Mexico's oil production is plunging. "Pemex extracted 772,000 barrels a day from Cantarell [in January 2009], the world’s third-largest [oil] field, a decline of 38 percent from a year earlier" (yikes!), according to the Bloomberg article, whose link I found at this blog.
Why should U.S. citizens care (the plunging rule of law on the U.S. border with Mexico is probably a more heightened near-term concern)?
Because Mexico is the United State's third largest exporter, behind Canada and Saudi Arabia. In December 2008, the U.S. imported 1.126 million barrels per day from Mexico, nearly 10 percent of all of its imported crude oil, according to the EIA.
To put that number into perspective, even Iraq exported only about half that oil amount to the U.S. during the same period.
Fueling cars and trucks, the transportation of much of our food, for instance, is about 97 percent dependent on crude oil.
The U.S. is dangerously dependent on foreign countries for this crucial energy source; two-thirds of all of our oil comes from other countries.
The top five exporters (including Venezuela and Nigeria, along with the previously mentioned three) dominate U.S. imports. "The top five exporting countries accounted for 59 percent of United States crude oil imports in December while the top ten sources accounted for approximately 87 percent of all U.S. crude oil imports," according to the Energy Information Agency. It's not like we can just grab more oil from another source who is willing to make up for Mexico's probable and eventual exit from the scene as a big U.S. exporter.
Mexico's need for its own dwindling oil supply will probably exceed its need for the revenue it can raise by selling its oil, particularly at the present low price per barrel of about $42. Experts call this condition "peak exports" (when important supplying countries are forced to consume their own crude oil rather than sell it). Despite the fact that the world is currently awash in relatively cheap oil, this is a problem the U.S. is likely to confront in the months and years ahead.
Showing posts with label peak oil. Show all posts
Showing posts with label peak oil. Show all posts
Sunday, March 15, 2009
Thursday, February 12, 2009
Gas Prices Creep Up: Oil Supply Crisis in the Offing?
Gasoline prices have gone up quite a bit in the last few weeks here in the Boston area, from about $1.69 per gallon to $1.89 per gallon. What gives?
What will become of us if we are hit with an energy crisis on top of this horrendous, Depression level economic crisis?
First of all, gas is still very cheap for the beleaguered U.S. consumer compared with Europe. Gas is more than three times more costly there. But clouds are gathering on the horizon.
The New York Times reported back in December 2008 that "dozens of major oil and gas projects have been suspended or canceled ... as companies scramble to adjust to the collapse in energy markets [meaning the price of crude oil]."
This means that all those oil derricks that were sprouting up all over places like Texas, Pennsylvania, and North Dakota have ceased operations, not to mention big exploration and drilling projects throughout the world. What looks like a good deal at $147 per barrel suddenly does not make any sense at less than $40 per barrel.
As a result, it is just a matter of time before supply constraints send the price of the Western world's precious oil upwards again.
That is just what the realing economy needs, right? High energy costs. Actually, yes. This is a golden opportunity for the U.S. and other countries, when oil demand is historically low, to begin weaning themselves from this heroin-like addiction, via conservation mainly (smaller cars, better trains, telecommuting, eating locally grown food, and the like), before the unfortunate implications of a loss in oil supply become the second really bad crisis to come true.
What will become of us if we are hit with an energy crisis on top of this horrendous, Depression level economic crisis?
First of all, gas is still very cheap for the beleaguered U.S. consumer compared with Europe. Gas is more than three times more costly there. But clouds are gathering on the horizon.
The New York Times reported back in December 2008 that "dozens of major oil and gas projects have been suspended or canceled ... as companies scramble to adjust to the collapse in energy markets [meaning the price of crude oil]."
This means that all those oil derricks that were sprouting up all over places like Texas, Pennsylvania, and North Dakota have ceased operations, not to mention big exploration and drilling projects throughout the world. What looks like a good deal at $147 per barrel suddenly does not make any sense at less than $40 per barrel.
As a result, it is just a matter of time before supply constraints send the price of the Western world's precious oil upwards again.
That is just what the realing economy needs, right? High energy costs. Actually, yes. This is a golden opportunity for the U.S. and other countries, when oil demand is historically low, to begin weaning themselves from this heroin-like addiction, via conservation mainly (smaller cars, better trains, telecommuting, eating locally grown food, and the like), before the unfortunate implications of a loss in oil supply become the second really bad crisis to come true.
Friday, December 19, 2008
The latest cheap oil era may be fleeting
Gas was $1.67 per gallon at my favorite station down the road. Crude oil has plummeted from its Summer high of about $145 per barrel (pb) to less than $40 pb. Yippee! Let's get the Hummers down off the blocks and hit the road! The era of cheap oil is back! (Writer's disclaimer: the last few statements are facetious. I drive a hybrid.)
Hold your horses. The New York Times reported on December 16 that the sudden drop in oil prices, the yo-yo effect that experts call "volatility," has abruptly put the kibosh on many oil production projects throughout the world. From off the coast of Africa to the Dakota's countryside, an oil boom that had commenced apace last Summer is grinding to a halt.
The result is likely to be a tight oil supply, once again, that will inevitably increase oil and gas prices precipitously. Ironically, some of the sting has been taken out of alternative energy projects, even though new energy sources to replace oil will be critical, now that the oil price has dropped again.
The International Energy Agency, in a study of hundreds of the world's largest and oldest oil fields, has also raised peak-oil alarm bells in its World Energy Report about the long-term prospects for oil supplies.
"Even if oil demand was to remain flat to 2030, 45 mb/d of gross capacity – roughly four times the current capacity of Saudi Arabia – would need to be built by 2030 just to offset the effect of oil-field decline," the above link quotes IEA Executive Director Nubuo Tanaka.
Four new Saudi Arabia's, in other words, would have to be found simply to compensate for the on-going decline of the world's largest fields. Wow.
The latest drop in gas prices appears to be a tantalizing mirage, or relief, for drivers, but not much more meaningful than that. Therefore, we have to keep our eye on the ball: plug-in hybrids, electrified transportation, and finding ways to conserve oil use.
Hold your horses. The New York Times reported on December 16 that the sudden drop in oil prices, the yo-yo effect that experts call "volatility," has abruptly put the kibosh on many oil production projects throughout the world. From off the coast of Africa to the Dakota's countryside, an oil boom that had commenced apace last Summer is grinding to a halt.
The result is likely to be a tight oil supply, once again, that will inevitably increase oil and gas prices precipitously. Ironically, some of the sting has been taken out of alternative energy projects, even though new energy sources to replace oil will be critical, now that the oil price has dropped again.
The International Energy Agency, in a study of hundreds of the world's largest and oldest oil fields, has also raised peak-oil alarm bells in its World Energy Report about the long-term prospects for oil supplies.
"Even if oil demand was to remain flat to 2030, 45 mb/d of gross capacity – roughly four times the current capacity of Saudi Arabia – would need to be built by 2030 just to offset the effect of oil-field decline," the above link quotes IEA Executive Director Nubuo Tanaka.
Four new Saudi Arabia's, in other words, would have to be found simply to compensate for the on-going decline of the world's largest fields. Wow.
The latest drop in gas prices appears to be a tantalizing mirage, or relief, for drivers, but not much more meaningful than that. Therefore, we have to keep our eye on the ball: plug-in hybrids, electrified transportation, and finding ways to conserve oil use.
Monday, December 15, 2008
What do you do when the electricity goes off?
Many New Englanders were confronted with this problem just north of where we live, where an extensive ice storm knocked out electricity all over Maine, New Hampshire, Vermont, and parts of Massachusetts for several days.
The experiences are emblematic of what could happen during an extensive energy crisis involving supply shortages of oil, natural gas, and other energy sources.
Watching the news coverage, I was struck by the vast differences in preparation among the citizenry. Many were bearing up well with good-humored Yankee stoicism, but were barely surviving with homes cold enough on the inside to see your breath, long gas lines (or no gas), and difficult treks to find food to restock the pantry.
A lot of people simply threw up their hands and crammed into any hotel with power that they could find. I joked with my family, rather lamely, that we would have just headed with our Prius into Boston in search of a Marriott, where I have a sort of "frequent stayer" program.
I was impressed by one fellow in New Hampshire who seemed to be actually having a good time. The reason was that he had a wood stove, a chain saw, and plenty of fallen-down trees to chop up and stoke the heater with. A wood stove will keep a fairly large area of a house, about 500 hundred square feet, toasty enough to live in, and you can heat up water, soup, and other stuff on its hot surface.
The man's family was simply sleeping in the vicinity of the stove, they had plenty to eat and drink, and he was not letting the fire go out. He talked about how everything for this long weekend had become "simpler," and that there was something nice and bucolic about how they were living (no TVs, video games, iPods, modern stresses, etc.).
Doesn't this observation remind you of the kind of post-Peak Oil scenarios people often talk about?
I vowed after listening to him to do two things: replace my wood-stove insert with a full-fledged wood stove, and get a couple of free-standing, perhaps kerosene burning lamps. My father, who passed away this year in his eighties, but lived successfully for decades on the wooded coast of Maine, in his infinite wisdom, gave me a kerosene burning lamp about 12 years ago. After not using it for a couple of years I donated it to a charitable auction, and now I'm kicking myself.
As one stranded person in northern New England put it this weekend, "You don't truly appreciate something until you no longer have it," and that's electricity.
The experiences are emblematic of what could happen during an extensive energy crisis involving supply shortages of oil, natural gas, and other energy sources.
Watching the news coverage, I was struck by the vast differences in preparation among the citizenry. Many were bearing up well with good-humored Yankee stoicism, but were barely surviving with homes cold enough on the inside to see your breath, long gas lines (or no gas), and difficult treks to find food to restock the pantry.
A lot of people simply threw up their hands and crammed into any hotel with power that they could find. I joked with my family, rather lamely, that we would have just headed with our Prius into Boston in search of a Marriott, where I have a sort of "frequent stayer" program.
The good ole venerable wood stove
I was impressed by one fellow in New Hampshire who seemed to be actually having a good time. The reason was that he had a wood stove, a chain saw, and plenty of fallen-down trees to chop up and stoke the heater with. A wood stove will keep a fairly large area of a house, about 500 hundred square feet, toasty enough to live in, and you can heat up water, soup, and other stuff on its hot surface.
The man's family was simply sleeping in the vicinity of the stove, they had plenty to eat and drink, and he was not letting the fire go out. He talked about how everything for this long weekend had become "simpler," and that there was something nice and bucolic about how they were living (no TVs, video games, iPods, modern stresses, etc.).
Doesn't this observation remind you of the kind of post-Peak Oil scenarios people often talk about?
I vowed after listening to him to do two things: replace my wood-stove insert with a full-fledged wood stove, and get a couple of free-standing, perhaps kerosene burning lamps. My father, who passed away this year in his eighties, but lived successfully for decades on the wooded coast of Maine, in his infinite wisdom, gave me a kerosene burning lamp about 12 years ago. After not using it for a couple of years I donated it to a charitable auction, and now I'm kicking myself.
As one stranded person in northern New England put it this weekend, "You don't truly appreciate something until you no longer have it," and that's electricity.
Wednesday, October 1, 2008
Introduction
This is the introduction to my blog that was published in 2006:
I guess the best place to start is to explain the purpose of this page. What is the reason for taking up a space in the Web ether anyways?
Well, first of all, energy and environment are by far the most important issues facing current and future generations. Specifically, this page will discuss elements of E & E (as I'll refer to them from now on) involving the upcoming energy crisis or “peak oil,” as amplified by human-induced global warming.
These issues are much more important than international terrorism, for instance, or just about anything else you can think of, because they spare no person or species (in terms of warming) in the world their impacts, and literally “hit everyone where they live,” affecting how they get their food and water, how they stay warm in winter and cool in the summer, and whether or not people and their communities live in a stable habitat.
Why not write about the most important topic in you and your family's life?
I'll briefly summarize these two terms, peak oil and global warming. Then I'll provide you a little information about the writer, in the spirit of full disclosure, because it's only fair to convey to readers the background, biases, and motivations of the web page's producer.
Peak oil refers to a milestone or point on a time line when the world is approaching or has already attained the peak production, the top of a bell curve, of the oil that it can extract from the earth. Simply put, once the world has attained oil peak, the amount of oil that we can take from the ground begins to wane at varying rates, and is of lower quality and more inefficient and expensive to extract.
This is geological reality; oil is a finite resource. Why does this matter? Because so much of everything we depend upon in daily life — manufacturing endless amounts of stuff, driving around in cars, heating homes, schools, and hospitals, and other critical forms of transportation like aircraft and shipping — run on oil.
This is a giant topic, but I'll try to make this little, admittedly inadequate definition as pithy as possible. There are a lot of good books out now, and apparently much solid evidence, that we have already or will shortly reach peak oil. The compelling nature of this issue is intensified by the fact that our governments and institutions have not adequately prepared for the impending situation when oil is not abundant and cheap. In other words, a substitute resource such as hydrogen or biofuels is not available to simply “step in” and run the global economy on, particularly faced with the rising oil demand from countries like China and India.
When is the last time you drove past a fuel station carrying gasified coal or tar-sands derived oil? Industry can begin immediately generating alternative fuels, but the transportation and distribution infrastructure is another ball game.
The Greenhouse Effect makes it possible for life to exist on earth. Global warming refers to the effect of the excess dumping or filling of the lower atmosphere with greenhouse gases like carbon dioxide (CO2) and methane. This has a destabilizing effect on the climate, causing fluctuations that in all probability would not have occurred, or would not have occurred with the same intensity, if the atmosphere had not received this load of gases.
Scientists have pretty much reached a consensus that human sources, such as car driving, smokestacks, and the burning of tropical forests, are substantially contributing to the catastrophic part of the global-warming equation. Another crucial part of the equation is that global warming feeds on itself; for example, the warmer the atmosphere gets, the more permafrost melts; the more permafrost that melts, the more methane and CO2 gets released, and on an on.
Ice cores have provided a solid historical record of how global CO2 levels affect average temperature; the atmospheric scientists really know what they're talking about here. Global warming is one of the few technical areas where the experts are more alarmed than the average person, which tells you something.
These two issues — peak oil and human-induced global warming — amplify each other. Destabilized weather patterns in the form of dramatic regional climate changes, rising seas, brutal storms, tropical disease migrations, and the like, make the stresses and strains of an energy crisis that much more difficult to deal with. This is why it seems natural, and more interesting to write and think about (like numerous people are) these two issues together.
Now for the disclosure part; I am not an expert in these areas by any stretch of the imagination. I have degrees in liberals arts and software engineering, and I am a writer, but mainly in the last few years of software books. Years ago I wrote a popular newsletter for environmental managers, but that was more about the ins and outs of regulations than science. I am a father and a outdoors devotee. I run, climb, and ride a bike a lot. I'm like everyone else; I notice weird changes in my immediate environment, like mosquitoes that are still present in the marshes in New England in January. In fact, these are some of the things I'm going to be writing about in part on this page.
My biases are thus: I advocate a tremendous and immediate investment in renewable sources of energy like small hydropower plants; wind farms; and solar thermal plants and arrays. I advocate foremost conservation, as in reducing the amount of energy we consume and pollution we emit as individuals. In other words, falling back in love with your bike. Conservation is probably the easiest way, the low hanging fruit, with which the human race can deal with peak oil and emitting fewer greenhouse gases.
This page will not be one of those holier than thou tracts; I pollute and consume as much as anyone else (oh, maybe a little less, as I drive a hybrid car, keep food waste out of landfills and in a glorified garbage pile called “compost,” recycle like mad, use compact fluorescent bulbs, and ride my bike and walk a lot instead of drive). I have ridden a bike more for that great outdoors feeling and competition than as a driving substitute, but lately I've been trying to do more errands on my bike.
In general, I'm for confronting problems, finding solutions, not fearing change, and taking some of the heat (no pun intended) off of the future generations that have to deal with the implications of our largesse. Thanks for reading to this point.
I guess the best place to start is to explain the purpose of this page. What is the reason for taking up a space in the Web ether anyways?
Well, first of all, energy and environment are by far the most important issues facing current and future generations. Specifically, this page will discuss elements of E & E (as I'll refer to them from now on) involving the upcoming energy crisis or “peak oil,” as amplified by human-induced global warming.
These issues are much more important than international terrorism, for instance, or just about anything else you can think of, because they spare no person or species (in terms of warming) in the world their impacts, and literally “hit everyone where they live,” affecting how they get their food and water, how they stay warm in winter and cool in the summer, and whether or not people and their communities live in a stable habitat.
Why not write about the most important topic in you and your family's life?
I'll briefly summarize these two terms, peak oil and global warming. Then I'll provide you a little information about the writer, in the spirit of full disclosure, because it's only fair to convey to readers the background, biases, and motivations of the web page's producer.
Peak Oil
Peak oil refers to a milestone or point on a time line when the world is approaching or has already attained the peak production, the top of a bell curve, of the oil that it can extract from the earth. Simply put, once the world has attained oil peak, the amount of oil that we can take from the ground begins to wane at varying rates, and is of lower quality and more inefficient and expensive to extract.
This is geological reality; oil is a finite resource. Why does this matter? Because so much of everything we depend upon in daily life — manufacturing endless amounts of stuff, driving around in cars, heating homes, schools, and hospitals, and other critical forms of transportation like aircraft and shipping — run on oil.
This is a giant topic, but I'll try to make this little, admittedly inadequate definition as pithy as possible. There are a lot of good books out now, and apparently much solid evidence, that we have already or will shortly reach peak oil. The compelling nature of this issue is intensified by the fact that our governments and institutions have not adequately prepared for the impending situation when oil is not abundant and cheap. In other words, a substitute resource such as hydrogen or biofuels is not available to simply “step in” and run the global economy on, particularly faced with the rising oil demand from countries like China and India.
When is the last time you drove past a fuel station carrying gasified coal or tar-sands derived oil? Industry can begin immediately generating alternative fuels, but the transportation and distribution infrastructure is another ball game.
Global Warming
The Greenhouse Effect makes it possible for life to exist on earth. Global warming refers to the effect of the excess dumping or filling of the lower atmosphere with greenhouse gases like carbon dioxide (CO2) and methane. This has a destabilizing effect on the climate, causing fluctuations that in all probability would not have occurred, or would not have occurred with the same intensity, if the atmosphere had not received this load of gases.
Scientists have pretty much reached a consensus that human sources, such as car driving, smokestacks, and the burning of tropical forests, are substantially contributing to the catastrophic part of the global-warming equation. Another crucial part of the equation is that global warming feeds on itself; for example, the warmer the atmosphere gets, the more permafrost melts; the more permafrost that melts, the more methane and CO2 gets released, and on an on.
Ice cores have provided a solid historical record of how global CO2 levels affect average temperature; the atmospheric scientists really know what they're talking about here. Global warming is one of the few technical areas where the experts are more alarmed than the average person, which tells you something.
Feeding Off Each Other
These two issues — peak oil and human-induced global warming — amplify each other. Destabilized weather patterns in the form of dramatic regional climate changes, rising seas, brutal storms, tropical disease migrations, and the like, make the stresses and strains of an energy crisis that much more difficult to deal with. This is why it seems natural, and more interesting to write and think about (like numerous people are) these two issues together.
Who Am I?
Now for the disclosure part; I am not an expert in these areas by any stretch of the imagination. I have degrees in liberals arts and software engineering, and I am a writer, but mainly in the last few years of software books. Years ago I wrote a popular newsletter for environmental managers, but that was more about the ins and outs of regulations than science. I am a father and a outdoors devotee. I run, climb, and ride a bike a lot. I'm like everyone else; I notice weird changes in my immediate environment, like mosquitoes that are still present in the marshes in New England in January. In fact, these are some of the things I'm going to be writing about in part on this page.
Biases and Opinions
My biases are thus: I advocate a tremendous and immediate investment in renewable sources of energy like small hydropower plants; wind farms; and solar thermal plants and arrays. I advocate foremost conservation, as in reducing the amount of energy we consume and pollution we emit as individuals. In other words, falling back in love with your bike. Conservation is probably the easiest way, the low hanging fruit, with which the human race can deal with peak oil and emitting fewer greenhouse gases.
This page will not be one of those holier than thou tracts; I pollute and consume as much as anyone else (oh, maybe a little less, as I drive a hybrid car, keep food waste out of landfills and in a glorified garbage pile called “compost,” recycle like mad, use compact fluorescent bulbs, and ride my bike and walk a lot instead of drive). I have ridden a bike more for that great outdoors feeling and competition than as a driving substitute, but lately I've been trying to do more errands on my bike.
They Shoot Messengers Don't They?
In general, I'm for confronting problems, finding solutions, not fearing change, and taking some of the heat (no pun intended) off of the future generations that have to deal with the implications of our largesse. Thanks for reading to this point.
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