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DrumBeat: July 11, 2007
Posted by Leanan on July 11, 2007 - 8:56am
Topic: Miscellaneous
Kuwait says has 100 billion barrel oil reserve
OPEC-member Kuwait reiterated Wednesday that it had oil reserves of 100 billion barrels, again disputing a report that the figure was around half that amount."We confirm that Kuwait's oil reserves are 100 billion barrels," acting oil minister Mohammad al-Olaim told reporters after briefing parliament in a closed-door session about the levels of reserves in the Gulf emirate.
Mexican gas explosions force shutdowns
Honda, Hershey's and other multinational companies temporarily shut down their factories in western Mexico on Wednesday after rebels attacked a key natural gas pipeline....At least a dozen companies including Honda Motor Co., Kellogg Co.'s, The Hershey Co., Nissan Motor Co., and Grupo Modelo SA were forced to suspend or scale back operations because of the lack of natural gas, the daily newspaper Excelsior reported. They said they faced millions of dollars in losses.
Oil supplies are down and alternatives not yet available
A rule of thumb for the price of oil in the past five years has been to take the last digit of the year and add a zero: 2002 saw prices in the $20s; 2003 in the $30s; now oil is hovering around $70 a barrel. These high prices are desirable for steering the economy away from oil, but in the meantime they could also spell trouble. Oil companies need to adjust to this new reality and rethink their business model.
Russia Mulls Potentially Oil-Rich Arctic Seabed
A Russian research vessel has begun a 90-day voyage to the Arctic as Moscow continues to pursue claims to the potentially energy-rich seabed under the Arctic Ocean.
Iraqi Parliament delays meeting on oil law
Iraq's Parliament will wait a week to hold sessions that could tackle controversial issues such as the proposed oil law.Meanwhile, Kurds say the current version must be changed and Sunnis are calling for a vote of the citizens to make the law official.
African forest under threat from sugar cane plantation
The Mabira Forest Reserve, on the north shore of Lake Victoria, is home to 300 bird species as well as rare primates, and plays a vital role in the country's eco-system, storing carbon and regulating rainfall. The Mehta sugar corporation wants the reserve carved up so they can expand sugar cane plantations for biofuel production.Yoweri Museveni, the Ugandan President, is attempting to push through legislation that would strip the forest of its protected status. This would flout a deal signed with the World Bank in 2001 under which the government received £180m to construct a hydroelectric dam on the Nile in return for guaranteeing the forest's protection.
Omani develops date palm alternative to petrol
An Omani entrepreneur is promoting a biofuel for cars using extracts from date palms to cut the use of petrol in the oil-rich Gulf region, a newspaper reported Tuesday.The vehicles are running 85 percent on the new fuel and 15 percent on petrol without the need to convert the engine.
High palm oil prices squeeze Indonesia biodiesel mix
Indonesian state-owned oil firm Pertamina has cut the biodiesel blend in diesel fuel to 2.5 percent as rising palm oil prices and lack of incentives have reduced margins, an official at a biofuel group said on Tuesday.
New York publisher turns a green page
NEW YORK - In the concrete jungle of Manhattan stands a paragon of green: the new Hearst Tower, rising from the original Hearst building’s historic facade.Ninety percent of its steel is recycled. It uses 26 percent less energy and 10 percent less water than a conventional office building. Sensors detect when a room is empty and automatically turn off the lights and computers.
Watch out for $80 oil: Growing demand, tight supplies, turbulent geopolitics, hurricane season - a witches brew for crude prices
So, with both the geopolitical scene and hurricane season heating up, will we see $80 oil in the next few weeks?"I don't see anything blunting the price rise until it disrupts our way of life," said energy analyst Mike Fitzpatrick, who's firm Man Financial has an $83 target price for crude by the end of September. "With the economy the way it is, that clearly hasn't happened yet."
Saudi leader: Don't blame us for high prices
Near-record oil prices are unrelated to supply and demand and none of Saudi Arabia's customers is asking for more crude, the kingdom's Oil Minister Ali al-Naimi said on Wednesday.
'Peak oil' doomsayers are wrong - there is plenty out there. It's just a question of whether we are willing to pay the environmental price to get it.
Troubles at BP's Whiting refinery hurts gas prices
A leak that forced BP to temporarily shut down a Lake Michigan refinery's biggest crude unit has helped fuel this week's jump in gasoline prices, industry officials said.
The fragile process of refining: Several factors determine the price of fuel
Another summer of mercurial gasoline prices is here, thanks in no small part to the Achilles heel of the petroleum market - a tight supply chain vulnerable to the slightest of oil refinery hiccups.
Cold prompts fuel crisis in Argentina (audio)
A holiday blizzard blankets Buenos Aires for the first time in decades, but there's little to celebrate. Argentina's coldest winter in 40 years has spurred a massive energy crisis. Dan Grech reports.
Total, Trafigura Ship Diesel Cargoes to Chile From South Korea
Total SA, Europe's third-largest oil company, and Trafigura AG are shipping diesel cargoes to Chile from South Korea as Argentina cuts natural gas exports because of a cold spell.
Tehran to host trilateral peace pipeline meeting
Vaziri-Hamaneh stated that needed fuel for groups of people who are providing services in the country has been discussed and their fuel quota will be announced soon. The minister said there is no concern about eliminating gasoline shortage to do away with public worries, adding, “Fuel quotas considered for service and major consumer sectors are sufficient and some sectors whose needs had not been already paid due attention have been discussed during the past few days and they will be supplied sufficient fuel in the near future.”The minister of petroleum further noted that people should use more public transportation means.
Rebels say attack on Mexican pipeline is just the beginning
The Popular Revolutionary Army, or EPR for its initials in Spanish, said Tuesday's explosion and two similar attacks on Pemex pipelines in Guanajuato state last week marked the beginning of a "national campaign of harassment against the interests of the oligarchy and this illegitimate government."
United Kingdom: Beyond Nuclear - Scotland´s Energy Options
Hunterston B power plant was shut down earlier this month amid fears regarding temperature controls. This shut down comes within only a few weeks of the plant reopening following the Nuclear Installations Inspectorate (NII) concluding that the plant should be allowed to operate once more. Hunterston B had been shut for almost 6 months to allow repairs to be carried out for cracked heat exchangers. Ironically, in its periodic safety review, the NII provisionally stated that both Hunterston B and its sister plant Hinkley Point B power station, would be allowed to extend their lives from 2011 to 2017. This was on the proviso that the plants invested £4.5m on upgrading and repairing their premises.The decision to provisionally extend the lives of these power stations may need to be reconsidered in light of this further shut down. Currently nuclear power accounts for about 40% of all electricity generated in Scotland. The question arises of what Scotland would do to fill the deficit in electricity should Hunterston B close in 2017, 2011 or sooner.
Lula resumes nuclear program to make Brazil 'world power'
President Luiz Inacio Lula da Silva on Tuesday relaunched the country's nuclear program, promising to complete a nuclear submarine and a third atomic power plant both mothballed 20 years ago.
India: Of fixing price for natural gas
We know air pollution is choking our cities. But they also need electricity. The option is to build coal-based power stations to supply this need. But even with the best of technology (which we don’t have) for so-called clean coal, air and solid waste emissions are high. Gas would be an ideal option for these cities. But if the price of gas is determined based on non-existent market rates, then there is no way it can compete with coal—domestic or even imported.
BBC Radio Play – Second To Midnight
Western governments, oil companies and business analysts have long predicted that the "peak", when oil reserves become finite and the markets begin to panic, is as far away as 2030. However, Rob Turner, oil company geologist, has just uncovered that the peak is not tomorrow. It was yesterday.(They usually archive their programs later on their web site.)
U.S. airlines may face huge plane bill
US Airways (LCC) officials went to the Paris Air Show last month and did something executives at most big U.S. carriers haven't done in years. They ordered planes: 92 new Airbuses at an estimated cost of $10 billion.After a brutal half-decade in which the USA's airlines rang up $35 billion in losses, they're again profitable. But, US Airways' order notwithstanding, the little money they're making isn't nearly enough to cover what they'll need to rejuvenate and enlarge their fleets in the next two decades.
Feds Could Proceed with Drilling in Alaskan NPR-A Area
The Bureau of Land Management could allow drilling work on a sensitive region of Alaska's North Slope after it completed additional environmental research on the area, an agency spokeswoman said.
Solar ovens utilize nature's rays for energy-efficient, everyday cooking -- even in foggy San Francisco.
Ghana: Govt distributes free energy saving bulbs
The Energy Commission officially began the distribution of over six million energy saving light bulbs as part of a national campaign to conserve energy throughout the country yesterday.
Nigerian textile factories may close down
Nigeria’s 30 textile factories may be forced to close down next week because of acute shortage of production fuel, manufacturers said here Wednesday.
Venezuela, Iran to team up on $4 billion oil project
Venezuela and Iran, oil-exporting countries that have sought to assert independence from the US, plan to spend a combined $4 billion on a joint project in Venezuela's heavy-crude-producing Faja del Orinoco.
Food Conscious: The new food crusade
Organic farms, conservation, fruits and veggies in schools - the Bay Area leads the charge to change how Congress subsidizes farming.
Where have all the bees gone? Blame people, not cellphones
But as a Salon round table discussion with bee experts revealed, the mass exodus of bees to the great hive in the sky forebodes a bigger story. The faltering dance between honeybees and trees is symptomatic of industrial disease. As the scientists outlined some of the biological agents behind "colony collapse disorder," and dismissed the ones that are not -- sorry, friends, the Rapture is out -- they sketched a picture of how we are forever altering the planet's delicate web of life.
With Al Gore III barrelling down a California highway in his Toyota Prius at 105 mph, hybrid gas-electric cars may be at the tipping point of becoming a mainstream item in America.
Kuwait's oil reserves debate set
The Kuwaiti government will discuss the size of the country's oil reserves in a closed-door session with members of parliament today.The size of the reserves in the world's seventh-largest oil exporter became a sensitive issue last year when industry newsletter Petroleum Intelligence Weekly (PIW) said it had seen internal records showing reserves were about 48 billion barrels - half the officially stated 99 billon.
The difference is equal to more than four percent of global proved oil reserves, according to data in BP's annual statistical review, the oil industry's most trusted.
Kuwait and IEA Show Declining Oil Production Future
Crude oil prices could reach levels of US$100 per barrel or more if some of the latest production factors in the news become reality.
Venezuela Denies Talk of Falling Oil Output
The government on Monday denied a press report that labor conflicts at oil fields in western Venezuela have reduced output by 200,000 barrels per day."There is no diminution of production. Currently, oil production is 3.07 million barrels" per day, Energy Minister Rafael Ramirez told reporters, responding to a story in the Caracas daily El Mundo.
Salon.com published an article today, discussing how Alternate Reality Games can be used to change people’s real world behavior, and cited World Without Oil as a good example. In this game, participants acted out the scenario of prohibitively expensive and unavailable oil - from personal to systemic effects - via blogs, audio, art, and any other means at their disposal. Besides impacting the players’ individual behavior, this was meant to draw from the wisdom of crowds to find the best solutions before this happens in real life.But how well did it meet either goal? The article doesn’t say. Based on a cursory survey of participants, most seemed tuned in to oil conservation to begin with, so it’s not like that aggressive SUV driver was helped to see the error of his ways. Along those same lines, where are the jerks? Where are the guys getting mad wealthy off of peak oil at the expense of others? And where are the incompetent idiots?
So what’s behind the rise? Hedge funds? Jittery investors? Geopolitical tension?Nope. Energy watchdog, the International Energy Agency, puts it down to one thing.
Mideast power demand growth provides fuel oil new lease of life
Surging economic growth and power demand in the Middle East is giving fuel oil a new lease of life and heralding big changes in international trade of the dirty left-over product of refined crude.
Far from the protests, the Corrib drilling continues
The government or the people do not own the gas. Shell do. And if there is an energy crisis, Shell can turn off the taps. They have no moral obligation to sell it to the people of Mayo or Ireland.”
“Biofuels are going to stay at the margin,” Simmons predicted, explaining that given the food vs. fuel debate and other issues surrounding biofuels, biofuel production will never be high enough to displace the bulk of the millions of barrels of oil per day that Americans pour into their tanks as refined gasoline.But if, as Simmons has also predicted, the U.S. could be in for gas shortages as early as this summer, how are Americans going to continue traveling as much as they are today?
They’re not, Simmons told EnergyTechStocks.com.
Higher fuel prices blamed on flooding at S.E. Kansas refinery...
Consumers are beginning to pay more at the pump because flooding at a southeast Kansas refinery has reduced fuel supplies.Prices spiked ten cents a gallon overnight at some stations.
Carolyn Baker: WHAT TO DO? WHAT TO DO? Taking Action In The Face Of Collapse
Every time I write an article on collapse such as my most recent one "Happy Independence Day; You Have No Government", I am bombarded with emails asking me "what should I do?" For those who have just discovered this site, that is a legitimate question because for them, the reality of collapse may be new. Those who have been following this site for some time have heard many suggestions on what to do, but this article will offer those and other suggestions again more clearly and more adamantly than they have been offered here before. The intensity you are likely to hear in this piece is driven by the urgency which I and many of my peers are feeling at this moment. Quite frankly, it's time to quit screwing around with talking about collapse and start acting. The Rubicon has been crossed, we're not living in Kansas anymore, and we are living in the closest thing we've seen to pre-World War II Germany than anything since then. Suit up and stop theorizing and speculating. It's showtime.
Nigeria's Moni Pulo Seen Shutting in Output After Attack
Nigerian oil company Moni Pulo is expected to shut-in its production following an attack by militants on an oil production barge in the Calabar River in the Niger Delta, a trader of West African crude said Tuesday.
One Militant Killed in Failed Kidnap Attempt in Nigeria
Nigerian troops have foiled an attempt by militants to kidnap workers at a Korean firm in Southern Rivers state, killing one insurgent and injuring several others, police and locals said.
Mexico confirms attacks on pipelines
Mexico's government on Tuesday called a series of gas pipeline explosions a threat to the nation's democratic institutions and vowed to step up security after a guerrilla group claimed responsibility for the blasts.The Interior Department said it would take measures to protect "strategic installations" across Mexico after an explosion Tuesday at a pipeline run by the state-owned Petroleos Mexicanos, or Pemex, and two other blasts that rocked gas ducts on Thursday.
Saudi Arabia to cut oil supply to Asia
Saudi Aramco, the world's largest state oil company, will cut crude oil exports to Asian refiners for a tenth month in August, refinery officials said.The Dhahran, Saudi Arabia-based oil producer will reduce supplies of its Arab Light and Arab Heavy crude oil to refiners in Japan, China and South Korea by between 9 per cent and 10 per cent below the volumes set out in annual supply contracts, said three refinery officials, who received notices from the company and asked not to be identified because of confidentiality agreements.
OPEC can do nothing about high oil price: Qatar
OPEC can do nothing about the high price of oil because factors other than crude supply have sent the market to near record levels, Qatar's Energy Minister said on Wednesday...."OPEC cannot do anything about it," Attiyah said. "The world is facing a shortage of gasoline and diesel, but not crude oil. If the market needs more oil, OPEC will do its utmost but it needs to be convinced that there is a shortage."
Strong gasoline demand to push up prices: government
Strong demand for gasoline and tight motor fuel inventories will push pump prices higher in July and August, the government said on Tuesday...."This is due to a combination of rising crude oil prices, strong demand for gasoline and low gasoline inventories," the analytical arm of the Energy Department said.
China, Syria in talks on refinery
Syria and China are discussing jointly building a $1 billion oil refinery in eastern Syria, state media reported Wednesday.
Dolphin starts pumping Qatar's gas to UAE
Dolphin Energy Ltd announced Tuesday that it has started pumping natural gas through a submarine pipeline from Qatar to the United Arab Emirates."This is the culmination of a visionary nine-year project, linking the nations of Qatar, the UAE and shortly Oman in a unique regional gas grid," the company said.
Now, sheiks, emirs and other leaders throughout the Arab OPEC states of the Middle East and North Africa are afraid that a return to pre-petroleum poverty will quickly arrive with the end of the Oil Age, so they are turning towards the ever-present desert sun.
London readies for 'energy revolution'
London Vice-Mayor Nicky Gavron plans to spearhead decentralised generation so that every household in the city can eventually produce its own energy and cut CO2 emissions. New fines for polluting trucks and coaches are also planned for 2008, she has told EurActiv in an interview.
Ford: Hydrogen cars close to production
The relatively quick-and-easy answer to foreign oil dependence and automotive greenhouse gas emissions is circling the grounds every day at Orlando International Airport in Florida, according to a top Ford Motor Co. official. It's a utilitarian 12-passenger parking lot shuttle bus powered by a 6.8-liter internal combustion hydrogen engine, which Ford officials said is their hydrogen technology that's closest to mass production.
Sun is not to blame for global warming: study
Scientists on Wednesday said that the rise in global temperatures that has been detected over the past two decades cannot be blamed on the Sun, a theory espoused by climate-change sceptics.
A new Round-Up has been posted at TOD:Canada.
Wall Street's ratings agencies are starting to abandon their efforts to hide the real market value of the debts that are ironically still marked as assets in the books of countless institutional investors. To say unpleasant surprises will be revealed would be a tragic understatement. Credit markets are tightening in anticipation, and spreads are set to widen dramatically.
Hedge funds and banks are heavily exposed to the derivatives market, and losses will be colossal and widespread. Increasingly, pension funds look to be the biggest losers of all. The key-word will be 'leverage' - cheap credit borrowed to make 'easy' profits, that will now lead to hard losses.
On the energy scene, Americans are concerned about rising costs, labour constraints and environmental issues in the Alberta oil sands. Combined with increasing Canadian domestic energy demand, this could reduce energy exports to the US just as it was looking to Canada to fill its looming energy supply gap.
Resource ownership and control in Canada continue to be hot issues at the national, provincial, and territorial levels. Alberta looks to carbon trading and Ontario will have to get through a hot summer with a reduced electricity supply.
Most of you probably saw the Moscow Times article on Drumbeat yesterday about Russian oil production.
http://www.themoscowtimes.com/stories/2007/07/10/042-full.html
"Alfa Report Sees Trouble Looming in Oil Sector"
With this article, we now have problems reported or actual production declines in all of the areas of the world producing 3 million BPD or more.
• Russia - Forecast worsening outlook (9,247,000 barrels per day in 2006)
• Saudi Arabia - Declining Production (9,152,000)
• United States - Declining Production (5,136,000)
• Iran - Declining Production (4,028,000)
• China - Largest oil field peaked in 2006 (3,686,000)
• Mexico - Largest oil field peaked in 2006 (3,256,000)
• North Sea - Declining Production (4,343,000)
This would certainly strengthen the peak oil now or very soon argument.
This would certainly strengthen the peak oil now or very soon argument.
Hilarious deadpan.
I think.
or Edvard Munch's "The Scream" in a rearview mirror.
Objects in mirror are closer than they appear..
"Do you think he's gonna have that on the ride?"
- Ian Malcolm, Jurassic Park
No problem. We will run our transportation networks on oil reserves.
The doomers keep focusing on production. Be happy and focus on the huge worldwide reserves of oil.
Huge pools of oil inside the earth regenerating themselves every day.
Switching to CNG cars is growing rapidly as natural gas production was not supposed to peak for sometime.
In Peru they have 11 tcf of natural gas (EIA) and have been building an LNG plant for export. There are three CNG stations with ten more planned. They have both CNG and LPG cars.
Compressed natural gas did not require expensive refineries, reformulation additives, and was cheaper than gasoline. It had less carbon per molecule and burned clean. It did not require heavy bulky fuel cells. The natural gas was ligher than air and dissipated if disrupted by collision.
CNG and LPG may work in a few places in the world (Peru, Iran), but the supply beyond the next couple of years is questionable in places like the United States and Europe.
It seems like LNG will not help the world supply situation much because the amount of LNG available is going to be much less than the world will be demanding.
Consider Russia, Qatar, Bolivia, Australia, Malaysia, PPNG, Egypt, Oman, Algeria, Libya, Angola, Nigeria, Indonesia, Saudi Arabia to name a few more.
About 115000 Btu’s per gallon of gasoline--octane varies ($2.33 Nymex wholesale).
1 mcf of natural gas = 1020000 BTU's ($6-7 Nymex wholesale).
It appears like natural gas is currently about 4-5 times cheaper than gasoline in the U.S. in terms of BTU's per dollar.
In Germany retail gasoline was 2-3 times more expensive than in the United States.
It seems fuel switching in NG producers might reduce some of the oil panic.
Correction NG might be more than twice as cheap as gasoline
Note this fits the Westexas export substitution model.
1st oil (already) 2nd gas (starting now) 3rd coal (soon).
No problem.
Oh Really?
We will run our transportation networks on oil reserves.
And when the reserves are used?
Huge pools of oil inside the earth regenerating themselves every day.
How is that possible?
http://www.geo.vu.nl/%7Erondeel/grondstof/oil/oil-total-web.html#_Toc531...
You are a little light on data to back up your position. But go ahead, convince me. Convince others.
Don't worry Gunga, sarcasm is completely lost on some people.
Ron Patterson
On TOD, with our occasional cornucopian denyers, it's hard to say when when it's sarcasm and when it's delusion.
Unless of course, one knows the person throwing in the comment. That helps :)
That's why I always try to include a ;) or put [sarcasm] tags around my sarcasm. :)
~Durandal (http://www.wtdwtshtf.com/)
On TOD, with our occasional cornucopian denyers,
Tis best to ask these folks "why" when they show up.
Because if they are wrong, they might learn something while their answer is being addressed. Or all of us might learn something we didn't know.
Ummm... Eric...
I think he was peddling a bit of sarcanol there.
At least I sure hope so ;-)
A bit? How about gallons??
Or, rather, barrels...
One correction to the above listing. China's largest field peaked in 2003, and has been declining a few percent a year since.
China's total oil production for the first three months of 2007 is pretty similar to last years, but it is too soon to say that China's production has peaked.
So perhaps I should say that that six out of the seven largest production areas have production problems. We don't really know yet about China.
The bombing of the Pemex gas pipelines is a bit of a warning shot that will be a factor in the "above ground" issues sending oil and NG prices higher. It is similiar to what is occurring in Africa. Local insurgents throwing a monkey wrench into the status quo of those "stealing" the natural riches of their country.
I'm not saying I agree with what they are doing, only that I think it will become more widespread and lead to more "militarization" of the pipeline infrastructure around the world. These are the domino effects that will lead, IMO, to the total nationlization of petroleum/NG resources in the not too distant future.
These are also "wild cards" in what will happen to energy availability and prices at any point in time and any region of the world.
Yeah. This is why I think it's foolish to ignore "above ground" factors. They have always been a part of oil production. (If they weren't, peak oil would have hit a lot sooner.)
And I fully expect above-ground factors to become more important, not less. Scarcity and high prices embolden the leaders of oil-producing countries (like Putin and Chavez), attract attack by insurgents, and encourage energy workers to strike. It is also encouraging oil drilling in riskier areas, whether further out in the ocean or deeper into politically hostile territory.
But, that's only because you probably believe oil is a finite resource...
Seriously, that is a very very good point that Colin Cambell makes often. The more efficient and successful you are at extracting the stuff, the faster you deplete the resource. Duh. Why economists can't grasp this concept is very interesting.
No, it isn't. A lot of peak oilers fall back to the "it's only above-ground factors" argument. They believe oil will peak, but not until next year, 2010, 2015. Right now, it's only "above ground factors."
Then there's the bottom-up analyses, even by peak oilers like Skrebowski. Way too optimistic, IMO, because there's not enough of a fudge factor...for those above-ground factors.
Anytime you try to run a system of any significant complexity at or near it's maximum capacity for an extended period, you will run into limitations ("above ground factors"). The system just becomes too vulnerable to each individual failure - it's entropy I suppose. Try it on a crowded highway - you know that road can carry a higher volume of traffic if people just paid a little more attention, but it won't happen. If there was enough spare capacity then people would not target the oil infrastructure because it wouldn't be effective.
This is why I don't understand why people insist on considering a purely geologic peak, and ignore the "logistical" peak. The geologic peak is only an upper bound which at best can be achieved only for a short time. Those "above ground factors" will always limit it to less.
This is well understood in the theory of complex adaptive systems, and especially resilience theory. A complex adaptive system goes through a process of growth and increasing exploitation of its environment. As it grows it gains efficiency and interconnectedness, and loses resilience as direct consequence. Near the peak of its development the system is very brittle (has very low resilience), and "synchronous failures" or failure cascades can be triggered by various external or internal shocks. These failures ultimately push the system into a "release" phase, which may be an outright collapse depending on the system dynamics.
This is the key insight in Thomas Homer Dixon's book "The Upside of Down" and is the main area of study for The Resilience Alliance
THANKS !!!!
I've been jumping up and down all over the place trying to express this. You did it with a simple example.
Another one is the cracking of steel a steal beam or breaking ice on a pond these systems collapse early because small microscopic cracks in the system widen and cause breakage.
So ELM despite its serious repercussions is a upper bound on oil supply going forward. Also you can look at the fact that prices begin to increase exponentially once supply is less than
5% of demand.
The point is we need only consider ELM as the major contributor to the worlds oil production and esp exports until it is 5% less than demand. Taking demand as remaining constant at the 2006 production levels we can see that we cross this threshold in late 2008-2009. Past this point above ground factors will ensure that production will be less than ELM predicts and depending on how things play out
probably a lot less over time.
The only way out is for some serious conservation that allows a cushion to form.
Considering all the geopolitical factors the easiest way to get this cushion if form OPEC to cut even more oil supply.
They actually should cut and additional 2mbpd and maintain a real and sustainable 2mbpd or more buffer in production.
If they do this then it will allow them to keep above ground shocks from spreading.
The approach thats needed is similar to fighting forest fires where you back burn from a fire line to put out a fire. Thus post peak the answer is to fight fire with fire and deliberately drop the normal production well below real capacity so you can cushion the certain disruptions.
I don't think we can save ourselves but I do think OPEC can if they cut production wisely and only increase again when shortages threaten collapse.
If we could only have a leader in the Arab world to come forward and offer to save the west from itself. Our Arab brothers have to put someone out front other than bin Laden that could articulate the issues and lead the discussion. Maybe Obama could lead America toward that end if our Arab brothers do not assume the leadership mantle.
The Muslim countries are no more a monolitihic bloc than are the Western States. For the 'Arab Brothers' to put someone forward as a leader, first the Caliphate would need to be reestablished, the possibility of which we are opposing in Iraq, Iran and Syria and elsewhere. Besides, it would not be in the interests of a new Calaphate to 'save the West' since they would see the West as their tormenters since the time the first crusades were launched. Although Obama would probably form a more credible leadership than our current administration, I dont think that he would be perceived in the ME as a 'Muslim Brother.'In other words, we have sown the winds of the ME, now we will reap the whirlwind.
Well said.
One of the things I've mused about regarding PO is "discontinuity" and the effect it will have on society as a complex system. This may seem so obviously true it's trivial, but some I've talked to haven't thought about it much, seemingly.
There are more aspects of our society that you might think which are not resilient against discontinuity. One metaphor might be a leaky boat with bilge pumps running; I had occasion to operate a WWII subchaser for some projects and it was basically kept afloat by being constantly pumped. When the pumps stop, a boat sinks, and at that point it is irrelevant whether the bilge pumps can be made to work again.
Similarly, in the complex system that's the human body, a hiatus of 6 minutes of oxygen will destroy large amounts of the brain, and no amount of oxygen or anything else after that will restore the system.
This is, for instance, the case in many mines. I think a lot of 'em have to have the water constantly pumped out; at the point they ever flooded it might or might not be possible to return them to service. This may, in fact, be a huge issue, since many things could cause an industrial discontinuity.
In a more subtle way, I think our entire industrial society has aspects which will not be resilient to discontinuity, in a thousand ways. Like, if the power goes off, all of a sudden it's safe to steal the copper cable. If there's a hiatus in law enforcement, those forces held in check by it will move into a new stable state. Once there is a hiatus of retail supply and the psychology of scarcity crops up, people's shopping habits will abruptly change from "just enough" to "hoarding", turning a shortfall into an unbreachable gulf of supply.
The thing about evolved complex systems is that they suck at being resilient to hiatus in detail; like the rainforests, you can permanently lose a huge amount of complexity if there is discontinuity in any parameter. Such systems wind up holding themselves up by their own bootstraps in a very real way; the amazon forest sustains its own climate, etc. Huge complexity built on marginal soils, and it is the continued play of complexity which sustains itself.
A lot of discontinuities will be showing up in many places. Human industrial civilization and the ecosystem require continuity in myriad ways, and that will be failing.
This is why shortages are much more damaging than high prices.
I think we are going to have shortages simply because to many oil users are fairly well matched in capitol. To many deep pockets is the problem. Think of it this way the US is wealthy enough to purchase all of the worlds oil supply. Same with the other major economic regions. So I think we will see demand destruction from outright shortages before we see it from price.
The US GDP is 13.3 trillion.
about 30 billion barrels a year at say 100 dollars a barrel = 3 trillion a year for all the worlds oil at a fairly high price.
The point is the world has enough wealth for most of the oil consuming nations to afford to purchase all the worlds oil many times over even if it goes to 200 a barrel.
So shortages are far more likely than demand destruction from price.
Similarly, in the complex system that's the human body, a hiatus of 6 minutes of oxygen will destroy large amounts of the brain, and no amount of oxygen or anything else after that will restore the system.
This is one of my favorite metaphors for the critical nature of oil, and why "running out" is not the point. Same with blood: someone with an arterial bleed will go into hypovolemic shock a hell of a lot sooner than when she "runs out" of blood.
Dragonfly41,
Mexico nationalised its oil and gas resources in the 1930's. The petroleum sector provides about 30% of the government income. This is a direct blow at the government, and they did it without bloodshed.
By contrast in Nigeria the oil is produced in foreign concessions-and the revenues are stolen by the political elite with the help of the multinationals. They are likely to have a revolution and nationalisation.
Yes...what I am saying is that I see reserves that are currently owned by "corporations" to be nationalized in the future due to "national security issues".
"The bombing of the Pemex gas pipelines is a bit of a warning shot that will be a factor in the "above ground" issues sending oil and NG prices higher. "
Anyone want to wager we will see "Terrorists in Mexico Trained by Venezuela military" headlines in the near future??