Saildog's Comments

Mind Over Matter: Oil / Coal Dependence vs. Alternative Energy

Wed, 16 Dec 2009 02:42:44 -0500

Agreed, it is insurmountable. Even if everyone was in agreement (instead of racing furiously for the lowest common denominator) transitioning to renewables would be impossible. Nothing meaningful will be done about climate change and peak oil. As amply illustrated on this page most people haven't a clue.

I am rapidly coming to the conclusion that we should do nothing and enjoy what remains of business as usual. Maybe 5 years?

On Dec 15 10:04 PM EVNow wrote:

> Finally someone is writing about the elephent in the room.
>
> Here is an article on this "renewables gap".
>
> theoildrum.com/nod...

Mind Over Matter: Oil / Coal Dependence vs. Alternative Energy

Wed, 16 Dec 2009 02:38:30 -0500

You are deluded and/or ignorant. Learn some humility and some science. Open your mind.

On Dec 15 05:23 PM Tony Petroski wrote:

> From the article:
>
> "The harsh reality is that, whether one chooses an accelerated energy
> transition to Alternative Energy either because of climate change,
> or peak oil..."
>
> You could have added "or all those who have written countless books,
> articles and have carved out political careers preaching the phony
> climate-change religion that is now being exposed for the hoax it
> is.
>
> Mr. Macdonald. Events are changing by the day. This is the age
> of the internet and it's possible to produce some wonderful reporting
> based on the truth rather than cling to the comfortable global-warming
> scenarios that had you folks peddling alternative energy as a way
> to reduce carbon emissions. If it turns out that the science was
> bogus, and we are actually producing global cooling, then let's get
> on with clean energy technology that actually increases our carbon
> output so we can warm up the planet and prevent the next catastrophe.
> Are you energy folks completely unaware that this hoax is unravelling
> rapidly?

Mind Over Matter: Oil / Coal Dependence vs. Alternative Energy

Wed, 16 Dec 2009 02:37:06 -0500

You clearly do not understand energy. Learn about the first and second laws of thermodynamics and do some serious reading about the social aspects of energy.

On Dec 15 01:57 PM Jigar Shah wrote:

> Good article, but I disagree with the notion that there will not
> be enough energy to go around. As you state, we will be building
> alt energy infrastructure on the backs of coal and natural gas.
> That being said, there is plenty of unused capacity off-peak without
> building more coal plants and natgas plants. You will have to burn
> more duel, but that should reduce energy prices as the capacity factor
> of these units go up. The "back side" of the alt energy lifecycle
> as you say which is when you get the most gain from wind and solar
> is only about year 12 or so. We are all talking about ending coal
> by 2050, not 2020. Most of the coal plants in the US are about 35
> years old. They only have 15-20 years of life left. Our goal is
> to replace the 20,000 MWs of load growth and plant retirements every
> year from renewables through 2020 (at 35% cap factor). Then actually
> increase this number to probably 40,000 MWs per year in the next
> decade through 2050 to complete the transition. These are US numbers
> only. If we think about this from an incremental basis and not on
> the existing stock, this is quite feasible. In 2008, 56% of all
> new capacity additions were zero-emission in the US. . . not much
> farther to 100%.

Mind Over Matter: Oil / Coal Dependence vs. Alternative Energy

Wed, 16 Dec 2009 02:35:01 -0500

Good point. I don't know the answer, but the markets will not do it. Price signals are way too late.

On Dec 15 11:26 AM User 353732 wrote:

> Who is the "WE" entrusted with making all the decisions about global
> energy mix, capital allocation and the transition to a future that
> only the self anointed few have the privilege to behold with clarity?
>
> Is it the corrupt, depraved and monumentally dishonest US Regime
> or the morally bankrupt and vastly greedy Chinese Politburo or the
> craven self aggrandizing and hugely vain bureaucrats of the EU or
> perhaps it is the Maximum Leader of Venezuela or Russia or Iran?
>
>
> I take it "We the People" are expressly excluded from this planetary
> decision making that will profoundly influence every economy and
> every mortal?
>
>
> The only morally just and intellectually honest basis for decision
> making is the aggregated choice of free people using free and informed
> choice ,operating in free, fair and fast markets.

Copenhagen: 'High Water Mark' for the Global Warming Movement?

Sat, 12 Dec 2009 09:04:12 -0500

Thanks Wildebees

Actually I need no gratuitous advice from you. And BTW science can be settled - until some other credible theory displaces it. Cosmic rays were no part of the climate sciences courses I read as part of my Masters degree.

On Dec 11 10:59 AM Wildebeest wrote:

> On Dec 10 05:51 PM Saildog wrote:

Copenhagen: 'High Water Mark' for the Global Warming Movement?

Thu, 10 Dec 2009 17:51:58 -0500

Why does Seeking Alpha give rubbish such as this the free oxygen of publicity? Balance? Media giving a few deluded nut jobs space to air this sort of nonsense is highly damaging to an issue that is serious. I am tempted to ignore it so as not give an credence to this sort of idiocy, but I couldn't. So here is a rebuttal:

Climategate? This is the Abu Ghraib of the Climate Science community. A few bad apples in the night does not mean the whole US army is bad.

Cosmic rays? This sounds like it came from a 1960's school boy sic-fi mag. In fact the sun has nothing to do with it, the variability is tiny.

I am not going to get into the science. It is easy, basic and settled. What I am going to talk about is delusion, ignorance and denial. The latter could have psychological underpinnings, with the authors inability to connect his own reality with an issue that is "out there", but that jars. There is also arrogance and hubris, not to mention greed.

The vast body of science supports the science behind AGW. It is supported by no less than the academies of science of all of the G8 nations and those of India and China as well. These organisations include not only the US Academy, but the Royal Society in the UK. Both these bodies are known for the conservatism and have outstanding reputations for principled adherence to truth and honesty. All these academies have jointly called for recognition and acceptance of AGW and urgent action to address it.

Yet the author of this idiotic little piece has taken it upon himself to declare that "cosmic rays" are to blame. It is laughable. And he is indeed deluded.

Peak Oil Demand

Thu, 03 Dec 2009 17:37:44 -0500

This idea of "Peak Demand" is nonsense. Supply clears demand as determined by price. If supply is inelastic (as it is - increased production beyond todays capacity is not possible because of geology, politics, infrastructure etc) demand and price will always reach a balance based on the available supply. Note that production is a flow measured in barrels per day - reserves are irrelevant. Oil has effectively become the limiting factor on economic growth, mitigated only to the extent we can use it more efficiently. Efficiency will no doubt consist of substitution with gas and other energy sources as well as technologies and living arrangements that reduce usage. However other energy types are not as energy dense or convenient (liquid over a wide temperature range). Natural gas will not power aircraft for instance. Scale and timing are all important. Solutions that take 30 years to implement are not solutions.

The first and second laws of thermodynamics, absolutely essential in understanding economics (but not - even by most economists), are coming into play. They cannot be circumvented, broken or ignored and they will determine our future.

We need to begin to think about a future not dominated by economic growth based on ever increasing natural resource consumption and destruction. The resources are simply not there. This means dramatically altering our entire frame of reference, including limits to population growth.

The Global Oil Scam: 50 Times Bigger than Madoff

Thu, 12 Nov 2009 17:04:25 -0500

What a load of garbage.

Stephen Schork: More Upside in Oil

Thu, 12 Nov 2009 17:01:12 -0500

I have no idea who Schork is, but he hasn't a clue about oil production, or about Peak Oil that he supposedly doesn't believe in. There is no dispute that high prices will enable oil to be found. That is not the point. Finding it is not producing it. Production is what matters; and it cannot be increased from the 85m barrels per day range we have been in since 2004. Note also it doesn't matter why it cannot be increased. Whether the reason is geology, politics, lack of investment, war or what ever. It doesn't matter. Peak Oil is now a past tense term and I suppose 10 years from now, when production will have drifted down by 5 or 10m bpd that Schork and his ilk will still be arguing that production can be lifted.

International Energy Association: Forced to Eat Their Optimistic Data on Future Oil Supply?

Thu, 12 Nov 2009 15:34:52 -0500

Max was 9.9mbpd during the first Gulf War

On Nov 11 06:47 PM OFWHAP wrote:

> @Oilfinder
>
> At what point has Saudi Arabia ever produced 12.5 million barrels
> per day? They have been SAYING that they plan to produce that for
> 2009, but I have yet to find data that they have ever produced numbers
> that high.

International Energy Association: Forced to Eat Their Optimistic Data on Future Oil Supply?

Wed, 11 Nov 2009 17:43:45 -0500

What a load of tosh.

KSA has likely passed peak; and either cannot or will not increase supply. It doesn't matter which, the extra production will not happen.

As for Brazil, Africa and Iraq, you can believe what you like, but I am not nearly so sanguine. Technology, lack of investment, politics and war are more than not likely to intervene.

You mention The UK, Mexico and Norway as representative of declines, almost in passing. Decline rates average at least 5%, or over 4mbpd every year. That is a new KSA every 2 years just to stay even, a statistic the IEA itself has quoted. How many new KSA's are there?

As I say - complete tosh. Peak Oil happened over the period 2004-2008.

On Nov 11 01:37 PM OilFinder wrote:

> The IEA is not being pessimistic on future oil supply.
> Once you start adding up production plans you'll see why:
>
> 1. Iraq - Proudction will increase from the current 2+ million barrels/day
> to around 10 million barrels/day by 2020. That's at least +7 million
> barrels/day in new supply.
> www.ft.com/cms/s/0/5bc...
>
>
> 2. Brazil - Production will increase from the current 2+ million
> barrels/day to around 5.7 million barrels/day in 2020. This does
> not include discoveries made and gone into production in the interim,
> of which there will be many:
> www.thaindian.com/news...
>
>
> So far we're at +10.5 million barrels/day
>
> 3. Angola - Figures from already-announced plans show an increase
> in production by 1.2 million barrels/day by 2015. This does not include
> discoveries announced in the interim or recent discoveries whose
> production plans have yet to be made.
> www.reuters.com/articl...
>
> So far we're at +11.7 million barrels/day in new supply.
>
> 4. Saudi spare capacity is currently around 4 million barrels/day:
>
> www.thenational.ae/app...
>
> And the former chief reservoir engineer at Saudi Aramco says they
> can sustain 12-14 million barrels/day output for 50 years:
> www.saudi-us-relations...
>
>
> So we're now at + 15.7 million barrels/day in new supply. Conservatively.
>
>
> 5. Canadian oil sands production will double by 2020. This is an
> addition of 1.6 million barrels/day:
> www.bloomberg.com/apps...;sid=aAXd0jJuIIoA
>
>
> Subtotal is now 17.3 million barrels/day in new supply by 2020.

>
> 6. Non-Nigerian West African coast. Recent discoveries off the coast
> of Ghana and Sierra Leone indicate a large new oil province opening
> up. The Ghana discovery will begin production late next year. There
> *will* be other discoveries in this area. Let's assume 1 million
> barrels/day production from this province by 2020.
> www.ogj.com/index/arti...
>
> blogs.wsj.com/environm.../
>
> investors.hyperdynamic...
>
>
> Subtotal is now 18.3 million barrels/day in new supply by 2020.

>
> I could go on with more examples. Reaching 20 million barrels/day
> by 2020 would be easy. I might even get to 25 million barrels/day,
> especially if we make some reasonable assumptions about new discoveries
> off the coast of Brazil and Angola.
>
> Now, what about declines?
>
> Let's be extremely pessimistic and assume production from Mexico,
> the UK and Noway falls to ZERO. This loses you about 7 million barrels/day,
> but we're still ahead by at least 11 million barrels/day. At this
> point you would have to lose the entire production of Russia to get
> to a measly +1-2 million barrels/day, but of course that won't happen.
> And production from the UK, Norway and Mexico won't fall to zero,
> either.
>
> I could write a much longer exposition on this, but you get the point.
> The IEA is not being optimistic. Heck, they might even be *pessimistic*.

Crude Oil and Gasoline Prices: Like Déjà Vu All Over Again

Thu, 08 Oct 2009 19:04:07 -0400

This is article was written by somebody not well acquainted with oil production. All the usual stuff is in their about price, markets and technology; and its all rubbish, since oil production has already peaked. Now the rules are different. With a supply curve that is completely inelastic, price is determined by demand only; and that in turn is driven by economic activity. The oil price and economic activity will settle into a new relationship that will remain tightly bound. As oil production drifts down and absorbs ever more inputs, our economies will shrink accordingly. Of course it will be patchy and variable around the world. Some places with energy resources will do better and others without will do worse. But overall, Business As Usual is finished. Welcome to The Longest Recession.

Global Populations to Accelerate Demands for Fossil Fuels, Renewable Energy

Mon, 10 Aug 2009 22:18:59 -0400

Unfortunately no combination of nuclear, corn, used french fry oil, wind, "clean coal" (stupid oxymoron) or any other "source" of energy can replace oil.

Efficiency and conservation will help a lot, but the greatest danger comes from the markets. How will the capital markets react to high prices?

Hidden Risk for Canadian Oil Sands: Environmentalism

Wed, 08 Jul 2009 19:28:12 -0400

With and EROI of 3 at maximum oil from tar is not really a viable source of energy. It is dependent on conventional oil (supporting the economy more generally) and gas directly. If these two commodities are ever revalued the tar sands industry will die. In the mean time the environmental cost is horrific.

Some of the posters above equate environmentalism with anti-capitalism. No doubt the there are some environmentalists who are socialists. But environmentalists care about the environment, they are not usually arguing against the economy per se. They argue that just because something hasn't been monetized that it means that it is free. If the environmental costs of the oil from tar sands operations were fully internalized it is very doubtful that the operation would exist at all. No capitalist can argue that costs shouldn't be internalized; and the costs can be determined reasonably accurately using techniques such as contingent valuation. They just aren't being counted right now.

Higher Gas Costs Lead to Consumer Pullback, Even as Spending Rises

Thu, 02 Jul 2009 08:03:51 -0400

Well, there is a surprise!

Welcome to the world post Peak Oil folks. Oil prices will kill off recovery - for ever.

Obama's Energy Bill: A Recipe for Economic Destruction

Tue, 30 Jun 2009 09:46:45 -0400

Oh Dear

Gerard Jackson has crawled out from under his stone. The real issue here is that Jackson thinks Global Warming "is garbage". He also thinks Peak Oil "is garbage".

Both are real risks that need proper management. Obama's bill is a long way from perfect, but it is a start at attempting to deal with an energy crisis that is all too real, whatever Jackson and his band of Austrian school economists think.

His arrogance is breathtaking. The academies of science of all the G8 nations and of India and China have endorsed Global Warming theory and called for rapid action. Just who does he think he is?

Oil Volatility Will Keep Killing the Economy in Waves

Wed, 15 Apr 2009 09:05:40 -0400

The most sensible comment I have yet seen from outside the Peak Oil community. This man "gets it", he clearly understand the thermodynamic and scalability issues we face.

Where it is perhaps weak is on the political and economic fronts. The fossil fuel lobby will kill this and the economy will never recover because the oil trap has sprung and we can't get out. Lower prices mean less investment, a better economy means higher prices, but that kills the economy and we revert to lower prices. The last sentence implies a cyclical economic pattern, but I doubt we will even get that.

We need both an energy and a financial surplus to achieve this. Now we have neither and we never will. Maybe it can be done. I will not be holding my breath. On the other hand if a major new oil province is found in a friendly place maybe we will be clever enough to use it wisely. Again, I am not going to hold my breath.

Rising Oil Price Could Slow or Kill Economic Recovery

Sat, 11 Apr 2009 01:07:52 -0400

I agree on the low hanging fruit theory. But increasing supply from the harder to get fruit is more expensive in both monetary and energy terms.

NG certainly can/will substitute for oil, but is less energy dense, is less transportable, will require a new distribution network and anyway is subject to its own peak. Just ask the UK. In addition it will not substitute well for diesel and jet fuel, and is also required for fertlizer production.

However it is not the physical limitations that worry me. It is the impact of high energy prices in the economy and the consequent problems in the capital markets. I am concerned that our current complex economy is not viable without cheap and growing supplies of energy.

At a macro level if a greater and greater proportion of economic output is devoted to procuring energy, less is available for reinvestment. And this most certainly will stifle growth!

That is unless we get real smart real quickly. But I see no evidence
of that.

On Apr 10 10:55 PM old trader wrote:

> Saildog,
>
> No, I don't think that oil is "just another commodity", and recognise
> that there're many factors that play into its pricing. I am a believer
> in what is currently termed the "Peak cheap oil" theory...i.e., all
> the low hanging fruit has been plucked from the tree, and additional
> supply will cost increasing more.
>
> I also find it a bit puzzling as to why NG for use as transport fuel
> is not visible on the radar scream of oil dependency solutions, since
> its old, proven technology, with definite green benefits, in terms
> of pollution.

Rising Oil Price Could Slow or Kill Economic Recovery

Fri, 10 Apr 2009 20:38:47 -0400

Old trader - it seems your view is that oil is just another commodity that the world holds an infinite supply of. Not so. Oil is all about physical flows and these are impacted not just by geology, but also by economics, politics and several other factors such as an aging workforce and obsolete plant.

Then there is the interaction between what is a vital commodity with a wholly inelastic supply curve (higher prices do NOT equal more supply) and the capital markets. The higher prices last year (along with lax banking regulation) led directly to this recession/depression. It is unlikely production will ever exceed levels achieved since Q4 2004. According to Liebigs law of the minimum oil is now the limiting factor. Our economies will languish in lock-step with oils decline.

That is unless we get real smart real quickly. But I see no evidence of that. And BTW I am no tree-hugger.

On Apr 10 10:08 AM old trader wrote:

> Btw, before I get jumped on by the tree-huggers who believe alternative
> energy is the only answer, please recall that most, if not all, "green"
> alternatives are only economically viable when compared to higher
> oil prices. Do some reading, and it isn't hard to see how many projects
> have been scaled back/put on hold because they're not profitable
> when oil is at $40/bbl. (unless they receive heavy government incentives).

Rising Oil Price Could Slow or Kill Economic Recovery

Fri, 10 Apr 2009 09:44:38 -0400

There is a great deal of assumption in here based on the thinnist of thin evidence.

1. The current rally is a bear suckers rally. A major down-leg is due in the autumn.

2. There is nothing wrong with economic growth per se; however economic growth based on ever increasing resource use (especially oil) is finished.

The world is rapidly moving toward zero or negative population growth, the reduction and rapid elimination of fossil fuel use; and relocalization. We still have some time to mitigate the pain of this transition, but it is rapidly disappearing. The later we leave things the worse the transition will be.

Spending what little time and wealth we have left on propping up the banks, AIG and GM is wasted effort.

Our remaining resources could be used to build a vibrant economy that is based on conservation, renewable energy and rearranging our living arrangements around highly local concepts - walk/ride to work, local food and factories and more close knit communities.

Why Is Oil Trading at $53 When Supply and Demand Is So Bearish?

Tue, 24 Mar 2009 07:10:31 -0400

The article would have been better had the author learned something about energy.

Why Are Gas Prices Still So High?

Thu, 19 Feb 2009 17:21:50 -0500

I am always amazed by how people irrationally explain oil prices. Go back to school and do Econ 101, especially elasticity. It really isn't difficult.

Iraq Production, Conservation Could Keep Oil Price in Check for Years

Sun, 04 Jan 2009 16:17:53 -0500

I am not so sure a distinction between "in ground" and above ground factors is relevant or even appropriate. "Above ground factors" are almost certain reinforcing feedbacks from the "in ground" reality that production has peaked.

Iraq, the major topic of the piece is itself the prime example of such a feedback. The US does not invade China over its aggression in Tibet, or Zimbabwe because Mugabe is a a worse despot than Saddam. The US invaded Iraq because of oil. It's own oil of course, but also because Iraq sits neatly between Saudi and Iran, both odious and unstable but oil rich regimes.

The American mistake was to assume that stability could be quickly and easily imposed.

Oil Futures Market: Unwinding the Bubble

Tue, 30 Dec 2008 06:33:28 -0500

Alex - this article is bunk. The reason for oils price volatility is the almost perfectly inelastic supply and demand curves (even in this very wide price band). Demand has contracted and the price has imploded.

You clearly know nothing about production. Go and read up some stats. Find out what the export land model means. Go and study the mega projects list. Learn what the implications of the IEA's 6.7% decline rates are. Understand the geopolitics of oil.

Wittering on about the price and the various costs of production is meaningless and adds nothing new to the debate.

Where Have All the Peak Oil Believers Gone?

Sun, 02 Nov 2008 01:28:04 -0500

Babak - you know nothing. That BP economist should be fired for making misleading statements.

Peak Oil is now a past tense term. Peak oil says nothing about price, only about flows. Price is one symptom of Peak Oil, and the fact that it has changed dramatically does not mean that the facts on the ground in the oil industry have changed beyond a sharp cut back in investment. Less oil is now produced every month and while production decline is relentless, it is hard and expensive to add new production.

The recession/depression we are entering is caused at least in part by Peak Oil (oil price spikes have preceded every recession since WW2). The high gas and food prices (themselves directly caused by Peak Oil) meant that people were less able to service their debt. That is at least partly why the sub prime mess started. Unlike the last major recession in the 1980's there is no new oil (such N.Sea or Prudhoe Bay) to help us power our way out of this one. So as JH Kunstler says this one will be "The Long Emergency".

We need to be thinking within the terms of a new paradigm: Zero or negative population growth, year on year reductions in resource use (we will get that anyway with oil, we do not have the choice to use more) and dramatic decreases in the size of our individual and collective environmental footprints. If we can manage economic growth within those constraints, all well and good.

One way or another we will do this anyway. We can choose to establish our living arrangements so that this is achieved with the minimum discomfort, or we can let nature impose her own limits on the parasite called homo sapiens. The latter course of action could see the human population decline to 1-2bn. The choice is ours.

The Great Oil Deception: Part Two

Sun, 15 Jun 2008 08:41:37 -0400
The other issue is that oil is becoming harder to find. Chevrons Jack find appaently cost $100m.

Brazil oil E&P will be extrordinarily expensive and the technology to drill it does not exist. New metals will need development and the cahllenge of lifting 100+ deg C oil through water at 4 deg C has not yet been addressed. I have no doubt all thes issues will be overcome, but it aint cheap.

So I accept the argumant that much of the cost is cyclical, but much is structural too. Brazil is a new oil province. Which is great, but it isn't Ghawar, that's for sure.

Crude Report Stumps Analysts

Thu, 12 Jun 2008 08:44:00 -0400
This may be the impact of the growing net (oil) export problem. Imports are down significantly from Venzuela and Mexico; and the turn around time for shipping from the Middle East is 5 times longer than from the Carribbean. Just a hunch........ It would be worth while checking where the shortfalls are occurring. If it is in the Gulf refineries I am not surprised.

This is what is known as the Export Land effect - oil exporting countries have rapidly growing domestic consumption and stagnant or declining production dealing a double blow to net exports. Globally exports of oil are down some 2m barrels since 2005.

Energy: Government Vs. Market Solutions

Sat, 07 Jun 2008 10:15:28 -0400
I agree governments make useless decisions. However in Europe where "gas" is $10 a gallon they use half or less the fuel used in the US. As a result Europe drives cards that get double the mileage of US cars, they have a better train system (in France a brilliant train system) and they are much less exposed to Peak Oil.

In contrast "the market" in the US has led to the strip mall/exurban model lifestyle that is even now proving the first casualty of Peak Oil.

The Power Failure on Wall Street

Sat, 24 May 2008 10:44:19 -0400
I too have grave doubts about the sanity of the markets, but they are always right, so I try and keep these sentiments to myself.

As for the oil price I am afraid that neither Econ 101 or Econ 201 covered that part of price theory where not only is the supply curve perfectly inelastic, but the demand curve is too.

Simple logic, visulaizing two vertical, or one vertical line (supply) and one nearly vertical line (demand) tells me that the prices are highly volatile and that more or less any price is possible.

If I woke up tomorrow (well Monday) and found the oil price was $70 I would be no more or less surprised if it was $150.

Having said that I do accept that the supply curve is vertical and furthermore I understand why. What amazes me is how many people do not accpet that it is vertical, or have no clue about where it is. That includes governments, heads of corporations and various other talking heads.

Why Oil Won't Penetrate $150/Barrel

Fri, 23 May 2008 08:23:26 -0400
Yes, but what about the people who actually want oil?