DrumBeat: June 1, 2007
Posted by Leanan on June 1, 2007 - 9:09am
Topic: Miscellaneous
By some estimates, Africa holds 10% of the world's reserves, but that figure belies the importance West Africa has already achieved as a source of energy. According to Poisoned Wells, a new book on African oil by Nicholas Shaxson, an associate fellow with international affairs institute Chatham House in London, the U.S. imported more oil from Africa than from the Middle East in 2005, and more from the Gulf of Guinea than from Saudi Arabia and Kuwait combined. Nigeria, the giant of the region, supplies 10-12% of U.S. oil imports. "There's a huge boom across the region," says Erik Watremez, a Gabon-based oil and gas specialist for Ernst & Young. "Exploration, drilling, rigs, pipes. It's exploding." Ann Pickard, Shell's regional executive vice president for Africa, agrees: "The Gulf of Guinea is an increasingly important place."
OPEC oil output edges higher in May - survey
OPEC boosted crude oil output in May as higher supply from members including Algeria and the United Arab Emirates countered a drop in Nigeria, a Reuters survey showed on Friday.
Everything says the market should tank. But it's not tanking. The market sees something on the horizon that has it in a good mood.What is it?
A booming China? Booming globalization? A new tech revolution spawned by iPods, online video and Web 2.0? Or is it the fact that Bush is a lame-duck prez?
Well, it's all of that, plus more.
..."To quench the world's thirst for energy, projections call for a cumulative investment in energy-supply infrastructure of over $20 trillion in real terms over the next 25 years - substantially more than was previously estimated."
Humanity must recognise our entire way of life is chronically short-termist
The costs of tackling climate change are too high and the benefits too distant for us to think we can make any difference.
Why Our Electricity System Is Headed for a State of Emergency
Most people don't realize that skyrocketing global energy demand and economic growth severely affect the supply of electricity. Between production (power plants) and delivery is an antiquated, "third-world" transmission grid that is in desperate need of hardening against breakdowns, terrorist attacks, inadequate carrying capacity, and operational obsolescence. And while electricity doesn't hold the headlines or dramatic power of oil, the ability to ensure its uninterrupted supply at a reasonable price is even more essential to global survival and prosperity.
Soaring electricity rates leave lawmakers feeling powerless
Over the past year, state legislators have made it clear there's no consensus about how to respond to rising electricity rates.But as lawmakers scramble to act before the 2007 session ends next Wednesday, the biggest problem may not be that they can't decide what to do. Rather, it may be that there's little they can do - at least anything that will change things in the short term.
Consumers undaunted by high gas prices
U.S. consumer sentiment rose in May as consumers remained resilient despite record high gasoline prices, according to a poll published Friday.
Paying More Than Ever For Gas? Not If Buying Power Is Considered
Ask a free marketeer what government should do about rising gasoline prices and the usual reply is "nothing," because "high prices provide incentives to conserve and for companies to deliver new supplies." But as gas prices near all-time highs, consumers are hardly flinching.Sure, they'll shake their fists at the oil companies if asked. But gasoline consumption is actually higher today (by 1%) than it was last year even though pump prices increased by 15% over the same period.
Want to save the planet? Move to a big city
Even those who have no intention of going green have an image of what an ethical lifestyle may look like - an "eco-house" surrounded by trees and fields with a patch of earth for organic greens.But this image is a myth, claims a new book, and the road to true eco-living is much simpler - we should all move to the city.
BP scraps its carbon capture venture
BP has scrapped plans to build a carbon capture centre in Scotland after the Government's energy review yesterday delayed a decision on subsidies.
Indo-US nuclear deal faces rough weather
The first issue is the reprocessing of the used nuclear fuel. The US wants India to commit that spent fuels will not be further used. Now for a country like India, which has been reeling under acute power shortage amid high industrial growth, accepting such a condition will only aggravate the problem.
Sweden Looks to Indonesia for Biofuel
Motor vehicles in Sweden are now using as little as 3% biofuel in the form of ethanol from Brazil and the government is aiming to have cars and buses running on palm oil-based biodiesel from Indonesia and reduce fossil fuels usage to 50% by 2020 to reserve its supplies and lower the carbon dioxide level in an effort to reduce global warming.
Ethanol Industry Fights To Keep Fuel Prices In Check
According to experts, if every gallon of ethanol were removed from today’s gasoline supply, per gallon gas costs would rise an estimated 45 cents, making the national average for fuel nearly $4.00 dollars per gallon.
The Corn Conundrum: Reducing Poverty and Hunger With Biofuels
At an agriculture conference a couple of years ago, I met a Mexican agricultural economist who hoped that every last kernel of US corn would be used to make ethanol so global grain companies would stop dumping heavily subsidized US corn at below production cost in Mexican markets. Poverty and hunger in rural Mexico (and immigration to the US) increased because NAFTA and subsidized US corn displaced two million Mexican farmers.
Russia breaks into British nuclear fuel market
Russia has signed a deal to supply nuclear fuel to a British generator, local media reported on Friday, a first breakthrough into the British market for Russia's fast-expanding nuclear sector.
EU project to develop first fuel-cell aircraft
The Environmentally Friendly Inter City Aircraft powered by Fuel Cells (ENFICA-FC) project is receiving €2.9 million from the EU as part of the aeronautics and space priority of the Sixth Framework Programme (FP6).
No More Gushers for ExxonMobil
ExxonMobil's official mantra is that "we are doing all we can to bring more petroleum products to market to meet growing energy needs." The numbers say otherwise, and this is a company where numbers speak louder than words. The number that matters most is return on capital employed - that is, net profits divided by what's been invested in oil rigs, pipelines, refineries, etc. ExxonMobil's ratio, 32.2% last year, is consistently the industry's best. When ExxonMobil gives more money to shareholders than it spends on capital and exploration, that means its executives can't find enough new projects that they think will generate 30%-plus returns.
We as a society will have to face very soon the geophysical reality of the imminent peak and irreversible decline of crude oil extraction on a global level - a phenomenon commonly known as peak oil. This would mean ever-rising crude oil prices and rising inflation and food prices.Will the Reserve Bank continue to raise interest rates in a futile attempt to curb inflation and bring economic growth to a grinding halt?
Peak Oil Passnotes: Normalising $70 Oil
In the past week or so, we have once again seen the price of Brent crude touch $70. But now it appears that even a plateau of $70 oil is not worrying politicians and bankers unduly. There is no great hurry on the parts of central banks to raise interest rates. How did we get to this point? And when Brent breaks out of its range, which way is it going to go? Up or down?
The tech implosion created a knowledge vacuum which became filled by three beliefs that I thought would paint the future: 1) The dollar is doomed due to America's horrible fiscal irresponsibility and Asia's turn at the helm. 2) The time for commodities is now since 20 years of decimation had created massive underinvestment. 3) We are likely at Peak Oil based on Simmons' research. I employed these thoughts in 2002, and hence, the portfolio has done okay. Those tech stocks never recovered, but I have.
Australia: A numbers game that's hard to win
Motorists "know" that petrol retailers get together and fix petrol prices or, at least, think they know. Motorists also think government should "do something" about it.
KSA wants to join ranks of world's top 10 nations
"Our mission is to position Saudi Arabia among the top 10 most competitive nations by 2010 through the creation of pro-business environment, knowledge-based society and by developing economic cities."
Democratic presidential hopeful John Edwards took on the oil companies Thursday while campaigning in Menlo Park, with the help of a San Jose teenager who says his friends can barely afford to fill up their SUVs and a Hummer.
Rush Limbaugh: A Petroleum-Free Society Can’t Be, Breck Girl! ("Breck Girl" is his name for presedential candidate John Edwards.)
The Breck Girl "says a wave of mergers in the oil industry should be investigated by the Justice Department to see what impact they have had on soaring gasoline prices. During a campaign stop in Silicon Valley on Thursday, Edwards will berate the oil industry for 'anticompetitive actions' and outline an energy plan he says would reduce oil imports 'and get us on a path to be virtually petroleum-free within a generation.'"It's not possible. That is irresponsible to tell anybody we're going to be virtually petroleum free in 25 years. It's not possible, folks. It is not and anybody who tried to bring that about is dangerous! It is simply impossible. This is pure populist rhetoric during rising gas prices, and it's designed to prey on people whose knowledge of economics in general is woeful, or inept.
Our biggest challenge: Solving energy crisis
It's time our nation gets serious about our energy problem. And the usual suggestions just don't cut the mustard, as they would be little more than Band-Aids on gaping wounds, or have problems of their own that have not been resolved.
UN: Climate making forest fires bigger
Climate change is making forest fires around the world bigger and more intense, increasing the threat to people and the environment and costing countries millions in damage and firefighting expenses, the United Nations said Thursday.
Consumers should take the lead in gas crisis
While some consumers are blaming the government for higher gas prices, they need only look in the mirror for the solution. A number of factors — shrinking refining capacity, natural disasters — are fueling prices at the pump, but consumer demand drives gas prices.
Majestic town: How Williamsburg leads on wheels
Now, as other jurisdictions are recognizing the value of muscle-powered transportation, and the contest over alternative transportation funding is heating up due to the awareness of global warming and peak oil, Williamsburg commuters have muscle-powered alternatives that most of Virginia can only dream of.
The Society of Petroleum Engineers have just published the online version of their June 2007 Journal of Petroleum Technology, which is distributed to their 73,000 members and throughout the world's oil and gas industry. They have included four responses to CERA's February editorial.
A very brief summary of a paper by Phil Hart and Chris Skrebowski is one of them. Kjell Aleklett's response was printed as well.
Also included: comments from Peter Jackson of CERA.
Hart and Skrebowski's full length article can be read here (PDF).
Shanghai may face power cuts this summer
Shanghai, China's largest city, may be plunged into darkness as the city's overburdened power-distribution network lags behind its rapid economic growth, state press reported Friday.
Rig Shortage Hinders Indian Oil Exploration
India has put off an auction of oil exploration rights by five months as a rig shortage delays drilling in existing fields and slows a quest to cut dependence on imports.
Sinopec discovers new oil reserves of between 140 mln and 200 mln tons in Xinjiang
China Petroleum & Chemical Corp. (Sinopec), China's second largest oil and gas producer, has made a new oil discovery in northwestern China's Xinjiang Autonomous Region with geographical reserves of between 140 million and 200 million tons of oil equivalent, the company's official news portal China Petrochemical News reported today.
Philippine Energy Bidding Round Attracts Over 20 Groups
More than 20 local and international energy groups have expressed interest in exploring and developing oil, coal and geothermal prospects offered by the Philippines in its latest energy bidding round, the Department of Energy said Thursday.
Bush unveils climate plans that reject caps
U.S. President George W. Bush unveiled a strategy on global warming on Thursday that stressed new technologies but rejected the caps on greenhouse gases that other rich countries want.
Bush climate plan "the classic U.S. line": EU
President George W. Bush's plan to tackle climate change merely restates U.S. policy which has been ineffective in the past in cutting emissions blamed for global warming, the EU's environment chief said on Friday."The declaration by President Bush basically restates the U.S. classic line on climate change -- no mandatory reductions, no carbon trading and vaguely expressed objectives," EU Environment Commissioner Stavros Dimas said, according to his spokeswoman.
Japan kicks off "Cool Biz" with south islander theme
Japan kicked off its third summer "Cool Biz" casual clothing drive Friday with politicians sporting southern island fashion as the country tries to fight global warming.The government has again asked both private and public sector workers to dress lightly and set the air-conditioning at their offices no lower than 28 degrees Celsius (82.4 Fahrenheit) during the sticky summer months.
Dave Cohen: On the likelihood of peak oil
No one can predict the future. The best we can do is to amass lines of evidence that point toward plausible scenarios. Cambridge Energy Research Associates (CERA) claims that the oil supply will continue to grow as it has in the past. Those studying the peak oil hypothesis, so-called peakists, are not so confident that the future will resemble the past. Peakists believe that CERA is ignoring the warning signs of peak oil. Can we gauge the likelihood of a near term peak in the oil supply?
BP to Lose $18 Billion Field Amid Russian Crackdown
BP Plc's Russian venture will probably lose its license to a Siberian field with enough natural gas to supply Asia for five years as President Vladimir Putin extends state control over foreign energy projects.
Analysts split as gasoline prices slip
But analysts are far from united on what the decline means."I think that's a small respite from what's ahead of us," said James Cordier, president of Liberty Trading Group in Tampa, Fla.
Cordier thinks prices could climb another 20 cents to 30 cents a gallon if gasoline inventories don't increase significantly, and soon.
But others think prices have peaked.
Peak Natural Resources, History and Future
The unprecedented rate of increase in the utilization of metals, minerals and natural resources of energy in the 21st century has rendered all plans devised before now for producing these materials obsolete. The world’s industries have been caught completely off guard by the rate at which known reserves are being depleted. Businessmen can therefore no long calculate costs reliably and national planners cannot guarantee the future output of their domestic economies.
Argentina cold snap causes energy woes
A cold snap in Argentina led to electricity and natural gas shortages this week, idling factories and taxis and causing sporadic blackouts in the capital.Beset by the coldest May since 1962, millions of residents fired up space heaters, straining Buenos Aires' electrical grid for three nights and forcing authorities to slash power supply nationwide and briefly cut domestic natural gas provisions and exports to Chile.
Turning Tar into Oil: An Economic and Environmental Disaster Looms
The invasion of Iraq has set off what could be the largest oil boom in history. All the signs are there: multinationals free to gobble up national firms at will, ship unlimited profits home, enjoy leisurely "tax holidays" and pay a laughable 1 percent in royalties to the government.This isn't the boom in Iraq sparked by the proposed new oil law -- that will come later. This boom is already in full swing, and it is happening about as far away from the carnage in Baghdad as you can get, in the wilds of northern Alberta.
Nigerian gunmen kidnap 3 foreigners
Gunmen attacked a residential compound Friday in Nigeria's lawless southern oil region, kidnapping three Asian workers from inside, police and human rights activists said.Militants, meanwhile, said they were waiting to see how newly inaugurated President Umaru Yar'Adua would carry out his promises to develop and calm their deeply impoverished region, where the crude in Africa's biggest producer is pumped.
Turkey deploys extra troops to Iraq border as tension with Kurds grows
A Turkish military build-up on the northern Iraq border is fuelling fears of a confrontation between Ankara and Kurdistan's semi-independent government that could further destabilise the region as US forces begin to pull back.
Victory Garden: What Is It Good For?
But where does the reduction in CO2 from a Victory Garden come from? A lot of focus is on foodmiles saved, the reduction of pounds of produce shipped in exchange for what you grow on your own. I think that is a misleading number to focus on.
Hurricane Season Begins: 2007 Atlantic Forecasts 17 Named Storms
The 2007 Atlantic hurricane season should be "very active," with 17 named storms, said Dr. William Gray, a top storms forecaster said Tuesday.Those named storms are expected to include five intense or major hurricanes (Saffir/Simpson category 3-4-5) of the nine expected, according to forecaster William Gray's team at Colorado State University.
From financialsense
http://www.financialsense.com/fsu/editorials/lalani/2007/0531.html
.............
But this reality has not sunk in with the public. It is quite possible that if Gas Pains increase we will see Big Oil CEO’s dragged into the senate to answer the same inane questions.
One can only hope it will play out as it did in “A Few Good Men”
We start with Lt. Kaffee interviewing Rex Tillerson on why he has not built new refineries.
Kaffee: Just one more question. If you plan to increase capacity to 5 million barrels per day and Exxon always executes on time then why aren’t you building any new refineries? Mr. Tillerson? You stopped building refineries because you knew there is not going to be enough oil to run through them didn’t you? You saw your own discoveries and that of other companies, you saw that accelerating treadmill you were climbing just to stay in place and you knew we were in deep trouble. Fearing windfall taxes from hell and nationalization everywhere you spun this yarn that peak oil will arrive after 100 years. Mr. Tillerson are we at Peak oil?
Mr. Tillerson: You want answers?
Kaffee: I think I'm entitled to them.
Mr. Tillerson: You want answers?
Kaffee: I want the truth!
Mr. Tillerson: You can't handle the truth! Son, we live in a world of petroleum products and those products have to be produced in increasing amounts to keep our economy alive. What are you gonna do it with? Corn ethanol? I have a greater responsibility than you can possibly fathom as the acknowledgement of peak oil will itself have grave consequences for the world economy. You weep at the gas prices and you curse the Oil Companies. You have that luxury. You have the luxury of not knowing what I know: that gas prices though higher than before are still cheap. And Exxon’s existence, while grotesque and incomprehensible to you, produces 4 million barrels of oil a day for you NASCAR morons. You don't want the truth. Because deep down, in places you don't talk about at parties, you want me producing all I can. You need me producing all I can so that your American Idol obsessed culture can be spared the truth for as long as possible.
We use words like oil, rigs, refinery...we use these words as the backbone to the American life you have got used to living. You use 'em as a punchline. I have neither the time nor the inclination to explain myself to a man who consumes petroleum products 24/7 and uses those very products to protest against oil companies! I'd rather you just said thank you and went on your way. Otherwise, I suggest you pick up a shovel, dig yourself an oil well and build a refinery in your bathtub. Either way, I don't give a damn what you think you're entitled to!
Kaffee: Are we past peak oil?
Mr. Tillerson: I am doing the job you want me to!
Kaffee: Are we past peak oil?
Mr. Tillerson: You're goddamn right we are!
fireangel:
That's an interesting fantasy, Tom Cruise acting like Perry Mason to force Rex Tillerson to admit we are past peak oil. But its a fantasy. What you fail to realise is that the Exxon-Mobil guys actually believe their own stuff, and to a certain extent they are right. It depends purely on your definition of oil, which they keep changing. But if you include bitumen and kerogen (tar sands and oil shale) we've got enough to last through my grandchildren's lifetimes, and my son isn't married yet.
But it isn't going to be cheap enough to use wastefully in internal combustion engines. At $100,000 per level barrel of syncrude production capital investment, plus $20-$30 bbl. production costs, I suspect light, sweet crude will have to be in the $200/bbl range for the economics to work.
"That's an interesting fantasy"
Hey that is a more palatable choice than facing the crap our politicians are doing. No?
fireangel:
I'm with you on the politics of oil depletion. But my problem is with desseminating a work of fiction using a real live person as a character on this site unless it is clearly labeled as a fiction. We've already got plenty of enemies who label us as nuts, and I can see in my mind a talking head or propogandist for the corporatocracy like Glenn Beck totally warping the point made by that fiction to discredit us, calling us liars and frauds. They've already started by labeling us peakists and cultists.
I enjoyed fireangels fiction. Got to throw in a bit of humor now and then. WRT to the Exxon (and CERA etc...) drinking their own kool aid, I think you are right. You probably have to drink it, or hop into the peak oil closet, if you are going to go very far in these organizations. And the same applies to americans in general -- the vast majority haven't a clue, and those that do frequently love that tropical punch flavor.
oilmanbob:
This is on drumbeat isnt it? Doesnt anything go here? Now if it was an official oildrum post your concerns may be warranted.
I think the pain of peak oil acceptance is so high that a little humor may help. JMHO.
Budr, I agree we need humor, especially to offset the Spinners of the Webs of Doom that so often frequent this blog, I'm just urging caution, particularly at the top post.
As far as drinking the KoolAid, I knew the guy who mixed up the first batch in British Guiana then slugged it down. His best friend in High School was my best friend's older brother, plus his youngest sister was in my elementary school class at Edgar Allen Poe. Spooky!
Looks similar to my post the other day(Friday):
Friday morning delusion
Definitely a fantasy scenario, but fun to muse on.
An article on the importance of imports from the Houston Chronicle:
Reliance on foreign gasoline is growing
They do go on to point out, though, that everything is going to be OK and we will all live happily ever after.
I would point out that this claim from the article is inaccurate:
The Virgin Islands are #2. The UK is #1 when you count finished imports and blending components that end up as finished gasoline.
The UK is likely to continue to be a major exporter - as long as the British can reduce their gasoline consumption faster than Americans increase it. But at some point, the amount available for the refineries will be the never ending bottleneck - and then the trans-Atlantic circulation of another sort will begin to fade.
In a sense, Europeans have more or less decided that diesel is the better IC technology for the foreseeable future, while the U.S. remains very focused on gasoline - which leads to ethanol, which then entails expensive retooling and development for minimal gains and reduced efficiency - and lots of money being thrown around, with none of it hitting the ground - and little of it available for better solutions.
At some point, Americans will realize that though diesel will remain useful in a number of ways, gasoline is a pretty non-essential fuel - but that realization will be fought tooth and nail, and will only become accepted when all the alternatives have been played out.
Amazing to read about windbreak tree lines from the 1930s being cut down for increased corn planting - that is a truly unhealthy response to growing scarcity in the future.
Windbreak trees being cut down for increased planting? That's horribly irresponsible, but I'm not sure I could expect to see anything responsible being done any more, least of all from the Agri-Industry players like ADM and ConAgra. May ADM, ConAgra, and Monsanto burn... (Sadly enough, I'm sure I inadvertantly consume products from all of those companies.)
Why aren't products produced on US territory considered domestic production. The US Virgin Islands are US territory. The folks who think otherwise probably believe a passport is needed to visit Hawaii. Anybody know how to administer an online dope slap?
While this is not exactly the same thing as saying we have a bidding war for declining exports, it is pretty damn close.
Again, as Deffeyes predicted the cumulative shortfall between what the world would have produced at the 5/05 rate and what we have actually produced is on the order of 500 mb (EIA, Crude + Condensate, the primary feedstock used to make gasoline). This had to have had an effect on world gasoline production.
Meanwhile consumption in the exporting countries is increasing, in some cases exploding (for example, a 50% annual rate of increases in foreign car sales in Russia).
While this is not exactly the same thing as saying we have a bidding war for declining exports, it is pretty damn close.
For gasoline. Yes, there is a bidding war for gasoline. That's why the price has shot up, and has had the ripple effect it has had around the world. But the price of oil is right where it was a year ago. So, I don't think we are having a bidding war there. We have had demand destruction, yes. But at these prices, the market seems to be adequately supplied with oil.
If we can work our inventories down here in the U.S. - and then the price of oil starts to climb as we try to keep the tanks full - then there is an indication of a bidding war for oil. If the Saudi's don't respond to declining oil inventories by opening up the taps, then as I have said before I will conclude that they can't. But if they do - will you admit that they are setting on some spare capacity?
RR, the Saudi's have built a lot of refining capacity over the last 25 years, and my guess is that they are cutting their exports of light crude so they can keep their own refineries supplied and make that extra $30/bbl or so.
If they are in fact declining at Ghawar, and unable to find enough light, sweet crude to replace their production loss, it would make sense that they save their good crude for their own refineries and cut supplies to their competion, the refineries that make gas for export to the US West Coast. In other words, WT's export land hypothesis.
With a finite end in sight for their flush production it makes no sense to increase their production, even if they could. So what I'm concluding is that they won't increase production unless they feel that they are irretrievably losing market share. With the declines at the other supergiant fields and total Russian production losing market share seems unlikely. They can retain their current market share with reduced production, while getting higher prices, a total win for the KSA. I have a feeling that reading the entrails of a slaughtered sheep will give more clear and undebatable results that their production in response to prices.
On goes my tinfoil hat: will one know where any reported increase comes from? Will one know its not oil diverted from Iraq as mooted here sometime back? One can hardly put this kind of thing past these guys (I don't mean just or even primarily the Saudis).
Of course if you want to go that route, then what's to say that they aren't actually producing far more than they are saying, and they are only claiming the cuts just to keep the world scared so the price of oil stays high?
Hm, no, I don't get you. Why would they over-produce even if they could? They would just leave it in the ground, wouldn't they? That case could be made. But SA's influence on the market is rooted in its role as swing producer. The US is certainly interested in its maintaining that role. So there is every incentive for a SA-US collusion in such a scheme, i.e. hiding SA's peaking. Tell me why I am wrong to be suspicious.
"would they overproduce if they could"
Its possible. As I have posted before. One of the alphabets presented to Ronald Raygun the idea of asking the Sauds to overproduce to drive down the price of oil to make the Russian crude to expensive to produce.
Did that happen. The charts and prices say the Sauds might have done so. Russian oil was basically shut down, They went bankrupt, and the wall came down.
Now is there such a reason to do it again,..Perhaps.
Quid Clarius Astris
Ubi Bene ibi patria
Figure 1 shows that imported gasoline and blending components have been increasing at about 11% per year. This rapid growth is difficult to maintain, especially in light of the relatively flat world production. The graph shows Imports fell back from the expected high growth rate in 2006, and 2007 may be lower yet. In order to maintain the high growth rate, we need a lot of weeks with record increases.
Figure 2 shows net US refinery inputs have been barely increaasing since 2000. With this anemic growth in inputs, it is not surprising that imports need to increase.
The Society of Petroleum Engineers have just published the online version of their June 2007 Journal of Petroleum Technology, which is distributed to their 73,000 members and throughout the world's oil and gas industry. They have included four responses to CERA's February anti-peak oil editorial. A very brief summary of a paper I wrote with support from Chris Skrebowski is one of those:
http://www.spe.org/spe-app/spe/jpt/2007/06/DissReply.htm
Our full length original article is available here:
http://www.philhart.com/files/aspo/PhilHart_PeakOil_Detailed_Transparent...
The SPE also gave Peter Jackson from CERA a right of reply. Well worth a read.. Enjoy!
cheers
Phil.
Thanks for the link. It seems like Peter Jackson and the head of the National Association of Realtors are the same person, because they say exactly the same things. Maybe Peter can be entered in this contest!
This paragraph from the first response published by Elmond L. Claridge, Pearland, Texas is a bit confusing:
Do you think he meant to say 2000, instead of 1970 for Hubbert's prediction (of world peak)? The peak for US is still 1970-ish, regardless of Prudoe Bay, right ?
He obviously haven't read Hubbert's paper. No surprise there.
The 1970 prediction was for the lower 48 only.
Cordier thinks prices could climb another 20 cents to 30 cents a gallon if gasoline inventories don't increase significantly, and soon.
I am going to cover this in next week's TWIP report (which PG has asked that I start posting here as well). Those who point to increasing inventories and suggest that we are out of the woods are ignoring what historically happens starting in July. Well, actually starting in June, demand picks up and the inventory build ceases. Then, starting in July inventories are pulled down by 15 million barrels. But we don't have 15 million barrels available to be pulled down. That's why many don't think the price has peaked. Throw a hurricane in there, and you know what's going to happen.
Many may be surprised at what happens with gasoline this summer, because they don't realize what a fine line we are walking at the moment. But readers of TOD won't be caught by surprise. Well, Benjamin Cole will. The rest of you won't.
"Well, Benjamin Cole will. The rest of you won't."
ROFLMAO ! An oil guy with a sense of humor...I'm still laughing...wiping away tears...
Anyone tried googling "Benjamin Cole"?
Interesting result
So is he the cornell college student or the nut that killed his 9 month old baby?
Just curious did we ever agree on the Minimum Operating Level (MOL) number, because as you say,
If it is 180-185 MM barrels, then the problem will be VERY significant, don't you think?
Never mind the hurricanes...there is a reason these are called Acts of G*D.
Keep up the good work, Robert!
Yesterday's Financil Times said that Colonial Pipeline shut it's main petrol line to NY, allegedly because of an "integrity check" ...
http://www.ft.com/cms/s/80dfd420-0e96-11dc-b444-000b5df10621.html
could this actually be due to the MOL or does "integrity check" actually mean something?
Xeroid.
Another pipeline was mentioned yesterday.
http://www.chron.com/disp/story.mpl/business/4828033.html
As if insufficient refinery capacity wasn't enough, are we now we are running into insufficient pipeline capacity?
If the pipeline really is at capacity at 1.4 MMBPD, isn't that another example of lack of expansion (not that I agree).
However, the demand must have been visibly growing, so wouldn't someone have raised a flag. Maybe, this is the source for that story a week or so back with the barges being diverted to the North East with gasoline.
If it is true, then the "integrity check" is certainly not low level driven(MOL), but more along the lines of 100% operation driven - all out.
Definitely interesting.