Drumbeat: November 20, 2022

Peak Oil Files: Why Is Saudi Aramco Building Supercomputers?

The biannual list of the world’s 500 fastest computers was released on Tuesday and Aramco had two new entries at No. 119 and No. 134. Both are Dell clusters, running Intel processors and both are very, very fast.

The oil industry uses Concorde-jet speed computing to aid it understanding underground reservoirs and to look for new sources of oil and gas. Aramco used another computer cluster to build a “full field model” of the Safaniya oilfield in 2008.

Clearly, Aramco is taking a sophisticated approach to understanding its remaining oil resources. And peak oilers will likely argue that Aramco’s interest in teraflops is a sign that it needs all the help it can get to ensure oil keep flowing out of its once mighty fields. After all, why bother throwing so much muscle into understanding the reservoir if there were no worries about its future performance.

IEA provides a rosy supply of crude

The International Energy Association (IEA) released its World Energy Outlook to controversy on Nov. 10. The U.K.-based Guardian newspaper quotes IEA sources admitting the agency’s figures for future oil production were inflated because of U.S. pressure. The two separate sources within the IEA want to remain anonymous because they feared reprisals. Now why does this matter?

Put simply, future oil shortages are being downplayed. In 2005, the IEA predicted daily oil production would rise to 120 million barrels by 2030. But harsh criticism forced the agency to cut this estimate a number of times until finally, in 2008, the IEA claimed the world oil production would be 105 million barrels a day by 2030.

Crude prices follow world markets downward: Still, with oil near $80 per barrel, consumers are starting to feel the pinch

NEW YORK - A global sell-off on equity markets dragged down crude prices by nearly 3 percent Thursday, the first decline this week.

…”Bottom line, the race is on; between falling demand and falling production,” analyst Stephen Schork said. “Regardless of the outcome, one result is almost guaranteed … the consumer will lose. And, given that consumer spending is responsible for more than two-thirds of the U.S. economy, that does not bode well for the strength of the incipient recovery.”

Macquarie Says Crude Oil May Fall to About $60 Next Quarter

(Bloomberg) — Crude oil prices may fall to about $60 a barrel in this and next quarter on weak demand from developed countries and growing inventories, Macquarie’s oil economist Jan Stuart said today.

Analysts Split on Direction of Crude Oil Prices, Survey Shows

(Bloomberg) — Analysts surveyed by Bloomberg News were split over whether crude oil prices will fall or be little changed next week amid a weak dollar and ample fuel supplies.

Ten of 27 analysts, or 37 percent, said futures will drop through Nov. 27. Ten more respondents predicted that oil will be little changed. Seven said futures will rise. Last week, 50 percent of those surveyed said prices would fall.

“I think we’re still in a very well-defined trading range when it comes to oil,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Oil just can’t stay above $80 a barrel, but by the same token it can’t seem to stay below $77.”

Russia Waives Ukraine Gas Fine, Easing Threat of Supply Cuts

(Bloomberg) — Russia agreed to waive fines on Ukraine for consuming less gas than contracted and said it would renegotiate volumes for next year, easing a threat to shipments of the fuel to Europe.

“We made a decision not to impose penalties, and I want to confirm it in public,” Russian Prime Minister Vladimir Putin said at a meeting with his Ukrainian counterpart Yulia Timoshenko yesterday in Yalta, Ukraine. “Despite agreements reached earlier on volumes, to avoid sanctions next year it was decided that OAO Gazprom and NAK Naftogaz Ukrainy will agree on new volumes.”

Russian transit gas via Ukraine down 26.4%

Transit of Russian gas via Ukraine to Europe fell by 26.4% 74.5 billion cubic metres in the January to October 2009 period from 101.2 Bcm in the same period in 2008, Ukraine’s Fuel and Energy Ministry said today.

European countries have cut energy consumption as industrial activity has fallen due to a global economic slowdown.

Obama administration pauses on Alaska drilling

WASHINGTON – The Obama administration has delayed a decision on a request by Shell Oil Co. to drill for oil and gas in Alaska’s rugged Chukchi Sea. The delay came after the oil company asked for time to respond to criticism of its plan to drill in the icy sea, a prime habitat for threatened polar bears.

Marvin Odum, president of Shell Oil Co., the U.S. unit of Royal Dutch Shell, denied Thursday that the oil company had requested the delay.

But a letter from the Minerals Management Service, an arm of the Interior Department, says Shell asked for a chance to respond to a deluge of public comments submitted to the agency about the proposal to drill off Alaska’s Northwest coast.

Kazakh Credit Risk Drops Most in World as Oil Revives Economy

(Bloomberg) — Kazakhstan is regaining bond investor confidence faster than any other country as rising oil prices spur an economic rebound.

Angola sees boost in oil money

Angola’s oil revenues from taxes and fees charged to oil companies operating in the African nation are expected to rise to $16.6 billion in 2010 from $15.7 billion this year, according to the country’s draft budget plan.

Angola, which rivals Nigeria as Africa’s biggest oil producer, has calculated the oil revenues based on an average oil price of $58 dollars per barrel for 2010.

Angola: Senator Lugar Hails New Chapter in U.S.-Angolan Relations

Lugar noted that Angola is an important trading partner for the United States, primarily because of its oil and gas. He said Angola has now eclipsed Nigeria as the largest oil and gas producer in Africa. “Angola has demonstrated the vitality of its petroleum industries, which operate on the cutting edge of technology in deep-water oil fields off coast. On the strength of this oil extraction, Angola has maintained an average GDP growth of more than 14 percent per year since 2002. Nonetheless,” he said, “Angola remains near the bottom of the U.N.’s Human Development Index,” which tracks the economic well-being of a country’s population.

He cited estimates that Angola may be within five to 10 years of reaching peak oil production and, therefore, he stressed the need for diversifying the country’s economy in the long term, to establish alternative sources of income. Angola’s success in diversifying its economy, he said, will depend on “expanding the important progress already made towards deepening democratic governance, improving public transparency, creating a business environment that is unambiguous in its law and its practice.”

Housing bust halts growing suburbs

The recession and housing collapse have halted four decades of double-digit growth for nearly half of the nation’s biggest rapidly expanding suburbs.

Twenty-four of the 53 cities of 100,000 or more that grew by at least 10% every decade since 1970 lost population in the last two years.

Cargill warns on self-sufficiency

The drive towards self-sufficiency in response to last year’s food crisis will fail, a top executive at Cargill has warned, adding that the idea that countries “can be self-sufficient in every single food is a nonsense”.

The warning by the world’s largest trader of agricultural commodities comes ahead of next Monday’s UN World Summit on Food Security in Rome, the first since 2002. The summit was prompted by the surge in the price of staples such as rice and wheat, which last year hit record highs, sparking food riots in countries from Bangladesh to Haiti.

LCC threats: The Environment, fuel prices, aircraft financing and fees & taxes

Inevitably, fuel prices are critical to the shape of the industry. For the lower cost carriers, fuel constitutes a higher proportion of costs and LCCs are consequently more sensitive to substantial input price increases. As jet fuel prices went through USD170 a barrel last year and rising, many LCCs were becoming seriously compromised. Peak oil promises to threaten the basic model again, as economies recover.

Even at today’s depressed levels of economic activity, oil prices are hovering around USD70, partly on speculation, partly due to production and refining issues. Once prices rise above these levels, there is a steep reduction in the value proposition of LCCs vs full service airlines.

Gold Investing Expert: Bob Moriarty Goes on Record Part II

Peak oil is real and the only thing preventing $200 a barrel oil right now is a recession that is morphing into a depression. Energy of all sorts is good.

Food is an analog of energy so agriculture is good.

Uranium is the only reasonable replacement for oil but we have waited for too long to recognize peak oil and we are going to pay for that error of judgment.

Chris Nelder, logi Energy-China: The Vampire Squid of Commodities, Part One

In his presentation on China’s oil and gas balance, Michael Rodgers of PFC Energy made one thing abundantly clear: China’s domestic oil production has nearly peaked, while its demand for oil is only going up.

CBI boss’s memo to Gordon Brown: when you’re in a fiscal hole, stop digging

While sanguine about the possibility that the world has passed the point of peak oil, Lambert says the CBI is concerned that action will be needed to prevent energy shortages by 2016-17. “It won’t happen because people can see it coming.”

Even in a season of apocalyptic films, these facts are really, really scary

In Collapse, Ruppert connects the dots between peak oil, essential human services, alternate energy sources, agricultural production, governments, money interests and strategies for survival. All power points from his recent book, A Presidential Energy Policy, Ruppert delivers them in a plain-spoken vocabulary peppered with imaginative analogies. But this is not merely an activist doc intended to support Ruppert’s treatise. Smith gives us something much more: a subtle portrait of a man whose sense of duty has affected his personal life.

Water and Energy Crisis Looms on Horizon

Ocean Energy Institute founder and energy investment banker Matthew Simmons gave an hour-long keynote address at the Island Institute’s 2009 Sustainable Island Living conference on Saturday morning at the Strand Theatre in Rockland. Simmons titled his talk “The Gulf of Maine: What Lies Beyond the Fossil Fuel Horizon,” but his presentation ranged far outside the Gulf to encompass the globe.

Sporting a delicate windmill as a lapel pin, Simmons started off by reflecting on the concept of sustainability, a current buzzword among energy development experts. “More and more people around the world are beginning to wonder, “Does the globe have a sustainable strategy?’” Simmons said. “It’s all about sustainability. Sustainability means protecting or improving our living standards. And without abundant water and energy, we are not sustainable,” he said. “There’s no question that our oceans are energy’s last frontier.”

Who cares about peak oil when you have corn cobs?

The nation’s biggest ethanol firm says costs for corn-cob biofuel are coming down. But what happens to the soil?

SAfrica plans new nuclear power station by 2020

PRETORIA (Reuters) - South Africa, plagued by chronic power shortages, plans to have the country’s new nuclear power plant up and running by 2020, Energy Minister Dipuo Peters told a nuclear conference on Friday.

State-owned power utility Eskom, which operates Africa’s sole nuclear power plant with a total capacity of 1,800 MW, cancelled plans to build a new facility at the end of last year, citing financial constraints.

Doubts raised on nuclear industry viability

(PhysOrg.com) — The investment in nuclear power has been growing around the world over the last few years, being viewed as a means for countries to control their energy security, avoid the price fluctuations of other energy sources, and reduce their carbon dioxide emissions, but concerns are now being raised.

A scientist from the Swiss Federal Institute of Technology predicts that supplies of uranium are running out and countries relying on imports of uranium may face shortages by 2013, while a New York Times journalist suggests new nuclear power plants are an “abysmal” investment that will never pay for itself without government financial support.

BP Invests $3 Billion in Alternative Energy Globally

(Bloomberg) — BP Plc, Europe’s second-biggest oil company, has invested $3 billion in alternative energy globally and is on course to meet its commitment made in 2005 to spend $8 billion, said a company official.

London-based BP will focus mainly on wind power projects in the U.S., solar in India and China and biomass in Brazil, BP China President Chen Liming said at a Beijing conference today.

Beijing to Boost Alternative Energy, Electric Cars

(Bloomberg) — Beijing plans to build a 70 megawatt solar power plant and a 50 megawatt biomass power plant as part of the city’s focus on expanding the use of alternative energy, the capital’s Development and Reform Commission said today.

The government will also develop wind power, nuclear power and geothermal power, according to a statement by the commission issued before a news briefing.

China May Lead Mergers in Asia Clean Energy, Stanchart Says

(Bloomberg) — Asia’s renewable business led by China may see mergers and acquisitions because of overcapacity, declining raw material prices and multiple players, an official from Standard Chartered Plc said.

“There will be consolidation in the wind and solar sector in the near future, predominantly in China,” said Brad Sterley, director, renewable energy and environmental finance. “The renewable energy market is very fragmented in the manufacturing sector.”

China May Increase Wind Turbine Exports, Morgan Stanley Says

(Bloomberg) — China may increase wind turbine sales to the U.S. and Europe because of lower domestic demand and an overcapacity in manufacturing, threatening global makers, an official at Morgan Stanley said.

Power grid constraints in China may leave as much as 4 gigawatts of wind power generation capacity lying idle, slowing further additions in producing electricity from wind, said Sunil Gupta, managing director for Asia and head of clean energy at Morgan Stanley in Singapore. As much as 40 percent of China’s wind power generating capacity may be unutilized, he said.

Md. regulators approve Garret County wind farm

BALTIMORE – The Maryland Public Service Commission has approved an application to build a 50-megawatt wind energy farm atop Backbone Mountain near Oakland in Garrett County.

Geothermal Needs Support: Industry

Indonesia needs to relax its laws to make it easier to explore for geothermal energy in protected forests if it is going to meet a target of lifting electricity demand from renewables, an industry official says.

Cabinet approves solar power programme

NEW DELHI (Reuters) – India’s cabinet on Thursday approved its first solar power plan, pledging to boost output from near zero to 20 gigawatts (GW) by 2020 as part of its plan to fight global warming.

Shun beef to stop climate change, says India

NEW DELHI (AFP) – India, a stronghold of vegetarianism where the cow is a sacred animal for the majority Hindu population, has urged the rest of the world to give up eating beef to help reduce global warming.

“The single most important cause of (carbon) emissions is eating beef,” Environment Minister Jairam Ramesh said during a speech on Thursday, his office told AFP.

Sex, food, and climate change

Roughly two centuries ago, British thinker Thomas Malthus famously predicted that human overpopulation would result in food shortages and mass famine. “The power of population is indefinitely greater than the power in the earth to produce subsistence for man,” he said. For a long time, his idea that mass famine would overtake humanity was rejected out of hand by those who pointed to industrial agriculture and vastly increased crop yields. Industrial agriculture proved him wrong, or so the textbooks said.

Malthus’s ideas are now back in vogue as global food futures are uncertain, due to a devastating combination of fresh water depletion; drought caused by climate change; the collapse of the world’s oceans; an increase in fuel prices (as global oil supplies peak); soil erosion caused by excessive pesticide use; and the replacement of agricultural lands by biofuel crops.

NY AG: AES Corp. agrees to pollution disclosures

NEW YORK – AES Corp., which operates several coal-fired power plants in the U.S., has agreed to put more information about global warming in its public financial disclosures.

New York Attorney General Andrew Cuomo said Thursday that AES, based in Arlington, Va., is the latest power company to agree to give investors more information about pollution.

Energy leaders back climate change deal

GENEVA (AFP) – Energy industry leaders on Thursday called for an international deal on climate change to tackle financial uncertainty and prevent potentially catastrophic global warming.

“The climate framework is the top long term issue,” World Energy Council (WEC) Secretary General Christoph Frei told a UN conference on energy security.

Harvard Finds Kidney Stones, Malaria Among Global-Warming Risks

(Bloomberg) — Kidney stones, malaria, Lyme disease, depression and respiratory illness all may increase with global warming, researchers at Harvard Medical School said.

Climate change from the burning of fossil fuels will add to risks to public health, said Paul Epstein, associate director of Harvard’s Center for Health and the Global Environment in Boston. The center and groups led by the American Medical Association are presenting data at a briefing today in Washington as a call for action to curb emissions.

Scientists baffled by global warming’s time-out

Temperatures haven’t risen this decade, as climatologists expected. Is it sunspots? Ocean currents? Secret volcano?

Melting sea ice dilutes water, endangers sea life

HONG KONG (Reuters) – Melting of the Arctic sea ice due to global warming is diluting surface waters and this is endangering some species of shellfish which need minerals in the water to form their shells and skeletons, scientists have found.

In a paper published in Science, they warned that this has serious implications for ecosystems in the Arctic.