New Orleans - Another Great Prize ?  

Hidden in one of the comments threads at The Oil Drum is this interesting piece - "New Orleans: A Geopolitical Prize" by George Friedman which looks at the greater significance of the city of New Orleans other than just as a centre of the oil industry (via Mobjectivist). While the damage to the city has been enormous (and some reports of the death toll are getting horrifically large) it seems the damage could have been worse.

A simple way to think about the New Orleans port complex is that it is where the bulk commodities of agriculture go out to the world and the bulk commodities of industrialism come in. The commodity chain of the global food industry starts here, as does that of American industrialism. If these facilities are gone, more than the price of goods shifts: The very physical structure of the global economy would have to be reshaped. Consider the impact to the U.S. auto industry if steel doesn't come up the river, or the effect on global food supplies if U.S. corn and soybeans don't get to the markets.

The problem is that there are no good shipping alternatives. River transport is cheap, and most of the commodities we are discussing have low value-to-weight ratios. The U.S. transport system was built on the assumption that these commodities would travel to and from New Orleans by barge, where they would be loaded on ships or offloaded. Apart from port capacity elsewhere in the United States, there aren't enough trucks or rail cars to handle the long-distance hauling of these enormous quantities -- assuming for the moment that the economics could be managed, which they can't be.

The focus in the media has been on the oil industry in Louisiana and Mississippi. This is not a trivial question, but in a certain sense, it is dwarfed by the shipping issue. First, Louisiana is the source of about 15 percent of U.S.-produced petroleum, much of it from the Gulf. The local refineries are critical to American infrastructure. Were all of these facilities to be lost, the effect on the price of oil worldwide would be extraordinarily painful. If the river itself became unnavigable or if the ports are no longer functioning, however, the impact to the wider economy would be significantly more severe. In a sense, there is more flexibility in oil than in the physical transport of these other commodities.

There is clearly good news as information comes in. By all accounts, the Louisiana Offshore Oil Port, which services supertankers in the Gulf, is intact. Port Fourchon, which is the center of extraction operations in the Gulf, has sustained damage but is recoverable. The status of the oil platforms is unclear and it is not known what the underwater systems look like, but on the surface, the damage - though not trivial -- is manageable.

The news on the river is also far better than would have been expected on Sunday. The river has not changed its course. No major levees containing the river have burst. The Mississippi apparently has not silted up to such an extent that massive dredging would be required to render it navigable. Even the port facilities, although apparently damaged in many places and destroyed in few, are still there. The river, as transport corridor, has not been lost.

What has been lost is the city of New Orleans and many of the residential suburban areas around it.

The LOOP and some major pipelines are now partially back in operation.

This morning's Herald reveals that Woodside have decided to gamble some of my hard earned money by becoming a bigger player in the GOM through the acquisition of Gryphon Exploration (which helps explain why they've set up an office in Texas). Hopefully they've got all these rigs and platforms insured well out into the future, as I don't see Ivan and Katrina being uncommon events in future. They also note LNG train 4 at Karratha has shut down - apparently for repairs which will take a month.

While many companies operating in the Gulf of Mexico spent yesterday assessing wreckage, Woodside Petroleum bought private oil and gas producer Gryphon Exploration for $US297 million ($393 million) to expand its reach in the region. The move gives Woodside immediate production from 15 fields that primarily produce gas, with proven and probable reserves of 114 billion cubic feet of gas equivalent.

The purchase of its first producing asset in the Gulf of Mexico fits with Woodside's ambitious $10 billion plan to double production within four years. It expects its Midway field to go into production later this year. The company entered hedging contracts for about 50 per cent of the expected production to the end of 2008, underpinning about half the purchase cost.

Gryphon has interests in 118 leases in the Gulf, and Woodside said the broad exploration portfolio included "15 high-quality prospects". The Australian oil company said it expected to drill at least four of the high-quality prospects by the end of the year and it was evaluating 65 other leases.

Woodside chief executive Don Voelte said it delivered Woodside "a significant expansion of our exploration portfolio in the Gulf". The majority of the fields are on the western side of the Gulf, near Texas, but one is on the eastern side near New Orleans, which was pounded by Hurricane Katrina.

Woodside spokesman Roger Martin said the field had stopped production before the storm entered its path and would not resume until employees could return to the platform. "We've conducted an aerial inspection and there is no evident sign of damage," he said.

"Gas is a valued commodity in the States," Mr Martin said, characterising the market as "buoyant and fluid". Although the market saw the Gryphon deal as positive for Woodside, the company also had to deal with fallout from the shutdown of the North-West Shelf's Train 4 on Wednesday night.

Boing Boing notes that FEMA is pointing Katrina aid donations to Pat "kill Hugo Chavez!" Robertson. They also have a post explaining how Cuba deals with evacuations before hurricanes, which seems a bit more organised than the laissez faire "head for hills under your own power" scheme operating in the GOM states. Hopefully some US disaster response organisations can learn a bit from this sort of scheme.

I have to say, the news coming out of New Orleans and the surrounding areas just seems more and more horrible. I was startled when I got home and my wife (who isn't given to even considering conspiracy theories) asked if the US government actually wants the survivors to die, having spent most of the day watching the regular TV news. And to be honest, martial law, "shoot to kill" orders and stories like this about rescue teams being pulled out of New Orleans do make me wonder if the government of the world's richest country is simply supremely incompetant or if there is more to it.

The coverage in this afternoon's Murdoch trash paper here didn't help with a the cover page simply saying "ANARCHY ! Rape, Murder, Looting" over a picture of a group of black people. And what is Bush doing - watching from a plane ? I don't have a great deal of respect for our PM, but I'm sure he'd be on the scene (and on the ground) if the same thing happened here. There seems to be at least one blogger operating from within the wreckage.

Jeff Vail has an interesting post up today about US government awareness of peak oil (along with a note that another hurricane is predicted to develop within 2 weeks).

I gave an intelligence briefing to the Assistant Secretary of the Interior, Tom Weimer, today. He's in charge of "water and science", which includes the US Geological Survey, the agency in charge of the official government calculations on oil reserves and depletion. Most PeakOil nay-sayers rely on the USGS's 2000 report that shows an excessively optimistic projection for recoverable oil reserves, but what does USGS really think? All I can say for sure is that Weimer didn't have any objections to my assertion that Peak Oil may well be a Fall 2005 event, nor that the world is facing a serious energy SUPPLY crisis in the near future. Does the government have some master Peak Oil plan? I have no idea, but claims that they are ignorant about the problem are simply incorrect.

Moving away from the aftermath of Katrina, China is currently performing a mass evacuation in some provinces in the path of Typhoon Talim. Last year's typhoon season was apparently much busier than normal (particularly in Japan) but I haven't seen many reports this year.

The ASPO's September newsletter is out.

In France, Prime Minister Dominique de Villepin told a news conference "We have entered the post-oil era", while announcing that the government would provide money to low income households to help with heating bills.

Chip Giller and David Roberts from Grist have an excellent piece (and call to action) in the Boston Globe called "A fit of (oil) peak".

it's time for us ordinary citizens to get active, too. Time to call our legislators, show up at city council meetings, write letters to the editor. After all, everyday Americans outnumber energy company executives by a ratio of roughly a bazillion to one -- so let's make sure the dialogue reflects that, and that our needs get proportionate attention.

What should you be lobbying for, with your political action committee of one?

Smarter transportation. This is the low-hanging fruit of a smart, post-peak energy economy. Push for lighter, more fuel-efficient cars and alternative fuels.

Decentralized power. Our electricity supply is highly centralized and inefficient. Every volt we use travels over miles of cable, making it vulnerable to technical failure, price manipulation, and terrorist attack. Demand an electricity grid built from clean, community-level energy sources like wind, solar, geothermal, and combined heat and power systems.

Honest, responsible industries. Our nation's gasoline prices are artificially suppressed. Remove oil subsidies and tax breaks, and make sure oil companies, not taxpayers, pick up the bill for externalities like pollution-related healthcare and climate disruption.

A level playing field. Big agribusiness relies on heavy government subsidies. Remove them, and watch agriculture follow energy in cleaning up and decentralizing.

These ideas would make the trip down the oil peak a little smoother, but they're only a beginning. Maybe you have other, better ideas. If so, speak up. Now's the time to have the conversation, before we wander into a crisis.

The world as we know it is ending, whether or not we're prepared. But with your help -- that is, with involvement, commitment, and ingenuity -- we'll be fine.

The Seattle Times has a report about vast US shale oil reserves. Refer to my previous note.

The Herald has a report about an Alexander Downer speech backing a rise in uranium exports. Even by his low standards its full of double speak. Its amusing to see him singing the uranium miners tune rather than the coal miners song though (hint: he is from South Australia, home of the Olympic Dam mine). See how many factual errors and distortions you can spot.

Australia had a responsibility to supply uranium to other countries, the Foreign Minister Alexander Downer said, because it was the holder of the world's largest reserves and nuclear energy was clean. In a speech talking up the environmentally friendly merits of nuclear energy, Mr Downer said safety concerns about nuclear power were "inaccurate perceptions of risk that are not backed up by fact".

The Foreign Minister accused anti-nuclear groups of "irresponsibly" exploiting concerns about nuclear power to "pursue their own mythology". He nominated the example of the Chernobyl nuclear power plant accident of 1986, saying it killed 50 people, involved old reactor technology which was being phased out of service, and that since then there had only been a "handful of fatalities" directly related to accidents in the nuclear power industry. This was compared with the coal industry, which worldwide since 1970 had seen more than 20,000 deaths.

The Chernobyl accident is said to have released more than 200 times the radioactive fallout of the two nuclear weapons used at the end of World War II and, according to Greenpeace, led to the deaths of about 2500 people.

Delivering the 2005 Sir Condor Laucke Oration, Mr Downer also said nuclear proliferation could not be avoided by Australia's withholding uranium, and that by supplying it to the region Australia could promote its high safety standards.

Australia has just agreed to start negotiating exporting uranium to China, and the Foreign Minister said Beijing's demand for uranium could run into the hundreds of millions of export dollars by 2020.

Australia is also a member of the United States-led Asia-Pacific Partnership on Clean Development and Climate, an alternative to the Kyoto Protocol which will explore nuclear technology-sharing among the partner countries, including China, India, Japan and South Korea.

Mr Downer questioned the logic of being concerned about greenhouse gas emissions and opposed to nuclear energy at the same time, saying the environmental benefits of nuclear energy could be demonstrated by comparing Australia and France. Australia, not a user of nuclear energy, was the ninth-biggest carbon dioxide emitter, while France, which relied on nuclear reactors to supply 80 per cent of its electricity, was ranked 26th. Mr Downer said that "some may well ask" why Australia would not contemplate using nuclear energy.

"The reality is that nuclear energy is the only established non-fossil fuel energy source capable of generating large amounts of baseload electricity without significant emissions of carbon dioxide," he said. "In the 21st century, the responsible position is to recognise that nuclear power has an important place in the overall global energy mix."

The Independent doesn't agree with Steve Forbes' characterisation of the oil price as a "speculative bubble", while the International Herald Tribune says that "high oil prices are a force for good" (which is true in the grander scheme of things, but it's probably not if you're too poor to afford the newer, higher prices for food and transport his will result in).

Energy Bulletin has a link to a story about more price energy price rises in the UK. They also have a link to the satirical "SWISH" report (which looks all too realistic from the summary quotes they posted - the site itself doesn't seem to be up tonight).

In non-oil related news, the CBC has a report up on the origins of BSE, another subject which demonstrates the weakness of industrial scale farming. Regardless of which theory on the origins of BSE is correct, it's simply appalling.

A new and disturbing theory about the possible origin of "mad cow" disease has been published, and a Canadian scientist said it is "plausible."

In a report in the British medical journal, The Lancet, Professor Alan Colchester of the University of Kent in England says BSE (bovine spongiform encephalopathy) may have been caused by the tonnes of animal bones and other tissue imported in the '60s and '70s from India for animal feed which also may have contained the remains of humans infected with Creutzfeldt-Jakob disease (CJD).

Colchester, and his daughter Nancy, from the college of medicine and veterinary medicine at the University of Edinburgh in Scotland, said the practice may still be taking place elsewhere. They said it is important to discover whether other countries are importing animal byproducts contaminated with human remains that are destined for feed mills.

The authors admitted their hypothesis is based on a compilation of circumstantial evidence. They wrote: "We do not claim that our theory is proved, but it unquestionably warrants further investigation."

It had previously been thought that the brain-wasting mad cow disease passed to cattle through remains of sheep infected with scrapie -- the sheep equivalent of BSE -- that were added to cattle feed.

...

But Cashman of UBC wondered if there was any way to prove or disprove the theory, noting it might require feeding infected human brain material to cattle -- an experiment the public might not tolerate.

He said: "That is the experiment from hell. Can you imagine what kind of public response there would be if you or I started an experiment where we were feeding human brains to cattle? It's like Frankenstein."

On a more positive note, Cool Tools has a post on seed catalogs for those who might prefer to grow some of their own food.

Seedsavers Exchange puts out a gorgeous catalog and promotes Earth-respecting attitudes with no preaching or guilt-laying. Their online version is, to my mind, among the best designs of its kind. Their descriptions usually include a few words about the histories and sources of their heirloom varieties -- makes it hard not to feel involved with the ancient epic of how "weeds" got turned into the exquisite diversity of crop plants we take for granted these days.

Johnny's Selected Seeds is a commercial version of a labor of love. It's a real working catalog with limited color photos but a large and well-selected inventory of standard, heirloom, and organic veggie, herb, flower, grain, and covercrop seeds. What makes the catalog special is its generosity with information. If you need a tomato that resists some particular kind of rot, you'll probably find it here. You'll probably find it in other catalogs, too, but won't necessarily know it. There's extensive cultural, climate, and harvesting info that makes me resent almost all other catalogs for their lack of same. Johnny's really wants their seeds to grow strong and prosper.

Gardens Alive is a southern Indiana seller of products for organic/"environmentally responsible" gardening and growing. Natural fertilizers, biocontrols (they grow critters like parasitic wasps and nematodes themselves), natural lawn magic, redworms, composting accessories -- a fairly thick little catalog with basic graphics and all kinds of dreams for the garden geek. Dozen-page guides to plant diseases, nutritional lacks, bugs. I get the same kind of thrill pawing through this jammed volume that I used to get with Edmunds or American Science and Surplus or the fireworks spreads, or, well, Whole Earth Catalog -- It just makes my hands itch to get out there and tinker.