DrumBeat: September 23, 2006
Posted by threadbot on September 23, 2006 - 9:14am
Topic: Miscellaneous
Experts look for the floor on oil prices
An oil economist who accurately predicted two years ago that oil would reach $70 a barrel has reversed course, saying recent steep declines could foreshadow a sell-off to $20 or less."Nobody in the government sector who thinks about policy thinks it can happen. That's the greatest danger," said Philip Verleger, an independent economist who heads PK Verleger in Aspen, Colo.
Get ready for oil supplies to dwindle, experts warn
Some observers predict a social and economic meltdown as severe as the Great Depression
Clinton raises billions for world issues
A conference hosted by Bill Clinton on world problems ended Friday with the former president announcing a total of $7.3 billion in pledges to help reduce global warming and fight Third World poverty, disease and ethnic strife.
The State Department yesterday sharply criticized a recent move by the Russian government to curb a major Western oil-and-gas-investment project in Siberia, saying it put in doubt Moscow's willingness to honor major energy deals with foreign investors.
A Gusher For Big Oil Is Drying Up
Western giants used to have easy pickings in Russia. Now Moscow is taking a harder line.
Jan Lundberg: (How can we already be) looking at the end of the age of oil and abundant energy
James Howard Kunstler on relocalization and peak oil: transcript, video, and audio.
Put crudely, petrol panic runs out of puff
The doomsday scenarios of Peak Oil theory - that we have already found most of the oil available and are rapidly running out - gained fevered currency. That interest has since subsided and the theory itself has been dismissed by oil companies. "Peak oil predictions are not new," ExxonMobil Australia chairman Mark Nolan said at the Asia Pacific Oil & Gas Conference last week. "They have been occurring, particularly at times of high prices, regularly since the 1920s."
Nigeria to Pull Shell Ogoni License
Alberta Expects $111M Extra from Cancelling Royalty Tax Credit Program
Alberta expects to gain a further $111 million by ending a 32-year-old royalty tax credit program to energy companies.Energy Minister Greg Melchin says it's time for the program to go because oil and natural gas prices are trading at much higher prices than historical averages.
Silicon Valley explores solar technology
Engineers and entrepreneurs in Silicon Valley are taking advantage of their expertise in computer chips to design and manufacture electricity-generating solar cells that they hope will be increasingly competitive with traditional energy sources such as coal and natural gas. Most solar cells and chips are made from the same raw material from which the valley gets its name.
Japanese makers give ethanol a gander
While Detroit ballyhoos ethanol, Japanese automakers are quietly positioning themselves in case the gasoline alternative becomes more popular.
I recently attended a task force meeting by our mayor on energy and efficiencies and afterwards mentioned peak oil to several people. They all acknowledged they were familiar with peak oil but then every one of them pointed the news they heard about the discovery in the gulf.. I pointed out that the discovery would in no way change the course of peakk oil worldwide but they seemed reserved in their opinions..
I believe the MSM story put any worry the people had about peak oil behind them.. It no longer on their radar..
========It's all about population!
What part of the elephant are you fondling???
Feed the Homo Saps their usual diet of sound bites all day long and see how quietly they sleep...:
"Houston-based oil consultant Dan Lippe of Petral Worldwide said that with worldwide supplies growing, he wouldn't be surprised to see oil back below $50 a barrel, and perhaps as low as $40, within a few years -- if not sooner."
http://news.yahoo.com/s/ap/oil_prices;_ylt=Atiq40jhT7EJJg40U0dsDT6AsnsA;_ylu=X3oDMTBiMW04NW9mBHNlYwM lJVRPUCUl
Same with poliTICS too - just "trust us" says the UN and Coffin Anan... (and the gullible in Israel say let Iran have the bomb... ):
"Nasrallah said his guerrillas have replenished their arsenal and have more than 20,000 rockets which they will never give up unless a stronger Lebanese government takes over.
The Iranian-backed leader's tough stance was aimed at demonstrating that Hezbollah was not weakened by U.N. peacekeepers..."
And where are those Israeli Soldiers again... ???
http://news.yahoo.com/s/ap/20060922/ap_on_re_mi_ea/mideast
Planet Earth is currently experiencing a Wiley Coyote Moment. Festivities will resume again shortly. Energy is Non-negotable and the Oil Dealers in the middle east are barely sane so it is not a good idea to take poliTICS too seriously when dealing witht them.
"I don't want to harp on this, but when you have a lot of Americans thinking, really, that God is going to come down and save them... you know, I joke about it and you smile, but when they get up in the morning they just know, that's reality for them! "
http://transitionculture.org/?p=457
I think the same applies to all of godz childrens.
Perceptions and "simple" godz-fearing/hearing folk do not mix well in a Peak Oil world. Whether it's The Second Helping of Christ or the 12th Imam, whatever, it doesn't look good for the Sap team.
Its not warfare its ensuring demand destruction occurs outside the US to protect our way of life.
Their going to die soon anyway right ?
But if you look at the way it was announced at the time, all North Sea concerns were over.
"The Jack discovery on Walker Ridge block 759 was drilled in 2004. The discovery well encountered more than 350 net feet of pay. The Jack #2 well was drilled to delineate the discovery. (...) Four Lower Tertiary Discoveries
Jack is one of four discoveries by Devon in the lower Tertiary trend of the deepwater Gulf of Mexico. The others are St. Malo drilled in 2003, Cascade drilled in 2002 and the 2006 Kaskida discovery." http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/09-05-2006/0004426162& ;EDATE=
Jack2 will be followed by another production test next year. The Jack2 production test took place in the spring of this year.
"The test was conducted during the second quarter of 2006 and was designed to evaluate a portion of the total pay interval. During the test, the well sustained a flow rate of more that 6,000 barrels of crude oil per day with the test representing approximately 40 percent of the total net pay measured in the Jack #2 well. Chevron and its co-owners plan to drill an additional appraisal well in 2007." http://www.chevron.com/news/press/2006/2006-09-05.asp
Note that the test results were announced after the Labour Day long-weekend. One might speculate that the delay in the announcement may have been because of bureaucratic inefficiency.
Chevron-Texaco's geologists have been speculating on a possible 3 to 15 billion barrel recovery from the Lower Tertiary Wilcox trend in the deep waters of the Gulf of M. since at least the spring of 2005. The nine discoveries to date offer potential recoveries from 30 to 400 million barrels of oil each. Chevron's geologists had this to say in 2005:
"Key technical challenges for trend commerciality are: 1) reservoir quality and flow capability; 2) drilling and completion technology; and 3) development of infrastructure. Continued discoveries in the trend and successful flow tests planned in early 2006 could very well transform the Lower Tertiary Wilcox into a world-class petroleum system in the deepwater GoM." http://www.worldoil.com/magazine/MAGAZINE_DETAIL.asp?ART_ID=2596&MONTH_YEAR=May-2005
The Jack2 production test last spring was one in series of events in a long term process, which began in the 1990's, to determine the amount of recoverable oil in the deepwater GoM and the technical feasibility of recovering oil in the conditions present there.
An additional concern affecting the feasability of transforming the Tertiary into a "world-class" petroleum system relates to Hurricane activity.
Why did the media turn a minor springtime step in a long march, that may be leading nowhere, into a major September event and evidence of the wrongness of the Peak Oil 'theory'?
Disclosure: The millions Chevron-Texaco gives to Republicans and a few oil industry friendly Democrats exceeds even Exxon-Mobil's 'generosity' in Washington. http://www.sunlightfoundation.com/taxonomy/term/219
Is there anyone out there who knows the normal time between production test and announcement of same?
I recognize that I'm suggesting that the timing of the announcement was delayed in order to maximixe the political impact. This may not have been the case. Either way, the facts of the so-called 'discovery' this year belie the claimed significance of the find.
A real problem lies with lazy journalism and concentration of media ownership.
Most Americans are totally unaware of the enormous scale of deepwater 'desperation exploration' ongoing throughout the world.
http://www.rigzone.com/news/article.asp?a_id=36156
Did the conversions: 2,400 meters of seawater = 7,874 feet, 7200 meters of drill depth = 23,622 ft or 4.47 miles. The hopeful potential of 6-8 billion barrels is approx 1/2 of the optimistic potential of the 15 billion barrels of Jack. Ideal working conditions in the GoM vs the cold, wet weather off Newfoundland. My guess is that if icebergs come down this far: tugboats will have to lasso them, then drag them away to prevent a berg from hitting any platforms.
Consider the Hibernia platform:
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The Hibernia platform is located off Canada's east coast, on the Grand Banks of Newfoundland. Hibernia is recognized as one of the most significant artic offshore developments. It serves as a study in oil exploration and production under extreme conditions. Hibernia is the only platform in the world designed to withstand the direct impact from an iceberg.
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Famous last words? Consider this really close call:
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But one day in the 1980s, a complacent observer on a now-defunct floating rig somehow let an iceberg get to within five or six miles of the rig. Typically, bergs move at a clip of about one knot.
There was a mad scramble, Baker says. The weather was too rough to tow the iceberg. Three of the deckhands on one boat and two on another were washed around the deck and got hurt. The only option left was to try to pull the rig's eight massive anchors up and move the rig out of danger. But one of the anchor chains on the rig got tangled; there was no question of breaking free. It was far too late to deploy helicopters or use rig-to-ship baskets to evacuate the crew on the rig.
The guys on the rig were watching to see which way the berg was going, Baker says. At the last minute, the supply boats managed to pull the rig 100 meters sideways. The berg came straight over the wellhead where the rig had just been. That was the closest call. In times like those, says Baker, your heart rate starts going up and you hit maximum blood pressure. There are so many things that can go wrong.
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Consider the ERoEI of this Hibernia project with cool photos: PDF warning.
If the MSM actually reported on the many deepwater efforts it would scare the people. Most sheeple act & think like all that is required is to just poke a hole in the ground safely onshore with a dinky rig and then petroleum products ready to use come gushing out of the ground.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
http://www.corrosionsource.com/CS2000/session04/paper0402/paper0402.htm
But basically, money cures all problems. If you have enough money, then you can do most anything until the value of the resource falls to: at, near or below the value of the money you wish to invest / risk.
I understand that Thunderhorse is subject to some corrosion problems as we speak.
Deep sea (High pressure solubility) corrosion should not really come as a surprise. The Titanic and the Bismark are disolving, the passengers and crew that made it to the bottom have already disolved. Ceramics do quite well though.
As with all things, Thunderhorse, Jack, etc. They are affected by the theory of diminishing returns. Some call it a law. Once you get beyond peak, you spend more and more money* chasing less and less value. It doesnt have to be oil. It could be a copper or gold mine; it could be the North Atlantic Sperm Whale population, it could be the Cod population in the North Sea or Grand Banks.
*Money is just another way of representing energy.
I am using Future in a larger sense, as in "Do electric cars have the ability to displace the internal combustion engine? Or will they be instrumental in crashing the electric grid, becoming far more despised than the SUV?"
In a smaller sense I hope electric cars have a future, if for no other reason that I would like to have one and hook it up to our off-grid, solar-electric system. But in the larger sense, they are extremely problematic.
Electric vehicles have a fatal flaw vis a vis scaling. Once enough people convert to them, the overstretched electric grid crashes and not only does transport suffer, but the entire electric based system crashes as well. To prevent this would require an enormous investment to upgrade the grid.
But even if the investment capital were there, it is not at all clear that the energy to create additional electricity is available.
Coal provides 51% of electricity generated; nuclear 20%; natural gas 17%; hydro 7%, petroleum 3%, biomass, geothermal, wind and solar 2%.
Hydro and petrol are static sources, natural gas is set to decline in the near term, and, unless more nukes are put online, the decommissioning of the old ones will cause an additional decline. Wind and solar (1%) will have to grow exponentially even to be relevant.
Which means coal will have to expand to cover these other declines, as well as covering new demand -- or there will be shortages and rolling blackouts. So if large numbers of households switch from internal combustion engines to electric cars, thus doubling or tripling their electricity usage, they will place a burden on the grid which will at some point cause it to crash. This will not only stall a lot of transportation, but will also crash the infrastructure and damage the economy. If the blackouts persist, everything comes to a standstill; you won't even be able to buy groceries with cash, since the cash registers are electric.
If rolling blackouts become routine, and are blamed on proliferating electric cars, you can bet the backlash against these vehicles will be fierce.
It seems premature to worry about an impact that would not kick in until we converted more than 20% of the current fleet. Convert 90% of the rest of the fleet to hybrid or other vehicles that got 50 mpg per gallon and one has reduced oil consumption by over 60%. Impose severe restrictions on the use of vehicles that get less than 50mpg. In other words, restrict the use of big trucks to uses that actually require the hauling capacity of those trucks. My personal observation is that the vast majority of trucks are driven around and to the city with one passenger and empty beds. Not to mention that the vast majority of 4 wheel drive vehicles are never driven off road.
The above doesn't even take into account additional savings that could be garnered by more compact cities, bicyling,walking, and more mass transit, including light rail.
We should be so lucky as to be in a position to actually have to worry about PHEV or BEVs exceeding 20%. And besides, it can still make a valuable contribution without being the entire solution.
The above is a pipedream, of course, but the problem is technically solvable without having a major impact on the grid.
This is all theoretical, of course, given our current leadership who think that 10 year $3 billion technology programs are actually going to address peak energy and global warming.
It's all way too little, way too late. I am sorry but I fear we just have to prepare for the deluge. Read today that European forces will start to emit large quanities of nitrous oxide which will exponentially impact global warming. It's been a good ride, but I think we may have to bid the planet adieu.
Back of the envelope numbers, current consumption figures from the EIA:
Annual US energy consumption is 100 quads (quadrillion BTUs). Of that, 40 quads goes into generating electricity and 28 quads goes into transportation. The transportation quads are, for this purpose, all petroleum. On an end-to-end basis, electric vehicles are about twice as efficient as petroleum-powered ICEs at converting raw BTUs into miles traveled. There are a variety of factors, but the end-to-end calculation is dominated by ICE efficiency at about 20% and current average generating efficiency at about 40%. Given that 2:1 advantage, if the transport fleet were converted to electricity, it would require additional generating capacity equivalent to about 14 quads, about a 35% increase over the current level. Today's generating capacity is 35% greater than it was in 1989, suggesting that such an increase could almost certainly be accommodated over a period of 20 years. Coincidentally, 20 years is about the time that it normally takes to turn over the transportation fleet.
New generating sources could easily be more efficient than the current average. Integrated-cycle gas-fired plants are about 60% efficient; coal-fired plants that use gasification should be about 60% efficient; and plants based on direct-carbon fuel cells should approach 70% efficiency. If you assume 60% generating efficiency rather than 40% -- and that's not really a fair comparison, since it will be a long time before the grid average reaches that point -- then the all-electric path would have roughly a 3:1 advantage over ICEs and the generating capacity measured in terms of BTUs of fuel would have to increase by a little less than 25%. And of course, some of that increase might not need to occur if electricity use in other sectors (eg, residential lighting) was decreased through improved efficiency.
IMO, though, the real reason to convert to electric transport is because that's the form of energy that is most likely to be readily available in the future. The easiest way to convert wind and solar to useful forms is to use them to generate electricity; the same for advanced nuclear, if you like that; and biomass run through a direct-carbon fuel cell to power an electric vehicle is going to be much more efficient than converting it to ethanol or butanol to power an ICE.
This is a clumsy way to do it. More elegant fixes are possible. But you are creating a fake issue.
It is abundantly clear that the proponents of EV's are not looking at a future with as many cars/trucks using the highways as we have today. They are also the ones advocating Carpooling, Biking and Walking, more Trains or Buses, redesigning our cities and towns to require less transportation. Your argument is hyperbolic, taking the point to the far extreme.
The suggestion of using generators at home was, similarly, not asked to be extrapolated into the norm for this future, but he said clearly that there were many, more elegant ways that people would be able to adapt for charging EV's, that would be unapproachable with ICE's.. with the possible exception of BioDiesel.
Somewhat impractical but more reasonable than throwing in the towel in advance.
Very slowly now. You buy an EV. You retire the old ICE. No gas being purchased to power ICE. Maybe the grid is challnged to charge the EV, maybe not. The gas is still on the market. Go buy the gas and use it to power a charging system that is fundamentally more efficient than a variable speed variable load travelling ICE bolted into a car frame. Why is this so hard?
- If all households switched 100% of transport-energy consumption from gasoline @ 126000 BTU/gallon (140 billion gallons/year) and 14.6% tank-to-wheels efficiency to 70% generator-to-wheels efficiency, the additional electric consumption would come to about 1080 billion kWh/year. This is about 21% of current US consumption.
- This additional demand could be met by burning the equivalent of 53 billion gallons of gasoline in combined-cycle powerplants at 55% efficiency. Such plants are cheap and quick to build, allowing rapid response to increased demand.
- Wind power could displace at least 35% of the oil required by the CC plants, perhaps more.
- DSM could increase the displacement further, but by a quantity I can't calculate at the moment and won't speculate on.
So, a complete switch could (assuming about 120 GW of new wind power on-line) eliminate 140 billion gallons/year of gasoline consumption and replace it with the aforementioned wind plus about 35 billion gallons-equivalent of petroleum. Even before calculating the savings from reduced refining losses (not having to meet octane, aromatic or vapor-pressure requirements for motor fuel) that's 75% less. The additional electric supply could easily be built out as fast as the vehicles hit the roads.I don't give your collapse scenario much credibility.
The formatting on this looks somewhat screwy in preview, but I'm hoping it'll look right after posting.
<li>Maybe from the reduction in vehicle size and recycling of uneconomic SUV's?</li></ol><blockquote><i><br>
There are big issues with placing any turbines in the US. It's nice that there are bigger ones, but in these numbers that is a problem in itself. They are physically bigger as well. People don't want them. Offshore perhaps, but that brings its own set of problems. Location is a big headache. Anywhere the wind blows is no solution. Not all locations are even fit for 1MW turbines, and you'll need all locations you can get. 1 MW looks reasonable as an average.
But OK, let's say, at 1.5 MW, you need 160.000 turbines. A windpark of 80 turbines is really big, certainly onshore. Hence, you're looking at 2000 windparks. That is an awful lot of locations. It will take many years of political struggle to find them, if at all. And then you get the point that they don't produce 24/7, so you would need spare capacity.
If Boeing stops making planes, you <b>may</b> have a shot at facility. If not, you have to build. And recycling ain't likely to get you the required steel, it's probably cheaper still to mine. But demand for steel will soar if more countries want lots of wind.
All I'm trying to do is say that in theory and on paper, it all looks feasible, but in practice, it's a different story.
Germany has a third of all windpower in the world (some 20 GW of 60 GW), and it's taken them years to build that.
If steel were short then cars would suddenly get smaller and lighter which would solve a lot of problems by itself.
On the other hand, if the electric car switch had to be quick (in response to a geopolitical catastrophe) small electrics like the GEM would need that much less electricty to fuel them.
As I pointed out above, natural gas and nuclear constitute 37% of our electric capacity, and these are set to decline over the coming few years. Let's say over the coming decade we have to replace 10% with "other" sources.
If we couple this with, say, 2% increase in electricity demand, that would add another 22%. We add those together, that's 32% of total electricity increase.
In 2004, the US used 1,974 B KWh. 32% of that is 631 B KWh.
This past 12 months, wind has contributed 17 B KWh.
Does anyone really believe wind power will increase by a factor of 37 over the coming decade?
Also, is there anyone reading this who seriously thinks the grid, as is, is robust?
Let us remember that, by this back of the envelope guesstimate, we might have to replace/add a third to our elecric generation over the coming decade. (And if we judge by what is going on right now, it is primarily coal driven).
What I am suggesting is the grid is in danger, even without the addition of a large number of electic vehicles.
I am really curious. Do TOD readers really think this is a non-issue?
It is an issue. What we can't fix it? Much of the endangering has happened since it was "privatized". How about a few re-regulations then?