In a shortage, businesses lose gas before homes
Posted by Heading Out on October 6, 2005 - 11:12pm
These evacuations are equivalent to 35.29% of 819 manned platforms and 4.47% of 134 rigs currently operating in the Gulf of Mexico (GOM).Despite the early snowfall out West the rumors that one hears, and sees in the odd comment, is that we may have a very mild winter. That would be very helpful since in an earlier post I quoted the problems that President Carter inherited, with a bad winter and a natural gas shortage, that led to businesses being closed and schools closed.Today's shut-in oil production is 1,202,364 BOPD. This shut-in oil production is equivalent to 80.16% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.
Today's shut-in gas production is 6.628 BCFPD. This shut-in gas production is equivalent to 66.28% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.
Manufacturers that use huge amounts of natural gas are scouring the world for cheaper prices and considering moving operations to ease their costs. A renewed exodus -- many companies have already shifted overseas -- could further knock back growth in the United States and boost unemployment.Given that there are many processes where the heat has to stay constant during manufacture, and where shutting down half-way through can lead to huge costs, it may well be that others will start to read this writing on the wall, and also start to consider moves.Andrew N. Liveris, chief executive of Dow Chemical Co., told a hearing yesterday before the Senate Energy and Natural Resources Committee that the country is in a "natural gas crisis." The Midland, Mich., company, which uses large amounts of the fuel to produce chemicals, must consider locating new plants in other parts of the world, such as China and the Middle East, because of U.S. energy costs, he said.
"How can I recommend investing here?" Liveris said.
Speaking of moves, I will be away from the computer for a few days (or at least away from a decent connection). So 'til then, have a good weekend.
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So what's the cut-off order?
Business off first, then schools, then electric power plants, then homes?
Why do I feel like Cassandra?
http://www.cpc.ncep.noaa.gov/products/predictions/long_range/lead03/off03_temp.gif
It does look warmer than typical in the central part of the US with normal temps in the Northeast.
But then, she's working on a military project with a bunch of guys who think global warming is a scam.
Obviously, you rate things in terms of criticality. Some businesses are more important than others, some goverenment organizations are more important than others, people should be induced to conserve.
Obviously, the power plants should be the last thing to be shut off.
But really, it's not going to get that bad.
Now we know that the easy gas is gone. Tight sands, arctic, off shore, tight shale, coal bed methane, etc, are pretty much what's left.
It seems like the more I think about this, the more I start tilting in the nuclear option. There's obviously a lot that needs to be done in terms of re-ordering of our way of life to make it less energy intensive, but the nice thing about Nuclear is that it does appear to be a stable source of energy if you start using breeder reactors and recycle your waste until the point of close to net energy extraction.
But I'm hardly an expert.
However, at the time I was adamant that the rush to natural gas was going to quickly soak up new extraction margins.
"Quickly" in the energy business is a decade.
Too bad Calpine didn't take my advice.
The other problem is the big 800 MW natural gas electric day peakers that purchase directly from the interstate lines. They are not regulated by states but by FERC, and it would take a declared federal state of emergency to throttle them back.
==AC
I guess that won't be long...
Zimbabwe: living in a lunatic asylum
By Eddie Cross
Last updated: 10/05/2005 22:18:12
http://tinyurl.com/aw8df
THIS week, we broke a milestone of sorts - the Zimbabwe dollar collapsed to 100 000 to 1 against the US dollar. Just three months ago it was about 25 000 to 1. A businessman in Harare told me that in his business, inflation had been 600 per cent in six months. There is no sign of any stop to this slide - if anything it is accelerating
Activists claim McDonald's toys made with child labor
Hong Kong labor rights activists say these photos show a sweatshop across the border in China, bottom, and teenagers who work 16 to 20 hours a day making toys
September 6, 2000
Web posted at: 8:24 a.m. HKT (0024 GMT
http://tinyurl.com/cpdgc
Nike Just Doesn't Do It
by Carl Mayer
http://tinyurl.com/9rovj
In one of its most highly charged cases, the Supreme Court will soon rule on whether the First Amendment to the United States Constitution - the one that protects the free speech of living, breathing humans - allows multinational sneaker giant Nike corporation to deceive customers about working conditions in the company's global factories. These factories allegedly employ children under the age of sixteen, impose twelve-hour workdays, pay illegal poverty wages and expose workers to life-threatening environmental toxins.
The man who brought the lawsuit, Mark Kasky, is a runner who used to lace on Nike sneakers. But when Kasky found out that Nike - contrary to its own PR campaign - produces sneakers in factories that resemble 19th century London sweatshops depicted by Charles Dickens, he got mad. Kasky sued Nike under a California consumer protection law that requires companies to truthfully disclose how products are made.
http://tinyurl.com/a2ymb
Multinational Corporations Reap Profits from Child Labor in India's Cottonseed Farms
by Suhasini
NEW DELHI - A new report says an estimated 12,375 children continue to work under terrible conditions on cottonseed farms in the southern Indian state of Andhra Pradesh which supply their produce to multinational corporations (MNCs) like Bayer and Monsanto, in defiance of last year's promises to eradicate child labor.
I have a major facility in China. We don't emlpoy child labor. If the Chinese government chooses to enslave their own population, yes, that is a problem. As it is in NK.
But what are the labor laws in China? Can you tell me? Does China allow what we in the West would consider children (<16) to work?
And thanks for those "Major News Source" links. All from the same site. Not buying it.
But what are the labor laws in China? Can you tell me? Does China allow what we in the West would consider children (<16) to work?
Great argument. Ya there are countries where it is legal to sleep with 12 year old children too. Does that mean its ok in your book? Should you do it because that opportunity is available?? "Well the law says I can work a 14 year old child 40+ hours a week for 2$US an hour". Then it's OK? Why not open "Your major facility" in the US?? It's much cheaper i.e. PROFITABLE to pay people that eat a bowl of rice a day and peddle a bike to work. You are part of the problem...
==AC
BTW
I think you missed the point about the CORPORATE OWNED media outlets....
Nice sleight of hand there. I have a factory in a foreign country so of course we all sleep with 12 year olds. Come on. Is that the best you have? If so, it's sad.
We have major facilities in the US. It costs us a lot of money to keep these facilities open. But our quality control is phenomenal. And we have yet to recreate that overseas (yes, we are trying).
The China facility is a joint venture. And it is paying off handsomely for both parties. Unfortunately child labor doesn't quite meet our standards. It is the same with a large chunk of Chinese labor. Yes there is a lot of it. A lot of it skilled, no. And that's what I need.
Ah, the bowl of rice argument. See that one a lot. Ok Mr. AC (easier to type). If the prevailing wage in timbuktustan is $1 a day and Mr. Evil corporate guy comes in and pays $5 a day, tell me how that is wrong. Please.
At our facilities in Africa, there are near riots when someone is either fired or a new position becomes available. Why? We pay way above standard wages. Y'all anti-corporatists have forced us into it. It causes huge problems in those countries.
Whoever works for us is considered rich (seriously). And it is true.
As an analogy, median (family) income in the US is roughly $40K. Now imagine Mr. Evil capitalist comes to the US and opens a factory. And he is paying $200k for basic labor. What would happen in this country if that happened? Gold rush? Damn straight. That is the reality of the global marketplace.
Touché . You know that wasn't the crux of my argument.
"The China facility is a joint venture. And it is paying off handsomely for both parties. Unfortunately child labor doesn't quite meet our standards. It is the same with a large chunk of Chinese labor."
You are you kidding when you say "Unfortunately", right?
"Ah, the bowl of rice argument. See that one a lot. Ok Mr. AC (easier to type). If the prevailing wage in timbuktustan is $1 a day and Mr. Evil corporate guy comes in and pays $5 a day, tell me how that is wrong. Please."
No I guess it's great for the poverty stricken worker in timbuktustan. But what does that mean for the US? What is to become of the US when all the manufacturing and production jobs or shipped away? It's not you MO, it's the system. The US is going to be timbuktustan soon enough the way we are being dismantled. If there is profit to be made after the US becomes a "timbuktustan", GREAT.
WHAT DOES IT MEAN FOR THE US??
I'm sorry I stirred up TOD. I'll cease and desist..
==AC
And my competitors set the project back 6 months because they were in under the heads? You're getting in to the hundreds of millions of dollars lost. Over a million dollars worth of equipment.
That's why I will always have a base of US manufacturing. Despite the efforts of the EPA (that's a story for another day)
I'm going to assume you have kids. I don't have any basis for that assumption, it just feels right.
Here's the litmus test: Would you allow your child to work in your factory?
No?
Then screw you.
Skilled labor Descolada. Not a lot of 12 year old machinists out there. Or foundry workers. Or engineers. Jeez.
Litmus test? I've worked since I was 10. Since I did it by choice, I guess I exploited myself for child labor. And my kids will work. Best way to learn about the real world is to enter it.
Do you have children? Do you want them to grow up into irrational hot heads? No? Then Screw You! </joke>
In the posts leading up to this (and thus you should have read them before posting this (I won't use posts elsewhere in different threads, as I can't claim that you have to have read all comments in all stories before you're allowed to comment, but ettiquete demands that you have read the posts in the history of the conversation you are jumping into)), madoilman has said that he hires skilled labor, and it sounds like he pays above average wages (and exacts above average prices for the great product). It sounds in no way like he's looking to make a horrible work/slave environment.
Even more to the point, you don't even seem to give him any credit, there's no, "If not, then..." it's just that you assume that he wouldn't, and then tell him to screw himself. He's been polite in trying to continue this part of the thread while he could have just walked away.
<fighting_words> Last time I looked, this wasn't slashdot. </fighting_words>
Madoilman, you have my apologies for the treatment you're received for trying to contribute here.
I'm a big boy. And they are only words. From someone anonymous at that. My email address is part of my profile. As well as a boring and rarley posted to website. I don't have anything to hide.
And my views will necessarily clash with some members of this forum. It's to be expected on a topic that elicits such, er, passions.
From a general moral standpoint it is reasonable to assume that one human life is worth the same regardless if it is a Timbuktistani or an American.
So if runaway global capitalism makes a lot of Timbuktistani happier and able to live longer lives and fewer Americans unhappier and more short lived the world do overall become a better place.
But people do not work that way, faily, close friends, distant friends, local community, country is more important then distant people. (I care more about close friends then distant people. )
I think globalism or whatever you call it are making the fortunes more evenly distributed around the world. Distributed is the wrong word since it is not a fixed ammount of production capacity etc. It grows and gives among other things the imminent peak oil threath and a toolbox of capacities that can be used to mitigate that problem or used to make it worse.
This is an important viewpoint and I might return to that later. I have as far reached the conclusion that the energy efficiency has not improved as much as has been commonly believed. And much of the improvement is just been a result of energy-intensive investments, not primarily of technology.
This is an important viewpoint and I might return to that later. I have as far reached the conclusion that the energy efficiency has not improved as much as has been commonly believed. And much of the improvement is just been a result of energy-intensive investments, not primarily of technology"
Duncan points out below energy per capita has increased at an average rate of 1.34%year from 1979 to 1999 but the population increased faster than the increase in energy per capita. So per capita, net energy has been declining for some time. Is Duncan incorrect or am I reading it wrong? The poor have just been getting poorer; those with the largest military budgets get richer.
==AC
http://tinyurl.com/dw3jb
"Bottom Line: Although world energy production (E) from 1979 to 1999 increased at an average rate of 1.34%/year, world population (Pop) grew even faster. Thus world energy production per capita (ê) declined at an average rate of 0.33%/year during these same 20 years (Figure 3). See White's Law, top of this section.
Acknowledgments: As far as I know, credit goes to Robert Romer (1985) for being first to publish the peak-period data for world energy production per capita (ê) from 1900 to 1983. He put the peak (correctly!) in 1979, followed by a sharp decline through 1983, the last year of his data. Credit is also due to John Gibbons, et al. (1989) for publishing a graph of ê from 1950 to 1985. Gibbons, et al. put the peak in 1973. But curiously, neither of the above studies made any mention whatever about the importance of the peak and decline of world energy production per capita.
The 1979 peak and decline of world energy production per capita (ê) is shown on page 40 of BP Amoco (2000), www.bpamoco.com/worldenergy
. Have a look."(1) The amount of energy produced every year increased.
(2) The growth RATE (the derivative) of the amount of energy produced is positive. If it declined, the rate would be negative.
(3) Population has increased every year.
(4) Per capita means per person, so you literally divide a number by the population to make it "per capita."
(5) So, divide the energy production rate of increase by the population at each year to get your energy production rate per capita.
(6) As you can see, the energy production rate of increase per capita has decreased over time.
This happens whenever the rate of energy production increase is less than the rate of population increase. Even if the growth rate of energy production were constant, IE peak oil never happens, the per capita production increase would decrease over time if the population grew at a faster rate.
Does that make sense? Did I even answer the question I thought you were asking?
==AC
"It is not true that net energy per capita of the world has been dropping since 1978. I checked the BP energy statistics and world population statistics and got the result that the world energy consumption per capita has risen about 8% since the '70s."
Which if he is correct would in essence disprove the Olduvai Theory...
==AC
http://www.oilcrisis.com/duncan/olduvai2000.htm
http://www.oilcrisis.com/duncan/Olduvai.htm
If you can disprove his thesis I would be amazed!!
==AC
Figure 3. World Energy Production per Capita: 1920-1999
Notes: (1) World average energy production per capita (ê) grew significantly from 1920 to its all-time peak in 1979. (2) Then from its peak in 1979 to 1999, ê declined at an average rate of 0.33%year. This downward trend is the "Olduvai slope", discussed later. (3) The tiny cartoons emphasize that the delivery of electricity to end-users is the sin quo non of the 'modern way of life'. Not hydrocarbons.
Observe the variability of ê in Figure 3. In detail: From 1920 to 1945 ê grew moderately at an average of 0.69%/year. Then from 1945 to 1973 it grew at the torrid pace of 3.45%/year. Next, from 1973 to the all-time peak in 1979, growth slowed to 0.64%/year. But then suddenly - and for the first time in history - ê began a long-term decline extending from 1979 to 1999. This 20-year period is named the "Olduvai slope," the first of the three downside intervals in the "Olduvai schema."
Bottom Line: Although world energy production (E) from 1979 to 1999 increased at an average rate of 1.34%/year, world population (Pop) grew even faster. Thus world energy production per capita (ê) declined at an average rate of 0.33%/year during these same 20 years (Figure 3). See White's Law, top of this section.
Acknowledgments: As far as I know, credit goes to Robert Romer (1985) for being first to publish the peak-period data for world energy production per capita (ê) from 1900 to 1983. He put the peak (correctly!) in 1979, followed by a sharp decline through 1983, the last year of his data. Credit is also due to John Gibbons, et al. (1989) for publishing a graph of ê from 1950 to 1985. Gibbons, et al. put the peak in 1973. But curiously, neither of the above studies made any mention whatever about the importance of the peak and decline of world energy production per capita.
The 1979 peak and decline of world energy production per capita (ê) is shown on page 40 of BP Amoco (2000), www.bpamoco.com/worldenergy. Have a look.
....
Although all primary sources of energy are important, the Olduvai theory postulates that electricity is the quintessence of Industrial Civilization. World energy production per capita increased strongly from 1945 to its all-time peak in 1979. Then from 1979 to 1999 - for the first time in history - it decreased from 1979 to 1999 at a rate of 0.33%/year (the Olduvai 'slope', Figure 4). Next from 2000 to 2011, according to the Olduvai schema, world energy production per capita will decrease by about 0.70%/year (the 'slide'). Then around year 2012 there will be a rash of permanent electrical blackouts - worldwide. These blackouts, along with other factors, will cause energy production per capita by 2030 to fall to 3.32 b/year, the same value it had in 1930. The rate of decline from 2012 to 2030 is 5.44%/year (the Olduvai 'cliff'). Thus, by definition, the duration of Industrial Civilization is less than or equal to 100 years.
==AC
Combine decreasing net energy with White's Law and you can see were we are headed. We can only slow it down for the US by exporting production jobs and stealing resources militarily....
==AC
- Energy being cheap to drive machines.
- People being valuable to control machines.
But recently, these factors have been splitting apart: we've had more machines, but they've been increasingly automated.Do Enlightenment values come from the first factor, or the second? I suspect it's the second. (What did the cotton gin do for Enlightenment values in the U.S. South? It made agricultural labor valuable...)
In which case, regardless of peak oil, the rapid improvement in computers may be taking culture in a direction we won't like.
==AC
Bush - Nazi Dealings Continued Until 1951" - Federal Documents
By John Buchanan and Stacey Michael
from The New Hampshire Gazette Vol. 248, No. 3, November 7, 2003
After the seizures in late 1942 of five U.S. enterprises he managed on behalf of Nazi industrialist Fritz Thyssen, Prescott Bush, the grandfather of President George W. Bush, failed to divest himself of more than a dozen "enemy national" relationships that continued until as late as 1951, newly-discovered U.S. government documents reveal.
http://tinyurl.com/ukdq
+++++++++++++++++++++++++++++++++++++
Profits über Alles! American Corporations and Hitlers
by Jacques R. Pauwels
http://www.historycooperative.org/
The URL of this article is: http://globalresearch.ca/articles/PAW406A.html
------------------------------------------------------------------------------
IN THE UNITED STATES, World War II is generally known as "the good war." In contrast to some of America's admittedly bad wars, such as the near-genocidal Indian Wars and the vicious conflict in Vietnam, World War II is widely celebrated as a "crusade" in which the US fought unreservedly on the side of democracy, freedom, and justice against dictatorship. No wonder President George W. Bush likes to compare his ongoing "war against terrorism" with World War II, suggesting that America is once again involved on the right side in an apocalyptic conflict between good and evil. Wars, however, are never quite as black-and-white as Mr. Bush would have us believe, and this also applies to World War II. America certainly deserves credit for its important contribution to the hard-fought victory that was ultimately achieved by the Allies. But the role of corporate America in the war is hardly synthesized by President Roosevelt's claim that the US was the "arsenal of democracy." When Americans landed in Normandy in June 1944 and captured their first German trucks, they discovered that these vehicles were powered by engines produced by American firms such as Ford and General Motors. 1 Corporate America, it turned out, had also been serving as the arsenal of Nazism.
+++++++++++++++++++++++++
The IBM Link to Auschwitz
Researchers Uncover Records of the Company's Work at Death-Camp Complex
http://tinyurl.com/84mdv
by Edwin Black
October 9th, 2002 4:30 PM
The infamous Auschwitz tattoo began as an IBM number. And now it's been revealed that IBM machines were actually based at the infamous concentration-camp complex.
IBM's extensive technological support for Hitler's conquest of Europe and genocide against the Jews was extensively documented in my book IBM and the Holocaust, published in February 2001. Last March, the Voice broke exclusive new details of a special wartime subsidiary set up in Poland by IBM's New York headquarters, shortly after Hitler's 1939 invasion, to help Germany automate the rape of Poland.
Profits über Alles! American Corporations and Hitlers
by Jacques R. Pauwels
http://globalresearch.ca/articles/PAU406A.html
==AC
Just about everything you have to say makes so much sense, I am inclined to withdraw my comment based only on your disagreement.
However, I do seem to recall a comment by Ianqui or Peakguy that they were finding lots of people at Petrocollapse who didn't know about TOD. Then immediately the comments lurched into a range of topics that seems to match Petrocollapse pretty well. I made a connection, which could well be wrong. With your statistical skills, I am sure you could see if there was any corelation, but I doubt it is worthwhile.
Foe the record, I think you are all doing the right thing in including a range of views and not censoring comments. However, I do think that TOD has built up a great deal of credibility in a fairly broad range of media - which no other peak oil website has. I think this accomplishment should be recognized and valued. There are dozens of loony sites and only one TOD.
I think TOD is uniquely positioned to reach out and convince people who would tune out Die Off or the other "you are f***ed" type sites. I think this accomplishment is based on a lot of hard work and good analysis by the founders and frequent posters. Perhaps I am overly concerned that a few loony comments could damage this reputation. I am always pleased when I see Econbrowser, Kevin Drum or others link to your site and worry that the first thing they will see is the WTC theories.
For the record, you are all doing a great job and have a much better idea than I do on how to handle the dialogue. I did feel compelled to speak up on behalf of what I guess are hundreds of readers who depend on this site for good analysis and recommend it to others.
When you have a website with nearly 1000 members (as we do), it's hard to ensure that the level of dialogue stays high all of the time. The best thing to do is try to steer it back to relevant topics without being a jerk.
I spend a lot of hours working on Peak Oil because the prospect of collapse scares the shit out of me. I do believe that it's a real possiblity, and the probability that I assign to it goes up and down day by day. Some people out there who know nothing of this issue hear just the mention of collapse from me and put me in the apocalypticon camp (without knowing the word, of course).
At TOD, the level of discourse is usually higher, and I would like to expect that it's always higher among the Contributors. However, the use of labels like sheeple and apocalypticon causes me to take writers less seriously. I imagine that I'm not the only who feels this way, so if that's the reaction you want, Ianqui, then "apocalypticon" away.
Maybe because dying Empires operate from these dark corners. To deny what peak oil has done to the US foreign policy since the 70's and deny what a dying Empire will do to control natural resources and its citizens is denying reality.
==AC
appreciate the concerns and viewpoint
raised by AC. I certainly don't see his
concerns as any sort of "lunatic fringe". Can
anyone deny that harsh economic exploitation
is not a fact of life in the world?
That said, it appears the exchange
between AC and Mad Oilman has gotten
inappropriately personal. In particular,
Mad Oilman's involvement in China seems
definitely not an example of exploitation.
Hoping for continued inclusive and peaceful growth in this
forum....
Roy
My point is that TOD should focus on the the quality analysis that it does so well and leave the lunatic fringe stuff to the thousands of others sites where anyone who wants to find it easily can. My suggestion would be not to leave business cards at fringe events and limit posts on them. It seems pretty clear to me there is causality there.
I dispute your point that I am being aggressive. I think I post about one tenth a soften as you do. I would have have even posted this time if you hadn't addressed me aggressively.
I find it odd that you accuse of of censorship in one post then want to stop posting and retract something in the next.
I agree with some of your frequent posts and disagree with others. I still think overall you are a positive part of the dialogue. I don't want to censor you or make you retract anything. Why are you so hostile to me?
for more info on what you can do to change things (instead of hand wringing), i reccommend:
RECLAIM DEMOCRACY!
also, reducing your corporate consumption is a good place to start. buy less, buy local.
Industry is the primay consumer of NG. When gas becomes expensive, they swithc to alternative (cheaper) fuels. Part of doing business.
We are Homo Sapiens, are we not? This stuff (including child labor) does happen on a regular basis, does it not? Don't we engage in wars all the time? Aren't we routinely cruel to each other all the time? Is Google's motto "Don't Be Evil"? -- when they are nothing but? Etc. All we can do is talk about what we can do about the obvious and current fossil fuels shortfalls, don't you think?
But don't you think the "natural gas shortages coming" are a systemic problem of the GLOBAL system?? A system that is merely nothing more than a highly organized method of turning natural resources into garbage on a colossal scale?? The system it's self is the problem, PROFIT.
So should we just sit around and ponder about how cold it's going to be in my living room this year or do we strike the root??
==AC
And these remarks I just made above apply to a large class of people who read (and occasionally post) here at TOD...
Kids need responsiblity, but business should not exploit them.
I guess i just wanted to point out a differnce for some reason.
I do however wonder, is natgas not a standard price thoughout the world, how would moving overseas save energy? I can understand labor costs, but not energy costs... unless it was to like somewhere in the middle east where they do (and should) have cheaper energy.
The US (actually North American) market is high right now as demand has outstripped supply. The shut in gas in the GoM just exacerbates the problem.
Yes, there is LNG but I left it out for this discussion. It will become increasingly more important in the next 5 years for US supply.
I have noticed that many even here in TOD believe that the Chinese comptetitivness is in cheap labor and that the wage costs are main reason of outsourcing manufacture from the US. This is astonishing since the Peak Oil people should know something about the significance of energy in the economy.
Look around. New factories are built in China, not in Haiti where labour costs are far lower than in China. India is not competitive in manufacturing but the wages there are not a bit higher than in China. It is the energy, stupid. China has 94% energy self-sufficiency. They can increase their domestic energy production about 10% a year - mostly by mining more coal. Their coal production is nearly 2 billion tons a year. This is double the production in the US. Compare this with the energy situation in the US. Do you see it now?
==AC
I think we will have weather tomarrow but does it matter how hot/cold it is if we are only guessing about how much stuff (stuff= natural gas)is out there? I'm trying to plan for my future but finding facts and not fition is why I spend a lot of time here at O.D.
<center>
</center>
http://tinyurl.com/e3gkp
NEW YORK - The prewinter buildup of U.S. natural-gas stores has yet to take a big hit from Hurricane Katrina, but that may be about to change.
ADVERTISEMENT
While the storm has knocked out more than 225 billion cubic feet of natural-gas output since hitting the U.S. Gulf Coast, analysts explain that the losses have been nearly offset by a loss of demand caused mainly by the shutdown of gas-intensive petrochemical plants along the Gulf Coast.
The bad news: that demand is coming back on line faster than production, and it is robust enough to weather prices that have doubled in the past two months.
"The overwhelming, vast majority (of lost demand) is due to production capacity being shut in," said Frank Mitsch, a chemical industry analyst at Fulcrum Global Partners. "It's not because gas prices are high."
November natural gas closed Tuesday at $14.224 per million British thermal units, a record high for a front month on the New York Mercantile Exchange and double the price of late July.
According to data provided by authoritative chemical industry observer CMAI Global, about 44 percent of U.S. ethylene cracking capacity was off line on Sept. 30. Those plants primarily use natural gas as a feedstock.
The loss in gas demand caused by the shutdowns would be about 4 billion cubic feet a day, or roughly 28 billion cubic feet a week, according to Kevin Swift, an economist at the American Chemistry Council. That's equal to about half of the lost Gulf output reported by the Minerals Management Service.
According to CMAI Global, over 16 percent of U.S. ethylene cracking capacity is in the process of returning.
"A lot of them are starting up in days," Mitsch said.
Looking at the graph from EIA, the bottom of the 5-year range goes below 1 TCF from about mid-February to early May. If we are unlucky and get anything like the year or years that define the bottom, many will go without NG, for sure. If we get a Winter like 03-04, there will be a few weeks around April 1 where stockpiles would be insufficient.
It seems like there are many factors that weigh toward a slow recovery of production for NG, so I'm siding with AB3 there. Also, I am wondering about our capacity to import LNG. Has this been throttled long-term by the disruptions and damage in the GOM? Any shortfall in LNG imports could only make the stockpile situation worse. If we get a bad but not unlikely winter, we would be looking at explicit rationing, not just the implicit rationing of high prices.
For the past two winters we've used 11.8 TCF for the six months of October through March, so my point was that we're going to have to get through the winter with 1/12 less NG this year. We need a warm winter and some industries to pack it in for cheaper NG in other parts of the world.
Regarding LNG, one of the 4 US ports is in Lake Charles, which means it's probably out of commission, but I can't find any info about it. Does anyone else know?
One of the largest NG processing plants in the US is located in Mont Belvieu, TX. This is just outside easternmost edge of metro Houston, and it was shut down for some time. This closing forced NG well shut-ins all the way to New Mexico, because there was no processing plant.
The reason for the Mont Belvieu location is proximity to the chemical plants of Houston, Port Arthur, Beaumont, Sulfur and Lake Charles. Until the NG plant was back online, and all the pipelines feeding these chemical plants checked out, there could be no restart of the chemical plants. In addition, electricity had to be restored.
Also, offshore NG relies on 'gathering hubs' to funnel products to shore. The same is true of oil. When one of the hubs is damaged, it forces shut-ins on upstream platforms, at individual wellheads. Until the hub is fixed or a new pipeline laid elsewhere, these wells all stay shut-in. Gathering hubs may be owned by one company, but numerous companies meter gas there and sned it in to their consumers. A Chevron hub can easily curtail production from several other companies.
It's like dominoes - you have to go back up the line and fix the problem before you can reset the system.
"And thats all I got to say 'bout that..." - F. Gump
It has appeared to me that the MSM and some posters here haven't understood the problem. The problem is not that we lost the oil or gas, or don't know where it is. The problem is fundamentally a distribution problem. What took years to layout and build was screwed up in a number of hours by storms. Until that physical infrastructure is completely repaired or replaced we will have less capacity. And if it took years the first time around to build I deem it unlikely to be replaced (if that is needed) in 30-60 days.
The oil and gas is still there we just can't access it for awhile. A lot of the oil and gas in the gulf is now the same as oil shale. A lot of it there but it won't do us any good next week. And maybe we won't be able to get to a significant chunk of it for 6 months.
As I understand it, part of the rationale is high costs, and in NZ, restrictions on NG supply to allow more for smaller users.
Sorry to stray off-topic.
Wonder what's going to happen to their military budget now? I'm thinking of moving to the South Pacific so I may wind up voting on this.
New Zealand uses its defence forces for things like peacekeeping in East Timor, and help for weather-stricken Pacific Islands. There are a handful of troops in Afganistan, none in Iraq. Controlling oil resources wouldn't even be considered by a nation of 4 million. The budget gives a flavour of our priorities (in billion of NZ$, = $.70 US:) Pensions, welfare and housing $16bn, universal health coverage 9bn, education 2 bn, defence 1.6bn, police 1bn.
Electricity is 75% renewable (9% geothermal, 66% hydro, 0% nuclear); 97% of oil is imported; NG dwindling fast; good coal reserves and forests for biomass.
Is that law, regulation, an assumption about the political landscape, or an ethical rule of thumb?
Economics is part of it. Businesses tend to pay less per therm, so there can be more marginal money in the same gas (or electricity) sold to smaller users. [Depends on how you calculate overheads and fixed costs, of course.]
And politically, inconveniencing 1 business by cutting their gas supplies can keep many, many constituents warm and eating hot meals. It's not costless, because employment from the gasless business does fall instantly.
If "businesses lose first" is true as a general principle, we should see the same pattern in the Enron electricity shortages in 2000-2001 in California. Anyone know?
I didn't include economic reasons in the list, opps. I like the insight that some firms may have negotiated supply contracts that reduced how reliable the supply was for a discount. For example the natural gas power generators might have done that (who make 20% of New England's power). So firm demand is possibly more elastic; depends somewhat on what their contracts with their stakeholders look like. I, for example, expect that the Alluminum company's labor force was unionized.
I also like the insight that it's easier to turn off a large consumer than it is a million households. Of course the counter point to that is that business is typically more effective at exercising it's political muscle for much the same reason.
Is there such a thing as rolling natural gas black outs?
I'm not sure I buy that historical precident suggests homes get first dibs on the gas. It's a political question; a puzzle about the gas gets divided among political constituencies depending on how they play their chips at the bargining table. Right now business has a lot of chips.
We have torn down almost all the regulatory overlay on these markets, right? Are there any regulatory levels available to federal or state governments; even if they wanted to force gas to flow to other than the highest bidder?
There is an arguement that households would be the highest bidder; since they are the seller's dream: a totally locked in buyer. Very inelastic.
One reason I brought it up. Seems like the dude from Dupont was at the table; negotiating.
Firstly, I don't know the sex of either of these posters, so I'm going to assume they are both male. My apologies if that is an incorrect assumption.
AngryChimp uses data pulled from the Olduvai Theory website as his evidence. TI uses data from British Petroleum as the source of his evidence.
My interst was piqued by their exchange and I decided to settle the dispute myself. I went to the BP website and pulled their statistical data on energy production and consumption. I then pulled world population statistics from the US Census website. I then attempted to perform my own analysis of the data. I encourage all readers of The Oil Drum to do the same. This simple exercise in analysis will sharpen your wits with respect to the usage of statistics.
First, a couple of points about the analysis and the data:
(1) Prior to 1981, the data from the BP statistical extract isn't very useful, as they don't include energy production from all five major flows (ie Oil, Coal, Gas, Nuclear and Hydro) until the year 1981. Attempting to do any sort of relative analysis with this data before that time without all five flows would be pointless.
(2) I assume that hydro and nuclear production equals consumption, as neither of these processes really produce anything besides electricity. One could wave your hands and point out that nuclear reactors produce waste and dams produce dead fish, but I think that's going to be a small input into the global energy balance, so to speak.
Ultimately, I came to the following conclusions:
(1) TI is correct in his assertion that energy production has increased by around 8% over the rough interval from the late 70's to the present day. Since 1981, the total annual energy production has been 9.3%.
(2) AngryChimp is both correct and incorrect, and it's not really his fault. In the rough interval of the late 70's to 1999, energy production per capita per annum did decrease, although from the interval of 1981 to 1999, the per annum change was basically flat with a change of only +0.02% per year. Unfortunately, the data on the Olduvai Theory webpage is rather out of date. Since 1999, there has been a significant increase in both the production of coal and oil, particular coal. This production increase is not reflected in the "world energy production per capita" graph on the Olduvai Hypothesis webpage. Since 1981, energy production per capita has increased at a rate of 0.41 percent per annum.
Some Other Thoughts:
I think this exchange exmplifies some of the dangers that we members of the "Peak Oil Community" need to be aware of whenever we attempt to make claims of any kind regarding the nature of this issue. At this point, our only real asset is our credibility and we need to guard this as zealously as a vestal guards her virginity. This requires that we constantly check our sources for relevancy, our calculations for accuracy and our data for veracity. Our duty to our progeny requires that we whenever we speak, we be as correct as humanly possible. Individuals with an interest in maintaining the status quo will seize upon a percieved lack of credibility in order to discount our concerns without ever needing to actual deal with the issue at hand. We will simply be portrayed as wide eyed "apocolypticons" clutching at the conspiracy theory du jour. We must avoid this at ALL COST.
The Olduvai Hypothesis:
I am somewhat troubled by this material, for a couple of reasons. Firstly, let me state that I recognize that it has value in that it serves as one of many fairly effective "wake-up calls" for individuals who have been previously unaware of the dilema which we as a civilization are currently staring at. That being said, I wish that there were other sources of data that as equally gripping, but less technically dubious. Here are my specific problems with this "hypothesis."
(1) The Olduvai Hypothesis is NOT a scientific theory, and yet it is dressed up and paraded around town as if it were. It is marginally better than "Intelligent Design Theory" in that it can at least be tested, although only once. For a theory to be worthy of the designation "scientific" it must (a) be testable and (b) that test must be unlimited in its repeatability. Olduvai can only be tested once at best, and that test isn't really even a test. Some might argue that it is in some sense analgous to theories related to global warming or some theories in the behavioral sciences, but those people would be wrong. In reality, it is but a pale imitation of a scientific theory when compared to even these more "mushy" scientific theories in that it does not actually provide a concrete (ie definite) prediction that can be subjected to an impartial true/false test. The Olduvai Hypothesis is, I think, a philosophical theory and as long as it is CLEARLY presented as such, I have no problem with it. Again, this gets back to the issue of credibility.
(2) The assumptions, data sources and calculations performed by the author are not clearly stated. It is very difficult to discuss the accuracy of any subject if you cannot reference someone's source material or the assumptions that they made while processing their data. If the author really wants to be taken seriously, he should give more weight to a technical discussion and less weight to cute graphics and weighty statements by other individuals.
(3) Has this material been peer reviewed by people competent to review it? Perhaps it has, but if so it isn't stated directly. I know this may seem like a minor elitist quibble, but it's really not. Off the top of my head, I can think of a couple of modifications to his philosophical theory that might be made that would change it to not logically result in the catapulting of humanity back to the pre-historic era. A large part of peer review simply involves other individuals technically proficient with the material throwing out alternatives to the theory in question as well as modifications to it, with the author (or others interested in the subject) subsequently dealing with those alternatives.
Also, I should state that I'm probably not as versed in this work as I should be when making statements like the ones above. If anyone has any factual answers to the above concerns, please let me know via email.
Anyhow, long comment. If you're interested in seeing my analysis of the BP data, email me at heliumiiv at hotmail dot com and I'll send you a copy of the excel spreadsheet.
The data is now going through a scientific review board before being published in The Social Contract, winter 2005.
I do not have the time to crunch the numbers again right now. No offence, but I don't know what you know of Duncan but this stuff is his life. I would be shocked if he is wrong with his data on net energy.
==AC
I suppose what I'm mostly opposed to is that in the end, his hypothesis just isn't very useful or interesting. I could just as easily hypothesize (with a fair chance of being right) that sometime in the next billion years, two nearbye neutron stars are going to collide and irradiate to death a large number of the multi-cellular organisms on the planet. The picture that Duncan paints is so bleak and hopeless that I think it does the Peak Oil community a dis-service. It encourages people to simply throw up their hands, not care about our descendants and just live the good life until we all get tossed back into caves and animal skins by the inevitability of the Olduvai Hypothesis.
Maybe you see it differently . . .
This could be why so many people dismiss things that are just too scary to accept. For example, the Plutocracy that is American actually played an active role in carrying out the events on 9/11. Just to dark to accept isn't it...
BTW
I emailed Richard Duncan to see what he says about the data. I'll let you know if I get a response.
==AC
"America's withdrawal from the world or because of the sudden emergence of a successful rival - would produce massive international instability. It would prompt global anarchy." (p. 30)
"In that context, how America 'manages' Eurasia is critical. Eurasia is the globe's largest continent and is geopolitically axial. A power that dominates Eurasia would control two of the world's three most advanced and economically productive regions. A mere glance at the map also suggests that control over Eurasia would almost automatically entail Africa's subordination, rendering the Western Hemisphere and Oceania geopolitically peripheral to the world's central continent. About 75 per cent of the world's people live in Eurasia, and most of the world's physical wealth is there as well, both in its enterprises and underneath its soil. Eurasia accounts for 60 per cent of the world's GNP and about three-fourths of the world's known energy resources." (p.31)
"Moreover, as America becomes an increasingly multi-cultural society, it may find it more difficult to fashion a consensus on foreign policy issues, except in the circumstance of a truly massive and widely perceived direct external threat." (p. 211)
Zbigniew Brzezinski THE GRAND CHESSBOARD - American Primacy And It's Geostrategic Imperatives," Zbigniew Brzezinski, Basic Books, 1997.
==AC
Could you email me the data you used at:
glitchmaster_@
Hot Mail . Com
I'll forward that to Richard also.
Thanks,
==AC
The amount of extractable solar energy is thousands of times greater than all the fossil fuels that have ever existed. If fuel companies would invest in renewables instead of poking holes in the ground the future of Planet Earth would be very bright. It is only a matter of time until business and government will realize that renewables will be needed in greater and greater amounts for economic growth to continue.
This may interest you:
http://tinyurl.com/83lx4
==AC
Also, while it's true that there is a huge amount of solar energy that could potentially be extracted, I think you're vastly underestimating the amount of energy that it would take to get to that point.
Hmmmm . . . that makes me think of another energy balance I could do . . .
Some observations: I agree the Olduvai Hypothesis is not a theory per se, it's an empirical description. It tells what is happening, not why. (The only "why" I can derive is the tautological insight that when population is increasing faster than energy, per capita measures go down.) Nonetheless, I like the hypothesis. Reframing what is happening in a new metric (energy per capita rather than total BTU's) can help us understand implications we would not see otherwise.
My biggest concern with Olduvai is that it is an average of all energy across all of humanity. As such, it conceals many important trends, and probably leads to incorrect conclusions. I bet if we did separate analyses for different groups of people since 1981, we'd find many groups whose annual per capita increase is far more than 0.41%, and other groups whose energy use fell. Even then, we could analyse further among the reduced energy group, with different outcomes--some energy declines would be due to privation among the poor, but others due to conservation or voluntary simplicity efforts by the well-off.
To put this in another context, I see M. King Hubbert's work as fantastically valuable, but having very similar philosophy of science issues to Olduvai. Peak oil isn't really a theory, it's a description. Deffeyes believes that Hubbert simply worked until he had enough data to fit his curves, and fine-tuned his ideas to line up with the empirical results. Lots of scientists do.
I agree that guarding TOD credibility is very important. Thanks for your efforts. As for analogies, I like the fact that Vesta was the goddess of the hearth, and had an everburning flame in her temple. Perfect for TOD. However, her handmaidens may have been "virgins" rather than virgins. There is some opinion they didn't guard anything too zealously ...
I'm glad you agree with me. I wasn't entirely sure if I was talking out of my ass or not.
This sort of relates to one of my problems with Duncan's work. In my opinion, he buries his assumptions within the theory and never directly trots them out for analysis. This is a huge error in that it upsets people like me who like to be able to quibble about things like assumptions.
There are two assumptions that he seems to make (and it's hard to tell since he never directly states them) that are critical to his hypothesis. The first is that there is a finite amount of stored energy on Earth that can be extracted for industrial purposes, and once that energy is gone, the fuel tank is dry so to speak. I'm not convinced that assumption is accurate.
The other assumption he makes, which is directly dependant on the first assumption being true, is that the shape of the peak on the graph of energy production per capita vs. time actually means something. Essentially, one is expected to look at that graph and say "OH MY GOD!! LOOK HOW NARROW THAT PEAK IS!!! WE'RE ALL DOOOOOOOOOMMMMMEEEEEDDDDDDDD!!!!!" But, if I snapped my fingers and made the supply of energy 1000 times larger, or the population a 1000 times less, the peak would get correspondingly more broad. But if I then simply increased the total range of the time axis by a thousand times, suddenly we're back to the narrow peak and all doomed.
I agree. I think it's a fantastic starting point in terms of a thought experiment one could engage in with Peak Oil "newbies" to spark discussion. I don't think one should use any concrete numbers or attempt to make any real predictions though, as that leads us back into the "proof trap."
I completely agree. I also think he discounts the existence of feed back loops between energy usage and energy supply growth, the development of newer energy sources and a host of other things. Again, this is why the lack of assumptions and the existence of dubious calculations that may or may not mean something is so problematic.
Interesting point. I hadn't actually thought about that. My inclination is that Hubbert's work is much more testable than Duncan's, but in the end I think you have a good point. The theory, or hypothesis, or whatever it is doesn't have any value beyond use as a thought experiemnt that can be utilized in order to get people to understand why they should be concerned. I think that's why I find myself occasionally getting frustrated with the Peak Oil community. A lot of us are on the same page with respect to the existence of a problem, but the next logical step to take in terms of developing possible solutions for the problem doesn't seem to be happening on any significant level.
Interesting. I didn't know that. But yeah, it is a good analogy with respect to keeping the "flame" burning. Of course, I like to think about it in terms of the "flame" of civilization. We've (as a species) worked to damn hard to get where we are to simply lose it all to apathy and fatalism.
Now, there is more in this. It seems that the BP numbers include oil, natural gas, coal, nuclear and hydro, but not biomass. It might be that also the biomass use has increased. Most of the poorest people in the developing world use biomass as the most important fuel source. This may seem small but the margins here are quite small and it is not insignificant for those 2+ billion people that were born after 1980.
But I was primarily interested in factors behind the world GDP growth. Here we should count in all energy factors contributing the GDP. Biomass too. And manual labor and animal power (horses, oxen used in farming etc.). Remember, these are important for the 5 billion people living and working in the poorer world. There are now about 2 billion more people in the global workforce than in 1980. This should be counted in. How much is it? One source gave the manpower value of 175 W. 8 hours will make 1.4 kWh. 2 billion x 1.4 kWh * 200 days gives 560 000 MWh. This is not much.
But we are interested in the energy input effect on GDP. We could make another kind of calculation. A Tanzanian carries 100 pounds of farm products to market 10 miles away. This makes 20 miles a day. An American in SUV makes the trip to WalMart with 1 gallon of gasoline. The Tanzanian did the same job so his effective energy input is equivalent of 1 gallon of gasoline. This means 2 billion x 1 gallon x 200 days = 400 000 million gallons. This makes 26 million bpd of oil! This is about 30% of the world oil consumption. If we count this in the world energy consumption it will be 10 - 15 % higher. Add to this the horses and oxen substituting tractors and their fuel.
At least we could say that the laborers of world do a lot to conserve world fossile fuel reserves. And there are billions of them. From this viewpoint we see that the world GDP increase is mostly the result of increased energy and labor input. That is why I could comment that technology effect could be lower than is commonly assumed.
In broad terms, all notable population increase is in non-industrialised nations, such as those of Africa and the Middle East (exempt oil industry from industrialisation). Big families in communal homes (say 12 in middle east) share the same lightbulbs at 2 in the family as at 12. Yes, a larger pot with more in it takes more cooking time. Is that more 'inefficient'?
Populations in Eurasia (apart from China) and even USA (exempt illegal immigrants) are more or less low or stable. Better to measure the per capita energy use here, as little walking, little cycling, little manual labor, is done. The answer will doubtless be a big yawn, telling us we are the most oil and gas dependant peoples on earth.
In densely populated African areas oil and its products pays no huge part in the local economy beyond kerosine for cooking. Does it mean they are 'inefficient' for using so little fossil/hydro/nuclear energy in an expanding population? In fact, human energy and 'leveraged' wheel energy has also expanded greatly.
But energy production in 'personal transport substitutes' such as bicycles is not measured as an increase in 'production' of energy.
Other energy sources are also not measured. Crop yield per hectare has expanded - India has become self sufficient in rice, and Thailand exports it, for example - and this captured solar energy is not measured.
The 'Olduvai Theory' seems a slightly hysterical and incomplete analysis with little predictive power.
The "Olduvai theory" is plausible but it is clear that it will take a very long time - may be hundreds of years - to realize. In the end there will be no fossile fuels available - there will be a lot left in the ground but no means to use them any more. Then the situation will be worse than before the industrial age: no easily available mineral and raw materials left. But people can use for instance the metal scrap left over from the preceding fossile age. Only after all this is gone - and it takes a long time - will we reach the Olduvai stage. At that stage there are no means to maintain the technical basis for modern renewables - even the wind mills cannot be maintained, no solar panels can be replaced. To be exact it is not plausible that the humankind will return to the Olduvai stage. The later stone age lifestyle is sustainable - we are not running out of stones. It is in fact a very stable economic system. It lasted at least 50 000 years. It means that there will be a lot less people in the world then but they will live a very sustainable life. And some of the accumulated knowledge can be used. The idea is not so bad after all.
Fusion power could help but only if it comes soon enough. If it takes too long it will no longer be possible to realize it. It doesn't help if we have all the technology in the books - if there is no way to use it. But luckily all this would take really long and no one us will see it.
The "Olduvai theory" is plausible but it is clear that it will take a very long time - may be hundreds of years - to realize.
You are quite the optimist TI. Power grids are beginning to fail all over the globe. Richard Duncan is an engineer that worked with the EMS systems his entire life. Maybe his input bears a tad more weight than the couple of hundred years that you toss out. You must have alot of faith in humanity if you think 6.5 billion people are going to go happily into permanent energy decline...
==AC