Drumbeat: July 29, 2010
Posted by Leanan on July 29, 2010 - 10:10am
In spite of what you might have heard, the planet may never run out of oil.
Fat lot of good that'll do when it takes a barrel's worth of energy to get a barrel of oil out of the ground.
And we've long since used all of the easy-to-extract oil, says Nate Hagens, speaking Tuesday night at Kansas Wesleyan University on how communities can learn to adapt to declining resources, energy included.
Hagens is a former vice president for both Lehman Bros. and Salomon Bros. investment firms but quit that career several years ago and last week completed his Ph.D. in natural resources studies at the University of Vermont.
Until recently, he was also editor of theoildrum.com, a website dealing with global energy supply.
Hagen pulls from those areas, and others, such as evolutionary biology, to explain why America and other developed nations are addicted to both energy and debt, and how those addictions work against our long-term good.
Let’s start with a few basics. Information is the third element of the triad of fundamental principles that flow through whole systems of every kind, and thus need to be understood to build viable appropriate tech systems. We have at least one huge advantage in understanding information that people a century ago didn’t have: a science of information flow in whole systems, variously called cybernetics and systems theory, that was one of the great intellectual adventures of the twentieth century and deserves much more attention than most people give it these days.
Unfortunately we also have at least one huge disadvantage in understanding information that people a century ago didn’t have, either. The practical achievements of cybernetics, especially but not only in the field of computer science, have given rise to attitudes toward information in popular culture that impose bizarre distortions on the way most people nowadays approach the subject. You can see these attitudes in an extreme form in the notion, common in some avant-garde circles, that since the amount of information available to industrial civilization is supposedly increasing at an exponential rate, and exponential curves approach infinity asymptotically in a finite time, then at some point not too far in the future, industrial humanity will know everything and achieve something like omnipotence.
In any case, the underlying premise of the book is irrefutable:
At some point in time, humanity’s ever-increasing resource consumption will meet the very real limits of a planet with finite natural resources. We the co-authors of The Post Carbon Reader believe that this time has come.
With the Macondo well corked for now and perhaps days away from a permanent seal, the momentum for offshore work may be returning.
Companies are starting to adapt to the new shallow-water rules, with Houston's Apache obtaining a new drilling permit this month.
And four oil majors have banded together to create an oil spill response company that aims to address the industry shortcomings that were brought to light by the Macondo spill.
"Painfully, we learned how significantly the actions of one company could influence a huge swath of the Gulf Coast economy," said Dan Pickering, head of research at the energy investment firm Tudor Pickering Holt & Co.
Anger over the spill hasn't translated into legislative gains for fossil fuel foes.
The BP spill in the Gulf of Mexico is bound to have repercussions for the oil industry and America's energy future, but experts say it could be a while before they are all sorted out — and the final consequences could prove surprising.
The Deepwater Horizon disaster serves as a tragic reminder of oil’s shortcomings.
In particular, it shows how the industry is trying to operate in very tricky conditions when it comes to deep water drilling. As oil executives say, at such depths, the seabed is as remote as the moon. And it has the added threat of much higher pressures.
Yet for all the hazards, production won’t move back towards shore anytime soon.
Shell today refused to rule out pursuing damages claims against BP and other companies involved in the Gulf of Mexico disaster.
The company took a $56m (£36m) hit after it was forced to stand down seven rigs and platforms because of the moratorium on drilling in the US imposed in the wake of the disaster.
The embattled oil giant's first American CEO embraces a high-risk survival plan.
DESTIN, Fla. (CNNMoney.com) -- Business owners in Florida believe Kenneth Feinberg will manage the $20 billion oil spill claims fund fairly and efficiently, but because of the complicated nature of their claims, they're anxious about how much they'll get paid.
On the 100th day since the oil started spewing, Feinberg spoke to a jam packed crowd of business owners and industry leaders in Destin, Fla.
Mexico's state-owned Pemex has this year drilled the fewest wells in search of new crude and natural gas reservoirs since 2001, raising doubts over its drive to sustain production as major fields age.
Crude reserves in Nigeria have dropped by 4.79% to 31.81 billion barrels over the past year because companies refuse to undertake exploration, a senior industry official said.
Michigan Gov. Jennifer Granholm says the cleanup so far has been "wholly inadequate" and warns of a tragedy if the oil reaches Lake Michigan — and local residents are also expressing concern.
Four Greenpeace activists have been charged after protesters occupied the downtown Vancouver office of Enbridge and demanded the company halt plans to build a pipeline from Alberta to B.C.
CALGARY, Alberta (Reuters) - Two of Canada's biggest oil sands companies posted higher profits on Thursday on strengthening oil prices, as controversy builds over the environmental costs of tapping North America's biggest crude reserves.
A gasoline shortage at some Shell stations has spread from Alberta to southeastern B.C.
Shell said it doesn't know how many service stations have run dry, nor how long it will take to get fuel to them.
(Reuters) - Mexico's state oil monopoly Pemex posted a quarterly loss on Wednesday, hit by foreign exchange losses on its U.S. dollar-denominated debt and domestic price controls for fuel sales.
The cost of shipping consumer goods from Asia to Canada is surging, with another price increase kicking in Sunday, as freight forwarders face a shortage of containers this summer and fall.
“This is traditionally the peak season for imports coming from China to Canada,” said Perry Lo, president of Canaan Transport Group Inc., a freight forwarding firm based in Mississauga, Ont. “And now we face a huge price hike.”
CALGARY, Alberta (Reuters) - Pipeline and power company TransCanada Corp reported a 9.2 percent drop in quarterly profit on Thursday, hit by hedging losses as well as lower power prices and higher costs at its partly owned Ontario nuclear plants.
In Sunday's bombastic speech, Chavez told his countrymen war was imminent — and that it was the Yankee empire orchestrating the coming bloodbath. If an attack came, Chavez said, he would shut off the oil spigot to the United States — even if that meant Venezuelans would be forced to eat rocks.
This has been a regular threat over the years, and it plays well to Chavez's most radical followers.
But Chavez's latest diatribe comes at a particularly delicate time. Last week, in a special emergency session of the Organization of American States, the Colombian ambassador to that body, Luis Alfonso Hoyos, detailed how Venezuela allegedly aided and abetted Marxist rebels who have been fighting Colombia since the 1960s.
BANGLADESH that has been facing severe energy crunch, continues still to be indecisive about the use of one of the cheapest energy source, coal. Despite having a substantial reserve of the mineral, successive governments have failed to finalise a coal policy determining the methods of its extraction. The draft coal policy has been revised again and again in the light of recommendations of the experts but the final policy resolving the contentious issues involving the method/s of mining is yet to emerge.
The dispute over methods of mining in a country where coal mines are located in heavily populated areas is nothing surprising. The old method of coal mining, making tunnels underground, does not cause any major displacement of population or destroy forests and other infrastructures. But very marginal exploitation of coal reserves, estimated at 20 per cent of the entire reserve, is considered to be uneconomic. The other method, the open-pit mining ensures the full exploitation of the reserve. But it entails an enormous sacrifice in terms of loss of land and property and damage to environment, flora and fauna.
"I am pro wind and pro solar but I don't think this kind of thing belongs in a dense urban setting. I don't," said neighbor Lucile Taber. "If it were to fall it would fall directly to the home over there, another concern is the noise, there is flicker problems with it."
Hawaiian Electric Co. is proposing a plan to make it cheaper for early adopters of electric vehicles to charge up.
A major supplier of palm oil and pulp (paper) to multinationals, including food giant Cargill, has been caught clearing orang-utan habitats and carbon-rich peatlands.
Smoother airplane landings are not only easier on passengers but also on the environment as they reduce greenhouse gas emissions, according to new test results by Alaska Airlines.
Our online networks build on what sociologist Mark Granovetter called "the strength of weak ties." Older forms of community built on distinct local networks where people knew each other face-to-face, but where reaching out beyond those they saw day-to-day was harder. Our new tools make it easy to maintain far looser networks that we can continue to easily nurture. As Gideon Rosenblatt of the environmental group Groundwire points out, "these networks of weak ties can be put into action on a moment's notice, enabling online social change efforts to go viral at a speed and on a scale never previously possible." We take for granted our ability to link overlapping circles of friends and acquaintances in a manner until recently inconceivable.
China’s imports of Iranian crude oil fell by almost a third in the first half of the year, new figures showed this week.
Volumes have decreased just as new US and European sanctions threaten to disrupt energy ties between the two countries, experts say.
Iran shipped just over 9 million barrels of oil to China to the end of last month, making it China’s third-largest crude supplier, according to fresh Chinese customs data. That was down from 13.1 million barrels in the first half of last year, even as Chinese imports from Angola, Saudi Arabia and other major exporters rose significantly.
Crude oil dropped for a third day in New York on speculation the economic recovery is not proceeding fast enough to rein in excessive fuel supplies.
The Organization of Petroleum Exporting Countries’ oil output increased for the third time in four months in July, led by gains in Iraq, a Bloomberg News survey showed. Futures yesterday declined to a one-week low after U.S. crude imports jumped to the highest level in almost four years, leading to an unexpected increase in commercially held inventories.
LONDON (Reuters) - OPEC is meeting only half its promised cuts in oil supply this month thanks to a big jump in exports from Nigeria and despite a smaller decline in production in Angola, a Reuters survey showed on Thursday.
Supply from the 11 members of the Organization of the Petroleum Exporting Countries with output targets, all except Iraq, has averaged 26.95 million barrels per day (bpd) this month, up from 26.75 million bpd in June, according to the survey of oil firms, OPEC officials and analysts.
(Reuters) - Prices of Malaysian Tapis crude climbed on Thursday reflecting market-wide support for distillate-rich grades in Asia-Pacific.
NEW YORK — Exxon Mobil Corp. said Thursday its second quarter income nearly doubled to $7.56 billion as oil prices increased from last year.
It's Exxon's highest quarterly profit since the $7.82 billion earned in the last three months of 2008. But it's still well below the record-setting third-quarter profit of that year, when Exxon earned $14.83 billion after oil prices spiked to near $150 per barrel in the summer.
Royal Dutch Shell posted soaring profits on Thursday and defended deep-water oil production, saying it has an "important role" to play despite the US Gulf of Mexico disaster that rocked rival BP.
The Anglo-Dutch oil giant reported a 15-percent jump in net profit to 4.39 billion US dollars (3.38 billion euros) in the second quarter, as it slashed costs and raised output.
Its performance contrasts markedly with that of embattled BP, which on Tuesday posted a second-quarter loss of 16.9 billion US dollars in the wake of the devastating Gulf of Mexico oil spill.
Persian Gulf petrochemical producers are turning to naphtha as a feedstock for the first time amid growing power-plant demand for natural gas.
Abu Dhabi plans to build the Middle East’s first plant that will only use naphtha to make plastics. Saudi Arabia may develop similar units as part of two refinery ventures, according to state-run Saudi Aramco, France’s Total SA and Sumitomo Chemical Co. of Japan, the partners in the projects.
While naphtha, a product of refining crude oil, is used to make petrochemicals around the world, countries in the Middle East have traditionally preferred cheaper home-produced natural gas. Now, new power plants are competing for those gas supplies, stoking demand for alternatives. That’s being exacerbated as the United Arab Emirates and Saudi Arabia expand petrochemicals production to cut dependence on crude exports.
An investigation has been launched into the unexplained damage suffered by a Japanese oil tanker in the Strait of Hormuz near Oman.
The M Star was damaged on Wednesday while travelling from Qatar to Japan.
Port officials in Fujairah in the United Arab Emirates say the ship was involved in a collision. However, the boat's owners Mitsui OSK believe their vessel may have been attacked.
Early reports that the ship was struck by a freak wave have been dismissed.
BEIJING (Reuters) – A natural gas well operated by Shaanxi Yanchang Petroleum Group has been burning for nearly a week since drilling in the well caused gas to leak out and explode, Xinhua reported on Thursday.
No casualties have been reported. Villagers near the well were evacuated shortly after the accident, Xinhua cited a local county official as saying.
NEW ORLEANS – Oil, natural gas and water are still spewing from an abandoned well hit by a barge on a Louisiana waterway near the Gulf of Mexico.
Coast Guard Capt. John Arenstam says a wild well company is working on a plan to shut down the well, which is north of Barataria Bay and has been leaking since early Tuesday.
HOUSTON/MIAMI (Reuters) – BP may permanently shut the well that caused the worst off-shore oil spill in U.S. history as early as Monday, the company said as speculation grew over assets it might sell to cover mounting costs.
Incoming BP chief executive, Bob Dudley, said on Wednesday the company would stay involved with the cleanup process in the Gulf of Mexico long after the leaking well was plugged and expressed optimism the damaged environment would recover.
"It is possible that as early as Monday or Tuesday this well might be killed," Dudley said on National Public Radio.
Robert Dudley, the man charged with rebuilding the reputation of BP Plc after the disastrous oil spill in the Gulf of Mexico, will slim the company to its core strength: the high-risk, high-return search for oil and gas in demanding environments.
That suggests Dudley, who becomes the first American chief executive officer of the British oil giant on Oct. 1, will follow the same strategy that led to the Gulf spill and turned outgoing CEO Tony Hayward into a pariah, Bloomberg Businessweek reports in its Aug. 2 issue.
HONG KONG/LONDON (Reuters) – BP has tapped HSBC to sell its stake in the Nam Con Son gas project in Vietnam, as it scrambles to hive off $30 billion of assets to pay for the clean-up of the worst oil spill in U.S. history, three sources said.
The British oil giant, which is on a campaign to sell a host of assets from Pakistan to Egypt, said last week it is seeking a buyer for its stake in the Nam Con Son gas project offshore southern Ho Chi Minh City, worth $966 million by one estimate.
BP Plc has told Venezuela’s state oil company it’s interested in selling stakes in three projects to its Russian venture, TNK-BP Holding, Petroleos de Venezuela SA Vice President Eulogio del Pino said.
BP Plc objected to proposed legislation that would bar the oil company from operating new drilling leases in U.S. waters, saying it could trigger job losses and threaten the nation’s energy security.
A provision of the House bill may have a “drastic impact,” David Nagel, executive vice president of BP America, said in a July 28 letter to Democratic Speaker Nancy Pelosi of California and Republican Minority Leader John Boehner of Ohio.
WASHINGTON (AFP) – The first lawsuits linked to the Gulf of Mexico oil spill go to court Thursday, as BP prepared -- after months of trying -- to permanently seal its ruptured well.
As the Gulf of Mexico disaster this week reached the 100-day mark with hopes high that the endgame may be under way, families of those killed in the rig explosion that sparked the disaster, and fishermen who lost their livelihoods because of it, were to face BP in court for the first time.
A BP Plc lawyer said evidence would show that an April explosion and oil spill in the Gulf of Mexico were the result of gross negligence, Texas officials said in a letter that didn’t say who committed the alleged negligence.
Governor Rick Perry and Attorney General Greg Abbott said in the July 22 letter that BP didn’t attempt to take advantage of a cap on damages under the Oil Pollution Act because gross negligence would make that irrelevant. The letter was addressed to Doug Suttles, chief operating officer for exploration and production, and Jack Lynch, a general counsel.
The answer is boringly simple–BP capped the well, oil stopped flowing into the Gulf, beaches and fisheries reopened, the TV cameras moved on to the next sensation and the doom mongers that didn’t have the sense to pack up and leave too were left looking a little silly. Indeed, Matt Simmons retired as Chairman Emeritus of Simmons & Co.
Just as new shoots of grass are sprouting on once-oiled marshes, the facts are beginning to thrive now that the flood of hype has receded.
MIAMI (Reuters) – It could be years before some Gulf of Mexico beaches recover fully from BP Plc's massive oil spill and are declared free of toxic pollutants, including heavy metals, that can make people sick, a leading environmental advocacy group said on Wednesday.
MAMOU, La. – Water gurgling from a well is flooding Craig Gautreaux's rice and crawfish fields, turning the farm into a wetland for migratory birds whose usual Gulf of Mexico wintering grounds are threatened by the oil spill.
Across eight states, farmers such as Gautreaux are inundating fallow fields to provide an alternative for some of the tens of millions of ducks, geese and shorebirds that are beginning to make their way south on a flyway that stretches as far north as Alaska and Iceland.
What a difference an oil spill makes. Californians, whose dislike of offshore drilling dates back to the Santa Barbara spill of 1969, had begun to see virtue in new sources of oil as gasoline prices soared in 2008, polls showed.
That year, for the first time since 2000, when the first poll of the state’s environmental attitudes was taken by the Public Policy Institute of California, a majority — albeit a bare one, 51 percent — was willing to allow more drilling off the California coast. The majority was about the same in 2009, and opposition dwindled to 43 percent.
The latest poll, however, shows the opposition snapping back after the offshore oil disaster in the Gulf of Mexico. In the institute’s survey this month of 2,502 Californians, 57 percent opposed new offshore drilling; the proportion supporting drilling dropped to 36 percent, down 15 percentage points from 2009 levels.
(Reuters) - Norway's decades-old political consensus on offshore drilling is under attack in the wake of the BP oil spill, just as it covets new riches in the Arctic.
The powerful oil industry says it needs to tap resources off the Arctic archipelagoes of Lofoten and Vesteraalen and in a huge, recently demarcated Barents Sea border region with Russia to continue Norway's oil boom amid dwindling North Sea output.
But, emboldened by the Gulf of Mexico well blowout, Norwegian environmentalists seek to grab the upper hand in a battle they feel they have long been loosing.
WASHINGTON (Reuters) – Republicans and some moderate Democrats in the Senate on Wednesday began picking apart a new energy bill that they complained goes too far in holding oil companies responsible for accidents like the massive Gulf of Mexico spill.
"I think people who are very serious about responding to the spill in the Gulf should be offended by what has been presented" this week by Senate Democratic Leader Harry Reid, said Republican Senator Lisa Murkowski.
The "local" movement — buying and eating food produced locally rather than shipped from thousands of miles away — has been gaining steam with the steady growth of farmers markets and a phenomenon called community-supported agriculture. CSA members purchase shares of a farmer's crop for the season. The government doesn't track the numbers, but Local Harvest, a nationwide directory of small farms, farmers markets and other local food sources, estimates that tens of thousands of American families belong to CSAs, and supply trails demand. The number registered with Local Harvest alone indicates how quickly CSAs have multiplied over the past decade: The directory's listing has increased from 374 farms in 2000 to 3,660 today.
CHANDRA (IRIN) - As swollen monsoon rivers and rising sea levels threaten to engulf more land across Bangladesh, NGOs are training thousands of farmers in traditional soil-less farming on water.
Tina Clark, one of 21 trainers for Transition United States, spoke on July 7 about the Transition model, which is used around the world to help communities prepare for the social and economic changes that will occur as global oil supplies and other natural resources decline in the next century.
Clark told the group of 31 who attended the meeting about how each of us in our own way can help our communities prepare for a world without many of the luxuries that cheaply produced oil makes possible and at the same time replace them with meaningful alternatives.
With a cap on carbon dioxide an apparent nonstarter in the Senate these days, some clean energy and climate advocates have shifted their sights to a scaled-back but still ambitious goal: passage of a national renewable electricity standard.
Such a law would require utility companies to produce a set amount of electricity from renewable sources by a certain date, spurring the development of clean sources like wind and solar and probably lowering overall emissions nationally. Perhaps most important, some argue that with a strong push by the president, such a measure could actually clear the high bar for passage of 60 votes in the Senate this fall.
A new research report from GigaOm asks an intriguing question.
Why is the smart grid resisting open source?
Canadian researchers hope to stem the global IT industry's rampant output of greenhouse gas emissions by perfecting a way to host the Internet's content purely on green power.
And if their experiment succeeds, Canada could essentially become the world's largest Internet server — powered with almost no carbon footprint — and help reduce one of the most significant, growing sources of pollution.
Caltex Australia Ltd., the nation’s biggest oil refiner, called for increased government funding to spur biofuels development as part of an effort to curb greenhouse-gas emissions and bolster energy security.
Australia has “inadequate funding” for biofuels, with the government devoting just $15 million to the technology, Julian Segal, chief executive officer of Caltex, said in a speech in Sydney today. The U.S. Department of Energy by contrast is investing more than $1 billion to advance the field, he said.
BEIJING — China, the world’s most prodigious emitter of greenhouse gas, continues to suffer the downsides of unbridled economic growth despite a raft of new environmental initiatives.
The quality of air in Chinese cities is increasingly tainted by coal-burning power plants, grit from construction sites and exhaust from millions of new cars squeezing onto crowded roads, according to a government study issued this week. Other newly released figures show a jump in industrial accidents and an epidemic of pollution in waterways.
The 2009 State of the Climate report released today draws on data for 10 key climate indicators that all point to the same finding: the scientific evidence that our world is warming is unmistakable. More than 300 scientists from 160 research groups in 48 countries contributed to the report, which confirms that the past decade was the warmest on record and that the Earth has been growing warmer over the last 50 years.
Seven families who tend the Watkins Pond Community Garden in Rockville gathered Sunday for a picnic and double celebration: to mark their second summer harvest and to thank Carl Henn, the local environmental activist credited with creating their beloved garden.Carl Henn was a long time member of The Oil Drum, and the author of this guest post.