Archive for the ‘Peak Oil’ Category

Arctic has 90bn barrels of crude

Monday, August 4th, 2008

– I suppose this is a case of good news / bad news.

– The good news is there is oil to be pumped and used and the world sorely needs more oil.

– The bad news is that we can now get at this oil because of global warming.

– The bad news is that it isn’t clear who ‘owns’ this oil as I wrote about here in September of 2007 and this may lead to political and military confrontations.

– The bad news is that finding more oil means that we can continue to dodge the energy bullet and continue to burn oil and put more CO2 into the atmosphere.

– Perspective is always good. Here’s some:

– As of 2005, we were using 30 billion barrels of oil per year. At that rate, these new arctic supplies will last three years.

– Is this discovery significant? Yes, as of 2005, only about 4 billion barrels of new oil per year were being discovered.

– This information is from here:

– – – – – – – – – – – – – – – – –

The Arctic holds as much as 90bn barrels of undiscovered oil and has as much undiscovered gas as all the reserves known to exist in Russia, US government scientists have said in the first governmental assessment of the region’s resources.

The report is likely to add impetus to the race among polar nations, such as Russia, the US, Denmark, Norway and Canada, for control of the region.

The US Geological Survey believes the Arctic holds 13 per cent of the world’s undiscovered oil, while 1,669,000bn cubic feet of natural gas is equivalent to 30 per cent of the world’s undiscovered gas reserves.

“The extensive Arctic continental shelves may constitute the geographically largest unexplored prospective area for petroleum remaining on earth,” the USGS said.

Last August Russia planted its flag on the seabed 4km under the North Pole raising fears of a rush to grab the Arctic’s mineral resources, particularly its oil and gas deposits. Denmark in May called a summit of the five Arctic powers in Ilulissat, Greenland, to try to restrain competition and reiterate the countries’ joint commitment to the United Nation’s Law of the Sea Convention that governs territorial waters.

Commercial interest in exploiting the Arctic has also increased, with Royal Dutch Shell, the Anglo-Dutch energy group, pushing to help Russia develop gas from the Yamal region, and Total winning the right to do so at Russia’s giant Shtokman gas field.

In the US, companies are pushing ever further into the Arctic regions of Alaska, while Denmark has attracted a number of large companies interested in exploring for oil and gas off the coast of Greenland.


Rising Oil Prices Swell Profits at Exxon and Shell

Thursday, July 31st, 2008

HOUSTON — Exxon Mobil, the world’s largest publicly traded oil company, reported on Thursday its best quarterly profit in history, but investors sold off shares in morning trading after expecting even higher earnings because of soaring oil and natural gas prices.

Record earnings for the world’s largest publicly traded oil company have become almost as predictable as the surge of gasoline prices at the pump in recent years, and for the second quarter income rose 14 percent, to $11.68 billion.

It was the highest quarterly profit ever for any American company, as Exxon made nearly $90,000 a minute.

Such profits have made Exxon Mobil a target of politicians in recent years, propelling calls for windfall profits taxes to finance research and development for renewable fuels to replace oil.

The principal reason for the company’s banquet of riches is rising fuel prices. Crude oil prices in the second quarter averaged more than $124 a barrel, 91 percent higher than the same quarter in 2007, according to Oppenheimer & Company. Natural gas prices averaged $10.80 per thousand cubic feet, up 43 percent from the quarter a year ago.

But while high energy prices brought Exxon $10 billion in earnings from selling oil in the quarter, up about $4.1 billion or nearly 70 percent, not everything in its earnings report heartened investors. The company reported that its oil production decreased 8 percent from the second quarter of 2007, largely because of an expropriation of Exxon assets by the Venezuelan government and labor strife in Nigeria.

The company spent $7 billion, or nearly 40 percent more than the same quarter last year, to find and produce oil from new fields.


– This article is from the NY Times and they insist that folks have an ID and a PW in order to read their stuff. You can get these for free just by signing up. However, a friend of mine suggests the website :arrow: as an alternative to having to do these annoying sign ups. Check it out. Thx Bruce S. for the tip.

Letter to a young idealist

Sunday, July 20th, 2008


A few more thoughts along the same lines I talked about previously.

All of humanity’s history has been a series of incremental advances along multiple paths; business, social organization, military, agriculture, technological, etc. In all of this, the thought has primarily been to advance, empower and grow.

Now, for the first time in humanity’s history, we have filled the planet and have begun to hit various unyielding limits; water, food, oil, pollution, as well as limits having to do with how much impact we can have on the biosphere without causing huge shifts in the demographics of various species and even causing their extinctions.

It is clear, if humanity wants to continue to live indefinitely on this planet, that we are going to have to shift from a growth and advance strategy in all we do to one predicated on establishing a steady-state and sustainable balance with the biosphere around us.

We cannot use renewable resources faster than they can regenerate. We cannot occupy more of the planet’s surface than is consistent with allowing the rest of the planet’s biology to exist and flourish. These both imply that our population has to come down to some sustainable number and be held there. We have to come up with ways to govern ourselves that are consistent with establishing and maintaining these essential balances. Nation against nation, system against system is not compatible with long term survival. The ultimate goal and purpose of government in an enlightened world should be to secure all of our futures (we and all the rest of the planet’s biology) and maintain the balance.

We could, if we cut our population to sustainable levels and learned to live within a sustainable footprint on this planet, exist here for tens of thousands of years and maintain a decent quality of life for all those who are alive at any specific point in time. We do not have to give up comfort or technology – we just have to dial our impact on the planet back to sustainable levels and stay with in those levels.

Anything that the Gates Foundation or any other forward looking organization works on that does not include long term goals like these is likely in the big picture to just be a shuffling of our problems from one place to the other rather than a real indefinite-term planet-wide solution to how our species is going to solve the problem of learning to live here without fouling our nest for ourselves and all the other species that depend on this planet’s biosphere.

Upsetting the oil drum

Saturday, June 21st, 2008

The big push from the hard right is that the solution to our gasoline problem is unlimited drilling in the United States. This is roughly like saying the solution to losing your 100,000 dollar a year job is to fish harder for coins under your couch.

The global consumption of oil is roughly 86.8 million barrels per day. The meme the right is pushing, as always, is ANWR and unrestricted coastal drilling. The best estimates of unrestricted drilling in the US put about 25 billion barrels of oil, which sounds like a great deal, until you realize that this is less than a year of global oil demand. The reality is that the United States is the most drilled in area of the world, having had the petroleum economy more, longer, and harder, than any other place in the world. If there were easy oil to be had, we would have it.

The cost of that effort is not making things that we can sell for oil that is much easier to get at. The cry of ANWR for ever is the Republican Party telling everyone that they have no faith in the American worker, the American entrepreneur, or the free market system. It is them telling everyone that Americans cannot make things the rest of the world wants to buy. Import substitution does not in general work, because it is almost always more expensive than trading, and focusing on what can be done better inside the national unit, rather than trying to do less worse at what it does worst.

Let me repeat that. ANWR forever is a giant middle finger at everyone who works in America at any job that exports.


The organisation of denial: Conservative think tanks and environmental scepticism

Saturday, June 21st, 2008

This worrisome research article has appeared in a peer reviewed journal. It’s not telling us anything that we didn’t already know, but it does catalogue the situation and help us steer clear of the hyperbole.

Environmental scepticism denies the seriousness of environmental problems, and self-professed ’sceptics’ claim to be unbiased analysts combating ‘junk science’. This study quantitatively analyses 141 English-language environmentally sceptical books published between 1972 and 2005. We find that over 92 per cent of these books, most published in the US since 1992, are linked to conservative think tanks (CTTs). Further, we analyse CTTs involved with environmental issues and find that 90 per cent of them espouse environmental scepticism. We conclude that scepticism is a tactic of an elite-driven counter-movement designed to combat environmentalism, and that the successful use of this tactic has contributed to the weakening of US commitment to environmental protection.


Texans head across the border to save on gasoline

Saturday, June 21st, 2008

CIUDAD JUÁREZ, Mexico – With gasoline prices hovering near $4 per gallon, Texans along the U.S.-Mexico border have discovered a cheaper alternative: Mexico.

Mexican service stations all along the border report brisk sales in recent weeks as fuel prices in Texas continue to climb. Even Ciudad Juárez has seen a notable increase in customers from the United States, despite escalating drug violence that includes gunbattles in the streets and several decapitations.

Victor Gonzalez was among those risking their lives for cheaper gasoline Monday. Mr. Gonzalez crossed the border from El Paso in his silver Ford F150 truck with Chip, his cranky Chihuahua, riding next to him.

“I was running on empty – almost,” said Mr. Gonzalez, a cattleman who normally pays about $90 to fill up his truck’s tank on the Texas side of the border.

In Mexico, gasoline is about a dollar cheaper a gallon because the government subsidizes it.

Mexico’s state-owned petroleum company, known as Pemex, is the sole supplier of gasoline for the country’s gas stations and buys nearly half of it from the U.S. because of a lack of Mexican refineries.


The U.S., Oil and Iraq

Thursday, June 19th, 2008

– One of the news sources I read daily is the Daily Brief from the Council on Foreign Relations. They put together an excellent summary of the significant foreign events of the day and, for the most part, I recommend them.

– However, today, the Daily Brief had a collection of stories about Iraq and Oil that I found to be a bit surreal. Most of us who understand the implications of Peak Oil, understand that one of the major reasons why the U.S. is in Iraq is to secure oil for its future. Modern industrialized nations absolutely depend on adequate supplies of oil – if they want to continue to be modern industrialized nations.

– There were several things that struck me as disingenuous. One was the following statement about the decision making of the Iraqi government as it considers letting foreign oil companies into the country again:

“Offers by the Western companies-Exxon Mobil, Shell, Total, BP, Chevron, and a handful of smaller firms-reportedly prevailed over bids from companies in Russia, China, and India, and a new deal is expected to be announced on June 30.”

– Did anyone seriously expect that the U.S. would allow Russia, China or India to gain effective control over the vast supplies of Iraqi oil in today’s world? Does anyone really imagine that the U.S. is really leaving such decisions to the current Iraqi government?

– As a further irony, here in the U.S., the Bush administration and McCain are both flooding the media with calls to resume oil exploration/drilling (read ANWR). This, in spite of the fact that it is widely agreed that it will take years for any oil produced from such drilling to hit the market and that when it does, it will only make a very small contribution to solving a very large deficit.

– So, what do I think is going on?

– Well, the stories about the decision making regarding which companies are going to get to process the Iraqi oil are simple PR. In a world where many of the players (read nations) are essentially democratic, such PR is effective because democracy’s weakest point is that its decisions are largely made by those in the middle of the norm curve. And those folks rarely analyze things in more than a cursory manner. So PR spun to them is effective in blunting the responses of those nations by confusing their voters who are the ones who ultimately motivate their political decision makers.

– As for the current push to resume oil exploration in the U.S., I think it is driven by the fact that oil companies here in the U.S., which have an inordinate affect on the decision making processes in the U.S. government and the mostly business driven Republican Party, see significant profits in the exploration itself. The fact that after the work is done and we’ve trashed ANWR and built a huge amount of oil infrastructure, we won’t have much to show for it in terms of oil delivered to the market is irrelevant. Between now and then, the companies involved will show many profitable quarters as the work is done and that’s the bottom line in such decisions.

– I was, and am, a bit disappointed that the Council of Foreign Relations chooses to report these things without a deeper analysis of why the decisions are being made but then I suppose they see their mandate as simply describing the important decisions as the public largely perceives them rather than rendering a deeper analysis of why they are being made. In this, I think they either underestimate their audience or they’ve become a mouthpiece for those who create the spin to obscure the substance.

Saudis pledge to hit record oil production as unrest spreads

Tuesday, June 17th, 2008

– Temporary measures. Temporary measures. So they open the taps and more oil flows. So what?

– Demand will keep rising so long as we do not convert to other forms of energy. The Saudis will try to help us now in the short term, but, in the long run, so long as supplies are finite and demand continues to rise, the conclusion will always be the same. It’ll be ground-hog day again and again. It’s just a matter of ‘when’.

= = =

Saudi Arabia will raise oil production to record levels within weeks in an attempt to avert an escalation of social and political unrest around the world. King Abdullah signalled the commitment to the UN secretary general Ban Ki-moon at the weekend after the impact of skyrocketing oil prices on food sparked protests and riots from Spain to South Korea.

By next month the Saudis are expected to be pumping an extra half-a-million barrels of oil a day, bringing total Saudi production to 9.7 million barrels a day, their highest ever level.


Ominous warning oil price rise just starting

Wednesday, June 11th, 2008

LONDON – The chief executive of the world’s largest energy company has issued the most dire warning yet about the soaring the price of oil, predicting that it will hit US$250 ($332) per barrel in the foreseeable future.

The forecast from Alexey Miller, the head of the Kremlin-owned gas giant Gazprom, would herald even more expensive petrol and send shockwaves through the economy.

His comments were the most stark to be expressed by an industry executive and come just days after the oil price registered its largest-ever single-day spike, hitting US$139.12 per barrel last week amid fears that the world’s faltering supply will be unable to keep up with demand.


“Perfect Storm” in Food Prices Caused by Many Factors

Thursday, June 5th, 2008

Part one of a special series that explores the local faces of the world’s worst food crisis in decades.

In Australia a struggling farmer watches another harvest shrivel under the country’s worst drought on record.

Another new member of the Chinese middle-class finally has enough cash to buy his first steak.

And a U.S. agricultural executive decides to grow corn instead of wheat to take advantage of the growing demand for biofuels.

Alone, none of these events would have been responsible for today’s troubled stock markets, rampant civil unrest, and increasing famine and malnourishment for the world’s poor. (See a video on the world food crisis.)

Together, they’ve caused the world’s worst food crisis in a generation.

“A convergence of factors has led to what is sort of a perfect storm for food prices,” Erik Thorbecke, an economist at Cornell University in Ithaca, New York, told National Geographic News.

“I can’t think of a time we’ve had this large an increase.”

According to data from the International Monetary Fund, average global food prices have jumped nearly 50 percent since the end of 2006.