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No More Oil

Kevin Drum, Mother Jones
Reuters reports:

OPEC will hold an emergency meeting only if oil climbs above $100 a barrel and stays at that level, a Gulf delegate said on Thursday. A second Gulf delegate said the price strength would probably not last and customers were not asking for extra oil.

… Please. How many times does OPEC have to play this game for guys like Williamson to catch on to the con? OPEC isn’t sitting on its hands because they don’t want to take our yucky devalued dollars. In the short term they can hedge against the dollar just like anyone else if they want to, and in the long term they can invest the surpluses in their sovereign wealth funds in any instrument they feel like. The reason for their apparently lackadaisical attitude is much simpler: they’re already pumping at near their maximum production capacity. Iraq will probably be able to produce more someday if they manage to avoid another civil war, and Saudi Arabia claims to be working on plans to increase their pumping capacity too. Target date is somewhere around 2014, I think. But right now? What you see is what you get. The only thing an OPEC meeting would produce is yet another tortured explanation about why OPEC isn’t increasing its production quotas, explanations that usually range from the hilarious to the pathetic in their effort to avoid saying the obvious: there’s no more oil to pump, so quotas are going to stay where they are no matter how much anyone wishes otherwise.
(14 January 2011)

Jack Gerard, head of the API, answers questions

Kiran Stacey, Financial Times
In this week’s readers’ Q&A session, Jack Gerard, head of the API, the voice of the US oil industry, answers your questions.

In this second of two posts, he discusses peak oil, the potential of natural gas, and what the API’s lobbying achieves.

Earlier, he answered questions on the importance of energy efficiency, why drilling curbs should be eased and where the world will find new sources of oil.

In its 2010 Joint Operating Environment, the US Joint Forces Command warned: “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day”.

Do you agree with this? What is the position of the API on peak oil?
Lionel Badal

We take warnings about “peak oil” and “running out of oil” with a pinch of salt. Nevertheless, the world does need to be making significant investments in new oil development to ensure that supplies keep pace with demand. Governments’ energy development policies should be aligned with this reality.

How much did API spend on direct and indirect lobbying costs over the past two years at both the federal and state levels? Do you feel like you got your money’s worth? How much did the oil industry receive in federal subsidies in return?
Bob Shultis

The API’s mission is to represent the oil and natural gas industry before policymakers and the public. Thousands of other organisations representing a wide range of interests do the same work. We periodically report to the government how much we spend on our lobbying activities, and that information is made publicly available.
(14 January 2011)

What are the problems with using corn ethanol for fuel?

Gail Tverberg, Our Finite World
Brian Westenhaus, over at New Energy and Fuel, has been telling me what a good product corn ethanol is. He is very familiar with raising corn for ethanol, and can see how the process has been improved in recent years. Now it takes hardly any petroleum and chemical inputs from the farmer in order to grow a crop if corn for ethanol. The process is very mechanized, so it does not take much labor either.

He has been having some discussions with Robert Rapier, who sees corn ethanol as being a problem, primarily because of its low energy return. I see some other issues with corn ethanol, relating primarily to its competition with food, and because of this, its tendency to raise the price of food. This is a problem for poor people around the world who cannot afford high-priced food. Another concern is that the amount of corn ethanol produced will tend to decline over time, rather than being a real help when we need it.

Let me explain the issues as I see them.

1. Not a good enough energy return. …

2. Ethanol production uses resources that could be used for food production, and tends to raise food prices. …

3. Concern about damage to the environment. …

4. Requires subsidies or mandates to be salable in reasonable quantities. …

5. The amount of ethanol produced may decrease, rather than increase, over time. …
(10 January 2011)

The Hidden Pitfalls of Increasing U.S. Dependence On Canadian Oil Sands

Ed Dolan, Business Insider
Canada is the biggest supplier of oil imports to the United States.

Increasingly, those imports come from its vast reserves of oil sands.

Is the growing U.S. dependence on Canadian oil sands a win-win deal for both countries, crucial for U.S. energy security, and a source of jobs and economic growth, as American Petroleum Institute President Jack Gerard claims?

Is the development of Canadian oil sands “the most destructive project on earth”, as a Canadian environmental report calls it?

What pitfalls for policy makers and investors lie hidden in the heated rhetoric coming from both sides in the oil sands debate?

The debate places much emphasis on how just dirty or clean oil from the Canadian sands is compared with the alternatives.
(10 January 2011)