DrumBeat: April 13, 2008
Posted by Leanan on April 13, 2008 - 9:15am
Topic: Miscellaneous
Peak and ye shall find - it doesn’t have to be so bad
Let’s begin with a silly bet sent out by ASPO (Association for the Study of Peak Oil) to CERA (Cambridge Energy Research Associates, part of IHS). It wasn’t bad marketing: I suspect that some magazine(s) will publish the supposed $100,000 bet. But eventually I came to see it as the publicity stunt that it was. CERA won’t take the bet, and even if they did, money would never change hands from the non-profit ASPO to the profitable CERA in nine years. The bet was whether CERA’s recent forecast of 112 million barrels a day of global “oil” production capacity by 2017 would materialize, up from about 87 million today.
Are We Doomed? Why Civilizations Like Ours Fall
MacKenzie says it all comes down to how complex and interconnected your civilization is. Hierarchies tend to create increasing levels of bureaucracy, each serving in part to deal with problems created by the other levels. When the situation becomes too complex to manage, she says, "you turn into a network where the decision-making is sort of decentralized."
Carolyn Baker: Recession, Depression, Collapse: What's Fear Got to Do with It?
No one walking away from a foreclosed home, no one declaring bankruptcy, no uninsured person staring in the face tens or hundreds of thousands of dollars in medical bills needs a maestro or any other member of the ruling elite to tell them that not only are we in a recession, but we are on a fast-track to a depression that is going to make 1929 look like living in the lap of luxury. It's called the collapse of Western civilization, and it is well underway.Oh, you don't like my use of the word "collapse"? Then please listen up.
The Coming War with Iran: It's About the Oil, Stupid
World civilization is based on oil. The world is running out of oil. The oil companies and governments are not telling the truth about how close we are to the end. Dick Cheney knew about peak oil back in 1999 when he spoke to the London Petroleum Institute as Halliburton CEO. He predicted it would come in 2010. After that it's just a matter of years before it runs out. Whoever controls the remaining oil determines who lives and who dies.
Iraqi government orders crackdown on unauthorized control of gas stations by militias
BAGHDAD: The Iraqi government on Sunday announced plans to crack down on militiamen controlling gas stations and oil distribution in a new move to dry the resources of armed groups.Iraqi Prime Minister Nouri al-Maliki has given instructions to ban the interference or the presence of any unofficial people or groups at state-run and private gas stations, refineries and oil distribution centers, according to a government statement.
'Sky-high' oil prices to last until 2020
The world is now in a period of sky-high oil prices that will last a long time — probably until 2020, according to the world's largest investment bank.Senior analyst Gioavanni Serio in Goldman Sachs, visiting Norway, told participants in an energy seminar that the oil industry moves in 20-year cycles, reports finance industry newswire E24.
France says food should take priority over biofuel
PARIS (Reuters) - Production of food must take precedence globally over biofuels as prices surge and the threat of famine grows, France's farm minister said on Friday, calling for a European Union initiative on world supplies.
German development minister calls for reguluation of biofuels market
WASHINGTON: Germany's development minister is calling for greater regulation of the global biofuels market to prevent its expansion from driving up food prices.Heidemarie Wieczorek-Zeul says "it is unacceptable for the export of agrofuels to pose a threat to the supply situation of the very people already living in poverty."
Darling calls for urgent review of biofuel policies
Alistair Darling has demanded an urgent review of international biofuel programmes as part of a plan to tackle the world's mounting food crisis. The Chancellor said he had asked the World Bank to produce an analysis - for June's G7 meeting of global leaders - on the impact of green policies, including America and Europe's biofuel programmes, on global food shortages.'This is an urgent problem,' said Darling, who was speaking in Washington at a meeting of G7 leaders. 'People across the world will say, "Why didn't you see this coming?" when it is staring us in the face. We have got to take action.'
An all too visible energy crunch lies at the heart of Pakistan's unfolding economic crisis. In fact, its deleterious effects in various sectors have become obvious probably a trifle earlier than expected because of a rapid increase in demand.It is a problem that all the states of South Asia face in a setting where for reasons that vary from case to case actual achievement in developing power has lagged behind national planning.
Britain ignored risk of whale extinction in rush for oil and gas
Britain agreed to bankroll controversial drilling for oil and gas, despite a warning from its own officials of the "potentially devastating effects" on a critically endangered species of whale. The decision to flout their own experts' advice is revealed in deeply embarrassing documents the Government fought for three years to keep secret.
A warm welcome: Oil and gas in Peru
WITHIN a decade, says Peru's prime minister, Jorge del Castillo, his country will be a net exporter of energy. While other Latin American governments are tightening the screws on foreign investment in oil and gas, Peru is courting it. It has opened up swathes of the country to exploration, and is encouraging the $1 billion modernisation of a state-run oil refinery and the construction of an export terminal for a huge liquefied natural gas project, which would be the biggest investment in Peruvian history.
Oil, environment, lifestyle fuel Asia's two-wheeler boom
SINGAPORE (AFP) — Record high oil prices, environmental concerns, affluent lifestyles as well as the need to dodge city traffic are driving a boom in Asia's motorcycle and bicycle market, industry figures say.The rediscovery of cycling as a way to keep fit is also helping to boost demand for two-wheelers, those at a bicycle and motorcycle exhibition which runs in Singapore until Sunday said.
Energy and food problems need global solutions, says Sachs
Any one of the problems that economist Jeffrey Sachs takes on would be daunting by itself: finding sustainable energy sources to avoid environmental destruction; stabilizing world population; ending extreme poverty and creating a new system for global cooperation.Yet Sachs, who directs the Earth Institute at Columbia University, tackles all four in his new book, called "Common Wealth: Economics for a Crowded Planet."
He argues that finding solutions to these interconnected problems is not only possible, it's inexpensive, and would take just 2 to 3 percent of the world's annual income.
Shell Finds Leak, Shuts Oil Pipe From Gulf to Midwest
(Bloomberg) -- Royal Dutch Shell Plc said a leak forced the shutdown of a crude oil pipeline that moves more than 1 million barrels a day from the Gulf of Mexico to Midwestern refiners, cutting supplies at a time of near-record prices.
High gas prices portend 'The Long Emergency'
While many drivers may be concerned about the short-term drain that gas prices are having on their wallets, author and activist James Howard Kunstler says the bigger problems associated with oil and gas are profound, long-range, and irreversible.Kunstler believes that what drivers are witnessing now is only a glimpse into what the future holds for society as a whole -- a future that will force communities around the world to restructure the way they're organized.
It's bad enough some cash-strapped families are forced to remortgage just to keep up with skyrocketing energy prices.If you think $1.14 a litre at the pumps is gouging -- just wait for summer.
But Lord help the lowly consumer if our new crisis, a global food shortage, hits home.
Delhi govt. cracks down hard against hoarders
Cracking down on hoarders and black-marketeers, the Delhi Government has conducted raids in the capital and recovered huge stock of edible oils, pulses and cereals along with confiscating a whopping 2.5 lakh quintals of rice from a godown in Narela.
India: No food grain use for bio-fuel production
On Board Air India Special Aircraft, April 13 (IANS) India may be talking to Brazil over bio-fuel production for fuel sustainability, but Prime Minister Manmohan Singh is clear that his country, facing a food shortage, will not copy the South American nation to make ethanol from edible plants. According to Vilasrao Muttemwar, the minister for non-conventional energy accompanying President Pratibha Patil on her visit to Brazil, Mexico and Chile, Manmohan Singh has said that food grains should not be used to make bio-fuel in India.
As food costs climb, so do the number of starving people around the world
Blame Australian drought. Blame the shrinking dollar. Blame ethanol. Blame $100-a-barrel oil and $3-plus gasoline. Blame China for finding prosperity. Blame India, too. Blame humankind for liking the taste of meat.Whatever’s to blame, it’s the world’s poor who go hungry.
The number of hungry poor on the planet had stabilized in recent years. But soaring costs for food, and for shipping it to the starving, form the basis of a burgeoning global food shortage.
How Far is the US From Food Shortages and Food Riots?
As one retired grain salesman noted, most of the nation’s grain is moved around the country by just TWO railroads. Little is stored in the event of disaster and the whole system is extremely vulnerable. While we in the United States look at the food riots in other countries with a sense of disbelief, we are not immune. Under the right circumstances, we could be in the same boat.
After Protests, Haitian Leader Announces Rice Subsidies
Responding to violent street protests against rising food prices that ground Haiti to a halt over the last week, President René Préval announced subsidies on Saturday that he said would cut the cost of rice by more than 15 percent.But the emergency move was not enough to stop Haitian senators from voting to remove Mr. Préval’s prime minister, Jacques-Édouard Alexis, who has been blamed for handling the struggling economy ineptly.
LONDON: Saudi Arabia, the world's top oil exporter, has trimmed its output to about nine million barrels per day (bpd), a Saudi oil source said yesterday.The level is slightly lower than the 9.2m bpd that Saudi Arabia had been producing until now and reflects lower customer demand, the source said.
Oman inflation jumps, showing cost of dollar peg
MUSCAT/DUBAI - Annual inflation in Oman, one of six Gulf oil producers, surged above 10 percent this year for the first time in at least 18 years, highlighting the cost of being pegged to the ailing dollar as food prices soared.
Calderón's high-stakes gamble over Pemex
For 70 uninterrupted years, the constitution has guaranteed Pemex unchallenged control over Mexico's oil resources, from exploration to the gas pump. And for many Mexicans, any change in that formula is tantamount to sedition.The change needs to happen nonetheless. Pemex is financially mismanaged, partly because of corruption that has helped enrich several of Mexico's elite families. It is inefficient, has a bloated bureaucracy and is badly in need of modernization. Though treading lightly, Mr. Calderón is taking the first steps to put Pemex on a better path.
Bangladesh okays $3bn Saudi oil investment
DHAKA: Bangladesh has approved to go ahead with a $3bn investment by Saudi Arabia to set up an oil refinery with a capacity to produce 300,000 barrels of oil products a day, a senior official said yesterday.
Shell wants to set up a global CO2 market
Royal Dutch Shell, Europe's largest oil company, wants a global carbon market to be introduced as "quickly as possible" to ensure that nations like India and China participate.
Alberta Govt Gives Royalty Break To Deep Oil, Gas Dvlpmnt
The Alberta government announced two new royalty programs Thursday to encourage the development of deep oil and gas wells, responding to criticism about the "unintended consequences" of its new royalty regime.The programs will provide royalty breaks to the high-cost, high productivity wells that were hit hard by the royalty rate increases announced in October.
Conoco, BP plans for gas line carry hope to economy
BP and Conoco Phillips' announcement Tuesday that they will move forward to prepare for an open season for a gas pipeline should send a jolt of new confidence through the state's business community, which we badly need, what with worries of a national recession.I was amused, however, by all the politicians in Juneau crediting themselves for making this happen. The two companies said that a deciding factor in moving ahead now is their belief that we are in a new environment of high energy prices for good.
Venezuela oil wealth no cure for problems in health care
Problems in Venezuela's health care system did not materialize when Chavez took office. The system has been beset by corruption, mismanagement and disorganization for decades. Tropical conditions have made the country ripe for a host of epidemics difficult for any government to control. An encephalitis outbreak in 1996 sickened 20,000 people.But the system's current crisis comes as the country is awash in oil wealth, a windfall that critics say could be used to ease the problem.
What Alabama citizens might not realize is that trial lawyer type "Robin Hood" schemes against deep-pockets companies will ultimately rob jobs, diminish health care availability and restrict economic development in areas that need it most.
Pakistan: APTMA slams 8-hour load-shedding
LAHORE: All Pakistan Textile Mills Association Chairman Punjab Akber Sheikh has slammed the unprecedented six to eight-hour unscheduled and unannounced load-shedding being endured by the textile industry. Contrary to assurances of managed load shedding, the distribution companies (DISCOs) and the National Transmission and Dispatch Company (NTDC) were shutting off electricity to textile units directly from the grids.
A solution for Lebanon's power shortage
The installation of a solar water heater in Lebanon is an effective way to combine ecology, economy and energy independence.
South Africa: Is Eskom shocking us into using less power?
Eskom's drive to drastically hike electricity tariffs is a "shock and awe" tactic aimed at getting consumers to permanently slash their consumption.
As chief executive of one of San Luis Obispo’s newest high-tech companies, King Lee says he believes his General LED business holds the torch that will re-light the world.
On the Irish Coast, Reconsidering Energy From the Town Up
DUNDALK, Ireland - WHEN the fearsome Cuchulainn was transformed by the rage of battle into a Celtic Incredible Hulk, according to Irish mythology, the warrior’s intensity melted snow for 30 feet around him. That was an impressive generation of alternative energy from this Achilles-like hero so closely associated with Dundalk, but this town on Ireland’s east coast is turning to less ephemeral kinds of power as it tests technologies to reduce the country’s thirst for fossil fuels.
When Cheap Housing Isn’t: How Transportation Changes the Equation
Ballooning gasoline prices aren’t just changing how people drive—they may soon change where people live. With gas stuck above $3.00 a gallon, those cheaper houses in the suburbs can be a money-losing proposition in the end.
A Cleaner, Leaner Jet Age Has Arrived
JET engines are now so reliable that a pilot can go an entire career without seeing one fail. Autopilots are so good that some airlines have set up their cockpits to emit a loud beep every few minutes, to make sure the crew is still awake. And navigation is so accurate that landings can be timed to the second.So what’s left to worry about in aviation?
In a word, fuel.
Defects found in nuclear reactor the French want to build in Britain
Safety investigators uncover cracks in the concrete base and substandard welds. Lack of recent experience in building nuclear plants said to have caused problem.
Death Looms for a Flood-Control Project
STEELE BAYOU, Miss. — Seven decades of hydro-engineering have transformed the lower Mississippi Delta from wetlands to dry fields of cotton and soybeans. Levees and canals funnel runoff from hundreds of thousands of acres here to a huge set of metal gates that sit across Steele Bayou.The debate over whether the Delta’s transformation was an engineering feat or environmental folly winds up here, too.
Saudi King says keeping some oil finds for future
Saudi Arabia - RIYADH (Reuters) - Saudi Arabia's King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world's top exporter for future generations, the official Saudi Press Agency (SPA) reported."I keep no secret from you that when there were some new finds, I told them, 'no, leave it in the ground, with grace from god, our children need it'," King Abdullah said in remarks made late on Saturday, SPA said.
Bakken oil shows market’s true power
We’re running out of oil.Whale oil, that is.
And if an American prophet had said that in about 1850, he or she would have been right.
But so what? In the early 1800s, the future wasn’t about whale oil, it turned out. Even though whaling was one of America’s biggest industries and most Americans lit their lamps with whale oil at night.
Is sun setting on Hawaii’s future?
For 25 percent of adults, the first sign of heart disease is sudden death from a heart attack.For isolated economies, the first sign that you have flamed out might be that the planes stop flying to your airport on a regular basis.
UK: Crushed on the road to oil armageddon
ANOTHER WEEK, another set of dire omens and fears for the UK haulage industry. Last week it was the turn of Unite, Britain's largest trade union to warn that unless the government implements an essential users' rebate on diesel tax, small companies will go bust and employees will lose out on wages.With the industry reeling over the price of diesel and the massive amount of tax commercial users have to pay, Ron Webb, Unite's national secretary for road transport, said: "The government needs to listen to the trade associations. Unless they introduce a method of returning some of the tax to road haulage companies they will simply not be able to continue to operate. Not only will small companies go bust but larger companies are informing us across the bargaining table that unless they see a change soon it will mean lower wages for employees."
Chevron, Total seek oil deal in Iraq
BAGHDAD - Oil giants Chevron Corp. and Total have confirmed that they are in discussions with the Iraqi Oil Ministry to increase production in an important oil field in southern Iraq.The discussions are aimed at finalizing a two-year deal, or technical support agreement, to boost production at the West Qurna Stage 1 oil field near Iraq's second-largest city of Basra.
Steve’s aim is to shake city-dwellers out of their complacency about plans to build the Traveston Crossing dam and show them what is at stake.He said the world has passed peak oil, we need food sources close to urban centres, the Lockyer Valley is drying up and the government is planning to flood arable land on Brisbane’s doorstep. Moreover, climate change will bring reduced rainfall and the dam will contribute to greenhouse gas emissions, he added.
Shell's future in Nigeria in doubt
Royal Dutch Shell is facing pressure from the Nigerian government and increasingly violent opposition in the Niger Delta oil-producing region, raising questions over its long-term future in the country.
Australia: Diesel's turn under the pump
THE new petrol price watchdog has promised to scrutinise soaring diesel prices, amid concern that oil companies are using the fuel to gouge profits previously earned on unleaded.
Financing crucial to next climate change pact: U.N.
WASHINGTON (Reuters) - The global fight against climate change after the Kyoto pact expires will fail unless rich countries can come up with creative ways to finance clean development by poorer nations, a U.N. official said on Saturday.
I don't know if this has been posted, but refinery closures in importing countries are a logical consequence of the export/import dynamics. BTW, interesting comments by the Saudi King, as their production is reportedly again declining.
http://www.arabtimesonline.com/kuwaitnews/pagesdetails.asp?nid=15252&cci...
Oil refining surplus may bring wave of UK, US plant closures
DUBAI (RTRS):
Regarding the Saudi comments:
http://www.theoildrum.com/node/2767
Net Oil Exports and the "Iron Triangle"
July 13, 2007 - 8:00am
But now they are saying they are setting aside some fields for future generations, which seems like a very rational way of looking at things. I don't see our oil companies offering to set aside, say, ANWR, Bakken, or the OCS for future generations.
They clearly have signaled that there is a problem, that oil is not infinite, that they, and therefore we, need to take alternative action to prosper, or even survive, in the future. Even if their lack of additional production is a function of choice, and not necessity, so what? What would change the dynamic to induce them to produce more oil? If these prices won't do it, what would? $500 oil?
Of course, we are getting decidedly mixed messages from the Saudis. The oil minister is talked about proven + probable + possible of hundreds and hundreds of billions of barrels, approaching a trillion.
In any case, the data are not yet conclusive, but we can say that the successor swing producer, Saudi Arabia, is showing the same post-peak characteristics as the prior swing producer, Texas, at about the same stage of depletion (based on HL), to-wit:
Higher Oil Prices + Increased Drilling = Lower Oil Production
At least the Saudi King is being honest at last - it's not like it isn't obvious stuff - without oil the Saudis literally die, so it's not like we on TOD didn't expect this.
Drip, drip, drip! When, if ever, will MSM get the message?
The King appears to be saying that he doesn't buy into significant reserve growth for his country, that future high prices won't have the effect of creating additional reserves. In other words, he appears to be skeptical of the theory (unproven, of course) that the world economy and the future well-being of billions now rely upon. From a mainstream economist's perspective, the King is truly radical.
Related to this is that he seems to be suggesting Saudis won't be raising production. Ever.
Very good observation, Pedestrian. I wonder if, as well, his most excellent majesty hasn't recognized that the longstanding line that market forces are keeping several million bpd of production offline is beginning to look like the shallow lie that it is in the face of relentlessly increasing oil prices.
Shifting the narrative from exaggeration about reserves and distortions about adequately supplied markets and large inventories (essentially all new demand is coming from countries like China with no known inventories), to concerns about the well-being of future generations of Saudis, improves the credibility of the 'managed' production scenario. The king probably considers this to be a superior 'information' strategy in the face of arguments from regime opponents that the kingdom's primary resource is being frittered away.
It's all propaganda and not very good propaganda at that. Either the Saudis are willfully holding oil off the market to make a killing -- short term gain for long term disaster -- or they are just attempting to obfuscate the fact that they can't substantially increase production.
I hate reading these statements. They aren't even comforting lies. What the Saudis have failed to understand is that a good lie holds in it at least a part of the truth. This stuff here is just mumbo-jumbo -- with added mumbling for effect.
I thought that the King's statement about leaving the oil in the ground for the children was very smart. If Saudi oil production later this year is below 9 mbd then the King can simply say "we are saving some oil for our children".
Here is a chart from Zagar's ASPO 2005 presentation which shows some static fields in green which could be saved for the children.
Saudi Arabia Discoveries OIIP - click to enlarge
source
Saudi Arabia Can It Deliver?
Jack Zagar, MHA Petroleum Consultants
ASPO Conference - Lisbon, Portugal, May 19-20, 2005
http://www.cge.uevora.pt/aspo2005/abscom/ASPO2005_Zagar.ppt
The static green fields may be small in size and harder to develop than large fields but could be significant. The 65 static fields contain about 17% of OIIP of about 100 Gb. Assuming a conservative recovery factor of 30% this gives 30 Gb URR in total. The average URR per field would be just over 0.45 Gb.
Assuming that the King's statement is a warning that Saudi's oil production is now in slow decline, or at best on a 9 mbd C&C plateau, then I have no doubt that the world's crude oil and lease condensate production is now in irreversible decline as shown below.
click to enlarge
Please note that the chart above includes Alberta tar sands production but excludes biofuels, natural gas liquids and refinery processing gains.
For more info please see http://www.theoildrum.com/node/3623
and http://www.theoildrum.com/node/3665
One thing that's interesting when looking at the Saudi Discoveries plot is that of all the fields discovered since 1970 or so, they chose to develop the Hawtah fields -- and they have proved to be problematic. And they didn't stumble across them, either. They looked real hard, and then were very excited (and boastful) when they found them. Why develop those, and not the others (especially those which are larger)? The super light API oil? I don't think that they were inspired by JFK* and did it just "because it was hard". Rather, the others were less attractive for some reason. Go after the easy oil first, and wait for later technology improvements to make getting the harder oil out less costly.
*from his Moon Speech
I suppose the Hawtah fields, at the bottom left of the chart below, were the easiest to develop compared to the other discoveries made since about 1970. Many of the other discovered fields in the 1970s appear to be located in the upper left corner of the chart below. These fields might also contain heavier oil and lack infrastructure.
click to enlarge
excellent chart! thanks ace!
Given the attitude exhibited in the top article, even when inklings do occur to the MSM, their stake in BAU will, shall we say, color their interpretation. What begins as a bashing of ASPO shifts into some recognition of the problem: the liquids that can pass for “oil” cannot grow fast enough in a business-as-usual case. But I find this paragraph to be disgustingly arrogant (emphasis added):
Even if oil does peak and demand remains positive, the effects might not be all that bad. Alternatives would begin to come on strong, as market forces, while lagging, would nevertheless kick in with surprising speed. Sure, we might have to get used to “stagflation” again for awhile. And if energy prices go through the roof, and gasoline costs $12 a gallon, that will still be OK to those of us who can afford it. Plus, it will have the highly desirable side effect of keeping the Third World in their...well, let’s just say in third place. (After all, if everybody gets rich enough to buy a car, who will make my $80 tennis shoes for $1 in labor?)
Agreed WT, I follow this logic
But there is another logic which I cannot grasp and that is:
LOWER REFINING CAPASITY =>> MORE EXPENCIVE CRUDE (<< =>> OFTEN UNCHANGED PUMP-PRICE)
(less demand renders more revenue , in which chapter of a economy-book is this explained?)
When one or more refineries are having difficulties or other issues that make refining capacity GO DOWN (like a fire or heavy maintenance) … well then (according to MSM) the cost of the crude-barrel GOES UP!?!?
IF this perception is correct (and I think it is) then the world should reduce the numbers of refineries, if we find crude expensive and nothing happens at the pump …… no?
I've never understood the rationale either for oil prices going up following a refinery fire. If we carried the reasoning out to its logical conclusion, and if 100% of all refineries shut down worldwide, would oil prices then be several hundred dollars per barrel?
In any case, as I said previously, I think that refiners are in a situation similar to the airlines. They have to respectively weigh the rising cost of crude and jet fuel against the volume of refined product and tickets that their customers can and will buy--given rising prices for refined products and tickets.
As I said in September, IMO, this suggests declining refinery utilization in importing countries, ultimately leading to less efficient refineries shutting down. Yet another example of the conventional wisdom, i.e., we have too few refineries, being dead wrong.
My private conclusion to this effect is straight forward:
The bidders for the next barrel is sensing trouble (when they read about a refinery fire) ... b/c normally trouble spawns higher prices … and there you go : Higher price there is ! (could it be this simple ? )
Your utilisation argument is the essence of global peaking - economics (need to make profits) determines the timing of the global peak, not geology.
I think the reason the crude price goes up if there is a refinery fire is because the crude stored at that refinery for production is now not going to be used until the repairs are made.
The refinery's shortfall in production has to be made up by increased production somewhere else, so the somewhere else has to purchase extra crude on an urgent basis.
As expected by normal economic theory, when the demand suddenly increases the spot price goes up.
When the refinery is fixed there will be temporary overcapacity so the crude price will fall back - hence the daily ups and downs in price.
xeroid ,your arguments don’t convince me at all.
What demand increase are you talking about ?
If one refinery is out of operation there is LESS DEMAND UPSTREAM (that refinery simply cannot take oil for practical reasons) and probably their DOWNSTREAM op. is hampered as well (not necessary short term, emptying stocks may take a week or so ..)
World- wide there is one place less to deliver oil, so oil underway to this terminal has to find another place/ taker (nearby) ….. if you were the CEO at the next-door refinery , would you suddenly pay more for this unexpected and unplanned for oil ? Can you squeeze it in between all the regular stuff in scheduled oil-tankers coming your way?
OTOH I would expect an increase at the local pump (downstream), b/c there will be less gasoline available short term.
The Saudis say the market is well supplied.
But they still have Asian refiners on allocation! That is the Asian refiners have contracts for specific amounts of oil to be delivered, but the Saudis are delivering less than the specified amount - WHY?????
When the Saudis start increasing production enough to meet their contractual obligations, Then I will believe they might have more available?
If this is true, it's one hell of a story. Would you be willing to post your sources here?
Leanan linked the story a few days ago on DrumBeat.
http://economictimes.indiatimes.com/News/International_Business/Saudi_to...
Not SO Much Hope for Saudi Oil Production,
Alan
Fantastic! I think I'll write my own story about this one. Thanks for the link, Alan.
Best hope for more electrified rail instead ;)
Cheers
We are getting near the end of the period of denial. At what price of gasoline will the mainstream consensus become that we are near or past the world oil production peak?
I do not think the denial can withstand $5 per gallon gasoline.
I also wonder how fast rising demand in Asia will push up prices. So far rising demand has managed to push up prices quite rapidly. Will the rate of price rise accelerate or will demand destruction start to slow the ascent?
This is and excerpt from “Six Degrees” a recent publication on global warming by Mark Lynas
Page 286
States Of Denial
Energy realities are not the only reason why our response to global warming has hitherto been so halfhearted. Our evolutionary psychology preconditions us not to respond to threats that can be postponed until later.
We are good at mobilizing for immediate battles, less good at heading of challenges that still lie far in the future.
Hence the most appropriate term to describe individual and societal responses so far is probably denial..........................
Denial is complex, involving a variety of defensive responses from the familiar “climate change is a myth” to the more understandable (but ultimately no more useful) “but I need my car for my job”.
It is of course, no coincidence that the same people who are deeply wedded to high fossil-fuel use – oilmen for example, are the one most likely to deny the reality of climate change...........................
there is nothing more difficult as trying to get a person to understand something when their salery depends on not understanding...............
According to psychologists, denial is a way for people to resolve the dissonance caused by new information that may challenge deeply held views or cherished patterns of behaviour.
Motorists therefore, may not be willing to absorb information, that challenges their perceived need to use their cars............................
Given that resolving dissonance is difficult and that denying it is dishonest, many people choose another way out of the dilemma: displacement.
In short, they blame someone else...............................it may mean singling someone else whose behaviour is worse – the hybrid driver pointing to the Hummer driver for example.
For policy makers, displacement might mean blaming entire countries: The Byrd-Hagel resolution in the U.S. Senate refused to countenance any change to American lifestyles unless developing countries also cut back on their emissions....................
Climate change (and in Bandits opinion peak oil) is a “tragedy of the commons” problem, where behaviour that makes sense at an individual level ultimately proves disastrous to society when repeated by everyone.
The concept's originator Garrett Hardin, gives the example of cattle herders using shared pastures to illustrate the problem.
Each herder stands to gain individually by adding another cow to the common; he gets more beef and milk but if all herders act the same way, the result is overgrazing and the destruction of the shared resource.
Psychological denial is integral to the process, Hardin writes: “The individual benefits as an individual to deny the truth, even though society as a whole, of which he is a part, suffers”.........................
Perhaps the most pervasive and enduring form of denial is what the Swiss researchers call “the faith in some form of managerial fix” in particular in the belief that the white knights of technology will come riding to the rescue.
Like other forms of denial, the faith in a “techno-fix” evades the need for any serious behavioural change..................................
In a wider sense, one could argue that the whole economic system of modern Western society is founded on denial........................
End book excerpt.
In my opinion the large amount of thread hogging on TOD is by many people still in denial or forever in denial.
They explain their dreams as going down “kicking and screaming” or “doing something” or “not, not doing anything”.
Until it is accepted that we will have to suffer and I mean really suffer, on a collective and especially an individual level, we will continue to read on TOD how we can continue our lifestyle if only we electrify everything and change to new forms of energy and power generation.
Richard Heinberg got it right, we have to power down. We have to power down now, nothing else will suffice.
That would mean suffering though.
What practical use is there in concentrating on accepting suffering in advance ?
I do not deny it (see my TOD article on 2034) but I do not fear it or concentrate on it.
http://www.theoildrum.com/node/3140#comments
Been there, Done that in New Orleans,
Alan
I'll tell ya what big guy, of all the folks who post here, you are by far the most delusional. Yeah, we're all gonna rally and build in all the railworks required to keep bau up, running, and sweet. Right. Get off your pillow. We are no more going to rescue Amurika with railway than we are putting out a forest fire by spittin' on it.
Do you realize that your dreaming is NOT going to happen, or do you just like to read your own posts. Oh sure, let's all just vote for rail, that'll make all our troubles go away.
I get the impression you are a very energetic and sharp person. You've a brain. Short supply 'round here. Use it for something other than masturbation.
Jeff
I am not at liberty to discuss all that I am doing, but it is more than "masturbation".
Contacts developed through TOD have been a crucial element.
When I started I gave myself a 1% or 2% chance of having a significant impact that resulted in on the ground change. Today, it is in the 10% to 12% range.
Best Hopes for Long Shots,
Alan
Alan's reply is more than sufficient & he doesn't need me to chime in. However...
Alan seemingly has a wonderful combination of both being bright and in good control of his delusions. I don't mean that disparagingly - I don't think any human is delusion-free. (I try to keep a reasonable index of my own for the purpose of applying fudge factors.)
He has chosen to hope. That's not delusional, it's a rational choice. His chances of making a positive difference are not zero; there are large degrees of freedom left in the system to say the least.
And in his response he mentions "long shots"... which increases my respect for him even more. In my experience, which has been interesting and varied, those who are willing to "bet it all" on a longshot chance of making a difference are, in fact, those who have a real chance of doing so.
To the extent people note my posts at all, they wouldn't think of them as hopeful; since my hope is reserved for different things (mostly the non-human aspects of the earth's future). But it picks me up to read Alan's postings, even if I suspect his chances are a longshot... which would have been my word. That he cheerfully labels them longshots himself is inspiring.
Alan may well be subjectively delusional about some stuff or may not be (I think the jury's still out on rebuilding below sea level in NOLA), but his lucid presence here helps keep the flavor of TOD balanced, with a high standard of smarts and civility.
Best hopes for more smart activists and long shots, 'cause we're sure gonna need 'em.
There are two kinds of denialists -- both equally dangerous.
Type one -- ignores the presence of crisis.
Type two -- assumes crisis is inevitable and there is nothing that can be done to mitigate the crisis.
Bandits has a raging case of type two.
I don't think very many people here are saying that we won't have to incorporate efficiency gains in any attempt to deal with the Peak Oil crisis. Using less energy will certainly be a part of the mitigation. Electrification will also help. Alternatives will also help.
Since Peak Oil is likely happening now, I don't think anyone here who is aware of that fact thinks there will be no pain or transition. But there are those here who think that certain actions on the part of governments, communities, businesses, and individuals can help control the damage. Hopefully, we can control the damage enough to keep this ship we call civilization afloat or, at the very least, get as many people as possible to the lifeboats.
So, for my part, I think you're wasting that fantastic foresight of yours. For the love of your fellow man, get off your butt and start thinking how you can help mitigate the problem in your own way!
I volunteer Bandits to walk to work, eat vegetarian, grow his own food, and power down his house. Do I hear any ayes?
Cheers
Rob
Rob,
I'm okay fine with people who want to grow their own food, eat vegetarian, etc. But I work with and direct people doing engineering work. My own response is to want to develop solutions. Not ultimate solutions that make the post-peak adjustment painless. I do not expect such solutions to come in time.
But I certainly think we can develop tech that will make the adjustments less painful than they'd otherwise be and also to start laying the ground work for an eventual turning of the corner when thing start to get better.
Ahh Rob, you forgot type three. Type three are those who deny their impotence to save the world as we know it. They believe that if they just keep making suggestions as to "what we must do" then eventually everyone will get the message, put their efforts into this project, then we could simply mitigate the decline of fossil fuels with only a slight amount of suffering, or at least avoid any massive dieoff in the fifty years.
Actions that governments, communities, businesses, and individuals could do and what they will do are two entirely different things. What we will do to mitigate the disaster is exactly what we are doing right now, absolutely nothing. People wi