Peak oil & supplies – Oct 3

Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage.

German peak oil analyst on "Offshore oil drilling"
Dr Steffen Bukold, EnergyComment
Technical and Public Risk Assessment (new policy paper, GOB No.50)

Our latest policy study “Global Oil Briefing No.50: Offshore oil drilling – Public Costs and Risks are Too High” addresses the costs and benefits of offshore deepwater oil drilling. While most studies assess the environmental impact of potential oil spills post factum, we focus our analysis on the risks of new offshore oil drilling in an integrated perspective challenging the notion that the Deepwater Horizon was an one-off event. We provide:

* a detailed description of offshore/deepwater technical risks
* economic risks of offshore/deepwater oil
* GHG and peak oil risks related to offshore oil
* risks to energy security produced by offshore oil

Free download of the paper at: http://www.energycomment.de/?page_id=46
(22 September 2010)
The report is an attractive 17-page PDF in English. Direct link to the PDF.

-BA

Verifying the Export Land Model – A Different Approach
George C. Lordos, The Oil Drum
Tags: export land model, george lordos, jeffrey brown [list all tags]

This is a guest post by George C. Lordos, of Nicosia, Cyprus, known as Lumina at The Oil Drum. He has degrees in Philosophy, Politics and Economics from Christ Church College at Oxford University and in Business Administration from the MIT Sloan School of Management, where he specialized on strategy, finance and system dynamics. George has business interests as a Principal/Chairman in food trading, energy efficiency, renewable energy and information technology. He also makes a hobby of blogging about sustainability, energy and finance. George’s blog is at baobab2050.org.
– Gail Tverberg, TOD editor

The Export Land Model of forecasting future oil supplies available for sale to oil importing economies, which as far as I know was first presented at the 2007 ASPO-USA conference by its authors Sam Foucher and Jeffrey J. Brown, takes my “Cassandra Prize” for its importance and for the deafening silence with which stakeholders have been reacting to it, despite the mainstream media giving it some coverage.

In this post, I use a different way of grouping countries to confirm key insights of the Export Land Model.

In this analysis, a 30-year data set on oil production and consumption which is made publicly available by the U.S. Energy Information Administration is analysed in an effort to confirm the two key insights of the Export Land Model (ELM). These insights, as I understood them, were the following:

1. For oil exporting nations, the higher the level of their domestic oil consumption as a fraction of their production, the more the changes in production volume will amplify the resulting change in net exports.

2. The domestic oil consumption of oil exporting nations will, over long periods, tend to grow faster than the domestic oil consumption of oil importers because of the windfall effect of oil revenues, and will tend to continue to grow even past the production peak, especially whilst net exports remain positive.

In a country that is past its peak of oil production, the above dynamics operate together to cause the net export decline rate to be much higher than the production decline rate. If this effect appears simultaneously in many exporters, for instance due to global peak oil, the accelerated decline in net exports will disproportionately strike nations which are heavily dependent on imported oil.

The analysis, which follows below, confirms that both key insights of ELM are consistent with real-world global production, consumption and net export data from 1980 to date.
(1 October 2010)

Venezuela elections: "Chávez really bought into the idea of peak oil" (video and transcript)
Paul Jay, The Real News Network
… On Sunday, the Venezuelan people elected a new National Assembly. The Socialist Party led by President Hugo Chávez and the opposition party under the banner of Democratic Unity more or less split the vote, with a slight 1 percent advantage to the Socialist Party. On the other hand, the seats divided not fifty-fifty: 97 seats for the Socialist Party and 65 seats for the opposition. Now joining us from New York to make sense of all of this and having just returned a couple of days ago from Venezuela is Gregory Wilpert.

… JAY: So why such a disproportionate allocation of seats?

WILPERT: Basically it’s because Venezuela has a system where people elect a district representative to the National Assembly. That is, anybody in their district who has more than 50 percent of the vote, or actually even just a simple majority of the vote, gets to represent that particular district. Unfortunately for the opposition, most of their support is based in large metropolitan areas, where the districts tend to be geographically smaller but much higher density. They tend to get something like 80 percent of the vote and only one representative, whereas in the more pro-Chávez areas, which are distributed throughout the country, they get one party number of votes but [inaudible] smaller margin. And so, again, it’s very possible, even, that you have a majority of representatives from one party.

… JAY: Now, some of the critique’s coming from the left; it’s not all coming from the right or from the elite. And I guess one of the critiques is, why isn’t there more of a rainy day fund, I guess? You know, when oil was riding high, why wasn’t there more reserves established for this time when the crisis hits? And why isn’t Venezuela in better position for a recession?

WILPERT: Well, I think Chávez really bought into the idea of peak oil, that the oil was running out, and that the high price of oil that we had probably three years ago was going to stay for the indefinite future. And so they felt, you know, the price of oil and the revenues would just keep on going up, and they ended up spending just about everything that was coming in. So there was no rainy day fund, and this was really a problem. It was a miscalculation. So that caused an economic problem, and I think that brought along with it, then, also the crime wave.

… JAY: Because in terms of the Millennium [Development] Goals and the objectives of reducing poverty and increasing literacy, Venezuela has actually done pretty well, which is a story that doesn’t get out very often.

WILPERT: Yes, Venezuela’s actually one of the few countries in the world that is almost certainly going to meet the Millennium Development Goals by 2015.

JAY: But, as you say, crime’s gone up, not down, over this last couple of years, partly as the recession hit. And I know when I was in Venezuela a few years ago, there was this joke that if you get held up by a robber in the streets, don’t yell, because a policeman might come. This idea of the corruption of the police force, how legitimate is that charge?

WILPERT: Yes, that’s an absolutely serious problem, and it’s one of the main reasons that they’ve been turning to this problem so late is that the police force itself is hopelessly corrupt, and you cannot fight crime with a corrupt police force. Only in the past two years has the government really recognized that the police force itself is a problem, and has proposed and has instituted now a new national police force which is supposed to replace the local police. But that’s a very long process, because it requires the retraining of police officers and the purging of the old police forces, and it’s a very long and complicated process that’s slated to take at least five years, and by which time, of course, Chávez could very well lose another election.

JAY: So, just finally, you know, you’ve been in Venezuela a tremendous amount. You lived there for years. Do you still see the social transformation taking place? Or is the Bolivarian process a little stalled?

WILPERT: Well, I think it’s certainly still taking place. I mean, the things that people often don’t hear about, for example, is that the communal councils is a very interesting experiment that the government is pushing through, democratizing local government, essentially; also, democratizing workplaces by turning over state-owned enterprises to the workforces; a number of different programs that are probably the main reason why Chávez remains so popular in Venezuela. And those policies are continuing, and they are being deepened, as far as I can tell, also, into the future. The real problem now seems to be more of what some people call the bread-and-butter issues of, like I said, state mismanagement and things like the economy and the crime.
(3 October 2010)