Lest you know not yourselves
Posted by Heading Out on December 2, 2005 - 1:43am
Given the broad range of folk that comment and write at this site about the Peak Oil situation, I thought you would all like this quote
Most of the Hubbert modelers and their alarmist colleagues work for major oil companies, energy consultants, or governments of oil-producing nations. It is in their employers' interest to keep the world in a fluctuating state of alarm over the oil supply, since looming shortages are used to justify high prices.Just thought you'd like to know (grin). And if you had missed the tenor of the book it also states "the industry is more likely to run out of markets long before the supply of oil peters out." In earlier discussion we have commented among ourselves that the requirement for reserves to be drilled into before they can be counted as proven, means that, as a field is initially developed, the reserve prediction for the proven reserves in the field will generally grow, often significantly. But there comes a point when the field is fully defined, and beyond that point it is not possible to create more oil. Further with the relaxation of definition that occurred as oilfields moved from being under the oil companies to being under the oil countries, some of those restrictions on definition no longer have held. This is largely understood in the overall estimation of how much oil is where by many of those who post here. And, as a result, there is a concern that nations now over-state their reserves.
His solutions are to use the Strategic Petroleum Reserve to bring down the price of oil and break the back of OPEC, by forcing a dramatic cut in price. (He suggests about $10 a barrel). Second we need to find alternative energy sources - and his main hope is nuclear (there seems to be a lot of this going around). Third, he wants a voucher-based gasoline distribution system, where you have to buy gas above your quota by obtaining the vouchers (at a price) from those who do not use all of their own. Fourth we should put OPEC on trial, since it is a blatant conspiracy to rig a market. And then we should go believe in Amory Lovins.
It is a somewhat strange book, because there is a certain lack of consistency in its progression. Certainly it poses an argument, though not with many credible numbers, for there being plenty of oil around, though in part by ignoring some inconvenient facts. And it fails to understand the burdens of time in finding alternate solutions. In all it was an interesting read, with some different views as to how we got here, and much less credulity for the present Administration and the Gulf States than I had originally imagined, but there were really no credible suggestions at the end, and so it is another book for the dark end of the bookshelf, although perhaps a little closer to the light than some.
Note that the author was on Newshour on November 12th, but I did not know that until I just Googled to see if there was any more information out there.
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I have a question about oil production. What exactly are "Natural Gas Plant Liquids" and "Refinery Processing Gain?"
The EIA's annual production numbers for the United States for 2003 show 8,797 thousand barrels per day (table 1.4)
This includes crude, NGPL, other liquids, and RPG.
The NGPL number is given as 1,719 (table 43(4.3?)). What are NGPL's so that they can be considered the equivalent of petroleum and why are the US and Saudi the only countries that produce so much of them
RPG is given as 974,000 bpd (table g5). This is almost 1 million barrels a day of our crude production coming from what seems to be the refining of 20 million barrels of crude per day. The Saudi's produce a negligible amount of RPG.
If you need more detail on this (ie. carbon chain lengths, etc.), let me know.
Instead of saying we use 19 million barrels of crude a day, we are saying we use 20 and produce an extra one which we add to our production column rather than subtracting it from our consumption. This would ceratinly figure in the overall world supply/demand balance. This would also apply to the 1.7mbpd of NGPL. It wouldn't necessarily be such a big deal except we seem to be the only major producer of this stuff. Certainly we don't have the only refineries and plants in the world, so how is the rest of this stuff accounted for around the globe? Maybe I'm overanalyzing this.
Would someone slap the guy, please?
First, if there's plenty of oil around, and if we "break OPEC's back" to force oil to $10.00/barrel, then why the hell do we even need to develop "alternatives"?
Really, how much oil is there in the SPR? Enough to break OPEC's back? ha ha ha ha ha ha!
Then there's that chestnet: NUCLEAR as an "alternative" to oil. Um, but ya can't put uranium in yer gas tank. Maybe in Uranus, but that's a different planet.
Hearing this, hot on the heels of "Lord" Browne's crappy interview on NPR (in which he doesn't even acknowledge peak oil, let alone try to sound "alarmist")makes me want to slap SOMEBODY.
But I prefer batteries. Lead is cheap.
Peak Oiler: Oil prices are going to get much higher.
Oil Company (with swarmy concern): Oh, yes.
Pear Oiler (sotto voce): Er, this may not be going the way I intended.
Published on Friday, December 2, 2005 by Energy Bulletin
http://www.energybulletin.net/11370.html
Revisiting International Energy Outlook 2001
By Ron Patterson
In late 2001 Roger Blanchard published a critique of the EIA's publication "International Energy Outlook 2001". Roger thought they would miss their mark. Four years later I thought I would check some of their predictions and see how they were doing.
The EIA practices top-down supply prediction - forecast demand, and then insure supply will be sufficient to cover by number fudging.
Is there any analysis in the book that suggests how much crude flooding the market might be required to bring about his target price of $10 for different given open market prices? Does he compare these numbers to the actual amount of crude we have in the SPR, then compare this to OPEC's operating costs to see how long they could outlast such a price drop and give cogent reasons why they couldn't survive? What a pie in the sky option.
Spoken like someone who believes fully in the divine sanctity of markets. Obviously manipulating one would be some kind of mortal sin. Is there settled international law--that OPEC would be subject to--regarding price fixing?
there need to be also a refinery bottleneck in place along w/ massive surge of foreign oil imports. See post-Katrina-Rita. the market was flooded with extra oil with nowhere to go. and the price has touched $56/barrel since $70/barrel.
Second, the 700mb SPR is enough to supply the world for eight days, or enough to match OPEC output for around 20 days. Useful for US emergencies, but not enough to break anybody's back.
OPEC is a cartel, which would be illegal in the US, but not illegal in any of the OPEC countries. Of course, we could punish them by refusing to buy their crude.
OPEC's power has come from its past withholding of crude from the market, driving up price. They now are satisfied with price, so pump avery barrel possible. Their past actions in raising price encouraged efficiency and is why the world did not peak years ago, why the world had some spare capacity to accommodate Asian increased demand, and why global warming is not already much worse. Note, for example, that western oil companies have always pumped every barrel possible, never saving supplies for a rainy day. OPEC deserves a medal for their past actions, but consuming countries are sadly in no mood to give them one.
My questions were intended to draw attention to absurdity of his idea and its lack of empirical support, not to be actually answered, although it would be interesting to see if and how far we could drive the price down by dumping the SPR, as a purely intellectual enterprise.
Well, now that the word is officially out maybe the conspiracy crackpots that peak oil attracts will stop posting here on TOD.
Perhaps I should stop writing comments and get back to work like the nice obedient drone that I appear to be.