freefall51

The Risks of Falling Gas Prices: Bad Decisions, All Over Again

At a visit in 2004 at one of the large tar sand players in Edmonton a number of ~ $ 20/ barrel was floated to make tar sands extraction viable. That may not have taken into account some of the massive price increases that the tar sand players later experienced in their projects. The $ target probably went up from there.

So it not so much the price rather than the complexity of the projects that limits the output of oil from CAN. Should stand at 1.5 mm barrel/day if I am not mistaken or 2 % of the world oil production. Nice addition but not earth shattering yet. Mining and processing sands is way different from just pumping.

Chicken and Egg: A Currency Called the Oil/Dollar?

The oil industry is doing a absolutely vital job to support this society. That said it is clueless at best and disingenious at worst to tell the people that soaking the oil industry with a windfall tax will do any good. If the oil industry as a body is subject to an additional tax in the same way none of these companies will have a competitive advantage or an incentive to eat that tax. Instead they will pass it onto the people with the following effects:

1.) The prices for oil products will go up for everybody
2.) The oil companies will sell less, which partially will offset the additional tax
3.) The oil companies will have less funds to invest in their business (linked and supported by other peoples business), hire employees (some people) or distribute earnings to their shareholders (again the people).

There could not be a more stupid way to set the economy up for failure and betray the people's interest. The only guys that really will profit from this short term are the proliticians that sell this nonsense. Politics should only be concerned what they need to do to let business (of all sorts) thrive rather than trowing stumbling blocks.

If an industry is smart enough to make money it should also be smart enough to spend it. It does not take any no-value-adding polititician to do that for them. Disgusting, in my not so humble opinion.

Crude Oil, Gold Prices Plummet: Time to Get Cautious About Dollar Bears

The comment is better than the article.

Transocean Reports Solid Earnings, Time to Short?

I keep thinking if $ 130 oil makes gas cost $ 4/gallon and that is supposedly unsustainable, then look at Germany where the gas price is an approximate double. Due to lack of alternative people drive anyway. To get a sense how much try one of those famous traffic jams like on the A8 between Munich and Salzburg during holiday season. This qualifies as discretionary idling - not even driving.

Houston to Obama: Smell the Oil

RIG is doing most of their business in foreign parts of the world, where they pay a chunk of their taxes. They still pay $ 700+ M taxes per year in the US. It could be more if the leading political minds in the US were not dumb enough to keep this fabulous company out of their country.

In the meantime I hope for the sake of my retirement account, that if the windfall tax materializes, RIG will move their headquarters from Houston to the tax heavens of the Caymans in a heartbeat, where they already have an office.

Sometimes it is better to be happy with what you got and not getting greedy. That freaking little former city organizer that promotes the wind fall tax on oil companies must be out of his mind.

Yes, Oil Prices Can Actually Go Down

I am going to install a propeller on the back of my truck that drives my car. The stronger the wind blows the faster the propeller will spin and the car will just zoom along. Or does it? May be only backwards? Oh, then I got to install the steering wheel and the headlamps on the backside of the car? Idea, anyone?

Exxon's Record Taxes, Capital and Exploration Spending in Perspective

Noteworthy indeed

The T. Boone Pickens Approach

Fitz,

All the arguments you bring forward could have an alternative explanation. Let me pick up some:

1.) Glaciers melting

Have you recently looked at one? Have you noticed how dirty they have become almost to the point of being hardly recognizable. (I was at the Grossglockner Glacier/ Austria just two weeks ago). There is a lot of dust and dirt from air pollution that precipitates on the ice and accumulates there ove time. Those dark particles absorb a lot of heat from light or IR radiation other than white reflecting snow or ice and this effect lets the surrounding ice melt.

No connection to CO2 though.



2.) Increase of storms and insurance claims

There may be undulating active and less active periods of storm activity. I am not sure if the record taking about storm activity was all that accurate in the past. Galveston went under in the 1900 hurricane because people were not even aware that something bad was coming. I claim the accurate history of storm activity is relatively short.

A spike in insurance claims has more to do with the increasing density of the population and the idiocy to let people build homes at the shore lines of the Gulf of Mexico and even worse below the water line such as in New Orleans.

Again no connection to CO2.



3.) Increased drought

I believe that during the Great Depression the Midwest was called the dustbowl. So what has changed ever since? Again an increased population density causes more publicity and media attention today if there was a drought.

Impact of CO2? Actually I have no good grasp on droughts.





4.) High summer temperatures in cities

High temperatures were already a subject of a song of the 70’s “Summer in the City”. So this is not a new theme. You are actually confirming the point that I was making. The cities have a microclimate that is impacted by reflective radiation of solid surfaces. Some of it is picked up by temperature meter stations.

Impact of CO2?

Only if you see the same temperature increase reported in the city in the cool woods surrounding the city. Talk about that.


5.) Ancient CO2 enclosed in ice cores

Again I repeat that the correlation of CO2 with warm periods is not proof that CO2 is the cause of a warm climate. It could be a byproduct of high activity of plant and animal life. You did not make an argument against that.


6.) Acknowledgement of global warming by vast majority

I don’t give a damn about that. I have been long enough in the scientific community to understand that the goal is always to get the next investigation project funded. So you got to assume there are a couple of people whose interest is to come up with results that fit their needs and keep the fire alive, while the rest of the population is just copying.

Ever heard of the king that was naked and every one of his cronies consented, that his clothes were really nice. Only the fool dissented…..



7.) The changed opinion of GW Bush on global warming

I think you are gravely mistaken, assuming that GW has changed his mind unless you have talked to him personally and he told you that. GW is not that way, that he is wavering that easy.

However he may have recognized that he will not get any more bonus points from the world community by holding on to his opinion. At this stage of his career he is more concerned what the lasting picture of him will be in the history books. So he gives in. There is no risk for him. What has he got to loose?


Your turn.
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Why I'm Not Buying Oil's Recent 'Correction'

The demography of the world runs against theme of the blog. Somebody elsewhere suggested that if China and India had the same per person consumption of oil like the Americans, the known oil reserves would last less than a year. Now that is scary.

I am not impressed by short term corrections.

The T. Boone Pickens Approach

The Old Wizards Comment is a great reminder that only one thing should count in this discussion of global warming, namely facts and not opinions. There is no place for religion or ideology in particular if it leads to the suppression of observations that run squarely against the consensus of some self-proclaimed experts that all have an agenda.

There are obviously lots of ways to look and interprete observations. One of the problems in this discussion is that the change of the KPI ‘world temperature’ is very small compared to the daily fluctuations and its average changes only slowly if at all. This is stuff for endless investigation projects on taxpayer money.

Add ideology and you are in the middle of junk science.

It does not help the case if long terms statistics from the last 150 years of increasing temperatures are presented from stations that have been encroached by urbanization over time and a good deal of the measured temperature increase is due to reflection of heat radiation form surrounding solid surfaces.

It does not help the case if the fundamentals of heat adsorption by the ‘greenhouse gas’ CO2 are neglected. CO2 has only two discrete absorption lines in an infrared spectrum where the wave lengths range over three orders of magnitude. Meaning CO2 cannot have a meaningful effect on retaining the overall IR heat radiation from earth.

It is not enlightening to drill ice cores and correlate ancient CO2 with warm periods. We all know there were warm periods that spurred growth of plants and animals. A high activity of plant an animal life may as well be correlated with high CO2 content in the atmosphere. But was CO2 the cause of the warm period or just a byproduct?

If you believe in this or not, Al Gore and his ilk is becoming increasingly meaningless in the discussion on energy conservation. That issue has moved up the rank to a national security issue.

The T. Boone Pickens Approach

It has been stated earlier that a European person uses only half the energy that a US person consumes. Having lived in Germany most of my live I can tell that the standard of living because of that does not necessary feel inferior to what the Americans are used to.

So, the Germans are more happy because they spend less energy? Hell no!

Using less energy does not save money because it must be spent elsewhere. But at least it minimizes financing some of the not so well-meaning oil or gas exporting countries. (Think about this for a second. In what other sector of the economy do you find a supplier of anything that can afford to despise his own client?)

The charm of saving energy is that it can be done with means generally available to the public. Experience however shows, that the population needs to be forced by regulation to buy into it, because energy conservation is expensive to begin with. But energy conservation measures also provide jobs, inspire invention and technological advance and they have a lasting effect too.

One of the striking differences that I faced on my transition into the US ten years ago was the construction standards of the homes in this country. Just a few thoughts from what I remember from my former life.

Unlike in the US it is hard to find a house in Germany that has single window or door panes. Normal standard are tight closing windows and doors with two or three panes.

By far most of the houses are built in brick and mortar. The materials used have to comply with a certain standard to minimize heat losses. Bricks used in new built houses are 2.5 ft thick. There is another half foot of insulation on the outside of the walls plus a layer of a mineral cover. The inside of the roof is also insulated (plus a vapor barrier to prevent condensation of humidity under the shindles). A basement and insulation under the floor and basement walls helps to restrict heat losses to the ground.

Ventilated air may be heat exchanged so that warm air leaving the house warms up incoming cold fresh air.

Houses now let for rent need to have a thermographic certificate, that proves there are no heat leaks. Else, the renter is entitled to cut its rent.

Solar technology with collectors on the roof is often being used to make warm water.

Heat pumps (the reverse of air conditioning) are sometimes used to heat houses. Heating homes is in Germany more common than cooling. Cooling is more expensive than heating and an excellent heat insulation in those houses is all the more important.

The usage of heating oil is increasingly being replaced with NG, which burns cleaner anyway. NG frees up the place for an oil tank in the home but requires connection to a local gas line or a LNG tank in the garden. The heating furnaces must have minimum efficiencies dependent on their capacity. The efficiencies measured by stack temperatures, CO2 and CO emissions are mandatorily inspected every year and the furnaces have to be fixed if they don’t comply with the regulations.

Stacks have to be insulated or made of stainless steel, since the exhaust temperatures are generally low and condensation of humidity (corrosive due to SO2 traces in gas) must be prevented.

I owned an alternative place for wood fire, that was actually designed to leave the heat in the room other than pulling the heat out of the room like any open fire place, that can be found in US houses for show only. That worked wonderfully, but made a lot of work since logs had to be cut and split and the ash removed.

Because of those standards and the way houses are traditionally built, the substance of the buildings is about 2 -3 times as expensive as a rafter house of the same size in the US.

The Americans want to be like the Europeans? Welcome to the new world.

The T. Boone Pickens Approach

I am sure messiah O. will be able to left handedly override the first and second law of thermodynamics and make energy out of little more than nothing. We only have to wait until after election and everthing will be fine. So be patient!

What's Behind the Slide in Oil and Commodities?

Compelling. Good one.

'Pickens Plan' Comes in the Nick of Time

I applaud Mr. Pickens for his initiative. The problem with wind power however is, that it is inherently unreliable. In order to cover a baseload demand there must be held in parallel conventional power generation in hot stand by such as cole of NG fired or nuclear to cover that demand. Windpower always comes second after conventional unless we find a way to store energy and balance out energy generation peaks and troughs from wind. If you have sink your money in conventional technology first you only can calculate the profitablity of windpower against the saings in variable cost to operate conventional power generation. Given the example of Germany having promoted wind mills for two decades wind power must then be heavily subsidized to be viable. Then I would say this is no big deal. Better look for nuclear technology. There is no better use for uranium that burning it up.

Gore's Renewable Energy Challenge, And How It Would Shift Investing

I guess one of the reasons that Algore came up recently with this hysterical proposal to replace all carbon based energy sources by renewable sources within ten years is that he cannot cry wolf for another ten years and nothing really happens.

He looks better if he proposes to replace all the conventional working power assets in that period. Then he can claim, see, I salvaged you little guys. He has to hurry before the consensus community finds out that the king of carbon footprints is actually naked.

The the 10,000 ft2 mansion, the private jet and and his motorcade that are running on CO2 credits have already been mentioned.
This guy has such low moral standard that even if he was right in all aspects I would it not take from him. Not a word. Get out of my life!

Dont get me wrong I am all for energy conservation but not for the wrong reasons and not with those phony UN implications. This will only drain our pockets and line the pocket of some selected few.