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DrumBeat: November 30, 2006
Posted by threadbot on November 30, 2006 - 9:30am
Topic: Miscellaneous
Costly fuel cools Americans' love for cars
HOUSTON - High gasoline prices not only slowed fuel demand growth and cut sales of gas-guzzling vehicles in 2005, they also prompted Americans to drive less for the first time in 25 years, a consulting group said in a report Thursday.The drop in driving was small -- the average American drove 13,657 miles per year in 2005, down from 13,711 miles in 2004 -- but it is more evidence that the market works and prices help control consumption, Boston-based Cambridge Energy Research Associates said.
"Price matters," CERA Chairman Daniel Yergin said.
You can't conduct an orchestra with an invisible hand: The problem with carbon taxes
Historically, large-scale infrastructure changes take place only via hands-on government involvement -- involvement that not only subsidizes technology but helps shape its deployment. This can consist of public works, or grants of land and rights of way that help shape where infrastructure is placed. You can find examples in List 1 at the bottom of this post, ranging from canals and railroads to the internet.
Tom Whipple - The Peak Oil Crisis: The View from Capitol Hill
While up on Capitol Hill discussing the prospects for the peak oil message in the new Congress, I was brought up short by a question from a hill staffer. "Can’t you guys sharpen the time frame when oil production is going to peak?"“Telling us that all sorts of bad things are going happen sometime in the next five or ten years really is not that useful. Here, in the Congress we constantly hear about so many crises about to befall us— Iraq, budget and trade deficits, global warming, avian flu, Medicare, social security, housing bubble, terrorism, and immigration, to name a few — that trying to put peak oil threat in its proper perspective is difficult.”
Energy expert urges conservation
The days of dancing in oil around exploding derricks is over, and it’s past due time to think about conserving crude consumption, said Scott Waterman. Waterman, who works as the State Energy Programs Manager for Alaska Housing Finance Corporation, is looking to find ways to build more energy-efficient homes as he speaks around the state, taking on a number of education programs.
Canadian Energy's "Exit Stage Right" Plan
With prices approaching $1,500 per barrel, what would ever make investors like Charles Morgan want to sell their stake in the oil industry?Well, Morgan had noticed that the price of recovering the oil was increasing every year, and foresaw even further rises in the cost of his operations.
The world knew that oil wouldn't last forever, and people like Morgan thought that at the current rate of production the source would soon run dry. Fortunately for him, he recognized this trend and was able to get out of the industry at peak prices, generating a healthy profit for himself.
Peak Oil to Peak Gas Is a Short Ride
Could an 'African Kuwait' Be in the Making?
The discovery of oil in the small West African island nation of Sao Tome and Principe could help turn one of the poorest countries in the world into a sort of "African Kuwait."
South Africa Poised to Embark On Nuclear Route for Power
Opportunity knocks for biofuels industry
Oil prices have eased in recent weeks on the international markets, but the same cannot be said for agricultural commodities.World stocks of cereals are at their lowest level for more than 20 years, and supply and demand is expected to tighten over the next 12 months.
India is desperately looking for long-term gas supply contracts with gas-rich nations in Central Asia, Africa and the Middle East to meet the acute fuel shortage that has hit its power plants, which operate at half their capacity.
Brazil May Not Meet Domestic Ethanol Demand
Brazil, the world's biggest ethanol producer, may struggle to make enough of the fuel in the crop season ending March to meet domestic use because higher prices elsewhere are encouraging exports, C. Czarnikow Sugar Ltd. said.
Russian FM warns West against discussing energy security without Moscow
MOSCOW: Russia's foreign minister on Wednesday warned the West against discussing ways to reduce energy dependence on Russia, saying that would not help energy security.
Iraq's oil industry in grip of despair
The present state of Iraq's collapsing oil sector, its economic lifeline, is bleak and its future looks far worse, despairing officials say.Another damaging oil attack this week, the prospect of British troops handing over the oil city of Basra and virtual civil war have all but crushed hope for Iraqi officials battling to keep exports flowing to world markets.
"One thing is sure. The worst is yet to come," an Iraqi oil industry source said by telephone from Baghdad.
Think tank says Alberta should reap more oil royalties
Biofuel Markets Hinge on Biomass Progress
The fast-expanding biofuels market could falter without significant progress in making fuel from biomass like plant stalks and wood chips, according to a report issued Wednesday.
WRC's 2006 Hurricane Prediction Verifies Again This Year
Stocking Stuffer for a Green Christmas: The $40 Carbon Credit Gift Pack
Naughty little boys and girls get a lump of coal in their Christmas stockings; green little boys and girls get...carbon credits to take coal gases out of the atmosphere and fight global warming.
California tries to terminate greenhouse gases
Arnold's risky power play: The Golden State's small businesses worry that a new energy mandate will dim their prospects.
The next little thing: New innovations coming from small businesses. Two of the items are energy-related: ways to tap the power of the tides.
Global energy demand set to rise: McKinsey
HOUSTON: World energy demand will rise by 2.2% a year through 2020, outpacing the 1.6% growth of the past 10 years, according to a McKinsey & Co report...."Under all scenarios, you see future energy growth being stronger in the next 15 years than in the past despite some pretty significant attempts to increase efficiency,’’ said Diana Farrell, director of the McKinsey Global Institute, which spent a year studying energy demand worldwide among sectors including residential and industrial.
GM working on electric version of SUV: Automaker also plans biofueled Hummer within three years, CEO says
Auto industry should speed fuel economy fixes
While plug-in hybrids and hydrogen fuel cells are likely one day to help cut U.S. gasoline consumption, major fuel savings can be achieved now if automakers put existing technologies to work under one hood.
It's Electric!: The Tesla Roadster — a hotshot sports car that runs on batteries
Angola to ask for OPEC membership
While officials in high ranking positions and most brokerages seem to be sanguine about the prospects of north american natural gas supplies, one voice of reason has come from a surprising source. Raymond James.
http://www.raymondjamesecm.com/industry_1300_main.asp?indid=71
Click on above link and then on Energy Stat of the week. Direct link does not work.
Raymond James paints a picture that is even worse than that depicted here.
Specifically it hits on Branett Shale gas production. This was surprise to me as Raymond James says "First Year Decline rates are about 65%!!!" Mind you this is supposed to be the average.
There is table out there which shows decline rates in some cases exceeding 70%!!.
Raymond James analysts believe rig counts will rise 12% in 2007 utilizing every existing rig and still gas production will be down about 2% in USA.Although RJ points out some scary stats the "down 2% production " is actually based on very conservative numbers i.e. overall decline rates of 2004, mobilizing of every possible rig and very little rig migration.
The supply demand in our friendly neighbour is no better. Barring last week's canadian NG storage data, there were 21 weeks of decreased injection/higher withdrawal compared to 2005. Canadian storage is now 10% below last year.
One nasty winter and things could get pretty bad.
This also ties into the India natural gas shortages story Leanan posted above. They passed-up some opportunities to get some LNG long-term contracts at what they considered "inflated" prices -- now they are paying dearly for that. The future U.S. natural gas supply will also depend on LNG to make up future shortfalls. There's no time like the present to start lining up that supply. Thinking ahead is the only way to go here. We Americans are not noted for our long range planning abilities, however. See Iraq.
Ron Patterson
Last year it was -49 and the 5 year average was -40.
-32 looks like about normal to me...maybe even better than normal.
http://americanoilman.homestead.com/GasStorage.html
Rick
Highly reminiscent of the offer to Nixon by the Shah of Iran in 1969 for a 10 year contract for crude at $1/bbl. Nixon declined figuring that oil had to go down in price from its obviously too high $1/bbl.
So, mature tight shale wells are a good long term source of NG. Better than most others.
Alan
Its a perfect example of the kind of prospects that we will see developed in the post-peak era-expensive, and not productive at commercial rates with old prices Operators are buying pipeline right ofway in people's backyards, using the common carrier statutes to condemn what they can't buy. Its so crazy its almost funny.
The article link is http://www.reghardware.co.uk/2006/11/30/pc_cooling_app/
And since this is not Slashdot or groklaw, no comments about anyone's choice of operating system.
just make sure you install the power management drivers in windows(cool 'n' quiet for amd cpu's(amd64 and newer) powernow(for older k7's with power management) intel's i think is called speedstep). then go to your control pannel -> power management -> and from the drop down menu choose 'minimal power management'.
in linux it's simpler.
suto root 'su'
go to
/usr/src/linux(symlink to the current kernel tree)
type
make menuconfigthen go to the following.
Power Management OptionsACPI --->
and then select the following (x = * for built in)
[x]ac-adaptor
[x]fan
[x]button
[x]video
[x]processor
[x]thermal zone
if your also on a laptop also select 'battery, ac adapter, and dock'.
then go to
power management options
cpu frequency scaling--->
before selecting the following.
[x] Cpu Frequency scaling
[x] Default cpufreq governer (userspace) -->
[x] 'Performance' Governor
[x] 'Powersave' Governor
[x] 'Conservative' Governor (choose this instead of 'On-demand because it's a smoother transition between states)
under this is the list of cpu drivers for frequency scaling.
choose the following for amd64 based cpu's
[x] Amd Opteron/Athlon64 PowerNow!
or for intel's cpu's
[x] Intel Enhanced SpeedStep
there are other drivers there depending on the arch and whether the system your running is a 32bit or 64bit system.
from then all you have to do is install your favorite cpu freq manager and then tell it what state you want as default(most likely conservative) and forget it :)
for those of you who are wondering why i called the linux method easier, you do not need to go searching for the driver on a cd or on the web before installing it's already in the kernel.
Personally, I use openSUSE, and power management is pretty simple from its 'Control Center,' though real tweaking is always done in the conf files - it is just that SUSE has always had the very unfortunate habit of rewriting them anywasy after the tweaking - YAST is a very mixed blessing.
One of the things that makes this application a bit more interesting is the social aspect - most 'marketing' hinges on higher consumption, while this makes conservation the goal.
Of course, making sure that the PC, monitor, and peripherals are truly shutdown to no electric use is a hardware problem. I use a powerstrip with an off switch. The draw of turned off equipment is easily 20W and higher.
i have tried to explain it to other people to use a power strip to really shut everything off.. though they stop doing it as soon as they find out that when they do that and turn the power back on and find they have to wait 20 seconds to a minute before they are able to turn on their lcd screens they ignore me..
Recall back in the August 31 thread, you provided TODers with an exceptional Bloomberg article on peak oil. The article mentioned that a GAO report on the issue was going to be released in November of this year. Was that report ever released, or did I somehow miss it? Can anyone elaborate on this?
The GAO is supposed to have a report out in early 2007, yes. No one has missed it yet. I think they've been working on it for about a year since it was asked for by Congress or at least some members of Congress. the Congressional Research Service of the Library of Congress does the research for it. I've been watching for it but I'm sure it's not going to be out until after the first of the year 2007.
Tom Whipple - "The Peak Oil Crisis: The View from Capitol Hill"
This gets you by during good times, but throw some major crises in the mix people are totally unprepared (i.e., response in New Orleans). If this does not change, we will continue to put band-aids on larger and larger cuts until the 1,000th cut becomes too much.
I'll also add that those who think they will move to the boondocks like me either as a family or a group need to recognize how long it takes to adapt psychologically, develop the necessary skills and to actually build the necessary physical plant. Based upon 30 years of country experience, my best case is 7 years from the time the decision is made to move.
Second, the goal from the Hirsch perspective is actually to satisfy a high growth in demand:
I interpret the Hirsch "wedge graphs" that way, as attempts to maintain energy growth.
I think people often present Hirsch as if "since we aren't doing the 10-20 years thing, we will crash" ... actually a closer reading of the original would be "since we aren't doing the 10-20 years thing, we probably won't grow energy as much as many people would like.
IMO that leaves us with a good opportunity for conservation to meet alt-energy half way. See also: Can Energy Efficiency Be as Sexy as Solar?
As an example, "more efficient cars" make a small impact in the Hirsch model because the model expects overall demand to grow (presumably because overall VMT will grow faster than small car share). That only works with low gas prices and production meeting ever-higher demand.
The key thing is that failure to meet that production-utopia opens doors to all sorts of questions, but it certainly does not prove any unstated proposition about what the world will look like when a HIGH energy growth curve is not maintained.
Here's the reuters article.
http://us.rd.yahoo.com/finance/external/reuters/SIG=11vg30000/*http://yahoo.reuters.com/financeQuote CompanyNewsArticle.jhtml?duid=mtfh65881_2006-11-30_14-04-12_l30750555_newsml
But if the parliament is being told, perhaps the info will leak? Or we might get an idea of what the MPs were told by what they say about Kuwait's efforts to increase/maintain production.
We will not announce it (the reserves)
publicly because we are not obliged to
Don't stick your nose in Kuwait's business where it doesn't belong! Take that, you snooping Oil Drummers!
"now go away or I shall taunt you a second time"
:)
-PoP
Bravo!
The Kuwait North development project with the involvement of BP, XOM and CVX may also be construed as the Iraq South project. Saddam attacked Kuwait supposedly because the Kuwaitis were siphoning oil from Iraq via horizontals.
The US departs Iraq and instead plants itself in friendly Kuwait and gets the oil from Iraq, anyway.
I wonder if that is technically possible. Anyone with technical knowledge of the area?
Good technical solutions to population control involving contraception exist but are impossible to implement without coercion and cultural changes. I do not think effective coercion will ever be used. Cultural change leading to negative population growth is happening, but not fast enough in most parts of the world.
So far as the USA is concerned, most, if not all of the population increase is from illegal immigrants and their children. I also do not think the problem of the flow of massive illegal immigration will be solved. Implementing of existing laws regarding the hiring of illegal workers, and changing laws involving secure identification and anchor babies seems unlikely to happen.
Just put me in the doomer group. I see no hope for future generations. I like the quote that Anyia ended a post From "SaturnV":
"In fact the application of more and more technofixes like the ones envisaged in this article, and elsewhere, to support increasing production and consumption will not only hasten the inevitable end of the energy sources and other resources that make them possible, but also ensure that the effects of collapse will be even greater than if it occurred today, because more people, infrastructure, and GDP will by then need to be supported when the bottom gives way."
That said, there are statistics that show correlations between education and healthcare availability with a reduced birthrate in populations. Whatever else might have been affecting the numbers there, it is enough for me to recognize that if we insist on our communities, societies and policies to be set up to provide both of these things, we have the best leverage to involve ALL the people around us to help discover and implement the solutions. If we do start to see a decline, we will also see a severe shortage in available labor. This is already a concern in North America, where the Boomers will be out of the workforce soon, without a sufficient supply of genexers, genWHYBothers, etc to fill those ranks.
There are many means to attack population growth without major coercion.
Throw ten billion dollars at my post and the barely-above-replacement fertility rate in the US goes down significantly. Possibly enough to match the immigration rate.
In Australia, you can get a 3 year implantable hormonal contraceptive called Implanon, with miniscule failure rates. For 20 bucks. 3 if you're on their national healthcare system. In the US (following FDA approval a few months back), an Organon spokesman said it's "likely to cost less than $1000."
Combined KSA and Russian Production/Consumption/Net Exports (Total Liquids):
- 19.64 mbpd/4.24/15.4
- 20.6/4.8/15.8
Production increased 4.9%Consumption increased 13.2%
Exports increased 2.6%
For 2006, let's assume KSA down 4%, Russia up 2%, combined consumption up by 13%.
Combined KSA/Russian Projection for 2006:
Production: 20.35 mbpd
Consumption: 5.5
Net Exports: 14.85 (a 6% decline, close to one mbpd)
IMO, KSA is in a long term decline, and I predict that Russia is about to start a long term decline. Consider the compound effects of a long term decline in production with a rapid increase in domestic consumption.
Meanwhle, back in the States
I also briefly compared the first 11 months of total US petroleum imports in 2006 to the same period in 2000. In round numbers our total petroleum imports went up from about 3.2 Gb to about 4.2 Gb, a long term growth rate of 4% to 5% per year.
Note that we have required ever greater petroleum imports every year, as our consumption has gone up and as our domestic consumption has fallen.
How did you arrive at that assumption? Are you taking existing year-to-date 2006 data and extrapolating it for the entire year? Please post your sources and methods.
For KSA, I was picking a midpoint between the current (presumably crude + condensate) production of less than 9 mbpd (8.9?) and last year's production of about 9.6. Note that the EIA is using total liquids for exports.
Relative to 12/05, I think that Russia has been lower for five out of the eights months of 2006, but most numbers I have heard put production up from about 2% to 2.5% over last year. Even the Russians are admitting to lower exports as consumption skyrockets (car sales up 11% year over year for example).
I need to try to track down total liquids production by country for 2006. For the final 2006 projection, I plan to use the best average year to date total liquids numbers I can find.
The general principle that I derive from your export-land-model is that, as a resource becomes more scarce, its distribution in the marketplace becomes skewed by how much control the producing countries have on the given resource.
I wonder if the ELM would hold true in very poor countries, say Nigeria, where there is no favorable treatment of the local population, hence little increase in domestic consumption. In Venezuela where gasoline is heavily subsidized, I would expect the model to manifest itself in the extreme. Would this be the case?
The principle is that, as a general (but as you point out not absolute) rule, net exports tend to be what is left over after domestic consumption is met. As you pointed out, in exporting countries that have subsidized energy costs, this is akin to pouring gasoline on a fire.
The really interesting period we are entering is this positive feedback loop, where rapidly surging oil prices increase the domestic demand in many exporting countries, even as their production begins to stagnate or decline.
Note that, as a general rule, exporting countries can export domestic production less domestic consumption (I estimate that this spread is falling at about 6% to 7% per year from the top three exporters).
Importing countries want to import domestic consumption less domestic production. Over the past several years, this spread has been increasing at about 4% to 5% per year in the US.
As these two trends--falling exports and increasing import demand--collide, the result is higher (much, much higher IMO) oil prices.
Note that in January, if I had proposed a 13% year over year increase in consumption for KSA and Russia, I suspect that I would have been banned from TOD as a dangerous lunatic.
Resolved: Evidence supporting a peak in world oil production is that world net oil export capacity, as predicted by Jeffrey Brown, is declining.
That limits the debate, so we don't spend a lot of time arguing whether HL for Saudi is correct, etc. That is not the issue I am concerned with. I am concerned that the export model is wrong, and critics will use rising imports in the future to discredit Peak Oil. So I want him to explain his model, and then argue his case.
Production cuts from October to November amounted to 745 million barrels per day according to the EIA.
Ron Patterson
OPEC met and made the decision mid-October. They had been talking seriously about it for at least two weeks prior to that.
The cuts were officially to have gone into effect on Nov. 1st. You yourself have stated we wouldn't know until the historical numbers come out at the beginning of February.
Well, I don't remember saying that but perhaps I did. I was simply wrong. The cuts have been confirmed by petroconsultants as well as by buyers.
Of course 745 million barrels per day is just over half the official announced cuts. So I don't see what the problem is. Let us remember that this is not a new thing with OPEC. They have cut production several times in the past and successfully so. Why would anyone think that no member would comply this time?
And of course the oil market will, after about a six weeks delay or so, confirm the cuts. There will simply be less oil on the market.
Ron Patterson
Here is the OPEC press release announcing the cuts:
OPEC Press Release, October 19-20, 2006
Part of the recent price runup seems to be a reversal of the skepticism that OPEC would actually go through with the cuts. I read yesterday that traders are accepting that a good chunk of the announced cuts have indeed occurred.
Ron Patterson
Caspian oil field to produce 25% more.
I wonder what other revisions will occur in the future at other upcoming projects...