Cyclone Gonu Thread 2-Muscat and Bandar Abbas now in the projected path of Gonu (updated at 8p EDT)
Posted by Prof. Goose on June 4, 2007 - 6:00pm
Topic: Supply/Production
Tags: bandar abbas, cyclone, cyclone gonu, gas prices, india, iran, mina al fahal, muscat, oil, oil prices, oman, pakistan, peak oil, qalhat, sur, united arab emirates [list all tags]
Newest Gonu thread created on the front page with newest information as of noon EDT on 6/7/07--the new link can be found by clicking here or you can also find it by going to the front page of TOD at theoildrum.com, we'll have a link there for the foreseeable future that will take you to our most recent coverage!
KAC/UCF and Chuck Watson are forecasting, based on their damage models, that the Qalhat (Sur) LNG terminal will be out for 20-30 days and the Mina al Fahal oil terminal will be down for 10-20 days--all of this assuming they are built to US standards.
All tips and resources (*and there are already many down there in the first thread, let's replicate that here today in the second thread! Thank you!*) welcome in the comment thread below. If you have any insights, please email the editors box with the word GONU in the subject.
Last updated at 8pm EDT, 6/5.
Here is a link to the first Cyclone Gonu Thread from yesterday. Please put all new resources and insights here as of 7:30am EDT 6/5, but make sure to check out the first thread as well.
Also, click "there's more" below for MUCH more graphics and links, and there's much more from our readers in the comment thread as well...but you are likely to want to go to link noted above for the most recent coverage.
Why might Cyclone Gonu matter? Well, that answer begins with the fact that the world production of petroleum plateauing around 85 mbbl/day, any slight blip in supply or exporting could be quite noticeable on the world markets. A sizeable portion of the world's petroleum exports go through the Gulf of Oman.
Particularly, Oman matters in this because it produces 743,000 bbl/day; Oman is also a net exporter, non-OPEC, whose production peaked earlier in the decade. (Thanks to Mike from Green Car Congress for the link.).
Of course, this storm also has the potential to affect Iran, UAE, India, and/or Pakistan for that matter--mainly because of shipping disruptions, but there could be some real effects on infrastructure and assets depending on track and landfall. There are also refining and other production assets in Southern Iran.
(One will note, as you explore the old comment thread that many of these possibilities are explored...there's a lot of material that we are still sorting through on Iran, shipping lanes, storm surge, etc.)
Resources:
The latest from Margie Kieper at Weather Underground:
This is sad -- the very area that I documented last night, at the extreme southeastern tip of Oman, is going to be the hardest hit area from Gonu. The cyclone has moved slowly northwest during the day, approaching Oman, and the latest track has it making landfall right at the southeast corner that juts into the Arabian Sea, and then sliding along the coastline, up towards the capital, Musqat, and dissipating against the mountainous terrain. So if the cyclone follows this track, all along the coastline winds will be onshore. Microwave imagery from three hours ago confirms the remaining convection is strongest in the northwestern quad and right at that point of landfall. And IR imagery shows the core of the hurricane just offshore (although with what appears to be a slightly more northward movement, which would track it over water into the Gulf of Oman).
The Storm surge shown (10-15 ft) will almost certainly hit the Iran coast - even if the storm weakens to a strong CAT 2 late Tuesday (NY time). The Eastern tip of Oman will likely also experience 10-15 foot surge due to the close proximity of the storm track. Further up the Gulf, before reaching the Straits of Hormuz - storm surge heights of 1-4 feet are expected on the Oman side, and 4-possibly 6 feet on the Iranian side near the entrance to the Straits. Significant wave heights will be 20-30 feet, dropping to 15 feet near the Straits.This is an unprecedented event. NO CYCLONE has ever entered the Gulf of Oman. And there are no custom 'storm surge' models available for that area. This forecast is based on my experience and subjective analysis of the seabed slope and storm surge interaction with the sea floor. Considering the region has never experienced a hurricane, let alone a strong one it is highly unlikely the loading facilities or platforms were constructed to withstand the forces - both wave action and wind force - that they will experience. Significant, damage will occur. How much long term damage, and the volumes associated with it - can not be determined at this time.
And here's the latest projected track:
As for damage assessments, a tip of the hat to Kinetic Analysis Corporation (affiliated with the University of Central Florida). Early estimates of damage and tracking are available here (Scroll down to Gonu). Here's a graphic:
KAC/UCF has also been kind enough to send us some graphics of the storm surge model with the current forecast:
Here's a link to a map of land-based oil assets on the peninsula.
Regarding GONU...
http://news.google.com/news?hl=en&ned=&q=gonu
Sorted by date...
http://news.google.com/news?hl=en&ned=&q=gonu&ie=UTF-8&scoring=n
http://wwwa.accuweather.com/news-blogs.asp?blog=andrews&date=2007-06-04_...
--I can say with confidence that this forecaster has never seen the likes of this
If you go here, and click
on the North Indian Ocean links, you can get a feel for how rare this is. From 1995 on, no tropical storm of any strength ever reached the Persian Gulf.
As we know, Hurricane Hazel ripped up the US and into
central Canada 40 years ago.
Hurricanes in Canada? Thats not supposed to happen
Hurrican Juan (strong Cat 2) smacked Halifax in 2003...
New Gonu Thread on front page as of 2am, 6/6. Please place all new resources and insights there if you would. Thanks!
Exclusive Must credit THE OIL DRUM and Chuck Watson of KAC/UCF.
KAC/UCF and Chuck Watson are forecasting, based on their damage models, that the Qalhat (Sur) LNG terminal will be out for 20-30 days and the Mina al Fahal oil terminal will be down for 10-15 days--all of this assuming they are built to US standards.
You know, I was going to comment on that light/moderate damage assessment - the assumption that the facilities are built to U.S. hurricane standards is not very realistic - as a lot of the infrastructure seen in the various aerial pictures demonstrates - no seawalls, dikes, or other barricades are noticeable.
Those facilities are getting hammered very hard right now - and the hammering will continue into the night, it seems.
I expect serious to massive damage for anything connected to shipping - they simply did not build to the standards of Atlantic or Pacific storms. Often, it is hard for North Americans to grasp how incredibly violent North American weather truly is.
Oman shut its oil exporting terminal at Mina al-Fahal for about two hours - it is open again now. The Omani Oil Ministry is reproting that the storm is weakening (as we see from the maps) and that oil drilling and refining activities are proceeding as usual. They expect some delays in crude exporting, but fewer than previously expected (unquantified).
The above all from Reuters headlines
From CNN -
'Oman's major oil installations, which were not directly in the projected path and nowhere near as extensive as those of its neighbors, continued operations but took precautions as Gonu approached.'
Interestingly, Mina al-Fahal is northeast of Muscat - and from all the imagery I can see, the storm hasn't even reached there. At least according to the information at https://metocph.nmci.navy.mil/jtwc/warnings/io0207web.txt
So it is good to see that the facility was shut down for two hours before a Cat 4/5 passed, and they are now confident enough to restore operations while the storm passes.
And from Wikipedia - http://en.wikipedia.org/wiki/Mina_al_Fahal
'Crude oil and refinery products are loaded on to tankers off Mina Al Fahal by subsea pipeline and SBM (Single Buoy Mooring) Systems.
We'll see what the storm surge does - after the storm actually arrives, that is. If I understand the Navy report, that should be in about 8 or so hours, though it is curving and no longer likely to hit Muscat directly.
A shipping agent told Reuters Oman's Sur export terminal, which handles 10 million tonnes per year of liquefied natural gas exports had been closed because of the storm and the Mina al Fahal oil terminal, that ships all Oman's 650,000 barrels per day of oil exports, was likely to shut soon.
http://www.gulf-news.com/region/Oman/10130181.html
http://www.gulf-news.com/region/Oman/10130208.html
http://www.metimes.com/storyview.php?StoryID=20070605-075542-4263r
http://www.gulf-news.com/nation/Environment/10130195.html
Does anybody know what is the nature of the oil likely to be lost to the market if the Mina al Fahal terminal suffers severe damage? ie light/heavy, sweet/sour? Is this premium oil that will be sorely missed?
http://www.lib.utexas.edu/maps/middle_east_and_asia/iran_strait_of_hormu...
(from Stuart: There's past year storm tracks at The University of Hawaii (click on the North Indian years). Here's the most active past year I could find (1998):
http://www.eia.doe.gov/emeu/cabs/Iran/Background.html
Chabahar and Bandar Abbas seem relevant.
Here's a map of the area:
(here's full size).
What else do we know about Chah Bahar?
What else do we know about the storm surge, etc.?
This is a report from 7:30 a.m. ET:
http://www.forbes.com/markets/feeds/afx/2007/06/05/afx3788190.html
Oman was evacuating its coastal areas, shipping is expected to be affected as far as the Straits of Hormudz.
That is not seen as favorable for the need to build worldwide gasoline inventories.
The rotation of the storm is counterclockwise.
As I write the leading edge of the storm was striking the SE tip of Oman. Check the location of the eye of the storm. In the past 24 hours hurricane force winds were measured as about 100 miles + across the diameter of the storm (Category 1 or higher)
Realtime or perhaps some delay:
Hindela post this link at the end of the old thread. Some interesting pictures, though probably not as relevant now that the track has changed.
http://www.arabianbusiness.com/index.php?option=com_content&view=article...
provides a couple of facts.
I'm still wondering about shipping - there has been a paucity of news concerning that area.
Still absolutely zero coverage from major American media.
Why do I feel like this is a setup?
It was on CNN this morning.
But there was little concern. It was like, "Iran's gonna get smacked by a Cat. 3 hurricane, which is really unusual, but no worries, the oil fields are nowhere near the coast."
Meanwhile, traders are relieved that Oman will be spared:
Oil hovers at $70 as Middle East cyclone fears ease
Ever helpful Google News search for "gonu" asks did you mean gone?
Yes, that's exactly what I meant.
This morning, the german google news search did find zero results! Not any word! Unbelievable.
http://www.omanobserver.com/
But at news.google practically nothing
Click "read more"
The same is true of the German Google News - only two references, one press release from a heating oil company, another from what appears to be some sort of financial aggregator - and that is it.
But if you simply search for 'Gonu shipping' in Google itself, a bit more hard information appears.
I am fairly certain that there is no tanker traffic entering/leaving the Persian Gulf at this point - and that will be true for at least another 24 hours.
One thing to consider - this is a preview, so to speak, of what would happen if the Straights of Hormuz were blocked - because, as of now, they are.
While waiting for news I wondered why the media is not reporting. The oil traders don't seem interested to much either currently.
Consider if the news media was speaking about things that are spoken here. Loss of millions of barrels for a period of time. The consumer will start to hoard. This will draw down stocks very quickly. If the cyclone does not do much damage, there weill be damage from the draw down perhaps. Gasoline stocks are already on the edge it seems. This would put them in worse shape.
Wonder if the press has an a nudge nudge wink wink type of D order like the Brits. Wonder if there is a D order from the Brits.
Over the years cyclones have not really been reported on the states. There were several last year that devastated several areas, and not much on it. Just news that we weren't having any hurricanes and how good that was.
From the link from weather undergroud it seems that some destruction seems obvious, how much and how long to fix.
We will know more when, uh when, when, someone starts to report.
closed countries, could be tough.
Quid Clarius Astris
Ubi Bene ibi patria
Actually the flood gates opened within the last couple hours everyone reporting the same story about "tensions easing" with regard to the storm and oil supply. Almost like they were told it was now ok to do the story but this is what we want you to say. For god's sake, how could "tensions be easing", the storm hasn't even got there yet.
Yep! At what point was the media fretting over the storm to get the economists nervous to now say tensions/worries were easing over the storm?
Sounds like double tongue to me.
From the Oman Observer read more link:
Also
You guys are way way way ahead of the Main Stream Media..I must offer my heart-felt congratulations on a Job Well Done.
So far, this cyclone discussion has been a good illustration of our belief systems. It seems that people strongly believing that Peak oil will be a life changing event are quick to believe that the world oil industry will undergo a crisis, while people that dismiss peak oil (mostly those I talked to yesterday) think this cyclone is being sensationalized and the damage, at least to the world system, will be small.
Its interesting, as Stuart suggested yesterday, that we don't have too many internal (or external) databases to run our neural 'pattern recognition circuitry' by on this one. I hypothesize that when confronted with new information 'First CAT 5 cyclone in Gulf of Oman, headed for Strait of Hormuz', peoples initial reactions gravitate towards their previously held belief systems. Those completely sold that Peak oil will lead to societal collapse (I was going to type 'worried' but that would be incorrect), easily jump to conclusions that 'we better fill our gas tanks right away' or that this is cover for an attack on Iran, etc. Those who remain sanguine about the impact about Peak Oil quickly point out that the dry air will break up the storm before it reaches landfall and all this hysteria is overblown, etc.
The truth is that this event has never happened before so we naturally look for clues and insight to help us discover what impacts are most likely. But I found it interesting, mostly when talking to people, that their view of the storm was highly correlated to other views/discussions on the broader topic of peak oil I had with them in the previous year. Many 'man are we screwed' and many more 'if it was a big deal it would be all over CNN' type comments. The average TOD reader of the past two years would likely be on a higher alert, looking for more facts on this apparent black swan event, because he/she is aware that the global transportation system, (and thereby lifeblood) is running on some pretty low margins for error.
I sometimes wonder if Matt Simmons, Richard Rainwater, Amory Lovins and Malcom Forbes (to pick 4) sat in a room where they were 'briefed' with the entire parsed out planetary knowledge about Peak Oil (of which we all know very little), if any of them would change their core beliefs much in the face of new 'facts'. Sometimes facts are secondary to beliefs. I much prefer facts, though I have ingrained belief systems as much as most people (its just that mine are correct...;)
I took a first stab at this here
To a certain extent, you are right about belief systems.
But now, we get a few facts to play with - for example, what happens with a roughly 5 day blockage of all tanker traffic out of the Persian Gulf? That 5 day figure being based on USN information, not on any actual decision by shipping companies/captains - that is, apparently the US Navy has set up a zone where its ships should not sail in terms of Gonu.
This interruption in tanker traffic will be reality - what develops from those facts should be interesting. The other 'fact' is that it seems as if a good portion of Oman's oil and natural gas infrastructure will suffer serious, possibly massive, damage. We will also possibly have a real time glimpse into what happen when 500,000 exported barrels a day of crude is no longer exported.
It certainly won't be the end of the world as we know it - but a serious price spike because 100 million barrels won't be showing up as scheduled? Seems like a fairly easy bet, regardless of your beliefs.
Well, collectively this news is out and oil, at least WTI, is actually down 50 cents today so the assumptions of 500k barrels off the market and 5 days of no oil are either incorrect or not factored in yet.
Im not disagreeing with you - I have no idea what to expect-but oil traders are not a stupid lot - at least in the short term. However, my belief is that its only a matter of time before some 'above ground factor' will disrupt the just-in-time inventory system. When real time (as opposed to pro-forma) spare production capacity is low, any unexpected event, even a small one, can really gum up the system. I think with everything else occupying our days, the average person tends to view all this oil shipping as an abstraction - these barrels of oil show up as slippery black oil in our minds-eye, not as food, water, transportation and fun.
In any case, yes I am rooting for a spike in oil/gas prices - the sooner we have $5+ gasoline, even if its a temporary shock, the more time the nation (and world) will have to prepare and adapt for times when far fewer options will be on the table. In effect, Im hoping Gonu, or any similar event, accomplishes what the politicians cannot.
The 100 million is based on the tanker traffic which is not moving - and the figure is currently, beyond any real questioning, in the 10s of millions of barrels. The Persian Gulf is currently no longer navigable, which means empty tankers will need to wait to enter the Straights of Hormuz, and loaded tankers will wait to leave it (plus the time spent in reloading tankers which were offloaded as a precaution). And yet, this fact seems to be utterly ignored - a roundabout commentary on belief systems. And the time that the empty tankers are not being loaded is 'lost' production in terms of delivering oil to refineries. Of course there are a lot of variables, and a 'loss' of 20 or 100 or even conceivably several hundred million barrels (storm surge rearranges the seafloor enough that deeper draft traffic is no longer possible) is not that significant - except that 20 million barrels will not be coming, period. There will be a gap, of several days duration, for roughly 20% of the world's exported oil supply. And yet, this fact seems amazingly simple to brush away.
The 500k shortfall is based on Oman suffering major damage - that is a probability, or a possibility, or a likelihood, or a chance .....
How long do ships take to travel to the US (biggest buyer) from the Persian Gulf? Only then we'll see how big is the disruption at the "pipeline".
It takes a long time. If the ship travels 400 miles per day, that would still be about 25 days to the U.S., provided the tanker can go through the Suez Canal. If it goes around Africa it takes longer. The largest tankers can't go through the Suez Canal.
U.S. imports are significant, but Asia is a bigger buyer of Persian Gulf oil than the U.S. This is reflected in the prices today: TAPIS is up $0.69 to $75.79, while WTI is down (at the moment).
Tanker travel times from the Persian Gulf to Asia can still be about three weeks. When you consider that part of the supply delay due to this cyclone consists of empty tankers waiting to get into the Persian Gulf, one can easily imagine that the immediate effect on supply may ripple out for about a month.
Perhaps more relevant is how long it takes tankers to sail from Canada, Venezuela or Mexico to Europe and other areas that currently depend more on the shipping that is being held up because of the storm. It will affect these countries more in that they will have to bid for oil from the Western Hemisphere, or West Africa thus upping the global price.
Hard to tell - Europe is a gasoline exporter to the U.S. East Coast - it is likely that those exports will be cut to make up at least a portion of the shortfall.
Further, Europeans seem to be able to reduce their use of oil without destroying their economies - both France and Germany have actually reduced their use of gasoline in the recent past due to price increases - whereas American consumption continues to climb.
About the only certain thing is, 10s of millions of barrels will not be delivered on schedule - and the amount not delivered will be 'lost' - that is, it won't be made up at any time in the near term - the loading/steaming/unloading schedule is not possible to simply ignore.
Re Nate's comment on belief systems dictating responses to Gonu. It will be interesting to see who is proven right. I vote for our group here at TOD.
I don't think it's about proving who is right and who is wrong.
It's about understanding the implications. To understand the implications requires a lot of knowledge about oil, knowledge the general public doesn't have.
The cornucopians don't buy the implications.
The public just doesn't understand, and they will flock to good news if it's reported.
Whether the implications play out is up to the storm, which is in play right now. It will be interesting to watch it play out.
Nate, thoughts about the shape of the future are all belief. "Nobody knows the future" = thoughts about the future are not knowledge and are not "facts" except so far as they are facts about the current state of one's brain. And if you really think your belief about the future is correct, you're no different than a religious type preaching God.
As to the significance of this hurricane and what it will do when it hits land, we'll see, hey?
sigh..
That was an attempt at humor, serengeti. But since you bring it up, deep down, of course I believe my view of the future is correct, so do you, so does Stuart Staniford, President Bush and my mother. How could it be otherwise? Evolution would not favor genes that believed that other peoples views of the future were better than their own. The future is unknown, but certain people are better at 'pattern recognition' and extrapolating trends than others. The average person often conveniently forgets the times when they were incorrect and remembers the times they got it right - its self-confidence promoting amnesia.
However, through observation and experience (and some reading - like Nissem Taleb), I am aware that sometimes (often times) my view ends up not being correct, which is why I come to places like theoildrum to build my opinions on as firm a base of testable knowledge that I can.
I hear your comments - lets not distract this thread like yesterdays, too far from the topic at hand. If the oil traders end up being correct on this storm not being too impactful, I'll be happy to pursue this discussion further when time and space permit.
I think this statement is correct, but it has nothing to do with evolution.
Whatever you believe at the moment is what you think is right. If you believe in something, you think it's right. If you think something is right, you believe in it. They mean the same thing. If you start believing that someone else is right, that means your opinion is now the same as theirs and you still think you are right.
(This is the argument I use with my wife when she says I always think I'm right.
BTW, the argument never works.)