Twilight In The Desert ?  

The Oil Drum's Stuart Staniford is making the case that Suadi Arabian production has passed its peak, with an implied decline rate for 2006 of 8%. While some are declaring that this means Saudi production is definitely in decline and the world has therefore passed its peak, I'd be a little wary, for a number of reasons. In no particular order, (a) I'm not aware that worldwide production has showed any sign of decline, (b) US$ oil prices certainly have declined a lot from their peak, and aren't showing any particular signs of jumping again, (c) the US$ itself has plenty of skeptics muttering about the now-extinct M3 measure of money supply and a tidal wave of global liquidity, and (d) its theoretically possible (although not practical at the present time) for Iraq to produce at least as much oil as Saudi Arabia currently does (ie. another 9 million barrels a day) - a fact propaganda trolls use to try and paint the invasion in a positive light from time to time.

So don't get too excited about this report just yet...

What I did in this post was to look in more detail at what happened from the beginning of 2006 on, which is when the apparent decline begins. I added data from a fourth source (the OPEC Monthly Oil Market Review), and for each of the four sources of data, I fit a linear trend:



The resulting graph is extremely striking, I think. The four different sources all estimate Saudi production slightly differently - they fluctuate in different ways month to month, and disagree over the absolute level (that last may be differences in exactly what is defined as oil). However, the regressions make clear that all four sources are in strong agreement about the nature of the decline. The slopes of the lines are very similar.

The implied decline rate through the year is 8% ± 0.1%. (Note that the year on year decline from 2005 to 2006 will only be about half that, as the decline only began at the beginning of 2006). As far as I know, there are no known accidents or problems that would explain any restrictions on oil supply, and the Saudis themselves have maintained publicly that their production is unproblematic and they intend to increase it.

It's interesting to note the pattern in the underlying data where declines start, are interrupted in the middle of the year, and then resume. I take this to be due to the coming onstream of the 300kbpd of liquids from the Haradh III megaproject. [...]

It seems this did not do more than briefly interrupt the declines. We can get a clearer picture as follows. What I did was average the EIA, IEA, and JODI series for 2005 and 2006 into a single estimate. Onto that, I've hand drawn a couple of guidelines that are 300 kbpd apart vertically:



My intepretation is that the bump in the middle of the year that separates the two lines is due to the impact of Haradh III coming on stream. So that tells us that, given some extra production capacity, Saudi Aramco immediately threw it into the production mix. And the effect of that? It lifted the plummeting production curve up by 300kbpd, but did nothing to change the gradient of the plummet. That suggests that the Saudis had nothing else to throw at the problem.

It also suggests that last year's underlying Type II decline rate, before megaprojects like Haradh III, was 14%.

Overall, I feel this data is clear enough that I'm willing to go out on a limb and conclude the following:

# Saudi Arabian oil production is now in decline.
# The decline rate during the first year is very high (8%), akin to decline rates in other places developed with modern horizontal drilling techniques such as the North Sea.
# Declines are rather unlikely to be arrested, and may well accelerate. ...

I suggest that this is likely to place severe political strains on Saudi Arabia within a year or two at most. ...

I'll bet $1000 with the first person who cares to take me up on it that the international oil agencies will never report sustained Saudi production of crude+condensate of 10.7 million barrels or more.

The Christian Science Monitor predicts that Iraq's new oil law won't last.

With considerable fanfare, Iraq's cabinet last week announced approval of a draft law that would permit foreign investment in the nation's oil industry and provide for distribution of oil revenues among the regions and thus the country's main sectarian blocs.

Details of the draft are tricky. Revenues from current oil fields are to be shared according to population. Yet no recent census has been taken. The Kurdish region in the north and the provinces can sign new oil contracts, but these must be reviewed by an independent federal committee, not yet appointed. There is concern that foreign oil companies might try to get better terms by playing the provinces against one another.

But some oil experts are skeptical of the significance of the measure. "It will not mean anything on the ground," says A.F. Alhajji, an oil economist at Ohio Northern University in Ada. As long as Iraq suffers from political instability, major oil companies will shy away. "The situation is so bad no one in his right mind wants to go there to be attacked or nationalized a second time." Fearing the consequences, "The oil companies never supported the invasion," Dr. Alhajji adds.

Iraq's oil remains important to a world highly reliant on petroleum and its byproducts. Iraq has proven reserves of 115 billion barrels and, according to Iraqi oil economist Muhammad-Ali Zainy, another 215 billion to 240 billion barrels not yet proven. Some of that new oil may cost as little as $1 a barrel to extract.

By comparison, Saudi Arabia has 264 billion barrels of proven reserves.

Because of sabotage by insurgents, Iraqi oil production has been running at less than 2 million barrels per day, down from 2.8 million barrels before the invasion of Iraq in March 2003, says Mr. Zainy, now with the Global Center for Energy Studies in London.

To Alhajji, the "rush" to approve the draft law reflects the need of the Iraqi government and the Bush administration to show some success – "even if it is as cosmetic as the new oil law." Zalmay Khalilzad, US ambassador in Iraq, stated the draft was the "first time since 2003 that all major Iraqi communities have come together on a defining piece of legislation."

Iraq's government hopes the nation's 275-member parliament will approve the draft before the end of May. The legislation will be extremely controversial. Opposition is expected from the powerful Oil Workers Union of Basra. It staged strikes in 2005 objecting to America's plan to privatize Iraq's oil industry. A reviving Communist Party will oppose it. Much of the Iraqi press also objects to aspects of the law. ...

During the 20th century, oil became the fulcrum of politics in the Middle East, with countries nationalizing their oil resources and winning better oil deals. The draft law "reverses everything that has happened in the Middle East since 1901," charges Rashid Khalidi, director of the Middle East Institute at Columbia University in New York. Implying that American occupiers have had much influence on the measure, Mr. Khalidi asks: "Does [Vice President] Cheney think he can stand against history?"

Khalidi's latest book, "Resurrecting Empire," spells out the history of foreign exploitation of Iraqi oil, noting that resentment over "insufficient benefits" to Iraqis led to the popularity of the Baath government and nationalization of the oil industry in 1975. Khalidi doubts the draft law will pass parliament. "It is so manifestly against the interests of Iraq," he says. If it does, though, he doesn't expect the law to last. Presumably, an Iraq no longer occupied would seek better terms for any deal reached under the proposed law.

Alhajji notes that contracts signed "under duress" are not legally binding. After Iran nationalized its oil industry in the 1950s, British lawyers for the Anglo-Persian Oil Company (now British Petroleum) contested the action in the International Court in the Hague and lost, despite Britain's superpower status then.

In the future, Iraqi lawyers could similarly argue that any oil deal signed while Iraq was occupied was done under duress and thus was invalid. After reading the draft law in Arabic last week, Alhajji says, "It is so broad and loose, it has no significance." Often, he says, nationalism in oil-rich nations rises during and after occupation by foreigners. That "will cause problems."

Democracy Now has a fairly interesting interview with Wesley Clark, who has some worthwhile comments on a number of topics, including the claim that the US had plans in 2001 to invade seven countries in five years "starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran".

AMY GOODMAN: Now, let’s talk about Iran. You have a whole website devoted to stopping war.

GEN. WESLEY CLARK: Www.stopiranwar.com.

AMY GOODMAN: Do you see a replay in what happened in the lead-up to the war with Iraq -- the allegations of the weapons of mass destruction, the media leaping onto the bandwagon?

GEN. WESLEY CLARK: Well, in a way. But, you know, history doesn’t repeat itself exactly twice. What I did warn about when I testified in front of Congress in 2002, I said if you want to worry about a state, it shouldn’t be Iraq, it should be Iran. But this government, our administration, wanted to worry about Iraq, not Iran.

I knew why, because I had been through the Pentagon right after 9/11. About ten days after 9/11, I went through the Pentagon and I saw Secretary Rumsfeld and Deputy Secretary Wolfowitz. I went downstairs just to say hello to some of the people on the Joint Staff who used to work for me, and one of the generals called me in. He said, “Sir, you’ve got to come in and talk to me a second.” I said, “Well, you’re too busy.” He said, “No, no.” He says, “We’ve made the decision we’re going to war with Iraq.” This was on or about the 20th of September. I said, “We’re going to war with Iraq? Why?” He said, “I don’t know.” He said, “I guess they don’t know what else to do.” So I said, “Well, did they find some information connecting Saddam to al-Qaeda?” He said, “No, no.” He says, “There’s nothing new that way. They just made the decision to go to war with Iraq.” He said, “I guess it’s like we don’t know what to do about terrorists, but we’ve got a good military and we can take down governments.” And he said, “I guess if the only tool you have is a hammer, every problem has to look like a nail.”

So I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, “Are we still going to war with Iraq?” And he said, “Oh, it’s worse than that.” He reached over on his desk. He picked up a piece of paper. And he said, “I just got this down from upstairs” -- meaning the Secretary of Defense’s office -- “today.” And he said, “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.” I said, “Is it classified?” He said, “Yes, sir.” I said, “Well, don’t show it to me.” And I saw him a year or so ago, and I said, “You remember that?” He said, “Sir, I didn’t show you that memo! I didn’t show it to you!”

AMY GOODMAN: I’m sorry. What did you say his name was?

GEN. WESLEY CLARK: I’m not going to give you his name.

AMY GOODMAN: So, go through the countries again.

GEN. WESLEY CLARK: Well, starting with Iraq, then Syria and Lebanon, then Libya, then Somalia and Sudan, and back to Iran. So when you look at Iran, you say, “Is it a replay?” It’s not exactly a replay. But here’s the truth: that Iran, from the beginning, has seen that the presence of the United States in Iraq was a threat -- a blessing, because we took out Saddam Hussein and the Baathists. They couldn’t handle them. We took care of it for them. But also a threat, because they knew that they were next on the hit list. And so, of course, they got engaged. They lost a million people during the war with Iraq, and they’ve got a long and unprotectable, unsecurable border. So it was in their vital interest to be deeply involved inside Iraq. They tolerated our attacks on the Baathists. They were happy we captured Saddam Hussein.

But they're building up their own network of influence, and to cement it, they occasionally give some military assistance and training and advice, either directly or indirectly, to both the insurgents and to the militias. And in that sense, it's not exactly parallel, because there has been, I believe, continuous Iranian engagement, some of it legitimate, some of it illegitimate. I mean, you can hardly fault Iran because they're offering to do eye operations for Iraqis who need medical attention. That's not an offense that you can go to war over, perhaps. But it is an effort to gain influence.

And the administration has stubbornly refused to talk with Iran about their perception, in part because they don't want to pay the price with their domestic -- our US domestic political base, the rightwing base, but also because they don't want to legitimate a government that they've been trying to overthrow. If you were Iran, you'd probably believe that you were mostly already at war with the United States anyway, since we've asserted that their government needs regime change, and we've asked congress to appropriate $75 million to do it, and we are supporting terrorist groups, apparently, who are infiltrating and blowing up things inside Iraq -- Iran. And if we're not doing it, let's put it this way: we're probably cognizant of it and encouraging it. So it's not surprising that we're moving to a point of confrontation and crisis with Iran.

My point on this is not that the Iranians are good guys -- they're not -- but that you shouldn't use force, except as a last, last, last resort. There is a military option, but it's a bad one. ...

AMY GOODMAN: General Clark, do you think Guantanamo Bay should be closed?

GEN. WESLEY CLARK: Absolutely.

AMY GOODMAN: If Congress cut off funds for the prison there, it would be closed. Should they?

GEN. WESLEY CLARK: Well, I think the first thing Congress should do is repeal the Military Commissions Act. I’m very disturbed that a number of people who are looking at the highest office in the land have supported an act which advertently or inadvertently authorizes the admission into evidence of information gained through torture. That's not the America that I believe in. And the America that I believe in doesn't detain people indefinitely without charges. So I’d start with the Military Commissions Act.

Then I’d get our NATO allies into the act. They've said they don't like Guantanamo either. So I’d like to create an international tribunal, not a kangaroo court of military commissions. And let's go back through the evidence. And let's lay it out. Who are these people that have been held down there? And what have they been held for? And which ones can be released? And which ones should be tried in court and convicted?

You see, essentially, you cannot win the war on terror by military force. It is first and foremost a battle of ideas. It is secondly a law enforcement effort and a cooperative effort among nations. And only as a last resort do you use military force. This president has distorted the capabilities of the United States Armed Forces. He's used our men and women in uniform improperly in Guantanamo and engaged in actions that I think are totally against the Uniform Code of Military Justice and against what we stand for as the American people.

AMY GOODMAN: Do you think that President Bush should be impeached?

GEN. WESLEY CLARK: Well, I think we ought to do first thing's first, which is, we really need to understand and finish the job that Congress started with respect to the Iraq war investigation. Do you remember that there was going to be a study released by the Senate, that the senator from Iowa or from Kansas who was the Republican head of the Senate Intelligence Committee was going to do this study to determine whether the administration had, in fact, misused the intelligence information to mislead us into the war with Iraq? Well, I’ve never seen that study. I’d like to know where that study is. I’d like to know why we’ve spent three years investigating Scooter Libby, when we should have been investigating why this country went to war in Iraq.

AMY GOODMAN: The Center for Constitutional Rights has filed a complaint against Donald Rumsfeld, General Miller and others in a German court, because they have universal jurisdiction. Do you think that Donald Rumsfeld should be tried for war crimes?

GEN. WESLEY CLARK: Well, I’d like to see what the evidence is against Rumsfeld. I do know this, that there was a lot of pressure put on the men and women in uniform to come up with intelligence. I remember -- I think it was either General Sanchez or General Abizaid, who stated that we don't need more troops -- this is the fall of 2003 -- we just need better information. Well, to me, that was immediate code words that we were really trying to soak these people for information.

And it's only a short step from there to all the kinds of mistreatment that occur at places like Abu Ghraib. So we know that Al Gonzales wrote a couple of really -- or authored, or his people authored and he approved, a couple of outrageous memos that attempted to define torture as deliberately inflicted pain, the equivalent of the loss of a major bodily organ or limb, which is -- it's not an adequate definition of torture. And we know that he authorized, to some degree, some coercive methods, which we have -- and we know President Bush himself accepted implicitly in a signing statement to a 2005 act on military detainees that he would use whatever methods were appropriate or necessary. So there's been some official condoning of these actions.

I think it's a violation of international law and a violation of American law and a violation of the principles of good government in America. ...

AMY GOODMAN: 1953 was also a seminal date for today, and that was when Kermit Roosevelt, the grandson of Teddy Roosevelt, went to Iran and led a coup against Mohammed Mossadegh under Eisenhower.

GEN. WESLEY CLARK: People make mistakes. And one of the mistakes that the United States consistently made was that it could intervene and somehow adjust people's governments, especially in the Middle East. I don't know why we felt that -- you can understand Latin America, because Latin America was always an area in which people would come to the United States, say, “You've got to help us down there. These are banditos, and they don't know anything. And, you know, they don’t have a government. Just intervene and save our property.” And the United States did it a lot in the ’20s. Of course, Eisenhower was part of that culture. He had seen it.

But in the Middle East, we had never been there. We established a relationship during World War II, of course, to keep the Germans out of Iran. And so, the Soviets and the Brits put an Allied mission together. At the end of World War II, the Soviets didn't want to withdraw, and Truman called their bluff in the United Nations. And Eisenhower knew all of this. And Iran somehow became incorporated into the American defense perimeter. And so, his view would have been, we couldn't allow a communist to take over.

AMY GOODMAN: But wasn't it more about British Petroleum?

GEN. WESLEY CLARK: Oh, it's always -- there are always interests. The truth is, about the Middle East is, had there been no oil there, it would be like Africa. Nobody is threatening to intervene in Africa. The problem is the opposite. We keep asking for people to intervene and stop it. There's no question that the presence of petroleum throughout the region has sparked great power involvement. Whether that was the specific motivation for the coup or not, I can't tell you. But there was definitely -- there's always been this attitude that somehow we could intervene and use force in the region. I mean, that was true with -- I mean, imagine us arming and creating the Mujahideen to keep the Soviets out of Afghanistan. Why would we think we could do that? But we did. And, you know, my lesson on it is, whenever you use force, there are unintended consequences, so you should use force as a last resort. Whether it's overt or covert, you pay enormous consequences for using force. ...

One country on Clark's list of invadees was Libya, which did an about face a few years ago and reconciled with the West (maybe this was one rare case where the US stick worked). Libya was at one point the world's largest oil producer, in the years before Gaddafi's coup, when the independent oil companies like Occidental were living it up - which was one of the more intriguing chapters of "The Control of Oil". The Libyan oil rush is on again in earnest now, with reports of fierce competition in scramble for Libya's black gold.

After 20 years of isolation, Libya has become the destination of choice for hungry oil companies ready to cut any kind of deal to get a piece of the north African state's oil riches. "It's a race for our black gold," president of the National Oil Company Shukri Ghanem told AFP. "We are organising it like the Olympic Games and may the best one win."

With each subsequent round of concessions, companies from all over the world have been undercutting each other's bids to the barest limits of profitability.

With the end of UN sanctions after Libyan leader Moamer Kadhafi dramatic decision in December 2003 to abandon weapons of mass destruction programmes, oil exploration has picked up from its long hiatus at a frenetic pace. OPEC member Libya is Africa's second largest oil producer with 1.6 million barrels of oil per day (bpd). Its reserves are estimated at 42 billion barrels of high quality crude which could rise to Kuwait-like levels of 100 billion with new explorations.

"Libya is one of those rare countries that has huge exploration zones of practically virgin territory, but some companies are rushing into them on terms that are only barely economically feasible," noted Philippe Malzac, head of French oil company Total in Libya. ...

While the agreements began with an average share of 25 percent for the companies, in the third round Chinese Petroleum offered to take only 7.8 percent, while Russia's Gazprom and Tatneft dropped to 10 percent. "Taking into account the risks and the rise in cost of investments, the companies submitting such offers are not functioning solely on economic criteria -- it's disturbing," said a Western oil man who preferred to remain anonymous. For him and many other representatives of the Western companies, these kinds of deals smack of "dumping" on the part of the energy-hungry Chinese, Indians and Russians.

American giant Exxon is sitting pretty with a massive offshore concession of 10,000 square kilometres (3,800 square miles) in the Sirte basin, along 160 kilometres (100 miles) of coastline, which it obtained without competition. "We are very happy with this concession," said Philippe Gosse, head of Libyan operations. "Exxon-Mobil has a long history of successes in Libya."

Oil makes up 95 percent of Libya's exports -- with 40 percent of it going straight to Italy -- and 70 percent of its GDP. The country is hoping to return to its pre-embargo production rate of three million barrels per day.

Mobjectivist points to some sludge from the NYT about the Kern River field in California.

Thanks to the Matt Sludge Report, I see a writer (Jad Mouawad) from the NY Times thinks that we will beat Peak Oil by relying on sludge. Note the bolded portion of the article: Oil Innovations Pump New Life Into Old Wells.

The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressured steam to pump out more oil. The field, whose production had slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels.

In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s.

And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use three-dimensional imaging of the underground field and the injection of a gas — in this case, carbon dioxide — to flush out the oil.

Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before.

In a wide-ranging study published in 2000, the U.S. Geological Survey estimated that ultimately recoverable resources of conventional oil totaled about 3.3 trillion barrels, of which a third has already been produced. More recently, Cambridge Energy Research Associates, an energy consultant, estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate — which Cambridge Energy says is likely to grow — reflects how new technology can tap into more resources.

“It’s the fifth time to my count that we’ve gone through a period when it seemed the end of oil was near and people were talking about the exhaustion of resources,” said Daniel Yergin, the chairman of Cambridge Energy and author of a Pulitzer Prize-winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. “Back then we were going to fly off the oil mountain. Instead we had a boom and oil went to $10 instead of $100.”

There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading. Equally contentious for the oil companies is the growing voice of environmentalists, who do not think that pumping and consuming an ever-increasing amount of fossil fuel is in any way desirable.

Increased projections for how much oil is extractable may become a political topic on many different fronts and in unpredictable ways. By reassuring the public that supplies will meet future demands, oil companies may also find legislators more reluctant to consider opening Alaska and other areas to new exploration.

On a global level, the Organization of the Petroleum Exporting Countries, which has coalesced around a price of $50 a barrel for oil, will likely see its clout reinforced in coming years. The 12-country cartel, which added Angola as its newest member this year, is poised to control more than 50 percent of the oil market in coming years, up from 35 percent today, as Western oil production declines.

Oil companies say they can provide enough supplies — which might eventually lead to lower oil and gasoline prices — but that they see few alternatives to fossil fuels. Inevitably, this means that global carbon emissions used in the transportation sector will continue to increase, and so will their contribution to global warming.

The oil industry is well known for seeking out new sources of fossil fuel in far-flung places, from the icy plains of Siberia to the deep waters off West Africa. But now the quest for new discoveries is taking place alongside a much less exotic search that is crucial to the world’s energy supplies. Oil companies are returning to old or mature fields partly because there are few virgin places left to explore, and, of those, few are open to investors.

At Bakersfield, for example, Chevron is using steam-flooding technology and computerized three-dimensional models to boost the output of the field’s heavy oil reserves. Even after a century of production, engineers say there is plenty of oil left to be pumped from Kern River.

“We’re still finding new opportunities here,” said Steve Garrett, a geophysicist with Chevron. “It’s not over until you abandon the last well, and even then it’s not over.”

Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak — if it has not already — and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline.

“I am very, very seriously worried about the future we are facing,” said Kjell Aleklett, the president of the Association for the Study of Peak Oil and Gas. “It is clear that oil is in limited supplies.”

Many oil executives say that these so-called peak-oil theorists fail to take into account the way that sophisticated technology, combined with higher prices that make searches for new oil more affordable, are opening up opportunities to develop supplies. As the industry improves its ability to draw new life from old wells and expands its forays into ever-deeper corners of the globe, it is providing a strong rebuttal in the long-running debate over when the world might run out of oil.

Typically, oil companies can only produce one barrel for every three they find. Two usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so. Going after these neglected resources, energy experts say, represents a tremendous opportunity.

“Ironically, most of the oil we will discover is from oil we’ve already found,” said Lawrence Goldstein, an energy analyst at the Energy Policy Research Foundation, an industry-funded group. “What has been missing is the technology and the threshold price that will lead to a revolution in lifting that oil.”

Nansen G. Saleri, the head of reservoir management at the state-owned Saudi Aramco, said that new seismic tools giving geologists a better view of oil fields, real-time imaging software and the ability to drill horizontal wells could boost global reserves.

Mr. Saleri said that Saudi Arabia’s total reserves were almost three times higher that the kingdom’s officially published figure of 260 million barrels, or about a quarter of the world’s proven total.

He estimated the kingdom’s resources at 716 billion barrels, including oil that has already been produced as well as more uncertain reserves. And thanks to more sophisticated technology, Mr. Saleri said he “wouldn’t be surprised” if ultimate reserves in Saudi Arabia eventually reached 1 trillion barrels.

Even if the Saudi estimates are impossible to verify, they underline the fact that oil companies are constantly looking for new ways to unlock more oil from the ground.

At the Kern River field just outside of Bakersfield, millions of gallons of steam are injected into the field to melt the oil, which has the unusually dense consistency of very thick molasses. The steamed liquid is then drained through underground reservoirs and pumped out by about 8,500 production wells scattered around the field, which covers 20 square miles.

Initially, engineers expected to recover only 10 percent of the field’s oil. Now, thanks to decades of trial and error, Chevron believes it will be able to recover up to 80 percent of the oil from the field, more than twice the industry’s average recovery rate, which is typically around 35 percent. Each well produces about 10 barrels a day at a cost of $16 each. That compares with production costs of only $1 or $2 a barrel in the Persian Gulf, home to the world’s lowest-cost producers.

Chevron hopes to use the knowledge it has obtained from this vast open-air, and underground, laboratory and apply it to similar heavy oil fields around the world. It is also planning a large pilot program to test the technology in an area between Saudi Arabia and Kuwait, for example.

Oil companies have been perfecting so-called secondary and tertiary recovery methods — injecting all sorts of exotic gases and liquids into oil fields, including water and soap, natural gas, carbon dioxide and even hydrogen sulfide, a foul-smelling and poisonous gas.

Since the dawn of the Petroleum Age more than a century ago, the world has consumed more than 1 trillion barrels of oil. Most of that was of the light, liquid kind that was easy to find, easy to pump and easy to refine. But as these light sources are depleted, a growing share of the world’s oil reserves are made out of heavier oil.

Too bad we have completely debunked the reserve growth cornucopians, and that recent CERA publicity has lead to this ignorant journalist to rely on cherry-picked examples. The Kern River field remains a huge anomaly that even Attanasi & Root kept off their reserve growth prognostications.

Kern River is an interesting field - much talked about by the anti-peak oil conspiracy theory set - as an example, try this aging piece of tinfoil from Dave McGowan - its worth keeping an open mind about this field I suspect - while infinite growth of reserves is impossible, determining the exact amount of oil produced by a particular field over its lifetime does seem to be quite a tricky thing to do...


Jim at The Energy Blog has a detailed post on the need for biofuels and battery based vehicles. Jim is the best pure energy blogger in the business, so go read the whole thing - I quote a large section below but there's more.

Based on the response to this mornings post on the governments cellulosic ethanol program, I think some of you may have misunderstood the reasoning behind The Energy Blog supporting this cellulosic ethanol program and some of the basic causes and remedies of The Energy Revolution. Our most pressing energy problem is our decreasing supplies of increasingly expensive oil for the transportation industries. The high use of petroleum products for transportation is one of the primary causes of global warming (the other being coal fired power plants, which will not be discussed in this post), fortunately the solution to the problem of increased use of petroleum products also decreases the emissions of global warming gases.

This is not a short term problem, but one that has taken years to develop and will take years to solve. The timing is hard to pin down. I believe we have passed the peak production of inexpensive sweet crude oil. Each year we are now using larger quantities of expensive (either to harvest and/or refine) oil, whether it be sour oil, very deep offshore oil, heavy oil or perhaps eventually shale oil. At some time, as prices of oil go up, market forces will cause the use of oil to decrease. This would require changes in lifestyle, some of which would be beneficial, as there is much waste and some of which could reduce the the standard of living that we have become used to. More use of mass transportation and driving more efficient vehicles are certainly required.

We currently import nearly two-thirds of our oil. This is increasingly being viewed as a strategic problem, in that we are becoming more and more dependent on obtaining oil from countries that are unstable and not necessarily friendly to the U.S. Most of this oil or its products are used in the transportation industry and thus this becomes the focus of reduced usage.

At the same time increasing use of oil in China, India and other Southeastern Asian countries is putting greater demands on world wide oil production, compounding the problem.

Two general initiatives are underway to mediate this problem 1) Decreasing the use of petroleum products by a)increasing vehicle efficiency and b)by powering vehicles by means that do not use liquid fuels, such as batteries, fuel cells or CNG 2) Developing alternate liquid fuels that are not petroleum based, such as ethanol, biodiesel, biobutane and liquified coal.

Both of these initiatives are required to alleviate severe problems in the future. The current pricing structure is not of too much concern, by the time the problem will become crucial, say greater than $5.00 gasoline, oil will be much more expensive and the alternate fuels will be relatively more economical. We will always have a need for liquid fuels, it would be extremely, if not prohibitively expensive to convert all vehicles to either fuel cells using very expensive hydrogen or battery based power which includes hybrids (HEVs), plug-ins (PHEVs) and battery electric vehicles (BEVs).

Corn ethanol has a small net positive energy efficiency and is land intensive. Its place is/was primarily to establish a market for ethanol which would have cost several years if we were to have started with cellulosic ethanol. We have reached the point, that with the corn ethanol plants now planned for construction, we will have reached the limit at which corn ethanol is a viable fuel. This is evidenced by large increases in the cost of corn, caused by increasing limitations on the amount of corn that can be grown for its various uses, ie, food, cattle food and ethanol; the plowing in of land used by other crops so that it can be used for corn and increasing prices for farmland.

Cellulosic ethanol on the other hand has a larger net positive energy efficiency and uses crops that are much less land and water usage intensive. It is a technology that for the most part is just coming out of the laboratory or pilot plant stage. It has been postulated that corn ethanol at best can provide 12-15% of our liquid fuels, while cellulosic ethanol could provide 30-35% of our current requirement for liquid fuels. It is also believed that our current ethanol biorefineries can be converted to produce cellulosic ethanol with relative ease.

Ethanol has two downsides 1) it is currently must be transported only by truck and rail cars because it absorbs water which is corrosive to existing pipelines. Cellulosic ethanol minimizes this problem because it can be produced in a more distributed manner, closer to population centers. This could be also be alleviated by constructing new pipelines made of corrosion resistant fiberglass as is used to transport natural gas. Biobutanol eliiminates this problem because it is not hydroscopic. 2) The heating value of ethanol is less than that of gasoline, so that mileage per gallon is reduced. Biobutanol reduces this problem because its heating value is 30% higher than ethanol, close to that of gasoline. (paragraph added 8:30 am 3/2/07)

Whether it be increasing costs of oil, ever increased demands for oil, or strategic needs, all of these reasons point to a need to urgently develop our capability to produce biofuels. Many of the same reasons could be postulated for the use of biobutanol or biodiesel from algae. For whatever reasons the government has not become very involved in these technologies.

Private industry in the name of a combine of Dupont and BP are spearheading the drive to use biobutanol and they probably have the money and science to make a go of it. It was announced today that the U.S. EPA will give a $70,000 contract to Integrated Genomics Inc. to develop a method to produce butanol from biomass that is economically competitive with the chemical synthesis of
butanol from petroleum. In 2004, EPA awarded a contract, running through September 2007, to The Consortium for Plant Biotechnology Research (CPBR) at Ohio State University to develop a process for butanol from biomass.

There is still much research to be done on producing biodiesel from algae. This is being pursued by several private firms, especially those that are growing algae with the aid of CO2 from the exhaust from powerplants. If this technology is to be developed at a reasonable pace it may take a grass roots effort from private citizens to uplift it into a mainstream technology, receiving the government support needed to implement it.

Through the use of battery based vehicles and other conservation efforts, it is estimated that we can eventually reduce our liquid fuel consumption by two-thirds, which would be consistant with the combination of biofuel and domestic oil supplies, with the usage of biofuels increasing as domestic oil supplies decline.

My stance on the hydrogen economy is that, for the most part, it is a waste. The power plants that are being proposed to produce hydrogen would be better served by using their electricity to more efficiently charge batteries. The infrastructure required to distribute hydrogen would be all new and very expensive, while alternative liquid fuels can use an existing infrastructure. The storage of hydrogen in vehicles is very obtrusive and expensive. The use of fuel cells, which are part of the hydrogen economy, in stationary uses, especially power plants, looks very promising. The technology for these fuel cells, most likely SOFC fuel cells, is less stringent and is moving along fairly rapidly. No infrastructure for distribution of fuel is required as the fuel would be generated at the power plant site. ...

Wired has an article on a backyard fuel cell setup that sounds like an interesting implementation of Richard Smalley's idea of a home based power storage unit - the basis of the smart grid.

Stephen Friend has the first hand-built fuel cell-powered house in the US. No, not another hopeful boil-your-own-yogurt demo for an impractical technology, but a real, sustainable achievement that makes its own hydrogen in a cedar shed out back. And it has a huge advantage over electric systems favored by his neighbors on Stuart Island, an off-the-grid Pacific Northwest paradise in Washington’s Puget Sound. Most residents there use solar power but must rely on noisy backup generators as well, since their batteries don’t hold enough energy to get them through the winter. So with the help of two buddies, Friend, a Merck vice president and pioneer in digital gene arrays, drew a back-of-the-envelope plan for an energy storage system that extends the life of battery banks. In 2004, they started rigging up a Rube Goldberg contraption that uses solar panels and electrolyzers to generate hydrogen and allows Web-based monitoring of its proton-exchange-membrane fuel cell. In late 2006, a bemused but impressed inspector granted state approval. Now the system, which they built for around $50,000, taps any surplus solar electricity to fill a 500-gallon hydrogen fuel tank, enough reserve for about 14 days’ worth of power (a second tank can be added to double that capacity). Friend thinks of the setup as sort of a TiVo for energy — bank hydrogen during the summer, then consume as it’s needed. ...

NASA's James Hansen notes that the time for building coal fired power stations has passed and plans should be drawn up for bulldozing existing plants.

One of the world's top climate scientists called for an end to building new coal-fired power plants in the United States because of their huge role in spewing out greenhouse gases that contribute to global warming. In the next decade of so, 159 coal-fired power plants are scheduled to be built, generating enough power for about 96 million homes, according to a study last month by the U.S. Department of Energy.

"There should be a moratorium on building any more coal-fired power plants," NASA scientist James Hansen told the National Press Club Monday. Hansen was one of the earliest top researchers to warn the world of global warming.

Hansen's call dovetails with an edict by the private equity group buying TXU, a massive Texas-based utility. The equity group, led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group, agreed to stop plans to build eight new coal-fired power plants, not to propose new coal-fired plants outside Texas and to support mandatory national caps on emissions linked to global warming.

This is the first time Hansen, director of NASA's Goddard Institute for Space Studies in New York, has called for an end to coal burning. He said it's the No. 1 solution to global warming, and that so far, no coal-fired plants can capture carbon dioxide emissions so they are not released into the atmosphere.

While burning oil and natural gas also release carbon dioxide, they will run out and there's more coal to burn and pollute the Earth, so it's more of a threat, Hansen said. "Coal is the big amount," Hansen said. "Until we have that clean coal power plant, we should not be building them. It is as clear as a bell."

Hansen, who said he was speaking as a private citizen, also told the press club that by mid-century all coal-fired power plants that do not capture and bury carbon dioxide "must eventually be bulldozed." It's foolish to build new ones if the emissions can't be dealt with, he said.

He said the increased efficiency could make up for the cutbacks in coal.

Like the Bush administration, Hansen said he had high hopes for using cellulosic ethanol, or switchgrass, as an alternative fuel. But unlike the president's plan which is big on this source for cars, Hansen proposes burning switchgrass for electrical power and sequestering the carbon dioxide emissions underwater so it would reduce the atmosphere's carbon dioxide.

Although switchgrass could reduce our dependence on oil, burning switchgrass in cars would not reduce emissions much, he said.

Technology Review notes that a Canadian government has declared zero tolerance for Carbon-Dioxide Emissions - coal plants must clean up their act. According to tech review this means IGCC plants - so we may get to see if these are really an economic alternative to renewable. Or not.

Some energy experts say that meeting the policy, which states that coal plants must capture and sequester their carbon dioxide, effectively mandates the use of cleaner but more costly coal gasification technology called Integrated Gasification Combined Cycle (IGCC). In these power plants, coal is converted into a hydrogen-rich gas that burns clean like natural gas. Capturing carbon from these plants could be easier than capturing it from conventional coal plants. ...

Major utilities and technology providers in the United States say that IGCC technology is ready for commercial use. According to the National Energy Technology Laboratory, in Pittsburgh, IGCC is the technology selected for one-fifth of 159 new coal plants proposed since 2000. But so far, systems for capturing carbon dioxide from such power plants have not been engineered. And of the 32 proposed IGCC plants, only a handful are moving forward.

What is slowing the transition away from conventional pulverized-coal technology is IGCC's higher up-front cost. General Electric, which is providing the designs for the IGCC project that is now the farthest along, estimates that the first 10 will cost at least 10 to 15 percent more to build than a pulverized-coal plant. Other experts estimate that the cost premium could be much higher. That has made IGCC a tough sell, even though it is cleaner, emitting levels of smog-producing NOx and sulfur dioxide closer to those of a natural gas-fired power plant.

British Columbia's new carbon-dioxide policy, if adopted widely, could change the rules of the game. Adding the cost of capturing carbon would raise the price of power. But prices could go up less with IGCC technology, if it does indeed prove easier to capture carbon dioxide in such plants than in conventional plants. That could make IGCC plants the less costly alternative overall.

The proposed British Columbia policy, however, could have unintended consequences. John Thompson, director of the Coal Transition Program for the Clean Air Task Force, a nonprofit environmental consulting firm based in Boston, says that British Columbia's seemingly IGCC-friendly policy may be too ambitious because it would force IGCC operators to find a place to store their captured carbon dioxide. In Thompson's view, carbon-dioxide sequestration technology is not as mature as IGCC. "There's a tendency to think that geological sequestration from coal plants can emerge in one fell swoop. But [carbon capture and sequestration] are really two distinct technologies," argues Thompson. Sequestration is under way at several sites in Europe and the United States. Still, Thompson says that more testing is needed to see whether deep geologic formations are capable of absorbing the carbon dioxide from multiple power plants and safely holding it long term. "Who's liable if, God forbid, some of this carbon dioxide comes up?" he asks.

British Columbia's policy poses an immediate dilemma for the two coal-power projects currently pending in the Canadian province. Proponents of one project, a pulverized-coal plant proposed for Tumbler Ridge, are exploring the feasibility of adding carbon capture and storage, Neufeld says. The other project, in Princeton, has found an entirely different way around the new policy: dumping coal from its plan. The plant was originally designed to burn a fifty-fifty mix of wood waste and coal. Neufeld says the developers are now talking about burning 100 percent biomass.

The new plans for Princeton are a reminder of the coal-power industry's stake in IGCC technology. If it doesn't find a means of reducing coal's greenhouse-gas emissions, coal power may eventually be legislated out of existence.

The San Jose Mercury has an article pondering the question "Will green tech become the valley's new bubble ?".

Silicon Valley's shift toward green technology is in high gear. Will it create the same kind of bubble, bust and lasting change as the Internet itself? Are we going to party like it's 1999? Will we hear venture capitalists like John Doerr describe ``green tech'' the way they did the Internet boom in the 1990s as the ``largest legal creation of wealth in human history''?

I don't think we're in danger of going over the edge into a bust just yet. It's so early, and the bubble warning signs just aren't there. For instance, we don't have any 50-person green tech start-ups valued at $10 billion yet.

But the velocity of news about clean tech is certainly accelerating. Clean coal is going to get a boost with the proposed $45 billion buyout of Texas utility TXU, funded in part by San Francisco's Texas Pacific Group. BP is investing $500 million in a consortium led by the Lawrence Berkeley National Laboratory that is exploring alternative energy sources. There's a conference every week. Today, for instance, Energy Crossroads 2007 starts at Stanford University.

Investments in clean start-ups climbed to $1.3 billion worldwide in 2006, more than double the $664 million in 2005 and far above the $416 million in 2001, according to a report this week by Dow Jones VentureOne and Ernst & Young. That's 4 percent of all venture funding, up from earlier years.

(The surveyors define clean tech as companies that enable the efficient use of natural resources and reduce the ecological impact of production.)

Does this green-tech boom mean the valley's freeways will clog with smoke-laden traffic jams, just as we saw in the heyday of the Internet boom? (Although this time we may be driving hybrids or Teslas with electric motors.) Perhaps, especially if you think of all the jobs $3 billion in venture funding for clean tech in the United States -- so far -- can create, with much of that coming here.

Other fields could certainly overtake green tech, such as nanotechnology or biotech, as the hot industry. But John Denniston, a partner with Doerr at Kleiner Perkins Caufield & Byers, says green tech has enormous scope because it is driven by stopping climate change, achieving energy independence and restoring American competitiveness. The valley is attacking the problem on multiple fronts, from better batteries to cheaper ethanol. These are real problems that need real solutions, in contrast to such over-hyped problems during the tech bubble as the need to buy pet food online.

Green tech's potential market is huge. Even if solar companies continue to grow like crazy, solar still won't meet more than 10 percent of our energy needs by 2030, according to a November report by the President's Council of Advisors on Science and Technology, a group co-chaired by venture capitalist Floyd Kvamme. In the next 25 years, electricity demand in the United States is expected to increase 50 percent. We used 139 billion gallons of gasoline last year, and that is expected to increase to 153 billion gallons by 2012. ...

Mike Carlton has a column in The Herald on blowhard bloviators in which he discusses ex-ABC TV presenter Maxine McKew taking on the Rodent in this year's federal election. It will be amusing if she beats him though it would have been more amusing if Andrew Wilkie had beaten him last time round (Wilkie was an ONA - the PM department's intelligence agency - guy who resigned over the shameful pre-war Iraq intelligence cook up and ran against his old boss for the Greens).

Bloviate is a splendid word from America. According to the Merriam-Webster online dictionary, to bloviate is "to speak or write verbosely and windily". The Oxford English Dictionary, which has only recently picked up the word from across the Atlantic, says it's "to talk at length in an empty and inflated way". So far as I can check, the Macquarie Dictionary hasn't got hold of it yet but it should, and quickly.

Here's why. A columnist for The New York Times, the admirable Frank Rich, deliciously employs bloviate to scorn the right-wing punditocracy in the US, not least the bloodthirsty crazies who infest Rupert Murdoch's odious Fox News TV network. We have more than a glut of that ilk in this country, too, so I've happily borrowed from him.

Our bloviators have been in hysterics all week at the news that Maxine McKew, the former ABC journalist turned ALP adviser, plans to run for Labor against the Prime Minister in Bennelong. This, they warn darkly, is yet more proof that the ABC is a nest of Howard-hating pinko subversives.

"There has always been a left-wing Labor annexe inside the ABC and this only vindicates public concerns about its reputation," squeaked the NSW Liberal senator Connie Fierravanti-Wells, the self-important, self-appointed ABC watchdog. "How many more Labor candidates are there lurking in the wings?"

Chris Berg, a research fellow at the Institute of Public Affairs (whatever that might mean) fulminated in The Australian that "this cannot help but reflect poorly on the ABC. One moment McKew is an impartial, objective journalist with no political interest except the truth, and the next moment she is a hungry political campaigner, determined to unseat the head of the Government."

In Melbourne's Herald Sun, the village idiot, Andrew Bolt, proclaimed: "McKew's signing confirms not just a close relationship between Labor and the media, but a claustrophobic one between Labor and the ABC."

And Tony Abbott, lunging yet again to the defence of his leader, bloviated that McKew was "Madam Blow-In. I'm not sure that the journalistic mind-set is necessarily conducive to becoming a good politician."

Deary me. There is the acrid whiff of conservative panic in the air, but McKew should not be complacent. The famous election expert Malcom Mackerras predicted on Thursday that "Bennelong electors will kick Howard out at the October-November general election". Mackerras, you might remember, also forecast that John Kerry would win the White House from George Bush. That should have them breathing more easily at Kirribilli.

THE Mad Monk's plodding abstraction about journalists failing in politics comes oddly from a politician who once grubbed a living as a minor editorial hack at The Australian and The Bulletin. The ghosts of prime ministers Alfred Deakin and John Curtin, and the former Liberal minister and later governor-general, Sir Paul Hasluck, journalists all, would not be amused.

It will also have been a bitter blow to poor Prue Goward, another former ABC journalist, friend of the Prime Minister and Liberal hopeful for the state seat of Goulburn. Goward's candidacy, of course, also reflects badly on the ABC, clear evidence - on the tortured logic above, anyway - that your national broadcaster nurtures a conservative conspiracy in its bosom.

Never let it be said, though, that the Howard Government loathes all journalists. Its preferred scribblers - almost all of them from the News Ltd and Quadrant magazine axis - have done very nicely with seat-warming jobs for the boys and girls over the years.

A short list includes Goward's husband and Howard's biographer, David Barnett, appointed to the board of the National Museum of Australia in Canberra, along with Christopher Pearson, a columnist for The Australian. Pearson is also a board member at SBS and has a nice little earner as a taxpayer-funded speechwriter for Lord Downer, a colourful sideline he has not bothered to disclose to his small clump of readers.

Janet Albrechtsen, another right-wing bloviator at The Australian, was injected like botox into the ABC boardroom along with the punchy historian Keith Windschuttle, who claims to have been a journalist. Albrechtsen's like-leaning Murdoch colleague, Imre Salusinszky, chairs the Literature Board of The Australia Council. Miranda Devine, a Fairfax columnist, somehow landed on a committee inquiring into literacy teaching and, last but not least, the editor of Quadrant, the less than omniscient P.P. McGuinness, was bizarrely appointed to vet and veto funding grants doled out by the Australian Research Council. Curiously, there has been nothing yet for Piers Akerman, Bloviator-In-Chief at The Daily Telegraph, although he is always a welcome guest at the Prime Minister's drinkies.

All very chummy. But - call me old fashioned - I don't think working journalists should take even one lousy cent from government paymasters.

The Age has a report that David Hicks' Marine Corps lawyer may be in trouble for allegedly criticising his Dear Leader and a senior administration official.

MAJOR Michael Mori, the defence lawyer for terror suspect David Hicks, could be removed from the case after threats from the chief US prosecutor to charge him under the Uniform Code of Military Justice. The intervention may derail Hicks' trial and possibly prompt his return to Australia. It would take months for a new lawyer to get to grips with the case and the new military commission process.

Prime Minister John Howard has told Washington that any action leading to further delays would be unacceptable and would prompt him to demand the return of Hicks, 31, after being held for five years at the US base at Guantanamo Bay.

Colonel Morris Davis has accused Major Mori of breaching article 88 of the US military code, which relates to using contemptuous language towards the President, Vice-President or Secretary of Defence. Penalties for breaching the code include jail and the loss of employment and entitlements.

Major Mori denied he had done anything improper, but said the accusations left him with an inherent conflict of interest. "It can't help but raise an issue of whether any further representation of David and his wellbeing could be tainted by a concern for my own legal wellbeing," Major Mori told The Age. "David Hicks needs counsel who is not tainted by these allegations."

Major Mori, who has been to Australia seven times, will seek legal advice. The issue will also have to be raised with Hicks when his legal team next sees him. The Federal Government has highlighted Major Mori's work as proof of the fairness of the much-criticised US military commission system. ...

Hicks' lead defence counsel, Joshua Dratel, a New York attorney, said Colonel Davis' threats were the latest example of the "corrupt" system that will try Hicks. Mr Dratel pointed to the former senior Pentagon official in charge of detainee affairs, Cully Stimson, who resigned last month after urging businesses not to hire law firms that had worked for Guantanamo prisoners.

US prosecutors are under intense pressure to offer Hicks, a former kangaroo skinner and father of two, a plea bargain deal by the end of the month. Senior Australian Government members want Hicks to come home a free man, provided he agrees to a pre-trial plea of guilty.

Amid rising public anger in Australia about Hicks' long wait for justice and alleged mistreatment, any Hicks trial risks becoming a public relations disaster. He is to be the first person to appear before a military commission.

The world's media will be focused on the case, including al-Jazeera and other Middle Eastern outlets. They will hear graphic testimony of abuses and torture by US guards and interrogators. It will involve a man, Hicks, whose alleged offence pales alongside the serious accusations made against alleged senior al-Qaeda leaders at Guantanamo Bay.

Prosecutors have dropped three charges against Hicks — attempted murder, aiding the enemy and conspiracy to commit war crimes. There is now only the lesser charge of providing material support to a terrorist group. That charge did not exist for non-US citizens when Hicks was arrested.

The SMH has a report about Australian police and intelligence agencies constructing online honey pots for wannabee jihadis. This game seems to be an old one - it reminded me of the episodes in "Reilly: Ace of Spies" where Felix Dzerzhinsky created a group to oppose the new communist government in Russia as a lure for all enemies of the state - which turned out to be a very successful tactic, and one that I suspect has been rerun by quite a few governments over the years. Another similar tactic (more relevant for online stings) is the old "honeypot" technique used to study hackers. Of course, you could ask if setting up propaganda sites for extremists may actually create extremists where none would have otherwise existed...

THE Australian Federal Police, assisted by the military's signals intelligence arm, is setting up bogus jihadist websites to track extremists who use cyberspace to recruit followers and plan attacks. The undercover operation, disclosed yesterday by the federal police commissioner, Mick Keelty, is an assault by security agencies on arguably the most powerful weapon of the global jihadist movement, the internet.

Mr Keelty said police were working closely with foreign governments, as well as the Defence Signals Directorate. "We have actually worked with some foreign countries through our undercover program, establishing our own websites, if you like, to capture some of the activities that are going on on the internet," he told a security conference in Sydney.

The program employs methods similar to those used to track child pornography and financial fraud. The reason for setting up hoax jihadist websites is to trace people who contact them, and then work back to see who those people are in contact with. The hope is that software will identify patterns of communication between extremists, and uncover networks of terrorists.

The international dimension to the program was vital because most jihadist websites were located overseas, Mr Keelty said. "The internet does pose a problem," he said. "It has for some time. It's been actually quite an education these past five or six years to see how quickly terrorists have adopted new technologies."

Mr Keelty said a team of security agents was "walking the beat" on the internet around the clock, in conjunction with US and British authorities.

Cyberspace is awash with extremist websites, blogs and chat rooms. Some raise funds, others post recipes for explosives, the latest extremist theological tract or sophisticated propaganda aimed at attracting recruits and demoralising the West. One terrorist expert observed yesterday: "There is now a terrorist training camp in everyone's living room."

Violent extremists use the internet to plan, command and control terrorist acts. "Not only can you communicate very quickly, you can communicate very effectively and you can communicate without anybody knowing," Mr Keelty said.

I'll close with a quote from Bucky Fuller (no tinfoil required after the previous item):

"We have also noted how the power structures successively dominant over human affairs had for aeons successfully imposed a "specialization" upon the intellectually bright and physically talented members of society as a means of keeping them academically and professionally devided- ergo, "conquered," powerless. The seperate individuals' special, expert glimpses of the seperate, invisible reality increments became so infinitesimally fractioned and narrow that they gave no hint of the significant part their work played in the omni-integrating evolutionary front of total knowledge and its power-structure exploitablity in contradistinction to its omni-humanity-advantaging potentials. Thus the few became uselessly overadvantaged instead of the many becoming regeneratively ever more universally advantaged.

Hyper specialization also prevented popular comprehension of what the ongoing world power structure was doing- ergo, hyperspecialization kept society preoccupied in ways nondetrimental to the power structure's interests and practically dependant upon the power structure's media for information."