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Friday Open Thread
Posted by Prof. Goose on February 3, 2006 - 2:23pm
Cheers!
“If kindness and comfort are, as I suspect, the results of an energy surplus, then, as the supply contracts, we could be expected to start fighting once again like cats in a sack.”
—George Monbiot
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Massive oil profits may not last
Although industry leader Exxon has long shown extraordinary discipline in finding more oil year after year, rivals like Shell and Chevron are lagging badly. Despite earning $14 billion last year, most of Chevron's production and reserve increases came from its acquisition of Unocal, not what oil insiders call 'the drill bit.' And while Royal Dutch Shell earned more than $25 billion, its daily production fell from 3.7 million barrels a day in 2004 to 3.5 million last year. Even worse, the Anglo-Dutch giant replaced only 70% to 80% of the oil it pumped out of the ground, despite spending billions on new projects.
"This is the big story for these companies," says veteran industry consultant and occasional gadfly Matthew Simmons. "They're so big, they're having a very hard time growing. The only thing they really know how to do well is buy back stock." Simmons, it should be noted, is convinced the world is entering a period of tight oil supplies that will drive prices much, much higher. That's debatable -- but he's on to something here. Because if the oil giants can't find new fields, going forward they'll essentially be liquidating the source of future profits. Smaller, independent oil firms have had much more success in growing production, which leads Simmons to wonder if maybe the giants wouldn't be better off splitting themselves up. "I think one of these days, one of the Big Oil companies is going to break itself up like AT&T and the Baby Bells."
Oil analyst Neil McMahon of Sanford Bernstein agrees the production numbers are a challenge, although he's a bit more sanguine about the future of Big Oil than Simmons. "Still, at the end of the day, it's not great," he admits, adding that production schedules of big projects like BP's Thunderhorse in the Gulf of Mexico and Chevron's Gorgon field off Australia have also been slipping.
If Simmons knows more about than PO its about extracting value out of businesses.
The problem of falling reserves is hidden with the price increases and buying out other companies. Revenue looks better than it really should be. Not that they can honestly find more oil to replace production.
I suspect there is a Marzipan layer to cut out. Like engineering and exploration, admin etc. What are those geologists and geophysists doing if they are not finding oil? Probably wasting time blogging on the net at TOD.
Then it becomes a strip mining operation of cash.
Vulture capitalism at its best.
After describing stock repurchases and so forth, he goes on to say: "There is a phrase for that strategy: gradual liquidation. It is an excellent strategy for a company in a declining industry with few investment opportuniies. Let us hope that not is the case here."
Norris, in the end, puts his hands over his eyes and says: "We can hope others are will make the investments Exxon Mobil is unwilling to make, in both oil and alternative energies. If not, the easing of energy prices may be further off than it needs to be."
I happen to know that Exxon is coldly and relentlessly rational in its focus on the bottom line. If they don't invest, it's for a reason that they believe impacts the bottom line.
I was trying to read up on how oil is used in the US. I found this data The data is barrels of oil used a day. The percents are each categories percent of the total.
I was curious how much oil gets used as an input for the manufacturing of products. I always thought things like plastics, synthetics, pharmacuticals, etc. contained had oil derivatives.
So does anyone know which products below go into manufacturing?
US Oil Production 7,649
Oil Imports 13,145
Total 20,794
NGLs and LRGs 2,264 11%
Other Liquids (30) 0%
Finished Petro Prods
Finished Mogas 9,105 44%
Finished Avgas 17 0%
Jet Fuel 1,630 8%
Kerosene 64 0%
Distillate Fuel Oil 4,058 20%
Residual Fuel Oil 865 4%
Naphtha Petro Feed 390 2%
Oth Oils Petro Feed 366 2%
Special Naphthas 27 0%
Lubricants 141 1%
Waxes 15 0%
Petroleum Coke 524 3%
Asphalt & Road Oil 537 3%
Still Gas 704 3%
Misc Products 53 0%
Total 20,730
Yes, but it's a very small portion of each barrel. "Petrochemical feedstocks" account for 1.1 gallons per barrel, according to the American Petroleum Institute.
The API produces this brochure about what is made from oil, for classroom use:
http://www.classroom-energy.org/teachers/oilfacts.pdf
I must admit I don't know what are the fundamental differences between blogs and forums that require such restriction. I'm writing in a hurry sometimes as a take-away from work, and therefore the mistakes which I suspect are pretty annoying to the public here (being highly educated in general). Overall IMO, the confusion element from typos, factual errors etc. is higher than it would be if they could be corrected right away from the commenters instead of posting a "correction" post.
Of course I grant the editors the right to have a final word on such questions, but still hope they change their minds...
Reader A makes a comment. Reader B then responds. Then reader A modifies his original comment such that Reader B's response makes no sense. Confusing, and not very fair to Reader B, yes?
I'll try to be more careful and use the preview button.
(semi-serious)
Forums have addressed this for years. Forums simply date/time stamp the post and add a line (automated, cannot be changed by the author) showing that they edited the post and when.
So you have this:
After editing, it becomes this:
Now reading a thread, I can see if someone has modified the thread and therefore understand that I am not looking at the original post. Further, forums often allow "quoting" which automatically copies the original post precisely so that a reply can be compared directly against the post. Such a quote cannot be edited, and thus demonstrates the difference between what is currently posted and what was originally posted.
In that sense, blogs are a step backwards when used as community platforms for communications. As expressions for a single individual or even a few individuals, they work very well. What has occurred here at TOD is the evolution of the blog into a wider community of posters. Perhaps one solution would be to install a forum and disallow further direct comments to the blog except by the TOD team itself. Then community participants (like us) could comment on a thread in the appropriate forum opened by the original poster and which would have a link back to the blog entry.
If editing left the original text, but allowed strikeouts and bold or red-colored revisions, that would be fine. But I doubt those features are available, and enforceable, in this software.
But most blogs don't bother, probably because unlike message boards, they are ephemeral. Once a blog entry drops down the list or scrolls off the front page, few will see it, let alone reply to it. While a PHP board like PeakOil.com has some discussions that have been going for years. It just seems like it's not worth the hassle of adding editing capabilities, given that most blog threats have such short half-lives anyway.
It's capitalism or a habitable planet - you can't have both
Robert Newman, Guardian
Summary:
Our economic system is unsustainable by its very nature. The only response to climate chaos and peak oil is major social change
published February 2, 2006.
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
On the one hand, capitalism has been a flexible, durable system that has re-invented itself many times over the centuries.
On the other hand, the current unresponsiveness and denial lead one to believe that Robert Newman may be right.
Newman is an English writer-comedian, currently appearing in his show "Apocalypso Now" (review).
He is also the author of "The Fountain at the Center of the World," about which Salon says:
The anti-globalization movement may not quite have found its Dante or its Homer in British writer Robert Newman, but it's found something, all right -- maybe its Theodore Dreiser. Newman, the author of two previous novels published in the United Kingdom, makes a splashy, messy American debut with The Fountain at the Center of the World, an ambitious and occasionally thrilling book that takes you from a NAFTA-impoverished Mexican village to the sleek corporate hallways of the City of London to the now-legendary street demonstrations at the World Trade Organization's 1999 Seattle meeting.
(Review by Andrew O'Hehir)
-BA
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
What we want to tax is congestion and consumption and not employment.
This is why toll roads make sense. The driver pays to use it. Its not free. Govt is then not resposible for providing free roads for cars.
I would add one thing is congestion pricing is also part of the equation. ie Drive in Peak hour traffic pay heaps. Drive off peak pay less. Take publc transport pay nothing.
The way I see it, there are simply too many problems encroaching on the world. We have peak oil, of course, and the related problem of climate change, dropping water tables, desertification, oceanic dead zones, etc. If we manage to solve one problem, 8-10 more are waiting to become the next big problem, or factor limiting growth.
And of course all of these problems interact to make solving them all much more difficult than solving them independently. For example, if we run out of fresh water, we could desalinize ocean water. But that takes energy, which is going to become scarce in the near future. And so on.
All of these problems are fundamentally caused by the demand to grow. At some point, as population grows, as our waste products accumulate, as we demand ever larger harvests of (fill in the blank) every year, we will reach a limit. I believe we are in overshoot already and are destroying the earth's productive capital in order to grow the economy another 2-3%. It's madness, but it is what our institutions demand of us.
You couple this with the fact that changing over to an economy which is sustainable in the long term will require truly massive changes, and changes which will demand significant sacrifices in terms of a reduction in the standard of living (at leastin the developed countries), I just don't see it happening. People are too used to their trinkets, kept too ignorant by the mainstream press, and simply are too suspicious of things that depart from the norm this radically.
I believe we are headed for collapse, in the Tainter/Diamond sense.
"Ok, but then, is all this crap really making us happy?"
Because one look at psychoactive usage in the US tells the whole story ...
.. it ain't
And then, who knows, maybe something useful will actually come out of this crisis.
It is just like in psychology, when you try to reject and postpone some problem coming from yourself, a problem that keeps hinting of itself until in the end comes to hit you straight in the face. And you start asking: Oh, God, where did this come from? Whose fault is it? Al Quaeda? Iran? Russians? Marsians? But in the end there is that little chance to find out that the fault is in yourself.
Personally I feel sorry for the american society - so much money here and so little self-fullfilment or happiness if you want to call it. Seems like we're trying to substitute one with another but just like the oil we've burnt, you can't buy something that simply isn't there (no matter the price).
Another - somewhat pleasurably angular - analogy along these lines, was a lovely lesson I learned, albeit not personally, from none other than Donny Osmond.
Donny was in competition most of his younger life with Michael Jackson: in fact, "One Bad Apple" was - to be brutally frank - tantamount to a rip-off of the Jackson sound, still they did it well (no easy feat), and it was a huge hit for them (<jealousy> the bastards </jealousy>).
The competition continued through the 70's, but then came the 80's, and Michael while went nuclear, Donny's career stagnated.
There's no point in getting into the details of the effect of this on Donny - essentially his perfectionism really took hold of him and he really beat himself up bad: but after years of this, eventually, it dawned on him (even before things with Michael got too obviously freaky)
"Why the hell would I want to be Michael? He's essentially alone, pretty messed up, and I have a wonderful wife and family, and I do what I love, even if it's not as big as Michael, so what? I actually have a better life than he does: end of story!".
Now, before we all get all teary eyed at Donny's discovery, it's good to remember that we all should be so lucky to be in a position to have such a realization: but regardless, the point is made. I think the short form goes something like ...
What would a baby prefer? Her mother's love, or to be stuck alone in a crib of gold? I think the same analogy holds true for adult humans as well; there's more to happyness than a limitless credit card and a clothes rack.
I would guess that most of the fuel used at a NASCAR event is for the fans to get to and from the track.
Given that crowds go anyway from 50,000 to 250,000, and that some fans travel great distances to attend every race they can (I grew up in North Carolina, I knew people who'd take their winnebago all over the southeast several weekends a year), the fans not only use more, but 2 or 3 orders of magnitude more.
In the '70s oil shocks, NASCAR temporarily cut race distances, say from 500 to 450 or 400. Given the back of the envelop calculations above, this is obviously the equivalent of spitting in the ocean, but still a nice gesture.
The NASCAR proposal obviously was intended for its symbolic value. Symbolism usually does help in setting the ground for other more significant sacrifices. Put another way, if folks won't give up their profligate use of gasoline to attend a car race, then how can they be expected to make other more serious behavioral changes/
Del Monte to Stop Growing Pineapples in Hawaii
By JAYMES SONG, AP
Excerpts:
HONOLULU (Feb. 3) - Pineapples have long been a proud symbol of Hawaii, along with hula dancers, palm trees, Diamond Head, surfers and the spirit of aloha.
The future of Hawaii's top agricultural product is now in question as Fresh Del Monte Produce Inc. announced it will cease pineapple operations here in a little more than two years.
Del Monte said it was no longer economically feasible to grow pineapple in Hawaii because it can be produced for less elsewhere.
Fred Galdones, president of International Longshore and Warehouse Union Local 142, said about 700 pineapple workers will lose their jobs. Galdones said he was also concerned with the future of the two remaining pineapple companies in Hawaii, Dole Food Hawaii and Maui Pineapple Co.
"I hope it's not a domino effect like it did with the sugar companies, where one had closed and the others followed suit," he said.
Hawaii's once thriving sugar cane industry is barely a presence now as companies found it cheaper
to operate elsewhere.
Tens of thousands of acres of former sugar cane fields on the densely populated island of Oahu, where about 75 percent of the state's 1.3 million population reside, have since been developed into master-planned residential communities and shopping centers.
Maybe in a hundred years those burbs will have been ploughed back under and will be producing much smaller quantities of fresh fruit and veggies, grown without artificial fertilizer, for the benefit of a local population who live under the shadows of a thousand abandoned resort complexes and vacation condos.
Very J.G. Ballard ;-)
I suggest that we put that energy into a set of Wikipedia articles. Everything from "peak uranium: myth or fact" to "what kinds of demand will be destroyed first" to whatever else we've been talking about.
The amount of time we've been spending just to read these comments could write a book a month. Many of us are good writers. Let's go for it.
I think half the threads I've seen in the past two weeks could be either "take it to Wikipedia" or (after just a few weeks of work) "that's already on Wikipedia."
There's already a "peak oil" category. It takes maybe 10 minutes to learn to use the software. And anyone can add an article.
http://en.wikipedia.org/wiki/Category:Peak_oil
For an example of what an article looks like in source form, see: http://en.wikipedia.org/w/index.php?title=Haber_process&action=edit
Note the line at the bottom: "[[Category:Peak oil]]" Include that in any article you write for that category, and the web site does the rest.
Just go here to start a new page:
http://en.wikipedia.org/wiki/Help:Starting_a_new_page
Let's go for it!
Chris
In addition to Wikipedia entries, how about a statement on the posting page requesting that a person search for their subject before posting. If everyone searched the existing posts before adding their own, their would be somewhat less posts. On one hand, I just searched the blog for "Wikipedia" and there was a zillion references...too many. On another hand, before making a recent post I searched for "Present Value," and only found three unrelated posts.
For some reason, I get the feeling that no matter what is done, we are going to have an even greater explosion of comments in the future. Looking into the future - when the mainstream media can no longer hid the divergence between oil supply and demand - so people start searching the Internet by the millions.
It will be "Hello World, welcome to the blog - please be nice and clean up after yourselves..."
Cutler and Charlie are also working to develop a broadly-accepted and definitive methodology for ERoEI, Energy Returned on Energy Invested. I will keep you all posted on developments.
Dick Lawrence
ASPO-USA
http://geopubs.wr.usgs.gov/open-file/of00-320/ and click on the PDF document.
The latest cite is in 2000, so it appears this was written a while ago.
Quoting from the poster:
Q! What's THE BIG ROLLOVER?
A! It's when the demand for oil outstrips the
capacity to produce it.
Q! Wouldn't it be better to get started solving this
problem before THE BIG ROLLOVER is upon us?
A! Absolutely! There's no substitute for planning and
implementing that plan before the oil shortage
occurs. We can turn a lose-lose situation into a
win-win situation if we start now.
Q! What about Saudi Arabia?
A! Saudi Arabia has about 3 million barrels a day of
excess production capacity (Figure 3, G).
Depending upon world oil demand, it could last
a few more years, but then what?
Q! So when is THE BIG ROLLOVER?
A! Nobody is sure, but those willing to forecast say
somewhere between 2003 and 2020 (Table 2, J).
Most everybody seems to agree that it will most
likely be within our life time, and possibly
quite soon (Figure 1, K)!
I just read the Farrell et al. article article in Science retrospectively analyzing studies of ethanol as an energy source. Doesn't anybody find the graph showing that gasoline has a negative net energy completely bizarre?
They were comparing the fossil fuel inputs to gasoline production and ethanol production. In order to get a negative net energy for gasoline (-0.2 MJ/L), they subtracted the entire energy content of the input petroleum, which is, of course, a little more than the energy content of the refined gasoline you get out the other end (34 MJ/L).
Then they compare this negative net energy with their calculated positive energy for ethanol (e.g., 6 MJ/L) and criticize Pimentel for not accounting the other non-ethanol outputs of corn ethanol production.
Now if I was doing such a study, I would try to measure the amount of fossil fuel inputs to drilling, transporting, and refining oil and compare that the the energy you get out of the gasoline. I wouldn't subtract out all the energy you get out of the gasoline as 'not counting' and lump it in with the much smaller subtraction of the energy cost of refining, which is certainly fair to subtract!
I think their point is that by using some fossil fuel to plow fields, you can harvest solar energy via ethanol and get a little more total energy than if you just burnt the gasoline directly. That's OK, if you believe calculations and assumptions. But phrasing things they way they did in a generalist journal like Science is sure confusing and misleading for the general scientific reader, much less the general public.
(disclosure: I knew Dan Kammen, the senior author, when he was a post-doc with Christof Koch when I was at Caltech, and I like Science since I have two publications in it :-} )
In that situation, I don't care that I have to put more energy into the process than I can get back out of the product -- I'm willing to "pay" to convert the energy into a stored form that is better for the application.
As I can't believe they were so stupid as to confuse the efficiency across a refining process with primary energy production EROEI, I can only conclude that this was a deliberate deception intended to make the ethanol from corn scheme appear far more attractive than it really is.
You've really got to watch some of these people!
For instance if you calculate the cost of lead acid EV car batteries per kilometre (deep discharge ~ 1000 times lifecycle), its close to the price of the fuel you'd burn in an infernal combustion engine to go the same distance (thats not including the price of electricity to recharge it). So transportable electricity (frozen in battery chemistry) has quite a premium compared to the stuff that comes out of the little holes in the wall.
Another example is solar powered oil wells, a way of converting low density energy into high energy density stored energy:
http://www.thebluerepublic.com/images/post/solaroil.jpg
(see bottom of this page for the image link and others).
IIRC, lead-acid fails in part due to structural degradation. One recent development is the announcement of carbon-foam batteries which replace most of the lead with physically and chemically stable carbon. No idea if that will boost the cycle life, but it can't hurt.
http://peakoildebunked.blogspot.com/2006/02/229-oil-in-greenland.html
The USGS estimates that offshore Greenland has the 2nd greatest potential for undiscovered oil in the world (the greatest is the Iraq/Iran region). Little exploration has yet been done there, but the rock formations are similar in size and structure to the North Sea.
A big problem is the sea ice in the region, which interferes with shipping and other operations. If only there were a way to get rid of all that pesky ice! Luckily Stuart has some ideas along those lines...
THE WORLD
Attack Jolts Iraq Oil Business as Civilian, Troop Tolls Rise
By Solomon Moore, Times Staff Writer
BAGHDAD -- A mortar attack set ablaze a major petroleum facility in the northern city of Kirkuk on Thursday, stopping refining at the plant and further damaging Iraq's beleaguered oil industry.
Iraqi oil workers were still fighting the fire late Thursday, and U.S. officials held high-level meetings in Baghdad to assess the damage. An Iraqi executive with the North Oil Co. called the incident the "most severe attack we have ever faced on an oil installation." The mortar rounds also hit an important pipeline to Turkey that was already out of commission and was being repaired, the executive said.
I asked whether Shell had done any detailed modelling on this question, said Strahan. Mr. van der Veer replied that his argument basically was that the world will not [arrive at a peak oil situation]. He said that peak oil is correct as applied to regional areas of production like the North Sea, Texas or the Lower 48, but does not apply to the world as a whole.
Van der Veers actual reply to Strahan on Shells webcast was That is a great question it is much more complex than many people think. That (peak oil) is not how we will go. Because peak oil theory itself is correct, if one takes easy oil close to the markets. If you look at West Texas the oil has gone, or even the North Sea but if you look at oil sands you don't know where the peak will come. if you think about coal there are huge reserves. If you assume we can develop clean coal technologies, [then] there will not be one peak.
So there is no one peak. There will be many peaks [for different fields, regions and fuels] and they will be in many different time frames and how that will develop, we don't know.
We think [for prices] that it is prudent for our company to evaluate projects in a very [many] differing pricing scenarios.
this was extracted from right here
alright, whats the "low down" on this? Is this just a type of senior executive Spin?
He says there is No one peak, there will be many peaks...etc
But, this is one GLOBE, and we all use oil. And while this may be true to specific regions, this planet is more inter-connected today than it was 30 or yrs ago or more.
Is he saying the truth? bending the truth? in denial?
Confusion is starting to set in!
Oil company reserve writedowns,
Shell
http://www.phillyburbs.com/pb-dyn/news/24-04192004-285161.html
Repsol
http://www.bloomberg.com/apps/news?pid=10000085&refer=europe&sid=aXJ5C9Tzy8bA
El Paso Corp.
http://blog.kir.com/archives/000118.asp
ChevronTexaco
http://www.chevron.com/news/press/2002/2002-01-29.asp
Kuwait Oil
http://www.futurepundit.com/archives/003232.html
And this is a change of subject, but nontheless interesting.
US Government Uses Same Enron Accounting Practices
A substantial part of the Justice Department's criminal cases against former Enron executives Jeff Skilling and Richard Causey involves their complicity in Enron's liberal use of "off-balance sheet" partnerships that Enron used to shift risk on debt that otherwise would have diluted Enron's net worth. In an ironic twist, history professor Niall Ferguson and economist Laurence Kotlikoff explain in this outstanding paper
http://econ.bu.edu/kotlikoff/Going%20Critical.pdf.pdf
how the United States Government uses the same off balance sheet liabilities in accounting for its Medicare and Social Security liabilities to mask the true financial condition of the Government.
The only proof of peak-theory exists in a vacuum. The truth is nobody knows how a peak will "form" as far as a global-hydrocarbon-economy goes. It is all pure speculation. Nobody wants to admit this. Especially not Kunstler. Speculation based on speculation. No reason alot of people can't be right, just unlikely they will be as right as they say.
Ouch!
Loop here.
These things look like Hurricanes these days. I have never seen a Westcoast storm spin this fast. The damn thing has an eye for heavens sake!
90+ wind expected.
a simple solution would just be to code the page so that no one but the person who made the original blog entry can edit the whole thing and preventing anyone else from editing.
you post a mistake, too bad.