The Oil Drum

Russian Energy and U.S. Implications

Lost in a lot of the oil analysis these days is Russia's role. Over the past 5 years or so, Russia has provided roughly 80% of non-OPEC oil production growth. This increase in Russia's oil production was just what the doctor ordered to match concurrent increased demand from China, India, the Middle East, and Russia itself.

That said, Russia's oil production peaked a few months ago and is now contracting - under the 10 million BPD average production rate of 2007. One can find multiple explanations for the decrease in Russian oil production: aging infrastructure, less Western oil company participation, high tax rates, or perhaps just Russian government officials asking themselves. Or perhaps depletion rates are catching up with new production.

$4 Gas: The End of an Era?

Someday, family road trips may become completely unaffordable. People who study the oil industry say that classic summer road trips could be going the way of the extinct Ford Edsel.

That's because the demand for oil is increasing all over the world. In India and China, the number of new cars on the road has been rapidly increasing. In China, there are thousands of new automobiles hitting the streets every day.

In addition, some experts say the production of oil worldwide may have peaked.

High Steel Prices: A Preview of Peak Oil

I use the phrase “Crunch Time” to denote the period after Peak Oil during which oil prices are so high due to production shortfalls that the normal functioning of economic activity is curtailed. Not only are the poor - and eventually the middle class - kept from buying the oil products they need, but industry’s capacity to ameliorate the problem by making what is needed to free society from the grip of oil is also greatly slowed, thereby extending the Crunch Time.

Such necessary products fall in two categories. First are those consumers can use to free themselves of oil: cars, trucks, and trains that operate on electricity instead of gasoline or diesel. Second is the capital equipment needed to make both such consumer items and to obtain more oil and other energy sources. Steel is one of the inputs to those products.

Malthus, the false prophet

Once again the gloom is overdone. There may no longer be virgin lands to be settled and cultivated, as in the 19th century, but there is no reason to believe that agricultural productivity has hit a buffer. Indeed, one of the main barriers to another “green revolution” is unwarranted popular worries about genetically modified foods, which is holding back farm output not just in Europe, but in the developing countries that could use them to boost their exports.

...Although neo-Malthusianism naturally has much to say about food scarcity, the doctrine emerges more generally as the idea of absolute limits on resources and energy, such as the notion of “peak oil”. Following the earlier scares of the 1970s, oil companies defied the pessimists by finding extra fields, not least since higher prices had spurred new exploration. But even if oil wells were to run dry, economies can still adapt by finding and exploiting other energy sources.

Huge study documents changes from climate warming

A landmark new climate study released today reports that global warming is already changing the life cycles of thousands of animals and plants — as well as hundreds of physical systems — worldwide.

It documents rapid glacier melts in North America, South America and Europe; trees and plants sprouting leaves much earlier in the spring in Europe, Asia and North America; permafrost melting in Asia; and changes in bird migration patterns across Europe, North America and Australia, all in response to rising global temperatures.

While previous studies have looked at single phenomena or smaller areas, this is a new analysis on a continental scale looking at data that had not been previously assembled together in one spot, says lead author Cynthia Rosenzweig, a scientist at NASA's Goddard Institute for Space Studies in New York.

US senators pressuring Saudis to hike oil output

WASHINGTON (Reuters) - Senate Democrats Tuesday introduced legislation to stop a U.S. arms sale to Saudi Arabia worth $1.4 billion in a tactic supporters said was aimed at pressuring the OPEC country to increase its oil output.

"We are saying that we need real relief and we need it quickly. You (Saudi Arabia) need our arms, but we need you to cooperate and not strangle American consumers," said Sen. Charles Schumer, a New York Democrat.

Old gas pumps can't handle ever-rising prices

REARDAN, Wash. - Mom-and-pop service stations are running into a problem as gasoline marches toward $4 a gallon: Thousands of old-fashioned pumps can't register more than $3.99 on their spinning mechanical dials.

The pumps, throwbacks to a bygone era on the American road, are difficult and expensive to upgrade, and replacing them is often out of the question for station owners who are still just scraping by.

Many of the same pumps can only count up to $99.99 for the total sale, preventing owners of some SUVs, vans, trucks and tractor-trailers to fill their tanks all the way.

Don't let rising gas prices push you into panic selling

Logically, the high cost of fuel doesn't justify drastic lifestyle changes, so don't be too quick to dump your SUV or your suburban home.

The rising price of gasoline offers all of us an interesting logic test. What's the right thing to do in response? Should we sell our big vehicles, give up our houses in the suburbs, or spend billions of dollars on a new transit system?

If you checked off none of the above, you're on the right track.

Gas Prices Send Surge of Riders to Mass Transit

DENVER — With the price of gas approaching $4 a gallon, more commuters are abandoning their cars and taking the train or bus instead.

Mass transit systems around the country are seeing standing-room-only crowds on bus lines where seats were once easy to come by. Parking lots at many bus and light rail stations are suddenly overflowing, with commuters in some towns risking a ticket or tow by parking on nearby grassy areas and in vacant lots.

“In almost every transit system I talk to, we’re seeing very high rates of growth the last few months,” said William W. Millar, president of the American Public Transportation Association.

'Peak oil' is here. Now what?

What does it mean that crude oil is peaking? Essentially it means that the world has used half the oil available to extract and will enter a permanent decline, even as world energy demand is rising, with new economic powerhouses China and India growing at an alarming rate. Peak oil does not mean we are on the verge of running out of oil; the overriding implication is that we are entering a period of relentlessly rising prices and ultimate shortfalls. This is ominous for economies and for individuals facing a seeming perfect storm of hardships financial and otherwise. Talk to a poor mother trying to fill her oil tank through a northern winter, or to a fisherman paying $6,000 in diesel fuel costs to get to and from Georges Bank, to a South American peasant thrown off his land to make room for “palm oil for biofuel” plantations, or to a native Athabascan woman watching as Alberta tar sands operations lay waste to formerly pristine ecosystems over an area the size of Florida.