The water is still rising
Posted by Heading Out on August 30, 2005 - 9:06am
With this level of devastation, predictions of short-term resolution are becoming increasingly unrealistic. With the LOOP unavailable and the distribution networks also closed, the impact on gas will slowly spread throughout the country. We highlighted the problems of gas supply in South Florida, because this is already being discussed, and they are heavily dependant on the refineries around New Orleans, but the same holds true in the Midwest in general.
Until an hour ago the Times Picayune was the best source of information but the rising water has driven them, from their building, though the site is still up, but under heavy traffic. (Thanks Stuart).
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http://www.wwltv.com/perl/common/video/wmPlayer.pl?title=www.wwltv.com/082905mayor.wmv
I just saw on CNN that the president is ending his vacation two days early. How nice of him to come back to the office...
You all have probably seen this. I'd like to offer a possibility of something that may happen.
If it really does get to lake level, does an argument start to grow about whether or not New Orleans is simply abandoned? At what point does the cost of rebuilding outweigh the cost of leaving the city be. It seems farfetched for me to say it, but it's something I've been thinking about for a while.
http://library.thinkquest.org/17749/earthquake.html
Frankly, this is a classic case of a situation that can't be judged purely on economic terms. How do you tell an entire city of that size, and particularly one with that much history and unique culture, that their city has been declared dead because the dollar cost to rebuild it is too great? I honestly don't think I could do it, at any price.
You'd have to have substantially more destruction to warrant abandoning the whole city. No matter how bad the destruction is now, there's still lots of value there. Bad joke, but the "sunk costs" of an American city are HUGE. All the roads, for example. The sewers, power grid, pumping stations, and the buildings that will survive with only moderate-to-light damage. Some infrastructure will be damaged, but much of it can be repaired for much less than replacement cost. Ditto for housing and businesses. Wood frame houses will be destroyed by flooding but many other structures may need only a long hose, some new drywall, and electrical and plumbing repairs.
There's over 600,000 people in the NO area - they can't all leave. And although the flooding will hit the old center of the city hardest, look on Google Earth - the suburbs of NO extend outward quite a distance, and those on the south side of the river or farther west will escape with little damage beyond that done directly by the hurricane (and direct hurricane damage is a risk no matter where you are on the Gulf Coast).
In any event, lots of folks will probably decide to move away, even if only a short distance up-river or to higher elevations. For those that stay, the costs will rise, both emotionally due to continued anxiety and loss, and economically due to increased flood-control and emergency contingency costs - like LOTS more shelters - and falling property values.
It would, however, make sense to divert all or part of the Mississippi River into a new path away from the urban area and reduce the overall threat the city faces. That would require LOTS of new or moved infrastructure, but still less than moving the entire city.
NO faces threats from both the Miss. River and the lake, on opposite sides. The levees along the River are actually higher than the levees on the lake. If the threat from Miss. River floods was removed (or substantially reduced) more resources would be available to deal with the lake.
I'm sorry to be a little brash and I'm probably sounding insensitive here but the mainstream media coverage is very extensive anyway. I thought the main purpose of this site was to discuss issues related to peak oil.
While some production and refining capacity was definitely affected by the storm, the overall impoact of this catastrophe on the issue of peak oil and sustainable development is insignificant... unless of course one presumes that New Orleans is going to be rebuilt in an environmentally sutstainable way. Something I'm not holding my breath for.
The storm brings peak oil into our economy right now rather than some time in the future.
The United States has just lost between 1 and 2 mbd of oil supply for an indefinite period. For parts of the country, such as South Florida, this may mean that there will be significantly less gas and other fuel available, relatively soon, than is needed for the existing economy. This is very much a related issue to our underlying theme. What we, and those who are posting to this site are contributing toward, is an overall understanding of the current situation and how it will affect supplies, since this will model the reality of what might happen with the onset of Peak Oil, which this may presage.
And while we do retain our focus, there is much to learn about what is happening now, and in understanding what is going on. We are grateful for the information we are being sent, and are trying to pass it on in a useful format.
I like to think of the bell shaped peak oil graph an abstract concept and in the real world we are unlikely to see such a uniform decline. What I believe is more likely is a tipping point from which we have demand destruction and as we recover from the economic downturn oil supply might well have started to decline.
(a) the consequences could be enormous through the end of this calandar year at a minimum;
(b) it's hard for most to concentrate on much else when an entire metropolitan area--that happens to be a center of the energy sector--is in the process of getting washed off the face of the map; and
(c) if P.O. was to be 2005/06, this may very well be the kick-off of the crunch ahead.
Oh, and yes your comment is rather insensitive given the number of readers (such as myself) with connections to this city.
to discuss that are more oil focused.
i would love to know more about the platforms and refineries in
the area. where they are and what their production capacity is.
(sorry if you all have covered this already)
also could someone post some links that give more detail about
demand?
demand is the key for me and I really don't see peak oil
being rational problem because (as prices rise) the poor people
of the world will not have the money to buy the oil while the
rich will still be using it. and the global production rate will
be above 75mbd for the next 10 years even if we hit hubberts production
peak today.
there could be emotional problems where consumers freak out and
horde gasoline or investors freak out and crash the stock market
but that is nothing new.
i caught the tail end of a special on bloombery tv about the
'robust demand' but i would like to know some other opinions
thanks
as of last week, the EIA reported USA Gasoline Stocks at 194.9mb (million barrels). this is after a 3.2mb draw down.
how long will it be before USA starts rationing?
the SPR is full and stands at 700mb. but it's 2/3 heavy sour which we don't have the capacity to refine. so this means it's only 1/3 light sweet ~ 200mb.
we are down 1-1.5mb crude oil production daily. we have lost oil import capacity due to LOOP outage, which accounts for ~15%(correct if i'm wrong) of US oil imports. the US imports 60% of 20mb (daily consumption). 20mb x 0.6 x .15 = 1.8mb. so really, we are out apprx 2.8-4.1mb of crude oil and that is HUGE!
US gas demand, as of last week, stood at 8.623mbd.
analysis anyone?
the US has refinery capacity for heavy sour oil. however, that capacity pales in comparison to the US's refining capacity for light sweet...
I'll make a bet that many of the National Guard troops in the NO area failed to show up, they probally got out before the storm came and before they were alerted.
I read the state of LA, is in debt already and this will big time enlarge that ..Certainly the Fed will bail them out.
I was in NO a few yrs back. From what I seen on the various web sites I think it best to abandon the city. For the reason as many above have stated , future storms, below sea level, already destroyed, too much to fix. Its like this If I had a 20,000 dollar home in a swamp destoryed by a storm do I invest 20,000 more to rebuild it or maybe look for a home in a high dry area for the same money? here's an interesting post I am borrowing from a poster below from PO.com Seems the situation is bad> Burt Coleman
I've been in touch with people who work for the city government and stayed behind. To make a long story short, all hell has broken loose. They are starting to evacuate people to Baton Rouge ASAP because the water from the levee breaks has completely flooded downtown which is right next to the French Quarter. The levee break was about 6-8 miles away from downtown so that means tens of thousands of homes are underwater and potentially thousands of people are dead. To make things worse, the Twin Span bridges have been completely destroyed which is the main interstate 10 link. That means there is no direct route into New Orleans. God help NO.
http://abcnews.go.com/Technology/HurricaneKatrina/wireStory?id=1081033
Rising water, lack of power, water and sewer, etc.
the current high price of oil is a result of the impending peak. As you know, demand has finally grown to exhaust all previously-existing spare capacity (mostly Saudi), and depletion rates mean that new production probably won't keep up. Peak-niks (peakers?) generally regard the coming shortage as a trigger for economic problems and probable recession.
Katrina may cause a large and sustained oil or gasoline price spike, lasting until (or - heavens - beyond) the onset of the winter heating-oil season. If that happens, the US economy will probably slip into recession next year. The housing bubble may likely burst in some over-heated markets, especially in the most-distant suburban or exurban long-distance-commuter areas.
So what of the peak?
- A US recession would sharply reduce US oil and gasoline consumption, reducing oil prices but also pushing the peak some distance into the future.
- Lower oil prices may reduce the push for rapid expansion of drilling in 'frontier oil' regions and the exploitation of other non-conventional sources (tar, shale), preserving those reserves for the future.
- A recession will in effect be a postpone-ment of consumption, giving the global economy time to adjust to rising oil prices by adopting energy conservation measures, both through increased efficiency and through substitution with alternative fuels.
- Recession in the US would have major follow-on effects in the other major oil-consuming economies which until now have been growing solely by exporting to the debt-happy American government and consumer. While they would be hurt by slackening US import demand, lower energy prices (from reduced US demand) would make it easier for countres like China to foster a growing domestic market.
Is that a good answer?---
More generally, though, I see this site as an oil-and-energy-focussed blog-and-comment-forum that examines current events in the context of energy supplies, esp. fossil fuels. Katrina's effects on US energy will be huge, and the already-
Or, as the header of every page of the blog says,
"This community discusses myriad ideas related to Hubbert's Peak/Peak Oil, sustainable development and growth, etc., and the many implications of these ideas on politics, economics, and our daily lives."- Silent E
I think it may be but we'll only know after the fact.
Other comment I wish to point out: recession WILL NOT DECREASE DEMAND.
Only a DEPRESSION will.
Check history and you'll see what I mean. Recessions, aside from the forced demand cut diet of the OPEC oil embargo, merely reduce demand growth, not demand itself.
Recession and depression are two different animals.
Interruptions to oil supply are always going to be a problem, Peak Oil or not. Look what happened in 1979 when the Iran-Iraq war caused interruptions. Oil prices shot up, gas lines, all the manifestations of a shortage that we might expect to see today. Yet we were decades away from Peak Oil. The fact that there was plenty of oil in the ground didn't make any difference.
Looking at the effects of Katrina through Peak Oil glasses presents a misleading view. It is a localized and temporary phenomenon, which may cause inconvenience for all of us. But compared to the hardship and suffering the people in that area are going through, the national and global implications are minor.
If any of you bloggers are as insensitive to the misfortune of others as some who appear in this thread, then I fear we are all in for a very rough time, here in the shadow of the depletion curve...
If the power is out, and no one is draining pools of water or collecting old coke cans that are full of rainwater, then we will have more mosquitos.
This may sound like a minor problem compared to rebuilding New Orleans, and it is, but it is still a problem.
the mosquito issue.
this is my first time on this blog and i am happy to see
so many educated people.
i spent some time on wikipedia and saw that
oil shortage does not always lead to recession
i mean a recession has to do the with emotional spending
of about 200 million people so it is a little silly to
generalize about a possible recession in the USA.
but i can agree with recessions in poor countries that
can't afford the high oil costs. but are we going to see
goverment rationing or price controls or consumers in
lines at the pump?
no. remember when iraq invaded iran? remember the panic
it caused? well it never happened because the ignorant
consumers had no idea and Pres. Regan was defense
spending and tax cutting.
the only wildcard i can see is the goverment not being able
to control a consumer panic. and the consumers of today
are so ignorant and isolated that they should be easy to control.
Meanwhile, looting broke out in New Orleans' Canal Street, the main thoroughfare in the central business district, which was being described as a literal canal this afternoon.
Looters waded through hip-deep water and cleaned out abandoned clothing and jewellery stores, sometimes in full view of passing police officers.
At a Walgreen's drug store in the French Quarter, people were seen running out with baskets and coolers brimming with soft drinks, chips and diapers.
The crowd scattered when a young boy noticed police and screamed: "86! 86!" -- the radio code for police.
One man who had an estimated 10 pairs of jeans in his arms was asked if he was trying to save items from his store.
"No," the man shouted, "that's EVERYBODY'S store."
Another woman dismissed the suggestion that she and her husband were stealing from a Winn-Dixie supermarket as she left with a plastic bag filled with items.
"It's about survival right now," she told AP.
"We got to feed our children. I've got eight grandchildren to feed."
Residents weren't the only people raiding abandoned stores.
Two police officers stood guard outside a drug store on Canal Street as Ritz-Carlton Hotel employees packed large laundry bins full of medication, snack foods and bottled water.
"This is for the sick," Officer Jeff Jacob said.
"We can commandeer whatever we see fit, whatever is necessary to maintain law."
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20050830_hurricane_katrina_050830/?hub=World
Just taking notes ...
This may not seem like too much of a problem however the main issue is pilot lights and unattended gas installations such as heaters and boilers in homes and factories that depend on a constant gas presssure to keep going. If the pressure is allowed to fall then these installations may not restart or restart with an explosion when the gas supply is restored. There is no way in the world that all the gas appliances in the country can be visited to make sure that they restart correctly. This could be a major problem.
Apparently last winter you only just scraped through - how will it be this winter?