World Rig Count Still Falling

Baker Hughes recently published their International Rig Count. This rig count is at the end of April. It does not include the US, Canada, any of the FSU countries or inland China. The count includes both oil and gas rigs.

BH Total Intl.

Total International Rigs stood at 946 in April, down 39 for the month and down 436 rigs since the latest peak in July 2014.

BH Latin America

The Latin America rig count stood at 203 in April, down 15 rigs since April and down 204 since July 2014.

BH Europe

Europe rig count stood at 90 in April, down 6 in the last month and down 63 since July 2014.

BH Africa

African rigs seem to have leveled out. They stood at 90 in April, down only 1 from March. Africa’s latest peak was in November 2014 and they are down 52 from that point.

BH Middle East

The Middle East rig count had been holding steady but dropped 13 rigs in April. That is down 48 rigs since their latest peak in July 2014.

BH Total World

Baker Hughes’ total world rig count is just their total international rig count plus the US and Canada. It still does not include any FSU countries or inland China. The total world rig count did not start dropping until after November 2014 when it stood at 3,670 rigs. It is down 2,246 rigs since then and now stands at 1424 rigs after dropping 127 rigs in April.

BH US Monthly

The US monthly rig count dropped 41 rigs from March to April and now stands at 437. The Count stood at 1,925 in November 2014 and is down 1,488 rigs since that point.

BH Canada

The Canadian rig count is highly seasonal and usually peaks in February. The last normal February peak was in 2014 when it peaked at 626 rigs. The 2016 February peak was 211 rigs. The March to April decline was 47 rigs and their total rig count now stands at just 41 rigs.

 

 

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402 Responses to World Rig Count Still Falling

  1. The Australian public broadcaster hasn’t even discovered that US shale oil has peaked

    30/4/2016
    Australian Public Broadcaster ABC unable to look at oil statistics
    http://crudeoilpeak.info/australian-public-broadcaster-abc-unable-to-look-at-oil-statistics

    • Sydney Mike says:

      The Australian public is as a whole completely apolitical. Discussions about politics and world issues are seen as party poopers. Such a society cannot be expected to come up with a competent government or a public broadcaster that deals with important issues.

      The Australian Broadcasting Corporation sings their one or two note opera about their pet subjects without really ever digging deeper into facts. Critical thinking is not part of the Australian psyche.

  2. Oldfarmermac says:

    One thing that laymen such as myself have a hard time appreciating is that the oil industry is probably the SLOWEST moving of all the really big important industries. Even with the rig count having dropped so far, and so fast, as it has over the last year, production capacity is still more than ample to keep the market flooded with oil and thus keep the price down in the pits.

    When it comes to the price of oil going back up into “normal” territory again, the question boils down to this:

    How long will the time lag be between the drop in production capacity and the drop in the rig count, assuming the economy holds more or less steady?

    It now seems obvious enough that over the last decade, the rig count got high enough that eventually production capacity exceeded the needs of the oil market, at the prevailing HIGH prices.

    I don’t crunch numbers, but it seems to me that with IRAN and IRAQ, etc, getting back into the market, they can produce enough to offset the decline of the legacy oil fields for a year, or maybe two years at the absolute outside.

    With the world economy just about holding its own, or maybe going into recession soon, Iranian and Iraqi production may mean the price of oil won’t be going up much at all for a year or two, presuming these countries remain stable enough to keep their production up and growing. I am assuming they don’t need many rigs at all, because their wells so are superb and long lasting high producers.

    • George Kaplan says:

      And that sluggishness means that, even though the fast decline in rig counts started in December 2014 coincides with, and therefore looks like it was caused by, the OPEC meeting to maintain production and a start to rapid price fall, the decisions to cut drilling costs would have been made 6 to 12 months before, when prices were close to the highest yearly average ever seen.

      Apart from the slow response, another defining characteristic of the oil industry is group think – everybody in medium to large companies, IOCs and NOCs, gets the same data input and based on it makes virtually the same decisions at the same time. The ‘recovery’ will be influenced accordingly.

      • Guy Minton says:

        Not sure about that level of group think, although I would agree that the general press is incapable of independent thought. Unfortunately, even the CEOs read and follow that junk.
        Remember, the Chairman of EOG was threatening to outdrill the Saudis until he was replaced in late Dec., and Hamm sold all his hedges in early 2015, because he was sure oil would be back to 100 in a few months. However, no one can fire Hamm.
        In support of group think, I do remember reading something that indicated that many believed something was beginning to go amiss in July. However, December is not usually a big drilling month, anyway. Drilling units only dropped 11 in December 2014, which is not a huge drop for December.

        • clueless says:

          In the fall of 2013, on their quarterly conference call Transocean said that “there is an ill wind blowing.”

          They had to be among the earliest to see the problem.

          Hamm sold his hedges in late 2014.

    • Stavros H says:

      Yes, there is a very considerable lag-time in the global oil industry between price movements and oil production itself.

      The US rig-count is an important but minor part of the story. One of the reasons that the epic collapse in rig counts has only resulted to a substantial but relatively small fall in actual oil production is that US shale companies were already in possession of a massive inventory of drilled but uncompleted wells before the price collapse. Now, I don’t think that all of those are found in the so-called “sweet-spots” but they have gone a long way mitigating the calamitous collapse of drilling itself. Nevertheless, around 2/3rds of the cost of an oil well is its completion, not it drilling, so the finances of the shale companies have gone from very bad to even worse.

      As for conventional oil production, my amateur knowledge leads me to believe that there is something like a 3-year lag-time between oil prices and oil production (do not take my word for it, and here I would appreciate some input from pros on this blog)

      If I am correct, the we should be seeing very substantial drops in oil production by early 2018 and through the end of this decade. The possibility of a serious oil crunch down the road is very real.

      The only way that the global economy can be adequately supplied with oil and without a massive shortage of crude down the road, will be if the GCC + Iran/Iraq + Russia are as low cost producers as I think they are. Up until now, these producers have held up remarkably well (despite the fact that some of them are really short on capital) and I expect them to keep doing so. Everyone else will see production declines (with the possible exception of Libya)

      • One of the reasons that the epic collapse in rig counts has only resulted to a substantial but relatively small fall in actual oil production is that US shale companies were already in possession of a massive inventory of drilled but uncompleted wells before the price collapse.

        “Substantial but relatively small” is a contradiction in terms. In truth the decline has been substantial but definitely not small. The decline in the 7 shale production areas, since peaking in March 2015 has fallen by 671,000 barrels per day or 12.2 percent. That is definitely not small but it is definitely substantial.

        Well, at least you got it half right.

        • Stavros Hadjiyiannis says:

          Yes I could have worded that more precisely. My point was that the decline in oil production we have seen up to now in the shale patch seems to be less than what one would expect from looking at the monstrous collapse in the rig count. The reason for this is that the oil companies active across the shale patch have been running through their inventory of previously drilled but uncompleted wells. That was the point I was trying to make.

        • Dennis Coyne says:

          Hi Ron,

          If we pay attention to data rather than the DPR model (which is not very good), we only have tight oil data through March 2016.

          See
          http://www.eia.gov/energy_in_brief/article/shale_in_the_united_states.cfm#tightoil

          Based on that data, from the peak in March 2015 US tight oil has declined by 411 kb/d, which is 9.2%. Based on Dean’s estimate, my guess is that the decline may have been less than this because the EIA is overestimating the decline in Texas output (if Dean’s estimate is more accurate as I suspect).

          Also note that the EIA thinks that the Eagle Ford has declined 393 kb/d since the peak in March 2015 accounting for 96% of the overall decline in tight oil output from March 2015 to March 2016.

          Based on Dean’s data and data shared with me by Enno Peters, I think the Eagle Ford output in March 2016 may be as much as 100 kb/d higher than the EIA estimates. If any other estimates are inaccurate by the EIA we will assume that over and under estimates cancel each other so that the tight oil estimate minus Eagle Ford is roughly correct.

          In that case the decline might be only 311 kb/d or a 7% decline in US tight oil output from March 2015 to March 2016.

        • AlexS says:

          I agree with Stavros that “the decline in oil production we have seen up to now in the shale patch seems to be less than what one would expect from looking at the monstrous collapse in the rig count.”

          Just one point: 1500-1600 oil rigs were needed to increase production by 1 mb/d annually and to offset sharp declines in existing wells output.

          Much less rigs are needed to maintain slightly declining LTO output, especially as:
          (1) with less new wells drilled, the overall decline rates for shale plays is not as steep as in 2012-2014;
          (2) newer rigs and pad drilling has allowed to sharply reduce average drilling time;
          (3) almost all new wells are drilled in the sweet spots.

          Therefore, relatively slow declines in LTO production can be explained not only by completion of the DUCs

          I also agree with Dennis that DPR data is not reliable. The monthly estimates of LTO production currently published by the EIA (based on DrillingInfo statistics) are much better, but they also may slightly underestimate output volumes.

          Thus, the EIA/DI numbers show that the bulk of the decline in LTO output in 12-months period between March 2015 and March 2016 was in the Eagle Ford.
          Such steep decline rates in EFS compared with the Bakken are difficult to explain.

          Change in the U.S. LTO production: March 2016 vs. March 2015 (kb/d)
          Source: http://www.eia.gov/energy_in_brief/article/shale_in_the_united_states.cfm

          • Enno Peters says:

            Alex,

            Thanks for your long list of great contributions here in the last few days again.

            The subject of recent shale production & decline is not crystal clear due to lag times and revisions. Still, based on preliminary data I do have a somewhat different take on it than you.

            1. Shale decline
            Below you’ll see a picture that shows on a monthly basis the decline (legacy) & growth (first 2 months of production shown in blue) of oil production from all the 31000+ shale wells in my dataset, with data until Dec. It does show that recent monthly declines are very high.

            These high declines are likely to become gradually less indeed, but currently the monthly drops are still steep due to the large number of wells completed in 2014 & (even in) 2015, and the % increase in faster-declining (especially non-Bakken) wells.

            2. EF vs Bakken
            I have the impression that well costs in the Eagle Ford & Bakken are not radically different. However, EF wells seem to peak higher, and then decline much faster than Bakken wells : by year 5 a typical EF horizontal well is doing 20 bo/d, while a Bakken well is still above 50 bo/d, therefore also leading to a much lower UR. By “grouping wells by basin”, you can see these differences (even if you remove the excellent Bakken wells from 2008/9).

            That gives me the impression that for EF wells it is even much more important to be completed in a higher price environment, and that gives credence to the idea that recently indeed fewer EF wells have been completed. That together with the faster declines in the Eagle Ford, could explain the larger drop in production there.

            To be sure, for me it’s also too early to say whether this take is indeed correct, due to the possibility of major TRRC revisions. But it would make me less surprised if the EIA got this right.

            I do agree with you that fewer rigs are needed to maintain production, as rig efficiency has increased way more than well productivity.

            • AlexS says:

              Enno,

              thanks for very important clarification.

              If I understand you correctly, your calculations show that higher decline rates of individual new wells offset the lower share of new wells in total LTO output?

              As regards well costs for the EFS and the Bakken, the former are indeed less expensive (Bakken is deeper).

              I’m not sure if individual company guidance is representative,
              but here are drilling & completion cost numbers provided by QEP Resources and Encana:
              QEP – Bakken (South Antelope): $6.1 mn
              QEP – Permian (Spraberry):$5.9 mn
              Encana – Eagle Ford: $3.5 mn

              • Enno Peters says:

                Alex,

                I have not really calculated anything (except for the estimation of Texas well profiles, but I think that can be done quite reasonably), so the graph above is just the result of looking at the contribution from all the months of production for all wells. And indeed we can see that the total decline so far has hardly gone down. Also, we can see that recent wells in all basins together peak a little higher, and then decline more sharply, so that indeed is the explanation in my mind.

                Regarding well costs : your numbers for Encana highly surprise me. I didn’t check them, but I did check what EOG has paid for the average net well during the last 3 years (based on cash flow statements), and it was just over $8m, of which most were drilled in the EF. Encana’s wells are even doing a bit better than the average EOG well in the EF, so are they really so much better than EOG?

                If I understood Mike correctly, his impression is also that horizontal EF wells are typically > $8m.

                • AlexS says:

                  Enno,

                  capex in cash flow statement includes items not directly related to drilling and completion costs

              • Enno Peters says:

                Alex,

                I just looked at Encana’s latest presentation. Indeed I find the $3.5m well cost for the Eagle Ford there.

                But a few remarks:
                1. They mention that the average D&C cost in 2015 was still $6.3m, in the past probably higher
                2. There is a * that shows that all these costs are normalized to 5000 feet laterals, so in practice these costs were higher. Aren’t typical laterals in the EF also not close to 9000, like in the Bakken?
                3. I have the impression that certain typical well CAPEX is not included when these D&C costs are mentioned (e.g. the installation of pumps later on?). Often the claimed well costs are quite a bit lower than the ones you can calculate yourselves based on the CF statement (a little more complex in Encana’s case, as they are active in many basins).

                So all in all, probably they are a bit cheaper in the EF due to lower depth, but maybe < 20%?

                • Dennis Coyne says:

                  Hi Enno,

                  The laterals in the EF are about half the Bakken, around 5000 feet. For EOG they use 8400 feet for their average Bakken well and 5300 feet for EF, this probably varies from company to company.

                  In 2015 EOG claims average well costs (normalized to 8400′ in Bakken and 5300′ in EF) were 7.2 M in Bakken and 5.7M in Eagle Ford (EF).

  3. R DesRoches says:

    It looks like this summer will see a big change in S/D.

    In Q3 demand goes up by about 1.5 million barrels a day as fir example the Saudis U.S. oil to generate power for A/C. Demand stays at this level thru Q4.

    The decline of US tight oil production has been masked by offshore oil projects coming on line. That addition is about done, and the 1.5 million barrels per day per year decline rate will take effect.

    We are at the point where decline rates will pick up speed.

    The fires in Canada has shut in about 1 million a day in production. How long it will take to come back on line is still unknown.

    Last week we had the Saudi oil minster fired. Is this a change in the Saudis holding down prices by over producing.

    IMO prices may go up faster than many expect.

    • Oldfarmermac says:

      I have read in the last couple of days that most or nearly all the senior economic ministry leaders have been sacked or transferred, along with the oil minister, who is EIGHTY years old.

      The new guy what’s his name is consolidating his power. He may be reckless and lacking in good judgement overall, but he sure does seem to have it in mind to do what he can to start diversifying the Saudi economy.

      In my estimation, saving the Saudi economy and the country itself is just about a hopeless proposition, over the long run, but he might be able to diversify enough to stretch out the oil endowment a generation or so.

      There is nothing underpinning the Saudi economy except oil, and once it’s gone, there is no reason for anybody to want to live there or go there, except as a tourist or scientist. Unless the birth rate crashes hard and fast, there will eventually be a mass exodus of people out of the country, because there is no way in hell for them to support themselves once the oil is gone.

      They aren’t going to turn into a nation of German engineers. They have the brain power, but they hire everything done, and look down on actually WORKING. By the time the NECESSITY of working becomes obvious, it will be too late for them to change their ways.

      The rich ones, the royal family and those closely connected to them, will be able to emigrate.

      As for the rest of them………. Damned few countries in a world growing short of resources are going to be willing to accept more than handful of immigrants without useful skills who speak only a foreign language and follow a religion strongly associated with social unrest.

      • Cowboy Lutrell says:

        Oldfarmermac wrote:

        “[Saudi Arabians] have the brain power, but they hire everything done, and look down on actually WORKING.”

        Where did you get that Saudi Arabians “have the brain power”? The average IQ in Saudi Arabia is only 84.

        In the absence of abundant and highly desirable natural resources, no nation has ever been able to get wealthy with such low levels of average intellectual capacity.

        • Survivalist says:

          KSA has a very poor education system Mac. I guess it depends on what you mean by ‘have the brain power’.

          Here’s a video to a book review of ‘On Saudi Arabia.

          https://youtu.be/9tHwvZ9XDLU

          I believe they have neither the training nor education, as well as the culture, to engage in meaning self reflection and improve themselves as a society so that they may mitigate future challenges as an intact society.

          • Doug Leighton says:

            Well, Saudi women are sub-human which may decrease the country’s average IQ.

          • Stavros H says:

            KSA and the rest of the GCC have it made, despite their lack of civilizational attainment. Their oil is not running out, and on top of that they possess massive amounts of natural gas as well that will come more and more into play as the century drags on.

            What can bring KSA down though, is their exploding population, or sooner than that, an ill-conceived invasion of Syria without US cover. Russia & Iran will be rubbing their hands if that even occured.

            • Toolpush says:

              Stavros,

              I think you need to tell the leaders of Saudi, Kuwait and the UAE where all those “massive amounts of natural gas” are hiding, because currently these 3 large oil producers are all importing Natural gas by pipeline or LNG, and/or burning oil instead.
              They would all love to be burning Nat gas, and exporting all the oil for cash Unfortunately, after spending a heap of time and effort, the three of them are all gas starved. Not sure, but I think Iraq can be included in there as well.

              • Stavros H says:

                Very good question.

                According to the CIA, KSA’s natural gas reserves are the 6th largest on the planet, at 8.6T cubic meters. The UAE’s reserves are the 17th largest in the world (almost as big as Norway’s) Kuwait’s are the 20th largest. Put together, these three states are in possession of the world’s 5th largest natural gas reserves, behind only Russia, Iran, Qatar & Turkmenistan. That is a massive amount by any standard.

                In terms of production, KSA is the 8th largest producer in the world (almost as big as Norway & China) UAE are the 17th largest largest gas producer in the world (as big as Mexico)

                Some overview of KSA & nat gas. Apparently KSA does not import or export any gas: https://www.worldenergy.org/data/resources/country/saudi-arabia/gas/

                • Toolpush says:

                  Just a quick look at Kuwait.

                  http://af.reuters.com/article/commoditiesNews/idAFL8N13T1RJ20151204http://af.reuters.com/article/commoditiesNews/idAFL8N13T1RJ20151204

                  ROME Dec 4 (Reuters) – Kuwait liquefied natural gas (LNG) imports are on track to rise around 17 percent to 3 million tonnes in 2015, boosted by the fuel’s increased competitiveness with gas oil, an executive from Kuwait Petroleum Corporation (KPC) said on Friday.

                  The Gulf Arab state imported around 2.5 million tonnes in 2014 via its floating import terminal, which it leases for the peak energy demand months from March to November, with an option to extend over additional months.

                  Your reference
                  https://www.worldenergy.org/data/resources/country/united-arab-emirates/gas/

                  Despite its large endowment, the UAE became a net importer of natural gas earlier this decade.

                  To help meet the growing demand for natural gas, the UAE boosted imports from neighbouring Qatar via the Dolphin Gas Project’s export pipeline. The pipeline runs from Qatar to Oman via the UAE, and is one of the principal points of entry for UAE natural gas imports.

                  So the large Nat Gas reserves of UAE, Kuwait and Saudi, are mainly tied up in associated gas, which will be produced along with oil production. UAE has a large gas re-injection program along with high Sulfur content.
                  Once all the oil is considered all gone, the fields will be depressurized and the remainder of the gas will be produced. I don’t think any of the 3 counties will be depressurizing their big oilfields soon.
                  The other caveat is, we generally don’t trust the oil numbers out of these countries, so how much faith can we put in their Nat Gas numbers?
                  They seem to have a real problem producing enough gas just for their own needs, from these “massive” Nat gas reserves! So really how big are these Nat Gas reserves that they state?

                  • Stavros H says:

                    Maybe you are correct, I am not really in a position to argue against what you are saying. But my intuition would be that all big oil producers can also be big gas producers (while not all big gas producers can be big oil producers) For example, the US & Russia have been massive oil producers for several decades on end and also massive gas producers as well. Norway has been significant on both resources as well. It would seem truly bizarre to me if a region so fantastically rich in oil can be poor (or middle of the road) when it comes to natural gas (which is by and large much more plentiful than oil around the world)

                    There may be some particular geologic & geographic characteristics in those 3 countries that hinder the development of natural gas production at the same time as oil production (which is I guess what those reports are alluding to) I really don’t know.

      • me says:

        Oil has turned the rulers of the gulf countries into helpless idiots. A friend of mine was the Polisario ambassador to the gulf, and he said there was simply nobody to talk to about the future of the region. He has some more colorful language, but I’ll spare you. Mass emigration would begin with the foreign workers, who actually know how to make the country work.

    • Guy Minton says:

      Last I did research on Saudi oil fields, the mainland was mostly drilled up. The big fields they were going to pursue existed off the coast into the Persian/Saudi Sea. They looked pretty, with connecting roads/pipelines. Horizontals into the sea. I can’t imagine that being an 8 dollar a barrel cost. I don’t give much credence in the popular opinion that either Iran or the Saudis can ramp up production in a short time frame to keep oil prices lower for longer. Matter of fact, I really doubt that any of the lower for longer proponents have a grip on reality.

      • Stavros H says:

        Iran & Iraq have been increasing their production relentlessly in recent months. Iraq is up 4.31m per day, while Iran has boosted production up to 3.31m per day. It’s all on oilprice.com.

        Both Iran & Iraq are oil behemoths that will play a massive role in the coming decades in supplying the world with black gold.

        • AlexS says:

          According to the IEA Oil Market Report, Iran’s oil production reached 3.56 in April. The growth rates were faster than most experts had expected.

          from the IEA OMR, may 2016:

          “OPEC crude output rose by 330 kb/d in April to 32.76 mb/d as a 300 kb/d jump in Iranian flows and a boost in Iraqi and UAE supplies more than offset outages in Kuwait and Nigeria. Saudi output was steady near 10.2 mb/d. Iranian supply rose to 3.56 mb/d, a level last hit in November 2011 before sanctions were tightened.”

          “For Iran, oil production in April was close to 3.6 mb/d, a level last achieved in November 2011. Even more important for global markets, oil exports reached 2 mb/d, a dramatic increase from the 1.4 mb/d seen in March.”

          • Amatoori says:

            Hi

            Been trying to find answer to this question:
            How much of the boost of Iran output come from old storage verses real production output? If that number has old storage in it we will probably see a drop in output in the near future. The question is how much.

            • AlexS says:

              sales from oil storage are reflected in exports numbers, but not in production numbers.

              Iran indeed has recently indicated that they have already sold all their inventories of crude oil stored in tankers, but they still have large volumes of condensate.

          • Stavros H says:

            Exactly.

            Iran’s thunderous return to the oil markets is a proof of what I have been arguing all along, namely that Iran’s oil deposits are vast and easy (cheap) to extract.

            Remember all the “experts” in the MSM telling us that Iran would require 10s of billions of dollars in investment and lots of “western expertise & technology” to restore its oil production back to pre-sanctions levels?

            It seems that once again, the MSM in the free-world were full of bovine excrement.

    • Dennis Coyne says:

      Hi R DeRoches,

      Some expect prices won’t go up at all, some expect prices will go up to $100/b by 2018. I think we will see $60/b by July 2017 and maybe $80/b by 2018. Rising LTO output may keep oil prices from rising much more than that until 2020. That assumes there is adequate oil demand. Rising sales of EVs from 2018 to 2020 and beyond may reduce oil demand at a similar rate as oil supply falls after 2020, the rates of growth or decline in demand and supply will determine the oil price.

      There are factors that may make the oil price higher and others that suggest the reverse.

      • Opritov Alexandr says:

        Number of cars in the world: 1 100 000 000
        If 2020 will be 20 million electric vehicles
        this is 1.8% of total

        • Fred Magyar says:

          Bet you are wrong!

        • Dennis Coyne says:

          World new car sales were about 88 million in 2015, plug in vehicle (both hybrid and EV) sales were 0.55 million. If total light duty vehicle sales grow by 1% and plug in vehicle sales grow by 30% from 2016 to 2035, then plug in slaes will be 97% of total new light duty vehicle sales by 2035.

          My earlier speculation that 90% of new car sales will be plugins by 2030 would require unrealistic growth rates (about 41%/year from 2016 to 2030).
          In this still not very realistic scenario with growth rates of 30% per year until 2030, plugin sales would reach 27.5% in 2030.

          The growth rate in Worldwide plug in vehicle sales was 71%/year from 2014 to 2015 (320,713 in 2014 and 550,297 in 2015).

          Data from link below

          http://insideevs.com/monthly-plug-in-sales-scorecard/

          EV sales were very strong in China in 2015.

          • Caelan MacIntyre says:

            EV-growth doesn’t have to mean as much if people’s EV’s become stranded assets overnight as the dying so-called economy that supports them takes another writhe and convulsion.

            One day you’re bopping about the countryside in your EV without a care in the world, and the next, you’re worried about where your next meal is coming from.

            There’s little one can do with a so-called government or industry that decides it doesn’t owe you anything, is there?

        • orbit7er says:

          This is why I have been saying for a long time that the private electric car as a solution to Auto Addiction consuming 70% of US oil usage is a delusion. If the US ramped up Green Transit Rail as it did from 1942-45 it could easily cut its oil usage 10% per year not 1% as with the private car. Also ignored for millions of private electric cars is the huge infrastructure costs of deploying electric charging stations. It is a LOT easier to convert Rail to renewable electricity – the Dutch already power 50% of their Rail with renewable electricity with concrete plans to power Rail 100% with renewable energy!

          http://www.railway-technology.com/features/featuremichel-kerkhof-of-eneco-discusses-the-dutch-rail-networks-renewable-revolution-4647194/

      • R DesRoches says:

        According to the EIA productivity report LTO production is now declining at a rate of almost 1.5 million barrels a day per year.

        This high decline rate has been masked by an increase in offshore production which is coming to an end.

        The Alberta fires and the shutin of 1 million a day of production may last much longer than the market expects, and could be a
        black swan event.

        The 33% drop in international rig counts will start having a bigger impact on production in the coming year or two.

    • AlexS says:

      “Last week we had the Saudi oil minister fired. Is this a change in the Saudis holding down prices by over producing.”

      On the contrary, Saudi Arabia will try to maximize output. While the former oil minister Ali al- Naimi was willing to discuss the freeze in output, prince bin Salman has actually broken the Doha deal.

  4. Paulo says:

    This Undulating Plateau is starting to amplify. At least the inputs are. It will be noticed.

  5. Guy Minton says:

    Signed a two year extension of drilling in the small percentage of 2k acres in the Eagle Ford, lately. They drilled two of the forty or fifty wells they will eventually drill, because both will get in excess of 150k bbls the first year.
    I have now happily resigned myself to root along with the lower for longer “intellectual” discussions being promoted. Yeah, oil is going to trade in the 50 to 60 range for another three years.
    Or, better, we are swimming in oil. Going down to 20, or maybe 10! Giggle.

  6. Pingback: World Rig Count Still Falling | Energy News

  7. Oldfarmermac says:

    I just copied this out of a Bloomberg article.

    “Strategic and commercial stockpiles provide some security, but they’re a one-off. Once drawn down, they’re gone. The OECD countries have about 1.6 billion barrels of crude and refined products in government-controlled storage and almost twice that in industry stockpiles. More more than enough, in theory, to offset a three-year loss of Kuwait’s production.

    But it’s not that simple. Much of the commercial inventory is needed to keep pipelines and refineries running, so can’t be used. As well as issues of quality and location, there’s the problem of how quickly oil can be drawn from storage. In 2005, the IEA reported that government-controlled inventories could be drawn down at an initial rate of nearly 13 million barrels per day, but only for a month. By month six that falls to about 1 million barrels and by the eighth it’s a trickle (nowhere near enough to cope with a major, prolonged loss of supply.)”

    The last couple of lines are scary as hell, considering we might someday have to depend on these strategic petroleum reserves to get us thru a long lasting crisis.

    Is this article credible?
    This is the first time I have seen this claim made but otoh, I am only a layman, and not an expert in any aspect of the oil industry.

    I think maybe in the event of a real supply crisis, Uncle Sam could find ways to encourage the folks in North Dakota to giddy up pretty damned quick, with production starting to pick up a good bit in as little as a couple of months.

    This could be accomplished by declaring a national emergency and throwing money at the tight oil industry.

    • wimbi says:

      Or, we could do something sane for once, declare a national emergence, preferably about a decade ago, and throw money at solar/wind etc, which everybody in the world knows is what we are going to end up with everywhere, for the simple reason that s/w are everywhere and we know how to do it.

      And, oh by the way, we HAVE to do it. Don’t forget that little titbit so often ignored here.

      Now my own personal note. I had NO trouble and suffered no pain taking my house and car off ff’s and on to PV, I see no reason at all that everyone on my road couldn’t do the same, in the same way I did. And I see no reason my whole little town couldn’t do it too, and —-.

      Keeping in mind that it’s stupid to talk about oil shortage while at the same time gobbling diesel to haul soda pop, and mow huge empty lawns with huge empty heads sitting their fat butts on that crappy contraption that breaks down every n seconds.

      Pardon while I puke.

      • Oldfarmermac says:

        I am with you all the way on the necessity of going renewable, but it’s going to take a long time to do it.

        In the meantime, if Old Man BAU has a heart attack, or somebody murders him, the transition won’t happen, and we will slide back at least as far as the muscle power era, and even farther than that maybe. We might not even survive the crash, excepting a few small pockets of people in extremely isolated places.

        • Dennis Coyne says:

          Hi OFM,

          Wind and solar have been growing at 20% per year, if oil and other fossil fuel prices remain low then growth might slow down. The price of solar in particular has been falling quite rapidly so it is likely that the rapid growth could continue.

          This growth may keep the economy functioning, not BAU though because the energy supply and transportation will be changing.

          • Politcal Economist says:

            Dennis, while solar price has fallen rapidly, wind has not. Although solar price has fallen rapidly, I think a fair evaluation would show that it remains two/three times more expensive than coal/gas-fired electricity.

            Solar price will not fall indefinitely. In the next decade or so, we’ll find where it stabilizes.

            In any case, price is not the only constraint on renewables. I still think solar/wind will be limited to a fraction of the electricity supply in the next few decades because of intermittency. If the world oil production does peak, say, around 2020, solar/wind will not be easy substitutes for liquid fuels.

            The economy will continue to function, but possibly with growing degree of malfunctioning.

            • Eulenspiegel says:

              There will be bigger investment in storage capacity – like a second Glen canyon dam behind the first one designed as pumping storage between the 2, to hold a month of energy.

              Hopefully the not too expensive fossile energy will still hold 20 years to perform these investments.

              Or cheap natrium based batteries for home use to use the photovoltaic energy at night – lithium is a rare resource and will get really expensive once the demand explodes.

              • wharf rat says:

                “There will be bigger investment in storage capacity”

                Why Used ‘Second-Life’ Electric Car Batteries Are A Clean Energy Game Changer

                major EV makers — BMW, GM, Nissan, Toyota — are now exploring how much value their EV battery has for use in the electricity storage market after that battery can no longer meet the strict requirements for powering its car. This potential second life for EV batteries is a clean energy game changer for two reasons:

                These used EV batteries hold the promise of much cheaper electricity storage for renewables than is available today.
                If used EV batteries have value, then EV makers can charge less for their cars, making them even more affordable…

                BMW has had over 18 months of testing that demonstrates its used batteries can deal with “demand response” requests from the California utility Pacific Gas & Electric. Demand response is rewarding consumers and businesses for adjusting their electricity use during peak hours (or during times when the sun isn’t shining or the wind isn’t blowing).

                Under the program, PG&E manages 100 kilowatts of demand from BMW, made up of repurposed BMW Mini E batteries in a stationary unit and a charging program for up to 100 BMW i3 vehicles.

                When PG&E alerts BMW the grid is short of electricity, BMW signals vehicles to stop charging (thereby reducing the load). If a vehicle is plugged in or the customer isn’t participating, then the array of second-life batteries is used: “Since July, PG&E has sent BMW 26 demand-response events, and the automaker delivered on all of them. Depending on the time of day, the vehicles met between 10 percent and 75 percent of the capacity needed. So in every case, the system relied on the second-life batteries.

                http://thinkprogress.org/climate/2016/05/09/3775606/used-second-life-electric-car-batteries/

            • Dennis Coyne says:

              Hi Political Economist,

              One does not need to assume PV costs will decrease forever, just until they are cheaper than coal and natural gas (with all externalities from solar, coal, and natural gas included in the cost).

              Remember that if we are going to add in the transmission lines, roads, fences, etc into the cost of wind and solar we should be sure to add those costs to the coal and natural gas as well.

              Another consideration is that natural gas output will eventually peak and if there are not alternatives, we may see energy shortages. Wind and solar are likely to be far cheaper than coal with carbon capture and storage or nuclear power in the long run.

              We cannot just flip a switch and have replacements available, the higher cost today is to ensure lower future costs when a peak is reached and the price of fossil fuels increase.

              Climate science has many uncertainties so it would be best to reduce carbon emissions as rapidly as is feasible.

              A widely dispersed set of wind turbines and PV solar interconnected by an HVDC grid will reduce the problem of intermittency.

              I assume you have seen the work of Mark Jacobsen

              https://web.stanford.edu/group/efmh/jacobson/

              It seems you believe his thinking is flawed.

              I like the idea of a cap and dividend policy as conveyed by Jim Boyce and others. No doubt you are very familiar with this, others may not be.

              http://www.dollarsandsense.org/archives/2014/0714boyce.html

              An excerpt:

              Under a policy with a carbon price, households’ purchasing power is being eroded by that big price increase. But with cap and dividend, money is coming back to them in the form of the dividend. Because income and expenditures are so skewed towards the wealthy, the mean—the average amount money coming in from the carbon price and being paid back out in equal dividends—is above the median, the amount that the “middle” person pays. So more than 50% of the people would get back more than they pay in under such a policy. As those fuel prices are going up, then, people will say, “I don’t mind because I’m getting my share back in a very visible and concrete fashion.” It’s politically fantastical, I think, to imagine that widespread and durable public support for a climate policy that increases energy prices will succeed in any other way.

            • me says:

              The cheapest form of energy by far is conservation. All governments need to do is tax the bejeezus out of consumption and the problem will go away.

              Heck you could drastically reduce car travel in the US just by changing the zoning laws that ban corner stores.

              • Paulo says:

                Amen to that!! My sister lives on Camano Island, just across from Whidby. There is a little community of houses where she lives of approx. 1,000 people. Run out of milk? They have to drive 20 minutes across the Island to a grocery store, or into Stanwood another 10 minutes. (at 55 mph) There used to be a store, but it shut down for awhile many years ago and zoning prohibits anymore re-opening.

                Where I live on Vancouver Island, even in the boonies, I am just 6 km from a store that even sells booze. When I lived in town we were 6 blocks away. Everyone is under 1/2 mile to a corner store in town; very walkable.

                It’s all about common sense. Times get tough there will be little bodegas everywhere, just like there are dope dealers everywhere. Imagine, you can walk out and by crack, but you can’t buy milk or bread.

                I use my MC to go to the local store if we ever need something, (about once per year!).

              • wimbi says:

                Cheapest BY FAR, and BTW, easy. And, with local walk-to stores, you actually get to know your neighbors, which might be vitally important. Sometimes, you get to learn one thing or another that’s actually useful-interesting by talking with people.

              • Dennis Coyne says:

                To me, Paulo, and Wimbi,

                I agree 100%, conservation, and walkable neighborhoods/better urban/suburban design are as important or more important than ramping up alternative energy and transportation. We will need to implement all of these strategies to make a transition possible.

                I think it can be done, but do not believe it will be easy to accomplish, on the contrary it will be very difficult indeed.

      • Dr.Doom says:

        Pardon the interruption, but where are you planning to get the diesel fuel to make and maintain replacement parts for your solar arrays and wind farms? Turbines suffer wear and eventually the PV panels will no longer provide power. Show me the all-electric hydraulic lifts and heavy-duty trucks needed for the remote sites, not to mention offshore installations. Also, the all-electric factories that make the replacement parts. You’re dealing with FF “hamburger helper” that goes away when the FF goes away. Try to see the big picture.

        • wimbi says:

          Please read what I wrote. Does that comment about diesel hauling soda pop have any relevance to your question?

          And all that about mining trucks and etc. Answered a thousand times. ALL that stuff can go just fine on electricity, and solar/wind makes electricity, far more than it took to make the panels/turbines in the first place. Go ask NREL.
          I SAY NO MORE.
          may I rest in peace.

          • Fred Magyar says:

            Try to see the big picture.

            Based on your comment you are having a difficult time with that aren’t you?
            You really need to expand your horizons and educate yourself about the possibilities. There is nothing in the laws of physics that says fossil fuels are necessary for civilization.

            Granted the current population overshoot based on fossil fuel agriculture will probably suffer a major correction but that is the consequence of overshoot.

            If humans don’t survive then something else will!

          • Fred Magyar says:

            Please read what I wrote. Does that comment about diesel hauling soda pop have any relevance to your question?

            Given that there are over 1500 different kinds of soda pop in the US alone and every single one of them is part of our non negotiable lifestyles and the only way to transport them is by diesel powered trucks therefore we must conclude there is no way for civilization to exist in the USA post fossil fuels. BURP!

            As for the rest of the world…
            https://en.wikipedia.org/wiki/List_of_soft_drinks_by_country

            I think I’d like to try this one! 🙂

            From Vanuatu
            Lava Cola – soft drink containing kava extracts, marketed for its relaxing properties and described as an “anti-energy drink”

            I have to wonder if that was a typo and it was supposed to be anti-aging drink but maybe anti energy works just as well.

          • kid4 says:

            It’s not true, or, in other words, it’s a lie that “all that stuff can go just fine on electricity”. Educate yourself. Try this: http://sunweber.blogspot.be/2011/01/energy-in-real-world.html

            • Fred Magyar says:

              Same O same O! blah blah blah! That is NOT education and it totally lacks any imagination to do things differently.

              So how did industrial civilization arise? BTW, the devices used to power industrial civilization are not renewable either. Nor are they green or sustainable. As for oak trees and horses they could go extinct as could we if we continue to burn fossil fuels!

              And for the love of SKY Daddy please don’t use the word ‘GREEN’ unless you are referring to Kermit the frog! We aren’t on Sesame street. If you want to argue your points do it with math and science not some political BS!

            • Caelan MacIntyre says:

              Lots is possible and feasible until we put the human into the equation…
              Add to that, the size of its population currently inhabiting this planet and a lot of possibilities just plain crash-and-burn.

              Now, I am not talking about crashing-and-burning casually, either, but seriously crashing-and-burning.

              You just can’t take an essentially tribal small-scale species and pop it in the middle of the fundamental cognitive dissonance that are the vast arrays of already-dubious large-scale centralized systems of various sorts and expect awesome results, unless by awesome, we mean the shock-and-awe kinds.

              And therein lies another side to this problem; typically, humans simply not thinking these kinds of things through, perhaps in part because their thoughts are borne of small-scale tribal wiring and evolution including a sense of a planet that can support their refuse because it was all natural and limited at one time…

              Throwing a few thousand apples over the shoulder is very different from throwing a few million or billion batteries over the shoulder.
              Kicking up dusty earth with a few kicks of a few hundred human feet is very different than kicking up the dust of a large-scale mining operation.
              (Landfills? Nuclear waste? Sewage? Burning millions of barrels of fossil fuels? Industrial pesticide spraying? Industrial waste? Parking-lots? Oil Sands? Plastic in the sea? Etc.? How many planets have we got?)

              These are not scales and differences in kind that humans typically think about or appreciate.

              • Fred Magyar says:

                These are not scales and differences in kind that humans typically think about or appreciate.

                Caelan, quite a few people, especially on this site do, think about and very much appreciate all of the above.

                While there are absolutely no guarantees as to how things are going to unfold I am going to reserve my final judgement until after the fat lady sings.

                It ain’t over till it’s over! Just between the advances in AI, genetic modification of organisms and the creation of artificial life forms I think we will see quite a few interesting developments. Some good some bad… However the changes are coming very fast and disruptions are happening in all fields all over the world.

                Yogi of course is as right as ever! 🙂

                The planet is fine! It’s the people that are fucked
                George Carlin

                Just try not to build your home on the San Andreas Fault…
                Cheers!

                Edit: Right on cue this just in:
                http://www.ncbi.nlm.nih.gov/pubmed/26013580

                Angew Chem Int Ed Engl. 2015 Jun 26;54(27):7900-4. doi: 10.1002/anie.201412202. Epub 2015 May 26.
                An Efficient Halogen-Free Electrolyte for Use in Rechargeable Magnesium Batteries.
                Tutusaus O1, Mohtadi R2, Arthur TS1, Mizuno F1, Nelson EG1,3, Sevryugina YV4.
                Author information
                Abstract
                Unlocking the full potential of rechargeable magnesium batteries has been partially hindered by the reliance on chloride-based complex systems. Despite the high anodic stability of these electrolytes, they are corrosive toward metallic battery components, which reduce their practical electrochemical window. Following on our new design concept involving boron cluster anions, monocarborane CB11H12(-) produced the first halogen-free, simple-type Mg salt that is compatible with Mg metal and displays an oxidative stability surpassing that of ether solvents. Owing to its inertness and non-corrosive nature, the Mg(CB11H12)2/tetraglyme (MMC/G4) electrolyte system permits standardized methods of high-voltage cathode testing that uses a typical coin cell. This achievement is a turning point in the research and development of Mg electrolytes that has deep implications on realizing practical rechargeable Mg batteries.
                © 2015 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim.

                • Caelan MacIntyre says:

                  Are you being sarcastic, Fred?

                  We both know that some lab research finally makes it into the real world, only to be misunderstood, misinterpreted, misimplemented and mismanaged by ‘ours truly’.

                  Naturally, reality has a different idea of and for lab results.

                  “Just between the advances in AI, genetic modification of organisms…” ~ Fred Magyar

                  We already have it: It’s called humanity and genetic pollution, respectively. Why reinvent the wheel and make a very bad, practically unworkable copy of it to boot? Because ‘we’ can? Who can? And why?

                  Technology is hardly ‘answered’ and is often just thrown out for its own sake or for the sake of some small elite minority.

                  If we want it to work (better), it needs, at the very least, democratic input and a strong sense of how it needs to work in the real world– for everyone and everything.

                  This also means of course, democratic/equal ownership and control of business-as-usual and ‘government’-as-usual.

                  • Fred Magyar says:

                    CRISPR-cas9

                  • Dennis Coyne says:

                    Hi Caelan,

                    How do we get to equal ownership?

                    This might have existed in some places 30,000 years ago, though my guess is that women were not treated as equals (nor are they today, but I assert their position is likely better than during prehistory.)

                  • Caelan MacIntyre says:

                    “How do we get to equal ownership?” ~ Dennis Coyne

                    We love ourselves to it.
                    Failing that, maybe someone who knows better can open the fridge and look in the CRISPR for something to ‘take out’.

                    (Maybe Trump will know of a good candidate in that regard.)

                    I Am The Virus
                    (Ignore the music if you wish and simply follow the ‘bouncing bean’. Or bring the whole family for a sing-along!)

                  • Dennis Coyne says:

                    Hi Caelan,

                    I agree that a more equal distribution of wealth is a nice idea.

                    It is not clear that singing old Beatles tunes will get us there. (All you need is love, …, love is all you need, …, she loves you ya ya ya….) But one can dream.

                  • Caelan MacIntyre says:

                    Hi Dennis,

                    Just a friendly reminder that previous civilizations didn’t collapse because of a loss of oil and no PV’s for smooth transitions. So how did they?

                    Running their own brand of BAU, maybe with a few desperate BAU-based tweaks to BAU by the BAU elites, as far as it could go?

                    A loss of nurture? A loss of nature?

                    A loss of love?

                    There are dreams and then there there are sleepwalks.

                    Lennon, like many others, likely got murdered because he woke up.

                    “The point that’s being ignored here, though, is that if something’s unsustainable, sooner or later it will not be sustained. We can– each of us, individually– let go of the absurd extravagances [and hate/violence] of the industrial age deliberately, while there’s still time to do it with some measure of grace [and love/peace], or we can wait until they’re pried from our cold and stiffening fingers, but one way or another, we’re going to let go of them.” ~ John Michael Greer

                    Hate

        • Fred Magyar says:

          deleted duplicate comment

      • Fred Magyar says:

        See the link in my comment on the other thread

        http://peakoilbarrel.com/texas-update-april-2016-us-l48-os-cc-annual-decline-rate/#comment-569312

        The Oil Age is rapidly coming to an end! I for one, believe there still will be quite a bit of civilization left after it is dead and gone.

        I invite anyone who still thinks it should continue to be propped up at all costs to visit what is left of the coral reefs in my back yard. Bring your mask snorkel and fins and I’ll give you a free tour!

        Cheers!

        • Are you still dumping sewage on your reef?

          • Fred Magyar says:

            Are you still dumping sewage on your reef?

            YEP! That certainly is a still a local problem in some places, especially on the one near my home! Nothing good about that.

            However if you’re suggesting that that is what is killing the entire reef from West palm Beach all the way down to the Dry Tortugas and just about everywhere else in the world where there are coral reefs, then you are just being disingenuous!

            Anyways you forgot to mention that the sewage discharge pales in comparison to agricultural runoff from sugar plantations and even the film of oil washing into the ocean from roadways or pesticides and herbicides from peoples garden’s every time it rains. Did you know for example that sunscreen from beach goers is especially harmful to corals? Which is one reason I wear a skin when I’m out on the reef!
            https://cdhc.noaa.gov/_docs/Site%20Bulletin_Sunscreen_final.pdf

            Though right now the final straw among all the possible stressors is CO2 causing acidification and warming. And nothing you can say alters that reality!

            But I know your comment was not intended to foster any kind of constructive discussion you are just doing a little trolling!

            Cheers!

      • Stavros H says:

        Renewables are a pipe-dream.

        Nothing more than a publicity stunt, sustained by government subsidies, propaganda, false numbers and a deliberate campaign of disinformation.

        If there was any viability in so-called renewables nobody would care one iota about the Middle East, while in reality, the exact opposite is going on.

        Any country that attempts to run an economy based on wind and solar will very quickly go bankrupt. In spite of environmentalist fantasies, oil + gas + coal + nuclear are here to stay for the very long haul.

        Just google: David MacKay – A Reality Check on Renewables.

        Also: “Google engineers say renewables won’t work”

        Also: “The Folly of EU’s Energy Policy”

        http://manhattancontrarian.com/blog/2016/4/15/the-under-reported-disaster-of-renewable-energy-schemes

        renewable.50webs.com

        Or, to put it another way. If renewable energy was remotely efficient, then there would be no wars in Syria, Iraq, Yemen and Ukraine, the Pentagon’s Central Command would not be in the Middle East and NATO would not have expanded up to the Russian border.

        • Dennis Coyne says:

          Hi Stavros,

          So fossil fuels will never peak?

          Did you forget your smiley face?

          Can you suggest to us your estimate for the URR of coal, oil, and natural gas in tonnes of oil equivalent or Exajoules.

          Despite the delusions of some economists, fossil fuels are not unlimited, nor is the biosphere’s capacity to absorb the excess carbon dioxide unlimited.

          Eventually the World will need to transition to wind, solar, hydro, and geothermal. If one has delusions that nuclear material in the hands of terrorists is not a bad idea, then an expansion of nuclear power is not a smart way forward, renewables widely dispersed and interconnected will be far cheaper in the long run especially when all costs (including insurance risk, pollution, and geopolitical instability) are included in the analysis.

        • Fred Magyar says:

          EROEI of fossil fuel trending down so they are becoming more and more uneconomic. Ask the guys working the shale deposits how their finances are doing.

          EROEI of renewables trending up, wind and solar becoming more and more economically viable in most parts of the world.

          Where are you going to put your money?

        • Hickory says:

          I don’t see it that way Stavros.
          Renewables aren’t as cheap as many wish/pretend them to be, but we will find that depleting fossil fuels aren’t cheap either.
          In essence, we are transitioning to a time of much higher energy prices, be it from solar or from heavy oil, offshore wind or low grade coal, nuclear plants or oil dribbles from tapped out fields, etc

  8. Guy Minton says:

    EOG says two year lead time. Up until then, it is only slowing the decline.
    And that will be only when EOG sees the price has stabilized (at around 60 to 70) for about six months. They are the biggest Eagle Ford producer. They also hold in the Permian and Bakken.
    Because, it doesn’t matter how much capex you have to throw at it, if you don’t have enough people to run it.

  9. islandboy says:

    I cannot be alone in thinking that the current set of events is not going to end well!

    In my neck of the woods, people seem to have bought the “lower for longer” narrative hook, line and sinker. I recently had a conversation with a local used car dealer who I had gone in to ask about the market for used EVs in Japan. He repeated the idea that there is probably enough oil for another 100 years and that he thought EVs would remain a niche product with very little demand, as evidenced by the one guy who had pestered him into securing a used Nissan Leaf. He also reminded me that for many (?) people a car is not just a means of transportation but an extension of one’s self (I finished that sentence for him!).

    People are busy scurrying to and fro, with the new two month old administration focusing on growth and how to implement the increase in the income tax threshold ( from US$8,300 to $12,500) that they promised during the election campaign. Most people are tickled pink that their electricity bills are down to about half what they used to be eighteen months ago.

    My belief is that before too long, my fellow countrymen are going to be reminded why it is a really, really, really, really bad idea for an island economy to be dependent on fossil fuel imports for energy especially oil. Now, unlike back in 2008, 60 MW of new wind generating capacity is under construction to add to the current 39 MW, only 21 MW of which was available in 2008. There is also a 20 MW solar farm under construction and an undetermined amount of grid connected rooftop solar that is well over 8,344 kW, the amount I have been able to get verifiable capacity data for. The government is apparently looking at several proposals for waste to energy plants and feasibility studies have been done for additional hydro power. So, there is going to be be some renewable capacity to cushion the effects of a FF price spike but, it remains to be seen whether anybody will be able to finance renewables and EVs in the midst of another fuel price shock.

    I guess the same goes for all sorts of places, all over the world! For example, with the experience of the rapid build out of solar and offshore wind in my islands former colonial masters, the UK, will they be able to continue to justify continuing with plans to build what somebody else posted on another recent thread, “will be the most expensive object ever put together on Earth”?

    • JN2 says:

      islandboy, lowest solar PPA is $0.030 per kWh. Lowest wind PPA is $0.024 per kWh.

      The French company EDF building Hinkley Point are guaranteed $0.133 per kWh (2012 prices) , escalating to an estimated $0.172 per kWh by completion date.

      As a UK tax payer, I am not impressed. Where is capitalism when you need it? 🙂

      • Patrick R says:

        Capitalism could be great if only we could try it; but cronyism and monopoly always gets in the way…

      • Dennis Coyne says:

        Hi JN2,

        Are those solar PPA levels correct for the UK? I doubt it. Wind, possibly, though the best locations are probably near the coast and wealthy landowners (who have a great deal of power) probably object to their view being spoiled.

        • JN2 says:

          Hi DC,

          Good point. Solar PPA was for Dubai. I’m sure it could be shipped to the UK for less than 14 cents per kWh! (and still be cheaper than Hinkley Point nuclear)

          UK not great for solar but wind, yes. Sadly, hard to find per kWh numbers for UK wind PPA’s, yet alone solar…

          • Dennis Coyne says:

            Hi JN2,

            Try this

            http://www.independent.co.uk/environment/wind-power-now-the-cheapest-source-of-electricity-but-the-government-continues-to-resist-onshore-a6685326.html

            They claim onshore wind is cheaper than coal or gas at 0.085 $/kW-hr or $8.50 per MW-hr. For some reason the conservatives don’t like wind power. I would think there is plenty of transmission for existing power, the wind could just replace aging coal and nuclear power plants with some peaking natural gas plants as backup, tie them all together with an HVDC grid and disperse them north south east and west and intermittency will not be much of a problem.

            • They keep forgetting the batteries.

              • Dennis Coyne says:

                Hi Fernando,

                Batteries are not needed with dispersed wind generation highly interconnected and over built (just as is the case with fossil fuel power plants), existing peaker natural gas power plants can provide backup as could vehicle to grid as EVs ramp up. Demand management can also help. Heat the hot water and run the air conditioners when the wind is blowing and prices are low, when the wind is not blowing, prices rise (check your display at home to find the price) and for the wealthy they heat and cool when they want and for the rest of us we decide if running the AC or heating the hot water or baking the cake need to be done when electricity rates are high.

                People respond to changing prices.

                • islandboy says:

                  People respond to changing prices.

                  This just in

                  Renewables peak at 95% of German electricity demand

                  The calculations by Agora demonstrate that conventional power sources were also actively feeding into the national grid. At 11 AM they generated a total of about 11.39 GW. In general, during the whole day on Sunday, power production was surpassing consumption, resulting in negative electricity prices.

                  On Sunday, between 10 AM and 5 PM, energy prices remained negative, with the lowest of -130 €/MWh reached at 2 PM. Which means that the operators of power plants commissioned under the German renewable act EEG-2014 will not receive any compensation for the electricity generated over this period.

                  Bold mine. It will be interesting to see what the responses to these price signals are in Germany, as these kinds of situations can be expected to occur more and more frequently. It is only a matter of time before the headline will read Renewables peak at 100% of German electricity demand and then eventually, Renewables peak at over 100% of German electricity demand. The more frequently these situations occur, the greater the incentive to invest in short term (less than a day) energy storage

                • I guess they could try connecting China to Europe to avoid batteries. 😈

    • You need to build a coal plant.

      • Dennis Coyne says:

        Hi Fernando,

        The cost of a coal plant is not very cheap, natural gas as a backup is probably cheaper especially when the costs of pollution are included. Coal could be used, but for a peaking or backup type use natural gas would be preferred.

      • islandboy says:

        Okay let’s look at the long term competitive prospects for a coal plant but, first take a look at some current news:

        33.1 MW PV project wins in Jamaican renewable energy auction

        OUR selects bidder for solar facility

        The process saw the selection of Eight Rivers Energy Company Limited (EREC) as the preferred bidder to build, own and operate a 33.1 MW solar photovoltaic power-generation facility at Paradise Park, Westmoreland. The proposed price (all-in tariff) is 8.54 US cents/kWh.

        This latest OUR-managed project is the most competitive renewable energy procurement project to date and is in keeping with the trend in the reduction in the price of energy from renewable sources. This bid is significantly cheaper than the tariffs proposed for the projects which were selected from a similar competitive procurement commenced in 2012 and based on wind turbine and solar technologies. The 37MW project has so far met all its deadlines, with the evaluations being completed by the OUR on April 26, 2016 and the highest-ranked bidders being notified of the evaluation results on May 6, 2016.

        “The OUR is pleased with the proposed all-in tariff of 8.54 US cents/kWh, which we believe has set the pricing bar for future renewable projects,” said Albert Gordon, director general of the OUR

        The story at second link, which I quoted, has a comment in the comments section which starts:

        “This is encouraging but, should be cause for concern regarding investments in fossil fuel burning plants going forward. If, in 2016, solar PV can be this competitive, what will be the case in another five years or ten years time? How will fossil fuel powered plants compete when the cost of electricity from PV falls to 6 cents/kWh or 4 cents or lower? Will the cost of fuels be going down at the same rate over time?”

        On the matter of the last question, I have taken pains to point out to supporters of the construction of a coal plant in this island that, in 2008 when the price of oil peaked at $147 per barrel the price of coal also was at it’s highest. According to this 15 year price chart for Australian thermal coal, at indexmundi.com, the price hovered around $60 for the three years between April 2004 and April 2007 before rising to over $192 in July 2008, a price 3.2 times higher than the average 2004 to 2007 price. According to this 15 year chart for WTI from the same source the average price for WTI between April 2004 and April 2007 was about $58 before peaking at almost $134 in Jun 2008, a price 2.3 times higher than the $58 average from the selected period. From that, I have drawn the conclusion that using coal as a fuel instead of oil does not insulate an economy from fuel price volatility, if anything the price of coal is more volatile as shown in this 15 year chart from indexmundi.com showing the price ratio of between coal and oil.

        Before I continue I’m going to post a graphic from the following page:

        http://www.gaisma.com/en/location/kingston-jm.html

        It is a “Sun Path Diagram” for Kingston, Jamaica, showing the range of angles at which sunlight hits a horizontal surface at the location in the yellow shaded portion. The midday angle ranges along the vertical line labeled N-S so you can see it varies from a little more than 80 degrees to the north, to slightly less than 50 degrees to the south. According to data from the same page, average insolation varies from a low of 4.25 kWh/m²/day to 6.65 kWh/m²/day, average temperatures range from 25.5 to 27.2 degrees Celsius, the shortest sunrise to sunset time is 11 hrs. 20 min. and the longest is n13 hrs. 12 min.. There is no need for heating at sea level and moderately warm clothing and a blanket will suffice during the cooler months, in the hills. In my next post I will compare the data for Kingston, Jamaica with the data for Madrid, Spain.

      • islandboy says:

        Below is the Sun Path Diagram for Madrid Spain. The midday angle ranges from a little more than 70 degrees to the south, to slightly more than 25 degrees to the south. According to data from the same page, average insolation varies from a low of 1,51 kWh/m²/day to 6.89 kWh/m²/day, average temperatures range from 2.4 to 24.8 degrees Celsius, the shortest sunrise to sunset time is 10 hrs. 7 min. and the longest is 15hrs. 1 min.. Fernando, this makes me wonder if you have forgotten what the climate in the land where you were born is like. Being a tropical climate, the solar resource is good and there is no need for heating with the major non industrial load for electricity being air conditioning and refrigeration.

        If the cost of PV and storage technology continues it’s downward trend for the next ten years or so, it seems pretty likely that it will eventually be cheaper to generate electricity and store it for night time use, than to generate it using any fossil fuel. When that happens, individual utility customers will increasingly switch to solar, leaving fossil fuel generators largely as stranded assets.

        That argument is made in the following video:

        The Solar Disruption – Why Fossil Fuels and Nuclear Will be Obsolete by 2030

        I invite anybody to watch that video and then come and tell us what guarantees they would require if they were to invest in a coal plant in Jamaica. I don’t think Jamaicans will be happy if they are forced to pay costs which make a coal plant profitable when there is a less costly alternative.

        • Nice. Don’t forget Madrid gets really cloudy, and it’s got a very short day in winter time.

          The fact is that you need a coal plant in Jamaica, and you can sign a 30 year contract to get coal at a stable price. Jamaica needs 700 mw, minimum.

          • islandboy says:

            Nice. Don’t forget Madrid gets really cloudy, and it’s got a very short day in winter time.

            That is precisely what the comparison was intended to draw attention to. A resident of any temperate region, say at a latitude greater than 30 degrees, could be forgiven for thinking that solar PV cannot power modern civilization. As you get closer to the equator the nature of the solar resource changes as well as the nature of the loads. In particular, the requirements closer to and in the tropics shift to cooling during the warm months when the solar resource is good. Temperate regions have a contrasting need for heat in the winter when the solar resource is poor.

            The fact is that you need a coal plant in Jamaica, and you can sign a 30 year contract to get coal at a stable price. Jamaica needs 700 mw, minimum

            Is the supply contract signed before or after the plant is built? The only plan for a coal plant I am aware of, is one to supply electricity to an alumina refinery owned by UC Rusal, a plant that was allowed in response to threats from UC Rusal to cease operations unless electricity costs could be reduced. In the meantime current low oil prices have reduced electricity costs significantly and nothing more has been made public about plans for ports and transport from the ports to the plant, ash disposal etc. How long do you estimate it would take to plan and design the power plant, coal and waste handling facilities, get the plans approved and complete construction? If the whole process takes three years, what happens if solar is available at 5 c/kWh by the time the plant is built? What happens if ten years after the plant is completed, solar plus storage cost less than the electricity from the plant? Can it be decommissioned and sent back from whence it came?

  10. Guy Minton says:

    Texas is the biggest producer of wind power, as well as producing the most oil and gas. While I want a good price for my oil, by the same reasoning, I know it won’t last forever. Texas now produces 9% of the electricity via wind power. You can watch the large blades being constantly transported out to West Texas to plant next to the oil pumps. Old meets new for as far as the eye can see. Your price may be bad now, but wait until later, and make judgements.

  11. Toolpush says:

    http://latino.foxnews.com/latino/news/2016/05/06/leader-opposition-party-in-venezuela-assassinated/

    Leader opposition party in Venezuela assassinated

    Venezuelan politician German Mavare, leader of the opposition UNT party, died Friday after being shot in the head, an assassination that occurred in the western state of Lara, his organization said.

    Not sure what this will mean, but it doesn’t sound like it will end well.

    • Oldfarmermac says:

      The odds of a civil war in that unfortunate country just went up by fifty percent.

    • Guy Minton says:

      Read in Bloomberg that oil dropped there by 188k bbls a day the first quarter. In the same article, they said some projected a total decline by over 600k bbls for the year. Country has debt payment problems, big time. They are part of OPEC, and while the press is concentrating on what Iran’s imaginary numbers are, they fail to weigh that against what the rest of OPEC does. Only on this site will you get real numbers.

    • Mavare’s murder is a minor issue. Let me give you an overview of more significant events:

      1. Although it’s raining some, the Guri hydropower water levels remain at – 241.7 meters above mean sea level. This means power is curtailed and intense rationing continues.

      2. Maduro has initiated illegal maneuvers to arrest National Assembly deputies.

      3. Today ends the time lapse to have electoral authorities announce the next step in the ongoing recall referendum.

      4. The Supreme Court continues to issue unconstitutional rulings against the National Assembly.

      5. The government has refused to pay a large debt to city governments controlled by the opposition.

      6. Food lines continue. In some areas people are starving, eating stray dogs, cats, birds, etc.

      7. The medical system has collapsed, many old people and babies are dying. Some hospitals report they don’t have food to feed patients.

      8. Schlumberger and other service companies haven’t been paid for a while, they have curtailed or shut down activities.

      9. The supply of gasoline is dwindling.

      10. Maduro keeps insisting the recall referendum won’t put him out of power, ordered a full scale “revolt” if at any time it looks like he may be forced out.

      11. Chanel held a large parade in Havana, attended by Vin Diesel, who is filming a movie on site. Meanwhile the Raúl Castro dictatorship keeps siphoning oil and cash out of Venezuela. President Obama is happy, thinks this is all going according to his plan.

      12. It does look like oil production will continue to drop. Some of us are advocating firmer actions against the regime, including peaceful large scale protests in oil production areas. My analysis shows the key may be the closure of the roads in Maturin with a series of large scale protests. That may convince the ruling Mafia to allow the referendum vote to take place so Maduro can be removed via constitutional and peaceful means.

  12. Oldfarmermac says:

    Venezuela doesn’t even matter according to BING and GOOGLE or BBC as of 2

    Venezuela is right in our backyard, here in the USA, and ought to be at the top of the news but the coverage is pathetic. You have to go LOOKING to find anything.

    Apparently Maduro still has a some gold, and was able to sell enough recently to make the payments due on the last due date on the national debt held by other countries. Nobody who might really know is saying if the regime will be able to dodge the default bullet much longer, but if there isn’t more gold, my bet is the regime defaults.

    It seems like a safe bet that oil production will drop off quite a bit more there before it starts going up again.

    • Guy Minton says:

      It is not a preferred vacation site for the family, right now. Murder and other violent activities are WAY up. Nobody has food or medicines, or much of anything. Inflation is skyrocketing. Mostly move it down the bucket list.

    • Synapsid says:

      OFM,

      Halliburton announced the other day that they are curtailing activity in Venezuela because they aren’t being paid–I add to that, mentally, “and because of everything else.”

      This is about the same message Schlumberger sent a week or so ago.

      There isn’t much hope for increased production when the oil-service companies fold their tents and head offshore (for good reason.) Looming behind this, as Fernando has mentioned, is the loss, under Chavez, of a significant part of the expertise needed to keep PDVSA functioning at a useful level (more tents folded.) Venezuelan production has been dropping for years, and PDVSA couldn’t turn that around if democracy broke out this week and tonnes of money drifted down from the heavens.

    • aws. says:

      I was chatting with a Venezuelan colleague the other day who told me things were pretty grim for his extended family back home in Venezuela. His younger educated relatives are emigrating, if they can afford to.

      Thing are rough for his parents who don’t have the stamina to stand in multiple endless lineups for basic food supplies so they have to pay a premium on the market price. And then you have to eat the food quickly as there isn’t electricity to keep the fridge on and the food from spoiling.

      My colleague is now sending money to his parents as their pensions are now worthless.

      • Fred Magyar says:

        And then you have to eat the food quickly as there isn’t electricity to keep the fridge on and the food from spoiling.

        They should have read the writing on the wall and invested in solar panels and 12 or 24 volt DC powered refrigerators when they could still afford them. C’ est la vie!

        That’s what I’m trying to tell my friends and family in Brazil right now. If they think renewables are too expensive now, wait till their economy collapses completely. Flying to Disney World is still more important…

        • Do you really think Venezuelans should invest in solar panels? What are they supposed to do during the rainy season?

          • Aws. says:

            Thermal storage

            • I see, a huge tank full of hot water, enough to last 6 months?

              • Dennis Coyne says:

                Hi Fernando,

                The sun never shines during the rainy season, for 6 months,

                I have never been to Venezuela, but my guess is that the sun may shine less during the rainy season, but no sun for 6 months sounds somewhat implausible. 🙂

                Based on some quick research the insolation varies by about 30% from dry to rainy season, so you split the difference or build the solar for the rainy season and have excess energy during the dry season when more energy might be needed for AC.

                This stuff is not that hard to figure out, but Venezuela has other problems that are more pressing at the moment.

          • Fred Magyar says:

            What are they supposed to do during the rainy season?

            Uh, maybe use Hydro?

            Is everything in your world always just plain black or white?

    • It’s pretty bad. I wrote a list of items about what’s going on, but it disappeared. It’s safe to bet things are going to get worse. The Curaçao Red Cross is making contingency plans for a large contingent of boat people appearing in the near term.

      • Dennis Coyne says:

        Hi Fernando,

        Sometimes stuff goes in the trash and I have to retrieve it, not sure why.

        Maybe avoid the numbered list in the future.

  13. Guy Minton says:

    More of a question than a statement. How much is world oil production going to drop next year? And what is that going to look like for supply/demand?
    For instance, when we look back at March of last year, there was a purported glut of 2.5 million barrels.
    To the end of 2017, EIA has US dropping by about 1.6 million barrels. Rystadt has just infield drilling off of Brazil, SE Asia, and the Gulf of Mexico dropping by 1.5 million in 2017.That’s 3.1 million added to a demand increase of about 2.4 million (1.2 million in 2016 an 2017). Or, 5.5 million, which should by far outweigh any previous glut laying around still.
    But wait, isn’t there some double count in US drop and Gulf of Mexico offshore? What about the drop in other parts of the world? Canada, Nigeria, other South American? Would they, by far, outweigh any double count? Just by what I read, I see serious differences in supply demand next year. The DUCs are not going to pull us out, nor is the US shale going to don its red cape and save the world in three months like reported. Anyone finished some real research in this area, yet?

    • Brian Rose says:

      In Q1 2016 there was 800,000 bpd missing from OECD storage estimates. Half of the estimated disparity between supply and demand vanished already. Estimates predicted a glut of 1.5 mbpd and data revealed a glut much smaller.

      The markets are currently focused on Saudi Arabia saying they will increase production and Iran bringing production back on line.

      I wonder, will there be a plateau of Iranian production for a few months when shut-in capacity is fully re-instated, but before new infrastructure is installed?

      Will Saudi Arabia be able to continually increase production month after month this year?

      It seems like a combination of slow, steady declines in production from… nearly everywhere combined with the increasing potential for instability in OPECs other members and increasing demand should eventually shift market group think from worrying about increasing production to worrying about decreasing production.

      South Korea increased oil imports by 11.8% yoy. China and India saw similar increases. U.S. demand is at a record. A paradigm shift in market sentiment is all that is necessary for prices to go from timidly trading in the lower $40s to trading in the lower $50s.

      Maybe OPEC data shows Iran’s production increases are flattening. Maybe data shows global demand is continuing its expansion. Maybe Venezuela collapses into political upheaval. Maybe radically reduced global rig counts transition to production declines in numerous countries.

      A one-two punch of any of a number of likely events would lead to a sentiment shift. For now, that has not happened and markets are using “recency bias” to keep prices 20% lower than they were 12 months ago. It would not be hard to argue that oil prices should be equal to or slightly higher than in May 2015, but instead they are at a 20% discount… even though we are closer to the end of the cycle, rig counts are down, multiple producing countries have financial and political issues, and demand is growing robustly.

      Who knows how long recency bias will persist, but I’d venture to guess that within the next 6 months the sentiment will shift from “how big will the glut grow” to “where did the glut go”

  14. Longtimber says:

    Anyone need Storage?
    “Experts are baffled after a “HUGH tm” oil tanker washed up on a beach with nobody on board.
    The Tamaya 1’s position hadn’t been recorded for three weeks when it mysteriously appeared on the shores of Liberia in west Africa .
    Locals were shocked to find that there was nobody on board and immediately raised the alarm – but police didn’t respond for days.”
    http://www.mirror.co.uk/news/world-news/ghost-ship-mystery-oil-tanker-7923392

    • Adam Ash says:

      https://www.vesselfinder.com/vessels/TAMAYA1-IMO-7927178-MMSI-372509000

      ‘HUGE”? Hardly..

      Vessel TAMAYA 1 (IMO: 7927178, MMSI: 372509000) is an oil products tanker built in 1980 and currently sailing under the flag of Panama. TAMAYA 1 has 64m length overall and beam of 10m. Her gross tonnage is 922 tons.

      Looks like they turned off the power to the transponder (and probably main engines and aux) on 22 April and she has quietly drifted south to beach in Liberia.

      • Oldfarmermac says:

        Maybe getting it towed to a place where it could be sold for scrap would cost more than it would sell for so it was just abandoned.

        The ship probably suffered a major mechanical breakdown and the owners probably just had every thing valuable and easily removed taken off with the crew.

        I bet the fuel tanks and tool lockers etc were found empty.

  15. Longtimber says:

    “Freeway running thru her yard I wanna free fall out into nothin’
    Gonna leave this world for a while And I’m free, I’m free fallin'” …
    … free fallin … free fallin … Holy Canadian Smokes –
    “World Rig Count Still Fallin” performance Tom Petty @ Superbowl XLII
    https://www.youtube.com/watch?v=rqDq3eyTGck

  16. AlexS says:

    Oil discoveries slump to 60-year low
    Slowdown in exploration activity as energy companies seek to conserve cash

    The Financial Times, May 8, 2016
    https://next.ft.com/content/1a6c6032-1521-11e6-9d98-00386a18e39d

    Discoveries of new oil reserves have dropped to their lowest level for more than 60 years, pointing to potential supply shortages in the next decade.
    Oil explorers found 2.8bn barrels of crude and related liquids last year, according to IHS, a consultancy. This is the lowest annual volume recorded since 1954, reflecting a slowdown in exploration activity as hard-pressed oil companies seek to conserve cash.
    Most of the new reserves that have been found are offshore in deep water, where oilfields take an of average seven years to bring into production, so the declining rate of exploration success points to reduced supplies from the mid-2020s.
    The dwindling rate of discoveries does not mean that the world is running out of oil; in recent years most of the increase in global production has come from existing fields, not new finds, according to Wood Mackenzie, another consultancy.
    But if the rate of oil discoveries does not improve, it will create a shortfall in global supplies of about 4.5m barrels per day by 2035, Wood Mackenzie said.
    That could mean higher oil prices, and make the world more reliant on onshore oilfields where the resource base is already known, such as US shale.
    Paal Kibsgaard, chief executive of Schlumberger, the world’s largest oil services company, told analysts last month: “The magnitude of the E&P [exploration and production] investment cuts are now so severe that it can only accelerate production decline and the consequent upward movement in [the] oil price.”
    The slump in oil and gas prices since the summer of 2014 has forced deep cuts in spending across the industry. Exploration has been particularly vulnerable because it does not offer a short-term pay-off.
    ConocoPhillips is giving up offshore exploration altogether, and Chevron and other companies are cutting back sharply.
    The industry’s spending on exploring and appraising new reserves will fall from $95bn in 2014 to an expected $41bn this year, and is likely to drop again next year, according to Wood Mackenzie. There also has been a predominance of gas, rather than oil, in recent finds.
    In spite of the decline in activity, the total combined volume of oil and gas discovered last year rose slightly, but the proportion of oil dropped from about 35 per cent in 2014 to about 23 per cent in 2015.
    Bob Fryklund of IHS said: “We’ve hunted a lot for oil over the years, and now the areas that are oil-prone are fewer than the areas that are gas-prone.”

    • VK says:

      Stunning data, I reckon humanity burnt up 28 Billion barrels last year. And the replaced amount was just 10%? Peak oil is gonna hit hard when it does.

      • George Kaplan says:

        Assuming 1.5% growth required to meet BAU economic growth and 4% natural field decline rate means 80 mmbpd new production required and somehow they calculate only 4.5 mmbpd shortfall. Assuming say 2 Gb per year finds would produce at best 40 Gb total (but likely much lest as finds will decay away) which would support maybe 8 mmbpd peak plateau. The rest must be assumed from existing undeveloped finds and brownfield upgrades with reserve growth. I don’t get it.

      • Dennis Coyne says:

        Hi VK,

        Even without a lot of new discoveries there is considerable reserve growth as oil fields get developed and as oil prices increase. There will be a peak, but decline may not be very steep as long as there is enough demand to keep oil prices at $75/b or more. If C+C output remains under 80 Mb/d, a plateau or slight decline can be maintained until 2025 (with decline of less that 0.5%/year), if output is allowed to decline naturally (we don’t push too hard to maintain a plateau or increase output) we would see a gradual increase in the decline rate to about 1.5% by 2030 and the decline rate will be no more than 2%/year unless there is a severe recession.

        Adjusting to declining oil output may be difficult (if EVs don’t ramp up quickly or we do not see a rapid public transportation investment) so a recession in 2030+/- 5 years seems quite likely due to problems with the transition away from oil use in the transport sector.

        • VK says:

          Hi Dennis,

          A global recession seems imminent. The world’s major economies are all struggling. We’re already in a global profit recession, I think Bloomberg had a good article plus charts on this recently.

          Given reserve growth, improved tech & EVs, it should still be shocking that we are using up our primary energy source at a 10x faster rate than we are finding it.

          That should give us all a pause for thought and consideration as to why we even got into this mess in the first place? Does humanity, collectively, have a death wish? Are we so impervious to reason & fact? Maybe so, maybe so.

          • Dennis Coyne says:

            Hi VK,

            Oil is not our primary energy source, it is one of many energy sources.
            Based on BP data oil (C+C+NGL+biofuel) provided about 32.6% of total World primary energy consumption in 2014. It is a large source of energy, of that there is no doubt, as oil peaks and declines, its price will increase and other sources of energy will replace it and it will be used more efficiently. A combination of EVs, plugin hybrids, public transportation, car pooling, and moving to transportation as a service with AV Ubers taking people where they need to go will all reduce oil demand in the future.

            • Oil is not our primary energy source, it is one of many energy sources.

              True it is one of many sources, but oil is our primary source of energy.

            • That was the USA, this is the World. Oil is our primary source of energy.

               photo World Energy Consumption_zpsiic93snf.jpg

              • Dennis Coyne says:

                Hi Ron,

                Yes you are correct oil is the primary source of energy providing about 1/3 of primary energy. Fossil fuels produce the largest share of the total, but this will diminish over time as other forms of energy increase their share.

                My point is that the “primary” source may not continue in its top spot. In 1973 oil’s share of primary energy consumption was over 48% (the highest level from 1965 to 2014). The share has been decreasing at about 0.35% per year from 1970 to 2014 and stands at 32.6% in 2014 based on BP data. That chart is 2014 data rather than 2015 data. The fossil fuel share in 2014 fell to 86%.

                Chart with oil share of primary energy from the 2015 BP Statistical review of World Energy from 1970 to 2014.

              • Dennis Coyne says:

                Hi Ron,

                The fossil fuel share fell from 94% in 1970 to 87% in 1995 and has remained about 87% since that time. A linear trend line fit to the 1970 to 1995 data decreases at 0.32% per year, since 2007 the fossil fuel share has fallen by 1.3% or roughly 0.2% per year. A peak in oil and other fossil fuels will raise fossil fuel prices and make wind, solar, geothermal, hydro, and nuclear power more competitive and their share of primary energy will begin to increase more rapidly. Chart of fossil fuel share below using 2015 BP data.

                • Yes, I noticed in the last chart I posted, wind is at an impressive 1% while solar and biofuels are both at 0%. (I am sure that is rounded to the nearest full digit which means less than one half of one percent.)

                  For those folks who believe solar power will soon run the world, they have a ways to go.

                  • Eulenspiegel says:

                    It’s a long way to go, yes.

                    At the moment (I’m posting from Germany), wind and PV generate 21,3 GW from 57,9 GW Electricity totally generated.
                    10 years ago nobody would have taken this for possible, but’s still a long way to go.

                  • I used to think Germans were smart until I saw the way they were installing solar panels, shutting down nuclear plants, building coal plants, and driving up residential electricity rates while inviting a bunch of Africans and Muslims to invade.

                  • Till says:

                    @Fernando

                    Hey, in all newspapers is printed we have to welcome everyone “fleeing” from all over the world, otherwise we would be bad, nazi and rassistic people we are anyway because of not enough welcome culture. And in every of these news article there are big round children eyes.

                    (can contain sarcasm)

                • Dennis Coyne says:

                  Hi Ron,

                  Very true.

                  Keep in mind that from 2001 to 2014 solar output grew by 42%/year and wind output by 23%/year.
                  If we assume wind grows by 11%/year from 2015 to 2030 and solar by 25%/year from 2015 to 2030 and after that the sum of wind and solar grow by 7% per year until 2050 (same rate as oil from 1920 to 1970), the output is over 9000 Mtoe in 2050.
                  World primary energy total was 12,928 in 2014, if this grows by 1% per year from 2015 to 2050 then primary energy consumption would be 17850 Mtoe/year in 2050 and wind and solar would provide 51% of the total in this scenario. Chart below.

                  • If we assume wind grows by 11%/year…

                    You are assuming exponential growth here. Hell, you can assume anything but assuming such exponential growth is totally unrealistic. Sure, 11% is attainable for a few years but not for very long.

                    Anyway, when you are talking about solar you need to talk about storage also. You guys never seem to want to talk about storage. Batteries you know… batteries.

                    Batteries running the grid. Really?

                  • Duncan Idaho says:

                    Used Lithium Ion batteries.
                    Early 1990’s Japanese technology.
                    Something big better happen soon, as we have been stuck for a while.

                  • Dennis Coyne says:

                    Hi Ron,

                    Wind consumption grew at an exponential rate of 23%/year for 13 years from 2001 to 2014, likewise solar consumption grew for those same 13 years at 43%/year, again exponentially.

                    I suggest they grow for the next 15 years at about half the previous rate, solar is a little more than half because solar costs have been falling about 10% per year for the past 7 years.

                    Oil grew at a 6.5%/year exponential rate from 1900 to 1973. That is 73 years of exponential growth.

                  • If I had kept on growing at the same rate past adolescence i would be 30 ft tall, and the greatest NBA center ever, scoring 78 points per game, plus getting 26 rebounds per game, while dishing 3 assists per game to look selfless.

                  • Dennis Coyne says:

                    Hi Fernando,

                    Solar panels are not a biological organism, last I checked.

                    Computer sales grew from 6 million in 1984 to 40 million in 1994 and to 120 million in 2001 based on data from link below.

                    http://arstechnica.com/features/2005/12/total-share/1/

                    So from 1984 to 1994 (10 years) growth in PC sales was 21%/year and from 1994 to 2001 (7 years) the growth rate was 17%/year. over the entire 17 year period the average growth rate in yearly PC sales was 19.3%.

                    Solar panels might be closer to this type of growth rate over the next 15 years.

                    Also the solar output would be cumulative because the panels last for 30 years rather than becoming obsolete (like personal computers). As long as their is sufficient demand, the production of PV solar could ramp up as fast as personal computers have already done in the past.

                    The growth in solar output is cumulative and if sales of solar PV follows the path of PC sales (19% increase per year) for 16 years, then solar output would grow by 33% per year for 7 years and then slow to 20% per year for the next 8 years.

                    My initial guess of 25%/year is actually conservative relative to this scenario.

    • GoneFishing says:

      All of the predictions about reduced oil production being a problem depend upon the assumption that there will be oil demand in the future.

      • Dennis Coyne says:

        Why would there be reduced demand for oil in the future?

        • Hickory says:

          I can see a reason for decreased oil demand- that being a hard deep global recession (depression). Imagine 2008-9, without monetary easing/stimulus, and starting from a more tenuous position. Severe unemployment in a widespread distribution, sparing few countries. Real contraction in global GDP-over 5 % for 3 yrs in a row. Major country defaults. Cap-ex projects canceled around the world. Protectionism and trade wars.
          I sure hope it doesn’t happen, but I think that the chances are, who knows, considerable at least.
          What would be the trigger- I certainly don’t know, but I see this kind of scenario as a symptom of overshoot, and of very poor decision making on a collective basis- things like frivolous use of resources, accumulating massive debt on non-essential projects (think football stadiums rather than mass transit), and basically just living like there is no tomorrow.
          Energy shortage will be a big part of this scenario (from lack of spending and depletion combined), but so will loss of order. Many places will feel like a failed state. Its hard to a get a failed state back into a productive, cohesive mode, which will slow down any chance of a quick stabilization.

          • Greenbub says:

            Seems like a global recession/depression would cause an even bigger drop in supply than in demand. All those countries teetering on the oil production edge would fail and even KSA’s cute little maneuvers might not save them. Cap-ex is already cut, cut the rest and where are we in a couple of years? Doom-o-philiacs rejoice!

          • Dennis Coyne says:

            Hi Hickory,

            Yes a recession I can see.

            I cannot see nation states reacting in the way many nations did during the 1930s, we know now that the market is not self correcting over the short to medium term in a financial crisis, Keynes explained very clearly why this is true.

            Hopefully economists will not forget the lessons of the past and we have the clear lesson of Europe in the recent crisis where poor policies were chosen to the detriment of the citizens of Europe, hopefully they won’t double down in the next crisis.

            Monetary policy is ineffective in these types of crises, fiscal policy is what is needed, either more government spending less taxation or some of both (perhaps in equal measure) as a compromise.

            Reducing government deficits during an economic crisis is simply a recipe for a severe recession or depression, we learned this the hard way in 1930-1933.

            • Hickory says:

              I have no ‘faith’ that governments will use apply fiscal policy wisely, or in a timely fashion. More likely just the opposite. [I also have no faith that accumulated debt will be wisely spent.]

              The scenario I was painting was not a prediction, rather just a painting a picture of how oil demand (and supply) could significantly drop. I do believe it could happen, and any month this process could start.

              • Dennis Coyne says:

                Hi Hickory,

                It would be better if the money were spent wisely and some of it may be. What is wise and what is folly is not often clear in the present. The important thing is that money is spent to keep people employed.

                At some point it will become clear to even the likes of Daniel Yergin and company that oil output cannot continue to remain on a plateau (or increase) forever.

                When that point is reached, energy investment might be somewhat more wise.

                I share your lack of faith that the government will allocate resources wisely, the fiscal stimulus should only be used in times of severe economic distress.

                Also if you do not like government spending, taxes can be reduced so that private spending is increased. This works best if the tax cuts are given to low and middle income families because it will have little effect on the spending of the wealthy, the money will simply go to the bank accounts of the wealthy and have little effect on aggregate demand. Also business taxes could be cut to zero in return for taxing dividends and capital gains as ordinary income.

                If taxes for low and middle income families are cut to zero and it is not enough to get the economy “jump started”, government spending on roads, bridges, public transportation, railroads, HVDC grid, education and R+D would seem a wise choice.

                • Hickory says:

                  Agreed. And this kind of thinking/policy is what we should be doing now, but it will not avoid, or get us out of, a big crisis like the one I was describing in response to your question about what could make oil demand fall.
                  Perhaps good solid fiscal and monetary policy over the past 50 years could have softened the blow of massive population overshoot, but we didn’t have much of that at all in the world.

                  As an aside- the richest 68 men (mostly men) in the world have as much wealth as the poorest 3,600,000,000 Obscene.

                  • Dennis Coyne says:

                    Hi Hickory,

                    I am not so sure that the big crisis that you foresee will not respond to proper policy, especially fiscal policy. If it does not we may see populist policies be enacted to reduce income inequality (through very progressive taxation and elimination of tax breaks for dividends and capital gains) as was the case in the US during the Great Depression, policies to improve urban design, make homes more energy efficient, building out public transportation and an HVDC grid are all possibilities for how a fiscal stimulus could be spent wisely.

                    A cap and dividend carbon reduction plan could also be put in place which might spur a more rapid transition.

                    The past is past all we can do is learn from mistakes and try to do better going forward.

        • GoneFishing says:

          Are you being sarcastic Dennis? If so, good one.
          If not, then because most transport was converted to non-oil energy sources and the political push to reduce carbon emissions took hold.
          Think of the demand for vacuum tubes in radios and TV’s. Not much anymore.
          A better, more efficient technology was devised that became cheaper over time.
          No more 300 volt transformers and radios and TV’s that were heaters too.

          Also, some people think that oil is in limited supply and will have greatly reduced production in the future. You would be surprised how quickly demand will fall when you can’t get the stuff. People will be lining up for any alternative available and finding ways around needing it.

          • Dennis Coyne says:

            Hi Gonefishishing,

            I was just asking because their are two very different views of why demand might fall. Either of the scenarios (Great Depression or rapid transition to alternative energy and transportation along with energy conservation and better urban design) might come to pass.

            In fact both things may occur and I think it likely the quantity of demand for oil and other fossil fuels will fall, this has to be true due to depletion of a limited resource at some point in the future.

            Of course we do not know when this will occur, perhaps it was 2015 for C+C, if oil prices rise to $100/b and a new peak is not reached by 2020, then 2015 is likely to be the peak in World C+C output. All fossil fuel energy output is likely to peak before 2030. My best guess is 2025 unless the energy transition happens more quickly than I foresee (I hope it does.)

            • GoneFishing says:

              Once the people and politicians see that their precious way of life is in jeopardy, the transistion will occur as rapidly as possible. How much harm this will do is unknown. Instead of transistion really taking hold last century, we finally see some action in the second decade of the 21st century. That means several decades were partly wasted. Let’s try and not waste the rest. We need to pry loose or work around the barnacles stuck on BAU.
              Well, off to work in the gardens.

              • Dennis Coyne says:

                Hi Gone fishing,

                We are on the same page. Time was wasted, I agree.

                Hopefully we put it in overdrive and get this transition done. It will require a sense of urgency that so far is not apparent. Maybe an oil crisis in 2018 and a big spike in oil prices will get people’s attention, by 2022 when the decline in oil output is apparent (even to the willfully blind) we may really get some traction.

  17. aws. says:

    Sense and Sensitivity: Maximising Value with a 2D Portfolio

    Carbon Tracker Initiative, May 2016

    Carbon sensitivity

    Continuing Carbon Tracker’s focus on upstream capex for new oil and gas projects, we have developed a Carbon Sensitivity Analysis. This brings together low carbon demand scenarios with oil price and discount rate sensitivity to understand how reducing exposure to high cost, high carbon projects can optimise value. Given the unpredictability of oil prices, we believe that a sensitivity approach which incorporates a wide range of oil prices (including those that might be thought unlikely at the time) is valuable. This analysis aims to show that it can make financial sense for the oil and gas majors to adopt a strategy of aligning their project portfolios to be consistent with a 2˚C outcome, rather than pursue volume at all costs.

    • Oil and gas majors with deep pockets should stop most exploration and start buying properties/companies with lots of oil in place, focusing on onshore heavy oil and tight rock oil. They should not concern themselves with a 2 degree IPCC limit or any such bs. It’s a Darwinian world which happens to be running out of oil.

  18. I like this bit from Wood Mac:

    “The dwindling rate of discoveries does not mean that the world is running out of oil; in recent years most of the increase in global production has come from existing fields, not new finds, according to Wood Mackenzie, another consultancy.”

    The guy who made the comment must have had an MBA?

    • Oldfarmermac says:

      It’s easy to get an MBA at just about any university without ever having taken more than one so called survey course in just one science discipline. These courses are dumbed down enough that football players with skulls three inches thick and brains only two inches in diameter can pass them easily. No math, no labs, no need to study, just parrot back a few notes as if it were a course about the history of basket weaving.

      Science fiction is absolutely superb as intellectual yoga, but so many people who have never taken a real science course have watched so much sci fi on tv that science fiction has morphed into a religion with as many serious devotees as Jesus. ( There is a hell of a an overlap between the two religions, in more ways than one. )

      • Fred Magyar says:

        It’s easy to get an MBA at just about any university without ever having taken more than one so called survey course in just one science discipline.

        Is the bar for foreign students so much higher? The reason I ask is that last year I tutored a young Brazilian engineer who was applying to some US universities to get his MBA, I helped him prepare for the GMAT and damned if I didn’t have to hit the books and do some serious studying so that I was up to speed. Though it’s possible that my own grey cells are just failing at this point…

        Just to answer my own question…

        MBA No GMAT Required – Auburn.edu‎
        Adharbert.auburn.edu/No-GMAT-Required‎
        Get Information Here & Apply Today! Auburn U Online & On-Campus Format.
        All-Inclusive Tuition · Designed for Your Needs
        Options: Online, On-Campus…

        • Ves says:

          Fred,
          It’s not that GMAT and TOEFL are higher entry requirements for international students but that quality of secondary education for local students’ deteriorated significantly lower so these entry tests appear much harder.

        • Doug Leighton says:

          “Though it’s possible that my own grey cells are just failing at this point…”

          Yeah, I think you finally nailed it there Fred. 🙂 Actually I’ve worked with more than a few very competent geologists and engineers who wandered across that dreaded aisle, during down times, and picked up degrees in law, accounting or even an MBA. Most went on to (successively) run companies.

          • Paulo says:

            My nephew is a managing engineer with a very large auto parts company. The company is Japanese, but he works out of Detroit. They just paid him to get an MBA; paid his wages while he worked on it and all associated costs. In fact, they insisted he get one.

        • Watcher says:

          Dunno about nowadays but solid B schools are supposed to be math heavy.

          Something I have learned lately . . . a student visa is a remarkably easy path to indefinite stay in the US. Even for just a certificate, not a complete degree. If they get a job with the cert, they stay a long time. Significant incentive to enroll.

        • Brian Rose says:

          Engineering is a STEM field, Business and Economics… not so much.

          There is tribalism/group think in any and every endeavor.

          In my experience, and this is VERY general – an heuristic, not a law:

          STEM educations teach students that possibilities are limited by physics, and it is the understanding of the barriers and nature of physics that allows us to develop new technologies.

          Business/Economics educations teach students that limits/barriers are purely economic. Any obstacle is simply economic,and no FUNDAMENTAL barriers exist. This leads to the mind-set that anything and everything can be overcome by human ingenuity taking advantage of market opportunities (via substitution or shifts in demand and supply of any good).

          Anyone to hyper-focused on the limits of the physical laws of the universe will miss the overwhelming importance of economics – for instance, EVs may be more efficient in energy use, but may be uneconomical due to lack of economies of scale, charging infrastructure, etc.

          Anyone to hyper-focused on the unbounded potential of economics will miss the overwhelming importance of physics – for instance, the fact that energy is the master “resource”, and permanent, sustained decline in availability of the primary energy source fueling our civilization cannot simply be “substituted” in a moments notice.

          Those who are 100% certain that our industrial civilization will collapse display tribalism that disregards the nature of economics.

          Those who are 100% certain that we will overcome the challenges facing our civilization display an EQUAL amount of tribalism that disregards the physics of the problems we’re facing.

          We could have seen collapse in 2008. We were DAMN close. Because of economics and human political action the financial system survived, and the ability to continue a transition to renewables and sustainable transport marched forward for 7 more years. I didn’t own an EV in 2008. I couldn’t because they didn’t EXIST – minus the $120,000 limited production Tesla Roadster. If TARP hadn’t passed, and the financial system collapsed, the capital would not have existed for the build out of wind and solar, the development of EVs, declining battery prices, the boom in oil production that bought our civilization more time.

          We will certainly face another oil crisis that produces another 2008 collapse. No one here seems to doubt that.

          The question is, will policy, politics, and human economic intervention hold our global financial system together again? Will the vote for a new TARP fail, and financial collapse perseveres? Will this next crisis originate in Europe, and, due to fragmented politics, prevent their own EU bailout that leads to global financial meltdown?

          Or

          Will we hold our financial system together again, and eek out a few more years of transition. Sure, living standards would decline, extended recession and slow growth would persist and grow in the developed world, but the transition of our civilization would continue.

          As the 2005 Hirsch Report detailed, our civilization need only transition JUST ENOUGH to allow for the infrastructure and build out of other sources of energy to reach a base of usage and infrastructure where renewable energy and transport can reinforce their own growth and match the y/o/y decline in oil.

          • Oldfarmermac says:

            Hi Brian,

            I am one hundred percent RELIEVED to see another regular here acknowledge that our only real hope of managing the transition to renewables is dependent on the continuation of business as usual, and say so in about as many words.

            No doubt most of us understand this but so far just about every body seems to avoid saying so.

            • Caelan MacIntyre says:

              Musk has hedged his bets

              Space X has plans to mine asteroids, and depending on how the surveys of the red planet go (and Peak Debt) we could see Space X lithium mines out there. The million Martian residents need gainful employment, after all, and what better thing to be doing than to power the Tesla Roadsters of Silicon Valley billionaires?

              But then, timing is everything. Whether you invest in Panasonic, Solar City and Tesla or a cabin in Montana might be a good indication of how long you think Musk’s fantasy has to run its course.”
              ——

              Comments:

              Jan Lundberg said…

              “Thanks for the tour de force of recent energy technology news (especially with the Low-Tech link on batteries and Life Cycle Analysis).

              It’s always impressive to read technical reports with sophisticated calculations of industrial import. But this is my point: all this activity to sell more energy and gadgets for the consumer economy is about industrialism, something that more people should question. Good that you draw back the curtain of glitz.

              The absurdity of the mass techno focus is clear here: ‘the optimum shape and size for the best cost efficiency for an automotive cell.
’ So, we need cars? How many millions of them, and how many years or centuries are they supposed to run around? Fuck Tesla — somebody hit me with a bicycle on a bike path than with a car on a sea of asphalt.

              The industrial technophiles and their followers have a problem with accepting what nature offers freely. Because only manipulating nature is what’s profitable.

              Thanks for the glimpse of what the Musks and others are trying to do. I don’t put a lot of stock into their techno efforts. We still have a problem known as peak (conventional) oil, and there’s runaway greenhouse gas emissions. More energy efficiency as a solution is way, way too little and too late…”

              Jan Lundberg said…

              “When I wrote ‘Fuck Tesla’, I meant the car.”

          • Dennis Coyne says:

            Hi Brian Rose,

            There are some like Political Economist and Dean who are familiar with economics, but see that there are practical limitations to unlimited growth.

            There are also engineers (PhD level I believe) such as Wimbi and possibly WebHubbletelescope (I believe he also has a PhD in engineering or physics) who think that a transition, though perhaps difficult, is far from impossible.

            I have degrees in both Physics and Economics so can see both sides of this issue.

            I could not have summarized this as nicely as you have.

            Thanks.

            • wimbi says:

              I am rather slow to see some important aspects of problems. I get the physics puzzles easily, and usually see lots of ways around them right away, but I don’t get the people problem, even when it is smacking me again and again right in the face.

              So, I think I have finally seen the obvious-to-anybody-but-me problem I have with most comments re energy transition here.

              I am looking at what I categorize as an emergency mode, and most here just aren’t.

              http://www.resilience.org/stories/2016-05-10/leading-the-public-into-emergency-mode-a-new-strategy-for-the-climate-movement-excerpt

              I lived thru an emergency mode, WWll, and saw what we could do with that kind of attitude – A huge threat, single minded concentration of everything we have to counter it, and to hell with everything else until we got it done.

              So now, when I hear chatter about how much it will cost to kick ff’s and go whole hog to nature’s ever giving gift of wind/solar/ biosphere, I think:

              ” are these people nuts? the cost of NOT going solar is EVERYTHING WE STAND ON,and so how can a sane person talk about costs in that situation?”

              But, most of you guys say “yeah, you might be right in a sort of distant fuzzy way, but jeez, who’s gonna give up his trip to Bora-Bora for nothin but a little worry about CO2? Nobody, that’s who.”

              Ok, I’ve done my civic duty for the day, now back to the shop and that fun game with the wood cooker- (choke).

              • Ralph says:

                My parents went through WWII and some of the ‘get the job done’ ethos rubbed off on me, albeit not very much.
                However, most people I work with don’t even remember a time before cell phones and the internet (correction – the HTTP protocol) and respond to my mild efforts at some sort of resilience ( we are in far too deep for sustainability) with bemused blank stares.

              • Cracker says:

                wimbi,

                I agree. The emergency is now, but most don’t get it. Later will be too late as it will progressively degrade, I suspect.

                I am not confident that enough people will feel the emergency frame of mind until far too late to save any semblance of BAU, which absolutely needs to continue to allow time to transition to something else.

                We are an intelligent species, but we are not very smart.

                Jim

              • Dennis Coyne says:

                Hi Wimbi,

                I am younger than you and did not see the Depression and World War 2 first hand (my parents did so I heard about it through them and history). Certainly in a crisis people can pull together and do great (and terrible) things.

                Also many of us don’t see the emergency right now (especially those who don’t participate here, but even some of us) but think of it as something that will come in the near future(10 to 15 years maybe).

                The crisis is not as apparent today as it was in 1930 to 1945, or so it seems to me.

                • wimbi says:

                  Not apparent, that’s for sure!

                  Something that will come in the near future, not now.

                  Like, “OK, you engineers say that iceberg gave us a fatal gash, but that’s only in the near future, not time to call an emergency yet.”

                  Back in the good ‘ol TOD days, I wrote an alternative script for that Titanic movie, in which the Captain gets the word, instantly declares a state of emergency, organizes everybody to rip up all material that will float, toss it over, where the crew lashes up a bunch of rafts, the passengers slide down onto them, and when the Carpathian shows up, most of them are alive and not dead like they really were in the real world.

                  So. Are we gonna die in the real world, or are we gonna do what is obviously the things to do with the news we just got and maybe squeak thru??

                  Sigh, you say we are doing what’s normal under the circumstance – so die, I say we don’t quite have to just yet if we getourassingearnow.

                  Have a nice day.

                  • Dennis Coyne says:

                    Hi Wimbi,

                    I think your Titanic scenario is apt.

                    Consider another scenario, to an astute observer, the situation in Europe and Asia in 1936 made it pretty clear that there were potential problems on the horizon. Wishful thinkers in the US prevailed and there was very little US preparation for the War to come. Even in early1941 the US ramped up military output only enough to supply Great Britain, the Soviet Union, and China with some military equipment.

                    We didn’t really get started until Pearl Harbor.

                    A clear peak in oil output at a high oil price (so 2015 does not qualify) will be our Pearl Harbor wake up call. The sooner this occurs the better, hopefully by 2020 (earlier would be better).

                    It is at that point that the need for “emergency mode” will be clear to six pack Joe and his neighbors.

                    Only then will the World really get to work, it is unfortunate, but true imo.

  19. aws. says:

    A cold climate Leaf driver reaches a 100,000 km!

    100,000 km!

    We hit 100,000 clicks this past weekend. Not bad for a car that “can’t go very far” LOL. It took us 4.5 years to do it. That’s 22,222 km per year, quite a bit more than I had originally predicted. And definitely more than any other car I had in the past!

    Overall, the Leaf is still doing vey very well, with no major issues. The only out-of-the-warranty item I had to replace was a faulty switch on the driver’s power window. Nothing else. The AeroVironment charging station is still working as new.

    Battery capacity is at 83%, still more than enough for my daily commute. It’s been almost a year since we lost the first bar at 84% so the drop in capacity has slowed down considerably. I don’t expect to need a battery replacement any time soon.

    The Volt continues to work well as well. We barely use any gas in the spring, summer or fall, but in the winter it’s pretty much unavoidable. In the colder months, range drops to just 35 km, and the gas engine kicks in for a few minutes when temperature drops below -4C, which is pretty much the whole time here in Ottawa during the winter.

    Future plans

    We made a reservation for a Tesla Model 3, which is expected to be delivered some time in 2018. The 350+ km of range and the access to superchargers will be a dream come true.

    • wimbi says:

      We have had our Leaf for near 4 years so far, and it does us just fine (40 north, fairly cold winter, fairly warm summer). Every now and then, we swap for our Honda we gave to granddaughter when we have to go (again, goddam it) to the big city hospital, like we did yesterday. We are always glad to get back to the leaf. We see no change anywhere in its performance, and have done nothing to it but simple normal stuff every car needs (windshield wipers, etc).

      It will outlast us, for sure. And of course, it runs on our PV, all bought and paid for and free from now on. I just don’t see any argument against it, $ or any other way, except maybe for those needing ego support from a loud exhaust. For them, a big loudspeaker and a CD with lotsa choices.

      I am in a group that’s putting up a fast charger half way to the city, in a nice restaurant.

      • Caelan MacIntyre says:

        Hi wimbi,
        I’m on the road, so to speak, so just a quickie for now…

        Naturally, it helps to bear in mind– always– context, like scale, industrial processes, the present, and population.

        Your EV is, to give it some context, a personal anecdote within your own ostensibly-American affluent, corrupted lifestyle that has, and may always have, limited grid and charging support; that may be winding down ever more quickly; that is predicated on overseas exploitations and ‘differences of economy’ (that can and are flipped like a house) of various kinds– cheapo land-plunder/costs-of-living/mining/labor/pollution-outsourcing/exchange rates/despotic governments, you name it– and yes, alongside your own ‘neighbors’ that may be less able, if at all, to afford what you have– ever– and may be finding it increasingly difficult to do so as things play out.

        Maybe you were born with the proverbial silver spoon in your mouth. If so, it might help if you don’t, to run a different perspective now and again and put yourself in others’ shoes– shoes that might support some of the luxuries that you might bask in.

        Maybe much of Tesla is ‘coming home’, or at least about coming home, and with it, perhaps some semblance of democracy and equality, etc., along with it. Nevertheless, Tesla may still rely on BAU and such things as multinational trade, and what comes with it.

        In any case you want to talk resilience, then you want to talk about true self-empowerment and I don’t think some things like what your ostensible lifestyle is in large part predicated on counts for as much in those regards.

        Catch you later.

  20. Watcher says:

    Ron, do you know why Baker Hughes gets no FSU or China data?

    • George Kaplan says:

      OPEC Statistical Review has yearly averages, latest for 2014, not sure when the next issue is due: China 823, Russia 307, Azerbaijan 17, Kazakhstan 57, Iran 89. Not sure what China does with all those.

      • AlexS says:

        “Not sure what China does with all those.”

        Infill drilling in mature fields

  21. Jeju-islander says:

    Opritov Alexandr: “Number of cars in the world: 1 100 000 000
    If 2020 will be 20 million electric vehicles this is 1.8% of total”

    20 million electric vehicles by 2020 is a very optimistic number. For that to happen the manufacturing capability needs to ramp up far more than is currently planned. The chain of components necessary need to be available for factories such as Tesla’s GigaFactory to work. For example the Panasonic batteries to be built in that factory require a Lithium Ion Battery Separator made by the Japanese firm Sumitomo at a Korean plant yet to be built. see http://asia.nikkei.com/Business/Companies/Sumitomo-Chemical-to-make-car-battery-material-in-South-Korea Expected capacity by end 2017 for about half a million cars a year. That is exactly what Elon Musk needs to fulfill his latest goal.

    The competitors to Sumitomo include SK Innovation. Their factory expansion plans are for about 1 million cars a year by 2018 see http://english.etnews.com/20160429200003 The third major player is also the largest Asahi-Kasei which now owns the former dominant player Celgard. They are ramping up production also http://www.4-traders.com/ASAHI-KASEI-CORP-6491172/news/Asahi-Kasei-production-capacity-for-lithium-ion-battery-separator-21104369/

    Assuming these plants are all completed and run at maximum capacity then they could supply about 3 million EVs a year by 2018. Further new plants would need to be announced now if the next generation factories were to be completed before 2020 to make that 20 million goal more realistic.

    • Dennis Coyne says:

      Doesn’t BYD in China make a lot of plugins as well?

      https://en.wikipedia.org/wiki/BYD_Auto

      Worldwide sales of light duty vehicles was about 88 million in 2015, 20 million plugins would be 25% and I doubt we will be there in 2020, maybe 2029 at 30% growth rates, plugin sales grew by 71% worldwide in 2015, averaging 30%/year for 14 years is probably too optimistic, it will depend on many factors including the price of oil and the cost of lithium ion battery packs. If battery packs fall in cost by 7% per year (since 2000 costs have fallen about 11%/year on average) and the price of gasoline remains $2/gallon or more (in US 2015$) then EVs and plugin hybrids will be very competitive with ICEV (non-hybrid).

      • Jeju-islander says:

        Yes China is a major market for EVs but the battery chemistry is not the same as used in the rest of the world. see http://insideevs.com/samsung-sdi-and-lg-chem-have-a-battery-problem-in-china-where-subsidies-were-redirected-to-lfp-type-cells/

        I don’t know the realistic prospects for rapid expansion of the Chinese EV market. There is a skeptical article here http://www.autonews.com/article/20160501/GLOBAL03/305029967/skepticism-surrounds-china-ev-boom

        And just to show the similarity of the non-Chinese tech; Sumitomo licences their LIBS technology from Celgard. So too does Samsung SDI. LG Chem used to be Celgard but I think is now SK Innovation LIBS. Those two just reached an agreement in a patent dispute. This technology is a complex mix of Japanese, American and Korean engineering and manufacturing that is very intertwined. Any reduction in globalisation or increase in trade wars could seriously damage this sector. The Chinese subsidies mentioned above are just the sort of protective tariffs that could harm this industry.

        I don’t understand the comment that the Volt and Bolt will have different batteries. Both will have LG Chem batteries from the Holland, Michigan plant.

        • Brian Rose says:

          Jeju-islander,

          The Volt and Bolt do indeed have different LG Chem battery chemistries, and are built in different factories:

          “Speaking of those 288 cells, that number might sound familiar to regular readers because that’s exactly how many are in the new Chevy Volt. But the packs in the Volt and the Bolt are entirely different beasts. For one thing, while the Volt cells are made by LG Chem in Holland, MI, LG Chem will make the Bolt’s cells in South Korea. The cell chemistries are also different. ”

          Some additional info from Chevrolet’s website:

          “Inside the battery pack – which spans the entire floor, from the front foot well to back of the rear seat – is a new cell design and chemistry. The nickel-rich lithium-ion chemistry provides improved thermal operating performance over other chemistries, which requires a smaller active cooling system for more efficient packaging. The chemistry allows the Bolt EV to maintain peak performance in varying climates and driver demands. ”

          Also from Chevrolet’s website:

          “Battery manufacturing location:
          Incheon, South Korea”

          • Jeju-islander says:

            Brian Rose: Yes, you are correct that the Bolt battery will not initially be made in Michigan .
            According to Detroit News 22nd Oct 2015 – http://www.detroitnews.com/story/business/autos/2015/10/21/lg-chem-remains-mum-mystery-customer/74360056/
            “Steve Zachar, formation manager at LG Chem, was confident the Holland plant can make Bolt batteries should it be asked too.“We’re capable of making all kinds of products, but were not currently making that line,” Zachar said.”

            LG Chem’s battery factory in South Korea is at Ochang 60 miles south of Seoul. Incheon is a port city just to the west of Seoul.

            Looking up Ochang, I also found this. http://www.ufo-battery.com/detail/news/607 The company making the battery separator for LG Chem is now the Japanese firm Toray.

            As I said earlier this technology is a complex mix of Japanese, American and Korean engineering and manufacturing that is very intertwined

    • Longtimber says:

      Elon’s GigaFactory is up and Running – Assembling Car Modules and a few Powerwall Samples. No solid intel on cell manufacturing. 18650 cylindrical “eCig & eToothbrush” cells are truly amazing at 3400mAh, but unless capacities head towards 5000, how could they compete with LG Chem Pancakes? It’s all about Cell production Scale but you have to assemble them into a Reliable PAK – a complex Beast. “Add it all up, and LG Chem appears likely to beat Tesla to the punch as the operator of North America’s first battery “gigafactory,””
      http://www.autonews.com/article/20151214/OEM06/312149992/lg-chem-quietly-surges-in-battery-race

      • Brian Rose says:

        Longtimber,

        There is a major difference between Panasonic’s cells and LG Chem and, for that matter, Samsung’s cells.

        This, much more recent and informative article, sums it all up: http://www.bloomberg.com/news/articles/2016-03-31/samsung-and-lg-have-a-battery-problem

      • Brian Rose says:

        To add to this divergence between EV batteries I recommend researching the cell chemistry that will be supplying the Chevy Bolt.

        It turns out that the Chevy Bolt will have different cells than the Chevy Volt!

        Why?

        Because cost and availability, that’s why.

        A simple wikipedia search for the Bolt reveals that the batteries commissioned for the Bolt will be a compromise that sacrifices longevity for price. GM was forced to make this sacrifice because it simply could not offer a battery size and price point that would be marketable if it hadn’t.

        The Gigafactory is being built for a reason. This LG Chem plant packages cells (with sub-optimal, but cost effective chemistry). The Gigafactory will be PRODUCING cells, of the chemistry type ideal for EVs and grid storage.

        People are so focused on Tesla being a car manufacturer that they’re blind to the fact that Tesla, long-term, is a battery supplier. They’re building a $5 billion battery factory that will be the largest building on Earth and will single-handedly double the global supply of lithium batteries…. but for some reason everyone thinks Tesla is an auto manufacturer.

        Tesla’s Freemont car factory was purchased for $733 million, and at full capacity will produce 0.5% of the world’s vehicles. Tesla’s Gigafactory cost $5 billion, and at full capacity will DOUBLE the global supply of Li-Batteries.

        • Caelan MacIntyre says:

          …deploying solar PV at high latitudes in countries like Germany and the UK is a total waste of time, energy and money.” ( May 9, 2016)

          “All that is achieved is to raise the price of electricity and destabilise the grid. Defenders of RE and solar will point out that this is a single paper and there are certainly some of the inputs to Ferroni and Hopkirk that are open to debate. But there are reasons to believe that the findings are zeroing in on reality… At this level, solar PV is not an energy source but is an energy sink.”

          Remember ethanol?

          Rubber

          • Oldfarmermac says:

            It’s a given that government will always get a lot of details wrong.

            It is certainly a waste of money and resources to put in solar panels in the UK, for now at least, because the climate is not suitable. Later on , maybe solar will be cheap enough and fossil fuels expensive enough that solar IS economic in the UK.

            But in general, solar power is now competitive in places with climates well suited to solar power, and within a few more years, it will be competitive in direct dollar and cents terms over half or more of the world.

            Someday the ships will stop delivering oil, gas , and coal. When that day comes, the Brits will be damned glad for whatever renewables and nukes they happen to have available.

          • Ulenspiegel says:

            “Defenders of RE and solar will point out that this is a single paper and there are certainly some of the inputs to Ferroni and Hopkirk that are open to debate. ”

            That is rich. If the crucial assumptions for the calculations are highly debatable, then it is some kind of courageous or stupid to use this paper as base for

            “But there are reasons to believe that the findings are zeroing in on reality”

            OMG.

        • Longtimber says:

          Key – “The Gigafactory will be PRODUCING cells, of the chemistry type ideal for EVs and grid storage.” Would LiFePo4 ( A123, CALB, BYD, ??,China ) win if scaled up?? Easier dragon to tame. The Metric is # cycles and cost per kWh over Pak life. Panasonic (xSanyo) clearly has a lead. Assembly and scalability is key as well is chemistry in the real world. Have deployed CALB, LG and orphanTesla Modules in Critical Autonomous systems. much to yet to learn. I monitor them live daily. Lead Acid batteries seems like a bad joke. Nowhere for PV Power to go
          much of the time.

  22. RDG says:

    Without access to all the liquid fuels you are dead meat.

    Transporting government freeloaders around in automated cars is not an economy.

    The internet is not an economy.

    You all invested in phony accounting on computers and thats all you have left: The Ultimate A.I Computer

    Worthless.

    • Fred Magyar says:

      Transporting government freeloaders around in automated cars is not an economy.

      Denial, anger, bargaining, depression and acceptance…
      LOL! I guess you are still at the anger stage, eh?

      • Caelan MacIntyre says:

        Fred, we could say the same about BAU vis-a-vis natural (ecological/social/thermodynamic/etc.) constraints.

        Gigafactory= BAU-denial?

        By the way, you can more easily portage your kayak attached to the side of a horse than attached to an electric bike trailer and bike.
        And while you are drifting down the rivers, the horse can maybe be trained to run ‘alongside’ you along the river banks and forest trails to pick you and kayak up at the end, unlike your trailer and bike. The horse is already intelligent, so you would not need artificial intelligence.

    • Oldfarmermac says:

      “Without access to all the liquid fuels you are dead meat. ”

      We are dead meat for sure if we continue to rely on the one time gift of nature of depleting fossil fuels even as the population continues to grow.

      Unless the renewables industries grow big enough to shoulder the load, the inevitable depletion of fossil fuels will result in the MOTHER OF ALL CRASHES, followed a major population crash. Times will be very interesting indeed.

    • Watcher says:

      Something to be said for this. The battery churning is wasted resources.

      Economies don’t matter anymore since the QE threshold was crossed.

      The resources would best be spent arranging forces to kill Chinese, if you’re American.

      http://www.forbes.com/sites/kenrapoza/2013/08/25/within-four-years-china-to-consume-more-oil-than-u-s/#3ce6a4ff3b31 Forbes wrong again, but

      mazamascience is inescapable. Chinese oil consumption growth isn’t going to stop, unless it is . . . stopped.

  23. Oldfarmermac says:

    The oil sands producers seem to have dodged the wild fire bullet ok, and will soon be back on line. Their biggest problem might be employee housing in terms of getting their people back on site quickly.

    http://www.bloomberg.com/news/articles/2016-05-09/canada-s-oil-output-spared-fire-damage-seen-able-to-bounce-back

  24. Longtimber says:

    ” Hydrofracking is the Story – Pursued against all reason -Told they were idiots”
    https://audioboom.com/boos/4539120-the-frackers-the-outrageous-inside-story-of-the-new-billionaire-wildcatters-by-gzuckerman?t=0

  25. Caelan MacIntyre says:

    “…an electrical supply system based on today’s PV technologies cannot be termed an energy source, but rather a non-sustainable energy sink…”

    “…or a non-sustainable NET ENERGY LOSS. The methodology recommended by the expert working group of the IEA appears to yield EROI levels which lie between 5 and 6, (see Section 4.1), but which are really not meaningful for determining the efficiency, sustainability and affordability of an energy source.”

    • Oldfarmermac says:

      I have better sense than to try to grow oranges on my Virginia farm.

      Northern Europe is not well suited to solar photovoltiac power, everybody with a working brain knows that.

      But unless I am mistaken, the charts presented are misleading as hell, because the energy inputs are gross, without allowing for the EXTREMELY high quality of the energy produced by a solar farm.

      It is true that solar is intermittent, but that doesn’t mean you can’t use it when it IS available, and electricity on the spot is worth three or four or even five or more times the energy in coal that is located far away.

      So for all intents and purposes, the green line that graph labeled “energy produced” ought to be at least twice as long .

      Furthermore, as Alan from Big Easy used to point out, the rail road tunnels built well over a hundred years ago are just as useful today as they were then. Solar farms once built can be easily and cheaply refurbished every twenty or thirty years, as the panels go bad, and the new panels will be cheaper and more efficient than ever.

      Twenty years from now, even coal may be getting to be sort of EXPENSIVE in terms of purchase cost alone, never mind the environmental costs.

      • Caelan MacIntyre says:

        It’s not just Northern Europe.
        The story is also on the site of our own Euan Mearns.
        I would read the comments on the story as they manifest there and elsewhere.
        A discussion hereon about this with Euan (and company) might also be interesting and insightful.

        “I have been asked to write a post reviewing the concept of energy return on energy invested (ER0EI) and as a first step in that direction I sent an email to my State-side friends Charlie Hall, Nate Hagens and David Murphy asking that they send me recent literature. The first paper I read was by Ferruccio Ferroni and Robert J. Hopkirk titled Energy Return on Energy Invested (ERoEI) for photovoltaic solar systems in regions of moderate insolation and the findings are so stunning that I felt compelled to write this post immediately.” ~ Euan Mearns

        • Fred Magyar says:

          A PV panel will produce more CO2 than if coal were simply used directly to make electricity. Worse than that, all the CO2 from PV production is in the atmosphere today, while burning coal to make electricity, the emissions would be spread over the 25 year period. The image shows the true green credentials of solar PV where industrial wastelands have been created in China so that Europeans can make believe they are reducing CO2 emissions (image credit Business Insider).

          Sorry, this is a load of absolute bullshit!

          Shall we look at the EROEI of say the tar sands? I guess the ecological consequences of all the energy that goes into all the industrial processes that go into all the infrastructure there comes from clean unicorn poop!

          China may be an ecologically devastated hell hole but coral reefs are dying all over the planet including in Australia and in my back yard in Florida I guess that has nothing to do with fossil fuels…

          Do you simply measure the electricity used at the PV factory, or do you include the energy consumed by the workers and the miners who mined the silicon and the coal that is used to make the electricity?

          I guess all the workers in the oil business consume no energy whatsoever!

          No worries let’s stop all research into any and all renewables and just continue with fossil fuels because nothing else will ever work!

          Yeah let’s burn coal to produce electricity everywhere because it has a better EROEI and is so much cleaner in the long run than PV!

    • Longtimber says:

      The Sun is Sky Daddy’s UES – Ultimate Energy Source.
      You get it when you can heat enough hot water for showers on cloudy days with even moderate size PV array. Cold showers are brutal.

      • Caelan MacIntyre says:

        “The Sun is Sky Daddy’s UES – Ultimate Energy Source.” ~ Longtimber

        Which is why, I imagine, we might want to be cautious about ultimate energy sinks and added C02 emissions, yes? I mean, if we think cold showers are what’re brutal now?

        Besides, what with how things are playing out these days, and how far along PV is (or should be, but isn’t), how much time have we got to warm how many showers, and whose? And what are the alternatives? And do certain industries appreciate them?

        Passive solar technologies include direct and indirect solar gain for space heating, solar water heating systems based on the thermosiphon, use of thermal mass and phase-change materials for slowing indoor air temperature swings, solar cookers, the solar chimney for enhancing natural ventilation, and earth sheltering…

        ‘Low-grade’ energy needs, such as space and water heating, have proven, over time, to be better applications for passive use of solar energy…

        Another passive solar design principle is that thermal energy can be stored in certain building materials and released again when heat gain eases to stabilize diurnal (day/night) temperature variations.” ~ Wikipedia

        • Dennis Coyne says:

          Hi Caelan,

          It is not a battle between solar thermal, passive solar and PV, all three can be used. Perhaps your computer works without electricity, my computer needs a source of power and PV does this more cheaply than solar thermal at present.
          The aim is to use energy sparingly and replace what cannot be reduced any further with wind, solar, hydro, and geothermal power instead of using fossil fuels. Perhaps it cannot be done, but to me it seems the best way forward given the reality of a World with over 7 billion people.

          When the World’s population falls to under 500 million, we might be able to return to the kind of social organization you would prefer, though you would need to convince others to join your tribe.

          • zeroworker says:

            Hi Dennis,

            I agree with you regarding conservation and replacing fossil fuels with renewables where possible. And even though I largely agree with Caelan’s views generally, I also agree with that given we already have 7 billion people, we have to at least try to feed them, rather than consign 6.5 billion to their graves and hit the reset button to some renewable only egalitarian society.

            But is our current society much better? Maybe it has been for some people, for a little while. But the long term trajectory is horrifying. Even if we manage the energy transition to renewables, and even if we can stop CO2 emissions from cooking the planet, we won’t be safe.

            Modern societies expect and demand growth, and therefore are not sustainable. If we dodge the peak oil and climate change bullets, there are plenty of rounds left in the chamber ready to finish us off. I’m talking overuse of fresh water, deforestation, expansion of oceanic dead zones, etc. The planet is finite, and pretending there are no limits will lead to overshoot and collapse one way or the other.

            I can think of lots of ways to fix any given problem. The world could demand higher fuel efficiencies in cars and trucks. Provide incentives for renewables. If you want to reduce inequality, you could legislate a minimum income for all citizens, paid for by soaking the rich. There is always my personal favorite – publicly execute the richest man in the country every year.

            Coming up with solutions isn’t that hard. Implementing them is nigh impossible. Political realities won’t allow it. People need convincing, whether to achieve Caelan’s (and mine) utopia, or to move away from the magical thinking of endless growth. Neither position is like to capture the imagination of the masses before it’s too late.

            • Dennis Coyne says:

              Hi Zeroworker,

              The demographic transition might be achieved similar to the UN low fertility scenario (if total fertility levels continue to fall at the 1965 to 2005 rate) in which case population peaks in 2050.
              If per capita GDP continues recent (1970-2014) growth rates then GDP growth will fall to zero (or negative) as population declines at 1.4%/year or more. Eventually we may reach 500 million in 2350 or so, these are choices we make as a species as we now know how to control our fertility, it just takes time.

              There are a variety of solutions to the problems we face in the future as population falls the problems will be lessened.

              In many nations the total fertility ratio is 1.5 births per woman or less, if the average World level becomes that low (in 2100), population will decline pretty quickly.

              • AlexS says:

                World population forecast to 2040 (million)
                source: EIA International Energy Outlook 2016

              • Dennis Coyne says:

                Hi AlexS,

                There are not uniform opinions about future population.

                I think the UN’s low fertility scenario is more likely as World TFR fell from 5 in 1965 to 2.5 by 2005, the low fertility scenario is more consistent with that trajectory of falling TFR.

                • AlexS says:

                  Dennis,

                  I don’t think the EIA has its own population forecast.
                  Most likely, they are using UN base-case scenario

                  • Dennis Coyne says:

                    Hi AlexS,

                    Yes they are probably using the medium fertility scenario from the UN.

                    An alternative assessment (roughly between the UN’s low and medium variants) can be found on page 16 of the paper linked below (Wofgang Lutz, et al)

                    http://pure.iiasa.ac.at/11189/1/XO-14-031.pdf

                    The SSP2 scenario (their medium scenario) is shown below. Population peaks at about 9 billion in 2070.

    • GoneFishing says:

      Caelan,
      Solar panels lose about 1 percent of their production every year. Take that to 50 percent and it’s 70 years. In Great Britain a panel will produce about $3000 worth of power in it’s lifetime. It costs about $300 for a panel. The panel only costs about $150 to produce. So how can $150 of materials, energy and manufacturing effort actually cost more than $3000. The panel produces 10 times it’s retail cost and close to 30 times it’s energy cost.
      How can this be an energy loser?
      Bogus studies and graphs.

      • Caelan MacIntyre says:

        Hi guys, just passing through for now, but, from Euan’s article:

        “We then also need to know how long the panels last. Manufacturers claim 30 years while empirical evidence suggests a mean scrapage age of only 17 years in Germany. Ferroni and Hopkirk use a generous 25 year unit life.”

        Ferroni and Hopkirk’s study is not the only similar contention I’ve read about this kind of thing.

        🙂 Ulenspiegel 🙂 , with regard to your comment below; I am interested in the truth whether the paper proves right, wrong or somewhere over the rainbow.

        Ok, back out… Have a great day with a happy face!

        • Hickory says:

          I stopped going to Euan Means website a long time ago. I found his (and his disciple’s) extreme biases overshadowing rational analysis far too much.
          He lost all credibility in my book.

          • Aws. says:

            Same here.

            • andy hamilton says:

              Means is a climate change denier with an almighty axe to grind. Zero credibility.
              There is much bull in that paper – to focus on just one point – panel lifetime efficiency is much longer than claimed. I have (Chinese made) panels on my roof that after 7 years are actually producing MORE power than when first installed (insolation in our area has increased slightly). Data from Japan and Australia shows panels made in the 1970’s still working at 70-80% efficiency.
              http://cleantechnica.com/2015/10/19/how-long-will-solar-panels-last/

              • Fred Magyar says:

                His credibility and possible agenda notwithstanding, we should still address him by his correct name.

                Euan Mearns, not Means.

              • Caelan MacIntyre, On Pillow-Talk and Pillow-Fights says:

                Sometimes I might be in bed with someone I usually am not, or vice-versa. It can be a peculiar sensation… if you know what I mean…

                I mean, Javier could have just shut up about the climate thing and I might have been fine; while I am happy to have Euan or whoever else say anything they want to somehow undermine BAU. They can even take the lead and be on top.

                Of course, once Baby talks about, say, new nukes or taxation structure, I’m out and the bed’s theirs.

                They can even have my pillow… After I hit them with it.

              • Dave P says:

                Andy how come you stopped posting on our local financial website? Did DC ban you? I always enjoyed your comments.

        • GoneFishing says:

          There is no known life span yet. it is generally estimated to 80 percent in 30 years. Some only lose production at 0.5% a year. The warranties are for 80 percent, but that does not mean they won’t continue producing power for many years to come or that they will stop degrading as some have indicated.

          I oil wells produced 80 percent of original production at 30 years, the owners would be doing cartwheels and throwing parties.

          https://pureenergies.com/us/how-solar-works/how-long-do-solar-panels-last/
          http://cleantechnica.com/2015/10/19/how-long-will-solar-panels-last/

          Remember that adding solar PV to a house or building is one of the few additions that will not get incessantly taxed and it adds value to the home.
          So it is one of the most valuable additions to the home along with insulation and caulking.
          Taxes on the house cost you a new home every 25 to 35 years. Solar PV is a one time cost, saves money and retains much of it’s value over time. Win win situation.

      • Oldfarmermac says:

        Gone Fishing has nailed it perfectly.
        Using money to estimate embedded energy might not be a GOOD way to measure that embedded energy, but it puts an upper limit on the amount of energy embedded in any given product, because manufacturers are not in the habit of doing business at a loss. A three hundred dollar panel cannot contain more embedded energy than can be bought with three hundred bucks worth of DELIVERED coal, which on average is about six tons in the USA. Then you lose HALF the energy in the coal just in the generator plant, and more in distribution of the electricity. Never mind that the coal plant requires a truly substantial amount of embedded energy in the building, partisans always over look such DETAILS.

        Then the actual most RELEVANT fact about a socalled worn out pv panel is that when it is twenty to thirty years old, and ready for replacement with a new one, it will simply be removed to another site someplace where labor is dirt cheap, and reinstalled, and remain in service producing fifty percent of its original output for ANOTHER twenty years or more.

        Furthermore, plenty of fossil fuel free electricity will enable us to EXTEND the life of our limited endowment of oil by enabling us to transition to electrically driven cars and light trucks over the next couple of decades, leaving the oil for use in places where it is really needed, such as out on the farm. It’s not likely that batteries will be good enough anytime soon to power a big tractor or combine with three hundred or more horsepower running flat out for twenty hours a day except when the operator needs to take a pee over the side or it’s idled back turning a corner.

        I have a great deal of respect for Euan, but there is little to no acknowledgement at his site of the one absolutely critical fact about depending on fossil fuels. They aren’t going to last forever in a world with an increasing population and a growing economy.

        And in actual fact, the long term trends of both population and economy are sharply UP, and likely to remain UP until resource shortages FORCE them to turn down.

        We may have another generation, maybe two at the outside, before the depletion of fossil fuels results in the mother of all economic crashes, followed on by the Four Horsemen.

        Prudence dictates that we keep it pedal to the metal on renewables.

        • GoneFishing says:

          “We may have another generation, maybe two at the outside, before the depletion of fossil fuels results in the mother of all economic crashes, followed on by the Four Horsemen”
          Possibly, that may never happen, since the economies will be boosted by the transition to other energy sources and be more efficient and resilient due to those changes. Change can have a great positive effect. Breaking away from the old paradigm may cause a creative wave of thought and action that will help with some of our other predicaments.

      • Caelan MacIntyre says:

        Hi GoneFishing,
        I posted your comment over there and got a couple of responses to it so far:

        “Solar panels lose about 1 percent of their production every year. Take that to 50 percent and it’s 70 years. …” ~ GoneFishing

        “After that start it is hard to take anything… seriously.

        If the person can’t be troubled to learn what causes failures …

        Perhaps you should refer them to this.

        http://energy.gov/sites/prod/files/2014/01/f7/pvmrw13_openingsession_asu_mani.pdf

        Or after they say that was then this is now, this one.

        http://energy.gov/sites/prod/files/2014/01/f7/pvmrw13_ps2_cfv_pratt.pdf

        T2M” ~ Thinkstoomuch

        “The proper way to answer Ferroni & Hopkirk would be another extended ERoEI for solar PV. It looks like pro-solar brigade are not competent enough to do that. As such I’ll take Ferroni & Hopkirk.” ~ mark4asp

        • GoneFishing says:

          Definite dim bulb responses. Degradation rates tested at the NREL (that is National Renewable Energy Laboratory) are generally 1 percent per year and lower. You do hang around a bunch of slow ones don’t you? Don’t know the difference between degradation rates and mechanical failures. http://www.nrel.gov/docs/fy12osti/51664.pdf

          In real life, power production PV facilities are showing almost 100 percent availability (that means they are producing about as much power as if the panels and system had no failures) over many years, even after serious lightning strikes. The inverter is the weak part of the system and also quickly repaired with no loss of efficiency. Apparently, reliability is not an issue under real conditions.
          Accelerated lab conditions often do not accurately mimic real world conditions, but the technicians can’t wait that long.

        • Ulenspiegel says:

          “The proper way to answer Ferroni & Hopkirk would be another extended ERoEI for solar PV. It looks like pro-solar brigade are not competent enough to do that. As such I’ll take Ferroni & Hopkirk.”

          What a BS. F&H make a claim that runs contrary to most of the published papers. Therefore, it is THEIR job to deliver good data. They do not.

          To cite them because they support your personal fact free opinion tells me something about your ability to survive in a serious scientific discussion.

          Or from a different POV: Why did F&H use their two layers of fog (“metastudy”) instead of providing up to data numbers on PV? Could it be that their intention was to create a nice piece of propaganda? 🙂

    • Ulenspiegel says:

      CMI, have you rad and understood the paper and the references it cites?

      Hint: The methodology in your cited paper is weak, therefore, there is a very high chance to look like an idiot in a few months. 🙂

      That you do not understand the limitations of the paper becomes clear when you post the above pic, which is of course to a certain extend nonsense. 🙂

    • Duncan Idaho says:

      This is a question that needs to be answered, and I think it still hasn’t.
      Most get costs mixed up with energy.
      What is the actual EROEI when extruded aluminum, minerals form the Congo, etc are added in.
      PV costs are dropping.
      Is energy needed to produce them also dropping to a point where they are not a energy sink?

      • Fred Magyar says:

        Fer crimminie’s sake ALL of industrial civilization is one gigantic energy sink and you can not exclude the entire fossil fuel infrastructure from that!! So why is it ok to ONLY include materials that are used in the manufacture of things like PV panels and wind turbines? This whole argument is beyond ridiculous!

        NOTE: I am not singling out Duncan here, my comment is about the entire ridiculous EROEI calculations from the study by Ferroni and Hopkirk! They are either completely full of shit or agenda driven.

        • Duncan Idaho says:

          Come now Fred— it does matter.

          • Fred Magyar says:

            What I’m trying to say is that you can’t do these kinds of calculations only for what goes into producing say PV panels and say the EROEI for them is lower than for a coal power plant. You also need to calculate all the energy sinks along the way that went into mining, transporting manufacturing machinery, and everything that went into building that coal plant including the food consumed by the labor building it. Otherwise It’s completely disingenuous! You need to compare apples to apples not apples to oranges! If you do it that way I’ll bet you find the EROEI of the coal plant is even lower than the EROEI of PV!

            • Duncan Idaho says:

              Agree–
              But life thrives on excess energy.
              If there is not, you die.

              When we actually get down to real time energy inputs, EROEI will be a matter of life or death.

              • Fred Magyar says:

                But life thrives on excess energy

                Couldn’t agree more!

                We know this stuff. from Ecosystem Thermodynamics

                http://www.uni-kiel.de/ecology/users/fmueller/salzau2006/ea_presentations/Data/2006-07-05_-_Thermodynamics_II.pdf

                Our current industrial civilization exists because living organisms concentrated solar energy for us then died and their remains were then cooked for millions of years to produce coal oil and nat gas as fossil fuel.

                We figured out how to extract that energy and we all lived well but sooner or later we have to find ways to live on less but that less still has to be above a certain ratio of EROEI if we expect to do more than just survive.

                But to suggest that PV has an EROEI ratio of only 0.83 needs to be checked out very carefully. Let’s double check their math, their data and their assumptions. I’ve downloaded the paper and will read it more carefully later. Let’s just say I’m highly skeptical!

                • Duncan Idaho says:

                  I really want to know on PV–
                  No one seems to have the date.
                  I have a feeling, it might be just another techno narcissistic game.

        • Caelan MacIntyre says:

          Because fossil fuels go into their manufacture? And because if it is an energy sink, then it’s a waste and an addition of C02 that wouldn’t otherwise be added?
          Is that right? Because if it is, then that would seem like added and needless danger to your coveted coral reefs, Fred.

          • Fred Magyar says:

            First they are not MY coveted coral reefs they are an ecosystems on which a lot of life depends. They belong to you too!

            Second fossil fuels are going into the manufacture of all kinds of machines and system that emit plenty of CO2 . If that same fossil fuel goes into a PV panel it will emit no CO2 while it is producing energy.

            I’m sorry but I’m not buying their calculation results of an EROEI ratio of 0.83 for PV in Germany, that’s just bogus!

            • Caelan MacIntyre says:

              Agreed about the coral reefs, Fred, we should all covet them.

              As for the PV’s, because I have limited time right now I decided to try something different and post some replies on here to Euan’s site and vice versa.
              I found the study/paper independently of his site, and it’s being mentioned elsewhere as well.

              Euan Mearns says:
              May 10, 2016 at 8:25 pm

              “Caelan, I have been presented with similar numbers on an email thread. I have taken $300 and compounded 5% per annum finance costs over 30 years and get $1235. Add cost of inverter, installation, inverter replacement and maintenance and I don’t see much difficulty in doubling that. And then add the additional costs for intermittency. This is why subsidies are needed. Consumers are being asked to pay the bill for 30 years electricity today. This is the same argument as my CO2 argument. 30 (or 25) years worth of CO2 is already up there.

              Of course its difficult to find a place for money that pays 5% these days and an argument can be made that is because we are living more and more in a low ERoEI environment. The net energy just isn’t there to create wealth and pay rent.

              And I think its important to get to the root of the ERoEI. And by that I mean i don’t think we know the answer for high latitudes. I’m unimpressed by those who simply state solar PV is great we must build it everywhere, especially if the ERoEI is close to unity.”

        • islandboy says:

          They are either completely full of shit or agenda driven.

          Reminds of a time, not too long ago, when a troll who used to hang around these parts, posted an official looking graphic that, was supposed to have been part of a “study” published by the official sounding “Energy Research Institute”. For those who don’t remember, turns out that the ERI was a Koch funded “think tank” pushing their funder’s agenda. Always interesting when you “follow the money”. I wonder who funded the study by Ferroni and Hopkirk?

          I am more inclined to pay attention to studies funded by vested interests when the funding is fully disclosed, giving me a chance to adjust for bias. When the funding is channeled through front organizations, institutes or foundations with innocuous sounding names, attempting to conceal the source, I get really wary.

          • Caelan MacIntyre says:

            That’s complexity, islandboy. You engage in it as you engage in it. As we blow our precious time looking into/arguing about such things as vested interest funding, questionable publications, etc..

            It is the difference between us/you running around nude all day eating mangoes and making love under the sun and going for a swim or what?

            Putting solar panels on tropical rooftops and spending 7 hours a day in an office, a can.

            Can anyone say, we’ve lost our way? I can.

            • GoneFishing says:

              Caelan,
              I think you are dissociated from the culture and legalities that exist in the present time. Running around outside being nude all day is quite illegal everywhere around here. Besides, the poor esthetics that would cause if my neighbors did it.
              The picture of some destitute nude man covered in mango drippings should certainly be offensive, at best, to females. So the only love making would be with yourself. Females around here expect some decorum and civilized manners as well as financial backing.
              Swimming sounds like an excellent method of washing off the mango drips, but eating them all day would become fattening and boring. 🙂
              Why not sell the mangoes, buy the PV and live off the funds generated by the electricity? Buy a few clothes from a thrift shop too. All you need is excess mangoes.

    • sunnnv says:

      n.b. Ferruccio Ferroni is/was president of the NIPCC-SUISSE,
      a climate change denier group.
      His (apparent) Linked-in page (in German)
      https://ch.linkedin.com/in/ferruccio-ferroni-85480060
      has some fragment of “Head Division Safety bei Leibstadt Nuclear Power Plant”.

      Gee, wonder if he has any axe to grind???
      (in 2011, the Swiss authorities decided to phase out nuclear power).

      The hysteria over greenhouse gases used in the PV industry ignores:
      (a) they aren’t used as much anymore
      (b) they can be controlled via burn boxes/gas scrubbing systems.

      A few of the comments on Euan’s site are pretty good – there are definitely some errors in the paper.

      If you want real EROEI / Energy-payback-time data, go to people who have been studying this for decades: V Fthenakis or M de Wild-Scholten (and their colleagues).

      A review of PV ERoEIs:
      http://astro1.panet.utoledo.edu/~relling2/PDF/pubs/life_cycle_assesment_ellingson_apul_(2015)_ren_and_sustain._energy_revs.pdf

      The Preito/Hall Spanish PV study is a wrong on many counts:
      http://thingsidlikepeopletoknow.blogspot.com/2014/01/review-spains-photovoltaic-revolution.html

      • Fred Magyar says:

        TKS sunnnv! I was going to do some digging on my own you saved me the trouble.

        • wimbi says:

          dammit. The only real Q is

          DOES THE CONTEMPLATED ACTION REDUCE OR INCREASE HARM TO THE PLANET.

          Dirty energy invested to get more dirty energy to burn is BAD , and the bigger the get the badder.

          Ain’t this OBVOUS! EREOI is NOT the Q.

          • Caelan MacIntyre says:

            That’s my concern as well, wimbi, which is in part why I found the paper and elsewhere than Euan Mearns’ site (although in the process discovered he had it featured too) and is why I am doing my own sorts of digging.
            If there is a question, such as to the feasibility of so-called renewables like PV, then we have a responsibility to at least mention it, irrespective of our own, potentially-conflicting interests, biases or agendas. It works both ways.

            Anyone here in the PV or related industries for example?
            Anyone here working for government in the renewables subsidies department?

            Some so-called ‘clean, renewable’ energy in certain contexts is nothing of the sort, and to say nothing of Jevon’s Paradox (where, presumably, FF’s just keep on being burned in other countries anyway).
            Solar panels, batteries and EV’s ‘for everyone’ from BAU corporations, and subsidized by governpimps are not my idea of a reduction of harm to the planet. They are more like the next, or last, chapter of BAU.

            I seem to recall someone on here, maybe Fred, once posting a pic of solar panels on ‘mud huts’… What’s the expression? Be careful what you wish for? The monoculture of ‘Westernization’/’BAU’ infects, disempowers and destroys, along with the rest of the planet, traditional cultures and ways-of-life and makes them dependent on it.

            • “Solar panels, batteries and EV’s ‘for everyone’ from BAU corporations, and subsidized by governpimps are not my idea of a reduction of harm to the planet. They are more like the next, or last, chapter of BAU.”

              Not everyone wants to be a gardener. What other system would ever give you the internet you have today and the computer at your finger tips ? Are you suggesting we go back to individual lawless hunting and gathering ?

      • Caelan MacIntyre says:

        Thanks, sunnnv.
        I just quoted you over at Euan Mearns’ site, where I noticed you were…
        So you think the paper is wrong enough and that the apparent questionable ‘agenda’ or ‘affiliation’ with at least one of its authors is enough to invalidate it?
        Well we all have interests and some can become in conflict with our other interests we may have.
        I seem to recall Euan Mearns being in support of nuclear power but perhaps it was, instead, James Hansen, or both.

        At any rate, here’s a reply from Euan:

        “Caelan, I have been presented with similar numbers on an email thread. I have taken $300 and compounded 5% per annum finance costs over 30 years and get $1235. Add cost of inverter, installation, inverter replacement and maintenance and I don’t see much difficulty in doubling that. And then add the additional costs for intermittency. This is why subsidies are needed. Consumers are being asked to pay the bill for 30 years electricity today. This is the same argument as my CO2 argument. 30 (or 25) years worth of CO2 is already up there.

        Of course its difficult to find a place for money that pays 5% these days and an argument can be made that is because we are living more and more in a low ERoEI environment. The net energy just isn’t there to create wealth and pay rent.

        And I think its important to get to the root of the ERoEI. And by that I mean i don’t think we know the answer for high latitudes. I’m unimpressed by those who simply state solar PV is great we must build it everywhere, especially if the ERoEI is close to unity.” ~ Euan Mearns

        • Fred Magyar says:

          I’m unimpressed by those who simply state solar PV is great we must build it everywhere, especially if the ERoEI is close to unity.

          And I’m equally unimpressed with strawman arguements since no one that I know has ever argued that we must build out PV everywhere!

          “Caelan, I have been presented with similar numbers on an email thread. I have taken $300 and compounded 5% per annum finance costs over 30 years and get $1235. Add cost of inverter, installation, inverter replacement and maintenance and I don’t see much difficulty in doubling that. And then add the additional costs for intermittency. This is why subsidies are needed. Consumers are being asked to pay the bill for 30 years electricity today.

          This is a purely financial argument and refers at best to ROI. While EROEI stands for Energy Returned on Energy Invested which has to with physics not economics. That right there is fuzzy thinking.

          • Caelan MacIntyre says:

            I am unsure who would mean building out PV’s absolutely everywhere, beyond it as merely a figure of speech… but then again, it does make me consider the solar-panels-on-mud-huts image. So I guess the corporates would just love that… A panel on every roof, a car in every driveway, a screen in every hand, a death in every soul. And how is it paid for? With money. How? A job. A slave. A middleman. A cut. A skim. A dupe.

            I am a little out of my leisure and medium by crossposting replies and about a single paper, but it’s part of the creative process I suppose. I had thought of trying this with Javier (maybe with Real Climate).

            Euan Mearns is but one person. I highlight him because he featured the paper; pops in here once and awhile; and was part of the TOD staff. But it’s not his paper.

            At this point, what with the water-tread that finance appears to be now, I’m unsure how much water financial arguments and concerns would hold.

            And then there’s complexity and the increasing time taken to argue about and manage it…

            Sure there are different ways to transition a decline, so let’s look at them as if PV’s and EV’s were not the be-all and end-all of how to do it while being mindfully critical of them and other forms. Let’s especially take a look at the forms that might have more bearing on (the re-acquisition of) local, resilient, community-empowerment and self-empowerment.

            This is, after all, a peak oil site.

      • aws. says:

        David Murphy is a student of Charlie Hall. The podcast touches on the EROI of PV and Murphy points out that PV’s EROI is better than earlier estimates.

        EROI

        The Energy Transition Show

        Guest: Dave Murphy, Assistant Professor, St. Lawrence University

        Taping date: November 15, 2015

        All about EROI (Energy Return on Investment), the state of biophysical economics, the relationship between energy and ecology, and what EROI could and should tell us about the outlook for a fuel — for example, can we run a society on renewables?

        • Fred Magyar says:

          Tks aws, that was a pretty could talk and addresses much of what I have been saying here over the last few days. As a society we need to stop subsidizing most fossil fuels as their EROEI continues to drop and invest more in alternatives such as wind and solar because their EROEI is rising! We need to educate people on why that is the case!

        • Caelan MacIntyre says:

          Yes, I already highlighted these names. Again…

          “I have been asked to write a post reviewing the concept of energy return on energy invested (ER0EI) and as a first step in that direction I sent an email to my State-side friends Charlie Hall, Nate Hagens and David Murphy asking that they send me recent literature. The first paper I read was by Ferruccio Ferroni and Robert J. Hopkirk…” ~ Mearns

          So it’s a ‘survey’ and Ferruccio et al. is just the first submission.

          • Fred Magyar says:

            Ferruccio et al are full of shit! That piece on EROEI published in Elsevier is a pure propaganda piece funded by fossil fuel interests and therefore highly suspect!

            This guy is the CEO of Elsevier

            https://www.elsevier.com/about/company-information/management/ron-mobed

            Here’s another bullshit piece published by them

            Non-exhaust PM emissions from electric vehicles

            http://www.sciencedirect.com/science/article/pii/S135223101630187X

            Their arguments and methods are so full of holes it isn’t even funny!
            Hint, EVs DO NOT compare to braking of ICEs because they use regenerative braking… That’s just one glaring hole, read the piece and see how many others you can find!

            • Brian Rose says:

              Fred,

              You honestly believe that EVs don’t have disk brakes?

              Please, enlighten us on the higher accident rate of Teslas, LEAFs, Volts, etc.

              Come on, just take a single minute to Google search the brake mechanics of the EVS on the market. Do an even easier 30 second search of braking tests (required by Federal Law).

              The Tesla Model S is the safest vehicle ever produced according to NHTSA testing. Instead of being a contrarian, holding a pre-determined viewpoint, and searching for affirmation, just be neutral and actually do some damn research.

              • Dennis Coyne says:

                Hi Brian,

                I think Fred agrees, you may be responding to someone besides Fred. Fred means that regenerative braking isn’t accounted for by one of the studies, I am pretty sure he is aware that regenerative braking includes disk brakes as well.

                Also Fred said nothing about accident rates, so not sure what that is about.

                • Fred Magyar says:

                  I am pretty sure he is aware that regenerative braking includes disk brakes as well.

                  Yes sir! 🙂

                  Brake pads on EVs wear much more slowly than on ICE vehicles. So the argument that the added weight of an EV causes more particulate emissions from the brake pads is just plain false!

                  http://cleantechnica.com/2015/10/24/hidden-benefits-evs-regeneration/

                  • Brian Rose says:

                    Yeah, sorry Fred!

                    I somehow missed your “here’s another bullshit piece published by them” line.

                    I had read so much from Calaen that by the time I read that I exploded in irrational rage at the irrational rage of others.

                    Oh, the irony

  26. Lightsout says:

    DT Ultravert

    Do any of the oil guys here think that this will work.

    http://www.bwmonline.com/2015/05/highlands-natural-resources-completes-acquisition-of-a-75-interest-in-diversion-technologies-patents-portfolio/

    Highlands and Schlumberger are in on-going discussions with over 20 exploration and production companies to commercialise DT Ultravert in the US

  27. Doug Leighton says:

    SAUDI ARAMCO FINALIZES IPO OPTIONS AND PLANS GLOBAL EXPANSION

    “Besides proposing to sell a stake in the company, which would require it to release sensitive reserves data, Riyadh has asked Aramco to play a big role in developing industrial projects aimed at stimulating non-oil economic sectors.”

    https://ca.finance.yahoo.com/news/saudi-aramco-prepares-global-expansion-ipo-looms-090352293–finance.html

    • Aws. says:

      Could someone here offer a compelling reason to buy Saudi Aramco equity?

      • clueless says:

        As I previously pointed out, not only is there not a “compelling” reason, there is no reason. It would be like owning 5% of Buckingham Palace. Good luck with that investment – you would be lucky to get to look at it.

        But, Boone Pickens has a unique way of putting things. He said: “I would not invest in it with stolen money.”

        If I owned any fund that actually did invest, I would immediately sell that fund.

      • Ves says:

        aws,
        That is not serious business offer but political carrot dangling probably in front of US establishment. 5% of Aramco? Too little considering that Rosneft is dangling 20% in front of Chinese. This is just foreplay period.

  28. Oldfarmermac says:

    http://www.automotiveworld.com/news-releases/nissan-eaton-make-home-energy-storage-reliable-affordable-everyone-xstorage/

    The Nissan Eaton team is ” already ready ” to put supposedly worn out batteries from Nissan electric cars to work in home storage systems that will be similar to Tesla Powerwall systems, once there are enough of them available.

    Of course there is nothing that says they won’t be able to use NEW cells in their home storage system, lol.

    The naysayers have convinced themselves cars such as the LEAF will be worthless without a new battery once the range drops off significantly. I am not so sure about that. Plenty of people will be ready to buy an old Leaf that will still go forty or fifty miles on a charge, if it can be bought cheap.

    Plenty of people who seldom go more than a very few miles to work or to get groceries , etc , on a regular basis NEED a cheap running car, and an old LEAF would likely be the cheapest running car on the road, bar none, if it could be bought for five grand or less.

    The question remains , how long will the batteries REALLY last, once battery driven cars accumulate some years as well as miles.

    • HVACman says:

      The Leaf has a lower-than average battery life due to some early version chemistry problems (fixed) and poor thermal management (not fixed). A lot of batteries already swapped out in hot climates. Should be quite a few available for power duty. Power duty is “light” duty for a pack designed for automotive duty. a 30 kWh pack in an EV could see daily demands averaging 12-15 kW and peak of 120 kW, with charge rates up to 40 kW in FCDC mode. In power duty, the same pack will only see 3-5 kW peak charge/discharge cycles. moderate energy, low power. A good retirement job. Powerwalls are the battery equivalent of being the Walmart greeter. These old geezer packs can probably get another 10-15 years before it is time for “recycling”.

  29. Doug Leighton says:

    THE PARTY’S OVER IN ALASKA

    “America’s Last Frontier is in trouble. The 40-year oil boom that turned Alaska from a frigid backwater into one of the nation’s richest states is over. Not only have petroleum prices crashed, but Alaska’s supply of crude is running out….

    ….with 90 percent of the general fund revenue tied to oil, the collapse has been devastating. Alaska, facing a $4 billion budget deficit, is one of four energy states that have slid into recession over the past year because of cheap oil. The state’s rainy day fund is burning through $11 million a day. If that keeps up, it will be out of emergency funds within two years.”

    http://www.bloomberg.com/news/articles/2016-05-06/the-party-s-over-in-alaska

    • GoneFishing says:

      Alaska would make a great National Park and conservation area. Tourism may be it’s future.

      • aws. says:

        It’s a long way away if you can’t fly?

      • Its very far for most people, there’s a limited time window because it gets too rainy, snowy and cold after September, and the attractions are nice precisely because they aren’t too crowded. It’s also fairly expensive because so much has to be flown in or brought by boat into Anchorage.

        • GoneFishing says:

          Then the people should move out and leave it to nature. Much better use for it anyway.

  30. sunnnv says:

    While looking for more info on tamaya 1, the errant PRODUCT tanker,
    I found this on gcaptain.com

    https://gcaptain.com/big-oil-abandons-2-5-billion-in-u-s-arctic-drilling-rights/
    Big Oil Abandons $2.5 Billion in U.S. Arctic Drilling Rights

    For a U.S. citizen, is this “thanks for the donation to Uncle Sam”, or is this “2.5 Billion is a big chunk of change for the commercial sector to have to write off” ???

    • Anonymous says:

      Drilling rights are usually an agreement to spend a certain amount on exploration activities. If that is not spent in the agreed period the rights are lost and can be re-awarded to another interested party, if there are any. They are not direct payments to the owners, which only come through royalties and taxes once something is discovered and produced.

      • Oldfarmermac says:

        I think the point is that the oil companies PAID Uncle Sam the two and a half billion for the drilling rights, which are awarded by way of competitive bidding.

        Uncle is not going to give that money back.

        • Anonymous says:

          No they didn’t. All they said was that they would spend that much in exploration over (I expect) 5 or 10 years. They might have to pay a few million in fees per year, especially to extend the rights if they hadn’t actually done any work. No oil company would agree to pay out that amount of money without knowing there was something there to find, or even then they wouldn’t agree to losing that amount of money for 10 to 20 years before getting any returns.

        • Federal OCS lease rounds do require an up front bonus. I have seen sets of blocks picked up with bonuses that ranged in the hundreds of millions of $.

          One thing we have to do when we run económics for developments in such pricey acreage is to compare the net cash flow from dropping the lease and writing off all costs versus the pv of going ahead.

          In some cases we have had discoveries, but the net after tax effect was better for dropping than going ahead. That’s because the after tax of dropping a $1 billion bonus lease is roughly $360 million plus. The after tax value of development depends on the discount rate, but if a company uses a 12% rate, then getting more than $360 million is difficult.

  31. sunnnv says:

    Is the once mighty Brent no more?

    From Feb 3, 2015:
    http://gcaptain.com/shell-plans-start-decommissiong-north-sea-brent-delta-platform/

    “Brent Delta stopped producing oil in November 2011 and after several years of assessing alternative uses for the platform Shell decided decommissioning was the best way forward.

    The remainder of the Brent field, whose platforms Alpha and Bravo stopped producing oil last November, is expected to be decommissioned in a second phase.”

    Oh, I guess so – thought is was close, but didn’t realize IT WAS ALREADY PAST.
    Sobering.
    Was I asleep or something? “Not with a bang, but a whimper”
    http://www.shell.co.uk/sustainability/decommissioning/brent-field-decommissioning.html

    You mean, the oil actually WILL run out some day? Who’d a thunk it? ;^)
    (and the problems start when oil production noticably peaks vis-a-vis demand …)

    The gory details … 31 tonnes of batteries, 10 tonnes of asbestos, 7 tonnes of wood, … in the Brent Delta topside. A mondo ship will be driven beneath the topside, diamond wire cutters will free the topside from the legs, then the 24,186 tonne unit will be lifted and hauled off in one piece to be scrapped.
    The lift and transport are scheduled in June 2016 (as of 6 Feb 2015).

    http://www.shell.co.uk/promos/brent-delta-topside-decommissioning-programme-june-2015/_jcr_content.file/1436182884549/9d615b73c01a269b7b249ccd17862d93/brent-delta-topside-decommissioning-programme-june-2015.pdf

  32. Daniel says:

    I found the below graph extremly interesting, since I knew that the US produces hell of a lot of light “oil”, but I did not realize that it was in excess of 50%. No wonder your imports are soaring.
    P.S.: It would be interesting to see this developing over the years.

    • clueless says:

      Jeffrey Brown has been posting similar information for a long time, although I have not seen one of his posts in several months. But, that is an excellent graphic that I am sure he would have produced if he would have thought of it. [And maybe he did – I just have not seen it before.]

      I think that one of Mr. Brown’s points was that the 40+ API could be used with the less than 25 to some extent [which is the majority of our imports]. But, at some level, we just have too much of the 40+.

  33. Amatoori says:

    Some interesting Aramco reserve numbers. Sounds like a lot in the ground there.

    —-
    Company officials said Saudi Arabia had discovered a total of 805.6 billion barrels of oil, of which 141.5 billion had already been produced and 260 billion barrels were considered “proven”, the industry term for reserves that can definitely be extracted.

    Aramco also had 403 billion barrels of reserves it could probably extract, they said, adding that it hoped to add another 100 billion barrels to total reserves by 2025 by increasing the recovery rate by 50-70 percent using new technology.
    —-

    http://www.reuters.com/article/us-saudi-aramco-idUSKCN0Y10XL

    • Eulenspiegel says:

      With 11 million barrel a day they produce about 40 billions a year, so it is 10 years until they are completely dry, and another 2,5 years with the new technology? Or is here some mixing up from barrels and tons?

      • Toolpush says:

        Eulenspiegel,

        I think you need to move your decimal point one to the left!

        The whole world only uses approx 30 billion bopd.

    • clueless says:

      Something just does not make sense to me. They are saying that at current production levels, they can supply oil for the next 165 years. So why do they have to diversify? I can almost see it if they said that they wanted more citizens to be employed. But, they are diversifying into industrial jobs. Chemical plant joint ventures. Their huge shipbuilding effort to produce tanker and “oil rigs,” etc. Those jobs will be filled largely by foreign workers and robots.

      If they said that they were going to establish a “silicon valley” of the Mid-east, well, I could see that. Teach their kids high-tech skills.

      Since they have already “found” the oil, and have the infrastructure in place, it would be highly likely that if the world reduced consumption to 10 million bbl/day, that it would all come from Saudi Arabia. Their costs would just always be far below anyone else.

      • Doug Leighton says:

        World demand is currently nearly 96 million barrels (oil and liquid fuels) per day or say 35 billion barrels per year. Do you think it’s likely world consumption can be reduced to 10 million bbl/day? And, perhaps Saudi pronouncements are best taken with a grain of sand, sorry, salt.

        • likbez says:

          Saudi pronouncements are best taken with a grain of sand, sorry, salt.

          IMHO this young prince currently in power is a typical adventurist. He is an excellent illustration of the danger of absolute monarchy or any too high concentration of power in single hands 🙂

          Other then religious tourism (which brings less then 10 billion a year) all their efforts are just reshuffling the chairs of the deck of Titanic. Remove oil and gas and they are bankrupt and probably will not last long as an independent nation.

          If so, why on Earth they are selling their strategic resource for peanuts? Is this kind of madness or what? Unless their plan is to move royal family to France. And even in this case it is a stupid plan.

        • clueless says:

          No, I do not think that world consumption will be reduced to 10 million bbl/day. My point was, if they have as much oil as they claim, and if Ron is right about peak oil, then their market share is going to rise dramatically.

          So, I am with Libez: Why would they want to sell oil now for peanuts and what is their rush to diversify? I do not believe that they have that much oil. I do know that years ago, the Mideast started sending their oil people to all of the major conferences in the US that discussed EOR.

      • RDG says:

        “Teach their kids high-tech skills.”

        Anyone with an IQ higher than 50 can obviously see that the products (Google, Facebook, Apple, Amazon, etc) of Ponzi School (Harvard) are worthless.

        What is Silicon Valley producing other than a transition to the Wimbi Economy (teepees, bicycles, and compost pile)? Automated Ev’s is the sudden realization that you are too poor to own a car. How come?

        The pseudos don’t want to get their hands dirty and breath in a few fumes. Instead of being the last ones clinging on to the life saver of crude oil, they will face a firing squad. They innovated themselves right into the grave.

        Keep throwing more useless charts up and handwaving “Everythings going to be fine”

    • The article’s author got confused, garbled the numbers, the net result was a fuzzy story.

  34. aws. says:

    This viral climate GIF offers an incredibly clear view of rising temperatures

    Updated by Brad Plumer on May 10, 2016, 4:30 p.m. ET

    This is one of the clearest visualizations of global warming I’ve ever seen. Ed Hawkins, a climate scientist at the University of Reading, recently made this mesmerizing (and now-viral) GIF showing world temperatures spiraling upward over time between 1850 and 2016

    Image had to be resized. Go to Vox to see the gif.

  35. The EIA’s Short Term Energy Outlook came out yesterday. This chart is US lower 48 C+C less the Gulf of Mexico, in million barrels per day.

     photo STEO Lower 48_zpshmxr40qe.jpg

    Notice the increase in the decline rate increase that begun in March, one year after the peak.

    • AlexS says:

      The EIA has significantly increased its oil price projections for 2016 and 2017.
      The average WTI price for 2016 is now forecast at $40.32 vs. $34.60 in April 2016 STEO
      Forecast for 2017 was increased to $50.65 from $40.58

      Forecast for December 2016 is now $45/bbl vs. $35 previously,
      for December 2017: $59/bbl vs. $47 in previous monthly report

      • AlexS says:

        As a result, U.S. C+C production forecast for 2017 average was increased by 150 kb/d,
        including 130 kb/d for Lower 48 states ex. GoM and 30 kb/d for the Gulf of Mexico output. Forecast for Alaska for revised downward by 10 kb/d.

        According to the EIA, U.S. crude oil production averaged 9.43 million barrels per day (b/d) in 2015. Production is forecast to average 8.60 million b/d in 2016 and 8.19 million b/d in 2017.
        This represents a decline of 830 kb/d (-8.8%) in 2016 and 410 kb/d (-4.8%) in 2017.
        In April 2016 STEO the EIA had projected a decline of 560 kb/d in 2017.

        US C+C production forecast: STEO May16 vs Apr16

      • AlexS says:

        Lower 48 ex GoM production is now expected to remain stable at around 5.9mb/d for the whole year 2017, down from 7.41mb/d in 2015 and 6.47 mb/d in 2016.

        • AlexS says:

          chart for Lower 48 ex GoM

        • likbez says:

          Alex,

          Lower 48 ex GoM production is now expected to remain stable at around 5.9mb/d for the whole year 2017

          That’s where we can see benefits of smoking something strong for forecasting 🙂

          That either means the price of oil in 2017 moved to level over $80/bbl or that folk in EIA is simply hallucinating. I am not sure that you can stabilize production at price levels below $80/bbl after shale oil/Saudis induced price crash.

          Generally EIA is a mixture of statistical agency and a political organization and while they data for actual production probably are more of less OK, their forecasts in reality is always a political statement of sorts.

          • AlexS says:

            likbez,

            at $50 WTI, most LTO producers will remain cash-negative, but nevertheless they will be increasing drilling/completion activity.
            Banks will still be reluctant to increase financing of the shale sector, but other categories of investors (including private equity) will be happy to invest tens of billion dollars in shale companies’ bonds and shares. There will be asset and corporate M&A deals.

            Note that, to maintain stable LTO production, a lot less rigs are needed than in 2012-2014, when production was increasing by 1 mb/d per year.
            So, the increase in the US onshore oil rig count will be very gradual.

            Cost deflation of 2015-16 will not continue next year, but the trend will not reverse to cost inflation due to significant spare capacity in oil services sector.

            Therefore, a scenario of flat production from January to December 2017 does not seem unlikely.

            • Reno Hightower says:

              Just depends on PE. They are only staying in core areas (Permian) and for their model, they need to feel comfortable on where prices are going to be 3-5 years out. They fund the companies, ramp up production, build up the PUD inventory and then sell out or take the company public. If they do not feel comfortable that they can do this, they will not be funding any more companies in the near term. They will tread water with the ones they have until prices turn around.

            • Ves says:

              ” but other categories of investors (including private equity) will be happy to invest tens of billion dollars in shale companies’ bonds and shares.”

              Alex,
              Why private equity (not the delusional ones) would be happy to invest into cash negative companies? With just of hope of price going up? But the price is down because of the exact these companies they want to invest.

              ” Cost deflation of 2015-16 will not continue next year”

              Cost deflation will continue even further if world production does not slow down. The name of the game in Canadian oil patch is low balling for the price of the services. Every single project (even the smallest one) has bidding process and the hungriest (not the best) are going to win. It is real version of movie Hunger games. I don’t think it is that much different anywhere in the world. Have you seen prices on offshore rigs? 10 cents on a dollar? That is cost deflation that keeps marching.

              • AlexS says:

                Ves,

                US E&Ps were able to sell about $10 billion in equity in 1Q16, most of it in January-February, when oil price was around $30 and Goldman Sachs and others were predicting $20. Why someone was investing in those cash-negative companies at the bottom of the cycle? And why they will not be investing when oil price will rise to $50 with prospects of further growth?

                Cost deflation will not continue in 2017 as demand for drillling and fracking services will start to gradually recover.

                • Ves says:

                  US E&Ps were able to sell 10 billion not for the purpose of investing but for hiding the losses for little bit longer. That shale business model is dead.

                  • AlexS says:

                    “That shale business model is dead.”

                    But investors don’t think so.
                    Despite all those bankrupcies, they continue to invest in shale players, particularly in those who continue to increase production volumes.

                    A good example is Pioneer, which is up almost 60% from 52-week lows.

                    Interesting quotes from an article in Bloomberg:

                    “The company, meanwhile, is spending a lot of money now in the belief that oil prices will soon rise. Not everyone thinks it will pay off. Criticizing shale drillers at the Sohn Investment Conference a year ago, David Einhorn singled out Pioneer, in which he has a short position, as the “Mother-Fracker.” Einhorn, president of Greenlight Capital, argued that Pioneer lost $12 for every barrel it developed over the previous nine years. “That’s like using $50 bills to counterfeit $20s,” he said.
                    ……………………..
                    Daniel Katzenberg, a senior analyst at Robert W. Baird, says investors aren’t worried about profits as much as production. Quarter after quarter, the output of Pioneer’s new horizontal wells has exceeded expectations, and that’s why the stock price keeps rising. “What the market sees is that they’re sitting on one of the most attractive and economic resource plays in the world,” says Katzenberg. “Pioneer is tasked with proving their acreage is as good as the hype.”

                    http://www.bloomberg.com/news/articles/2016-05-11/how-oil-s-most-boring-ceo-found-himself-atop-10-billion-barrels

                    I like this way of thinking: “investors aren’t worried about profits as much as production”.

                    However absurd it sounds, that is true. There is a class of investors that aren’t worried about profits.

                    Same can be said about investors in Tesla: “investors aren’t worried about profits as much as new EV technologies”.

                  • likbez says:

                    That shale business model is dead.

                    Dead — no. Severely squeezed — yes. New financing will be tough for survivors, and debt overhand will not dissipate any time soon.

                    As for investors putting money into questionable companies (that Alex used as a counterargument) this is just throwing good money after bad. Most of those “new” investors are already up to the neck in this s**t and are afraid to write down holdings. So they decided to double down hoping that rising oil price will bail them out.

                    Nothing new here. America became the nation of speculators, big and small, so a new sucker is born every minute.

                    They expect that the rising tide will lift all boats. And they already forgot lessons of 2008: I do not think investors memory (as a class) lasts more then five years.

                    So a new bubble and related fraud can have any period larger then five years. Almost eight year passed from previous crash, so it’s about time to milk those suckers again 🙂

                    I think there will observable divergence between oil price rise and energy mutual funds/ETFs price rise. The latter will rise more slowly as bankruptcies might spoil the show.

                  • Ves says:

                    ” Daniel Katzenberg, a senior analyst at Robert W. Baird, says investors aren’t worried about profits as much as production”

                    Alex,
                    ” investors aren’t worried about profits as much as production”. Is this America? Profits are not important? Well if investors are not worried about profits than what is this? Charity, non-profit think-tank venture?

                    US Production is falling (substantially) and rigs are still declining so obviously “investors” are not interested in production either. So Mr Katzenberg is talking baloneys. There are no investors. This just last gasps of money printing. You can see the cracks everywhere.

                    Tesla is different. Tesla is still in hype ‘stage” considering the number of vehicles sold.. You can run up Tesla stock so high just outside solar system and crash back and nobody will notice a thing. Oil is different because all 7 billions of us are using it.

                  • Ves says:

                    Alex,
                    Here is what IEA saying this morning:
                    “If oil prices average $40 per barrel, U.S. shale oil production will likely decline by 3 million barrels per day between 2015 and 2020, and even if oil prices reach $60 per barrel, a decline is still imminent, according to the International Energy Agency (IEA).
                    US shale production is not expected to halt the decline until we reach prices of $70 per barrel over the same period.”

                    IEA is completely disagreeing with anyone who is still claiming that shale has life below $70. And you know what is interesting is that that 2 years ago IEA & EIA were singing the same song but at this point IEA is splitting with that narrative because it is so obvious that you cannot hide it anymore. There will be time in a year when EIA will report the same and Wall Street will proclaim “We are shocked. No one could have predicted this”. Same old same old.

                  • AlexS says:

                    US LTO production forecast

                    Source: IEA Medium-Term Oil Market Report, February 2016

                • Ves says:

                  Alex,

                  That chart was from February. The paragraph from IEA that I mentioned above is from today. Things change.

  36. AlexS says:

    The EIA’s International Energy Outlook 2016 is out today

    The new projections imply 1% annual-average growth in global liquids consumption for the period 2012-2040, including virtually zero growth in the OECD countries and 1.9% annual average growth in non-OECD countries.

    World liquids consumption by region, Reference case (mb/d)

    • AlexS says:

      World total energy consumption by source, Reference case
      (Quadrillion Btu)

      • AlexS says:

        Share of various sources in total world energy consumption (%)

        • Thanks for the chart Alex. I fail to see any exponential growth in renewables, (other in this case and that includes hydro and geothermal), or any exponential shrinkage in liquids. I think the EIA would have a strong disagreement with Dennis. 😉

          • AlexS says:

            Ron,
            Assuming that growth in hydro is very low, other renewables are likely to increase at a high rate, but from a very low base. So fossil fuels will retain their dominating position in total energy consumption. That’s a common view among all key energy forecasting agencies

            “I think the EIA would have a strong disagreement with Dennis.”

            And with many other contributors to this blog 😉

            • Oldfarmermac says:

              My personal opinion is that renewable energy in the form of wind and solar generated electricity will continue to grow by leaps and bounds for one overwhelming practical day to day reason. The price of DELIVERED oil, coal , and gas are virtually certain to continue to go up in both real and fiat money terms.

              Hardly anybody ever mentions it, but there is no reason at all a country with oil and gas to export into a sellers market can’t levy high export taxes, either directly or by other less obvious means.

              Countries that are able to proactively do something about the cost of imported fossil fuels are going most likely going to go proactive by pushing domestic renewable energy production to the extent they can, and this means going with wind and solar electricity and electrified transportation to the extent possible.

              My guess is that the world as a whole will continue to experience very high growth rates of wind and solar power, and that electrified auto and light truck production is will grow a hell of a lot faster than most people expect.

              The price of wind and solar electricity can be locked in today for the next twenty or thirty years. The storage issue might never be solved , but for damned sure gas and coal fired plants can be dialed back to idle or shut down when the wind is blowing. The argument that coal fired plants can’t follow a varying the load is about eighty or ninety percent pure chickenshit.

              Utilities have been load following with coal fired plants ever since the first coal plants and the first bits of the grid were built. It takes a little more coal or gas. Nobody who knows will say how much, but the savings certainly exceed the cost of ramping up and dow, which has always been done on a daily basis.

              If anybody has trouble understanding the implications of this lock in, think about the monthly payment on a given house thirty years ago, and the rent you can collect on that same house today. It is not unusual at all for both rents and house prices to have gone up by a factor of four over that time period.

              WHY should we expect fossil fuels to stay cheap, with the possible exception of coal, which is still KNOWN to be very plentiful?

              • Dennis Coyne says:

                Hi Old Farmer Mac,

                Not everyone agrees that coal is plentiful. David Rutledge, Steve Mohr, and others have suggested coal may peak sooner than many believe, I think they may be correct and if so even coal will not remain cheap.

                I agree with all your other points.

                • Fred Magyar says:

                  A quick review of what the late Dr. Al Barlett had to say about coal in his talk about Arithmetic, Population and Energy. Also since this thread has delved into a discussion on EROEI I’m also starting to think that as time goes by the EROEI of fossil fuels is going to make them uneconomic and we won’t be able to continue to throw good money after bad by investing in them any longer…

                  Well, in the energy crisis about thirty years ago, we saw ads such as this (shows slide). This is from the American Electric Power Company. It’s a bit reassuring, sort of saying, now, don’t worry too much, because “we’re sitting on half of the world’s known supply of coal, enough for over 500 years.” Well, where did that “500 year” figure come from? It may have had its origin in this report to the committee on Interior and Insular Affairs of the United States Senate, because in that report we find this sentence: “At current levels of output and recovery, these American coal reserves can be expected to last more than 500 years.”

                  There is one of the most dangerous statements in the literature. It’s dangerous because it’s true. It isn’t the truth that makes it dangerous, the danger lies in the fact that people take the sentence apart: they just say coal will last 500 years. They forget the caveat with which the sentence started. Now, what were those opening words? “At current levels.” What does that mean? That means if—and only if—we maintain zero growth of coal production.

                  So let’s look at a few numbers. We go to the Annual Energy Review, published by the Department of Energy. They give this (pointing) as the coal demonstrated reserve base in the United States. It has a footnote that says “about half the demonstrated reserve base… is estimated to be recoverable.” You cannot recover —get out of the ground and use—100% of the coal that’s there. So this number then, is ½of this number (pointing). We’ll come back to those in just a moment. The report also tells us that in 1971, we were mining coal at this rate, twenty years later at this rate (pointing). Put those numbers together, the average growth rate of coal production in that twenty years: 2.86% per year. And so we have to ask, well, how long would a resource last if you have steady growth in the rate of consumption until the last bit of it is used?

                  I’ll show you the equation here for the expiration time. I’ll tell you it takes first year college calculus to derive that equation, so it can’t be very difficult. You know, I have a feeling there must be dozens of people in this country who’ve had first year college calculus, but let me suggest, I think that equation is probably the best-kept scientific secret of the century!

                • Oldfarmermac says:

                  Hi Dennis,

                  I won’t argue about the peaking of coal production,and I hope you are right about it.

                  But I believe that there is still enough easily accessible coal for it to stay cheap for a long time yet.

                  A large part of the reason it probably will continue to be cheap for quite some time is that coal is being displaced to a substantial extent by wind, sun, and natural gas.

                  So such coal supplies as are easily mined and shipped will not deplete as fast as we would otherwise expect. The more wind, solar, and gas sourced electricity, the greater the price pressure on coal producers .

                  There is a very good chance that only the lowest cost producers will be able to keep their doors open for the easily foreseeable future,probably for the next five or ten years at least.

                  Unless I am mistaken, there are some HUGE coal fields that are located in places that would require building everything from scratch, roads, housing, railroads, electric grid, etc, to exploit them.

                  So if coal peaks anytime soon, it will be because of market forces and politics, rather than a lack of coal in the ground that COULD be mined-IF I am right about these remotely located coal deposits.

                  • Dennis Coyne says:

                    Hi Old Farmer Mac,

                    For someone who understands microeconomics pretty well, you are not really thinking this through.

                    The concept that there is plenty of cheap coal is just not correct. We may have a lot of expensive coal, but we have already burned most of the cheap coal.

                    As wind and solar ramp up energy prices will fall and the price at which coal can be sold will fall as well.

                    What do you think will happen to the URR of coal if the price of coal falls? (Assume all else remains the same, never a good assumption, just a simplification that economists love, the old ceteris paribus just rolls off the tongue 🙂 )

          • Dennis Coyne says:

            Hi Ron,

            So you think their forecast is correct? 🙂

            Note that if they are wrong on oil and other fossil fuels, perhaps they are wrong in other respects.

            All of the major forecasts are wrong, only I have it right. 🙂

            For the sarcastically impaired, I am joking about being right, but I do think EIA is very optimistic about liquid fuels. Time will tell, it always does.

            • AlexS says:

              Dennis,

              the EIA indeed has been wrong in many of their forecasts on oil.
              But as I have shown in a post 2 or 3 months ago, they have been UNDERestimating production, particularly in the U.S., but also in Russia and some other countries.

              • Dennis Coyne says:

                Hi AlexS,

                If you look at some older IEO forecasts, the idea that they usually underestimate would not look right.

                Chart below shows EIA’s IEO 2006 and IEO 2016 reference cases for World Liquids consumption. The earlier forecast ends in 2030.

          • Ulenspiegel says:

            “Thanks for the chart Alex. I fail to see any exponential growth in renewables,..”

            The past projections of the EIA were a joke when it came to REs. The picture only shows that the quality of EIA projections has not improved.

            If you really want to get a picture that was/is/very likely will be near the reality (still too conservative) you have to read articles published by Greenpeace. Sorry. 🙂

    • AlexS says:

      World consumption of hydroelectricity and other renewable energy, Reference case
      (Quadrillion Btu)

    • Ves says:

      EIA: OECD liquid consumption flat for the next 30 years?
      What are they saying that OECD are going to have debt jubilee? 🙂

      They are not serious bunch.

      • AlexS says:

        U.S. liquids consumption: EIA International Energy Outlook (IEO) 2016 vs. IEO 2014 (mb/d)

      • AlexS says:

        OECD liquids consumption: EIA International Energy Outlook (IEO) 2016 vs. IEO 2014

    • Dennis Coyne says:

      Hi AlexS,

      In the text of the report they say their projection for C+C in 2040 is 100 Mb/d. That seems unlikely to me even if we assumed their high price case was more likely for 2040. What is your view, does 100 Mb/d of World C+C output in 2040 seem realistic?

      BP’s outlook looks more reasonable to me with C+C output at about 85 Mb/d in 2035, though that still seems optimistic to me.

      I expect no more than 83 Mb/d around 2020 to 2025, a plateau might be maintained for 5 years (if we hit this level by 2020), by 2030 World C+C output will be declining.

  37. Ovi says:

    Lower 48 oil production dropped by 80 kb/d in this morning’s EIA report.

    • Dennis Coyne says:

      Thanks Ovi,

      We know the monthly data is best and gets revised if it is wrong. The weekly data does not get revised.

      That chart tells me that the weekly data should be ignored because it is very inaccurate.

      • Ovi says:

        Maybe the weekly data is getting better. January and February look pretty good.

        • Dennis Coyne says:

          Hi Ovi,

          We can hope, time will tell.

          When we see weekly data track the monthly data faithfully for 12 months, I might start to believe it. Really only February weekly data matches the monthly data, that could be random.

  38. Pingback: Taladros y pensamiento mágico – Peak Oil Colombia

  39. Oldfarmermac says:

    The guy that wrote this article sounds more like an advertising man than a serious tech reporter, but nevertheless it’s worth reading.

    http://www.foxnews.com/leisure/2016/05/11/nikola-motors-sleek-hybrid-semi-is-tesla-trucks/

    I have no idea if this startup company has a shot at success or not.

    I do know that a semi is not going very far on a three hundred kWh battery pack, so it is going to have to run mostly on the natural gas motor. Older trucks with two hundred horsepower engines running flat out are barely able to maintain the speed limit on a dead level road. There is hardly any such thing as cruising in a fully loaded eighteen wheeler unless it has at least three hundred fifty horsepower. That’s just enough it has a little in reserve to maintain speed up a gentle grade.

    But maybe in five or ten more years, there will be affordable one thousand kilowatt hour batteries. That would be enough to go a few places on battery power alone.

    For what it is worth, I do think there will be plenty of DUAL fuel diesel and natural gas powered trucks on the road within a very few years IF gas stays dirt cheap relative to diesel fuel. It doesn’t cost that much extra to build a truck at the factory to run on both, considering that a trucking company can AVERAGE using over a hundred gallons per truck per day, and some use a lot more.

    A dual fuel truck can go anywhere on diesel, and still run on cheaper natural gas anytime it’s available. Just a few super stations along major highways could sell enough gas to cut quite a bit into the market for diesel fuel.

    • Dennis Coyne says:

      Hi OldFarmermac,

      For long haul land transport, when peak oil hits it will be cheaper to move 90% of long haul transport to rail. The rest might go by natural gas, but remember that there is very little refueling infrastructure for natural gas, so I like rail much better as that can be electrified over the long term.

  40. likbez says:

    http://www.resilience.org/stories/2016-05-09/groundwater-contamination-from-fracking-changes-over-time-study

    A new Texas study has found that horizontal oil wells fractured by the injection of high volumes of chemicals, sand, and water contaminate nearby water wells with a variety of heavy metals and toxic chemicals that fluctuate over time.

    In the last decade, North America’s $40-billion fracking industry has punctured uneconomic or ”unconventional” rock formations from British Columbia to Texas with long lateral wells that extend for miles underground.

    Then they blast open the surrounding formation with injections of water, chemicals, sand, fluids, or hydrocarbons. But industry can’t always control the direction of the fractures.

    ”In our most recent study, we found that as more unconventional wells were drilled and stimulated, more drilling-related contaminants were found in the groundwater,” study author Zacariah L. Hildenbrand told The Tyee.

  41. Duncan Idaho says:

    Scotland, Now Britain:

    Britain gets no power from coal for ‘first time on record’
    http://www.telegraph.co.uk/business/2016/05/10/britain-gets-no-power-from-coal-for-first-time-on-record/

  42. Toolpush says:

    Another one bites the dust!

    Or make that two.

    http://www.downstreamtoday.com/news/article.aspx?a_id=52127

    Linn Energy Files for Bankruptcy, SandRidge Misses Quarterly Filing

    HOUSTON, May 11 (Reuters) – Linn Energy filed for bankruptcy on Wednesday, and SandRidge Energy Inc said it could not file quarterly results in a timely manner, the latest sign of the turmoil a deep price crash has caused among small firms in the U.S. oil and gas sector.

    Linn’s filing for creditor protection brings to about 60 the number of U.S. oil and gas companies to go bankrupt since oil prices entered a slide in mid-2014.

    And just think. Linn Energy, only a month or two ago, maxed out their line of credit, paid the upper crust extra bonuses and 18 months pay.
    I wonder what they saw coming? So is this good luck or fraud?

    I shake my head sometimes, when it come to white collar crime, because this is just criminal in any view of the law, other than the letter of the law!

    • shallow sand says:

      Toolpush.

      It seems like the term “fiduciary duty” escapes most these days.

      Linn was not necessarily a shale company. They tended to own production all over the place and had way too much debt.

      Sandridge bet the ranch on horizontal Mississippian Lime wells. I would note Chesapeake also drilled many Mississippian Lime wells. Those were cheaper, but produce much less oil and too much water. Take a look at Sandridge’s Kansas wells. Pretty bad for $3 million each.

      Also read where Newfield has all of its EFS assets for sale, and also has Bakken acreage for sale. They are going to focus on the same areas in OK as CLR, which are primarily gas plays. CLR not completing wells in ND, and project 40% of BOE will be gas by year end.

      Further, we have been noticing practically all US shale producers are producing more gas and less oil. This development bears watching.

      Noted the comments above about whether shale is dead or not. It isn’t dead. There is still a lot of misinformation being tossed out there, I think several companies will be able to raise more equity if prices rise.

      However, once the tide turned, and US production started to fall, I think it will take some work to get back to US production growth. It appears companies are less positive on the Bakken and EFS oil window, than places such as Permian and Cana Woodford. The latter are more gassy, and oil declines are even more steep than the former. IMO growth in those areas may cause another gas glut, but not so much regarding oil. Only a small percentage of Permian wells produce over 100 bopd after 24 months. That is both Spraberry and Bone Spring.

      As for us stripper guys, we are still here. It has been harrowing and we are not out of the woods yet. But we still have cash, no debt, and barring another collapse, we will be just fine. If prices continue to hover in the $40s WTI this year, we wont be happy, but we will be ok.

      Shale will continue to fall further back on the treadmill in the $40s WTI scenario. ND has 26 rigs running today, one to stack, and 5 are Continental’s, who are not completing wells.

      What a ride this has been!!

      • Toolpush says:

        G’day Shallow.

        It certainly has been a wild ride. Interesting that the latest crazy has been to gas rich areas. Though, I keep seeing stories of more gas pipelines to Mexico and huge LNG plants in Brownsville and Corpus Christie. It did make me wonder where Texas was going to get all that gas. Maybe these guts in the Permian think they have the solution?
        I see Mountrail has only 3 wells being drilled, and they are all by CLR. I wonder if they are all on pre-existing pads, and when they are finally completed, will be able to tie directly into the then under utilized production capacity already in place?
        March Bakken numbers must be out very soon, and Helms has indicated a large fall, while Platts is saying not much of a change. we will see in a few days.

        BTW, Williston Exploration, has started a new well in Billings. I wonder if this is a conventional or shale well? Maybe a re-entry, being a 25.000 well?

        • coffeeguyzz says:

          Push
          You can go right to the Gis map on the ND DMR site and get those answers.
          The numbers that end in ‘N’ run south to north in increasing number.
          The numbers that end in ‘W’ run east to west in increasing number.
          These are grid #’s for the 36 square mile townships that cover most of the US west and were instituted back in the 1800s.
          The first number, always two-digit from 1 to 36, indicate which one square mile section of the 36 is where the well is.

          Continental’s three wells are all in the Sanish, near the river, and in a very highly developed area.
          The Rath Federal looks like it may have a 15,000′ lateral.

          The Williston Exploration is definitely a vertical and is surrounded by old, producing verticals.
          All can be seen on the Gis map.

          • Toolpush says:

            Thanks Coffee,

            It looks like I was not too far off the mark with my thoughts.

  43. PeopleOnhereAreStupiid says:

    This web site is full of loser that masturbate over the number of barrels of oil. People on here are too stupid to know the difference between volume and energy. It is not the number of barrels that matters, it is its chemical composition and energy per unit of mass. This blog is worst the peakoil.com.

    • daniel says:

      Thank god you are here now. Things already look better.

    • Doug Leighton says:

      Should we be using E = mc^2 or perhaps Planck’s constant as in E = ℏv ?

      • Fred Magyar says:

        Dunno, what are we going to do about photons?

        E = hc/λ

        Live this very moment

        http://www.solarimpulse.com/leg-11-from-Phoenix-to-Tulsa

        Solar Impulse

        Time of departure 12th May 2016 10:00 UTC
        Flight Time 0d 6h 5m 29s
        Distance 215 km (13 %)
        Altitude 14197 ft (4327 m)
        Batteries charge 41% (charging)
        Solar energy 30 kWh

        • Doug Leighton says:

          Well, I dunno Fred, if it’s energy per unit of mass that matters (as Danial claims) and photons have no mass then I guess we have a problem. ‘Course we were taught EM waves carry momentum and energy but that must be wrong. Maybe Danial will set the record straight for us.

    • Dennis Coyne says:

      Hi Everyone,

      I would suggest not responding to some comments so I can delete them.

      For the “Smart One”,

      Doug has explained in the past that we can use mass to approximate the energy of the petroleum liquids produced. I always report I’m barrels of oil equivalent when I have the data for oil output in metric tonnes as BP reports each year. Typically for average World C+C output by volume (barrels) the conversion is 7.33 barrels per metric tonne. See chart below, the red line takes consumption in metric tonnes and converts to barrels of oil equivalent(boe) at 7.33 boe/metric tonne.

  44. R Walter says:

    Bakken numbers out today, will be lower.

    If you invest in wind energy, you are investing in coal and oil.

  45. Caelan MacIntyre says:

    Tilting at Windmills, Spain’s disastrous attempt to replace fossil fuels with Solar Photovoltaics

    Prieto and Hall conclude that the EROI of solar photovoltaic is only 2.45, very low despite Spain’s ideal sunny climate. Germany’s EROI is probably 20 to 33% less (1.6 to 2), due to less sunlight and less efficient rooftop installations.”

    Ted Trainer, author of ‘Renewable Energy Cannot Sustain a Consumer Society’ and many other great books detailing what needs to be done, wrote this thoughtful response to what I wrote about the net energy conference:

    “Thanks Alice for your valuable comments on the EROI of P/v issue. Yes it is very disappointing that so much confusion and acrimony surrounds this crucial issue, and that they seem not to be moving to a resolution as quickly as they should be. There are of course big interests at stake, with the conventional high EROI assumption suiting the industry… At the very least Prieto and Hall should be commended for getting the whole messy issue of boundaries and components, and appropriate energy cost assumptions for the various components, on the agenda. Sadly the disputation over this issue illustrates the way scientists are not immune from prejudiced and nasty behaviour… when large scale research funding is at stake there can be strong incentive for competitors to reinforce perspectives that suit them…

    The most important issue he raises is in claiming that the energy input to PV production should be reduced to one-third, on he grounds that it is electricity and PV produces electricity. As I see it this simply depends on whether the electricity used to produce the modules is coming from PV (or wind or CSP) generating systems … and at present it isn’t. In a world where all electricity came from PV farms it would make sense to put the value of the electricity input into the denominator of an EROI, but in the presenter world the energy going into production is (mostly) coal

    It’s a shame libraries are putting many journals and books into electronic versions only. Especially this book. Microchips, motherboards, and computers will be among the first casualties of declining fossil fuels, because they have the most complex supply chains with many single points of failure, dependence on rare metals, and so on (see Peak Resources and the Preservation of Knowledge for details). I encourage you to get your (university) library to buy a hard copy of this book, so that future scientists and historians will understand why our society didn’t replace fossil fuels with ‘renewables’ even though we knew oil couldn’t last forever.

    On an energy form, Prieto recently wrote (March 2014): ‘Since we wrote the book, I have been able to experience a few more incidental factors: mice delightfully gnawing the cables and covers and optical fiber communication color cables, and storks excreting on modules with about 6 inches size -one cell- per excretion. Real life has many factors that they are not accounted in organized studies in labs, universities with particular technologies and plants in perfect irradiation places.’ “

    Renewables: The Next Fracking?

    “…renewables are by no means as environmentally benign as their more enthusiastic promoters claim.
    It’s true that they don’t dump as much carbon dioxide into the atmosphere as burning fossil fuels do—and my more perceptive readers may already have noted, by the way, the extent to which talk about the very broad range of environmental blowbacks from modern industrial technologies has been supplanted by a much narrower focus on greenhouse gas-induced anthropogenic global warming, as though this is the only issue that matters—but the technologies needed to turn sun and wind into grid electricity involve very large volumes of rare metals, solvents, plastics, and other industrial products that have substantial carbon footprints of their own.
    And of course there are other problems of the same kind, some of which are already painfully clear. A number of those rare metals are sourced from open-pit mines in the Third World worked by slave labor; the manufacture of most solvents and plastics involves the generation of a great deal of toxic waste, most of which inevitably finds its way into the biosphere; wind turbines are already racking up an impressive death toll among birds and bats—well, I could go on. Nearly all of modern industrial society’s complex technologies are ecocidal to one fairly significant degree or another, and the fact that a few of them extract energy from sunlight or wind doesn’t keep them from having a galaxy of nasty indirect environmental costs.” ~ John Michael Greer

    • Oldfarmermac says:

      The energy return on the energy invested in solar power is growing fast and is already sufficiently high to justify solar electricity in many markets on a dollars and cents basis.

      Anybody who says otherwise is promoting an anti renewable agenda for one reason or another.

      Such books and articles are invariably written as if they were authored by politicians speech writers out to tear down an opposing candidate. They exaggerate the hell out of minor faults while ignoring major advantages of solar power.

      Mice and storks?

      There are giant bulldozers scraping the tops off mountains near my home to get at coal. The valleys between the mountains cease to exist. At least the local people will have a few FLAT spots to play ball once the miners are gone. SARC light ON.

      You can bet your last can of beans that I could rip these links up, as my dear departed Momma used to say,” Like a chicken on a dry cow turd!” if I felt like taking the time to go thru them. So could anybody else who is reasonably objective and blessed with a working brain.

      Now let’s just think like ADULTS for a minute. Suppose we DON’T invest in solar power production, and instead burn up the fossil fuels that we COULD have put into solar infrastructure flying tourists here and there, manufacturing soft drink bottles and fast food wrappers to be tossed out on the side of the road, building more athletic stadiums, more office buildings, more shopping malls?

      The energy going into the solar industries is going to be wasted OTHERWISE if we DON’T build solar farms and individual systems.

      Furthermore even IF the return is only two to one, that’s still DOUBLE , and the industry is profitable in and of itself already in many places without subsidy, and will soon be profitable in and of itself in man more places, without subsidy. Any industry that provides employment, pays taxes, and does little or no harm while doubling the energy invested in it is a WINNER.

      And it is easy to find links that say the EROEI is way the hell higher than just two or three to one.

      • GoneFishing says:

        A four acre PV solar farm costs about 2 million dollars and produces 4.2 GWh annually of useful power. That is enough to power current EV’s for 13 million miles each year, or the equivalent of powering 1100 cars their average U.S. distance.
        No pollution, little maintenance, slow degradation rate. So for an investment of $1800, a car can run for decades. Less than the annual fuel cost of a typical ICE at industry sustainable prices of $4 a gallon.
        The area used by one large mall would be enough to power about 40,000 EV’s. So if we convert malls and other wasted land to PV solar farms, there should be plenty of power for transport.

        • Fred Magyar says:

          Now imagine if instead of individually owning those 40,000 EVs, communities shared a couple thousand of them when needed because walking or riding a bike isn’t feasible or public transport doesn’t go there. Now you begin to get a better picture of what the post BAU world might be like. It really isn’t all that horrible compared to going back to living in caves.

          It gets a bit tiring to listen to people saying Alternative energy and EVs can’t work because our civilization demands that every individual needs to drive around in their own 3,000 lb ICE powered vehicle!

        • Longtimber says:

          Master Dead Malls List: http://www.deadmalls.com/stories.html

      • PonziWorld says:

        Gee, the solar scams are unwinding. How sad.

        I guess thats what happens when they return 10’s of $’s a day instead of 10,000 $’s like oil.

        Too bad OFM is part of The Terminal Idiocracy

        • Fred Magyar says:

          Gee, the solar scams are unwinding. How sad.

          I guess thats what happens when they return 10’s of $’s a day instead of 10,000 $’s like oil.

          You don’t say!

          http://www.houstonchronicle.com/business/energy/article/Oil-company-bankruptcies-accelerate-7423978.php

          Oil company bankruptcies accelerated over the past few weeks as the recent rise in prices proved too little, too late for firms struggling to pay debts run up during the last boom.

          Eighteen North American oil companies filed for Chapter 11 bankruptcy protection in March and April, the most in a two-month period since oil prices began their slide in the summer of 2014. And it could get worse, analysts said. U.S. crude prices fell nearly 3 percent Monday in a sign the market could be headed for another drop.

          “There’s only so much staying power these companies have before their luck runs out,” said Pearce Hammond, an analyst at Simmons & Co. in Houston.

          Nearly 70 companies in the United States and Canada have filed for bankruptcy during an oil bust in which prices plummeted from more than $100 a barrel to less than $30 in less than two years.

          Returns 10,000 $’s like oil?!

          Do you live on the same planet as the rest of us? Sounds like it is someone other than OFM who is part of The Terminal Idiocracy!

          • scrub puller says:

            Yair . . .
            Yes FRED MAGYAR we got a couple of proper nana’s on here this morning . . . this RENO WOTSIT down thread is a goodun’ and PeopleOnhereAreStupiid has some interesting observations despite the aberrant letter usage in his handle. (big grin)

            Cheers.

          • GoneFishing says:

            Sounds good PW, sell 9 million dollars of oil and the well costs 12 million plus numerous other costs, interest and taxes. Good math there me boyo. Hope it works out for you.

        • Oldfarmermac says:

          The calculation of EROEI is complicated as hell because nobody can ever agree on what should be included, but I personally have not seen a convincing argument that you can’t use MONEY to set some outer limits on the debate.

          What I am saying is that if you can buy a turn key solar for a certain amount of money, and it delivers as much NET energy as the same amount of money spent on fossil fuel fired electricity, then the EROEI is ADEQUATE or better than adequate.

          http://www.pv-magazine.com/news/details/beitrag/us–utility-scale-solar-averaging-five-cents-kwh–study-finds_100021310/#axzz48T89tQCq

          From this link:

          Average wholesale electricity prices across the U.S. range from $0.03 – $0-06/kWh depending on the region. The cost of solar would be higher if the 30% ITC incentive was removed, the Berkeley Lab study found. The Southwest regions of the U.S. see the deepest correlation between sizable solar resources and declining PPA prices, but even markets in Arkansas and Alabama have enjoyed solar PPAs of between $0.05 – $0.06/kWh.

          Drawing upon empirical data gleaned from analyzing U.S. solar projects larger than 5 MW, the “Utility-Scale Solar” report also found that installed project costs have fallen by more than 50% since 2009, with median upfront costs dropping from $6.3/W in 2009 to $3.1/W for projects completed last year, with some falling as low as $2/W.

          The report also looked at the efficacy of newer solar projects and found that those completed in 2013 performed at an average capacity factor (AC) of 29.4% last year. In comparison, solar farms connected in 2011 and 2012 performed at factors of 24.5% and 26.3% respectively. A combination of several trends have created these higher efficiencies, including better siting for newer plants, better and/or more tracking technology, and an accurate oversizing of the solar collector field.

          Read more: http://www.pv-magazine.com/news/details/beitrag/us–utility-scale-solar-averaging-five-cents-kwh–study-finds_100021310/#ixzz48TBmnzQo

          Now it IS true that these figures reflect a thirty percent tax credit, but it is ALSO true that the costs of manufacturing and building solar farms is falling fast, as is always the case in a new, growing, technologically immature industry.

          Even without the tax credit, wind and solar power are going to be cheaper than fossil fuel generated electricity in places with good wind and sun resources within the next five years or so.

          The solar power industry has only very recently achieved real economies of scale, and the economies of scale yet to be realized are probably going to cut the cost of solar electricity in half again within another ten years.

          I expect to be posting here on this blog as long as it lasts, or as long as I last. Six months from now, I expect Ponzi will have lost interest in pushing his anti renewable agenda and the forum will have heard the last of him.

          Note that newer solar farms located in GOOD spots are getting close to thirty percent actual capacity factor. Pretty soon new farms will be being built with even more efficient panels, and the capacity factor will pass thirty percent handily on the newest ones.

          At onsite kilowatt hour is worth two , three, four , or five times as much as a kilowatt hour equivalent amount of energy is worth in a pile of coal someplace a hundred or five hundred miles away.

          You lose HALF the energy in coal just generating electricity, and another five percent getting it to the final destination, although this last five percent is lost from solar farm output as well.

          Ponzi, you might do well to think long and hard about the fact that that the Alaskan oil industry is now in the nursing home. Production is down to twenty percent of peak, lol. Except for the fact that my wife threatened to leave me if I left her to go work on the pipeline, I would have gone up there to help build it.

          In ten more years, wind and solar power will be providing well over ten percent of our electricity on a nation wide basis, maybe even sooner.

          Hell , Tony Seba might be right and I might live to see the end of the oil burning internal combustion engine as motive power for personal transportation.

          The ONLY real reason I don’t already have a substantial pv system of my own is that the cost of such systems is falling so fast I have been putting off buying it for the last four or five years. Going to buy either a used LEAF or VOLT automobile too, as soon as I get the system, assuming my health holds up.

          Oil doesn’t grow back like potatoes, Ponzi.

          The sun will always be free, except the guv’ment will no doubt manage to put a tax on it, one way or another.

          In five more years, a system of my own will be a no brainer even without tax credits or a net metering law.

          • Fred Magyar says:

            The calculation of EROEI is complicated as hell because nobody can ever agree on what should be included, but I personally have not seen a convincing argument that you can’t use MONEY to set some outer limits on the debate.

            Agreed! Though personally I’m not a big fan of using money alone as a measure for EROEI.

            The History and definition of EROI in this paper might help a bit to put everyone more or less on the same page.

            http://energytransitionshow.com/content/uploads/2015/11/Murphy_2013_Implications-of-declining-EROI-2.pdf

            A brief history of energy return on investment In the late 1960s, Charles Hall studied the energy flows within New Hope Creek, in North Carolina, USA, to understand the migration patterns of the fish within the stream. His conclusions [16] revealed that, by migrating, the fish were able to exploit new sources of food, which, after accounting for the additional energy cost of migration, conferred a large net energy gain upon the fish. In other words, owing to the abundance of food in the new locations, the fish were able to gain enough energy not only to ‘pay’ for the energy expenditure of that migration but also to grow and reproduce.

            Comparing the energy gained from migration to the energy expended in the migration process was ostensibly the first calculation of EROI. In the autumn of 1973 the price of oil skyrocketed following the Arab oil embargo (the so called ‘first oil shock’), which sent most OECD economies tumbling into recession. The apparent vulnerability of OECD nations to spikes in the price of oil led many researchers to focus on the interaction between the economy and energy.

            Then, in 1974, the journal Energy Policy dedicated a series of articles to the energy costs of production processes. The editor of this series, Peter Chapman, began the series with a paper titled ‘Energy costs: a review of methods’ and observed that ‘this subject is so new and undeveloped that there is no universally agreed label as yet’ [17], and followed up two years later with a second paper [18].

            Today this area of research is spread among a number of different disciplines, including, but not limited to, ecological economics, industrial ecology and net energy analysis, and the EROI statistic is just one of many indicators calculated.

            I am intrigued enough that I plan on investing a serious amount of time into studying EROI from now on. I have a hunch that in transitioning away from BAU, peak oil is going to be compounded by an ever diminishing EROEI ratio for all fossil fuels and that investments in fossil fuels are going to become less and less viable economically from here on out.

            This is going to have serious economic policy implications throughout the whole world. I would like to question our aspiring political leaders about their understanding of this subject. I doubt any of them have a clue!

            Corruption scandals aside I wonder for example if the EROEI of oil having fallen over the last few years didn’t have a lot to do with Brazil’s president Dilma Roussef having been impeached today.

            While there are no guarantees about the future of civilization surviving, to me, upping the ante of investments into alternative energy becomes ever more urgent.

            • Doug Leighton says:

              “I plan on investing a serious amount of time into studying EROI from now on.”

              That’s a mug’s game Fred, I’d recommend against it. There are better ways to spend your time. I recall sitting in an Engineering Physics class, eons ago, and the prof saying: I’m going to talk about to you guys about EROI for 15 minutes and move on. It’s a nice idea but the problem is; if I asked you to determine EROI in a given situation you’d all come up with different answers and I don’t like that.

              • Fred Magyar says:

                It’s a nice idea but the problem is; if I asked you to determine EROI in a given situation you’d all come up with different answers and I don’t like that.

                Yeah, I know, but that is precisely why I want to study it.

                Basically to see if there might be a way to find a common mathematically and scientifically sound system that can be applied universally.

                A process for setting up parameters, that when applied to any case, by anyone, would yield answers that everyone could immediately agree were clearly apples to apples comparisons.

                Instead of the apples to oranges, as is generally the case today. I do know of some ground work that has already been laid.

                Granted I may quickly find this to be a fools errand but it is an itch that I think needs some scratching 🙂

                • wimbi says:

                  So, do me a favor. Look into the number I think is important clean energy return for dirty energy invested.

                  Just getting yet more dirty energy pushes us along the primrose path of dalliance to devastation.

                • Caelan MacIntyre says:

                  “…it is an itch that I think needs some scratching” ~ Fred Magyar

                  Not to worry, I have a bad case of dermatitis over here. Misery loves company.

              • GoneFishing says:

                EROEI or other measures of energy use and return miss the questions and the major points. They give partial answers involving a short period of time, only a few factors and often do not consider long term resource availability or recharge rates. EROEI might have some uses for specific circumstances or be used as a general indicator if the inputs used are consistent.

                Oil and other fossil fuels took millions of years to form under certain climatic and vegetative conditions. For us it is a one off system, here today, gone soon. Let that sink in, gone, gone, gone. Along with the civilization and population they helped develop, possibly the species. I don’t care how fast oil or coal is produced (interpret as uncovered or released), it is actually not being produced (formed) any more at a rate that makes any difference for us. One-off is not good unless it is used as a springboard to new and enduring energy sources and storage methods.

                The proper questions to ask are: What are the enduring useful energies available to build a long term civilization and will the rate of energy production be fast enough?

                Detailed smaller questions might be: How many PV panels can be made from the energy production of one PV panel and how fast?
                How many wind turbines can be produced from the energy of one wind turbine, and how quickly.

                If we can’t answer those questions honestly and accurately, we better plan on a civilization that is fully biologically based and only occupies a small portion of the planet. if we pass through the upcoming bottleneck, that is.

            • Oldfarmermac says:

              Hi Fred,
              I agree totally, money alone is a very poor way to measure EROEI.

              BUt it is IMPOSSIBLE for a renewable energy system that costs one thousand dollars to have more than one thousand dollars worth of embedded energy in it, so long as the costs are honestly added up. It is safe enough to say that manufacturers and distributors are in the habit of making a profit, so the selling price is ok to use for this purpose, lol.

              Check this out from FAUX bizness, lol.

              “In the first quarter of 2016, Canadian Solar sold 1,172 MW of solar panels for $721.4 million, or 61.6 cents per watt. The quarter didn’t include a large impact from its system development business, so this gives us an idea of how much module manufacturing contributes to Canadian Solar’s business.

              From those sales, the company generated a gross profit of $112.5 million. After accounting for operating expenses of $74.1 million the company made $38.4 million from operations.”

              In spite of their sorry rep, Fox does run some good stuff.

              Less than sixty two cents a watt!!!!!!!!!!!!

  46. Oldfarmermac says:

    http://www.bloomberg.com/news/articles/2016-05-12/for-oil-drillers-obama-methane-rule-is-worse-than-proposed

    These new rules are estimated to cost us about a dollar a piece between now and 2025. That’s an entirely trivial amount to pay for a little bit better environment and it is likely we will save more than that in terms of public health etc.

    • shallow sand says:

      OFM. Only the operators of oil and natural gas wells will be paying the cost of the new rules, so I am not following your “a dollar a piece” statement. US operators are all price takers, no ability to pass along these costs that I can see.

      I would note, the story states the rules, as originally proposed, we not going to apply to wells producing less than 15 bopd, but acceding to environmentalists, that exception was removed.

      The rules are for new wells, but there are rules for existing wells coming down the pike.

      We shall see how this all plays out, maybe it will put stripper well operators out of business?

      Politically, I could see that. Stripper operators are generally located in “red” states and “red” counties, rural areas. Are generally small businesses.

      • Reno Hightower says:

        As Hillary Clinton said Shallow, “I can’t be responsible for every undercapitalized small business in America”

        My question is, what about the other large sources of methane emissions? Landfills and Agriculture? or is this just a way to hammer Oil and Gas?

        • Duncan Idaho says:

          The Guardian has a view:
          http://www.theguardian.com/environment/true-north/2016/may/12/the-arsonists-of-fort-mcmurray-have-a-name

          May not agree totally, but there is a causal relationship.

          • Reno Hightower says:

            Let’s just go ahead and ban fossil fuels. My guess is it would last all of one winter before people realized how absurd it was. And what about the benefits of Global warming? If you want a real climate change disaster, try feeding 7 Billion people on a cooling planet with shorter growing seasons

              • Reno Hightower says:

                We would be better off adapting and managing as opposed to trying to do a 180 with where we are now. That is a sure road to ruin.

                • Duncan Idaho says:

                  I don’t think we have a choice.
                  But some wisdom and science added to our actions would help in the long run.

                  • Reno Hightower says:

                    We have plenty of choices. So far the Apocolyptic climate predictions have yet to pass. I would prefer we do not destroy the economy.

                    Besides. How are we going to pay for all these social programs without a growing economy?

            • Oldfarmermac says:

              I recognize sarcasm but I haven’t had a good laugh all day.

              Let’s take it a bit farther, lol.

              We’ve already put enough co2 into the atmosphere to keep us comfy warm for a couple of hundred years at least, so we wouldn’t have to worry about an ice age right away, 😉

              And those of us who are fat would get to be skinny and good looking again within a matter of weeks. 😉

              For a little while.

              Every body who lives thru the first two weeks could live out his remaining two or three weeks of life in a nice house, unless the mobs burn all of them down.

        • shallow sand says:

          We actually thought we were over capitalized a couple years ago.

          That sure changed.

        • Oldfarmermac says:

          Livestock farmers are hellacious methane emitters. Count me guilty at different times.

          But we are many times as numerous as oil guys, and the public is almost entirely on our side, and nobody really has any good workable ideas yet about catching cow farts, considering the huge number of cows and how widely they are dispersed, lol.

          All except a couple of the greenest of the green of my acquaintances enjoy an affordable hamburger. They eat soy and pretend to like it, lol.

          So we farmers are safe for the moment at least, when it comes to cow farts.

          And the people who grow rice etc, are similarly protected politically. Their customers like to eat too, and as cheaply as possible.

      • Oldfarmermac says:

        Hi SS

        You have a point about small operators being price takers in the oil market, which is precisely the same situation farmers are ALWAYS in, except in the rare cases when the BIG BOYS manage to get the government to set them up with some sort of marketing control such as the sugar growers have now. There AREN’T any small domestic producers of cane sugar left in the USA so far as I have heard recently.

        There have been some marketing schemes that worked but not too well for little guys, such as the tobacco allotment system, but that was phased out years ago.

        At any rate the total cost thru 2025 was estimated to be about the same in dollars as the population, which is why I said it will cost us about a buck apiece.

        If these regulations fall disproportionately on small producers , you will no doubt have to eat the cost of them as a small producer. I will be the first to admit I am not acquainted with the details.

        Small businesses always get screwed in such situations, because it costs a small business a hell of a lot more, proportionately, to comply with such rules than it costs a large business. A lot of small businesses have to pay out a hell of a lot for accountants, etc, whereas larger ones can afford to hire a full time accountant or as many as needed, thus reducing the cost of accounting per dollar of business done several times lower than the cost small operators have to pay.

        I have to pay a real estate appraiser three times as much to work for ME as he gets working for a bank.The sob charges an individual four or five hundred bucks, but he does ten to twenty a week for the bank for his thousand buck weekly salary there.

        • Brian Rose says:

          OFM,

          Give me a guaranteed long-term contract and I’ll offer a-lower price for appraisals. It offers stability, and consistency (I know what you want and expect so I have lower risk of costly complaints/issues.

          I will not only offer a lower price, but will try to underbid others to win that contract that guarantees stability and guarantees continued payment.

          It’s no different than a supplier charging a company a lower price for producing 10,000 units for one company than it charges for producing 1 unit to another company for THE EXACT SAME PRODUCT.

          You bet your butt that a bank that guarantees no-hassle payment and continued business will be charged a far lower price than a one-off homeowner who you have no idea about.

          Know an inspector well and they’ll do an inspection cheaper than-even a bank, maybe even free if you really know them. Otherwise, they have no idea we’re any different than that slick, seemingly trustworthy guy who screwed them once, so now EVERY one time client gets a premium price to match that risk.

      • Toolpush says:

        Shallow,

        Can you please explain in simple terms what is going to be needed, as none of these articles involve any practical details. Also there seems a little confusion of what a methane emission is. I would have thought flared gas would be a CO2 emission, yet it seems like this may be classified as methane? Maybe I am reading it wrong.

        The only real methane emission I see while drilling at least. apart from broken and leaking pipes, is drilled gas being being vented from the shakers and the vacuum degasser. Is this what they are targeting? I see where they comment about gas returns during fraccing. Do they want this flared or captured?

        I was hoping Oilpro would have something on the subject, but nothing as yet.

        I wonder how the older cities will get on with their 100 year old gas distribution systems will fare?

        • shallow sand says:

          Toolpush.

          I really wish I could.

          The materials released today on the EPA website are very voluminous. I’ll have our in house counsel take a look at it. LOL!

          Seriously, we do not have enough gas on any of our wells to burn a flare. H2S is not a problem except for wells in one zone, and fortunately we only have one lease with just a few wells producing from that zone.

          It is what we call dead oil, all on rod pumps.

          We are just going to have to dig into this and see what it involves. These rules are for new wells. I assume they give us an idea of how existing wells will be regulated.

          As for city gas distribution, I don’t think they will be affected. This legislation just targets upstream oil and gas.

          I believe hitting the specific industry is what has ruffled a lot of feathers, including our feathers.

          • Danny says:

            For wellsites and remote compressors, we use instrument gas in place of compressed air. Chemical/ methanol pumps, dump controllers, valve positioners all vent normally (anything pneumatic running on gas)
            In Alberta we can vent sweet or sour at a remote site, but Plants have to flare sour. In the North West Territories, they have to be vent free for sour. We had to install solar/ battery powered pumps and run vent free condy water dumps for the separators for the new drills of 2010. Older wells were grandfathered.

            • Toolpush says:

              Thanks Danny,

              Solar powered in the North West Territories! Now that is pushing the limits of the solar power. I would have thought a small turbine in the flow path would be a better option.

              I was surprised by using Nas Gas for your pneumatics. So I gather there will be a shift to all electric operations? with the operator having the choice of how the electricity is produced. Solar or burn some gas?

              On the scale of things, instrument gas seems to be a very small contributor. There must be some much larger venting operations that are the real target? But then again I am not a politician, so I could be completely wrong! lol

              • Danny says:

                I just started working in a sweet facility, and was surprised were allowed to just vent. I thought flaring was better?
                Compressor starts (gas driven starters) plant depressures can dump alot, although sporadic events.
                We have fugitive emmissions testing mandated, a 3rd party comes in with a special (infared I think) camera to see any leaks. They are quantified and given a dollar value. Then we can choose not to fix if not cost effective:) Also, that machine ‘sees’ air leaks too. If the operator isnt careful, they start righting up leaks on the inst air system. Reminds me of getting written up for no secondary containment on a 400 bbl tank full of distilled water . Tests have merit, but you have to be smarter than the tool usually…
                Recapturing the ‘normal’ venting is tough – once it mixes with air, you cant put it back to the inlet.

          • Toolpush says:

            Shallow,

            Interesting how the city distribution systems have been left out of things, as apparently they contribute more to methane emissions than anybody else in the gas industry. But we will just put that one down to politics. Just like OFM’s cow farts.

            We will have to wait and see what some of the more hands on people have to say about the ramifications. I am actually all for less flaring, and greater use of the wasted gas. I am not for the wasted paper work that come with the added regulations for the people that are complying in the first place.

  47. Enno Peters says:

    The latest ND production report is out.

    I have a new update on it here.

    “Total oil production in North Dakota fell to 1109 kbo/d in March, a monthly drop of 10 kbo/d.”

    • AlexS says:

      Total oil production in North Dakota Bakken fell to 1057 kb/d in March, a monthly drop of 8 kb/d.
      Decline in February-March was only 10 kb/d.
      Cumulative decline from December 2014 peak level is 107 kb/d (-9%).

      The chart below shows that both the EIA Drilling Productivity Report and the EIA/DrillingInfo monthly LTO production statistics tend to underestimate the resilience of tight oil production, at least in the case of the Bakken. The EIA estimates for February and March will likely be revised upward. I think that even bigger upward revisions will be done for the Eagle Ford.

      Bakken oil production statistics: NDIC data vs. the EIA reports (kb/d)

      • shallow sand says:

        AlexS. It surprised me that production in ND didn’t fall much when Mr. Helms stated there would be a dramatic drop.

        EIA estimates are just that, it takes many months to get an accurate idea of US oil production.

  48. Caelan MacIntyre... says:

    Ok, so a giant factory is built in the Nevada desert by Empire™…

    But how does Empire™ avoid a global Jevon’s Paradox?…

    Maybe one answer can be found in what has been happening in the Middle East/Syria…

    Maybe South America…

    Receding horizons and leg-ups on EV’s and lithium…

    Pilot (lyrics)

    • Caelan MacIntyre says:

      The Catch-22 of Energy Storage

      Think of a society dependent upon one resource: its domestic oil. If the EROI for this oil was 1.1:1 then one could pump the oil out of the ground and look at it. If it were 1.2:1 you could also refine it and look at it, 1.3:1 also distribute it to where you want to use it but all you could do is look at it. Hall et al. 2008 examined the EROI required to actually run a truck and found that if the energy included was enough to build and maintain the truck and the roads and bridges required to use it, one would need at least a 3:1 EROI at the wellhead.

      Now if you wanted to put something in the truck, say some grain, and deliver it, that would require an EROI of, say, 5:1 to grow the grain. If you wanted to include depreciation on the oil field worker, the refinery worker, the truck driver and the farmer you would need an EROI of say 7 or 8:1 to support their families. If the children were to be educated you would need perhaps 9 or 10:1, have health care 12:1, have arts in their life maybe 14:1, and so on. Obviously to have a modern civilization one needs not simply surplus energy but lots of it, and that requires either a high EROI or a massive source of moderate EROI fuels.”

      Over the years, conventional economics has been critiqued several times in light of thermodynamics.

      “One critique came from… Frederick Soddy. In the 1920s and 1930s he
      produced a series of books developing the idea that an economy is, at bottom, a system of energy use. The chief mechanism by which the economy denies this physical truth, Soddy believed, was its monetary system.

      Soddy drew distinctions between wealth, virtual wealth, and debt. Wealth is the stock of physically useful objects the economy has produced; it has an origin in low entropy and is subject to entropic decline. Money is virtual wealth; it symbolizes the bearer’s claim on real wealth and resists entropic decay. Debt, held as an asset by those who lend money, is a claim on the future production of real wealth.

      Soddy’s fundamental insight was that when money is lent at compound interest, claims on the future production of real wealth increase exponentially—but real wealth can only grow incrementally, through an expansion of the economy’s matter-and-energy throughput or through achieving greater efficiency. As the monetary system encourages public and private debt to grow faster than the economy can grow the means of paying it back, the system develops an irresistible need for some form of debt repudiation. This comes as inflation, bankruptcy, foreclosure, bond defaults, stock market crashes, bank failure, pension fund wipeouts, collapse of pyramid schemes, and loss of paper assets and expected investment income of any form. Aggressive expansion of the economy’s matter-and-energy throughput raises hopes and expectations along with output of real wealth. Those hopes and expectations make growth-through-debt seem normal, which can stave off the inevitable financial reconciliation for a time. Eventually, however, expansion of throughput hits a local or absolute limit, confidence falters, and the system rapidly ‘de-leverages’ into collapse. Staving off debt repudiation simply ensures that when it comes it will come hard and fast, as a crisis—… as it has in every other downturn the global economy has experienced since then.”

      The EROEI with fracking is in the range of 5- or 10-to-one…

      “Professor Charles Hall of the State University of New York, a recognized expert in the field, claims that modern civilization will have trouble functioning with an average EROEI under 10-15, so shale oil and gas alone could not support our civilization at its current standard-of-living. EROEI roughly correlates with financial cost, and a typical fracking oil well in Texas now costs over $10 million to drill, compared to less than $1 million for a conventional well.”

      ———————–

      “A related recent concern is energy cannibalism where energy technologies can have a limited growth rate if climate neutrality is demanded. Many energy technologies are capable of replacing significant volumes of fossil fuels and concomitant green house gas emissions. Unfortunately, neither the enormous scale of the current fossil fuel energy system nor the necessary growth rate of these technologies is well understood within the limits imposed by the net energy produced for a growing industry. This technical limitation is known as energy cannibalism and refers to an effect where rapid growth of an entire energy producing or energy efficiency industry creates a need for energy that uses (or cannibalizes) the energy of existing power plants or production plants” ~ Wikipedia

      • Ulenspiegel says:

        You only have to check the energetical pay back time of modern windturbines (5-8 months) then it becomes obvious that you can double wind/PV each three or four years in a sustainable way, i.e. they generate in this time more electricity than energy is used for the production of the next “generation” of turbines.

        What is the actual time for a doubling of capacity? How can this produce energy cannabalism?

        (Wikipedia is no substitute for good own calculations) 🙂

        • Caelan MacIntyre Responds To His Happy-Face Pal says:

          I posted comments about that on here some time ago… Maybe things have changed since then, maybe for the worse for windmills; maybe for the better. If the latter and it fits various bills, then, wonderful.
          Anyway, if you’re so motivated, do a Google for this site, my name and windmills and see what pops up.

          Wikipedia includes ‘talks’ in the background, as well as references… my little happy-face pal. 😉

          “(Wikipedia is no substitute for good own calculations)” ~ Ulenspiegel

          There is no substitute for you. 😉

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