DrumBeat: December 10, 2006
Posted by threadbot on December 10, 2006 - 9:55am
Topic: Miscellaneous
Running on Fumes: How bad is the current energy crisis? Really, really bad, says oil expert Charley Maxwell.
I think we'll get through this problem by about 2020 to 2025. My worry is how we get there. We have a time when oil is winding down before anything is able to slide over and solve the problem. A lot of nuclear development is being brought along by the incipient shortage of future oil, and it's putting people into a proliferation mode. The whole world could come under this threat, and it's a terrible one. We could also be in deep trouble as a social system. How do we achieve fairness [in rationing scarce energy supplies] when the gridlock between rich and poor already stops us from having an energy policy in this country? We could see democracy entering its death throes.
Discover magazine's January issue always features "The Top 100 Science Stories of the Year." The January 2007 issue is out now, and the #1 science story of 2006 is about alternative energy: How To Live the Good Life Without Oil.
In September Chevron announced the discovery of a field containing up to 15 billion barrels of oil beneath the Gulf of Mexico, touting it as "a platform for growth for years to come." Read the fine print, though, and you get a different story. To recover the first samples of oil there in 2004, engineers floating 175 miles off the Louisiana coast had to send drill gear into 7,000-foot-deep water and penetrate four miles of rock. The company spent tens of millions of dollars on computer modeling, cutting-edge seismological tools, and exploratory drilling; just renting the drill rig cost Chevron and its partners more than $200,000 a day. The results suggest that oil from the new reservoir, called Jack 2, could cost three to four times as much to extract as oil from traditional locations, including rigs on land.
Peak oil era will be hard on Hawaii
In the next decade or two, a global energy crisis will be thrust upon us; the changes it brings will be felt first in Hawaii, possibly with a more devastating effect here than in the rest of the world. Hawaii must begin preparations now to cushion the effects, say the authors of this cautionary essay. The writers are a University of Hawaii political scientist and a UH-educated civil engineer. In addition, it was signed by 21 others representing a range of scientific disciplines in Hawaii; three chose to sign as private citizens. | ![]() |
Wind farms 'are failing to generate the predicted amount of electricity'
The claimed benefits of wind energy are called into question today by a study that finds few wind farms in England and Wales produce as much electricity as the Government has forecast.
...the initiative is aimed at driving down the cost of solar-generated power to the point that it's comparable to producing power from burning coal and natural gas.
Democrats Plan Oil Royalties Inquiry
House Democratic leaders vowed Friday to pursue a broad overhaul of tax breaks and other subsidies to oil companies in January, saying that their first target would be an investigation of how the government collects billions of dollars in royalties on oil and gas produced on federal property.
Lecture series: Energizing the Rockies: Energy Challenges in Global, National and Regional Perspectives
Raymond Plank, chairman and founder of the Apache Corp. is scheduled to deliver a lecture Jan. 24. Randy Udall, director of the Community Office for Resource Efficiency in Aspen, will talk about renewable energy possibilities Feb. 27. Matthew Simmons will discuss the end of “cheap oil: what should the U.S. and the Rockies do?” on March 5.
What [the peak oil] theory is not taking into consideration is that in every industry in a free market, there is a natural tendency toward significantly increasing efficiency and declining costs with new technology and improved methods. This can be readily seen in the oil industry over the years. New methods of extraction make previously unprofitable reserves profitable, more oil is extracted from fields that were thought to be depleted.
The road ends in post-petro future
And when Hoosier Environmental Council activists tapped on my door a few years back with their petition to stop I-69, I told them I was not opposed to it. New construction is the quintessential "can't-please-everyone" issue. There will always be tree huggers prostrating themselves before bulldozers. If they had their way every time, nothing would ever be built.Then I heard the phrase "peak oil production" at a presentation by self-confessed tree hugger Scott Russell Sanders at last year's Spirit & Place Festival. And it occurred to me that those words I'd heard many times before had fallen on deaf ears until that moment.
OPEC set to cut output amid carping over quotas
Antarctica works as living global warming laboratory
MCMURDO STATION, Antarctica - For scientists at this ice-encircled outpost, global warming is not a matter of debate. It is a simple fact and crucial research questions center on what its consequences will be.
As World Warms, Africa's Waters Going Dry
The outflow through two hydroelectric dams at Jinja is part of the problem — a tiny part, says the Uganda government, or half the problem, say environmentalists. But much of what is happening to Victoria and other lakes across the heart of Africa is attributable to years of drought and rising temperatures, conditions that starve the lakes of inflowing water and evaporate more of the water they have.
Cow 'emissions' more damaging to planet than CO2 from cars
Gaddafi: Oil behind Darfur crisis
Muammar Gaddafi has accused the West of trying to grab Sudan's oil wealth with its plan to send UN troops to Darfur.
Oil and the New Anti-Capitalist
Imagine it's January 2000 and you are asked to look into a crystal ball and predict the course of the global economy over the next six years. The misty glass gives you some hints: the coming stock-market collapse, followed by suicide airliner attacks on the Twin Towers and two wars, all leading to a quadrupling in the price of oil. Faced with these facts, no one would have foreseen the economy's response: between 2000 and 2006, global per capita GDP rose by 3.2 percent a year, the fastest six-year growth spurt ever.
The Edison of our age? The inventor of the NiMH battery is working on hydrogen power...and has been for fifty years.
Daniel Yergin in Newsweek: Will oil prices lead to a new tech boom?
High oil prices are transforming the world's political landscape—and launching an era of high-tech innovation that could rival the Internet boom.
Students on Campus Work for a Greener Future
Democrats May Give Alternative Energy a New Push
THE fortunes of alternative energy companies have been linked to two factors outside their control: oil prices and politics.




Not the angle (spin) I would hope to see in a major News magazine, but still putting the ideas out there in the mass mind that there is a "problem" of some kind.
Is this the beginning of the effort to "ease" people into the inevitable?
CNN ran "We Were Warned" again this morning...
Uh, no. "They" weren't "all" doing any one thing of the sort. The press isn't some gang of nefarious characters that meets in a Star Chamber to decide the fate of mankind.
Having worked in the computer press and seen how memes can wash through such places, I strongly suspect that we're seeing nothing more or less than the mainstream writers, editors, and producers learning about peak oil and then covering it. These people are generalists, which means they're always at least a little late to the party, compared to people with a special interest in a topic.
Did I say they were? Jeez, it was just a flip comment.
No one suggested any sort of conspiracy. Unless you think it's a conspiracy when lots of peak oil stories appear when gas prices are spiking.
Do you have a feel for the ratio of MSM "news" stories reporting the cornocapian view versus the peaknik view?
Nothing scientific here, just your take since it looks like you delve into quite a bit.
Thx
It appears that CNBC has decided to nix any further discussions on the subject. They probably think that they should not give any more credence to those screwballs that are spreading this dangerous myth. The theory, as Jackson of CERA has warned "causes confusion and can lead to inappropriate actions and turn attention away from the real issues." In other words, they probably agree with CERA, peak oil is not a real issue.
I have seen Yergin on CNBC several times in the last few months but he always talks about price and inventory levels. He never seems to mention peak oil anymore.
Ron Patterson
The idea that solar can cover many times our energy needs is by no means off the table. I think people will be surprised a few years from now how many things can be done with solar energy.
What we can also see, though, is that many people buy into short term solutions like nuclear without an analysis why nuclear has failed and will continue to fail to deliver: the fuel-reprocessing and storage problem remains un-solved. And, I have to say, it does not remain unsolved for technological reasons as much as for political an economic ones... Plutonium is simply part of the equation because 238U+n->239Pu (after two beta decays). Now... most reactor designs do not really produce good weapons grade Pu, but the proliferation problems, at least on the political side, seem to be unsolved. The second issue is that proper breeding and re-procssing cycles would put the Uranium mining industry basically out of business... so we have a lot of economic interests working against a well structured nuclear power infrastructure.
Nuclear, in my opinnion, will sizzle out and end up an expensive power generation asset, just like last time.
Ron Patterson
That question maybe answered a lot sooner than we think because the media is taking a big interest in it. Colin Campbell told me yesterday that he is now hit with a flood of emails and requests to speak at conferences etc. He said TV crews are beating a trail to his doorstep in Ballydehob. A good friend of his wrote the nemesis report in Newsletter 46 see: http://www.peakoil.ie/downloads/newsletters/newsletter46_200410.pdf He is from the oil industry and says Saudi peaked in 2004 having only ever produced 19 fields from the 80 they have and only 8 of those were stars. His forecast back then appears to be what is coming to pass.
Greg Croft says that Ghawar had produced 51 billion barrels at the end of 2000 so that would mean obout 60 billion has now gone http://www.gregcroft.com/ghawar.ivnu which would mean probably 60% depletion. Shaybah was discovered in 1968 had immense technical difficulties and still has (see pages 205-210 from Twilight in the Desert)so it is an existing field that has had to be produced to handle big declines elsewhere.
On the subject of what the Aramco people say why would you believe any of them when they continue to foster the impression their reserves are unchanged at 262 billion barrels? I believe that you and Jeffrey are correct and Robert is not
Forgot to add that as you posted some months ago the northern end of Ghawar now has had it's water injection increased from 7 million to 9.5 million barrels per day since June 2005. Definitely not the sign of an oil field that has no problems
One major story breaks and all of a sudden everyone covers similar or the exact same story.
It's not that they are plotting to release the stories simultaneously, they are just trying to get the next big story out before the next guy.
CHARLES T. MAXWELL
Educated at Princeton as an undergraduate and Oxford as a graduate, Charles T. Maxwell entered the oil industry in 1957 and worked for a major international oil company for 12 years in the US, Europe, the Middle East, and Africa. His background has been in four traditional sectors of the industry--producing, refining, transportation, and marketing. In 1968, Mr. Maxwell joined a well-known Wall Street firm as an oil analyst. In polls taken by Institutional Investor magazine, Mr. Maxwell has been ranked by the US financial institutions as the No. 1 oil analyst for the years 1972, 1974, 1977 and 1981-1986. In addition, for the last 17 years he has been an active member of an Oxford-based organization comprised of OPEC and other industry executives from 30 countries who meet twice a year to discuss trends within the energy industry
Shit...
He's been doing the business since the year I was born
Gulp.
Why now?
Why all these stories in the MSN now?
Why , when oil has pegged back from record highs to a 'liveable' $60 +/- / bbl?
Why now?
I find that odd, too. I've been a news editor at PO.com for longer than I've been doing it here, and even before then, I was following peak oil news and submitting it to PO.com as an ordinary user. PO.com limits you to 10 stories a day, so you end up being pretty aware of the number of energy stories out there. Some days, you don't get anywhere near 10, some days, you have many, many more than that, and have to make some tough choices. And it's pretty closely tied to energy prices. When new records are being set, there's lots of stories. When prices are flat or dropping, there aren't many.
But we're getting a lot of stories now, when prices are nowhere near record highs. Curious.
I guess reality has a way of changing opinions. Just this week, Michael Lynch stated falling world inventories would push up prices, after earlier stating he saw crude prices heading down to $40 next year.
"3/10/06 CNBC General Programming (Pg. Unavail. Online)
CNBC
March 10, 2006
HERE IS HOW OIL IS TRADING RIGHT NOW. AS WE'VE BEEN TELLING YOU, BELOW THAT KEY $60 PER BARREL LEVEL THAT'S CONTRIBUTING TO THE RISE IN EQUITIES THAT WE'VE SEEN TODAY, DOWN A FULL PERCENT AT 59.85 PER BARREL AND CHARLES MAXWELL THE SENIOR ENERGY ANALYST, THANK YOU FOR JOINING US, WE APPRECIATE IT.
WELL, I THINK THEY REALLY DO AND IF THE PRICE CALLS FALLS, SAY, BELOW 62 AND LOOKS LIKE IT'S GOING BELOW 50, I HAVE NO DOUBT THAT THEY'LL CUT A MILLION BARRELS A DAY.
THEY HAVE, I THINK, QUITE EASILY THE ABILITY TO CUT 5 MILLION BARRELS A DAY, BUT THEY'LL START WITH A MILLION AND IF THAT WORKS AND PUSHES THE PRICE BACK UP TO 55 WHERE I THINK THEY'D REALLY LIKE TO SEE IT THEN ALL IS WELL, BUT IF IT DOESN'T WORK THEY'LL CUT TWO AND THREE SO I THINK THE CHANCES OF STAYING BELOW 50 ARE REALLY VERY LOW. ERIN: ALL RIGHT. THANK YOU SO MUCH, CHARLES. ALWAYS APPRECIATE IT, HAVE A GOOD WEEKEND."
A few years ago, the "Ceiling" price was $28.
They promised, and failed, to put more oil on the market after the hurricanes, causing the US and the IEA to do a coordinated release of emergency reserves.
Then they were cutting back because they couldn't find buyers for all of their oil "Even their light/sweet oil." (While the Saudi stock market started crashing, primarily because of heavy insider selling, i.e., by the members of the Royal Family.)
Then, they were cutting back to pull down inventories.
Now, $60 is "acceptable," and if oil prices increase, the price rises should be "reasonable."
http://www.tradearabia.com/tanews/newsdetails_snOGN_article115823.html
Saudi Arabia sees $60 oil as acceptable, says envoy
Posted: Friday, December 08, 2006
Princeton (Reuters)
PBS Debate on Peak Oil:
The McCuistion Program: Peak Oil--Are We There Yet?
http://www.frtv.org/show,103.html
September 17th, 2006
While many experts say we have not reached peak oil, (the point at which we have produced as much in a given year as we can and from which we can only decline.), differing opinions, the price of oil today, the instability in oil producing regions and the need for substitutes all argue for a better understanding by each of us.
Panelists:
Edward W. Blessing, Managing Director, Blessing Petroleum Group, LLC,
Scott Nauman, Manager of Economy and Energy, Corporate Planning Dept., ExxonMobil Corporation,
Christopher Ross, Vice President, CRA International,
Michael Lynch, President, Strategic Energy and Economic Research
Jeffrey J. Brown, Independent Petroleum Geologist
Some background information on the debate:
By Jeffrey J. Brown
I just heard Michael Lynch say that there is "7 trillion barrels of conventional oil" to be recovered. Isn't this criminal?
And people wonder why there are doomers.
I was baffled by this statement, but I believe he meant barrels of oil equivalent, ie including all fossil fuels such as gas, coal. Or he is crazy. Or both.
Now that Steven Colbert's
truthinessis the Word of the Year: we here on TOD should start giving Truth Ratios [Truth/truthiness] to Yergin and Lynch. IMO, these guys are below 50%.Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
...over the course of the next 2000 years. I thought PO was BS until I realized that it's got very little to do with how much oil is in the ground, but how fast you can get it out.
The way I see the Cornucopians as most vulernable is on price and rate of delivery.Surely they're not foolish enough to agrue that horizontal wells offshore in the continental shelf can be drilled and produced cheaply, or that the capital investment of $500k per barrel per day in tar sands plus the expense of disposing of 4 tons of sand for every bbl produced and the huge natural gas requirement compares with the cheapness of our old domestic reserves in fields like East Texas, Seminole, Yates ect. In other words, I'm saying that we need to attack on the basis of price and soft peddle ultimate reserves and also delivery rates. For example, Exxon uses about 5 mmbbl/day in its refineries worldwide. Thats $500 trillion invested in tar sands just to supply Exxon's needs alone! And since the tar sands are expected to provide about 3mmbbl/day in 20 years, what about the delivery rate?
I thought that it was interesting that no one commented on my repeated statements that KSA and the world were showing falling production.
BTW, Lynch's comment about the UK and the HL technique not working refers to various plots that show an early 30% P/Q intercept. IMO, this is totally bogus. There is no large producing region that I am aware of that has shown a sustained 30% P/Q intercept. This is simply the "noisy" portion of the plot.
The overall North Sea crude + condensate is a perfect example of the HL method, showing a steady relentless linear progression, just like the Lower 48.
The guy from Exxon was creepy, I thought. He seemed too much of an actor. I can detect phoniness like anything.
My first PO "convert" was my mom. Her first reaction, after reading a very primitive version of LATOC three years ago, was "well, I guess there's no point in losing those extra 15 pounds now."
You said that HL shows the world is at the same point now that the lower 48 & North Sea were at their peaks. Everyone else said HL is simplistic, HL has been wrong in many cases, reserves are increasing, and we've only used a small fraction of reserves. Their rebuttals were persuasive and your response was to repeat your original points rather than address their arguments.
It's the same exchange that appeared in the recent CERA press release. To some degree, it's the same dynamic that's playing out between you and Robert Rapier.
The ground rules were that we could not interrupt each other ("This is not Crossfire," to quote the host). We had to make hand signals when we wanted to make a comment.
The ExxonMobil guy claimed that Hubbert was wrong about the world peak. I responded that Hubbert did not have enough data to make an accurate world pick (whereas he did have enough data for the Lower 48). I said that Deffeyes is to the world peak as Hubbert was to the Lower 48 peak. (BTW, Hubbert did guess that the world peak would be no later than 2006.)
I tried (unsuccessfully) to rebut Lynch's claim that that the HL method had been wrong "Dozens of times." The host wanted to move on to another topic. As I noted above, Lynch's assertion regarding the UK HL plot is factually wrong. He was simply referring to the "noisy" portion of the plot.
Regarding Peak Oil, it basically came down to me versus ExxonMobil and Michael Lynch. It was a 30 minute segment with five people, two of whom were taking adamant anti-Peak Oil stands, while I was the only one taking a strong "Yes we have peaked" stand. It only stands to reason that the bulk of the comments were going to be "No we have not peaked." You will note that none of them responded to my (repeated) points that the world and Saudi were showing lower production.
Robert is certainly not in the CERA/Lynch/ExxonMobil camp, but he is predicting higher oil production ahead for Saudi Arabia and the world (at least until the 2010 to 2015 time frame).
But you know what the difference is between CERA, Lynch, ExxonMobil and Robert? My predictions are--so far--coming true.
Jeffrey, winning a debate on points and convincing people are not the same thing. Your predictive models really work very well, but I think it will be another couple of years before we know for sure whether the peak C+C has happened.I hope you are wrong, but suspect you are right. Hell, I'd love Lynch to be right, we could use another 30 years to prepare.
Lynch and the Exxon guy did very well. They are optimistic, a much easier sale, and both were handsome with reat delivery styles. They "won" in being photogenic, personable, optimistic and radiating authority. But their assertions aren't true
But, you were on the air.The very fact that the problem is being considered at all shows we have won. Shit, CERA had a much ballyhooed press release with an ad hominem against you, my peakist cult leader friend. The moderator even gave attention to your ELP program.
And my suggestion above, don't try to argue facts with people who are loose with the facts but instead hit 'em on economics and deliverablity is going to effect more people than a discussion of mathematical models. You are a scientist, and facts and modeling matter to you, but most of the viewers are more concerned about can I get my gasoline and a cheap price.
Mostly, don't allow anyone to beat you up. You did a great job against to professional talking heads. I really thank you for your courage, your wisdom and your consistent effort to find the truth and share it with others. You'll get a lot better with practice!
you did a better job than I could have done. five against one, that's bruce lee jackie chan stuff