DrumBeat: August 9, 2006

[Update by Leanan on 08/09/06 at 10:02 AM EDT]

When Oilmen Turn Sour on Crude

Bringing down Energy City, from within: Former oilman Jeffrey Brown and activist Nan Hildreth have been spreading the Peak Oil message. They're part of a Peak Oil mini-conference this Sunday in Houston.

Rebels blow up third Pakistani pipeline in a week


Tracing the trail of the NYRI high voltage power line


BP readies oil tanker spree after Alaska outage


Poll: High gas prices lower driving time


Worries rise over pipeline reliability


We're saved! Russian Researchers Say Rains Boost Oil Reserves

A group of Russian scientists at the oil and gas research institute of the Russian Academy of Sciences, led by Azary Barenbaum, have come up with a new explanation of the nature of oil and gas formation. They argue that huge reserves of hydrocarbons may take only decades to be formed, not millions of years, as earlier believed.


[Update by Leanan on 08/09/06 at 12:06 PM EDT]

According to the EIA's Weekly Petroleum Inventory Report, crude oil, gasoline and distillates all fell more than expected.


We're saved, part 2: Wal-Mart wants to sell ethanol

has natural gas in the USA peaked?
I'm in oil and gas exploration and I don't think that natural gas has peaked. But I'm not a cornucopian, and I feel that it is very unlikely that we can replace oil or coal with increased natural gas production. But it should be a significant help, one of the silver BB's.
  Higher prices make gas at deeper depths economic, as well as gas from "unconventional" sources. But, its not cheap.
Conventional gas has peaked in US. Total gas has been approx flat for years. Nat. gas outlook 2006
Shipping half of the GoM off-shore rigs to the Saudi part of the Persian Gulf will not help future US NG production.

The lost rigs may tip the balance on future domestic US NG production.  Either to a steeper decline (my guess) or the delta between a flat to slightly rising production vs. modest declines.

That is very odd. Why need off-shore rigs if you have 2 mbd of Daniel-Yergin-spare-capacity? And if you insist like the Saudi's do that you have no production problems? Land based production, that is.

I think it was discussed before on TOD but this is a clear indication of where SA production stands now.

Most of the rigs that are being moved to Saudi are rigs for shallow Gulf waters, which have been pretty well explored. Our illustrious government has just opened the deep waters in most of the GOM to exploration, and the Gulf is prone to gas production. There are not enough drill ships to handle that acreage and the lease sales are just beginning.So once again I will get to operate my perfect 20/20 hindsight in five years or so, but I think prospects of increased production are pretty good.
US Natural Gas production peaked in 1973 and reached a secondary but lower peak in 2001.

http://tonto.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_NUS_m.htm

This is the monthly figures but change to "Annual" then click under "view history" for either "Gross Withdrawls" or "Dry Production" for yearly totals. Both are way past peak.

Its hard to draw conclusions about a peak just from production data. There is very little storage of gas and it is all consumed domesticially.Also, gas wells typicially have a 75% decline rate after their first year, so production is pretty much what producer's can sell and reflects the prior couple of years drilling decisions together with demand which can vary with switching to different fuels in power plants..
  Right now we are in a drilling renaisance in natural gas domesticially. The practical economic production depth has expanded to about 20,000 ft. from the 12,000 ft. of 20 years ago, and we can now drill high temperature reservoirs. In addition non-conventional gas has become economic. With "bright spot" 3D seismic the economics have changed
  I respectfully think the jury is still out on a natural gas peak timing. This doesn't mean I think that it is limitless, I just think we may not be at peak yet.
Production per well has fallen since 1999.
The US Army Corps of Engineers seems to think that the US natural gas peak has come and gone.  Their published report from several months back stated as much.
ASPO Newsletter 68 (August 2006) is now available:

https://aspo-ireland.org/Newsletter68.pdf

Articles in this newsletter:

  1. When will they ever learn ?
  2. People Eat {dhtmled1:Newsletter68.pdf}
  3. Country Assessment Series - United Kingdom revisited
  4. Regional Assessment- AFRICA
  5. Ireland begins to formulate a post-Peak Energy Policy
  6. Brilliant Australian Peak Oil Programme
  7. Nomenclature
  8. ASPO International Conference
I noticed a change in the estimated production table:

Newsletter 67:

           2005 2010 2015 2020 2050 Total Peak Date
Gas Liquid 6.9  12   13   14   11    276   2035

URR= 2450 Gb, Peak date= 2010

Newsletter 68:

           2005 2010 2015 2020 2050 Total Peak Date
Gas Liquid 6.9  12   13   14   11    354   2035

URR= 2500 Gb, Peak date= 2010

The rounding value goes from 2 in newsletter 67 to -25 in newsletter 68! no explanatations are given.

My sense is that Colin Campbell does not have as good a handle on gas liquids as he does on crude oil. BTW, I don't have any better idea about gas liquids. The gas liquids numbers in the newsletter have flopped around a fair amount over the past few years, without much in the way of explanation.

Given the amount of stranded gas out there, and the various economics regarding recovering it and, possibly, converting it into diesel via FT process, the gas liquids number is always going to be subject to WAG's, until the technology settles down a bit.

Note that the NGL numbers however make no meaningful difference in the timing of the peak or the shape of hte slope.

I don't understand the rounding value, by definition it should be around +/-1, why -25? it should not be called "rounding value" but "number added to get the URR we want"!
Maybe the rounding number is "one-third of the increase in NGL's," or "approximately one standard deviation for our WAG on NGL's." I know Colin Campbell is trying to be helpful by including gas in his chart and calculations, but I think it is misleading-- we simply can't chart gas the same way we chart oil.

Who knows what amount of gas was flared in the past? A Hubbert linearization doesn't work for gas, and won't, imho, until we are about one-third of the way down the slope for gas.  There is not the same time lag between discovery and production, or the same depletion rates. Just take the gas out of the chart, already, and go back to crude.

What does work for gas?
Adding all the numbers is that column gives me 2525 Gb. I assume by rounding this number off he is acknowledging that his estimates should not be considered accurate to more than two significant figures.
Hi Khebab, just noted the same thing. Colin Campbell uses rounding in all tables I have, he just does it to get a round number for URR (2500 instead of 2525 in this case).

Although this doesn't favor much his work, one must acknowledge that the increase in NGL will not change the peak date, which is now set by the peak in the Southern Atlantic Offshore.

Also it is interesting to note that this new date of 2010 is much more close to those of his peers like Skebrowski or Laherrère.

The recent HydroPower conference in Portland has been quite productive in leads or starts on ideas that are relevant to PO and/or GW. Just to report, and show that one person with "good ideas" can have some impact.

People ARE looking for solutions to an ill-defined "problem".

1) I talked a utility executive (in charge of development) to join with 3 other utilities and jointly offer electrification to a large railroad for a ~1,500 mile section of line.  The utilites would be willing to do this on a turn-key basis; or just sell power at the wire to the RR loco from utility owned system.

I HOPE that the first railroad electrification will start many more up in a cascade.

2) Talked two senior engineers at Landsvirkjun to look seriously into a HV DC line to Scotland (old plans exist).  The UK will have serious problems starting in 2012/14 and Iceland could sell renewable electricity "at a good price" in competition with LNG imports.  Perhaps average 1 GW.

The French see the same problem and are building an unneeded (by France) 1.6 GW nuke 50 km from England.

  1. Possibly matched a surplus high head powerplant equipment with a plant in Zambia that wants to expand.  Also, suggested privatizing RR from Zambia to Tanzania with the condition that it be electrified.  Transfer large truck movements to rail.  RR ends at large copper mines.  The Zambian claimed to have ear of the President (democratically elected).   20% of Zambia has electricity.

  2. Several leads for Chile, which is in a MAD rush for renewables.  They are burning oil today for electricity due to shortfalls in Argentine NG deliveries and are planning for zero NG deliveries in 2 or 3 years.  30% to 40% of their electricity (depends on how wet a year) comes from NG.

Landsvirkjun plans to send a team to look at 60 prospects already defind by gov't.  I told Chile that some wind turbines might be available from India (they are having trouble finding any for delivery before late 2008).

5) I meet with local Streetcar President in Portland and was invited to join a new national group he was forming.  Portland is planning for major streetcar expansion on both sides of the river as well as a new Green Line Light Rail opening in late 2009 and a commuter rail line.

Also meet with Portland TODer and a local consultant.

All in all, an extraordinary 11 days !

Alan,

Unfortunately, its not easy to electrify US railroads due to the use of double stack container operation. Clearance under bridges and tunnels is very limited and installing catenary would be very expensive. On the other hand, double stack containers are very economically hauled even with diesel locomotives.

I am originally from India and help manage a comprehensive web site about Indian Railways: http://www.irfca.org.

I know that India is frequently mentioned in the context of  rapidly increasing energy demand but it should be noted that  India has been electrifying its railways at a furious pace over the past few years. See http://www.irfca.org/docs/electrification-history.html for more information. At this point most trunk lines are fully electrified.

Per consultant dinner last night; a rule of thumb is a bit over $2 million/mile for single track electrification and $2.5 million/mile for double track electrification.

This is for "simple" installations.

I actually cannot belive those numbers. 2 million a mile? Somehow, a few tons of copper and a bunch of metal towers costs 2 million? How can that be right?

Digging holes for the concrete, and the concrete itself, to hold the towers is expensive.

And a mile is quite a bit of metal once you start walking it by foot.

Sill, that almost $3,800 per foot of track! how close together are the towers?
Straight line track, about 130' spacing between towers.

Copper contact wire is usually suspended by carrier wire (steel and/or aluminum) with catenary support wires (like suspension bridge).

Straight trolley wire requires 100'/30 m spacing.

dont' forget labor costs
Labor to install, transformers and feeders, more complex work around switches and turnouts, etc.  All conducted in mostly remote locations.

Yes, that is about right (perhaps add a few hundred thousands with recent copper price increases).

That's actually not too bad. Interstate construction where I am costs about $1.5 million per mile.
Way low on the costs.  Often highway construction costs are quoted in dollars from the year it was constructed.  According to the American Association of State Highway and Transportation Officials, it would cost on average $10 million per lane mile (meaning, $40,000,000/mile for the most basic two lanes in each direction interstate) to rebuild the interstate system.
A few months or weeks ago folks on here talked about the proposed NAFTA superhighway from Mexico to Canada.  I have seen a lot of press in the local news sheets about it.  One thing I wonder if the group pushing it really understands the cost of something this large is going to be if new roads have to be built at anywhere near the costs you state for a mile of 4 lane highway.

Right when the oil prices start ticking up someone wants to build more highway.  Why do they need a highway, and not just build a 2 to 3 track railway and forgo the trucks?

I have not searched out anything new about it, just wanted to point out, someone has to pay for any road building, and it usually is us.

You pay for highways with your tax dollars at the pump. I think it's just short of a hundred billion dollars a year. If you were a government, would you like to repair highways that need to be rebuilt because they are sixty years old and at the end of their design life, or would you like to build new highways that would increase the value of land someplace where you or your friends have previously bought it and let the next administration repair the old highways?
Alan,

As part of a railroad electrification transition have you considered a 'plug-in hybrid' style locomotive?  The concept I was thinking would be basically a Prius style drive system (diesel), with the ability to run on the electric line where available, but having the diesel for areas of interruption.  This could be used as a transition locomotive.

Kevin

Mixed use has happened many times around the world (for example on the Trans-Siberian as they were electrifying it).  AFAIK, the universal solution is to have seperate electric locos although mixed use locomotives are certainly possible.

If there is a short diesel gap between electrification, the electric locos would be hauled along.  Longer gaps and they would decouple and couple the appropriate locos to match what is coming up.

In switch yards there is the Green Goat and talk of other hybrid technologies.

Rail electrification is NOT some new technology but a century old technology with vast experience under a wide variety of conditions.

You should look at RailPower's products
Alan,
While you are "on a roll" I would really like you to contact Kevin Scheiffer, head of the DM&E Railroad about electrication.
As a land owner along the DM&E tracks I was at one of the meetings concerning the rebuilding of the entire track (all to 1/4 mile 110# rail [if I remember correctly] from old 90# short rail) + extending into Powder River Basin in Wyoming to haul coal east to power plants.
I asked M. Schieffer if they had considered switching to electric traction from diesel-electric and he said they had considered it and it would be lower cost operation, but that it would be "inconvient to interface with non-electrified railroads" and therefore they would not be going with electric traction.
My initail reason back then (a few years ago) was mostly to reduce the level of carcinogenic diesel exhaust fumes from along the entire system. Now it also to ensure that they will still be running when oil gets very expensive and/or in short supply. They are talking about running 45 coal trains a day past my farm (and through all the local towns)
Both the City of Rochester Minnesota and the Mayo Clinic located there are still fighting the expansion project (and slowly losing), but one thing that the DM&E could do to reduce the problems of the 45 trains a day going through Rochester right near the Mayo Clinic would be to promise to go all electric. This would eliminate the diesel exhaust problems and it would also eliminate most of the vibration generated by the train. (I can currently tell when the trains are about 1 to 2 miles away from the sound and vibrations of the diesel engines).
I even went to the expense and trouble to send him copies of both of Mr. Deffeyes books and also Mr. Simmons book. I recommended that he contact Mr. Simmons as the DM&E is trying to coral enough investors to cover the cost of the major renovation and expansion of the Railroad.
I (and all the people living within about 1 to 3 miles of the DM&E tracks) would be most appreciative for any help you or anyone can supply to get DM&E to electrify when they rebuild their entire trackage.
Thanks.
UPRR just announced record coal shipments in the first half 2006.  Based on demand and capacity, UPRR sees this as going no where but up and coal wasn't even on the RR's priority lists just 5-7 yrs ago.  

I think it's clear that as econ teaches, producers will adopt the least costly alternative.  Since most of the harmful effects of coal are exernalized & borne upon society to shoulder the long term costs, coal will dominate our future energy.  We are stepping back...hopefully we take those two steps forward again.

Jason, there is no doubt that the war in Iraq is fantastically expensive. And how can you put a price on the national shame of torture, robbery, rape and murder committed by the government in our names?
   But that still doesn't make ethanol cheap or practical.
Yes that is correct oilmanbob, it might not make ethanol cheap or practical but if you asked all the "what ifs" if we didn't have to enter this war and rather spend the billions on things more applicable...by the way have any of you seen the "911 Cover-up Video", pretty convincing...http://video.google.com/videoplay?docid=-5946593973848835726
I didn't see the video (1 hr 21 min.). No sound on this PC either. I would like to dismiss all the conspiracy about 911 and don't want to sound like AngryChimp. I don't buy the "no plane at the Pentagon" BS (numerous eyewitnesses) and other hoaxes.

There is one small, minor thing I would like to see cleared.

Bush was reading about goats at Booker Elementary that morning. This visit was made public 3 days in advance. At the time there were an unknown number of hijacked planes above the Eastern US. The president was not moved, stayed put, and if I'm correct addressed the press later from his location.

Why wasn't he moved immediately? He could/would/should have been a target, ain't it? Then why wasn't he rushed out with an unknown number of hijacked planes in the air?

This is the dog that did not bark.

Just curious. Anyone?

That could be as simple as a second-string President being watched that day by second-string watchers.
In other words the "real" TPTB didn't care what happened to him? Disposable symbol?