DrumBeat: June 30, 2006
Posted by threadbot on June 30, 2006 - 9:30am
Topic: Miscellaneous
Energy analysts and geologists have estimated that tapping the outer continental shelf would delay by five to 10 years for oil and 11 to 19 years for gas the day global reserves reach their apex and forever start to decline.Kenneth S. Deffeyes, a retired Princeton University professor and former geologist for oil giant Shell, has said drilling in places such as the eastern Gulf would "only postpone the bigger problem."
The bill assures "a continued addiction to America's petroleum diet," complained Rep. Nick Rahall, D-W. Va., adding that the legislation benefits only "the merchants of profit and power."
Do you believe, as some predict, that we are going to run out of oil within fifty years?It's a sophisticated debate between the geologists on one side and the economists on the other. But the debate over oil reserves misses the point. We have more than enough oil, not to mention coal, to completely destroy the habitability of the planet. The real constraint on oil and coal is not supply, but global warming. There's a saying: "The Stone Age didn't end because we ran out of stones. And the Age of Fossil Fuels won't end because we run out of fossil fuels."
The fact that oil is beginning to get more expensive more quickly will contribute to the realization of how dysfunctional our current pattern is. Take the tar sands of western Canada. For every barrel of oil they extract there, they have to use enough natural gas to heat a family's home for four days. And they have to tear up four tons of landscape, all for one barrel of oil. It is truly nuts. But you know, junkies find veins in their toes. It seems reasonable, to them, because they've lost sight of the rest of their lives.
From Al-Jazeera: Oil may fuel Sino-US conflict
From Newsweek: The Politics of Pipelines
Yes, the hoary Great Game is back, pitting Russia, the United States and Europe in a tug-of-war over energy.Petro-hysteria grips a superpower:
High oil prices, political instability in oil-producing states, the rise of energy-hungry China, jihadist terrorism and the return of "resource nationalism" are factors constantly cited in Washington these days as evidence that national security is being undermined by unrestrained consumption of oil. Petroleum, once seen as the energy source that fueled the "American century", has more recently been interpreted by some legislators, policymakers and pundits as the Achilles' heel of global dominance.Oil spill in La. leaves ships stranded
From Iraq: Oil exports boom as attacks on pipelines cease.
High fuel prices make fishing unviable option in Vietnam
China Increases Power Prices to Counter Coal Costs
Argentina Agrees to Pay Bolivia 47% More For Gas
Japan to Start Receiving Sakhalin Oil, Cut Middle East Reliance
The high cost of filling delivery trucks forces a major food bank to consider reducing its reach.Study shows global warming may not lead to greater crop yields
MapMuse is offering maps of alternative fuel stations.
Update [2006-6-30 13:25:47 by Leanan]: From UPI: Analysis: How much oil do Saudis have? Mentions ASPO and Colin Campbell.
More oil flowing from Alberta to U.S.
CALGARY—Recent expansion of the pipeline network linking Alberta's rich oil sands to the U.S. is fuelling a big increase in cross-border exports of Canadian oil — and easing any lingering U.S. concerns that much of Alberta's oil will flow to China.
From the BBC: The petro-rouble?
We'll see if it gets through the Senate.
Merrill Lynch raises 2007 oil price forecast 38%
Fiscal crisis for Mexico as oil starts to dry up
Robert Collier, Chronicle Staff Writer
Friday, June 30, 2006
Excerpt:
Situated in the hot, swampy lowlands of southeast Mexico's Tabasco state, the Bellota complex was built in 1992 and remains one of the country's most modern petroleum facilities. But daily output from surrounding fields has fallen to only 35,000 barrels of oil, about one-quarter of the average during the 1990s, said Rodriguez, the oil-field boss.
The nation's largest producing area, the Cantarell offshore oil field in the Gulf of Mexico, is facing a similar decline, though on a much larger scale. Its current production of 2.1 million barrels per day -- which makes it the second-largest single oil field in the world, after the Ghawar field in Saudi Arabia -- is expected to fall to anywhere between 1.4 million and 520,000 barrels per day by 2008, according to government estimates.
If the worst-case projections turn out to be correct, Mexico's oil exports to the United States could decline by as much as 1 million barrels a day from its current 1.5 million.
IMO, this is where most of the current demand destruction is going on--in developing countries. However, the developing countries are just offering us a glimpse of our future.
I predict that we are going to see the following cycle over and over again: (1) a reduction in exports; (2) an auction as reduced exports are allocated to the highest bidders (and the low bidders are forced to reduce consumption); (3) a period of stability, and then the cycle starts all over again as lower exports trigger another round of bidding.
I think that we had the first cycle this spring, and I think that we are starting another cycle right now.
As I have endlessly pointed out, the recent rebound in total US petroleum imports (after being down every week of 2006, from 12/30/05, on a four week running average, until 5/26) does not mean that imports are up everywhere, e.g., Vietnam.
I think there was a cycle last summer when the oil price topped out in the mid 60's. I remember reading about some countries cutting imports and/or reducing electricity generation using oil. Nicaragua was mentioned IIRC.
As I drive around the country Ive noticed several things that make me wonder about the existence and breakdown of demand destruction.
There seems to be incredible infrastructure being built, highways repaired, new pipelines being put in, etc. At the same time, the average american appears to be tightening his/her belt. People are driving, but being extremely tight in their discretionary purchases (at least anecdotally). I see the more 'upscale' restaurant parking lots off the highways (Cracker Barrel, TGIFs, Chilis, etc) relatively empty while the cheaper fast food places are full (Burger King, McDonalds, etc).
Is it possible that industry is using more energy (because of inflation, and lower net energy available they have to spend more energy, and therefore dollars on just keeping up) and at the same time the non-industrial use is dropping due to higher prices? We could be witnessing true demand destruction as theory predicts, but this drop in demand is being more than offset by higher energetic fixed costs of corporations and industry, making demand overall quite robust in the face of higher prices?
I will research some stats on the
There is no evidence of slowdown here in NE Atlanta. People in their big SUVs still barreling long on GA-400 at 80mph+, restaurants still packed every night with waiting, and they are still buying the 3500sq ft plus mcmansions.
Also I frequently hear from my public assistance patients that they are trying to plan all of their medical tests and doctor visits on the same day so they only have to come to town once a month. These are the poorest of the poor. But if the lowest 5% reduce their driving by 20%, the overall effect is a 1% reduction in the rate of growth.
Among middle to upper income people, there hasn't been any demand destruction around here. Everyone in Ohio who can afford it is still taking their annual beach vacation to the Carolinas.
Colorado is a particularly acute case. The recession hit harder than it did in most states, and the TABOR restrictions kept revenues from rebounding when the economy began to pick up. Some TABOR relief was granted in last November's election, allowing the state to roll back some of the budget cuts that had affected road construction. There seems to be significantly more construction here, on bridges in particular, than in the past few years.
Your observations are very close to what I've seen as well. Although I have to say my impression is that commercial and retail development is overwhelming any real infrastructure improvements in my part of NY. The bridges and roads etc are overhauled at a snails pace but when it comes to throwing together yet another strip plaza, box store, or restaurant pad... well those go up in very short order.
I drive by these projects and each day shake my head more frequently - and I just keep thinking that it's all about being blissfully unaware. I can't for the life of me figure out how all these restaurants and stores - very few of which sell anything very original- make it. Who is shopping and dining at these places when there is such an overwhelming number of choices ?
I know that this isn't any kind of revelation for anyone at TOD but I continue to be ever more amazed at the complete disconnect with reality out there. I just keep thinking as I see these projects start, progress, and be completed only to have others take their place - what a waste of energy - all of this has no future - we need to be expending this energy on something useful for the future and this is most definitely not it.
It's the circle of growth.
Rampant comsumerism -> Obscenely Massive Piles of Debt -> Irrational Monetary Growth (FED/M3) -> and back to rampant consumerism.
And the circle keeps on rolling. Build more, eat more, spend more, burn more...wait...what do you mean there is no more!?
=========It's all about population!
"I just keep thinking as I see these projects start, progress, and be completed only to have others take their place - what a waste of energy - all of this has no future - we need to be expending this energy on something useful for the future and this is most definitely not it."
ummm, there's the rub isn't it? People still have to live and plan their lives. They need houses, food, jobs, and as long as they still have cars and trucks, highways and roads. If building what the American people need to live their lives is "not it" as far as useful goes, then we have to replace it with something that is "it"?
What would that be? Getting people to plan for a different future relies on an answer to that question. Right now, if you put 5 very "energy depletion" aware people in a room, and tried to get them to agree on even a short set of forward otions, my bet is that you would leave the room with at least 5 wildly differing sets of recommendations.
Roger Conner known to you as ThatsItImout
Where I am in Central Kentucky is baffling beyond words. In a state well known for decades of lack of development, all of a sudden, everybody is building.
In Hardin County, we used to be surprised to see a neighborhood being built that was ten or twelve houses at a time. Now, the builders descend in with huge crews and equipment, and build FAST. I have seen 3 or so sixty or seventy home developments in the last couple of years shoot up. I figured, well, that about fills this market, more building that we have seen since the early Reagan years! WRONG. On my route to work, they are new tearing up three huge areas all within 3/4 of a mile of each other and about that distance from two of the current developments, preparing for three more (!!)
There has been a new Super Walmart built, followed immediately by restuarants, strip mall up the street, office parks, two new call center facilities.
It seems as though after decades of sloth, even slow old Kentucky has finally decided to join the building race, and can't get enough. The size of trucks and cars only seems to get bigger, with driveways in some cases now having mulitple SUV's (!!!) In a state with one of the lowest per capita incomes in the nation, I cannot even guess where all the money is coming from.
And frankly, what few people have heard of Peak Oil, oil depletion, or Gore's global warming simply dismiss it out of hand as another Y2K type hoax, and show zero interest.
Roger Conner known to you as ThatsItImout
Printing presses?
We notice a huge decline in the weekend warrior traffic in our neck of the woods. Also the motorhomes are not out like they were on the freeways like they were a couple of years go.
Drive up coffee places still in bussiness so the wife says all is fine(so far)
Just enough fish to pay expenses and make a bit.
Higher fuel prices will slow fishing significantly. The fish population will rebound and fish "density" will increase. Morfe fish caught/hour and probably more caught in toto.
A new, higher equilibrium will be established, until fuel prices go up again.
Oddly, I see this as a long term "good thing" but very tough short term.
The Icelandic cod quotas are trending slightly upward. The Icelanders claim, with some pride, that they have the best fisheries manageemnt in the world. They fought and won two "Cod Wars" with the British Royal Navy for that right to manage their fisheries resource.
The Canadians (and to a lessor extent the Americans & Brits) badly overfished cod until it crashed. A decade or longer total ban on fishing might bring back cod stocks, or the ocean ecosystems may have found a new balance without a place for cod. Other species could fill that niche.
The overfishing of herring, which crashed and was the impetus of the Icelanders to fight for their national survival (if those utlangur fish our cod as badly as they did our herring, then we are doomed !). Their fears of overfishing by the others seem to have been justified by recent history.
OTOH, what is happening in 3rd World countries is that they are fishing "what's left" in many cases for local consumption. "What's left" has not crashed (recently, likely it did when diesel fishing boats first appeared), just the fishing pressure is declining. Reduced fishing pressure should allow "what's left" to become larger and more numerous and future fishing to be more productive.
... I worry that what's left (also after a few decades of bottom trawling) is going to be a pretty warped biosystem.
* - yes, I enjoy certain jellyfish species when they are on asian menus.
Westexas and others posted a story repeatedly about Thai fishermen who couldn't fish because of high fuel prices. Reading carefully the main issue was the removal of a government subsidy for fuel.
I think most of us agree that removing subsidies that encourage excess consumption is a good idea. And none of us should be surprised that affected groups, particularly political elements such as fishing associations, will protest this removal of their benefits.
I live in Thailand and know that case well. The fishermen did protest for one day and got media attention. The government wisely stuck to their guns. The fishermen went back out.
Thailand never suffered a fish shortage and fish prices never rose.
I think this kneejerk reaction that sees any inability to access any energy anywhere is proof of peak oil shows bias overriding analysis.
that-as-our-strategy kind of strategy. One of their methods is the "broken record"/repeat some bullshit enough times and it becomes the truth in the minds of zombies method.
We know this works. The Republicans perfected it. Starting with Reagan.
Anyway, I have to live with these people. At least you are free from that. Keep clear-headed, it is our only hope as a species.
(For the record - it's driving me nuts, too.)
You guys are arguing over the symptoms--signs of reduced consumption and power outages in third world countries and import/export numbers.
But these are just symptoms. The disease is Peak Oil and the expectation of infinite growth rate against a finite resource base.
Based on Khebab's HL plots, I predicted, in January, that we were facing an imminent problem with net export capacity.
Since January, based on EIA reports and admissions from the Saudis, world crude + condensate production is down by 1%, and the top four net oil exporters are all down versus December. This is the problem. Everything else is just a sympton of the problem.
Where do you think that demand destruction will show up first: developing countries or the US?
http://www.theoildrum.com/story/2006/1/27/14471/5832
Excerpt:
"As predicted by Hubbert Linearization, two of the three top net oil exporters are producing below their peak production level. The third country, Saudi Arabia, is probably on the verge of a permanent and irreversible decline. Both Russia and Saudi Arabia are probably going to show significant increases in consumption going forward. It would seem from this case that these factors could interact this year produce to an unprecedented--and probably permanent--net oil export crisis."
I wrote this in January (this is actually the edited version, my version was more definitive). Since then the EIA is reporting that oil production in Saudi Arabia, Russia and Norway is down since December, with Saudi Arabia admitting to a 5% decline since December.
Everyone knows what my views are. My question is what are your specific predictions?
Again, the central point is Peak Oil, and IMO, peak net oil export capacity. What continues to amaze me are the number of people predicting rising oil production when the four largest producing oil fields in the world are almost certainly declining. Sure there are a lot of smaller fields, but a lot of those are declining too. How many smaller fields do you have to find to replace Ghawar and Cantarell?
But there appears to be an innate defense mechanism common to many in the "advocate" wing of TOD. Any question over any detail is taken as an attack on peak oil. Minor peak oil minions like BrianT can be counted on to first compare any dissenter to Dick Cheney, then try to avoid arguement by suggesting the very question is preposterous, before falling back on what they do best, the insult.
For the record, I don't dispute your contention that it is going to be near impossible to replace the declining giant fields. I don't have have the time or the tools to question your depletion models. I have been taking them at near face value and they have influenced my thinking.
But that doesn't mean I have to accept everything else that you say on every topic, nor that every discussion needs to flow back through the depletion models.
You have made some bold asertions about the impacts on humanity of these declines that I am not convinced by. I have doubts about the propensity of oil exporters to hoard and don't think that every light bulb going out in a third world country is a smoking gun that consititutes proof of peak oil.
I will continue to challenge those points. I will be equally happy of I am proven right or wrong because I am looking for answers, not trying to evangelize. None of this indicates a lack of respect for you or your arguements. It is not an effort to win intellectual points. I do hope you will engage on these isues as I think it would strengthen your agruements and enhance your credibility. If you won't, I can't make you.
No fishing = less food. less food = ?
I think it will be all too easy for the rest of the world to look at the US with anger and resentment because of our fuel use.
My question for futher discussion on TOD.
What group or groups will take it in the shorts. By this I mean who will get fingered for causing the problems that we face. People are more rationalizing than rational. Will they blame - terrorists, illeagal alliens, bussiness owners, jews, blacks, who is going to feel the heat? The Chinese( My God! They are using "our" fuel).
We do have a supremecy problem in the white house. So far this is counter productive to getting solutions.