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Energy Exports May Not Be Good

On May 17th, 2013, Joe Nocera of the New York Times wrote an editorial, Energy Exports Are Good!  In it he follows the classic paradigm of neoliberalism: Let the "markets" decide what will happen with natural gas and let us export it if someone so desires.

According to Wikipedia, neoliberalism in economics was originally coined in 1938 by the German scholar Alexander Rüstow at a colloquium that defined the concept of neoliberalism as “the priority of the price mechanism, the free enterprise, the system of competition and a strong and impartial state.” To be "neoliberal" meant that – in the name of liberalism – a modern economic policy was required.

So far so good, especially if everything can be traded over infinitely long times (centuries for us) with a perfectly smooth substitution of one resource for another and one product for another.  But this assumption does not hold for depletable resources, whose production does not adjust easily and instantaneously to dem…

What If There Is Peak Oil?

The Spring 2013 Semester has just ended and I am beginning to see light in the tunnel. So I can restart writing my long-neglected blog.  Many things have happened in the four months since my last entry:  Thousands upon thousands of innocent people have died in wars and ethnic/religious strife. Most of these wars have as background access to oil, gas, and drinking or irrigation water. More narrowly, Shell decided not to go back to the Arctic in 2013, and Statoil and ConocoPhillips are waiting on Shell to go to the Arctic. According to mass media, the world is awash in liquid hydrocarbons everywhere. Or is it? The question I have been asking myself repeatedly is: How do I explain things to people who in general are not interested in learning and understanding the things I am trying to explain?

I just checked Google to find out about "peak oil." Google reported that 58 million people posted something with this phrase. Then I googled the "peak oil myth."  Among the …

Arctic Oil and Sanity

As Nicholas Taleb stated in "Antifragility":
Now as a skeptical empiricist, I do not consider that resisting new technology is necessarily irrational: Waiting for time to operate its testing might be a valid approach if one holds that we have an incomplete picture of things. This is what naturalistic risk management is about. [ I.e., management of risk by nature, TWP.] However, it is downright irrational if one holds on to an old technology that is not naturalistic at all yet visibly harmful, or when the switch to a new technology ... is obviously free of possible side effects that did not exist with the previous one.  (Page 191) So what does this statement have to do with the current developments in the Chukchi and Beaufort seas?  It turns out that a lot.

First, both sides in the Arctic disputes have taken fragile, absolutist positions. Environmentalists claim that there is no technology that could ever be applied in the Arctic from here to eternity, because all technologie…

Oil in the Arctic

Picture a vast gray ocean that dissolves into gray sky pregnant with heavy dark clouds, and a gray flat sandy shore that slowly oozes up from the Chukchi Sea.  This is what our Ocean Energy Advisory Committee saw from the Coast Guard C130 plane, chartered by BSEE's Director, Admiral James Watson.

In summer, the Arctic ocean is dotted with white ice floes. In winter all is frozen.




This vast empty space is the neighborhood of Point Barrow, the settlement closest to the Burger Prospect in the Chukchi Sea. Here, Shell will attempt again to drill their first wells in 2013.  Despite Shell's valiant efforts in 2012, and hundreds of millions of dollars spent on preparations, not a single well was drilled and completed.




Here are some of the difficulties with drilling and operating offshore oil and gas wells in the Arctic, west and north of Alaska: 
Gas vs. oil. Natural gas is not oil.  Gas price and remoteness of the Arctic make offshore gas production and transport unprofitable. Let…

When Denial of Reality Fails

To my relief, Dr. Paul Krugman has published yet another sermon, When Prophecy Fails.  For months, I have been fascinated by Dr. Krugman's blithe, unwavering insistence on the superiority of his arguments over those of differently clueless economists.  Today, I decided to compose my reply.

Back in the old days, in Poland, I often listened to a lovely satirical radio program on an FM station with a short range and not much attention from censors.  Among others, each week brought an installment of a philosophical discourse, entitled "On the Superiority of Easter over Christmas." The author, Jan Tadeusz StanisÅ‚awski, a self-proclaimed Professor of Applied Presumptology, would explain in short, exquisitely absurd monologs the utter stupidity of the various pseudo-scientific arguments about economics and society. This episode, "Greed for Gold," is as good as any.  It ends with the following summary:
Why are we talking about gold, someone might ask? They also ask a…

The Global Oil Peak or a Plateau?

I am about to cover a very serious subject, so please forgive my somewhat formal and unduly precise language.  Since I am talking here about the future of our crude oil-powered civilization, I do not feel too guilty. Besides, you can always stop reading...

The six categories of liquid and solid hydrocarbons in Figure 1 are lumped together into three different combinations in the reports of global liquid fuel production maintained by the Energy Information Administration (EIA).

These combinations are:
Natural gas plant liquids (NGPLs). NGPLs are those hydrocarbons in natural gas that are separated as liquids at natural gas processing plants, fractionating and cycling plants, and in some instances, field facilities. Lease condensate is excluded. Products obtained include liquefied petroleum gases (ethane, propane, and butanes), pentanes plus, and isopentane. Lease condensate and crude oil. Lease condensate is a mixture consisting primarily of hydrocarbons heavier than pentanes that is re…

Delusions of Grandeur

In the last few days, two top newspapers in the U.S., The New York times on the left and The Wall Street Journal on the right, have come up with unusual predictions of the future oil might of our fair United States of America.  I tried to link to the "Report Predicts U.S. as No. 1 Oil Producer in a Few Years," by Elisabeth Rosenthal, published on page B1 of The New York Times on 11/13/2012, but this link did not exist. I guess, Ms. Rosenthal's article belongs to the category of All News Fit to Sweep Under the Rug. The unsigned agitprop piece in The Wall Street Journal: "Saudi America - The U.S. will be the world's leading energy producer, if we allow it,"  dated 11/12/2012, still adorns the Web.

At best, the authors of these two articles have shown a lack of rudimentary understanding of what is needed to increase oil production in the U.S. to the short-term levels implied by their narratives. At worst, they purposefully misled readers. Even the already bias…