The habit of bargaining has become so engrained that statements of shortage are quite commonly read as bargaining positions leading to a price hike, rather than that you literally can’t have any. But we are now in a time when the reality of growing shortages, and in more than just crude oil, is going to start imposing such a disconcerting awareness.
I was in Botswana last week, and in two earlier posts I had mentioned the problems that that country suddenly encountered when the source for 75% of its electric power – Eskom of South Africa – started to use it as a load-sheddable part of its distribution chain. It has since given Botswana the amounts that it can expect over the next four years. From a supply of 410 MW in 2007; it will get 350 MW in 2008; 250 MW in 2009; and 150 MW in 2010 through 2012. While the country has in-house generation, it decided some time ago that it was less costly to import power than to increase internal supply. Now it will take some time to create that internal power, from coal, of which the country has a more than adequate supply. The expansion of the current plant, already in process, will not occur until 2010 , and was planned to only add 120 MW, less by then, than the lost imports. And current growth in demand has been at 5.6% per annum. It does not help that:
It has also emerged that at the beginning of this year, the desperate BPC signed a no guarantees contract that allows Eskom to cut power supplies to Botswana within as little as ten minutes notice.
Flying into Gaborone, the capital, from Johannesburg, after reading the articles that had lead to the earlier pieces, I had expected to see that there would be some impact on behavior. But, crossing the veldt, there were lace points of light that reached out as long as I could see the ground. Once landed the streets were lit, and gas stations were running normally (at about $1 a liter). Going into meetings the following morning, it seemed to have been, at that scale, an irritant. We continued to meet, and then the lights went out, and the air conditioner shut off.
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Peak Oil Overview - March 2008 (Pdf and Powerpoint available)
Posted by Gail the Actuary on March 13, 2008 - 10:57am
Topic: Supply/Production
Tags: eia, eor, FSU, introduction, oil reserves, opec, overview, peak oil, peak oil presentation (list all tags)
Preliminary data regarding oil production through December 2007 is now available from the US Energy Information Administration, so it is a good time to put together an updated summary of where we are now with respect to peak oil. The major themes of this presentation are
• The US oil story
• The world oil story
• Five myths
I have put this summary together in the format of a PowerPoint presentation plus notes. In this format, it is a multi-purpose document. You can
1. Read the post yourself, with or without my comments.
2. Use the presentation (PDF) as a handout, to give to one or two of your friends. My comments are intended to give you some more background, so you can better explain the presentation and answer questions.
3. Use the presentation for a group, using the PowerPoint format.
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Oil Drum Staff on Film
Posted by Chris Vernon on March 13, 2008 - 10:04am in The Oil Drum: Europe
Topic: Site news
Tags: ASPO6 conference, the oil drum, videos (list all tags)
During the Sixth annual ASPO conference in Cork, Ireland in 2007, Nate Hagens and I were interviewed for the event's DVD. The 5 disc DVD box set (available here) contains all the conference material and a number of interviews including ours.
Below the fold you can watch our interviews. As ever your insightful comments on the content are welcomed but we are also interested in your thoughts on video as a communication medium and what future video could have on The Oil Drum. Also see the video Luís de Sousa made last month: Olduvai 2008 movie.
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DrumBeat: March 13, 2008
Posted by Leanan on March 13, 2008 - 9:13am
Topic: Miscellaneous
The Peak Oil Crisis: The Last Spiral?
Events are moving faster and faster. Equity markets and the dollar are dropping. Oil, gas, diesel and commodities are surging as the investment of last resort.
Margin calls are endangering the financial system. Real estate values and markets are falling. Exotic debt obligations are turning worthless by the billions. Central bankers have started the printing presses and are injecting unprecedented billions of “liquidity” into their banking systems in what so far seems to be a futile effort.
One by one, however, talking heads appear on the business channels to assure us that all will be well by the “third quarter” and that this is a lifetime opportunity to buy equities which will never again be a better bargain. In recent days however, some of the tone of optimistic confidence that has obtained for the last eight months has started to darken a bit and some will even confess it might be a little longer before the good times return.
Missing from all this talk is a realistic appreciation of the role of oil in the world’s economy and the role increasing oil prices will play in the coming economic “recovery.” Although oil prices are discussed dozens of times each day, increases are nearly always attributed to a temporary flight of capital from equities into the safety of commodities. Discussions are formulated around the premise that high oil prices may be unpleasant, but are, as yet, a long way from doing real harm to the country. Eight or nine dollar gasoline in Europe is cited as proof that prices can go much higher without disastrous consequences.
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A Vicious Circle
Posted by Robert Rapier on March 12, 2008 - 7:04pm
Topic: Policy/Politics
Tags: corn prices, environment, ethanol subsidies, Food Prices, mandates, subsidies (list all tags)
A few days ago, someone here posted a link to a story about skyrocketing farmland prices in the Midwest. It really made me angry to think about the inflationary chain reaction and the vicious chain of events our politicians have set into motion with these ethanol mandates. It made me even angrier to think that the few who benefit from these policies defend their right to siphon money from the rest of us and into their pockets. (I will be the first to say that surging energy prices are a big component of surging inflation, but with the ethanol mandates we are throwing jet fuel on an already raging fire).
This all started out innocently enough. Oil prices were climbing. Our energy production was shifting to an ever greater extent to countries that are hostile to the U.S.
So, Step 1 in the chain is to propose a solution:
1. The government should subsidize ethanol production to encourage production of home-grown fuels, which will enhance energy security and create jobs in the Midwest.
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Khurais Me A River
Posted by JoulesBurn on March 12, 2008 - 9:24am
Topic: Supply/Production
Tags: khurais, megaprojects, saudi arabia (list all tags)
Khurais. It is the best of fields. It is the worst of fields. It is another chip off the old block, destined to prolong Saudi Arabia's dominance as an oil producer. It is a chink in the armor of the Saudi Oil Miracle, a symbol of a lesser future. Do tell, which is it? Amidst a lot of speculation, there are a few knowns. The Khurais Megaproject is the largest integrated development project in Saudi Aramco history. Slated for completion at the end of 2009, it includes the expansion of oil production in the Khurais, Abu Jifan, and Mazalij fields. These fields lie approximately midway between Riyadh and the Ghawar oil field, and sea water for injection will be piped in from the Arabian Gulf near Dharahan. The completed project is stated to have a capacity of 1.2 million barrels of oil per day. This article will present an early look at the Khurais development using satellite images and a review the scant data available for Khurais in an attempt to assess its prospects in light of much skepticism.
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DrumBeat: March 12, 2008
Posted by Leanan on March 12, 2008 - 9:12am
Topic: Miscellaneous
Oil crosses record $110, despite supply rise
NEW YORK (CNNMoney.com) -- Oil prices rebounded to another record high Wednesday afternoon after initially plummeting when a government report said supplies of crude and gasoline had risen much more than expected.
In afternoon trading, U.S. light crude for April delivery surged to a high of $110.20 before closing at $109.92. Oil had traded as low as at $107.09 following the report's release on Wednesday morning.
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Arctic Oil and Gas Ultimates
Posted by Luís de Sousa on March 11, 2008 - 11:00am in The Oil Drum: Europe
Topic: Geology/Exploration
Tags: alaska north slope, anwar, arctic gas, arctic oil, Mackenzie delta, north america, norway, NPRA, russia, usgs (list all tags)
This is a guest post by Jean Laherrere.
World Arctic cumulative discovery.
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DrumBeat: March 11, 2008
Posted by Leanan on March 11, 2008 - 8:42am
Topic: Miscellaneous
Oil prices rocket close to 110 dollars a barrel
NEW YORK (AFP) - World oil prices continued their record charge Tuesday, rocketing close to 110 dollars amid lingering supply concerns and as the US dollar plumbed fresh lows against the euro.
Traders say oil prices have also been propped up because "black gold" is priced in dollars and buyers and speculators armed with stronger currencies than the US dollar are buying up oil contracts.
New York's main oil futures contract, light sweet crude for delivery in April, finished up 85 cents at a record closing high of 108.75 dollars per barrel after hitting an all-time intra day high in earlier trading of 109.72 dollars.
In London, Brent North Sea crude for April delivery settled up 1.09 dollars at 105.25 dollars after earlier jumping to a record intraday high of 105.82 dollars.
"Oil rewrites the record books as the once mighty dollar sinks further into obscurity," Phil Flynn, a market analyst at Alaron Trading, said in a briefing note.
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Food to 2050
Posted by Stuart Staniford on March 10, 2008 - 8:40am
Topic: Environment/Sustainability
Tags: 2050, agriculture, great transition, peak oil (list all tags)
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