DrumBeat: June 27, 2006
Posted by threadbot on June 27, 2006 - 9:25am
Topic: Miscellaneous
OSLO -- Norway, the world's third-largest oil exporter, is battling to stem falling crude output as high costs, maturing resources and labor disputes threaten to undermine near- and long-term production goals.This is labor dispute they are talking about: Oil industry to strike in NorwayFor years, the Nordic country has been a top supplier of crude to world markets, particularly Europe and the U.S. Despite record oil prices and investment, however, government and industry officials say oil-union strikes, a tight rig market and a dwindling number of big-field discoveries may accelerate the inevitable decline in crude production and prevent the country from meeting its output targets.
OSLO, Norway, June 25 (UPI) -- Norwegian oil industry workers may be preparing to go on strike, Aftenposten reported.Leif Harald Halvorsen of the oil industry's national association told reporters that drilling activity and exploration is being halted, and about 30 drilling operations may be affected if no solution is found. A strike among members of the oil services branch has already closed operation on two oil rigs.
Energy literacy - what you don't know can hurt you.
David O'Reilly, CEO of Chevron, says Corn is not the answer.
African countries struggling with high oil prices
Kuwait wonders, How much oil do we really have?
For quiet some time Kuwait's official oil reserves have remained static, hovering around an agreed figure of 94 to 99 billion barrels of proven oil, although some sources put it as high as 101.5 billion. However, in a series of controversies revolving around the oil industry and its global implications, it has been revealed through certain individuals that the official figure is a mockery, since what has actually been accounted for is way below the official figures.In what seems to be a phenomenon that not only affects Kuwait but the entire oil industry, people are starting to wonder how much longer can we sustain oil, especially as demand from emerging countries is constantly increasing. Oil is a limited resource and its depletion date seems to approaching rather fast.



Russia to quadruple natural-gas price for Belarus in 2007
The Folks over at 321energy.com have an interesting article
Energy Price Explosion Not a Short Term Event
The topic of natural gas was quite interesting...
A little off-topic but interesting none the less...
A Cup of Gasoline per Apple?
Do you like the taste of juicy organic apples from Washington? They're not bad, but they could taste sweeter if each one didn't involve a cup of gasoline.
-C.
Europe fears new energy crisis as Russia gas row flares
Some tidbits...
"It seems like all the makings of a perfect storm," said Jeffrey Woodruff, a director of the energy group at ratings agency Fitch.
"Any of the events in isolation could be enough to spark new supply interruptions in Europe, but all of them colluding near the beginning of the G8 summit on energy security seems unbelievable."
-C.
They have less resources of their own to rely on, the guy at the other end of their pipe is a former KGB agent who is hugely pissed over the fall of the USSR empire and is going to extract revenge on anybody he can for it, and on the opposite end of that same pipe is a rising empire that is fighting like hell for access to resources.
Everybody depending on energy imports to support their current lifestyle is in big trouble - the thing is, that is what, around 80% of humanity?
The question is, what happens after the energy available is reduced?
There, I place my bets on Europe in comparison to the U.S. - Europe will quite likely return to its standard traditions - the harvest is going quite well out my window and throughout this region, the sheep are doing their annual trek, a lot of people made strawberry jam from local strawberries using sugar made from sugar beets grown in the region, and the cherries are looking quite good. This will be followed by apples and grapes.
How does it look from your window?
If you mean Germans will be doing worse because they aren't going to be tearing down the autobahn, I agree. If you mean the trains connecting the cities and towns will stop running, I disagree. And if you mean that countries with with positive trade flows are in a worse position than the world's largest debtor nation, I think you are very mistaken.
No one, absolutely no one, is likely to enjoy the next several decades - but I prefer living in a place with local agriculture and high technology and long term perspectives in planning.
I think the U.S. will have to work very hard to even come close to achieving European 'disadvantages' like inefficient local agriculture, social services and essentially universal health care, essentially zero population growth, and a perspective which covers generations not quarterly reports.
Unlike 40% of Americans, wwho I have read expect to end their lives among the top 1% of the wealthy, Europeans are people who tend to have a realistic view of what life offers. This seems to be the essential handicap you are describing.
Expat, I enjoy your unique perspective and I realistically plan to die in Europe. I prefer the Danish, but that's another topic. I'd like to point out something about your quote above. Those 40% who believe they will die in the top 1% is the entrepreneurial spirit that has driven this country from the bottom to the top. I'm not saying Europe lacks this, but historically the risk takers left Europe to come here. Those who wanted to just deal with what life gives them, stayed.
I don't see this as a handicap either because this spirit drives people to compete and attain what they want. Now 40% believing the top 1% is a stretch, but I still believe I will be well of financially, just not THAT well off. I've opened businesses that have failed, I know what failure feels like, but I still grind out a living and think of HOW to get myself out of the race I'm in. If I were "realistic" as you say, I would just kowtow and lack any motivation to change my life for the better. I'll end this by saying there is a definate difference between those who BELIEVE they will be rich, and those who WORK to becoming rich.
In reality, we have been steadily moving towards a system of taxation that favors wealth over work. The middle class has steadily been shrinking for many years. We have moved into a mindset that consumption is the central goal of all our lives, and in the process have ended up augmenting our lifestyle based on going deeper and deeper into debt.
I think it's a mistake to think of the United States as being somehow more exceptional than Europe or anywhere else. We're different, certainly, but not necessarily better. I doubt there is any significant difference in personality type based on people leaving Europe to come here. You can use that sort of thinking to make almost any argument. For example, you could just as easily say that "only those who couldn't cut it in Europe came to America." It would have just as little validity to it.
Europe right now is grappling with the opposite problem that we are. Their society is designed to be more egalitarian, so that even those who are poor are better off. For example, European poor can still go to the doctor, poor here don't have that luxury. Now, the opposite side of that is that in ensuring stability and economic fairness, that their economies are a bit less fluid and able to quickly react. Clearly they have problems, but they are also relatively overblown by the U.S. financial press.
My point was essentially based on the delusional idea that 40% becomes 1% - not only won't it happen, it is not possible.
And yet, Americans believe it. There are a lot of beliefs which seem fairly unique to America, if only in part because no other society had the chance to live in such luxury that they could ignore the world around them for a generation or two. (And for those Americans who believe Europe is living in a dream world - sure, they are, in part because they also know very well what a nightmare world looks like too - they worked hard to achieve the dream.)
Sort of like saying global warming isn't true, because it is just raining for a week in DC - I should trademark something along such lines as 'Cold rain means no global warming' for the oil companies.
EU countries do not look to be able to resolve even simple internal issues of employment - students riot to protect young people's wages and guarantees of lifetime employment that prevent them from being hired, resulting in high unemployment that then creates dissatisfaction and more riots among immigrants. The US, for all its recent mismanagement, remains a far better place for a poor person to rise to middle class or above, to say nothing about a person with a 'different' background to get a job.
THe US could do without any oil imports by car-pooling, converting to prius/diesel technology, plus moving from trucks for long haul to trains - that is, adapting to Europe-level energy consumption. And, we will soon begin converting from fossil fueled generating stations to nuclear ones, something not likely to come soon to Germany, the EU's largest economy, where we will see more brown coal consumed instead. Europe is addicted to russian gas, and the price is rising fast. As for oil, the EU is becoming less self-sufficient by the day.
As an aside, the world may well be moving towards less trade and more local product, not least agriculture. But, globalization has brought higher living standards to many, not least in asia but in many others too. Many at this site decry trade and its more visible entities, such as walmart. Probably many of these proudly think of themselve as liberals. There was a time when US liberals, and "trade" unions too, supported free trade both as helpful to the world's poor and as usefully providing markets for our exports. Trade still mostly helps the world's poor while competition does, in the end, help everybody. Restrictions to trade would reduce jobs everywhere today, just as they did do in the thirties, whether caused by policy or higher energy costs.
I disagree about our leadership though. I'm not liberal by any means, I'm for a small small national govt. States should have a bit more power, but that's for another discussion. People keep saying we did this before, so we'll rise to the occasion. I think this is flat wrong. We will do something about, albeit too late, but it can't FIX this problem. It's easy to build crap and destroy even more crap with big metal bombs. The people of those generations were used to sacrificing and dealt with rationing of common goods for the war effort. Can you imagine that now?
We are different people than just three decades ago. We haven't faced a major crisis that required a national effort since WWII. Vietnam, Korea, & the middle east conflict are NOT even close in national scope. We transformed entire sectors of our economy into wartime mode. We couldn't do that now and part of it has to due with the flight of all the equipment, plant & property we used to make these wartime machines.
So much has changed especially the consuming public. We consume like no one on this planet and we gloat on top of that. Generally speaking we have transformed into a "me, now" culture and have little room for sacrifices. Add on that our representatives do not represent us, rather corp america and what will motivate these people? Personally I'm getting rid of any incumbant that I can, but the replacements don't look a whole lot better. The business interests of this country do not jive with the personal needs of America. However the average American will tell you different due to the success of the machine know as marketing.
Not to mention Science is being repressed. Does that sound like another time European history? Science is being tarnished by this Administration and who knows what the next leader will have to say about this. Most people are asleep at the wheel, the leaders are sleeping, and the few of us that are awake are screaming to slam on the brakes. The only way out is reduce demand. As a politician you will not get elected telling everyone to stop doing what they are doing.
Maybe things have changed. I haven't been there in 20 years.
T
Things may look nice outside your window, but in terms of the European Union, times are generally good right now and we see:
- Truckers blockading ports and cities when gasoline prices get too high.
- Students rioting (and the government give in) when labor laws are changed.
- Sizeable minorities (Muslims, Turks) who are widely disaffected.
- Huge agricultural subsidies keeping those local farmers in business, and when those laws are threatened, they threaten to riot too.
- Several countries have already had their populations refuse to ratify articles of the European Union.
So clearly there's already some tension under the surface there. And yes, some of those things are also true of the US. But the US has the advantage of an American identity. When things get difficult, say a recession, do you think the Germans and the Italians are going to agree on interest rates?And notice - whenever worldwide markets decline, what goes up? US Treasury Bills. That says something, namely that there is still an underlying faith in the US.
I won't argue with you though that Europe in general has significantly better transit systems.
well, it is a problem of focus. I grew up in Fairfax County near Washinton, DC - if you think a neighborhood in Anacostia has anything to do with Fairfax, then you will see quickly how the averages paint a very different picture. The same is true of West Virginia compared to Northern Virginia. But Fairfax in the 70s was a very good place to live.
America has extremes which are pretty much unacceptable in a European context. And America has thrown away things which Europeans consider important to the long term.
And Europeans tend to want to keep what they have - what you see as social disorder (and which it is, at times) most people here see as standing up for their rights - and yes, they have a broader definition of 'rights' than being hired and fired as a privilege of participating in a free market where the rich are certainly getting richer, and the poor are to blame.
There are a number of ways of looking at the future, of course - personally, I prefer a place already living many of the suggestions Americans are still dimly aware of as a response to declining liquid fossil fuels. European societies existed long before fossil fuels, and they are likely to exist afterwards. The same is much harder to seriously suggest about the U.S.A.
Local agriculture, for example, is a social question, not a technological one. Technology is only a part of peak oil, though the one Americans tend to focus on it almost obsessively, either pro or con. How much farmland did the last couple of decades of suburban development cost the U.S.? And in a decade or two, do you think anyone will find that a good bargain - giving up farm fields for the hour commute to pay for the mortgage?
Europe has made different long term choices - we will see how they play out.
The Austrian energy companies run hydroelectric reservoirs in the mountains, where off peak surplus energy is stored, by pumping water up into these reservoirs. Base load often from nuclear plants is traded against peak load from these reservoirs. Just as Switzerland or Norway we aren´t dependent on coal or natural gas in our electricity generation.
North America should be the world leader in natural sustainability and biosolar Powerup, but sadly we are the worst. I have posted below my just written reply to Magnus Redin in an old thread for debate by other TODers:
Hello Magnus Redin,
Good for you to live in such a proactive country. =D Hopefully other global leaders are watching and learning.
I agree with you that universal Peakoil awareness would be better than denial and ignorance. Once worldwide awareness of possible Smallpox elimination by 'ring encirclement vaccination' was achieved-- everyone cooperated and mobilized towards this end. I consider this the greatest example of worldwide cooperation and achievement in our entire history!
Thus, the entire world should be treating Peakoil as just another Smallpox [Small-thoughts] outbreak. Proper 'ring encirclement vaccination' requires widespread Peakoil Outreach education, and every leader from local to the national level needs to be encouraging everyone to 'vaccinate' themselves with conservation and lower birthrates.
The US, with the highest/capita energy consumption rate; or the worst 'conservation Small-thoughts' infection rates, should be the worldwide leader in Powerdown to help reduce infectious detritus consumption elsewhere [like China's desire for cars].
The gradual proactive encirclement of high consumption areas by 'innoculated' outsiders spreading Peakoil Outreach 'vaccinations' will finally defeat the terribly harmful infection of ignorance and denial.
To achieve this 'ring encirclement' end, I would not be averse to the President, in cooperation with the AZ governor, to temporarily declare AZ martial law and close the statewide borders to any people ingress or outgress with Earthmarine forces, gradually impose $10/gallon equiv gas prices on all energies, 24/7 TV broadcast of Peakoil Outreach info, and mandate a gradual multi-year shrinkage of shared carry-capacity with outside states to proactively drive ELP Powerdown and biosolar Powerup. This would rapidly reduce infectious ignorance and denial in our Asphalt Wonderland, and instantly jumpstart mutual cooperation to hopefully prevent Nature's Overshoot cull.
When AZ has reached sustainability; is finally clear of Small-thought infection, then 'ring encirclement vaccination' at the next state. Lather, rinse, and repeat till the US is energy infection free. Strength thru Detritus Powerdown and Biosolar Powerup!
Obviously, this is very controversial, but should be considered preferable by all versus having the 'last man standing scenario' and Mother Nature batting last.
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
slight proof-reading oversight: "Lather, rinse, and repeat till the US is energy infection free."
should read: "Lather, rinse, and repeat till the US is detritus energy infection free."
In other words-- we can harness all the truly sustainable biosolar energy we want by PV, wind, tide, hydro, alt fuels, etc-- Biosolar Powerup as far as is naturally sustainable.
I picked Az as the first state because we should be the world leader in PV [endless sunshine], but our cheap energy infrastructure has suppressed this PV growth.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Why not let the market decide who gets to have or keep cars? Once peak oil is widely accepted prices will rise. Many chinese exporters might be able afford a car while many US importers relinquish theirs. (Many think we are rich and they are poor - but, they hold the mortgage. Generally it is the banker who is rich, not the borrower.)
Thxs for responding. Letting the collective market decide is exactly the method used by all past societies to suboptimally collapse into violence and mayhem; the typical Thermo-Gene Collision. As mentioned before by me: Our Genes are not our friends. Can we collectively outwit our instinctive impulses? This is the true test of our vaunted intelligence.
Reg Morrison already has posited that GAS and other genetic drivers are already whittling away at our numbers. Mother Nature has an insurmountable arsenal to rapidly decrease a plague specie. No need to go into the details.
If we collectively are to be Smarter than Yeast then proactive mitigation must be driven worldwide to optimize our monumental numeric decline and retain some vestiges of civilization and other lifeforms. Historians like Diamond, Price, and Tainter, and Geneticists like Reg Morrison, Dawkins, and Darwin strongly doubt our grey matter overcoming our ancient lizard brain. I think we have no choice but to try our proactive best.
Of course, all my various hypothetical scenarios may not be the best answer-- I make no claim for any above average intelligence. But I sure wish some true Einstein genius would propose a plan that the whole world would agree is the best grey-matter path forward.
At least lizards can lose their tails, then crudely consider their next option as the tail regrows. Can Humans afford to lose their collective asses?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
This is symptomatic of a culture meme that runs deep in our society --the ISEP excuse (it's somebody else's problem -- it's einstein's problem).
I'm not blaming you. We all suffer from this cultural embed. There is no Einstein. It's you & me. That's all there is going to be. So we have to figure how to edge the universe towards a new direction. -one yeast cell at a time if it has to be that way :-)
Too bad for the EU, Russia's days of being desperate for foreign cash are over. Russia is about to pay off the remaining $22 billion of its Paris Club debt after cutting it by $15 billion last year. Easing off on fossil fuel exports will help Russia lower inflation.
Current prices for oil and gas are still heavily influenced by the myth that we have decades of easy sailing ahead. I believe Simmons's prediction of a severe production decline in the next 15 years. Realistic prices should be in the hundreds of dollars per barrel of oil and thousands for a thousand cubic meters of gas. There are no substitutes that will arrive in the next 15 years so it is time to get real.
http://news.bbc.co.uk/1/hi/health/4965034.stm
Apparently health of richest Americans about as good as that of poorest Brits. I would suggest this can be extended to most of EU countries and not just UK. they did the study only on white US residents to keep it neutral. I would guess it has to do with instability and change resulting in heavy stress in the individual. we all know that death of spouse, changing jobs or moving cause stress and stress reduces immune system response which reduces health. USA is flexible that is very true and therefore achieves lots of interesting solutions and fast growth but as people having fewer internal cultural barriers to change(like language, geography and tradition) accept almost any change as normal regardless. These changes however are easily imposed/influenced through commercial interests quickly on a continental scale which is elsewhere impossible except possibly in China(which has a historical tendency to switch from isolation to reform every generation or so). If you believe what was written in the book 1421 about the Chinese discovering the New world and everywhere else 71 years before Columbus then going immediately back into isolation you can see that such a quick flexibility has its disadvantages long term. Europe with its competing centers was able to develop through its competition into the center of world culture although China had long before made huge steel ovens, paper, gunpowder and moving print. Competing centers of ideas will remain in Europe despite EU centralist tendencies. This encourages development of new ideas, which will then be copied by others after experimentation or even not. Freedom is relative. When you have no freedom to stop a certain trend like chain stores, mass immigration or whatever you might feel like moving abroad. In USA this is hardly possible. In Europe the national units are small enough so that people feel a bit more connection emotionally, historically, culturally and ethnically to the whole and no reason to change just for its own sake(ss in USA) as they have no inner roots in local culture.
We will never find a single alternative energy source that will replace oil. We will, though, find ways to use a collection of energy sources, technologies, and conservation measures to replace oil. E.g. personal motor vehicles running on electricity generated by wind and solar, large trucks running on biodiesel, and substitutes for oil in making things like plastics will all contribute.
Imagine making plastics from scratch - split water, combine the freed hydrogen with carbon. This is what algae, fueled by sunlight, did way back when.
What we want here is very efficient solar collectors, more nukes, or both.
Oh, that's not true at all. Plant carbohydrates can be used to make plastics/fertilizers. Heck, it's mostly our odd obsession with corn that makes fertilizers a big deal in farming. Feedstocks for plastics are not the big deal. It's the big things, the things that take 80% of our oil/gas use, that are the hard part. That's transportation and heat, for which electricity from wind and solar (and solar thermal) will work just fine. In the long run...it's just the transition that's the problem. That's what Simmons is trying to scare us into dealing with.
Not only do we flush fertilizer down the commode on a regular basis, but also we waste huge amounts of food and vegetable products.
There is research going on that may make it possible to extract NPK from sewage and animal wastes for recycling. We also could do much better in recycling grey water to crops that are not destined to be consumed by humans, like switchgrass, tree plantations, soilseed and fiber plants, and even corn not intended for human consumption.
With some effort and known technologies, I believe that we could reduce the amount of chemical fertilizer usage by quite a bit.
http://www.simmonsco-intl.com/files/Energy%20Conversation.pdf
He's really waving the red flag. On one slide is "By 2020, the current 80+ mb/d base could be reduced to 25 mb/d." Below it says this is based on a 8% p.a. decline rate, presumably starting in a year or two's time. Am I missing something or does he expect total liquids production to fall to that level by 2020? What is the justification for this - terrifying - prognosis?
Starting in 2007 (8% decline), 2020 24.60 mmbpd
I guess in this presentation he is assuming PEAK in NOW - 2006. I don't think he has ever openly said this before, but the numbers he put out there do.
I just did a simple 8% year over year reduction, no curve or other fancy math. (Forgive me if it is too simple)
80 8% 2006 Using 80+ figure from Simmons.
73.6 6.4 2007
67.71 5.89 2008
62.30 5.42 2009
57.31 4.98 2010
52.73 4.58 2011
48.51 4.22 2012
44.63 3.88 2013
41.06 3.57 2014
37.77 3.28 2015
34.75 3.02 2016
31.97 2.78 2017
29.41 2.56 2018
27.06 2.35 2019
24.90 2.16 2020
On another note, Cheney's famous "Peak" speeches seems to indicate that he thinks it will be this bad as well.
I don't presume to have the technical knowledge or graphing expertise of many on this forum. Just thought I would take a stab at it.
=========It's all about population!