Doesn't anyone at CNN know about PO?

Does the above sound like a reasonable plan for the US after the winter of 2005-06??  Or do ya think we will build more windmills??

==AC

Oil production growth slows in Russia

Oil production growth in Russia has dropped 2.5-fold this year compared with 2004, though the country remains the leading oil exporter outside the Organization of the Petroleum Exporting Countries (OPEC), the International Energy Agency said in its report published on Tuesday.

By preliminary estimates, Russia's oil production stood at 9.8 million barrels a day last month, 70,000 barrels a day more than in August.

Russia's oil output this year is expected to be 250,000 to 300,000 barrels a day more than in 2004. Growth is expected to remain at the same level in 2006. But IEA experts say oil production will be growing much slower over the next two years compared with last year, when oil output climbed by 740,000 barrels a day.

http://top.rbc.ru/english/index.shtml?/news/english/2005/10/12/12114708_bod.shtml

https://www.bauer.uh.edu/gemi/new/supply&demand.htm

Qt is total estimated cumulative oil production, where you extrapolate the P/Q versus Q linear progression down to where P closely approaches zero.  

Texas peaked at 54% of Qt.  It looks like Norway peaked at about 55%.  I would like to see a P/Q versus Q plot for the Lower 48.  I think that Alaska distorts the U.S. plot (since Lower 48 oil production peaked years before oil from Prudhoe Bay was able to be shipped south).

In any case, once a country/region has:  (1)  decades of serious oil production and (2)  has entered the linear progression phase, can anyone find any examples of countries/regions showing increasing production beyond the 55% of Qt mark?

Saudi Arabia is at 55%.  By the way, Saudi Aramco is running full page ads in the Dallas paper, trying to get drilling and petroleum engineers to come interview.  It has a strong whiff of desperation.  If the Saudis are now where Texas was in 1972, they are about to embark on a huge--and probably futile--drilling effort.  Because of a huge drilling boom from 1972 to 1982, the number of Texas producing wells went up by 14%, but oil production fell by 30%.

Also, does anyone have an estimate for cumulative world crude oil + condensate production prior to 1960?  (Not counting NGL's).

Jeffrey J. Brown

The Iran/US conflict has been discussed in many places, particularly those that deal with gold and silver. Anything that might weaken or threaten the dollar hegemony is something that the US will deal with quickly and surreptitously - whatever the US does, their right hand will not know where the left hand was. Dollar hegemony failing would absolutely wreck the world economy, but the US would far and away be the biggest loser. Right now, without strong alternative currency or reasonable gold prices, nobody will rock the boat. If Europes labor groups hang together and refuse to lower interest rates, then it all comes down to who blinks first - the dollar or the Euro. With the election of a slightly more right leaning personage at the German helm, it would seem like the dollar is winning. But there are so many other ways things could fall apart, and an oil bourse run by Muslims and trading in Euros is definitely one.

Remember, the enemy or my enemy is my friend. In the face of blatant US aggression, alliances will change rapidly. Should the stock market stumble, the slow exodus of foreign investors we have now may become a torrent, and the dollar would suffer greatly. The stock market is what backs the dollars value, not gold. Thus the dollar would fall as well. At what point would our creditors unload their bonds and flee en masse? I would think a quick look at our trade balances and current account deficits would answer that all too quickly.

Just some thoughts...

The recent thread on inflation was interesting. Credible cases were made for inflation, stagflation, and deflation. That's one issue right there--plausible scenarios from thoughtful people that are in exact opposition.

Secondly, I did not note anyone who made the ceteris paribus case: that everything in the business cycle will continue on roughly normally, moderate growth punctuated by recession and recovery. Is the normal cycle broken? And if so, when will we notice?

One of my worst-case scenarios is a whimper, not a bang: the world plods along on the same couse blindly and haplessly, trying to follow outmoded strategies that will no longer work. We get confused and frustrated, but can't work out any real solutions. If that happens, we lose all preparation time because we don't perceive the situation properly until it is well and truly upon us. Thoughts?

In order to use the heavy sour crude, you need massive infrastructure development.  Its seems like if money was to be made with heavy sour crude refinement, then oil companies would be jumping over each other building refineries to use it.  But I think, just like the pessimists here at theoildrum.com, they see the end of oil and there's no reason to put their billion's to work.

I think there is some similiar argument when it comes to oil sands/oil shale/coal liquification.  What might be useful, is an estimate of the amount of energy for development of these alternative fossil fuels versus how much energy is supposedly available.  I know its very technologically dependent, but there are best case and worst case scenarios that are based on physics not conjecture.

And the reason to keep the subject towards fossil fuels and conversion to a liquid petroleum like substance is because transportation is still (and into the forseeable future) highly dependent on this form of energy.  I did a small back of the envelope calculation the other day comparing oil/coal to batteries.  Batteries technologies are often compared to each other by their gravimetric energy density in the units WATT-HOURS/KG.  I know its a weird unit here at this site.  

lead acid: 30 Wh/kg
nicad: 50 Wh/kg
li-ion: 100-300 Wh/kg
gasoline: 2300Wh/kg

I made the gross assumption of about 20% conversion efficiency for the gasoline's heat energy to useful work.  And this doesn't account for the weight of the engine (I figured the electric motor would weigh a bunch too).

In short, this is why we're up the creek without a paddle.  A battery powered 'jet airplane' would only go about 70 to 700 miles instead of 7000.  The car, could go farther than the linear approximation since you can load it down with heavy batteries, but it still takes a huge toll.

Here's another back of the envelope calculation I found enlightening:

How much electrical energy would it take to replace an oil field producing 400,000 bbl/day?  Its approximately a 10GW electric power plant.  The largest nuclear power plants in this country are about 1.2GW.  But the main thing is the oil is easily stored and transported across oceans or in vehicles.  If the US is using 25 million bbl/day, the US would need about 620 massive nuclear power plants (its hard to say, but at least $10 trillion to build them) to replace that power and there still is no way to store it or use it for transportation.

I've seen a lot of commentary/questioning about whether or not light sweet crude has peak.  ENI (major Italian integrated energy company) has some of the most detailed global information available, including historical crude production for every oil producer broken out into ten quality categories (i.e., ultralight, light and sweet, heavy and sour, etc.).  Per their info, which does NOT include the lower 48 states, light sweet crude reached a recent peak in 1997, and has fallen about 1 mbpd since.  

It is worth noting that just because a crude is light and sweet, it is not necessarily the easiest oil to produce (point in fact, roughly 40% of our light sweet production comes from offshore fields).  Also, only 400,000 bpd of it were from the middle east.  Relative to global production, light sweet crude accounts for about 12 million bpd, which, while important, pales in comparision to medium and sour crude (29 million bpd).  While light crude declining slowly is a big issue refinery wise, we are by no means totally dependent on it for gasoline, although it definitally makes meeting environmental standards a lot easier.

With light sweet crude, effectively all of the declines in recent years are due to losses in North Sea.  In Africa, production is up over the Inolast 5 years, and there is strong potential for near terms gains in Algeria, Libya, Congo and Nigeria, thinking happy geopolitical thoughts.  I don't have hard data on reserves by crude at the moment, although much of the current light sweet production is from weakening areas (Norway, UK, Indonesia), a lot is not.  For the record, by this source Ghawar is mostly medium and light sour crudes.

Again, all of this data is excluding the lower 48 states, although I doubt that would significantly change the underly trend behind this information

I can just see Kunstler rubbing his hands together saying "See! See! I told you so!".

In it he says "As Delphi executives tell the tale, they need to reduce the hourly pay of their 34,000 unionized employees from the current $26 to $30 range to a somewhat more modest $10 to $12." As contrasted to "In 1914, one year after he opened his first assembly line, Henry Ford doubled the daily pay of his workers, saying he wanted them to make enough to buy the cars they produced."

"If Delphi gets its way, its employees will clearly not be able to buy new GM cars. (At the rate things are going, they'll have to save up to buy gas.) In the face of the combined onslaught of globalization, de-unionization and deregulation, the bottom may not be falling out of the American economy, but the middle certainly is. The very notion of a decently paid working-class job has become a defining oxymoron of our time."

Is this the way for oil "demand destruction" to happen?

http://www.usatoday.com/money/industries/energy/2005-10-10-iraq-oil-usat_x.htm

One such worrisome practice is the way oil workers are re-injecting residual fuel oil into the northern wells of Kirkuk, Qureshi says. Workers have no place to store the oil as fast as it is being produced, so the excess oil is re-injected into the well for later pumping.

But the process could irrevocably harm the oil fields, Qureshi says.

"All these practices are continuing and potentially causing long-term damage," Qureshi says. "People are worrying about this."

Agriculture -  food prices an early casualty of PO.  Read somewhere the US agri energy budget equals that used in France's total GDP.   Can that be!?  Also, read somewhere that with no oil we could feed about 2 billion.  Let's see--but we've got 6.5 B now.   I know fertilizer made from NG has gone way up last few years==and farmers have to pump water and burn diesel.  Adding to the fun, as Lester Brown reports, China has become a gross importer of GRAIN only in the last few years (so badly have they trashed their own ag.)

Bottom line.  We could be a very hungry country soon.  A lot of diet programs will be out of business.

4 week average ending
10/07/05    10/07/04

Crude inputs to refineries
 13,562      14,972

Total Usage
  20,014     20,600

=============================

Cumulative Daily Avg (279 days)
   2005         2004

Crude inputs to refineries
  15,368       15,472

Total Usage
  20,626       20,656

==============================

What is more critical to our onward march toward a police state in a post-Peak Oil world than Bush's ability to indefinitely imprison any American citizen, without due process, based merely on his assertion that the detainee is an enemy combatant?  Remember that the Bush Administration listed the Padilla case as one of their "successes" regarding the "War on Terror."

Cato summary of Padilla case:  
http://www.cato.org/dailys/08-21-03.html

Another website:  
http://www.chargepadilla.org/

Globalization is not going away anytime soon. The poster noted a $1+ savings by buying asparagus from Chinal. The cost to ship a can of asparagus, or socks, from China to the US is very low, probably less than $.01, and will still be low when oil goes to $200. The cost to truck the asparagus across the country is high, so we will likely shift from trucking to railroads. (A recent report had truckers calling for price controls, not exactly something that would hasten needed changes.) Indeed, the coming sharp reduction in motor fuels usage will mostly come from a reduction in short distance travel (commuting), which is both least efficient and (in the US) consumes most of the supply. This may be an advantage - a fat man can last longer than a skinny man.

High US salaries might be maintained in areas where we excel, such as design, movies, finance, and where foreigners can't compete, such as service. Manufacturing is likely to suffer, not least because the reason such jobs became high paying was because workers had (and still retain) the power to halt production; in the absence of competition it was always easier to simply give in and pass the higher costs to the rest of society's (lower paid) workers. With competition the power to stop production has become the power to resign en masse, so is now used sparingly.

Of course, failings of the US car industry to develop more fuel efficient cars (such as the Prius) is indeed a damning indictment of our leaders' concern of short-term profits combined with a criminal lack of vision - an inability to see the past, a la the seventies, as well as the coming future. If ford and gm go under and are replaced with japanese owned plants producing fuel efficient vehicles, would the country be better or worse off?

Some jobs are being lost on account of internal competition. Doing away with the CAB (one of Carter's few accomplishments) suddenly empowered upstarts with a plane or two to enter the business. Moaners about lower industiral salaries do not complain that air travel pricing has not increased over the past thirty years, unless of course they work in the industry. These lower prices also meant the demise of the local travel agent, but few non-agents complain. Real estate agents are fighting a rear guard action to maintain their high commissions, but this is a losing battle.

Competition is vital to maintaining a healthy economy, whether it is the local, regional, national or international level. As we become more efficient society produces more goods and services, so living standards rise. Of course, our ability to compete in the global society is increasingly dependent on our education system.  Our failings here may be a better reason for being pessimistic about the future than PO.

As other countries get richer we are more likely to sell them our products instead of sending them our soldiers. Try to remember how we interacted with China before Nixon went there - compare the pre-Nixon US/Chinese era with how we deal now with North Korea. China has become a fierce competitor, but as their middle class grows in numbers and wealth, the possibility of war is reduced.

http://www.eia.doe.gov/emeu/steo/pub/contents.html

Here's the bit on global oil markets, with my emphasis:

International Petroleum Markets

Prices. The WTI crude oil price averaged about $66 per barrel in September, with an average price of about $64 per barrel projected for October under the baseline weather scenario, accounting for hurricane damage. Quarterly averages for the WTI price are projected to remain above $63 per barrel for the rest of 2005 and 2006. Continued high crude oil prices had been expected prior to Hurricanes Katrina and Rita.

Under the baseline weather scenario, the projected fourth-quarter average WTI price of $64.40 per barrel is approximately $16 per barrel above the year-ago level, but is about $3 per barrel lower than in the previous Outlook, which was made prior to the additional loss of crude oil production and refining capacity resulting from Hurricane Rita. While oil product prices rose in response to the resulting product shortages, the loss of operable refining capacity from Rita (which was more than twice as large as the shut-in crude production resulting from Katrina) reduced the demand for crude oil, moderating WTI prices. Should 10-percent colder weather prevail in the United States this winter, WTI prices are projected to be $ 4 per barrel higher than the baseline. Should the U.S. winter be 10 percent milder, WTI prices are expected to be $3 per barrel lower this winter. WTI prices will also be significantly impacted by demand in other parts of the world, which is sensitive to both weather and economic conditions, and by global supply developments.

Demand. Worldwide petroleum demand growth is projected to slow from 2004 levels, but still remain strong during 2005 and 2006, averaging 1.8 percent per year over the 2-year period, compared with 3.2 percent in 2004. This reflects a downward revision from the previous Outlook. The average annual worldwide oil demand growth is now projected to be about 1.2 million barrels per day in 2005, down from the 1.7-million-barrels-per-day growth projected for 2005 in the previous Outlook.

Production. Moreover, only weak production growth in countries outside of the Organization of Petroleum Exporting Countries (OPEC) is expected. With the loss of production in the Gulf of Mexico from the hurricanes, production declines in the North Sea, and the slowdown in growth in Russian oil production, non-OPEC supply is projected to increase by an annual average of only 0.1 million barrels per day during 2005 before increasing by 0.9 million barrels per day in 2006. In addition, worldwide spare production capacity is at its lowest level in 3 decades; and in reality, only Saudi Arabia has any spare crude oil production capacity available. Lastly, the continued geo-political risks, such as the insurgency in Iraq and potential troubles in Nigeria and Venezuela, have boosted the level of uncertainty in world oil markets.

High levels of production from OPEC members contributed to inventory builds in the Organization for Economic Cooperation and Development (OECD) countries in the first half of 2005, with these stocks moving above the upper end of the 5-year historical range. However, OECD stocks have not grown as quickly in terms of days' supply (the number of days that inventories would satisfy demand) because demand has grown rapidly as well. In addition, stocks were drawn down in the aftermath of hurricanes Katrina and Rita, with OECD inventories moving back towards the middle of the 5-year historical range.

Gas down, Distillate down and Propane down.

http://tonto.eia.doe.gov/oog/info/twip/twip.asp