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Hurricane Rita coverage
The Oil Drum has excellent coverage of the energy implications.
Global Public Media also has several new reports.
Natural Gas and Oil Outlook – How Serious is the Situation? Part 1
Dennis Moran, Energy Pulse
In the first draft of this paper several months ago, the title was “Is There a Problem.” The events of the last month have answered that question with a resounding YES. We now are experiencing a taste of what the future holds.
The problems have been building for quite some time and Katrina has triggered the first in a series of crises. Nevertheless, there still are many people in this county who think the natural gas (NG) and oil problems are only temporary.
They argue that high prices will trigger demand reductions and technological innovations that will bring prices back down to “normal” levels within a few years. However, the optimistic analyses I have seen typically exclude or ignore key considerations. When you consider all of the relevant supply-side and demand-side factors, it is not possible to conclude that these problems are temporary.
The latest Energy Outlook published by the US DOE predicts that oil and gas consumption will increase steadily until at least 2025. This forecast assumes that US producers and foreign suppliers will provide a steadily increasing flow of oil and gas. The data on the following pages shows that it is extremely doubtful that they can or would do so. We are far more likely to see flat or declining supply. If demand keeps growing and we do not come up with alternative energy sources, we will see shortages and turmoil that exceeds Katrina’s aftermath.
…We have begun a forced transition from a period of adequate energy supply and low prices to an era of persistent shortages… My forecast is that the transition will be characterized by a series of “boom / bust” cycles. Periods of tight supply will lead to shortages and high prices which trigger economic downturns. Lower demand during the downturns will lead to periods of adequate supplies and (relatively) low prices.
… On the NG side, we should see the first significant shortages when the period of exceptionally mild weather that began in early 2003 ends – the hot weather of this summer may signal the end of this period. North American NG production has been declining for the last few years in spite of a massive increase in drilling. Hence, periods of “adequate supply” should become increasingly shorter over the next few decades unless we experience a major protracted economic downturn. Aggressive action to locate new sources, improve energy efficiency and produce alternate fuel supplies could stretch out the “adequate supply” periods and the transition period. However, at some point in the relatively near future we will enter a period of permanent NG shortages.
Our NG problems are dominated by North American supply and demand issues, but oil markets are affected by events throughout the world.
(21 September 2005)
Some EB readers have complained at the lack of coverage of natural gas, which they see as even more critical than oil. Unfortunately, NG is not mentioned in the press as frequently as oil. Perhaps this article will encourage more coverage. See the original for figures and graphs.
Natural Gas and Oil Outlook – How Serious are the Problems? Part 2
Dennis Moran, EnergyPulse
Part 1 of this assessment painted a fairly bleak picture of the future that we can expect if we do not start taking aggressive action to reduce our dependence on oil and natural gas. Part 2 looks at the actions that can and should be taken immediately and the main barriers that must be overcome. In addition, part 2 provides a discussion of why I feel this assessment is more reasonable than the more optimistic forecasts you have seen.
(22 September 2005)
Gas may top $4 a gallon if Rita hits hard
David R. Baker, SF Chronicle
The Texas shoreline in Hurricane Rita’s crosshairs lies at the heart of America’s oil industry. A heavy blow from the storm could cripple the nation’s energy production and — in the worst case — drive gasoline prices above $4 per gallon, according to some forecasts.
Refineries that produce almost a quarter of the country’s gasoline line the coast from Port Arthur to Corpus Christi. All told, Texas has 26 refineries, 18 of them on or close to the gulf.
Offshore, drilling platforms crowd the waters between Houston and New Orleans, the thickest concentration of oil facilities on the Gulf of Mexico. The gulf accounts for about 28.5 percent of the nation’s crude oil production.
Now, a Category 5 hurricane is bearing down on the oil rigs, refineries and port facilities along the Texas coast, its strength growing by the day. Refineries, which take days to properly close, started winding down production Wednesday. Offshore platforms have been evacuated. Even some of Houston’s oil company offices are sending staff members home.
(22 September 2005)
In an oil squeeze, attention to the alternatives
Kenneth J. Stier, NY Times
The steady climb in oil prices, followed by Hurricane Katrina’s disruption of the petroleum markets, has forced a 1970’s mood of sobriety on American consumers. With gasoline at the pump hovering around $2.80 a gallon in much of the country, energy conservation is back in vogue, and the small businesses that dominate the renewable-energy industry are on a bit of a roll.
They are getting a nudge – that is the most that can be said of it – from the energy bill that President Bush signed in August and that many of them criticize as deeply flawed. They will take what they can get from it, though, they say.
But the bigger boost to their businesses comes from market forces. When the price of fossil fuels hits the stratosphere, the purveyors of solar power, wind power, biomass and biofuels suddenly find themselves very much in demand.
…The bill, widely derided by environmentalists for what they see as generous subsidies to the fossil fuel industry, does provide an array of tax and production credits that go to either the consumers of renewable energy or to the estimated 20,000 companies, most of them small businesses, that harness renewable energy sources. But critics say the benefits are relatively paltry, often poorly thought out and, worst of all, in effect for only two years.
“The energy bill tweaks everything but changes nothing,” said Michael T. Eckhart, president of the American Council for Renewable Energy.
Yes, some companies will benefit, he concedes, but not enough for renewable energy’s share of the market to grow, a goal that is being aggressively pursued in Europe and much of Asia. In the United States, nonhydro renewable sources like wind power and solar and geothermal energy, account for just 2 percent of power output.
In contrast to Washington’s tepid promotion of alternative energy, however, many states have embraced it, creating huge new opportunities for some companies.
(22 September 2005)
Before the oil runs out: the search for alternatives
John Dillin, Christian Science Monitor
To replace oil, the US needs a fuel that can power aircraft, trains, and cars. Other fossil resources, rather than green energy, may have the inside track.
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WASHINGTON – When Adolf Hitler sparked World War II, the German war machine faced a daunting challenge: It had almost no petroleum.
Despite the shortage – which some considered fatal – a powerful Nazi blitzkrieg quickly rolled back the armies of Poland, France, the Low Countries, and Britain, and it thrust far into the Soviet Union. Hundreds of German bombers pounded Britain, and swarms of German fighter planes fought off Allied attackers.
How did Hitler do it? With coal.
Operating 25 synthetic fuel plants, Germans converted their country’s brown coal into high-quality diesel fuel and gasoline. Coal provided over 92 percent of Germany’s aviation fuel and half of all its petroleum needs.
What worked in wartime Germany could hold lessons for the United States. With only 2 percent of the world’s proven oil reserves but teeming with coal, the US could turn its carbon bounty into synthetic fuels. If they’re cheap enough, synfuels could power America’s autos, trucks, trains, tractors, and aircraft far into the future and cut the nation’s reliance on Middle East oil. The US already relies on coal, natural gas, hydropower, and even windmills to heat and provide electricity for homes, offices, and factories. But for transportation – a linchpin of modern economies and national security – synfuels from coal, tar sands, and other ancient fossil deposits represent one of the few alternatives to oil.
“Only fossil fuels provide energy on a large enough scale and with sufficient versatility to meet the world’s growing demand for energy,” concluded a recent study by ExxonMobil.
…This suggests that developed nations, which inaugurated the oil era 150 years ago and kept it going with imported oil, will pioneer the alternatives as oil begins to run out.
“We have in the pipeline, in 10 to 15 years, a portfolio of [coal] technologies with near-zero emissions,” says Scott Klara, deputy director of coal-based projects for the US Department of Energy. “We don’t know when oil [output] will peak, but it will peak, and when that time comes, more people than ever will be looking at coal.”
(22 September 2005)
Note that conservation and re-localization are not mentioned at all in this CSM article. Any links between fossil fuels and Global Warming are minimized. I have the sinking feeling that dirty fossil fuels will be the official US solution to Peak Oil, never mind Global Warming. -BA
Ford plans tenfold increase in hybrids
Dee-Ann Durbin, Associated Press via Seattle Times
DEARBORN, Mich. — Gas-electric hybrid engines will be available in half the Ford, Lincoln and Mercury lineup by 2010, Ford Motor Chairman and CEO Bill Ford said yesterday.
Ford made the announcement in a speech to employees that called for a renewed emphasis on innovation and environmental leadership. Besides hybrids, Ford said the company plans to produce more vehicles capable of running on fuel-efficient ethanol and will offset the emissions from hybrid production by investing in renewable energy efforts.
Ford said the automaker will be able to produce 250,000 hybrids a year by 2010, 10 times the number it produces now. It now has two hybrid-sport-utility vehicles on the market. Ford has around 30 nameplates in its Ford, Lincoln and Mercury divisions.
(22 September 2005)
