<The Loglet AnalysisThe Oil DrumDrumBeat: September 8, 2006>

39 comments on Russian Gas Supplies next winter for Europe ?

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PaulusP on September 7, 2006 - 5:22pm Permalink | Subthread | Comments top
HO

Over the years this Russian gas thing will get more ugly, especially since all is piped through Ukraine, which is not a reliable customer. If their share is cut off because they don't or can't pay the desired price, they'll take a slice of the gas destined for Europe.

However, I really do not see any correlation between Moscows' ELECTRIC energy deficit, which mainly comes down to poor electric infrastructure(not a lack of gas), and gas supplies to Europe

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Heading Out on September 7, 2006 - 5:58pm Permalink | Subthread | Parent | Comments top
Sorry, I was a bit pushed due to having to go in that general direction this weekend (so things will be light again from me for a while). I posted, some time ago, about how Gazprom and the Russian government are moving to deliver more power into the hinterland.  I was using the flagship of Moscow as an illustrator of the potential problem.  We have had discussions here before about the growing tension between internal use and exports, and I was just pointing out my anticipation that this is going to get worse, not better, (for the export side) and that there should be a growing concern, particularly at the more distant ends of the pipelines.
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Jack on September 8, 2006 - 1:51am Permalink | Subthread | Parent | Comments top
With all due respect HO, this does underline how sloppy much this analysis is. I have made the same observation that PaulsP did several times. The vast majority of the stories about supply shortages in various countries have no direct link to peak oil or the point that people are trying to make by posting them.

If the posters (I see Leanan and WesTexas as the greatest offenders) would try to show how the problem they link to supports the point they are trying to make, I think even they would see it does not exist.

I call these stories "A light bulb went out in Bangladesh, which proves peak oil is here" stories.

In almost all cases, the cause is poor infrastructure or rising energy prices. The world knows that energy prices are rising and would expect this to impact demand, particularly among the those that can least afford increased costs. infrastructure failures in developing countries have been happening for decades. I would guess less happen now because infrastructure has improved, but we se more now because we have access to more information and people are actively looking for these stories.

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mencial on September 8, 2006 - 10:54am Permalink | Subthread | Parent | Comments top
For me, the point of those stories is to highlight the real cost of PO. As the economists say, oil will never run out, people will just stop wanting it. That is, in ecomonistspeak, it will be too expensive. So as oil production growth slows down, prices will go up, and demand destruction starts. And it will start with light bulbs going off in Bangladesh. Where it stops, nobody knows, and the difference in beliefs is what distinguish doomers from cornucopians.

The fact that Bangladesh has poor infrastructure just makes them more fragile to high prices. But higher prices do mean people will have to do with less oil, starting with the poorest ones.

BTW, I think that the point with the Moscow shortage is not to show that gas is peaking, but that Russian politicians will try to divert some gas previously destined for exports to local consumption, making things more difficult for importers as some TODers have predicted.

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xironman on September 8, 2006 - 3:34pm Permalink | Subthread | Parent | Comments top
If the posters (I see Leanan and WesTexas as the greatest offenders) would try to show how the problem they link to supports the point they are trying to make, I think even they would see it does not exist.

I think you see an agenda that does not exist.  If you have an issue with a post and an opinion discuss it with them.  They are posting stories about energy, kind of what a discussion about energy and our future is about, eh?
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Oil CEO on September 9, 2006 - 12:28am Permalink | Subthread | Parent | Comments top
He does. He does all the time. You should know that Jack is one of the few people(along with Leanan and Westexas) who consistently discuss energy issues. He was discussing. Perhaps you missed his arguments regarding ethanol. They were the only thing to keep it from being a completely one-sided turkey-shoot. Khosla certainly didn't show up to do any debating.

If he saw an agenda that did or did not exist, he had every right to do so. I happen to agree with him. Sometimes I don't. Do you have an agenda? Are you trying to shut down debate?

I'm looking at oil today at five-month lows. $63 for Brent. Maybe you or somebody else would like to tackle that. I've just scrolled through over 500 comments on several recent threads and see barely any mention of this story. So please remind me what exactly is the agenda "that doesn't exist?"

If you have something to say for or against the points he was making, then say them. Don't shoot the messenger.

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expat on September 9, 2006 - 1:39am Permalink | Subthread | Parent | Comments top
Yes, the price for Brent crude is declining - as is production, of course. And as are British home prices, apart from London and foreign buyers, often just coincidentally from countries where oil is the major export commodity.

Too many people focus on high prices, which may come from watching too much TV and believing this is an education in economics and markets.

But if the price of oil is in a serious decline, let's say because of a soon to be impossible to ignore collapse in the world's largest debtor nation, then where are the funds for replacing some fairly worn out infrastructure to come from? Will the price essentially porpoise repeatedly, leading to even more massive disruptions? A fairly typical scenario from just a while ago, I recall.

I hate getting into the logistic/geologic peak oil side of the debate, but this is the sort of subtle exchange of opinions which has also tended to be in shorter supply over the last period. Price is just one measure, while what comes out of the pipeline another. And what comes out of the pipeline trumps everything else - just ask the British or Italians about their experiences last winter. The former Italian prime minister talking on TV about covering pots when cooking was something told to me by an Italian co-worker - and some people thought Carter was silly for wearing a sweater. But I think Berlusconi lost for different reasons then lecturing about energy conservation - his involvement in Iraq was not a plus in a country which could turn out millions of anti-war protesters, for example. Along with massive crony capitalism - except his only crony turned out to be himself in the end, an unpardonable sin.

I am as guilty as any of getting off topic, of course. Tempus culpa, or something - the dead hand of entropy is never far in a complex system. And yes, Leanan talks about more than simply energy issues - it makes her interesting.

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haggisbasher on September 9, 2006 - 6:02am Permalink | Subthread | Parent | Comments top
Yes, the price for Brent crude is declining - as is production, of course. And as are British home prices, apart from London and foreign buyers, often just coincidentally from countries where oil is the major export commodity.

Where does the information on UK house price falling come from?

Average price rise in the UK over 12 months to Aug 7.7 %.  That is comfortably above the rate of inflation, and all areas with high volume of sales show increases.

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm
Apart from that, I entirely agree that the breadth of perspective given by the links to various stories from around the world is an enormous plus to the site - Leanan does an excellent job here.

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expat on September 10, 2006 - 1:48am Permalink | Subthread | Parent | Comments top
Actually, my information is a touch out of date, it seems -

'House prices in Britain rose 0.2% in July after two months of declines, to an average of $333,992 according to the Halifax Index, kept by mortgage lender HBOS.'

http://news.moneycentral.msn.com/provider/providerarticle.asp?Feed=BWK&Date=20060823&ID=5966 295

It seems as if the consensus opinion is that as long as the Bank of England leaves interest rates untouched, the price rises will continue or at least not decline. Which was certainly the case during late 2005, when the hissing from the bubble started to get a bit deafening.

Of course, the British experience in the early 1990s remains a wonderfully documented cautionary tale of how a real estate market can rise and fall in a natural rhythm.

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xironman on September 9, 2006 - 6:02am Permalink | Subthread | Parent | Comments top
If he saw an agenda that did or did not exist, he had every right to do so. I happen to agree with him. Sometimes I don't. Do you have an agenda? Are you trying to shut down debate?
An agenda? No, Don't have the time to have an agenda.  

Shut down debate?  Not sure where that comes from.  I am just saying that if you have problem with a story, say it.  Don't infer an agenda from the posters, unless they actually say that the story proves peak oil.  

If you have something to say for or against the points he was making, then say them?  I am not sure I would call it a point, it was a broad statement about posters conduct without any underlying examples of why it was true.

Don't shoot the messenger?  I was defending the messengers.

I don't follow oil prices closely, so someone else could probably answer your question better.

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Oil CEO on September 9, 2006 - 6:29am Permalink | Subthread | Parent | Comments top
Oh, please. Everything cuts both ways here. Jack has as much right to say what you or I or Leanan or Westexas or anybody else does. But you know that now. I apologize for my tone. Hope I'll see you at ASPO Boston.
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xironman on September 9, 2006 - 6:11am Permalink | Subthread | Parent | Comments top
BTW: Apologies to HO for taking this off topic. I should know better. I just thought some reply was necessary.
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Robert Rapier on September 9, 2006 - 12:38am Permalink | Subthread | Parent | Comments top
I call these stories "A light bulb went out in Bangladesh, which proves peak oil is here" stories.

LOL! I love it. That sentiment has sort of been bouncing around in my head for a while. Data that doesn't fit the model is often ignored. We can't operate in that way and hope to maintain credibility.

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