Drumbeat: September 9, 2011
Posted by Leanan on September 9, 2011 - 10:16am
In his book Hubbert’s Peak, Ken Deffeyes described resource estimates prepared by the US Geological Survey with a strong sense of skepticism: “When USGS workers tried to estimate resources, they acted, well, like bureaucrats,” said Kenneth Deffeyes, professor of geology at Princeton University. “Whenever a judgment call was made about choosing a statistical method, the USGS almost invariably tended to pick the one that gave the higher estimate.”
Rutledge calls this tendency to overestimate reserves the “Deffeyes’ Law of Bureaucratic Resource Estimates.”
Washington DC – Experts on energy and the economy will gather on Capitol Hill, November 2-5, to confront the global challenge of resource depletion, Peak Oil, and the end of cheap energy—with a focus on economic implications and strategies to navigate an uncertain and rapidly changing future.
Peak Oil, Energy & the Economy, the 2011 conference of the Association for the Study of Peak Oil & Gas USA (ASPO-USA), will feature cutting edge research and analysis by leading experts from North America and Europe. Under the theme of “Truth in Energy”, the event will take a hard look at America's energy and economic challenges, and the actions required to tackle them.
NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States fell by three this week to 892, the third straight weekly decline, data from oil services firm Baker Hughes showed on Friday.
Horizontal rigs -- the type most often used to extract oil or gas from shale -- fell two to 1,134 after hitting a record high of 1,140 two week's ago. Horizontal drilling rigs comprise part of the overall gas rig count.
(Bloomberg) -- Tropical Storm Nate is forecast to veer westward into Mexico, away from U.S. energy platforms and rigs in the Gulf, as Maria bears down on the Lesser Antilles and Hurricane Katia drifts toward the northern Atlantic.
(Reuters) - Oil and natural gas producers in U.S.-regulated areas of the Gulf of Mexico continued restoring operations after Tropical Storm Lee Friday after some pulled non-essential staff due to Tropical Storm Nate.
Risks to U.S. offshore oilfields from Nate, unpredictable Thursday, appeared to diminish Friday as the U.S. National Hurricane Center said the strengthening storm would turn west toward Mexico.
MEXICO CITY (Reuters) - Mexico's government proposed on Thursday a 2012 budget for state oil monopoly Pemex below what the company was hoping for to boost lagging production.
MEXICO CITY – Mexican state oil monopoly Petroleos Mexicanos said Thursday it will leave unchanged its 2011 crude output target of 2.6 million barrels per day at year’s end.
Pemex said its oil production in August rose 22,000 bpd compared to the previous month to an average of 2.55 million bpd.
Saudi Arabia, home to more proven oil reserves than any other nation, has an energy problem. HSBC estimates that this year the kingdom will burn 1.2 million barrels of oil a day to generate electricity, double the amount burned in 2010. With the amount of crude oil burned domestically climbing sharply, it is leaving less and less oil for exports.
The solution for the desert kingdom? Use natural gas, both conventional and unconventional, to meet domestic energy needs.
Hundreds of protesters took to the streets in Iraq’s capital and other cities on Friday, demanding that the government steps up reforms and provides more electricity and jobs.
Inspired by the Arab Spring, Iraqis have been demonstrating on Fridays for months but protests had petered out in recent weeks.
The rallies came days after a prominent anti-American Shia cleric, Moqtada al-Sadr, called on the government to create 50,000 jobs, give Iraqis a share of the nation’s oil wealth and make more reforms or face protests.
Canadian natural gas producers on Sept. 8 announced new guiding principles for hydraulic fracturing that guide water management and improved water and fluids reporting practices for shale gas development in Canada. The principles were created by members of the Canadian Association of Petroleum Producers (CAPP) and apply to all CAPP natural gas producing members, large and small, operating in Canada.
An environmental group urged Canada on Sept. 9 to suspend oil exploration in the Arctic, warning that otherwise it risks an environmental disaster worse than the BP spill in the Gulf of Mexico. The PEW environmental group said in a report that it does not necessarily oppose developing the oil and gas reserves at the top of the world, but called on Canada to become "Arctic ready" and urged reforms of the way it regulates the industry.
API President and CEO Jack Gerard called the president's jobs plan a 'missed opportunity' and said the oil and natural gas industry could create more than a million new jobs for Americans and more revenue for our government with a few sensible changes in national energy policy.
"The president missed an opportunity to pick the low hanging fruit of job creation," said Gerard. "Allowing the responsible development of more of America's vast domestic oil and natural gas resources could generate more than one million new jobs in just seven years, with thousands of shovel-ready jobs that could be created almost immediately."
(Reuters) - The president of Russian oil producer Rosneft could soon be replaced, two industry sources said on Friday, little more than a week after the company's Arctic offshore development deal with ExxonMobil .
"(Deputy Prime Minister) Igor Ivanovich (Sechin) is dissatisfied with (Eduard) Khudainatov's actions," one of the sources said.
Russia and Ukraine are in tough talks to avoid what could be their third gas war in five years. Our correspondent reports on what is behind the tension.
Are these assessments correct -- has Hayward (pictured above in less-happy times), 17 months after the devastating BP oil spill in the Gulf of Mexico, demonstrated again that he has the right stuff? Mmmm ... no. What he has demonstrated anew is his taste for living on the edge, cutting corners and risk-the-company deals.
By the end of this year, a tower built as a home for Wachovia will be the new headquarters of Duke Energy.
That switcheroo in one downtown building highlights a change sweeping Charlotte in the wake of the 2008 financial crisis. While the tidy North Carolina city of 730,000 people still counts itself as the nation’s No. 2 financial center and is looking to expand in a number of areas including health, motor sports and defense, the area’s energy sector is showing particular promise for growth.
The government lifted its usage-reduction requirement for large-lot electricity users throughout the service areas of Tokyo Electric Power Co. and Tohoku Electric Power Co. at 8 p.m. Friday.
The order for large-lot users to reduce their electricity consumption by 15 percent from last summer's peak levels came into effect July 1. It was lifted in TEPCO's service area earlier than the initially scheduled Sept. 22.
WASHINGTON — A divided Nuclear Regulatory Commission has allowed the Obama administration to continue plans to close the controversial Yucca Mountain nuclear waste dump in Nevada.
Even if we are being proven right, this is no time for victory laps. Here’s the point. Daly, Gilding, Grantham, and I are saying that as humanity has chewed through the low-hanging fruit of our natural resources and has turned to lower-grade and more expensive ores and fuels, managers of the economy have attempted to keep growth going by piling up debt in the mistaken belief that it is money that makes the economy run rather than energy and raw materials. Now we’ve reached limits to government and consumer debt, and the realization of that fact is sending financial markets into fibrillation. If energy supplies and debt are both stretched tight, that means more economic growth isn’t possible. Worse, if policy makers fail to realize this and continue assuming that the current crisis is merely another turning of the business cycle, then we lose whatever opportunity still remains to avert a crash that could bring civilization to its knees.
His report recommended deferring the council's entire seal extension programme for 2011-12 and 2012-13, saving about $1.8 million, to help bridge the shortfall.
Cr Teresa Stevenson supported the idea, saying the council needed to "bite the bullet" and cut costs as it also faced peak oil and rising transportation costs.
"It's a luxury we can no longer afford. We have done a lot. I think we have done enough."
In early 2012, Post Carbon Institute is releasing its next book. It's an easy-to-read guide to getting your money out of the Wall Street casino and investing it locally, where it'll perform better for both you and your community. And we're thrilled to have PCI Fellow Michael Shuman (Going Local, The Small-Mart Revolution), one of the nation's top experts in local economies, as the author.
But we still need a title!
It may be that we’re pretentious superficial dorks. Or that the dilemmas we face as a civilization are complex and of a massive scale.
But there is also a simple answer. We can’t save the world right now because we’re too busy. Most people are so busy staying ahead of their bills, raising their kids or just trying to stay on top of things. They simply don’t have time to save the world. They probably wish the government had a Saving the World Department.
A decade removed from the horror of 9/11 and what’s changed in our attitude towards ecology, energy and economics?
We are still frighteningly dependent upon imported oil and there’s no comprehensive U.S. energy policy other than to consume with abandon every last molecule of carbon by blowing up mountains, fracking bedrock, fouling waterways, polluting oceans and warming the atmosphere.
A while ago I posted a film here about Tom Harper’s ‘The Oil Game’, a programme of teaching young people about peak oil that he has been doing in schools in the south east of England. Tom has now finished a workbook for people who want to run this programme elsewhere, containing the games and activities that he developed.
(CNN) -- As the Horn of Africa suffers its worst drought for 60 years, there are reports of growing conflict between people and wildlife over the region's limited resources.
Conservationists say that in Kenya livestock herders and their animals are encroaching on water sources in protected areas, which is having a potentially devastating impact on the wildlife there -- particularly elephants.
With the region getting hotter and dryer the battle for water is going to become even more of a problem in the future, says Angela Sheldrick, director of the David Sheldrick Wildlife Trust (DSWT), an organization that protects animals in Kenya.
Since the bottom dropped out of the economy in 2008, my family has gone from affluent suburban living to life below the poverty line, in a shabby house in the “wrong” part of town—with no car. We’ve given up most luxuries, and sold many of our possessions. We’ve become admirably “green,” as a benefit of paring down to the simplest needs. We have chickens, a vegetable garden, and a front door that is always open and ready to welcome a neighbor. People often comment on how we are living with a softer impact upon the earth. But if I am honest, I have to acknowledge that the most dramatic changes we have made were those that were forced upon us.
If you’ve missed reality shows like Pawn Stars, Storage Wars, and American Pickers, then you’ve missed a fascinating front in the expanding “new economy.”
Fields like Eastern Siberia's Verkhnechonsk, set to pump nearly 100,000 bpd this year and reach its plateau of over 150,000 bpd in 2014, are ever more complex and remote, but essential to maintaining Russia's oil exports as the Soviet oil heartland of Western Siberia declines.
While the bulk of Russia's output will come from those old fields -- Western Siberia still holds nearly 3/4 of Russia's reserves -- East Siberia is keeping the oil flowing to growing markets of Asia via the ESPO pipeline, which is due to expand to 1 million bpd in 2012, or a tenth of Russia's total output.
Western Siberia, too, requires heavy investment in technology to maximise output from crudely tapped wells, but the wells are already drilled and the pipelines, power lines and roads built.
In the east, oil companies face up-front costs to get oil flowing from fields surrounded by nothing but forest for hundreds of kilometres. Even drilling contractors willing and able to work here are harder to come by.
Oil prices fell below $88 a barrel Friday as the dollar strengthened and investors mulled whether a new U.S. jobs package will help boost crude demand.
INDIANAPOLIS -- Gas prices at numerous Indianapolis-area stations jumped about 30 cents to $3.85 a gallon on Thursday, angering motorists anticipating that prices would be dropping.
Tropical Storm Nate is expected to become the third hurricane of the Atlantic season today or tomorrow as it forces energy companies to begin evacuating platforms in the Gulf of Mexico.
SINGAPORE (Reuters) - Asian gas oil's front-month timespread rose to four-month high on Friday as market participants weighed the impact of a rare import of diesel from China.
BEIJING, Sept 9 (Reuters) - China's refinery throughput grew at a modest 4.5 percent on the year in August to about 8.66 million barrels per day, the second-lowest daily processing rate this year due to regular plant shutdowns and refinery accidents.
This is the third straight month that China has operated its refineries at levels below the norm since late 2010, capping demand growth in the world's second-largest oil user at rates slower than the double-digit pace seen earlier in the year.
(Reuters) - Russia will sell up to 15 percent in its top oil producer Rosneft for over 200 billion roubles ($6.77 billion) in 2012 as part of a broader privatisation drive that can yield around $40 billion by 2014, Economy Ministry said.
MOSCOW - Russian President Dmitry Medvedev said he hoped Ukraine would stick to its existing gas agreement with Russia despite tension between the two on the issue, according to media reports.
Libya may export this month its first crude cargo since March from the country’s west as the holder of Africa’s biggest oil reserves rebuilds production after deposing former ruler Muammar Qaddafi.
If there is a way to get through the loss of fossil fuels, it lies in developing new and more efficient ways to generate renewable energy and more efficient ways of utilizing the fossil fuels we have left. Renewable sources currently provide only 16 percent of our energy in the U.S. and 11 percent of our electric power. Unless the production of these renewables can be increased substantially in the next 50 years and the efficiency with which we use energy increased many fold, then the world is going to become a very dark and stagnant place.
It is certain that the United States is in for an energy price and, especially, energy supply shock the likes of which have never been experienced or imagined. While high prices, to a reasonable extent can be tolerated, hell will break loose if massive supply disruptions emerge. We are much closer to them than people think and not because of peak oil clamor, still decades away. Those who think that we can conserve ourselves to energy independence need not read any further. They are way wrong and it is pointless to try to show them otherwise.
The world's energy equation is rapidly changing. Three recent developments have altered energy options, re-calibrated the calculation of supply and transformed the implications for the planet's environment. Unfortunately, renewable, pollution-free energies - although they continue to make advances - are not in this equation.
Peak oil has reached the non-OPEC world. Oil prices to rise even more in the future.
I've been asked to comment on the work of a few noted deflationists who are calling for a top in commodity prices here. Their argument is pretty clear cut: Because inflation is a function of available money plus credit (their definition), and because credit has fallen, deflation is what comes next. When looking about for things to deflate in price, commodities are an obvious candidate for attention because they have risen so much over the past decade.
Murphy calls for an "inflationary disaster" while Atwater calls for "price deflation across all categories of consumer goods."
I do not know if we see across-the-board price deflation Atwater calls for given peak oil constraints and an inept US energy policy that also affects food prices.However, I do expect to see falling education costs and medical costs as well as falling prices in a broad array of consumer goods and services, especially if Republicans can get a few sensible deficit measures passed.
Whether that scenario happens or not, the idea "brink of inflationary disaster" is complete silliness unless and until the Fed can revive credit, yet the Fed is powerless to do so.
Long-time followers of Global Resource Investments Founder and Chairman Rick Rule know he is an energy bull. He sees increasing demand as an inevitable outcome of global mathematical formulas. “Around the world, in emerging and frontier markets, 3.5 billion people aspire to your lifestyle, but haven’t been able to compete with you for the last 150 years because they haven’t had any money,” he explains in a recent webcast. “As those people become more free, they become more rich and increasingly they are able to compete with you. In the process, these 3.5 billion people will increase their per-capita consumption of energy. The demand curve in energy relative to GDP is breathtaking. As people on the bottom of the economic pyramid get more money, what they do with it is very energy-intensive. So, GDP gains at the bottom of the demographic pyramid lead to disproportionately high gains in energy consumption.”
NEW YORK (BUSINESS WIRE) -- Leeb Capital Management announces the launch of the Leeb Resources Fund (LCMRX), a new mutual fund that seeks to profit from the issues of peak oil, limited natural resources, and devalued paper currencies. The new fund joins the Leeb Focus Fund (LCMFX) under the firm's management.
There’s a lot of hubbub these days about developing healthy, thriving local food systems, but who is actually financing this lofty endeavor? Just this past week, one group called Transition Colorado put their money where their mouth is by launching Localization Partners LLC, a $1.5 million fund established to expand local farming and food businesses. Boulder-based LP is a for-profit initiative of Transition Colorado, a non-profit whose mission is to achieve relocalization at the community level by engaging people to become more self-sufficient and resilient to the impacts of climate change and peak oil.
HAVANA - The United States and Cuba should work together to ensure that safety is maintained for off-shore exploration of Cuban oil reserves in the Gulf of Mexico, a senior US expert said here Thursday.
I sought reactions to my post on President Obama and the “Alberta tar pit” from a variety of analysts and campaigners examining the economics and environmental impacts of a proposed pipeline linking that Canadian source of oil with American refiners.
I argued that the pipeline issue, which will confront President Obama later this year as he decides whether to approve the project, is a distraction from the core issues involving our energy future and is largely insignificant if your concern is averting a buildup of carbon dioxide in the atmosphere.
Natural gas drilling using a controversial technique known as hydraulic fracturing could create up to 37,000 jobs and generate from $31 million to $185 million a year in added state income taxes for New York at the peak level of well development, according to analyses in a report commissioned by the New York State Department of Environmental Conservation that was released on Wednesday.
But communities in south-central and southwestern New York, on or near the Marcellus Shale, where most new drilling is expected, would pay a price for the local economic bonanza.
Despite its dull title (the Supplemental Generic Environmental Impact Statement), the document offers some interesting tidbits of information on how the drilling will affect quality of life in various places and how the impact might be mitigated.
The outage was accidentally triggered about 4 p.m. Thursday when an electrical worker removed a piece of monitoring equipment at a power substation in southwest Arizona, officials at Phoenix-based Arizona Public Service Co. said.
It was unclear why that mishap, which normally would have been isolated locally, triggered such a widespread outage. The company said that would be the focus of a probe.
The magnitude-5.8 earthquake last month in Virginia caused about twice as much ground shaking as a nearby nuclear power plant was designed to withstand, according to a preliminary federal analysis.
MINERAL, Va. — After weathering the East Coast’s recent quake, the North Anna nuclear plant finds itself in a situation that no American reactor has ever faced before.
The shock was bigger than anything its designers thought it would ever experience —big enough to make 117-ton canisters of spent fuel skitter a few inches on their storage pad.
The situation is so unusual that the Nuclear Regulatory Commission, already facing questions about American earthquake safety after a meltdown at Japan’s Fukushima Daiichi plant, has no protocol in place for determining whether North Anna’s 1970s design still holds up, post-earthquake.
TOKYO (Reuters) - Tokyo Electric Power (Tepco) has edged another step closer to its near-term goal of bringing the crippled reactors at its quake and tsunami-hit Fukushima Daiichi plant to a state of cold shutdown by January, as the temperature at the second of three damaged units fell below boiling point this week.
TOKYO (Reuters) - Radioactive material released into the sea in the Fukushima nuclear power plant crisis is more than triple the amount estimated by plant operator Tokyo Electric Power Co, Japanese researchers say.
TOKYO (Reuters) - Tokyo Electric Power Co used a record amount of liquefied natural gas (LNG) for power generation last month as the No.1 and No.7 units at its sole online nuclear plant in Kashiwazaki-Kariwa were shut for maintenance, leaving only two reactors in operation.
No reactor in Japan has restarted since the March 11 earthquake and tsunami that triggered radiation leaks at its Fukushima Daiichi plant. The radiation crisis raised public concerns over nuclear safety and led the government to impose stricter assessments before reactors can be restarted after routine maintenance.
BOSTON (AP) — The state's highest court is considering arguments from opponents of National Grid's deal to buy power from the Cape Wind offshore wind farm.
The Alliance to Protect Nantucket Sound and the Associated Industries of Massachusetts are among the plaintiffs in the case argued Thursday before the Supreme Judicial Court.
DALLAS (AP) — Two projects in Texas will share part of $43 million in federal grants for offshore wind energy improvements.
The Department of Energy on Thursday announced $900,000 in funding for programs in Austin and College Station, as part of 41 projects across 20 states.
ANN ARBOR, Mich. (AP) — The U.S. Department of Energy says the University of Michigan is expected to get more than $1 million to help spur offshore wind energy development.
Calisolar, a Sunnyvale, Calif.-based manufacturer of silicon for solar cells, has decided to build its next factory in a faraway locale known for generous government subsidies, low taxes and relatively inexpensive labor rates: Mississippi.
Calisolar is the fifth green technology company in the last 18 months to announce plans to build manufacturing facilities in the Magnolia State, which is actively pursuing environmentally-friendly jobs. The state is giving Calisolar a $75 million incentive package that includes grants, workplace training and a $59.5 million low-interest loan.
FREMONT, Calif. — FBI agents raided the headquarters of a California-based solar panel maker, which received a $535 million loan from the federal government and was once held up by President Barack Obama as a model beneficiary of federal aid.
Agents executed multiple search warrants at Solyndra's headquarters in Fremont as part of an investigation with the Department of Energy's Office of Inspector General, according to FBI spokesman Peter Lee. Lee said he could not provide details about the investigation.
An FBI raid on Solyndra Inc., a solar-panel maker that failed after receiving a $535 million loan guarantee from the U.S. Energy Department, may signal the escalation of a probe into the Obama administration’s clean- energy program.
COAL producer Solid Energy New Zealand Ltd last month unveiled plans for a new opencast mine in the Upper Waimangaroa, northeast of Westport — part of the Buller coalfield.
Around half the overburden — material above the coal — will cause acidic runoff and need to be dealt with.
Now Apache, an American petroleum drilling company, will be seismic testing here on the East Coast this month.
Four initial wells are planned, the first early next year. No doubt they will be using the environmentally-unfriendly fracking method.
Majorities of all four political groups support funding more research into renewable energy sources such as solar and wind power and providing tax rebates for people who purchase energy efficient vehicles or solar panels.
Majorities of Democrats, Independents and Republicans support requiring electric utilities to produce at least 20% of their electricity from renewable energy sources, even if it cost the average household an extra $100 a year. A majority of Tea Party members, however, oppose this policy, with 39 percent strongly opposed.
Mankind faces ex-tinction, Prince Charles has warned, unless the way we live can be transformed to stop mass consumption, climate change and destruction of wildlife.
In his first speech as the new president of the Worldwide Wildlife Fund (WWF), Prince Charles suggested replacing the famous fight to save the panda with a new "cause célèbre" - to save the entire environment.
COLUMBUS, Ohio (AP) — Environmentalists lined up Thursday to urge the Ohio Senate to pull the plug on a Republican senator's effort to repeal the state's clean energy requirement, warning it could destabilize a burgeoning new area of the economy.
NEW YORK (CNNMoney) -- Despite easing off on one particular clean air regulation last week, there's every indication President Obama plans on tightening a half-dozen other environmental rules in the months ahead.
Questions about resource availability and limits are not new. The specter of “peak oil”—a peaking and then decline in oil production—has long been predicted and debated, and peak U.S. oil production occurred forty years ago.
But the concept of “peak water” and its implications for the U.S. economy are less well explored and understood. A paper published last year introduced and defined the concept of peak water and The New York Times chose the term “peak water” as one of its 33 “Words of the Year” for 2010.
The blistering heat experienced by the nation during August, as well as the June through August months, marks the second warmest summer on record according to scientists at NOAA’s National Climatic Data Center (NCDC) in Asheville, N.C. The persistent heat, combined with below-average precipitation across the southern U.S. during August and the three summer months, continued a record-breaking drought across the region.
Hundreds of lawns are dying in the 100-degree heat here, turning straw-colored and crunchy. The drought that has gripped much of Texas has forced Llano to adopt some of the toughest mandatory water restrictions in the state. Residents are prohibited from watering their lawns except for once a week early in the morning and late at night. The filling of swimming pools, the washing of cars parked outside homes, the use of automatic or detachable sprinklers — all have been banned since June, by order of the City Council.
Government has always had a hard time telling Texans how to live. But the ban on most types of outdoor watering has been embraced by people in Llano, where a kind of World War II-era rationing spirit has become a way of life.
NEW YORK (CNNMoney) -- The Texas wildfires are adding economic trauma to a state that has already suffered billions of dollars in agricultural damages from an ongoing drought.
Wildfire damages to homeowners could exceed $100 million, a record high for the state, according to Mark Hanna, spokesman for the Insurance Council of Texas.
The west would be wise to curb its dependency on oil, but that will not remove the risk of resource wars. The coming conflicts will not be mainly between the west and the rest. Advancing industrialisation has set in motion a new Great Game in which western states are not the most important players. China is the world's largest energy consumer after the US and will soon be first; but its fiercest rival for oil in future is likely to be India, rather than the US.
The danger comes not only from peak oil. Peaking minerals, arable land and fresh water are likely to inflame existing conflicts and spark new ones in many parts of the world.
By every measure, the Pentagon is the largest institutional user of petroleum products and energy ... Yet, the Pentagon has a blanket exemption in all international climate agreements ... Any talk of climate change which does not include the military is nothing but hot air, according to Sara Flounders.
Perhaps no other head of state is more closely attuned to rising sea levels than the president of the Maldives, Mohamed Nasheed.
The lowest country on earth, with a population of nearly 400,000 people living across some 200 islands in the Indian Ocean, the Maldives are the proverbial canary in the coalmine for global warming watchers. If rising sea levels continue, Nasheed has often said, “We will die.”
Unlike satellite or ground-based data, the information gleaned on flights that dipped from as high as 40,000 feet to below 500 feet recorded and demonstrated some of the mechanisms that put additional greenhouse gases into the atmosphere, adding a level of precision that mathematical models and satellite observation often lack.
"It's like looking at an X-ray from the '60s versus a CAT scan today," Wofsy said of the difference in the data.
Scientists were surprised to find strong evidence that ocean surfaces laid bare by melting ice are emitting methane at a "significant" rate likely to have "global impact," Wofsy said.