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Weekend Open Thread...
Posted by Prof. Goose on August 27, 2005 - 3:08pm
Keepin' it real, as always.
I will be updating the weather predictions periodically below.
“For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled.”
—Richard Feynman
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I mentioned a couple days ago (in the CAFE thread) that GM has extended it's fire sale (PLEASE buy something so we can have jobs) until the end of September. Also notable is they are adding "most" 2006 full size pickups and SUV's to the list of eligible vehicles.
Hefty taxes to be imposed on gas guzzlers in China
http://www.taipeitimes.com/News/worldbiz/archives/2005/08/27/2003269396
NY TIMES NEWS SERVICE , HONG KONG
Saturday, Aug 27, 2005,Page 12
Alarmed by high world oil prices and sporadic shortages of gasoline and diesel fuel in big cities this summer, China's leaders are drafting plans to impose steep taxes on cars and sport utility vehicles with gas-guzzling engines.
The taxes would add as much as 27 percent to the price of vehicles with big engines, notably sports cars and SUVs, auto-industry officials and people advising the government on the plan said. At the same time, taxes may be cut slightly for models with the smallest, most efficient engines, though the details of these cuts are still under discussion, they said.
Big 3 Muscle Cars are back. In case you just can't live without 400 horsepower in your coupe.
No mention whatsoever of mileage in this article...
http://www.scrivener.net/xp/president-bush-is-numb.html
TOP-SECRET STUDY: WORLD SUPPLY GONE IN SIX MONTHS
By Dick Siegel
Washington, DC-A secret report presented to President Bush from his friends in the oil industry contains a stunning revelation: the world supply of oil will be completely used up in just six months....
Canada Digging Trench to Separate From US
What?? You want us to buy from a company that conspired to trash the US light rail system?
:)
Additionally, this extended sales was likely planned in advance, and a good technique is to sell off the low hanging fruit first. The sale brought in people, some of whom decided to buy an albatross er, and SUV at full prices regardless. Some looked at SUV's, kicked the tires and said maybe later. Now there's an extended sale, and even some SUV's are on sale. Do you think they're going to get any tire kickers back? And since SUV's are high profit for them and still the going rage, I'd imagine there's no shortage of people who were brought in but bought full price SUV's.
I found two very interesting articles in yesterday's internet version of the Norwegian business newspaper DN (http://www.dn.no/forsiden/article577964.ece http://www.dn.no/forsiden/energi/article579634.ece). They are about the production decline from the Norwegian oil fields were apparently 21 of 44 fields is declining more than 15%. The articles are in Norwegian but I will try to give a summary of them.
- On 30 of 44 fields has the production been smaller than last year
- Most of the oil field have past "plateau-production" (or peak...)
- The peak of Norway was in 2000
- The estimated production for this year was 2.8 mbd, but it's highly unlikely that the average production will reach that high this year. The average this year is 2.6 mbd with an exceptional bad June (average 2.2 mbd)
- 21 fields has a decline of more than 15%
A decline rate of 15% is really a lot! I wonder of CERA is calculating with this numbers in their estimates?I'm curious if anybody has seen other examples of fuel surcharges popping up. UPS is now adding one to boxes you ship, for example.
And I had it shipped instead of driving five hours to pick it up, cost me about the same but hopefully they already had a driver on the route so the incremental fuel cost of my three pound package was negligible :)
Dear Sir
We represent the seller that has existing and current Allocation from Nigerian National Petroleum Corporation for lifting crude oil.
- PRODUCT: Bonny Light Crude Oil
- ORIGIN: Nigeria
- QUALITY: NNPC standard export specification
Technical specifications:-Specific Gravity (API) 37
Density at 20 degrees, CG.CM, max 0.85
Basic Salt Water (BSW) 0.6 % Vol
Color Dark Brown
Salinity PTD ATO, 10% BS&W 47 max
Acid Number 0.39
Reid Vapor 6.52 max (PS)
Water & Sediment % max 1.0
Iron, wt ppm 1.0
Vanadium, wt ppm 2.0
Nickel, wt ppm 4.0
Pour Point below 400 deg. F
Sulphur Content, % wt 0.14
- QUANTITY: 2-4 million barrels per month for 12 months +- 5%
- LOADING PORT: Bonny Terminal, Nigeria
- DISCHARGE PORT: ASWP
- DELIVERY: F.O.B or C.I.F. delivery basis at the Buyer port of discharge
- INSPECTION: SGS
- Price, Credit Period & Currency:
The price to be paid shall be based on the loaded quantity of Crude Oil for each shipment based on standard barrels and under "Dated Brent" as in the Platt's Oil gram Report.The applicable currency in respect of payment for the Cargo shall be United States Dollar (USD). The price shall be calculated on the three (3) days average mean quotation, one day before the date of loading, the day of loading, and the day after day of loading.
The Discount to the Buyer shall be US$5.00 Dollars per barrel gross below DID Brent / Net US$3.00
Dollars to buyer, US$1.00 to buyer side agent, US$1.00 to seller side agent.
10. Payment Terms:
The payment will be in US Dollars and made by irrevocable, confirmed, transferable, revolving (SBLC) issued or confirmed by a top rated World Bank in favor of the Seller in the amount in US Dollars corresponding to the total value of each shipment. SBLC issued will be valid for forty five (45) days.
11. Vessel Nominations, Shipment & Procedure:
I. After LOI from Buyer and FCO from Seller. Buyer Issues ICPO With Full Banking Details and BCL.
II. Seller Issues Full Styled Contract with Buyer & Seller Full Banking Coordinates.
III. Seller Buyer Sign, Seal This Contract And Exchange The Singed Copy By Electronic Mail. The
Electronic Signed Copy By Both Parties Is Considered Legally Binding And Enforceable.
A.: Within two (2) banking days, Buyer Bank sends to Seller Bank, through
SWIFT code, STANDBY LETTER OF CREDIT - NO OPERATIVE, Irrevocable,
Confirmed, non-transferable, Revolving (according text added on this contract)..
B.: B.: Within two (3) banking days, Seller Bank posts 2 % PB no-opetative (as per annex B) to activate
Buyer Standby Letter of Credit no-operative. And send a copy of NNPC POP (ABUJA) via Fax or email.
C.: Buyer bank activate the SBLC on 100 %.
IV. Seller within six (6) banking days will register contract on SHELL SCREEN LLOYDS LONDON in name of the Buyer.
V. Seller Nominates the Vessel and Gives to the Buyer: Ship Name, Call Letters, Captain Name and a Copy of the Aspatankvoy Charter Party.
VI. Seller Delivers Crude Oil.
Be of interest please send down your phone number and let discuss the next step foward.
Best Regard
Director
Mike Jones
United oil agency
Email:unitedoilagency@netscape.net
Yours faithfully
by James Howard of the UK.
This author (and I don't know his background) has gathered some information which shows that the poorest countries are being hurt now by peak oil. He postulates that the poorest economies are not able to obtain oil at current market prices.
This does 2 things - one it permanently prevents these countries from expanding their economies. They will never again be able to buy oil, because prices will always go up. And two it free up oil for the rest of the market, masking how close we are to the peak (or that we have even passed the peak).
The second point is an interesting look at how markets may deal with peak oil. The most wealthy (individuals or nations) will not be aware of a peak as long as they can outbid someone with less money. You basically get someone elses supply at their expense.
He finishes the article with a statement of "compete for oil or concede to peak oil and change now". Both scenarios lead to huge changes in way of life.
http://www.powerswitch.org.uk/
which is where I usually go for information on the European activities - though he also covers the rest of the world. It is a site well worth bookmarking
HO
But rising oil prices will also hit countries with a deep trade deficit. Just try to figure what this will mean for the US. During the '70s-'80s oil crisis the US was in definitively more advantageous position than now. Its oil imports were far smaller than now. The OPEC countries redirected their oil dollars mostly back to the US. The US oil companies had a greater share of oil markets and could bring back as profits much of the oil money. The US was not deeply indebted as it is now.
Who will be most able to compete for the oil? China, most likely, with its huge trade surplus. Other Asian countries, too. We might see some surprises and the structure of the world ecnomy might change (it is already changing).
In the article the parent linked, it mentioned a shortage of foreign currency was preventing Eritea from buying oil. I'm wondering if that actually was a shortage, or it it's rather that they're too poor to afford any. Additionally they're at war with a neighbor who used to supply them oil. So that might not necessarily be demand destruction.
But for Indonesia (an oil exporter; this greatly helps to prove the point that oil is perfectly fungible... er, I mean move along citizens, nothing to see here) and the Philippines seem to be seeing worse demand destruction.
But that is almost assuredly going on in the US and Canada already. While the lower classes here are much better off than in Indonesia, one has to travel more for jobs here, and in most cities public transportation doesn't service that much of an area. Without transportation, and as of yet still limited telecommuting possibilities, the poor in these two nations get hit harder than the rich.
But that's the nature of demand destruction; it hits the poor first, (and of course poorer nations have more poor people as well as different relative "poor" standards. But remember that it's the rich who are the policy makers. While they might be affected, and will hear the pleas of the masses, GWB might think that $200 crude oil might not be too bad of a thing. "If they have no bread, let them eat cake."
And this month they reduced their output forcasts by 5.4%.
From the standpoint of 3rd world countries, biodiesel may well make the most sense. Their fuel consumption is miniscule compared to the rest of the world, so they don't need to make that much to begin with. The process doesn't involve a lot of expensive technology from the west, and there are no patent of IP issues that could get in the way. Labor costs in these countries would also be favorable to growing the fuel.
The real question is feedstock. Tropical countries could grow either Jatropha which does well in arid climates, or palm kernel. Cold weather properties might not be ideal, but if these are tropical countries they wouldn't have severe problems in that area to begin with.
It doesn't have to be an either/or thing. The assumption is their requirements are extremely small so that the acrage required isn't that large, and thus that they have enough land to grow both. Clearly this will depend upon the country - some might be able to do this (i.e. have sufficient land), others won't.
I haven't run any numbers, so I don't know if this even works. I guess one would pick some country, figure out how much fuel they have used in the past, and then see if this is feasible. It would be helpful to be somewhat aware of what local conditions are really like too, and that part I really don't have a handle on at all.
How much the west gets isn't relevant to the argument. If 3rd world countries are priced out of the market, then the west already gets it all.
http://www.nhc.noaa.gov/archive/2005/dis/al122005.discus.020.shtml?
ALTHOUGH THE HURRICANE HAS REACHED 125 KT MORE QUICKLY THAN PREVIOUSLY EXPECTED...THE INTENSITY FORECAST UP UNTIL LANDFALL HAS ONLY BEEN NUDGED UPWARD TO 130 KT. IT IS POSSIBLE THAT KATRINA COULD GET STRONGER THAN FORECAST AND PERHAPS EVEN REACH CATEGORY FIVE STATUS SOMETIME DURING THE NEXT 36 HOURS.
Haven't been able to log on since 6 am. It's now 10:30.
http://go.reuters.com/newsArticle.jhtml?type=businessNews&storyID=9490997&src=rss/businessNe ws
OPEC worried about high oil prices-chief
"We are becoming increasingly concerned at the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market," Sheikh Ahmad al-Fahd al-Sabah said in an English language statement in Kuwait City.
"OPEC will be exploring various options for the September meeting which will hopefully contribute to moderate prices," added Sheikh Ahmad, who is also Kuwait's energy minister.
He said existing spare capacity in OPEC countries, together with new capacity additions early next year, will be more than adequate to cover demand growth throughout the winter this year and in 2006.
Much of the new capacity to be added from OPEC and non-OPEC nations is in terms of lighter crudes which is needed by the market, Sheikh Ahmad noted. [PROVE IT: OPEC itself has made its reference basket heavier and more sour. So far in 2005 non OPEC majors are delivering less oil of any quality, not more]
*"Furthermore, demand is starting to slow down as a result of high prices," he said. * [NO: demand GROWTH may be slowing but not demand itself]
Sheikh Ahmad al-Fahd al-Sabah has right. OPEC and non-OPEC countries produce more than ever before in world history. In this sense there cannot be any oil shortage. They do their share. The ever rising demand is the problem. OPEC can meet demand next year if the demand doesn't increase. After that...