DrumBeat: September 12, 2006

[Update by Leanan on 09/12/06 at 9:27 AM EDT]

Canadian crude oil production dropped in 2005, while profits soared

CALGARY (CP) - Canada's oil production dropped in 2005 for the first in six years as conventional supplies wane, but that should change as oilsands operations continue their rapid ramp-up.

According to a Statistics Canada report released Monday, companies pumped out 858 million barrels of crude last year, down 2.3 per cent from the year before. One of the key reasons for this drop was a major fire at Suncor Energy, which cut production at Canada's second largest oilsands operation in half for three-quarters of the year.

"In general, this occurred mostly because of lower output from the conventional sector as well as unplanned interruptions in the non-conventional sector," the statistics agency said.

OPEC quota cut comes into view as prices fall


Report: Chevron may avoid $1B in payments

Incomplete lease agreements could allow oil giant to avoid paying royalties to federal government on new oil field.


BP gets 'first step' OK for bypass line


Clean technology key to French coal revival

PARIS (Reuters) - Surging demand for energy, coupled with high oil and gas prices have revived France's enthusiasm for coal but it may be short-lived without fast development of carbon capture and storage (CCS) technologies.


CNN 'In the Money' Drops Conspiracy Theory When Interviewing Oil Analyst


America's Significant Oil Find for the Coming Decade

...Finally, this discovery is doubtlessly a hard lesson learned for advocates of the 'Hubburt Peak' oil theory, who have been calling for years now to an end to the dependency on oil; the only reason is that the approaching end prompts dependence on alternative sources of energy.


Wind power ready to meet looming energy gap


Updating Prescriptions for Avoiding Worldwide Catastrophe - an interview with James Lovelock.


Mongolia seeks more profit from rich coal deposits


Finland offers experience in clean energy


Russia: Exxon cannot book new Sakhalin reserves. But Exxon is in denial.


Nigeria: President Obasanjo Says Ethanol Will Be Compulsory for Nigerian Fuel

President Olusegun Obasanjo has said the Administration would make the use of ethanol in fuel compulsory, like the cassava flour in wheat for bread.


Pesticide use worldwide touches 2 kg per hectare

The use of pesticides worldwide has risen dramatically from 0.49 kg per hectare in 1961 to 2 kg in 2004 and with this the export of pesticides has touched an all time high of $ 16 billions, the World Watch Insititute (WWI) has said.

The increase in the use of pesticides is attributed mainly to the rising use of herbicides on genetically modified crops in China, it said.


[Update by Leanan on 09/12/06 at 3:29 PM EDT]

Coming soon: Hydrogen-powered BMW

Luxury sedan will burn both hydrogen and gasoline. It will be provided to selected drivers.


Beware the oil trap

...be prepared to be surprised if the oil price goes down much further than seems possible.
The difference between this morning and this afternoon (in Europe) -

This morning -
http://money.cnn.com/2006/09/11/markets/bc.markets.oil.reut/index.htm?cnn=yes

'The Organization of the Petroleum Exporting Countries (OPEC) decided Monday to keep current production limits unchanged at 28 million barrels per day but left the door open to a supply cut before the end of the year.

"There is no need to cut now but if there is a deterioration in the global economy and prices fall quickly, then we will need a meeting before December," Algerian Energy and Mining Minister Chakib Khelil told Reuters after Monday's talks.

For a year, OPEC has been pumping close to its fastest rate for 25 years to guard against price shocks and ease pressure on consumer economies. But forecasts that demand for OPEC oil will decline in 2007 are beginning to worry some in the group that pumps a third of the world's oil.

Saudi Oil Minister Ali Al-Naimi, OPEC's most influential voice, sought to calm those fears, saying oil demand would remain healthy next year.

"Market fundamentals are very sound," he told reporters. "We are beginning to see a slight decrease in economic growth, very slight.... It is nothing alarming."'

Highlights -
1. Prices way beyond OPEC's target from just a short 18 months ago -
http://www.finanznachrichten.de/nachrichten-2005-01/artikel-1868605.asp

28.01.2005 20:13
OPEC target band is effectively above 22-28 usd/barrel - Kuwaiti minister
VIENNA (AFX) - OPEC's target price band for oil of 22-28 usd a barrel is effectively dead and 32-35 usd would "be a good price," OPEC president Kuwaiti Oil Minister Sheikh Ahmad Fahd al-Sabah said.

"What I can say is 22-28 dollars is not any more a target for OPEC," he told reporters upon arriving for an OPEC ministers meeting in Vienna on Sunday.

  1. OPEC is essentially pumping full out, but for a year, that fact had little influence on spot prices.

  2. The nice "slight decrease in economic growth, very slight.... It is nothing alarming" comment must be comforting to everyone, right?

  3. I wonder if the Texas Railroad Commission minutes from the eartly 1970s are now a part of OPEC's reading list?

After all, pumping full out didn't cause prices to decline, by any realistic measure, suggesting that the world's swing producers just aren't swingers anymore - age catches up to everyone, I guess.

Markets are made by supply and demand, of course, which is reflected in price. But these days, it seems as if flooding the market with oil doesn't work like it used to. Or maybe the market can no longer be flooded?

Manipulated, I grant, but flooded? And remember, it was the Saudi Oil Minister quoted as remarking about what seems to be confirmed demand destruction that 'It is nothing alarming.'

So, lucky that the Saudis are our biggest and best buddy, ready to do what that bunch of bumbling Texas oilmen couldn't do - remain an eternal swing producer, setting the price of oil both up and down.

Around noon -
http://www.bloomberg.com/apps/news?pid=20601103&sid=adhtqG4KvKGU&refer=us

'Members of the Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil, decided yesterday to keep production quotas unchanged. The group wants prices to stay above $60 a barrel, Iranian Oil Minister Kazem Vaziri-Hamaneh told reporters today in Vienna, speaking through a translator,

``The price we favor is not below $60'' a barrel, for OPEC's basket oil price, Vaziri-Hamaneh said. ``Supply is more than demand and stocks are at a very high level, and because of these two factors, prices are very fragile.''

Oil pared early gains today as the International Energy Agency cut global oil demand estimates for 2006 and 2007, spurred by a slowdown in the U.S., the world's largest energy consumer.

IEA Forecast

Worldwide oil demand will be 84.7 million barrels a day for 2006, 100,000 barrels a day fewer than estimated last month, the Paris-based IEA wrote today in a monthly report. Oil consumption next year was cut by 160,000 barrels a day to 86.2 million, the e- mailed document said.'

  1. $60 as OPEC's floor price? Wow - has anyone told the American public about this?

  2. You don't need a swing producer to create or maintain higher prices - you just need an absence of a swing producer.

  3. A 100,000 barrel a day estimated demand drop in one month? See the other point 3 above.

Around 3pm -
http://www.foxnews.com/story/0,2933,213430,00.html

'OPEC's output quota will remain at 28 million barrels a day, the 11-nation group said, acknowledging that supplies are "more than adequate" to satisfy world demand. Including Iraq, which is not bound by the quota system, OPEC's daily production is roughly 30 million barrels.'
...
'In its monthly oil market report, the energy watchdog cut 100,000 barrels a day from its earlier growth projections for 2006. It also said OPEC's output fell by 270,000 barrels a day in August. The IEA cut its estimate for demand for OPEC crude in the third quarter of this year by 400,000 barrels a day.'
...
'Analysts said one alternative to formally cutting production targets, which could unsettle markets and send prices soaring again, could be to have members quietly and informally pump less.'

To sum up -
Catch that last line? See, if oil prices don't decline much, it is because OPEC will be informally delivering less, as compared to officially meeting its quotas. Remember the old days, when they used to pump over their quotas? Now, the trick is to pump under their quotas, it seems.

But notice what has world oil production been doing for the last 9 months or so, even as high prices seem to have finally led to that 'slight decrease in economic growth'? Which has led to falling oil prices, if you only look at the past 12-18 months or so. Of course, since 2001, it is up fourfold, but hey, that is the past.  

Take it as you wish, but my conclusion remains peak has arrived, and though objects may appear closer than they are in the rear view mirror, this is about the time where they start fading into the shrinking distance. This should not be confused with peak price (more in OPEC's hands than any time since the mid-70s, I would guess), nor should it be confused with the end of the oil age. What this means, in my eyes, is that anyone planning for a future involving for 100 million barrels a day in the future should just sit down with those optimistic Texans, who are certain that technology will again bring back the glorious days of Texas riding the top of the market.

In the real world, it might be time to start planning with the idea that the world does not have 10 or 20 years to get ready for peak. That clock started ticking sometime when it was still morning in America, with a movie actor replacing the Naval Academy graduate.

Ooops - preview/post, not post/post
Expat: Great post.I had forgotten what the Saudis were saying circa Jan 05 (32-35 target). A 71% increase in floor price in 18 months is rather nice. A useful disguise for inability to produce.    
The difference between this morning and this afternoon (in Europe) -

This morning -
http://money.cnn.com/2006/09/11/markets/bc.markets.oil.reut/index.htm?cnn=yes

'The Organization of the Petroleum Exporting Countries (OPEC) decided Monday to keep current production limits unchanged at 28 million barrels per day but left the door open to a supply cut before the end of the year.

"There is no need to cut now but if there is a deterioration in the global economy and prices fall quickly, then we will need a meeting before December," Algerian Energy and Mining Minister Chakib Khelil told Reuters after Monday's talks.

For a year, OPEC has been pumping close to its fastest rate for 25 years to guard against price shocks and ease pressure on consumer economies. But forecasts that demand for OPEC oil will decline in 2007 are beginning to worry some in the group that pumps a third of the world's oil.

Saudi Oil Minister Ali Al-Naimi, OPEC's most influential voice, sought to calm those fears, saying oil demand would remain healthy next year.

"Market fundamentals are very sound," he told reporters. "We are beginning to see a slight decrease in economic growth, very slight.... It is nothing alarming."'

Highlights -
1. Prices way beyond OPEC's target from just a short 18 months ago -
http://www.finanznachrichten.de/nachrichten-2005-01/artikel-1868605.asp

28.01.2005 20:13
OPEC target band is effectively above 22-28 usd/barrel - Kuwaiti minister
VIENNA (AFX) - OPEC's target price band for oil of 22-28 usd a barrel is effectively dead and 32-35 usd would "be a good price," OPEC president Kuwaiti Oil Minister Sheikh Ahmad Fahd al-Sabah said.

"What I can say is 22-28 dollars is not any more a target for OPEC," he told reporters upon arriving for an OPEC ministers meeting in Vienna on Sunday.

  1. OPEC is essentially pumping full out, but for a year, that fact had little influence on spot prices.

  2. The nice "slight decrease in economic growth, very slight.... It is nothing alarming" comment must be comforting to everyone, right?

  3. I wonder if the Texas Railroad Commission minutes from the eartly 1970s are now a part of OPEC's reading list?

After all, pumping full out didn't cause prices to decline, by any realistic measure, suggesting that the world's swing producers just aren't swingers anymore - age catches up to everyone, I guess.

Markets are made by supply and demand, of course, which is reflected in price. But these days, it seems as if flooding the market with oil doesn't work like it used to. Or maybe the market can no longer be flooded?

Manipulated, I grant, but flooded? And remember, it was the Saudi Oil Minister quoted as remarking about what seems to be confirmed demand destruction that 'It is nothing alarming.'

So, lucky that the Saudis are our biggest and best buddy, ready to do what that bunch of bumbling Texas oilmen couldn't do - remain an eternal swing producer, setting the price of oil both up and down.

Around noon -
http://www.bloomberg.com/apps/news?pid=20601103&sid=adhtqG4KvKGU&refer=us

'Members of the Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil, decided yesterday to keep production quotas unchanged. The group wants prices to stay above $60 a barrel, Iranian Oil Minister Kazem Vaziri-Hamaneh told reporters today in Vienna, speaking through a translator,

``The price we favor is not below $60'' a barrel, for OPEC's basket oil price, Vaziri-Hamaneh said. ``Supply is more than demand and stocks are at a very high level, and because of these two factors, prices are very fragile.''

Oil pared early gains today as the International Energy Agency cut global oil demand estimates for 2006 and 2007, spurred by a slowdown in the U.S., the world's largest energy consumer.

IEA Forecast

Worldwide oil demand will be 84.7 million barrels a day for 2006, 100,000 barrels a day fewer than estimated last month, the Paris-based IEA wrote today in a monthly report. Oil consumption next year was cut by 160,000 barrels a day to 86.2 million, the e- mailed document said.'

  1. $60 as OPEC's floor price? Wow - has anyone told the American public about this?

  2. You don't need a swing producer to create or maintain higher prices - you just need an absence of a swing producer.

  3. A 100,000 barrel a day estimated demand drop in one month? See the other point 3 above.

Around 3pm -
http://www.foxnews.com/story/0,2933,213430,00.html

'OPEC's output quota will remain at 28 million barrels a day, the 11-nation group said, acknowledging that supplies are "more than adequate" to satisfy world demand. Including Iraq, which is not bound by the quota system, OPEC's daily production is roughly 30 million barrels.'
...
'In its monthly oil market report, the energy watchdog cut 100,000 barrels a day from its earlier growth projections for 2006. It also said OPEC's output fell by 270,000 barrels a day in August. The IEA cut its estimate for demand for OPEC crude in the third quarter of this year by 400,000 barrels a day.'
...
'Analysts said one alternative to formally cutting production targets, which could unsettle markets and send prices soaring again, could be to have members quietly and informally pump less.'

To sum up -
Catch that last line? See, if oil prices don't decline much, it is because OPEC will be informally delivering less, as compared to officially meeting its quotas. Remember the old days, when they used to pump over their quotas? Now, the trick is to pump under their quotas, it seems.

But notice what has world oil production been doing for the last 9 months or so, even as high prices seem to have finally led to that 'slight decrease in economic growth'? Which has led to falling oil prices, if you only look at the past 12-18 months or so. Of course, since 2001, it is up fourfold, but hey, that is the past.  

Take it as you wish, but my conclusion remains peak has arrived, and though objects may appear closer than they are in the rear view mirror, this is about the time where they start fading into the shrinking distance. This should not be confused with peak price (more in OPEC's hands than any time since the mid-70s, I would guess), nor should it be confused with the end of the oil age. What this means, in my eyes, is that anyone planning for a future involving a 100 million barrels a day in the future should just sit down with those optimistic Texans, who are certain that technology will again bring back the glorious days of Texas riding the top of the market.

In the real world, it might be time to start planning with the idea that the world does not have 10 or 20 years to get ready for peak. That clock started ticking sometime when it was still morning in America, with a movie actor replacing the Naval Academy graduate.

Even in first world Australia, there are some who are being really hurt by high petrol(gas) prices. In the north between us and PNG, the indigenous people are paying nearly 3 times as much compared to what we pay in urban areas for petrol, and may have to go back to sail boats they were using when the Europeans arrived 250 years ago:
"The fact is that many of them (remote communities) have few or no roads and they are totally dependent on their dinghies for local transport and for charter aircraft for travel within the region. They are also 100 per cent reliant on delivery of all food items through air and sea barge services. As a direct result of the abolition of this programme, they will see a significant increase in the cost of all these services plus, of course, all their food items."
http://www.nit.com.au/story.aspx?id=7716

In the middle of Australia, the main small airline (Cessnas etc) for the indigenous people has had to close down due to high fuel prices:
"MORE than 60 communities across remote Australia could be without regular flights from as early as tomorrow, after the company that runs them was placed in voluntary administration last week. The board of Aboriginal Air Services voted last Tuesday to bring in an administrator, who is understood to have told staff on Friday the company will fly its last scheduled flights today."
http://www.theaustralian.news.com.au/story/0,20867,20347844-23349,00.html

This belongs on yesterday's Jack 2 posting, but I'm afraid I'm too late for that.  Maybe one of the oil industry people can tell me what it means that Jack 2 "tested at 6000 bpd"?  Is this oil extracted?  If so, what is done with it?  If not, how is this flow measured and how accurate is this measurement?"  (sorry if this was explained somewhere and I missed it.)
Hummingbird, there just wasn't enough detail released on the test to figure out the real potential of the Jack 2 well. Its obviously very promising, but the news release did not say how long the test lasted and the beginning and ending pressures at the well head which would indicate the size of the reservoir and the potential for production. Drill stem tests are no where near accurate, the pressure needs to be monitored for a length of time after the plugs and tubing are in place to determine the potential of a well.
presumably they flowed the oil into a tank and flared the gas  the duration of the test is a mystery  at a rate of 6000 barrels per day  
Quote du jour

Bill Clinton's 60th turns into Toronto fundraiser

Billy Crystal is a fan:

When they called me and asked me to be part of the 60th birthday celebration of the most charismatic, most powerful, most important person in the free world, I said, 'Hillary is 60?'
Boy, that Canadian news is just what a peak oiler would expect.

... and I'd expect a little handwaving like the bit quoted above to appear a few more times, for a few more countries, over the next decade.

There's something very funny about this quote.
"In general, this occurred mostly because of lower output from the conventional sector as well as unplanned interruptions in the non-conventional sector."
Re: Boy, that Canadian news is just what a peak oiler would expect

It sure is.

I heard a happy commentary on NPR's Morning Edition today about why oil prices are dropping. The guy said it was because of all the good news -- OPEC still pumping, Iran nuclear threat easing off, high inventories -- no supply worries.

And then there is Jack in the Gulf of Mexico. This is not being cited as a reason but it hovers in the background. The propaganda machine was in full swing last week. Now, consider this:

At a meeting in Vienna, OPEC also made clear that it would consider scaling back production if oil prices keep plummeting.

Ramirez also warned that world oil investment could dry up if the West Texas Intermediate benchmark crude price falls below US$60 (€47.20) a barrel.

The new investment benchmark is $60/barrel. OPEC has decided they like high prices because even at $78/barrel there was no impact on demand. There is a serious disconnect between the day to day NYMEX price and reality.

Did I miss the explanation about why Stuart hasn't posted anything in ages?  I miss the updates to the plateau saga.
Same.
Good question.
Leanan? What did you do with him?
Don't ask me. I'm just a peon around here.  The Yankees don't bother to tell the ballboy what George Steinbrenner is doing.  ;-)

Someone said Stuart lives in Europe, and is probably taking a Europe-sized vacation.  

I thought he hinted once that he was in the SF Bay region.  I assumed he's just really busy doing real work, but maybe he's building a doomer fortress of solitude.
Although come to think of it, Stuart seemed much less doomer than many.
Yes, i'd luv to see the effect of new production records on his graphs.  2006Q1 set a new record of 85.17-mbd & the monthly record is now July 2006 with a revised IEA figure of 86.2-mbd.  This compares to 84.3 in July 2005.  The future is unfolding as it should... in line with almost all the Depletion models.
Which model - the one that says if you have record prices over a 12 month period, you pump oil like crazy, until something pops - oops, a little leak here, don't worry about it, we only need to shut down half of the field, not the whole thing, or an over 10 billion barrel announced Mexican discovery which turns out to around 10 billion barrels less than announced?

Or the model which says that oil production, according to OPEC, is overwhelming demand, so no problems?

Or the model with the ever harder to grasp definition of what 'oil' is? It seems as if it can be burned, and it is liquid, it is in fashion as oil this year, even if 20 years ago, it was considered essentially worthless sludge maybe worth burning in a freighter, since you couldn't burn it legally on land.

Or the model which says since we didn't lose, oh, another million barrels a day of production in the GOM because hurricane season is only half over, everything is peachy? And next year? And the next? I don't know the future, but it is relatively safe to assume hurricanes will continue to appear regularly in the Gulf of Mexico.

One of the things I find fascinating is the difference between short and long term - how many oil formations are being plundered as compared to husbanded over time to make that growth show up? Decline rates remain one of the truly open parts of the peak oil debate, since they are truly rear view objects - but how a field is produced has major implications for its decline.

And yes, let's not talk about the increase in CO2 which that production increase represents - after all, climate change is likely as far away in the future as oil production peaking.

I bet you even will argue that falling oil prices will lead to a free market economy like America's increasing its investment in energy efficiency and conservation. Just like the models predict.

The future is unfolding as it should? We do have different opinions about the future, it seems.

Stuart routinely presents both iea and eia. Interesting that you left out the eia estimate of 84.19 suppply for 2q, .5 lower than 2q05.  

EIA does show a higher demand, as opposed to supply. I would have thought that when demand is higher than supply, prices rise, which is in fact what happened in 2q, but maybe they mean something else.

For example, maybe higher demand is met by draining stocks... Much is made of the fact that US commercial stocks are higher than last year, mostly because 12mmb loaned from spr is not yet repaid, and won't be until after the election, if then. Meanwhile, per iea, OECD stocks are down 2% yoy, (1 day cover), or say 80mmb. And, although I can't provide a reference (from some link at tod), OECD stocks are apparently at a ten year low.

I looked yesterday at the data sources Stuart uses for his charts. The IEA didn't have the next month yet, however I think it had revised the previous month upward. The EIA did have another month, and it was up a little, but (as has been common with them) the previous month had been revised down, and the net result was that the new month was roughly the same as the lsat graph Stuart made. Bottom line was a continuation of recent trends, EIA flat and IEA up.

Maybe when the IEA comes out with the new month, which I think should be this week, he'll make a new chart.

Mass foreclosed-home auction in Michigan


More than 250 bank-owned single-family homes, condos and duplexes in Michigan are going to hit the auction block en masse in late September, according to Hudson & Marshall, the company handling the auction.

The state's housing markets have been crushed by lay-offs in the auto industry. On Monday, Ford was reported to be eyeing another round of cuts in its workforce. It has left many homeowners unable to keep up their house payments and lenders have built a big inventory of repossessed properties.

More than 92,000 homes entered into some stage of foreclosure nationwide this July - up about 5 percent from June and 18 percent higher than in July 2005, according to RealtyTrac, an on-line marketplace for foreclosed properties.

It's kind of tragically funny how your post ties in with Calorie's articles below on the born again (and agian) claims by GM. The foreclosures are their workforce.

If there already are 100.000 homes being foreclosed nationwide today, that means there must be millions of Americans with great difficulties in making their payments, but managing to hang in so far. The recent reports on the hammer of the ARM oayment rises that's about to come crashing down, starting in a few months, make one wonder where we'll be a year from now.

Ii'd be interesting to follow the auction, and see how many get sold, and at what prices.

Ominous indeed...

Will Peak Oil even be relevant in the world's 1st global depression?

Couple of articles about Detroit.

GM to seek flexible production to make cars for fluctuating gas prices

DETROIT -- General Motors Corp. is planning a flexible portfolio of cars and trucks that will change with market demand and the price of gasoline, GM Chairman and CEO Rick Wagoner said yesterday.

Speaking to reporters at the company's downtown Detroit headquarters, Mr. Wagoner said GM plans to change the mix of vehicles it offers based on gas prices ranging from $2 to $5 per gallon.

The company is studying how many hybrid vehicles would be needed for each gasoline price range as well as the number of four-cylinder engines, the number of six-speed automatic transmissions and the number of diesels, Mr. Wagoner said.

And from the Wall Street Journal (I couldn't find a free version, unfortunately):

Detroit Finally Learns Tough Lesson

Gas prices are slipping southward again, just as the summer driving season ebbs. But big auto makers say that isn't going to change their newfound determination to make fuel economy a top priority from now on.

Technology leadership, a crucial factor in sales success, is now "measured primarily in terms of energy efficiency," says Larry Burns, vice president in charge of research and development and strategic planning at General Motors Corp.

The No. 1 auto maker, which has suffered with having an image as a company that is serious only about selling low fuel-mileage trucks, is now determined to prove that it is a fuel-efficiency leader, he says. Other GM executives say the company no longer is counting on gasoline prices to be anything but volatile.

AutoNation CEO calls for higher gasoline taxes

The United States should raise taxes on gasoline to encourage the development of more fuel-efficient technologies, the chief of the nation's leading auto retailer said on Tuesday.

"We're at a tipping point here," said Mike Jackson, chief executive officer of AutoNation Inc., at the Reuters Autos Summit in Detroit.

"We have to do something to favor the new technologies and send a message to American consumers that gasoline prices are going to be systematically higher," he said. "A gas tax is a statement from the government that this is an issue of national security and we're going to do something about it."

...

"With politicians, they either agree with you and say it's political suicide or you get a Republican market-force answer and you point out that the market forces haven't worked for 30 years," Jackson said.

"Any politician that stands up and says in the same sentence, 'I support alternative energy' and 'I want lower gas prices for the American consumer' -- that is a contradiction. You intellectually cannot hold both positions."

Since the lead story is about Canada, I thought I'd post this report here.

Last week I presented a half-hour talk on Peak Oil entitled "The Iceberg on the Horizon" to the Ottawa chapter of the Canadian Association for the Club of Rome.  It was a fascinating experience, not least because this was the first time I've been up in front of an audience talking about this subject.

It was a lunchtime talk, and the audience consisted of about 40 members and guests.  The average age was about 60 (they need some new blood!) and there seemed to be a very high representation of engineers and policy wonks.  I've put up a rudimentary HTML version of my Powerpoint slides at http://www.paulchefurka.com/peakoil/PO-CACOR.html and the Powerpoint itself is downloadable from http://www.paulchefurka.com/peakoil/PO-CACOR.ppt.

As you might expect from the nature of the organization, they were very interested in the topic.  I was expecting a greater depth of knowledge of Peak Oil than was the general case - most people seemed to have heard of the idea, but hadn't thought about it all that deeply.  There were exceptions, of course - especially a couple of gentlemen at a back table that I already knew to be even more pessimistic than me.

The audience all got the idea very rapidly and the talk was quite warmly received.  My goals going in were to "educate, entertain and frighten", and I apparently accomplished all three.  At one point in the talk I present a scenario of an 8% decline for 10 years.  You could have heard a pin drop as I recited the litany of calamity, and when I was done I heard a couple of people say, "Oh my God!"

Now before anyone gets too hyper about my approach, I emphasized several times that no one knows when "the peak" will be, how long the plateau might last, or what the post-peak decline rate might be.  The two decline scenarios I presented were clearly identified as my own musings, with the severe scenario presented mostly for entertainment purposes.  It did serve its purpose of getting everyone to think about the implications of the universality of oil in our civilization.

The main points I made were: Peak Oil is primarily a liquid fuels problem; it's a flow rate problem (i.e. reserve figures don't matter much); it's a global problem; and no matter when the peak happens, oil is a non-renewable resource.  I then laid out my conviction that within those parameters there is no technical solution to the problem.  The mitigations I presented for their consideration revolved primarily around a fundamental shift in human values away from industrial and economic growth.

The Q&A period afterwards was interesting.  One gentleman brought up a rumour about a large imminent shipment of electric cars from China to North America.  Another wondered if it might be profitable to apply queuing theory to model what happens in a complex system when there is a collision in a queue for a scarce resource (apparently in some models the system will go unstable and "jam up").  A gentleman with a long career in the coal industry took gentle exception to my dissing CTL so heavily.  He maintained that there are many techniques for using coal, some with low environmental impact, and that CO2 sequestration is perfectly feasible.  I said I was glad to hear it...  There was no rejection of the idea of Peak Oil, or the notion that the post-peak period would be one rife with social, political and economic instability.

Overall it seemed to be a rewarding experience for both the presenter and the audience.  It made me a little more hopeful about the potential for Peak Oil outreach, and gave me a desire to hunt up some more audiences to educate, entertain and frighten.

"model what happens in a complex system when there is a collision in a queue for a scarce resource (apparently in some models the system will go unstable and "jam up")"

"Jamming up" is common.  Think about a near-capacity four-lane highway when in one direction it narrows from two lanes to one.  Even if the road is under capacity for a single lane, it often jams up at the bottleneck.

The world economy is an awfully complex system to model, however.  <conspiracy theory> I bet some government lab has a model of this already in place, but they'll never let anyone know that they have it and what it says is likely to happen. </conspiracy theory>

That's an excellent example, it makes the problem very easy to visualize.  Thanks.
The best complex system models aren't really models at all. They are open information delphi boards - essentially betting boards on social and political issues. Follows that peculiar dictum that what none of us knows alone, seems all of us know very well.

Awhile back the pentagon let know that they had opened one of these boards. The public reaction to the suggestion that these experts were actually "betting" and gaining on social policy caused the pentagon to shut it down (at least officially).

The world economy is an awfully complex system to model, however.  <conspiracy theory> I bet some government lab has a model of this already in place, but they'll never let anyone know that they have it and what it says is likely to happen. </conspiracy theory>

They certainly used to - while one is now in the Science Museum in London, the wiki article indicates that a number of these economic computers were built.

http://en.wikipedia.org/wiki/MONIAC_Computer

So it is possible (although probably not likely) that a revised version exists.

Hello KjmClark,

Speculation ahead--I don't want to be charged with Sedition!

Sounds like Asimov's Foundation supercomputer-cluster modeling to me!  Consider the software programs the Pentagon already uses for military logistics planning, then multiply in your mind.

ARMY WAR COLL CARLISLE BARRACKS PA
http://stinet.dtic.mil/oai/oai?&verb=getRecord&metadataPrefix=html&identifier=ADA326774
-----------------------------
Report Date : 07 APR 1997

Pagination or Media Count : 25

Abstract : The study begins with a futuristic vignette from a hypothetical Middle Eastern war early in the twenty-first century. In this future conflict the U.S. Army finds itself stranded on the battlefield and incapable of sustaining operations because of failures in strategic logistics planning in the late nineteenth century. Using the vignette to create a plausible failure of logistics, the author then critically examines the strategic thinking of senior leadership in regard to the current Revolution in Military Logistics (RML) in light of knowledge of the relationship between past Revolutions in Military Affairs (RMAs) and RMLs. From this perspective the author argues that planners in the 1990s did not recognize the true nature of the RML at the time and focused on technological enhancements to the old logistics paradigm, failing to foresee and develop the requisite doctrine, organizational structure, and new technologies necessary to support the on-going RMA.
--------------------------------------------------
Another important tenet of Asimov's Foundation of predictive collapse and directed decline is that we are to remained uninformed of its existence.  Dovetails nicely with Peakoil--don't you think?

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Hello TODers,

From the '3 Days of the Condor' Scenario:
--------------------------
"Do we have plans to invade the Middle East?"

"No, we play games."
---------------------
Consider that most people deny Peakoil.  Now consider that even most of these Peakoil-aware people will even deny that ANYTHING even approximating Foundation might exist.  Good anything be sweeter for optimizing the detritovore decline ahead?  Hidden in plain sight?

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Great job, gliderguider ! My only sugestion is that you make up a "further reading" list for any groups you speak to about the peak oil issue, a one page handout citing books and websites that have infuenced your thought. Churches are always looking for speakers-try the Unitarians and Episcopalians.
Thanks.  Slides 38 and 39 contain the reading lists, both web and paper.  I use them as a handout.

So far I think I have access to the Canadian New Democratic Party, possibly the Greens, a couple of Humanist groups, my own employer, and the Montreal Anglican Primate's World Relief Development Fund.  Unitarians would be a good bet - I grew up a Unitarian!  I also want to get to the local City Council, as they are so far in the pockets of the developers, and don't want to hear about anything that might slow their growth...

My talk to the Anglicans in March will be interesting.  The title I've chosen is, "Petroleum, the Modern Manna: The Danger of Dominion and the Failure of Stewardship".  I'm going to start them thinking about how they might handle the moral dilemmas inherent in post=peak third world "lifeboat triage" situations, especially given their Prime Directive of "Help the Poor."

  As an Episcopalian I would really like to buy a tape or get a transcript. I think the concept of stewardship willl really appeal to mainstream Christians, and might even help some of the radicals open up to a spiritual point of view.
Hello GliderGuider,

FYI - Councillor Clive Doucet is behind a meeting this Friday at 7 pm at the High School of Commerce Auditorium on Rochester St. at which James Howard Kunstler is a featured speaker/panelist.

The majority of council may be in the backpocket of the sprawl merchants, but not all.  Did you attend the Crude Awakening evening at City Hall last fall?

Friday evening should be interesting as long as Kunstler doesn't go off on one of his middle east rants.  Ten bucks entry to cover costs/fees.

Good luck with the NDP; I tried various times from 2000 to 2004.  Now I going to work for the Greens, whose new leader appears to understand that re-framing the argument is a more vital task than winning seats in Parliament.

I wouldn't miss Kunstler for anything.  I didn't know about Crude Awakenings, unfortunately.

I spent the weekend as an observer at the NDP federal convention in Quebec City, and I agree about them.  A party that wants to get elected isn't going to touch PO publically. It would be worse for them than wanting to pull out of Afghanistan. "Here, let us tell you about an insoluble problem that's going to destroy cilization" isn't much of a vote getter.  However, having their energy committees aware of the issue couldn't hurt.

In light of the coming elections in US, I've been wondering about the prospects of a candidate for a local or statewide position (state senator, let's say) who's entire campaign platform is centered on telling it like it is. This would be in regards to Peak Oil, Global Warming, Population, the economy, monetary system, etc.

It would be refreshing, from my perspective, to have a public official discuss reality for once. Do you think it would fly? If not now, when?

Tom Anderson-Brown

wouldn't even make it through the primary if s/he was in one of the main parties. And if you run as a third party,... well, you know what the odds are there.
probably wouldnt get very far   the voting public's attention span is about 1.5 seconds and these topics dont fit very well in sound bite form
Funny... This link http://kunstler.com/sched.html says that he'll be in "Ottowa" on the 21st.

Do you have any more info on that?  Like the time?  I'm tempted to go.

I just got off the phone with the woman in Clivbe Doucet's office who's organizing the event.  The correct date is Friday, Sept. 22 at 7:00.  All other info regarding venue and cost is correct.

Be there or be square.

Probably easier to convince those in their sixties, many well off, fairly sure that their few number of years are covered.  Somebody in their thirties, just beginning career and family, would be far more threatened, less receptive.
Hello GliderGuider,

I really enjoyed looking at your slides. One thing I'm a little puzzled about is the reference to population. You seem to say in the beginning of the presentation (on the iceberg slide and the street crowd slide) that population is the real problem. But it doesn't look like it gets discussed any more in your presentation.

So, is Peak Oil just a side show to the main event of Population Overshoot? Can you explain how this was worked into your presentation?

Thanks,
Tom Anderson-Brown

Here's how I lay it out.  The thrust of the talk is Peak Oil.   Peak oil is one of a spectrum of ecological problems caused by overpop. Although some of the others get more air time, in my opinion it's the most critical one.  I want to give my audience some context for Peak Oil, and to set it in place among the other resource/environment/socioeconomic issues that will complicate any attempt at a response.  In order to do that I give them a one-minute tour theough the "world problematique", and let them know that overpop is the root cause of it all.  I then dive into PO as the most immediate and urgent of the problems.

A talk like this has to be tailored to the audience.  In a longer version of the talk, or for a different audience, I'd go deeper into the population issue.  But for this group it was enough to let them know that PO exists in the context of overpopulation - they are the Club or Rome, after all, they defined the problematique, and they understand Limits to Growth and the population crisis better than most.

Overpopulation in itself is a pretty empty, even lame, term. You really have to specify that.
To get a benchmark perspective: Al Bartlett said some 10 years ago that the average North American  has about 50 times "the impact on world resources", call it footprint, of someone in a developing country. There are a zillion ways to calculate this, but let's stick with Bartlett.

North America has 330 million people. Multiply that by 50.
Yes, "our" impact equals that of 16.5 billion people elsewhere. Bartlett doesn't refer to destitute living dead, just to an average, as in normal people.

That is overpopulation.

There are 30 times as many people per square inch in Bangla Desh than in the US, but they are still gentler with their land than we are. They are 150 million, and that is their footprint. Ours is over 100 times more.

If you do not specify this in your talks, your audiences will be conveniently thinking that the problem lies in Bangla Desh.

It does not. Your audience is the problem.

No; our lifestyle is the problem, not our numbers. (By 'our' I'm referring to the population of the industrialized nations, particularly the U.S. and Canada.)

Population and lifestyle can not be equated. They are related, but are NOT the same thing.Both extreme affluence (us) and extreme poverty (Bangladesh and other third world nations) have disastrous consequences for the environment, even though their eco-footprint is smaller. And don't forget, all those folks in Bangladesh are fed by food grown and transported using fossil fuels.

The audience is the lifeatyle. Did you miss that?  Read twice?

"Population and lifestyle are not the same thing"

No sense. Please try again after the beep.

Actually a lot of people in Bangledesh are fed by food grown and transported by carbo-hydrates and grass: human and animal power.
You are right, of course, toilforoil.

My problem is, when people make that kind of statement, and believe it, that Bangladeshis live off imported food, I tend to give up. By then the path gets so long you can't see over the horizon anymore.

There was a spun-out thing about economic growth on the Beat yesterday, and all kinds of stories about how you can grow without growing, or variations on the theme, and there comes a time when you have to give up on people, and accept that some will never understand even the basics. Not funny, but we don't exactly have a sea of time left.

"Mama, why is the grass green?" is very cute, but when there's a tornado roaring towards you, you're not going to sit down and elaborate.

We all individually use dozens of times the resources that a Bangladeshi uses, and our economy will crash once it can't grow anymore, no matter if cows give birth, or corn grows, or we change lighbulbs. And unless we abolish interest, we're heading straight for the waterfall. And it's a darn steep one.

What we have to focus on is: what are we going to do about it?

And unless we abolish interest, we're heading straight for the waterfall.

Not relevant and totally unrealistic, you are blinded by "ethical" concerns, the very old anti-cheaters drive of the monkeys tribe.

First, from ANY sustainable production apparatus there is some "interest" flowing: the valuable outcome which gets credited to the OWNER of the apparatus.
This CANNOT be brushed away, no production apparatus NO OUTCOME, so, who owns it?

Second, it is not the interest per se which is problematic in that it brings growth, it is the compounded interest i.e. the REINVESTED interest, because this assumes that some other production apparatus is available to reinvest in.
It is this last step which implies unsustainable growth because it means grabbing some YET UNUSED ressources.
In a closed world there are NO yet unused ressources beyond the "flow" of renewable productions.

So, WHO OWNS THE FLOWS is the right question.
No more delusions about a "rising tide lifts all boats", let's not forget that the tide eventually subsides.

I agree that "overpopulation" can't be defined in terms of just the number of people.  The latest edition of Limits to Growth hits that topic pretty hard, and their conclusion is that ecological footprints are the only way to quantify the problem.

However, absolute numbers and fertility rates have to be factored into the discussion to some degree.  To that end I took a quick look at at fertility rates and population last night.  We hear that many countries (Italy, Spain, Germany, Greece, Japan etc.) are well below replacement, and this is often used as an argument for not giving up hope that population reduction will factor into the solution space for resource depletion.

I found that 2.7 billion people live in countries that have fertility rates of 2.0 or less.  Unfortunately, 3.8 billion live in countries that have rates over 2.0, and over a billion of those live in countries that have fertility rates over 4.0.  

I found these numbers shocking.  They reinforce my conviction that humane population control measures will do nothing of any significance to alleviate the problems we're going to face over the next generation.  We will have problems no matter what happens to the ecological footprint of the developed world, because all those high growth countries are asking, "When is it going to be our turn to live the good life?"