free html hit counter Peak Oil Debunked: 362. MORE SURPLUS OIL PROBLEMS

Sunday, June 15, 2008

362. MORE SURPLUS OIL PROBLEMS

Inconsistencies are appearing in the "not enough oil" theory of the recent price rise. We've previously seen that Iran has been accumulating unwanted oil in tankers, as reported by Bloomberg:
June 2 (Bloomberg) -- Iran, OPEC's second-largest oil producer, increased the number of tankers idling in the Persian Gulf to at least 14, indicating it may be storing more crude, ship-tracking data show.

Iran has at least 14 very large crude carriers, or VLCCs, floating near Kharg Island, a loading facility. In April, there were 10, holding at least 20 million barrels of oil, people familiar with the situation said at the time. Shipbrokers also reported that Iran hired three more tankers, which have been near Kharg Island for at least two weeks.Source
Now the surplus crude problem has expanded to Kuwait and Saudi Arabia:
Kuwait and Iran on Wednesday joined Saudi Arabia in slashing the price of their heavy crude exports to the deepest discounts in at least nine years, seeming to support OPEC's view that the world has enough of its supplies.Source
It turns out that we've got a heavy oil glut. The physical oil is being discounted, to make it move.
Saudi oil minister Ali al-Naimi said last month Saudi Arabia had boosted oil output by 300,000 barrels per day and would achieve 9.45 million bpd in June to meet rising demand and to compensate for lower output from other producers.
The kingdom's state oil company Saudi Aramco is due to inform refiners how much crude they can lift in July later on Wednesday or on Thursday, refinery sources say.
But refiners expressed little interest in additional crude supplies, especially if these were of the heavy type.
"We just asked for full term volumes, not for extra volumes," one trader with an Asian refiner told Reuters. "Supply is not tight anyway. Heavy sour crudes are under pressure this month."Source
So it's clearly a distortion to call the current situation an "oil shortage". It would be more accurate to call it a shortage of refining capacity. Why is there a refinery shortage? Well, in the U.S., this will give you a clue:
Refiners faced with rising prices for premium grades of crude oil are rushing to expand their ability to process less expensive, dirtier crudes, but their efforts face concerns about pollution and global warming.

Several expansion projects in the U.S. are being slowed by worries that the processing of heavier crudes produces more air pollutants and greenhouse gases that contribute to climate change. While environmentalists have long been critical of heavier crude, government officials responsible for signing off on expansion projects are echoing that unease and demanding countermeasures to reduce the amount of pollution.Source
Yup, NIMBYs and global warming activists are jacking up the price of oil. "Not enough oil" is just the cover story. LOL.
-- by JD

61 Comments:

At Sunday, June 15, 2008 at 6:16:00 PM PDT, Anonymous jd was wrong said...

NIMBYs, global warming "activists" and of course speculators but of course not supply...

the US is just one country, what about all the other countries? the fact is you said it was heavy crude. this just shows all the high quality oil is gone. what's left is tougher and more expensive to refine. we'll build more refineries but we're behind right now because oil was in a bear market and it didn't pay to invest in refineries(as opposed to tech stocks that rocketed every week). before someone says we haven't built a new refinery in years because of the environmentalists you're wrong. we had an overcapacity and they actually shut refineries DOWN and others just expanded capacity. people didn't want to build them because you didn't get a return on your money.

 
At Sunday, June 15, 2008 at 7:40:00 PM PDT, Anonymous imagine that! said...

The US Congress is trying to make new refineries that handle heavy crude, tar sands, and shale oil impossible to build within the US--due to carbon dioxide emission concerns!

Who needs peak oil when you have such morons managing energy policy?

 
At Sunday, June 15, 2008 at 8:22:00 PM PDT, Anonymous Shiner said...

The Oligarky that runs the USA may be worried about wasting resources. Looks to me like they know that by inflating the US dollar it will be dumped by the international community sooner or later. The USA will then probably have to get by on its own production (maybe Canada will stick with us?). We have enough refining capacity to do that now. The bankers can't seem too help themselves and have to get those interest payments even if it ruins the USA.
The fact that the OPEC countries seem to be going into the gasoline buisness may be an indicator peak/decline oil is near.
The way to earn the most money off of crude is to make petroleum/petro by-products. OPEC seems to want to wring as much resources as possible for themselves out of what is left.

Shiner

 
At Sunday, June 15, 2008 at 9:42:00 PM PDT, Blogger bob said...

it's a global economy.

and not counting the atl fuel/ethanol refineries,...

India, Syria, Viet Nam, China, Saudi, Oman, Jamnagar, Leon, Sarnia, Fujairah, Morocco, Iraq, Kuwait, Cuba, St. Clair, St. John, New Brunswick, Ecuador, Malaysia, Russia, Libya, Canada,... all countries where the new, modern day heavy crude refineries are in the process of being built, or coming online as we speak.

bring on the new jack heavy.

there is no shortage.

 
At Sunday, June 15, 2008 at 10:52:00 PM PDT, Blogger Ari said...

A little oil supply increase will help mitigate the short run, but I honestly hope the price doesn't drop much below $100/barrel. The longer it stays elevated, the more quickly people will ditch their cars or get hybrids!

Onward, to PHEVs and Teslas!

 
At Monday, June 16, 2008 at 2:39:00 AM PDT, Anonymous Luis Dias said...

If there's no shortage, and even saudis are woth excess production, how come they are ramping up production by 500.000 bpd starting july 2008?

That doesn't make much sense, JD.

 
At Monday, June 16, 2008 at 5:42:00 AM PDT, Anonymous Mordred said...

JD Was wrong said...........
"NIMBYs, global warming "activists" and of course speculators but of course not supply...

the US is just one country, what about all the other countries? the fact is you said it was heavy crude. this just shows all the high quality oil is gone. what's left is tougher and more expensive to refine. we'll build more refineries but we're behind right now because oil was in a bear market and it didn't pay to invest in refineries(as opposed to tech stocks that rocketed every week). before someone says we haven't built a new refinery in years because of the environmentalists you're wrong. we had an overcapacity and they actually shut refineries DOWN and others just expanded capacity. people didn't want to build them because you didn't get a return on your money"

So its a refinery shortage then....
Im not really sure what your point is.
Still no evidence of supply shortages that i have seen. Where are the queues at the pumps?

 
At Monday, June 16, 2008 at 8:35:00 AM PDT, Anonymous commoditybubbleisbs said...

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_pauly&sid=ajng_KrbuVbA

I think the whole commodity space is in a bubble when you hear stories about how dandelions have gone up by a factor of 7 in 6 years. Last time I checked dandelions are a completely useless weed.

 
At Monday, June 16, 2008 at 8:51:00 AM PDT, Anonymous commoditybubbleisbs said...

ohh and btw, the next time you read a Goldman or Morgan report on oil, keep this article in your mind

http://www.bloomberg.com/apps/news?pid=20601109&sid=aboqiSz1AZm4&refer=news

 
At Monday, June 16, 2008 at 8:57:00 AM PDT, Blogger Anaconda said...

To JD: This writer likes your blog, you have good information, but respectfully disagrees with this analysis.

Refinery capacity shortages would cause GASOLINE prices to go up, but cause OIL prices to go down, because unrefined oil has little value -- it's the refined stuff that gets sold to the end user that has value.

There are four factors increasing the price of oil.

1. "Peak" oil belief has sunk into the oil markets.

2. A production plateau has encouraged "Peak" oil beliefs.

3. The Falling Dollar in international currency markets.

4. Hoarding, which is a form of speculation. That seems to be what JD is describing by Iran (with Iran, it may be a form of "price protection", a cousin of hoarding) and others, even including hedge funds and investment banking houses.

However, the production plateau is the result of an investment lull in the late 1990s and early 2000s when oil briefly dipped below $10 a barrel.

A huge territory has opened up in the continental margin areas all over the world, plus continental shelf. This oil is expensive to "lift," around $70 a barrel, but the oil is plentiful.

Check out the Oil Is Mastery website which focusses on the ultra-deepwater deep-drilling sector of the oil industry.

"Peak" oil is Bull. There is plenty of oil, but it is more expensive to physically lift.

Gone are the days when it cost $5 a barrel to lift oil at the wellhead. At least if you aren't Saudi Arabia.

 
At Monday, June 16, 2008 at 10:23:00 AM PDT, Anonymous Anonymous said...

This may not be completely on topic, but it is related because it involves the two main "gloom and doom" threats today - peak oil and climate change. It's interesting. I found this blog because I started to question if the Peak Oil people were wrong. This blog has restored my hope in the future. I had given up on starting a business or any of my other goals because it seemed futile. My biggest goal was to homestead to save my family as much as possible. I cannot express how wonderful it feels to have a future again. Really life changing. Then, my remaining concern about the future was climate change or global warming. I became as open minded about global warming and found out some startling things. Check out what the other side has to say. You may be surprised.

 
At Monday, June 16, 2008 at 10:25:00 AM PDT, Anonymous Anonymous said...

Anaconda,

Its unfortunate that you should feel you have to preface your disagreement with JD's flawed analysis by first praising him. JD as a person who is putting his commentary out for criticism, does not need to be let down easy, in fact, he needs to hear the merciless, hard truth when he's wrong, which is unfortunatley quite often.

"Peak" oil is Bull. There is plenty of oil, but it is more expensive to physically lift.

This comment betrays your misunderstanding (perhaps misrepresentation?) of Peak Oil Theory. Does it need to be restated that Peak Oil doesn't mean "not much oil left," or that EROEI and diminishing returns are key facets to peak theory?

- Patrick

 
At Monday, June 16, 2008 at 11:36:00 AM PDT, Anonymous Patrick said...

JD,

Taking a moment to reply to your scornful and sarcastic response to me back in #359, it dawned on me that you may simply be too invested in your position to recieve criticism or even reasoned debate well. I don't say this lightly, but you increasingly come off as intellectually dishonest and shamefully ignoble in your arguments and tone, respectively.

When you said to me, "I selected the name of the blog for marketing purposes," a lot became clear. You're essentially admitting to deception by this practice, and you don't see anything wrong with it. So long as "debunked" drives traffic your way, it apparently doesn't matter that the one thing you're not doing is debunking Peak Oil.

Your chastisement to "chime in again if you ever get a point," was quite telling, since you completely ignored the point in my post: that you need to seriously reevaluate your position and move toward some rapproachment with those you've become alienated from because of your erroding credibility and recalcitrance.

This isn't going to be accomplished simply by changing your tone, though that would certainly help. A true clarification in the subtitle is in order, but half-measures will only serve to further discredit you. Somewhere along the way you came to your senses and realized that "fascist underbelly" was sensational and foolish and you removed it, why not follow through?

- Patrick

 
At Monday, June 16, 2008 at 12:17:00 PM PDT, Anonymous Freak said...

If I never had googled peak oil debunked, (as in cannot be debunked by the doomer crowd) I would probably still be in my basement being depressed, chain smoking, and waiting for the end of the world...

 
At Monday, June 16, 2008 at 1:32:00 PM PDT, Blogger regeya said...

I don't think anyone, including JD, would argue that peak oil wasn't a real phenomenon. Peak Oil, however, is a doomsday cult, and deserves to be ridiculed.

 
At Monday, June 16, 2008 at 2:11:00 PM PDT, Anonymous Patrick said...

regeya,

That's just the thing - "peak oil" doesn't confer a "doomsday cult," and JD never bothers to separate the wheat from the chaff. He's not claiming to debunk "doomers" and the like, he's billing his blog as an all-out assault on peak oil in general, and he goddamn well knows it.

He's made weak and trite guilt-by-association arguments attempting to tar people who disagree with his shoddy analysis as somehow in league with people who offer similarly shoddy analysis from the "doomer" perspective. In short, he's demagoguing for effect.

He's staked out a position and right now, it seems that no amount of facts or informed opinion is going to decouple him from the albatross of "Debunked" that he's chosen to hang around his neck.

- patrick

 
At Monday, June 16, 2008 at 2:49:00 PM PDT, Anonymous Freak said...

Have you been to dieoff.org?

your scathing indictment of JD might benefit from keeping in context with what he is up against... you criticize him for saying debunked, but honestly have you even bothered to look at what fatalistic sensationalism parades around wrapped in the peak oil banner?
so argue over semantics if you must, but has he really missed the mark?
will the average person misunderstand the purpose of this blog? I think not.

 
At Monday, June 16, 2008 at 3:07:00 PM PDT, Anonymous Patrick said...

Freak,

Yes, I believe the average person IS being misled by JD. That's why he chose the name he did. He's admitted to this deception.

Peak oil is NOT defined by sensational doomers, OK? They do no not have proprietary control over it. JD made the mistake of staking out an unsupported position and has had to backtrack ever since. Its like writing a headline before doing any reporting or research.

He now dismisses his error by saying its just his little harmless indulgence in false advertisement.

Do you think that if he were acting in good faith and in the spirit of true skepticism, that he would have "disclaimer for idiots" on the page? I would imagine there are a lot of surfers who come here in food faith, seeking a serious refutation to peak oil, on geological, economic, and sociological grounds, but all they get is JD's half-measured and mean-spirited admission that he hasn't debunked anything, and reactionary analysis.

He'll do the same thing that the truly paranoid doomers do: cherry-pick some newsbit favorable to his presuppositions, offer his earnest but flawed analysis, call it a day.

- Patrick

 
At Monday, June 16, 2008 at 3:48:00 PM PDT, Anonymous patrick said...

er, in good faith, i should say.

 
At Monday, June 16, 2008 at 4:53:00 PM PDT, Anonymous Mordred said...

I think Patrick has taken offence at JDs reply to a previous post and is now hell bent on bringing him down. I have to say, your post in 359 was a little redundant and had been stated many times before. Im not surprised that JD dismissed it like he did.
And if you dont think peak oil confers a doomsday cult, just take a little trip to LATOC.

 
At Monday, June 16, 2008 at 6:21:00 PM PDT, Blogger JD said...

Patrick,
Let me show you something. Go to page one of a Google search for "peak oil", like so. Now scroll down to the bottom of the page. See "Peak Oil Debunked"? Right there ahead of Energy Bulletin and Kunstler etc.? That's me.

The title of my blog is far from being an albatross. It's a huge asset. So... if you're not happy with it, you can sit on your thumb and rotate. The title and my attitude are CAST IN STONE.

Now, if you have any substantive comments to make about peak oil issues, by all means do so. However, if your only point relates to trivial navel-gazing bullshit like the title of this blog, take a hike. Any further comments from you along those lines will be deleted on sight.

 
At Monday, June 16, 2008 at 8:30:00 PM PDT, Blogger Anaconda said...

To Patrick:
This writer understands "Peak" oil theory perfectly well. As a rehash: "Peak" oil is when half of total supplies of oil have been consumed; and many "Peak" pushers, though not all, believe a steeper decline will happen than the rise, causing havoc.

So, no misunderstanding or misrepresentation.

"[N]ot much oil left," are your words not mine, so who is misrepresenting who?

This writer's quote was positive: "there is plenty of oil." And, while admittedly, slightly inexact, conveys the idea this writer wanted to get across: "Peak" oil will not happen anytime soon.

Of course, you didn't respond to the two main contentions in the comment: the high price is not the result of being at physical "Peak," and there are vast areas that have not been explored, and potentialy contain the largest deposits of oil yet, excepting Saudi Arabia's Ghawar and a couple other super-giant oil fields.

Be careful when you jump to conclusions about others' motives.

Patrick, what do you make of the oil producing potential of the continental shelf and margin?

 
At Monday, June 16, 2008 at 10:33:00 PM PDT, Anonymous Ryan said...

http://www.independent.co.uk/environment/green-living/fade-to-black-is-this-the-end-of-oil-845092.html

FYI: Read the cultish undertones of this article...it's almost laughable for a major paper.

Colin Campbell is the high priest of peak oil

Matt Simmons & Boone Pickens are now prophets

Two quick points:
1. peak oil is a geologic phenomena that will eventually occur. It may be caused by peak demand, or new alternatives or whatever, but it will occur.

2. "Peak Oil" is a cult. ASPO, Colin Campbell and Matt Simmons are somewhat ridiculous in that they spout off every chance they get and have so many illogical inconsistencies in their arguments a 10th grader could pick them apart.

If you listen to the shocked responses of the "
Peak Oil" crowd at even the very notion of being challenged a little bit, they lash out with a holier than thou, how dare you challenge us attitude. As someone who's trained in negotiation and psychology, people who react like that typically find themselves on shaky ground personally and try to scare the other person out of their opposing viewpoint.

EnergyBulletin, LATOC, TheOilDrum, dieoff.org, etc., are NOT unbiased news organizations and I personally believe that any data presented there should be taken with an entire salt shaker of salt.

JD has done a pretty good job in breaking their arguments down.

 
At Monday, June 16, 2008 at 11:27:00 PM PDT, Anonymous benny "peak demand" cole said...

A great post. By the way, a few months back this: ""Globally, Wood Mackenzie expects 8.1 million barrels a day of crude refining capacity to come online by the end of 2010, reflecting the construction of 17 new refineries and expansion of 80 existing refineries." From the IHT July, 2007.

If some of that capacity is for heavy crude, we will seen a honking glut in a couple of years.
This is how last price bust happened: Tankers without a home for their crude. Now Iran is piling them up already.

The fact is, global crude and condensate is hitting all-time records, even with Thug States and delays socking in several, maybe 10, mbd. Jeez, what happens if Iran, Iraq, Libya, Venezuela, Nigeria, Russia and Mexico ever rejoin civilization?

Meanwhile, Kuwait, Canada and Brazil are ramping up production.

And demand is flatlining at best. Germany's demand in 2007 off 10 percent from 2006. The USA will use less, not more crude oil every year from now on, barring a price collapse.

We are seeing Peak Demand at these prices. If these prices hold (and I suspect a major collapse at some point, either fast, or long and slow) we will transition to a post-fossil economy. The Volt, and other EVs will actually bring to us cleaner air, quieter cities, and more domestic jobs. What is not to like?

But, it may just be pipe dram. Oil may dump.

 
At Tuesday, June 17, 2008 at 12:10:00 AM PDT, Anonymous Freak said...

What happened really?

15 years ago in the US everybody drove Honda Accords, and lived about 3-5 miles from work. gas got cheap, lots of people made lots of money in the late 90's and then everybody went nuts bought huge v-8 suvs and moved into McMansions out in the middle of exurban nowhere. oh yeah, and we got in a military boondoggle in one of the worlds largest oil producing nations.
everybody bought cheap crap from china sent all of our money over there they invested and now are an economic force.

It is not some mystery how we all got here, it is not geology, it is short sightedness, gluttony and sloth.

I don't remember having to use rocks sticks and mud to build huts back in 1994, but I do seem to remember being able to see the road ahead of me in traffic (and there was a little less) instead of having to look at GMC YUKON XL my whole way home. oh yeah, and come to think of it I remember all the places where the nice pretentious neighborhoods are now used to be the middle of nowhere 50 miles out from downtown.

So, we have cars that are 3 times as big use 3 times as much fuel and we drive them 10 times as far, to go home and ride around on the lawnmower for an hour cutting the grass that used to be farmland?

yes, I know I am echoing the doomers, but...this is a fad, and people are bailing on there exurban homes and trading their Suv's for hybrids as fast as they got them.

I could turn this into a cultural rant, but I guess my main point is I am pretty sure we don't have to go back the the stone age, but maybe we have to go back to a crazy time called 1994.

 
At Tuesday, June 17, 2008 at 3:24:00 AM PDT, Blogger Barba Rija said...

"EnergyBulletin, LATOC, TheOilDrum, dieoff.org, etc., are NOT unbiased news organizations and I personally believe that any data presented there should be taken with an entire salt shaker of salt."

Of course they aren't. Sometimes, by only reading their headlines I just quit the site "on sight", avoiding my impetus of calling their bullshit on them. But I refrain myself of that.

Some other times, they do present useful knowledge and I acknowledge I've learnt a lot in that site. There are always the so-called "cornucopians" as Stuart Staniford and the likes, who present hypothesis based on the heretic presumption that we won't go bananas with this shit. Those were often great posts that defied the doomer in those sites.

So it's not as if they are some kind of "Fox news" of Peak oil. They are mostly just scared little brats screaming at all the breezes they feel around their skins.

 
At Tuesday, June 17, 2008 at 11:44:00 AM PDT, Anonymous Patrick said...

Freak,

I think you're oversimplifying. There was no magical equilibrium or sustainability about the early 90s, and you're negating the fact that there are now another 40 million people in the US alone, who will demand and compete for ever smaller slices of the reduced energy pie.

While I too loath the shortsighted embrace of SUVs, McMansions, and exurbia, I don't believe that this is easily reversible. What it is definitely not, is a mere "fad." Do you think that many US cities have the capacity to readily re-urbanize their orbiting suburban populations? I don't.

While sales of SUVs are cratering, which is great, I don't believe that people are going to readily take a fraction of the book value of their SUV (which they may be upside down on) and sink that into a hybrid vehicles, which still remain relatively expensive. Some are betting that gas will come back down, some simply have no financial leverage to make such changes. Replacing the US fleet of vehicles will take at least a decade.

What truly happened was that the US didn't learn a lasting lesson from the 1970s and rather than moving to reduce our energy consumption, we've greatly increased it for over 30 years.

Referencing bricks, sticks, and mud is a straw-man argument. Serious people who are concerned about these changes think about future situations in much more complex and intelligent terms.

We haven't yet found what a sustainable level of energy extraction is, but I can assure you that the consumption level of 1994 combined with the population level of 2008 aren't going be reconciled without serious problems. This is not doomer-speak, and I resent anyone that seeks to misrepresent it as such.

There is great value in debating and scrutinizing all of this, with a strong eye to skepticism and optimism.

JD -

Threats of censorship and angry cursing don't much impress me, but reflection and intellectual
honesty do. You're certainly capable of this, but so far, you've adopted a mantra that won't allow you to admit where your analysis is flawed and your positions untenable. By the way, I followed your suggestion and found that your blog does not come up on the the first page of Google returns for "peak oil," as you claimed, but rather the third, far behind Energybulletin as it were. But this is immaterial to my point, which was NOT that the title of the blog is an albatross in terms of traffic it generates, but that you don't meet its explicit promise. You don't debunk peak oil, plain and simple, in fact you acknowledge it. By the way, when is "someday" exactly?

This obvious contradiction degrades your credibility from the get-go.

- Patrick

 
At Tuesday, June 17, 2008 at 12:15:00 PM PDT, Anonymous Jake said...

Patrick

Do you know when "someday" is exactly? I didn't think so. Honestly you come off as a doomer. Why harp on the title of JDs blog so much. Why not go harp on LATOC for all of it's misleadings? Perhaps JD has retracted some. But who hasn't in the "Peak Oil" community? Everyone has. Look at all the heavy rivisons that have been done to sites like LATOC.....Look at how many times Colin Campbell or Matt Simmons has inserted their foot into their mouths only to retract later on. So what is your point exactly? That JD used a misleading title to get hits? I can think of a few others who do this as well. By constantly pointing out the same thing over and over is imo weak.

Serious problems, huh? How do you exactly know what types of problems we'll face in the future? You're now stating something as if it is a fact. This is what I can not stand about many in this movement is that too many of you state that "this WILL happen" all too often. Which imo would degrade your credibility. As you know no better than I or some random 5 year old child does about our future. We can only speculate nothing more.

 
At Tuesday, June 17, 2008 at 1:53:00 PM PDT, Blogger Artie said...

Yup, NIMBYs and global warming activists are jacking up the price of oil. "Not enough oil" is just the cover story. LOL.

Laughing out loud at your little strawmen; the nasty environmentalists are to blame for high oil prices. What a cynical crock of BS. I'll bet you find the flooding in the Midwest a real knee-slapper.

 
At Tuesday, June 17, 2008 at 2:07:00 PM PDT, Anonymous Freak said...

"Serious people who are concerned about these changes think about future situations in much more complex and intelligent terms. "


you are right, and the more complex and seriously we think about these things the more impossible they become psychologically.

The people who engage in working toward positive change through planning, and conservation, and scientific optimism are attacked for being delusional.

The only complex thought that people are allowed to have by the doom movement is the one that allows us to focus on the various complex and horrible disease ridden anarchy death and destruction scenarios.

Why can't people take a loss on their bloated lifestyle?
I have, it's how people learn. Go through a foreclosure, a repossesion and a bankruptcy, and layoff. you don't die, you brush yourself off, and try to figure out how not to do it again, this is how you gain wisdom, and useful life experience. and maybe if this happens on a mass scale, who knows people might start to reach out to each other again and work together abandon their paranoia and stop being so vain and selfish and begin
to cooperate again.

and can we not let JD slide on not calling his blog Peak Energy Debunked?

 
At Tuesday, June 17, 2008 at 2:12:00 PM PDT, Blogger regeya said...

"He's not claiming to debunk "doomers" and the like, he's billing his blog as an all-out assault on peak oil in general, and he goddamn well knows it."

Apparently, you missed the disclaimer.

 
At Tuesday, June 17, 2008 at 4:02:00 PM PDT, Blogger Anaconda said...

To Patrick:
See, you prove my point. You are so gripped by "Peak" oil that to "let cross your lips" any acknowledgement that "Peak" is NOT, here, now, or right around the bend can't be allowed.

But what is the harm of acknowledging there are large, virtually unexplored areas on the continental shelfs and margins of the world?

What would be the harm of acknowledging that oil geologists are predicting these "tectonic margin" areas, which most are offshore, will be significant oil producing regions in the next 20 years?

Because it's heresy for you.

To acknowledge any doubt could compromise your "faith" in peak oil theory.

How many times do "Peak" prophets have to be wrong before you question your own belief?

But truth is, Patrick, you couldn't respond at all.

Not the the price arguments.

And not to "grasp the nettle" either.

Until you or anybody else, for that matter, can "grasp the nettle" of opposing arguments, on whatever point, your presence is as the whining of a bug: Unpleasant, but essentially inconsequential.

 
At Tuesday, June 17, 2008 at 4:43:00 PM PDT, Anonymous Anonymous said...

Not to revist the past in a very "I told you so" kind of way...but let me point out this recent article:

http://money.cnn.com/2008/06/03/news/companies/autosales/?postversion=2008060314

I don't know if anyone still posting or reading here even remembers the discussion section from post 309 "Accelerating Progress". But at that time, I made some predictions about what was going to start happening in the face of approx $4 per gallon gas ---
"c.) Someone besides Sumyung Bubba who doesn't identify his penis quite so much with the size of his truck might become interested in buying a 2006 Honda Civic hybrid, which gets almost 50 mpg.
d.) Before Western civilization collapses due to Peak Oil (probably before gas is even $4 a gallon at the pump), you'll start seeing more Sumyung Bubba's, Jacks, Joes, and Kevins consider an amazingly high-tech solution to reducing their gas consumption: car-pooling. Sure, car pooling is inconvienent, but then so is $4 per gallon gas. Heck, for me, *current* gas prices are inconvienent already." ---

Well, gas is at $4 a gallon and US oil consumption has already started declining. Meanwhile, unlike what Hordingammo thought, the world didn't come to an end. Here it is, 2 years later.

Here I am, in a different state now, and I can tell you that there is still LOTS of conservation that can be much more easily done than buying a Ford Focus. It's called "NOT driving like an idiot on the interstate into downtown".

No kidding. I STILL see folks (who I guess can afford $100 per tank fillups) in F-150's, Expeditions, Escalades, etc., go screaming by me on the road at 80 mph. Talk about low-lying fruit waiting to be picked. Want to seriously reduce gas consumption? If those nuts would just slow down to 65mph their mpg would seriously improve.

I dunno. AFS Trinity can make a freakin' 150 mpg SUV...proven. Meanwhile I have idiots I share the road with who could easily achieve more spending money by just slowing down to the speed limit. I dunno.

Still seems to me that there's a LOT that could easily be done by common Sumyung Bubba to reduce gas consumption and thus help buy time for new solutions (like, I dunno, freakin 150 mpg SUVs? ) to the "slow emergency" of peak oil.

Maybe that's just me. Omintir, Freak, you guys still around? Engineer-Poet? Whadda you guys think?

Dr. Steel (lost the username and password to that other account, moving to a different state will do that to you).

 
At Tuesday, June 17, 2008 at 8:48:00 PM PDT, Anonymous benny "peak demand" cole said...

Freak:
Here is some amazing, and real stats:
Driving at 55 mph, rather 75, will save you about 17 percent in gasoline consumption...and inflating your tires a few pounds over the suggested maximum will save you about another 10 percent, compared to slightly underinflated....
So, if everybody did just these two things....

 
At Tuesday, June 17, 2008 at 9:37:00 PM PDT, Anonymous Ryan said...

BTW...Boonie's back on the "oil production has peaked" bandwagon again on CNBC's website.

While he may appear to be a credible source, he's only predicted that we've hit peak oil every year since 2002. (His claim today is 85 million barrels/day...see JD's earlier posts for his claims of when we hit peak oil before).

Too bad that the data doesn't agree with him:

1. EIA has current production at 86.11 million for the month of may
2. IEA has current production at nearly 87 million.

However, in almost the same breath, he argued that we shouldn't even waste our time looking into the ICE or any of the other markets (where he is by all indications a VERY large player).

 
At Tuesday, June 17, 2008 at 10:05:00 PM PDT, Anonymous Peak oil is here now!!! said...

Just face it folks our time is up. I laugh at how you all desparetly cling on to oil. It's almost sickening, I myself am completely off the grid. I'm prepared I would suggest you all doing the same or else you'll just become apart of the dieoff. Simple as that.

The prices are because oil has peaked and will only get much worse, much, much worse from here on out. Anyone who thinks otherwise is just plain stupid!
Face it alot of folks are going to die in a short amount of time. Total chaos.
Boonie btw is correct as usual. The peak happend lst year, and those numbers you put up aren't even credible. Quit dreaming and come back down to earth buddy

 
At Tuesday, June 17, 2008 at 11:06:00 PM PDT, Anonymous Freak said...

Peak oil is here now!!! said...


"I laugh at how you all desparetly cling on to oil"

"you'll just become apart of the dieoff. Simple as that."

"Anyone who thinks otherwise is just plain stupid!"

"Face it alot of folks are going to die in a short amount of time. Total chaos. "



"Quit dreaming and come back down to earth buddy"



http://www.fallacyfiles.org/

 
At Wednesday, June 18, 2008 at 1:53:00 AM PDT, Anonymous Rory said...

We'll see who gets the last laugh:
Post Oil Man

 
At Wednesday, June 18, 2008 at 2:56:00 AM PDT, Anonymous freak said...

The last laugh?

how can I be more clear!!!!!

If your scenarios are true YOU WILL NOT FUCKING SURVIVE THEM EITHER!

so go dieoff already.

oohhhh, look at me I think I know what peak oil is a license to be a self-righteous megalomaniac.

why does no one understand that nobody here wants anymore "truth" about the oil crash.

These people prove by their persistence that they are a self-reinforcing cult.

and yet they post their garbage here so confident that we haven't already heard the doomer scenario so many damn times already. like nobody here is in the "loop"

News Flash!! **We know, we don't buy it**

 
At Wednesday, June 18, 2008 at 4:01:00 AM PDT, Anonymous Jake L. said...

Rory

Are you serious? Last laugh? So you mean to tell me that you'll laugh at people's dispair? Are you going to laugh when you see children starving to death, will this make you feel "higher up" than the rest of us poor sods? Will you go in a corner and jack off each time an American dies of cardiac arrest from the overload of stress implied with your view on the future?
So, if this is what you mean by "last laugh" Then you are seriously fucked up!
What merits this? Why would you laugh at these things.

I have a solution to the problem. Here it is: anyone who fancys the "dieoff" and in support of downsizing the global population...I say stop being hypocrites and pushing your fruitless propaganda, stop being afraid and just start contributing to the "dieoff" effort by contributing yourself to the "greater cause" Oh, right I forgot......all you guys are such fucking little pussys, of course. You or any of your little friends wouldn't have the balls to do such, no? Really you guys are all about the "greater good" of planet earth. Yet you all stop at words..........Inability to act on your own beliefs, leads me to believe that you do not truly believe in this hype of doom.


"Many deserve death. And some that die deserve life. Can you give it to them? Then do not be too eager to deal out death in judgement" -Gandalf, fellowship of the ring, The Lord of the Rings.
I find this quote to be very true in life. though it came from a fantasy tale, it does nonetheless have a very valid point.

 
At Wednesday, June 18, 2008 at 9:17:00 AM PDT, Blogger taz said...

OK, OK, everybody just calm down - 'k? Reality check...I know we all saw or read about the speech today. God knows I hate to agree with Bush about anything, but we do need to access more domestic oil sources in order to buy time to develop other technologies and make the transition(s). I just hope we(Americans) actually DO IT as opposed to squandering the opportunity and just letting the good times roll like we did during the 80's and 90's... - taz

 
At Wednesday, June 18, 2008 at 11:43:00 AM PDT, Anonymous Juan said...

Ryan, yes, Pickens is not an oilman and, like the rest of the finance boys and girls, always talking his book.
Have you looked into his water scheme?

 
At Wednesday, June 18, 2008 at 12:49:00 PM PDT, Anonymous aram said...

From the 6/18/2008 issue of This Week in Petroleum:

"Market conditions are the driver behind the discretionary cutbacks in crude inputs. Gasoline prices have risen in 2008 mainly from increases in crude oil prices. Refiners purchase that crude oil and sell product at wholesale prices. The wholesale gasoline price spread (the difference between spot gasoline and crude oil price), where refiners operate, has narrowed, indicating plenty of gasoline supply has been available to meet demand. Supply was outpacing demand in January and February, and inventories built substantially (Figure 1), resulting in very high stock levels and very low wholesale (e.g., spot) gasoline price spreads. Indeed, at some points in March 2008, the gasoline wholesale price was actually cheaper than crude oil. In addition, refiners have been blending more ethanol into gasoline, further reducing the need for gasoline from crude oil. As summer demand has been picking up, inventories have been drawn down from their very high levels at the beginning of March, but gasoline spreads have not increased much. If U.S. refinery utilization increased, gasoline prices might decrease some, but probably not by much, since wholesale gasoline spreads are already low, and crude prices remain high."

I don't want to harp on the fact that I was referred to as a "troll" and any number of other unflattering names by another poster for suggesting the idea of an "artificial supply shortage" arising from the fact that the price of crude is very prohibitive right now and that refineries were buying less oil.

Now I can't provide the Bloomberg article that spoke on just that same subject, but this little nugget comes right from the EIA's Weekly commentary on the Weekly Oil Inventory report.

Judge for yourself.

 
At Wednesday, June 18, 2008 at 1:01:00 PM PDT, Anonymous Anonymous said...

Well, inflation is a big part of it too. Oil hasn't gone up that much, the dollar's buying power has dropped a lot too.

 
At Wednesday, June 18, 2008 at 10:03:00 PM PDT, Anonymous Ryan said...

"Boonie btw is correct as usual. The peak happend lst year, and those numbers you put up aren't even credible."

No it didn't...go check the EIA website...

http://tonto.eia.doe.gov/cfapps/STEO_Query/steotables.cfm?tableNumber=6&periodType=Monthly&startYear=2008&startMonth=1&startMonthChanged=false&startQuarterChanged=false&endYear=2009&endMonth=12&endMonthChanged=false&endQuarterChanged=false&loadAction=Apply+Changes

If you look at the data for May, crude oil production came in at 86.11 million barrels/day, the highest EVER.

IEA production figures in their latest OMR report

http://omrpublic.iea.org/

IEA has Q1 oil production at 87 million barrels/day.

Boonie made the same prediction in 2002, 2003, 2004, 2005, 2006, 2007, and now 2008. He's been wrong a good 6 times in a row now and this may very well be number 7. He screams "we've hit peak oil" every year.

On the peak oil side, from the best data available I've seen from ASPO, Chris Skrebowski, etc. (and much of that I think is overly pessimistic bullcrap...but I'll use data from the "Peak Oil Team" to make my point), puts a peak somewhere between 2010-2015.


Just b/c Boone has been pretty good at picking price direction (although he has had some significant miscues, like shorting oil in Q1 2008), does not make him some sort of prophet.

As for your point on credibility, EIA and IEA data on oil production is BY FAR the most accurate information available. I trust their read on the situation far more than I do Boone Pickens musings about when oil has peaked. If you used his quotes as evidence in a paper for college or market research, you would get a big fat F.

Now that I'm done bitchslapping your crapass argument, go back to your hole Mr. Peak oil is here now

 
At Thursday, June 19, 2008 at 12:08:00 AM PDT, Anonymous Peak Oil is here now!!!!!!!YAY!!!!!! said...

I never said that Boone is an Oil prophet, but you know who is, don't you. Matt Savanir. He sees the future for what it is for. And you are kidding yourself. The EIA and the IEA are both in the govts. and Big Oil's pockets.....hahaha I laugh at how pethetic you are. I hope someone laughs in your face after the crash has happened. YOU are no expert. But Matt Savinar and Matt Simmons, Ken D., are. They know whats up. GIVE IT UP by 2025 we'll all be in livin like it's 400 B.C. Well what's left of us anyways..... Not to mention incase you haven't noticed, Matt Savanir has already debunked every little glimer of hope you may have had. Where as JD, here can't debunk shit! So, please bring it on, in the end when I've had the last laugh. When I am florishing as mayham runs all round. You'll see, you'll see.

 
At Thursday, June 19, 2008 at 1:00:00 AM PDT, Anonymous Freak said...

Please, someone, tell me that was an attempt at humor.......because it is definitely hilarious.

In the zombie peak-oil world scenario, you don't get special odds on survival to be around to laugh at anybody. and why would you laugh anyway? that's kinda sick man.

prophets? There are no prophets, sorry that is a fantasy.

debunking glimmers of hope? to what end do you want people to be miserable?

Furthermore, what do you or anybody else's need to laugh at someone starving have to do with the supply and demand of an energy source?

If this was not an attempt at humor then I suggest you get some professional psychological help while you can still get gasoline to
drive to the hospital.

Doesn't matter if the oil runs out anyway since the earth is FLAT we can just get around on gliders quite easily.

 
At Thursday, June 19, 2008 at 1:52:00 AM PDT, Blogger Jeffrey said...

To everyone reading "peak oil is here now!!!" or whatever's posts, let me just say this:

Obvious troll is obvious.

Good post, JD.

 
At Thursday, June 19, 2008 at 10:35:00 AM PDT, Anonymous econogeek said...

http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=9568

Benny "Peak Demand" Cole might be onto something here.

Supply and demand clearly are working here.

High prices limit consumption.

 
At Thursday, June 19, 2008 at 10:47:00 AM PDT, Anonymous Ryan said...

Juan,

Ohh I know all about Boone's water scheme. Owning a 50 acre farm does not give him the rights to start his own non-profit public utility.

If I was a class action lawyer, I would sue the pants off that guy.

Boone is flat out one of the dirtiest business people I've ever encountered.

Also, contrary to popular belief, Matt Simmons is not some powerful investment banker with oil majors as his clients. He typically deals with small independent explorers and works on relatively smaller deals.

If you go on his website and look at his client list, you'll see that he does not have any of the Top 5-10 oil producers in the US as his clients or any of the top oil majors from other countries.

He doesn't represent Exxon, Shell, Chevron, Oxy, Hess, Total, Eni, Statoil, Marathon, ConocoPhilips, BP, or any of the other big boys. In other words, he's a little girl among bigger investment banks

 
At Thursday, June 19, 2008 at 3:06:00 PM PDT, Anonymous Brother Cadfan said...

First of all, thank you for your blog.

Just throwing this out there. People who want to get into the primitivist business may like to research the 'redlegs' of Barbados. I believe their experience shows what will actually occur should things pan out the way they (primitivists) wish. The redlegs were a kind of yeoman peasent, mainly from SW England who went to the West Indies to manage the plantations. They experienced what might be called 'peak oil' - the end of slavery, and hence an end to their economic purpose, since their Afro Caribbean charges could now do their jobs! They were cast out, held in contempt by the freed slaves and the moneyed whites. They turned to subsistence farming and ended up with severe inbreeding problems, and chronic malnutrition and depleted farmland. They also had a rather good sense of comminuty - ergo we see that the proclamations of the primtivists do not lead to some mythical 'oneness' with nature. If their fantasies come true, then this is the future their descendents will be doomed to suffer. Similar phenomena exist right across the West Indies (e.g. Bahamas, Guadeloupe). Good programme tonight on the BBC about the island of St Kilda - ditto similar problems. And being Welsh I know a thing or to about ruralness.

Kind regards

 
At Friday, June 20, 2008 at 12:26:00 AM PDT, Anonymous Peak Oil is here now!!!!!!yay!!!! said...

@ Freak.

Hahaha resistance is futile. Instead of debunking my "weak" arguments, let's see you debunk the oil prophet. Matt Savanir. You he's right, you all do. You're all in denial.......You above all need to come to your senses or suffer.

"Deal with reality or reality will deal with you" This is very true, and I see that reality will more than deal with the likes of you and the rest of those delusional folks here at POD. HAHAHA! You guys can't even debunk peak oil.........Oh and btw at the guy who wants to talk about Matt Simmons.
He knows more than YOU could ever hope to know about Oil. And you know he is right on the money!
I wasn't joking btw, all of this will pass soon enough. I WILL survie I have the upper hand as I live off the grid now. I don't drive.....I grow my own food. LIke I said I'll have the last laugh time and time again!

 
At Friday, June 20, 2008 at 1:57:00 AM PDT, Anonymous akihockey said...

Do you honestly think "living off the grid" and "not driving a car" will save you if industrial civilization collapses? You're out of your mind. Resource wars, nuclear exchanges, every abandoned vehicle, factory, power plant leaking chemicals into the environment, severe weather from escalating global warming (or nuclear winter)...perhaps a scattered few will survive, to live a miserable subsistence existence, and even then, not for long. And if you're not poisoned by a devastated biosphere, the thousands, millions of desperate starving people with guns and knives and nothing to lose won't be impressed that you're "off the grid." Face it; if you believe we're collapsing back to 400 BC, then it's over. We're finished, and that includes you. If I were you, I would be terrified, because "growing your own food" sure as hell ain't gonna help you out one bit.

Of course, you think die-off is a laughing matter. And you believe in prophets. How petty and shallow. You clearly aren't sophisticated enough to grasp the complexity of these issues.

If you believe in die-off, you better believe you're going to die!

 
At Friday, June 20, 2008 at 4:04:00 AM PDT, Anonymous Peak oil is here now!!!!!!!!yay!!!! said...

Of course these things will happen in due time, you're even more pessimistic than I. I WILL be one of the few that survive. I posess knowledge that many do not. The end of Oil is here, and the suffering of billions is unstoppable. You do seem to grasp what is going to happen to us, if only these fools on here could realize this and see that we're doomed to fail. As nothing can replace Oil.


Yet I still await or challenge someone to debunk Matt Savinar! None can!

 
At Friday, June 20, 2008 at 6:35:00 AM PDT, Blogger taz said...

Ohhhh, peaky(Mr. "yay!!!"), stop it, my sides hurt...lol..."the suffering of billions is unstoppable" - omg, you sound like a bad Ming the Merciless! I hate to encourage a troll(he's gotta be playing this for laughs, right?), but you are TOO funny, mah man - Oh, and I'm gonna come and take yer off-the-grid-grown turnips from ya if the stores ever really ARE empty :) - taz

 
At Friday, June 20, 2008 at 6:43:00 AM PDT, Anonymous aram said...

From Alaron Energy's Phil Flynn and his semi-daily report for June 20, 2008:

"Of Course sinking oil supply is kind of an enigma. The reason we are not storing oil is the price is too high and with weak demand the incentive to store oil is not there. Yet at the same time the tightening of inventories means we are more vulnerable to world oil price disruptions. The crude oil supply fell by1.2 million barrels from the previous week. At 301.0 million barrels, U.S. crude oil inventories are at the lower boundary of the average range for this time of year. Yet refinery runs, as the Department of Energy has pointed out, has to face the underlying real fact that those refiners are refining less due to weak demand."

The key point being:

"The reason we are not storing oil is the price is too high and with weak demand the incentive to store oil is not there."

In other words, an "artificial" supply shortage which will lead to higher prices due to declining inventories and eventually a REAL supply shortage.

 
At Friday, June 20, 2008 at 8:47:00 AM PDT, Anonymous Ryan said...

Ok...I'll debunk Simmons.

The entire premise of his book is based upon a bunch of 25-30 year old documents that even he publicly has said do not fully represent the reality of what is happening on the ground. It's an incomplete picture of the realities on the ground. Other, far more qualified geologists, not MBA's like Simmons, have soundly refuted his book with evidence (see "Another Day in the Desert"). At best he's an geology buff at the hobby level.

Sanford Bernstein and others have done satelite surveys of Saudi Arabia's fields looking for signs of peaking (you can see mini-tremors which almost always show signs of horrific aging)and have concluded that they're fields are in fact not peaking.

Cantarell is a horrible example of peak oil b/c that field has had a long history of mismanagement by the Mexican authorities. They pumped nitrogen into the field, which may have very well contaminated the whole project.

I do find it ironic that Matt "I want transparency" Simmons is also so against transparency in the markets that determine the pricing of oil

http://www.cnbc.com/id/25266682

The real truth is that nobody knows who owns what in the oil futures world and that much of the purchase of oil futures has been done on ridiculous leverage.

 
At Friday, June 20, 2008 at 12:24:00 PM PDT, Blogger Anaconda said...

"Peak" oil pushers remind me of Linus, of "Peanuts" fame and Charlie Brown.

Linus always goes out to the pumpkin patch looking for the "Great Pumkin" on Halloween.

Of course, the "Great Pumpkin" never comes, the other kids laugh at him, but he keeps repeating that the "Great pumpkin" wil come, you wait and see.

So far, twice, this writer has written of the world's continental shelfs and continental margins just beyond the shelf, and how both of these areas are virtually unexplored for oil.

But, no takers (no surprise there), because "Peak" oil pushers don't have an answer and they know it.

Hey, all you Linuses, keep going out to the pumpkin patch...

The rest of us are going to party with the girls at the dance...

Oil Is Mastery

 
At Friday, June 20, 2008 at 11:38:00 PM PDT, Anonymous Freak said...

We will add your biological and technological distinctiveness to our own?

 
At Monday, July 14, 2008 at 10:11:00 PM PDT, Anonymous wunsacon said...

>> Still no evidence of supply shortages that i have seen. Where are the queues at the pumps?

Why would you expect queues at the pump in the absence of price controls? In a reasonably free market, the "shortage" expresses itself as higher prices. People know they must drive less in order to conserve. They show up at the pumps less often.

>> I think the whole commodity space is in a bubble when you hear stories about how dandelions have gone up by a factor of 7 in 6 years. Last time I checked dandelions are a completely useless weed.

Unless limited in supply, *credit* is a "useless weed", too. In the past few years, everyone who had a pulse was given credit to do something stupid.

Excess credit creation also expresses itself in higher prices.

>> This blog has restored my hope in the future. ... changing. Then, my remaining concern about the future was climate change or global warming. I became as open minded about global warming and found out some startling things.

Oh great. Just remember to check with a PO or AGW website *after* learning of some new spin.

 
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