DrumBeat: June 26, 2006
Posted by threadbot on June 26, 2006 - 9:20am
Future supplies of oil from Latin America are at risk because of the spread of resource nationalism, a study by the US military that reflects growing concerns in the US administration over energy security has found.An internal report prepared by the US military’s Southern Command and obtained by the Financial Times follows a recent US congressional investigation that warned of the US’s vulnerability to Venezuelan President Hugo Chávez’s repeated threats to “cut off” oil shipments to the US.
Just two Arab countries have supplied almost 50 percent of California's imported oil over the past five years, a dependence that leaves the state more vulnerable than the rest of the country to disruptions in the world oil markets.Update [2006-6-26 9:55:14 by Leanan]: Lots of China news....The finding, based on an analysis of state and federal crude oil import statistics, underscores the challenges confronting California — the biggest gas-consuming state in the United States — and the country as a whole as lawmakers grapple with consumer outrage over high prices at the pump and a U.S. deficit that has widened on the back of high crude prices.
Sinopec drilling for gas in Saudi Arabia
Kremlin gives go-ahead for China oil deal:
ENERGY-hungry China gained its first stake in a Russian oil field last week, signalling a reversal in the Kremlin’s attitude to its long-time rival and launching Russia’s new energy partnership policy.China's May oil demand growth quickens to 13.5%
And elsewhere....
Power crisis pushing Uganda into recession
In Canada, Alberta's energy profits near bottom of barrel. The problem? "Unconventional production methods are deemed too expensive to charge the company traditional royalties."
In the U.K., Labour MP Michael Meacher says, Our only hope lies in forging a new energy world order.
Interesting article about Matthew Simmons (from Culture Change, via Energy Bulletin).
From the Cleveland Plain Dealer, Shippers hop aboard railroads:
Shippers across the country have been putting more and more freight on trains as the economics of hauling by rail have become more favorable.Update [2006-6-26 10:43:36 by Leanan]: Supreme Court to Hear Global Warming CaseThe increased traffic has meant strong profits for the railroads. But for many who rely on trains to ship their goods it has been -- at times -- a hassle.
Congestion on the tracks and a shortage of rail cars, not to mention rising prices, have all contributed to headaches for shippers and their customers. It has also brought to a head the need for improved rail infrastructure in the United States and perhaps a public-private partnership when it comes to paying for it.
WASHINGTON - The Supreme Court agreed Monday to consider whether the Bush administration must regulate carbon dioxide to combat global warming, setting up what could be one of the court’s most important decisions on the environment.A dozen states, a number of cities and various environmental groups asked the court to take up the case after a divided lower court ruled against them.
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Be a good time, much of D.C. is under water.
The adminstration is weathering the latest rumor as with all other such rumors by refusing to confirm or deny the allegations pending further investigation by unbiased specialists.
Iraq's new oil minister says the country's oil production has reached two-and-a-half million barrels a day.
Speaking Sunday on the U.S. Cable News Network, Oil Minister Hussein Shahristani said Iraq expects its daily oil production to reach nearly three million barrels a day by the end of this year and about four million barrels a day by the year 2010.
How long can they keep production at those levels? Or is 4 MB/Day even possible?
In Forbes:
Oil steady as increase in Iraqi output offsets supply risks elsewhere
Challenging Saudi Arabia as the worlds largest producter by 2015?
Interesting.
-C.
The insurgency, however, isn't going away. And oil pipelines are vulnerable.
2.5/mbd - oh yeah!
I'm looking for a little independent confirmation aside from, say, Dick Cheney.
http://www.worldtribune.com/worldtribune/06/front2453913.078472222.html
So are we peaking or what?
http://todd.cleverchimp.com/blog/?p=125
comes from a product-blog, but I think it is an interesting entry. It relates to something I/we have talked about before ... that electric bicycles might be more efficient (in upstream fossil fuel energy) than the plain old peda kind(?).
I have no relation to the company, product, etc.
And it depends entirely on what you eat. The advantage of the human motor is that it can transform such a wide variety of feedstocks. Doesn't need to be an energy-intensive Big Mac. You can go a long way on potatoes and cabbage from the garden.
Your mileage may vary.
I myself just can't believe a bicycle with a motor and batts is kinder to the environment than a simple bike, ridden at a reasonable pace.
http://www.bikemetro.com/calculators/calorie.asp
You can play with some values, but it looks like speeds under 15 mpg are all similar on a calories-per-mile basis. But 40 calories per mile isn't much, combined with short distances.
An electric bike certainly has a bigger environmental impact than a regular bicycle which I'm sure is worse than just walking, all of which are staggeringly better than driving a car which is better than driving a truck.
The key is to use transportation appropriate to your needs. My guess is that most non-commercial trips taken by truck could have used a car and that a large percentage of trips taken by car could now be satisfied by walking and biking. Electric bikes have the potential to satisfy an even greater percentage of trips than a regular bike (100% for me).
Electric bikes could become an excellent mainstream addition to our transportation mix. While walking is great, most folks won't consider it for trips in excess of a mile or two. Much less if any significant amount of cargo is to be carried.
Most people will find that with a normal bicycle they can easily manage trips of 5 to 10 miles and they can haul 40 lbs of cargo on a rack or 100 lbs in a trailer.
On my latest electric bike I can haul 500 lbs of cargo in a trailer at 30 mph. Or I can carry 50 lbs of additional cargo directly on the bike and cruise at 35 to 40 mph with a solid range of 50+ miles. If I slow down to 25 mph and travel light I can easily do 100+ miles. For rare trips in excess of 100 miles I either take the bike part way on a train or I carry a charger and take occaisional rest/recharging stops.
Just for grins I'm building a trailer for my bike that will carry a live 3 piece band plus a 1200 watt sound system for use on our monthly critical mass rides.
Dewalt has recently released a line of cordless tools using batteries with a bit over 3 times the energy density of the ones I'm currently using that are capable of absurdly high discharge/recharge rates (full recharge in 3 minutes with access to high enough powered charger). As soon as these batteries are made available in quantity at reasonable cost it will be possible to build an electric bike of astounding performance.
My guess is that if energy costs continue to increase dramatically faster than inflation then we will see a plethora of ever smaller, lighter, lower powered and more efficient cars. My guess is fuel efficiency could be increased by a factor of 5 to 10 without any exotic technology, simply by getting by with less, ie building very small underpowered cars.
At the same time we'll see ever more capable bicycles, tricycles, quadricycles, etc. assisted by small electric motors and/or gas engines. At some point these will start sporting body shells similar to the pedal only velomobiles of Europe and they will merge into the continuum of vehicles represented by the ever shrinking cars.
Getting by with less fuel/energy isn't a technical problem. It is a cultural one. The rich and powerful will want to retain their large powerful vehicles while ever greater numbers of the less advantaged will want more efficient vehicles. The difficultly will be in sharing the public ways such that smaller slower vehicles don't unduly impede the larger faster ones and that large fast machines don't squish and intimidate too many others into bigger, faster vehicles than they would otherwise need.
http://www.velomobileusa.com/
I think so too. If you want a car that does 50 mpg, you can buy it now, and it doesn't have to be a hybrid. Just a small car with a small engine. This technology was already available in the 70's. The citroen deux-chevaux, although hopelessly outdated, does the trick.
Further, there is a lot of room in applying conventional technologies. For instance, it's quite easy to make the car lighter, using carbon fiber. Or, implement a 'stop & go' mechanism (you know, it turns off the engine when you stop and starts it when you push the peddle) I don't think the technology is going to be the problem.
It doesn't even have to go that fast. 7% increase in price per year, about 2-3 times inflation, will double the price in 10 years. So by the time you buy your next car, in a few years from now, you buy a small one.
Thank goodness there are at least a few others who see our coming energy woes to be a problem which can be addressed with advances in technology and efficiency. All the talk from doomers who think we're going to die off and revert to the stone age is driving me crazy!
hybrids and electrics won't solve anything, they will just prolong this lifestyle a few more years making the other end all the more harsh. they just shift the problems to the less obvious production and manufacture,
you know the old saying, out of sight out of mind.
I do find this doom whining tedious. You are not allowed in my cave post peak. You would drive me nuts.
Solar-produced electricity routed into rechargeable electric vehicles will solve.
Wind power will solve.
Wind powered electricity routed into rechargeable electric vehicles will solve.
Wave power will solve.
Wave powered electricity routed into rechargeable electric vehicles will solve.
wind solar and wave all need the cheap oil and gas system we have right now to be made and maintained. at most you bought 20 years, that is of course if we all drop what we are doing now and go about completely redesign our infrastructure and at the same time building these devices.
maintaining them? --there should be enough excess energy from those mills that are going to energize the maintenance of those that are down
Today speciality steels (Iceland has a ferro-silicon smelter) are driven by electricity. As are some steel recycling plants (lower energy required for recycling).
Add a large wind turbine production to that and it "could" work.
Terrific post! Lots to chew on from technical, cultural and economic perspectives.
I've shared your concern with the size/speed inequality issuses during transitional times. A greater variety of vehicles will be sharing the road.
My initial feeling was that cities would begin to more tightly restrict speed in areas where Godzilla would potentially meet Bambi. We already try to prevent the car on pedestrian mishap this way.
Also (with PO) maybe we can look forward to Peak vehicle weight!
The pedal crowd will grow and naturally become more activist. More 'share the road' (save the fuel) mentality. Maybe like what's happened in China except with HPV's ascending.
Thank's again for the great post.
My experience with my NiMH-powered e-bike is that it is a lot less work than the non-motorized bike, so I use it a lot more often, rather than the car, and that's what really counts.
I am intimately acquainted with the former.
Also, the battery assist will help folks arrive at their destination in a drier and less "fragrant" condition.
Just by helping with these issues, the battery-assist would probably increase bicycle useage.
And according to BEA data...
So the only thing that has "outpaced" the economy is the cost of a college education. Right?
So two things have gone up faster -- College and Medical.
No. You have to substract population growth from nominal economy growth to make the comparison for every person.
US population growth (1978-2005): 1.09%
Nominal GDP/person: 5.39% / year
As a cost of living we were getting worse in college and medical all these years and better on housing and food.
It's interesting that the government is involved in both education and health care spending.
Actually, I've read that college education may have been "under-priced" in the 1970s or 1980s -- and that the rapid increase is "catch-up". I'd have to dig to find the data though.
As for the government influence - I find it deminishing both in healthcare and education during the timeframe you look at. I have an alternative explanation for the phenomenon but I'm not sure you'll like it - because of withdrawal of the government from those sectors (which have explicitely unelastic "demand" for obvious reasons) the prices are being set by the suppliers and allowed to rise exponentially until the lower income people are priced out from healthcare and education. In the case of healthcare I guess this gives additional meaning to the term "demand destruction".
Re the government involvement. I have quotes for this one:
#1 "In their extensive study of the American research university, Hugh Graham and Nancy Diamond note that federal support for research resulted in 'increased congressional involvement, an emphasis on targeted research, and a general trend toward government regulation of the private sector.' During the late 1960s and early 1970s federal regulation of universities slowly but steadily embraced issues such as hiring, promotion, and firing of university personnel (including faculty); research; admissions; toxic waste disposal; human and animal subjects of research; access for the disabled; wage and salary administration; pensions and benefits; plant construction and management; record keeping; athletics; fund raising; and, in some cases, curricula."
#2 "In a widely quoted claim, Harvard president Derek Bok noted that compliance with federal regulations at Harvard consumed over sixty thousand hours of faculty time and cost almost $8.3 million in the mid-1970s. A 1980 study found that meeting regulatory costs absorbed as much as 7 to 8 percent of total institutional budgets".
I walk a lot now (driving is painful) and now these guys are telling me exposure to the air is bad for me. You just can't get away from this crap, can you?
World population is showing a net increase of about one million people every five days.
The world is consuming, from fossil fuel + nuclear sources, the energy equivalent of about a billion barrels of oil every five days.
http://www.bloomberg.com/apps/news?pid=10000086&sid=a823kgVOs5Zo&refer=latin_america
Might be a little off on that last one.
They should probably invest some of that money in new desalination technology: Carbon nanotube-based membranes will dramatically cut the cost of desalination
control.
Remember that one?
I don't think you have enough evidence to
make that assumption.
peace
Big thxs for posting this! Just more proof of Hans Seleye's General Adaptation Syndrome. According to theory as explained by Reg Morrision, declining genetic fertility plus peakoil-induced death rate increases should hopefully cause pop. curve matching to the Peak Everything Downslope.
Now, what are the best estimates for all vital resources aggregate depletion rates and collapse of shared carrying capacity? If Hubbert Downslope is 6% a year--Does that mean aggregate depletion is 10%/yr, 15%/yr, or hopefully 4%/yr?
I think we need Asimov's Second Scientific Foundation to supercomputer simulate this.
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
But even if we accept this projection, from the graph I eyeball a decrease in growth of 0.75 mln. per year after 2010. If this is correct we are going to hit 0 growth by the year of 2103, by which time the world population will peak at some 9.8 bln from the current 6.5 bln. If we suppose that the worst effects of peak oil and peak natural gas (as long as some other non-renewable resources) will start after 2020, by that time we are still going to have 7.2 bln people to feed and quite a lot of projected natural growth ahead. Sounds like a sure recepe for future resource wars, doesn't it?
Of course the future is unknowable but it doesn't hurt to plan for the worst.
What else would you expect after the Bush regime has done its all out best to antagonize, alienate, or otherwise offend practically every country on the face of the earth (with the notable exception of the Brits and the Israelis, neither of whom supply us with any oil).
China is busy making oil deals; the US is busy making enemies.
Absolutely perfect framing of the situation.
How much you wanna bet GM's plug-in is an SUV?
RR
* - kind of like "the return of the buffalo"
The cost of the hybrid system including a large batterypack will be too much of an increase for small or even midsize cars, as well as minivans, which are usually bought by families with small kids who need the highest utility/dollar ratio possible.
Luxury cars will sell with or without 60MPG--people who can afford that kind of vehicle don't care if gasoline is $3 or $4 or $5 a gallon.
It will be seen as too wimply a feature for pickup truck buyers.
I'm guessing it's something like the Chevy Trailblazer.
I think it's ridiculous to put this technology in that kind of vehicle first, but what the hell--if it gets people to save gasoline, I don't give a flying you-know-what about what they're driving.
http://hybridcars.com/saturn-vue-hybrid.html
But you're right that 60 mpg should be doable (esp. given the fuzzy way mpg is calculated for plug-in-hybrids).
After all, the Electric Ranger did pretty well without a gas engine. Maybe a "Half-Electric Ranger" (I realize that was Ford, not GM) would fit the bill.
Too true. However, when enough people become convinced that global warming needs to be controlled, conspicuous gasoline consumption will become anathema, an antisocial activity. If we can get to the point where the neighbours look at a 20 mpg vehicle with disdain, sales of anything like the current versions of luxury vehicle will plummet.
I really don't see what all the fuss is about.
A plain ol' Toyota Yaris already gets 5.5 litres per 100 km, and the diesel version (sadly only avail. in Europe at the moment) gets 4.5 litres per 100 km. Even if gas were to double in price, assuming a daily round trip commute of 100kms, that's only going to save a commuter $15 a week.
How much more will I have to shell out in return for an extra litre or so of efficiency? A Prius costs twice as much as a Yaris.
My kids prefer to travel in the Yaris than in our old Subaru Legacy, because they say it feels like there's more room in the back seat. The smart airbag also means that I feel comfortable having an older child in the front seat. I can get my whole family of 5 in it with a moderately stuffed school backpack for each child in the trunk. I couldn't carry us all and a week's worth of groceries though, or all of us and even one of our dogs.
I do like the Yaris, but I don't think many people are as ready to go as small as the liftback.
Yaris Length/width/height: 150.0/66.7/60.0 in.
Prius Length/width/height: 175.0/67.9/58.1 in.
So the "footprint" is 18.8% larger on the Prius.
Besides the hatch, (we have the 4 door version in Canada), did you know there's also the Yaris sedan? I assume Toyota brought it to market since you Americans just lurrrrve your bigass cars. It's is 169 inches long, if that makes you feel any better.
But if size=safety, shouldn't you be driving an Escalade?
Nope. A tiny little Honda Fit gets 5.6 litres on the highway and got 5 stars in the NCAP ratings, better than the Prius in fact. Including taxes, it costs just $21,165.75.
As I say below, I just can't see a financial argument for buying a hybrid - now or even in a $210/barrel world.
I did look at the Honda Insight, are read of what people had to do to carry a bike. I learned you could fit one inside if you took off both(!) wheels, and that putting a roof-rack and two bike on dropped you below 30 mpg (!!!).
I can fit one bike in pretty easily:
http://odograph.com/?p=461
and I bought a hitch rack (yes my prius has a trailer hitch for it, LOL) that rides in the slip stream. Even with a bike on the back, people and luggage, I can score 50 mpg cross-country.
(I do many of my in-city errands by bike, and use the Prius for longer runs and road-trips. My trip to the market this morning was by bike.)
My point is that even if the price of crude were to rise dramatically, there are already run of the mill, gasoline vehicles available that make more financial sense than these wonderful new hybrids GM is talking about.
Let's say the price of gas were to triple in price. In Ontario, Canada, that would mean $3 a litre (that'd be $11.36 per US gallon).
Yaris cost of commuting 100kms, 5 days a week, average hwy mileage 5.5 litres:
27.5 litres at $3/litre = $82.50 weekly, $4290 annually
Hybrid cost of commuting 100kms, 5 days a week, average hwy mileage 3.92 litres:
20 litres at $3/litre = $60.00 weekly, $3120 annually
Annual hybrid fuel savings amount to just $1170.
Now since we don't know the purchase price of GM's funky new hybrid, I'll base the price on that of a Toyota Prius, which including taxes and minus the $2000 Ontario gov't rebate sells for $35,413. The Yaris (4dr sedan, "package c" w/ ABS, AC) purchase price, including taxes, is just $20,387.
So even if crude reaches $210 a barrel, I have to keep a Prius for 13 years just in order to break even compared to a Yaris sedan. Start bringing over the European diesels and there's really no financial argument for a hybrid unless prices drop significantly.
Hey, good on you if you're driving a Prius. My lungs thank you. But at current MSRPs I don't see how driving one of these amazing new 3.92 l / 100 km hybrids is going to help anyone save money - even a triple today's prices.
Allow me to speculate a little and assert that if/when shortages start to happen there will be two possible scenarios to evolve:
1) If left unchecked prices will skyrocket to heights where real demand destruction prices out the least able to afford it and restores the balance. Here I'm talking about prices in the range of 10-20 dollars a gallon at the least. I know it sound absurd currently, but considering the average household income in US I don't see demand destruction playing significant role at lower heights.
The side effect of this scenario is that the rich guys will drive SUVs as usual, while the poor guys will byte the dust.
2) Government imposes rationing, for example fixed quantity for every household.
In this case it makes a huge difference if you have a 40 or 60 MPG car. In case you have 60 MPG you will be able to drive 50% more and you may be even able to live as usual. The value of a car that allows you to do that will be dramatically higher than the other one, not mentioning SUVs etc.
Of course in the short to medium term I am not expecting any of these to happen, so I agree with you that currently the hybrids simply don't pay off. But in 5-10-15 years, this will change dramatically - in all cases for a company it is a very wise idea to be positioned with superefficient models for the time they are needed.
The opposite, in fact. I'm counting on the price tripling, and that the average cost of oil will be $210/barrel over the next 10 years (using the top range of Econbrowsers' Gaussian random walk as a rough guide).
If the cost of gas skyrocketed to your worst case scenario of $20 US a gallon tomorrow and stayed there (and in my opinion that's unlikely) it would still take 6 years before I'd see any kind of payoff for buying a hybrid vs. a typical subcompact.
So yes, if you forsee a huge (6 times), sustained increase in the price of gas over next ten years, anyone in the market for a car should go out an buy a hybrid since it would generate comparative profit of about $10k using a $6 litre rate in the scenarios I posted above.
I ultimately win in all scenarios, though, since I don't own a car.
:)
Very true :)
I agree with your calculations, though the Prius has some of extras compared to the Yaris which you need to substract from the price difference to make the comparison fair. And there is also some "avangardist premium" that many people seem to be willing to pay. FWIW the most popular Toyota model is Camry and it has similar parameters and not such a huge price difference with the Prius.
The usual argument goes that with time the technology will evolve and the hybrid prices will drop; personally I expect that the 60 mpg for a plug-in hybrid is not even the start. Like I said I expect that in future the availability of the fuel to get a higher weight in choosing the car, not only the price by itself.
As a side note I just returned from my home country (Bulgaria) where I could say that PO is already kicking in - already some half of the fleet is running on diesel or propane. I was even driven by a taxi fueled on natural gas and I expect the diversification trend to continue. Ultimately I think all ground transportation should go to electricity and therefore plug-ins are a perspective area for the car companies. It needs some time for them to become attractive for the public, but eventually this time will come.
I asked him if he could afford the gas and he said yeh, it's not too bad. I said great, but what about if it's $4/gal. That's only a 25% increase and it became real clear to him he just bought a toilet for his cash. How many people sit and figure out the savings of mileage before they buy a vehicle, let alone a hybrid? I know ALL of them are HERE though.....
But if you are going to make comparisons between the Prius and anything else, I think you have to reduce the other variables. You have to find a car that is like a Prius in all other respects (mainly size/capacity, and reliability) and then see how the hybrid aspect changes the picture.
If you are going to compare a Prius with a smaller car ... you might as well compare a Lotus with a slower car ... if you get my drift.
Maybe that explains part of our different persepctives. My 2005 Prius only cost 25,263.44 CAD (22,500 USD).
I did stop in to see when the Fit was due, but I couldn't get a firm date (a year ago).
Definitely helps to explain the difference!
A Prius costs $35,413 CDN including taxes and minus the $2k rebate.
The Yaris (4dr sedan, "package c" w/ ABS, AC) purchase price, including taxes, is just $20,387 CDN.
You can price it out for yourself on the Toyota Canada web site if you don't believe me.
Didn't I already mention that America is not the world?
One of these days I'll raid the Monopoly game set for the play paper money and go to Canada and have a nice vacation.
Prediction - by the year 2020 everyone is going to yelling about all the used batteries and how to dispose of them? I know for the most part they should be recycled - but the problem there is going to be NIMBY. Who wants a big battery recycling plant as a neighbor?
Best to just sit in a corner, wimper, and wring our hands until we die.
Is there a difference?
well, nice to see some true awareness that the world is starting to be bigger than the U.S.
I looked at the Yaris around the same time I looked at Prius (original version) - 3? 4? years ago. The Yaris cargo model was also interesting a few months later. Europe or Japan tend to get the pick of automobiles, except for SUVs, minivans, and pickups. America's auto market is not very representative of what the world buys. The quantity of electronics bothers both my wife and I, though.
Battery recycling is, at least in the sense of collection, very serious in Germany - most current batteries are really, really nasty mixtures of metals (all electronics basically suffer from this - recycling, in terms of collection and at least basic materials recovery is also normal practice here).
Batteries are seen as a major problem and as something to be resold at a minimum level as basic materials - at a guess, the Chinese or Russians do the smelting.
This is one reason that any doomer perspective has to be a balanced one - the U.S. could certainly become more like Europe, though it would involve so many things it is impossible to imagine it happening in any realistic time frame.
Still, the U.S. could actually develop a long term view, even as the short term turns grim. Not that I believe it will happen, personally, but the collapse of the U.S. in any sense is not a collapse of the entire world.
A number of places are doing a better job of looking at and preparing for the coming challenges. They never had the luxury of getting out of practice in meeting long term problems, as the U.S. seems to have. Or which the U.S. may have never actually developed - this could be a sort fitness test - most North American civilizations seem to have had unstable lifespans, without developing sustainability. Who knows how the last major expression of humanity's ability to fill in a total ecosystem will work out.
It's not exactly the case that Gazprom prefers domestic over export sales. Why would they, when the Russian domestic price is tightly regulated? There just isn't any money to be made selling gas in Russia. Which is why they are quite happy for foreign oil companies to be stuck in the domestic market, with the export market reserved for Gazprom.
In other words, Gazprom wants export sales to happen on Gazprom's schedule, with the profits going to Gazprom. The recent legislation giving them de-facto regulatory control over exports is simply a step in that direction. And Gazprom is quite happy to wait, as it simply doesn't have the cash to finance major export projects at the moment.
This PDF http://www.tnk-bp.com/common/en/press/presentations/Ferguson-BaikalEcForum-16.09.pdf shows the situation quite nicely. Kovytka (at the NE end of lake Baikal) is nearest (by about 600km) to the Chinese border and is the obvious choice for getting gas quickly to the Chinese market (i.e. in 3-5 years instead of 10-12 years). Unfortunately for Gazprom, Kovytka is operated by TNK-BP; Gazprom's fields are a lot further away. So Gazprom is using its political influence to prevent TNK-BP from going ahead with its export plans, and holding out for as big a share as it can get. TNK-BP has already offered Gazprom 51% of Kovytka, but clearly that isn't enough.
...and from the St. Petersberg Times of Russia: the G8 leaders are going to have to learn to 'Grin and Bear It' as Putin repeatedly thrusts his energy agenda forward:
Excerpt:
---------------
A Grin and Bear It Summit
By Georgeta Pourchot [Georgeta Pourchot is senior associate at the Center for Strategic and International Studies in Washington.]
The Russian agenda for the G8 summit next month is taking shape. From the Kremlin's perspective, the St. Petersburg summit will be a public relations opportunity to restate known positions, propose a few new initiatives and do so looking like a great power again.
Other than stepped-up rhetoric, it is unlikely that Western partners will have much influence over this G8 agenda. That became clear at the Sochi summit, where Russia rejected the Energy Charter, the one mechanism that would have made Europe and Russia's dependency mutual. In the energy sector, Russia retains the upper hand in decisions about how much, to whom and how it is going to deliver its natural resources.
The agreement and subsequent start of construction of the North European Gas Pipeline marked the moment when Russia decided to use natural resources for political ends. The North European Gas Pipeline kills two birds with one stone: It makes the European Union even more dependent on Russian energy resources and East European countries less energy secure. It also shows former communist countries such as Poland that their anti-Russian rhetoric has a price.
Overall, Russia is likely to host its first G8 summit amid broad international media attention, high security, anti-American popular demonstrations and official smiles that lack substance. The Kremlin will, however, have shown its public that Russia is back on the world stage as a great power and that the recognition of its status was worth the cost of hearing a few uncomfortable truths.
--------------------
http://www.sptimes.ru/index.php?action_id=2&story_id=17966
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
The future of world oil production has many variables (TOO many) and cannot be reliably predicted. However, for discussions with Leroy Demery, and to inform others, I am going to outline a "middle ground" scenario below.
This is an "All Liquids" forecast. Ethanol volumes are reduced to reflect their lower energy density. Tar sands, coal to liquids, natural gas to liquids are included.
2007 - Peak World Oil Exports
2009 - Peak World Oil Production (the difference is growing internal demand for oil exporters. All are booming today and have growing internal demand).
2010 - PO -1%
2011 - PO -3%
2012 - PO -5%
2013 - PO -8%
2014 - PO -11%
2015 - PO -14%
2016 - PO -17%
2017 - PO -20%
(Convential oil down -1/3 in 2017, balance made up by "other")
2018 - PO -22%
All efforts at conservation are inadequate on a global scale (despite successes in some nations) and the method of last resort, recession/depression is used worldwide. The US dollar crashes and might reach €40¢ (US$2.50 = 1 euro). Oil rises to 1.5 euros/liter or close to US$500/barrel by 2018.
As I said, a middle range estimate.
So far, US oil demand has increased, slightly, with higher prices. We are likely to have to reduce our oil use by more than the global average since we do not export enough to pay for what we want.
Imagine the US reducing total oil consumption (transportation (2/3) & non-transportation (1/3)) by 1/3 in a dozen years ! What economic forces would be required ?
Prices, at the end, are almost "out of the hat". REALLY hard to judge that. Tell me US & global unemployment and I will give better #s.
What did you think of the depletion curve as a planning tool ?
All I know is that a fossil fuel use + nuclear use of a billion barrels of oil equivalent is not sustainable.
What's more grotesque?
A. Hallmark and Disney contracted out to CHINA to make these.
B. A worker in China watches these these words flash by on an assembly line.
C. Oil is burnt to make and then ship these things to American consumers.
For those who think I am joking, I am not. There are manufacturing plants in Saudi Arabia. There are plants that make concrete blocks and other building materials. There are plants that manufacture other things for local consumption. Every manual labor job is filled by an expat from another country.
How do I know this. I lived there for five years while working for Aramco, 1980-1984. My son has lived there since 1991. He says it is still the same. When I was was there, there were roughly 5 million foreign workers in the country. Today there are 5.5 million foreign workers in the country. Saudiazation of Aramco, as well as in other places is the aim but they are really not making much progress.
The percentage of American private sector workers who are temporary immigrants is microscopic compared to several gulf states.
"I can't buy shoes and you get a picture of your dog???"
The European Union has worse demographics than the US in terms of retirement, is probably in worse energy shape than the US, has generally higher rates of unemployment as well as longer lasting unemployment, and, if you remove Germany which is a huge export machine, the economic numbers are generally worse than ours as well.
Finally, they have one heck of a time agreeing on things over there, as several hundred years of history make clear.
The EU does have more energy problems than the U.S., which forced decades of efficiency - it also has a wind turbine and solar cell industry on an industrial scale - even if a pittance in comparison to other energy sources, the EU is the place to buy. And in typical EU fashion, they plan to support and protect this export market.
The EU does have a non-growing population - while this creates a retirement 'crisis', it also avoids a lot of other growth connected questions in a world faced with the end of liquid fossil fuel based growth.
Germany's economic numbers are quite comparable to the U.S. in most ways - the distortions in the standard U.S. press are well handled by Dean Baker at beatthepress.blogspot.com. Both countries are world leaders too - the Germans in export, the U.S.A in debt.
The U.S. would be lucky to have Germany's problems - spoken as an American living in Germany for more than a decade.
There will be massive problems everywhere with peak oil - but the fundamental question of infrastructure is definitive to me.
For one you can't BUY your way out of tickets. Everything counts and it hurts a lot more when you get a ticket. I mean think about it, Germans are intelligent enough to let me go as fast as I want to, but just not 2 feet behind another car (I've seen the strips in the road with cameras to catch tailgaters). So for those of us who want to go balls out, fine, just don't get close to anyone! I like....Europe in general has even stricter biking laws that WORK!
My first bike was a superbike 04 GSXR750. I should have died learning to ride a motorcycle on that. I was sitting on 120hp transfered to ONE wheel. In Europe you have to start small and take tests all the way to full License. Makes a lot more sense, but not near as "free" as we like it here.
Well, the US reduced it's oil consumption by 15% from 1979 to 1983(-4.0% per year, average), with economic growth of 7.4% (1.8% per year, average). So, I think we could manage 2% per year, while still growing.
Here's the numbers. They exclude electrical generation, which would have made the numbers look even better, but might be misleading, because substitution of gas for oil was a one-time thing. Of course, you could make the same argument for industrial consumption, but I think that would be overadjusting, as there are further substitutions that could be made. The GDP is inflation adjusted.
Oil GDP
1980 -5.2% -0.0%
1981 -3.9% 1.2%
1982 -5.1% -1.4%
1983 -1.6% 7.7%
This time it will be entirely different. This time people will know "this too will not pass". They will know that the world's liquid fuel supply will now be shrinking.....forever.
People invest in the stock market for growth. But with a forever shrinking energy supply, most savvy investors will now realize that the economy will now begin to shrink.....forever. People do not knowingly keep their money in an investment that they know will shrink instead of grow. Most everyone will pull their money out of the market. This will result in the mother of all stock market crashes.
The second thing that will happen is that exporting nations will start to husband their own oil. They will keep as much of it as possible for their own use. Kuwait is already talking about doing this. They are simply the first domino that will fall, pulling more and more oil off the market. This will accelerate the decline greatly.
No Nick, it will not be business as usual this time like it was during the 79 to 83 crisis. This time it will be dramatically different.
Not so much. A lot of people, perhaps most, thought that oil prices would never come back down - that's part of the reason why the response in 79 was so strong, vs these last two years when people started out assuming a temporary spike.
"But with a forever shrinking energy supply, most savvy investors will now realize that the economy will now begin to shrink.....forever."
I think most savvy investors recognize that peak oil is not peak energy. Look at the enormous amount of money that VC's are putting into solar: they recognize the future when they see it.
Further, even peak energy input doesn't mean no economic growth. For instance, in the US the car market is mature, but car stocks don't crash (unless they meet a better competitor - GM is down, Toyota is up...). Biotech is not resource intensive, nor are other services which are the future of GDP growth.
more later..
I was somewhat amazed (mid 90's) when good times started to roll again.
There were the ones I would have expected, such as the marketing director of an English company that's developing a fuel-cell motorcycle. As well we heard from Spider Robinson, an SF writer who is completing an unfinished novel by his hero Robert Heinlein. He has been a long time champion of the idea of the resource limitations that are inherent in living on a sphere, as well as solutions to them like Solar Power Satellites and asteroid mining. He was especially emphatic about this being our last chance to assure our survival as a species.
Then there were the ones that came out of left field. A comedian named Peter Bergman (a Firesign Theatre alumnus for those of you who dimly remember the late '60s) did a comedy schtick called "The Nervous Optimist". And the one thing that makes him most nervous is oil depletion. In the middle of the performance, with no real introduction of the notion, he said, "And this should come as no surprise. We've known this was going to happen since 1956, but here we are, sliding down Hubbert's Peak!" Of course, the 1956 reference being to Hubbert's seminal paper on the topic.
Then there was the deep-sea explorer who discovered both the Titanic and the Bismarck, who listed PO and GW along with global terrorism as the big challenges of our age. I took issue with him on terrorism, and he agreed that it didn't have the whole-species implications of the other two.
In addition it was mentioned by William Samson, a prisoner of the Saudis for almost three years, Mike Papantionio of Air America Radio and Samantha Nutt, a doctor with NGOs who mentioned it in the context of resource wars.
In conversations during the breaks and at the evening schmooze-parties, the level of awareness was extremely high, and the amount of concern was palpable. Now this isn't a blue-collar crowd by any stretch of the imagination, so their knowledge was no big surprise. What was surprising was the consistently expressed view that this is one of the fundamental challenges humanity is facing. The fact that so many attendees are in a position to do helpful things was even more gratifying.
I mentioned to the conference organizer, Moses Znaimer, that we ought to have a speaker at next year's conference talk specifically about Peak Oil. He said, "Find me the right person, and I'll invite them.
Any takers?
He will be taken more seriously, by this crowd and he carries an increasingly sobering message in his talks.
On another note, Dr. Bartlett would be a great speaker for that crowd, a real eye-opener.
========It's all about population!
too.I think it was his first official act.
peace
I have always been a little suspicious of the $25/bbl Oil Sands Production costs commonly thrown around. It is unclear to me whether this included payback of the capital infrastructure costs, which are very large at about $40,000/barrel/day.
Anyway, interesting numbers contained on page 2 of this article from The Edmonton Journal
Even with the construction costs paid off, the net production costs appear to be $71 - $21 = $56/bbl ($50 USD).
Still not sure if "construction costs" are the total capital infrastructure costs.
Reinforces my skepticism of arguments like Nonconventional fuels such as CTL are economic when crude oil prices exceed $30/bbl
That should be $77 - $21 = $56 (all Canadian dollars, not that there is much difference these days!)
I've seen total capital costs of about $60,000 (US) per bpd of oil from tar sands.
;-)
==========It's all about population!
A drawback to the oil boom?
Worst traffic, bar none.
Most arrogant inhabitants.
"Worst traffic, bar none."
How do you like that cab ride from the airport to Moscow? Every time I visit Moscow I kiss the ground when exiting the cab. The drivers are insane there, it appears there is no traffic law. Aside from that, I most often used Bus & Metro so I was able to get around quite easily :)
-C.
-C>
Simmons tells it like it is.
http://www.energybulletin.net/17555.html
Yikes! Is that >13% a year? 72/12= 6.0 years, but 2012-half done 2006 = 5.5 years. 72/13 =5.54 years. No way to mitigate that decline rate--worst case scenario ahead?
Please tell me my math equation is wrong!
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
But what if the rest of the world declines by an equal amount. That puts the drop at 3 million barrels per day per year. But I don't think the rest of the world will fall that fast, more like half a million barrels per year. That's an overall drop of about 2 million barrels per day each year. I believe that is managable.
Well, perhaps not. The realization that we are post peak will send the world's stock markets into a tailspin. And it will cause many oil exporting nations to start to husband their oil, keeping more in the ground for future domestic use. This would cause a major worldwide depression, and who knows what else.
Hey, it ain't gonna be pretty.
I just happen to have finished reading Simmons' book, 'Twilight in the Desert', and I must say: it's quite convincing and also pretty scary stuff!
Simmons goes into great length discussing the ever-increasing water cut of Saudi oil and the massive efforts at injecting water to maintain pressure and to (hopefully) sweep oil from the periphery of the fields to the production wells. It was a real eye-opener to see the extent that water management is such an integral part of operating a mature oil field and how easy it is to irreversibly screw up an oil field.
Saudi Arabia has built some truly huge water treatment plants for oil field injection. I would guess that at the very mininum the water treatment process must include sand filtration to remove particulate matter that would plug up formation pore space. Perhaps some lime treatment to remove scale-forming calcium and magnesium? Then maybe some pH control? Just a guess.
Is anyone out there familiar with exactly what steps the Saudi injection water treatment process consists of? (This is mainly professional curiosity on my part, as I was once in the water and waste treatment field.)
http://tinyurl.com/f2cz2
http://www.neworleanscitybusiness.com/uptotheminute.cfm?recid=4912&userID=0&referer=dailyUpd ate
Couldn't pass it up....
If you sent that snippet back via Time Machine to someone in say 1945, the recipients would probaly simply kill themselves!
"Did we just fight a world war and lose millions of dead in order for THAT to be happening in 60 years time?"
Before WW II, New Orleans was known as the most gay friendly city in the US (or whatever term would be used then for a city that wuld tolerate "faggots').
As noted, I live on St. Andrew 2.5 blocks from Magazine and have not heard or seen anything (but I do not frequent those particular shops). I knew a couple of transvestites before Katrina but I think that they have not come back yet. Both worked in restaurants and "were not the type" described.
Gay young men that volunteered or were drafted and then discovered in the Pacific Theater during WW II were brought to SF and discharged there. Many did not return home but found local employment in the WW II boom.
and pretend the Philip Cooney episode never happened. Rat ba....
Thanks. You stopped just in time :>)
Rat
But it sounds like the captain of the Titanic saying I think we have a serious problem, but people could argue that the iceberg ran into us.