Has anything changed?

Well the traveling tourist (not really, it was real-job related) is back in town to change suitcases and be off for a couple more days, but I will be back to more regular posting after Wednesday. However, without having had the chance to read any of the posts over the past two weeks, (though I will) I did catch a comment in Platts this morning that echoes a theme that I have been posting on intermittently. This is the anticipated supply of LNG from the Shtokman field to the U.S. The current report notes that President Putin is considering redirecting the gas from the US to its more traditional market in Western Europe.
"I can inform you that Gazprom is examining this possibility and could make a decision on this issue very soon," Putin said Saturday at a press conference following a summit with French President Jacques Chirac and German Chancellor Angela Merkel.
It is not clear as to whether this is more of a political ploy, or a reflection of a harsh reality about the size and production rates for Russian natural gas resources. It appears much more likely to be the former since, as the article notes
Russia currently sends some 55 billion cubic meters/year of gas to Germany, Putin said.
"But we could supply 25 billion-45 billion cubic meters of gas annually from the Shtokman field alone at peak supply period. You can just imagine what kinds of quantities we are talking about here, and what this would mean for the European economy and for the German economy," he said.
The field can ensure supplies for 50-70 years, which "creates an absolutely stable and sustainable situation in the economy and on the European energy market, above all in the energy sector in Germany," he added.
In regard to the US position the article also underlines a thought that I have worried about before, which is the desire of Gazprom to control not only the supplies, but also the distribution system, in a way that denies competition access to the market. Note the line in the story
Also, Gazprom officials said earlier this year that US regasification terminals, which the US firms have offered for the Shtokman asset swap deal, have lost their value to Gazprom after the US approved construction of new capacities.

The current plan is that the US will get 70 billion cubic meters from Shtokman (though the Post has an earlier start date than may now be feasible) to capture 10% of the U.S. market by the end of the decade.

And there is also the unconfirmed rumor that Gazprom might buy the Indian oil company stake in Sakhalin. Given that Russia is currently applying pressure to Exxon

Gazprom, the world's largest gas company, has been seeking a foothold on the energy-rich island off Russia's Pacific coast via a swap deal with Royal Dutch Shell, which has 55 percent of the neighboring Sakhalin-2 project.
However, talks on the swap have stalled since Shell unveiled a doubling of its project's budget from $10 billion to $20 billion last year.
As well as angering Gazprom, the move has prompted Russia's Natural Resources Ministry to open an environmental investigation into Sakhalin-2, culminating in its decision to withdraw a key ecological permit last week.
The ministry has also brought pressure on Exxon's venture, which it says plans a similar budget overrun from $12.8 billion to $17 billion.
The ministry says it will not tolerate budget increases because they contravene the terms of the production sharing agreements (PSAs) which govern the two projects.

Back Soon.


Looking at a map, this field is in the Barents Sea, north of Arkhangelsk (where allied WWII cargo ships sailed to supply the Soviet war machine.) It is situated such that it could serve any of a number of markets.

Politically, the Russians have little reason to supply the US (I'm afraid Bush has soiled the bed pretty badly), but they have every reason in the world to divert it to Western Europe.

As all TODers are aware, W. Europe is very anxious about having stable NG supplies, and Russia is anxious to guarantee a stable, long term supply so they can dominate their energy markets and buy up/absorb their distribution systems.

Politically, it would be idiotic for Russia to do anything else with their NG, at this point in time.

I'll repeat myself:

Rather than "Resource Wars", recast this as the "Race to the Independence of Renewables!" and get moving!!

IMO, Russia has us "by the short hairs" as long as we are heavily dependent on importing crude oil or natural gas for energy and will take complete advantage of that fact.

The "Cold War" is rapidly morphing into an "Energy War". I grew up near missle silos with neighbors digging "bomb shelters" (really fallout shelters). Us older timers forget that the younger generations have no idea what that was like.

Technically, Russia has Europe and probably China by the short hairs, us by somewhat longer hairs.
What irks me most about this is that the US has the capability to opt out of this one (via 2x or better improvments in most efficiencies, allowing the nation to go to entirely domestic supplies) and let the rest of the world fight it out.

And there's no hint that the people in position to make policy have the slightest inkling that it's possible.

  1. Messages of sacrifice are hard to sell.
  2. all the old inefficent eq would have to be scrapped.  Where shall the cash come for the replacements?
2a) The old EQ may not be fully written down.
3) New efficent EQ has to be built.  (Now exactly where will such EQ come from?)

They may understand fully, but the above 'objections' are hard to overcome.   How, as a sales pitch, should they be overcome?

Sacrifice?  Who says it's sacrifice?  If the typical car in 2015 kicked ass like a Tesla roadster because of the alternate-energy and efficiency improvements, you'd really have to stretch to call it a sacrifice!
Sacrifice?  Who says it's sacrifice?

Using less is a sacrifice.  ;-)

Getting more for your money is smart.

Sticking it to the bad guys is just plain fun.

Sacrifice?  Who says it's sacrifice?

Using less is a sacrifice.  ;-)

Is that really correct?

First, let's take a short trip to the dictionary

If we leave out animal and religious sacrifice, and the sacrifice bunt in baseball, we get some terms germaine to our discussion:
3. the surrender or destruction of something prized or desirable for the sake of something considered as having a higher or more pressing claim.
8.    to surrender or give up, or permit injury or disadvantage to, for the sake of something else.
9.    to dispose of (goods, property, etc.) regardless of profit.

Note that "sacrifice" implies giving up something at a loss, or taking a disadvantage or weakened position in the exchange.  

We MUST confront this:  The mistaken belief "that using less" is a "sacrifice" is so counter to the logic, common sense, and even morality of history that defies imagination.  It is a belief that is born ONLY of the "consumer" era, and makes no sense in any system of conventional economics or prior belief. It creates the bizarre mythology that "using less" will always be bad for you, so DON'T DO IT.  It converts "using less" into an evil, possibly satanic act, instead of the absolute core of the old puritan ethic it once was ("waste not want not", frugal conduct as next to sobriety and absence of gluttony, one of the seven deadly sins of the whole Western ethic.  Only since the birth of the advertising/merchendising age has consumption in and of itself been a virtue!

Now, for some practical examples:  What firm grows by "using more" alone?  NEVER does it happen.  They grow by using what they use with efficiency and expanding on the difference.  It is the heart of business ethic and free enterprise.  What businessperson would be frugal with the hours of the firms workers, saving hours whenever possible, and then gladly throw away kilowatts?  It is madness!

I have used this example before.  Last summer, I myself was frugal.  I did not turn on my home air conditioner once.  It was not because I am virturous, but because I did not want to pay nearly $250 per month extra in electric bills.  It was uncomfortable at times, and if my health had been weaker, I could not have done it.  But, given the expense, I "sacrificed".

A good friend of mine, whom I visited on several occasions, had his air conditioning on almost continuously.  His air conditioner was efficient, his home well insulated and designed.  He spent the summer in comfort and spent not over $50 or $60 dollars per month.

Another friend of ours, who had a geo-thermal heat pump, spent $30 dollars or less each month.

Now, I beg for an answer:  How can anyone make the case that the efficient design of these homes was a "sacrifice", because they used fewer kilowatts?

Say it with me folks, "Using less does not HAVE to mean sacrifice!"

One more, one of my all time favorites:  In the 1970's energy crisis, the Diesel price was financially killing American independent truckers.  They had laughed off "new fangled" ideas to stretch Diesel only a few years earlier, but now they were desperate, they would try anything that showed hope of working.

Aerodynamicists had proven in the wind tunnel at NASA that a "spoiler" or windbreaking shaped device on the top of the cab, to smooth the wind around the front of the cab wold improve fuel efficiency by as much as 10% to 15% depending on the design of the tractor, and it would be a cheap, bolt on addition, added in one day.  Before the truckers had thought they looked "goofy".  Now, they bought them.  The amount of fuel saved paid for the wind breaking spoiler in six months to a year (a short time for a long haul truck) and from that point on was money in the bank.  Not only that, the reduced wind drag actually improved the performance of the truck, making it easier to climb hills and accelerate!

So, over the road truckers used less fuel, it helped contain the cost of frieght hauling, it reduced wear on the engines, improved performance, and even though no one gave a crap in those days, was reducing pollution and greenhouse gas release.

Upon whom was the sacrifice imposed?

I actually hear people who say things like "well, if we reduce our consumption of energy, it will collapse the economy!"  It is such sheer idiocy that I have gotten to where I will pay it no heed.  I have seen NO SANE MODEL that makes it in anyway sensible that efficiency harms an economy, NONE.

It is the same kind of science that talks about space aliens coming down and molesting your daughters, as an explanation when they turn up pregnent (couldn't there be a simpler explanation there, hoss?)

AMERICAN IDIOCY.  As my daddy used to say, "If a little will do you good, more will do you better' actually worked, why don't you take 5 pounds of aspirin the next time you get a headache?"

Say it again, ""Using less does not HAVE to mean sacrifice!"

Roger Conner  known to you as ThatsItImout

Well, except for the person selling you five pounds of aspirin, or more to the point, ExxonMobil. They don't want their profit margin to be sacrificed at the altar of your virtue.

People in the U.S. don't seem to have a very clear view of who reaps the benefits of America's consumption society - which is not exactly an accident of fate. Let's be cynical, and just say that the poor need to get poorer as part of the natural process of the rich getting richer. Most people are pretty clear on this truth (with the details open to discussion), except for Americans, who, for example, mock the French striking for a decent wage and job security. Think about that - an entire society of consumers who think it is stupid to be paid a decent wage and not be hired and fired. Personally, I just don't understand it. It is such incomprehension of the society I grew up in that makes me wonder about what its future will be.  

Expat: It is amusing and would be inexplicable if one underestimated the power of the MSM.
Strange - the rest of the world also lives surrounded by their own MSM. Japanese media immersion, for example, is certainly no less than American. Nor is England's or France's.

But somehow, those countries have MSM which seem to be less devoted to the diversion which is seems to be the entire reason for the existence of America's MSM.

I remain baffled about many things, including the favored American excuse of how the media is the unique driver of Americans' actions. In the rest of the world, speaking broadly, people are thought to be responsible for their own actions (while not ignoring the broad currents of their societies) - but in America, no is ever accountable, since someone else is always conveniently available to blame.



Thanks for a great post.

On a different website yesterday I was taken to the new Lotus Exige S.  


Looks sweet.  31mpg around town.  39 on the highway.  Fastest production car Lotus has ever produced.

Surely someone could produce a more modest (engine wise) 2000 pound car that got 50+ mpg.

Most hot water heaters have a life of 10 years.  So every year we should see 1/10 replaced.  With the right incentives (tax credits, rebates, etc) we could see almost all of those going to highly efficient models.  (Solar, Instant, etc...)

Furnaces are a little longer, but even if you figure a life cycle of 20 years, that's still 5% replacement every year.  

I've seen advertisements for pellet stoves (and the fuel) in the newspaper this year.

Conservation is happening.  I would argue that it's happening faster then the fuel supply is decreasing.  That's why we have falling prices.

Using less is a sacrifice.  ;-)

Is that really correct?

That would be the ;-)   Its a smiley with a wink.

TPTB would have to sacrifice current profits for future possibilities.  That's what making an investment means.  And that's why it's not going to happen until there is no choice.
I'm sick of people saying stuff like "where is the cash going to come from".  Right now the US government is flushing over 400 billion dollars down the drain on military spending.  All that money goes to fund jets and other high tech gadgets that are virtually worthless in terms of practical value.  We spend billions developing things like stealth bombers, and then only use them on third world countries like Iraq.  

Meanwhile we still have a highly limited military because when you get past all the gee-wiz technology crap, we don't have very many actual troops.  And any country that might be a threat to us, where we would actually benefit from developing a technological edge, cannot be invaded because they have nuclear weapons and would just level half our cities.  

The whole thing is a sick joke.  We have plenty of money to spend on developing alternatives, and replacing all of our infrastructure.  We are just flushing it down the toilet right now as a handout to defense contractors to get products that don't make any sense if you look at the whole picture.  

Right now the US government is flushing over 400 billion dollars down the drain on military spending.

Its not going 'down the toilet' it is going from present and future tax payers to the military-industrial complex paid.

In terms of useful allocation it is going to waste.  If it was all going into alternative energy development (and not just research, actually putting the stuff in place), then we'd be a lot better off.  But you're right, someone is making money off of it.  Still sucks for the rest of us.  

To Eric Blair:

I really need to be getting some rest, but you would lthrow that one at us about the "sales pitch", it's too juicy to pass up!  O.K., here goes.  Since I already layed to rest the first one in another longish post on this string
1.  Sacrifice is a hard sell

I want to tackle a practice sales pitch on your other issues, this is something I have been working on in campanion with my new group,
 "Clear Morning Voluntary Energy Knowledge and Security Initiative"
And the affiliated effort associated with it.  

So here goes  (NOT proofread due to time, rough draft):
"Mr. Blair, you are responsible for an organization in the United States.  As such, you already know you have an obligation.  I am not talking about one of those feel good obligations to the nation or the world, but of course, I have no doubt you feel that intensely as well.  Your first obligation is to your organization or group.  Just as you willingly study and learn and plan for the protection of it's survival into the future, and then make the decisions (insurance, contingency plans, education, investment in new methods, etc.) to protect your firms future in the event of fire, major accident, legal action or business or social conditions changing, I am going to ask you to join us in looking at one of the most fundamental aspects of your organizations existance:  Energy.  I ask you, how long could your firm survive without an adequete supply of energy?  How long can you survive if it is not affordable?  Would it not be one of the most important obligations of your professional career to work to assure that your firm planned it's energy future, and build contigency plans, given that information, RELIABLE information concerning the energy future of the world, the nation, and by extension, your firm, is getting harder and harder to secure?

This is the effort that you can now make, and take the initiative in a world of rapidly changing conditions.  It is the  imperative of the leader to take control of the firms energy situation by taking advantage of the knowledge, the technology, and the communication available to you.  There are others beginning to join this cause, to assure that their organization is prepared for a challenging arrey of scenarios, and keep their organization at the competitive forefront.

Of course, it is obvious you are already invested in hardware, in fixtures, in buildings and in vehicles.  The changes cannot be done all at once.  But it often surprises firms and organization how quickly they can begin to make the moves to a more secure and less consumption oriented future, where waste is reduced.

Quickly, let us look at a "standard type firm or organization:  The longest term fixed assets for example is often the buildings.  Your first step is to evaluate your fixed buildings.  Which ones are nearly aged out, and must be replaced or heavily renovated?  These are the first ones to look at in terms of energy knowledge and security.  What is now used to heat and cool the building.  Can this be changed to advantage?  Are you in a position to incorporate on site CHP (Combined Heat and Power)?  This can be extremel advantagous if your paying very heavily for peak power loads.
See http://www.distributedenergy.com

Would it be possible to incorporate renewables, wind or solar?  There can often be state and federal incentives to assist, making this even more promising.

Remember, the goal is to look for security and flexibility in supplying your firms energy under changing conditions.  The most valuable tools are (1) Conservation (why waste? (2) Diversity (never put all you eggs in one basket and (3) modern methods, including renewables and advanced energy controls.  The goal is to look at what is available.  For example, ground coupled or geothermal heat and cooling can be used in commercial buildings, such as schools and office buildings, and the government will work with you on this:
Geothermal Heating and Cooling, commercial scale:

The key is to begin knowing what options are available and planning a "phase in" option today.  It can start with something as small as energy efficient lighting and daylighting and move step by step.  

Think of your vehicles.  Very few firms change all vehicles at once, but when you must change some, do you know what is available?  It is commonly believed that gasoline, and perhaps Diesel are the only options.

But have you talked to your natural gas provider, about the possibility of PART of your fleet running on compressed natural gas?  How about learning from the national LPG (Propane) associations to see about PART of your fleet running on propane?  Have you looked at hybrid vehicles, to see if some of your smaller fleet sales vehicles could be hybrid?

NOTICE:  There is no recommendation to go "whole hog" after one technology or fuel type!  The key is to be prepared for whatever way the market may move.  If gasoline, due to refinery crisis, becomes short, but it is the middle of summer, propane and natural gas may still be available and cheap.  However, in the middle of winter, natural gas may become exorbitant on price, but at that time of year, only half or less of your cars/trucks would be in constant use.  Then, the gasoline/Diesel vehicles would be ready and able to move.  And gasoline in the heart of summer may be cheap.  The key is not to be "single sourced" and to be ready to phase in sections of the newest technology as it fits and as it becomes appropriate to your organization.

The key to this program is again  (1) Conservation (why waste? (2) Diversity (never put all you eggs in one basket and (3) modern methods, including renewables and advanced energy controls.

Central to all of these is INFORMATION.  This is the reason for an "exchange" of information, products, new technology, incentives.  This is what we intend our initiative to undertake.  But in the meantime, research the organizations you already pay for.  It is to their advantage to have clients for the absolutely critical services and efforts they provide.

The United States Government's Department of Energy, the National Renewable Energy Laboratory, the Energy Efficiency and Renewable Energy of the U.S. Department of Energy, and your various state and city agencies involved in energy use and advanced clean city initiatives, etc.

You will be astonished at what is already being done NOW.  The initiatives in the works are even more radical as tools to secure your organizations energy future.  It is becoming the fudiciery responsibilty to have plans and initiates in effect to show your major shareholders and other invested and or interested parties.

We are beginning to lay the path to exchange information, to assure that you and other organizations and firms get the contacts and the knowledge you need to begin phasing in a secure and knowledgable energy future. The efforts of those taking a leadership role is a demonstration of corporate and civic  responsibilty that will be, and should be, recognized.  You will not be traveling alone, and the road to change will be rewarding to you, your organization, your region and nation, and to the world, as we reduce waste, enhance security, and create a more stable and safer world.  
Will you join this effort to secure your firm, you nation, and the future of us all?
O'K', grade it, and see what you think....I want to hear it, good or bad....

It's fun to work on, straight from the heart.....

Roger Conner  known to you as ThatsItImout

So here goes  (NOT proofread due to time, rough draft):
"Mr. Blair, you are responsible for an organization in the United States.  

Your question is lost on me, as I'm already on board with teh whole conservation idea.   The idea is how to get the masses signed up.

Readership here on TOD is going to fall into agreement.

Energy.  I ask you, how long could your firm survive without an adequete supply of energy?

I'm already consolidating servers, picked other businesses that are food and energy conservation related.   In fact, when I got a letter from the local energy company telling me to 'go green' my 1st reaction was "yes, I should buy some more solar panels."

The reason sacrifice is hard to sell derives from the neurobiology of human temperament and addictive behavior, according to the book American Mania: When More Is Not Enough by Dr. Peter Whybrow.  From a review in Medscape Today:
In the search of understanding the recent American economic and neurobiological deregulation, unparalleled in previous decades, Dr. Whybrow looks to 19th-century philosopher Adam Smith for answers. Adam Smith combined understanding of human behavior and study of free-market society to explain how competitive drives and self-interest can be constrained by strong societal structure and thus transformed into self-regulating economic order. In particular, according to Smith, small markets and community identifications created obligations to individuals that set limits to instinctive cravings. In other words, the desire to be accepted by the community placed constraints on the addictive desire to consume endlessly and compete recklessly.

The book argues that we have entered a new era in which the 24-hour global economic market has diluted the checks and balances inherent in the self-limiting, community-based markets of the past. This has become a new experiment unequaled in the history of human biology, as our brains are not equipped to handle unconstrained consumerism. Dr. Whybrow writes:

Seduced by the novelty and the opportunities afforded by our wealth, we have passed beyond need and fallen into an addictive striving for more: for more money, more speed, more house, more car, more food, more choice and more power . . . here lies the nightmarish paradox of the American dream: in our striving for more, we are discovering a miss-match between the wealth of goods and the technology-rich environment we have created and the biological limits of who we are as evolved creatures of our planet. [page 106.]

Dr. Whybrow offers examples from neurobiology of temperament and addictive behavior to show how pursuit of pleasure, the neurocircuitry of novelty seeking, and migrant temperament are correlated through their ties to the pleasure-seeking dopamine neurotransmitters in the more primitive regions of the brain.

Fine, then I will repeat myself

Roger Conner  known to you as ThatsItImout

First to post a comment.  I recently rediscovered (because I had seen this site about a year ago but didn't take an in depth look) a private oil and gas policy Russian think tank called "Institute of Energy Policy: http://www.energypolicy.ru/emap.php  The president is a former deputy energy minister of Russia and claims to have written Russia's old energy policy.  The currently the site is free but this could change.  More information is available on the Russian version of the site but the English version has many presentations.  
He has a number of comments on Gazprom, stating that two of their top two gas fields will decline 30% from 2004 to 2010.  He states also that the Russian state is slowing private growth (non-Gazprom) in gas production and that most pipeline and greenfield projects will very likely be delayed.
The think tank likens Gazprom to the old Russian joke from the Soviet times: "If Gosplan was in charge of the Sahara Desert, in two years they would run out of sand."  Here are a link to presentations: http://www.energypolicy.ru/pv.php?subpartnum=10 (click on the presentations in English)  
Mr. Milov (the president of that "think tank") is regarded in Russia as US's creature. He was kicked out from the ministry a few years ago and now is an outsider in russian politics. He periodically publishes articles in the russian business dailies, but his works are carrying an unmistakable flavor of american money.

Thanks very much for posting the very informative Russian presentations. The declining production on existing gas fields, and difficulty in getting new fields going adds a new dimention to what we have been reading about in the papers.

I've met Mr Milov. He's smart and smooth, but I disagree with what he says about Gazprom.
Well, just to give some context about Merkel and Putin, a couple of things to ponder -

  1. Putin spent some of his KGB time in Germany
  2. Merkel, a typical East German, learned Russian in school
  3. Neither of them grew up in anything which could be called the free market West
  4. Putin is in charge of one of the world's largest energy suppliers, while Merkel is currently the elected head of the world's largest exporting nation

And here is a couple of places where their interests intersect -

  1. The Russians need technology and capital goods, and the Germans are an excellent source of both.
  2. The Germans need energy and raw materials, and the Russians are an excellent source (in terms of quantity) of both
  3. The Germans are world leaders in renewable energy - the Russians would like to be world leaders in selling non-renewable energy, and seem to have acquired a fairly sophiscated appreciation of how much money is to be made by not merely supplying fuel, but by being the middleman in distributing (ExxonMobil doesn't make the big money through production - which was the whole point of Standard Oil being broken up.)

It will be interesting to see how the German dislike of Russia will play out - increased emphasis on renewable energy/efficiency/conservation to escape the bear's hug, or a certain wilful blindness in terms of the longer term while using Russia as an energy supplier in the short term.

But unlike the truly bizarre relationship between American and the homeland of Osama Bin Laden and his royal friends, it is very unlikely that either the Russians or Germans will become too attached to the other. It is in both of their interests to have profitable commercial relations, since neither of the world wars nor the Cold War turned out that well.

This was the point about Realpolitik in a previous post - it is better than war, though it also encompasses warfare. But it is no one's interest in Russia or the EU to think about their relations in terms of war or military frameworks - European warfare is about destruction in the end, and Europeans already pushed that about as far as it could go 50 years ago (after having thought they had pushed it as far as possible 30 years before that).

The current leadership of the United States seems incapable of even beginning to understand this reality, and its eagerness to frame everything in terms of military metaphors is a sign of a certain deep sickness.

Though I am certain that both Putin and Merkel were dealing at a very pragmatic level in terms of natural gas, it is not inconceivable that both of them are getting concerned about a nation led by a frat boy president who can't even seem to grasp the basic rules of protocol between heads of state, much less how to invade a country successfully.

Hard as it may be to imagine, Putin may feel that dealing with the Germans and the EU is the safest alternative for Russia over the long term - and if you know anything about Russian history in terms of Germany, that is a stunning thought. After all, the Germans don't constantly talk about how the U.N. hobbles their actions in terms of blowing up whatever or whoever they want, or constantly refers to itself as the world's greatest military power, committed to total spectrum dominance (or whatever the latest hype this week is). Or seems poised to strike at a country which essentially borders Russia. Or strike at any country which stops selling oil to America since it is proof they have joined the dreaded axis of evil (ala Chavez). My guess is that Putin has just essentially told Bush and Cheney that the buck stops at his desk, not theirs. And it seems like Gazprom was not informed of Putin's decision beforehand either - how refreshing to see a government leader who may actually be putting his nation's interests in front of his cronies' corporate interests. Not that I think Putin is some sort of decent human being - his KGB background is proof that he isn't - merely that Putin seems able to see a bigger picture than someone who seems more concerned about this quarter's profits in terms of his Halliburton stock portfolio.

Love to see how the oil ruble project looks in a decade - especially in contrast to the dollar.

A note on Putin from WP:
During the 1990s, Putin received a sub-doctoral level degree in economics from a mining institute in St Petersburg. His dissertation was titled "The Strategic Planning of Regional Resources Under the Formation of Market Relations".
Times are changing, and with them alliances. Two hundred years ago, Germany and Russia were allies against Napoleon. A new common foe could be developing in the south, Russia already has a muslim problem at it´s southern borders (chechenya) which is spreading (Aserbaichan(muslim)/Aremenia(christian)) and could reach into the Stans in Asia.
I doubt very many places outside the US people would consider it realistic that "Muslims" are going to be the next great enemy.  Russia's problem in Chechnya isn't due to them being Muslim, it's due to them wanting to be independent and Russia not letting them.  
And of course, look at where the pipelines run - Grozny is not exactly unrelated to oil.
Actually, it is a touch more complicated than that - there was no Germany at the time. The Prussians and the Russians certainly opposed Napoleon - and as with England, various Russian, Austrian, German royal families were inter-married until the end of that era, 1917/18. (House of Windsor - jawohl)

But Russians have always had their problems with various German(ic) invaders, and speaking broadly, the fact that there are no natural borders between Germany and Russia (apart from distance and weather, something a West European like Napoleon or Hitler was not able to grasp) tends to lead to a certain wariness on the part of Russians.

Great post.  You may want to read the 3 bears story here: http://www.atimes.com/
"much less how to invade a country successfully."

Neither the germans or the russians have figured out this tricky move.  I will say, sacking the Iraqi cops and troops was a remarkably bad way to go about it.

Lets put some numbers on Shtokman:

Gas condensate field
535 km from shore
350 m of water
N of Arctic Circle

113 tcf of gas
31 million tonnes of condensate

It is anticipated that the Shtokman field will require three or four phases for full field development. The development will include up to four platforms. Sevmorneftegas have estimated that the total number of wells required to develop the Shtokman will be around 156, which breaks down to 144 production wells, three monitor wells and nine reserve wells. There are likely to be around 40 wells completed subsea.

Early estimates predict that TLP and spar-type platforms are likely to be the most preferable choices of platform construction. The key feature of the design is the strengthened angled ice wall in the zone of ice impact.

Compare with:

Groningen onshore The Netherlands >73 tcf of dry gas

Troll East off shore Norway 35 tcf of gas


On a phys course about energy i attended, the professor was familiar with and addressed some of the challenges surrounding Shtokman.

-Icebergs. There are lots of giant icebergs there, threating sub-sea equipment. They do scrap the bottom, not even mentioning what they can do to platforms.

- electric supply. Is it doable to have on-site electric generation? Platform seems out of the question. There had been discussion about employing a nuclear submarine to manage electricity.

-Transportation. Shtokman is out of range for the helicopters, so there must be established additional landing opportunities for refuel, safety etc.

So why can't they have on-site electricity generation?

And do Icebergs really scrape the bottom 1000 ft down?  What about the pipelines - one for gas and one for liquids - or do they think they can do this with multi- phase flow?

Or maybe they will offload liquids to ice re-inforced tankers?

This Giant field was discovered in 1988 - so I was wondering why it wasn't developed before - why is it being considered for development now?

CERA - are you out there?  Us dummies need some answers!

On-site electricity:
I would guess it certainly is possible, but i belive the main obsticle is icebergs - particular if the production involves platforms, which is not very manuverable. As far as i know, it's not feasible to have sub-sea generation unless one goes nuclear.

I guess it's possible to use a more manuverable stand-by ship for el-generation, but there is still a problem; the cable.

Yes, according to my prof, they do scrap the bottom. And it certainly seems plausible. According to Wikipedia icebergs normally sizes up to 75 meter above the surface, with the record observation beeing 165 meter. Add that 90% of the mass is beneath surface it seems plausible that they scrap the bottom pretty often. I guess it also would depend on the shape of the icebergs and weather conditions.

I have personally experienced a storm in the barent sea, not very far from Shtokman. Big waves - it's easy to picture an iceberg smashing sub-sea equipment or redesigning the sea floor on the way down from a wave-top.

As far as the impression i got from the professor, there are a number of problems to solve before Shtokman can be produced.

Just for the record; i'm not studing oil-related topics nor am i particular knowledgeble on Shtokman or sub-sea technology.

These are the icebergs from Greenland you are talking about, arriving in the Barents Sea after taking a ride on the Gulf Stream? That's not likely at this time. I think that they are mostly worried about sea ice sheets being pushed against them by wind.
Climate change may affect this in the future. When the Arctic ice cap melts we will get even bigger waves smacking into the platforms.
If Greenland has it's ice cap lifted off contact with the bottom by meltwater thirty years from now and the ice cap surges into the ocean, icebergs will be the least of our problems. Ten meters of water is going to flood a lot of the world's market for natural gas. People live along coastlines.
Re  wolf:   "Gas condensate field 535 km from shore".
I was wondering...
What is the energy cost- or loss for transporting natural gas per 1000 km?
And is the loss included in the figures we see?


And1 - idon't know the answers - that was why I was wanting the wise men at CERA to provide some.  Shtokman is a truly gigantic fiied but it seems to me that it has equally gigantic problems.

When you start talking about producing gas condensate more that 500 km from shore, building "islands" for helicopters to land on, producing via a TLP "hardened" against ice berg and polar bear attacks - I really begin to wonder.  Do the Russinas not have anything easier to go after?

 Re. Wolf:  " gas condensate more that 500 km from shore"
Could cost estimates for CO2- pipelines be used as a guideline ?
Some data das been published on pipeline costs in the north sea.
Fig 4.3 in link below gives pipeline cost estimates for various dimensions and scenarios.
typically 0.5-0.7 million USD/KM for a 0.5 meter pipeline ?

For loss rates I have found this: http://nautilus.org/archives/energy/grid/materials/fujii.pdf
Slide 17 states 2.3% (energy)loss/1000 km

This is similar to the values in this doc from 2002.

Cit: "While petroleum and its products remain one of the primary commodities transported by maritime shipping, pipelines efficiently transport in the oil and natural gas, accounting for 60% to 70% of oil shipments in the U.S. (USBTS, 2000). Competitive with water freight transport, pipeline transportation for these energy supplies costs 1.2¢ton kWh, with an efficiency of 0.21
kWh/ton/km" .
Do these values cover all energy transport costs? For example leaks?

This could be the case- as I have found one source mentioning almost the double :  a 5-10% pipeline loss for 2100 km.
Cit."The Coselle CNG system gets its name from its primary unit: lengths of standard 150 mmpipeline coiled around a large carousel. A total of 144 coselles are installed per vessel, providing 2100 km of pipeline. Energy loss is about six to nine percent, compared to five to 10 percent for the average pipeline."

Are these values realistic?


Pipelines are the most energy efficient means of transportation, generally.  The frictional losses vary widely with pipeline diameter, flow and pressure.  I suspect that this pipeline will be the minimum diameter to move the massive volumes of NG.  Laying this pipeline will be expensive !
Yes, but they will I believe need two pipe lines - one for gas and one for liquids - unless they plan to off load the liquids into tankers.
If they are selling to Germany & France, why LNG ?

Cheaper to run pipeline through Finland, Sweden & Denmark (or even other routes) perhaps connecting to other pipelines along the way that Gazprom might own.

This would save the massive investment on the Kola Penisula near Murmansk.

Perhaps Shtokmann (spelling) explains the recent electrification of the railroad to Murmansk on Dec 24, 2005.  One step in improving the supporting infrastructure.

Interesting point - the apparent plan is to hook up to Norway's gas network, which means the cost of selling gas to Europeans becomes much cheaper than shipping it to North America.

America is looking pretty much like the odd man out in a lot of these arrangements.

Focusing on military arrangements tends to be a very short sighted way to run a society. Just ask the Europeans, who have long term experience with that, or the Founding Fathers, who recognized that fact and tried to prevent it from hobbling to the country they were creating.

Remember also that the environment in the Arctic is changing rapidly..sea ice shrinking and permafrost melting.  How will these trends affect Shtokman?
Less sea ice, more ice bergs I'd guess.
Sustainable?  A 50 - 70 year supply is now "sustainable"?  Maybe "long term" but to me a sustainable energy source is something that lasts longer than 70 years.
Deep Drilling For Oil - Simmons and Lynch

This will be the best hour of radio you hear today.

Thanks for the link.  Tom Ashbrook usually does a good interview.
Since Chavez has been in the news recently for calling Dubya the devil, I have two questions I have for all of you TODers.

  1. Have there been any significant Citgo boycotts? What effect would such a true boycott have (if any) for Citgo stations, and PDVSA's income?

  2. What is the potential for the Orinoco reservoir? Would appreciate links from pevious posts or websites.

Peak oil music, part one:
Enya, "Orinoco flow"


I received a 'boycott' Citgo email from one of my 'fundie' friends last week. I 'replied all' to it with my opinion that it was pointless to simply go and buy the same gallon of gasoline somewhere else and that the only way to make a difference to Hugo and all the other 'bad boys' in the oil patch was to reduce individual consumption. One easy way to do this (besides just driving less) is to 'eat local'. I included a link to one of the recent TOD:UK posts on the same. Have not had any feedback on this suggestion. I happen to know his wife buys their food at Walmart.
He has had most of the areas around his house where people usually have flower beds cemented over with just a few smallish prickly hollies along the front. His lawn is Zoyia sodded so it doesn't need mowing. There also are no trees. He does not like working in the yard despite growing up on a farm. He prefers tinkering with his various antique cars in their 6 car garage. He has a great many friends just like himself. All are 'values issues' voters. We are friends due to having worked together for many years. He tried very hard to convert me into a 'values' voter and I tried equally hard to convert him into a 'green' voter. Neither of us had any sucess whatsoever.
Some of us think that Chavez was right at the UN, Bush is the devil. He is certainly the worst president since James Buchannan, the Democrat who let the crazies start the Civil War. Personally, I plan to buy more PDVSA-Citgo gasoline and junk food, even though eating more French Fries made me gain 5 lbs. or so. More French Kissing was fun though...
Wind energy equipment suppliers face order rush as demand picks up
Published: Sunday, 24 September, 2006, 11:07 AM Doha Time

SYDNEY: Wind energy equipment suppliers are getting a rush of orders they may have difficulty filling amid increased demand for renewable energy power, said an executive at a unit of Allianz AG, Europe's biggest insurer.

By the end of September announced orders this year for wind turbines will be equal to the total number of orders for the whole of 2005, Bill Calcraft, managing director of UK-based Allianz Specialised Investments, which invests in renewable energy, said at the Global Windpower 2006 conference in Adelaide, Australia.

Higher oil prices, as well as state subsidies and incentives for wind energy in Europe, the US and Asia are helping buoy demand and boost investment in wind energy generation.


A scarcity of major components for wind turbines such as gear-boxes and bearings is a "major concern,'' said Sarvesh Kumar, director of the Indian Wind Turbine Manufacturers Association. In the last year or 18 months prices for wind power generators increased for the first time in many years, he said.
The growth in the wind energy industry will probably slow, given supply constraints tend to emerge in any industry expanding at more than 10% to 20%, said Greg Bourne, chief executive officer of the Australian unit of WWF, an environmental group.

The solar power industry is experiencing similar constraints with a lack of silicon manufacturing capacity, he said. [More]

``Eating us out of house and home and gear-boxes and bearings and polysilicon and...''
What they didn't say was that Australia has dropped the ball on windpower with several proposed sites being cancelled. Reasons given include concerns over rare bird migrations and increasing the renewables target from 5% would be too hasty, or anything else Big Coal dictates. Danish wind company Vestas set up a factory near some of the best proposed sites but recently shut down due to lack of orders.
IS THIS RIGHT? Did Cantarell production fall by 13% in June 2006?
Official Confirmation of Former Energy Secretary as Mexican President-Elect is Welcome News for Potential Investors


Data released by the Energy Secretary showed that production from the Cantarell field fell by 13% to 1.74 million b/d in June 2006 from the same month in 2005 and again in July to 1.71 million b/d.


This is the first I've heard of production falling by a whopping 13%.
The drop from June to July is more than 21% annualized.
But, aug to aug is up 1.6%. Premature to talk about crashing... maybe compare first eight months?
Where did you get August data?

I have seen that there are large corrections made to data after it is first reported.

I agree with this. We need to look at the bigger picture instead of cherry-picking and amplifying certain months. And I second the question above about where this data is coming from. On the Pemex site I have found great monthly data for overall production and great field-by-field data, but only on an annual basis.

Can anyone provide monthly Cantarell data for the last 3 years or so?

Here is the link

Only anomaly is July last year when hurricanes shut down production of Mexico GOM for a few days.

Shtokman top production is planned to be 100 bcm a year, but this takes time. This means that it will barely offset the declining North Sea gas production (UK, Denmark, Germany, Norway). It should offset also the declining production from the older Russian fields. Shtokman is needed to keep the Russian gas exports to Europe satisfying the growing demand and domestic consumption. There will not be much left over to export to the US. So the decision to reconsider the LNG deals is quite natural.
HO - I hope you'll take a look at my comments on Gazprom in your last thread a couple of weeks ago...

Drop me a line if you start a new thread that has anything to do with it, so that I can be on it quickly! I've been travelling recently and not able to read OD as often as I'd like to.