This is only a breathing space, will it be used?
Posted by Heading Out on September 2, 2005 - 9:07pm
The time that it will take to restore the overall production from the Gulf (as has been discussed earlier) is going to take many months. Rigs have moved, well casings are deformed. Platforms are adrift or moved. I mention these again since while the numbers reported on the very generous contributions from Europe sound large, at between 1 & 2 mbd replacement need, the 60 mbd of replaced production will only last between one and two months.
Twenty-six countries in an international energy consortium will release more than 60 million barrels of crude oil and gasoline to relieve the energy crunch caused by Hurricane Katrina in the United States.UPDATE: The OGJ story is more specificAs part of that effort, the Bush administration will release 30 million barrels of crude oil from U.S. reserves.
On Sept. 2, the Paris-based International Energy Agency (IEA) and the European Union Commission unanimously approved a measure to release 2 million b/d of oil from strategic storage for 30 days.
"IEA, which coordinates petroleum stockpiles across the Organization for Economic Cooperation and Development, is in consultations with its European members about the US request [for gasoline]. The German and Spanish governments have already expressed support for the request," Raymond James reported. The US Strategic Petroleum Reserve (SPR) contains only crude oil. But Europe has 50 million bbl of emergency gasoline in storage. The US uses 10 million b/d of gasoline, and US gasoline production is down by 1 million b/d from normal levels because Hurricane Katrina made inoperable nine major refineries on the Gulf Coast.That story is also optimistic on the timetable to restore production through the refineries, and from the LOOP.
Tommy Martinez, executive director of the Louisiana Offshore Oil Port, said unloading of tankers at that facility could begin Sept. 2. LOOP shut down operations Aug. 27 ahead of the storm but has since resumed deliveries from storage to ExxonMobil's Baton Rouge refinery. A pipeline controlled by the port connects with the Capline pipeline system in St. James, La.
But the depths of the problems are such, and so many, that it is unrealistic to expect that this will be enough. Consider the time that it is going to take to fix the levees, for example. As the Houston Chronicle noted
The temporary wall near where the canal meets Lake Pontchartrain will keep waters at the breach location stable, allowing Corps engineers to fix the levee. The Corps is not certain how long that will take.
"I don't think it will be super quick," said Susan Jackson, an agency spokeswoman.
After the 17th Street Canal breach is fixed, as well as three other less challenging breaches in New Orleans' levee system, the city's pumps can begin to push water into the lake.
At its highest efficiency, the pumping system can remove one foot of water per day. By Friday, when the city and lake drain naturally to 1 foot above sea level, the lowest areas of New Orleans will remain choked under 11 feet of water. That's a minimum of three weeks' pumping.
But it could take as long as a few months to fully drain New Orleans, Jackson cautioned. That's because the breaches must first be repaired, and the pumps restored.
Engineers will assess the condition of the city's dozens of pumps in the coming days. If they were turned off before they flooded they could be restored in a few days, longer if not.
"I have to believe it's going to take awhile to get them back up and running," said Chuck Morris, an associate professor of civil engineering at the University of Missouri-Rolla who has, in the past, consulted with New Orleans on its pumping system.
The Corps must also fly in auxiliary power units to operate the pumps, which normally run off the city's electrical grid. This grid may not be restored for a month, or perhaps longer.
And the power is also needed to restart the refineries and the oil pumping stations that must be brought up to speed to move the oil that will be needed for this winter. And that does not address some of the other issues with bringing back production from the Gulf. Consider this picture of the current condition of the port from which the boats set out to tend the rigs and platforms. The whole area is flooded, reminiscent of the land after the tsunami, and suggesting that the overall level may have sunk, making it more difficult to re-establish the port infrastructure.
A photo of the port at Venice.
Technorati Tags: peak oil, oil, Katrina, Hurricane Katrina, gas prices
Iran Oil Ministry Evaluates
Crude-Oil Flow After Blasts
By SALLY JONES
DOW JONES NEWSWIRES
September 3, 2005 10:30 a.m.
Iranian oil-ministry officials on Saturday were assessing how much crude-oil flow had been affected after five of the country's oil wells were shut down following blasts early Thursday.
"Things are still being assessed. It is not exactly clear as to how much oil has been affected or for how long," one Iranian oil official said.
Other people familiar with the situation estimate anywhere between 50,000 to 60,000 barrels a day of crude oil has been shut-in following the explosions in the southwestern province of Khuzestan, one of the country's major oil hubs. Iran is second largest producer in the Organization of Petroleum Exporting Countries with crude output of around 4.2 million barrels a day.
Earlier Saturday, an official at the Khuzestan province governor's office told Dow Jones Newswires that the explosions were "terrorist operations" against Iranian oil interests. Gholam-Reza Shariati, deputy governor-general in charge of security affairs, said a number of people have been taken into custody in relation to the explosions.
According to reports, three handmade bombs exploded before dawn Thursday, leading to the shutdown of crude oil from five wells around Ahwaz, the capital of Khuzestan. Reports also suggest the blasts are linked to Arabic ethnic unrest in Khuzestan in June, in which eight people were killed and 36 injured in Ahwaz by explosions that targeted government buildings and officials.
http://online.wsj.com/article/0,,SB112575537576331007,00.html?mod=home%5Fwhats%5Fnews%5Fus
They are just starting to see what a problem NO actually is and that has TV cameras everwhere showing them.
The oil infrastructure that the administration keeps saying will be back up quickly is in worse shape than the city. The city is only flooded. The oil infrastructure is mostly GONE.
This is why we need a national policy to conserve and ration now. Country wide. As long as it takes until we know for sure what the damage is and when the gulf will be back close to capacity of last week if it ever is. The failure we are see in response to rescues is a harbinger of what is to come on energy.
Wait a week, the response will come. But again it will be too little too late and we will have a bigger mess than we should of.
Yeah, a lot of it is. There will be modest short-term (next 6 months) recovery and we'll get ~0.5 mbd back online from GOMEX. Leaving a shortfall of about 0.6 to 0.8 mbd -- this will be a long-term deficit.
"Wait a week, the response will come...." -- What will that be? Of course, I agree with you, The Emperor Has No Clothes.
I don't see where the spare supply is going to come from. Especially refining capacity and distribution.
So the short term is deficit spending of oil. Out of the worlds storage capacity.
This is not a logical response to short supply. It works with money but not real goods. It can only continue until the stored supply is exhausted and then you must cut consumption anyway.
My prediction is the world will take a week to determine that the oil released from storage can't be replaced and will continue to go down. At that point major policy decisions will be aired.
I won't forecast what they will be. To many options for my feeble brain tonight.
I've already noticed people slowing down on freeways. This is happening without any concerted effort, which is a good thing.
http://tonto.eia.doe.gov/oog/special/eia1_katrina.html
How are additional supplies from the EU going to help? I really don't understand what you're saying or why they're supplying us with this oil we can't use right now. The capacity to refine the stuff just isn't there and won't be there.
And "calm the fears"? I think it's too late for that even on this Labor Day Weekend with spot prices > $6.00/gallon (as in Chicago).
In effect, trade is spreading the problem out across the whole globe (and thereby reducing it's effects on us).
Still, it's a short-term "stop-gap" measure, isn't it? I still don't understand why Europe would do this, alleviate our pain this way, even temporarily. (I read your previous post)
Could it be that the Apocalyticons are really close to the truth? We are the only super-crazed consumers on this planet. Maybe, they have quietly been told that if those consumers run out of gas, for even a few days, it's game over.
It's all enlightened (and sometimes just plain direct) self-interest.
interest to prevent a massive US recession that will spill over into Europe
and elsewhere. You may apply your own degree of cynicism as to how much
of each there is.
Since, as well as concrete factors, there are confidence factors in
preventing a recession such as whether the housing price bubble bursts,
the psychcological effect of preventing a sudden rise in gasolene prices
and substituting a gradual rise towards the prices we have long been
paying may help.
We meanwhile will have to get used to even higher prices, when your
prices hit $5 gallon ours will be equivalent to about $10
In my opinion, the best way to accomplish a,b,&c above is get oil prices as high as possible as soon as possible, leaving more in the ground for things we REALLY need. (like creating infrastructure around energy alternatives).Despite the human tragedy unfolding, this weeks events are a shot across the bow of our our energy problem. For the first time in a lot of peoples experience, a small part of their awareness 'gets' that oil is finite. This is an important first step and we are fortunate to receive this flag while we are still before or close to Peak production.
I think things will get worse for a week or two, then gradually things get back to normal on the supply side. On the demand side however, methinks the levee has been broken - I think we will have demand destruction in Q4 that will much more than offset the possible smaller production numbers - the natural gas and heating bills for this winter will definitely preclude buying Johnny a GI Joe with Kung Fu grip for Christmas. Oil will go down precipitously in price due to supply>demand. But that will spark the first economic boom that will occur at/post Peak after which the price will never go down again.
Thus, the timing of this event is very important -it will change peoples habits slightly, cause them to do a little research into Peak Oil, reign in spending, conserve a bit, carpool a bit, make do with less, etc. It will be an important window for environmental and academic organizations to get the facts right on our total energy portfolio, how much we have, of what quality is it, how bad is each piece for the environment, how much energy A does it cost to create energy B, etc.
What Katrina has done, is cried wolf before the REAL big bad wolf is at our door. This is just a pup. I hope we collectively use it as a case study for the real deal
30M bbl from the SPR in my head is about 4% of the reserve. 4% per month...
Once they get things rolling again... whenever that is... you can bet they'll be refilling the SPR and perhaps topping it up to 1M bbl won't be seen as something to do on a rainy day now. Clearly there are some types of emergencies which the SPR is well suited to helping with.
However its become woefully clear that refineries world wide and lack of long term storage of refined products are the lynch pin in our petro dependency.
Hopefully no group will intentionally take advantage of that weakness.
http://www.cnn.com/2005/US/09/03/katrina.airmen/index.html
What's your thoughts??
These levels of imports have been going on for at least a decade now; so, it would seem that the oil majors deem it cheaper to import than build new refineries, a point long raked over the peak oil coals but apparantly forgotten. Of course, if Americans drove vehicles that averaged 15% better mileage, then we wouldn't be importing 10% of our gasoline and our refineries wouldn't need to run fullout very often. So, the refinery bottleneck causes prices to rise; people buy cars that use less gas; demand drops, which removes the refinery bottleneck; so, if you're an oil major, why invest many millions to build a refinery that will never run at full capacity and possibly be unprofitable? Substitute for the 15% better mileage the decline of crude for feedstocks, and another explanation for the lack of refinery construction is provided. If overall supply and demand were actually going to increase on the scale envisioned by the EIA, then we would certainly see the construction of many refineries; instead, we only see a few worldwide. That behavior holds a very important unspoken message: There's not enough oil to increase the supply that justifies the expense of building new refineries.
On the disaster itself, each day I think I've finnaly understood what a human tragedy it is, but so far each day gets worse.
If not, how is the price set? Are the Europeans subsidizing the US with cheap oil?
On a similar subject on IEA supplies, I expect they will be sold to the US at market value and repurchased within Eurpoe. That is just my expectation and someone please advise if this is not how it will work.
http://www.eere.energy.gov/vehiclesandfuels/facts/favorites/fcvt_fotw222.shtml
Here's one contrasting diesel versus gas engine fuel consumption change (about halfway fown the page). Note the discussion of gear ratios though. I know the truck I drive is geared for the best fuel economy possible @ 63 MPH. 55 is at an awkward point in the powerband (overrevving in 9th or lugging in 10th).
http://www.62-65-dieselpage.com/mileage.htm
The "GM Product Service Training Manual for the 6.2L Diesel Engine" (#16015.05-1D) has this to say about GM diesel fuel mileage:
"The diesel, like any engine, is affected by driving habits. Speed is more critical on a diesel than a gas engine. On the highway, in the 50-75 mph range, the fuel economy will go down about 3 mpg for each 10 mph increase in speed. A gasoline engine will lose about 1-1/2 mpg for each 10 mph increase in speed. This condition is perhaps the most significant factor in obtaining good fuel ecomomy. Fuel economy may vary as much as 5 mpg in a given vehicle with different drivers."
And here is one specific to heavy trucks:
http://www.heavydutytrucking.com/2004/10/067a0410.asp
You can take advantage of the speed control in many of today's electronically controlled engines. Fleet analysis shows that reducing road speed to 60 mph from 65 can lower fuel use by about 8%. A rule of thumb established by TMC is 1 mph equals 0.1 mpg. So a 5-mph reduction in average road speed would yield a 0.5 mpg improvement in fuel economy.
The neocons who rule this country apparently believe that what has never happened won't happen such as a levy break in new orleans or the advent of peak oil or airliners rammed into skyscrapers.