The Oil Drum | Another problem for Yukos

Another problem for Yukos

Posted by Heading Out on March 10, 2006 - 1:12am
Topic: Miscellaneous
Tags: oil production, russia, yukos [list all tags]

Yukos appears to have more problems. A theme perhaps?

44 comments on Another problem for Yukos

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sendoilplease on March 10, 2006 - 1:21am

A theme of mutiny? Or of corrupt managment? Many themes along many seams on Humpty Dumpty ...

Last Updated: Thursday, 9 March 2006, 16:09 GMT

Nigeria Militants Fight Military

Militant attacks have led to a 20% drop in Nigeria's oil exports

The Nigerian military says it has fought a fierce gun battle with heavily armed militants in the Niger Delta. Thirty speed boats each carrying 15 militants attacked a petrol tanker demanding fuel, an army source says.

The group, which is demanding a greater share of the region's oil wealth, says the military initiated the attack.

http://news.bbc.co.uk/2/hi/africa/4789274.stm

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sendoilplease on March 10, 2006 - 1:27am

Reading about those massive energy companies, the Peak Production situation, the Manic Mis-allocation inthe Mania Markets... Enronitus is maybe a common disease.

Maybe The Four Horses and the Quiet Riders can mix us up some new BirdzFlu or something could eleviate some Pressure for Yukos Management and Energy Producers and Research Efforts and in ... just about all areas of the Global Economy... It may not seem the most "humane" solution but, "WTF," says Mother Nature.

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sendoilplease on March 10, 2006 - 2:19am

Econo-Creationism Theme?
creationistssaywhat??? (economists say "wha ? wha now?? no, put the curtain back!!")

There does seem to be a theme of incompetence and bewilderment/confusion. From the level of the Individual companies to the International Level.

CHAOS calling ???
----------------------
(starts with confounded fed at the top and on too multinationals all across the globe maybe ???....)

THE FED
China's dollar buys bring inflation risk
Rates may have to go higher to offset impact: Geithner

"...Fed officials continue to be puzzled by the current market environment of low world interest rates, low risk premiums and large global imbalances, Geithner said. This economic picture was labeled a
"conundrum" by former Fed chief Alan Greenspan. "

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B3D9BBCF2%2D3641%2D4A9B%2DB0EB%2DD201FE5A565 6%7D&siteid=yhoo&dist

Chaos at Yukos and Ignorant Nut-Cases heading US-based Multinationals.... (the comedy ... it never ends does it Mother)

Exxon: U.S. must tap energy sources CEO says goal of energy independence is unrealistic

"Long-term, our view on prices is they aren't sustainable, (and must come down)" he said, though new capacity will take some time to come to market."

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B70C5505A%2D9290%2D429A%2D901C%2DD1399EF1680 7%7D&siteid=yhoo&dist

(and the Chaos and Incompetence continues It's thread all the way into the Jungle Crevices and Desert Crevices of the world.

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sendoilplease on March 10, 2006 - 2:26am

"Homo sapian is NOT!" says The Mother,"Nuthin' but another Blind 'same-thinkin'-OneMindless Herd-mass Thingy that needs a little trimmin' an' Cullin' maybe...yes maybee...hmmmmmmzzzzsssss"

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Gets IT on March 10, 2006 - 4:14am

OT - Refinery Turnaround - should be back online about now

Sunoco Announces Planned Maintenance Schedule At Philadelphia Refinery

http://www.stainless-steel-world.net/projects/notw.asp

SunocoPHILADELPHIA, February 15, 2006 - Sunoco, Inc. announced today that it will be starting planned maintenance next week that was originally scheduled for third quarter 2006, on its largest crude unit at the Philadelphia refinery.

On or about February 19, 2006, the 200 thousand barrels-per-day crude unit at the refinery will undergo an approximately 20-day turnaround. Some other refinery process units are also planned to undergo routine maintenance during this same time period. This will result in a reduction of four to five million barrels of production during the first quarter 2006.

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writerman on March 10, 2006 - 6:23am

Right, fellow Todders, here's a "light" subject for a debate/thoughts over the weekend. I believe it's got a great deal of relevance for Peak Oil, and lot of other things in our society, going forward. Is the "Market Sovereign?" and if it is, how does this effect our abilitiy to deal with Peak Oil? I expect your answers to be on my desk by Monday!

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writerman on March 10, 2006 - 8:57am

Sorry that should of course have read "affect". It's what happens when one has so many languages sloshing around one's head at the same time!

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Don Sailorman on March 10, 2006 - 10:36am

The market is a constitutional monarch.

In this regard, I recommend two books by Adam Smith,
"Theory of Moral Sentiment" and its sequel,
"Wealth of Nations."

Locke also had some good observations in his two treatises on government.

For fundamental questions, go to original sources whenever possible.

With appropriate political constraints, the market is a powerful engine of liberation, opportunity, and it encourages individual freedom and personal fulfillment. On the other hand, in a failed state such as Russia, the market descends into gangsterism. Thus the "government vs. market" argument is to a large extent based on the fallacy of the false dichotomy.

All successful economies are mixtures of market and "command" or government decision making, usually with a goodly dollop of tradition thrown in. There are many variations on the the theme of the mixed economy that can work well.

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LevinK on March 10, 2006 - 10:42am

It depends.

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mikey on March 10, 2006 - 7:43am

I don't know from market sovereignity, but here's a thought that crossed my mind yesterday. The price of gas in my neighborhood is about $2.50/gallon, which may be a bit higher than average in the U.S. but let's call it average. Now, I don't really think that's particularly high. Suppose it was 150% higher: $3.75/gallon. How disastrous would that be?

Doesn't seem so bad to me. Say the typical commute is 1 gallon each way. So that's less than $8/day. People pay more than that for their fast-food meals. My experience is people are rolling in dough, buying all kinds of things they don't need, like cable TV, just to pick one. So even a "big" increase to $3.75 still seems pretty affordable. And it would be less than the price in Europe, where people didn't d-d-d-d-die off because of high gas prices.

Now, what would the price of oil have to be to raise the cost of gas by 150%? Well, according to some info I got here, just under half of the cost of gas is due to oil itself. (The rest is refining, taxes, etc.). Round up and call it half. So oil would have to double to get gas up to $3.75. Oil would have to hit $120/barrel. We have a long way to go to get there, and even then it wouldn't be so bad. It would just be bad for people who commute 2 hours each way in their hummer, but really, who cares about them? I'm sure they're nice people and all, but they should reconsider their lifestyle anyway.

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sendoilplease on March 10, 2006 - 7:58am

People are NOT rolling in dough, they are rolling in credit cards and home equity take-outs.

I love watching people try to cobble together some rationalization for why they can continue to live in the Delusion... it's incredible the lengths and depths of ignorance out there... as if their stupid commute is the only consideration - no awareness whatsoever of the cracks and crevices of daily life that are Filled to the brim with Fossil Fuels... ah, yeah-nevermindszz.....

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zero CO2 on March 10, 2006 - 9:29am

Good point!

Swedish daily gas use is slightly lower, but I have not seen figures that it declines.
We pay $6.45 a gallon.
Where I live roughly half of the residents commute over 10 miles up to 40 for some, the rest bike or walk about 2 miles to town center.
Everyone complains but keeps buying the big cars.

Maybe something is starting to happen, 10%+ of new cars are labeled greens. Meaning Petroleum and Ethanol or Petroleum and Biogas/CNG or Petrol/electric hybrids.
We have ethanol on most bigger gasstations.
Biogas or CNG in most towns.
Just seen a few priuses yet.

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oil on March 10, 2006 - 1:04pm

Major City NorthEast Brazil
$4.73 Per Gallon of Natural Gas(using an exchange rate of 2.1 Reals to 1 dollar, & a price of 2.66 Real´s per liter.

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LevinK on March 10, 2006 - 10:48am

Yeap, no need to rediscover the wheel here.

Even at $20/gallon people will drive - a lot less probably, but do we have another option to go to work, shopping or wherever?

What can ruin our economy and cause Kunstler-type scenarious are blackouts.

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Cherenkov on March 10, 2006 - 12:57pm

Twenty dollars a gallon and people will drive?

ARE YOU INSANE?

Twenty dollars a gallon and a huge number of people will not have a job to drive to, no food on the shelves to drive to.

What the hell is it with this nutso American belief in the fuel fairy.

Twenty dollars a gallon will not happen. First, domestic demand destruction. Second, capillary action. (I.E. the small stream users in the third world will be forced to quit using the little fossil fuel they do use and starve.) Third, military adventurism. For awhile we will make the "bad terrorists" give us our due, our tribute.

Once the world gets fed up with our imperialism, they will either spank us militarily, or they will destroy the oil fields. The price will then spike way past twenty dollars. If it ever gets to twenty dollars without any of this happening, it will be a result of monetarization of the debt and runaway inflation.

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LevinK on March 10, 2006 - 2:18pm

Yeah, trust me they will drive.

In my home country price of gas is $4/gallon while average income is about 10 times lower than US. And what do you think - $40 a gallon stops people from driving? Not only it doesn't but 70% of the families have a car. For me to complain about $3/gallon as being expensive relative to $2.50 is funny at the least.

Of course people drive much less than here (~10 times less oil usage per capita) but for this helps the structure of the cities - dense residentials with good mass transit. In US this is largely absent, and I don't see how people will cut off that much. Yes, there is a lot of "fat" demand, but after some point you can not cut off from going to work or to the groceries to buy food.

I agree that under normal conditions gas would not go to $20 - oil will have to be some $600/barrel to justify it. But in case shortages or a dollar collapse occur, it is not out of question.

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Cherenkov on March 10, 2006 - 4:19pm

To LevinK,

So, in your country the "price of gas is $4/gallon while average income is about 10 times lower than US." Let's see. That means that since our average income is around 30K, your average income is 3000. That is 250$ per month. I drive a Prius, have a one block commute, and my average month usage of gasoline comes to about 12 gallons a month. At 4 dollars a gallon, that would come to 48 dollars per month or one fifth your average income. I assume you guys eat, live in houses, that is pay mortgages or rent, buy clothes, do some entertaining, wash clothes, pay taxes, buy insurance, you know, the basics.

So that means either I call BS on your post, or you guys are living and working in your cars.

The they you must be referring to are the elites. Guess what? They are not the driving force in the American economy. The mortgaged to the hilt, credit card maxed, consumer zombies are what drive this hallucinated economy and when daddy can't pay the bills, he is screwed. The bankruptcy laws were gutted last year, and he has no recourse. Daddy tries to sell the house, or it is repossessed. Suddenly, a crashed-economy induced firesale of foreclosed properties floods the market, the housing boom goes POP!

No home. No job. No car. Crappy mass transit. No health care. Global warming. A government that gives money to the rich with one hand and takes it from the poor with the other. Cats sleeping with dogs. Were talking real wrath of God stuff here. (cribbed from Ghostbusters)

The problem here is the myopia from which everyone seems to be suffering. It is the same myopia that allows techies to think that global warming will not interfere with THEIR plans, that they can escape the laws of physics, that they are somehow immune from the laws of thermodynamics. It is myopia that causes economists to mumble their free market chants and say, "let the free hand do its work..."

Think globally, act locally. That is not just a bumper sticker slogan. It has real world implications.

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LevinK on March 10, 2006 - 5:04pm

Yes, for Bulgaria $250/month is almost correct and even a bit higher than the actual average. If you make an effort to look outside US and the developed countries, you will find out that 3/4 of the people on this planet live on such money or less. Don't ask how, - you will not understand it, even if I went into details.

And like I said people drive a lot less than here, so the 48$ figure is also an overestimate. The country consumes oil mostly for transporting goods, for mass transit etc., things that are not very elastic per se. But in general, for the average bulgarian energy is very expensive and takes some 15-20% of the family budget, right after food which is around 40%, and close to housing expenses. It is simple - you are receiving a 3rd world sallary, but the prices you pay for energy are the international prices.

Personally I think that the biggest problem of the US society is the lack of problems :) This country has never experienced a major cataclysm and except during several short-lived recessions, the majority of people never touched to poverty. In such environment it is very easy to get detached and to forget that there were generations of hard-working people before you that built those things, that make you warm and fed. Here we often take them for granted, but they are not, and there is always someone working day and night to keep the lights on. That's why I think one should travel a little bit and try to mix with the other peoples problems in order to get a better grip of reality.

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BalticMan on March 12, 2006 - 4:17pm

A bit late in the thread for a contribution, I suppose, but here goes anyway...

I imagine the Department of Statistics geeks over at www.std.lt could supply any details you might want, but generally speaking, I have to second LevinK here. The things that Cherenkov mentions:

I assume you guys eat, live in houses, that is pay mortgages or rent, buy clothes, do some entertaining, wash clothes, pay taxes, buy insurance, you know, the basics.

usually cost considerably less in Lithuania than they do in North America. Not surprising, when the typical monthly wage might be $350-400 (and that's being generous).

To be specific: 1) it is more typical to live in a flat than in a detached house, and that flat is quite likely to be in the range of 50-100 square meters; 2) mortgages came into common usage only within the last 4-5 years; 3) buying second-hand clothes is quite common -- an art form, once you get outside the larger cities; 4) insurance of various forms remains relatively rare -- it is common, for example, not to insure one's residence; and so on.

LevinK's posting on life in Bulgaria rings true to how many non-North Americans get by.

By the way -- haven't posted in a long while due to the kids being home so much lately -- darn Lithuanian winter. Wished I lived in a nice warmer country. Bulgaria sounds pretty good, right about now...

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sendoilplease on March 10, 2006 - 2:42pm

"What the hell is it with this nutso American belief in the fuel fairy. "

Thank you - nutso First Worlder's in general I think.
People do not understand how crippling this is going to be economically.

"Twenty dollars a gallon will not happen."

I disagree with this - I bet $20/ gallon is one point on the curve in the not-to-distant future .

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Biologyfool on March 10, 2006 - 1:27pm

You forgot to factor in all the cost of all the oil that you use indirectly (production and transportation of all that stuff you buy everyday). It will be a lot more than $8/day. I'm fairly certain that $120/barrel oil will cripple the economy. But then again, I don't think it's really sustainable at that level, so I doubt it really matters. The elasticity of gas may be close to 1 between $40-70, but I doubt that's true between $70-120. I guess I'm about to find out sooner or later.

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mikey on March 10, 2006 - 2:23pm

I guess I also forgot that as the price of oil goes up, it accounts for a higher share of the cost of a gallon of gas. So that 46% figure from the 2003 report I cited is probably too low in 2006. So, yeah, I guess it will be worse than I was thinking. People who set up their lives to not require much driving (or jetting, or, umm... home heating) should be a-okay, though.

Though the housing bust may hit harder and faster, first.

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LevinK on March 10, 2006 - 2:29pm

The elasticy of oil or gasoline depends a lot in which country you live in or in which industry you use it.

Here in US, $70-80 or even $100, will not be enough to affect personal consumption significantly, but will cause a lot of trouble for airlines and farmers for example.

For the developing countries $70-80 is already too much. IMO, best situated is Western Europe where they benefit from the long history of higher energy prices, their proximity with Russia and their appreciating currency. The only problem is that most of their governments are so incompetent, that they can easily sleep through their chances.

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sendoilplease on March 10, 2006 - 2:52pm

"Here in US, $70-80 or even $100, will not be enough to affect personal consumption significantly"

WHAT ?!?!?! Are you assuming the cost of all oil products downline besides Gasoline alse increase (or is the gasoline market in a vacuum in this scenario?)?

Significantly higher gas prices would have huge effects on the Current Unstable US economy (the one Greenspan is perplexed about even.) What cost pharmacuticals, produce at market, shipping anything consumers need, heating and cooling homes, electircity, plastics etc etc...

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LevinK on March 10, 2006 - 3:07pm

Sorry, I meant $70-100 per barrel of oil ($3-3.50 gas).

Yes I'm firm it will barely affect the average driver, but will be a problem for some industries. If they start bankrupting though they can trigger the economy going in a stagflation circle and this is more of a threat.

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sendoilplease on March 10, 2006 - 3:18pm

I think your second point is the main one in terms of the ability to afford to keep driving - the high cost of oil could cripple the economy as a whole so drastically erduce driving habits of Americans.

But even before that - I think once the price is consistently over $3 per gallon there will at least be fewer joy-riding Teens-On-Wheels. I think you are correct that most adults would continue to commute but they
might start making some adjustments - like Car pooling etc.

America is not Europe - the Gas Price structure we are used to is very different and the Tipping Point for less consumption may be very different.

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sendoilplease on March 10, 2006 - 3:24pm

In terms of difference between Gas Prices in the USA and Europe - it might be interesting to see how much of the consumer's budget in each eco-zone is spent on personal transportation. And the Average Distance of drives.. I don't know, many different variables that could make a big difference in how Americans behave compared to Euros when Gas climbs over $3/gal.

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TechGuy on March 10, 2006 - 6:47pm

>Now, I don't really think that's particularly high. Suppose it was 150% higher: $3.75/gallon. How disastrous would that be?

It would stimulate inflation. Higher energy costs generally devalue currencies because businesses adjust to the higher costs by simply raising prices. This is great for people in debt but stinks for anyone trying to save money for retirement or those who are already retired.

As I stated before, the answer isn't raising energy costs its raising the cost of capital. If you make credit cheap and easy enough (low interest rates) energy prices are virtually irrevelant. For instance if I can borrow capital next to nothing, I can just finance my higher fuel costs and because of inflation, my salary will rise so that I wouldn't have to sacifice anything. Cheap and lose credit allows consumers to finance bigger, less energy efficient, homes and cars. Cheap and easy credit also allows business startups with wacky ideas to get financing (dot-com bubbles). Make capital expensive (high interest rates) and consumers and business become more efficient.

Finally, higher energy costs imposed on US consumers and businesses does not affect consumption overseas. India and China would continue to expand their economies regardless of US energy taxes. If the US did reduce energy consumption, global oil prices would fall permitting India and China to simply consume more oil. The net effect is that any conservation by the US would have zero impact in global consumption. Oil will deplete just as fast no matter how much US consumers conserve. Its very possible that any conservation effort by the US would speed up depletion as India and China expand their economies even faster resulting in an increased demand for oil and gas as their economies become more dependant on energy.

>It would just be bad for people who commute 2 hours each way in their hummer, but really, who cares about them? I'm sure they're nice people and all, but they should reconsider their lifestyle anyway.

The majority of people driving Hummers can continue to keep on driving even if the price of gasoline exceeds $5 Gallon. Higher prices won't change their lifestyles. High Energy prices affect low income households, not the wealthy.

>Oil would have to hit $120/barrel. We have a long way to go to get there, and even then it wouldn't be so bad.

Utimately higher energy costs will force some businesses out of business, resulting in higher unemployment. Most of the jobs that are dependant on low cost energy, (Airlines, Factories, Trucking) employ low wage earns who already maintain low energy lifestyles, since they are unable to afford Hummers or overseas vacations. The consumers that are driving Hummers and have high energy lifestyles are working for business that aren't dependant on energy. They will continue to keep on driving gas guzzlers and take overseas vacations.

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Halfin on March 10, 2006 - 7:12pm

Higher energy prices don't necessarily cause inflation. It depends on the response of the monetary authorities.

Inflation is an increase in the money supply relative to the amount of goods and services. Changing energy prices does not directly change the money supply.

If the money supply does not grow, higher energy prices will not cause inflation. Instead, some prices will get higher and some will get lower.

How could some prices be forced to be lower if energy costs rise? What happens is that people are spending more money on energy so they have less to spend on other things. Goods and services that are relatively energy-independent will be forced to lower their prices as demand drops because people have less to spend.

The result is that goods that take more-than-average amounts of energy will have their costs rise, while goods that use less-than-average amounts of energy will have their costs fall. The overall price level can remain the same.

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Don Sailorman on March 11, 2006 - 10:10am

"The overall price level can remain the same."

Of course it can. Sufficiently restrictive monetary policy can always stifle inflation. But the short run cost might be an increase in unemployment up to the 12% to 20% level from current levels around 5%.

Given the reality of politics, given the fact that Congress created the Fed and can destroy it or take away its powers, how likely do you think it is that the Fed will choose price-level stability (even loosely defined) over an easing of monetary policy to keep a bad recession from getting worse????????

We live in a real world where politics rules. The truisms of undergraduate economics textbooks are not of much help in guessing what will actually happen whe TSHTF.

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writerman on March 11, 2006 - 1:26pm

Dear Don, I've come increasingly to feel that I prefer honest cynics to delusional fools. I mean one can have a discussion with a cynic - but with fools it's a touch more difficult. I'm starting to worry that there are a lot of people around who actually seem to believe the lies they tell the rest of us.

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writerman on March 11, 2006 - 1:30pm

This sounds very arrogant - sorry for that. I was using the term "fool" in a broad sense. So for all the fools who may read the above, not that there are any on TOD, I appologise.

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Don Sailorman on March 11, 2006 - 3:11pm

In thirty-one years of teaching, many students asked me thousands of good questions. The best question ever asked, right at the end of a sociology class, was from a Vietnam Vet. He asked me:

"What are the limits to human self-deception?"

I replied that I did not know but would do some research on the topic and answer at the beginning of next class. All night long I dug (This was before the Internet.) and checked my notes from social psychology classes and history classes. At the beginning of the class I said and still believe:

There are no limits to human self-deception.

We tend to believe what we want to believe. Wishful thinking rules most of us most of the time.

The only possible answer to this pernicious tendency is critical thinking, Socratic inquiry, rigorous education. And, alas, our educational system is broken.

Socrates, Plato, Aristotle, all those Old Very Bright Greeks (OVBGs) knew that one of the weakest links in any system to get good political leadership and a decent society is education.

Much of what my best colleagues and I did at the college level was damage control, trying to repair the damage done from middle-school through high school.

I think I have some idea as to what the pump engineers felt like an hour after the Titanic hit the berg: When the damage is too bad, you can only pump so fast, and when the numbers go bad beyond a certain point, you should abandon the pumps and save yourselves.

BTW, guess which category on the Titanic had the very lowest survival rate? Good Trivial Pursuit question.

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Johnny on March 11, 2006 - 6:25pm

My guess: The rich older male elites. Woemen and children were first in the lifeboats, along with young men to handle the lifeboats.

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Don Sailorman on March 11, 2006 - 6:45pm

Interesting. Also 100% wrong. Not difficult to find the correct answer, which I think sheds some light on our current situation.

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Liz on March 12, 2006 - 5:29am

Steerage.

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wkwillis on March 12, 2006 - 7:27am

The steerage passengers were literally locked into the steerage areas to make sure that the upper class passengers got access to the lifeboats.
Not all of the lifeboats were full.

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mikey on March 12, 2006 - 8:43am

Trivia questions just aren't the same when you can google search "titanic lowest survival rate":

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Don Sailorman on March 12, 2006 - 7:32pm

Among the crew, I believe the "black gang" of stokers and wipers and engineers had the lowest survival rate. It was very low indeed. The officers did quite well for themselves.

I find it fascinating that the second-class men were more self-sacrificing than either the male passengers of the first or third classes. Middle-class morality! Truly, it is data such as this that warm the cockles of an old sociologist's heart.

As a sailor, I have to wonder:
1. Why did the captain agree to command a ship with inadequate life boats? Anyone who has spent years at sea has respect for the North Atlantic, and I find it hard to believe that experienced officers or crew believed the BS about "unsinkability."
2. Why did the captain seriously damage brand new engines by running them flat out? Had I been Chief Engineer on the Titanic I would have led a mutiny to save my beloved engines.

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sendoilplease on March 12, 2006 - 8:25pm

Wow... I am almost speechless (yeah, right).

Honestly Mikey - if a pic is 1000 words a graph like that is infinity.

HOMO SAP UNDERSTRESS proves his mettle all right... so much for constitutions, morals, ethics and laws when life and limb are at stake.

Or EVEN if only the AWOL is at stake (at least as long as the hard part only happens "OVER THERE" and our ONLY DAILY CONCERNS in this Big FIRST WORLD is our GAS MILIAGE... and commute... "Might I TOO be inconvenienced SOME DAY hmmm?"

Thank your godz for onezes like you Mikey... (hey, did you really like it or did you just act like it 'cuz your Mom said to - that the "nice men" will give you money to pretend to like their cereal... or did that come from aother timezUP and place ... LMAO what a Charade YOUSE are!)

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mikey on March 10, 2006 - 8:07pm

The part about hummers was sort of a throw-away -- I don't really consider hummers a factor since they are rare. SUV's are a factor, however, and so are long commutes.

I assume that a large fraction of total gas consumption in the U.S. is due to long commutes and fuel-inefficient vehicles. I don't think either are especially associated with low-income people.

When the time comes to use less gas, the obvious way to achieve that is for people to give up long commutes and fuel-inefficient vehicles. I guess some poor people will get hurt along the way. There's always going to be some excuse for why we can't cut back, can't be done, already locked in, will be regressive, etc. etc.

But like the saying goes, excuses are like tailpipes. Everyone has one, and they all stink.

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sendoilplease on March 10, 2006 - 7:51am

OT From Yukos but big potential impact on Oil Industry (especially here at home - recall water necessity for pressurizing wells versus water for agricultural demands...):

Hurricanes and Dust Bowls ??? (oh goodie...)

Accu-Weather meteorologists are asking Is America facing yet another dust bowl? Meteorologists have warned oceanic conditions similar to those that triggered the ruinous "Dust Bowl" drought again appear to be in place. Conditions similar to those that led to 1930s drought...

...Prepare for Hurricanes...The US hurricane center chief says Prepare now for coming storms... is warning coastal residents to prepare right now for the hurricane season that begins June 1...

http://www.safehaven.com/article-4732.htm
------------------------

Satellite data used to warn oil industry of potentially dangerous eddy

1 March 2006

Ocean FOCUS began issuing forecasts on 16 February 2006 - just in time to warn oil production operators of a new warm eddy that has formed in the oil and gas-producing region of the Gulf of Mexico...

The Loop Current and eddies shedding from it pose two types of problems for underwater production systems: direct force and induced vibrations, which create more stress than direct force and results in higher levels of fatigue and structural failure...The impact of these eddies can be very costly in terms of downtime in production and exploration and damage to sub sea components.

http://www.esa.int/esaEO/SEMKURMVGJE_economy_0.html

(from life after the oil crash site in links)

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Leanan on March 10, 2006 - 11:03am

Whiskey and Gunpowder has posted Part II of "Peak Oil and Deep Oil," their discussion of abiotic oil.

The rumors of Russian "superwells" of endlessly renewing abiotic oil appear to be greatly exaggerated:

All of the increase in Russian oil production appears to be from known and conventional, if not mundane, geological sources. That is, there are no known deep Russian "super wells" producing "abiotic" oil or gas from the base of the Earth's crust or from the top of its mantle.
And looking forward, through a process called "Hubbert linearization," which I have discussed in other Whiskey articles, it is apparent that Russia is about to enter its own version of Peak Oil. That is, based upon the production trends from its oil fields, Russian oil production is on the verge of a significant, irreversible decline. Some analysts are predicting a rather precipitate collapse in Russian oil production over the next 10 years.

Sounds like Westexas... :)

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GreyZone on March 10, 2006 - 12:33pm

Whiskey and Gunpowder must read TOD. ;)

Yes, it sounds like Westexas being quoted there but even Russia itself has repeatedly warned that they are near peak regardless and expect to begin to decline no later than 2010. The difference is that most analysts and Russia itself expects a long slow decline whereas Westexas is predicting a fast catastrophic decline based on HL assessment of the data.

I'm on the fence here precisely because HL assessments have made even the petroleum community look foolish multiple times in the past, yet I appreciate that communism may not have done the best job in really exploring that vast nation. However, if Russian production declines hard and fast over the next 5 years, I think that would make it even harder to argue against other HL assessments that have gloomy outlooks.

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