EIA Update, March Production Numbers

144 thoughts to “EIA Update, March Production Numbers”

1. There seems to be an error in your link here “Stewart Stanford has a great article on OilPrice.com:”
   The article I think you mean to link to Oil Production Numbers Keep Going Down is by Dave Summers not Stewart Stanford. The correct link is http://oilprice.com/Energy/Energy-General/Oil-Production-Numbers-Keep-Going-Down.html

   I am fairly sure that Stuart Staniford and Dave Summers are not the same person given the bio below –

   David (Dave) Summers is a Curators’ Professor Emeritus of Mining Engineering at Missouri University of Science and Technology (he retired in 2010). He directed the Rock Mechanics and Explosives Research Center at MO S&T off and on from 1976 to 2008, leading research teams that developed new mining and extraction technologies, mainly developing the use of high-pressure waterjets into a broad range of industrial uses. While one of the founders of The Oil Drum, back in 2005, he now also writes separately at Bit Tooth Energy.

   1. Sorry Jeju, I just got them crossed in my mind as I went from reading the article to posting it. The correction has been made. Apologies to Dave Summers. The link however was correct. There was no need to post “the correct link”. I guess we all make mistakes from time to time. 😉

2. Ron stated “I know I sound like a broken record but I just want to drive the point home that when the USA peaks, again, the World peaks. World C+C production less USA production is down 1,660 kb/d since peaking in January 2011 and nearing that point again in February 2012.”

   That is a very important point concerning oil production, either fracking production needs to be developed elsewhere in the world or the peak of C+C will occur soon. It will still occur, but delay of the peak or slowdown of the descent can happen if other shale regions are not rapidly developed around the world.

   NGL and other liquids appear to still be on the rise worldwide, comprising 12 million barrels per day. Since some of them can be converted to petroleum products and substitute for them, the peak times could be extended a few more years.

   Advances in the chemistry and technology of liquid fuel conversion will be a determining factor in the effects of peak oil. However, it may not change the end results, merely delay them. We are still looking at constrained and limited sources.

   1. Natural Gas Liquids production came to, in March, 9,522,000 barrels per day. That has grown considerably in the last few years but the lions share of that growth has been in the USA.

      Other Liquids, that is palm oil, ethanol and other biofuels came to 2,354,000 barrels per day in March. Biofuels are the things that are destroying the earth. The Orangutan will become extinct within the next few years because its habitat is being destroyed to make way for palm oil plantations. The growth in “Other Liquids” is mostly outside the USA.

      But neither will save us. Crude+NGLs will peak at very close to the same time, with NGLs peaking only a year or two after Crude.

      Fracking is unlikely to catch on in other areas of the world because it is so expensive. I have seen reports that claimed it would take $200 a barrel oil to make fracking in the remote areas of Sibera economically viable. And in Europe there is strong opposition to fracking. I don’t believe it will ever overcome the political hurdles there.

      

      1. Ron, your mention of biofuels destroying the world rings true. Actually, fossil fuels have a big head start on that one. Personally, I wish we would all go back to a biologically/natural based life style. That can’t happen until there is a complete societal turnover. The limitations of food, fuel and resources combined with GW effects will provide the mechanism for societal turnover. What results is unknown.
         Let’s hope there are some complex life-forms left to work forward.

         The palm oil fuel system is being driven by Euro law. Apparently palm oil is considered a renewable and does not count as carbon use. What hokum. It should be called snake oil.

         1. “What results is unknown.”

            In the details perhaps, but the broad result of such a turnover would be devastating. Fossil fuels drove the population to what it is today, so logically, a transition away from fossil fuels would reduce the population by a similar amount. A lower (much lower) human population, IMO, would be a boon in the long run (it will happen regardless of what we try to do about energy), but the transition will likely completely destroy civilization as it is currently understood. Regardless of any individual view of the value of modern industrial civilization, its dismantling will affect all people, and will likely play out as a perfect analog for hell on earth.

            Those responsible for the AGW component of this ‘transition’ know full well that there hasn’t been any warming for over a decade, and that human industry (and cow farts) have little to no impact on climate~ but the entire purpose of the AGW scare is to deal with peak energy, not to contribute to science. There are no ‘GW effects’, unless media headlines can somehow become reality by some kind of magic. If the AGW pr plan were to succeed, the result for humanity would be some sort of collectivist neo-feudalism~ of the sort that the USSR enjoyed following the Bolshevik revolution. The fact that the AGW campaign exists at all, and is being driven to increasingly desperate lengths to be convincing is very telling as to the reality of peak energy. What is interesting to me, is that ‘peak oil’ and ‘climate change(AGW)’ are linked ideas~ generally, either someone agrees that peak oil is true, and so is AGW, or they think that both are frauds. In truth, the most parsimonious explanation is that peak oil is a reality, and AGW is a falsehood being employed as a mitigation strategy by those who wish to stay at the top during the inevitable collapse of industrial civilization.

            1. AGW is a falsehood being employed as a mitigation strategy by those who wish to stay at the top during the inevitable collapse of industrial civilization.

               A truly absurd explanation. The people who are telling us about AGW are mostly scientists, not politicians. They mostly academics and are not on top of anything. But your average run of the mill conspiracy theorist can use twisted logic to prove anything he desires to prove.

               1. Politicians work for the banksters who are constantly pushing for a carbon tax to save the world from alleged AGW. Up to 50% of scientists don’t buy into the falsehoods of global warming:

                  http://www.americanthinker.com/2014/07/climate_change_hysteria_and_the_madness_of_crowds.html

               2. “Ten years of thinking” ~ American Thinker

                  Is that all?

                  Well there are many other effects that we, as a species, are having on the planet, so if AGW doesn’t suit (the limits of) your thinking, then maybe looking at the other effects might.
                  And in doing so, you may well end up back to AGW, not that you’d necessarily want to.

   2. Hydrocarbon synthesis from NGLs. Ha… Look at the cancelation of Shell’s GTL in Louisiana. Capital intensive. Better burn them directly than try to make diesel from them

      1. How the heck did I miss the cancellation news? Another “alternative” bites the dust.

         1. Shell Cancels US Gas-To-Liquids Plant As Costs Rise

            NEW YORK, Dec 5 (Reuters) – Royal Dutch Shell said on Thursday it has canceled a proposed gas-to-liquids (GTL) plant in Louisiana less than two years after the plan surfaced as costs rose and the company reins in spending. The project, which would have converted natural gas to diesel, jet fuel and other refined products, was expected to cost more than $20 billion, a Shell spokeswoman said, up from the minimum $12.5 billion price tag estimated in September.

            And then we have this:

            What Does Shell’s Decision to Cancel GTL Plant Say about US Shale Gas Boom?

            (All the below is from the article.)

            Shell did actually say a little more about why it is abandoning the project in this almost inscrutable piece of corporate prose:

            Despite the ample supplies of natural gas in the area, the company has taken the decision that GTL is not a viable option for Shell in North America, at this time, due to the likely development cost of such a project, uncertainties on long-term oil and gas prices and differentials, and Shell’s strict capital discipline.

            Now, here’s the same paragraph translated into simple English:

            The plant is going to cost a lot more to build than we thought it would. Natural gas prices are going up and could easily make it uneconomical to produce diesel and jet fuel from natural gas when compared to making them from oil. And, we don’t have unlimited funds to spend on everything we think of just to see if it works.

            1. Extra tidbit for you Ron.

               Euro oil companies pay big dividend yields immediately, but are quite slow raising them. In contrast, Exxon and Chevron pay lower yields immediately but have a history of dividend raises.

               So Shell is hyper sensitive to money outflow TODAY vs later.

               1. Is it really possible to make diesel and jet fuel from natural gas?

               2. Yes it is

                  http://www.velocys.com/

            2. Superb translation.

               I don’t think it was the capital costs that buffaloed them though. In my opinion they changed their mind about the availability of gas in enormous quantities at a big discount to oil.

               The gas boom is going to fizzle in my estimation.Prices are already double what they were when the cornucopians were crowing about cheap gas out our yazoos for a century.

               As our old friend Rockman has often said- that gas is out there but only at a much higher price that at present.

               And even if it could be gotten out of the ground at a cheap price the people who own it are determined to export it and get the world price which happens to be roughly two to three times the domestic price.

               Furthermore while I do not have much respect for the mores of top level corporate management at any company I can think of it does seem likely that the management at Shell is exceedingly well informed considering that oil and gas is their business.

               Furthermore we can take it as a given that the executives at Shell have a whole bunch of exceedingly smart young guys doing research for them on any number of emerging technologies two of which would be compressed or liquiefied natural gas for use as mobile motor fuel and electric and or fuel cell powered vehicles.

               I foresee the price of gas on the basis of energy content rising a good way toward the price of oil pretty soon.It is a cinch that the only thing really holding up the conversion of millions of commercial trucks from diesel to natural gas as fuel is a belief on the part of the trucking industry that gas will not stay cheap.

               There need not be a whole lot of truck stops selling cng to truckers for the conversion boom to get started because dual fueling trucks is a cinch. Just one or two truck stops with cng in any major city would be enough to get the ball rolling locally since so many trucks can fill up at home base nightly anyway.

         2. GTL will never be viable in the US. GTL requires very very low gas prices that can be fixed over a very long period of time. It works great in Qatar with otherwise-stranded gas reserves that they can upgrade from a cost of $0.50/MMBTU. with GTL, the input cost per barrel of fuel is about 10-1/MMBTU, meaning $4.25/MMBTU natgas = $42.50/BBL fuel, BEFORE OPEX and CAPEX. At or under $3/MMBTU, it can work. But since Mr. Berman has taught us that dry unconventional gas needs to cost $6-8/MMBTU to pencil upstream…. that’s a dubious prospect to hang a multi-billion-dollar capital investment on.

            It has little to do with the viability of XTL (GTL, CTL, BTL, or CBTL) which are well demonstrated, and everything to do with the perceived long-term trajectory of US natgas prices.

            1. Natgas can be used directly in a number of applications that directly or indirectly substitute for oil so conversion may not make a lot of sense in the US. CTL on the other hand can’t be used as easily as a substitute for oil so may be a better candidate for conversion. In the US, the price difference between oil and natgas and coal will be somewhat dependent on the value of the dollar.

               1. The prospects of the US mitigating with CTL are essentially zero:

                  — Inadequate time horizon (takes too long to build enough plant capacity versus what time we have).

                  — Enormous environmental & NIMBY opposition mean even more delays, if ever.

                  — Would require massive new power plant builds.

               2. Desperate times call for desperate measures.

               3. “Mitigation” is a BIG “maybe”. The boat sailed long ago on preserving “business as usual”.

                  We don’t have enough skilled welders to build these plants fast enough to counteract a simultaneous peak in Russia and Saudi.

                  As long as the tractors keep working in the fields, and the groceries keep showing up a the grocery store, so that 50 years from now my daughter can spend her time doing something other than subsistence farming, then we can consider it a victory.

               4. Barring miracles there is no way biofuels are ever going to support business as usual.

                  But so long as the industrial infrastructure that manufactures trucks and tractors is up and running we can run our farms on biofuels plus run enough trucks to get the food to market.

                  ( We don’t need a whole lot of trucks and tractors compared to the size of the auto industry. Just one large car plant converted to manufacturing tractors would be enough to supply the entire country so I do not anticipate that heavy duty trucks and farm machinery will become unavailable barring mismanagement.)

                  Nobody really knows just how much farming across the board with biofuels would cost but it will definitely cause some substantial real (as opposed to nominal) increases in the wholesale price of food.

                  But depending on what sort of food and where it is grown and where it is shipped to it probably won’t affect retail food prices enough to put those of us with jobs in the poor house.

                  This is because the wholesale price of food is usually only a minor fraction of the retail price.Bread at three or four dollars a loaf has only a few cents worth of flour in it.

                  Doubling the delivered price of wheat to market would only add a quarter or less to a three dollar loaf.

                  But we will have to drop down the food chain a bit when it comes to beef and to a lesser extent pork. The biggest part of the cost of these meats at the wholesale level is feed costs and the wholesale prices of meat will necessarily go up quite a bit, maybe as much as two or three times.That would have a serious impact on the price of hamburger and pork chops.

                  Poultry would not go up nearly so much because chickens and turkeys are far more efficient converters of feed into marketable meat.

                  Peak oil does not mean going hungry in a rich country unless the powers that be mismanage the situation badly.

                  Now in a poor country such as Egypt that imports food and where most people are already spending a huge fraction of their income on food the situation is too sad to contemplate without going sleepless.

                  People who are living mainly on bread and other grain based foods and already cooking at home can’t cut back to less expensive food.There just isn’t anything less expensive to be had.

                  And the grain surplus that plagued farmers for most of my life has been history for a long time now.There is not a snowballs chance on a red hot stove that there will ever be a big grain carryover again-one big enough to support the world a year or two.

                  And someday the way we grow corn,wheat, rice and soybeans mono culturally is going to result in a disastrous loss of a crop perhaps right across a whole continent.

                  A viral blight could even jump an ocean very easily these days given the number of travelers. When there is a disease outbreak modern farmers go on a quarantine like routine to the extent possible in the same fashion as public health professionals. All it takes to carry and infection from one farm to another is one muddy boot. All it takes to transport a horrible new pestiferous bug across an ocean and a continent is one pallet of almost any sort of goods that escapes examination. And of course only a small percentage of the pallet loads are inspected.

                  Bugs arrive in the pallets themselves which is the most likely route for the last couple of new invasive tree killers to have arrived.

                  Given a long enough time frame this sort of disaster is not a question of if but rather of when.

                  The odds of our losing most of a major staple crop some given year are not easily calculated and getting an opinion on the record out of professionals in the field of agronomy is not easy.

                  But I speak to such people informally from time to time and a typical off the record response to an inquiry is that the risk is ” high enough that it is a frequent topic of conversation with my colleagues” or something to that effect.

                  Declassified documents reveal that the Pentagon estimated the risk of nuclear war at around two percent a year during the cold war era.

                  I will hazard a guess that the risk of a catastrophic failure of one or another staple food crop is substantially higher than two percent annually although the risk of losing any GIVEN crop in any given year is probably considerably less- with the exception of bananas.

                  IF you really like ’em you better eat all you want now while they are still cheap.

            2. A moment for Physics.

               At STP methane has 1/1000th the energy per unit volume vs oil. The energy is in the CH bonds. Break them, release energy. Oil has a lot more CH bonds per unit volume than CH4.

               So measured on a volume basis, you gotta flow methane such that enough CH bonds arrive at the end point to look like oil. The big Qatar facility does 140K bpd of petroleum products and 120K bpd of NGLs.

               That’s with essentially the largest nat gas source in the world to draw on, and all they get out is a lousy 140K bpd. (btw it’s very clean bpds, no impurities).

               Anyway, I don’t see how this scales to any significant numbers.

               1. Watcher,

                  The velocys system uses 10,000 cf of gas to make one barrel of oil. The standard energy content of a barrel of crude is around 6,000 cf of gas. The crude of course needs to be refined, where as the GTL is very high quality, zero sulphur, transport fuel.

                  These Velocys systems are small scale and the first ones are just being built, so we will have to see how they work out. As I said they are small scale and will be able to be used in many locations, where as the large scale plants are very limited to huge cheap gas supplies. one of the advantages of the small scale approach is the equipment is mass produced and basically plug and play at the location. Their presentatins have gas priced at $4/mcf, so they are at their margin at current prices if the price of crude falls. We will see how the go.

               2. The small scale approach seems ideal for stranded gas supplies and remote locations that rely on expensive diesel imports.

               3. The problem with XTL tech is not the chemistry. It works quite well as obviated by Secunda, Pearl, Oryx ETC ETC.

                  The problem is capital cost. More explicity, capital cost per daily barrel of capacity.

                  Even if you can cut down on the capex of the FT (the promise of velocys), you still have and ASU, A gasifier or SMR (either solids or gas), syngas cleanup, and product upgrading, plus storage, utilities, water treatment, etc etc.

                  These things dont do “small scale” gracefully, and most of them require some significant adult supervision (read, PHDs or very highly trained operators).

               4. Economies of scale for various CTL plants.

                  (GTL trades a lower CAPEX for a higher feedstock cost, but still has the same general function in its unit economics vs scale)

                  

               5. How this plays out in unit production costs. This is for gasification, but the same trend exists for GTL, just with higher feedstock costs and somewhat lower CAPEX.

                  

               6. So, does your business model rely on subsidies to make it viable?

               7. No. Building a business model on subsidy, especially for this kind of long-lived infrastructure, is a fools errand.

                  Subsidy is the honey-pot trap of the alternative fuel space. It distorts the economics. If you include it in your modeling, the temptation is the scale the plant down to a less-terrifyingly-large scale, limiting absolute CAPEX, but running your unit economics too hot, requiring the subsidy to exist. Then if the subsidy goes away, the business model explodes, and everyone acts all surprised and blames the other guy. No thanks.

                  If someone wants to work in the liquid fuels space, they must become comfortable with capital costs in the $billions, or they are not in the game. Full stop.

               8. I agree on subsidies although if carbon capture and sequestering is part of the income side of the model that could be considered a subsidy. With biomass, the challenge is always plant size versus raw material transportation costs. Stranded hydrocarbons seem like the most likely bet for XTL.

               9. The energy is in the CH bonds. Break them, release energy.

                  I thought the energy was released when each carbon atom, and each hydrogen atom, oxidized, turning the carbon into CO2 or CO and the hydrogen into H2O.

               10. Well, you’re right. Endothermics and Exothermics.

                   You can’t CO bond make if you haven’t CH bond broken. The valence reqmts are already satisfied. I phrased it uber badly. The long chains of C and H in oil is why a barrel of oil has 1000 times more energy content than a barrel of room temp nat gas. There’s just more of it.

                   A barrel of LNG has a lot more CH in it than a barrel of gaseous CH4. But the chains are shorter so there’s less of them. 30% less energy in a barrel of LNG vs oil.

               11. Ooops, LNG is still CH4, not CH. My kingdom for an editor.

3. Given the bashing that Colin Campbell has been receiving by a certain well-known commenter, I would like to post this excerpt from and interview with Colin Campbell that I found most interesting.

   Link

   We’re passing this peak and the decline on the other side of peak is only two or three percent a year; it’s not a cliff. And there’s an argument raging, is the peak last year, next year, 10 years out, whatever it is, and that — you know, Yergin says it’s not coming for a long time and then this undulating plateau and so on and so on. But I think that misses the point. The critical point is not so much the exact date of peak, but the vision of the long decline on the other side of it. So this new technology and this fracking can add a little bit, but nobody would be fracking for oil if there were any remaining alternative easier options. I mean fracking, they drill these wells horizontally, they pump all this fluid into it and they increase a little bit of permeability into the rocks which manages to tap oil. But the life of these wells is a year or two at the most; they’re very expensive. This is something entirely different from the oil that we’ve known in the past. And sure, there is a lot of that oil there, but it’s not going to really change the overall pattern that we have because the overall pattern is dominated by this cheap, easy stuff we’ve known up till now.

   THAT IS THE POINT! The easy stuff, the stuff we can afford to buy, is going away. And the exact date of peak is far less important than the recognition of what follows it. Of course, if you believe the peak is way off in the future or that fracking LTO is going to replace all the conventional oil that is in decline or that other energy sources are going to fill the gap, well, you are welcome to your opinion. But the evidence, including Ron’s excellent graphs, tell me a different story.

   1. Hi Ron ,

      I generally agree with you and I agree that when crude peaks the peak in natural gas liquids will peak soon after.

      I agree that it is going to take a much higher price to make tight oil and gas profitable in most parts of the world too. How much higher I can only guess.Two hundred buck in constant present day money ought to do it in at least some spots.

      I part ways with you when you say FRacking( the FR in caps is to trick the auto spell checker) will NEVER catch on in Europe.If by never you mean for the easily foreseeable future I agree. But when imported oil and gas get to the point that availability at any price is questionable the Europeans will change their minds about both tracking and nuclear power unless my lifetime of informal study of human nature has been a waste of time.

      The utility of liquid fuel is so high that it will almost for sure remain economic to use it for many purposes even at three hundred dollars a barrel (if made from nil’s in a refinery) which would be very roughly the equivalent of two hundred dollar crude given the lower energy content of natural gas liquids and the energy expense of converting them to liquid fuels.

      I have often remarked that I would gladly pay twenty bucks a gallon for diesel rather than farming with draft animals. Ditto running my chainsaw or running a local ambulance or a truck to come out and deliver a load of fertilizer or haul a load of produce to town.

      My grandfather now long deceased of course used to haul a ton of produce to town in his own fathers wagon back around WWI leaving at daylight and getting home after dark in the summer. The horses had to be rested the next day.I can haul that same ton on my pickup using only about two gallons of gasoline and I can haul eight tons on the big truck with four gallons and the actual driving time is well under an hour.

      About the only good comeback I have ever heard from a horse lover is that nobody yet has ever found a new baby truck in the barn some frosty early spring morning.

      Such high oil prices will break the business as usual paradigm as surely as a baseball thru a plate glass window and the cost of oil might stay well below two hundred bucks with a crash in demand.

      But it might not. I cannot see any way to know for sure.I suppose it depends on the future cost of the marginal barrel more than anything else.I think production will decline slower than demand with prices approaching two hundred bucks and that prices will not exceed that level in constant money for a good long while probably for a decade or two at least.

      But after that -say after 2040 or so- demand for critical uses might be strong enough to support prices well north of two hundred bucks.Volkswagen has proven that a two hundred mpg personal car is feasible and people will pay whatever they have must in order to eat or else they must starve.

      Now at prices approaching two hundred dollars it will probably be profitable to manufacture synthetic gasoline and diesel from coal. Any country with enough demand to support a conversion plant and adequate coal reserves faced with uncertain available imported fuel will probably be a candidate for coal to liquids.

      Coal to liquids might put a cap on crude oil prices over the longer term.

      1. RE: Horsepower vs $20 / Gal Diesel:
         This is from an essay I wrote some time ago.

         Most of our progenitors assume that their position in life is a result of their Hard Work…never having made the connection between Cheap Energy and their current lifestyle. It has been calculated that a single drop of crude oil contains about 10,000 calories of energy which would be the equivalent of a single Full day of Very Hard labor, by a well fed and very fit person. Conventional gasoline has the energy potential (negating waste energy) of about 33 KwH.

         1 Hp is generally defined as 750 Electrical Watts (reserve). A manpower depends on the
         strength of the individual. A strong man can produce about 1/4 Hp for a very limited time, but can produce about an 1/8Hp for longer. If he is to extend labor over a full day, with some breaks in-between, a Manpower is generally conceded to be about 1/10 to 1/12 Hp. Our man might be able to provide us with 400 – 500 Watt Hours in a day, depending on his health and energy that day….or less than 1/2 KwH.

         For hard physical labor, he may only earn ~$80.00 (at the time of this writing). Or less.
         The gallon of gasoline provides 66 times as much energy for ~$3.90. Gas is worth more than $5000.00 per gallon in Manpower Wages!

         Even if 75% of that gasolines energy content is wasted, and only a fourth of its energy is
         commandeered for useful work, it still accomplishes more than $1200.00 can effect in Human Labor. Gaspower is worth much more than Asspower regardless of the efficiency of the process.

         I would still love to see a Baby Briggs 7 Stratton one frosty morn’ in my Lawnmower shed that a Newborn Colt!

         HN

         1. Very interesting.

            The following seems not quite right:

            “Conventional gasoline has the energy potential (negating waste energy) of about 33 KwH.”

            Checking Wikepedia it probably should be, “A gallon of conventional gasoline…”

            A very nice piece of work, thanks.

      2. Hi OFM,

         “Coal to liquids might put a cap on crude oil prices over the longer term.”

         A Rand report from 2008 suggests that CTL can be profitable at $80/barrel oil (2008 $),
         even if 90% of CO2 from the CTL process is sequestered. They also claim that with 90% of the CO2 sequestered that the climate effect is no different from standard petroleum liquids.

         I am unsure if the claims or estimates are even close to accurate however.

         http://www.rand.org/pubs/monographs/MG754.html

         Report can be downloaded at link above.

         1. The RAND claims/estimates are accurate/conservative. Depending on scale, they may be far too conservative.

            The carbon footprint is highly dependent on whether CCS is included or not, and whether there is a bio component.

            The real opportunity that many have not caught on to yet is what happens when you displace about 40% of the coal stream with biomass, while doing CCS. Doing so neutralizes the lifecycle carbon footprint entirely. Continuing with the CCS while pushing the biomass past 40% takes you into negative lifecycle emissions territory.

            i.e.: it’s an economically viable route to tackling BOTH cost-effective fuels availability, AND carbon footprint.

            Yes, they are costly to build, but they will produce for 100 years once built if you maintain them well. Beats fracking in North Dakota any day.

            

            1. For the size plant you are proposing, 40% biomass is a lot of material. What are you planning to use in Illinois and how large of a radius do you expect to need to obtain the tonnage? Being on the forestry end of things, I’m curious if wood waste or railed in hog fuel from say Michigan might be part of the bio component.

               1. Being on the professionally trained agricultural end which includes basic forestry I can say with great confidence that we are never going to get even close to forty percent of our current day usage of liquid fuels from biomass.

                  Mother Nature will put up with only so much abuse and we are abusing her past the maximum she can stand already.Most of the data I run across touting biofuels on the grand scale is coming from people who are happy to take the money for making the speech or writing the paper and this includes professors of agriculture.

                  There is no free lunch in agriculture (or in forestry which when practiced commercially is a branch of agriculture as surely as the sun is going to rise tomorrow) no matter who claims otherwise.

                  Things that might conceivably work on a small scale in terms of biofuels just aren’t going to work on the grand scale.We can for example commercially harvest a few thousand acres of wood per year for fuel without disrupting the environment and the market for lumber and pulp very much.We could grow a few thousand acres of switch grass without too many problems involving land use.

                  But when people start talking about tens of millions of acres being converted to biofuel production- they are talking utter nonsense in terms of long term sustainability and economic viability.

                  Down that road lies an economic and environmental disaster of epic proportions.

                  We could produce enough biofuel to run farms and deliver food without too much difficulty but at considerable expense.Running a hundred million cars on biofuels is a pipe dream. People who believe it can be done just don’t know anything about ecology and agriculture. People with professional qualifications in my field who SAY it can be done are just running off at the mouth instead of the anus.

                  The land and water needed to produce biofuels in such quantities simply does not exist without diverting it from existing food and fiber production or converting park and wilderness lands to agriculture.

                  So called marginal lands are called marginal for very good reasons such as topography and lack of rainfall and very poor soils.

                  Nothing- not even switchgrass- is going to grow in large quantity year after year on such land unless massive amounts of fertilizers are applied to it and it happens to be a wet year.

                  All crops remove nutrients from the soil. Nitrogen can be replaced by biological processes but P and K deplete too and even if available in locked up mineral form the process of breaking down rock into soil which makes them accessible to crop plants makes a glacier look like a rocket ship.

                  Lets put it another way. If all that land that is supposed to grow switchgrass in huge quantity year after year would really grow it and it was smooth enough to run farm machinery over it, then it would already be used for grazing cattle and raising hay. As a matter of fact quite a bit of it IS so used. ALREADY.

                  Under certain rather rare conditions a crop can be made year after year and REMOVED from the farm without adding imported nutrients to the soil.

                  The classic case is river land that is periodically flooded , the flood waters bringing down fresh organic matter rich in nutrients.The marginal lands proposed for switchgrass are not periodically flooded flat river lands.

                  Harvesting and drying and hauling such a crop as switch grass is not child’s play. Doing so on a large scale would require an enormous input of energy and effort and capital.

                  Old country folks such as mine say people pushing such things ” are talking sxxt”.

                  We may eventually grow SOME switchgrass but harvesting and hauling it to a power plant would in most cases be cost prohibitive anyway.

                  I wonder how many people who believe in highly flammable dry grass being raised and hauled to a power plant have stopped to consider what happens when such a few thousand acres of tall thick dry grass gets just one little hot cigarette butt or one stroke of lightning into it.Oh- they gonna mow it green and work it like hay?Are there roads into the areas of all this supposedly marginal land that is serving no other purpose except to hold the world together?How much is it going to cost to stockpile this miracle hay for offseason use? IF it rains on it it will rot and if it is put in the dry- well that costs a bit too.

                  The bottom line is this:

                  We are eventually going to run out of affordable fossil fuels. We may be able to switch to nuclear power and to wind and solar power before that happens and thus preserve something approaching life as we know it.

                  Barring miracles biofuels are not going to scale up to the levels envisioned by the biofuel prophets.The ecology of the planet will not accommodate that much additional farming.

                  Now if somebody invents a cheap and easily scaled process to send all the sewage from our cities into a conversion plant at one end and methane and recovered nutrients out via pipeline and bags at the other we just might have a prayer of growing enough biofuels to maintain something approaching life as we know it minus nearly all of the cars.

                  I suppose there is some hope along these lines but the job is one outside the bounds of my profession- an engineers and microbiologists job and I have no idea if it can be accomplished.

                  Personally I am convinced the our species is poised for a great fall.It is not going to be pretty.But peak oil and peak natural gas do not necessarily mean we will starve in a country such as the US or Canada.There is so much coal around yet we can continue life on a basis at least similar to the life we know minus the cars and personal travel etc for centuries.By then we should have learned how to live with renewables.

               2. Nutrient recycling is an issue that seems to get ignored these days. My understanding of evergreens is that the majority of the above ground nutrients are stored in the needles and branches which in the past were left in the woods after harvest. Now the most common harvest method seems to be whole tree with the tops, needles and branches burned on the landing or ground up for hog fuel and removed.

               3. Woody, nutrient cycling is hugely important. The Germans learned this one the hard way back in the bad old days of early sustained yield forestry.

                  Look into a crop called Miscanthus. It does some remarkable things with nutrient cycling in the plant itself, pulling the NPK back down into the rhizome during the winter, with just the dead BTU-containing biomass dried out above ground, harvested once during the winter. Its the only bio-energy crop I have found that I really like. Dr. Steve Long at UIUC has been doing some great work on it. They have test plots that have been yielding well for 10+ years without any fertilizers, herbicides, or pesticides added.

                  I say we use all the waste first, before we even think of going to primary energy crops.

               4. Thanks for the reference to UIUC. The yields they are obtaining are amazing compared to the 2 +/- BDT per acre we can get from forests in the western US.

               5. Yes, it is a lot of material.

                  The biomass source is Municipal garbage. More accurately the biomass fraction thereof (RDF), with the remainder being recycled through european-style zero-waste-to-landfill material recovery facilities.

                  Radius is, very roughly, Chicago, Indianapolis, and St Louis, with many other smaller towns around and in between. Biomass moved post-sorting by rail.

               6. I like your approach to using the waste material. It looks far more efficient than burning it in a biomass power plant.

                  Biomass power plants aren’t that efficient to begin with and then tend to need nat gas to insure an efficient burn with the net result that the plant is little more than a waste incinerator that uses the waste heat to produce some power.

4. This seems a good opportunity, Mr. Patterson, since I am guilty of ranting in the past about the EIA to TRRC disparity in oil production reporting, to now offer what I believe is the full explanation for that lag time. In Texas it is possible to delay the filing of well logs with the TRRC for a period of 2 years under the pretense of “confidentiality.” It is not, however, possible to delay the reporting of oil or condensate production; once liquids are moved off a lease for sale, the volume must be reported to the TRRC and that information becomes public. We are about to report liquids production for May in the next few days. That production reporting use to be done by paper forms but now must be done digitally, on the computer. The EIA has direct access to that information.

   In the good ol’ days Texas operators could move a small amount of test oil off lease, temporarily, as long as it was reported, prior to filing paper completion forms and upon approval of those forms we were given a lease identification number and approval to our designated oil buyer to pick up any volume of oil we could produce. When I first stared operating we were given an oil allowable, or a maximum amount of oil that could be sold from a given lease, but allowables, of course, no longer exist. Now days we can move oil off leases using the drilling permit number we are assigned before the well is drilled, until the completion forms are processed and we are eventually administered actual lease identification numbers. The TRRC is moving towards digital well completion form processing, where that is done by computer also. Operators, however, can still file paper completion forms but when it does, those actual paper forms must be outsourced for scanning to be put into the TRRC databanks before processing can occur. That is taking up to 18-20 months! The TRRC does not officially, formally acknowledge, or report production from a lease until there is a lease identification number associated with it. Thus the 18 plus months of delay. Ironically, an operator has a choice, for how much longer I do not know, to file well completions the old paper way, or digitally. The waiting period for lease ID numbers, if filed digitally, is 3-4 months, max. The delay with paper is that all the forms have to be scanned before going into the database and that is taking a long time. The problem is that Texas is in the middle of trying to modernize an old system, that use to work very well, and there have been problems. Qualified clerical help that can file TRRC forms digitally is about as scarce in Texas as hens teeth at the moment; so lots of operators are still filing the old paper way. Remember, please, Dairy Queens in S. Texas are offering 5000 dollar signing bonuses to people who can make cheeseburgers.

   So, the EIA is actually not guessing production volumes, it is using real numbers provided to the TRRC by operators. I think the 3-5% volume corrections that you may notice over the 18 plus month period between EIA data and TRRC data is simply corrections in the gross barrels versus net barrels (adjusted for BS&W content, gravity, etc.) reported by producers and buyers that must match to the barrel and often get adjusted.

   I hope that makes sense. The important thing to glean from this post is that a.) hydrocarbon production in Texas cannot be held confidential for any period of time and b.) the EIA data that you like to plot with is actually pretty accurate (save minor adjustments) as it comes straight from operators.

   Mike

   1. Mike, thanks a million for the information but there is something I just don’t understand. You said:
      So, the EIA is actually not guessing production volumes, it is using real numbers provided to the TRRC by operators.

      Well I just looked at the EIA’s Petroleum Supply Monthly and here is what they have for Texas, January 2013 through April 2014. They have Texas Crude+Condensate production increasing exactly 48,000 barrels per day for the last eight months.

      	Texas kb/d	
      Jan-13	2,275	Difference in kb/d
      Feb-13	2,346	70
      Mar-13	2,390	44
      Apr-13	2,420	30
      May-13	2,492	72
      Jun-13	2,540	48
      Jul-13	2,577	37
      Aug-13	2,625	48
      Sep-13	2,673	48
      Oct-13	2,721	48
      Nov-13	2,769	48
      Dec-13	2,817	48
      Jan-14	2,865	48
      Feb-14	2,913	48
      Mar-14	2,961	48
      Apr-14	3,009	48
      

      From September through April the EIA has Texas increasing 48,000 barrels per day, rounded to the nearest 1,000 barrels of course but that is still way, way to linear. I just don’t believe it.

      If the EIA ain’t guessing then someone else is guessing.

      1. Mr. Patterson, I simply wanted to offer an explanation for the delay in reporting between the EIA and the TRRC and that is the best explanation, IMO. We cannot hide, or defer reporting production in Texas. That’s a fact. To get oil and condensate sold and moved off premise, we must report it to the TRRC and because ultimately sales must balance with reported production, I feel that production being reported is fairly accurate. You, or somebody has said, the EIA data is indeed fairly accurate after 18 months when the TRRC releases its lease data. The EIA cannot get its data any other way, really. I don’t report production to the EIA and neither does any other operator in Texas.

         Thanks,

         Mike

         What the federal government does, I don’t know.

         1. Mike, thanks for the input. All I wanted to point out is that the EIA’s data is an estimate, not actual data. I know they get their data from the Texas RRC, but we both know that data is incomplete. The EIA, to their credit, tries to estimate what the actual production will be when it all does come in.

            You stated that the EIA was not guessing, that they are using actual data. Well… yes and no. They are using actual data, actual incomplete data. To fill in for data not yet reported…. they guess.

            That was my point but I thought we all knew that anyway.

            Yes, after a couple of years, the EIA data matches exactly the Texas RRC data. It has to match because that is where the EIA gets their production numbers.

            1. Gotcha. Clearly you have a background in oil and gas and know that for the most part, its all a guess in the oil business until it actually happens.

               Thank you for your good work.

               Mike

   2. Hi Mike,

      Thank you for the information. This clerical problem is a matter of the oil companies shifting the cost of hiring qualified help to the TRRC. A simple solution would be to make it expensive to do the reporting digitally so paper forms cost you 1% of the value of output reported on the forms. Digital reporting is free. I bet clerical help that could file the forms digitally would be found in a hurry 🙂

      1. I did not say that correctly.

         It should have been “make it expensive to do the reporting on paper”, basically paper reporting expensive, digital reporting free.

5. Re: CNE (Cumulative Net Exports) Depletion

   A rough rule of thumb is that about half of post-net export peak CNE tend to be shipped about one-third of the way into a net export decline period.

   For example, for the Six Country Case History, their combined net exports peaked in 1995. Their post-1995 CNE were 7.3 Gb, and they took 12 years to hit zero net exports. One-third of the way into the net export decline period (through 1999), they had shipped 54% of post-1995 CNE. Note that based on extrapolating the seven year 1995 to 2002 rate of decline in their ECI Ratio (ratio of production to consumption), estimated post-1995 CNE were 9.0 Gb. In any case, the volumetric depletion of post-1995 CNE for the first four years was about 1.0 Gb/year, whereas the volumetric depletion of post-1995 CNE for final eight years (of the 12 year net export decline period) was about 0.4 Gb/year.

   For the Russian Case History, based on the 2007 to 2013 rate of decline in their ECI Ratio and based on the one-third/one-half model, the estimated rate of depletion in post-2007 CNE would on the order of about 2 Gb/year for 18 years (2008 to 2025), and about 1.0 Gb/year for the next 36 years or so after that.

   Of course, the estimate for Six Country post-1995 CNE was too high, based on the initial seven year 1995 to 2002 rate of decline in their ECI Ratio.

   As I have periodically noted, where this gets “Interesting” is for Available Net Exports, or Global Net Exports (GNE) less Chindia’s Net Imports (CNI), which fell from 41 mbpd in 2005 to 35 mbpd in 2012. Based on the seven year 2005 to 2012 rate of decline in the GNE/CNI Ratio, estimated post-2005 Available CNE are about 175 Gb, with 95 Gb having been shipped from 2006 to 2012 inclusive, putting theoretical remaining post-2005 Available CNE at a grand total of about 80 Gb, based on the seven year 2005 to 2012 rate of decline in the GNE/CNI Ratio (which probably fell to around 4.5 in 2013.

   

   1. Incidentally, as we know Cornucopians routinely characterize the Peak Oil “Theory” as meaning that we are “Running out” of oil. In fact, one guy characterized a predicted peak oil date as meaning that production was supposed to go to zero the year after the predicted peak.

      However, in regard to net exports of oil, we are in fact “Running out.” The US “Ran out” of net exports in 1948, and China “Ran out” of net exports in 1993. The combined Six Country Case History “Ran out” of net exports in 2007, only 12 years after their combined production virtually stopped increasing.

      Globally, I estimate that we burned through about one-fifth of post-2005 Global CNE (Cumulative Net Exports) from 2006 to 2012 inclusive. And as noted above, I estimate that we are “Running out” of Available CNE (the volume of Global CNE available to importers other than China & India) at a ferocious rate.

6. The EIA’s latest Short Term Energy Report is out today. Mouse over “Data” then click on “Tables”, then click on “Table 3b” for non-OPEC Liquids.

   As usual they have USA liquids production going onward and upward, or at least through 2015. They have USA liquids at 13.69 million barrels per day in June 2014 and they expect it to be at 14.96 million barrels per day in December 2015. Their projection for Russian liquids is not so optimistic however.

   

7. Ron, you have some interesting charts, especially the ones where you deduct US production. I must steal that idea some time 😉 I posted a post today on Brazil. Fascinating to see how dependent Brazil is on renewables, especially hydro, and energy growth for economic growth. And a couple of days ago I had a guest post on Uranium resources from a mining expert. Interesting post covering old ground (but written by someone who is not anti-nuclear) but even more interesting discussion.

   Brazil: Samba Energy
   Do We Have Enough Uranium To “Go Nuclear”?

   

   1. Remember when Brazil was all the rage in oil circles? Don’t hear about it much anymore. Does anyone think that Brazil has peaked? The forecast below from 2008 sure didn’t work out.

      

8. Interesting that they expect lower crude oil prices in 2015 than 2014. And U.S. crude oil production for 2015 will be 25% higher than 2013.

   1. I assume you are talking about the EIA’s Short Term Energy Outlook. Yes they expect WTI price to average $100.98 this year and $95.17 next year. I think they are way off on guessing next year’s crude oil average price.

      They say the US produced 12.31 million barrels per day, total liquids, in 2013 and they expect the US will produce 14.6 million barrels per day, total liquids, in 2015. That is an increase of 18.6% over the two years.

      1. Right, but I was looking at crude, not total liquids.

9. Hi All,

   In an earlier post I presented a few World C+C scenarios using Webhubtelescope’s Oil Shock model and a URR of 3000 Gb (including extra heavy oil).

   A problem with those charts was that the depletion rate was for crude plus condensate (C+C) minus extra heavy oil (XH) which was modelled using a URR of 2500 Gb based on Hubbert Linearization of C+C-XH for 1993 to 2013.

   One commenter pointed out that the depletion rate was likely to be higher than I had projected. I am skeptical that this is true, but decided to try a model where the depletion rate of C+C-XH increases to 12% by 2100 (the high model in the chart). A second model (low model) with depletion rates remaining at 2013 levels is presented for comparison. The reserves in this model are most similar to proved producing reserves and are estimated at about 700 Gb in 2013. If we were to use proved plus probable reserves (about 800 Gb of C+C-XH 2p reserves estimated by Jean Laherrere) the depletion rate in 2012 would be about 3.3%, the oil shock model models proved producing reserves (which are lower than 2p reserves) so the depletion rate in 2012 is 3.8%. Chart below.

   

   1. Hi all,

      My comment was not very clear. Extra heavy oil such as the Canadian oil sands and Orinoco belt oil in Venezuela are not included in the model above. Also Jean Laherrere’s 2200 Gb estimate for Crude plus condensate minus extra heavy oil(C+C-XH) is based on a Hubbert Linearization from 1985-2011, in addition Hubbert Linearizations of Opec (1200 Gb) and non-Opec(1400 Gb) add to 2600 Gb. A Hubbert linearization from 1993 to 2013 points to 2500 Gb for a C+C-XH URR. The inflated OPEC reserves play no part in this model, it is based on back dated discoveries of proved plus probable reserves with future discoveries estimated by the dispersive discovery model of Webhubbletelescope (somewhat similar to Jean Laherrere’s creaming curve analysis). If there is an economic crash or oil prices cannot rise enough to make oil resources profitable to produce then the depletion rate will fall rather than rise. I presented such a model earlier and there were objections.

      I double checked Laherrere’s analysis and 2p reserves are estimated at about 830 Gb at the end of 2012.

10. Dennis,

    As I’ve said ad nauseam, and many others have expressed from their perspective, the “good oil” has already been basically used up or is depleting so quickly it’s all but kaput. Examples are endless: North Sea, North Slope, Ghawar, Mexico’s giant Cantarell, Russia’s monster Samotlor. No reasonable person disputes that current production levels can be kept up – at a (great) cost. There are tar sands, oil shale, and all that gooey stuff in Venezuela, etc. So what? Reserves of expensive oil is what they are, reserves that shouldn’t be heaped in with the “good stuff” as thought that makes everything OK. If you insist on including “junk oil” in your projections you might as well set your depletion rate at zero.

    One other point: Any projection beyond 20 years is nonsense. Great Merlyn wouldn’t pretend to know what will happen in 2050 much less than 2100.

    Doug

    1. Very well put Doug. Not all reserves are equal. And some reserves are not even there at all. Many OPEC nations believe they will recover 75% of the OOIP. So they are counting the difference between what they will recover and what they hope to recover, as reserves.

       1. My money is on them getting 75% of OOIP out.

          When they shut off the pumps because nothing more is coming out, they will declare OOIP to have been 25% more than the total they got out. They will then celebrate their accuracy.

    2. Hi Doug,

       The model above does not include oil sands or Orinoco belt oil, LTO oil if deducted would have little effect (it will likely be 20 to 25 Gb out of a World total of 2500 Gb so about 1%). Jean Laherrere projects out to 2100 and when I present such models, it is simply so that comparisons to his models (which are the standard in my opinion) can easily be made. Political economist makes projections out to 2050, and the EIA, IEA, and many oil companies routinely make forecasts out to 2040, I simply picked 100 years from 1960 to 2060, if the discovery data and future discovery estimate are roughly correct and the depletion rates follow the trajectory in the chart, the crude less extra heavy output will follow the curves shown.

       What is your estimate of good oil vs. bad oil?

       I have not really thought of reserves in those terms except to eliminate 500 Gb of extra heavy oil sands and Orinoco belt output from the analysis.

       The Hubbert Linearization for World C+C minus extra heavy oil(XH) for 1993 to 2013 is shown below, when rounded to two significant digits I get 2500 Gb.

       

       1. “If you insist on including “junk oil” in your projections you might as well set your depletion rate at zero.”

          I forgot to mention that if all else is held equal a depletion rate of zero would result in no output, depletion rates can certainly fall during an economic crisis or due to war as they did during the Iran Iraq war, they can also fall as oil prices fall as they did during the 1980s, I doubt that the World average depletion rate for C+C minus XH(extra heavy oil) will fall below 3% or rise above 7% over the next 25 years.

       2. Dennis,

          Dennis,

          As Calhoun stated above “Remember when Brazil was all the rage in oil circles? Don’t hear about it much anymore. Does anyone think that Brazil has peaked? The forecast below from 2008 sure didn’t work out.”

          The trouble with models is the only people who take them seriously are modellers. There’s a reason for this: We live in a world with an extraordinary large number of variables; chaos theory applies, that’s about it. Respecting the difference between “good oil” and “bad oil”, that’s a function of the times: How many mega-projects have been cancelled in the last couple of years owing to escalating costs? All that good oil suddenly becoming bad oil! Of course we have “semi-good” oil that’s exploited on a barely economic basis. Don’t forget that.

          In any case, please get slightly real on one point Dennis, projections to 2100. Really! [Yellow Face]

          Doug

          1. Hi Doug,

             Projects have been cancelled throughout the history of oil production so that is not really anything new. As I said before the point of the models that show output from 1900 to 2100 was to make it easy to compare with Jean Laherrere’s models which usually are presented from 1900 to 2100 for World crude output, for example:

             

          2. Hi Doug,

             As far as I understand, scientists use models all the time, they are simplifications of reality, which as you correctly point out is quite complex. The scientists that develop and improve existing models (and create new models) do not believe that the models reflect reality with perfection.

             Clearly the oil shock model is not perfect and we can only guess at future discoveries, the rate that those discoveries will be transformed into producing reserves, and the future depletion rate of those reserves.

             The world’s average depletion rate has never risen above 6% of mature (producing) reserves (in 1979-80), improved technology might allow us to approach this depletion rate in the future, but the poorer quality of the remaining reserves will make this a challenge. I agree that the easy and cheap oil has mostly been depleted, it is for that reason that even keeping depletion rates at present levels may be difficult. I think depletion rates may rise to as much as 5%, going beyond that at the World level may prove impossible.

             1. Dennis,

                “As far as I understand, scientists use models all the time, they are simplifications of reality, which as you correctly point out is quite complex. The scientists that develop and improve existing models (and create new models) do not believe that the models reflect reality with perfection.”

                Yes Dennis, I understand. However, please note that I’m not a grade 5 student, and you don’t have to talk down to me like that. In fact I spent many years at university, frequently developing models. This taught me to be highly skeptical, especially of “experts” with models. When someone, even someone with multiple PhD s, projects highly complex dynamics 40-50-90 years ahead, I laugh — or I challenge them.

                Doug

                1. Hi Doug,

                   Ok, why can’t I explain my viewpoint with your considering it “talking down to you”.

                   You said,

                   “The trouble with models is the only people who take them seriously are modellers. There’s a reason for this: We live in a world with an extraordinary large number of variables; chaos theory applies, that’s about it. ”

                   My response was supposed to explain why I disagree with your statement above.

                   Every time I attempt to explain why I disagree with your point of view. Your response is:

                   “However, please note that I’m not a grade 5 student, and you don’t have to talk down to me like that.”

                   I am also skeptical of models, but I think they are useful.

                   The oil shock model is a more general model than the logistic used to create a Hubbert curve which enables a variation in depletion rate.

                   It is undoubtedly true that the future depletion rates cannot be modelled adequately and chaos theory would likely apply best.
                   The model simply posits that if depletion rates follow a particular path A, and reserves follow path B, then output will follow path C. If your main point is that all three paths are difficult to guess correctly, we agree.

                   I attempt to create high and low scenarios that would tend to give us a ballpark idea of what future output might be.

                   I apologize for coming across as talking down to you.

                   I in fact find your comments interesting and when I respond to you, I explain to anyone reading this blog why I am responding to you in a particular manner (not everyone knows as much as you do).

                   On many occasions you raise an interesting point which causes me to do further research and then I share what I have learned.

                   The “don’t talk down to me” gets pretty old. If you would prefer that I do not respond to comments that you make, I would be happy to oblige.

                2. Telling me “scientists use models all the time” gets pretty old as well. But, fair enough, you just rattle on and I will ignore it without any future comment(s).

                3. Hi Doug,

                   Maybe I just should have said, “many scientists take the models seriously” in response to your, “nobody takes them seriously”.

                   Or possibly, “I disagree” (without any explanation).

                   Mostly I will try to refrain from comment as you are easily offended it seems.

                4. Interesting discussion.

                   One either does a model, or one says “it is what it is”.

                   There is nothing in between these extremes. Even someone’s minds-eye view or narrative explanation for what the future holds is a model. It may be subjective, but it is still a model — and someone can change a word or two, and the model changes.

                   Sorry for more 5th-grade level philosophizing.

                5. Hi Web,

                   I guess I tend to understand things better at that level. Thanks.

11. Pigs at the trough?
    http://www.reuters.com/article/2014/07/08/us-usa-transportation-congress-idUSKBN0FD2IR20140708?feedType=RSS&feedName=politicsNews

    Will we even need this infrastructure in the future?

    But the welfare gravy train must go on.

    1. Exactly. The republicans and democrats are each ready to scratch their worst enemies backs in order to pass out the goodies to their owners and homeboy voters.

       Having said this I am very glad that there the closest old two lane two way traffic east west highway to my home is finally getting four laned with a nice wide median. It will save me an hour occasionally and might save me from having a fatal accident.

       My local legislators have sold their souls and votes many times over to get the funding.

       1. The answer is simple. Raise fuel taxes.

12. No taxes, no roads.

    1. Not much oil in the future…… not so much need for roads.http://uk.reuters.com/article/2014/07/08/us-maersk-brazil-idUKKBN0FD12A20140708

       1. Money quote:

          “There was significantly less oil than we had expected,” Chief Executive Nils Smedegaard Andersen told reporters on a conference call. “In addition, the expectation for the price of oil back in 2011 was more optimistic than today.”

          No surprise to me that there was less oil than expected. But they were expecting even higher prices than today’s? Time to refine the model, eh boys?

          1. Better idea.

             Examine reality and examine the model. The model was wrong. It was a failure. All things associated with it should be painted with FAILURE.

             Any further grant requests should be required to have FAILURE stamped on them.

             Then proceed.

          2. Brasil took a very very hard line on both environmental performance, and on requiring local sourcing and manufacturing of production equipment. (i.e., they wanted to capture the ACTUAL labor and industry advantages of the development of that resource for themselves). I suspect this significantly = “higher costs”, ones that someone will be most willing to pay after Brent takes it’s next spike skyward.

             1. Only a few helicopter models in the world had the range to take platform crew out that far and my recall was they were discontinued. I look for stuff like that.

                1. Maybe a 214, and my buddy who flew one says they are unreliable. He hated it.

                   Paulo

          3. Why is Maersk in the oil production business?

       2. Hi OFM,

          There is still a need to maintain existing roads and I agree with the conservative principle that the user should pay, fuel taxes are not perfect because there are a few electric cars, possibly verifying odometer readings when registering cars and paying a road tax based on number of miles travelled would work. Fuel taxes could remain as a carbon tax to attempt to speed the transition away from fossil fuels and to partially fund public transportation projects (light rail and bus systems), though this violates the user pays principle. The problem with the free market is that sometimes it does not handle transitions like peak oil very well sometimes you need a little public policy to push things in the right direction.

          1. Hi Dennis,

             I agree .

             The public policy push should include allowing electric cars to run road tax free for now in my estimation. This be a good policy push towards a cleaner and healthier environment and a safegaurd to some extent against constantly rising oil prices. If ten percent of light trucks and cars were electrics that would put some serious downward pressure on gasoline demand and the people who were still driving oil burners would be compensated via lower fuel prices. WIN WIN for every body except the current manufacturing and car sales establishment.

             1. Hi OFM,

                As a conservative who seems to agree that both climate change and peak oil are potentially serious problems, does some form of carbon fee (or tax), possibly to be used to otherwise reduce income taxes for the middle class seem like a sensible step?

                I understand that in the current political climate such legislation would not be passed, but it would be nice if center right and center left could get together on something sensible.

                1. Any body who is scientifically literate and capable of independent critical thinking simply MUST believe in forced climate change being extremely probable and extremely dangerous to humanity.

                   Anybody with the brains god gave a billy goat must understand that peak oil is a fact rather and a theory only in the sense that that much abused word is used in science- meaning accepted as factual.Of course we peakers have been a bit premature in the past in predicting the date, lol.

                   A carbon tax properly drawn up would be a great help in reducing the impact of warming and softening the hard economic landing that is going on now and that is going to get infinitely worse a result of peak oil.

                   But you can forget about such a tax being passed anytime soon.

                   And fixing it so the middle class can get part or all of it off other taxes is not the best way although this strategy is probably the best one to use in trying to pass such a tax.

                   The low earning working people in this country as opposed to the professional and organized labor middle class are fast going broke and they can’t get anything back because they don’t earn enough. Raising the price of gasoline would kill them.

                   The market itself is pretty good when it comes to making sure that things such as coal are used efficiently at the most basic level.

                   A better strategy would in my opinion be to gradually raise taxes on all sorts of energy on a sliding scale. This would mean that the first five hundred KWH would be cheaper than the next five hundred.

                   Tough efficiency standards are extremely useful and effective and will be accepted by the public. Even the most hard core old redneck conservative car guys I know nowadays admit that modern cars are far more reliable and far cheaper to drive than older cars.These same guys used to rant and rave like lunatics about the govt forcing fuel injection and computers and air bags on them. But once a couple of them were saved by air bags from going thru the windshield they grudgingly changed their minds.

                   There are tons of opportunities to force energy conservation. I read just a couple of days ago that in most houses set top cable boxes are a major consumer of electricity twenty four seven three sixty-five and that there is no reason at all they cannot be made to run just as well and reliably on a small fraction of the juice they use at present.

                   Efficiency and conservation are politically doable. A carbon tax is not in my opinion for now.

                   But at some point in the not so distant future such a carbon tax is going to be an across the board reality.

                   Two utterly unmistakable trends of modern western life are socialism and falling living standards which correlate but are not causatively related to any great extent.People expect more from government every year and they are going to continue to get more until the business as usual paradigm collapses.

                   As living standards fall the have nots are going to take a look around at the things the haves are using freely and insist on putting a big tax on them. Non smokers are tickled pink with six and eight dollar a pack cigarettes.Non drivers are going to be tickled pink with eight and ten dollar gasoline knowing or at least hoping part of the money will be spent on subways and trains and bike lanes.

                   Coal leaving the United States is a prime candidate for such a tax. If it is taxed at say five dollars a ton when exported and the money put in the treasury the average tax consumer will see his govt provided services and bennies go up more than his electricity bill (and other expenses))because the folks who are hard up don’t use much electricity.

                   Under this scenario people like the Bushes and the Gores who own very large and elaborate houses and use four or five thousand KWH a month will be subsidizing the have nots.

                   As a matter of fact a pretty good case can be made that there is already a defacto carbon tax in effect in many instances.Unless i am way wrong the governments of Saudi Arabia and several other oil exporting countries spend the larger part of their oil revenues on subsidizing their general public.

                2. Hi OFM,

                   You are absolutely correct that the poor would get hosed with my suggested plan. How about the plans that rebate all carbon fees back to people regardless if whether they pay much in taxes? Such a plan would be quite progressive, a person that uses no fossil fuel would still get money back.

                   The problem with OPEC is that they subsidize the economy with oil money, but this does not create any incentive to conserve as a carbon tax would so it is not quite the same. A better solution would be higher oil prices in opec countries with fuel cards that allowed a certain amount of fuel for free or simply money that could be used for fuel or what ever the consumer wants.

13. I didn’t see any mention of trivial facts, like the fact that the US is currently dependent on net crude oil imports for 45% of the crude oil processed daily in US refineries, but that is a trivial item of no great importance.

    A leaked document shows just how much the EU wants a piece of America’s fracking boom
    http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/08/could-a-trade-deal-lift-the-u-s-longstanding-ban-on-crude-oil-exports-europe-thinks-so/

    The European Union is pressing the United States to lift its longstanding ban on crude oil exports through a sweeping trade and investment deal, according to a secret document from the negotiations obtained by The Washington Post. It’s not entirely surprising. The EU has made its desire for the right to import U.S. oil known since the U.S. started producing large amounts of it in the mid-2000s. It signaled again at the outset of trade negotiations, and its intentions have become even more clear since.

    This time, though, the EU is adding another argument: Instability on its Eastern flank threatens to cut off the supply of oil and natural gas from Russia. “The current crisis in Ukraine confirms the delicate situation faced by the EU with regard to energy dependence,” reads the document, which is dated May 27.

    The leak comes in advance of another round of discussions on the Transatlantic Trade and Investment Partnership, which kicked off last fall and is expected to encompass $4.7 trillion in trade between the U.S. and the European Union when it’s finished (here’s an explainer on the deal). That won’t happen for several years — if ever — but knowledge of the E.U.’s position has inflamed the already-hot debate over whether to allow the U.S.’ newfound bounty of crude oil to be exported overseas.

    Particularly irksome to environmentalists is the EU’s request that the U.S. make a “legally binding commitment” to export its oil and gas, which U.S. negotiators have so far resisted, according to the correspondence. (The U.S. Trade Representative declined to comment on a leaked document, except to say that it’s too early to characterize its position on any matter).

    1. “I didn’t see any mention of trivial facts,” (In regard to the Washington Post blog)

       1. It’s just another phase of scarcity.

          An interesting attempt to contractually obligate oil supply, even in a situation where there is not enough domestically.

          Imagine if this had been imposed on Indonesia (maybe it was). You must send oil outward, even if there’s not enough domestically.

          Basically this defines external customers as having priority over domestic use — which is the substance of IMF requirements that domestic subsidies be eliminated (see Egypt).

14. Out leaders chime in:

    “I won’t get into the debate about climate change,” Smith said. “But I’ll simply point out that I think in academia we all agree that the temperature on Mars is exactly as it is here. Nobody will dispute that. Yet there are no coal mines on Mars. There’s no factories on Mars that I’m aware of.”

    State Sen. Brandon Smith (R-Kentucky)

    1. Even an idiot should know that Mars is much colder than the earth. Even though its atmosphere is 95% carbon dioxide it is still very cold. Climate change deniers cannot help but show their ignorance. It is no coincidence that the vast majority of them are republicans. All they have to do is tell the populace exactly what they want to hear and they get elected.

       What is the Temperature of Mars?
       Mars’s atmosphere is about 100 times thinner than Earth’s. Without a “thermal blanket,” Mars can’t retain any heat energy. On average, the temperature on Mars is about minus 80 degrees F (minus 60 degrees C).

       1. Did he mean temperature increase is the same?

          Is there data on that? Maybe several decades? That would be cool, as it were.

          1. No he meant exactly what he said.

             “But I’ll simply point out that I think in academia we all agree that the temperature on Mars is exactly as it is here. Nobody will dispute that.”

             There is no relationship between the temperature on Earth and the temperature on Mars. Mars is millions of miles further from the sun than the Earth is and the atmosphere is 100 times thinner. It takes an atmosphere to hold the heat in. Mars hardly has any atmosphere at all even though what it does have is 95% carbon dioxide.

             1. This guy is too stupid to even know what he has said. In academia in the quote implies that he is an academic which he is not.

                Having said this he has probably won the dunce hat for this week at least.
                But he is not without opposition and not all of it is republican.

                This democrat is in the running for second for sure.

                State Rep. Kevin Sinnette (D) dismissed the threat of man-made global warming by pointing out that dinosaurs survived climate change.

                “The dinosaurs died, and we don’t know why, but the world adjusted,” Sinnette said. “And to say that this is what’s going to cause detriment to people, I just don’t think it’s out there.”

                It is always dangerous to assume a person with a public life believes what they say. In this sort of case that they are often saying what they think will get them reelected. These two are located in one of the deepest and darkest parts of the bible belt.

                I know lots of both sorts of people, right wingers and left wingers. In my estimation the republicans are as well ” educated ” on average as democrats. But democrats are more likely to take environmental issues seriously without a doubt on my part at least.

                BUT I do not attribute this to education on the whole. I personally believe it has more to do with tribal loyalties.I just yesterday spoke to a local woman who is a recently retired science teacher active in democratic politics .(I tend to quiz everybody I can for amusement and for purposes of continuing my own education.)

                She is across the board with the democratic program on all the hot button issues.She was able to explain at an elementary level why CO2 pollution is going to( may in her words but her body language expressed great doubt) over heat the planet but beyond that she knew almost nothing specific.

                I switched subjects and asked about peak oil and drew a total blank.She had never even heard of the topic.But I will be that she is quite an expert in old tv shows or movies or some university athletic team or some other basically trivial pursuit.

                Now given that she was a SCIENCE teacher for the last forty years or so- it is no wonder the public is so abysmally ignorant.

                I could tell worse tales on republicans but not right this minute as dinner is on the stove. Suffice it to say that the average republican’s opinion on any given topic is highly correlated with the party’s position in a fashion similar to the average democrats opinion correlating with the democratic party’s position.

                Brains have only a little to do with these things.

                1. I should have said he is not without COMPETITION for the dunce hat. Senior moments are getting more common.

                2. You mean those 4,000 year old dinos? Not much hope, is ther?

                   Paulo

       2. And this guy is a “decider” in our system.
          Even though the scientific illiteracy of our GOP friends is legendary, I find this shocking.

          1. Ranks up there with this gem from another “decider”

             

          2. Barring miracles there is no way biofuels are ever going to support business as usual.

             But so long as the industrial infrastructure that manufactures trucks and tractors is up and running we can run our farms on biofuels plus run enough trucks to get the food to market.

             ( We don’t need a whole lot of trucks and tractors compared to the size of the auto industry. Just one large car plant converted to manufacturing tractors would be enough to supply the entire country so I do not anticipate that heavy duty trucks and farm machinery will become unavailable barring mismanagement.)

             Nobody really knows just how much farming across the board with biofuels would cost but it will definitely cause some substantial real (as opposed to nominal) increases in the wholesale price of food.

             But depending on what sort of food and where it is grown and where it is shipped to it probably won’t affect retail food prices enough to put those of us with jobs in the poor house.

             This is because the wholesale price of food is usually only a minor fraction of the retail price.Bread at three or four dollars a loaf has only a few cents worth of flour in it.

             Doubling the delivered price of wheat to market would only add a quarter or less to a three dollar loaf.

             But we will have to drop down the food chain a bit when it comes to beef and to a lesser extent pork. The biggest part of the cost of these meats at the wholesale level is feed costs and the wholesale prices of meat will necessarily go up quite a bit, maybe as much as two or three times.That would have a serious impact on the price of hamburger and pork chops.

             Poultry would not go up nearly so much because chickens and turkeys are far more efficient converters of feed into marketable meat.

             Peak oil does not mean going hungry in a rich country unless the powers that be mismanage the situation badly.

             Now in a poor country such as Egypt that imports food and where most people are already spending a huge fraction of their income on food the situation is too sad to contemplate without going sleepless.

             People who are living mainly on bread and other grain based foods and already cooking at home can’t cut back to less expensive food.There just isn’t anything less expensive to be had.

             And the grain surplus that plagued farmers for most of my life has been history for a long time now.There is not a snowballs chance on a red hot stove that there will ever be a big grain carryover again-one big enough to support the world a year or two.

             And someday the way we grow corn,wheat, rice and soybeans mono culturally is going to result in a disastrous loss of a crop perhaps right across a whole continent.

             A viral blight could even jump an ocean very easily these days given the number of travelers. When there is a disease outbreak modern farmers go on a quarantine like routine to the extent possible in the same fashion as public health professionals. All it takes to carry and infection from one farm to another is one muddy boot. All it takes to transport a horrible new pestiferous bug across an ocean and a continent is one pallet of almost any sort of goods that escapes examination. And of course only a small percentage of the pallet loads are inspected.

             Bugs arrive in the pallets themselves which is the most likely route for the last couple of new invasive tree killers to have arrived.

             Given a long enough time frame this sort of disaster is not a question of if but rather of when.

             The odds of our losing most of a major staple crop some given year are not easily calculated and getting an opinion on the record out of professionals in the field of agronomy is not easy.

             But I speak to such people informally from time to time and a typical off the record response to an inquiry is that the risk is ” high enough that it is a frequent topic of conversation with my colleagues” or something to that effect.

             Declassified documents reveal that the Pentagon estimated the risk of nuclear war at around two percent a year during the cold war era.

             I will hazard a guess that the risk of a catastrophic failure of one or another staple food crop is substantially higher than two percent annually although the risk of losing any GIVEN crop in any given year is probably considerably less- with the exception of bananas.

             IF you really like ’em you better eat all you want now while they are still cheap.

       3. He probably got Mars confused with Venus, which is subjected to a severe greenhouse effect.

          1. What happened is someone told him that the polar regions of Mars are warming somewhat. Then that same someone told him that it is happening even without man-made CO2 causing it.

             Yet when he tried to relay this information, he completely messed it up. Not unexpected.

          2. Equally ignorant democrats are quite common as well but it is not pc to mention them and you won’t hear about them except if you read the right wing press such as the folks who exposed ACORN.

             The democratic coalition is tied together with tribal loyalties just as the republican one is. The democrats who do not believe in global warming just keep their mouth shut about it because they are part of a coalition that does believe.They avoid the subject strenuously so as to avoid pissing off their own constituents and damaging party cohesion.

             A more easily envisioned and understood example is gun control. The national party is for it and the local population here is against it. Therefore local democrats would rather as my old Momma used to say “eat xxxx (feces ) with a splinter ” that to say anything in public about guns except if absolutely unable to avoid the subject.

             When it is finally brought to the table here the local democrats have to break faith with the national party and insist that they ain’t no gun collecting commies and that their great great great grandpa s Kentucky rifle that was used in the War Between the States is their most treasured possession after the wife and kids.

             But in general there is no denying the democrats are at their worst at least marginally better positioned on environmental issues and peak oil is an environmental issue of the most critical kind.

             Nevertheless I cannot immediately call to mind any prominent democrat since Jimmy Carter who has been willing to seriously talk about energy policy.

             The UNITED AUTO WORKERS and other big labor organizations are so tightly tied to the democrats that they might as well be conjoined twins.So the best we can hope for is some useful but grossly inadequate legislation increasing fuel efficiency from the democrats. We can expect even less from the republicans of course.

             And so far as both parties are concerned the bankers and other monster corporations have both parties in their vest pockets peeking out like Paris Hiltons little dog that she carries around in her purse.

    2. seems a good a place as any to insert this

       prelim report…Deep Decarbonization Pathway Project 7/2014 Interim Report.

       big file

       http://unsdsn.org/wp-content/uploads/2014/07/DDPP_interim_2014_report.pdf

       1. “But it is clear from the numbers reviewed above that a very large share of the fossil fuel reserves plus resources will have to stay in the ground or be “stranded”—that is, left unused in the long-term. The already-proven reserves are many times beyond the safe level of cumulative fossil fuel use, yet the energy sector invests hundreds of billions of dollars each year to discover and develop new resources and reserves. This raises the obvious question whether such investments are well directed, or are
          simply wasteful, developing reserves that can never be safely used. One would instead expect the fossil fuel industries to be investing far more heavily in the RDD&D of CCS in order to increase the proportion of existing reserves and resources that will eventually be usable. “

15. Evan-Pritchard on the money:

    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10957292/Fossil-industry-is-the-subprime-danger-of-this-cycle.html

    1. Whoa:

       Data from Bank of America show that oil and gas investment in the US has soared to $200bn a year. It has reached 20pc of total US private fixed investment, the same share as home building.

       And I is an explicit variable in the GDP equation. It was way down in Q1, and a significant contributor to -2.9% GDP for Q1. If NoDak winter was the source of -2.9%, we better get used to seeing it every year.

16. Baiji Refinery update:

    http://www.mcclatchydc.com/2014/07/09/232805/islamists-corner-commandos-defending.html

    This will be a blow to Bagdad.

    1. Hmmm.

       “This cannot end unless they run out of food,” he said.

       It’s gotta be 110 degs. Why do they have water?

       1. Inquiring minds would like to know.

       2. 1/To start with, if it comes down to the final hour, don’t you think the 75 would blow the place themselves, rather than hand it over to the enemy?
          2/ It could take awhile to starve them out, it is Rhamadad (spelling?) they won’t be eating much?

          1. Ramadan rules are you don’t eat during the daytime. You are permitted to after dark. Something like that. If ill and a doc orders you not to fast, you eat normally.

             1. Not only can you not eat during daylight hours but you are not allowed to drink anything either. Nor are you allowed to smoke or have sex during daylight hours. But you are allowed to eat drink, (no alcohol), smoke and screw all night.

    2. The WTI oil price rose to $107 during the panic a few weeks ago that the Sunni Mad Max warriors riding out of the desert would takeover Iraq. In reality 75 determined commandos can hold them off.

       I don’t believe in technical speculative analysis to explain the longer term price of oil, and yet these triangular lines on a chart do seem to have some importance at the moment. After reaching the top line of the triangle the WTI price is back down at $102.

       

       1. So when you reach the narrow part of the triangle, there appears to be very little room for prices to move and prices are then stuck around $100/barrel.

          1. Frugal wrote:
             “So when you reach the narrow part of the triangle, there appears to be very little room for prices to move and prices are then stuck around $100/barrel.”

             It seem unlikely that Oil production can remain flat if prices don’t start to rise soon. The cheap oil continues to be depleted as Horizontal drilling reaches its conclusion. I think prices will begin to rise in the next 8 to 18 months, which will probably cause more demand destruction. But Its seems unlikely that during the next crisis that Oil will fall back to $30 bbl as it did in Jan 2009 as Oil drillers spent a boat load of money on infrastructure. I think they would choose to shut-in production rather than sell it below cost.

             1. TechGuy,

                About shutting in rather than selling below cost:

                I wonder. Selling below cost does at least generate some cash flow; shutting in won’t.

                Not a choice I’d want to have to make.

          2. My essay on the progression in year over year declines in annual Brent crude oil prices:

             Recent Global Annual Crude Oil Prices

             We have of course seen a cyclical pattern of higher annual highs and higher annual lows in global (Brent) crude oil prices in recent years, but I think that the rates of change between successive annual price lows, or troughs following annual oil price peaks, is very interesting. 

             Peak to Trough Annual Brent Crude Oil Prices, 1997 to 2013

             1997: $19
             1998: $13

             2000: $29
             2001: $24 (1998 to 2001 rate of change: +20%/year)

             2008: $97
             2009: $62 (2001 to 2009 rate of change: +12%/year)

             The 11 year 1998 to 2009 overall of change in trough prices was 14%/year.   And then we have 2012 to 2013.

             2012: $112
             2013: $108

             The four year 2009 to 2013 rate of change in the trough price would be 14%/year ($62 to $108). 

             The long term 15 year 1998 to 2013 rate of change in trough prices would also be 14%/year ($13 to $108).

             If the (+14%/year rate of change) pattern holds, and we were to see a year over year decline in annual Brent crude oil prices in 2017, it would be down to an annual Brent price of about $190 in 2017.

             Following is an excerpt from an early 2013 OECD working paper which forecasts sharply higher global crude oil demand (and potentially) much higher oil prices:

             “A return to world [economic] growth to slightly below pre-crisis rates would be consistent with an increase in the price of Brent crude to far above the early-2012 levels by 2020. This increase would be mostly driven by higher demand from non-OECD economies – in particular China and India. The expected rise in the oil price is unlikely to be smooth. Sudden changes in the supply or demand of oil can have very large effects on the price in the short run.”

             “Based on plausible demand and supply assumptions there is a risk that prices could go up to anywhere between $150 and $270 dollars per barrel in real terms by 2020 depending on the responsiveness of oil demand and supply. These projections account for a negative feedback effect of higher oil prices on economic growth.”

             Source:  http://www.financialsense.com/contributors/joseph-dancy/oecd-study-forecasts-sharply-higher-global-crude-oil-demand

          3. Frugal, people who do “technical analysis” of stock prices say that when you reach the tip of the triangle there will be a “breakout”. The breakout could be up or down but the most expected direction is for it to go the opposite direction of the general direction it was headed before it started the triangle. In this case that would be down. But don’t bet on it.

             There are basically two kinds of stock traders, those who do “technical analysis”, like looking for chart patterns such as double tops, head and shoulders, and pennants or triangles like this one. Then there are those who do “fundamental analysis”, that is they look at PE ration, potential growth, how deeply leveraged the company is and so on.

             We are talking about frequent traders here, those who never invest for the long term but trade frequently trying to beat the market. Those who do technical analysis generally lose money. Those who do fundamental analysis usually lose money also but lose less money than the technical analysis traders.

17. I can’t say that I understand what underlying forces could give technical analysis predictive value. How can solely looking at historical prices predict future prices? Fundamental analysis such as looking at cash flow and P/E ratios makes more sense to me.

    As far as oil prices go, the price has been stuck around $100/barrel for the last 3.5 year and there must a reason for this. If the marginal oil barrel requires $100 be to profitable, the only thing that could lower the price would be demand collapse caused by something like a world wide recession, which is of course a real possibility.

    Almost anything could drive the price higher: a renewed Arab spring, recovering OECD economies, lack of large new fields being discovered, oil companies going broke, ……

    1. Theory is it reflects human behavior. Things like runups and declines defining buyers’ remorse — as opposed to “momentum”, which would be a runup that attracts attention and gathers more non remorseful buyers.

       That was all old normal stuff. HFT is 70% of volume now and it is emotionless.

    2. I find it kinda telling already that one of Opec’s largest producers being overrun with maniacs doesn’t spike the price. Why raise the price if you know they won’t be buyin’ right? 🙂

18. Oil explorers hit rock bottom

    By Guy Chazan, FT, July 2, 2014 6:32 pm

    “Something is not working here,” says a person close to the company. “The market is dysfunctional.”

    International exploration and production companies – or E&Ps – were once stock market darlings. A string of spectacular discoveries by Tullow Oil in Africa, Cairn Energy in India and DNO in Iraqi Kurdistan grabbed headlines and investors’ attention.

    But E&Ps have lost their lustre. That is partly because they seem to have lost the knack of discovering oil.

    “It would be great if someone actually found something with the drill bit to remind people of the reasons for holding E&P stocks,” says Brian O’Cathain, chief executive of Petroceltic International, an oil explorer quoted on Aim, London’s junior market. “Discoveries have been too sparse.”

    Now… that’s a money quote!

19. http://www.cga.ca/wp-content/uploads/2011/02/Chart-1-Natural-Gas-Storage36.pdf

    

20. Crumbling Roads in Oil Fields Slowing U.S. Energy Boom

    With the U.S. projected to be energy self-sufficient by 2030, according to BP Plc, crumbling highways may threaten billions of dollars of investment in the oil patch. Because more wells are being drilled using hydraulic fracturing, there’s greater need for truckloads of water, sand and chemicals, as well as steel structures used in the process in fields often miles from major roads….

    North Dakota’s Department of Transportation has increased its road construction budget to $800 million a year from $250 million in 2007, Jamie Olson, a Bismarck-based spokeswoman said by phone July 3.

    The Texas Department of Transportation is hoping that residents will pass a November constitutional amendment that would allow a $1.4 billion portion of oil and gas tax revenue that currently goes to a rainy day fund to be slotted for highway work instead.

    “We know that $1 billion will be needed to maintain roadways in all energy producing areas of our state, including South Texas,” Nick Wade, spokesman for the department, said by e-mail July 9. “That’s in addition to the $1 billion needed for regular road maintenance, and the estimated $3 billion for new construction to address congestion,” he said.

    The Texas legislature passed bills last year allotting $225 million to the state highway department and another $225 million to counties to repair roads damaged by oil-field trucks.

    It was the first time the state has ever given county governments money for road projects, Fowler said. The money doesn’t get counties very far, though. DeWitt expects to get $4.9 million, compared to an engineering estimate of $432 million to fortify the 315 miles of roads it maintains. La Salle County has sued the state, alleging that most affected counties aren’t getting a large enough share.

21. unfortunately the only people spreading the information about “global warming” are liberals and the liberal media. global warming has become like a religion to these nuts while in reality it is the single biggest scam that has ever been attempted to be pulled over on the american people. and the only people that politicized it are democrats because they want to tie it to increased taxes. it’s really that simple. they were all pulling it over on the citizens of this country right up until everybody found out they were seriously cooking the books in order to prove global temperatures were rising even though their has been no increase at all now for over 17 years now. what i would really like is for just one of these “expert” to let me know how taxing us to kingdom come is going to reduce pollution? what a joke. this is nothing more than an attempt, just like in the 70’s big ice age scare, to get into peoples wallets and fund the special interests. well millions of us who can see what is really going on are just not going to stand for it, no way. we make sure to vote, so any politician trying to push the lie better be prepared for the consequences.

    1. what possible motivation could you have to post something like this comment on this blog?

       1. Round Earth sceptics are immune to scientific evidence. They should be ignored completely.

       2. well i’ll tell you this, i was responding to the comment up above abotu in the pasting. there’s nonsense garbage about how the “experts” (“scientists”) with the high value grant money at stake are telling us this, that, and the other about their global warming fantasies and how it isn’t the politicians spreading the lies about the money grab. it all needs to be exposed for the junk science and massive con job that it is.

          Ron Patterson says:
          July 10, 2014 at 1:07 pm

          AGW is a falsehood being employed as a mitigation strategy by those who wish to stay at the top during the inevitable collapse of industrial civilization.

          A truly absurd explanation. The people who are telling us about AGW are mostly scientists, not politicians. They mostly academics and are not on top of anything. But your average run of the mill conspiracy theorist can use twisted logic to prove anything he desires to prove.
          Reply

          Anonymous says:
          July 11, 2014 at 12:00 am

          Politicians work for the banksters who are constantly pushing for a carbon tax to save the world from alleged AGW. Up to 50% of scientists don’t buy into the falsehoods of global warming:

          http://www.americanthinker.com/2014/07/climate_change_hysteria_and_the_madness_of_crowds.html
          Reply

          1. Up to 50% of scientists don’t buy into the falsehoods of global warming:

             Dman5202, that is an absolute load of horseshit if it ever existed. The American Thinker is a right wing nut case publication that just makes up lies.

    2. maybe this chart will help those of you who have drank the “experts” coolaide and have fallen for the fraud. you need to wake up, figure out that the liberals/dems and un globalists want to take more of your money an freedoms with their lies about the warming which isnt’ even happening anymore, sheesh.

       

       1. Nice cherry picking…

          Most Comprehensive Paleoclimate Reconstruction Confirms Hockey Stick

          By Climate Guest Contributor By Stefan Rahmstorf , July 8, 2013 at 5:08 pm

          he past 2000 years of climate change have now been reconstructed in more detail than ever before by the PAGES 2k project. The results reveal interesting regional differences between the different continents, but also important common trends. The global average of the new reconstruction looks like a twin of the original “hockey stick”, the first such reconstruction published fifteen years ago.

          

       2. Satellites temperatures are inferred from certain radiation bandwidths, are dependent upon the analysis type used and do not directly measure surface temperature. Clouds and particles interfere, as well as the problem of separating radiation from various levels of the atmosphere.
          From Wikipedia:
          “Satellites do not measure temperature. They measure radiances in various wavelength bands, which must then be mathematically inverted to obtain indirect inferences of temperature.[1][2] The resulting temperature profiles depend on details of the methods that are used to obtain temperatures from radiances. As a result, different groups that have analyzed the satellite data have produced differing temperature datasets. Among these are the UAH dataset prepared at the University of Alabama in Huntsville and the RSS dataset prepared by Remote Sensing Systems. The satellite series is not fully homogeneous – it is constructed from a series of satellites with similar but not identical instrumentation. The sensors deteriorate over time, and corrections are necessary for orbital drift and decay. Particularly large differences between reconstructed temperature series occur at the few times when there is little temporal overlap between successive satellites, making intercalibration difficult.”

          Satellites have an even worse problem measuring ocean temperature. “There are several difficulties with satellite-based absolute SST measurements. First, in infrared remote sensing methodology the radiation emanates from the top “skin” of the ocean, approximately the top 0.01 mm or less, which may not represent the bulk temperature of the upper meter of ocean due primarily to effects of solar surface heating during the daytime, reflected radiation, as well as sensible heat loss and surface evaporation. All these factors make it somewhat difficult to compare satellite data to measurements from buoys or shipboard methods, complicating ground truth efforts.[16] Secondly, the satellite cannot look through clouds, creating a cool bias in satellite-derived SSTs within cloudy areas.”

          Satellites don’t have identical sensor systems, some do not even use infrared bands but use passive microwave systems, so comparison and combining data sets is problematical and needs to be done very carefully.

          The only accurate way to measure ocean temperature (since surface temp is only a small part of the story) is the ARGO system. This consists of 3604 independent submersible sensor systems that shuttle between 2000 m and the surface, uploading data to satellites every 10 days. They measure temperature, salinity and velocity and are spread around the world’s ocean every 3 degrees.
          http://www.argo.ucsd.edu/About_Argo.html

          So throw out those bogus satellite compilations.

       3. Stop the Indonesian Peat fires and cut global CO2 emissions by 2/3 of US CO2 emissions.

          http://www.theguardian.com/environment/2014/mar/14/fires-indonesia-highest-levels-2012-haze-emergency

          Odd that Enviromentialist never target low hanging fruit. It would cost the World about $2 Billion to put out these fires. Instead they choose to ignore them and target Industrial CO2 emissions. It would surprise me that farmers are setting these fires in order to make land available to plant crops for biofuels! If I recall correctly, the China coal steam fires also emit nearly the same CO2 emissions as the Indonesian peat fires. The US also has a coal seam fire in Pennsylvania that’s been burning for 30 years.

          Frankly, I see CO2\global warming more as a religion than actual science. Yes there are scientist researching and the earth is warming, but people have the strong opinions on both sides and neither has a responsible plan to address the problem. I fear that any change will only make the problems worse. For instance there is a lot of effort to replace fossil fuel with biomass. (Corn ethanol, biodiesel, Wood). Its absurd to cut down trees to burn for electricity or raise land for planting corn or biodiesel crops.

          Human CO2 emissions will collapse when Liquid fuel production falls as Liquid fuels is essential for sustaining economic growth. Once Liquid fuels decline the economy will also decline and CO2 emissions will fall and collapse. As the world warms, perafrost land warm to permit biomass to reclaim it increasing biomass carbon capture. Yes sea levels will rise, but they been rising for centuries. In the last two thousand years sea levels rose about two meters. Even without human intervention the planet would still continue to warm and the sea levels would still have risen just a slower pace.

          I also believe politicians are using global warming as both a power grab and away to get rich. People like Al Gore made billions selling global warming, while they continue to drive gas guzzling SUVs, and jet set all over the world emitting hundreds of tons of CO2. Hypocrites?

          That said In my opinion, the biggest threat to the planet, humans and everything else is Nuclear war and Nuclear power. As resources become constrained the Industrialized nations will become more belligerent, as the politicians make promises of economic prosperity, and the only way the can achieve this is to take resources away from someone else. Nations will go to war in order to obtain resources (primary liquid fuels). This has already begun as the USA has targeting oil rich nations in order to secure oil resources for itself and its close allies. The US is gone boldly by even starting proxy wars with Russia in Syria and the Ukraine. China has recently joined in, by targeting resources in Japan, Vietnam, and the Philippines. So far Russia has only staked its claim in the Arctic circle. Europe has remained oblivious to Peak Oil and has not yet participated in its own oil grab, but this is probably because the Europe is a pseudo providence of the US empire. All this effort to secure Oil and we have yet to officially breach Peak Oil!

          I don’t fear the damage caused by the Nuclear weapons, even an all out nuclear war. While the damage would be great it would not completely destroy the ecosystem. I do fear the damage caused by the world’s nuclear power plants. A nuclear bomb contains just a few dozen kilos of fissile material and most of the bombs will be air bursts limiting contamination. However the average nuclear plant consumes about 200 tons of fuel per year most of the fuel consumed globally is sitting in spent fuel pools only covered by water. The US has about 80,000 tons of spent fuel rods, and the world probably has about three times (~240,000 tons). Since the US has\had about 110 plants and the world has 440 plants 240Kt seems a conservative estimate. Without the infrastructure available to constantly maintain cooling, the reactors will meltdown and the spent fuel pools will catch fire releasing nuclear hell on Earth. I am not sure any vertebrates will survive the lost of the reactors and their spent fuel pools. The Loss of one large spent fuel pool can render an area of 40,000 square miles (about the size of the State of New York) uninhabitable for centuries.

          The risks cause by global warming are tiny compared to the risks of nuclear power!

       4. 17 years and 5 months? Might that be relatively close to your age?
          Do you think that there was nothing before then?
          Or that igniting that much fossil fuel over 150 years will have negligible effects?
          If you do, then I might sympathize, because it doesn’t look good for our species…
          Scary stuff all around that a lot of people don’t seem to want to contemplate…

          It is possible that the film, ‘Mad Max’, will increasingly be made to look more and more like a picnic, alongside reality.

22. Great piece from Reuters:
    http://www.reuters.com/article/2014/07/10/oil-explorers-idUSL6N0PL2VD20140710

    1. Thankx. Where are the findz! 😉

       New IAE report:

       “Global oil demand growth is forecast to accelerate to 1.4 mb/d in 2015 from 1.2 mb/d in 2014, as macroeconomic conditions improve. The estimate of 2014 demand has been trimmed by 130 kb/d to 92.7 mb/d following weaker‐than‐expected mid‐year economic data. ”

       http://www.iea.org/newsroomandevents/news/2014/july/iea-releases-oil-market-report-for-july.html

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