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Is a Net Oil Export Hurricane Hitting the US Gulf Coast?
Jeffrey J. Brown, The Oil Drum
Building on prior work by many people, including Matt Simmons and Kenneth Deffeyes, and largely based on great technical work by Khebab, I have been intensively studying the Net Oil Export issue for more than two years.
The simple mathematical model I have been using to talk about our export situation is called the Export Land Model (ELM). Recently, data and media reports have shown that the concerns I have expressed about our export situation are growing more valid each day.
Venezuela and Mexico are critically important to the US because of their proximity to the refineries on the Gulf Coast. From what I have been able to discern, it takes an average of about five days for a tanker to get to the US from Venezuela and Mexico versus about 30 days from the Persian Gulf. Based on recent news reports, it certainly appears that the overall net export decline from Venezuela and Mexico is continuing into 2008.
So, what has happened to net oil exports from Venezuela & Mexico to the US and what effect has had this had on Gulf Coast crude oil inventories, and why am I concerned?
… So, in looking at those numbers it seems quite possible that we are seeing some real, tangible near term effects from the ongoing net export declines from Venezuela and Mexico, and it’s possible that we could see some problems with refined product deliveries in the Gulf Coast area in the very near future, perhaps in a matter of weeks if the trend were to continue, and there seems no reason to expect it not to.
What would result from this? Well, first we would then almost certainly see calls to release oil from the SPR. The problem of course is using emergency reserves to offset a long term decline in oil exports from two key nearby oil exporters. Venezuela is showing a long term net export decline, and Mexico is on track to approach zero net oil exports by 2014. In October, 2007 these two countries accounted for more than 20% of total US petroleum (crude + product) imports.
At the very least, this situation may force an earlier recognition of our long term problem with net oil exports. One risk is that oil from the SPR will be used to perpetuate the myth, for a little while longer, that we can have an infinite rate of increase in our consumption of a finite energy supply.
This is a guest post by Jeffrey J. Brown, known on TOD as westexas. Jeff is an independent petroleum geologist in the Dallas, Texas area. His e-mail address is [email protected].
(2 June 2008)
Opec piles on the pain
Seatrade Asia Online – Maritime News
… “If China were to use the same amount of oil per person as Europeans, it would require an additional 36 million barrels per day, about the same as the oil production of four Saudi Arabia’s,” John Westwood, chairman of energy analyst Douglas-Westwood told delegates recently at the All Energy Conference in Aberdeen, Scotland.
The “peak oil scenario” is approaching far more quickly than anybody expected, he said. And a number of key experts now believe that the world will never exceed its current level of production as new fields fail to compensate for declining ones. “Underlining this view are recently published statistics that suggest oil production from ten out of the top 13 international oil companies, including BP, Chevron, Total and Shell may has already passed its peak,” he said. And whereas oil majors controlled about 80% of the world’s oil reserves in 1970, the same percentage now lies in the hands of national oil companies. “In our view,” Westwood concluded, “conventional energy supplies cannot meet demand and unless properly managed this could severely impact world economic growth.”
(2 June 2008)
What they said on hot energy topics
Reuters
LONDON – The following are comments on a number of key energy issues from speakers at the Reuters Global Energy Summit in London:
PEAK OIL …
– Nobuo Tanaka, Executive Director of the International Energy Agency: “I am always asking my staff is there peak oil coming. Before 2030, we don’t think we need to worry. We have abundant resources under ground, so the issue is over ground.”
“I’m not siding with peak oil.”
– Lars Josefsson, President and Chief Executive of Vattenfall, Sweden’s state-owned utility: “I would not get into the religious debate about peak oil, but I think the world will have big difficulties in significantly increasing its oil production.”
“Global investment levels are too low …. Oil will come from places more difficult, more distant, more costly and on top of that oil is in areas that don’t have stability.”
(2 June 2008)
Mr. Tanaka’s confidence that peak oil will not occur until 2030 is surprising, given the lack of data from important oil-producing countries, such as Saudi Arabia.
Other articles at Reuters Industry Summit: Global Energy June 2-5
-BA
ASPO newsletter for June (PDF)
C.J.Campbell, ASPO
1044. The Scottish Parliament draws attention to Peak Oil
1045. An Arms Race for Oil
1046. Further Revision
1047. The Changing Role of OPEC
1048 Date of ASPO-7 International Conference
1049. Russian Oil Production
1050. The Atlas of Oil and Gas Depletion
1051. Growing Awareness of Peak Oil.
1052. ASPO SWITZERLAND
1053. ASPO-USA
1054. Britain too comes to recognise its energy crisis
1055. A Noteworthy Centenary
1056. Energy Mix
(2 June 2008)
Oil Price Drivers—a Look at the Fundamentals
Tom Standing, ASPO-USA
… With all the back-biting and finger-pointing about high prices at the pump, we might take a time-out and examine with a cool head the driving forces behind oil prices, aside from the oft-cited effects of the falling dollar and new investors flooding into commodities.
Skyrocketing Coal Prices
Other energy commodities are setting price records. Natural gas is near record levels, but oil prices are double those of natural gas based on the same heat value.
Coal prices have risen in concert with oil. Last week Australian coal was priced at $134 per tonne; its high was $142 in February. The same grade of coal was $23.25/tonne in May 2003. The price of oil is almost four times higher than coal for the same heat value.
Crude Oil Inventories
The balance between supply and demand is critical to oil prices, but accurate numbers are not known for 3 or 4 months after the fact. Analysts follow supply and demand trends, but investors want to know how they are balanced NOW!
(2 June 2008)
Newsnight interview
David Strahan, blog
My interview on Newsnight last Friday can be viewed for another five days by clicking here. There is a package on oil about 14 minutes in, followed by the intervew.
(1 June 2008)
David Strahan is a UK journalist who writes frequently on peak oil. The interview is only available to play in the UK.
