LifeItself

In Part I of this post, I discussed production of gas from the four largest shale plays in the U.S. Ordered by production levels, these are the Marcellus, Barnett, Haynesville and Fayetteville shales. In my mind it is quite unlikely that much new drilling will occur in Fayetteville and Haynesville.  There will be some drilling in the Barnett and plenty in Marcellus, but significantly less than to date. Based on my calculations, I concluded that these plays may deliver between 3 and 7 years of U.S. gas consumption in 2015, a far cry from the 100-year gas supply postulated by many experts.  Consistently with this view, for at least three years I have argued that the large-scale oil and gas exports from the U.S. may not be good . Here I consider the two largest oil plays in the U.S.: the Eagle Ford and Bakken shales.  Eagle Ford is also a significant gas and condensate producer.  At their respective production peaks, these two shales together produced about 3 millio...

I am on a short vacation with my wife.  We are staying in my daughter boyfriend's family summer house in Casadero, 9 miles west from Guerneville, CA.  It is a very nice house in the middle of a majestic redwood forest, separated by a long forest driveway from the road. In the house, I find five white document boxes that hold an archive of old LA Times newspapers.  I open the first box and pick up at random the business section for LA Times dated May 21, 1992.  In it, my eyes lock immediately on a report bemoaning President Bush's handling of the Savings and Loans debacle, and how the government loan pools favor big S&Ls relative to ordinary people.  Then I see an article stating that people will never again look the same at investing into houses. (In May 1992, we were in the second year of a major housing slump.)   Does this sound familiar, or what?   Why have we forgotten?  I take it back: Why have most people forgotten? I have no...

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 t...

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 l earning 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 th...

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 b...

Yesterday I gave a presentation to a group of distinguished business leaders.  In my presentation, I tried to show that the global rate of production of petroleum and the associated lease condensate is at an all-time high or a "peak" that at a greatly expanded scale looks like a "plateau."  I used my published, peer-reviewed extensions of King Hubbert's approach to support my arguments. Figure 22 in King Hubbert's report "Nuclear Energy and Fossil Fuels," Publication No. 95, Shell Development Company, Exploration and Production Research, Houston, TX, June 1956. I received a significant push back from several members of the audience.  Their arguments were as follows: King Hubbert tried to address the question of finite resources and today we know he was wrong. Even though Hubbert cycles emerge for individual oil provinces, they cannot emerge for the world.  We have been predicting the peak of global oil production for a long time and it ne...

JPMorgan forecasts oil supply to fall short of demand by 600,000 barrels a day during the third quarter, even with the assumption that the Organization of Petroleum Exporting Countries increases output by 1.2 million barrels a day in coming months. The gap could narrow to 300,000 barrels a day by the fourth quarter, assuming  Saudi Arabia increases production to 9.5 million barrels a day,  Angola  to 1.7 million and  Iraq  to 3 million, though “that may prove a stretch,” the bank said. Output from those three OPEC countries in March was 8.66 million, 1.56 million and 2.69 million barrels a day, respectively, it said. As I pointed out in the April 30 blog , the runaway Global Casino speculates on everything on the Earth and distorts all prices everywhere.  Mr. Casino is totally divorced from Ms. Reality, and his current bets on a lower oil price are as imaginary as his bets to the contrary. Earthlings beware! These speculative bets and brazen market mani...

On Friday, 06 May, 2011, Professor David Summers posted on OilPrice.com an oddly emotional article,  A Look at the Serious Energy Shortages in India and Pakistan . Dr. Summers correctly points out that severe shortages of coal supply in India and Pakistan will not be quenched by imports from Australia, because China will outcompete anyone for the same coal imports. From our analysis it follows that China's coal production will be difficult or impossible to maintain at the current high level. And China's coal demand is skyrocketing despite attempts to reign in coal burning by their most inefficient industrial enterprises. Dr. Summers then goes on to say that the folks like Tad Patzek and Dave Rutledge have it wrong anyway, when they talk about the global peak of coal production and inability to satisfy demand that follows.   Well, here we are: Too much demand worldwide, and not enough supply. The coal price goes up, way up, and still not enough supply.  How does o...

On January 10, 2011 - 11:49am, the Oildrum posted an article by  Luis de Sousa  Peak Coal: the Olduvai perspective . It is an interesting article and we appreciate the author's arguments against the peak of global rate of coal production.  However, here are a few facts on the ground recorded by Greg Croft and me: Last year, China imported 150/690=22% of all seaborne steam coal traded worldwide in 2010, and projections are that China will try to import more this year.  China also has firm plans of of limiting energy use and shutting down 2,000 coal-intensive industrial facilities.  In short, it seems that China's coal production has peaked.  China produces roughly 1/2 of world's coal. The Oildrum article does not seem to address the ever-increasing mine depths that will ultimately curtail and stop coal production from these mines. Mozambique is going to become the second biggest exporter of metallurgical coal, which is not the same as the second ...