<A Birthday Thought The Oil Drum Peak Oil Contango?>

176 comments on Thursday Open Thread

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haggisbasher on March 23, 2006 - 5:28am Permalink | Subthread | Parent | Comments top
Although shipping costs are affected by bunker costs, they are impacted to a very large extent by demand. Supply of shipping is relatively inelastic in the short term - it takes a couple of years to have a ship built, and owners will accept break even rates to keep vessels going rather than lay them up. (Witness the strong freight rates over the last couple of years due to the increased activity in China and India).  Rising costs of oil will begin to impact both disposable incomes, the costs of manufacturing plastic crap and all other internationally traded goods.  There is a strong possibility of a decline in world trade, leading to an slump in freight rates.  I believe this effect, coupled with the rise in operating costs due to bunkers, will make shipping a very precarious business in the not so distant future.

 

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PaulusP on March 23, 2006 - 8:09am Permalink | Subthread | Parent | Comments top
Earning a living serving shipping companies, I can tell you that the industry is surprisingly well informed. They have to be with fuel costs rising. My clients have either converted their vessels from running on gasoil (diesel)to heavy fuel, or sell their old ships and build new ones to run on heavy fuel.
The latest newsletter of one of my clients said they were selling old ships and build new ones on heavy fuel literarely because the world was running out of light sweet and that fuel prices therefor will continue to rise.
There is by the way, as with oilworkers, a surging demand for engineers with the skills to run these more complex machines.
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PaulusP on March 23, 2006 - 8:11am Permalink | Subthread | Parent | Comments top
Wall Mart may therefore not go down on shipping the goods over 12000 miles, but distributing all that stuff with trucks.
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Ridge on March 23, 2006 - 9:20am Permalink | Subthread | Parent | Comments top
Walmart has plans to double the fuel efficiency of their trucks by 2015, from 6.5 mpg to 13 mpg.  13 mpg may not be great, but at least it's going in the right direction.

http://www.walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=349

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reno on March 23, 2006 - 10:39am Permalink | Subthread | Parent | Comments top
13 mpg may not be great, but at least it's going in the right direction.

This would be a miracle if they could pull this off. I would like nothing better than to see big truck get at least 10 mpg's on the road.. I drive over-the-road and know how much fuel truck take each year to run.

I also see they have a statement from the Rocky Mountain Institute and are looking out to 2020..  

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Cherenkov on March 23, 2006 - 8:19pm Permalink | Subthread | Parent | Comments top
Anyone here ever hear of railroads? Only the most efficient way to transport goods.

Why are we keeping a fleet of vehicles and the concomitant roadway system in the mix?

That seems pretty stupid.

Why not take the oil we do have, at this relatively cheap price, and revive the rail system? Revive the streetcar system?

The amount of fuel saved over the lifetime of a railroad would be exponentially greater than the fuel saved by more marginally more efficient trucks.

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AlanfromBigEasy on March 23, 2006 - 11:25pm Permalink | Subthread | Parent | Comments top
And run the railroads on electricity. 3x as efficient energy wise (and uses a flexiable energy source). See EU & Japan (and Russia in a MASSIVE conversion).

Urban Rail of all types, subway/rapid rail, light rail, commuter rail and streetcars all offer 100 to 1 energy savings as well as a better "fuel" than our cars.

My article (once again)

http://www.lightrailnow.org/features/f_lrt_2005-02.htm

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AlanfromBigEasy on March 23, 2006 - 1:58pm Permalink | Subthread | Parent | Comments top
PreKatrian, there was talk of a prototype barge tugboat that ran on bunker fuels instead of diesel.  No refueling infrastructure up now, so refueling in New Orleans & Chicago were considered at first (using ocean going fuel depots).

Asphalt and bunker fuels are not that close to peak yet.  Light sweet down, down, heavy production up.

Also, if one ranks transport by energy efficiency, the following ranking is close to correct (with caveats).

  1. Pipeline
  2. Water (ocean & barge)
  3. Rail
  4. Rubber tires
  5. Air

Trucking a container 1,000 km (or miles) takes more oil, and higher value oil, than shipping that container 10,000 km (or miles) by ship.

Asian cargos bound for US East Coast would use less energy to go to NEw Orleans, then barge up Mississippi River system and rail to final destination than going to LA and turck/rail from there. Of course, factors other than energy use factor into shipping decisions.

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PhilRelig on March 23, 2006 - 9:58am Permalink | Subthread | Parent | Comments top
Sorry, this may be a stupid question, but what exactly is a "bunker cost"?  Does "bunker" refer to the proper name of some type of heavy fuel commonly used by large trans-oceanic freighters?
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haggisbasher on March 23, 2006 - 10:43am Permalink | Subthread | Parent | Comments top
Wikipedia does it as well as I can:-
Bunker Fuel
Bunker fuel is technically any type of fuel oil used aboard ships. It gets its name from the containers on ships and in ports that it is stored in, called bunkers. Bunker A is No. 2 fuel oil, bunker B is No. 4 or No. 5 and bunker C is No. 6. Since No. 6 is the most common, "bunker fuel" is often used as a synonym for No. 6. No. 5 fuel oil is also called navy special fuel oil or just navy special, No. 6 or 5 may also be known as furnace fuel oil (FFO said ef-ef-oh), and its high viscosity (thickness) requires it to be heated, usually by a reticulated low pressure steam system, before it can be pumped from a bunker tank.

Typically motor ships (as opposed to steam ships) use diesel when entering and leaving port, and switch over to heavy fuel oil once on passage.  

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PhilRelig on March 23, 2006 - 10:01pm Permalink | Subthread | Parent | Comments top
Thanks!
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176 comments on Thursday Open Thread

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