Tuesday, November 25, 2008

Citi Pirates' Group

I just thought I'd make a commentary about the Citigroup Gnomes boarding the good ship United States (still piloted by Bush, Paulson and Brenenke) and making off with $25 bn additional plunder with promises to come back and plunder $306 bn more in the future to "cover their losses" from their bed derivatives bets so they won't get devoured by the Derivatives Beast.


For now, a cartoon.


Saturday, November 15, 2008

Two Cartoons



The first one I thought of Chicken Little, who said to Henny Penny, Goosey Loosey and Foxy Loxy, "The sky is falling!" Well, a lot of left leaning people thought the sky was falling for eight long years are now cautiosly hoping that Obama will hold it up. Other people, too. As if one man can reverse all the consequences of the sins of the people in Washington, Wall Street, and the rest of Corporate America. Heh.




The second one was inspired by Elaine Meinel Supkis's many gnome drawings. Except this one looks like a portrait that hung on some gnome's wall!


Friday, November 14, 2008

My Take on Developing All That Oil by 2030

Given the current financial crisis, including the Derivatives unravelling, US Gov't inability to sell 92% of its T-bill offer on the 10th, and general Wall Street cock-up, here's my opinion that there will be sufficient financing or adequate capital to develop oil resources sufficient to attain the production flows predicted by the IEA 'til 2030:


Thursday, November 13, 2008

Looks Like Peak Oil is History, or Imminent


Graph credit:

World Oil Production in IEA's Reference Scenario (IEA WEO 2008 Slide 8) Source: (pdf)

From The Wall Street Journal Blog

Peak Oil: Get Ready for the Oil-Supply Crunch, IEA Says

Lower oil prices these days are both a result of the economic slowdown and a possible cushion. But they could be a very mixed blessing. The Paris based International Energy Agency is worried about an oil supply crunch in coming years. It’s not due to geology—the IEA says the world has plenty of oil, in one form or another. But trying to match oil supplies to growing oil demand in coming years is a Herculean task made all the harder by cheapish crude prices which make oil companies think twice about new investments.

The biggest challenge will come between 2010 and 2015, the IEA says in its 2008 World Energy Outlook. For the next couple of years, the oil pipeline is well supplied. But that trails off after 2010. By 2015, the world needs to find an additional 7 million barrels per day of oil above and beyond the projects currently in the pipeline. And to get that oil to market those projects need to get started now. But now’s not a good time . . .


From The Oil Drum:

Unfortunately, recent market events, only indirectly related to oil, will now likely set July 2008 in stone as the date of maximum world oil production, despite the 'best-best case' scenario portrayed in the IEA report. Up against near double digit depletion rates and higher cost (lower energy gain) prospects, the oil industry now also faces a growing lack of confidence in the international financial system where near herculean investment is needed ($26 trillion = 37 times the recent controversial $700 billion bailout package in US), and credit, especially when the price of oil is well below the marginal cost of extraction (at 86mbpd) makes approving new projects, let along continuing existing production, problematic. Though not explicitly stated, one may infer that there is now increased risk that these investments will not be made.
And where are we going to get $26 Trillion to eke out a peak in 2030 when our economy is being killed by a credit crunch that itself is being caused by the just-barely-beginning-of-the-unwinding of over ONE QUADRILLION DOLLARS IN DERIVATIVES?!?! Even more so, when the price in oil is being hammered daily by the collapse of the commodities bubble, which so recently caused great inflation in consumables (food, fuel, etc)?

Looks to me we won't get peak oil in 2030, but much, much sooner due to lack of investment using credit (debt).

Wednesday, November 12, 2008

On Peak Oil




A long time ago, on a message board far, far away, I announced the existence of this blog with some fantasy route markers I asked the other board members to look at.



A certain John H. Weeks III asked this...



"That page makes a statement about 'peak oil.' No doubt that state will be reached someday. But you appear to state that it has already happened.



"If that is so, how do you reconcile the following two facts:



"1) the amount of proven oil reserves is at an all time high this year in 2008.



"2) the amount of proven oil reserves has been higher each decade than the decade before going back to 1890.



"These are both based on data from the American Society of Petroleum Engineers.



"If the amount of [proven] reserves keeps going up, and we are not even actively exploring many promising areas, then how can one state that peak oil is even in the near future, let alone happening now?"



What I said in reply didn't satisfy him...



'At The Oil Drum http://www.theoildrum.com one can find facts on discoveries and annual production rates. I have found there that discoveries each year are now less than the annual production. Doesn't sound like all-time highest proven reserves to me. The site also includes professional opinions by petroleum company geologists (nearly always cited in a mainstream media link) that Peak Oil is imminent!



'It has also been proven that the maximum amount discovered in any one year, globally, was in 1964. In the US that event was in the 1930s and peak oil production in the US was in 1971 and has declined ever since. The key is not the actual amount of proven reserves but the actual production! And since 2005, oil production has been on an irregular, bumpy plateau.



' "These are both based on data from the American Society of Petroleum Engineers."
'It would be nice of you to provide a link.



' "If the amount of [proven] reserves keeps going up, and we are not even actively exploring many promising areas, then how can one state that peak oil is even in the near future, let alone happening now?"



'Define "many promising areas." Sometimes these areas prove not to hold as much as promised, or have potential extraction costs that make exploitation uneconomical or even unfeasible, even with environmental regulations waived. Also, politics, equipment shortages and a credit crunch could pose difficulties in exploring those areas. Doesn't mean we shouldn't try.'
Well, this is what Mr. Weeks wrote back to me:



"Production rates are an artificial number that is based more on politics than anything else. The middle east could pump far more oil right now than what they do, but they don't because they want to keep prices high. It is the total amount of oil that we have discovered that is the key statistic here.



" 'It has also been proven that the maximum amount discovered in any one year, globally, was in 1964. In the US that event was in the 1930s and peak oil production in the US was in 1971 and has declined ever since. The key is not the actual amount of proven reserves but the actual production! And since 2005, oil production has been on an irregular, bumpy plateau.'



"As shown above, the is 180 degrees backwards. 2008 might top 1964 with the huge strike off the coast of Brazil.



" ' "These are both based on data from the American Society of Petroleum Engineers."



" 'It would be nice of you to provide a link.'



" It doesn't take too much effort on your part to google up that group. They are the source for oil statistics, just like NEMA is the standard for electrical codes and electrical safety.



" ' "If the amount of proven reserves keeps going up, and we are not even actively exploring many promising areas, then how can one state that peak oil is even in the near future, let alone happening now?" '



"We are not exploring at rates that we have in the past because we have such high proven reserves. We don't need to find more oil, we need to pump the oil that we already know about. Oil wells are expensive to drill and operate. You maximize your profits by using existing wells more rather than drilling new wells.



" 'Define "many promising areas." Sometimes those areas prove not to hold as much oil as promised, or have potential extraction costs that make exploitation uneconomical or even unfeasible, even with environmental regulations waived."
Well, let me just pick this reply apart for the vultures to eat...



"Production rates are an artifical number that is based more on politics than anything else. The middle east could pump far more oil right now than what they do, but they don't because they want to keep prices high. It is the total amount of oil that we have discovered that is the key statistic here."



No only do the Middle Eastern countries want to keep oil prices high (above $100.00) but they also want to keep some of their reserves that still remain for future generations so their kids won't be forced to go back to riding camels! Before I go onto discovery statistics, though, I have something else to say about production. Although politics does have a lot to do this, sometimes politics causes people to LIE about the real reason they are not pumping out as much as (we, Obama and Bush think) they could. In other words, the Middle Eastern countries could be hitting their geological limits! This unverified "fact" could be true: note the deceleration of the increase of oil production for the whole planet starting around 1998 (this can be readily observed by viewing annual production graphs that can be readily googled).



No on to discoveries: apparently there are two kinds of terms for "discoveries" in the petroleum geologist and engineering community -- definitely at least as defined by M. King Hubbert in his peak oil theses.



First: what I called discoveries, are known as "hits."



Second: "discoveries" as defined by Mr. Hubbert at least are the cumulative oil produced up to a given year plus the known amount of reserves remaining in the ground for that same year. (Oh, God, that definition makes my brain hurt!)



Production: well, that's obvious.



The source I shall be quoting (and graphs therefrom I shall post in due time) uses the annual statistics to obtain a final total of reserves and an approximate peak year for "hits," "discoveries" and "production." The source is: Beyond Oil, The View from Hubbert's Peak, by Kenneth S. Deffeyes, Hill and Wang, a division of Farrar, Strauss and Giroux, publishers, 19 Union
Square West, New York, NY 10003. Available at your local bookstore (please patronize the mom 'n' pops) or Amazon dot com. Here goes.



Page 49:



"We can put together composite picture of the world oil situation by coaxing production, discoveries, and hits onto one graph. Here is the numerical scoreboard for the best-fitting lines:"



Production





Years where (annual production) / (square of cumulative production) is constant: 1983-2003
Constant "a" for 1983-2003 [aka (annual production) / (square of cumulative production): 0.059
Q[t] (estimated grand total of cumulative production for all of oil production history, past and future: 2.013 Trillion Barrels
Predicted year of Peak production: 2005
Percentage of Q[t} used up: 49%



Discoveries



Years where (annual discoveries) / (square of cumulative discoveries) is constant: 1976-2002
Constant "a" for 1983-2003 [aka (annual discoveries) / (square of cumulative discoveries): 0.072
Q[t] (estimated grand total of cumulative discoveries for all of oil production history, past and future: 2.013 Trillion Barrels
Predicted year of Peak discoveries: 1978
Percentage of Q[t} discovered: 82%



Hits



Years where (annual hits) / (square of cumulative hits) is constant: 1976-2002
Constant "a" for 1983-2003 [aka (annual hits) / (square of cumulative hits): 0.072
Q[t] (estimated grand total of cumulative hits for all of oil production history, past and future: 2.013 Trillion Barrels
Predicted year of Peak hits: 1964
Percentage of Q[t} hit: 94%



THESE LAST TWO SETS OF NUMBERS ARE NOT GOOD. For if the total amount of oil that we have discovered is the key statistic then we have ALREADY DISCOVERED 84% OF ALL THE OIL WE EVER WILL DISCOVER, and we ahve ALREADY HIT UPON 94% OF ALL THE OIL WE HAVE EVER HIT.



And here is the combined graph from page 50. Colored in to be more obvious.




What the key statistics are telling us is that we are so severely screwed. And the recent July 1008 of an all-time high (so far) of oil production shows us that politics have more to do oil production than anything else. Whether another all-time high can be achieved two or three decades from now remains to be seen.

" 'It has also been proven that the maximum amount discovered in any one year, globally, was in 1964. In the US that event was in the 1930s and peak oil production in the US was in 1971 and has declined ever since. The key is not the actual amount of proven reserves but the actual production! And since 2005, oil production has been on an irregular, bumpy plateau.'

"As shown above, the is 180 degrees backwards. 2008 might top 1964 with the huge strike off the coast of Brazil."

And as shown above, even if "the is 180 degrees backwards," we are still not out of the woods, and likely never will, so long as we, the world, remain oil-dependent. And the "huge strike off the coat of Brazil" wasn't that big to begin with. And the amount of reserves that hit was reported to contain was, from what I remember, reduced.

I will have choice words to say about 'proven reserves' a little further down in this post. But first...

" ' "These are both based on data from the American Society of Petroleum Engineers."

" 'It would be nice of you to provide a link.'

" It doesn't take too much effort on your part to google up that group. They are the source for oil statistics, just like NEMA is the standard for electrical codes and electrical safety."
Well I did google that group up, and guess what: it doesn't show up. Which probably means, it doesn't exist, PERIOD. HAHAHA. The closest relatives that do exist are the Society of Professional Engineers and the American Society of Petroleum Operation Engineers.

So I looked for petroleum statistics and guess what I found: Statistics on proven reserves by the USGS. Source: http://http://www.spe.org/spc-site/spe/spc/industry/reserves/OGR_Mapping_Final_Report.pdf Scroll down to page 21.

Quote: "Users should be aware of the 'reserves' terminology used in current USGS reports as illustrated in this chart based on results information in the USGS World Petroleum Assessment 2000."

The chart that follows:


World Excluding United States (conventional)
Oil - billion barrels
F95 F50 F05 Mean
1 - Cumulative Production 539
2 - Remaining Reserves 859
3 - Known Reserves (1+2) 1398
4 - Reserves Growth 192 612 1031 612
5 - Undiscovered 334 607 1107 649
6 - Future Volumes (2+5) 1508
7 - Future Grown Volumes (2+4+5) 2120
8 - Total Endowment (1+2+4+5) 2659

The USGS defines "reserves" as cumulative production plus remaining reserves that are still in ground. HAHAHA. These clowns actually include the amount that has already been extracted, shipped or piped, refined, shipped or piped again, SOLD, and BURNT or otherwise CONSUMED by the end user! If you or I went into a bank to get a loan, and the banker asks us how much savings we have, would we include the amount we have already withdrawn from our various savings accounts and SPENT? HAHAHA. Yet that is the logic the USGS uses here. No wonder the amount of "reserves" have been at an all time high this year in 2008, and have been higher each decade than the decade before going back to 1890!

If I include the amount of money I have spent since finishing college as 'wealth,' I, an ordinary middle-class citizen, would be fabulously wealthy!

And note how the USGS gets at the 'proven' numbers: by obtaining the mean, not by 95% probability (F95) of attainment! For clearly the future volumes will be dependent on politics and finance, assuming the Total Endowment is the amount that's already hit upon. If we are talking about future hits in this Endowment, then good luck with the hits, given the current credit crunch and geopolitical climate! HAHAHA.


So, let us get a more realistic set of numbers, given the current financial and political issues that are out and about:

World Excluding United States (conventional) (2000)
Oil - billion barrels
F95 F50 F05 Mean
1 - Cumulative Production 539
2 - Remaining Reserves 859
3 - Known Reserves (1+2) 1398
4 - Reserves Growth 192 612 1031 612
5 - Undiscovered 334 607 1107 649
6 - Future Volumes (2+5) 1192 1466 1966 1508
7 - Future Grown Volumes (2+4+5) 1385 2078 2997 2120
8 - Total Endowment (1+2+4+5) 1924 2617 3536 2659

And one can add to these numbers 228 billion barrels for Total Endowment per M. King Hubbert or 362 billion barrels per USGS for the United States to obtain global totals. So for Total Endowment, 95% probability, we get 1924 Gb plus (assumed) 228 Gb for a conservative planetary Total Endowment of 2.152 trillion barrels. Much closer to M. King Hubbert's estimated planetary Global Endowment than the USGS's mean of 3.021 trillion! THESE ARE NOT COMFORTING DATA, PEOPLE!

And Mr. Deffeyes shows that by data he is privy to that in 2005 the cumulative production (and consumption) was about 1 trillion barrels. Just less than half of 2.152 trillion. And peak oil is likely to happen when about half the oil endowment is consumed!

" ' "If the amount of proven reserves keeps going up, and we are not even actively exploring many promising areas, then how can one state that peak oil is even in the near future, let alone happening now?" '

"We are not exploring at rates that we have in the past because we have such high proven reserves. We don't need to find more oil, we need to pump the oil that we already know about. Oil wells are expensive to drill and operate. You maximize your profits by using existing wells more rather than drilling new wells.

" 'Define "many promising areas." Sometimes those areas prove not to hold as much oil as promised, or have potential extraction costs that make exploitation uneconomical or even unfeasible, even with environmental regulations waived."

Of these three paragraphs, the last is mine. The second appears to be Mr. Weeks' response to it.
We are also not exploring at rates that we have in the past because we have a shortage of exploratory drilling rigs - all such rigs are spoken for by exploration commitments for the next five years! And it is not likely that exploration will expand due to the credit crunch. And 'wildcat' wells will be few and far between, for not only being obviously expensive to drill and operate, they are also chancy. Even with the perquisite non-drilling exploration (seismic survey, remote sensing, etc.) that is likely to precede them -- even more so, now that that credit is so much tighter than ever since the Great Depression. So of course the oil producers are going to maximize their profits by using their present wells, as much as they can. That is stating the obvious.







Tuesday, November 11, 2008

Fantasy Route Markers - Newfoundland And Labrador


This route marker is a more colorful version of the previous route marker that Newfoundland / Labrador had. I made the "ROUTE" banner and surround white, and added the provincial tourism logo.

Canadian Route Markers - Prince Edward Island



Here are two samples of a recoloring of Prince Edward Island's route marker. One has trees in summer, the other in autumn.






Canadian Route Markers - Nova Scotia

Here are some ideas I came up with for Nova Scotia's Arterials, Trunk Routes and Collector Roads. The Arterials' marker patterned after Quebec's autoroute marker; Trunk Routes after the current NS Arterial sign but with a green semi-circular field instead of blue; and Collectors a plain square in US county road colors, plus a pale yellow for visibility, topped of with a NS Flag emblem.




Canadian Route Markers - Ontario

Here are two samples of markers for Ontario's 400-series highways, patterned after the Autoroute markers for the province next door, Quebec.




Brazilian National Route Marker

I thought the Brazilian National Route Marker would look a lot nicer if the banner at top was replaced with graphics from the brzilian flag, and the BR- prefix dropped from the number at the bottom. Like this:
The grey is outside the sign limits.

Monday, November 10, 2008

Things are NOT working on these computers!

First of all, I tried logging in at noontime and Blogspot would NOT recognize my password! Now I was trying to upload photos and it's just takiing FOR EVER.

Which means posting the fictional Canadian Route Markers that I came up with will have to wait another day.

And a post on Peak Oil, another day still.

Saturday, November 8, 2008

More Fantasy Route Markers Coming Soon

Monday I'll be posting fantasy route markers for the Canadian provinces of Newfoundland and Labrador, Prince Edward Island, Ontario and Nova Scotia.

Three of the provinces I don't have signs anywhere on the net yet, but the ones for Ontario may be viewed at "The Great International Highway Makeover," http://http://www.us-highways.com/new_signs.htm .