The Oil Drum | Open thread for a little bit

Open thread for a little bit

Posted by Yankee on September 9, 2005 - 9:49am
Topic: Miscellaneous

Start of the academic year sure is hectic! Chat amongst yourselves—we'll be back soon!

21 comments on Open thread for a little bit

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Glenn on September 9, 2005 - 9:57am

Small victory in NYC - we are going to have hybrid taxis.

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MikeCapone on September 9, 2005 - 9:58am

This is a bit indirectly linked to peak oil, but I'd like to plug my recent post about small fuel efficient Japanese cars that are coming to North-America in the coming months:

http://www.treehugger.com/files/2005/09/small_japanese.php

Of course walking, biking and public transportation are preferable, but at least soon Nort-Americans will have some decent small-car choices..

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Halfin on September 9, 2005 - 10:23am

From the Los Angeles Times:

Demand for Fuel Seems to Be Falling

The Energy Department issues weekly reports on gasoline demand and supplies, and many analysts expected its newest report Thursday to show a surge in demand during the four days after Katrina's devastation, reflecting the panic buying.
Yet the agency's statistics arm, the Energy Information Administration, reported Thursday that in the week ended Sept. 2, gasoline demand fell 4% from the previous week to 9.03 million barrels a day.
The Energy Information Administration also said that for the four weeks ended Sept. 2, demand inched up only 0.1% from a year earlier to 9.33 million barrels a day, an increase well below the 1.2% to 1.6% year-over-year gains reported in late August.

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mw on September 9, 2005 - 12:46pm

Gasoline demand had lower growth, but it was still growth. That may change over next few weeks (its a 4 week average after all).

Also note in that same report that 21.5mm bbl/day total product demand was just a shade under the record high for year, set the week prior.

Even if demand growth slows dramatically, its still growth -- and supply of refined products will be down

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Halfin on September 9, 2005 - 2:09pm

No, consumption did not grow, it fell. See http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/curren t/txt/wpsr.txt at the bottom under PRODUCT SUPPLIED, Finished Motor Gasoline. The previous week it was 9,406 thousand barrels/day and this week it was 9,027. That is the gasoline that is supplied to and used by customers. It represents an actual drop in consumption. The printed version of the L.A. Times had a graph which showed consumption levels and there was an obvious downturn.

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mw on September 9, 2005 - 2:57pm

I use the summary tables in the weekly report; near as I can tell, the summary table includes ethanol; the raw data below may not. For my purposes, total consumption of gasoline tells the trend story - I'm uninterested in minor variations when ethanol blending is removed from total.

As always, damned lies and statistics.

Summary table:
Finished Motor Gasoline (4) 9,328 9,316

Input table:
Finished Motor Gasoline 9,408 9,471

4 Includes field production of fuel ethanol and an adjustment for motor
gasoline blending components.

Does it matter much? Who knows. We will only know when several data points, not one. We also don't know how lack of availability of gasoline to purchase in some areas fits in with statistics. IF demand is there but not enough supply, prices will remain high even if apparent "demand" via what can be supplied... goes down.

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Ridge on September 9, 2005 - 10:23am

Something I've been wondering about.....It seems that a lot of people following the peak oil story believe that there are insiders who know the real situation, or at least have better information than the rest of us, but are not telling us everything because they want to take advantage of the situation.

Assuming that this is true, who specifically do you think these people are? I mean a list of names. And do you think we could learn anything about their inside knowledge by watching what they are doing in their personal/professional lives?

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mw on September 9, 2005 - 10:38am

And so it begins (well, a number of gas utilities are jacking up prices in western nations):

Scottish Gas has announced that it is to increase prices by 14.2%.

The hike, a year after the energy company's prices went up by 12.4%, is being blamed on soaring oil prices and declining North Sea reserves.

http://news.bbc.co.uk/1/hi/scotland/4230314.stm

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mw on September 9, 2005 - 11:04am

MMS report largely unchanged - from yesterday 60/40% oil/gas to 59.88% / 38.29% today:

The cumulative shut-in oil production for the period 8/26/05-9/9/05 is 16,223,825 bbls, which is equivalent to 2.963% of the yearly production of oil in the GOM (approximately 547.5 million barrels).

The cumulative shut-in gas production 8/26/05-9/9/05 is 80.411 BCF, which is equivalent to 2.203% of the yearly production of gas in the GOM (approximately 3.65 TCF).

http://www.mms.gov/ooc/press/2005/press0909.htm

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DrPaul on September 9, 2005 - 11:07am

I was reading (forgot where) that part of the reason the Energy Dept's gas supply number didn't drop more was that the pipelines were down. Supply stayed in the storage tanks. Now that they are back on line, but some of the refinery capacity isn't, there may be some rude surprises in the future.

Also, the release of strategic reserves only helps in the short run. The oil companies that borrowed have to repay with interest. Kinda like taking an advance on your credit card isn't income free and clear...

Manwhile, " Jefferies- Damage to Gulf Energy Facilities Likely 'Worse Than We Know'"
Contacts we have made in the diving, pipelay and service sectors suggest that damage to infrastructure is likely worse than any of us knows, and repairs may extend well into 2006, arguing for higher prices than we have forecasted," wrote Jefferies analyst Frank D. Bracken III in an "Equity Research" report on Tuesday.

"Further increases to our price forecast may become necessary, considering that: 1) Katrina moved more directly over infrastructure than did [Hurricane] Ivan, and 2) assessments of damage we received over the weekend [were] alarming," he said.
http://www.rigzone.com/news/article.asp?a_id=25055

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Kyle on September 9, 2005 - 11:14am

The latest MMS report is out - still very slow on the recovery...

Today's shut-in oil production is 898,161 BOPD. This shut-in oil production is equivalent to 59.88% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.

Today's shut-in gas production is 3.829 BCFPD. This shut-in gas production is equivalent to 38.29% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.

The cumulative shut-in oil production for the period 8/26/05-9/9/05 is 16,223,825 bbls, which is equivalent to 2.963% of the yearly production of oil in the GOM (approximately 547.5 million barrels).

The cumulative shut-in gas production 8/26/05-9/9/05 is 80.411 BCF, which is equivalent to 2.203% of the yearly production of gas in the GOM (approximately 3.65 TCF).

It's curious to compare the cumulatives with yesterday's - cumulative oil shut in is up 1.7 million barrels, while cumulative gas is up 4.7 BCF, both of which are quite a bit higher than yesterday's claimed shut in. Someone needs to hire an accountant.

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viget on September 9, 2005 - 12:34pm

They did, it's just that the accountant used to work for Arthur Andersen. :)

Seriously, now we have 2 major discrepancies in the numbers, with yesterday's out-of-the-blue "increase" in shut-in oil because some company had forgot to report in for all these days (even though MMS guidelines assume no news is bad news, i.e. equals shut-in), and today with the increase in cumulative greater than the shut-in reported yesterday.

Does anyone trust these guys any more? Personally, I'm suspicious of every government report these days.

And I've seen this question asked around here before, but does recovery of shut-in production=flow of product to the coast? Or does it just mean that the platform is producing again, but can't ship the product back because we have no idea what the condition of the undersea pipes are?

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mw on September 9, 2005 - 12:48pm

The Peak-Oil Crisis: The Storms of August

http://www.fcnp.com/527/peakoil.htm

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JN2 on September 9, 2005 - 1:07pm

What's the latest from our anonymous insider? Or has he/she been fired?

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Sunlight on September 9, 2005 - 1:30pm

Ridge, obviously there are some people who know more than most but I never buy this idea that there are people "who know everything and are manipulating things to the disadvantage of the rest of us." I mean, the people at the various national oil companies of OPEC countries, Saudi Aramco, for example, know more about their own reserves than anyone else. And to the extent that their major customers (major oil companies) talk to them, they may know more about that than most others. THe majors have their knowledge. People like Boone Pickens and Simmons have their special knowledge. And so on.

But to assume that "They" know everything and run everything is a way of giving up our own power. Not healthy.

Having said that, on this site we watch the behavior of key industry players all the time. Stuart noted in an earlier thread that the industry cares alot about future LNG capacity -- enough to get things set up in the new energy bill so that the federal governement will have sole jurisdiction over siting of new LNG terminals, so states and local governments will not be able to block new terminals okayed by FERC. In response I said that no similar language was inserted in the bill for refineries -- which says the energy companies didn't want or need them. And on the crude front, many people have said that the Saudis have not sold more oil to dampen the current supply/demand crunch, so that is something new.

It's just a matter of keeping up, and by getting together we do a better job than most of us could do alone. I don't think there are simple shortcuts, and when you talk about personal behavior (other than legal insider stock tranactions reported to the SEC) most of us just aren't privy to that.

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Rick on September 9, 2005 - 2:23pm

Ridge--
I agree entirely with Sunlight's comments. It's always possible to construct a complex conspiracy theory, but I can't believe it's working that way.

I'd beware of what is said, and not said. There are certainly many people who know more than they are saying. Bush and Cheney understand depletion, but will never mention it. Lord Browne of BP made news when he told the House of Commons that oil would stay above $40 for the forseeable future. It hardly seemed like news, with oil at about $55 at the time. But he was the first spokesman for a major oil company to utter a price above $30. Politicians and oil companies have a lot to lose if they start talking about high prices and difficult times

Sunlight's point about watching actions is very important. Ken Deffeyes makes the same point. In a macro sense, we see the oil industry preparing for a smaller future: reduced funds for exploration, no new refineries being built even though capacity is strained, tankers being retired faster than they are being replaced. This is a pretty strong signal.

At present, there are a lot of knowledgeable people, but we all need to decide who we believe. Do you agree with Simmons, or Yergin? We can't definitively prove that either one is right, or wrong--yet. So listen to the signals, and assemble a world view that makes sense to you. And TOD is a huge resource of worldwide brainpower applied to one context--it's distributed parallel processing at its best.

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step back on September 9, 2005 - 5:16pm

Many theories about conspiracy are like those about "intelligent design". Just because a pattern emerges from the chaos does not mean that the pattern was "designed" into being by some intelligent master. It may simply mean that current conditions favor the proliferation of that dominant pattern over randomly generated, but less successful other patterns.

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Dave Cohen on September 9, 2005 - 6:03pm

Sunlight is correct. Keep track of the posts HO is doing here on TOD about CERA (2005, 2006, 2007....). Look at Rembrandt's document here (pdf file).

Frankly, I don't think anyone has better data than we can come up with here at TOD and maybe, in the case of HO's (and others' here) analysis about decline rates, TOD information is cutting edge.

One hard lesson that comes out of looking at Peak Oil is that there is no authority out there that knows more than we do. Just because CERA charges exorbitant amounts of money for their reports doesn't mean they know something that we don't. Again, look at the CERA 2006 thread here, which is based on a CERA audio/visual presentation we had access to last weekend.

There's no "big daddy" to tell us we're all wrong. We're all adults here and we're on our own, looking at the future of Western Civilization.

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Rick on September 10, 2005 - 10:08pm

"... we're on our own, looking at the future of Western Civilization."

Sadly, I agree. And to be explicit about being on our own: I am aware of no political or economic leadership, anywhere in the world, that is seriously addressing the issue of peak oil. Compare it to the issue of climate change. Kyoto may be too little, and too late, but world action on climate change is at least a decade ahead of action on peak oil.

It would be an improvement if the world were just doing nothing about peak oil. Instead, we're putting the pedal to the metal--ratcheting up production, and consumption, and worsening the problem every day. Based on what I've seen to date, there is no political leader anywhere that I would choose to follow on this issue.

We have no leaders, and we are not in good hands.

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RayJ on September 9, 2005 - 8:30pm

Sunlight,
In general, I agree with what you say in that no single or even a group of people knows everything. However, we should not forget that there is always room for strategic behavior by the major players in the industry.

Let's assume that PO is imminent. What are the options that major players will have?

Major oil company - as implied by a poster in Econbrowser, oil companies may decide that it in their best interest to save their oil for a later time. They could do this by delaying investments to develop reserves or even shutting wells and reporting higher depletion.
Iran - Slow development of reserves, reduce production and start developing nuclear power. You have to be careful not to invite "regime change" though.
China - build an SPR, lock up as much physical supply as you can by developing projects overseas, try to obtain reserves and technology by buying foreign oil companies.
US - Expand the SPR. Come up with plans to develop fields in environmentally sensitive areas but allow the environmentalists to slow the process down. If you believe that PO will result in resource wars, ensure that the military is the dominant global force. Maintain or even increase consumption of foreign oil to grow your economy as much as possible to increase your dominance.
Russia - take physical control of national oil reserves, etc, etc.

Note that the above strategic moves do not require any single party to know everything. Each player is going to try to maximize their benefits by taking individual actions as well as forming coalitions to improve their outcomes. This game theoretic approach was used extensively during the cold war and I don't see any reason why it will not be used now.

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as on September 10, 2005 - 11:27pm

Foreign pressure to conserve oil in US and China

Ministers also appealed to the United States and China to use oil more efficiently.
"Attention should be drawn to the fact that the biggest sinners on energy efficiency -- the United States and also China now -- need to address this issue with greater intensity," Caio Koch-Weser, Germany`s deputy finance minister, said.
The United States remains by far the world`s largest oil consumer, guzzling a quarter of the world`s daily usage of 81 million barrels, but China is second and demand in Asia has surged more than a third in the past decade.
Luxembourg Prime Minister Jean-Claude Juncker told reporters the issue would be raised at a meeting in two weeks of the G7 group -- the United States, Japan, Germany, France, Italy, Britain and Canada.
"We will use our G7 meetings in Washington in two weeks to have a frank word with our American colleagues," Juncker said.

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