Oil
Peak oil overthrows green revolution?
First
posted
Tuesday April 5, 2005 08:37
Updated
September 24, 2009 07:05
Oil: Our Biggest Ally comment.
Asphalt peak oil problems.
September 24, 2009
06:59
From what you read on this page you can see the power of
the media to shape, as opposed to report, the news.
http://www.prosefights.org/oil/oil.htm#shape
|
09/24/2009
The oil industry has been on a hot streak
this year, thanks to a series of major discoveries that have rekindled a sense
of excitement across the petroleum sector, despite falling prices and a tough
economy.
These discoveries, spanning five continents, are the result of
hefty investments that began earlier in the decade when oil prices rose, and of
new technologies that allow explorers to drill at greater depths and break
tougher rocks. ...
More than 200 discoveries have been reported so far this year
in dozens of countries, including northern Iraq’s Kurdish region,
Australia, Israel, Iran, Brazil, Norway, Ghana and Russia. They have been
made by international giants, like Exxon Mobil, but also by industry minnows,
like Tullow Oil. ... |
Hedging helps keep Southwest in
Black
By David Koenig
The Associated Press
DALLAS - The computer screen on Scott Topping's desk at
Southwest Airlines flickered with row after row of dates and numbers, but they
had nothing to do with arrivals and departures.
They tracked the price of oil futures for the next several
months, and they told a grim tale: no letup in sight from record prices for jet
fuel.
"We're on a one-way street right now," Topping said as he
hunched over the screen, shaking his head.
It's Topping's job to oversee Southwest's battle to control
surging fuel costs. It is the most successful program of its kind in the
airline industry.
In the first quarter of this year, southwest paid $1.98 per
gallon for fuel. American Airlines paid $2.73, and United paid $2.83 per gallon
in the same period.
Since 1999, hedging hae saved Southwest $3.5 billion. It has
sometimes meant the difference between profit and loss. In the first quarter,
hedging gains of $291 million dwarfed Southwest's $34 million profit.
Hedging is a financial strategy that lets airlines or other
investors protect themselves against rising prices for commodities such as oil
by locking in a price for fuel. It has been described as everything from
gambling to buying insurance. Airlines can hedge in several ways, making
financial transactions with banks, energy companies or other trading partners.
They can buy contracts for crude oil or unleaded gasoline,
and reap a gain if prices rise, offsetting the higher cost ofjet fuel.
They can buy a "call option" that gives them the right to
buy fuel at a certain price.
They can also use collar hedges, a combination of rights to
buy and sell at set prices ("call" and "put" options). Collars provide
protection from a decline in prices but less upside if prices rise.
Airlines also use swaps, contracts that require them to buy
oil or fuel on a certain date at a set price. These are risky - one party in a
swap wins, the other loses. -
Most airlines use a combination of strategies to reduce
risk.
The transactions carry a price tag. Southwest spent $52
million on hedging premiums last year and $14 million in the first three months
of this year.
As a result mostly of trades made years ago, Southwest has
hedged 70 percent of this year's fuel needs at $51 per barrel instead of the
current price of more than $140 per barrel.
But hedging premiums rise and fall with the price of the
underlying commodity, making new trades very expensive. Southwest has not done
much trading in the last several months.
Airline executives say hedging is not a bet on the direction
of oil prices.
"We view our program as insurance," said Paul Jacobson, the
treasurer of Delta Air Lines Inc. "Our goal is to minimize the volatility of
fuel expenses. To do that, you've got to be in the market actively without an
opinion as to what energy prices will do."
But hedging carries risks. Airlines can lose money if oil
prices turn down and their opt.ions expire.
In 2006, Delta won approval from a bankruptcy court and
creditors to get into hedging. But the airline got squeezed when oil prices
dropped in midyear, and it reported a loss of $108 million from the trading.
Continental Airlines Inc. reported a loss of $18 million
from hedging in the first quarter of 2007. But like Delta, Continental is still
hedging.
At one time in the 1990s, most major U.S. airlines hedged
some of their fuel costs - even hiring experts from the oil industry to show
them the ropes - said Peter Fusaro, chairman of Global Change Associates, an
adviser to hedge funds.
That changed after the recession and terror attacks of 2001,
which plunged airlines into huge losses. Banks and energy companies that make
hedging trades with airlines grew nervous.
"The problem was that most carriers had terrible
creditworthiness and couldn't hedge," Fusaro said. "Counter-parties feared the
carriers would renege on their trades."
Southwest was the only large U.S. carrier to remain
profitable through the downturn. It benefited from higher labor productivity
and lower ticket-sales costs. That, and a healthy balance sheet, allowed it to
keep hedging when oil was a bargain, compared to today's prices.
Now, Southwest is the only big carrier that has most of its
fuel expenses hedged.at below-market prices. And analysts say it will be the
only one to earn a profit this year.
While other carriers plan to slash flights later this year
- some contracting by more than 10 percent - Southwest
expects to grow, although more slowly than it would like.
And Southwest has avoided· the kind of fees that
annoy passengers. It doesn't charge for checking luggage or buying a ticket
over the phone, doesn't add a fuel surcharge to the fare, and still gives out
free sodas and snacks.
Business Outlook, Albuquerque Journal Thursday July 3,
2008 |
Why gas in the U.S. is so cheap
Thursday May 1, 10:13 am
Out of 155 countries surveyed, U.S. gas prices were the 45th
cheapest, according to a recent study from AIRINC, a research firm that
tracks cost of living data....
|
Crisis in Mexico
Is Headed North
By BRIG. GEN. GREG ZANETTI
New Mexico National
Guard
The perfect storm for social upheaval is now brewing in
Mexico - and in particular Mexico's northern states along the U.S. border. The
first storm front is to the east at a place called Cantarell. Long a blessing,
Cantarell is Mexico's largest oil field - and largest source of government
funds. Output from Cantarell is down more than 15 percent from last year and
many believe the field is now in irreversible decline. Thus, government budgets
are being strained.
The second front is to the north. As the U.S. economy has
slowed so have remittances from the United States to Mexico. The housing crunch
has disproportionately affected Mexican tabor (both legal and illegal). As U.S.
construction, landscaping, remodeling, and there housing-related jobs have
evaporated so has a vital source of income to Mexico.
The third storm front is food. America's well-intentioned
but misguided emphasis on ethanol has caused food prices to rise beyond the
poor's income. Corn prices have tripled and tortilla prices have soared. Food
riots and protests are now common throughout Mexico and confidence in the
government is eroding.
The result is this: income flows to Mexico are falling
while social unrest is rising.
Predictably, this storm is now manifesting in violence in
Mexico's northern states and it is becoming apparent that Mexico is having
difficulties maintaining stability. Meanwhile, drug cartels are having no such
monetary problems.
Well-financed and well-armed drug cartels effectively
compete with Mexican police and army units for control of large sections of the
border. Open shoot-outs between government forces and drug gangs are becoming
more common.
When the power shifts enough, the drug cartel effectively
becomes the ruling government. When the government gets the upper hand,
however, it is not uncommon for the drug lords to flee across the border to
sanctuary in the United States, where they rearm, me-equip and reorganize. Some
Texas towns are now warning their citizens to stay away from the border because
the lawlessness is out of control.
Meanwhile, south of the border, Mexico's honest citizens
are faced with one of three choices: hide, fight or flee. Most are currently
choosing to hide with the hope that the violence will subside. If, however, the
violence escalates and conditions continue to deteriorate, history is clear -
flight becomes the next best option. More than likely they will flee north to
safety.
Thus, while the debate rages in America over illegal
immigration, events on the ground are evolving in an entirely different
direction.
America's next border issue may not involve people crossing
to improve their lives, but rather people crossing to save their lives.
Zanetti, along with 80 other members of the N.M. National
Guard, Is serving a year-long tour at Guantanamo Bay, Cuba, where he is second
in command.
Albuquerque Journal Saturday February 23, 2008
|
Estimates vary, but environmental
groups says it now
takes two to four barrels of fresh water from the Athabasca
plus 750 cubic feet of natural gas and about two tons of oily sand to produce
one barrel of oil. The process produces two to three times the carbon
emissions of a conventional oil well and creates toxic waste water, called
tailings, that cannot be allowed back in the river. ...
By comparison,
the so-called “in situ” operations needed to exploit the vast
majority of sand reserves, which are located deep underground, cause less
disturbance on the surface and require less water. But heating the bitumen
underground and pumping it up also requires much more energy and produces far
more greenhouse gas.
Production is falling off a cliff. The U.K.'s oil and
gas output peaked in 1999 at 4.5 million barrels a day (a figure that combines
oil and the equivalent output of natural gas). Today it's about three million
barrels, a figure expected to decline by 10 to 15 per cent a year. The U.K. is
now a net importer of oil and gas.
Mexico's Cantarell field, one of the
world's most prolific oil producers, is sweating too. Last year's production,
which averaged 1.78 million barrels a day, was 13 per cent lower than the
previous year's. A similar decline is expected this year.
"For highter EROEI, the difference is negligible. But it
skyrockets when you approach 1."
I think this is a critical issue that is being grossly overlooked.
Here's a little table I built to illustrate the basic concept:
EROEI % net Representative Source
100:1 99 Early oil
50:1 98 Mid 20th century
33:1 97 Late 20th century
25:1 96 Turn of
21st
20:1 95 Century oil
15:1 93 Oil now?
10:1 90
9:1 89 Deep
water oil?
8:1 88
7:1 86 Tar sands?
6:1 83
5:1 80 Polar oil?
4:1 75
3:1 67 Biodiesel
2:1 50
1.5:1 33 Oil shale?
1.33:1
25 Ethanol best
1.25:1 20
1.1:1 9
1:1 0
1:.7 -43 Ethanol worst
The next steps are to consider increasing population and declining
extraction in concert with declining EROEI. Together, those three trends cut
useful per capita energy in half before 2030, which is only a college student's
lifetime away, and which places us where we were before the green revolution,
which raises the issue of feeding ourselves - seen grain prices lately? Another
student's lifetime and we're back where we were before the Great Depression.
But I think by then we may think of that "Great" in a whole different vein, as
in that was the Great Depression, and this is the Terrible One.
Empires get hooked on certain fuel sources like dope addicts. The
Dutch were masters of wind and water. But their commercial dominance faltered
with the rise of coal. Coal fed the British Empire. But it eventually gave way
to the oil-powered might of the United States. Phillips maintains that the
inevitable transition to a post-oil global economy — whether it is based
on natural gas, hydrogen, greater nuclear reliance, renewable energy, or
whatever — “could see the United States displaced by a new leading
economic power, probably an Asian one.” The history of modern empires is
one in which transitions to new fuel sources are just not successful.
Instead, the fading empire fights it out. Not surprising
that natural resources fueled many conflicts in earlier centuries. North
American fisheries. Baltic timber. East Indian spices. Caribbean sugar and
salt. The gold and silver of the New World. The powers of empire hinged on the
command of valuable natural resources such as these.
Today, that hinge is oil. America’s oil infrastructure
is old, past its zenith. Meanwhile, the car culture drinks gasoline in rivers
with no sign of slowing down. Cars and trucks burn two out of three barrels of
oil in the U.S. Of the 530 million cars in the world, more than 200 million are
in the U.S. All of this has led to America’s consuming 25% of the
world’s energy while holding only 5% of the resource.
There was a time when those numbers went the other way. For
most of America’s rise to power in the 20th century, it produced far more
oil than it consumed. As late as 1964, the U.S. found 48 billion barrels of oil
and used only 23 billion. Ever since, it’s been getting tighter. By 1988,
it was dead even. By 2005, America used 5 times more than it found.
As a result of this great surge in demand, oil has been the
magic pixie dust that created many an American fortune. In 1948, half of the 16
richest companies in America were oil companies. As late as 1982, half of the
30 richest Americans counted oil as the initial source of their wealth.
Now America’s oil dependence is the Achilles’ heel
of its international dominance. Phillips quotes Michael Klare, a theorist on
the resumption of global resource wars. Klare writes that oil is no longer just
a commodity but a national security matter. The U.S. military has become a
“global oil-protecting service.”
People will say it is not so important to own the resource
as it is to have the ability to pay for it. That is true. And that brings us
the second mark of empire: the rise of finance at the expense of making things.
Empires past all had their manufacturing capabilities hollowed out. In place of
that stood the business of financing things, of pushing paper, of printing
money.
Spanish observers in the 17th century wrote smugly about how
London made fine fabrics, Holland chambrays, Florence cloth, and India linens.
But it was Spain that enjoyed these things, because Spain had money. The Dutch
and British held a similar conceit. The British economist William Stanley
Jevons wrote with assurance: “The plains of North America and Russia are
our cornfields, Chicago and Odessa are our granaries, Canada and the Baltic our
timber forests, Australia our sheep farms…” and on and on. The whole
world worked for Britain, which paid in sterling. But this prosperity has a
sort of soap bubble fragility to it. It depends on debt and easy credit. The
empires of the past became bankrupt because of their spendthrift ways and
financial ineptitude.
email August 31, 2007 by Chris Mayer
Daily Reckoning Thursday July 26, 2007
"Americans are
delusional," began James Howard Kunstler, speaking to the investment conference
we are attending here in Vancouver.
"They think they can continue
living the way they've been living for the last 50 years. They think the key to
it is to find a way to keep getting fuel. And Vice President Cheney summed up
this line of thinking when he said,
'the American way of life is non-negotiable.'
22
February 2003
The
"American Way of Life is non-negotiable" -- as indicated by
President George Bush (Sr.) at the Earth Summit on the environment (Rio de
Janiero, 1992). George Bush (Jr.), like his father, has declared the
oil-dependent American "way of life" as non-negotiable.
In June,
1992, the Earth Summit was held in Rio de Janeiro, Brazil. At this conference,
153 countries (including the United States) signed treaties to curb the damage
to the environment from human economic activities. This conference was attended
by George H. W. Bush, then President of the United States of America, who
proved resistant to efforts to make deep and lasting changes that could ensure
protection of the world on which all nations depend. His reasoning?
"The American way of life is not negotiable".
Since then, lost in raptures of easy motoring, fried food, incessant
infotainment, and desperate moneygrubbing, we became a nation of overfed clowns
who believed that it was possible to get something for nothing, who ravaged the
landscape in an orgy of wanton carelessness, who believed they were entitled to
lives of everlasting comfort and convenience, no matter what, and expected the
rest of the world to pay for it. We even elected a vice-president who declared
that
this American way of life was non-negotiable.
The
first President Bush, at a 1992 energy conference in Rio de Janeiro, declared
that the American way of
life is nonnegotiable.
Soon after September 11, 2001, the
discussion by American government officials regarding the American response
began to pour forth. A memorable one was by American Vice-President Dick
Cheney, who before becoming vice-president had been leader of the largest
oilfield supply company in the world. Dick Cheney said regarding the goals of
"terrorists" and the "appropriate" American response:
"The American way of life is non-negotiable".
google
|
Posted Thursday July 26, 2997
I do a lot of
peak oil research and most of the world has been getting exposed to the truth
about oil. The
report by IEA two weeks ago was a turning point. This report went mainstream.
Now people (especially hedge funds) realize that oil exports peaked in 2005
and production is down 1 million barrels per day from last year.
There
is momentum for oil prices to continue to rise (unless we see an increase in
production). We could see $80 oil this week and gold rally with
it.
Posted by Rembrandt on July 16, 2007 - 7:50am
1) Crude oil -
Production of crude oil increased by 181,000 b/d from March to April. Total
production in April was estimated at 73.40 million b/d by the Energy
Information Administration (EIA), which is 850,000 b/d lower than
all time
high crude oil production of 74.25 million b/d reached in December
2005.
Simmons believes the world hit peak oil back in May
2005 because that’s when production at the world’s second biggest
oil field – the Cantarell complex in Mexico – started a precipitous
decline, which several observers have since attributed largely to mismanagement
by Mexico’s state oil enterprise.
Global Oil Production: EIA May 7, 2007.
This country today consumes about 21 million barrels of crude
oil per day, about 14 of which are used for transportation. The remaining 7
million are used for heating and the manufacture of chemicals and plastics.
The distressing fact is that more than 13.4 million barrels per day are
imported.
| The above article is another example of mainstream corpmedia
BS.
The author fails to mention to role of crude in
agriculture.
National Geographic in June 2004 reported, "A POUND OF BEEF TAKES THREE-QUARTER OF A GALLON OF OIL TO
PRODUCE."
The above article appears to be another attempt to shape
opinion - into investing - which may not pay off. |
Again, for the first cut at describing what
is likely to be one of the major paradigm shifts of the 21st century, the folks
in Portland have done an excellent job.
Much of what they say is applicable everywhere so their report
might turn out to be an instant classic. Should you be interested in just
how we might all get through the years ahead, a pdf of the report is available
online at: www.portlandonline.com/shared/cfm/image.cfm?id=145732.
You
may have heard people talking about economic systems. You may also have heard
of the energy of systems.
The laws of
thermodynamics state that the amount of energy in any system is
finite—additional energy must come from outside. What you probably do
not hear a lot about are the grim implications the laws of thermodynamics have
for our economy.
It is not industrially, socially, or politically
difficult for Brazil to replace 50% of its gasoline requirement when that
nation consumes only 8 billion gallons of transportation fuel per year. And it
is helpful that Brazil has a tropical climate, in which a unique plant thrives,
growing in the rain and under tropical conditions, and utilizing less than 1%
of Brazil’s arable land. Good for Brazil! It is just that you cannot
extrapolate Brazil’s program and scale it up to the massive and voluminous
U.S. requirement for transportation fuel, certainly not by using corn.
The U.S. can do no such thing that Brazil is accomplishing.
Circumstances are just plain different. So the U.S. is wasting its resources
and time in a boondoggle effort to make significant amounts of transportation
fuel from corn that will eventually prove to be futile. The American political
class needs to stop viewing Peak Oil, and the ominous future energy situation
of the world, as just another political issue. It is long past time to get
rational and serious about developing a long-term energy policy for the
country.
I hope that these comments have provided you with some food
for thought, if not a desire for a stiff shot of Old Overholt Pennsylvania Rye
Whiskey. Thank you for reading Whiskey & Gunpowder .
Until we meet
again…
Byron W. King
Sent: Wednesday, January 17, 2007
9:44 AM
Subject: Letters to the Editor: Ethanol, Part II
Strategic Choices for Managing the Transition from Peak Oil
to a Reduced Petroleum Society
EROEI again
On the new lease,
Shell plans to drill vertical holes 2,000 feet into the shale and heat the rock
below ground with electric heaters.
The shale will be slow-cooked at about 650 degrees Fahrenheit
for two to three years with the hope of producing a far higher-quality oil and
gas product than the faster cooking techniques of the 1980s.
The
EGL method, the simplest of the three, is roughly akin to a boiler putting 700
degree Fahrenheit steam or other hot fluids through an intricate radiator
system dug underneath the shale formation. Pipes will pump to the surface the
vapors and liquid hydrocarbons that are emitted from the rock.
Ethanol,
for the moment -- meaning ethanol from corn -- is a stupid investment, as
people are discovering.
Pretty close to 100 percent of the savings [in oil consumption]
that you get on ethanol is consumed by the hydrocarbon fuel that has to be used
to grow the corn.
Energy Return on Investment (EROI)
I
discussed EROI in an article on Peak Oil,
published Nov. 8, 2006. In general, EROI for tar sands
exploitation is extremely low, on the order of 5-10%, as efficient
relative-to-traditional oil recovery of conventional petroleum. Is it worth it
to make such massive investments to recover bitumen that yields such a low
“energy profit”? Obviously, the development is occurring. But it is
still certainly worth it to ask the question. Where is all of this going? What
are the long-term costs and trade-offs? By investing in one form of development
with low EROI, is the North American energy industry failing to invest in any
better alternatives?
Here's his answer: Right now, the oilsands produce a little more than
a million barrels a day for a global market with an 84-million-barrel-per-day
addiction. In the sands, the big berries — just 20% of the resource —
consist of a few large open-pit mines, while most of the small berries consist
of in situ or steam-the-oil-out-of-the-ground projects. Aleklett and two
colleagues concluded that Canadians could shovel and steam a full 3.6 million
barrels per day by 2018, but not without self-inducing some bad migraines.
The first headache is natural gas.
It takes 1,000 cubic feet of natural gas to produce one barrel
of bitumen; the oilsands now consume 4% of the nation's gas supply. Under a
crash program, that tally jumps to 16% by 2018, and that would max out the gas
market: "The supply of natural gas in North America is not adequate to support
a future Canadian oilsands industry with today's dependence on natural gas." If
Canada doesn't build nuclear power plants for in situ projects, the place will
simply run out of affordable fuel, says Aleklett.
Forwarded by
Gus
Leach.
Equivalently,
one cubic
foot of natural gas produces 1031 British Thermal Units (BTUs).
Gasoline = 125,000BTU/gallon *19 gallons per barrel of oil =
5,250,000 BTU
|
----- Original Message -----
From: w.d.reynolds@att.net
To: bill payne
Sent:
Thursday, October 26, 2006 6:55 AM
Subject: Re: peak oil(3)
Bill:
I received a Ph.D. in Chemistry (UCLA '65) but I have worked as a nuclear
engineer, chemical engineer, cancer researcher, environmental engineer and now
solar-hydrogen advocate. I see that I am 4 years older than you i.e. from your
MN high school graduating class. I did not know I had submitted anything to
Peak Oil ? When was it published ?
Warren(ret.)
-------------- Original message from "bill payne" : --------------
Warren
I suspect that you now may be famous [or infamous] for what
you wrote in your email - now that it is posted at Peak Oil.
some questions.
1 what do you have phd in?
2 where did you get it?
3
what year?
One of my phd students in computer science is john
sobolewski. He left for china on October 20.
We talked a lot about the energy future while salmon fishing
in early september.
Secondary oil, I''ve read, is not low sulphur. Valero, I've
read, is one of the few refineries which can process "heavy sour" oil.
this is senior citizen me.
http://www.prosefights.org/shattuck/shattuck.htm
bill
----- Original Message -----
From: w.d.reynolds@att.net
To: bill payne
Sent:
Wednesday, October 25, 2006 9:27 AM
Subject: Re: peak oil(2)
Hello Bill: Thank you for the reference. I had missed this
one. It just reinforces what I have said.
I forgot to mention that it is the primary oil that is
peaking and not the secondary. The secondary oil costs a lot more to extract
from the ground and process ($120-200/bbl)
The U.S. has vast oil shale deposits equivalent to 2 Saudi
fields but the extraction and processing is still 20 years away, if at all.
Five Gov't small oil shale land sections were leased to 5 different oil
companies to experiment with oil shale extraction. Some are trying in-situ
extraction others are mining the mineral and then high temperature or solvent
oil extraction. Canada has certainly been successful in their tar sands
extraction and it is a growing market for them but again it is not large.
The new oil discovery in the Gulf of Mexico is just a drop
in the bucket compared to the Saudi fields. As I mentioned before, the oil
"crash" will occur before any of this secondary or even oil shale is available
in sufficient quantities to help.
Warren
-------------- Original message from "bill payne" :
--------------
http://www.peakoil.com/article20076.html
:)
----- Original Message -----
From: w.d.reynolds@att.net
To: bpayne37@comcast.net
Sent: Tuesday, October 24, 2006 3:04 PM
Subject: Your comments
Mr. Payne: Thank you for your interest in my Part II: The
Next Step-Conversion to the Solar Hydrogen Economy. You may have seen my
article on www.beyondfossilfuel.com. I had added a reference footnote
to that article but it was edited out by the reviewers at Energy Pulse.net. You
may want to see my other article at
www.hydrogennow.org
about the air pollution caused deaths in the U.S. and Europe.
In my article I am not proposing anything. I am just
reporting on the national interest, Government action and progress on the
Solar-Hydrogen Economy. There is far more available hydrogen (as water) as
there are fossil fuels. Currently, our addiction oil is supporting our way of
life. As you are aware, there are 5 oil-producing nations whose oil production
has peaked and is on the downside of the curve. The U.S. oil production peaked
in 1970 and has been declining ever since. In 1999, then CEO Dick
Cheney(Haliburton Corp) said that: "oil demand will increase 2% per year while
oil production will decline 3% per year". This was confirmed by geologists,
scientists and oil CEOs. Hence, there will be a 50 million bbl/day shortfall in
oil to meet the demand in 2010-12. This oil "crash" should generate a
macroeconomic upset reminscent of the Great Depression. Think for a moment what
would happe n if gasoline/oil stopped tomorrow and was no longer available.
There would be massive layoffs, very little food in the market, bank closures,
and riots in the streets. No, we had better convert to the Solar-Hydrogen
Economy before this happens.
The conversion of coal into fossil fuels via the
Fischer-Tropsch process is too energy intensive. This would require heating the
catalyst via coal combustion or natural gas which would generate more GHG and
push up the prices of those fuels while depleting those resources even faster.
No, the Solar-Hydrogen economy is the answer as it is non-polluting.
Again, thank you for your comment.
Dr. Warren Reynolds, Consultant
w.d.reynolds@att.net |
Iraqi oil is close to the surface and easy to extract,
making it all the more profitable. James Paul, executive director of the Global
Policy Forum, points out that
oil
companies "can produce a barrel of Iraqi oil for less than $1.50 and possibly
as little as $1, including all exploration, oilfield development and production
costs." Contrast that with other areas where oil is considered cheap to
produce at $5 per barrel or the North Sea, where production costs are $12-16
per barrel.
China, now the world's second-biggest consumer of oil,
behind the United States, aims to stockpile 100 million barrels, enough to
cover a month's worth of national consumption, similar to the US emergency
reserve.
Hawthorne said nuclear's attractiveness is rising as the oil
and gas industry looks for solutions to its growing needs for inexpensive and
reliable electricity, as well as
massive amounts of steam for oilsands development.
Dr Donald Burnell, a fellow computer science professor at washington
state university, explained to payne that ethanol took more BTUs to produce
than it produces in the early 1970s.
Oil, according to most geologists, represents the
condensed energy of many, many years’ worth of sunshine…raising up
many, many thousands of acres of grains and leaves, which were subsequently
packed down into the ground and stored for millions more years. But in the space of only a couple of lifetimes, Americans have
used up these millions of years worth of natural inventory of saved-up solar
energy. What’s left is getting more and more expensive, because there are
more and more people who want it…with more and more money to buy it.
Mexico's main oil source may be drying up
Falling production at the Cantarell field could be worse than
Mexican officials admit.
Tom, Ray jump into debate over over ethanol
evaluation
TOM &RAY MAGLIOZZI
Click & Clak Talk
Cars
DEAR TOM AND RAY: I've always wondered about ethanol. Seems too
good to be true - you just plant some corn, harvest it and in no time you have
fuel for your car. So I Googled ethanol on the Web. There are tons of Web sites
extolling the great benefits of corn-based ethanol as a fuel. Then I found one,
healthandenergy.com, that made the opposite case. You guys
went to MIT. Am I missing something? The report on this site says that 131,000
BTUs are needed to make one gallon of ethanol, but each gallon of ethanol only
produces 77,000 BTUs. That means we're losing 54,000 BTUs for every gallon we
produce. Just wondered if you guys have an opinion. Best regards - Charlie
TOM: Yes. But, as usual, it's not an informed one.
RAY: This issue is not only very controversial, it's also
ripe for all kinds of obfuscation from various interested parties.
TOM: Right. I mean, if guys with degrees in chemical
engineering can't agree on the answer, how the heck are we supposed to know
who's telling the truth?
RAY: Wait a minute. You do have a degree in chemical
engineering.
TOM: Yeah. But to understand this issue, I'd have to actually
read all those papers! That would cut into my nap time.
RAY: All right. Well, from what we can tell, the basic issue
is this: When you calculate how much energy it takes to produce a gallon of
ethanol, you have to make certain decisions. Everybody agrees that you need to
include the energy needed to plant the corn, water it, harvest it and convert
the starch to alcohol. But, for instance, do you include the energy needed to
manufacture the tractors that plow the fields? Scientists disagree about that.
TOM: They also disagree about the other side of the equation.
The guy whose study you refer to, David Pimentel of Cornell University, is very
well regarded, and has been studying this issue for years. He adds up his
calculation of the amount of energy needed to grow the corn and then subtracts
the amount of energy you get from a gallon of ethanol, and gets a negative
number.
RAY: But there are other credible researchers, like David
Lorenz and David Morris of the Institute for Local Self-Reliance, who take
Pimentel's research and say yes, BUT, a gallon of ethanol isn't the only thing
you get from that corn you grow. You also get stuff like corn oil and gluten
feed. So, some of the energy that goes into growing the corn has to be assigned
to those other corn by-products, too. When they do the numbers, the energy
ratio of ethanol comes out positive.
TOM: So, the answer is not clear. What everybody does agree
on is that ethanol made from plants with more cellulose, like switchgrass or
sugar cane, will produce more ethanol per acre than corn will. And that will
improve the case for ethanol - no matter what your starting point.
RAY: People also agree that using ethanol that we grow at
home reduces the amount of foreign oil we need, which may eventually mean we
don't have to spend billions to send our kids to guard oil fields overseas. So,
there's a national security issue here in addition to a scientific one.
TOM: And then there are other questions. Like, how much of
this ethanol blitz is a big, wet, government-subsidized kiss to big
agribusiness and corn growers? Is it ethical to use food to fuel our cars when
people are going hungry? And if I'm using the stuff in my Grand Cherokee, will
the price of a corn dog go through the roof?
RAY: We don't have the answers, Charlie. But we're eager to
see some more light shed on the subject. And we're eager to move beyond corn to
more efficient plant-based ethanol and see what kind of scale that could
achieve. Meanwhile, pass the butter, will ya?
Got a question about cars? Write to click and clack Talk
cars, Albuquerque Journal, P.O. Drawer .J, Albuquerque, NM 87103. Or e-mail
them by visiting the car Talk Web site at
www.cartalk.com.
Albuquerque Journal Saturday July 1, 2006
|
----- Original Message -----
From: bill payne
To:
Justin Gillis
Cc: saleem_shahzad2002@yahoo.com ; art morales ; larry spohn
; george@ure.net ; mufsons@washpost.com ; schneiderg@washpost.com ;
duttj@washpost.com
Sent: Sunday, July 02, 2006 6:45 PM
Subject:
washingtonpost.com bs
Justin
Who ever forwarded my message I
think failed to included the link suggesing you read deAnander's explaintion of
formation of energy on this planet.
DeAnander
Let's understand something very basic here: Entropy is Not
Mocked.
This game is all
about energy density, and the only way to achieve high energy density is time
plus pressure (and usually heat). What coal and petroleum really are, is biotic
feedstock plus aeons of time plus aeons of pressure, producing a high energy
density which we then make even higher by refining processes which require more
heat/pressure cleverly applied.
I plan to respond
to your comments below and post.
Here's some recent information regarding ethanol.
But allowing a net positive energy output of 30,000
British thermal units (Btu) per gallon, it would still take four gallons of
ethanol from corn to equal one gallon of gasoline. The United States has 73
million acres of corn cropland. At 350 gallons per acre, the entire U.S. corn
crop would make 25.5 billion gallons, equivalent to about 6.3 billion gallons
of gasoline. The United States consumes 170 billion gallons of gasoline and
diesel fuel annually.
Thus the entire U.S. corn crop would supply only 3.7 percent of
our auto and truck transport demands. Using the entire 300 million acres of
U.S. cropland for corn-based ethanol production would meet about 15 percent of
the demand.
Your energy article [where is posted?]
brought new meaning to me to
Do not fear the enemy, for your enemy can only
take your life. It is far better that you fear the media, for they will steal
your HONOR. That awful power, the public opinion of a nation, is created in
America by a horde of ignorant, self-complacent simpletons who failed at
ditching and shoemaking and fetched up in journalism on their way to the
poorhouse. Mark Twain
Msm [mainstream media] appear to
me to largely populated with bs artists as opposed to thinkers.
Think of deficient education as the basis for
these problems whether
lawyer or
liberal arts educated bureaucrat, media person
regards
http://mywebpages.comcast.net/bpayne37/index.htm#margolis
----- Original Message -----
From: Justin Gillis
To: bill
Cc: duttj@washpost.com ; schneiderg@washpost.com ; mufsons@washpost.com
Sent: Thursday, June 22, 2006 10:54 PM Subject: Re: Message via
washingtonpost.com
I just followed your link, but I have no idea what purported
misconceptions you might be referring to. If you mean the energy-balance
question regarding ethanol, your blogger is simply repeating claims published
by David Pimentel of Cornell and Ted Patzek of UC-Berkeley. They are,
respectively, an entomologist and a petroleum geologist, and are thus not
technical experts in the field. Their claims, though repeated often on NPR and
on some Green Web sites, have been thoroughly debunked by people who ARE
technical experts in the field. The correct information, which you can find in
the recent, definitive Dan Kammen piece in Science, is that corn ethanol
provides modest gains in energy balance (somewhere between 30 and 60 percent)
and more significant gains in displacing imported petroleum (the fuels used to
produce corn ethanol are domestic natural gas and coal).
I ducked this whole energy-balance subject on purpose,
because the debate basically goes away when the starting feedstock is a waste
material from another process. The incremental cost to produce that material is
zero; the only fossil-fuel cost incurred in producing biomass ethanol would be
harvesting and transporting the feedstock. That's not zero, of course, but the
estimates are that a biomass ethanol industry would yield a net energy balance
of several hundred to several thousand percent of the fossil fuels used to
create the ethanol.
Cheers.
Justin Gillis
The Washington Post
-----bill wrote: -----
To: gillisj@washpost.com From: bill Date: 06/22/2006 04:50PM
Subject: Message via washingtonpost.com
bill sent the following message:
be sure to read deanander to clear up your misconceptions on
energy formation.
http://www.prosefights.org/oil/oil.htm
regards
http://mywebpages.comcast.net/bpayne37/index.htm#margolis |
But allowing a net positive energy output of 30,000 British thermal
units (Btu) per gallon, it would still take four gallons of ethanol from corn
to equal one gallon of gasoline. The United States has 73 million acres of corn
cropland. At 350 gallons per acre, the entire U.S. corn crop would make 25.5
billion gallons, equivalent to about 6.3 billion gallons of gasoline. The
United States consumes 170 billion gallons of gasoline and diesel fuel
annually.
Thus the entire U.S. corn crop would supply only 3.7 percent of
our auto and truck transport demands. Using the entire 300 million acres of
U.S. cropland for corn-based ethanol production would meet about 15 percent of
the demand.
At the 1978 peak of conventional production, Alberta pumped out 1.6
million barrels of oil a day from 12,151 wells averaging 132 barrels each.
By 2004, the number of oil wells nearly tripled to 30,958, but
conventional
output was down to 600,000 barrels a day or an average 19
barrels per well.
Those who question whether ethanol is as "green" as advertised say
that supporters
ignore or downplay the large quantities of natural gas used to
produce ethanol, as well as the diesel fuel used to transport it from plants to
markets. Moreover, growing corn requires heavy use of nitrogen fertilizers,
made from natural gas, and requires extensive use of farm machinery, which
burns fuel refined from crude oil.
The one that I'm watching most closely is the apparent
shortage/blip in the distribution system of heavy oil.
Lots of readers
are reporting in that certain kinds of motor oils are not in the plentiful
supply they have been in the past.
And that's not all.
It turns out
that it takes more energy to make ethanol than it could ever
generate.
Kunstler, 57, has emerged as the most dire and articulate proponent
of a school of thought known as Peak Oil, the idea that the world has or will
soon reach maximum oil production, after which oil becomes scarcer and more
expensive to extract. There's nothing theoretical about it. Like global
warming, Peak Oil—a bell-curve description of oil reserves first outlined
by geophysicist M. King Hubbert—is widely accepted by serious people.
Discoveries of new oil topped out in 1964. The world consumes about 27 billion
barrels of oil a year. At current pace, the world's estimated 1 trillion
barrels of oil reserves will be gone within a few decades,
but as a practical matter, extracting every drop from sources
like Canadian oil shale would be impossible, since the effort would consume
more energy than it produces.
History channel segment on pleasure boating points out that 1/2 to
2/3 of boat volume was devoted to coal storage and steam engine prior to
oil.
Pleasure Boats. Airs on Wednesday, May 10 at 12:00pm ET ...
Read-up.
DeAnander: Energy density
"We need to deal with the long-term problems of technologies
that may get us out of this trap," Rice said on ABC's "This Week." "But I
can tell you that if anything has surprised me as secretary of state, it is the
degree to which the kind of search for hydrocarbons is distorting international
politics. That means that the quicker we get about the business of reducing our
reliance on oil, the better we're going to be."
History channels
reports April 26, 2006 that most energy is used to heat and cool
buildings.
"Oil has soaked deeply into the politics and power structure
of the United States," the author writes. "More than a fuel, oil became a
heritage and also the basis of a lifestyle."
The Green Revolution
In the 1950s and 1960s,
agriculture underwent a drastic transformation commonly referred to as the
Green Revolution. The Green Revolution resulted in the industrialization of
agriculture. Part of the advance resulted from new hybrid food plants, leading
to more productive food crops. Between 1950 and 1984, as the Green Revolution
transformed agriculture around the globe, world grain production increased by
250%.4 That is a tremendous increase in the amount of food energy available for
human consumption. This additional energy did not come from an increase in
incipient sunlight, nor did it result from introducing agriculture to new
vistas of land. The energy for the Green Revolution was provided by fossil
fuels in the form of fertilizers (natural gas), pesticides (oil), and
hydrocarbon fueled irrigation.
Fuel Economy Impact Analysis of RFG
The
Environmental Protection Agency (EPA) evaluated fuel economy impacts of
reformulated gasoline (RFG) using a number of reliable studies (including the
$40 million joint research program by the auto and oil industries) involving
approximately 4000 individual observations.
Ethanol 76,100 5.71%
111,836 1.9%
ETBE 96,900 12.8% 111,811 1.9%
MTBE 93,500 11.0% 111,745 2.0%
* Assumes base gasoline has energy content of 114,000 btu/gallon
Other than oxygenates, there are other minor differences between RFG and
conventional gasoline that also impact the energy content of the fuel. These
impacts are different in summer and winter.
Summer RFGs contain approximately 1.0% less energy than summer
conventional gasolines. This is expected to reduce fuel economy on average by
1.0% during the summer. For example, a car that gets 25 miles per gallon with
conventional gasoline may get 24.75 miles per gallon with RFG.
Winter RFGs contain approximately 3.0% less energy per gallon
than winter conventional gasolines. This is expected to reduce fuel economy on
average by 3.0% during the winter. For example, a car that gets 25 miles per
gallon with conventional gasoline may get 24.25 miles per gallon with RFG.
A March 1995 study conducted in Wisconsin confirmed a 2.8%
reduction in average fuel economy with winter RFG. This study used eight
private vehicles of various makes, designs, and ages, four different retail
gasolines (including conventional and reformulated gasolines), and 12,800 miles
of driving on city streets.
Albuquerque Ch 7 reports gas shortages. Thursday April 20, 2006
"Can (global consumers) afford to keep increasing demand by
almost 2 million barrels a day each year? Is it Saudi Arabia's role to meet
that demand?" asked al-Husseini, who retired in 2004 after working 32 years in
the kingdom's oil sector. "You're leading yourself to having to find an
alternative source of energy very quickly."
DeAnander
Let's understand something very basic here:
Entropy is Not Mocked.
This game is all about energy density, and the only way to
achieve high energy density is time plus pressure (and usually heat). What coal and
petroleum really are, is biotic feedstock plus aeons of time plus aeons of
pressure, producing a high energy density which we then make even higher by
refining processes which require more heat/pressure cleverly applied.
"Thirty years from now, oil will be little used as a source of
energy," Kenneth Deffeyes told a crowd at the University of Alaska Fairbanks
recently.
"Our grandchildren will say, 'you burned it? All those
beautiful molecules? You burned it?'"
Improving seeds through experimentation is what people have been up
to since the beginning of agriculture, but the term "Green Revolution" was
coined in the 1960s to highlight a particularly striking breakthrough. In test
plots in northwest Mexico, improved varieties of wheat dramatically increased
yields. Much of the reason why these "modern varieties" produced more than
traditional varieties was that they were more responsive to controlled
irrigation and to
petrochemical fertilizers, allowing for much more efficient
conversion of industrial inputs into food. With a big boost from the
International Agricultural Research Centers created by the Rockefeller and Ford
Foundations, the "miracle" seeds quickly spread to Asia, and soon new strains
of rice and corn were developed as well.
By the 1970s, the term
"revolution" was well deserved, for the new seeds-accompanied by chemical
fertilizers, pesticides, and, for the most part, irrigation-had replaced the
traditional farming practices of millions of Third World farmers. By the 1990s,
almost 75 percent of Asian rice areas were sown with these new varieties. The
same was true for almost half of the wheat planted in Africa and more than half
of that in Latin America and Asia, and about 70 percent of the world's corn as
well. Overall, it was estimated that 40 percent of all farmers in the Third
World were using Green Revolution seeds, with the greatest use found in Asia,
followed by Latin America.
http://www.foodfirst.org/media/opeds/2000/4-greenrev.html
The
media statement
The high cost of extracting oil from oil sands is no longer a
major impediment to production, now that oil prices are at $60 a barrel or
more and most experts expect them to remain relatively high for years.
There were only a dozen oil sands projects in Alberta a decade ago. Today there
are about 60, and 55 more have been announced for the future.
may be very misleading for the reason that if requirement for
extraction of oil from oil sands demands use of only oil sand energy, then,
because of EROEI, oil extraction from oil sands would not work.
But if you are selling stakes to investors, then there may be a
lot of money to be made from oil sand project.
Oil is the lifeblood of modern civilization, and despite
countless attempts to render it less important no suitable energy substitute is
anywhere close to being found.
We
will seriously misjudge our situation if we only focus on gross production Peak
Oil and neglect the worsening quality of oil and worsening energy net return on
energy invested (ENROI).
2.
EROEI: Energy Returned On Energy Invested.
That is
to say, the amount of energy we get from a production process must be
substantially greater than the energy consumed by that process. Otherwise, each
cycle of production will theoretically reduce the energy available for
consumption. For example: an EROEI of 1 means that for every unit of energy
consumed in the production process, we get 1 unit of energy to use for the next
cycle of energy production. But an EROEI of 1:1 doesn't make any sense. There
isn't any energy left over to distribute to the consumer. So we need a net gain
of energy from each production cycle as follows….
An EROEI of 1:1 means that for every unit of energy input We
produce 1 unit of energy, hence the ratio is 1:1. The energy we get must all go
back into the production cycle to produce more energy.
An EROEI of 1:2 means that for every unit of energy input We
produce 2 units of energy. One unit goes back into the production of more
energy, and we have a net gain of 1 unit of energy that can be distributed for
consumption.
An EROEI of 1:4 means that for every unit of energy input We
produce 4 units of energy. One unit goes back into the production of more
energy, and we have a net gain of 3 units of energy that can be distributed for
consumption.
Remember. If the EROEI of any energy resource is less than 1, then
doing that activity no longer adds to our energy stockpile.
Furthermore, not all energy thus produced is equal. The energy
content of a gallon of diesel fuel is (roughly) 139,000 Btu, the energy derived
from a gallon of gasoline is (roughly) 124,000 Btu, and the energy in a gallon
of ethanol is (roughly) 80,000 Btu. Can you guess which fuel will give us the
best vehicle mileage? If we can get 50,000 Btu from 10 pounds of dry wood,
104,000 Btu from 10 pounds of high quality coal, or 139,000 Btu from 1 gallon
of heating oil, which fuel would the consumer prefer to use for heat?
Unfortunately, the average EROEI of world oil production has been
declining. I read somewhere that before 1950 the EROEI for oil was more than
100:1. By the 1970s it had dropped to 30:1, and by 2005 the average EROEI on
new production had fallen to 10:1. As we go for oil in increasingly difficult
environments (deep under the ocean, open pit mining, etc.) the EROEI will
decline further. We have to face the facts. Just because there is oil in the
ground does not mean it is practical to extract. Every well has its cost in
money AND energy. At some point the EROEI for every well will fall to less than
1, making oil from that well an impractical resource for energy. Although we
will probably continue to work that well, the oil thus produced will have a
greater value as a raw material for manufactured products than as a fuel. It
won't go into your gas tank.
The concept of EROEI is usually ignored by politicians, disputed
by alternative energy advocates, and distrusted by "Peak Oil" critics. It's not
even discussed on the DOE WEB site. But eventually, it will become a topic of
great importance. And credibility. Right now, there are no standard definitions
of how to determine EROEI values, or what should – or should not – be
included in an EROEI calculation. I believe we need a three-tier model:
Basic EROEI modeling – which confines itself to energy
production versus energy consumption as an energy production process.
Energy Supply Chain EROEI models – which calculate an
estimate of energy used to research, develop, explore, produce, transport,
distribute, and consume energy through the entire supply chain.
Life Cycle EROI Models – should include co-generation,
ancillary product production, waste, and the impact on ecology. Or put another
way, everything discussed in this essay (including labor).
If SAIC's Hirsch
is wrong and peak oil is today, then perhaps SAIC should go the way of
Arthur Andersen?
Robert Hirsch's below statement on time of peak oil may be
incorrect.
Copy of
Congressman Roscoe Bartlett's February 8 Special Order speech about peak
oil.
Fifty years ago this week, on March 8, 1956, at a meeting of the
American Petroleum Institute in San Antonio, Texas, M. King Hubbert, in the
preprinted version of his prepared remarks, had the following statement,
"According
to the best currently available information, the production of petroleum and
natural gas on a world scale will probably pass its climax within the order of
a half century (i.e., by 2006), while for both the United States and for Texas,
the peaks of production may be expected to occur with the next 10 or 15 years
(i.e., 1966 to 1971)." As more and more people are learning, Lower 48 oil
production, as predicted by Dr. Hubbert, peaked in 1970, and it has fallen
fairly steadily since 1970. Fifty years ago this week, on March 8, 1956, at a
meeting of the American Petroleum Institute in San Antonio, Texas, M. King
Hubbert, in the preprinted version of his prepared remarks, had the following
statement, "According to the best currently available information, the
production of petroleum and natural gas on a world scale will probably pass its
climax within the order of a half century (i.e., by 2006), while for both the
United States and for Texas, the peaks of production may be expected to occur
with the next 10 or 15 years (i.e., 1966 to 1971)." As more and more people are
learning, Lower 48 oil production, as predicted by Dr. Hubbert, peaked in 1970,
and it has fallen fairly steadily since 1970.
A
single barrel contains the equivalent energy of twelve men working for a whole
year: We owe our wealth to the abundant supply of cheap energy.
Ten
calories are needed for every calorie produced on a US farm: We literally eat
oil.
Ropa naftowa
Yes, it stands for Oil. One word in
English and two words in Polish.
John S.
Bush
said he envisioned a future in which a plug-in hybrid car could drive 40 miles
on a lithium-ion battery, then stop at a filling station for ethanol, a
fuel usually made from corn. The trip wouldn't require a drop of oil, he
said.
Corn requires 29% more fossil energy than the ethanol
produced
Switch grass requires 45% more fossil energy than the ethanol
produced
Wood biomass requires 57% more fossil energy than the fuel
produced
PEAKING OF
WORLD OIL PRODUCTION: IMPACTS, MITIGATION, & RISK
There is a whole set of intelligent responses to America's oil
predicament that we ought to be talking about now.
These range from restoring the nation's passenger rail system,
to supporting local agriculture in earnest, to rebuilding local networks of
retail trade and economic interdependency for the time ahead when the Big Boxes
die of oil starvation, to setting legal limits on new suburban sprawl.
These are the kind of things that will help us through the Long Emergency of
the post-cheap-oil world we are entering. The temptations of paranoia will only
make things worse.
In the January 2004 Current Events on this web site,
I predicted that world oil production would peak on
Thanksgiving Day, November 24, 2005. In hindsight, that prediction was in error
by three weeks. An update using the 2005 data shows that we passed the peak on
December 16, 2005.
The Times reports that solar energy today supplies one percent of
US electricity; the hope is to double that to 2 percent by the year 2025. By
2025, we're going to be back in the Stone Age.
http://www.energybulletin.net/11695.html The Rainwater
prophecy.
http://lifeaftertheoilcrash.net/ Life after the oil
crash.
Ethanol is another case in point. Some research has shown a
negative
EROEI for ethanol. Newer research from Oregon shows a
slightly positive return. Ethanol is, at best, a slightly beneficial temporary
alternative - not a substitute.
Claims that cars can run on vegetable
oil never take into account the amount of energy necessary to generate the
vegetable oil (farming, vegetable transport, extraction, etc.).
Most of
the other questions in this list can be tied up into this one question:
does the invention defy the Laws of Thermodynamics? If the
answer is yes, then something is wrong.
What are the Laws of Thermodynamics?
1st Law—Energy can be changed from one form to
another, but it cannot be created or destroyed. The total amount of energy in
the universe remains constant, merely changing from one form to another.
2nd Law—In all energy exchanges, if no energy enters or leaves the
system, the potential energy of the state will always be less than that of the
initial state. This is also known as
the law of entropy.
3rd Law—It is impossible to cool a body to absolute zero by any
finite process. This is actually more of a postulate than a law. In any case,
it has little application to our discussion and is presented here merely for
thoroughness.
The bad news is that, unlike conventional
sources of oil, oil derived from these oil sands is extremely financially and
energetically intensive to extract.
Whereas conventional oil has enjoyed a rate of "energy return
on energy invested" (EROEI) of about 30 to 1, the oil sands rate of return
hovers around 1.5 to 1.
What's wrong with this picture from
Massive oil profits may not last?
While driving between Lubbock and Coleman, TX at Christmas in 2005
and back to Albuquerque, we observed many of these pumps.
The weight is at the bottom when the pump is at the
top.
The falling weight helps lift both the oil and pump rod
up.
The falling pump rod helps lift the weight to the top.
Above picture both the weight and pump rod fall at the same
time.
Pumps were observed going both clockwise and counter-clockwise.
The electric motors running these pumps are suprisingly
small.
Pump owner gets an electric bill each month. Hopefully the owner
gets more for the oil produced than he has to pay for electricity.
EROEI is an important concept. [Let's see if the Athabaska
tar sands extraction has an EROEI greater than 1]
When
pheasant hunting in Kansas 2005, some of the pump motors
were diesel.
One of the most unusual pump motors seen was run on LP gas.
The pump motor was of the old-fashion designs where the rpm is
controlled by valve opening. So it makes
the sound POP,
pop, pop ,pop,...POP, pop, pop ...
In about 1999, when
writing windows device drivers in Pullman, WA, some of
these old engines were on display and running at the
Kootenai county
fair in Coer D'Alene, ID.
Countdown to 100$ oil (21bis) - long term vs short term
worries
1.) The world is running out of cheap oil. Yes, there will always
be energy, but it will be harder and more expensive to get. American oil
production peaked out decades ago. Britain’s North Sea production is
declining. No one knows how much oil the Saudis have, but probably less than
they say they have. The entire world’s oil production is expected to peak
out in a year or two. Cutbacks in supply couldn’t come at a worse time;
more people want more oil than ever before. The Chinese bought two million new
cars in 2004. They’re buying nearly twice as many each year. Currently,
the average Chinese consumes less than 1/10th as much energy as the average
American. Wait until they consume just half as much!
Gasoline prices in the United States jumped last week - the
biggest increase in 11 weeks. Three dollars for gasoline now seems certain. In
a few years, it will seem cheap.
Business Outlook, Albuqueruque Journal Thursday January 5,
2006
Whether you believe in peak oil, we have to remember that the
domestic US production has peaked (Texas did in the 1970's) and the North Sea
is now in decline. At present run rates, it's a certainty that the Kings and
Queens (industry slang for the whopping big fields in Saudi) will go into
decline over the next few years if they haven't already.
When that
happens, there is a horrific policy choice for the administration: We can
either suffer through massive demand destruction (a global economic depression
is an example of demand destruction, as is a World War where civilian
populations would be attacked in the US), or there's an increase in production.
That's why Iran is key, drilling in the Alaska Wilderness is critical, and why oil and gas
prices will likely be going up from here for several months.
Peak oil is a
concept that is well understood by most governments. The end of cheap oil means
the collapse not only of the U.S. economy but also the global
economy.
We must wake up to what kind of people we are dealing with.
This government is not only more criminal and corrupt than we imagine—it
is more criminal and illicit than we can imagine. Bush and company make the
mafia look like boy scouts. Let me try to convey some idea of what I mean. The
collection of thugs and criminals now running the country are the greatest and
most dangerous organized crime syndicate in the world. And they possess the
greatest arsenal of weapons, many of them nuclear, that the world has ever
seen. They have an unparalleled propensity for violence. They are not who you
think they are; and they are not doing what you think they are doing.
The world oil allocation system is now so fragile that any
disturbance in one producing region can send damaging shock waves around the
planet. There is no more "swing producer." The US squeaked through the huge
loss of oil production capacity this fall by taking oil from our own strategic
petroleum reserves and from Europe's. These actions kept oil prices in the high
fifty-dollar-range through the holidays, giving Americans a false sense of
festive security. Those withdrawals are now over. Global demand for oil is
still increasing. The strategic reserves will now have to be refilled (they're
called strategic reserves for a reason). This will start oil prices moving
upward again -- they already have moved above $61 as of this morning.
Russian oil and gas companies are stepping up production to meet
the rising demand and fill a growing energy gap created by
falling flows from mature North Sea fields.
As China's economy has boomed, it has become the world's
second-biggest oil consumer behind the United States.
After more than two decades in which the economy grew at an annual
average of 9 percent, China's consumption of oil has far outstripped domestic
production and the country is now heavily dependent on
imports.
According to official statistics, crude oil consumption rose to
309 million metric tons in 2004 from 90 million metric tons in 1985, an annual
average increase of 6.7 percent.
However, domestic oil output only
increased at an annual average of 1.8 percent over the same period.
To cover the shortfall, China imported almost 42 percent of its oil
in 2004, mostly from the Middle East. Between 1985 and 2004, annual natural gas
consumption almost tripled, from 13 billion cubic meters to 31 billion cubic
meters.
China's demand for natural gas is currently supplied from
domestic fields, but imports are expected to grow sharply over the
decade
Over the summer,
gas was selling for about 5
cents a gallon. Now it's about 65 cents, and at the end of the price
increases, gasoline will cost about the same in Iraq as it does in other
countries in the Persian Gulf, about $1 per gallon. The prices of kerosene,
diesel and cooking gas have seen similar or steeper increases. Diesel costs
about 38 cents per gallon.
Though that may seem cheap to Americans,
wages in Iraq are far below those in the United States. Employees in government
ministries, for example, earn about $130 a month on average, putting them among
the top earners in Iraq. Millions of other Iraqis live in poverty, relying on
food handouts from the government. About a fourth of all Iraqi households
subsist on less than $1 a day.
"For our fruit producers the diesel
shortage is heading for a crisis.
We are working with highly perishable
products that need to get from the farm to the market, to the factory, to the
harbour. Now
we are waiting for diesel. We cannot transport workers; we are unable to use
tractors and diesel-driven vehicles in the orchards."
We continue to emphasize the importance of
visibility in litigation.
If no one is watching, the legal system
will do anything it wants, irrespective of the laws, rules and
constitution!
We're linked today at
Peak Oil
Settlement time yet?
Putting aside the question of would it increase, there is also the
question of could it? Over the past 17 years, a whopping 46.5 billion barrels
have been extracted. Do the Saudis have enough oil left in the ground to once
again play swing supplier? The experts say yes.
But Matthew
R. Simmons, a veteran oil-industry analyst, is doubtful, as he explains in his
new book, Twilight in the Desert. When crude-oil prices topped $40 a
barrel—that was August 20, 2004—all the experts were sure it
couldn’t stay that high.
“Matt Simmons is literally betting that oil prices, in constant 2005
dollars, will be at or above $200 per barrel in 2010.”
And from a chart in “Beyond Oil” by Deffeyes “My estimate of the
peak date of the smooth curve [referencing the chart] is November 24, 2005,
Thanksgiving Day. The uncertainty is roughly one month of either side of
Thanksgiving. Of course, production in individual years bounces up and down a
little so it is not at all clear which calendar year goes into the record
book…”
Given all that, "$100 oil is not that far off" -- in 2 to 30
months without a major terrorist act, and 6 to 12 months with a major terrorist
attack, said Kerr, who also edits Global Resources Trader, a service of
MarketWatch.
It was
an incredible revelation last week that the second largest oil field in the
world is exhausted and past its peak output. Yet that is what the Kuwait Oil
Company revealed about its Burgan field.
Ethanol requres more energy to produce that it yields.
Deffeyes has a good section in Beyond Oil about ethanol political
nonsense.
Ford Motor Co., the nation's second biggest automaker, said
Friday it is teaming up with an energy company to increase the number of
ethanol fuel stations next year and said it plans a consumer awareness campaign
about the benefits of ethanol.
And then, compounding peoples' misunderstanding of the whole
situation,
you have talking heads (as often as not, they are economists)
saying really dumb things like, "But in dollar terms, the oil industry is only
4% of the U.S. economy." To which I say, "Try running the other 96% of the
economy without it."
Americans find different ways to cope with gasoline prices that
are skyrocketing without relief.
Last Update: 9:15 PM ET Oct. 3, 2005
According to
the latest data from the federal Minerals Management Service,
a
whopping 1.39 million barrels of oil per day, or 93%, of the Gulf of Mexico's
oil production remains shut from the storms.
That's about 24% of
the nation's domestic oil production. And while the numbers point to a drop
from the 98% shut down on Friday, recovery is progressing at a painfully slow
pace.
There are typically around 130 rigs working in the Gulf. Today,
there are 23.
The federal Minerals Management Service reported Thursday that
about 99 percent of oil production in the Gulf, or about 1.5
million daily barrels, remains shut down, while about 80 percent of natural-gas
production, or nearly 8 billion cubic feet of gas a day, remains shut.
Msd ignition page update.
Oil prices eased on Wednesday over concerns that demand for
crude would be hit by the continued shutdown of refineries. US crude fell 27
cents to $64.80 a barrel by 06:444 GMT after losing 75 cents on Tuesday.
Ken Sill of Credit Suisse First Boston said:
“Early reports indicate numerous rigs are missing,
destroyed or have suffered serious damage and several companies have yet to
report. Rita may set an all-time record.”
We heard by email from Texas
that
Chevron platform Typhoon capsized in Rita.
Emailer also stated that the reason is price of oil [$65 CNBC at
about 12:40 Tuesday September 27, 2005 13:3] is so low is that many
Texas/Lousiana refineries are out of commission and not buying oil.
CNBC shows on TV at gas is $1.17!
“Oh, and unleaded gas prices? To the moon, Alice! Maybe
not this week. But if they don’t get those refineries back online soon, it
will happen soon.
Little sympathy from Canada on that one though - they’re
already paying the equivalent of roughly $6 a gallon.
W may have done the number on the travel industry.
"We can all pitch in by being better conservers of energy.
People just need to recognize that these storms have caused disruption and that
if they're able to maybe not drive on a trip that's not essential, that would
be helpful," he said. "If it makes sense for the citizen out there to curtail
nonessential travel, it darned sure makes sense for federal employees."
Despite the ban on unnecessary trips, Bush announced he was
flying back to the hurricane-affected region on Tuesday, traveling to Beaumont
and Port Arthur, Texas -- two of the harder-hit areas. He just concluded on
Sunday a three-day hurricane trip -- his sixth since Katrina hit a month ago --
that took him to Colorado, two cities in Texas and Louisiana. During that trip,
the president had no direct contact with areas or people affected by the
storm, instead spending the entire weekend getting briefings on the storm from
military and other federal officials.
Santa Fe told citizens to economize on water. Citizens did ...
and Santa Fe had to raise water rates to fund its water personnel.
The same apparently happened in Seattle.
Being green may
not pay?
Dr W is very secretive.
Dr W worked on oil recovery projects for Sandia.
Dr W said he attended many oil conferences then. He said that
there was always and economic of oil session.
At these session, he said, that they always talked about the end
of cheap oil and when it was to occur.
Dr W said what they didn't take into consideration was China and
India.
Boone Pickens Warns of Petroleum Production Peak
"Let me tell you some facts the way I see it," he began. "Global oil (production) is 84 million barrels (a day). I don't
believe you can get it any more than 84 million barrels. I don't care what
(Saudi Crown Prince) Abdullah, (Russian Premier Vladimir) Putin or anybody else
says about oil reserves or production. I think they are on decline in the
biggest oil fields in the world today and I know what's it like once you turn
the corner and start declining, it's a tread mill that you just can't keep up
with.
LONDON (Reuters) -
As oil strides from one record high to another, predictions of
$100 a barrel crude no longer look far-fetched. After prices shot to a record
$68 a barrel on Thursday, analysts are increasingly inclined to accept that the
stretched world market is in the throes of a "super spike."
"Don't
worry," Byron told his audience yesterday, "we're not running out of oil. We'll
never run out of oil. The very first oil fields ever discovered, in Titusville,
Pennsylania, still give some oil. They pump a barrel or two every day. But the
trouble is, the world uses 80 million barrels every day. And they aren't making
more of the stuff. Oil production in America peaked out in the 1970s, just like
Hubbert said it would.
Now, oil geologists say worldwide production will probably peak
out around 2010. After that, it's all downhill."
Dr Deffeyes estimates the peak is Thanksgiving
2005.
Downhill for oil production means uphill for oil prices. It means
that the easy-going world of cheap, abundant energy is finished.
"You know, when I buy an apple at the local supermarket in
Pittsburgh, that apple may have been grown in Chile. There, they planted the
tree with machines that ran on oil. They fertilized with oil-based fertilizers.
They collected the apples with oil-burning machines...and drove them to market
in trucks...and loaded them on ships...and took them all the way through the
Panama Canal and up to Baltimore, where they were unloaded and put on trucks
and delivered to my local store."
That whole economy is based on oil - affordable oil. But with oil
production in decline...and oil consumption rising worldwide...oil will soon be
much less affordable than it is now. And that will change the whole economy.
"We already know how it will affect the world. We saw what
happened in the 1970s. Oil was trading for $11 a barrel. Then, the Shah of Iran
was overthrown. And it was his buddies who were running oil production. In a
matter of a few weeks, the engineers and managers you need to get oil out of
the ground and to market had fled the country. Oil production in Iran collapsed
from nearly 6 million barrels a day to less than 2 million barrels a day. That
4 million barrels a day difference sent oil prices up to $50 a barrel and
caused the worst recession in America since the Great Depression. And that was
back when the world was using a lot less oil than it is today."
Aug.
10 (Bloomberg) --
Crude-oil and gasoline futures surged to all-time highs as
refinery shutdowns and rising demand cut motor fuel supplies for the sixth
straight week.
Because of supply bottlenecks, airlines
were forced to fly in extra fuel from other markets and scramble for deliveries
by truck. But these are expensive, short-term fixes that do not address what
airline executives consider to be the underlying problem: with passenger
traffic rising above pre-9/11 levels,
the nation's aviation business is slowly outgrowing the
infrastructure that fuels it.
We thought a . meant that the decimal digit to the right was
measured in tenths?
Maybe we're on to a reason the below signs don't work very
well?
Monday August 8, 2000, Menaul and Pennsylvania, Albuquerque,
NM.
Above LED displays are recently installed all over
Albuquerque.
Oil prices hit a record high $64 Monday after warnings of
militant attacks in the world's biggest oil exporter Saudi Arabia and on
worries about refinery outages in the United States.
Kicks' manager said that prices are changed from her office with a
device that looks like a TV controller.
Manager reported that they have
lots of trouble with the signs.
Sunday August 7, 2005, Paseo del Norte and Browning.
THE late French president Charles de Gaulle once made the acute
observation that China was "a big country inhabited by many Chinese".
Some time later, former US president George Bush Sr offered the
following about oil pipelines in Alaska: "The caribou love it. They rub against
it and they have their babies. There are more caribou in Alaska than you can
shake a stick at."
The two unrelated statements are united by their stupidity and
the fact they say a lot about the current state of play in the politics of
oil.
India’s
demand for gas is enormous and the country barely produces half of its
registered demand, said Aiyar, adding that current production of natural
gas was 85 million cubic metres per day according to the Petroleum Ministry.
International oil companies have advertising campaigns warning
that the world is running out of oil and calling on the public to help the
industry do something about it.
British Petroleum runs an ad on TV stating that bp stands
for beyond petroleum.
Even the contentious issue of high oil prices has been smoothly
swept under the rug.
Over the last two years, crude oil prices have more than
doubled, and closed yesterday at a record $62.31, up 1.5 percent on the New
York Mercantile Exchange.
Today, with
oil prices hitting records and petroleum producers stretched to
the limit to meet greater demand from not just the United States but from
China, India and other developing countries as well, oil producers worry that
hurricanes are as much a risk to a global shortfall in supplies as pipelines
blowing up in Iraq or oil workers going on strike in Venezuela.
Nationally, sales of premium gasoline fell 5.6 percent this
year through May, the latest data available, according to the Energy
Information Administration, while overall regular gas sales were up 4.7
percent.
China's domestic retail sales of petroleum and related products
jumped 37 percent in the first half and second-quarter gross domestic product
climbed 9.5 percent, more than expected, the National Bureau of Statistics
said. A U.S. government report later today may show U.S. crude supplies
fell for a third straight week last week, according to a Bloomberg survey.
First came Holstein, then Mad Dog, and soon,
Thunder Horse. Atlantis will join them next year. The four
giant oil fields, operated by BP PLC (NYSE:BP - News) and located under
thousands of feet of water off the coast of Louisiana, are just beginning to
pump their first barrels. At their peak rates later in the decade, they'll
produce some 500,000 bbl. per day, an amount akin to floating a small Middle
Eastern country such as Syria or Yemen into the Gulf of Mexico.
"Add them together, and it's a massive step change," says David
Eyton, BP's vice-president for deepwater in the Gulf. "The investment we're
making will more than offset declines we're seeing in Alaska and the
Continental Shelf."
"Hu will say that there is no reason why the Chinese should
stay on their bicycles so that Americans and Britons can drive larger SUVs
(sport utility vehicles)," Andrew Oswald, economics professor at Warwick
University in Britain, said.
New York Mercantile Exchange data show 6,900 options contracts
outstanding that allow buyers to purchase oil for December delivery at $80 a
barrel, compared with an average of 77 contracts in January. The
probability that oil will top $75 a barrel when the December crude contract
expires is 21 percent, according to Adam Sieminski and Michael Lewis,
strategists at Deutsche Bank AG, up from 5 percent at the start of the
year.
Oil prices could rocket to $100 within six months, plunging the
world into an unprecedented fuel crisis, controversial
Texan oil
analyst Matt Simmons has warned.
"We are going to smash through" that record, said Tom Kloza, chief
analyst for the Oil Price Information Service. "There's plenty of momentum to
take us to $2.50.
We'll end up somewhere between $2.50 and $3 in the second half
of the year. That's a pretty high peak."
Demand for oil in China rose by 900,000 b/d - up nearly 16% and one
of the largest rates of growth in the world.
The information-packed report highlights how much faster demand for
diesel fuel is growing around the world compared with gasoline.
China's demand for distillates soared by 23.4%, 37% more than
gasoline.
Finally, the
growth in the world's oil and gas reserves stalled last year, expanding at
the slowest pace in 15 years.
Just as the 19th century was shaped by coal and the 20th
century by oil, people in the energy industry say, this century will belong to
natural gas.
Until a few years ago, such projects -- called "oil sands" or "tar
sands" -- sputtered at the fringes of the oil industry.
But since technological breakthroughs brought down costs and
oil prices have soared, companies have been investing heavily here. Oil-sands
production is now profitable when a barrel of oil sells in the low $20s,
analysts said -- far below the recent $50 range.
Based on research drawn from hundreds of technical papers spanning
four decades, “Twilight in the Desert” argues that the kingdom's
aging oil fields won't be able to sustain the higher levels of production
needed to satisfy the world's growing thirst for oil.
Rick Farris, a custom cutter based in Edson, said he just got a
$2,000 fuel bill for a single stop he made in Oklahoma where he put gas in the
empty tanks of his four combines and four trucks.
Once harvest gets going in full swing, Farris will put between 500
and 600 gallons of fuel daily into combines he runs 12 hours a day, he said.
And that does not include the fuel for trucks that haul the harvested grain to
elevators.
Fuel costs this harvest season are running a third more than a
year ago, Farris said.
But new forces in world energy markets, unrestrained
consumption epitomized by the boom in sport utility vehicles and the depletion
of oil have subjected the United States to buffeting by forces outside its
control.
Could the petroleum joyride -- cheap, abundant oil that has sent
the global economy whizzing along with the pedal to the metal and the AC
blasting for decades -- be coming to an end? Some observers of the oil industry
think so.
They predict that this year, maybe next -- almost certainly by
the end of the decade -- the world's oil production, having grown exuberantly
for more than a century, will peak and begin to decline.
And then it really will be all downhill. The price of oil will
increase drastically. Major oil-consuming countries will experience crippling
inflation, unemployment and economic instability. Princeton University
geologist Kenneth S. Deffeyes predicts "a permanent state of oil shortage."
Fact 5: High oil prices threaten the economic viability of some
commercial sectors, such as airlines and motor vehicles. US airlines United and
Delta recently won court approval to dump their pension obligations in a
bankruptcy proceeding. A need to bolster pension costs, underfunded by $5.3
billion, over the next three years would worsen Delta's cash flow problems.
Delta faces $3.1 billion in pension costs between 2006 and 2008. A bill under
consideration by the US Senate would stretch out employee pension payments over
25 years, and could ease the airline's liabilities.
The Saddam Hussein factor
In January 1990, Saudi Arabia and
Kuwait had 24% and 9% of OPEC's total production. Iraq and Iran had 13% and 12%
respectively. Iraq was involved at this time in a territorial dispute with
Kuwait. Negotiations between the two Arab countries failed to produce any
solution.
In a meeting on July 25, 1990, between Iraqi president Saddam
Hussein and US ambassador April Glaspie, Saddam was assured that the US would
not become involved in the Arab-to-Arab political dispute. It was a major
factor in Iraq's decision to reincorporate Kuwait by force. A week later, on
August 2, 1990, Iraq invaded and occupied Kuwait, giving it control of 22% of
OPEC production.
Fact 1: Oil-related transactions involving the same material
quantity involve greater cash flow, with each barrel of oil generating $50
instead of $25. The United States now consumes about 20 million barrels of oil
each day, about 25% of world consumption of 84 million barrels. At $50 a
barrel, the aggregate oil bill for the US comes to $1 billion a day, $365
billion a year, about 3% of 2004 US gross domestic product (GDP). About 60% of
US consumption is imported at a cost of $600 million a day, or $219 billion a
year.
Oil and gas import is the single largest component in the US
trade deficit, not imports from Japan or China.
The $3.6 billion, 1760-km-pipeline, called the Baku-Tblisi-Ceyhan
project, first planned in 1994, will carry crude oil from fields in the Caspian
Sea off Baku to Tbilisi in Georgia, and on to the Mediterranean terminal at
Ceyhan in Turkey.
The
fields are estimated to hold 4.6 billion barrels of oil and 3.5 trillion cubic
feet of natural gas.
History may judge it as one of the capital moves of the 21st
century's New Great Game: May 25, the day high-quality Caspian light crude
started flowing through the Caucasus toward the Mediterranean in Turkey.
The Baku-Tbilisi-Ceyhan pipeline (BTC) - conceived by the US as
the ultimate Western escape route from dependence on oil from the Persian Gulf
- is finally in business.
The proponents of the peak oil theory - predicting that future
world oil production will soon reach a peak and then rapidly decline - have
been telling the world since 2001 about the dangers ahead.
It was first thought that the peak would come in 2010, then it
was revised to 2008, now it seems the peak might come even sooner.
Apart from increased transportation, heating and utility
costs, higher oil prices are eventually reflected in virtually every finished
product, as well as food and commodities in general. Unlike previous, spikes in
the price of oil, there is evidence that global oil production is peaking and
the flow will soon be in permanent decline.
Prince Abdullah and his delegation responded to
Bush's public calls in recent weeks for the Saudis to increase
crude oil production to help lower gasoline prices, by explaining their
long-term strategy to invest $50 billion over five years in a plan that would
eventually increase the kingdom's oil production capacity by close to 50
percent.
Saturday, April 23, 2005 (New York):
Oil prices have shot above $55 a barrel amid technically
triggered buying and supply worries sparked by refinery snags and a terrorist
attack in Saudi Arabia.
Can’t They Just Pump More Oil? No. Contrary to popular belief,
OPEC and the other oil producing countries are not a bunch of evil,
money-grubbing rich guys that are purposely holding the world hostage to high
oil prices while they swim in pools of petroleum.
Pumping oil
out of the ground is not as simple as turning on a faucet. After a certain
point, an oil field hits its peak production and then the amount of oil
production steadily declines. There are ways to increase the production, but
most cause the decline to sharpen. Slow, steady extraction is the best way to
get most of the oil.
As
mounting evidence suggests that the era of cheap, abundant oil is rapidly
coming to an end, many experts are now forecasting that global production could
reach its all-time peak before the end of this decade, or soon after. The clear
implication is that ever-diminishing supplies will lead to rising prices -- not
only for oil itself, but for everything that depends on it. 'Peak Oil' will
therefore be a critical turning point for the modern world, challenging our
economic and social systems as never before.
Try Thanksgiving 2005.
Dr Deffeyes
http://www.amazon.com/exec/obidos/ASIN/0809029561/102-9990338-8761768
gives November 24, 2005 as the date global oil demand exceeds global oil
production. Now we are faced with the global oil-production peak. The best
estimates of when this will actually happen have been somewhere between now and
2010. In 2004, however, after demand from burgeoning China and India shot up,
and revelations that Shell Oil wildly misstated its reserves, and Saudi Arabia
proved incapable of goosing up its production despite promises to do so, the
most knowledgeable experts revised their predictions and now concur that 2005
is apt to be the year of all-time global peak production.
The Asians remain shocked and in disbelief. Just when Japan, China,
Taiwan and Hong Kong had accumulated enough dollars to buy oil to keep them
warm for many winters, it’s all over. In broad daylight, the Americans and
OPEC cheered as the price of oil popped up from $30 a barrel to over $50 a
barrel. Indeed, this jump in the price of oil increases the
world’s daily oil consumption bill of 84 million barrels a
day to $4.2 billion, from $2.5 billion (or $1.5 Trillion a year from $900
billion). The world now has to shell out an additional $600 billion a year of
“lucky bucks” to the oil producing countries just to stay in motion.
That’s quite a tribute to pay!
T
Boone Pickens predicts that the oil demand will soon exceed 87 million
barrels per day. More than production.
Mark at CNBC asked Pickens why the oil price spike now?
Was it,
a.) speculators and a bubble
b.) too much liquidity in
the financial system or
c.) supply and demand?
Pickens, who of course, has been on the show many times
before with quite accurate predictions of oil prices, could hardly restrain
himself from laughing as he pointed out that now demand was 87 million bpd and
supply was 83 and dropping due to declining production from old fields.
Of course, none ot the nitwits at CNBC asked the obvious followup
question about the decline in production.
Pickens, Bell and other local and national energy industry
observers estimate current worldwide demand to be almost equal to worldwide
production of about 82 million barrels a day. Oil consumption is expected to
increase by several millions barrels over the next few years, led by rapid
growth in countries such as China, India and other -- mostly developing --
nations.
Pickens said world demand likely will reach 83 million barrels
by December and 84 million by sometime in 2005.
While demand is expected to increase, however, Pickens and
others also say world production has or will soon peak, meaning the world's
producers will be unable to recover more than the current 82 million barrels a
day.
"China is now No. 2 in imports, up from No. 3, after passing
Japan," Boone Pickens, who oversees more than US$1 billion in energy-related
investments at his Dallas hedge fund firm, said in an interview in New York
yesterday. If the Chinese build the highways that are planned, "that in itself
would be a billion barrels of oil," he said.
China's government said last month it plans to build 85,000km
of expressways in the next 30 years, more than tripling the size of the road
network to sustain economic growth and promote development of rural regions.
"
Demand is still rising," especially in China, said Chuck
Hackett, a broker and analyst at Access Futures & Options Trading, in
Woodlake, California. "It's going to keep using more oil" as long as the
population keeps growing, he said.
Global demand is set to rise this year by 1.73 million barrels
to 83.78 million barrels a day, OPEC said in its February statement. China's
fourth-quarter demand was 290,000 barrels a day more than previous estimates,
it said.
The Asians remain shocked and in disbelief. Just when Japan,
China, Taiwan and Hong Kong had accumulated enough dollars to buy oil to keep
them warm for many winters, it’s all over. In broad daylight, the
Americans and OPEC cheered as the price of oil popped up from $30 a barrel to
over $50 a barrel. Indeed, this jump in the price of oil increases the world’s daily oil consumption bill of 84 million
barrels a day to $4.2 billion, from $2.5 billion (or $1.5 Trillion a year from
$900 billion). The world now has to shell out an additional $600 billion a
year of “lucky bucks” to the oil producing countries just to stay in
motion. That’s quite a tribute to pay!
"The world is producing 82 million barrels of oil a day. I think
that's all we'll every have," he told NPR's Steve Inskeep. "So you have a
supply situation that isn't getting any better and the demand situation that is
going up."
"I think you're peaking now," he said, referring to the belief that
oil production, whether in an individual field or globally, gradually rises as
more wells and improved technology extract larger quantities of oil.
Eventually, depending on geology and the extent of the field(s), the maximum
amount of oil that can be extracted at a given rate peaks and then the field
begins to produce less and less oil as it is "depleted". This is known as "peak
oil" and it is now occurring worldwide, with the only exception possibly being
the oil-rich Middle East, and even here, experts are starting to worry. (See
Chip Haynes' Ghawar Is Dying and Sixty Days One Summer).
Inskeep also interviews Professor Kenneth Deffeyes, who predicts --
with obvious tongue-in-cheek -- world oil production will begin decline on
America's Thanksgiving Day, 2005. He also talks to
Paul Roberts, the author of the "The End of Oil" and Phil
Flynn a Chicago commodity trader.
http://www.oil.com/
Sandia, Lawrence Livermore and Los Alamos national
labs.
We are no closer to the more difficult project of atomic
fusion, by the way, than we were in the 1970s.
Billions were squandered.
Visibility related links.
http://www.nytimes.com/2005/03/25/opinion/25deffeyes.html
http://pup.princeton.edu/chapters/s7121.html
http://www.agora-inc.com/reports/OST/day810/
http://www.agora-inc.com/reports/OST/WOSTF315/
We
may have an interesting 12 months ahead.
Dr Deffeyes
http://www.amazon.com/exec/obidos/ASIN/0809029561/102-9990338-8761768
gives November 24, 2005 as the date global oil demand exceeds global oil
production.
Now we are faced with the global oil-production peak. The best
estimates of when this will actually happen have been somewhere between now and
2010. In 2004, however, after demand from burgeoning China and India shot up,
and revelations that Shell Oil wildly misstated its reserves, and Saudi Arabia
proved incapable of goosing up its production despite promises to do so,
the most knowledgeable experts revised their predictions and
now concur that 2005 is apt to be the year of all-time global peak
production.
And Deffeyes states in his book, scanned at Borders, that by 2019
global oil production will be down to 90% of its peak in about 2005-6.
http://www.hubbertpeak.com/
Morales phoned in date corrections from 2004 to
2005.
Morales and Payne discussed Internet and our legal
project. Without Internet and personal computer technology our legal project
would fail. But maybe it might succeed?
Dig this.
Another path for technology can be seen in the proliferation of new
services and networks on the Web that are being built, largely from the ground
up, by ordinary people. The information and images - the content, in media
industry jargon - is supplied not by company-paid professionals but by
communities of people who find the data useful. Those seeking a business in the
phenomenon call this information user-generated content. Photos, event
listings, blogs and wikis - Web sites that allow users to make their own
entries - on every imaginable subject are all part of the trend.
There is mounting evidence that this grass-roots media hybrid is
moving into the mainstream. Ross Mayfield, chief executive of Socialtext,
reports rising demand for his start-up's expertise in using wikis among large
corporations like Nokia and Kodak. Last week, Yahoo announced that it had
bought Flickr.com, a Web site where people store and share photos. Jerry Yang,
a Yahoo founder, said candidly,
"We are venturing boldly, and somewhat blindly, into this world
of user-generated content."
Grey rabbit, on the other hand, gets about 30 mpg in
town and about 35 mpg going at about 55-65 mpg [and about 30 mpg going at 75-80
mpg!] and is used lots.
Grey rabbit has been driven somewhere between 350,00o
to 550,000 miles.
VWs last forever and fail frequently.
And the replacement part all have a lifetime guarantee!!!
VW odometers only last about 100 k
miles.
Friday April 15, 2005 afternoon. Before.
Saturday April 16, 2005 morning.
After.
Grey rabbit has a 1989 VW fox
engine with 150 psi compression in all cylinders measured at 6,020 feet
altitude and 2 inch techtonics tuning
exhaust.
Fahrvernugen+!
Art at Discount Auto pointed out
If
you can't fix your VW yourself, then you can't afford to own
one.
Right on! |
Why
Fords and
VW's?
Parts still available!!!
Morales and Payne are involved in projects other than
our legal project and defeating credit card fraud.
Thursday April 25, 2005 pm. Before.
Friday April 16, 2005 am.
After.
 |
White ford is a 1972 ford F250 4x4 with Dana 60 rear
axle, competition rv cam, msd ignition.
White ford guzzled gas for the past 33 years for
about 246,000 miles at about 10-12 mpg.
But, hey, its paid for.
Payne made the comment
White ford will last as long as the gas
supply.
No joke!
White ford is now used infrequently.
But
hopefully white ford is being used more now!
