<GCC: House Committee OKs New Refinery LegislationThe Oil DrumTwo short items to note>

88 comments on And it begins...the government says (more deeply this time, and with feeling): 'CONSERVE!'

Comments can no longer be added to this story.

bates014 on October 3, 2005 - 8:33am Permalink | Subthread | Comments top
DavidH wonders if "hurricanes" and other real-life impediments "could actually prevent "us" from extracting a decently significant part of the deep water oil in GOMEX?"

I think he's on to something.  If the intensity of hurricanes are indeed increasing because of global warming and if most of the current GOMEX infrastructure was built for hurricanes of much less strength than Katrina or Rita, I doubt that deep water drilling in the Gulf would be possible, both in real terms and in economic terms.

So, we not only lost New Orleans but we lost the upper bands of deep water oil that are found on all of those Hubbert curve graphs.  I don't really know how much of that curve is GOMEX oil but aren't other deep water expeditions also having trouble because of oceanic activity that could be related to global warming - typhoons and such in the southeastern Pacific?

0
Comments can no longer be added to this story.
louGrinzo on October 3, 2005 - 10:01am Permalink | Subthread | Parent | Comments top
This is a serious issue, obviously, but I don't think that oil or NG reserve on the GOM will ever be permanently locked in.  If oil goes to $200US/barrel, for example, that would make it economically feasible to extract oil under some very difficult (and expensive) conditions.

The issue is when oil gets so expensive, and we have enough alternative technology and infrastructure in place, that we simply stop using oil for most purposes.

0
Comments can no longer be added to this story.
LJR on October 3, 2005 - 10:43am Permalink | Subthread | Parent | Comments top
When we "stop using oil for most purposes" - and I suspect that's well north of $200 - I suspect it will be too expensive (energy intense) to build the "alternative technology" intended to replace it.  The problem with an inelastic energy source like petroleum is that the price can also fall rapidly when the economy tanks (no pun intended).  Unfortunately the economy is geared to short term gains.  This strongly works against investment in alternatives.  Witness the 70's.

We are looking at a nightmare of a train wreck and we want to believe it's not really happening - emotionally speaking - no matter what our thinking parts may tell us.  Therefore, as soon as the coming killer recession causes oil to temporarily drop below $35 a barrel, pundits will rush in and start crowing "I told you so,", the Greenspan proxy will cut interest rates, the economy will come out of a nose dive, the situation will improve (comparatively though not absolutely) and Americans will breathe a big sigh of relief.  Oil will inevitably start rising again and we will repeat the sequence, each time economically peaking at a lower level.

European humankind faced an energy crisis in the 16th century - it was deforestation that time.  I don't know what the "peak wood" curve looks like but I do know that people could view their diminishing forests and see the problem.  That's a really different situation than trying to see oil 12 thousand feet down.  A normal person could make an assessment.

And coal entered stage left.  Like oil, the first coal seams were easy to mine.  They didn't require much in the way of capital investment.

What I'm saying, in a long-winded way, is that what we face now is unique and cannot be compared to what seem to be similar historical moments.  Mostly because of inelasticity, and sheer size of the problem.  16th century Europe was not an integrated economy in today's sense.

At some point quite soon now I think the sensible thing to do is simple acknowledge that we're screwed double time.  Number nerdism, scientific thinking and long contemplative chin pulls aren't going to save the day.  What's coming is far too turbulent to predict further than to say most of us aren't going to like it one bit.  I strongly doubt that many  fortunes will be made in biofuel.  Some, no doubt, but not like the fortunes made in petroleum.

Rejoice in the day, insomuch as possible.  We have been privileged to live in a unique period of human history that probably won't be repeated.  We have lived like gods we an entourage of 50 or more mechanical slaves to do our wished with no complaints.

All things come to an end.  Look around in wonder.

No, I'm not religious.

0
Comments can no longer be added to this story.
wkwillis on October 3, 2005 - 2:00pm Permalink | Subthread | Parent | Comments top
Methanol production gets cheaper every year.
0
Comments can no longer be added to this story.
bhyde on October 3, 2005 - 7:35pm Permalink | Subthread | Parent | Comments top
"peak wood"  -- I love it!
0
Comments can no longer be added to this story.
Glenn on October 3, 2005 - 9:21pm Permalink | Subthread | Parent | Comments top
Keep it clean everyone :)
0
Comments can no longer be added to this story.
gunnk on October 3, 2005 - 8:03pm Permalink | Subthread | Parent | Comments top
"Peak wood" was faced even more dramatically in medieval Japan:  it just about destroyed the civilization.  A strong goverment program designed to restrict unnecessary consumption along with programs to replace what was already lost saved Japan from starvation.

I would suggest Collapse by Jared Diamond (author of Guns, Germs and Steel) if you want a good view of a society that looked into the abyss of resource depletion and took the steps necessary to save themselves.  He covers the near miss of medieval Japan in great detail.

0
Comments can no longer be added to this story.
mw on October 3, 2005 - 3:16pm Permalink | Subthread | Parent | Comments top
If oil goes to $200US/barrel, for example, that would make it economically feasible to extract oil under some very difficult (and expensive) conditions.

The big question, the unanswerable question, is does this happen long before we are ready for it, or not...

Meanwhile, the latest MMS report shows a slight improvement - Friday's numbers were 97.85% oil / 79.41% NG for comparison.

Today's shut-in oil production is 1,391,926 BOPD.  This shut-in oil production is equivalent to 92.80% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.

Today's shut-in gas production is 7.495 BCFPD.  This shut-in gas production is equivalent to 74.95% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.

The cumulative shut-in oil production for the period 8/26/05-10/3/05 is 45,119,329 bbls, which is equivalent to 8.241 % of the yearly production of oil in the GOM (approximately 547.5 million barrels).

The cumulative shut-in gas production 8/26/05-10/3/05 is 219.567 BCF, which is equivalent to 6.016 % of the yearly production of gas in the GOM (approximately 3.65 TCF).

Do you think anyone planned for seeing what ultimately will be 10 - 15% of GOM oil output curtailed this year, it not more?

0
Comments can no longer be added to this story.
Everett on October 3, 2005 - 5:39pm Permalink | Subthread | Parent | Comments top
I think that if the cumulative shut-in for GOM NG gets up over 15% (650 BCF) this Winter, then the North American NG stockpile would soon reach its baseline.  
0
Comments can no longer be added to this story.