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DrumBeat: December 6, 2006
Posted by threadbot on December 6, 2006 - 10:40am
Party not over yet for Big Oil: Oil prices seen remaining high through the decade
Morse said stagnant production among the countries making up the Organization of Petroleum Exporting Countries is a big part of the problem.But fear thee not, they're working on the refinery bottleneck:For example, OPEC-member Venezuela's production stood at 3.5 million barrels per day in 2000. It has since fallen to 2.5 million bpd and is still sliding.
Iran at the start of the decade expected to grow production from 3.5 million barrels per day to 4.5 million bpd but that plan has gone nowhere, said Morse. Project Kuwait, which was supposed to add another 500,000 bpd to that country's production, also stalled.
However, even if output had grown during that time the world would not have necessarily had enough refining capacity to process the extra barrels.
New refineries are expected to sprout up in an arc stretching from Saudi Arabia to India, while many U.S. refineries are being expanded or refurbished to refine harder-to-process heavy crudes into such products as gasoline and diesel.
Credibly Challenging Iran: A Coordinated Plan to Get Oil Below $40/Barrel
He said that there is only one non-military way to break Iran's current course, and that the military option was not credible and would not be supported in the region. This official said that the only way to stop Iran at this point was to make the price of oil plummet.He said that America could engineer this with coordinated support from oil producers in the Gulf Cooperation Council.
Iran replaces dollar with euro in most oil dealings
Iran has started replacing dollar with euro in majority of its crude oil exchanges in the last several months, an informed source with Iran’s Oil Ministry said here on Tuesday...."This can maintain the real value of Iranian oil," he added.
EIA: Oil field delays mean higher 2010 crude price
The U.S. government's top energy forecaster on Tuesday said it raised its estimate for world crude prices in 2010 by about 20 percent to near $60 a barrel due to delays bringing new oil fields on line.African producers like Angola and Nigeria and Latin American states like Brazil will be slower than initially projected in ramping up production from new projects, putting a squeeze on world supply, said Guy Caruso, administrator of the Energy Information Administration.
"It's clearly going to take longer now to bring on the new supplies and to have an impact on price than we were thinking a year ago," Caruso told reporters.
HOUSTON: The majority of oil and natural gas executives think that oil prices could rise to $90 a barrel before triggering a global recession, according to a survey released yesterday by Deloitte & Touche USA.
Senator says no more environment rollbacks
WASHINGTON - The Democrat poised to take over the Senate environment committee promises a "sea change" from six years of Republican inaction on global warming and says she expects Congress to send President Bush legislation to start curbing greenhouse gases.
Arctic ice field could melt by 2080: European research
Nuclear Power Revival
Could Encounter Hurdles
WASHINGTON -- The Bush administration's plan for a "renaissance" in nuclear power may be crimped by tightening world-wide supplies of uranium and a lack of enrichment facilities to turn the uranium into fuel for power plants.
'Chelsea tractor' sales hit by tax hikes
LONDON - Sales of gas guzzling four-wheel drive vehicles have dropped sharply in Britain amid looming tax increases aimed at fighting air pollution and curbing global warming.
US Congress nears final India nuclear bill
New reps urge opposition to drilling bill: Congress pulls Gulf drilling bill in political seesaw
Shell CEO: 'The debate about CO2 is over'
DUBAI, United Arab Emirates -- The chief executive for Shell berated Washington on Monday for spurning the United Nation's Kyoto agreement on global warming, saying U.S. backing for a global regulatory framework would create incentives for oil companies to reduce carbon dioxide emissions.
During the recent NATO summit in Riga, U.S. Senator Richard Lugar urged the alliance to declare that an energy boycott of any member be seen as an act of coercion against all members of the alliance and one that requires a collective response.
Latin American oil: past and future
2005 was a bumper year for Latin American oil production. According to BP’s Statistical Review of World Energy, in 2005 oil production reached 10.7 million barrels per day, a new record. This number, however, betrays a troubling fact: Production of conventional oil peaked in 1998 and any future production increases will have to come from either the Venezuelan tarsands or the deepwaters off Brazil and Mexico.
Southeast Asian oil output likely to peak by 2013
Oil production in Southeast Asia will reach a peak in 2013 as fewer new fields are found, forcing the region to evaluate its dependence on crude, said Michael Smith chief executive of UK-based consultant Energyfiles Ltd.
There is something about energy that brings out the sillies in politicians. Everywhere you look you can find politicians and activists who think that “energy is different,” that “the rules of economics do not apply to energy.”
India: Should petrol and diesel prices have been cut?
Moving too fast from a controlled price scenario to a market mechanism may have its pitfalls, as evidenced in the California energy crisis as well as the European gasoline crisis. The transition of India to a deregulated market needs to learn from such experiences.
Itera's Regional Director Murdered Outside Office in Central Russia
Alexander Samoylenko, who led a branch of Russia's largest independent gas producer Itera, was shot and killed as he left his office in the central Russian city of Samara, police said.
Post-peak pessimism: Looking for new tools
"But if you consider for a moment that the future is not more of the same, but is radically different from anything you've ever known, then you are going to need different tools and different skills to meet it."
George Monbiot: We need more buses
Ethanol output has corn prices popping
For the first time in China's history, grain prices are rising not due to a poor harvest or increasing demand but because of soaring international oil prices.
China's Shenhua to quadruple coal production by 2020
Africa: Looking below the surface for tomorrow's energy
David Yuko, a Kenyan renewable-energy consultant, makes a strong case for geothermal power in developing countries as a far cheaper alternative to large-scale conventional energy systems that require massive investment.
The fight for Caspian oil will be one of the biggest issues in international politics in years to come.
Petroleum producers forecast strong oilpatch spending for 2007
CALGARY (CP) - Canada's oil and gas producers will ease off spending in 2007, a move driven by doubts about natural gas prices and several oilpatch giants scaling back growth projections, according to the industry's main association."It's a slowdown, but it's more like a foot off the accelerator rather than someone jamming on the brakes," Greg Stringham, vice-president of the Canadian Association of Petroleum Producers, said Tuesday.
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Aramco and Earth Decision launch GeoMorph
What is even more interesting is that this article was released on rigzone.com 02/08/2006 as well stating "...have launched GeoMorph, a powerful new real-time earth modeling..."
So, why are they re-spinning a story from back in February of this year? I don't see anything that has changed between the two stories...anyone else?
-C.
Very interesting book: Nebraska Schoolhouse Blizzard of 88.
Tells how folks used switch grass to heat their sod houses. Also some background on Scandinavian immigrants and why they left for America. The early weather service records and the progress of the storm. First hand History with letters back to the old country explaining their hardships.
- The secretiveness of the Saudi oil establishment as well as other Middle Eastern and OPEC producers for the last 25 years has not been part of an effort to conceal troubling realities or enhance political interest.
- Aramco and its contractors have developed proprietary technology for wringing oil from mature fields and sustaining production that is far superior to that applied by the world's best known publicly held oil companies in other major oil provinces.
- The phenomena that have signaled the onset of decline at oilfields elsewhere in the world, and that have been observed in Saudi Arabia's mainstay fields for many years, somehow do not mean coming decline for Saudi oil production.
- The Saudis have chosen to concentrate production in their aging super-giant fields, even if this risks hastening depletion by overproducing, rather than spread the burden by developing additional discovered fields. But many other fields have been kept in reserve and could make a significant contribution once they are brought onto production.
- Saudi Aramco's exploration program has missed additional giant or super-giant oilfields lying beneath the desert sands, but future exploration efforts will surely find them in time to head off a supply crisis.
- The reserves in Ghawar field really do greatly exceed the estimates made by Aramco in the 1970s.
- Ghawar, by virtue of its unprecedented size, is simply an exception to all the truths and principles that have governed production and depletion of oil in all of the world's other super-giant fields.
- Aramco could have grown its oil output at any time in wanted during the last 20 years, but the world markets never had need for more oil.
Evidence already presented in earlier chapters casts serious doubt on several of these assumptions. Others may simply strike more disciplined minds as prima facie absurd.Matt Simmons, Twilight in the Desert, pages 283-284, posted here by Ron Patterson
We could be smacked into a brick wall tomorrow or in 50 years. This gives KSA and those that know the "real" reserve figures a large advantage over the rest of the world.
If KSA, has enough reserves to cover things in the foreseeable future, then they can play the game however they want to. They can fake a shortage and pressure prices higher, they can just keep the buffer just above demand, or they can ruin Iran by flooding.
He made these graphs:
Alan
Alan says,
"We are, it appears, a long way from Peak Sulphur !
Indeed true Alan, and thus my fascination with (as expressed in other posts) the whole "desulfuring" issue involving Diesel and by the way, gasoline.
The consumption of natural gas is already going up to "desulfer" Diesel to bring it down to the new ULSD (Ultra Low Sulfur Diesel) standard that is the 80% law of the land, due to become the 100% law by 2010. This will only become more natural gas consumptive and more expensive as higher sulfur crude oil is brought into the mix. This is a REAL TIME issue. I know people in the oil trade who say they sit in on almost daily meetings trying to resolve what the refinery industry sees as a very pressing and difficult problem, in other words, man hours and money are already being spent on this NOW.
The prospect for Diesel is, to put it bluntly, very bad. With the Nox emmissions standards already presenting an expensive and technically challenging problem, and the rising price of natural gas (which most folks here on TOD) do not see getting cheaper over the long haul, the Diesel engine is rapidly becoming a burden even the industrial/commercial sector is finding hard to bear.
Sign of the times: Recently at a truck stop, I saw an LPG (Liquid Petroleum Gas, or propane) tractor. It was there while the trucker ate, and NOT to buy Diesel fuel. More and more school districts, and city bus lines are shopping for LPG or CNG buses. And no one, not even those of us who now own and love them, are considering a Diesel car if our aging Benzes and Volkswagens ever bite the dust. We have to face the truth. Diesel may well be past it's peak. As a solution, barring a massive increase in bio-Diesel fuel production, it is not an option.
Roger Conner known to you as ThatsItImout
Consider Carbon-Hydrogen ratios.
Gasoline has a low C, High H ratio. Diesel is richer is C, less H. As oil gets thicker & lower value, the C ratio climbs. Coal has some H, but much more C (coal is not carbon as some people think, but a complex mix of long chain hydrocarbons, very rich in C).
The primary (99% ?) source of commercial hydrogen for upgrading oil is natural gas or oil itself. (This is the source of most refinery gain, where oil products > crude oil).
Early CTL plants (example one announced in Illinois) have announced output will be diesel. In a shortage situation, refinery output will be biased towards diesel (trucks, rail, barge, farms) will be biased towards diesel and the President may waive the ultra-low sulfur requirement for, say, 1/2 the diesel produced in an emergency (today there are two supply & distribution streams, one for 0.5% sulphur and the other for 0.015%)
And diesel can be stored more easily, safely and longer than gasoline. If I hear that Isreal has bombed Iran, my first stop will be a truck stop with containers. I filled up last week for the first time since the beginning of hurricane season (June 1) 16.6 gallons + 5.x gallons top-up mid-season. I can make a full tank + containers last a year or more.
Now, if we can buy a vehicle that can run on #4 bunker fuel, or even better, Orimulsion# !
Best Hopes for Otto, my 31 mpg (city) 1982 M-B 240D (manual transmission) diesel (pun intended on name)
Alan
# Orimulsion is a mix of 30% water, surfactant and "improved asphalt" from the Orinico of Venezula. Burns VERY dirty.
Called Duraterm, it is a $98.23 relay with 4 new glow plugs that
- Speeds up glow time, cutting it in half
- Glows slightly hotter
- Glows for 3 minutes after starting at less power, resulting in less pollution, noise, and better fuel economy during those 3 minutes.
- Glow plugs are expected to have twice the life
One key is patented iron-cobalt alloy whose resistance builds quickly as it heats up, thereby self limiting max heat.My kit is good only for 1981-85 W123 M-Bs. Unsure about other applications. 300Ds need to buy an extra glow plug seperately.
Also, some new tires improve fuel economy. And I have reduced parasitic losses by installed LED bulbs. Glad to give you details.
Best Hopes,
Alan
Alan,
Thanks for the info, I need a set of glow plugs for mine, and with temps in KY getting into the teens for the next couple of nights, I really need them now...:-).
My old Benz has been getting right on 31 MPG, and I just did a full tire check and found that was running a bit underinflated on two of them, so I hope to be doing 32 plus in the near future....needs an air filter change and perhaps later a clutch, but right now, I can't tear it down for the clutch, it spends too much time on the road. :-)
Thanks again, Roger
known to you as ThatsItImout
Please send me your correct eMail address to
Alan_Drake at Juno dott com.
Thanks,
Alan
Sorry about that,
After my Compaq blew, and I went to my Mac, I left my MSN Hotmail account behind....however, I have not been able to get my TOD settings to change for me no matter what...:-(
I will try again in a minute, but in the meantime, use admin@irvingtondesign.com
It's a site associated with some of my energy work, see if it takes.
Thanks for all info and assistance, Roger Conner
known to you as ThatsItImout
I am actually not so sure that production could have kept up with actual consumption, at least until now. The percent utilization of refinery operable capacity has diminished in 2006 but was normally high before. As the graphs posted by leanan show above, the crude input is more sour and heavier over time. So, to say it simply, there is more cracking and less refining going on. Perhaps, as has been often suggested, there is actually less cracking capacity than refining capacity. Of course this situation can reverse if the actual refinery upgrades result in a significant increase of the refining capacity of heavier oil. These upgrades were the reason for the shutdowns beginning 2006 and during this fall.
The import situation is a bit more difficult to resolve. I will leave this aspect of the discussion for WT and RR.
I still think that this situation is dangerous even if it is voluntary, it leaves some regions at risk for real shortages since the situation is very heterogenous over the country. Besides, what reason could lead to a voluntary decrease of these stocks ? Changing requirements for gasoline blending (but the stocks are only 11-12 days worth which makes them easy to replace quickly) ? Replacement by ethanol ? Reduction of the costs of stock management ? Any suggestion could be welcome.
The US refining sector has become more sophisticated (i.e. complex) and is able to convert lower quality crudes into higher value products. Naturally, to take advanatage of this capability, they will purchase cheap lower quality crudes.
I am sure that you could track refinery upgrades around the world and find that in every case where refineries were upgraded, input quality went down.
A more interesting question may be why have companies needed to make the upgrades. The asnwer is, in part, to take advantage of the complex refining margin growth afforded by widening quality (crack) spreads.
While this may be a peak oil metric, I think that crack spreads is a leading indicator and refinery input a trailing indicator.
Published on 18 Nov 2006 by Wall St Journal. Archived on 23 Nov 2006.
As Fuel Prices Soar, A Country Unravels
by Chip Cummins
Has the dieoff started?
If people are dying because of an inability to afford oil, I think that the dieoff has started. It's just not readily apparent here in the US--yet. But the early signs of problems have started to appear.
Look at the first part of the above excerpt, "Expensive gasoline and soaring heating bills make a hard life harder" (for the poor in America). The WSJ had a story yesterday about the rapid increase in mortgage delinquency rates for sub-prime, generally lower income, borrowers. The delinquency rate has almost doubled since last year. Interestingly enough, the delinquency rate started increasing in the summer of 2005, just when oil prices started climbing. Note that oil prices first crossed the $60 mark in July, 2005, before Katrina hit.
Someone suggested that the debate between Robert and myself is extremely important. Robert and I both downplayed the importance of our discussion, but I think I have changed my mind.
I suggested yesterday that I thought that our debate was more or less akin to a couple of engineers debating how long it would take for the Titanic to sink. Robert rejects the analogy, but I think that it is apt. The obvious implication of my analogy is that the debate is not material (it's just a question of when, not if, the ship sinks), but that is not really true. For the passengers on the Titanic, it made a big difference as to whether the ship sank in about 2 hours or 12 hours.
Robert and I have been having some version of this debate most of this year, but IMO the principal focus of the debate has shifted dramatically--from are we going to see lower production and lower exports from Saudi Arabia to:
Why are we seeing lower production and exports from Saudi Arabia (KSA)?
The only readily available current production data we have is for crude + condensate (C+C), while the EIA defines net exports in terms of total liquids, but C+C accounted for 86% of the reported total liquids production for KSA in 2005. Based on OPEC reports, which are certainly confirmed by collapsing tanker traffic, KSA's production (presumably C+C) is below 9 mbpd this month. This is at least a 7% drop from 12/05. I estimate that KSA's net oil exports are down by about 13% from 12/05 to 12/06.
As I have endlessly outlined, KSA is showing the same kind of production decline that we have seen in other regions that have crossed the 50% of Qt mark--Texas; Lower 48; Russia; North Sea and Mexico.
I just went back and checked some of the Seventies Aramco reserve estimates in Matt Simmons' book. The Saudis took over Aramco in 1979. Prior to that, it was run by four major oil companies. The last published recoverable reserve estimates by the old Aramco were in the Oil & Gas Journal in 1977, presumably for the year ending 1976. They showed estimated remaining recoverable reserves for the top five Saudi oil fields at that time to be about 100 Gb. Note that this was 30 years ago.
After the Saudis took over Aramco, we started seeing the miraculous increases in recoverable reserves that most people use as a baseline for discussing the future of KSA production.
Most HL estimates, which have been an accurate predictors of peaks in other large producing areas, give the Saudis around 75 Gb of remaining recoverable reserves.
The two central questions I would like to see Robert specifically address are:
Why are we seeing lower production and exports from Saudi Arabia (KSA)?
How and why is KSA supposed to show rising production in future months and years?
How and why is KSA supposed to show rising production in future months and years?
To me, that's a lose-lose. The last thing I want to do is convince people that Saudi has plenty of oil and that we don't have to worry for now. For this reason, I have really tried to avoid this discussion. My objective here, as will be shown in my debate response, is claims are well-supported. I don't mean the kind of support that convinces those who are already predisposed to agree with you. I mean the kind of support that could hold up in Science. That's the case we need to make in order to convince and influence those who don't hold to his position. Of course if your objective is merely to convince people already holding a short-term Peak Oil viewpoint, you can make a less-convincing case.
I didn't get into detail on Saudi in my debate reply. If necessary, I will do so in the next round. But here are some points to ponder. Again, I hesitate to do this because I may win the battle, but help us lose the war. That's the last thing I want.
You have made a number of comparisons between the HL for Saudi and Texas, and maybe even the U.S. I think the HL implies that there are 70 GB of oil left in Saudi. Let's try to verify that number.
1982 was the last year that the books were open on Saudi reserves. In 1982, their reserves were 164.6 GB. What they are today is an open question, but let's use the U.S. and see what has happened to our reserves.
The following data are all pulled from:
http://tonto.eia.doe.gov/dnav/pet/xls/pet_crd_pres_dcu_NUS_a.xls
In 1982, U.S. reserves were 27.858 GB. In 2005, U.S. reserves were 21.757 GB. Oil production from these reserves since 1982 totals 56.9 GB. So, we have produced 57 GB of oil and pulled our reserves down by 6 GB. That seems incredible, but unless I made a mistake (someone double-check me) that's what has happened.
Are we to assume that Saudi reserves haven't shown similar behavior? But even if we assumed that all they have been doing is drawing down reserves since 1982, we still get a higher remaining reserve than your Saudi HL indicates. So, what to think here? Their reserves were overestimated when they were still transparent? Your Saudi HL is in error?
I would really rather not debate Saudi reserves. I don't want someone confusing me with CERA, nor do I want someone taking Peak Oil less seriously because Saudi may have more oil than you think. I am more concerned that you use sound methodology and arguments, because that enhances credibility and increases your likelihood of being taking seriously by the public. But you asked me to address Saudi. In my debate response, I will focus more on what's happening with imports.
Note: I am back at work today (another vacation day tomorrow, though), so I will not be getting into a long discussion on this. I would encourage everyone to check my numbers to make sure they are right. In the spreadsheet, proven U.S. reserves are in Column B of "1-Crude Oil Proved Reserves", and production from reserves is in Column J of "2-Changes in Reserves During Year." I would also encourage others to try this exercise on other countries, or on Texas, often used in comparison to Saudi.
As you know, there are reserve estimates and there are reserve estimates. So let's compare apples to apples
The HL method gives us a mathematical estimate of the URR for a region.
Khebab took the Lower 48 production data through the 50% of Qt mark to predict the post-50% of Qt cumulative production for the Lower 48. The actual post-50% cumulative production through 2004 was 99% of what the HL model predicted it would be.
The same exercise for Russia showed that the post-50% of Qt cumulative production for Russia through 2004 was 95% of what the HL model predicted it would be.
KSA is now at the same stage of depletion, based on the HL method, at which Texas, the prior swing producer, started declining, and KSA's production is down by about 7% from 12/05 to 12/06.
Given all of the foregoing, does that give you more, or less, confidence in the HL estimates of KSA's URR and remaining recoverable reserves?
The point about KSA's five big fields is that then (1977)--as now--they account for the majority of their production and reserves.
But are not Reserves defined by the SEC? My understanding is that a publicly traded company can only list as Reserves that percent of OIP that meets some SEC criteria. At some point in the production time period the Reserves drop below this accepted threshold, the major sells off the lease and a 3rd party operates it as a set of stripper wells with an indefinite 8bpd production stream.
This is the only circumstance I can think of to lend credibilty to the quoted set of statistics.
Cheers!
Here is the way the EIA defines proved reserves:
The bottom line is that we have produced far more oil than our reserves would have indicated in 1982. WT is comparing the U.S. to Saudi for his HL of Saudi, but then says we can't do that with the reserves. My point is that HL has not been shown to work in every case. Here, we have what looks to me like a discrepancy.
We are left with either: 1). The HL for Saudi is wrong; 2). The reserves in 1982 - when they were still open to scrutiny - were vastly overstated. But we know that in the U.S. the reserves were vastly understated.
So then we are left with "Yeah, but Saudi production is down." I think once I post my graphs of demand/production/exports/refinery utilization, the case that the cut is involuntary will become a lot less convincing.
One further comment I would make. Note that in this response, after Euan had pointed out that some areas had peaked at different Qts, Jeffrey responded:
Yet isn't this also the case for Texas and Saudi? These are the kinds of things I consider to be ad hoc reasoning. For those who don't know what that means, it means you apply different kinds of reasoning in different situations in order to support the point you are trying to make. It's like saying "A and B are the same, because they are the same color, but A is different from C because it is heavier." Yet heavy wasn't the criteria you used for A and B, it was color. If you use ad hoc reasoning, you can come to pretty much any conclusion you desire.
In any case, Texas and Saudi Arabia have been the only two swing producers of consequence for the past 70 years.
But shouldn't the fact that they are "separated by half a continent geographically and separated in terms of development by decades" have some impact on where each one peaked? Did we use the same technology in Texas in the early 70's as we are using in Saudi today? Why should we expect Saudi to peak where Texas did, other than they were both swing producers? Did they both have the same amount of swing capacity?
The question I was addressing with the Lower 48 versus the Total US was whether to use one HL plot or two.
To apply that situation to Saudi Arabia versus Texas, the question would be to use one HL plot or two.
This discussion arose because of a persistent tendency to isolate the UK from the total North Sea for HL plots. I don't see any reason to do so.
Clearly, the field distributions in Texas versus Saudi Arabia is different. However, I have pointed out that the same is true of the Lower 48 versus the North Sea. The Lower 48 peaked right at 50% of Qt in 1970. The North Sea--vastly different field distribution and totally offshore--peaked right at 50% of Qt in 1999, 29 years later than the Lower 48 (much better technology). (Both C+C)
So, if two vastly different regions like the Lower 48 and the North Sea peak right around 50%, 29 years apart, why shouldn't the two swing producers, Texas and KSA, show similar declines?
In fact, as predicted, KSA is dropping at the same point at which Texas started declining.
So again, you are arguing that we are going to see what we have never seen any similar large producing province do, even as the current data support the HL model.
Stickin with the idea that an HL plot works best when applied to an oil 'province' would it not make sense to include Kuwait and at least the Persian Gulf fields of Iran and Iraq in a more comprehensive ME HL plot?
Basically, if you take constant volume under a bell-shaped curve, but you slide the peak over to the right (via new technology extraction) then there is a greater volume to the left of the peak than the right and the slope beyond the peak must be greater than the slope leading up to it.
If Ghawar has been managed in this fashion then the natural peak has been delayed at the expense of a steeper decline on the backside. If this is true, then Ghawar may not model like Texas.
This is great for the short term future, but horrible for the long term future.
That is exactly right. A peak at 50% of Qt would be much better in the long run, as the decline may be more manageable. A steep decline is the worst case scenario.
The peak is getting sucked to the right by many, many straws (vertical, horizontal, and sideways), massive floods of seawater, and sealing of compartments in the field to improve pressure (ok, I threw that one in as conjecture).
Let's hope that you are wrong!
Robert,
Regarding reserves estimates, you are talking about apples and oranges.
The HL method, if you have enough production data, gives you an estimate of the URR for the region.
As you know, most other estimates are for some combination of proven, probable, etc.
The fact remains that you are asserting that KSA, while it currently showing--as the HL model predicted--lower production, is going to turn around and start showing what no similar large producing region has heretofore done--steady continuing increases in production beyond what the region produced in the vicinity of 50% of Qt.
You are asserting that we are going to see what have never before seen in large producing regions (60 Gb for Qt and larger), even as the current KSA data support the HL model.
One should be able to confirm another. Given that we see a huge discrepancy, you still haven't given any reasoning that would indicate that Saudis reserve estimates in 1982 were wrong. You just keep falling back on the HL, which you know hasn't always worked. In other words, you have a model with no possibility of verification. But we have a piece of data that doesn't fit. Yet you reject that piece out of hand without actually attempting to address it. You are throwing out the real world in favor of the model.
You are asserting that we are going to see what have never before seen in large producing regions (60 Gb for Qt and larger), even as the current KSA data support the HL model.
We have never seen this? What about regions in which the HL has shifted? Saudi has shifted. The North Sea shifted. You are using hindsight, and presuming the shifts are done for Saudi. But there is no justification for believing this.
Let me ask you a question. If the KSA production cut is voluntary, it would still fall in line with HL model expectations, but that wouldn't be accurate, would it? If the cut is voluntary, it actually poses a problem for the HL model. Yes?
Are you ready for my response? It is finished. I just don't want us to feel like we have to get a response out in 3 days, so I can wait until Monday. I either post it tomorrow (if the queue is empty) or Monday.
Robert,
What you are calling "shifts" is just the "noisy" portion of the HL plot. In most cases, we don't get an accurate HL prediction until the P/Q intercept falls between 5% and 10%.
This is not a "hindsight" technique. It is a simplified version of the method that Hubbert used to predict the time frame for the Lower 48 peak.
Deffeyes used it to predict a world C+C peak for the 2004 to 2008 time frame, most likely late 2005, and so far he is correct.
And it is the method that I used--accurately so far--to predict lower world exports this year and specifically--and accurately so far--to predict lower KSA production.
In response to your question of what if the KSA decline is voluntary, the problem is that this pattern is contrary to what we have previously seen. Previously, they have raised production when prices went up.
Post away whenever you want to, but I wish you would address the Saudi question in your response, since I specifically raised the issue in my first post.
That's not an answer to the question. True or false: If the current production decline is voluntary, it is a problem for the HL model of Saudi.
Post away whenever you want to, but I wish you would address the Saudi question in your response, since I specifically raised the issue in my first post.
I do address it some, but again I feel like addressing Saudi reserves is a lose-lose proposition. What I think I can demonstrate is that the current round of cuts is voluntary. That doesn't mean they won't peak next year, but I have data that supports the "voluntary cut" position.
No it's not a problem for the model, because we clearly had periods of voluntarily reduced production in both Texas and the Lower 48, which is why I think that Texas and KSA peaked later than the Lower 48 and the world peaked. (Assuming that the world and the KSA have peaked, which is my opinion, at least for crude + condensate and probably for NGL's too).
However, because Texas peaked later than the Lower 48 (relative to Qt), it had a sharper post-peak decline rate, and I expect the KSA post-peak decline rate to be sharper than the world, especially if Ghawar is crashing.
If your question is, if the production decline is voluntary, does it mean that the HL method doesn't work, I would give it until the 60% of Qt mark before I got concerned about the model not working.
To argue against the HL method, you have to assume a lot of "coincidences," given all the regions that have shown lower production after crossing the 50% of Qt mark, including most recently KSA and Mexico.
That was my question. So that essentially means that the model doesn't necessarily predict falling exports this year; it could accommodate falling exports as late at 60% of Qt.
There is something in the queue tomorrow, so I will wait until Monday. I will stop arguing the points in the threads and just let you read the case I have put together.
That's correct. IMO, based on the historical models I think that KSA should peak by the 60% of Qt mark, but that's just my opinion.
Like I said before, if this is possible, then it would indeed hide the steep drop off on the backside of the curve. And people analyzing the front end of the curve and extrapolating the same volume to the back side would be dead wrong!!!
They knew they had better extraction methods coming on line in the near future and the means to pull the peak to the right. Voila!! They increase the volume to the left of the peak and hoped no one would ever bother to speculate what would occur on the right.
Dragonfly41 said,
"And people analyzing the front end of the curve and extrapolating the same volume to the back side would be dead wrong!!!"
I am considered an optimist by TOD standards, not on how much oil is still left to be extracted because I believe we are running COMPLETELY BLIND on that issue) but on the variety of solutions and mitigation strategies available to us, and because I believe our waste and stupid design is so bad that it leaves HUGE demand side reduction possible.
But on the issue of " analyzing the front end of the curve and extrapolating the same volume to the back side", believe only an idiot would do that. Several recent modeling exercises by both Hirsch and Simmons have shown that the better the extraction technology now, the faster the drop post peak. If there is one place I agree with the "darker view" it is that the post peak slope will be VERY SEVERE. I do not have time to fish for the link to my copy of the "newer" Hirsch report on peak oil scenarios, I do have quick access to a recent presentation of his that says essentially the same thing. One of the most recent uses of the most modern exploration/production technology is the North Sea. Here, we see an extraordinary "backside" drop. Go to page 7 of the 10 page pdf report to get a visual image of what it looks like.
http://www.acus.org/docs/051007-Hirsch_World_Oil_Production.pdf
This is the slope that is proving catastrophic to the British. There is no reason to believe that any field developed with the most modern methods will decline in any other way. Thus, world peak, when it comes, will be severe, and aging fields will have no "second life" or tertiary recovery in the old sense of that word. We will need the new fields, wherever they may be, and we just have to pray to God they are there, until we get the alternatives scaled up, and consumption and waste leveled off. That is why, frankly, it is hard to believe that peak is already behind us as some say (Deffeyes Dec 05), because if it were, we should be in absolute hysterical pandemonium by now. That is not to say that it could not be so, but...I believe when peak comes, we will NO WARNING, and the drop off will in fact be very severe. This could be about NOW, or it could be 20 or more years in the future, there is no way to know.
BUT, given the zero warning, the absolutely horrendous information we are getting about oil supply/production/reserves, and the potentially very severe drop off in production (a "cliff", not a plateau, we should be on energy emergency NOW. We must assume the worst.
Roger Conner known to you as ThatsItImout
My God, if KSA REALLY looks like the curve on page 7 of that report...I shudder to think.
In otherwords (and I'll readily admit ignorance in this area), could advance recovery techniques push climbing production for a longer period, only to then have a sudden short crash, followed by a then more steady and slow decline?
If so, the question to me would be, was the short term boost in production on the up side using advanced tech worth the short term crash that followed on the downside?
Also would it make a difference to the field if advanced tech was used for more of its production lifetime, or less?
Telumehtar,
It would be better if one of the of the "oil patch" guys would answer your questions. However, the issue seems to rest on as ou say, advanced recovery techniquies, and on various estimated Ultimate Recovery.
Your question "In otherwords (and I'll readily admit ignorance in this area), could advance recovery techniques push climbing production for a longer period, only to then have a sudden short crash, followed by a then more steady and slow decline?"
This points to the way in which, at any point before geological peak, it's the economics that matter. It would be cheapest, of course, to have to use no enhanced recovery technology at all, and just let the natural reservior pressure handle getting the oil out. However, it then comes out too slow to make the big bucks, so the pressure is cranked up. At what price is it worth it to hit it for all it's worth? Who knows, but it is businesses natural tendency to go ahead and get all the money it can out of the reservior, because, frankly, what CEO or Board of Directors worries about pleasing shareholders in some future generation? Maybe I am wrong, but I consider oil production to be pretty much adjustable up to the real geological peak, at which point it only adjusts down. That's why I ignore the "logistical" stuff for the most part.
Below is a link pointing out the difficulty in knowing exactly how much oil is left. Just because the North Sea is more visable to the world than the OPEC, Russian or Mexican industry, does not mean it is completely transparent and technical barriars to estimation are hard to overcome.
http://www.peakoil.ie/newsletters/710
What we do see is a 5% drop, followed by a 10 percent recovery in the mid 1990's and then....15% down by 2002, in other words, the whole "last ditch push" lasted only 6 years, and now, production is still dropping. It is natural that finally, decline will flatten off, as the last of the tertiary drillers set up a nice pace, no big expense, just aiming to stay for awhile and mop up. What may be interesting is that the final group of tertiary drillers may make more clear money than the aggressive giants did earlier. They will get far less oil, but will spend far less money, and be able to sell it at a far greater price. In support of my remark about the tertiary drilling not being what it used to be before enhanced recovery, the final remarks by G. Morris of Oil and Gas:
"This conclusion seems to be confirmed by G. Morris in an article entitled Norway study finds CO2 EOR too expensive, risky in the Oil and Gas Journal Aug. 8, 2005, which states that water injection (combined with gas injection) works so well in the North Sea that very little movable oil is left behind, greatly reducing the scope for Enhanced Oil Recovery."
So yeah, that nice little bump in 1995-1996 should have swept up the best of the rest. To your question:
" Not saying this is great news, but does it lessen the worse news?"
About the only lessening of the "worse news" is to say that the North Sea will produce some very crucial oil for decades to come. Just not much, but if it is husbanded carefully, it could assist the MOST crucial needs, such as speciality materials and some aviation fuel for critical needs. Likewise the natural gas, which would be absolutely critical in industries where there is simply no replacement with the moleculer make up of natural fossil fuels. It should be treated like gold.
Roger Conner known to you as ThatsItImout
Similarly, the 2001 BP Statistical Review of World Energy has US oil production at 9.39 mbpd for 2000, a total of 3.427 billion barrels for the year. Yet, the EIA spreadsheet says the US produced 1.88 billion barrels from reserves that year.
What other source is there for US oil than from reserves? Or is this just another example of how nebulous the whole concept of "reserves" really is?
Given the definition of reserves is based on oil that his "... recoverable under existing economic and operating conditions" mean that as oil goes up and down in price over a large enough range there should be at least a small corresponding change in "reserves?"
The spread between total liquids, which includes everything including refinery gains, is huge for the US. For 2005, crude + condensate was 5.2 mbpd. For Total liquids, it was 8.2 mbpd.
I think that BP uses a number in between--crude + condensate + NGL's.
NO, No, no, you are dead worng! the EIA does not say that US crude production was 7.61 mb/d. The World Factbook may say that but if they do then they are confusing crude with all liquids or something else.
US total crude + condensate in 2005 was 5,178,000 barrels per day, not 7.61 mb/d. And that was not just crude, that was crude plus condenstate.
Ron Patterson
I grabbed the BP numbers
and charted them.
The numbers are different than yours (I don't know why) but the pattern ins the same.
Reserves in 1980 are 36GB and in 2005 29GB
Production from 1980 to 2005 is 84GB
Unless there was 77GB of growth and discovery these reserve numbers are really strange.
This was discussed by someone in this thread. I think it was that BP is using total liquids.
Unless there was 77GB of growth and discovery these reserve numbers are really strange.
That's the only explanation I could come up with.
Let me revisit your earlier post
Applying your logic to the US
- We know the HL of the US is not wrong.
- How could the US reserves in 1980 be off by 77GB?
You said the SA HL must be off because it doesn't match with the production numbers hereBut the HL doesn't match production numbers in the US and we've seen the HL was correct for the US.
Can we really rule out the HL for SA?
Actually, I think the HL does match U.S. production. If you look at the HL for the lower 48 it points to a URR of just under 200 GB:
http://www.energybulletin.net/16459.html
That is not inconsistent with the U.S. production numbers. The HL is a different case for Saudi. The Saudi numbers do appear to be inconsistent, as the HL is pointing at a much lower number than we might expect given what we know about reserves when they were more transparent.
You said
As I understand what you wrote (correct me if I've this wrong)
1982URR-production != HL remaining reserves (therefore we might suspect the HL to be incorrect)
But for the US
1982URR-production != HL remaining reserves (but we know the HL was correct)
The error goes in two different directions. For SA the reserves seem to be overestimated (or the HL is underestimating).
For the US the reserves seem to be underestimated. In fact it must be underestimated
So
In the US
1982URR-production gives us a very wrong remaining reserves number.
Can we expect it to work in SA?
If not can we use it to verify the HL remaining reserves number in SA?
One thing to note on that Saudi HL is that the last 3 points are all above the line, and in fact it looks to me like 2006 will also be above the line. That may tip the slope of the line toward a higher URR.
My next question is do we know the mechanism that cause 1982 US URR to be underestimated and or the mechanism that increased URR over the last 25 years?
(Also, at what point in time did US URR come into agreement with the HL URR? Do they agree now?)
If we know the mechanism that caused US 1982 URR by to off by 80Gb can we identify the same mechanism in SA?
If not should we give any weight to URR numbers? I mean if we can cleary see they are/were wrong and we can't figure out how they got that way than they would be pretty useless to try to verify HL predictions.
Hasn't Saudi Arabia been the producer of last resort for the last 20 years? They held back production to keep prices up, and ramped it up as demand called for it?
Wouldn't this throw the HL models all out of wack?
Garth
Which is a WAG and which a SWAG I dunno...
and Social conformity is low-average. May not always like to conform to expected social customs, but will generally fit in. If conformity is crucial in new location, check this out in interviews. means you don't play well with others?
For me, this was the one I got a chuckle out of. I tend to avoid conformity (may help explain the position I have staked out against WT) and I encourage my kids to do the same.
A funny story about that. When I worked in Germany, all professionals wore a dress shirt, slacks, and a tie. I asked my boss about this, and he said "Well, since you are an American, and that isn't the culture at our American plants, you don't have to dress that way." So, for 2 years I wore my jeans to work. No tie. I was the only one, and of course I stood out like a sore thumb.
I do think any of us here could give that description of you our endorsement!
Er, no. Now you are just getting hysterical. If you read the article, the people at risk are premature babies.
As I am sure you are aware millions are already dying in Africa, and have been for decades. The causes? War, drought, bad goverment bordering on genocide, disease, overpopulation. You know, the old fashioned pre-industrial causes. Oil shortage not required.
Taking a sensationalist media piece, and putting it in bold, is not the sort of credible fact based argument I expect to see on TOD.
Premature babies are dying because the hospitals can't afford the diesel fuel to keep the generators running. Are premature babies not people? Are their deaths not directly related to an inability to pay for petroleum? Would we not expect the most vulnerable and the poorest to suffer first because of declining oil supplies?
Now you are just making things up. Premature babies are at risk, not dying, due to electricity cuts. Premature babies die because they are premature.
I realise this is a very emotional subject for you, but instead of getting worked into a frenzy we really need to stick to the facts.
Sure, plenty of havoc. Even a handful of deaths (from rioting). But there is a big jump from havoc to mass deaths, or die-off. If Duncan expects there to be 3 million extra people dying every day, a few dead rioters and premature babies isn't going to achieve that.
Stalin said "The death of one man is a tragedy. The death of millions is a statistic." Unfortunately there is an element of the PO crowd who make predictions about millions dying (a statistic), then give the example of a few people dying, or even just suffering hardship. While these situations are undeniably tragic, evoking a strong emotional response does not prove the statistic.
It will looks like, "Refeugees flee Exportland as violance between Importlandland suported rebels in the North and government troops escalates".
I'm not saying we are there... I'm just saying it will be hidden in an assload of noise.
Does anyone have oil import data for those countries with fledgling economies? Those seem to be the ones that would get crushed economically if oil goes to $100 per barrel.
For my home country (Bulgaria), at $60/bbl, oil imports stand at 8.8% of GDP, which is quite unaffordable. This is more than the country spends on science, education and military combined. FYI this is a country where driving car is a luxury and the primary mode is public transportation.
Food will also become an significant issue. As the price of Ngas rises so will the costs for fertializer and pesticides. Farmers will likely reduce the amount of both of these resulting in reduced crop yields. In arrid regions, water for agraculture may also become an issue as fuel and electricity shortages for water pumps become the norm.
In addition, the biofuel crazy will reduce the amount of food available for export (food AID), causing further deteration of the food supply for the poor (especially for Africa). This year has also been a lousy year for agraculture in the US, Asia and Austrialia because of droughts.
If people are dying because of an inability to afford oil, I think that the dieoff has started. It's just not readily apparent here in the US--yet. But the early signs of problems have started to appear."
Westexas, people have been dying for decades because of an inability to afford oil and other forms of modern energy. Millions died in what for lack of a better term I call passive deaths (not in battle or in a car, etc.,nor from old age)in the 20th century from starvation, hunger and thirst related causes, and in other circumstances due to an inability to afford the energy required to operate the complex exosomatic instruments (Lotka) on which human society is nearly (99.99%?) universally dependent. If the passive dead had had a sufficient wad of greenbacks, they would have lived.
We are at or near the peak of energy production worldwide, and greed remains surpreme. It is because of greed and related sins, not peak oil, that the world lacks mechanisms to provide health care, nutrition and security to the people of Guinea and elsewhere.
My point is that these premature African babies, who last year or especially in 2004, would have lived because the hospital had a reliable electricity supply, are now dying because the hospital couldn't afford to keep the generators running. It's a direct connection between less energy and population reduction.
As I also noted, the sub-prime mortgage market is under a lot of stress here in the US, and the delinquencies started spiking when oil prices started spiking, because on the lower end of the economic ladder, energy costs are a much higher percentage of income.
But the point is that post-peak this not a static situation. Some demand, and some people, are killed off and then the supply drops again and we have another round of bidding--and some more demand, and some more people, are killed off. It's a progressive march "Up the food-chain."
Have I mentioned ELP lately?
While I am sure that high pump prices have somewhat affected the low income population, it is by no means the leading cause of delinquencies. The biggest factor was ARM resets and lending rates for sub-prime borrowers. Much of the delinquencies rose is because home prices stopped rising (because they became unaffordable) and homeowners were no longer able to use home equity cash outs (ATM machines). If home prices had continued to rise, homeowners would have been able to refinance or used home equity loans to keep in the game.
Remember that home ATM machines began in late 2002 as the Fed drop rates that kicked off the housing bubble. Existing Homeowners cashed out home equity in order to finance their lifestyles. New Homeowners jumped in and because housing prices began to soar, they too could use there new home as an ATM machine. The Post dot-com bubble boom was revived using massive amounts of new consumer debt. Robert Shiller has an excellent chart showing the exponential growth, which kicked off after the feds drop rates. A quick google search should turn up his housing bubble article published back in 2004. There should be newer revisions since than.
Power quality is bad with a varying voltage. Bring some UPS if you prefer your electronic equipment to survive.
There was power 24/7 under the last prime minister. Now there is some turbine problems at the big hydroelectric plant. And it's been like that for a half a decade.
It is possible the reason there is no power day time is that it goes to the alumina (not as power intensive as aluminium) plant.
The biggest problem I'm finding in researching the Western Roman Empire collapse is that everyone attributed their problems to political anarchy and inflation, without considering that increasing costs of supplying wood to the empire would have both effects, political problems due to difficulty in paying for the government and inflation due to rising resource costs. The emperors of the day considered the inflation problem to be caused by "speculators" and greed. Sound familiar?
The housing bubble popping is a great example. Why is the bubble bursting? Certainly not because oil prices rose, of course! It was because the Fed started raising interest rates. But wait, the Fed raised interest rates because of signs of inflation. That inflation surely came from labor market demands! Except that wage pressure was fairly light at first, when oil prices were one of the few triggers for inflation. Nope, none of that is due to increasing oil prices. Nothing to see here, move along...
Aren't you just playing a "Six degrees" game there? With a few steps you can always find oil somewhere in the loop. I'm not sure that proves that oil is the cause.
I assume you have read Tainter, what is your take on his theory of collapse?
Tainter's analysis of collapse makes a good deal of sense to me, except that the idea that polities are there to sweep in and hold up the current level of complexity in a collapsing society doesn't look reasonable. No polities invaded or out-competed the Soviet Union or the Western Roman Empire to maintain their levels of complexity. Their competitors at the time just let them fall.
I assume you had a reason to ask that question?
I mean really, are you demonstrating clear causality here?
Odograph, have you read Tainter's book yet? I was quite surprised to have someone else ask you that without a quick "yes" reply. You are essentially arguing this complexity point with everyone. It seems as though you owe them the basic effort of reading "Collapse of Complex Societies." It isn't particularly expensive or difficult to read, and it's a legitimate scholarly work. You certainly don't have to agree with the doomers or Tainter's analysis, but it is intimately related to this topic.
I think Tainter and Greer are enamored of a correlation they see between complexity and collapse, and in turn a correlation between past moments of "complexity crisis" and current conditions.
That is for the record, two correlations:
- complexity -> collapse
- past collapses -> current conditions
To me that is too loose a framework to go beyond general concern, and certainly not strong enough to declare "game over" as many do.It is way too subjective for that.
Darwinian did a similar thing yesterday when he stated something to the effect that Saudi Arabia would never reach and sustain 10 million barrels per day for any significant length of time. Obviously, if they do, then something is wrong with Darwinian's figures and I presume he would re-evaluate his viewpoint.
What you wrote is almost exactly what I have written in my essay. A model has to have a falsification test. It is critical. It is also critical that the falsification test is reasonable. If I say "I am wrong if Saudi never increases production", then that's not a good falsification test. "Never" is a long time.
The essence of my position, though, is not really that Saudi hasn't, or isn't about to peak. My position is that the evidence (specifically the export data) at this point doesn't support that they have peaked. A falsification test for me is if prices start to go up again, and inventories start to get pulled down (a good sign that demand has picked up; price is not always a good indicator) AND Saudi doesn't increase production then that would definitely be a warning flag. At that point you have to see if there was some logical reason that they didn't increase production (perhaps others picked up production and it wasn't needed). However, high prices and high demand and no increase from Saudi would strongly imply to me that I was wrong.
How much are KSA constrained by their OPEC obligations? With most of OPEC struggling to meet their quotas, only KSA has real ability to increase producion. OPEC is set up to ensure it's members each get their fair share of the pot. The other OPEC members would take a dim view if KSA increased its market share at the other's expense.
KSA may or may not be able to increase output. But if they put their responsibility to OPEC partners first, they have no incentive to increase it.
I'd ask if you need an actual population decline for that ... but that's the kind of question that brings out the doombats
Either that, or all this talk about flooding the market and lowering prices is just a show. A way to put pressure on Iran without actually planning to do anything other than talk.
If Hizzbullak can crack the israeli codes the iranian inteligence can make better.
They problably know better the Saudis situation than CIA...
...backtrack IP address for SOP...note addresses of all neighbors within 3 mile radius. Pull all utility and credit card transaction data for last 5 years. Tell FBI to use new cell phone eavesdropping technology to record all conversations containing key word "peak oil" and "end is near".
JK ;-)
I am pretty sure TOD gets a very broad look over from many folks across this tiny little world. I just wish we could get Heinberg's "Deep Throat" to contribute here...that would sweet.
Perhaps he/she already is and we just don't realize it.
This is a tiny corner of the internet.
This is the USA-centric corner of the tiny corner.
Egregious TOD centricity.
The flip reply is to say that no one of any consequence reads TOD.
The flip corollary is that someone here is the exception that proves the rule.
You know who I am addressing you.
Lorenzo
Funniest thing I read this week :) I guess this "prominent incumbent national security official" is not on the CFR mailing list, 'cos apparently they "know" all about Peak Oil...
Sorry, but national governments, and the shadowy figures behind them, show little sign of "knowing" about PO, let alone having any coherent plan to deal with it. This does not surprise me, government is primarily reactive, not proactive. Even when TSHTF, they cling on to what worked in the past. Changing course means admitting failure, leaders hate doing that as they lose credibility. Iraq is an obvious example.
President Bush's policy in Iraq is not working, change strategy now
Is Baker a secret islamobadfacshit out to destroy the zionist entreaty?
No wonder you do not understand my "ranting" and no wonder you do not have concern. Ignorance is bliss.
"communicating with devotees of the 12th Imman ... will lead to worldwide disaster.
I never said "communicating with" them would "lead to disaster." That's your strawman. Baker might think he can reason with them... just like how many of us here used to think we could reason with a creationist.
Iran is the most immediate threat for war in the middle east - a threat for Israel as well as the Arab countries and sunni shiites in general... the biggest threat to world oil supplies. All because Peak Oil gives them unprecedented power, and because their particular apocalyptic religious fantasies.
Cultural and religious Bigotry and ignorance is the basis of your reasoning, your blindness and the confidence you have in your blind reasoning.
The point in contention is whether or not Iran is a Current threat to it's neighbors (ask the arabs, sunni and israelis) because Iranian leader's hold fanatical apocalyptic beliefs at a time we are entering T1 Chaos of Peak Oil.
I watched Colin Powell give his speech on alleged WMDs in Iraq at the UN, and I thought "Is that all they have? I can't believe they are really going through with this". I still don't really understand why GWB decided to invade. I understand even less why my own leader decided to support him. I'm even more baffled how these people managed to stay in power.
Anyone who cuts and runs is a coward and a traitor. Got it? Get it? Good.
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/curren t/txt/wpsr.txt
I correctly predicted 2 out of 3. The draw down in gasoline inventories is a surprise, and will put some pressure on prices.
No, you did not. Your prediction said:
The actuals:
crude: -1.1 mb
gasoline: -1.1 mb
distillates: -0.4 mb
It appears that the only one you got right was the decrease in distillate stocks. Correct me if I am wrong, but doesn't this mean that you got 1 out of 3 correct?
I posted a piece of my personality assessment above. Most of it, I agree with, but they wrote "[Robert] is not easily embarrassed." That's not true, and nothing embarrasses me more than making an error. They also wrote that I love taking risks, and that wasn't accurate. Some of that was based on how some questions were phrased. Like I told them during the interview, parachuting into a pool of sharks is not something I would find interesting.
So, I don't want people to ever take it personally if I go after them and try to persuade them that their POV is wrong (even if doing so means I am not conforming to the majority view). That is simply the way I am wired.
Honestly, I have been thinking all moring that I had written "oil down" last night. I expect crude inventories over the next few months to trend down as Katrina fades from memory. But the gasoline inventories situation is looking worrisome. My prediction on gasoline inventories was based on 1). Thanksgiving travel is over; and 2). Refinery turnarounds should be mostly complete.
Something has to give on the gasoline inventories. I would expect the price to go up on the news, but I just checked and gasoline prices are down.
I think it makes more sense to look at finished product stocks vs. crude + blending component stocks, but I am by no means an expert in these areas. What do you think?
Total commercial petroleum inventories fell
by 4.2 million barrels last week, and are just above the upper end of the
average range for this time of year.
Total Stocks 1,044.9
Total stocks fell by 33 million barrels since beginnig of October.
On 10/06/2006 stocks were 1,777
Total Stocks 1,777.0
I think price of oil will go up to decrease demand and attract more imports.
Aroung 0.75mb per day. I believe this is one of the reasons of oversupply in the market. We draw inverntories.
Igor.
Is this an unstated signal that we are IN an emergency?
No, it is not a signal of an emergency. It is a signal that the USA just had a national election where "pocketbook" issues may have been a factor.
If you are unable to adhere to the tenets of the US Constitution, the 1649 Treaty of Westphalia, or the Geneva Conventions, why bother with such a trifle as administrative regulation?
If the oil production "system" is a tightly coupled system then it is likely to be extremely sensitive to even slight changes in inputs. I believe RR has confimed this tight coupling as a correct interpretation in a prior thread.
The addition of SPR reserves to the market results in an oversupply condition and drives down price. OPEC views this and reacts to the falling price by seeking voluntary production cuts in order to maintain price levels.
The SPR spigot is then closed and the market should return to normal. However, because OPEC has already reacted by curtailing production, the result is that the market is now undersupplied, the price climbs and hoarding behavior amplifies the effect of under supply. In a tightly coupled system the result will be a system which oscillates wildly (hunts) as the intervention which sought to dampen the swings actually serves to amplify them.
If this interpretation is correct it would explain what WT is observing; with regards to geologic peak the outcome would however be the old Scots verdict - case not proven.
I will take "never".
If this is a correct interpretation then within the next month or so we should see a sudden blip in liquid fuels demand and the market price. Since OPEC has been working to curtail production they would be unlikely to immediately respond with an increase in supply so this "blip" may result in an extended period of several months of high prices.
When OPEC does finally increase supply there would be a decrease in hoarding behaviour and this, coupled with OPECs return to a "normal" supply quota would drive the price down, create the appearance of oversupply and potentially restart the cycle all over again.
The wildcard in this is the nature and extent of any US recession. The rising price (the "blip") would tend to increase the likelihood and potential severity of a recession. KSA would be "blamed" for being the cause and the Council on Foreign Relations would have more justification for its policy recommendations.
The root cause of the problem is that we have what appears to be a tightly coupled system with an imperfect signalling system (price) which suffers from major lags in its feedback effects.
Oil rises on surprise drop in gasoline, oil supply
Looks like Dante's right...
So this week, blending components are down as well as crude stocks but finished gasoline is up. This sounds like we are drawing down our relatively high crude stocks to generate finished gasoline stocks that were down.
Why do we look to the total gasoline stocks when drawing from one component of that (blending components) increases another component (finished gasoline)?. I think the more relevant #s to look at are finisheg gasoline (and other finished products) vs. crude + blending component stocks.
(from the Peak Export thread)
Several Points (that others have made before)
US inventories are only high by recent (1999 and later) standards. From 1982 to 1998, for a period of 17 years, the average late November crude oil inventories were 337 million barrels. Over this time period, the average four week running average of crude oil inputs (for late November) was 13.5 mbpd, a day's cover ratio of 25 days.
From 1999 to 2006, a time period of 8 years, the average inventory for late November was 302 million barrels, with average (four week running average) crude oil inputs of 15 mbpd, a day's cover ratio of 20 days.
The most recent inventory number of 340 million barrels, versus the input of 15 mbpd, gives us a stockpile of 23 days consumption, 8% lower than the 1982 to 1998 average.
So, relative to crude oil inputs, we are below the long term average, but above the average of the past 8 years, which brings us to the crude oil quality issue. We simply do not know what percentage of crude oil inventories consists of light/sweet versus heavy/sour. We do know that the price spread between the two has been at record levels in recent months, which suggests that heavy/sour is more available than light/sweet.
Finally, the US is not the world. Large parts of Africa are being forced to conserve because they could not afford to buy the oil. I believe that the current round of bidding for declining exports will be a lot tougher for the US.
As Alternative Energy Heats Up, Environmental Concerns Grow
Question: When fires and other factors are considered, what country is the third largest carbon emitter behind the U.S. and China?
Answer: Indonesia
The WSJ article for subscribers is here. Several free graphics below:
At a new oil-palm plantation, the hillsides have been cleared and terraced
Production of renewable energy sources has surged in recent years amid high crude-oil prices
Average weekly prices of crude palm oil in the European Union, in dollars
A fire at this oil-palm plantation near Pontianak, Indonesia, made some local villagers sick
A ship on the Kapuas River, in the Indonesian section of the island of Borneo, is shrouded by smoke from forest fires
NEW YORK, Dec. 1 A U.S. utility company and a pollution recycling company have successfully converted power plant gas to usable vehicle fuel.
The Arizona Public Service Co. and GreenFuel Technologies Corp. said Thursday they converted carbon dioxide flowing from the plants gas stacks to ethanol and biodiesel using algae, reports Platts, a global energy information provider.
Upto 10,000 gallons of biodiesel per year per acre...let's see...
/42 = 238 barrels per year per acre
x4202 = 1,000,000 barrels per year per 4202 acres
x365 = 1,000,000 barrels per day per 1,533,730 acres
What square area?...
sqrt = 1,000,000 bpd per 1238 acres (squared)
x208 ft = 1,000,000 bpd per 257,504 ft (squared)
/5280 ft = 1,000,000 bpd per 48.7 miles (squared)
Or...
1,000,000 bpd per the size of 1.5 Rhode Islands
To put things in further perspective, if 1.5 Rhode Island's covers 1,500,000 acres, then the area of Rhode Island must be about 1,000,000 acres.
The area of the lower 48 U.S. states is about 2 Billion acres
Therefore, the U.S. is about 2,000,000,000/1,000,000
or 2,000 Rhode Island's worth.
Or, for just 30 Rhode Islands out of those 2000, we get our current consumption of 20 million barrels per day.
It's a lot of land. But,the trick will be to actually get 10,000 barrels per acre. It seems to me that in order to do that, photosynthetic efficiency would have to be about 10 %. Maybe algae can do that well, but it sounds high to me.
That comes to 240.47 barrels per acre. And that comes to 10,100 gallons per acre per year. Corn would produce far less than one tenth that amount of ethanol. I don't know what you are growing to increase that amount ten fold but I seriously doubt you could pull it off.
Ron Patterson
Lastly, will the acreage and resources dedicated to these growing ponds displace land and consume fertilizer that would otherwise be used for growing food? This seems like one of those "one size fits all" easy solutions that in careful analysis probably has a very limited capability for producing more than a small percent of the 21 MBPD of US oil consumption.
The government of India is looking at Jatropha trees for producing oil seeds to make biodiesel. Their experimental plantations have produced about a 1/10th of this production of algea/bacteria oil for given land area. However, Jatropha trees require little water, little fertilizer and little human effort except to collect the seeds which fall continually through the year. Another advantage to these trees is that they provide an evnironment that prople can live in - can't do that with acres of algea ponds. Jatropha trees were originally native to central America, Mexico and the southwest US, but can be grown in many subtropical climates around the world.
http://www.greenfuelonline.com/technology.htm
<---
But they are silent on the actual details of the required inputs. They do specify an unquantified "parasitic" burden on the parent process.
What is really required is a rigourous application of Net Energy Analysis to all of these proposals. RR intiated this with his ethanol analysis. I believe TOD could provide a great public benefit and really put itself on the world's cognitive map if we, you, Nate, RR, Stuart, HO, WT, Khebab, whoever could put together a structured NEA analysis of each of these proposed PO responses.
We become part of the mitigation effort rather than a set of easily dismissed "fringe doomers."
Yes, I mistakenly typed barrels instead of gallons. But the result of the calculation remains the same.
I agree that 10,000 gallons/acre is far more than even estimates for cellulosic ethanol. Nevertheless, that is what Greenfuel claims on their website. I seriously doubt their claim, because it would imply that those little algae must be using photosynthesis at about 10% efficiency, as opposed to the 1 or 2% that corn is capable of.
The only thing I can figure out that might cause this to happen might be the much higher than atmospheric concentration of CO2 that would be used in the Greenfuel process. If CO2 is a limiting factor in normal plant growth, then this might be the case.
I doubt very seriously that we should or ever could cover 30 Rhode Island's worth of area with Greenfuel ponds. To me, the result of the calculation shows that supplying our current rate of consumption of petroleum with biofuel derived products is quite unrealistic.
However, there are probably locations where some of this type of technology would make a positive contribution, and it makes sense to find out just how much.
Tony Verbalis
I have not gone to view their site, but I assume that Algae require lots and lots of water and are also heavy feeders of phosphates. I suspect that water restrictions will prevent any measures to scale this up into multimillion barrel operations.
This is actually a fairly amazing breakthrough. It drops the cost of solar cell production to below $3.00/kWh AND produces kW/h in the range of 8-10 cents. Imagine what will happen when these start being mass produced in the near future :)
That is just PR fluff to draw attention and justify more appropriations.
Hothgor COMPLETELY misrepresents this it were an accompl and states as if accomplished fact.
No analysis on scaling up, note that this is a "concentrator " system that uses mirrors ($$) to focus light on the cell. No word on lifespan (many of these high % do not hold up) and cost to fabricate whatever trick they used to get above 40%.
I see this as a nice bit of basic research that is unlikley to lead directly to commerical applications (but like all basic research, it has indirect impacts).
Best Hopes for Reality,
Alan
Hothgor COMPLETELY misrepresents this as if it were an accomplished fact.
Sorry, on first cup of coffee is my only excuse,
Alan
"Reaching 40 percent efficiency helps further President Bush's Solar America Initiative (SAI) goals, which aims to win nationwide acceptance of clean solar energy technologies by 2015. By then, it is intended that America will have enough solar energy systems installed to provide power to one to two million homes, at a cost of 5 to 10 cents per kilowatt/hour"
That number is disappointing to me. Calif. intends to have a million solar roofs in 10 years.
Congratulations to California! The Million Solar Roofs bill--SB 1--was signed into law on Monday of this week by Governor Schwarzenegger.
"The 40.7 percent cell was developed using a unique structure called a multi-junction solar cell. This type of cell achieves a higher efficiency by capturing more of the solar spectrum. In a multi-junction cell, individual cells are made of layers, where each layer captures part of the sunlight passing through the cell. This allows the cell to get more energy from the sun's light."
So basically, this solar cell simply has more layers then the average solar arrays currently do, and it allows you to capture a far larger percentage of it's energy. It should also be noted that mirrors are not mentioned in the article at all. Do a find search for confirmation.
Try again Alan
Best Hopes for Reading Comprehension
I couldn't resist...
Thank you for causing me to choke on my coffee(as I laughed) reading your..."Best Hopes for Reading Comprehension" tag...!
-C.
Just look at the teacher/student tone he takes with Alan, one of the most respected posters here at TOD. I don't see how a 22 year old college grad would even think of speaking this way to a respected, experienced individual such as Alan.
I agree, Alan deserves much respect. I apologize for my laughing at Hothgors statement, in advance I did not mean any disrespect to Allen, the comment just took me off guard and I did choke on my coffee at the statement.
-C.
VERY much "within the lines" of comity and good debate here at TOD :-)
I chose "Best Hopes" as "my line" after my return to New Orleans after Katrina. It is my reaction (instead of doomerism) to daunting challenges of rebuilding New Orleans, Global Warming and Peak Oil. Realistic assessments (a weak point w/Hothgor) combined with positive actions to improve a very bad situation.
Will these efforts improve things "enough" ?
HE!! NO !
But they can keep very bad from getting even worse IF we are lucky and work hard. These are battles worth fighting !
Best Hopes,
Alan
Why don't you let Alan stand on his own two feet. He jumped the gun on this one. If I were in his shoes I would admit I was wrong and move on.
What would you do?
The smaller point is that solar concentration = mirrors (some times prisms). This is a term of art used in the Solar PV business.
2) YOU ARE RIGHT
One of the great things about TOD is that "appeal to authority" is not a valid debate technique.
I do have some respect here, and I just posted a "IMHO SWAG" estimate regarding solar thermal power. I suspect that will carry weight from me, and readers will accept that as a reasonable estimate. OTOH, I am not immune from challenge. Some one could argue that the "off hours" are more closely related to cloud cover than hours of sunlight in the day AND THEY MIGHT BE RIGHT
Bowing to my authority would cut off a viable technical debate that has some impact on post-Peak Oil mitigation strategies. Not good, and it would reduce the value of TOD.
Best Hopes for valid technical debates,
Alan
This is better than a WAG since it has a scientific basis to the wild guess :-)
I only make SWAGs, never WAGs ;-P
Alan
Something I have picked up in decades of watching solar PV.
Multilayers are nice for satellities and other area limited "cost no object" applications IF they can last 12-15 years.
Your original post was EXTREMELY misleading and did not represent the truth. This "breakthrough" is NOT a major part of the solution.
You are right on one point. I have little patience when it comes to rebutting your claims. I spend as little time as possible (I work MUCH harder when contesting anyone else, to make sure I have my facts right). With you it is just slap-dash, and that is all it takes.
Best Hopes for Learning and Growing,
Alan
But in this case, Alan, there are no mirrors used at all. The 'concentration' effect is done by refracting light onto lower and lower levels by each solar cell to allow the same PV area to squeeze out as much light energy as possible. This isn't a 'mirror' per se, but the principle is similar. Think of each cell as a 'prism'.
You are misinformed about multi-junction solar cells. They do not concentrate light, but rather convert a higher percentage of the incident light into electricity. Please read this.
Concentrators, which can be reflective (mirrors) or refractive (lenses) are used to gather light from a broader area and focus it onto a smaller area occupied by the PV cell. The tradeoff factors are PV cost, PV efficiency, and mirror/lens cost and complexity. Most of the money bets are being placed on decreasing PV cost using thin film technology (such as Nanosolar) because there is a lot more room at the bottom (easier to cut costs in half vs. doubling efficiency). The other issue with concentrators is that the extra heat damages the PV cell. Multi-junction research is trying to address that as well.Source please ?
I read and reread the linked PR sheet and saw two seperate points that do not appear to be linked:
Selective absorption by different layers does not imply increased solar flux. I read "outside mirror concentrates solar flux into new solar cell" and "inside solar cell, each layer selectively absorbs selected wavelengths that it uses to generate electricity".
And, or course, there is not nearly enough commercially available gallium to cover 256 square miles.
Best Hopes for reading comphrension,
For all our readers here - not exactly.
The multilayer structures are provided in order to extract different regions of the spectrum at optimally efficient band gaps. For example, the band gap of silicon is around 1.2eV depending on crystal (or amorphous) structure, and the actual output (junction voltage) of a real silicon cell is only around 0.5V, which is even less. But even red photons have 2eV of energy (and blue ones have more.) So the best you do with real silicon and red light is 25% efficiency (0.5V over 2V), and the best you ever could do in principle would be 60% (1.2 over 2).
One thing you could do is to use amorphous silicon, or some other material with a higher band gap. But then the longer wavelength photons aren't converted to electricity, so the output voltage rises but the current drops.
Another thing you could do is to put a higher band gap layer over the silicon. If that layer is transparent to the longer wavelength photons, they go on through to the silicon and get converted there, but the shorter wavelength - and more energetic - photons will be converted at a higher voltage in the added layer. More generally, you use whatever layers your materials processing will allow, and you want the layers to provide equal currents, as you will be limited by the one that provides the lowest current. Since the periodic table is limited, and politicians impose even more limits (thousands of square miles of, say, thallium, is not a likely prospect), this is tricky.
Note BTW that there are other approaches involving quantum dots or the like, but it is going to be a very very long time before that sort of stuff is manufactured routinely by the square mile. So it's good long term research but we can ignore it for our purposes here.
The "concentrator" part comes because these layered things are complex and expensive and usually have large leakage currents. A square meter of mirror is a lot cheaper than a square meter of these complicated materials. In addition, leakage currents that sap the output tend to be more or less fixed, arising from crystalline defects, so the more concentrated the light, the higher the proportion of usable output. (On a cloudy day with some polycrystalline silicon cells you may get essentially nothing, because all the light is consumed just feeding the leaks.)
The trouble with concentrators is that, as Alan says, they use mirrors (see the link). Mirrors have to be cleaned and aimed. That implies expensive, costly-to-maintain motorized mounts, and lots of them, because wind loading limits the practical size.
The more "suns" of concentration you need to overcome electrical leakages and monetary expense, the cleaner they have to be kept, the sooner they become too scratched up, and the more fiddly and precise their motion needs to be in order to focus the light properly onto the solar cell. This sort of thing is not good at all in any part of the country where there could be snow, freezing rain, or dust or other mineral accumulation, because the need to focus the light amplifies the scattering effect of any surface defects or contamination.
All this is why most solar panels in practical everyday use have no concentrators at all, and those cool-looking mirror plants are basically very expensive high-maintenance research demonstration facilities.
One small addendum. In the past, some researchers have used prisms to separate wavelengths and used different solar cells for the various wavelengths. IMHO, not practical to scale up, but I have seen arguments that it is.
Think long, thin prism with lens shaped surfaces (to accept solar flux from different aspects) feeding parallel strips of different solar cells. Perhaps rotate prism as sun moves.
IMHO, not cost effective.
Alan
Does this mean deserts are out of question too? I had not thought about it, but it seems that the dust particles and wind will downgrade the mirror quality in relatively short timeframe.
In reality, one gains operating experience in a wide range of operating environments over multiple years, refine designs based on that experience (as we are doing today with wind) until we reach commercially viable solutions. IMHO, wind is just now of the cusp of that transition.
Solar thermal and solar PV are still many years away. But one cannot travel a 1,000 miles without taking the first step.
Best Hopes for Steady Progress,
Alan
Why manual labor? An automated system could probably be developed. Basically something along the lines of an automated squeegee(sp?).
You might need manual labor to maintain the cleaning systems, or to do say an annual or semi annual "intensive" cleaning, but "robots" I would think would be perfect for something like this.
A detail to be worked out based on operating experience (and future unemployment & economic conditions).
Best Hopes,
Alan
Larry who did his undergraduate work in atomic physics.
I realize it adds to cost, but does a mirror need to be exposed to the elements? How about a clear replaceable shield, similar in concept to the front of any flashlight that protects the bulb?
Solar Concentrators I'm pretty sure use back surface mirrors... they don't really care too much about a little refraction and its not going to hurt something like a boiler tower.
Now they MIGHT use a front surface mirror in the form of a metal. Lots of solar cookers use that trick. Metal is pretty expensive though. (durable but expensive)
These PV systems look like they are VERY vunerable to refraction and prism effects scattering the wavelengths they need...... so.... I'd be real cautious about betting the farm on it.
I tend to agree with Allan. I bet this works great in a lab.
Great info there. What do you know about the amount that regular 'unconcentrated' PV panels can tolerate some very moderate Concentration? In the range of 1 to 2 more 'suns', ie, adding mirrors to the sides of a single panel at fixed angles, and then tracking the whole bundle with the sun.
Forgetting for the moment the expense or complexity of such a system, have you seen information regarding the heat and light tolerance and degradation factors for standard types of panels?
(The plan would probably include a microprocessor with some heat sensing for the panel, as well as enough movement of the flat mirrors to 'defocus' them from the PV if it was 'over-exposed'
Thanks,
Bob Fiske
The other 'complexity' that wouldn't be hard to add (and some have) is either liquid cooling on the back surface of the PV panel, and/or some Peltier Junctions (also called Thermo-electric modules) in between the PV and a coolant.. giving you a cooler PV, so increased performance, plus some add'l current and fluid preheating behind the panels, to be used in other ways in your home/business. It gets more complex, but like our bodies, has multiple features that interact and support each other's purposes.. haven't done a cost or lifespan analysis, but I like designs that get multiple birds with one system, to mix metaphors and tweak birdwatchers..
Bob Fiske
'Birdwatchers top my honors list,
I aimed to be one, but I missed.
Since I'm both myopic and astigmatic,
My aim turned out to be erratic..
.. so I sit, getting old by inches
watching the hours instead of the Finches,
Considering Idly in my Gin
the Audubon that I oughta bin!'
Ogden Nash
Best Hopes,
Alan
265 square miles. Aargh, those English units.
650 million square meters. At 1050 watts/square-meter, 680 GW of sunlight at high noon at the equator.
However, the USA is not at the equator, and night eventually falls, and it's cloudy a good part of the time, and concentrators produce zilch when it's cloudy, so maybe 80-150 GW of total useful insolation on a 24/7/365 average, depending on location.
At a touch over 40% efficiency, maybe 35-60 GW of electricity on average.
Total US energy consumption is on the order of 3000 GW. And I'm guessing based on other posts that you're not proposing the adoption of a standard of living that would be a small fraction of India's.
So 265 square miles "supplies all the energy it needs", how?
US production 3,892 TWh
US consumption 3,656 TWh
Divide by 3892 TWh by 365x24 and you get an average of 444 GW.
Now storage losses, larger transmission losses, etc all impact how much solar thermal or PV would be needed.
Just trying to argue real #s
Best Hopes for good data to base arguments on :-),
Alan
So we are both "right" and it is good to get good #s in front of TOD readers.
Best Hopes for good #s,
Alan
I am aware of claims a (Sterling) farm 100 miles by 100 miles in the southwestern U.S. could provide as much electricity as is needed to power the entire country.
or for current PV, More realistically, this "sunpowered" tract of Ohio land 14.6 miles on a side (or 214 square miles) could also be dispersed across the Buckeye State (40,953 square miles) with smaller PV systems sited near or on building rooftops as distributed generation, and could supply Ohio's yearly residential electricity load (43,280 million kWh).(1)
National Geographic, 8/05, estimated 10K square miles of PV for the entire US.
So you are talking about roughly a 40 X increase in efficiency.
The Slashdot posting on this topic mentioned the following:
which is a bit larger than 265 square miles. Oops.- add to the costs
- reduce output
I have very vague recollections that Lexan light diffusers absorb ~8% of light from fixtures.Best Hopes for solutions,
Alan
Admittedly this means the homeowner needs to be aware of the weather and its potential damage and then react in time, but I get the feeling that in a lower energy world, weather is probably going to play a more impacting role on our lives anyhow.
Could be made from a variety of non-high tech materials... wood perhaps?
Hothgor:
Article:
Any ideas what optical concentrator that increases sunlight intensity, other than mirrors?
Best Hopes for less confusing jargon,
Alan
In the field, mirrors appear to be the only way to go.
The other alternatives are even more expensive.
Alan
Polycarbonate fresnel lens ..
Triff ..
interesting! it (the site) will not be up much longer, but interesting nonetheless!
Yesterday's Wall Street Journal had an article on large concentrating solar power (CSP) plants. Note that this is thermal solar power that uses solar insolation to generate steam as opposed to the PV solar technology described in your post. The article is not free, but there are a couple of free graphics:
Abengoa's PS10 solar plant in Spain (above image) is the first of a series of seven plants that will eventually generate enough electricity to power 180,000 homes.
Non-free article is here:
Sun Reigns on Spain's Plains
http://www.solarpaces.org/SOLARTRES.HTM
Best Hopes for Renewables,
Alan
Some stats from the link:
: A 120 MWt receiver system with higher flux capability and thus lower heat losses which also is immune to stress corrosion cracking; improved reciever thermal efficiency by 35.
: A larger thermal storage system, storing 6,250 MT of molten nitrate salt (16 hours, 600 MWh)
This is for 15 MW steam generator.
I am encouraged by this and can see commerical applications with two more generations of this technology.
IMHO SWAG, the "off hours" will be after 8 to 9 PM in the winter and after midnight in the late summer, fall & early spring. SWAG that it will take an hour to 90 minutes after dawn to get going after depleting heat reserves overnight.
All in all a good profile for air conditioners, lighting, cooking and other loads. Not perfect, but only hydro is the perfect power source ;-P
Best Hopes,
Alan
As I have said elsewhere, the big key to creating a sustainable civilization is not the science. It's the political and psychological will to act on the problem before it becomes critical.
It would probably be applicable to commercial systems only.
Gotta love the media......
However, the fact that Iran is now selling in euros has not been confirmed. This Bloomberg article says:
'Iran's policy of selling oil in U.S. dollars ``has not changed yet,'' said Hojatollah Ghanimifard, executive director for international affairs at National Iranian Oil Co., in a statement read to Bloomberg News from his office.'
I am inclined more to believe the iranian article though. Iran does not have interest in devaluating the USD and hurting its dolar holdings so I would not be surprised if officialy they are claiming they don't, while quietly switching to euro in the background.
The article doesn't make clear whether it refers to Iran receiving payment in Euros rather than dollars or if they are setting a price is Euros. In either case, it doesn't mean much.
RECEIVING PAYMENT
I am sure that Iran already receives payment from the EU in Euros for oil. There is a claim that floats around here that the US requires the EU to convert Euros to dollars to buy oil from Iran and others, but it seems entirely unsubstantiated.
SETTING A PRICE
Setting a price in a currency other than dollars is less meaningful. If the global price is set in dollars there are only three categories that Iran can price in:
1. Iran oil price in Euros * E/$ > $ oil price
2. Iran oil price in Euros * E/$ < $ oil price
3. Iran oil price in Euros is = $ oil price.
If the price is equal, it just means that Iran runs around resetting its price continuously. If their price is higher, customers buy other oils. If their price is lower, then they sell for less than they could have sold for in dollars.
The Gulf Cooperation Council pegs its money to the dollar, and infrequently adjusts that peg. They plan to move to a Euro like monetary zone in a few years, and although they didn't specifically say this, the GCC unit would then be easier to delink from the dollar.
China and the GCC are the dollars strongest supporters, as they keep most of their savings in dollars to maintain their pegged exchange rate vs. the dollar.
I strongly agree with this and think that the dollar savings, rather than the use of the dollar in trade, underpins its value. I contend that modern currency markets are adequately efficient that the amount of currency held to conduct trade is minimal compared to the amount held long-term based on exchange rate and return/risk considerations.
The GCC and China pegs, adjustment of the peg, Japan's dollar holdings, and potential shift in holding Euros are a far, far greater threats to the dollar than the oil pricing issue, which gets much more attention here.
My point is not that the dollar won't fall, as I think it will. However, the idea that an Iran Oil Bourse is the achilles heal of dollar hegemony is baseless.
What happens when the dollar falls - who gains and who loses - is an even more complex question. Any theories?
http://bigpicture.typepad.com/comments/2006/12/bloggers_take_t.html
I thought this was was poignant and in line with the TOD consensus:
www.econbrowser.com/archives/2006/01/strange_ideas_a.html
I also agree with your introduction and summation of the opposing points. It is clear that you have studied the issue and anticipated (and agree with) my earlier point regarding the importance of savings versus the actual currency of trade.
However, I find the rest of your argument to be circular and based on unsubstantiated assumptions. Your key point seems to be that countries fear a depreciation of their own currency against the dollar because oil is priced in dollars. But oil is only priced in dollars, not valued in dollars. When the dollar goes down, the dollar price of oil goes up, but the Euro price may not. So Euro countries would in effect have lost purchasing power in oil terms by holding dollars and gained by holding Euros.
Econbrowser showed in an earlier article that there is very little correlation between the dollar and the oil, price and that holding dollars confers no advantage in oil purchasing.
You also claim that major economies to fear a sudden depreciation of their currency against the dollar. In reality the opposite appears true. Many major economies fear an appreciation of their currency versus the dollar. China, Japan and many exporters buy dollars to keep their currencies down. It is not accurate to assume that Japan, Saudi Arabia, or France hold dollars purely out of fear of an attack by currency speculators. Currency maintenance is primarily a long term effort.
Yes, the majority of global trade is done in dollars, but it doesn't have to be. It only works that way now because the dollar is the best currency to transact in. I suspect that a large portion of trade is done in Euros and that that portion is growing. If it transpires that the Euro becomes a better or easier currency, then transactions will migrate to the Euro.
If an EU country wants to buy goods from Brazil, what currency is the transaction done in? It all depends on what currency the participants want to do it in. There is no reason for it to be dollars except that forex markets for dollars are the most liquid. It is very cheap and easy to buy dollars and there is no penalty for converting into dollars to make transactions.
Countries around the world hold dollars for exchange rate maintenance and return considerations. The US is a major participant in global trade and the dollar is disproportionably represented because of other countries peg to it. Historically, the US dollar has provided returns that have been desirable and the market for dollar assets is massive and liquid
All this may change. If it does it will be because US fiscal management has undermined the confidence in the stability of the dollar, declining US growth prospects reduce returns, and/or the Euro is able to absorb larger inflows.
Iran is worried that the US will block their transactions and wants to get them out of US dollars and institutions. They seem to be finding it difficult to do, since their Asian customers are dollar pegged and the Yuan is not convertible. Iran may be able to force China to convert dollar assets to Euros to buy their oil, but all it does is create an additional transaction cost and eat into their profits (albeit in a tiny way).
The dollar seems set to wane somewhat, but predictions of a crash may prove premature. In any case the link to Iran and oil pricing is nonexistent. The link to starting wars is hysterical.
My claim is that this is one part of the underpinning of dollar hegemony, another very important part being that all IMF and World Bank loans are denominated in dollars and must be repaid in dollars
My argument certainly is not circular, and I don't think I make any unsubstantiated assumptions.I try to explain, without going into too much detail and dotting every i and crossing every t, why central banks keep currency reserves and why they choose to keep these reserves in a particular currency.
This Bank of England report, lists the main reasons that central banks should keep reserves. They are, in the order described in the report:
- 'tool of exchange rate or monetary policy'. The report says that countries may wish to 'intervene' to 'affect the rate at which their currency trades'. Clearly, if you are intervening using foreign currency to affect your currency's rate, this means you are buying your own currency with foreign currency, ie. you are supporting it.
- 'for servicing foreign currency liabilities and debt obligations'. They list a number of reasons why it is not good practice to try and buy this foreign currency as and when you need it. According to the Bank of England, if you have foreign currency debts to service, you should save some money in that foreign currency. This is one reason why Russia has substantial euro reserves - most of their foreign debts are denominated in euros.
- 'source of funds to pay for government expenditure overseas'. Clearly, if your imports are dollar-denominated, and you are keeping reserves for this purpose, you will keep dollar reserves.
- 'defence against emergencies or disaster'. As above, this is just another reason for keeping dollar reserves, since you will be paying in dollars.
- 'reserves may be held as an investment fund'. This final reason, is described by the Bank of England as 'not be a sensible reason for holding reserves for the majority of countries'.
You say that 'oil is only priced in dollars, not valued in dollars' and I am not entirely sure what you mean. However, oil is not 'only priced in dollars', the actual trade is also nearly always in dollars (see, for example this Guardian article). Also, as this article which I posted above shows, Iran's oil is (or was until very recently) still exchanged for dollars.
This is not the only reason. In the 1970s, the US reached a secret agreement with Saudi Arabia that all of its oil would be sold for dollars only. See David E. Spiro, The Hidden Hand of American Hegemony: Petrodollar Recycling and International Markets, Cornell University Press, 1999.
The graph in this earlier article of mine, suggests that there is a link between the choice of currency for the oil trade and the value of the dollar. The fact that this latest period of dollar weakness coincides completely with Iran changing their oil contracts and, apparently, preparing for at least some euro trade, is again consistent with my case.Nuclear Power Revival Could Encounter Hurdles
Alan
Doh again! This year, not last year. March to be exact. I didn't even have a blog last year. My brain is not working this morning.
Anyway, here is the link:
Improving the Prospects for Grain Ethanol
See the last section: Coal-Based Ethanol
Do a Google search on "midwest drought" and then plug that info into future corn bumper crops needed to fuel all the current, under-construction and planned corn ethanol plants.
I don't think I'd want my money invested in a midwest corn ethanol plant right now. If the droughts continue -------
I am still working on a problem from yesterday's drumbeat.
That is why does the HL calculated URR and Reserves - Production URR appear to be so different.
Lets start with the assumption that the 1982 URR number of 165GB is valid (RR said so and I have no reason to doubt him).
I then went to the EIA numbers to get actual production data for SA. I added up all the production since 1982 and came up with 62GB.
So if SA had no reserve growth or new discoveries since 1982 their URR is 165GB and remaining is 103GB.
But Westtexas has said that SA URR is around 180GB and remaining is about 74GB (from Kehbab's HL work).
Why does the HL numbers show more reserves and less recoverable oil than the production numbers?
Any help?
It has actually gotten more complex today. See my post above where I compared U.S. reserves then and now, and showed the production in between. Something doesn't add up here.
My apologies for not reading the DrumBeat through before posting.