Uncertainty Over Distillates

Odd weather patterns and a shaky economy have made investing in heating oil and other distillates risky.

Energy consumption and progress

I’ve written lately that economists are the high priests of Progress. I don’t subscribe to the doctrine of Progress, which is a faith-based view of our future. Apparently, for most people all of the time, the alternative is simply unthinkable. The truth is that we had wars 4,000 years ago, and we have wars now. The large majority of human beings were poor and disenfranchised 4,000 years ago, and the large majority still are today.

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A summary of Adam Brandt’s "Review of Mathematical Models of Future Oil Supply"

This paper has two goals. First, it provides a systematic review of oil depletion models produced to date. This serves to make obscure past works (often difficult to find) available to a wider audience so as to limit repetition of past efforts. Second, this paper provides synthesizing critique of previous modeling efforts, with the aim of improving future oil depletion modeling.

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A peak oil reference

Despite the volumes of material that have been written on peak oil, there still did not exist (to the best of my knowledge, anyway) a single online reference that presents this very complex topic in a form that’s both accessible to newbies, and that links to the deeper data and theory. So I built one, on contract with ASPO-USA, based on some of their existing material and my old “Peak Oil Media Guide” from 2008. It’s still a fairly skeletal first draft, comprising only 16 web pages, but hopefully it will grow, and serve as a useful guide to the public, the media, and others.

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Energy consumption and progress

I’ve written lately that economists are the high priests of Progress. I don’t subscribe to the doctrine of Progress, which is a faith-based view of our future. Apparently, for most people all of the time, the alternative is simply unthinkable. The truth is that we had wars 4,000 years ago, and we have wars now. The large majority of human beings were poor and disenfranchised 4,000 years ago, and the large majority still are today.

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Peak oil review - Aug 30

A weekly roundup of peak oil news, including:
-Oil and the global economy
-China - the costs of growth
-Macondo - the blame game

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A Summary of Adam Brandt’s "Review of Mathematical Models of Future Oil Supply"

Dr. Adam Brandt of Stanford University’s Department of Energy Resources Engineering sent us a copy of a paper he wrote called Review of mathematical models of future oil supply: Historical overview and synthesizing critique. There seem to be quite a few things of interest, so I have summarized the paper, since the author did not have the time to do this. The box quotes are from the paper.

This paper has two goals. First, it provides a systematic review of oil depletion models produced to date. This serves to make obscure past works (often difficult to find) available to a wider audience so as to limit repetition of past efforts. Second, this paper provides synthesizing critique of previous modeling efforts, with the aim of improving future oil depletion modeling.

A major conclusion of the study is that existing models fare poorly at prediction:

Models based on quite disparate assumptions (e.g., physical simulation vs. economic optimal depletion) have produced approximately bell-shaped production profiles, but data do not support assertions that any one model type is most useful for forecasting future oil production. In fact, evidence suggests that existing models have fared poorly in predicting global oil production. The greatest promise for future developments in oil depletion modeling lies in simulation models that combine both physical and economic aspects of oil production.

Types of Models

Brandt describes four kinds of oil depletion models:

1. Curve Fitting Models

Curve-fitting models of oil production have been used since the 1950s. A variety of models exist, but their general approach is as follows.

1. Define a mathematical function to statistically fit to historical production data.
2. Include constraints to improve the quality of model fit.
3. Fit the constrained model to historical data to project future production.

Curve-fitting models vary in the function used, in the use of ultimately recoverable resources (URR) as a constraint and in the usage (or not) of symmetric model functions.

The paper provides descriptions of various curve fitting models, including Hubbert’s logistic model.

2. System simulations.

Simulation models (in our classification scheme) differ from curve-fitting models as follows: simulation models explicitly represent underlying physical and/or economic mechanisms that govern oil discovery and extraction, letting the shape of the production profile emerge from these mechanisms rather than specifying it in advance. These models include a broader range of independent variables, addressing a key problem of curve-fitting models noted by Taylor [38]: “No cause-and-effect relationship exists between time and the exploitation of crude oil.”

Thus, with the simulation models, one does not need to assume that the oil will be pumped out as quickly as possible. Oil production can follow demand, or some other approach. Brandt comments that a major difficulty of complex simulation models is the numerous input data that are required to parameterize the functional relationships. Figures 3 and 4 give an example of parts of a simulation model.

3. Bottom-up models

Bottom-up models use detailed field- or project-level data to “build up” projections of production from larger regions (such as a nation or the world). Bottom-up modeling has become increasingly prominent as discoveries have slowed and an increasing fraction of future oil is expected to come from already-discovered fields [52].

The most widely published bottom-up model is that of Campbell and co-authors, produced since the mid-1990s [53-55] using national-level models of production to generate global predictions. . .

Skrebowski has produced a bottom up model [58e61], using a database of oil field “megaprojects” e oil field development projects above a threshold size. Because large projects provide the majority of new oil output, this approach provides insight into short-term capacity increases.

4. Economic models of Oil Depletion

The major subcategories of these are

1. Economic optimal depletion theory, such as studied by Hotelling.

2. Economietic models of oil depletion, such as developed by Fisher and later by Kauffman and Cleveland.

Drawbacks and problems of existing models

1. Curve Fitting Models

Unfortunately, curve-fitting models are often used to make overly specific predictions of future production, ignoring many of the difficulties with such an approach.

An example is given by the excessive importance placed by some analysts on the supposed novelty and accuracy of Hubbert’s 1956 prediction. First, Hubbert’s prediction was predated by at least four publications that provided bell-shaped graphs of future U.S. oil production [13,14,81,82], and no fewer than 7 estimates from the 1950s predicted a peak in US oil production between 1963 and 1973, the approximate range of Hubbert’s low-high predictions (see Table 1). Second, Hubbert’s prediction of a peak in 1970 was based on his high value of URR, which he considered unlikely to be ach- ieved (and which itself was an underestimate). Interpretations of these facts vary: one could argue that Hubbert’s method was not extraordinary, as other methods also came close to predicting the peak date. . .

Another often neglected fact is that all of these studies of the 1950s underestimated URR, some significantly so, despite their reasonably correct projections of the peak date (see Table 1). Cumulative US production has already exceeded 200 Gbbl and significant reserves still remain. Thus, production has not dropped as quickly as Hubbert (or the other authors above) thought that it would, and the US curve is asymmetric [83].

Major issues Brandt raises about curve fitting models include

a. Using exogenous estimates of URR to constrain curve-fitting models is problematic because estimates of URR have been too low in the past.

b. The use of logistic or bell-shaped functions is difficult to support with rigorous scientific reasoning.

c. Production profiles are often asymmetric, with slower rates of decline than rates of increase.

d. Curve fitting models do not account for economic factors, such as demand or resource substitution.

2. Simulation Models

a. Authors often make huge assumptions about the assumed functions and the parameters of the model.

b. Models are often unstable and finely balanced between positive and negative feedbacks. They may omit the role of inertia.

c. While models may fit past data well, they often have poor predictive powers.

3. Bottom’s up models

a. If a person builds a model from a magaprojects data base, or similar data base, the person needs more, rather than fewer assumptions about the process-peak production, decline rate, use of enhanced oil recovery

b. It is difficult to model projects not included, like infill drilling, workovers, and use of enhanced oil recovery.

c. The results are generally not reproducible; there is much reliance on the modeler’s judgment.

4. Economic Models

So far, they have been kept simple, but their predictive value has been low. They need to include political factors, but it is unclear how to include them.

The Problem of Prediction

Existing models have fared poorly in predicting global oil production. Even for models that are commonly thought to be successful, after-the-fact interpretation of the success or failure of a predictive effort is not easy (recall the discussion above of Hubbert’s successful prediction). . .

This author’s judgment with respect to the predictive value of models is as follows (noting that these topics are the source of much current debate):

1. Simple curve-fitting models can provide a first-order understanding of future production, assuming a given level of URR and no significant shocks to the system (e.g., demand continues to grow at rates within historical ranges). Such models are likely sufficient to predict the decade of peak production for an estimate of URR. The mathematical logic here is that consumption is so high during the years of peak production that minor variations in URR, or minor deviations due to political or economic factors, will not serve to significantly affect the date of the peak [111]. Unfortunately, such a conclusion is often of little practical use: major disruptions (e.g., the oil crises of the 1974 and 1979), or major errors in URR estimates have occurred in the past, and could occur again.

2. More-detailed mechanistic models (e.g., bottom-up, econometric), exhibit greater fidelity in reproducing historical data and are therefore likely more useful for near term predictions. But this advantage likely wanes for long-term forecasts because they are no less “brittle” with respect to uncertainties than other model types.

3. The most promising avenue for increasing our understanding of oil production lies in integrating the economic and physical factors of oil production.

4. There is no scientific justification for making specific predictions (e.g., the year of peak production) with any of the surveyed mathematical models: the uncertainties involved make such predictions of little use. Efforts should move away from making these kinds of predictions, and toward understanding the impacts of the inevitable transition to oil substitutes.

Improving Oil Depletion Modeling

It is no longer justifiable to build oil depletion models that neglect the reality of economic substitution with alternative resources like oil sands or coal-based liquid fuels. Nor should economic models neglect the underlying physical, geological, and engineering considerations that fundamentally drive the economics of oil production. Future progress will require building integrated models that account for both the economic and physical realities of oil production.

BP’s Deepwater Oil Spill - Another Weather Pause - and Open Thread

The weather is currently holding up the proceedings at the Deepwater Horizon well site. The seas are some six to eight feet, which is apparently the height of the top 1/3 of all waves.

(There is a table that shows how it is affected by wind speed, duration and fetch, which last is the surface area that is being affected by that wind. There is also a site with a post on wind basics that explains the basics. So the underwater effort is likely to be put off for another two to three days (depending on how Earl behaves, though it’s not supposed to get close, but it might. The current problems are more local to the Mississippi Delta).

So there will be a delay for at least a couple of days until the water settles down a little more. The problem is caused by the considerable length of the risers and cables on which the large steel structures sitting at the sea bed will ride as they are moved about. With the waves lifting and the swells rocking the vessels there are risks both from the changes in dynamic loading, and also in generating a pendulum effect as the weights sway. Much better to pause a little longer.

At his press conference today the Admiral described the plans for the next step in the process:

. . . the Discoverer Enterprise (will) remove the capping stack and then back off. (At) that point (the) Q4000 will come in and lift the blowout preventer (BOP) which will also (hold) the transition spool which was put in to accommodate the capping stack. And a third step will be (for the) Development Driller II, which is drilling a second relief well, (and which) will move in with the new blowout preventer, and put the blowout preventer on.

Once that blowout preventer is in place, the well will be in a position to withstand the pressures expected on the intercepts of the analysts by Development Driller III and the drilling mud that will be forced in there when that happens. All is in readiness, and at this point we are just standing by for a weather window.

In discussing the current thoughts on why there are three pieces of pipe in the BOP, the Admiral also explained where his concept of the the pipe being fragile was generated.

When we first were looking at the riser pipe, if you remember, there was a kink. And then we were looking to cut the riser pipe, and we made a shear cut. And then we actually unbolted the stub that was bolted to the flanges before we put the capping stack on. At one point, we actually saw two pieces of pipe.

The original presumption at that point, and this is a long time ago now, was that a part of the pipe had fallen down into the Lower Marine Riser Package, and it was alongside a pipe that was extending through the centerline down into the BOP. As we have gotten into the blowout preventer itself and taken a good look at it, we found out that that pipe is fragile, is broken into three pieces, and we no longer have a pipe that’s suspended in the centerline.

So our assumption is, our original assumptions on the pipe - and at that time they actually might have been. These pipes are being subjected to a lot of different forces in there. If you remember, we’ve had the dynamic kill and the static kill. There have been a lot of different fluids that have been forced through the blowout preventer or the capping stack, Lower Marine Riser Package.

In general, we have concluded that the pipe is of extreme fragility. And while we could try and recover it, the pipe that we can get to right now is not connected to any pipe that is on the (center) line. It could extend out into the BOP. So for that reason we just foregone any more fishing experiments, and have gone directly to remove the blowout preventer.

If I understand this correctly the current thinking is that none of the pieces of pipe above the shear ram are being held by it, and that they are less consequential as a result. Whether that also means that the DP was actually sheared in half by the ram is a different question, but apparently not one that the current investigation is going to look at further at the moment.

It does, peripherally suggest that there may not be any pipe now below the rams. Because if the different treatments that have caused the pipe to break into these bits did so across the shear ram plane, then there may not be enough holding the pipe below the BOP and it may be long gone. The gamma scan that showed the DP was there was, after all taken very early in this process, and much has happened to the well since.

The Admiral also noted that the drop in pressure (from the anticipated perhaps 9,000 psi) when the well was finally shut in is now believed to be due to reservoir depletion.

Oh, and for those of you admiring the ability of those on the platform to fish, the Admiral noted that the team involved in those operations included BP, Schlumberger, Transocean, Cameron and Baker Hughes personnel.

Incidentally I also think there was another transcription error (I tried to smooth some earlier ones by interpreting the words transcribed with my own (in paren, within the quotes). In dealing with the question of whether the DP is still there, and if it is held in place with either hydrates or cement, he said:

The answer is I don’t think we know. You know we think there may be a chance the pipe might have adhered to cement during the static kill process. We don’t know that to a virtual certainty. But we don’t want to try and pull the blowout preventer without having a contingency ready to deal with that eventuality.

So what we’re doing is, we’re going to life the blowout preventer. If it doesn’t come off easily, we’re going to apply 80,000 pounds of lift. And maybe somewhat of a mis—we’ll calling that the gentle pull. If for some reason that does not free the pipe then we will go in and mechanically open the rams and lift the blowout preventer out over the pipe, and then we’ll share the pipe with the wellhead.

I believe that last ‘share” should be “shear” and will, actually, more likely be a saw cut.

And the small flow of bubbles from the stack, which the Admiral feels inconsequential, as earlier such flows proved to be, is still going on.

Drumbeat: August 31, 2022

Interview with Michael Smith (Part 2 of 2)

I feel the peak/plateau period is much delayed because of the recession. Currently I am looking at around 2020 - perhaps as late as 2025. But of course it is dependent on what happens to the global economy (and the environment) between now and then. When I first started forecasting in the late 1990s, I had a production plateau beginning around 2016. Over time, supplies got tighter and tighter and oil prices started to rise, and the plateau moved nearer to around 2012. Now it has moved out to 2020, showing how uncertain this modeling can be because so many technological, financial, political and social variables are at work. The fluctuation points to volatility of course which is a signal of tight energy supply. If there is a new surge in economic growth and China and India continue to grow and mop up oil supplies, then it will move back to 2016 very quickly.

Pemex Plans to Invest $269 Billion in Next 10 Years to Increase Oil Output

Petroleos Mexicanos, the state-owned oil company, plans to invest $269 billion by 2019 to increase production, the company’s chief executive officer said.

Pemex, as the company is known, should not have trouble having its planned investments approved by Congress and will spend about $27 billion a year over the next decade, CEO Juan Jose Suarez Coppel, said today at a conference in Mexico City.

Mexico sees big potential near Tsimin oil find

MEXICO CITY (Reuters) - Mexico’s state oil company Pemex is increasingly optimistic about the potential of what appears to be a new cluster of light crude oil fields around its Tsimin discovery, according to company executives.

The side-by-side Tsimin and Xux discoveries are believed to hold the equivalent of 1.5 billion barrels of proved, probable and possible oil reserves said Manuel Teran, a Pemex engineer working on the discoveries, at a petroleum engineering conference this weekend.

For BP, post-spill advertising comes at an unknown cost

FORTUNE — The coverage of BP’s Deepwater Horizon spill is teaching the typically secretive oil industry something about life in the limelight. Now, the company has to account for every cent it spends.

Bahamas Bans Offshore Drilling

The Public is advised that The Ministry of The Environment has suspended consideration of all applications for oil exploration and drilling in the waters of The Bahamas. The Ministry seeks, by this decision, to maintain and safeguard an unpolluted marine environment for The Bahamas, notwithstanding the potential financial benefits of oil explorations.

Additionally all existing licenses will be reviewed to ascertain any legal entitlement for renewal.

Coal India May Set Up Power Plants Because of Shortfall in Rolling Stock

Coal India Ltd., the world’s largest producer of the fuel, said it may be forced to set up power plants to use coal that’s piling up because there aren’t enough railway wagons to carry supplies to utilities.

“It’s not a business we would naturally like to be in because there are already so many players,” Chairman Partha Bhattacharyya said in New Delhi today. “If stocks keep building up, we may not have an option.”

Russia to protect domestic car makers with higher import duty

Russia will gradually raise the import taxes for the foreign-made cars, Russian Prime Minister Vladimir Putin said Monday.

Putin noted this would be done to stimulate foreign companies to build their production facilities in Russia.

Electricity and climate change

Also as a result of global warming, the countries of this region are witnessing dramatic increases in the demand for electric power, as the use of air-conditioning increases in households, shops, places of worship, offices, hotels and factories. And as a result of the exceptional hot weather, the sale of all types of air-conditioning devices flourished, and their stocks were effectively depleted in Lebanon, Jordan, Syria, Egypt and other countries, while their retailers achieved exceptional profits, after taking advantage of the circumstances.

Why “green wizards” get us nowhere new…

So, first question, what is a ‘green wizard’? Greer defines green wizards thus, “individuals who are willing to take on the responsibility to learn, practice and thoroughly master a set of unpopular but valuable skills – the skills of the old appropriate technology movement – and share them with their neighbours when the day comes that neighbours are willing to learn”. The idea, as I read it, is that any notion of a co-ordinated response, a la Heinberg’s ‘Powerdown’, a scenario where communities self-organise and work with, or without, their local authorities, to start the rebuilding of that settlement’s resilience, reduce its oil dependency and carbon footprint, is now for the bin, condemned as impractical and unrealistic. Greer appears to have given up any notion that such a thing might be possible, stating “a movement is a great thing if you want to hang out with congenial people and do interesting things together. It’s just not usually a good way to make change happen”.

Are People Smarter Than Chipmunks?

After witnessing this eccentric behavior, I began wondering why the chipmunk would behave so illogically. It didn’t take too long to realize that it simply doesn’t possess the right equipment to understand the threat posed by a car. A chipmunk’s brain and the behavior produced by it are the result of ages of natural selection – a process that took place in the absence of roads and cars. The mind of a chipmunk, therefore, is incapable of properly interpreting the data coming its way, especially when it’s coming at 60 miles per hour.

The chipmunk’s maladaptive behavior has some prominent parallels with our own predicament. The data are approaching us at a fast and furious clip. We have ample and disturbing evidence about climate destabilization, dwindling energy resources, social breakdowns, and a host of environmental maladies. We know that the economy is a subsystem of the finite planet, and that increasing the scale of the economy impinges on the earth’s ecosystems. In an age of biodiversity die-offs and political buy-offs, however, we don’t seem to possess the wherewithal to interpret the data correctly.

Lenders Back Off of Environmental Risks

Blasting off mountaintops to reach coal in Appalachia or churning out millions of tons of carbon dioxide to extract oil from sand in Alberta are among environmentalists’ biggest industrial irritants. But they are also legal and lucrative.

For a growing number of banks, however, that does not seem to matter.

After years of legal entanglements arising from environmental messes and increased scrutiny of banks that finance the dirtiest industries, several large commercial lenders are taking a stand on industry practices that they regard as risky to their reputations and bottom lines.

New Study Links Toxic Pollutants to Canadian Oil Sands Mining

Native Canadians living downstream from the oil sands mines in Alberta have long contended that their high cancer rates were related to the expanding excavation of bitumen for the production of synthetic crude. Their assertions have been disputed by the reports of a joint oil industry-government research panel that concluded that natural causes — and not mining — were responsible for the high levels of various metals in the sub-Arctic Athabasca River.

But now a new study in the journal Proceedings of the National Academy of Sciences is backing the position of the Native Canadians. Led by several University of Alberta researchers, the study found that unusual levels of lead, mercury, zinc, cadmium and other toxic pollutants were found near oil sands mining sites or downstream from them. The levels exceeded federal and provincial government guidelines.

Crude Oil Heads for First Monthly Slide Since May on Slowing Global Growth

Oil fell, headed for its first monthly decline since May, before a report forecast to show U.S. crude inventories increased to the most in a month.

Futures dropped as much as 1.7 percent, extending their decline from the highest level in a week reached on Aug. 27, after the Commerce Department said incomes rose 0.2 percent, less than the 0.3 percent estimate by economists surveyed by Bloomberg News. An Energy Department report tomorrow may show crude stockpiles gained 1.55 million barrels last week.

Oil Supply Climbing to One-Month High in Bloomberg Survey

U.S. crude oil inventories probably increased to a one-month high last week amid signs that U.S. economic growth is slowing, a Bloomberg News survey showed.

Supplies rose 1.55 million barrels, or 0.4 percent, in the seven days ended Aug. 27 from 358.3 million a week earlier, according to the median of 12 analyst estimates before an Energy Department report tomorrow. The gain would leave stockpiles at the highest level since July 23.

OPEC Oil Output Declined on Iraqi Pipeline Bombing, Bloomberg Survey Shows

The Organization of Petroleum Exporting Countries’ crude-oil output fell in August to a seven- month low, led by Iraq, where production was hobbled by a pipeline bombing, a Bloomberg News survey showed.

Production slipped 75,000 barrels, or 0.3 percent, to an average 29.15 million barrels a day, the lowest level since January, according to the survey. Output by members with quotas, all except Iraq, dropped 5,000 barrels to 26.805 million, 1.96 million above their target.

Japan Issues Storm Warnings, Cancels Okinawa Flights as Typhoon Approaches

Typhoon Kompasu slammed Japan’s southern island of Okinawa, causing the country’s two biggest airlines to cancel flights, disrupting some shipping and closing an oil refinery owned by Brazil’s Petroleo Brasileiro SA.

Ras al Khaimah seeking electricity for growth

Ras al Khaimah’s Government is in talks with the Federal Electricity and Water Authority (FEWA) to boost power supplies to the emirate as it attracts more businesses to its industrial zones and completes development projects.

Russia eyes Rosneft sale

Russia may consider selling a stake in state-controlled oil producer Rosneft in 2011 to 2013, Economy Minister Elvira Nabiullina said today.

LUKOIL to get tax breaks for Caspian oil fields

(Reuters) - Russia’s No.2 oil firm LUKOIL’s CEO said on Tuesday that the government is ready to introduce tax breaks for oil extracted from the company’s Korchagin fields on the Caspian Sea.

‘Fracking’ fractures N.Y. county

A controversial method of natural gas drilling — known as “fracking” — has begun to tap the energy-rich Marcellus Shale, a huge geological formation that underlies much of New York, Pennsylvania, Ohio and West Virginia. In New York, fracking has been stalled by opposition from environmental groups, legislators and people such as the Diehls.

Bad weather delays BP bid to recover blowout preventer

WASHINGTON (AFP) – A bid to recover a key valve that failed to prevent the blowout of the BP well in the Gulf of Mexico has been delayed because of bad weather, the pointman for the US response to the oil spill said Monday.

“We are in a hold pending calming of the current weather,” retired coast guard admiral Thad Allen told reporters, adding that it would be two or three days before the operation could begin.

No gas concerns Memphis officials (Michigan)

Two gas stations in the city but no gas to be pumped has prompted Memphis Mayor Dan Weaver to explore strategies for getting a station open to serve residents.

“I’ve been spinning my wheels talking to people trying to get us a gas station in town,” he said at a recent City Council meeting where he asked officials to consider options such as asking the city’s attorney to advise on issues such as eminent domain.

Stickers would help auto buyers compare fuel economy

DETROIT — In its first major overhaul of fuel-economy ratings in 30 years, the Environmental Protection Agency and the Department of Transportation on Monday released two proposed window stickers designed to make it easier for consumers to compare vehicles.

One version gives cars and trucks a grade from A+ to a D, compares vehicles with three sliding scales and gives an estimated annual fuel cost. The other version omits the grade. At first, only electric vehicles would rate an A+.

Toyota Prius May Lead Japan Car Sale Collapse as Subsidies End

The Prius hybrid has spearheaded sales growth for Toyota Motor Corp. in Japan for more than a year, helped by government subsidies. The model will likely bear the brunt of plunging demand as the support ends.

“A collapse in sales is unavoidable,” said Hiromi Inoue, the new-car sales chief for Tokyo Toyopet Motor Sales Co. “The daily pace of orders for the Prius is already dropping. We are bracing ourselves for the coming crisis.”

Russian billionaire Prokhorov to roll out hybrid car models in December

Russian billionaire Mikhail Prokhorov will present three electric vehicle models in December for public approval, he said on Tuesday.

“If they don’t like them, they can say ‘we don’t want these cars.’ We will hold a vote on the Internet,” said Prokhorov, an active blogger.

Prokhorov said he will decide where to produce the cars after the presentation.

The Biking Boom Breeds Discontent

Mayor Michael R. Bloomberg and other city leaders have praised the increase in cycling for reducing congestion and pollution and making the city streets safer overall. To accommodate the surge in bike commuters, the city has installed hundreds of bike racks and roughly 200 miles of new bike lanes in the past three years, with plans for future expansion.

Yet according to a recent weeklong investigative series by Tony Aiello, a reporter with New York City’s WCBS-TV (Channel 2), the cycling boom is breeding discontent. Titled “Bike Bedlam,” the segments turned a critical eye on reckless riders who flouted traffic laws, and profiled a young father who was killed by a cyclist riding the wrong way on a one-way street in Midtown Manhattan. A former bike shop owner declared that cyclists were “way out of control.”

Blowin’ in the Wind

Pattern Energy wants to do what T. Boone Pickens couldn’t: deliver Texas’ overabundance of wind power to less-windy states.

The wind and transmission line developer aims to build a $1 billion, 400-mile transmission line to carry electricity generated by Texas wind turbines to Mississippi where it could be distributed across existing lines to Georgia, Alabama, Tennessee, and other states in the South.

Red Books And Yellowcake - The Permanent Quest For Uranium

Only taking the world’s present 439 civil reactors and ignoring the 200-plus reactors called “research and military”, these civil reactors will need about 68 000 tonnes of uranium in 2010, but world mine output will be less than 55 000 tonnes. If the vaunted “Nuclear Renaissance” takes place as planned by the industry and about 200 - 225 new reactors are added in 2010-2020, world uranium fuel needs will grow to about 125 000 tonnes a year by 2020.

And You Thought Radiation Was a Problem for Nuclear Plants?

A power plant has overexposed its workers to radiation, and the Nuclear Regulatory Commission is proposing a fine. The plant, though, is not a reactor; it runs on coal.

E.P.A. Turns Down Request to Ban Lead Bullets

The Environmental Protection Agency on Friday rejected a request that it ban lead bullets, saying it does not have the legal authority to do so. The American Bird Conservancy and the Center for Biological Diversity had petitioned for the ban.

To Win, the Green Movement Needs to Understand Leverage, not Just Footprints

A few years ago I got into a heated debate about Al Gore’s Inconvenient Truth with a green-minded friend of mine. My hippy friend couldn’t stand the movie—not because of anything it said, but because of the ‘hypocrisy’ of flying around the world to preach about climate change. “Doesn’t he know this sends his carbon footprint through the roof?!” exclaimed my irate drinking buddy.

“He probably doesn’t care.” replied I. “Nor should he.”

I’ve wondered before why so much of the environmental movement is focused on individual virtue instead of collective success. Yet I’m increasingly realizing that that’s just one part of a broader issue I have with greens—we spend too much time talking about impact, and not enough talking about leverage.

Greenpeace claims to have shut down Greenland oil well

Greenpeace claims its activists have shut down a ”dangerous” oil drilling operation by a British energy company in the Arctic.

Author Simon Singh Puts Up a Fight in the War on Science

The British Chiropractic Association sued Singh, hoping to use Britain’s draconian libel laws to force him to withdraw his statements and issue an apology. Losing the case would have cost Singh both his reputation and a substantial amount of his personal wealth. Such is the state of science, where sometimes even stating simple truths (like the fact that there’s no reliable evidence chiropractic can alleviate asthma in children) can bring the wrath of the antiscience crowd. What the British chiropractors didn’t count on, however, was Singh himself. Having earned a PhD from Cambridge for his work at the Swiss particle physics lab CERN, he wasn’t about to back down from a scientific gunfight. Singh spent more than two years and well over $200,000 of his own money battling the case in court, and this past April he finally prevailed. In the process, he became a hero to those challenging the pseudoscience surrounding everything from global warming to vaccines to evolution.

Three degrees is at least one too many

It is fittingly ominous that 2010, year of the next big climate change conference, has been the hottest in recorded history. The heat rises inexorably yet the world dithers and looks away. None of the excitement that surrounded the opening stages of the climate summit at Copenhagen last year looks like materialising this November at Cancú*in Mexico.

Japan Forsees Starting Carbon-Emissions Trading in 2013, Panel Reports

Japan plans to start emissions trading in 2013, as the government revived a climate-protection draft law that was scrapped earlier this year when then Prime Minister Yukio Hatoyama resigned.

Cap-and-Trade Is Beginning to Raise Some Concerns

Critics have warned for years that this form of offsetting would encourage profiteering, with little or no value in efforts to curb climate change.

More recently, opponents of offsetting have likened the system to the kind of financial engineering on Wall Street that helped precipitate the recent banking crisis.

Review Finds Flaws in U.N. Climate Panel Structure

UNITED NATIONS — The United Nations needs to revise the way it manages its assessments of climate change, with the scientists involved more open to alternative views, more transparent about possible conflicts of interest and more careful to avoid making policy prescriptions, an independent review panel said Monday.

The review panel also recommended that the senior officials involved in producing the periodic assessments serve in their voluntary positions for only one report — a statement interpreted to suggest that the current chairman of the climate panel, Rajendra K. Pachauri, step down.

Virginia Case Against Climate Researcher Is Rejected

RICHMOND, Va. (AP) — The state attorney general has failed to back up accusations that a former University of Virginia climate change researcher defrauded state taxpayers in obtaining government grants, a judge ruled Monday.

Climate Change and the Wealth of Nations

Professor Kahn isn’t skeptical about global warming, but he is (quite reasonably) skeptical about our ability individually and collectively to reduce carbon emissions: “attempts to reduce or reverse our carbon output — to mitigate the damage that we’ve already done — aren’t going so well” and “evidence shows that very few individuals have cut back on their carbon-producing activities at all.” Consequently, he predicts, “the world is going to get hotter.”

But while this would lead many people to doomsday scenarios, Professor Kahn is an optimist who believes “that we will save ourselves by adapting to our ever-changing circumstances.” He says this salvation will come from “a multitude of self-interested people armed only with their wits and access to capital markets.” In short, the same economic system that led to global warming will rescue us from it.

Climate ‘sceptic’ Bjørn Lomborg now believes global warming is one of world’s greatest threats

One of the world’s most prominent climate change sceptics has called for a $100bn fund to fight the effects of global warning, after rethinking his views on the severity of the threat.

Atlantic Rising: sea level rise threatens the Orinoco Delta in Venezuela

Rising sea levels are forcing the migration of indigenous peoples and threatening the freshwater ecosystem of catfish and piranha found in the Orinoco Delta near the coast of Venezuela.

Arctic ice: Less than meets the eye

Barber, an environmental scientist at the University of Manitoba in Winnipeg, Canada, went to sleep one night at midnight, just before the ship was due to reach a region of very thick sea ice. The Amundsen is only capable of breaking solid ice about a metre thick, so according to the ice forecasts for ships, the region should have been impassable.

Yet when Barber woke up early the next morning, the ship was still cruising along almost as fast as usual. Either someone had made a mistake and the ship was headed for catastrophe, or there was something very wrong with the ice, he thought, as he rushed to the bridge in his pyjamas.

Where can I find up-to-date rigorous peak oil projections?

This is a letter I received from a reader (with the name changed). Below the fold is an expanded version of my answer to him. I would be interested in what other people’s thoughts are on this subject as well.

Hello,

My name is John Smith. I have been following the peak oil situation since about 2005. A few years back I thought I had a handle on what I could expect from peak oil. Then, the recession hit, and changed (delayed) everything.

My problem is, I have not seen an rigorous peak oil studies/projections that take recent events into account on peak oil projections going forward. As an expert on the subject, could you please point me to some literature that would be of help?

I do not know what the future holds, but it is clear to me that realities have changed, and with it, the timeline of peak oil.

Regards,
John

Dear John,

Curve fitting techniques including Hubbert Linearization, and forecasts based on amounts of reserves and dates of discovery, can be useful tools but, unfortunately, they provide only rough estimates. Now that we are so close to the peak oil date, the deficiencies of these techniques become more of a problem, because a difference of 5 or 10 years in peak date becomes more of an issue.

One thing that these techniques do not tell us is how much oil is really economic. In a way, this is equivalent to saying that these techniques do not tell us how much oil has a high enough Energy Return on Energy Invested (EROEI) that it really can be recovered and sold at a price that customers can afford. We are only now learning what this price might be. A rough estimate is that if the prices are above about $85 a barrel, they will send the economy into recession. It may be that in some places, enhanced oil recovery can be economically used, while in other places it is too expensive, and reserves should be adjusted accordingly.

Another problem with this type of technique is that these techniques were developed in a period when the world economy was growing rapidly, and it was reasonable to assume that the world economy would continue to grow rapidly. Thus, it seemed reasonable to assume that as much oil as could be produced, would be produced. But once oil production starts hitting economic limits, it sends the economy into a downward spiral. Instead of inadequate supply, what one gets is inadequate demand, because the value that the oil can produce is too low to provide consumers enough benefit that they can afford to buy high priced oil, plus all of the other goods they need to sustain their lifestyles. It is not clear that these techniques model inadequate demand as well.

It seems to me that what one really needs is models which consider both geological factors and economic factors, but at this point, I don’t think we really have good models of this type. It is not just recession that is an issue, either. For example, if a country’s tax rate on oil companies goes up, I would expect oil production to go down. It may be higher tax rates on oil companies that bring us down off the current peak oil plateau-not geological constraints.

It would probably also be helpful to adjust the models to reflect improvements in technology. If a better method is developed for extracting very heavy oil, for example, extraction of some such oil may become economic, when it has not been in the past.

Recent Forecasts

We published one recent post showing peak oil projections, but which did not look at economic issues. This was Steve Mohr’s thesis. He used several techniques which give a range of peak oil dates from 2005 to 2019. Regarding OPEC Oil Production, in his thesis paper itself, he says, “OPEC oil production peaks broadly in line with literature peak dates which range from 2008 to 2042.” All of these are very broad ranges.

Another recent estimate of peak oil dates is Forecasting World Crude Oil Production Using Multicyclic Hubbert Model by Ibrahim Sami Nashawi, Adel Malallah, and Mohammed Al-Bisharah of Kuwait University, published in March 2010. This model estimates a peak date of 2014. It was discussed a bit in Drumbeat. It also does not consider economic issues.

Jean LaHerrere and Jean Luc Wingert published an analysis in October 2008 called Forecast of liquids production assuming strong economic constraints. It develops a peak date range of 2012 to 2027. It concludes:

Since 2001 we in ASPO France have claimed that future oil production will be a bumpy plateau with chaotic oil price, but we did not plot any curve, only saying that the smooth peak model (below-ground constraint only) with the estimated ultimate could be disturbed by above-ground constraints. The strong financial crisis the world is now facing will of course have some impact on the world economical situation and oil consumption. Is the financial system going to collapse or not and how quickly is it going to recover? We do not try to answer these questions but imagined two crisis models. Reality will probably be none of the two but we can see that with these simple scenarios, the possible oil peak dates vary below 90 Mb/d from 2012 to 2027 with the same ultimate of 3 Tb. The tensions on oil production will be realised for some years, the risk would be to forget the necessary efforts that have to be made to increase our energy efficiency.

Colin Campbell used to publish forecasts of world oil production, but retired from this after ASPO Ireland’s Newsletter 100 in April 2009. In the final newsletter, this forecast was shown:

Dr. Campbell’s forecasts did not particularly take into account economic conditions, as far as I know. He expected oil production to decline after 2008.

There have also been a number of forecasts based on analyses of oil megaprojects, by Chris Skrebowski and by “ace” (Tony Eriksen) and by Sam Foucher. These studies are fairly different from the general modeling done by others, mentioned above, in that they look specifically at large known projects, and when they are expected to be online, and compare these to expected losses in oil production due to natural declines in oil production. They require keeping abreast of a large amount of detail data, and even then a considerable amount of judgment is required: If capacity of a given amount will be added, how much will really be produced, and for how long? How much impact will infill drilling and enhanced oil recovery have? The most recent projection of this type that we published was by “ace”. It was published in November 2009, and showed oil production declining production after that date.

Information on Connection between Oil Production and Recession

If you want to read more about the connection between oil prices and recession, one possibility is Jeff Rubin’s book, “Why Your World is about to get a Whole Lot Smaller.” I have also written about the issue, for example, in this post and this post and this post.

We will continue to run posts forecasting future oil production, using modeling techniques, as they become available.

Thanks for asking.

Sincerely,

Gail Tverberg, Editor
The Oil Drum

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