Tuesday 27 November 2007

[FIN] Neljän hengen Thaimaan matka

Kimmo Klemola, joka toimii Lappeenrannassa kemiantekniikan yliassistenttina, on käsitellyt esityksessään Suomen liikenteen tulevaisuuden polttoaineita.

Esitys on silmiä avaava kaikille vaihtoehtoisia polttoaineita sataprosenttina öljyn korvikkeena ajatteleville.

Esityksestä selviää kuinka lähellä esim. me suomalaiset olemme paljon parjattuja sikailevia jenkkejä öljyn kulutuksen suhteen, ja kuinka vähän merkitystä esim. biopolttoaineilla on mittakaavallisesti ja päästöjen vähentämisen näkökulmasta.

Lopussa esityksessä on myös kaksi kalvoa, jotka hyvin tiivistävä kaukolentomatkailun totaalisen eettisen kestämättömyyden nykyisten päästövähennystavoitteiden valossa:

Neljän hengen Thaimaan matka
  • Kuluttaa 4 617 litraa verran raakaöljyä.
  • Aiheuttaa 6,2 miljoonan litran hiilidioksidipäästöt : 11,4 tonnia CO2
  • Hinta olisi 3 763 euroa suurempi, jos polttoainevero olisi tieliikenteen polttoaineverojen suuruinen.
  • Vastaa 168 vuorokauden tauotonta auton tyhjäkäyntiä.
  • Vastaa 57 290 km tavallisella perheautolla ajoa.
  • 4,95 hehtaaria ohrapeltoa tarvitaan tuottamaan vastaava bioetanolimäärä.
  • 29 683 limppua saataisiin ko. ohrasta.
Tuon pitäisi pysäyttää miettimään. Etenkin tuon hinnan ja ajattujen autokilometrien.

[FIN] Öljyn kysyntä kasvaa - tuotanto ei (HS)

Tämän päivän Helsingin Sanomista (tilaajille aukeavasta palvelusta tai painetusta lehdestä):


"Maailman käytetyin energianlähde, juuri nyt kaikkien aikojen ennätyshinnoissa oleva öljy, kattaa lähes 40 prosenttia maailman energiankulutuksesta. Liikenne on täysin riippuvaista öljystä. Nykymuotoinen maailmankauppa ei olisi mahdollista ilman öljyä."

"Kun öljystä tulee yllättäen pulaa, nopeimmin tarjolla olevat vaihtoehdot otetaan surutta käyttöön, vaikka ne olisivat ilmastolle huomattavasti öljyäkin haitallisempia."
Lue kokosivun juttu päivän (27.11.2007) Helsingin Sanomista.

World Top Oil - scratching the surface

Financial times has published a useful, if somewhat confusing oil map:

click for a larger flash based map

The producer/consumer maps need a bit of explaining:

Production is for all liquids, including other than crude oil (distillates, natural gas liquids). This means that the production figures can be inflated for a while, but cannot be sustained at these levels for longer periods by pumping "other liquids" than crude oil. It is useful to remember that out of the 86 million barrels of oil produced each day, more c. 73 Mbpd is crude oil. The rest is other liquids. That means 85% needs to come from actual crude oil and that production is staying level at best, or shrinking. Other liquids cannot fill this gap forever.

Reserves is next interesting column. There are various different levels of "proven" oil reserves (P1, P2, P3) for crude oil reserves. They can be summarized as follows (from Jean Laherrere):
  1. Proved 1P - at least 90% probability
  2. Proved + Probable 2P - at least 50% probability
  3. Proved + Probable +Possible 3P - at least 10 % probability
However, to make things more confusing, some people do not use the definition of geological probability for the existence of an oil reserve, but vague assertions like:
  1. Proved P1 - reasonable certainty
  2. Probable P2 - more likely than not
  3. Possible P3 - less likely than probable
So, which definition of a reserve is FT using? Based on the numbers for Saudi Arabia, it looks like they are using official and knowingly inflated figures given by the countries themselves. These figures were supposed to be 1P figures (from the upper set of definitions), but based on several analyses they appear to be something completely different (i.e. artificially inflated).

So in summary: the reserve figures given, esp. for Middle East countries are likely to be higher than in reality. That is, probably less oil exists than what is claimed to. There is no 100% certainty on this, as the real data is the national secret of each country and knowing the exact amount of oil in place is not trivial.

The next image, is for oil consumers. This is a bit more simple set of figures. However, even here there is a caveat. USA is undoubtedly the biggest consumer. Still, even from that figure, part of real US consumption is missing. Why? Because USA produces most of their purchased goods outside it's own borders, esp. in China. It has been estimated that roughly 1/4 of China's emissions is actual outsourcing from consuming regions (namely OECD). So, when China is using oil, roughly one fourth of that is actually used directly to manufacture and transport goods to USA, Europe, Japan, etc. BTW, this is after balancing the trade in the opposite direction (OECD countries manufacturing and shipping goods to China). So, in reality direct+indirect oil consumption for Usa, Japan, Germany, Korea, Canada & France should be much higher and the share of China lower. Keep this in mind.

As a side note, it is perhaps interesting to consider, that US Department of Defense (i.e. the military + navy + airforce) is the worlds biggest single consumer of oil (excluding nations). And if one thinks what important function US military has been and is serving in the Middle East (oil protection), then one could say that consumption should be equally divided by all consumers in the world (at least the OECD countries benefiting from this protection).

The last image is that of oil movements. This is perhaps the most unfortunate image, because it only shows oil from the point of origin to the end destination. The actual routes are missing! What you don't see is how much oil is piped and through which geographical areas. For that you need a pipeline map (not up-to-date, from year 2003).

EU, Africa & ME oil pipeline infrastructure in 2003

You don't see how much oil passes in tankers through the Straight of Hormuz and various other chokepoints. Hormuz is especially important in geo-strategic terms to OECD countries, esp. USA and Japan, but also most of Europe. If Hormuz flow is cut (say a war with Iran), say bye-bye to much of the oil. This is crucial to keep in mind, when thinking about oil movements. It is also quite obvious one of the reasons, even if not the only reason, why USA is in Afghanistan (pipelines), Iraq (oil fields + pipelines) and is looking hard at Iran (fields, Straight of Hormuz).

Major oil choke points and the importance of Straight of Hormuz

So, the usual caveat applies. When looking at data. Check the sources and think about what they mean. Otherwise numbers can deceive. BTW, this warning applies also to the writings of this blog, even though attempts are made to convey truthful information. Just like at Financial Times.

Friday 23 November 2007

[FIN] Maailman öljyntuottajat ja -kuluttajat

Joskus yksi kuva kertoo kaiken, mitä pitää tietää:

Kun mietit öljyä, ÄLÄ mieti öljyvarantoja (miljardeja tynnyrejä öljyä maan uumenissa), mieti tuotanto- ja kulutusvauhtia (miljoonaa tynnyriä päivässä).

Kun tätä tarkkailee vielä alueellisesti, alkavat kipukohdat olla aika ilmeisiä.

Lisää aiheesta ensi viikolla Helsingin Sanomissa.

Thursday 8 November 2007

Oil - Who produces & Who consumes?

Visualization courtesy of NY Times, patched together:

Click for a larger view

When trying to understand world politics, this is a good image to come back to. It does help understand a lot of the things going on today.

As for US and their eagerness to meddle with the most oil rich countries in the world:

Click for larger image

Wednesday 7 November 2007

IEA - energy needs gargantuan - Coal only way to go

Today's four trend signaling important news:
  1. Next 10 years critical for global energy supply
  2. Energy agency urges higher oil inventories
  3. Coal in 3 nations could undo much of world's efforts
  4. Surge in oil prices not just speculation
In plain English:
  • we are running low on our inventories (short term interim storage)
  • we are running out of production capacity (oil to use)
  • growth of consumption is too fast (we can't meet demand)
  • price is going through the roof (breaking historical inflation adjusted price within year or two?)
  • coal use is increasing in developing countries (800 new coal power plants in next 20 years)
  • in addition coal use may need to be increased to mitigate part of oil shortfall (more coal)
  • all of this is likely to put the climate into a really bad state (coal is a killer for climate)
  • we are (have?) running out of time on energy transition & the climate (minor corrections and industry self-regulation won't be sufficient anymore)
Now, this is all old news for those who follow the news with any diligence.

Why this is news today, is because the normally conservative International Energy Agency (IEA) is now saying the same.

In short, the time for peak oil denialists and climate laggards has basically ran out.

What are the options available?

  1. Cut energy consumption radically, cut GHG emissions radically, initiate an ordered powerdown, instantiate the Rimini Protocol and start planning for a no-growth economy.

  2. Cut energy consumption radically, move to super-high efficient technology at historical record speed, do NOT move the energy savings into new economic endeavors (i.e. cut down on absolute energy consumption as well), install carbon capture on all existing and new coal plants at a speed & cost that seems unimaginable (without increasing electricity costs painfully), find not-yet-existing oil alternatives and scale them up fast, move growth radically more from material manufacturing sector to service and immaterial goods sector.

  3. Risk everything. Business-as-usual. Hope the markets will fix everything and that we will rebound fast from whatever chaos we find ourselves in. Brace for and learn to live with climate and energy chaos in the interim.
Now, both of these options are daunting in size and if the current indication about climate/energy predicament is any indication of the transformation speed required, then the time is also very precious commodity.

It seems that now we are again standing at a fork in the road. Which way do we go? If history is any indication, BAU (Business As Usual) it will be, perhaps with some resources wars thrown in (this is common at the end of commodity bull cycles when finance markets start to cough).

Whatever the choice, we must choose or reality will do the choosing for us.
"Reality is that which, when you stop believing in it,
doesn't go away.
" - Philip K. Dick

Tuesday 6 November 2007

The Disease of Pathological Impartiality - Cui bono?

Media and journalism needs to re-awaken to the 21st century.

The old ethos of impartiality, always offering at least two opposing sides of view, is dead. It does not work anymore. Not sure it ever really did, but it surely does not work today.

Media has been pathologically impartial, when it comes to reporting facts. It needs to cure itself of this disease.

Impartiality-automaton has been used, abused and twisted by lobbyists, PR agencies, politicians and corporate spokespeople to the extreme. It has almost completely broken news reporting and any resemblance to what might be called 'truth' in all matters of almost any significance.

Professionals know, that in order to instill a doubt in the minds of men, all they need to do is, is to cast a shadow of doubt, even if only a fractional one.

When scientific facts (say with 99.999 probability) and the fractional doubt (with 0.001 probability) are both presented at the same time, only a few tricks of the rhetoric are needed and readers see the situation as undecided (50%/50% probability).

This is a classic formula of PR used now for already decades, but it's prevalence from politics to science is now so pervasive that journalists should start with that as a given.

Journalists should not just report facts and then automatically tack on an opposing view just for the principle. They should also give some sort of weighting to each view (e.g. 99% scientific consensus, and 1% for-paid unscientific loonies).

If they do not report any weightings, they are leaving out important facts and giving into the fallacy of economy with the truth, even if only due to proof by ignorance.

Naturally one should not fall into dichotomic thinking here either. Nobody is asking to only report scientifically valid facts. But when reporting utter nonsense (in scientific terms), it would be newsworthy to report also the fact that the piece in question is in fact, utter nonsense. After this, it is especially important to report this belief and those who believe in it. For added points, one can report 'why' they seem to believe what they believe, in spite of all the facts.

That is all that is required: calling a spade a spade.

When not doing so, journalists are giving into and propagating outright lies and moronic half-truths, because they are either too stupid or too lazy to find out for themselves.

And if the journalists, whose number one rule is to fact-check, cannot be counted on to check the facts, then can we really assume the readers to do so?

Unfortunately, as long as the media does not perform it's 21st century function of reporting the truth to as large extent as possible, the burden of checking does fall upon you, the reader.

So, the next time you read a report where about PO or AGW, check the facts. For yourself. Check the people who propagate them. Check the sources of peer review. Are the genuine? Check if the authors have a vested (economic) interest. Check who benefits if you believe in their agenda. Ask: cui bono?

How does this apply to PO? There is not a single scientific, peer-reviewed and publicly available data/empiricism based argument that stands against peak oil.

Ever wonder why?

Why are all the arguments against PO ad hominem, rhetorical tricks and with very little data as proof and absolutely no scientific peer review?

Ever wonder why big IOCs most vehemently deny peak oil? Do you think it might be in their self interest to do so?

When you ponder these, remember the old Sherlock Holmes motto:
"When you have eliminated the impossible, whatever remains, however improbable, must be the truth."
Not too surprisingly, the overall principle of filtering out the pathological impartiality of the mainstream media applies to Global Warming debate as well:


When the news starts to spread

My cynical view on this world has caused me to fall back on a few principles when it comes to predicting the "what next". Some of these are human nature, history and "when it appears in financial publications". The latter might sound a bit off track but let me explain. In my view this world (western world that is) is shaped by money and the money business. We can get upset about this but I see it as a thing we have to live with.

The moment Peak Oil or energy shortages begin to appear in financial blogs or newspapers the time is there for things to start changing. This morning I stumbled across a Dutch financial blog called Blikopdebeurs. The current home page features a text on Matthew Simmons and a few pages down the history line has an interesting article on investing in precious metals where PO is mentioned as well.

When financial analysts begin to think, read and write, investors start to read and act and the world is honed into a new shape. Maybe this time no honing but chopping with a blunt ax. When investors act we will feel it and when we finally feel it we (the people) will do a lot of things among which panicking.

Now we only have to wait for major newspapers to get the green light to start publishing the ins and outs and finally I don't have to answer questions like "if this is going to happen why don't we read about it?".

Another believe system debunked at the same time?

Monday 5 November 2007

Russia - Can it produce and export oil that Europe needs?

The above image is from Jeff Rubin's (CIBC) October 2007 presentation OPEC's Growing Call on itself (PDF). So, clearly not everybody agree that Russian can export oil that the world is expecting it to.

In addition to the above, this news which has been circulating for 2 years now:

Russian oil output could peak .... in 2010..... Russian Industry and Energy Minister Victor Khristenko said.
The reinstated this October in International Herald Tribune:
The oil and gas fields feeding this bonanza are running dry. Russian gas output has leveled off; oil production is expected to peak by 2010. Russia has more gas and oil, but its energy sector has to make the right decisions now to tap new fields. Western energy companies, whose capital and know-how will be essential to sustain Russian oil and gas production, have felt distinctly unwelcome in Putin's Russia.
Coincidentally, Rosneft is also renegotiating their deal with China after 2010:
State-controlled Rosneft (ROSN.MM: Quote, Profile, Research), Russia's largest oil firm, said on Tuesday it will not renew its existing crude oil supply contract to China after 2010 unless China offers better terms.
There has also been discussion about overstated reserves with Russian OilCos.
Mitvol was visiting analysts with several banks in the United States who hold investments in companies operating in Russia, warning them about the dubious reserve accounting methods.
Then again, there's been discussion about Russia capping it's production voluntarily. High prices really is good for Russia (and esp. Putin's cabal):
So Russia may be about to cap its oil production just when the global community is looking for it to produce more oil. Of course, that is the global community's problem, not Russia's.
As for actual export data, exports did fell in 2006 2.4% according to Prime-Tass news agency (article not available on web anymore). Rian reported a 1% fall y-2-y for 2006 exports for Russia.

However, according to Alexander's Gas & Oil Connections, Russia's 1-8/2007 oil exports grew by 4.75% compared to year earlier.

So, for now, Russian exports of oil are still growing. However, if they start to decline soon, it'll be interesting to read the analyses as to whether this will be involuntary (i.e. geology of peaking) or voluntary, in order to support Putin's goal of doubling GDP by 2010 - a goal which Russia is unlikely to meet.

So you want to do something concrete, eh?

This blog is mostly about reality, numbers, modelling, policity, geopolitics and technology.

It deals very little with practical transformation of current fossil fuel use to something more sustainable.

Somebody might say that's an oversight. We'd like to consider it focus.

However, to break the constant stream of not so upbeat news, here's a list of 50 things that will save the planet from UK Environment Agency.

It's worth reading, as it'll definitely give everyone simple concrete ideas to do. It'll also make us think about more difficult changes in our lives. Changes that are very likely - unavoidable. Better to get accustomed to them in advance, right?

Sunday 4 November 2007

So you like skimming presentations? Here's a few...

Who has time for in-depth article reading or *gasp* scouring through academic journal pieces these days?

Many of us are condemned to the world of powerpoint presentations and quick skimming of overall trends and some basic facts.

So here's a few presentations, on peak oil related matters, hand selected for you from various recent sources. Many stay on an overview level, so don't expect technical details, scientific proof of each argument, although most are heavy on graphs and some on numbers.

These are powerpoints after all.

  • A Hungry World In Search Of More Oil - Matthew Simmons, Nov. 2007, 26 slides, 1.8 MB
    Reserves, production plateau, peak timing & oil price = overall view and current reports explained: we are running short on time for big mitigation efforts
  • World Oil Shortage Scenarios for Mitigation Planning - Robert L. Hirsch, Oct. 2007, 43 slides, 1 MB
    Shape of the peak, decline rates, GDP growth, resource nationalism = prepare for different kinds of peaks
  • Aviation and Peak Oil - Why the conventional wisdom is wrong - Roger H. Bezdek, Oct. 2007, 27 slides, 1 MB
    Availability, price projections and alternatives for aviation fuel & aviation growth risks from GDP downfall = aviation unlikely to grow projected 100% in next 25 years, big risks ahead
  • Alternative World Energy Outlook - Ludwig-Bölkow-Systemtechnik GmbH, June 2007, 24 slides, 1 MB
    Timing of peaking of oil, gas, coal & nuclear production & alternatives to fill the gap = more than oil may peak in coming decades, need to ramp up alternatives
  • Future of Oil Supply - How fast (not how much) - Energyfiles, April 2007, 57 slides, 2 MB
    How global peak happens, why drilling more is not solution, how production matters more than actual reserves = not enough production capacity left to continue current demand growth
  • Beyond a Thousand Barrels a Second - Peter Tertzakian, Sept. 2007, 57 slides, 4 MB
    Uniqueness of oil, consumption growht, fuel obesity, depletion, China, population, suburbanization = big challenges ahead, regardless of what we do
  • Implications of Peak Oil for Climate - Pushker Kharecha and Jim Hansen, Sept. 2007, 28 slides, 1 MB
    Peak oil projections, CO2 emissions, role of coal, climate change, scenarios = climate may be ok, if we don't burn coal
  • How Good Is Our Bet on Biofuels? - Kyriacos Zygourakis, Sept. 2007, 34 slides, 2 MB
    Various liquid biofuel types, energy required, scaling of production = important for mitigation, but not enough to fill gap left behind by oil peaking
  • Future Energy Challenges - Matthew Simmons, 2007, 19 slides, 3 MB
    Energy infrastructure, oil & gas peak, challenges of transformation = no plan B for energy, experts have been wrong, big changes ahead.
  • Peak oil and Transition Towns, Rob Hoskins, May 2007, 76 slides, 2 MB, PPT file
    What/when peak, what it means for food, agriculture, transport, jobs. How cities can cope = plans for mitigation on town/city level
  • The Challenge of Peak Oil - Richard Heinberg, April 2007, 27 slides, 2 MB, PPT file
    What peak, oil/gas/coal issues, alternatives, scaling of production, hybrid cars, conservation, green issues = opportunities ahead
  • The Next New Energy Thing - Ron Swenson, Aug 2007, 72 slides, 8 MB, PPT file
    Peak, renewable fiels, energy resource vs field, thermodynamics, mass transport = very big transition, we are not doing enough. Economics will lose out to physics
  • Top 10 Reasons why Peak Oil arrives sooner rather than later - Steve Andrews, Mar 2007, 23 slides, 6 MB PPT file.
    Consumption, peaking patterns, geological reality, political risk, overstated reserves, growing producer consumption, unconventional oil does not scale fast/high enough, net energy will impact recovery ratio = Hopes about 2050-2100 peaking is wishful thinking.
Do note that above present the views of the authors and may not be fully shared by the Energy Standard team, or you for that matter. However, understanding of the various points of view on peak oil and it's mitigation is crucial to understanding the reality and how it is likely to unfold.

There is no single truth, so try to read many.

So you like listening (to podcasts)?

To those of you with little time to read, but more time to listen, here's a few interviews & podcasts about current status of Oil peaking (all in mp3 format):

That should be enough to get started. For more podcasts, check Global Public Media, The Last Oil Shock blog, older ones from The Watt, EV World energy podcasts, Platts audio features.

Friday 2 November 2007

Can't drill your way out of geological depletion

For people who often claim: "We'll just drill more!" this graph should explain some of the basics of how reality works:

(click image for a larger version)

The image clearly shows, that while efforts to drill more have grown exponentially, the actual production has still decreased at about linear speed since mid 80's.

It's a race against infinitely reciding horizon. You can't catch up with it, but you can slightly slow down the speed at which it distances itself from you.

As a pattern, this should also remind you: don't try to fix geological natural reality with economics. Reality will always win.