Weekend Open Thread...

because it's thread-a-licious...
here's a tidbit about a delay by at least a year of the iranian field Azadegan by the japanese firm Inpec.... others have commented on the delays associated with new supply.....but they intend to continue come nukes or high water...got your high water pants in the ready?

The new issue of Discover has an interview with Amory Lovins, author of Winning the Oil Endgame:


Article is free for now, but will probably be put behind a paywall in a couple of weeks.

What a cool article!  I can't necessarily take it all at face value, but I think he really hits the "crux of the biscuit" with

"You don't generally want lumps of coal or barrels of sticky black goo. You want comfort, illumination, mobility, baked bread, and so on."

It really says what I think is truly possible if we make it a top priority - that we don't necessarily have to make huge sacrifices in our lifestyle, if we just focus on being as efficient as possible in all that we do.  We better get to work, though...

The "We can have our cake and eat it, too"

Ain't gonna happen. Here's why.

The nut cutting points:

The US is 5% of the World's pop., using 25% of the HC's,
and borrowing 75% of the cost.

Next, the World is putting 8 Giga Tonnes of CO2 into the
Atmosphere per annum.  Even BP's Browne admits that 7 of those Gt
must be eliminated from yearly output.. But Browne's target to reach, even if he does,
will not stop runaway CO2.

See "Climate Change" quote below.

"It's like saying to a person, `You've got to become an argon breather tomorrow because we're switching away from this oxygen stuff,'" (Julian)Darley said.

And since Kuwait has slashed their reserves in 1/2( and you can slash 300 Billion bbls off Bp's Ultimate World Output because Iraq, Venezuela, Iran, Dubai, Abu Dhabi and later Saudi Arabia then did the same thing),  we have that much less time to fulfill Lovin's fantasy.

How much time?  The Amazon will cease being a Carbon sink in 15

A further cause for worry is the scientific uncertainty over the "climate sensitivity"of the
model which runs the emissions scenario. The climate sensitivity is a measure of the
temperature rise in a modelling system for a doubling of atmospheric CO2, once the
climnate has reached equilibrium, i.e. In hundreds of years. It takes no account of non-linear
or catastrophic climate changes which could be triggered at certain temperature or
precipitation thresholds, but gives a useful measure to compare models over the narrow
range of CO2 concentrations and temperature rises which we are concerned with in avoiding
dangerous climate change.

In other words-we're in a best guess scenario.

I say the Amazon is stressing now.

The emissions reductions required for energy-intensive developed countries, such as the UK,
will be around 90% on current levels, and will need to be achieved by 2030.
These targets appear challenging, but give an indication of the timescale and scale of
reductions required. Ongoing research on climate sensitivity and positive feedbacks in the
carbon cycle may indicate that a lower ceiling on temperature rise may be necessary to stop
irreversible damage to global ecosystems, implying a lower target concentration of
atmospheric CO2, and on a shorter timescale.
Colin Forrest 6/04/05, revised 14/04/05
The Cutting Edge: Climate science to April 05

So there you have it. We, the World, are caught between running out
of oil, or climate change, in less than 20 years, and we're making zero progress on both fronts.  In fact, if we follow the reasoning of
F. William Engdahl-

If this analysis is accurate, the economic and social consequences will be staggering. This reality is being hidden from general discussion by the oil multinationals and major government agencies, above all by the United States government. Oil companies have a vested interest in hiding the truth in order to keep the price of getting new oil as low as possible. The US government has a strategic interest in keeping the rest of the world from realising how critical the problem has become.

When we, the West, attack Iran,  our hand will be shown to the World.  And, at the same time, we will show, without doubt how we,
the US, intend to resolve both the oil depletion and climate change problem.

Which will mean accelleration of both scenarios.

As Lovelock said

...[C]limate specialists see [the Earth] as seriously ill, and soon to pass into a morbid fever that may last as long as 100,000 years. I have to tell you, as members of the Earth's family and an intimate part of it, that you and especially civilisation are in grave danger.

Our planet has kept itself healthy and fit for life, just like an animal does, for most of the more than three billion years of its existence. It was ill luck that we started polluting at a time when the sun is too hot for comfort. We have given Gaia a fever and soon her condition will worsen to a state like a coma. She has been there before and recovered, but it took more than 100,000 years. We are responsible and will suffer the consequences...

...We are in a fool's climate, accidentally kept cool by smoke, and before this century is over billions of us will die and the few breeding pairs of people that survive will be in the Arctic where the climate remains tolerable. [...]

I agree that little of significance is being done about global warming and peak oil (which most aren't even aware of).  But there are some nonsensical assertions by Lovelock and others that undermine their cause.  The 100,000 year figure is pulled out of thin air, CO2 residence time in the atmosphere is a few centuries not millenia.  Climate models are fully nonlinear.  They cannot resolve the microphysics of clouds since there are not and will not be any time soon computers that can handle the resolution (grid or spectral) that is required (e.g. covering the atmosphere with a 10 micron mesh, or about 4 x 10^34 grid points).  

The fact that cloud processes have to be parameterized in models with 100 km horizontal resolution is a favorite "achilees heel" of the global warming denialists but at least the parameterizations are physically based with a lot of research behind them and do capture the bulk behaviour of clouds.  Current models predict that a doubling of CO2 increases tropospheric humidity by about 50%.  We are not looking at unlivable conditions everywhere but the poles.  This is not to say things will be hunky dory but gigadeath claims based on direct global warming effects are absurd.  If the claims are based on diseases then there is nothing particularly special about global warming as population density and poor sanitary conditions (e.g. SARS, bird flu) are going to happen regardless.


The problem comes when scientists begin to quantify/qualify their

And then find that errors dismissed should have been Chaos
Theory and the Power Laws considered.

I then turn to The Gaussian Curve.  As it has now been
accepted by the Oil Drum Community as valid (Especially since
it affirmed that Kuwait, SA, the UAE, and Iraq were falsely claiming
300 Giga bbls), the same Gaussian Bell Curve shows that
the human population is about to undergo a severe contraction.

Meaning that, at the very least, human pop stabilization will occur
within 5 years.  Think of the implications.

325,000 daily growth in people will be removed every day.

Sometime within the next 5 years.  just from stabilizaton.


Who's this WE? I keep hearing about?  All I can think of is the fifth little piggy who went WE! WE! WE! WE! all the way home.

There's no WE that I can see.  Just a bunch of hominid chimp knockoffs wandering around in WalMarts.  Not good material for Lovins' approach.

"We the leeches" is probably what you mean. I'll not argue with that, but maybe what goes round will come round in the near future.
What happened to the links that used to be on the left hand side of TOD?  
...statoil ...140kbbls of production...poof!
Did not see statoil mentioned at that link?
Hmmm, impending death by a thousand cuts?

We currently have the following known supply reductions:

  • Statoil 140 kbpd (should we include the 118 kbpd condensate?)
  • Nigeria 200 kbpd
  • Russia 200 kbpd
  • GOM 400 kbpd

That's not far short of 1 mbpd, all hands to the pumps folks.
This and China losing control of demand at home explains why we are within a few bucks of a new all-time high on WTI. Even without a catastrophe in Iran we'll be at 90 by summer. With an Iranian bombing adventure in the mix, who knows?

I love how Cheney just comes right out and says, "An oil price spike is better than an Iran with nukes."

I agree. However, I have to admit to being surprised and impressed by how well Mexico is holding up at the verge of rapid decline of Cantarell. They produced 95,000 b/d more in Dec than Nov. How long this holds up, I don't know.


Maybe because there were no hurricanes in Central America in December?
No hurricanes affecting Mexican oil in November and I'm not sure if any effect in October either. Their production is pretty well protected from hurricanes and the effect of earlier hurricanes was mainly due to evacuation of platforms, not damage, in contrast to US production.
Are you sure?  I thought at least one of them resulted in Mexican platforms being evacuated.  Epsilon, or something like that.
You're right about Oct to some degree. Hurricane Stan forced evacuation of 5 platforms and shut loading docks for a short period the first week of October, but is said to have had only small impact on production and no damage to oil facilities. Epsilon was off in the Atlantic much later.
sorry...but ya know....the lord taketh away, but he also giveth,viz
Transneft's press service reports that Russia is projecting that 2006 oil exports will reach 265.5 million tons, a 9.7 percent increase over Russia's 2005 oil exports of 241.9 million tons. Following that, Federal Energy Agency official Sergei Oganesyan told reporters that Russia intends to boost output by 1 percent to 2 percent annually.

...9.7 % increase?.. sergei, you gotta lay off the pakalolo!

Perhaps UPI should do its readers a service and give them some context.  Russia's exports outside the CIS increased by 12% in 2005 compared to 2004.


What's going on in Russia that they need to do this?
Russia to Use Strategic Fuel Reserves to Combat Cold

Russia may open up part of its strategic fuel reserves due to the record cold which has encompassed almost all of the country. This information was disclosed by Russia's Energy and Industry Minister Viktor Khristenko who spoke on Thursday, Jan. 19, at a regular government meeting.

a)probably to make it appear that they are hurting just as much as the nations they are exporting to. Postive PR spin.

b)possibly they ARE hurting just as much as the nations they exporting to. Marginal cubic foot and all...

Imagine that nearly all the USA was in a freeze of -20 F and parts down to -70 F, what would be happening to fuel stocks, electricity grid?
Ya - it would be a disaster. I didnt mean to belittle whats happening, only point out that they do have the highest NG reserves in the world. Perhaps they cannot ramp up production quickly however?

Incidentally, a russian professor friend of mine just got back from Moscow and explained to me that there is a "Stabilization Fund" that per the contract from the IMF /World Bank, the first $25 of every oil sale stays in Russia but everything above goes to a Russian bank account in New York. I wonder exactly who is stabilizing who...

Your professor friend should lay off the vodka.  Russia paid off the last of its IMF debt in early 2005 (in spite of all the bleating about how IMF loans were squandered in Russia).  Russia has a very small debt to the World Bank and is not in a hurry to clear it since the World Bank makes small directed loans for various reform projects.   The stabilization fund starts accumulating when oil is over $25 per barrel.  Currently it is about $42 billion in size and is aimed at paying off the "Paris Club" debt which after the large debt payments in 2005 stands at about $29 billion.
my main point was that the money was in New York, denominated in $$, not that the IMF loan had been repaid. (the implication being that this practice is another flow that supports higher $ forex rates).
Ill tell my friend you said hi though...;)
Yes, we are extremely lucky.  Record warmth this winter here in the northeastern US.  It's been a little bizarre.  There's almost no snow on the ground here in Vermont and it was 52 degrees today.  It's saved our energy butts this winter, that's for sure.
But will we pay for it next summer?  During hurricane season...
Don't forget Oklahoma,Texas,Colorado,New Mexico Arizona.Left Wichita Falls ,Tx on Jan-3-06 80 deg and drove to Central Colorado warm there ,no snow to speak of in Southern Rockies.The sun is burning the snow off the highest peaks in Colorado.Scary up there too!
Russia was able to boost oil exports over the past few years because their own economy hadn't done very well prior, and thus domestic demand was sluggish.

Now that energy prices are roaring and their own economy is going gangbusters (pun not intended..), they want to consume more energy themselves and have the means to pay for it.

You can well imagine what that means for future exports from Russia.

If something happens involving Iran, could there be oil shortages like there were in '73 and '80?

If we need to buy gasoline or diesel to get to work or school and we can't; our choices are:

Natural Gas

Any off the shelf propane or NG kits will sell out real quick.  With supply/demand issues, will there be enough propane to go around?  How will the additional load on natural gas fare?

What about the supply of 50 lb bags of corn to make alcohol?


You can buy or even have hydrogen delivered to your house(gas or liquid).  Or even rent a hydrogen generator!


How many 12v batteries can you fit in your car or truck?  How many will it hold if they weigh ~40lbs each?  Need about six to eight thousand dollars to convert your existing car or truck over to electric... :( (at least you'll be able to drive!)

It's going to be quite a surprise when modern day civilization as we know it grinds to a halt...


try bicycle.

Deffeyes explains.



I've thought about it and considered it.  The school I'm currently attending is 25 miles each way..  I wish I could get more speed out of a road bike..

Supposedly, this bike would do 200mph on rollers... 45mph on the road...


(what speed can one maintain on a normal road bike?  10mph.. 2.5 hours?  Would be good exercise..)



Wouldn't you all rather have an electric motor under your hood instead of that maintenance prone, polluting engine that's under there now?


No oil changes, timing belt, water pump, oil leaks; none of that.

Bonus electric pics:



I commute by bike (in Canada, year-round) and competed in triathlons 10 years ago. I consider myself somewhat fit, but there's still plenty of "meat" on my bones.

Cycling seems to be a good short-term solution for many people. My first day of training for a triathlon, I was able to maintain 25 kph (15mph) for 40km (25 miles). Eventually, I was able to do 40km in an hour, but that was an all-out once-a-week effort on a bike that wouldn't stand up to commuting for very long. For daily commuting, 25kph is a realistic average after a couple of weeks for most.

At 25 miles, that's a 100 minute commute. I'm a dedicated bike commuter, but 40 minutes is where I draw the line.

One just needs the "right" bicycle to make the commute manageable.



The right bike being described as one with a motor for when you are not in the mood for exercise, and with a spare car included in case it rains and you are not in the mood to get wet, or in case it snows and you are not in the mood to die.
I love the lines of the Versatile velo, but I wonder how long I would last amongst all the SUV drivers talking on their cell phones.

BTW, Ben Stein played apologist for gasoline prices on CBS Sunday Morning.

And, tonight on 60 Minutes:

THE OIL SANDS - Bob Simon reports on the oil boom in Alberta, Canada, where the oil sands produce a million barrels a day and hold reserves eight times those of Saudi Arabia. Draggan Mihailovich is the producer.

Ooh - look at that nice flat terrain!  He's really movin' along.  I'll bet it would be a blast down the hills aroud here.  Which is just my way of saying that different places will require different solutions.  

I would love to have one of those though!

I don't know what is going to happen.

But we did sell our 10-12 mpg gas guzzler, white ford.


I bought green rabbit in response to 1980 oil price spike to commute to sandia labs.


Reading all of your well thought-out responses sure is fun for a senior citizen ... 45 days younger than saddam!

Best and enjoy my senior citizen project of trying to get better gas mileage out of grey rabbit on my essential travel projects.


The math stuff is fun too.


If something happens involving Iran, could there be oil shortages like there were in '73 and '80?



I've checked on many of the different kinds of Ethanol stills and Ethanol still plans online.  The one problem is that they are pretty expensive and hard to make for the average person.

However, after doing some considerable research and trying many of them out.  I found the simplest, most effective and cheap still to build can be found at: http://www.myownfuel.com.

They provide step-by-step instructions and take much of the guess work out of it.  If you want to run on strait Ethanol, you can learn how to convert your car here:

I hope this helps everyone.  I wish that I would have known this because it would have saved me a lot of time and money.  

People with a Digg.com account should probably digg this:


Following up on the Kuwait story, does anybody know any details about the Kuwaiti Fund For Future Generations?  Apparently it was set up in 1976 to provide money for Kuwaitis after their oil ran out.  Just wondering if the government made any projections at that time about when the oil would actually run out.
Pipeline Blast Cuts Russian Gas Supplies to Georgia, Armenia Ahead of Big Freeze


The Georgian leader is accusing Russia of blackmail.  Given that a Russian company distributes gas in Georgia (not just to Georgia) and that the $110 per 1000 cubic meters has been agreed to without a big standoff it is not plausible that this is Russia sabotaging its own gas lines.  The pipeline is not far from Chechnya and Georgia wants to sever any dependence on Russia.  So the motive lies elsewhere probably with the Georgian leader himself.
Stuart, if you are on this thread, could you comment about the econbrowser and energybulletin debate about the Iranian oil bourse?  I noticed you were in that discussion briefly.
Here is a link to an article in The Daily Telegraph by the historian Niall Ferguson thinking about a futuristic nuclear war started by Iran and ending the age of oil.

http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2006/01/15/do1502.xml&sSheet=/opinion /2006/01/15/ixopinion.html

Here is the NYT's article about that article:

Next up is today's NYT's Week in Review and David Sanger on military options for Iran:

I suppose the right wing is entitled to their fantasies too - Ariel Sharon as the visionary who could have saved the world?  Uh, ok.  

How about that there is no evidence that Iran has violated the NPT?  It appears that they are (or were until recently) operating within the treaty, while from what I have read the US is in violation of its obligations.

When the facts are at odds with the saber rattling and propaganda, it's time to look a bit further for the real issues.  But at this point, it's impossible to be sure of what the Iranians would have done without the specter of a military attack against them.  

I wonder if that was the purpose of the leaked stories of the impending Israeli March bombing. Or was that real?

In his little fantasy about the 'Great Gulf War of 2007' historian Niall Ferguson attempts to make the comparison between Europe not dealing with Hitler early on while they had a chance of stopping him and 'The West' (read: US and Israel) not stopping Iran from getting The Bomb while it still had the chance.

I think this comparison is flawed and deliberately misleading. First off, Iran is not threatening to invade another country but has been on the receiving end of increasingly strident threats. Unless this guy Ahmadinejad is a complete psycho, he surely must realize that a nuclear attack on Israel would bring a totally devastating nuclear retaliation from Israel and/or the US. (Assuming that Iran would have The Bomb by 2007, which experts seriously doubt).

 The only threat that a nuclear-armed Iran would pose to the US is that it would innoculate Iran from any future possibiity of a US-led invasion and 'regime change'.  What really frosts the US is that should Iran get The Bomb, the US can forever kiss goodbye any dreams of installing another Shah-type regime that will play ball over oil.

What is not discussed at all in the MSM is that US has not and probably never will put any muscle on Israel to prevent it from launching an attack  on Iran on its own initiative. To attack Iran Israel would have to fly over either Iraq or Turkey. As it is doubtful that Turkey would allow such a move, it seems to be quietly understood that the US would give Israel tacit approval to use US-controlled Iraqi air space.  The US could easily prevent such an attack by stating clearly to Israel that should such an attack be launched, the US would shoot down all Israeli aircraft flying over Iraq.  The question to be bluntly put to the Bush regime is: Will the US allow Israel to attack Iran? I think we all know the answer, but the question needs to be addressed.

Up until very recently I thought  this all was an elaborate game of chicken, but I no longer think that to be the case.  

I wonder if Niall Fergusson is related to Niall of the Nine Hostages

The parallel point being that we are descended from the best of the best at acquiring resources and offspring. Perhaps at the last minute, China and US will just say ' naw-here you guys take the rest of the oil, we don't need it -enjoy!'

So OPEC claims it has increased production by 4.5 million bpd since 2003.  So we have 2.25 million bpd per year, which is close or even more than the yearly world demand increase. So the tightness in the market must be due to weakly declining production outside of OPEC.  So even with these rosy numbers, OPEC will be filling in the declining production from the rest of the world in a few years as the whole world peaks and begins to decline.
This came not from new production capacity, but by producing their prior spare capacity. It appears they did not add any (or hardly any) new capacity during that time, despite increased drilling. Their decline in reported spare capacity roughly matches their increase in production.
I'd also note that neither MEES, EIA, nor other sources would suggest OPEC has increased 4.5 mbd since 2003.  Around 3 mbd is more like it.


I was being a bit sarcastic.  Even with the fictional OPEC production increase the world is still close to peak.  The fact that OPEC hasn't delivered significant new capacity in the last few years points to OPEC getting ready to go over the hill.  It is shocking that there is so much talk in the mainstream about $35 dollar oil and not having to worry about oil until 2030.  
NPR story on Kuwaits sketchy succession situation:


Have you all seen this?

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2006/January/business_January286. xml&section=business&col=

"Iran cuts gas supply to Turkey"

Any other reports confirming it?

It seems like the resource wars are shaping up a little bit earlier than expected.

"Vandal gangs" cause 3 pipeline "explosions" or overpressures cause 3 pipeline ruptures in system not maintained for years.  I vote for #2.
The Oil Drum was cited in today's New York Post, in Terry Keenan's article on how Iran has affected oil prices.  

See http://www.nypost.com/business/61952.htm.  (Registration required)

On a drive and bored, I inadvertently hit on an AM talk show--Money Matters (the name as i remember) which covered high energy prices and--amazing--talked about Peak Oil.   Nigeria was discussed (no particular sympathy for the dreadful destruction of the delta area or the attendant human misery). It was noted that Nigerian oil is prized as sweet light.  Apparently, not so easily replaced.  I'd like to see more on TOD about heavy vs. light and who has what.  Will refineries everywhere have to be re-tooled as oil quality decreases?  Higher costs?  Lowered supply?  

Also, a recent LA Times article discussed a dustup with Mexico over trying to get them to lower cement prices and they want us to drop tariffs.  Cement becoming a scarce commodity?  Cement production is very energy intensive, I know.  But how much?  

Most refineries are designed to process a rather narrow range of crude oils. Many were designed for a specific crude and are now forced to operate using blends of high and low grade crudes, because their originally planned crude feedstock flow is no longer available. Larger refineries may have a few of several different process techniques available to them that they can use for handling a wider range of specific crudes or blends. Have a look at some of the links below I lifted from a chemical engineering class notes website. www.jechura.com/ChEN409/#Homework http://howstufworks.com/oil-refinery.htm OSHA's page on refining http://www.osha-slc.gov/dts/osta/otm/otm_iv/otm_iv_2.html#3 Chemical Engineering Class Power Point Slides http://www.jechura.com/ChEN409/03 Crude Units.pdf http://www.jechura.com/ChEN409/04 Bottom of Barrel.pdf http://www.jechura.com/ChEN409/05 Delayed Coking.pdf http://www.jechura.com/ChEN409/06 SDA.pdf http://www.jechura.com/ChEN409/07 Catalytic Cracking.pdf http://www.jechura.com/ChEN409/08 Hydroprocessing.pdf http://www.jechura.com/ChEN409/09 Reforming.pdf http://www.jechura.com/ChEN409/10 Isomerization.pdf http://www.jechura.com/ChEN409/11 Alkylation.pdf
RE: Bikes

I've tried an approach that many folks don't seem to see as necessary, but that I see as essential.

My approach is to design my life intentionally around the notion of reducing petroleum use as much as I can.  This is part of reducing my environmental footprint.

Doing this, I assume that I will need to live close to work.  Ideally, I will live at a walkable or bike-able distance from work.

I do all kinds of work from my Organicengines SUVs (Sensible Utility Vehicles) and can carry people or cargo up to 6, 7, or 800 pounds at need.

Usually I only need to carry 100 to 200 pounds of tools, but ride up hill and down through all weathers here in Minneapolis, MN, USA.

So I think that if we design our lives intentionally to use very little petroleum, we can do it.

Those who have invested heavily in housing and real estate designed around cheap abundant energy stand to lose an awful lot in terms of money or equity over the next few years, in my estimation.

But look at velomobiles.  Check out cargo trikes, work bikes, and quads.  There are many people who make and use these as tools for sustainable transportation and as "tools for conviviality" to quote a phrase.

We are bathing in petroleum.  We will not be bathing in petroleum so much in the next few years.

Yes.  We will smell different.

It is foolish to look at the way upper-middle class Americans now live as any kind of sustainable norm.  The petroleum-bathed lifestyle is passing away.

I think our imaginations are bound and need to be liberated.  Must extreme necessity and suffering be the only "mother of invention?"  It looks increasingly like that is the case.

Do check out the various HPVs online.  We can do more than we imagine with human power. Not everything, but many things.

Anybody else see the "60 Minutes" report on oil sands? No new information, but the overall tone of it was that the sands are going to fulfill all our (and China's) energy needs for the next century.
60 Minutes has not aired yet on the West Coast.
Did they at least admit that Peak Oil might be a problem?
Didn't here peak oil mentioned. Boone Pickens did say that we will never see $1.50 gasoline again.
A pathetic piece of reporting, IMO.  If I watched 60 Minutes with no knowledge of TOD, EnergyBulletin, and especially Bubba's site, I'd think we were all set with oil for the next hundred years.  They talked on and on about how much oil was available.  Not once did they mention that it is bitumen, not oil.  Not once did they mention how much natural gas energy is necessary to convert that bitumen to synthetic crude.  The only objections they presented were environmental concerns, and some vaguely expressed concern about America's and China's addictions to oil.

When Pickens said we would never see $1.50 gasoline again, they simply cut away.  Wouldn't a real reporter ask him how high gasoline is likely to go?

Donal, you nailed it. That's a great characterization of the piece. This kind of stuff just feeds the sense of complacency.
I'm not into conspiracies, but doesn't it make you wonder what is going on? The reporters don't ask if the oil sands excavation will be the size of California or where the water will come from or can you refine the stuff...

I mean what's the point? How is this different than Pravda twenty years ago?  

"News" shows exist to deliver demographic target audiences to advertisers, and to provide a kind of disinfotainment which will make people in the target audience feel like shopping for the products advertised.

To expect 60 Minutes to do real reporting on any topic remotely related to energy, transportation, or environmental issues is simply too much.

60 Minutes did their job. They delivered some disinfotainment to the target audience, and set that audience up to keep buying cars (especially) and also to keep buying gas, now safe in the pseudo-knowledge that it comes from Canadian top-soil, just up the road a bit from Montana.

Of course, Montana will be making gas from coal, too, so we really have it made in the shade, drinking lemonade.

No problem.  No change.  It's all good.  Keep consuming.

Did the Middle East start to turn away from investing in the US before or after the invasion of Iraq?

I'm too tired to go hunting for evidence right now.  Please help me with it if you can, thanks.

Personal opinion: Before.
Found some more stuff
A BUZZFLASH INTERVIEW with Robert Baer, Former CIA Case Officer and Author of "Sleeping with the Devil: How Washington Sold Our Soul for Saudi Crude."


BUZZFLASH: You also mentioned how intertwined business relationships are with Saudi Arabia. Another point you bring out is that the Saudi Arabians keep possibly as much as a trillion dollars on deposit in U.S. banks. So how does that factor in?

BAER: Well, Kissinger set this up in the first oil embargo. He said, listen, fine, you can raise the price of oil. You're going to get more money for your oil. But let's be reasonable about this. Take this money and all this profit you're making, and invest it in the United States, which is a perfectly good policy, by the way. Buy our arms. Keep your money here. It'll keep our economy floating. We won't go into a recession or a depression because of high oil prices. And we're all going to win by this. And that worked fine.

But then that goes back to the dependency. We depend so much on Saudi investments in the stock market, in Citibank and other funds. This is not just Saudi money; it's other Arab money too. If we go into a confrontation with the Middle East, especially with oil prices so high right now, and that money is not recirculated back in the United States, it's going to do some real damage. Or if one day, they just completely pull their money out. I mean, that's the perfect storm: an oil embargo, the Saudis and others' pulling their money out, and having the price of oil go up to $70 - $80 a barrel. We would be hurt, badly hurt.

This went up a little earlier this evening on the Wall Street Journal's site. Since it's behind a fee wall, I've copied it for those interested.
China Will Strike
 An Energy Deal
 With the Saudis

January 23, 2006; Page A3

BEIJING -- China and Saudi Arabia are expected to sign a wide-ranging agreement today on energy cooperation amid Beijing's quest to secure more energy resources vital to fuel its fast-growing economy.

China, the world's second-biggest consumer of oil, has been seeking to tighten economic and political partnerships with its major oil suppliers across Central Asia, Africa and Latin America. Its quest has taken on added urgency since 2004, when the country's oil demand surged about 15%, helping underpin the biggest rise in international oil prices in a generation.

Although the pace of increase in China's oil demand slowed last year, the average price it paid per 11,000 tons of imported oil surged 38% from 2004 as global oil prices hit record highs. China needs vast supplies of energy to fuel its economy, which grew about 10% last year. A key supplier to the country's fuel needs is Saudi Arabia, which accounts for roughly 17% of China's oil imports.

The Sino-Saudi memorandum of understanding is set to be signed during Saudi King Abdullah's three-day visit to Beijing, a Saudi official said yesterday. It will call for increased cooperation and investment between the two countries in oil, natural gas and minerals, but it won't specify any projects or dollar amounts, another Saudi official said. Other details of the agreement weren't immediately available.

King Abdullah arrived in China yesterday in the first visit here by a Saudi ruler since the two countries re-established diplomatic ties in 1990. He is scheduled to meet today with Chinese President Hu Jintao and tomorrow with No. 2 Communist Party leader Wu Bangguo and Premier Wen Jiabao. Chinese Foreign Ministry spokesman Kong Quan said last week that the Chinese and Saudi leaders are expected to discuss energy cooperation, fighting terrorism and telecommunications, among other issues.

King Abdullah's China visit is part of a four-nation Asian tour that will also include stops in India, Malaysia and Pakistan. Members of his delegation include Saudi Oil Minister Ali Naimi.

China's oil imports from Saudi Arabia have roughly doubled in recent years, from 12.5 million tons in 2002 to 22 million tons for the first 11 months of 2005.

Chinese and Saudi oil companies have already signed several deals. China Petroleum & Chemical Corp., or Sinopec, China's second-biggest oil producer by volume and its largest refiner, is drilling for natural gas in Saudi Arabia. The company also has signed a deal with Saudi Arabia's state oil company, Saudi Aramco, to build a huge refinery in the southern Chinese province of Fujian with Exxon Mobil Corp. as a partner. Aramco also has begun engineering work with Sinopec for a second refinery in China's northeastern port city of Qingdao.

The Saudi king's visit comes on the heels of a major diplomatic push by China in West Africa, including Nigeria, where Cnooc Ltd., China's largest offshore oil producer by volume, recently concluded a deal to acquire a large stake in an offshore oil field. Last week, Chinese Foreign Minister Li Zhaoxing traveled to Cape Verde, Senegal, Mali, Liberia and Nigeria.

China also has drawn closer recently to other large energy producers, such as Venezuela, where ties with the U.S. have frayed.

The agreement comes as renewed political instability in key oil-producing countries in the Middle East and Africa has pushed oil prices back up toward the record highs hit in the summer of 2005. On Friday, oil prices hit a four-month high of $68.35 a barrel, as traders worried that militants in Nigeria were targeting oil facilities.

Meanwhile, a political standoff between Iran and the West has oil traders nervous. The U.S. and several European nations have been calling for Iran to be referred to the United Nations Security Council over its moves to restart a uranium-enrichment program, a process that is used in producing nuclear weapons. Iran is the second-largest oil producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia. Some analysts worry that it could respond to possible U.N.-imposed sanctions against it with an oil embargo.

OPEC is scheduled to meet Jan. 31 to decide on its oil-production policy for the spring. A person familiar with Saudi Arabia's oil policy said Saudi Arabia and other OPEC countries don't support Iran's call for the producer bloc to lower the group's daily oil-production quota by one million barrels. Iran says the cuts are needed to prevent overproduction from glutting the market and bringing oil prices sharply down.

This appears to be the key paragraph:

"The Sino-Saudi memorandum of understanding is set to be signed during Saudi King Abdullah's three-day visit to Beijing, a Saudi official said yesterday. It will call for increased cooperation and investment between the two countries in oil, natural gas and minerals, but it won't specify any projects or dollar amounts, another Saudi official said. Other details of the agreement weren't immediately available."

The US doesn't have a monopoly in PR.

The New York Times exposing the entrenched cozy corruption between the government and natural gas producers.

"At a time when energy prices and industry profits are soaring, the federal government collected little more money last year than it did five years ago from the companies that extracted more than $60 billion in oil and gas from publicly owned lands and coastal waters.

If royalty payments in fiscal 2005 for natural gas had risen in step with market prices, the government would have received about $700 million more than it actually did, a three-month investigation by The New York Times has found."

http://www.nytimes.com/2006/01/23/politics/23leases.html?hp&ex=1138078800&en=01638062a5dc8e2 b&ei=5094&partner=homepage

I saw that too. It's not half as bad as the forest service deal -- that's where the forest service actually pays lumber companies for the privilage of letting them clear cut.

Welcome to Amerika.

Re:  Saudi Arabia; Russia; Norway & Iran
(Also posted under the Kuwait discussion)

I've been looking at the Russian and FSU P/Q versus Q plots that Khebab did (under the Kuwait post on TOD), and at first they were a little confusing, but then it finally dawned on me.  

If you look at the Russian plot, oil production stopped growing at about 47% of Qt (I'm rounding off Qt at 160 Gb), around 1989.   Production was basically flat for about 10 years until 1999, out to about 59% of Qt.  Production then fell dramaticlly.  Everyone assumed that it was because of the breakup of the Soviet Union, and then production rebounded strongly.  However, the recent production is still significantly below the 1980's decade long peak.  It looks like production peaked as a broad plateau centered roughly on the 53% of Qt mark.  In my opinion, and several others have made this same point, the rebound in Russian production was just making up for the falloff in production during the political problems.  

The key point is that Russia is probably poised for a significant drop in production.  In fact, if you believe the plot, Russia has less remaining recoverable reserves than does the U.S.  

Following are the Hubbert/Deffeyes reserve estimates for the top four exporters, and the estimated life of reserve estimates, at current rates of production:

Saudi Arabia:  80 Gb & 21 years
Russia:  20 Gb & 6 (SIX?????) years
Norway:  9 Gb & 8 years
Iran:  60 Gb & 40 years

Total for all four:   169 Gb & 16 years.  These four countries account for the majority of net world oil exports.  

This is based on the top exporters in 2004:


IMO, the world economy is in deep doo-doo.

If I have made a mistake somewhere, could someone let me know?  If this is basically correct we are heading for one hell of a collapse in net exports.

Too many numbers to keep track of.

Russian production was basically flat from about 1979 to 1989.

Khebab and I both have additional messages posted under the Kuwait discussion below.
If any more than 2 of these exporters of oil ever decide to switch over to Euro's, the USA is in deep kempchi! Iran and Venezuela are the first to come to mind, i don't think Saudi, Russia or Norway would drop the dollar for Euro's. But ya never know!
I had a read through the Department of Trade and Industry's new Energy Review Consultation paper this afternoon.  This will form the basis for the discussion about the UK's future energy policy - mostly, how much nuclear how soon.  It's an odd mix of thoroughness [there is discussion about the merits of distributed microgeneration, the problems with scaling up biofuels, the irreversible decline of North Sea production etc] and sheer wishful thinking.  It uses the IEA's model of future oil production (more than 110mbpd by 2030, you know.... don't know what everyone's so worked up about on here, lol).  What really made me laugh, though, were their scenarios for future fuel prices - with the 'high sensitivity' case, by far the most pessimistic, showing oil prices flatlining at $50/bbl right out to 2020.  It's really quite shocking to me that major public policy is actually being based on this 'pick a number, any number' approach, and I emailed Malcolm Wicks to tell him so.  Not too hopeful that I'll change his mind, though......
This is the current 'open thread' so I'll use it (tho' I guess everyone's attention has now moved on to another excellent analysis from SS...) - I thought people would be interested in this:

courtesy of rogerlsimon.com, the conventional wisdom on middle eastern oil may not be all that it's cracked up to be. Roger J. Stern, of John Hopkins U, has written a peer-reviewed journal published on-line by the National Academy of Science that casts doubt on the notion of the "oil weapon" in a six page paper entitled "Oil market Power and US National Security".

Hyperlink to the PDF here

From a quick look it seemed daft, but I'm not a mathematician - perhaps one of the resident mathematicians could explain precisely WHY it's daft :-)

Sorry, forgot to add that they rely on Matt Lynch a lot.
The article seems very wrong headed to me. It is predicated on oil being plentiful and that mid east OPEC countries are deliberately not developing oil resources in order to keep the price high. He seems to be saying that the oil importing nations are doing the wrong thing by paying high prices for oil, the excess revenues are being used to fund military build up in regimes that are potentially opposed to the US. He dismisses any threat from mid east OPEC countries to reduce oil supply because they couldn't afford to. His only suggested solution is "forceful market action" but he's unable to suggest any practical methods for this.
For sometime I've wondered why we don't either build cars that heat gasolene to the point where it turns from a liquid form to a gaseous form or propane. Thus it would burn much cleaner and efficiently. I had ask a propane company employee and he acted as though he didn't understand the question. Though it's as plain as the nose on ones face if you heat gasolene it will expand untill it becomes propane which injected into the cumbustion chamber would burn much more efficiently resulting in a cleaner environment and much greater mileage.