DrumBeat: September 27, 2006
Posted by threadbot on September 27, 2006 - 9:15am
US oil reserves up for 1st time in 3 yrs
US proved crude oil reserves last year rose for the first time in three years and natural gas reserves had their biggest annual increase since 1970, the government's top energy forecasting agency has said.Crude oil reserves jumped 1.8 per cent in 2005 from the year before to 21.757 billion barrels and natural gas reserves soared 6.2 per cent to 204.4 trillion cubic feet, according to the federal Energy Information Administration.
Proved reserves are the estimated amount of supply that economically can be recovered using known drilling technology.
Two of the four largest US oil-producing areas, Texas and California, increased their crude oil reserves while reserves were lower in the Gulf of Mexico and Alaska.
Oil price very low, action needed: OPEC chief
Oil prices are very low, harming investment in the industry and something must be done to steady the market, OPEC President Edmund Daukoru said on Tuesday.
To Peak Oil, Or Not To Peak Oil
We have been struck by the number of bearish reports and comments emanating from analysts, fund managers and assorted pundits with regard to oil, gas and other commodities. Just prior to the release of the FOMC statement on September 19, we heard a well-respected Chicago floor trader gush about how the oil bubble had burst, and how the Fed wouldn’t need to hike interest rates any further. Hearing that, we were tempted to rush out and trade in our 35 miles per gallon Honda for a gas-guzzling SUV as we watched prices at the pump plummet.Of course we wouldn’t buy an SUV, but hearing statements like that makes you wonder what all the talk of peak oil has been about over the years.
Michael T Klare: Cashing in on the fear factor
Oil Disputes Raise Tension Among Southern Sudan Factions
A simmering conflict is threatening to start another war in Sudan. This time, it is as much about oil as it is ethnicity. Unequal distribution of oil revenues, bungled oil contracts, and differences in ethnic power sharing are creating new fault lines in an already divided country.
China's Oil Deals With Iran, Myanmar Put It at Odds With U.S.
George Bush's battle to control the world's oil supply has cost billions of dollars, much more than it would have cost to discover new sources of energy.
Rising Risks for Europe's Power Utilities: Bigger investment needs, conflicting objectives, and supply-security concerns are making for an uncertain future.
Shell seeks to partake in Turkey pipeline project
Report: Russian Fuel Going to Iran Plant
ussia will ship fuel to a controversial atomic power plant it is building in Iran by March under a deal signed Tuesday, news agencies reported, as Tehran's nuclear chief met with a Russian security officer at the Kremlin.
Greenspan: Junk Sarbanes-Oxley, Raise Gas Taxes
Divergent political camps in the United States have found common ground in support of "energy security" and "energy independence". As high gasoline prices and intensifying conflicts in the Middle East focus attention on US dependence on petroleum imports, progressives and conservatives are organizing to reshape US policy based on their own views about what the terms "energy security" and "energy independence" mean.
Interior Dept. criticized over unpaid royalties: Lawmakers say agency should collect as much as $2 billion from companies.
Big Oil moves ahead on human rights, slowly
Changed climate will cook elderly people
When the great heatwave of 2003 struck Paris, it left 14,802 people dead; 30,000 people died throughout the rest of Europe. It was, according to Britain's chief scientific adviser, Sir David King, the worst natural disaster on record.Sixty per cent of those deaths occurred in nursing homes, retirement homes and hospitals.
Gas-Guzzlers in the Capital: Governor, lawmakers don't exactly practice what they preach.
Economists on climate change: do we care?
Will the spending needed to prevent global warming cost the world more than just sitting back, or even enjoying the possible financial benefits of a hotter planet?Economists are divided over that cold financial calculation in the week ahead of a major report on the issue to be presented to ministers of the world's leading nations.
White House said to bar hurricane report
A government agency blocked release of a report that suggests global warming is contributing to the frequency and strength of hurricanes, the journal Nature reported Tuesday.
[Update by Leanan on 09/27/06 at 11:08 AM EDT]
Summary of Weekly Petroleum Data for the Week Ending September 22, 2006: Oil tumbles as gasoline supplies surge.
[Update by Leanan on 09/27/06 at 2:25 PM EDT]
The Arctic: Oil's last frontier
Twenty five percent of the world's untapped reserves could lie near the North Pole, but politics could prove harder to crack than the ice. |  |
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
First, a security/Iraq compendium from a usually non-political source:
Just in case you were feeling secure
Then some more directly energy related:
Texas is more hospitable than Mass. to wind farms
Decline in Gas Prices Isn't Buoying Detroit
Apologies if they're repeats.
Copper thieves get killed cutting into power lines
Bruce in Cumberland County Illinois
The question is just how much havoc criminals will wreak before they lose their wheels.
So yes, higher price does increase reserves. It is still doubtfull if it increases the flow of oil. IMO, it doesn't
2003 - 79.8-mbd
2004 - 83.2-mbd
2005 - 84.5-mbd
A new quarterly record was set in 2006Q1 of 85.17-mbd
A new monthly record was set in July 2006 of 86.23-mbd
Just the facts, ma'am. IEA facts. It is time for the peaksters to realize that they have been misled by lotsa hype that never measured against on-the-ground production/refining escalation. And the best (2010) is yet to come ...
Before then, it seems a bit wild to say that it's the 'peakster' side that has been misled by hype. In the meantime, Stuart's graphs, and Khebab's, use the same IEA numbers. Whether they are facts, jury's out. That's why they use multiple data sources. And the overall picture looks pretty flat to me.
And there is no correlation betw price & URR or betw price & extraction rates.
The correlation is between price rises and price drops vs excess capacity at any given moment in time.
I agree with that - so how do we measure excess capacity - you got any charts?
Could you provide some evidence to show that Freddy is wrong in his conclusions? A counter-argument, let's say, with numbers?
Of course there has been a considerable divergence in the IEA numbers and the EIA numbers since December. The IEA numbers are still right up there or are higher than December while the EIA numbers are down by almost a million barrels per day.
Somebody is lying.
Or, alternatively, as Keith Richards once said,"What's a morning?"
It's been a good day. As long as we can keep Odo(or, Auto, as I like to call him) awake.
Just don't let me hide the scotch. I might hide it down my throat.
However, I understand the world's growth in useage yeilds a demand level of around 185 mmbpd in 30 years being needed. If it were possible to raise production that much, then how come production seems nearly flat? Why do the Saudi's not produce more oil? How come the US oil companies can't replace their reserves except with natural gas?
But, besides all that Freddie really pissed me off about two or three months ago, and I hoped to return the favor. While I don't have the long memory for slights of the ladies of our species (watch out for Paris, she's gonna remember and get even!) I do remember long enough to get in a gig or two.
My real, no joke best hunch says that oil prices dropped when the 30 something guys in the hedge fund biz swapped out of energy futures in the wake of Amarynth. The rise in the Dow and the S&P results from them redeploying their funds in a safer place. The same reason interest rates are low in spite of the Fed-the Hedge Fund Cowboys are huddling in a safe refuge while they figure this stuff out .
But we'll all figure this out with perfect 20-20 hindsight in a couple of months, or we'll all be sitting barricaded in our homes while hordes of ravening zombie S.U.V. owners clamor around trying to suck our gastanks dry.
But he knows what he is talking about.
When I say he pisses people of, what I mean is, it's not really what he is doing - it is how you read him.
It is you that is being pissed off.
Take a look at yourself. You are angry not at Freddy but at the fact that you have no numbers to refute what he is saying.
Self-hatred is good is this case. We should not try to denigrate others, but rather provide numbers and argument for a counter-offensive. Self-hatred provides us with a possible motive to do that.
For without these numbers and argument it is difficult to see how Freddy is wrong.
That's the problem here. You are talking past his points. You assume he's wrong amd you are right before actually debating.
Take a closer look.
I give a rat's ass. Probably much more. I'd also rather have Freddy analyzing numbers for me(when I don't have time to do it for myself)than anybody else here.
Well...with the possible exception of Stuart, but he doesn't post here anymore.
Seems to me the difference right now is simply between IEA and EIA as long as we're looking at this too short time frame of the last 2 years. One shows modest increase, one shows flat. Either could represent a peak/plateau or not. My problem with Freddy is that he never addresses the arguments brought up here in terms of field decline or other specifics. He presents IEA numbers and then talks of the modelers he presents on his website, but doesn't go beyond that. It winds up as a parallel, sometimes belittling argument between individuals each playing with their own toy.
But I don't really want to enter this fray anyway, and he is right that in the past peakers underestimated the production potential of the world. That may or may not be the case again.
All of these don't have certain numbers to attach, and the possibilities are enough to throw the peak several years one way or the other.
Only hindsight will be 20-20. In the meantime we each make our best guess based on our interpretation of the most likely scenario. It does seem, as Freddy has stated, that the models are doing some converging, but there is still a ways to go before the mist clears.
We can answer them based on what we want to believe. What we want or wish the numbers to be based on our undeniable forecasts of how the future must be. Curve-fitting.
Or we can base them in retrospect on the actual numbers.
Or we can try to forecast them in some sane manner based on our experience from how numbers in similar situations in the past actually worked out, using statistics, etc.
I prefer a combination of the last two options.
One of my mottos has been,"Always expect the unexpected."
I would have no problem with the scrutiny that is afforded Hutter here, if it were only applied to everybody else in an equal manner. Certainly we can find persons and statements more deserving. Freddy does his homework.
Good evening to you ... and thanks.
He's also consistently an asshole, rude and insulting. This does not necessarily invalidate his position, but I responded to this in a purposefully insulting manner. I have a strong streak of asshole too, and sometimes I react a little too quickly. I apologise to this forum for showing it sometimes.
One data point does not make a trend. IMHO the jury is still out on peak oil, it may have happened about the beginning of the year as WestTexas thinks, it may be about 2010 as Robert Rapier and ASPO think, or it may even be in 30 years as Freddie and Exxon think. I am not emotionally involved in a position, I truly hope Freddie is right because we all need to make changes in our lives and political decisions and more time is better for humanit6y in general.
My personal belief is the true root of this problem is humanity's overpopulation. My grandparents were all born in a world with 1 billion people or so, which was the population of the earth for around 2,000 years. This seems sustainable, and I'm pretty sure we've surpassed this ands a consequence are running out of resources and adversely affecting the whole world and risking a population crash.
I have a srong belief that we each need to take personal responsibility for our own actions and do what we can to help the rest of the earth. That translates to conserving as much as possible and stopping reproduction of people in our personal relationships. I had one child then got a vasectomy.
As far as drinking and dope, I don't do it except for a small amount of marijuana. And about 20 years ago I realised that in order to have self esteem I had to do things that I liked myself for doing, that I needed to focus on my own behaviour rather than that of others. And thats what I violated in trying to piss Freddie off. So anyrate, Ihope this explains a little.
Peace
Thxs for the info update, much appreciated by me. But, IMO, we need to be discussing and planning for the next fifty to one hundred years for the children of the world. I think all TODers agree detritus entropy needs to be mitigated somehow by a paradigm shift to a less FF energy intensive lifestyle until biosolar powerup is a widespread success.
Recall my earlier posting whereby I suggested that tremendous benefits will accrue to an FF-exporting country that exerts maximum effort to adopt early biosolar living for its citizens. Now I have never been to Russia, nor do I claim to have widespread understanding of Putin's power to leverage change. But if he, and his successors, can basically dictate and impose a beneficial lifestyle change, facilitated by the tremendous inflow of capital flows from FF exports: it will greatly serve the Russian citizenry postPeak.
IF I was Putin, I would go whole hog to inform the population about Peakoil through the Russian MSM and the education system. I would explain how minimizing internal energy needs to keep FF exports as high as possible would be wildly profitable in the future. In short, he might have the power to tell his people that Peakoil Denial is unacceptable; the country is headed in a new biosolar powerup direction, and punishment will be severe for those that resist planned detritus decline of MPP.
I would explain the need for mass-transit and walkable cities in the context of a typical Russian winter of sub-zero cold. It makes no sense to replicate the American suburban sprawl of car-dependent lifestyles throughout Russia if mass-transit and RRs can be easily enhanced and financed. Overall goal is to eliminate the need for snowplowing and/or de-icing of roads, but a much easier effort of just shoveling sidewalks leading to plentiful mass-transit stations that would not be affected by weather extremes. If a diehard Russian carowner wants to take the time to deal with tire-chains and deep snow-drifts in the bitter cold, when a warm subway ride is just a short walk away--that is his choice.
Same with the material distribution infrastructure--optimize away from delivery trucks running in all directions over black ice roads when weather-immune underground and/or overhead conveyors and RRs could swiftly distribute the goods instead. Putin could probably dictate earlier storage of larger inventories of essential goods to get away from JIT delivery problems during the winter too. Consider my earlier posting on a pricing floor on natgas to force conversion to stored fertilizer and/or insulation--Putin could easily dictate that requirement throughout Russia.
I think it would be great if he could dictate that pedal bicycles or battery-powered mopeds would be the primary way to see the summer countryside once one leaves the RR depot. For the winter vacationer it could be required use of cross-country skis and/or horse-drawn sleighs.
Same with housing: Putin should dictate a massive retrofit and/or rebuild of all buildings to the highest eco-tech standards possible to save wasteful burning of FFs. Why repeat in Russia what Kunstler is constantly warning us about in our current lifestyle? Does Putin have the power to dictate a modicum of sq. footage per Russian--imagine how much energy Russia could save if no new eco-tech house or apartment in Russia was larger than 1200 sq. feet, with most much smaller?
Does Putin have the power to dictate to his country's engineers and designers to get this societal shift done ASAP? If he does, then he not only does Russia a tremendous favor, but he will automatically force the world to adopt similar efficiency savings. IF Russia can live a very comfortable lifestyle at the Bangladeshi equivalent usage of two cups of detritus/capita/day by max-leveraging biosolar powerup to maximize their export power, then it forces the rest of the world to try and match this efficiency level. Otherwise Russia, as a swing producer, will keep consolidating much of the planet's wealth from those still stupidly dependent upon extravagant detritus exported by Russia.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
However, your suggestions about how to reorganise Russian society, while in some instances very worthwhile, are not likely be realised. Russia is also a plutocracy, and while the presidency fortunately has considerable powers to safeguard national independence, they will not be used to override wholesale the demands of capital.
Families on Java island to be relocated
Earlier Wednesday, protesters dumped a truckload of the mud outside the offices of Welfare Ministry Aburizal Bakrie to demand he do more to help the some 10,000 people displaced. Bakrie's family owns Lapindo.
"This is out of control and not enough is being done to stop it," said Emmy Hafild, executive director of Greenpeace Southeast Asia, the environmental group that held the protest. "Bakrie should not run away from his responsibilities."
Police did not try to stop the protesters from pouring about 1,540 pounds of mud on the sidewalk outside the ministry. Some of the demonstrators carried a banner saying "Stop your mud Mr. Bakrie or your mud will stop you!"
Bakrie, one of Indonesia's wealthiest businessmen, has been quoted as saying the mud flow was not his responsibility.
This guy Bakrie doesn't seem to see the irony in the fact that he's the "Welfare Minister"... That's gotta be one messy sidewalk, though.
This perfectly natural phenomena would have happened without drilling anyway. It would have worked to surface under its own pressure.
Its time people got a bit real about what the earth can do compared with what mankind can do.
Shit happens when you live in an active subduction zone.
Just as daunting, however, is the infrastructure needed for the intended use (personal transportation). In the CNN article referenced above, a claim is made for potentially charging a vehicle with $9 worth of electricity in 5 minutes. Examining this datum, in the least, clarifies the difficulty of replacing liquid hydrocarbon fuel with anything else for this purpose.
Assume 10 cents/kWh for electricity. This means that $9 worth has a total energy of 90kWh. To charge in one hour, you need 90 kW of power. Even more scary is that to charge the thing in 5 minutes, you need to deliver around 1 MW of power over that time. To "fill up" 1000 vehicles at once requires it's own nuclear power plant (GW). Apparently, there would be banks of similar capacitor storage devices at the charging stations, but they would eventually have to get there power from somewhere.
The other puzzle is, how do you even make the connection to the car? Power is amps times voltage. Starting with 1 MW, divide by any rational voltage, and tell me what wire is going to carry that current. I'm rewiring my house, and you need a beefy 6-gauge wire assembly to handle 50 amps, for example, an electric range. Any ideas?
The underlying issue is that the energy density (36 kWh/gallon) and the ease of transfer (e.g. pumping gas into your car at MW rates) of liquid fuel is hard to match.
FWIW, Clean Break has a new post on EEStor (seen in its rss feed):
http://tyler.blogware.com/blog/_archives/2006/9/26/2363466.html
Unfortunately that server seems to be wacked right now.
As it is, rescuers get specific training on responding to an accident scene involving a hybrid. The power supply in a Toyota Prius is 50kW at 500V, so 100 amps at 500 volts. If a rescuer cut into that improperly, he could receive a lethal shock. Short-circuiting an ultracapacitor might even be explosive.
Then, last night a reader sent me a copy of an article in WSJ. I don't have a link, but here are some excerpts:
Right. Cheaper alternatives that they don't want us to have. That must explain why Shell is funding cellulosic ethanol producer Iogen, and almost all oil companies have alternative fuel ventures. Furthermore, as I have pointed out before, if ethanol is cheaper to make as Khosla has claimed, and yet the price is consistently higher than for gasoline, just who is ripping off whom here? Since ethanol producers are earning much fatter margins, it seems that they are doing more ripping off in this case.
There is one thing you can say about Mr. Khosla. He never lets facts get in the way of his claims. I recently asked Ana Unruh Cohen, who helped write the legislation, the following two questions:
What happens if the proposition doesn't raise as much money as anticipated? Who pays the difference, and how?
She responded:
So, "a maximum of 10 years", eh? It would appear not. Of course this wouldn't be the first time Mr. Khosla has been guilty of exaggerating claims in order to argue his point.
LOL @ "who is ripping whom off?"
Imagine if the world took Hirsh's advice "the world should be spending $1 trillion per year developing alternative energy sources -- including tar sands, oil shale and gas liquefaction..." alone with other scams like ethanol "research" that would make people like Khosla truly rich.
I am reminded of the book "Cadilac Desert" which came out in the late 70s, filling in the sordid story of an out-of-control federal pork program that had already dammed every decent hydro site in the country, and was increasingly pouring vast quantities of concrete wherever there was a congressman who needed to provide jobs. Jimmy Carter threw all his power and prestige into trying to derail this machine, and the machine ran him over. Carter never recovered from this defeat.
The author, Marc Reisner, did an update in 1986, and disclosed that the dam program had suddenly died. Why? Because Reagan's tax cuts made this massive pork project untenable, and it fell apart.
So, Bush's bankrupting of the US treasury will have one unintended benefit; it will prevent future presidents from pouring hundreds of billions into destroying the Four Corners area in the vain hope of getting oil from shale oil. And it will greatly hobble federal attempts to subsidize Khosla's pipe dreams.
If an energy idea is worth doing, investors will make it happen. If it's their money, they'll proceed with what works. Governments proceed with projects based on who wants money, not what works best.
IMO the big scams are on the production side.
There are large deposits of coal centered around the four corners states, AZ, NM, CO and UT. There is a great deal of overlap.
Either of these would be greatly impact the water resources of the Colorado river basin, which includes all the major SW urban areas.
I greatly fear that as oil gets scarse, the rest of the country will act on Jimmy Carter's old recommendation and declare the entire area a "national sacrifice area" and go at it.
$ $ $ $ $ $ $ $
Hypocrisy and lies in the worship of Mammon is nothing new.
best, Dave
Sowing doubt and confusion will be a big part of his message. He's looking to get support from people who don't know the issues. If it boils down to his opinion vs yours, the most optimistic message wins. That's politics, and politics is the name of the game.
He jumps easily from positive EROEI to "silly question", no problem. That's how he plays, and most people are none the wiser.
Dr. Jeckyll and Mr. Khosla
As I said at the end of the essay:
You're arguing from facts, so the higher the standards of the exchange, the better for your side.
I actually considered a different title, but I wanted to clearly convey that he appears to have two completely different opinions, depending on who he is speaking with.
People have been arguing lately about whether or not the price of oil is being manipulated. I have long thought that its not oil prices that are being manipulated but rather gas prices. Though like most people, I couldn't figure out a plausible scenario for how it could be done. But this guy, has come up with a fairly plausible one.
A couple of quotes:
If this doesn't make too much sense, I apologize. I am more than a bit hungover this morning. This is what I get for going out to bars on a weeknight! (Oh well, at least there were some cute girls there.)
Latest numbers out today - unleaded gas up 6.9 mil barrels - crude up per API and distilates as well. If people quit buying - then they have to cut the price.
Every week it looks so much more like the 70's and the PO BS that went on then.
Prediction - just like the 70's - OPEC abandons their quotas and start pumping like crazy - flooding the markets with more oil than anyone can use.
Sure wish someone could find some charts an graphs from the 70's to see if the patterns match.
You hit the nail on the head. I have been watching inventories build, and this is why gas prices are in free-fall. Supply is outpacing demand, and that situation is not sustainable for very long without prices starting to fall. When they fall to the point that margins shrink toward zero, you will see refineries start to cut back on production.
Of course there will still be a large segment who believe that the real reason for the free-fall is a secret phone call between Bush and the heads of the major oil companies.
http://thehousingbubbleblog.com/
An excerpt from today's post:
Some West Coast stories:
http://thehousingbubbleblog.com/
and as the tide/backwater then falls you see it just left a whole lot of cheesy trash on the banks. The boats are gone on downstream then to catch the next tide.
No one ever goes and cleans this trash up. They don't like to go near the moccasins or get their paws dirty. Those who try to farm in this litter are amazed. There is little of value in plastic diapers,foam dinnerware and dirty tinsel.
FWIW, one of the most disturbing things, and the most obvious signs of the impending bubble, was that mortgage companies have been lowering loan requirements steadily over that time.
But you're right, buyers need to be involved too. Assuming that this is not some special case, and that they guy didn't expect some other windfall (a risky thing in itself) ... he seems to be a last-minute tulip buyer.
too much "greed" and not enough "fear" on his part.
I had arguments in the past with realtor friends who firmly believed this and would propagate the myth.
This doesn't excuse the individual who took the risk from personal responsibility.
So when these people start defaulting, how much will it take? Deeath by a thousand cuts?
Was there a profit motive? Or, can we be more sinister, and was it an effort to facilitate handing out mortgages with every purchase of a box of Tide?
I think it is called "Spreading the risk" or maybe collecting "Financial Cannon fodder."
If I remember correctly, it was Feb 2002 that Greenspan gave a speech to bankers at a San Fran (I think?) convention in which he actually told them to lower their lending standards to let "the little guy" get a piece of the ameriKan dream. Of course that was before the multitude of rate cuts had gained any traction and Greenspan was desperately seeking pallbearers.
We've hit Peak Financial Fodder and now there are not enough Fools being born every minute to sustain the charade.
As home prices flatten, a multibillion-dollar piggy bank running dry
But lower gas prices could be salvation:
Make sure to read # 7 if nothing else.
Eight Market Spins About Housing by Perma-Bull Spin-Doctors...And the Reality of the Coming Ugliest Housing Bust Ever....
http://www.rgemonitor.com/blog/roubini/143257
You hit the nail on the head."
So RR, you agree that "Peak Oil is BS" and there is no difference between this decade and the '70s?
I guess that means I should go out and buy that Hummer after all!
Latest numbers out today - unleaded gas up 6.9 mil barrels - crude up per API and distilates as well. If people quit buying - then they have to cut the price.
That is exactly correct, and what I have been arguing here for some time.
down 20% from 1991 (390)
down 14% from 1983 (370).
Note: current US oil consumption 37% higher than in 1983, 25% higher than in 1991.Current inventory level is approx the same as 2 years ago and the trend is clearly downward.http://www.apachecorp.com/Explore/Explore_Features/20060828/Topic_Report_Oil_Inventories_and_Prices/
The more key issue at the moment is that we are awash in gasoline. That is putting downward pressure on gas prices. But we are pretty high on crude inventories compared to the past few years. Check recent inventories with respect to current inventories. You will see that we are pretty high. Comparing to a spike in 1991 is not really representative. Also, if I am not mistaken, prices started to collapse following that inventory build in 1991.
Jan thru Sept 2005: 260,071,000 Brl's
Jan thru Sept 2006: 314,587,000 Brl's
It don't look down 20% to me.
As Apache pointed out in the post up the thread, no one tracks inventories on the basis of quality--light, sweet versus heavy, sour--but the spread between light, sweet and heavy, sour prices is quite a bit higher than in the past.
I have thought for a long time that building inventories of heavy, sour crude are obscuring flat to declining inventories of light, sweet crude.
Does anyone know if the process is publicly documented?
We should be able to put this speculation to rest one way or the other.
Is there a good article or something that explains the refining techniques and problems revolving around refining high sulphur oil?
TIA
It's not really following the supply/demand scenario right now because I would expected a large fall in prices today.
There is no longer a terror premium, threat of hurricanes, there is geopolitical stability, the DOW is close to a record high...everything is peachy king.
So, why the heck is oil not at $20/barrell?
It usually take a month or two for stats to catch up with reality. I wonder if the bottom is falling out of the markets, even as we speak? (or read, I should say)
1) The Hurricane season never really took off this year, so no further damage to the GOM Infrastructure.
2) Last years emergency buy-ins from Europe and SPR releases did not happen this year.
3) Nigeria, though still hot did not become a nightmare (Unless you happen to live there)
4) The KSA is still the KSA and not an Islamic republic
5) Americans and Brits got hammered by high energy prices in the Winter both for heating and travel.
6) Americans and Brits are looking at credit card statements and reigning in. (post summer vacation statements, and new school uniforms and course fees etc)
7) Americans are facing a housing crash and theoretically disposable income (credit) is lessened. This is passing through quickly to all sales of all types of goods. Especially major transactions, like houses, cars etc.
8) The Q405, Q106,Q206 Belt tightening is hitting now.
People are cutting back, feel less chirpy, spending less on fripperies.
Fuel consumption falls, inventory builds, no pinch points occur.
Why should not oil fall in price? ... for now.
It may even continue falling, (giving more ammo to the PO deniers), until, one day, the amount of supply cannot ever be ramped to meet a sudden surge in demand. Because of inexorable depletion of available flows of oil (forget reserve increases. ''Reserves'' are a wine cellar in somebody elses house)
It does not mean PO has gone away. I have always been a strong believer in the bumpy plateau. Increasingly combined with sighs of relief followed by screams of terror, just like a roller coaster.
`'At first it is all `'oohs and aahs'' and then it is all running and screaming''.
- Jurassic park. :-)
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/curren t/txt/wpsr.txt
Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged nearly 1.5 million barrels per day, the fifth highest weekly average ever.
But is seasonally adjusted gasoline consumption down? Before the recent price drop, people were commenting on how high prices were NOT affecting consumption in the short term. Earlier this year, Kaibab concluded that prices were not affecting consumption that much (google cache).
It should also be noted that the recent gasoline price swing is much larger than the oil price swing would seemingly warrant. Again, the reason might be the increase in imports of finished gas from Europe.
Here is comparison data going back a few years:
It seems that consumption patterns are more affected by seasons and restricted availability (70's shortages and rationing) than price swings. $4/gallon? $5/gallon? Maybe that would do it, but who knows. But it stands to reason that if you have consistent demand (with an increasing slope) and you are near the production limit (oil peak?), wild price swings will be the norm.
Weekly Petroleum Status Report
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/curren t/txt/wpsr.txt
Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged nearly 1.5 million barrels per day, the fifth highest weekly average ever.
Hmm crude oil supply does not seem to have changed much.
I think refineries are finally not a bottle neck.
So this leaves demand destruction, we are probably already starting into recession it will just take a while to tally the numbers.
Thanks
Aside, I remember the strike you were talking about and how it caused a temporary spike, but it did moderate as SA came online.
Glad to have you and your contributions on board even if we don't wind up agreeing!
In order to evaluate the validity of the scenario that you posted, I would have to know 1). How much money was "tracking the index"; 2). When selling actually took place; 3). How big an overall percentage this represented.
From yesterday:
I can say that I doubt that George was involved in any phone calls with the heads of Chevron-Texaco, Devon, or for that matter Exxon, except of course to invite the former CEO to report on the "Peak Oil Theory". George does other things. Like read his lines. Lately he's been traversing the country reading lines about how peace is breaking out in Iraq and the Middle East and how terrorism is on the run.
Karl, Dick and various lesser lights do phone calls.
If I wanted to take maximum advantage from a small and ultimately only marginally significant production test in the ultra deep GoM, which I conducted in the spring at the site of a two year old discovery, on behalf of a political formation, which I annually fund in the millions of dollars, I would wait until after Labor Day to make my announcement. I would have flunkies throw out big numbers, since I know that most journalists stopped doing math as soon as academically possible and are challenged by notions such as probability. I know from years of experience that I will be able to leverage the traditional end of driving season and winter gasoline trends. I also know that the economy is slowing and that a slowing economy puts downward pressure on energy prices. And of course I pray that God send the hurricanes somewhere else.
Thus, as always, winners try to make their own luck, and count on some real luck for good measure.
One thing about conspirators is that they are sensitive to the possibility that they themselves will be victims of an opponent's conspiracy. Which is why George was given lines of outrage to read in 2000 about Bill abusing the SPR for political ends.
So Robert, you are not the only person to realize that gasoline prices are not set in 2006 by political or corporate edict. But that doesn't mean that political operators and corporate heads don't conspire to influence short term pricing. What's at stake for some is access to multi-million dollar retirement packages unimpeded by windfall profit taxes and the like. And for others possible prosecution for war crimes and corruption.
The conspiracy to fabricate a case for war on Iraq was not immediately apparent. But in time it has become plain for most to see. And in time I don't doubt we will begin to see the gameplan for retaking Congress in 2006.
See yesterday's Drumbeat for a lot more about Kirby and Goldman Sachs Commodity Index.
This is Rob's original article.
http://www.financialsense.com/Market/daily/monday.htm
I want to get at the risks associated to concentrating farming in the US and the supply chain risks associated to year round demand for bannanas. I've found several articles on google scholar, but I can't really find any good stuff on the risks to agriculture and the larger consequences such as how GW, and depleted water tables are affecting growing.
Any help would be appreciated.
There is soil depletion, ever increasing chemicals use, water depletion, US ag in the hands of 5 families, subsidies, pervasive spread of corn syrup, GMO crops and the money behind them, government interests, exports, crops vs livestock, it's a long long list.
US AG in 5 families hands? Can you point me where to find that info?
I'm trying to focus on risks associated to centralized agriculture and the supply chains necessary to make it possible. I'm including depleted water tables which I will segway into Global Warming as the biggest threat. I've also got some terrorist stuff to fill in some white space. I'll make the necessary connections to failure of crops and what thay does to US food price levels. I've got Plan B 2.0 on hold at the library. Isn't this the book all about the agricutlure problems coming?
Well, there's Hawai`i, which is part of the U.S. Bananas aren't strictly indiginous, likely being brought over by the ancient Polynesians, but they do grow there, and have for a long time.
"Why does Hawaii have an Interstate Highgway System?"
"Interstate" refers more to the funding than the highways. The funding is pooled among the states.
In the four years I was in Hawaii I thought the correct way to say it was Havahhhh eeee nnnaaahhh(phonetically that is).
Aloha nui nui
and No huhu...
airdale--Oahu and Pearl City Tavern(is the monkey bar still there?)
That is considered the correct way to spell it these days. From Wikipedia:
Actually I dont' care one way or the other since at this the zanax I was just prescribed makes it moot anywy. When last I was in Hawaii (Ohau) TPTB decided to make it a state. At theim time I was sitting at the merry go round bar right on Wakiki Beach and while totally drunk I was at least lucid enough to realize that this was being shoved totallyh down the last few remaining true natives throats.
Now another paradise ruinded by the offal we call capitalist and entreapenurs of this great and stupid land of the 'haole round eyes'. So it goes. Soon at last it ends.
I did enjoy my time there 1957-1962 before it was despoiled.
I had once upon a time decided to return for visit but knowning how it had changed I decided to keep my memories intact.
More of our world destroyed. What is next? ALL OF IT, and FAST AS POSSIBLE. Glad I will be exiting in 10,15 or so
years.
If fact judging from the stange event this morning on the road that seperated my brain from my phsical body it may be even sooner. Funny , I almost welcomed it and did in face refused the 9/11 ambulance. I am wish skip the upcoming dieoff but somehow I would love the see the beginning , so as least I can say 'told you so"
.....
......
LMAO!
Tate,
The desire (and ability) to trade is not a phenomenom related to the Oil based economy.
Back in the 1800's they used to harvest Ice in New England, store it in large ice houses, and ship it down the coast (sail based transport) to points as far away as Cuba and Jamaica throughout the summer.
Point being - oil is not required for distant areas to trade goods.
The bannanas are like a whole paragraph maybe, of my 6 pages I need. The real focus is the problems with american agriculture in terms of depleted water tables and GW. I'm also trying to find the source for stats on how many calories of energy it takes to farm 1 calorie and how many miles the average food travels. The high use of fertizlizers based on NG, would also be helpful. I've got 50+ page of articles and acedemic papers and only a handful have any real meat on these issues.
People around here talk about it all the time, but I don't know where anyone gets their info to substantiate it, so maybe I'm calling BS on some, but I would love to get that info to help me out.
he is the one who said it takes 10 calories to grow one
"patzek" has written a lot on it too
Eating fossil fuels by Pfeiffer is still online at FromThe Wilderness.com, ver useful for numbers
True that bananas will probably be low on the list. But if they're scarce, that means you can charge more for them, making it more plausible that someone will round up the capital to try and get some delivered.
Then I guess it becomes a matter of if there's a market for them at the price it costs to get them here.
It's crazy to think that they are grown far away (Ecuador, Costa Rica, Columbia), shippped to the US, and still cost less then 20cents each.
You should read Lester R. Brown. Perhaps google him. He wrote Plan B 2.0. Lot's of stuff in there about agriculture, water tables, global warming.
Kinda makes me feel like a realist.
Tom Anderson-Brown
Families: Perdue, Cargill are privately held, Tyson as well I think. It's been a while since i focused on it, got to dig.
Recent mergers:
Cargill/Monsanto
Novartis/ADM
See:
Hefferman: Concentration in US agriculture
Concentration af Agricultural Markets-PDF
The Corruption of American Agriculture-PDF
I've got both Lester Brown books reserved to be picked up asap. This should be a snap now that I've got the knowledge to draw from.
Outgrowing the Earth: The Food Security Challenge in an Age of Falling Water Tables and Rising Temperatures
Both of these are downloadable in pdf chapters.
US AG in 5 families hands?
[/i]
Bunge
Carill
Continental Grain
Dreyfus
Toepfer
Read "The Merchants of Grain"
Can't remember now who wrote it though ..
Triff ..
Those are companies, not (all) familes
Cargill is not a family, it's owned by a McMillan family.
Continental aboviously is not a family.
Bunge may be.
The book mentions 5 companies and 7 families. Can't find a proper review just yet.
We'll keep searching.
(the article tells a lot about these firms' political influence, good information, but no space here)
And some more on Cargill, the biggest of them all:
(Now Cargill/Monsanto, not unimportant, see GMO seeds)
As for ADM and Bunge both are publically traded and I believe the families own less that 20% still significant but not as much as in the past. You get to the third or forth generation and most of the trust fund babies just want to live the life of leisure and not getting their hands dirty with running these companies. For what its worth I have worked with both ADM and Cargill of and on for 30 years and find the people at Cargill to conduct their business with the highest level of integrity.
The Truth Behind the Spinach Scare: Cheap Beef
Anyone out there in the utility industry know what the price point is for Nat Gas that would make it cheaper to use than coal for electric production?
So I hope they get that fire out. The parking lot is surrounded by lovely old pine forests, with a little meadow that is the prettiest thing you've ever seen. There are some past astronomer's ashes scattered there. I hope it's spared.
From the article Economists on Climate Change
Mendelsohn probably puts killing off Africa in the plus column because northern whites are simply worth more. David Neiwert writes in "The Rise of Pseudo Fascism" that we are not in the grips of fascism because there is no overt violence. There is no overt violence in killing off the inhabitants of a continent (or several); they just can't compete.
cfm in Gray, ME
Some of the models show that we are going to experience an ozone hole recovery stall due to the effect I outline above. But the key is chlorine and that is showing a persistent decline.
http://www.ewg.org/oil_and_gas/maps/region_map.php?fips=49000
Neat!
Chesapeake just announced shutting in production of 6%
Chesapeake just paid $10,000 an acre for a lease on the Dallas-Fort Worth International Airport. Wonder how long they have to start drilling? Anybody know the terms more exactly?
What it really shows is how the Majors have abandoned onshore production. They've been selling off production for years as they can't support office towers full of accountans on stripper production, and they see the politics as too difficult.
Howsomever sir, pipelines make the decision on how much gas they will buy, not producers on how much they will produce. Take or pay contracts ended about 25 years ago and nearly bankrupted the pipelines. I wonder if this cut is general? I haven't heard.
Wonder if the hedge funds that were investing in NG have now decided to get back in the crude oil game.
Query: why are all these gasoline imports flooding into the USA when demand is supposedly declining and refineries are operating at nearly full capacity?
Huge build in inventories versus predictions of petroleum imports dropping by 6% in 2006, theories of declining gasoline demand versus a galloping increase reporterd by EIA, I fear my head may never stop spinning.
If you can find the increase (decrease) in demand from 2005 to 2004 for the corresponding week in September, then calculate the increase (decrease) in demand from 2004 to 2006, then annualize that, you might get a better idea of the underlying increase in demand. My guess is that there will be a decrease from 2004 to 2005 due to the hurricanes, and when that is combined with the 3.8% increase reported today, you will get an annualized increase somewhere in the range of 1-2%.
From last year's This Week in Petroleum (Sept. 28, 2005):
From 2004's This Week in Petroleum (Sept. 29, 2004):
This shows a rise in demand from 9.2 to 9.4 mbd, or about a 2.2% increase over two years which corresponds to a 1.1% increase per year. Note that this is less than the 1.6% increase reported from 2003 to 2004, so a very tentative presumption is that demand growth is decelerating.
From Bloomberg :
I wonder what it will be when they are going to walk the walk.
Lowest in the country I do believe....$1.80
Big Al is a retired Guru. Unless a prophet is killed in his prime or physicially asends to the heavenly realms, most of his later pronouncements are ignored. Too bad the slut didn't speak out for energy security and higher taxes when he still had a little power.
Below is a graph of weekly spot oil prices from January 2001 to September 15, 2006. The recent price decline, while large, still doesn't impact the overall trend very much. And when displayed like this you see the year over year price increases very clearly. What sounds like a good deal today was yesterday's misery. Also note that the price drops are common at this time of the year in the past and that future increases should be expected late next spring and early summer. If the changes remain of the same magnitude as prior changes this would place next summer's spot prices in the high $70 to low $80 range.
The big variable will be the impact of the megaprojects all due to start coming online this year through 2010. So far there is no sign that these projects are doing more than offsetting current declines. Growth is non-existent. According to the latest Oil Market Report from the IEA, global demand remains between 84 and 85 mbpd. The current drop in price should test the cornucopians nicely. With lowered prices should come increased demand. If there is excess capacity, then prices will stay down but if not, we'll enter another round of Westexas' bidding cycles. Since I see no evidence of increased capacity, I will continue to expect another round of bidding wars to again drive oil up through the late fall into early winter.
OpenOffice.org, an open source multilingual, multiplatform office suite.
Oil is down about 20% from recent highs.
Oil is up over 500% from the 1999 low of about $10.
The 1999 low occurred just when the Economist Magazine predicted the onset of permanent $5 oil prices. An excerpt from a Golden Oldie, the 1999 Economist article follows. Note that oil prices are currently more than 1,000% above the Economist Magazine's predicted lower range for "Normal" oil prices.
http://www.casi.org.uk/discuss/1999/msg00181.html
All things considered -- no pun intended! -- his performance wasn't too bad, really, for somebody from The Economist. To be fair, he did say that supply & demand remained tight. Give that man a Gold Star.
Oh, look! We're almost at $63/barrel today. Looks like $60 was the bounce (floor) price. I hope SAT got the "buy" signal.
I had thought it might go down further based on what appeared to be a herd-like bearish frenzy. Nope. Oh, that wacky oil market!
Lots of people read The Oil Drum. We just don't know who if they don't comment or contact us confidentially. Khebab's work is outstanding, of course.
I did make some remarks about the timing of this oil price crash -- it has seemed suspicious to me on the eve of an election. Manipulating the markets has a long and inglorious history. But again, people have short memories, as the great John Kenneth Galbraith used to emphasize. It would be easy, for example, to create a hedge/pension fund stampede out the oil markets by getting a few big players to withdraw. Most humans are malleable and go whichever the wind is blowing. Therefore they are subject to manipulation.
But in the end, the fundamentals will win out the way they always do. And the fundamentals support the peak oil position. From here on out, as the years pass, they always will.
The main question I keep going back to and need to ask the Cornucopians to explain is...Why is oil still over $60 in the absence of any bad news?
Is it merely because Saudi Arabia says they don't want crude to go below $60? Why $60 if they are going to have so much EXTRA capacity in the future? The ONLY reason I can think of is that the cost of extracting that oil has gone up.
Re: data available to understand why prices are going up and down in the short term, not even Robert...
No disrespect to Robert -- who, to my knowledge, has not written about oil prices. Do you even fucking read what I write?
-- Dave
Do you even fucking read what I write? Is this addressed to me or Robert?
Just consider that INDIVIDUAL THREADS regularly attain the length of short books (150+ pages if you were to print them out), especially when they get beyond 300+ posts.
Gas is down - go back to sleep
by Kelpie Wilson
http://www.energybulletin.net/20919.html
The Peak Oil Crisis: The Perfect Storm
http://www.fcnp.com/index.php?option=com_content&task=view&id=285&Itemid=33
It's the equities market that's been giving me headaches.
I know that the DOW is near record, but I also view it as a dinosaur. I usually like to average it with the S&P, Nasdaq, and certain Russel combinations to get a more balanced picture.
I personally believe that we need to have oil sustain below $50 for a while before we see sustained upward movement in the market. No predictions. Just a gut feel.
Needless to say, the Biden amendment runs counter to many of the plans that are on the table. It seems the political battle will be over the difference between "enduring presence" and "enduring access". Hey, you don't like the word permanent? No problem! What's in a name?
Still, this gem is worth quoting:
Language such as that leaves so much available in the way of loopholes.
Also language such as that is extremely short sighted and completely idiotic. And I'm not picking on Biden just because of that, I actually liked his suggestion of splitting Iraq into 3 provinces.
But what happens if tomorrow, the Chinese become aggressors to the Middle East. What if we then need "permanent" bases in Iraq, similar to the arrangement we had in Europe to counter Soviet aggression? Langauge like that is symbolic at best, and bad law at worst.
It does leave me wondering what the meaning is of "Operation Enduring Freedom." How long they intend that to last. Not permanently, I'd guess.
I try to keep the posts at an acceptable length.
So I ask again... When exactly will the Iraqis be given this facility?
Mexico update time. As desperately poor as the average Oaxacan is, nonetheless, detritus panic is setting in as social polarization is rapidly culminating, as evidenced by this Reuters article. Stratfor suggests the current Oaxacan Gov is asking for lame-duck Presidente' Fox to use the Federales' to crush the resistance to restore his former ruling Gov power. It boils down to whether Fox has the cojones to solve the issue, or whether he just wants to pass the whole stinking mess to Calderon when he takes office in Dec.
And as usual, our US topdogs can't resist stirring up the Mexican hornet's nest. Consider SOS Condi Rice's choice words:
excerpts:
--------------------------
MEXICO CITY - The office of President Vicente Fox on Wednesday took offense at U.S. Secretary of State Condoleezza Rice's suggestion that Mexico looks ready to embrace bipartisan politics, saying it wasn't up to her to voice such opinions publicly.
During the Wall Street Journal interview, Rice indirectly endorsed Calderon, saying Mexico "had a very close election where the loser - you know, admittedly, the good guy won in a sense, but the loser wanted to take it to the streets."
"And he got," she said, "it looks like he's gotten encircled and contained."
---------------------------
The poor Mexicans won't be happy to read this, but the Bankers' Alliance will be.
A final note: indigenous tribes took over a dam and cutoff the water supply to the downstream cities in Veracruz State, but heavy rains flooding the rivers may have blunted the impact of this political action for now.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
One final Mexico addition before I go to bed. Platts says Pemex faces dilemma over calls for new refineries in Mexico:
---------------------------------
....... With crude production having reached a plateau, or perhaps even a decline in future, "there's no two ways
about it," he says. Any increase in refining capacity that could bring Mexico close to self-sufficiency will inevitably lead to a drop in crude exports "and nobody seems prepared to admit that."
--------------------------------
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I hope they were able to warn some people.
------------------------------
SYDNEY (Reuters) - A strong earthquake with a magnitude of up to 7.0 near the remote Samoa islands group in the South Pacific had generated a tsunami, the Pacific Tsunami Warning Center said on Thursday.
"Sea level readings indicate a tsunami was generated. It may have been destructive along coasts near the earthquake epicenter," the Hawaii-based warning center said on its Web site (www.prh.noaa.gov/ptwc/).
--------------------------------
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
© Reuters 2006. All Rights Reserved.