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| 2007/4/9-12 [Science/GlobalWarming] UID:46243 Activity:high |
4/9 The EIA (Energy Information Agency) apparently makes oil production
predictions by feeding crack and magic mushrooms to monkeys and
letting them write up reports in a fairy kingdom. Their report for
the future predicts Saudi Arabia producing 17.1 mb/day in 2030 (their
production has dropped 7% in the last year they are cutting shipments
to their
asian customers), Mexico going to 5 mb/day in 2030 (the oil field that
supplies 60% of their production, Cantarell, is crashing hard) and
HA HA HA, this part is really funny, the United States is going to
INCREASE oil production even though oil production has gone down
steadily since 1970, except for a brief blip up in 1986 as we developed
the supergiant Prudhoe Bay in Alaska. See the link to the PDF in:
http://www.kunstler.com/mags_diary20.html
What's scary is that the government makes policy decisions based on the
"research" done by these wankers.
\- they arent making decision "based on the research" ...
the decisions are based on self-interest, ideology
or other factors. the "research" is chaff. [which
is not to say i agree with your reading of the
"facts". i'm just pointing out you have things
backwards, just like Randriods arent interested
in philosophy ... they cleave to the philosophy that
says what they want a philosophy to say.]
\_ Scary but not surprising. It'll be interesting to see if further
oil finds and advances in technology keep us ahead of the curve.
Also, it may be that by 2030, oil/gasoline has gone up enough in
price that using some alternative becomes a seriously viable event
for transport and heating. And lastly, when Middle Eastern oil is
finally tapped out or the world has moved away from oil, I'd like
to be around to see how much 'concern' the rest of the world has
for Middle East events. We live in interesting times.
\_ The concern of the rest of the world will move to whichever
region that can export clean water.
\_ Desalination is a 'solved' problem. It's just a hell of a lot
cheaper to drain aquafurs, rivers, and lakes.
\_ Same for electricity from solar panels and wind mills.
\_ Not entirely. The ocean is there 24x7x365. The sun's
rays and sufficient wind are not. Solar/wind are
expensive yes but not reliable.
\_ further oil finds? Oil discoveries in the lower 48 peaked in the
1930s, and production peaked in 1970. You have to find the oil
before you can produce it. Similarly, GLOBAL oil finds peaked
in the 1960s. Note that the MSM hails ANY oil find as "massive"
or "huge" these days ... If oil finds peaked in the 1960s, it
makes sense oil production will peak 40-50 years later. Note
that the 1970s oil crisis reduced growth in demand substantially
which bought us another 10 years or so.
\_ further finds meaning being able to pull oil from places that
were previously unreachable such as the gulf of mexico, etc.
that's the "advances in technology" part you ignored. -pp
\_ Explain, with massive advances in oil extraction technology
in the last 35 years, we only produce HALF the oil we did
in 1970 ... The problem isn't that the technology will not
allow us to extract more oil than before (it does), but
that we've already sucked the big oil fields dry.
\_ Refinery capacity has not kept up.
\_ Somehow the imported crude gets refined just fine.
I assume this was a joke response.
\_ You are aware of course that (for example) oil shale
extraction requires a lot of energy, and as energy costs
rise... I'll leave the rest as an exercise for the
reader.
\_ And it's cheap to slap an oil derrick in the ocean or
the middle of the desert and drill down 10,000 feet?
It's done because it's worth it and over time technology
has improved to make it economical to do things that
weren't at one time. Almost zero effort has gone into
oil shale tech (to use your example) so no kidding it is
both expensive and very messy as well right now.
\_ Your brain has been classified as: small.
\_ Wow, you sure put me in my place with that pithy
and brilliant reply. Or not. Care to actually
demonstrate a flaw in anything I said or just
going to spew "you are an idiot!" motd-style?
\_ Well, you are an idiot. Yes, it is enormously
cheaper to produce substances usable for
combustion when you start with a flammable
liquid than when you start with a rock. -tom
\_ Are you even vaguely aware of the concept of
an "input to production?"
\_ Billions of dollars have been invested in
this area over the last few decades, all ending in
failure. The problem is that every non-conventional
"solution" to our energy needs can't scale up or
has horrific environmental implications.
\_ World oil production has been FLAT for 2 years now, we're already
"behind the curve" -- the third world is being priced out
from the market.
\- crowding out/substitution happens per use/per transaction
not per country for the most part. same for interest rates.
\_ Uh what? Poor Africans can't afford oil at $65/barrel
\_ Poor Africans can't afford food. If oil was free they
couldn't afford the barrel to store it. So what about
poor Africans?
\_ Ok, rephrase poor (relative to us, but not to
the average African) Africans are being priced out
of the market.
\- sigh. i doubt this will do any good but the
here is a little bit of what is wrong with the
"poor african" analysis above: it'ss one thing
to look at price-elasticity of something like
coca cola or other CONSUMPTION goods ...
say the price of coke goes up because of
the price of sugar going up or the strength of
your currency going down. then you will
substitute for things that give you more
utility. but oil is a FACTOR OF PRODUCTION
so the substitution effects are not from
demand elasticity but returns to capital.
as oil prices go up this may affect how much
kerosene poor people use to light their
homes at night, but for oil as an investment
the the crowding out looks more like the
kinds of crowding out that happens as interest
rates go up [a plant expasion that might make
sense when money costs 6% may not make sense
when money costs 10%]. btw, the reason the
divisibility matters is the dynamics of
indivisible goods [like tractors] is different
[and you can hope there are solutions like
cooperative ownership, rental markets etc].
BTW, there are a number of first world
assumptions [like shape of labor supply curve]
that dont carry over from 1st world to developing
economies [which is partly why the field of
development econ exists], so you should be a
little reticent about generalizing econ 100a/b
to the whole world.
LESSON: investment != consumption
\- poor americans can no longer afford tuna:
\- Poor Americans can no longer afford tuna:
link:tinyurl.com/2qxg44
\_ I didn't bother to read this economic
analysis, but I base my conclusions on the
observations that many African (and other
third world nations) are reverting to a
pre-oil economy, with ox carts replacing
combustion engine vehicles, etc. They
simply cannot afford oil at over $60/barrel.
\- what african country are you in making
your "observations" and how long have
you been there [for your "longitudinal
analysis"].
\_ Zimbabwe, Ghana for starters
\_ You are in Zimbabwe?
Are you Mugabe's IT consultant? |
| 7/9 |
|
| www.kunstler.com/mags_diary20.html Clusterfuck Nation Archives April 9, 2007 Spring Break Last week, I was in Illinois walking the majestic Beaux Arts-vintage main quad of the State U in Champaign-Urbana. The flowering trees were in full bloom, the grass was green and speckled with dandelions, and the leaves on the privet hedges were unfurling. Then I came home to upstate New York where everything is brown, gray, and dead-looking, and humps of snow still remain on the north side of every building. I called the heating oil man to get 100 gallons because our tank was close to running on fumes and the daily high temperature lingered in the 30s. This is the flip side of the abnormally warm early winter we had. The jet stream, for whatever reason, has pulled a flag of frigid air over the northeast US, the region which proportionately uses the most oil for home heating, as opposed to natural gas. The weather forecast says they see frigid days and nights as far ahead as they dare to look. Gasoline use typically shoots up around this time of year as spring breakers hit the road. Meanwhile, US Department of Energy's EIA reports that US refinery inputs are115,000-barrels-a-day short of their 15-million-barrel-a-day "threshold" (which I take to mean their required capacity to keep things humming), while imported gasoline supplies (we get some of that, too) also fell short. consequently, as gasoline demand began to grow in earnest in April, gasoline supply has failed to keep pace, resulting in continued significant stock declines and sharp upward pressure on gasoline prices in recent weeks." The EIA has to be more reality-based about current activity than their future projections, because the current import-export and refinery figures are out there for other people and other data-gathering organizations to see. They are based on the fantasy that everything will be okay despite what we see happening now. The EIA projects that all the world's oil producers will increase their oil production hugely by 2030. They see Mexico shooting way up, despite the announcement last year by Pemex that the Cantarell field (60 percent of Mexico's total production) is crashing at a minimum rate of 15 percent a year. They see Russia zooming way up, despite the fact that Russia is probably past the 70 percent mark of its original total reserves. EIA chart, you'll see practically everybody's production shooting way up in the decades ahead, even the US, which, in reality, has seen nothing but steady annual decline for more than thirty years (we produce half now of what we did in 1970). The EIA is a perfect reflection of the public it serves. It appears to conduct daily business in a responsible way while it resolutely refuses to face the obvious realities of the future. My own town is a good example of non-reality-based planning. Our mayor announced last week that we are going to construct a 1500-space parking structure to go along with an expansion of our minor-league convention center, all based on money raised through bonds. The last thing this town will see in the years ahead is an increase in motor-oriented tourism. And the last thing that business organizations will spend their money on in a future of energy scarcity and diminished revenues will be trade shows. The price of gasoline seems to be the only signal that the American public receives on its collective walkie-talkie. It looks to me as though gasoline prices will head close to the $4-a-gallon range in some parts of the country this summer. When that happens, the US government, as represented by the DOE's reporting agency (EIA) will not have a coherent story for the public. I imagine as this occurs, the new Democratic-controlled congress will call for hearings to investigate US oil companies. They'll haul in the executives from Exxon-Mobil and the rest of the bunch and threaten them with a punishing windfall profits tax. I wonder if the oil company chieftains will tell the politicians the truth: that peak oil is for real and it's here. April 2, 2007 In the Zone The fiasco in real estate and mortgage lending seems finally to be breaking through the reality shield of the mainstream media. Last week, for example, NPR's nightly Marketplace show actually ran a segment saying that the production homebuilders were choking on unsold houses and that (as if NPR had just discovered this) the mortgage industry was rife with irregularities in lending standards! And that it may actually have repercussions throughout the financial sector and maybe even the economy in general! It's been a long slog for the dullards at NPR, and elsewhere in the mainstream media. Meanwhile, also last week, the General Accounting Office came out with a report last week that acknowledges some problems ahead on the world energy scene -- oil in particular -- with possible adverse implications for the US. The poor grinds in the GAO didn't want to stick their necks out too far on that one. Independent researchers studying the global oil situation -- including retired geologists for major oil companies -- have established a pretty firm consensus that we are already in the zone of the global oil production peak -- meaning that whether we are just past, passing now, or passing imminently, the effects are already thundering through the complex systems we depend on to maintain advanced industrial societies. For instance, the crashing of Mexico's Cantarell oil field (60 percent of Mexico's production) means that inside of five years the US will receive no more imports from what has been its third leading source. Being in the zone means that the world's oil exporters in the aggregate will see their exports drop seven to eight percent this year -- because nations like Saudi Arabia, Iran, Venezuela, and even Norway are using more of their own oil and have less to send out. Being in the zone means that new pricing arrangements will be made, taking the power away from the spot futures markets in New York and London, and shifting that power to long-term deals made by nationalized producers like Russia and Iran, who may decide to embargo consuming nations who don't dance to their tune. Being in the zone means that people in poorer nations will starve because so much of the corn grown in North America will go to ethanol distilleries instead of the dirt-floor kitchens in the Third World. The more interesting point in all this, for the moment, is that the media has still not put together the collapse of the housing bubble and the permanent oil crisis. The housing industry, so-called, will never recover because the oil crisis spells the end of the suburban build out. The big production homebuilders will go down and never come back. We won't be building anymore WalMarts and Target stores, and the thousands now running will die off just as the giant Baluchitherium of the Asian steppes crapped out in the early Miocene epoch. The end of the suburban build-out will be a stupendous trauma for the United States because, unfortunately, we have made it the basis of our economy for a generation, as well as our living arrangement. Not only will incomes and livelihoods be lost on the grand scale, and never come back, but, as the global oil predicament deepens, the existing fabric of our vast suburbs will become increasingly useless and worthless. The people stuck in them will lose whatever wealth they have accumulated and our arrangements for daily life will become increasingly nightmarish. This is the part of the story that the mainstream media still can't put together. Peak oil and the housing bust are a mutually-reinforcing clusterfuck. March 26, 2007 Zowie For all of you out there disposed to twang on me for riding a jet airplane all the way to Maui, please consider that United flight 35 would have flown from San Francisco to Maui with or without me on it. Here's the deal: I had to go to San Fran to give a talk at the Commonwealth Club. I stayed three extra days and nights -- since I'd come all that way. Now, to the business at hand, which is my impressions of Maui. Beautiful as much of it may be, it is hard not to view it through a tragic lens. Most of the damage on Maui has been inflicted over the past ... |