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Top IEA official: without Iraqi oil, we hit the wall in 2015

by Jerome a Paris Thu Jun 28th, 2007 at 03:55:18 AM EST

In a stunning interview for the French (reference) daily Le Monde, Fatih Birol, the chief economist of the International Energy Agency (i.e. the intergovernmental body created after the oil shocks of the 70s to coordinate the West's reaction to energy crises) effectively says that peak oil is just around the corner, and that without Iraqi oil, we'll be in deep trouble by 2015:

Si la production n'augmente pas en Irak de manière exponentielle d'ici à 2015, nous avons un très gros problème, même si l'Arabie saoudite respecte ses engagements. Les chiffres sont très simples, il n'y a pas besoin d'être un expert.If Iraqi production does not rise exponentially by 2015, we have a very big problem, even if Saudi Arabia fulfills all its promises. The numbers are very simple, there's no need to be an expert

And as long as the US occupies Iraq, production will not increase... Houston, we have a problem...

Bumped by whataboutbob


The whole interview is amazingly frank and free of diplomatic obfuscation. He blasts biofuels ("not based on any kind of economic rationality"), he notes that Africa is suffering the most already from expensive oil, he points out that even a slowing of China's growth will not reduce oil demand, and he talks pretty explicitly about production peaks and depletion:

D'ici cinq à dix ans, la production pétrolière hors-OPEP va atteindre un maximum avant de commencer à décliner, faute de réserves suffisantes. Il y a chaque jour de nouvelles preuves de ce fait. Au même moment aura lieu le pic de la phase d'expansion économique de la Chine. Les deux événements vont coïncider : l'explosion de la croissance de la demande chinoise, et la chute de la production hors pays de l'OPEP. Notre système pétrolier sera-t-il capable de répondre à ce défi, c'est la question.Within 5 to 10 years, non-OPEP production will reach a peak and begin to decline, as reserves run out. There are new proofs of that fact every day. At the same we'll see the peak of China's economic growth. The two events will coincide: the explosion of Chinese growth, and the fall in non-OPEP oil production. Will the oil world manage to face that twin shock is an open question.

He says it again twice in the interview: the gap between demand and supply will widen, and he blasts our governments for doing so little:

Malheureusement, il y a beaucoup de paroles, mais peu d'actes. J'espère vraiment que les nations consommatrices vont comprendre la gravité de la situation, et mettre en place des politiques très fortes et radicales pour ralentir la hausse de la demande de pétrole.Unfortunately, there's a lot of talk, but very little action. I really hope that consuming nations will understand the gravity of the situation and put in place radical and extremely tough policies to curb oil demand growth

Of course, we might need to curb more than "demand growth", and actually move to curb "demand" itself, but his words are at least quite direct and explicit. Even more interestingly, he puts the finger on two important but rarely discussed items: field depletion (he mentions an 8% decline rate for mature fields, but indicates that even a 1% difference in the actual number would mean huge volumes by 2020), and Saudi reserves:

Je crois que le gouvernement saoudien parle de 230 milliards de barils de réserves. Je n'ai pas de raison officielle de ne pas y croire. Cependant l'Arabie saoudite de même que les autres pays producteurs et les firmes internationales devraient être plus transparents dans la présentation de leurs chiffres. Car le pétrole est un bien très crucial pour nous tous, et notre droit est de savoir, selon des standards internationaux, combien de pétrole il nous reste.I understand the Saudi government claims 230 billion barrels of reserves, and I have no official reason not to believe these numbers. Nevertheless, Saudi Arabia - as well as other producing countries and oil companies - should be more transparent in their numbers. Oil is a crucial good for all of us and we have the right to know how much oil, as per international standards, is left.

While not a direct attack on Saudi numbers, this is by far the most explicit voicing of doubt about their reserves from any official of a major organisation that I have ever read. "No official reason to doubt"??? That's a pretty gaping hole there to sneak other kinds of doubts... He notes that he believes Saudi Arabian promises to be able to bring its capacity from 12mb/d today to 15mb/d in 2015, but notes at the same time that (i) it's the only place in the world (other, potentially, than Iraq) where production can grow and (ii) it's less than the expected demand growth by then from China alone.

While none of these facts should be surprising to my regular readers, it's quite something else to see them explicitly stated by one of the top officials of one of the major energy watchdogs of the Western world.

The only question left is - will our governments listen, now?

Display:
this story seems not to be in the paper version of Le Monde, and is nowhere to be found on the front page of their website. Strange...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jun 27th, 2007 at 05:34:08 PM EST
it is on dKos (http://www.dailykos.com/story/2007/6/27/165424/633) and soon to be on the Oil Drum (http://www.theoildrum.com/node/2721)

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jun 27th, 2007 at 05:34:58 PM EST
[ Parent ]
Hi Jerome, I came over here because dkos has too many comments and because I've been meaning to. This is a really basic question.

Is it your opinion that biodiesel is not a workable idea?  What about "pure" waste oil?  Weren't diesels designed to run on such stuff originally?  Is there any diesel/bio oil or 100% oil that makes sense?

by Causa on Wed Jun 27th, 2007 at 10:12:17 PM EST
[ Parent ]
I'm not Jérôme, but here's what Birol says himself in the same interview:


Beaucoup de gouvernements encouragent la consommation de carburants agricoles, notamment en Europe, au Japon et aux Etats-Unis. Certaines de ces politiques ne sont pas fondées sur une rationalité économique solide : les biocarburants resteront très chers à produire. Mais même si ces politiques aboutissent, nous pensons que la part des biocarburants en 2030 sera de seulement 7 % de l'ensemble de la production mondiale de carburants.

Pour atteindre ces 7 %, il faudra une surface agricole équivalente à la superficie de l'Australie, plus celles de la Corée, du Japon et de la Nouvelle-Zélande...

A lot of governments, especially in Europe, the United States, and Japan, are encouraging use of agricultural fuels. Some of these policies are not founded in solid economic rationality : biofuels will continue to be very expensive to produce. But even if these policies were carried through with, we think the share of biofuels in world fuel production in 2030 will only be 7%.

To reach those 7%, it will be necessary to use a farmland surface equivalent to the combined total areas of Australia, Japan, Korea, and New Zealand combined...

Cette concurrence avec la surface consacrée à l'agriculture traditionnelle risque d'avoir des conséquences sur le prix des récoltes.

Oui, c'est déjà le cas, et ce n'est pas bon. Et puis il y a aussi des difficultés liées à l'environnement : de plus en plus d'études prouvent que les biocarburants ne réduisent pas automatiquement les émissions de gaz à effet de serre, comparés au pétrole. C'est aussi un gros souci. Donc pour ces raisons à la fois économiques et environnementales, 7 % de la production totale de carburants est un chiffre très, très optimiste. Les carburants agricoles ne remplaceront jamais le pétrole de l'OPEP, comme certains l'espèrent.

This competition with traditional agricultural land use runs the risk of consequences on crop prices.

Yes, this is already happening, and it's not a good thing. And then there are environmental issues : an increasing number of studies prove that biofuels do not automatically reduce greenhouse gas emissions, compared to petroleum products. This too is a major worry. So, for both economic and environmental reasons, 7% of total fuel production is a very, very optimistic number. Agri-fuels will never replace OPEC oil, as some people hope.

This doesn't address your question about the use of waste, but, in the face of rising world demand for liquid fuels, recycled waste doesn't seem likely to make more than a very small contribution.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 28th, 2007 at 02:28:29 AM EST
[ Parent ]
Is it your opinion that biodiesel is not a workable idea?  What about "pure" waste oil?

We ran the figures for the EU and even if the EU used their entire oil output (well, we didn't include olive oil) for diesel, it would barely be able to reach the 6% target set by the Commission. The only sensible way to put all our oil into diesel engines is to recycle all the waste cooking and motor oil into diesel. Othwerwise you can power your diesel but you can't cook or lubricate the engine.

According to Eurostat, transport fuel consumption for 2002 in the EU-25 was :
petrol, 5.2 e6 TJ ; diesel, 6.6 e6 TJ.
5.75% of these gives:
petrol, 0.3 e6 TJ ; diesel, 0.38 e6 TJ
Ethanol : 0.3 e6 TJ petrol  / 22 MJ/l = 13.6 e9 l
Biodiesel: 0.38 e6 TJ diesel / 34 MJ/l = 11.2 e9 l
If all the area (statistics, DG Agriculture) currently dedicated to potential ethanol feedstocks were used for ethanol, production could be an estimated:
·    10.5 e9 l of ethanol potential from the current EU-25 cultivated area of sugar beet (2.1 e6 ha @ 5000 l/ha)
·    19 e9 l of maize ethanol potential (from 6.5 e6 ha @ 3100 l/ha)
·     33.5 e9 l of common wheat ethanol potential (from 13.4 e6 ha @ 2500 l/ha)
·     23 e9 l of barley ethanol potential (from 23 e6 ha @ 1000 l/ha).
If only the surplus percentage (in excess of 100% self-sufficiency) of these crops were to be used, the estimates would be:
·    30% sugar beet: 10.5 e9 l x 30% = 3.15 e9 l ethanol
·    9% common wheat: 33.5 e9 l x 9% = 3 e9 l
·    13% barley: 23 e9 l x 13% = 3 e9 l
Surplus production (9 e9 l ethanol) would not suffice to cover the needed 13.6 e9 l. Only an extension of the area of ethanol feedstock crops, or a transfer of crops from animal feed to ethanol, would cover needs.

As for biodiesel, the total area of the two principal feedstocks, rapeseed and sunflower seed, would produce an estimated:

·    5 e9 l from rapeseed (4.5 e6 ha x 1100 l/ha);
·    2.2 e9 l from sunflower (2.2 e6 ha x 1000 l/ha)

Total production (7.2 e9 l) would not suffice to cover the needed 11.2 e9 l.

Biofuels are a workable idea, but they won't solve the problem of excessive demand. And it is excessive in relation with the availability of energy crops, worldwide.

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 07:05:43 AM EST
[ Parent ]
The only question left is - will our governments listen, now?

You don't really need me to answer that do you ?

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed Jun 27th, 2007 at 05:45:53 PM EST
yeah, but they have increasingly few excuses. IEA's mostly reassuring words were one of the biggest ones, of late.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Jun 27th, 2007 at 05:59:12 PM EST
[ Parent ]
Renewable is on its way.  It is like the new music, everyone wants to hear it, and the old music is...for the old folks...those who don't want to change.

But the new music is insistent...if it is good...it doesn't deny the past, but it describes it--warts and all--

You're doing great work, Jerome, and I wish you and your many (I hope many many) colleagues...well...

I'm waiting for the five year energy plan--full employment!--to kick off.  Renewable energy.  For the future generations...

And the tech is all there, and the tech needs only investment to become even better tech!

Money meet skill.

Please!

Cough cough!

Don't fight forces, use them R. Buckminster Fuller.

by rg (leopold dot lepster at google mail dot com) on Wed Jun 27th, 2007 at 06:51:17 PM EST
[ Parent ]
so tell us again that nasty dictators or alleged WMD's have anything to do with the invasion of Iraq by an Anglo-American force...?  an invasion that has happened before (Siege of Kut anyone?  though it was just the Brits that time) and was planned again in the 1970's, and again by the Dick Cheney Energy Task Force...

The difference between theory and practise in practise ...
by DeAnander (de_at_daclarke_dot_org) on Wed Jun 27th, 2007 at 06:49:26 PM EST
They don't seem to be doing a good job of controlling that oil though. And their strategy in the stans is in tatters.
by rootless2 on Wed Jun 27th, 2007 at 06:53:21 PM EST
[ Parent ]
And Exxon and Conoco just got the boot in Venezuela.
by rootless2 on Wed Jun 27th, 2007 at 06:54:19 PM EST
[ Parent ]
Chose the boot rather than Jr status.

I can swear there ain't no heaven but I pray there ain't no hell. _ Blood Sweat & Tears
by Gringo (stargazing camel at aoldotcom) on Wed Jun 27th, 2007 at 10:54:36 PM EST
[ Parent ]
Too bad, but on the other hand Conoco just said they would initiate a $15 billion share buy-back scheme. The lack of good oilfields to exploit, outside the Mideast, is not entirely bad. For us Conoco shareholders. ;-)

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Jul 11th, 2007 at 07:26:34 PM EST
[ Parent ]
It always was about oil. Reserves became inflated overnight by ~25% 30 years ago when OPEC production quota became tied to reserves, we are at peak oil, demand is skyrocketting and it'll get a lot worse, Iraq has the 2nd largest reserves of easily exploitable and unexploited oil on the planet, and Saddam was about to leave US oil corporations out of the deal.

Now, even if they can't get the oil out of the ground or to the ship for another 10 years, they have prevented it from being sold to the Chinese and the EU, and hopefully things will have cooled off by the time using iraqi reserves is absolutely necessary. At worse, it ought to be possible to balkanize Iraq and cut a deal with the kurds for ~1/2 of the pie. Even if the entire thing was solely to supply the military over the next couple of decades, which neocon would say it wasn't worth it?

by Fete des fous on Thu Jun 28th, 2007 at 02:07:55 AM EST
[ Parent ]
I have been arguing that U.S. Presidential candidates, at least on the Democratic ticket, must be called-out on confusing an important distinction.  A distinction between:

(1) Oil security.

(2) Oil dominance.

The U.S. needs (1) for the near future but not (2).  (1) does not require occupying anyone.  (2) does.  Getting (1) and (2) confused is a great trick for people who want (2).

I have been arguing that Democratic Presidential candidates in the U.S. need to stop pretending that we need to stay in Iraq for (1).  We don't.  If Democratic Presidential candidates want to stay in Iraq for "U.S. national interests" then those interests are (2), not (1).  The correct response, then, is that (2) is not in U.S. interests.

I have been thinking that the United States needs to be friendly with Saudi Arabia and Venezuala, for example, for (1).  It is just obviously false that the U.S. needs Iraq for (1) . . .

. . . but, given this story, I wonder if a lot of U.S. power-players REALLY HONESTLY THINK the U.S. needs Iraq for (1).  The only way to get (1) is to get (2), because supplies are so low.

My response, in any case, is that trying to get (2) inevitably guarentees that the aggressive nation will not get (1).  (1) and (2) are mutually exclusive.

So here's my question: could U.S. powerplayers REALLY THINK they need Iraq, and (2), just to get (1) . . . because if they think that then my simplistic argument against their view won't convince anyone.

by RadiumSoda on Wed Jun 27th, 2007 at 07:00:57 PM EST
Technically it's more energy security rather than oil security. You only need oil for plastics, agriculture and manufacturing, and I suppose with enough energy, bio products can be persuaded to polymerise as effectively as refined crude does. (After all, crude actually was a bio-product originally.) With energy security, oil dominance becomes less relevant - almost irrelevant in fact, which is why the Mil Ind people hate the idea.

Oil dominance is a political fantasy closely linked to more generic superpower dominance.

The Cheney crowd quite simply see themselves as world rulers. Contempt for the constitution and contempt for other countries are closely linked. It's a fantasy of ultimate machismo, with ultimate firepower, beholden to no one.

I don't think you can get rid of the oil dominance fanasty without at least checking some of the political momentum of the more generic global dominance fantasy. And since it dominates the US political spectrum, that's not going to be easy.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jun 27th, 2007 at 07:26:53 PM EST
[ Parent ]
Cheney wants world rule.  I agree.  I don't have anything to say to the Cheney crowd.  I was more interested in Democratic candidates who say that we need to maintain "a reduced troop level" in Iraq.

I take it that the unstated reason Hillary Clinton, for example, says this (and she's actually pretty honest about this) is to maintain oil security.  But my point is we don't need Iraq for oil security.  

However, I can see the story Jerome quotes as being the sort of thing driving the "stay in Iraq" talk.

by RadiumSoda on Wed Jun 27th, 2007 at 07:35:13 PM EST
[ Parent ]
But these Democrats are part of the same imperialistic elite as Cheney.

The problem is not the Bush administration, it is systemic and Bush/Cheney are just a symptom.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 07:09:50 AM EST
[ Parent ]
Without plastics we are pretty much, for all intents and purposes, scrod.

work is being done on an alternative.  Guess what?  It comes from corn.

Skepticism is the first step on the road to truth. -- Denis Diderot

by ATinNM on Wed Jun 27th, 2007 at 10:54:33 PM EST
[ Parent ]
Assuming that we are talking about the continuation of processes rather than simply building artefacts with new materials, where do we need plastics, indispensibly?

You can't be me, I'm taken
by Sven Triloqvist on Thu Jun 28th, 2007 at 02:32:13 AM EST
[ Parent ]
'Indispensibly' has a wide range of possible values.

If you mean 'To more or less maintain the lifestyle we have now' look around you and see how many things in the immediate vicinity are made of, or contain, plastic.

Plastic isn't just useful and cheap, working it is much less labour intensive than natural alternatives.

There's no reason why we couldn't make PCs and car parts and mobile phone case sout of wood, but the assembly process would take a lot longer and be much more expensive.

There's also a minor problem with sustainability in a wood economy.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jun 28th, 2007 at 10:01:35 AM EST
[ Parent ]
Well, the fossil plastic economy is no more sustainable than the fossil fuel economy.

Seriously, I see no other way out in the medium term than synthetic hydrocarbons. They will be horrendously expensive, but at least we won't have to replace all our stuff at once and will be able to keep using our current (suddenly horrendously expensive to run) technological stock and replace it with other stuff as it wears out.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 10:12:42 AM EST
[ Parent ]
But let's make some other assumptions. The entire Communications Industry is about the standardization of protocols - making sure devices talk the same language/s.

But still so many of them come with unique chargers, unique batteries, unique covers, unique packaging, sometimes even unique cables etc etc. All this could be standardised - and would be, if it weren't so damn cheap. If it becomes expensive, there will be solutions.

A client of mine is making very, very good electric guitars out of a fibre liquid composite suitable for injection moulding (or, more exactly pressure moulding) The same process could make a whole range of products such as casings. And it can all be recycled (though, as with paper, there are only 5-7 cycles before the fibre deteriorates - at which time it can be burnt for energy)

As I was F2F arguing the other night with colleagues - if the music industry and the film industry disappear, it won't mean the end of movie-making nor music. Spiderman 3 will disappear, Bond movies will disappear,  Hollywood hegemony will disappear. But movies and music will continue to be made. They will be very different, but they will still be enjoyable - maybe even better for us.

If we have an unsustainable lifestyle, then we have to change it.

 I was very happy as a kid - before we got TV - sitting round the piano singing songs in the evening with the family. It was a happy time. I am not saying that we have to do that. We will find other ways to amuse ourselves and to feel happy.

Human beings take to innovation naturally. Let's just innovate useful lifestyles, instead of destructive lifestyles...

You can't be me, I'm taken

by Sven Triloqvist on Thu Jun 28th, 2007 at 11:39:56 AM EST
[ Parent ]
But still so many of them come with unique chargers, unique batteries, unique covers, unique packaging, sometimes even unique cables etc etc. All this could be standardised - and would be, if it weren't so damn cheap. If it becomes expensive, there will be solutions.

Media hardware is often deliberately non-standardised so that manufacturers make more money. 1000mAh of generic Li-ion battery costs maybe £15 to sell and maybe a couple of quid to make. 1000mAh of proprietary Sony/Nikon/Whoever Li-ion battery is more likely to cost £50 - while costing the same to make.

Car makers make a huge proportion of their income from spares. The really quite crap boot shelf in my car costs three figures to replace, and can't cost more than a tenner to make.

And so on.

So there's no commercial incentive to standardise, except when that's enforced from the top down, either by big players with clout (e.g. the USB standard) or Big Government (e.g. power leads.)

Having more or less plastic around won't change that process. But it may put prices up across the board.

As for the media - it's an open point whether other kinds of music will be better or worse. As I've said before I know rather too many talented people who find the scene hopeless and are giving up and doing other things instead, and rather too many mediocre people who are hanging in there on a hobbyist basis while still hoping for microcelebrity success on MySpace.

This does not reassure me. The reason it doesn't reassure because the currency that defines the transaction isn't actually music - it's something different, and the music happens to be a convenient marketing device, rather than a thing in itself.

There's always been a lot of that in the industry, but I'm seeing more of a move towards it than a move away from it.

YMMV of course.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jun 28th, 2007 at 12:34:08 PM EST
[ Parent ]
It is hard to argue: you are agreeing that there is a lot of room to take up slack by standardisation (Why can't printer device makers have one type of cartridge for in-jets eg). But you ignore the difference between carriers/devices and content. I see distribution systems and content as two different things. (also in copyright discussions)

To me, this is a very fundamental disagreement, but in no way acrimonious ;-)

As you say . who knows whether music or anything else will be better or worse. No-one can say. The only thing one can say is that it will be different.

I was just reading a report today about Finnish cinemas. There were only 6 copies of 'The Queen' circulating: which means it gets to rural areas (at worst) 4- 6 months later, by which time the DVD is out. There is no chance in this monoculture for biodiversity.

Do we accept the monoculture with a very small niche for 'other' creativity, or do we reject the monoculture and accept the specialization of biodiversity and reinforce the idea of robustness?

IMO the lesson of Nature tells us that mongrelization leads to robustness and invigoration. And there is a timescale to that. Just as the product of cross fertiliztion may skip a generation, so the product of musical cross fertilization may take two generations - with a lot of creative people suffering in between. The 'failure' of the in-between generation does not condemn the process. Time will tell.

You can't be me, I'm taken

by Sven Triloqvist on Thu Jun 28th, 2007 at 06:25:46 PM EST
[ Parent ]
We are, obviously, way off thread here - but not as much as one might think. Maybe, like post WWII, in 2015 a lot of people are going to lose their occupations because those occupations will no longer be valued.

It has happened many times before.

The end of our dependence on oil products doesn't have to be calamitious. We just have to argue about the value of happiness and what that means, rather than  protecting 'jobs' that are no longer needed. Creativity will alway be needed - but of what kind?

You can't be me, I'm taken

by Sven Triloqvist on Thu Jun 28th, 2007 at 06:34:39 PM EST
[ Parent ]
I'm not confusing carriers and content. Everyone else seems to be.

I'm not the one who thinks that just because a creative work can be reduced to a digital file it's as valuable - or not - as every other digital file of equivalent length.

As for monocultures - that's a different issue again. I'll be the first to agree that corporate media monoculture is a bad thing. But the IP people's solution is more likely to create an even worse monoculture than solve the problem.

You create diversity by supporting talent. If you don't support talent - which is something that neither the corporates nor the IP people seem keen on - you don't get diversity.

Effectively I don't see a distinction between Pirate Bay and Microsoft on this issue. Neither has any interest in supporting art, and there's absolutely no evidence that either has ever made any effort to do so - nor ever will.

The point is that hardly anyone cares about content any more for its own sake. What's fashionable at the moment is a rather superficial vogure for creating markets for their own sake.

eBay, MySpace, YouTube, mp3.com (as was), PirateBay, Demonoid, and all the rest are all more interested in the process of bartering attention than in the content that's being exchanged.

Some people might find this exciting. I think it's creepy, because it means the capitalists have won - everything is a market now, and the highest possible value is either trading stuff, or stealing it.

The situation is almost exactly analogous to peak oil. In the same way that the physical world is considered an externality, the process of creativity is considered external to these markets.

But like the real world, it's a limited resource. It's quite a bit more sustainable than oil is, but that doesn't mean that if it's not nurtured it's not going to diminish into rather less than it has been for the last few hundred years.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jun 28th, 2007 at 10:59:38 PM EST
[ Parent ]
If creativity is to be limited to only the talented, then how is that talent discovered and nurtured? And who says what talent is?

You can't be me, I'm taken
by Sven Triloqvist on Fri Jun 29th, 2007 at 03:20:31 AM EST
[ Parent ]
That is why we should stop burning our hydrocarbons.

But anyway, if you can do synthetic hydrocarbons for fuel, you can do them for polymers. They will just be horrendously expensive, but they will still be there.

I think we need plastics for much less than we use them. We've gotten used to having everything made of plastic since the 1950's.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 07:11:37 AM EST
[ Parent ]
The key lines from the movie  'The Graduate' (1967)

Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
Benjamin: Just how do you mean that, sir?

You can't be me, I'm taken

by Sven Triloqvist on Thu Jun 28th, 2007 at 11:42:56 AM EST
[ Parent ]
Here's what was said about Iraqi oil production six years ago:

"Like it or not, Iraqi reserves represent a major asset that can quickly add capacity to world oil markets and inject a more competitive tenor to oil trade. However, such a policy will be quite costly as this trade-off will encourage Saddam Hussein to boast of his 'victory' against the United States, fuel his ambitions, and potentially strengthen his regime."

"The resulting tight [oil] markets have increased U.S. and global vulnerability to disruption and provided adversaries undue potential influence over the price of oil. Iraq has become a key "swing" producer, posing a difficult situation for the U.S. government."

Both quotes are from Baker Institute Study No. 15 "Strategic Energy Policy - Challeges for the 21st Century", April, 2001, prepared by the Council on Foreign Relations. This report was commissioned by the Bush administration in preparation of the Bush/Cheney National Energy Policy of May, 2001.

The whole focus of this report is on the developing dangers to US energy security. It was understood, even back then, that Iraq had a key role in addressing the difficulties presented by tightening oil markets.

by PatrickCummins on Thu Jun 28th, 2007 at 12:35:57 AM EST
... since I was about to post this amazing news on ET !
This interview is all the more puzzling since it is miles away from IEA speech only 2 years ago !
I wouldn't be surprised if this kind of change of mind conceals some sort of vested interests for Mr. Birol. Perhaps he tries to protect himself from public prosecution when things will turn out badly, after years of complacency speeches ?

------------- If liberty means anything at all, it means the right to tell people what they do not want to hear (Orwell)
by Baikal (baikal@no-log.org) on Thu Jun 28th, 2007 at 06:53:19 AM EST
This is consistent with the "no official reason to doubt" line.

He's giving his personal opinion, but official pronouncements by the IEA have to be based on the best available data, which includes the highly overstated OPEC reserves.

For the IEA to develop their own estimate of actual OPEC reserves based on their own models would put their reports on chaky ground and start a political storm, so they don't do that.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 06:59:29 AM EST
[ Parent ]

Here is a totally different view :  only growth in the future for the oil-guzzling flying things.

Boeing: Current Market Outlook 2007

Even as you read our forecast for the next 20 years of air travel, the world around you is changing.

The Outlook shows persistent growth rates across all markets over the next 20 years.

And the pace of change will feel stronger because of the many exciting service innovations and expanding travel choices brought by competition in local markets.

     
 


The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Thu Jun 28th, 2007 at 07:27:55 AM EST
  1. Assume infinite supply of fuel.
  2. ???
  3. Profit
by Colman (colman at eurotrib.com) on Thu Jun 28th, 2007 at 07:29:14 AM EST
[ Parent ]


Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 07:32:30 AM EST
[ Parent ]


The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Thu Jun 28th, 2007 at 07:35:30 AM EST
[ Parent ]
Even with a global oil production in decline, the physical availability of jet fuel is not peril for at least 2 decades. It represents only a small fraction of all oil-derived products, circa 5-6%.
So, assuming people are sufficiently travel-addict to pay the price, refiners will be able to supply the air market.
On top of that, never forget that jet fuel is an arbitration product (wedged between gasoline and diesel in the distillation column), so that any demand contraction from road transport will free a significant new supply for airplanes. If alternative fuels manage to penetrate ground transportation in noticeable proportions, then air transport development may well keep the same pace.
This is really a matter of how much world middle-class travellers are willing to pay to conserve their planetary mobility. In other terms, though Airbus and Boeing predictions of air traffic growth until 2020 may look like incantations, they may not be so far from the truth, assuming final customers accept to spend more. And, believe it or not, that's what happened over the last 3 years, while in the same time the price of oil increased three-fold: growth didn't even slow down ...

------------- If liberty means anything at all, it means the right to tell people what they do not want to hear (Orwell)
by Baikal (baikal@no-log.org) on Thu Jun 28th, 2007 at 07:59:24 AM EST
[ Parent ]
So, assuming people are sufficiently travel-addict to pay the price, refiners will be able to supply the air market.
On top of that, never forget that jet fuel is an arbitration product (wedged between gasoline and diesel in the distillation column), so that any demand contraction from road transport will free a significant new supply for airplanes.

Yes, but this will require more secondary processes such as cracking and reforming. Out of distillation you can only really get what's already in the crude oil mixture.

If I understand it correctly, we're running out of "light sweet" crude much faster than other kinds of oils and increasingly gasoline (and kerosene) are going to be not directly distilled but oftained from cracking of heavier hydrocarbons.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 08:06:47 AM EST
[ Parent ]
Yes, but this will require more secondary processes such as cracking and reforming. Out of distillation you can only really get what's already in the crude oil mixture.

Even with heavier crudes, refiners have the possibility to set up distillation so that the proportion of jet fuel in the final derived products shifts from the current 6% to at least 12% (in volume). I got it from a top-executive from Total, a few months ago.
Of course, the bill will be more expensive to do that.

------------- If liberty means anything at all, it means the right to tell people what they do not want to hear (Orwell)

by Baikal (baikal@no-log.org) on Thu Jun 28th, 2007 at 08:13:12 AM EST
[ Parent ]
There's more to refining than just distillation. That's the point. Distillation is the cheap part.

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 10:15:33 AM EST
[ Parent ]
I think that demand of oil is very elastic. the issue here is that it is not linearly elastic.

My point of view..as most people here know.. is that no reduction in oil demand will appear until a certain threshold is not crosse3d. then.. demand can accomodate to offer very elastically given that oil demand can be reduced just by driving less..andd slowly changing the car fleet. The demands out of private car use are really low

If we stay at 85 million barrel per day oil price can rise to 90$ or even 150 $ to curb the demand of gas as other countries develop and use oil for more basic needs.

Regarding primary energy.. nuclear, and wind will do the trick (plus coal if needed)...Oil is almsot not needed

MY only worry is that with high prices we start producing oil with coal.. that will be crazy... otherwise we will have a soft landing in liquid oil .... and governments just need to have a commodities transported via trains and railways...

Unfortunately, it could be that governments do not do even this very basic thing... producing a sharp increase in inflation..(Spain, case in point)

I hope they have it on mind.. otherwise...

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 28th, 2007 at 11:07:09 AM EST
Demand can accomodate to offer very elastically given that oil demand can be reduced just by driving less..andd slowly changing the car fleet.

If people commute to work, a lot of that demand isn't voluntary. Likewise at the moment there's almost no buy-in (if you'll excuse the marketing speak) among car makers that cheaper, smaller cars are necessary.

Interestingly I'm seeing more and more very small cars on the roads in the UK at the moment. A few years ago a Smart was a very rare sight. Now they're getting to be quite common.

There are still plenty of FUVs too though. And most advertising seems to be targetting the FUV rather than the mini-car market - even though there seems to be strong demand for smaller and cheaper among everyone who isn't an oblivious soccer mum or a raging petrol head.

More worrying is a trend towards diesel freight, away from train haulage.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jun 28th, 2007 at 12:40:59 PM EST
[ Parent ]
>precisely this complex market situation makes a fopr a complex elastic problem.. but at the end aleastic. if you take compulsory drive but consider, leasure driving, driving which coul be done by public transport and the possibility of changin the car fleet.. I would say half of the demand of oil could be gone if necessary with no effect on any other field of the economy... except those car industries that can not adapt and thsoe countries where commodoties is not mainlyu transported by train (to keep inflation under certianc ontrol).

it is my view.. though.. just my personal take.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Thu Jun 28th, 2007 at 06:42:38 PM EST
[ Parent ]


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