DrumBeat: October 9, 2006
Posted by threadbot on October 9, 2006 - 9:16am
Topic: Miscellaneous
Asia-Pacific faces global warming disaster
Millions of people in the Asia-Pacific region could be forced from their homes and suffer increasing disease, cyclones and floods caused by global warming, scientists have warned...."Degraded landscapes and inundation of populated areas by rising seas may ultimately displace millions of individuals, forcing intra- and inter-state migration."
Oil prices advance as OPEC president proposes output cut
Uganda president: Oil reserves found
KAMPALA, Uganda - Oil has been discovered in western Uganda after years of exploration, the president announced Sunday, saying he expected production to begin in 2009.President Yoweri Museveni said the country plans to build an oil refinery, with Uganda initially producing between 6,000 to 10,000 barrels a day.
EU given reassurance over winter gas supplies
Chevron to invest $6 bln in Indonesia gas fields
JAKARTA (Reuters) - Chevron Corp. plans to invest about $6 billion to develop gas fields off the coast of Borneo, aiming to crank up flagging Indonesian gas output, a senior official at the country's oil watchdog said on Monday.Indonesia, the world's top liquefied natural gas (LNG) exporter, has failed to meet its contractual commitments to traditional buyers such as Japan, South Korea and Taiwan because of a slump in production.
Nippon Steel honors sanctions, halts North Korean coal imports
New policy on Russia splits German leaders
The German Foreign Ministry is preparing a new Ostpolitik, or policy toward the east, that aims to tighten ties between Russia and Europe just as President Vladimir Putin, who visits here next week, is under heightened international scrutiny on issues from energy to Georgia....While the paper is political in nature, the subtext is clearly energy and Europe's increasing dependence on Russia to meet its energy needs.
Chad settles oil taxes dispute
Chad has settled a dispute with two foreign oil companies after they agreed to pay the country more than $280m (£150m) in overdue taxes.
It seems a little too convenient. As the stretch run to the midterm Congressional election approaches, gasoline prices fall precipitously. The sudden shifts in prices seem to come out of the blue. And unlike copper or pork bellies, oil is a commodity always charged with political significance.
Pick up and go: Car sharing may be the answer to the urban dweller’s dream of having a car and not keeping it.
Inco blockaded in New Caledonia - while WWF signs a deal
Isn't it high time that mining critics spoke out about the consequences of massive tar sands exploitation in Canada and Venezuela? After all, much of it is mining under another name, requiring the extraction of huge chunks of land by shovel-and-truck.
With cheap gas, Venezuelans buy big SUVs
Venezuelans see cheap fuel as a birthright. Filling up an SUV's tank with high-octane gasoline costs roughly $3 — less than two jugs of drinking water.And as oil exports have boosted the economy, the country has experienced a boom in auto sales, including large four-wheel drives that have lost appeal elsewhere as fuel costs have soared.
Brazilian ethanol is sustainable and has a very positive energy balance - IEA report
Work starts on biggest land-based wind farm in Europe
Gas tumbles, but don't get used to it
Lundberg Survey: Pump prices fall nearly 15 cents a gallon, but colder weather will drive them back up.
Output from Exxon Russia field to decline from 2008
YUZHNO-SAKHALINSK, Russia - Oil output from the Exxon Mobil-led Sakhalin-1 project will peak in 2007 and start to decline immediately afterwards partly because it failed to agree with Russia to extend the field's territory, a project member said on Monday.
http://www.forbes.com/2006/10/06/energy-oil-gasoline-biz-energy-cx_db_pm_energy06_land.html
I've only started digging into about 10 different stories over there.
The world will be flooded with new supply in a low oil price environment.
I want him to tell me how that's going to work. I want details. I want specifics. I want to know exactly where the oil will be coming from. I want to know where any substitutes will come from and by what dates. I do not want history teaches us, the markets will provide, technology will save us, etcetera.
I'm ready anytime.
You should see Deep Ocean Energy Resources -- A Critical Analysis also. Oh, this reminds me that there is a "Jack #2" appraisal going on at Orphan Basin off Newfoundland. If the test is "successful", expect a similar media blitz. Otherwise, you won't hear a thing unless you look hard.
Hope that helps...
But he asserts that while some regions will peak and decline, in effect the world will virtually never peak and decline, or the worst case is that the peak (or more likely plateau) is decades away. This is exactly analogous to saying that while individual oil wells will peak and decline, the total production from the field--which is the sum of production from individual wells--will virtually never peak and decline. Anyone else notice a flaw in this reasoning?
With apologies to Prodigal Son...
Step 2- ???
Step 3- Profit
With apologies to the underpants gnomes.
There are other touts and shills around. Note that the Hudson Institute, another recipient of Exxon funds, has been busy insinuating the Jack2 tall tale into various articles its retainers author.
Facts and logic will not dissuade Lynch or his ilk. Their progeny, however, are likely to remember them with little fondness.
- Some areas really don't ever decline (KSA)
- Enough new large fields are continually being found to offset the declining ones.
Come on, drink the kool-aid.No. And your point is?????
Tell how many millions of barrels a day we're going to be getting from tar sands, CTL, GTL, Venezuelan heavy oil, etc. by 2015. Include the economics with start up costs, long lead times to implementation, etc. for each. Think about the CTL & GTL throughputs. Think about Hugo Chavez. Think about the fact that tar sands development is in deep trouble right now, let alone 5 years or 10 years out.
And finally, think about how Robert or anyone else has calculated the EROEI. What is the precision of that?
Then get back to me.
Say what you will about how fast you think they will scale up. But it is fast enough that Canada will abandon their Kyoto commitments, and therein lies my point.
Finally, how I calculated the EROEI was merely a way of putting an upper bound on it. The lion's share of the energy going into extracting the tar sands will be direct natural gas usage. If we have a figure for natural gas, and a figure for how many barrels of oil was produced from the tar sands (which we did), I can rough out an EROEI. Also note that after I calculated that, someone linked to an article in which Suncor claimed the same EROEI as the one I had calculated. I am guessing they have a pretty good idea of their energy inputs and outputs.
And the reason it is important is that it tells you that we will continue to try developing tar sands, as opposed to something like oil shale where the EROEI is much worse. Money keeps pouring into tar sands. It will keep scaling up.
But PhilRelig and Michael Lynch are still learning.
As for the EROEI, the "lion's share ... will be direct natural gas usage." For PhilRelig & others -- and Lynch if he's eager and willing to learn about what he gets paid to do -- see my Oh, Canada! -- Natural Gas and the Future of Tar Sands Production and also Extreme Production Measures to see what a mess the tar sands production is in.
Re: EROEI was merely a way of putting an upper bound on it.
Right. Our readers need to understand that the world they inhabit was built on EROEIs of ≥ 20:1 -- and also
As you and I have both said, these "unconventional sources" will not scale up fast enough to avoid the peak. At the point where these sources become available on scales that make any difference, the world would just be managing the tail. Moreover, if the world decides to assign a cost to carbon (via cap & trade) as a first step or finally decides to do the right thing -- mandating sequestration of some % carbon -- then this changes any marginal costs calculation.
OK, fine, it will have adverse effects on the environment. But suppose TPTB chose to ignore that (which I expect will increasingly be the case in the long run anyhow). Wouldn't an all-out effort significantly ameliorate the decline to be expected in coming decades, possibly holding what would have been a 5-6% annual decline at a manageable 2-3%, thus successfully enabling the current growth-oriented economic paradigm to continue for a generation-or-so longer?
In fact, it's what has been going on from the time oil had a 100:1 EROEI, of course, which is now, let's say, 20:1, if that. That and using exponentially more of it. Work harder to get less result.
That's why we have climate change. 2nd law.
Hell, yeah! It would guarantee that the planet wouldn't be habitable for our grandchildren. OK, that may be a bit of an exaggeration. Still, it will be tough to locate the exact Beach Front Property line in Florida and Louisiana, not to mention Bangla Desh and a lot of other places.
Click to Enlarge
But seriously -- throwing money at the problem is not going to work. Believe me, Phil, we here at TOD do pay a lot of attention to unconventional subsitututes for crude oil.
Still, I like this -- a Manhattan Project effort to do exactly the wrong thing.
But I'm not a well man.
I note, however, that he has significantly modified this in a post below by conceding more like a 3:1 EROEI when it comes to gasoline derived from tarsands.
I had also consistently used that 3:2 number, but could never find a source for it. Once I did find some sources, the numbers appeared to be quite a bit better than 3:2. This actually makes sense to me, because I don't believe things have gotten bad enough yet for us to start developing sources with a 3:2 return (unless it is subsidized).
I note, however, that he has significantly modified this in a post below by conceding more like a 3:1 EROEI when it comes to gasoline derived from tarsands.
That wasn't a concession, it was a clarification. Those who quote 3:2 are only talking about the oil extraction step. The 8:1 refers to the oil extraction step. If you want to take it all the way to gasoline, the numbers would be something like 4:1 based on my back of the envelope number, and the 3:2 number would drop probably down in the 1.3/1 range. (Don't have time at the moment to work it out exactly, but the refining step is going to be at least 10/1).
The Permian extinction happened when CO2 concentrations reached 1000ppm.
We are at 381ppm now, and going up by 2ppm a year, a rate which is accelerating.
On the 'business as usual' model of the IPCC, we are over 800ppm by the end of the century.
What we don't know is when, at what ppm, the process becomes self fulfilling, ie it gets warm enough that methane release and plant decay and death begin to accelerate the accumulation of CO2. At which point, human activity becomes irrelevant (turn up the air conditioner dear, it's hot out there ;-).
Scientists used to say that 550ppm was probably the maximum safety level. Now the consensus seems to be shifting towards 450ppm. We will be there before the half century is up. Some say 300 ppm ;-).
Just today, for example, Tom Whipple's weekly ASPO energy review repeated the canard that the EROEI for tarsands is 3:2 or thereabouts (if Robert Rapier and Suncor are indeed correct, that is). Since Tom Whipple is a well-informed commentator who does this full-time, one could consider this to be symptomatic of the movement as a whole not having done their homework.
The problem is that all these types of controversies are inherently complex, and therefore it is easy to obfuscate the truth with lines of argument having a high prima facie plausibility.
I didn't read that as them painting a rosy picture. It appeared to me that they were saying "Crap, our energy efficiency is lousy. We are only getting 8/1." Remember, these are oil guys. They are used to 20/1. The worst fields in the world get 10/1. Here they are getting 8/1, and admitting that they need to do better.
I would also add that this doesn't include the refining step. Add that and you are down to 3 or 4 to 1 from tar sands all the way to gasoline.
Thank-you for this injection of reality into the discussion.
Now where is it that the measurement of eroei for useful products exacted from the degraded tar pit hydrocarbon begins?
Hydrogen (stripped from natural gas) is added to the tar molecules as you know.
Is upgrading included in the 8:1 EROEI step or is it part of the "refining" step ?
Thanks,
Alan
If I understand their abreviations, then that is
800 cubic foot of gas per barrel of heavy crude oil produced. It doesn't include the further cost to refine it.
(I got that number from the publicly available data of one of the tar sands Income Trusts -- I think it was their 10K).
You are a true realist.
Keep up the good fight.
peace
Here's a shorter link, for those who don't want to click on the long one and screw up their formatting:
Forbes
Definitely worth a look.
Yes, thats an ad hominem arguement. Sometimes they're justified as an explanation!
In his own arguements he says the world has used half of the light, sweet crude and touts tar sands and oil shales as saviours without reguard to production costs or environmental costs, and uses this as an arguement that oil prices will decline in the future. This does not add up. But its what the Iron Triangle wants to hear.
They mention peak energy and oil but only as a way to frame solutions in a way to show they are non issues in the long run. The timing of this rosy outlook in Forbes (right before the elections) is suspect in my book. Why was this rosy outlook not presented in July when prices were sky high? More piling on for a downward price trend through early November?
I see collusion everywhere now! Paranoia or reality? Thanks a lot TOD:)
While a student at MIT during the Cold War, he studied national defense.
If we assume the Cold War started at about the time of Kennan's Long Telegram in 1947, and lasted through to the fall of the Berlin Wall in 1989 , then the intersection of...
(Cold War) && (Ancient University) && (Impressive-sounding course of study)
...must be pretty large. Plucky Underdog himself studied nuclear engineering at a university that started crumbling into dust long before the Cold War, but apart from a couple of lectures on energy economics (NPV, discounted cashflow etc.) it didn't qualify him to bloviate about oil reserves and production profiles. It was his subsequent decades in the oil business that qualified him for that, and if you ask him a straight question, you'll generally get a shrug.
"...Psychology is not inherently knowable," he says. "Geology is."
That's the giveaway. Clearly this guy has never looked at an electric log or seismic section, let alone a prospect map, or tried to work out why a late-life development well didn't flow to surface. I wonder if he even knows any geologists.
Dave Cohen wrote:
I want him to tell me how that's going to work. I want details. I want specifics. I want to know exactly where the oil will be coming from. I want to know where any substitutes will come from and by what dates. I do not want history teaches us, the markets will provide, technology will save us, etcetera.
That's the ticket. Field names, fluid specifications, locations, well numbers, dates, rates. Nothing less will do a thing for you in this market.