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Iran May Need Nuclear Power - Study

2006-12-26T10:34:00.000-08:00

WASHINGTON (Reuters) - Iran's claim to need nuclear power may be genuine, given that it could run out of oil to export as soon as eight years from now, according to an analysis published on Tuesday by the National Academy of Sciences.

The study's author, Roger Stern, a researcher at Johns Hopkins University in Maryland, said investment in Iranian oil production had been inadequate to offset oil field declines and the explosive growth in domestic demand.

"I'm not saying that Iran will have no oil in eight years," Stern said in a telephone interview. "I'm saying that they will be using all of it for themselves."

The analysis, published in the latest issue of Proceedings of the National Academy of Sciences, said the Iranian government could become "politically vulnerable" from declining exports.
Oil exports account for about 70 percent of Iranian government revenue, said Stern, of the university's department of geography and environmental engineering.

He projected that in five years, Iranian oil exports may be less than half their present level, and could drop to zero by 2015.

"It therefore seems possible that Iran's claim to need nuclear power might be genuine, an indicator of distress from anticipated export revenue shortfalls," he wrote. "If so, the Iranian regime may be more vulnerable than is presently understood."

Iran has vowed to boost its uranium enrichment drive despite new U.N. sanctions approved on Saturday aimed at rolling back a nuclear program that the West fears is a prelude to atomic weapons.

Under Secretary of State Nicholas Burns called on Japan, Europe, Russia and China to stop "business as usual" with Iran "to drive up the cost to the Iranians of essentially doing what they're doing" with uranium enrichment.

Source
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Related Posts:

The Hypocrisy of the Nuclear Deal Between the U.S. and India
Ahmadinejad: Oil Price is Lower Than Value
Iran's Oil Weapons

Blog Site Owned by LaShanda Greene.

Democrats Aim to Repeal Tax Breaks for Big Oil

2006-11-19T11:10:00.000-08:00

Washington - House Democrats are targeting billions of dollars in oil company tax breaks for quick repeal next year. A broader energy proposal that would boost alternative energy sources and conservation is expected to be put off until later.

Hot-button issues such as a tax on the oil industry's windfall profits or sharp increases in automobile fuel economy probably will not gain much ground given the narrow Democratic majorities in the House and Senate. Incoming House Speaker Nancy Pelosi, in an outline of priorities over the first 100 hours of the next Congress in January, promises to begin a move toward greater energy independence "by rolling back the multibillion dollar subsidies for Big Oil."

Yet the energy plan being assembled by Pelosi's aides for the initial round of legislation is less ambitious than her pronouncement might suggest. For the most part, the tax benefits are ones that lawmakers talked of repealing this year when Congress struggled to respond to the public outcry over soaring summer fuel prices and oil companies' huge profits.

Topping the list for repeal are:
-Tax breaks for refinery expansion and for geological studies to help oil exploration.

-A measure passed two years ago primarily to promote domestic manufacturing. It allows oil companies to take a tax credit if they chose to drill in this country instead of going abroad.

Democrats say neither tax benefit should be needed for an industry reaping large profits at today's high crude oil prices. Over 10 years, the production tax credit saves oil companies $5 billion and the refinery measure and exploration credit a total of about $1.4 billion, according to Congressional Budget Office estimates.

Other oil tax breaks probably will go unchallenged. That includes some passed by Congress only a year ago and others already targeted for repeal this year. For example, House Democrats have no plans to change a provision that allows oil companies to avoid billions of dollars in taxes by the way they calculate inventories. The Senate this year agreed to a repeal; the effort was abandoned amid House GOP opposition and an uproar from other industries that also benefit from the tax language.

House Democrats also are shying away from tampering with more than $1 billion worth of oil- and gas-related tax breaks, enacted last year. These breaks largely benefit small companies or gas utilities rather than the major oil companies now awash in cash. Nevertheless, the House and Senate are expected to push legislation early to force oil companies to renegotiate flawed offshore drilling leases that have allowed the companies to avoid paying federal royalties. The loss eventually could cost the government $10 billion, according to some congressional estimates.

Other prime targets of House and Senate Democrats include:

-Alleged price gouging. Proposals to create a federal price gouging law for gasoline and other fuels probably will move quickly.

-More incentives and mandates to expand the use of ethanol and biodiesel as a substitute for gasoline. Requiring oil companies to phase in retail pumps that deliver fuel that is 85 percent ethanol.

-Requiring power companies to produce a percentage of their electricity from renewable energy sources such as wind and solar power. Such a measure is a priority of Sen. Jeff Bingaman, D-N.M., incoming chairman of the Senate Energy and Natural Resources Committee.

-Extending energy efficiency tax credits approved by Congress last year. Most are scheduled to expire at the end of next year.

-Expanding a tax break for buyers of gas-electric hybrid cars and offering more incentives for automakers to build greater numbers of the vehicles.

Rep. John Dingell, D-Mich., who will take over as chairman of the House Energy and Commerce Committee, said he plans hearings on legislation to spur further production and distribution of ethanol and biodiesel, and promote conservation. But he suggested it will take time to produce legislation. "The process is a long one. It takes hearings, it takes fact finding," said Dingell in a telephone interview.

On the Senate side, Bingaman probably will avoid writing a single broad energy bill, preferring to push through specific legislation. Among Bingaman's other goals are new incentives to spur renewable energy development and more tax breaks for conservation. Last spring, Sen. Charles Schumer, D-N.Y., said if the country is to reduce its addiction to oil and high energy prices it needs a "crash program" to develop more alternative energy sources, dramatically increase conservation and examine "whether or not we should break up the big oil companies." Next year, Schumer assumes the No. 3 leadership position among Senate Democrats and will be one of the party's top strategists.

Source

Gas Prices Mean More Students Take Bus

2006-08-23T14:16:00.000-07:00

ATLANTA - Most weekday afternoons, Patricia
Israel waits in her front yard for the school bus to drop off her 6-year-old twin sons. The boys beg to ride the bus every day, which Israel said is fine with her. She sees it as environmentally sound transportation that reduces traffic on the streets and at the school.

It also saves money on gas for her sport utility vehicle. "We're looking at getting a hybrid," Israel said. "Every time I fill up the gas tank, it's like $75."

With gas prices hovering around $3 per gallon, more parents are sending their kids to school on the bus this fall, and school districts across the nation have noticed the increase in ridership.
"The more the prices go up, the less riders get to school on their own and they go with our buses," said Doug Geller, assistant director of transportation for the Clark County School District in Las Vegas.

In Las Vegas, ridership has risen to about 45 percent of the district's more than 320,000 students. The system opens an average of 10 new schools a year, sprinkling bus stops throughout the surrounding neighborhoods, Geller said.

In the fast-growing Phoenix suburbs, bus ridership is skyrocketing as districts grow by thousands of students each year. Gas prices help attract riders, but heavy road construction and new air-conditioning in buses have also contributed to the increase, said Dianne Bowers with Gilbert Public Schools, southeast of Phoenix.

Some schools are doing more to encourage bus riders.

Janette Shealy, a teacher in the fast-growing Atlanta suburb of Alpharetta, Ga., said her school sends letters to parents about the environmental advantages of the bus system and sponsors a "bus ridership week" each semester when bus riders get candy and prizes.

"We try to just create an awareness of the fact that car vapors impact the quality of our air — the fewer vehicles on the road the better," Shealy said. "Plus, you're never tardy when you ride the bus."

At the Atlanta school where Israel's twins attend, Principal Sidney Baker said he has noticed fewer cars waiting outside the school in the afternoon since classes started last week. He said he encourages parents to put their children on the bus because it eases traffic congestion and makes the school grounds safer during the morning drop-off and afternoon pick-up times.
While gas prices play into some parents' decisions, most are swayed by "a lot more important reasons," said Lisa Malice, education chairwoman for the Georgia PTA. Some drive their children to school to spare them a long bus ride.

"One parent told me she likes to spend a little extra time with her kids in the morning," Malice said. "When the bus is picking them up 50 minutes before school starts and dropping off half an hour before school starts, it doesn't make much sense for the kids to get up that early."

Many parents simply like the convenience of not having to fight traffic, especially parents who work far from their child's school.

"Gas really is so expensive," said Mary Lynn Jones, a stay-at-home mom who has four of her five children riding the bus to an elementary school in northern Atlanta. "It's just so much easier."

Energy Department Ready to Tap Emergency Oil

2006-08-07T10:41:00.000-07:00

We're taking a very serious look at this," said spokesman Craig Stevens, referring to the loss of nearly half of oil shipments from Alaska's North Slope because of a pipeline corrosion problem.
Stevens said the department will be in contact with BP Exploration Alaska Inc. and West Coast refiners later in Monday to assess the situation. "If there is a request for oil we'll certainly take a serious look at that," he said.

Sen. Charles Schumer D-N.Y., often a critic of the administration's energy policy, said: "This is the appropriate and right thing to do. We're glad the White House's reluctance to use the Strategic Petroleum Reserve to prevent price spikes seems to have dissipated."

The Strategic Petroleum Reserve is the nation's emergency stockpile of crude oil. It was created after the 1973 oil embargo when Arab countries halted petroleum exports to protest U.S. support for Israel. The reserve has about 700 million barrels in storage on the Gulf Coast to be used in case of a serious supply disruption. The Energy Department in the past has lent SPR oil to refineries when there were disruptions because of pipeline or other problems.

Most of Alaska's oil goes to refineries on the West Coast. It was unclear how those refineries would be supplied with oil on the Gulf Coast. However any oil put into the market to replace lost Alaska oil would tend to ease prices, market experts say. Oil prices jumped by more than $1 a barrel Monday following a production shutdown at an Alaskan oil field that accounts for about 8 percent of U.S. production. BP Exploration Alaska Inc. began shutting down oil production Sunday at Prudhoe Bay due to severe pipeline corrosion.

Once the field is shut down, in a process expected to take days, BP said oil production would be reduced by 400,000 barrels a day. BP officials said they didn't know how long the Prudhoe Bay field would be off line.

The nation's petroleum reserve was created in legislation signed by President Ford in December 1975, which made it U.S. policy to create a reserve capable of holding up to 1 billion barrels of oil as an insurance policy against future supply disruptions. Oil companies contribute to the supply in lieu of paying cash royalties for oil pumped on federally owned land.

Source

Asia Goes Nuclear to Meet Rising Energy Demands

2006-08-05T09:42:00.000-07:00

In the face of rising oil prices and chronic air pollution, Asian nations are looking to nuclear power to solve their energy problems.Reactors are being built across the region. Japan and South Korea have the most developed nuclear industries, but China and India are leading the charge with new projects.John Ritch is the director general of the World Nuclear Association.

“The two largest nuclear planned programs in the world right now are those of India and China,“ he said. “I would expect that each of those countries, by the middle of this century, will have 250 nuclear power reactors. Now that sounds like a lot, but it won’t be a very substantial portion of their electricity.“

China alone plans to build 30 reactors by 2020, up from nine now. Eight of those are under construction, with two nearing completion. The reactors are part of an ambitious government effort to rapidly expand electricity output to keep up with its booming manufacturing industry, voanews.com said. China has been moving to alternative energy sources such as wind, hydroelectric and nuclear in an effort to cut its use of coal. Pollution from coal burning plants blankets most Chinese cities. And moving coal from the mines in the north and west to the industrialized east is straining the transportation system. India has 15 reactors operating, and nine are under construction. Although nuclear power provides only about three percent of India’s electricity, the World Nuclear Association estimates that could increase to 25 percent by mid-century.Unlike China and India, which only recently began rushing to build reactors, Japan and South Korea have long relied on nuclear technology to reduce their need for foreign fuels.Japan depends on imported oil, gas and coal for about 80 percent of its energy needs, which leaves its highly industrialized economy vulnerable to market fluctuations.

Nuclear reactors account for about a third of Japan’s energy production, and the government says it plans to increase that to more than 40 percent by 2014, after adding more than 10 new reactors.South Korea is even more dependent than Japan on imported fuel--as much as 97 percent of its fossil fuel supply is imported. South Korean government reports show 20 reactors provide 40 percent of electricity production, and at least eight new reactors are planned.There are concerns, however, about this rush to go nuclear. Reactors present the risk of a radiation accident that could kill or sicken thousands of people. They also are expensive to build. Liu Changxin of the China Nuclear Society says one of the main factors in China’s nuclear plan is the need to reduce air pollution. Still, he says, it is only part of the solution.

“I don’t think nuclear power can play the most important, or even a very important role in China’s energy supply,“ he said. “Just a part of our energy policy, just one of the choices.“

Liu says that China’s energy needs are growing so rapidly that the country needs to consider all options.Greenpeace wants to see countries such as China and India explore other choices. Szeping Lo, a Greenpeace spokesman in Hong Kong, says China has taken steps to develop renewable energy sources.

“Just last November the deputy minister of energy announced that China will increase its wind energy development target from 20 gigawatts to 30 gigawatts by 2020,“ he said.

That is almost the same amount of energy China plans to produce using nuclear power. Lo opposes all uses of nuclear power because of the dangers and costs. “The nuclear industry is a dying industry. No new nuclear power plant has been built in the US in the last decade, and there’s no new nuclear power plants being built either in Western Europe, in many other countries,“ Lo said.John Ritch at the World Nuclear Association is frustrated by the opposition to nuclear technology. He says nuclear energy is clean and safe and should stand side by side with other clean energy technologies.

Bicycle and oil deals cement Chavez's ties to Iran

2006-07-30T12:10:00.000-07:00

Venezuelan President Hugo Chavez enveloped his Iranian counterpart Mahmoud Ahmadinejad in a bear hug on Sunday and the two men backed their anti-U.S. rhetoric with deals on everything from bicycles to oil.

In a typically verbose speech, robust ex-paratrooper Chavez lambasted their common enemy, Washington.

"If the U.S. empire succeeds in establishing its dominance, there will be no future for humanity. Therefore we should save humanity and end the American empire," Chavez told a crowd at the University of Tehran.

Chavez also criticized the current offensive by Israel, Iran's arch-enemy, against Lebanon as "both fascism and terrorism." This chimed with the view of Iran's president who has compared Israel's conduct to that of Adolf Hitler.

A beaming Ahmadinejad presented Chavez with the golden "High Medallion of the Islamic Republic of Iran" and slipped a blue sash around his chest.

"Mr Chavez is my brother, the brother of the whole Iranian nation and of all freedom-seeking people in the world," he said.

"He is a perpetual warrior against the dominant system, a worshipper of God and a servant of the people," he added.

Chavez and Ahmadinejad are both ex-military populists who take a hawkish price stance in the
OPEC oil cartel. They enjoy a close personal rapport.

Both countries frequently boast they are steeled for any military assault the United States may launch. Venezuelan Energy and Mines Minister Rafael Ramirez echoed the leaders' defiant attitude by threatening to cut oil exports to the United States if Washington did not drop its hostile stance toward Chavez's administration.

MORE THAN RHETORIC
But there was more than Yankee-bashing to the visit, and the Venezuelan delegation signed several Memorandums of Understanding on joint work in the oil industry and housing.
Iran and Venezuela also signed deals on jointly making bicycles, medicines and industrial moulds, and pledged to cooperate in aviation and on environmental issues, though details on all these contracts were hazy.

Iranian Oil Minister Kazem Vaziri-Hamaneh said the Iranian firm Petropars would invest $4 billion in two Venezuelan energy projects.

Petropars is already certifying some tarry crude in the Orinoco Belt and is looking to develop reserves there. It also wants to supply training and services to the Norte de Paria offshore gas field.

A planned deal for Venezuela to export gasoline to Iran was canceled. Industry Minister Alireza Tahmasbi told Reuters this was because of problems over pricing and quality.
The contract had attracted considerable interest because of confusion over whether Iran is going to cut gasoline imports from September 23.

Iranian investors have already poured $1 billion of investment into Venezuela, mainly in sectors such as energy, construction and tractor-building.

Carmaker Iran Khodro said it would start making its Samand model in Venezuela in October.
Although commercial deals are proceeding, some analysts have said that Chavez's dependence on the United States as a major buyer of his oil will probably prevent him from striking any arms deals with Tehran.

Chavez visited Moscow before Iran, and on Thursday Russia said it had sold Venezuela 77 aircraft and helicopters as part of a long-term package of arms deals worth over $3 billion.

Source

Where Does U.S. Oil Come From?

2006-06-16T20:52:00.000-07:00

Canada 18%
Mexico 15%
Saudi Arabia 12%
Nigeria 12%
Venezuela 10%
Angola 6%
Iraq 5%
Algeria 3%
Colombia 3%
Ecuador 3%
UK 2%
Norway 1%
Kuwait 2%
Equatorial Guinea 1%

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I've read a lot of articles describing the war in Iraq as a war for oil and the United State's attempt to control Middle Eastern oil, but I'm starting to rethink my support for that premise. Although relations with Saudi Arabia have been strained since 9-11, when the US enacted the Patriot Act with strict terrorist financing regulations, causing many countries to move their money outside of US banks and then tensions also arose with Saudi Arabai, from President Bush's recent speeches stating the intent to get off of oil from the Middle East. No matter how myopic the vision of the current administration may be, it just doesn't add up for me that we would start a war in Iraq to take over their oil when Iraq is such a small current and future player in the oil.

Now after looking at the above list, if we had decided to invade a few countries in Africa, then maybe that theory might make sense. Do I think our presence in Iraq is part of strategic military positioning in our backwards and juvenile thinking that we can police the rest of the world, yes. Do I think Venezuala should really be concerned about a US military threat? Yes. Do I think that in the future, the U.S. is above waging war with any and everyone for the last scraps of oil left on the planet...no. I guess I just don't think we're they're yet...and that we're missing the main point by strictly focusing on the Middle East...especially since we get our oil from many other conflict -rich areas of the world.

Kind of just looking at the numbers and thinking out loud on this one...and I haven't writtend in awhile, so hopefully some of the above made sense.

Cows Make Fuel For Biogas Train

2006-06-16T20:39:00.000-07:00

You have to tell yourself the cows are going to die anyway. Inside the abattoir at Swedish Meats in Linkoping, the cows stood patiently, occasionally nuzzling the lens of our camera. From there, it was a short walk past the white-walled butchery, down the steps to the basement where the raw material for biogas, slid greasily down a chute.

Still bubbling and burping, and carpeting you with an acrid stench, came the organs and the fat and the guts. Enough, from one cow, to get you about 4km (2.5 miles) on the train. A tanker collects the organic sludge and makes the short journey to the biogas factory, where the stinking fuel is stewed gently for a month, before the methane can be drawn off.

The world's first biogas-powered passenger train is taking its first passengers between the Swedish cities of Linkoping and Vastervik. And the biogas comes from the entrails of dead cows.
'Amanda' runs between the Swedish cities of Linkoping and VastervikThe boss of Svensk Biogas, Carl Lilliehook, is a proper, serious Swede. But his eyes twinkle at the biofuel "revolution", as he calls it. You don't have to look far beneath the number-crunching CEO to find the muesli-crunching environment-lover.

Yes, he says, the train between Linkoping and Vastervik will cost 20% more to run on methane than on the usual diesel. But the oil price is going up and up, and in any case, Swedes care about being able to pick our mushrooms and their fruit. Nor is it just trains. In Linkoping, the 65-strong bus fleet is powered by biogas. Indeed the city boasts that it was the first in the world to try out its buses on methane. The taxis, the rubbish trucks and a number of private cars also fill up at the biogas pump, housed under a dinky green corrugated iron roof.

And if methane doesn't light your fire, you can choose to have your car run on a high-grade biofuel mix. This year, Saab started selling a biopowered version of their 95 model.
Its engine will take a fuel cocktail which is up to 85% bioethanol, made, principally, from Brazilian sugar cane.

The experts regard bioethanol and biodiesel as "carbon-neutral", because they spew fewer carbon emissions, and the crops which provide them absorb greenhouse-gas causing carbon dioxide, as they grow.

Saab is now selling a biopowered version of their 95 modelThe Saab executive we spoke to said his company would like to sell the car in the UK but, for the time being, the biofuel infrastructure is not there. Bioethanol - at a 5% mix - only became available from the start of the year in Britain.

In Sweden, the attraction is not limited just to the large, green consensus. The bio-powered version of the Saab 95 costs around $1,000 (£500) more than the normal model.
But with pump prices for the E85 mix a third cheaper than normal petrol, company car tax breaks, and exemptions for parking and congestion charges, Saab reckons you get that $1,000 back within the first year.

The harsh truth is that, across Europe, transport is not pulling its weight when it comes to meeting the Kyoto targets on cutting greenhouse gas emissions. Industry is. So, to a lesser extent, are households and agriculture. But now the European Commission - the guardian of the European Union - has weighed in, demanding that transport do more. It has set binding targets for the amount of fuel use it wants taken up by bio-products by the end of this year, and by 2010.

The UK is set to fall well short of the 2% target for the end of December. The government reckons it is on course for 0.3%. Sweden is likely to be 10 times ahead, at 3%. By road and by rail, Sweden has a lot to teach the rest of us.

Related Previous Posts:
Sweden: Oil Dependence Without Additional Nuclear Power

Source

Kick the Oil Habit

2006-06-16T20:13:00.000-07:00

Check out Robert Redford's website. He's circulating a petition to encourage Big Oil (ExxonMobil, Chevron, BP, Shell, Valero, and ConocoPhillips) to offer alternative fuels on a widespread basis. I'd prefer to have Americans move toward divorcing their cards altogether...but I think is a move in the right direction. Plus, I just dig the website name. :~)

http://www.kicktheoilhabit.org/

Oil Could Top $105 in Major Supply Outage

2006-05-28T19:47:00.000-07:00

KUWAIT (Reuters) - A Goldman Sachs projection that oil prices could top $100 a barrel in the event of a major supply disruption could be conservative in the current tight market, said a senior executive with the investment bank. Other energy experts told an energy forum late on Saturday in Kuwait that global oil market fundamentals point to generally higher energy prices as demand growth outstrips new supply.

"We thought that maybe somewhere within $50 to $70 (oil price) we might get the economic damage and that it would take a major, not a minor, disruption to get to the $105 number," said Arjun Murti, Managing Director at Goldman Sachs.

"If we truly did have a major outage in a major exporting country then $105 will prove conservative," Murti added at the National Bank of Kuwait energy forum.
Murti said when Goldman Sachs issued a projected range of $50 to $105 a barrel in March 2005, actual prices hovered around $55 a barrel. Oil prices in New York and London traded above $70 Friday.

Katherine Spector, head of energy research for JP Morgan Securities, said market fundamentals point to petroleum prices reverting to a higher mean in coming years. "The world is running out of easy barrels of crude production," she said, adding that marginal costs of production are rising.

Both Spector and Murti said one factor that the oil markets will remain focused on for the rest of this year would be the U.S. hurricane season after Katrina caused big disruptions last year to refining capacity on the U.S. Gulf Coast.

Hurricanes Katrina and Rita had shown "energy markets are highly susceptible to a supply shock," Murti noted.

Spector said another severe hurricane season predicted for this year was bullish for oil and products prices as are changes to U.S. diesel and gasoline specifications this year. But she said among factors that are bearish for the market are relatively comfortable global oil inventories.
ASIAN DEMAND

Other delegates told the forum that global oil market fundamentals pointed to the possibility of higher prices given that global oil demand is robust and tends to grow every year, especially due to firm demand from China and India.

Edward Morse, executive adviser with Hess Energy Trading Co., said that between 1965 and 2004, total Asian oil demand has risen 620 percent while world oil demand was up by 158 percent.

"Asian energy demand growth, especially oil demand, has been truly extraordinary," Morse said, adding that most analysts believe incremental Asian demand growth drives the market.
On the supply side, spare capacity is gone, traditional areas of oil production are mature and areas with growth are geopolitically or demographically challenged, Murti noted.

"We believe that oil markets are in the early stages of what we are calling a multi-year 'super-spike' period," Murti added.

Murti said total non- OPEC' crude supply has grown in recent years mostly due to Russia, but excluding Russia the supply from producers that are outside the Organization of Petroleum Exporting Countries has been essentially flat in recent years.

"Effective production capacity -- that what actually can come out of the ground today -- is pretty close to zero," he said. "Our point is not that the OPEC countries are running out of oil. But the question is, are we to believe that real-time production capacity is going to grow, year in and year out, to match economic growth?."

Source

Oil Executives March on D.C.

2006-05-20T20:04:00.000-07:00

WASHINGTON, DC—More than 1,000 majority shareholders and executive officers from the nation's largest oil companies gathered in the National Mall and marched to Capitol Hill Monday in a mass demonstration for petrochemical corporations' rights and, according to several of those who attended, "to let our voices be heard at last."

Dozens of the executives, sheikhs, and oil barons who marched to demand an end to their oppression

"We're American citizens, and we demand to be part of the national dialogue," said John S. Watson, vice president of international exploration and production for Chevron Corporation, the world's second-largest oil company. "Many people in our industry think nobody in Washington cares about us, and that our opinions don't matter. We're here today to change that."

Guest speakers, including folk-singing lobbyist Anne Novotny, international drilling-rights activist Bill Marshall, and several Saudi princes, focused on the need to extend subsidies to offshore drilling efforts, grant tax breaks for the construction of new refineries, and stop oppressive environmental regulation.

But the real message of the protest was more personal: To demonstrators, the oil industry is unappreciated and even persecuted by large segments of the public who only want them for the gasoline they sell. Protesters hoisted signs reflecting this sentiment, bearing such slogans as "Enough Is Enough," "Power To The Petroleum-Producing People," "Texaco-American Pride," and "I'm Pro-Oil And I Vote."

"Politicians are supposed to work for everyone," said Red Cavaney, president of the American Petroleum Institute. "For years, they've pretended like we didn't even exist. But today, with this many people from the oil industry right here in our nation's capital, we're sending an undeniably strong message."

Oil executives traveled from as far as Irving, TX to attend the event. Some, such as Exxon Mobil chairman and CEO Rex W. Tillerson, said they were missing important board meetings and sacrificing as much as three days of vacation time just to be among their fellow oilmen.

"You can't ignore us any longer, America," a flag-draped Tillerson said. "Get used to us, because we refuse to stand in silence. From now on, the power brokers in Washington will sit up and listen."

The march, which took place just after lunchtime, was limited to a strict route, and was closely monitored by hundreds of DC police in riot gear. Authorities reported no arrests or instances of violence, even after a tense moment when some protesters chanting "Members of the board will not be ignored!" passed a security barricade and crossed Pennsylvania Avenue.

"Today is the day my American oil comrades and I stand together as one and announce that this is our country, too," said BP Global's chief financial officer, Byron Grote, who oversaw British Petroleum's acquisition of ARCO, SOHIO, Amoco, and Vastar in 2000. "None of us in international oil production are looking for special treatment. We just want a fair shake. That's what democracy is all about."

Organizers applauded the peaceful protest as a "positive first step in governmental–petrochemical coalition-building." But the systemic marginalization of one minority group—in this case, Big Oil CEOs—by those in power can make it difficult to get past feelings of bitterness and resentment, said corporate-disenfranchisement expert Jonathan Foner.

"They feel like they've just been shouting into the wilderness," Foner said. "So today, many of them were hoping that if they spoke loudly and clearly enough through their bullhorns into the wilderness, those in power would listen to them."

ConocoPhillips CEO J.J. Mulva was scheduled to deliver a speech about civil disobedience, but called it off at the last minute due to unspecified medical complications. His brother, Exxon Mobil controller P.T. Mulva, said "heartbreak" is what kept the older sibling at home.

"The oil business is a labor of love for our family, and J.J.'s been fighting for our rights for years," Mulva said. "When he heard that the marchers would not be permitted to pass the White House due to security issues, it was more than he could take. That really broke his spirit."
President Bush, vacationing at his Crawford, TX ranch, released a statement Tuesday morning expressing his respect for the protesters' right to free speech, saying America "tolerates diverse viewpoints."

"The people have a right to protest in this country, but my administration is not going to be intimidated by the opinions of an outspoken few," Bush said.

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See! I do have a sense of humor about this whole peak oil thing!! Gotta love the Onion ;~) (this is not a real news article, for those of you who are still confused.)

Source

US Oil Executive Shot Dead in Nigeria

2006-05-11T10:02:00.000-07:00

On Wednesday a gunman on a motorcycle shot dead a U.S. citizen working for Texan oil services company Baker Hughes in an apparently planned assassination. Diplomatic and oil industry sources said the killing was probably an isolated incident related to a work dispute.

Kidnapping is a fairly common method used by impoverished villages in the lawless delta, suffering neglect from their own government, to extract benefits or cash from oil companies. Port Harcourt is the largest city in the Niger Delta, which pumps all of Nigeria's oil, and several multinationals have major offices there, including Royal Dutch Shell and Agip.

The kidnapping and killing add to a rising trend of violent crime and communal unrest in the vast wetlands region, which coincides with heightened political instability in Nigeria ahead of elections next year.

Militancy is fueled by resentment among many delta inhabitants, who feel cheated out of the riches being pumped from their tribal lands. Neglect and rampant corruption have eroded trust in government, while communal rivalries and abuses by the military have fueled the rise of well-armed community militias.

They have taken advantage of the absence of law and order to engage in large-scale theft of crude oil, extortion, blackmail and kidnapping against oil companies, which rely on ill-equipped and poorly trained police and military to protect them.

MEND's (Emancipation of the Niger Delta, which has waged a campaign of attacks against the oil industry in the world's eighth largest exporter) emergence in December has raised the stakes in the delta, because it introduced a more professional military style of attack, more deadly firepower and a more focused political dimension to the militancy.

Source

Previous Posts:
Instability in Nigeria = Higher Oil Prices

Bolivia Gas Plan Causes South America Rift

2006-05-10T17:51:00.000-07:00

SAO PAULO, Brazil - It wasn't long ago that South America's leftist leaders were sharing bear-hugs and talking about forming something like the
European Union with a pipeline network to solve energy problems, a unified parliament, and a currency good from Colombia's Caribbean beaches to Argentina's frosty southern coast.

Bolivian President Evo Morales changed all that: He abruptly took over his country's 53 foreign-owned natural gas installations and installed white-helmeted military police with semiautomatic rifles to guard the continent's second-largest gas reserves.

The nationalization evokes comparisons to decades past when Latin American regimes ruled with brute military force. It also has created a serious rift between the region's center-left governments and the hard-left administrations of Morales and his mentor, the socialist Venezuelan President Hugo Chavez.

"South America is back to its unstable ways, big time," said Gary Hufbauer, a senior fellow at the Institute for International Economics in Washington, D.C.

The takeover threatens to cause energy shortages and price hikes that could seriously damage the economies of Bolivia's biggest customers, Argentina and Brazil.

The Andean community and Mercosur economic blocs appear to be falling apart as Colombia and Peru clinch free trade deals with the United States, and Paraguay and Uruguay consider similar alliances. Bolivia and Venezuela lashed back by joining with communist Cuba in a trade pact promising a socialist version of regional cooperation.

Bolivia also alleged that its gas was being diverted from Argentina to Chile, playing on old border grudges and possibly reversing a warming trend in Bolivian-Chilean relations. Argentina and Uruguay are escalating their battle over potential pollution from pulp mills on their shared river.
"Call it regional disintegration," said David Fleischer, a political scientist at the University of Brasilia. "It all converged in the months of April and May, and we don't know how it's going to play out."

These presidents have downplayed trade disputes as the growing pains of a region still focused on unification. But when Morales surrounded Bolivia's gas fields and refineries with soldiers last week, a political fracture emerged that may be hard to repair.

Bolivia's gas takeover followed months of nervous anticipation and campaign promises by Morales to secure more gas profits he said were being "looted" by foreign companies.

Source

Windfall Profit Tax: Been There, Done That

2006-05-09T09:15:00.000-07:00

If you’re like most Americans, I’m sure you’re astounded, if not enraged, by the billions and billions of profits posted by oil companies in the recent year. At the last anti-war rally I attended, I was asked to sign a few petitions, one of them being a call to tax oil company profits to reduce the effects of high oil prices on the average citizen. I refused to sign. Like I said, it’s not that I don’t recognize the profits being posted are ginormous, but I take issue with the fairness of the government taking away the profits of a business just because the business happens to be doing extremely well. I wouldn’t support measures to tax the windfall profits of a local business owner, just because local market factors increased is business tenfold. I also wouldn’t have been willing to enact a tax on citizens to help oil companies, when their profits were low in past decades. Maybe what we should really be angry at is the fact that most of us didn’t invest in oil company stock 5 years ago?

The jig is up and Americans need to feel the message (down to their pocketbooks) that our habits, and the way we waste energy and oil resources has to change. Nobody cares about oil politics and supply shortages until it directly affects us, so be thankful that so many Americans have been directly affected. It’s the only wait to shift mainstream consciousness to focus on this issue. Everyone is looking for an easy way out and of course, someone to blame, when the pointed fingers can be directed only at ourselves. Gas prices in the United State are too low in my opinion. In other countries, such as Europe, the taxes levied on oil resources result in much higher than the prices Americans have recently seen at the pump. And guess what? In many parts of Europe, they’ve reinvested that extra revenue in their public transit system and alternative energy resources, resisted high levels of surburban sprawl, maintained much of structure and city planning that existed in historical eras and they’ve never had such an extravagant love affair with gaz guzzling SUVS. You’ve all noticed that the cars in other countries tended to be amusing small…well looks who’s laughing now America! Americans need a wake up call and the shift in economic factors where demand is starting to exceed oil supplies, is just the wake up call we need.

I’m not a fan of taxing windfall profits, but I am in support of reducing the tax breaks that oil companies currently receive from the government. There’s a difference there. Tax breaks make sense to a certain extent when they are given to encourage growth in new companies/industries and when core American industries are temporarily struggling, but with the profits oil companies are posting lately, there is no sane rationale for continuing to hand over the tax dollars of hard working citizens to oil companies. That’s what Americans should be calling for, especially in a time when our budget deficit is spiraling out of control and we are looking for ways to reduce it. I’m also a favor of restructuring corporate taxation in general and not just with regards to oil companies. I believe a disproportionate weight of the tax burden is being worn by average citizens, as opposed to large multinational corporations who are in a better position to pay this tax burden and whose business model and retail prices do not reflect all of the indirect and negative social effects incurred when bringing their product to market. Put those type of petitions in front of me and I’ll sign them, but I’m not a fan of this windfall profit tax nonsense.

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Windfall Profits Tax: A Historical Perspective

In 1980 Congress enacted the WPT when it ended oil price controls. The controls were a remnant of President Richard Nixon's general wage and price freeze, implemented in 1971. While most of Nixon's price controls expired in 1973, Congress extended oil regulation through 1981. Worried over the rising cost of home heating oil as well as a general run-up in world petroleum prices, legislators decided to keep a lid on domestic oil prices.

From the start, opponents worked tirelessly to abolish oil price controls. Most plans for repeal included some sort of windfall profit tax, either as a sop to disaffected lawmakers or as part of a genuine effort to balance the scales of economic justice. In 1974 President Gerald Ford proposed such a compromise, and the Senate Finance Committee approved a version of the WPT in 1975. Ultimately, however, it fell to President Jimmy Carter to make the bargain stick. In April 1979 he introduced plans to lift price controls gradually over the subsequent 18-month period. In tandem, he offered a new tax on oil production. "Unless we tax the oil companies, they will reap huge and undeserved windfall profits," Carter declared in a nationwide address. Americans had a right to recapture some of that windfall and put it to good use. Carter suggested that the revenue be earmarked for mass transit, oil price relief for poor families, and the development of alternative energy sources.

Supporters of the WPT believed that deregulation would deliver enormous profits into the greedy hands of a rapacious oil industry. Sound familiar?

In the late 1970s, oil prices were expected to increase dramatically once controls disappeared. Regulated prices were pegged as low as $6 per barrel, while global prices had climbed to almost $30. According to the Joint Committee on Taxation, lifting the price controls would produce $1 trillion in new revenue for oil producers between 1980 and 1990. Profits were expected to rise by more than $400 billion over the same period.

Many lawmakers considered such an increase wholly unjustified, especially since many Americans were already struggling with higher energy bills and occasional shortages. Prices had already climbed dramatically over the previous decade, a result of the OPEC oil embargo, the Iranian Revolution, and a continuing increase in demand. In the face of so much consumer pain, oil companies could not be allowed to pocket their enormous profits. Some sort of tax was necessary to stem the "immense transfer of cash" from consumers to oil companies, declared The New York Times. "Legislators who sit by idly while oil profits soar will have to answer to the voters," the editors warned.

Some advocates of the WPT believed that Americans had a right to share in oil company profits; when the nation's natural resources were exploited, some of the earnings belonged to the people. Advocates also contended that oil companies were shirking their fiscal responsibilities. The industry was blessed with low effective tax rates, largely as a result of two key preferences: the percentage depletion allowance and the expensing of intangible drilling costs. The WPT would help offset such unjustified -- and controversial -- subsidies.

Finally, noted CRS analyst Lazzari, budgetary pressures made any new revenue source very attractive. Between 1961 and 1979 the federal budget had run a deficit in every year but one. With preenactment revenue projections for the WPT running at roughly $225 billion for 1980 to 1991, money was a vital consideration.

By 1988, though, opposition had grown to a fever pitch. The tax eventually succumbed to its own disappointing results. It had proven to be a heavy administrative burden, both for taxpayers and the IRS. Oil industry representatives claimed annual compliance costs of $40 million to $50 million. Press reports suggested the IRS was spending as much as $15 million to collect the tax. Overall, it was a heavy cross to bear, complained oil executives. In 1984 a General Accounting Office report called the WPT "perhaps the largest and most complex tax ever levied on a U.S. industry."

Worse, the tax had yielded less revenue than anticipated throughout its existence -- and none at all in its later years. Oil prices had failed to continue their dramatic rise; between 1980 and 1986, they had fallen from $30 to just $10 per barrel. Meanwhile, the WPT's "base price" -- used to calculate tax liability -- had continued to rise with inflation, as required by law. Squeezed from both sides of the equation, the tax had become a negligible source of revenue.
In its eight years of existence, the WPT raised $79 billion in revenue, the CRS later reported. But since those payments were deductible against income, affected companies enjoyed a lower burden under the regular corporate income tax, effectively reducing the net yield to about $40 billion -- a far cry from early hopes.

In August 1988 Congress agreed to repeal the tax. Few mourned its passing. "Time for the windfall tax to fall," declared its erstwhile champions at The New York Times. Events had overtaken the levy, as so often happens with narrow taxes designed to deal with transient phenomena. Did oil companies deserve to keep their windfall profits? "It was a resentful question when Americans waited two hours in gasoline lines and Saudi princes summered in Monaco," the Times recalled. "It seems almost quaint now."

Full Article

The Culprit Is Us

2006-05-09T09:10:00.000-07:00

April 26, 2006

THE DEMAGOGUERY of US politicians reaches a crescendo when gasoline nears $3 a gallon. It happened after Hurricane Katrina disrupted supplies last September and it's happening again this week, as leaders of both parties scurry to avoid blaming the real guilty parties: their own constituents.

China and India, with their fast-developing economies, are responsible as well. They still use far less energy than the United States, and it is unfair to expect them to maintain pre-industrial standards of living so that Americans can enjoy low oil prices.

The oil companies, three of which will announce record profits this week, may be taking a bigger slice than usual. But oil prices wouldn't be topping $70 a barrel if increased demand were not straining supplies. The United States, with less than 5 percent of the world's population, consumes 25 percent of its oil, and American motorists refused to downsize their vehicle purchases when energy was cheap. Political leaders should be explaining energy economics and devising policies to mandate conservation instead of searching for scapegoats.

New York Attorney General Eliot Spitzer, a Democrat who is running for governor, wants to prosecute price-gougers. Republican Senator Arlen Specter of Pennsylvania favors a windfall profits tax. And President Bush, no fan of anything that might impede business, has told the Justice Department to vigorously enforce the laws against gouging. Just as there was nothing worth prosecuting after Katrina, there probably is nothing here.

Harry Reid of Nevada, the Senate Democratic leader, proposed yesterday a two-month moratorium on collecting the federal gasoline tax, which would save motorists 18.4 cents a gallon. This money is needed for highway repairs, and Reid's source of replacement funds, a reduction in tax breaks for oil companies, would be better as a permanent change, to help reduce the deficit.

Let's also hope the Republicans don't resume their quest to allow drilling in the Arctic National Wildlife Refuge. The United States should not despoil the environment to extract every possible drop of domestic oil. There's not enough in the Alaskan preserve to get gasoline prices back to the $1.20 range that Americans enjoyed in the 1990s.

One of the most thoughtful proposals comes from Senator Richard Lugar, Republican of Indiana, who last month called for an expanded program to seek alternatives to oil. Even he plays down the most obvious solution: a campaign to reduce the mileage of the American vehicle fleet. Owners of SUVs and other gas hogs need to get the message that they must shed at least 1,000 pounds of vehicle girth to help the nation break its oil habit.

Source

Ahmadinejad: Oil Price Is Lower Than Value

2006-04-19T17:22:00.000-07:00

TEHRAN, Iran - Wading into oil politics for the first time, Iran's hard-line president said Wednesday that crude oil prices — now at record levels — still are below their true value.

In statements likely to rattle world oil markets, President Mahmoud Ahmadinejad also said developed countries, not producing countries like Iran, are benefiting the most from the current high prices.

"The global oil price has not reached its real value yet. The products derived from crude oil are sold at prices dozens of times higher than those charged by oil-producing countries," state-run Tehran radio quoted Ahmadinejad as saying.

"The developed nations are the biggest beneficiary of the added value of oil products," he said.

"The products derived from crude oil cost over 10 times the price of oil sold by producing states. Developed and powerful countries benefit more from its value-added than any party," Ahmadinejad said.

Oil prices should be determined on the basis of market supply and demand, the Iranian leader said.

"Oil is the major asset of nations possessing it. Its price should not be lowered on the pretext that it will prove harmful to developing states, thus permitting the world powers to benefit the most from it," he said.

George Orwel, an analyst at the New York-based Petroleum Intelligence Weekly said he thought Ahmadinejad was playing the oil card to resist pressure over Iran's nuclear program.
"They are using the oil as a political football. Every time there's an issue with Iran, the oil market freaks out," he said in a telephone interview.

If the United States were to attack Iran, Tehran might try to cripple the world economy by putting a stranglehold on the oil that moves through the Strait of Hormuz — a narrow, strategically important waterway running to Iran's south.

While discounting Ahmadinejad's seriousness in his Wednesday comments about the value of oil, Orwel conceded the oil industry could not do without the 2.5 million barrels that Iran exports daily.

"Ahmadinejad is trying to show his muscle so that the Bush administration can realize the consequences on the oil market of further confrontation with Iran," Orwel said, adding that he fully expected Iran to threaten to cut off oil if the confrontation with the West continued.
While Ahmadinejad did not say he would use oil as a weapon in his dispute with the West, Interior Minister Mostafa Pourmohammadi said last month the oil card was in play.

"If (they) politicize our nuclear case, we will use any means. We are rich in energy resources. We have control over the biggest and the most sensitive energy route of the world," he said, referring to the Straits of Hormuz.

In keeping with Iranian leaders' tendency of late to contradict themselves, Foreign Minister Manouchehr Mottaki later denied Iran would adopt such a policy.

Ahmadinejad urged oil-producing countries — within and outside the Organization of Petroleum Exporting Countries — to establish a fund to help alleviate the pressure resulting from high oil prices on Third World nations.

"What he's saying makes a lot of sense. Unfortunately, the source of the comment is going to send jitters in the market," Gheit said.

"The street value (of oil) is triple what OPEC is making," Gheit added, referring to the value of a barrel of gasoline versus the value of a barrel of oil.

Full article

Oil Jumps Above $72 to New High

2006-04-19T16:46:00.000-07:00

I love how they stick the most important part at the end of the article! The problem of supply and demand it what peak oil is all about. The supply just isn't there and prices will continue to go up, up, up. Forecasts for supply increases are overly optimistic, and I think the markets are just starting to realize that oh-so-important fact.
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Oil prices jumped above $72 a barrel to yet another record Wednesday after a government report said supplies of crude made a surprise decline and gasoline stocks fell far more than expected

The Energy Department said in its weekly inventory report that supplies of gasoline fell 5.4 million barrels last week. Analysts had predicted a decline of 2.5 million barrels, according to Reuters.

Oil has been hitting record highs in recent sessions, unadjusted for inflation, on supply worries fed by fears of a confrontation with Iran, the world's fourth-biggest producer. But it's also within sight of inflation-adjusted highs of around $80 a barrel set in the late 1970s and early 1980s following the gas crisis and the Iranian revolution.

Gasoline supplies have been watched especially closely the last few weeks as the U.S. gears up for summer driving season.

In addition to soaring crude, growing demand and problems at refineries - including lingering effects from last season's hurricanes and a switch to less polluting gasoline - have contributed to rising prices at the pump.

Gas prices closely follow crude prices, which have jumped about 13 percent this year, mainly on political uncertainty or violence in Iran, Nigeria, Venezuela and Russia - all major producers. Oil prices soared 45 percent in 2005.

The International Monetary Fund said high oil prices could begin hurting world economic growth and called on the U.S., which uses a quarter of total world production, to raise taxes in a bid to reduce demand, Reuters reported.

Reuters also said OPEC ministers will meet next week informally to discuss prices, but said there is little the cartel, already pumping at near full capacity, can do to ease the situation.
But politics is only part of the story with crude prices. Oil has been on a charge for the last few years, more than tripling in price since the start of 2002.

And fundamental supply and demand has also played a big part as discoveries of new, easily recoverable supplies have failed to keep pace with ever rising demand from the U.S. and developing countries like China and India.

Full Article

George W. Bush and Peak Oil: Beyond Incompetence

2006-04-11T21:00:00.000-07:00

Richard Heinberg is the auther of The Party's Over: Oil and The Fate of Industrial Societies (excellent primer for Peak Oil Newbies) and Powerdown: Options and Actions for a Post Carbon Institute. I've only included excerpts below from Heinberg's article, but I encourage you to read the whole thing -- it's pretty good. Loved the Bush/Cheney/Clinton/Gore criticism. It's becoming increasingly clear that our political leaders in both major parties are failing us and leading us in the wrong direction.
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It is part of the job of leaders to foresee problems and either steer around them or prepare for them. A head of state is analogous to the captain of a ship, who is responsible not only for keeping his vessel on course but also for avoiding hazards such as storms and icebergs. Some problems are not foreseeable; others are. A ship’s captain who loses his vessel to a freak “perfect storm” may be blameless, but one who steers his passenger liner directly into a foggy ice field, having no sonar or radar, is worse than a fool: he is criminally negligent.

Peak Oil is foreseeable. The consequences are also foreseeable and are likely to be ruinous.

The Royal Swedish Academy of Sciences...describes the situation this way: In the last 10–15 years, two-thirds of the increases in reserves of conventional oil have been based on increased estimates of recovery from existing fields and only one-third on discovery of new fields. In this way, a balance has been achieved between growth in reserves and production. This can’t continue. 50% of the present oil production comes from giant fields and very few such fields have been found in recent years." The 100 or so giant and super-giant fields that are collectively responsible for about half of current world production were all discovered in the 1940s, ’50s, ’60s, and ’70s and most are now going into decline.

Ford Motor Company Executive Vice President Mark Fields, in his keynote address in October, 2005 at the Society of Automotive Engineers’ “Global Leadership Conference at the Greenbrier,” noted the seven most serious challenges to his industry, one of which was that “oil production is peaking. Volvo motor company has for several years acknowledged in its company literature that a global oil production peak is likely by 2015.7

Dutch Shell Chief Executive Jeroen Van Der Veer has said, “My view is that ‘easy’ oil has probably passed its peak.

On March 1, 2006 The New York Times published an editorial by Robert Semple, Associate Editor of the Editorial Page for the Times since 1998, in which he wrote, “The concept of peak oil has not been widely written about. But people are talking about it now. It deserves a careful look—largely because it is almost certainly correct.”

The Bush administration has been repeatedly warned.

First of all, agencies within the government clearly understand the problem, and therefore relevant information must be readily available to the chief executive if he wishes to have it.

In a 1999 speech Cheney pointed out: "By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day." This is a fair statement of the depletion dilemma: 50 million barrels per day is almost five times the current output of Saudi Arabia.

...A paper prepared for the U.S. Army Corps of Engineers...includes the following tidbit: "The supply of oil will remain fairly stable in the very near term, but oil prices will steadily increase as world production approaches its peak. The doubling of oil prices in the past couple of years is not an anomaly, but a picture of the future. Peak oil is at hand..."

And then there is the 2005 Hirsch Report, “Peaking of World Oil Production: Impacts, Mitigation and Risk Management,” commissioned by the U.S. Department of Energy,

Then there is the following from the U.S. Department of Energy: "The disparity between increasing production and declining reserves can have only one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available. The question is when peak production will occur and what will be its ramifications. Whether the peak occurs sooner or later is a matter of relative urgency..."

Actions could be taken to reduce the impact, but the longer those actions are delayed, the worse the impact will be.

Responsible and competent people who have studied the problem of Peak Oil, (including Robert Hirsch and his colleagues) agree that efforts will be needed to create alternative sources of energy, to reduce demand for oil through heightened energy efficiency, and to redesign entire systems (including both cities and the rural agricultural economy) to operate with less petroleum.

The Hirsch Report’s methodology involved the examination of three scenarios:
Scenario I assumed that action is not initiated until peaking occurs.
Scenario II assumed that action is initiated 10 years before peaking.
Scenario III assumed action is initiated 20 years before peaking.

In all three scenarios, the Hirsch study assumed a “crash program” scale of effort (that is, all the resources of government and industry are marshalled to the tasks of creating supplies of alternative fuels and reducing demand through efficiency measures). The study found that, due to the time required to start efforts and the scale of mitigation required, Scenario I will result in at least 20 years of fuel shortfalls. With 10 years of preparation, a 10-year shortfall is likely. And with 20 years of advance mitigation effort, there is “the possibility” of averting fuel shortages altogether. The Report also concludes that “Early mitigation will almost certainly be less expensive than delayed mitigation.”

The administration, rather than taking steps to mitigate these looming catastrophic impacts, has instead done things that can only worsen them.

Before examining what Bush and Cheney have done (and not done), we should in fairness note that previous administrations are far from blameless. During the Clinton–Gore years, imports of oil increased while CAFE standards languished. However, in a court of law the incompetence or even criminality of others is seldom a viable defense for one’s own culpable actions.

First of all, the administration effectively buried the Hirsch Report. For many months it was available only on a high school web site, then on the Project Censored site; only toward the end of 2005 did it appear on a Department of Energy site. There has been no public mention whatever of the Report by any official in the Executive Branch. Thus the administration has sought not to respond to warnings of approaching crisis, but simply to muffle the warnings.

During the past six years, funding for renewable energy programs and for energy efficiency has not increased substantially. Meanwhile the administration has consistently sought to remove subsidies for the nation’s passenger rail system, Amtrak, while continuing to support immense subsidies for highways.

In his 2006 State of the Union address, Bush said that the U.S. is “addicted to oil,” and put forward the goal of reducing oil imports from the Middle East. The next day his staff backpedaled, saying that this goal was only an “example.”

Given all this, how will impeachment help? While it would be justified as a punishment for ineptitude or criminality, impeachment will not materially assist the nation to deal with Peak Oil unless current officials are replaced with ones who understand the problem and who are prepared to implement policies that radically shift America’s priorities in terms of energy, transportation, urban infrastructure, and agriculture.

Full Article

Iran's Oil Weapons Part I: The Strait of Hormuz

2006-03-22T21:33:00.000-08:00

"This notion that the United States is getting ready to attack Iran is simply ridiculous…And having said that, all options are on the table." ~ President Bush (2/23/05)

"We are reaching a critical phase but it is not a crisis situation. It is about confidence building and it is not about an imminent threat...everybody agrees that the only way to move forward is through diplomacy, through negotiation and there is still a window of opportunity for all concerned parties to find a way forward." ~ IAEA Director General Mohamed ElBaradei (2/2/06)

"The Iran regime must be made aware that if it continues down the path of international isolation, there will be tangible and painful consequences," ~ John Bolton, U.S. Ambassador to the United Nations (3/6/06)

"The United States has the power to cause harm and pain, but the United States is also susceptible to harm and pain. So if that is the path that the U.S. wishes to choose, let the ball roll." ~ Ali Asghar Soltanieh, a senior Iranian delegate to the IAEA (3/8/06)

As I’ve stated in previous posts, I believe the nuclear "crisis" in Iran is being manufactured and I also believe Iran has just as many weapons of mass destruction as Iraq did and therefore Iran is as much an “imminent” threat as Iraq was in 2003. So although it is a smaller country with a smaller military force, Iran appears to have two weapons in its arsenal that the U.S. has to think about before it pursues economic sanctions or air strikes against Iran.

The first oil weapon that Iran possesses is control over the Strait of Hormuz, the only available sea passage for many Persian Gulf states (Iraq, Iran, Saudi Arabia, Qatar, United Arab Emirates) for exporting oil to the Indian ocean.

The Strait of Hormuz (located in the map above -- south of Iran and north of the United Arab Emirates) is between the Persian Gulf and the Gulf of Oman and is 21 to 23 miles at its narrowest part. The strait has two 1 mile shipping channels separated by a 2 mile buffer zone. Approximately 16 million barrels of oil are shipped a day through the Strait of Hormuz a day (i.e. 20%-25% of the world’s oil production).

Mohammed-Nabi Rudaki, deputy chairman of the Iranian parliament's National Security and Foreign Policy Commission issued the following military threat in January 2006:

"If Europe does not act wisely with the Iranian nuclear portfolio and it is referred to the U.N. Security Council and economic or air travel restrictions are imposed unjustly, we have the power to halt oil supply to the last drop from the shores of the Persian Gulf via the Straits of Hormuz."

Ali Larijani, Iran’s Foreign Policy Chief, made the following statement earlier this month:

"If we are referred to the Security Council, problems might occur for others as well as us…We would not like to use our oil as a weapon. We would not like to make other countries suffer."

Although there is definitely a constant U.S. military presence in the Persian Gulf, there have been reports that Iran has accumulated substantial surface and underwater naval vessels, Chinese-supplied C-801 and C-802 anti-shipping missiles, ocean bottom tethered mines, coastal artillery, etc., to prevent a pre-emptive attack and to shut down the oil trade through these shipping channels.

Director of the Defense Intelligence Agency, Vice Admiral Lowell E. Jacoby reported to the U.S. Senate on 2/24/04:

“Iran’s Navy, the region’s most capable, can temporarily disrupt maritime traffic through the Strait of Hormuz using a layered force of KILO Class diesel submarines, ship and shore-based antiship cruise missiles and naval mines.”

To understand the magnitude of cutting off 20-25% of the world’s oil supply, just think about oil price increases recently with just talks of nuclear controversy between the U.S. and Iran, or the oil price increases due to instability in Nigeria and shutdown of oil production there, or oil price increases after the most recent Hurricane season when refining capacity became somewhat limited.

Given our current "peak" state of oil supply versus oil demand, oil prices would increase significantly if Iran simply stopped exporting its oil to the rest of the world, but shutting down the oil trade (even temporarily) in the Persian Gulf, would cause oil prices to more than significantly increase -- wreaking serious havoc on the U.S. and world economy and markets. The Iranians should not be understimated. President Bush is right with respect to Iran being a threat to our national security, but the threat is not "imminent" and "nuclear" in nature as he and his administration would like us to believe-- it's economic.

Stay tuned for Iran’s Oil Weapon Part II – The Iran Oil Bourse

Related Blog Postings:

The Hypocrisy and Illegality of the Nuclear Deal Between the U.S. and India
Iran Update: China and Russia United on Iran
Do You Think It's Time to Get Tougher With Iran?
Those Crazy Iranians and Their Nukes

Iran Update: China, Russia United on Iran

2006-03-21T08:01:00.000-08:00

Full Article

China and Russia are united in pushing for more diplomacy to resolve the Iranian nuclear issue, China said on Tuesday, a day after the two deflected Western moves to authorize U.N. Security Council threats against Iran.

After more than two weeks of discussions, the five veto-wielding members of the Security Council -- China, Russia, the United States, Britain and France -- have been unable to agree on a draft statement that tells Iran to stop enriching uranium.

"China and Russia have common views on how to resolve the Iranian nuclear issue," China's Foreign Ministry spokesman Qin Gang told a regular news conference. "Our objectives are to solve the issue in a peaceful way through negotiations," he said, as Chinese President Hu Jintao' and Russian President Vladimir Putin held talks in Beijing.

Envoys close to the talks on the draft statement said Russia, backed by China, was toughest on its provisions, objecting to its setting a two-week deadline for the IAEA to report whether Tehran has complied, saying the time limit is too short. But underscoring the urgency to reach a resolution, U.S. President George W. Bush reiterated that Washington was ready to use military force against Iran if necessary.

"The threat from Iran is, of course, their stated objective to destroy our strong ally
Israel" he said in a speech to the City Club of Cleveland. "That's a threat, a serious threat. It's a threat to world peace... I made it clear, I'll make it clear again, that we will use military might to protect our ally, Israel."

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Funny...I remember Bush saying something a little bit different only a year ago:

"This notion that the United States is getting ready to attack Iran is simply ridiculous," Bush said. "And having said that, all options are on the table." (February 2005)

Poll: Most Americans fear vulnerability of oil supply

2006-03-20T23:11:00.000-08:00

WASHINGTON (CNN) -- Although Americans don't believe the country faces an imminent energy crisis, most believe there are "major problems" --- from potential oil shortages to possible terrorist attacks -- and they are harshly critical of the leadership on the issue from the White House, according to a new CNN/USA Today/Gallup poll.

Despite President Bush's focus on energy in his State of the Union speech, in which he said America is "addicted to oil," those polled gave the president low marks on the issue.

Seventy-one percent said Bush is not doing enough to solve the nation's energy problems. Only 24 percent said Bush is doing enough.

The poll, which was released Wednesday afternoon, also indicates that roughly three out of four Americans -- 77 percent -- fear the supply of oil will not be able to keep up with global demand. Three in 10 said they believe the world will run short of oil within the next 25 years.

That perception is in conflict with forecasts from the Energy Information Agency, the official arm of the U.S. government that keeps energy statistics. The agency estimates that the oil supply will be able to meet the demand, which is expected to skyrocket by 40 percent in the next 20 years --- driven by rising U.S. consumption and booming economies in China and India.

The CNN/USA Today/Gallup poll found that 12 percent consider the current energy situation in the United States a crisis. At the same time, 49 percent said there are major problems in the industry --- citing the cost and availability of electricity, gas, natural gas and other forms of energy. Thirty-five percent said the industry has minor problems.

The poll also suggests that nearly three-quarters of Americans fear that terrorists will attempt a major attack on oil installations somewhere in the world within the next year.

The poll comes after top oil executives earlier this week appeared before Congress to defend their record profits and explain the consolidation that has taken place in the industry. The top five oil companies earned more than $100 billion last year.

Sen. Charles Schumer, D-N.Y., accused the oil companies of making America's energy problems worse.

"In his State of the Union address, we heard the president say that America is addicted to oil. If that's so, then these behemoth oil companies are some of our biggest dealers," Schumer said.

Shell Oil CEO John Hofmeister fired back, blaming Hurricane Katrina: "When supply is reduced and demand is not reduced, the consequence is higher prices. In a free market that's how it works."

Full Article

U.S. Army Acknowledges Peak Oil

2006-03-14T22:05:00.000-08:00

The following report offers additional evidence (click here for conclusions from the Hirsch report commissioned by the U.S. Department of Energy) that our government is aware of peak oil (where demand for oil becomes greater than the supply of oil). The public deserves to be educated about it consequences and have a say in how we should go about trying to mitigate the effects of peak oil. Please do not continue to let our political leaders talk around the issues and mislead Americans on such a crucial topic.

Here's a few excerpts from a report entitled "Energy Trends and Their Implications for U.S. Army Installations" produced by the U.S. Army Corps of Engineers in September 2005:

"Throughout the 20th Century, the United States has been a profligate energy consumer. The rapid and expansive growth of the economy was based on cheap and abundant energy. Little thought and planning have been given to how to transition to the realities of the 21st Century when petroleum and natural gas resources will become depleted. The U.S. economy uses 50 percent more energy per unit of GDP than the other developed nations of the world (EIA 2004). The fossil fuel-based, automobile-centered, throw-away economy is not a viable model for the United States or the rest of the world over the long term. It is not sustainable..."

"Future availability of customary energy sources is problematic. Domestic production of both oil and natural gas are past their peak and world petroleum production is nearing its peak. Growing domestic consumption will continue to increase dependence on foreign and potentially unstable
energy sources. Almost half of the existing U.S. natural gas reserves are considered to be either remote or stranded, i.e., they are too far from existing infrastructure, located on restricted. Federal lands, or considered too environmentally detrimental to harvest..."

"The oil market will remain fairly stable, but with steadily increasing prices as world production peaks. Demand now exceeds production and we are seeing that effect on prices. After the peak is reached, geopolitics and market economics will result in significant price increases above what we have seen to date. Security risks will also rise. To guess where this is all going to take us is would be too speculative. Oil wars are certainly not out of the question..."

"In conclusion, we are clearly entering a very different period for global energy markets and relations. We shall continue to face geopolitical risks and uncertainties and concerns around energy security will continue to rise. Petroleum will remain the most strategic and political energy commodity with natural gas running a close second. There will be increasing focus on sustainability and potential constraints of our current energy paths—especially in light of climate change, investment requirements, and resource depletion. The situation is particularly acute in the case of petroleum..."

"One thing is certain: it is going to be challenging and comprehensive approaches to energy issues are required. Uncertainty cannot be an excuse for inaction. Integrated resource planning is required and issues must be addressed from both the supply and demand viewpoint. The U.S. cannot drill its way to energy independence nor can we do it all with renewables and efficiency. A secure, reliable, and cost effective energy system must be robust, diverse, and aggressively incorporate renewables, energy efficiency, and intelligent use of fossil fuels..."

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What does the U.S. Army Corp of Engineers do?

- Planning, designing, building and operating water resources and other civil works projects (Navigation, Flood Control, Environmental Protection, Disaster Response, etc.)
- Designing and managing the construction of military facilities for the Army and Air Force. (Military Construction)
- Providing design and construction management support for other Defense and federal agencies. (Interagency and International Services)

US Army Goes Public on Peak Oil
US Army Corps of Engineers Site

The Hirsch Report: Why The Bush Admistration Knows That Peak Oil is Not A Theory

2006-03-12T09:41:00.000-08:00

I’ve alluded in a few previous posts (America’s Oil Addiction and The Hypocrisy and Illegality of the Nuclear Deal Between India and the U.S.) that the Bush Administration is very much aware of the fact that Peak Oil will happen and that it’s imminent and instead of speaking honestly about this event and attempting to educate the public, the administration (as well as the news media) talk around the issues (e.g. “tight supply”, “America is addicted to oil”). The Hirsch report was commissioned by the U.S. Department of Energy (“DOE”) and initially released in February 2005, although it received little attention from the news media:

(July 2005) …Yet, half a year after release, discussion of the Hirsch report is conspicuously absent from the press and the halls of Congress. For months it has been archived, in PDF format, on a high school web site (http://www.hilltoplancers.org/, Hilltop High School in Chula Vista, Calif.). It now can be found on a few other sites as well (including http://www.energybulletin.net/ and http://www.projectcensored.org/)-but why must citizens search for an important government-sponsored report on private web sites?If the content of the Hirsch report is to be believed-and there is every reason to think it should be-then this is a document that deserves the close attention of every leader of government and industry in the US. Newspapers and news magazines should be running excerpts and summaries. Instead, there is nearly total silence. (Richard Heinberg)

It was also noted that the report recently disappeared from the DOE website.

I’ll be adding additional posts to discuss the details of the Hirsh report (it’s 91 pages long!) because I think it’s important and I think people should know more about it. For now, the following is a list of conclusions listed in the report, as a result of Robert Hirsch’s analysis:

1. World Oil Peaking is Going to Happen
World production of conventional oil will reach a maximum and decline thereafter. That maximum is called the peak. A number of competent forecasters project peaking within a decade; others contend it will occur later. Prediction of the peaking is extremely difficult because of geological complexities, measurement problems, pricing variations, demand elasticity, and political influences. Peaking will happen, but the timing is uncertain.

2. Oil Peaking Could Cost the U.S. Economy Dearly
Over the past century the development of the U.S. economy and lifestyle has been fundamentally shaped by the availability of abundant, low-cost oil. Oil scarcity and several-fold oil price increases due to world oil production peaking could have dramatic impacts. The decade after the onset of world oil peaking may resemble the period after the 1973-74 oil embargo, and the economic loss to the United States could be measured on a trillion-dollar scale. Aggressive, appropriately timed fuel efficiency and substitute fuel production could provide substantial mitigation.

3. Oil Peaking Presents a Unique Challenge
The world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary.

4. The Problem is Liquid Fuels
Under business-as-usual conditions, world oil demand will continue to grow, increasing approximately two percent per year for the next few decades. This growth will be driven primarily by the transportation sector. The economic and physical lifetimes of existing transportation equipment are measured on decade time-scales. Since turnover rates are low, rapid changeover in transportation end-use equipment is inherently impossible. Oil peaking represents a liquid fuels problem, not an “energy crisis” in the sense that term has been used. Motor vehicles, aircraft, trains, and ships simply have no ready alternative to liquid fuels. Non-hydrocarbon-based energy sources, such as solar, wind, photovoltaics, nuclear power, geothermal, fusion, etc. produce electricity, not liquid fuels, so their widespread use in transportation is at best decades away. Accordingly, mitigation of declining world oil production must be narrowly focused.

5. Mitigation Efforts Will Require Substantial Time
Mitigation will require an intense effort over decades. This inescapable conclusion is based on the time required to replace vast numbers of liquid fuel consuming vehicles and the time required to build a substantial number of substitute fuel production facilities. Our scenarios analysis shows:

• Waiting until world oil production peaks before taking crash program action would leave the world with a significant liquid fuel deficit for more than two decades.

• Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.

• Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.

The obvious conclusion from this analysis is that with adequate, timely mitigation, the economic costs to the world can be minimized. If mitigation were to be too little, too late, world supply/demand balance will be achieved through massive demand destruction (shortages), which would translate to significant economic hardship. There will be no quick fixes. Even crash programs will require more than a decade to yield substantial relief.

6. Both Supply and Demand Will Require Attention
Sustained high oil prices will stimulate some level of forced demand reduction. Stricter end-use efficiency requirements can further reduce embedded demand, but substantial, world-scale change will require a decade or more. Production of large amounts of substitute liquid fuels can and must be provided. A number of commercial or near-commercial substitute fuel production technologies are currently available, so the production of large amounts of substitute liquid fuels is technically and economically feasible, albeit time-consuming and expensive.

7. It Is a Matter of Risk Management
The peaking of world conventional oil production presents a classic risk
management problem:

• Mitigation efforts initiated earlier than required may turn out to be premature, if peaking is long delayed.

• On the other hand, if peaking is imminent, failure to initiate timely mitigation could be extremely damaging.

Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive and less damaging to the world’s economies than delayed mitigation.

8. Government Intervention Will be Required
Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important lessons and guidance as to government actions that might be more or less desirable. But the process will not be easy. Expediency may require major changes to existing administrative and regulatory procedures such as lengthy environmental reviews and lengthy public involvement.

9. Economic Upheaval is Not Inevitable
Without mitigation, the peaking of world oil production will almost certainly cause major economic upheaval. However, given enough lead-time, the problems are soluble with existing technologies. New technologies are certain to help but on a longer time scale. Appropriately executed risk management could dramatically minimize the damages that might otherwise
occur.

10. More Information is Needed
The most effective action to combat the peaking of world oil production requires better understanding of a number of issues. Is it possible to have relatively clear signals as to when peaking might occur? It would be desirable to have potential mitigation actions better defined with respect to cost, potential capacity, timing, etc. Various risks and possible benefits of possible mitigation actions need to be examined.

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Robert Hirsch Bio
The Hirsch Report

Mr. Pickens on Peak Oil

2006-03-07T22:10:00.000-08:00

Oh Mr. Pickens. I didn't know you before you tonight, but I gotta love ya! Your candor in your old age is absolutely refreshing! Whether they publicly admit it or not, the major oil companies know what time it is.

T. Boone Pickens started Mesa Petroleum with $2500 in 1956, growing it into one of the world's leading independent oil and gas producers. He is the founder and chairman emeritus of Clean Energy Fuels, the nation's largest supplier of natural gas to the transportation sector.

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"Let me tell you some facts the way I see it," he began. "Global oil (production) is 84 million barrels (a day). I don't believe you can get it any more than 84 million barrels. I don't care what (Saudi Crown Prince) Abdullah, (Russian Premier Vladimir) Putin or anybody else says about oil reserves or production. I think they are on decline in the biggest oil fields in the world today and I know what's it like once you turn the corner and start declining, it's a tread mill that you just can't keep up with."

"So, when you start adding the reserves in these countries, you're not even replacing what you're taking out. "Let me take you to another situation quickly. 84 million barrels a day times 365 days is 30 billion barrels of oil a year that we're depleting. All of the world's (oil) industry doesn't even come close to replacing 30 billion barrels of oil. We don't spend enough money to even give ourselves a chance to replace 30 billion barrels. It may be because the prospects are not there. I rather imagine that's what the answer is to that. "So, if you accept that 84 million barrels a day is all the world can (produce), and then look at refining capacity, I think it's just a coincidence that refining capacity... world capacity... is 84 million barrels a day. So, we're in balance: 84, 84. "

"Now you see the projections for the fourth quarter of '05, I mean like tomorrow; it is 86 to 87 million barrels of oil a day required. China (and) India (are) growing fast. Our economy is going down a little bit, but it doesn't seem to be shutting off demand for gasoline, oil, natural gas, whatever. But around the world... just assume that the (U.S.) economy is slowing, but China is still ramped up; it is still 86, 87 million for the fourth quarter. "

"Now we've got some pretty good inventory, those will be... I think.. they'll be gone in the third quarter. I can't wait to see how this is all going to play out. "Don't let the day-to-day NYMEX (New York Mercantile Exchange) fool you, because it can turn and go the other direction. I may be wrong. Some of the experts say we'll be down to $35 oil by the end of the year. I think it'll be $60 oil by the end of the year. You're going to see $3 gasoline twelve months from today, or some time during that period. I know you've already experienced it in California. I am not that much out of it... But in the Midwest you've probably got $2.20 today. That's the way I see it unfolding".

Pickens went to explain that if he were Energy "Czar", he'd immediately begin to phase out the use of natural gas in electric power generation and encourage the construction of more coal-fired and nuclear power plants. He'd use the natural gas to power transportation instead. Speaking of the various alternative fuels, he stated, "I don't think any of them can miss. I think some will be further out than others. Hydrogen, I think, is going to take a long time".

Speaking before an audience with vested interests in ethanol, biodiesel, propane and compressed natural gas as transportation fuels, he added that he believes all the alternatives will work. "We're going to have to use shale oil the western slope of the Rockies. That's going to happen. The technology is just about here", he noted, adding that he blames both Republican and Democratic administrations for not engaging in long term planning to meet the nation's future energy needs.

"It's all getting very, very tight. We're just about there. The sixty percent we import now (of petroleum), is about all we can get from the countries that export". He cited the example of Venezuela where its "screwball" leader, Hugo Chavez has pledged to not sell any additional oil to the United States.

"The majors, they talk about plenty of oil and that they can produce more, but if you look at ExxonMobile, ChevronTexaco, BP (British Petroleum), all the production (is) going down every year. They don't replace and they don't add to production, but they say there's plenty of oil around."Now why would they say that? One of the chief economists with one of the major oil companies... I was at a conference where he was... we were talking and I asked, why do they say that? And he said, can you imagine what would happen if one of these major oil company's CEO's got up and made a speech and he said, 'We're running out of oil'? I said there'd be panic and he said, 'That's right. They're not going to make the statement. They're going to say there's plenty of oil around'".

"I know that sounds rather simple, but that's the best answer I've had... why they keep saying that there's plenty of oil around. I can't tell you positive, but I am just so sure that we have peaked and from here on the demand side that we are going to have a hard time making the trip on fuel. I know demand will come down with price. That will happen".

Full Article

The Hypocrisy and Illegality of the Nuclear Deal Between India and the U.S.

2006-03-05T13:06:00.000-08:00

For the past 30 years, the U.S. has led the way in denying India access to nuclear technology because India tested and developed nuclear weapons outside of the Nuclear Proliferation Treaty (NPT). India refused to sign the deal because it opposed the discriminatory nature of the treaty that allows the 5 declared nuclear countries of the world to keep their nuclear arsenal and develop their arsenal using computer simulation testing. In response to India performing nuclear tests in 1998 and in an effort to get India to sign the Comprehensive Test Ban Treaty, President Clinton imposed sanctions against India and the U.S. stalled international loans from the World Bank that were meant to fund a renewable energy program and development of a national electricity grid in India.

Now, President Bush, is saying forget all of that stuff we did to India in the past when we were trying to prevent them from becoming a Nuclear Power, India is now our ally and “times change.”

The following reasons are why I have a problem with this new deal with India – our new ally.

1.) President Bush is selling this deal with India to the public, as a way to ease the effect of increasing oil prices on US consumers. I personally think President Bush and his administration recognize the intricate details and consequences of Peak Oil. I think President Bush is sacrificing the reputation of the U.S. and engaging in dangerous foreign policy tactics in an effort to buy more time for the U.S. to come up with this “magic” technology that will allow Americans to continue to guzzle oil, remain wasteful, and keep their standard of livings. The equation of the U.S., India, and China increasing their oil demand each year and all competing for the remaining scraps of oil left on the planet is obviously not going to work (i.e. 2+2+2 will never equal 5). Instead of reducing the U.S. demand on oil, which will inevitably slow our economy, I believe the Bush Administration is betting that they can work to curb the oil consumption of other countries and reduce their demand on the remaining oil resources. The problem with this "bet" is that experts say that this deal meets only 10 to 12 percent of India’s mammoth energy needs. Therefore, the U.S. is engaging in dangerous and extremely hypocritical foreign policy that doesn’t really solve the problem of the world having a greater demand for fossil fuel energy than what is actually available. Which begs the question…is this deal smart foreign policy? In addition, I also think Bush wants India in his pocket, so he can call on them in future, similar to what happened when Bush was garnering support against Iran.

2) It is a complete double standard for the United States to attempt to hold other countries, who have actually signed the NPT to a different standard than countries who haven’t even signed the treaty. India gets nuclear cooperation from the U.S., while other countries such as Pakistan and Iran are unilaterally deemed ineligible for such cooperation.

3) The U.S. is a signatory to the NPT, but the deal between the U.S. and India violates tenets of the NPT, because based on the treaty, a non-signatory state is not eligible for cooperation support from other countries that are non NPT members even in the form of non-military assistance.

4) This foreign policy move by Bush and Rice, appears to reward bad behavior and sends a bad message to other international countries who have not signed the NPT that it’s ok to develop nuclear weapons outside the NPT, which is the exact opposite of a goal of non-proliferation.

5) The U.S. is currently calling for Iran to abandon its nuclear program and alluding to sanctions and possible military action if Iran doesn’t comply. Iran has complied with the terms of the NPT and allowed more inspections by the International Atomic Energy Agency (IAEA) than any other country that is a signatory of the NPT and has agreed to additional Protocols required by the IAEA, that are not required by other NPT signatories. In addition, Iran already suspended its nuclear program voluntarily in order to continue EU nogotiations and "build trust" in the international community. The U.S. has accused Iran of developing nuclear weapons with little evidence, similar to the situation of the U.S accusing Iraq of having weapons of mass destructions with little/false evidence. The U.S. argues that Iran can’t have weapons because it’s not a true democracy, it doesn’t have any need for nuclear power because it’s rich in oil, and a nuclear Iran would cause a regional nuclear arms race. None of these “qualifications” stated by the U.S. are noted anywhere in the NPT. The NPT gives Iran the right to develop peaceful nuclear technology and actually requires nuclear superpowers like the U.S. to share nuclear technology to further these efforts.

6) The U.S. has watched while Israel has secretly developed nuclear weapons and not referred them to any Security Council, nor had any qualms about Israel spurring a nuclear arms race in the region. Israel is not a signatory of the NPT.

7) The deal with India violates U.S. law, because any signed international treaty such as the NPT automatically becomes U.S. law and in addition, U.S. law currently prohibits sharing of nuclear technologies and materials outside the framework of the Nuclear Suppliers Group, a multinational body concerned with reducing nuclear proliferation, by controlling the export and re-transfer of nuclear materials. India is not a member of the Nuclear Suppliers Group. The Nuclear Suppliers Group was actually founded in 1976 in response to a Indian nuclear weapons test in 1975. The test demonstrated that certain non-weapons specific nuclear technology could be readily turned to weapons. Nations already signatories of the NPT saw the need to further limit the export of nuclear equipment, materials or technology. It’s more than ironic that this deal with India will violate a U.S. law that requires adherence to rules of an organization that was founded in response to India developing weapons outside of the NPT.

8) The deal with India only requires that India make 14 out of its 22 nuclear facilities open to inspections by the IAEA. The remaining 8 are military facilities and not subject to inspection or monitoring. India has not agreed to scale back it's nuclear program and plans to continue it. India's reprocessing and enrichment of uranium — key steps in making weapons-grade material — will not be subject to international safeguards.

The hypocrisy of India (who wants civilian nuclear energy) agreeing to refer Iran (who also wants civilian nuclear energy) to the Security Council in effort to secure a deal with the United States has not gone unnoticed. The hypocrisy of the U.S. ignoring the NPT when it comes to their “allies”, but demanding sanctions be brought against countries adhering to the NPT, such as Iran, has not gone unnoticed. The hypocrisy of the United States now putting all of this faith in the inspections of IAEA with regards to India and Iran but completely ignoring Mohamed ElBaradei, Director of the IAEA, with regards to his view that Iraq did not have any weapons of mass destruction, has not gone unnoticed. Days before the Iraq war started, Vice Presdient Dick Cheney officially said “We believe [Iraqi leader Saddam Hussein] has, in fact, reconstituted nuclear weapons. I think Mr. ElBaradei, frankly, is wrong," Cheney said. "And I think if you look at the track record of the International Atomic Energy Agency in this kind of issue, especially where Iraq's concerned, they have consistently underestimated or missed what Saddam Hussein was doing."

Pictures of Protests in India during Bush's recent visit. It's estimated that 50,000 people protested:

Kicking The Habit, All Over The World

2006-03-01T20:19:00.000-08:00

A recent article in the Los Angeles Times pointed out a very important point. Even if the U.S. was able to kick it's oil addiction, China and India are poised to emerge as industrial oil guzzling powerhouse in future decades, and they will potentially be the next oil addicts. While I still think it's extremely important for the United States to take steps to curb our oil demand since we are currently the world's current largest consumer of fossil fuels, but I agree that we should start working with other nations to keep the same scenario from happening in other countries. But from my previous post on Sweden, you probably already know that I'm not holding my breath on signficant change coming from political leaders. I'm still betting on individuals and local communities in all countries to reduce the world's oil consumption.

And on a side note, I'm don't support the author's view that we shouldn't rock the boat that is "global stability." Countries have the right to contract deals that support their interests just as much the United States has to right to contract such deals. As long as there is globalism driven by capitalism, there will always be global inequality. And as long as there is inequality there will never be true "global stability."

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PRESIDENT BUSH was right to say that the United States is "addicted to oil" in his State of the Union address. For too long we have been consuming ever-greater quantities of the stuff without paying heed to the political, economic and environmental hazards involved. Bush also made some useful, if timid, suggestions on how to curb our insatiable thirst for oil. But he failed to address a critical aspect of the problem: Other countries, including China and India, are just as addicted to oil, and unless we strive to suppress their appetites along with our own, the problems we face will continue to multiply.

For decades, the United States has been the world's leading consumer of petroleum, devouring about one-fourth of the global supply daily. Although higher gasoline prices have weakened demand slightly, we are still expected to consume 27% more oil in 2025 than we do today, according to the latest Department of Energy projections. But an even greater increase in demand is expected from Asia. China's oil consumption is expected to rise by 97% between 2004 and 2025, and India's by 78%. The resulting demand crunch could easily overwhelm the global supply of petroleum.

In the U.S., oil demand is largely spurred by Americans' collective love affair with the automobile. We also own far more vehicles, on a per-capita basis, than any other large nation. But all indications are that Chinese and Indian consumers are beginning to emulate us: In 2001, 16 million Chinese owned private cars; by 2020, the number is expected to hit 130 million; India's ownership rate is expected to grow just as fast.

"In their quest for foreign sources of petroleum, China and India are buying up fields around the world and, in some cases, forging close ties with such states as Iran, Sudan, Uzbekistan and Venezuela, which are considered unfriendly or even hostile to the U.S."A more troubling aspect of the recent surge in overseas energy deals by China and India is their willingness to invest in countries that are pursuing policies that are harmful to global stability," Assistant Secretary of State E. Anthony Wayne told the Senate Foreign Relations Committee in July.

For example, "both Chinese and Indian firms have reportedly been involved in oil and gas-sector deals in Iran that raise concerns under U.S. law and policy." This is especially true when such investment is accompanied by arms and military technology, as has been the case with Chinese links to Iran and Sudan."

Full Article

Sweden: Oil Independence Without Additional Nuclear Power

2006-02-15T07:24:00.000-08:00

Sweden is not only talking the talk about oil independence, but walking the walk. Although Sweden is much smaller than the United States, I think it's important to point out where other countries are making strides, where the U.S. is lagging behind. The most powerful part of this article appears to be the various people and communities working together to reach a solution. I believe relying solely on Mr. Bush or our federal government to solve our oil dependence problems is a mistake. The solution must start with individuals and might be better addressed at local community levels within theU.S.

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Sweden is to take the biggest energy step of any advanced western economy by trying to wean itself off oil completely within 15 years - without building a new generation of nuclear power stations.The attempt by the country of 9 million people to become the world’s first practically oil-free economy is being planned by a committee of industrialists, academics, farmers, car makers, civil servants and others, who will report to parliament in several months.The intention, the Swedish government said yesterday, is to replace all fossil fuels with renewables before climate change destroys economies and growing oil scarcity leads to huge new price rises.

“Our dependency on oil should be broken by 2020,“ said Mona Sahlin, minister of sustainable development. “There shall always be better alternatives to oil, which means no house should need oil for heating, and no driver should need to turn solely to gasoline.“

According to the energy committee of the Royal Swedish Academy of Sciences, there is growing concern that global oil supplies are peaking and will shortly dwindle, and that a global economic recession could result from high oil prices, ww4report.com said.Ms Sahlin has described oil dependency as one of the greatest problems facing the world.

“A Sweden free of fossil fuels would give us enormous advantages, not least by reducing the impact from fluctuations in oil prices,“ she said. “The price of oil has tripled since 1996.“

A government official said:

“We want to be both mentally and technically prepared for a world without oil. The plan is a response to global climate change, rising petroleum prices and warnings by some experts that the world may soon be running out of oil.“

Sweden, which was badly hit by the oil price rises in the 1970s, now gets almost all its electricity from nuclear and hydroelectric power, and relies on fossil fuels mainly for transport. Almost all its heating has been converted in the past decade to schemes which distribute steam or hot water generated by geothermal energy or waste heat. A 1980 referendum decided that nuclear power should be phased out, but this has still not been finalized.The decision to abandon oil puts Sweden at the top of the world green league table. Iceland hopes by 2050 to power all its cars and boats with hydrogen made from electricity drawn from renewable resources, and Brazil intends to power 80% of its transport fleet with ethanol derived mainly from sugar cane within five years...

Sweden has a head start over most countries. In 2003, 26% of all the energy consumed came from renewable sources--the EU average is 6%. Only 32% of the energy came from oil--down from 77% in 1970.

The Swedish government is working with carmakers Saab and Volvo to develop cars and lorries that burn ethanol and other biofuels. Last year the Swedish energy agency said it planned to get the public sector to move out of oil. Its health and library services are being given grants to convert from oil use and homeowners are being encouraged with green taxes. The paper and pulp industries use bark to produce energy, and sawmills burn wood chips and sawdust to generate power.

Full Article

Are Billion $ Oil Industry Giveaways Supporting Our Addiction?

2006-02-15T07:16:00.000-08:00

I'm not sure how this act meshes with Bush's plan to kick the oil habit? Can someone please explain to me why billions are being given to an industry making billions, when billions could be invested in new technology or alternative energy sources or any other method to reduce our oil demand in the U.S.?

Government may waive near $7 bln in oil, gas royalties

The government may waive up to $7 billion in royalty payments from companies pumping oil and natural gas on federal territory in the next five years, the New York Times reported on Tuesday, citing administration officials and budget documents.

The royalty relief would amount to one of the biggest giveaways of oil and gas in U.S. history, even though the administration assumes oil prices will remain above $50 a barrel throughout that period, the Times report said.

The report cited estimates in the Interior Department's recent budget plan that would allow companies to pump about $65 billion in oil and natural gas without paying royalties.

Administration officials cited by the report said the benefit stems from regulations dating back to 1996, when energy prices were relatively low and lawmakers wanted to encourage exploration in higher cost areas such as the deep waters of the Gulf of Mexico.

Much of the oil and gas from such leases is just beginning to be pumped due to the time required to explore deep waters and build large offshore platforms.

"We need to remember the primary reason that incentives are given," said Johnnie M. Burton, director of the federal Minerals Management Service, according to the report. "It's not to make more money, necessarily. It's to make more oil, more gas, because production of fuel for our nation is essential to our economy and essential to our people."

Source

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America's Oil Addiction

2006-02-07T21:44:00.000-08:00

So no, I didn’t watch Bush’s State of the Union speech the other night. It’s a bit painful to watch Bush try to communicate his speechwriter’s ideas and thoughts to the American people. Painful AND embarrassing. So I caught the highlights, and one of the biggest highlights of course, was his assertion that America is addicted to oil. I wanted to jump up and scream, HEY, that’s what I’ve been saying/blogging all along! But before I could get too excited, I thought about WHO was saying that America was addicted to oil. While I thank Bush for raising a very important point that most average Americans overlook on a daily basis, I have more than a few problems with his message. His words of reducing our dependence on Middle East Oil ring hollow. Bush is a big Texas oil man. His daddy is an oil man. His family made and continue to make their money in the oil business. Many a oil company contributed to Bush’s election and re-election. The family has significant ties with the Saudi’s, who control the largest amount ultimately recoverable oil reserves in the world. The idea of Bush doing anything to significantly reduce our dependence on oil is more than unlikely, it’s more than highly improbable, it’s freaking ridiculous.

By focusing on the Middle East, Bush fails to mention to the American people that the other places where we get our oil from are countries that reflect political and civil instability and a growing resentment towards the United States and the Bush administration’s foreign policies. So, why would Bush be so concerned with getting off oil in the Middle East when we currently only import 15% of our oil from the Middle East? Could it be that he’s hinting in a very indirect way, that in the future, major oil reserves outside of the Middle East are expected to go into decline, and the U.S. will be forced to import our oil supplies from the only big game still left in town…Saudi Arabia? Is it possible that Mr. Bush was trying to use the Middle East as a cover, in an effort to bring up our vulnerabilities to Peak Oil occurring, without scaring Americans half to death and instigating an economic recession?

And Bush’s plan to beat the oil addiction with ethanol and new technology kind of gives you that warm fuzzy feeling about the strength and resilience of the American economy and our people, but it’s all a bunch of BS. In no time soon are we going to be able to grow enough crops or convert enough waste to be able to produce enough ethanol fuel to quench the demand of our transportation industry. The land/resource requirements for producing ethanol are enormous when you bump it up against our current demand for fuel. Airplanes are not going to start magically running on ethanol in five years. We have so many derivative uses of petroleum products – from wire insulation to buttons to contact lenses to plastic bottles to fertilizers and pesticicdes -- it is simply impossible for ethanol or any other substance known to man right now, to replace petroleum completely or even partially. You can’t get a plastic bottle from wind energy. You can’t make contact lenses from the sun’s beams. You can’t produce fertilizers from hydrogen fuel cells. Don’t believe the hype. We are not going to technologize our way out of this situation in an easy and worry-free manner. Forget the warm and fuzzy feeling…

I’m tired of politicians playing around with issues that can and will have a profound effect on the world, and more importantly my life and the lives of my friends and family. I’m tired of them bringing up issues in a superficial manner without explaining WHY our oil addiction is a danger to our nation. If people really analyzed his message (and I’m pretty sure most people didn’t), one might start to ask some important questions about the reality of our oil situation. How much oil is there in the world? How much does the Middle East own? How secure is the United States oil supply? How much oil does the US use? How much oil does the world use? Where does the U.S. get it’s oil from? Is there political instability in these countries? How would oil prices be affected by instability in these countries? What industries in the United States rely on a cheap and secure oil supply? Would these industries be able to survive if oil prices continued to increase? How would the US economy be affected if these industries didn’t survive? Would companies in these industries lay off many workers? Would the US economy be able to absorb this level of unemployment? In what other ways will our lives as individuals be affected by higher oil prices?

It’s sad that there are so many questions that should be asked of our President and our federal and local governments that are being glossed over. I suspect the President’s comments in his State of the Union speech have more to do with bolstering support for Republicans in the upcoming elections, trying to turn around his public approval rating percentages, increasing support for his war in the middle east, and stealing the thunder from critics in the Democratic party regarding his lack of a new energy plan, than his genuine concern over America’s oil addiction. I doubt that Bush will make any significant strides in putting his goal to reduce dependence on oil into action during the remaining 3 years of his presidency.

Related Articles:

Bush Budget Would Cut Some Energy Programs
Oil Man Bush Is Singing A New Song
Feeding The Oil Addiction
Kicking the Oil Addiction: Bush Lied, Again (Editorial)

Energy Crisis for Humanity?

2006-01-30T22:46:00.000-08:00

Fossil fuels have been the cheapest and most convenient so far.It is perhaps too early to talk of an energy “crisis“. But take your pick from terms like “serious concern“ and “major issue“ and you will not be far from the positions which analysts are increasingly adopting. The reason for their concern can be found in a set of factors which are pulling in glaringly different directions:

* Demand for energy, in all its forms, is rising
* Supplies of key fuels--notably oil and gas--show signs of decline
* Mainstream climate science suggests that reducing greenhouse gas emissions within two decades would be a prudent thing to do
* Meanwhile the Earth’s population continues to rise, with the majority of its six billion people hankering after a richer lifestyle--which means a greater consumption of energy.

Underlying the growing concern is the relentless pursuit of economic growth, which historically has been tied to energy consumption as closely as a horse is tethered to its cart. It is a vehicle which cannot continue to speed up indefinitely; it must at some point hit a barrier, of finite supply, unfeasibly high prices or abrupt climate change. The immediate question is whether the crash comes soon, or whether humanity has time to plan a comfortable way out. Even if it can, the planning is not necessarily going to be easy, or result in cheap solutions. Every energy source has its downside; there is no free lunch, wherever you look on the menu, bbc.co.uk reported.

Runaway Horse
The International Energy Agency (IEA) predicts a rise in global energy demand of 50-60% by 2030. If all else remained equal, that rising demand would be accommodated principally by fossil fuels, which have generally been the cheapest and most convenient available. But oil supplies show signs of running down; this, combined with concerns about rising demand and political instability, conspired to force prices up from $40 a barrel at the beginning of 2005 to $60 at its close. There is more oil out there, for sure; but the size of proven reserves is uncertain, with oil-producing countries and companies prone to exaggerate the size of their stocks. Currently uneconomic sources such as tar sands could be exploited; but at what cost?

Natural gas stocks--in recent times the fuel of choice for electricity generation are also showing signs of depletion, and there is growing concern in Western capitals about the political instability associated with oil and gas supplies from the Middle East and Russia. Coal, the fuel of the industrial revolution, remains relatively abundant; but here the climate issue raises its provocative head most volubly, because of all fuels, coal produces more greenhouse gas emissions for the energy it gives. Based partly on the predicted availability of cheap coal, the IEA forecasts a 50% rise in greenhouse gas emissions by 2030. Mainstream climate science, meanwhile, indicates that to avoid dangerous consequences of climate change, emissions should fall, not rise, by 50%. The economic and environmental horses are clearly pulling in mutually incompatible directions.

No Climate Curbs
It is a rare human that dons a hair shirt voluntarily; and in seeking to deal with climate change, we are, it seems, behaving to type. It took the world’s most comfortably-off nations more than seven years to bring the Kyoto Protocol into force following its signing in 1997. An alternative “climate pact“, the Asia-Pacific Partnership on Clean Development and Climate, emerged last year contending that technology alone would solve global warming. It recently concluded its first ministerial meeting by endorsing projections that under its aegis, emissions will at least double by 2050; economic growth is sacrosanct, and so consumption of coal and other fossil fuels must also continue to rise. Concern over climate change, then, is not on a global basis proving to be a driver for clean technology or for reducing demand for energy.

Price Barriers
Rising prices or simply constraints on supplies of fossil fuels could, however, bring other fuels into the equation; and nuclear fission is at the head of the queue. According to the World Nuclear Association, there are now about 440 commercial reactors in the world, providing 16% of its electricity; for major developing countries such as India and China, nuclear power remains both a significant part of the electricity mix and a close companion to military programs. But concerns over waste have set other countries such as Germany on a determinedly non-nuclear path. Waste apart, nuclear faces another potential obstacle; stocks of uranium are finite.

Source

Ready For $262/Barrel Oil?

2006-01-29T23:08:00.000-08:00

..Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel.

To come up with some likely scenarios in the event of an international crisis, his team performed what's known as a regression analysis, extrapolating the numbers from past oil shocks and then using them to calculate what might happen when the supply from an oil-producing country was cut off in six different situations. The fall of the House of Saud seems the most far-fetched of the six possibilities, and it's the one that generates that $262 a barrel.

More realistic -- and therefore more chilling -- would be the scenario where Iran declares an oil embargo a la OPEC in 1973, which Browder thinks could cause oil to double to $131 a barrel. Other outcomes include an embargo by Venezuelan strongman Hugo Chavez ($111 a barrel), civil war in Nigeria ($98 a barrel), unrest and violence in Algeria ($79 a barrel) and major attacks on infrastructure by the insurgency in Iraq ($88 a barrel).

...Although there are long-term answers like ethanol, what's needed is a crash conservation effort in the United States. This doesn't have to be command-and-control style. Moral suasion counts for a lot, and if the president suggested staying home with family every other Sunday or otherwise cutting back on unnecessary drives, he could please the family values crowd while also changing the psychology of the oil market by showing that the U.S. government is serious about easing any potential bottlenecks...

It's been done it before. For all the cracks about Jimmy Carter in a cardigan and his malaise speech, America did reduce its use of oil following the price shocks of the 1970s, and laid the groundwork for low energy prices in the 1980s and 1990s. But it would require spending political capital, and offending traditional White House allies, and that's something this president doesn't seem to want to do.

Read Full Article

India Tells U.S. "Oh, No You Didn't!"

2006-01-29T22:15:00.000-08:00

I couldn't help myself regarding the post title. It came to me in the shower and I went with it.

The United States is really showing how little power and influence we have in the world, when we have to resort to bullying tactics like this to get our way. I wonder what we did to scrape together our Coalition of the Willing to start the war in Iraq.

I'll be keeping tabs on this issue in the future as I'm more than curious to see how it plays out...
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A landmark nuclear deal between India and the United States will "die" in Washington if New Delhi supports Iran at the upcoming meeting of the U.N. atomic watchdog agency, the U.S. ambassador said Wednesday.

A week before the International Atomic Energy Agency meets to discuss Iran's nuclear program, U.S. Ambassador David Mulford said that if India does not vote to refer Tehran to the U.N. Security Council, it would be "devastating" to the deal currently before the U.S. Congress.

After Mulford's comments, India reiterated that the two issues should remain separate.

"We categorically reject any attempt to link (Iran) to the proposed Indo-U.S. agreement on civil nuclear energy cooperation, which stands on its own merits," Indian Foreign Ministry spokesman Navtej Sarna said in a statement.

"The position that India will take on this issue at the IAEA will be based on India's own independent judgment."

The separation is necessary because the United States has only agreed to recognize India as having a civilian nuclear program - not as a legitimate nuclear weapons state.

The deal was signed in July when Indian Prime Minister Manmohan Singh visited Washington, and marked a major policy shift for the United States, which imposed sanctions on India in 1998 after it conducted nuclear tests. The restrictions have been lifted.

IAEA referral of Iran to the Security Council could lead to economic and political sanctions against Tehran, which the United States and European powers fear could use its nuclear program to develop weapons. Tehran insists its program is for generating electricity.

Related Articles:
India Protests US Nukes Statement
India Defies Pressure Over Iran Case

Instability in Nigeria = Higher Oil Prices

2006-01-24T21:22:00.000-08:00

So I finally got around to reading Osama Bin Laden's transcripts that he's put out over the years and I've come to two conclusions: 1) he's hella pissed and 2) he has more than a few valid criticisms of the United States. One of them being that the U.S. is continually guilty of raping other countries of their natural resource wealth and causing/supporting instability and suffering for the people in these countries. Well Bin Laden's not the only one who's fed up, many people are mad at the US and our corporations, and they're resisting our influence and fighting injustices with everything in their power. Enter Nigeria...where the United States is expected to get 25% of its oil in the future.

If I learned anything from actually listening to what Bin Laden had to say instead of forming an opinion based on quantified in the national media, it was that the United States can't expect and maintain national security and dominance off the sweat and blood of other countries and expect that there will be no backlash and no repercussions. But back to peak oil...(or were we already there?). Nigeria is yet another example of how unstable oil markets are. A small disagreement between a village and Royal Dutch Shell over an oil spill has significantly contributed to the rise in world oil prices. Imagine what a would a major event would do to world oil markets...

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The dispute grew out of a disagreement over which contractor should clean up the oil spill. In the wake of the accident, the village council appointed a contractor to do the job. Shell appointed another, and when he arrived, villagers chased him away.

The reason: The village-appointed firm had agreed to do such things as fixing the village's defunct water wells and providing plastic chairs for residents sit on. Then, villagers say, the Shell-appointed man came late one night with a bevy of drunken soldiers - and Shell's approval - and ransacked the village, leaving one teenager hospitalized and four houses and two cars destroyed. Shell, in a statement, denies inviting "any security agents into the community" and says the villagers have impeded cleanup....

Four international oil workers were taken hostage by armed men in speedboat last week... On Monday, one of the four hostages read a list of the captors' demands, including local control of oil wealth, a $1.5 billion payment by Shell to compensate for pollution, and the release from jail of an oil-region militia leader.

"Is this road fitting for an oil-producing community?" asks indignant village chairman Mr. Oweh, pointing to the bumpy dirt track that is his village's main street.

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"The loss of more Nigerian oil could send the price to $80 or $95 per barrel or higher," says David Goldwyn, a former US assistant energy secretary who now consults in the region.

Nigeria's production has dropped by nearly 10 percent. Given the instability here, he says, "The likelihood of a significant disruption" to Nigeria's output of about 2.6 million barrels per day "always has to be counted as relatively high."

Already, two attacks in recent days on some of Shell's roughly 1,000 oil wells and 80 pumping stations caused a drop of 220,000 barrels a day in output - nearly 10 percent of Nigeria's 2.5 million barrels a day in exports.

Related Articles

Behind Rising Oil Cost: Nigeria
Oil Inflames Nigeria's Ethnic Tensions

Those "Wackos" in Venezuela

2006-01-22T13:06:00.000-08:00

The Government of Venezuela announced a statewide heating oil assistance program in Massachusetts on Nov. 22, and a similar program in The Bronx borough of New York on Dec. 6, 2005. Discussions for further expansion of the program are underway in several other states, including Delaware, Vermont, Connecticut and Pennsylvania.

“It is imperative we act to ensure our citizens are safe and warm this winter. The cost of heating oil has risen dramatically and the federal government has failed to provide the resources needed to help Maine citizens. We are grateful to CITGO and the Venezuelan government for their generosity,” said Governor of Maine, John Baldacci.

Baldacci said the deal was not about politics: "We have over 24,000 low-income seniors who are making less than $12,000 a year and they really need this assistance."

He added that Citgo was the only major oil company to respond to an appeal by 12 U.S. senators for assistance this winter. "It's a year when big oil companies have record profits. We encourage other companies also to come forward."

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The Stats:

8 million gallons of heating oil at a 40% discount converted into additional funds for Maine’s 48,000 Low Income Home Energy Assistance Program recipients.

900,000 gallons of heating oil at a 40% discount to Native American tribes

120 thousand gallons donated to homeless shelters and other institutions

Maine' estimate of CITGO’s total donation will be approximately 5.5 million dollars.

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“Some have tried to read politics into these outreach programs”, said Venezuelan Ambassador Bernardo Alvarez. “This program has a human face. Venezuelan President Hugo Chavez made a promise in New York City following hurricanes Katrina and Rita and this Maine heating oil program represents the goodwill between the people of Venezuela and the United States. Help for those who need it most is a cornerstone of the new Venezuelan economy under President Chavez, and this program, following similar ones in Massachusetts and the Bronx, is part of a new effort to increase regional integration. ”

“CITGO is pleased to be part of another assistance program for those in need,” said Felix Rodriguez, CITGO’s CEO. “CITGO has over 160 gas stations in Maine, and we are proud to be responsible corporate citizens in the communities in which we operate, especially when the need is great. This is not about politics, this is not about oil. This is about life, about improving the lives of poor people. This is about people helping people.”

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Damn "wackos" . Thanks McCain.

Related Articles:

Venezuela Donates More Heating Oil to the Poor
Venezuela-CITGO 8 million gallons of Low-Cost Heating Oil Arrived to Maine

If You're Not With Us, You're Against Us

2006-01-22T12:42:00.000-08:00

Senator John McCain made the following remarks on a Fox News interview on 1/22/06:

"We've got to get quickly on a track to energy independence from foreign oil, and that means, among other things, going back to nuclear power."

"We better understand the vulnerabilities that our economy, and our very lives, have when we're dependent on Iranian mullahs and wackos in Venezuela..."

Source: US Can't Be Held Hostage for Oil

I'm more than a little concerned, if this how the discussion is going to go, when it comes to America's (and the world for that matter) future energy economy. The United States seems to turn everything into a good vs. evil issue, where we're the good guys of course and everyone else who doesn't agree with us or who don't want to put our national security and economic interests before their own are "obviously" against us.

The problem with this good vs. evil mentality (that has been perpetuation by President Bush and his alleged war on terrorism) is that it is extremely simple and presents a one-sided approach of dealing with some seriously complex issues in the world. We have used and abused other countries and their resources around the world, all in the name of globalism and maintaining US economic growth and now that some countries are starting to question the status quo, the most intelligent criticism Mr. McCain can come up with is that Hugo Chavez is a "wacko."

I believe that more countries in the world are catching on to the fact that the dominance of the United States in the world is on the downward slope and that our only way of getting our way is name calling and demonizing leaders in other countries and bullying and justifying military action against countries that can't defend themselves.

While Mr. McCain is making a valid point, that the US is vulnerable to political and economic instability in the rest of the world, he's taking a back door approach. Instead of having an honest conversation about limited energy supplies and how vulnerable we really are and all of the options that are available to decreasing our reliance on foreign oil supplies, he's calling people wackos. I know McCain is a presidential hopeful in the the next election, but I'm hoping the American people would have enough sense to not elect someone who resorts to name calling in the face of serious and complex issues.

India & China: Grave Threat or Leaders of Sustainability?

2006-01-16T22:48:00.000-08:00

One of the areas of peak oil thats often purposely understated, is that of population overshoot. It's not brought up that often, because it reeks of "doomsdayer" and although the idea of population overshoot is both logical and likely, I sincerely believe that there's only so much reality people can take at one time, so I'll tread lightly and reserve the red pill for a later date. Cheap and plentiful oil has allowed for and encouraged the world population to grow from 2 billion to 6 billion over the pass century. Factory farming supported by petroleum based pesticides and fertilizers, cheap transportation fuel that made previously unhaitable locations habitable and allow areas with little natural resource endowments to be supported by other locations. The question becomes can the planet support the current population level once oil supplies because scarce in the future? Or will some sort of population retraction be necessary? Mull it over while reading the excerpts and related articles below that ask can the planet sustain growing populations in India and China. The scarier question to ask is can we support the population we already have...

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Energy guzzlers China and India are often blamed for some of the world’s environmental problems, but a new study says the two most populous nations may set the stage for a clean and green earth.

The two countries are mastering energy-efficient technologies, implementing cheap and environmentally responsible transportation systems, and adopting new water harvesting techniques as models for a sustainable economy, says the annual report of the US-based Worldwatch Institute.

“We were encouraged to find that a growing number of opinion leaders in China and India now recognize that the resource-intensive model for economic growth can’t work in the 21st century..."

"Though [China] doesn't admit it yet, the US model won't work for China. And if it does not work for China, it will not work for India..."

China’s solar industry, the world leader, already provides water heating for 35 million buildings, and India’s pioneering use of rainwater harvesting brings clean water to tens of thousands of homes, according to the report...

The world’s most populated nation has successfully pioneered the use of small wind turbines, hydrogenerators and biogas plants for power generation in remote rural areas. China is the world leader not only in solar hot water technology but in producing superefficient fluorescent light bulbs.It aims to roll out a bus system that combines the speed of a subway with the affordability of a bus. Trials have been held and bus use has jumped fivefold during rush hour, the report says. Electric bicycles are also becoming popular, with domestic sales having reportedly trebled the projected sales of cars....

India, which has a tradition of promoting renewable energy, has built the world’s fourth-largest wind power industry. It wants to increase renewable energy’s share of its power from 5 percent to 25 percent.

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"Both nations are signatories of the Kyoto Protocol, but as developing nations they are exempted from cutting their emissions. However, China has already taken voluntary measures which have had a very positive impact," Verholme said.

Referring to last year's gathering on global warming in Canada, Verholme said: "What we saw in Montreal now was that while China came forward with measures it has taken to improve environmental sustainability, the US did not."

------------

Some critics might find the worries of these US environmentalists hypocritical, since the US is still the greatest burner of oil, using 25 percent of global annual supplies and producing 25 percent of carbon emissions.

The US also has the largest ecological footprint. The average US citizen requires about 9.7 hectares to provide consumable resources and space for waste, an amount that is 205 percent of what the country can provide within its borders.

That figure is only 1.6 hectares for the average Chinese person, or 201 per cent of the country's capacity, and 0.8 hectares for the average Indian, or 210 per cent of the country's capacity.

Related Links

Can Our Planet Support the Rise of China and India?
State of the World 2006 - Worldwatch Institute
Rise of India Wake Up Call for US

Do You Think It's Time To Get Tougher With Iran?

2006-01-14T13:56:00.000-08:00

MSNBC asked the above question today, and I found it infuriating. It's symptomatic of the way the media doesn't give the American people enough information to objectively evaluate world affairs and poses sensationalizing questions like this one to polarize people on opposite ends of the spectrum instead of taking an honest look at issues. Here's my feedback that I provided to MSNBC:

I think that the media is leading the American people down the wrong path, in the same way they did with the lead up to the war in Iraq, by automatically siding with the Bush administration to demonize Iran. The media is not questioning what rights the U.S. has to dictate whether Iran can generate nuclear energy for civilian use. The media fails to inform the viewing audience up the tenets of the Nuclear Proliferation Treaty, especially the following tenet: "The right to peacefully use nuclear technology." The media should focus on what evidence the IEA or the US has that Iran is developing nuclear weapons. The media should focus on the issues surrounding Iran's 20 year plan for energy security and not to be dependent on a dwindling fossil fuel supply in the world. The media should focus on other countries who have the rights to nuclear technology, use it for civilian use, and their plans to get off fossil fuels in the future (i.e. France, Germany, etc.). France derives approximately 70% of its energy from nuclear technology and a recent news article stated that no French train shall use fossil fuels by 2026.
The media should stop framing the debate as to what the US should do about Iran and referring to the issue as Iran's nuclear program or Iran defends Nukes program, alluding to the fact that it’s common knowledge that Iran wants to use this program to develop nuclear weapons. It's irresponsible reporting and if it continues, there should be no question in the future as to why US citizens believe that Iran is evil, it’s only agenda is nuclear weapons, and military action or extensive UN sanctions are justified. Give the people the full story instead of effort at sensationalism.

Those Crazy Iranians & Their Nukes

2006-01-12T22:41:00.000-08:00

“If the world arrogant powers and their allies create obstacles for the nation to access advanced technology, they will regret it. We cannot ignore our legitimate rights.“ ~Akbar Hashemi Rafsanjani
“In this age of democracy, the legitimate right of a country that wishes to utilize modern technology is being violated,“ he said.
“This onslaught has its roots in the imperialist nature of the West, which plans to keep other countries backward. The western philosophy is that the country, which stands on its own feet, finds access to advanced technology and overcomes ignorance, must be punished,“ he said. (Source)

The evening news tonight was horribly reminiscent of the media reports leading up to the war on Iraq. Iran resumed it's nuclear research this week and the United States and other members of the international community are seemingly frantic and just about ready to pull their hair out. They accuse Iran of violating the Nuclear Proliferation Treaty which has three pillars:

1) Non proliferation - The U.S., China, Russia, France, and the UK are
considered Nuclear Weapon States (NWS) and they can own nuclear weapons
but they agree not to transfer nuclear weapons technology to other states,
and the non-NWS state parties agree not to seek to develop nuclear weapons.

2) Disarmament - NWS parties pursue to reduce and liquidate their stockpiles; Article X states that any state can withdraw from the treaty if they feel that "extraordinary events", for example a perceived threat, force them to do so.

3) Right to peacefully use nuclear technology

Iran is asserting the third pillar, as leaders say they want to do nuclear research for civilian energy purposes. Iran wants to kick the oil habit and although it receives lots of revenue from oil sales, it's refineries are crap and outdated, so it imports a large % of it's gasoline from other countries. I believe Iran is more aware of the looming energy crisis than most parts of the world and they are trying to work towards a decreased reliance on oil in general, as the country's future depends on finding a new energy source.

The U.S position is "we don't trust 'em." I think we should have well learned our lesson with Iraq, that you can't just go around starting wars with every country in the world you don't trust but when you've got the lone ranger for a president, you never know what he'll do next. The problem is , we're stretched thin in Iraq...unless Bush wants to reinstate the draft right quick, and bankrupt our country a little more, we can't afford to send more troops into Iran right now. Thank God. 2nd option is diplomacy...you know, that thing we forgot to give a sincere chance, regarding Iraq. The irony is staggering, as folks are starting to realize that the United Nations implementing economic sanctions on Iran and cutting off their oil exports would only backfire and hurt US consumers as Iran's pumps out a little over $2M barrells of oil a day (about 5% fo the world's oil production). Sanctions on Iran mean higher oil and gas prices at the pump. Are they really that evil that Americans are willing to hurt a little more in their pocketbooks? I'll stay tuned to the news to figure out what other responses (i.e. punishment) the world has in store for Iran.

Does Iran have the right to develop peaceful nuclear technologies to provide a secure energy structure for its people? Yes. France is doing it (No French Train Will Use Fossil Fuels by 2025). The Unites States (when we finally wake up) will do it. Why can't Iran? Does the United States or the UN council have any right to impose punishment/penalties against a country just because we don't trust 'em? No. Must I revisit the "imminent threat" campaign and assurance by the Bush Administration (Bush, Condi, Powell, Cheney...) that Sadaam had weapons of mass destruction? I'm preparing for a similar campaign against Iran, regardless of whether Iran's intentions are genuinely to generate civilian energy or not.

I can't help pulling for Iran on this one. If they are developing nuclear weapons, the UN should step in, if nobody can prove that they are, then the international community should back off. Nobody seems to be saying anything regarding the United States refusal to adhere to the second pillar and reduce its nuclear stockpiles. I personally think the United States and it's nuclear weapons combined with the direction our foreign policy has recently taken...poses a far greater threat in the world, than Iran right now.

Iranian Press Scorns Nuclear Criticism

Iran Agrees To Suspend Nuclear Enrichment Program(11/29/04)

Solary Energy Momentum in California

2006-01-12T21:07:00.000-08:00

SAN FRANCISCO - Hoping to make California a world leader in solar power, state energy regulators Thursday approved some $3 billion in customer rebates over the next decade to encourage people to install solar panels on their roofs.

The goal of the project is to get Californians to install equipment capable of producing 3,000 megawatts of solar electricity on 1 million homes, businesses and public buildings over the next 10 years.

The state Public Utility Commission voted 3-1 to provide $2.9 billion in rebates for solar panels between 2007 and 2016. Last month, the five-member PUC approved $300 million in rebates for 2006.

Solar advocates said the $3.2 billion program would make solar energy more affordable, create jobs, reduce air pollution and cut emissions of heat-trapping gases blamed for global warming. (Full Article)

It's time's like these that I'm proud to be a Californian. So I know I just moved here a little over year ago, but I claim this beautiful state as my own. In order to mitigate our coming energy crisis, all levels of the government and local communities need to start investing in renewable energy and that includes solar energy. There's two basic ways to decrease our energy consumption. Penalties and incentives. There needs to be incentives for people to decrease their consumption and $ 3 billion over the next 10 years in California is a step in the direction...definitely not enough as a standalone move, but the ground work is definitely being laid down for other states to follow and othe incentives to be implemented.

Russia vs. Ukraine: Lessons Learned

2006-01-08T18:34:00.000-08:00

At the beginning of the year, Russia announced that it was cutting off natural gas supplies to it’s neighbor, Ukraine, as Ukraine refused to submit to demands to go from paying $50 to paying $230 (approx. market rate) per 1000 cubic centimeter of natural gas. As always, there’s two sides to the story, and Russia reportedly believed that Ukraine deliberately stopped negotiations in order to make Russia look like an enemy, and Ukraine believed cutting supplies were payback for the country’s ties to the West and increasing independence from Russia.

Europe proved to be vulnerable, as European countries relied on Russia for up to 30% to 100% of their gas supplies. Although Russia claimed that supplies to Europe would remain uninterrupted, European countries reported that gas received was not at normal levels. The United States expressed concerned of course and chided Russia for their actions, noting that other transitions were available to get Ukraine to pay market rates rather than increasing natural gas prices 4X the old price in the 3 month period. In the end, the embargo ended after a few days under a new deal, Russia will sell natural gas to an intermediary company at $230 per 1,000 cubic meters, while Ukraine will buy gas from that company as it comes into the country for $95.

So why does any of this matter? I think the Ukraine/Russia situation shows how vulnerable any country is to political instability and supply disruptions in other countries. It shows the immediate importance of not only diversifying our energy mix but also shifting over to a new energy economy completely before we caught up in a global war for quickly depleting natural resources. Most of the time Americans like to think of themselves as an island but the realities of global economic and energy interdependence are right there in front of us. Iraqi’s are feeling the effects of oil field bombings and attacks within their own country. In 1973, the US felt the effects of the OPEC Oil Embargo, and all Americans were witnesses to the havoc Hurricane Katrina causes on retail gas prices.

We’re vulnerable and we’ll remain vulnerable in the future to natural disasters and political instability in the Middle East, especially Saudi Arabia. 60% of the remaining recoverable oil reserves reside in the Persian Gulf and if political instability broke out in Saudi Arabia or other OPEC oil countries, dramatic price increases and swings would occur. Supply disruptions might also occur out of necessity. There are many concerns about the United States large reliance on our good neighbor, Canada, for our natural gas supplies. Guess what? Canada won’t be able to satisfy the United States unmitigated demand for natural gas resources in the future, due to capacity reasons, but also for the simple fact that they’ll need the gas to support their own economy and citizens. They’ll also need it to mine their unconventional oil reserves (i.e tar sands) and at some point, won’t be able to put the needs of the Unites States before their own. I expect the same situation to happen in other countries, where the United States imports petroleum resources.

So while the lesson learned from the Ukraine/Russia dispute might be Europe needs to diversify it’s energy resources, while diversification is good, it still won’t fully mitigate severe supply disruptions that are likely to occur in the future. It’s no wonder that the United States goes to such lengths, such as creating a war with Iraq based on misinformation, to be able to police areas of the Middle East, secure energy supplies and keep the oil flowing to benefit US interests.

New Idea: Mobile Air Rotors Use Wind to Generate Electricity

2006-01-06T14:09:00.000-08:00

Large MARS units may be deployed to supplement established grid systems supporting the electrical requirements of large urban areas.This tethered device generates electrical energy as it rotates about a horizontal axis in response to wind. As a closed structure, the lighter-than-air Magenn Power Air Rotor System (MARS) lets the company produce wind rotors that are operable between 1 meter/sec and in excess of 28 meters/sec. The electrical energy is transferred down the tether to a transformer at a ground station and then transferred to the electricity power grid. Helium sustains the Air Rotor, which ascends to an altitude for best winds; and its rotation causes the Magnus effect, providing additional lift, stabilization, and causing it to pull up overhead rather than drift downwind on its tether. The distinct advantages of the Magenn Air Rotor System design are as follows:

* Magenn Air Rotor System is less expensive per unit of actual electrical energy output than competing wind power systems.

* Magenn Power Air Rotor System will deliver time-averaged output much closer to its rated capacity than the capacity factor typical with conventional designs. Magenn efficiency will be 40 to 50 percent. This is hugely important, since doubling capacity factor cuts the cost of each delivered watt by half.

* Wind farms can be placed closer to demand centers, reducing transmission line costs and transmission line loses.

* Conventional wind generators are only operable in wind speeds between 3 meters/sec and 28 meters/sec. Magenn Air Rotors are operable between 1 meter/sec and in excess of 28 meters/sec.

* Magenn Air Rotors can be raised to higher altitudes, thus capitalizing on higher winds aloft. Altitudes from 400-ft to 1,000-ft above ground level are possible, without having to build an expensive tower, or use a crane to perform maintenance.

* Magenn Air Rotors are mobile and can be easily moved to different locations to correspond to changing wind patterns. Mobility is also useful in emergency deployment and disaster relief situations.

These points are mutually inclusive. The advantages above combine to make Magenn the most cost-effective wind electrical generation system.

Full Article

Global Warming Exposes Arctic to Oil and Gas Drilling

2006-01-04T20:42:00.000-08:00

Wow. I couldn't believe this report when I read it. Coastal communities will be devastated and vegetation will be destroyed and we're writing reports focused on the next place to drill for oil, so we can continue to release more carbon dioxide into the atmosphere. You know...a crack addict can be sitting in his front yard, butt naked watching his house burn down and the only on thing on his mind is getting his next fix. That's how addicted to oil we are.
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Rising global temperatures will melt areas of the Arctic this century, making them more accessible for oil and natural gas drilling, a report prepared by the United States and seven other nations said on Monday. It predicts that over the next 100 years, global warming could increase Arctic annual average temperatures 5 to 9 degrees Fahrenheit over land and by up to 13 degrees over water. Warmer temperatures could raise global sea levels by as much as 3 feet. Such a change would threaten coastal cities, change growing patterns for vegetation and destroy habitats for some wildlife, but an energy-starved world would have new areas for oil and gas exploration, according to the Arctic Climate Impact Assessment report.

The Arctic region, particularly offshore, has huge oil and gas reserves, mostly in Russia, Canada, Alaska, Greenland and Norway, Reuters reported. Warmer temperatures would make it easier to drill and ship oil from the Arctic, the report said. It did not attempt to quantify the costs of drilling and shipping Arctic oil and gas, or estimate how high energy prices would have to be to justify drilling in the region, Reuters reported.

"Offshore oil exploration and production are likely to benefit from less extensive and thinner sea ice, although equipment will have to be designed to withstand increased wave forces and ice
movement," the report said.

However, land access to energy reserves would likely be restricted due to a shorter season during which the ground is frozen hard enough to support heavy drilling equipment. "The thawing of permafrost, on which buildings, pipelines, airfields and coastal installations supporting oil and gas development are located, is very likely to adversely affect these structures and increase the cost of maintaining them," the report said. Energy companies would find it easier to transport oil and gas because the warmer temperatures would open sea routes.

"By the end of this century, the length of the navigation season...along the Northern Sea route is projected to increase to about 120 days from the current 20-30 days," the report said.

However, a longer shipping season will increase the risk of oil spills, the report warned. The report was commissioned by the United States, Canada, Russia, Denmark, Iceland, Sweden, Norway and Finland. It concluded that global warming is heating the Arctic almost twice as quickly as the rest of the planet in a thaw that threatens millions of livelihoods.

Source

Stocking Oil Piles Makes No Sense

2006-01-04T20:30:00.000-08:00

Interesting...

The rise in fuel prices that followed Hurricanes Katrina and Rita has prompted many members of Congress to call for new and expanded federal reserves of crude oil, diesel fuel, home heating oil, jet fuel and propane. Proponents of stockpiling claim that if the government were to hoard those commodities when prices were low, it could unleash them on the market when supplies are tight, thus dampening price increases and stabilizing the market.

But the experience in this country with the strategic petroleum reserve strongly suggests that such government-managed stockpiles are a waste of taxpayers' money. The reserve should be emptied and closed. Public stockpiles are far more expensive to maintain than many analysts realize. For example, after adjusting for inflation, the petroleum reserve has cost federal taxpayers as much as $51 billion since it was created in 1975. If you divide that sum by the amount of oil in the reserve, that's $80 per barrel by the end of 2003.

Of course, even at that price, some would argue that the reserve is still worthwhile under certain circumstances. That's because many economists maintain that it's not the cost of oil that harms the economy during a price spike, but the microeconomic uncertainty caused by supply disruptions, the costs of adjusting to high prices and the political reaction to soaring energy prices. If large volumes of federal oil were released at the early stage of a supply shock, it could temper those effects.

But the government has never employed the reserve in this manner and probably never will. Politicians are loath to risk a premature release of public crude because one can never know how long a supply disruption might last, how high prices might climb or whether additional disruptions are on the horizon. In its 30-year history, the 700-million-barrel reserve, which was recently authorized by Congress to expand to 1 billion barrels, has been tapped only three major times: 21 million barrels were released at the onset of the Persian Gulf war in the early 1990s, 30 million barrels in September 2000 and 24 million barrels last year after Hurricane Katrina struck. Those releases were so small considering the size of the reserve that one wonders why politicians are so dead set on having a billion barrels.

Another reason for the reluctance to tap the reserve is the widespread belief that it should be maintained as a hedge against an embargo like the one America experienced in 1973. But embargoes are not the powerful "oil weapon" that people think they are. Once a producer sells its oil on the world market, that oil can be bought, sold and rerouted repeatedly. The producer cannot control its ultimate destination. The globalization of oil markets ensures that the United States will always have access to Persian Gulf oil whether OPEC members like it or not.

But what if, instead of an embargo, there was a catastrophic disruption in supply, say the kind that might occur were Al Qaeda to seize power in Saudi Arabia? That scenario is worrisome, but no stockpile would ever be large enough to deal with such a huge disruption. For instance, even if all of the oil in the reserve were released in 2004, it would have amounted to only 2.6 percent of the world supply - nowhere near enough to replace the oil from a major producer on a sustained basis.

Fortunately, it is highly unlikely that political motivations would lead an oil producing state to cut its production so drastically. Those nations need oil money as much or more than oil-consuming nations need the oil. Even anti-American regimes like Iran's and Venezuela's have no interest in economic suicide by suspending oil production...

Full Article

Oil Reserves Part II: Unconventional Oil Reserves

2006-01-03T20:38:00.000-08:00

So I came across Bill Kovarik's website the other day claiming that the media and other analysts were focused too much on relying on statistics that use proven oil reserve figures and how using these figures is myopic, wrong, and even dangerous. Here are a few quotes from the site:

"Unconventional resources, such as extra heavy oils, tar sands, gas in tight sands, and coal bed methane are not considered [in the USGS 2000 assessment] but they must, nonetheless, be recognized as being present in very large quantities.... The two major sources of unconventional oil ... are the extra heavy oil in the Orinoco province of Venezuela and the ... tar sands in the Western Canada Basin. Taken together, these resource occurrences, in the Western Hemisphere, are approximately equal to the Identified Reserves of conventional crude oil accredited to the Middle East."

"To these estimated quantities of conventional oil must also be added the potential for oil resources from unconventional habitats. These are geographically extensive and include the tar sands of the Province of Alberta in Canada, the heavy oil belt of the Orinoco region of Venezuela and the oil shales of the United States, Brazil, India and Malagasy etc. High production costs and low oil prices have hitherto inhibited the inclusion of unconventional oil resources in the world oil resource figures. Now, developing production technologies, coupled with the very much higher market value of oil, convert large quantites of unconventional oil into an effective resource. The volume of this addition to the ultimate oil resource base is a minium of two trillion (2 x 10 to the 12th) barrels (see WEC-CCR) and a maximum of unknown dimensions, given that, to date, there has been no formal search for unconventional oil and no systematic evaluation of its occurrence on a world wide basis."

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What Is An Unconventional Oil Reserve?

"Unconventional" petroleum reserves include:

Heavy oils, which can be pumped and refined just like conventional petroleum except that they are thicker and have more sulfur and heavy metal contamination, necessitating more extensive refining. Venezuela's Orinoco heavy oil belt is the best known example of this kind of unconventional reserve. Estimated reserves: 1.2 trillion barrels.

Tar Sands, which can be recovered via surface mining or in-situ collection techniques. Again, this is more expensive than lifting conventional petroleum but not prohibitively so. Canada's Athabasca Tar Sands is the best known example of this kind of unconventional reserve. Estimated reserves: 1.8 trillion barrels.

Oil Shale requires extensive processing and consumes large amounts of water. Still, reserves far exceed supplies of conventional oil.

I agree with Bill to the extent that in the future, the world will need to diversify its energy base, as our reliance on oil (actually fossil fuels in general) is unsustainable. That diversification will include a variety of the unconventional oil sources he mentions. But I think Bill is missing the point. You can't just shrug off the fact that these unconventional sources can't be classified as "proven" by oil companies and world governments. It is currently uneconomical/unprofitable to obtain oil from these sources and if investors don't see a return on their money, they're not going to invest. The most profitable oil is sweet crude because it's easy to get, the refining capacity to convert sweet crude to gasoline exists, and everybody in the world wants it. Where's the majority of the remaining sweet crude? The Middle East. If you're reading this Bill, it's dangerous NOT to heavily factor in the Middle East when describing the world's remaining oil supplies.

The other point Bill seems to be missing is that Peak Oil is not about running out of oil. It's about running out of cheap oil. Yes, the supplies of uncoventional oil reserves might be plentiful but think about it...if developing these sources is uneconomical right now, the only way these reserves can be developed if oil prices rise considerably and it becomes worth Exxon's time (for example) to mine for the oil. But if oil prices rise that high, what average consumer in the world is going be able to afford the gas/energy/petroleum byproducts produced from this process? What will the high prices do to the US and global economy?

The other point Bill missed (It's obvious that I think Bill has missed the bigger piture here) is that current infrastructure in place to mine these unconventional oil reserves is dependendent on guess what? Oil and natural gas. Miners need equipment that guzzle gasoline, which will be more expensive in the future.

Refining facilities need fossil fuels to remove sulfur and other contaminents. A large amount of natural gas (which is also in limited supply) generated heat is required to process tar sands:

The tar-sands process also uses huge and growing amounts of natural gas -- at a time of soaring gas prices and when gas resources in the Western Canada Sedimentary Basin are starting to decline. So efforts to ramp up tar-sand operations is raising concerns that the natural gas from the MacKenzie Delta in the Arctic region, which is slated to come to U.S. markets, instead could end up being used for tar sands production.

Between 2 to 6 barrels of freshwater are used to process one barrel of oil from tar sands:

Environmentalists contend that tar sands processing requires anywhere from four to six barrels of water for every barrel of oil. But Annisley said Shell uses two barrels of fresh river water for every barrel of oil...There are no industry-wide figures for how much water the companies use, though Woynillowicz contends that at peak production, the sites will use 350 million cubic meters of water a year -- roughly the amount of water used by a city of 2 million.

And if you were wondering, yes we need freshwater and yes, it's also in limited supply. I won't even start on the environmental damage this process causes...

Ok, so I'm picking on Bill to make a point, so we all don't miss the big picture and allow ourselves to be misled by the media or political figures looking around the corner for the next re-election. Our society has grown from 2 billion to 6 billion (and counting) based on the foundation of cheap oil. The solution our oil shortage/energy crisis does not involve jumping on the next limited natural resource and using it to our heart's desire, until it inevitably runs out. There's no free ride.

Unconventional oil sources are just as problematic as other alternative energy sources. New alternative energy require decades of investment and even then, alternatives will not be enough to satisfy the world's projected demand for energy. We're already behind in the game and we don't have decades. We have to immediately focus on long-term thinking and change our way of life and energy policy to become a more energy efficient society that values energy conservation, not mindless oil consumption. Anything less...would be uncivilized.

Click here for Oil Reserves Part I: Who Has Them and Who's Lying?

Peak Oil Related Articles Around The World

2006-01-03T20:19:00.000-08:00

Oil Prices; No Relief in 2006

Despite expectations of tighter supply and high prices, experts say demand growth will remain resilient. Oil prices charged to a record in 2005 and could rise even higher in 2006 as the United States implements clean fuel rules and world energy demand remains strong, experts said on Friday. The outlook means more headaches for businesses already squeezed by soaring energy bills, and consumers who have been forced to pay up for gasoline and winter heating fuel.

“A lot of factors that existed in 2005 will continue in 2006. We expect to see demand stay relatively strong,“ Joanne Shore, analyst at the US Energy Information Administration, told Reuters. While some companies have beefed up their refineries in response to high fuel prices, the new capacity is not expected to match rising demand in the world’s largest oil consumer and will continue to support prices, analysts said. “There have been attempts this year to solve the bottleneck in the refinery part of the energy equation. That is still not resolved,“ said Jason Schenker, analyst at Wachovia Bank in Charlotte, North Carolina.

OPEC, which controls around 40 percent of world crude exports, pumped nearly full out this year to build stocks and help bring prices down from record peaks. But analysts say the group may trim output levels next year to prevent growing inventories from depressing prices, and some OPEC members have signaled they want to lower production limits at its January 31 meeting. “OPEC is going to have to go back to some supply management again if they are going to hold a (price) floor. It should be easy for them to manage, it’s not like they have to cut a lot they will still be at high output levels,“ PFC’s Jamal said.

Full Article

Oil Demand Seen Surging in Coming Decades

THE HAGUE, Netherlands - Global energy needs will surge 50 percent by 2030 and prices will rise if capacity is not significantly increased, the International Energy Agency said Monday in its 2005 World Energy Outlook. There are sufficient oil and natural gas reserves to meet those needs, particularly in North Africa and the Middle East, but about $20.3 trillion in new investments is urgently needed to bring those supplies to the consumer market, the agency said.

Full Article

China Eyes More Energy Cooperations With US

BEIJING - China and the United States should increase co-operation on energy issues ranging from crude oil production overseas to civilian nuclear programs, China's top economic planning body said in a statement on its Web site. Co-operation should be deeper and more efficient, with priority placed on promoting stability in producing nations and secure oil shipping lanes, the National Development and Reform Commission said. The world economy would benefit if China has secure energy supplies, but U.S. concerns about the rise of China's fast-growing economy could lead to restrictive legislation, the commission added.

Full Article

Persian Gulf Insecurity Can Upset Energy Balance

TEHRAN, Jan. 3--Chairman of State Expediency Council (SEC) Akbar Hashemi Rafsanjani said on Tuesday the energy supply and demand is presently balanced.Talking to Saudi Arabia’s ambassador in Tehran, Osama bin Ahmad Al-Sonosi, Rafsanjani said, “Any insecurity in the Persian Gulf region and even other regions of the world can upset this balance. This is not beneficial for anybody.“

Full Article

Oil Reserves Part I: Who Has Them and Who’s Lying?

2006-01-01T12:09:00.000-08:00

One of the determining factors of when peak oil will occur is whether reported proved oil reserves are accurate or whether they’re overstated. The United States defines proven oil reserves as those than can be developed economically (meaning development yields a profit rather than a loss), but apart from the US and a few other countries, published reserves are not well defined and estimation methods are not readily apparent.

According to Colin Campbell, Kuwait added 50% to its proven oil reserve figure in 1985 to increase its OPEC quota, which was based partly on reserves while no corresponding new discoveries had been made and nothing in particular changed in the reservoir. In 1987, Venezuela doubled its reserves by the inclusion of large deposits of heavy oil that had been known for years. Both instances forced other OPEC countries to retaliate with huge increases in their reserves.

Increases in previously discovered reserves can occur over time due to advances in technology, but 30% - 60% increases shown in the picture above aren’t likely.

And even within the United States, companies are toeing the line when it comes to reporting their reserves. Shell caused quite the scandal in April 2004 when it downgraded approximately 22% of its proven oil reserves to less certain categories (possible or probable). An honest mistake you ask? Ummm…no. Shell management allegedly knew about overreporting as early as three years before they came clean with the general public.

Walter van de Vijver complained about the estimates after he took over as chief of the division in June 2001, replacing Sir Philip Watts, who had been promoted to Shell chairman…The report said van de Vijver notified Shell's managing directors in February 2002 that the company's reserve classification rules did not match those of the U.S. Securities and Exchange Commission and that Shell might have overestimated its reserves by 2.3 billion barrels.

"I am becoming sick and tired about lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive /optimistic bookings," van de Vijver wrote in a November 2003 e-mail to Watts, released in the summary.

Other correspondence showed executives knew estimates were wrong but did nothing, the investigators found. Instead, investigators found, executives attempted to "manage" the problem and "play for time" in hopes that future growth would eventually obviate the need to come clean. But "this strategy failed — as business conditions either deteriorated or failed to improve sufficiently to justify historic bookings."

Although investors seem to be confident in US company reserve figures, the SEC is still toying with the idea of issuing new reserve reporting guidance. So you start to wonder, if Shell is monitored by the SEC and fudges its reserves a bit, how much do you want to bet that the remaining big dogs in the oil industry (Chevron-Texaco, Conoco-Phillips, etc) aren’t being as forthright either? Better yet, what about other countries who’s business environment and accounting rules aren’t as stringently regulated?

Al-Husseini just retired as vice-president of oil exploration at the Saudi oil company Aramco and in 2004 he was skeptical about oil production expectations projected by the International Energy Agency (IEA).

The IEA predicts that demand of energy of all types will soar by 59 per cent by 2030... The IEA expects the Middle East Opec states to be pumping 52 million barrels a day by 2030, up from 20 million today. However, Sadad Husseini, a former vice-president in charge of production at Saudi Arabia’s state-owned Aramco oil group, told Channel 4 News that hopes of doubling Saudi production to 22 million barrels a day over two decades to help to meet demand were 'unrealistic' and a dangerous basis for policy."
"I think in total the [International Energy Agency] outlook is much too high for production and it’s unrealistic for the world to be expecting such high numbers from all of the producers, including Saudi Arabia. They’re not only overestimating the Middle East, but they overestimate non-Opec, they overestimate Russia, they overestimate the whole global resource base. And I think this is a rather dangerous situation for the US government policy to be based on."

"I suspect prices around $50 will be with us for a while," he says. And then he issues his own Saudi-related warning. "The excess capacity is no longer there. That will mean more of the volatility and price surges. And the financial markets have yet to wake up to that."

So according to Husseini, its an issue of both exaggerated reserve estimates and exaggerated reserve projections based on the fact we expect demand for oil supplies to go up, but not based in the reality that oil supplies may not be able to satisfy demand.

Long gas lines are potent symbol of U.S. occupation

2005-12-30T12:36:00.000-08:00

I've received some resistance when talking to friends and family about how the U.S. through corporations or military means target countries rich with natural resources and exploit those resources so that Americans benefit and the countries and their people suffer. There is no reason that Iraqis should be paying high prices for oil when they are endowed with one of the biggest remaining oil reserves on the planet, while Americans, who have used up all of their oil, consume cheap oil limitlessly.

By Brian Conley, Updated Dec 10, 2005

BAGHDAD (IPS/GIN) - Although Iraq has the second-largest oil deposits in the world, Iraqis are forced to sit in excruciatingly long lines to buy gasoline and kerosene. Before the recent war in Iraq, the sanctions decreased access to many resources, but gas was still plentiful and affordable. That changed with the U.S.-led 2003 invasion.

After the fall of Saddam’s regime in April 2003, the security situation in Iraq swiftly deteriorated. In addition to the looting of the Iraqi National Museum and ministry buildings, the pipelines carrying Iraq’s oil were sabotaged more than 200 times. The recurring acts of sabotage have greatly depleted Iraq’s local supplies of oil. Much of the oil that is produced is controlled by foreign companies contracted to manage the oil early in the war.

Iraqis believe that the fuel produced in Iraq is exported, and the fuel available for use by Iraqis is imported from Kuwait or other oil-producing nations in the region.

The shortage has dramatically changed daily life in Iraq. Baghdad residents may only drive every other day, depending on their license plate numbers. Some of the wealthier families own two cars with different plate numbers, enabling them to drive any day.

Drivers can only buy fuel on the days they can drive. This restriction, combined with the long gas lines, means that some people can only drive every third or fifth day. The even and odd restriction, and the long gas queues, have had a huge, negative impact on the employment situation.

Drivers are some of the only Iraqis still able to find work in Baghdad. Having lost their previous professional positions or the ability to pursue their education, many members of Iraq’s middle class have pressed their mid-range to luxury vehicles into transporting those lucky enough to have found gainful employment.

Kerosene has also become scarce and expensive. The failing electricity grid has created a large market for kerosene-powered generators. The gas shortages and the long lines mean some families cannot obtain gas to keep their lights on or their houses warm in the winter.

The new Iraqi constitution, passed recently in a historic referendum, has paved the way for increased privatization of Iraq’s oil fields and outsourcing their vast wealth to foreign multinational corporations. As a result, it appears Iraqis will continue to wait in long lines for small amounts of expensive fuel.

Source

Oil Prices Seen 40 Percent Higher for '05

2005-12-30T12:17:00.000-08:00

By BRAD FOSS, AP Business Writer

Many analysts believe the average price of oil will be below $60 in 2006, though not by much as U.S. and Chinese economic growth continues and hawkish members of OPEC, such as Venezuela and Iran, express growing interest in a production cut as early as the first quarter.

"Because of China, oil is never going to go to the $18 to $22 level again in our lifetime," said Mike Fitzpatrick, a broker at Fimat USA in New York. "But it certainly doesn't have to be $60."

Fitzpatrick believes average oil prices will be closer to $50 a barrel in 2006, an outlook predicated on a slowdown in economic growth in the second half of the year — because of high energy prices. "At some point, this has to have a deleterious economic effect," said Fitzpatrick, whose price outlook is more bearish than many of his peers.

One thing that all oil analysts agree on is that the world's largest petroleum producers are pumping almost as much as they can, with little excess production capacity available in the event of a prolonged supply disruption. The mere threat of lost output, whether because of geopolitical strife or a natural diaster, will be enough to keep the market on edge in 2006.

"It won't take much to up the price again next year," said London-based oil analyst John Hall of John Hall Associates.

"My guess is that OPEC is quote committed to holding up the price" at present levels, Hall said.

Hall also focused on Iraq, Iran and Nigeria as potential problem countries, saying output snags and increasing political tensions could drive prices upward.

We're in a post-Christmas lull, but "things will start to warm up when OPEC ministers start talking about what to do," ahead of their January meeting, Hall said. Even now, "they're all saying the same thing — 'we're going to cut.'"

Full Article

What Is Peak Oil Anyways?

2005-12-29T23:24:00.000-08:00

I figured before I started posting a whole bunch of articles surrounding the issue of a coming global oil peak, I should probably try to explain what it is. I've been amazed (but not really, because I do live in the United States - "the greatest country in the world") by the complete ignorance that people have on this subject. Most people haven't heard of it, and to be honest, I hadn't heard of it either before I began reading about it after Hurricane Katrina. But fortunately, I've been equally amazed as to the resources already available on the subject and the tons of thoughtful people who are already trying to get the word out. Here's the best summarized description I found on the subject of peak oil.

What is Peak Oil?
Peak Oil is the simplest label for the problem of energy resource depletion, or more specifically, the peak in global oil production. Oil is a finite, non-renewable resource, one that has powered phenomenal economic and population growth over the last century and a half. The rate of oil 'production,' meaning extraction and refining (currently about 83 million barrels/day), has grown in most years over the last century, but once we go through the halfway point of all reserves, production becomes ever more likely to decline, hence 'peak'. Peak Oil means not 'running out of oil', but 'running out of cheap oil'. For societies leveraged on ever increasing amounts of cheap oil, the consequences may be dire. Without significant successful cultural reform, economic and social decline seems inevitable.

Why does oil peak? Why doesn't it suddenly run out?
Oil companies have, naturally enough, extracted the easier-to-reach, cheap oil first. The oil pumped first was on land, near the surface, under pressure, light and 'sweet' (meaning low sulfur content) and therefore easy to refine into gasoline. The remaining oil, sometimes off shore, far from markets, in smaller fields, or of lesser quality, takes ever more money and energy to extract and refine. Under these conditions, the rate of extraction inevitably drops. Furthermore, all oil fields eventually reach a point where they become economically, and energetically, no longer viable. If it takes the energy of a barrel of oil to extract a barrel of oil, then further extraction is pointless.

Where does the idea of oil peak come from?
In the 1950s a US geologist working for Shell, M. King Hubbert, noticed that oil discoveries graphed over time, tended to follow a bell shape curve. He posited that the rate of oil production would follow a similar curve, now known as the Hubbert Curve (see figure). In 1956 Hubbert predicted that production from the US lower 48 states would peak in 1970. Shell tried to pressure Hubbert into not making his projections public, but the notoriously stubborn Hubbert went ahead and released them. In anycase, most people inside and outside the industry quickly dismissed Hubbert's predictions. In 1970 US oil producers had never produced as much, and Hubbert's predictions were a fading memory. But Hubbert was right, US continental oil production did peak in 1970/71, although it was not widely recognized for several years, only with the benefit of hindsight.

So when will oil peak globally?
Hubbert went on to predict a global oil peak for around 1995. He may have been close to the mark except that the oil shocks of the 1970s slowed our use of oil. As the following figure shows, global oil discovery peaked in the 1960s. Since the mid-1980s, oil companies have been finding less oil than we have been consuming. Source: peakoil.ie

Of the 65 largest oil producing countries in the world, up to 54 have past their peak of production and are now in decline, including the USA (in 1970/71) and the North Sea (in 2001). Hubbert's methods, and variations on them, have been used to make various projections about the global oil peak, with results ranging from 'already peaked', to the very optimistic 2035. Many of the official sources of data used to model oil peak such as OPEC figures, oil company reports, and the USGS discovery projections, upon which the international energy agencies base their own reports, can be shown to be very unreliable. Several notable scientists have attempted independent studies, most notably Colin Campbell and the Association for the Study of Peak Oil and Gas (ASPO). Source: peakoil.ie

ASPO's latest model suggests that 'regular' oil peaked in 2004. If heavy oil, deepwater, polar and natural gas liquids are considered, the oil peak is projected for around 2010. Combined oil and gas, as shown above, are expected to also peak around 2010. Other researchers such as Kenneth Deffeyes and A. M. Samsam Bakhtiari have produced models with similar or even earlier projected dates for oil peak. Precise predictions are difficult as much secrecy shrouds important oil and gas data.

What does Peak Oil mean for our societies?
Our industrial societies and our financial systems were built on the assumption of continual growth – growth based on ever more readily available cheap fossil fuels. Oil in particular is the most convenient and multi-purposed of these fossil fuels. Oil currently accounts for about 43% of the world's total fuel consumption [PDF], and 95% of global energy used for transportation [PDF]. Oil is so important that the peak will have vast implications across the realms of geopolitics, lifestyles, agriculture and economic stability. Significantly, for every one joule of food consumed in the United States, around 10 joules of fossil fuel energy have been used to produce it.

Source: http://www.energybulletin.net/primer.php

Upcoming Screenings for the End of Suburbia

2005-12-29T22:52:00.000-08:00

Upcoming Screenings for the End of Suburbia

January 7, 2006 - Crawfordsville, IN
January 7, 2006 - St. Mary's, ON at 7:00PM at the St. Marys Friendship Centre. John Cowling, the Green Party candidate for Perth-Wellington, will chair the discussion afterwards.
January 12, 2006 - Northampton, MA
January 19, 2006 - Geneva, NY
January 22, 2006 - Leverett, MA
January 27, 2006 - Peterborough, ON
January 29, 2006 - Orlando, FL in Gore Hall at First Unitarian Church of Orlando, 1901 East Robinson St. at 6:30PM. Followed by discussion and a presentation by former county chairman Linda Chapin. Contact: Mighk Wilson
January 31, 2006 - Toronto. ON at the Bloor Cinema. Presented by the Toronto Public Space Committee
March 6, 2006 - Brantford, ON
March, 2006 - Somerset, UK. Details pending.
March 22, 2006 - Washington, DC. Details pending.
April 25, 2006 - Lexington, MA
July 20, 2006 - Norfolk, VA at the Naro Cinema

The End of Oil: Interview with Paul Roberts Part I

2005-12-29T12:37:00.000-08:00

MJ.com: Is the price of gasoline, and energy policy in general, more important as an election issue now than in previous years?

PR: We’re going to find that out. Certainly I thought -- and I think a lot of other observers thought, going in six months ago, that Kerry would be able to hammer the Bush administration on gasoline prices, but the fact is that as soon as you raise the issue, you have to present a solution. Kerry knows that presidents are very limited in what they can do. It really requires a long-term policy, and Kerry is in the process of working on it, but he recognizes that it’s complex. As much as Kerry would like to give a bumper-sticker answer, he knows that, really, you need a comprehensive energy policy. The Bush administration -- as much as I happen disagree with the way they approached it -- they did have a comprehensive energy policy. They came in and said: “We’re not going to preserve. We’re not going to waste our time thinking too much about the alternatives. Efficiency is great, but we’re not going to bet the farm on it. What we’re going to do is to increase production -- past administrations have let the country down because they have not emphasized production. We have not been drilling as much as we should; we aren’t building enough refineries and power plants; and we have not been as careful in building up relationships with oil-supplies -- not just the Middle East, but diversifying our relationships. We need people outside the Middle East, so therefore, we’re going to be working with Africa, the Caspian, and Russia.”

MJ.com: How does Iraq figure into this vision?

PR: Iraq is the centerpiece [of it]. It automatically marks you as a leftist-green-Nader-anarchist in Seattle if you say that it’s a war for oil. But the problem is that it’s been left in this very narrow political context. That's to say, if you say it’s a war for oil, that means that you're against Bush, and if you claim that it’s a war to promote democracy, than you’re for Bush. But you have to give it a much wider context and say that: given that the U.S. uses as much as oil as it does and has done nothing to reduce its demand and given that the global economy on which U.S. power depends entirely; given that global economy depends entirely on oil, mostly from Middle East, the U.S. has no choice but to be intimately connected with Middle Eastern policy, and to intervene -- either diplomatically or economically or worse -- if the stability of the region is threatened. And that this has been the case under any administration. The U.S. has not cut its demand, so it must involve itself in the affairs of its suppliers of oil. But it's been allowed to be staged so narrowly focused that as soon as you raise the war-for-oil rhetoric, you are unpatriotic. But the fact is that the issue is much larger than that and always has been.

MJ.com: With the occupation and the insurgency, there have been attacks on oil terminals. You can make the argument that the Iraq war hasn't stabilized the Middle East.

PR: No, I think it has done just the opposite. Right now we have attacks on oil installations in Saudi Arabia, attacks on oil tankers, and oil-loading ports, such that the oil market now assigns what it calls a “war premium” to the price of oil. It’s between $5 and $10 dollars a barrel. So the market thinks that it hasn’t worked. I happen to think that this war premium is overstated. The contention there is that were it not for the instability in the Middle East, the price of oil would be much, much lower. And I think that although it would be somewhat lower, there is a fundamental tightness in the oil market -- it’s not simply driven by politics. The market is aware that we use 80 million barrels of oil everyday and that our maximum production at this point is 82.5 million barrels of oil a day. So it’s two and a half million barrels of margin -- that’s our cushion, what we call our spare capacity. Most of that margin is in the Middle East, particularly in Saudi Arabia and Kuwait. What that means is that if Venezuela -- which produces two and a half million barrels of oil a day -- were to fall into civil unrest, as it did a year and a half ago and let’s say it took off its oil production, which happened -- Venezuela basically shut down its exports a year and half ago. The market simply lost that oil. Saudi Arabia and Kuwait were able to pump up their production and fill that gap before the prices went too high. Now if that happened, that would pretty much tap out all the spare capacity we’ve been talking about. There would no more room for accidents. There would be no more room for disruptions. What if production in Iraq fell because the chaos continued to grow and oil companies stopped wanting to send their people there? What if Saudi Arabia has some sort of political upheaval?

Paul Roberts is the author of: The End of Oil - On the Edge of a Perilous New World

Farmers Dig Deep To Save on Fuel Costs

2005-12-27T10:07:00.000-08:00

If you think it's expensive to fill up the family minivan, consider the plight of farmers. A tractor uses up to ten gallons of diesel every hour and often runs from dawn to dusk.

In a farm field near Longmont, a tractor pulls a contraption called a "Strip Tiller" through the stubble of last year's corn crop. Three generations of farmers watch the demonstration, organized by the Longmont Conservation District.

"I just think it's a good opportunity to see if it works, and see if we can save some money," says Mike Litzenberger, a local farmer.

The machine cuts a foot-deep groove into the soil where sugar beets will be planted next spring.
This method requires only two trips across the field, instead of the six or seven required by conventional farming techniques. This can save a typical farmer thousands of dollars in fuel costs.

"It's about doubled in the last year or so. It should be a tremendous savings in fuel," Longmont Conservation District's Bill Haselbush says.

The main reason the Soil Conservation Service is promoting the idea, however, is to reduce soil erosion. Instead of turning the soil over with a plow and discing it until it's practically powder, this method leaves stubble in the field and that should help hold the soil in place.

"A lot of times in the spring you'll see topsoil blowing. With this strip till machine it should eliminate that," Haselbush adds.

They hope this tilling technique will also conserve water used for irrigation. Tim Carney, also of the Longmont Conservation District, says "By having crop residue on the surface that acts as a mulch, it may help reduce the need for that first irrigation in the spring. And there's less potential for soil erosion as well."

The real test, however, comes next fall when the crop is harvested. Farmers will weigh the harvest from these test plots and see how it measures up to conventional farming.
The Soil Conservation District is testing the low-till technique on eight farms in northern Colorado. The demonstration will last two years.

Source

Price hikes on tap for 2006: Heating costs: 20% to 40% more

2005-12-22T12:54:00.000-08:00

From homeowners' insurance to home heaters, the sum of your expenses is likely to grow. December 8, 2005: 8:09 AM EST

Warm temperatures stuck around longer than usual this fall, but not long enough to eliminate what are anticipated to be the biggest increases in heating costs in five years.

On average, if you use natural gas to heat your home, you can expect to spend $281 (or about 38 percent) more than you did last year, according to the latest data from the Energy Information Administration. If heating oil is what keeps you warm, you'll pay about $255 (or 21.3 percent) more, while propane-generated heat will run you $167 (or 15.2 percent) more on average.

If you use electric heat, you'll pay $46 (or 6.5 percent) more.
But, the EIA notes, what you eventually pay will depend on local weather conditions, the size and efficiency of your home and heating equipment, not to mention who wins the thermostat wars at night

Full Article

Source

Hybrids - Solution? Denial? or One Step Towards Conservation?

2005-12-22T11:39:00.000-08:00

I had a conversation with my mom last night about energy prices going up the future and she's been hearing that hybrids are the way to go -- everyone must buy hybrids. I'm happy that people are looking into getting greater miles per gallon but I still think people are missing the point. The US (and the rest of the world) are going to have to undergo a complete crash course in conservation to get off oil. I don't doubt that many Americans will do anything in their power to be able to keep their cars and keep on motoring, but I would have to argue that particular sentiment is a form of denial.

Hybrids get better mileage in ideal conditions and the savings are limited. Also, the current price of hybrids prohibit the majority of consumers from obtaining one if even if the prices came down, many people would still not be able to afford to trade in their current car to purchase a hybrid. Our government has the power to incentivize conservation efforts, such as offering tax breaks on hybrid vehicles where more people can afford them, or taxing the use of gas guzzling mileage inefficient vehicles. In San Franciscco, new measures have been put in where hybrid vehicle owners can ride in the HOV lane at any time with one person in the vehicle.

So while i think the increase in demand for demand for hybrids shows the beginnings of American consumers realizing that we can't continue to consume oil like there is no tomorrow, hybrids only offer one small, tiny step towards kicking our oil addicition. American's are being sheltered from the far reaching consequences of our oil addiction and we're behind in the game. Don't you think it's interesting that Japanese and other foreign car dealers have emphasized fuel efficieny for years and now GM and other American manufacturers are struggling (GM is laying off thousands of workers, losing market share, and possibly close to filing for bankruptcy) to get on the hybrid bandwagon? Don't you find it interesting that Honda is not only producing hybrid vehicles but also diversifying by planning to mass produce solar cells by 2007. It's kind of like the rest of the world knows something we as Americans don't know...or at the least, don't want to acknowledge.

Honda CEO says hybrids must become less expensive

Automakers will to have to slash the cost of developing gas-electric hybrid vehicles compared with conventional models before they truly catch on with the public, Honda Motor CEO Takeo Fukui said Tuesday, one day before Honda's new Civic hybrid goes on sale in the USA.

The 2006 Civic hybrid is priced at $21,850, 15% more than the $19,060 for the top-of-the-line Civic with a five-speed automatic transmission. The entire Civic lineup has been redone for 2006. The 2005 Civic hybrid came at about the same premium over the top-of-the-line sedan with a four-speed automatic.

"We do still understand the price difference is rather significant for ordinary consumers," Fukui said. He said that automakers have to find a way to reduce the price difference by about half.
To reduce the price difference further will require attacking costs in the key components that separate hybrids from regular cars — the battery, computer modules and electric motors. Reducing those costs will be easier as consumer demand grows, Fukui said.

He said he sees hybrids as just one solution to the move among consumers to save energy. The company also is developing vehicles powered by hydrogen and natural gas. Fukui isn't writing off conventionally powered cars either, saying he thinks there are still more gas savings that can be wrung out of them.

Full Article

Estimated hybrid tax credits that will be available January 1, 2006:

Brand - Model - EPA mpg city/hwy - Total tax credit

Chev/GMC - Silverado/Sierra 2WD - 18/21 - $250
Chev/GMC - Silverado/Sierra 4WD - 17/19 - $650

Ford - Escape Hybrid 2WD - 36/31 - $2,600
Ford - Escape Hybrid 4WD - 33/29 - $1,050

Honda - Civic Hybrid* - 49/51 - $2,100
Honda - Insight - 57/56 - $1,450

Lexus - RX 400h - 31/27 - $2,200

Toyota - Highlander Hybrid 2WD - 33/28 - $2,600
Toyota - Highlander Hybrid 4WD - 31/27 - $2,200
Toyota - Prius - 60/51 - $3,150

* — for automatic; $1,700 credit for manual transmission modelSources: American Council for an Energy-Efficient Economy, EPA

Full Article

Ford teaches hybrid buyers how to drive

But last weekend, Ford engineers spent two days teaching 300 well-educated, well-connected technology lovers everything they can do to maximize the mileage on their gas-electric hybrid versions of the Escape SUV.

The move comes as more hybrid owners say they are unhappy with the fuel economy they get. Hybrid vehicles are powered by two motors, one gas and one electric, and can deliver much higher gas mileage than traditional engines. But about 60% of hybrid owners say they're not happy with how much gas their cars use, compared with 27.1% for all cars and trucks, according to CNW Marketing Research.

"The auto industry in general needs to do a better job listening to consumer sentiment, especially when there are areas of potential gaps between ad claims and product performance," he says. "For many consumers, there's been some unmistakable disappointment when hybrid cars aren't meeting the full promise staked out in the commercials."

Chuck Schifsky, a spokesman for Honda, admits that consumers get about 10% fewer miles per gallon than the sticker advertises, but he says that's what many people expect.
Fuel economy numbers are calculated by the Environmental Protection Agency, which sticks a tube into the exhaust pipe, runs the vehicle on a treadmill, then figures how much carbon has been burned. That leads to mileage numbers that are often higher than what drivers obtain in the real world.

Full Article

The US Department of Energy Discusses Peak Oil

2005-12-21T22:37:00.000-08:00

In March 2004, the Dept of Energy published a little heralded document on the strategic importance of oil shale; roughly a quarter of the 45 page report is devoted to the subject of oil depletion and its likely consequences. Here are just a few excerpts:

World Discoveries did peak before the 1970's as shown in Figure 6. This figure also shows that no major new field discoveries have been made in decades. Presently, world oil reserves are being depleted three times as fast as they are being discovered...
The disparity between increasing production and declining reserves can have only one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available. The question is when peak production will occur and what will be its ramifications.

Whether the peak occurs sooner or later is a matter of relative urgency...
In spite of projections for growth of non-OPEC supply, it appears that non-OPEC and no-Former Soviet Union countries hve peaking and are currently declining. The production cycle of countries...and the cumulative quantities produced reasonably follow Hubbert's model.
...Although there is no agreement about the date the world oil production will peak, forecasts presented by USGS geologist Thomas Magoon, and others expect the peak will occur between 2003 and 2020...What is notable about these predictions is that none extend beyond the year 2020. [pp. 7-8] The Nation must start now to respond to peaking global oil production to offset adverse economic and national security impacts. [p.26]

Source : The Party's Over / "Strategic Significance of America's Oil Shale Resource" , US Dept of Energy, March 2004

Why Biofuel Is Not The Solution to Our Energy Crisis

2005-12-21T22:28:00.000-08:00

By promoting biodiesel as a substitute, we have missed the fact that it is worse than the fossil-fuel burning it replaces ...

...The idea that we can simply replace this fossil legacy - and the extraordinary power densities it gives us - with ambient energy is the stuff of science fiction. There is simply no substitute for cutting back. But substitutes are being sought everywhere. They are being promoted today at the climate talks in Montreal, by states - such as ours - that seek to avoid the hard decisions climate change demands. And at least one substitute is worse than the fossil-fuel burning it replaces.

The last time I drew attention to the hazards of making diesel fuel from vegetable oils, I received as much abuse as I have ever been sent for my stance on the Iraq war. The biodiesel missionaries, I discovered, are as vociferous in their denial as the executives of Exxon. I am now prepared to admit that my previous column was wrong. But they're not going to like it. I was wrong because I underestimated the fuel's destructive impact.

Before I go any further, I should make it clear that turning used chip fat into motor fuel is a good thing. The people slithering around all day in vats of filth are performing a service to society. But there is enough waste cooking oil in the UK to meet a 380th of our demand for road transport fuel. Beyond that, the trouble begins.

When I wrote about it last year, I thought that the biggest problem caused by biodiesel was that it set up a competition for land use. Arable land that would otherwise have been used to grow food would instead be used to grow fuel. But now I find that something even worse is happening. The biodiesel industry has accidentally invented the world's most carbon-intensive fuel.
In promoting biodiesel - as the EU, the British and US governments and thousands of environmental campaigners do - you might imagine that you are creating a market for old chip fat, or rapeseed oil, or oil from algae grown in desert ponds. In reality you are creating a market for the most destructive crop on earth.

Last week, the chairman of Malaysia's federal land development authority announced that he was about to build a new biodiesel plant. His was the ninth such decision in four months. Four new refineries are being built in Peninsula Malaysia, one in Sarawak and two in Rotterdam. Two foreign consortiums - one German, one American - are setting up rival plants in Singapore. All of them will be making biodiesel from the same source: oil from palm trees.

"The demand for biodiesel," the Malaysian Star reports, "will come from the European Community ... This fresh demand ... would, at the very least, take up most of Malaysia's crude palm oil inventories." Why? Because it is cheaper than biodiesel made from any other crop.
In September, Friends of the Earth published a report about the impact of palm oil production. "Between 1985 and 2000," it found, "the development of oil-palm plantations was responsible for an estimated 87 per cent of deforestation in Malaysia". In Sumatra and Borneo, some 4 million hectares of forest have been converted to palm farms. Now a further 6 million hectares are scheduled for clearance in Malaysia, and 16.5 million in Indonesia.

Almost all the remaining forest is at risk. Even the famous Tanjung Puting national park in Kalimantan is being ripped apart by oil planters. The orangutan is likely to become extinct in the wild. Sumatran rhinos, tigers, gibbons, tapirs, proboscis monkeys and thousands of other species could go the same way. Thousands of indigenous people have been evicted from their lands, and some 500 Indonesians have been tortured when they tried to resist. The forest fires which every so often smother the region in smog are mostly started by the palm growers. The entire region is being turned into a gigantic vegetable oil field.

Before oil palms, which are small and scrubby, are planted, vast forest trees, containing a much greater store of carbon, must be felled and burnt. Having used up the drier lands, the plantations are moving into the swamp forests, which grow on peat. When they've cut the trees, the planters drain the ground. As the peat dries it oxidises, releasing even more carbon dioxide than the trees. In terms of its impact on both the local and global environments, palm biodiesel is more destructive than crude oil from Nigeria.

The British government understands this. In a report published last month, when it announced that it would obey the EU and ensure that 5.75% of our transport fuel came from plants by 2010, it admitted "the main environmental risks are likely to be those concerning any large expansion in biofuel feedstock production, and particularly in Brazil (for sugar cane) and south-east Asia (for palm oil plantations)."

See Full Article: http://www.guardian.co.uk/print/0,3858,5349045-103390,00.html

Peak Oil Debate: It's The End of Oil vs. Oil Is Here To Stay

2005-12-20T09:04:00.000-08:00

~ Kenneth Deffeyes is the author of Beyond Oil

World oil production is about to reach a peak and go into its final decline. For years, a handful of petroleum geologists, including me, have been predicting peak oil before 2007, but in an era of cheap oil, few people listened. Lately, several major oil companies seem to have got the message. One of Chevron's ads says the world is currently burning 2 bbl. of oil for every barrel of new oil discovered. ExxonMobil says 1987 was the last year that we found more oil worldwide than we burned. Shell reports that it will expand its Canadian oil-sands operations but elsewhere will focus on finding natural gas and not oil. It sounds as though Shell is kissing the oil business goodbye. M. King Hubbert, a geophysicist, correctly predicted in 1956 that oil production in the U.S. would peak in the early 1970s--the moment now known as "Hubbert's Peak." I believe world oil production is about to reach a similar peak.

Finding oil is like fishing in a pond. After several months, you notice that you are not catching as many fish. You could buy an expensive fly rod--new technology. Or you could decide that you have already caught most of the fish in the pond. Although increased oil prices (which ought to spur investment in oil production) and new technology help, they can't work magic. Recent discoveries are modest at best. The oil sands in Canada and Venezuela are extensive, but the Canadian operations to convert the deposits into transportable oil consume large amounts of natural gas, which is in short supply.

And technology cannot eliminate the difficulty Hubbert identified: the rate of producing oil depends on the fraction of oil that has not yet been produced. In other words, the fewer the fish in the pond, the harder it is to catch one. Peak production occurs at the halfway point.Based on the available data about new oil fields, there are 2,013 billion bbl. of total producible oil. Adding up the oil produced from the birth of the industry until today, we will reach the dreaded 1,006.5-billion-bbl. halfway mark late this year. For two years, I've been predicting that world oil production would reach its peak on Thanksgiving Day 2005. Today, with high oil prices pushing virtually all oil producers to pull up every barrel they can sweat out of the ground, I think it might happen even earlier.

---------------------

Peter Huber is the co-author, with Mark Mills, of The Bottomless Well The "Peak Oil" theory fits nicely on a cocktail napkin. Its curve looks like this: Colonel Edwin Drake starts pumping crude in Pennsylvania in 1859. We've been pumping faster and faster ever since. Sooner or later, on this finite planet of ours, it just has to run out. U.S. production peaked in the 1970s. Global production will soon be on the downside of the same dismal curve.

Nonsense. Technology and politics--not geology--determine how much we pump and what it costs.

America currently consumes about 7 billion bbl. of oil a year. When production in Persian Gulf fields was ramped up by 12 billion bbl. a year in the 1960s, global prices collapsed. That made it politically painless for the U.S. to ban almost all new drilling off the Florida and California coasts and then in much of Alaska. With oil, as with textiles, domestic production peaked because others began producing the same stuff cheaper, while we contrived to make our production more expensive. Today Alaska contains 18 billion bbl. of off-limits crude. We've embargoed at least an additional 30 billion bbl. beneath our coastal waters. And we could fuel many of our heavy trucks and delivery vehicles for a decade with the 20 billion bbl. worth of natural gas we've placed off limits in federal Rocky Mountain lands.

Outside our borders, Alberta's tar sands contain 180 billion bbl. recoverable with current technology, and Calgarians are pumping that oil today. A total of several trillion barrels of oil soak the sands of Canada and Venezuela alone--a century's worth at the current global rate of consumption. Then there are methane hydrates. The U.S contains some 30 trillion bbl. worth of those frozen hydrocarbons off the shores of Alaska, the continental coasts and under the Rockies. There's little doubt they too can be extracted economically. If we try, we'll certainly find cheap ways to transform North America's 1 trillion bbl. worth of coal into crude as well. General Patton's Third Army completed its roll across Europe on coal liquefied with German technology.

The price of oil has always fluctuated. In inflation-adjusted dollars, it was higher in the early '80s than it is today. Extraction technologies continue to improve much faster than supply horizons recede. We've got the right know-how and the right planet. What we lack is the political will.

Source: TIME Magazine 10/31/05

October 2005 TIME Magazine Article: How To Kick The Oil Habit

2005-12-19T22:49:00.000-08:00

...The frenzy to churn out hybrids and their technological cousins is so fierce that archrivals GM, DaimlerChrysler and BMW have teamed up to build a research and technical center in the Detroit suburbs. And Ford is so desperate to fill 200 open jobs in its hybrid program that it's competing with Toyota to hire engineers from the software and aerospace industries. The stakes are high: Ford and GM announced third-quarter losses of nearly $2 billion combined last week, thanks in part to plunging sales of SUVs.

It doesn't take a Ph.D. economist to figure out why that's happening--just a stop at the gas station, where prices are roughly 25% higher than they were a year ago, and where, despite a slight easing as the effects of hurricanes Katrina and Rita recede, they will probably go higher still before too long. Home heating oil is 50% higher than last year too, and natural gas will probably jump similarly. Those dramatic increases, Federal Reserve Chairman Alan Greenspan said in a speech last week, will create a significant drag on economic growth "from now on."
The silver lining, said Greenspan, is that as oil gets more expensive, other energy sources and technologies that use less oil will become more competitive. And that's exactly what's happening. Says Daniel Yergin, chairman of Cambridge Energy Research Associates and author of The Prize, the 1991 best seller about the history of oil: "There's a lot of technological innovation kind of bubbling that really has captured the imagination and obsession of a lot of people." The question is, Are we moving fast enough?

As consumers, we need time to make adjustments--often very expensive ones--to the new technologies. Not everyone can afford to junk a two-year-old SUV to buy a new hybrid. Most people can't afford to abandon houses built in developments 100 miles out in the countryside when oil was cheap. And although energy and power companies are investing in new technologies, they can't create a massive new infrastructure overnight. Coal liquefaction, nuclear power, wind power--"all of these things need an enormous lead time," says Heinberg. The problem with the free market, in short, is that while it may sort things out over the long run, people have to cope in the short run. "Price signals," he adds, "come much too late, and we will endure a tremendous amount of economic and social hardship that could have been averted if we'd acted sooner. We could see the equivalent of the Great Depression, fueled by extreme oil and natural-gas prices."

Things would have been different if we had been pouring money into alternative energy for the past couple of decades, as we did in the aftermath of the oil shocks of the 1970s. Back then, despite the ribbing Jimmy Carter got for appearing on TV in a cardigan and calling for sacrifice, there was a clear sense of national emergency. That crisis receded, thanks in part to conservation and investments in energy efficiency and in part to the worldwide recession the oil shocks helped trigger. As a result, a barrel of oil costs 30% less today, in inflation-adjusted dollars, than it did at its peak in 1981. This is not the first time the world has run out of oil. Yergin says it's the fifth or sixth.

But this may be the real thing. Matthew Simmons, chairman of Simmons & Co. International, an energy-industry investment-banking firm, says, "This is a shortage where demand actually exceeds supply. The two shortages in the '70s were artificially induced." Back then, OPEC was powerful and disciplined enough for Middle East oil producers, angry about U.S. support of Israel and the Shah of Iran, to be able to simply turn down production. But now a confluence of trends has made oil shortages inevitable, not optional. One is the unexpectedly rapid expansion of India's and China's energy needs. Fadel Gheit, senior vice president for oil research at the New York City investment firm Oppenheimer & Co., says, "They created the tight market we're in."

Beyond that, the supply of crude is not unlimited. Opening the Arctic National Wildlife Refuge or the coast of Florida for drilling, which congressional Republicans have been pushing for, is a relatively short-term fix. And the more oil that is removed, the more expensive the cost of extracting the remaining oil becomes. At some point--possibly as early as 2010--production will therefore reach a peak, though not necessarily a sharp one, and then gradually start to decline. "The problem," says Simmons, "is that the global economy and the U.S. economy are structured on the assumption that the oil supply will only increase."

The upheaval could be alleviated significantly if the government had a long-range policy for moving beyond oil. . Republican Representative Richard Pombo of California, chairman of the Resources Committee, says, "There is already an incentive to develop new technology. You just have to send a real clear signal that the Federal Government wants to." But a wholesale push to change our highway culture is unlikely. European countries decided long ago that it paid off to interfere in the free market by discouraging oil consumption and subsidizing mass transit, but that's not the American way.

The one thing that will probably cushion the blow of this new and permanent energy crisis is something old, with an air about it of discomfort and duty: conservation. There's nothing particularly sexy or chic about consolidating shopping trips, carpooling, turning the thermostat down in winter and up in summer, or biking to the office and back, but it does work. In the early '80s, in the midst of soaring oil prices, we doubled the average efficiency of cars, furnaces and insulation. Katrina and Rita might not have pushed us into another energy-crisis mind-set yet. With the inevitable price jolts to come, though, we're heading that way soon enough.

Source: (TIME Magazine 10/05) - Leave your email address if you would like a full copy of the article

Honda Plans To Start Mass Producing Solar Cells in 2007

2005-12-19T22:20:00.000-08:00

Mon Dec 19,12:01 AM ET TOKYO (Reuters) - Honda Motor Co. said on Monday it plans to start mass-producing solar cells in 2007, eyeing growing demand for environmentally friendly energy sources.

Japan's third-biggest automaker said in a statement it would build a new factory for solar cells on the site of a car plant in Kumamoto prefecture, on the southwestern Japanese island of Kyushu. The company aims to generate annual sales of 5 billion to 8 billion yen ($40 million to $70 million) from solar cells once the factory's output reaches full annual capacity of 27.5 megawatts, enough to power about 8,000 households.

Honda will be competing with major solar cell manufacturers such as Kyocera Corp., Sharp Corp. and Mitsubishi Electric Corp. A Honda spokeswoman did not say when the factory would hit full capacity and declined to disclose the size of the investment, which the Nihon Keizai business daily estimated would be just short of 10 billion yen.

Honda said its solar cells would be composed of non-silicon compound materials, consuming half as much energy and generating 50 percent less carbon dioxide during production when compared with conventional solar cells made from silicon. The company aims to sell the solar cells for both residential and industrial use. It will initially target the Japanese market. Prior to mass production, Honda plans to manufacture and sell solar cells in a limited area in Japan from late 2006.

Source: http://news.yahoo.com/s/nm/20051219/bs_nm/autos_japan_honda_dc

Goldman's Murti Says: `Peak Oil' Risks Sending Prices Above $105

2005-12-18T20:25:00.000-08:00

Dec. 19 (Bloomberg) -- Goldman Sachs Group Inc. analyst Arjun Murti, who roiled oil markets in March by saying crude may reach $105 a barrel, now says that may be conservative if the ``peak oil'' theory is right and world supplies are running out.

The belief that the world's oil supply is close to an irreversible drop is no longer ``on the fringes'' of the market, said a research report by New York-based Murti, who forecasts oil of $50 to $105 a barrel until 2009. UBS AG analyst James Hubbard, a former oil engineer at Schlumberger Ltd., said an inevitable decline in supply will start sooner and be worse than expected unless investment increases for many years.

A jump above $105 a barrel ``is possible if we don't invest the right amount of money,'' Hubbard said in an interview in London. ``There will be a peak in production earlier than expected, and that post-peak decline will be more dramatic than currently assumed unless there is a sustained increase in investment in oil and gas production, greater consumer efficiency and alternative energy sources.''

While Saudi Arabian Oil Minister Ali al-Naimi and Exxon Mobil Corp. President Rex Tillerson say oil supplies will last for decades, energy traders are increasingly debating the amount of available crude. Oil's two-year jump to about $60 a barrel came as rising demand from China surprised suppliers, who had failed to spend on new pipelines, rigs and refineries.
Investors who back the peak oil theory, such as Boone Pickens, a Dallas hedge fund manager and former oil executive, have fueled the price rally of the past two years, during which oil almost doubled, to reach a record $70.85 in August. Prices ended last week at $58.06 in New York.

The peak oil theory is based partly on the work of M. King Hubbert, a former Royal Dutch Shell Plc geophysicist who accurately predicted in 1949 that U.S. domestic onshore oil production would plateau by about 1970. Chevron Corp., the second-largest U.S.-based oil company, in its advertising declares, ``One thing is clear: The era of easy oil is over.'' Estimates vary on how much oil remains to be produced and when supplies will peak.

Tillerson in September told the World Petroleum Congress in Johannesburg that a U.S. Geological Survey estimate of 2 trillion barrels of conventional oil reserves still to be recovered is conservative, with the range of possibility as high as 7 trillion barrels. Less than 1 trillion have been pumped already.

Goldman's Murti in March skirted the peak oil debate. In a report last week, the analyst said it's something to monitor. ``It is possible that the peak oil theorists are correct,'' he wrote. ``If so, we think that the duration and magnitude of energy commodity price increases would be likely to far exceed what we are contemplating.'' He couldn't be reached for comment.

Full article: http://www.bloomberg.com/apps/news?pid=10001099&sid=aSMZqxhSYk54&refer=energy

The 1973 OPEC Oil Embargo: A Preview of Peak Oil

2005-12-18T18:33:00.000-08:00

I've found that critics of peak oil seem to laugh it off as some outlandish theory or a scare tactic to make everyone believe we are going to run out of oil next year. But Peak oil isn't about running out of oil, it's about the end of "cheap" oil. Many of the luxuries that we enjoy today, expected growth in the economy and stock market, and our basic American way of life are all supported by the underlying platform of access to cheap oil and energy. Oil does not have to run out before America feels the effects of higher energy prices -- that's the whole point -- we're going to feel the effects at the peak, when global demand outstrips oil supplies.

One of the first things I've learned when I started researching peakoil, is that spikes in high oil prices have indeed happened before, and due to my birthdate of March 30, 1980, I never experienced the oil shocks of 70's firsthand. I never knew a time where the United States and the Saudis didn't "play nice" as they seem to do now. The most important facts for me personally, regarding the 1973 oil embargo is that it was based on geopolitical events, while global peak oil is based on actual geological limitations, meaning that no nation while be able to make the difference between demand and supply -- think of peak oil as a permanent oil embargo. Also the increase in prices of oil barrels were relatively small and the effects on the economy were devastating -- it's scary to imagine what will happen to the wold ecomony after a gloal peak occurs.

Background:

In 1973, Saudi Arabia had tremendous surplus capacity. The country had more oil to start with than the United states had had a hundred years earlier. By the 1970's as America passed its all-time production peak, Saudi Arabia oil production was just entering its robust phase. Production was run by Aramco, a join venture mong Exxon, Texaco, Mobil, and Chevron (previously known as Standard Oil of California).

The 1973 Yom Kippur war was the precipitating incident of the OPEC ("Organization of Petroleum Exporting Countries")embargo. On October 6th, Egyptian and Syrian forces caught the Israeli military off-guard on the most solemn Jewish holiday, when many soldiers were home with their families. Because the Arab-Israeli dispute was commonly viewed as yet another cold war proxy battle, the US and its allies naturally lined up behind Israel against the Soviet sponsored agressors. Egypt's President Anwar Sadat implored the Saudi's and other Muslim states to use the "oil weapon" against Israel's allies.

On October 12th, the Saudi-led OPEN demanded of the various Western companies doing business in the Middle East, including Aramco, a 100% increase in the posted price of the cartel's oil. The companies stalled for time. On October 16, the Persian Gulf region OPEC members broke off negotiations with Western oil companies and announced they would set prices themselves. On October 17th, the Israeli's gained the upper hand on the battlefield , thanks in large part to aggresive American resupply efforts, and began to push the Egyptians back. The same day, Arab oil ministers announced an oil embargo on the United States, while increasing prices by 70% western Europe. On October 19th, President Richard M. Nixon announced a military aid package for Israel and the following day, Saudi Arabia retaliated by announcing a total cutoff of oil exports to America.

The embargo never achieved a shutoff of OPEn oil imports to the U.S. All but 5% of needed supply found its way to America by redirecting allocations to other nations. However, the base price of a barrel of oil did eventually more than quadruple by the time the embargo was called off in March 1974. The price rise alone staggered the West and Japan.

Effects of the Embargo

Lines of cars formed at the gas stations
Posted prices changed hourly in some places as station owners took advantage of a panic situation
Fights broke out among motorists waiting in line
Odd and even license plate numbers were used to assign gas-buying privileges on certain days of the week
The industry's own national allocation system failed and some parts of the United States got plenty of gasoline while others got none at all
President Nixon proposed an extension of daylight savings time and a total ban on the sale of gasoline on Sundays
Gas ration stamps were printed by never used
Prices of food and manufactured goods shot up - the entire American workforce suffered, in effect, a substantial cut in pay
The stock market dropped 15% in a month, and a year later it would be down 45% from its pre-embargo high
The Big Three auto manufacturers selling gas guzzling oversized fleets suffered plummeting sales and lost market share to European and Japanese auto manufacturers
Price inflation and economic stagnatation led industrial nations into deep recessions, the worst since the 1930's

President Jimmy Carter attempted to awaken the American public to the idea that the energy crisis was a more or less permanent condition relfecting the real drawdown of the nationa's numer one nonrenewable resource. He attempted to fashion a coherent national energy policy , passed tax and rate incentives for hydroelectric development, restarted Nixon's "Project Independence" to develop synthetic hydrocarbon and alternative fuels. In April 1977, Carter declared the nation's energy predicament was the "moral equivalent of war." He also installed solar water heaters on the White House roof and a wood stove in the White House, which were both subsequently removed by Ronald Reagan.

(Sources: The Long Emergeny by James Howard Kuntsler and www.wikipedia.org)

THE END OF SUBURBIA: Oil Depletion and the Collapse of The American Dream

2005-12-18T17:40:00.000-08:00

So this Christmas, I tossed out the traditional notion of consuming till you can't possibly consume anymore and bought fewer and more non-traditional items for my friends and family members. For my college friends, I decided to give the gift that keeps on giving, Heinberg's The Party's Over (see previous post) and the "End of Suburbia" dvd directed by Gregory Greene and produced by Barry Silverthorn.

It's hosted by Barrie Zwicker and features the following people: James Howard Kunstler, Peter Calthorpe, Michael Klare, Richard Heinberg, Matthew Simmons, Michael C. Ruppert, Julian Darley, Colin Campbell, Kenneth Deffeyes, Ali Samsam Bakhtiari and Steve Andrews.

Here's a summary of the documentary:

Since World War II North Americans have invested much of their newfound wealth in suburbia. It has promised a sense of space, affordability, family life and upward mobility. As the population of suburban sprawl has exploded in the past 50 years, so too has the suburban way of life become embedded in the American consciousness. Suburbia, and all it promises, has become the American Dream.

But as we enter the 21st century, serious questions are beginning to emerge about the sustainability of this way of life. With brutal honesty and a touch of irony, The End of Suburbia explores the American Way of Life and its prospects as the planet approaches a critical era, as global demand for fossil fuels begins to outstrip supply. World Oil Peak and the inevitable decline of fossil fuels are upon us now, some scientists and policy makers argue in this documentary.

The consequences of inaction in the face of this global crisis are enormous. What does Oil Peak mean for North America? As energy prices skyrocket in the coming years, how will the populations of suburbia react to the collapse of their dream? Are today's suburbs destined to become the slums of tomorrow? And what can be done NOW, individually and collectively, to avoid The End of Suburbia ?

I found about of this DVD on some random website and attended a screening in San Francisco hosted by the Green Party, which included a discussion afterwards. About 45 people showed up to the screening at the Bazaar Cafe which I thought was very exciting. You can purchase the dvd on the End of Suburbia website via PayPal or you can rent it at Netflix. If, after seeing it, you want to host your own screening, you're welcome to do so without permission as long as the event is non-profit. A modest admission charge to offset costs is permitted.

Upcoming Screenings:

January 7, 2006 - Crawfordsville, IN
January 31, 2006 - Toronto. ON at the Bloor Cinema. Presented by the Toronto Public Space Committee
March 6, 2006 - Brantford, ON

Past Screenings:

November 16 - Walnut Creek, CA Guest speaker: Jerry McNerney.
November 16 - Santa Rosa, CA
November 17 - Burnaby, BC at 4:30PM, AQ 3159 on the Simon Fraser University, Burnaby Mountain Campus. A discussion will follow the screening.
November 20 - Winnipeg, MB at 2:00PM at the Sir William Stephenson Library, 765 Keewatin Street. Former Governor General of Canada and Premiere of Manitoba Ed Schreyer will be a guest speaker at the screening
November 21 - Pleasantville, NY at 12:20PM in Butcher Suite in the Kessel Building at Pace University
November 22 - Belleville, ON at 6:30PM at Loyalist College. Email for more information.
November 22 - Pasadena, CA at 6:30PM at the Donald R. Wright Auditorium at the Pasadena Central Library. 285 East Walnut St.
November 24 - Australia
November 29 - Toronto, ON at 7:00PM at Hart House-Debates Room, 7 Hart House Circle, University of Toronto.
November 30 - St. Louis, MO at the University City Public Library.
December 6 - Gambier, OH
December 9 - Seattle, WA
December 15 - Brisbane, Australia

"Peak Oil Is Not a Theory" - Kjell Aleklett

2005-12-17T11:50:00.000-08:00

Excerpt from testimony of Professor Kjell Aleklett, Department of Radiation Sciences Uppsala University in Uppsala, Sweden:

"The United States, the wealthiest country in the world, has 5 percent of the global population and uses 25 percent of the oil. It is time to discuss what the United States should do to cut consumption—and rapidly. In February 2005 a report for the U.S. Department of Energy, DoE, (Peaking of World Oil Production: Impacts, Mitigation, & Risk Management) argued that "world oil peaking represents a problem like none other. The political, economic, and social stakes are enormous. Prudent risk management demands urgent attention and early action." Any serious program launched today will take 20 years to complete. "

"What about oil sands? The enormous reserves of oil sands in Canada are often mentioned as a lifesaver for the world. The report to DoE in February inspired us to undertake a “Crash Program Scenario Study for the Canadian Oil Sand Industry” (B. Söderbergh, F. Robelius, and K. Aleklett, to be published). In the study we found that Canada must very soon decide if its natural gas should be exported to USA or instead used for the oil sands industry."

"Animals that face food shortages have a hard time adjusting and usually their populations decline. Some believe that we as human beings will face a similar situation. I can't accept that. As human beings we can think and come up with ideas, and I believe we can find solutions. The road will be bumpy and many people will be hurt, but when we arrive at the end of this road, it must be as a sustainable society. It will not be possible to travel this road without using part of the existing stocks of fossil fuels and, for industrial countries, nuclear energy as well, but we can do it in a manner that will have minimal impact on the planet. The problem is that we should have started at least 10 years ago. We must act now, as otherwise the bumps and holes in the road might be devastating."

Full Speech

Click here for more testimony from: Roscoe G. Bartleet, Tom Udall, or to read about their Peak Oil Caucus.

"Peak Oil Is Not a Theory" - Robert Hirsch

2005-12-17T11:10:00.000-08:00

Excerpts from testimony of Robert L. Hirsch. Dr. Hirsch is a Senior Energy Program Advisor at SAIC. His past positions include Senior Energy Analyst at RAND; Executive Advisor to the President of Advanced Power Technologies, Inc.; Vice President, Washington Office, Electric Power Research Institute; Vice President and Manager of Research, ARCO Oil and Gas Company; Chief Executive Officer of ARCO Power Technologies, a company that he founded. (Source: http://www.d-n-i.net/fcs/hirsch_bio.htm)

"The era of plentiful, low-cost petroleum is approaching an end. A recent analysis for the DOE focused on what might be done to mitigate the peaking of world oil production. It became abundantly clear that effective mitigation will be dependent on the implementation of mega-projects and mega-changes at the maximum possible rate. A scenario analysis was performed, based on crash program implementation worldwide – the fastest humanly possible. The timing of oil peaking was left open because of the considerable differences of opinion among experts. The results were startling: Unless a mitigation crash program is started 20 years before peaking occurs, the economic consequences will be dire. "

"World oil demand is forecast to grow 50 percent by 2025.1 To meet that demand, ever-larger volumes of oil will have to be produced. Since oil production from individual oil fields grows to a peak and then declines, new fields must be continually discovered and brought into production to compensate for the depletion of older fields and to meet increasing world demand. If large quantities of new oil are not discovered and brought into production somewhere in the world, then world oil production will no longer satisfy demand. Peaking means that the rate of world oil production cannot increase; it does not mean that production will suddenly stop because there will still be large reserves remaining. "

"Until recently, OPEC assured the world that oil supply would continue to be plentiful, but that position is changing. Some in OPEC are now warning that oil supply will not be adequate to satisfy world demand in 10-15 years.2 Dr. Sadad al-Husseini, retired senior Saudi Aramco oil exploration executive, is on record as saying that the world is heading for an oil shortage; in his words "a whole new Saudi Arabia (will have to be found and developed) every couple of years'' to satisfy current demand forecasts. So the messages from the world’s "breadbasket of oil" are moving from confident assurances to warnings of approaching shortage. "

"Chinese officials have forecast the peaking of world oil production around the year 2012. As this committee knows, China has been making huge oil investments and procurement deals all over the world in recent years. They attempted to buy Unocal above market price. Indeed they are paying premium prices in many countries in order to secure future oil supplies. "

Full Speech

Click here for more testimony from: Roscoe G. Bartleet, Tom Udall, or to read about their Peak Oil Caucus.

"Peak Oil Is Not a Theory" - Tom Udall

2005-12-17T11:03:00.000-08:00

Excerpts from testimony by House Representative Tom Udall, Democrat - New Mexico:

"The theory of Peak Oil states that, like any finite resource, oil will reach a peak in production after which supply will steadily and sharply decrease. In 1956, Shell Oil geologist M. King Hubbert predicted that oil production in the contiguous United States would peak in about 1970 and be followed by a sharp decline. At the time, many dismissed his predictions as false, but history shows they were remarkably accurate. A growing number of geologists, economists and politicians now agree that the peak in the world’s oil production is imminent; predicted to occur within one or two decades. Some disagree with this prediction, calling it a doomsday scenario and say that technological advances will buy us more time before we reach peak production. Theirs, however, is not the consensus view and even they agree that a peak in the world’s oil production is inevitable. "

"Some say that market forces will take care of the peak oil problem. They argue that as we approach or pass the peak of production, the price of oil will increase and alternatives will become more competitive. Following this, consumers will act to replace our need for non-petroleum energy resources. This philosophy is partly true. However, the main problem with this argument is that current U.S. oil prices do not accurately reflect the full social costs of oil consumption. Currently, in the United States, federal and state taxes add up to about 40 cents per gallon of gasoline. A World Resources Institute analysis found that fuel-related costs not covered by drivers are at least twice that much. The current price of oil does not include the full cost of road maintenance, health and environmental costs attributed to air pollution, the financial risks of global warming from increasing carbon dioxide emissions or the threats to national security from importing oil. Because the price of oil is artificially low, significant private investment in alternative technologies that provide a long-term payback does not exist. Until oil and its alternatives compete in a fair market, new technologies will not thrive. "

Full speech: http://www.tomudall.house.gov/pdf/Peak_Oil_hearing_testimony.pdf

"Peak Oil Is Not a Theory" - Roscoe Bartlett

2005-12-17T10:39:00.000-08:00

Excerpts from testimony by Roscoe Bartlett, House Representative, Republican - Maryland.

"Just as Hubbert was right about the United States, peak oil has occurred in other countries and global peak oil will happen. Oil production is declining in 33 of the world’s 48 largest oil-producing countries. The Associated Press just reported that Texas oil and natural gas production declined five percent in the first nine months of 2005. Global “Peak Oil” has not yet occurred, but will mark the maximum annual world production of this source of cheap energy. It has utterly transformed America and the world in the past 100 years."

"President Bush has committed the Administration to reducing America’s energy insecurity. I met with the President at the White House on June 29, 2005 and was impressed by his understanding of the need for our government to act now to prepare for global “Peak Oil”. On October 5, 2005, Department of Energy Secretary Samuel Bodman requested the National Petroleum Council to study “Peak Oil” and the oil and natural gas industry's ability to produce enough oil and natural gas at prices that would not cripple the American economy. Our country’s leadership is slowly becoming aware of “Peak Oil”. However, it is my hope because of hearings like this and the testimonies given by some of our most prominent figures, our country’s leadership will start to see the urgency in addressing this issue, and make it the centerpiece of their agenda."

"...For example, in testimony before the U.S. Senate Committee on Foreign Relations on November 16, former CIA Director James Woolsey discussed “seven reasons why dependence on petroleum and its products for the lion’s share of the world’s transportation fuel creates special dangers in our time.” 1. Transportation infrastructure is dependent upon oil 2. The Middle East will continue to be the low-cost and dominant petroleum producer. 3. Petroleum infrastructure is highly vulnerable to terrorist and other attacks. 4. The possibility is increasing of embargoes or supply disruptions under regimes that could come to power in the Greater Middle East. 5. Oil revenue transfers fund terrorism. 6. Current account deficits for a number of countries create risks ranging from major world economic disruption to deepening poverty that could be reduced by reducing oil imports. 7. Oil used for transportation produce greenhouse gases that increase the risk of climate change."

Full Speech: http://www.tomudall.house.gov/pdf/TESTIMONYofBartlett.pdf

HR 507: The Peak Oil Caucus is working for you!

2005-12-17T09:55:00.000-08:00

On October 12, 2005: U.S. Reps Tom Udall, Democrat-New Mexico, and Roscoe Bartlett, Republican-Maryland, created the Congressional Peak Oil Caucus, in order to educate Congress and the public about the inevitable crisis Americans face regarding our future oil supply. Additional members of the caucus include: James McGovern - D - Massachusetts, Vern Ehlers - R - Michigan, Mark Udall - D - Colorado, Raul Grijalva - D - Arizona, Wayne Gilchrest - R - Maryland, Jim Moran - D - Virginia, Dennis Moore - D - Kansas.

The Caucus, with additional co-sponsors, introduced House Resolution 507 on October 24, 2005:

RESOLUTION Expressing the sense of the House of Representatives that the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency that was incorporated in the `Man on the Moon' project to address the inevitable challenges of `Peak Oil'.

Whereas the United States has only 2 percent of the world's oil reserves; Whereas the United States produces 8 percent of the world's oil and consumes 25 percent of the world's oil, of which nearly 60 percent is imported from foreign countries;

Whereas developing countries around the world are increasing their demand for oil consumption at rapid rates; for example, the average consumption increase, by percentage, from 2003 to 2004 for the countries of Belarus, Kuwait, China, and Singapore was 15.9 percent;
Whereas the United States consumed more than 937,000,000 tonnes of oil in 2004, and that figure could rise in 2005 given previous projection trends;

Whereas, as fossil energy resources become depleted, new, highly efficient technologies will be required in order to sustainably tap replenishable resources;

Whereas the Shell Oil scientist M. King Hubbert accurately predicted that United States domestic production would peak in 1970, and a growing number of petroleum experts believe that the peak in the world's oil production (Peak Oil) is likely to occur in the next decade while demand continues to rise;

Whereas North American natural gas production has also peaked; Whereas the United States is now the world's largest importer of both petroleum and natural gas;

Whereas the population of the United States is increasing by nearly 30,000,000 persons every decade;

Whereas the energy density in one barrel of oil is the equivalent of eight people working full time for one year;

Whereas affordable supplies of petroleum and natural gas are critical to national security and energy prosperity; and Whereas the United States has approximately 250 years of coal at current consumption rates, but if that consumption rate is increased by 2 percent per year, coal reserves are reduced to 75 years:

Now, therefore, be it Resolved, That it is the sense of the House of Representatives that-- (1) in order to keep energy costs affordable, curb our environmental impact, and safeguard economic prosperity, including our trade deficit, the United States must move rapidly to increase the productivity with which it uses fossil fuel, and to accelerate the transition to renewable fuels and a sustainable, clean energy economy; and (2) the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency of the `Man on the Moon' project to develop a comprehensive plan to address the challenges presented by Peak Oil.

Kazakhstan Opens Oil Pipeline to China

2005-12-15T22:53:00.000-08:00

The demand for oil in China is expected to significantly increase in the coming years due to their rising population and increased industrialization of their society. Looks like China is making another attempt to secure future oil:

Thursday 15 December 2005 - A new oil pipeline to carry oil to China from Kazakhstan has formally been inaugurated, brightening Beijing's prospects of reduced dependence on Middle Eastern crude.
With the push of a button, Nursultan Nazarbayev, the president of Kazakhstan, put the $806 million pipeline into service on Thursday from the control centre of state-run KazTransOil in the Kazakh capital of Astana. "This is an event of the utmost importance for economic and commercial relations between China and Kazakhstan," President Nazarbayev said.

The 1000km pipeline linking Atasu in central Kazakhstan to Alashanku in western China will now start to fill with Kazakh oil from the central Kumkol field. The route covers some of the world's most inhospitable territory, with extreme temperature ranges and earthquake-prone zones.
But the pipeline, jointly developed by the China National Petroleum Corporation (CNPC) and the Kazakh state energy company Kazmunaigaz, is a first milestone in a more ambitious project: to link Chinese consumers to the far bigger oil fields of the Caspian Sea. Growing demand has forced China to look for new energy sources Kazakhstan's authorities say the extension should be complete by 2011, with capacity also doubled. The total length would then be some 3000km. Chinese strategy Oil analysts said the new pipeline was an important step in Beijing's effort to reduce its reliance on Middle East supplies at a time when the country's energy needs are soaring.
"The new Kazakh pipeline is small but it signals a real Chinese interest in trying to move away from Middle East oil," said Kuen Woon Paik, a researcher at Chatham House, a London think tank. Beijing also is negotiating with Russia over the construction of a proposed pipeline to deliver Siberian oil. That line, to be completed as early as 2008, would carry about 380,000 barrels per day. "Both the Kazakh and Russian lines will help China get away from dependence on Middle East oil," said Gavin Thompson, who works in Beijing for the British oil consulting firm Wood Mackenzie. The new pipeline is also a step towards breaking Kazakh dependence on its former master Russia for export routes. Deliveries are expected to start only in mid-2006, with an initial annual capacity of 10 million tonnes.

Big Peak Oil vs Little Peak Oil

2005-12-15T22:18:00.000-08:00

Marion King Hubbert predicted in 1956, based on his study of the lifetime production profile of typical oil reservoirs predicted the peak of crude oil production would occur between 1966 and 1972. The actual peak in US oil production occurred in 1970. Since then the oil production within the United States has been in decline and we have been importing more and more oil each year to meeting our growing consumption demands. The problem with oil reserves peaking is that they go into a sharp decline in production after their peak and the oil remaining in the reserve is harder to get, of a lower quality, and therefore more expensive to produce.

But what about other oil producing countries? Have they peaked as well?

The following countries represent 94% of the world oil resources. Let's take a peek at their "peak" dates shall we?

Little Peaks:

Libya 1969
United States 1970
Venezuela 1970
Iran 1976
Indonesia 1977
Former Soviet Union 1987
United Kingdom 2000
Norway 2004
Mexico 2005
Canada 2006
Algeria 2006
Nigeria 2007
China 2007
Iraq 2009
UA Emirates 2009
Kuwait 2010
Saudi Arabia 2017

Source: The Party's Over (Duncan's World Oil Forecast #5 - 11/13/00)

Syriana - What is the Price of Oil?

2005-12-15T09:34:00.000-08:00

So I have been anticipating this film coming out for quite awhile, and that's saying a lot for me personally because I've been generally dissapointed with what Hollywood has been dishing out these days. I saw it the day after it came out, only because I was stranded in a snowstorm in Boston, and I have to say it's one of the most important films made in quite awhile. I can't say I loved it - although the acting was very good and liked the interwoven plots and directing style...I can't say I understood it all - as I had to ask my boyfriend, who was a history major, to explain quite a few parts to me, BUT I can say that it was an important movie because it really gives people a reality check as to price our society is paying for oil and gives us a preview of the price we'll be willing to pay in the future.

Before watching the movie, I watched a special on A&E called Movie Real: Syriana, where the director, actors, and experts discuss the issues that movie is trying to address. I think that this special should have been a required pre-requisite before seeing the film because I'm skeptical that the average American would walk away from the movie, and come anywhere close to "getting it." I wouldn't have understand the reference to "elephant" fields, without reading some recent articles. I also wouldn't have understood some of the geographical location references and so on and so forth. My friend in Hawaii actually said that a few people left during the middle of the movie, and it's not a bad film, I can only assume it went over their heads, which is unfortunate. (Nobody in my San Francisco movie theatre walked out...score!)

Anyways, in the A&E Special Clooney says his main point of the film was to get people talking about the issues the film explored and to start asking the tougher questions. I guess I would have preferred a movie that met the American people where the currently at, only because the movie would have appealed to a wider audience, but then again maybe the responsibility is on the American people proactively obtain this type of information on their own. Proactiveness? In America? Imagine that.

I was happy to see the link on Warner Brothers' Syriana website, launching a campain to reduce or dependence on oil. Here's the basic campaign spiel:

Our dependence on oil is bad news for our environment, economy, and national security, and it creates dangerous flashpoints in politically unstable regions around the globe. We already have the technology to start fixing the problem today with hybrid cars and renewable energies. These solutions reduce our oil demand, save money, and create new high-tech business opportunities. The energy decisions you make every day can have an impact.

Peak Oil Suggested Reading: The Party's Over

2005-12-14T21:15:00.000-08:00

A really good source of peak oil knowledge is Richard Heinberg (www.museletter.com) . I just finished his book The Party's Over: Oil, War, and Fate of Industrial Societies, and it was great informative reading, if not a bit depressing, but this is peak oil we're talking about kids!

The book's goal is to show:

1. The complete and utter dependency of modern industrial societies on fossil fuel energy resources as well as the inability of alternatives to fully substitute for the concentrated, convenient energy source that fossil fuels provide

2. The vulnerability of industrial societies to economic and political disruption as a result of even minor reductions in energy resource availability.

3. The inevitability of fossil fuel depletion

4. The immedicacy of a peak in fossil fuel depletion, regardles of how many wild lands are explored or how many wells are drilled.

5. The role of oil in US foreign policy, Islamic terrorism, and the geopolitics of the 21st century; and

6. The necessity of responding to the coming oil productio peak cooperatively, with compassion and intelligence, in a way that minimizes human suffering and enables future geenerations to develop sustainable, materially modest societies that affirm the best qualities of human nature.

Mr. Heinberg gives an overview on how he came to this particular worldview by acknowledging four sets of voices, each with contradicting opinions:

Voice # 1: Conventional free-market economists who view energy as a merely one priced commodity among many. They have a cornucopian view of our energy future and if an energy crisis appears, it will be a temporary one caused by "market imperfections" resulting from government regulation. Solutions will come from the market's natural response to price signals if those signals do not get obscured by price caps and other forms of regulatory interference.

Voice # 2: Environmental activists who are worried about the buildup of greenhouse gases in the atmosphere and about hydrocarbon based pollution. For the most part their unconcerned with high energy prices and petroleum resource depletion, which they assume will occur to late to prevent serious environmental damage. Their message is to conserve and switch to renewables for the sake of the environment and our children's/grandchildren's welfare.

Voice #3: An informal group of retired and independent pretroleum geologists who have nothing but contempt for economists who by reducing all resources to dollar prices effectively obscure real and important phsycial distinctions. Their messsage is that society musc engage in a crash program of truly radical conservation if we are to avoid economic and humanitarian catastrophe as industrialism comes to its inevitable end.

Voice #4: Politicians who set energy policy, who tend to believe the economists' message, as no politician wants to be the bearer of bad news that our energy guzzling way of life is waning. When office holders are forced to acknowledge the reality of an impending energy crisis, they naturally tend to propose solutions appropriate to their constituencies and they predicatbly tend to blame on their political opponents whatever symptoms of the crisis cannot be ignored.

Heinberg tends to believe Voice #3, as they are probably dispensing the most useful, factual information and their view is long-range and based on physical reality.

Happy reading, I'll offer additional thoughts on this book later.

Petroleum Products We Use Every Day

2005-12-14T20:10:00.000-08:00

So if the picture hasn't become clear in the past couple of posts, I hope the following list of petroleum based products, drives the point home. I tried not to repeat items mentioned in the post describing John D.'s rude awakening, but there might be some overlap.

We use oil for almost everything we've taken for granted as part of everyday life. When oil becomes expensive and scarce, I doubt -- strike that -- we will not be able to continue on as a "throwaway" society, and our standard of living will suffer.

Ink, Dishwashing liquids, Telephones, Toys, Insecticides, Antiseptics, Deodorant, Motorcycle helmets, Linoleum, Tents, Paint rollers, Floor wax, Shoes, Glue, Roller-skate wheels, Trash bags, Skis, Permanent press clothes, Hand lotion, Clothesline, Dyes, Shampoo, Panty hose, Cameras, Food preservatives, Fishing rods, Oil filters, Combs, Transparent tape, Anesthetics, Upholstery, Dice, Disposable diapers, TV cabinets, Cassettes, Mops, Sports car bodies, Purses, Electric blankets, Awnings, Ammonia, Dresses, Car battery cases, Safety glass, VCR tapes, Pillows, Vitamin capsules, Movie film, Ice chests, Candles, Rubbing alcohol, Loudspeakers, Ice buckets, Boats, Ice cube trays, Credit cards, Crayons, Insect repellent, Toilet seats, Caulking, Roofing shingles, Fishing boots, Life jackets, Balloons, Shower curtains, Garden hose, Golf balls, Curtains, Plywood adhesive, Umbrellas, Detergents, Milk jugs, Beach umbrellas, Rubber cement, Sun glasses, Faucet washers, Bandages, Tool racks, Antihistamines, Hair coloring, Nail polish, Slacks, Guitar strings, False teeth, Yarn, Petroleum jelly, Toothpaste, Golf bags, Roofing, Tennis rackets, Toothbrushes, Perfume, Luggage, Wire insulation, Shoe polish, Cortisone, Artificial turf, Heart valves, LP records, Lipstick, Artificial limbs, Hearing aids, Vaporizers, Aspirin, Shaving cream, Wading pools, Parachutes

This isn't an issue of driving less or buying a hybrid vehicle! This is about the neccesity of downscaling our society and completely rethinking how we live, all brought to us courtesy of the end of cheap oil.

9 Out of 10 Barrels of Oil Are Used for Petroleum Fuel

2005-12-14T19:26:00.000-08:00

Fuel products account for nearly 9 out of every 10 barrels (90%) of petroleum used in the United States. Limited oil supplies will be devasting to our economy and way of life -- Here's a rough /technical breakdown on how we use oil in America, according to a 1999 report put out by the Energy Information Administration (http://www.eia.doe.gov/):

Motor Gasoline (40%) – Used in automobiles and light trucks, boats, recreational vehicles, farm equipment

Distillate Fuels (25%) (Diesel oil, heating oils, and industrial Oils) – Powers diesel engines in buses, trucks, trains, automobiles & other machinery; Heats residential and commercial buildings; Fires industrial and electricity utility boilers

Liquefied Petroleum Gases (LPG’s) (9%) – Serves as inputs for petroleum for petrochemical
production processes; Fuel for domestic heating and cooking, farming operations, and as an alternative to gasoline for use in internal combustion engines.

Jet Fuel (6%) – Use for planes in the commercial airline industry

Residual Fuel (13%) – Used by electrical utilities to generate electricity

Non-Fuel Petroleum Products (10%) - SEE BELOW

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Non-Fuel Petroleum Products:

Solvents used in paints, lacquers, and printing inks

Lubricating oils and greases for automobile engines and other machinery

Petroleum (or paraffin) wax used in candy making, packaging, candles, matches, and polishes

Petrolatum (petroleum jelly) sometimes blended with paraffin wax in medical products and toiletries

Asphalt used to pave roads and airfields, to surface canals and reservoirs, and to make roofing materials and floor coverings

Petroleum coke used as a raw material for many carbon and graphite products, including furnace electrodes and liners, and the anodes used in the production of aluminum.

Petroleum Feedstocks are converted to basic chemical building blocks and intermediates and used to produce plastics, synthetic rubber, synthetic fibers, drugs, and detergents.

So What Does Peak Oil Have to Do With Me?

2005-12-14T12:19:00.000-08:00

One of my first responses when researching peak oil, was one of denial. I downplayed my wasteful habits and figured I'd just make an effort to drive less and even invest in a hybrid vehicle for my next car purchase. Ummm...well, it's not that simple. Here's an excerpt from a good article that will hopefully get people thinking more about how petroleum is an extremely intricate part of our everyday lives:

To truly grasp how much petroleum impacts our lives, let’s put John D. in his driveway, dressed for work and standing next to his dear Porsche 911 Turbo.

John is wearing a nice suit and tie. Unfortunately, the suit is wool and polyester, the buttons are plastic as well as the zipper in the pants. Remove 25% of the material from his suit, all elastic and plastic stays, the buttons and the zipper. Why? Polyester, dacron, rayon, orlon – these are all petroleum based, man made fibers. All plastic is petroleum based, as is elastic. Better get rid of the waistband on his under shorts too while we are at it. Abruptly, our friend John is rather chilly, as what is left of his suit, pants, shirt and under shorts have fallen around his ankles.

John wears glasses with polycarbonate lenses when he reads, and plastic contacts when he is doing anything active. These also require petroleum for manufacture, and will have to be replaced with real glasses made from glass. Oops – the frames are unbreakable plastic – those will need to go as well. While we are subtracting, let’s toss out his credit cards (plastic), the heels from his shoes (polyethylene-based rubber), and his all-weather watchband (faux-leather that is actually plastic). And we better get rid of that driver’s license too – the lamination is made from petroleum, as is the ink. And let’s not forget the ink that his money is printed with – yes, the ink which most currency is printed with is also a petroleum based product. As John stands with what used to be a suit around his ankles, the only thing he has left that hasn’t disappeared or fallen to the ground is his cotton undershirt, and he is completely broke.

Embarrassed, John spins his nakedness around and reaches for the door of his car…..and now we can do an even more rapid deconstruction. Empty the gas tank of gas, remove all the oil from the crankcase of the engine, remove all the transmission fluid, dump the heavy weight gear oil from the differential, and bleed all the fluid from the brake system. Each of these fluids and lubricants is derived 100% from oil.

Oh! Let’s not forget to remove every smidgeon of grease from every wheel bearing, every U-joint and any other petroleum lubricant from the vehicle. Now we can move forward a bit more, and peel the paint off. Automotive paint uses petroleum (tolulene, xylene, etc.) as base material. We can remove the tires, the rubber bushings from underneath every piece of the car, the steering wheel cover, the dash cover, the seat covers, the carpet, the seat padding and any foam insulation, the dashboard and all the A/C vents, and each and every rubber gasket. The jute-based carpet padding can remain – it is all natural. The safety glass (remember that layer of plastic in safety glass?), the seat padding, all the undercoating, all the CD’s, and the radio can go too. But the radio too, you might ask?

Every single wire in every single electronic device relies on petroleum-based coating as insulation around the wiring. Remove this insulation, and all you have is a mass of silicon and copper wires shorting out in a pile……so not only the radio, but every single wire in the car is coated by a petroleum product!We are left with a pile of iron and copper, resting on a bed of jute padding. But if we just think a little more, we can reduce these as well. How is steel made? Iron ore is mined in Australia or other countries using massive vehicles BUILT and FUELED by petroleum products. The raw iron ore is then shipped by trains or trucks (BUILT and FUELED by petroleum products) to a ship (BUILT and FUELED by petroleum), which transports them to another country to be made into steel.

Once it arrives, the ore is unloaded by a bulk belt conveyer (BUILT and FUELED by petroleum), shipped from the dock to the ore processing mill by trucks (BUILT and FUELED by petroleum) where it is placed into a very hot furnace (which is fired by natural gas, a petroleum product) and smelted into pig iron. This pig iron is then shipped again by train or truck (BUILT and FUELED by petroleum) to a steel plant. Here, it is again melted in a special electric furnace, (electricity, generated by clean natural gas, a petroleum product) and made into various steel products which are then shipped to various destinations (using petroleum as FUEL).If we truly want to account for the petroleum factor, steel cannot be made the way it is today. Aluminum is even more energy intensive, and that leaves us with a wad of copper wire sitting in the driveway, resting on our jute ‘rug’. John, now completely discombobulated, runs for the door of his home.

Unfortunately, the steel hinges and doorknobs are missing. When he touches the door it falls inward; his carpeting has disappeared, and the house is really hot and dark. It seems air conditioners are made from aluminum and steel, as are most appliances. Johns’ local Power Company uses clean, non-polluting natural gas to generate their electricity, so let’s kill all the power to the house. He is relieved to see his toilet still sitting there, but everything electronic and electrical has become a tangled mass of copper wires and circuit boards.Water is spraying out of the ground, because John’s house was plumbed with POLY VINYL CHLORIDE (PVC) pipe, which is a 100% petroleum product. His furniture has turned into skeleton-like wooden frames, as the materials and padding used to make couches and chairs are long lasting, man-made fibers derived from petroleum. Rancid goop is oozing out of every cabinet in the kitchen, and everything that was in his refrigerator is slumped into a pile only a garbologist could be proud of. It seems that 90% of the packaging materials we use today are made from (you guessed it) petroleum.

His fresh vegetables and many of his canned goods are gone. John suddenly remembers reading an article about fertilizer and pesticide shortages. It seems these are also made almost exclusively from petroleum, and without them, modern mass-farming techniques are not viable. Crop yields are down, and the cost of trucking lettuce from California and Washington to other places is just too high.

And if you think this hurts, imagine everything you ever bought from a department store vanishing – because they were ALL IMPORTED from cheap-labor “elsewheres” using petroleum as fuel. Forget all plastic – it is 100% petroleum.

Toss out computers and electronics as we know them today – we don’t have the insulating materials to build them without petroleum. We don’t have the massive electrical capacity to build anything really high tech – the cost of oil or natural gas to fuel the power grid has become too high.

Space travel? Forget it – the hydrogen used to power the shuttle is derived from petroleum, and it will not fly without the electronics and guidance system. And all the aluminum and titanium and other special alloys each require extremely energy intensive manufacturing processes, which use too much electricity that comes from gas and oil fired power plants.

See full article at: http://www.energybulletin.net/4740.html

Definition of "Fossil Fuels" and "Petroleum"

2005-12-14T12:05:00.000-08:00

Let's start with a few definitions:

Fossil fuels are formed in the ground from the remains of dead plants and animals. It takes millions of years to form fossil fuels. Oil, natural gas, and coal are fossil fuels. (www.atniedc.com/programs/Energy/glossary.htm)

Petroleum is a generic term applied to oil and oil products in all forms, such as crude oil, lease condensate, unfinished oils, petroleum products, natural gas plant liquids, and non-hydrocarbon compounds blended into finished petroleum products. (www.natsource.com/markets/index.asp)

I plan on using petroleum and oil interchangeably in subsequent posts.

The Deprogramming Continues

2005-12-13T21:34:00.000-08:00

I find it more than disturbing that most things I took to be true or at the least normative for the past few years have turned out to be shadows of the truth. I moved out to California last year and have steadily burned through an assortment of topics, one after another, exposing the simplicity, naiviety, and backwardness of my previous world views. It started out with my realization that the majority of what I learned in school about my nation's history was only a sliver of truth and a one-sided and incredibly optimistic presentation of the "facts."

I have ended up here, and here is at the peak of global oil production and consumption. Since I started reading about the subject, I've felt like I've been watching a horror film at a movie theatre and the scene starts where the unsuspecting teenager decides to investigate that strange noise coming from a dark wooded area miles and miles from civilization and nearest neighbor. It's so frustrating to see the horror that's about to take place and feel utterly helpless in doing anything about it. I started this blog to raise awareness about fossil fuel depletion and America's addiction to them, but mostly to keep from feeling so utterly helpless.

Our path has already been set in motion and the fallout from oil depletion will occur no matter what we do now, but I believe if a significant portion of the population is informed about the issue and the alternatives available, in the terms of Richard Heinberg, the collapse of our society as we know it can be managed.