Where we really stand with respect to oil and natural gas supplies

A few days ago, I gave a presentation in Poland that talks about how much difficulty the world is having maintaining its oil production. The presentation was not set up to be a response to Jad Mouawad’s recent New York Times article, Oil Industry Sets a Brisk Pace of New Discoveries, but in many ways it is one. Our recent discoveries really have not been enough to make up for our many production problems elsewhere. We are having problems not only with oil, but with natural gas. The solution the financially distressed world is increasingly considering is…well, read the story to see.

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Where we really stand with respect to oil and natural gas supplies

A few days ago, I gave a presentation in Poland that talks about how much difficulty the world is having maintaining its oil production. The presentation was not set up to be a response to Jad Mouawad’s recent New York Times article, Oil Industry Sets a Brisk Pace of New Discoveries, but in many ways it is one. Our recent discoveries really have not been enough to make up for our many production problems elsewhere. We are having problems not only with oil, but with natural gas. The solution the financially distressed world is increasingly considering is…well, read the story to see.

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Web & media - Sept 29

-America’s Teacher
-The Year of the Flood
-The End of Oil?
-The Constant Economy by Zac Goldsmith

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Iran, sanctions, and "nuclear ambitions"? - Sept 29

-Ahmadinejad Rejects Obama’s Nuclear Warning
-Iran’s Global Foray Has Mixed Results
-Iran defies Western pressure with missile test-firing
-Iran: The Next Neocon Target
-Obama’s Move: Iran and Afghanistan

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wsRadio Interview with Jan Lundberg on Health Care for a Post-Peak Oil World

As readers know, I’ve written about the difference between healing and today’s petrochemical-drug oriented medical system. The insurance being debated is seldom about true health care, especially not for post-petroleum living. Should Baby Boomers be worried only about government programs, or also some of their modern conveniences taken for granted? Some of these trappings of our troubled civilization hardly work and are toxic.

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A Letter from a Friend in Africa

Marc Wegerif is an old school friend of mine from when I grew up in Bristol. After school he moved to South Africa and was very involved in activism there, and he now lives in Tanzania and works for Oxfam. He recently got back in touch and I sent him a copy of The Transition Handbook. Subsequently he sent me a long and thoughtful letter, with his reflections on the book, and on how it might relate to Africa. The whole question of what Transition might look like in a developing world context is something we have rarely explored at Transition Culture, and Marc has given me permission to reprint his letter here by way of initiating that discussion.

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The Season of the Witch

In my father’s house are many mansions. Surely one of them has a room with no elephants in it….

Not to crunch too many metaphors right here at the top, but a consensus seems to be firming up in the animate jello of the Internet that we have entered the Season of the Witch. An odor of ripeness fills the virtual air — something between dead carp and apples baking. Whatever else appears to be going on in the upper stories and verdigris-tinged turrets of capital finance…the most perplexing part is that there hardly seems any safe place to preserve one’s savings.

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Where we really stand with respect to oil and natural gas supplies

A few days ago, I gave a presentation in Poland that talks about how much difficulty the world is having maintaining its oil production. The presentation was not set up to be a response to Jad Mouawad’s recent New York Times article, Oil Industry Sets a Brisk Pace of New Discoveries, but in many ways it is one. Our recent discoveries really have not been enough to make up for our many production problems elsewhere. We are having problems not only with oil, but with natural gas. The solution the financially distressed world is increasingly considering is . . . well, read the story to see.

I began with a slide that shows the current top crude oil producers in the world (based in EIA May figures) and noted that, at the moment Russia is at the top.

Then I showed a slide of a well in Samotlor and noted that the Russian historic large fields are running out. Samotlor has declined from 3.2 mbd to 750,000 bd and is pumping, in some wells, 90% water. The Russian strategy has been to find and produce a region until exhausted, and then move East to find the next major depost. That has worked fine as a strategy until now when they have reached Sakhalin Island – on the far East of the country – the next logical place to look is . . . . .

Alaska, and sorry folks, that is already in play, and in fact rather played out.

Which is a good point to introduce the Export Land Model and so I talked just a little about the fact that as a country’s oil peaks and starts to fall, domestic consumption becomes more important and exports suffer a much greater decline than the actual fall in production. Then I showed how this was already happening to Russia, and the impact that this would have on Poland.

To make life even more complicated in terms of those in Eastern Europe with a reliance on Russian oil, I put up a slide showing that the United States is now importing some 840,000 bd of Russian oil, in order to meet its needs, and thus Europe is now competing in the global market for that oil.

Why must America compete in that market – I used a graph showing the collapse of Cantarell (not to mention the other fields in Mexico) and the 100,000 bd fall every three months to show that America has to go to the world market to find the oil that it now needs.

Non-OPEC crude oil production has peaked and is in decline (I used an Oil Drum graph showing the fall since 2004) and so when one looks at countries that have a surplus of production over current supply (comparing IEA and EIA data) the stand-out is Saudi Arabia at either 3.3 or 2.5 mbd (depending on whom you believe) with the next largest being the UAE at somewhere between 0.3 and 0.6 mbd.

(And here let me briefly digress to point out that those who wave the NYT story have little clue of the time that it takes between discovery and full field production – nor do they understand oil field depletion, or that just because we have passed peak production does not mean that there is not a whole lot of oil out there that is still waiting to be discovered – only that it is going to be less than the huge volumes that we have already found and exploited).

The problem, as I pointed out, is that the Saudi number includes, among other fields, Manifa, and Yes! we know it is there; Yes! we know that it can produce 1 million bd; but we also have to recognize that until a refinery is built to process that oil (which will not now come on line until after 2013), the use of that production number is a fiction. And thus there is less than 4 mbd available as a current world reserve.

So what else do we need to worry about? Well, it was time to introduce oilfield depletion and so I put up the two contrasting graphs that I use from the Oil Drum that show decline in current fields when you use 4.5% depletion and then 5.25% (the significant point I indicated was the transition of peak oil from 2011 to 2008).

I then showed a slide with the Financial Times quote that the oilfields in the North Sea were depleting at 9%, and followed it with Dr Fatih Birol’s comment that the depletion rate is 6.7%.

I tied the whole issue together by showing the need that the Western world will have as their economies rebound (about 3 mbd) with the increases in demand from China and India (already 1 mbd and rising) to show that by 2011 we will need some 5 mbd of additional oil over today, but at best have only enough on line to get 4 mbd. (The first Oops Moment).

So now I turned to the second fuel – natural gas – (time was now running a bit tight so this got a little less intense treatment, but also focused on the Polish need).

I began with a slide showing that, over time, natural gas fields were lasting a shorter period of time before they ran out, but then followed this with a slide of Turkmenistan, who has been supplying some 40 bcm to Russia (or thereabouts) for transfer (at a profit) to Ukraine, Poland and Western Europe.

To ensure that supply last year (and there were posts on this at the time) Gazprom signed an agreement to pay the prevailing Western price for natural gas to Turkmenistan. Since then there was a collapse in the world price of natural gas, putting Russia in an awkward postition-a contract to buy at a high price, and to sell at a lower one. An “accident” to the pipeline between Turkmenistan and Russia happened a few months later, meaning that Russia has not had to accept expensive NG that it has to sell at a loss, since then.

However, just as Russia pressures Turkmenistan to accept a new agreement to sell the gas at a cheaper price, the new pipeline from Turkmenistan to China will open in a couple of months (and I showed the map) meaning that, as China has been willing to pay the higher price (about $8 per kcf as I posted recently) they have underwritten a cost increase for NG to Western Europe, and beyond that is unlikely to go away.

I then quickly put up a map showing the gas shale deposits in the United States and commented that this might at first appear to indicate that we are entering the “Age of Natural gas”.

But then I followed this with Swindell’s graph showing that the new wells suffer 60% decline in the first year, and commented that with the high cost of wells, and the current low cost of NG in America (I tried converting prices to zloty per thousand cu m., but may have got a number wrong – we passed a gas station that was selling NG at 2 zloty per liter) the new wells that we need for next year are not being built. Thus we may be competing with Poland for LNG from Qatar.

What is left? I turned to coal (Poland currently gets around 85% of its electrical energy from this source) and I put up my final slide, showing 5 micron coal – which when mixed with 50% water will run a diesel locomotive (and I added a picture of one) as GE have demonstrated.

Which barely gave me time to note that for many countries in the world coal, is the only available, viable and economically practical fuel (for example, Vietnam and Botswana) at a time when (with a map from “energy shortages”) - which I contrasted with comments from the G-20 Summit - the world is already having serious problems and it was time for me to conclude.

Is the Global Oil Tank Half-Full, Is It Half-Empty …or Are We Running on Fumes?

This is a guest post by Richard Heinberg. Heinberg is Senior Fellow with Post Carbon Institute and author of several books on resource depletion, including The Oil Depletion Protocol and Blackout: Coal, Climate and the Last Energy Crisis. He will be speaking at the ASPO-USA conference in Denver, October 12.

In his article in the New York Times September 24, “Oil Industry Sets a Brisk Pace of New Discoveries”, staff reporter Jad Mouawad cites oil discoveries totaling ten billion barrels for the first half of 2009. The Tiber field in the Gulf of Mexico alone accounts for four to six billion barrels of crude that may eventually find its way into the world oil system. Indeed, this year has seen discovery results that could end up being the best since 2000. But, the article notes, the new oil was expensive to find, it will be expensive to extract, and both exploration and production are only possible because of high levels of investment and sophisticated, expensive new technologies.

To justify the needed level of effort, the oil industry requires prices in excess of $60 per barrel, according to Mouawad; otherwise, the new projects will turn out to be money-losers. Some analysts believe the magic break-even number is closer to $70. In any case, the figure is much higher than was required only a few years ago, and still-higher prices may be necessary to make exploration and production profitable for future projects—prices perhaps close to $80.

According to Mouawad, “While recent years have featured speculation about a coming peak and subsequent decline in oil production, people in the industry say there is still plenty of oil in the ground, especially beneath the ocean floor, even if finding and extracting it is becoming harder.” So the new discoveries presumably indicate that peak oil has been delayed, and that our concerns about the event have been misplaced.

Yet this would be a strange conclusion to draw from the facts cited, for two reasons.

First: The ten billion barrels of new discoveries reported so far do initially sound encouraging: if the second half of 2009 is as productive, that means a total of 20 billion barrels of new oil will eventually be available to consumers as a result of discoveries this year. But how much oil does the world use annually? In recent years, that amount has hovered within the range of 29-31 billion barrels. Therefore (assuming continued good results throughout 2009), in its most successful recent year of exploration efforts, the oil industry will have found only two-thirds of the amount it extracted from previously discovered oilfields.

When the “ten billion barrels” figure is framed this way, its “gee whiz” shimmer quickly fades. (Yes, the article discusses the phenomenon of “reserve growth,” which is supposed to render the pace of new discoveries less important—but that red herring has been exposed plenty of times, including here.) The Times article hints that 2009’s high discovery rate may be the beginning of a new trend, so that we may see even better rates in future years; but remember, that hypothetical outcome hinges on a crucial factor—increasing investment in exploration and production—which leads us to a second critical thought.

The staggering levels of investment that enabled drilling in miles of ocean water, so as to achieve the 2009 finds, were occasioned by historic petroleum price run-ups from 2004 to 2008—with prices eventually spiking high enough to cripple the auto industry, the airlines, and global trade. As petroleum prices climbed ever higher, oil companies saw sense in drilling test wells in risky, inhospitable places. But in recent decades oil price spikes have repeatedly triggered recessions. And clearly, as we all discovered rather forcibly last year, the global economy cannot sustain an oil price of $147 a barrel: as the economy crashed in the latter months of 2008, so did oil demand and oil prices (which hit a low in December-January near $30).

So, what is a sustainable price? A review of recent economic history yields the observation that when petroleum sells above about $80 a barrel (in inflation-adjusted terms), the economy begins to stall. Oil industry wags have begun to speak of a “Goldilocks” price range of $60 to $80 a barrel (not too high, not too low—just right!) as the prerequisite for economic recovery. If prices are higher, the economy sputters, reducing oil demand and subsequently seriously undermining prices; if they drift lower, not enough investment will go toward exploration and production, so that oil shortages and price spikes will become inevitable a few years hence (indeed, since the oil price crash of late 2008 over $150 billion of investments in new oil projects have been cancelled). If the market can keep prices reliably within that charmed $60 to $80 range, all will be well. Too bad that petroleum prices have grown extremely volatile in recent years: we must hope and pray that trend is over (though there’s no apparent reason to assume that it is).

Let me summarize: the industry needs oil prices that are both stable and near economy-killing levels in order to justify investments necessary to possibly replace depleting reserves and overcome declining production in existing oilfields (I say “possibly” because we have insufficient evidence as yet to conclusively show that new discoveries enabled by expensive new exploration and production technologies can offset declines in the world’s aging giant oilfields).

Should this picture lead the viewer to come away with reassured thoughts of “No worries, happy motoring?” Or does this look more like a portrait of peak oil?

Several commentators (including analysts with financial services company Raymond James Associates and Macquarie, the Australian-headquartered investment bank) have concluded from recent petroleum statistics that global oil production peaked in 2008. Macquarie is saying that world production capacity is peaking this year, which is a nuanced way of saying the same thing, since currently production is constrained more by depressed demand than by immediate shortfalls in supply; in effect both organizations assert that the world will never see higher rates of extraction than the so-far record level of July 2008.

I see nothing in the recent discovery data that should call that conclusion into doubt.

Drumbeat: September 29, 2022

Putin Sounds More Welcoming Tone to Foreign Investors

MOSCOW — Russia’s prime minister, Vladimir V. Putin, whose government took control of several oil companies when he served as president, gave a speech Tuesday saying the state must now step back from the economy and let private enterprise take the lead in pulling Russia out of recession.

The speech, at a banking forum in Moscow, echoed recent assurances by his ministers and economic advisors that Russia is becoming more attentive to the concerns of investors. Mr. Putin also reiterated their suggestions that a new round of privatizations could be in the cards for Russia.

The speech on economic policy was noteworthy for its exceptionally warm endorsement of a role for private investors. That had not been the case in recent years.

Keeping a Close Eye on Impending Risk of Oil Price Spike

The biggest risk of higher oil prices looks to be the latest storm brewing in the Middle East. Our contention has been that oil prices are destined to slip back to their pre-stock-bounce range once economic reality sets in and demand remains persistently low. To that end, we own a hedge against falling oil prices.

However, the likelihood of military action against Iran by either the US, Israel, or both is growing, and such action would cause oil prices to spike. Let’s look at the situation and chance of an attack, and why it would put upward pressure on oil prices.

EPA ready to rejigger wild mileage claims for electric cars

If you thought the only thing more outrageous than the 230 mile-per-gallon claim for the electric Chevrolet Volt was the 367-mpg claim for the electric Nissan Leaf, there’s a change afoot that may make sense to you, reports Drive On’s Sharon Silke Carty:

The concept of judging fuel efficiency on electric cars by the “miles per gallon” they consume is dying a slow death. The EPA and other government agencies are working on a formula that will accurately tell people how fuel efficient electric vehicles are — but since those cars don’t use gas, miles per gallon doesn’t make any sense.

Zenn Ditches Car Production Plans to Focus on EEStor Drive Train

Canadian electric vehicle maker Zenn Motors has been stating its grand vision for a while: to supply a range of automakers and grid operators with energy storage technology created with partner EEStor. That’s what Zenn CEO Ian Clifford told us at the Fortune Brainstorm Green conference earlier this year. But this week, Clifford seems to have accelerated those plans and told Reuters and GM-Volt that Zenn no longer plans to sell its own higher-speed electric vehicle (the cityZENN car), and will also “shift focus away” from the low-speed electric it currently sells.

Instead, Zenn will now focus on acting as a supplier to the auto industry. Working with secretive EEStor, Zenn plans to make an electric drive train, the ZENNergy Drive system, which can deliver those oh-so-controversial performance claims from EEstor: 10 times the energy of lead-acid batteries at one-tenth the weight and half the price, with the ability to move a car 400 kilometers after a 5-minute charge.

“Land grabs” for rice production due to supply threats

Los Baños, Philippines – Recent interest in “land grabs” or the international acquisition of land to produce rice is sparked by a looming threat of inadequate rice supplies.

“To put it simply, there is not enough rice to feed the world,” says Dr. Robert Zeigler, director general of the International Rice Research Institute (IRRI).

“To meet the need and keep rice prices around US$300 a ton – which allows poor rice farmers to make some profit yet keeps rice affordable for poor rice consumers – we need to produce an additional 8–10 million tons of rice more than in the previous year for the next twenty years.”

Spain says has power to spare, can phase out nukes

MADRID (Reuters) - Spain’s top energy official said on Monday the country had enough spare generating capacity to phase out nuclear power stations in the medium term, in line with government policy.

In recent years, Spain has subsidized renewable energy in order to cut its heavy dependence on fuel imports and reduce greenhouse gas emissions. It is now the world’s third-biggest producer of wind power and the second-biggest of solar.

Nuclear power is unpopular in Spain and both major political parties ruled out building new plants in last year’s elections.

Can Wind Power Be Stored?

Wind farms typically generate most of their energy at night, when most electricity demand is lowest. So a lot of that “green” energy is wasted.

So the big question is: How do you bottle that power for air conditioners and other appliances that are busiest during the day?

Alternate-energy scramble on across West

SALT LAKE CITY (AP) — Want some solar energy with your geothermal?

In Utah, state officials are fielding various combinations of energy proposals, a list that includes solar and geothermal installations and an energy storage project that would turn salt caverns into a kind of giant battery. The caverns would hold compressed air when they’re not storing natural gas.

‘Brighter days ahead offshore’

Offshore capital expenditure is forecast to increase from last year’s $260 billion to $360 billion by 2013 - 2023 with the long-term outlook for the industry remaining bullish, market consultants Douglas Westwood said today.

“Leading indicators have been improving since the beginning of the year - our view is that offshore expenditure will grow,” Steve Robertson. the director of Douglas Westwood, told the Trends in the Offshore Drilling Industry conference in London today.

“From 2011 onwards, delayed projects will come back into the market.”

…Robertson highlighted demand from China being a key driver for oil demand fundamentals remaining strong.

“If China follows Korea’s path - as it has largely to date - oil demand will more than double in the next decade,” he said.

Robertson questioned whether supply could meet this demand, with 66 out of 99 producing countries having reached their peak production by 2008.

“Peak oil is not a myth or a scare tactic, in our view it is very much a reality,” he said.

Mid-sized natural gas producers on the rebound?

The past few months have been difficult for intermediate oil and gas producers in Canada, especially those with a focus on natural gas as prices have flatlined. However, as Blackmont Capital ramps up its coverage of this sector there is room for optimism.

Gordon Currie, analyst with Blackmont, continues to increase his coverage universe, adding five more mid-sized producers trying to survive and conserve capital in a period of low pricing.

What Is Peak Oil?

Peak Oil is a term that has become common currency in energy debates in last three years, due in large part to the spectacular rise in the price of crude between 2005 and the end of 2008. But what does Peak Oil actually mean and, more importantly, what do I mean when I use it in my articles?

Mexico May Avoid Credit Rating Downgrade, JPMorgan Says

(Bloomberg) — Mexico may stave off a credit- rating downgrade, JPMorgan Chase & Co. said. “From our conversations with the rating agencies, they appear to be giving Mexico the benefit of the doubt and will likely wait to see what components of the fiscal reform are approved by Congress,” JPMorgan analysts led by Joyce Chang wrote in a report to clients.

Ecuador court lets judge leave Chevron case

QUITO, Ecuador (AP) — An Ecuadorean court has said it will allow a judge to withdraw from overseeing a $27 billion lawsuit charging the Chevron Corp. with environmental damage in the Amazon rain forest.

The lawyer representing the plaintiffs in the lawsuit told The Associated Press on Tuesday about the court’s decision to allow Judge Juan Nunez to step down. Pablo Fajardo says the case now will be heard by Judge Nicolas Zambrano.

Nigeria’s main rebel group warns Chinese oil firms

ABUJA, Sept 29 (Reuters) - Nigeria’s most prominent militant group on Tuesday warned Chinese oil companies not to invest in the impoverished Niger Delta until peace was achieved in the region.

“The Chinese should be careful about investments until there is justice in that region,” a spokesman for the Movement for the Emancipation of the Niger Delta (MEND), the main militant group responsible for sabotage of Nigerian oil installations, told Reuters.

“We can guarantee that if the government of Nigeria fails to address the root issues, the Chinese will regret they were negotiating with the wrong people.”

Risky business: insuring countries against climate catastrophe

HONG KONG, China (CNN) — The last fifty years have borne witness to a spate of climate related disasters across the world causing over 800,000 fatalities and $1 trillion in economic loss.

Those stark facts come from the Economics of Climate Adaptation (ECA) Working Group, a group of NGOs and corporations that has produced a report warning that if countries do not take active steps to build resilience to climate change soon, they are likely to suffer even larger economic losses in the coming decades.

According to the ECA report published on September 14, climate catastrophes have risen in direct proportion to global temperatures over the last several years.

Preparing for the Oil-Driven Economic Collapse

Part of the problem with being an analyst is that we are expected to think as if we were living five years in the future.

While the market is undergoing a recovery at the moment, I was recently part of a massive panel of ex-Intel executives who were anticipating another collapse, this time energy-driven. It appears we have dropped into the five-year window of anticipating that.

Only China, at the moment, appears to be putting in place the resources to offset this collapse, and even it is not making the progress needed to fully offset it. However, what China is putting into place will make the problem even worse for us, and it is time to start thinking about this.

Preparing for Peak Oil: How Our Lives Will Change Forever

What do the following three cities have in common? Maracaibo in Venezuela, McCamey in Texas, and Baku in Azerbaijan (formerly part of the Soviet Union)? They are all dead ghost towns, former oil production supercenters of their respective nations, and indeed the world. They are now littered with the deteriorating skeletons of oil towers and pumps that have long since ceased to nod their bowed heads in prayer to their subterranean god. Their landscapes, eerily silent and still, are reminiscent of World War I European battlefields – stripped of life and livelihood.

We worship oil - and while an impressive 70% of crude oil is refined into transportation energy, a whopping 98% of transportation energy comes from oil. And if all the predictions are correct, the impact on our economy and our civilization is such that any delay in our response is only going to magnify the coming cataclysm. Imagine an asteroid hitting the planet in slow motion.

The end of the world as we know it

San Francisco will face spreading poverty, possible food shortages, skyrocketing costs and increased gentrification as the production of oil and natural gas declines in coming years, according to a report issued last week.

The report by the Peak Oil Preparedness Task Force had some grim predictions, but also said that if officials begin planning now, San Francisco will be alright.

The coming Population Wars: a 12-bomb equation

News flash: the “Billionaires Club” knows: Bill Gates called billionaire philanthropists to a super-secret meeting in Manhattan last May. Included: Buffett, Rockefeller, Soros, Bloomberg, Turner, Oprah and others meeting at the “home of Sir Paul Nurse, a British Nobel prize biochemist and president of the private Rockefeller University, in Manhattan,” reports John Harlow in the London TimesOnline. During an afternoon session each was “given 15 minutes to present their favorite cause. Over dinner they discussed how they might settle on an ‘umbrella cause’ that could harness their interests.”

The world’s biggest time-bomb? Overpopulation, say the billionaires.

David Attenborough and Jonathon Porritt challenged on population growth

The population explosion in poor countries will contribute little to climate change and is a dangerous distraction from the main problem of over-consumption in rich nations, a study has found.

It challenges claims by leading environmentalists, including Sir David Attenborough and Jonathon Porritt, that strict birth control is needed to reduce greenhouse gas emissions.

The study concludes that spending billions of pounds of aid on contraception in the developing world will not benefit the climate because poor countries have such low emissions. It says that Britain and other Western countries should instead focus on reducing consumption of goods, services and energy among their own populations.

BOOK REVIEW: $20 per Gallon

I have to admit that when I saw the title of Christopher Steiner’s new book, I scoffed a bit. Twenty Dollars per Gallon of gas seems like an outrageous, unfathomable price, even when you’re a believer in peak oil. But part of the beauty of Steiners’ book is its ability to track the effects of ever-more-scarce oil in believable detail. Whether the author’s predictions of local food, high-speed trains and alternative plastics are correct, they are excellent illustrations of the pervasiveness of petroleum.

Jeff Rubin warns of imminent rise in oil prices to triple digits

Rubin offered several explanations as to why oil prices will soon rise significantly. First, he said that today’s most important oil sources, like the Athabasca Oil Sands in northeastern Alberta, are far more expensive to use than prior supplies. Another problem, he said, is that prices in oil-producing countries like Saudi Arabia and Venezuela allow unhindered consumption. Finally, cheap cars in India and China, such as the $2,200 Tata Nano, are adding to the existing explosion in world oil demand that undermines consumer cutbacks on oil use in the United States and Canada.

“Every person who gets a Tata gets a straw to start sucking at a world gasoline supply that has not grown in the last four years. The more that they suck, the less that we suck, and what we do suck and slurp up costs us increasingly more,” said Rubin.

Aramco CEO: Oil demand rebound will take time -PBS

NEW YORK (Reuters) - Oil demand in the United States and Europe remains weak but the economic crisis will not lead to a permanent reduction in global consumption, the head of Saudi Arabia’s state oil company said in an interview with a U.S. television station.

“It will take time to make up for the millions of barrels of lost demand that we have experienced,” Saudi Aramco CEO Khalid Al-Falih said in an interview with Nightly Business Report to air Monday on PBS, adding, “But ultimately, it will come.”

Tools to Chart Mexico’s Declining Oil Production

For those of you who’d like to stay more up to date on the decline of Mexican oil production, a situation that is quite serious despite lack of Western media attention, today’s post offers up a framework for understanding the monthly oil production figures, and then shows you how to best obtain and understand this data.

Rising Nat. Gas Prices Could Spur Marcellus Shale Drilling

Drilling in the natural gas-rich Marcellus shale formation that stretches across western Pennsylvania has been stunted by the recession, but a Pittsburgh oil and gas expert believes change is coming in 2010.

Duquesne University Professor Kent Moors, an internationally recognized authority in oil and gas policy and finance issues, predicted that the price of natural gas is on the verge of increasing to a point at which it will become profitable for companies to begin drilling.

And if Moors is correct that the price could nearly double by the middle of 2010, Pennsylvania is in store for a whole lot of drilling.

White House to Go After Iran’s Oil Income

(CBS/AP) The Obama administration is planning to push for new sanctions against Iran, targeting its energy, financial and telecommunications sectors if it does not comply with international demands to come clean about its nuclear program, according to U.S. officials.

The officials said the U.S. would expand its own penalties against Iranian companies and press for greater international sanctions against foreign firms, largely European, that do business in the country unless Iran can prove that its nuclear activities are not aimed at developing an atomic weapon.

Cnooc Holds Talks With Nigerian Government Over Oil Licenses

(Bloomberg) — China National Offshore Oil Corp., the country’s third-biggest crude producer, is among companies in talks to acquire 16 production licenses in Nigeria, the president’s office said today.

No decision has been taken on reassigning the licenses which were originally awarded to other producers and expired last year, Olusegun Adeniyi, a spokesman for Nigeria’s President Umaru Yar’Adua, said in an e-mail today.

TIMELINE: Resource-hungry China invests in Africa

China’s government and its state-controlled companies have invested billions of dollars in Africa to secure natural resources for the Asian giant’s growing economy and build Beijing’s political influence in the developing world.

Here is a timeline of some major deals since 2007:

Indonesia falling short in crude output

Indonesia’s average daily oil production for September stood at 951,867 barrels per day, about 9000 bpd shy of its targeted 960,000 bpd, according to head of BPMigas, the country’s upstream watchdog, BPMigas.

China to Cut Fuel Prices Tomorrow by 190 Yuan a Ton

(Bloomberg) — China, the world’s second-largest energy user, will cut gasoline and diesel prices by as much as 3 percent tomorrow to reflect crude oil costs, the National Development and Reform Commission said.

KBR wins Saudi Shaybah gas contract

KHOBAR, Saudi Arabia (Reuters) - U.S. firm KBR won a contract to work on a natural gas liquids project at Saudi’s Shaybah oilfield, it said in a statement on Tuesday.

The award comes just a few days after after Canada’s SNC-Lavalin won another deal for gas work from state oil firm Saudi Aramco. Aramco is focusing on expanding gas output as it looks to meet rising domestic demand from power plants and the petrochemical industry.

Russia to sell off oil stakes

Russia is planning gradually to reduce its stakes in big state oil companies and those in a number of other sectors, as part of its post-crisis strategy, Finance Minister Alexei Kudrin told reporters today.

Chevron Asks Court to Remove Ecuador Judge From Pollution Case

(Bloomberg) — Chevron Corp., the second-largest U.S. oil company, asked a court in Ecuador to remove the judge presiding over a $27 billion environmental lawsuit against the company there, saying he is biased.

Schlumberger Presses for Shale-Gas Openness as Regulation Looms

(Bloomberg) — Schlumberger Ltd., the world’s largest oilfield-services provider, is pressing suppliers for permission to disclose the chemicals used in a drilling process that could be slowed by regulation after spurring an increase in U.S. natural-gas production.

“We have spoken with our suppliers regarding the disclosure of their chemicals,” Schlumberger spokesman Stephen Harris said. “Our suppliers do understand the need for a level of disclosure and are working to address that need.”

On the road again: RV sales see an upswing

A closely watched report Tuesday on consumer confidence is expected to show modest improvement, but some economists are heartened by a more obscure measure of buyer sentiment: recreational vehicle sales.

RV wholesale shipments jumped 16% in August from July to a seasonally adjusted annual rate of 209,800, the Recreation Vehicle Industry Association reports Tuesday.

Houston Ship Channel reopens after oil spill

HOUSTON – The Coast Guard says three miles of the Houston Ship Channel are reopened after a 10,500-gallon oil spill closed the section during the weekend.

Kuwait oil fund eyes renewables

Kuwait’s oil fund, the Kuwait Investment Authority (KIA), is ready to study investment opportunities in alternative and renewable energy, it was reported today.

RWE CEO Says Germany Should Talk About Extending All Reactors

(Bloomberg) — RWE AG Chief Executive Officer Juergen Grossmann said Germany should talk about extending the lifespan of all its nuclear reactors beyond planned early retirement dates.

India’s Nuclear Power Generation May Increase 100-fold by 2050

(Bloomberg) — India’s nuclear power generation capacity may increase more than 100-fold over the next 40 years as the South Asian nation reduces dependence on fossil fuels blamed for global warming.

“If we can manage our program well,” our strategy could yield 470,000 megawatts of power by 2050, Prime Minister Manmohan Singh told a conference on peaceful uses of atomic energy in New Delhi today. “There will be huge opportunities for the global nuclear industry to participate in the expansion of India’s nuclear energy program.”

Cara Peck: Tackling the Energy Crisis at a Grassroots Level

Cara Peck is a young life scientist at the Environmental Protection Agency (EPA) confronting the nation’s energy crisis, air quality and ecological balance at the grassroots level.

Peck, 28, helped shepherd an EPA pilot project in the San Francisco Bay area to convert 73,000 tons of organic food waste from restaurants into electricity per year, keeping the material out of landfills and limiting greenhouse gas emissions.

Could Sorghum Become a Significant Alternative Fuel Source?

Could sorghum become a significant alternative fuel source? That’s what faculty from Salisbury University’s Richard A. Henson School of Science and Technology, with Solar Fruits Bio Fuels, LLC, are hoping to find out during a series of trials this fall.

Since May, eight sweet sorghum varieties have been growing on a Wicomico County farm for evaluation as potential stock for ethanol production on Delmarva.

Ben & Jerry’s, GE work on greener freezers for US

WASHINGTON – Think propane and butane are just for barbecuing? Think again: The common cooking fuels can also chill your drinks and ice cream with less energy and almost none of the global warming worries of current refrigerants.

Some of the world’s largest consumer product companies are promoting freezers and refrigerators in the U.S. that use propane, butane and other coolants that don’t trap heat in the atmosphere as much as Freon and other conventional refrigerants.

Kunstler: LA Almost Completely Hopeless

James Kunstler came back, people. He came back to LA even though he thinks the city is hopeless and tragic and Kazakhstanish! In this week’s KunstlerCast, the anxiety attack-generating urbanist discusses his recent trip to Los Angeles, and can you believe he had one nice thing to say?

What if Everyone in the World Wanted a One-Ounce Gold Coin?

It’s been my experience that the more emotionally one is invested in something — even if it is irrational and harmful — the more viciously one will defend it — even it is irrational and harmful.

Auto-dependent suburbia, popular democracy, bigger government and other abusive relationships, infant sacrifice and the designated hitter rule: these things all make sense to some groups, somewhere at some time. Doesn’t make any of them morally right or worth keeping.

New book offers solutions for world’s energy crisis

Running on Empty: A Handbook for Understanding and Surviving the Energy Crisis, by Phillip J. Greene, seeks to provide an easy-to-understand explanation of the world’s current energy crisis and practical tips on saving energy.

Greene understands the need for resource conservation. After surviving the scarcity of war rations as a young child in the 1940s and living through the energy crisis of 1973, all of the recent buzz about global warming, oil dependency and energy crises had a familiar tone for him. During his research of the 21st-century energy crisis, Greene felt there were no books out there that described what is actually happening in a constructive and useful manner.

Kjell Aleklett: Our oily food

In one of his first speeches as USA’s president, Barack Obama declared that, “No single issue is as fundamental to our future as energy”. This is the same viewpoint that I have had since the mid-1990s. Energy is the foundation for our daily bread, our warm home and our work. If our energy security crumbles then our society will also crack.

Once Upon a Time, Democrats and Republicans Worked Together on the Senate EPW Panel

In a speech Thursday on the Senate floor, Boxer underscored that partisan divide when she attacked a Republican-led effort aimed at halting U.S. EPA climate regulations for a year.

“The interesting thing is most of these environmental laws started with a Republican president named Richard Nixon,” Boxer said. “What happened to the days when environmental laws were supported on both sides? Those days appear to be gone.”

Camco Shares Fall After Loss More Than Doubles on Writedown

(Bloomberg) — Camco International Ltd., the U.K. manager of emission-reduction projects that has an Al Gore- linked fund as its biggest shareholder, dropped the most in more than seven months in London after its first-half loss doubled.

Warmer weather threatens moose in Minnesota

Minnesota has an estimated 7,600 moose, nearly all in the forests of northeastern Minnesota, where plentiful swamps, lakes and streams provide good habitat. Yet they’re beleaguered by increasingly warm weather and parasites such as brainworms, ticks and liver flukes.

“Almost without exception all of the indicators are that the population is declining,” said Mark Lenarz, a moose expert with the Minnesota Department of Natural Resources.

Climate pact must include forest scheme: WWF

BANGKOK (AFP) – A leading environmental group on Tuesday urged delegates at UN climate talks in Bangkok to include plans to reward nations for saving their forests in any deal on global warming.

U.S.-China Climate Change Leadership: Five Ideas for a Common Agenda

China and the United States-the world’s two largest carbon emitters-should identify a handful of “world critical” technologies that address energy production and climate change, according to the China Reform Forum, the Chinese think tank, and the Carnegie Council, a New York-based institution. The two countries should then jointly develop the technologies under a bilateral regime that promotes private investment, project development, and shared intellectual property rights.

Exelon to Quit Chamber Over Climate Bill

Exelon, one of the country’s largest utilities, said Monday that it would quit the United States Chamber of Commerce because of that group’s stance on climate change. It was the latest in a string of companies to do so, perhaps a harbinger of how intense the fight over global warming legislation could become.

“The carbon-based free lunch is over,” said John W. Rowe, Exelon’s chief executive. “Breakthroughs on climate change and improving our society’s energy efficiency are within reach.”

PG&E, Duke Energy Walkouts Show U.S. Split on Climate

(Bloomberg) — PG&E Corp. quit the U.S. Chamber of Commerce. Nike Inc. and Johnson & Johnson criticized the group for its stance. Duke Energy Corp. resigned from the National Association of Manufacturers.

Climate-change legislation is splitting the U.S. business community as few initiatives have in recent years. Groups such as the Chamber of Commerce, more accustomed to tangling with unions and environmentalists, find themselves facing off with prominent members who are defecting or joining new organizations to promote and shape legislation.

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