Energy security is complicated, and multi-dimensional. It goes beyond over-simplified notions of energy self-sufficiency or energy independence. It’s about where our energy comes from and its the cost, reliability, sustainability, and scale of our energy use. Technical, economic, geopolitical and other factors all play a role, and one needs to understand how they interact. Energy security is not just a matter of energy; it’s about how energy affects national security.
The following contains portions of a podcast produced by The EnergyXchange One can access the audio and/or the transcript of the entire conversation between myself, Guy Caruso, Charles Ebinger, and Jan Mueller at energyx.org. The discussion below also relies on analysis discussed in “Energy, Economic Growth, and Geopolitical Futures” (MIT Press, 2015) by Stacy Closson and myself. The argument below represents my interpretation of these two works and does not purport to represent the views of anyone else.
A common sense definition of energy security would be access to energy supplies on a timely, affordable, and sustainable basis. It would also include the ability to respond to emergencies or disruptions, whether they be political or natural causes, in sustaining the ability to respond to energy shortages in whatever form they may occur. This qualitative perspective might be called a resilience-based definition of energy security, focusing on the short term. To think about the long-term and to try to measure energy security quantitatively we could define energy security for a country as energy exports (in volume terms) less energy imports, divided by energy demand. This gives us a simple ratio that goes up or down depending on domestic production and domestic demand for energy. This ratio was getting much worse for the United States for several decades until a sharp turnaround in the last 5 years, suggesting an improvement in US energy security.
A somewhat different and perhaps better definition is net nominal imports over nominal GDP. The first quantitative definition use energy volumes (in BTUs, for example). The second uses nominal dollar figures so prices are part of the picture too. Under the second definition, even if the volume of energy imports falls, sharply rising prices of those imports could damage our overall economy and our perception of energy security.
Either or both of these measures can be calculated for all countries. My work uses a quantitative model to project these ratios into the future based on alternative assumptions about energy supply and demand, GDP growth, and other factors. Energy security of one country depends not just on these simple ratios, but also on the energy security of other countries. Even if US energy security increases in the future because of the fracking revolution, the overall US security situation could deteriorate if other countries find themselves in what they perceive as dangerously insecure positions.
In Energy, Economic Growth, and Geopolitical Futures we worked through eight scenarios with different plausible assumptions about energy demand and supply and economic growth for 182 countries for forty years. The scenarios were formulated with the help of our colleagues and students at the University of Kentucky and a group of outside advisers. The quantitative results were developed with the aid of the International Futures Model, created and maintained by Dr. Barry Hughes at the University of Denver.
Our starting premise was that more US and global energy production would lead to lower energy prices, less pricing power by OPEC, and less vulnerability to shipping choke points. It should lead to enhanced US energy security by any of the definitions offered above. This is a nice scenario from the US point of view and in some of our scenarios enhanced US energy production really does lead to improvements in US energy security. But these scenarios assume that energy production is growing everywhere, and GDP growth is strong everywhere—or almost everywhere.
In one benign scenario, China’s economic growth remains high and the country is assumed to boost energy production and energy efficiency strongly. We also assumed that geopolitics are also moving in a benign direction and China becomes—in Robert Zoellick’s term—a responsible stakeholder.
Changing the assumptions about China’s energy production and political orientation, however, could drastically affect the US position. In another scenario we assume Chinese GDP growth is not strong, its energy production and energy efficiency do not grow, and it becomes an aggressive revanchist state rather than a responsible stakeholder. It becomes more and more nervous about its dependence on long energy supply lines from the Persian Gulf and Siberia. We also assumed in this scenario that as the US becomes more energy self-sufficient it disengages to a certain extent from the rest of the world, militarily and politically.
In one scenario, China attacks Russia to seize eastern Siberian oil and gas fields and pipelines. In another, it seizes all of the contested islands in the East and South China seas and establishes military hegemony over the entire region. If force is used to allocate global energy rather than the market everyone’s energy security is affected. Even if the United States remains uninvolved in this fighting, its energy security could be damaged by higher global energy prices and increased uncertainty about cross-border energy flows.
In another scenario, improvements in US and global energy production lead to low global prices and lower energy imports but a reduced level of security because of growing turmoil in the Middle East. In this scenario, the US gradually reduces its presence and influence in the Middle East. Iran, reeling from low oil prices, senses an opportunity. The mullahs demand that the U.S. military withdraw its already depleted forces from the region, that Saudi Arabia and the other Gulf states curtail their oil production, and that all ships passing through the Strait of Hormuz pay high transit fees to Tehran. The United States and Israel are encouraged by the Saudis to fight, but half the American fleet is incapacitated in the first attempt to force the Strait and the fleet quits the fight altogether after Tel Aviv and Haifa are obliterated in separate nuclear attacks. Iran becomes the regional hegemon. It alone now sets the OPEC production quotas, enforcing its decisions with the threat of military force. US energy producers are delighted—the prices they can charge are higher than otherwise—but the US economy suffers.
Both my podcast colleagues and Energy, Economic Growth, and Geopolitical Futures worried about the effect of the response to the threat of climate change on energy security. Charles Ebinger stated that ”if the commitments coming out of the Paris talks are real it means that we are going to see a dramatic move over time … away from fossil fuels”. Unless there is a surprising amount of technological change in the production of renewable fuels it is hard to see how this politically-mandated retreat from fossil fuels will not reduce energy security.
We constructed an IPCC scenario in our book. We assumed a consensus is reached, at least among the OECD countries, that the fossil-fuel driven economy is environmentally unsustainable and that much higher fuel taxes are the way to proceed even if it means lower economic growth. Most of the rest of the world declines to follow the OECD example. Rapid increases in the automobile fleets in China and elsewhere, and continuing construction of new coal-fired power plants lead to increased greenhouse gas emissions. Eventually, however, pressure from the West, a growing public awareness of the dangers from climate change, and a series of environmental disasters lead to a growing global willingness to act. This is a benign scenario in the sense that all, or most, countries, over time, peacefully, comply with the climate change mandates. There is a substantial rise in transfer payments from the OECD to the poorer nations, but economic growth is lower everywhere, and the trend toward income convergence between the OECD and the rest—a trend in evidence since the late 20th century—stops. Only a very small reduction in global temperature is noted by 2050 (the last year simulated in our exercise), but larger effects are expected toward the end of the century.
One could say that this IPCC scenario, given all the assumptions about political accord, enhances US and global energy security in the long run. I personally wonder if the economic losses and the short-term disruption are worth it, given the risk. I am skeptical of the catastrophic anthropogenic climate change predicted by the IPCC computer models. My opinion is based on my years of experience working with large scale models. The IPCC models are not validated in any meaningful sense. They cannot predict the recent past without significant a-theoretical add factors. They have not forecast the near future for 1995 to 2015 at all well. They have never even attempted to explain the vast changes in climate over the past 500 or 1000 years. My views on the modeling issue, I think, are similar to those of eminent climate scientists such as Richard Lindzen, Judith Curry, and Roger Pielke, Sr.
We put an IPCC scenario in our book because some people who helped us put it together believe in the seriousness of the risk of catastrophic anthropogenic climate change. Many people do. On the other hand, when Dr. Closson and I talk to audiences about our book and we present the scenario based on these climate assumptions and the political response to the perceived threat, the IPCC scenario is always rated the least likely of the eight we present—even less likely than the nuclear attack on Tel Aviv–because most people don’t believe the underlying assumptions are very realistic.
JC note: As with all guest posts, please keep your comments civil and relevant
Interesting post.
I have to say that the scenarios all sound like they would make interesting novel plots. None appear overly realistic. But then DoD has run war game models for decades. Don’t know if even one has ever come to pass. It’s always something else that occurs in the real world.
“No battle plan survives contact with the enemy”, Helmuth von Moltke
There can be no security for humanity as long as governments tax the public to pay scientists to deceive the public:
http://crescopublications.org/pdf/ASSOA/ASSOA-2-005.pdf
Blanket forgiveness is the quickest way now to restore security to humanity and integrity to governments.
I try not to blame dishonesty when incompetence is a better explanation.
The eco-groups are outright dishonest.
The rest of it can be cured by legislation.
1. The IPCC should be handed a BAU scenario constructed by industry experts and other professionals that is a real emissions and energy use scenario based on realistic projections. The IPCC should be required, using the scenario and information such absorption trends and empirical forcing measurements to construct an honest BAU RCP as a requirement for future US funding.
2. NOAA should be required by law to establish a climate network in pristine areas that is completely free of UHI and instrument aging contamination. They should be required to report the result from this network as the “official” US climate warming trend. Further the NCDC global land trend should be detrended by the difference between the NCDC US network and the “official” us climate network.
3. All the “global warming is bad” studies should be terminated until the basic parameters needed to model global warming, such as the various forcings are known to +/- 10%. It is pointless to fund “global warming is bad” studies when they are studying fantasy scenarios.
Future funding for “global warming is bad” studies should be required to be balanced dollar for dollar with “global warming is good” studies.
PA,
As I understand it the purpose of war gaming is to test possible (even if unlikely) scenarios in order to see how (or if) existing war plans respond.
For example, I recall in the 80’s when the US would run war games involving a Soviet thrust through Central Europe. One of the things they discovered (and were rather surprised by) was how quickly it escalated to tactical nuclear strikes. Brigade and Battalion commanders, faced with being overrun, started asking for release of tactical nukes like they were free condoms at a progressive HS.
A Soviet thrust through Iran was a regular war model exercise. The Ayatollah, Iran-Iraq War, Al Qiada, Syrian civil war, Arab Spring, all came as surprises, while the Russians are still on their side of the border.
Australia’s greatest security risk is energy security. We have very little oil resources and negligible storage (about 3 weeks supply). If China or anyone else places a few submarines alone the shipping lanes that transport our oil to Australia we would be totally vulnerable – no defence whatsoever, no transport of petroleum products and therefore no restocking of food stores. When the car’s tank is empty and the buses and trains have no fuel most of Australia’s population would die within a few months. The government would have to cave in to who ever wants to invade us.
See ‘Consumption and Production of Petroleum from the Australian Mainland 1968-1990’ Occasional Paper #7 of the Department of Geography/School of General Studies of the Australian National University, June, 1968.
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Kim,
What point does it make? (you didn’t provide a link). There are recent reports on this security risk.
from p. 30:
“Autarchy in petroleum supplies(except for offshore oil) is not possible in Australia. Either synthetic fuels or competing energy sources must be found for transportation, or vast storage facilities must be built underground, or the government must avoid war at any cost. None of these alternatives are palatable….they will continue to be ignored until the cloud becomes somewhat larger than a man’s hand.”
==================
Thank Kim.
Australia is really well positioned with a little planning.
The biggest problems with making synthetic fuel are cheap energy and a supply of CO2. A power plant sited almost on top of a coal mine supplies both.
Coal plants during off peak can make synthetic fuel. The coal plant exhaust provides concentrated CO2 that can be converted to synthetic fuel with generated power.
Australia has the motivation to take the lead in developing a truly useful technology.
If the underground geology is correct the CO2 could be stored underground for later off peak processing. CCS the way it should be done, carbon capture followed by carbon release.
PA,
That complete and utter nonsense. It’s the equivalent of the sort of nonsense sprouted continually by AK and others.
Tell me the cost of fuel from your thought-bubble, the assumptions inputs and sources for them.
I don’t waste my time throwing pearls in front of you, Peter.
I’m sure most older, stick-in-the-mud, employees of Ma Bell would have regarded our current cell-phone technology as “complete and utter nonsense.”
This is so for transport – and Oz is a *huge* continent. Transport is so critical that lack of it is calamitous. Even a few days strike by petrol tanker drivers brings Sydney down on its’ knees
But electrical power through coal-fired stations is not nearly as greatly at risk, although lack of diesel fuel will quickly enough close mines and prevent line maintenance
ianl8888
It’s worse than that. A lack of diesel and petrol fuel will quickly stop the vast majority of people getting to work. No food, No water, Then we die.
http://oilprice.com/Energy/Crude-Oil/It-is-Possible-to-Replace-Crude-Oil-with-Synthetic-Oil.html
Well, they say $60 to $100 per barrel for synfuel – which means $ 100 per barrel. You just need a carbon source (CO2 or Coal) and a hydrogen source.
The actually cost depends on the cost of power and the cost of feedstocks, although most of the cost is the plant.
Don’t think Fischer-Tropsch is the way to go. There has to be a way with less plant costs to make fuel. High plant costs make it a “use it or lose it” situation. You can’t just get set up for a rainy day.
So there you go. After we run out of real fuel, then run out of fracked fuel, synfuel will start to make sense.
Given the Navy’s “fuel from seawater” program, synfuel costs about 4 times what real fuel costs.
More baseless nonsense. Provide the basis of estimate, assumptions, inputs and sources.
What’s happening to me ! Suddenly I can understand kim.
Peter Lang | March 3, 2016 at 11:47 pm |
More baseless nonsense. Provide the basis of estimate, assumptions, inputs and sources.
https://news.vice.com/article/sorry-everyone-making-fuel-out-of-seawater-isnt-gonna-save-humanity
The estimate for doing this on a nuclear aircraft carrier was about $6 per gallon. That is a little over twice the current cost of JP-4 and assumes you have an ocean and a nuclear reactor handy. If you look at the estimates they require an ungodly amount of sea water – but that is just to get CO2.
You can use another carbon source (coal, stack emissions) and part of a power plant secondary coolant loop to preheat the water and cut energy requirements considerably, which is needed because you don’t have a free nuclear reactor.
Since the process as described just takes energy and catalysts, it depends on how cheap the energy and how efficient/cheap the catalysts.
Synfuel is made from reacting syngas (CO and hydrogen). Since the Germans ran much of their war machine on it, clearly it is possible on an industrial scale and we are arguing about price points.
It isn’t hard to crack water into hydrogen with a nuclear reactor. The Japanese proved that 3 times and they weren’t doing it deliberately.
http://www.udel.edu/udaily/2013/jun/solar-synthetic-fuel-062013.html
Using Pepto-Bismol instead of gold as a catalyst to turn CO2 to CO cuts costs considerably.
http://www.pnnl.gov/science/highlights/highlight.asp?id=1427
A durable nickel catalyst would be pretty cheap.
They are clearly developing non-precious metal catalysts. At that point it just is about energy costs because you can pick sites where CO2 and water are virtually free.
One reason synfuel is expensive is people want to use insane sources for CO2. A coal fired plant provides hot CO2 rich air for free. There is no reason not to burn the same carbon twice.
The main cost area seems to be producing hydrogen. Producing hydrogen from natural gas costs $2.00 per gallon. So current electrolysis methods are more expensive. It takes 3 gallons of water to make one gallon of fuel.
http://phys.org/news/2007-10-analysis-requirements-hydrogen-economy.html
electrolysis would require close to 40 kWh per kilogram of hydrogen
It takes 1.25 kg of hydrogen per gallon. At 5 ¢/kWh and 70% efficiency it costs $3.57.
http://heshydrogen.com/hydrogen-fuel-cost-vs-gasoline/
This quotes lower costs.
Bottom line – synfuel is less than 4 times the current fuel price.
PA,
You didn’t answer my question. Instead you did changed the subject synfuel from seawater, which I didn’t mention in my comments and, moreover you misrepresented the cost (cherry-picked the high end of the cost estimate as a dishonest strawman arguing tactic). These are signs of intellectual dishonesty:
https://judithcurry.com/2013/04/20/10-signs-of-intellectual-honesty/
Your avoidance of the questions suggest you cannot answer it – effectively confirming you know it is total nonsense as I said from the start.
Additionally, large coal fired power stations need another (liquid or gaseous) fossil fuel to start up.
http://web.ornl.gov/sci/scale/pubs/ldoc8915_aiche07_hydrogen_value_paper.pdf
Well, this says the cost of producing hydrogen from a nuclear plant is about half the price of production from methane.
Use of a nuclear plant/coal plant eliminates most of the facilities cost.
https://www.hydrogen.energy.gov/pdfs/12024_h2_production_cost_natural_gas.pdf
So the cost of hydrogen depending on scale and method is $1 to $5.with the $5 dollars small scale something DOE is trying to drive below $3. The cost of anhydrous ammonia which is $700/ton delivered indicates the $1 of per kilogram for volume cracking of hydrogen from water is a realistic number.
If you put a $3 subsidy on synfuel from a CO2 emissions source I’d bet volume synfuel production would start now.
$40 oil results in a $1.75 gas price in Maryland (after taxes) so the actual cost of production is in the $1.20-$1.30 range.
And there you go. Oil has to be over $110 a barrel for synfuel to make sense.
Which gets back to my previous statement than we will produce synfuel after we run out of $60-$80 fracked oil.
PA,
This is more utter nonsense. I am surprised that this is what you think is how to present an answer to the questions I gave you. There is so much wrong with all you’ve said, and the fact you don’t know how to do or present a cost analysis, means there is no point me discussing it with you.
Peter, your total ignorance is showing on this subject.
South Africa has made Oil from Coal for some time.
http://www.post-gazette.com/business/businessnews/2006/08/17/South-Africa-has-a-way-to-make-oil-from-coal/stories/200608170378
If your Oil supply is really under threat from war etc the cost becomes academic.
AC Osboren,
You are very presumptive. You haven’t a clue what I’ve done or want I know. You are ignorant of that and therefore demonstrate you ignorance by making such a presumptive comment. I know full well about waht south Africa has been doing for decades, Germany during the WWII, and the many demonstration projects Australia and other countries have been doing (including the Stuart Oil Shale Project). What you seem to not have a clue about is the cost of what PA proposed – petroleum producers from CO2 from coal fired power stations (further inflated by using off peak power so operating only during off peak times).
Demonstrate you are not ignorant yourself by providing a good costs estimate for production in Australia (with full basis of estimate so anyone can reproduce it from the data sources you used).
I’ll be waiting with bated breath. If you don’t respond I’ll assume you are ignorant and haven’t a clue what you are talking about, and furthermore do not have the intellectual integrity to retract your blatantly ignorant comment.
You don’t think an Iranian takeover of the ME is possible? What do you think they are trying to do? What did Saddam Hussein try to do? And what did OBL try to do?
As the US grows weaker, a ME takeover becomes more, not less, plausible. Regardless of the mechanism.
Not one which would succeed.
“As the US grows weaker”, Russia appears to grow stronger, the Middle East is on Russia’s doorstep not America’s and Putin has no liking whatsoever for Islamist expansionism as it is a far greater threat to Russia than any increase US oil production despite Russia being heavily dependent on petroleum sales.
Also, Russian troops don’t go into battle with a Yuman Rites lawyer in their pack, and their soldiers are not tried and locked up for murder for killing enemy terrorists on the battlefield, they are given medals.
What’s always interested me is that we took down the wall (Iraq) between Iran and Saudi Arabia just about the time we “discovered” how to get to our oil reserves. I don’t know who wins in the Middle East, though I suspect it’s nobody for a long time, but I do know that the U.S. won’t need Middle Eastern oil by sometime in the 2020s. Because of that, why not leave them to their own devices before they have nuclear devices?
I agree with timg56 about the scenarios being interesting. I found them facinating, and I want to thank Evan Hillebrand for posting his work here.
” The IPCC models are not validated in any meaningful sense. They cannot predict the recent past without significant a-theoretical add factors. They have not forecast the near future for 1995 to 2015 at all well. They have never even attempted to explain the vast changes in climate over the past 500 or 1000 years. My views on the modeling issue, I think, are similar to those of eminent climate scientists such as Richard Lindzen, Judith Curry, and Roger Pielke, Sr.”
____________________
I’m not sure what is meant by “They have not forecast the near future for 1995 to 2015 at all well.” What exactly would “well” be? Have Lindzen, Curry, and Pieke, Sr forecast “well” ?
As Webhubrubble, used to say about peek oil and how right he was?
http://www.marketwatch.com/story/why-opec-will-never-cut-production-2016-03-02
This guy is wrong too.
Well if he’s wrong on the past, then it’s almost a sure thing he’ll be wrong about his future predictions too.
Kirk Spano said:
http://i.imgur.com/krb61hV.png
http://i.imgur.com/b2LBrbE.png
Well, I hope he’s wrong, but he may not be. I’ll quote the part that caught my attention:
“Here are my reasons for OPEC’s actions. First and foremost is a question of logic. Why should the lowest-cost producers of oil subsidize the highest cost? In what we know is the beginning of the end of the oil age, it simply doesn’t make any sense to let the highest-cost producers survive when the entire oil industry is slowly gliding toward a form of long-term business run off. It is not in the interest of the low-cost producers to cut production when the market will eventually kill the high-cost producers.”
_____
Cartels, never give it up easily.
The low oil price has forced shale oil producers to find ways to produce for less. Nevertheless, a good number of the companies will go bankrupt this year and next. But the properties will change hands. The higher cost production will be shut in and US production will continue on a downward slope. The bottom line is the Saudis can’t supply the entire world with oil. The price will have to go up and as it does, US shale production will go up also, keeping the price in check.
But the possible fly in that scenario is the fact that Saudi Arabia is foregoing billions upon billions of income. They could even go bankrupt. So, even though they dearly want to shut down higher cost sources, they might not be able to take the financial pain required to do so.
It seems they would pick a price point that maximizes their income. I’m pretty sure it ain’t $35/bbl.
From the article:
…
Saudi Arabia could be bankrupt in a matter of years.
The global rout of oil prices is taking its toll on the country’s bottom line. The government has cut spending in its upcoming budget and considered selling shares in Aramco, the state-run oil company.
The kingdom’s oil minister said Tuesday that producers may meet in March on an output freeze, but that crude production will not be cut. Saudi Arabia, Russia, Qatar and Venezuela proposed last week a production freeze at January levels in response to the global glut and sustained low prices of crude.
Still, the world’s largest producer of oil appears on a crash-course for bankruptcy as early as of 2018, according to a CNBC analysis.
…
http://www.cnbc.com/2016/02/23/saudi-arabia-struggles-with-cheap-oil.html
I’m not wrong about oil. Sometimes the timing is off a bit, but haven’t been wrong ever. Called U.S. oil boom leading to “freedom from OPEC” and told folks on June 5th, 2014 oil was going to come down at least 20% and maybe much more. I’ve been early to get back into natural gas which has a much brighter future, but not wrong. The bottom in oil price has probably been reached, but expect a pullback to low $30s/b for a few weeks before ramp up to summer with oil near $50/b. Nat gas will rise come summer and then winter. The bottom on nat gas is about to be put in or just has been.
Oil age is ending. How fast? I don’t know 20-30 years on the outside, but if EVs take off in the 2020s, we could see oil use halved by the 2030s.
Max10k, Lindzen and Pielke Sr didn’t project climate. JudithsThe Stadium wave does for the NH, and so far is looking pretty good. Pause, general Arctic ice recovery, AMO turning negative, and all that.
As for your basic question about ‘good’ climate model predictions/projections, there are some qualitative tests that say they are NOT good. For example, Santer said in 2011 that it would take 17 years of ‘pause’ to show them wrong. Depending on dataset and metric (slope, statistically significant slope) it has been anywhere from 16 to 26 years of ‘pause’ meeting the Santer criterion. For example, the models produce a distinct tropical upper troposphere hotspot that both radiosondes and satellites say does not exist. For example, the CMIP5 archive produces an ECS mean of 3.2; observational energy budget studies all come in under 2.
I don’t know about your world, but in mine that is simply not good enough.
I agree we could disagree on what’s good and what’s not when it comes to opinions on forecast. If you could be more specific on why you think Judith Curry’s forecast “so far is looking pretty good,” I will tell you whether I agree.
I wasn’t aware Lindzen and Pielke Sr don’t project climate. If they don’t, have they said anything about climate that would at least suggest forecasts? I can’t imagine they would just say sorry we can’t provide anything useful, but it might get warmer, it might get colder, or it might stay the same.
risttvan, I forgot to respond to your comments about Santer and the “pause.” You didn’t say what Santer’s definition of a pause is, but whether there ever was a pause is in dispute. Are you sure you are correct about what he meant about “17 years” ?
The AMO shows no sign whatsoever that it is anything other than the same as the global mean sea surface/global mean surface temperature. So how can it diverge and go negative? Lol.
“For example, Santer said in 2011 that it would take 17 years of ‘pause’ to show them wrong. ”
Nope. he never wrote or said that.
Dark alley’s pause,
Gone paws up, it hahs.
=================
Do your own homework. I won’t do it for you. Santer et. al., Separating signal and noise…, J. Geophys. Res. 116: D22105 (2011).
Mosher’s credibility sinks further every time he makes a silly, baseless unsupported assertion
ristvan on March 3, 2016 at 7:18 pm
“Do your own homework. I won’t do it for you. Santer et. al., Separating signal and noise…, J. Geophys. Res. 116: D22105 (2011).”
__________
ristvan, thank you for the source on Santer. In this study he said “Our results show that temperature records of at least 17 years in length are required for identifying human effects on global‐mean tropospheric temperature.”
Here is your interpretation of the quote above: “For example, Santer said in 2011 that it would take 17 years of ‘pause’ to show them wrong.”
Obviously you misinterpreted Santer.
Read more than the abstract. Santer said models could deviate from reality for up to 17 years as a result of ‘noise’ (internal model variability) but not longer. The paper was stretching the BAMS 2009 estimate of 15 years. Depending on data set and definition of ‘pause’ we are now well past both criteria. It isn’t noise. The models are now shown to be wrong.
In sentences, “17 years” appears twice in paper:
…Our results show that temperature records of at least 17 years in length are required for identifying human effects on global‐mean tropospheric temperature. …
And:
…On timescales longer than 17 years, the average
trends in RSS and UAH near‐global TLT data consistently
exceed 95% of the unforced trends in the CMIP‐3 control
runs (Figure 6d), clearly indicating that the observed multidecadal
warming of the lower troposphere is too large to be
explained by model estimates of natural internal variability.
Key Points
Models run with human forcing can produce 10-year periods with little warming
S/N ratios for tropospheric temp. are ~1 for 10-yr trends, ~4 for 32-yr trends
Trends (greater than) 17 yrs are required for identifying human effects on tropospheric temp.
In the context of Santer et al.’s conclusions regarding “Trends >17 yrs are required for identifying human effects on tropospheric temp.”, they might be in store for a surprise if the cool phase of PDO (nominally of 60 year period) persists for 30 years. The model’s failure to capture the observed level of power in the periods 8-17 years and 40-70 years has biased Santer et al.’s conclusion towards the low end of the spectrum. .. – Professor Curry
So in 2011 there was a lot of talk about the cool phase of the PDO persisting for a long time into the future (not from me):
which we now know to be a warmest year in 2014 and 2015, and possibly another one in 2016.
And anybody with a brain knew there was something wrong with the satellite temperature series in the 21st century. You cannot invalidate anything with a data series that is F’d up.
The AMO is feckless, do nothing ocean cycle.
Not the point. The IPCC scenarios are supposed to be based on settled science and provide certain outcomes. Significant uncertainty is not supposed to exist. Most of the “good” correlation comes with data “corrections” AFTER a disconnect was noted. See the recent RSS satellite temperature update if you don’t know what I mean
CAGW would not be a political war if the near future climate were recognized by policy makers and shakers as uncertain.
You live by the sword, you die by the sword.
Well…
RCP8.5 predicts 460 PPM in 17 years.
Emissions increased 50% in the last 17 years and the CO2 level increased 30 PPM. Given the relatively low emissions growth expected for the next 17 years the rise will be another 30 PPM (or less).
If the models are going south already – what is half the expected CO2 increase going to do to their prediction?
The time value of long term gain vs. short term gain has been discussed by many over the years, e.g., William Nordhaus, Richard Tol. Briefly, there must be a way to compare or “weigh” the value of the short term vs. long term costs and benefits over time. Economists use discounted present value by considering all costs and all benefits and then discounting to the present or current dollars, or some other year’s dollars. The net present value depends on the “discount factor,” including escalation of costs, benefits, interest rates, etc. Simply put, the smaller the discount factor the larger the present value. This is used in determining, e.g., the Social Cost of Carbon (SCC) used in calculating alternatives for administering CO2 penalties (tax, cap and trade etc.) The criticism of the Stern report was that it used an unrealistic discount rate distorting the answer towards his desired result. Somewhat related, the Obama administration revised the government’s official SCC resulting in a significant increase in the SCC, e.g, on the order of 150%-160% from earlier determinations… to be used in its cap and trade push that never got off the ground. It’s like Mick Jagger said in the Rolling Stones song … “you can’t always get what you want …. but you can try …” (by futzing with the numbers) See: https://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf
SCC quickly increased by about 50%, not 150. This was not due to a change in discount rates, but changes in the damage models, largely due to sea level rise I think. Tol can explain all this I am sure, because his is one of the three models used.
The real problem is that economic growth plus ever increasing warming basically negates the discount rate. This allows the Econ models to go out an absurd 300 years to get the CAGW damages. (Good job they did not have such absurd models in 1716. Too bad we do.)
SCC claims to know what the world will be like for the next 300 years. Policy making based on fantasy.
David
The real problem is that somehow society has come to believe that slightly warmer temperatures and higher CO2 levels means a worsening climate.
That is not at all a reliable conclusion. In most places temperature is not the most important factor in determining whether the climate is improving or not. It may well be the weakest claim of the argument that AGW is to be avoided; yet rarely is the basic claim attacked.
The argument has always been between more energy in the system causing greater extremes and a decreased Polar/Equatorial temperature gradient causing lesser extremes of weather and climate. It amuses me that they are countervailing tendencies, but the decreased temperature gradient has a much larger percentage change in the mechanism.
Besides, increased severity of weather and climate are a marker for the change from interglacial to glacial. If we were really seeing such an increase, the danger ahead would be cooling.
So many of the basic claims are just completely backwards. Yet, so many of them are rarely challenged.
Another one is that the slight warming and tremendous greening will eventually be perceived as the tremendous net benefits that they are. Oh, how lost this whole effort to stigamatize fossil fuels has become, and why is that? Well my candidates are original urge and mistaken process.
When will they ever learn? When will they ever learn?
===============
The only person who will never learn is you.
May God rest the tormented soul who once cited Stern, then, when called on it, bless Pekka’s honest heart and mind, backed down.
And I forgave Richard Tol for however he’s sinned because he once thought the science was settled.
Warming has always been good for the biome, and humanity, and always will be. The greening would be miraculous; indeed, it is.
=======================
Compare the net present value of policies analysed by Nordhaus and Stern in the figure below; I added the red line which has 1/2 the Copenhagen participation rate, a totally unrealistic take up rate (participation rate) of high cost carbon pricing by the world.
http://anglejournal.com/site/assets/files/1727/lang_1.png
For explanation see: Why carbon pricing will not succeed http://anglejournal.com/article/2015-11-why-carbon-pricing-will-not-succeed/
The answer is “No, but…” However, except for JC, the others haven’t really been trying to forecast the future. We don’t know how well the Stadium Wave will work out, so while she can’t claim success, she certainly has not been the spectacular failure that the IPCC models have proven to be. The individual approaches of all that you name have been much more humble and – for my money – more deserving of respect because of that.
Sorry – my answer was aimed at max10k’s question.
Will you demonstrate JC’s forecast “has not been the spectacular failure that the IPCC models have proven to be” ?
This guest post raises some interesting and complex issues. For example, the national security and economic security aspects are quite different. I will have to read the book and give it some thought.
Do know one example of the moving target nature of this general issue. The Strategic Petroleum reserve set up after the 1973 oil embargo isn’t strategic. The goal was 1Bbbl, enough for 180 days at then petroleum import levels. Congress only funded 750Mbbl. The goal was ability to pump >6Mbbl/day. The reality is <4Mbbl/day. And US imports have grown with economic growth and consumption the past near 40 years. All Iran has to do is block the Strait of Hormuz (mines, shore to ship missles, fast torpedo boats), and the US (not to mention ROW) is in big trouble in ~3 months rather than 6.
SPRO has long outlived its usefulness and is (literally) a hole into which the government pours money. Economically, it subsidizes well-connected patrons of politicians. Strategically, diversity of supply wiped out the SPRO argument years ago. Existing private market reserves remain far more important than SPRO — and actually place downward pressure on prices, unlike the anachronistic SPRO.
Another wasteful government program that should have been killed while prices were high. Not that I have strong feelings about it.
The world is awash with energy. If prices are low, where do we want them to be? Of course oversupply and low returns are going to hurt producers, but how else do you put an end to cartels and rigged markets and one-trick economies and mad theocracies? I dare say the realignment will hurt a lot, but don’t we want the realignment?
Not long ago Egypt was a beggar looking at importing gas from the Israel-Cyprus finds. Now its suddenly an export player, with its own bigger Eastern-Med gas field. Who predicted that a year ago?
Big Oil/Gas needs to be just another profitable shop along the energy strip spruiking for business. De Beers might go on persuading us that its pebbles are precious, but it’s just getting too hard to pretend that fossil fuel energy is scarce. Any wonder that Big Oil contributes to Big Green to fight coal and nukes? If you were Coke, wouldn’t you join the fight to ban Pepsi?
The gas is starting to flow from the Gorgon project offshore WA, more gas to come from existing and planned projects in WA. Australia is likely to be a huge LNG gas exporter, with greater capacity than Qatar’s (though more regulated and with higher costs). Factor in CSG and black coal of the Sydney-Gunnedah Basin in the east of the continent, as well as shale gas in the north and centre (a bit remote). Then there’s all that brown coal which powers the south east but has export potential. Now, if you were S Korea or Japan, might you not think twice about tempting pipeline arrangements with that nice Mr Putin if you have an established supply of coal and gas coming by sea at a good price from a place like Australia?
The real problem is that this is likely to lead to our next “boom”, where things are so good again that we even indulge in electing Labor governments to do their spending and borrowing thing (again) till the kissing has to stop (again). But maybe we’ve learned our lesson and we’ll at least be able to run a smelter or two with all our mineral and energy riches.
Energy diversity, low prices, strict regulation for thrift and efficiency in processing and consumption…It can be like those 1970s never happened! Exxon and Gazprom and the Sheik of Araby can hang out their shingles. But they can call us this time.
mosomoso on March 3, 2016 at 2:54 pm
The world is awash with energy. If prices are low, where do we want them to be? Of course oversupply and low returns are going to hurt producers, but how else do you put an end to cartels and rigged markets and one-trick economies and mad theocracies? I dare say the realignment will hurt a lot, but don’t we want the realignment?
________
I want the price to be $100 a barrel to make fracking of new very profitable. Otherwise, the U.S. will not achieve energy independence. We will have the potential for independence, but that’s not as good.
Even better would be $125 a barrel, which would make fracking of new wells very very profitable. We may see renewed interest if the price starts moving up into the $40’s.
A broken windows man! You’re on fire today, citizen.
When something is dirt cheap you don’t need independence from the source. Those frackable fuels and tar sands aren’t going anywhere. In the meantime, head down to the bazaar and take your pick and get your best price. You get security two ways: you only buy when it’s cheap, and when it’s not cheap you can brew your own.
If you are talking about buying oil while it’s cheap to stock pile, I think that’s a good idea. I would like to see a lot of that drive the price up. Also, temporarily shutting down wells is a good idea if the producer can afford to do it. It’s stockpiling by the producer instead of the consumer, but it also can push prices up. I’m for anything that makes the price go up, and the sooner the better. Cheap oil causes bad habits.
There is a lot of energy in the universe and my long time prediction has been that man will not ultimately use all of it.
================
Your prediction is wishy washy compared to my prediction that ultimately man will be extinct and marsupial apes will rule.
max,
Previously you included the caveat that you receive royalties from oil & gas rights on your property. Knowing that makes your comments about wanting a high price understandable and reasonable.
I imagine there may be other good reasons for higher prices, but none I’d argue for.
timg56 said
“I imagine there may be other good reasons for higher prices, but none I’d argue for.”
___________
I would argue for high priced oil for the following reasons:
1. For energy independence America needs more wells, and high priced oil drives investment in new drilling, particularly where fracking is needed because it’s a costly method.
2. High priced oil discourages wasteful consumption of a precious resource and
adds to pollution.
3. High priced oil grows economies of regions that depend on exploration and production.
4. As you noted, high priced oil puts more money in my pocket because I receive royalty income from a producing well.
In my previous post in item 2, “increasing pollution” should be decreasing pollution.
Ah to hell with it, I can’t do anything right today. Just one screw-up after another.
max10k said:
The shale guys are boasting they will start back up if oil gets above $45, but I think that’s more locker room talk than reality. Granted, drilling costs have come down, and newly completed shale oil wells are performing much better than in the past. But $45?
I saw an analysis by one of the major investment banks, which I belive was pretty realistic, that put the total average cost to produce a barrel of shale oil in the United States during FYs 2011, 2012 and 2013 at about $120.
So if one accepts that as a realistic baseline, what has changed since then?
• Drilling and completion costs have come down by about 30% or 35%
• Better completion techology has led to significantly better well performance
• The borrowing cost of money for oil producers has gone way up, and liquidity may have dried up
What is the net of all this? Well I don’t know, but I believe we’re still probably talking $70 or $80 for the total average cost to produce a barrel of shale oil across the United States.
I want to give an example of just how much well performance has improved since 2012.
In April 2012, EOG completed the Whitetail #1H in the Eagle Ford shale in Atascosa, Texas.
Then, in February 2015, it completed three new offsets, the Whitetail #2H, #3H, and #4H.
Here’s a map showing the four wells on the Whitetail lease.
http://i.imgur.com/s1tDoEJ.png
And here’s a graph showing the production history of the lease.
http://i.imgur.com/nuZml73.png
And here’s a graph which compares the performance of the well completed in 2012 to the average performance of the three wells completed in 2015.
As you can see, production from the 2015 wells is about double what production from the 2012 well was.
http://i.imgur.com/t76SAmw.png
In an orderly, well-behaved free market the price of a barrel of oil can be expected to approximate the cost of the marginal barrel. In the case of oil, if the price of the marginal barrel is $70 to $80, then we probably can’t expect the price of oil to rise much above that for anywhere in the near future.
However, since the 1930s the oil markets have not been free, and have been subject to all sorts of governmental intervention as well as other political forces. Those are almost impossible to predict.
Glenn, thank you for your comments and the charts.
Low energy prices are great for the world and great for humanity (if sustained).
If sustained, and (a) not making pollution worse (b) not rapidly depleting resources, or (c) causing some other kind of problem.
> … black coal of the Sydney-Gunnedah Basin in the east of the continent …
How dare you leave out the Bowen, Surat and Galillee Basins in Q’ld ? :)
Too many cane toads.
The shale revolution and Canadian oil sands have made the dream of North American oil independence an achievable goal, and that appears to be where the US policy makers are headed.
http://www.eia.gov/special/trilat/pdf/2015trilateral.pdf
This graph is from the EIA study completed in December, 2015, and it shows the US achieving North American oil independence in about a decade.
http://i.imgur.com/GtZkhAh.png
This would enable ending the Carter Doctrine and the US’s blood for oil policies in the Middle East.
Hillary Clinton, when she was Secretary of State, was instrumental in ushering through the changes in Mexican law to open up Mexico to US investment:
The US has only begun to tap its vast shale oil resources. The two basins with the greatest upside potential look to be the Midland and the Delaware.
http://www.eia.gov/special/trilat/pdf/2015trilateral.pdf
And then there are vast areas in Mexico prospective for shale oil and gas development.
http://i.imgur.com/FdwG1GI.png
http://www.elevationres.com/style/images/art/permian_basin_map.jpg
I am discovering some of the sources of factual disconnects between us. One is terminological.The trilateral assessment you rely on is not only shale plays. Tight oil also includes conventional formations where fracking horizontal wells can enhance recovery factors in existing oil fields. The largest such play in the 2015 EIA table is the Spraberry Sand Trend in the Midland Basin. Estimated TRR 10.6Bbbl with fracking. But the conventional oilfield Spraberry has been in production since the 1950’s. In 2009 there were 9000 active conventional wells, CO2EOR was being employed, and the Spraberry had produced over 1.5Bbbl.
Another disconnect is EIA versus USGS estimates. Where possible, USGS is to be used. I previously noted the EIA goof on the Monterey shale (folded, nothing horizontal to drill, corrected in 2014, essay Reserve Reservations), and the still outstanding bigger goof on the Bahzenov (essay Matryoshka Reserves). For example, the 2015 EIA table says Bakken’s Three Forks TRR is 14.2Bbbl. Well, that is wildly different than the 2013 USGS assessment published 1/6/14 in OGJ by Gaswirth and Marra. Three Forks was 3.73Bbbl, total complex with middle Bakken 7.4Bbbl. That year, EIA estimated Bakken complex total 8.1Bbbl. Now there is no way recovery factors have improved ~4x in two years. Something is amiss in the new EIA estimate in that table. I went into the accompanying assumptions document, but there were no numbers to analyze. According to ND Industrial Commission, the 2015 Three Forks recovery factor was 8.9% on average (7% porosity (conventional), but low permeability). The same NDIC had it at 6.9% in 2013. That would move the 2013 USGS estimate up from 3.73 to 4.8. NOT to 14.2.
A third source of disconnect is relying on any operator estimates whatsoever. They are usually wildly exaggerated for financial reasons, and completely untrustworthy. For example, Continental in 2010 estimated Bakken plus Middle Forks at 32BBL. How? Overestimate recovery factors. Middle Bakken is running 1.6% in 2014 according to OGJ, Continental used 3.5% in 2010, and also pointed out that each 1% higher adds 9Bbbl of TRR. Your Sprayberry estimate just upthread from Pioneer is a marvelous example of such nonsense.
But repeat again that long comments on highly technical subjects that are somewhat OT are not advisable. This is the last time I’ll play that game here.
ristvan,
Sorry, but this is not a “very highly technical subject,” nor is it “far too complex” for mere mortals to understand, as you stated in your comment below:
https://judithcurry.com/2016/03/03/what-is-energy-security-definitions-and-scenarios/#comment-769239
Granted, all the knowledge and skill that goes into getting the oil out of the ground is exceedingly technical. But we don’t have to know or understand all that to be able to see what’s going on.
And here’s what’s going on.
In your Feb. 1, 2013 post your wrote that total combined US shale oil production
And here’s what actually happened: Total combined US shale oil production soared to over 5.2 mbdp by the spring of 2015.
So it’s not a “highly technical subject.” It’s not a “complex” subject.
Quite the opposite, it’s an incredibly simple and easy to understand subject. That is, unless, if one doesn’t want to understand, in which case they argue it’s all too highly technical and complex to understand.
But let me assure you that you are not special. You are not different. You are not exceptional in any way. You are the typical, everyday, run of the mill peak oiler.
https://srsroccoreport.com/wp-content/uploads/2015/12/Top-US-Shale-Oil-Fields-Production-JAN-2016.png
GH, showing well known subbasins of west Texas Permian source rock is cool. Neat maps. But you really have to get back to IEA TRR estimates for those given overlying conventional reservoirs, and then correct those depletion estimates for geophysical TOC reality, as in the Bazhenov. You posted analyses are amaturish thus far. Do a post on Bazhenov, please. The largest shale basin in the world. Show your geophysical jops.
ristvan,
We’ve had this debate before, and I’ve presented the evidence before.
So it’s become fairly clear that no reality and no common sense can penetrate your mind. Why is that?
A little bit more than three years ago you authored two posts on this forum. What these posts reveal is that you’ve drank generously — too generously — from the well of apocalyptic environmentalism.
and
Apocalyptic environmentalism is a secular end-times stealth religion that comes in two sects: CAGW and peak oil. Both varieties anticipate the “end of the oil age.”
CAGW is worshiped by folks like Kirk Spano (mentioned in comments above) and Naomi Oreskes. They envision the “end of the oil age” being brought about by government intervention.
The CAGW theology is a derivative of pelagianism, whose distinguishing tenet is a belief in the existence of the human will. According to the theology, man’s future is not pre-determined, and he can act to save himself through exerting his own will.
So if humanity sees the light and the way, heeds the warnings about CAGW, and chooses salvation (i.e., government intervention), then the coming apocalypse can and will be avoided.
Oreskes co-authored a book with Erik Conway called The Collapse of Western Civization in which she establishes herself as one of the leading prophets of CAGW. She describes the dystopian future that awaits humanity, but only if it does not heed her ominous predictions about CAGW and fails to take proper action.
Peak oil is the second sect of apocalyptic environmentalism. It also envisions the “end of the oil age,” but it does not envision the apoalypse being brought about by CAGW, but instead by oil depletion.
Peak oil worshipers split into two sub-sects.
The first sub-sect worships a form of determinism, similar to Calvinism, the only difference being the determinism is mechanical and not divine.
The other sub-sect of peakism is similar to the CAGW faith in that it worships a form of pelagianism. The existence of the human will once again comes into play, and humanity can choose to save itself, but only if it sees the light and the way, heeds the warnings of the peak oilers and begins immediately the “transformation” to wind and solar energy. The hallowed “transformation” can be brought about in two ways: either through rugged individualism or collectively through government intervention.
The latter category is the one I believe you fall into, as I remember in one of your comments on this forum you calling for the gradual phase-in of a carbon tax on all fossil fuels.
Your belief in the coming peak oil apocalypse you made clear in the conclusion to your post on this blog, “IEA Facts and Fictions.” In it you begin by quoting the IEA:
And then you conclude:
With the benefit of hindsight, we can now see that “the spectre at the feast” has not arrived, nor is it anywhere near arriving. The shale revolution changed all that, and many of the predictions you so fervently made in your posts in 2013 (many quite specific) have failed to come true. The alarmism was a misfire.
But the thing I find most disturbing is that now, in spite of recent events, you still cling to your peak oil theories as a drowning man would to a life raft in turbulent waters.
There’s of course nothing unusual about this. It is typical of anyone who are in love with theory. When reality clashes with a beloved theory, it is reality which must be annihilated, and not the theory.
But here’s the quesiton: Just what is it that you beieve distinguishes you from the CAGW faithful?
ristvan said:
These are nothing but rather lame attempts at ad hoc rescues. They also reveal a collosal ignornance of oil field geology, engineering and geophysics, and how the oil and gas industry works.
And, of course, delving into a bunch of shop talk and highly technical minutia is not even remotely necessary to disprove your peak oil theories. The only thing that is necessary is to take your 2013 predicitons and to compare them to the current reality.
So let’s take a look at some of those predictions:
• In 2013 you wrote:
This prediction of the date the peak oil apocalypse will occur isn’t even close. Heck, there aren’t even any clouds gathering on the horizon yet.
We’re now in 2016, world oil consumption has increased by over 3 million BOPD since 2013, and the world is drowning in oil.
World oil production, due to the shale revolution, has increased so rapidly that it currently exeeds oil demand by over 1 million BOPD.
Furtermore, demand is not projected to catch up to production until sometime in 2017.
The amount of oil in storage is at all-time highs, and this amount is growing daily. Even after demand catches up with production, it will take a long time to work off all this oil that is currently in storage.
• In 2013 you wrote:
So in 2013 you said one thing, and now you’re arguing the very opposite?
In your comment above, you say, “But you really have to get back to IEA TRR estimates.”
So which is it? Please make up your mind.
• In 2013 you wrote:
This prediction was wrong on two counts.
First, oil price did not “inevitably continue to increase.” West Texas Intermediate was about $95 per barrel on February 1, 2013 when you published your post, and it is currently about $35 per barrel.
Second, “the rate at which this unconventional capacity replaces conventional existing capacity” has greatly exeeded “conventional oil’s decline,” so much so that the world is now drowning in oil.
• In 2013 your wrote:
The five major US tight oil shales in February 2013 were not “well known.” And in fact, almost nothing was known about them at the time.
Furthermore, there’s still probably way more unknown about them that what is currently known, even though we know more now than we did in 2013.
For instance, the technically recoverable resource from the major shale oil plays is now estimated to be many times what it was in 2013, and is growing daily as more and more is learned about the formations and their producing potential, as well as improvements in technology are made.
Here are some more recent estimates of technically recoverable resources from some of the plays, and as one can see they dwarf your 2013 estimates by many fold:
http://i.imgur.com/2ctLXOf.jpg
• In 2013 you wrote:
It looks like Maugeri’s predictions weren’t too far off the mark. The same, however, cannot be said of yours.
http://blogs-images.forbes.com/christopherhelman/files/2015/03/cowboyistan2-01-1940×1487.jpg
GS, my writings have many explicit references. Yours don’t. You misinterpret TRR, and ignore the USGS and EIA shale TRR estimates. Those may not be perfect (EIA goofed on California’s Monterey, since corrected, and on Russia’s Bahzenov, not yet corrected). But your estimates are so wildly off the most knowledgeable official ones as to be laughable. You are convinced you are right. Does not mean you are. Not worth debating further here, as far too complex. Thismblognis not about petroleum geophysics and soirce rock shale recovery factors. Those things are laid out with many references in my books Gaia’s Limits and Blowing Smoke.
ristvan,
It is the remoteness from factual reality that I find most unsettling about you and your fellow peak oilers.
When I first ran across your peak oil theories, it quickly became apparent to me that you were an avowed true believer of the peak oil faith. You are, after all, not the first peak oil convert that I have run across.
And true to form for the practitioners of that religion, it quickly became apparent that no common sense and no reality could penetrate your mind.
Things change. New information becomes available. And when it does, it is theory that should change to conform to the new realities, and not the other way around.
In your Feb. 1, 2013 post, for instance, you said of the five principle shale plays in the United States that
That figure is now completely obsolete.
Pioneer Natural Resources released its March investor presentation a few days ago.
file:///C:/Users/HP/Downloads/2016-03-01%20March%20Investor%20Presentation%20(2).pdf
And in it the company estimates there are now 75 Bbbl of recoverable resources, or over 400% of your combined 17.7 Bbbl estimate for all the United States, just in the Permian Basin alone. Furthermore, Pioneer still has four more prospective zones which they still have not tested in the Permian Basin.
http://i.imgur.com/Az8Yvgm.png
ristvan: GS, my writings have many explicit references. Yours don’t
Are you defending the accuracy of your 2013 projections that Glenn Stehle is challenging?
This debate between the two of you has been interesting, insults aside. I hope that you resume it in 2018 and 2020.
Yes, it’s always instructive when two credible sources disagree. I’m reminded of a quote, which to my shame I’ve forgotten the source of: “Petroleum is found in the human imagination; reserves are found in the tax code.”
=============
But I think you can believe in the concept of peak oil without also believing that peak oil will be catastrophic, or that such belief mandates solar panels and windmills.
As often, the better course is to agree with both these credible sources, and also to disagree with them. Incredible, eh?
=================
Wow! Let’s see a scenario where Trump becomes President! Full speed ahead and damn the torpedoes!
Biden was in Mexico last week, profusely appologizing for Trump’s anti-Mexican statements:
Why would the Obama administration be so concerned about maintaining good relations with Mexico, so much so he would send the vice president to make apologies? Could Mexico’s vast shale oil and gas potential have something to do with it?
I’ve long since quit trying the analyze the foreign policy of a “failed community organizer”.
The actions of people who don’t have a clue what they are doing are difficult to understand.
He has an appointment in Asbestosammara.
==================
PA,
Maybe so.
As Don Bishop points out below, the Obama administration doesn’t seem to have any plan, other doing what’s politcally expedient at any particular moment.
Any thought of long-term energy security is, at best, a distant afterthought. To wit:
How many billions of dollarsworth of tank cars hung on that decision? Follow the twenty thousand tank car team train.
As if it only hung on that; instead it was his delusions of grandeur.
===================
“How many billions of dollarsworth of tank cars hung on that decision? “
Liberals have this romantic attachment to choo-choos and anything else that uses rails.
Either that or they are so deep in the front pocket of the railroad lobby they can’t see out.
There is no other explanation for the Keystone decision. It strains credibility to believe that the whine from rabid (they should get their shots) environmentalists is responsible.
http://i.imgur.com/dlLUCQo.jpg?1
Not a lot of romance about pipelines, but this will do:
That number was dull and boring, just like pipelines.
Can’t ya’ hear the clickety-clack drumming, Dinah, blow your horn.
======================
I was almost taking all of this seriously…
Postulating that Iran would, after a nuclear strike on Israel, survive as a nation let alone becoming the regional hegemon ignores the fact that Israel has 200 or more nuclear weapons. Given the above scenario (which assumes no preemptive action by Israel and its defacto Sunni allies) Israel’s retaliation would leave Iran a smoking, glowing ruin. To think the US would risk the 5th Fleet in the Gulf before US and allied air forces had neutralized Iran’s offensive capabilities via a massive air campaign is absurd. No American administration could survive allowing Iran to get away with such extortion.
Those would be scenarios among tens of thousands of other scenarios, including the killing of the Pope by Iranian assassins to prevent a Crusade.
Israel is more vulnerable to nuclear attack than Iran because its population is concentrated.
in a smaller area of land.
There is a reason US taxpayers foot the bill for a Navy that runs in the trillions. It is to prevent or respond to many of the scenarios Evan mentions.
Evan, good to hear that your audiences are skeptical. Who are they, generally?
Azerbaijan has suddenly become a bigger player. Don’t know if the geopolitics will stay nice so it can all happen, but the EU has just given the nod to the TAP in Greece, so Azer gas can flow from the Caspian all the way to Italy. Don’t know what this means for Putin’s Nord Stream 2 project, which bypasses just about everybody between Mother Russia and the Fatherland, but I’m guessing he doesn’t like the idea of a TAP.
http://europa.eu/rapid/press-release_IP-16-541_en.htm
Maybe Greece and Turkey, with debts but a firm had on the migrant tap, just have to be kept happy by Germany and the EU at this juncture…but Azerbaijan is a Shia state that’s nonetheless not too religious or too unfriendly with Turkey or the West.
What with Russia’s south stream pipeline cancelled and a Qatari pipeline to Turkey looking less likely (since Syria thinks it has the right to exist) this Trans-Adriatic deal might cheer up some disgruntled Turks and and Southern Europeans.
So, just to shake up the game some more, lots of gas that is NOT Russian could be flowing from the Caspian to the heel of Italy. (Unless Italy’s debt breaks the EU, or if Eurovision is won by a known white heterosexual male, thus sparking war.)
Evan Hillebrand
Thanks for seriously addressing future energy concerns.
With China rebuilding the Silk Road, have you considered the scenario of China and India taking over the Middle East for its oil?
Reports to the DOE indicate that Carbon Dioxide Enhanced Oil Recovery (CO2-EOR) could double conventional oil recovery.
Note also massive light shale oil resources in Israel (Not tight oil). Similar resources in Jordan.
(Elsewhere says ~ $35/bbl – presumably with cheap gas.)
Proven Technologies Will be Key to Israel’s ‘New Era of Onshore Oil’
(Government approval was not received – See conventional oil exploration allowed on the Golan Heights. Genie Energy
PS (Thanks too for objective sanity on the very poor performance of IPCC models and their lack of validation.)
PS the 2nd quote from: At AIPAC, Two Energy Entrepreneurs Debate How To Power Israel’s Future
DH, a small fact correction. CO2-EOR has been done for 30 years. Major fields include the Permian in west Texas, and Wayburn in Canada. CO2 is usually stripped from natural gas at pre-pipeline cleaning stations for reinjection. Only needed with medium to heavy crudes, since works by lowering their viscosity. For light crudes, simple waterflood is the only EOR that is needed (e.g. Ghawar). For very heavy crudes (e.g.Kern River) CO2 can supplement steam flood, the CO2 coming from the steam generation. CO2 plus heat lowering viscosity.
DH a further clarification. Tight oil, from shale (MSM terms it shale oil), is shale in the oil window that has undergone catagenesis. There is oil in the shale.
The Israeli ‘shale oil’ is not that. Like the Green River formation, it is a kerogen shale that has not yet undergone catagenesis. That is why heating to 600F is necessary to convert kerogen to petroleum, leaving about a 30% carbon residue. Essay Much Ado About Nothing explains. This is a very common confusion. Kerogen shales are not economic, and both the Green River and Israeli formations suffer from the problem that 3-5 barrels of water is needed to produce one barrel of kerogen shale oil. No water.
The “oil” resource that Vinegar refers to is an immature kerogen source rock (at least in most of the region). His plan is to, apparently, cook the immature carbon-rich material in situ to convert it into usable hydrocarbons.
Should have refreshed before typing. Prof. Istvan got there first.
Nope. Just great minds thinking alike. :)
> … cook the immature carbon-rich material in situ to convert it into usable hydrocarbons
This concept was tried (not 1st tried, of course) in kerogen-rich coal seams of western NSW during WW2 in an attempt to provide oil for the war effort
A majestic failure, though. The economics were too poor even in wartime. It does rather depend on the quality/concentration of the contained kerogens, but anyone who tries this should do very careful feasibility first
ristvan and opluso
I agree. Shell and Chevron’s efforts on Green River shale cost mega bucks trying to develop methods to recover it. That included plans for GW nuclear plants to heat the resource for 3-5 years. Those efforts were abandoned – primarily because of Obama & green “concerns” on federal lands, limited water, high risks.
The problem with Colorado Green River kerogen is that the shale oil/kerogen is not separated from the water table. Thus, US “environmental” restrictions require complete isolation from the water table – including a full ice wall surrounding the heated kerogen. Then prevent liquid from moving into the water table. Water availability in water scarce areas is another critical issue. Combined, political/environmental/cost made kerogen recovery currently un economic! Shell temporarily pulled out in 2013.
Israel’s shale is geologically isolated from the water table, completely transforming the picture from a pragmatic engineering perspective. You still have political sensitivities, water availability issues etc!
When he retired, Shell’s Chief Scientist Harold Vinegar moved to develop shale in Israel. With Israel’s very large offshore natural gas, it has the potential to recover shale oil cost effectively.
Israel’s conventional oil discoveries were 10x thicker than conventional.
For CO2-EOR see publications by: Vello A. Kussraa at Advanced Resources International. etc.
PS I have intellectual property interests in CO2 EOR etc.
PS The Golan Heights oil is permitted as conventional exploration, though there are accusations that it s “tight oil” (aka oil shale”) requiring fracking.
” The IPCC models are not validated in any meaningful sense. They cannot predict the recent past without significant a-theoretical add factors. They have not forecast the near future for 1995 to 2015 at all well. They have never even attempted to explain the vast changes in climate over the past 500 or 1000 years. ”
Let’s see what Barry Hughes says about complex models:
“The purpose of this paper is to discuss the credibility of forecasts made with the International Futures (IFs) simulation. It is common to talk about validating computer simulations. When the simulation is of a complex social system, however, validation is essentially impossible”
WRT :They cannot predict the recent past without significant a-theoretical add factors.”
Barry SAYS:
“It is widely accepted that validity is directly related to the purpose of the model and the purposes of any really useful model go beyond simply reproducing history into (a) helping us understand the character and/or dynamics of the system represented and (b) helping us understand its behavior with interventions (such as possible policy choices). It is also generally accepted that models of complex systems are never really validated. Instead, in the terminology of Hodges and Dewar (1992: vi) models accrue validity along a continuum between not valid and valid”
“A second element of testing and analysis is often the much-vaunted historical validation. As indicated already in chapter 1, this is an important step, often as much for accreditation as for validation, but it is also misnamed because it cannot really validate a model of complex social systems. Those systems are never exactly the same in the future
as in the past. Moreover, we often lack the quality of data we would need for really strong historical testing. More accurately, the process is one of historical calibration, in which the model results are examined against the data that are available and judged to either reproduce them adequately or to be understood as results of understandable differences between the historic and future systems.”
“The IFs data preprocessor. This important part of the IFs modeling system
(Hughes 2006 May) cleans and reconciles data needed to initialize the model in
its starting year. The code finds large numbers of data problems even for the 2000 load. For the 1960 data load of the model the problems are enormous. For instance, there is essentially no input-output data for the economic model in 1960. The preprocessor has been programmed to use 1960 data when available and to prepare estimates of 1960 values from later ones when they are not. Similarly, there were no life tables for population from 1960, so life expectancy and infant mortality were used to compute them as best possible. Very substantial estimation
and hole-filling is done by the preprocessor for the 1960 load.”
TUNE MUCH????
“It is useful to understand the sequence of the historical testing and calibration effort. Because of the close interaction of all parts of the model, it needed to be iterative, beginning in some areas of the model, proceeding to others, and sweeping back for a
second and even third pass. For the most part, demographics and economic modules were the starting point because those modules affect all others and are, in turn substantially affected by most others. The expectations of the historical comparison, to be shown in the next sections of the chapter, are to match historic forecast and actual historic values reasonably well with respect to total population and GDP growth and a
few additional key demographic and economic variables for the world and the largest countries. ”
Looking through the validation of your highly tuned model I was amused
‘Export Share of GDP Historic Forecast and Empirical” dang you really screwed that one up…. And ‘Carbon Emissions Historic Forecast and Empirical” is also really bad hind casting.
or Land Grazing Historic Forecast and Empirical?? is your model broken?
glass houses and all
“Carbon Emissions Historic Forecast and Empirical”
http://www.ifs.du.edu/assets/documents/ifsvalidationv1_0.pdf
Who is BARRY HUGHES???
The guy who created the model you use. Did you read his “validation”
study ( it’s really bad as far as validation studies go )
‘The quantitative results were developed with the aid of the International Futures Model, created and maintained by Dr. Barry Hughes at the University of Denver.”
Heh, the Russians are continuuming toward validation.
==========
One more Quote from Barry:
‘Assessing credibility of forecasts and forecasting instruments is not a simple process. The fact that forecasts of complex human systems are essentially always wrong they are to help us think about the future, not to tell us what it will be creates a somewhat difficult starting point.
It has been argued here that validity is an impossible standard, but that credibility, as something that accrues over time and with experience, is a standard that can be meaningfully considered. Credibility must be assessed relative to the purposes of a modeling project and its forecasts. In the case of IFs, the central purpose is to serve as a thinking tool for exploring long-term, global futures across multiple, interacting issue areas.”
Credibility, why that’s so last century; we’re into thinking of tools now, yeah, that’s the ticket.
============
Stephen,
I don’t think you have read my book or tried to understand how I use models. “Energy, Economic Growth, and Geopolitical Futures” is more about how to use long range models appropriately than about energy security or climate change. Give the book a look and then get back to me.
So you disagree with Barry???
tell us how he is wrong about his own model
“I don’t think you have read my book or tried to understand how I use models. “Energy, Economic Growth, and Geopolitical Futures” is more about how to use long range models appropriately than about energy security or climate change. Give the book a look and then get back to me.”
1. you used Barry’s Model
2. He has a position about the validity of the very model you used.
3. He is a better judge of his model than you are.
4. The validations of his model, are worst than any of the IPCC models.
Oh my. I must weigh in. So Mosher protesteth much without having apparentlyread the MIT press book. Par for his biased course.
Evan
In Appendix B of your book you reference Barry Hughes 2006 Validation study of IF
Above I quoted Barry’s opinion of validation
Did you read his 2006 paper?
If so, there are quite a few charts showing absymal validation.
In fact, he never even calculated a Skill score for his model
I’m an old modeler too. War Simulation primarily. And looking through that 2006 paper I am stunned that you argue in your appendix B that the IF model is validated. There isnt a SINGLE calculation of skill in hughes 2006 paper. He doesn’t calculate a error of prediction… Nothing
And in the end he argues that validation is impossible.
How can you write this
“The IPCC models are not validated in any meaningful sense. They cannot predict the recent past without significant a-theoretical add factors. They have not forecast the near future for 1995 to 2015 at all well. They have never even attempted to explain the vast changes in climate over the past 500 or 1000 years. ”
Have you looked at the Taylor diagrams?
Did you read this
http://www.ipcc.ch/pdf/assessment-report/ar5/wg1/WG1AR5_Chapter09_FINAL.pdf
What ‘significant add in factors” are You talking about? Do you
have a single example?
Finally. you say they never even attempted to explain the VAST
changes of the past 500-1000 years?
Really?
Try here: section 5.3.5.3
http://www.ipcc.ch/pdf/assessment-report/ar5/wg1/WG1AR5_Chapter05_FINAL.pdf
See figure 5.9
they NEVER??? even Attempted to explain the changes?
http://climate.envsci.rutgers.edu/pdf/FreeRobock1999JD900233.pdf
http://www.reportingclimatescience.com/news-stories/article/little-ice-age-simulated-by-climate-model.html
they NEVER??
“We have performed a total of 125 simulations with the
model driven by both natural and anthropogenic forcings
(Fig. 1 and Table 1). An existing ensemble of 115 simulations
(Goosse et al., 2005b, 2006), covering at least the
period 1001 AD-2000AD, is first presented (35 simulations
starting in 1 AD, 30 starting in 851 AD and 50 starting in
1001 AD). The forcing due to long-term changes in orbital
parameters follows Berger (1978) and the observed evolution
of greenhouse gases is imposed over the whole simulated
period”
http://www.clim-past.net/2/99/2006/cp-2-99-2006.pdf
They never even attempted???
http://link.springer.com/article/10.1007%2Fs11434-011-4641-6
“A comparison of the Medieval Warm Period, Little Ice Age and 20th century warming simulated by the FGOALS climate system model”
“To compare differences among the Medieval Warm Period (MWP), Little Ice Age (LIA), and 20th century global warming (20CW), six sets of transient and equilibrium simulations were generated using the climate system model FGOALS_gl. This model was developed by the State Key Laboratory of Numerical Modeling for Atmospheric Sciences and Geophysical Fluid Dynamics, Institute of Atmospheric Physics, Chinese Academy of Sciences. The results indicate that MWP warming is evident on a global scale, except for at mid-latitudes of the North Pacific. However, the magnitude of the warming is weaker than that in the 20th century. The warming in the high latitudes of the Northern Hemisphere is stronger than that in the Southern Hemisphere. The LIA cooling is also evident on a global scale, with a strong cooling over the high Eurasian continent, while the cooling center is over the Arctic domain. Both the MWP and the 20CW experiments exhibit the strongest warming anomalies in the middle troposphere around 200–300 hPa, but the cooling center of the LIA experiment is seen in the polar surface of the Northern Hemisphere. A comparison of model simulation against the reconstruction indicates that model’s performance in simulating the surface air temperature changes during the warm periods is better than that during the cold periods. The consistencies between model and reconstruction in lower latitudes are better than those in high latitudes. Comparison of the inter-annual variability mode of East Asian summer monsoon (EASM) rainfall during the MWP, LIA and 20CW reveals a similar rainfall anomalies pattern. However, the time spectra of the principal component during the three typical periods of the last millennium are different, and the quasi-biannual oscillation is more evident during the two warm periods. At a centennial time scale, the external mode of the EASM variability driven by the changes of effective solar radiation is determined by the changes of large scale land-sea thermal contrast. The rainfall anomalies over the east of 110°E exhibit a meridional homogeneous change pattern, which is different from the meridional out-of-phase change of rainfall anomalies associated with the internal mode.”
Rud
Read the Hughes 2006 report on the model “validation”
In appendix B of Evan’s Book, he references it, as some kind of assurance that the model has been validated.
Really?
here is Hughes 2006
http://www.ifs.du.edu/assets/documents/ifsvalidationv1_0.pdf
For grins look at the Hindcasts for forests
“Turning to forest, the five graphs below again show the world, OECD countries, non- OECD countries, China and India. One of the interesting features is the apparent reversal
of deforestation for non-OECD countries in both data and historical forecast. Once again
the fit for India appears worse than it is, given the small change in forest area from 1960
through 2000 ñ and it is somewhat difficult to believe that the forest area of India actually
increased during that period as the data suggest.”
pg 53
haha.. Cant believe the observations.
“More generally, some of the figures below suggest more substantial discrepancies
between historic forecasts and empirical values than in other areas of the model. One
reason for this is likely the highly politicized character of land use; for instance, OECD
countries tend to subsidize their crop areas, leading perhaps to the cultivation of
somewhat more crop land in those countries than the model anticipated and also less than
expected land under crops in the non-OECD countries.”
‘One additional area where further calibration work is needed is around trade. The two
figures below show global exports and those of OECD countries as a share of GDP (in
this case we did not use the historic estimation procedure, but rather the raw data). The
growth of exports as a share of GDP in the historic forecast is quite a bit slower than it
was in reality”
“Even with the above, mostly policy-oriented interventions, there are significant
differences between historic forecasts and empirical patterns. Therefore further additive
adjustments were made to the multifactor productivity (MFPADD) of various countries
and regions. Among the most significant residual adjustments were downward ones for
sub-Saharan Africa (representing, depending on the analyst, geographic and/or
governance forces) and a number of the OPEC countries of North Africa and the Middle
East. This last set of adjustments is the most ìad hocî of all those made in historical
analysis of the economic module and would therefore be a focal point of further
calibration efforts and model development. ”
“The figures below show reductions in infant mortality, one of the key forces in the
expansion of life expectancy around the world. Although the IFs historic forecast
captures much of the drop, it underestimates it. This forecast could be improved, which
would also reduce the needed general mortality interventions indicated above. One of the
problems in undertaking historic forecasts of infant and more general mortality is that the
UN Population Division, the source of IFs data, does not provide survivor tables for
1960. For the purposes of the historic analysis, we swapped in infant morality rates to
achieve appropriate initial conditions, but other death rates actually represent those of
about 1990.”
Steven,
As I suggested before, you really ought to read my book and try to understand it before you attack it.
I am attacking what you wrote HERE.
And you cannot defend it.
You used a model that fails MISERABLY in validation. read the 2006 Hughes report that you yourself referenced in appendix B of your Book.
In your BOOK you wrote that IF was well validated. and you reference Hughes 2006.
I read Hughes 2006. I referenced it above. The charts in it show MISERABLE performance for the model. So Miserable that Hughes
doesnt even calculate skill metrics.
I saw another battery-box on wheels today, a Chevy Spark. It pulled out in front of me as it slid down a side street entering our snow covered main thorough-fair. I was racing along at 25 mph in a posted 45 mph speed zone in my 9 y.o. 158 h.p. Jeep Compass (compact cross over), and…as the collision scene unfolded before me, I passingly noted that my car was a lot larger than this eccentric electric car.
Fortunately, my vehicle’s anti-lock brakes saved the day, feet from a driver’s side impact, a T-bone. The battery-box scurried off without so much as a “how-do-you-do.”
I would have been upset if I had crushed this Spark and it occupant. I’ll bet he would have been too.
This brings me to the issue of being safe in such vehicles where the weight of the vehicle is primarily in the batteries and not in side-impact bars, or steel for front end collision protection or a host of other safety features. Please don’t remind me that everyone should be driving such safety hazards since trucks, large and small let alone passenger vehicles still on the road make for 20 years of minced meat driving such things.
Tight or loose or cheap or expensive oil is with us for the near future. In the mean time, what are you driving….with your kids and grandchildren in the back seat?
Electrocution, electrocution, never, never, never gonna battery splash again. Don’t slip juice to me, Bruce.
===================
With regard to energy security and the tyranny of
distance , Australia needs to remember WW2 history.
China knows to stockpile energy at a rate of knots.
What are our stocks? W’out energy security life’ll be,
you know, what Hobbes said.
http://www.smh.com.au/federal-politics/political-news/doubts-over-australias-fuel-security-as-bureaucrats-admit-not-knowing-reserves-20150204-1366vq.html
Heh, yours just act stupid, our plead the 5th.
============
I like those larger battery boxes on wheels. I can’t remember the brand, but they go fast and look cool. But for driving fun, I prefer something small and nimble, like the smaller Mazdas and Fords. Jeep offers nothing I want, and some models have to be fixed frequently. I hope you have had good luck with yours.
.
==> I am skeptical of the catastrophic anthropogenic climate change predicted by the IPCC computer models.
Oy.
The models don’t “predict” “catastrophic anthropogenic climate change.” They show probabilities of varying degrees of warming, with accompanying error ranges.
If you construct a straw man to justify your argument, you’ve got a problem.
When you start insisting on that to Bernie “the world will be uninhabitable” Sanders and James “death trains” Hansen we’ll listen. Until then, we’ll respond to the claims being made to justify “action” on emissions.
Jeff –
The quote I excerpted spoke to what the “models predict,” not what Hansen or Sanders said.
Heh, afraid it’s catastrophic and afraid it’s not. Go wonder.
============
Interesting post. I’ve participated in “scenario development” exercises. Some were done 25 years ago. When I attended I would bring with me a copy of a 1979 10 year plan prepared inside a large multinational oil company. It didn’t have a case which included Khomeini in it. I used it as an example of what I call “the Mule effect”, after a character in a scifi novel (Foundation).
During World War II energy security was critical. When German submarines began sinking ships near the US, the Big Inch pipeline carrying crude oil from Texas to New Jersey was built in 12 months.
It took Obama seven years to say “no” to the Keystone XL pipeline. Canada is our largest trading partner, our closest friend, and the most secure source of imported oil; Obama must not care about energy security.
Why is it necessary to have a pipeline from Canada to Houston to get Canadian oil?
Would price competition from Canadian oil reduce incentive for drilling new US wells?
max,
It isn’t “necessary” so much as more efficient. Currently the oil gets transported by rail tanker car.
Forbes listed the US beneficeries from the cancellation of Keystone.
All of them were in the US midstream or “crude by rail” business, Warren Buffett being the most prominent of the lot.
US upstream oil producers were not among them.
I like railroads. Trains are romantic. It’s hard to get nostalgic about a pipeline.
It’ll be interesting how the CE “Wolfpack” attacks me on this —
One aspect rarely mentioned in the U.S. oil security debate is just how much OPEC oil we still depend on, and how PR and political games are played between the use of “gross” and “net” U.S. oil imports.
I wrote a blog article about this in 2014, and while “net” numbers continue to decrease, currently the EIA still states: “about 46% of the crude oil that was processed in U.S. refineries was imported“. Also per current EIA data, the U.S. still imports more oil from OPEC than Canada.
My blog article is at: http://greenenergy.blogspot.com/2014/07/the-untold-story-on-us-foreign-oil.html
The big issue here is use of heavy oil and how U.S. Refineries “guessed wrong” on the significance of the dramatic increase in light oil production in the U.S — where they spent billions in capital to configure their plants for heavy oil. Refineries are not just going to ”walk away” en masse from this capital investment.
So kinda in a nutshell — The U.S. is exporting large amounts of light oil (from fracking) and importing large amounts of heavy oil.
If Congress was truly concerned about oil energy independence (which they are not, IMO) they would create things like big tax breaks for U.S. Refineries to reconfigure their plants from heavy oil to U.S. domestic light oil.
Note: Much/most of the U.S. light oil has been exported through gasoline exports — and not the direct export of light oil crude. The U.S. has become the gas station for the world (primarily historically due to the difference between Brent and WTI prices).
“If Congress was truly concerned about oil energy independence (which they are not, IMO) they would create things like big tax breaks for U.S. Refineries to reconfigure their plants from heavy oil to U.S. domestic light oil.”
1. Is it your belief that a refinery capable of processing heavy oil can’t process lighter oils?
2. Why is government assistance needed to motivate this market? If someone can invest in a more efficient refinery and it works, it will be profitable.
Stephen, a large percentage of the heavy oil refined in the US is exported. Crude oil exports of any kind are pretty small in comparison. For refineries, guessing political will wrong isn’t difficult and building new refineries isn’t a cake walk.
Captain — I disagree with you. U.S. gas refineries have been successfully using the difference between Brent and WTI to dramatically increase U.S. gasoline exports.
stephen, since us refineries are refining 18 million barrels per day at over 90% capacity I imagine their secret to success might be a bit more interesting than the spread between Brent and WTI. However, planning for alberta tars sands which are blocked for the large part would through a wrench into things.
It is a pity that crystal ball technology hasn’t advanced.
Stephen Segrest,
I think there’s a trade-off taking place here. The situation you describe may not be the best for national oil security, but it sure to heck helps the US’s trade balance.
http://i.imgur.com/OiT1PrW.png
Refining other people’s oil is a profitable business. You take in a raw product, and give them back finished products. This typically results in more value added than producing primary materials, like oil.
Mexico is one of the biggest customers of US refined petroleum products, something which Mexicans are certainly not happy about.
http://i.imgur.com/Em72Ujo.png
And it looks like the US is set to become Cananda’s refiner too. Again, some Canadians have expressed alarm at this, as nobody want’s to fall into a staples trap and become a colony of the United States or China:
Stephen Segrest,
The complaints concerning the lack of renfining capacity for sweet light crude came from domestic upstream independent oil and gas producers.
There was a ban which prohibited them from exporting sweet light crude, and US refineries lacked capacity to refine all the new sweet light crude coming on line from shale oil drilling. Supply and demand principles worked their magic, and quite a gap in price developed between West Texas Intermediate (which could only be sold inside the US) and Brent (which could be sold on the open world market). The bottom line is that US domestic oil producers were forced to sell their crude at cheaper prices than what they could if they were able to sell their crude on the free, world market.
http://www.eia.gov/forecasts/steo/uncertainty/images/uncertainty_fig3.png
In December, 2015, however, congress voted to lift the ban on exporting crude oil.
Now US oil producers are free to export their crude onto the world market, and the price differential between WTI and Brent has largely disappeared.
If we want to talk about what would be best for the US’s trade balance, however, it would be to the US’s best economic interest to export refined products. But the refining capacity may not exist to do that.
SS, until a few weeks ago when the law was changed, it was ILLEGAL to export US crude oil of any type. There was a lot of press around the laws change. Google it. Your inferred facts are simply wrong.
Rudd — You are absolutely incorrect. You didn’t read my post very well or just uninformed. Check with our mutual friend Robert Rapier (industry expert) — the spread between Brent and WTI has been a major reason why light crude in the U.S. was being formulated into gasoline and exported at such a high level. As I stated — an indirect export of light crude via gasoline. Geez — how the CE Wolfpack twists everything that doesn’t agree with what they believe.
I don’t read your blog. I was responding directly to your post above. And, there is a certain illogic also, because I thought you were also arguing US refineries were set up for medium heavy (like WTI) rather than light (Brent). The I in WTI stands for Intermediate, as in API. As medium heavy refines less transportation fuel than light, it will normally trade for less $/bbl because it offers less refinery value. Same is true in spades even for hydrogen upgraded Canadian dilbit. You cannot refine as much gasoline, diesel, and kerosene out of what started as asphalt. The upgraded dilbit price discount before the Saudi instigated crude price war was about 30% (below WTI).
ristvan said.
Nope.
If your explanation were valid, then WTI, since it yields more diesel, and diesel is more expensive than gasoline, should be worth more.
And, as the graph above shows, Brent also sold at a premium to LLS (Louisiana Light Sweet) pre-Dec2015. So the prices of both WTI and LSS were held down pre-Dec2015 because they could not be sold in the global oil market, but had to be sold in the flooded US market.
http://i.imgur.com/kspAhiB.png
The EIA explains why WTI sold for less than LSS as follows:
The prices between WTI and Brent diverged after Cushing got flooded with oil from the Bakken and Canada.
Before that they pretty well tracked.
http://i.imgur.com/TYpCDto.png
As Rud is getting grumpier and grumpier on CE — he’s also getting sloppy. Industry folks have talked about the Brent/WTI spread for years in discussing the dramatic increase in U.S. gasoline exports over recent years.
European Refiners even tried to bring an unfair trade suit against U.S. Refiners over this — and they were unsuccessful (as many International Refiners have closed).
When the U.S. Congress lifted the crude oil export ban, most U.S. gasoline Refiners where against it — as it would reduce the Brent/WTI spread (which has happened) reducing their recent historical competitive advantage.
Stephen,
You are sounding paranoid. No wolfpack.
Mr. Starkey — the issue of this blog is energy security.
It is simple minded to consider physical possession as the determinant of energy security. It is simply the first requirement.
Energy is secure when it is at the whim of the wind or the clouds? Bah.
==================
Kim — Using ELCC, can wind and solar be considered “secure”? Up to a grid specific penetration level, the answer is yes.
The grind up to that level is rocky; well above treeline.
================
@ Stephen Segrest
> … a grid specific penetration level …
What exactly is a “grid specific penetration level” when it’s at home ? Apart from gobbledegook, of course
Actual (real) kWh related to known base level requirement is a useful concept. “Grid specific .. blah.” isn’t
ianl8888 For a person like you that clearly shows no energy engineering knowledge — yes, my posts are gobbledegook to you.
Each design unique; it’s boutique engineering.
===============
Peaking load requirements represent a boutique or specialty niche? Peaking load requirements are less important than base load?
You see that the difficulty is a prize. Boutique is not quite right, say ‘precious’ instead, since peak load is precious indeed.
But I am fairly ignorant of energy engineering, and do consider myself a techno-optimist. Little doubt these are possible, the question is cost. Intermittency and power undensity are difficult to work around, fundamentally.
It seems that it is easier to adjust demand than to regulate supply. And this I regret.
=============
I tell thee, even a lanterne hath more use on windy
nights.
Just answer my question, thanks – without gobbledegook
What is a “a grid specific penetration level” when it’s at home ?
How does it relate to known base load requirements ?
What is Energy Security?
What is Climate?
Andrew
Changing the assumptions about China’s energy production and political orientation, however, could drastically affect the US position. In another scenario we assume Chinese GDP growth is not strong, its energy production and energy efficiency do not grow, and it becomes an aggressive revanchist state rather than a responsible stakeholder.
I’m not sure why this scenario is even bothered with. It isn’t realistic.
China’s actions to date are basically the dream scenario.
They have been responsible. Although the result may be mostly from internal pressures they have:
1. Apparently capped (or nearly capped) emissions.
2. Are deploying renewable energy large scale.which they get at production cost.
3. Much of their new coal plant construction is replacing existing inefficient capacity.
4. They are developing over 7 different versions of 4 4th generation nuclear reactor technologies in addition to the mix of about 9 types 2 to 3+ of reactors they are currently deploying (which use British, French, Russian, American, Canadian and/or indigenous technologies),
5. The bewildering mix of reactors they have deployed will give them first hand experience to make “best of breed” future development and deployment decisions.
There simply isn’t anything that will stop China from producing more energy more efficiently.
Perhaps most importantly China is not crippling itself with misplaced guilt about the use of fossil fuels; they are simply finding the future of cheap energy is nuclear.
=================
China is the smartest country on the planet, literally. 7-9 points higher than the US. And we allow sub-90 illegal immigrants. That is going to work out well.
The US is being played. The US, pre-liberals, was the most powerful country on the planet. Not any more. China pwns us.
We have given up our industry and crippled our economy to please rabid environmental zealots who should have been kicked to the curb a long time ago.
We don’t make anything in this country anymore. And there are repercussions. There is actually a debate about whether China backdoored some of the chips they sold the US military.
China is going to play us for the maximum concessions, then do what they want. China was going to start limiting coal burning because of internal pressure. They presented their plans that they were going to do anyway as a bargaining chip for concessions, and even then got wiggle room in case they change their mind.
China used to be too poor (1995) to afford a clean environment. After 15 years of sucking the US dry China can afford reasonable and rational (US circa 1985) environment regulations and they will get them. They will be able to safely burn every last lump of coal.
But yeah, they are going nuclear (see I told you they are smarter than we are). Gen 4 in a big way. With little regulation. For real power at the capital cost, Watt for nameplate.Watt, of renewable energy, that lasts 4 times as long and produces 4 times as much.power as renewable energy. Smart, very smart.
PA,
You give China too much credit. Making them into a colossus much like the Soviet military was portrayed during the cold war.
China has some serious problems, environmental ones being the least of their worries.
Communists are China’s biggest problem.
timg56 | March 5, 2016 at 9:10 pm |
PA,
You give China too much credit. >/i>
Yup, I did.
http://www.statisticbrain.com/countries-with-the-highest-lowest-average-iq/
Don’t know what I was looking at. China only has 2 IQ points on us. The US used to be at 100 before all the people snuck under border. Mexico has an IQ of 87.
However they could farm it out to Hong Kong and they are 9 points smarter than we are.
http://www.targetmap.com/viewer.aspx?reportId=40493
And now I am back to defending my original statement. The autonomous regions drag down the “average” Chinese intelligence. Some of the Han Chinese provinces (74 million people) have an average IQ in the 110-115 range.
jim2 | March 5, 2016 at 9:27 pm |
Communists are China’s biggest problem.
I’d swap communists for eco-warmunists in an even trade. The communists are smarter, and smart and foolish beats dumb and foolish.
PA,
I was thinking in terms of demographic, economic and social problems that China faces.
We hear a lot in the US about the impact from a retiring boomer generation and how the work force that has to support that generation after they retire is smaller than that they are replacing. China has that problem in spades. Then there is the secondary problem of an artificially created imbalance in the sexes. More eligible males than females.
On the economic front they still have many of the problems associated with a command economy, plus a huge portion of the population which is still rural and poor. Those people have been given expectations that the future holds the same promise for them as with all of the people in the urban coastal cities.
One sign that the US still has the advantage over China is the huge amount of US debt they hold. Even the Chinese know where to put their money.
On the other hand, when Dr. Closson and I talk to audiences about our book and we present the scenario based on these climate assumptions and the political response to the perceived threat, the IPCC scenario is always rated the least likely of the eight we present—even less likely than the nuclear attack on Tel Aviv–because most people don’t believe the underlying assumptions are very realistic.
Less likely than a nuclear attack on Tel Aviv.
Yeah, that’s the right ballpark. It is only slightly more likely than a Chicxulub sized impact.
Some energy related links from Market Realist.
http://marketrealist.com/2016/03/will-obamas-administration-implement-clean-power-plan/
http://marketrealist.com/2016/03/can-supreme-courts-vacancy-impact-clean-power-plan-2/
US Crude Production:
https://marketrealist.imgix.net/uploads/2016/03/US-crude-oil-production.png
https://marketrealist.imgix.net/uploads/2016/03/US-crude-oil-prodcution.png
Rig counts:
https://marketrealist.imgix.net/uploads/2016/02/US-NG-rig-count4.png
https://marketrealist.imgix.net/uploads/2016/02/crude-oil-rig-count2.png
Re hydrogen from nuclear power plants: It is absurdly expensive and discussed at length here. Perhaps that is the reason that commercially produced hydrogen is from steam-reforming of methane, not electrolysis of water with nuclear power providing the electricity.
http://sowellslawblog.blogspot.com/2014/06/hydrogen-from-nuclear-power-plants.html
Re future of oil production, demand, and oil prices, this was the subject of my 2011 speech to Tulane Law School (New Orleans, Louisiana). The topic was Peak Oil and US Energy Policy.
From that speech,
“Turning next to Energy Policy, the absolutely most important point is that we must take the long view and not be short-sighted. It is critical that the US be prepared for that day when we will desperately need our domestic oil. That day when our foreign supplies are cut off yet again, and this time we are in a prolonged world war, similar to World War II. To meet that day, we must have oil in our own lands. Every president since Truman has known this to be true, and therefore have made so much of the USA offshore off-limits to drilling. The West Coast, East Coast, and eastern Gulf of Mexico are off-limits to drilling. Much of the on-shore lands are also off-limits, including the ANWR. We know the oil is there. We don’t need that oil right now. Preserving that oil for the future is critical, and that is why Drill, Baby, Drill is Dumb, Baby, Dumb. (as an aside, this phrase drew spontaneous applause, much to my great surprise. – RES)
Next we must maintain a vital oil industry. It is critical that the US maintain the ability to drill, produce, refine, and transport oil and oil products to meet that dreaded day. We must attract and retain highly qualified and motivated personnel in the entire oil industry.”
http://sowellslawblog.blogspot.com/2011/04/speech-on-peak-oil-and-us-energy-policy.html
WNN 7/3/16. China NP http://www.world-nuclear.org/information-library/country-profiles/countries-a-f/china-nuclear-power.aspx
i.e. capital cost of the four plants is US$1475/kW
Hello, since I’ve been accused of worshiping CAGW, I’ll just point out that I’m Catholic. I did study some science back in college and think the whole notion that anybody who supports limiting human impact on the planet is a nutjob is well, nutty.
It is very easy to go to the NASA website and see that the planet has broken out of a 65 million year environmental state the past several decades. There are no natural changes. Not the sun, not volcanoes, not magnetic fields, not anything natural that can be measured that scientists – thousands of them – have been able to find.
The only real change since the middle of the 20th century A.D. has been a huge increase in carbon dioxide and methane. Humanity has changed the global environment. I don’t know if we can change it fast enough to avoid some negative outcomes. Luckily, most people will survive by moving and adapting, but some will not. If we do not move towards a more carbon neutral posture in the next few decades, then we have even bigger problems than the migrations that the Pentagon projects.
EVs will be a big deal soon. There is a new technology to remove methane from the air and turn it into plastic (actually old technology 90% cheaper). Solar is going to continue to get cheaper. Wind will get a little cheaper but is running into physical limits.
Given that 50% of oil is used in cars, you should expect there to be a lot less oil usage for that end by the 2030s. That is why ultra deep sea oil is canceling not only projects, but not going to lease auctions and canceling exploration outright. Oil sands projects might never see the light of day again after this last batch is completed. Why no more ultra deep water and oil sands within a few years? The payback is too long in an uncertain environment.
Ultimately, we’ll overshoot for a while on capex cuts and that will drive prices higher. So expect ebbs and flows in development as the glide path away from oil over the next few decades happens. But make no mistake, oil will not be a major fuel by mid-century. If you are an oil worker, plan accordingly. Opportunities will become more limited over time. If you are an investor, don’t follow ideology, follow analysis.
http://FundamentalTrends.com
“…think the whole notion that anybody who supports limiting human impact on the planet is a nutjob is well, nutty.”
I wasn’t aware that anyone actually felt anything of the kind.
As to “There are no natural changes”, well…