The Oil Drum

Under the fold is a letter from Mojo Man, who wonders about the efficacy of the public transit model.

There was a short period of time last Saturday when Denver was subjected to a rolling blackout as demand met up with a limit on natural gas supply.  The company has now explained the problem (under the fold).

This site generally focuses on the world situation in regard to oil production.  However, given the concerns that are beginning to arise about the supplies of natural gas this winter, it is important to also keep an eye on the situation there.  The NYT has just drawn a worrying, but sadly not unexpected, picture of the growing problems that industry and the country will face as natural gas supply and demand entangle. The tenor of the article relates to the costs pointing out that the United States now has the highest prices of any industrialized country. More than half the homes in the country are heated by natural gas, and because of potential shortages, industry may face shut-down since dwellings have priority in times of shortage.  This is not new, the impact of higher prices has already driven some industries abroad.

We need to declare a national crisis," Andrew N. Liveris, the chief executive of the  Dow Chemical Company, said in recent testimony before the Senate. Dow, the nation's largest chemical maker, has shut 23 plants in the United States in the last three years in places like Somerset, N.J.; South Charleston, W.Va.; and Elizabethtown, Ky., as it shifted production to Kuwait, Argentina, Malaysia and Germany, where natural gas is cheaper.

"Call it demand destruction," Mr. Liveris said. "Dozens of plants around the country have closed their doors and gone away, and are never coming back."

And while the article suggests that some of the problem arises from the loss of production in the Gulf, there are other causes.

The hall is not quite full, but the organizers have capped attendance at between 420 and 450.  The first two talks by Tom Petrie and Chris Skrebowski brought that quiet hush at times that you hear when there is really bad news.  The talks were full of information, and give reason why it is a lot more informative to be here than just to look at the slides, though they will be posted to the ASPO-America site.

Tom was the more optimistic, but in part built that optimism on depletion rates worldwide of 2.5 to 5%.  As Chris noted it may be going up to 7%.  (His question to CERA was why they were not willing to accept the rates of decline that folk like TOTAL and Exxon Mobil report).

Well with only a 20-min break I must return, perhaps some of the others may wish to append more.

Given that some of us may be heading out to Denver today for the Denver World Oil Conference, this ia a good chance to raise some of the issues that might be discussed.  The program is on the ASPO America site.