The Union of Concerned Scientists Report on XOM: How Does It All Fit In?

The ongoing tie between a plateauing oil supply and climate change continues to rear its ugly head. So, for your perusal this evening, I submit the following: A new report titled Smoke, Mirrors & Hot Air from the Union of Concerned Scientists asserts that ExxonMobil (XOM) has adopted the tobacco industry's disinformation tactics, as well as some of the same organizations and personnel, to cloud the scientific understanding of climate change and delay action on the issue.

A link to the report can be found here. Hat tips are due to James Fraser of The Energy Blog and Seeking Alpha. Their summary of the report is copied under the fold.

According to the report, ExxonMobil has funneled nearly $16 million between 1998 and 2005 to a network of 43 advocacy organizations that seek to confuse the public on global warming science.

Seth Shulman, an investigative journalist, wrote in the UCS report:

When one looks closely, ExxonMobil's underhanded strategy is as clear and indisputable as the scientific research it's meant to discredit. The paper trail shows that, to serve its corporate interests, ExxonMobil has built a vast echo chamber of seemingly independent groups with the express purpose of spreading disinformation about global warming.

The report details how the oil company, like the tobacco industry in previous decades, has

* raised doubts about even the most indisputable scientific evidence

* funded an array of front organizations to create the appearance of a broad platform for a tight-knit group of vocal climate change contrarians who misrepresent peer-reviewed scientific findings

* attempted to portray its opposition to action as a positive quest for "sound science" rather than business self-interest

* used its access to the Bush administration to block federal policies and shape government communications on global warming

The report documents that, despite the scientific consensus about the fundamental understanding that global warming is caused by carbon dioxide and other heat-trapping emissions, Exxon- Mobil has funneled about $16 million between 1998 and 2005 to a network of ideological and advocacy organizations that manufacture uncertainty on the issue. Many of these organizations have an overlapping—sometimes identical— collection of spokespeople serving as staff, board members, and scientific advisors. By publishing and republishing the non-peer-reviewed works of a small group of scientific spokespeople, Exxon- Mobil-funded organizations have propped up and amplified work that has been discredited by reputable climate scientists.

"ExxonMobil needs to be held accountable for its cynical disinformation campaign on global warming," said Alden Meyer, the Union of Concerned Scientists' Director of Strategy and Policy. "Consumers, shareholders and Congress should let the company know loud and clear that its behavior on this issue is unacceptable and must change."

ExxonMobil, like many other companies, will do whatever is legal to benefit its directors, managers, and shareholders. Ethics and morality should play a bigger role.

ExxonMobil(XOM) sponsoring so called independent scientists to refute global warming is no different than sponsoring CERA to produce reports stating that peak oil is decades away.

If my chart below showing forecast supply, demand and price is true, then XOM will use all legal tactics to slow down the rate of nationalisation of oil assets. XOM must be seriously concerned about losing upstream oil assets and transforming into an oil service company such as Schlumberger or Halliburton.

Some of the key points of the forecast:

For 2007, the oil price stays above $US55 and could reach $US80 by Dec2007.

An unfavourable gap between forecast demand and supply starts in Oct2007 which could cause significant economic pain. If this forecast gap is true, it would be of great concern to XOM.

The oil price continues to show seasonal volatility and reaches almost $US110 by Dec2010. Price volatility could increase due to unpredictable events such as hurricanes, terrorism attacks, Middle East conflicts, unusually cold/warm weather and unexpected high production decline rates. For example, Saudi Arabia oil production might show an unexpected decline or the US/Israel could take military action against Iran.

Given the large number of assumptions, OPEC intervention and speculators, the above forecast has very high uncertainty.

Forecast assumptions:

World total liquids supply declines at -0.8%/year and demand increases at 1.7%/year. The decline is estimated from scenario 1 of my guest post on the oil drum http://www.theoildrum.com/story/2006/12/11/231813/91

The demand growth comes mainly from China, Other Asia and Middle East while growth rates from OECD vary from 0.1% to 1.0%. These growth figures are based partly on the IEA monthly market reports. http://omrpublic.iea.org/archiveresults.asp?formsection=tables&formdate=... Liquids include crude oil, lease condensate, NGLs and processing gains. Although forecast demand is greater than supply, the gap is closed by increased price because ultimately demand must be approximately equal to supply.

Mild northern hemisphere winter weather is assumed to continue and the price forecast from Jan2007 to Jun2007 is assumed to be a simple linear regression forecast based on the oil price (SDR) historic trend from Jan2002 to Dec2006.

Price elasticity of oil demand is assumed to increase from 0.10 in Jul2007 to 0.52 in Dec2010. The elasticity is assumed to be the same for increasing and decreasing prices. Elasticities are assumed to constant for all countries. For an interesting paper on elasticities –
http://cta.ornl.gov/cta/Publications/Reports/ORNL_TM2005_45.pdf

The oil price is forecast is SDRs (Special Drawing Rights) which simulate a global currency. The USD has devalued significantly against the Euro during the last few years and oil price increases measured in the USD gives a distorted view. It is assumed that the USD:SDR exchange rate remains constant at 1.50 from Jan2007 to Dec2010. The SDR is explained in http://www.imf.org/external/np/fin/data/param_rms_mth.aspx

The time dimension unit of a month was selected because supply figures are given monthly. Demand data is quarterly and is assumed to be the same for each month in the quarter. Prices are assumed to be month end and are from http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm
“All Countries Spot Price FOB Weighted by Estimated Export Volume (Dollars per Barrel)”

ExxonMobil, like many other companies, will do whatever is legal to benefit its directors, managers, and shareholders.

I propose a slight correction: "ExxonMobil, like many other companies, will do whatever it can get away with to benefit its directors, managers, and shareholders."

Ace, your first contribution was excellent but your subsequent presenations have quickly deteriorated. Twice i have alerted u to the fact that your subsequent assertions that supply will shortfall demand is faulty.

Your original work was C+C. Today, after my two complaints, i see u have amended your premise to say:

"World total liquids supply declines at -0.8%/year"

Oh really? When did u come to that conclusion? U said your study was limited to C+C. Now u are taking that same 0.8% and applying it All Liquids? Nonsense. All five Presentations of bottom up state that the globe will be at 90mbd by 2010.

Your deception is on par with Bakhtiari's scammy stuff. Please make full disclosure. Your Supply graph line above is fantasy to support your agenda...

Actually I don't understand the concept of "growing gap" between demand and supply. A gap growing linearly and reaching -10Mbd in 2010 would correspond to an integrated deficit of 5 Gb or so. Probably more than the entire world crude stocks. It seems obvious that if the supply does not fulfill the demand, there will be some demand destruction due to high prices, until demand adapts itself to available supply (think of the current sensitivity of the market to stock changes announcements). Actually there is ALREADY a gap between the extrapolated demand from 2004 and the current supply, but the result is clearly visible : demand has been lowered and the two curves have always closely overlapped - as they will in the future.

For the same reason, it is not that obvious for me that crude oil prices will reach 100$ or more and stay here for a long time. Past data show that the crude oil barrel reached only temporarily the 80-90 $ threshold (mainly caused by sudden and unpredictible events) and but that provoked rapidly a demand destruction or even a recession, and prices fell again. It may well be that PO will never produce high 3-digits numbers - but just experience some spikes that will plunge the economy in a recession , insuring the balance between demand and dwindling supply.

Excellent reasoning, Gilles. Since the 21-day iraq2 war, we have seen contracted oil prices jump from $23 to $69. We saw a fear comonent in pricing slowly replaced by a global demand component. Interspersed was a fear of shortages component inflamed by the MSM amid rumours of Peak Oil. All the while, oil exec's were openly stating that their ROI is satisfied at the $40 level. Everything above that is demand or fear inspired.

The non-OPEC capacity increases are driving the present downward movement. It is outweighing the cuts in OPEC quota and momentum has not yet ceased as we see in today's market action.

Global GDP has likely slowed to 3% from 4.5% as well as demand destruction working itself thru the system (takes two years generally). Both the fear component and excess demand conponents are evaporating. Ideally, should there be sufficient surplus capacity, there will be equlibrium at $40. From there, it depends on geo-political events and the resiliency of regional economies as to where the Price is headed. But be assured, the suppliers are now quite aware of the recessionarly effects of plus $60 (contract) pricing. They will not venture there for quite a while.

The industry does not enjoy spiked cyclic environments. Having tested the waters, we should see some rational efforts. This will likely include adoption of the proposal for fixed prices of OPEC products and dissolution of the price band guidelines. It will add stability to their economies.

"advocacy organizations that manufacture uncertainty..."

That's kind of the definition of the "information age", isn't it?

Seriously, ExxonMobil has a bit of a problem making this campaign work, though, because bits of 40 and 50 thousand year old stuff keeps thawing and falling out of glaciers....and people are mowing grass north of the Ohio River in the middle of winter...

There has to be about a hundred good reasons to begin fossil fuel reduction, of which global warming is just one of the more prominent, and about 500 good ways to make a profit doing, if ExxonMobil would just begin to pull a few divisions over to the technology that is going to be the growth indsutries of this century, within a few years they could be making up false reports exagerating the magnificant effects of advanced batteries, thin film solar, wind, and methane recapture, and singing a happy tune, it would fell just like the ond days! :-)

Roger Conner known to you as ThatsItImout

With regards to the campaign by the oil majors against peak oil, if tobacco companies could be successful w/ their dis 'information' for 40 years, and peak oil is expected to be (optimistically) 15 years, what chance is there that we can get the news across before this is too late, especially given the expected time lag of 5 to 10 years before and large scale changes would occur from the date any major changes in policy occur?

The other side to this debate is that 'a few' people dieing can be written of as a statistical anomaly, probably not caused by smoking, while $5/L petrol at the bowser can't be ignored as easily, so that will probably provide a political incentive to at least appear to be fixing the problem.

Andrew
(posted in Australia w/ $1.10(au) petrol)
--
Eagles may soar, but weasels don't get sucked into jet engines.

$5/l?  That's about $19/US gallon!  I assume that you mean $AU and not $US?  Have you actually seen such prices?

yes, i was thinking in $au (that was partially why i put the $au petrol price at the bottom of the post), and i picked a value that is at the higher end of possible in the near future (if peoples predictions of doom are true).

Eh? I am in Perth and we are paying AU$1.30/L which is still cheap by European standards (historically expensive but no-one is complaining because we are in a mad LNG/minerals driven boom).
AU$1.30/L = US$1.00/L = US$3.8 / gallon

Australia fascinates me.

Howard keeps talking about the 'once in a 1000 years drought' yet he denies global climate change.

It doesn't seem to have occurred to anyone in power that this might be the new norm, and the past is the anomaly.

(at least Harper in Canada has the justification that if there is global warming, Canada is (for a time) a *nicer* place in which to live)

A Liberal Senator was quoted as saying that clearly some of these farms should never have been made (true) and the solution is to relocate the farmers to the 'new frontiers' in Queensland and Northern Territory.

So the solution to despoil a fragile ecosystem is to despoil another one?

Howard keeps talking about the 'once in a 1000 years drought' yet he denies global climate change.

I'm not entirely familiar with Howard's musing on climate change, but what does it matter? He's pushing for new nuclear plants in Australia where the opposition party is pushing for coal.

It matters big time.

Australia is the highest producer of greenhouse gases per head in the world (I think it marginally laps Canada in this regard). As a highly advanced country, it has a big impact on 'thought leadership' and the behaviour of the rest of the world.

It's also a fragile ecosystem which goes through very long periods of drought, and has marginal soils over much of it. I think Jared Diamond put it rightly when he said there was a reason why there were only 500,000 aboriginal inhabitants in the country before the coming of the white man. His point that aborigines were well adapted to a world where it might not rain for a few hundred years is very well taken.

(apparently there was a presentation by climate scientists to US West-of-Missippi water resource planners. When the scientists showed them rainfall and snowfall projections for 50 years out, what might happen if global warming is unabated, the planners' reaction was 'there's no point worrying about it, because if there is that little water, we cannot cope'.

It has been suggested that such was the fate of the Anansi, around 1100 AD-- a complex and sophisticated civilisation killed off by drought.

I wonder if Australia is in the same bind?)

Spending a few billion building a couple of nukes will not change the greenhouse gas emission picture by any great percentage.

Building nukes is not the one size fits all solution to global warming. It could be part of the solution, if we can work out what to do about the waste, what to do about proliferation, what to do about terrorist risk, and the nagging 'overpromise and underdeliver' which has been the history of the industry since the word go.

The civilian nuclear power industry wouldn't exist if we hadn't had the government subsidies to build that industry (disclosure: my father built nuclear reactors for a living-- I practically glow atomic radiation in my family history). We had those subsidies because there was an enormous drive to justify the military nuclear budget with peaceful spinoffs (remember the plan to redig the Panama Canal with nuclear bombs? Project Plougshare?). There was also a plan for an atomic powered plane which sucked up a few hundred million dollars in the 50s and 50s.

Put it another way, in the Socolow-Paccala model, of 15 'wedges' each accounting for a 1 bn tonne pa reduction in Carbon Emissions in 2050: Business As Usual is 15bn tpa, target is 7bn tpa or less (ie no more than current emissions), then:

- building 700 nuclear stations is 1 wedge. Building 700 3rd generation stations would stretch the nuclear industry to its raw limit. And at best, it is 1/8th of the way there.

Australia is the highest producer of greenhouse gases per head in the world (I think it marginally laps Canada in this regard). As a highly advanced country, it has a big impact on 'thought leadership' and the behaviour of the rest of the world.

And using nukes to displace coal power certainly addresses that...

It has been suggested that such was the fate of the Anansi, around 1100 AD-- a complex and sophisticated civilisation killedoff by drought.

I wonder if Australia is in the same bind?

Desalination and trade says nope.

Building nukes is not the one size fits all solution to global warming. It could be part of the solution, if we can work out what to do about the waste, what to do about proliferation, what to do about terrorist risk, and the nagging 'overpromise and underdeliver' which has been the history of the industry since the word go.

Oh I'm not sure that you can do anything about climate change, but if you can, just displacing coal is the easiest low hanging fruit to grab and the most cost effective way to do that is with nuclear power. Ignore the waste with the magic of discounting, its doing no one harm sitting in casks. Proliferation is orthoganal to power production. Terrorism is the boogyman for every technology, and blowing up a skyscraper is gonna do a lot more collateral damage than blowing up a reactor.

The civilian nuclear power industry wouldn't exist if we hadn't had the government subsidies to build that industry (disclosure: my father built nuclear reactors for a living-- I practically glow atomic radiation in my family history). We had those subsidies because there was an enormous drive to justify the military nuclear budget with peaceful spinoffs (remember the plan to redig the Panama Canal with nuclear bombs? Project Plougshare?). There was also a plan for an atomic powered plane which sucked up a few hundred million dollars in the 50s and 50s.

Er... so what? Without coal, nuclear is the cheapest way to produce baseload on top of hydro.

building 700 nuclear stations is 1 wedge. Building 700 3rd generation stations would stretch the nuclear industry to its raw limit. And at best, it is 1/8th of the way there.

I dont buy that. The french went from near zero to 70% of their entire power grid inside a decade.

Australia - yes to trade and desalination, but it will be a different Australia

(the Murray River situation looks so bad, it could be a *very* different Australia. Western societies don't move to Middle Eastern levels of water consumption without real pain-- the Israelis haven't managed it).

Australia won't build enough nukes to seriously change the greenhouse gas situation. I'd have to dig, but Australia is about 60% of its electricity from coal (and a significant chunk of the rest is Hydro--oops). Assuming Ontario (11 million people and about 32GW of peak capacity) and Australia have similar power capacity per head, then Australia has something like 60GW of capacity.

30 GW of capacity would be c. 24 3rd generation units. There's no way they can build that inside of 20 years, starting from scratch.

Nuclear works for baseload, the economics are lousy outside of baseload.

You say nuclear power is the lowest cost solution. My point is entirely that: nuclear power historically has been anything but 'low cost'. There is a built-in optimism to that industry that you have to discount.

The French did not go from 0 to 70% of their entire power from nuclear in a decade (I'd have to check on the phasing, but they spent a lot of time building those reactors). They spent 3 decades building up that infrastructure.

'ignore the waste with the magic of discounting' -- hmmm.. would you suggest the chemical industry do that? Why don't we just discount the damage of CO2 at such a high rate that we don't care about next year?

Analagously we could simply discount everything at such a high rate, spend all our money and die right now. Set the discount rate high enough, and that's what we would (rationally) do.

proliferation is a threat if you build more nukes. It's not orthogonal to anything.

blowing up a skyscraper does more damage than blowing up a nuclear reactor? Doesn't that entirely depend on your assumptions about radioactive release? In any case, the reactor is not the most vulnerable part of the chain.

If you don't think we can do anything about global warming, then why go for nuclear? Coal is far cheaper.

30 GW of capacity would be c. 24 3rd generation units. There's no way they can build that inside of 20 years, starting from scratch.

Sure they could; They wont, but its technically and financially quite feasable.

But every reactor displaces a coal plant, and thats a good thing.

You say nuclear power is the lowest cost solution. My point is entirely that: nuclear power historically has been anything but 'low cost'. There is a built-in optimism to that industry that you have to discount.

Compare it to anything besides fossil, which we can either expect to get more expensive or be assigned externality costs, or hydro, which has a limited number of sites. Historically, with all the R&D that needed to be done as well as custom built plants, the cost has still been low.

The French did not go from 0 to 70% of their entire power from nuclear in a decade (I'd have to check on the phasing, but they spent a lot of time building those reactors). They spent 3 decades building up that infrastructure.

They started the rapid expansion program in 1974. By 1984, over two thirds of french electricity was nuclear. In 1973, most of their electric power was derived from coal, and today france is one of the lowest emitters per head of industrialized countries.

'ignore the waste with the magic of discounting' -- hmmm.. would you suggest the chemical industry do that? Why don't we just discount the damage of CO2 at such a high rate that we don't care about next year?

The chemical industry can do that sure, if its sitting in casks in some parking lot. Its not doing anyone any harm there, and we can revisit the issue again in fifty years to make sure the casks are getting on fine.

Analagously we could simply discount everything at such a high rate, spend all our money and die right now. Set the discount rate high enough, and that's what we would (rationally) do.

Sure, whats your point? The discount rate isn't ten thousand percent.

proliferation is a threat if you build more nukes. It's not orthogonal to anything.

Power reactor fuel is unsuitable for weapons development. If a nation-state wants nuclear weapons, they'll pursue them seperately.

blowing up a skyscraper does more damage than blowing up a nuclear reactor? Doesn't that entirely depend on your assumptions about radioactive release?

Chernobyl killed maybe 100 people, and gave a few kids thyroid cancer, most of whom recovered and wouldnt have gotten sick anyways if it werent for iodine deficiencies in the area. A couple of planes in WTC killed 3000.

If you don't think we can do anything about global warming, then why go for nuclear? Coal is far cheaper.

Are you just trying to be argumentitive. I think nukes should be pursued either way because coal is a limited resource and has the potential to be far more expensive when its gobbled up for CTL projects as the oil starts to dry up, and evidence shows that nuclear done well is the same cost or even cheaper than coal. You should go for nukes because you seem to think emissions are bad on their own.

So many problems.

1) Coal is NOT far cheaper. It kills 300,000 people a year in the US alone, for free. Add any cost to that (even just medical bills) and coal is the most expensive thing around. You talk about nuclear research grants when comparing it to an industry that is subsidized by allowing it to kill people for free. Seriously, think a little bit here.

2) Proliferation is orthogonal. The US already has nukes, and australia could have them if they wanted them. If we went to build reactors in the congo, then you might have a point, but we aren't doing that. You know what really spreads proliferation? Rich countries using up all the fossil fuels so the poor ones are left with no option but nuclear, that would do some serious proliferation.

3) If the 911 hijackers had crashed into indian point instead of the WTC, thousands of people would still be alive right now.

4) Nuclear is the cheapest. You can look up the numbers, currently it makes power for something like $0.03-$0.04/KWh, which is as cheap as it comes.

5) Nuclear waste, what a straw man. Waste itself has a half life of a few dozen years, and would be safe within 300. It's not the waste that's a problem, it's the unburned fuel, which has an extremely long halflife. Reprocessing would fix this problem, but the environmentalists fight it tooth and claw because it would take away their signature "waste is lethal for [insert whatever preposterous number here] years" argument that they love so much, and the nuclear power industry really doesn't want it because Uranium is cheap, and likely always will be.

6) Coal power produces something like half the world's CO2 emissions, if you want to have a good solution to global warming, this would be a terriffic way to start. Hell, the oil will run out in a few decades anyway, so I'm not sure oil is such an issue, it'll solve itself.

7) Look it up, the french really did it in about 10 years. And they did this starting from basically nothing. I love this line of thought, making 30 reactors will take decades, yeah, if they're built one at a time by the same construction crew. You think Australia is large enough to have a few different crews competent to pour cement? I do.

So much misinformation, so little time.

Dez

Regarding Baseload electricity read this article by Professor Mark Diesendorf a leading advocate of renewables. You might find it interesting. Just first two pages.

http://www.rodney-jensen.com.au/dec-06.pdf

He doesnt really say anything that supports his view that renewables are capable of competitive baseload power.

Wind couples well with hydropower for load balancing provided your resevoir is large enough, but its just not as scalable as nuclear. Sure, wind should be pursued where it makes sense, but the notion that wind alone is capable of baseload competitive with nuclear just isn't so.

doublepost

Dez

Thatis not quite correct. They are having an each way bet.

At Federal level opposition (labor) you get an environment policy advaocating solar and clean coal plus conservation.

http://www.petergarrett.com.au/ClimateChangeFactSheet.pdf

The State Labor governments (same party as above flogging coal off like no tomorrow. Regardless of clean coal. Google Anvill Hill

or read this

http://www.theage.com.au/news/National/NSW-wont-appeal-Anvil-Hill-ruling...

Howard government advocates nuclear but not for 10-15 years. Its not economic unless a carbon tax is brought in but don't want to disadvantage fossil fuel industry and minerals industry. Advocate clean coal but again only economic if carbon tax or cap is introduced.

No talk of bulldozing dirty coal plants by either or shutting them off. Or compensating stranded assets.

At Federal level opposition (labor) you get an environment policy advaocating solar and clean coal plus conservation.

Clean coal still increases emissions as the economy grows. Solar I'm sure will have feel-good funding measures that contriubute less than 1% to the national grid will look good on a political campaign button, but its effectively worthless, and conservation is a favorite thing to talk about that never actually does anything. Only nuclear power has the capability of significantly reducing emissions growth.

No talk of bulldozing dirty coal plants by either or shutting them off. Or compensating stranded assets.

If you dont build nuclear, new coal plants will be built. Clean or not, they'll increase australias emissions. Fighting against nuclear is fighting for coal, no matter what sort of emissions reducing platform your political party is advocating.

Its slightly different in Germany, where fighting against nuclear is fighting for importing electricity from France.

Dez

That is why I said Labor was having an each way bet.

Libs (conservatives) are also having an each way bet. They want nukes but dont to disadvantage coal.

Both are not really fair dinkum on GW. 10-15 years is too late.

The thing is tax carbon and use cap and trade reduce payroll. company and personalincome tax and let the market decide what technology is most appropriate. End subsidies as they distort markets.

They need to stop trying to pick winners and protect status quos.

Also don't underwite nukes as this is just another taxpayer subsidy.

Both are saying you can have cake eat it too and not put any weight on.

I don't know if the Southwestern Australian drought is still running (Tim Flannery is very good on it in The Weather Makers)-- we don't get coverage over here, whereas the Murray River situation does.

However it strikes me that the threat of drought to Australia is as great, or greater, than the possibility of peak oil. Oz has lots of energy, in lots of forms (gas, coal, uranium, solar). It doesn't have a lot of water.

Valuethinker

The Murray Darling Commission latest report for December

http://www.mdbc.gov.au/__data/page/1366/December_drought_update06.pdf

Its not a rosy picture for the future months ahead if things get worse.

Here is their homepage;

and you may want to read the first ministers briefing

http://www.mdbc.gov.au/__data/page/54/First_Ministers_Briefing_7Nov06_MD...

It is not pretty reading

It literally says we have a big problem.

Prices of fruit, vegetables and meat are expected over the coming months to increase quite noticeably due to the effects of this drought.

The following article says it all

"The outlook for (2007) is really horrendous, (but) we're trying not to really put too much emphasis on it because that will come soon enough."

http://www.theaustralian.news.com.au/story/0,20867,21008372-30417,00.html

You may want to read Ian Dunlop article in Sydney Morning Herald.

Unholy trinity set to drag us into the abyss (GW, PO &lack of water)

http://www.smh.com.au/news/scorchedearth/unholy-trinity-set-to-drag-us-i...

Ian hones into the three real threats and how they are beginning to converge.

Happy reading

Ooops

Homepage is

http://www.mdbc.gov.au

Thanks. Depressing reading, and making me think about the longterm outlook for Canada, which is water-rich (but not necessarily precipitation rich). There is no doubt the US wants Canadian water.

I am struck by the sense that we could be the historical equivalent of:

- Incan emperors reading a strategic briefing about Spain in 1492

- British Generals reading about machine guns and barbed wire in 1914

- Pompei residents listening to their oracles re Mount Vesuvius in about 40AD

- word of a new disease called the Black Death, reaching Europe in 1345

Thank you both for the excellent, albeit depressing, exchange and the links.

Seems to me that TOD with its eye on global warming and peak oil should take a serious look at water issues around the planet.

I can possibly manage without oil, but water, I do not think so.

As far as the Great Lakes are concerned, Lake Superior is at an historic low. And, with the warm winter, the lakes are remaining ice free: more evaporation.

If any country is smug about their "benefiting" from global warming, think again. Populations will be on the move, and they will be headed your way.

I *think* the general view of global warming is that it will increase precipitation in places that are already wet (British Columbia has had the most horrendous storms and snowfalls this year) and make it dryer in places that are already dry.

In the UK the pattern seems to be hotter dryer summers, and wetter winters (more flash floods and storms).

A hotter planet *should* have more evaporation and hence more rain. But it will not be evenly spread.

The really vulnerable places will be the poorer, hotter ones. The 'Green Revolution' is dependent upon pumped irrigation-- so the groundwater has to be there, and so does the fuel.

If the Himalayas don't get their usual snowfall, then 200 million Chinese and as many as 400 million Indians and Nepalese could be desparately short of water.

Such collapses in rainfall are implicated in the fall of previous civilisations including the first civilised city (a place in Syria, where it looks like everything just stopped, one day).

Water is already having geopolitical implications. There have been open and covert threats of war between different countries over water resources:

- Pakistan-India
- Israel-Palestine (Israel gets a big chunk of its water from the Occupied West Bank)
- Syria-Turkey
- Sudan-Egypt

If there are energy shortages it of course impedes our ability to respond.

Your Ian Dunlop guy writes very well.

I often find some of the best people are the ex-corporate execs, who once out of the straightjacket of corporate life and minding what they say, speak with real knowledge and understanding of the issues. Jared Diamond is very complimentary about some of the top multinational oil companies and their attitude to environmental stewardship.

His point about population is not quite right. Except in the (very important) issue of deforestation and soil exhaustion, population per se isn't the problem.

What is the problem is population at our standard of living:

- 20 million Australians put out as much greenhouse gas as 200 million Chinese, and more than 400 million Indians (something over 600 million Africans)

(insert 'Canadians' for Australians if you prefer)

- they also produce as much greenhouse gas as c 50m Japanese

He sure does. Edited version of full article.

Will email Ian today asking him if he would be allow his full article to be published on the drum. You might get the full picture of it.

Population - Yes but that is a very touchy subject here in Australia. Business wants more population. Keep selling suburbia with fridges and washing machines and A/C units.

Most people who are against immigration are on the redneck side.

The govt even gives a baby bonus to mothers to have more kids (due to ageing population). We are also importing more skilled labour for the mining boom. Australia is literally the quarry of Asia. Coal, Uranium, iron ore, LNG and so on.

Australians if not the goverment are realising the effect of GW and climate change and drought. It is making for a very real problem for govt addicted to growth.

Part of problem in cities is in Sydney the dams were built when population was around 1-2 million. We now have 4.5 million. It rains more in sydney than in the dams catchment, yet most don't have a rainwater tank.

Land use planning in major cities is around the car since 1950's. We even support a car industry with 4 manfacturers all building 6 cylinder engine cars and bigger.

This has to change.

I would have found it more interesting and relevant if the UCS were claiming that XOM were obfuscating and clouding the issue of Peak Oil. It just goes to show how much more well established global warming is than PO at this point. PO is still considered something of a crackpot viewpoint, the UCS won't touch it.

The PO movement has allowed itself to become too intertwined with the doomer movement. Which is silly from a number of standpoints. If PO is real then a few humans will still be driving 150 years from now. No matter what. They will have run completely out of gas the day after, though. A Bell Curve, smooth, and symmetrical. What I find interesting about CERA and XOM is that strategically they can change their positions and still remain credible. PO can't do that. It has bet everything on "December 16th, 2005" and "Saudi Arabia." The doomers hijacked the bus. This has got to piss a few people off - Like Skrebowski and Staniford.

BTW, I liked that Oct 2005 review of Twilight you posted a few days ago. Sorry you didn't get many responses. I was hoping for some good discussion. I've got a hunch not many people read it. And I can name names.

If PO is real then a few humans will still be driving 150 years from now. No matter what.

"150 years from now." ?
"No matter what." ?

Well, apart from gas (or whatever "smart" dense energy) don't you need a car for driving?
What's the best expected lifetime of a car?

Apparently they don't have museums in your neck of the woods, Brother. Or jungle(Too much sand in the desert). Mine neither. But when I was back home they had these things called museums. I love them. Almost as much as I love watching Jamie Oliver cook.

Anyway. They had some really old stuff. And it works.

You telling me a Volkswagon bug built in say 1968 and taken really good care of ain't gonna work?

There's one of these channels I keep getting in these hotel rooms that has this show where they try to get old tanks to work. These guys really care. They made a Sherman tank run that had been in mothballs for years. The Israelis inherited it. Then some cool armor junkies in Tennessee. The point is that we will get it to run.

You obviously never had LEGOS as a kid.

Apparently they don't have museums in your neck of the woods, Brother.

Oh! Yeaaaahhh...
That's what you meant!
A handful of revelers toying with antiques run on salad oil or home made booze.

VERY SIGNIFICANT!

Thanks for the demo on the profundity of your "contributions".

Like I say. Maybe we can hang out. I get the sense not many others would. Think you missed my point. It was about the longevity of the machinery itself. I'm sure your wanker friends tell you all kinds of stuff about the fuel. Much is true. I'm dead in 40-60 years. I plan pretty close to the bone. The suck part is gonna come when I get all my money in the next 20. I realized this about 5 years ago. My Russian friends have been dropping like flies ever since. Can't figure it out.

Welcome back (once again), OilCEO.

The PO movement has allowed itself to become too intertwined with the doomer movement. Which is silly from a number of standpoints.

Please feel free to show how the end of cheap oil won't bring about the end of the present economic environment. Feel free to show how, when faced with a prospect of change, humans won't attack others to maintain their present envionment of consumption.

I look forward to you showing how 'silly' things are Mr. Bond. Well, silly beyond just making a claim of sillyness.

Over at YahooEnergyResources they are heavily influenced by one of our book-selling Posters and believe we should bulldoze the suburbs and rebuild the city cores.

And u want to talk about "silly"?

The inmates have taken over the tod-asylum...

HI Freddy,

Thanks for your post. Could you please explain more what you are talking about here? Who is "yahoo energy resources"? Who is the "our" in "book-selling Posters" - are you referring to one of the banner ads, or to "our" beloved (well, at least steadfast) "AMPOD"? Who, exactly, wants to "bulldoze the suburbs"? Really, I'm just trying to understand what's going on here.

Mr. Hutter,

Feel free to actually ACCEPT the challenge laid down.

Rather than tell management they 'have a doomer problem' why dont you SHOW with DATA why there is no reason to be worried.

The inmates have taken over the tod-asylum...

1) this is a user-submission driven site.
2) Why don't YOU show how 'the doomers' are wrong?

Go ahead. Step up to the plate. Show us all how you are right, rather than making handwaving claims of the wrongness of 'the doomers'.

Okay, suppose that we have $200/bbl oil and a vehicle fleet averaging around the characteristics of the Chevy Volt (PHEV, 40 miles all-electric range, 50 MPG beyond that).

$200/bbl oil gives us $7.00/gallon gasoline.  Typical driver still goes 13,000 miles/year, but 70% of that is on electricity at 8¢/kWh and the remaining 3900 miles burns only 78 gallons of fuel.

Cost today:  13,000 mi / 22 MPG * $2.50/gallon = $1477
Cost tomorrow:  9100 mi * 0.268 kWh/mi * $0.08/kWh + 3900 mi / 50 mpg * $7/gal = $195.10 + $546 = $741.10

Looks like tomorrow's cars could cost half as much to run as today's, even with $200/bbl oil.

Looks like tomorrow's cars could cost half as much to run as today's, even with $200/bbl oil.

So? What about the already spent-money on cars? Where are 'the poor' going to get these new magical cars to drive to Mal-Wart so they can be a clerk to serve you? How about the money already spent on farm equiptment? Mining machines (that don't already work on electric)? The trucks that move material about?

How does this new price structure keep the costs of plastics low? The inputs into the products bought in the economy?

Pardon me if I quote you back at yourself:

Please feel free to show how the end of cheap oil won't bring about the end of the present economic environment. Feel free to show how, when faced with a prospect of change, humans won't attack others to maintain their present envionment of consumption.

People won't attack others when they can just go down to the showroom and buy a new car.  The money already spent on cars is depreciating rapidly; the average age of US passenger cars is only about 8½ years.  The people who just bought brand-new guzzlers and can't unload them will suffer, but a market which includes offerings like the Chevy Volt will shift toward efficiency as its main or even only response.  I would rather that we had started in this direction with the CARB ZEV directive in 1990, but it may not be too late even now.

You raise a bunch of new, goalpost-moving objections:

Where are 'the poor' going to get these new magical cars to drive to Mal-Wart so they can be a clerk to serve you?

They buy used vehicles, which will be available a few years after the new ones appear.

How about the money already spent on farm equiptment? Mining machines (that don't already work on electric)? The trucks that move material about?

We'll have enough motor fuel for that.  Off-road consumption is maybe 1/3 of the total diesel use, and much of that can probably be replaced by e.g. biodiesel.  On-road trucks can be partially replaced by rail, Wal-Mart is looking to double the economy of what remains on the road, and it may even be possible to electrify many of them.

How does this new price structure keep the costs of plastics low? The inputs into the products bought in the economy?

I thought you doomers didn't like plastic?

The price of plastic doesn't have to be low, it just has to be affordable where it's necessary.  Our chemical industry can make its inputs from syngas, and syngas can be made from biomass and coal as well as oil.  It may cost more (and make it far more attractive to recycle plastic than today), but plastic will still be around.  Some of the earliest plastics, like nitrocellulose and cellulose acetate, might even make comebacks.

Plant phenols might make great feedstocks.  Bakelite, anyone?

The Smoke and Mirrors paper is nothing but a hatchet job. It's always easier to attack the individual contrarian scientists than to actually refute their science. If the science is done correctly, the data transparent, and the work can be replicated, it doesn't matter who funds it.

It certainly could be a hatchet job, but by no means does data exist in some pure state unsullied by the predilections of the hired guns who collect and interpret it. The way in which they choose to frame their questions matters immensely: You can't find something that you're not looking for. Besides, the real world's a mess, there's lots of opportunity to pick and choose the areas to focus on, so as to spin a yarn about "mixed results." Just like with smoking, the goal wasn't to win the argument, only to delay its acceptance indefinitely. The Tobacco Research Institute succeeded for decades.

The 'science' has been refuted, again and again and again.

What is frustrating the world scientific community is that the likes of Exxon Mobile can keep publishing lies and distortions, and the mainstream media lets them get away with it.

The tactics were well honed by the tobacco industry, and some of the same 'scientists' are now working for the global warming denialist industry.

"So, who ya gonna trust?!? Me, or ... your own lyin' eyes?!?!

Al Gore talked about one big reason people are so reluctant to deal with reality. It can be terribly inconvenient. Gore's own family disbelieved the evidence linking tobacco to cancer until his sister died of the disease. After that, they stopped growing tobacco.

When one's livelihood or one's sense of security depends on endless, uninterrupted, cheap supplies of energy, one is reluctant to honestly contemplate the evidence that one's assumptions are not only wrong, but downright destructive.

In the USA, the government and media have cultivated a strong sense of identity in people as Consumers. This identity includes a strong sense of entitlement and also a powerful paranoid sense of victimization to repel any notions that might threaten this identity.

We are easily seduced into acting as if -- and so eventually believing at a deep level that -- our lives really are simply about sampling the material goods and experiences we can buy. Our bodies and brains are wired to seek pleasure and avoid pain. Peak Oil and Global Warming both challenge the economic foundations of our ability to get pleasure and to avoid pain.

We can dress it up in religious and secular mythology -- "salvation" or "democracy" -- but we really are working on this other project: having a great time and keeping it going as long as possible.

Often people seem to really believe certain religious or secular and humanistic dogma at a conscious level, but fundamentally live as producer-consumers within the the economic system. We have constructed our society as though we are rats in a maze, performing tasks for reward or to avoid unpleasantness.

It will be tough to maintain this "Consumer" identity for most of us over the next few years. Perceptions will be managed by media and government to make sure that "Evildoers" are to blame for the difficulties to come, and that "we" must fight them and rid the world of them so that our sacred Consumerist way of life is secure.

Global Warming and Peak Oil will be blamed on others -- Greedy Middle Eastern Terrorists and Terrorist States and Communists like Chavez, for example. The Chinese will be easy to blame for both problems as well. (They always want more oil and they always want to make more pollution, don't they? And there are more of them than us. If they get oil, then we can't have it, right? If they pollute more, we will suffer and have to pollute less, right? Case closed. War is the answer.)

However, I don't see any way that the manufactured pseudo-reality can be sustained for too much longer without such violence that will shake even the people who most desperately cling to the identity of US Citizen-Consumer.

I am amazed how the same simple tactics used by the tobacco corporations are now repeated by big oil, and yet our "citizens" have not been educated to observe this and respond to it in a critical fashion. This strikes me as odd. Even as intentional.

Isn't the US government employing advertising and public relations firms to help manage opinion as well? Are they also using some of the same tactics?

My own lyin' eyes, indeed!

Humans have accepted this sort of propaganda throughout history. Why is now different? Why should people discern this as propaganda now?