, the replacements should be much cheaper than the original battery cost.

One thing that I wish these types of articles would address is that they are really just making an educated guess. I'm sure we can dig up some cost estimates from 2005 that look mighty stupid now in view of the much more expensive price of oil & gasoline. No one knows what the interest rates, price of oil, and price of electricity will be a few years down the road. You make make a pretty good guess at the price of electricity since it tends to be quite stable due to the wide variety of energy sources (coal, wind, solar, natural gas, nukes, etc.) But the price of gas 5 or 7 years from now? $4/gallon? $7/gallon? Who knows?

"High MPG" gas cars still use a lot of gas = CO2 emissions. I got a Nissan Leaf which now has 14,000 miles on it and power it with 100% renewable energy purchased from my utility. It was about $22,500 after state and federal rebates. A lot cheaper to run, never have to go to gas station. I keep the 10 year old Camry for 5-6 long trips per year (total of 3,000-4,000 miles). The quicker we cut down on fossil fuel usage, the better (less bad?) for the climate.

Gee Stoaty you are the proverbial trooper..............
What have you done with the fuel you haven't burnt?
And I would assume that just like you, that more than 90% of EV owners have a second gas burner car.

I'm screaming now.......We are going nowhere until it gets through the thick skulls of all, that trying to keep the cake and eat it, won't do.
Although it should have happened many decades ago and too late right now, all attempts at FF burning reductions should have been accompanied by legislation to restrict FF production, to LEAVE IT IN THE GROUND. So it can't be exploited and used by others.

EV's, electric trains, windmills, solar panels and all other "green fuels" are just BS. They are being used to prolong BAU and the burning of very single ounce of FF we can viably exploit.

If you haven't sequestered the equivalent amount of FF not burnt after the introduction of "green" technology then you are BS-ing yourself and everyone else.

So go ahead drive your EV, use your solar panels but don't kid yourself you have any impact on emissions. The sale of gas burning vehicles could be banned in the USA tomorrow and I guarantee that within a year or two FF exploitation would continue as normal.

Keep screaming.. but don't hurt yourself.

He's having an effect on his own emissions, AND his own dependency on petroleum supplies, and his own transportation running costs, and quite likely his own Auto Maintenance costs and detours .. it's a bit much to ask him to take responsibility for global CO2 and pollution..

As far as having a backup gas burning car.. how would you compare that to the great numbers of families that have a Gas burner to back up their OTHER gas burner? If the ICE sits quiet a vast majority of the time, then an improvement has been made. He, and You and I are still part of today's world, and we can choose to make our part in it better, or we can opt not to. Maybe you've got yourself in some catbird seat where you don't use cars and vehicles at all, but I kind of doubt it. You're enmeshed in the system as well. Why don't you spend some of these reactions proposing your ideas and actions, like others present theirs, with the great risk that someone is going to fling their droppings at it, for your efforts..

Otherwise, these growlings and barkings start to sound very hollow. We have to find our ways to one exit or another.. stoaty gets to steer clear of gas stations for most of the year now. Sorry it's imperfect, but it has removed for his household at least one (and no, not all) of the key problems with auto transport. Why don't you lobby a bit more for what to do, as well as what NOT to do?

EV's, electric trains, windmills, solar panels and all other "green fuels" are just BS. They are being used to prolong BAU and the burning of very single ounce of FF we can viably exploit.

If you haven't sequestered the equivalent amount of FF not burnt after the introduction of "green" technology then you are BS-ing yourself and everyone else.

So go ahead drive your EV, use your solar panels but don't kid yourself you have any impact on emissions.

With this kind of view then it seems like you might as well just kill yourself and reduce your emissions completely (well, except for the decomposing body). Of course stopping all FF usage would amount to mass suicide as people would starve, die of heat exhaustion, die of cold, die from lack of medical care, etc.

I think it would be more productive to try to come up with some proposals instead of bitch & moan at the people who are at least trying to do something to reduce emissions. What exactly do you think you will accomplish with that strategy?

Building a better machine: Students use creativity to improve the Heat Engine

... The seminar challenged students to study and improve upon the Sterling heat engine constructed by last year's seminar students. Participants were tasked to improve on the existing model, turning it into a scientific instrument—embodying the laws of classical mechanics and thermodynamics.

"This course was my first introduction to classical mechanics," said Cecilia Sanders, a student who presented at the seminar. "The engine itself was capable of doing some kind of mechanical work, but we wanted to transform that into something useful. The sorts of engines that we use in household generators, for example, all translate into electrical work somehow."

The Sterling heat engine model eliminates the standard piston system.

I keep seeing a lot about Sterling Engines and occasionally follow up some stories. But they all seem to involve people totally convinced of the Sterling's potential, but regardless of time, effort and presumably investment they always fail to create an economically viable product. Presumably the combined mechanical and heat output appear to be efficient in energy terms, but in reality the available mechanical and heat output cannot be used efficiently together.

I don't know, maybe someone can give an indication of whether the Sterling is a viable technology or just a siren's song that will drive us onto the rocks?

My dad spent decades designing stirling engines. None of his designs were ever employed, and that was in the defence industry where cost of production is a secondary issue. It is hard to cheat the laws of thermodynamics.

Yair . . . I have been searching for documentation on the Sterling engines used by Kidman the pioneering Australian pastoralist.

He used them for watering cattle and I have read several accounts of the much hated job of "pumping" which involved staying awake and every ten minutes or so scraping off the ash and replacing with a shovel full of glowing gidgea coals . . .the daytime job was collecting the wood.

Sounds pretty inefficient but these engines would have been hundreds of miles from any source of liquid fuel.


Actually, the laws of thermo are very kind to stirlings. High efficiency, takes any heat source, quiet, can be vibration free, and so on and on.

Read all about it


I would love to have one of those in my shop instead of the ancient, mediocre one I do have out there. The MEC engine's performance is great, and it has a long life. BUT, alas, that thing is very heavy, and very expensive for its 1kW and- big sin- it will only run at one set frequency, 50 hz, and don't you dare let it drift off, since its dynamic absorber for vibration canceling will go ape if you do.

So, you might ask, why did they make it that way, after all there were lots of other ways that would eliminate all those objections? Answer, and answer to all the similar Q's about why no stirlings on the market-- lousy management decisions. I could write a book-- in fact, I am writing a book. Very sad story of one great opportunity after another tossed down the rathole by flagrantly stupid decisions that any grownup engineer should have yelled out of the room but didn't.

There is nothing between stirlings and great service to humanity but that altogether too human subset of humanity who have their hand on the throttle.

There is nothing between stirlings and great service to humanity but that altogether too human subset of humanity who have their hand on the throttle.

hey wimbi,

If you've never seen this, check it out!


Great link, Fred. You have earned your TOD salary for the day! Somehow I hadn't seen it despite the fact that I thought I knew all about Bill Gross from the caltech mag.

Bill seemed to have skipped a link in his evolutional algorithm- stirlings come in two types, linkage and free piston. The linkage needs some sort of lube, which screws up the regenerator, but the free piston does not have any side forces and so does not need any lube but its working gas, and so can last hundreds of thousands of hours, see nasa space power systems.

Cost, he says, is vital. Repairs are costly. Better use the stirling that does not take any maintenance.

What! Yet another management silliness? Bill is admirable, but nobody is perfect, I suppose, except --.


An engine made of a silver alloy?

Ohhhh, they meant Stirling, as in Reverend Dr. Robert Stirling.

No doubt to preserve the independence and journalistic integrity of the Harvard Gazette they don't send a draft out to check for such bone-headed mistakes.

Caveat lector.


German Minister Says 'Never Again' To Nuclear Power

German Environment Minister Peter Altmaier said Friday his country would never again return to nuclear energy, hitting back at a top EU official who doubted Berlin's commitment to phase out nuclear power.

"I cannot see any plausible political line-up that would enable a revival of nuclear power in Germany," Altmaier told Friday's edition of the Leipziger Volkszeitung regional daily.

The internet can be so very ironic! I clicked on that link about Germany saying no to Nuclear Power and in the middle of the article there was a Google ad link offering me the opportunity of earn a degree in 'Renewable Energy' at Everglades University in the Nuclear Power Program! Way to go Sunshine State! I took a screen shot for posterity...

Can We Accurately Model Fluid Flow In Shale?

Given that over 20 trillion cubic meters of natural gas, a third of the United States' total reserves, are thought to be trapped in shale, and given the rush to exploit shale oil and gas resources by Australia, Canada, China, and other countries around the world—even oil-rich Saudi Arabia—it's a wonder that producers still rely on models of how fluids flow underground that were devised in the heyday of oil and gas development.

... By developing the details of their model, the authors were able to calculate how rapidly a reservoir starting at a certain production level would decline and how long it would remain productive. They then compared their model’s predictions with data from real gas and oil fields, including the Eagle Ford, Austin Chalk, Haynesville, Texas Panhandle, and Barnett fields, and found good agreement.

More information: A mathematical model of fluid and gas flow in nanoporous media

well i'm not sure when the heyday precisely occured

it's a wonder that producers still rely on models of how fluids flow underground that were devised in the heyday of oil and gas development.

but the basic model (for fluid flow in porous medium), called d'arcy's law, was formulated around 1850. and the new model referred to is simply a refinement of this old one.

They are basically stating that rate declines as a function of time to a power between -0.5 and -1.0, I think:


S - Strange article. I had trouble following some of their logic. First: "...authors were able to calculate how rapidly a reservoir starting at a certain production level would decline and how long it would remain productive." At least in the case of a fractured shale reservoir (which is what they seem to focus upon) that's impossible to do from a model. I've seen that came on at rates 4X that of an offset well but lasted on a 1/3 of the life of that well with a smaller URR. How quickly a well depletes a fracture system is first, and above all, dependent upon the extent of that fracture system. That's why you can see two wells drilled just a mile or so apart have very different production profiles. And once you have a production history of 6 months or so you don't need any model to predict the future of a pure pressure depletion drive which is typical of most NG shales. One of Mother Earth's gifts to engineer: plot the declining pressure on a log-normal scale and it yields a rather straight line you can use to project the depletion date and URR.

A fractured shale produces oil has a somewhat different dynamic. As the pressure drops too low to push the oil all the way up to the well head pumps can be installed to lift it out of the reservoir.

Silurian: Nice chart. It shows the problem with curve fitting to estimate URR during the earliest days of production when the curves are nearly on top of each other. But when you get a year or so out the fit becomes much more obvious.

I think Joules Burns posted this a while back:

The evolution of ARAMCO Reservoir Behavior Simulator


That may have been the heyday, but this is a long way from modern simulators, conceptually the same, with many refinements and infinitely more possible soulutions.

Larry Lake, Chairman of UT Petroleum Engineering, advocates simplier more sophisticated models:


My take on this - the authors have not a clue how real oil and gas fields form. They think they have invented a better wheel, but their wheel has square corners. If they knew more about oil and gas, they would realize how badly off track they were.

Researchers Seek Longer Battery Life for Electric Locomotive

Norfolk Southern Railway No. 999 is the first all-electric, battery-powered locomotive in the United States. But when one of the thousand lead-acid batteries that power it dies, the locomotive shuts down. To combat this problem, a team of Penn State researchers is developing more cost-effective ways to prolong battery life.

The experimental locomotive's batteries, just like automotive batteries, are rechargeable until they eventually die. A leading cause of damage and death in lead-acid batteries is sulfation, a degradation of the battery caused by frequent charging and discharging that creates an accumulation of lead sulfate. ... "We wanted to reverse the sulfation to rejuvenate the battery and bring it back to life," said Christopher Rahn, professor of mechanical engineering.

Penn State and Norfolk Southern, which operates 21,000 route-miles in 22 states, began developing Locomotive No. 999 in 2008 to evaluate the application of battery technologies for railroad motive power, with particular interest in energy savings and emissions reduction.

2013 Sees Cleaner Trucks and Buses Across EU

Under new European Union rules to combat pollution, trucks and buses rolling off assembly lines this year will produce significantly less harmful exhaust fumes.

They obviously need some kind of redundancy. Either possibility to disconnect batteries if connected in parallel or bypass cells if connected in series.

A battery-powered locomotive? I'm an EV advocate but that seems pretty stupid to me. Especially one that is designed such that a single cell failure causes the entire thing to not work (that must be an error in the article, the engineers can't be that bad!).

NREL to Help Convert Methane to Liquid Diesel

Advanced research project could lead to lower greenhouse emissions, new life for spent gas and oil wells

... A goal of this project is to genetically engineer that microorganism to both increase the amount of membrane lipids and to get the microorganism to produce non-phosphorous-based lipids that are more readily converted to fuels.

The end product would be a fuel intermediate that then could be piped to a refinery for final processing into diesel or jet fuel. “It would be a good feedstock for a refinery,” Pienkos said.

"The amount of natural gas simply flared or vented from oil wells globally is enormous – equal to one-third of the amount of petroleum used in the United States each year."

There is enough flare gas to power the whole country of Germany each year. Turn the flared and stranded natural gas into methanol, which is easier to transport. You can turn the methanol into chemicals, gasoline, diesel or jet fuel wherever it is needed.

Easier said than done . There is oil on the moon,let's go and get it .

It is not hard to do, Shell has ships that turn flare gas into methanol at the rig. CompactGTL has units that turn flare gas into products that can be mixed with the oil to be refined.

As long as it is legal to just flare the gas they will. We make it illegal, they have to deal with it, they make money and product in the bargain...easy.

Researchers: Online Science News Needs Careful Study

A science-inclined audience and wide array of communications tools make the Internet an excellent opportunity for scientists hoping to share their research with the world. But that opportunity is fraught with unintended consequences, according to a pair of University of Wisconsin–Madison life sciences communication professors.

... "Today, I can use my mobile phone, tablet or laptop to almost instantly look up more information than ever before," Scheufele says. "But the way most people look up information in online settings may significantly restrict what types of information they encounter."

Online news sources pare down discussion or limit visibility of some information in several ways, according to Brossard and Scheufele.

"Our analyses showed a self-reinforcing spiral, which means more people see a shrinking, more similar set of news and opinions on science and technology subjects when they do online searches," Brossard says.

... In their newest study, they show that independent of the content of an article about a new technological development, the tone of comments posted by other readers can make a significant difference in the way new readers feel about the article's subject. The less civil the accompanying comments, the more risk readers attributed to the research described in the news story.

... "The day of reading a story and then turning the page to read another is over," Scheufele says. "Now each story is surrounded by numbers of Facebook likes and tweets and comments that color the way readers interpret even truly unbiased information. This will produce more and more unintended effects on readers, and unless we understand what those are and even capitalize on them, they will just cause more and more problems."

"It's not because there is not decent science writing out there. We know all kinds of excellent writers and sources," Brossard says. "But can people be certain that those are the sites they will find when they search for information? That is not clear."

Kulluk update ...

TV: ‘Sucking and blowing’ from tank on troubled oil rig in Alaska — “There may be a breach of those fuel tanks somewhere” — Officials caught rehearsing on conference call

... At a news conference Thursday, Churchfield also said that electrical generators on the Kulluk are wrecked, but declined to say how that would affect future salvage efforts. He and a Coast Guard official, Capt. Paul Mehler, the federal on-scene commander, also wouldn’t estimate when an attempt would be made to move the Kulluk.


... Sean Churchfield, incident commander and operations manager for Royal Dutch Shell Alaska, offered few details on the overall condition of the Kulluk and had no update on the vessel’s hull. During Wednesday’s short press briefing, officials said the fuel tanks were intact, but that a tank in a “void space” that was “sucking and blowing” and could be cause for concern.


You forgot to include the part that the "there may be a breach in those fuel tanks somewhere" was added by MSNBC.

Additional teams salvage teams were on Kulluk yesterday. So far there is no indication of leaking fuel.

Latest Anchorage Daily News update.

Are most drill rigs the size of Kulluq round, or is that a design for work in ice prone areas? Seems round would be a bear of a shape to tow in those seas.

I do know people crabbing in the Bering Sea right now but they are in and out of Dutch. The guys tell me the steam from Kodiak to the crab fishing grounds can be quite the ride.

The round shape of Kulluk is rather unique, and is optimized for working in ice. The hull shape is designed to ride over moving ice, deflecting it downward and breaking it. It is designed to be held in position by 12 anchors, the leads for which come out the bottom of the hull below the ice. See http://www.mxak.org/community/kulluk/kullukmore.html for some old pictures and diagrams that show the mooring configuration.

What is optimal for working in ice is not necessarily optimal for the open ocean. Years ago in grad school one of my professors had done a research cruise on an icebreaker. My recollection is that he said that when they got out of the ice and back into open water, that ship turned into a real barf bucket. This was from a guy who was not a stranger to working at sea.

Thanks for the excellent link. I noticed a ballast capacity of 35,928 barrels in the specs. I wonder how heavy it must be ballasted to tow. Sure looks like a heavy icing would make capsizing a major risk. From the pictures it looks to be being towed drafting somewhat deeper than minimum ~33' (looked higher in the water at Dutch than Seattle). Main deck height is 61' and drill floor is at 100'

Back in the day I was on a Roberts 34' Bristol Bay packer getting towed in about 8-12' Bering Sea slop. A salmon cannery tender (a contracted crab boat) was doing the tow and its skipper had us keep tight on our long anchor chain for the first hour. What a slamming--amazing the cleats held!! He relented and let us run out a good length of nylon Samson line that was attached to the chain for the rest of the voyage. We were awful glad to get into Port Moller. That Roberts boat had a real blunt bow and sat pretty high in the water empty. No way it could have towed near as badly as the Kulluk--up to 56' seas on its current trip if memory serves.

Back to the game at hand. Here is something fresh from the ADN

Shell spokesman Curtis Smith said Friday that the prospect of paying state tax on the Kulluk "did not influence the timing" of the rig's departure, which contradicts what he told Unalaska reporter Jim Paulin in an email on Dec. 27.

Smith said Friday he originally chose his words badly.

you think

"We are now planning to sail both vessels to the west coast for seasonal maintenance and inspections," Smith replied. "Having said that, it's fair to say the current tax structure related to vessels of this type influenced the timing of our departure."

That is going to bite all the oil companies up here in the butt. A Shell spokesman grandstanding for tax structure change as the company sends a towing nightmare across the Gulf of Alaska in the heart of winter storm season...think the legislature will remember that when Sean's 'new and improved' oil tax bill hits the floor. Session's openning gavel is only a week and half off.

That is going to bite all the oil companies up here in the butt. A Shell spokesman grandstanding for tax structure change as the company sends a towing nightmare across the Gulf of Alaska in the heart of winter storm season...think the legislature will remember that when Sean's 'new and improved' oil tax bill hits the floor. Session's openning gavel is only a week and half off.

In 20/20 hindsight it was a stupid thing for the Shell guy to say. But then like many things in life, it probably seemed like a good idea at the time.

I hope the leg remembers, but I'm not counting on it. The republican gerrymandering seems to have taken a toll on those in the leg who don't buy the big company line. I don't think I will comment further, however. I have to be careful and bite my tongue around work when it comes to oil tax issures. ;-)

But you are right, the next legislature session should be interesting.

Builder of tug that failed Shell's Kulluk has moneyed Alaska ties

Powerful Edison Chouest Offshore, a large and dominant shipbuilding company on the nation's Gulf coast, has become increasingly influential in Alaska, too. It’s built specially designed tugs worth hundreds of millions of dollars in support of Royal Dutch Shell's Arctic drilling program in the Beaufort and Chukchi seas.

In support of its ambitions, the company has sunk big money into politics, too, with sizeable campaign donations to politicians able to influence marine policy, defense and shipping matters – including Alaska’s three congressmen.

The company's new 324-foot tug Aiviq was towing Shell’s conical drilling unit Kulluk from Dutch Harbor to Seattle in late December when angry, stormy seas turned the voyage perilous. .....
Precisely why the Aiviq's four engines failed in succession has yet to be answered, although some have suspected fouled fuel. Tow-line failures have been attributed to the powerfully tumultuous winter seas. The incident is undoubtedly a blow to Edison Chouest, which has built a reputation on creating custom-built ships designed to meet offshore needs. The Aiviq, a $200 million, 360-foot ice-breaking tug capable of doubling as an oil spill response vessel, has been touted as a crown jewel.

“It will be the world's largest and most powerful anchor-handling icebreaker,” Chouest told the Houston Chronicle in Sept. 2011.

Risky struggle to save Kulluk crew

The evacuation plan was to hover a helicopter over the rig's helo deck, lower a basket and hoist the crew one by one, Vislay said. On a pitching rig, it's too dangerous to land.The winds were pummeling. It was dark. Waves were crashing near the helo pad, the one open area. The emergency towline was connected to the rig near the pad, complicating the approach. The way the rig was positioned, the helicopters couldn't fly nose into the wind.And at the rig's center was a swaying, 160-foot-tall derrick. "It makes the hoist very challenging because you don't want to get hit by that tower," Vislay said. Piping, rigging, beams, cranes and other Kulluk features made maneuvering extra challenging, he said.
So the first evacuation effort was aborted. The Coast Guard monitored the situation through the night.The next day, on Dec. 29, the Coast Guard tried again. By now, the Kulluk was under tow to two vessels, the Aiviq and another Shell-contracted vessel, the Nanuq. The rig was positioned so that the helicopters could approach at a safe angle. It was light.

Update #22: Unified Command Daily Summary
DATE: January 5, 2013 1:45:00 AM AKST

Anchorage, AK – Unified Command’s daily activity report for Friday, January 4, 2013.

•The Kulluk continues to remain stable and upright and there is no evidence of sheen in the vicinity.
•During the assessment by response crew members, seawater was discovered in the 3S7C void. The compromise does not pose a threat to the stability of the vessel.
•Shell received a permit from Alaska Department of Natural Resources to remove the Kulluk from the location.
•Unified Command has successfully negotiated with the Old Harbor Native Corporation to secure access to the shoreline near the Kulluk.
•Representatives of Unified Command also landed in Old Harbor to meet with community leaders to provide an update on the current situation and address questions and concerns.
•A meeting with Kodiak residents scheduled for Sunday was postponed due to the Russian Christmas holiday. It will be rescheduled when possible.
•Multiple community outreach calls took place between Unified Command personnel and officials from Old Harbor, Akhiok, Prince William Sound Regional Citizens Advisory Council (RCAC), Cook Inlet RCAC and other stakeholders.
•Multiple flights took place today to support the response. These flights included:
◦U.S. Coast Guard Jayhawk helicopter transported assessment crews to the Kulluk
◦Era Aviation helicopter overflight completed, transporting science professionals who conducted a wildlife survey of the area
◦Two Lynden C-130 flights between Anchorage and Kodiak were completed, delivering and staging response equipment
◦Era Aviation helicopter recovered the assessment team from the Kulluk
•There are three vessels on scene and another 12 en route to the Kulluk or harbors nearby.
•After evaluation and assessment, Era Aviation flight crews successfully landed on the helicopter deck for the first time since the Kulluk ran aground.


Schematics of Shell's Kulluk drilling unit, grounded since New Year's Eve off of the southwestern shore of Alaska's Kodiak Island, show that its fuel oil storage tanks are oriented away from the shore, potentially making them less prone to puncture as the unit sways on the rocky beach.
During Wednesday's short press briefing, officials said the fuel tanks were intact, but that a tank in a "void space" that was "sucking and blowing" and could be cause for concern.

Whether or not ballast tanks aboard the Kulluk have been breached remains unknown as of Thursday. It's also unknown whether a breach in the ballast tanks would affect the stability of the rig should it be lifted from its resting place.
Churchfield said in press briefing Thursday that waves have damaged the topside of the vessel, emergency and service generators are damaged, and “several” watertight doors have been breached, causing water damage in the vessel.

(Alaska Dispatch).

Pure speculation on my part, but I wouldn't be surprised if the salvage experts (Smit) remove the fuel before any attempt is made to move the rig. That eliminates the danger of a spill if someting goes wrong when/if they attempt to pull Kulluk off the island. It also incrementally lightens the rig, making it easier to pull off. Just a somewhat educated guess on my part.

Stumbled on this maritime and shipping news site news site called gCaptain!

Here is their coverage of the Kulluk grounding.

Anyway from one of their posts they have a schematic of the Kulluk up.

Additional information on the Kulluk can be found at the following link (page 25). Mooring/Anchoring system diagram on page 28/29.

DOWNLOAD (large): 2012_Shell_Beaufort_EP/Appendix K - Ice Management.pdf

The download link throws an error for me.

Here are the drawings along with an event history and much additional information:

Lots to see.

"Finally, after all is said and done, the patch of oil being sought by Royal Dutch Shell, with all this drama and potential to ruin the Arctic Ocean, is estimated to meet the nations needs for 24 months ..."

Also, article/photos of Google camera car/bike/snowmobile etc.

"However, the is one small problem. Earlier Shell said the FUEL was used for ballast and not seawater."

...so a breach into a "ballast" tank might release oil.

"Asked whether the hatches were left open by the 18 Kulluk crew members when they were evacuated by the Coast Guard Helicopter Thursday, Tommy Travis of Noble Drilling, Shell's contractor said he couldn't answer until an investigation is done."


Refuge Rock, the site of a 1784 massacre of Alutiiq men, women and children by Russian traders, lies about one mile from the site of the Kulluk’s grounding.


Drug Gangs Invest in Mexico Coal Mines

The Zetas cartel, one of Mexico's most violent groups, has moved into coal mining as "It's More Lucrative Than Drugs".

... Two hundred government inspectors are heading to the region to investigate mines it suspects are tied to organised crime. The state government has also been tarred by the accusations. A Coahuila government body (PRODEMI) buys coal from the companies and then sells it to the state electricity company. Now the country's attorney general is investigating its links with companies thought to have sold "Narco Coal".

As the line blurs between organised crime and legal business in Coahuila, these are nervous times for state's mining establishment. On the weekend before Al Jazeera travelled to the area, a mine owner was killed, and his finger cut off, a sign that he was being punished for speaking out against criminals. Senior mining figures refused to speak to Al Jazeera on the record. They did, however, confirm that organised crime has infiltrated their industry.

also http://www.aljazeera.com/video/americas/2013/01/201314141548722653.html

Speaking of the blur between organised crime and legal business ...

Bipartisan Pair Of Senators Calls For Investigation Into U.S. Taxpayer Losses From Coal Exports

Senators Ron Wyden (D-OR) and Lisa Murkowski (R-AK) have called on Secretary of the Interior Ken Salazar to investigate if U.S. taxpayers are getting shortchanged by companies mining coal from public lands and exporting the resource to other countries

More lucrative, and for the future of life on this planet, the bigger crime.

Materials Research Society Fall Meeting and Exhibit
A Boost for Lithium-Sulfur Batteries

At the meeting, Yi Cui, a materials scientist at Stanford University in Palo Alto, California, reported a possible way around sulfur's problems. Cui and his team encapsulated tiny nanoparticles of sulfur inside a shell of titanium dioxide (TiO2), leaving extra space inside each shell. They then packed their coated nanoparticles together to form a cathode. When they ran their battery, they found that TiO2's high conductivity made it easy to shuttle electrons in and out. During discharge, the lithium ions readily penetrated the TiO2 shells and bound to sulfur atoms in the nanoparticles. And even though the sulfide nanoparticles repeatedly swelled and shrank inside their shells as the batteries were charged and discharged, the small size of the particles allowed these changes without cracking.

Finally, the TiO2 also constrained the polysulfides, so these byproducts were unable to escape and poison the rest of the cell. At the meeting, Cui reported that the new batteries have a capacity of about 800 to 1000 milliamp-hours per gram, roughly six times that of the current devices on the market. And Cui said his team charged and discharged the battery more than 1000 times with negligible drop off in performance.

I once heard that if the Earth were represented by a basketball that all the oil would be like a grain of salt. Is that analogy correct?

It seems like a grain of salt would be too small.

Seems close to the right order of magnitude ...

Earth volume = 260,000,000,000 cubic miles

Annual Oil Consumption ~30,000,000,000 bbl = 1 cubic mile

Estimated Oil Consumption to date 1,000,000,000,000 bbl = ~ 33 cubic miles

Estimated Remaining Oil Reserve ~ 1-3 trillion bbl = 33-100 cubic miles.

Therefore 33/260,000,000,000 = 0.000000000127 [0.0000000127% by volume].



...now for the math on a basketball and a grain of salt ;-/

taking the cube root of his tiny number (spherical salt grain approx) the salt grain should be 1/2000th the diameter of the basketball, about .005inches. About .15mm. So a pretty tiny salt grain at that.

Seraph, thanks to you and everyone else who looked into my question. I appreciate your efforts.

It seems like a grain of salt would be too small.

Maybe a tad bigger than a grain of salt but not by much.


K - A very deep GOM DW would be drilled down to 30,000'. The vast majority of oil ever produced was from above 10,000'. The diameter of the earth at the equator is about 42,000,000'. So a 30,000' deep oil reservoir would be 0.0007% of the diameter of the planet. If a basketball were about 12" in diameter a 30,000' well would be 0.0084". A grain of salt has a diameter of .00003.7m or 0.0015". So if I didn't mess up the decimal places a 30,000' layer on the surface of the earth would be 6X as thick as a grain of salt. And thus a grain of salt is almost 20X as big as the layer of the earth that has produced the vast majority of oil.

Long ago I read that if the earth were the size of an orange the difference between the highest mountain and the deepest trench in the ocean is so small that the earth would be smoother than that orange.

A grain of salt has a diameter of .00003.7m or 0.0015".

I think I'll take those dims with a grain of salt >;-)
At least if we are talking common table salt the crystals are cubic not spherical so diameter doesn't apply.
This is the best I could do with the help of the internet, assuming we consider a grain to be equivalent to a unit cell.


A mole, or 6.023 x 1023, of Na atoms weighs 22.997 g, and a mole of Cl- atoms 35.457 g. Therefore, a cube containing (1/2)NaCl has a weight of 29.227 / 6.023 x 1023 g, and a volume of (0.279)3 nm = 2.172 x 10-23 cm3. This gives a density of 2.23 g/cm3, close to the observed value of 2.16 g/cm3. The actual unit cell is slightly larger than what we have calculated from the ionic radii, for various reasons. The observed side of the fcc unit cell is 0.563 nm. Except for thermal vibrations and structual defects, the crystal is perfect, since all ions of any type are identical to each other.

So a unit cell of NaCl is 0.563 cubic nanometers. Of course actual salt crystals come in many different sizes.


Microscopic view of three cuboidal grains of ordinary table salt (sodium chloride or NaCl). All three grains are just over one millimeter in length (red bar). Grains of table salt vary slightly in size, but three average grains stacked together adds up to approximately one mm. If three grains equal one millimeter in length, then a single grain is approximately 0.3 mm or 0.03 cm on a side.

The comparison I read long ago was that it would be smoother than a billiard ball if shrunk to comparable size. Let's see, Mt. Everest to the Mariana Trench is about 65,000 ft or 12 miles and change right? (I realize the earth isn't perfectly spherical even in large scale average so this oversimplifies things.) 12 miles out of 8,000 is pretty smooth -- a scratch 150 microns deep in a 10 cm sphere.

On this 10 megabyte logarithmic map of the universe, the earth's crust is just a thick line. The entire atmosphere is a thin layer just under the satellites. There is a line a little more that halfway up this LOG space (each division represents 10 times the distance of the one before it): our earliest radio signals.


Worsening oil bottleneck could cost Canada $1 trillion

Federal and provincial governments are reeling from the impact of the lack of pipelines and new markets for Alberta crude - an alarming dilemma that could cost Canada more than a trillion dollars in lost economic activity.

With no quick fixes in sight, both the federal Conservatives and the Alberta Tories led by Alison Redford are now readjusting revenue projections and deferring plans to balance their respective budgets.

Alberta's oilsands bitumen is selling at a $36-a-barrel discount because of a glut of oil in the United States and a lack of pipelines to get the Canadian product to the eastern and western coasts and down to the Gulf of Mexico.

The Canadian Energy Research Institute (CERI) has estimated that if three major pipeline expansion projects don't get built, the country will forgo as much as $1.3 trillion of gross domestic product and $276 billion in taxes over the next two decades.

Federal Natural Resources Minister Joe Oliver calls it "a serious issue" with no short-term solution.

"If we do not take heed of warnings and diversify our markets for energy by building infrastructure like pipelines, then our resources will be stranded and we will lose jobs and businesses in Canada," Oliver told the Saint John Board of Trade last month.

"We're losing $50 million every single day - $18 to $19 billion every year - because our resources are landlocked."

The Canadian Energy Research Institute (CERI) has estimated that if three major pipeline expansion projects don't get built, the country will forgo as much as $1.3 trillion of gross domestic product and $276 billion in taxes over the next two decades.

So extend the product over the next 3-4 decades. Perhaps these fools fear these resources won't be fully exploited in their lifetimes, or that there won't be many people left who can afford it, or that climate change....

Yeah, as a Canadian that is my take. What's the rush on development, fear of cold fusion? I always suspect politicians get the wink wink nod nod offers of Board work or other perks when they eventually get turfed. Stockwell Day, our ex BC muckety muck entered politics with a stellar career raising chickens and working on an inland ferry, so I've been told. I can only assume he is doing much much better after retirement from office. (I'd better look it up).


Shoot I was wrong...He is now a lobbiest. He knows how to get what you want!! Do you think he works for energy companies?

"Stockwell Day Connex assists organizations and individuals in navigating the labyrinth of government.

Stockwell Day Connex draws upon 25 years of experience in developing public policy and procedures at the municipal, provincial, and federal levels of government. Stockwell Day Connex can work with your organization to create a clear and concise government relations strategy as well as provide insightful analysis on Canadian political developments.

Stockwell Day Connex assists with:

Identifying implications and opportunities resulting from developments in Canadian public policy.
Providing political environmental assessments.
Consulting on communications strategies.
Providing strategic counsel for the governing body of your organization."

Funny. Our 'blue dog' Democrat Congressman decided to not run again and took a job in Washington working for Duke Energy. He's forbidden by law to lobby Congress for a (whole) year. After that... I'm sure Duke's nuclear waste issues will be involved. That said, he had a fairly good record on the environment. One can always hope :-/

Replaced a fake Democrat with a real Republican. NC is screwed with all republicans at the helm - McCrory has already named Art Pope as "chief budget writer." You can pretty much count NC out for any action on environment or energy - it will probably be an enemy of positive change, in fact. Bad timing.

"He's forbidden by law to lobby Congress for a (whole) year."

So, they join the lobby shop and are called something else, like "historian", for the first year. The same ploy is used elsewhere.


Peter Lougheed, premier of Alberta from 1971 to 1985 favoured a "go slow" approach to developing the tar sands to maximize the benefits to Albertans. This was a great idea that unfortunately has been forgotten by todays generation of politicians. Incredibly, the Alberta government continues to run deficits despite the money flowing in to develop the tar sands.

Incredibly, the Alberta government continues to run deficits despite the money flowing in to develop the tar sands.

Incredibly, the Alberta government would not be running a deficit if it got full price for its oil sands royalties. It collects them "in-kind", which is to say it collects its royalties in the form of bitumen rather than cash. If it got Brent prices for its bitumen (discounted for quality, of course), it would not be running a deficit.

This, of course, is a huge motivator for politicians, since they have all kinds of expensive programs to fund, including free medical care for all Albertans, plus one of the best elementary and high school school systems on the planet. If you're wondering why they are so pushy on the subject of pipelines, that would be the reason.

At current rates of production, Canada has over 27 decades of proven oil sands reserves. Proven plus probable is about twice that, which takes us about to the middle of the third millennium. Finding someone to buy it is the bigger concern from the Canadian government's perspective.

As far as climate change is concerned, I guess we'll just have to clear the northern forests and plant crops. Extreme global warming would put most of the Canadian Prairies into the Corn Belt, whereas now it's too cold. Doomerism is for other people, not Canadians.

I just see a growing sense of desperation urgency about exploiting the oil sands; starting to remind me of (US) Americans. Wouldn't want you guys to embarrass yourselves ;-/

I think the Canadian economy and business system is so terrible right now that if it wasn't for the oil sands we would be much worse off than our biggest trading partner...(guess who?.) Lougheed's go slow approach with sensible development would be wise, trying to cling to BAU and pretend infinite growth is possible...nay, well fed decadent growth is possible and an entitlement, simply reinforces an inherent flaw in the democratic system watched by citizens with no sense of reality or history. (Those that bother to even vote, that is). In other words, tell 'em what they want to hear and we can stay in power some more.

While Canadian banks are more sound than others, and I believe that in general Canadians tend to value community and personal security more than others in some countries,("get your house paid for to be safe"), most of us are still rampant consumers on a treadmill that leads only one way as it slows down. Our universal medical plan is highly valued but it is in jeopardy when our politicians and citizens spend foolishly on things people really don't need. (F-35s...obsolete subs, etc) We need to live simpler lives and develop some strong values beyond rushing around on the consumer treadmill like everyone else.

A general world slowdown as envisioned by JM Greer might be the best thing possible. It may save us from ourselves. We are in transition like everyone else and I sense a lack of purpose and meaning in many folks lives these days. I know poor people still taking weekend trips to Vegas because they think it is a good idea. Where does this come from?


It's the money left on the table because the North American market is saturated with Canadian oil that prompts the sense of urgency, or more accurately the tax revenue that is not collected on it (Canadian taxes on oil revenues are considerably higher than US ones.) Canadian government balance sheets would look a lot better if Canadian oil companies got full world price for their oil.

The American sense of urgency is prompted by the fact that energy self-sufficiency is not within reach, despite the wild delusions of US politicians and energy promoters.

As far as climate change is concerned, I guess we'll just have to clear the northern forests and plant crops. Extreme global warming would put most of the Canadian Prairies into the Corn Belt, whereas now it's too cold. Doomerism is for other people, not Canadians.

Could read the last sentence this way...

"Doomerism is for other people, not Canadians [who aren't up on their climate science]."

Stuart Staniford's post last year on drought...

Another Terrifying Drought Paper

If you want to see the best guesses as to the regional distribution of the problem, here they are:

This shows the change in the average PDSI in the models regionally. Note the scale - the dark brown is a full -4 shift: the new normal will be extreme drought by the standards of the past. So if this map is right, you can basically kiss Mexico goodbye altogether and the mountain west and great plains look terrible too.

Been a while since this chart was posted. Now seems a good time.

"Doomerism is for other people, not Canadians."

Oh, don't they care about the hell they cause for anybody else? To hell with you, we're happy if we come out OK, doesn't matter if we destroy your country. Sounds exactly like Americans!

Whereas Atlantic Canadians will gladly give you the shirt off their backs, Albertans... never mind.


Paul, I normally look forward to your comments, but this one not so much.
Available facts do not support your view on this subject.

The Frasier Institute recently published a Generosity Index, based on Canadian and US government statistics, ranking all 64 states, provinces, and territories in Canada and the U.S.

Percentage of Tax Filers donating to charity:

P.E.I. 25.2 Rank 31
Alberta 24.2 37
Nova Scotia 22.6 42
New Brunswick 21.3 48
Newfoundland 21.1 49

Percentage of aggregate income donated to charity:

P.E.I. 0.83 Rank 52
Alberta 0.81 53
New Brunswick 0.59 58
Nova Scotia 0.55 59
Newfoundland 0.49 60

Average charitable donation:

Alberta $2289 Rank 52
P.E.I. $1339 58
New Brunswick $1190 60
Nova Scotia $1129 62
Newfoundland $990 63

Since you were only comparing Alberta and Atlantic Canada, I left the most generous provinces, Manitoba and Saskatchewan, off this list. If you want to borrow a shirt you will have better luck in Edmonton than in your own home town of Halifax.

So who's 64 on those lists? Usually the Canadian territory of Nunavut. Canadians, especially Atlantic Canadians, are not in fact very generous. We do however claim to be polite. Perhaps we say 'Thank you' after saying 'No'.

Lost me at your mention of the Frasier Institute.

Just another right wing corporate funded think tank.



An article by Donald Gutstein of Simon Fraser University examines recent rises in funding for the Fraser Institute. [1]

The Fraser Institute has sought and received funding from several tobacco companies, including Rothmans, British American Tobacco and Philip Morris, according to a 2000 letter found in the tobacco industry documents.[2]

In 2003 Fraser Institute income was $6,620,038. In its annual report it discloses that 52% was from unspecified foundations, 38% from unspecified "organizations" (presumably corporations) and only 10% from individuals.

"During the year, the Institute approached prospective donors to support over 50 specific projects including student seminars, teachers’ workshops, the elementary and secondary school report cards, environmental studies, aboriginal studies, globalization studies, global warming and the Kyoto Protocol, fiscal studies, economic freedom, managing risk and regulation, pharmaceutical and health care studies, CANSTATS, and democratic reform," it states in its 2003 annual report. [3]

While ExxonMobil discloses in it annual statements that it contributed $60,000 to the organisation to work on "Climate Change", the Fraser Institute does not explicitly disclose the contribution. [4]

Well, a couple things come to mind. One, obviously, is that disposable income varies considerably from one province to the next province, so a simple dollar comparison seems flawed. Secondly, when I make a donation to a local food bank or charity, I don't bother to ask for a tax receipt -- don't need one, don't want one. Lastly, it doesn't take into consideration acts in kind. I recall watching a CBC News broadcast during the Ice Storm of '98 that spoke of a rural community in New Brunswick that got together to donate truckloads of firewood because that was pretty much all the local population could afford to offer by way of assistance. How does that fit in the above schema?

Sorry to paint with such a broad brush, but this flipping the bird and this "screw you and screw the environment, we'll do what we damn well please" attitude gets a little annoying.


Let's look at some basic facts when we discuss disposable income and taxes - the Maritime Provinces get approximately half of their Provincial Government revenues from the Federal Government, and guess where the Federal Government gets most of this money from - Alberta.

Alberta has contributed around $200 billion to the Canadian tax equalization system over the decades, and most of this comes from resource revenues, of which Alberta has a lot and the Maritime Provinces very little. This is about 7 times as much money as it cost the US to send a man to the moon, and it is a source of annoyance to Albertans that their contribution to keeping the Eastern Provinces afloat is not recognized in the provinces that receive the money.

It is questionable whether this money has been well spent - paying unemployment insurance to fishermen so they do nothing for half the year since fishing doesn't provide enough money to get them through the whole year doesn't really seem like a good investment.

Realistically, Nova Scotia's economy went into a slump about 100 years ago when the market for wooden sailing ships collapsed, and it has never really recovered. The Maritime Provinces have a resources based economy without having a lot of resources, and that doesn't really work. People really should have found something else to do.

The US doesn't have these kinds of programs so they would have to sit on the porch and play "Deliverance" on the banjo - or more likely get a job at low wages at a non-union automobile plant - right to work and all that, right to starve if they don't find work. But most people in the poorer US states do find work, albeit at low wages.

Alberta has a resources based economy with enormous resources, and that really does work. It has other things going for it as well, and is becoming more widely diversified. But let's keep in mind that Alberta is paying a lot of the freight for keeping the Canadian economy as healthy as it is (healthier than Europe or the US, for instance) and not look a $200 billion gift horse in the mouth.

Sorry, I can't sell my soul that cheaply. Canadians, and not just those of us in Atlantic Canada, somehow managed to get by just fine prior to the development of the Alberta tar sands and I dare say we could do so again. As for the thirty pieces of silver, thanks, but no thanks.


You got by quite nicely by virtue of the federal grants and programs funded by the tax take on Alberta's conventional oil deposits, which are largely exhausted by now. The oil sands are what are driving the Canadian economy these days.

As for the thirty pieces of silver - thirty wouldn't be so bad. It's the 200 billion pieces of silver that have been transferred from Alberta to the Eastern Provinces since the first major oil discoveries were made that I have doubts about.

I see, because Confederation only dates back to, what, 1947?


Well, it would have been nice if the Eastern Provinces had bailed out Alberta when it went bankrupt during the 1930s, but unfortunately, that didn't happen and Albertans had to deal with the Depression by themselves.

The tax equalization system didn't come along until 1957, by which time Alberta was heavily on the contribution side of the ledger.


In the 2012-2013 year, the following provinces will receive equalization payments:
Quebec ($7.391 billion)
Ontario ($3.261 billion)
Manitoba ($1.671 billion)
New Brunswick ($1.495 billion)
Nova Scotia ($1.268 billion)
Prince Edward Island ($337 million)

The following provinces will not qualify for equalization payments in 2012-2013:
British Columbia
Newfoundland and Labrador

It is noteworthy that until recently, Saskatchewan and Newfoundland were recipients of equalization payments, and Ontario was a contributor. However, oil revenues have moved SK and NL into the "have" category and the collapse of the car market has moved ON into the "have not" category. Alberta has been by far the biggest contributor over the years, though.

Note that the contributors (except for Newfoundland) are on on the West side of Canada, and the recipients on the East side. This has a lot to do with natural resource location, and ultimately the population is going to have to move where the resources are, which implies a huge westward shift of population within Canada.

You're aware that Alberta was one of the first recipients of these payments, are you not?


Well, the tax equalization system, which started in 1957, was an extension of a "tax rental" program the Federal Government had for income tax at that time, in which they collected income tax for the Provincial Governments and rebated it to the Provinces. They decided to "equalize" the payments since the Atlantic Provinces didn't have nearly the income tax base that the other provinces had.


The original program had the goal of giving each province the same per capita revenue as the two wealthiest provinces, Ontario and British Columbia, in three tax bases: personal income taxes, corporate income taxes and succession duties (inheritance taxes).

Five years later, 50 per cent of natural resource revenues were included as the fourth tax base. At the same time, however, the standard of the two wealthiest provinces was lowered to the national average. In 1967 the system was redesigned to work with every government revenue scheme with the exception of energy; this gave Canada by far the world's most generous system of equalization payments.

Of course, including resource revenues disqualified Alberta from receiving equalization payments. However, it is worth noting that Federal Government tax revenues in Alberta through this period (and even during the Depression) always exceeded its expenditures in Alberta.

The Canadian Government has always managed to collect more in taxes in Alberta than it has spent, and at this point in time Alberta is the ONLY net contributor to the federal treasury. Much of this money comes from the oil industry. In all the other provinces, the Federal Government spends more than it collects in taxes.

In 2009, for instance, the Federal Government collected $36 billion in taxes in Alberta and spent $20 billion - a net take of $16 billion. By contrast, in Nova Scotia, it collected $5 billion in taxes and spent $12 billion - a net loss of $7 billion. Without Alberta and its oil industry, life in Nova Scotia would be even less rosy than it is now.

For the benefit of Americans reading this, note that the Alberta and Canadian governments collect much more money from the oil companies than the US states and federal government would. There is no such thing as subsidies to oil companies in Canada, just taxes and more taxes. Do you feel ripped off in the US? I would and I'm an old oil man..

I could care less how many dollars Alberta's oil industry contributes to the national coffers or how this money is redistributed; it in no way justifies the harm that is caused. Your concious may be cleansed by dollars and cents, mine isn't.


You're overstating the environmental consequences. The ultimate goal is to turn the oil sands mines into agricultural land and graze bison and cattle on them. This is in the environmental planning documents. It's just a normal mine reclamation project, albeit on a vast scale.

We have lots of coal mines in Alberta that have been properly reclaimed. They just kind of disappear. I have one across the road from me that they turned into a dog walking park and swimming lake.

No, I'm not. You have your own point of view and I have mine. We'll have to agree to disagree and leave it at that.


That's right, totally ignore the environmental consequences of the burning of that oil. All that CO2? Hey, we didn't burn that oil here! You did, we just sold it to you.

and it is a source of annoyance to Albertans that their contribution to keeping the Eastern Provinces afloat is not recognized in the provinces that receive the money.

Oh, come on, that is egregious - it is an accident of geography and geology that Alberta has energy resources ... Albertans have no more right to its benefits (by being smarter or holier) than anyone else in the overall nation state.

The same "we are subsidising all you poverty-stricken east coasters" argument is used tirelessly by the right wing in Western Australia, where almost all the minerals and most of the non-coal energy assets happen to be.

So what - I think it is demonstrably clear that Alberta and Western Australia have been net (tax and wealth) beneficiaries of their being parts of a federal system over a century or more.

Western Australia is in a somewhat similar position to Alberta, although I don't think the Australian government has diverted over $250 billion in tax revenue from it to other Australian states over the years.

From above (2009 Federal tax and spending data):
Alberta: $36 billion in tax revenues, $20 billion in expenditures.
Nova Scotia: $5 billion in tax revenues, $12 billion in expenditures.

The fact is that Nova Scotia gets more of its government spending dollars from Alberta than from its own citizens taxes as a result of the generous Canadian tax equalization system. You would think they would be at least vaguely grateful for that. It would be kind of grim to live there if they didn't get it.

The basis of the problem is the unequal distribution of natural resources within Canada. 95% of the country's oil, natural gas, coal and uranium resources are in the Western half. Even 85% of the country's agricultural land is in the West. Alberta has over twice as much agricultural land as all six Eastern provinces combined, and Saskatchewan has more agricultural land than Alberta. What Western Canada lacks is people to use all those resources. It will eventually be resolved by the population moving West to where the resources are, but that will be a long, slow, painful process.

Paul, I would like to offer you an apology, and to any others on the East Coast who may have taken offense as well.

I was wrong to use a single method of calculating generosity to counter your statement regarding Atlantic Canada and Alberta. I checked into food bank donations and as near as I could tell food donations per capita in your province are about twice what they are in Alberta. By that measure, one could regard your region as being more generous.

You are correct in saying that there is more to generosity than a simple tax calculation. Generosity includes donations of all resources to worthy causes be they spiritual, environmental, or in any other way beneficial to mankind's future.

There is no easy or even fair way to calculate the value of volunteer service or acts human kindness.

It is not my place to judge the generosity of Atlantic Canadians or even my own fellow Albertans. I ask your pardon and that you might consider if the comment I responded to might also have been equally unfair.

Flipping the bird and "screw the environment" are not, I think, the typical thought of any average Canadian, Maritime or Albertan. I doubt a randomly chosen barber from Alberta is any more environmentally guilty due to living in a province with oil revenues than a Nova Scotian barber is responsible for using gas and not urging his government to refuse transfer payments.

We are all humans and some guilt for those pieces of silver you mentione elsewhere lies with all of us. You, among other, believe that Albertan Oil Sand extraction must stop. I do not disagree. My own grandchildren are unlikely to see any benefit from that petroleum to match the misery that may be the consequence of its use.

Yet what action is appropriate? People fight for the livehood they have, not the one they might have to accept. The last National Oil Policy threw the entire country into an economic recession, a much deeper one in Alberta. Failure to immediately end that policy, when they had the chance, cost the Conservatives half their voter base.

No Conservative party will dare reconsider the NEP. The parties supporters are not driven by greed or a 'screw you' attitude. Fear of the past and bitter memories outweight fear of the future. Too many remember nightly newscasts of rig operators heading south and swearing they would never return to Canada.

No Liberal party will reconsider it either. The loss of that transfer payment money was a factor in the fall of the Liberals in 1982. With the Conservatives broken through the '90's they had several years as the majority government to try again. They did not. They had the country's signature on the Kyoto Accord as justification for trying again. They did not.

You cannot give Albertans sole blame for the current economic structure of the country or the entire future of the world's biosphere. If you want to change Albertans, they need to be given stable alternative jobs that take them out of the oil economy.

That means financial investment from outside the province, possibly even investment in the oil campanies to redirect their purpose, and the end of the transfer payments.

Paul, I regard you as having done more personally for the benefit of the environment than I. I respect what you have done. I mean no offense. Are Albertans as a group more guilty of environmental offense than others? Probably, but maybe we are more in need of generosity to change course rather critism for lack of the same.

Thanks, Mark, for your kind words and for sharing your well reasoned thoughts. And no need to apologize; my remark was highly provocative and grossly unfair. My frustration is with the federal and Alberta governments and with certain members of the oil and gas industry whose intent appears to be to exploit these resources for maximum economic gain with seemingly little or no regard as to the social and environmental consequences. There's little doubt that these resources will be developed, but hopefully we can do so in a more prudent and measured fashion. At the same time, we should be working aggressively to transition away from these same fossil fuels. That's admittedly a tall order, and I can well appreciate the powerful forces at play and how difficult it is to make even small adjustments in course; nonetheless, I believe this to be necessary and in everyone's long-term interest.

Thanks again for your comments and for allowing me to present my thoughts in a more constructive manner. I've visited Alberta on several occasions for both business and pleasure (the Alberta Research Council was one of my clients) and I've always found Albertans to be especially warm, generous and gracious hosts. I would like to apologize to you, your fellow Albertans and to the members of this forum for suggesting otherwise, and to thank you for the opportunity to set the record straight.


Thank you in turn. Perhaps the best apologies are reasoned consideration and respect for differing opinions.

It's a pity that our political systems are based on perpetual conflict for short term survival.

This post is growing old and I will not comment on this particular drumbeat post again, but should you be following it long enough to read this reply, I would say that you are entirely right as to the need for aggressive transition.

I venture to say that the main problem is political. I don't think we do democracy right. A system based on parties is divisive by nature and subject to some measure of control by entities with enough power. It colors the actions of our representatives in every country of the world with biases toward religious persuasion, ethnicities, population distributions, as well as business interests.
I have read that the founding fathers of the US constitution struggled unsuccessfully to find a system that would function without devolving into parties. We are now at a point where short term thinking regarding a wide variety of resources could kill us all.
I would vote for an association of independants who's sole point of collaboration would be to immediately reform the rules by which candidates are chosen and elected. So many universities teach political science. It all seems to be about teaching how to succeed within existing systems when what we need is research into developing government that work better.
Saying more than that would require a post rather than a comment and I am not sure of the correct forum to discuss it.

Cheers, yourself.

Wot, you mean those blue-eyed Arabs in Fort McMordor?

"Doomerism is for other people..."

I sincerely hope you are being sarcastic. If not, the only descriptor that fits is "irresponsible". Most of human history has taken place without the vast benefits of fossil fuels, and I think we can survive the consequences of peak oil; it will be very tough, but the worst will probably be over in a hundred years or so. Climate change will just be getting going by then and will be much harder to adapt to.


Most of human history has taken place without the vast benefits of fossil fuels, and I think we can survive the consequences of peak oil; it will be very tough, but the worst will probably be over in a hundred years or so.

If you really believe that then you are not a doomer at all. Or at least that is the way I interpret your statement. That is, to mean that because most of human history took place without the aid of fossil fuels, they can do it again, but with great difficulty.

No, that is not correct at all. Most of human history took place when the population was a tiny fraction of what it is today. The population only began to explode with the advent of fossil fuels. First coal enabled a sharp rise then oil and gas allowed it to really skyrocket. Fossil fuels enabled the food supply to explode and the population just quite naturally exploded as the food supply exploded.

But when that fuel is gone the population will be right back there where it was before fossil fuels. And they will get along, with the average lifespan somewhere in the 30s or lower, as it was in prehistoric times.

Now if that was what you meant then I agree with you.

Ron P.


In terms of length of history, you are right, the population was much less. I expect that it will likely be that way again. I see no alternative. However, during that history, much of which was pretty brutish, we also seemed to develop the basis of our philosophies of life, our civilizations, great structures, art, and music, and explore most of the world. I am not saying it was all lovely and good, but it did happen.

My response was to Rocky's trivializing statement regarding "Doomsters are for others..", and that he didn't care, and my hope that he was being sarcastic. Both peak oil and climate change are deadly serious issues; however, in my long view I think that climate change is the bigger problem. It has unknown consequences and effects, it is getting worse, not better, and humans will have to continually re-adapt to its consequences. With peak fossil fuel, we have a quite nasty transition, and then we either have adapted, or not. Those that have adapted will live a life probably quite different from ours, but they will still have to deal with the climate.

You are also right in that I am NOT a 'total' doomer. I do not see us going back to the dark ages. A simpler life, a harder life, a more local life, probably a shorter life: absolutely. But we do bring a lot of good stuff with us that we should be able to capitalize on.


Doomerism is for other people

is a nontrivial statement, at least as far as Canadians are concerned..

Canada has fewer people than California or Spain in an area larger than the United States or the European Union. Whenever someone hypothesizes that civilization will come come to an end due to the lack of some natural resource, I can point to a map of Canada and say, "Dig here". Most of its natural resources haven't even been discovered yet. Canada has a lot of everything except warm weather, so global warming is something of a plus feature from the Canadian perspective.

One of my nephews was growing peas for the Indian market. He had 640 acres in peas, and he was going to export them to India.

Now you might ask, "Why don't the Indians grow their own peas?" Well first of all, they don't have the farmland, and second, they aren't as efficient. My nephew can grow all those peas on his huge farm in addition to his main crops of grain and his cattle herd, all by himself. He has a computer-controlled combine to handle the peas and wheat, and the cattle look after themselves. In India, it would probably require hundreds of peasants on tiny plots to do the same thing. The Indians are probably better off doing IT support for some multinational company and buying their peas from my nephew.

I'm just trying to explain the parameters of the 21st century global economy here.

Right, as long as "we" got "ours", we don't care what getting it does to anyone else. We don't care about climate change if things get "better" for "us", especially if we can continue to sell the stuff that makes it happen faster and makes things worse for others. As I said, sounds exactly like an American.

Aren't the parameters of the 21st century global economy wonderful? What a pile of c**p!

Having a bad weekend...

"Extreme global warming would put most of the Canadian Prairies into the Corn Belt, whereas now it's too cold."

There are a few other limiting factors to agriculture, beyond average temperatures. Things like hours of sunlight, soil tilth, and other ecosystem services.

There are a few other limiting factors to agriculture, beyond average temperatures. Things like hours of sunlight, soil tilth, and other ecosystem services.

Those we have. You never see darkness in Northern Alberta in the summertime unless you happen to be up at 3:00 am. The soil is fertile right up into the Northwest Territories. There's no lack of water anywhere.

The constraining factor on agriculture is temperature. Researchers have made amazing progress in developing crops for cold climates, but there are limits. If the temperature went up a few degrees, almost all of Northern Alberta would become highly farmable.

Eastern Canada is less good for northern development, but there is the Great Clay Belt of Northern Ontario and Quebec, which is mainly temperature constrained.

We are losing money because we can't give away our treasure fast enough!

Something kinda crazy about that. If they just slowed down, that oil would be worth much more a few decades down the road. Just ask the Brits that sold all their oil at $20/barrel and are now importing it for $110/barrel.

Canada would like to get $110/bbl for its oil, but given the lack of pipelines, $60/bbl is all it is getting at the moment.

Rather than hold it off the market, the best solution is to build more pipelines. There is hundreds of years of oil available at current production rates, and if the price goes up, more oil becomes producible, so hoarding it is rather pointless.

Crazy weather ...

New Delhi suffers though its Coldest Day In 44 years – 114 dead

Hundreds flee in Tasmania as wildfires spread across Australia – Hobart records Highest Temperature Since 1881 – ‘This has been an extraordinary day’

Worst Drought in Decades Hits Brazil's Northeast

Brazil's Northeast is suffering its worst drought in decades, threatening hydro-power supplies in an area prone to blackouts and potentially slowing economic growth in one of the country's emerging agricultural frontiers.

Lack of rain has hurt corn and cotton crops, left cattle and goats to starve to death in dry pastures and wiped some 30 percent off sugar cane production in the region responsible for 10 percent of Brazil's cane output.

Dams in the Northeast ended December at just 32 percent of capacity, according to the national electrical grid operator. That puts them below the 34 percent the operator, known as ONS, considers sufficient to guarantee electricity supplies.


And Brownsville Texas area was getting snow while northern Canada was warmer. Yesterday.

It's paradoxical but there may be clues to this phenomenon of extreme winter and warm winter cycles in recent years in arctic losing it's ice and jet stream patterns getting altered. Here is a link that provides more info on this with links to some papers and a cool animation

1. http://www.climatecentral.org/news/astonishing-arctic-sea-ice-melt-may-l...

To summarize, excess heat in the atmosphere is changing the jet stream patterns which in turn affect how long a weather phenomenon exists, in short you are going to see more extreme weather events (warm and cold) with overall higher temps. People who are cheering for warmer atmosphere might wanna take a look at this, it's quite possible that areas which experience warming will also experience sudden cold snaps that are colder than what they usually experience. Maybe we will need to rebuild everything to military specifications (-10C to 60C) instead of the usual commercial spec (5C to 40C) and this includes the crops. Everything we build will also need to withstand everything between a drought and a deluge. Fun times ahead.

I was one of those who had to flee the fires in Tasmania last night. The cops told me to leave despite the fact I have a cellar. The problem is not just surviving the fire but getting out with burned vehicles, roads blocked by fallen or burning trees, no electricity and above ground plastic water tanks melted.

A neighbour and I ended up camping by a river bank watching the blaze from a distance. At dawn we returned to find our homes unscathed due to a wind shift. Another wind shift and flare up is quite possible. Maybe this is the new normal.

It must have been a terrible night. Good luck and may your home and family stay safe.

Glad you've been able to squeak through so far.

Continued good luck, Boof!

re; Plastic Water tanks.. reminds me of why the plumbers I like best around here won't replumb a house with PEX.. while another major issue is that they've been finding that Mice have been chewing through PEX lines that are behind walls, causing 'unexplainable leaks'. FUN!

I do use the stuff in some situations, but generally get much more confidence from copper and brass.

I had a trailer with gray plastic tube plumbing. The rats loved it! Chew chew chew... rats chew all the time: they have to. Those front teeth are actually semi-circles going deep through the skull.


In the Santa Monica mountains, the regulations for water tanks were changed to demand steel and not plastic. Afterwards, you could find huge plastic water tanks at the bottoms of arroyos where they had been dumped by landowners when they upgraded to steel.

Stay safe, Boof. I hope that you and your community can come through this tragedy without further loss of life or property.

A BBC News report: http://www.youtube.com/watch?v=7ijYz37V48g


The U.S. Intelligence Community's New Year's Wish

Think of it as a simple formula: if you’ve been hired (and paid handsomely) to protect what is, you’re going to be congenitally ill-equipped to imagine what might be.

... every few years the National Intelligence Council (NIC), the IC’s “center for long-term strategic analysis,” has been intent on producing a document it calls serially Global Trends [fill in the future year]. The latest edition, out just in time for Barack Obama’s second term, is Global Trends 2030.

... There are, however, a few topics that seem to have gone MIA in the National Intelligence Council’s version of our future world. You won’t, for instance, find these words emphasized in Global Trends 2030: corporations -- they seem to have no role worth mentioning in the world of the future; depression -- yes, “recession,” or even in extremis “collapse,” but not “global depression,” not even when the U.S. is compared to the planet’s previous great imperial power, nineteenth century Britain, and so to an era when depressions were rife (a possible “great depression” gets a single “low probability” mention); imperial -- since we’re the only... ahem... great you-know-what left, that’s not an appropriate word for the world of 2030; revolution -- oh, there was one of those in 1848 and it can be mentioned, but despite the fact that the globe has been convulsed by unexpected uprisings and unforeseen movements in recent years, in 2030, revolution is unimaginable; capitalism -- no need even to say it in a world in which nothing else exists, and to use it might imply that by 2030 another system of any sort could arise to challenge it, which is, of course, inconceivable; Israeli nuclear weapons -- why bring up the Israeli nuclear arsenal, which actually exists and will assumedly be there in 2030, when you can focus on that fabulous black swan Iran and its (as yet) nonexistent nuclear arsenal.

You’ll find the Arab Spring discussed in passing, but not the Indian Spring. (You know, the one that occurred in 2023 in that youth-bulge of a nation when rising expectations met economic frustration.) You’ll read much about resource problems and potential resource wars, but not about the 800-pound gorilla in the global room. The single looming crisis threatening the well-being of the planet, climate change... For them, frack is the new crack

Our Deficit Debate's 'Sick Secret' Is Killing Us... Literally

... Our health care spending is 17.6 percent of GDP, compared with an average of 9.6 percent for all developed countries. (All figures are from the compendium of health and economic statistics published by the Organization for Economic Cooperation and Development (OECD), unless otherwise indicated.)

Total health spending (from all sources, not just insurance-related) averages $7,960 per person in the United States, versus an average of $3,233 for all developed countries.

If we spent the same on health as the average developed country (as a percentage of GDP) that would inject more than a trillion dollars per year into other parts of the economy. ($1.14 trillion, by my rough calculation.)

Bulk Chinese purchase creates baby food shortage in Australia

Australia has been hit by a scarcity of its biggest selling infant food, Karicare Aptamil Gold, which Chinese customers are buying in bulk to ship home, due to rising fears over the safety of infant foods.

There was a fellow posting here a while back talking about escaping/avoiding "poison food" in China.

Top 10 Chinese Food Scandals
Melamine Milk
Leather milk
Glow-in-the-dark pork
‘Sewer’ oil

Remember, regulation costs jobs!
The free market will decide!
(Has anyone else noticed that the spinal fungus, fungal meningitis from contaminated injectables, is being spun as an "outbreak" by the wholly-owned corporate (big pharma is corporate) news? ...as if it were something one "catches")

Netizen: List of Toxic Foods You Need to Know
Here is a list of 50 foods or products that have been tainted in varies of food safety incidents over recent years in China.

During the poison pet food incident, we learned that all those different brands, all those choices, were all made by one factory: The appearance of different companies competing was a grand American fraud.

Intense regulation and intense inspection with profound oversight is required. Have some American peanut butter?

We started to make our own dog food after our great young dog developed a brain cancer at 6 and our current pup kept getting skin problems from the 'expensive food'. We certainly buy little to none processed food for ourselves. We also try to always buy North American made tools and supplies knowing there are standards being met and jobs for our neighbours.

What happens to oil if Chávez goes?

As Venezuelan President Hugo Chavez’s health worsens, uncertainty surrounding his regime and control over his nation’s oil is on the rise.

“Venezuelan [oil] production has suffered under Chavez,” said Phil Flynn, senior market analyst at Price Futures Group. He “ruined the Venezuelan oil industry by breaking contracts with oil companies and taking money out to fund his socialist revolution … production has fallen far short of what it should have been.”

...“The upside oil price risk is the transition of power,” he said. “If it comes without violence, there will be no impact [to oil prices], but a loss by Maduro could easily be accompanied by civil unrest.”

Unless there is a 50% increase in drilling activity, the Organization of the Petroleum Exporting Countries has little to fear from over production by Venezuela, he said.

A significant increase in the nation’s production would require a rig count in excess of 100 rigs, he explained. “For this to happen, the Chavez policy of using PDVSA funds for social work and limiting capital investment in new production would have to be reversed. This is unlikely in the short term,” Williams said.

Nuclear Security Helicopters Testing Radiation Levels Above DC Area

Helicopters have been conducting radiation tests above portions of the Washington, D.C. area using remote gamma radiation sensing technology.

The National Nuclear Security Administration (NNSA) has been flying the radiation missions since Dec. 27, 2012 and they will continue until next Friday, Jan. 11. The flights have been conducted during daylight only, and the pilots fly about 80 miles per hour at 150 feet above the approximately 70-square mile radiation assessment area.

Naturally-occurring radiation is measured so that baseline levels can be established and used in security and emergency preparedness, reads a statement from the NNSA.



The Next Chernobyl?: Will Iran’s Nuclear Program Kill Millions Without Launching a Missile?

Iran could accomplish many of its goals, breaking its Sunni Gulf rivals and attacking the US presence through sheer incompetence, real or pretend.

... A Chernobyl-type nuclear meltdown in Bushehr would not only inflict severe damage in southern Iran, but also in the six oil and gas-rich Gulf Cooperation Council countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Indeed, the capitals of those states are closer to Bushehr than Tehran. Nuclear radiation in the air and water would disrupt the Strait of Hormuz shipping, the world’s most important oil choke point. Oil prices would skyrocket. The world economy would face a hurricane.

With prevailing winds blowing from east to west in the gulf, and coastal currents that circle counterclockwise, radiation fallout would contaminate oil fields and desalination plants that provide fresh water for local inhabitants.

And if the failure that causes the meltdown is due to Stuxnet v 2.0? That would be quite an example of blowback!

Jan 5, 2013
Op-Ed: Possible nuclear disaster in Esfahan
In the city of Esfahan, Iranians have been ordered to evacuate the area possibly because of a nuclear reactor leak. Analysts believe that damage may have occurred to Iran's nuclear enrichment research facility in Esfahan.
On 3 January 2013, BBC Persian reporting Iranian officials ordered the evacuation of the city due to, “pollution has now reached emergency levels,” according to Jerusalem Post.

Report: Iran orders evacuation of Isfahan, near nuke site
Iranian officials on Wednesday ordered residents of Isfahan to evacuate the city, the BBC reported, sparking renewed concern a nearby uranium enrichment site is leaking radioactive material.
According to the report, the edict calls on Isfahan's one-and-a-half million people to leave the city “because pollution has now reached emergency levels.”

The Nuke Conspiracy: Is Iran evacuating a city due to radiation leak?
The Alternative Media is a buzz today with the rumor that a radiation leak is behind the sudden evacuation of Isfahan, Iran.


Story goes back to November. Uranium is not intensely radioactive, not like the byproducts made by burning it in a reactor are.

I think this story is nonsense. International flights continue to/from Isfahan airport. Anyone can fly in with Geiger counters or more sophisticated detectors and that includes the IAEA who monitor the facility. There has been no mandatory evacuation of Isfahan other than that hallucinated by some western media. You can buy a return trip from Istanbul to Isfahan on Turkish airlines for only 99 Euros right now - next flight Sunday. Non nuclear pollution is high though.

From Chatham House ...

Through the Dragon Gate? A Window of Opportunity for Northeast Asian Gas Security

•In the coming decade, Northeast Asia will become a major market for gas, led by China, which plans to quadruple its gas demand by 2030.

•Securing stable and affordable imports will be essential to plans to reduce carbon intensity in China and Korea, and potentially to fill the gap left by the nuclear shutdown in Japan.

•Negotiations for piping Russian gas to China have remained in deadlock for a decade but new pipeline routes to take gas to South Korea through North Korea or China could move forward in 2013, with security implications for all sides.

•Several factors are altering the market context, including prospects for unconventional gas production in China and the potential for future supplies of liquefied natural gas (LNG) from East Africa and the United States.

•The next few months will be crucial for decisions on the entry of Russian pipeline gas to China. Missing the opportunity will deprive both countries of a win–win solution to their energy and development problems, and increase future global LNG prices.

•Closer collaboration between Russian and Chinese national oil companies and a gas-importers union between China, Japan and South Korea would support an equitable pipeline deal and lay the foundations for regional energy security.

Sending Gas East: Sino-Russian Relations, Routes and Regional Security

The Reverend Stirling invented the stirling cycle engine, please give him the credit, and don't call it "Sterling".

Has anyone mentioned the fact that stocks dropped 11,120,000 barrels last week? They dropped from 371,059 thousand barrels to 359,939 thousand barrels. Total imports dropped by 1,236,000 barrels per day from 10,273 kb/d to 9,037 kb/d.

I thought it might have something to do with the holidays but it did not happen last year.

Ron P.

Exxon to Spend $14 Billion on Hebron Field Off Canada

Exxon Mobil Corp. (XOM) and four partners will spend about $14 billion to develop the Hebron oil field off the coast of Canada that has lain fallow since its discovery more than three decades ago.

The field, located about 350 kilometers (218 miles) southeast of St John’s, Newfoundland and Labrador, will produce more than 700 million barrels of crude during its lifespan, Irving, Texas-based Exxon said in a statement today. At current prices, that oil would be worth about $77.8 billion.

Daily output from the field is expected to peak at 150,000 barrels after production begins in 2017, Exxon said. Discovered in 1980, Hebron is one of a string of multibillion-dollar projects Chief Executive Officer Rex Tillerson is pursuing to reverse production declines. Exxon’s output has fallen five straight quarters, the longest run of declines since 2008-2009, according to data compiled by Bloomberg.

--- snip ---

Oil production from Newfoundland fields declined 29 percent during the first nine months of 2012, the provincial department of finance said on its website.

Let's see...

  • Kulluk on the rocks and the same could be said for Royal Dutch Shell's Arctic plans
  • Thunderhorse and other DW GOM projects dissapointing
  • Alaska in decline
  • Offshore Newfoundland also in decline

Thank goodness for the Bakken! /sarc

Hebron will delay Newfoundland's production decline for a while, but I hope they are planning for the day when it all ends.

It's amazing what they will spend $14 billion to develop an oil field of only 700,000 barrels, but I guess that is the best that is left for Exxon. After that there's - nothing. Well, actually, oil sands but that is an entirely different game.

Duplicate. This seems to happen a lot. You hit "enter" twice because it didn't seem to work the first time and you get two postings.

Where do you see an "enter" button?
I only see a "Save" and "Preview" button.

Okay, most likely I click on "Save" twice, or click on "Save" and then hit the "Enter" key on the keyboard when it doesn't seem to work. Either way, it's not a good idea.

Yes. PLEASE have a little patience. Don't keep banging on keys. It's not going to make the server work faster. Quite the opposite.

Idle No More

Idle No More is an ongoing protest movement originating among the First Nations, Metis and Inuit peoples and their non-Aboriginal supporters in Canada, and to a lesser extent, internationally. It has quickly grown and garnered worldwide support from other indigenous peoples as well as sympathetic non-indigenous individuals and groups.[1] It has consisted of a number of political actions worldwide, inspired in part by the hunger strike (limited to solid foods) of Attawapiskat Chief Theresa Spence[1] and further coordinated via social media. A reaction to alleged abuses of indigenous treaty rights by the Harper government, the movement takes particular issue with the recent omnibus bill Bill C-45.

Related: From July 2012...

Former Conservative Environment Minister Prentice Warns Harper Govt. on Ignoring First Nations

One section of Prentice's [ is now the senior executive vice-president and vice-chairman of the Canadian Imperial Bank of Commerce] piece is worth repeating verbatim:

To begin, however, the constitutional obligation to consult with first nations is not a corporate obligation. It is the federal government's responsibility.

--- snip ---

Keep in mind that CIBC has a huge vested interest. First Nations youths have already warned CIBC not to finance Enbridge's Northern Gateway Project.

"CIBC should catch up with Royal Bank and TD Bank, which have already committed to recognize our right to consent," Jasmine Thomas, a 24-year-old member of the Yinka Dene Alliance, said in a news release last year. In other words, CIBC is in the sights of First Nations activists to a greater degree than other banks.

It's probably too late now for consultation!


I believe this is all in response to the extremely high birth rates on reserves that already have no employment prospects. While it seems like racism, (and it is great to cast this stone if you hate the Conservatives) it would not have happened if this was not the case. It is not at all unusual for kids to have babies at 13 years of age on these remote reserves....and how do I know this? I work with many who have done exactly that!! Plus, my job for 20 years was to fly into remote reserves. Return to the plane...and there are a bunch of kids on the wing dipping socks in the fuel tank for a good sniff and high. It is a mess and I don't know what the answer is, only that if my daughter had had a child at 13 her life would be in the toilet and if I hadn't had to move where the work was we would have had to live in a shack with little food and...oh yeah. And when I say move to where the work was I mean packing lumber on job sites until I was able to pound nails and learn to be a carpenter...in all Canadian weather. Did I miss my family? Sure, I phoned home on Sundays.

The welfare state/situation with high birthrates is unsustainable, pure and simple. I don't have an answer but I think people need to start looking at the facts and stop being afraid to tell the truth. There are absolutely no jobs in the middle of nowhere and the high birthrate is in place because the system provides sustenance not based on the carrying capacity of the local environment. There is some work in eco tourism and big game hunting...trapping, hard rock drilling for potential mine sites, but if all the mines get stopped then there are no jobs for anyone in the area. As an aside I spent one day 'holding' at a northern reserve village and watched the same trucks and cars circle around all day on the 1 mile of road built on the bedrock along Great Slave lake. Around and around they drove, stopping, visiting, jumping out and play fighting only to do the loop and do it all over again. Where did the gas come from? On the winter road, of course.

This whole situation is crazy and it is not racism. The lack of real solutions is based on guilt and the fear of being labeled a racist. These folks need jobs and education, but eventually everyone has to move where the work is or starve.

Respectfully, Paulo

Noticed this in Jim Hansen's Master Resource Report for this past week (web site)...

Chesapeake Drills Unsuccessful Wells in Southwest ND

Dickinson, ND - In 2012, North Dakota made oil headlines by taking over as the number two producer in the nation.

While production continues to ramp up daily, there is one part of western North Dakota were the excitement of oil has gone bust.

Chesapeake's attempt to find the southern edge of the Bakken, is being described as the largest failure in drilling in the state since the 1980's.

There are a few well sites in western North Dakota that look more like ghost towns than multi-million dollar holes.

Chesapeake secured leases in a large part of the state, south of I-94.

They drilled 8 wells, only 3 produced oil -- but at minimal amounts.

So little that all holes have been shut in.

Director of Mineral Resources for the state of North Dakota, Lynn Helms, says "geologically, there were some surprises. We knew that there wouldn't be any lower Bakken Shale in that area. What surprised us was to find out there's no upper Bakken Shale in that area."

Chesapeake's wells, a bust.

It's the largest failure in recent oil history in North Dakota.

"That pretty much condemns an area, if you don't have Bakken present, the risk for finding oil goes way up and you need to have some structure," says Helms.

Great video of that Bakken failure can be found here: Chesapeake Drills Unsuccessful Wells in Southwest ND

Ron P.

"Geologically there have been some surprises"

Lynn Helms, ND Oil & Gas


1 well out of 8 produces oil with a 90% water cut.

I particularly like the part of at the end where voices declare that all is not lost, Chesapeake will be back, there is still hope for the area. I guess the locals have their hopes up pretty high that they will get their slice of the pie.

And to add insult to injury, the video says that Chesapeake will have to reenter the well sites or abandon them soon. The state allows a non-paying well to stay on the landscape for just a year. Ouch.

According to the news caster Chesapeake was trying to find the southern boundary of the Bakken. Hey, they succeeded! Way to go!

So, 8 wells cost $60 million WITHOUT lease costs factored in. That's comes to more than $7.5 million per well, that's more than what I've been reading bakken wells cost to drill.

Wow... a climate change story in the NYTimes sports section!

Rinks in Canada’s Arctic Turn to Cooling Systems

It has been too warm for December hockey in the Arctic, the latest sign that climate change is altering the environment and the way people live — especially in the far north, where the effects of rising temperatures are most pronounced.

Nine of the 14 villages in Nunavik, a region in northernmost Quebec, have installed cooling systems at community arenas within the last five years.

--- snip ---

“We used to have natural ice in the arena in October, but that hasn’t happened for a long time,” said Mike Hayward, a Cape Dorset town official. Now the ice isn’t fit for hockey until mid-January, he said. That is why a cooling system is being installed in the building.

The Canadian environmental ministry reports that the country is warming more than twice as fast as the world as a whole, with annual average temperatures in Canada up about 2.7 degrees Fahrenheit since 1948. The warming in winter is even faster, almost 6 degrees Fahrenheit over the same period, and scientists have documented a substantially shorter outdoor skating season as a result.

Thank God for the Canadian oil sands so at least they can have an economy that supports artificially cooled ice hockey rinks in December in the Arctic!
And we haven't even hit 2 degrees Celsius of global warming yet. Can't wait to see what happens when we get to 3 or 4 degrees Celsius.

Heirs of Mao’s Comrades Rise as New Capitalist Nobility

In three decades, they and their successors lifted more than 600 million people out of poverty and created a home-owning middle class as China rose to become the world’s second-biggest economy. Chinese on average now eat six times more meat than they did in 1976, and 100 million people have traded in their bicycles for automobiles.

The Immortals also sowed the seeds of one of the biggest challenges to the Party’s authority. They entrusted some of the key assets of the state to their children, many of whom became wealthy. It was the beginning of a new elite class, now known as princelings. This is fueling public anger over unequal accumulation of wealth, unfair access to opportunity and exploitation of privilege -- all at odds with the original aims of the communist revolution.

The more things appear different, they more they stay the same.


Even In Sweden There's Not Much Real Social Mobility

A productive line of recent research has shown there's much less social mobility in the United States than we like to think. That same research has tended to find much more mobility in the Nordic countries where, for example, a father's earnings are much less statistically predictive of a son's earnings. But UC Davis economic historian Gregory Clark asks what happens on a longer time frame and finds that even in Sweden there's not that much mobility.

The research is a bit complicated, but the chart above illustrates a key finding. What Clark is doing is an analysis of surnames. Sweden stopped minting new noble houses in the seventeenth century, so we can be sure that anyone with one of those noble surnames in the 21st century is patrilineally descended from a high status man from hundreds of years ago. By contrast, low status Swedes tended to end up with patronymic surnames ending in "sson" illustrative of a lack of noble status or noteworthy occupational skil

Maybe Jedi can comment on this.

The unwelcome renaissance: Europe’s energy policy delivers the worst of all possible worlds

I think this phenomenon has been shown elsewhere (e.g. South Australia) and will get more attention. The ingredients are mandated renewables, a high gas price, weak carbon penalties and prohibition of nuclear. The idea was that intermittent wind and solar would be mainly load balanced by hydro and efficient combined cycle gas. Instead high carbon backup is used mainly coal and some open cycle gas. The result is expensive electricity with unsatisfactory emissions savings. Mandated wind power plus high carbon backup is not least cost for a given level of emissions.

In other words under some circumstances high penetration renewables can backfire as an emissions saver. I think the correct approach is to set a tough CO2 cap with no freebies and let the players work out where wind and solar fit in the mix. Other components of this mix could include rewards for using less. My guess is that wind will work out about 20% of the generation mix, not the 30-40% the Europeans seem to be aiming for.

The article is contradicted by data of the EIA:


With the exception of Poland none of the larger economies has increased its coal consumption until 2011.

You didn't read the article did you? If you had you would see it talks about the huge increase in coal use for generating electricity that has happened since 2011 due to the fall in price making it cheaper to generate electricity from coal than gas. As the article points out even in Britain coal has overtaken gas as the dominant source of fossil power generation in 2012. Wind in the UK is currently displacing natural gas not coal. That will change if pricing makes gas competitive again (or penalties are imposed).

So the article is not contradicted by your EIA link.

... the correct approach is to set a tough CO2 cap with no freebies and let the players work out where wind and solar fit in the mix. Other components of this mix could include rewards for using less.

That would be too sensible ... to pay someone less than it costs to wastefully consume. Hard to say what would happen if that were to catch on ... people might not consume anything!

Where would industry be, then?