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Sweet and sour crude
James Hamilton, EconBrowser
Differences across grades of crude oil can tell us a lot about why oil prices have become so high.
Not all the black gooey stuff that comes out of the ground is the same. Crude oil produced by different fields differs importantly in viscosity and sulfur content. The more viscous crudes (as measured by a lower API gravity) are called “heavier,” and those with higher sulfur content are called “sour” (as opposed to low-sulfur “sweet” crude).
The heavier and more sour the crude, the more difficult and expensive it is to turn into usable refined products. The price of oil you usually hear quoted (such as the recent highs of $67 a barrel) is the price of a light, sweet grade like West Texas Intermediate.
(21 August 2005)
Refers to Chris Vernon’s recent article suggesting that global sweet light oil production has already peaked.
‘Peak oil’ is coming, but country is ill-prepared United States needs energy security insurance policy
Steve A. Yetiv, Houston Chronicle
… Analysts predict that the peak will occur between 2006 and 2011, that global oil reserves are far more limited than believed, partly because leading producers such as Saudi Arabia overestimate or obfuscate their oil reserves, and that we are headed for a massive energy crunch. Such concerns may be exaggerated, but we still need to plan ahead more zealously. This is because whenever peak oil does arrive, it will likely produce three effects for which we are not prepared.
First, in the absence of serious alternatives to oil, oil prices will spike possibly to more than $100 dollars a barrel in anticipation that demand for oil will slowly outrun supply.
… Second, the Middle East will become increasingly important as a supplier, making the world more vulnerable to its vagaries. … Third, fears about peak oil may trigger conflicts among great powers. … Studies show that we can take three actions of particular importance to try to avoid this future.
First, we must view the current energy plan as a starting point rather than as a finished product. It makes some advances but fails to address a key fact: 70 percent of oil is used in the transportation sector. To deal with that reality, we will need to increase taxes on oil consumption. …
Second, we must publicize the possibility that the United States and the world economy are woefully unprepared for peak oil. This is vital because Americans, in particular, still see oil as an entitlement. America uses 25 percent of the world’s energy and has only 5 percent of its population.
Third, we need to establish a set of norms that can help great powers – and civilizations, for that matter – avoid conflicts over oil.
Steve A. Yetiv, professor of political science and international studies at Old Dominion University in Virginia, is the author of Explaining Foreign Policy.
(12 August 2005)
We originally published a link to this essay when it originally appeared in the Baltimore Sun on Aug 12. Since then, a number of publications have re-published the article. -BA
Interview: Peter Maass on ‘The Breaking Point’ for Gas Demand (AUDIO)
Peter Maass, National Public Radio
The government of Saudi Arabia — the world’s largest oil exporter — says the country can keep up with global oil demand for 30 to 50 years. But experts dispute that claim, especially since demand continues to grow in the United States and China.
Journalist Peter Maass traveled to Saudi Arabia to examine the country’s oil reserves and the Saudi government’s claims. His article “The Breaking Point” is the cover story of the Aug. 21 New York Times Magazine. He talks about the political, financial and environmental implications of continued dependence on foreign oil and dwindling reserves.
Maass is currently working on a book about how oil shapes global politics and the world economy.
(22 August 2005)
Maass had his long piece on Peak Oil published in the New York Times last Sunday — the first substantial coverage of PO by the NY Times.
Update (Aug 24). A reader points out that the NYT ran a long piece, “The Oil Uproar That Isn’t,” on July 12 by Jad Mouawad and Matthew Wald, which mentioned Peak Oil and quoted Deffeyes.
Delusion and the Media
James Howard Kunstler, Clusterfuck Nation
Delusional thinking about oil was everywhere in the media last week — as thick as advertising.
…The New York Times chimed in with a cover piece in its Sunday Magazine titled The Beginning of the End of Oil? by veteran journalist Peter Maas. It presented a story that has been around the Internet for more than a year, based on investment banker Matthew Simmons’ frequent public speeches about the apparent weakness in the Saudi Arabian oil industry (which Simmons published in book form last month as Twilight in the Desert). Apparently the Times editors have been mulling over the oil story for months and months, wondering if there is anything to it, and perhaps the movement of oil prices into the $60-plus range finally prompted them to run with it.
Maas’s article is full of howling omissions and delusions. For one thing, Maas omits any serious reflection of the consequences of a global energy crisis, any specters of geopolitical blowback, or potential problems for America’s non-negotiable easy-motoring way of life. That omission grows out of the delusional assumption that some magical market mechanism will conjure up a menu of just-in-time replacements for the vanishing oil. These are referred to as “alternative technologies,” a term that points to a more fundamental delusion now rampant among the public, namely the mistaken belief that technology and energy are the same thing, that they are interchangeable, that you can substitute one for the other. Out of oil? Get new technology.
Note to public: technology and energy are not the same things, and continuing to think that they are may place our civilization in jeopardy.
The bottom line of the Times Sunday Magazine article is that they are still not convinced that global peak oil is for real, or that we necessarily ought to be worried about it, with all that “alternative technology” banging around out there in the innovational ethers of the magical market. They bring a magisterial cluelessness to the issue — while the back pages of the Magazine are devoted to hawking the glitziest high-end products of the suburban housing bubble.
(22 August 2005)
Actual spelling of the author’s name is Peter Maass. Maass is reportedly writing a book on oil, which will perhaps address the omissions that Kunstler complains of. -BA
Peak Oil conference in London Oct 11
East Anglia Food Link (EAFL) UK
The End of Oil – Conference on Peak Oil, Food and the Economy London, 11th October 2005
A major conference examining the peak oil problem & its impact on climate change, the world’s food supply & the world economy. Speakers include Michael Meacher MP, Tim Lang & Andrew Simms (of NEF), chaired by Dr Ian Gibson MP. The conference is organised by East Anglia Food Link, CRed, Sustain and PowerSwitch.
(22 August 2005)
Is Oil Nearing Its Peak?
Robert Aronen, Motley Fool (investment advice)
[summary of Peak Oil arguments and counter-arguments]
…Which side is right? That’s the million-dollar question. The arguments contrary to peak oil suggest that reserves are much greater than those currently reported — which is true. However, oil sands and improved extraction technologies do not necessarily increase production rates; rather, these factors indicate that production can continue for a longer time. This is exactly the scenario that peak oil suggests — that once the peak production rate is reached, new finds will be deeper under the sea, farther under the ground, and more expensive to produce. Reading through annual reports of ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), ConocoPhillips (NYSE: COP), or Total SA (NYSE: TOT) confirms that a larger percentage of new oil finds are coming from these types of sources.
If nothing else, my exploration for peak oil has convinced me that the current trend is driven by strong and sustainable forces. OPEC is not withholding oil from the markets as the cartel did in 1973 or 1980, and prices are not driven by fear as they were in 1990. As for peak oil, I tend to believe market forces will eventually cause the pricing cycle to reverse. However, that reversal looks like it will be several years into the future. (22 August 2005)
