DrumBeat: August 11, 2006

[Update by Leanan on 08/11/06 at 9:15 AM EDT]

A computer scientist explains why computers won't be sustainable in the Post-Carbon Age, and offers some suggestions on peak oil and the preservation of knowledge:

The fragility of microprocessors

A project to preserve knowledge may be unable to continue in an unstable society beset with power outages, hunger, and crime. Once rationing and shortages begin, agriculture and other essential services will receive the most energy. Scientists will be unemployed. It is very likely that resource wars will erupt all over the globe, so the military will be taking a large portion of the dwindling energy resources as well.

The time to begin is now, before we begin the inexorable retreat to wood as civilizations’ main energy source.

[Update by Prof. Goose on 08/11/06 at 12:13 PM EDT] Here's a story just out on MIT's Energy Manhattan Project.

BP will try to keep half of oil field open


The IEA says World can cope now with Alaska, Nigeria oil loss


Ford heralds the demise of the SUV

Large sports utility vehicles (SUVs) will go out of fashion because of environmental worries and demographic trends, a top Ford executive has said.

Mark Fields, who runs Ford's US business, said consumers would move away from SUVs to smaller cars in what he characterised as a "tectonic shift".


The Economist takes on Really Big Oil: Sluggish behemoths control virtually all the world's oil; they should be privatised.


U.S. Lists Places Where It Could Force New Power Lines

The Energy Department took the first step on Tuesday toward designating parts of the nation’s electric grid as “critical congestion” areas, which could force New York, New Jersey and other states to allow construction of new power lines that they do not want.


Now I know we're in trouble: In warmer world, even Inuit buy air conditioners.

I know we beat the hell out of GM but I think it's well deserved.  Nice to know they're bringing back a car that just 4 years ago didn't sell, oh and it will be available in 09 probably.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&a mp;cid=1155246610543&call_pageid=968350072197&col=969048863851

"Oil prices will likely stay in the $65 (U.S.) a barrel range for the next year or so," said Carlos Gomes, senior economist and auto industry specialist at Scotiabank. "I think it will be somewhat of a head wind for the muscle car segment."

"Camaro is much more than a car," he said. "It symbolizes America's spirit and its love affair with the automobile."

Insiders say the Camaro could be a "halo car" that would help attract customers to other GM models and boost overall sales.

"In that way, it could be very significant for GM," said DesRosiers.

They're going to turn it around with this don't you think?

America needs to fall in love with something else, like trains, for example.  
America needs to fall in love with her own two feet ..... oops haven't seem them in a while!
Orthopaedic surgeons stand to make a lot of money if Americans decide on running as a commuting method. After all, a mile of running is a mile's worth of bodily wear and tear. Those miles really do add up. I already have a blown left knee from a lifetime of high-speed walking. Ny right leg, which is now favoured is showing its wear and tear with a seemingly permanent pulled muscle. It's a trade off, Do you give your money to a cardiologist or the orthopaedic surgeon as you shred your lower body?

While people in Kenya might have evolved to run marathon-like distances to commute, European type white people have not. That's why we invented cars in the first place. When a runner-commuter can no longer commute what are they supposed to do? Blow themselves up like a Palastinian? When cars are too costly to use, that's what public transit or motorbikes are for. When that gets too expensive, the bicycle will be the method of choice. But something like running 10 miles each way is all but out of the question due to bodily wear and tear. Sure, you'll lose weight that way, but the mileage on the lower body is not worth it. Are you ready to shred your legs to commute?

I doubt evolution has much to do with it, it's a result of lifestyle and not being accustomed to it.  We've only been developing alternatives to walking for a short period of our history.  It's not long enough that we could have evolved away from being able to walk/run.  When people get older they naturally have problems.  It's not just reserved for Europeans by any means.  
Not to mention: why would we go back to walking?  I'm pretty sure a bicycle would still work just fine, and it's probably better for traveling long distances.  
Detroit seems resigned to producing "nostalgia toys" for middle-aged men with a few bucks to blow.  My advice would be to package these things with 8-track tape players, a color-coordinated pot pipe that slips neatly into a slot in the ash tray, and an inflatable "girlfriend" complete with hip-hugger jeans and long, bandana-bound blond hair.
Inflatable "girlfriend" is so 70s.

Let's offer the soft-sided middle-agers the new and improved Sony Sex Machine that never says no.

One way to reduce the population as these noobs crash and burn in ecstasy.

That's so funny -- and so true. Nothing says 'peaked in high-school' like a Camaro.
My senior year I had a 97 Z28 slightly used but FULLY loaded, but an automatic.  Following high school I dumped it for a brand new hyundai tiburon with the 5 speed.  College was a bit farther drive than high school.  There were only like 3 cars that could beat that small block V8.  It WAS fun though.
I greatly prefer the Automatic over the Stick. I tried a Stick, but I'm not co-ordinated enough to use it. The Automatic nicely allows for the "just sit back and fly" type driving expierence. Since motorcycles have a "Stick" my poor coordination sank that try. :( The first gear is awful herky-jerky! So long as a vehicle has the Automatic (or if it's a jet) I'll gladly drive it.

The trick of The Stick is that while it will give better fuel economy, it takes some coordination on the part of the user. The Stick was invented becuse the internal combustion engine runs best at one RPM speed but a car must be able to go from zero to a desired speed. The electric motor is a lot better match than the car engine. The innovation with the hybrid comes with how the controls are like a normal car with an Automatic. Previous attempts were always with extra switches or the like that'll require the new owner having to learn them, like that Stick.

The thing about the Stick I don't like is the bit with having to do the clutch. The Automatic has that "fluid clutch" thingy which causes it to act like the case of boating. Step on the gas, and you get the desired thrust. Step off, and you glide. A zillion times easier than messing with a clutch and a hand on the gear shift! I would end up preferring a British side drive car in the case of having to do a Stick instead of an American side drive Stick car. That's becuse I drive with my right hand on the teering column.

I had a '95 Camaro, 275 HP, 325 LB torque, 6 speed stick.  It was fun, and scary fast.  I remember saying to the salesperson that I didn't dream in my 70's high school days that I'd be able to buy a big V8 20 years later.  The future seemed different back then.  I guess, in retrospect, mid-90's gas prices lulled me into thinking they had found more oil after all.

Interesting that they finally went with an independent rear suspension on the whole Camaro line.  The solid axle would stick pretty good on smooth surfaces, but hit a pot-hole near limits of adhesion ...

Anyway, on the other side of the coin,

GM, Daimler, BMW Will Spend $1 Billion on Hybrids

I think they want to sell a few more Camaros to the poor dumb SOBs (like me) who think they had found more oil after all ... when they wise up, maybe they'll have hybrids.

odograph, we've all been there. When I recall the nights I spent pointlessly tooling around town burning GTO (gas, tires, and oil) like there was no tomorrow, I feel my facial muscles draw up in an involuntary grimace. Good thing we grew up, eh?  Hope it wasn't too late:-)
I spun my touring bicycle (w/ nobbies and panier) up to 22 mph (22 mph!) to pass some kids last week.  Funny how you can get the speed outlet in the 20 mph range, and do the body some good.
You might like to have a look at
http://www.swizzbee.ch/

Especially if you live in a hilly region.

odograph, I've been doing the same.  A couple of years back, I dusted off my trusty Shogun touring bike and now bike to work as often as I can.  It's a great way to fend off old age.  I highly recommend it.

Siggi, that looks pretty good. Do you think I could add an auxillary seat to accomodate my inflatable "girlfriend?"

Hmm, I am afraid she might fly away.
my work bike, it sees about 15,000 miles a year

http://home.columbus.rr.com/pedex/000_0110.jpg

pretty typical of what us messengers ride these days, just meat and potatoes, its all business

A fixie!  I don't think I could do it .. old dog, new tricks.
actually its both fixed or singlespeed with a freewheel, just flip the rear wheel around

at 40 yrs old im the oldest guy here still slinging packages

Pretty neat!  I had read something recently about messengers preferring singlespeeds.  Seems a good choice in town but much of my commute is over hilly terrain.  
Well, once youve been riding regularly for quite awhile gears really dont help much cept for racing, I just got back from watching the state criterium championships here, put in about 65 miles today on that bike. Unless the hills are over like 12% and/or more than about 2-3 miles long its really no big deal.

The reason we like bikes like that is its harder to break something, although stuff still breaks, just not as often as with a geared race bike.

"Unless the hills are over like 12% and-or more than about 2-3 miles long its really no big deal."

Got that, the other, and both at the same time.  Plus the real beauty...gravel roads.  So I require both a decent set of gears and fat tires.

Those damn bike messengers. I once had one damn near run me over in downtown Chicago. They sure get crazy! You'll have to be pretty crazy to take up that job, so the rest of us have to give them credit, since it's due. Better to be almost run over by a bike messenger than some idiot yuppie's horse-sized dog.
Sweet ride Pedex!! Everything that should be there, nothing that shouldn't.
Amusing... I still have a '95 Camaro.  I drive it about 500 miles a year and it still gets 27 mpg.  No more cruising in this car, it's lucky to make it to hardware store with the amount it's driven.
GM will turn it around, when the Cubs win a World Series. For nearly a decade, I have asked Cubs fans this question:

Which will happen first? The end of global civilisation? Or the Cubs winning a World Series?

My bet is the collapse of civilisation first, with 1908 being the last time ever for a Cubs World Series success. The above question is a no-brainer for any peaknik. Some time down the road, Wrigley Field will be a ruin like the Roman football stadium in the middle of Roma. And the Cubs will still be without a championship like the White Sox have before the "end of days".

Just a fun fact for the doomers in the TOD crowd. :)

ASPO critique of the most recent Cambridge Energy Research Association Repot at the Energy Bulletin

"The global consumption of oil is now around 31 billion barrels per year and the discovery in 2005 was only 8.95 billion barrels according to CERA and they show that the average world discovery rate the last 11 years is 11.5 billion barrels p.a.. The bulk of these discoveries comes from regions that were opened up for exploration after the collapse of Soviet Union and from exploration in deep water. We can now see a decline in the discoveries in these regions and we expect that this decline also will give an overall decline in discoveries worldwide."

http://www.energybulletin.net/19120.html

But what about reserve increases in existing fields?  Focusing only on discoveries seems a hollow critique.
 It's like Mr Deffeyes says,"You can't put reserves in the tank of your car."
 I agree with him that it's actual production that counts.
But the ASPO critique is not based on production numbers per se, but on the differential between discoveries and production.  Their argument is that we're consuming more rapidly than we're discovering; ergo, we are going to run out sooner than CERA is projecting.  Discoveries, however, are a single source of reserve increases.  ASPO does not once mention reserve increases in existing fields, a substantial contributer to reserve increases.  

That's why the critique is incomplete.

"More things can be said about the report, but it is obvious that it is not worth $2,500. Part of the report is based on data not open for the public and the obvious reason for this is that CERA seek to make money from this hidden information. Oil production figures and data on reserves are of greatest importance for the global future and these should be available in the public domain as is the case in Norway and the UK."

Closing sentence of Prof. Alekletts critic

JCK,
 I'm not sure that reserve increases are a good indicator of future production. There is a lot of anecdotal evidence that indicates reserve information is a very poor indicator of future production because it is often manipulated.
 Also, we may see large revisions down in reserve data. Royal Dutch Shell oil revised theirs down a couple years ago, I think by a large % of their total reserves and Kuwait has acknowledged that their reserve estimates may be inflated by quit a bit.
 All of OPECs reserve estimates have been questioned and more transparency in how they estimate reserves has been asked for but I don't think the Saudis have been forthcoming with answers or clearer info.
 That may be why ASPO focusses on discoveries as a predictor of future production instead of reserves.
 Your question is fair , I don't have a definitive answer.
 
From what I can tell most of the OPEC reserve increase are actually camel dung accumulating on top of the field. There waiting for advances in CDTL ( Camel Dung To Liquids ) before they announce to the world the true nature of the large upward revisions in reserves that they have claimed. SA for example believes CDTL will provide them a 2 million bpd cushion in production.
But what about reserve increases in existing fields?  Focusing only on discoveries seems a hollow critique.

I am sorry JCK, but were you under the impression that reserves in the ground actually grow? I know oil companies sometimes, or used to anyway, periodically, upgrade their reserves due to deliberately low-balling their guesstimates in the first place. However this was a practice of publicly owned companies. Nationally owned companies change their reserves for different reasons, as did all OPEC nations in the 80s. They upgraded reserves for quota reasons. But existing reserves do not grow.

Shell, in 2004, had to downgrade their reserves because they had originally overestimated them. The Shell downgrade, in my opinion, marked the end of so-called "reserve growth". We can now look forward to "reserve shrinkage". OPEC reserves are way overestimated, perhaps by as much as 50%.

This is a terminology issue.  I am not advocating abiotic oil, but your statement that existing reserves do not grow is technically incorrect.

Oil in place does not change.  A fraction of the oil in place is classified as reserves, which is the portion which is expected to be produced, based on various (geology, economics, etc) models. Usually over time, greater portions of the oil in place are converted to reserves, and the reserves numbers are accordingly revised upwards.  

BP provides a good explanation of the terminology here.

http://www.bp.com/sectiongenericarticle.do?categoryId=9009529&contentId=7017933

So, in a given year, typical x amount of oil is discovered, and y amount of oil is converted from oil in place to reserves.  ASPO's critique is based solely on the former number, which is my original point.

Whether or not OPECs reserve numbers are correct is a completely separate issue.  

JCK, this is what I think you are talking about. There are two factors here; I will cover them one at a time.

The ratio of reserves to oil in place for a given field is often referred to as the recovery factor. The recovery factor of a field may change over time based on operating history and in response to changes in technology and field economics. The recovery factor may also rise over time if additional investment is made in secondary recovery techniques such as gas injection or water-flooding that augment the natural pressures within a given reservoir.

Yes, over time, water flooding and gas flooding increases production but there no evidence that this actually increases the amount of oil that can ultimately be recovered. Cantarell, in Mexico is a good example. Gas injection drove the production from about 1 to 2.1 million barrels per day. That did not increase the UUR one iota however. Of course water injection increases the amount of oil that could be recovered without water injection. But we have been injecting water in wells for perhaps half a century. All current reserve estimates are based on the exception that water will be injected, as in the vast majority of cases, it already is being injected. In fact, Saudi now starts injecting water right from day one. The Haradh 3 section of Ghawar came on line in February and started immediately injecting 520,000 barrels of seawater per day to produce 300,000 barrels of oil.

My point is JCK, all these things have already been figured into the mix. Probable reserves already include all these things.

There is an observed tendency for recovery factors to rise over time: another aspect of reserves growth and a major factor behind increases over time in estimates of ultimate recoverable resource made by organisations such as the US Geological Survey.

This is a sticky point. If you had been following the Peak Oil debate over the last six or seven years, as many on this list have, you would understand. A little history is necessary. The Securities and Exchange Commission will penalize a company for overstating reserves. It also plays havoc with the stock price if a company must downgrade estimated reserves. Therefore it has always been the policy of all publicly listed oil companies to understate reserves. Later, as they got a better handle on actual reserves of a given field, they could gradually upgrade them. This created the illusion of what the USGS calls "Reserve Growth". However this was always only a phenomenon of publicly listed companies only. And also, as Shell proved in 2004, it is largely a phenomenon of the past.

In the past decade, except for new discoveries and accusations, reserves of companies simply have not grown. They have already drained all they can get out of upgrading the reserves of all their large fields. These reserves are now shrinking, as would be expected when one pumps the oil out of them.

And, the past reserve growth of OPEC countries is not a separate issue. Reserve growth advocates point to OPEC's reserve growth as an example of how reserves grow over time. But only an elementary examination will show that there was no real growth in OPEC reserves. OPEC announced in the early 80s that each country's quota would be based on each country's proven reserves. This prompted each country to dramatically increase its reserves, doubling them in some cases.

There is little to no chance that current reserves will grow. They have all been milked for all that can be gotten out of them. All future growth in a companies or a nation's reserves must come from new discoveries.

From CERA's press release:
"During 2000, unconventional liquids represented 16% of global capacity, and by 2006 this had grown to 24% of the total," they write.  "We expect this strong growth to continue to over one-third of total global capacity (38%) by 2015, especially if E&P companies believe that the oil price will remain high."

88.7 mbpd - 24% = 67.4 mbpd. This is close to the ASPO estimate for regular oil for 2005. Anyone know if CERA is using the same definition of conventional liquids, i.e. total liquids minus tar sands, deep water and natural gas liquids?
CERA's 2006 update projects a short-term rate of capacity growth in 2005/2006 which is slightly lower than its May 2005 report as a result of slower Canadian oil sands expansion, a lack of capacity growth in Iraq, new project delays in Iran, political difficulties in Venezuela, lower growth in Russia, lower North Sea performance levels and hurricane-related difficulties and project delays in the Gulf of Mexico.
Excuses, excuses, excuses

We see much of the lost ground being made up by 2010, along with an increase of about 4 mbd in our global estimate by 2015, with the inclusion of GTLs in the outlook along with new discoveries and existing field reserve upgrades in non-OPEC areas
I see, maintain your prediction by adding in another category of liquids. Next time will CERA be adding in CTL?

Light vs Heavy Crude

Contrary to what seems to be a common belief, the overall proportion of lighter liquids is expanding faster than heavy and extra-heavy crudes, according to the CERA report.  Although the market seems to be very focused on heavy and extra-heavy crudes, there is a strong trend toward an expanding stream of light crude, condensates and natural gas liquids (NGLs).

Jackson and Esser's analysis indicates that extra-heavy oil productive capacity will more than double from approximately 1.9 mbd in 2006 to 4.7 mbd in 2015.  However, this increase in dwarfed by a four-times-larger rise in gas-related liquids capacity, from 15 mbd to 26 mbd during the same time frame.

No need to admit to a peak in light crude oil, just substitute gas-liquids.
This is a question about reserves.

A while back Stuart did a post about reserves.  The OPEC reserves were the usual flat with a couple of delta function increases in the recent past.

The non-OPEC data was more interesting. Generally the reserves have kept increasing, then flattening out over the last 5-10 years.

My question is, how can this be?  We've been pumping out a lot more oil than we have been discovering, especially over the las 5-10 years.  So what explains the small rise/plateau in reserves?

It seems to me the answers must be some combination of technology and price.  I'm skeptical of the price angle since as recently as 2000 the price of oil was near historic lows.  There was no noticeable dip in oil reserves due to the lower price (which would presumably make some formerly economical deposits uneconomical to recover).

Finally, I find it difficult to believe that technology can really make up the huge difference between recent production and recent discoveries.  But I suppose it's possible.  Any light anyone can throw on this situation would be greatly appreciated.