DrumBeat: October 4, 2006
Posted by Prof. Goose on October 4, 2006 - 8:12am
Topic: Miscellaneous
CERA's Quarterly Report (PDF) sees three possible futures:
● Asian Phoenix assumes that current trends continue (no major disruptions in supply and relative economic and political stability). By 2009 overall costs will rise. The biggest increases will be in steel and engineering/project management (25 percent); smallest increases will be in equipment, bulk materials, yard capacity/fabrication, and land rigs (10 to 15 percent).● Break Point assumes that oil supply difficulties limit production growth and that oil prices could go as high as $120 per barrel. Overall, by 2009 costs will rise even more. The biggest increases will be in offshore installation, offshore rigs, engineering/project management, and construction labor (30 to 35 percent); smallest increases will be in steel, equipment, and land rigs (10 to 15 percent).
● Global Fissures posits that widespread political backlash against free trade and globalization, combined with global trade and political disputes, lowers economic growth and weakens energy prices. Overall, costs will fall by 2009. The biggest cost decreases will be offshore rigs and offshore installation (-35 to -50 percent); the smallest decreases will be in engineering/project management, equipment, bulk materials, and land rigs (-15 to -20 percent).
Oil rises above $59, Kuwait supports
LONDON (Reuters) - Oil rose above $59 a barrel on Wednesday after Kuwait said it may join other OPEC countries in cutting output if prices continue their three-month slide.Kuwait's announcement offset expectations for a further rise in U.S. distillate and gasoline stockpiles, which helped prices dip to an eight-month low earlier in the session.
Chavez says oil should not fall below $60 a barrel
Pickup and SUV sales staged a September comeback amid falling gasoline prices and bigger incentives, automakers said Tuesday.
Qatar GTL projects face delays
General manager Lean Strauss said that Oryx’s operating costs were expected to soar between 50% to 60% due to the rise in commodity prices. Davies said other Sasol projects had also been delayed or hit by cost overruns, which was a global phenomenon.Spokesperson Johann van Rheede said: “The phenomena of commodity price increases, and engineering and construction skill shortages, is global and not limited to South Africa or Sasol.”
Davies said that an energy company, which he declined to name, had cost overruns of between 30% and 110% on capital projects.
Shell chief: Access to resources key
“You may find it remarkable to hear someone like me say this, but prices have been pushed to what we in the industry consider to be ridiculous levels,” Hofmeister said. “Not necessarily because oil reached $60 or $70 a barrel, but because it’s driven at a psychological level rather than supply and demand.”
BP production falls in Q3 as Alaska losses bite
LONDON (Reuters) - BP Plc expects its oil and gas production to have fallen 0.6 percent in the third quarter as losses at its Alaska operations and sales of oil fields outweighed gains from new start-ups and a benign hurricane season.
US, world reserves can offset Iran oil for 18 months
U.S. and world emergency crude oil reserves could replace a complete shut-off of Iranian oil exports for 18 months, avoiding an estimated $201 billion in damage to the American economy, the Government Accountability Office said on Tuesday.
Mexico leftist threatens energy reform protests
Mexico's leftist opposition leader threatened on Tuesday to launch protests against any attempt by President-elect Felipe Calderon to privatize the country's energy industry."We are not going to allow the privatization of the electricity or oil industry in any form," Andres Manuel Lopez Obrador, who narrowly lost July's presidential election, told Mexican radio.
“Japan’s overall energy approach lags behind the changes occurring in the world. The strategic importance of energy has a far greater importance than is appreciated in Japan,” the report noted. The report went on to say that the country’s very “existence as a state” could be jeopardized if it does not develop a more strategic approach to energy security.
Canada: Tories to regulate industries for CO2
Time for asking politely 'is over'OTTAWA - The oil and gas sectors, along with other greenhouse-gas-emitting industries, are to be regulated by the Conservative government under its widely anticipated plan to fight air pollution and climate change, Environment Minister Rona Ambrose said yesterday.
Kiwis create website that pays you to save energy
New security fears after kidnapping raid in Nigeria
Militants freed around 25 kidnapped Nigerian oil workers on Wednesday but five abducted expatriates were still missing in another part of the Niger Delta after an unprecedented attack on a residential compound.
Major Hurricane Danger Over for Year, Forecasters Say
Cut emissions now or pay, UK tells climate talks
MONTERREY, Mexico - Britain told the world's worst polluting nations on Tuesday that acting now to cut emissions of heat-trapping greenhouse gases would be vastly cheaper in the long run than doing nothing.
Global warming will threaten millions say climate scientists
Extreme drought, in which agriculture is effectively impossible, will affect nearly a third of the planet, according to the study from the Met Office's Hadley Centre for Climate Prediction and Research.
Coal-Based Jet Fuel Approaches Ready Ramp
University researchers have successfully powered a helicopter jet engine with fuel derived from at least 50 percent bituminous coal, a percentage that could go half again as high.Richard Branson interview
The British entrepreneur and Chairman of the Virgin Group Sir Richard Branson recently announced that the next ten years of profits from his transport business will be used to fight climate change. That will amount to something in the region of 3 billion US Dollars. And with his new Virgin Fuels business he hopes to improve and making new fuels such as ethanol and butanol.
The Axis of Diesel: Mercedes, GM and even Honda, are betting on a new breed of green diesels. The goal? To leave hybrids in the dust.
Business Week predicts The Future of Cars
[Update by Leanan on 10/04/06 at 11:23 AM EDT]
Summary of Weekly Petroleum Data for the Week Ending September 29, 2006: crude oil and gasoline higher than expected, distillates lower than expected.
Shia are a minority in Saudi Arabia, probably constituting about 5 percent of the total population, their number being estimated from a low of 200,000 to as many as 1 million. Shia are concentrated primarily in the Eastern Province, where they constituted perhaps 33 percent of the population, being concentrated in the oases of Qatif and Al Ahsa. Saudi Shia belong to the sect of the Twelvers, the same sect to which the Shia of Iran and Bahrain belong. The Twelvers believe that the leadership of the Muslim community rightfully belongs to the descendants of Ali, the son-in-law of the Prophet, through Ali's son Husayn. There were twelve such rightful rulers, known as Imams, the last of whom, according to the Twelvers, did not die but went into hiding in the ninth century, to return in the fullness of time as the messiah (mahdi) to create the just and perfect Muslim society.
I simply do not agree with you about Iraq. They could increase their oil production but nothing like the numbers you seem to suggest.
You wrote:
200,000? That is so far off it is silly. The Shiite population of Saudi Arabia is today probably around 4 million, virtually all of them in the Eastern Province where they constitute a heavy majority. I lived there for five years working for ARAMCO. Virtually all the management is Sunni and about 60 to 80 percent of the workforce is Shiite. Virtually all promotions to management go to the Sunni because of wasta.
I will not comment on this paticular thread further but I hope to have a lot more to say about Saudi Arabia in the future. The below link was written when the estimated population of Saudi Arabia was 20 million. It is now better than 25 million or more. Both links put the Shiite population at 15%. That is about right but it is about 70 percent in the Eastern Provience where all the oil is. Remember none of the very large cities are located in the Eastern Province. Therefore 3.5 million Shiites located there would constitute an overwhelming majority.
These numbers are what has leaked out of Saudi Arabia and you should treat them with as much respect as you treat their oil reserve estimates. In truth, only the gods know the true numbers.
Having worked for a very well-known management consulting firm about a 100 years ago, I think it is not too much of an exaggeration to describe them as intellectual massage parlors, a chief purpose of which is to make the client feel good about what he is already doing while at the same time giving him the illusion that he is participating in a rigorous objective analysis. It's not easy to pull this off, and Yergin et al are world-class masters of this art.
They've got a bunch of tin ears there.
As for the CERA report...I actually thought it was remarkably pessimistic. For them, I mean.
It was changed due to cultural sensitivites. Only Allah is capable of infinite justice. One interesting quote from this source (Naval War College Review, Autumn 2002, Vol. LV, No. 4) says,
On another topic, I'm reviewing a PO novel for an old friend. You would appreciate his treatment (albeit only one scenario among many possible) of how our very complex, JIT system might unravel when the BTU's / day drop below some critical threshold.
What is that threshold? How severe will the positive feedback be as one broken economic connection (JIT gloabl parts delivery to a small business, e.g.) causes 2 or more new ruptures, and so on? Will it look like a slumping process (slow) or a brittle fracturing event (rapid)?
I suppose that the answer to the last is based on one's vantage point. Also, I'm convinced by WT that the depltion rate, as measured by net exports, will have a strong bearing on the rate of de-complexification (sheesh, what a word!).
Ed
I know. Like I said, a bunch of tin ears. At the very least, you'd think they'd have someone research it before rolling it out.
And remember Dubya announcing his "crusade"? Oy.
I probably would. I do think that failure, when it comes, will be of the systemic variety.
Like Scotty said, "The more complicated the plumbing, the easier it is to stop up the drain."
Oh! I'm just goofin' - Pretty Boy.
Either I wasn't clear enough, or you take me too literally. The message I was trying to convey is that the naming of Yergin's three energy scenarios is just as BAD as the Pentagon's naming of it's various operations in Iraq and Afganistan. For some time now, I've been quite amused (and disturbed) by how surreal these names have become.
Someone once said:
"Advertising may be described as the science of arresting the human intelligence long enough to get money from it."
RE: "Yergin et al are world-class masters of this art"
John Locke (1632-1704):
"How many men have no other ground for their tenets than the supposed honesty or learning, or number of those of the same profession? As if honest or bookish men could not err, or truth were to be established by vote of the multitude; yet this with most men serves the turn. If we could but see the secret motives that influenced the men of name and learning in the world, we should not always find that it was the embracing of truth for its own sake that made them espouse the doctrines they owned and maintained."
Other than higher costs right now, what's the downfall to these new diesels? Kind of makes me want one of these bad boys, but I know the fuel is much more xpensive right now to justify my tradeoff since I already drive a 4 banger.
Yesterday I read another article on the new diesels, and VW is expecting their new Jetta diesel to achieve 40 city & 60 highway.
I've got 190k miles on my '96, and hope to eek out a couple of more years to see what Honda, VW, & BMW have to offer. A 4 door civic hatchback with a diesel-hybrid would be just about perfect.
And you may have noticed that in a few European countries, population ca. 150 million, gasoline consumption has been declining over the past year. And that gasoline and diesel are both part of the refining process (in the sense that, as I recall, though the fraction may vary, both are always produced even if you only desire one).
To put this together - Europe has been exporting excess gasoline to the United States, helping to keep the price of gasoline lower there, while keeping its diesel for the home market.
The result is that Europe is making money off American SUV drivers. Yes, those cynical Europeans have figured out how to make conservation pay - lucky Cheny and the other members of the Bush league are so generous.
Of course there are a large number of other factors, including the new sulfur requirements, but since gasoline is a fungible enough product - as was witnessed with Katrina - this seems plausible, and is possible to support factually.
Obviously, as diesel cars achieve greater market penetration the relative price of diesel will likely rise year round.
Okay, let me see: there are 688 million barrels of oil in the SPR (supposedly). We use almost 25 million barrels of oil a day in this country. By my caluclations, thanks to Excel, that's about 27 days of supply, not 18 months. Somehow I don't think other countries and the EIA would be happy to lend us their reserves, despite what this article says.
So, if we had Iranian oil supplies cut off for 18 months and wanted to make that oil last, even with our domestic oil supplies and other imports, that still spells serious rationing to me. And where is that oil going to go? Here's a hint: it ain't going to be into the gas tank of your SUV.
What they are referring to is the fact that global reserves could make up the 4 million bbd shortfall from Iran for 18 months. Stop trying to equate 18 month supply with 0 oil imports. Also, we use 21 million barrels a day, and produce about 7.5-8 million a day domestically. At least get your facts right.
"that still spells serious rationing to me.
Bushe et. al. says, "How on Earth do we get the American Titbabies to accept Peak Oil and the necessity of change... hmmm, no, we cannot 'splain it to them like they are three year-olds because the population has the attention span of two year-olds..."
A Necessary War and Fuel Rationing... that's the ticket. And regardless of the outcome, the rationing will continue indefinately.
FWIW This is more possible than we think !!
That has also been in the back of my conspiratorial mind.
What if the price of oil is being forced down somehow to allow room for it to spike upwards due to an attack and not be overburdening?
What if the October surprise comes from N Korea. Want the Dems to get in trouble real quick in the polls... Have Kim Jung Mentally Il proceed with a live nuclear test.
http://www.usnews.com/usnews/news/articles/061004/4korea.htm
The October surprise was a Democratic one. It is clearly the Foley thing. Are you not catching this?
Only Elephants pull scams, not Donkeys? Maybe I got my animals mixed up. Forgive me.
Sincerely,
The Shark
They saved this for the right time, and are trying to exploit it to the maximum. Not that I would expect differently, it IS politics, but don't fool yourself that they are going after this man for altruistic reasons. That goes double for the fact that boy (now a man) did not want this to be released, that somehow someone obtained these electronic messages against the will of both the boy and Foley (possible hacking and illegal computer crimes involved?).
What will be interesting to me will be the legal snafu surrounding this. If the age of 16 is legal in Washington and Virginia and he technically didn't break the law, well then the democrats just sold out a gay man because he didn't share their politics. Equal rights and all that only applies when you agree with them I take it?
Sorry but while Foley and any republicans who knew about this are culpable for what they did, the Democrats have managed to sink just as low by using the exploitation of a child for political gains when it could have been handled months ago, and in a quiet and civil way so as to spare the boy(who was identified on ABC) from a situation that will likely make the rest of his life all the more difficult.
But hey... getting power back to the democrats is worth smearing the lives of not only a republican congressman, but also a few children too.
People wasting time scheming, undercutting, BSing instead of taking care of business.
Nero fiddling....
Is anything in politics done for altruistic reasons?
...Oh, I forgot the vaunted 'spirit of bi-partisanship.'
'I'll hug your elephant if you'll kiss my...donkey.'
That your question needs to be asked is a guarantee this shall end badly,
- US imports no oil from Iran
- US uses almost 21MMBl's/d not 25
- US imports about 2.2 MMBls's/d from Persian Gulf; SA, Kuwait, Iraq, and UAE thru straights of Hormus.
688/2.2=312 days: If US lost PG imports, Price would go up, consumption down and the reserve would be good for about 18 months.If oil were an entirely sold in the free market (which it isn't), remaining supply would be allocated by price. With US currently consu