Drumbeat: March 27, 2013
Posted by Leanan on March 27, 2013 - 10:45am
Quake Tied to Oil-Drilling Waste Adds Pressure for Rules
Scientists have linked Oklahoma’s biggest recorded earthquake to the disposal of wastewater from oil production, adding to evidence that may lead to greater regulation of hydraulic fracturing for oil and gas.The 5.7-magnitude quake in 2011 followed an 11-fold bump in seismic activity across the central U.S. in recent years as disposal wells are created to handle increases in wastewater from hydraulic fracturing, or fracking.
Researchers at the University of Oklahoma, Columbia University and the U.S. Geological Survey, who published their findings yesterday in the journal Geology, said the results point to the long-term risks the thousands of wells pose and shows a need for better monitoring and government oversight.
Parts of Low Country Are Now Quake Country
This is not Haiti. The worst tremor, last August, had a magnitude of 3.4, hardly enough to cause widespread devastation. Yet the number of claims for damaged property is already in the thousands, and the company extracting the gas, a consortium of Shell and Exxon Mobil, has set aside $130 million for measures to strengthen buildings against the shocks. Yet most troubling is that experts at government agencies are predicting that the quakes will worsen, to between a magnitude of 4 and 5.Is the big one yet to come? Mr. Kadyk, 62, a retired city employee, pointed to cracks around doors and windows in his two-story brick home. He said he was “not an expert, so I cannot say yes or no, but the real experts say if we don’t stop extracting gas, the country risks further earthquakes.”
The Reward for Being Right About Peak Oil: Scorn Heaped With Derision
Right before the end of the millennium, the clues started piling up. The world had been scoured many times over in the quest for the ultimate bounty, gushers of light sweet crude. Discoveries of new oil had peaked in the decade of the 1960s and had been falling ever since. Supergiants, the oilman's term for those wells capable of pushing out a million or more barrels a day, were no longer being found, and the ones in extraction were starting to accelerate in their decline, from Prudhoe Bay to Ghawar Field to Cantarell Field. Sure, there was other "oil" out there, but it was trapped in very deep water, or stuck in tight rock formations that had to be fractured at great expense for the oil to come out. These plays could be worked, but only if the price of oil stayed very high, and even then the flow rates would never match those of the supergiants and giants that the world depended on for its tens of millions of barrels required each day for the economy to keep humming.So former oil geologists like Colin Campbell and Ken Deffeyes started ringing the alarm bell. "Hey!" they shouted at the top of their lungs, "we can't maintain this flow of oil forever! Even if we use all the non-conventional sources like tar sands, Arctic oil, etc the amount is going to get less and less over the course of this century. And those other kinds of oil are a lot dirtier and carbon-intensive than the oil we've been using!"
What did they predict? And how close were they to being right? Let's take a quick look, lest we get overwhelmed with the cornucopian hyperbole that bombards us every day.
Will New Oil Supplies Slow the Transition to Green Transportation?
What if peak oil doesn’t take care of gas-guzzling by cutting off the supply?The Saudi oil fields may be finite, but new sources like the Canadian tar sands and the North Dakota oil shale keep opening up. That poses a challenge to the shift away from carbon-intensive transportation, according to Deborah Gordon, who studies transportation oils at the Carnegie Endowment’s Energy & Climate Program.
“The real paradigm shift in the past year is abundance,” Gordon said last Friday at the book launch for Transport Beyond Oil, a new examination of the possibilities for transforming transportation.
Do high natural gas prices mean the shale boom is ending?
As U.S. natural gas prices flirt with the $4 mark, some skeptics of the so-called shale gas revolution think prices are headed much higher. Such a move would, not surprisingly, seriously undermine the official story that the United States has a century of cheap natural gas waiting for the drillbit.
WTI Drops From Near Five-Week High; BofA Predicts Backwardation
West Texas Intermediate slipped from near a five-week high amid rising crude inventories in the U.S., the world’s biggest consumer of the commodity.Futures fell as much as 0.8 percent. Crude stockpiles advanced 3.7 million barrels last week, the American Petroleum Institute said yesterday. An Energy Department report today may show a gain of 1.3 million, according to a Bloomberg News survey. The euro fell to its weakest level since Nov. 21 against the dollar, undermining the appeal of commodities priced in the U.S. currency. Bank of America Corp. said front-month WTI contracts may start trading at a premium, a price structure known as backwardation.
British gas production outages keep prices high
(Reuters) - British wholesale gas prices remained high in volatile trading on Wednesday, as several production outages restricted supplies to the system amid high demand and low stored reserves."The market is choppy.. if something drops off the network people get very nervous," a trader from a European utility said.
Canada annual inflation rate rises to 1.2 pct, off a 3-year low
OTTAWA (Reuters) - Higher prices for gas and autos helped push Canada's annual inflation rate in February up to 1.2 percent from a three-year-low of 0.5 percent in January, Statistics Canada said on Wednesday.The rate, above the 0.8 percent predicted by market operators, is still well below the Bank of Canada's 2.0 percent target. The central bank is not expected to raise rates until late in 2014.
Inflation rose by 1.2 percent in February from January, a month-on-month jump not seen since the 1.2 percent recorded in January 1991, when the federal goods and services tax was introduced.
FACTBOX - Firms spur Fujairah oil storage expansion
(Reuters) - Oil storage capacity just outside the Strait of Hormuz is important for companies which ship the fuel to Asia, especially after Iran last year threatened to block the world's most important oil shipping route. The port of Fujairah, in the United Arab Emirates, opened a pipeline last year that will allow Abu Dhabi crude to be exported without having to sail through Hormuz. Plans at the port include petrochemical facilities, floating LNG terminals and even grain silos. Firms provided updates this week at a Fujairah bunkering and oil forum organised by Conference Connection.
Good times finite, says economist
The economies of the Arabian Gulf are set to benefit from a massive increase in public spending over the next three years before hitting a "revenue ceiling", an influential conference in Abu Dhabi heard yesterday.Simon Williams, the chief economist at HSBC for the Middle East, warned delegates that although public spending in the UAE, Qatar, Bahrain and Saudi Arabia had trebled over the past five or six years, budget deficits would start to re-emerge in the region over the next two or three years.
Saudi Aramco aims to be world's top oil refiner
The CEO of Saudi Arabian Oil Company (Saudi Aramco) has said the company expects to become the top producer of refined products such as fuel and petrochemicals.Already the world’s biggest crude exporter, CEO Khalid Al-Falih told a conference in Beijing: “In the years to come, we will become the world’s single largest oil refiner,” adding that Aramco remains “committed” to plans to build an oil refinery in the southwestern province of Yunnan in China.
Shell and partners discuss improved oil production
The Royal Dutch Shell, one of the world’s largest oil companies, invited representatives at its joint oil ventures in the region for a second workshop in Abu Dhabi to discuss safety at crude facilities and improved hydrocarbon production.More than 80 officials and experts from Shell, key oil firms in the UAE as well as hydrocarbon producers in Oman and other countries in the Middle East attended Tuesday’s workshop on operational excellence at major oil facilities in the region.
Major Oil Companies to Testify on Oil Tax Change
Representatives of the North Slope's three major players are scheduled to testify Tuesday before a House committee on proposed changes to Alaska's oil tax structure.The House Resources Committee is working on SB21, which is aimed at making Alaska more competitive for investment dollars and increasing production.
Falkland Oil Claimed by Argentina Sees Islanders Join 1%: Energy
The Falklands’ first commercial oil discovery will make the islands in the South Atlantic rich, bringing the British territory of 2,563 people $10.5 billion in tax revenue over 25 years.As the bounty transforms the fishing and tourism-dependent economy, tensions may worsen with Argentina, which claims sovereignty over the islands and their mineral wealth. The Latin American country last year threatened to sue any company involved in Falklands drilling and its foreign minister said yesterday the islanders have no right to self-determination.
Petrocaribe: Paying beans for Venezuelan oil
Some 17 countries receive shipments of crude or refined oil products with preferential repayment terms under the Petrocaribe energy pact. But some nations fear oil shipments could stop post-Chávez.
Petrobras said to auction $5 billion of Nigeria oil assets
(Reuters) - Brazilian oil company Petrobras is to auction off its stakes in Nigerian oil fields to raise cash for domestic projects, a deal that may fetch up to $5 billion, sources close to the deal said.
Iraq's February oil output rises marginally to 2.963 million b/d
Amman (Platts) - Iraqi oil production rose slightly in February to 2.963 million b/d, up by 43,000 b/d over the previous month, but remained stubbornly below the 3 million b/d mark for the third month running, figures obtained from the oil ministry showed Wednesday.
China's proven oil, gas deposits surge
BEIJING (Xinhua) -- China's crude oil and natural gas reserves discovered within its mainland saw sharp rises last year, a natural resources official said on Wednesday.Xu Dachun, vice director in charge of resources exploration with the Ministry of Land and Resources, said China found 1.52 billion tonnes of new crude deposits in 2012, up 13 percent year on year. Of them, 270 million tonnes can be exploited with current technologies.
China Revises Fuel-Price Controls; Sinopec, PetroChina Gain
China, the world’s second-biggest oil consumer, changed its system for setting gasoline and diesel prices to more closely track refiners’ crude costs. Shares in China Petroleum & Chemical Corp. and PetroChina Co. rose.Retail price adjustments will be based on the average cost of a basket of crudes over 10 working days, down from 22 days previously, and a threshold for triggering a revision will be abolished, the National Development and Reform Commission said in a statement on its website yesterday. The NDRC also cut gasoline and diesel prices for the first time in four months, effective today.
Natural gas price hike denied after rumours spark panic buying
Authorities denied rumours of a nationwide hike in natural gas prices after long queues were seen outside natural gas selling stations in a number of cities across China.
Sasol Gas Prices Will Cut Competitiveness, S. Manufacturers Say
The South African energy regulator’s decision to set a maximum gas price for consumers of the fuel will undermine competitiveness in the continent’s largest economy, the Manufacturing Circle said.
South Africa Must Cut Power Use By 15 Percent: Minister
South Africa must cut power consumption by 10 percent to 15 percent to avoid a repeat of rolling blackouts that crippled the mining industry in 2008, Energy Minister Dipuo Peters said.“South Africans are starting to realize that we need to use energy efficiently,” Peters said in an interview in Durban yesterday. State-owned utility Eskom Holdings SOC Ltd. may be able to avoid blackouts with reduced consumption, she said.
Turkey suspends projects with ENI over Cyprus activities
ANKARA (Reuters) - Turkey has shelved its planned projects with Italy's ENI over the energy company's involvement in energy exploration in Cyprus, Turkey's Energy Minister Taner Yildiz told reporters on Wednesday.
Uganda: No Clear Date for Oil Production
There is uncertainty regarding the time frame for reaching peak oil production, revenue generation and even when oil production will begin. Since commercial reserves were confirmed five years ago in 2008, oil companies and government officials have come up with many production time frames, some of which have passed.Such unrealistic pronouncements have increased speculation, fuelling high public expectations and tensions on the sharing of the oil revenues. Efforts to explore for oil and gas in the Lake Albert basin yielded dividends when over 3.5 billion barrels of oil reserves were confirmed.
Lessons from Fukushima, two years on
Companies have valuable lessons in transparency to glean from the Fukushima disaster, said the author of an independent report on the accident that famously called it "Made in Japan".Dr Kiyoshi Kurokawa, the chairman of the committee appointed by Japan's parliament to investigate the March 2011 triple meltdown at the Fukushima Dai-ichi nuclear power station, blamed a lack of transparency and a fear of authority for the extent of the crisis in the landmark 641-page report published last year.
Audit Faults Stimulus-Backed $1.5 Billion U.S. Clean-Coal Effort
Poor management has hampered a U.S. program to develop technology to capture carbon-dioxide emissions, the Energy Department inspector general said in a report that raises new questions about a clean-energy initiative backed by the 2009 economic stimulus.In total, the Energy Department received $1.5 billion in the American Recovery and Reinvestment Act to invest in technology that responds to climate-change risks. Carbon dioxide is a greenhouse gas that most scientists think is making the planet hotter.
U.K. Clean Energy Rules to Add 36% to Company Power Bills
U.K. measures to curb carbon emissions may raise power and gas bills for the biggest corporate consumers by as much as 36 percent by 2020, the Department of Energy and Climate Change said.Energy-intensive companies will see energy bills soar by as much as 5 million pounds ($7.6 million) a year due to carbon taxes and support for nuclear and renewable energy, according to a study e-mailed today by the department. Medium-sized companies face an average rise of 22 percent, or 330,000 pounds.
Rising energy bills will be reduced with climate policies, Ed Davey says
The impact of rising household energy bills will be greatly reduced by climate change policies which could save consumers around £166 by 2020, according to the energy and climate secretary, Ed Davey.Analysis by the Department of Energy and Climate Change (Decc) published on Wednesday showed that 85% of the present average £1,250 bill cannot be controlled by the government because it is determined by international gas and electricity prices, transmission and metering costs. After energy companies have taken their profits, and VAT has been paid, government policies can only influence around 11% of the bill, said Davey.
The UK has the power to fill the energy gap
We have been given a glimpse of the future if we fail to make the most of the abundant resources we have here in the UK. On Monday last week, Denmark produced enough energy from wind power to satisfy the whole country’s electricity demand. Wind is not a silver bullet, but it must be an important part of the energy mix in the years to come if we are to meet the challenge of greater energy security, cheaper costs and cutting carbon emissions. For those who would ignore the potential of renewables, Friday provided a fantastic example of what we would be missing.
Millions in fuel poverty as energy bosses pocket £16.4m payout
Five bosses at the company that runs British Gas shared a £16.4 million pay bonanza last year as millions of families faced record energy bills, it was revealed today.The six per cent rise in the salary, bonus and benefits for Centrica directors was condemned as “insensitive beyond belief” as households run up huge bills trying to keep warm in the coldest spring for 30 years.
Brazil Soy Boom Bottlenecked as China Left Waiting
Erai Scheffer, the world’s largest soybean farmer, bought 200 trucks for this crop to counter the worst transportation breakdown in Brazil’s history. In China, undelivered cargoes mean buyers may turn to Argentina as Brazil falters on its ability to become the top global supplier.“In 30 years, I’ve never seen anything like this,” Scheffer said by phone from Cuiaba, in Brazil’s Mato Grosso state, an agriculture powerhouse three times the size of Italy. “I’m worried because the mid-season corn harvest is approaching and will likely worsen the situation at ports even more.”
Fredriksen Bets $2.6 Billion New Ships Will Beat Glut
John Fredriksen, the richest shipping investor, is spending $2.6 billion on the biggest fleet of fuel-efficient ships in history, betting that record energy costs and a global capacity glut won’t ease any time soon.
Can Wind Turbines Make You Sick?
A new syndrome appears to be highly contagious.
Ireland extends key renewables programme
IRELAND: Irish energy minister Pat Rabitte has extended the country's wind support programme, known as Refit 2.
Bulgaria to Suspend Up to 40% of Wind, Solar Power Capacity
Bulgaria may suspend as much as 40 percent of wind and solar power capacity as part of its effort to stem oversupply and stabilize electricity generationAbout 40 percent of wind and solar power producers aren’t providing real-time information to the country’s central electricity dispatcher, jeopardizing the safety of Bulgaria’s transmission network, Energy Minister Asen Vasilev said in a document posted on the ministry’s website. They will be temporarily disconnected, he said.
GS Caltex to mass-produce alternative fuel this year
GS Caltex is aiming to commercialize biobutanol as a renewable fuel for cars that could be used as a substitute for gasoline later this year, market insiders in the oil refinery industry said Wednesday.The company has reportedly set the launch for the fourth quarter of 2013. It is operating a factory which has the capacity to produce biobutanol from sugar or wood under a joint research project with the Korea Advanced Institute of Science and Technology.
Northern Calif. city installs free Wi-Fi through upgraded electric meters
SANTA CLARA, Calif. — The city of Santa Clara flipped on a big Internet switch this week, becoming what it says is the first in the country to use wireless, digital “smart meters” on homes as channels for free citywide outdoor Wi-Fi.
Are Your Palm Sunday Palms Bad for the Environment?
March 24 is Palm Sunday, which means that millions of Christians across the country will be celebrating Jesus' entrance into Jerusalem by carrying palm leaves, often shaped in the form of a cross, into their places of worship. Where do these palms come from? Most likely they have been imported from one of a few Latin American countries: Guatemala, Belize, or southern Mexico, for instance. And most likely they have been harvested in a manner that is harmful to the environment. Harvesters are often paid by volume rather than quality, and they have a strong incentive to cut as many leaves as possible, without paying attention to what this reckless cutting is doing to the fragile forests of one of the world's most important ecological regions.
These Singaporean Fairy Tales Will Give You Fertility Nightmares
With an aging population and shrinking workforce, there’s little doubt Singapore takes population growth seriously—according to figures from the Atlantic, it spends around $1.3 billion annually trying to convince couples to do the deed.But the government has taken to patronizing young women with a series of reworked “fairytales” that warn them that their biological clock is ticking.
To Save the King of the Jungle, a Call to Pen Him In
After 35 years of field research in the Serengeti plains, Craig Packer, director of the Lion Research Center at the University of Minnesota, has lost all patience with the romance of African wilderness. Fences, he says, are the only way to stop the precipitous and continuing decline in the number of African lions.“Reality has to intrude,” he said. “Do you want to know the two most hated species in Africa, by a mile? Elephants and lions.” They destroy crops and livestock, he said, and sometimes, in the case of lions, actually eat people.
Peru declares environmental state of emergency in its rainforest
Peru has declared an environmental state of emergency in a remote part of its northern Amazon rainforest, home for decades to one of the country's biggest oil fields, currently operated by the Argentinian company Pluspetrol.Achuar and Kichwa indigenous people living in the Pastaza river basin near Peru's border with Ecuador have complained for decades about the pollution, while successive governments have failed to deal with it. Officials indicate that for years the state lacked the required environmental quality standards.
EPA: More than half of U.S. rivers unsuitable for aquatic life
WASHINGTON — Fifty-five percent of U.S. river and stream lengths were in poor condition for aquatic life, largely under threat from runoff contaminated by fertilizers, the U.S. Environmental Protection Agency said on Tuesday.High levels of phosphorus and nitrogen, runoff from urban areas, shrinking ground cover and pollution from mercury and bacteria were putting the 1.2 million miles of streams and rivers surveyed under stress, the EPA said.
New Mexico Farmers Seek ‘Priority Call’ as Drought Persists
CARLSBAD, N.M. — Just after the local water board announced this month that its farmers would get only one-tenth of their normal water allotment this year, Ronnie Walterscheid, 53, stood up and called on his elected representatives to declare a water war on their upstream neighbors.“It’s always been about us giving up,” Mr. Walterscheid said, to nods. “I say we push back hard right now.”
The drought-fueled anger of southeastern New Mexico’s farmers and ranchers is boiling, and there is nowhere near enough water in the desiccated Pecos River to cool it down. Roswell, about 75 miles to the north, has somewhat more water available and so is the focus of intense resentment here. Mr. Walterscheid and others believe that Roswell’s artesian wells reduce Carlsbad’s surface water.
EU to Start Debate on Energy, Climate Rules Amid Crisis
The European Union’s executive will start a debate today on EU climate and energy rules as the crisis-ridden bloc seeks a long-term plan to cut greenhouse gases and promote clean power technologies.The European Commission is scheduled to publish about midday Brussels time a consultation paper to seek opinions from member states, the European Parliament, industry groups and non- governmental organizations on EU objectives for 2030.
Brics countries cook the climate
AS THEY meet in Durban, leaders of Brazil, Russia, India, China and South Africa (Brics) must own up: they have been emitting prolific levels of greenhouse gases, far higher than the US or the European Union in absolute terms and as a ratio of gross domestic product (though less per person). How they address this crisis could make the difference between life and death for hundreds of millions of people this century.
Governors Ask Obama to Weigh Climate Impact of Coal Ports
President Barack Obama’s administration should weigh the climate-change impact of burning coal in Asia when considering whether to approve Pacific coal- export terminals, two Western governors said.In a letter to the White House Council of Environmental Quality, the Democratic governors, John Kitzhaber of Oregon and and Jay Inslee of Washington, said the administration must expand its review of the projects and consider the carbon dioxide that would be released when the coal is burned for power. Collectively, three proposed terminals, which the Army Corps of Engineers is reviewing, would result in the export of up to 100 million tons of coal a year, they said.
US emissions decline, coal exports rise
Emissions by the US of greenhouse gases are still coming down – within the USA itself. But American exports of coal, and now of shale gas, are on the rise, in effect exporting the pollution which has been avoided at home.
B.C.’s push for carbon neutrality falters
A scathing report by B.C.’s Auditor-General concludes that the provincial government has failed in its efforts to achieve a carbon-neutral public sector.B.C. has long bragged it was the first government in North America to become carbon neutral by requiring schools, hospitals and other government institutions to spend millions buying carbon offsets to make up for their greenhouse-gas emissions.
Senate energy and climate change votes point to EPA as key decider
Hurricane Sandy last year pushed the issue of climate change higher on the nation’s agenda. President Barack Obama indicated in his inaugural address and his State of the Union address that climate policy would be a priority for his second term. Some members of Congress said Sandy might cause Congress to redesign infrastructure spending to limit damage from future catastrophic storms.A series of Senate votes Friday indicated what the political balance now is on energy policy and on measures to avert climate change.
New York State Tells Investors That Climate Change May Hurt Its Finances
ALBANY — In the wake of Hurricane Sandy, the administration of Gov. Andrew M. Cuomo has started to caution investors that climate change poses a long-term risk to the state’s finances.The warning, which is now appearing in the state’s bond offerings, comes as Mr. Cuomo, a Democrat, continues to urge that public officials come to grips with the frequency of extreme weather and to declare that climate change is a reality.
Shore Rebuilding, Renters Go South for Summer
ORTLEY BEACH, N.J. — In a typical summer, Terriann and Joseph LoVerde’s rental here makes for a listing a real estate broker called a real moneymaker.A block from the beach! Walk to town! Two units and a cottage in back — bring the extended family!
This year, they would have to include a few caveats: Hurricane Sandy wiped out walls and windows, after washing away three houses between the LoVerdes’ and the beach.
Federal plan aims to help wildlife adapt to climate change
WASHINGTON — The Obama administration Tuesday announced a nationwide plan to help wildlife adapt to threats from climate change.Developed along with state and tribal authorities, the strategy seeks to preserve species as global warming alters their historical habitats and, in many cases, forces them to migrate across state and tribal borders.
Tomatoes, peppers, strawberries in Greenland's Arctic valleys
KANGERLUSSUAQ, Greenland (Reuters) - On the Arctic Circle, a chef is growing the kind of vegetables and herbs - potatoes, thyme, tomatoes, green peppers - more fitting for a suburban garden in a temperate zone than a land of Northern Lights, glaciers and musk oxen.Some Inuit hunters are finding reindeer fatter than ever thanks to more grazing on this frozen tundra, and for some, there is no longer a need to trek hours to find wild herbs.
Welcome to climate change in Greenland, where locals say longer and warmer summers mean the country can grow the kind of crops unheard of years ago.
Booming Coastal Population Heightens Extreme Storm Risk
Everyone wants to live near the beach, it seems.Nearly 11 million more Americans will move to the coasts by 2020, putting more of the population at risk from extreme coastal storms, according to a report released today (March 25) by the National Atmospheric and Oceanic Administration. The nation's shorelinesalready hold the most densely packed communities in the country, with 446 people per square mile versus the national average of 105 people per square mile (excluding Alaska), found the NOAA National Coastal Population Report. The population density is six times greater at the coast than inland. (One square mile is about 2.5 square kilometers.)
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National Policies & Elasticity of Oil Demand
Background: Dr. Michael Kumhof is the lead IMF modeler of a project that combined Hubbert Peak Oil theory with economic theory on elasticity of supply. Their "middle case" had the price of oil doubling every decade with supply growing by 0.9%/year (till "we" cannot afford it anymore)
At ASPO-Austin we discussed the impact of deliberate, as opposed to "invisible hand", policy decisions to reduce oil demand. Below is a recent eMail I sent him. I will add links to my blog as a reply.
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Dear Dr. Kumhof.
First a data point.
In January, 2013 vs. January, 2012, French gasoline demand fell -7.7% and diesel -2.1%
In February, 2013 vs. February, 2012, French gasoline demand fell -8.7% and diesel -2.7%
Overall French fuel consumption was down -3.5% for the first two months of 2013 vs. 2012.
Note that many personal cars in France run on diesel and that proportion appears to be increasing. So some of the gasoline drop is due to fuel switching, but likely not much more than 1% in 12 months.
Macroeconomics do not appear to be the sole cause (French oil consumption was much less affected by 2008-2009 than US oil consumption).
I believe that the elasticity of French oil demand has been increased by providing oil free alternatives - a major public policy investment. Add to this this a secular trend towards what we call Transit Orientated Development. To date, the emphasis has been in the mid-sized and smaller cities & towns of France, expanded TGV and electrifying railroads and shifting freight from truck to rail.
In 2012, the Conservatives announced a major plan to double (+200 km) the Paris Metro from 2013 to 2025 for €21 billion. 2 million more daily riders, 1.5 million from buses (and the savings from that would pay for the new Metro). Major time savings as well, leading to greater social productivity.
Earlier in March, the new Socialist government increased this plan significantly. They extended an RER line (190,000 > 620,000/day), added more links between new & existing Metro and extended Metro 11 far into the East, redid the routes slightly, and increased annual investment by more than 50%. They pushed the finish date out to 2030. By 2030, 90% of Greater Parisians will be within 2 km of an urban rail (Metro, RER, tram) station.
Add more bicycle lanes (which the French are also doing) and an "Arab Spring" revolt in Saudi Arabia on top of Export Land Model can be accommodated in Paris 2030.
(If the OECD oil price predictions come to pass near the high end of their range ($150 to $270/barrel in 2020 - 2013$) the French can speed things up somewhat, particularly with surface trams.
Meanwhile every almost every French town of 100,000 (and some smaller) are getting new tram lines, the TGV lines are expanding rapidly - as is French rail electrification.
French carbon emissions (just 64% of German) are dropping faster than German (on a % basis, about equal on a kg/capita/yr basis)
I have a number of relevant essays on my blogs.
Best Hopes,
Alan
"Macroeconomics do not appear to be the sole cause." I don't think you can say that with what you provide, in fact the whole financial crisis pretty much shows the direct correlation between oil and the economy as we know it, and it should be added money as we know it.
If you look at US and W. Europe from end of 2011, and for W. Europe its worse 2012 and as you show 2013, oil consumption is off double digits from before the 2008 Panic, Spain 15% and Greece it's over 25%. There's been a lot of talk in the enviro community about trying to take credit for this, but this is plain and simply the destruction of the oil economy.
If you look at the "Brics" and those other industrializing economies that have had growth over the past few years, all have seen their oil consumption rise by double digits, in fact 20%. Oil is tremendously subsidized in all these economies.
So, OECD remains stagnant and/or contracting, consumption is down for half the global economy, yet oil remains $100 a barrel. Whats funny is this piece in today WSJ:
http://blogs.marketwatch.com/energy-ticker/2013/03/27/citi-to-wall-stree...
where a "prominent oil analysis" says demand is going to peak at end of decade. What we're beginning to see is the industry trying to fudge the supply/price problem by saying we're going to curtail demand, and of course that is true, its happening.
Anyway, I think both the stagnation and contraction in US and Europe and the growth in the BRICS along with consumption growth show the economy as we know it is completely oil dependent. I believe we can change that, but its going to be a lot more than mpg and natural gas as the oil analyst states, but a much more fundamental restructuring, which will happen one way or other.
Brutus - I agree, it's mostly the crippling recession that has caused oil consumption to decline in the OECD. And consumption has increased in the developing countries. But do you have any link for your assertion that "oil is tremendously subsidized in all" the BRICS economies. I don't think that's true for any of them, although there are still some subsidies in India. Certainly there is no subsidy in South Africa, and I think China has scrapped its subsidies (although the pollution standards are non-existent for gasoline).
The USA subsidized cheap gasoline & diesel by $101 billion in 2010 (more today). Last year, Obama signed a bill that transferred %18.5 billion from the US Treasury, $12.8 billion from the Pension Guaranty Fund and $2.4 billion from an environmental clean-up fund to the Federal Highway "Trust" Fund. And that was just the federal level.
Much more on my essay "A conservative Principle - User Pays"
http://oilfreetransport.blogspot.com/2012/06/old-conservative-small-c-pr...
Best Hopes for Users Paying for Roads & Highways,
Alan
IMF Cites Hidden Price of Energy Subsidies
http://online.wsj.com/article/SB1000142412788732336180457838603348286826...
But I can tell you this is completely incomplete, just ten years ago you couldnt get any numbers on fossil fuel subsidies, it was just what was - natural
The first two months of 2013 were not remarkably worse that the first two months of 2012 for France. A modest downturn at most during those 12 months (data is still coming in for precise #s).
Macroeconomics do not appear to be the cause of the y-o-y declines.
Alan
Alan's argument is convincing for France. Elasticity in oil use is low in the short term but given enough time for people to make adjustments (moving home, downsizing vehicles, etc) and especially in the context of a community that is investing strongly in alternative transport technologies, elasticity grows over time.
So it is likely that we are seeing a response to 'macroeconomic' events in these changing figures just delayed through people taking time to liberate themselves from their vulnerability to oil price impacts.
Auto-dependency is the core problem and more focus on that and less wishful thinking about more oil or fancy technologies is the urgent need this decade. Well done France. Beau Travaille.
Ipso facto. Not surprising the cost of the densest form of energy that accounts for the highest percentage of energy usage worldwide (particularly for transportation), is the predominant factor determining whether an economy is growing, stagnating or recessionary. The fact oil remains over a hundred a barrel is a clear sign we've shifted from cheap to more expensive oil indicative of a supply plateau.
Supply & demand are in a balancing act relative to the price the oil importing economies can handle. It's a dance forcing the OECD countries to devise all sorts of radical fiscal policies to keep BAU going in hopes of some day finding cheaper energy. One of which is QE's, which is becoming the go to policy in the US and maybe Japan soon as well. When all else fails, increase the monetary base to get the banks to lend more money to spur investment i.e. growth. Trouble is for the most part they aren't lending that money, but instead taking the spread between the interest they pay for the free bonds and the rate of return on them. Because the new money isn't making it into the economy, it's not having an appreciable inflationary effect. Apparently it's considered less risky by the banks to take the spread than lend to people. But at some point the Feds will have reached a limit as to how many bonds they can make the interest payment on and then what happens? Hmm, food for thought...
I have been considering events lately, and given the steady nature of oil prices in the 90's-100's of usd/bbl, it seems to me that we have shifted to moderately expensive oil, indeed. The question that looms on the horizon is, "What happens when oil gets REALLY expensive?" It started in that direction in 2008, and see what that brought us. What will it cost when Bakken and EF production really begins to fall? And, a better question, "is there any existing, but ultra high-cost recovery technology available to fill the plate of those still able to purchase oil products when that happens?"
You should not have started me thinking...
Craig
http://blogs.cars.com/kickingtires/2013/01/top-10-best-selling-cars-of-2...
Just going to argue shades of gray here...oil moved from triple-über-cheap to just plain cheap.
#1 Ford F-seriers
#2 Chevy Silvarado
#7 Ram Trucks
#9 Honda CRV
#10 Ford Escape
Totaling about 1.9 million...three "full-size" trucks, and two "cute-utes."
#3 Toyota Camry
#4 Honda Accord
#6 Nissan Altima
Totaling about 1 million...three "full size" cars.
The Civic and Corolla are pretty big these days as well...bigger than Accords and Camrys just a decade old.
With trucks as 5 of the top 10, very large cars 3 of 10, and still large cars rounding out the last 2 of top 10...I feel pretty safe saying that $100/bbl is "cheap." It brings to mind that non-attributed quote that floats around: "Considering the many productive uses of petroleum, burning it for fuel is like burning a Picasso for heat."
So I suggest the question is "What happens when oil goes from cheap ($100/bbl) to moderately expensive (say $200/bbl) or to expensive ($500/bbl) or to REALLY expensive ($1,000/bbl)?".
Second that emotion. Given the preponderance of very large and large vehicles being driven around where I live, it is clear that gas is very, very cheap. And further, I live in an area where most of the traffic is completely discretionary as I live in a tourist town. And even further, people's main concerns are the ability to park these behomoths as near as possible to their destination. God forbid they might have to walk a few blocks to the shopping district.
I have no quarrel with the question as you put it; it just adds dimension to the query.
As for the automobiles (actually mostly trucks!) we choose, it is a symptom of collective insanity induced by the cognative dissonance of trying to balance our wishes with reality. We do it in all sorts of ways, in fact... not just in auto selection. We do it in climate change denial, introduction of creationism into science 'education' in our public schools, etc. Things are not as we wish, and we are told we are 'exceptional' and entitled to the American Way of Life!
What happens when oil goes from pretty cheap @ $100 to somewhat pricey at $200? Depression, and financial ruin for most in the Eurzone and in the USA; in the rest of the world, my guess is widespread civil disorder and collapse. At $500 that is the state of the world. $1,000 oil? Well, if it inflation adjusted, it won't happen. OTOH, without adjusting for inflation, that might just be cheap, don't you think?
Craig
I think what those vehicle choices show is that people (in the US) have absolutely no idea what is coming. Really - none at all. They don't know about what is happening in regard to fossil fuel production or the melting ice at the poles, and what it will mean for their futures. And they don't grasp the connectedness of these things even if they are dimly aware of them individually (let's raise money to help the polar bears!). Whether some of that is willful ignorance or being victims of propaganda from the system does not really matter, what it shows is how our society is going to respond, in the same way that turning a valve and having nothing happen tells you something.
As the "s" in Brics, I can tell you that South Africa does not subsidize its fuel. Petrol prices are set by the government according to a formula that takes into account world prices, the rand/dollar exchange rate, over- or under-recovery from previous month, levies and taxes, retailer's margin etc. Price changes take effect on the first Tuesday of each month.
Unleaded 95 octane will go up to R13.50 and R12.83/liter inland and at the coast respectively in April. ($5.50 and $5.25/US gal).
LOL!
Here in Sao Paulo, Brazil today, Regular Unleaded, average price R$ 2.60 per/liter which is roughly US$ 4.70 per/gal at today's exchange rate... all things considered, still pretty cheap.
Ironically diesel is only US$ 3.96. I don't know if there is a subsidy on that or not. I'll have to do a bit of research to find out.
BTW have been driving a 1.0 liter Chevrolet Corsa, manual 5 speed that gets about 50 miles per gallon if it's not pushed too hard above 65 miles per hour on the highway.
BTW, Americans really need to give up their SUVs (Stupid Useless Vehicles)
FSPs (Fuel Sucking Pigs)
An article (with map) in French on the massive urban rail expansion# plans.
http://www.franceinfo.fr/transports/jean-marc-ayrault-promet-son-nouveau...
A Google translate version
http://translate.google.com/translate?hl=en&sl=fr&u=http://www.franceinf...
# I have details on new tram (surface) plans in the 2012 plans, but only one line is specifically mentioned in context with a new Metro line.
Best Hopes,
Alan
Alan,
You keep saying plans, that's future not now. I agree completely that is where we have go.
best plans for the future, and better best actions by us all to start getting us there.
This is Paris (where transit ridership has increased 21% with about a 4% increase in Metro km in the last 10 years). Outside Paris, almost 20 cities and towns have added trams since the 1980s (most within the last 10 years). Plus speeded up LGV building (LGV is the tracks, TGV the trains). Plus bicycling, plus rail electrification.
My blog has MANY examples of new French tram cities. http :// oilfreetransport .blogspot.com/ Almost every town of 100,000 & larger.
IMO, most of the drop in French fuel use is due to two factors. One is a secular (one way) trend towards TOD and oil free transportation. The other is a low elasticity of demand. It is easy for the French to switch from driving to oil free when the pump price is too high. NOT so easy in the USA !
Best Hopes for Those That Prepare,
Alan
Alan, Have you been tracking London's 'Crossrail' project? From my layman's perspective it seems to be a pretty impressive engineering project. They claim it is the biggest construction project in Europe. It is moving into overdrive this year. The reasoning behind this type of mega-project (£14 billion) and the proposed next phase (Crossrail 2 - £12 billion) is simple: the existing transport lines are already close to maximum capacity, so more has to be added.
http://www.crossrail.co.uk/news/articles/new-crossrail-images-show-londo...
Petrobras, Brazil’s Oil Giant, Struggles to Regain Lost Swagger
Brazil importing ethanol from the United States? Who wouda thunkit? But what about oil production, what about that bonanza of offshore oil that should make Brazil an oil exporter?
Brazil is one of four countries that the Harvard Kennedy School wizard Leonardo Maugeri said would lead to a world oil glut in 2015. The US, Canada and Iraq were the other three. Iraq is going nowhere fast, Brazil is in decline and the US tight oil revolution is about to peter out. Looks like it is up to Canada to save the world.... Smirk, ;-)
Ron P.
I guess you didn't get the memo from Bloomberg, about three years ago, about Brazil "Taking market share away from OPEC." It remains my all time favorite business column.
"Looks like it is up to Canada to save the world.... Smirk, ;-) " ...
Indeed, and that might put the Keystone Opponents' activities in a different light as well.
I don't really disagree that this part of the 350.org project is essentially symbolic, but I also believe that this doesn't make it 'simply vaporware', either.
We can say it's 'just a lot of talk..' perhaps, but I think (and as we point out the public messaging of these things on a daily basis right here..) that what is said and what is promoted actually does matter, and has real effects on the physical world.
Ron, it has been a long, long time since I last posted here but the glut hasn't materialized, at least in crude oil.
When I check the EIA data for crude oil at the EIA website I did notice something that I hadn't spotted previously. The years 2010 and 2011 finally did exceed the total production of crude for 2005. It was 73,644.0 MBPD in 2005 and 74,003.7 and 74,070.1 MBD in 2010 and 2011. That's not much of a glut even if it did finally break the 2005 record.
One thing I've learned in following peak oil over the years is that the ongoing plateau in oil production is like the irrationality in the stock mark. The old saw says the market can stay irrational longer than you can remain solvent. So it seems the plateau can continue longer than many of us expected. Of course, with techniques like fracking, they are likely to increase the steepness of the decline slope later on but hey, live for today, right?
GreyZone, even if there is a slight increase, the amount of oil per person is declining as we gain almost 200,000 people per day. Peak Oil Per Person...
In a world which expects constant increases, or against a background of increasing population "flat" is "down." This also neglects the decreasing EROEI of oil (applies also to the finite-ness of the planet and decreasing ability to support humans).
Darwinian:"Looks like it is up to Canada to save the world.... Smirk"
That Canadian saviour is Bitumen aka "not oil." Besides requiring a lot of Earth to be moved it needs other inputs, mainly natural gas, to make it oil. This means we're replacing 20-50 EROEI oil with syncrude at perhaps 6?
So not only is per-capita falling because of population increase against stagnant production, but the production is shifting to lower quality sources in which net-energy is declining.
This is like a rug on a platform. The rug stays the same size, the people get more crowded on the rug, but underneath the platform starts to get smaller. People will begin to fall off the platform and the rest will be baffled as to why anyone would have fallen off because the rug is still the same size.
I estimate that 2012 will be around 75.5 mbpd.
It seems likely (based on OPEC data) that the increase is from condensate, which is a byproduct of natural gas production. Less than 45 API gravity crude oil production has probably not increased. So, to summarize global production, relative to 2005:
We have seen an increase in total liquids production, primarily from natural gas sources (condensate and NGL's) and low net energy biofuels.
Crude oil production is probably flat to down (unfortunately, no one tracks crude only globally).
Global Net Exports (GNE*) are down, with the developing countries, led by China, consuming an increasing share of a declining volume of GNE.
*Top 33 net exporters in 2005
Incidentally, Ron posted the following link on a prior Drumbeat:
Will academia learn from the annihilation of the Peak Oil Theory:
http://www.beaufortobserver.net/Articles-NEWS-and-COMMENTARY-c-2013-03-2...
One of the readers asked an excellent question:
That would be the infinite oil theory or the supply curve that goes up forever theory. I do remember when Hubbert first came out with his theory and was impressed even then before virtually anyone was giving any thoughts to limits to anything.
I know we have had discussions along these lines before but is the idea that the amount of oil is finite a theory? Yes, we can quibble over the shape of the curve and call that a theory but the fact that the basic principle is being called into question is absurd.
Failure to think beyond next Tuesday is killing us.
I guess we could work backwards from the Infinite Oil Theory.
If global crude oil production won't peak, then . .
Regional production won't peak, and
Oil fields won't peak, and
Individual oil wells won't peak, therefore...
We have clearly seen a vast global conspiracy, unprecedented in human history, that perpetuates the myth that individual oil wells and oil fields peak and decline. Otherwise, one would have to argue that the finite sum of discrete sources of oil that peak and decline results in an infinite rate of increase in production.
We have indeed descended into the Alice in Wonderland oil theory.
TOD already has reported that Bakken is in Red Queen territory, so the A-I-W oil theory is entirely consistent...
or maybe it is the Buzz Lightyear theory - increasing oil production "to infinity...and beyond!"
The cornucopians think more oil wells and fields will always be found to replace the old ones. They think of Earth as infinite and therefore the oil supply will be infinite.
---
Brazil: 23.8 people/km2
And they invented some phony math to prove it too.
If you put fire to your house, or a pile of twigs, or a forest, or any other finite energy stack, the energy output will be a bell shaped curve, commonly with a long tail at the end for the after-glow. This is also true for nuclear or conventional detonations. If you manage the resource you can get an undulate plateau (what does birds have to do with plateaues anyway?) but that is just a manipulation of the bell shape. There simply is NO known exception IN THE UNIVERSE. That is "just a theory", but so is graivity as well.
;)
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I think this is why it is called "undulating"
(this is song sparrow other bird but close enough I thought... copyright david sibley)
should one overlay world production since 2004?
I think that would have to be the "Back Yard Oil Well," or B.Y.O.W.
Since there is infinite oil, it must, by definition, be everywhere*. Including, I would surmise, in my back yard. And yours.
Wow! Who would have guessed.
*Everywhere of course excludes Israel, the only country in the MiddleEast/North Africa region absent large oil wells. Or any oil wells. It took them 40 years to find their way across the Sinai Desert to the only place like it... I have always felt it was a message from God. "Forgetaboutoil."
Craig
Oil never was a bless. I think Norway is the only nation who managed it in a responsible way. The arab world is going to suffer greatly for their oil wealth.
Re: New Mexico Farmers Seek ‘Priority Call’ as Drought Persists
This story puts the impending water woes of the Western States in stark terms. As noted in the story:
So, without those farmers and their food production, what are those folks living in those cities going to eat? Not to mention, where's the fuel going to come from to keep all those "recreation and tourism and hunting" people moving about between those cities and the country. Happy motoring forever!!!
E. Swanson
They'll get food from areas that have more water. Like Saudi Arabia deciding that trying to grow wheat in the desert was not a good idea.
Remember, it's not just that there's more people. The southwest was settled during an unusually wet period. Climate change might be making it even drier than it was historically. Farming in such a place may just be unworkable.
In the long run, though...I'd rather live in an area that has plentiful water than plentiful oil.
>>In the long run, though...I'd rather live in an area that has plentiful water than plentiful oil.<<
Me too. Like West Wales :)
John in Aberystwyth
I'd also add; In a country that doesn't import the majority of its food, and energy. Thats if we are taking this stuff seriously.
Sprinking in Portland tonight..
"The Rain in Maine gets loaded on the Plane.."
Leanan, if you have plenty of water, somebody will be trying to take it from you.
Water wars come to Tennessee:
http://www.timesfreepress.com/news/2013/mar/27/bill-haslam-rejects-georg...
"They'll get food from areas that have more water. Like Saudi Arabia deciding that trying to grow wheat in the desert was not a good idea."
From my own experience, a lot of farmland in Wisconsin was left to revert to forest because small farms just couldn't make it. If the big irrigated farms out West dry up, then food prices might rise enough to make the Wisconsin farms viable again. Especially if the growing season is 20 days longer. It always was marginal up there.
Eagle Ford Shale: Dry Gas Production In Free Fall
The article is very pessimistic about Eagle Ford Gas but still quite optimistic about Eagle Ford oil.
If the oil corridor is all that narrow then how much longer can this aggressive drilling program keep increasing oil production? I suspect that within one year oil production will start to head in the same direction as gas production.
Ron P
Thousands of square miles in that "narrow" zone hundreds of miles long by 50-100 wide. It'll be a while before it's done. Thousands of wells permitted for this year alone. Early wells were for dry gas, then they moved to condensate and most wells are there. The "oil" focus is really just now getting up to speed. I don't know where the sweet spots are, but in terms of areal coverage there is a lot left wide open.
EF projects 25,000 wells in the next decade, and Bakken twice that.
Such projections as that proves that whomever made it doesn't have a clue as to what they are talking about. The Bakken already has just over 5,000 wells. And you, or EF, says they will have 50,000 wells. Well take a gander at this Bakken map and their 5,000 wells and then tell me where they are going to put the other 45,000?
Bakken Well Map from National Geographic
The Bakken rig count has dropped from 220 last summer to 186 today. Looks like it is going to take them a while to reach that 50,000 number.
Look at the map from my original link of "Eagle Ford Shale: Dry Gas Production In Free Fall". Then click on the map to enlarge. The sweet spots are where the green dots are. The area where there are no dots is the area where there is no oil or gas. Those areas will remain wide open because they don't want to waste money drilling a lot of dry holes. The oil corridor is about 30 miles wide and about 100 miles long. Then there is a less prolific corridor that runs to the southwest of that which is about another 100 miles long.
Wild exaggerations about 50,000 wells to be drilled in the Bakken only serves to ruin the credibility of your source and that in turn reflects on you. It would serve you better not to quote them as a reliable source.
Ron P.
I think the truth in somewhere in the middle. Well drilling times have been dropping, as the contractors are getting really good at it. The drop from 220 to 186 probably does reflect a modest drop in rate, but not linearly. It's anecdotal, but equipment my company sells daily, contract companies we talk to, and customers who come by to align strategic plans all point to continued drilling and modest growth in the Bakken. Their worries are that oil stays high ($100, but with smaller spreads than today) and that costs are contained (they've been growing too fast to be sustainable). Other's mileage may of course vary.
Some of the Bakken growth will already be in-fill drilling. Zone sizes for the hoz fracks are getting smaller, and well densities are expected to double. This, to me, supports your sweet-spot and decline curve points directly, but it doesn't mean immediate peaking. A lot depends on what oil prices do.
I suspect the ultimate number is quite exaggerated, but more important a function of unspecified future oil prices. This would be true for the Bakken and EF.
The other angle is one of semantics -- does EF mean just the classic EF play(and there are others in the area), or the whole S. Tx area? And once again how sweet is sweet enough is a direct function of oil prices.
All of this is from direct input from people in the fields, who are both knowledgeable and biased. I'll look through your references and talk it over and see if I can get a more nuanced view.
I don't understand this at all. Why are horizontal fracks getting smaller? What would be the drillers motive for this? The only reason I can think of would be that they just don't have room to make them longer because they would hit "already fracked" areas. What is your source for this information?
If this is true then this proves that the end is in sight. Horizontal fracks getting smaller would mean fewer baarels per day per well. That is critical. From December to January barrels per well per day fell from 140 to 130 while total Bakken production fell by 32,411 barrels per day. And this was with 113 additional producing wells in January. So you can see what effect a drop of 10 barrels per day per well meant.
Ron P.
The smaller fracks info was brought back from one my engrs, from cust conversations there. Given the existing density, and the pattern of depletion, this make sense to me.
I'm not a formation engineer, so I don't intuitively know the details. I've been given to understand they stage the fracks of the new wells based on data (including micro-seismic) from the previous laterals. Goal is to drain add'l shale with limited communication with existing wells.
Some areas have overlapping zones, and there could be laterals at different depths. Not sure how prevalent this is.
I do expect barrels per day per well to drop. The other interesting point will be at what rate the wells settle at -- hopefully something above zero.
You can't judge field decline on gas, but oil would be a good indicator especially as winter season exits. A bad week here or there due to weather could make a dent, but it should show up on the total well counts.
Just saw a proposal for another company looking at adding 1000 wells in the Bakken and EF. Second 1000-well plan in two weeks. Oil is $96+ and gas is at $4. Above $100 and $4.50 it's going to get busy again. Whether it helps, who knows?
Corporately, I'm fine with crazy drilling to grow production modestly -- great money in it. Personally, it's a terrible harbinger for the industrial world.
According to the independent driller's survey, we're crossing a price threshold that, if maintained, will cause drilling expansion. $3.90 gas and $85 dollar gas are essential the break point. At $4.10 about 10% of gas drillers will add wells, and at $96 about 20% of oil drillers will.
By $4.50 gas it'll be 40% gas expansion and by $110 oil it'll be $70% of gas drillers. How much and how enthusiastically is harder to say, but there is certainly an expectation of significant drilling growth this year.
This doesn't mean that POCs will do things quite the same, of course. It does say that $5.00 gas and $120 oil would make things go bonkers again (and that's on the long side of my prognosis). I do think we could see $4.50 gas again after the spring slump wears off, and oil could easily settle at $110 where Brent is now, if only Cushing can drain to the Gulf.
I've watched these updates for year or two, and last year the projection seems to pretty well match.
http://www.aogr.com/index.php/magazine/cover-story/conventional-oil-dril...
My knowledge is limited but I would have spread out the wells all over the place and used infill drilling with a finer grid over time.
Karl, that might be a good strategy for a normal reservoir but there is nothing normal about a tight oil reservoir. Each well draws from its own private reservoir and nowhere else. The rock is so tight that no oil flows through it. So blowing fractures in it with extremely high pressure, then blowing sand in the fractures to keep them open is what the reservoir is. The fracture creates the reservoir and that reservoir is only as large as the fractured area.
Oil a few feet outside the fracture never reaches that fracture. The best strategy is to put the horizontal fractures as close together as possible. So technically there is no such thing as infill drilling in tight oil shale.
Ron P.
It would be to learn what could be expected from between. Quite soon a rough estimate of the area could be made, otherwise I could hit the end at any time. The second stage would be to put a finer grid on the areas expected to be best.
Basic idea is that fewer wells would be required to get a good estimate with a greadually finer grid than if it was drilled with optimal spacing from one edge to the other.
They can't drill 50,000 wells in the Bakken - it's big but it's not big enough. Most states have regulations on how many wells you can drill in a given area. In Texas, wells must be drilled a minimum of 1200 feet apart (run those numbers against the Eagle Ford to see how many 2 mile horizontals will fit side by side since it applies to the entire horizontal length.)
In North Dakota, to drill a 2 mile long horizontal well (which is typical in the Bakken), you need a 1280-acre spacing unit, which is 2 square miles. North Dakota itself is only 70,000 square miles in area, so if you drilled the entire state with 2 mile horizontals, you could only fit 35,000 wells into it.
The Bakken, however, only occupies the northeastern 1/4 of the state, so if they drilled the whole area in 2 mile horizontals (which they might well do at the rate they're going), they might be able to fit in 8750 or so wells. The North Dakota Department of Mines and Resources thinks 10,000 wells would do it. I'd say they are about halfway to doing that with over 5000 wells drilled to date.
These are just ballpark numbers and you can adjust them to fit the available data. I'm just trying to establish where we are on the bell-shaped production curve. Given the very steep initial decline rate on the wells, close to the top would be my guess. The bottom line is that this play is around half done.
Another indicator would be that the Toronto Globe and Mail spammed me today with the exciting e-mail "Invest in the Bakken Oil Boom - Up to 40% Annually - from The Globe and Mail". Yeah, I'll get right on it, call the 888 number in Toronto and throw my money down. 35 years in the oil industry taught me how well that works.
My reaction is the same as that of a millionaire in 1929. He was riding to his New York office one morning when the taxi driver told him about this exciting new stock that was bound to double his money. When he got to the office, he called his broker and told him to liquidate all of his vast investment portfolio because, as he told the broker, "When taxi drivers start giving you stock advice, it's time to get out of the market." The market crashed a few months later, and he was left with a pile of cash which he reinvested in 1933 in land and new stocks.
The Bakken boom has all the signs of a classic investment bubble. Watch for it coming to a courthouse near you as they perp-walk the financial whizzes in for their indictments.
+10
It's these sorts of calculations that keep bringing me back to TOD. Call them back-of-envelope, order-of-magnitude, rough estimates, etc. But they create context to use when talking to those who don't check TOD out.
I'm all for accuracy and precision. But I'm also for framing.
TX is a poor standard, given it had so many vert wells. In the Permian along (what, 250 x 300 mi, or 75,000 sq miles max?), there are 80K wells and it's still going strong. If laterals need to be tigher, they will be -- laws are made to be changed.
All these plays feel like bubbles, or gold rushes, when you're there. I'm pretty sure all will go bust, but when is equally a function of price and depletion curves.
I can't argue the math, but I can say pretty confidently that drilling is still expanding NOW. I hear Tx has 5,000 permits this year so far, with more than 1/3 in EF (not sure how many can actually be drilled, though!). It's on the right run-rate, but where will it stop?
Edit: The Permian has produced 15B bbls of oil in its history. At 375K bbls per day, the EF is going to take a LONG time to catch the Permian. Will be interesting to see if get 5% or 10% of the way there before running out.
Is there any reason that they can't run radials off of a single top well? That is...the hole on the surface with radials running North, East, South, and West below - turning after the jacketed portion of the well. Seems like they'd be able to reduce the pad count to a 1/4 as many and drastically reducing the surface intrusion and infrastructure.
RockyMtnGuy,
Thanks for the information. I just checked the NDDMR website and if you click on the recent presentations link and look at the PDF from 11-27-12 (slide 11), they predict 2400 new wells per year and a total of 40,000 to 50,000 wells. Maybe they plan on tighter spacing than you suggest, also on slide 5 they show the three forks formation which underlies the Bakken and these two formations are lumped together in the NDDMR "Bakken" data.
So in some areas twice as many wells as you suggest can be drilled (though I am sure this does not apply to the entire area). I agree that the 50,000 number is likely too high, but I think your 8750 estimate may be too low. My guess is around 23,000, but that may be too optimistic. Note that the average of the low estimate of 8750 wells and the high estimate from NDDNR of 50000 wells is 29375 wells.
Also in the presentation is a plan (on slide 23) for 8 wells per 2 square miles with a development area of 15000 square miles (from slide 6) which gives a possible 60,000 wells based on area alone, if one third of the area is prospective that would result in 20000 wells, much will depend on oil prices, if they double over the next 10 years we might see 25000 wells.
The expected case (slide 12) sees the number of wells reaching 20,000 in 2018 and 40,000 by 2028 and peaking at 46,000 wells total in 2035. This is what I would call an optimistic scenario.
Link to NDDMR presentation:
https://www.dmr.nd.gov/oilgas/presentations/NDDOTTPDC112712.pdf (warning 11 MB PDF)
Chart for intermediate Bakken estimate:
DC
Dcoyne,
It's true that the Three Forks Formation does underlying the Bakken Formation, but one would assume that they would develop it by drilling dual-zone wells rather than drilling entirely new wells. Whether that counts as 1 well or 2 wells depends on the definition of "well" they use.
It is also true that they could drill up to 8 wells per spacing unit, but generally speaking production is already declining when companies start drilling infills. Cost is low because they can use the existing surface facilities (and drill horizontals off the same pad), but the objective is normally to slow production decline and increase ultimate recovery rather than increasing production rates. This would put a "fat tail" on the bell-shaped production curve and turn it into a right-skewed bell curve.
I'm just trying to get a feel for how this will play out and when production rate increases will stop. Exponential curves never go on forever - at some point there is an inflection as growth rates start to slow, and at a later point there is a peak. New plays are always a finite size and companies are always in a race with the Red Queen.
Your "Bakken O-U Diffusion Model Scenario" does look realistic, though.
RockyMtnGuy,
Thanks for the reply. The model is by no means perfect. It assumes that starting in Feb 2013 that the "average well" profile drops by 1 % each month (approx. 12 % per year), Mr Likvern's analysis suggests that the average well profile may be dropping by about 20 % per year. I have attempted to compensate for this by having the number of new wells added per month increase relatively slowly. The two may balance, but I could improve the model by using the 20 % decrease and seeing what realistic drilling rate increases would yield.
I am pretty sure that the way the wells are counted in North Dakota is that each well connected to a common pad is counted as a well so that if 8 wells were drilled from a single pad it would be counted as 8 wells rather than 1, those with more knowledge of operations in North Dakota can correct me if I am mistaken.
I did a quick upate to the Bakken Scenario, well profile drops by 20 % per year starting in Feb 2013 and new wells increase a little to a max of 2496 new wells per year (2412 wells/year in previous scenario).
DC
Ron,
I am surprised nobody has picked up on the decrease in the Haynesville gas decline as per the weekly EIA gas report.
http://www.eia.gov/naturalgas/weekly/
http://www.eia.gov/naturalgas/weekly/img/201302-February-monthly.png
It looks like it is heading down fairly fast. It should be interesting to watch and see how it recovers with extra drilling.
New report from the "Energy Watch Group" (German study group, with Dr. Werner Zittel in particular) :
http://www.energywatchgroup.org/fileadmin/global/pdf/EWG-update2013_long...
« Fossil and Nuclear Fuels – the Supply
Outlook »
Very broad summary :
peak oil is passed
peak gas : around 2020
peak coal within next 10 years (page 12)
And also a focus on USA production in the annex.
I'm a bit nebulous about this report. The EWG predicted the peak in 2008 but missed GOM, Shale Oil, Iraq and small field production gains since then. These gains kept the plateau going (and they admit in this report as such). Now EWG calls for Peak Oil in 2012, but they don't give hard evidence that decline rates will subtract more than shale oil/Iraq will add. I think there close. Peak Oil will probably be 2015. And whose to say high oil prices (up to $200 or more) won't bring on addtional amounts (gtl/ctl)? I've been burned by this meme before by high oil prices and lack of data.
Also, EWG calls for peak in Shale Gas in America. I struggle with this. Lets see what happens when Natural Gas prices reach $8/therm. When Industry tackles production of shale gas en mass again.
David S.
Yes, they might be said to have a "pessimist deviation" in their forecasts history, but overall still much closer to reality than the "optimists deviations" found in the IEA WEO and similar reports ...
The problem is can the global economy adapt to the higher prices fast enough to sustain them long enough to raise total production further ?
Stair step down into catabolic collapse seems much more likely given our economic/political model.
I suspect - or maybe hope, that we never get to peak (geologic) coal, for the sake of our descendents.
This is an article on "extreme retirement" - young people don't want to work until they're 65.
Retire before 40? Some folks say it can be done
On the one hand, learning to save as they are will probably serve them well. They keep expenses low to save for retirement as well as to make their nest egg last once they do retire. That means no smartphones, no cable, no car, cheap housing. On the other hand, planning to live off your investments from such a young age...there's a lot I can see going wrong with that. Their investments are higher risk than most retirees'...because they need that higher rate of return, being so young.
It will be an additional advantage to learn to live frugally early on while one's contemporaries are bent on keeping up with the Jones', especially considering how things are going. Avoiding the habits of conspicuous consumption early on means not needing to break those habits later in life. My neighbors are struggling mightily with adapting to early retirement; I can see it in their faces. They make snarky remarks (they think it's humorous) about my frugal/scrounging ways, while spending like crazy. One recently called me a dinosaur because I have no cell phone or credit cards ("get with the program", she said). They can't seem to stop; always a new delivery, new car, new this or that, so on the surface they appear to be quite well off. As the saying goes, old habbits are hard to break.
If (when) things take another downturn, most folks like these won't handle it well at all, IMO. They've put all of their eggs in the growth basket; have few other acceptable options. Get thee to the non-discretionary side...
Possibly...but I can't help thinking about what Elizabeth Warren wrote in The Two-Income Trap. The people who got into financial trouble were the ones who didn't spend frivolously. When something unexpected happened, they could not cut back. There was no fat to cut; their expenses were already pared to the bone.
While their spendthrift neighbors could adjust by cancelling cable, selling the new car and buying an older one, working out an agreement with the credit card company, etc.
It kind of reminded me of what Thomas Homer-Dixon wrote about in The Upside of Down: efficiency comes with a loss of resilience.
I haven't read "Two Income Trap" but could it be possible that there is a selection bias? Since most Americans spend as much as they can, the people that spend less are poorer so they will suffer first.
If on the other hand, I spend half of what I make (and use the other to payoff mortgage or save) how can I fare worse in a crisis? I either have savings or I have less debt and can stop paying extra for the mortgage, refinance and survive.
Thanks,
You can read an excerpt from the book here.
They found that it's not so much income that matters. Having kids was the biggest risk factor. Most of those who ended up in bankruptcy were not the poor, but solidly middle class families that were felled by an unexpected blow: a job loss, a divorce, or most commonly, an unexpected medical expense.
You're right that if you save the extra money, you then have a safety net. (But this only holds true while you are working. If you retire at 35, like these people are planning, then your safety net becomes your primary means of support, and you don't have a safety net any more.)
The book is called The Two-Income Trap because the authors argue that sending women to work, rather than increasing financial security, decreased it. In the old days, if dad lost his job or got sick, Mom could go to work and pick up the slack. Or if a kid was sick, she could take care of him at home without impacting family finances. Now, such crises are financially devastating.
As someone here put it...a plane with two engines is more vulnerable than a plane with one, if you need both engines to fly.
(Note that this does not mean women should go back to the kitchen. It's hardly possible now. And even if it were...the parent at home doesn't have to be the wife.)
Loss of one income from a two income family should not be devastating if the family immediately reduces their expenses instead of exhausting their savings trying to maintain their two income life style. I'll get to see how that works out in a couple of months when my wife's job "disappears" to the US.
Non-custodial parents are one group who are really setup to be screwed financially if they lose their job. The child support system really doesn't want to accept the reality that non-custodial parents may be out of work for a long period of time and once employed again may not be earning as much money as they did before. The net result is that someone going through this is highly likely to be left with child support payments that are too high for their actual income and a large amount of back dated child support that (in the US at least) cannot be forgiven.
Well, that was what brought up this topic. The ones who got in trouble were the ones who were not spending frivolously. If you are buying $5 lattes and have a new SUV and are paying $120 a month for cable, it's easy to cut back. If you're already being frugal, there's no place to cut.
The so-called "two income life style" is a myth. Warren found that people in today's two-income families do not consume more than their single-income parents and grandparents did. They just spend their money on different things.
And the obvious - they have two people working to accomplish the same thing. Much of that extra income must be going to service debt, pay for houses that cost more for the same thing, and some of it is going into "investments" and retirement plans which I expect to be simply taken or nullified.
Warren found that the difference was in the price of housing. People bid up the prices of homes in good neighborhoods because they want their children to go to good schools. This is apparently a big reason why it's parents with children at home who are most likely to go bankrupt.
She also found that something like 3/4 of the time, it's unexpected medical expenses that forces families into bankruptcy. If someone's too sick or injured to work, they may lose their health insurance. Even fairly wealthy families with good insurance were not immune, because health care costs are so high. Even with insurance, there are deductibles and lifetime caps. One seriously ill child can wipe out the entire family's insurance.
Health care reform removes the life-time caps, and greatly reduces the number of uninsured.
So if health care reform survives the US political process, medical bankruptcy in the US should be greatly reduced.
US bankruptcy rates per capita are 2 to 5X higher than other OECD countries, that all have some form of universal healthcare. Estimates are the 40% to 60% of US bankruptcy is medical.
http://middleclasspoliticaleconomist.blogspot.com/2012/02/medical-costs-...
The brother of a friend of mine took a job in New Zealand to work on rebuilding Christchurch (civil engineer). After I sent him the TIME article "A Bitter Pill" about how medical costs are killing the country and how much better Medicare controls costs - he emailed me back and said (paraphrasing) "We make the same here as we did in the US (on one income instead of two) - housing, food, and gas are way more expensive - but we still have more disposable income. The only reason I can see why is that we're not spending $400/mo on health insurance."
As far as the "Two-Income Trap" that comes with some qualifiers....
This is really an issue of perspective. The house may have been modest compared to some others, their cars may not have been "luxury" brands - but they were still big spenders, really. If you're spending all of your income and there's no savings - you're a big spender...an over-spender. Children in an industrial economy are an expense (note "day care" listed as a "basic"). They had two children, considered day care a basic expense and likely drove them to day care on a daily basis, it is highly probable they also fed them and clothed them, so I'd contend that they were big spenders. It might not be the frivolity of daily cappuccinos and 20" Dubs on the Escalade but they were living beyond their means even before the job loss.
What's lost in the conversation is that during the conversion from 1 income household to 2 income household is the erosion of those incomes compared to the ranking of lifestyle that they bring. Back in the "good ol' days" (good if you were a white christian male) a single-income could support a nice house, a car, and small family in what would be considered "middle class" lifestyle. Now in order to achieve the same it generally requires two-incomes. A good number of "service sector" jobs which now pay minimum wage were actually living wage jobs back then (janitors, store clerks, etc).
On top of that there's been a shift in what the "middle class" lifestyle looks like - a large house (large mortgage, high monthly operating expense), cable TV (monthly fee), Internet (monthly fee), smart phone (monthly fee), large expensive car/suv (high insurance, gas guzzler). The "middle class" life has become monthly fee based, or has extra carrying costs (heating/cooling, insurance, fuel consumption).
But they were saving money. They saved enough to put a down payment on a house, and they had enough saved even after the purchase that it was three months after the job loss before they missed a payment. That puts them in the top 1/4 or so of Americans.
Two cars might seem like a luxury by the Ozzie and Harriet standards, but if you're both working, two cars are a necessity. (Part of the two-income trap: expenses are higher if both parents work.)
All that illustrates is that most Americans are living far beyond their means. Once you take your savings, put them down on a house, and take out a mortgage, you are no longer a saver, you are a borrower. If you only have 3 months of cash in reserve, you are living on the edge of bankruptcy.
You should be able to put 25% down on a house, and if you lose your job, you should be able to go a year without missing a mortgage payment. If you can't do that, you're over housed. Nobody NEEDS a 2000-3000 sq ft house in a gated community. What's wrong with a 1000 sq ft fixer-upper in a somewhat rundown but friendly neighbourhood where you are Jones and everyone else is trying to keep up with you?
Yes, but why are they making payments on two cars? One could be a relatively new (less than 10 year old car), but the other should be a clunker only used for driving to work that they keep running by fixing it on weekends. Why should either of them have more than 4 cylinders or more than front-wheel-drive? Why can't someone take the bus? (I know, it's because it's in the suburban US where everyone is too proud to take the bus, and where there isn't a bus anyway).
The obvious exception to this is people who are frugal and making a good enough income to be able to bank 50% or more. My spouse and I have owned our own home for close to 20 years (including a move in which we sold at a lucky high point, moved and bought another home for cash). Now I'm retired and my Social Security easily covers my own expenses and my wife works part time as an RN and probably banks 2/3 of her income. If you have a good job and income, it is easy to save money if you don't climb on the consumer bandwagon. I raised two kids in my previous marriage. During that time, I was not able to save anything, so I agree that kids are the biggest expense and risk factor for a family's solvency.
My wife and I try to live on one income, and bank the rest. We don't quite make it, but we definitely still have room to cut back when needed. We've both seen family members with health problems or job losses that caused a lot of financial stress, and hope to be more resilient when our turn comes. It's all a crapshoot though with the economy falling apart.
Loss of one income from a two income family should not be devastating if the family immediately reduces their expenses instead of exhausting their savings trying to maintain their two income life style.
In many locations that 2 income lifestyle has underlying expenses of $500,000 homes that are $150,000 homes in other locations or $50,000 (or less) homes in places like Detroit.
Couple the above home prices with Corporate ability to move jobs to lower labor centers (in or out of Country) and the people who bought the expensive homes in, say, California or Washington DC run quite the risk of going underwater if there is a 'hiccup'.
Non-custodial parents are one group who are really setup to be screwed financially if they lose their job.
Plenty of groups who are going to get the shorter brown sticky end of the stick.
Next up - service jobs: http://www.cnbc.com/id/100592545
Smart enough to make the work of people, but dumb enough to not get bored. The ideal worker.
Having just read that Marshall Brain "Manna" story someone posted the other day I about crapped myself when I hit that paragraph.
So...what I continually see happening here, a common thread, is that automation is removing jobs...replacing millions of jobs with hundreds of jobs (doing the work versus maintaining the robots which do the work). At the same time as jobs are going away, economists and politicians are calling for people to breed faster and more..."population is decreasing! OhMuhGerd! We need faster growth!"
Technology leading to less jobs (less need for people)...Society calling for more people (so they can work jobs to pay taxes and buy stuff). I see a problem here.
I think this mirrors our society, and was really my point. Once a family or society gets adapted to and invested in a certain level of expenditure and consumption, it's much harder to back out (contraction) than it would be if they had never become reliant, financially and emotionally, on the "more is better" paradigm in the first place; less to support/maintain; less to lose.
I have a cousin who was a stay-at-home mom with 5 kids who managed well. Her husband worked at his own business with a moderate income while she micro-managed finances and expenditures, raised the kids, did work for the church, etc. They did this in a fairly affluent neighborhood north of Atlanta, and still managed to pay off the house, have health insurance, and send the kids to college without loans (she home-schooled the kids while they also went to public school = partial scholarships and grants to good colleges). They also managed to partially self-fund summer mission trips for their family to go abroad; their 'vacations'. They avoided usury (credit) like the plague, excepting a moderate mortgage.
They had a different definition of 'affluence' than their neighbors generally did; different values, and focussed always on that, avoiding distractions. They've passed this code on to their children, who are also avoiding modern American traps. One of their sons could easily retire in his thirties now, if he decided to do so. Last I spoke to him, he's still never owned a new car, and is restoring an older small home in more urban settings. I have no doubt that these folks will be OK, whatever the future brings, unlike many of their neighbors.
The key is to avoid the traps by not developing a taste for the bait that our economy constantly dangles under our noses. "Must-haves" usually equate to "don't-needs", IMO.
There's a commercial running on TV lately; a little girl proclaiming "More! We want more... More is better!" A bit nauseating... "it's not complicated":
https://www.youtube.com/watch?v=OnA3C9Af_oc
I can't tell if I'm seeing more people trying to avoid the traps post Great Recession, or if I'm just more sensitive to those trying (i.e., confirmation bias). But it sure seems like more's happening.
It's anecdotal evidence, but are folsk being asked for help by others in how to be frugal? We get asked alot about our food growing and preserving, and reuse habits.
Let go or be dragged.
There might be a serious generational change going on. This article suggests that today's young adults are far more frugal than their parents. If only by necessity.
Do Millennials Stand a Chance in the Real World?
It doesn't matter if millenials "stand a chance" or not. The old pass away, the young inherit the earth. It was always this way, it will always be this way.
No matter what you do or do not do, chances are that 5 year old child you see holding his mom's hand is going to out survive you.
They're talking about financially, not physical longevity.
More and more I've been seeing articles about predatory capitalism (which accurately describes the present USA system), referring the the younger generations as "disposable", by the powers that be.
Yes, it's really a matter of expectations rather then reality. People have a mindset about what they see as a middle class lifestyle. If they just lost those expectations and backed off to what middle class expectations were in the 1950's (1000 sq ft house, one cheap car, nobody ever drives the kids anywhere because they've got bicycles) it would be a lot cheaper.
My sister and her husband had their own "Two-Income Trap" scenario, but it came out completely different. They were both engineers, but then they decided to have a kid. When the little bundle of joy was on its way, they decided to buy a house. They were short of cash, but the Bank of Big Bro (me) came across with a 1/3 interest in their house, which was a nice house in a nice area. I liked it, I knew I could count on Sis to go for value. I had my own house but theirs was much nicer than mine.
Then things started to go sideways. My sister lost her job and became pregnant again, immediately after the first child (Oops! was her explanation). Then, my brother in law lost his job. There they were with a new house, a big mortgage, two kids under the age of one, and nobody with a job.
Was it Family Crisis time? Well, no, not really. My sister stayed home and nursed her kids, perfected her knitting, picked up a little money tutoring kids. My brother renovated the house (burned up my belt sander, I'm still mad about that.) They just kind of hung around and mellowed out for a year while their friends said, "How can you DO that?".
Well, when my sister was working as a professional engineer, she had saved most of her income. My brother in law had the family expenses to deal with, but he had saved a lot of his salary anyway. And Big Bro (me) had two years salary in the bank because - heck, I mostly enjoy bicycling, hiking, and reading, and none of them came near using up my salary as a systems analyst. So, we all kind of mellowed out and did our thing while time flowed by.
My brother in law, in addition to renovating the house, had been talking turkey with a consulting company who had been negotiating a big contract with a government agency. He had turned down a few prospects in the interim because they just didn't come close. One day, the big deal came through, and the consulting company need a new project manager ASAP - cost was no object. So, they sold the house, bundled up the family, and moved off to their new adventure. The newly renovated house sold for 50% more than they paid, they doubled their money and bought a new house in their new city with the proceeds, plus a new car as well. Big Bro (me) cashed in his 1/3 share, picked up his 100% ROI, and thanked the Lord for little sisters. Big grins family-wide.
This is what happens if you don't get overextended in your family expenses, keep money in savings, and don't let opportunities escape you.
And if you live in Canada, where I'd guess a lot fewer go broke due to healthcare costs?
Correct. They did have government-supplied healthcare, so there was no risk of going broke due to healthcare costs. There is a safety net in Canada and it will catch you, so all you have to do is ensure you have enough money to get you through a long period of unemployment - and the monthly amount is pretty easy to predict. Everybody has mandatory health insurance, there are no issues around unexpected medical costs, and things like mortgages and food costs are highly predictable and controllable, so you just have to pick a worst-case number for how many months you might be unemployed. 2 years is not an unreasonable estimate for a family to budget for.
The US is a bit of a mess from an economic predictability standpoint. Health care can bankrupt you. Even mortgage costs are less predictable than in Canada.
Oh yes, and fuel costs - a real killer in many US suburbs. In Canada, if you get laid off, you just take the bus or the train instead of driving, and sell the car if you have to. However, the vast majority of Canadians are within walking distance of public transit. Not true in the US.
To have money then the opportunity is there really make a difference. Things bought cheap also make smaller misstakes.
With all due respect, Leanan, this is like arguing about which deck of the Titanic is the safest while the entire ship is sinking.
Our political and economic systems are failing in front of our very eyes. It's not hard to see what's going on if you pay attention. It's all coming undone.
Retiring before 40 doesn't have to be that hard if you can reduce your expectations and preserve your wealth in physical assets. $400,000 in financial securities is high risk, and totally unknown returns. The same amount invested in rental property or farmland is substantially lower risk, and a guarantee of some type of return. Farmland will always provide income so long as people can afford to buy food, and likewise rental property and rent. In a scenario where this isn't true, then wealth would be meaningless but you would most likely still be vastly better off then investing in financial securities.
You only get in financial troubles if you are sick, if you live in the US. The rest of us who live in socialist hell holes have implemented a solution to the problem.
JW,
that was the most amusing post I've seen here in a long time! :-)
La, la, la - Not listening! I can't hear you and your crazy European Reasonableness!
USA, USA! (cough, cough, cough.. ) We're #1!! (In ineffective healthcare payouts!)
"efficiency comes with a loss of resilience."
I think we need to be careful how we define efficiency, and to not equate it with frugality. While my friends were on the golf course or scuba diving, I was likely volunteering to help a friend with a job adding an addition, plumbing, keeping the beer cold, etc., learning skills and building social capital with folks who actually know how to do stuff. It may seem more efficient to pay a professional to do these things, short term, but my friends now find themselves paying professionals to do most everything. Me? If I can't fix it, either it ain't broke, or it ain't worth fixing; and I know the difference. They buy a boat; I buy solar panels. Which will retain it's value better over time? I miss my fishing boat, but it was a "hole in the water that I poured money into". I have fun doing other things now.
The kid who invests in the future early on, whether that investment is in something that will give a financial return, or skills that are sellable in most any environment, has a different mindset than contemporaries living mostly in the now.
Greer espouses "voluntary poverty", yet also posits that efficiency is tantamount to a loss of resiliency. Many of my projects could be more efficient, though at a cost: Being dependent on a complex supply chain, more initial cost, and less user involvement in the systems' operations, meaning I may not even know how the damn things work, much less how to repair them even if I can get the parts. None of this means we haven't saved for the future, financially. It means we have our minds in two different world views, and a mindset that allows us to operate at a reasonably affective level in both, though perhaps not an optimal level in either. Our expectations are fungible. Others seem to be reliant upon our complex systems to continue as they have. Seems efficient on the surface, going all in. Best to reign in those expectations early on, IMO; frees one to build a surplus of resiliency.
Good point. I have thought long and hard about this, and the thing that triggered it was a comparison between large and small animals in a natural environment. For example if you compare an Elephant and a Rat, you will see that pound for pound the Elephant is more efficient in energy usage or heat dissipation, an Elephant also lives longer. But that's efficiency in only one dimension, a Rat is more efficient in utilizing whatever nature provides, it can eat whatever you throw at it, it can migrate easily, it breeds faster and in a drought you'd put money on a colony of rats outliving a group of Elephants.
It's also a good analogy if you don't get offended by the animal references. Hence poverty is not inefficiency, pretty often poverty means inefficiency. I think one can be efficient in different dimensions yet be inefficient in one single dimension. Sometimes what you need for survival is 'multidisciplinary efficiency' (I just coined that term) which poor people are very good at.
Probably better to think in terms of fragility or brittleness. The more rigid and inflexible the survival strategy, the more fragile or brittle it is and when it fails it fails suddenly without warning and catastrophically.
But I guess it is easy to run into problems trying to classify different strategies as much depends on the wider context. For example do symbiotic relationships increase resilience or decrease it? And if so does dependency therefore increase resiliency? It would seem counter-intuitive if it does. Ho hum!
It is my opinion: that is the kid that had strong role models of parents and/or grandparents, with stories to tell.
The rest all seem to get their cues with all the bombardment of advertizing and second level advertizing of peer pressure: have a cell phone, have an unlimited data plan, hip car, hip car accessories, tablet PC, clothing brand, shoe brand(s), etc etc etc.
The catch is knowing what a good "investment" is. Many people have lots of college debt, who falsely thought it was a good investment but now find that they can't get jobs that put them ahead. Similarly, during the housing bubble most people who bought houses thought they had a safe investment. If you can't recognize a good investment, then you will fail.
Having a cell phone is NOT a luxury at this point. Having a LANDLINE is a luxury. What if you have to move? What if you are expecting calls from employers? Having an expensive cell phone, though, is a luxury. Used, refurbished, cheap cell phones are widely available.
The catch to all of this is income (active or passive). With no income, or low income, no amount of cutting will put you ahead. No investment is possible without either income or debt. Income is the base of economic activity at the household level.
And what happens to the households as the redistribution of wealth through employment income fails, as it is currently?
That's a key insight that many others miss. There are embedded, intrinsic benefits to self- and small-group-relience.
Seems that "we" became specialists and ended up de-skilling ourselves. Re-skilling (or in your case Ghung, never de-skilling) seems a reality-based lifestyle.
"I have no cell phone"
If you don't get one, how can I be the last person in the country without one?
We have computer phone service -- call anywhere, talk as long as we want, for the same basic monthly rate. Problem: when we lose the Internet, we lose the phone. We finally got a cell phone in order to be able to call our Internet provider and find out what's going on. Especially necessary since the pay phone on the corner disappeared one night.
Secondary benefit: my husband and I sometimes get separated in crowds. Now I can find a pay phone and ask where the heck he's got to. Otherwise, it's sporadically convenient to carry a phone -- we don't depend on it.
That is the only problem I've run into with voice over Internet. There are laws protecting your phone service. If your phone goes out, the phone company has to get it fixed ASAP.
This is not true for voice over Internet. IMO, this should be changed, but as it is, Internet is not considered as critical as phone service, and they will take their sweet time.
And you can't call to complain with the Internet out. Pay phones have time limits, and there's no way you can get through the menu before you're automatically cut off. (If you have a question about billing, press 1...) Plus, they expect you to call from home. They ask you to check your modem, etc., which you can't do from work or the corner pay phone.
In the end, it took a month to get service restored. (The problem: squirrels chewed through the Internet cable.)
This is not true for voice over Internet. IMO, this should be changed
Part of the reason for Tarriffed lines was the bargain if citizens give up rights of way, you the phone company agree to be regulated.
The push now by the Phone Companies to the FCC is to stop offering copper-based POTS and move to VOIP. 2025 was a target date with 2015 being no new POTS lines and a phaseout of POTS (Plain old telephone service) by 2025.
But I can't complain about my VOIP phone line expense. Asterisk and Google Voice allow me to call out to any US landline for $0 a month. People can call back on that number for a landline for $0 also. If it is being provided for $0 - what basis do I have to complain?
As for low-cost cell phone - getting old enough grants you elder-access to a cell per government mandate. Low cost cell? Ting - https://ting.com/plans $9 for 100 minutes.
I've hit the same problem. Both ways. I've had toe use the land line phone to tell the ISP the internet was out, and I've had to use the internet to tell the phone company the phone was out.
I also don't have a cell phone. Coverage here is terrible, although better than it was a few years ago. The company has stuck me with a Blackberry, which is how I know the coverage is bad. It gets as many wrong numbers as the land line. And mostly in Spanish.
Give it up, Mr. Rat. Everyone knows that I will be the last person without one. ;-)
Hi Ghung
A timely article in The Washington Post points to the consumption arms race.
See: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/27/trickle-down-...
Thanks, Tom. While the article mentions "keeping up with the Joneses", I think Americans have been programmed for at least a generation to "be the Joneses'. Chomsky's 'manufacturing consent' has exploded into 'manufacturing want, greed and debt'. Our culture has swallowed this meme with gusto. Advertising, and especially TV is saturated with information cum sales pitch shows (hard to tell the shows from the commercials).
My wife was in real estate for a while, and likes to watch the programs showing relatively well-off (often masquerading as normal middle class) couples shopping for their dream home. The realtors often convince these folks that they can afford more than they originally planned. It's like a virus; even those of us who avoid the bug end up paying for treating the symptoms and burying the bodies. Mention any effects on resources or the planet as a result of this deluded state, one will be derided, dis-invited, and marginalised. Believe me, I know.
The gated golf community nearby has had a 50%+ foreclosure rate on lots over the last 5 years, and many existing homes are also in foreclosure as well. Their property values have plunged (one home with a view, sold in '04 for $675k, went last month for $126k, lots that sold originally for $200k+ have gone recently as low as $3500)... and it ain't over yet. The golf course is in foreclosure. Some quick 'cyphering' tells me it's worth much more as farm land for producing income. Nice golf course though.
I'm trying to get the taxes reduced on 16 acres I own with my brother, but can't find any comps to show the County it isn't worth the $14k/acre they say it is; not even half that. Raw land isn't selling at all, excepting a few foreclosures in the $3000/acre range, for cash (which the County won't accept as a comp). Other people keeping up with the Jonses did that (drove assessments up), and I ain't happy about it at all.
Try rustling or renting some cattle. In my area having X animals per acre allows property to be taxed at a AG or ranching rate. You are a beef producer, right?
We had cattle for 37 years but lost the deduction when my parents died and we divided things up. I'm in the process of getting the main section back into ag; getting setup for goats and a couple of cows (decided I don't really like cows much). The section in question can be put into timber after that. The process takes at least three years here.
We're working with a breeder friend to get a Great Pyrenees to guard the goats (coyotes are bad here); we need to raise it with our other dogs so he/she won't see them as a threat. I'll also put a sign out at the road (Warning: Livestock guardian dog will eat your dogs if they roam on this property; something like that). I'm getting the fencing up to snuff this spring/summer. I finished the watering system last summer. Lots to do. Mutton and chevon (goat meat) consumption has been rising faster than production in the US, so I'm hoping it'll be a good niche.
Made me laugh.
There's a blog called Mr Money Mustache about early retirement focused on US. Very good, recommended. He's got a good following as well. Google the name, I'm not posting the link because it will awaken the robot.
I knew a guy who did that, retired at 40, and put his money into the dot com bubble. Had to take odd jobs etc. as the dot coms bombed by 95-98%!
Greetings all!
I've been invited by the World Resources Institute to participate in a workshop in Jakarta, Indonesia. It's part of The Access Initiative which "promotes access to information, participation and justice in environmental decision-making". I'll be there offering technical advice on managing data and making it available and useful to non-specialists.
Now Jakarta is a long way from Seattle. It seems silly to travel that far without at least attempting to reach out to others in agencies or academia who might enjoy a guest speaker or even just a good conversation with a foreigner immersed in international data.
To that end, I would greatly appreciate any suggestions for people or organizations I might contact before I travel to Indonesia.
My email is available by clicking on my name or can be found at mazamascience.com
Thanks in advance.
Jon
PS__ Indonesia is a very interesting country to visit for reasons other than environmental degredation.
Indonesia is interesting because it was once a major oil exporter (one of the reasons for WWII was Japan's ambitions to get control of Indonesian oil production), it was once a member of OPEC, but mostly because it dropped out of OPEC in 2009 because it was no longer an oil exporter but an oil importer.
It could be an interesting study in what the post-peak oil era looks like for a developing country. It should be rapidly replacing oil consumption with other energy sources, and reducing its energy consumption in general. The question is, "What is it really doing to cope with its change in status?"
There are lots of things which could be done, actually doing them is the real challenge.
http://www.bloomberg.com/video/a-car-that-runs-on-air-water-here-s-how-i...
I'm not sure whether this is a breakthrough technology or not. Seems to be more serious than the metal hydride prototype a few years ago. They do have a working prototype. Production projected for 2017 or later.
Articles about this car were also discussed in the previous DB. It's an intriguing thought that an electric vehicle could be powered by Li-ion (or similar) for the 90%+ driving that only requires a 100 mile range, but has the aluminum anodes available for longer trips.
Per the prior discussion, it appears you would have to replace the aluminum after 1000 miles of driving @ around $600 by one estimate, so these are expensive miles to drive compared to what it would cost in today's ICE car or an EV. But the ability to manage your driving between the two batteries and the degree to which you could shed a significant amount of the Li-ion battery weight (and cost) could make this workable.
Yes, as the interviewer comments, the car is powered by a "metal/air" battery. The battery is "charged" when the aluminum as smelted, thus storing the chemical energy later recovered as electricity as the aluminum is oxidized. Rather like the old carbon/zinc batteries, where the purified metal is "consumed" as the battery is discharged. As noted, this is likely to be a rather expensive source of energy for the consumer, since the battery can not be directly recharged, but must be replaced.
Of course, whoever wrote the caption for the video missed this reality entirely...
E. Swanson
The same car with aluminum battery(fuel cell) as discussed in Mondays drumbeat.
http://www.theoildrum.com/node/9910#comment-953992
Steve, you beat me to it, but your post must have been held up in the robots hands as it wasn't there when I posted.
Prior art?
US Patent # 5399,251. System for Generating Hydrogen and Oxygen March 21, 1995
; )
Oil-Demand Plateau Seen as Natural Gas Favored: Chart of the Day
Nothing like a shortage, to bring on a "plateau" of demand.
Ethanol inventories fell again this week in the EIA Weekly.
Corn Supply Slumps Most Since ’75 on Ethanol Profit: Commodities
How can they already predict a record harvest by September?
Or did they just re-use last year prediction of record harvest?
Ha-ha. I have been following ag reports for a few years and you can expect them to predict record supplies every year. They don't consider Mother Nature to be a factor and if they ever do, well, you will already be eating ten-year old spam. Lucky for corn supply, the growing numbers of have-nots cannot afford beef.
Cattle prices caught in a tug-of-war
This is a topic close to my heart.. my observation is that US Dept of Ag always forecasts bumper crops - wheat in my experience - and a low market price is set on expectation of huge supplies. Price remains low through harvest, when many farmers are forced to sell at market price due to need to pay operating costs. AFTER harvest prices rise when true scope of crop becomes known, and there is some real effort by different trading companies and millers to capture the last bushel at some cost close to real value. Not that I would dare to say that the US DOA would collude to tilt the playing field toward the big trading companies and away from real farmers... just coincidental how in my long life how this scenario has repeated and repeated and ....
Pretty close, at this stage of the tooth, it's just how many acres planted.
Apologies if someone hit this earlier.
There is an interesting investigation of demand-side -v- supply-side influences on prices posted up at the NY Fed and reposted on an prominent economics blog.
A New Approach for Identifying Demand and Supply Shocks in the Oil Market
Jan Groen, Kevin McNeil, and Menno Middeldorp
Liberty Street Economics FRBNY, March 25, 2013
Read here:
http://www.ritholtz.com/blog/2013/03/identifying-demand-and-supply-shock...
Or here:
http://libertystreeteconomics.newyorkfed.org/2013/03/a-new-approach-for-...
My apologies if this has already been covered, but I came across reports of a new HSBC study claiming that the world is hurtling towards a "Peak Planet" scenario.
It's apparently a subscription-based study; I can't find it anywhere.
David Roberts notes that the carbon budget and carbon risk lines of inquiry are not new, but he's heartened to see them adopted by a global financial institution.
It's not clear from the reports whether HSBC analyzes anything beyond carbon intensity and emissions, but one hopes they did.
I am not sure exactly what "Peak Planet" means in the context of HSBC, but currently we use the resources of at least 1.5 Earth's every year, and will soon be a 2 Earths. Anything over 1 Earth seems to me to be "Peak Planet".
Don
Don,
Lets be a little more accurate, we currently use the resources of at least 1.5 Earth's extremely inefficiently, leaving Jevon's paradox aside for a moment, there is a lot of work to be done on increasing the efficiency of almost everything we do.
Pat.
Thinking globally, not through the lens of the consumer 'paradise' called the US, where do you see improving by 1/3 our use of the resources the Earth needs to use to maintain the health of its ecosystems. And remember to do so in an equitable manner -- so that the family in India, in China, in N. Korea, in the Sahel, can live (or REASONABLY aspire) to live in a manner similar to how we SHOULD live (not how we DO live -- and I most unreservedly put myself, and everyone I know, in the DO, not SHOULD, group).
I don't see how.
Don
To extend my comment. Apparently their Peak Planet means that if we don't cut Carbon use to near zero by 2020, we will be at great risk of a +2C rise in mean global temp. Peak means using up resources, not assessing the consequences of carbon excess. What HSBC is referring to is Total Ecosystem Failure.
Don
In other words, we are going to get a +2C rise in global temp (and runaway), since there isn't a cat-in-hell's chance of zeroing carbon use by 2020.
Some of us already realised that.
Show us the follow on report that says "OK, so you didn't address CO2 two decades ago, here's plan B"
You're right. 2C is most likely foregone, but m a y b e if we are really aggressive, we can keep it to that. Kevin Anderson (UK Climate Scientist) says passing 2C is a very good bet, and that that is going to put us in the 'very dangerous" zone re: climate events. Still, if we cut CO2 as much as possible, maybe we will still have a viable world.
Don
Way too late. It's possible 2C is here already but the effects are being masked by pollution. If we are really aggressive we might be able to keep it below 4C and settle for partial extinction instead of total extinction.
This weekend is the official start of British Summer Time, although large parts of the Country are covered in snow. The Polar Jet Stream which normally crosses northern Europe is currently over north Africa. This is climate change in action right now and due to the time lag between cause and effect it is going to carry on getting worse for decades regardless.
Seemingly the Arctic sea ice started cracking 5 weeks earlier than last year and before the melt season had even begun. Some scientists actually believe we will see an ice free Arctic within 2 to 3 years. So talking about CO2 reductions in terms of avoiding a very dangerous situation is moot, it's too late, we're already there. We need to adapt quickly to mitigate what's already in the pipeline now. Maybe it's too late for even that.
What keeps me up at night, is that doggone pesky pH log scale that is very clearly telling us that the ocean ecosystems are already completely fubar! Folks, get ready for a world that is nothing like your grandparent's world... I sure hope y'all like jellyfish burgers!
I sure hope y'all like jellyfish burgers!
At least old folks without their teeth ought to be able to eat them. A perfect match for toothless codgers!
Hmmmm, I wonder if an exploding jellyfish population will boost the turtle population? We have had a lot of success with our egg and release program with increases of turtles coming back. Maybe turtle will become a staple.
NAOM
Assuming all the plastic garbage floating in the oceans and Fibropapillomas don't get them first. I'd say the odds of sea turtles being a staple for the long term future are pretty slim. Hope to hell I'm wrong!
http://www.ecohealthalliance.org/news/55-fibropapillomatosis_global_dise...
Yeah, I hope you are wrong too. Here, the number of returns from release has been increasing and so the need to build more egg cages. The increase occurred around the time the first releases would have started to reach breading age so we keep very hopeful here.
NAOM
2C is gone. No question. We just are not doing anything really.
OMG, *no* ponies! Pay attention, people.
Gods gonna destroy the planet anyway..........
It's unnerving how many people still believe in appocalyptice religon. I'm guessing, but these believers have a lot less motivation to actually act in a way that is in alignment with the possibility of people inhabiting the planet for the next thousand years and more. I mean if Jesus is gonna 'come back as fire, burn all the liars, leave a blanket of ash on the ground' what difference does it make?
My Train Fantasy
Alan, do you have any comments regarding this article?
I will need to read the 2011 report they mentioned. And some common conclusions.
Electrified & expanded freight rail has 3x to 8x the oil savings potential of pax rail - and it is also more essential.
I propose combined express freight (low & medium density cargo, 90 to 100 mph) on the same tracks as semi-HSR pax rail (110- 150 mph).
This expands the economically viable network.
Past 300 miles, rail starts losing pax. IMHO, demand really drops off past 500 miles (Paris-Marseille is just past that, which is a heavy route), not 600 miles. And fast rail has a place <100 miles.
I take 120 mph MARC from DC's Union Station to BWI (rail station for airport, maybe 50 miles).
Ed Tennyson and I proposed using 90 mph EMUs to get around the Washington DC area on existing MARC & VRE tracks.
http://oilfreedc.blogspot.com/2012/07/emus-90-mph-from-rockville-to-crys...
Best Hopes,
Alan
I spotted that Guadalajara is planning to build a 3rd line across the city. Part of it will be elevated and part tunnelled with part of that near the cathedral. Sorry, I didn't pick up any further details.
NAOM
Cyprus financial crisis boosts demand for digital dollars
There's a huge surge in demand for Bitcoins in Greece and Spain - people who are worrying they'll be the next Cyprus.
http://online.wsj.com/article/SB1000142412788732437320457837461135112520...
The U.S. is applying money-laundering rules to "virtual currencies," amid growing concern that new forms of cash bought on the Internet are being used to fund illicit activities. .... It isn't clear if the latest guidance would apply to a merchant's online scrip. Amazon.com Inc., AMZN +1.88% for example, in February announced Amazon Coins, which starting in May can be used to buy apps and games on Kindle Fire. An Amazon Coin is worth one cent.
IMF: Want to fight climate change? Get rid of $1.9 trillion in energy subsidies
Rationing by price is likely the only hope we have of cutting carbon emissions by any amount that matters. It's also a pretty good way to push an economy over the cliff, not to mention folks living on the edge already. It's a fairly simple problem with hyper-complex ramifications. Making the burning of fossil fuels (and some of the other stupid things humans do) prohibitively expensive may give us a chance, but I don't see any way to get there. It has to be global.
Push the economy over the cliff? Sure, I'm all for it. over the cliff is the very best thing to do with the economy we have now. Why that? Because MOST of the "economy" is pure crazy suicidal nonsense, that's why. I know I have said this too many times, but I will say it again.
Walk thru any store in the US. As you do, ask "is this thing here needed" A huge fraction of the time, the answer is NO, NO NO NOT AT ALL--- OR ANYTHING NEAR IT.
So why the hell did somebody pour work, energy, materials transportation, packaging and the whole shebang into putting this piece of totally unneeded crap before me in this store???
And, by the way, by doing so, putting the whole planet and the future of the biosphere on the road to hellfire?
How to fix it? Do what people thru history have done when they find the cave bear has decided it wants its cave back-act fast and smart- or be processed into a bear turd.
DO IT, AND YELL AT THE PEOPLE WHO DON'T.
PS Ghung, I know you are a good guy and already know all this. I am hollering at the others. The ones
Who debate the relative price of this or that source of the carbon any and all of which we all know for sure is gonna kill us if we use it. Flat out nuts!!
Seraph, it looks like most of the "subsidies" is due to not taxing carbon dioxide.
Best hopes for reducing the "subsidy" on carbon dioxide.
Well . . . I suspect a number of those subsidies will go away with common people kicking & screaming and literally rioting. A lot of poorer countries just won't be able to afford to keep paying for the subsidies. Places like India, Indonesia, Egypt, etc. Unless you are an oil exporting nation, subsidizing oil is a crazy and ultimately hopeless thing to do.
And even for the oil-exporting nations, it is an amazingly stupid thing to do since it just encourages waste and loses valuable export trade. And remember . . . oil-export nations often eventually turn into oil-import nations. Just ask Indonesia and Egypt.
Australian Defence Force urged to be ready for climate change role
Cincinnati Commits to BAU Transportation for 50 Years
I haven't seen anything like this anywhere else, so I'm posting what I know about what our city council has done. They approved the form of a contract on March 6 which leases out the city's parking system. That alone is cause for concern, but to ensure that the money collected doesn't go down, they also committed to not taking any action that causes a "Material Adverse Effect" (see Section 3.23). That is defined as meaning an act or omission that would result in the debt service coverage declining by 15%. And in case you were wondering what that means, the previous version of the contract, no longer available on-line, gave some examples. Among these were "the City's expansion of its mass transit system, other than as part of the Cincinnati Streetcar Project."
Now the Cincinnati Streetcar Project hasn't been built yet and not one foot of track is laid. I don't want to go into it much, but suffice it to say for now that it is very dubious whether it would upset BAU.
The clarifications of what a "Material Adverse Effect" might mean were dropped when the public noticed them, but the base language remains. Clearly there was a back room deal made. Maybe it even covers other things that might lead to fewer people driving and parking at meters and garages, such as bike paths and lanes or city-wide wi-fi. Has anyone else seen anything like this? I know other cities are leasing their public parking. Do they have similar clauses?
The lease for the meters lasts 30 years, the lease of the garages lasts 50 years. 50 years is a long time to commit to BAU.
A perfect reason for companies and individuals to plan on moving away from Cincinnati.
As oil spirals up in price, driving - and parking - will decline. And even without mass transit, they will still lose business.
Little Hope for Cincinnati,
Alan
PS: Cincinnati has a half completed subway line from the 1920s/1930s.
Earl,
Reminds me of a piece Seraph posted a while back...
Bob The Businessman — A Fable
The municipal crookedness that entrenches BAU is something to behold. Unfortunately for some weird reason you can count on average folks to vote for the politicians that get the most campaign funding from the guys who built the crappy and inefficient houses that average folks live in, and pave the roads the average folks have no choice but to drive on if they want to get to work.
Andrew
I think Bob the Businessman is an amateur compared to what I have seen in Cincinnati. BTW, the major media will generally censor themselves -- they do not need to be directly controlled. On the one hand their major revenue comes from ad sales, mostly from large corporations that are heavily invested in BAU (think auto sales). Also, they don't want to get their readers so fired up they don't even notice the ads. On the other hand, if they don't report anything worthwhile at all, people won't look at the news and therefore won't look at the ads.
A few years ago the Cincinnati Post newspaper stopped publishing. That was a loss, though the paper had been getting smaller for years. If a city has two papers there is a better chance of good reporting and investigative journalism. Television sometimes does good investigative work, but it seems like most viewers choose a news station because of the personalities (or because the network reinforces their preconceptions) than because the quality of the news.
I sometimes wonder how the news media can be revivied. I am glad for TOD and the news and analyses it provides.
Who owns Big oil?
http://www.whoownsbigoil.org/?gclid=CKXxjuKHnrYCFW2oPAodDXMAXw
Who has data to corroborate this?
There's no need since it isn't a major surprise. Most old blue chip stocks are largely owned by giant, conservatively managed funds. Stability is crucial to pension interests, and the blue chips have long provided reliable (if unexciting) returns.
Big Oil is about as unpopular as the Big Finance they also have in their retirement plan... and there's also Big Pharma, Big Media, and Big Agribusiness. Pension and mutual funds who chose smaller, less reliable, and less profitable industries would be facing torches and pitchforks.
Oil spill clean-up ship hit sandbar en route to government news conference in Vancouver
By Mike Hager, Vancouver Sun March 21, 2013
I personally have never been stuck on a sand bar off Sand Heads (aptly named), although I have gotten stuck on a sandbar further up the Fraser River. It's not generally that big a deal - you just throttle back and let the current push you off. If you're lucky.
But it denied the ship had a “close quarters situation” with a B.C. ferry near Active Pass
You almost always have a "close quarters situation" with a BC ferry when you take a boat through Active Pass. It's a narrow pass, the currents are fast, those are big ferries, and there are sometimes three of them transiting at the same time. The best you can do is time it exactly right, stay as close as you can to the cliffs, try not to get spun around by the currents, and white-knuckle your way through.
When I'm on a ferry, I like to watch the crewmembers go forward as the ferry approaches the pass, and stand there between the two forward anchors as it goes through. As they explained to me, they do that so that, if the engines fail, they can drop both anchors at once, and tell the investigating committee that they did everything they could before the currents swept the ferry onto the rocks. It hasn't happened that often but its always a bad experience.
Re: EPA: More than half of U.S. rivers unsuitable for aquatic life
This confirms to me that a clean environment is seen as a luxury. We are literally going backwards, right back to where we were in the 1950's. The causes are different, primarily agriculure and urban runoff issues are at fault rather than industrial dumping, but the effect is largely the same - dead rivers and lakes. Lake Erie is once again in crisis as well. Despite this, the EPA is painted as a "rouge agency" and almost nobody is calling for change. Bill McKibben may be doing good work in one sense, but him and all the environmentalists in the world who are focusing on climate are not saving the streams in our back yards.
If I remember correctly, this was predicted in "Limits to Growth", that pollution would increase at a sharp rate as things started to fall apart. Well, it's here. Funny how it's also here in the "developed" world, where we are so proud to be better than places like China.
"Despite this, the EPA is painted as a "rouge agency""
Rogue agency, unless you mean they were reddish in color. This typo has been showing up more and more lately.
On the EPA, they are up to some other exercise for drinking water standards. Gathering baseline data, as it looks to me.
http://water.epa.gov/lawsregs/rulesregs/sdwa/ucmr/ucmr3/basicinformation...
Well, from the comments of the EPA's decractors, it might just be "rouge" because it sure is "socialist". Somehow. The red scare never ended, did it?
If you read the article, the issue is not the unregulated contaminants, but known and regulated ones - phosphorus and nitrogen, fertilizer in other words. So, the EPA isn't or can't do the job it was made for in the first place. I think they may lack the teeth to deal with agriculture, as the laws were written with the idea that industry was the problem rather than agriculture and urban runoff. Point source (indsutry) vs. Non-point source (ag, runoff).
I have to admit I am more concerned for the fish than for my drinking water, perhaps I've gotten complacent. We seem to know how to get potable water, but keeping the rivers and streams clean enough for other life somehow is beyond us.
I've just started playing with the Beta API for the accessing data from the EIA:
http://www.eia.gov/beta/api/series-command.cfm
Is anyone else playing with this? I've some Python scripts getting written, and I figured I'd ask if anyone is interested in getting things throught his API, in which case I would be happy to oblige and provde what I can.
Suncor cancels proposed Voyageur upgrader
See: http://www.cbc.ca/news/business/story/2013/03/27/suncor-voyageur.html
Wheels starting to fall off the cart?
Cheers,
Paul
That is some more writedown! What does this mean?
From the Edmonton Journal Suncor cancels $11B Voyageur oilsands upgrader project north of Fort McMurray
Why would they absorb Total's loss? But far more importantly would be does this mean that further expansion of the oil sands will not be economical? Is this the beginning of the end for the oil sands?
Help, someone answer these questions.
Ron P.
I suspect it's a combination of rising costs and the huge discount to global oil prices that Canadians are getting. But the following excerpt from the Edmonton Journal article is interesting:
In other words, it looks like the total extraction + upgrading cost was going to exceed $100,000 per bpd of production (I suppose they are talking about Canadian dollars).
Not sure on the Total issue but for the overall developement of oil sands...no...Suncor scrapping an upgrader does not mean (imo) that oil sands devolopement will slow down. What it does mean is that no one can justify building another upgrader. So all new production will be Bituman. Currently the companies that upgrade oil(Such as syncrude, Suncor, Canadian Natural Resources, Imperial Oil and a few others)are getting much better prices on upgraded oil than heavey oils. http://www.bloomberg.com/quote/USCRSYNC:IND Currently the Syncrude blend is trading above 103.
Something else to think about is that Bituman has to be diluted(usually with condensate which has to be railed in) to be able to flow through pipelines. Depending the the viscosity of the Bituman and the time of year it could be as high as 50%. So a road block to expanding production could be getting enough dilutent or having enough rail capacity. It might not be the pipelines which everyone is so worried about....
One reason Total and Suncor scrapped the upgrader project was because the diluent supply problem has gone away. They were predicting a shortage of condensate for diluent because Canadian production was insufficient to dilute the amount of bitumen currently being produced, and they thought they would have to upgrade a lot of it to syncrude to market it.
However, increased US production of condensate has solved the problem. Unbeknownst to the MSM, most of the production from the Eagle Ford and other "shale oil" plays is actually condensate, and much of it is being exported to Canada for use as diluent.
The problem with oil sands at the moment is that all the export pipelines are full and producers can't physically move more of it out of Canada. That is solvable by building more export pipelines, which are currently blocked by the environmentalists and the US government. I think the Canadian government has a plan to clear the logjam, but the politicians are waiting for the right moment before striking. Until the pipelines are built, new oil sands developments are being put on hold.
The problem with upgraders is that they are uneconomic because too many refineries already have the capability to process unupgraded bitumen, and it doesn't make sense to spend a fortune to do something the customers can already do themselves. The problem is really the lack of pipelines to get the oil to the refineries.
I think Suncor bought out Total's interest in the upgrader because it has some other uses for the assets. Total still retains considerable interest in the producing end of the industry. http://www.calgaryherald.com/business/energy-resources/Suncor+Energy+Voy...
And, really, I think technology is on the verge of passing the big stand-alone upgraders by since companies are developing ways of partially upgrading bitumen to the point where it flows through pipelines and can be run by conventional oil refineries: http://www.calgaryherald.com/business/energy-resources/Calgary%20company...
This is not the only company starting low-cost, small-scale, partial upgrader projects at this point in time. That in itself would make someone think twice about spending $12 billion to build a full-scale upgrader.
RMG, if there was more than ample capability to transport oil from the tar sands, i.e. no limit to how much could be processed and reach market, and environmentalists were completely ignored how many barrels a day do you think they could move? Is it conceivable to move 8-10 mbd?
They could conceivably move that much oil, but it would take decades to ramp production up to the 8-10 Mbpd level. Producers are only adding about 50-100 kbpd of additional capacity each year.
So . . . Bill MicKibben and his crew are having an effect.
10,000s of rail tank cars are on order.
China imported over 1 million b/day from Russia by rail for a decade, despite the change of gauge.
Central Asia moves millions of barrels/day to markets by a combination of rail & pipeline.
Alan
Wal-Mart mulls getting customers to deliver packages to online buyers
'Grasping at straws' comes to mind. Do they give you a free hat?
No, but you get a T-Shirt saying "I don't work as a courier for free".
Cover the cost of gas? What about wear and tear on the vehicle, insurance, etc.? The IRS allows 45 cents a mile, but I'm sure in this case it will amount to a pittance. What about the time it takes, i.e. labor? This is an obvious attempt to exploit the minimally educated masses, who will simply focus on a small benefit rather than think through all the associated costs of making deliveries.
They should give these delivery people T-shirts that reads, "Still trying to pass the GE test"
And no doubt pretty soon they'll be issued Manna headsets, and then they'll be Walmart employees...
Only thing Brain got wrong was that the wealthy would Nuke Australia! They'd never allow it to exist.
Craig
I read that yesterday - it was really pretty interesting until it got to the utopia part, then it became absurd. Basically, it failed to recognize that humans will foul up anything, including both the police state and the utopia.
I think it is a good idea.
Azeri Oil, Natural-Gas Exports Fell in First Two Months of 2013
That's quite a drop from last year. The Caspian is not turning out to be the Bonanza folks thought it would be. Production fell last year in Kazakhstan though they do expect a small increase this year, but likely less than the decline in Azerbaijan.
Ron P.
Hilarious interview on CNBC regarding the natural gas (NG) storage report (shortly after 10:30 Eastern). Storage was down by 95 BCF:
http://ir.eia.gov/ngs/ngs.html
The reporter was talking to an analyst who--a year ago--suggested that we were headed to $1 NG prices, when the price was then around $2. So, with that track record, the analyst said that we were still "Well above the 5 year average in storage," (Not true methinks), and she put the price ceiling at $4.25.
So, based on prior track record, perhaps we should expect $8 natural gas a year from now, or would it be $16?
From the Financial Times, (requires free registration) Is the end of the oil era nigh?
This is not what it seems it might be from the title. Citi, a day or so ago, posted to all its clients, a large PDF file, (can't find it on line), stating that the end of oil is approaching because it will be replaced with natural gas. From the Citi report also quoted in FT:
It predicts that by the end of the decade Brent prices will be between $80 and $90 a barrel, owing to the fact that demand will drop, as everyone shifts to natural gas, creating a glut on the market.
Ron P.
The WSJ (behind paywall) and Marketwatch also had articles on this.
The Wall Street Journal article is available via Google if you post in the search box "Oil Demand Could Peak by End of Decade, Citi Analysts Say". From the WSJ article:
Arthur Berman says that it that the average "break even" point for NG drillers is about 3 times what it was when this video was made last year. It was just over $2 then so about $6 per MMbtu would be about the break even point. Shale Gas Update, with Art Berman This is a great video and Art explains, or attempts to explain, why dirllers are still drilling even though they are currently losing money, big time, with every well. (Prices today are $4.06 per MMbtu).
This is a great video from last year's ASPO meeting. You will find out a lot you didn't know about the natural gas industry.
Ron P.
"To infinity, and beyond"! The priests of the Religion of Progress are working it overtime to keep the flock in line. Boy are they gonna be surprised. I wonder if many of them will get pissed off about it later?
Looking around for the Kleinman and Morse’s note from CITI Bank, I found several links to earlier work by Ed Morse proclaiming that Peak Oil is Dead back in December 2012. This latest report appears to be a repeat of that earlier work. Of course, they ignores the fact that natural gas isn't as easy to use for transport as liquid hydrocarbons and using NG requires different equipment. Gotta hype NG to get the price up, so the banksters can sell out before the next crash...
E. Swanson
Yeah, OK. Peter Orzag, you fill up your car with natural gas and let us know how it goes.
The oil-burning power plants were largely gotten rid of decades ago. So what is this substitution of natural gas for oil that they are talking about?
Perhaps they realized that their oil cornucopia stories were looking increasing bad and now they've changed course?
From the WSJ (behind paywall):
Oil Spills Mount on Tracks
Minnesota Derailment Joins a Sharp Rise in Incidents in Years of Energy Boom
Tank cars were one of the biggest derailment problems we studied when I was working on railroad safety issues. That was more than 20 years ago...
EDIT: HERE's an UPDATE from NBCNews. There's a good photograph of the wreck included. That's Canadian oil spilled on the snow, maybe DilBit...
E. Swanson
I could not tell from the photo how many entrances to the worst leaking tanker there were. I believe the tankers with two entrances on the top has one for steam to heat the contents. Much of the oil sands transferred by rail does not need dil-bit, steam does the trick.
Not sure (probably not yet) if the new CPR trunk slated for the Bakken is up and running. Theoretically Bakken oil could go north and then back south.
It was a mixed-freight run (another source) and not a dedicated hot-shot. Actually not that long a train compared to some. I see trains of 200 cars with 100+ tankers at the end on CN going over the Red River real regular. Different residential house for me to work at next week, I will be going past CPR tracks and will see if they are carrying 100+ oil tanker car trains.
Another web site is
http://minnesota.publicradio.org/display/web/2013/03/27/regional/parkers...
Later post on MPR has the track back up and running.
714 barrels is about 1.2 tank car loads. Apparently one car ruptured and two others were leaking.
If they could pump the oil in a Minnesota spring, then it wasn't bitumen. The good thing about a bitumen spill in winter is that you can clean it up with a front-end loader.
Most likely it was North Dakota Bakken oil going to market. CP has a thriving business moving Bakken oil to eastern US And Canadian refineries because of the pipeline limitations. CP has tracks that run through ND and Minnesota. CN is better positioned to move bitumen to market because it has tracks that run all the way from the oil sands to the Gulf of Mexico.
Two pages at a web site that has more info about rail distribution of crude in NA. I recently stumbled onto them.
http://www.rbnenergy.com/crude-loves-rocknrail-heat-it-bitumen-economics...
http://www.rbnenergy.com/crude-loves-rocknrail-bitumen-by-rail-part-2
And a MN state .pdf map of railroads.
http://www.dot.state.mn.us/ofrw/maps/MNRailMap.pdf
And a ND rail map is at this site.
http://www.business.nd.gov/businessInformation/infrastructure/rail-service/
Well, looking at the railroad map of MN, it appears that the derailment was on the northerly CP line from Canada rather than the more southerly CP line from ND, so it most likely was Canadian oil rather than ND oil. The two CP lines merge nearby in western MN, so you have to look at the map carefully to figure it out.
They were only able to pump a fraction of the oil before it cooled and congealed to the point where it wouldn't pump, so it most likely was bitumen rather than light oil. The good thing about this is that it won't seep into the frozen ground, and they can clean it up with a front end loader, as I alluded to above. This means that, although it is difficult to recover, the effect of the oil on the frozen MN environment will be minimal.
The oil has congealed in the tank cars to the point where they can't get it out, so they are going to have to bring in steam heating equipment to liquefy it and pump it into other tank cars. From this I would deduce that they are insulated tank cars with internal steam heating coils, specially designed for hauling bitumen.
Reporters on the spot could have figured all this out just by looking at it, but unfortunately they didn't know what they were looking at. It's not conventional oil at all.