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DrumBeat: June 15, 2006

Posted by threadbot on June 15, 2006 - 9:35am
Topic: Miscellaneous

Update [2006-6-15 9:50:2 by Leanan]: The Atlanta Constitution-Journal points out: Sweet or sour? In oil, that's a big deal.

While the BBC has an article about Colorado:
The US Energy department thinks that the state is sitting on about a trillion barrels worth of oil, as much as the rest of the world's conventional oil reserves added together.

Trouble is, it's not quite ready to be extracted yet.

...If it was allowed to sit tight, a few more million years of heat and pressure would transform it into liquid pools ready to be drilled.

And RigZone has this article about the political ramifications of peak oil: Global Energy Crisis Cooks to Surface:

The growing scarcity of oil and natural gas has provoked worldwide political conflict and a mad rush for renewable resources.

Like a volcano before it erupts, the crisis has heated up for decades, out of sight of oil-heated homes and petrol-powered cars.

But the signs of trouble are now evident, and not only at the pump, where $70-a-barrel prices eat into the pocketbook.

Update [2006-6-15 10:25:24 by Leanan]: The American Chemical Society is excited about new developments in cellulosic ethanol. Genetically engineered organisms are being used to break down the cellulose.

There there's always conservation: Father of energy efficiency to get Fermi Award. Interesting article because it suggests we aren't likely to make the same kind of gains we made during the last energy crisis. The lowest fruit is already plucked:

[In the 1970s] new refrigerators, which had consumed 400 kilowatt-hours a year on average in 1959, were consuming 800 kilowatt-hours a year. To gain extra storage space, manufacturers removed insulation and gunned the refrigeration motor.
Update [2006-6-15 11:15:37 by Leanan]: On the political front: Former NYC mayer and possible presidential candidate Rudy Giuliania is criticizing fellow Republicans for not having an energy policy. His plan involves hybrid cars and easier permits for nuclear power plants, oil refineries, and gas terminals.

Meanwhile, Danny Williams, the "Chavez of Canada," is more popular than ever for standing up to big oil.

And World Energy Source is offering free video through its World Energy TV page.

Since 2001, WETV has been the leading source for an inside view of the energy industry. Frank exchanges between authorities such as Qatar's ministry of energy & industry, HE Abdulla bin Hamad Al-Attiya, Thomas E. Capps of Dominion and Simmons & Co., International's Matt Simmons have addressed a wide variety of hot topics--America's need for meaningful energy policy, the quest to balance economic and environmental interests, Americans' declining trust in high-ranking corporate executives, and other issues.
Free registration is required.

145 comments on DrumBeat: June 15, 2006

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raulcrk on June 15, 2006 - 9:40am Permalink | Subthread | Comments top

www.tradearabia.com/tanews/newsdetails_snOGN_article106704_cnt.html

Is Arabia in decline?

This article reforce the Simmons Theory.

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westexas on June 15, 2006 - 5:09pm Permalink | Subthread | Parent | Comments top
Speaking of Simmons, the author of the following article thinks that Peak Oil is a global conspiracy, with Simmons as one of the ringleaders:

http://www.financialsense.com/fsu/editorials/kirby/2006/0614.html

Which I guess implies that the Peak Oilers on this blog are part of the conspiracy too.

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wstephens on June 15, 2006 - 5:33pm Permalink | Subthread | Parent | Comments top
Those financialsense guys mean well, and the Puplava guy conducts great interviews (he asks questions and then stays quiet), but they are gold-buggers and allow too much of this type of junk to litter their site.
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BrianT on June 15, 2006 - 6:11pm Permalink | Subthread | Parent | Comments top
I don't buy the theory, but I give Kirby top marks for original thinking. I was not aware that basically all of the world's oil reserves are north of the equator. It does seem like an important fact that is rarely mentioned, if at all.
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DelusionaL on June 15, 2006 - 11:57pm Permalink | Subthread | Parent | Comments top
I thought that they find gold, diamonds, and other valuable things underground in the southern hemiphere.  They also found trillions of barrels of "unfinished oil" here in the US.  Brazil has alot of thier own "in house" oil production to help with thier energy independance.

There are probably many people trying to keep the dollar in one piece.  
Does history have examples of "huge treasures" be it nat rescources, gold, silver, or oil with it never being leaked?  
I'll bet on greed here twice.  
Would Oil co's be exploring, finding and developing oil in warm countries that have a weak military vrs the artic cold?  ROI?  Seems too obvious...IMO, These poor southern countries wouldn't like some cash?  I think it is unlikely that there are huge reserves of oil waiting to be found
Who said "Look at what oil companies do not what they say" wasn't it Deffes?  
Pumping up gold - Just what do these guys own or have $ invested in?
On the otherhand I have some pre WWll German marks (paper)
from my wifes grandmother.  They changed in value so quickly that they didn't bother to reprint.  They would just use a rubber stamp of all things to "double" the value(seriously).  Looks absurd with a "rubber stamp" on it.

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smekhovo on June 16, 2006 - 12:37am Permalink | Subthread | Parent | Comments top
There's just much less land, and also fewer large rivers, low-lying plains etc. south of the equator, which would seem to explain it.
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SHiFTY on June 16, 2006 - 7:26am Permalink | Subthread | Parent | Comments top
There are many explanations for this, mostly down to location and population. For instance it is no accident that the US, Russia and Europe have developed oilfields in close proximity- that is where the major demand is. Plus the presence of stable government is a clearly a critical factor for development of any kind.  

Although there are rumours there is a North Sea size field in the Great South Basin (google for it) to the southeast of New Zealand, which has never been developed due to lack of capital and distance to markets.

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BrianT on June 16, 2006 - 8:47am Permalink | Subthread | Parent | Comments top
You guys are correct- it just seems like an interesting fact I had never heard before.  
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Donal on June 16, 2006 - 9:45am Permalink | Subthread | Parent | Comments top
Much of the land in the southern hemisphere is Antarctica.  To have "biotic" oil, Antarctica would have had to experience millions of years of sustained vegetative growth, right?
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smekhovo on June 16, 2006 - 11:20am Permalink | Subthread | Parent | Comments top
Well, it did ... but is geologically unpromising in other ways, as far as I know.
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AlanfromBigEasy on June 16, 2006 - 1:09pm Permalink | Subthread | Parent | Comments top
There have been coal seams discovered in Antartica.  Several times in geological history Antartica has had abindant plant & animal life, but not for a majority of the time.

Perhaps there is oil in Antartica, but the repeated addition and removal of ice sheets should surely stress the geology of Antartica and I would not be surpriced if most of the oil did not escape after repeated "flexing" of the cap rock and associated fractures.

Antartica is a small continent.  Slightly smaller than Australia from memory.  So I have little hope for more than a trickle of oil from there by 2150.

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plucky underdog on June 17, 2006 - 11:23am Permalink | Subthread | Parent | Comments top
Sheesh... that article is real tinfoil-helmet stuff. But then they're gold bugs, aren't they? Most of the world's land is in the North; most of the world's continental shelf; most of the world's sedimentary basins; hence most of the oil.

Look here >>> http://www.britannica.com/eb/article-50720

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Robert Rapier on June 15, 2006 - 6:54pm Permalink | Subthread | Parent | Comments top
They have asked me to write an article for them, but I am struggling a bit with what to write. I don't want to give financial advice, and I don't want to attempt to predict the markets. I have been reading their editorials trying to get an idea of what to cover.

RR

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BrianT on June 15, 2006 - 9:51pm Permalink | Subthread | Parent | Comments top
I read the site regularly. IMO, most of their readers would be unaware that corn is a poor raw material for ethanol production because of the poor EROEI. You could also cover the expense involved in CTL production. You are probably aware of this, but quite a few of their articles are not financial in nature (these are usually geopolitical).
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Robert Rapier on June 16, 2006 - 9:08am Permalink | Subthread | Parent | Comments top
I may just write a bit on ethanol. I have also been asked to write up a summary of my Brazilian ethanol critique for World Energy magazine. So, I may as well just work on these articles in parallel.

RR

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wstephens on June 15, 2006 - 9:58pm Permalink | Subthread | Parent | Comments top
I would say write about exports because it's PO, but with a "financial" twist.
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bradshaw on June 15, 2006 - 7:46pm Permalink | Subthread | Parent | Comments top
Yes and the conspiracy started with an old nut at Shell back in the 50's... Dr. Hubbert right?

These guys really need to be introduced to the concept of Occam's Razor.

So I see you found the link interesting :)  "I think it was you I posted it to right?"

-C.

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tate423 on June 16, 2006 - 10:13am Permalink | Subthread | Parent | Comments top
I read a book all about the CFR.  Scary thoughts at least, even worse if parts are true.  
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old hermit on June 15, 2006 - 5:21pm Permalink | Subthread | Parent | Comments top
Lets see if I can make that a hot link.

http://www.tradearabia.com/tanews/newsdetails_snOGN_article106704_cnt.html

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bradshaw on June 15, 2006 - 9:41am Permalink | Subthread | Comments top
Oil production base facing environment dilemma

Almost a century after becoming the site of China's first land-based oil well in 1907, northwest China's Yan'an city is facing a water crisis caused by the booming oil industry.

The city on the Loess Plateau was the base of Mao Zedong and the People's Liberation Army for 13 years, but now it battles to keep its water reserves uncontaminated by the thousands of nearby oil wells and pipelines.

A more serious problem exists in the Yan River basin, which has 26,000 wells and more than 800 kilometers of pipelines. Its water quality once dropped below class V, unsuitable even for agricultural irrigation.

Now that's a water problem.

-C.

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oilmanbob on June 15, 2006 - 10:38am Permalink | Subthread | Parent | Comments top
Somebody here probably knows, are they still using surface disposal of water, or is this problem because of improper cementing and no surface pipe?
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Smush on June 15, 2006 - 11:57am Permalink | Subthread | Parent | Comments top
it's probably because china doesn't have the same regulations we have here.  they're probably dumping some rank solutions into rivers and whatnot.  the government regulates stuff here enough so that we don't have these problems.
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AlanfromBigEasy on June 15, 2006 - 9:45am Permalink | Subthread | Comments top
Algiers, Algeria (capital of OPEC member) choses Light Rail Vehicles for their first Light Rail Line.  "Turnkey" system ready in 30 months.

Makes one wonder about several points.  Oil exporters are taking steps to reduce reliance on oil,  They can build, from contract award to in service, in just 30 months.
======
Alstom chosen to supply Algiers' first tramway
(14/06/06 17:40 CET)

A 225 million euros project

ALSTOM CHOSEN TO SUPPLY ALGIERS' FIRST TRAMWAY

The operator Entreprise du Métro d'Alger (EMA) has just announced that it has chosen an international consortium led by ALSTOM Transport to supply a turnkey system for the first tramway line of the Algerian capital. The total value of this project is 225 million euros. Options may be added.

This project is part of the Algerian Government's development programme to meet the increasing demand for public transport and reduce traffic congestion in the Algerian capital. Algiers' first tramway line, which will link the city centre to the Eastern part of the capital, will be 16.3 km long with 30 stations. It was designed to transport 150,000 passengers daily. The first train sets will enter into service 30 months after the contract takes effect.

As a supplier of global solutions, ALSTOM will provide a turnkey system comprising the rolling stock, the tracks, the power supply system, the traction electrification, the signalling system and control equipment, part of the civil works and a workshop. ALSTOM has long experience in this field with references including the Barcelona tram and the KTX high-speed train for Korea.

Since the development of the first CITADIS in 1996, ALSTOM has sold 778 CITADIS cars to more than 20 cities around the world including Paris, Strasbourg, Lyon, Madrid, Rotterdam, Dublin, Melbourne, Tenerife and Tunis.

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oilmanbob on June 15, 2006 - 9:59am Permalink | Subthread | Parent | Comments top
Most countries in the developing world don't have the same land ownership problems of the Developed World. They can accquire right of way by just declaring it and don't have to go through long compensation hearings-sort of like the US in the beginning stages of Rail Roads.
   If we would just use the ROW in the medians and shoulders of highways, or even close a few streets for rail, we could do the same. But this is heresy to gasoline marketers. and the automotive industry who wish to be the sole beneficiaries of the road subsidies.
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Leanan on June 15, 2006 - 9:57am Permalink | Subthread | Comments top
Not posting this one up top, because it's only tangentially related to peak oil/energy...

Strapped States Try New Route, Lease Toll Roads to Foreign Firms

Half a century after President Dwight D. Eisenhower persuaded the nation to build the interstate highway system, the allure of privatization is a rethinking of the relationship between the government and its roads. It reverses the view of highways as a public responsibility, ingrained since the first half of the 19th century, when states took over roads, bridges and canals that had gone bankrupt in private hands.

Sounds like the libertarian dream.  But seen in the light of peak oil...a step toward a world where only the wealthy can drive?

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oilmanbob on June 15, 2006 - 10:18am Permalink | Subthread | Parent | Comments top
If property and income taxes are cut enough then revenue must come from somewhere. Gasoline taxes have not risen in years, and at least here in Texas property taxes have been cut by increasing numbers of exemptions. This is all part of the change started under Reagan to make taxation regressive rather than progressive. They seem to forget that only rich people have much money.Our Governor wants to turn the interstates into toll roads. Oh well, at least he has good hair.
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Berkeley on June 15, 2006 - 11:11am Permalink | Subthread | Parent | Comments top
I understand that all of the massive highway development underway in China right now is done like this.  The government offers leases for toll-road monopolies to private bidders who take all the risks, and a vast highway system is appearing overnight at no public expense at all. In general this is how China does everything (the whole country is managed like concessions in a National Park).  It helps to have had a Revolution that put all land in Federal ownership!    
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Leanan on June 15, 2006 - 11:17am Permalink | Subthread | Parent | Comments top
It also helps to have a society where only a tiny minority can afford cars.
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Glenn on June 15, 2006 - 2:25pm Permalink | Subthread | Parent | Comments top
You mean like every other society in the history of mankind and almost every other country during the 20th Century except post-WWII USA?
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BrianT on June 15, 2006 - 6:14pm Permalink | Subthread | Parent | Comments top
And Canada, Germany, France, Japan, etc.etc.etc.
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bradshaw on June 15, 2006 - 10:09am Permalink | Subthread | Comments top
I've posted on the Colorado Oil before...


Energy group Royal Dutch/Shell has been conducting field research in Colorado's Rio Blanco County for 10 years.

It is drilling holes and inserting electric heaters to gradually heat the rock to a temperature of 650-700 degrees Fahrenheit over a number of years.

The resulting product is one third natural gas and two thirds light oil.

Surface processing can then turn the oil into products such as diesel, jet fuel or petrol.



Royal Dutch/Shell says it will decide on whether to start a commercial project by the end of the decade.
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Leanan on June 15, 2006 - 10:17am Permalink | Subthread | Parent | Comments top
Yes, I remember hearing about that.  Gotta wonder what the EROEI on that one is...
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bradshaw on June 15, 2006 - 10:22am Permalink | Subthread | Parent | Comments top
Still to early to tell as Shell is still pondering on whether to take it commercial.  (ponder = economically viable)

RE:Update [2006-6-15 9:50:2 by Leanan]:

I found this bit especially interesting...


"But the first signpost has been passed, he said. "Sweet crude has already peaked."

"Where is sweet crude coming from? The United States, where oil production has peaked. In the North Sea, where production has peaked. And in West Africa, which is peaking this decade.

"Only one region hasn't peaked --- and in the Middle East, most of their supply is sour."

-C.

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Robert Rapier on June 15, 2006 - 10:52am Permalink | Subthread | Parent | Comments top
Yes, I remember hearing about that.  Gotta wonder what the EROEI on that one is...

They claim 3.5 to 1. But, I am skeptical of oil shale as will be apparent with the article that I am writing.

RR

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bradshaw on June 15, 2006 - 10:55am Permalink | Subthread | Parent | Comments top
Looking forward to it sir!
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wstephens on June 16, 2006 - 8:20am Permalink | Subthread | Parent | Comments top
I know this is only a subtle shift in terminology, but wouldn't it be better to use "Liquid" ROEI rathen than EROIE.  I mean isn't this what tar sands, ethanol, etc. are all about?  Gasoline or diesel could be the "L" base liquid.  This would get around the "there's no shortage of coal and nuclear" retorts.
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Robert Rapier on June 16, 2006 - 8:47am Permalink | Subthread | Parent | Comments top
That's one of the problems with EROEI. The usage of terminology is pretty inconsistent.

RR

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MUDLOGGER on June 15, 2006 - 10:20am Permalink | Subthread | Parent | Comments top
''...If it was allowed to sit tight, a few more million years of heat and pressure would transform it into liquid pools ready to be drilled. ''

Or ''heat it up for a number of years according to Shell''.

I wonder how many years of heat?. And I suppose it would be from a nuke. Or would they burn coal to generate the electricty to heat the rod to fry the Kerogens to make the oil to warm the house that jack built.

I suggest we leave it to whatever comes after the Human race in a few million years. Typical eh? not content with screwing our children, we want to screw the next evolved life form...

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bradshaw on June 15, 2006 - 10:31am Permalink | Subthread | Parent | Comments top
From Shell's website...


Hydrocarbons have been recovered from shale containing kerogen for at least 600 years. Ute Indian legends
told of warriors who saw lightning hit certain rock formations causing the "rocks to burn." There is even a
story of a Parachute area rancher who built a rock fireplace in his new cabin. When the first flames heated
the fireplace, the chimney, primarily composed of oil shale, caught fire and burnt the entire structure to the
ground. Pioneers in the western United States fueled their campfires with shale and used its oily residue to
grease their wagon axles. Shale also was used to heat peach orchards during winters in Palisade.


In the 1850s, small amounts of shale oil were produced in the eastern United States. However, lack of
technology, prohibitive processing costs and inexpensive and then-reliable foreign crude oil supplies stalled
efforts to produce an economical and viable fuel source from oil shale. Oil shale development further diminished
when the first crude oil well was drilled in Titusville, Pennsylvania. There were few renewed attempts to
develop shale oil until World War II when the U.S. military consumed hundreds of thousands of barrels of oil.
As domestic oil supplies were used during the war, interest in developing the vast oil shale deposits in western
Colorado was revitalized.


Timeline-fast forward to 1997

1997 Shell conducts an in situ heating process experiment on Mahogany oil shale property.
Work postponed because of economic conditions.

2000 Bureau of Land Management asks for public comment on management of federal oil
shale lands.

2000-present Shell returns to Mahogany oil shale property in mid-2000 with an expanded in situ
heating technology research program.

-C.

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AlanfromBigEasy on June 15, 2006 - 10:45am Permalink | Subthread | Parent | Comments top
H'mmm

In 2042, surplus wind turbine electricity, after having filled all available pumpes storage, is used to periodically heat oil shales and extract/create oil from the massive oil shale deposits.  Late winter and spring are the primary season for thsi "load dumping" into oil shale, but some heating also occurs in the fall.

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Barb on June 16, 2006 - 7:59pm Permalink | Subthread | Parent | Comments top
It is possible that load shedding from solar thermal and/or PV might replace some fossil fuel generation in the late spring and summer.

If shell's electrical heating process works, it would be great if it were produced using renewables in part.  To my mind, producing light, sweet liquids with renewables even on an EROEI 1:1 basis might be worth it in the future.

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Robert Rapier on June 15, 2006 - 10:49am Permalink | Subthread | Parent | Comments top
I am in the process of writing an article on oil shale. I will have it up in a day or so.

RR

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oilmanbob on June 15, 2006 - 10:56am Permalink |