And we thought Colorado had problems

The China Daily is carrying a story that the gas-fired power plants in East China are unable to get enough natural gas to operate.
The shortage of natural gas has put the bulk of China's gas-fired power plants on the verge of closure, and industry leaders are calling for the government to trim its gas power development plans.
Due to the lack of gas supplies in East China, gas-fired power generation units with a total capacity of as much as 4 gigawatts (GW) must remain unused in the region where the country's biggest gas pipeline ends, Wang Yonggan, secretary general of China Electricity Council (CEC), said.
The same is true with the energy-guzzling southern areas of China, primarily driven the fast-growing regional economy of Guangdong Province.
"In the south, the construction completion of a gas power plant also means it's shutdown - because there is no gas to run it," Wang said over the weekend at a power conference hosted by CEC, the industry association of China's electricity generators.
Although the country uses gets about 2% of it's electric power from gas  plans are to triple this use by 2010 and double that again by 2020.

(UPDATE:Although off topic GeoPoet's comment, attached below, is worth reading).

Gas is, of course, as was discussed in comments yesterday, also used directly for heating and the article gives some numbers

Gas demand from the huge Chinese market is expected to reach 120 billion cubic metres (bcm) by 2010 and 200 bcm by 2020, but its estimated domestic production would be only 80 bcm and 120 bcm respectively.
Unfortunately the Chinese hope resides with LNG, in much the same way as ours is heading towards. Though the article concludes that problems still exist with that supply.
China National Offshore Oil Corp (CNOOC), is confronted with disagreements over prices to secure gas supplies from Indonesia's BP-led Tangguh project, for CNOOC's Fujian LNG terminal.
Gas deliveries to Beijing are also of concern
It meant that more than half the gas reserves had been used with more than two-thirds of the heating season to go. Heating in Beijing will be switched off on March 15.

Beijing has used about 22 million cubic meters of natural gas every day this winter, said Li Jianzhong, a researcher with the Petroleum Exploration and Development Research Institute of PetroChina.

More than 95 percent of the city's natural gas is provided by a single pipeline from northwest China's Shaanxi Province, which can pump only 10.3 million cubic meters a day year-round. In spring and summer, when demand plummets, the surplus is stored in Tianjin for winter use.

Italy has had to cope with the pressure of running the Olympics with reduced gas flows from Russia (courtesy of Ukraine), although, just this week, they have apparently returned to normal.  In the same way, Beijing has the major political party meetings in March, and to make sure that there is enough gas
In response to the crisis, the city has drawn up an emergency plan, halting or reducing supplies of natural gas for industrial use and replacing more than 1,300 natural-gas-powered buses with oil-fueled ones.
 Part of the problem is that the city has been trying to reduce the use of coal through a switch to gas-fired boilers, and as the mayor reported
"A vice mayor and I made a 'ridiculous' decision on the night of January 10 to check the gas meters of every boiler in the city's eight urban districts. After eight days, we found that real gas consumption as shown by the meters was nowhere near that reported by the district governments. Yet the real figure is critical for decision-making."
Perhaps China needs to build some more tankers, although, as the rest of the world also starts to rely on this option, this may be another case of demand exceeding available supply for the next decade.
UPDATE Platts is carrying a story that Japan is running into a similar problem with Indonesia on LNG supplies.
Earlier this month Indonesian President Susilo Bambang Yudhoyono issued a presidential regulation enshrining a policy favoring domestic gas consumption over export sales. "The regulation is aimed at ensuring that domestic gas consumption will be prioritized over exports," energy and mines minister Purnomo said on February 8. Currently, 44% of Indonesia's gas production is consumed domestically with the remaining 56% exported. The regulation followed comments in December by former coordinating minister for economy Aburizal Bakrie that Indonesia would not extend its existing LNG supply contracts with buyers because it has decided that indigenous gas production, especially from Bontang in East Kalimantan, should be dedicated to domestic users. Indonesian energy officials also said then it had temporarily halted negotiations with Japanese LNG buyers to extend supply contracts due to expire in 2010 with the 22.25-mil mt/year Bontang LNG facility.
UPDATE (2) I also just came across this on the LNG potential.
Didn't they just sign a big deal with Iran?  Would it be feasible to build a pipeline?
The Chinese are planning to increase the size of the main pipline through China to also carry gas from Russia and Kazakhstan, but apparently negotiations on the actual supply are still going on.
They're working on the design as we speak.
OT but pertinent...

In another comment, I mentioned something that bears repeating.

My company is currently suspending drilling operations in Oklahoma due to lack of available water. State, municipal and private water owners have all told us that they will no longer sell water to us.  We are experiencing similar problems in Colorado, Wyoming and New Mexico, but not to the degree we have encountered in Oklahoma.

So what we have here in Oklahoma is one resources scarcity(water) precluding the extraction of another (petroleum) declining resource.

Yea - Hubbert was right, but his science is about so much more than oil...!!

That is what Tainter meant by the cost of complexity.  As resources decline, the solution  often cause more problems, until it's just not worth it any more.

Ethanol also has water issues:

BISMARCK, N.D. - Ethanol plants need more than corn: If all the proposed factories in North Dakota were built, they would use more than 1 billion gallons of water.

Drought in future years could curtail North Dakota's burgeoning ethanol industry or at least limit potential plant sites, particularly in the Red River Valley, officials say.

Ethanol plants are big water users. The Sioux Falls, S.D.-based American Coalition for Ethanol says it takes at least 3 gallons of water to produce 1 gallon of ethanol fuel.

Water might turn out to be a bigger problem than oil.  

Of course, if we had enough energy, we could build desalination plants...

Shameless PR: Build your ethanol plant in Sweden, we have almost unlimited fresh water, good logistics and plenty of electricity.

But shipping cost money and energy. :-/

But shipping cost money and energy.

Exactly.  The idea behind building ethanol plants in North Dakota is to put them where the corn is.

Will there be much corn in the future if the region do not have enough water for ethanol plants?
Ethanol needs a lot more water than corn.  
That depends on where you grow the corn: In the irrigated Sacramento Valley and San Joaquin Valley of California much corn is grown with humongous quantities of highly subsidized water, obscene quantities of fertilizer, and enough pesticides to kill off a medium-size ethnic group. The yields are fantabulous.

By way of contrast, in God's Own Country, i.e. Minnesota, Wisconsin, Iowa, Illinois, parts of Nebraska and some other places we get plenty of rainfall to grow corn without irrigation, though the quantities of artificial fertilizer and pesticides are huge, and the erosion of soil is not a negligible issue.

Like Sweden, Minnesota has abundant water. Indeed, a Swede will feel right at home in Minnesota, except that most of the Swedes I know speak better English than many of us do. Shucks, we even have Finnlander jokes and Norweigian jokes, just like in 'da Old Country. Yah, you bet.

As far as the Great Plains go: I say, give it back to the bison and the Native Americans--and quit draining the Oglalla Aquifer.

"obscene quantities of fertilizer, and enough pesticides to kill off a medium-size ethnic group."
That is the deal killer for ethanol made from corn or just about any crop used to make ethanol. It won't free us from fossil fuel usage, it just hides said usage behind a politically good facade.
I guess with the public, out of sight is out of mind.
That depends on where you grow the corn: In the irrigated Sacramento Valley and San Joaquin Valley of California much corn is grown with humongous quantities of highly subsidized water, obscene quantities of fertilizer, and enough pesticides to kill off a medium-size ethnic group. The yields are fantabulous.
Almost. Much of the corn grown in the central valleys of CA are fertilized courtesy of factory farming operations. Megadairies, hog farms and chicken mills need a certain amount of acreage to spread the dried animal waste on for disposal purposes. Corn is the most common crop to use for that purpose. The problem is these factory farms are still dependent on imported feed from the midwest, which of course uses fuel for transportation. It's quite remarkable to note that both Valley farming and business interests are celebrating the arrival of ethanol plants to the 99 corridor for their economic value. When I was a planner there I thought this was a bone-headed idea because the feedstock was imported (albeit at times augmented from local sources at times) from the midwest consuming fossil fuels, limited water supplies (from a depleting aquifer), electricity and natural gas. The natural gas situation needs additional comment because the valley's supply (south of fresno) has pipeline capacity limitations more constricted than the overall tight national situation. Rapid residential growth has further exasperated the situation. The wet mash was touted as a "perfect fit" for the S. Valley's factory farm operations, without any consideration to the water considerations of those facilities. Corn + Dairies + Ethanol production = considerable water and energy expenditures. This concept is not understood by government regulators and ignored by the private sector interests. More on factory farming and resource consumption:
The mash, fermentation, separation cycle should allow a fair amount of water recycling.  (FWIW, the old chemist/brewer in me speaks)
And, of course, this doesn't count the NG needed for fertilizer. Of course, in the Dakotas, thanks to our real Fearless Leader, farmers in the Dakotas can get coalbed methane from his home state of Wyoming. Just don't expect any water to be left to flow down the Powder River into the Missouri, and from there into the Dakotas, that's all.
Hey Magnus, we're on to you.  The price of drinks in Sweden is so high, we know you're never going to send it back to us.
Isn't a lot of bauxite shipped to Sweden and Norway to refine into aluminum because of the low cost of hydro electricity?  I remember 5th grade geography when we learned that steel was made near the coal mines and not near the iron mines because coal is heavier than iron ore (generally speaking). Lots of this type of resource transportation going on. NG is tough to ship though.
I think we are seeing fertilizer production already moving toward where the NG is.
Yes, aluminium production is virtually uneconomic without low cost hydro-electric, the electricity input is massive, one might worry that the aluminium producers may sell their electricity and stop producing aluminium until the price gets silly.

Yes, NG fertilizer production in US has become uneconomic, odds are that all US fertiliser plants using NG will shut down.

Cheap transportation has perhaps temporarily distorted normal economics, that has swung back a bit and will swing further.

There will be further 'adjustments' along these lines.

The water that is boiled off during distillation can be recaptured - it just hasn't been the typical practice, because until this last decade, we had few major water issues. The last time we were into alcohol in a big way was the 1970's, and back then there wasn't a water crisis in sight.

It's not really a complicated problem - just one that the ethanol plants need to address. They could make some of their money back selling recaptured process water for irrigation, or else just return it to their own process.

Desalination plants!  

Now there's a topic I haven't heard much about in a long, long time, except maybe with regard to the Middle East.  

The Saudis and their neighbors have the biggest ones in the world. Even with high-efficiency, multi-effect evaporators, vapor recompression, etc, they are highly energy intensive. To some extent, the Saudis are in effect drinking a certain portion of their oil and gas. I wonder how well the increased population of Saudi Arabia and some other countries in the area could be sustained without desalination.

Back in the Sixties the Johnson administration had gradiose ideas of making the Southwest deserts bloom through the use of huge dedicated nuclear-powered desalination plants. It doesn't look like the concept got very far, and given our current energy situation, I think we can kiss that one goodbye, at least in the near term.  

Indeed, water resources is going to be a worsening problem in parts of the US, and we're not going to easily solve it through expending energy from our  shrinking supplies.

There have been some wild schemes for building pipelines from the Great Lakes, but I suspect you can only do so much of that sort of thing before you seriously start impacting the hydrology in the Great Lakes area.  

Desalination plants are big in the Middle East.  Israel is hoping desalination plants can reduce some of the conflict with the Palestinians and other neighbors, which is often over water.  

But they are all petroleum-powered, so far as I know.  Israel's new Ashkelon desalination plant has its own natural gas power station.  

There used to be proposals to tow icebergs down the the Middle East and sell them for fresh water.  

See!  I wasn't lying about towing those iceburgs.
Better tow them fast!
I was surprised to learn when I moved here a while back, that Santa Barbara, CA actually has a full scale desalinization plant that was built in the drought of the 80's at huge cost.  Of course as soon as construction was finished, the drought ended and it has been unused in standby mode ever since.


Saudi Arabia's population can not be sustained at this very minute without the desal plants.  A giant plant in the east keeps Riyadh alive with a 4 ft diameter pipeline and a 6 foot diameter pipeline.  A desal of approximately equal size keeps Jiddah ticking, for now.  

Back in the 70's there were some schemes developed to supply SA with alternate sources of water that went to the extremes of sending tugs up to greenland and towing back an iceburg.   In Riyadh the average humidity is 8%.  You feel like you need a drink every 15 minutes of walking outside.  If you leave a piece of bread out on the kitchen table, its rock hard in 10 minutes.  Outside August temps are 127-130 in the SHADE!  104ºF at 12 midnight.  In the Sun, temps reach 150-160ºF near ground surface.  I've left a cassette tape in my car parked in the sun and come back to find a melted globb of plastic.

There are no rivers running all year anywhere in S.A. except for a short fat inky looking one downstream of the Riyadh sewage treatment plant, which quickly disappears into the sand.  

Occasionally it will rain and the drops dry up on the way down and never hit the ground.  Watch out for the lightning though.

Much of SA's water is drilled and pumped from undergound "fossil water" aquifers, meaning it entered the aquifers thousands of years ago and needless to say, just like the oil, once it's pumped out its never replenished.

We think we've got problems.  All we have to do is downsize our cars.  Try matching a camel on MPG-H20.

Very enlightening comments about living Saudi Arabia!

It is obviously a very inhospitable environment in which for humans to live.

The indigenous nomadic tribes seemed to have been able to make a go of it, but their population was but a small fraction of the population of modern-day Saudi Arabia.  It seems that the very existence of modern Saudi Arabia is totally dependent upon consuming large amounts of oil, a certain fraction of which they drink, via oil-fired desalination plants.  

These exemplary entities, such as Dubai, seem to be artificially propped up through a massive influx of fossil fuel.  Am I being over dramatic, but does anyone else out there think that Dubai closely resembles a nicer version of the planet Tatuine (sp?) of Star Wars? It makes Las Vegas seem absolutely natural.

I feel too old to move anywhere, but if I had to, I think I'd pick one of the Scandanavian countries, as they seem to have mastered the art of living cooperatively instead of competitively. Or maybe I'm misinformed. The climate, though, is another story. Cold weather doesn't help curtail one's alcohol consumption.

Most of the scandinavian countries have toyed with different levels of socialism and they still are quite or very homogeneous societies. All of them have functioning democracies and legal systems and very little corruption.

We do not have an uncompetitive culture, for instance IKEA comes from Sweden and Nokia from Finland, both of them learned their skills on the domestic market. There is no socialist paradise in any country although Norway probably comes closest and Swedish health care is a good example of a lumbering command economy that produces a lot of aimless work and consumes vast ammounts of money.

I think the cold winter is a key factor. Collect a lot of firewood and have consensus in your house or you will die cold and miserable, repeat this for hundreds of generations and it affects the culture.

Magnus, You are taking me back.  I worked for a Swedish company for the 10 years I was in Saudi.  You guys have a very competive culture, just not a lot of people to compete with.  It is my impression that sometimes it gets very personel, yet it is still easy to maintain a very healthy and friendly sprit in doing so, since everyone has the collective desire that all should succeed.  I also liked how, if mistakes were made along the way, nobody wasted any effort in witch hunting for the guilty, like they love to do in the USA.  It surprized me that nobody had the slightest interest in firing someone.  We just immediately regrouped and worked our way out of the problem as quickly as we could.  That was a very refreshing change.  But I won't mention the number of times that I went to the company doctor and got the wrong medications.  Fortunately nothing serious, as you say, just took time to get the right one.

I was surprized at the work they would let me get involved with whenever I offered to try something new and different from my usual work.  I think perhaps the Americans engineers specialize too much in that regard.  I would never have been allowed to do 75% of the stuff I did, if I was with a US company, due to the specialist mentality they usually have.  I learned much more than I would have otherwise and did so in a very short time.  Perhaps, when you have a relatively small population and live in remote areas in harsh conditions, everyone develops a level of self sufficiency that is quite advanced, regardless of the collective good political atmosphere.  The combination seems to be a good one.

Good thing that SA is injecting so much water into their oil fields.  Yum!  Tasty oil field water...
Even the air smells like oil and dust.  Whenever I get home and take that first breath of fresh air coming straight off the center of the Atlantic, it seems very strange that it does't have that oily smell.
Right.  At one time Lady Bird was talking about diverting the Missouri River!
Desalination is not just for the Middle East.  Tampa Bay has a fairly advanced plant.  

There is much room for innovation with water conservation.  Singapore may be on the cutting edge with its water reclamation plant (i.e., "from toilet to tap").  What, you didn't realize that your bottle of Evian was once T-Rex piss?  Singapore is just making the hydrologic cycle a bit more concise.  ; )

Oh, yes and yes, GeoPoet and Leanan, complex systems can be fragile. While control and resources exist the weak parts of the chains are shored up, maybe strengthened; but when they do not it breaks so fast to be almost unbelievable.

I am reminded of a benefit of trade / globalisation: agricultural production is determined by the least available of its requirements, be that water, fertilisers or minerals, labour, etc. The movement of these resources mutually increases production for deficient areas. The principle is a general one, and we have exploited it to our benefit.

Now imagine it in reverse.

That's the problem with complex systems.  When one breaks there's 10 more on the brink.  All of a sudden the previous feed back loops don't work any more, 10 systems spiral out of control and you hit the windscreen pretty hard.
This would help solve the problem of the oceans rising - how many "desalination plants" would we need to lower the sea by an inch?

"That is what Tainter meant by the cost of complexity.  As resources decline, the solution  often cause more problems, until it's just not worth it any more.
Ethanol also has water issues:

BISMARCK, N.D. - Ethanol plants need more than corn: If all the proposed factories in North Dakota were built, they would use more than 1 billion gallons of water.
Drought in future years could curtail North Dakota's burgeoning ethanol industry or at least limit potential plant sites, particularly in the Red River Valley, officials say.

Ethanol plants are big water users. The Sioux Falls, S.D.-based American Coalition for Ethanol says it takes at least 3 gallons of water to produce 1 gallon of ethanol fuel.

Water might turn out to be a bigger problem than oil.  

Of course, if we had enough energy, we could build desalination plants

See...Water pipelines.  Told you I'd be doin' those next.  I thought it would've been farther "downstream" than that though.
GeoPoet: Is Ogallala depletion the underlying issue here?
Well it has to be part of the issue - along with the current drought in Oklahoma and Kansas. We cannot recycle our water - it is turned into literal mud. The only way to get it back is evaporation in a field, which releases it to atmosphere. And water isn't expensive enough to do anything more than that yet...
In Riyadh we used to get the car washed with diesel.  Diesel was 20¢/Gal... Water was 4X that at 25¢/Liter.  It was prohibited to wash anything with a garden hose.  We'd get water for 1 day, then it would be turned off for 2 or 3.  Electricity always worked though. Couldn't live without the AC.
Growing up and spending the first 18 years of my life on the banks of the Platte River, It was/is the primary stopping off place for migrating water-foul. The past four or five years, I can't be sure, the river has been bone dry each summer, June to October, until it receives the water from the Loup, and Elkhorn Rivers, near Columbus and Valley. These two rivers carry 2/3rds of the drainage basin for Nebraska. The Platte carries the water East of the continental divide for Colorado, and Wyoming. June through August is the prime irrigation season for corn. The eastern third of Nebraska is nearly all irrigated corn with center pivots, and produces 1.2 to 1.4 billion bushels of corn annually. IMO the reason the river is dry in summer is because the water table drops during irrigation season. New irrigation wells in Nebraska are no longer licensed, and irrigation hours and volumes are controlled also. I don't know the details. I don't remember the river being dry my first 60 years of life. So now do you think the Ogallala aquifer has a problem? BTW there is also an Ogallala, Nebraska, and a native tribe of Nebraska named the Ogallala Sioux.
A farmer friend told me about another farmer that is extending his wells to 1000 ft.  He has 40 central pivot irrigators.  Each one has a 350 Hp engine to pump the water.  It costs $85.00 per acre just for the water.
dip....i had a friend who worked some time on a turf farm in colorado the time he worked there (~7 years), the well output fell from 600 gal/min to 50 gal/min., this from the western extent of the ogallala. the ogallala has an extremely long recharge time, which wiki refers to as paleowater, from the last ice age. when it's gone, it's gone
Somewhat dated, but featured in a recent post by Mike Shedlock ("Mish") at (Peak Water?).
can we draw an analogue from the water scarcity situation here to what other countries are going to do with their oil once they realize its scarcity value, therefore retarding fungibility?  seems to me that we can make a strong comparison...
I wonder how many Wall Street analysts use systems dynamics to  look at future projections.
I think its pretty much the 200 day moving average for the average analist.  Some get a little more exotic with various other indicators, including using a ruler from time to time, but I think you know the answer to your puzzle already. Of course I would expect a few live wires there, because it seems like picking up physics grads is the thing for major houses to do these days.  Seems like they are concentrating on predicting short term prices using neural networks, genetic algorithms and various fast fourier transformations with special windowing techniques for the data now that they can get realtime high speed data streams on their PCs, but (hey don't kid me) I'm sure the % is gotta be low.

Some of the researchers at the Federal Reserve Banks get into heavy duty Baynesian and Markov Chain based what if studies.  I've read a lot of them (despite not knowing what "supply and demand" means, Don) and I don't remember seeing any specific studies using systems dynamics modeling.  

I have no doubt that complex systems models are routinely used in the FED and Treasury basements, but for WS.. its a long shot.  Certainly my broker doesn't (he's me. Nobody watches my money as well as I do.)  What do the other brokers out there say?  

There used to be tons and tons of nifty research done at each of the 12 Federal Reserve banks, and you could also get piles of really good educational pamphlets free for educational purposes. The Fed is ENORMOUSLY profitable, and for decades they skimmed off some of this for research. The the Treasury (which by law keeps the Fed nonprofit) cracked down, and the quantity of research and free stuff has gone down. However, the quality of economic research at the various Fed banks is A+ because they get the very brightest Ph.D.s right out of grad school in many cases and (to some extent, depending on the people involved) pretty much turn them loose to do new and interesting and important things.

The Fed banks have been involved in economic dynamics and modelling it at least since the 1950s and bigtime in the 1960s and 70s, before that Treasury squeezed funds. With no false modesty, I can say that some of the best research was done at the Minneapolis Fed, and at one time we had about three of the top ten macroeconomists in the country on the staff. Then they go on to some second-rate place like Harvard to get six-digit salaries and huge consulting fees.

You want to see some interesting stuff, go to your nearest Fed District bank, find the librarian, and talk to her.

I'd like to, but its like 4500 miles away.  I have to dig on the net for it.
My impression is that most of the good stuff is not to be found on the Net. However, if you know exactly what you are looking for, those Fed librarians are very knowledgeable, very helpful. Also, the each of the 12 Fed Banks has its own website, and you can get a lot of good (popular and recent) research papers and general-education stuff from those.
In one part of Canada, natl gas extraction is being limited to keep up pressure for oil production. In the oil sands, lack of sufficient natural gas is limiting planning for capacity expansion. I think we will be seeing these competing situations more frequently.
I have also heard that trucking in the water to do the hydrofracing in the Barnett shale of North Texas (and then hauling away the spent fluids) is generating some irritation from those who watch it and cannot use water themselves to water their lawns.

What kind of water does your company use and for what purpose?  Are there technical solutions, such as a pipeline which can alleviate the problem to a certain extent?  Why are rising water costs/scarcity not being reflected in a higher Nat Gas price which would theoreticaly induce more exploration/extraction, and at what price could your company hedge to justify more expensive operations?  Just curious, thx

All drilling operations utilize fresh water to make their drilling mud, cement, etc. It is either trucked in from local suppliers or else a temporary well is drilled a mile or so from the drilling site.

There are no technical solutions when you simply are not allowed to purchase water - try doing much of anything without it. Even oil-based drilling muds utilize water in their mixture. The locals are concerned with their own homesteads and farms having enough water right now, so they are simply refusing to sell to us.

You will see this reflected in natural gas prices after a small lag. We get hit with this kind of stuff, we stop drilling, shortages appear,the prices rise, we can afford to truck from out of state with the new price. That is, provided we can get the next state over to sell us water. It all happens in increments.  This is part of that "bumpy plateau" everybody talks about that thinks Peak Oil has a 10 year window...

For want of a nail....

As the margin gets smaller between the amount we want (oil, gas, whatever) and the amount we can get, we're definitely going to witness some seemingly minor issues get amplified into ever-larger consequences.

One night while driving home I considered the similarity between traffic jams and what lies ahead as the peak unfolds.  Queueing theory suggests that you will experience shortages and other pleasantries prior to reaching the theoretical point of Supply=Demand.

And yes, I am using Supply and Demand in the loose, lay-person sense.  Dammit Jim, I'm just a country engineer!



Have you considered switching to saltwater drilling fluids?  You could just drill with produced formation water, perhaps supplemented with additional salt.  This would have the added benefit of reducing formation damage to fresh water sensitive sands.

But then I've got to get rid of all that volume in a bunch of disposal wells. And there are some long shale sections that are ionically sensitive - FW works but SW doesn't - we get sloughing and all the rest of that wonderful instability when we use SW.

There are some other factors that fall in as well, one being the lack of rigs and trained people. Our drilling time has doubled on some rigs as they are full of worms and cannot perform ops in normal time. Rig and tubular prices have also shot up, to the level that some of our deeper projects aren't looking as attractive.

It's never just a single thing that brings on a decision like this, but the FW issue has sort of forced things in a hurry.

Wellllll.. that's two complex systems that are getting ready to blow.

We need water to build a pipeline.


Hoarding energy supplies... not extending contracts... pretty selfish. Those that have should share with others, well, at least with us.
Yeah, certainly we would do the same for them....
Sort of reminds me of the first rule of kleptocrats:
what's mine is mine and what's yours we share.
Last night I was talking to a couple from a spiritual community from a place called Damanhur outside of Torino, Italy I had noticed a sophisticated hydroelectric dam (operated by the power company in the nearby village) in their promo video, and said that such a thing would help them endure peak oil/NG problems.  Later, it dawned on me that the Italian government would not allow such a thing.  They would likely ration the electricity from the dam and it is highly unlikely that they would to give more power to the areas closer to the dam.

Here in the southeast US, I am guessing the same thing would happen.  So, power from companies like the TVA would be likely to be sent much farther distances than it is now.  Then I started to think about the household solar PV systems that are connected to the grid.  Could these be required to produce power for the central authority?  My guess is that under the circumstances of a collapse, that the large producers (farms, clothing, energy, etc...) will be controlled faster.  But, I would also guess that they would eventually get to the smaller farmers and other producers if a crisis lasts for very long.

Hey, a new potential market: camouflaged solar cells.

Energy hoarding will be frowned upon in the future.  Better not be too flagrant about your wiser decisions.
If frowning will be all what we see I'd say we will be lucky.
I'm more afraid of big guys with big guns coming if someone dares to keep "their" energy for his own use...
In the EU it is not only allowed, it is required.  New buildings and renovations over a certain value or % of buildings and dwellings must be provided with alternate energy systems to meet a certain percentage of their base energy loads.  It started in an attempt to reduce greenhouse emissions in accordance with the Koyoto Agreements.  This is a rather new EU directive and I am not plugged into the exact workings of it, so I can't say much else right now.  When I find out more, I'll post it.  I have noticed that all the traffic lights I've seen have now gone to LEDs.  Supposedly pays back in electricity savings alone in 2 years or less.  More when including greenhouse gas cost.  Are you guys in the States using LED traffic signals?  In Spain, the focus is on solar panels to meet the new regulations, as we on average get 300 days of sun/yr.
I realy hope the alternate energy system do not need to be directly connected to the house since that could force thru some extremely inefficient investments.

Or when I think further about it, the idea is silly. It as not as relevant as building in an efficient way with smart architecture, insulation and so on. What good incentives do this directive give that expensive energy do not provide?

If I only judge from your post it should pe put in a paper shredder and the cost for managing the directive could be spent on education about energy efficient architecture.

LED traffic signals seems to be installed as trafic signals gets renovated or a little faster in my town. I realy like them since they also give better contrast in sun glare. LED indoor lighting are starting to appear but so far only as design lighting such as in the Turning-Torso scyscraper or expensive bathrooms.

From the limited information I have heard, I think you are right.  Straight to the shredder would be too good for it.  But... if not their brains, their hearts are in the right place.  I give them a B- for trying.
I agree that efficiency is more important.

A good source of LEDs in the US is:

More automotive, but several Edison base and a new 36 LED 120 V Globe in about a month !

New Orleans went to LED traffic lights 3 years ago but Icleand has not (yet).  Of course, 100% of their electricity is renewable so "why bother".

Traffic signal incadecent lamps are usually 135 watt.  I think the typical LED signal uses about 24 watts (give or take).  The incadecent lamps are only good for a year but the LEDs can last 3 to 5 years.  If you factor in the relamping costs, they can be a considerable savings.
LEDs are a big win over incandescents in efficiency.  But high wattages they only just match the efficiency of compact fluorescents (and lose to metal halides, etc.), and are much more expensive.

Still, they're the obvious choice to take over small wattage tasks (like flashlights, auto tail lights/turn signals, Christmas lights), and brighter colored lights like traffic signals (colored LEDs are more efficient than white ones, and certainly more efficient than a filter over an incandescent!).  The long life vs. incandescents is another bonus.

I think it will be quite a while before it makes sense to use them broadly for room lighting ... they'll have to beat out fluorescents in both efficiency (may happen soon) and price (almost certainly won't).

I use LEDS in several places in my car (about 44 watt savings at night.  I use small diesel power alternator to make that power).

I use 120 V LED to illuminate front door outside (amber to keep mosquitos away), night lights (two to get to bathroom) and one to illuminate keyboard.  Rest are compact Fluorescent except one halogen reading light.

Smallest CF I have seen recently is 4 watts  and it clearly beats LEDs.  2.2 watt to 0.3 watt LEDs.

I see plenty of LED signals, but they are being replaced gradually.
I think that the outlying areas on the edges of the natural gas distribution systems are the "Canaries in the Coal Mines" regarding natural gas supplies.  Recall the problems that the UK had with natural gas in November.  

Here in the US, I think that California is going to face problems first, along with the Northeast US.  

I wonder if we are going to start seeing a slow (rapid?) migration toward areas that have:  (1)  local energy supplies; (2)  local water supplies and (3)  local food supplies.  As Jim Kunstler has been pointing out for a long time, large portions of the American Southwest are going to empty out.
That will be later, once effects start to kick in, and a good reason for choosing non-obvious places if you intend to move to a new, sustainable home.

I read some observations on this fairly recently that I agreed with but haven't saved the link (in a findable way, anyhow); I think the gist was: population 10k to 100k, remote (100+ miles) from 200k+ population centers, good water supply, decent soil and climate, minimal extreme weather risks, woodlands nearby. It predicted a significant change in US population patterns in this direction.

Regarding the question of where to migrate to when things get worse, I think we are mostly between a rock and a hard place. Do you migrate to the Southwest where you don't have to worry too much about energy for heating but water is a real problem, or do you migrate to the upper Midwest where there is an abundance of water but you have horrendous winter heating bills? Take your pick.

There aren't any unspoiled frontiers any more that are also decent places to live. (the wilds of Alaska and the Amazon rain forest might be largely unspoiled, but how many people really want to live there?) I am afraid that geography no longer offers the human race much of an escape, as it did centuries ago. All the good places have already been taken.

We're just going to have to roll up our sleeves and make things better mostly where we already are. Having said that, I will also say that the water resources problem does not bode well for continuing the high growth rate in places like Pheonix.  The distribution of population will eventually correct itself, albeit quite painfully.

Then there's the issue of climate change.  We have no guarantee that the weather will stay the same.  Maybe northern Canada will be warm and balmy.  Or maybe it will be like "The Day After Tomorrow," with glaciers swooping in, driving Americans to Mexico.  

Okay, maybe changes that drastic aren't likely.  But changes like more hurricanes or extreme changes in rainfall are likely, IMO.  Then there's pollution.  (The northeast has plenty of water, but they're also downwind of the rest of country.  Acid rain generated in Ohio can kill crops in New England.)

And Germany.
Glaciers like in Day after Tomorrow are a pretty negligible risk in any timeframe that we care about.
I am relieved to learn this; I can sleep tonight.

My own view is that the "doomers" have found some solace in their doom.  It is the honest uncertainty that is difficult to  handle over time.  There's a huge difference in the various scenarios on liquid fules depletion rates.  Making early choices based on those scenarious potentially lead to different but still very negative outcomes.  Conservation and sensible resource use, however, is one choice we can all make now without negative future effects.

I'd agree that glaciers aren't likely to form as in TDAT, but there is a good argument that would put a new ice age within the timeframe of our lifetimes. Not sure I agree with this, but then Hamaker is a smarter man than I (and an engineer to boot).
That was pretty funny when the ice age chased the guy down the hallway.

Leave it to Hollywood...

I agree with the conclusion here: there's no place to escape to. Better to make a stand where one has roots, if there is such a place, and get together with other people to do the best one can.

Ideally, the gov't would help the hindmost and prevent disaster for any one region through coordinating relief and mutual help. Then one wakes up, stops dreaming, and remembers Katrina. In reality, the gov't is going pull up the drawbridges when things get rough -- and let all but the top few per cent go to hell. And if there's something you've got that they need, they'll come and take it.

Ultimately, no form of survivalism is going to work very well. There's going to have to be a political struggle to get a gov't that's interested in the welfare of the 95 pct and is reality-based.

Yeah, right. True, but what's the alternative?

"Ultimately, no form of survivalism is going to work very well. There's going to have to be a political struggle to get a gov't that's interested in the welfare of the 95 pct and is reality-based."

There's going to have to be a political struggle to form a State that is reality-based. Whose welfare it will be interested in will be determined by that struggle.

My reading of history suggests that after TSHTF will come the "man on a white horse," either of the Hitler or of the Mao variety. Going way back to Aristotle, perhaps farther, historians and political scientiests have noticed that dictatorship tends to follow the collapse of democracies and republics.

A new Julius Ceasar is our best hope. I fear another Adolph Hitler is more likely.

Aha, finally I get to be the optimist, partly anyway. I think we already have a disguised military dictatorship -- these guys would have been long gone otherwise. I was a Maoist in my youth, but I think the days of that kind of leader are over. Chavez, for example, has NOT shut down the opposition -- and I hope he never does. That's the worst mistake victorious movements make -- destroying their enemies. They became corrupt and their own worst enemies. I think free speech should be protected by a universal bill of rights -- top of the list. Maybe I'm dreaming, but I entertain the hope that coming wave of revolution will be a lot more democratic and much less violent that the last wave.

I do agree that things here will get much worse before they get better. But I can't bring myself to believe that the human brain is totally useless on the societal level, that science and rationality will never prevail.

While I would be the last to deny the influence of the military-industrial-academic complex, I think it is quite a stretch to say that we have a "disguised military dictatorship" in the U.S. For one thing, the actual armed forces are politically very weak in this country: Rumsfeld dictates the party line, and you either toe it or get out.

Castro has succeeded in large part by expelling and imprisoning and otherwise silencing political opposition, and he is by far the most successful dictator on the planet.

Reasoning by historical analogy, my guess is that what will happen is that the U.S. will retain the forms of a republic, as ancient Rome did for hundreds of years after it was meaningless. The most plausible route would be for ditators to assume emergency wartime powers "for the duration" and the duration would go on indefinitely.

The great advantage of representative government is that we can throw out the sonsabitches now in office without blood in the streets and give the other sonsabitches a chance to screw up. Thus I do not see violent revolution as likely in this country, though a great deal of rioting and disorder (picture post-Katrina New Orleans fires and fighting multiplied by about 300 to 1,000) is likely when TSHTF.

Any city or region is no more than four meals away from chaos.


Well, I will modify what I said a little -- it's not just a (disguised) military dictatorship, it certainly involves the largest corporations, especially the defense contractors. Rumsfeld and Cheney are in the very center of that whole web. This administration has poured tons of money into the pockets of all these people and have their support. Rumsfeld and Cheney may issue orders to individual military people, but they certainly don't go against the whole complex.

I don't think that we can throw the sob's out anymore -- not in 2000, not in 2004, not in 2006/8. I don't advocate violent revolution - I advocate voting in such large numbers that they can't fudge it, kind of like what happened in Haiti recently. Not that this will happen anytime soon either. Violence has to be delegitimized, so that whoever uses it loses the respect of the whole world.

As for Castro, my daughter was there. The poorer half, especially the older ones, still support him, or least they did 6 or 7 or so years ago when she was there. He was the first to do anything for them. Read THE REAL FIDEL CASTRO by Coltman. He recounts an exchange between Castro and McNamara. Castro says "you guys tried to assassinate me 33 times". McN replies "it was only 7". Something like that. They're piss poor, but they are better educated than we are and have better medical care for people at the bottom. Their longevity is roughly equal to ours.

The US has overthrown one Latin American gov't after another for over 100 years. Prof G will get mad at me if I clog the blog with the full log. Yes, Castro has been a dictator, but the threats have been real. Our liberties, however, are melting like snow on a hot tin roof -- why?? -- who threatens us? There is zero excuse here.

Anyway, I agree, TS will HTF. We'll see which way if flies.

In the United States anyway, I think the Pacific Northwest offers the best location post Peak Oil / global warming. The winter is mild compared with the interior, water's not a problem, summer's great, no hurricanes and you're not even downwind of anybody. The second best spot is probably the northeast: good water, summers that you can survive without A/C, winters aren't too terrible.
you just have to deal with the ocasonal subduction zone earth quakes. :)
"I am afraid that geography no longer offers the human race much of an escape, as it did centuries ago. All the good places have already been taken."

Actually, all the good places have been taken up for quite some time. However, this didn't stop others from attempting to displace them. Probably won't change any in the future, either.

Meanwhile, NSTAR, a greater Boston gas & electric utility, is seeking a 36% gas rate cut effective March 1st due to lower than expected natural gas prices. rop_citing_lower_than_expected_costs/

Any thoughts on the situation in Ontario?  They apparently mailed a pamphlet to all their customers.  Many got them today.

Softening people up for a price increase, maybe?  Or just a CYA if the lights go out?

Maybe softening people up for more nuclear power generation?  
Together, the combination of demand growth and generation retirements would create a
gap of roughly 24,000 megawatts (MW) by 2025, equivalent to about 80% of Ontario's current

Ontario's plan shows a 31% increase in installed nuclear capacity by 2025.
Thanks for posting that Leanan. The Ontario government (past and present) hasn't got much of a clue about power systems and I have no confidence in, or respect for, the energy minister. I recall watching her sneer at a speaker at a public consultation exercise who had suggested that Ontario could benefit from studying the experiences of electricity systems in other jurisdications. She has a small mind and a large ego IMO.

Ontario intends to continue subsidizing electricity consumption for at least the next three years. Residential consumers often pay only a fraction of the spot market price. Meanwhile, the energy intensity of the Canadian economy is twice that of the US and consumers are completely complacent. The government intends to bring in smart metering and time-of-day pricing in order to encourage load shifting, but isn't using the meter-upgrading opportunity to introduce any better consumer feedback. The price differentials aren't likely to be large enough to have the desired effect. Although the new pricing regime will raise prices overall, the proposed rates were left behind by reality months ago. Even the peak rate they propose to charge is scarcely higher than the off-peak spot market price during high demand seasons.

The CANDU nuclear plants have aged prematurely and have required phenomenally expensive refits. The government wants to close the coal plants even though Ontario only barely has enough generation capacity now and can't possibly build much more before the coal plants are supposed to be shut down. (Personally, I think pigs will fly before those plants are closed.) They'd like to build more NG plants, followed by many more CANDUs and a lot of wind turbines, but they are still $40 billion in debt from the old Ontario Hydro days. The debt repayment charge they attach to each electricity bill isn't even enough to cover the interest on that debt, so it continues to grow.

The problems are likely to get worse as many consumers are switching to electric heat as NG prices rise. The whole system is a disaster waiting to happen IMO.

It has already happened, like in a bunch of other places like in UK. Given that there is a 5 to 10 years of lead time for new generation capacity the damage is already done - blackouts are due to happen in the next few years.

My bet is that after the lights start going off, there will be a crash program of building nuclear reactors, but this still leaves us with a couple of decades of very hard time.

I think you're right - they are likely to go for a crash  programme of adding nuclear capacity.  That'll do wonders for the quality control process <sarcasm>, which has been bad enough at the best of times. I spent quite a while studying the effects of the Soviet crash programme for reactors and I wouldn't recommend that strategy to anyone with any choice. Ontario could learn from the experiences of others, but the energy minister has made it clear that she considers those irrelevant.

Unfortunately, Ontario's instinctive response to the impending electricity crisis was to add yet another layer of bureaucracy. Although they say they want to encourage renewables and conservation, almost everything they're doing seems designed to achieve the exact opposite.

So, what is your suggestion? I'll offer you some options:
  1. Wait 5 years and then start building nukes in a rush.
  2. Wait 5 years and then start building wind mills and building insulations in a rush.
  3. Start wind mills and insulations now.
  4. Start building nukes, wind mills and insulations now.

  5. you ruled out
  6. you can forget
  7. is not bad, but Germany needed 15 years to drive the renewable part of their electricity to 12% (Denmark needed 20 years for 20%). Now they are both stalling it because they need to build expensive energy storages for all those windy things.

IMO the obvious choice is 4).
But noone wants to hear.
Wind turbines have a fairly short time to delivery IF a few years wind surveys have alreayd been made.

From financial decision (with design work done & regulatory approval) to operation in 12 to 15 months for add-ons to existing sites and less than 2 years for greenfield sites in most cases.  

One issue is maximum wind penetration, and that depends upon how much hydro.  Western Denmark has gotten up to 70% wind at peak, with DC ties to Norwegian hydro and AC to Germany.  New Zealand beleives that with current mix, they can have a maximum of 35% wind at peak (-> 20% total MWh) due to a large hydro component.

Texas, with almost no hydro, may get a maxium 15% from wind at peak without changes to the grid.

Still, the reflex may be more wind (as it was more NG) because it is quick (NG about 3 years from financial decision to operation).

Quick is an overriding factor in these short-sighted days.  And that will favor wind over other alternatives.

In response to someone saying on a local forum in my area...  "How does using [oil] all up going to spoil it for the upcoming generations? If we went to GMO sourcing for alchoholic grain productions we could grow enough oil and fuel for ourselves."

I did some research on how much ethanol would have to be produced to power all the cars in Canada... if oil was "used all up".   (this is ignoring obvious things like water usage and gas usage in making ethanol)...

I'll submit my answer to him here... for peer review at the least. (ie. so that people smarter than me can tell me that I'm way off.. or not) ;=)

A gallon of gasoline contains... 111,500 Btu
M85 contains approximately 65,000 Btu/gallon
E85 contains approximately 81,000 Btu/gallon

So in terms of energy output... Ethanol and Methanol are already at a disadvantage.

As far as growing enough grain to power your own car (let alone the millions in Canada alone).
Think again...
Here's a website that lays out the numbers for a trip of 4400km.. which is probably also an average amount of km you put on a car in Port Alberni over a year.

"Through research performed at Cornell University, we know that 1 acre of land can yield about 7,110 pounds (3,225 kg) of corn, which can be processed into 328 gallons (1240.61 liters) of ethanol. That is about 26.1 pounds (11.84 kg) of corn per gallon"

In a 2000 Toyota Camry, you'd get 20mpg (8.5km/L)...

4,464.2 km / 8.5 km per liter = 525.2 liters
525.2 liters * 3.13 kg = 1,642 kg of corn

That's about .5 acre of corn

So... say there are 10 million personal cars in Canada.

That's 5 million acres of corn.

According to the CIA world factbook...
Canada's total land area is over 22 million sqkm. That's about 2,247,051,047 (2 billion) acres. 0.02% of that land mass is currently being used for "permanent agriculture"... That's 449,410 acres.

The CIA also says there is about 1.7 million acres of "irrigated land"... so lets take that as the current maximum amount of land we could grow corn.

That's about 3.3 million acres of corn SHORT of what we would need to ensure everyone could drive a very modest 4400km per year. You might also want to consider then how we are going to grow the grain and fruit and other products we depend on to survive if we're using our entire agricultural land to produce ethanol to power our cars (and that doesn't take into account trucks, trains, planes... etc)?

.... so.. that's the long answer to your question.

Compare the amount of wind power available in SK alone.  (Windiest place I think I've been that wasn't a mountain; I know I have not seen whitecaps on highway drainage ponds anywhere else!)
Ethanol is not THE answer - there is no single answer! It will take changes back to rail transport, electric vehicles for local/daily use, bicycling, changes in living locations, CONSERVATION, etc.  ALL of these things will need to be considered in some fashion or other because there IS NO SILVER BULLET REPLACEMENT FOR DIESEL OR GASOLINE! It will take changes in the way we think, including energy cost, where before we just considered time and convenience.

As energy prices climb, these changes will be forced on (first) the general population and then (second) the government. It will take a new crop of younger politicos to deal with these changes in a rational manner. The current bunch has already proven themselves incapable of grasping the coming crisis. They will have to get retired en masse, and that means the populace has to be hurting in order to turn them out. It may get nasty, but it's certainly going to be interesting!!

And why is everybody so UP on corn for ethanol? It stinks compared to other sugary options, which is why Brazil uses cane...

Probably because sugarcane is not an option in most of the U.S.
There are several plantings of sugarcane in my neighborhood.  Once planted, hard to kill and it likes to "expand".

Some were cut down for sugar water during Katrina.

But before sugar industry was creamed here by imports, we used to do fine with sugar cane from the south and sugar bets in the north. Both have better sugar yields than corn, so why the corn push?
Volume.  They want to replace oil with ethanol. (Ethanol SUV, anyone?)  There's not enough farmland in the U.S. to grow enough sugar cane for that.  Hence the emphasis on "stalks" and "switchgrass."  Corn, because we have a surplus of corn.

There's no surplus of sugar.  It's at record highs.  

Politics rules, not economics. Study the history of subsidies for corn, subsidies for Archer Daniels Midland the big ethanol-from-corn proponent. Ethanol from corn only (might) make sense in years when we have humongous surpluses of corn--but the reason we have the prodigeous surpluses most years is because of the political power of those who benefit from the way things are.

Given the limitations of the way our political system works, I see no near-term way to beat the stampede to corn-ethanol--except with something better, namely ethanol from biomass.

And large-scale production of ethanol does NOT require any technological advances (though they will be nice when they get here), on-the-shelf technology exists and is being used and has been used bigtime in Russia for more than thirty years.

The way to beat a bad idea is with a better idea.

"It is a comfort in wretchedness to have companions in woe"

Is that a good motto for TOD's attitude to PO?

"Misery loves company but hates competition."

Stoics believed it was our sacred responsibility to do our duty cheerfully. To be grumpy was to be foolish, because a sour attitude relflects a profound lack of wisdom--namely, the inability to distinguish between that which is in our power to control [or influence] and that which we must accept because we can do nothing about it.

I have a great fondness for stoic philosophy; it seems especially appropriate for times of trouble and collapse. See especially the "Discourses" of Epictetus and the "Meditations" of Marcus Aurelius.

LOL, this was a good one :)

But for the sake of the truth I think that the spectrum here is much larger than this, otherwise the blog would not be that popular.