Weekend Open Thread...

Simply because it's threadalicious...
Interesting article from USA Today:
http://www.usatoday.com/money/industries/energy/2005-11-24-peak-oil-usat_x.htm


Can oil production satisfy rising demand?
By David J. Lynch, USA TODAY

WASHINGTON -- Energy Secretary Samuel Bodman has asked a high-level advisory board to answer one of the toughest questions dogging the U.S. economy: Can world oil production meet steadily rising demand?

In a previously unreleased Oct. 5 letter to ExxonMobil CEO Lee Raymond, chairman of the National Petroleum Council, Bodman asked for a study of the industry's ability to produce enough oil and natural gas at prices that won't cripple the economy.

"He's asked them to take a big-picture look out several years. ... He wants to get some definitive information," says Craig Stevens, an Energy Department spokesman.

The most noteworthy aspect of Bodman's request is a reference to the "peak oil" debate. At issue: the claim by a vocal minority of energy experts that the world is at, or near, maximum oil production....


[see link for the rest]
Thought for the day. Going the way of the dinosaurs...

It seems to be in our nature to think that bigger is always better which is, perhaps, why we end up consuming resources as fast as we can including oil. But is it? Here's the parable of the dinosaur and the mouse.

The dinosaur said to the mouse. Your nothing. You're not even a snack.
The mouse said that's your problem dinosaur.
And so it was. Which is why we have mice but no dinosaurs.

Of course the survivors of the dinosaurs, the birds, downsized until a mouse became a meal.

And that's the mouse's problem.

In case you haven't seen this:

http://www.wnd.com/news/article.asp?ARTICLE_ID=47529

    WND Exclusive Commentary Is abiotic oil a new argument for Creationism?
Posted: November 22, 2005
1:00 a.m. Eastern

© 2005 WorldNetDaily.com

Craig Smith and I wrote "Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil," without a religious argument in mind. We wanted to present the scientific arguments that oil was a hydrocarbon fuel of abiotic origin, produced deep within the Earth on a constant basis. We wanted to warn America that increased dependence upon foreign oil has serious economic consequences for the strength of the dollar and serious political consequences for reliability of America's national security.

While Craig Smith and I are both Christians who strongly believe in God, we presented in the book no arguments, proof or justifications that derived from or depended upon our religious beliefs.

Recently, "peak-oil" apologists - who support the "Fossil-Fuel" theory of oil's origins - have begun attacking us on the basis that the abiotic theory is really being advanced to support creationist or intelligent design religious beliefs. A forum on the "peak-production" Internet blog TheOilDrum.com recently ran a thread attacking the book. Two posters presented the charge as follows:

    LJR: I'm waiting for the "intelligent design" folks to link up with the "abiotic oil" guys. A marriage made in heaven.

    mikeB: Ab-so-lutely! Which is why I've taken to calling it "oil creationism."

How do I tell my friends I've been quoted by a kook?

Oh this is great.. I guess you've informed your friends here and we appreciate your efforts to debunk their "theory".
Here in NYC, we have a fascinating exhibit on Darwin, which made a direct reference to resource consumption and the physicial limits set by our natural environment. I wrote a summary of my thoughts here

I highly recommend the exhibit to all ages. Darwin's theories are complex and well argued and the implications of those theories continue to challenge us to see ourselves as apart of the natural environment as opposed to above or set apart from that environment.

What's wrong with this analogy by the Natural Gas Vehicle Coalition?? Does the US have a 9 year supply of natural gas or do we have more?? Inquiring minds would like to know.. If we only have a 9 year supply of natural gas reserves, this would have a bigger impact than peak oil, IMHO..


The level of natural gas reserves varies over time - downward when natural gas is consumed and upward when new natural gas reserves are identified. For the past decade, U.S. proven reserves have ranged from 165 to 170 trillion cubic feet (Tcf) -- although, in 2000, reserves increased to 177 Tcf. It is important to note that reserve levels are greater today than they were a decade ago despite the fact that 185 Tcf of gas has been consumed. Some naysayers still point to the fact that the U.S. used approximately 22.5 Tcf of gas in 2000, and argue, therefore, that if we only have 185 Tcf of reserves, we " only have a 8 or 9 years supply of natural gas left."

This is nonsense. It is similar to saying that we only have a 10-day supply of hamburger left. The level of natural gas reserves is critical to ensuring the balance of supply and demand in the very short term, but is irrelevant to any discussion of long-term supply.

http://www.ngvc.org/ngv/ngvc.nsf/bytitle/supplyfactsheet.html

In the graphs previously posted on TOD regarding where our natural gas will be coming from, a large component in the future years is always "to be discovered." And yet I can't find a link to any of the graphics... does anyone who knows where they are want to post a link to one for me? The article implies the argument:

We've been frequently discovering natural gas, so naturally it's safe to assume that we'll always continue to find enough natural gas.

That would be one fault of underlying logic. The other fault would be that it doesn't mention the likely costs to harvest the gas we find. Unless natural gas is an unlimited resource (do the abiotic oil people also believe in abiotic natural gas?), eventually there won't be any to find. Much more relevantly as we continue to drill for gas, the easy and large spots will all have been taken, and either we won't be able to supply enough (too few rigs to drill enough small wells), or it will become too expensive (the industry has to pass on the cost of the new rigs needed to drill more wells per year to keep up).

Natural Gas in North America has peaked. And just like when Texas oil peaked in the early seventies there's increasing drilling activity for natural gas. But all the wells are smaller, so there's less gas produced despite putting more effort into finding it.

Natural gas, just like oil, will not just disappear over night. However it will at the very least become more costly to find more as we harvested the cheapest gas first.

Your observation should be of concern yes, until it is put in context. The US only has a FOUR year supply of oil left. We use 20 million barrels a day which is over 7 billion barrels a year. Our reserves are 29 billion (source BP website). So, the presumption is that we will, as we did with oil, start to import natural gas in a large way. As has been discussed, this is dangerous and difficult but looks increasingly likely. Even more likely is a turn to coal, which the US has plenty of (27% of the worlds total of 22,700 Quadrillion BTUs =5,690 quads.

At 1 trillion barrels of oil left globally - that entire allocation is only 5,205 quads and the entire world natural gas reserves are 6,343 trillion cubic feet which equates to 6,507 quads.

So, the US has rooughly equivalent BTUS stored in its coal as the entire world has in oil or natural gas. Can you say Fischer-Tropsch in a big way? Hello, greenland ice sheet. (and I live in Vermont)

I think the point is that it is much easier to expand the imports of oil than of LNG. Oil can be safely pumped and stored with very primitive equipment that LNG is very difficult to handle and it is very difficult to expand the imports quickly.

Currently the US imports 300 billion cubic feet of natural gas a month (if I read the EIA site correctly) or which only 43 billion is LNG and the rest is by pipeline from Canada and Mexico. (Exports are 55 billion of which 5 billion are LNG - to Japan.)

Now current production is about 1,600 billion cubic feet.  The figures have trended up and down and there is no obvious trend to show that it has peaked greatly, that I can see. This is because, I suppose, you can't store natural gas.

If it is going to start decreasing rapidly, LNG supplies cannot be expanded to make up the short fall, as I see it.

A week or so ago I commented that I was beginning to get the feeling that there might be some sort of curious connection between the proponents of the abiotic theory and fundamentalist Christians. At the time, I thought my comment might have been a bit over the top and perhaps offensive to some. However, it now appears that this connection may be real and not just the product of my over-active imagination.

Something that I have also noticed (and I have no doubts whatsoever about this one) is that hardcore fundamentalist Christians for the most part dismiss global warming and believe that concerns over environmental problems are nothing more than propaganda by godless leftists.

As I have said before, the True Believer is largely immune to facts.

I think it's more complicated than this.  Check out www.whatwouldjesusdrive.org/ for an evangelical group that's getting it right.
Fundamentalist Christians have to explain why most of the oil is in muslim countries. If it is God's gift, why does it go to muslims? :-)
Actually if you through the history most of the oil was in Christian countries like USA, UK, Germany, Russia etc... But maybe because God loves us more, He let us use it up firstly :)
Has anyone ever heard of OPTI Canada, Inc.?

They claim to have a "proven, patented and low-cost way to upgrade bitumen without using natural gas."  If true, wouldn't they be a great investment?  They're publicly traded on the Toronto Stock Exchange.

Their website, opticanada.com, says that they're developing an oil sands project in a 50/50 joint venture with Nexen.

To me, the drawbacks are:  first, they're a start-up which isn't operating yet.  There's a lot of construction still to go, so they could have big cost overruns.  Second, they need to raise more money to provide their share of the construction costs.  Thus, current shareholders could get diluted if new investors got better terms.

The process, called OrCrude is covered in the excellant report 'Canada's Oil Sands Resources and Its Future Impact on Global Oil Supply' by Bengt Söderbergh written under the supervision of Professor Kjell Aleklett, President of ASPO and is available at the ASPO websiteand also also in more detail here

Basically they are getting the hydrogen needed using some of the heavier fractions of the tar, some to burn to give the required energy input, some to react with water to give syngas for the hydrocracking of the lighter fractions.

This lowers the yield and increases the cabon dioxide emitted per unit of sythetic crude produced but does eliminate the need for natural gas and does not produce the solid carbon produced by coking, the processes that raise the hydrogen/carbon ratio by removing carbon rather than adding hydrogen.

Yesterday's Los Angeles Times had an article about how Venezuela's skilled oil workers have fled the country:  

http://www.latimes.com/business/la-fi-venoil25nov25,1,1954579.story?ctrack=1&cset=true

One article about Sect. Bodman of DOE suggests that Peak Oilers are a "vocal minority" in the oil community.

Is that true?
Is PO a "minority" view?
Do more than 60% of oil experts believe we have decades to go before hitting peak if ever?

I've always taken "vocal minority" to be a dismissive phrase. Too bad everything's got to have a little label attached to it.
It is dismissive, but I prefer to think of us as Margaret Mead spoke of vocal minorities.

"Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has."
Margaret Mead
US anthropologist & popularizer of anthropology (1901 - 1978)

Being my cynical self and reading between the lines, this appears to be an attempt by Bodman is to quash the whole idea of PO. The IEA had a go a few weeks and now it's the DOE's turn.

It won't stop the geology but it will stop the scrutiny. High prices will be blamed on speculation and above ground concerns as to supply. Irrational fears etc. Noisy PO minorities  etc. We have heard them all before.

Can we really expect the Exxon Mobil chief to say yes PO its real and it will affect us all profoundly?

The term vocal minority says it all.

I expect this will be one of many battles we will have to fight. Expect the full weight of the oil industry and the USGS and fellow travellers to be used, to muddy the waters and smear all in sight.

To me indicates one thing its game on and peak oil is real and is beginning to cause angst to the elites.

DOE Secretary Bodman's calling upon the oil industry for a study of the 'big picture several years out' is a classic example of a CYA non-study in which the real purpose of the study is to get the oil industry to go on record that things will be a bit tight but more or less OK.

 He knows the oil people can't say otherwise, lest they damage the value of their own stock. And he knows that if things go south in a bad way, he can always fall back and say, "Well, it's not my fault, because those bad oil people lied to me and said everything was going to be OK!"

It is also good PR, in that it helps demonstrate that our rulers are 'Doing Something.'  This is an exercise in producing fluff and consuming fluff.

Just a thought on the abiotic theory^H^Hlogy? --

The NAS paper mentioned an experiment (pnas.org) in which marble chips, ferrous oxide and some water were squeezed and heated, yielding a small amount of some hydrocarbon. Isn't marble ... or calcium carbonate generally, the product of biology? At least here on Earth?

And, even if supergiant fields (wikipedia) are waiting to be discovered, given this (reuters) kind of news, do we really want to keep exponentially increasing our carbon-burning activities?

I am familiar with the experiment you cite, and have commented on it several weeks ago.  It was done under high temperature and extremely high pressure. If the experiment and the associated chemical analytical work were done correctly, the results are intriguing. Mind you, those results in and of themselves don't prove abiotic oil, but neither should they be ignored. It is important to keep an open mind.

One thing to bear in mind is that even if oil has an abiotic origin, one is still faced with the very real problem of how, where, and how fast it migrates to the surface and whether we can get at it.  It will do us absolutely no good if this abiotic oil starts appearing at shallow depths a million or so years from now.

By the way, calcium carbonate can have both a biological and non-biological origin.  However, the vast majority of calcium carbonate is non-biological.

There's a good article by Jerome a Paris over at the Daily Kos in which he ends with the quote, "Let's stop worrying about energy supply, and worry instead about energy demand ". He almost gets it right here but he should have taken it a little further and defined what is really at stake and that would be
capitalism as we know it.
Cary - there are definitely two sides to the Peak Oil story - supply (technical) and demand (human driven). At its heart, the latter gets down to Jay Hanson-esque synopsis of our genetic drive for more. The key will be if we can 'feel' as if we have more but really dont. Currently, the average american doesnt get a dopamine rush from having the biggest sweet potatoes on the block but that is the direction we must head. "I am more sutanable than you", etc. Capitalism is nothing more than the combination of human nature and ginormous energy subisdy.
FYI: Matt Savinar over at lifeaftertheoilcrash.net has referenced what looks like a really good book-length study of limits on energy and other physical resources that came out in the mid-80s.  Glancing through it, it is reminiscent of William Catton's classic work OVERSHOOT, and of a similar level of quality:

http://www.bu.edu/cees/research/publications/beyond_oil/beyond_oil_contents/contents.html

In my opinion, older books like this one and Catton's - and also the Club of Rome study LIMITS TO GROWTH from the early 70s - are very useful in that they allow one to test the fundamental veracity of relatively recent peak oil predictions against longer range predictions emanating from the same basic set of assumptions.  In other words:  If longer range prophets going back 20-35 years were on the mark at least to a first order of approximation, there is then that much more reason to subscribe to the accuracy of more recent predictions - which may themselves then even be accounted correct to a second- and third-order of approximation, owing to refinements of methodologies, improved and more accurate data, etc.  But their fundamental utility hinges on the accuracy of their basic assumptions, which older studies help corroborate.

 
  Sasquach has it nailed.Until you change the paradigm
 that is used to judge worth in a society,a society is
  almost impossible to change.

    Remember Jimmy Carter? We had the type of leadership      
   that would have made peak a non-entity,had his program  
   been followed.

   Peak is going to hurt alot more due to our haveing followed the path of empire.I dont know how we now can change the culture at this point without major disrution and pain.I come into contact with many folks in my line of work.I speak the truth about peak oil,Tell the lists of sites,and try to raise public awareness,as much as I can.I even gave a presentation to the state legislature.{used the peakoil audiovisual from drydipstick}

    I now know how Cassandra felt....

    The only way out of this consumer consumption nightmare
  is for it to become "fashion" to consume less,as well as treating efficiency as the be all and end all of design criteria...This,in itself can drive some of the  change we will have to make.My only fear is that the powers that be have decided that the same sort of societal change that they initiated in Iraq would work here...and let"the market" design our new society,without such amenities as social security,worker safety ,and a whole bunch of other safety nets that have created our current lifestyle

   

well said snuffy!!

in the end I think nature and human nature will sort it all out, but it won't be pretty IMHO.  I view the rampant consumption in the U.S.  and elsewhere as a form of self medication.   Humans desperately trying to feed their soul through material consumption.  Trying to nullify the pain that comes from being separated from natural world we come from.   We perpetuate our psychosis  believing that more stuff, new stuff will fill the that empty place in our hearts and souls.  If only we could simple waking up and smelling the roses.......

Found this, from Hubbert testifying with regards to the
National Energy Conservation Policy Act of 1974, Hearings before the Subcommittee on the Environment of the committee on Interior and Insular Affairs House of Representatives. June 6, 1974.

At the time M. King Hubbert, was with the U.S. Geological Survey, Department Of The Interior.
M. King Hubbert on the Nature of Growth

By the way, it is a good time for us to review Al Bartlett's simple and excellent explanation of what unsustainable exponential growth is all about (ram file warning). Here's a quote--

"The greatest shortcoming of the human race is our inability to understand the exponential function".

enjoy, Dave
Articles like this bring to mind our discussion on whether WalMart would prosper post-peak:

The official holiday shopping season appears to have gotten off to a luke warm start, according to results announced Saturday by a national research group that monitors retail sales. Wal-Mart Stores Inc. was one bright spot in the crowd, reporting its sales exceeded expectations.

http://www.mercurynews.com/mld/mercurynews/business/13264089.htm

I and several others have reviewed WalMart: The High Cost of Low Price here:

http://www.imdb.com/title/tt0473107/usercomments

What does this chart mean?  It shows the blue OIH (Oil Services ETF, a large component of which is the drillers) now outpacing the red XLE (the Energy SPDR ETF, which mainly includes the oil producers, eg. Exxon, Chevron, etc).  For the most part of 2005, the producers lead or matched the drillers in terms of stock appreciation, but they are now lagging the drillers.

My interpretation is that the money has decided that for the coming winter, we have enough crude oil and gas in the pipeline to see us through, but there will be no rest for the drillers.  Indeed when you contemplate the coming push for coal bed methane there will be no rest for the drillers for decades, since so many holes need to be drilled to tap this resource. Want to get rich? Invent a driiling rig to emulate a sewing machine.

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2005/November/business_November60 6.xml&section=business&col=

Khaleej Times

"New Technologies May Unlock More Oil" - in places such as Kuwait.

DOHA -- Recently developed technologies will help find and extract more crude from the Middle East, the world's richest-oil region, according to oil ministers and executives.
In an interview with Dow Jones Newswires at an oil technology conference here, Royal Dutch Shell PLC  Executive Director Malcolm Brinded said he is seeing "more usage of advanced technologies in the region than is very often recognised."
If their use gets extended it will mean in the "long term, more supply, no doubt about it," through "more exploration success and more recovery from existing fields," he said.
"Raising average conventional oil recovery from 35 per cent to 45 per cent" by using new techniques in the Middle East and around the world "could add some 20 years of current production," Brinded said during an earlier speech at the conference.

TOD bloggers may wish to look at this article and see what they think.

From the corporation that brought you the unexpected oil crash in Oman using modern technology?!!
This is big news.

From the EIA.

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

There has been much speculation about the year-on-year decreases in weekly petroleum demand data in the weeks following the production shut-ins and subsequent price increases accompanying Hurricanes Katrina, Rita, and Wilma. Total petroleum products supplied for the 4 weeks ending September 30, 2005 were 19,940 thousand barrels per day, almost three percent lower than the same four-week average last year.

However, EIA has cautioned that weekly data may have overstated somewhat the degree of decline in product supplied, due to its preliminary nature and reporting difficulties experienced by some respondents. In fact, it is not uncommon for EIA's monthly petroleum data to show higher demand levels than estimated from weekly data.

So, what do the latest monthly data tell us about current oil market conditions? For gasoline, it indicates that demand did not drop as much due to high prices as preliminary data may have suggested, and with weekly data now showing some growth compared to last year, it confirms EIA's expectations that gasoline demand is still growing relative to year-ago levels, albeit by less than previous trend rates.

<<<<<< SNIP

No real demand destruction at $3.00 a gallon makes one wonder what price it is going to take.

Another interesting thing is the difference between the monthly and weekly data.

Sounds like just another tactic to 'talk down' the markets!
I was at my parents over the Thanksgiving holiday, and while we're all a bunch of rotten liberals, a long time family friend was also there.  This is a gentleman is in finance and has owned several companies, one of which I worked for quite some time.  He is a conservative and he's done quite well for himself, but a fair man who took good care of his employees.  I had not talked to him in about a year.  The conversation turned to his interest in installing a PV system, and from there to PO and GW.  He was well versed on the topics.  He believes that there is a lot of money pouring into alternatives.  He had no use for the present administration or their policies.  I think perhaps he underestimates the amount of energy we'll need, and the size of the infrastructure problem, but these conclusions can be arrived at as long as the conversation can happen.  And I think that was the most heartening thing that I took from what ended up being a long discussion about some serious and scary topics - there are people who know what's happening, and believe these to be very real problems.  This understanding is not confined to liberals or conservatives (although we probably look at it differently), and there is a possibility for a real national dialog to happen.  The question is will there be time, and what can we realistically do?
peakearl mentioned earlier ....."unexpected oil crash in Oman using modern technology?!!"

Something I have pondered is: Is it possible that with new techology that we may better understand that we don't actually have the reserves that we think we have? Because I have read that new technology doesn't always mean more production or discovery.  

Which leads me to my second question. Proven reserves. How are they actually proven? Are the reserves proven in a several different ways? Are the reserves  more of an approximation?  With a tolerance of say plus or minus 100,000. Please explain in layman terms so that those visiting can understand.  

Bubba covered that a few weeks back.
i clicked the link, and got "permission denied". I would be interested in getting hold of it though. thanks.......
In the upper right column, locate Search the Oil Drum. Enter "proved reserves" and click Search. That will take you to Bubba's post. I got the same Permission denied. But if you go via the search path, it lets you in. Odd.