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Old 2009-09-22, 17:54   #23
cheesehead
 
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Here's a blog entry from The Oil Drum: Europe about the reasons for the shape of the Hubbert curve --

"Mind-sized Hubbert"

http://europe.theoildrum.com/node/5731

Quote:
The bell shaped Hubbert curve is commonly observed when a non renewable, or slowly renewable, resource is exploited in a free market. But what is the origin of the curve? Ugo Bardi and Alessandro Lavacchi have recently published a simple "mind sized" model of the Hubbert behavior in "Energies" . ...

Have you ever tried to tell a politician about peak oil? If you did, you know what happens. Supposing that he/she pays any attention to you, you'll immediately face at least two typical objections: if there is still oil underground, what is the problem? If the price is high enough, why should production decline? It is not easy to answer these questions in the 30 seconds which are the typical attention span of a politician. Failing to do that will make you look like a representative of one of those millenarian sects eagerly waiting for the end of the world. And the problem is not just with politicians; try to explain peak oil to your mother or to an economist. It is not easy.

... there are plenty of intelligent people out there who are perfectly able to understand the concept. The problem is how do we explain it to them. And, if we have to explain it, we must understand it first. What is, exactly, that causes production peaks for oil and for other non renewable resources?

. . .

"Mind sized" is a term invented by Seymour Papert, the creator of the "logo" programming language. He said that complex problems can always be broken into mind-sized blocks, and so can be grasped by the human mind. Indeed, most of us (including politicians) tend to take decisions based on the way we understand what's going on and our understanding can't be but mind sized. In addition, we tend to ignore what we don't understand. That may be one of the reasons why peak oil is so commonly ignored by politicians and decision makers.

. . .

But we had started with the idea of explaining the Hubbert curve to a politician; so, let me summarize the main assumptions of this "mind sized" model. ...

1. There exists a non renewable or slowly renewable resource which is limited in amount and "graded" in costs of extraction/production.

2. People will extract/produce first the low cost resource and will re-invest an approximately constant fraction of their profits in more facilities for extraction/production. This is the positive feedback that generates the rapid initial growth of the curve.

3. As the resource is consumed, increasing costs of production reduce profits and - as a consequence - investments in extraction/production. This is the negative feedback that generates the decline.

When these three assumptions are described by two coupled equations, they generate a nearly symmetrical, bell shaped, curve. Political, technological and market factors may modify the behavior of the system. However, since the curve has been often observed in historical cases, we can conclude that these three assumptions are sufficient at least for accounting for the main tendency of this kind of system.
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Old 2009-09-22, 18:27   #24
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"Peak Oil" should be understood to mean "peak (oil + natural gas)" IMO. It's true that crude oil contains raw ingredients for many more products than natural gas contains, but when the main uses are just to burn them as fuel, they should be considered together for"peak" purposes.

There's recently been a big* increase in estimated recoverable natural gas reserves within the U.S. (Note "recoverable". This reservoir of natural gas has long been known -- it just wasn't technically feasible to produce it, until recently.)

"Rediscovering Natural Gas By Hitting Rock Bottom"

http://www.npr.org/templates/story/s...35&ft=1&f=1025

"Glenn Thompson: There is a natural gas gold mine under our feet"

http://www.washingtonexaminer.com/op...-59820907.html

There's environmental controversy about pollution from shale gas production.

However, unlike the case of shale oil -- where large amounts of water are needed in the process of extracting the oil from the shale, and the oil shale is concentrated in our western semiarid regions -- with shale gas the main concern is that there will be leakage from wells or fractured rock into now-clean water aquifers.

"Water quality worries could slow shale drilling"

http://www.reuters.com/article/GCA-G...58054Z20090901

"Great Lakes Directional Drilling Ban Should Be Lifted"

http://www.mackinac.org/article.aspx?ID=9712

- - -

Note:

"big*" -- but not big enough to shift the occurrence of peak oil+gas by more than, say, a year.

Last fiddled with by cheesehead on 2009-09-22 at 18:42
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Old 2009-11-09, 23:09   #25
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Default Whistleblower: IEA Inflates Oil Data to Stem Panic

Whistleblower Says IEA Inflating Oil Resource Data to Avoid Panic
Quote:
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.

Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.
My Comment: Just imagine what a return to $150/barrel oil would do to the [alleged] infant economic recovery in the U.S. and around the world. Oil more than doubling (in $US terms) since last winter`s post-bubble-pop lows already means that gasoline currently is 20% more expensive in the U.S. that it was at this time last year.
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Old 2009-11-11, 00:35   #26
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Quote:
Originally Posted by cheesehead View Post
with shale gas the main concern is that there will be leakage from wells or fractured rock into now-clean water aquifers.
... and the leakage isn't necessarily only the natural gas from the shale ... There's also the secret-formula mix injected along with water and sand during hydraulic fracturing:

"Pennsylvania lawsuit says drilling polluted water"

http://news.yahoo.com/s/nm/20091109/..._fracking_suit

Quote:
AVELLA, Pennsylvania (Reuters) – A Pennsylvania landowner is suing an energy company for polluting his soil and water in an attempt to link a natural gas drilling technique with environmental contamination.

George Zimmermann, the owner of 480 acres in Washington County, southwest Pennsylvania, says Atlas Energy Inc. ruined his land with toxic chemicals used in or released there by hydraulic fracturing.

Water tests at three locations by gas wells on Zimmermann's property -- one is 1,500 feet from his home -- found seven potentially carcinogenic chemicals above "screening levels" set by the U.S. Environmental Protection Agency as warranting further investigation.

. . .

If Zimmermann wins his case, it would be the first in America to prove that hydraulic fracturing causes water contamination. Such a finding could slow the development and use of cleaner-burning natural gas that would reduce American dependence on overseas energy.

PERFECT BASELINE TESTS

Baseline tests on Zimmermann's water a year before drilling began were "perfect," he said. In June, water tests found arsenic at 2,600 times acceptable levels, benzene at 44 times above limits and naphthalene five times the federal standard.

Soil samples detected mercury and selenium above official limits, as well as ethylbenzene, a chemical used in drilling, and trichloroethene, a naturally occurring but toxic chemical that can be brought to the surface by gas drilling.

. . .
The oil industry has repeatedly demonstrated that it has to be legally forced to clean up its wells and operations, just as other industries have to be legally forced to clean themselves up.

- - -

It's a lot easier to keep one's environment clean by reducing the use of hydrocarbons than it is to clean up after hydrocarbons are brought up out of the ground and used.

Last fiddled with by cheesehead on 2009-11-11 at 00:40
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Old 2009-11-11, 00:48   #27
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It's sort of a Ponzi scheme in which many of the OPEC countries inflate estimates in order to portray a smooth future, but can't get enough new discoveries to prop up their figures. Eventually the faltering production forces some revelation of truth. Bernie Madoff may have his title of world's biggest Ponzi-er usurped long before his prison term runs out.

Quote:
My Comment: Just imagine what a return to $150/barrel oil would do to the [alleged] infant economic recovery in the U.S. and around the world.
The sooner there's a slap of reality, the better for us all in the long run.

As the current US TV commercial for some acid-reducer has it:

"It's simple, mister. Do you want it to hurt now, or hurt later?"

Last fiddled with by cheesehead on 2009-11-11 at 00:55
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Old 2009-11-12, 21:13   #28
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Default Goldman’s Global Oil Scam

Goldman’s Global Oil Scam Passes the 50 Madoff Mark
Quote:
$2.5 Trillion - That’s the size of of the global oil scam.

It’s a number so large that, to put it in perspective, we will now begin measuring the damage done to the global economy in "Madoff Units" ($50Bn rip-offs). That’s right - $2.5Tn is 50 TIMES the amount of money that Bernie Madoff scammed from investors in his lifetime, yet it is also LESS than the MONTHLY EXCESS price the global population is being manipulated into paying for a barrel of oil.

Goldman Sachs, Morgan Stanley, BP, TOT, Shell, DB and Societe General founded the Intercontinental Exchange in 2000. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate "dark pool" trading in the commodities markets. Billions of dollars are being placed on oil futures contracts at the ICE and the beauty of this scam is that they NEVER take delivery, per se. They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel.

A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate "round-trip" trades. Round-trip” trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market ...

Over the course of an average month at the NYMEX, 5 BILLION barrels of oil will be traded, with a fee being collected on every single transaction which is ultimately passed down to US consumers, yet less than 40M barrels will actually be delivered. That is just 8 tenths of 1 percent of actual demand for the product that is being traded - 99.2% of the oil transaction fees being paid by the American people do nothing more than create fees for the traders and record profits and bonuses for the trading firms!
My Comment: Note that Goldman et al appear to be setting up a similar mass-scale fraud related to trading of carbon credits on the Chicago Climate Exchange. Neat trick ... that way they`ll make money by inflating oil prices, and also make money by inflating the cost of "going green".
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Old 2009-11-12, 21:56   #29
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Quote:
Originally Posted by ewmayer View Post
Goldman’s Global Oil Scam Passes the 50 Madoff Mark

My Comment: Note that Goldman et al appear to be setting up a similar mass-scale fraud related to trading of carbon credits on the Chicago Climate Exchange. Neat trick ... that way they`ll make money by inflating oil prices, and also make money by inflating the cost of "going green".
The oil scam smells like Enron.
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Old 2010-03-24, 00:40   #30
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"Oil Production to Peak in 2014, Kuwaiti Scientists Predict"

http://www.livescience.com/environme...ak-100312.html
Quote:
. . .

Updated model

The scientists from Kuwait University and the Kuwait Oil Company adopted a newer approach by including many Hubbert production cycles, or bell-shaped curves showing the rise and fall of a non-recyclable resource. Earlier models typically assumed just one production cycle, despite the fact that most oil-producing nations have historically experienced more of a rollercoaster ride in production.

Such production cycles reflect the influence of new technological innovations in the oil industry, government regulations, economic conditions and political events. The factors include the discovery of new oil deposits, the recent economic recession and the rise of renewable energy.

. . .

The new model

The Kuwaiti study created its world model for peak oil based on 47 individual models for each major oil-producing nation. It also took a separate look at the Organization of the Petroleum Exporting Countries (OPEC), which includes nations that control about 35 percent of the world's oil reserves.

. . .
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Old 2010-03-24, 01:10   #31
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Cheesehead, those last two posts seem contradictory -- or at least it seems that accepting both is contradictory. If oil is running out soon (peaking 2014 and dwindling thereafter, while population and industrialization increase) then price increases seem reasonable and not like a Ponzi scheme.

I accept the latter post and reject the former. Indeed, I thought the world was already past its peak production of oil. (There's plenty of oil left in the ground, but it's hard -- and expensive -- to harvest most of it.) So I was surprised when oil prices dropped so sharply (notwithstanding the economic downturn) and unsurprised at their present return.


Do you accept both? If so, would you explain?
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Old 2010-03-24, 01:43   #32
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Quote:
Originally Posted by CRGreathouse View Post
Cheesehead, those last two posts seem contradictory
My next-to-last post #29 was just a one-line comment, and I find it hard to believe you're taking that as contradictory to #30. Do you mean that #27 and #30 seem contradictory ... or what? Would you please quote the contradictions you're referring to?

Last fiddled with by cheesehead on 2010-03-24 at 01:45
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Old 2010-03-24, 01:50   #33
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Quote:
Originally Posted by cheesehead View Post
My next-to-last post #29 was just a one-line comment, and I find it hard to believe you're taking that as contradictory to #30. Do you mean that #27 and #30 seem contradictory ... or what? Would you please quote the contradictions you're referring to?
I did mean that. Or at least, that accepting the premise of the article in #28 (responded to in #29) as well as the one in #30 are (near-) contradictory. So my question would be:
* Do you accept, as in #28 and #29, that the price of oil is being dramatically inflated?
* Do you accept, as in #30, that ready oil supplies are being quickly depleted?
* Regardless of the above answers, do you see a contradiction between these two?

Last fiddled with by CRGreathouse on 2010-03-24 at 01:50
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