DrumBeat II: October 30, 2006
Posted by Prof. Goose on October 31, 2006 - 12:00am
Have at it people...
“What gets us into trouble is not what we don't know, it's what we know for sure that just ain't so.”
—Mark Twain
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How much and how fast. The price has always and always will go up and down. You pick a date 1 week from now and say after that it may go up at some time....safe bet.
This was when prices were skyhigh and basically everyone was telling him he was wrong. Damn prescient of him.
I can't remember his name right now, but you can find his old posts on here.
Me thinks it was this post by SelfAggrandizedTrader
As for my August prediction, my close personal friend whose opinions I respect very deeply, CryWolf, is insisting that oil must close at $57 per barrel on November 15th, his son's birthday, for my prediction to be considered accurate. I asked him if, "by November 15th" shouldn't be considered to mean, "on or before November 15th," but he was very firm in insiting that, "in England, 'by' means 'on'," so please, hold your apple sauce. As CryWolf also made very clear, "You people better toe the line, otherwise we won't consider you our subjects anymore," so I think we better do what he says. Remember, this is the same person who is insisting that everyone give out canned tuna for Halloween, as a, "peak oil awareness gimick."
On a lighter note, what's the deal with the guy down the thread who confuses me with Oil CEO (when sober)? When was Oil CEO ever sober? I don't remember hearing about that. Leannan must have missed that one.
As for my own birthday bash, I've decided only to invite women this year, but only women of below average intelligence, which rules out all TODers. So don't bother trying to crash the party.
SAT August 3rd 2006
Yep SAT - you definitley said by mid-November. 15th was your birthday too I seem to recall?
So, most important question - you still listening to your music? Oil CEO - that invisible Bostonian, doesn't listen to Leonard Cohen - can you imagine?
Canned tuna....mmmm?
Enjoy your party - I see you're inviting ploiticians.
CW
I always feel most comfortable combining charts with what is going on in the real world and here's my take on that for what it is worth:
- Underlying strength of oil price is due to narrow / tight spare capacity, and my feeling is that is here to stay - peak oil.
- Hurricanes last year, and expectation of more hurricanes this year led to the price getting over extended - though I didn't understand that at the time.
- >>$60 is burning off demand in some developing countries, who in a few years time will no longer be importing any oil, but will be exporting increasing amounts of violence.
- I suspect some market manipulation ahead of US elections, and wonder if your mid-November date was not in part based on resumption of normal business once the election is out of the way.
- These factors, combined with lack of huricanes this year are the real world reasons for the decline in oil price.
- Lower prices mean that the poorer countries may re-enter the market.
- Lower prices may also mean capacity destruction in the OECD. The oil majors, setting budgets as we speak, will be more cautious now than if the oil price were over $80 and heading north.
- So at some point, the price becomes irresistably cheap, bottom is reached and we start again.
- I will post in a few days on Chinese, US and EU demand trends to comapre with LADS export land trends - and I imagine that these two trends are heading in opposite directions - hence the developing world getting squeezed out of the market.
$67 and few cents as I write.PS - in Boston I saw 2 or three charts of rig count and gas production, US and other parts where it was clear that the battle to maintain production is being lost. There is little doubt in my mind that a full blown energy crisis is at the door. If drilling was stopped, production would crater - and that is because all the natural reservoir energy has been used up - oil and gas is no longer pissing out of the ground at 50,000+ boepd / well anywhere.
How was your stay? I still owe you lunch. Just because I'm invisible doesn't mean I'm not here.
What bar were you guys drinking in? I couldn't place the roof beams. Who were those shady figures behind the Girls gone Wild?
It took a further 24 hours to track down my UK editor Chris Vernon - who was wearing a suit - that's what rank and social standing does.
So it is a tricky thing looking for someone when you don't know what they look like and probably don't know their name.
The reviews for the Buckminster put me off a bit to I went a bit up market and stayed at the Hampton on Massachusetes Avenue. But we were in the bar in front of the Buckminster every evening. The babes, by the way are part of Dave's sick humour - the ones round our table were much better looking than that.
Cry Wolf will soon get shot - and I will start posting under my real name, Lee Raymond.
Peak Tuna? Heh.
Anyway, I remembered your first post because it was bodacious, then it stuck in my nut as we dropped from the '70s into the high 50's. (57.64 as I write) Mad props, SAT.
ORM. You know I have always had the highest respect for you. I have never moved forward without it. I've never considered medics less then armor. Never understood why US military has never understood this.
Signing off for ten minutes. Us Bostonians are the toughest in the fight. I wish I could mention her name. We all know where she is. We all know what she has been doing for years.
It scares her parents to death.
That's why we love you. You are making all the difference.
matt
Our economy is tanking right now. I'm not sure we really grew this month at all. We focus on the supply side of peak oil but demand is just as important esp for prices. Although no one wants to admit it 70 dollar oil did break our economy and we are now seeing the effects.
Whats interesting is that I think you will see that from now on every time the economy starts to recover oil prices will skyrocket sending it down again. But now the US will need to focus on its huge debt as the economy worsens oil prices will not be a factor for years. My best guess is we will see a slow rise back to the 70-80 dollar range but financial crises as the economy unwinds will keep this in check for the next several years say 4-5.
At this point we will finally see oil prices head into the 200 dollar range as the baseline economies slowly degrade.
I don't think anyone at the oil drum predicted this slow crumbling of demand but it makes sense.
In economics the glass ceiling is very very real. Once you can't afford something your out of the market regardless of the cost. Because of this effect I now don't see 200 dollar a barrel oil happening to we are well post peak.
In any case I'm pretty confident we are looking a a very long recession slow growth economy until depletion really starts hitting the base.
It just means we need to really start watching our economy as it unravels. The stock market will of course tank in 2007. So it looks like the oil era will suffer a slow painful death not unlike the Roman Empire.
So I see oil prices undulating between 60 in the fall rising to 80 in the spring and back down agian as the economy unwinds this will go on until we get down to real demand at this point we will finally see oil rise up to about 200 a barrel throwing us into a depression.
The good thing is it looks like we have till 2008 at the minumum prob 2009-2010 since we are dealing with forclosures which are slow, as the housing bubble unwinds until we find out we can't grow our economies any more the bad thing is we may be well post peak before demand and supply lead to soaring prices. For example I think that at the end of 2007 and begining of 2008 we will have a 3 year supply at least of houses on the market.
http://www.kellogg.northwestern.edu/news/hits/010129hc.htm
Historically it was about 40-50% add in the fact that builders will have to keep building homes and we are looking at the housing market meeting population sometime in 2020.
At best we will have a influx of wealthy forgieners to buy up the excess. In any case the housing fiasco will be a drag on the American economy for a long time 5 years is and easy estimate 10-20 is more realistic.
The problem is that unlike the dot com crash where people who created wealth lost jobs homes don't make money. A industrial crash is easy to recover from since people will move on to work and continue to add value to the economy. While fixed assets such as homes which are not income producers have a pretty insidious effect on the economy they represent wealth spent.
Also even though the American auto manufactures are not dead yet we are now feeling the effect of the death throws of the American automobile this will of course reverberate through the us economy over the next few years.
Finally as I mentioned before we will see a major stock market crash in 2007 so the combination of the death of housing the auto and the stock market will keep the real effects of peak oil lessened for a while. And on top of this will be various financial crises as the deriviate market unwinds. And last but not least Fannie Mae/Mac go under.
A intresting to us side effect is that the roads will crumble sooner then later as the tax base plumments.
Which is not a bad thing.
So how does one make money in this type if economy ?
Bread and milk. People have to eat.
We should have a piece on demand going into 2007 as that is where all the action on price etc is really going to be IMO
Yes but in CA at least 30% of mortgages where ARMS. Which reset next year with most of the holders upside down on their mortgages. Sorry for the CA perspective but its like the fourth largest economy in the world and I live in Orange County.
Fortunately I married into a wealthy Chinese family :)
Poor Arkansas hillbilly meets wealthy Chines in CA story for sale. If I can work for the same employer for 3 years they will give me a house in Irvine ( Almost a million dollars) But I'm a software engineer so its tough.
As a hint my father in-law was the equivalent of Greenspan in Taiwan for a looong time.
You should see how they managed their economy till he retired. He made Greenspan look like wimp he is a pure solid growth type of person. In fact he heavily discounted all the growth in electronics until he retired preferring shipping etal as true economic growth. I of course believe the fact Taiwan has a strong base economy like Japan is from his efforts. Needless to say my exposure to a ultra financial conservative has been and eye opener and I think it has helped me really consider the post peak world realistically. Knowing someone who played a huge hand in building one of the worlds economies is invaluable.
The only reason I mention this is I think its really important to go back to people that truly know economies from years of experience they exist and they are the most conservative people on earth. Its time to really listen.
We need them.
Just to add to this they have to keep the dollar from tanking
so as other central banks raise rates they must ante up.
Sonner or later the EU and Russia will fuck us on t Chis gaim.
I mean they are positioned much better then we are.
China of course is almost in the same boat as we are so the only chance we have is the Chinese will support the dollar ?????
In any case the EU is the real player now with Russia backing them.
But here's some interesting tid-bits: the US economy accounts for roughly 1/4th of the entire world economy. How on earth do you honestly expect that China/Russian/Japan are going to keep on expanding by 'diversifying' their foreign bonds when the largest market on the planet tanks? Seriously people. Talking about China no longer buying US Dollars is a mute point when the entire world enters a mega depression. No market is safe. Where do you think China will sell their goods too when their largest trading partner tanks? How exactly do you think their oil consumption is going to increase when they too will enter a massive recession?
Fortunately, I HIGHLY doubt the 'crash' is going to be forthcoming based on 2006 Q4 GDP. We will, of course, see in January if I'm right 'again' or not. Many people have quoted the similarities between the US housing market and the Japanese housing market: but one thing is vastly different. Our population is EXPANDING faster then any developed country in the world. As long as the population is expanding at a rate > 0.5%, there will be a substantial need for new housing.
Notice how in Japan, when their housing bubble 'burst', it occurred a few years AFTER their population growth decreased suddenly to an anemic rate of less then 1%, and it plunged there-after. This rate has continued to decrease to less then .1% growth in 2006!! Its no wonder that the housing 'recovery' in Japan has been so slow in recent years: there aren't enough 'new' people buying them to cause any major expansions in the housing market!
As it stands, I work in a sector of the economy thats very acutely attuned to 'expansion' and 'recession' in the economy. And let me tell you one thing: from a HANDS ON perspective of things, we just had the largest seasonal shopping spree I, or my family, have ever seen in the 22 years our business has been running. We're talking about a 20% increase from last years sales. 'BTW, its not the auto industry :P' And this is despite the fact that we were faced with competition from two new businesses in direct competition with us, AND record high oil/grain prices, and historical high interest rates.
My 8-ball is telling me that Q3 GDP will be adjusted up 'around' half a percent, and the housing 'crash' will turn out to be a 'dud' for the PO community yet again.
Then again, maybe I'm crazy and were all doomed :P
'Despite an upbeat forecast for October, Wal-Mart Stores Inc. notched the slowest gain in same-store sales in years, the retail giant reported Saturday. Walmart said sales at established U.S. stores rose an estimated 0.5%, far off the 2-to-4% gain the company originally forecast for October. On Oct. 23, company executives pared back their rosy outlook, saying that October same-store sales would be closer to September's figure of 1.3%. The 0.5% same-store sales figure for October is the weakest since the 0.3% rise posted in December 2000, according to the Wall Street Journal'.
The weakest in fact since just prior to the last major US downturn.
I for one have not been rubbishing your view that the current plateau can't tell us very much - however my view is that it cant tell us very much because its impossible to decipher what if anything it means in the context of an incipient demand fall off (while I think you come at it from a somewhat different angle).
I am also not of the camp that China etc will come to the rescue - a major US downturn will indeed cause major problems globally.
As a consequence I can now quite easily see oil falling back into the 40s from here, as demand falls.
We should not of course be surprised by any of this - we are merely at the beginning of oil induced recession number 1 for the new millenium.
Eventual economic recovery will of course be accompanied by demand resurgence - then perhaps we will know what the plateau actually means.
Yes but foreign money will rush in to save our asses one more time to buy up all the excess housing etc on the market. So we will see a steady but decreasing 2007. The US is still the best investment market.
It looks like Japan may also be falling down as well:
http://news.bbc.co.uk/2/hi/business/6101120.stm
Another demand side retraction? We do tend to focus on China and India rather a lot, but last time I looked the Japanese still had not an inconsequential sized economy.
- Their target client group feels significant pressure from high energy/food costs. That is, the higher these costs get, the less this group buys in terms of disposable goods and services. The first businesses that will experience the squeeze in profits are those that primarily cater to the low income group. But this can not be used as an indication of the economy as a whole: 95% of the gross income earned annually in the US isn't used in these areas. You need to watch where the money goes, not what the poor do.
- Prices can only come down so much. There gets to be a point to where no matter what volume you purchase a good or service, the price will simply not decrease by any significant amount. I know this sounds wrong when compared to the 'economies of scale' theory, but that only applies to rational goods, and as many of you noted, can not continue forever in a non-flat earth. Wal-Marts success has been based on continually decreasing prices for 'bargain hunters'. When you can no longer do so, your growth hits a wall.
A better view of the economy is too look at it from the perspective of durable goods sold: cars, mainframes, steel orders, etc. Rubber and light bulb production numbers are also very good indicators of where the economy is going. These industries aren't experiencing any kind of a contraction at present. Not even automobiles. Automobile sales this year are up, but the big three are doing poorly because town car sales are currently vastly exceeding light truck/suv sales. Rubber follows an inverse relationship to the economy. When rubber is being mostly recycled, things look bad. When rubber is being made, things are good. Light bulb production numbers are important because they indirectly relate to a businesses expected energy/production use for the future. Modern industries require night time lighting!!But to sum everything up: When the rich stop buying, THEN you can start worrying.
What you said in your first paragraph is true - look out when companies that cater to this group start to suffer. The Great American L.C. buy a lot of USELESS SHIT and a lot of HARMFUL SHIT, examples: Pop-Tarts and tobacco.
Watch these people shop - they buy a 6'er of soda for the kids, a couple'a tall cans of Bud for Mom and her Old Man, pack or two of ciggies, a carton if it's payday, some Hot Pockets for late night snack, dinner will be Kraft Mac and Cheese. This is the Hamburger Helper demographic, God help us all. They spend huge amounts of money on their version of sheer survival, not knowing, and no one's about to teach them, that they could do a lot better on beans and rice and bulk meat, home-canned meat and veggies and fruit, and quit smoking! Their Grandparents never got to teach them to do these things because they never thought they'd have to - in the 1960s and 70s it still looked like everyone was just going to get richer and richer. Depression-era living skills are what the lumps need; speaking as an honorary lump myself I'm working on them too. But, if the lumps ever learned old-style 1930s scrimp and save and make do and self-sufficiency, the US economy really WOULD tank!
And... AND..... they drive inefficient cars, they ALL just have to have cable or satellite, clothes at Wal-Mart are cheaper than most new ones but you can still do better - buy from thrift stores or learn again to sew your own, and Wally's is hardly ever all that cheap, because once you go there you have to buy all this OTHER stuff because it's on sale.
Since if help in learning how to live thriftily is anti-Capitalist etc., the only ones to step up to this plate are the various churches - and lo and behold, there are things like "Christian Credit Counseling" etc now, and groups like that that are genuinely interested in helping their flock live better. The Mormons are big on self-sufficiency skills too.
I honestly think that the American capitalist dance of death has two partners - the corp's and the lumps. Out where I am in California it's easy to think a majority of Americans are doing pretty well, because the poor are hidden fairly well, and those who can't compete out here flee to, or back to, Red states in droves. These are a huge portion of Americans, they're the ones choosing dry milk over fresh because gas went up a quarter, and maybe someday in the future saying to hell with it and getting a cow or a share in a cow.
To sum everything up: A huge part of the US economy will tank if the working class can no longer buy Hot Pockets and cheap 40s. Watch that sector first.
Um, the numbers, to the extent they are truly comparable (ethanol may be a fuel, but it has nothing to do with oil production per se), show an almost year long 'production plateau.' Even as the price of oil stayed very high.
I think you may, just may, be confusing price as a measure of oil, and what comes out of the pipeline. Obviously, very obviously, price plays a role in production, which is a reasonable point.
But peak oil remains measured by what comes out of the pipeline, and depletion is unavoidably part of production. If the price of oil goes down due to an economic crash, the odds of something like truly deep water projects being completed in the next five years is likely to much lower than currently projected.
But the amount of depletion will have remained a 'constant' - that is, what was produced is gone, and the need to replace it in terms of maintaining production is also a 'constant.'
Except the projects to replace what was produced did not get started.
It is a very intricate dance, and it is not only geology. For example, what reserve numbers do you trust?
I tend to be an agnostic on most points of the geologic/logistics/'false peak' points. I just like to look at the numbers, look at the cost and location of current projects as proof that the easy oil is really and truly gone (Iraq is a great untapped hope? Iraq?), and then make my own opinions.
And getting hard numbers is getting harder, not easier. Public announcements from oil producers like the Saudis do not match what can be measured - their production has not been increasing, and the reaons they have provided, from overflowing storage tanks to falling prices remain less than convincing in terms of the fact that their production is less. And yes, this has happened in the past - though without an increasing rig count, or increasing water cut.
And were the conditions that caused those peaks the same as the conditions today? Are you comparing apples and oranges or making silly assumptions based on superficial examination of graphic data?
How many giant fields peaked and started declining at 8-10% during those peaks in the past (geologic limits hit as opposed to temporary geopolitical limitations?)?
This TimezUp the geopolitics will again play a prominent role in the oil production graphics. Unfortunately, it is not likely to go the way the Danny "Jerkin'" Yerginz-boyz want it to go. When all their Drawingz Boardz PrOJecTionz go up in smoke they will scream, "But THAT wasn't SUPPOSED to Happen!"
Wave riders mistaking themselves for wave makers.
When we meet the peak, we will know it. We wont have to come up with silly alternatives to why the peak wasn't meet this time around :P
I didn't ask how many "giant fields" there were then or now - I asked how many giants were declining in production due to geologic factors vs geopolitical - what caused the those bumps in the chart.
How many times in the past did well-counts soar without a bump-up in production from the giants (inspite of better TeChnOLogy today)?
The blips and bleeps in the vital signs may appear the same to you but the current patient's conditions is terminal.
"When we meet the peak, we will know it."
That's what those very surprised Texans said up until the early 1970s.
There have been dozens of reports through the 1880's - present stating that in order to meet demand, we would need to invest heavily in Oil rigs and wells to do so. Its funny how when a country actually does invest for future production requirements, and their production doesn't increase because the demand for their sour-heavy crude isn't here while we have lots of sweet-light available, they're suddenly at their peak.
Lets face it. TOD pundits fit the 'facts' to their own world view. You can twist any statement to support your own. Look at how effective this place was when Stuart was commenting on the current plateau and used a small portion of that graph. It took months for him to finally show the bigger graph showing how production has plateaued several times over the past 2 decades.
BTW, how is Uganda doing these days? I thought they were supposed to have entered the Olduvai Cliff phase by now, but I distinctly remember reading and article talking about how electricity demand was exceeding available supplies, and their government was grossly mismanaging funding that was set aside for new power plants. Olduvai Cliff indeed...one of incompetence!
That's the problem Hothgar.
Ego or money-invested seems to make people try to "spin & win" instead of learn.
Anyone projecting that this is the plateau is basing it on factors well beyond the simple recent production trends.
I don't know if Simmons is right - in my mind Koppelar's study is pretty persuasive - but to date, it seems to me whenever he calls a peak, he has been right, and I've been watching his predictions since 2000. Before he started his Saudi analysis, the broad concensus was always 15-20 mbpd was easily achievable. He has completely changed the dialogue on Saudi Arabia, and at the moment things are going the way he - and essentially no one else - predicted 3-4 years ago. Saudi is drilling like crazy, pouring billions into old projects, buying every rig they can get their hands on, and seeing flat/declining production. Now I understand that world demand factors also dictate production numbers and that they MIGHT be adding spare capacity (no one outside ARAMCO really knows), but the reality is no one but Simmons would have projected this combination of features happening in SA right now.
The big question in Koppelar's report is decline rates going forward, and the unknowns in that number could make it go either way. OilCEO would like solid numbers - as would we all - but in fact the numbers don't exist to tell us what we want to know. There has to be some "gut" in all the projections, and peoples guts project in different directions.
The information presented -
'Before he started his Saudi analysis, the broad concensus was always 15-20 mbpd was easily achievable....and at the moment things are going the way he - and essentially no one else - predicted 3-4 years ago.'
And here are the facts most people here consider fairly reliable -
- 'Saudi is drilling like crazy' - or at least a lot more than in the past, for whatever reason - though the huge water projects aren't exactly a sign of a producer building reserve capacity. In other giant oil regions, like Texas or Alaska, these are very reliable signs of peaking production (and in Alaska, of directly related pipeline problems - which the Saudis may also increasingly face, as their maintenance, being a government company, is a lot more likely than BP's to be shoddy, right? I mean, if a private company like BP can ignore maintenance for more than a decade, than what must the Saudi infrastructure look like? Or will you change your logic in what is a sideline discussion about private vs government owned oil companies?)
- 'Pouring billions into old projects' - including at least one where there still isn't a solid technical solution to refine the oil due to the metals in it - I'm not sure how developing such oil production is seen as a sign of a producer swimming in oil just waiting for the tap to be opened. It can be easily seen as an oil producer now attempting to pump every last drop out, however. And this seems to contradict the Saudis saying the world was swimming in oil last summer - if it was swimming with the ever larger share of heavy and sour crude, what is the market for essentially non-refinable oil?
- 'Buying every rig they can get their hands on' - again, like with the drilling above, there is some room for discussion, including the fact that a number of the rigs are being leased, not bought. But there is no real question here that the Saudis are now becoming an expanding market for anyone who can drill offshore, though unfortunately, the market for such rigs took a real hit in the Gulf. Remember that? - the absolute number of such rigs declined after 2005, as did the production capability and infrastructure to support them - that the Saudis have not increased their offshore rig total more may be related to the fact that the number of such rigs available declined, not because they couldn't use them. There are more types of market constraint than merely the monetary or geopolitical - maybe the Saudis had planned on a production increase based on rigs drilling - and without the wells, production drops more than forecast? But notice, the rigs aren't available today either. So maybe, just maybe, the scheduled increase which was meant to mask production declines in other fields (or just allow production to be throttled back to a more sustainable level - damaging a field through over-production is also a possibility which adds complexity to what is going on in Saudi Arabia) is not available. Scenarios are easy to construct - just mine is pessimistic, and yours optimistic. Oh, and mine has some historical support - I am not sure any oil producer in the world has ever reached 15 mbpd, but you seem to be counting on it as part of your argument. If the Saudis hit 12 million (an 'official' top limit according to a former employee), you would still need to see a 25% increase to meet your projection, which is still 33% higher than production today ('I think they can, I think they can...' might be a good story, but it isn't exactly reality based - '...and they lived happily ever after' comes to mind too.)
- 'And seeing flat/declining production.' And that is the point, isn't it? At least measured by numbers, Saudi production, is declining from a higher level. Nothing new there at all. What is new is points 1-3, essentially predicted by Simmons. Or not so new in his case, but now more in the nature of confirmed observations, not reasoning based on factual premises and historical awareness.
He may not know, but his reasoning seems not only sound, but correct till now. I realize that the discussion about data, cherry picking, changing the goalposts, etc. is valid, but there are other ways to look at the situation than through one which says my opinion of the facts outweighs what is happening.Oh, you are keeping up on the Norwegians, and the continuing series of production cutbacks, right? Peak oil is what comes out of the pipeline, and regardless of the projections of increasing production, there seems to be no provisions for announcements of problems - in other words, anyone correcting their 2006 projections due to another missing 100,000 barrels a day or so? - it seems as if the Norwegians have wiped off quite a bit from the anticipated production - or is ca. 10% just a rounding error? I mean, add in Nigeria, and suddenly, the market is already either pricing unanticipated production drops of fairly major scale - for example, Alaska is getting a bit unsteady, and the weather continues to be very unusual in many regions of the world - or demand really is sinking like a rock. Or a number of other factors - for example, could the 'brimming' oil storage in the West be a signal to Iran - after North Korea showed that they are now a globalized player on the nuclear scene, is it time to get serious about Iran and its stated ambitions to follow the path of righteousness as ordained by God - after all, if the Iranians are following the American lead in trusting God for policy, why shouldn't they also follow up with the tools needed to follow God's will where it leads. (The naval exercise with Coast Guard and the anti-nuke New Zealanders amonth others is pretty clearly designed to keep Iran focused on the point that buying whatever the North Koreans are selling in terms of kilotons TNT equivalent is just not acceptable, and much like a de facto blockade, it would be considered a quasi act of war.)
Another of Simmons' major points is that infrastructure plays a larger role than most people seem to understand. And that the infrastructure is real creaky - and that was before a few hurricanes damaged one of the world's premier oil infrastructure regions.
I am very agnostic about causes of peak oil too, but pipelines also play their role - and how much production did the U.S. lose in 2004 and 2005 because of the weather? And note that it wasn't merely sunken of damaged rigs - pipeline networks were also destroyed in underwater landslides - in other words, were the rigs were still in good shape, the pipeline was gone, and where the rig was gone, the pipeline was still in good shape - synergy is not only a positive effect - in this simplified case, 50% percent pipeline loss and 50% rig loss leads to 100% production loss. Obviously, to the extent possible, the working rig is moved to the working pipeline - but it is that extent possible which still remains part of the real world - if the working pipeline is 1000 ft down, but the rig has a maximum working depth of 500 ft, you are still at 100% production loss in the real world - however, I am sure you can statistically prove that reality isn't the point under discussion if you work hard enough.
This is simply meant to point out facts and reasoning from them. What is happening in the market is starting to become a touch constrained by the facts - sinking demand and sinking production are certainly related, but possibly, the sinking production has less to do with demand than in the past. After all, the U.S. hasn't had any 'false peaks' for a good half generation - but then, as reported here, a Texas state geologist said there is no reason to think that production can't return to 1970s levels.
Well, some of us think that well, yes, there is a reason or two to think that production will never return to those levels.
Sometimes, I don't think you grasp we aren't all talking about timing the way you seem to think - the difference between Thanksgiving 2005 and Easter 2007 is still less than the amount of time Thunderhorse has spent not producing after its planned start. And that project represents something around 5% of America's total oil production.
It is very difficult to deal with depletion, because it is reality, regardless of your own desires about increased Saudi production shifting peak production to 2011, or 2014 - and you would still talking about less time than the ongoing effort to get Thunderhose producing - or is a couple of hundred thousand barrels a day insignificant? After all, that is the scale of many of the newly announced projects in Saudi Arabia. You can see this process of reality still being dismissed as not relevant in human affairs not only a generation after it occurred in Texas, but today in Great Britain and Norway - it just can't be right that the oil runs out, since we are such masters of the world around us.
Except that the oil does run out, though if wishing it didn't would change the world, then we wouldn't have any problems at all.
Where to begin?
Let me start off by stating once again that YOU DO NOT KNOW. All the information you are getting is being filtered for you to help maintain the illusion of an imminent peak. PG, RR, SS and others DO NOT KNOW.
- Their drilling has increased at a 'dramatic rate' in recent years after almost 3 decades of stagnant investment. There was no need for excessive Saudi capacity when the world was awash in sweet light crude. Now that they can see that the world will need more of their oil in the near-medium term '5-20 years' they are investing in new rigs and fields to help them meet this demand. They have been talking about this for the past 2 years, and have mentioned on multiple occasions that currently there isn't enough demand for their heavy-sour crude. As such, there is really little reason for them to produce all out. Their 'peak' is a geopolitical/refining problem. Why refine heavy-sour crude when you can refine light-sweet?
- See above. You should also note that they are building oil refineries specifically to process this supposedly unprocessable oil.
- EVERYONE is buying every rig they can get their hands on. We have a rig SHORTAGE after nearly 10 years of ridiculously low oil prices. These 10 years saw a dramatic plunge in oil rig investment, leading to the current supply constraint. It takes years to recover from this!! I'm NOT counting on them to reach 15 mbpd. Your putting words into my mouth. I want to see a world with EV's, not more gas guzzling vehicles. We wont need that much production from SA~
- Have you seen the KSA production history graph? Man, they look like they've hit the peak on 3 different occasions, and thats just in the past 6 years! You should do some research an see how wild its been for the past 30 :P
And as for an imminent peak: I don't see it happening. Most likely around 2015 is where I peg it at. Time will tell.My company makes specialized industrial computer boards for PC's. The last few months have been gangbusters and we have run out of stock on two of our items. This year has already way passed last year in terms of revenue.
But what does that mean for the price of oil? Normally it would come down - and it has. I believe the rapid 27% plunge from the top is exactly due to that cooling of the economy. Speculators had driven the price up to fundamentally unsustainable levels, which have now completely reversed.
That leaves the other factor affecting prices, shorter-term: geopolitics, i.e. supply disruptions. And that factor HAS NOT gone away - if anything, it has escalated in importance. The recent N.Korean nuclear test and the "victory" of Hezbollah in Lebanon have sharply focused the minds of US and Israeli policy makers viz. Iran's nuclear ambitions.
The carrier diplomacy (previously known as "gunboat diplomacy") currently taking place in the Gulf is instructive: there are two US nuclear carriers and their groups there now, plus a Marine expeditionary force aboard the smaller carrier Iwo Jima plus another smaller carrier (USS Boxer)just outside in the Indian Ocean. It will also head into the Gulf after its part in the Malabar joint exercises with the Indian Navy ends (Nov. 5).
This amassing of a huge naval and aerial force inside the Gulf is pointing to one direction only - a direct threat to Iran: stop uranium enrichment now or face an attack. Some may imagine that such a threat is hollow because US ground forces are spread too thin, but no one is thinking of launching a serious ground attack. Instead, there is a great possibility for a combined naval-aerial operation. Such assets are now under-utilized in the Middle East and clearly available for immediate deployment. The ground portion of such an attack would likely be limited only to supportive Special Forces ops. or rapid Marine in-out strikes.
Iran knows this, of course, and it is up to them to decide what they are going to do: will they roll over and accede to US-Israeli demands, or will they hunker down and say "bring it on"? Their history (and histrionics) points to the latter, unfortunately.
Bottom line: right after the elections and barring a massive re-alignment of the US Congress, the Bush administration will ratchet the pressure on Iran and oil will once again move higher, probably into the $75-80 area. If a strike does take place then $100 is highly likely, despite certain releases from the SPR.
So like I said we will drive oil prices up all winter and early spring so what we will will finish close to 60 each fall with a less powerful economy. (Raising 5-10 dollars each year) The point is the real oil prices will exert a as far as the Oildrum as concerned real demand destruction each year and we have never calculated this.
I've said a few times we need to take into account peak oil demand destruction and we have not. Its our problem that we did not anticipate how long it takes to unwind the oil economy.
Troubles with Iran and N. Korea are unfortunately not a headfake designed to keep Bush2 in power - it has come to this precisely because of the incompetence and hubristic arrogance of the Bush2 administration.
We all extrapolate a lot of trends into the future, and generally, that is reasonable.
If the U.S. was a 'normal' country, the dollar would already be esentially worthless in terms of international trade - the U.S. has exceeded both percent and absolute values where a number of other (often 3rd world) countries faced utter financial collapse.
This is one of the unstated debates running in the background - is American military force sufficient to ensure that oil producers take dollars in payment? In the case of the Russians, the answer is a fairly clear no. In terms of the EU paying in euros, the answer is less clear (I bet Chavez wouldn't mind, for example). In terms of Saudi Arabia, the game becomes another extrapolation - there is no question that the royal family will take dollars, but what happens after an Islamic revolution? In terms of Nigeria, obviously the government will take any form of cash, but what you get for the money is somewhat less clear - how much is oil production currently down, how many kidnapped workers are there today, and what group has taken which facility off-line again?
The future is becoming very difficult to extrapolate - sort of like living in 1927 would have not led to extrapolation providing insight about either Hitler or Stalin in the 1930s, much less the Great Depression.
The world is awash in oil and OPEC has lost control - guy from Iran said that yesterday.
The only way to get the price up now is a terrorist action?
The risk to the downside on a down-spike is probably $45, or a $13 per barrel. The reward on the upside on the other hand is $80-100, or $22-42 per barrel.
I'm quite doubtful that we can maintain the current infrastructure of roads and rail and electric power in a post peak world. I've become firmly convinced that we can't have everything we built today but must look at choosing the modern infrastructure we can and will support in the future.
For example I don't see how we can support our road infrastructure with and ethanol based economy therefore we need to simply move on and focus on electric rail.
But our electric infrastructure is not good so we need to seriously consider how we upgrade it.
Finally if this is the route we want to take we need to consider serious subsidizes for solar and wind power today to build out our renewable energy resources.
At the end of the day it looks like in a post peak world we can only support one major transportation model inland and electric rail with a lot of renewables seems to be the answer. If we can expose the spiraling costs of maintaining our roads and include this the EROI investments in a ethanol or even generic expensive carbon fuel based economy I think it will be obvious that they are simply not feasible.
The problem is even if we pick the right solution the costs are high.
Next as far as rail goes a big part of the maintenance problem seems to be wear on the rails. I looked at the concept of trains as basically hover craft and did not see that floating trains on a thin air layer presented any major challenges.
http://aernav.free.fr/Aerotrain/Anglais/Aerotrain_Story.html
Unlike a maglev the track is quit simple and has a lifetime of centuries. Although linear electric motors for forward propulsion are still possible.
The point is I'm not sure that even jumping on traditional rail based electric trains is the right answer I think we need to step back a bit and take a hard look at this technology since it can provide very high speeds if desired.
Another direction is the revival of canals and say solar/wind powered barges. Canals have fantastic energy profiles. Slower speed "water trains" could even be intresting.
Next for air travel a revival of the airship especially for travel over land could be quite economical.
And of course sailing ships could become useful agian.
A trimaram or pentaram sailed powered container ship seems to be a good design. Add solar collectors to generate hydrogen for power near the coastal regions and internal use and modern sail designs and you have a fairly fast freighter with no oil costs.
http://www.nsrp.org/panels/pdmt/downloads/pentamaran_hull_form.pdf
The problem is that in all these cases we must use our remaining oil wealth to subsidize switching to truly sustainable transport.
Misdirections such as ethanol for transport will only cause the building of a sustainable economy to be far more expensive.
Finally we may need to simply give up on dense populations far from navigable rivers and the ocean. We don't need large cities in the middle of nowhere. A few transcontinetal railroads with major population centers along the rail lines is good enough. But no matter what we decide to do it won't be cheap so we must pick correct solutions.
I've posted the costs before they are not cheap your way off.
http://www.town.belmont.ma.us/Public_Documents/BelmontMA_BudgetMin/S00830FA7-00830FB2
28 bucks a yard according to this.
Now I remember 3-4 dollars a yard for simple resurfacing in CA.
If you havent said OOOOOOOH SHIIIIIT about road costs in a post peak world then you haven't added up the numbers.
Get back about road maintenance. We have hundreds of thousand of prisoners idle. workem'
With asphalt being the next black gold.
http://canada.theoildrum.com/story/2006/10/20/142436/03
Unless they feed these prisoners some pretty interesting beans I think we have a problem.
Now your starting to see my point methinks.
We can't have our asphalt and eat it too ( Canadian asphalt sands)
Maybe you should not impose what You think "should be." You may lack much information which might otherwise explain what appears to You as an aberration.
"but the actual oil $ per square yard is MUCH MUCH lower. "
When you say the actual oil costs per sq. yd, are you including oil used in the production and installation from start to finish of the product (and all oil consumed by all equipment and machinary in those processes)?
Honestly though, I think the actual FF product used in asphalt is a relatively tiny fraction of the overall cost. As such, the FF ratio, even increased by several factors, will still not be a significant enough burden on new streets to see our transportation network decline over night.
You seem to "honestly think" a lot without knowing very much about your strongly held opinions.
Maybe you should be honest to yourself and question your own beliefs - try to disprove your own hypothesis.
When you quote a price for asphault, does it include the costs of fossil fuels in situ, in the production and in the application?
How much oil is used from start to finish for asphalt production and for laying the stuff down on the road? Where do the cost of Fossil Fuels enter the equation?
http://www.spokanejournal.com/index.php?id=article&sub=2816&keyword=
That took about 30seconds to find with google.
Come on Hothgor its not hard to do a little homework.
Why don't you just call you city councleman/woman. I'm sure they would be happy to explain the road works budget to you. At the very least your city's budget should be public domain you can look it up yourself.
- Fewer contractors are acting like an monopoly on asphalt production. Their collective power is increasing prices instead of reducing them.
- Fewer workers are working in the road laying sector, causing these companies to increase pay, which increases the cost per yard.
- Our road expansion has increased at a higher statistical rate recently then it has in the past. If a resource is stressed, the prices go up. It may have almost nothing to do with a 3 fold increase in oil prices.
The problem with doomers in general is they find a problem, and try to assign the blame for the problem on their fixed world view. The world in general is vastly more complicated then they think it is!Hothgor, did you even read the article?!?!
But I guess Steve Robinson, vice president of Spokane Rock Products Inc. is a "doomer" too.
You obviously can't do a google search for yourself so I did it for you.
You obviously can't read the article, so I did that for you too.
Please don't make me have to think for you as well.
Discretionary spending my cease. That is, unnecessary pork projects will end. But the required maintenance will continue as always.
I can't comment on that because its far outside of my field of study.
But I sure wish you knew what you were talking about, cause it would be welcomed news if it were true.
Past performance is no indicator of future growth.
From the article (you still haven't read it yet have you?)
Oil prices obviously don't play that big a roll in asphalt prices as some people at TOD try to state they do.
Did you even read the quotes?!? Obviously you are too lazy to read the article. But did you even read the quotes I pulled out for you? I even put the important bits in bold. Did you even read the bold text?!?
You have apparently decided that oil prices have little to do with the cost of road maintenance. Your only proof of this is you see your town's road being repaved.
As far as I can tell you haven't even read the qutotes from the article, let alone the article itself. It cleary demonstrates a link between oil cost and asphalt cost.
The quote even explains why your city was able to repave its roads recently.
You refuse to research how much repaving that road costs, or where the money comes from. But continue to throw it out there as proof.
Hothgor this is tedious beyond belief. I don't think you even read my posts before you reply. You are seriously lowering the level of discourse on this site and its a shame.
You are correct about asphalt prices. Estimating large project costs is part of my mundane job, and the prices of steel, concrete, and asphalt have gone through the roof. Bids are coming in three times what was expected. There are rumors of hoarding and fears of outright shortages. Part of it is demand from China. Part of it is the cost of energy; they are all energy-intensive materials.
Back in the '70s oil crisis, we were forced to add "adjustment factors" to fuel oil and asphalt in our contracts. If we didn't, the contractor would go bankrupt, because prices rose so steeply and unpredictably. That doesn't benefit anyone.
Last year, we were forced to do the same thing for steel and concrete.
This is why I have my doubts about whether solar or wind or nuclear can save us. I think most people vastly underestimate the cost of infrastructure, and how that cost relates to energy costs.
I have been at the EIA website trying to read files that they say are "Excel" files. I downloaded and installed the Microsoft Excel viewer and it says "Excel cannot read files of this type".
When I click on the file from the EIA to download it, when the screen says "open, save, etc. it says the file type is an "ASPFILE". Is that an excel file?? can anyone help?
Go grab open office.
http://www.openoffice.org/
I dunno, I just think it will go up. Maybe. Somehow.
"A 700-page Government report on climate change has predicted the 'biggest global economic crash since the 1930s' - paving the way for a host of new green taxes."
I'm still watching A History of Oil (available free), which is quite interesting.
Thats not 1%
Thats more like 6%...
The whole thing is just about making Blair feel good (like at least I tried, good) before he retires after that big war thingy didn't really work out like Cherie's spiritual adviser said it would.
Ever been on a commitee that agreed about anything, and the whole world has too agree....?
The general thrust of Stern is that if we spend 1% of GDP reducing emissions now, we will avoid spending 6% of GDP cleaning up the mess later, which according to Stern is a no-brainer. Assuming his figures are correct.
Just pop open a car hood...a V8 will yeild 8 crack pipes...can you guess how? :)
When I worked on the ambulance I saw crack pipes made from about anything that won't melt or burns at a higher temp than crack. I have an xray from a patient I picked up with chest pain. She had a glass pipe and copper wool in her right main stem Bronchus. She asked for it back after they scoped her....
It will take the SUV with it and the Japanese car makers will provide lots and lots of small cars with efficient engines and hybrids as replacements. Ford and GM will suffer but finally reinvent themselves.
People will buy less crap at Walmart and buy more quality products with high energy efficiency. They will also buy solar panels, insulating materials for their homes and heat pumps. The solutions are out there, they will say, and if you build an energy efficient home, they will come.
Peak oil will come and it will go. It will be nothing like WW II. That one was hard and our parents and grandparents had to fight to win. Peak oil will be easy. An easy inconvenience. Ten years from the peak people will remember and say "Yes... I remember, it was in the newspaper that oil production peaked and gas became expensive. And then we got the new hybrid and our gas bill was not too bad, any more."
Peak oil will come and it will go. We knew it since 1956. Wy did we ever got upset about it? A problem you see comming for fifty years is not a problem. Unless you are very afraid of squirrels, maybe.
:-)
Just wait until you have rely on ships for half your natural gas, or gasp breeder reactors to fuel your hybrid car fantasy after peak oil. How do you think you are going to power the electrical part of the hybrid car cycle without resorting to burning masses of coal if North American NG is also going into decline?
http://nyc.theoildrum.com/story/2006/10/22/144644/27
http://www.awea.org
Seriously, there are more ways to produce electricity than to produce crude oil, and clean ways. The problem is infrastructure. If we can get America to plug hybrids, we will be able to produce the electricity, and if we are smart (there's an open question, all right...), we can do it without rising natural gas consumption.
Roger Conner known to you as ThatsItImout
It seems the EVs and PEHVs solve our energy storage problem for us in a very unusual manner! How ironic would it be if we never had to build more NG power plants to meet our 'peak' energy demands. We just fill our cars up at night with power, and drain them during the day for peak energy.
I bet the big 4 are rolling in their sleep right now at the possibilities!
Hothgor,
General Motors is saying they are working up a plug hybrid, not just a hybrid, as we speak. Who would invest in GM, though, right?
Back at the front of the year, I had several friends betting on GM being bankrupt by now...I asked them if they had the balls to sell GM short, RIGHT THEN, knowing that GM's road was almost over, they laughed, said, well, yeah, helll it would be a good bet...of course none of them actually did it, at least, I hope none of them did...
look at GM shares over the last 6 monthes
http://finance.yahoo.com/q/bc?s=GM&t=6m
UP, 70%plus!!, the fastest upward mover of all Dow Industrials during that periond!
Just goes to prove, ALWAYS, ALWAYS, ALWAYS bet against the business press and the popular wisdom!!
Roger Conner known to you as ThatsItImout
If GM wanted to do something apart from just resurrecting the EV by another name, or some other rearrangement of the US auto industry deck chairs, perhaps it should look at producing more fuel efficient petrol-driven vehicles, or diesel engines instead.
After having read a paper on how we are going to use solar pannels at night to recharge the batteries of our hybrids I begin to understand that we are quite desperate to find solutions.
They're not 'using' solar energy gained during the night. They're using solar energy gained during the day and stored in the EV/Battery pack. Honestly, where did you come off with them saying that 'we recharge our cars using active solar panels that work off moon/starlight'?
What they are proposing is that the new EV/PEHV fleet be constantly plugged in during the day and night. The cars wouldn't recharge during the day unless there is enough power to do so, and instead would discharge their power back to the grid as needed based on a signal from a GPS satalite. Basically, each car would act as a 'mini power plant' for the grid, helping us meet peak grid demand in a controlled fashion without using NG plants. The cars are 'smart' and wont discharge more then half their total charge on a given day.
At night, these cars recharge using a home solar/battery system thats been storing power all day, or being plugged into the grid buying cheap power at off peak hours, helping moderate the load power companies use during the day and night. Its win /in for both sides. Note that excessive power production during the day from wind/solar could be channeled into these cars as well, and not wasted on other storage facilities, especially in areas where alternative storage is impractical.
Truth is, now that you mention it, it does seem like that rooster goes off whenever he wants to, day or night.
"Stew" the rooster is his name around these parts.
Given all that is known about their limitations it is naive at best to think that renewables or contemporary methods of nuclear power generation will ever be able to replace fossil fuels at the level of consumption enjoyed today.
Do the research - you'll find out why.
Why?
Nyah nyah nyah nyah nyah, I'm not telling you."
From shales on up there is enough recoverable uranium to power light water reactors can produce power for 20000 LWR economically for the next 25000 years. For molten salt reactors, which we have reactor years experience with from the ORNL site, this extends into 1/4th of a billion years. There doesnt seem to be a problem in energy generation.
For fuel: Run CO2 and hydrogen over cobalt catalysts and generate diesel fuel. Run CO2 and hydrogen over different zeolites and generate methanol and then to the methanol to gasoline process. We'll probably have infrastructure for millions of barrels per day worth of production from coal liquefaction plants after the coal runs out.
Use the sulfer-iodine thermochemical process or steam electrolysis powered by these nuclear reactors. It produces hydrogen for about twice the cost of natural gas reformation today.
For the CO2 source, just make cement in a cement kiln driven by nuclear process heat for the low temperature end that does the preheating (and calcinization if you're running a high temperature reactor) then finish the process with an induction furnace at the high end. We'll need the cement for civilization anyways and the cement absorbs CO2 as it cures. If you need more CO2 than you get from cement plants, just do the lime burning and let the quicklime absorb the CO2. Its all carbon neutral.
Given costs of nuclear hydrogen generation and coal to liquids synthetic fuel infrastructure (converted to H2/CO2 synfuel plants) I estimate competitiveness of entirely synthetic fuel plants being not more than maybe $250 per barrel, and probably much cheeaper. Steep, yes. Probably not civilization crippling though and scalable to hundreds of millions of barrels of oil equivelant per day.
Eventually solar power will become more competitive. Theres 10^16 watts falling on the planet and we only use 1/1000th of that for running civilization. Someday before the fission fuel runs out I'm pretty sure we'll figure out nuclear fusion also. But then, we only have several hundred thousand years if we burn the uranium and thorium as fast as we can.
Where is that from? It doesn't seem to jive with the IAEA Red Book, which talks about 4.7 Million tonnes of conventional uranium (~37400 reactor-years) and 35 Million tones if you include phosphates (~278520 reactor-years). 20,000 reactors over 25,000 years is 5,000,000,000 reactor years, which is about 1800 times the Red Book estimates.
20,000 LWR would burn through the IAEA estimates in a little under 14 years.
This is not the same as resources that can be mined for competitive production of nuclear power, let alone energy breakeven, especially given that most of the price of nuclear power is the capital of the plant itself. Only a very small percentage is in mining, milling, and refining.
http://www.nuclearinfo.net/Nuclearpower/UraniuamDistribution
One might certainly imagine that well before we started processing ore in the 10-20 ppm range we would start reprocessing fuel, and perhaps field fluid fuel thorium reactors.
http://www.thoriumenergy.blogspot.com/
Fluid fuel thorium breeders would give us economic access to about 40 trillion tons of uranium and 120 trillion tons of thorium, and we have several years experience with test reactors.
Prove that these "new" nuclear reactor models are commercially viable. It's all pipedreams...
But if you dont want to talk about new designs, fine; You don't have to. France runs over 2/3rds of its energy on the old ones and we just demonstrated that the light water reactors themselves still have thousands of years of fuel left, and does fuel reprocessing.
Pipedreams!
Err, what about waste disposal? And France is a net energy importer despite having the 2nd biggest nuclear power program in the world.
Rubbish - only breeder cycles can offer any hope of longevity.
If they are trying to wean themselves of fossil fuels they have done a miserable job of it;
Oh, that's right they're importing oil because ta da you can't put a nuclear reactor in your petrol tank, can you?
MTOE = million tonne oil equivalent. That means its not oil they're importing, rather total energy conviently converted to oil energy potential. Once again, you are comparing apples to oranges. Try again!
PS: I get a great laugh at LOTOC when they state that it takes 28 barrels of oil to make one car. It doesnt take 28 barrels, it takes the energy equivalent of 28 barrels of oil to make a car. As many others have commented, we can fairly easily create energy via fission, hydro, wind and solar with only renewable and biofuel inputs. It doesn't matter if the energy equivalent is equal to a set amount of oil when your using an alternative that doesn't use oil. Your being suckered in by misinformation misconstrued as actual fact.
262.9 MTOE total - 101.4 MTOE Nuclear- 14.8 MTOE indigenous hydro/gas = 146.7 MTOE imported oil, gas, coal
That means its not oil they're importing, rather total energy conviently converted to oil energy potential.
No it clearly seems its oil they are importing.
I don't know what you've been smoking buster, but can I have some?
Now pay attention.
France is the 5th largest importer of oil. The difference between its energy production and consumption has been mostly due to its oil imports. Why? Because you can't run a car in France on atoms.
It is the world's biggest importer of LNG.
Despite 1/2 its electricity coming from nuclear energy France is nevertheless the 5th highest carbon emitter in Europe, and 12th overall in the world.
France's energy production and consumption have both been gradually increasing over the past ten years, and now are about 11% greater than they were a decade ago.
Reference
SaturnV wrote;
This should have read: It is Europe's biggest importer of LNG.
What about it? Theres no technical barrier to sticking dry storage casks in several large parking lots.
Indeed that should have been 2/3rds of their electricity. Its illustrative of the scalability of nuclear power
To nitpick in kind, the US nuclear power program is larger, though a smaller percentage or domestic electric production is nuclear.
Oh well, just ignore the mineral content of the Earths crust then.
Breeder reactors have to be competitive on more than fuel efficiency, given how common uranium is.
And uranium can still be reprocessed out of spent fuel without resorting to breeder cycles.
Why not just put it out by the kerbside and wait for the garbage man to collect it?
I stand corrected - my comment should have read more than 50% of the electricity is derived from nuclear energy based on DOE/EIA statistics.
However you are missing the point which is that despite France's nuclear program it is still a net importer of energy, especially in the case of oil, because (and again) you cannot put a nuclear reactor in a petrol tank.
How much energy will it require to extract ore at such low-level trace concentrations? the more dispeersed the mineral the higher the costs in retrieval. How much more expensive again as the supply of cheap oil that fuels the machinery of extraction declines?
The breeder cycle is a highly complex one - too complex it seems, which is why they are still only in the experimental stage after all these years.
Yep, and it's dirty, dangerous, and expensive which takes us back to the first point - what to do with all that waste?
The University of Melbourne in Australia did a study on this exact thing:
http://www.nuclearinfo.net/Nuclearpower/UraniuamDistribution
"The Rossing mine in Nambia mines Uranium at an Ore concentration of 300 ppm at an energy cost 500 times less than the energy it delivers with current thermal-spectrum reactors. If the energy cost increases in inverse proportion to the Ore concentration, shales and phosphates, with a Uranium abundance of 10 - 20 ppm, could be mined with an energy gain of 16 - 32."
Breeders arent deployed because uranium is cheap as dirt and common as lead.
That link was about plutonium extraction via the PUREX process. That certainly isnt the only or the most desirable reprocessing regime. Using molten salt electrorefining you can separate the uranium from transuranic actinides far cleaner without fuel cooldown.
I can tell you what to do with the waste. If you think reprocessing is too expensive or dirty, in spite of the billions of dollars worth of fission platinum group metals locked away in them, then just stick it in the parking lot. Its a very small amount of waste compared to any other industry.
What do you say to that westexas?
You cant have one without the other :P
Anyhow NG is not a viable alternative to crude oil since, unlike oil, you cannot move it from one place to another except trough pipelines. One way the US has managed so far is by moving energy intensive production overseas, and importing the NG in the form of finished products instead, such as artificial fertilizer.
The idea of special NG terminals and tankers will turn out to be a pipe dream metaphorically and literally.
The problem is vastly more complicated then you would like it to be. So I will say it again. If westexas can state repeatedly that KSA and the rest of the world are where the lower 48 was in 1970, then that must also hold true for NG production. That being the case, I expect NG to peak in a similar time frame in the future, around 2035. At the very least that means a decades long plateau in total hydrocarbon production.
Call me crazy...
:-)
Well unless your in debt to your eyeballs or have a lot of money to invest. Basically financial positions look like they will overwhelm peak oil for the foreseeable future
The people in debt will tank and wee need to soak up the extra money from peak oil finances for a few years. So at the end of the day the losers need to obviously loose and the win real inners needs to invest economic futures. For a while the winners will be buying the assets of the losers. I.e buying the American housing debt. But once this is over it will get serious.
America squeak buy one more time as foreign investment flows into the housing market.
My point is this huge housing surplus will be soaked up by external mouny but this is it for the US.
InfinitePossibilities said,
"Peak oil will come and it will go. We knew it since 1956. Wy did we ever got upset about it? A problem you see comming for fifty years is not a problem. Unless you are very afraid of squirrels, maybe."
And you folks thought I was an optimist! Well, I am. But infinite seems to disregard the sheer weight of EFFORT that is needed now, and FAST, to make the transition as easy as he depicts. We are an aging population. We are already short of technicians, engineers, and bankers and investment firms that understand the coming wave of change that is needed NOW and FAST to make this transition. Every professional person I talk to is simply praying and wishing upon a star that the status quo will hold until he/she can reach retirement, they are too old, too secure to play the risky change game...let the kids do it. Unfortunately, the "kids" are far fewer in number than the prior generation, are fed up with high tech, except for playing video games and snatching music off the web, their view is, let the Chinese, Koreans, Japanese do it. So be bleed to death as a nation either way, whether peak oil does it, or whether we let the remaining value added high tech markets fade away from U.S. markets.
I agree with Infinite on one thing: We have seen this coming for a long time...Hubbert in the 1950's, the energy crisis and the Club of Rome warnings in the 1970's, Toffler and "The Third Wave" in the 1980's, and many others wrote and talked about it to large audiences.
But, the so called "brave new world" of technology somehow fell behind schedule. I was looking at a Life magazine from 1963 the other day...oh, the fantastic renderings of the space stations, the rockets flying from them, the cargo ships mining asteroids and the moons of the planets for all the rare Earth minerals we would ever need to build fuel cells, solar panels, and of course, THE ASSURED BET, nuclear fusion would be easily ready by the 1980's or '90's, so much clean free electricity that we could convert hydrogen until the cows come home, and leave the lights on rather than risk wearing out switches...
But, for want of a nail....it never came to be, at least not yet, and maybe not in time. The schedule fell down, and as we know, the nature of catastrophe is missed timetables....a miss of a few minutes wrecks trains, a miss of a few seconds can crash planes, the faster things go, the tighter the schedule becomes, and we blew the schedule big time...in energy, a miss of a few years and a few bucks investment at just the right time and opportunity can have greatly magnified effects.
BUT, the opposite is also true. The right voices, the right argument heard by the right people at just the right moment can have wildly magnified effects. Thus, the value of TOD and other forums. Just the right banker, the right young technician may amble by here and see just the right post. We can hope. But that is why we keep the effort up.
As Matthew Simmons recently told the Defense Department, we have no "recruiters" for young enery technicians and planners. Let's change that first. Then, if the timetable and schedule works perfectly, we may be able to pull off the smooth and peaceful transition that infinitepossibilities thinks we can. But the odds are still long, and despite our beleif that God protects drunkards and fools, the outcome cannot be assumed to be assured in our favor just because we think we are nice folks. We will have to earn this one.
Roger Conner known to you as ThatsItImout
By far the best post on TOD for months!
I have been saying the same things for over a year. It is not what we could do. Or should do. Or can do. Or will do. It is all about what we are doing and have done in the face of what needs to be done. As you state timing is all in being succesful at any endeavor. Without good leadership we don't do the right things at the right time and don't reach far off goals.
And we haven't had real leadership in the U.S. government for decades. We have had self serving posturers keeping themselves employeed. If that dynamic changes there is hope. If it is politics as usual we are screwed no matter what our potential options are.
Taking those actions today will yield good returns immediately. Personally, I have used a bicycle as main family transportation for the last 30 years, putting the ~10K/yr savings into investment properties, stocks, bonds, etc. Retrofitting our houses and properties for energy efficiency over the decades has provided excellent tax-free investment returns. These returns will only get better as energy gets more expensive.
Certainly it makes sense to work for political change, but in the interim, there are plenty of sensible individual actions each of us can take. I've got to ride my bicycle home so I can fulfill my responsibilities as Dem precinct captain, so I recognize political change is necessary, but not sufficient.
The main economic burden of peak oil will (have to) be carried by the general population. Politics can, and in the past has, made it harder for people to behave sensibly and done pretty much everything to raise the cost of an inevitable shift to renewable energy.
But I also think that in a society where autonomy and self-responsibility are celebrated daily, it is up to everyone individually to wake up, smell the roses and to decide if they want to start paying the bill today or if they want to wait until reality sends in the repo men.
It is my only fear that the part of the population which can afford the cost least, will wait longest with that decision and be hit hardest. Living day by day is not a strategy that will guarantee economic stability in times of rising energy costs.
I can only hope the Democrats know that and will take measures.
- Peak oil is absolutely real and needs serious political attention.
- Peak oil is a wonderful backdrop for "Angst" fantasies.
On theoildrum you can see both take a hand in hand stroll in the park. There are plenty of people here who understand the problem, that it needs action and what will be involved technically.And then you have the folks who are simply afraid of squirrels and need a shrink way more than rational advice on how to build squirrel proof burrows.
In my post I was talking to the last category of people. If you are afraid of something and your imagination is blowing up a well understood problem into a life-threatening "Angst", you might want to seek professional help. A blog like theoildrum is not exactly the right place for you folks, though. You need to ask yourselves what deeper fears are being triggered by the facts of peak oil and how you can work through them. I can point the problem out to you. I am not going to pretend I know the kind of therapy you need or how to talk you out of your fears. That is not my field of expertise. Consult a specialist if you have a lasting "Duck and Cover!" trauma.
As for technical advice, I can only tell you what everybody else can tell you:
- If your gas bill is too high, buy a smaller car. Get a hybrid if you are into tech-toys. Get a small diesel, if you are not. Or just a small gasoline engine driven car. The keyword here is: SMALL.
- If your heating bill is too high, isolate your homes. Put new windows in. That investment would have paid for itself ten years ago, it will pay for itself even faster now.
- If your electricity bill is too high, get rid of that space heater. Replace your lightbulbs with fluorescent lights. Where I live I can get a fluorescent light for 50 cents. I will save those 50 cents in a few months in electricity. It will last ten years.
- Replace your fridge. Chances are, it is the most inefficient walk-in model the store had. You bought it cheap, or so you thought. Now it is eating you alive and poisons our atmosphere with tons of CO2 each year. My grandpa used to say "Only the man who buys quality, buys cheap.". Grandpa, you were right. I miss you.
- Do your kids have to watch tv all day long, thus wasting hundreds of kWhs of electricity each year? Wouldn't it be better for their social development if you put them out on the street to play with their friends? I grew up interacting with other kids and not in front of the tube. It shows... I am not afraid of squirrels. I am not afraid to tell you what is wrong with America, either. I will kick a friends butt, if needed. I consider you my friends.
- If none of this seems to satisfy your need for energy independence, invest the money that you would carry to the shrink in a solar array. You can buy one 250W panel these days for the equivalent of less than ten shrink hours. Succesful therapy takes hundreds of sessions, so that ought to pay for at least a 2.5-5kW system.
- No matter what you do, talk to the wife, first! She might not appreciate that brand new solar panel in the back of your pickup while the kids need new shoes. In other words: do what you can, not what you feel compelled to. Inform yourself. 50 cents fluorescent lights can save you as much energy as a $2000 solar system if you have done nothing to your lighting, yet. And you would have to be a millionaire to install a solar system that can produce the amount of energy your 5.7L V8 burns on your three hour commute. I bet you felt like a millionaire when you bought that iron, didn't you?
- In other words: be smart, not desperate.
Apologies, ThatsItImout, I wasn't really answering your post. I could go into details on what we agree and on what we don't, but I found it more important to point a few things out to everyone. The most important one is maybe this:If you are waiting for the politicians to solve this one for you, all you are waiting for is a kick in the crotch.
Why? Simply because all the politicians can do is to force you to replace your car, your lightbulbs, your walk in fridge, to isolate your home etc.. They will do it with a hefty energy tax. That is how governments change behaviours: they raise taxes and give tax incentives. That is all governments can do. YOU will still be the ones who will have to change your cars, replace your lightbulbs, get a smaller fridge etc.. No toothfairy will come and do any of these things for you. There will be no army brigades marching through the streets of your neighbourhood to help you remodel your homes.
You can bitch about it and wait for the government appointed crotch kicker or you can go to "Hom Deppott" and "Siirs" on the weekend and get the stuff you need to get started. And don't forget to visit your friendly "Toy Otta" dealer or to take a look at a SMALL "Hon-Dai!".
I have a 980 sqft circa 1895 house with natural gas heat.
I can reduce my energy costs by 1/3 by having insulation blown into the walls, attic, and foamboard put in the basement ceiling. Currently my utility will rebate 20% (up to $750) of the installed cost of the insulation, and the feds will rebate 10% (up to $500) of the cost of the insulation. With the rebates I'm looking at a payback time of less then 3 years.
I could save another 1/3 by switching to an on demand (instant on) hot water heater. ($300 utility rebate and $300 fed rebate available for a $1000 unit) Installation is expensive though at ~$1900. This will pay for it's self in 3-4 years.
Small/Cheap/Easy fixes any homeowner can do include: insulating any heating ductwork or hot water pipes, installing weatherstripping in doors and windows, and
installing electric outlet gaskets.
These things make sense even if you don't believe in peak oil. At a four year payback you're looking at a 25% return on your investment. It's a no brainer.
Practical examples are always better than general advice.
And did you notice? With his upgrade he supports the local companies that do the foam installation, the hot water heater installation and the local companies making the materials and tools. In effect, since the payback time is four years, three years worth of heating cost could have been re-invested in homegrown products and services instead of just blown out the chimney. These service companies and manufacturers pay taxes and employ people... more employed people mean more people who can afford to install energy saving products...
It is a no brainer. No doubt about it.
I used to fear things like massive oil wars and our leaders declaring oil wars that "will not end in our lifetimes" that are horribly destructive, destabilizing, and expensive.
But then I read your post and realized this was just my angst! Here I am worrying about oil wars and nuclear brinkmanship when all I need to do is get rid of my space heater and buy some energy efficient lights. Silly me!
(the new you)
As for the oil wars... they are not happening, are they?
Well, actually, they are, but they are being fought with money, not with weapons. You can be sure that oil companies are under enormous pressure to secure new contracts. But we have yet to see a military machine being set in motion to support "the home team". Certainly the Europeans won't do that, ever, and the US is so tired of war that that ain't be happening either. China's problem is how to burn less carbon, not more. They are already suffocating and they know it.
See... a little bit of logic helps with fears. It's like whistling in the dark, just using the frontal lobes.
Money used to buy weapons, you mean? And the best part is, we're buying weapons for our enemies, too.
My favorite "theory" about it is that Chimp got angry because Saddam tried to put a hit on his Daddy. Or that is what Chimp thought.
That is about as rational a reason as I can find to go to Iraq. And since Chimp behaves generally like an absolute monarch, the idea of personal revenge in conjunction with a military trying to play a "molto grandioso" aka "Shock and Awe" piece and a few political theorists with limited real world experience making up a "One Superpower world = Superman comic book happy end" theory and putting it to test in what they thought was an easy target makes perfect sense.
This is my own hypothesis, of course. I am sure you have yours. And I bet we can both find about equally many real world data points to prove either of them, that is NONE.
In hindsight, I think, historians will simply settle on calling Iraq II the result of a political blunder without equal. It happened to people who wear blinders the size of SUV tires... big deal. The world will recover.
And we both know: no military action will ever create a single drop of oil. To the contrary... all this flying around and gunning around is quite a waste of good fuel.
:-)
Historians will have no doubt about the reasons for our involvement in the Middle East in general, and the Iraq War in particular. Oil, pure and simple.
How about "peak sanctimoniousness" - any professional help available for that?
I think I did address that adequately, didn't I?
:-)
Before Peak Oil imposes a huge drop in energy consumption, I fear that nations will first shift towards huge pollution and environment devistation in an attempt to keep the status quo--a "tragedy of the commons" on a world-wide scale. People in the USA might accept higher gasoline (diesel) prices for a while, but when the lights go out and the refrigerator stops working the environmental regulations will go out the window. People in less fortunate countries where most citizens rely on high-yield crops requiring high-energy fertilizers will have much starker choices.
I predict a huge increase in coal use as oil and natural gas diminish. Coal is already the main (more than 50%) electricity source. Coal can be turned into jet fule and diesel. We'll wind up with a 65 MPG diesel SMART that effectively emmits as much carbon (from ground to tailpipe) as a current 15 MPG behemouth (when the SMART is powered with coal-to-diesel and the behemouth is using current oil).
So, as oil and natural gas become scarce, we'll face a decision of consuming less or (by burning coal) polluting much more. Given the nation's past and current decisions regarding energy/pollution tradoffs, I assume we will decided (collectively, but not intelligently) to pollute much more. "Peak Oil" will not be "man verses energy" but rather "man verses pollution."
This has been Al Gore's argument...that there is, if you count the high carbon release fuels, heavy high sulfur crude oil, coal, tar sand, and oil shale, enough fossil fuel to turn the world to toast before we get extremely short, albeit at high prices (but we seem to have the money) and exploding carbon release...this is why, in Rolling Stone, he essentially declared "peak oil" the secondary problem behind global warming. It's essentially a race now between energy production on a massive scale and carbon release on a massive scale. Without inventive design, artful construction, and clever engineering in conservation and renewable, you can have the energy, at least for a good while, if your willing to take the carbon and pollution.
Roger Conner known to you as ThatsItImout
Clean Diesel in Europe, another Euro myth? (short PDF fast download)
http://www.transportenvironment.org/docs/Press/2006/2006_10_25_car_brands_co2_en.pdf
Roger Conner known to you as ThatsItImout
Do me a favor guys. At least tell her I've been calling the price of crude right lately. C'mon, she won't know the difference.
But I'm intrigued about Nicole .. have I missed something? Skinny is my type.
Anyway I forecast that some time after 6 the oil price will bounce more than a buck.
By the way, has anybody noticed the constant "adjustment forward" in the ASPO Depletion Graph in their newsletters?
The newest one is actually shocking, as the Peak is pushed to 2010 at the earliest, but the top goes right off the top of the graph, something you never used to see, as Gboe of oil and gas is given now at top peak over 50.
More interestly, the slope of the curve post peak is flattening with oil/gas production as high in 2045 as it was in 2000...in other words, we still be producing more, according to this, in 2045 then we ever did in any year before this new century.(!!!) And when the chart runs out, in 2050, we would be producing as much as we did in 1988.
What does all this tell us? Well, for the rest of our natural lives, even with the worst case scenario, there is still going to be a LOT OF OIL AND GAS around, and, more importantly, this is a DEMAND and NOT A PRODUCTION PROBLEM.
Roger Conner known to you as ThatsItImout
Thats why I was never brave enough to buy long dated oil futures - bring on a sizeable and deep enough recession and even a 3 year position could be under water for the duration, a fact that far too many people ignore. I think the shock of the last 3 months maybe alerting a few people up to the fact that oil futures arent necessarily a one way bet.
yet again. Most of my old friends found "that oil futures arent necessarily a one way bet." back in 1982. What is worrying is the effect this will have on development of alternatives/conservation. In another post on this string, someone is bragging up the virtue of LNG, because there is a lot of natural gas in the world. True enough, but can America stand to be bled to death on money for oil AND natural gas at the same time? We may well run out of cash before we run out of gas, but it has the same effect, doesn't it?
Roger Conner known to you as ThatsItImout
Just as a blatant semantical argument, I'd like to note that peak oil has and always will be a demand problem.
Someday I'll geosequestar
And wake up where the clouds are far
Below me.
Where dioxide melts like lemon drops
Away below the chimney tops
That's where you'll find me
Somewhere over the rainbow
Skies are blue,
And the dreams that you dare to dream
Really do come true.
Maybe because based on current rates of consumption Australia would need to sequester around 200,000 tonnes or 520,000,000 pounds of CO2 per day just to reduce emissions by 20%.
Greenhouse gas is getting more attention:
http://www.esource.com/public/products/frs_ghg.asp
E Source Greenhouse Gas Inventories
Regulations to limit greenhouse gas (GHG) emissions are in place or are emerging in a number of states as well as in Canada, Europe, Japan, and elsewhere. California has signed into law the first U.S. GHG emissions cap on utilities, refineries, and manufacturing plants. In addition, shareholders, large investor groups, and insurance firms are increasingly pressuring organizations to estimate and manage their financial risks from climate change.
The time for GHG emissions reduction planning is now; the first step is to quantify your current emissions.
Saber Rattling
http://www.iht.com/articles/ap/2006/10/29/africa/ME_GEN_Iran_Gulf_Maneuvers.php
Iran calls adventurous a U.S.-led military exercise due in the Persian Gulf
The Associated Press
Published: October 29, 2006
TEHRAN, Iran Iran's Foreign Ministry on Sunday criticized the United States military presence in the region and slammed a US-led military exercise due to begin in the Persian Gulf, urging nations in the area to set up their own regional security arrangement.
Ships from the U.S. and five other countries are due to interdict a British vessel in the Persian Gulf on Monday in a mock interception of dangerous weapons technology. For the first time, an Arab nation, Bahrain, will participate in an exercise under the three-year-old proliferation security initiative.
And Israel is worried as well it should, and it won't be a small war if it happens:
http://www.timesonline.co.uk/article/0,,2089-2426886,00.html
Israelis put nuclear bunkers in gardens
Uzi Mahnaimi, Tel Aviv
AMID mounting fears that Iran is planning to obliterate their country, wealthy Israelis are shelling out on underground nuclear shelters in the gardens of their luxury homes.
The shelters, which cost at least £60,000 for a bargain-basement version, are built to withstand radioactive fallout, have fortified walls and doors and generate their own electricity and decontaminated air. Defence experts estimate that hundreds of such bunkers, many fitted with all modern conveniences such as bedrooms, kitchens and bathrooms, have already been built in private homes across the country and demand is soaring.
I had posted previously some rather poor disadvantages of wood gas stoves, precipitated by RR's post on Biomass Conversion and Eric's links and backing of the devices.
I spent a lot of spare time thinking about them and the methodology and concluded that there were many advantages,'pros' instead..but...
Depending on the desired usage. I tended to view them as heating replacements instead of cooking devices then I realized just how handy they would be for some one in survival-mode as we spin down into the possible and probable oncoming trainwreck.
I considered that for someone who needs to purify water, make a stew of wildmeat,just wash up, and many sundry other uses that they were just the right answer.
In the woods the perfect fuel is laying right on the ground and underfoot. Various twigs,branches,leaves and limbs from deadfall. Simple to pickup a sack full and tote them to your spider hole. Place on a ground cloth and use as needed.
No smoke or smell to signify your presence. Easy to operate. Abudant fuel and many other aspects that I see as important to surviving the situation whatever it becomes.
Even in suburbia the urban guerilla/survivor can likely pick up enough deadfall from landscape trees to fuel his woodgas device.
Making them from tincans couldn't be easier. Lightweight and no fuel (alcohol,whatever) to tote around. You could make double use of the tincans to store other items in you backpack.
So I am going to fabricate one to test the design. By searching I found huge numbers of websites and folks delving into these devices as well as complete plans on how to make and operate them.
Thanks Eric. I was wrong to think of them in the context I wrote of earlier. These are very cool items for survival.
Airdale
I'm still pro'ing and con'ing over whether to roast my own coffee, but if I do, that will be done outside!
In survival mode during the dieoff a house is nothing but a death trap. They just shoot you thru the windows. You are a sitting duck in a house when predators come.
Best be outside in the woods with a good set of binoculars and a rifle scoped on the house. Then you can defend what you have stored inside.
Better yet just leave the house , if in the burbs, for good.
Go into a national park or state park. Free land.