DrumBeat: October 5, 2006
Posted by threadbot on October 5, 2006 - 10:01am
Topic: Miscellaneous
Oil jumps on OPEC's first output cut since 2004
Oil jumped more than a dollar to above $60 on Thursday after an OPEC delegate said the producer group will cut output by 1 million barrels per day as soon as possible to prop up prices.Top world exporter Saudi Arabia will lower production by 300,000 barrels per day as part of the plan, the delegate said. Oil has slid from a peak of $78.40 in July, alarming OPEC, partly due to brimming inventories.
Why Are Saudis Approving Cheaper Oil?
Unbelievable as it may sound, Saudi Arabia is practically applauding the 22% plunge in global oil prices since July. On Sept. 19, Saudi Oil Minister Ali Naimi called a price of about $60 per barrel "reasonable." Analysts think the Saudis could even live with a price in the mid-$50's per barrel. "The Saudi price target is probably lower than the rest of OPEC; they are still happy at $50 per barrel," says David Kirsch, an analyst at PFC Energy in Washington.
The price of oil has been dropping steadily since peaking at $US78.40 a barrel in July. One bullish commentator, Michael Lynch, was reported in Forbes as predicting a fall to $US45 by mid-2007 and even lower in 2008.
Oil a better bargain than Starbucks?
If you think you’re paying through the nose every time you fill up at the pumps, think again, says Matthew Simmons.Crude oil now costs 11 cents per cup, says the energy industry expert, who recently returned from Beijing, where he paid $2.25 for a cup of tea at Starbucks.
"Eleven cents a cup — it is the cheapest thing we sell in the world today. It doesn’t make any sense," said Mr. Simmons, head of Simmons & Company International, a Houston investment bank that focuses on the energy industry.
Nigerian militants call off attacks in oil delta
Militants in Nigeria's oil heartland said on Thursday they had called off attacks on troops after two bloody gunbattles and would fight only in response to actions by the military.The Movement for the Emancipation of the Niger Delta (MEND) said it had killed 17 soldiers in separate firefights in the Niger Delta on Wednesday but would now hold back.
"This whole thing wasn't supposed to happen this way. We were still in the concluding stages of our plans to completely halt Nigerian exports in one swipe," a MEND spokesman said in an email to Reuters.
From the Wilderness still thinks we're heading for Olduvai: Industrial Society Rides An Unstable Plateau Before the Cliff
(A graph from TOD is also featured.)
US car buyers want reliability, not fuel economy: survey
Could 2007 Be Even Worse for Detroit? Despite drastic cost cuts and new vehicles, history and market forces could conspire to do even more damage to U.S. automakers next year.
BP faces declining profitability
You've heard of "peak oil", the idea that world oil production is already close to or even at its peak. Now comes the idea of "peak profits", the possibility that oil profits too may have reached their zenith.
UAE to focus on alternative and renewable sources of energy
French PM Unveils Environmental, Energy Saving Plan
The Oil Conspiracy: Is the Bush administration manipulating oil prices to win elections?
Tom Whipple on The Peak Oil Crisis: Election 2008
ASPO-USA World Oil & Gas Conference is heading into the final stretch before the actual Conference in Boston, 25-28 October.
Conference registration rates will go up after October 9th, so if you've been planning to register but putting it off, now is a good time to do it.
The registration fee provides breakfast and lunch for 2 days and receptions for Wednesday and Thursday evenings.
We now have a special evening session on October 25th on climate change with Dan Schrag of Harvard, Cameron Wake from UNH (ice-core drilling results from Antarctica and Greenland) and Charles Komanoff from New York City, advocate of a universal carbon tax to reduce CO2 emissions.
This will be followed by 2 very full days focused on oil and gas depletion (latest information from the experts), alternative fuels including Milton Maciel from Brazil to talk about sugar-cane-to-ethanol, alternative power sources from wind and solar PV, transportation, global energy security, economic impacts of energy scarcity, and local-to-global energy policy presentations.
Saturday morning we will have workshops and breakout sessions on Reducing Your Fossil-Fueled Footprint, Climate Change, the Internet and Peak Oil, energy modeling and net energy analysis, and more.
The News and Updates section of the website indicates that the conference had about 250 registered as of September 29. At this registration rate, they are projecting about 450 will attend. The site will hold about 600, so they would like more to encourage more to attend.
Speakers include Matt Simmons, Stuart Staniford, Tom Whipple, and Ali Samsam Bakhtiari. This is the agenda. I will be attending - hope to meet some others from TOD there!
Look back at Jimi Hendrix, Jim Morrison, and Kurt Kobain. I did. And I learned lessons. Either I did, Or I'm setting you up.
Staniford is trying to make a disappearance, And my ham-handed spelling pre-dates this attempt. Yarga-Yarga-Yo - Give me a belly dance.
Yeah, I'm setting you up. Or I'm setting Stuart up.
Thanks for filling in for me with the link. That's what happens when you're in a hurry and don't check things. I will be there doing media liaison, coordinating, whatever. My wife will be at registration. Her name is Mary so be sure and let her know you are there. Hopefully I will be surrounded by a bunch of reporters trying to get interviews with the speakers. We have about 30 media people at this point though there are several video groups with large crews. One big name news service so far.
Rick Block
I have seen the future, and it is heavy. Very heavy.
There is of course much more CO2 coming from the fuel that powers the heavy equipment used throughout)
I guess it gets down to fixed vs marginal costs....?
This year, Shell and Total have announced long delays for some projetcs, and there may well be much more of that, certainly now costs are rising fast due to lack of people, equipment etc.
However, since the greens (and everyone else) are increasingly calling for alternative fuels, the question becomes "are there any viable alternative fuels?"
http://www.planetsave.com/ps_mambo/The_News/Mother_Earth_News/Who_Needs_the_Electric_Car?_2006100479 12/
For instance the knee jerk reaction to nuclear power generation is a prime example. Granted nukes have issues, but they will become a needed part of the mix for a transition until enough technology gains are made in Wind, Solar, storage and other "green" technologies to supplant nukes. Currently, most people state that Wind, Solar, and storage technology is not ready to supplant nukes.
That leaves us with coal or nukes to fill the void, its choose between lesser evils time at that point.
Lack of high-grade uranium ore
See also: www.oxfordresearchgroup.org.uk/publications/briefings/factsheets.htm
lots of CO2
There is a short 4 page summery and a longer technical report.
The 4 page summery has a description of the "energy cliff" (point where EROEI hits 1) by ~2070.
The longer report has a discussion of why breeder reactors have not been used (and why they most likely cannot function).
If these claims are true, then this is much more bleak than I was expecting from nuclear. I did not expect the fuel would run out this quickly. All these new reactors going into operation will just speed the end.
Then you haven't thought it through. In addition to the fact that usable Uranium ore is not unlimited (as mentioned above), you need to account for the mining, refining, shipping, concentration, etc. This all takes a lot of energy. Then there's the building of the plant, and its subsequent decomissioning, and guarding forever. Of course you have the wastes to think about forever. That, to me, is a deal-breaker.
Then when you look at the mining, refining, shipping, concentration of the ore, the building and subsequent decomissioning of the power plant (they don't last that long, really), you will realize that CO2-wise, nuke plants are not the answer, and, of course, good-for-life-on-earth-wise, they make no sense whatsoever and never have. It's even debatable if, over the life of the plant, the technology is that much of a positive EROEI.
The economics, energetics, greenhouse gas issues, and politics of building, feeding, decomissioning, and guarding forever the wastes is all wrong, if you're thinking "green" (whatever that means).
There are some good analyses of these things out there - I can't seem to find the paper that I thought I had bookmarked, but Google is your friend.
No, nuclear power makes no more sense now than it ever did. In the immortal words of Amory Lovins, it's a future technology whose time has past. Another great Lovins quip: "Using nuclear energy to make electricity is like cutting butter with a chainsaw". Sure, you can do it, but honestly, you can't say it's the appropriate tool for the job...
- sgage
Some people say that, but I would argue that they're misinformed (or working for competing industries).
Nuclear has a very long lead time, around 10 years in the US. Wind is already the largest form of planned US generation in 2007, and in 10 years solar will be where wind is now.
My gut feeling is telling me its somewhere in between the best and worst stated returns. But I'm still looking for additional material to help make up my mind.
Substantially better than oil, lately.
Wind is, what, 0.6% of generation?. Say they add 25% of that, that would be 0.15% of total installed capacity. Or a complete collapse of the economy, certainly if some capacity is taken out because of age. Not credible at all.
Don't forget that wind's capaciry factore is around 25%.
Let's see the numbers.
http://www.nei.org/documents/Energy%20Markets%20Report.pdf
And, here are the numbers.
Planned Capacity in 2007:
Natural Gas 9,111
Coal 1,450
Wind 11,754
Hydro 160
Wood/Wood Waste 249
Solar-PV 97
Geothermal 155
Biomass 215
Petroleum 0
Landfill Gas 44
Waste 20
23,255
Here are the capacity factors:
Cap Factor
Natural Gas 0.376
Coal 0.71
Wind 0.30
Hydro 0.296
Wood/Wood Waste 0.224
Solar-PV 0.188
Geothermal 0.9
Biomass 0.9
Petroleum 0.262
Landfill Gas 0.9
Waste 0.5
Here are the figures adjusted for capacity factor:
Natural Gas 3,233
Coal 1,053
Wind 3,526
Hydro 47
Wood/Wood Waste 56
Solar-PV 18
Geothermal 140
Biomass 194
Petroleum 0
Landfill Gas 40
Waste 10
8,316
And here are the percentages:
Natural Gas 38.9%
Coal 12.7%
Wind 42.4%
Hydro 0.6%
Wood/Wood Waste 0.6%
Solar-PV 0.7%
Geothermal 1.7%
Biomass 2.3%
Petroleum 0.0%
Landfill Gas 0.5%
Waste 0.1%
100.0%
You can see that wind is the largest contributor, at 42%.
I looked up some coal numbers. since I think coal will, of necessity, be the no.1 power producer. I'm sorry this DOE file is a pdf. it has cool info though.
Whenever you see a number as low as that for coal, an antenna should start beeping. 153 new coal plants planned for the US, capacity 93 GW. There are hardly any "green" restrictions on coal in the US today, but they are expected, so expect frantic construction, way beyond 153.
I know building natural gas plants for electricity has been huge the past 10-20 years. Natural gas is much cleaner, and cheap right now.
Here's a pic I stole from the DOE pdf: I'll steal more, but am doing 826 things at the same time right now.
NOTE: it states 8 GW of new caol capacity, not 1.05.
I showed you that when we had this debate before.
The world produces 106m tonnes of steel a month.
100,000 wind turbines is going to be less than 1m tonnes of steel. What people are complaining about is the price of steel has gone up (but then it's gone down again)-- that is the China factor (but they are nearly now a net exporter of steel).
And of course any alternative plant is made of steel-- coal, gas, nuclear what have you.
See how much lower the coal numbers are than the NETL report for the next several years? I think the answer comes in the footnotes at the end the NETL report, where we see that much of the data is several years old.
So, I think the NEI numbers are reliable. Please let me know if you're still not sure, and if you can find further clarifying info.
Keep in mind that coal plants take a while to plan and build, so the recent rise in natural gas prices and utility interest in coal (as well as and wind) won't be reflected in 2007 yet. The real competition between wind and coal will come a couple years later, when the country has to decide whether to go with coal or wind.
My point is that wind is a viable choice - it is large enough to do the job, should we decide to be just a little cleaner and a little more forward thinking.
So it is worthwhile to project the future using current technology (it works) BUT a fudge factor for better technology needs to be included to come up with a realistic estimate.
Best Hopes,
Alan
Why is this so remarkable?
1-they're invisible
2-the winds are so strong and reliable that you get 60%+ capacity factors
3-turbine cost is a linear function of size, but power is the square of the size: double the size, cut the cost/kwhr in half - but if they're invisible size doesn't matter
4-offshore is traditionally twice as expensive because of the underwater construction in 20 meters of water - this is traditionally only offset by the higher capacity factor - but the floating base is much cheaper
5-very high quality offshore winds exist on all coasts, including the southeast, which conventional wisdom holds has very litte wind resource
So, you're talking maybe 1/3 the cost/kwhr of existing wind farms!!
It will take 14 months to build the second GW.
That is geometric growth.
The US is quite striking: 10GW of installed capacity, from nowhere 5 years ago. Obviously Germany, Spain and Denmark are even more impressive (but smaller economies)-- Germany and Spain about 12GW, Denmark 3GW but nearly 20% of all electricity generation.
What the US has that the UK doesn't have is compliant planning regulations-- big chunks of the prairie where no one seems to mind much if someone plonks down a turbine farm (I won't mention Cape Cod ;-).
however
there is a tax distortion in that (Congress hasn't renewed the subsidy programme past 2007-- there is a typical stop-start pattern to these, where it gets renewed, but there is a period where no capacity is installed, in between). There is therefore currently a worldwide shortage of turbines (but that can, and will be addressed-- the Chinese are already starting to make them).
Wind can, and is, growing at an incredible rate. 100GW of capacity in the US by 2020 is not now inconceivable.
Even if the US started on new reactors now, and there were not long planning inquiries/ licensing processes, they wouldn't start production before 2014. So 2014-2020 is a reasonable window, by which time I expect new nuclear capacity will only offset retired capacity.
I expect the gap will be made up by coal. The best we can hope for is that the coal stations are designed for the time when CO2 sequestration becomes a legal or economic requirement. That time, I believe, is coming, but the political will is not yet here to implement it.
I continue to be skeptical that sequestration is all it's drummed up to be. The scale that it is now being done on doesn't really speak to the viability of the scale that would be needed to even hope to affect the trajectory of GW.