The news that Saudi Arabia is planning to employ 200 drilling rigs next year (up from 20 back in 2005) suggests that there is a recognition that future reserves may not measure up to the planned volumes needed. Plans now include exploration of the shale deposits in the country, looking primarily for natural gas. There are estimates that this resource could run as high as 600 trillion cubic ft. Current plans are to drill seven exploratory wells in the Red Sea, off Tabuk.
Figure 1. Location of Tabuk in the Kingdom of Saudi Arabia (WikiMedia )
This is across the country from the major oil fields currently in use, which lie more along the Persian Gulf coast, centered perhaps around Damman. It therefore suggests that they are looking for extensions of the Israeli and Egyptian fields into northern KSA. (Minister Al-Naimi said that they still “had to find them.”)
In discussing the venture Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi also noted that, choosing to look for – and presumably finding - natural gas, would take the pressure off the country to maintain its oil reserve.
Al-Naimi said that prospects for global production of shale gas and oil – including in China, Ukraine, Poland and Saudi Arabia – were so promising that the Kingdom might not need to continue with its decades-long policy of maintaining an oil-output cushion for use in global supply disruptions. “It is not a question whether Saudi Arabia has spare (oil) capacity. It is a question of whether we need to spend billions maintaining it at all,” Al-Naimi said.
Now over the years KSA has lowered the volume it has projected that it can produce from 12.5 mbd to 12 mbd, and this is, perhaps, an early indication that they intend (whether by policy or natural reserve availability) to lower that maximum further.
This has to be of at least a little concern, since the number of places with significant flexibility to increase production are getting closer to zero every year. The gains in global production that are foreseen by OPEC in the next year, for example come in dribs and drabs.
OPEC notes that in May the 8,915 producing wells in North Dakota collectively produced over 800 kbd. (The Department of Mineral Resources reports 821 kbd in June, over the 811 kbd in May with well numbers of 8,932 in May and 9,071 in June. Production per well is thus running an average of 90 barrels a day, with a well cost of $9 million.) There are 187 rigs plus/minus working and this is still enough to keep production rising at a rate of 1.3% per month. One of the maps I find interesting is this, from the Department.
Figure 2. Location and production values for wells in North Dakota (Department of Mineral Resources)
It is this illustration of the relatively heavy drilling already in the “sweet spots” and the poorer performance in the less well drilled regions that gives me concern for the longer term prospects for the formations. And as an aside note that crude from Alaska is declining, July output was 498 kbd against the year-to-date average of 542 kbd. The EIA is noting that, since there aren’t any major oil pipelines running into California from the East, that there is an increase in rail traffic to make up the difference. The EIA is suggesting that the traffic is already at a level of around 100 kbd.
And this in happening in the most promising region to increase production (though it includes Canada, for which OPEC projects a growth over the year of around 40 kbd, which is set against Mexican production, for which OPEC sees a decline of around 60 kbd).
Malaysia is projected to increase production by 50 kbd, from the Gumusut field. This is a Deepwater project, and one can get some estimate of the shape of the field from the well pattern. The production gain is viewed by OPEC as likely being the highest in the region.
Figure 3. Planned Well pattern for the GUMUSUT KAKAP project in Malaysia (Rawingbadi)
In Latin America Colombia is expected to increase production by 80 kbd, though the country is having some issues with pipe damage from terrorism. There have been more than 30 attacks this year. OPEC also looks for an increase in Brazilian production of 10 kbd over the year, this gain coming after some 14 months of decline, which drop hopefully will be recovered before the end of the year.
Oman will grow production by 20 kbd, but it is in Sudan and Southern Sudan that OPEC anticipates the greatest growth, of 90 kbd. However the two countries are not the best of friends, with oil from Southern Sudan having to ship by pipeline to Sudan, for shipment onwards. At present oil, at an average rate of 75 kbd is continuing to flow up the pipe, but Sudan continues to threaten to halt shipments, leading Southern Sudan, in turn, to plan to shut-in the wells. The OPEC projection seems to be best defined therefore as “iffy.”
OPEC expect Russia to increase production by 80 kbd in 2013, yet there is some caution in that estimate, with other numbers suggesting that Russia is reaching a modern peak in production. Kazakhstan is projected to increase production by 50 kbd (coming from the startup of Kashagan, now expected at the end of September). The 100 kbd production will more than offset declines in the rest of the country. And China may increase production over the year by 60 kbd.
I have listed the countries that OPEC anticipates will grow production by more than 10 kbd, and have not listed the many countries that will see production decline by more than that amount. It is remarkable that listing the increases in production outside of OPEC can be done with just a few paragraphs. And it is a little disturbing that the threats to pipeline security throw questions over the reliability of some of the numbers. And yet this only addresses the possible growth in production, declining producers would require a much longer list. Combined it becomes a little more difficult, as turmoil in MENA continues to grow, to remain optimistic over the OPEC projections.
Nuclear Operator Raises Alarm on Crisis TOKYO — The operator of Japan’s tsunami-hit nuclear power plant sounded the alarm on the gravity of the deepening crisis of containment at the coastal site on Friday, saying that there are more than 200,000 tons of radioactive water in makeshift tanks vulnerable to leaks, with no reliable way to check on them or anywhere to transfer the water.
The latest disclosures add to a long list of recent accidents, leaks and breakdowns that have underscored grave vulnerabilities at the Fukushima Daiichi nuclear power plant site more than two years after a powerful earthquake and tsunami set off meltdowns at three reactors.
The New Nuclear Craze Before we all become pro-nuclear greens, however, you’ve got to ask three questions: Is nuclear power safe and clean? Is it economical? And are there better alternatives?
No, no and yes. So let’s not swap the pending environmental disaster of climate change for another that may be equally risky.
Should Fukushima's radioactive water be dumped at sea? On an international level, even if all the waste from Fukushima was dumped neat into the Pacific, dilution would eliminate any radiation risks to distant countries like the US, says Simon Boxall of the National Oceanography Centre in Southampton, UK.
The ocean would be the safest place for the waste water, says Geraldine Thomas, who runs the Chernobyl Tissue Bank at Imperial College London. "But to make that politically acceptable they have to talk to the local population. They have to make people understand that low levels of radiation don't matter because we're all exposed to it all the time."
Oil Gains as U.S. Home Data Eases Concern on Stimulus West Texas Intermediate crude climbed the most in two weeks after a drop in purchases of newly built U.S. homes last month bolstered speculation the Federal Reserve will defer tapering stimulus measures.
Futures rose 1.3 percent after government data showed sales of new homes fell by the most in more than three years. Minutes from the Fed’s July policy meeting recorded that members were “broadly comfortable” with curbing bond buying this year if the economy improves. Fed Bank of St. Louis President James Bullard said the bank should pledge not to raise the benchmark interest rate as long as inflation is below 1.5 percent.
“The market rebounded after the release of the pretty-horrific July home numbers,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “The housing data appears to have put fears of a quick end of stimulus to rest. Housing has been one of the stronger sectors of the economy recently.”
Are Natural Gas Market Fundamentals About to Change? Unconventional, or shale, natural gas production has driven the market to a position of oversupply in recent years. US shale gas production increased sixfold to 265 billion cubic meters last year from 75 billion in 2007. Five years after hitting a low of roughly $2.00 per mcf in 2008, natural gas prices are still weak, trading at approximately $3.50.
Some experts say that there are signs that this production boom will slow down and that natural gas prices are preparing to rise. Let’s explore two items that help back this case. Both relate to the supply side of the market.
Coal Gets No Relief as Aussie Slide Deepens Glut Coal miners are taking advantage of the tumbling Australian dollar, boosting production even as a glut of the power-station fuel drives prices to the lowest in almost four years.
Iraq-Turkey oil flow resumes - Iraqi officials BAGHDAD (Reuters) - Crude oil flows have resumed through a pipeline running from Iraq's Kirkuk oil fields to the Mediterranean port of Ceyhan in Turkey, two officials from Iraq's North Oil Company said on Saturday.
Why Japanese exports could break out of a 5-year slump in 2013 Regarding real versus nominal export and import data as described in the above graph, it’s important to note that the price of oil peaked at $145.30 in July 2008, was at $50 per barrel in 2005, and fell closer to $25 per barrel in 2000. Japan imports significant amounts of crude oil, which provides over 40% of Japan’s power needs. As such, when focusing on the future trend of “real” versus “nominal” export or import data, “real” data prior to the 2005 base year is subject to significant adjustments related to intermediate goods-related inflation or deflation. These adjustments include crude oil imports as well as other exchange rate–related factors.
Silicon Valley can’t save America’s dying economy Gordon’s challenge: “There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely.”
Rather, he says, “the rapid progress made over the past 250 years could well turn out to be a unique episode in human history,” a collection of “one-time-only inventions” that Silicon Valley cannot and will not repeat.
U.S. oil boom puts Saudi ties on shifting sand (video) The oil-for-security bond that has defined U.S.-Saudi relations for 70 years is fraying, as the United States looks to a future that does not depend on crude from the Arab power.
China's oil demand meets North Sea supply China already has around 8% of the North Sea's producing capacity. Sinopec recently formed a joint venture with Talisman, from Canada, and another state-owned company, CNOOC, has paid nearly £10bn to buy the Canadian firm Nexen, with its major stake in the huge Buzzard field, off Aberdeen.
The Chinese strategists are now putting Addax into Europe's energy capital to look for more opportunities, which could include joint ventures, acquisitions and equity stakes.
U.S. Forces Are Ready to Act on Syria as UN Envoy Arrives Defense Secretary Chuck Hagel indicated that U.S. military forces, including naval vessels, are positioned in the Mediterranean and ready to act if President Barack Obama calls on the Pentagon to strike Syria.
“The Defense Department has a responsibility to provide the president with options for all contingencies,” Hagel told reporters yesterday while en route to Kuala Lumpur, where he starts a week-long visit to the region. “That requires positioning our forces, positioning our assets to be able to carry out different options, whatever option the president may choose,”
Iranian Navy Dispatches 27th Fleet to High Seas TEHRAN (FNA)- The Iranian Navy dispatched its 27th flotilla of warships to the high seas to protect the country's cargo ships and oil tankers against pirates, Iran's Navy Commander Rear Admiral Habibollah Sayyari said.
Official: Iran to Build Oil Refineries in Africa, Asia Soon TEHRAN (FNA)- Iran has signed fruitful agreements with several African and Asian countries on the construction of small refineries in those states, an informed official announced.
Head of Iran's Syndicate of Oil, Gas and Petrochemical Products Exporters Hassan Khosrojerdi said that Iran's private sector is planed to build 9 small refineries in Asian and African countries.
Pertamina edging toward minority stake in Iraq PT Pertamina is one step closer to purchasing a 10 percent stake in one of the largest oil fields in Iraq, with talks underway between it and the oil field operator.
Pertamina investment planning and risk-management director Afdal Bahaudin confirmed on Friday that the state oil and gas firm was currently waiting for American oil and gas giant ExxonMobil to decide on its 60 percent stake at the giant West Qurna-1 oil block.
Iraq pushes for investment as India seeks more crude oil NEW DELHI, (Agencies): Iraq’s prime minister on Friday pitched for investment from India to rebuild his war-shattered nation, which is a critical energy supplier to New Delhi. Iraq’s Prime Minister Nuri Al-Malaki said there were “great opportunities” for Indian firms to rebuild the nation’s infrastructure — constructing ports, highways, housing, railways, schools, hospitals and investing in oil production facilities. “There is so much potential,” said Maliki, who is on a three-day trip to New Delhi and Mumbai. Iraq is still struggling to rebuild its broken infrastructure since a 2003 US-led invasion ousted president Saddam Hussein and led to massive sectarian violence. This is the first head of government-level visit between the two countries since 1975, when then-prime minister Indira Gandhi visited Iraq.
Toll in Vizag HPCL refinery fire rises to 10 Hyderabad (IANS) The death toll in the major fire that broke Friday in the state-owned Hindustan Petroleum Corporation Ltd (HPCL) refinery in Andhra Pradesh's coastal city of Visakhapatnam rose to 10, police said Saturday.
Six charred bodies were recovered from the mishap site Saturday, taking the toll to 10. Two bodies were found Friday night while two injured succumbed at a hospital.
Review of Keystone Contractor Won’t Be Complete Before January The investigation of an alleged conflict of interest by a U.S. State Department contractor reviewing the proposed Keystone XL pipeline won’t be complete until January.
The State Department’s Office on the Inspector General announced today that it was reviewing whether recommendations it made in a separate February 2012 report into conflict questions about another Keystone contractor are being followed as the department conducts an environmental review of the $5.3 billion project.
Four Dead in Helicopter Crash Off Scottish Coast, Police Say Four people were killed when a helicopter carrying 18 people for French oil company Total SA (FP) crashed into the sea off the Shetland Islands.
Police said the aircraft went down shortly before 6:30 p.m. yesterday, 2 miles from Sumburgh airport, which was closed for use by emergency services. The bodies of three people have been recovered and the search continues to find the body of the fourth, Police Scotland said in a statement today.
Downside from boom in the energy patch: fatalities Job growth in the oil and gas sector is vastly outpacing total private sector growth, but so too are the sector’s work-related fatalities. Have safety practices slipped in the energy industry?
Ethanol blend a problem for lawn mowers, etc. The push to increase the amount of energy that comes from corn poses a threat to a lot of equipment that is common around the home, such as lawn mowers, chain saws, trimmers, snowblowers, boats and generators.
Yosemite Wildfire Sparks State of Emergency in San Francisco A wildfire in northern California has spread to Yosemite National Park and prompted Governor Jerry Brown to declare a state of emergency for the San Francisco area because of the potential effect on its utilities.
The blaze, which originated in Stanislaus National Forest, has reached a wilderness area of Yosemite, according to the park website. Temporary interruption of electricity and water delivery to San Francisco is possible, Brown said in a statement yesterday.
Yosemite Is Burning...Here's How Climate Change Makes Wildfires Worse Big wildfires like Colorado's thrive in dry air, low humidity, and high winds; climate change is going to make those conditions more frequent over the next century. We know because it's already happening: A University of Arizona report from 2006 found that large forest fires have occurred more often in the western United States since the mid-1980s as spring temperatures increased, snow melted earlier, and summers got hotter, leaving more and drier fuels for fires to devour.
Greenpeace says its ship enters Russian Arctic MOSCOW (AP) -- The environmental group Greenpeace says one of its ships has defied Russian authorities and entered Arctic waters to protest against oil drilling.
Greenpeace says Russia this week denied permission for its Arctic Sunrise ship to enter the Kara Sea, a section of the Arctic Ocean off Siberia. But the ship entered the waters on Saturday morning, Greenpeace said in a statement.
Report: Puerto Rico unprepared for climate change Environmental officials and scientists warned Friday that Puerto Rico is dangerously vulnerable to the effects of global climate change and urged it to prepare by better-regulated coastal development, and perhaps even by building artificial reefs.
The storm-caused floods and erosion that have always affected the U.S. Caribbean territory are expected to grow worse as temperatures and seas rise, perhaps by 22 inches (57 centimeters) by 2060, according to a U.S. Army Corps of Engineers study.
How scientists at NOAA are mapping New York’s watery future When Hurricane Sandy hit, New York’s flooding maps were 30 years out of date. NOAA scientists are ensuring this never happens again.
The Next Hurricane, and the Next Hurricane Sandy, the monster storm that hit the Atlantic Seaboard on Oct. 29, left at least 159 dead and caused $65 billion in damages. But as a presidential task force made clear this week, Sandy cannot be considered a seasonal disaster or regional fluke but as yet another harbinger of the calamities that await in an era of climate change. With that in mind, the report says that individuals, local governments and states that expect federal help cannot simply restore what was there but must adopt new standards and harden community structures to withstand the next flood or hurricane.
US petroleum demand hits 3-year high (IANS) The overall petroleum demand in the US jumped in July to the highest level in three years, the American Petroleum Institute (API) said.
The total petroleum deliveries, a measure of demand, rose 1.7 percent in July from a year ago to average $18.9 million barrels per day, Xinhua reported.
"The summer travel season brought greater demand for several fuel types last month than we've seen in the recent years," API chief economist John Felmy said Thursday.
Crude Rises From Two-Week Low as Jobless Claims Fall West Texas Intermediate crude rose from a two-week low as the fewest U.S. workers in more than five years applied for unemployment benefits over the past month, bolstering optimism that fuel demand will accelerate.
Gulf Coast Gasoline Weakens as Seasonal Fuel-Grade Switch Nears U.S. Gulf Coast gasoline weakened versus futures for the first time in four days as the summer driving season draws to a close and the transition between summer and winter grade gasoline begins.
Crude Options Volatility Slips as Oil Rises From Two-Week Low Crude options volatility slipped to a three-day low as the underlying futures bounced back from a two-week low.
Implied volatility for at-the-money options expiring in October was 21.25 percent on the New York Mercantile Exchange at 4:15 p.m., down from 22.71 percent yesterday.
Gasoline Gains on Speculation Outages Will Reduce Fuel Supply Gasoline gained on speculation that unplanned refinery shutdowns and slowdowns will crimp supply as the nation nears the Sept. 2 Labor Day holiday.
PetroChina foresees hefty gains from gas price hike HONG KONG (Reuters) - PetroChina Co Ltd , which has bled billions of dollars from selling imported natural gas at deep discounts, is turning optimistic about its natural gas business after the government's first gas price hike in three years.
China's dominant energy producer expects the price hike in July to narrow its losses from selling imported gas and boost its profitability by 20 billion yuan ($3.27 billion) every year from 2014, President Wang Dongjin said on Thursday.
Motiva Port Arthur Crude Unit Said to Stay Shut as Barges Scarce Motiva Enterprises LLC’s Port Arthur, Texas, refinery, may keep its largest crude unit offline because vessels able to transport its output of vacuum gasoil are in tight supply, a person familiar with operations said.
PTT complex braces for protest Staff of companies in PTT Complex on Vibhavadi-Rangsit Road were told to leave offices at noon, as a group of people plan a protest against LPG price hike at 3.30pm.
Protesters wave Thai flags during a protest outside the headquarters of the headquarters of the Petroleum Authority of Thailand (PTT) in Bangkok Several hundreds of people protested against the government's plan to raise the price of liquefied petroleum gas (LPG).
Five theories on US LNG exports (and why they’re probably wrong) DOE officials have remained tight-lipped about when the next approvals may arrive, but that has not stopped the speculation. Sources have said they wouldn’t be surprised to see a half dozen or more approvals before the end of the year. Others have said it’s not outside the realm of possibility that there will be only one more approval in that time.
In truth, no one may know for sure, but with rumors rampant, let’s take a look at five theories we’re hearing and look at why they may be wrong.
Libya to Resume Oil Exports From Brega as Protests Ease Libya said it will resume oil exports from Brega, one of four ports where it declared force majeure this week, as protests that shut the facilities since end-July eased.
France's Technip to lay world's deepest gas pipeline in Gulf of Mexico French firm Technip is to lay the world's deepest gas pipeline for energy giant Shell in the US Gulf of Mexico, a company statement announced Friday in its second big deap-sea pipelaying announcement in 10 days.
The deal is "an important engineering, procurement and installation contract for the development of subsea infrastructure for the Stones field," at a depth of about 2,900 metres, Technip said.
Jeff Rubin: Canada’s race to build pipelines won’t spell relief at the pumps Canadian drivers may think that TransCanada’s Energy East pipeline, which will allow Alberta to ramp up oil sands production while boosting the flow of oil to eastern Canada, will translate into lower pump prices. Think again.
By connecting land-locked oil deposits in Alberta and North Dakota with world markets, pipelines and railways aren’t just letting industry pull more oil out of the ground — they’re also connecting those oil flows to world prices. That’s something this continent hasn’t seen much of lately. Earlier this year, for instance, Western Canadian Select, the benchmark price for bitumen from the oil sands, traded at nearly half the price of Brent crude. Such a steep discount set off alarm bells in Alberta, as well as in finance minister Jim Flaherty’s office.
Canada's oil pipelines will not build a nation - they are a great swindle The defeat has been barely noticed by the media. Amidst the rolling hills of Quebec's lush farm and wine region, the small town of Dunham has beaten the oil giants.
It's here that Enbridge and Portland-Montreal Pipe Line – owned by Imperial Oil, Suncor and Shell – have been trying to construct a pumping station to pipe heavy crude over a nearby mountain range. The infrastructure is integral to Enbridge's plans to ship Alberta tar sands, via Quebec, to the eastern coast of the United States.
But when Enbridge quietly initiated this project in 2008, a coalition of local farmers, residents and environmentalists formed in opposition. They marched, launched legal challenges, and organized Canada's first UK-inspired climate camp – which ended in promises of civil disobedience.
The Peak Oil Crisis: A Review of Richard Heinberg’s ‘Snake Oil’ Richard Heinberg has been following and writing about peak oil for a long time. In the last decade, he has published 10 books on peak oil and related resource depletion topics as well as given some 500 lectures warning about the hard times ahead. The subtitle of his recent book, “How Fracking’s False Promise of Plenty Imperils Our Future” captures “Snake Oil’s” theme in a lucid phrase. This is an angry book, for it is intended as a rejoinder to the avalanche of half truths and optimistic estimates concerning the future of our energy resources which have filled our media in the last few years.
As the evidence accumulates that man is destroying the atmosphere by ever-increasing carbon emissions and bankrupting his economic systems by continued reliance on increasingly expensive oil, realistic appraisals of our true energy situation are being lost.
The Association for the study of Peak oil and gas announces Eagle Ford Shale – a snapshot of today’s activity Southwest of Texas’ capital city Austin and towards the Mexican border there is a large area of shale called the "Eagle Ford Shale”, EFS. For those interested I can mention that there is a good website “Eagle Ford Shale” where one can find all sorts of information on Eagle Ford. Figures in this report are from that website.
Afren says H1 oil output up 13% on rise in Nigeria production Lagos (Platts) - UK-listed independent producer Afren said Friday its oil production rose 13% in the first half of the year to 47,653 b/d of oil equivalent, driven largely by increased output from its offshore fields in Nigeria.
"We recorded a year-on-year increase in underlying net production of 13%, principally from our greenfield developments offshore Nigeria," chief executive Osman Shahenshah said in a note on the company's 2013 half year results.
Nigeria state revenues tumble 42 pct in July due to oil outages ABUJA (Reuters) - Nigeria's government revenues slumped 42 percent in July due to oil theft and production outages, the accountant general said on Friday, underscoring how oil theft is damaging public finances this year.
State revenues fell to 498 billion naira, the lowest monthly earnings this year and down from 863 billion naira in June.
Obama tells CNN key decisions nearing on Syria, Egypt (CNN) -- The time is nearing for a potentially definitive U.S. response to alleged Syrian government atrocities and an increasingly violent military crackdown in Egypt, President Barack Obama said in an exclusive interview broadcast Friday on CNN's "New Day."
The U.S. remains "one indispensable nation" in the volatile Middle East and elsewhere, Obama told "New Day" anchor Chris Cuomo.
"We have to think through strategically what's going to be in our long term national interests."
Asked by Cuomo whether the U.S. government is now facing a "more abbreviated time frame" on key decisions in Egypt and Syria, Obama repeatedly gave a one-word response: yes.
Sanctions biting but Iran not budging WASHINGTON (AP) — New signs are emerging that international sanctions are taking a deepening toll on Iran's economy — putting billions of dollars in oil money out of the government's reach. Yet there is no indication the distress is achieving the West's ultimate goal of forcing the Islamic Republic to halt its nuclear program.
Iran has proved adept at working around sanctions and if oil prices don't plummet, U.S. analysts say the country probably has enough economic stamina to reach what the West suspects is its true intention — producing nuclear weapons.
Apache's Egypt quandary symbolizes tough business call Apache Corp faces a difficult choice in Egypt: whether to sell its substantial oil and natural gas operations in the country or wait out the recent bloodshed.
The Texas-based energy company has said it is assessing the value of its Egyptian interests, which account for roughly a fifth of its global oil and gas production and 27 percent of its revenue last year.
Angola Urges Diversification Amid Stable Oil Prices Angola, Africa’s largest oil producer after Nigeria, needs to cut its reliance on crude to buffer the economy as prices for the commodity are set to remain stable over the next three years, a central bank official said.
Arab strife pushes big prize oil search to Morocco, Malta LONDON (Reuters) - Middle East turmoil has given a fresh spur to energy companies looking for big finds further afield to more stable and inviting hosts Morocco, Malta and Spain.
Close to known reserves and large markets, they offer tempting terms for explorers without the risks of production in Syria, Libya or Egypt.
Putin Energy Czar Igor Sechin Acquires First Shares in Rosneft OAO Rosneft Chief Executive Igor Sechin bought his first shares in the state-run company, now the world’s largest traded crude producer by output, that he has led for almost 10 years.
Sechin, who heads an energy commission formed by President Vladimir Putin last year, bought shares worth 0.0075 percent of the company’s charter capital, according to a regulatory filing by the Moscow-based company today, which also listed six other managers that bought stock. The stake is worth about $5.6 million, based on Rosneft shares, which rose 0.82 percent to 236.41 rubles at 2:22 p.m. in Moscow today.
India, Iraq to discuss rupee payments for trade - minister NEW DELHI (Reuters) - The government will discuss with Iraq the possibility of settling trade payments in the rupee currency, the trade minister said, in a move that will also help stabilise the troubled currency.
Iraq's Prime Minister Nuri al-Maliki is visiting India to finalise a deal to sell India more crude oil.
DNO reports surging production DNO, the Norwegian oil company operating in Iraqi Kurdistan, reported a production increase of nearly a third during the second quarter on the back of record flows from its first horizontal well in the region.
A well at Tawke, an oilfield located near the borders of Syria and Turkey, flowed at a rate of 25,000 barrels per day (bpd), compared with the previous record of 10,000 bpd at another well in the same field.
Exxon to sell over half of Iraq oilfield stake to PetroChina, Pertamina-Iraq minister (Reuters) - Exxon Mobil is selling over half of its 60 percent holding in Iraq's West Qurna-1 oilfield project to China's biggest energy firm PetroChina and Indonesia's Pertamina, Iraq's oil minister confirmed on Friday.
"25 percent (stake) to PetroChina and 10 percent to Pertamina," Abdul Kareem Luaibi told Reuters on the sidelines of a ministerial meeting here.
Statoil to bet on Angola, Russian shale in exploration OSLO (Reuters) - Statoil, one of the most successful oil explorers in recent years, sees offshore Angola and Russian shale as the industry's next big plays and considers U.S. shale oil overhyped, its exploration chief Tim Dodson said.
Argentina Prepares China Shale Deal to Boost Gas Reserves YPF SA, Argentina’s state-owned energy company, said its next shale oil and gas partnership will be with a group including China’s Cnooc Ltd.
China’s biggest offshore energy explorer probably will sign next month a definitive deal to explore and develop deposits in the Vaca Muerta formation, either as part of its Bridas Corp. joint venture with the billionaire Bulgheroni brothers or with the Bridas-run Pan American Energy LLC, YPF board member Hector Valle said in an interview.
Indonesia oil regulator suspends energy tenders amid graft scandal (Reuters) - Indonesia's energy regulator has suspended all oil, condensate and natural gas sell tenders as it reviews internal procedures after its chairman was caught taking an alleged bribe from an oil trader last week, an agency official said on Monday.
The suspension is the first evidence that the graft scandal engulfing SKKMigas is starting to impact day to day operations for Indonesia's huge oil and gas industry.
BP spill claims deadline may slip by year or more LONDON (Reuters) - The April 2014 deadline for compensation claims against BP over its U.S. oil spill is almost certain to be extended, say both side of the legal settlement that governs payouts, possibly into 2015.
The last date for claims, part of the oil company's settlement last year with individual and business claimants, was always potentially moveable, but like the open-ended nature of its cost that hit home earlier this year, the indefinite extendibility may not have been fully appreciated by long suffering investors, analysts say.
Tear gas used on protesters in Oman Muscat: Security forces on Thursday fired tear gas to disperse protesters in Liwa town, about 235km north of Muscat, according to Monitor of Human Rights in Oman (MHRO).
The independent human rights group has posted photographs of protesters running helter-skelter after security forces fired tear gas. Gulf News could not independently verify the claims.
The protests, led by Dr Talib Al Maa’mari, Shura Council member from Liwa, were held by local residents, including women and children, to oppose growing pollution in the area due to the Sohar Industrial Estate.
County bans drilling waste Albany, NY - County lawmakers voted overwhelmingly Monday to ban gas-drilling waste, specifically the chemical cocktail produced by hydrofracking, from county water treatment plants and from use on its roads.
The measure targets drilling's highly salty and often radioactive liquid byproduct, said Guilderland Democrat Bryan Clenahan, the ban's chief sponsor. Gas companies have marketed the liquid as a tool to keep roads from icing over in the winter.
Anti-Fracking Protestors to Appeal Directly to Obama During Visit to Shale Country President Obama’s welcome on his trip to Pennsylvania and New York this week may not be as warm as he’d hoped. Anti-fracking citizens in both states, dismayed at the President’s decision to embrace natural gas development as a major energy priority, plan to protest his visit to shale country. They join a growing number of Americans living in the gas industry’s path with real and substantial concerns about what the President’s policies might mean for their future.
Fukushima inspectors 'careless', Japan agency says, as nuclear crisis grows HIRONO, Japan (Reuters) - The operator of Japan's wrecked Fukushima nuclear plant was careless in monitoring tanks storing dangerously radioactive water, the nuclear regulator said on Friday, the latest development in a crisis no one seems to know how to contain.
Tepco testing tainted earth at No. 1 plant FUKUSHIMA – Tokyo Electric Power Co. on Friday started digging up soil tainted with highly radioactive water discharged from a storage tank at its Fukushima No. 1 nuclear plant to test its radiation levels.
The utility will dig areas measuring 12 sq. meters in total to a depth of 40 to 50 cm where pools of leaked radioactive water formed, and then measure levels to determine how far the contamination has spread and how much soil needs to be removed.
Japan's Abe to visit Middle East in nuclear push TOKYO (AFP) – The prime minister of energy-poor Japan heads to the oil-rich Middle East this weekend in his latest push to promote nuclear technology exports, a spokesman said Friday, despite growing problems at the crippled Fukushima plant.
Shinzo Abe was due to leave Tokyo on Saturday for a six-day trip that will take in Bahrain, Kuwait, Djibouti and Qatar, with discussion of Japan's nuclear know-how expected to be on the agenda.
Daily life shapes sustainable transportation Imagine your life recreated in data, every car trip, bus ride, grocery store stop and burrito run—including when, why, and with whom you went—represented by blips on a computer.
It's recently been done in Southern California, the daily to-do's of 18 million people tracked, logged, mapped and analyzed. Baltimore is now getting the same treatment, and Seoul, Korea, may be next.
The massive undertaking is all in the name of sustainable transportation, and some UC Santa Barbara geographers are central to the mission. With colleagues from the University of Texas at Austin and from Arizona State University, they're collaborating with some of the nation's most crowded municipalities to inform emissions policy through data collection, synthesis, and analysis.
July best ridership month ever for Amtrak Amtrak announced that July was its best single ridership month ever.
“Amtrak is delivering record ridership across the country and serving as an economic engine to help local communities grow and prosper,” said President/CEO Joe Boardman.
Tesla begins selling the Model S in China NEW YORK (CNNMoney) - Tesla has officially entered the Chinese auto market.
"As of now, TESLA Model S reservations are being accepted," Tesla said Wednesday on Weibo, a Chinese microblogging site similar to Twitter.
NY EV market evolving with truck incentives New York has launched a $19 million Truck Voucher Incentive Program to encourage the purchase of battery-electric commercial trucks and other energy-efficient transportation, including hybrid and compressed natural gas trucks that will drive innovation in the commercial vehicle sector and help meet federal clean air standards.
Bike & Go: road testing the new national bike hire scheme A nationwide public bike sharing scheme launched this month, providing bikes at railway stations across the country.
Fossil Fuels Contain Buried Risks; Look To SolarCity For Growth The gap between government goals and Exxon's projections means that something has to give; either global governments stick to their plan of maintaining a global temperature increase under 2° mainly through the shift to renewables from fossil fuels; or global governments fold to the oil and coal companies and allow global climate change to continue mostly unabated.
Wind Farms Take Root Out at Sea BREMEN, Germany — In a warehouse district on the outskirts of Bremen in northwestern Germany is a big, well-lighted work space dominated by the massive top section of a wind turbine called a nacelle.
It is here that Siemens, the German power systems giant, trains new employees and gives refresher courses on how to work safely on modern windmills that can rise 90 meters, or about 300 feet, and weigh more than 100 tons.
Building inspector: Covanta probably not to blame for Falls rat problem NIAGARA FALLS – The city’s chief building inspector said Friday he doesn’t think Covanta Niagara’s energy-from-waste incinerator has caused a recent rat infestation in a nearby neighborhood.
Dennis F. Virtuoso, who also is a Niagara County legislator, said he thinks the source of the problem is the reconstruction of nearby Buffalo Avenue.
Is Al Jazeera America Going to Change the Way Networks Cover Climate Change? On its first day of broadcasting, Al Jazeera America devoted 30 minutes to climate change—more time than top shows on CNN and Fox News have given to this issue in the past four-and-a-half months, combined. In fact, the full half-hour (24 minutes, plus commercials) of broadcast of Inside Story was equal to about half of the coverage climate change received in 2012 from the nightly news on ABC, CBS, NBC, and Fox, combined. For a network that promised to provide "unbiased, fact-based and in-depth, journalism," this seems like a promising start.
California ‘Freebies’ Drive Carbon to 2013 Low Carbon prices in California have slumped to the lowest level this year as the state weighs increasing the number of free permits offered to polluters in an effort to kick-start the fledgling market.
State aid formula brews new storm Upstate communities saw more than their homes, roads and bridges wash away with Tropical Storm Irene two years ago.
They also lost millions of dollars in property tax revenue as the value of storm-damaged homes and businesses declined — and in some cases disappeared.
Fiji official: Climate change hampers development of island nations SUVA, Fiji (UPI) -- Climate change is one of the biggest barriers to sustainable development for small island countries, a Fijian official said Wednesday.
Speaking at a climate workshop in Fiji's capital Suva, Esala Nayasi, director of the political and treaties division of the Ministry of Foreign Affairs, said the adverse effects of climate change are a security threat to Pacific island countries (PICs), China's Xinhua news agency reported.
Climate change may be baring Mt. Everest A warming climate is melting the glaciers of Mount Everest, shrinking the frozen cloak of Earth’s highest peak by 13% in the last 50 years, researchers have found.
Rocks and natural debris previously covered by snow are appearing now as the snow line has retreated 590 feet, according to Sudeep Thakuri, a University of Milan scientist who led the research.
Is climate change humanity's greatest-ever risk management failure? Humans are generally very risk-averse. We buy insurance to protect our investments in homes and cars. For those of us who don't have universal health care, most purchase health insurance. We don't like taking the chance - however remote - that we could be left unprepared in the event that something bad happens to our homes, cars, or health.
Climate change seems to be a major exception to this rule. Managing the risks posed by climate change is not a high priority for the public as a whole, despite the fact that a climate catastrophe this century is a very real possibility, and that such an event would have adverse impacts on all of us.
Amish farmers adapt to climate change “Not everybody, in agriculture, industry or government, agrees on what is happening. But they’re finding that they have to address adverse weather conditions,” said Dale Arnold, director of energy policy for the Ohio Farm Bureau.
While Amish communities in Ohio have a well-established reputation for resisting change on a variety of levels, they are adapting some of the same new agricultural practices as their English neighbors as they strive to remain productive and viable.
Northeast Passage: Russia Moves to Boost Arctic Shipping The earth has rarely been as warm as it is today -- and it has never been this small. In the distant past, traveling from Hamburg to Shanghai by ship meant sailing around Africa, a journey of at least 28,000 kilometers (17,400 miles). A short cut became available in 1869, with the opening of the Suez Canal, an event so epochal that Giuseppe Verdi was asked to compose a hymn for the celebration. After that, the Hamburg-Shanghai route measured only about 20,000 kilometers.
Now another hymn could be needed, albeit a Russian one. Global warming has led to the rapid melting of Arctic sea ice. Where the thick ice pack stretched off the Siberian coast in August only a few years ago, there is nothing but the gray and cold Arctic Ocean today.
China could be the future of Arctic oil The Arctic may contain 10-15 percent of the world's undiscovered oil reserves, with most of that oil located in the seabed of the Arctic Ocean. And China, thanks to its financial rather than military strength, could take the lion's share.
The US Geological Survey estimates there are 90 billion barrels of conventional oil north of the Arctic Circle, enough to fuel the entire world for three years at current consumption rates.
Australian floods of 2010 and 2011 caused global sea level to drop Rain - in effect, evaporated ocean - fell in such colossal quantities during the Australian floods in 2010 and 2011 that the world's sea levels actually dropped by as much as 7mm.
Rising Seas As the planet warms, the sea rises. Coastlines flood. What will we protect? What will we abandon? How will we face the danger of rising seas?
I often find myself wondering where my life would be today had I not stumbled across The Oil Drum in 2005. I don’t know that I would still be writing today were it not for my early experiences with TOD readers. As TOD winds down, I thought I’d share my story, which I have not told before.
In 2005 I was a chemical engineer at the ConocoPhillips Refinery in Billings, Montana. I worked in the group that among other things did refinery economics. We optimized the refinery for which crude slates to run and how the refinery should be run, depending on the crude slate as well as whether margins were higher for diesel or for gasoline. We could shift production about 5% one way or the other. We often joked about the fact that my boss was the Director of Optimization, Process, and Economics (the “DOPE”).
At that time the Montana government was in the midst of trying to implement an ethanol mandate for the state, and the refinery manager knew I had some background with ethanol from my graduate school days at Texas A&M University. So whereas other refineries in the state were sending their plant managers to testify, I was asked to go to the Montana State Legislature to provide testimony on this bill. As I was preparing for my testimony, I wanted to be sure I also emphasized the dangers of being overly dependent on a depleting resource like petroleum. I wanted the legislators to know that my testimony was not to maintain the status quo, but that instead we needed a different model. In the course of preparing my testimony, I read The Long Emergency and Twilight in the Desert – both books that had a big impact on my thinking -- and I began to frequent The Oil Drum and make comments.
I had started a little blog I called R-Squared – a play on my initials but also a term frequently used by engineers – to document and archive my findings as I prepared for my testimony at the legislature. I found that there was so much misinformation related to ethanol that I began to write essays debunking these claims. At some point Kyle Saunders, aka Professor Goose, asked me if I would become a contributor and share some of these articles at The Oil Drum as he felt like they could use some people with oil industry experience.
As a side note, when I started my blog I was really looking for a hobby. I wanted something to take up a bit of time in my day. I narrowed it down to learning to brew beer (I actually read some books on this and investigated setting up the equipment) or to start writing about energy. Needless to say, I chose the latter and I still don’t know how to brew beer.
Not long after joining TOD, I talked a TOD poster known as “thelastsasquatch” into posting under his real name. I thought his postings were superb, and that the moniker behind those postings should take credit under his real name. That’s how TOD and the rest of the world came to know Nate Hagens. You’re welcome.
In those early days on TOD some people didn’t know quite what to make of me. I certainly agreed that we faced a serious problem and had to do something about it, but also, because of my experience from working in the industry, took the unpopular position that in 2005 oil was not yet reaching its peak. I also took issue with the Hubbert Linearization (HL) technique that was being used to suggest that peak was taking place in 2005.
I devoted several posts to showing that the HL technique didn’t in fact work that way by doing a series of backcasting. What I discovered was that using historical cases, the HL could not have reasonably predicted peak oil in the US until about seven years after the fact. But the most damning indictment of all is that I took a hypothetical case of a country in which oil production increased slightly each year for eternity – and yet the HL predicted a peak.
I took a lot of flack from some TOD posters for this work, but I also received support from popular posters like Stuart Staniford who proclaimed that this case indeed showed that HL can’t be used in the way it was being used to make a peak claim in real time. As Stuart said, I had shown that the HL technique doesn’t really work that way. Some readers responded by suggesting I had ulterior motives, and the experience left a bad taste in my mouth.
Usually my posts were about how the energy industry really worked. I also spent a lot of time debunking claims around various biofuel technologies. I highlighted the problems at Range Fuels early on, and think I was the first to publicly proclaim that the emperor had no clothes long before they went bankrupt. Along the way I coined the term “XTL” (right here on TOD) to describe various (biomass, coal, or natural gas) “to liquids” technologies in which the carbon source is converted to synthesis gas and then subsequently to liquid fuels by the Fischer-Tropsch process.
I also coined the term “Peak Lite” to refer to a situation that behaves like peak oil, but isn’t a true peak because production is still rising. After all, peak oil really means that there is not enough oil to meet demand, and prices will become very volatile. But that situation doesn’t require a production peak to occur; rapidly increasing demand in the developing world can achieve the same thing: Not enough oil to supply demand at a certain price point, and prices inevitably rise.
Some interpreted my usage of peak lite to mean that peak oil will be a “lite” event, but that’s not what I meant. It is simply “lite” because it has the symptoms of peak oil without actually being peak oil. Another way to think of peak lite would be to consider it as peak oil as a function of price. Peak lite may imply for instance that the world has already passed peak $25/bbl oil. If oil prices were at that level, we would see oil production declining rapidly. But supply and demand work together to set prices, and I think many peak oil advocates underestimated the effect higher prices would have on oil production.
I eventually met quite a few contributors and readers at ASPO conferences I attended (and presented at) in Sacramento, Washington D.C., and in Austin. What sucked me in and kept me writing were the debates with others in the TOD community. People were reading, and they were engaging. This kept me interested. I like to write to educate, but in many cases I found that I learned just as much from readers – many of whom also had industry experience. I was happy after writing an article if I had learned something new.
Most people at TOD would consider me a bit of a contrarian in that I was not in the early peak (~2005) camp, but I still took peak oil very seriously and thought the world needed to be preparing for the possibility of a crisis. My position falls very much into the category of people like Robert Hirsch, Jeff Rubin, and Stuart Staniford. I was particularly concerned that by loudly predicting a date for peak oil (e.g., 2005) that the implications would be severe loss of credibility if that was shown to be another incorrect prediction of the timing of peak oil. I was worried about the boy crying wolf too many times. My own position tended to be “Peak oil soon, but not yet. I believe we have a few more years, but we can’t waste them.”
I tried to explain to people why we really use (and will continue to use) fossil fuels. I tried to give people a better understanding of how the oil industry works, as I feel most people have a comic book understanding of what goes on inside the industry. I tried to reason with people who protested the oil industry in general and to get them to understand what the world would be like if the oil industry suddenly stopped producing oil. (I am not suggesting that the oil industry is without flaws, but I think most people can’t comprehend what their lives would be like without it).
I ultimately found myself more at odds with the general consensus of TOD readers, and as a result I spent more time writing on my own R-Squared Energy Column. (Those of you who like to talk energy are more than welcome to drop by and engage in discussions with our many columnists). I was also sidelined for a while because I was asked to write a book along the way (Power Plays: Energy Options in the Age of Peak Oil), and in it I very much emphasize the risks to the world of peak oil.
In the end, I wasn’t contributing as much to TOD, but I did contribute half a dozen articles last year (including the most read and 7th most read articles of the year). But I also checked in with Drumbeat every time it was posted, because I don’t think there is a better collection of energy-related news links out there. I am amazed that Leanan continued to do this as long as she did, and many of us are grateful that she did.
To close, I will repeat something I repeated many times here. I know many of us think we are dead certain about what the future holds. But nobody on TOD predicted that US oil production would turn around as the fracking revolution began to turn oil and gas resources into reserves and subsequent production. In 2005 if someone suggested that by the end of the decade US oil production would be rising rapidly they would have been laughed off the site. We should take those lessons to heart. Keep an open mind.
There will be many surprises along the way. So remember that there is a lot of uncertainty about the future, and we shouldn’t be too quick to ridicule alternate viewpoints about how things may play out in the interim. It is my philosophy that it is much better to operate with some level of uncertainty and be generally correct than to operate with dead certainty and be dead wrong. Although admittedly I am amazed that some can be dead wrong again and again and still maintain faithful followings.
Yes, peak oil is still very much a threat, but we don’t know exactly when the most serious consequences might manifest themselves. $100/bbl oil is certainly a hardship for many, but it is still mostly business as usual to this point. People sometimes ask me for advice on what to do given the threat of peak oil, and I generally say "Live your life, take care of your loved ones, and just try to make the world a slightly better place."
Thank you to the TOD community for the influence you have had on the course of my life. I am not sure which direction I might have gone without the early opportunity to write for TOD, and more importantly without the valuable feedback I got from TOD readers. Don't be strangers. Stop by my site, or find me on Twitter, LinkedIn, or Facebook and let's keep the conversation going.
'Worrying' decline in oil and gas production The sharp decline in production of oil and gas from under British waters is "worrying" industry leaders.
Trade body Oil and Gas UK says there is record investment this year of £13.5bn.
But its annual report on the industry's economic impact highlights the sharp fall in output of 19% during 2011 and 14% in 2012.
It says the industry's latest estimates of the continuing decline suggest a further fall of at least 8.5% during this year, with no recovery next year.
WTI Drops to One-Week Low on Fed Speculation, Libya Start West Texas Intermediate crude traded near its lowest in more than a week amid speculation the Federal Reserve will reduce economic stimulus and as Libya prepared to open some oil ports closed by labor unrest.
Futures were little changed after dropping as much as 0.7 percent. The Federal Open Market Committee will publish minutes of a July meeting today, with 65 percent of economists surveyed by Bloomberg News predicting the Fed will taper bond purchases in September. Libya’s Zueitina and Hariga terminals are ready to resume exports, the Oil Ministry said yesterday. An Energy Information Administration report today may show U.S. crude stockpiles shrank by 1.5 million barrels last week.
U.K. North Sea Output May Drop 22% This Year on Maintenance U.K. North Sea oil and gas production may fall as much as 22 percent this year and take longer to reach previous estimates of higher output, according to the industry trade body.
Oil & Gas U.K. lowered its forecast for daily production in 2013 from its estimate in March to 1.2 million to 1.4 million barrels of oil equivalent, compared with last year’s average of 1.54 million barrels. It also pared its earlier estimates for a recovery in production.
China Diesel Exports Drop as Farm Sector Readies for Demand Peak China’s net diesel exports fell to the lowest level in nine months as the government restricted shipments before demand peaks in the agricultural industry.
Overseas sales of the fuel exceeded imports by 119,181 metric tons in July, according to data e-mailed by the General Administration of Customs in Beijing today. That’s equivalent to 28,900 barrels a day, the least since October, when net exports declined to 107,277 tons, Bloomberg calculations show. It’s also 2.2 percent less than in June.
The oil industry hype machine Prepare yourself for another hype cycle in the U.S. oil and gas industry. The industry says it has found a deposit of oil that may turn out to be the largest in the world. The deep tight oil deposit goes by the name Spraberry/Wolfcamp and is located in West Texas. It's no surprise then that the industry is trotting out the America-as-the-new-Saudi-Arabia theme once again, a theme that many including me have shown to be pure bunkum.
Cnooc Profit Rises as Oil Output Compensates for Costs Cnooc Ltd., China’s biggest offshore oil and gas explorer, posted a better-than-estimated 7.9 percent increase in first-half profit as rising output helped counter higher costs, including at unit Nexen Inc. The shares advanced the most in 19 months.
Increase in production and fall in taxes boosts Woodside's profits Major oil and gas producer Woodside Petroleum says record production has boosted its earnings for the first half of the year despite lower commodity prices.
A 22 per cent increase in production and lower taxes helped Woodside lift its after-tax profits in the first six months of the year to $965 million.
Statoil funds expansion, OMV expands output with North Sea deal OSLO/VIENNA (Reuters) - Norway's Statoil sold stakes in North Sea oil fields to Austria's OMV on Monday, in a $2.65 billion deal giving the former cash to develop new projects and placing the latter on course to meet ambitious output targets.
The deal, which analysts said came at a comfortable premium, gives OMV a foothold in one of Norway's top new developments and underlines a rebound in North Sea investments driven by new discoveries, high oil prices and better recovery technology.
Mexico’s Looming Oil Battle: Bid to Bring in Foreign Investment Sparks Protests To get a sense of the deep emotions linked to oil in Mexico, travel up the capital’s imperious Reforma Avenue to the towering petroleum monument. Using 14 tons of bronze, the statue portrays huge, muscular oil workers in heroic poses beneath an Amazonian woman, in a style that melds Mexican muralism with Soviet brutalism. An 18-m obelisk above marks the year 1810, when Mexico rebelled against imperial Spain, and the year 1938, when then President Lázaro Cárdenas announced the expropriation of oil from American and British companies, uttering the iconic phrase: “The petroleum is ours.” In a country that still smarts from centuries of colonial exploitation, the statue is a giant symbol of a nation finally asserting its sovereignty.
Pemex to explore for oil in United States Mexico's state-owned oil company says it will form a new entity to explore and produce shale gas and deep-water oil in United States territory.
The plan will help Petroleos Mexicanos, known as Pemex, acquire drilling techniques it now lacks for complicated terrain in Mexico, Chief Executive Emilio Lozoya said in an interview with the Wall Street Journal.
Dempsey: Syrian rebels wouldn't back US interests WASHINGTON (AP) — The Obama administration is opposed to even limited U.S. military intervention in Syria because it believes rebels fighting the Assad regime wouldn't support American interests if they were to seize power right now, Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, wrote to a congressman in a letter obtained by The Associated Press.
Effectively ruling out U.S. cruise missile attacks and other options that wouldn't require U.S. troops on the ground, Dempsey said the military is clearly capable of taking out Syrian President Bashar Assad's air force and shifting the balance of the Arab country's 2½-year war back toward the armed opposition. But he said such an approach would plunge the United States deep into another war in the Arab world and offer no strategy for peace in a nation plagued by ethnic rivalries.
Activists say more than 200 killed in gas attack near Damascus (Reuters) - Syrian activists accused President Bashar al-Assad's forces of launching a nerve gas attack that killed at least 213 people on Wednesday, in what would, if confirmed, be by far the worst reported use of poison gas in the two-year-old civil war.
Reuters was not able to verify the accounts independently and they were denied by Syrian state television, which said they were disseminated deliberately to distract a team of United Nations chemical weapons experts which arrived three days ago.
Qatar sends second shipment of LNG to Egypt (Reuters) - Qatar has sent its second tanker this month of liquefied natural gas (LNG) to Egypt, struggling to cover its energy needs even before the removal of Islamist President Mohamed Mursi unleashed deadly violence.
Qatar's state news agency said late on Monday the tanker left Ras Laffan terminal on Aug. 9, a week after the first cargo, part of an agreement made with Mursi and his Muslim Brotherhood government, which were backed by Doha.
Clashes Erupt at Libyan Oil Terminals Clashes erupted Tuesday at oil terminals that had been closed in Eastern Libya, oil officials said, the latest evidence of mounting tensions in the oil exporting nation, after an unauthorized tanker was blocked from entering another port Monday.
The forced closure of Libya's key oil ports by striking guards and workers, which has more than halved the country's oil production in recent weeks, has helped push oil prices higher, in addition to the crisis in Egypt.
Turkey urges Iraq to stop militants bombing pipeline ANKARA (Reuters) - Iraq must take serious steps to stop militants attacking an oil export pipeline running to Turkey, a senior Turkish official said on Wednesday, after two bombs disrupted exports for at least the sixth this month.
The pipeline, running from the Kirkuk oilfields to the Mediterranean port of Ceyhan in Turkey, is one of Iraq's largest crude oil export corridors.
Insurance cover to refiners for using Iranian oil soon New Delhi: After Petroleum Ministry agreed to provide funds, the Finance Ministry has initiated the process of setting up of a Rs 2,000-crore fund to provide insurance cover to domestic refineries that process crude oil imported from Iran.
Petroleum Ministry has agreed to provide first tranche of Rs 500 crore from Oil Industry Development Board (OIDB), a senior official in the Finance Ministry said.
Oil majors eye oil, gas off Arctic Jan Mayen island (Reuters) - An additional eight oil firms, including majors BP and ConocoPhillips, are interested in the potential oil resources off Jan Mayen island in the Arctic, the Norwegian Petroleum Directorate said on Wednesday.
Isolated Mashco-Piro Indians appear in Peru LIMA, Peru (AP) — Members of an Indian tribe that has long lived in voluntary isolation in Peru's southeastern Amazon attempted to make contact with outsiders for a second time since 2011, leading to a tense standoff at a river hamlet.
Authorities are unsure what provoked the three-day encounter but say the Mashco-Piro may be upset by illegal logging in their territory as well as drug smugglers who pass through. Oil and gas exploration also affects the region.
TransCanada says Keystone XL’s southern leg over 90% complete TransCanada Corp said on Tuesday its 700,000 barrel per day Gulf Coast pipeline project is now over 90 percent complete and the company expects the line to be in service by the end of 2013.
TransCanada spokesman Shawn Howard said testing and commissioning activities were underway on the line which runs from Cushing, Oklahoma, to Nederland, Texas, and is the southern leg of the controversial Keystone XL project.
BP puts Louisiana justice on trial BP’s increasingly bad-tempered spat with the U.S. federal court, claims administrators and legal community in New Orleans over oil-spill compensation payments suggests the company has given up trying to win the case locally.
Instead, BP seems to be focused on getting it before a regional or national tribunal as quickly as possible in the hope of a more sympathetic hearing.
Gulf Spill Sampling Questioned An analysis of water, sediment and seafood samples taken in 2010 during and after the oil spill in the Gulf of Mexico has found higher contamination levels in some cases than previous studies by federal agencies did, casting doubt on some of the earlier sampling methods.
Let N.Y. take lead infrack ban While claiming that the gas currently being fracked will lead to "energy independence" for the U.S., the reality is that Obama stands ready to approve building enormous liquefied natural gas export facilities on our coasts to ship the gas overseas to China and Europe, where it can bring five times the price. For many of us who supported the president, it is devastating to watch him lead us down this destructive path instead of aggressively building a renewable energy infrastructure and economy.
California Considers If PG&E Penalty Is Worth Bankruptcy California regulators must weigh whether a $2.25 billion penalty for safety lapses is worth potentially pushing PG&E Corp., the state’s largest utility, into bankruptcy for the second time in 12 years.
PG&E expects the California Public Utilities Commission to decide by the end of this year on a punishment for a September 2010 natural gas pipeline explosion that killed eight people. Imposing the staff’s proposed penalty may force the company into bankruptcy if it can’t sell enough shares to pay for it, Chairman and Chief Executive Officer Tony Earley said in an interview yesterday at Bloomberg headquarters in New York.
Japan's nuclear crisis deepens, China expresses 'shock (Reuters) - Japan's nuclear crisis escalated to its worst level since a massive earthquake and tsunami crippled the Fukushima plant more than two years ago, with the country's nuclear watchdog saying it feared more storage tanks were leaking contaminated water.
The U.N.'s International Atomic Energy Agency (IAEA) said on Wednesday it viewed the situation at Fukushima "seriously" and was ready to help if called upon, while nearby China said it was "shocked" to hear contaminated water was still leaking from the plant, and urged Japan to provide information "in a timely, thorough and accurate way".
Japan Watchdog as Tepco Doubter Warns of More Leaks at Fukushima Japan’s nuclear watchdog ratcheted up concern about more leaks of highly radioactive water from hundreds of storage tanks at the Fukushima atomic plant, after today raising the severity ranking of a spill this week.
The leak of 300 tons of water from a storage tank on Aug. 19 was ranked as a “serious incident,” Japan’s Nuclear Regulation Authority said at a meeting today.
Tepco caused suicide, wife tells court A lawsuit opened Wednesday against Tokyo Electric Power Co., with a Filipino woman from Fukushima Prefecture seeking about ¥126 million in damages over the death of her Japanese husband, who committed suicide when his business faltered after the Fukushima nuclear crisis started.
Coming Full Circle in Energy, to Nuclear While nuclear power also ranked high in President Carter’s speech, it proved no match against cheap coal and gas — especially after the force of American public opinion, scarred by visions of Three Mile Island and Ukraine’s Chernobyl disaster, contributed to delays and regulatory hurdles that made building a new nuclear power plant prohibitively more expensive.
Today, the world is staring at a similar inflection point in energy policy. Glowing wood fires are now understood to be a problem, spewing heat-trapping carbon dioxide into the atmosphere. Most scientists see coal — what James Schlesinger, the nation’s first energy secretary, called America’s “black hope” — as one of the biggest threats to the world’s climate.
But even as the consensus among experts builds that coal and other fossil fuels must be sharply reduced and eventually removed from the energy matrix, there is no agreement on what sources of energy could feasibly take their place, and how to get from here to there.
Time to Stop Stalling on Nuclear Waste A federal appeals court has given the Nuclear Regulatory Commission a well-justified rebuke for “flouting the law” when it stopped analyzing the safety of the proposed nuclear waste site at Yucca Mountain in Nevada, some 100 miles northwest of Las Vegas. The commission engaged in some questionable maneuvers aimed at preventing the Yucca site from ever opening, thus carrying out pledges to scuttle the facility made by President Obama, while campaigning for the presidency in 2008, and Senator Harry Reid, a Democrat of Nevada and the majority leader, who has ferociously opposed the site for years.
Chart: Car-ownership costs per state Your car may drive the same no matter where you live. But the costs are different matter altogether. The price of everything from gasoline to muffler repairs varies wildly across the country. Here are the average costs of repairs, insurance premiums, gasoline and taxes and fees in all 50 states, according to Bankrate's first Car Cost Index. The costs are ranked from highest to lowest.
Ford revises C-Max mileage claims, offers rebates to owners Ford of Canada will revise 2013 fuel consumption labels for its C-Max hybrid crossover, after Ford’s recent testing indicated that the gas-electric hybrid didn’t achieve its stated figures; the company will also compensate Canadian C-Max owners up to $895.
Tesla: Our crash test score is better than perfect NEW YORK (CNNMoney) - The Tesla Motors Model S electric car recently earned the highest possible rating of five stars in government crash tests.
But that announcement wasn't good enough for the image-conscious company and its charismatic founder, Elon Musk.
In fact, Tesla said Monday -- 11 days after the test results were announced -- that the Model S earned the highest crash test scores of any car ever tested.
A Gasoline-Powered Tesla Tesla could sell many thousands of its cars, but based on the trend of demand for electric cars, the company will need to add a gasoline-powered engine.
Vestas Replaces CEO With Runevad as Losses Widen Vestas Wind Systems A/S, the Danish turbine maker that’s been unprofitable for two years, replaced its chief executive officer after a worse-than-expected loss.
Anders Runevad, from Ericsson AB, will take over on Sept. 1 from Ditlev Engel, who has been at Vestas since 2005, the turbine maker said. Its two-year turnaround program “continues according to plan” even as second-quarter margins narrowed. Vestas rose the most in three months in Copenhagen trading.
With Proposed Rail Expansion, Northwest Confronts Its Clean Image SPOKANE, Wash. — The Pacific Northwest’s sense of itself can sometimes seem green to the point of parody: a medium-roast blend of piney peaks and urban cool, populated by residents who look descended from lumberjacks or fishermen.
Now, plans by the energy industry to move increasing amounts of coal and oil through the region by rail, bound for Asia, are pulling at all the threads of that self-portrait.
Your 12-Hour Road Trip Would Have Taken Six Weeks in 1800 These maps, published in 1932 in the Atlas of the Historical Geography of the United States and available through the David Rumsey Historical Map Collection, illustrate how arduous travel was in the country’s early history. In 1800, a journey from New York to Chicago would have taken an intrepid traveler roughly six weeks; travel times beyond the Mississippi River aren’t even charted. Three decades later, the trip dropped to three weeks in length and by the mid-19th century, the New York–Chicago journey via railroad took two days. And the introduction of regional airlines in the 1920s made it possible to travel 1,000 or more miles in a single day.
Baa! O'Hare turns to goats to clear airfield brush O'Hare is one of the largest airports in the world and takes its environmental initiatives to serious and sometimes quirky heights. It has acres of green roofs, including one atop an air traffic control facility, to reduce storm water runoff and lower the urban heat island effect of the airport's massive concrete expanse. The airport has even turned over a wooded patch of land to 1 million bees living in 28 beehives that produce honey sold in the terminals and help replenish declining bee populations.
Green in a red state: North Dakota's only Sierra Club staffer North Dakota's only Sierra Club staffer, Wayde Schafer, and his children stood atop a towering butte two decades ago and watched in the distance as a nodding donkey pump sucked oil from underground in an otherwise untouched area of western North Dakota's Badlands.
For Schafer, the lone oil well near Theodore Roosevelt National Park marked the decline of North Dakota's wide-open spaces and its clean water, air and land. And it was then that Schafer — a piano tuner by trade — pursued a path in professional environmentalism.
Europe Set to Impose Sanctions on Faroe Islands Over Herring PARIS — The European Commission said on Tuesday that it was enacting tough trade sanctions against the Faroe Islands after the tiny North Atlantic territory unilaterally increased its herring quota.
The European fisheries commissioner, Maria Damanaki, said in a statement that the European Union was banning the import of herring and mackerel caught in waters under Faroese control, as well as products made from those fish, which make up the greatest part of the territory’s exports. In addition, Faroese vessels will be prohibited from unloading their herring and mackerel catches at European Union ports.
Looming Helium Shortage Raises Alarms The United States is the global leader in helium production, producing about 75 percent of the world's helium. About half of that is stored outside Amarillo, Texas, in the country's Federal Helium Reserve, a vast subterranean complex of storage reservoirs and pipelines that extend to natural-gas fields as far away as Kansas.
But the looming helium shortage is actually the government's fault, according to Science magazine. The U.S. Bureau of Land Management (BLM), which manages the Federal Helium Reserve, sells off helium at below-market rates, encouraging waste and discouraging the development of new sources.
Climate Disinformation Continues to Harm U.S. Communities Scientists already see that people are suffering from the heat-trapping emissions in the atmosphere. But when I talk to people about this, many don't always accept the science. It's likely because Americans have heard so many conflicting messages about climate change online or in the media. That's no mistake. The fossil fuel industry borrowed a political playbook from the tobacco industry before them: when scientists discover that your products are risky, attack the science.
Coal Foe Named to FERC Is Latest Obama Pick Drawing Ire President Barack Obama’s nominee to head a little-known energy commission has become the latest appointee drawn into the contentious debate over climate change.
The nomination of Ron Binz to be chairman of the U.S. Federal Energy Regulatory Commission has sparked enough opposition that environmentalists have hired a public-relations firm to aid his Senate confirmation. Binz has drawn the ire of coal-industry interests for advocating policies that mining companies said encouraged the conversion of power plants to natural gas when he served as Colorado’s top utility regulator.
Coastal flooding could cost cities $60 billion by 2050, study says Coastal flooding could cost big cities more than $60 billion a year by mid-century, with losses jumping even more dramatically if nothing is done to counter rising sea levels and subsiding land, a new study has found.
A team of researchers analyzed data on flood exposure in 136 of the world’s largest coastal cities to project steep increases in economic losses, from an estimated $6 billion a year in 2005 to $52 billion by 2050 based on changes in population, economic growth and urbanization.
The Changing Climate For Flood Insurance On July 6, 2012, President Obama signed into law the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters), putting in place long-overdue reforms. Among the most important reforms is the phasing-out of certain subsidies that flood-prone properties have received for decades, properties that are increasingly at risk due to rising sea levels and the greater flooding along U.S. rivers thanks to a rapidly warming climate.
Understandably, there is pushback from some who may pay more for flood insurance, which is provided and generously subsidized through the federal government's National Flood Insurance Program (NFIP). But it's important to understand the impact of those subsidies, the shortcomings of the NFIP in general, and why climate change makes it more important than ever to make substantial reforms.
Climate Panel Cites Near Certainty on Warming An international panel of scientists has found with near certainty that human activity is the cause of most of the temperature increases of recent decades, and warns that sea levels could conceivably rise by more than three feet by the end of the century if emissions continue at a runaway pace.
The scientists, whose findings are reported in a draft summary of the next big United Nations climate report, largely dismiss a recent slowdown in the pace of warming, which is often cited by climate change doubters, attributing it most likely to short-term factors.
The report emphasizes that the basic facts about future climate change are more established than ever, justifying the rise in global concern. It also reiterates that the consequences of escalating emissions are likely to be profound.
There are 4 obvious avenues open for dealing with peaking conventional oil production:
- Find more conventional oil
- Exploit unconventional oil sources
- Become more efficient in our use of oil
- Switch to alternatives
Over the years a lot of peak oil analysis has tended to focus on how far the first item can be pushed and what could happen once the limit is reached, with short shrift being given to the other 3 avenues (unless "powerdown" counts as "more efficient use of oil") - and even the amount of conventional oil available being somewhat underestimated (Iraq being the example I always used though as Euan pointed out recently - Brazil, West Africa, East Africa and Norway have all seen significant new discoveries in recent years).
The ability of the oil industry to expand unconventional oil production (the shale oil boom being the obvious example though production of tar sands and heavy oil deposits are also increasing) has been the key factor in pushing the date of the peak out further into the future (I liked Stuart Staniford's quip that this could possibly be characterised as a "frenzied scraping of the bottom of the barrel"). The dawning of the "gas age" has also kept fossil fuels in the picture for time being, with substantial unexploited conventional natural gas reserves being developed and unconventional gas production growing strongly.
While these developments have thus far dashed the hopes of the doomer community the fact remains that even if the whole world was made of oil, there would still be a finite supply of it - and thus at some point we will need to transition to alternative sources of energy, assuming the temperature of the planet hasn't risen to a point that makes it uninhabitable in the meantime. It's this transition to alternative energy which captured most of my attention when writing - and thus the one which I'll make the topic of this final post.
Solutions to the problem of peak oil (and many of the other Limits to Growth can be divided into 3 groups :
- Renewable energy - solar power, wind power, geothermal power, hydro power, ocean energy and biomass derived power (including biofuels)
- Distribution of renewable energy - energy storage and the electricity grid
- Adopting alternatives to oil and other fossil fuels - electric transport, bioplastic, alternatives to fossil fuel based fertiliser and new models for manufacturing, construction and agriculture
The graphic above shows the energy available from renewable energy sources annually compared to global energy consumption. The numbers are intended to give a rough idea of relative scale - for any given energy source a wide range of estimates can be found in the literature so the numbers are indicative.
These numbers in some ways understate the amount of energy potentially available (ignoring solar power potential at sea or in space, for example, or wind power at high altitudes or far offshore, or geothermal power deep below the surface of the earth) but still serve the demonstrate that the renewable energy available to us is orders of magnitude larger than our current global energy consumption.
The contribution made by renewable energy to our energy needs is expected to exceed that made by gas (and double that made by nuclear power) by 2016, though progress needs to be accelerated if we wish to create a sustainable energy system.
Solar power is the largest energy source available to us, dwarfing all other sources - renewable and non-renewable. Approximately 36,000 Terawatts of power could be captured by land based solar power generation - compared to current global energy use of around 16 TW. As a result, most of the plans floated for shifting to 100% renewable energy (examples include proposals by Mark Jacobson and Stuart Staniford and local plans for countries like Germany and Australia) rely primarily on solar power.
Solar power is not only the largest energy source available to us but it is also the fastest growing energy source, with solar power generation increasing by over 58% in 2012.
There are a number of options for harnessing solar power - power generation using solar photovoltaic (PV) cells and solar thermal arrays along with passive solar techniques such as solar hot water heaters.
I have been of the view that solar thermal power generation (also known as concentrating solar power or CSP) would become our most important source of power in the longer term. This view was based on a number of advantages that solar thermal possesses - it does not require rare or expensive materials (enabling it to scale without hitting resource limits), it can be built on (and is best suited to) arid land that has few other uses, it can incorporate energy storage (thus avoiding the intermittency issue), it is compatible with the existing centralised generation model and it can be combined with traditional sources of power generation (coal or gas) in hybrid power plants that allow an easy transition using existing connections to the electricity grid.
An area of desert around 250 km by 250 km covered with solar thermal power generation could supply all the world's current electricity demand.
To my continuing dismay, this hasn't happened yet (though it was our fastest growing energy source in 2012) - primarily due to the lack of progress in pushing down costs - the LCOE (levelised cost of energy) of solar thermal still being around twice that other renewable energy options.
I retain some hope given that solar thermal technology remains relatively immature - there was a very long gap between the original plant (SEGS) built in California in the 1980s and the next generation of plants built in Spain beginning in 2007 and the south west of the US shortly afterwards.
Construction of plants is now spreading around the globe, with plants being built in Abu Dhabi, Kuwait, Saudi Arabia, Egypt, Israel, Morocco, Algeria (though at this point the immense Desertec proposal has fallen off the radar), South Africa, India, China and Chile.
While there are encouraging signs for solar thermal power, by and large it has been eclipsed by solar PV in recent years, with solar panel prices plummeting and manufacturing capacity surging. While thin film solar has also become competitive it is traditional silicon based solar PV that has dominated after years of being dismissed as being too expensive.
Research into improving solar PV remains vibrant, with new materials and concentrating solar power techniques looking to push the cost of solar PV below that of coal or gas fired power (the holy grail of solar grid parity).
Wind power is the second largest renewable energy source available to us, with the potential supply also exceeding current global energy demand.
Wind power has also seen rapid growth over the past decade, with generation increasing by over 18% in 2012 and accounting for more than half of new renewable energy supply. In Denmark it now supplies more than 28% of electricity consumption.
Wind power is now the cheapest source of renewable energy, with the LCOE being competitive with coal or gas fired power in many locations. Thanks to the merit order effect, wind power can also help lower the cost of power paid by consumers. While wind power is now a relatively mature technology, advances in turbine size and electromagnet technology along with optimisation of wind farm sites are allowing the overall efficiency of generation to increase further.
Also like solar power, wind power is criticised for its intermittency. While geographical diversity of generation (along with diversity of energy sources and expanded grids, which will be discussed later) can help to address this, energy storage can also be built into wind turbines, a technique used in new models from GE.
Hydro power is the most mature source of renewable energy (the burning of wood aside) and still accounts for more electricity production than solar, wind, and geothermal combined - however it has a growth rate (around 3% in 2012) lower than most other renewables.
Hydro power current provides 16% if global power generation - the 4 largest power stations in the world are all hydro power projects.
Microhydro power is an alternative that is underdeveloped and often has an LCOE quoted that makes it competitive with wind power and with fossil fuels - however I've never seen any useful figures outlining the energy potential from this source (if you look at some designs you'd guess that this is something that could be deployed very widely).
Geothermal energy is unusual compared to other large renewable power sources, in that it provides "baseload" power (thus placating those suffering from the "baseload fallacy") unlike other more intermittent sources like solar, wind and ocean power. The potential supply of geothermal energy is approximately equal to current global energy demand.
The first geothermal power generation plant was constructed in 1904 in Larderello, Italy, followed by Wairakei, New Zealand in the 1950's then the Geysers in California in the 1960’s. In 2012, 24 countries operated geothermal plants for electricity production, generating around 12 GW in total.
In 2012, growth in geothermal power was less than 3%, leaving it very much a niche energy source. Geothermal power generation is currently concentrated in geologically active areas - the western US, Indonesia, The Philippines, New Zealand, Iceland, Costa Rica, El Salvador and east Africa.
The great white hope for geothermal power generation is known as "Enhanced Geothermal System" (EGS) (or sometimes Hot Dry Rock or Hot Fractured Rock) - generating power by drilling holes deep into the earth's crust to circulate water through. The energy potential for this type of geothermal energy is vast, however progress so far in terms of producing commercial power has been very disappointing.
Some early experiments were built in Switzerland but have been shut down due to concerns about earthquakes being caused by the drilling. The most promising experiment is being performed by GeoDynamics in Australia's outback - progress has been extremely slow, with numerous setbacks occurring before a 1 MW pilot plant was finally commissioned this year. On a positive note, operation of the pilot is beating expectations.
While there is a significant potential resource in ocean energy - broadly equivalent to our current energy use - the technology for exploiting all 3 forms of energy remains immature and costly. Tidal power has been commercially generated since the 1960's, with France's 240 MW "La Rance" power station only recently being eclipsed in size by a South Korean project. South Korea is looking to greatly expand tidal power production over the next 5 years and a range of projects are proposed for the UK, Australia and the United States - however it appears unlikely that we will see large scale tidal power production in the next couple of decades.
Wave power and OTEC are even less advanced, however pilot projects are at various stages of development for both of them and interest will no doubt slowly build in size over time. Another even more exotic alternative is the generation of electricity using differences in salinity between bodies of water.
Biomass, Biogas and Biofuel
Photosynthesis provides a steady stream of material that can be used for energy - with the caveat that there are limits before this impacts on our ability to produce food and maintain a healthy environment.
There are a range of ways of harnessing organic material for energy (other than the traditional approach of burning it for heat - which the REN21 (pdf) report on renewable energy notes is still the dominant use for biomass - contributing almost 7% of global energy supply) - using biomass to generate power, producing biogas which can be used for heat, power generation or for transport, producing biofuels that can replace or supplement traditional liquid fuels and for pyrolysis which can generate biodiesel, fertiliser and biochar.
Biofuels have been the subject of widespread criticism (critics citing competition with food production and low EROI) and seem unlikely to be able to replace a significant proportion of our oil consumption. Production of ethanol and biodiesel has stagnated in recent years, with production declining by 0.4% in 2012.
Biomass based power generation also has its critics, though most seem to agree that it is preferable to biofuel production. Global biomass power generation capacity was 58 GW in 2011 and is expected to grow to 86 GW by 2021. The industry seems to be suffering some headwinds, with the largest biomass power plant (Tilbury in the UK) recently being mothballed. Another large scale project in the UK (Drax still seems to be going ahead, and generation of power from waste is booming in Europe.
Biogas is the most promising of the biomass based energy generation approaches, with far fewer criticisms being leveled at it (most importantly, there is limited competition between food production and biogas production - the two are often complementary in fact - and the net energy available from biogas far exceeds that of biofuels). It can either be extracted from landfills or produced using "digesters" that process agricultural waste (or occasionally by exploiting natural sources of biogas).
The upper limits for biogas production are not clear, though some studies claim vast amounts can potentially be produced - for example, one European study said that all of Europe's gas needs could be met with biogas. Biogas power generation apparently produced about 14.5 GW in 2012.
Biogas is not only the most environmentally friendly of the biomass based energy alternatives it is also the most versatile, with the gas being able to be used for heat, power (or a mix of both - combined heat and power) or transport.
One last use for biomass is the production of biochar. Producers of biochar take dry biomass and bake it in a kiln to produce charcoal. Biochar is the term for what is left over after the energy is removed: a charcoal-based soil amendment. This process is called pyrolysis. Various gases and oils are driven off the material during the process and then used to generate energy. The charcoal is buried in the ground, sequestering the carbon that the growing plants had pulled out of the atmosphere. The end result is increased soil fertility and an energy source with negative carbon emissions.
Distribution of renewable energy
Smart Meters and Smart Grids
Renewable energy (primarily solar and wind power) is often criticised for being intermittent.
In the traditional model of electricity generation and distribution, large, centralised power stations were built with sufficient capacity to handle expected peaks in demand - with significant amounts of capacity idle during non peak parts of the day / year (and brownouts occurring if demand did happen to exceed supply). Consumers were charged a regulated price that ignored fluctuations in supply and demand - instead supply was adjusted as far as was practicable to meet demand.
Adopting a more dynamic (market based) pricing mechanism would allow energy users to have an incentive to shape their energy use to the available supply, thereby enabling fluctuations in supply to be dealt with.
The keys to making this possible are to provide electricity consumers with smart meters and the ability to alter their energy usage based on market price fluctuations. Smart grids are required for electricity distributors to create a more flexible grid incorporating a much more diverse range of power generators.
Supergrids and The Global Energy Grid
As well as making the grid more dynamic, interconnections between grids need to be expanded to enable a greater diversity of suppliers to be available across a wide region - this helps further address the issue of intermittency of supply - the sun may not be shining and the wind may not be blowing in one region however this won't be true across all regions making up a greater grid.
Proposals for extending regional grids into continent wide ones (usually by building HVDC connections between existing grids) tend to be dubbed "supergrids" - examples can be found for North America, Germany and the whole of Europe and between Europe and North Africa.
The final piece of transforming the electricity grid to distribute 100% renewable energy is building in sufficient energy storage to ensure that suppliers have the ability to react to swings in demand as well as vice versa.
Traditionally energy storage has been available in greater or lesser amounts (depending on what grid you are connected to) in the form of pumped hydro storage.
A wide range of other options have been proposed and explored over the years, ranging from Compressed air energy storage to batteries to flywheels to generating hydrogen (pumped hydro even has an ocean equivalent which is one of the more promising options).
Most battery storage being implemented today involves either lithium ion batteries or flow batteries - however further cost reductions are viewed as being necessary to enable wider availability of energy storage services.
One option receiving a lot of attention recently has been a proposal by MIT Professor Donald Sadoway to build liquid metal batteries.
Adopting alternatives to oil
While it is clear that we can replace all the energy we currently get from fossil fuels with renewable energy, the problem remains that electricity is not a direct substitute for liquid fuels - and that fossil fuels have some other important uses other than providing energy.
The most important use of liquid fuels is in transport. Increasing fuel efficiency of vehicles (around 3% per year) and substitution of natural gas for oil as a fuel for heavy vehicles has been constraining the growth of oil consumption for road transport in recent years, however this can only ever be a temporary solution - in the longer term we need to use either electricity .
Electrifying as much of the transport system as possible is the first step, with biofuels being used for those forms of transport that cannot be electrified (either liquid biofuel such as ethanol or biodiesel, or compressed biogas) such as large planes and ships.
These are providing the stepping stone to fully electric vehicles (which are already outselling plug in hybrids in the US). The journey towards fully electric cars has been a slow one with the star example so far being Tesla Motors (other promising projects such as Better Place have fallen by the wayside in recent years, though manufacturers such as Nissan are competing at the lower end of the market and a raft of car makers are building high end electric sports cars.
Three problems are holding up the transition to electric vehicles at this point - slow recharge times, "range anxiety" and the relatively high cost of electric vehicles compared to legacy internal combustion engine based vehicles. Tesla are looking to address both of the first two issues by pursuing both fast recharge technology (with various other schemes being implemented around the globe) and a battery swap system similar to that pursued by Better Place.
The IEA has set a target of 20 million electric vehicles by 2020, with further 50% increase in battery performance a key to achieving this goal, following on the 50% increase achieved in the past 3 years.
Cars aren't the only type of vehicle that requires fuel of course - heavier forms of of transport also consume oil. We are now starting to see electric trucks, electric buses and electric boats begin to appear out in the marketplace. Where heavy vehicles such as buses follow the same route on a regular basis they become candidates for recharging while in transit.
Of course, we don't have to simply substitute electric vehicles for existing liquid fuel powered ones. There is a wide range of alternatives available including:
- Walkable communities
- Cycling. Many journeys do not need to be made by car, particularly if cities are designed to enable transport by cycle (both by pedal powered bicycles and electric bikes) as well as by foot or rail transit.
- Transit oriented development
- Rail transport. Rail transport can be electrified where it isn't already and can provide both transit within cities and long distance travel as well (preferably via a high speed rail network)
- Exotic options such as Personal rapid transit and Elon Musk's proposed Hyperloop
Nearly all the plastics sold today come from petroleum, accounting for up to 5% of global petroleum consumption by some estimates. Recycled plastics are a good first step towards reducing oil consumption, however they can only be recycled two to four times, and only around 25% of plastics are actually recycled.
The sustainable alternative to traditional plastic is bioplastic. The cost of producing bioplastic has been falling thanks to improved processes, requiring lower temperatures. Combining this with the increasing cost of crude oil has made bioplastic prices competitive with regular plastics.
Bioplastic doesn't necessarily need to replace all current uses of plastic - other alternatives are materials that have been replaced by plastics in recent decades, including steel, wood, aluminum, glass, cardboard and paper.
Agriculture obviously requires transport to grow and distribute food products, however it also requires fertiliser (at least if we continue to follow the green revolution model), which is usually produced using natural gas.
This can be addressed via a range of techniques - by being more efficient with fertiliser use (which would have many environmental and health benefits), by adopting organic farming techniques, by growing food near where we live, by generating ammonia using air, water and renewable energy - or by getting to the root of the problem and enabling plants to fix nitrogen themselves.
Another way of reducing energy consumption from agriculture is to find new ways of producing food - efforts to produce artificial meat (or "cultured beef", as it is sometimes known) have the potential to reduce the amount of energy required to produce meat by 45%.
Manufacturing and Construction
Manufacturing is a major consumer of energy and raw materials. The amount of energy and other raw materials devoted to manufacturing can be reduced by optimising for recycling - in particular by adopting "cradle to cradle" design and manufacturing techniques.
The construction and ongoing operation of buildings is another major consumer of energy, with "green buildings" and energy efficient devices such as LED lighting that minimise energy consumption being an important part of our clean energy future.
The aim of this post was to demonstrate the following (or at least provide food for thought to irredeemable skeptics) - I hope you've found it interesting.
- There is more than enough renewable energy available to meet all our needs - primarily using solar and wind power - and this can be done at a reasonable cost
- The keys to shifting to renewable energy are to expand the interconnectedness of our electricity grids, to make electricity demand more dynamic (responding to changes in electricity supply / price) and to put more energy storage in place
- That we need to be aware of the areas where we use fossil fuels and transform these to use renewable energy - to electrify our transport systems, to adopt alternatives to traditional plastics and to adapt our agricultural, manufacturing and construction processes to reduce the amount of energy required and to eliminate dependencies on fossil fuels
And now I'll close with a little trip down memory lane.
A Farewell To The Oil Drum
I started blogging (at Peak Energy) about peak oil in late 2004, having become interested in the topic over a period of years. I'd first started thinking about oil depletion when working on systems for collecting and managing large volumes of oil exploration data in the mid 1990's. Not long afterward I worked for Woodside Energy at a time when their main development project was the Laminaria / Corallina floating oil production facility in the Timor sea. A few years later production from this project had dropped below 50,000 barrels per day from an early peak of 180,000 bpd. Around the same time I came across the writing of Colin Campbell and Ken Deffeyes and began to consider what the global oil depletion picture looked like (the war in Iraq and the steadily rising oil price also added to the interest factor).
2004 was the year where blogging exploded in popularity and a vast range of writers emerged from obscurity. A number of these began mentioning peak oil and a loosely knit community of bloggers quickly formed around the topic. At the time the traditional observers of the topic were mostly retired geologists from the oil industry and academia following in the footsteps of M King Hubbert (such as Jean Laherrerre, Walter Youngquist and Ali Samsam Bakhtiari as well as Campbell and Deffeyes), along with some writers such as Richard Heinberg and a vibrant (albeit wildly pessimistic) online community of neo-malthusians hanging out at forums such as the "Running On Empty" groups, "Energy Resources" and "Alas Babylon" - usually heavily influenced by Jay Hanson's infamous "dieoff.org" site - and various fringe websites like Mike Ruppert's "From The Wilderness" and Mark Robinowicz's "Oil Empire". There were also 2 news aggregation sites focusing on the topic that had started up - Energy Bulletin (now Resilience.org) and PeakOil.com - both of which assembled a steady stream of news on peak oil and related topics.
In 2005 The Oil Drum appeared, with Prof Goose (Kyle) and Heading Out (Dave) quickly building a large following that eclipsed that of the other sites commenting on the subject. I was pleased to be invited to join as a contributor in 2007 and spent a very enjoyable 3+ years writing for the site on a regular basis and co-editing the TOD ANZ site with Phil Hart.
After a time I found a combination of factors led me to become less active and eventually stop writing original work for TOD - in no particular order a couple of changes of job, moving house twice, getting divorced, having a couple of kids who required more of my time and a general depletion of interest caused by writing on the same broad topic for more than 5 years.
It has been disappointing to see some of the commentary about TOD's closure claiming that it indicates "fracking has killed peak oil". Personally I've been amazed TOD has lasted as long as it has, which has been a credit to the editors and staff, especially with so many contributors drifting away over the years.
If I look back to when I first started, none of the peak oil blogs around at the time are still publishing - the ones that come immediately to mind include Past Peak, Mobjectivist, Peak Energy (US), The Energy Blog, Jeff Vail's A Theory Of Power, Peak Oil Optimist, Life After The Oil Crash, Karavans and a myriad of temporary blogs created by a guy calling himself the "Flying Talking Donkey" - all of which ceased for the reasons cited by the TOD board (or due to ill health on the part of the author). This isn't a phenomenon unique to peak oil blogs - none of my favourite blogs from 2004 still exist today - the best sustainability blog of the time, WorldChanging, closed down several years ago, Bruce Sterling's "Viridian Design" did the same as did Billmon's "Whiskey Bar" and Jeff Well's "Rigorous Intuition".
So from that point of view TOD has done remarkably well to have lasted for more than 8 years.
The decision to narrow the focus of the site some years back didn't help in my view but I suspect the end result would have been the same regardless - though I tend to think allowing all of the "Limits To Growth" to be analysed may have kept the energy levels of the contributors up for longer and perhaps encouraged a wider range of contributors to participate.
10 Years After Record Blackout, is U.S. Any Better Prepared? Electricity grid operators knew hours before the Northeast power failure at 4 p.m. on August 14, 2003, that things were going badly. One called his wife, predicting accurately that he would have to work late, and another complained it was "not a good day in the neighborhood."
The largest blackout to hit North America left 50 million people without power and largely without communications, but some engineers knew that the blackout could have been prevented.
As the official report from the crisis makes clear, troubles were building up during the day with computers, communications and coordination. The August 2003 blackout culminated from control systems that were out of service, inflexible schedules at generators and a grid operator who was unable to require necessary flexibility from market-based electricity providers.
Saudi Arabia and Iraq Cut Oil Exports in June: JODI Data Saudi Arabia, the world’s largest oil exporter, shipped less crude in June and exports also slid in fellow OPEC members Iraq, Kuwait and Nigeria, according to official data.
The kingdom delivered 7.32 million barrels a day, down from 7.79 million in May, according to figures the governments filed with the Joint Organizations Data Initiative. Daily Saudi production fell by 20,000 barrels in June to 9.64 million.
WTI Crude Fluctuates as Goldman Raises Brent Forecasts on Supply West Texas Intermediate oil swung between gains and losses near a two-week high. Goldman Sachs Group Inc. raised its price forecasts for Brent, citing supply disruptions in Libya and Iraq.
Futures fluctuated in New York after capping the longest rising streak since April last week as unrest in Egypt fanned concern that Middle East shipments may be at risk. Defense Minister Abdelfatah al-Seesi said yesterday the military won’t allow the country to be destroyed after a week of violence left hundreds dead. Global oil inventories have “tightened substantially,” according to Goldman Sachs. U.S. refinery rates fell in the week to Aug. 9, a fourth weekly drop.
“Brent is still supported by supply disruptions and geopolitics,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an e-mail. The drop in U.S. refinery runs shows “summer demand is easing,” he said.
Militants kill 25 Egyptian policemen execution-style CAIRO — At least 25 policemen were killed Monday when assailants ambushed two mini-buses carrying security personnel in Egypt's North Sinai Peninsula, which shares a border with Israel and the Gaza Strip and has been a restive center for militant activity.
The attack is among the deadliest in the peninsula since the 2011 overthrow of former president Hosni Mubarak and part of a larger backlash against the state over what militants view as a slew of injustices.
Yemen Says 18 Foreign Oil Firms Qualified to Bid for 20 Blocks ADEN, Aug 18 (Reuters) - Yemen has allowed 18 international oil firms to bid for 20 onshore and offshore blocks in the sixth auction issued by the Oil Ministry, the state news agency Saba said on Sunday.
OMV Pays Record $2.65 Billion for Statoil North Sea Oil, Gas OMV AG, the biggest central European energy company, paid $2.65 billion to Statoil ASA (STL) in its largest deal on record for stakes in four North Sea oil and gas fields as it seeks stable output after disruptions in Libya and Yemen.
The deal includes 24 percent of Statoil’s Gudrun and 19 percent of its Gullfaks field, and options on 11 exploration licenses, the companies said today in separate statements. Statoil seeks to free up cash to invest in new developments.
Exclusive: Indonesia oil regulator suspends energy tenders amid graft scandal JAKARTA (Reuters) - Indonesia's energy regulator has suspended all oil, condensate and natural gas sell tenders as it reviews internal procedures after its chairman was caught taking an alleged bribe from an oil trader last week, an agency official said on Monday.
The suspension is the first evidence that the graft scandal engulfing SKKMigas is starting to impact day to day operations for Indonesia's huge oil and gas industry.
Fracking live: latest news as UK protests spread -Protests continue in Balcombe
-Cuadrilla’s offices in Lichfield shut down
-Activists unveil banner outside Cuadrilla PR firm Bell Pottinger
Emirates powers ahead with the nuclear dream As Japan continues to struggle to contain radioactive water leaking out of its Fukushima nuclear plant following the 2011 meltdown, confidence in atomic energy across much of the world is at a low ebb.
The UAE, however, is among the few countries bucking the trend as it advances its bid to become the first Arab nation to safely harness atomic energy for peaceful means on a commercial scale.
Nuclear reactor building in the United States stagnates as costs clog the machine "The only reason the share of energy produced by nuclear power over the last 20 years is that a few reactors have been decommissioned and no new ones have been built while other [energy] generation sources have grown," says Gerry Runte, the managing director of Worthington Sawtelle, an energy-focused consultancy.
"Proliferation of reactor designs and the nuclear regulatory review process exacerbated the cost equation," he adds. "Nuclear power plant construction is not very efficient in competitive markets, especially in the US, even with government support and subsidy."
Fukushima and Chernobyl haunt atomic future In the long shadows of Chernobyl and Fukushima lurks lingering uncertainty over the global nuclear energy sector as arguments rage about safety and cost-effectiveness.
Europe has been severely affected by a reluctance to invest as concerns grow about the reliability of some nuclear plants and the hefty costs of construction, operation and waste disposal.
Trash Into Gas, Efficiently? An Army Test May Tell The centerpiece, a waste gasifier that’s about the size of a shower stall, is essentially a modified blast furnace. A chemical reaction inside the gasifier heats any kind of trash — whether banana peels, used syringes, old iPods, even raw sewage — to extreme temperatures without combustion. The output includes hydrogen and synthetic natural gas that can be burned to generate electricity or made into ethanol or diesel fuel. The FastOx is now being prepared for delivery to Sierra Energy’s first customer: the United States Army.
US fuel retailers call for lower biofuel mandate The US is in the grips of a biofuel dispute, as the American Petroleum Institute (API) calls for a halt to a federal biofuel mandate increase for 2014, expressing concern that the policy could cause serious economic problems.
Source of Boy's Mysterious Lead Poisoning Was in an Unlikely Place The pellets likely came from the geese the boy’s family regularly hunted and ate, they later told the doctors. The boy and his siblings said they had been eating the pellets as part of a game the played, to make the pellets disappear.
..."One important question to ask is, why not use copper pellets?" Zardawi said. The pellets used to kill the birds usually stay inside the animal, and the lead can be dangerous to other animals and to whoever eats the meat. The whole family had high levels of lead, he said.
Bare Trees Are a Lingering Sign of Hurricane Sandy’s High Toll In storm-damaged neighborhoods throughout the city, where homes have been repaired, furnishings have been replaced and millions have been spent on recovery, another toll of Hurricane Sandy is becoming starkly clear. Trees, plants and shrubs are dying by the thousands.
We Need a War on Coal Worldwide, the poor leave a very small carbon footprint, but they will suffer the most from climate change. Many live in hot places that are getting even hotter, and hundreds of millions of them are subsistence farmers who depend on rainfall to grow their crops. Rainfall patterns will vary, and the Asian monsoon will become less reliable. Those who live on this planet in future centuries will live in a hotter world, with higher sea levels, less arable land, and more extreme hurricanes, droughts, and floods.
In these circumstances, to develop new coal projects is unethical, and to invest in them is to be complicit in this unethical activity. While this applies, to some extent, to all fossil fuels, the best way to begin to change our behavior is by reducing coal consumption. Replacing coal with natural gas does reduce greenhouse-gas emissions, even if natural gas itself is not sustainable in the long term. Right now, ending investment in the coal industry is the right thing to do.
China's shift may mean coal's days are numbered China's renewal of its carbon reduction targets, as well as reports that it is clamping down on coal production, has led analysts to turn bearish on the outlook for coal, claiming that peak demand for the fossil-fuel could be behind us.
Brazil And Germany Help Poor Communities To Become More Resilient To Natural Disasters DHAKA – More than 10,000 people in the poorest and most disaster-prone areas of Bangladesh will be able to participate in training that will help them, their families and communities become more resilient to natural disasters and the effects of climate change, thanks to a contribution of 895 metric tons of rice (valued at US$430,000 / BDT3.3 crore) from the Federative Republic of Brazil to the United Nations World Food Programme (WFP).
Programme participants, 70 percent of whom are women, will receive 22.5 kg of rice and BDT650 in cash per month in exchange for the time and effort invested in training sessions on disaster preparedness and response, hygiene, sanitation and nutrition.
Old permafrost carbon released Using indicator molecules, a team of researchers headed by ETH Zurich demonstrates that carbon stored in the Arctic permafrost is being mobilised in Eurasian river basins.
Increased flooding may cost the world $1 trillion by 2050 Flood damage in the world's major coastal cities may top $1 trillion a year by 2050 due to rising seas and subsiding land, according to a new study.
The startling figure is "not a forecast or a prediction," but rather a means to "show that not to adapt and not to improve protection is impossible," Stéphane Hallegatte, a senior economist with the World Bank in Washington, D.C., and the study's lead author, told NBC News. "We have to do something."
Task force: Coasts should prepare for rising seas NEW YORK (AP) -- A presidential task force charged with developing a strategy for rebuilding areas damaged by Superstorm Sandy has issued a report recommending 69 policy initiatives, most focused on a simple warning: Plan for future storms in an age of climate change and rising sea levels.
The report released Monday by the Hurricane Sandy Rebuilding Task Force says coastal communities should assume floods are going to happen more frequently and realize that spending more now on protective measures could save money later. It calls for development of a more advanced electrical grid less likely to be crippled in a crisis, and the creation of better planning tools and standards for communities rebuilding storm-damaged areas.
Since 2006, I've been tracking a set of oil production forecasts
and trying to see how they performed over time. Comparing oil supply forecasts
is not an easy task
because of the many different assumptions, baselines, and fuel categories
included. Also, most of them deal with production capacity which is
almost impossible to track as we can only observe delivered supply. Since the 80s, oil
production has pretty much followed population growth;
using a ratio value of 4 barrels/person/year, one can accurately predict
supply level for crude oil plus NGL (C+C+NGL) with an accuracy of +/- 2
Mbpd. This naive model will constitute my Null hypothesis (or model M0)
supply is not being constrained. Consequently, what could constitute a
kind of "peak oil signal" would be a statistically
significant deviation (I would be happy with only 2 sigmas) from the
model M0. As we can see on the figure below, crude oil and NGL has not
deviated significantly from M0. However, if we remove the contribution
from Canadian tar sands and tight oil (shale oil), we can see that the
starts to be statistically significant.
Hypothetical peak oil signal for C+C+NGL. Light gray bands indicate recessions. The dotted black curve is for C+C+NGL, the dotted red curve excludes tight oil and the magenta curve excludes Canadian tar sands. The continuous red line is the statistical significance corresponding to the average peak oil scenario.
- mbpd= Million of barrels per day
- Gb= Billion of barrels (109)
- Tb= Trillion of barrels (1012)
- NGPL= Natural Gas Plant Liquids
- CO=C+C= Crude Oil + Lease Condensate
- NGL= Natural Gas Liquids (lease condensate + NGPL)
- URR= Ultimate Recoverable Resource
Data sources for the production numbers:
- Production data from BP Statistical Review of World Energy (Crude oil + NGL).
- EIA data (monthly and annual productions up to March 2009) for crude oil and lease condensate (noted CO) on which I added the NGPL production (noted CO+NGL).
For the last two years, production has grown significantly and production records have been broken on a monthly basis, however, one can see that "conventional" crude oil is on a slightly downward plateau since 2005.
Fig 1.- World production (EIA data). Blue lines and pentagrams are indicating monthly maximum. Monthly data for CO from the EIA. Annual data for NGPL and Other Liquids from 1980 to 2001 have been upsampled to get monthly estimates. Business as Usual
- EIA's International Energy Outlook 2006, reference case (Table E4, World Oil Production by Region and Country, Reference Case).
- IEA total liquid demand forecast for 2006 and 2007 (Table1.xls).
- IEA World Energy Outlook 2008, see post here for details.
- IEA World Energy Outlook 2006: forecasts for All liquids, CO+NGL and Crude Oil (Table 3.2, p. 94).
- IEA World Energy Outlook 2005: forecast for All liquids (Table 3.5).
- IEA World Energy Outlook 2004: forecast for All liquids (Table 2.4).
- A simple demographic model based on the observation that the oil produced per capita has been roughly constant for the last 26 years around 4.45 barrels/capita/year (Crude Oil + NGL). The world population forecast employed is the UN 2004 Revision Population Database (medium variant).
- CERA forecasts for conventional oil (Crude Oil + Condensate?) and all liquids, believed to be productive capacities (i.e. actual production + spare capacity). The numbers have been derived from Figure 1 in Dave's response to CERA.
Fig 2.- Production forecasts assuming no visible peak.
PeakOilers: Bottom-Up Analysis
- Chris Skrebowski's megaprojects database (see discussion here).
- The ASPO forecast from April newsletter (#76): I took the production numbers for 2000, 2005, 2010, 2015 and 2050 and then interpolated the data (spline) for the missing years. I added the previous forecast issued one year and two years ago (newsletter #58 and #46 respectively).
- Rembrandt H. E. M. Koppelaar (Oil Supply Analysis 2006 - 2007): "Between 2006 and 2010 nearly 25 mbpd of new production is expected to come on-stream leading to a production (all liquids) level of 93-94 mbpd (91 mbpd for CO+NGL) in 2010 with the incorporation of a decline rate of 4% over present day production".
- Koppelaar Oil Production Outlook 2005-2040 - Foundation Peak Oil Netherlands (November 2005 Edition).
- The WOCAP model from Samsam Bakhtiari (2003). The forecast is for crude oil plus NGL.
- Forecast by Michael Smith (was at the Energy Institute, now works for EnergyFiles) for CO+NGL, the data have been taken from this chart in this presentation (The Future for Global Oil Supply (1641Kb), November 2006.).
- PhD thesis of Frederik Robelius (2007): Giant Oil Fields - The Highway to Oil: Giant Oil Fields and their Importance for Future Oil Production. The forecasts (low and high) are derived from this chart.
- Forecast by TOD's contributor Ace, details can be found in this post.
- The forecast by Duncan and Youngquist made in 1999, see also this post by Euan Mearns.
Fig 3.- Forecasts by PeakOilers based on bottom-up methodologies.
PeakOilers: Curve Fitting The following results are based on a linear or non-linear fit of a parametric curve (most often a Logistic curve) directly on the observed production profile:
- Professor Kenneth S. Deffeyes forecast (Beyond Oil: The View From Hubbert's Peak): Logistic curve fit applied on crude oil only (plus condensate and probably excluding tar sand production) with URR= 2013 Gb and peak date around November 24th, 2005.
- Jean Lahèrrere (2005): Peak oil and other peaks, presentation to the CERN meeting, 2005.
- Jean Lahèrrere (2006): When will oil production decline significantly? European Geosciences Union, Vienna, 2006.
- Logistic curves derived from the application of Hubbert Linearization technique by Stuart Staniford (see this post for details).
- Results of the Loglet analysis.
- The Generalized Bass Model (GBM) proposed by Prof. Renato Guseo, I used his most recent paper (GUSEO, R. et al. (2006): World Oil Depletion Models: Price Effects Compared with Strategic or Technological Interventions; Technological Forecasting and Social Change, (in press).). The GBM is a beautiful model that has been applied in finance and marketing science (see here for some background). The estimation in Guseo's article was based on BP data from 2004 (CO+NGL).
- The so-called shock model proposed by TOD's poster WebHubbleTelescope . You can find a description of his approach on his blog here as well as a review on TOD. The current estimate was done in 2005 based on BP's data (CO+NGL).
- The Hybrid Shock Model is a variant of the shock model described here. The forecast is based on EIA data (up to 2006) for crude oil + condensate, the ASPO backdated disovery curve and assumes no reserve growth and declining new discoveries.
Fig 4.- Forecasts by PeakOilers using curve fitting methodologies. Forecast Performance The forecast performances were evaluated using the Mean Absolute Scaled Error (MASE) proposed by Hyndman and Koehler . A good forecast will have a MASE value less than 1 (i.e. better performance than a simple naive forecast). We can notice that few MASE curves are decreasing with time indicating that their predicted values are getting less accurate further in time. To be fair, forecasts should be evaluated on production levels excluding tight oil as most of them were not considering this marginal source of supply.
Fig. 5. - MASE values as a function of the forecast horizon. Year 1 is the baseline year when the forecast was issued.
Forecast Date 2006 2008 2010 2013 2015 MASE2 Peak Date Peak Value All Liquids Observed (All Liquids)
84.66 85.49 86.71 89.02 NA
2013-04 89.84 IEA (WEO) 2004 83.74 87.08 90.40 95.38 98.69 1.64 2030 121.30 IEA (WEO) 2005 85.85 89.35 92.50 96.62 99.11 2.33 2030 115.40 Koppelaar 2005 85.78 87.60 89.21 89.21 87.98 0.87 2011 89.58 Lahèrrere 2005 84.47 85.87 86.96 87.76 87.77 0.41 2014 87.84 EIA (IEO) 2006 84.50 88.23 91.60 95.76 98.30 2.09 2030 118.00 IEA (WEO) 2006 85.10 88.17 91.30 96.25 99.30 2.11 2030 116.30 CERA_1 2006 89.52 93.75 97.24 101.54 104.54 4.87 2035 130.00 Lahèrrere 2006 84.82 87.02 88.93 91.29 92.27 0.97 2018 92.99 Smith 2006 87.77 94.38 98.94 99.74 98.56 4.80 2012-05 99.83 IEA (WEO) 2008 83.15 85.51 88.15 92.13 94.40 0.94 2030 106.40 Crude Oil + NGL Observed (EIA)
81.32 81.63 82.43 84.73 NA
2013-04 85.35 Ducan & Youngquist 1999 83.93 83.55 81.65 76.82 73.47 2.23 2007-01 83.95 Population based 2004 79.73 81.58 83.42 86.19 88.01 0.68 2050 110.64 GBM 2003 76.27 76.20 75.30 71.84 67.79 2.96 2007-05 76.34 Bakhtiari 2005 80.89 80.24 77.64 73.41 69.51 2.04 2006 80.89 ASPO-46 2004 80.95 80.59 80.00 77.13 73.77 1.11 2005 81.00 ASPO-58 2005 82.03 84.05 85.00 82.60 79.18 0.95 2010 85.00 Staniford (High) 2005 77.92 78.63 79.01 78.96 78.51 1.73 2011-10 79.08 Staniford (Med) 2005 75.94 75.91 75.52 74.27 73.00 3.23 2007-05 75.98 Staniford (Low) 2005 70.13 69.20 67.92 65.42 63.40 6.72 2002-07 70.88 IEA (WEO) 2006 81.38 83.96 86.50 90.26 92.50 1.76 2030 104.90 Smith 2006 82.81 88.27 91.95 90.97 88.60 3.50 2011-02 92.31 Loglets 2006 82.14 83.74 84.65 84.47 83.26 0.93 2012-01 84.80 ASPO-76 2006 79.00 85.06 90.00 87.72 85.00 2.26 2010 90.00 Robelius Low 2006 82.19 82.35 81.84 77.55 72.26 1.11 2007 82.50 Robelius High 2006 84.19 89.27 93.40 94.39 92.40 4.36 2012 94.54 Shock Model 2006 80.43 79.51 78.27 75.78 73.74 1.97 2003 81.17 EWG 2007 81.00 79.66 78.06 73.47 69.21 2.48 2005 81.76 IEA (WEO) 2008 79.80 81.59 83.40 85.97 87.40 0.56 2030 95.00 Crude Oil + Lease Condensate Observed (EIA)
73.43 73.65 74.04 75.76 NA
2013-04 76.35 ASPO-46 2004 72.56 71.89 71.00 67.44 63.55 1.35 2005 72.80 Deffeyes 2004 66.07 65.83 65.30 63.96 62.73 4.06 2005-12 66.08 ASPO-58 2005 73.80 75.39 76.00 73.18 69.50 0.83 2010 76.00 IEA (WEO) 2006 71.78 73.76 75.70 78.60 80.30 0.85 2030 89.10 CERA_1 2006 76.89 80.35 82.29 83.18 83.83 3.56 2038 97.58 ASPO-76 2006 72.10 75.74 78.00 75.05 72.00 1.13 2010 78.00 HSM 2007 73.56 73.40 72.82 71.15 69.53 0.93 2006 73.56 Ace 2007 73.48 72.18 66.96 61.58 58.47 2.96 2006-01 73.55 IEA (WEO) 2008 69.73 70.64 71.46 72.49 73.00 1.31 2030 75.20 Table II. Summary of all the forecasts (figures are in mbpd) as well as the last EIA estimates.1Productive capacities. 2MASE value for April 2013, the value in bold indicates the best forecast (i.e. the oldest with the lowest error).
Note the good performance of the population based model for crude
oil and NGL (line in bold).
Looking at crude oil + NGL production, we can consider two competitive models:
- M0: The oil production will continue to grow with the world population at a constant rate of 4.3 barrels per capita per year (Figure 6).
- M1: The production will fall according to the average peak oil forecast (Figure 7).
Fig 6.- Population based model (M0) for crude oil and NGL (C+C+NGL), the colored bands are 1-sigma, 1.5-sigma and 2-sigmas intervals (sigma= 1.25 million barrels per year).
Fig 7.- Average peak oil forecast (M1) for C+C+NGL calculated from 15 models that are predicting a peak before 2020 (Bakhtiari, Smith, Staniford, Loglets, Shock model, GBM, ASPO-[70,58,45], Robelius Low/High, HSM,Duncan&Youngquist). 95% of the predictions sees a production peak between 2008 and 2010 at 77.5 - 85.0 mbpd (The 95% forecast variability area in yellow is computed using a bootstrap technique). The magenta area is the 95% confidence interval for the population-based model. Click to Enlarge.
Regardless of economic parameters and the various peak oil scenarios, the M0 model has been an excellent predictor of the current supply levels within a 1-sigma interval. We can then look at the probability that the observed production deviations are occuring by chance alone (which we note Prob(Deviation|M0)=p0). It is clear that without the addition of unconventional supply such as tar sands and tight oil we would have been much closer to the average peak oil scenario and close to a 2-sigmas deviation as illustrated on Figure 8 below.
Fig. 8 - Hypothetical peak oil signal for C+C+NGL. Light gray bands indicate recessions. The dotted black curve is for C+C+NGL, the dotted red curve excludes tight oil and the magenta curve excludes Canadian tar sands. The continuous red line is the statistical significance corresponding to the average peak oil scenario (see Figure 7)
A way to further stretch this analysis is to inject the knowledge of our average peak oil scenario M1 (Figure 7). Assuming that the "no peak oil" and "peak oil" events are equiprobable (uniform prior), we can then derive posterior probabilities from the Bayes rule:
Prob(M1 | Deviation) = Prob(Deviation | M1) / (Prob(Deviation | M0) + Prob(Deviation | M1))
Assuming our average peak oil scenario as M1, the probablity of this scenario
is now around 1%, excluding unconventional sources we get to 15% (no
tight oil) and
70% (no Canadian Tar Sands).
Fig 9.- Posterior probability values for a peak oil event for C+C+NGL.
Supply and Demand Equilibrium
Supply is just one part of the equation. Demand is even harder to
predict and highly volatile. Since 2005, global fuel consumption has
strongly deviated from nominal levels by almost 10 million barrels per
day due to the persistent high price environment and lower economic
Fig 11.- Observed total liquid fuel consumption (EIA data) and nominal consumption level based on 1993-2001 period.
Since the 2009 financial crisis, growth in advanced economies has been weak. Recovery from the great recession is still ongoing and has been exceptionally long:
Fig 11.- US GDP cyclical component (src).
In their last economic outlook update, the IMF is forecasting just 3% growth for the world GDP.
In chapter 3 of the April 2011 IMF World Economic
Outlook, the IMF economists derived short term income elasticity of
energy demand values between 0.47 and 0.83 (high price environment)
which means that a 1% rise in income (global GDP) can lead to an
increase in oil demand between 0.5 and 1.0%. Therefore, given the
current global growth forecast, oil supply growth (all liquids) should
be above 2% a year and we are struggling to maintain a 1% growth.
Fig 12.- Expected oil demand growth rates based on the IMF data. The observed supply growth rate (all liquids) is a year-on-year growth rate after a 12 months moving average.
- Econ 101 works. High oil prices reduce consumption and increase marginal supply, however, with vastly different short term and long term price elasticity values.
- Most peak oil forecasts can be dismissed but none of them could have factored in contributions from marginal unconventional sources such as shale oil.
- We will see a second production peak for OECD countries of unknown duration (see chart above).
- Unconventional marginal oil supply sources have saved the day for now, however, double digit growth in tight oil production could also mean double digit decline.
- No one knows how long the tight oil boom will last or how it will spread to the rest of the world, so we are still in the dark. Forecasting future production capacity is more uncertain and difficult than ever as we cannot just track a set of Tier one giant fields. Unconventional and marginal sources of supply are now making a difference and are more scattered and difficult to track.
- Despite large investments, exceptional exploration efforts and widespread application of enhanced oil recovery techniques (EOR), supply from conventional oil has been flat since 2005 and has probably peaked (so Kenneth Deffeyes was not completely wrong).
- Peak demand? maybe, but what about peak GDP growth? there is still and output gap between actual GDP and potential GDP.
- Prices are likely to stay elevated and volatile as demand periodically hits its head on a tight supply ceiling and will continue to depress demand (others would say destroy) and constrain growth rates. On the flip side, it will help spur efficiency gains, innovation, production from marginal source of supply, alternative transportation modes, etc.
Ref: Rob J. Hyndman, Anne B. Koehler, Another look at measures of forecast accuracy, International Journal of Forecasting, Volume 22, Issue 4, October-December 2006, Pages 679-688. pdf available here.
 Helbling, T., Kang, J.S., Kumhof, M., Muir, D., Pescatori, A. and Roache, S. (2011), “Oil Scarcity, Growth, and Global Imbalances”, World Economic Outlook, April 2011, Chapter 3, International Monetary Fund.
Ok, enough with the psychedelic charting, I would like to express my gratitude to the founders of this one of a kind website (Prof. Goose and HO) as well as all the staff, contributors and all the TODers. They did a tremendous service to society by raising energy awareness, all of that as volunteers on their free time. I joined this site back in 2004 at the time peak oil was a fringe topic struggling to keep its spot between big foot and UFOs. At that time, I was completely energy illiterate and this forum opened my eyes on one of the most complex issue facing our modern world. Ultimately, it completely changed my views on our future on this planet. After 8 years, I can appreciate the ground covered since as peak oil is now routinely debated in mainstream media. TOD was never about being right or wrong on the exact timing or shape of peak oil. TOD is a wakeup call on our energy predicament. Modern civilization was built upon cheap fossil fuel and it may cause its downfall. Finally, I urge decision makers not to turn their back on energy issues. TOD is going away but not resource depletion. If I learned one thing during this journey is that we cannot be reactive on these kinds of complex issues, we must be proactive. Our dependence on fossil fuels is as strong as ever and humanity faces tremendous challenges this century especially when considering potential impacts from climate change.
Thank you and good luck to all, I'll try to post periodically on my personal blog if you want to keep in touch with me.