Weekend Roundup  

Tom Whipple has yet another installment of his peak oil series in the Falls Church News Press - this one looks at the ASPO USA conference in Denver and the importance of decline rates for production from existing fields. The other US newspaper that has repeatedly been covering peak oil is the Cleveland Plains Dealer, which Columbia Journalism Review has, errr, reviewed.

The Association for the Study of Peak Oil (ASPO) was formed in Europe circa 2001. After four years, the Association decided it could more effectively educate the world about the advent of peak oil by breaking up into national organizations. At last report, 15 national ASPOs are in some stage of formation – mostly in Europe.

Last week ASPO-USA, a not yet fully formed organization, had its first meeting in Denver . Some 450 people showed up to hear an array of knowledgeable speakers on nearly every aspect of when world oil production will peak and what we can or should do about it.

The top issue —is peak oil imminent and if so when— was discussed in depth by five respected and highly qualified speakers. The heart of their presentations was simple:

* The world is currently producing about 85 million barrels per day (mb/d).
* As long as the world’s economy continues to grow, it will need another 1-2 mb/d each year.
* Production from the fields that are currently producing our 85 mb/d is continuously dropping. The optimists say this depletion is as little as 2.5 percent each year, while credible pessimists are saying 8 percent a year may be more realistic.
* The answer to the rate of depletion question (and we won’t know for several years) is the key to the "when" of peak oil. If the depletion rate is only 2.5 percent then existing fields will still be producing about 74 mb/d in 2010. This amount can possibly be offset by production from new fields with a little left over for some economic growth. If the depletion rate is much higher then supply will not cover demand and we will see much higher priced oil.

This is the peak oil debate in a nutshell. It is the interplay between the worldwide demand as determined by price, the rate at which existing fields are depleting, and the oil industry's ability to bring new fields into production in the next five years. All this will determine the year when production peaks.

Differences among the speakers as to when peaking will occur hinge on their opinions about these variables. All, however, seemed to agree that we should see the peak within the next five years or so.

The most disturbing number presented at the conference was that the world's depletion rate may be as high as 8 percent. An 8 percent depletion rate for production from existing fields would be catastrophic because production would drop by nearly 30 mb/d by 2010. This is an amount that simply cannot be made up by production from new fields. If this rapid decline comes to pass, there will be widespread economic disruption, for there is little we can do to increase the production of substitute energy sources so quickly.

Several speakers are concerned there are not enough drilling rigs in the world and not enough experienced people to operate them. Even the eternally optimistic Saudis, while in the midst of announcing their expansion plans last week, caveated that these plans might slip due to the unavailability of sufficient drilling rigs. The damage and loss of drilling rigs during recent hurricanes in the Gulf of Mexico did little to help the situation. Indeed, there is some thought that the hurricanes did so much damage (some 730,000 b/d are still not back in production) and will require so many resources to repair, they will turn out to be a major reason why peak oil will occur sooner rather than later.

...

The highlight of the first ASPO-USA conference may have been when Congressman Roscoe Bartlett asked if we really want to "mitigate" by spending all our treasure to produce oil substitutes after peak oil arrives. Would we not be better off if we started moving towards a world with minimal consumption of liquid fuels as soon as possible?

Right now the cry is "find more oil". Forget the environment and drill wherever and as much as necessary. The International Energy Agency is suggesting that with an investment of a mere $17 trillion (that's right trillion with a "tr") to find, produce, and refine oil, life-as-we-know-it can go on for another 25 years.

When it becomes apparent, however, we can no longer keep up conventional oil production, the cry will change to "produce substitutes." Billions, and perhaps trillions of dollars will be allocated to producing synthetic liquid fuels. If this can come from biomass it might make some sense, but if we ravage Alberta and our coal reserves to power our SUVs for a few decades longer, it does not.
This indeed my turn out to be mankind's key decision for the first half of the 21st century. Do we power down gracefully to a greatly reduced liquid fuel world; or do we thrash around for a decade or two trying to maintain life as we have known it?

Stuart Staniford at The Oil Drum also has a look at decline rates of 8% like that being experienced by Exxon.



The Oil Drum also notes that the JODI database is about to be released after a long wait. Most of the initial commentators seem distinctly underwhelmed by the data itself and the website in general.

What is, in blogistan, I imagine a long time ago(last May not long after we started this site) I commented on the apparent good news that the International Energy Forum had a Joint Oil Data Initiative (JODI) which would provide more transparent reporting of oil market data. Since then there have been some complaints about the quality of the data that was being furbished, but I see that Platts is now carrying a story that the database will go live this weekend.

Well it will be interesting to see what exactly is new about the data that will be made available. Bear in mind that there are really two issues that should be addressed in such a data base, the first being the exact nature and size of the reserves, on an individual field basis; and second the actual production rates from those individual fields.

Richard Branson is still cranky about high fuel prices taking their toll on Virgin Atlantic. He seems to have realised that building a refinery of his own won't solve their problems after all and is now looking at producing cellulosic ethanol instead. Im not so sure this is suitable for jet fuel, but maybe he knows more than I do or he just wants a hedge against oil prices in general (in which case the derivatives markets would be a simpler way to go about it). I'm tempted to wonder if Mr Branson will come up with Virgin Solar or Virgin WindPower once the penny drops and he realises there is an opprtunity in the alternative energy market - particularly in energy-short Britain.

Tired of skyrocketing jet fuel prices, Virgin Atlantic Airways boss Richard Branson said on Wednesday he plans to turn his back on hydrocarbons and use plant waste to power his fleet.

“We are looking for alternative fuel sources. We are going to start building cellulosic ethanol plants (to make) fuel that is derived from the waste product of the plant,” he told Reuters in an interview in the oil-rich United Arab Emirates.

Rigzone reports that "East Timor Opposition Parties Urge Halt to Australia Energy Talks". Wasn't Alexander Downer claiming these talks had been finalised 9 months ago ? Also at Rigzone, a report on Exxon's Hibernia field offshore Newfoundland, which is quite a good illustration of some of the motivations that help to cloud reserves figures (even more than the uncertainty created by geology and extraction techniques that is). Plus an article that notes that OPEC is claiming "World Oil Demand Recovering; No Demand Destruction".

OPEC said Wednesday that a six-month run of downward revisions to its world oil demand expectations had come to an end, with evidence of a resurgence in Chinese demand and with key economies in rude health.

In its monthly oil market report, the Organization of Petroleum Exporting Countries nudged higher its prediction for global demand this year and next, to 83.3 million barrels a day and 84.8 million barrels a day, respectively.

Despite marginal revisions to its global growth forecasts, OPEC said "we were right to refute" talk of "demand destruction" fueled by U.S. hurricanes and surging crude and product prices.

There is, it added, "vigorous preliminary growth data from developing countries, a brighter outlook for the world economy particularly for the U.S.A and OECD Pacific countries, and a rebound in Chinese apparent demand."

On the last point, "there are indications that Chinese demand has started to pick up."

It cited Chinese government orders to rebuild oil stockpiles from as low as three days' cover to at least 10-15 days. The end of a products export rebate and a likely surge in imports ahead of the Chinese New Year likely herald a return to strong Chinese growth, it added.

This is something of a weird source for me to be quoting ("The Trumpet" is published by the Philadelphia Church of God), but here is their view on the opening of the Iranian Oil Bourse, which combines reality based commentary with Christian endtimes fundamentalism - the religious equivalent of secular collapsism (via the intrepid Tim of Suburbia).

Asia Times reported that only one major actor stands to lose if oil-trading in euros takes hold: the U.S. By contrast, “Oil in euros would benefit millions … in the EU and its trading partners …. And it would loosen the grip the U.S. has on opec members” (August 26).

“One of the Federal Reserve’s nightmares may begin to unfold in the spring of 2006,” one expert on the subject stated, “when it appears that international buyers will have a choice of buying a barrel of oil for $60 on the nymex [New York Mercantile Exchange] and ipe [London’s International Petroleum Exchange] or purchase a barrel of oil for €45 to €50 via the Iranian bourse” (Global Politician, September 2).

If oil-trading in euros were to get going, the already-existent global trend of foreign currency reserves being shifted from dollars to euros would rapidly accelerate. In turn, “countries switching to euro reserves from dollar reserves would bring down the value of the U.S. currency. Imports would start to cost Americans a lot more …. As countries and businesses converted their dollar assets into euro assets, the U.S. property and stock market bubbles would, without doubt, burst” (The Foundation for the Economics of Sustainability, Nov. 15, 2004).

The snowballing effect of a reserve currency switch would be catastrophic for the U.S., according to the Global Politician. The U.S. “would simply have to stop importing” (op. cit.).

Considering America’s industrial and agricultural heartland has been gutted over the last half century, this possibility could be grave. As one commentator put it, the impact of the Iran oil bourse on the U.S. dollar—and the follow-on effect on the U.S. economy—could be worse than Iran launching a “direct nuclear attack.”

Should Iran’s planned euro-based oil-trading mechanism get off the ground and gain international popularity, the U.S. dollar will weaken and the euro strengthen—helping to hasten the economic decline of the U.S. and propelling the European Union into dominance.

Though many economists consider the chances of Iran’s ambitions being successful as remote, we can know from Bible prophecy that the U.S. financial system will be brought down—along with the U.S. dollar as the reserve currency.

Global Public Media has an interview with Ted Glick about the upcoming Climate Crisis Day of Action on December 3.

The Sydney Morning Herlad reports that the WHO is saying that Global warming is fuelling the spead of disease.

Just this week, WHO officials reported that warmer temperatures and heavy rains in South Asia have led to the worst outbreak of dengue fever there in years. The mosquito-borne illness, which is beginning to taper off, has infected 120,000 South Asians this year and killed at least 1000.

In warmer temperatures the parasite that spreads malaria via mosquitoes develops more quickly, for example, and a 2000 study in Peru found that when the El Nino phenomenon boosted temperatures, hospital admissions of children with diarrhoea increased exponentially. One study showed in certain South American countries, a one-degree rise in temperature caused an 8 per cent increase in diarrhoeal diseases.

The report says more resources to combat disease in poor countries combined with long-term cuts in greenhouse gas emissions are needed to limit the effects on poorer countries. Climate change exacerbates problems poor countries face from disease, largely because bacteria spread more rapidly, increasing contamination of food and water. Forecasts of climate change also predict more erratic weather patterns for many countries, wreaking havoc with subsistence farming and adding to the burden of malnutrition.

The report comes two weeks before signatories of the Kyoto Protocol meet in Montreal for the first time since it was ratified in February. The US, which emits 24 per cent of the world's greenhouse gases, and Australia have refused to sign up to Kyoto.

WorldChanging also has a post on this report.

"Impact of Regional Climate Change on Human Health," a new report in the latest edition of Nature, makes for sobering reading. A combined effort from the University of Wisconsin, Madison, and the World Health Organization, the report reviews the evidence connecting changes to climate conditions and threats to human health. The study looked at both empirical data from past observations and model-based simulations of future interactions. Unusually, the full report is available to non-subscribers; a good summary can be found at SciDev.net.

The nations that have been, and will be, hardest-hit by climate-related health effects are those least able to respond; they're also the least responsible for the global temperature increases both over the past century and (with the arguable exceptions of India and China) likely over the next. This is not a happy article, or a study full of solutions; it does, however, underscore why global warming is so dangerous -- and why the need to respond to environmental risks can't be disconnected from the need to respond to global poverty.

The World Health Organization now estimates that at least 150,000 deaths each year are directly attributable to the effects of climate disruption. Over the next 25 years, that risk will rise substantially:

The Iraq situation may be approaching a tipping point with one influential Democrat congressman calling for the US to withdraw in a speech that belaboured the obvious. Of course, that won't stop the neoconservative cabal shrieking in fury and doing their best to demonise him - but as this guy is a real Army veteran and they are a bunch of draft dodging, bloodthirsty chickenhawks its hard to see too many people taking them seriously (not that it matters of course).

However its equally hard to see any sort of pleasant outcome resulting - we won't withdraw (disaster or not, I can't see any politician in the hot seat giving up theoretical control of that oil), things will continue to get worse and I can't begin to guess what the final outcome will be - but I doubt it will make anyone happy. As Billmon notes, we're in a world of shit.

The war in Iraq is not going as advertised. It is a flawed policy wrapped in illusion. The American public is way ahead of us. The United States and coalition troops have done all they can in Iraq, but it is time for a change in direction. Our military is suffering. The future of our country is at risk. We cannot continue on the present course. It is evident that continued military action is not in the best interests of the United States of America, the Iraqi people or the Persian Gulf Region. [...]

The main reason for going to war has been discredited. [...]

The threat posed by terrorism is real, but we have other threats that cannot be ignored. We must be prepared to face all threats. The future of our military is at risk. Our military and their families are stretched thin. Many say that the Army is broken. Some of our troops are on their third deployment. Recruitment is down, even as our military has lowered its standards. [...]

George Washington said, "To be prepared for war is one of the most effective means of preserving peace." We must rebuild out Army. Our deficit is growing out of control. The Director of the Congressional Budget Office recently admitted to being "terrified" about the budget deficit in the coming decades. This is the first prolonged war we have fought with three years of tax cuts, without full mobilization of American industry and without a draft. The burden of this war has not been shared equally; the military and their families are shouldering this burden.

Our military has been fighting a war in Iraq for over two and a half years. Our military has accomplished its mission and done its duty. Our military captured Saddam Hussein, and captured or killed his closest associates. But the war continues to intensify. Deaths and injuries are growing, with over 2,079 confirmed American deaths. Over 15,500 have been seriously injured and it is estimated that over 50,000 will suffer from battle fatigue. There have been reports of at least 30,000 Iraqi civilian deaths. [...]

I suspect the debate about what we are going to do could become slightly more transparent and reality based in the coming months (as opposed to the present Winston Churchill mode - the truth being so precious it must be hidden in a cloud of lies), with both former US Secretary of Defense James Schlesinger and former CIA Director James Woolsey testifying before the US Senate on peak oil and some of its ramifications. Woolsey's "geo-green" style recommendations appear reasonable actions in the medium term, as he proposed a mix of RMI style changes to vehicles, biofuel development and focussing on plug-in hybrid and battery development. Of course, he would be biting the hand that feeds him to suggest a greater use of renewable energy sources, however that is compatible with the plug in hybrid and battery strategy anyway - so I won't be too critical (of course, he also quotes the idiotic Huber and Mills and their bottomless well of stupidity, for which there can be no forgiveness).

Speaking of battery technology, the Energy Blog has a post up on developments in Lithium Batteries.

Two of the largest battery manufactures have made it official, they both say that Lithium-ion batteries will be the standard battery for hybrid electric vehicles (HEVs) in a few years.

Sanyo Electric Co., the largest manufacturer of nickel-metal hydride batteries, predicts that by 2010, the majority of hybrid vehicles will use lithium-ion batteries. Currently, all hybrids use nickel-metal hydride batteries.

Johnson Controls recently launched an advanced lithium-ion battery development laboratory, to create advanced power-storage solutions for near-future hybrid-electric vehicles. The facility – located at the company’s Battery Technology Center – features a “dry room” and an array of highly specialized tools and equipment for designing, developing and testing power-storage and power-management concepts based on lithium-ion technology. The new laboratory facility and development equipment were installed at a cost of approximately $4 million. The company believes lithium ion technology is likely to replace nickel-metal-hydride as the battery technology of choice in hybrid-electric and electric vehicles in the future. Johnson Controls, the world’s largest manufacturer of automotive original equipment and aftermarket batteries, manufactures and distributes more than 80 million batteries annually.

In 2004, the company was granted a contract for lithium-ion battery development by the United States Advanced Battery Consortium (USABC). In this program, Johnson Controls has been tapped to develop an abuse-tolerant, lithium-ion battery offering extended life and significantly improved power-to-weight performance vs. current hybrid-battery technology. The USABC, which includes the U.S. Department of Energy, DaimlerChrysler, Ford and General Motors as members, supports research and development for advanced energy systems to power future HEVs.

According to industry projections, sales of HEVs in the U.S. and European automotive markets could reach 6 million units within a decade.

Although lithium-ion batteries are currently more expensive, their advantages over nickel-metal hydride batteries include higher voltage, power density and energy density. But the batteries still have a number of problems. Early lithium-ion batteries had a tendency to short-circuit internally, sometimes melting cell-phone cases. More testing is needed to ensure that the short-circuit problem has been solved. In addition, the batteries have yet to be proved crashworthy.

On a more colourful note, MetaEfficient has a post on new LED lightbulbd from Philips.

The new LED light bulbs from Philips will change color and brightness with one touch, squeeze, or turn. They are also energy efficient and last 10-20 years. Good work. Expect to see these in coming months or years.

And continuing a walk through my less travelled parts of the Viridian world, TriplePundit has a "Carnival of the Green" going.

And to close, here's one for the "free energy" crowd with Boing Boing noting the US patent office has issued a patent for anti-gravity. This could either be viewed as a remarkable breakthrough or confirmation that the patents process is irreversibly broken.