Urban Survival: The GOM Situation
Posted by Prof. Goose on October 1, 2005 - 1:35pm
Topic: Supply/Production
Tags: gulf of mexico, oil, peak oil, rig damage [list all tags]
Let me sum up: Hurricane Ivan destroyed 7 platforms and 100 piplines and 0 rigs.
Katrina & Rita destroyed (so far) 90 platforms and (who knows) pipelines and 100?
rigs.
There are typically around 130 rigs working in the Gulf. Today, there are 23.
There will be virtually no new exploration in the Gulf for the next year or so, assuming everything stays the way it is right now. Plus, with the rigs left in operation, there are several countries bidding to have them work in their waters. Guess who wins? Highest bidder.
Gasoline was up $0.40 at my test location just since last night. Expectations are that it will rise over $1.00 by Sunday night. Two years ago, I could fill my SUV (26 gal tank) for $28. Today, it cost me $28 to fill my buzzie with a 10 gal tank.
Service companies are strained to the max. There is very little equipment available. Dive equipment, generators, winches and the whole lot were destroyed in the storms. Rentals are going out all over the world to get the equipment to do the job. Right now, everything is on an even keel, but one more surprise could put the whole remediation effort over the edge, as well.
Still working on the refinery data for you. Don't trust the happy talk. These are eyeball numbers. We are keeping a large wall map up-to-date in the war room. (Oilman1 is at an oil service company that does offshore work - G)
It's not only bad, it's very bad.
Ergo, we may not take too long getting there...we don't like lines any more than you do. (humming, "On the road again, just can't wait to get on the road again...")
Now let me add it up: A tenuous political situation in DC, New Orleans clusterfibbit, quakes pending west, and oil outages on the horizon. That means rationing and restrictions on travel. We'll take flight ahead of a crapstorm any day...
I realize that the situation is still very murky, but it'd be nice to have more hard data. Is it possible for TOD to do a daily summary of where we stand in GOM recovery? You could include the MMS data combined with other data from your insiders.
I'm inclined to belive the government wants to play down the severity of the situation at best, and at worst, possibly hide reports such as the one above. Possibly they do not want to cause panic, or more immeadiately, not add to speculative buying of energy.
However the weekday report from the blandly named OFFICE OF ELECTRICITY DELIVERY AND ENERGY RELIABILITY contains quite a lot of information.
Here is Friday's report:
http://www.electricity.doe.gov/documents/gulfcoast_report_093005.pdf
It appears they have stopped weekend reports this weekend.
Note that even though downed refiners were given some partial power Friday, they seperately reported partial power is not enough to restart plants.
The fact is that American consumption needs to be lowered by 8% (=1.5 MMBPD GOM shut-in / 18 MMBPD pre-huricane consumption). In an egalitarian society, one would strive to spread this "suffering" across the population. However, in a market economy some will go on consuming like nothing ever happened--because they can afford $3/gasoline and $15/MMBtu nat'l gas. Others meanwhile will be forced to stop driving to work because what they earn and stop paying their heating bills because what they burn. They will lose their jobs and have their heating cut off. Their consumption may be reduced by ~100% then.
There is your demand destruction, which may very well be irreversible.
The fact is that capitalism drove the GDPs and with it, the demand for oil & gas, all they way up the Hubbard peak. On the way down, it is no longer part of the solution-- it is part of the problem.
What about oil import capacity given destruction of port facilities? Then of course there is the refining capacity. I think we will see higher prices at the pump than if the oil problems had happened elsewhere.
What we need are aggressive government-sponsered programs in coal-gasification and Fischer-Tropsch synfuels (or similar "alternative" but demonstrated technologies). The "market forces" won't make this happen becuase they are afraid that LNG imports will make coal-gasification uncompetitive.
There is this myth in America that all great technologies were developed without government help. The reality is that the most successful technologies in the fuels and petrochemicals were developed during WWII with aggressive government help-- fluidized cat-cracking for high octane gasoline and synthetic rubber being just two examples.
We've already paid a billion dollars for hybrids through the PNGV. It's a small step from hybrids to plug-in hybrids; we ought to insist that they be brought to market.
I also agree are better off using North American coal reserves to generate electricity (and thus displace natural gas consumption) than using the F-T process to generate diesel. I read in the papers a few days ago that GE and Bechtel agreed to begin engineering and design for a 600-megawatt coal-gasification plant in Ohio - finally! This is by far the largest plant to date. Coal gasification doesn't help much with our global warming problem but it greatly reduces particulate, sulfur dioxide and heavy metals emissions. I live in the Pacific NW and much of our air pollution and the mercury in our tuna come from coal fired electric generation plants in China. I wonder what the cost-benefit calculation would look like to pay the Chinese to replace their existing plants with coal gasification plants. GE would be all for it.
The President needs to take a step beyond conservation and put significant DOE money for plug-in hybrid development. His oil company constituency might not be thrilled, but it wins point on the fuel cost / national security fronts.
The plug-in hybrid was always the threat to the oil interests; it would have allowed anyone who cared to drive on energy from nuclear, natural gas, wind or even solar... on different days. I would not be at all suprised to learn that oil interests had a role in keeping CARB or anyone else from splitting the difference in the ZEV mandate, because once that cat was out of the bag it would have been really tough to keep the tech from spreading.
Also as fuel oil and natural gas prices go up many homeowners will choose to switch to electric heat. And it's not just heat for homes - a number industrial energy needs will switch over as well. Peak oil and peak natural gas will tend place a lot of increased demand on our electric grid independent of our transportation needs.
My point is that we already know how to increase grid capacity. Public utilities plan for growth as a normal part of business. It's just a matter of making sure investment dollars are available and estimates for future demand are realistic.
Hydrogen distribution for fuel cells is an entirely different story. Then we still have to address on-board storage issues, H2 production issues and fuel cell cost issues.
Maybe biodiesel works for Brazil, but I doubt it will work for nations far off the equator like the US and Canada.
So go hybrids. Go Toyota. Support gov R&D support for better batteries, more efficient electric drive trains, continued solar, wind, coal gasification and CO2 sequestration technology, and subsidized loans for electric grid infrastructure enhancements (both efficiency and capacity).
The internet could be used to broadcast to everyone in real time, when and how much recharge load the grid can handle. Electricity prices vary based on this info.
I guess that the best hydrogen distribution method when oil get realy expensive is as synthetic methane. And then you reuse the natural gas infrastructure for distribution.
You would drive into an open-trench service station similar to those fast lube job shops. They swap the battery from underneath without having to jack the car up. Maybe they can lube your hybrid car's gas engine at the same time if the car has a fossil fuel burning, booster engine.
That's the biggest bang for your buck of all... there must be, all over North America, a huge - massive - number of people that could trade some, or all, of their fossile-fueled transportation for human powered transport.
Too little mind-effort is spent on high tech solutions. Three wheeled bikes with comfy seats, high tech generators (for lights) and cargo carrying capability (on board or via trailers) could easily be mass produced at much lower cost... and given away... and would be far more effective in reducing overall fossil fuel energy use than any other initiative I can think of, other than a mass die off thanks to some new flu virus.
Bingo.
We'll be reading about homes that burn down this winter from poorly utilized electric space heaters, unfortunately. Winter electricity usage is likely to hit new highs, reducing spare capacity and the ability to take equipment off-line for maintenance.
I wonder if its possible that growing reliance on electricity due to high fossil fuel costs might ever (this year, next or ?) bring summer time conditions of near-peak capacity utilization to the winter, where failure would be dangerous, not just an inconvenience, in many locales.
I've not researched this but assume its possible.
- Electricity is prioritized and NG for home heating is reduced. Many people will learn about pilot lights.
- Home heating is prioritized and some peaking capacity is given up. People with oil or electric heat learn how well their houses are insulated during brownout or rolling blackout periods. These people also realize that building so many NG-dependent power plants was a rather bad idea.
Envelope time: typical gas-heated home uses 50 million BTU/year for heat. Average vehicle drives what, 14K miles/year and gets ~24 MPG? Call it 580 gallons/year at 126,000 BTU/gallon: 73 million BTU. If 35% of driving (4900 miles) is done during the heating season, that's 26 million BTU. Combined cold-season consumption: 76 million BTU of fuel.
Burn this fuel in a cogenerating furnace at 25% electrical efficiency and 90% overall efficiency. You get 49 million BTU of heat (close enough) and 18.9 million BTU (5540 kWh) of electricity. If the vehicle uses 350 Wh/mile at the charger, you get enough electricity to drive 15800 miles; if you only drive 4900 miles you'd only use 1715 kWh and have 3820 kWh left over. That's enough to use 1 kW continuous for 159 days of the year, replacing the gas or coal that would be used to power the grid.
The improvements get much, much better if you use the surplus electricity to run heat pumps; how much better depends on the efficiency you allow.
Yes, it sounds nutty but the numbers all work out. We could be getting so much more out of what we use than we are; we just haven't implemented the (relatively simple) technologies to do it. Well, it's time.
Climate Energy LLC has a venture going with Honda to make a cogenerating furnace (which would burn fuel conventionally when heat demands outran the cogenerator output). The cogenerator section produces 1 kW at about 21% electric efficiency, 85% overall (it does not appear to recover latent heat in the engine exhaust). The cost premium over a conventional furnace is about $4000.
It would take you quite a few years to pay this off. (My personal opinion is that it's too small for the expense, and we should throw it back until it grows up. ;-)
That's the high-cost option. At the other end are a whole family of engine designs cloned from a venerable English make, the Lister (sometimes called Listeroids). They're widely manufactured in India, are rated at 6 HP (4.5 kW) in the single-cylinder version, have a thermal efficiency I calculate at about 30%, and run for about $1000 FOB Oregon.
You'd need a few tweaks to press this into domestic use in most places: co-fuelling with natural gas or LPG, heat recovery system in the exhaust, noise suppression, vibration isolating mount, direct-drive alternator built into a modified flywheel. Add a coolant pump and a heat exchanger for the furnace air, and you've got a complete cogenerating heating system. I would be extremely surprised if this could not be built for $4000 complete, the same as a conventional furnace (automobile drivetrains cost about the same, and this thing is simpler).
How do you calculate payback? On the relative cost for a new installation, of course, but what for replacements? The economics look a lot better for the Listeroid than the Honda, and more I don't know yet.
I am personally a bit hesitant advocating new technologies that require many years of R&D work and radical changes in transportation infrastructure (from engine manufacturing plants to power distribution) -- we just don't have that much time.
Coal is plentiful and domestic (no security risk), and coal gasification is almost as clean as electric generation from natural gas so the NIMBY factor is minimal. I think the recent deals between AEP, GE and Bechtel, and Cinergy and Vectren for new 600 MW IGCC facilities is the tip of the iceberg. There are substantial long term price risks on both the coal and natural gas sides because of peak oil; it's a good idea to hedge bets and invest in every reasonable path. And IGCC technology is looking more and more reasonable: in the last 3 years the price premium over a traditional coal fired electric plant has dropped from 50% to 20%.
Any path we choose to reduce our dependence on oil will require radical changes. If we don't have time to implement massive changes in our transportation infrastructure, well, hope you and I both survive the collapse. I'm hoping we still have another 10 years before things really get bad. I think we will see practical plug-in hybrids on the market within 3 years and they will make up a significant portion of the market within 10. In the meantime I don't see fuel cell cars becoming much more feasible and am doubtful biofuels can increase in EROEI and scale up.
What gives me more hope for the weak hybrid to plug in hybrid to electric car path is the tremendous improvement in battery technology driven by the consumer electronics industry. If we can replicate advances in cell phone and laptop batteries that we've seen in the last 10 years in auto batteries we should be able to shift the majority of transportation energy requirements from oil to the electric grid with a minimum of turmoil.
I see political unrest coming soon.
On the other hand, though, I think there's a middle ground between driving as normal and losing jobs: There's carpooling. There's mass transit. There's bicycling and walking. There's moving closer to work. Many of these strategies are more available to poor folks (who often don't have to sell a house before they can move closer to work, for example).
I think the best we can hope for is that things get bad in the right way: a shock, so that people decide early to make these changes, and then a period where things get a bit better to give them time to make the changes (but not so long that the early adopters feel like they've made a mistake). Thrashing about with prices high enough to crush the poor followed by six months where prices are cheap again, combined with politicians saying things will go back to normal, would cause worse problems.