Peak Oil News: 03/01/2004 - 04/01/2004

Wednesday, March 31, 2004 U.S.Gasoline Rises to 18-Year High After Fire at Texas BP Refinery

March 31 (Bloomberg) -- Gasoline in New York rose to its highest price in at least 18 years after an explosion at BP Plc's Texas City refinery, the third biggest in the U.S., added to concern about shortages of the fuel ahead of the third quarter when demand peaks.

Friday, March 26, 2004

Record Gas Prices May Foreshadow Coming Shortage
"U.S. gasoline prices reached their highest mark ever on March 23. Meanwhile, oil giant Royal Dutch/Shell just slashed its petroleum reserve estimates by 20 percent, after a massive accounting scandal. While the soaring prices at the pump have the public worried about another 1970s style oil crisis, waiting in line might ultimately be the least of our concerns. An increasing number of prominent petroleum geologists -- including many former oil company employees -- have warned that official estimates of available global oil reserves are dangerously over-exaggerated. They may well be right."

[E] - Department of Energy Says ANWR Oil Would Have Little Impact: "According to an analysis released last week by the Department of Energy (DOE), opening the Arctic National Wildlife Refuge (ANWR) to oil development would only slightly reduce America�s dependence on imports and would lower oil prices by less than 50 cents a barrel.
The report, issued by DOE's Energy Information Administration, said that if Congress gave the go-ahead to pump oil from Alaska's Arctic National Wildlife Refuge, the crude could begin flowing by 2013 and reach a peak of 876,000 barrels a day by 2025.
But even at peak production, according to the EIA analysis, the United States would still need to import 66 percent of its oil, as opposed to an expected 70 percent if the refuge's oil remained off the market.
At the same time, the report says new Alaska production would stem the expected dramatic decline in domestic production and extend the economic life of the Alaska oil pipeline as production from other North Slope areas declines significantly.
But even the additional domestic production would not be enough to overcome increased demand, meaning continued heavy reliance on imports, the EIA says. Currently, the United States imports about 56 percent of the oil it consumes. "

Thursday, March 25, 2004

From The Wilderness PublicationsEating Fossil Fuels
Some months ago, concerned by a Paris statement made by Professor Kenneth Deffeyes of Princeton regarding his concern about the impact of Peak Oil and Gas on fertilizer production, I tasked FTW's Contributing Editor for Energy, Dale Allen Pfeiffer to start looking into what natural gas shortages would do to fertilizer production costs. His investigation led him to look at the totality of food production in the US. Because the US and Canada feed much of the world, the answers have global implications.

What follows is most certainly the single most frightening article I have ever read and certainly the most alarming piece that FTW has ever published. Even as we have seen CNN, Britain's Independent and Jane's Defence Weekly acknowledge the reality of Peak Oil and Gas within the last week, acknowledging that world oil and gas reserves are as much as 80% less than predicted, we are also seeing how little real thinking has been devoted to the host of crises certain to follow; at least in terms of publicly accessible thinking.

The following article is so serious in its implications that I have taken the unusual step of underlining some of its key findings. I did that with the intent that the reader treat each underlined passage as a separate and incredibly important fact. Each one of these facts should be read and digested separately to assimilate its importance. I found myself reading one fact and then getting up and walking away until I could come back and (un)comfortably read to the next.

All told, Dale Allen Pfeiffer's research and reporting confirms the worst of FTW's suspicions about the consequences of Peak Oil, and it poses serious questions about what to do next. Not the least of these is why, in a presidential election year, none of the candidates has even acknowledged the problem. Thus far, it is clear that solutions for these questions, perhaps the most important ones facing mankind, will by necessity be found by private individuals and communities, independently of outside or governmental help. Whether the real search for answers comes now, or as the crisis becomes unavoidable, depends solely on us.

Wednesday, March 24, 2004

Guardian Unlimited | Special reports | The perfect storm that's about to hit: "Gasoline could climb as high as $3.50 a gallon before levelling off at $2 by the autumn."

Guardian Unlimited | Special reports | SEC under attack over Shell: "A leading investment bank has come to the support of Shell and accused the US securities & exchange commission of using 'outdated' standards to assess oil and gas company reserves.
Deutsche Bank said the entire energy sector could find it harder to raise cash in future because of over-conservative policies being applied by the US regulators."

Some folks have suggested "peak oil" is a false issue raised by oil companies to justify raising the cost of crude oil. This article reveals reasons why oil companies are incented to inflate, not deflate their reserves.

Tuesday, March 23, 2004

Iraq and the Problem of Peak Oil
"Today, much of the world is convinced the Bush Administration did not wage war against Iraq and Saddam Hussein because of threat from weapons of mass destruction, nor from terror dangers. Still a puzzle, however, is why Washington would risk so much in terms of relations with its allies and the entire world, to occupy Iraq. There is compelling evidence that oil and geopolitics lie at the heart of the still-hidden reasons for the military action in Iraq. "

Homesteading Today - Life after the oil crash???
Another interesting thread on the same site.

Homesteading Today - Peak Oil... have you folks read about this???
An interesting on-line conversation about peak oil issues.

Sunday, March 21, 2004

Peering into oil's future / Experts try to predict when the world will start running low on the natural resource that keeps all the engines running: "The world began running out of oil soon after the birth of modern drilling during the 1850s. The question since then has always been: When will the spigot start drying up?
Mounting evidence suggests that an important turning point may be close. According to several studies, oil production is expected to begin a permanent decline within a few years, prompting social and economic upheaval across the globe.
Or maybe not. A rival school of thought says that oil's imminent demise is exaggerated and that crude will be plentiful into the near future.
Whom can you believe? It all depends on how accurate researchers are in calculating such complex variables as future oil consumption, production and discovery. "

Wednesday, March 17, 2004

A Tale of Two Planets - A Report on the Conference “Future of Global Oil Supply: Saudi Arabia" Washington DC, February 24th 2004
: “I think we should worry about the future”, said Simmons after his presentation. “I think we should basically look at this like we looked at nuclear warfare and say that would be so awful if it happened – let's do something, put in a warning system.” Referring to Saudi claims of decades of future supply, Simmons said “we're just stupid as a society to say ‘now I know we don't have any problems'. Fifty years is great if that's right. But if it's wrong, that's awful.”

If the Saudis are right, the industrial world has decades more of abundant and cheap oil. If Matt Simmons is right the world is almost certainly in for global oil production decline before the end of the decade. Taken together with the baseless 1980s Middle East reserves increases and no new mega-finds elsewhere, this will most likely signal the end of the oil age.

Better World Club - Roadside Assistance, Insurance and Travel
An alternative to AAA that also provides roadsige bicycle assistance.

Sunday, March 14, 2004

Running out of oil -- and time:
The news last month that the vast Saudi oil fields are in decline is a far bigger story than most in the media, or the United States, seem to realize. We may begrudge the Saudis their 30-year stranglehold on the world economy. But even the possibility that the lords of oil have less of the stuff than advertised raises troubling questions. How long will the world's long-term oil supplies last? As important, what will the big importing nations, like the U.S., do the day world oil production hits its inevitable peak?

For more than a century, Western governments have been relentlessly upbeat about the long-term outlook for oil. Whenever pessimists claimed that supplies were running low — as they have many times — oil companies always seemed to discover huge new fields. It's now an article of faith among oil optimists, including those in the U.S. government, that global oil reserves won't run out for at least four decades, which seems like enough time to devise a whole suite of alternative energy technologies to smoothly and seamlessly replace oil.

But such oil optimism, always questionable, is now more suspect than ever. True, we won't "run out" of oil tomorrow, or even 10 years from now. But the long-term picture is grim. In the first place, it's not a matter of running out of oil but of hitting a production peak. Since 1900, world oil production — that is, the number of barrels we can pump from the ground — has risen in near-perfect step with world oil demand. Today, demand stands at about 29 billion barrels of oil a year, and so does production. By 2020, demand may well be 45 billion barrels a year, by which time, we hope, oil companies will have upped production accordingly.

Saturday, March 13, 2004

AP Wire | 03/13/2004 | Creating jet fuel from coal getting close to reality, scientists say
After about 15 years of study, scientists at Pennsylvania State University say they are getting ready to test a fuel, half of which is derived from coal, which they believe can provide the stability required by the ever-hotter-burning engines in fighter jets.
Not only that, but Penn State scientists say they have removed a major obstacle to producing a coal-blended fuel by coming up with a way to make it in an existing refinery, instead of building a new one. And if they can sell off some of the byproducts, they believe that getting fuel from coal could finally be less expensive than refining crude.

Oil sands bombshell - March 14, 2004 - Petroleum News
Worst case, expansion could cost double original projections
The consortium owners disclosed on March 5 that an expansion of the world's largest synthetic crude operation had skyrocketed by C$2.1 billion to C$7.8 billion, with a 50-50 chance that it could reach C$8.1 billion by completion.
In the worst case, the Stage 3 expansion would cost double the original projections in 2001 to boost Syncrude volumes to 350,000 bpd from 253,000 bpd.

Friday, March 12, 2004

CRYING WOLF: Warnings about oil supply
In the past two years, a number of articles have appeared warning not only of a new oil crisis, but of the end of the oil era, as oil production inevitably peaks and declines due to inexorable geological forces. These include 'Mideast Oil Forever?' by Joseph J. Romm and Charles B. Curtis and 'Heading Off the Permanent Oil Crisis,' by James J. MacKenzie, among others.
The profusion of articles on the subject is unfortunate, since the casual reader (and policy-maker) might conclude that the large number of articles have an equally large amount of research behind them. In truth, most of these are not actually about oil, but take the assumption that oil scarcity is imminent, especially outside the Middle East, and nearly all rely on a few pessimistic quotes from oil men, or recent work by one or two geologists using what is known as a 'Hubbert approach.' Most notable are the recent publication of the book The Coming Oil Crisis by Colin Campbell and the March 1998 Scientific American article 'The End of Cheap Oil' by Colin J. Campbell and Jean H. Laherrere.
The gist of their argument is that most of the world's oil has already been found, as evidenced by the alleged lack of recent giant discoveries; Middle East reserves have been overstated for political reasons; actual total recoverable resources are only about 1.8 trillion barrels, not the 2.4 trillion barrels that others have estimated; existing fields will not continue to expand in size and production as others suggest; and most oil producing countries outside the Middle East are said to be near, if not past, their point of peak production, which occurs when 50% of total oil resources have been produced. Production is predicted to drop off steeply afterwards. Thus, they forecast that 'The End of Cheap Oil' is at is at hand and prices will be rising shortly.

Thursday, March 11, 2004

Throttle on Northwest power use wide open
"Despite our eco-conscious image, Northwesterners are pretty big energy hogs -- above the national average in using gas and electricity, and not all that far behind those pickup-driving, oil-drilling Texans.
At the same time, the Pacific Northwest has failed to aggressively pursue environmentally friendly forms of energy -- even while our life spans are increasing, our economic well-being is stagnant, forests have been clearcut at a generous clip and urban sprawl continues, albeit at a slower pace."

Wednesday, March 10, 2004

The Best News and Analysis from the World Crisis Web
Oil - The Illusion of Plenty"One hundred and twelve billion of anything sounds like a limitless quantity. But in terms of barrels of oil, it's just a drop in the gas tank. The world uses about 27 billion barrels of oil per year, meaning that 112 billion barrels--the proven oil reserves of Iraq, the second largest proven oil reserves in the world--would last a little more than four years at today's usage rates. "

Sunday, March 07, 2004

I am skeptical, too, and think the only way to figure it out is to read all I can and hope to get some degree of understanding. Perhaps reality will emerge from the fog. In the meantime, I think it is best to error on the side of conservation and preservation of this very useful, and finite gift of the earth.

There are a couple things that don't make sense to me. One is why would the government/oil companies be so quiet about peak oil? This seemingly very big issue has been strangely kept out of the public eye. There are a few documents here and there, but they are mere tokens. Why has the government not been honest about oil as the rationale for invading Iraq? It makes much more sense than WMDs, or 9/11, or evil empires, etc. Much of this country's history has been directed by the concept of "manifest destiny". If the survival of western civilization were admittedly at stake, I think more Americans would support a war of pillage and conquest than one based on the lies they have been fed. So why are we still happily trotting down the garden path of plenty?

The other thing is market altruism; I don't buy it. I don't trust the "market" to find solutions to the problems of the masses when it doesn't benefit the market even more. I wonder if the super wealthy might see a managed disintegration of our present society as one more game to play and win, leaving them to rule an “improved” planet. I don't think they are stupid; they see the same things we do: overpopulation, pollution, global warming, deforestation, etc. One big, and ugly answer is to radically reduce population. The disease, famine, etc. postulated by the peak oil disaster proponents would be an effective way to do this. Why build extermination/concentration camps when natural disaster can get the job done.

Big oil, like all big corporations, is driven by the quarterly bottom line. Profits today are more urgent than long term survival. When the shit hits the fan, the big shareholders and executives bail out with their plunder, leaving the rest of us with a bag of air. They don't give a shit about the company, its employees, or its customers. Their loyalty is to themselves and their cronies. The company is just a deck of cards to be played to win.

The only meaningful long term goal of the super wealthy is to build dynasties and insure their descendants are in control. It is social Darwinism taken to an extreme.

The extremely wealthy today will survive an oil crisis in fine shape, or at least vastly better shape than we will. They don't need "cheap oil"; they will be able to afford needed oil products at any price. The society you and I live in may collapse and whither, but they will be living safe and comfortable lives in enclaves guarded by private armies. It may only take a generation or two for the dust to settle to a point where the elite can re-emerge and take control of the impoverished masses.

World Empire; that is quite a heritage to leave to your children!

Saturday, March 06, 2004

Has global oil production peaked? |

Guardian Unlimited | Special reports | Bottom of the barrel
"Bottom of the barrel - The world is running out of oil - so why do politicians refuse to talk about it?"

Oil prices likely to remain at current levels through 04 - February 01, 2004 - Petroleum News
"Peak oil production occurs when supply will not meet demand, Herrera said. As the world gets closer to peak oil production, cracks and groans will begin to appear in the energy supply system.
Peak oil production will be a world changing, but not a world-shattering, event.
It will probably take a year or two to recognize that a peak has occurred, Herrera said. It won't be a disaster, but it's irreversible, and if that's not incentive to do something about it, I don't know what is.
The coming of the point of peak production is hard to pinpoint.
Careful and calculated attempts have been made to predict the timetable of peak oil production, but no general consensus has been reached, Herrera said. It's a bit like explaining climate change and what causes it.
I would suspect we will reach peak oil production in the next decade, he said."

Friday, March 05, 2004

Oil is evil!? How to change that erroneous view?

What if we had a forest of great commercial value and wood products companies were cutting it down as fast as they could? What if that forest were just about half gone and the cutting rate was accellerating? What if that forest could NEVER regrow, ever?

The world's petroleum reserves are that irreplacable forest. They are literally ancient forests and other biomass and we are permitting oil companies to "clearcut" them.

Petroleum is a resource of nature. It is natural. It is a very valuable gift from the earth. What is it going to take to wake up and notice what is going to happen as this valuable substance disappears from easy access and easy usability?

I have been walking and talking about peak oil to everyone I can, for an hour or two a day, for a couple weeks now. It is exhausting! While talking to people, I have noticed a very interesting thing and having trouble sorting it out.

Many people I talk to are the same people who devote themselves to good causes like protecting forests, reducing pollution, sustainable living, etc. Some of these people have the mind set that running out of oil is a GOOD thing! They see oil as evil, as the source of many global problems, as its abuse indeed it is. They say they will be happy to see the end of cheap petroleum.

When I stop someone to chat, I have to be very quick to get their positive attention. Seconds count. What I am often having trouble with is a quick way to plant the idea that oil itself is not bad, but what we have done with it (waste, pollution, etc) is bad AND that oil is also another natural resource, like water, forests, etc. that needs to be radically conserved.

I have thought about making an analogy that oil is rather like the living forests; a very valuable resource that needs to be valued and used conservatively. And that oil, unlike forests, is not going to grow back if left alone for awhile, therefore should be conserved even more radically than the forests.

We are dismayed and angry when a wood products company clearcuts the forest. We shrug when an oil company "clearcuts" an oil field by draining as quickly as profitability allows.

Your thoughts are invited and welcome. Click the comments link below.

Thursday, March 04, 2004 : English
"Hydrogen from new technology nuclear reactors may provide affordable new energy source, but at the cost of managing a new source of nuclear waste."

MENAFN.COM - Middle East North Africa - Financial Network
"Saudi Arabia's state-owned oil company said it could quench the world's thirst for oil easily beyond the middle of the century because it has many more fields to be discovered and its production costs are low."

Wednesday, March 03, 2004

Wolf at the DoorThe Beginner's Guide to Oil Depletion

An MBendi Profile: World: Oil And Gas Industry - Peak Oil: an Outlook on Crude Oil Depletion - C.J.Campbell - Revised February 2002
"This paper is about Peak Oil. It truly is a turning point for Mankind, which will affect everyone, although some more than others. Those countries, which plan and prepare, will survive better than those that do not. It is a large and difficult subject, but the essentials are clear.
In summary, these are the main points that have to be grasped:

Conventional oil - and that will be defined - provides most of the oil produced today, and is responsible for about 95% all oil that has been produced so far.

It will continue to dominate supply for a long time to come. It is what matters most.

Its discovery peaked in the 1960s. We now find one barrel for every four we consume.

Middle East share of production is set to rise. The rest of the world peaked in 1997, and is therefore in terminal decline.

Non-conventional oil delays peak only a few years, but will ameliorate the subsequent decline.

Gas, which is less depleted than oil, will likely peak around 2020.

Capacity limits were breached late in 2000, causing prices to soar leading to world recession.

The recession may be permanent because any recovery would lead to new oil demand until the limits were again breached which would lead to new price shocks re-imposing recession in a vicious circle.

World peak may prove to have been passed in 2000, if demand is curtailed by recession.

Prices may remain weak in such circumstances but since demand is not infinitely elastic they must again rise from supply constraints when essential needs are affected "

Alexander's Gas & Oil Connections - Earth's limitless oil and gas reservoirs are a myth
"There is no evidence to suggest that abiogenic gas makes 'any significant contribution' to energy fields, the researchers say, concluding: 'We can now rule out the presence of a globally significant abiogenic source of hydrocarbons.' "

Wired 8.07: Fuel's Paradise
World-class contrarian Thomas Gold has a theory about life on the planet: It's pumping out of the Earth's crust - and it's swimming in oil.

Tuesday, March 02, 2004

Will The End of Oil Mean The End of America?
"The world is quickly running out of oil. In the year 2000, global production stood at 76 Million Barrels per Day (MBD). By 2020, demand is forecast to reach 112 MBD, an increase of 47%. But additions to proven reserves have virtually stopped and it is clear that pumping at present rates is unsustainable. Estimates of the date of �peak global production� vary with some experts saying it already may have occurred as early as the year 2000. New Scientist magazine recently placed the year of peak production in 2004. Virtually all experts believe it will almost certainly occur before the end of this decade. "

L E O N A R D O D I C A P R I O - Official Website
An example of a celebrity (and his money) trying to have a positive influence.

Monday, March 01, 2004

Alexander's Gas & Oil Connections - Checking our oil: How long before we run out of sources?

"Today's civilization depends on an abundant and relatively cheap supply of oil. So when experts discuss when oil production will begin to decline, the world pays heed. The question now making the rounds in energy circles: Has production already peaked? If it has -- or if a peak lies only a few years away -- the repercussions would be huge. It could intensify a scramble by oil importers to tie up existing reserves. Decline could lead to scarcity and higher prices, possibly recession, while prompting an urgent push to alternative fuels and conservation. Some pessimists talk of production flattening about 2010; many analysts see no change until 2035. "

Alexander's Gas & Oil Connections - Plan now for a world without oil
"These calculations place the coming oil crunch some time between 2010 and 2015, may be earlier. Yet no major primary energy alternative can replace oil and gas in the short to medium term. The implications of this are mind-blowing, since oil provides 40 % of all traded energy and no less than 90 % of transport fuel.
It is hard to envisage the effects of a radically reduced oil supply on a modern economy. Yet just such a radical reduction is staring us in the face. The world faces a stark choice. It can continue down the existing path of rising oil consumption, trying to pre-empt available remaining oil supplies, if necessary by military force, but without avoiding a steady exhaustion of global capacity. Or it could switch to renewable sources of energy..."

The days of 'easy oil' are over for the Saudis

Friday, February 27, 2004
Saudi Arabia faces increasing difficulty in extracting oil as the kingdom's production capacity appears to have peaked after more than 60 years of operations.

A leading oil expert told the Washington-based Center for Strategic and International Studies that Saudi oil fields have been operating from as early as 1940 and that the last huge oil field was discovered in 1967. Matthew Simmons, an energy investment banker and regarded as a key adviser of the Bush administration, said the extraction of oil in Saudi Arabia will become increasingly difficult.

Simmons, in an assessment disputed by Saudi oil executives, said Saudi Arabia could face a steady but slow decline in oil production, Middle East Newsline reported. He cited Ghawar, the world's largest oil field, which was discovered in 1948, now the world's largest oil field and which accounts for production of up to 60 percent of Saudi oil.

"The small number of great but old oil fields in Saudi Arabia that created 'the miracle' are now facing challenges," Simmons said. "The easy oil era is over."

"The entire world assumes Saudi Arabia can carry everyone's energy needs on its back," Simmons said in his address on Tuesday. "But if this turns out not to work, there is no Plan B. And if conventional wisdom is wrong, the world faces a giant energy crisis."