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DrumBeat: March 1, 2008
Posted by Leanan on March 1, 2008 - 9:45am
Topic: Miscellaneous
Annual Threat Assessment - Director of National Intelligence (PDF)
GLOBAL ENERGY SECURITYAccess to stable and affordably priced energy supplies has long been a critical element of national security. Sustained increases in global demand and the interactive effects of energy with other issues have both magnified and broadened the significance of developments in the global energy system. Oil prices in late 2007 were near record levels and global spare production capacity is below the market's preferred cushion of 3 to 4 million barrels per day (b/d).
...The double impact of high energy and food prices is increasing the risk of social and political instability in vulnerable countries. Corn protests in Mexico, bread riots in Morocco, and recent unrest in Burma are directly linked to higher food and energy prices. Higher food prices, as well as rising transportation and logistical costs, also have outstripped global aid budgets and adversely impacted the ability of donor countries and organizations to provide food aid. For example, the World Food Program's food costs have increased by more than 50 percent over the past five years and are projected to grow another 35 percent by the end of the decade.
White House wants more oil; investment not seen
WASHINGTON (Reuters) - The White House called for more U.S. and global oil output to fight rising energy costs, but a top intelligence official said on Wednesday that prices at $100 per barrel had yet to spur production."We would like to not only have exporting countries increase their output but we would also like here in the United States to be able to increase domestic (oil) production in environmentally friendly ways," White House spokeswoman Dana Perino told reporters.
She insisted, however, there was no "silver bullet" or short-term solution to high energy costs.
Dueling Markets: Can Food Fight Oil?
It's no secret that high oil prices have moved big money, some $3 trillion, from energy-consuming states in the West to suppliers like Saudi Arabia and Russia. Pooling up in huge state-controlled investment funds, this vast transfer wealth is tipping the global financial power, raising fears in the West of petrol-power domination.Or maybe not. A recent Goldman Sachs commodities report notes that growing populations and wealth in the developing world, and to a lesser extent rising biofuel production, is moving some money back to farm powers like the United States. "Food exports won't offset our oil bill, but they will help," says Robert D. Hormats, vice chairman of Goldman Sachs International. Agricultural exports are a key reason the U.S. trade deficit decreased about 6 percent last year.
Soaring fuel costs spark a tidal wave of diesel thefts
SOARING fuel costs have led to a spate of thefts of diesel from farms and goods yards across Scotland.Police believe relentless rises in pump prices have turned diesel into such a valuable commodity that it is being stolen and resold – joining copper and lead as a target for criminals seeking a quick profit.
Insurers say the crime wave has become an "epidemic" with claims from farmers doubling in the last three years.
Venezuela urges OPEC to study Exxon row
ALGIERS (Reuters) - Venezuela wants next week's OPEC meeting to discuss its escalating legal battle with Exxon Mobil, a Venezuelan official was reported by Algeria's official APS news agency as saying on Saturday.
James Petras: ExxonMobil in the midst of a lost war
Caracas 29 ABN- “ExxonMobil is in the midst of a lost war. There is no opportunity for them to gain a trial, nor they have the solidarity of other oil companies; the other oil companies understand that the current Venezuela is profitable, very profitable because the common profitability has been exceeded,” he expressed.
Wind power snafu nearly led to rolling Texas blackouts
Texas' near miss with rolling blackouts Tuesday night may appear at first blush to be a sign of the failings of wind power — more than 80 percent of the state's wind turbine energy went offline when a North Texas cold front stilled the air.But the state's grid operators say a problem they could normally handle was complicated when a number of traditional power plant operators failed to provide the amount of electricity to the grid as promised.
The details behind the close call may seem esoteric, but it's an important distinction to make in a state where wind power is the fastest-growing source of new projects and the margin between power supply and demand grows tighter.
A Florida Power & Light engineer not following proper procedure was the sole cause of Tuesday's massive power outage that left millions without electricity throughout the state for a few hours, FPL officials said Friday.
U.S. Won't Finance Montana Coal Plant
The Agriculture Department's Rural Utilities Service will not provide financing for a controversial coal plant proposed by a Montana electricity cooperative, an agency spokesman said yesterday.
'Clean' Coal? Don't Try to Shovel That
Clean coal: Never was there an oxymoron more insidious, or more dangerous to our public health. Invoked as often by the Democratic presidential candidates as by the Republicans and by liberals and conservatives alike, this slogan has blindsided any meaningful progress toward a sustainable energy policy.
Nepal king must pay $880,000 electricity bill
kathmandu • It has been a humiliating couple of years for Nepal's King Gyanendra. First, the erstwhile living deity was stripped of absolute power. Then his subjects took his face off the national currency, renationalised his palaces and decided to abolish the monarchy.Now he has been ordered to pay an electricity bill of $880,000 (£442,000) for the vast Narayanhiti Royal Palace in Kathmandu, the Nepalese capital, and several other royal residences around the country.
Lawmaker introduces gas prices resolution
Citing fuel prices that have doubled since 2000, state Sen. James J. Rhoades, R-Mahanoy City, introduced on Tuesday a resolution asking President Bush and the U.S. Congress “to control exceedingly high gas and energy prices.”...Noting the five largest United States refineries earned $228 billion in profits between 2001 and 2005, the resolution suggests “one lasting solution to this problem is to control the price increases energy suppliers pass on to consumers.”
Rising gasoline prices are a national emergency
The biggest news in the country right now, as far as I'm concerned, is what you and I are being forced to pay at the pump. And I am not just talking about local gas prices - gas is high everywhere. It is well over $3 a gallon no matter where you go, and it got there overnight - heck, in a matter of minutes. There is no sign of it going back down.
Alaska lawmakers consider oil surplus to offset heating bills
JUNEAU, Alaska (AP) - Oil rich Alaska is suffering from an energy crisis because of the high cost of fuel.The problem is especially acute in rural villages where fuel bills are often two or three times the national average.
Some lawmakers believe the state should use part of its oil wealth that's feeding a multibillion dollar budget surplus to help residents offset their fuel costs.
Pizza and beer now cost an arm and a leg
If you’re looking for a sure sign the U.S. economy is headed in the wrong direction, all you need to do is look at the skyrocketing price of “recession-proof” foods: pizza, hot dogs, bagels and beer.For many Americans, the credit crunch and the mortgage mess have left their pocketbooks – and their cupboards – bare. These same consumers, many living paycheck to paycheck, have relied on these cheaper foods to keep their expenditures down. Not anymore.
Community concern needs to be reborn
This is the first time since our agency started providing heating assistance benefits that clients are having trouble receiving fuel oil deliveries because their allocations do not cover the cost of the minimum delivery quota (150 gallons).Whether one believes that we are entering into a peak oil crisis or not, the stark reality remains that energy costs will continue to rise unabated.
Smart growth, conservation are the only ways to survive
These small, older towns are not just charming reminders of the past, they are also a bridge to the future. Basic to the concept of smart growth is another concept, "peak oil." Sometime around the 1970s, scientists in the petroleum field realized oil discoveries were declining, and that trend has continued since. It is now recognized by all but the most "head in the sand" diehards that the era of fossil fuels - which allowed for 100 years of technological and scientific expansion and provided for the lifestyle enjoyed today in the industrialized nations - is coming to an end.
IT WAS not just motorists who were in for a shock as the the price of oil passed $US103 a barrel for the first time in history on Friday. The soaring price of "black gold" is likely to affect everything from airline travel and taxis to investing, and even what you can afford to put on your dinner table.
Oil money is coming – and there is little the west can do about it
Larry Summers was in full flow. Addressing a packed meeting on sovereign wealth funds at the Davos gathering of the World Economic Forum in January, the former US treasury secretary told the investment arms of foreign governments they should sign up to a code of conduct and be more transparent.In a telling sign of the shift in the balance of global economic power, the sovereign wealth funds told Summers to get lost. The Saudis accused him of double standards: hedge funds were not being regulated despite causing mayhem in the financial markets, so why pick on SWFs? The Russians — revelling in Washington's discomfort — said American attempts to restrict investment by wealth funds was "not helpful".
Ukraine's PM says Russia will not cut gas supply
KIEV, March 1 (Reuters) - There will be no cutoff of Russian gas to Ukrainian consumers despite threats to reduce volumes over payment arrears and contractual issues, Ukrainian Prime Minister Yulia Tymoshenko said on Saturday...."I am certain that there wll be no cutoff of gas. Ukrainians will be able to use gas without fuss. No one is going to cut off anything," Tymoshenko told a news conference.
A MASSIVE fuel shortage is looming in the country amid revelations that government has started stocking diesel and petrol for the election campaign.Sources said the National Oil Company of Zimbabwe (Noczim), the sole importer of fuel in the country, has been directed to hold on to the fuel that they have imported on behalf of private fuel companies.
South Africa: Farmers Can Plan - But Not Indefinitely
Millions of dollars worth of agricultural produce have been lost due to the electricity crisis in South Africa, which has seen rolling power cuts - referred to locally as "load shedding" - across the country over the past few months.
China’s Industrial South Faces Its Worst Power Crunch in Decades
The Pearl River Delta, a center of “made in China,” is in the midst of a severe power shortage. In some areas factories can only run four days a week. The Guangdong Provincial government has declared that the province is undergoing the most serious power supply crunch since 1978, when China started the reform and opening-up policy.
Bangladesh's gas crisis may persist for a decade
DHAKA, March 1 (Xinhua) -- Bangladesh's gas crisis may persist for next one decade as there is no immediate option for addressing the problem -- neither through augmenting domestic production nor through import of the fuel, private news agency UNB reported Saturday.
2050 Peak Coal May Make the US into the Next Middle East
Despite possible uncertainties in their methods, the Energy Watch Group has published numbers that raise alarming questions about our energy future. While the United States is busy pouring resources into the Middle East to keep the oil flowing, what is being done to safeguard our domestic coal supplies?
Calif. to consider return to customer power choice
NEW YORK, Feb 29 (Reuters) - The California Public Utilities Commission (CPUC) said Thursday it will consider steps to let customers choose their electric suppliers, but must first remove the California Department of Water Resources (CDWR) from the power supply business.
China steps forward as Venezuela's key oil buyer
BEIJING (Reuters) - China could be the near monopoly buyer of Venezuelan fuel oil after Beijing stepped up financial aid to cash-strapped Caracas, but it will be years before higher volumes of crude from the OPEC member begins flowing East.
No impact from Energy Saving Day
The UK's first Energy Saving Day has ended with no noticeable reduction in the country's electricity usage.E-Day asked people to switch off electrical devices they did not need over a period of 24 hours, with the National Grid monitoring consumption.
It found that electricity usage was almost exactly what would have been expected without E-Day.
Colder weather than forecast in some regions may have led to higher use of heating, masking any small savings.
Cuba to Produce Ethanol without Sacrificing Food
Havana, Mar 1 (Prensa Latina) Cuban scientists from nine institutions met this week to analyze the possibilities to produce ethanol from sugarcane byproducts and other alternative sources without sacrificing food.
Ecuador Oil Min: Force Majeure On Oil Exports
QUITO -(Dow Jones)- Ecuador's oil and mining minister, Galo Chiriboga, said Friday the government has declared a force majeure on its oil exports."I have reviewed carefully the situation and approved the force majeure as a preventive measure," Chiriboga told Dow Jones Newswires.
Seismic data points to huge Raukumara oil strike
New Zealand could soon be known as a "land of milk and oil" as Crown Minerals plans to unveil details of a new sedimentary basin potentially more productive than the booming Taranaki oilfields.
Valero will need 2,000 workers at peak of $2.4 billion expansion
A $2.4 billion expansion to Valero Energy Corp.'s Port Arthur refinery will require 2,000 workers when construction reaches its peak, the plant manager said Friday.The expansion also will create more than 30 permanent jobs on completion, Valero general manager Greg Gentry said.
A revolution in the skies... a disaster for the planet
Cheap flights. More flights. Multiplying routes. At the end of a week that has seen protests against airport expansion, predictions of further airport chaos, and record oil prices, British travellers are showing no sign of shaking off their addiction to CO2-heavy cheap flights.A record number of new air links will open from the UK to Europe this summer. The Independent has identified 100 entirely new short-haul international routes to be launched from Britain when the summer schedules begin at the end of this month.
Football-sized boulders provide clue to Antarctic melt
Boulders as big as footballs show that a thinning of west Antarctic glaciers has become much faster in recent decades and may hold clues to future sea-level rise, according to scientists at British and German research institutes.
Matthew Simmons calls on regional oil producers to curb output
Matthew Simmons, the controversial energy investment banker, has called on Middle East oil producers to reduce their oil production to extend the life of their reservoirs.Simmons, chairman of Simmons & Company International and a leading proponent of the theory of peak oil, which states that production has reached its peak and will decline, says Middle East states risk their reservoirs collapsing if they try to increase production.
Gulf states should reveal oil reserves
There are few more controversial figures in the oil industry than Matthew Simmons. Since the Houston-based banker argued the case for the peak or declining oil scenario in his 2005 book 'Twilight in the Desert' he has been at the centre of a storm that has had a real impact on the rising oil price.If Simmons' thesis is correct, then the oil-producing states of the Middle East are living on borrowed time. Even with the introduction of enhanced oil recovery (EOR) techniques, their fields are on the inexorable road to decline. The only question is how long the decline will take.
Nigeria oil hub targeted in night attack
ABUJA (Reuters) - Armed men torched a police building and several vehicles at the main jetty on Bonny Island, an oil and gas export hub in Nigeria's southern Niger Delta, a security expert working for an oil major said on Saturday.Police spokesmen could not immediately be reached to comment on the report from the industry source, who said the raid took place in the middle of the night.
Oil firms line up for contracts in Iraq
BAGHDAD–More than 100 companies including foreign majors are vying for deals to tap Iraq's vast oilfields, but a vital oil law is stalled by tension involving the Kurdish region, Baghdad's oil minister said yesterday.Hussain al-Shahristani said 115 companies had registered to compete for oil extraction and service contracts to help develop Iraq's oil reserves, the world's third-largest.
Being Prime Minister of Canada is a cakewalk.That is because there is nothing so propitious politically as $100 a barrel oil -- and an acrimonious and engaging presidential race in the United States -- to skate onside the fractured population of Upper North America.
Cars Becoming Less Popular, But Not in China
FREMONT, Calif. — With oil prices reaching $102.08 per barrel, a record high, driving a car is becoming less affordable than ever for people the world over. In China however, people are as enthusiastic as they ever were about buying and owning cars, according to Wenxuecity.com, a Chinese language website based in California.
Area drivers feel pinch of costly gas
Kris Guist of Rainier called her family's one-ton truck a "yard ornament."Chuck Halk of Longview has a prosthetic leg and depends on his Ford pickup to get around. He called rising gas prices "ridiculous" and "sad" and worried that if they keep going up, "I'll have to take the CUBS, and those ain't no fun."
Honda's natural gas car named as Greenest Vehicle of 2008
WASHINGTON: Honda's Civic GX natural gas car has been named by the American Council for an Energy-Efficient Economy as the greenest vehicle of 2008 for the fifth consecutive year.
Hydrogen refueling stations are in the chicken and egg stage."You can't have a hydrogen car without some place to refuel it," said Frank Ohlemacher, the facilities manager at Ohio State's Center for Automotive Research. CAR houses the only hydrogen refueling station in Ohio, where it is used in research on alternative transportation technologies.
EPA justifies blocking Calif. waiver
WASHINGTON - The Environmental Protection Agency on Friday justified blocking California from cracking down on auto emissions by saying global warming isn't unique to the state.The long-awaited analysis drew angry ridicule from environmentalists and officials in California and some of the dozen-plus other states that also wanted to implement the greenhouse gas emissions reductions sought by California.
Some folks have been concerned about the winter wheat crop in Kansas and Okl if you study this chart.
http://water.weather.gov/
You will find that for the past 90 days they have received 150 to 200% of normal rainfall. The problem is in Minn and the Dakota's
actually it is a problem. There is to much rain and flooding. Whatever happened to normal?
Exactly.
Here's the latest I've found:
Source USDA h/t http://axcessnews.com/user.php/articles/show/id/13999
The USDA reports that hard red winter wheat crop conditions are not good.
Crop conditions in Texas, Oklahoma, and Kansas are not as good as last year at this time. In Texas, 61 percent of the crop is rated poor to very poor, and only 10 percent rated good to excellent; last year at this time, 23 percent of the crop was rated poor to very poor, and 42 percent rated good to excellent. In Oklahoma, 29 percent of the crop is rated poor to very poor, and 32 percent rated good to excellent; last year at this time, 19 percent of the crop was rated poor to very poor, and 53 percent rated good to excellent. In Kansas, 25 percent of the crop is rated poor to very poor, and 42 percent rated good to excellent good; last year at this time, only 7 percent of the crop was rated poor to very poor, and 62 percent rated good to excellent.
Conditions in Nebraska are about the same as a year ago. This year, 7 percent of the crop is rated poor to very poor, and 58 percent rated good to excellent. Last year at this time, 6 percent of the crop was rated poor to very poor, and 54 percent rated good to excellent.
http://southwestfarmpress.com/grains/wheat-corn-0208/
Central Oklahoma farmers may turn up some early planted, drought-plagued wheat this spring and replant milo or corn, taking advantage of good pricing opportunities. Late soybeans also may make it into the mix.
A combination of volunteer wheat, germinated from acreage abandoned last summer, and poor planting conditions early last fall left many farmers unhappy with prospects for the winter crop, says Enid, Okla. farmers James and Richard Wuerflein, and Sherwin Ratzlaff.
“Wheat planted in early September looked poor in late fall,” said James Wuerflein. “Volunteer wheat and cheat grass also caused problems.”
”A lot of wheat was left in the field last summer and never cut,” Ratzlaff said. At planting time a lot of that old wheat germinated and caused problems for farmers trying to get in a new crop.
“We sprayed some fields five times with Roundup,” said Richard Wuerflein.
“We had 40 to 60 bushel per acre wheat just laying on the ground,” Ratzlaff said.
Good thing they didn't plant Roundup Ready wheat the year before!
I never meant to imply that I wasn’t concerned. Anyway thanks for the Info.
Do you know of a website that provides weekly crop reports?
I use Ag-insight PDF, however they only report on a single crop or livestock each week.
I receive the PDF file each week from a friend as it is subscription.
No. You have to pay. And big.
To get regular crop reports, you basically have to
"understand" the crops condition already and float
across various nations/websites to correlate the data.
Delta Farm Press, Cleveland MS, is a good source,
believe it or not.
“We sprayed some fields five times with Roundup,” said Richard Wuerflein.
Ah yes, but did they achieve complete field saturation, and did they do a proper downstream belly-up count to assure that was the case? So many questions so few answers!
Oman entered its 8th year of oil production declines in 2007.
http://www.gulfnews.com/business/Oil_and_Gas/10188960.html (Gulf News)
The UAE was into EOR by injecting natural gas into mature fields. During the early 1980's the UAE boosted its stated reserves from 30 billion barrels without any major oil field discovery(s). The stated reserves have been about 98 billion barrels for years with neither decline nor addition of reserves. The boosting of reserves was political in nature in order to increase OPEC assigned production quotas for the UAE. These oil production quotas were based on stated reserves, no scientific verification was required. The UAE was estimated to be producing about 2.7 + million barrels per day. They have plans to continue EOR and mature field rehab in order to boost production to 3.5 million barrels a day or greater about 2011. At one time they desired to boost production to 4 million barrels a day. Due to the onset of continued depletion this may not be possible. After reaching peak production of 3.5 - 4.0 million barrels a day; production is expected to decline without a prolonged peak plateau.
I need to toss out a quick question to THO experts. This past week, my Environmental Politics course focused on energy scarcity and peak oil. One of the students asked about the effects of petroleum extraction on the area around the oil fields. I told them that I had never encountered a discussion about oil field subsidence being the same problem that it is with over mining water from aquifers, but I would try to find out. Is this ever an issue? If so how is it mitigated?
Yes, subsidence happens, occasionally. Also known as reservoir compaction. Most famous example is probably the Ekofisk field offshore Norway. The solution there was to cut the platform legs, jack the top part up, and weld in spoolpieces (extensions) to keep the topsides at a safe height above the waterline...
http://en.wikipedia.org/wiki/Ekofisk
Another well-known example is the change in the eastern coastline of Lake Maracaibo in Venezuela over several decades of oil production...
http://en.wikipedia.org/wiki/Lake_Maracaibo#Subsiding_Ground
Go to Lagunillas, Zulia, Venezuela in Google Earth. Here's a picture from Panoramio of a guy walking on the berm that was built to protect the city. Note derricks visible on the sea horizon...
http://www.panoramio.com/photo/2499455
And here's a paper abstract that mentions a few examples...
http://www.geocities.com/CollegePark/Library/4218/event_200312.htm
You're welcome!
The Plucky Underdog
Oil production-related subsidence has also occurred at Long Beach, CA, and to a lesser extent in Galveston, TX.
http://www-geology.ucdavis.edu/~cowen/~GEL115/115CHXXsubsidence.html
http://www.hgsubsidence.org/About/History.html
Thanks for the info. I'll incorporate it into my presentation.
What about last year's mudslides? I think they were related to drilling into a gas deposit. Indonesia?
You've probably already though of this, but Saddam's destruction of the Kuwaiti oil wells must surely rank among the worst man-made environmental disasters of all time. Such disasters have happend on a much smaller scale as well.
Here's video of Congressman Bartlett's 38th testimony in the House of Representatives on Peak Oil from 2/28/08... http://video.energypolicytv.com/displaypage.php?vkey=5b72b2e7d3527cfc84f....
Re: Matt Simmon's calls on Middle Eastern oil producers to reduce output to save oil fields from collapse up top:
So "Twilight In The Desert" isn't happening fast enough to suit him?
Talk about Peak Oil activism. This takes the cake. The implications are profound. Is he ready to defend himself? He better be. The President was just in Saudi Arabia holding hands and begging for more production. Oil is trading above $100.00. Better find a good hiding place Matt!
ractical:
(I couldn't read the article due to subscription reasons but IMO):
Matt probably believes that the damage due to oil supply contraction is better managed if the contraction is spread out over time. This implies that a barrel of oil produced next year (or next decade) will be more important to the world economy than one produced today. The mechanism should be pretty obvious, a barrel not pumped today increases the strength of the scarcity signal in the short term -hopefully
leading to economic decisions that take oil scarcity into account. The barrel not produced today, but available in say ten years time, when the world economy is trying to adjust post pek oil will go further then -as economies will be placing a premium on efficient usage of the resource.
I don't think Mr Simmons gives a rats ass about helping the Arabs to keep their oil flowing!
Why would he try and help them if they are flatly ignoring him and rubbishing whet he says. He is trying to expose them.
He may well be the coming prophet that drags us into a new fossil fuel free age but right now he is just trying to get people to realise that there is a actually a problem!
I disagree. I've read Twilight in the Desert, and repeatedly in the book he talks about if you push production past what the reservoir can handle, you may increase production in the short-term, but you will reduce the total amount of oil that is ultimately extracted. My guess is that is his concern is the total amount of oil ultimately extracted rather than short-term profit.
Maybe one of the oil-people will correct me if I'm wrong, but I tend to think about this as the milkshake phenomenon. When you get to the end of the milkshake, if you suck too hard on the straw, you bypass some of the shake and start pulling in air. If you suck more slowly, you can ensure a continuous flow of creamy goodness. In an oil field, especially the Saudi ones where they bypassed primary recovery and went straight to pushing with water on the periphery, it's not air you get if you suck to hard, but water, and pockets of oil are bypassed.
Matt is playing poker here and the Saudis know it! They will ignore him completely because if the Saudis flinch either way they will give the game away.
He is calling their bluff and the Saudis are hoping the rest of the world doesn't figure out that it is actually a double bluff! Does that make sense?
Marco.
Practical, it may take the cake as you say but it makes perfect sense. Why pump all the oil you can now when it will demand a much higher price later? Why pump it all out now when later you may not have enough for your own use?
The best thing that ever happened to the US is congress not allowing drilling in ANWR and states like Florida and California not allowing drilling off their coast. This means that this oil will be saved for the time when we most desperately need it. When globalism collapses and oil exports from most nations drops to a trickle, we will have ANWR and offshore oil to fall back on.
It makes absolutely no sense for nations to go through their oil reserves like a drunken sailor going through his rich uncle's inheritance. Holding back on oil production would be the very smartest thing any nation could possibly do. Oil not extracted today will mean more oil to extract when it becomes far more precious than it is today.
Ron Patterson
In Britain North Sea oil was pumped out as fast as possible even when prices were low. The result is it is now fastly depleting and will soon go to zero. I have long doubted the sanity of the policy but nobody questioned it.
As is normal in most basins, the large fields in the UK sector were discovered and developed first (Forties, Brent, Beryl, Ninian, Cormorant, Magnus, Dunlin, Piper/Claymore, Thistle, the Braes and a few others). The platforms were installed and the wells drilled (and the capital spent) before the oil market really collapsed in '86. What would you have had the operating companies do? Remembering that it was during the 70s that they were being thrown out of their traditional producing areas in the Middle East...
When the old invisible hand says you have to make payments on the debts from drilling the hole, you just keep producing. Lacking a NOC or any sort of long term planning mechanism, the Brits just made money for the few. Worse, when the price gets low you have to pump harder just to make the payments, adding to the temporary supply glut. As the Economist magazine noted at the time, we were 'awash in oil'. Sic transit gloria. But never, ever, expect an apology.
I think you'll find it's the banks, not the invisible hand, that insist on debt repayment. Where did you get your mortgage?
Sorry, missed this. What does "pump harder" mean in the context of an offshore production facility that is designed and built for a certain throughput?
Exactly. The designers of the throughput knew full well the party would be over about now, but acted as if it were going to be energy forever. These fields were set up for fast extraction, and when you consider the corrosion factor at sea, I can understand why. Field pressurization is pumping harder. Offshore installations don't have the same luxury of shutting in that onshore does. Regardless, they went from boom to bust in record time. The resource could and should have been handled with a longer production program.
As to the banks versus the invisible hand, unless the public controls the financing with a regard to payback in terms of energy profit over time rather than monetary profit, any form of private finance that cannot see beyond its own lifetime cannot be expected to utilize resources for a multigenerational benefit.
On the other hand - yes, that's what it looks like all spelled out! - it really doesn't matter whether we burn it up in thirty years or thirty centuries; within a cosmically instantaneous moment it will be over and we will make other plans and systems for survival. Or not.
Hi Pet,
The designers of the throughput knew full well the party would be over about now
That sounds dangerously tin-foil-helmetish, if I may say so. Anyway, back in the 70s, wasn't peak going to be in 1990 or something like that? I've seen economic projections from about that epoch that had base-case oil price assumptions of $200/bbl by about 1995.
Field pressurization is pumping harder.
Given that you can't suck liquid (or gas), I guess that's something we can agree on.
Can we knock on the head once and for all the idea that water or gas injection is some kind of extreme desperate measure? It keeps reservoir pressure above hydrosatic, (where the wells stop flowing - in a handwaving sense) and increases recovery factor. Petrosaurus - does your name imply that you are somehow linked with the industry? Have you ever seen an inflow-outflow diagram?
Cheers,
PUD.
It does matter if it lasts another 30 years. That would keep things going while alternatives are developed. Now that is impossible.
I think Matt is exactly right. It is easier to deal with higher prices than shortages. The faster we deplete fields the more erratic supplies will become.
Mexico would do themselves and the US a favor by cutting production in half and doubling their price over a declared period of 6 months. We can adapt to anything. It is the shock that kill us. If Mexico can extend deliveries from their field 5 years, that will help the transition to sustainable infrastructure.
what ? we need to encourage me oil production to keep the ethanol industry supplied with energy ?
Keep an eye on This Process, folks. It solves a lot of problems. The BioChar CoProduct can cut fertilizer costs by up to 75%.
http://www.dynamotive.com/en/technology/index.html
This all sounds good, but have they released any true accounting of EROI - energy out / energy in?
Some of the biofuel processes - if growing, harvesting, transporting, processing, and distribution are taken into account - have an EROI of 1.0 or less.