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Saudis May Not Need to Raise Oil Capacity After 2009
Maher Chmaytelli and Nesa Subrahmaniyan, Bloomberg
Saudi Arabia, holder of the world’s largest oil reserves, may not need to increase its oil-production capacity after 2009, the country’s oil minister said, because conservation and alternative energy sources could curb the consumption of oil.
“As we approach 2009, we will look at our plan and see if demand warrants additional increase in capacity,” the minister, Ali al-Naimi, said at a press conference after a conference with Asian energy officials in the Saudi capital of Riyadh.
“Our feeling now is that with the thrust and push for conservation, for efficiency of use, for use of alternative-sources energy, we probably need not go beyond 12.5” million barrels a day, the capacity projected for the end of 2009, Naimi said.
(2 May 2007)
Contributor Larry Hughes writes:
If Saudi oil minister Ali al-Naimi is right and future oil demand is curtailed by energy reduction measures, then, perhaps, Saudi Arabia won’t need to increase its production beyond 12.5 million barrels per day. But if he’s wrong–and sadly there’s nothing to suggest that energy reduction measures will come close to reducing demand by 2009–the question becomes, can Saudi Arabia meet the demand? The minister’s remarks would seem to suggest otherwise.
Contributor Marc writes:
Doesn’t this fly in the face of assumptions made by the DOE, CERA, etc.? Is a cover story being prepared to explain stagnant or declining Saudi production in the coming years? It certainly strengthens the case made by many of the mavens over at The Oil Drum.
Nigeria Escalation
Jeff Vail, Energy Intelligence
The situation in Nigeria is escalating–as expected, geologically-driven declines in oil production are spawning geopolitically-driven increases in disruptions from “above-ground factors.” The recent attacks on major oil pipelines in Nigeria cut all oil flow to AGIP’s Brass Export Terminal, taking a further 200,000 barrels per day off the market. On top of that, take a look at the latest unclassified figures on kidnappings in Nigeria, courtesy of the CIA…
(9 May 2007)
Wildcats & Tigers: China’s Oil Acquisition Strategy
Jeff Vail, The Oil Drum
The following is a review of US Air Force Major Patrick Sullivan’s 2006 thesis for a Master of Science in Strategic Intelligence from the National Military Intelligence College (NMIC). The thesis examines China’s strategy to “buy equity oil interests” around the globe, the methods that they employ in that task, and the resulting impacts on global oil production and US national security concerns.
This review should also be of interest because it offers a window into the strategic thinking of the US intelligence community. NMIC is the training ground for the next generation of American strategic decision makers. I have searched every thesis paper in the NMIC system for the last 9 years-no paper deals specifically with Peak Oil. This is the only thesis that deals with the geopolitics of global energy scarcity-in this case, the rise of resource mercantilism in China.
Maj. Sullivan’s thesis is unclassified, however NMIC does not provide public access to their thesis database. I have scanned a hard-copy, and made the PDF available for download: Wildcats And Tigers: China’s Oil Acquisition Strategy and Potential Outcomes (WARNING 3MB, 130 page PDF)
Sullivan begins by noting that in 1993, China went from being an oil exporter to an oil importer, and is today the world’s second-largest consumer of oil after the US. In response, China’s leadership directed the nation’s oil companies to pursue a ‘go out’ strategy to acquire equity positions in both private and state owned oil companies worldwide. Source. Many of the resulting deals support regimes with leadership generally unfavorable to the US, such as Sudan, Iran, Venezuela, and Angola. Sullivan asks: to what extent will China’s equity-based oil acquisition strategy affect US national interests?
Sullivan’s focus on the ‘equity’ nature of Chinese oil acquisition illustrates the inherently mercantilist approach to securing future energy supplies-while China’s participation in the race to produce more oil may bring more overall resources to bear in this struggle, their ultimate aim is to lock-down a secure share of oil for their own domestic consumption. Sullivan documents their willingness to pay a premium beyond what a rational market actor would pay to secure these equity interests to ensure their future supply at the expense of others.
(9 May 2007)
Peak Oil as a Behavioral Problem
Lyle K. Grant (Athabasca University), Behavior and Social Issues
ABSTRACT: Peak oil is the point at which oil production reaches a maximum value and thereafter declines. Because of the dependence of industrialized society on oil, peak oil may be one of the most important, possibly cataclysmic, events in modern history. Averting economic damage due to peak oil is defined as a behavioral problem requiring avoidance responding as a solution. Factors that impede successful avoidance responding are examined. A risk management approach for addressing the problem is advocated.
….Behavioral Aspects of Peak Oil: Basic Contingencies
In behavioral terms, peak oil is an aversive consequence. The Hirsch report’s crash program (or some variant of it) is an avoidance response that will prevent the worst of the aversive consequence from occurring. Meeting the challenge of peak oil is therefore a problem of engaging in successful avoidance responding. Avoidance responding is such that an aversive or undesirable consequence occurs following inaction, or the failure to respond, and the Hirsch report casts the problem of peak oil in these terms.
Peak oil is an especially difficult problem due to (a) the nonrecurring nature of peak oil, (b) the delay of the aversive consequence, (c) the variability in the predicted date of peak oil, (d) the predicted aversiveness of peak oil, and (e) the nature of avoidance responding.
Peak Oil as a Nonrecurring Consequence
The once-in-history aspect of worldwide peak oil makes it necessary to discriminate the avoidance contingency in advance of the aversive consequence’s occurrence and to do so without any previous learning trials. Addressing peak oil successfully prior to the peak itself can therefore be considered as an instance of one-trial discriminated avoidance responding. In one trial, it is necessary to discriminate (a) that peak oil will occur, (b) a plausible time frame in which peak oil will occur, (c) that peaking will be a serious problem, (d) that a crash program is capable of avoiding or lessening the problem, and (e) the time interval required for the crash program to have a mitigating effect before peaking occurs. It is of course also necessary to implement the crash program. This is a difficult assignment because each of the five elements of the discrimination is contested in contemporary discussions in varying degrees, and because the program itself is a major effort that appears to require both cultural reinvention and substantial spending.
A major behavioral problem with peak oil is simply that nobody has had any practice in coping with such a unique event. One of the major contributions of successful applications of behavior analysis is to structure learning experiences so people are given lots of practice and feedback in acquiring and maintaining skills
…In addition to these basic contingency-related issues in solving the peak-oil crisis are the following challenges: (a) the resistance to change of established patterns of energy use, (b) the history of false signals of oil depletion, (c) the history of technological advancement, and (d) the aversiveness of delivering peak-oil messages.
The use of highly concentrated energy sources such as oil and natural gas has made daily life more reinforcing in many respects and has established routine and stereotypic behaviors that are highly resistant to change (Nevin, 2005). This resistance to change regarding motor vehicle use, for example, occurs even despite lethal and other harmful consequences (Alvord, 2000; Kay, 1997).
…Unfortunately, at this time the problem of peak oil is not conceptualized in terms of risk management. Instead, discussions of the issue are typically framed in terms of who is “right” and “wrong” regarding the imminence of peak oil. This mode of conceptualizing the issue, along with the problem of resistance to change, has led to placing an implicit high-stakes bet on the behavioral alternative that carries the maximum risk, which is our current course of inaction on peak oil. Right/wrong discussions are relatively unproductive in comparison to a risk management exercise that minimizes the possibility of encountering the worst consequences, adds additional environmental benefits and leaves us free to adapt to a sustainable future beyond peak oil.
FInal Notes
Many of the considerations I have discussed support Simmons’ (From the Wilderness Publications, 2003) and Leggett’s (2005) conclusion that no advance program of mitigation is likely to be implemented prior to the time when oil peaks. However, understanding the nature of the contingencies and other conditions that work against a timely mitigation program is itself part of an ultimate solution. Calling attention to the severity of a looming problem that is currently ignored can function to some degree as a motivating operation to solve the problem. Understanding cultural and contingencyrelated vulnerabilities can motivate the planning and development of alternative programs, Plan B’s, even if these programs must be carried out late, after the oil peak is reached. As Simmons (2005b) has indicated, there is currently no Plan B, no plan for an unanticipated future in which oil peaks and becomes a scarce commodity. This alternative planning will necessarily be a large-scale enterprise, yet should take place on both a personal (Power Switch, 2006) and local level (Nevin, 2005), as well as on the governmental and other institutional levels emphasized in the Hirsch report.
Behavior analysis can play a role in providing Plan B solutions, for example by drawing on and revitalizing environmental and energy-conservation research and application (Lehman & Geller, 2004). Specific solutions include encouraging the use of mass transit, supporting the development of communities that are friendly to walkers and bicyclists, reducing the subsidies for private motor vehicle use, consuming locally grown foods, encouraging energy-efficient forms of rail and barge cargo transportation, and promoting the use of distance education and telecommuting. In a future beyond peak-oil, research and application in these areas will be increasingly essential to meeting unprecedented challenges.
(Spring-Summer 2007)
A 24-page article appearing in Behavior and Social Issues:
Behavior and Social Issues is a peer-reviewed, interdisciplinary journal that serves as a primary scholarly outlet for articles that advance the analysis of human social behavior, particularly with regard to understanding and influencing important social problems. The journal is particularly interested in publishing work related to issues with social justice, human rights, and environmental implications, but all significant social issues are of interest.
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