DrumBeat: September 13, 2006

[Update by Leanan on 09/13/06 at 9:18 AM EDT]

Just 18 percent of global oil tapped, Saudi says

VIENNA, Austria - The world has tapped only 18 percent of the total global supply of crude, a leading Saudi oil executive said Wednesday, challenging the notion that supplies are petering out.

Abdallah S. Jum’ah, president and CEO of the state-owned Saudi Arabian Oil Co., known better as Aramco, said the world has the potential of 4.5 trillion barrels in reserves — enough to power the globe at current levels of consumption for another 140 years.

And not only that... Saudi, U.S. Officials Confident Technology Will Boost Reserves

"Technological transfer occurs more quickly in this industry than in any other," Guy Caruso, head of the U.S. Energy Department's Energy Information Administration said at a conference in Vienna today. High oil prices will speed up such advances, he said.

Saudi Aramco Chief Executive Officer Abdullah Jum'ah said he has challenged his oil engineers to boost recovery rates by 20 percent in 25 years, a move that would add 1 trillion barrels to reserves. In time, worldwide reserves may grow by between 3 trillion and 4 trillion barrels as technology improves, he said.


[Update by Leanan on 09/13/06 at 9:46 AM EDT]


Prominent CERA official – “Peak Oil theory is garbage”


G7 to call for vigilance over oil prices, inflation


Refinery bottlenecks to dog oil industry until 2010

High oil prices are still being propped up by a shortage of refinery capacity and there is little sign of the bottleneck easing until 2010, industry executives and officials discussing OPEC's future have warned.


IMF warns on US slowdown and oil risks


A great of ink and phosphors being spilled over oil prices...

Oil's rout deepest in 16 years

$70-a-barrel oil still forecast

OPEC official: High and volatile crude costs may signal "a new price era"

Gas prices heading south: Motorists benefit as speculators' worst fears fail to pan out.

Will Oil Stay Soft? With expected disruptions so far absent and U.S. consumers cutting down on consumption, some experts think lower prices will stick.

Cheaper winter-blend gas will bring pump relief

Shell CEO: Why Oil Will Get Cheaper

Quit griping about gas prices: By some measures Americans are paying half of what they did in 1980.


Averting an energy crisis in South Asia

South Asia has a problem: it doesn't have enough energy. Pretty standard stuff, really, but what is notable is that grand energy-policy visions are drifting dangerously far from the realities on the ground.


US accused of pushing GM cassava for biofuels from Africa

In a saga that has been raging for a while now, controversy has deepened over a multi-million dollar USAid-supported cassava research programme, which proponents had said would help boost millions of East Africans' food security, but which critics have dismissed as an attempt by the United States to develop alternative sources of starch overseas, from which to make ethanol.


Energy Crisis Impacts Ghana's Mining Industry

"Cutting back [electricity use] by 50 percent means that, it is almost like cutting back production by 50 percent, because, although we have installed capacity for self-generation, it's extremely expensive," said Joyce Aryee, the chief executive of Ghana's Chamber of Mines. "It will mean getting regular supply of diesel, at the cost that we get it will perhaps mean generating power at 15 cent per kilowatt hour, which is almost three times what we get from VRA."


New Dell Desktop Cuts The Power: Dell announces their first desktop computer designed to help corporations slash energy costs.

The move is the latest in a series of feverish efforts from computer and server makers to help customers bring down the costs associated with running several machines on a network or data center.


Cuba oil prospects cloud US horizon


Era of cheap energy has ended


Free energy fair about Living after cheap oil (Wilson College, PA)


[Update by Leanan on 09/13/06 at 10:46 AM EDT]

Weekly Petroleum Inventory Report For the Week Ending September 8, 2006: Crude stocks down, distillates up, oil prices slip below $64.

``The era of easy oil is not over, because there has never been easy oil,'' Tillerson said.

Come and listen to a story about a man named Jed
A poor mountaineer, barely kept his family fed,
Then one day he was shootin at some food,
And up through the ground came a bubblin' crude.

Oil that is, black gold, Texas tea.

How do you know the Saudis are lying?
Their lips are moving?
Seamless response; only three minutes apart. Was this planned?
Just lucky, I guess.  Either that or it's a manifestation of Global Consciousness
Or maybe it is because we repeat this joke on TOD about three times a week.
You see, that's the problem with Global Consciousness - all too often it's mistaken for mere habit.  Or worse yet, coincidence.  I should follow my own advice: Don't anthropomorphize the universe, it hates that.
Sorry. You are clearly operating a couple of levels above me.
I have seen this argument few places(lower text)-
The LOGIC then has to be - When refineries runs at 100% - we should PAY ALOT OF $ for crude and keep the full tankers standby.... for some days...just in case
My logic gos opposite

High oil prices are still being propped up by a shortage of refinery capacity and there is little sign of the bottleneck easing until 2010, industry executives and officials discussing OPEC's future have warned.

Apart from the weirdness, or confusing implications, of using technology to get more reserves, this fine CEO is absolutely right, of course. There may well be 10 trillion barrels left. But that's not the point. It's the cost of producing it. And not the dollar cost.

As Jay Hanson has pointed out ad nauseum, the game stops when an energy source becomes an energy sink, when it takes more than one barrel of oil (or some energy equivalent) to produce one barrel. Something the oil sands are toying with, to say the least, in their natural gas use.

The energy sink concept will probably remain hidden as long as dollars are used, instead of BTU's, or even calories, to calculate the cost of a barrel of oil; it allows us to slip from source to sink without noticing it. Oil prices will rise so much that more and more oil looks economically recoverable. Again, not the point: what counts ultimately is whether it's "energetically" recoverable.

Once it's clear that overall resources are shrinking, this should become much more obvious (one may hope). It then gets pretty crazy pretty fast to lose lots of energy in the process of turning natural gas into petrol (the same applies to virtually all conversions).

Until then, and who knows how long after, the unlimited potential of both the rise in prices (dollars), and the ability to add more money to the system, will continue to conceal the obvious,

Nah. I am sure that someone, somewhere, will pay to get two perfectly usable units of energy (say, electricity) converted to one unit of gas just so they can keep driving their SUV.

¿What if it does not make sense? I mean, the SUV does not make sense anyway. It is their money, and if they want to burn it that way, it is their God Given Right (tm). You will have to pry it from the cold fingers of their dead bodies.

Although it is usually someone else who ends up dead.

There may well be 10 trillion barrels left. But that's not the point. It's the cost of producing it. And not the dollar cost.

Good point.  The earth's atmosphere is 78% N, but try fertilizing your tomatoes with it.

I appreciate your underlying point, but in reality you can fertilize your tomatoes with atmospheric nitrogen.  Rotational planting or interplanting with nitrogen fixing plants will do the trick.  You can be sure that we'll be making a great deal more use of atmospheric nitrogen, than we ever will of the third and fourth billion barrel of oil down there, somewhere.  

And then there is the slightly more random trick of loading the atmosphere with greenhouse gases to stimulate more violent weather, bringing on lightning and rain storms.  My garden got a great fix of nitrogen this way last week.  Hmmm...maybe I should send a letter of thanks to the coal lobby.  On the other hand there was that damage to my roof...I wonder if I can sue for damages?  It's all so confusing.

I appreciate your underlying point, but in reality you can fertilize your tomatoes with atmospheric nitrogen.

Sure, I know that.  But it happens on The Great Spirit's terms.  You don't pour it out of a bottle.

Actually, you can pour some great spirits out of a bottle ;-)
your tomatoes get fertilized with it every time it rains
Until then, and who knows how long after, the unlimited potential of both the rise in prices (dollars), and the ability to add more money to the system, will continue to conceal the obvious.

So, the economic system would ensure either an inflationary Big Rip or a Recessionary Big Crunch - either way Malthus wins.

We also have 'reserves' of zillions of joules of solar energy. The key word is 'available.'
(maybe not zillions but I'm too lazy to do the math right now)
and as long as military costs are not included in the cost of oil to the consumer
Some more excellent work by Khebab.  The Saudi graph is EIA crude + condensate, versus average US light, sweet oil prices, by month.  Matt Simmons' book, "Twilight in the Desert," was published in May, 2005.

The "unofficial" numbers are based on a Reuters report of comments by a Saudi minister that they are producing "about 9 mbpd."  


Link to Khebab's graph of the "Export Land" Model:
http://static.flickr.com/97/240076673_494160e1a0_o.png

Assumptions:  5% annual decline rate in production;  2.5% annual increase rate in consumption.  

For comparison, the North Sea is showing about a 6.5% annual decline rate since 1999, and the Arab oil producing countries had about a 5% increase in consumption from 2004 to 2005.

On the graph, note that a 20% drop in production, and about an 8% increase in consumption over a 4.5 year time period results in a 50% drop in net oil exports.

Wow!  Here is a story that buck's the trend of all the hype about an endless supply of oil:

Big Oil Tells Consumers Use Less Fuel
Reuters story from Vienna

Big oil companies are telling consumers to conserve.  The Total CEO states that oil will peak in 2020.

"It's interesting they are saying that because very often they have not said anything on (the subject of curbing demand)," says Claude Mandil, head of the IEA.
  "I fully agree with them" he told Reuters on the sidelines of an OPEC seminar on Wednesday.
Let's not forget to send kudo's to Québec for the graphics. The top one has beautiful simplicity. The difference 6 months make.
The whole ExportLand thing is fascinating.  A phenomenon like that should really get more press.  That chart sums it up pretty well.  
I had to estimate consumption, but from 12/05 to 6/06, the decline in net oil exports by the top 10 net oil exporters was about 4.6% (annual rate of 9.2%) versus the decline in world production of 1.25% (2.5% annual rate).  (EIA, crude + condensate)

In other words, through the first half of the year, estimated net oil exports (by the top 10) are falling three to four times faster than world oil production is falling.

I think that the EB is going to add a "Net Energy Exports" category.

Certainly the export land model interesting as a concept and useful to a point. Buy isn't it just extrapolating to the ridiculous?

Saudi Arabia and many other producers have economies dominated by oil exports. If they use the oil, they eliminate their ability to import anything and eventually shut down the global economy.  

Sooner or later these countries will begin to see growing domestic demand - which is boosted by export generated income and subsidized prices - as a threat to their existence and will curtail it.

I'm not sure that's true at all.  It's not hard to see where the UAE is going as far as diversifying their economy.  I wouldn't even call it an oil economy anymore at this point.  Saudi Arabia, meanwhile, plans on putting about 700 billion dollars into diversification over the course of the next 20 years.  Other big oil producing countries are moving in a similar direction.  To say that, "if they use the oil, they eliminate thier ability to import anything" doesn't make any sense.  They'll be using the oil to run their automotive, aerospace, pharmaceutical, high-tech industries, etc.  They'll be selling high value added products to the world and they'll have plenty of money to import things with.  If anything, I think oil consumption in these countries will increase even faster than people think.  
So how has Saudi diversification worked in the past?

They'll be using the oil to run their automotive, aerospace, pharmaceutical, high-tech industries, etc.  

This reminds me of the old Soviet Union posters proclaiming their plans to equal the west. Sounds easy on paper, but reality is a different story.

First, if they stop exporting oil, what will happen to the rest of the world? Who will they sell all of their products to? Or do you think Saudi Arabia will be self-sufficient?

Second, most of these countries have masses of young uneducated people living on subsidies and foreigners doing much of of the work. How can they possibly compete with the low labor costs in China or the established legal frameworks of the west? Petrochemicals, OK. The rest of unlikely.

All that this can lead to is either destruction of the glaobal economy or massive incentives to develop alternative sources of energy. It's a pipedream.

I think much of this analysis is based on a faulty concept that resources alone underpin economic growth. In a modern world it is far more important to create an environmnet that encourages investment and risk taking.

China imports massive amounts of resources but has has a booming ecomomy. Oil exporters may have grown with oil prices, but haven't done anything to show that they can  transition to being more than giant pumps. I don't see that changing.

Export land is doomer's dream material. But in reality it can only go so far.

What about a bit more attention to the economies of the Arabian peninsula as they are now, rather than in the past and in your prejudices?
I keep expecting that one day you will make an intelligent comment rather than this little one line snipes. I guess I really am a hopeless optimist.
"First, if they stop exporting oil, what will happen to the rest of the world? Who will they sell all of their products to? Or do you think Saudi Arabia will be self-sufficient?"

It won't happen overnight.  The ME and Russia will gradually use more and more of their oil production for their domestic needs.  In the UAE, it will be banking, insurance, tourism, manufacturing, aerospace.  Russia is planning a major modernization of their military, which will allow them to take advantage of greater economies of scale to sell their hardware all over the world at more competitive prices.  SA is concentrating on petrochemicals and planning on following the UAE model by getting into a wide variety of other industries.  Just because the U.S. is in for some hard times economically doesn't mean the whole world is.  

"Second, most of these countries have masses of young uneducated people living on subsidies and foreigners doing much of of the work. How can they possibly compete with the low labor costs in China or the established legal frameworks of the west? Petrochemicals, OK. The rest of unlikely."

"Foreigners doing most of the work?"  That's what they said about the U.S. in the 20th century.  In my opinion, having high levels of immigration is probably the most reliable indicator of future economic growth.

"Established legal frameworks?"  They have them there too.  And countries like the UAE and now SA are doing a great job of establishing large-scale duty free zones.  These duty free zones basically act as a subsidy for businesses and industries of all kinds to move their operations to the ME.  They've proven wildly successful.

"The rest unlikely?"  It's already worked in the UAE.  Now other countries in the ME are making plans to follow the same model.  Russia, of course, has its massive military-industrial complex to channel its oil-bonanza money through, and within a half-century or so, will no doubt rival the U.S. on all fronts.

"...a faulty concept that resources alone underpin economic growth?"  They might not underpin it completely, but it sure doesn't hurt, especially if you know how to leverage it.  

"...an environmnet that encourages investment and risk taking."  No country in the world has done this better than the UAE.  It's being taken as a model in the ME.

"...haven't done anything to show that they can  transition to being more than giant pumps. I don't see that changing."  It's already changed.  Welcome to the 21st century.

   

Thanks for a good reply. I don't think that it is impossible for oil exporters to recirculate some of their export wealth and to diversify their economies. However, I do think the linear extrapolation of the export land model has limits.

Dubai and the UAE have undergone a massive transformation, as you note. But - correct me if I am wrong - I believe that was spurred by a lack of oil.  

I haven't seen any convincing data that shows any of the major oil producers have been able to significantly develop non-petroleum-based industries. Despite your optimism about a Rusian military based revival, it seems they are moving towards being a traditional petrostate rather than forward into a modern economy. And what aboutr other sectors?

I am a huge believer in immigation. I think in countries, like the US, where immigrants could become full citizens and access all of the benefits of their labor, it has been almostr uniformly a positive transformative force. However in other places where they remained "they", the success has been less clear. France has had big troubles with lack of integration. In the Middle East, immigrants are largely contract labor. Anyone who said foreigners were doing most of the work in the US was wrong.

Dubai is certainly moving towards establishing the legal framework needed to compete in the modern economy, but relatively it is tiny. In Saudi Arabia, women can't drive, Iran is executing gays, Russia is hardly a model of transparency.

Massive revenues from high oil prices have inevitably raised living standards and boosted consumption at home. But using oil wealth to drive more and transforming economies are different things. I think we are seeing the former and that it is a blip rather than a trend.

Other than gasoline I don't recall buying any product labelled "made in the Kingdom of Saudi Arabia".Even the gasoline most likely wasn't refined in a Saudi refinery. I recall that during the 1st Gulf War jet fuel had to come from refineries in Singapore.
SAT - sorry for not getting back to you the other day - we were discussing where things are going - $57 - 15th November.

Nothing startling to say other than the market is controlled by supply and demand - wow.  With high prices, consumers everywhere are incentivised to use less fuel and producers are incentivised to produce more.  So I think we are seeing demand destruction - mainly in the poorer countries.  Also a lot of new supply came on in June and July that will provide some temporary relief on the supply side.

RE:  The UAE as a model for the new global economy.  Use oil to desalinate water to water golf courses - that's a neat idea should be popular all over the developing world.

British Airways are top of my don't under any circumsatnces buy list - but then  rumours arise that Emirates may bid for BA.  Now that's a neat business startegy - to own the only airline that has a reliable supply of jet fuel.

"...use oil to desalinate water to water golf courses."

Seems like whenever you bring up the subject of ME economic developement on here, all you get is either racist, 1970's stereotypical, or completely clueless responses.  

Meanwhile, Smekhovo makes a very concise, but incredibly insightful remark and all he gets is abuse.

Well why not educate us - what is the main industry in Dubai?
The main industries of Dubai are manufacturing, tourism, banking, construction, services, high-tech, aerospace, and energy.
That is absurd. You tried to paint an unrealistically optimistic picture of the rise of oil producing countries. Then when a little challenge arose, you fell back on insults and whining.

Nothing that I have said is remotely stereotypical or racist. If something is clueless, point it out. How about a fact? Some data? Evidence?

But if you think Smekhovo's remark was "incredibly insightful", it would seem this would be expecting too much of you.

All i've heard since i've come to TOD are bizarre, racist comments about the arabs, "sinking back into the sand where they came from," the constant repititon, even by the most respected members here, of the completely racist statement that you know someone from Saudi Arabia is lying, "because their lips are moving," people wondering where people will, "park their camels" in Dubai.

Jack, your comments weren't at all racist or clueless.  The comment made by Cry Wolf that the economy of the UAE somehow consists of, "using oil to desalinize water to water golf courses" is entirely clueless.  I think you know that the UAE has one of the most diversified and open economies in the world, becoming more so with each passing day.  You make a very good point that a lot of this has to do with the fact that Dubai had very little oil and that forced them to get involved in other industries.

The other thing you get a lot of here, and I guess this is probably a phenomenon across America in general, is people pretending to be anti-Bush, anti-war, etc., but then they begin to drool at the thought of the U.S. wiping Iran off the map, although they take great pains to pretend like they're against it, while they continue to count the days until it happens.  

It is a fact that the ME is growing faster than almost any other region on Earth.  A lot of this has to do with the high oil prices of the last four or five years.  Personally, I think high oil prices are here to stay.  Middle Eastern countries, led by the UAE, have also been making remarkably successful efforts to diversify their economies, using their oil money to get involved in other industries.  This is another trend that I anticipate will continue.  Most TODers seem to be hoping that the US will derail this trend through genocide.  Personally, I don't think that is going to happen.  The world put together a containment strategy when the US began planning to take over Iraq.  The idea was to make sure that the US footed the entire bill, draining the country of money, while at the same time working to make sure that Iraq succeeded in establishing an independent governement.  That strategy has worked.  The world is now working to make sure that the US doesn't invade Iran and that meaningful sanctions won't be imposed.  That strategy is working as well.  Because of the very coherent US strategy the world has put together, I think we will see the US enter a period of paralysis foreign policy wise.  The Iraq war will probably be the last war the US will wage as an empire.

Rather than trade insults, let's trade predictions.  About a month and a half ago, oil was at 76 and I told people it would fall to 57.  Most people said I was crazy.  At about the same point, everyone was getting all hyped-up, drooling about the prospect of a war against Iran (while claiming to be against it, of course).  I told them it wasn't going to happen.  The world has succeeded in reining in the US, I said.  Well, they have.  I hope everyone here will be around 15 to 20 years from now to witness the economic powerhouse the ME will become.

f the completely racist statement that you know someone from Saudi Arabia is lying, "because their lips are moving,"

That's more an anti-government thing, not an anti-Saudi thing.  IOW, they aren't talking about the Saudi people, but about the various ministers, etc., who keep saying there's plenty of oil.  The same thing is said about Bush, Cheney, the CEO of Exxon, etc.

Leanan,

I hope you're right.  You don't exactly get the impression that a lot of people are hoping that they're not lying though, do you?  

I hope they're not lying.

Hey, since you're here, would you mind telling me how to make those shaded boxes when you quote something from someone else's post?

Also, you do great work here, very balanced selection of articles, very cool-headed responses/analysis/interventions.  Maybe i'm just stressed out today.

Put <blockquote> before the text you want to quote, and </blockquote> after it.

Make sure you are commenting in Auto Format or HTML.  (I am posting in plain text, just for this post, so you can actually see the HTML coding.)

How do you know a Saudi government official/oil minister is lying?  Their lips are moving.

I'm in business!

SAT - thanks for the insightful comments.  Iv'e not been to the ME for about 10 years now (been to Bahrain, Kuwait, UAE and Oman) - so most of what I know now is based on media reports - which are pretty reliable -right.  All you seem to see are pictures of golf courses, flash hotels being build on artificial islands, horse racing and grand prixs.  So that's the media image - and I'm pretty sure that's how they want to be seen.

I see golf courses all over the world being sprinkled and groomed - often in areas where water is in short supply, take the Algarve coast of Portugal as a good example.  So I do believe that gof is popular in the UAE

http://www.jumeirahgolfestates.com/
http://www.arabianranchesgolfdubai.com/

- and the courses will be watered by either aquifer or desalinated sea water - and I don't think this is a sustainable activity.  Much better to come to Scotland - the home of golf - where it rains every day.

The UAE ceratinly has done a great job diversifying into tourism - and this will have driven construction and services.  I guess its liberal attitudes (allows alchol to be consumed) also means that it is being built up to a regional oil service sector.  My next door neighbour and his family have lived there for the last 3 years - Bill drilling horizonatal wells in Iran whilst living in Dubai- Iran by the way is not Arab.

An interesting study would be to look at tourism in the ME in realtion to countries that permit alcohol to be sold and consumed.

The last time I was out there, Bahrain was the only other country in the region with liberal laws on alcohol. I was going to move on to The King Fahd causeway linking Bahrain to KSA...  but I think enough said.

You can get a drink at the Shell base in Oman too.

Cry Wolf,

Jack made some interesting points as well, although we obviously have a fundamental disagreement on where the region is headed.  Only time will tell.

And of course, Smekhovo's comment:

What about a bit more attention to the economies of the Arabian peninsula as they are now, rather than in the past and in your prejudices?

is one for the ages.  Things are changing pretty fast over there.  I think it's awesome.  

AS the one who made that offhanded comment about lips moving, I want to reiterate what Leanan said.  It's a comment made about government spokepersons, of n'importe quelle country, race or creed.  I usually say it about White House press secretaries or tame administration generals on "Meet the Press".

I think you were misled in this instance by the use of the term "Saudis" as shorthand for "Spokespersons for the Saudi Arabian oil industry", which is how the term is usually used around here.  

In general I see very little racism on TOD, but maybe I just have a thicker skin.  Or perhaps I'm merely an insensitive schmuck.  It's hard to tell sometimes.

Sorry if I misinterpreted your intentions.

I guess the only thing we can all be sure about at this point is that the Saudis have never lied about their oil production capabilities yet.  Makes me wonder if people should be so sure that they're lying now.  

Damn, at this point I wish I would have been more short gold and less short small-caps.  I'm 40-60 when I should have been 60-40.  Then again, these things have a way of working themselves out.
I think a more accurate statement would be "the only thing we can all be sure about at this point is that we haven't caught the Saudis lying about their oil production capabilities yet." They have been very careful in parsing the language of their announcements, and given their notorious lack of data transparency we are forced to read tea leaves.  We do know that their expressed intention to boost their output post-Katrina has not materialized, and we're getting lots of hand-waving excuses and rig activity that make people over here frown and wonder.

If they go into serious decline it won't be concealable, but I doubt if they will admit to geological limits unless the situation becomes ridiculously obvious.

KSA reported producing 9.2 mbpd "recently" according to the oil minister as quotes by Platt's in below citation by PaulusP.
Ghawar & Cantarell--Warning Beacons on Opposite Ends of the Earth

The mathematical (HL) method and our historical analogues have both been indicating that Saudi Arabia and the world are on the verge of irreversible production declines.

As Deffeyes and Simmons respectively both warned (reinforced by work that Khebab and I did), world and Saudi crude + condensate (EIA) production are down since December, 2005.  

Since I studied the available data on Ghawar, and since I read the WSJ article on Cantarell, I have been relentlessly warning that both of these fields were likely to decline/collapse.  Last year, these two fields accounted for about 10% of world crude + condensate production.  Both fields have rapidly thinning oil columns, between advancing water legs and advancing gas caps.   It is much easier for water and gas to flow through a reservoir than it is for oil.  The higher the production rate, the more likely it is that gas and water will bypass the remaining oil.

Richard Heinberg reported that Ghawar is crashing.  IMO, this is supported by the decline in Saudi oil production, by the shortage of natural gas (probably as a result of the loss of associated gas) and by the Saudi's new status as a fuel oil importer.  Furthermore, Ghawar is now at about the same stage of depletion at which an analogue field--Yibal, same reservoir, same horizontal wells--started crashing.

Sprott Asset Management reports that Cantarell may be declining at up to 50,000 bpd per month (600,000 bpd per year).  This is consistent with the worst case decline rate of up to 40% per year.  Note that the remaining oil column of about 825' is thinning at the rate of about 300' per year.  

We know that the next two largest producing fields, Burgan and Daqing are also declining.  

With all four of the largest producing fields in the world almost certainly declining or crashing, I don't see any reasonable scenario that would result in higher world oil production.  Furthermore, I continue to predict that net oil exports will continue to fall much faster than world oil production is falling.

One final point.  I have frequently used the example of the East Texas Field (producing with a 99% water cut)--as an example of where these giant water drive fields are headed.    

As far as an impact on world production is concerned, the temporary shutdown of the Prudhoe Bay Field was almost a non-issue.  The corrosion of the surface facilities was a symptom--not the problem. The problem is that the damn field has a 75% water cut.   Prudhoe Bay, like so many of the other giant fields in the world, is in a terminal decline.  

Ghawar and Cantarell are two warning beacons, burning brightly in the night sky--ignore the warning beacons at your peril.

Hello westexas,

You stated above that Both fields have rapidly thinning oil columns, between advancing water legs and advancing gas caps.   It is much easier for water and gas to flow through a reservoir than it is for oil.  The higher the production rate, the more likely it is that gas and water will bypass the remaining oil.

I'm trying to understand how this happens. Why is it more likely for gas and water to bypass the remaining oil at a higher production rate?

I'm picturing an oil reservoir that's 2/3 full of oil. The oil sits at the bottom 2/3 and there is gas in the upper 1/3. If I pump water into the reservoir the water will go to the bottom, the oil will rise to the middle, and the gas will be put under pressure at the top.

Is that how it works? Getting a clear picture of this will help me understand better how reservoir depletion works. If there is a reference somewhere that will help me understand it, please let me know.

Thanks,
Tom Anderson-Brown

Viscosity. Water and gas are thinner. They flow faster. Check out "Twilight in the Desert" for a good description of how water bypassing oil happens, gas caps, and water injection.
"I'm trying to understand how this happens."

It's a question of relative permeability.  Permeability relative to gas is always higher than to fluids.  In virtually all reservoirs, permeabilty relative to water is higher than to oil.  As is true for any complex system, there are a huge number of variables.  One of the variables is the API gravity of the oil.  The lower the gravity of the oil (i.e., the heavier it is), the more likely it is for water and gas to bypass the oil.

In both fields (Ghawar & Cantarell), from this point forward the operators can choose to have a higher remaining recovery or they can choose to have a higher short term production rate, but they can't have both.

Pemex reports that they only have two problems at Cantarell--oil wells watering out and oil wells turning into gas wells.  

WesTexas:

"Richard Heinberg reported that Ghawar is crashing.  IMO, this is supported by the decline in Saudi oil production, by the shortage of natural gas (probably as a result of the loss of associated gas)"

One thing I dont' understand: as Ghawar crashes (and pressure declines, per "Twilight in the Desert"), shouldn't the associated gas come out of solution and form a gas cap? And shouldnt' that gas then be exploitable?

Or do you think the Saudis are reinjecting water and gas and the kitchen sink to keep up production, and hence have no gas to spare for joint chemical factories?

"shouldn't the associated gas come out of solution and form a gas cap? And shouldnt' that gas then be exploitable?"

The field has already formed a secondary gas cap.  It's very bad idea to produce the gas from a gas cap to an oil field, at least while the oil is being produced, because the gas withdrawal has a highly detrimental effect on reservoir pressure.  

I suspect that the Saudi's natural gas production is down due to the loss of associated gas production that was being produced with the oil in the field.

Think of a very simplified model of the rock as a bunch of parallel tubes of various diameters.  Once the large diameter tubes empty of oil it's game over; you get large quantities of water and gas out the well.  The trick is to keep the total flowrate low enough so that the smaller passages have time to discharge some oil.  If you run the total bpd up, you're just sucking more oil from the large passages and shortening the life of the well.
Think of sandstone. Soft, crumbly sandstone. Pour water on sandstone, some goes in and through, most runs off.  Blow compressed air on sandstone, some goes in, most blows off.

Pour motor oil over sandstone.  It only goes in the surface at first.

Water & gas go through sandstone MUCH faster than motor oil.

If one produces and oil well too quickly, "coning" can happen.  The "profile" around the well has a "cone" of water around in one direction (down) and a cone of gas in the other (up).  Away from the well, a slug of oil remains, but all the oil around the well bore is produced.

Simplistic, but I hope that it gets the idea accross.

Thanks to everyone for the explanations. I didn't understand that the reservoirs are porous. I thought it was just a big cavern underground. I'll read some more books on the topic. Thanks for the recommendation!

Tom Anderson-Brown

If you want to get into some interesting stuff (interesting for geo types) look into capillary pressure.  As the space between grains of rock goes down, capillary pressure goes up.  All fields have some degree of stratigraphic component, since they have to have a seal, keeping the oil from migrating.  

What really keeps oil from moving is high capillary pressures. Generally the seals consists of shale and in some cases evaporites.   The bigger the oil column, the better the seal has to be.  

In some cases, a reduction in porosity and permeability in a reservoir rock is sufficient to keep oil from migrating, but it will allow water to move.   For example, we have seen cases where one has oil shows in a structurally higher sandstone, and we test saltwater, and then we test oil from the same reservoir downdip in a  structurally lower position, in a more porous and permeable portion of the reservoir.   The water test was in a trap facies that kept oil from moving updip.

When you stop pumping, it should start settling, though, right? Gas on top, water in the bottom, oil in the middle. It's the viscosity that will keep the process nice-and-slow. But shouldn't it eventually reach a state that is once again exploitable?
 It may very well reach that state, but probably not in our lifetimes. Reservoirs that were blown in the early 1900's have not recovered as yet, and there has been no increase in the pressures needed to move the oil through the rock into the wells.  
Westexas, I am not exaggerating when I say that you are one of the most respected analysts here. I always look forward to your posts because they shed so much light on such a cloudy issue.

I do have a question for you though. Given the post you made above, and your knowledge of what is happening in the oil industry, what do  you think the timeline is for significant impacts to the U.S. and the world to start occuring? I don't mean just a return to $3/gallon gas or even $4 or $5. What I am curious about is serious impacts, such as the economy tanking. Things that will make more people sit up and take notice that something is going on. (Even if they don't recognize or even belive in PO.)

Thanks.

That question is what tod is all about. WT thinks very soon, Stuart thinks peak is right around now.  But, ASPO thinks peak is in 2010 because of increases in deep off shore oil plus large nongas liquid that will be produced as large gas fields, eg qatar, go to full production, and ASPO has been studying this longer than most.

The question is, when will the decline rate of mature fields overcome the increase from new supplies?  New supplies are relatively easy to predict, but the decline rate is very hard. SA, for example, is rapidly expanding its number of rigs, they say to expand production but tod thinks in a desperate attempt to maintain production.

Still pretty murky.  Most think we will only know the peak a few years later.  But, pesonal planning is easy - get out of debt, reduce your energy consumption, etc.


"The question is, when will the decline rate of mature fields overcome the increase from new supplies? "

There is a third thing.  And I think Westexas is about the only one blowing the horn on it.

HOW MUCH WILL BE FOR SALE?

It don't make no never mind if SA can pump 15million a day if they internally use 14million a day.

What is the amount available for EXPORT that is the only number that should concern people.  

The bottom line.
The Net number.

What's coming on line,
What's depletion,
What are they consuming internally.

What is offered for sale??

The bottom line. The Net number. What's coming on line, What's depletion, What are they consuming internally.

I agree with your post, but unfortunately more catastrophic scenarios must also be taken into account -- like what if as a consequence of military action or threats, the decision was made to destroy the oil-producing capabilities of an entire nation. Say, for example, that nation was SA.

What If Saudi Arabia Did the Unthinkable and Blew Up Its Oil Wells?

In response, Posner shows, the Saudi leadership began to think of ways to prevent such an occurrence. They could not do so the usual way, by building up their military, for that would be futile against the much stronger U.S. forces. So the monarchy - one of the most creative and underestimated political forces in modern history - set out instead to use indirection and deterrence. Rather than mount defenses of its oil installations, it did just the opposite, inserting a clandestine network of explosives designed to render the vast oil and gas infrastructure inoperable - and not just temporarily but for a long period.

Some may deem this outcome unlikely, but you never know....

What you're talking about is basically a self destruct mechanism.  Afterwards the Saudis would be screwed too.  Obviously this is a smart tactic if they can't stand up militarily, but at the same time it's also a reason why other countries probably would not attack them.  Also, why would the US be invading Saudi Arabia again?  They've been our crappy "allies" for many years now.  Even loose cannon Bush has good relations with the Saudi royal family.  Somehow I think the Saudis are safe.  
It's a self destruct mechanism that was used by Iraq in the Gulf War, to great cinematic effect.   Here's an analysis of it, in the runup to the Iraq War.

PS: I'm sure that it's the environmental aspect that they were worried about, in the war that was supposed to pay for itself :)

"Get out of debt"....

There's that same issue again. Way I see it,slightly immoral to be sure, is that say I have a $700,000 McMansion. Peak oil comes and its basically worthless. Why should I spend reserves or cash I have now or shortly to pay the damn thing off? Or anything for that matter since I am a doomer(spell that pragmatist) then instead I would take that income and find a more reasonable area and lodging to survive in. Buy supplies,firearms and whatever to prepare and then just walk away , or run as the case may be, from that insignificant worthless property and go to the other, seeing it all coming down that is.

So again. Why pay off something that may be of absolutely no value and you would lose anyway?

In fact twere me I would be selling right now however the real estate bubble appears to be rapidly deflating and soooo....well you shouldn't have brought it in the first place, now there is the devil to pay.

Again. Walk away now while you still can unless you have already resigned yourself. Many have so I read. A pity. There's that old Murkan 'can do ' spirit. Olduvai Gorge awaits. Maybe flintknapping classes can be found. Whatever.

Hey be sure to join a nice rightwing Christian church full of deer poachers and lawbreakers with big guns. Suck up to get accepted. Work the circuit. Get your neck reddened up.
I figure these boys can still churn out some white mule(moonshine) and good whiskey needn't be scarce then even if oil and sech is.

The main problem is the changes in the US bankruptcy laws make  a good ol' boy still liable for the debt even if he no longer owns the asset. But, since debts are not inheritable except as to the assets in a person's estate, I suggest suicide.
The statute of limitations on most forms of debt is 3-4 years. If you can avoid the creditors for that long, you're free.
Not exactly.  The statute of limitations is the time in which the creditor has to bring suit against you to recover a judgment.  Even if you take off the creditor can still bring suit against you and recover a judgment.  You need not be present to win (or lose)!  A Judgment against you means no credit.  No credit means no house, car, etc., etc.
Sigh... I give up.
As one who has gone through bankruptcy just before the law changed I can see the advantages and disadvantages clearly. One advantage of defaulting on a mortgage is that you have a full year of home payment free living before a possible eviction. If a renter defaults he faces eviction anywhere from 30-90 days later. The money that used to go to the mortgage company has allowed me to find a cheaper part of the country to live in as well as partially financing my daughter's first year of college. For the cost of one mortgage payment I bought a used van in excellent mechanical condition which will transport our belongings from Michigan to Iowa. In Iowa we will be renting a home for about $150 less than our mortgage payment while eliminating my daughter's dorm fees.
Now consider the fate of someone with your supposed $700,000 McMansion. Say the market value has dropped to $350,000 at the same time as his income has dropped. The poor fellow was a GM salesman and his wife worked at a recently closed Ford factory. Total monthly income has dropped from $15,000/mo to $7,500/mo. The couple goes to bankruptcy court and pays about double the fee I did. They enter into a court ordered lowered credit card payment plan which eliminates all interest payments and they default on the mortgage. They have 12 months and thousands of dollars available each month to readjust to a lower cost lifestyle perhaps in a financially better location. The bank is stuck with a property no one can afford. Now multiply that scenario by one million and what will the banking system do?
Hi Tom,

I'm very interested to know more about how this works (defaulting on a mortgage). I just sold a suburban house and bought a house in the city because I believe the house in the city will allow for a better life as fuel costs increase and because I believe the property will retain its value compared to the house in the suburbs.

However, I've taken on more debt in the form of a bigger mortgage to do this. At this point I'm able to cover the mortgage comfortably, but who knows what's around the corner with employment (I have a job that is reliant on the entertainment and construction industry).

So, Let's say I can't pay my mortgage because my employment situation changes? What is going to happen? Respond here if you like, or you can email me at tandersonbrown at yahoo dot com.

Thanks,
Tom Anderson-Brown

Details vary from state to state but in my case I filed for backruptcy in Oct '05.  I made my last mortgage payment in Dec because of other urgent expenses. The mortgage company didn't respond to my request to renegogiate the loan. On May 31, '06 the house was auctioned off in a sherriff's sale on the other side of the state.  We have until Dec 1 to redeem the property and I'm in process with a buyer presently. Legally I owe the mortgage company nothing if I chose to simply move away.  To redeem the property if we can close the sale in time means I pay the mortgage off plus taxes and fees to the mortgage company's lawyer.
"So again. Why pay off something that may be of absolutely no value and you would lose anyway?"

Economic collapse does not equal collapse of creditors' databases, let alone civilization.  The legal system, police and military will doubtless persist for an unpleasantly long time.  See Great Depression.

TPTB likely anticipate said collapse, to say nothing of their anticipation of the end of growth, hence capitalism.

So what does that have to do with walking away from your McMansion & unpayable mortgage?  Well, if capitalism fails, there is always feudalism.  Unpaid dept will become your ticket to debt servitude, with today's creditors as tomorrow's lords.  Why do you think the personal bankrupcy law was eliminated in all but name last year?

What Oilmanbob and Weatherglass are speaking of is an intact
justice system , filled with legal people, law enforcement and all the rest of the retinue of civil servants and such.

I submit that with choas, no fuel, lights out and little food that it would not be surmisable(a word?) that the civil idiots would be out beating the bushes outback for debtors.

Notice I implied TEOTWAWKI. Chaos. Joe Bageant and J. Kunstler meltdown time. Back to the Olduvial Gorge time. Campout time for the ex-boyscouts only you don't get to go home when campweek is over. You get to stay in the woods with your offical Boy Scout knife and canteen forever.

I have posed this question before and received the same responses so I assume the respondees are basically cornucopians blowing the Horn Of Plenty.

You got to get more into the scheme of it and forget those worthless debts. Paper money will be meaningless.

Think BARTERTOWN(Thunderdome and Beyond).

If you want pink clouds and soft cushy landings then by all means be sure to start paying off those incredibly stupid loans for those houses that are now flooding the marketplaces.

Myself? I would get a good dirtbike. A good AK or AR with lots of clips , a bugout bag and some good maps of choice free(national , state forests) land and start caching some stuff there. Shouldn't cost much to do and better than rotting in suburbia and awaiting the bill collector with a happy shiny face.

Excuse me while I go take a quick puke.

Personnally, if all the gloom and doom happens, I just expect to die. I'm 54 and have diabetes. But, I think its just as preposterous as Kunstler's previous prediction of the Year 2000 destruction of civilization. I think WestTexas's admonition to economise, localise and produce is a much better idea, and also Eddie Chiles "If you don't have an oil well, get one". And watch all those armaments-people generally lose about 3/4ths of the gunbattles with burglars. It sems the average sociopathic gun-toting burglar is a lot more ready to shoot than the average person.

  Peace!

The laws governing use of 'deadly force' are quite clear in Kentucky. Plus the legislature has removed the stipulation of having to 'retreat before the criminal/thief/whatever'.

If you feel your life is threatened you have the right to use of deadly force.

Better to first survive the fight and THEN deal with the courts.

If you have a concealed deadly weapon permit(CCDW) you will always be prepared to hash it out with burgulars.

You said 'the average person' so I do agree with you there. We should ALL becoming more than just the average person. Unless you expect to die off anyway and so then basically the debate is over on that issue.

There are few oil wells nearby. Got good clear running springs though. I would trade the oil well for a good spring .  

 

The JHK y2k thing is getting old. There are enough of us here (on TOD) who worked the problem for some time. Millions of lines of code re-written. We had 3 servers that came up with new dates and the accounts were not paid till 2027. Users not online, thankfully the next day was a sunday. I spent it at our local library because the novell database server went into "elastic time".  Hung over fighting elastic time is not pretty.

Those were the good ole days, I wish I could bill out now like I did then. There was serious potential for a problem there. An awfull lot of people took action prior to the problem.  Drop this one it's old and wrong.

I live next to uninhabited mountains covered with forests. The valleys in between are thinly populated.

I have tried to live off the land; it ain't like in the old days (if it ever was -- the Army did a pretty good job of making Apaches surrender once they couldn't raid anymore).

Unless you poach cattle, you're going to starve pretty fast. If you poach cattle, the posse will get you.

I figure people who take the dirtbike and AK-47 for a one way ride will last a few months, at best. The folks who would survive teotwawki (if such a thing were to happen) are Mormons and others who farm, ranch, and, most importantly, work together as a community. Survival as an individual isn't really feasible, and doesnt' have much meaning -- even if it were feasible.

I actually think the urban centers might end up being in charge even in the worst case scenario.  There will be chaos for a while and people will die.  And then after a little while things will get reorganized and a horde of hungry and armed urbanites will come out to the countryside and take all the food they want from the people who moved out there in the first place to be prepared.  

There is no way to escape this problem, with the exception of moving to an island in the middle of the sea, and even then you'd better hope it's pretty high above sea level as we may still end up with global warming and rising oceans.  Come to think of it, New Zealand might be an ideal place to move to.  Fairly isolated.  Fairly low population.  Fairly good environment for farming.  

Airdale

See some of my posts in this thread.

I see things similarly.  
Just read a couple of things by Joe and tend to completely agree with his assessment.

We might have total chaos, and maybe 90% dies.  Planning won't help much here.  Or, we might have some level of recessions/depressions, in which planning would help a lot. Own your own (small) home, have savings, invest in small e&p's (I like ard and gpor), etc. We will at least have some oil for the lifetime of everybody at tod, and some substitutes will come along, even if not sufficient.  Oil will be expensive, regardless of the medium of exchange, and, probably, available, along with most police/fire/other gov services, just like in the depression.  

Assuming doom and doing nothing would get you kicked off the island.

Depends kind of on the speed of the collapse - doesn't it.

If you stop paying right now, you may be in deep financial doo-doo in a year with the tax man. (Since you have to pay tax   on the part of the loan that remains and is "forgiven" after foreclosure). And as far as not paying taxes - that can land you in jail.

But if the collapse quickly leads to long-term chaos - I am right behind you in line to do this.  Just let me know when.

buy   consume    marry and reproduce     do not question authority   move to the burbs     drive an suv
"what do  you think the timeline is for significant impacts to the U.S. and the world to start occurring?"

Thanks for the kind words--I'm trying to warn those who will listen.

I think that we are seeing some significant impacts now, primarily among lower income people in the US and in poorer countries around the world.  

Note that the US has had a net negative national savings rate for over a year.  That is why the crap being spread around by CERA, ExxonMobil and Saudi Aramco is so pernicious.  They are giving consumers precisely the wrong advice at precisely the wrong time.

I have been repeatedly advising people to start making hard decisions this year.  Assume your income drops by 50%.  Assume energy and food prices are at least 100% higher.  How would you change your lifestyle?  

As I have repeatedly said, if I am wrong, you will have a lower stress way of life, little or no debt and more money in the bank.  I have nothing to do with George Ure's website, but he has a pretty good little PDF file that you can buy for ten bucks that gives you advice on how to live on $10,000 per year, and I am sure there is lots of other stuff on the web, especially regarding the voluntary simplicity movement.  

One of the cold, hard realities that we are facing is an emerging labor surplus.  It may be somewhat ruthless, but by cutting your spending relentlessly, you can put yourself in a position to survive wage cuts, or to volunteer for a wage cut (to prevent yourself from being laid off).  This one of the ways that I survived the Eighties.


One of the cold, hard realities that we are facing is an emerging labor surplus.  It may be somewhat ruthless, but by cutting your spending relentlessly, you can put yourself in a position to survive wage cuts, or to volunteer for a wage cut (to prevent yourself from being laid off).  This one of the ways that I survived the Eighties.

A lot of debate has gone on about inflation vs deflation in the coming 'crunch' (for those of us who see a coming crunch). It is painfully obvious though that cost of labor will be extremely deflation-ridden. Even if prices of consumer items remain relatively stable, high unemployment will equal higher virtual prices for those with no bucks to spend.

Hello ET,

Speculation ahead

You know that I am a fast-crash, worst case doomer [but certainly not advocating for the worst], trying to visualize less dire, maybe even workable solutions.

I believe that Peakoil WILL NOT create a labor surplus and high unemployment--in fact, just the opposite.  Recall my earlier postings whereby we need to go from our current 0.7% farm labor [source: CIA Factbook] to 60-75% Permaculture labor to prevent starvation.  Recall that Zimbabwe is now at 60% farm & localized permaculture labor, and failing miserably.  There will be no shortage of work ahead to massively convert our lifestyles to permaculture and biosolar Powerup as we race food shortages induced by detritus entropy.  Recall how TODer Westexas predicts illegals and college grads working together to bring in the harvest.

Other young, robust men will be pulling loads along canals [see my post near bottom of this thead], busting reinforced concrete and asphalt with sledgehammers, and building RRs.

Another idea of mine is to build a national spiderweb infrastructure of drinking fountains.  PostPeak, some high value goods will pedaled on cargo-trikes from the coasts to the interior regions.  This will be very-taxing work: these pedalers can best be served by having a shaded resting place and drinking water every 5-10 miles as they criss-cross the country.

Seven time Tour De France winner Lance Armstrong can cover a remarkable distance in a very short time.  But we need to remember that the food and water during a race is handed to him from a pursuit ICE vehicle--That won't be possible in a PostPeak world.  A gallon of water weighs 8.34 lbs, the least we can do is build a national drinking fountain spiderweb so this water requirement won't have to be pedaled too.

There are freeway stretches in the Southwest's deserts that would be lethal to a bicyclist, if his bicycle broke, or he ran out of water.  We need to remember that postPeak, at some future time, there will not be any ICE ambulance or helicopter rescue--we need to prepare before.

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

Hello TODers,

More Speculation ahead!

Most of you are aware of my prognostications on the inevitable rise of large, contiguous biosolar habitats protected by Earthmarines, who will undertake a very solemn oath to: protect at all costs, the species of the land & water.  In short, they will kill a small female child before letting her eat the very last raspberry, carrot, tomato, etc, on the planet.  For emotional clarification: recall the little girl in the film of Spielberg's Schindler's List.  Otherwise-- global Easter Island is our fate; Leanan's Catabolic Collapse.

For example, recall my now ancient post whereby two Somali clans went to gunbattle over a small stand of trees: one clan wanted to harvest the firewood now, the other clan realized how vital the forest was to the continued health of their eco-system--the classic resource battle of detritovores vs biosolars.  This is our postPeak future unless we start meaningful mitigation.

Recall, before the discovery of FFs, that a nation without tall trees could not be a maritime power.  It would be mitigatively wise, if the President declared certain areas now: to be planted with the proper species of trees that we can harvest later for the essential tall masts required for wind-power ships.  This would keep us from later raiding the last old-growth forests and really wrecking our eco-system.  My hypothetical Earthmarines, pledged to long term sustainability, could start off by planting these trees, then postPeak moving to protect them from the masses of people that will ignorantly want to cut them down for mere firewood.  If America cannot even protect tall trees for use in later sailing ships--the Decline of Empire will be total.

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

Bob,

Even though we share a similar view of the future of society, we certainly differ when it comes as to what happens.

People will be no different than the wild pigs and bears that wreaked havock in my garden and orchard this year.  They wanted a meal now and took it regardless of tomorrow's meal.  Humans will be just like them, a hord of locusts turning everything in their path to dust.  I can certainly see people eating the last seed of a number of open pollinated grains and vegetables I spent years developing.

But, what will keep this from occuring won't be Earthmarines but rather local folk who have come together to keep them out, i.e., kill them as they arrive.  I realize that this is hard for non-rural people to understand, but they will be seen as "pests."  I had to shoot and poison a lot of animals this year.  In fact, it got old having to grab a gun every time I left the house but that's the way it goes. I took no pleasure in killing but it had to be done.

The people who survive will become the equivalent of your Earthmarines.

Todd;  a Realist

Todd,

Wonder if some of your scenarios made it into the adventures of C.C. Eggum? I thought I seen some of mine about rotting potatoes, or maybe not.

Don Sailorman's exposition.

Good writing.Like his style.

airdale--keep ur powder dry. I am taking up blackpowder BTW.
      one shot but it works and scares the hell out of 'pests'

Airdaale,

The only black powder thing I have is an antique, engraved no less, percussion-cap, side-by-side shotgun.  It's smaller than 12 ga and I have never tried to fire it.  The only other antique gun I have is my grandfather's Spanish American War rifle.  It chambers a .410 shotgun shell but it won't fire them.  I have to admit that when it comes to guns, I'd buy a 1911 .45 first before a black powder gun.

As far as the critters go:  This has been a rough summer for game.  I'm  coastal northern CA and it has been hotter than usual with zero summer rains.  Wild pigs have been around for years (we've lived on this property for over 25 years) but have never been a problem but they have no food.  Bears always come through each year.  We try to let them go their way but have trapped several over the years.  The biggest was over 500# and would have killed anything it came in contact with including us.

In the case of the pigs, I shot several who went to other peoples freezers since ours is full.  The weaners probably died from eating an anti-coagulanet bait I put out and a few bears may have died from it too since they never came back to the orchard after eating the pigs bait.

Starving animals are never frightened away regardless of what you do. You have to kill them.  Had this been a SHTF scenario, I would have spent the last month on guard duty.

There's a lot more stuff but TOD isn't the place to go into it.

Todd

Hello Todd,

Thxs for your thoughtful and wise reply.  You maybe proven correct--still too early to tell how the whole shebang will paradigm shift.  Have you seen the EB link by John Michael Greer?

If the fast-crash postPeak future is our fate, I hope to be wearing a t-shirt or jacket that says Team TOD--this will give you full free-fire permission to put me out of my profound misery -- you seem like an excellent shot who won't flinch at the last millisecond.

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

Hi Bob,

I hadn't read that one.  Weasel words since he has no more ability to see the future than you and I...but I think we are correct.

Todd: a Realist

Bob, up here in Maine, we have roadside springs that anyone can utilize. I'm not aware of any map of all of them but the locals know where they are. The trip from Ellsworth to Agusta passes 4 springs on private property that the public is allowed access to.

But this is Maine, (not the southern part that's more like New Hampshire or Mass wannabees) Lots and lots of miles here. Up here, we still have families that need to bag 2 deer to survive the winter. Mostly the community makes sure they have the tags. Every once in a while, when they get caught, it's the game warden who does not make it out of the woods. Everyone  is very sad at that point.

Todd, well said. Voice of reason, it comes thru that you have to get up in the morning because you have to feed the animals. They depend on you and you them.

Most people have no clue,  how hard it is, they board the fluffy dog when they go on vaction. People seriously producing food do not get vacations. The animals need food and water every day. A huge percentage of our population would consider that as impinging on their free time. I guess the term is ego-centric.. nothing will get in the way of these peoples focus on themselves.

 "local folk who have come together to keep them out, i.e., kill them as they arrive."

  Or we blow a lot of small bridges between us and them. And we block the grade so they have to walk the hill. And block the 3 miles thru the canyon with a lot of trees. That'll be fun; we'll  dress in camo and be Minutemen, and they can dress in red like the Brits. Home field advantage is everything.

 I really don't like the sound of that coming from my keyboard, but I'm afeered you're right.

  I don't think the world is gonna look like this.

  I love the irony; hippie Rat with a shotgun. I thought I was finished with that a long time ago.

Peace

M

"Power tends to corrupt; and absolute power corrupts absolutely." --Lord Acton

In short, they will kill a small female child before letting her eat the very last raspberry...

The posited social system behind this scenario seems to me to be explosively unstable, rendering the scenario highly implausible. After all, any group invested with this much summary power is overwhelmingly likely to evolve into a highly dangerous bunch of berserkers in short order. And those habitats will be extremely fragile, and thus highly vulnerable to berserkers.

Bob, I have a lot of respect for you but I can't find a way to express just how deeply I am offended by this:

In short, they will kill a small female child before letting her eat the very last raspberry, carrot, tomato, etc, on the planet.

If that ever came to pass, we'd all ready be screwed. And we'd have done it to ourselves, so good riddance.

Hello Optimist,

I understand how you would be offended.  It deeply offends my sensibilities too, but it is already happening around the world TODAY where desperate resource wars are occurring.  See my Somalia post in this thread, Google Sri Lanka, Darfur, The Hutu-Tutsi Machete' Dance, etc-- when it comes down to pure survival over access to water, food, land-- we are all Collateral Damage.

Imagine, for the next 100 years, the worst case of anarchy and catabolic collapse imaginable with 300 million raving American souls.  Maybe 5 million survive-- I can't easily visualize this--it makes me sick.  TODers Darwinian and others post about this much better than me.  Scientist, inventor, and writer James Lovelock says 2 million max worldwide at the North Pole---Yikes!

Far better to have some kind of social system [not infinite growth!] that mitigates this to have 50 million survive; a whole magnitude better!  This is only, repeat ONLY, possible if we protect our ecosystem as best as we can.  We eat carrots, not carats, gold, or paper funny-money.

I speculate that Earthmarines will understand the need for carrots, raspberries, goats, and trees, and will try their best to avert the wholesale Tragedy of the Commons-- which will bring ruin to everyone.  Large biosolar lifeboats much, much bigger than Noah's Ark, which only had to float for 'forty days and forty nights' for those of a Christian faith.

My speculation is just that.  I fervently hope it does not come to pass, and some genius will think of a way for us to avoid detritus entropy and Overshoot, but I don't see how.  I am only a dumb Dodo bird.

I spend countless hours trying to think of proactive solutions: everything from my 'steelies', to drinking fountains or water cisterns every five miles, to abolishing streetlights that glow all night trying to get black asphalt to reflect photons.  We all need to be thinking outside the box for the challenges ahead.

From Dieoff.com:
------------------------
Despite the madness of war, we lived for a world that would be different. For a better world to come when all this is over. And perhaps even our being here is a step towards that world. Do you really think that, without the hope that such a world is possible, that the rights of man will be restored again, we could stand the concentration camp even for one day? It is that very hope that makes people go without a murmur to the gas chambers, keeps them from risking a revolt, paralyses them into numb inactivity. It is hope that breaks down family ties, makes mothers renounce their children, or wives sell their bodies for bread, or husbands kill. It is hope that compels man to hold on to one more day of life, because that day may be the day of liberation. Ah, and not even the hope for a different, better world, but simply for life, a life of peace and rest. Never before in the history of mankind has hope been stronger than man, but never also has it done so much harm as it has in this war, in this concentration camp. We were never taught how to give up hope, and this is why today we perish in gas chambers. -- Borowski, pp. 121-122  Here is the full horrific article: THIS WAY FOR THE GAS, LADIES AND GENTLEMEN, by Tadeusz Borowski, # 119198
------------------------------------------------
If pressed for time, watch this video on Youtube.  Only six minutes long, but it lasts for an eternity, then extrapolate to Seven billion souls.

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

ToTo, you got some weird ideas.

A spiderweb of drinking fountains!!!!

Now could YEAST come up with that idea?

Think more like oldtimey cast iron hand pumps.

airdale--I use yeast to bake with. Believe me...its mindless.

Hello Airdale,

Thxs for responding, but I respectfully request you go back and reread my posting.  "Infrastructure" is a non-descriptive word--hard to visualize.  But everyone can visualize a national "Spiderweb" of piping, springs, cisterns, small drinking fountains, and yes, even old time cast-iron hand pumps laid out across the country so everyone has access to potable water.  Consider the alternative: please carry a 5 gallon water jug in each hand for a mile without stopping, then report back to me.

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

Totoneila and TOD,

I believe canals will prove very useful in a power-down
world. I piloted my own boat through many of Europes canals and have some familiarity and fondness for canals. I think  
the older more primative canals will prove to be the most
useful because the locks have manually operated gates and
they usually have tow paths. The newer canals have massive
electrohydrolically operated gates and require a lot more
infrastructure and energy for their operation. In the 19th
century a canal boat typically required a crew of three.
A man to pilot the boat, a donkey to pull it and a boy(girl)
to guide the donkey. Of course loading and unloading were
very labor intensive. I towed my own boat (7 tons) experimentally and was surprised at how little effort was
required after overcoming inertia. I realize towing 40 tons for 12 hours a day would be a whole different thing. To bad
the USA did not build more canals before trains took over
the carriage of freight.
One problem canals may face in the future is insufficient
water. We all may face that!

What we need in the future is more energy efficiency and I can't see how returning to the astoundingly energy inefficent use of mammal power will work. Slower road vehicles (under 20 mph max) of just a few horsepower using a wood gasifer for fuel would be much energy efficient way to move goods and people around. At slower speeds electric vehicles become even a better option. Current NEVs have a daily range double what your manpowered trikes would have. Power from windfarms and hydroelectric dams could move goods and people by electrified rail quite efficiently if we just slowed down. Slowing down makes biodiesel go much farther.
Biosolar habitat good. Mammal power not good.
Note that the US has had a net negative national savings rate for over a year.
How much longer can this go on? Esp. with the stagnant/declining real estate market? This crisis may hit before peak oil does...
Thank you for replying Westexas.

Though I was afraid that was going to be the answer.

westexas,

I've been able to piece together parts of your bio from your posts over the months, but it would be interesting to see it all in one place. Your career in the oil industry, your financial hardship, your realization of peak oil, etc.

A good (but not great, IMO) book which espouses much of your advice is The Millionaire Next Door. The basic thesis of the book is that in order to build true wealth you must live way below your means and save and invest your excess income. The book even defines a formula you can use to see if you are a "prodigious accumulator of wealth" or an "under-accumulator of wealth."

I think a mistake a lot of people make, and your "Iron Triangle" is only too happy to exploit, is the notion that consumption is a sign of wealth. It is not. Consumption is a sign of spending, and spending is a sign of not saving, and for many, going into debt. The truth is that saving is not glamorous and is unlikely to impress your neighbors because it is not visible. Saving and investing, along with the power of compound interest, also offers little in the way of immediate gratification. It is a long-term, multi-year, even multi-decade, endeavor.

(I'm aware that compound interest may not survive peak oil. That's one of the reasons why I read this web site).

"Consumption is a sign of spending, and spending is a sign of not saving, and for many, going into debt"

I am doing somewhat better than the Eighties, but our "new" car is six years old.  The older car is ten years old.  Deflation is new experience for a lot of people, but for oil patch folks, been there. . . done that.  It's amazing thing is what happens to an industry when about 80% of the net cash flow evaporates in a couple of weeks.

BTW, the Peak Oil debate on the McCuistion program will be broadcast locally in the Dallas/Fort Worth area on KERA, Channel 13, in two parts, Sunday, Sept. 17 and Sept. 24, at 11:00 A.M.   It is supposed to be shown nationally in other markets, but they don't have the schedule yet.

There were four panelists, yours truly, a local oil operator, an ExxonMobil representative, and a consultant recommended by Saudi Aramco.  Michael Lynch called in from Tokyo.   One of Lynch's counter-arguments seems more bizarre the more that I think about it.  He argued that the UK was was an example of the HL method not working.  Of course it works great for the total North Sea, but the bizarre part was that Lynch was citing the example of a country whose production is crashing to refute my Peak Oil arguments.  Kind of strange.

America has had a labor surplus for the last 30 years. Outsourcing and automation plus immigration has put the US in a real wage deflation mode for decades. The current liquid fuels crisis plus status quo politics leaves us unprepared and unwilling to provide basic goods and services to a large percentage of our population as conditions worsen. I believe the rich and the few folks they employ will survive no matter what. The rich will keep the police in tight control of the poor and some form of civilisation will continue.
Solutions to the peak oil challenge are currently political and the window for political improvements is maybe 5 years wide. America had a similar chance in the late 70s and we blew it all away in November of 1980.
I would be VERY interested to know how Robert Rapier reacts to westexas' line of argument here.  Any thoughts, Robert?
RR has responded to this question several times in past. He states he has been persuaded that peak is not yet here by seeing data on fields to be developed or currently underproducing. The data are confidential so he can't detail his argument. He has also stated that his views are not based on knowledge of depletion/decline rates. Given that this is a full 50% of the equation, but lesser known or defined (compared to projects coming on), I personally don't see how anyone can say much with great confidence about whether it's peak now or peak in 5-6 years.
You are probably aware, then, that we have debated his import scenario before. It is not really worth rehashing, but I do dispute some pieces of evidence. If you are going to have a coherent hypothesis, you must also deal with the contradictory data. In fact, it is most important to deal with contradictory data as a falsification test of your hypothesis. You must acknowledge when the data conflict with predictions of the hypothesis, and either scrap or modify the hypothesis. When imports were falling and prices were rising in the spring, I provided an explanation for that. The fall in imports was due to refinery utilization being down in the spring as a result of the hurricane. Imports closely track refinery utilization, and this was the basis of my argument. Prices were rising because of geopolitical factors, and because a lot of gulf production was still offline.

Now, we have rising imports and falling prices. Coincidentally, U.S. refinery utilization has been maxed out lately, and all of the gulf oil production has been back on line for a few months. Now, if my hypothesis predicts falling imports and rising prices, and I use this as evidence when this scenario unfolds, I have a problem when the opposite happens, as is the case now.

However, in the grand scheme of things, we are on the same page. I think we are in a lot of trouble, I just think we have to be careful with the evidence. If we use evidence that is later falsified, we open ourselves up to serious doubters just when we need to convince people to act. However, I definitely believe we are within the 20 year time window within which Hirsch declared that we need to aggressively act. Peak might not be now, today, but we would be better off in the long run to prepare as if it were. So, even though I dispute some specific pieces of evidence in his export hypothesis, we agree on the overall message.

"So, even though I dispute some specific pieces of evidence in his export hypothesis, we agree on the overall message."

As Robert mentioned, we have been down this road before, but I was not building my export case based on US oil import data.  I did point out the anomaly of falling US imports and rising oil prices.   In any case, in regard to the US, we are the biggest oil consumer, but we are "only" about 25% of world consumption.  

My concerns about exports arose because of the analysis of the HL data, to-wit, that the top oil exporters are more depleted than the world is overall.   In January, 2006, I specifically predicted, in a TOD post, that we would see declining net oil exports this year.

Based on the EIA crude + condensate numbers, someone is being forced to cut back, since I estimate that the exports from the top 10 net oil exporters are down 4.6% from 12/05 to 6/06 (annual rate of 9.2%).

As I outlined in this thread, I simply don't see a realistic scenario for rising oil production when the four largest producing fields are almost certainly all declining or crashing.  

WT
A number of times you have mentioned the thinning oil column in Cantarell. As I understand, Cantarell is a fractured formation which would imply a number of oil columns. Is the 825' referring to one main part of the overall reservoir, or do I just understand this incorrectly?
Oil columns are measured from the highest point of oil bearing rock to the lowest point.  In a case where there is a gas cap and a water leg, it is measured from the gas/oil contact to the oil/water contact.  

The 825' number and the thinning rate was taken from the WSJ article this year, which in turn was taken from a leaked internal Pemex report which laid out five decline scenarios, with the worst case suggesting up to a 40% decline rate per year.  

I am not a Cantarell expert, but the numbers quoted in the WSJ are very, very scary, and the recent data seem to suggest that something close to the worst case decline rate is occurring.

Westtexas, As you have continuously espoused, suppliers internal consumption is one of the elephants in the room.  Economics impacting pricing raises another interesting factor to put in the mix of peak effects. As conventional oil becomes less and less of the overall pie, the non conventional, higher cost, alternatives have a bigger impact on total supply. A fall in price brought about by recessionary activity, or the advent of electric cars, or smarter ways of conserving will tend to drop price. That drop will hit an ever rising floor as the percentage of high priced oil gets bigger and bigger, until eroi collapses the whole thing.Volatility is to be expected as the norm. I share your disgust at the deservice people like CERA and much of MSM do to the hapless consuming public. But then it has always been " Let the buyer beware"
WestTexas - that is one of the posts that should define the situation we have here. Spot on!
I think I will make my kids read it to more clearly understand why "the old fella" has erected wind turbines, Solar Water & PV panels...

Incidentally the Prudhoe Bay corrosion issue. In the UK Media, (BP being a national icon) there was a lot of head scratching as to how exactly a pipe that should have oil in it, could possibly be corroding..
The explanation was to do with Eddy-currents and magnetism -
At that point most people shook their head and went back to 'Big Brother'.

 ...but of course if the fluid inside is 75% water that would explain it!

Thanks fellas
Jenks.

I always thought they were too busy counting the money, and completely forgot about preventive maintenance.
Water cut is probably the primary culprit, but apparently various extremophile organisms (eg methanogens) can play a part as well.
If the line is cathodically protected, even water shouldn't matter.  Acid-excreting bacteria are another matter, however.
TJ,

CP protects the outer, soil-facing skin of the pipe.  The inside of the pipe doesn't 'see' the protection.  The Office of Pipeline Safety has some CP info on their site.

And CP is hardly panacea.  It's notoriously difficult to get just right because of the enormous range of variables and semi-empirical nature of its design.  Annual soil moisture variations, decay of the anodes, and other variations in the variables keep the crud guys tweaking the systems.  OPS mandates 6 checks per year.

Corrosion requires 4 elements:  two materials with different galvanic potential (different voltages when referenced to a common material), an electrolyte, and a return path for the electrons.  Inside a pipe, the weldments provide a material that has a slightly different galvanic potential than the base steel.  The pipe itself provides a convenient return path.  So just add water in the right spot and -- presto -- garden variety galvanic corrosion.  Underfill your pipe for a few years because the field is depleting and it's small wonder that they have issues.

Jenks,

All pipelines have some amount of water in them.  You just can't completely eliminate the stuff.  Crude oil comes out of the ground with some associated water.  And diurnal breathing of storage tanks ensures that some moisture gets back into the finished product.  Many storage tanks are vented directly to the atmosphere to prevent a vacuum from forming as you pull from the tank and to prevent overpressure as you fill it up.  The day's high temp causes an ever so-small amount of air to get pushed out of the tank.  The night's low sucks in some (generally) moisture laden air which will condense on the nice, cool steel.  Repeat every day for the operational life of the tank.  Drawing water out of the tanks is a routine maintenance chore.

An intriguing thought is if Prudhoe is a harbinger: as flow rates decrease across the board, will more pipelines become more susceptible to corrosion issues?  Hmmm, inquiring minds want to know.  Pipelines are generally operated well into the turbulent region of flow for a variety of reasons, one of which is to keep water and other nasties suspended.  When flows start to approach the laminar region, the water drops out and starts doing its job as an electrolyte.

The amount of water that can create hell is quite low, especially if you have separation of the phases.  It will pool in low, quiescent spots and go to town.

Westexas.

You are right to repeat yourself, with or without modification. Keep posting this argument early every day.
Your effort will benefit all of us.  

Thank-you.

 

It looks like the GOP is pulling in all their chits to organize a full court press in order to talk down oil prices in advance of the mid-terms: the Saudi's, Exxon-Mobil,various servants, sycophants, touts and toadies (Yergin, Lynch and their ilk). Will we one day see hard evidence of market manipulation beyond the exaggerations and disinformation of these folks?  I don't know.  It doesn't take much to move a herd.  We're talking cows here, not cats.

As always, reality will out before long.

Yup.
With all the air time that Iraq, Iran, and Lebanon get, the most overlooked story in the Middle East is Saudi Arabia.  They have turned around 180 degrees, and have stayed completely below the radar.  5 years ago they had a monarch who did whatever the USA wanted, they undermined OPEC and drove crude down to the $20-$25 range, and they allowed the USA to set up their military on their soil.

Today, it is all different.  The new monarch has embraced oil at $60+, and has kicked the USA military out.  One of the unrecognized stories of the US invasion of Iraq is that the US had become deperate for a location for military bases after being expelled from KSA.  And the reason oil will never return to $25 per barrel is because KSA will now act in their own interest and not the USA's.  They are the swing producer, and they will swing.  If the market is flooded with oil, they will shut down production, and they have.  They are doing it right now.  They only need to export about 6 million barrels per day to run huge surplusses if oil stays at $60 per barrel.

The king is dead.  Long live the king.  ...or this is not your father's king.

A new king?  King Abdullah has been the defacto leader of Saudi Arabia since the mid 90s.  At that time he was Crown Prince Abdullah, but the reality is he's been in charge ever since Fahd suffered a debilitating stroke.  There has been no change of leadership in Saudi Arabia.  Maybe Abdullah has changed his mind on things, but, even if so, it's not a result of a "new king".  

I also think the Saudi about face is probably likely to their being unable to produce enough oil to keep the price down anymore.  

The mind set simply astounds me (and I've been studying for thirty years!)

Even if it were true that we had enough to supply expected growth through 2070 - is that really what we want to do?

Essentially they are saying its not a problem because its not a problem now. Go back to sleep, dear, its only the kitchen burning, I'll wake you when it reaches the hallway.

That is - and I've been studying it for thirty years!
I don't understand why the Saudis are so pessimistic, Michael Lynch says there are 10-13 trillion barrels available out there.  I say we just call it 50, a nice round number.
What we really need is some crack genetic engineer to figure out how humans can utilize photosynthesis.  Then, when we get hungry, we just go stand in the sun!
The interesting thing about these huge numbers is the total lack of estimated breakdown by region or country (probably because the absurdity of the numbers would be more apparent).
The Saudis won't elaborate on these numbers because they aren't being honest. These numbers are speculative and are, in my opinion, an attempt to prevent a move toward alternative fuel and energy technologies.

Also, perhaps the rulers of the Kingdom are attempting to quell the masses so that they don't revolt (which they will do when they realize their means of wealth and survival has been pumped "dry").

Tom Anderson-Brown

I have decided to announce an increase of 50 trillion to my personal brain cell reserve.

There, now I can drink more tonight.

speaking of theories that take a while to be believed:

http://www.seedmagazine.com/news/2006/02/the_reinvention_of_the_self.php?page=all&p=y

(we apparently do grow new brain cells)

LOL. Have a few for me; I'll be working. If I can sober up in the next 6 hours.

Rat

We haven't heard much lately from Bush about us being "addicted to oil".  The meme every day now is that we are fighting to save civilization.  To save civilization for what, pray tell?  

The only way to save the planet, and, incidentally, civilization, is to start getting off oil and all fossil fuels. All this talk about satisfying expected demand for 50 years is a guarantee that the lives of our descendents will be nasty, brutish, and short.

Of course, Mr. Bush believes that civilization is singular and that he is at its apex. Perhaps it is no surprise that he wants to save it. Consider, however, that what we may be witnessing is not the collapse of civilization as an abstract idea, but the collapse of a single variety of civilization, the one that eminated out of northwest europe starting some 600-700 years ago (depending on what events you want to count as the "start").
The problem with this statement by the KSA in these articles is not the volume of oil they mention, but the URR they are predicting.  KSA is not actually saying that there is more oil than previously thought, they're saying that we will increase URR by 20 to 25% and eventually extract even much, much more than that.  Most people here would accept an world-wide OOIP of 4 or 5 trillion with a URR of 2 to 2.5 Trillion.  If URR could be increased by 20 to 25%, as KSA is predicting in the second linked article, our URR would increase by around 1 trillion barrels.  To get to the other quoted number of reserves growing by 3 or 4 trillion barrels would require increasing URR to roughly 100%.  Of course increasing URR by even 20% is completely absurd.  If,, someone could invent a technology that truly increased URR by even 1 or 2%, they could stand to make a lot of money.
What we really need is some crack genetic engineer to figure out how humans can utilize photosynthesis. Then, when we get hungry, we just go stand in the sun!

Why Eat When You Have the Sun?

Claiming that the sun sustains him and provides him adequate energy, HRM has eaten solid food only about five times in the past 12 years. Once the nine-month process of proper sungazing is complete, HRM said that most people lose their sense of hunger and stop eating altogether. The only sustenance that is needed can be absorbed by walking barefoot on hot bare earth for 45 minutes each day.
Wow!  Who knew?  So staring at the sun can cure cancer, and tennis elbow!
Thanks!  I'm off to the beach...

:-) I thought you'd get a laugh out of that.

Haha! I like that! Thanks for the visual!
Go back to bed America, your government is in control again
Here, here's American Gladiators
Watch this, shut up

Go back to bed America,
Here's American Gladiators, here's 56 channels of it
Watch these pictuary retards bang their fucking skulls together
And congratulate you on living in the land of freedom
Here you are America
You are free to do as we tell you
You are free to do as we tell you

by that one comedian who died a while back, black hair, talked about drugs....I dunno-and from the song We Want Your Soul by Adam Freeland

Bill Hicks.
I wish he was still alive - but his material is still valid now.
Go back to bed America, your government is in control again
Here, here's American Gladiators
Watch this, shut up

Every once in a while I think about posting this on TOD, so thanks. We Want Your Soul indeed.

Platts also carries this story, here:
http://www.platts.com/Oil/News/8632705.xml?p=Oil/News&sub=Oil&src=energybulletin

"To put it another way, the world has only consumed about 18 percent of its conventional and non-conventional producible potential, even leaving aside oil shale potential. That fact alone should discredit the argument that 'peak oil' is imminent and put our minds at ease concerning future petroleum
supplies,"

This does not discredit PO, as it includes non-convential. I also wonder what the "potential" of oil shale really is.

Note he says "producible potential" not "recoverable" which I think is important.

I'm going to throw out some numbers here.  Someone please feel free to jump in with more accurate numbers as I don't have any source materials handy, though these seem to be in the ballpark.

Average Recovery rate of an Oil well: 50%

So if we've sucked out 18% - that means we've got 32% to go.  7% till we reach the 50% mark of recoverable oil.

Total World Cumulative production to date: 1.1 trillion barrels

1.1 trillion barrels divided by 18% * 100 = 6.1 Trillion barrels of Crude in the World.  This is my take on what he thinks is "producible potential"  

So 50% of that would be 3.05 Trillion URR.

Peak would occur then at 25% of the "producible potential" or 50% of the URR.

2006 Oil Production = 84 Million barrels/day = 30.66 billion barrels per year = .5% Usage rate per year.

So 14 years to the 50% (really 25%) mark.  Assuming we can get to ALL the oil and get half of it.  

Obviously a lot of the oil is trapped in places that you can't get too: like the middle of the Atlantic Ocean, or the Antarctic.  Deep water wells are more likely to have lower recovery rates too.

These issues all cut into that 14 year window.  

The ASPO estimate of 2010-2011 is probably pretty close as it calculates non-conventional.

Conventional Oil has probably peaked.

Oil shale from everything I have read is a Net Energy Loser.

 The 50% recovery you quoted is in the best fields with production managed for greatest recovery. Here in Texas the average recovery has been no more than 75%. This doest not   mean that we can get out the rest cheaply or easily. The original pressure has been dissipated through wasteful production and much oil is in tight, solution gas reservoirs that won't respond well to CO2 or waterflood.
  That's why the peak is imminent or in the near future. We won't run out of oil, just inexpensive oil and the reserves are nice, but not necesarily relevant when 3 billion more folks on the earth want to live just as wastefully as us Americans.  
Welcome to the new barter economy!

Red Ken, president of the Republic of London, cuts a deal with Chavez->

London would receive an unspecified amount of oil as part of the 1.3m barrels needed to run the buses each year. In return the mayor's aides would promise to "actively and efficiently promote Venezuela's image in the UK" by highlighting the oil deal's benefits for London's poor and by boosting tourism with advertisements on buses.

Caracas, it said, would also benefit from help in running its transport system and in fighting crime, using London's expertise in the use of CCTV, fingerprint technology and neighbourhood policing. Consultants would help with waste disposal, air quality and adult education.

Wow.
Let the barter economy begin!
So they trade a few urban planners and PR for a few million dollars worth of oil discounts a year?  Not bad.  Slightly reduces the chances that the US will try any more coups.  The cold warriors are retiring and supposedly the Repub's power is waning, but this is still a cause for concern, I'm sure - the idea of Bush searching for a 'legacy' scares me.

It may signal that Orinoco is looking like South America's Athabasca, and they want Caracas to look more like South America's Dubai.  Building things like CCTV into an urban infrastructure from the start is much simpler than adding them in gradually, and as for fighting crime - the lesson some people draw after reading 1984 is that in the end, they cought everyone.

"and as for fighting crime - the lesson some people draw after reading 1984 is that in the end, they cought everyone"

The saving grace of PO is that they may not.

As in Kunstler's words;  "They'll be having a hard time just answering the phones"

I look at N.O.  and Katrina and say,,, Hmm what if it was 10-20 large cities having a problem?

The only reason "Order is Maintained"  is that 95%+ of the people mind their business(right now).  

I think many police officers and Nat Guard folks would walk off to protect/help their own families.

If TSHTF,  and China,Russia, US are eyeing each other...

I would predict many satelites will just mysterously stop working.  You take one of your vehicles up there and just kinetically shoot a coupla ounce lug nuts at high speed at one of those "Spy Satelites" and It ain't working no more.

SO much for big brother's eye in the sky.

Each of them I bet have a lot of "Killer" satelites I would guess. (off on a tangent of "They caught everyone").

After Kat-Rita and what happened down there, I think they will have their hands full...  :-)

Just some random thoughts.

My apologies if this item already made it into another thread. It's an interview in Barron's Online (subscription required) with Peter Beutel, dated Tuesday (9/12).

Some excerpts...

BEGIN

Can Oil Prices Fall a Lot More?

By DIMITRA DEFOTIS

THOUGH HE ESCHEWS SUITS AND WORKS BEST in the wee small hours of the morning, Peter Beutel is one of the more quoted and televised energy pundits around.

He's in demand for his contention that oil prices will fall below $50 and could slink below $20 in the next several years, in part because oil has a storied history of not sustaining high prices for long.

Through the one-man Connecticut firm he founded, Cameron Hanover, he works with makers of aluminum, chocolate, paper and producers of crude to help them curb costs and place trades, though he doesn't trade for them.

He also writes a newsletter, The Daily Energy Hedger, and penned a book, Surviving Energy Prices.

Recently Barron's sparred a bit with Beutel, a son of the late WABC-TV news anchor, William "Bill" Beutel.

Barron's Online: What should a person interested in energy equities be thinking about now?

Beutel: This is a cyclical business and every time prices get very, very low, people somehow believe that energy prices will remain low forever. Similarly, when prices get very high, people start coming up with all kinds of high numbers that they say are the base. A chart of economic activity in the United States [is] an inverse of the price chart of oil.

Q: So what goes up must come down and vice versa?
A: For equity people to assume that prices are going to remain above $50 ad infinitum or even for 10 years is a mistake. I think that in five or six years we will see prices under $50, probably under $40, probably under $30 and possibly even under $20....When prices get very high, demand declines.

Q: So those talking about $200 oil if Iran cuts off the Strait of Hormuz, you think that they are being outrageous?
A: If we see something like that happen in 2006, then yes, we will go to a new high, and yes, there's a chance that it will be a triple-digit high. But after that, prices will come back down. I can't tell you what's going to happen with Iran. But I tend to feel somewhere between five and eight years from now, our conversation will not be how high prices are, but how low they are. And I do believe that the next bull market, whenever that occurs, possibly 10, 15 years out, will take us to high oil prices that are just unimaginable now.

Q: What does an investor do, what does a business owner do in the next 12 months to make money or to protect themselves?
A: Right now I am telling them, because of the uncertainty of hurricanes and Iran over the next six to eight weeks, that what they want to do is use call options to protect themselves so if the market moves higher, they will cap the amount that they will pay on the upside. But if something happens that pushes prices lower, they can walk away from that call option and buy at lower prices. And I'm also telling producers drilling wells today that they should buy puts, or find some way to lock in the selling price when that crude oil comes out of the ground three to six years from now. Because I think there's a very good chance prices will have gone substantially lower.

Q: What is the most interesting place in the world to watch regarding oil production?
A: Calgary, Alberta, because they don't have any political risk and because they are now producing oil from their so-called oil sands. They have more oil there than Saudi Arabia has.

Q: If oil prices go lower, do Canada's oil sands remain economical?
A: Not if they haven't hedged it. If they haven't locked in some of these prices, then they are out of business, so that's why it's an interesting place for me to watch.

Q: Do you think governments will continue to protect their oil profits if oil prices fall?
A: It's one of the most curious things: Governments tend to want to nationalize their oil reserves when prices are high, and then when prices are low, they also need some friends to help them find oil. So if we have reached a peak, then maybe that sort of move has reached its peak as well.

END

$20 oil. You heard it here first. (Grin.) (Double-grin, come to think of it.)

Sure, we could have $20 oil again -if we lob a zero off the US dollar!
We could also have $20 oil again if $20 becomes something that the average person can't afford.
Tarzan, That's the definition of deflation. Which is what I said in stated differently. ;-)
Ahso.  (apologies).
No worries. ;-)
Q: What is the most interesting place in the world to watch regarding oil production?
A: Calgary, Alberta, because they don't have any political risk and because they are now producing oil from their so-called oil sands. They have more oil there than Saudi Arabia has.

The no-political risk factor in Alberta is far too easily assumed. Even former premier Peter Lougheed, once the big driving force behind the oil sands, is now calling for a slowdown or even moratorium in the development.

Within 5 years the whole issue will become highly contentious, and come to a virtual standstill. It''s hard to predict what will be the ultimate cause, but the outcome will be the same.

Contenders:

  • skyrocketing development costs (Shell, Total have put projects on hold already)
  • lack of sufficient water
  • lack of naural gas (nuclear is a dead option, takes 10+ years to build, which is far too long)
  • too much overall destruction of the boreal ecosystem, you can't hide something on this scale forever
  • First Nations will raise their voices, and their landclaims

People now feel that the revenues outweigh the negative factors, but a lot of that is pure spin, the big money doesn't stay in Alberta.

Canada's green groups are pretty silent on the subject.
Peter Cizek explains why: they're being paid to shut up.
But someone will break that silence.

Don't forget that the town of Ft. McMurray itself has called for a moratorium on further development.  60,000-70,000 people in a city with infrastructure to support 40,000 is a train wreck waiting to happen.

And with Klein (the Premier) finally gone, the pro-business agenda just might take a haircut if pressure is put on Albertans to take responsibilty for the single-largest source of pollution in the country.

People now feel that the revenues outweigh the negative factors, but a lot of that is pure spin, the big money doesn't stay in Alberta.

It never does.  I drove through a valley south of Mt. Ranier in Washington State a few years back and marvelled that 90% of the large trees had been felled and hauled off.  This was at a time when frequent stories appeared in the press about the spotted owl and the hardships that logging prohibitions were imposing on the local economy. At that moment, it became clear that it wasn't the spotted owl that was to blame for people being out of work, but rather it was those high-rise, air-conditioned smoked-glass temples back East that were to blame.

What kind of idiot would cut every tree for miles around his home so quickly that he work himself out of a job?  But if you are a BSD with a corner office somewhere back East -- Hey, who cares, right?

Unfortunately, when all is said and done, large parts of Alberta will be virtually uninhabitable.  Don't believe me?  Take a trip through the Appalachia.

Right. The biggest complaint I have about cornucopians is their utter denial of the environmental destruction we are causing in the process of extracting resources from the 'cornucopia' of earth. In fact I get so mad about this I can hardly even talk about it sometimes.
cornucopians is their utter denial of the environmental destruction

And they think the alternative - powerdown is 'feng shui'

Re: Peter Beutel

"And I do believe that the next bull market, whenever that occurs, possibly 10, 15 years out, will take us to high oil prices that are just unimaginable now."

Note the excerpt above.  Though he sees $20 oil as a possiblity in the intermediate term, he says within ten years prices could be unimaginably high.  

But he gets paid for this. One clever man.
I apologize for the rough quality here. I couldn't find my good one. The pink circle is where I predicted prices from last January. I used this chart to give myself an idea(back then). I believe that line should have dipped just slightly if the last 4 or 5 weeks had been figured in. But I've got an update that I'll post whenever it is called for.

image002

These are 4-wk and 26-wk(approx 200 day) moving averages. I'm not sure if you can read that in the legend.

Tell me what else you can't read. Or any questions.

First time poster, three month reader of TOD.  Apologize for the length and if these are stupid questions, but haven't seen them explicitly addressed and they seem reasonably important!

I'm using the public access page for yesterday's IEA report, so those who subscribe to the full report would have the exact numbers and perhaps some of the answers.  

Eyeballing the charts, here's what I come up with:
    Supply    Demand    Diff    Aggregate
1q05    84.1    84.7    -0.6    -54
2q05    84.9    82.2    2.7    243
3q05    84.5    83.6    0.9    81
4q05    84.7    84.0    0.7    63
1q06    85.2    84.8    0.4    36
2q06    85.0    83.2    1.8    162
3q06        84.7       
4q06        86.0       
1q07        86.4       
2q07        84.7       
3q07        85.9       
4q07        87.6       

+ The first 3 numerical columns are millions of barrels per day
++ The last column is the difference column x 90 days
+++ I had to fudge demand down from how I'd read the graph to reproduce the stated 84.7 and 86.2 averages for 2006 and 2007

1.    The web page implies that OECD crude stocks declined 8mb in July.  What has the history been of OECD crude stocks for the last six quarters?  Has the change in OECD stocks replicated (or correlated closely to) the implied aggregate differential between supply and demand above?  If closely correlated, can we interpret that July production is already falling short of the 3q estimate of 84.7mb/d demand?
2.    Even by the IEA's own numbers, demand over the next 6 quarters will average 85.9 mb/d or roughly 0.7 mb/d higher than the highest quarter of supply (1q06).  Has there been a comparable situation in recent years where projected demand could only be met by record supply?  Is there any commentary in the report (or other IEA documents) about exactly where the 85.9 mb/d will come from and is it credible?
3.    How much of the 2,668 mb of stocks is crude vs products?
4.    Are the IEA reports on stocks of crude the best/first place where a shortfall of production would become visible?  Is there a better place to get an accurate and timely read on the reality of supply vs demand?

It seems we will soon test whether suppliers can raise the plateau to 86 mb/d!

Welcome aboard.

Freddy Hutter's your man on IEA. Stuart is on vacation. I personally use only EIA and BP. You've got a lot of questions.  I'm looking at them. I'll try to post later on. But I'm sure you'll get a bunch of feedback in the meantime.

I also have questions about the IEA report. I have also read, unconfirmed, that Cantarell in down to 1.76mb/d in July, that FSU output is now 9.8 mb/d, but exports are down to 4.35 from 4.8 mb/d. Also read, unconfirmed, that Kuwait is down 300,000 from 2.6 mb/d, and that KSA is down to 9.0 from 9..6 mb/d in August and September. Also read that the UK  is down 18% for the year. Norway is also down. The US is down 5.8% as of September as per the EIA.  Reconciliation is in order but we should all try to find out the facts separate from hype, bias, beliefs, and politics.
Once I read that IEA was now including biofuels etc., I lost confidence in their numbers (since with such low EROEI numbers, the fuel is probably counted twice).
It's not that clear.

About 88% of biofuels are ethanol. Something less than half of this is dervived from sugar cane, which may have an EROEI of as high as 10.

However, even for biodiesel (which may have an EROEI of 4ish) and grain-dervived ethanol, very little of the energy input is oil. To the degree that they are using coal and natural gas, they are consuming large amount of energy to produce not much more - but it is not petroleum, so it is not double counted.

Sorry for the poor formatting: the numbers for 3q06 thru 4q07 should be in the Demand column.
Curmudgeon & CEO - in response to both your posts:

My gut feel on this is that high prices are cutting into demand - maybe not in the OECD - but throughout poorer, non-producing countries.  I think that is one reason why demand has been more or less flat this year.  With high prices - why should demand increase over the next 6 quarters?  So my guess - we move sideways at 85 mmbpd. Price will then depend on surplus capacity and whether drilling and new projects keep ahead of decline.  If they don't, price will go up and cut further into demand. And that's it - peak oil.

I see the IEA are looking for an energy analyst - Paris can be nice in the spring.

These poor countries being priced out will begin to creap up the ladder of countries and when intermediate countries that are marginal begin to complain, we know's it's on!  That of course is determined by exports available for sale.  The thing is, how many people can Chindia add in addition to the losses from these poor and intermediate countries?  If Chinida's demand is growing faster than the the rate of countries not being able to pay, then it's THAT much worse.
I'm trying to work out what the geo-political pattern might be.  Its easy to stick the OECD on top, followed by wealthy net energy producers - oil exporters and to put poor developing countries with no energy on the bottom.  Working out the relative market strength of the BRICs is more tricky - though oil consumption was down in India last year.
Consider, too, that its not just a country by country concern. We often talk about China as if all 1.2 billion had suddenly joined the industrial economy. When in reality the "middle class" in China is probably not more than 200 million - and that middle class would look poor to most americans. The coastal areas may be okay with $150 bbl oil, but what happens to the hinterlands?
THe data also shows that OECD stocks are down one day's coverage, say 85mmb.  So, over the past year, OECD stocks have been part of the supply, about 250kb/d. Obviously this can't continue indefinitely, but is nevertheless murky; the depleted stocks may be mostly in countries too poor to replace their stocks, so for them po has past and they  are on a very rapid downslope.

US stocks are themselves highly misleading. First, they are compared with the 5-year avg. But, consumption has been rising over 1%/year, say 3% over the past 2.5 years, so stocks should logically be around 10mmb above the avg just to maintain the same number of days cover. Second, 12mmb from the SPR has not been replaced - not very bearish to move oil from the SPR to commercial stocks, in fact bullish, because these stocks will eventually be replaced, probably after the election.  Third, oil futures are higher than spot, and have been for a couple of years. Standard for gold markets, this is highly unusual for oil (there may be some po converts among the buyers), and encourages refiners to hold more stocks than usual.  Since this effect will continue as long as the futures stay higher, the level of stocks is an economic effect, not necessarily a short-term one, and high stocks is therefore not an indication that buyers are about to reduce buying as it was in the past.  So, in this case high stocks is neither bullish or bearish, just as the US desire to have a spr is not bullish or bearish, because it is filled.
OTOH, the stated desire of the Chinese to fill their SPR with 100mmb is bullish.

It would be great to have a more complete picture of stock levels.  However, we do need to be careful how to read the data.

High stock levels at time of plenty can be a sign of glut.  High stock levels at time of famine can be sign of shortage - hoarding.  I think its probably right that the poor countries tanks will be close to empty - whilst the rich countries tanks are close to full.

On reflection, by definition the OECD are the rich countries, so allowing their stocks to decline to ten year lows, and around 85mmb under last year, is a sign to me that they will be buying more soon.  This amounts to 250k/d just to avoid running stocks down further, or 500k/d to get stocks baek up to where they were last year in one year's time.
The world has tapped only 18 percent of the total global supply of crude, a leading Saudi oil executive said Wednesday, challenging the notion that supplies are petering out.

Well, one thing you can say is that we do not lack for diversity of opinion.

So if global oil (either conventional oil or total liquids) climbs next year, it will be easy to say "not peak yet" - but I wonder if it one of those measures falls, how compelling the "not peak yet" argument will be ..
Remember: 2 - 3 mbpd off line unrelated to geology in Nigeria, Iraq, Venezuela vs. where they could be.   Largest potential by far is Iraq.  Moreover, huge number of new projects scheduled to come on line in next few years per Skrebowski.   Peak not here yet, regardless of any productions numbers seen so far.
"Remember: 2 - 3 mbpd off line unrelated to geology in Nigeria, Iraq, Venezuela vs. where they could be."

You could also argue that horizontal drilling in fields like Ghawar is causing oil to be produced earlier than it would otherwise be produced, and there is also the unconventional aspect, which is included in the production numbers but which does not fit the model.

Based on the HL method, Saudi Arabia and the world are where Texas and the Lower 48 were at when they peaked.  As predicted, Saudi Arabia and the world are declining.  

As I have repeatedly said, I have trouble seeing how we are supposed to have higher production when the four largest producing fields are almost certainly all declining.

One plausible scenario that brings Iraq fully online?

Stability is what's needed. Any route still available to stability has massive downsides. Some could be so bad Iraqi production wouldn't even be needed.

So if global oil (either conventional oil or total liquids) climbs next year, it will be easy to say "not peak yet"

No, not exactly. Propane and Butane production could and likely will increase dramatically in the next few years. Also ethanol and biodiesel production will almost certainly increase. And all these are included in "all liquids". However the peak of crude oil will determin when peak oil happens. The EIA, IEA and a lot of other people are harping on and quoting "all liquids" figure in a vain effort to keep the numbers climbing.

Worldwide, natural gas is far from peak. Even Bangladesh has natural gas and producers are now fighting for leases in that country. Qatar has massive amounts of natural gas and is now gearing up in hopes of dramatically increasing production. And since propane and butane, and even naphtha comes up with the natura gas, and is easiely seperated by using low pressure fractionation, we can expect to see a massive increase in the "other liquids" portion of "all liquids" in the coming years.

I have no doubt that the "other liquids" portion of "all liquids" have not yet peaked. However that is all just a smokescreen. Crude oil is all that matters here. Well, crude + condensate anyway.  

Ron Patterson

What I was really going for was that if inputs to our total stream satisfies "conventional uses" for some time, people will say no peak.  They might even argue for successful transition.

Peakers would of course be tracking the depletion part and the  long term potential of those other liquids.

Great article in Money Week.

Why we must take Peak Oil seriously

"The fact of being in 'Post-Peak' will bring about explosive disruptions we know little about, and which are extremely difficult to foresee. And the shock waves from these explosions rippling throughout the financial and industrial infrastructure could have myriad unintended consequences for which we have no precedent and little experience.

That is a point I have been trying to make for years. The very fact that the world realizes that the availability of crude oil will now decline forever will bring about unforeseen consequences. Nations, markets and people will behave entirely differently because of the fear of dwindling energy supplies and food supplies. The very idea of a "gentle downslope" is patently absurd in my estimation.

Ron Patterson

Hmm.

I agree that wide recognition of near-term peak would bring many changes.  Like everyhing under the sun, good and bad ideas will be thrown around.  Maybe we'll get some kind of automobile MPG mandate that acually works, for instance.

On the other hand, the last line about a gentle downslope seems like a non-sequitor.  Or at leat it implies a spectific behavior.

You assume that when peak oil is recognized, oil producing companies will turn off their production in a rapid fashion?

You assume that when peak oil is recognized, oil producing companies will turn off their production in a rapid fashion?

Production depends on social stability and security. When TSHTF, people panic. That could quickly send us off a cliff, regardless of how much oil is left in the ground!

odograph, you also assume that most oil is produced by oil producing companies. Only indirectly as most oil is produced by oil producing nations. And even where it is produced by oil production companies, such as in Nigeria, the government of these countries can decide at will to cut back on production.

Nations will begin to husband their oil when it becomes obvious that we are post peak, you can count on. In fact Kuwait is already contemplating such a move. There is a movement in the Kuwaiti parlament to limit production to 1% of reserves in order to save the oil for future generations.

Also, no doubt, there will be resource wars. Well, there are already resource wars in Angola, Nigeria and Iraq. But it is likely you ani't seen nothing yet.

Ron Patterson

actually that was a companies/countries typo (freudian or not)

but anyway, that might not be bad news from a market response standpoint.  we'd get an artifical down-blip on depletion, triggering mass conservation, and better husbanding of the remaining resource.

maybe.

predictions are hard, especially about the future

maybe.

May be this, may be that, may be, may be, may be...

Why worry?
Let's party.

>Nations will begin to husband their oil when it becomes obvious that we are post peak, you can count on. In fact Kuwait is already contemplating such a move. There is a movement in the Kuwaiti parlament to limit production to 1% of reserves in order to save the oil for future generations.

And they are not the only ones. Canada and Australia also have had similar discussions.

BTW: Any news from your son about ghawar production declines?

BTW: Any news from your son about ghawar production declines?

No word yet but I just posted him the following email. I will post his reply if I get one. He is somewhat interested in the subject but his wife goes beserk when I mention peak oil. She has two small children and does not wish to hear about anything that might adversely affect the rosy future she imagines for them.

Ron Patterson

The post:

Just a couple of questions. You said two other guys besides you read the copy of Twilight in the Desert I lent you and one of them had some problems with the "barrels per day" given in the book. Do you recall the details of this? What was his quibble.

Second, I doubt if you will have any idea about this but someone wanted me to ask you anyway, as I know you work in the north instead of the south where Ghawar is. We are hearing conflicting reports about Ghawar barrels per day. Some are saying it is around 5 million bp/d. One Aramco insider at a recent conference said they were having trouble getting 3 million bp/d from the field. Have you any input on this. Perhaps the same guy that had the problem with the book will have some idea.

At any rate it would be greatly appreciated if you would ask around.


I just received a reply from my son in Saudi Arabia:

No problem.  I'll do some asking around when I get back to work next week.  I'll also ask my buddy to elaborate on his quibbles.  Talk to you then.

Thursday and Friday are the weekend in Saudi Arabia, so he will be back to work on Saturday.

Ron Patterson

This is my reply to the above:

Fantastic! ANY information you could glean from anyone would be greatly appreciated. No official information comes from there. Everyone is guessing about everything. The big debate here right now is about Saudi porduction. Saudi says they are cutting back to about 9 to 9.2 million barrels per day because they have no buyers. One guy here, who is actually in the oil business, believes every word of it. Others like me, say they are producing every barrel they can and are just lying about it.

My position is: Saudi was the number one producer in the world. Now Russia is producing about 9.4 million barrels per day, ahead of Saudi. They are #2 now. They say it is by choice, because they simply cannot get buyers for their oil.

Is that truth or is that bullshit. I vote for bullshit. Now I really don't expect you to answer that question but you might get a few opinions.

Again, Thanks a million,

Dad


Thanks so much.

Darwinian,

Can I just ask how you get the shaded box to "quote" passages?    It's far clearer then using Italics, which is the best way I know how right now.

Many thanks,

Garth

It is simple. Before your quote you place < blockquote > and at the en you place < /blockquote > Remove the spaces between the chevrons and the word blockquote of course. I had to put them there else they would be interpeted as html commands. Or, just look at the commands after "HTML formatted" below your type box and it will give you all the HTML commands you can use.

Ron Patterson


Woohoo!

Thanks!

Garth

I will point out that a developing nation, with 91 million people (mostly rural) and only 3% of the US's 2005 GNP, backward technology, managed to build subways in it's major cities and electric urban rail in most towns of 25,000 or more.  Over 500 cities and towns in just 19 years !

That nation ?

The United States of America from 1897 to 1916.

Sorry, I don't think something we did while we while on the upslope of the resource peak can be compared to what it will be like on the downslope...with a population more than three times larger and much fewer resources to go around.

A big part of the problem will be Tainter's diminishing returns.  You see it even with highways.  We could not build another Interstate system now.  Building a new road (or railroad, or subdivision) on  forest or farmland is relatively cheap and easy.  Retrofitting it into existing development is a huge PITA.

Are our various resource peaks really that synchronized?
No.  We're probably past peak on almost everything, but as long as you have cheap energy, you can import or create substitutes. Which is what we've been doing.  
Why is everything so cheap then?
READ, not even think, just READ Leanan :

as long as you have cheap energy, you can import or create substitutes.

No more cheap energy NO MORE "everything so cheap".
Your "masters" are probably not too satisfied with your performance in disinformation.

Leanan... The actual amount of resources they were using back then would have been way down on what they use today, so your point about being at or past peak is what?
It's exactly what you said.  We had a ton of resources and weren't using much of them back then. Today, we have far fewer resources, and are using a lot more.  Supply and demand have changed since we built the railroads, the streetcars, the Interstate system, suburbia.  And not in a way that favors further building.

This is currently masked by globalization - which is, as Heinberg and others have pointed out, a way for us to take other countries' natural resources because we've used up our own.  We can simply outbid everyone else.  But clearly, this can't go on forever, even excluding a dollar collapse or some such financial crisis.  

I disagree. In order to build railways etc we need ACCESS to resources not just STRANDED resources. We may have had more stranded resources in the ground, but we didn't have the infrastructure. Today we have the infrastructure, so even in 2020 we will have access to more resources than we did back then. So, provided we have the will, we can do anything we did back then utilising a lower proportion of the resources we have access to today. Indeed we also have improved technology today, so we may be able to do these things more effeciently.
Leanan,

You are right to highlight the difference between pre and post oil peak realities.

I don't agree with the suggestion that riding the downslope we will be crippled by a lack of resources or insufficient available energy to expand low consumption transport alternatives, such as Alan advocates.  

First of all no forest or farmland is required.  We have a surfeit of roads as it is.  There is every reason to expect rail lines down the middle of existing expressways, blvds, and mainstreets, with plenty of room left over for bicycles, emergency vehicles and even a remnant of motorized individual transport units.  Many freeway rights-of-way have ample green space waiting for intensive fume free permaculture.

I have argued before and will again that nothing will do more to secure long term food production than peak hydrocarbons, though I fully expect that agriculture will maintain access to hydrocarbons longer than competing uses.

The size and growth of the human population is also cited as an insurmountable problem.  I certainly regret the impact it has had on the natural environment, but nature is resilient and will recover.  In the meantime we can already see the population peak in sight as the world's population ages and birth rates fall.  Even then, most of these people represent a means to turn solar energy into mechanical work.  In the present pre-peak era, far too much of that solar energy is being converted into excess fat, which in turn leads to other energetic demands in our hospitals and elsewhere.

The question really is: will the downslope bring eternal chaos, as doomsters proclaim, often with reference to obscure tooth and fang 'science'.  The experience of the Great Depression brought the New Deal to the USA and universal medicare and other social programs to Canada.  The theme was cooperation, not the 'tooth and fang' competition that existed in the 1920's and has reemerged in recent decades as hydrocarbon/energy production has surged.

There will be a change of consciousness with peak oil and there is every reason to believe it will be for the better, with people, out of self-interest, choosing cooperation over competition.

The United States is in a way particularly fortunate that the merchants of greed, deceit and destruction are in the saddle at the point in time.  All the better to discredit their entire ideology, when, as others say, TSHTF.

I don't agree with the suggestion that riding the downslope we will be crippled by a lack of resources or insufficient available energy to expand low consumption transport alternatives, such as Alan advocates.  

I think we will.  Prices have spiked, not only for fuel and asphalt, but for steel, concrete, aluminum, silicon, etc.  If suddenly everyone in the world is trying to build wind turbines, railroads, nuclear power plants, hydroelectric dams, solar panels, electric cars, etc., there will be massive shortages.  And the tight energy supply will not allow us to easily expand production.

There is every reason to expect rail lines down the middle of existing expressways, blvds, and mainstreets, with plenty of room left over for bicycles, emergency vehicles and even a remnant of motorized individual transport units.  

I don't see the political will to do that. Even if all the gas stations are dry and only Bill Gates can afford to drive, people will think it's temporary, and politicians will encourage them to think that.  Don't worry, soon we'll be back to the happy motoring lifestyle again.  An SUV in every garage, as soon as we "liberate" Saudi Arabia.

Railroads imply a completely different pattern of settlement.  Most voters do not currently live areas compatible with rail, and so will resist it.  Until it's too late.

If suddenly everyone in the world is trying to build wind turbines, railroads, nuclear power plants, hydroelectric dams, solar panels, electric cars, etc., there will be massive shortages.

That's the point I was trying to make yesterday by questioning the feasibility of large scale wind turbine and solar panel manufacturing. Apart from political will, which is to a degree abstract, there are practical constraints that make it, as far as I can see, impossible. The same goes for massive investments in railroads. It would take many years.

The processes required for mining, production etc. are too energy intensive, the raw materials are much scarcer, there are other countries that compete for them (25% of all steel goes to China today). Even if you could get the raw materials, they would be so excessively expensive, that a bankrupt nation such as the US would never be able to make that investment.

Let alone trying to do both the wind turbines AND the railroads. You need production facilities, skilled workers.... 1930's Germany could do it, but they had other disadvantages..

Well, I'm with you, then.  You may have noticed I frequently post articles about how the energy crisis is affecting mining, manufacturing, etc.  

I'm in the infrastructure business, you could say, and the price increases have been insane.  We haven't seen anything like it since the '70s.  Concrete bids are coming in three times what we expected.  There's talk of companies hoarding steel.  

Then there are the problems that come with high raw material prices, like theft.  People stealing air-conditioners from windows for the copper, manholes from the street for the iron, bleachers from parks for the aluminum, and even digging up three miles of railroad track for the scrap steel.  

I think we're going to have a great deal of difficulty maintaining our current infrastructure, let alone building new.

A sharp recession, with housing starts of 500,000 (mostly smaller, 1,000 sq ft), new autos at 6 million (avg weight 2,350 lbs)/year and a stop to highway building will free up large amounts of materials for wind turbines and rail.

Give me half the steel that autos & trucks use each year for new (and most of the scrap), half the copper used in autos & housing and the concrete & steel used for new highways and I will not have a materials shortage for what I want to build.

Give me half the steel that autos & trucks use each year for new (and most of the scrap), half the copper used in autos & housing and the concrete & steel used for new highways and I will not have a materials shortage for what I want to build.

Sorry, it's all going to China.  ;-)

Alan, with the kind of economic downturn you describe it's hard to see where the money would come from. Also, as I mentioned, you'd have the fight with the wind guys over your resources. And Leanan's Chinese friends. And we need to build LNG infrastructure and tankers. And and and.

There are lots of good ideas out there, but no room for all. So is rail more important than wind?

Besides, nothing will be built in the US in the present system unless it's for profit. The one that is highest. Anything that makes sense in a social or political way, will be trumped by other interests. Last but not least, the power of the roadbuilding business should not be underestimated. They ain't stepping aside in silence.

Please reconcile these two statements:

1)"nothing will be built in the US in the present system unless it's for profit"

2)" the power of the roadbuilding business should not be underestimated. They ain't stepping aside in silence."

If I might make an investment suggestion, while we're sort of on the subject, try railroad/railcar supply interests. Nothing to disclose, since all my investment is in insulation, ground source heating, pellet stove backup, rooftop garden, and a library card.

To "reconcile" WHAT?

The roadbuilding business is here FOR PROFIT and will fight tooth and nail to keep going the wrong way at the cost of any lobbying and subsidies that can goes.
NO CONTRADICTION.

Damn, I love it when you talk reality
Actually, as someone else pointed out, a lot of contradictions, when we try to believe every fear at once.

What the heck happened in the 30s?  A down turn, idle people, idle material, idle capacity ... and public works.

I swear, you guys have to work hard to see a future where we all just sit on our bottoms.  Is that really what you'd want us to do?  Is that what you'd take to the streets to have us do?

What the heck happened in the 30s?  A down turn, idle people, idle material, idle capacity ... and public works.

And as others pointed out, it didn't do much good until we started selling weapons to both sides in WWII.  Way to jump-start an economy.

Except we're not manufacturing nearly as much these days.    

Is it my imagination, or are arguments of doom always a succesion of moving goalposts?

First we have to worry about peak oil.  Ok, fine.  I do.

But we can't respond to peak oil becaue we have to worry about other declining resources.  Ok, fine.  We consider how to restructure our economy to deal with it.

Then we have to worry that restructuring an economy doesn't work without war.

Is that really where you wanted to end up?  Will you take to the streets and call for war?

Is it my imagination, or are arguments of doom always a succesion of moving goalposts?

I'd say it's more your lack of imagination.  ;-)

The reason I'm concerned is the big picture.  If it was just a problem of a lack of oil, I would not be concerned.

Is that really where you wanted to end up?  Will you take to the streets and call for war?

No, but I'm warning you - a lot of others will.  Be prepared.

Alan

I'm with you.  Think of the Zillion of cars we have.  Man that's a lot of material for handy people to get a hold of.  Wiring, Gears, ALL KINDS OF NEAT STUFF !  

Don't worry about a shortage of Lead,  pick any parking lot and I'll give ya quite a few pounds of Balancing Weights.

Like that guy Dimetri (whatever) talking about tips after Russia collapsed,  Houses, Buildings, EVERYTHING not used will be Deconstructed(carefully taken apart, NOT with sledhammers and bulldozers).

We have enough bricks, 2x4's and everything.  When the "Compression" comes(it's starting already) kids moving in with parents, parents moving in with Kids) there's going to be many empty unsellable houses mark my words.

Look how long Cuba kept those 55-57 Chevy's running.  We could survive on the accumulated junk we already have.

Taking it apart and reusing it for other things.

Oh, ya,  Random question for everyone.

How long does everyone think those solar panels you see on the side of the road on a pole(in the US) will last before they are er.. "Re-assigned"?

John

What would you think would happen if a Solar MFG plant who today makes 1000's - 10,000's of panels per month got an order for 1 million panels?

Sheeeeit,  just think if overnight people got the renewable religon?

How many years would it take them to ramp up and produce them?   When there are shortages already of many things.

Ain't gonna happen without a number of years of supply chain development.  

$.02

john


How fast did we ramp up production of airplanes for WWII?
Very different motivational context, the government was PUSHING the "ramp up" not going toward any other goal (keep existing big industry happy).


The processes required for mining, production etc. are too energy intensive

This is why I'm not a fan of gold equities post peak, but am a fan of bullion.  Extraction of low grade ores just won't be feasible.

"If suddenly everyone in the world is trying to build wind turbines, railroads, nuclear power plants, hydroelectric dams, solar panels, electric cars, etc., there will be massive shortages.  And the tight energy supply will not allow us to easily expand production."

Clearly, Leanan, you lack the basic american economic belief that we can produce our way out of any problem. What are you, some commie or something?

What are you, some commie or something?

I guess so.  I find myself envying France.  They did the right thing: built their tidal power plants, nuclear power plants, etc., when petroleum was cheap.  

Of course, we would never do that.  Why build expensive nuclear power plants when fossil fuels are cheap?

I just can't bring myself to accept nuclear. I know that the technical aspects are safe. But I also know people and don't trust that aspect of the process. And until the US can come up with a better plan for disposal than depleted uranium munitions, I don't trust that aspect of the process either.

But I'm with you on the planning aspect - one reason I hold little hope for all the "transition strategies" that folks are fond of posting here.

accept nuclear. I know that the technical aspects are safe.

Really?

Then why the Price-Anderson law in the US?  Why 3 mile island?  Why Chrenoble?
http://www.pbs.org/safarchive/4_class/45_pguides/pguide_803/4483_rudolph.html
  Why the Yucca Mountain flap in the US?  Why Sellafield?
http://en.wikipedia.org/wiki/Sellafield

On what BASIS do you 'know' about 'safety'?

Did you actually read what I wrote? or did you see the words nuclear and safe and "go off"? Go back, look again, I'm on your side! It's the human aspects that create the risk and we can't avoid that. Geez.
The techninal aspects are not safe.   Any valid engineering effort designs for the failure modes.  
"I guess so.  I find myself envying France.  They did the right thing: built their tidal power plants, nuclear power plants, etc., when petroleum was cheap.  "

Well someone tried to tell us back then when we had time too.

If ya'll haven't read it in a while take a minute and read or re-read the famous;

Jimmy Carter's Sweater speech

Jimmy Carter delivered this televised speech on April 18, 1977.

http://www.pbs.org/wgbh/amex/carter/filmmore/ps_energy.html

"They did the right thing: built their tidal power plants, nuclear power plants, etc., when petroleum was cheap"

Any idea of their replacement schedule?

Any idea of their replacement schedule?

Yup! These won't last, problem...

Checking the latest issue of ENR, rebar has increased 6% in the past year, steel piling 16% and stainless steel sheet 10%. However, it's 2004's 46% jump in rebar prices that the industry has never recovered from. Seems most price increases had leveled off to an extent, although they are rising again-except for lumber and, I think, concrete.
Anything petro related has skyrocketed however.
Unfortunately, plastic crap from China is still cheap. Until that changes, most folks won't notice.
Hello Optimist,

Then Americans will hopefully be so frugal that we will even reuse plastic-coated dental floss.  Makes one wonder when a new plastic toothbrush = $100.

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

"If suddenly everyone in the world is trying to build wind turbines, railroads, nuclear power plants, hydroelectric dams, solar panels, electric cars, etc."

Oh come on.  All we have to do is stop building baseball stadiums, convention centers, vacation condos, interstate highways, conventional automobiles, and there will be plenty of resources to build all the useful things.

Hell, just take half the money we spend on on road projects, or all the money wasted each year in Iraq, and we could build whatever we want.

Extremely big mistake to mistake a shortage in refined silicon cyrstals and the element itself ...

And on aluminum, I'll believe it's a shortage when it doesn't come free with every can of soda.

(Basically, it is all still cheap, just not as cheap)

And on aluminum, I'll believe it's a shortage when it doesn't come free with every can of soda.

It ain't "free" but "Do you have math for how soon this is going to hit?"

LME Official prices, US$/tonne for 13 Sep 2006: Cash buyer 2,417.50

By 2001 the aluminium can weighed about 14.9 grams.

That makes for 67114 cans per tonne at an "aluminium cost" of $2,417.50 / 67114 = $.036 per can.
3.6 CENTS, versus the total cost of any soda can.
Pepsi & als can bear doubling or tripling the cost because it will still be much less than alternate solutions.

The mechanical manufacturing industry CANNOT bear such increase without compromising their own economic outlook or the economic outlook of their customers.

You're gonna get fired soon if you cannot keep up properly with your counter propaganda.

I certainly regret the impact it has had on the natural environment, but nature is resilient and will recover.

Certainly, nature always overcome it just needs a few millions years.

often with reference to obscure tooth and fang 'science'.

This IS science and it is not "obscure" except to the obscured minds and ignoramuses.

We are NOT living on the same time scale as geological/biological selection process.

Dominant as no other species has been in the history of life on Earth, Homo sapiens is in the throes of causing a major biological crisis, a mass extinction, the sixth such event to have occurred in the past half billion years. And we, Homo sapiens, may also be among the living dead.

The US built, with PRIMITIVE technology, 550 streetcar systems by 1930 (most by 1916) into existing streets with coal, mules,  and sweat.

We are at no risk of ´Peak Lawyer´ (unfortunately) and there are mountains of designs waiting to be built (perhaps $120 billion worth, and more quickly after that).  After that there will be some PITA projects, but with enough lawyers & engineers they can be built.

I remain convinced that we could build dramatic amounts of Urban Rail quickly.

Stick with it, Alan.  You're on the money.  The public interest will out.  It might be defined in the US as a defence program, but it will happen big time.  It's already started and the base of knowledge and skills are expanding with every new urban rail project and every additional intermodal terminal.  While I hope that humanity will ultimately experience the withering away of the state and the end of dominant financial interests, in the short to medium term (i.e. long after my personal fertilizer production ceases) these forces will align themselves with a program that will maintain labour and consumer mobility and the transport of goods.

As I said in an earlier post, when does one hear the derisive term 'railroad buff' any more.  Twenty-five years ago we were romantic partisans of a past age and every media report included the term 'buff', today we are mainstream and the opposition is daily weaker.  Tomorrow, we will be laying track down the middle of the asphalt road.

Yes, Alan!  And that era is fondly recalled by many authors and architects as the City Beautiful movement.  Many of our loveliest buildings and urban landscapes were conceived during that brief 20 - 25 year period.  Many remain with us to this day as symbols of an age when Americans strived to match European cities in urban vitality.  Sadly, just when the City Beautiful movement gained momentum, World War I struck, and that event, plus the dawning of the age of the automobile, brought it to a sudden and premature end.  Once the car became affordable for many Americans, our priorities changed, and our urban areas suddenly had to begin to accommodate our cars.  One can argue our cities have never recovered.

Alan, I'm sure you agree that there is only one thing standing in the way of the kind of reinvestment in rail transportation you envision and which the nation desperately needs:   the lack of political will to do it!  The enormous sums of federal dollars for auto infrastructure and airports reflects the clout these industries have enjoyed for so many decades.  Conversely, passenger rail has suffered because it simply did not have the lobbyists to throw money at politicians.  When the political will is there, rail will effectively compete.  I have no doubt about this.

Erwin

Erwin, you're right and right on. Rail, even rail running on diesel is a hell of a lot cheaper than the fantastic costs of building and maintaining roads, let alone wars of conquesr for oil. But the secret is sell the Bushes some rail road stock. Unless this current bunch gets their vig they won't do a thing.
Conversely, passenger rail has suffered because it simply did not have the lobbyists to throw money at politicians.

For Americans the first step toward solving impending troubles is of course to GET RID of lobbyism, but that goes against the intentions of the Founding Fathers.

Quotes from the above link :

Americans are conditioned to see our present form of government as a representative democracy. We're almost incapable of understanding that:
  • we live in a plutocracy

  • the United States Constitution was deliberately constructed so that the nation is ruled by the wealthy
...

George Washington was the richest man in America, a man who enslaved 216 human beings who were not emancipated until after he and his wife had both died. Benjamin Franklin had a personal fortune worth at least $20 million in today's money. He was a champion of the Quaker plutocrats in Philadelphia and vigorously opposed the democratic western farmers of Pennsylvania.

...

Civil strife due to class conflict continued throughout the war in Delaware, Maryland, North Carolina, South Carolina, Georgia, and Virginia. The working class was seeking what President Lincoln would later describe as a government of the people, by the people, and for the people, whereas the wealthy class was seeking a plutocracy.

When the whip come down, there'll be nothing gentle, no. And a lot of unforeseeable events.
But some are not quite so hard to predict. The drop in exports will be rising exponentially. You're not going to sell what you need for yourself.

For what is left on the market, governments will set priorities. They are the first priority, and will feel justified in stating that. Essential services will take a huge chunk. You need to guarantee police, healthcare, etc. for a long time into the future, which becomes a crucial point when that future is increasingly uncertain.

The military is the key factor. They'll want a guaranteed supply for at least 10 years (active years). Social upheaval can occur anywhere, but is fairly certain in Mexico, Saudi Arabia, countries that rely on oil revenues for a large piece of their income.
And once you start talking about decline rates of 40% for 2007/8, it should be clear that things can move very fast.

I'm not sure I follow your reasoning that social unheaval is fairly certain in countries that rely on oil exports.  If oil prices increase faster than the exports fall, then they will be raking in more money, not less.  Upheaval seems more likely in countries that depend on oil imports.  Imagine paying more and more wealth for less and less energy.

I'll grant you that Mexico may be in trouble because they have the risk of depleting at a faster rate, and because they may very well get squeezed by fast depletion in the next couple of years while world supply is more comfortable.

I'm not sure I follow your reasoning that social unheaval is fairly certain in countries that rely on oil exports.

We're talking about fast reductions in production (Ghawar, Cantarell) PLUS increased domestic consumption PLUS hoarding much of what is left after the first two points. Westexas and Khebab's Export Land Model on amphetamines, if you will.

Oil revenues will plummet in countries that have been "politically propped up" by black gold, a veneer of stability. Saudi Arabia has seen large increases in oil revenues lately, but will in all likelihood still not be able to prevent a budget deficit (they've had those for years now). Mexico is teetering on the brink of major unrest as we speak. If your by far biggest oil field is not just declining, but downright collapsing, as Westexas indicates, there is no way out.

>Oil revenues will plummet in countries that have been "politically propped up" by black gold

Roel, I would like to add:

If KSA, Mexico, etc has a production collapse the people of these countries are likely to revolt because:

  1. Gov't services and aid will decline preventing thier population from maintaining their current lifestyles. If people can't put food on the table it does leave them with many options.

  2. The people will see that they were lied to by their gov't and will be pissed that the ruling families/parties have pissed away there only valuable natural resource that could have been husband and provided income for a much longer period.

During the revolt its likely that at least part of the production and infrastructure maybe damaged, destroyed or looted. There might also be an exodus of technicians and other oil workers that are essential to maintain production levels. This will probably limit production rates once order is restored (whenever that occurs).  
So, more is left for later, less co2 now, must be a good thing. Good point about looting, though, consider what happened in Iraq when we allowed looting to get started, then sacked the police and army.

I doubt that KSA will have problems soon, prices will stay high enough for them to do very well even if production declines a bit. Mexico is another story...

The problem lies in the fact that production will not decline "a bit". Aramco says Ghawar production is 5.5 mbd, Heinberg puts it at 3 mbd. It's starting to look like they use the old tactic of covering lies with bigger lies. You know, inflation.

And there are few Saudi's that like their government as it is. Hence, the princes have a huge army, and an enormous US presence. But we know by now how effective all that is against unconventional warfare. KSA is a powder keg.

Probably not true, SA production is not down enough to reflect 2mmb/d less production from ghawar.
Most saudis are at least middle class, have a vested interest in the present system. A minority wants radical change, such a platform would not get a  majority in a free election.  Not to say the princes are popular, but few want a religious republic a la Iran, or chaos a la Iraq.
>Most saudis are at least middle class, have a vested interest in the present system. A minority wants radical change, such a platform would not get a  majority in a free election.

Actually very few of the Saudi population would be consider part of the middle class by western standards. The laws of islam rule, and women are treated as third class citizens. Unemployment is also very high.

The majority of the population is under 25 and recieve entitlements to meet ends from gov't oil revenues. If elections where held today in SA, the majority would vote to for a islamic gov't.

http://www.cia.gov/cia/publications/factbook/geos/sa.html

According to Wikipedia, KSA had a $28 Billion budget surplus in 2005.  IMO opinion the new monarch in SA has rather deftly done their bit to raise oil prices, kicked out the American military, and craked down on AlQueda.  They do have social pressures due to high unemployment and a surging young population. But with the actions they have taken, and a continuing healthy revenue stream, they are under no immediate threat.

Mexico, is a different situation...

Saudi Arabia ran huge deficits for years between the price collapse in 1986 and the price increases in about 2,000. There ruling family doesn't know the meaning of moderation. I figure they are projecting huge reserves and recoveries because they know that telling the truth will very probably be an end to their rule, and certainly all their debts will come due. Its the check is in the mail syndrome on a national basis.
It us true that KSA ran budget deficits all through out the 80's and 90's when the price of crude was low.  By the beginning of 2004 they had a public debt of $176 Billion.  But in 2004 they had a budget surplus of $26 Billion.  In 2005 they had a budget surplus of $57 Billion, and had paid their debt down to $127 Billion.  I'm not sure what their numbers will be for 2006, but in 2005 their expenditures were $91 Billion.  If they can sell 9 million barrels a day at $60 per barrel, that's a $200 Billion per year revenue stream.

You think Exxon/Mobile is cashing in?  They've got nothing on KSA.  KSA is VERY healthy financially as long as crude stays above $35 per barrel.  And what do you think the liklihood of that is?  

I know, I should spend more time to get the data, but...

Saudi deficits in 2002/03 were $20/10 billion
around that time?! their stock exchange collapsed completely

I find it hard to believe that they have surpluses now
and would not trust Wikipedia in there matters

will look more indepth when time is there

The price of crude has tripled in the last couple of years and the quantity exported by SA has also surged.  That's a very effective way to turn deficits into surpluses!  Here's another link for statistics.

http://www.saudi-us-relations.org/articles/2005/ioi/051216-budget-samba.html

If peak oil is here or on the near horizon, KSA will ride that train for all it's worth.

A missing aspect is that the US econmy is much more vulnerable than other developed economies. The US uses 25% of world oil supply with only 3%  of world reserves. As oil exports fall and prices rise, the US trade deficit will explode. This will force a reduction in US imports of manufactures that will be bad for foreigners who rely heavily on US markets e.g. luxury goods manufacturers. But generally European countries have much better automatic stabilisers such as high unemployments benefits and social security. Also any country signed up for Kyoto and seriously trying to comply will be already better prepared for peak oil. Why is there not greater emphasis on TOD that the US Government should sign up for Kyoto? This would produce some improvement.  
>But generally European countries have much better automatic stabilisers such as high unemployments benefits and social security.

European countries are dependent on exports to maintain their entitlement programs. With the exception of a couple of European nations, they lack less energy resources than the US. Most European nations are much deeper in the hole for entitlement liabilities that the US because their huge entitlement programs and aging population. Europes broad use of socialism also makes them much more vunerable to fascism since the population is much more depend on gov't services to meet ends.

>Also any country signed up for Kyoto and seriously trying to comply will be already better prepared for peak oil.

I doubt that. When oil and gas production declines what will they use for energy. Few European nations have any significant coal, wood or uranium reserves. There are no countries preprepared for peak oil.

> Why is there not greater emphasis on TOD that the US Government should sign up for Kyoto? This would produce some improvement.  

Because when oil and gas production declines, the use of coal, and wood will increase. CO2 emmissions will increase as oil and gas production declines. rise in cost of Ngas has already lead to increased demand for coal.

I don't disagree with most of your post but this statement stands out: "Europes broad use of socialism also makes them much more vunerable to fascism since the population is much more depend on gov't services to meet ends."   This strikes me as utterly ridiculous.  What is your support for such a statement?
>This strikes me as utterly ridiculous.  What is your support for such a statement?

Sure I will do my best.

Fascism is a form of socialism. The more the population is dependant on the gov't to provide basic services the more likely they are willing to accept a dictatorship or form of strong centralized gov't.

In the 1920's a significant number of European countries turned to fascism to cope with difficult times. Dictatorships based upon strong nationalism rose Germany, Italy and Spain about the same time during the 1920s and early 1930's.

Europeans by and large have already have socialized services (medicine, education, transportation, pension, etc). It would be fairly easy for the gov't to enact further control and services over the population during a crisis. This make those countries vulerable to fascism or other forms of strong centralized gov't.

In the case of European fascism, the population did welcome the change as the strong centralized gov't was able to make changes that temporarly improved the economy and living standards.

In the case of Nazi Germany, the gov't blamed the Jewish community as a cause. This tactic deflected the population emotions away from dispare and turned into anger which the gov't exploited. I believe that in the future there is a potential that this tactic will be used again, but this time it will probably be directed at the muslim community, because they are still seen as outsiders and acts of terrorism by the few extremist only adds fuel to the fire.

There was an article I read many years ago that discussed the rise of nationalism and centralized control during times of crisis. If I can find the article I will post a link. The article discussed the rise of dictatorships in latin american, europe and Asia as a means to press through the crisis. Generally the population support gov'ts and policies that lead them in the wrong direction, "Desperate times lead to desperate measures."

If you look at most countries with significant socialized gov't, the majority of them have had bouts with dictatorships, coupes or some form of strong centralized gov't.

FWIW:I am not saying this outcome is definate. All I am suggesting is that Europe is vulnerable to facism when times get tough.

Best of Luck

"Europes broad use of socialism also makes them much more vunerable to fascism since the population is much more depend on gov't services to meet ends."

Care to explain this? I'm having a hard time understanding the  thought process here. Not saying you're wrong, just don't see how you come to this.

Hmmm.... where is the government closer to fascism today? Let me think.....

There is no socialism in the EU, unless you're Russ Limbaugh, and their social plans are overall much less in debt than those in the US. Europeans can rely more on their governments, yes.

I always think that the biggest difference between the two is that one has 200+ million handguns lying around temporarily idle in people's dashboards and nightstands, while the other has maybe half a percent of that.

>There is no socialism in the EU, unless you're Russ Limbaugh, and their social plans are overall much less in debt than those in the US. Europeans can rely more on their governments, yes.

Europe has large social and entitlement programs and also has heavy regulation. By and large, European gov'ts provide socialized medicine, education, transportation systems, pension, etc. Business are heavily regulated and have near draconian rules for hiring and terminating employees.

Most of the EU has severely underfunded pension programs which are far worse than the US pension liabilities (per capita). There have been many articles in the Financial Times and The Economist that discussed the looming European entitlement crisis. Most European nations are dependant on US exports to finance their social programs. At some point (probably in the near future) the US will be importing far less goods and services from Europe. This is when the trouble will begin.

> always think that the biggest difference between the two is that one has 200+ million handguns lying around temporarily idle in people's dashboards and nightstands, while the other has maybe half a percent of that.

There are much bigger differences. <joking>I do believe that most Europeans would  be offended by your statement</joking>

Take care

Arguing that Europe is more vulnerable to facism than any other region you might name is a pretty bold assertion. It seems to me that, if anything, Europe is less vulnerable to facism than many other regions, having gone through the experience of tens of millions killed and a totally destroyed infrastructure as a result of allowing facism to thrive.

Foreclosures spiked in August

Rising payments on adjustable-rate mortgages contribute to 53% jump in foreclosures.
I'd just like to take this opportunity to thank everybody for not posting about Football. 29 comments so far and I still have no idea who is going to win the SuperBowl this year. You Folks are Awesome!
The Dallas Cowboys.  If they bench Drew Bledsoe and go with young gun Tony Romo.
All I can say, as a Red Sox fan, is "Thank god it's football season!"  :-(
I'm a Yankees fan, but it's not the same with the Sox so far out of it.  I'm not enjoying our new lineup of superstars as much as I did the one we had earlier in the year, filled with kids and castoffs.  I miss the down-to-the-wire division race we had last year, when every game was life or death.
I love the Yankees, too. But that's another story. Come to ASPO Boston. It should happen right about the time The Yanks are destroying the rest of the playoff contenders. You will absolutely adore the bars in Kenmore Square right about then. I'll buy you all the "Yankees Suck" merchandise we can get at super-discount prices.
Boston's great (except for their baseball team ;-).  My sister was a professor at Harvard for a few years, and had an apartment on Harvard Square.  It was a very nice apartment, way more pricey than mine...but didn't come with a parking space.  Only in Boston...

One great thing about Boston is that you really don't need a car.
Exactly.  You end up paying more for groceries and such, because you can't get to the supermarkets and end up shopping at little gourmet stores, but you save a lot of money by not having a car.  My sister was carless for years.  
...the "Yankees Suck"...

Here, here!

That's why I Love You. Wanna move to Paris with me this Spring? I hear the IEA has an opening. We could split the work. We could jet-off to anywhere we like the other five days a week. I'd mostly be in Greece, but I've heard great things about Germany. Oh, and Amsterdam is right next door. We could be like Jack Bauer and Chloe. Thank God for cell-phones.
Footie Whatie?
Yeah, that's right. We ain't talkin bout the Azurri.
Superbowl? What's that? Must have something to do with TV:-)
What's the Superbowl?

I still got kids at school - so you can have the Paris job.

It is obvious now that 'They' are sriously scared that the truth gets out. Ladies and gents we have entered the war of words and the powers at be are mounting a full frontal.

A pattern is emerging. Wev'e seen it with Iraq, 9/11, etc..The goal is to discredit the ideas and the people involved in the hope that the actual technicalities and details do not need to be addressed. This way the sheeple who see the news are quelled and can go back to their corporation sustaing SUVFOXCNNPETROLCONSUMERBORROWEDMONEYMORTAGEDTOTHEHILDINTHESUBURBS lifestyle and help fund wars and trade deficit.

They do not need to counter arguments on the news as there are never any interviewees who ask the right questions.

Make no mistake that the very idea we present removes the very foundation of the corporation/government/media. Are they about about to let a few upstarts with a (O.K. so there tellin' the truth! So what) blog to take down a multi trillion dollar empire when the sheeple start to take note of the issue?

No. They are not.

Legions form squares!.

I "discovered" Peak Oil almost three years ago.  My first impression was "It's over.  As soon as everyone realizes it."  This opinion hasn't changed.
It has been fascinating to see the growth of the PO movement.  From Dec. '03 through most of '04 there was very little info available anywhere.  It was a big deal when the monthly ASPO newsletter came out.  I could google the news tab for Peak Oil and the newest article would be two weeks old!  And now poor Leanan must get up at 5AM to find all this info for us.
.

Sunspot.

Ditto, Except I found out in 2001(FromTheWilderness article on ASPO starting).  The progression of what info was available then from what it is now is magnitudes.

I think that is why many of us who have known for 5 or so years have read much of www.dieoff.com because in 2002 THAT'S ALL THERE WAS.  Now there are countless blogs and news items.  Anyway...

"It's over.  As soon as everyone realizes it."  

I agree with Ron also.

Once the 100th Monkey finds out,  there will be (in scientific parlance)  "A State Change"

Visualize that school of fish we have all seen on TV all at once turning left.

With the communcations and internet once a certain point is hit, the reaction could be QUITE quick.  The Feedback loop has never been tested realtime with 6billion variables on a global scale with EVERYONE's future at stake.

Ron,  You hit it on the head like you often do.

John Carr

.


"It's over.  As soon as everyone realizes it."  

I agree with Ron also.

Once the 100th Monkey finds out,  there will be (in scientific parlance)  "A State Change"

Visualize that school of fish we have all seen on TV all at once turning left.

I don't think everyone will ever realize it, depending on what "it" means (thanks Bill). Peak of production? That might take awhile, given the fuzziness of that term (conventional vs. others etc.) Even then, the question will be "why is this happening?" Round up the usual suspects:

  1. environmentalists
  2. foreign nationalized oil companies
  3. global instability
  4. big oil conspiracy

which of course are the current excuses for high prices. The response from government will eventually include force to try to fix the problem(s), which will likely be counterproductive. Thus, even more instability and less production. It's possible that most people will never believe that the production is fundamentally limited by the geology and the finite amount in the ground. Some will be buying airline and auto equities all the way down.
Don't you think that driving a car..then running out of gas...then not being able to get anymore....MIGHT tend to make everyone REALIZE it all at once????

Or having to spend you entire paycheck just for one tank of gas?

Or listening to the 'talking heads' once they get their hysteria in fullblown,afterburner mode about "FOLKS ITS ALL OVER"...won't make them all REALIZE it very suddendly?

The MSM will always scream loudly with a good story of horror,doom and gloom. They revel in it. They roll in it. They dream of it. They will NOT let us down in our hour of REALIZA TION.

Then the sheep will stampede and like all sheep will then fall on their sides and die right off due to fright. Just the smell of a wolf and the sheep begin to die off.

Oh, they'll "get" that gas for their car, if they can get it at all, has gone through the roof. And they will panic. But are you really expecting them, government, and the MSM, to immediately think "gosh, maybe those peak oil freaks are right after all"? That would mean that it is nobody's fault except for us consumers and our society as it has been running.

I can envision multiple scenarios where logical thinking will not rule the day.

I was later, dec. 04, but I too remember waiting with bated breath for the ASPO newsletter... You're right, there's a lot more out there, and MSM does seem to be fighting a rearguard action.
So what) blog to take down a multi trillion dollar empire when the sheeple start to take note of the issue?

I "discovered" Peak Oil in Jay Hansons' die-off in 1995/1996 after having read Tainter in 1988.
It's been a long time without much awareness spreading in the public and I think that when "the sheeple start to take note of the issue" it will be WAY TOO LATE to avert catastrophic outcomes, whatever may proximally cause the wreckage (sheeples' riots or TPTB going into "tame and cull" mode).

http://www.boston.com/business/globe/articles/2006/09/13/opec_high_and_volatile_prices_may_be_new_no rm/

VIENNA -- High and volatile crude costs may signal ``a new price era," a senior OPEC official said yesterday, insisting that the 11-nation cartel is doing all it can to bring prices down to more reasonable levels.

You got to love OPEC.  This is conditioning on a grand scale.  First you've got to prime the people for the ride they are about to start not matter if they want to or not!  I think this is a clear admission that they know it's going to get bumpy.

Oil has not yet hit $63 a barrel.

Halfin posted yesterday:

(The Poll) In your opinion, in the next two months, oil prices (CLU/V6) will...
reach $63/bbl before they reach $83/bbl 2%
remain in a trading range from $63 to $83/bbl 49%
reach $83/bbl before they reach $63/bbl 47%

Halfin's reply and seconded by Roger Conner and others:

And today it happened, by some definition: oil fell below $64 and closed at $63.76, hitting $63 ("and change") before $83.

And change? Funny, I did not see the term "and change" anywhere in the poll. Why don't we just wait and see if oil hits $63 before it hits $83 because it has not happened yet.

These guys are gloating that only 2% got it right. Perhaps they did get it right. Perhaps oil may hit $63 today, or perhaps tomorrow, or perhaps next week. But as of 12 noon EDT, it  has not hit $63 yet. So guys, please wait until it actually does hit $63 before you start gloating.

Ron Patterson

Ron,

It's not about that. We are a community here. And we know how to push each other's buttons.

I'll be honest. And I mean honest. Oil dropping like this saddens me. It's not about some reason to wish for doom, or the fact that I predicted it higher - it's that I know in my heart of hearts that as it goes lower and as gasoline goes lower, it is destroying any momentum this community had built up to be believed.

It will hit $63. I was right about the hurricane season, why can't I be right about this? Go with your gut. Not what others are saying about temporary price swings.

I believe you when you say Saudi can't produce much more. I do. I believe the same thing. But that is long term.

The only thing that will kill demand growth is recession, nuclear war, or Bird Flu.

But when it comes to superstition, I cannot help but feel more in tune with Freddy and Jack as the optimists they are. I read a really depressing article in Slate yesterday about the possibilty of Bird Flu. The Good news is it will offset peak for at least ten years. Ten years we can convince ourselves that nothing "bad" will happen.

Here come Halfin and Step Back.

Now we have to fight back over the same ground. And it will be harder this time. We lost so many opportunities(in the US at least) for things like a gas tax.

Jack is going to absolutely crucify me over these views. But I said I wanted to be honest.

We also had to know that this would(could)happen.

I always said that the process would be a lot slower than the doomers had predicted.

Let's try to accept that SAT might be proven 100% correct.

Let's try to accept that Sailorman is correct. That price will go up and down.

We have to deal with huge price drops. We cannot expect everything to rise in a straight line.

It will go back up. I can feel Freddy Hutter getting pissed at me right now, too. That's OK.

United we stand. Divided we fall.

The mistake is allowing your (generic you, not you specifically, oilceo) peak oil beliefs to be tied to the price of oil. To the extent you allow this to happen you allow the naysayers to control the argument. Hey, we hadn't even reached the point where gas was as expensive as it was in 1980! This is not about spot markets and if you let it become that, then maybe you don't really understand a)what peak oil is about and b) what's at stake here.
Good points.
Hello Oil Ceo,

If one thinks about it: the logical starting point for the full provisions of the Patriot Act will be to round-up the posters on TOD and related WWWeb forums, then ship us off to some Gulag somewhere.  We pose the biggest threat to the Iron Triangle--because nothing can stop an idea whose time has come--the earlier TODer's comments of a whole school of fish suddenly changing direction must scare the crap out of TPTB.

Is the middle-of-the road approach legislative Secession into biosolar & detritovore habitats ala Hirsch's update on fifteen favored States, SuperNafta, and my speculation?

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

No, Bob, respectfully, you are wrong.

Politics requires a full spectrum, from left to right. If you eradicate part of it, it will be filled autmatically, kind of like a vacuum. Not everyone thinks the same, and that's fine, as long as you keep them in check.

That is how the US system works, and Canada is becoming a mirror image of it, as I explained in an article published a few days ago (yeah, shameless self-promotion).

To hold on to power, you need to control the full spectrum. So you have two parties that express different opinions, REP-DEM, but whose policies amount to the same. The two will assure you so many votes, that no other party ever gets a true shot at winning an election. I used the term "two-headed monster", not very original, but very much to the point.

The great documentary "Why We Fight" makes this very clear. Do see it if it's available where you live. It's what's behind the parties that holds the strings.
And the occasional switch from one to the other makes no difference at all.

Anyway, no, TOD'ers are not first in line for the gulag. Ruppert, perhaps. But not you and me.

Hello Roel,

Thxs for the thoughtful reply, but I think a tipping point will occur at some point postPeak to help headoff a full scale decline spectrum of a bloody civil war, insurrection, revolution, dictatorship, then rinse, lather, and repeat.  Jay Hanson speculated that possibly the military will takeover and direct a Powerdown command econmy.

It will never happen, but just imagine if Bill Gates, Warren Buffet, Richard Rainwater, T. Boone Pickens, and Vinod Khosla pledged their billion$$$$ to bring every American up to speed on Peak Everything and Global Warming.  They would be essentially pitting themselves against the entire detritus addiction and infinite growth paradigm supported by the banks, mfgs, and ins cos.  Even if those gents could probably muster up $100 billion or more--it is miniscule compared to the wealth and power of even the banks alone.

Unless they were protected by Earthmarines: these billionaires' heads would turn up in a seedy Mexican bar faster than these drug dealers' heads.

The financiers of the American Revolution had a very dangerous path, as this link on Haym Salomon helps illustrate.  Do the gentlemen listed above have the cojones to do the same to ameliorate Detritus Entropy?

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

I won't crucify you. I see myself in the camp best defined by Odogragh. The future is not predictable. I see about a 20% chance of doom, 20% change everything will work out just fine and a 100% chance that something we haven't foreseen will happen.

I see myself as a peak oil moderate. I don't write off doom as a possibility. But the real feverous doomers on this site are often doomers first and observers second. Everything they see proves that the end is coming.

I like to listen to the prognosticator formerly known as The Last Saquatch and haven't been able to say he is not right. I do think oil supplies will wane, but think there is a fairly good chance we will adjust. I think the idea of linking eceonomic growth inexorably with energy supply growth is a weak theory.

I do think conservation will be essential, but see it as only driven by price. Other than that it is just talk.

I also don't hate our modern life, capitalism or cars. Oddly I do hate the suburbs, but deal with it by choosing not to go near them ever.

You said:

Oil dropping like this saddens me.

I disagree. I think a period of reduced oil prices will strengthen TOD. Hopefully it will chase off the ranting doomers who are here because they have seen high oil prices as proof of Tainter's complexity theory or Oldwhatever gulf.

I think about 98%v of the people who scream "What if China stops lending us money?" don't have the slightest clue of what they are talking about - which is why the refuse to elaborate when questioned. I think WesTexas's HL stuff is good, but his raving crew of followers just know that it is math and make the world doomed, so they woop.

I suspect oil prices will continue to fall, largely because of reduced demand from price signals and economic slow down in the US as well as liquidity exiting commodity markets. I also think there is a risk premium which may or may not shrink.

I do think prices will come back up. I prefer to see the price trend as a steady rise from $30 to $60 per barrel based on the fundamental issue of declining supply. I think there have been factors that forced it up beyond that. As they come off, momentum may drive the price lower than trend.

At the end of the day, peak oil is real, supply won't meet demand easily as prices will go back up. I would love to see a range of $55-65/ barrel for the next year or so. High enough to send a message and encourage adaptation, but low enough to foster the economic growth that is pulling hundreds of millions of people in my region of the world out of poverty.

I like disagreement and think we are stronger for it. Put a little sand in an oyster and you may get a pearl that can last forever. Without the sand, you get rotten seafood.

Divided We Stand !

I see myself in the camp best defined by Odogragh.

No doubt about that!

At the end of the day, peak oil is real, supply won't meet demand easily as prices will go back up. I would love to see a range of $55-65/ barrel for the next year or so.High enough to send a message and encourage adaptation, but low enough to foster the economic growth that is pulling hundreds of millions of people in my region of the world out of poverty.

An oxymoron lodged in 6 lines of text.

"encourag[ing] adaptation" for "pulling people out of poverty" WHILE PEAK OIL UNFOLDS cannot be thru "economic growth", only by better sustainable practices which are AT ODDS with growth.

Shame on you and all other TPTB propagandists.

I'm very much in faver of accelerating our global rate of power-down.  I'm opposed to crass consumerism, and think more people should find Buddhist-mode happiness.  I live simply in less than 1000 sq ft.  I walk, ride a bike, drive a Prius, own Energy Star appliances ...

You've got this weird idea that I should do all that, but also be convinced of coming doom.

(I also save energy by avoiding costly spelling and grammar checkers.)
I live simply in less than 1000 sq ft. I walk, ride a bike, drive a Prius, own Energy Star appliances ...

In Newport Beach...

I'm sure Fleam will confirm that there are humble parts to Newport Beach.
Like THIS "humble" :



That doesn't look like Newport Beach to me.  We have more eucalyptus trees, and fewer pines.  But really, stop stalking me and translate this into something that matters.

We are really talking abut changes to energy intensity, lowering the btu required to sustain individuals and economies.  Asia is boomnig, but often by creating 'low power devices' (in the modern parlance).

Why don't we talk about immediate progress in that direction, which is good, and get over the need to bring in century-forward fears?

Well said. I avoid the term powerdown, but do think we need to move toward a lifestyle that uses less energy. I agree that we should avoid crass consumerism, but don't think we can deny the poor of the world their right to economic improvement. I think this will be done by integrating them into the global economy and acceopting that their economies will grow.

I do worry that current practices could lead to doom and in any event think that the current trajectory just can't last. However, I am optimistic that we will be able to transition to new energy sources and make better uses of the ones we have now. In fact I think we have to do it and much of the negativity on this site I see as doom fetish masturbation.

As I noted above, I see conservation (or reduction of use) as crucial, but think it need to be tied to something concrete to be meaningful. I think that has to be price, either through increased energy costs or some form a tax. I think overpopulation is potentially a huge problem, but find projections of peak people encouraging. In any case all of them dying doesn't seem like a very good solution.

I see no reason why the world can't have a decent quality of life with a lot less energy than we use now and do think other sources will become available to us. Silver BBs.

The no growth economy ideas tossed around here seem to stem from anger at capitalism more than any real belief that they can work.

I don't think it is moral to deny anyone growth.  All we can do is (1) suggest that growth isn't always exactly GDP, and (2) suggest a lower energy intensity when pursuing any kind of growth.

It's "goal"/btu

BTW, I was thinking just a little while ago that everyone in the 70's used to buy home stereos, from asia, valued by the "watt".  Now they buy iPods.  I think that's progress.

tunes/btu

Where is the oxymoron? I said elsewhere in the post that:

I think the idea of linking economic growth inexorably with energy supply growth is a weak theory.

I believe that we will have access to less energy in the future, but that we will get more from from it. I do think we need to move rapidly towards more sustainable practices, but don't see that they are that closely correlated with growth. The Soviet Union had a shrinking economy but was disasterous for the environment.

I think economic growth will continue to delink from energy consumption growth and hopefully from the damage we are doing to the planet. The idea that humanity can live in a non-growth paradigm is so far just a fantasy. It has never happened on a large scale anywhere. It is far more realistic to think that we can continue to grow but reduce our impact.

I read a really depressing article in Slate yesterday about the possibilty of Bird Flu. The Good news is it will offset peak for at least ten years. Ten years we can convince ourselves that nothing "bad" will happen.

Bird Flu is somehow a "different story" and it will likely bring a "reprieve" of MORE than 10 years but just because it will disrupt the global economy as harshly as Peak Oil.
Killing BOTH the skilled and unskilled alike except may be for the "protected" yet unskilled TPTB.
This is the reason I see this as unlikely to be a planned culling, NOT MANAGEABLE.

P.S. Sorry for my usual typographical gimmicks but you are not the only reader.

I keep a failrly accurate oilprice graph updated daily from :
http://www.eia.doe.gov/emeu/international/Crude1.xls

Just looking at the grphs purely from 'feel' it looks like the price will only drop to round about $62 thaen rebound to $72 by november, collapsing again to $62 by january to be followed by a larger correction to around $85 by march 07'.

Putrely visual assesment based on current patterns. No analysis or reason involved!

Feel free to jump on my brazen over-simplification!

Show us the graph, man. We love that stuff. "Brazen over-simplification"! Hah! We love those, too. That phrase is great. I think I just found the title for my new album.
I'm still learning so how do I post a graph I did on excel?
Do I save as a Jpeg first then, how do you post a JPEG?

Sorry to ask these questions.

Is there a guide on the technicalities of posting somewhere on this site?

marco.

It's a tough process. I don't really have the time to lay it out right now. But later on tonight. If you email me, I'll tell you exactly how. Start by setting up a "Flickr" account at wwww.flickr.com, then cut and paste text from photo into post here. You have to copy graph in excel and then paste it as advanced photo or something into Word doc and then save word Doc as "html." That process actually saves your graph as a photo into a folder in same location as a gif or jpeg. Try that out. I'll check back later. I did that kinda backwards.
Ignore my last post as I just read the instructions - will attempt when i get home to stick my graph in. Also feel free to use the phrase!

i think $63.49 counts as $63.

the two percent win.


oh, today's low is $63.50.

that rounds down. they still win.

.5 rounds up.

i was on crack, apparently, this morning.
Oil is now 5% below the 3-year trend lower bound.  I thought buyers would step up before breaking below the trend line, around 68, not least because OECD stocks, down 85mmb yoy, are at ten-year lows, but was wrong. Don't see a basis for any specific new low number... but, if we get back on track, 80 is where the upper bound would be in two months.
Fed gov opened a brand new $20M Institute for Fuel Cell Innovation in Vancouver yesterday.  Pretty much the core of Canada's hydrogen research in attendance.  The facility will function as the center node for our hydrogen highway project and of course ongoing research.

Hydrogen Economy mentions: 50+
Peak Oil mentions: 0

I found a good summary article and discussion of the ongoing Amazon drought. The comments following the article contain a wealth of citations on this issue.

The main points seem to be:

The Amazon rainforest is a vulnerable ecosystem that depends on its ability to create its own climate / rainfall.

Its ability to do so is being compromised by a combination of logging and ocean warming.

Air current from the latter have been interfering with the Amazon's micro-weather and rainmaking in particular.

The Amazon ecosystem could collapse after a few years of severe drought.

Collapse would be followed by massive forest fires that could by themselves add an amount of CO2 comparable to several years of human activity.

The threat is real and the Amazon is headed towards a tipping point.

Predictably, there is disagreement about when the tipping point will be reached.

No one seems to be doing much about it.

Note: I accidentally posted this on yesterday's DrumBeat, so am re-posting. Hope no one minds.

Thanks for the update. See my earlier post about the evil cornucopians and their denial #$@&*$#!!!
Dammit! As if we didn't have enough to worry about already.

The real tragedy is not just the fact that nature must, in the next half century or so, seriously cull the standing crop of human flesh but also the fact that we Homo rapiens have destroyed so much of the natural world.

One can compare us to cancer cells. We multiply like mad while destroying our host.

Ron Patterson

.

I like the cliche

"Mother Nature Bats Last"  myself.

.

SOME humans are like cancer cells. Not all.

And I would argue that it is the 'growth economy' that started the majority of the problems. "Growth for the sake of growth is the ideology of the cancer cell."

And most of the rest of us are like warts, slow growing, seldom fatal, but ugly and annoying.
Just sort of skimmed over the CERA article - but this one passage really stuck out for me.

Clinton "also wondered why he had never received a peak oil briefing, given its strategic importance."

And yet, Matt Simmons claims he told Clinton about peak oil.  And unlike Dubya, Bubba seems like the type who would remember something like that.
I suppose he could be buffaloeing (is that a word?) us, but I'm not sure to what purpose. If he is being straight up, would seem to argue strongly against those "behind the scenes manipulation by TPTB" version of politics.
Well, you've got your insiders and you've got your insiders.  My guess is that if Bubba were in the latter group, a certain blue Gap dress would never have been front page news.
Being "told" something is not necessarily the same as getting a briefing.

Certainly I wasn't there, but if it was a casual, qualified comment the way Simmons spoke about this in the past, it could easily have been lost in the shuffle of a million other issues.

Agreed. Try running a big organization sometime, and see how easy it is to miss something.

When you have a million things coming at you everyday, some of them get lost.

The style of presentation to a President of the Uniied States might make any problem (esp. one hitting decades hence) seem like just another problem.

Look at us now, still addicted to oil, but Washington is in the mid-term swing.  Energy and oil might be good for some sound bites, but I wouldn't expect any Federal action for ... another year?

Every US government has been aware of Peak Oil since Hubbert, 1970 at the latest, when his US model proved valid. They have to, power wants to hold on to power, and for that reason will always be obsessed with ANY threat.

The relatively demure Carter was the one who phrased the way the US would ensure its access to (international) oil, after the 70's crises.

Don't believe a word Clinton says, he's a PR man and very good at it, with a memory that would put us all to shame. Yes, he remembers Simmons.

Did Simmons say when he spoke to Clinton? My recollection is that Simmons himself is a rather late convert.
He said it was when Clinton was president.
I remain just as baffled, then.
I'm fond of Bill Clinton, voted for him twice,and think he is the best president in my lifetime. Even so, he is a lawyer and a politician first. If Simmons used any other term than "peak oil" it would be like the famous sex statement for which he was impeached by the scoundrel congress, he denies it. Not exactly a lie-a blow job isn't sex, exactly-but, not all the truth. After all, his wife is running for president and he is worried that anything will be blamed on him.

"Saudi Aramco Chief Executive Officer Abdullah Jum'ah said he has challenged his oil engineers to boost recovery rates by 20 percent in 25 years, a move that would add 1 trillion barrels to reserves. In time, worldwide reserves may grow by between 3 trillion and 4 trillion barrels as technology improves, he said.

It can't be just me that's noticed that the "optimists" about oil sound shriller and shriller the past few months in defending their point of view.

Some of the non Peak oil believers give some measured and optimistic views of technology and oil and new discoveries in the future to bolster their arguments of plenty of oil/energy in the future.  But the last few I've read in the past few weeks sound more and more outrageous and extravagant in their arguments.  Now it's that peak oil theory is just stupid or crazy or claims by the Saudis of 5 ttrillion barrels of oil in the earth! I think they protest waaaay too much and too vehemently lately.

Hello TODers,

I love this EnergyBulletin link! on the possibilities of canals.  I had posted on this earlier, glad to see that others are thinking along the same lines.  From my rusting memory, I believe TODer AlanFromBigEasy said transport by boat is ten times more energy-efficient than even railroads.

From the above EB link:
-------------------------
First, look at the amount of heavy goods and rubbish we shift by road. Landfill trucks, sand trucks, building materials trucks; steel, chemicals, fabrics, fuel trucks... things which really don't have to get anywhere in 24 hours, or even 48 hours. The energy it costs to shift them is huge.

And if they were on a barge, a teenager could pull it along - even if it had several tonnes aboard.
--------------------------
The article mentions using wind power to store energy in the form of pumped water for these canal systems.  In short, transportation powered by wind & water.

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

When the canal system for Upstate New York was built, there was a smaller scale version built in Pennsylvania that used steam power to get past some inconvenient mountain. I don't recall the details. But just look at the Appalachians: wind sources: check. Canals: some already there and waiting, some in need of a good dredge, and lots more that can be built.

Same thing.

Hello Apuleius,

Thxs for responding.  Please see my other post upthread on the need for a National Drinking Fountain Spiderweb for our postPeak future of millions of bicycle pedalers.  This is more proactive than the Zimbabwean plan of 'taking out the rubbish' [Project Murambatsivna] by dumping people miles from the cities to see how many survive the desperate hike back.

I believe if SuperNafta moves forward, that untold millions of North Americans will become migrant laborers postPeak.  Just as many species migrate with the seasons, it is only natural to expect humans to do the same once we cannot afford to heat or cool our housing.  Only the rich will be able to live in the same place year-round.  The rest of us [60-75%] will move with the weather seasons, planting and harvesting as we go through the continental latitudes from Mexico to Canada, and then the opposite direction.

Recall how long it took the early settlers to travel bad roads in oxen carts--very slowly.  Ideally, if we can long maintain keyroads [alongs with canals & RRs] suitable for bicycle transport, this would be a magnitude faster that what the settlers had to use.  It is now routine for some people to pedal across the US, and the Race Across America shows the postPeak possibilities.

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

Being from Upstate NY,  We had the Erie Canal museum in Syracuse.  Later renamed the "Barge Canal".  This would be a GREAT thing to get back into full working order.  From Great Lakes(Buffalo)  to the Hudson(Albany).  

You go from Ocean(NYC) up the Hudson, to the Erie Canal to the Great Lakes.

This should be a HIGH PRIORITY item.

I posted this suggestion on the NYC TOD in a thread about passenger trains and other things.

Also,  on the Light Rail thing Alan,  Upstate NY (like many areas) still have old shortline tracks going from Binghamton to Cooperstown and others in the Adirondacks.

I wish those could be revitalized.

John Carr

Hello Samsara,

Thxs for responding.  Yep, I agree on canals' future potential: if I was Vinod Khosla, I would buy the right-of-way property rights for canals and RRs vs investing in Ethanol.  That is long term investing to get future out-sized gains.

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

Check out this guy. The commercial potential of the Erie Canal is one of his hobby horses. If you're IN upstate NY, perhaps you could join him and get a crowd together to lobby to reopen the canal for small scale commercial traffic.

A few months ago a wind turbine travelled on the canal en route to installation.


Apuleius

Thank you so much.  I gonna take the link and have a look see as soon as I hit send on this.

JOhn

.

No, No, there is no problem nowhere.

In the weekly summary from EIA crude is a bit down, but still very comfortable, way above the upper limit of the average range you know, no problem with flat total gasoline stocks.

With my deforming lens, I see some underlying ugly truths : The finished gasoline stock is at an historic low of 111.5 mb, the reserve of crude is worth 20.3 days at actual refining rates. Imports of finished gasoline are low, over the last 25 weeks, the volumes are 22% less than those over the same period last year. Still feel comfortable ?

In the interest of balanced reporting (responding to the latest Saudi claims), I wanted to pass along the "peak" thoughts of the CEO of CoreLabs. CoreLabs is one of the industry leaders in secondary and tertiary recovery techniques. These guys would appear to have their fingers on the pulse. The link to his presentation is here:

 http://origin.vcall.com/CustomEvent/conferences/enercom/081406/agenda.htm

To hear his comments you will have to click on the Core Labs audio cast and go to around the 5 minute mark. The CEO says we are likely never to get above 88 mm barrels in 2008.

I heard him say exactly the same thing at a public meeting in November '05.  Peak in '08 at 88 mbpd.   Unfortunately, I did not have the presence of mind to ask him what that assumed about production from Iraq, Nigeria and Venezuela.   If peace breaks out in Iraq and Nigeria that could easily add 2 mbpd.
I really question your assertion that they could add 2mbpd easily. Iraq fields are in disrepair, damaged and over produced, Nigeria has many maturing fields. They could certainly add but I don't believe easily or quickly.
This just in: from comments by David Remnick on his extensive profile of Bill Clinton in the current NEW YORKER

Q (to Remnick) You write that Clinton rejected Gerald Ford as a model for the post-Presidency. But is Clinton at all a man of leisure?

A (Remnick): He plays a hell of a lot of golf and he's a voracious reader. His library's got a lot of books about policy, a lot of history, a lot of Presidential biography, and a lot of books on religion--that's a sincere interest. His taste in fiction, although I don't think it's limited to this, seems to be of a lower brow: he loves thrillers and police novels and stuff like that. I borrowed a book from him that he had just read--"The Party's Over: Oil, War, and the Fate of Industrial Societies," by Richard Heinberg, not exactly summer reading--and it was full of underlinings and what looked like the most serious undergraduate's markings, with lots of exclamation points.

bravo  well done
Wow, what a cool story.  
Good for you, Richard, you're on the ex-President's reading list. Maybe he learned something.

Hello Powerdowner,

Hopefully, he passed the book to his wife.

If so, and if she wants to be elected, she better keep her mouth shut.
;-)
Crude Oil Rises on Signs OPEC May Try to Keep Prices Above $60

http://www.bloomberg.com/apps/news?pid=20601086&sid=aldaUhvfCDJo&refer=news

It was just announced that there is an El Nino developing.  Predictions are for a moderate event this winter.  So that's what happened to the Atlantic Hurricane season!
Has oil bottomed out around $65?  That's what I thought the floor might be.
Pardon my ignorance, but what are the various implications of El Nino ?

For hurricanes next year ?  This winter (mild or cold), rainfall in SW, and anything else.

The NOAA's Climate Prediction Center said the El Nino probably will spur warmer-than-average temperatures this winter over western and central Canada and the western and northern United States.

It said El Nino also will cause wetter-than-average conditions in the U.S. Gulf Coast and Florida, and spark dry conditions in the Ohio valley, the Pacific Northwest and most U.S. islands in the tropical Pacific.

In Asia and South America, the last severe El Nino killed hundreds of people and caused billions of dollars in damage as crops shriveled across the Asia-Pacific basin. This El Nino has caused drier-than-average conditions across Indonesia, Malaysia and most of the Philippines.

Indonesia is the most populous Moslem country with over 200 million people, while the Philippines have nearly 90 million. Both are major importers of U.S. grains.

CNN: El Nino forms in the Pacific

Might this also explain this year's "super typhoons"?

The hurricane season seems to be alive and well. It has just moved a bit to the center of the Atlantic Ocean. Hurricanes are following each other up the central Atlantic like elephants holding each elephant's tail.

http://www.nhc.noaa.gov/

Meanwhile Colombine relives 1.5 miles from where I'm sitting.

Reports are still all over the place, but it ain't pretty.

4 dead, 16 wounded in college shoot-out

Oh man, roel, you live down there? I used to live in Littleton many years ago. That's a suburban nightmare.

no, this version is in Montreal
from what I get, and it's still very confusing and contradictory, one guy with a mohawk in a black trenchcoat shot about 20 people and himself
Sorry, misunderstood you. I thought you were talking about living near Columbine in the south Denver suburbs. Montreal, that's cool... except today.

20 shot, 8 in critical condition, gunman dead. very sad.
Hello Roel,

That is sad news.  On the Mexico front, things are not going well there either.   The election commission wants to burn the ballots even though both AMLO and FECAL [Calderon's initials, according to protestors] specifically asked them not to burn them, but let them be audited by a citizen commission like the 2000 Florida vote.

top link intro:
---------------------------------
In an epiphany of how he might have to govern Mexico if the left opposition allows him to assume the presidency December 1, right-winger Felipe Calderon had to be helicoptered to the bunker in the deep south of this conflictive capital where the nation's top electoral tribunal, doing business as the TRIFE, was to hand him the certificate attesting that he had, in the judges' less-than-august opinions, won the July 2 election from leftist Andres Manuel Lopez Obrador (AMLO.).

Upon emerging from the chopper which had been accompanied by a military gunship, the stubby, balding Calderon was quickly hustled into the TRIFE headquarters by the back door a full 90 minutes before the actual ceremony was to commence, a subterfuge necessitated by the presence by thousands of AMLO's enraged supporters, some of whom had already stripped naked. [bold, naked apes? bob S]

Calderon's witnesses -- members of his campaign team and functionaries of the archly-rightist PAN party who had the misfortune to arrive by land -- were greeted by clods of earth and screams of "Rateros!" (Thieves) and "Fraude!" (Fraud.) The ritual unfolded under a steady barrage of rotten eggs and tomatoes which AMLO's people kept hurling at the TRIFE bunker, a kind of Aztec version of a U.S. missile silo, to express their unhappiness with the seven-judge panel that had neither heard nor seen any evil in the maladroit machinations of President Vicente Fox, the Federal Electoral Institute (IFE), and the PAN to steal the election from their candidate.
------------------------------
Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

"stripped naked" I told ya'll the Mexicans have more cojones when it comes to protesting election fraud!!!Viva la Revolution!.
  Thanks for the update, Bob.
FECAL? so when he states a fact or opinion it can be called FECAL matter?
Sorry, i just had to slip that in. Couldn't help myself.
Oil (and gasoline) rise, people scream.

Oil (and gasoline) fall, people laugh.

I saw someone rushing out of our local Valero station building today to replace the "9" with a "7" at the end of a price of regular.

We have no long term-energy policy. We don't even seem to recognize the existence of a long-term problem. Rather, we simply vacillate from panic to complacency in response to short-term shortages and surpluses.

From a mentor of mine, my former geology prof (now retired) in this prophetic article (PDF) from 1997.

Hello MikeB,

Thxs for the PDF link!  The last two paragraphs says it all:
-----------------------------------
Economic theory also has told us that, in a free market economy, shortage of a product is followed by higher prices for it, and higher prices cause demand to decrease to match supply, thus eliminating the shortage. This is an easy way to solve the problem, in that we have simply defined shortage out of existence, even though prices may become astronomical and supply infinitesimal. Maybe it would be better to face the impending reality of genuine shortage.

The coming decline in petroleum production rate presents an ominous economic problem with potentially catastrophic consequences. Serious and unflagging efforts to deal with this intractable difficulty are overdue.
---------------------------------------
I wish every MSM newscast was required to read this to the audience every night.

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

Shell CEO: Why oil will get cheaper

Newsweek interviews the CEO of the 3rd biggest oil company in the world, and can't even be bothered to spellcheck his name?!

The article itself is more smoke and then some. He blabs about Russia a bit, well, the Russians want his Sakhalin ass, and that ass is nervous by now. $20 billion is hard to explain to shareholders, and to Putin. Shell is accused of mismanagement down there.

Then the archetypical:"It's impossible to predict future oil prices. I predict they will be lower. That way, whatever happens I'm covered, but it sounds nice in the meantime"

Only good advice remains: don't believe a word they say. That includes Clinton.

The world has tapped only 18 percent of the total global supply of crude, a leading Saudi oil executive said Wednesday, challenging the notion that supplies are petering out.

Considering that the Saudi's would only benefit from a scarce supply, why would he say something like this?  It seems as if he would benefit from decreased supply.  In otherwords, what could possibly be his motive to lie?

For starters we don't know that he is deliberately lying. The speaker may actually believe that crap. But there is a very good reason that Saudi would like everyone to think that there is plenty of oil.

They actually believe that there is a possibility that technology will come up with a substitute for oil and they will be left with a lot of worthless goo on their hands. So basically what they are saying is: "There is plenty of oil so no need to develope any substitutes."

Ron Patterson

Hello TODers,

My recently emailed letter to the President:

Dear Mr. President,

Please protect Las Vegas's petroleum pipeline!

I am a forum member of TheOilDrum.com.  It has recently come to my attention that Las Vegas, NV is only served by one petroleum pipeline originating in California as evidenced by this link and following quote:

http://www.casinocitytimes.com/news/article.cfm?contentID=160451

-----------------------------
Pacific Texas said its project would reduce the cost of gasoline by providing Texas-area refineries as an alternative to California refineries, now the sole source of gasoline in Las Vegas.
---------------------------

I believe this is a profound National Security Issue until this other pipeline is built.  A series of pipeline or pumping station bombings by a coordinated terrorist attack would leave this city in dire straits.  Tanker-rigs would not be able to adequately resupply this gambling mecca over such great distances.  Please take protective measures as required so that any forseen damage can be quickly repaired.  Thank You.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?
-------------------
If I get a real reply [not a software robot-reponse], I will post it on TOD.

Brazil says they are self sufficient til 2015. Source
 I thought they were 100% confident that ethanol would answer all their energy concerns. Question is when 2015 comes around, how much are they willing to pay oil?
When they are desperate for oil, i bet they pay any price. (If it's still sold in $$$$ and not Euros.)
I thought they were 100% confident that ethanol would answer all their energy concerns.

Where did you ever get that idea? Certainly not from Brazil.

I think they are pretty sure that ethanol will provide for about 25% of their gasoline needs and realize that is great.

On a seperate note,
The world has an abundant supply of oil, and high petrol prices are just the reality of a globally-traded commodity, ExxonMobil Australia chairman Mark Nolan says.

Mr Nolan used his speech to the Asia Pacific oil and gas conference in Adelaide on Monday to debunk the theory of peak oil, which suggests oil supplies have peaked and will dwindle over the next 20 years.

"The fact is that the world has an abundance of oil and there is little question, scientifically, that abundant energy resources exist," Mr Nolan said.

"According to the US Geological Survey, the earth currently has more than three trillion barrels of conventional, recoverable oil resources.

"So far we have produced one trillion."

source

So where is the production?
Am i to beleive that it's safe to buy a Hummer now?

Just saw an article in the online version of the Wall Street Journal that will probably appear in Thursday's print edition:

Producers Move to Debunk Gloomy 'Peak Oil' Forecasts

By BHUSHAN BAHREE in Vienna and JEFFREY BALL in Dallas
September 14, 2006

Leading players in the petroleum industry, including Saudi Arabia and Exxon Mobil Corp., are aggressively arguing that plenty of crude oil remains for world consumption, in an effort to counter critics who contend crude output is about to plateau.

That argument, known as peak-oil theory, has provided intellectual backing for the boom in crude prices and sowed doubts among some policy makers about crude's long-term reliability as an energy source. Such doubts, coupled with concern over sky-high prices, have added impetus to the search for oil substitutes -- including in Washington, where President Bush this year declared the U.S. "addicted to oil" and sparked a boom in interest in ethanol.

...

In a sign that oil-supply concerns are gaining currency, the Department of Energy has asked the National Petroleum Council, an oil-and-gas-industry research group, to investigate peak-oil claims. The council launched a study that includes different industries and environmental groups and appointed Lee Raymond, retired Exxon chief executive, as the study's chairman. It will survey existing studies and examine why they differ on how much oil and gas the world holds and what the response should be.

My understanding is that the NPC report id due out in November.

BTW, the authors invite e-mail at "first name" dot "last name" at wsj dot com.

Is this going to be dueling reports?

U.S. Energy Secretary Samuel Bodman, former boss of Boston- based Cabot Corp., an oil and chemicals company, has asked the National Petroleum Council, which advises him, to investigate whether oil supplies can keep pace with demand. The U.S. Government Accountability Office, the nonpartisan congressional watchdog, is due to release a study on peak oil this November. Rep. Roscoe Bartlett, a Maryland Republican, has formed the Congressional Peak Oil Caucus to sound the alarm.

http://www.energybulletin.net/19890.html

Not the same report, right?

I think it is the same report. The report was commissioned months ago, so it is not new news in today's WSJ. I think the authors synthesized several pieces of information for their article. At any rate, it's due out in November, so we won't have to wait much longer to see what it says. My guess: "there's plenty of oil out there, but it will take large, sustained investments to produce it."
I just had to post a link to this photo here.
Insanity at it's climax.

http://www.pbase.com/scared_of_the_dark/image/56085743

Hello TODers,

I realize that it is late in the thread, but Kissinger said:
-------------------------------
"We now know that we face the imperative of building a new world order or potential global catastrophe. It cannot be done alone by either side of the Atlantic. Is that realization sufficient to regenerate a common purpose?"
--------------------------------
Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?