DrumBeat: October 20, 2006

[Update by Leanan on 10/20/06 at 9:20 AM EDT]

OPEC cuts output by more than expected

Reduction of 1.2 million barrels a day is first in more than two years

DOHA, Qatar - Oil cartel OPEC decided to cut production by a greater-than-expected 1.2 million barrels a day on Friday, and some members indicated it was open to further cuts.

Mr. Pombo’s Map

The processes for extracting oil shale are still hugely expensive — which is fortunate, because the potential environmental costs are staggering. You can pump oil from oil shale by heating the underground formations, with untold effect on groundwater. Or you can dig it all up, cart it away and heat it somewhere else, scarring vast tracts of the West.

None of this has stopped Congressman Richard Pombo of California — champion of the idea that we can drill our way to energy independence — from throwing yet another economic bone to the energy sector. In a little-noticed provision of the much- reviled Deep Ocean Energy Resources Act — which the House passed in June and the Senate will take up when Congress returns — Mr. Pombo lowered the royalty rate for oil shale from 12.5 percent to 1 percent. Should the day arrive when the price of shale oil becomes competitive, this could turn out to be an extraordinary giveaway of federal revenue (most oil shale lies under federal land) and a huge incentive to wreak environmental damage.


Falling US fuel prices ease fears of recession


Climate Change Is Real, but How Bad It Will Be and How Fast It Will Happen Is Still Open to Debate

It also bears repeating that 50 percent of the contribution a car makes toward global warming occurs during its manufacture and the extraction of its raw materials. Better mileage or a different fuel source isn’t going to change that, nor does ethanol significantly reduce CO2 emissions, and may actually increase a few other pollutants.


Has Diesel Grown on the United States?


Evangelicals Ally With Democrats on Environment: Religious leaders hope the global-warming campaign sends a message to the GOP.


More energy policy gridlock seen in next Congress

If Democrats gain control of one or both houses of the U.S. Congress, they will likely face continued energy policy gridlock, industry lobbyists and congressional experts say.


Prop. 87 fuels high octane fight on oil production tax


Russia Rattles Asia With Attack on Shell's Sakhalin-2

The attack on Shell is more about OAO Gazprom's attempt to get a piece of the project than protecting wildlife, analysts say. The move has angered Asian nations banking on Sakhalin to help meet their growing energy needs. Sakhalin, just 25 miles north of Japan, contains the equivalent of 45 billion barrels of oil, equal to the North Sea's reserves, Shell estimates.


British wildlife head north as planet warms


Indian protests threaten northern Peru oil output

Peru Indians armed with bows, arrows and rifles continued to block oil production at Argentine crude producer Pluspetrol on Thursday as the government warned of fuel shortages in the jungle region.

Pluspetrol shut down its 50,000 barrel-per-day oil output in Peru's northern jungle on Tuesday after Achuar Indians took over four oil wells, complaining that crude production is damaging the environment.


Danish PM: EU must become less dependent on imported energy


'Save us from the fires of Shell,' say Irish gas protestors

Mayo, Ireland - For over two weeks the site of a planned gas terminal in north-west Ireland has been the scene of tense early- morning standoffs between police and prayer-chanting protestors.


Skills shortage hits oil sector

A skills shortage is jeopardising the future of the oil and gas industry, according to a new report.


Companies learning how to power down

A Holiday Inn in Sarasota can serve as an inspiration to businesses everywhere trying to cut costs. It recently reduced its energy bill by $3,000 a year by adding a reflective roof.


Water scarcity seen dampening case for biofuel

Water scarcity harms the case for using food crops to make biofuels, a leading environmental author and journalist said on Thursday.

"The downside of growing food for fuel is water," said Fred Pearce, author of the book "When the Rivers Run Dry".


[Update by Leanan on 10/20/06 at 9:41 AM EDT]

Green chimney could save the planet

A new power plant chimney that converts greenhouse gases into helpful substances could have a huge impact on global warming.
More of the rebuilding after a disaster:
http://www.scoop.co.nz/stories/HL0610/S00240.htm
On "Climate change is real, but how bad it will be and how fast it will happen ...": all of our climate models have large uncertainties. Furthermore, the system is nonlinear and aspects of climate may be chaotic, and many climate interactions are poorly understood and many more poorly characterized. Having said that, by far the largest uncertainty in all the climate models is the human response. How we deal with the situation is key. In a way this is encouraging: if the models have any skill at all, it means we have significant control over the situation, and that our decisions matter. OTOH, it means taking responsibility, and that's a tough demand.
¿May be chaotic? ¿May be? That is the understatement of the month. A million gnus in the savannah are chaotic, but they are like the Bolshoi Moscow ballet company compared to the weather.

So, noone can tell you with certainty what the weather will do, or how it will react to some event. Science can only tell you generalities and probablities. It is always like that, but in this case more so. But you ignore what the scientists say at you own peril.

Climate, not weather. There's a fair amount of discussion on just how chaotic the climate system is, and on what sort of timescale.
And one issue that is underestimated in the IPCC models of 2001 report is in my opinion the rise in sea levels. The figures below are from The Future Oceans - Warming Up, Rising High, Turning Sour; WBGU 2006

The measured sea level rise is above the predictions of the IPCC models.

Yes, sea levels are rising a lot faster than the models predicted even a year ago.  

I think we are going to have to retreat from the coasts.  Something to keep in mind, before spending billions of dollars on new infrastructure (new transmission lines, banks of wind turbines, new rail lines, etc).  

James Lovelock, in "The Revenge of Gaia," says that atmospheric conditions now seem to him to be equivalent to those in the Eocene period, and his prediction is for temperatures 5 degrees centigrade warmer than it is now. If he is correct (his forecasts are gloomier than most), based on your graph, we may be looking at 75m or 80m rise in sea levels. Since the relationship looks linear, we may expect a considerable rise in sea level well before we get to +5 degrees.
Should the day arrive when the price of shale oil becomes competitive, this could turn out to be an extraordinary giveaway of federal revenue (most oil shale lies under federal land) and a huge incentive to wreak environmental damage.

Tragedy of the commons.  

Maybe as the cities become uninhabitable we could railroad the refugees to the shale deposits - and give each refugee a pup-tent, shovel and maybe a couple bic lighters to heat the shale...

 

I used to think that environmental rules would be thrown out the window as soon as the energy crisis really started to bite.  Example: Bush suspending EPA rules on gasoline after Katrina.  

But stories like the ones about the protesters in Ireland and South America make me wonder.  The people who are paying the price for environmental destruction are often not the ones benefitting from the resources extracted.  Maybe the locals will end up helping avert the Tragedy of the Commons.

Though anything that can be extracted by an individual or small group, such as firewood from a forest, is probably doomed.

Generally, in the US environmental regulations aren't blatently thrown out the window. Rather, when powerful economic/political interests are unhappy with certain environmental initiatives, their lobbyists get to work in Washington, and if successful, proposed regulations are re-written, diluted, delayed, and shot through with exceptions favorable to certain groups. This happened all across the board when Reagen took over from Carter, and I see it all the time on the local level.

While local protests can make a lot of noise, cause a lot of bad publicity, and delay things, in the long run the fundamental principle that 'money talks' usually wins out.

The promulgation and enforcement of environmental regulations on a national scale is a very complex, tedious, and highly political process.  The fact the much of the oil shale is on federal lands does not give the locals much clout.

Based on over 30 years in the environmental consulting field, I can say with great confidence that  if we start having serious trouble meeting US consumer's demand for fuel, those oil shale projects are going to be completed come hell or high water.

Leanan,

Wouldn't you think the protests might evaporate when it threatens to be permanently dark out, and people get cold and hungry and thirsty?

Protests may last only as long as at least some of the basic needs are still provided for. It's hard to imagine people waving banners on a freezing empty stomach. They'd be much more likely to go scrambling for food and water. And anything that burns to keep them lit and warm.

In that sense the protests can be regarded mainly as a luxury. In a well fed human, reason may be the driver, but in a hungry person, the reptilian prevails.

I wonder.  When I lived in Peru, there were many Indian tribes that lived with minimal contact with "civilization."  I wouldn't count on them starving or freezing any time soon.
Oh, I absolutely agree. Whatever shape or form the coming crisis may have, it'll be worst for those who face the most dramatic changes. And that's not those who go in to it with a "primitive" lifestyle.

Though for them climate changes and other kinds of pollution may be tough, "we" will have all that and then some. Though, don't forget, Africa, Asia and South America, where life is most basic, have been our chemical and nuclear waste dumps for decades, and the Peru tribes may find their water starts killing people.

But since you mentioned Ireland as well, I got to thinking what I thought. Bangla Desh and the Niger Delta have seen large protests as well, in various ways. ANd undoubtedly, much more in on the way.

Leanan:  would enjoy comparing notes on Peru, where I lived for two years and which I visit regularly.  Please email privately (go to my TOD user info).
 we are dynosaurs  
"In a well fed human, reason may be the driver, but in a hungry person, the reptilian prevails."

I'm not so sure of your police-work there, Norm.  I think the well-fed in our society can show a remarkable amount of social disinterest and a preference towards 'protecting what you've got', while in hard times, I see people (and myself) more inclined to offer and to ask for support.  Your example jumped to the extreme of people already desperately starving, of course, but unlike a mass of drowning people who'll be dunking each other to keep air in their lungs, I don't see starving societies operating on that same purely solo death-match.

Bob

i thought norm was the husband    and the questionable police work was done by the 1st deputy on the scene of the crime who misinterpreted the  dealer licence plate
I'm just glad someone got the reference.  Years since I saw it.
its a really funny and trajic movie  i must have watched it about 6 times so far     and since it is getting  close to the long winter here in the midwest of a   maybe it is time to rent it again      
Don't know if you saw my note to Robert Rapier the other day, but if you haven't seen it, check out "Local Hero".  Really good 'winter evening' movie, any time of year.

"Firness will be the petrochemical capital of the free world!"

Great soundtrack by Mark Knopfler

Bob

I think whether Leanan is correct or not depends to a considerable extent on how ruthlessly authoritarian governments become in coming decades.  
I always tend to question the assumption that we will cut down forests and such when PO hits. I suspect that there will be localized damage, but not widespread and massive like some imagine. Why? Three reasons really:

-Most people don't have fireplaces these days. Firewood doesn't do you any good if you don't have a place to burn it. Sure, you can always do so outside, but do you want to be the one huddling around a campfire in a New York winter?

-Cities don't have forests (save a few parks and random trees) and that is where most people live. The vast majority of our population is clustered in a few urban centers.

-To get firewood in the city you have to either have it brought to you, or go get it yourself. There might be a few people bringing firewood into sell, but by the time this becomes necessary I suspect that fuel will be lacking as well, so whoever the merchant was would have to find an alternative means (horse and buggy). Otherwise, the city folk would have to go get it themselves. Without gas, they'd have to walk. How far is it to the nearest forest from most of our cities? What are the odds a group of tired, hungry, and cold people could go back and forth enough to cause damage? Or even get there at all, if they were leaving from, say New York City.

I always tend to question the assumption that we will cut down forests and such when PO hits.

It's already happening.

These stories are from last winter.  The URLs don't work any more, alas.

ANCHORAGE - Cutting your own firewood is once again fashionable in Interior Alaska, where residents are firing up their chain saws in hopes of slashing home heating bills this winter.

The Alaska Department of Natural Resources this fall expanded its cut-your-own firewood program to open up more state land in the Interior for people willing to work for $5 a cord.

And from India:

Kiari (Himachal Pradesh): Environmentalists in Himachal Pradesh are claiming that the rampant cutting of trees for firewood is irreversibly depleting the state's forest cover.

Despite a Supreme Court ruling, the illegal cutting of trees in the forest rich Himachal Pradesh continues unabated.

Experts say if unchecked, it will create a serious ecological imbalance in the region.

Nearly 90 percent population of the hilly state makes a living on farming and in the absence of any other viable alternative to firewood, is forced to cut trees.

Thanks to the ever-increasing price of essential fuels like cooking gas and kerosene, nearly 70 percent of the village population uses fuel wood for cooking.

Environmentalists say the villagers use at least three million tonnes of wood for their daily needs causing ecological imbalance.

And over at PeakOil.com, there are people bragging about how they ignore the law and take firewood from national forests near their homes.  They argue that this is more "sustainable" than driving to where the law allows them to take wood.

A lot of houses still have fireplaces.  And a lot of people are installing wood stoves.  

The population is at least three times what it was when we last depended on wood for fuel.  And we deforested a lot of land then.  Even if only a fraction of us convert to wood, we can do a lot of damage.

Leanan,

In my mind I see this happening the farther north you get as NG prices skyrocket in the future.  What do you see as stopping this from happening?  For me it's going to happen as each individual is forced to make his/her decision; damned the collective results.

What do you see as stopping this from happening?

Global warming making it so warm you don't need to heat your house?

You'd still need to cook, of course.  A food scientist I spoke with last year said the reason there are so many raw dishes in Japanese cuisine was because of the scarcity of firewood.

I plan on moving north several degrees Lat.
I am reminded of the scene in Dr. Zhavago(?) where Omar is stealing wood from a fence, and a Guard(his step brother ironically)  says,

"One person stealing wood is pathetic,  a million stealing wood is chaos".

I think the movie Dr. Zhavago will have some scenes in common with the future of many countries.

Firewood?  Sh|t,  people will be burning plastic toys, and everything else for heat.  Polution or no polution.

They will also steal everything that is not nailed down.

Maslow's "heirarchy of needs" will be taught in realtime up close and personal to people who never knew what "going without"  is/was.

Please, install solar hot water wherever possible.  This is one of the least expensive ways to get energy for heat.  I did some research into this area and space heating can requires 5 times more BTUs than domestic hot water - so heating your house using solar hot water is one way to help.
Do plastic toys even burn?  I think trying to burn plastic toys would be an incredibly futile way of trying to heat your home.  
Where forests are managed for wood production, using wood for home heating is not a big deal because about 25% of the wood is not suitable for high value wood products.  These residues can sometimes be used for pulp or electrical generation, but these products barely pay their way out of the woods, and using the residues for woodstoves is often the best economic use.  I get wood from the forest service for $5/cord.  My distant cousin in Germany buys wood in the forest for about $60 per cord and is still happy to get it.  

Russian government to call for action on stalled Royal Dutch Shell project

Sakhalin-2 saga

Russia's upper house of parliament will discuss the Royal Dutch Shell-led Sakhalin-2 oil and gas project today and call for government actions over the venture. Sakhalin-2 has come under pressure over ecological and technical compliance from Russia's environmental agency.

 Analysts say this is part of a broader Kremlin strategy to gain control over the lucrative project. Russian Resources Minister Yuri Trutnev, who will inspect Sakhalin-2 next week, has said Russia is particularly upset by the doubling of costs at the project to US$20-billion, which will delay when the country gets its profit oil from the production sharing deal.

The Sakhalin-2 group, which also includes Japan's Mitsui and Mitsubishi, argues that it is not different from other big projects and its costs rose due to higher steel prices and the weaker dollar.

Perhaps we should have a little more discussion by a few of the more astute Chemical Eng types, on how low sulfur diesel is affecting NG consumption, and to what degree.
We made the conversion earlier this year by installing a new unit to produce ULSD. I can't be too specific, but it definitely increases NG consumption. Other side-effects are the conversion of some desirable components into undesirable fuel gas, thus lowering the diesel yields.
Prop. 87 fuels high octane fight on oil production tax

Good story. Some excerpts:

Proposition 87, however, aspires to affect the international oil market, so a look at California state politics is not the end of the story. Gal Luft is co-director of the Institute for the Analysis of Global Security, but he spoke to The Journal on his own behalf as an energy expert. Luft said the real question is whether Proposition 87 can actually accomplish its objectives, given the economics of oil and what its cost would be on a global scale.

"I think the goal of a 25 percent reduction in [petroleum] consumption in California within 10 years is completely unachievable," Luft told The Journal. "There's no way, period." Luft scoffed at the billions of dollars allocated in Proposition 87 for research into alternative fuels.

"We have the technology today to move beyond oil. You need a deployment of existing technologies," Luft said.

Even some of the more practical portions of Proposition 87 don't go far enough for Luft. Though the measure would subsidize retrofitting public agency vehicles to run on an ethanol-gas fuel mixture, Luft said that it is aiming to fix the wrong problem.

"Their proposition does not have a clear idea of where the [ethanol] fuel will come from," he argued.

Luft worries that a research-heavy approach like Proposition 87 would focus on experimental "cellulosic" ethanol from biomass, rather than more tried-and-tested solutions.

Luft's final point was geopolitical. "All these [Western] companies, Exxon and Chevron and BP and Shell, all of them together are about 8 percent to 9 percent of the world's oil market," he noted.

If Proposition 87 does weaken U.S. oil companies like Exxon Mobil, said Luft, that plays into the hands of the state-owned giants like Saudi Aramco.


 

Debt holds U.S. troops back from overseas duty

Thousands of U.S. troops are being barred from overseas duty because they are so deep in debt they are considered security risks, according to an Associated Press review of military records.

The number of troops held back has climbed dramatically in the past few years. And while they appear to represent a very small percentage of all U.S. military personnel, the increase is occurring at a time when the armed forces are stretched thin by the wars in Iraq and Afghanistan.

"We are seeing an alarming trend in degrading financial health," said Navy Capt. Mark D. Patton, commanding officer at San Diego's Naval Base Point Loma.

In the past 6 years household debt has gone from 65% of GDP to 93% of GDP - an amazing, unsustainable acceleration considering that previously it took 13 years for debt to go from 55% to 65% (1987-2000).

At the same time (2000-06) wage and salary income has gone from 50% of GDP to 46%.

No wonder even soldiers are not allowed to "flee" from the chains of debt...

Voter Malaise in Michigan

They are especially hard-hit because of the auto industry's troubles.

Fisherman have been out in droves, enjoying the tail end of a prolonged Indian summer. Then came last week's early snow. The sportsmen quickly packed up their Orvis rods and headed home, mostly downstate. But the locals? Most stayed on the water, however cold. For them it's less about fun than home economics. They have to stock their freezers for the winter.

Few Americans, especially those who live in cities, appreciate the degree to which we are still a society of hunter-gatherers. Visit Michigan's north woods after the leaves turn, and you see it. You also begin to understand the political change that's hit Michigan--and other bellwether states--and why polls are showing that the Republican Party is in trouble.

...It isn't merely a war gone wrong that makes people mad. Nor is it the latest sex and corruption scandals, or the widespread impression that Republican leaders are covering up. Michigan's sense of malaise goes deeper, even beyond worries about jobs and the local economy. No, the real sticking point is at once broader and more amorphous. Two of three voters think that Michigan and the country are on a wrong course. Increasingly, they feel the nation's leaders are out of touch with the problems and needs of ordinary people, especially those whose livelihoods depend on such things as the whimsy of the salmon run. As that fisherman in the swamp told it, "They just don't give a damn."

All this is a bit hard to judge from the polls, since incumbent Democrats look set to win in November. But it can be glimpsed, perhaps, in the way Michigan Gov. Jennifer Granholm has pulled away from her challenger, conservative Republican Dick DeVos, son of the billionaire founder of Amway. From a dead heat in August, the latest surveys show Granholm now up by 8 to 17 points. A Detroit woman, explaining her choice in the Free Press, described the GOP candidate as a "selfish millionaire" cut from the same cloth as George W. Bush. Much for the first time this year, I heard similar sentiments Up North.

Yes, there's been a weather change in northern Michigan. It's coming elsewhere in the country, too.

I wonder about this weather change.  It looks like the dems are going to do well in this election, but I don't sense much actual enthusiasm for the democratic party.  The dems are going to win without having any sort of a platform they are running on other than disillusionment with the republicans.  It seems to me like the republicans are having a nervous breakdown, the marriage made in hell between the religious right and the fiscal conservatives is cracking up.  The dems had their own breakdown in the 90s when Clinton dropped the dems traditional protectionist and union base to embrace free trade and corporations.  It seems to me that there is a real oppurtunity for either a new party or a major transformation of one of the existing parties.  A Sustainability party, I think, would capture those features of the traditional conservatives and traditional democrats that are being ignored currently and leading to lots of people feeling like there is no party that supports their views.
I think there are a substantial number of Americans who don't feel represented by either party.  Third parties have arisen in the past.  If successful, they end up killing one of the other two parties.

In particular, those who feel strongly about the labor movement and those who oppose immigration have been left behind by both parties.  Immigration may be the issue to run on, for a third party candidate.  As long as they weren't a racist nutburger.  (See Buchanan, Pat.)