The NPC Report...
Posted by Prof. Goose on July 13, 2007 - 4:09pm
Topic: Alternative energy
Tags: iea, national petroleum council, npc, oil, peak oil, reuters [list all tags]
http://www.reuters.com/article/environmentNews/idUSN1338954720070713?sp=...
"Peak oil" advocates blast U.S. industry study, by Chris Baltimore
WASHINGTON (Reuters) - Proponents of "peak oil" -- the theory that global crude oil production has hit its zenith and is headed for a steep decline -- are steamed with a U.S. oil industry group's findings that the world has plenty of oil.
"In a draft letter to Bodman outlining its findings, the National Petroleum Council says, "The world is not running out of energy resources, but there are accumulating risks to continuing expansion of oil and natural gas production from the conventional sources relied upon historically.""
Well, it's certainly not the hyperbolic gloom and doom we all know so well here on TOD, but, then again, reading between the lines, the NPC report doesn't sound that far off. Certainly many of us would have preferred a stronger statement, but the quotation above isn't exactly telling us to go back to sleep and forget about it.
Reading these lines I think the report is indeed far off the mark.
What about depletion, and all giant fields past peak production? If these truths are in the executive summary obtained by Reuters, then they would also be the headline.
I am greatly disappointed by the leaked contents of this report, but not really surprised given the desire for oil companies to avoid windfall taxation.
I am willing to "frame" peak oil in more than one way.
One way is of course the decline because of geological constraints.
The other is that we moving from the easy to extract to the harder to extract oil. The harder to extract oil takes more resources of all kinds - engineers, special equipment, energy inputs like natural gas, and other resources like water in some cases. At some point, we are not able to continue to expand production because there simply aren't enough inputs to keep raising the amount of oil produced. This latter framing fits more with what the NPC is saying, and may be more understandable to some people.
They are only missing the fine print.
Given these massive investments we will be able to keep production maximized at the geologic decline rate.
They are right, WT export land model (ELM) is right, National Oil companies will invest at even lower rates, and I think a few people are starting to realize that with all three effects are included oil production is lowered by the sum of all three. Considering export land has oil exports effectively going to zero within ten years even with generous error margins we are looking at only 2-3 years at best before facing a major energy crisis.
Btw my wife informed me that we run out of oil by 2010 she heard this on a popular Taiwanese talk show. Just a tidbit but it shows peak oil is getting out ( a bit garbled it seems :)
Consider that the major oil companies assured us that the North Sea would not peak until sometime around 2009, while that doom and gloomer, Matt Simmons, was warning about a North Sea peak in the 1999 time frame. How did that debate turn out?
BTW, why is it that the oil industry has not been able to reverse the production declines in the North Sea and Lower 48?
From the Reuters article:
A Golden Oldie From Daniel Yergin, circa 11/04
Digital Rules
Capitalism's Amazing Resilience
Rich Karlgaard, 11.01.04, 12:00 AM ET
Excerpt:
On June 28, 2007, I noted that CNBC was reporting that Yergin had predicted that oil prices would be back down to $60 next year. I suggested that this was a strong buy signal for oil. Brent spot closed a few cents short of $80 today, up 11% in two weeks.
Future news story?
BTW, today is the one year anniversary of "Daniel Yergin Day"
http://www.energybulletin.net/18111.html
WT,
You know Yergin knows better than this. This is a deliberate conspiracy to convince the world that it doesn't need to worry about oil depletion.
After it happens and the world is in economic chaos, they'll say it's Russia or Venezuela's fault for not developing more infrastructure.
To what end? What is the purpose of the conspiracy? What are its goals? Who benefits? We seem to throw that word around at every dissenter and government organization under the sun.
If you know its a deliberate conspiracy, then I am deliberately challenging you to explain all of this.
I don't know about conspiracy but the oil companies stand to benefit from reducing the clamour for alternatives. They might well believe that peak is quite some time away but, if they do have that belief, then it most certainly is in their interests to try to convince government that no further investment in alternatives is needed.
Of course, they are also human and, perhaps more than other deniers, have a life that is completely dependent on oil, to a degree that the need to deny a problem is paramount in their minds.
I would not expect an impartial study from oil men. Conspiracy may be too strong a word, however.
I agree conspiracy is probably too strong in general. I think you have two phenomena taking place first these people generally think alike or similar. One reason they are in the positions they are in. I've often found that CEO/Presidents/VP's could almost be clones of each other in my business area. Next the world at the top in any business area is not large its not a huge group of people and the all know and generally associate with each other. The web of personal contact leads to direct dialog on certain issues. This is not a conspiracy simply normal operation of the "good old boy network".
Give the above conditions conspiracy is possible and seen routinely on Wall Street with various trading scandals but its not needed. If you consider the mainstream stance a hidden conspiracy is not needed.
HOWEVER..
I'm increasingly convinced that the US Government at the highest levels is peak oil aware and has developed extensive plans to deal with peak oil. In some cases the seem to be going awry.
For example we don't see President Bush urging his buddies the Saudi's to produce more oil in fact the have been silent on the matter since 2006. Silence can speak louder than words. So at least for me their is no doubt in my mind that the highest echelons of the governments are very peak oil aware and not happy with what the know. The fact they have chosen to keep this information secret is disturbing. I think that the did not figure out WT ELM model and I suspect the current situation may be a surprise.
Hopefully once peak oil becomes obvious we will find out exactly what was known and when. Maybe if we get a change to Democrats we will see a witch hunt that will uncover some facts. But if we are right then you know that the CIA knows in even better detail the state of the worlds oil supply so this means Bush knows so either we are wrong or he is keeping the real situation secret for some reason probably just to allow the iron triangle to extract the last few bucks out of the masses. We seem to see every indication that the plan is to rev the economy till it explodes.
HOWEVER..
I'm increasingly convinced that the US Government at the highest levels is peak oil aware and has developed extensive plans to deal with peak oil. In some cases the seem to be going awry.
Look at the bottom of page 2 (of 4pages). Notice that the section Energy Security is completely blanked out.
http://www.corbettreport.com/cache/spp.pdf
Did you know about this meeting?
No conspiracy, just no reporting of the obvious.
A Peek Behind Closed Doors
http://www.corbettreport.com/articles/20070709_spp_meeting_minutes.htm
Things are being planned, populations are not being told. Major changes are being put into place. They have a good idea of what's coming and these links are just a few of the planning going on right now on many many different fronts.
No conspiracy. Just news blackout of meeting procedings and results.
The future is already here, it's just not uniformly distributed yet
I don't think that it is a conspiracy per se.
I think that the auto, home and finance guys are focused on selling and financing the next auto and home.
I think that the media guys want to keep selling advertising to the auto/home/finance group.
The oil industry leg of the Iron Triangle is more complex, probably with motives ranging from they actually believe in the Oil Easter Bunny, to fears of punitive taxation and military takeovers (of oil exporters) to a deliberate effort to encourage consumption, discourage conservation and alternative energy and EOT plans.
Basically, the various members of the Iron Triangle seem to think that is a swell idea for Americans to continue to go into debt in order to increase their overall consumption, in effect asserting that an infinite rate of increase in the consumption of a finite energy resource base is no problemo.
WT,
You do realize that the traditional use of the term "Iron Triangle" is to describe the military-industrial complex, don't you?
It's a term that's been around forever.
Personally, I believe CERA is a card-carrying member of the military-industrial complex and is being used to keep peak-oil denial in place for as long as possible so that as much wealth can be extracted as possible from consumer society before the big crack-up.
I think Yergin and CERA have been promised a suite of offices right below Halliburton in the Dubai Tower for their help in creating the neocons' new world order.
I've been reading Yergin since 1978. His attacks on peak oil seem way overboard to me.
On Google, my version of the "Iron Triangle" appears to be at #5, and I never claimed to have originated the term.
And your aware that the military industrial complex is especially sensitive to peak oil. They might need for example to go invade the country with large remaining oil reserves to ensure their continued existence.
Right, memmel,
I really think the military-industrial complex sees this a make or break for their survival. I'm sure they read WT's export model with great alarm.
Probably this era of American history will go down as the time that instead of using the nation's wealth to build an alternative-energy future, it was all spent to try to keep the M-I Complex going a few more years.
I just wonder whether that whole crew will just relocate to the Persian Gulf and cut off North America if all this starts to get dicey ... I suppose that's what I'd do.
Yet another Einstein quote:
"When a blind beetle crawls over the surface of a curved branch, it doesn't notice that the track it has covered is indeed curved. I was lucky enough to notice what the beetle didn't notice." --Albert Einstein
"The world is not running out of energy resources, but there are accumulating risks to continuing expansion of oil and natural gas production from the conventional sources relied upon historically..."
Weasel language if I ever heard it. Yes, we have energy resources....but what about oil? And what about those unconventional sources of "oil"?
Hahah!
From the article:
Their debating tactics are par excellence, are they not? "Why Peak Oil Theory Falls Down", etc etc. An ironic title for a debunking if I've ever seen one--why, why yes, it in fact does fall "down". What dolts. Sort of like how Bush et al named Iraq War '03 OIL, then quickly changed to OIF. I think this may be that similar gymnastic political performance--before the grand finale when it becomes clear to the markets that Houston, we've got a problem.
More of the usual spouting "No geological constraints to see here". Just the terrorists, socialists and "islamofascists" trying to keep oil imports down. Just "security problems"--keep your screens tuned to CNN and FOX News for up to the minute "updates"... Infinite growth putters on forward gasping for air.
Our culture is really a wreak. Our sluggish, mammalian inefficient brains are stuck in "Please lie to me Mr. so I can feel good". It is like a religion of business and politics with a side of American sloth, consumption and waste.
Plus, I love the fact that Reuters adds that line into such a small, banal, frivolous article on such a immensely important issue. Where is our media?
I'm mad as hell and I'm not going to take it anymore. =]
Chicken suits = They are unsure of the situation = They take us seriously.
I'm trying to remember the name of the person who said it, but no one is a partisan about things that are certain.
No one debates whether or not the sun will rise in the morning. And there are no round earth partisans because everyone knows that the earth is a slightly squashed sphere. No one carries round earth signs, no one organizes round earth conferences, no on interrupts strict literalist preacher in congress screaming "Wicked!" Interestingly, there are a few very vocal 'flat earth' partisans and there are a few very vocal pre Copernican 'earth the center of the universe and the sun rotates around it' partisans. But for the most part, unlike religion (which is uncertain and depends on faith), no one has been killed recently because they believe that the earth is a spheroid and revolves around the sun in accordance to the formulas of Kepler, Newton, and Einstein.
When someone is sure about something, they don't even bother debating. Part of the reason that the oildrum is so lively and partisan is because
(1) we don't know for sure for sure how much is left (Thanks OPEC for the sealed books!) and thus we debate what's left and where,
(2) we know that many officials in control of industry and government are lying, ignorant, or deluded (And none of those are positive attributes) as demonstrated by the above article that quotes an official saying peak oil doesn't exist, the supply will just hit a undulating plateau and then permanently decline (I thought that that was peak oil?)
and
(3) people have different ideas of how the situation will play out (These range from 'Technology Will Save The Day' to the 'Return of YE OLDE WITCHSMELLER' to '12 Monkeys/Gotterdammerung/What's Opera, Doc?').
We do agree that oil production follows a bell curve and that someday soon there are going to have to be changes.
So some oil exec is sending Chicken Littles around. If everyone knew that there was enough oil forever, he or she wouldn't bother. This is a sign that things are uncertain even for them.
Charles
All good points... Thanks =]
I'll just reply to one.
lying, ignorant, or deluded
It's the ratios of those, plus a boatload of chance occurrences, that dictate how things will pan out.
I bet'cha the total level of delusion and ignorance, if not more, is right up there with the percentage knowingly lying. Don't forget the distracted--some people are so distracted that it eats into their ability to lie to others or delude themselves.
Hello TODers,
Yep, it is very disappointing that the NPC did not use stronger wording to explain the situation.
On the other hand, Dr. Richard Duncan's Olduvai Gorge Theory is number #2 when you google the word, 'Olduvai'.
Therefore, I think a lot more elementary, high school, and college students are suddenly discovering Peakoil, Overshoot, and Global Warming when assigned any kind of classroom research paper on evolution, early humans, anthropology, and other related topics.
This method is probably spreading Peakoil Outreach much faster than any student and parent awareness of NPC, CERA, DOE, USGS, IEA, EIA, ... and so on.
I am still waiting for GOOGLE to put the 'I Feel Unlucky' button on their search homepage. Hopefully, they will realize the crucial importance of this Peakoil Outreach info-tool before the Grid and Internet go down for good.
Time will tell.
EDIT: Hmmmm, maybe Microsoft will want to be first with this search engine button idea. I believe it would instantly make their search site #1 as billions would go there to check it out. Can the competitive profit motive be harnessed to further spread Peakoil Outreach? How many billions of dollars of free advertising would Microsoft get as the viral word-of-mouth marketing was quickly picked up by the global MSM?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I see most of TOD still does not get it. Well, keep tilting at windmills, gang.
And people ask why I am a doomer? Ha!
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Hello Greyzone,
I am a fast-crash realist too, but as Alan Drake has suggested, "We are bound to fail if we do nothing." We all must give our best efforts to optimize the detritus decline, then ramp up the biosolar alternative to what is ERoEI achievable. Please help to spread Peakoil Outreach as best as you can, thxs.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I agree. We can at least have a credible plan ready, "To make things not as bad as they would otherwise have been," when it begins to dawn on most of the country that it is unlikely that we will experience an infinite rate of increase in the consumption of a finite energy resource base.
No, Bob, I won't. They've swallowed the blue pill. They do not want to wake up. Leave them be.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
I feel as you do but we must try. I don't want my name to be rightly vilified by history.
Your Name, like the rest of the people here including me will be lost to the sands of time. Might as well sit back and enjoy what we have left instead of wasting energy both human and otherwise to fight the unmovable.
Agreed. We (some of us) must try. I don't think it's for history as much as it is that I have to live with myself. No matter how long I've got, my family has got, I will be doing what I can to fix what I can, to communicate and create ties with my neighbors, near and far, and teach and learn what's possible.
Greyzone is busy taking anything BUT a blue pill, so he can know he never took the blue pill. Best of luck with it.. but if there's room in the boat, I'll pull you guys in and hope you're out there willing to do the same for me.
As far as the 'enjoy the ride' comment.. this IS how I enjoy the ride. This ain't no booze cruise.. it's work, and I like doing good work.
Bob Fiske
GreyZone, I hope you aren't referring to me. Although, tilting windmills is mighty fun. And when you think it through (which you may want to try) these windmills we are "attacking" do indeed "grind the millstone". It's all a PR war, and yeah, your pessimism has much evidence to back it. Still... It is fun to take potshots, ain't it? Alas, when you generalize an offensive like this you should expect some argumentative blowback if you are vague... Nothing personal. Otherwise, in the future, you may want to cite specifics, or reply to someone and outline what you are talking about, instead of crying "doomer"--which I'm sure many here at TOD, you and I would fall into. Talk about shooting yourself in the foot (not that anyone is really paying attention, I grant this to you.) Still I say, a few are. We're here, ummm, right?
We can sit here quoting fiction all day--like CERA, the USGS, the EIA and Don Quixote. The root of the problem is that a decent "discussion about energy and our future" can't take place when there are well endowed, powerful propagandists out there throwing fuel on the fire. It is a media problem. I do agree, that the media probably won't be able to explain the scale of the problem until we get to the problem, because people don't want to hear about, it isn't good for politicians and it is not in the framework of infinite growth economics.
Why not? Let me answer that from my perspective - your problem is that you are trying or wanting to have this discussion with the entire world. That's your first mistake. The world doesn't want to listen. They don't want to hear that they are approaching the last tree on Easter Island. They just want to cut it down because that is what they are supposed to do according to their cultural religious beliefs.
On the other hand, you can have a fruitful discussion with people who do want to discuss this issue. You just have to find them and engage them. And those are the people with whom you will have the most success in building more than dialog, because if all you are going to do is engage in dialog, then why bother? If peak oil is real and already past or very close, then debating it is not going to change that reality one little bit. You've got to get beyond debate. How far? That's your call. But if all that peak oil means to you is debate and discussion, then we're not even on the same planet, let alone able to communicate.
Ask yourself this - what future do you envision and what have you done to meet that future head on? If you are not taking any concrete actions towards that future, then why are you even here? If this is just a debating club to you, then declare yourself, so that anyone looking for real actions (of any type, doomer or cornucopian) can ignore you. (I am not suggesting that you are here just for debate, mr f, but that was intended as more of a rhetorical remark for everyone reading this.)
This is why I admire Alan Drake. I don't agree with what he is doing because I don't think he can succeed (for political reasons) but I greatly admire that drive that has at least chosen a real path and is doing something with that path. Further, Alan knows the consequences if he fails and acknowledged those consequences yet he pushes onward because it is what he has chosen to do. He is not the only one taking real action, of course, but I suspect that the majority here see this as a debating club. And that is part of why the NPC report should not surprise anyone.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Hmmm. Maybe you don't get it. Don Quixote was in the minority.
Don Quixote was delusional--a nice guy, but psychotic.
His sidekick, Sancho Panza, had the realistic view on life.
WOOOOAH there, Sailorman!
(MAJOR OFF-TOPIC AHEAD)
I'm grinding my way through the 4th Centenary edition right now, and I can report that, at least as far as the end of the Novela Del Curioso Impertinente (Lotario, Anselmo and the rest), Sancho remains as deceived as (because deceived by) the Hidalgo, though perhaps more aware of his own immediate self-interest with regard to food, shelter and sex. Basically the reason Sancho keeps following Don Quixote around through all those losing battles is because he still believes that he will win vast wealth (specifically, the lordship of a tropical island) as the Esquire (Escudero, shield-bearer) of a wealthy knight. Most of the other main characters are pretty grounded, or rather their eccentric behavior is due to social pressure (e.g. Dorotea) or the actions of others (e.g. Cardenio), not their own craziness.
That's just my naive reading, of course. And you can find plenty of other analogies to This Mess We're In. Like Hamlet, the Hidalgo is infinite and immortal. And you get to see the novel being invented as Cervantes goes along.
The weird thing is that so far there has been no detectable reference anywhere in the text to the existence of, or the contemporary world-changing happenings in, the New World. Part I was published in 1605, when the Spanish Empire was the greatest in the world. What's all that about?
Exactly.
Don Quixote was in the minority. Activist peak oilers are in the minority. Don Quixote thought he could accomplish something. Most activist peak oilers think they can accomplish something. I think the parallels are quite clear.
People who want to discuss the other aspects of this know where to find me. From everything I have seen, TOD is not the place for that discussion.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
Well not sure about you guys but these days its not enough to check the price of oil you have to check two prices then go over and see how the dollar is doing to figure out if its the dollar getting hammered or a real price increase.
So if anything the days of easy peak oil discussion are over.
Bingo. This has been bugging me for some time. It seems like it would be beneficial to track oil prices against a basket of currencies. Gee, where have I heard that before? Anyway, It seems like one might be able to establish such a basket and then restate oil prices against it. Thoughts?
Well the movement of the USD down is not huge but it wipes out any gains the exporting countries make via normal investments.
They are getting slaughtered trying to recycle petrodollars into real products simply because they are the last to convert dollars into real goods. In effect they as setting on wads of USD that is losing value big time as they try to reinvest.
This is how the exporting countries lose even though they can increase the nominal dollar amount paid for oil the importers simply print more money to pay for it so they lose.
My best guess is they are running 10-15% inflation rates or higher in converting petrodollars to real goods and services did I mention its a bloodbath ?
The real war being waged right now is via fiat currencies and so far exporters are losing.
Moral of the story is don't sell oil to a customer that prints the money to pay for it.
Good point...isn't Iran asking for payment of Yen only for oil deliveries from one of the Asian countries? How long before Exporters will only deliver petroleum for other "hard" product? Petroleum bartering system. I'm pretty sure Venezuela has already done this with other countries.
I guess and this is getting over my head by getting paid in kind when you export to a particular region i.e use the local currency and not the petrodollar your hedging against a drop in the dollar. Basically most currencies are rising against the dollar so anything but the dollar is a good move.
The US could well be actively intervening in the oil markets also. I'd not be surprised to see Brent get repriced in Euros.
This seems to be a good link.
http://www.energybulletin.net/7707.html
The result at least for Europeans Japanese and Americans seems to be tough.
American are going to be broke.
Europeans will be ok but with the only stable currency they will have a tough time exporting.
Japanese will either go broke or the Japanese government will have to let the yen increase. This will also give them a tough time exporting.
I think this is why the US wants the Chinese Yuan to free float we can't destroy the dollar as planned with them pegging their currency and they are accumulating so much USD they are a threat since they can control the time line for destroying the USD.
But in the meantime as so many CB are playing with currencies they increasingly have no choice but to increase interest rates to prevent hyperinflation.
I laugh when people talk abuout interest rates lowering in the US. The Fed is working hard to find a reason to raise them again it looks like pumping the stock market is going to give them the excuse they need to increase.
The game right now seems to be who will control when the dollar will crash and it seems to be US/Japan vs China.