$3/gallon gas and $75/barrel oil

To DubStyle (and others):

Thanks for ref. I agree it is good one, but it includes:

“…the biggest play in the unconventional reclamation game is in Canada. Oil sands production is over 1.2 million barrels per day, nearly double the output of four years ago. That has secured Canada's spot as No. 1 supplier to the No. 1 oil consumer, the United States, even though its conventional oil production is falling rapidly. Oil sands production (together with similar unconventional sources in Venezuela) will grow more than 170 percent by 2015,” {Billy T insert: Increase by 2mBPD, but I think US’s demand will increase much more, so problem is getting worse, not better.}

“Houston investment banker Matthew Simmons winces at the water loss (about a barrel for every barrel of oil produced) and the huge volumes of natural gas burned to separate oil from sand. "I call it making gold into lead," Simmons says.”

On US oil shale source:
“Rand estimates that a single 100,000-barrel-a-day operation would require a dedicated 1.2-gigawatt electricity generating station--a size that would be comparable to one of the nation's largest power plants, like the New Hampshire nuclear giant, Seabrook, which serves 900,000 customers. Electricity use is a challenge, O'Connor admits, but Shell estimates that its process would produce 3.5 units of energy* for every one it uses.” {Billy T insert: To put this into pocket book terms: For your current electric bill, on a daily basis, the customer get (neglecting many large costs associated with converting crude to gas, delivery and profits, etc) 1/9 of a BPD of oil which is adequate for his driving and house heating needs, but no bargain compared to a car running on batteries and an electric heat pump for heating (especially if you need it for air conditioning anyway). As I have been saying here for more than a year, run your car on imported low-cost, tropical-sugar-cane produced alcohol. - Much cheaper than a “battery car.”}
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*Billy T note: The use of one unit of electricity to produce (if actually as hoped) 3.5 units of energy in oil is slightly above “break even” in that if that oil energy were converted into the one unit of electric energy used, about 2/3 would be waste heat due to Carnot cycle limits. In this case this Waste heat may not be entirely “waste” as it is hot enough to assist with the extraction of oil form shale, but as Shell plans to use big electric heaters about 1000 feet below the surface, I think direct use of this “waste heat” IS NOT feasible; however, Shell also plans to freeze a ring of earth to prevent water form entering the “hot zone” and it may be feasible to use the waste heat as at least part of the energy required to drive these refrigerators. I would be willing to bet “dollars to donuts” that steam from the hot zone will condense on the “ice ring” melt it and the water released will find it way back into the hot zone. - I.e. Shell will discover they are making a 100 billion dollar version of two teams of men - one tasked with digging a hole and the other with filling it up as they electrically heat the hot zone inside their constantly refrigerated “ice ring.” Shell will realize this and give up as Exxon did, some what poorer, but wiser. -Perhaps Shell already knows this problem is real and “shale oil” is all “just talk“, designed to keep US congress and angry voters off their back with “excess profits tax“ They can argue “do not tax us, we need to make huge investment.” etc.?}

 

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I am inclined to agree with you that the US will attempt to use its military might, except Brazil will not be the target. Probably part of the current excitment about Iran is very much related to who the target would be as that oil is cheap, easily extracted, and not already all going to US as Saudi oil essentially is. This will cause a lot of trouble with China and Japan, who do get most of their oil from Iran. They of course can do nothing against the US in the battle field, but collectively they can dump their dollar hoards and collapse the US dollar and economy.

It all gets very complex, but what I think MAY happen is a repeat of Iraq., only much worse for US. I.e. the US will make "regime change" but unlike Iraq, where many of natives wanted that change, the current US use of "Iran has no right to U235 enrichment, even for electic power, because that technology is same as required for bomb." (only a change is the plumbing between the centrifuges) has destroyed the native opposition to the government. Like in Iraq, their much larger better-trained army will fade into the hill and sabotage the oil production, so it will drastically drop. (Iraq's is still below pre invasion levels by about half a million BPD. If Iran is invaded, the drop will be several million BPD but that will not matter much as a collapsed economy will need much less.)


Fortunately, most of the oil Brazil gets is from off shore wells, easily destroyed in a "scorched earth" (scorched water?) policy. The US military lacks the skills to extract oil from deep ocean floor (Brazil's government controlled PetroBrass is the world leader in this technology.)

Yes. Nazis Germany and "apartheid isolated" SA both used the Fisher -Toper process to make oil, but the cost is so high that in both cases it was at least part of the reason for the fall of these governments. - Do not think the US economy can run as it does today on oil from coal. Perhaps it could, IF it had not built up the "suburban infrastructure" it made as a result of keeping, for decades, gas prices at the pump at half, or less, what Europe pays.

 

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You seriously think that American demand for oil is going to increase by "much more" than 170% in the next 9 years? Here is a plot of American petroleum demand from 1950 till 2002:

http://www.eia.doe.gov/pub/oil_gas/...il_market_basics/Dem_image_US_cons_sector.htm

It took 40 years to increase 170% from 1965 to the present. At any rate, a doubling of oil demand would have to correspond to a doubling (or more) in GDP, which is not consistent with your whole "America is on the verge of collapse" thesis.

 

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Linear logic may not apply when frequency rates also increase. Gas prices at the pump have doubled since Bush took office and this suggests that linear scale analysis has lately been in error.

Higher gas prices is very much favorable. $5/gal at the pump by summer gives some hope that some people may reorient their thinking about the world they live in and the consequences of individual indiscretion towards the whole.

 

First of all, said increase in gas prices is directly responsible for keeping US oil consumption flat. The only way for American consumption to suddenly spike would be a huge, sudden drop in oil prices. That, in turn, requires either a big drop in global demand (China and Japan get wiped out by a meteor, say) or big jump in supply (said meteor is made out of frozen crude oil). I don't see any indication that either of these things will come to pass. On the contrary, everyone expects demand to continue to surge, while supply will stay flat and eventually fall off. That adds up to escalating oil prices, and flattening consumption in America (and everywhere else).

As far as the relationship between energy consumption and GDP, you are correct that it is generally not linear, particularly for situations where energy use triples in the course of a few years. However, the nonlinearity is in the direction of decreased energy intensity (i.e., more GDP per BTU). This is because of the effects discussed above: a 170% spike in American demand would drive the price of oil up to astronomical levels, making it uneconomical for use in any but the most profitable applications. Thus, we would expect the American GDP to increase SUPERlinearly with oil consumption. This is why I said "a doubling (or more) in GDP." Note that I should have said "tripling" instead of "doubling," since a 170% *increase* is almost three times the original quantity.

So, in summary, the linear projection is a lower bound. I used it because it is both simple and conservative, and so handily illustrates that a 170% increase in American oil consumption is inconsistent with imminent American economic decline. If America's economy were to drop off a cliff, it would manifest as a *decrease* in oil consumption.

 

There is nothing you can do to increase the total amount of oil on Earth. Most of the sources of light sweet crude have already been exploited. More extensive exploration will paradoxically make the rest get used up even sooner. It's our failure to invest in alternatives that will be our downfall. I'm not even talking about hydrogen fantasies, but things like railroads and increasing the gas mileage standards for new vehicles.

 

Yeah, it's definitely getting people motivated. Auto sales have been shifting heavily towards fuel efficient models (Toyota has been having banner years in US sales, while the SUV companies are eating dirt) and all of the big energy and auto companies talking up alternative fuel sources, sustainability, etc. The day when America's energy intensity matches that of Europe isn't far off.

As far as global consequences go, an unfortunate fact is that a big part of the way developed nations achieve high efficiency/low emissions is by shifting inefficient, dirty industry to less developed countries (as opposed to eliminating it from the global economy). Since the infrastructure then supports more people, you end up with an even bigger industrial pollution problem over all. America has already shifted most of the inefficient industry abroad, notably to China. The result is that America's industrial efficiency and cleanliness is now quite good, and that China is the world leader in carbon dioxide emissions.

America's transport sector, on the other hand, has remained fairly inefficient, and so accounts for a disproportionate share of emissions. This is also where the brunt of rising fuel costs are now being felt. While this will make American transport more efficient, at the same time the number of cars on the road in China will grow rapidly. Although they will likely be small, efficient cars, they will still add up to a huge amount of emissions, by virtue of China's giant population.

So we won't be getting a cleaner world out of the deal, although you will soon have America on your side on issues like international pollution treaties.

 

NO ....OF COURSE NOT.

You did not read what I said.

DuvStyle gave reference:
http://www.usnews.com/usnews/biztec...60424/24oil.htm

If you go there you will see that Canada's oil sands are currently providing US with 1.2 mBPD and their output is expect to increase by 170% (the reference's estimate, not mine!) or an increas of 2mBPD in 9 years.

I was stating that the US oil demand will increase by more than 2MBD in the next 9 years. Not a very bold statement! - I do not recall currrent US oil demand but just to show the difference, let me call it 50mBPD then a 1% increase annually for 9 years would raise that assumed 50 to about 55mBPD at the end of 9 years. Hense the increase out put from the Canadian oil sand, even if achieved, would only provide 40% of the increased demand.

Why don't you do the numbers correctly?* I am sure that if you do, and understand what I actually said, instead of your mis-reading of it, you will agree with me that the Canadian oil sands added output will not meet the increase in the US demand.

SUMMARY of point: US's salvation is not in Canada. - If it exist, it is the tropics, I.e. alcohol from sugar cane as I have been saying here for more than a year.
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*Your web reference no doubt has the numbers, but it is still not responding to me.

 

Okay, my mistake. I didn't realize you were considering the case where oil sands are expected to account for all of the growth in US demand. That is a conservative assumption, but it's fair enough.

Current US oil consumption is 20Mbpd, and has been for about 10 years. US oil consumption has been growing very slowly (less than 1% per year), even as the economy has grown at around 4% every year. In other words, all of the economic growth of the past decade has been achieved through increased energy efficiency and the use of other energy sources (notably natural gas). Supposing that an extra 2Mbpd of Canadian oil were sold to America over the next 9 years, this 10% growth in supply would be more than enough for the expected 8% growth in demand. So, yes, it is still a bold statement to say that America's oil consumption will grow by "much more" than 10% over the next 9 years. You are still saying that America's oil consumption will surge (if by a more realistic amount than the 170% figure), implying a surge in GDP growth.

 

My turn to say "my mistake"

I guessed too high at US oil consumption. It does look like Canada's oil sands could meet the increase in US oil demand, if they can boost the production by the 170% in 9 years. - I doubt that will be possible, mainly because of the water requirements, enviromental concerns, and fact a significant fraction of the oil taken from the ground is consummed to heat the sand (I think). I am told it gets cold in north Canada.

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I am not sure that I can agree with your idea that US "energy efficiency" has improved much, but of course if it is defined as Dollars of GDP / gallon of oil it has improved a lot. - This because the US is becoming a "service economy" - the big energy users like steel mills, aluminium refiners, etc are moving over seas.

In the case of aluminum production, I bet the true improvement in energy efficiency is less than than 10% in the last 30 years. Electric motors improved significantly by the technological improvement in magnetic materials and the use of more copper in the windings, but at the current rate of copper price increase, the efficiency of electric motor NOW being designed is probably dropping!

Did you read my final speculation about why Shell talking up the recovery of oil from US land (in situ, 1000 ft below surface) with one of the largest electric power plants that has ever been built and a larger than ever build (by orders of magnitude) refrigeration system to form a surounding ice-wall barrier to keep water from entering the central hot zone? (See same ref of DubStyle as before.)

Namely, I said they are talking up this US oil independance nonsense so they can say: "Don't put excess profits tax on us as we need big profits to make big investments."

I think they know full well that steam from the hot zone will condense on the ice wall etc. - As I said in prior post - they are suggesting a 100 billion dollar (or more) scheme that is very much like hiring two teams of men to work simultaneously - one tasked with digging a hole and the other with fillng it up. But this idea (AND A SOME DOLLARS, well place in Washington) may be a smart move by Shell. What do you think?

 

I think that depends on where you are looking. Solar and wind are everywhere but just still sufferering from decades of underinvestment.

 

That is not quite correct. Most cars in Brazil run on solar energy. It is called alcohol, produced from sugar cane.

Few seem to realize that conventional solar energy from photo cells is very expensive even if you only consider the cost of the land, the installation, the cleaning* (birds do fly over and do other things, leaves may blow on top or dust and sand storms where there are no leaves) the risk of hail, the transport to the field, the conversion of the low voltage DC to the AC needed the copper wire needed for connections. - These things are called the Balance of System Costs or "BOS costs" for short. BOS costs are more than 50% and going up rapidly with the cost of copper.

The production costs for the cells themselves are also increasing with the cost of energy. The Silicon itself is cheap, but it must be made pure by a "zone refining process" (many times heated and re-crystallized in progressive zones to drive the impurities to one end to be cut off.) The transport to the field is also more expensive due to the increase in gas price, but this is a minor effect.
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*Cleaning is important and the loss if you do not do it can be much greater than just the loss of the sunlight. This is because many individual cells must be connected in series. Suppose one of the N connected in series has most of its surface covered (leaf, or something else) then the resistance of that cell will be high with out light falling on it. The other cells in the chain will drive the series current thru it, make it get hot and you loss much more that the energy that did not fall on it. It is even possible that it may over heat to the point that it cracks or has excessive diffusion of its internal chemistry etc. A big bird that decides to sit and rest can cast a shadow on one or two cells, perhaps permanently damaging them by diffusion in the heat other cells are making in the high resistance shadowed one. - In short there are reasons why solar cell power is competitive only where power from the electric line is not available and generally then only in small scale, like a remote site for communications, a coast guard light, etc.

 

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*Billy T note: The use of one unit of electricity to produce (if actually as hoped) 3.5 units of energy in oil is slightly above “break even” in that if that oil energy were converted into the one unit of electric energy used, about 2/3 would be waste heat due to Carnot cycle limits. In this case this Waste heat may not be entirely “waste” as it is hot enough to assist with the extraction of oil form shale, but as Shell plans to use big electric heaters about 1000 feet below the surface, I think direct use of this “waste heat” IS NOT feasible; however, Shell also plans to freeze a ring of earth to prevent water form entering the “hot zone” and it may be feasible to use the waste heat as at least part of the energy required to drive these refrigerators. I would be willing to bet “dollars to donuts” that steam from the hot zone will condense on the “ice ring” melt it and the water released will find it way back into the hot zone. - I.e. Shell will discover they are making a 100 billion dollar version of two teams of men - one tasked with digging a hole and the other with filling it up as they electrically heat the hot zone inside their constantly refrigerated “ice ring.” Shell will realize this and give up as Exxon did, some what poorer, but wiser. -Perhaps Shell already knows this problem is real and “shale oil” is all “just talk“, designed to keep US congress and angry voters off their back with “excess profits tax“ They can argue “do not tax us, we need to make huge investment.” etc.?}[/QUOTE]

Damnit all if I haven't been trying to get my head around how they think that they can pull that one off. I share your skepticism, but I am really confused about why they started off thinking about their approach in the first place. Can it really be possible that the Shell engineers spaced out on this most important principle of thermodynamics? Your cynacism though has got to be misplaced. They'll surely try to look pitiful before Congress, but $1B is an expensive windmill to be charging.

 

Congressmen can easily be fooled / bribed by vested interest. - Let me illustrate with a personnel story:

Back in the early days, pre NASA, as I recall, there were industrial groups wanting your tax dollars for space. One of the crazy suggestions that was often repeated was that in space with no gravity, it would be possible to make perfectly spherical ball bearings.

Several congressmen from the states trying to stick their hands into the tax pool were sprouting this nonsense. I happen to live in Maryland, a state that was not going to get any of the pie (Our congressman had other "boondoggles" in mind for that.) So I wrote him to point out that as liquid sphere of steel begins to go solid, the total volume will be reduced and the last part to go solid will probably be concave - that a "ball" bearing made in space would be the worst ball bearing one could imagine - it would not even make a good "steelie" for a game of Marbles. He invited me I to testify before his committee, but as I would feel compelled to say something against his projects too, I thank him, declined and said he should claim my argument against "space ball bearing" as his own.

I am sure Shell can find a few congressmen to actively support this shale oil nonsense: Oven fighting refrigerator etc. but it will cost Shell some campaign contributions - that is how the system works.

God - your sure get cynical after you have been around the track a few times!

 

Ultimate solution to any future oil crisis is here.

 

Heres a great interview with an analyst who has been studying the nuts and bolts of production and pricing for several years - his prophetic visions are not exactly what you would call 'glad tidings':

http://www.grist.org/news/maindish/2005/11/03/simmons/

An interview with peak-oil provocateur Matthew Simmons

By Amanda Griscom Little
03 Nov 2005


Matthew Simmons has been stirring up a lot of angst in energy circles this year. This well-connected industry insider has concluded that some of the world's largest oil beds may be on the verge of production collapse -- and he's willing to bet his much-vaunted career on it.

Author of the recently published Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, Simmons is founder of Simmons & Company International, an investment bank that handles mergers and acquisitions among energy companies, and counts among its clients Halliburton, General Electric, and the World Bank. A graduate of the Harvard Business School, he served as an energy-policy adviser to the 2000 Bush-Cheney campaign.

Conservative credentials aside, Simmons has been boggling the minds of people across the political spectrum with his recent prediction that the price of a barrel of oil could hit the high triple digits within a few years. To postpone economic meltdown, he says we should be drilling in the Arctic National Wildlife Refuge and other hotly contested spots. At the same time, he's calling for a massive shift in energy policy, including radical improvements in efficiency, as well as a return to local farming and manufacturing. With his unconventional opinions, he's single-handedly reinventing the image of the post-oil energy crusader. He talked to Grist from his cell phone while dashing between energy lectures.

question: Let's start with a brief overview of the premise and implications of Twilight.

answer: I believe we are either at or very close to peak oil. If I'm right, then we have to assume that five or 10 years from now we'll be producing less oil than we are today. And yet we have a society that is expecting, under the most conservative assumptions, that oil usage will grow by at least 30 to 50 percent over the next 25 years. In other words, we would end up with only 70 percent of the oil we have today when we would need to have 150 percent. It's a problem of staggering economic proportions -- far greater than the temporary setback of a terrorist attack on energy infrastructure -- that could end up leading to more geopolitical fistfights than you can ever imagine. The fistfights turn into weapon fights and give way to a very ugly society.

question: How did this thesis evolve?

answer: The odyssey began in the early 1980s when I realized that my firm was threatened by a production collapse in the energy and oil-service business. I thought, "How on earth could this have happened without us even knowing?" I started doing some careful investigation into energy data. The more I studied, the more I started to realize that so many people who call themselves experts in the energy market, including government analysts, are in fact experts in their opinions and don't actually base a lot of it in actual data.

question: Why? Because the relevant data are confidential?

answer: Yes, what's publicly available is extremely vague. No major oil-producing companies or nations allow audits of the data on their reserves and production, which leaves the experts effectively playing a guessing game.

question: If the data are concealed, on what evidence did you base your own conclusions?

answer: I've spent years poring over hundreds of papers from the Society of Petroleum Engineers that have revealed fascinating clues. First I took an inventory of the top oil fields in the world, field by field. I was aghast to find that nobody had ever listed even the top 20 oil fields by name. I found that there are only about 120 oil fields in the world that produce half of the world's oil supply. The top 14 fields, which make up 20 percent of global supply, are, on average, over 53 years old. In Saudi Arabia, which harbors a quarter of the entire global supply, there are only five key fields producing 90 percent of their oil. They're all old.

Naturally I was very curious to find details on the condition and productivity of these fields. Two years ago I took a trip to Saudi Arabia on a government tour for business executives. They plied us with various data points that just didn't add up, even vaguely. I've since found evidence in the engineering papers indicating that the major Saudi fields are seriously at risk of reaching their peak, at which point they will begin to see their output decline.

question: In this case, would Saudi Arabia's leadership collapse?

answer: I want to steer away from discussing specifics of geopolitics in the Middle East because I really don't want to shift the focus away from the economics. It doesn't ultimately matter who rules Saudi Arabia. They can't change the maturity of their oil fields.

question: You made a $5,000 bet with conservative New York Times columnist John Tierney that per-barrel oil prices will be at $200 in 2010. How did you arrive at this number?

answer: Well, first of all, the $5,000 bet was essentially an effort to be provocative and wake people up to how cheap oil still is. I started a year ago saying that we need to prepare ourselves for triple-digit oil prices -- and I don't mean $100 per barrel, I mean high triple digits. Will it be by 2010? We don't have any idea. It could be by the winter of 2006.

Oil price will ultimately be set by demand and supply. Current oil prices are ridiculously cheap. People find that hard to believe, particularly now, but consider this: $65 a barrel translates to 10 cents a cup. Ten times cheaper than bottled water. People who think that this is a really high price need to have their heads screwed back on.

question: You have an enormous amount, professionally, riding on the prediction that peak oil is nigh.

answer:I'm basically betting my entire career.

question: What evidence did you find of looming production limits?

answer: Let's start with the plummeting rate of discovery of critical oil fields. The French Petroleum Institute did a major study a couple of decades ago about the distribution of oil fields by basin, which lends itself to a chessboard analogy. What happens with phenomenal regularity worldwide is that within about five years of moving into a new area of potential oil reserves, prospectors tend to find the queen first, which is the second-largest; within a handful of years they find the king; and then over the next decade you find the next eight to 10 lords. And once you've found the royal family, the rest of the hydrocarbon deposits you'll ever find are basically peons in size. Research overwhelmingly shows that all the royal families have been discovered.

question: Can you describe your findings that most of the king- and queen-sized deposits are so old that they have to be injected with increasing amounts of water to produce the crude?

answer: For decades, Saudi Arabia has been injecting water in each key oil field to keep reservoir pressure artificially high. The data show that Saudis are now injecting somewhere between 15 million and 18 million barrels a day of water to recover 8 million barrels a day of oil. This is not sustainable. Geologically speaking, the faster you produce a highly pressurized reservoir, the faster the reservoir pressure collapses. Conversely, the more gently you produce the field, the longer you can produce it at a steady rate, and the higher amount of oil you get out of the field.

question: I suppose it's safe to assume we're not poised to go gently into the twilight of global reserves.

answer: To put it mildly. What they are doing is rapidly depleting the high-quality, high flow-rate oil, so they'll be left with vast amounts of oil that just won't come out of the ground without massive water input or thousands and thousands of wells being drilled.

question: What kind of response have you gotten to this book? I saw in a New York Times Magazine article by Peter Maass that Sadad al-Husseini, a former executive of state-owned Saudi Aramco, essentially corroborated your thesis.

answer: Yes, he's a first-rate person. We've actually become quite good friends. I don't know to what extent I might have actually liberated him to speak more openly about the limits to Middle East oil. I think I've given quite a few Saudi insiders cover for being able to finally speak up and say, yes, that's actually what I thought, too.

In the U.S., the response within industry and among politicians has been overwhelmingly positive. About 10 people total have attacked the book, and my guess is that most of them have one commonality: a consulting client called Saudi Aramco.

question: It boggles my mind that data on oil reserves can be concealed. Knowing when we're going to run out would seem as critical to global security as knowing who has weapons of mass destruction. Why isn't disclosing oil data a responsibility on par with disclosing WMDs?

answer: It should be. The foreign minister of Saudi Arabia spoke at Rice University about five weeks ago and he said, "We're as transparent as anybody." And he's right. Until we force that same standard of disclosure on Exxon and Shell and BP, then I don't think there's any reason to expect Saudi Arabia to behave better. What I'm suggesting is the whole world needs to go to a new standard. The problem, of course, is this: In political and corporate worlds there are currently significant disincentives to be forthright about these risks. That's why we're going to have to have some sort of enforced mandate. It won't happen voluntarily.

question: What would you advise the Bush administration to do?

answer: Clamor for energy-data reform. That's the only thing the governments of the world can do this year. But they can't do it alone. I think the global mandate of how we have to attack this problem needs to be a very coordinated, central plan. We need to have international energy cooperation so we don't go into an accidental energy war.

question: Have you discussed these ideas with President Bush?

answer: I have met with the president quite a few times on energy, but not since coming to these latest conclusions. But I have spoken very openly with senior politicians from both parties, and key people are paying attention.

question: I understand you are a strong proponent of allowing drilling in the Arctic National Wildlife Refuge and the outer continental shelf.

answer: Yes, ASAP. There's nothing we can do to solve our problems, but everything we do that helps is a bridge to buy us time. Ultimately, we have to actually create some new forms of energy that don't exist today. Solar and wind are, of course, electricity, so not helpful near-term on the transportation front, which is the most intractable part of the problem. Biofuels need to be intensely examined, but corn-based ethanol is a scam because it requires such intensive oil inputs.

question: What about the shift to hybrid engines and, ultimately, hydrogen?

answer: There are some 220 million cars currently on the road in the U.S. alone. The problem with that concept, which so many people think is the way you end the energy war, is it will take 30 years to turn over the entire vehicle fleet. We don't have 15 or 20 years, much less 30.

We need to think on a grander scale. We have to find, for instance, far more energy-efficient methods of transporting products by rail and ship rather than trucks. We have to liberate the workforce from office-based jobs and let them work in their village, through the modern technology of emails and faxes and video conferencing. We have to address the distribution of food: Much of the food in supermarkets today comes from at least a continent or two away. We need to return to local farms. And we have to attack globalization: As energy prices soar, manufacturing things close to home will begin to make sense again.

question: What do you do personally to reduce your energy footprint?

answer: Very little, actually. I do have a new Mercedes diesel car that on the open road gets up to 50 miles per gallon. But in fact I'm one of the problems right now. I'm flying around the country giving too many energy talks. If I really wanted to say I'm going to be a personal crusader, I'd actually shut up and stay home.

 

to Carcano:
Thanks for the long Simmons post - I had not seen it, but it is the same song I have been singing for some time. The only points he missed, IMHO are:

(1) The Saudi's and "big oil" can not control the information about oil tanker lease rates. - They accurately reflect the views of the well informed. (If you put 100s of millions of dollars on the line each month, you try hard to know what is fact.). Rates are high when more oil will be shipped and low when less will be. Rates have been going down since 2004 which happens to be the same year exports from Saudi fields peaked. Part of the rated decrease is GWB's activities - about half a million BPD less coming out of Iraq now compared to pre-invasion.

I think Simmons is wrong if saying the Saudi fields are running out of oil - it is the sweet oil they have no capacity to increase. They have sour, heavy oil, but it is already in surplus as there are not enough refineries to process it. (I am not sure, but think its prices is still dropping under the pressure of over supply.) Brazil sells a lot of it and pays much more for less of the sweet oil it does import. Brazil is building at least one refinery in Brazil (and another in Venezuela with Chavez I think) to process the heavy crude as now gasoline from it is more economical than from the sweet, despite the higher refinery cost.

(2) He fails to note how much worse off the US will be than the rest of the world because of its suburban sprawl infrastructure, but gets close to this at times when he talks about it taking more than a decade to change the type of cars etc. - Even if cars remain as they are (terrible I admit) the improvement available by have most of the suburban commute terminated by living in the central cities or in high rises along the rail lines would be much more effective, but equally impossible in less than a couple of decades which US does not have.

About 50 years ago, mainly to make district heating via hot water waste from the generation of electricity economical, the Swedish government, especially, did this. - High urban density for all new construction and "radial linear villages" like spokes from the city hub were strongly encouraged.

Exactly the opposite - a "2D sprawl" has occurred in the US. As for use of the waste heat from power generation to at least double fuel efficiency - don't try to find it in the US as it is not economically feasible in a "2D sprawl" infrastructure. (There is a little district heating in the US. - most of it very old, in a few central cities and with only a short out reach as it is steam, which easily condenses, not hot water. Baltimore had some 20 years ago when I lived near there, but it did not get a mile from the old inter harbor power plant as it was like almost all, a steam district heating system. I doubt if it even exist today so about 2/3 of the energy in the coal BG&E burns is wasted.)

SUMMARY - The dance was fun, glad I was there for it, but it is now time for the US to pay the piper, glad I am not there for that.

 

Thought you'd enjoy that Billy...you can read the book length version of his research in pdf format here: http://www.simmonsco-intl.com/files/Hudson Institute September.pdf

 

the oil prices are high only for one reason,

someone wants U to work for them for free.