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New Fields May Propel Americas to Top of Oil Companies’ Lists

Simon Romero, New York Times
… For the first time in decades, the emerging prize of global energy may be the Americas, where Western oil companies are refocusing their gaze in a rush to explore clusters of coveted oil fields.

“This is an historic shift that’s occurring, recalling the time before World War II when the U.S. and its neighbors in the hemisphere were the world’s main source of oil,” said Daniel Yergin, an American oil historian. “To some degree, we’re going to see a new rebalancing, with the Western Hemisphere moving back to self-sufficiency.”

The hemisphere’s oil boom is all the more remarkable given that two of its traditional energy powerhouses, Venezuela and Mexico, have largely been left out, held in check by entrenched resource nationalism. Venezuela is now considered to have bigger oil reserves than Saudi Arabia, putting it at the top of OPEC’s rankings. If it opened up more to foreign investment, it could tip the scales further in the hemisphere’s direction.

Exactly how the Americas’ growing oil clout might rebalance energy geopolitics remains an open question. The Middle East can still influence oil prices greatly, its oil fields are generally cheaper to develop, and some countries in the region are endowed with great reserves.
(19 September 2011)
Comments by Jeffrey J. Brown (oil geologist, ASPO-USA board, TOD/EB contributor):
“Brazil remains a net importer of petroleum liquids, and their net imports increased from 2009 to 2010 (and increased from 0.36 mbpd in 2005 to 0.47 mbpd in 2010).

“Colombia’s net exports were up from 2005 to 2010, but Argentina’s were down. Their combined net exports increased from 0.64 mbpd in 2005 to 0.69 mbpd in 2010 (BP, Total Petroleum Liquids).

“Colombia was one of the 12 of the top 33 net oil exporters that showed higher net exports in 2010, versus 2005. And Argentina was one of the 21 of the top 33 that showed lower net exports in 2010, versus 2005.

Combined net oil exports from Brazil, Colombia and Argentina, fell from 0.28mbpd (280,000 bpd) in 2005 to 0.22 mbpd (220,000 bpd) in 2010. At the 2005 to 2010 rate of increase in their combined ratio of consumption to production, they would collectively approach zero net oil exports in about 10 years.

“Combined net exports from Canada, Mexico and Venezuela fell from 4.85 mbpd in 2005 to 3.73 mbpd in 2010. At the 2005 to 2010 rate of increase in their combined ratio of consumption to production, they would collectively approach zero net oil exports in about 20 years.

In the US, there are some good stories about rising Mid-continent production, and US crude oil production has rebounded from the hurricane related decline that started in 2005, but 2010 production was only very slightly above the pre-hurricane level that we saw in 2004, and monthly US crude oil production has been between 5.4 and 5.6 mbpd since the fourth quarter of 2009, versus the 1970 peak of 9.6 mbpd. Furthermore, we remain reliant on imports for two out of every three barrels of crude oil that we process in US refineries.”


Peak Oil and Faith Based Energy Debates

Michael Levi, Council on Foreign Relations
… As for me, I find these sorts of muddled, often faith based dustups utterly exasperating. Peak oil types tend to assume that stagnant global production over the past half decade is, in itself, evidence that oil production is headed for decline, when in reality, it doesn’t predict anything by itself. (They also tend to throw in some Hubbert peak theory, but that doesn’t really work once you pay attention to economics.) They also tend to assume that any decline will be economically disastrous, when there’s actually very little analysis of what it would really imply. On the other side, those who are convinced that peak oil is nonsense tend too often to resort to a similar sort of slippery logic: people predicted peaks in the past, but they were wrong; ergo, they are wrong this time too. Peak oil proponents didn’t realize that innovation would deliver more oil in the past; therefore, it will also deliver more oil in the future. Peak oil opponents also seem to claim that since the peak oilers have mangled their economics, the opposite of whatever they predict is what will actually happen. Not exactly sound logic.

Is there a way out of this morass? Let me try. There are three different debates being conflated here. The first is over whether geological limits are bringing the world to a point where global production must soon start to steadily decline. The second is over whether political decisions will lead global production to soon start steadily declining. The third is over what the consequences will be if either of these things actually happen.
(21 September 2011)
To suggest that the debate is “faith-based” misses the point. There is excellent discussion gong on but it continues to be ignored in the mainstream media.

At the level of ASPO, The Oil Drum and other technical peak oil sites, the argument is detailed and rational. The New York Times, the Washington Post, and other influential newspapers do not cover any of this. The Wall Street Journal had some wonderful peak oil coverage several years ago, but subsequently stopped it.

The problem with calling the debate “faith-based” is that it turns a rational problem into a verbal slugfest, with no resolution or progress possible.


Chevron loses latest stage of Amazon pollution battle

Dominic Rushe, Guardian
New York appeals judge unfreezes $18bn damages award over contamination of indigenous tribe’s land in Ecuador

A US court has dealt oil giant Chevron a severe blow after lifting a ban on an $18bn judgment against the firm for contaminating the Amazon.

A New York appeals court has reversed an earlier order freezing enforcement of the record damages award. It is the latest reversal in a nearly two decade-long legal battle over pollution in the Amazon rainforest in Ecuador.

In February, a judge in Ecuador ordered Chevron to pay damages to the plaintiffs, but both Chevron and the residents appealed, and the case has yet to make its way to Ecuador’s highest court.
(20 September 2011)

The coming German energy turnaround

Claudia Kemfert, Bulletin of the Atomic Scientists
Article Highlights

  • Germany has decided to close all of its nuclear power plants by 2022 and embark on an energy turnaround that focuses on large increases in sustainable energy production.

  • Such a turnaround is technically possible but will require an investment of about €200 billion ($290 billion) from private and public sources over the next decade.
  • Even if that investment is made, short-term electricity prices will probably rise slightly, but over time hundreds of thousands of jobs are likely to be created in the sustainability sector.

Following the terrible catastrophe at Fukushima, Germany’s government has decided to usher in a sustainable energy turnaround that entails switching off all of the country’s nuclear power plants by the year 2022. In the spring of 2011, in fact, eight nuclear power plants were immediately and irreversibly taken off line. The nuclear phase-out is not fundamentally new; in principle, Angela Merkel’s Christian Democratic Union government is re-adopting the policies of the previous “red-green” Social Democrat-Green Party coalition.

But a successful energy turnaround — one that provides sufficient electricity, holds climate-damaging carbon emissions in check, and limits electric-price increases — involves much more than shutting down nuclear power plants. There is, first, the problem of fuel mix. More than 40 percent of electricity in Germany is generated from coal, and roughly half of Germany’s coal-fired power plants are scheduled to be taken off line by 2022 due to old age. With a decline in nuclear power generation, the coal-fired segment of Germany’s energy supply threatens to increase unless an ambitious alternative energy plan is followed.

Any plan that aggressively supports expansion in the renewable sector and replaces decommissioned coal-fired plants with natural gas power stations will be expensive. Total investment over the next decade for such an energy turnaround is estimated to be roughly €200 billion (or almost $290 billion). There is good news connected to that estimate, however. The investment can come mostly from private sources, with only a partial subsidy by government. And the German Institute of Economic Research calculates that electricity prices will rise only slightly as a result of the energy turnaround, giving existing businesses little incentive to move production outside the country and potentially creating hundreds of thousands of jobs in the German renewable-energy and sustainability sectors.

Of course, not all the energy news out of Germany is good, or clean. At the moment, more than 20 new coal-fired power plants are being planned or already under construction
(7 September 2011)