No conclusions, just the January numbers and some concern

Last Saturday Stuart commented on the plateau that was developing in oil from both OPEC and non-OPEC. Platts has drawn attention to the January numbers, and in the EIA version overall OPEC production is down some 530,000 bd, with drops of 5kbd from Indonesia; 50 kbd from Iran; 250 kbd from Nigeria; 100 kbd from Saudi Arabia; and 150 kbd from Iraq.  There was an increase of 25 kbd in other liquids. In their Short Term Energy Outlook the EIA is now projecting that about 255,000 bd will remain off-line in the GOMEX going into the next hurricane season, which starts in June. Given that loss, and the intention to start to fill the Strategic Petroleum Reserve by another 300 million barrels, this could further tighten available supply this year, when considered with the EIA anticipated overall energy demand increase of 1.4%, for both this year and next.

The continued decline of production from Iran has been projected by Jean Laherrerre to continue forward to an ultimate recovery of 120 Gb. They have currently produced about 56.6 GB of that. (Interestingly instead of using the data from 1930 onward, I took production from 1914 onward and this gave a slightly earlier and lower value for ultimate production of around 100 GB). And although there has been some increase the reported decline in production of around 400,000 bd/year will likely make the need for those nuclear reactors more real than some would currently care to admit.

Of the declines in production that the EIA report, the Indonesian, Iranian and Iraqi are most likely to remain down, and it will be interesting to see what the Saudi's do in regard to increasing production to maintain overall OPEC numbers.  Given all the debate at the last meeting where they decided to maintain current production, the numbers for this month might be even more revealing.

Meanwhile in Russia, where the sun will be out at minus 17 C tomorrow, there is debate as to whether the gas from the Kovykta field will be used domestically or sold to China and South Korea.  With a change in ownership of the company to give Gazprom a controlling interest, the likelihood, given recent weather, may be that it will now be used domestically, with China getting supplied from Sakhalin Island. At the same time more old Yukos assets seem to be transitioning to State control.

In debating the relative future production from Russia, Stuart has pointed to Grace's conclusions that State planning had neglected many of the smaller fields, and that these might well come more rapidly on line as smaller companies flourished in the post-Soviet era.  But if we are moving back to the larger, effectively State-controlled, company model, then perhaps that conclusion may be starting to become a little optimistic.

Thank you for all this good news. I plan on posting on Russian oil reserves and E&P very soon. Not that I think, at this point, that what I am going to report will improve the current "happy" situation world-wide much. And, aside from the stable situation in Iran, I think as I said here, Nigeria is looking very, very good as well.

2006 is starting to look like a big year, HO, don't you think?

Sometimes, I don't feel like I can get to the appropriate level of sarcasm, you know? Events overwhelm my ability to express cynical dark humor about them. So frustrating.

Dave - please don't post on Russian reserves. I don't doubt your research and information is good, it's just that the last thing the world needs is anything about reserves.

Please, please, please spend your time, energy, and much needed (and appreciated) intelligence on PRODUCTION.

As you well know, no matter what you say, Al-Naimi will just throw another 100 Billion Barrels your way. The more importance you place on Reserves vs. Production the harder those barrels will feel when they hit you. Do like me. Stay out of the way. Focus your guns on the real target. Kill the head, the body dies. Production is the only thing that matters.

Couldn't agree more with you OIL CEO but Russian reserves and their production levels are conflated--one can't post about the one without posting about the other. They are the 2nd biggest producer in the world. Since Westexas has thrown out the gauntlet and says that they are about to crash big time soon--this means that non-OPEC production is crashing soon--I find it necessary to do the post. I would not talk about their reserves without also talking about their near-term (next 5 years to 10 years) production capabilities and beyond.

Even ExxonMobil admits a non-OPEC peak by 2010. Russia represents almost 20% of that daily production. We all really need to get as clear as possible about this. It affects the peak in a big way. It has an effect on Stuart's "long slow squeeze". It is the most important question affecting near-term peak oil conditions I know of (outside the possibility that Saudi Arabian production just might crash as in Matt Simmons' predictions). I believe as of now that their production capabilities are hampered by internal political & economic policies although their actual URR may be quite robust. But this is a different question than saying that they simply have little recoverable oil to produce--which is the position Westexas has taken.

I do appreciate your concerns.

best, Dave

I concur.

As you said - and this is extremey important, people -

"We all really need to get as clear as possible about this."

Here is the EIA graph of monthly Russian production changes:

These are not production levels but changes in production (I'm not sure if they are from the year before or the previous month).

Note that if you had looked at the graph in July 05 (before the last 6 months' readings) and extrapolated forward you would have expected production growth to continue to decline and turn into a production decline (bars going below the axis instead of above). You would probably not have anticipated the turnaround starting in August with production increasing faster again.

It's hard to predict the future, and drawing graphs and extending lines forward is a risky proposition.

It must be growth over a year. If it were month by month growth the total growth would be the sum of the bars which I make about a 24mbpd increase, 28% of world production.
Let's just hope it won't be the big year.
"2006 is starting to look like a big year, HO, don't you think?"

Apparently, not as big as we might want. According to this BusinessWeek article:

we're already running up against supply-side barriers in our attempt to move to a differently powered society.

"The raw material shortage has slashed growth for the [solar panel] industry from more than 50% in 2004 to a projected 5% in 2006."


Tell me about solar energy. According to Wikipedia the total world installed solar panels have peak power of 2600 MWt. With (realistic) utilisation of around 15% this would yield half of the production of a standart nuclear reactor... some contribution for $13 billion worth of investments, isn't it?
Photovoltaic energy is at the beginning of a hockey stick market development. Many big banks have given a lot of money to this industry. Production capacity is growing swiftly.

It is normal for every product cycle, that in the beginning there needs to be investment. The rest will do economics of scale and the rising price of other "fossil" or "atomic" energy ressources.

This market is a good investment, probably one of the best which can be done at the moment. matthias, berlin

Anything with a 7 years of energy payback time is a bad long-term investment. Yeah, it is good now while the fossil subsidy is cheap. But not in the longer term. 7 years naturally sets the pace of doubling solar energy at more than 7 years, because if it is faster or equal to it you will get a negative energy yield from what you are investing in the meantime.

Now if solar energy doubles every 7 years from now, by 2054 it will provide 0.24% of the total energy we use currently; In the meantime the society will be at a net energy gain of 0 (zero, naught, nada). What will happen is, that the monetary subsidies you just mentioned will cover the cost of the fossil fuel energy we incorporate in building these solar panels and investors will be happy. But will this be rational, if I may ask?

I suspect with time/technology evolution energy payback time will go down but unfortunately PO is already at the door.

Why not use the cheap and stupid fossil energy that we have now to purchase a stable energy source like solar?

Suppose that the rate of energy price increase / energy inflation is going to be at or above 15%. This means that energy prices double every 5 years or less.  I think this means it is less than 5 years for the solar to reach economic/energy break even. After that, as energy prices continue to escalate, second and third payback come even faster.

With money so cheap now, and with knowledge of coming energy price escalations due to Peak, investing in a fixed cost energy system based on solar seems like a sure win. Everyone should be doing it!

My opinion is the Photovoltaic will "never make it" as a major source of grid power.  Wind, geothermal, hydroelectric (including microhydro), and limited biomass, yes.  Reflecting mirrors in desert, maybe.  Solar water heating is economic today (as well as PV for isolated villages, etc.)  Fuel cells are another technology likely to be stillborn.

What other technology has taken over 40 years from first invention to workable marketplace economics ?  Dr. Benz to Model T, discovery of double helix in DNA to first GMO crop,  E=MC2 to atomic bomb, elelctricity, etc.  And we live in a much more technological world with better communications, etc. today. And still the future of PV (and fuel cells) is "tomorrow" as is was in 1974 when it was the savior then as well.

Too much time, too much R&D and too little to show for it. I have written off PV and embraced wind, hydro, geothermal and some biomass as the workable alternatives.

Thank you for an excellent post.
Another issue with PV solar little noted is that they wear out.

The electrical output starts declining as soon as they are used (rate is related to heat exposure I believe).  Earlier models were at well less than half output in a typically application in 20 years.  Don;t know about latest versions.

Still, not a permanent solution.

Warranties on current PV panels are running 25 years, meaning they'll produce at least 80% of rated output for 1/4 century.
How many atomic breeders do work succesfully in the world? There was really a lot of research and money for this technology.

OK, photovoltaic cells are - for the time being - a more cost intensive energy source. I agree with you. However already today, where is no electric grid, it is already cheaper. Especially in these rural areas, many people still depend on kerosene lamps or generators for light or electricity.

Even energy predictions from companies like Shell show in 50 years a very large percentage of solar energy in use. Writing off is as far as I can tell much to early!

Another way to harness solar energy is here

Solar Power for the Global Village

Jürgen Kleinwächter has developed a model for solar energy supply to an African village with 50 inhabitants, the "Solar Power Village". Without photo voltaic it produces energy for cooking, pumping water, wheat milling and electricity.
Under the roof of a 30-40 sqm sized green house - this size may not be adequate for European conditions - a row of fresnell lenses are mounted and follow the movement of the sun. The fresnell lenses focus the sunlight on a focal line. Exactly in this focal line vegetable oil flows in blackened copper tubes that are coated by transparent glass tubes. Kleinwächter: "Vegetable oil is available everywhere in the 3rd World. Here the oil serves as a carrier of heat. As the oil flows through the concentrated energy zone it heats up easily to 220°C."
The green house is covered by a special layer. This allows more parts of the sunlight spectrum (especially UV) to pass through than usual layers do - supporting the growth of vegetables underneath and making the layer last longer. "By the way, the vegetables are of a very good quality - you can not compare it with the usual products from green houses", Kleinwächter declares. "The temperature in the green house is as comfortable as a day in spring, and allows the growth of salad even in the summer."
The special layer belongs to the few parts of the Solar Village that can not be produced in regional work. From the green house the oil then flows into a heat storage.

Not so fast, The National Renewable Energy Laboratory has been working with 'quantum dots' of Lead Selenide. According to the article at:

the lead selenide quantum dots they are working with could theoretically acheive a 65% conversion rate. The best silicon cells are at 21.6% and use a positive ground. Roughly a factor of 3.

Dr. Nate Lewis of Caltech has been crunching the numbers with respect to quantities of primary fossil fuels, oil, gas and coal. He's compared various alternatives and what they would mean to area useage such as the area to grow ethanol from corn to replace all 3 types of fossil fuels. Around 57 minutes in, he calculates how much PV it would take to replace all three. Interested? Here's the URL:

I calculated that I could carpool, on average, 30 miles round trip every other day and power the trip using PV from my roof.
Your figure of 7 years for energy payback is well out of date. There has been some staggering progress recently with stacked junction cells in concentrator systems

Boeing-Spectrolab announced a record of 39.0 percent efficiency at a concentration 236 suns at the European photovoltaic conference in Barcelona, Spain. Arrays of tiny cells (2-3mm diameter) under individual concentrators allow the bulk of the incident sunlight to be absorbed while covering only a fraction of a percent of the area with semiconductor. The small size of the cells spread out on a heat dissipater allows the cells to run as cool, if not cooler than normal non-concentrator cells.

The system does require a mechanical tracking system and has almost no output in diffuse sunlight but perhaps surprisingly trackers have proved very trouble free. Since almost all other alternatives have moving parts operating under much higher stress levels it is  illogical to to exclude trackers on the basis that they have moving parts.

A study "Energy payback time of the high-concentration PV system FLATCON®"  by Gerhard Peharz and Frank Dimroth of the Fraunhofer Institute for Solar Energy Systems  Freiburg, Germany showed that a German build system installed in Spain had an energy payback time of 8 to 10 months including the energy of transportation, balance of system and system losses.  The main energy demand in the production of such a high-concentration photovoltaic system was found to be the zinc coated steel for the tracking unit.

With such payback times investment at zero net energy gain for about 11 years (about the time it takes from planning to full power on a nuclear reactor) yields a 10,000 fold increase in installed capacity.

Consideration of how much investment it cost to get to this point is irrelevant to considerations of whether to go forward on this path.

Like many alternative energy systems, solar energy is intermittent and unpredictable and there is no low energy investment storage system for very large scale electrical energy storage. However a recent study of alternative  energy in the UK showed that in the UK a suitable grid connected combination of alternative sources (solar, wind tide and wave) geographically dispersed could provide 30% of electrical generation with only a couple of percent extra conventional generation to supply back-up. The UK is better provided with such sources than many countries.

30% is not 100% and even with electrical powered trains and trams this still leaves an enormous gap to be filled after oil peaks that is not easily filled by non-liquid fuels but it is foolish to reject a partial solution just because it is not a complete system. If Stuart is right and there is a slow squeeze or the peak is not till 2010 as ASPO suggest it might make the massive adjustment required just very unpleasant and not a social collapse.

Why not reject it if there are better alternatives like wind?
IMO PV-s have their usage in remote areas for example, but wasting billions for connecting them to the grid is a luxury I don't agree with.

And BTW you can build nuclear plant for a year or 2 only. The rest is for licensing, overcoming NIMBY-sm etc.

Because wind is intermittent like solar energy but the two tend to have a negative correlation in availability in many climates. The greatest limitation of alternative energy sources is the lack of large scale energy storage. The cost and finite cycle life of batteries multiplies the cost several fold.

Connecting intermittent sources to the grid allows you to use the grid as a very large battery pumping power into the grid when there is a local surplus and taking it out when there is a deficiency at almost perfect efficiency. While the contribution to the total power use is small compared to the total is small this works well. Which is why the bulk of photovoltaic installations in Japan, Germany and here in the UK are grid connected. It helps that all these countries are densely populated so that grid losses are a small fraction of power use.

The problems arise when the percentage of intermittent sources rises. Spinning reserve has to be maintained to cover the potential drop out of the source. With a single source this is a grave problem especially if that source is locally concentrated. This problem can limit the percentage of alternative energy to about 15% before you have to add spinning reserve megawatt for megawatt of possible supply.

The study that I mentioned found that a crucial element in allowing the percentage of alternative energy to rise was diversity of sources and geographical dispersion to even out weather variations across the area.

The economics of photovoltaic generation is improving with time and has a potential for far greater improvement that can be hoped for in wind generation. Improvements in the economics of wind power tend to rely on ever bigger turbines leading to greater concentration. Photovoltaic power can be distributed at little cost penalty. The fact that photovoltaic power it is now cost competitive in Japan gives hopes that it will be elsewhere in the future.

When peak oil comes we will be very short of alternatives that do not greatly worsen global warming at a time when we desperately need to reduce our output of carbon dioxide. If we wait until then to try and develop a range of alternate sources we will be in deep trouble. Photovoltaic technology is not an expensive luxury but an essential part of what we need to salvage some reasonable standard of living for our children and grand-children.

Few nuclear power plants have been physically constructed from first earth breaking to full operational power in less than three years, four years is more normal and five or six years not unusual. The planning, licensing and local objections are part of the process and are not going to go away.

I accept that we will have to rely to some extent on nuclear fission but we cannot build a wall around the west. The crisis will be world wide. If developments in Iran cause you concern, read the previous post about Nigeria where 15% to 20% of the oil goes missing and internet fraud is said to be the third biggest earner of foreign currency after oil and cocoa and think about nuclear power in Nigeria.

I'm about as much afraid of the nuclear power in Nigeria than for example in Zimbabwe. The two years comment was based on a comment from Whitehall that the construction of nuclear plant itself, absent production bottleneck/unexpected hurdles takes about 2 years (he/she is actualy in the nuclear business; I follow this information by memory and would like to excuse me if I'm wrong).

IMO in future something will have to provide for those 85% that can not be generated by renewables, and I'd rather see nuclear than coal power stations doing that.

A possible large-capacity energy storage, leveling out production with demand are the hydro power stations acting as pumps during excess production and as generators during shortages. Unfortunately these have their own issues, so this usage will probably be limited.

In principle I tend to agree with your diversification argument but the cost per kwt installed capacity is so huge that I tend to thing that energy storage solutions like the one above would be a better investment. Even in the solar leaders - Germany and Japan the installed capacity ratio wind/solar is above 5, with solar having less availability (~10-15%) than wind (~20-25%). In this situation you are effectively putting an egg to counterweight a water-melon. In reality the slack is taken by some NG-fired station.

I know the solar idea is intuitively more appealing for the future; but somehow I think that the time for energy experiments is starting to run out and we're going to start picking those ones that actually work.

Of course if someone invents a 25% efficient $0.50/watt solar panel tomorrow or next year I'll be happy and even buy myself one. I'm giving the appropriate credit for the efforts in this direction, but it is not worthed the billions we are spending to buy expensive low-efficiency solar panels now.

"Islanding" is a VERY serious problem for distributed generation that has, AFAIK, not been seriously considered by advocates of distributed generation.

Basically consider a rural branch power line.  Some small distributed generation on the line.  At some time, the local generation exactly matches local consumption and there is a section of line with zero (or very near zero) amperage.  An electrical island has been created.

By happenstance, this island effect persists for a "period of time".  A period long enough for the frequency of the island to shift a very small bit.  Say 1/200 of a second. And then when the load and generation no longer equal, a high energy conflict results between sine waves not in sync.  BAD !

I agree that islanding is a serious issue for distributed generation, but what is described is not an island. Although there may be zero current in the line, the line will still be energized (has alternating voltage) so both ends of the line will be electro-magnetically coupled (i.e. in synchrony).
I noted that it took TrustPower of New Zealand just 12 months from ordering till in service for an expansion of an existing windfarm (slightly more than doubling).  Same type, just more of them.  Quite quick IMO !  And some of those new wind turbines would be in service several months before the job was completed.

Nuclear Power plants cannot be built in just two years (hard pressed to do a coal plant in that little time).  Inspections and paperwork/quality control just take time.  Supply chain issues develop (alternative suppliers are typically not allowed like in a convential plant). Testing alone takes over 6 months after completion of construction for a nuke (safety first !)

Also, in the US, overtime is limited when building a nuke.  (Mistakes happen when people work very long hours).

The energy payback for the Vestas V90-3 MW is 6.8 months under "standard Danish conditions", up for 9 months for the Vestas V80-2 MW.  Oddly onshore & offshore gave similar energy paybacks.

So seven years for PV panels is "underwhelming".

There IS a large scale energy storage system for electricity.  It is called pumped storage.  A bit better than 3 out for 4 MWh in.  Hydro turbines also stabilize the grid and improve power quality in both motor and generator mode (something both wind and PV need).

In theory, one could run a stable grid with a combination of wind and pumped storage only.

Thanks for the tva link.  Such a simple and great idea for a storage facility.
Anything with a 7 years of energy payback time is a bad long-term investment.
But you aren't talking about PV.

As of 1999 (check the references), crystalline PV had a payback of less than 3 years and amorphous, right around 3.  Improvements in the pipeline were expected to reduce that to as little as 1 year.

I expect that the cost of silicon has pushed the industry a long way towards that already.  It's been 5+ years.

PV comes nowhere near the payback time of wind, but PV is improving faster and has much greater potential.

Thanx for the link. The 7 year payback was from the WIkipedia link.

The numbers you quote are for thin-film PV modules, but these are details. What I don't see included in the study are the energy costs for the inverter and the batteries (if needed) which would be quite significant especially for small residential panels.

The core of the problem is the low efficiency/yield of PVs. A single watt of rated capacity (costing currently around 5$) on average yields just about a kilowatt per year. Recently the industry has succeeded in reducing the costs, but this mostly at the expense of efficiency which has not been improved much during the last 30 years.

I agree about the potential of PVs, but realistically how much is the top of it? 15% efficiency and 2$ per watt? Some gain. I suggest solar dishes as a better direction to go.

In my link above concentrator cell efficiency of 39% at cell level and 30% at system level are obtainable now and energy payback times of 8 to 10 months are available now.
The hybrid monocrystalline/polycrystalline array that has been on my roof for two years is 17% efficient at system level.

I think you mean that 1 kilowatt hour per year is obtained from 1 watt rated capacity.

That's what I meant thanks for the correction.
I am only saying this again because other people here aren't quite (solar dishes-- getting close).  NASA  tells us (look for space stirling power) that we have right now stirling engines that have heat to AC power efficiencies in the mid 30"s and that are intrinsically cheap as dirt ( dirt here being ordinary steels).  So if we are discussing solar, we should keep this in mind.

And don't forget that those very same stirlings can run on biomass or other fuels when the sun is not there, like 70% of the time.

Sure, there are always the ifs, ands and buts.  So again repeating myself, if we really want to know what is what, we need a big contest, with a prize big enough to attract serious players as well as all the monomaniacs like myself, to bring out ALL the ideas to the field (thermal machines, quantum PV, swamps of biomass fed by human poop, and all the rest), and we will have a chance to get the truth.

Sun and Wind are increasing in capacity and decreasing in cost at double digit rates. Nuke and Coal are increasing in capacity and decreasing in cost at single digit rates. The trend is not going to reverse.
Oil and Gas are running out and prices will go up till they are replaced. Dam, Geo, and Tide are mostly already developed in the OECD and are rapidly being developed in the rest of the world.
Wave is still experimental. Wood is at capacity.
The USGS says that there are 30,000 MW of undeveloped hydro in the US (most with low capacity factors and many "run-of-the-river" sites).  Much more in Canada.

Hydro that coudl compete with $2 natural gas has pretty much been developed, but more is out there !

Mainly smaller units.

Lots of sites are possible but not economic because the sites use up valuable real estate. By definition dams are built on waterside areas and those are the most valuable real estate available.
Dam reservoirs are not attractive for residential use if the water level is allowed to go up and down, and run of river (where the level is not allowed to go up or down) gives power in the spring melt instead of in the cold and hot parts of the year when energy demand is peaking.
Not letting the level go up or down also means you can't use it for irrigation in the dry part of the year, or for navigation by deepening the water for barge traffic, or for flood control by emptying it during the summer to absorb a lot of water if it floods.
Which is more important than it sounds. We had a lot of full dams in California a few years ago. We had the dams at 96% of capacity and the farmers wouldn't let them spill any water because they wanted as much irrigation water as possible. Then we got a "pineapple express" storm from Hawaii and a billion dollars worth of flood damage in a week from overflow from the dams once they got to 100%.
The dams also put a lot of CH4 in the air the first few years after they are built as the biomass decays. Might as well go with coal or nuke.
Sure, we'll build some, or rehab some old ones. Might collectively equal another nuclear power plant. Or two or three. We should build as many as are economic. Keep in mind that as Alaska builds up they can use more power, and they have most of the undeveloped hydroelectric power sites where the reservoirs wouldn't be flooding housing developments. And it's not like Alaska has a problem with a little global warming methane in the air.
Micro and mini hydro, WKW, minimal damage of the kinds you mention, plenty of scope. All that is needed to make it take off is elimination of barriers (mostly financial) to connect to the grid and perhaps advantageous loans to help with implementation costs. Treat as distributed power stations, I'm sure it would be more cost effective. Heck, even the UK queen is having one installed in the Thames to power Windsor Castle.
Ronald Gotz of the German Institute for International and Security Affairs published this Working Paper in Dec 2005. "Russian Energy and Europe" Given what I've seen here, I'm suspicious of the production forecast page 9. Any comments?
Thanks for the link. Obviously, some of those estimates are way too high.
It increasingly appears that we will be caught between a rock and a hard place because the US did not continue Pres. Carter's energy policies.  The lost time to make changes appropriate to mitigation and powerdown can never be recovered, and Bush's feeble efforts are only making things worse.  Congressman Roscoe Bartlett's latest speech linked at argues for conservation and a combo APOLLO-Manhattan Project effort to prepare for what lies ahead.  Until our leaders listen to Bartlett we are just spinning our wheels.

I fear the Hubbert Downslope will be very steep, not only due to natural depletion from Geology, but political and military moves that will make many oilfields too expensive for most consumers to buy the finished products.  Additionally, I expect the GoM to get hammered every year from Hurricanes making many efforts uneconomical. This sad trend combined with the rising effects of global warming and overpopulation will make most of the American Lifestyle gradually go extinct.  The light at the end of the tunnel is an onrushing train.

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

Bob, I've never responded to one of your posts but I've wanted to make an answer to your question "Are Humans Smarter than Yeast?" I must say that this is complex and interesting question. On the one hand, yeast can't make a Mozart symphony or make a cellphone. On the other, humans breed out of control and seek to expand their ecological niche to whatever maximum they can just like yeast. So, in answer to your question, I find that "yes and no" is only the answer I can come up with.

Since Mozart seems not so important at the moment and, on the other hand, despoiling and overpopulating the planet is what's actually happening, I supposed I am forced to say, as of now, that by and large it looks like humans are no smarter than yeast but have some idiot savant talent that creates some interesting things but changes the underlying dynamics not at all.

I've been meaning to tell you this before but now seemed like a good time. But there is a big caveat. Not all humans are only as smart as yeast. There are a lot of us (a small minority, I know) that are definitely smarter (more wise) than yeast. Unfortunately, to paraphrase Star Trek and Mr. Spock, the efforts of the few do not outweigh the interests of the many.

best, Dave


Are you in the small minority of smart people? What about me?

I think if you interviewed people you would find out that they all think they are smart but most everyone else is stupid. It's very easy to sit around and think you are better, smarter, or purer than everyone else. However, the reality is much more complex.

I tend to agree with most of what you have said in the last two threads and before. But I think it is an arrogant fantasy to think that we are part of some enlightened elite and rest of them are just ignorant sheeple.

I agree with you Jack, but somehow I understand what Dave says. Have you noted how other people react to Peak Oil and the possibility of Civilization Collapse or Crisis?

I have given this subject to know to a lot of other people, some of them brighter and more successful than me. But none have to this day fully understood what it means, and its implications.

Sometimes I think I have some sort of psychic pathology or than impels me to view it the way I do. Or maybe that this Peak Oil thing is some sort of enlightment (you know a "Close Encounters" thing).

Then I go back to numbers and graphs and understand its all math.

Actually, I can see both sides of this as well. And Dave isn't the right person to pick on as he was merely commenting on an earlier comment. I do think the yeast question is provocative and agree substantively with what Dave said.

However, as I have said before, I find much in the optimist (Cornocopean) camp is just a mirror image of the pessimist (Apocolypicon?) camp. Both seem to be driven by a near religious fervor and utterly denounce the other team as morons, evil, or "in the pocket" of some nefarious entity.

Maybe I am naive, but I tend to think that we are all smart sometimes and stupid at other times. We may have great insights on peak oil, but be ignorant on some other topic that may be just as important.

I guess my biggest problem is with those who just blurt out bold assertions without evidence, then claim that anyone who diagrees is stupid or has bad intentions.

Many of the fact/analysis-based posts here (including some by Dave) have helped me to change my mind or see things in a new way. I think that of we treat each other as intelligent people who are all here together trying to learn, we will reach the best result. If we act like we have some secret well of knowledge that makes us better then those idiots who deign to think differently, how will we make progress?

Maybe in the end everything have said on this site will be proven wrong and I will be shown to be "stupid". If so fine with me. It wouldn't be the first time. And if anyone wants to call me stupid, I'll agree with them (sometimes).


Excellent post.  It's somewhat surprising how bold some peak-oilers are with their predictions, given the long history of such predictions being wrong. It's equally surprising to hear others state that running out of oil (or, rather, an inability to continue increasing oil production) won't be a big deal, and that the market will provide whatever we need.

IMO and my experience, the truth almost always lies somewhere in between the extreme viewpoints.  I, too, have learned a lot from this site.

With all due respect, my reading of the history of ideas suggests that the truth almost never lies between two extremes. The truth clusters around one extreme or the other. Examples:
Aristotle proved with elegant observation and logic that the earth was a close approximation to a sphere. Most people thought the world was flat. Was the truth between the extremes?
Kepler showed that planets revolve around the sun in approcimately elliptical paths. The official position of the Roman Catholic Church (and common sense, what everybody knew) was that the sun and the planets revolve around the earth. Was the truth between the extremes?
Galileo looked through his telescope and saw four moons of Jupiter. Official authority denied this possibility, and the nearly blind old man was shown the instruments of torture to get him to retract his extreme position. Was the truth between the two extremes?
Darwin developed a theory to explain the change of plant and animal species through time. Others claimed that species are immutable. Was the truth between the two extremes?

I could go on and on and on with examples. My point is that the scientific truth is almost never between two extremes. Either one extreme or the other is approximately right, and the other extreme is entirely wrong.

I'd be interested to hear of any specific counter examples that you care to cite.

I'm just the Devil's advocate here:

Neils Bhor's Quantum Mechanics vs Albert Einstein's Geral Relativity

Neither Theory works universally for the very big or the very small.

As for Peak Oil, my felling is that there's no mid point: we either do it big time or fail big time.

But as Jack says, the content between Early Peakers and Late Peakers might come down to religion. None know it for sure.


I would guess that the major transformational events that make history tend to be those that were extreme in one way or another. While there may have been many more that wound up in the middle, we didn't hear about them.

I think this one is too hard to prove, but would also guess that it follow a bell shaped curve with most in the middle, but in many cases those on the extremes do prevail. Thousands of people throughout history have said the world was coming to an end. They were all as smart and convinced as we are here, but they were all (with a few exceptions such Easter Island) wrong.

However looking an issue in retrospect is not the same as looking at the future. Yes, people have cried wolf and saved villages, but others have been equally certain and been wrong. I think it is safe to say that if anyone claims to be able to see complex issues in the future with certainty, they are wrong.

Kassandra was always entirely right and nobody ever believed her. There is enormous truth to be found by reading classical literatures, including that of the Old Testament.

Lysenko was entirely wrong and other geneticists right.

In regard to general relativity vs. quantum mechanics, it is too soon to say for sure, but it seems likely that the "theory of everything" will show that general relativity is entirely correct and that Einstein's intuition about quantum mechanics is correct, namely that there is a deeper truth behind the predictive power of quantum theory, and that a theory will emerge to embrace and subsume both general relativity. Indeed, Einstein spent the last forty years of his life trying to do exactly that, but he failed. However, with new data coming in in huge volumes and exciting new anomalies noted several times a year, cosmology and physics are really very exciting places to be right now. BTW, one reason I'm deeply suspicious of the ultimate truth of quantum mechanics is because it is "ugly." I mean, renormalization . . . talk about fudge factors!

More examples: either plate techtonics is entirely correct or it is not. There isn't any "moderate" position here.

Either abiotic oil exists (possible but quite unlikely) or it does not.

BTW, I am not a complete skeptic when it comes to abiotic methane. There is a heckuva lot of methane in the solar system, and most of it did not get there through biology. It is entirley possible that Gold's "outgassing" hypothesis is correct, and though I am in a minority here, my humble opinion is that the jury is still out on that questions. I am an enthusiast for digging very deep holes. How do we know what is down there until we look?

Note that in things such as law courts, the actual truth is very often somewhere in the middle of what the opposing attorneys argue. Lawyers think that what matters is who wins the argument. That is why Socrates and Plato hated sophists. Scientists are looking for truth, not for who is more clever at swaying juries.

Another example: my reading of the history of science suggests that either the phlogiston theory of combustion is correct or it is entirley wrong. The typical case in the real world is not that the there is some middle ground, but that some perception is almost entirely true (or true within limited circumstances, such as Newton's laws) or entirely false. Somewhere you can find a lawyer or politician to argue for the phlogiston theory, but the last chemist who believed in it died more than a hundred years ago. It is not partly wrong, it is entirely wrong.

Regarding abiotic oil, there is a middle position.  That it exists, but it is only produced in limited quantities.  Trace quantities here and there might be interesting from a scientific viewpoint (and would certainly be worthy of a few papers), but that's about all it would be good for.

Thus the cornucopians not only have to prove that it exists, but that copious quantities can be found.

Not even Einstein thought that general relativity could be entirely right. Although he could not accept the way quantum theory developed he was a pioneer of the theory and won his Nobel prize for a quantum theory explanation of the photoelectric effect. He never doubted that gravitation was quantised in some way and that his theory would be superceded.
Sort of but not exactly: Einstein was convinced that the general theory of relativity was correct but was not the whole story. The famous quotation (correctly) attributed to him: "God does not play dice," is an explicit rejection of a fundamental postulate of quantum theory as it is usually stated (Copenhagen interpretation), and he never swallowed renormalization. I mean, if you think about it, how can you?
General relativity is a continuous field theory. It leads in black holes the sort of infinities that renormalisation removes and apparently causes you discomfort. Einstein was well aware of this (the infinities not your discomfort). Indeed he himself read out Karl Schwarzchild's papers showing this to the Prussian Academy in February 1916.

Many different quantum theories have been advanced. They share in common the splitting of various quantities into discrete increments. Einstein never doubted that the gravitational field was quantised and that at a very small scale his theory would be incorrect.

What Einstein objected to was that the uncertainty of Heisenberg's principle reflected an essential uncertainty of nature itself. He felt sure that there could be a perfectly deterministic quantum theory where the apparent uncertainty was just a reflection of the state of certain hidden variables such as the theories proposed by Louis de Broglie and John Bohm.

Such theories have been shown not to be possible by the experimental confirmation of J S Bell's inequalities by Holt and Pipkin and others.

With these experiments disappear hope of a local reality; the hope that there can be a single exact description of the state the world that is not dependant on any future measurements yet to be decided on. If you can understand and fully accept this renormalisation should cause you no problem.

If it looks like fudge, smells like fudge, tastes like fudge, feels like fudge, then I think it is fudge.

In this case I think the consensus opinion will be proved to be a special case of a more general case. Contrary to some reports, the jury is out, the data is coming in, and my 88 cents (Two cents, adjusted for inflation) is on Einstein.

Lysenko was entirely wrong...
Actually, the discovery of prions and gene imprinting show that Lysenko may have had something.

Just not what he said he had.

So is light a particle or a wave?
LOL, that was the right answer :)
The wave/particle thing. Newton knew that light was not a wave because he could polish glass and knew that polished glass was not flat in photon terms, and that light was not a particle because of double refraction of calcite. (IIRC)

Lynch has been a paragon of predictive ability.

And don't forget the USGS.

We all know that the interior of the earth harbors an intradimensional space where oil is being secretly produced by little men who look remarkably like Dick Cheney.

Of course there is infinite oil, infinite uranium, infinite land for food, infinite time. Gosh, haven't you been listening?

C'mon Tinkerbell. Let's leave these naysayers to their silliness. We have children to talk to who are much more logical.

Let me sprinkle you all with a little fairy dust to make you all HAPPY!!! Weeeee!! Are all feeling more positive now? Now, go buy that Hummer with the turbocharger you always wanted -- it's okay.

Good to see you're back.
JCK, the idea that the truth almost always lies somewhere in between the extreme viewpoints is one my father usually espouses, and I respect his opinions.  I've often shared it - I like to find balance and reason.  But one must be careful too - while it's often true, it's really just a mental shortcut, an integration of the data.  For things that can be quantified, one could survey thousands of people (both educated and otherwise) about it, but the reality will not move.

And in other areas, the averaging mental shortcut can get you into real trouble.  The present political situation is one example.  All you need to do is move radically in one direction, and the middle-of-the-roaders will be towed blissfully along - all the while feeling they are being quite reasonable.  It's very easy to take advantage of this thought process.

Over the last, say 8 years or so, I've been forced to abandon this method of thinking more and more.  I've have now come to regard the consensus method with suspicion.  I'm still interested to see what everyone else thinks, but I have no qualms about taking a position at the extremes, and I no longer feel as if this is riskier than assuming the average.  In my personal experience, I find forming my own opinion based on information I can gather to be more accurate than picking a point half way between the extremes.  


I do not disagree at all with what you're saying, and I do agree the taking the middle position is often a mental shortcut.  

However, given a lack of better information on a particular subject (e.g., just how well explored is Russia and what can we expect for their oil production over the next decade), often the optimistic scenario requires everything to go right (which rarely happens) and the pessimistic scenario requires everything to go wrong (which is equally unlikely to happen).  The middle of the road "guess" is therefore far more likely than either extreme to happen.

I guess you might call this a statistical mechanical view of the world.

This analysis breaks down when you start dealing with discreet political issues (e.g., should abortion be legal, should we bomb Iran), such as the ones you've identified.

the pessimistic scenario requires everything to go wrong (which is equally unlikely to happen).

Actually one of the corrolaries to Murphy's Laws says the opposite. It says that nothing will go wrong for a long while, and then, at the worst possible moment, everything will go wrong.

"It's somewhat surprising how bold some peak-oilers are with their predictions, given the long history of such predictions being wrong."

Trust me--you're not the first to notice this!

I would add that I find it amusing how often the Apocalypticons scream about how we're about to experience an event (PO) that's literally unprecedented in human experience, and then go on to tell you exactly how it will play out, with no room for debate.  You can't have it both ways--global uncertainty combined with you own personal omniscience, unless you're claiming to be vastly smarter than everyone else.

My personal view, as I've expressed here perhaps 2 or 3 bazillion times, is that PO and PNG will be extremely difficult challenges--nasty, brutish, and anything but short, to borrow my own phrase.  They will result in very considerable personal and economic pain, as well as the total destruction of some companies and possibly some entire industries.  There will be international strife, and major implications for the domestic politics of virtually every country on the planet.

But are we headed for a crash and burn of industrial civilization, with the survivors huddled in caves cooking rats over a camp fire?  No.  I've seen nothing to suggest that it will get that bad, and in my forty-something years I've seen plenty that tells me we'll be flexible and inventive enough to avoid the big crash.  Along with those devastated industries and unemployed workers will be growth in companies and jobs building wind farms, solar panels, wave and tidal installations, and improving the efficiency of existing facilities.  The human world will be very significantly transformed, but not destroyed.

We'll muddle through, with some days darker than others, for some time (10 years?  20 years?  longer?), but it will take more than PO, PNG, and our own stupidity to do us in.

I think part of the problem is the phrasing of the question.  Cornocopeans see the past history, and see that the earth rightly is very vast and does have a lot of resourses... near infinite to be precise.  Just think of the vast number of tons of oil taken out of the ground on a daily basis, and this is mind blowing (at least the scale of it is mind blowing to me).

But even if one believes in abiotic oil, unless one also believes that the rate of abiotic oil production is directly related to the amount of oil that is removed from the earth one has to see that in the long term, life on earth in this fashion isn't sustainable.

Previously some famous cornucopean won a decently publicized bet on what would happen to the price of commodities (the mentor of the guy who took the Simmon's $200 oil by 2010 bet).  And there is decent logic in the short term that commodity prices will go down.  However in the long term if there isn't a free source of stamps with upside down airplanes on them, and you need such a stamp, you'll have to locate someone who does have one (and who likely understands the rarity), and you will have to convince them to trade it for a lot of pieces of paper.  Sure, "ore" is a bit different from an artifact like a certain stamp, but if I needed 1 million barrels of whale oil be the end of the month, what price would I pay?

When 5% of the population uses 25% of the resources, it's beyond obvious that the whole world can not live as the 5% does.

But in the mean time, while we haven't yet exhausted the resources the cornucopeans get to live it up as the high priests.  We don't have an infinite source of oil; merely a near-infinite amount.  The problem is in defining when near-infinite suddenly deserves an exact denomination.

There are many peak oilers; there are those who see that eventually oil and generally easily useable sources of energy and pure resources will become scarce on earth barring some non-existant technology.  There are those who believe that, and believe that it's within a certain time frame.  And there are those who truely believe that we're at the peak now.

Stepping aside from the notion of "when" PO would happen, anyone who doesn't see that oil is not an infinite resource and with current consumption that eventually the earth will run out of pragmatic amounts of oil I must admit I think is either ignorant or stupid.  Note that one could believe that peak oil could happen, but also think that the ingenuity of mankind will come up with something at least almost as good as fossil fuels.

At this point, I think that it comes down to one's philosophy of prediction.

'Cornucopean' and 'Apocolyptic' would be the correct adjectives, I believe.
Are you in the small minority of smart people? What about me?

Nobody here is a member of "homo economicus" or whatever they call it.  We're all "sapient" ... when measured against ourselves ;-).

I for one acknowledge my "bounded rationality."

Woo wooooo woo! What is that light in that tunnel? What is that roar?

Who cares? We have important things to discuss.

Where were we?

Oh, yes. Yeast.


Yes, we need humor. That is why I post this. Even the yeast need a good laugh.

Buh-bye humans.

I think the "smarter than yeast" issue is falsely  posed. In my opinion, it's not a matter of who is smart and not so smart. It's a social issue. Science is a societal possession. But we are not yet able to use it in service of the species as a whole -- only for sectional interests. The question is whether we'll ever be able to do that, operate in a scientific way in the interests of the species (ours, not yeast).

That's what's going to be decided in the rest of this century I think. I don't see why we can't. The trouble is, it may take quite a bit of suffering and struggle to get there. I think Marx was right in some general way, but did not at all foresee the limits of industrialism, nor the role of resource limits in the fate of capitalism. He was way too optimistic about mankind being able to appropriate the fruits of industrialism and science after capitalism developed them.

We are now confronted with the task of acting scientifically as a species in order to maintain our niche here on the globe. And it is going to involve backing off major parts of industrialism, world trade, huge and growing population, etc. It is certainly going to involve greatly restraining capitalism and the profit motive, and require a revival of localism. But, can science, rationality, global cooperation and interchange and culture be preserved? I don't see why not--after we get bashed in the head hard enough.

The germs of this global consciousness have been present for a long time--and TOD is one little rivulet of it. There have been numerous world-wide bodies, and even movements, which, while have been mostly on the losing side so far, show what is possible. So I'm an anxious optimist longer term.

Scott Adams (the Dilbert guy) pointed out that we are a bunch of cavemen living in a world built by about 5000 geniuses who invented electricity, penicillin, computers, telephones, currency, democracy, newspapers, cars, rifles, nuclear power, DVDs, etc.
What's worse, those geniuses are only geniuses in their own fields and are no better than we are at dealing with the other 4999 inventions!
There is a positive aspect to the human spirit that when faced with tough challenges, people meet and overcome obstacles. You, I, and a number of others can get pessimistic about the future and there is definitely cause for worry. I would like to present an idea that might help to lift your spirits.

Various companies have been working with lithium ion battery technology and a number are making claims to having increased the cycle life upwards 9,000 and to 20,000 cycles. These companies are Altair Nanotechnologies and Toshiba, respectively. What does that mean? A battery is considered to be technically dead when it loses 20% of it capacity. If these cycle lifes represent the point where this 20% is reached, you potentially have a battery that could be used in an electric vehicle. An 100 mile range electric vehicle with the former battery would end up going 800K miles on a pack (100 * 9,000cyc. * .9) where the .9 represents the average between 100% and 80% battery capacity. Such a pack, using current Lithium Ion 18650 costs might run a consumer about $8K to 12K or roughly $0.01/mile. According to the US EPA, the Toyota Rav 4 electric used 0.301kwh/mile @ 50 miles per hour. Electric rates in my area are about $0.07/kwh. Therefore, the Rav4E would use about $0.02 of electricity per mile. Add in charger inefficiency and US gasoline tax to go 30 miles and you have the equivalent of roughly $1.10 a gallon. I've seen photovoltaic rates of between $0.25 and $0.35/kwhr. Substituting in the $0.35/kwhr rate produces $0.10/mile for the RAV4E or about $3.90/gallon equivalent.

I think my major point here is that we will be seeing a drop off in oil production in the coming decade. What we have to do is to decrease consumption to make up the difference between demand and production. Also we have to remember that more energy goes into making a vehicle than what goes out the tail pipe. Several manufactureres such as Mitsubishi are announcing the production of electric vehicles. So it looks like solutions can be created but will they be able to offset decline in oil production?

What does the shortfall in oil production look like over the next decades given current growth in demand?
I've been mulling over numbers like this while driving to work. Any idea how much power a Prius uses? I found an estimate that the useful energy in a gallon of gasoline is about 5kWHr. If a Prius gets 45mpg then it uses roughly 0.11kWHrs/mile. Quite a bit better than the Rav 4.

The work on Li batteries and PV power has been very impressive.

It is tantalizing to think that we could drive plug-in hybrids that are mostly charged by PV systems on the roof. The big problem is rebuilding the entire fleet of vehicles, and building a massive set of solar panels, and doing all this with a dwindling supply of cheap energy.

You would get more use out of the PV if they are permanently mounted on a roof and connected to the grid and you charge your plug in hybrid from a grid connected charging outlet.

I think the crucial part is the charging outlets.

I have started to advocate a four pronged wehicle fuel strategy.

  1. Biofuel mixable with gasolene,  ethanol.
  2. Biofuel mixable with diesel, RME, FT-diesel from biomass.
  3. Biofuel mixable with natural gas, biogas, since it uses other raw materials and is more efficent then only ethanol and gives clean exhaust.
  4. Charging outlets to complement all of the above with electricity.  More electricity can probably be added via electrolyzed hydrogen used in refinaries, FT-diesel manufacturing and mixed with the methane in biogas an natural gas to give even cleaner exhaust. Then build nuclear powerplants, wind powerplants, combined heat and power powerplants, etc and increase the efficiency of other electricity use.
I think you got it exactly right.
Word from the Prius+ project at is that it uses on the order of 262 Wh/mile (at the wall, I suppose).  That's the version with PbSO4 gel-cells; Li-ion would have lower battery losses and be more efficient.
REmember the Prius is also using a gasoline powered engine. Your 0.11 kwh/mile is due in part because the internal combustion engine is a contributing source of propulsion. There is only enough juice in the Prius pack to drive 2 to 3 miles on the pack alone. has fooled the Prius software and beefed up the pack. They claim about 30 electric only miles per charge.
With a stock Prius that is correct. There are conversion kits that change a Prius into a "plug-in hybrid" (probably other names apply. This involves adding several kWHrs of battery storage and the ability to charge the battery from a wall socket. When you leave the house you run on straight battery power for the first xx miles till the battery discharges then the gasoline engine kicks in.

If you can go the first 10 or 20 miles on battery power you can dramatically lower (not eliminate) the use of fossil fuels.

Two Valence Technology K-charge batteries at about 130lbs would supply over 5 kWHr of storage. At the power usage cited by Engineer Poet above this drives you about 20 miles. This covers daily short trips and commutes for some. For others it cuts way back on the fuel they need to get to work.

More detailed (and more accurate) information about this concept at this FAQ.
Thinking of the tradegy of the commons this isn't a western problem that we face. It's a world problem. If the west consumes less the east may consume more at a lower price. That's what the east would do, wouldn't it?

"I think my major point here is that we will be seeing a drop off in oil production in the coming decade. What we have to do is to decrease consumption to make up the difference between demand and production."

Then it becomes a question of scale.  Could our current electical grid handle the additional load of most people who currently drive now charging cars?  I'm not just questioning generating capacity, but actual transmission capacity?
If electric cars came into widespread use, the thinking is that they would largely recharge overnight.  That keeps their loads off-peak when there is spare transmission and distribution capacity.

There is also spare generation capacity off-peak and in general utilities love off-peak loads as it improves the overall system capacity factor.

The downside is that these unused, off-peak generators are largely fueled with natural gas, the most expensive of fuels.

The corellary is that widespread market penetration of grid-recharged electric cars would encourage building new nuclear and coal plants as additional baseload generation since the utilities' base load would increase.

OTOH, the energy of electrified mass transit is SO high (including ~90% efficient motors, regenerative braking, where braking energy is feed back into the line, low rolling resistance rail (NA for trolley buses) that major cities could be electrify their mass transit without more than a short extension from a high voltage line to the transit substations.

Batteries involve significant energy losses, while direct consumption loses a few % in transmission & transforming (less than the overall US average of 10% because major users get better transmission connections and more efficient transformers than those cans on a pole.

Denver will be adding almost 100 miles of electricified light rail in the coming years.  No new power plants, no major new transmission lines required.  The new demand will be absorbed in the "noise" of demand in a major city.

"If electric cars came into widespread use, the thinking is that they would largely recharge overnight"

Of course this is what you would hope.  But would most people (if left to their own devices) wait until 10pm or 11pm to go out to the garage to switch on the car charger?

I doubt it. I can see most people would drive home at 5:30pm, park the car in the garage, plug the charger in and switch on.  Then minutes later they would be switching on lights in the house, the TV, the kettle, the oven, etc. etc.

Bingo, you've just added to peak electricity use.

Now, of course you could have all sorts of mechanisms to stop the charger actually using power until later (including time switches,etc.), but the truth is that you cannot guarantee that they will be used (unless mandated by law).

About the only way I can see that you could use electric vehicles sustainably, would be to have 2 and each day you charge the other one using solar while you use the one you charged yesterday.

But I have another problem with electric vehicles which I have not seen addressed anywhere.  Batteries.

Almost everything I've read about electric vehicles involves batteries which need to be replaced at some point.  they all seem to have a 'life'.  And all the large batteries that I have seen used for this have plastic cases (most of them are completely sealed, too).  And, of course, that plastic is made from oil.

So if we are planning a long-term future with electric vehicles, then I would suggest that we need to find another material that can be used to make battery cases.

About the only sustainable vehicles I can think of (and this is nowhere near a viable solution at this stage) are compressed-air engines. But we are not talking about long distance travel!  You could use more sustainable means of generating electricity to fill a tank of compressed air.

I am worried that so-called long-term transportation plans still involve large amounts of plastic.  Where do these planners expect the oil for this to come from?  If we are still producing enough oil to make plastics, don't you think someone's going to take it away to use in their vehicles?  How do we know that transportation fuel is not going to become the greatest priority use for the current OIP, trumping all other uses?  We've already seen the plastics industry starting to have difficulties finding raw material.

Does anyone know the answer to this?  Will plastics for renewable energy solutions get their fair share of the remaining oil?

But would most people (if left to their own devices) wait until 10pm or 11pm to go out to the garage to switch on the car charger?

I doubt it....

Now, of course you could have all sorts of mechanisms to stop the charger actually using power until later (including time switches,etc.), but the truth is that you cannot guarantee that they will be used (unless mandated by law).

Nah, all you need is peak pricing for the peak usage.  What does it matter to you when the car charges, if it's ready when you need to go to work?  Let the utility worry about when to turn the charger on, get the best rate.  Be a control freak, pay top dollar.
Almost everything I've read about electric vehicles involves batteries which need to be replaced at some point....  And all the large batteries that I have seen used for this have plastic cases (most of them are completely sealed, too).  And, of course, that plastic is made from oil.

So if we are planning a long-term future with electric vehicles, then I would suggest that we need to find another material that can be used to make battery cases.

You mean, like polyethylene (made from carbon dioxide and hydrogen or any compatible syngas from any source, e.g. biomass)?
I recall a British device which used the small (less than 2 hz) variations in grid frequency to turn an appliance on and off. Peak loads on the grid cause the powerplant turbines to slow down slightly and during off peak to speedup slightly. Something like this could be used to turn electric car chargers on and off.
I'd believe more like 0.02 Hz; the timeline of the 8/14 blackout claims a 0.020-0.027 Hz change in frequency corresponds to a load change of 700-950 megawatts.  This is a lot.  This post at The Industrial Physicist says hourly frequency variations of 7.6 millihertz (mHz) were cause for concern.
Just a technical note.  The ERCOT grid (the Texas electrical island) is designed to shave Hz slightly before dropping voltage (brownouts) when demand >supply by a bit.  This taps into the rotating inertia of the generators for bit of extra energy (and drops motor loads i.e. air conditioners, very slightly).

Max drop from memory (this was explained to me 25 years ago) is about -0.15 Hz.  Later made up (to keep clocks accurate, etc.) by about +0.02 Hz.

Texas can get away with this since they have a tightly interconnected grid, unlike the rest of the US.

Design?  It's built into the physics of AC power transmission.  Power flows from leading phase (even if lower voltage) to lagging phase.  If your part of the grid has a big load increase, the phase will sag (frequency will drop) until it is far enough behind to move the extra power.  Texas isn't the only spot on the continent with frequency variations due to the load curve.

You're right about rotating inertia and motor demand, and brownouts are used to cut demand from resistive loads.  If we only had "smart" systems which automatically cut their power use when frequency sagged (e.g. refrigerator compressors going to half speed, computer CPU's underclocking), we could avoid a lot of problems.

Design in the sense that plant and substation controls will not trip at a drop in Hz (within limits), new transmission lines are built and so forth.  East & West US/Canada grids are too loosely connected to do much of a Hz drop per EE that described this to me.  There first recourse is to drop voltage a bit.

Plug-in devices are commercially available (50 Hz, 230 V) to cut off power to certain devices (refrigerators, hot water heaters) when Hz or voltage drops too much.  Often used in island grids.

I've been wondering if there is a lithium bottleneck if we start scaling this up. It seems there isn't but we'll have to produce a lot more of it than now.

World lithium reserves are estimated at 13 mln.tons.
A 100 mile range vehicle would require a (100*0.301*1.2) = 36 kwh battery pack. The 1.2 coefficient is in order to avoid full battery discharge that shortens battery life dramatically.

Lithium-ion batteries contain 0.3g. of lithium per AH, which translates into 83.3 g. per kwh (3.6 V output). So, a typical battery pack must contain 3 kg. of lithium. To replace the world fleet of 700 we are going to need 2.1 mln.tons of lithium.

Conclusion: doable in the long run, even for all of the fleet. A significant ramp-up of lithium production will be necessary (maybe on the order of 10), as current production is only 20 000 tons/year. A huge industry for battery recycling will also have to be established.

A new technology is making the Lead/Acid battery comparable to Li ion technology

Batteries that Don't Die from Firefly Energy an offshoot of Caterpillar


I always signoff the same way in any forum: "Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?", it is my self-adopted tagline, if you will-- so always expect it to be there.

I guess it is my way to hopefully make any reader truly consider our ever-growing predicament.  Obviously, it encompasses our whole planetary set of problems from Peakoil, global warming, overfishing, topsoil depletion, pollution, overpopulation---yada,yada,yada.

It originated from the example of the every minute population doubling in the petri dish whereby it starts at 11:00.... 11:57 1/8 full, 11:58, 1/4 full, 11:59 1/2 full, 12:00 totally full and Dieoff begins.

Obviously, yeast will run to the bitter end, thus we get beer--this is all good. :)

But for humans and the planet--this is all bad.  :(

The difficult part is truly determining exactly what time it is for our planetary petri dish: 11:58, 11:59, 11:59.2, 11:59.5, or 11:59.9999, and the overall effectiveness of our aggregate intentional response.

Try to imagine if yeast were smart enough, so that they would naturally organize themselves, so that it would take a hundred years to make a bottle of beer or wine.  This is what humans should be trying to achieve with a Powerdown Plan and voluntary population controls.

Forums such as TOD are key to getting this information out to alert the unwashed masses so we can achieve an adequate 'critical mass' to change course.  Jay Hanson of believes that we will never achieve this critical mass because our genetic design precludes us [in the aggregate] from seeing gradual disaster, the Thermo-Gene Collision will run its inevitable course.

Thus, the world population will continue to expand and be addicted to the burning of fossil fuels... Hell, any energy source we can find from cooking cockroaches over old Pampers, dug up from landfills, to the cannibalism of Easter Island.  The Thermodynamic Laws or Entropy will eventually whittle our numbers down; the squeezing of humanity through the Dieoff Bottleneck.

Yeast in a bottle have no predators, same for humans on this planet.  Yet, if we wish to optimize the width of the Bottleneck to bring as much biodiversity through with us, we need a vast revolution in how we conduct ourselves in terms of energy use and reproduction.  Sadly, this is where our world leaders are failing us because their greed and self-serving profit motives override any desire to lead us to any form of Powerdown.

Pres. Carter tried to initiate a peaceful rollback of the clock to 11:57 back in 1977 with his famous "Sweater Speech", but subsequent administrations derailed this strategy.  Just imagine how the world would look now if we had taken his advice to heart.

Just imagine if all the world's 'shakers and movers' had been relentlessly promoting since Jay first put it up since 1995--we would have now seen radical changes in society across the globe in just ten short years.  Now try to imagine if Pres. Carter had been re-elected and convinced all the world's leaders to join the US in a mutual Powerdown as outlined in his famous "Sweater Speech" linked here:

Just imagine if all schools had based their curriculums around studying and Al Bartlett's exponential growth equations, all govt. planning revolved on mitigation of the dire effects, all local building and zoning codes were based on a non-auto design and maximum use of efficient insulation, PV panels, and solar hotwater heating.  All media would relentlessly discuss saving energy, saving water, enlarging biodiversity to eliminate extinctions, growing backyard food, and reasons to reduce population.  Corporations could have been making huge profits as they shifted their objectives to satisfying this new consumer demand.

Just imagine if all the money spent worldwide on projecting offensive military power was instead spent on maximizing the effort to the new paradigm.  The world would have long ago mutually agreed that the largest naval ship would have been a defensive-sized coast guard cutter.  Nuclear ICBMs would have been converted to nuclear power generation plants, and nuclear aircraft carriers into peaceful vacation cruiseships.  Just imagine how much worldwide respect America would have garnered as being the initial leader to avert Dieoff versus the growing worldwide hatred to our imperial powergrabs and profligate energy policies.

The maximum house or apartment would be legislated to be no larger than 1500 sq. feet so you could not fill it with junk, yet it would cost hardly anything to heat or cool due to optimized design.  No McMansions with attached three car garages.  Super-efficient appliances and no standby status wasting electricity-- just a simple on-off switch-- if no remote control signal is received in ten minutes-- the device flips an internal circuit breaker to save energy.  

People would gladly not build along beaches, barrier islands, and floodplains, and an orderly evacuation of New Orleans to a "New" Orleans built safely on higher ground would have started long ago in the early 1980s.  Agreement would have long ago been reached that levees were a gross violation of the natural progression of rivers and would be energetically unsupportable postPeak.

Imagine if huge humanure programs and localized community agriculture had been promoted and gladly received by the now informed populace.  An estimated 20% of city wealth is used to provide cheap water and sewage services-- just imagine the savings if each household was required to hand carry from the neighborhood well their daily personal usage.  Just imagine the savings to our topsoil if we gladly recycled our nightsoil back into the earth--how happy the worms would be instead of being burned to death by chemical fertilizers.  Just imagine the savings if car-washing, by hand at home, or at a commercial carwash was abolished -- where did the desire to polish our 'chrome penis' of vehicular vanity get started anyway?

Imagine all the married couples gladly deciding to have just one child worldwide as their contribution to preventing Dieoff.  Imagine if thirty years ago, it was decided to never build another freeway, but billions would have gone into building mass-transit, fast inter-city bullet trains, and thousands of miles of elevated, but temperature controlled and solar-powered enclosed all-weather bikepaths.  Imagine no obesity, but tremendously fit and happy people gladly chattering with each other as they pedaled along in smog-free cities.  Can you imagine such a thing if everyone studied and Jim Kunstler's book, "The Long Emergency"?

Imagine if the universal understanding of made everyone want to expand the biodiversity as much as possible.  Our national parks would be much larger and no vehicles would be allowed, but you could easily see the park from elevated bikepaths.  Fishing trawlers would have been restricted to only certain areas and the use of smaller nets to allow natural replenishment.  The fishing industry would relentlessly self-police themselves so all could prosper from steady yearly catches.

I am sure the reader can imagine many other examples of a Peaceful Powerdown, but our leaders seem hell-bent for the other fork in the road.  Ideally, we should now be trying to adapt a 1700s lifestyle, with a small coterie of ecological habitat managers using the remaining fossils fuels to keep the weather and research satellite systems operational for generations to come, and furthering genetic research to finally make us Smarter than Yeast. I am not optimistic.

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

Bob always asks, "Are humans smarter than yeast?" Clearly, the answer is, yes. But the more critical question is the ratio between intelligence and barrel complexity!

The capacity for language and human thought originated in small hominin bands. But this eventually led to agriculture, cities, and then heavy industry and computers. Our 'beer barrel' has become insanely more complex than what its fabricators were originally designed to deal with.

A yeast makes local 'decisions' about whether to divide based on inadequate information (no internet in the barrel); sometimes, this leads to catastrophe. But even with our internet and large brains, humans have to make local decisions with global consequences based on inadequate local information. Human reading speed (about 4 words/sec) is essentially fixed (speed readers just skip words). That makes it very difficult to fully investigate the implications of local (e.g., purchasing) decisions.

The human 'cognitive bandwidth' may not be high enough for our modern 'barrel'. So we are a bit like yeast, hoping for the best.

I have wondered already some time, where are the demand cuts that keep the oil prices relatively stable in spite of decreasing or flat production? OK, we know that the 4Q GDP growth in the US was dismal, but there is no global recession, yet.
I'm don't understand your question. Price is not stable. Price is only "relatively" stable because of demand drops - as in the demand dropped - demand isn't "cut" (unless you meant destruct(ed) - which is just an added decriptive for drop). Production does whatever. Sometimes it reacts, sometimes it is pro-active. I'm assuming you understand the Supply/Demand/P/Q curve. TI you've been here before. Do you want to try again?

Now I'll try again. The price is too high due to speculation and ridiculous Iran-war talk. It should be about $55. Everybody knows this. I doubt any of you saw Lehrer interview Cheney yesterday. That's because you are all a bunch of illiterates. You're not even reading this. If you are, obviously my comments are not about you.

February is in the slowest USA-gasoline usage period. Even if we declared war on Iran today, it would be at least 3 months before we could wage it. Oil is $63. Go back and check who was predicting what here. I recall the forecasts being a little bit higher on this site. They will all deny it or try to "explain." They were wrong. You bought into it. That's why you asked your question.

If Stuart Staniford has right and the production peaked already in 2Q 2005, what has happened to the consumption? I think this is a legitimate question. If production is down the consumption must be down, too and/or the stocks. There is not much news about either. If consumption were down, it is not only because of prices - they have not changed so much since summer 2005.

In a sense - production has peaked for now, but nobody is complaining. Well, Chinese oil imports are down:
"The National Development and Reform Commission said recently that China's dependence on oil imports was 42.9 per cent in 2005, 2.2 percentage points lower than in 2004. It also said China consumed 318 million tons of oil last year, 1.08 million tons less than in 2004." Thus, Chinese consumption was 0.3 % lower. But this is for the whole year, so consumption might have fallen more during the last quarters.

This is what I have been saying here - when we have the peak (we will see, if it really was in 2005, I will not even guess), it might be masked by consumption reduction and become quite invisible - no price shock. But the consumption reduction should show as a recession - unless the overall energy consumption (oil, coal, gas, and nuclear) can keep growing. The US GDP growth stalled in the end of 2005, the Chinese growth did not. There is definitely no global recession - yet, despite of decreasing oil production.

The oil production situation for 2005 was really different from 2004. The 2004 was a year of exceptionally rapid growth, 2005 was a year of break in the trend. But the production grew still quite considerably in the first half of 2005, so we have a very short history of stalling growth and still only poor or preliminary economic statistics at hand. The impacts will show only after a lag.

My guess has been that oil is not so important as total energy and prices are not so important as the physical supply. The high prices did not cause a recession 2004 - 2005, as many expected, because the oil and total energy supply was up. China with its nearly 10% coal production growth can get the world economy going for some time even if oil production stagnates. A sharp drop in oil supply would be an other matter.

"If Stuart has right"...
Are you from Germany? Or do other languages also say "has right"
He just forgot the "it" part.

By the way I think that almost everyone posting at this hour must be outside the US, and probably haven't learned English in elementary, like me ;-)

Please for you to be screwing the hell off with the correctorizations of sub par grammar from posters. Maybe in factus for some here truth do be said that Engrish not be the language of fyrst.

Others might just type fast and not bother to proofread. This is informatl. Who cares.

My guess is that the price is yet too low to affect the USA market, but is already taking its toll in places like China.

IMO the correlation oil usage ~ GDP is US specific, so do not expect China being affected that much at least in the near term. We are the ones that drive everywhere to do anything and the economic activity depends vis a vis with the oil usage/miles driven. Chinese have been growing steadily well before they started buying cars on a huge scale in the recent years. They have excellent mass transit and dense cities, while their goods are being transported mostly by rail.
To put it short: their economy runs on coal, not oil.

The Iran apocalyptic scenarios are a joke. Do not expect a significant price rise before the summer. A good idea is to buy some futures in the meantime.

These are all good questions. But remember, Oil Production hasn't dropped, It is at all-time highs. You can only believe it dropped if you look at very, very short-term monthly numbers. The long-view shows a completely different picture.

Also, we don't really know what is happening in China. Sure there's huge growth, yeah they're buying cars. But are they driving 10% more miles than last month?

And, I for one believe there is a huge, very hard-to-define lag/buffer between daily supply and demand.

It's easy to dismiss what I say until you actually look at reality. Most Americans will tell you the price of gasoline is down. That's because they are viewing it from the perspective of Post-Katrina highs - not from where those prices were 2 or 3 years ago. The truth is gasoline is up and has doubled in the US.

Look at the actual price of oil (Friday, Feb 10th). $62. At a six-week low. You would never know that if you listened to all the "chatter" about Iran and tight supplies.

Price doesn't go down when supply can't keep up with demand. The short-term price will tell you alot about the short-term supply/demand reality.

As one of the fulltime traders on this site, for whatever that is worth: I agree that there is a terror premium in the price of oil, and with the price declines we have seen in the last few days that premium may be eroding at least for now. I am not, however, brave enough to say what the price "should" be.

Note too that the price of futures in New York --which is based on Arab Light crude -- is at a premimum to the OPEC reference basket, which also includes heavier grades. OPEC seems to defend the basket price, not the price of Arab Light. So when Arab Light decreases to, say, $60 the basket drops to the low $50s and if recent behavior is a guide, OPEC may start to do something to keep prices from falling further. Also note that the New York, post Katrina low in November was $55.75, and that level was touched only once, on November 30. With Iran being referred to the Security Council, I personally am doubtful that the New York price will stay near $55 for any great length of time, assuming it falls that far -- but then -- forecasting is a very dangerous art.

Furthermore, if we declared war today speculators would react instantly, as might Iran. Prices would react WELL before the three month time lag you mention. THAT is a given, based on my twenty plus years of experience in the markets.

I thought NY futures or NYMEX futures were based on WTI. Or rather the other way around. The West Texas Intermediate spot price is the same as the NYMEX price.

Nymex's website sites the delivery point as Cushing, Oklahoma. That's a long way from Ras Tanura.

Are we really going to expand the SPR?  Bush's budget has no money to buy crude.  Will Congress push for it, during an election year, when people are already griping about high fuel prices?
The United States' strategic petroleum reserve can be filled via royalties collected from domestic producers.  So there is less dependence on federal expeditures.

Yes, additional budget funds are not required.  The Secretary of Energy has descretion to fill the SPR up to one billion barrels per the Energy Policy Act of 2005.  However I don't think they will fill it unless (1) they envision another ME conflct and/or (2) prices come down a little lower.

They may be waiting a while for event #2 to happen.

I'm not looking to start an argument, but do you think we can really look at just the past few months of data and then jump to the conclusion that production is topping out?  For example, the EIA data also show that world production in 2001 was basically flat or slightly decreasing, but in hindsight it clearly wasn't the plateau before the peak.  I'm waiting to see a few years of flat to declining production data before getting too worried.
I agree. Every time the figures plateau or drop a bit, the PO community yells "Look! The end is nigh! I told you so!" Which is plain ridiculous- there is not a large enough sample space to form a trend.

There is also the converse to this- the PO naysayers who proclaim "Nothing to worry about, look the price has gone down!" when the price dips seasonally (as is the case at the moment.)

Maybe it's a result of short attention spans?

No, I don't think so.  If you believe in the invisible hand of the market, etc., you would expect production to be increasing, because prices have been so high for so long.  The fact that it isn't is meaningful.  
I would agree that one cannot base any judgement on a single month's numbers, but part of the reason for the post was to point out that while OPEC was saying that they are holding production, the numbers say otherwise. Another part was as a lead in to the comment on Iranian production and the underlying conclusion (derived from 90 years of data) that they are in significant depletion, and, as I have commented before, may in fact have fairly legitimate reasons for wanting, and in fact needing, nuclear power down the road.


At least he's honest.

It's a tradeoff of certainty vs. early warning.  Obviously if you are predicting what's happening with only a short span of data, the odds that you will be wrong are quite high.  On the other hand, if you need to know early, waiting for more data and a higher degree of confidence won't help.  

For my own curiosity, I want know see what is happening ASAP, but I'm certainly capable of factoring in the likely inaccuracies of the data, and revising my conclusions if new information comes along.  You see, I have no one but myself to satisfy with the conclusions I draw.

I agree that a few months doesn't allow a conclusion to be drawn. However, people thinking the peak is occurring are examining a lot of converging evidence, not just looking at production. There is the post-peak status of the worlds biggest oil fields (Ghawar, Burgan, Cantarell)  - a new phenomeneon - the high prices which have lasted for 5 years without non-OPEC output being able to grow, the flattening of Russian production, the acceleration of North Sea decline, the lack of significant new oil finds in the world, the impending decline of Mexican production, etc. Then, when the hurricanes hit and cause long-term production loss with conditions expected to again be bad this coming season, you might get concerned. Only in this total context -most of which is new and didn't pertain in the past- does the "peak" in May 2005 become concerning. I'm still not saying that was the peak, a much longer pattern would need to be seen, but I don't think this is business as usual. In the fairly tale, the wolf did eventually come.
You have a lot of things happening in this '03-'06 period that have to be either in concert with the global oil peak or just an amazing (and extremely unlikely) coincidence. For one thing, one of the best math treatments done on the subject was by Deffeyes in his '01 book. When oil was dirt cheap and no one was talking about PO, he fixed the peak year at about '05 (in his new book, he still says '05). In '01, he obviously wasn't reacting to mass hysteria when he titled his book "Hubbert's Peak and the Impending World Oil Shortage". The cold math says '05. Also, for the first time in history, you have heard announcements from Saudi Arabia starting in '03 saying that they've reached their limit on excess capacity. The only significant throttling in the world to put out supply shortage or demand fires vanished. The throttle says '05. Also in this period, oil pricing, on an inflation/supply shock adjusted chart, climbed very sharply and conspicuously out of a century long trading channel between about $12 and $20/bbl. Even if you had never heard of Hubbert or Deffeyes, or had never seen a bell curve in your life, you would have to eye this graph, scratch your chin, and say that something very big definitely has happened to the supply/demand of this resource, and it seems to be centered in the '03-'06 time frame. The efficient market says '05. Stuart says '05 (a likely candidate, anyway) and Stuart must be at least as smart as the market. And all of the above could be wrong, of course. But probably not by very much. It wouldn't surprise me to see conventional production persist along a roller coaster plateau for a few years, barely making some new highs now and then, if we're lucky. But even with unconventional ramping up strongly, it will be hard pressed to fill the spreading gap between a basically flat, very high flow rate conventional production and a relentless, climbing demand curve.
Oil companies want SEC to loosen reserves rules

Thanks to record profits, oil companies are finding it easy to fatten up their bank accounts. But they're having a tougher time convincing skeptics how much oil and natural gas they have in the ground, which is the measure that Wall Street uses to gauge the companies' future profitability.

Big Oil's proposed solution to this dilemma? Change how reserves are measured.

A new industry-backed report proposes to let the companies be the best judge of their own stores of oil and gas rather than use a strict formula imposed by the Securities and Exchange Commission. The companies argue that the SEC's method -- intended to provide investors with apples-to-apples comparisons -- is archaic and arbitrary, and undercounts the amount of energy on tap for the future.

It's a big issue for the energy industry and its investors: Wall Street and the SEC view a company's success at replacing the oil and gas it pumps out of the ground as a fundamental reflection of its value.

Securities analysts don't necessarily agree with the SEC's conservative guidance on how to account for oil and gas in the ground, but they also tend to doubt the companies' optimistic forecasts of their stores. Matthew Simmons, a Houston-based energy investment banker and among a crowd of forecasters who believe the world is running short on oil, says the SEC rules should be even stricter.

For some reason, Enron comes to mind...

Amazing. Just when it seems so obvious that we need better scrutiny of the reserves outside SEC jurisdiction, the companies want to weaken those numbers that do make sense.

I have a friend who works for one of the power companies, and I ran into him over the weekend.  He said he got a promotion, and is now working with a group that does risk analysis and trading of energy.  I joked that this sounded a lot like Enron, and he said that they had actually hired a bunch of people who had previously worked at Enron.

I had hoped that people might have learned something, but I am starting to think that the same old BS is starting all over again somewhere else.

Yes, I posted this yesterday in the Tuesday Open Thread, but I was obviously too late to catch peoples attention.

I can see two (bad) reasons why they want to do this:

  1. Their reserves are already inflated and they don't want that to be discovered in the coming naval-gazing oil search
  2. They want to inflate their reserves even further to maintain the 'happy state'

Neither of these bode well.

But hey!  I might be too much of a cynic.  Can someone see a legitimite reason why they want to do this?

"it will be interesting to see what the Saudi's do in regard to increasing production to maintain overall OPEC numbers."

We know at least what they say they will do:


Saudi Arabia will increase crude oil production capacity to 12.5-mil b/d by the end of the decade but meeting future oil demand will be a challenge for the world's producers because OECD production has declined and growth in the former Soviet Union has slowed, a Saudi oil official said on Jan 25. Ahmed A Al-Subaey, general manager of Saudi Petroleum Ltd in Tokyo, Saudi Aramco's Japanese arm, said some of the additional capacity would offset natural decline, while the rest would allow the company to expand maximum sustained capability from 10.5-mil b/d to 12-mil b/d, he told an international industry symposium organized by the Japan Cooperation Center, Petroleum.

"These capacity levels provide us with a cushion of 1.5- to 2-mil b/d spare production capacity, in keeping with Saudi Arabia's commitment to enhance market stability," Subaey said. Saudi Aramco also had an "aggressive exploration program" to expand the kingdom's current crude reserve base of 260-bil bbl, roughly a quarter of the world's proven reserves, Subaey said. He did not give target figures.

Saudi oil minister Ali Naimi has said that further exploration could add another 200-bil to reserves. But in spite of this, meeting future demand will still be a challenge with demand for OPEC oil expected to increase over time because of declines in other producing areas. OPEC's 11 members currently account for roughly 40% of global oil production of some 85-mil b/d. Subaey referred to declines in production from Organization for Economic Cooperation and Development member states, which include leading producers the US, Norway and the UK. He said that once strong growth in the former Soviet Union had slowed due to lack of infrastructure and depletion of existing giant fields.

Call on OPEC oil set to increase

"As a result, the world must look beyond many of the traditional OECD suppliers for the new production needed to meet rising demand, and the call on OPEC production will increase over time," Subaey said. "Maintaining that kind of capacity in reserve isn't cheap, but it does provide a critical safeguard in times of market turmoil or disruptions in supply from other sources, and its value in keeping markets steady has been demonstrated repeatedly over recent years," the Saudi executive said of the kingdom's capacity expansion plans. Global demand in petroleum was growing in "two vastly different sectors," he said. One was the developed economies, where growth in consumption was forecast to be moderate, but which had a substantial base of established demand that must continue to be met. The other category was developing economies like China and India, as well as countries in southeast Asia, which were starting from a relatively small base of demand but where petroleum consumption was set for "strong, rapid and sustained growth" as their economies grow.

At the same time, Subaey said that upstream capacity expansions were "of limited benefit" without corresponding midstream and downstream investments. And it was not just a matter of boosting downstream capacity, but also transforming refinery configurations, to overcome the current "mismatch" between global oil supplies -- which would continue moving towards heavier and sour crudes -- and refineries geared to run lighter, sweet oil. Saudi Aramco, in addition to capacity expansions at several of its refineries, is developing two new export-oriented grassroots refineries, one on the Kingdom's west coast and the other on the eastern seaboard, Subaey said.

Several items of note in this Saudi statement.

A half million barrels of new capacity are goign to offset Saudi decline (12.5 vs. 12 million b/day).  So Saudi acknowledges decline at home (a first I think).

The Saudis think production will fall from traditional non-OPEC producers

Their extra capacity will not be routinely produced, but held in reserve to stabilze the markets.  (Why knock the price down ?)  Also "Look elsewhere for new supplies, not from us".

They implicitly acknowledge that we are past Peak Oil for light, sweet crude (2000/2001 were flat, now down about 2 million b/day)