It is now generally accepted that nuclear power will become an increasingly vital part of the world's energy provision, specifically that of electricity. Proposed expansion of uranium production in Russia means that it is likely that 45% of the uranium nuclear fuel used in the world will by 2030 come from Russia and its environs - a very strong card to throw on the table in the unfolding game of "new world order", which is underpinned utterly by resources, especially those of energy.
The terms "energy" and "electricity" are often but incorrectly used synonymously. Only a proportion of total energy is used in the form of electricity, in the U.K. about one fifth; roughly 40% of the rest comes from oil used almost entirely to fuel transportation, and the remainder is thermal energy to heat buildings and run industry, more of which could in principle be provided via electricity if generating capacity can be expanded. The U.K. seems set to maintain gas-fired electricity output, even though there are issues over just how much gas we will be able to import in competition with other nations in Europe, and switching-over to more nuclear power from gas-technology will not be easy.
Last year, Russia overtook Niger to become the fourth largest producer of uranium, following Canada, Australia and Kazakhstan, with an output of 3,527 tons. There are however plans to recover much more uranium from deposits in Eastern Siberia and other regions and through deals with other uranium producing countries: Canada and Kazakhstan already have cooperative arrangements in place and there are explorations ongoing in Mongolia which it is thought may have the greatest uranium resources of any nation.
In the far-eastern Russian Chita Region lies the city of Krasnokamensk, home to the Priargun "mining and dressing" plant, which produces a massive 93% of Russia's uranium. The proven reserve there is 150,000 tons and another 7% is produced by underground leaching (a much cheaper process than conventional mining) in Dalur (Kurgan Region) and the Republic of Buryatia (Khiagda). In total these deposits are sufficient to meet home-demand only and so, if Russia is to become a major exporter and controller of the world uranium market, it has to yield more from elsewhere.
Additionally, Russia must provide uranium for soviet-built nuclear plants (e..g Metsamor in the Republic of Armenia and Kozloduy in Bulgaria) abroad, along with meeting contracts for uranium-enrichment and the overall result is a deficit of around 6000 tons a year of uranium. This shortfall from "new" resources is made-up by reprocessing uranium from nuclear weapons and "depleted uranium tails" which are deposits of ore that are used twice. However, these "secondary reserves" will be used-up in 10 - 15 years and so more actual "new" production is unequivocal.
In this regard, the Rosatom uranium monopoly, Atomredmetzoloto, intends to up its production to 3,880 tons (up 10% on 2007) and to increase this to 20,000 tons by 2024. As noted in the context of oil, it is the rate of supply (the "tap") that matters more than the size of the reserve (the "tank"). Russia has a very large tank of uranium, holding around 564,000 tons if the deposits at Elkon of 344,000 tons is included. Elkon is located on the banks of the River Aldan in Yakutia in the north of the Republic of Sakha, and the uranium ore is buried deep underground in a bank of permafrost and so digging it out will not be all that easy.
I wonder too, whether there will be disturbances of methane hydrate, releasing methane into the atmosphere in the process. The Argentines are measuring the gas-output from the arses of cattle at the moment which they fear might be causing 30% of Argentina's methane global-warming gas emissions, but what in comparison could mining Siberian permafrost turn-up?
All in all, experts have reckoned that Russia could produce 45% of the world's uranium by 2030, which, if nuclear power becomes as important as some think in the fight to wean the world off fossil-fuel, will place them centre-stage in world affairs.
Related Reading.
"Russia's uranium breakthrough." By (RIA Novosti commentator) Tatyana Sinitsyna http://en.rian.ru/analysis/20080708/113538769-print.html.
Thursday, July 10, 2008
Tuesday, July 08, 2008
Clusterfuck Nation.
The exact origins and definition of the term "clusterfuck" are a matter of debate, but for the present purposes, I note the definition in Wiktionary [1] : "A particular kind of Catch-22, in which multiple complicated problems mutually interfere with each other's solution. The looser usage, referring to any chaotic situation, probably prevails."
This definition accords with James Howard Kunstler's usage, who writes a blog called "Clusterfuck nation", which describes a nation whose threads of ideology and infrastructure are codependently connected via the use of huge amounts of energy, car-dependence and hence oil. Thus in its addiction to the latter, it is ensured that the entire edifice must fail. Kunster is not a cheerful commentator, as in his book "The Long Emergency" and deftly played-out in his novel "World Made by Hand", where he invents a world which, if not downright apocalyptic, is entirely post-industrial, following a collapse of society and technology, and driven mainly by the toil of humans and other animals, and human ingenuity using hand-held devices, hence the title.
The aspect of codependency is common in the West. Kunstler is writing specifically about the United States, since he is an American, but in general, the problems and instabilities he alludes to are those of all of us, and I note with unsettling and compounding disquiet, that the news breaking on the British shores is not great just now and does little to promise better times to come. We are addicted to our lifestyles, which are comparatively comfortable and all forces conspire to enable a common addictive behaviour. No legitimate citizen should starve in the U.K. The welfare system is intended to take care of that, but with 49% of the British population on benefits of some kind (including pensions) and an economy that is starving of revenue, I wonder for how much longer that can be sustained.
When it was set-up in 1947, the welfare state was intended as a safety-net, not the way of life it has become for many. It has been argued that the system has contributed to social disintegration since broken families are "encouraged" by it, coupled with high ("real") unemployment, and this is a significant part of the rise in crime among sectors of the young [2]: a lack of a sense of belonging and purpose. The welfare system props-up the mess without fostering the means to get out of it. Personal debts and government debts are high. If the economy is on the verge of a recession, the service sector will begin to contract and since we have "lost" most of our manufacturing industry, it is service-jobs that keep the money in circulation. Less money in people's pockets will hit retail and entertainment industries hard, resulting in job-losses, more for the welfare system to pay out and less in the way of tax coming back into it. The escalation in the cost of basics like fuel and food will compound these difficulties. A real clusterfuck situation.
I do not envy the present government its many tasks. Some solutions might be simple but harshly unpopular. Real vote-losers; but the present issues are of far greater magnitude than mere party-politics. How to unify a nation in economic decline and which will call its debts in? Mr Brown has called for the British people to waste less food. Good common sense, one might say. When I was a kid, food wasn't wasted. We didn't starve but neither did families put half-dozen different ready-meals into a microwave because one child wanted this, another that and another sibling something else. You ate it or went without. Perhaps there are too many choices now and this has contributed to the confusion and freneticness that we seek to escape from by buying more material things.
Ironically, it is cheaper to cook from basic ingredients than any number of BOGOF's (buy-one-get-one-free deals), which are under threat, being blamed for much of the 4.1 million tonnes of food that is wasted in Britain annually - around £1 billion worth or £400 a year for an "average" family, whatever that is these days. I reckon about 3 people per household given these figures. There is a lack of awareness of basic skills such as growing food, cooking it, elementary nutrition, household repairs and so on that were not that long ago, common knowledge.
I'm not knocking anyone or anything, and I am certainly not as pessimistic as Kunstler (probably because I can't bear to think that way), but in an age of unparalleled university expansion in Britain, there is an absence of fundamental teaching about how to live and to live within one's means. When the credit cards are taken away, the housing market has fallen and the welfare bill is no longer affordable, what otherwise will happen to this population, on the whole of pretty decent people, left without the wisdom and practicality of generations? Mr Brown, apart from not wasting food, what should be our priorities in the world at hand?
References.
[1] http://en.wiktionary.org/wiki/clusterfuck
[2] "The welfare state is behind youth crime." By Simon Heffer: http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/28/do2801.xml
This definition accords with James Howard Kunstler's usage, who writes a blog called "Clusterfuck nation", which describes a nation whose threads of ideology and infrastructure are codependently connected via the use of huge amounts of energy, car-dependence and hence oil. Thus in its addiction to the latter, it is ensured that the entire edifice must fail. Kunster is not a cheerful commentator, as in his book "The Long Emergency" and deftly played-out in his novel "World Made by Hand", where he invents a world which, if not downright apocalyptic, is entirely post-industrial, following a collapse of society and technology, and driven mainly by the toil of humans and other animals, and human ingenuity using hand-held devices, hence the title.
The aspect of codependency is common in the West. Kunstler is writing specifically about the United States, since he is an American, but in general, the problems and instabilities he alludes to are those of all of us, and I note with unsettling and compounding disquiet, that the news breaking on the British shores is not great just now and does little to promise better times to come. We are addicted to our lifestyles, which are comparatively comfortable and all forces conspire to enable a common addictive behaviour. No legitimate citizen should starve in the U.K. The welfare system is intended to take care of that, but with 49% of the British population on benefits of some kind (including pensions) and an economy that is starving of revenue, I wonder for how much longer that can be sustained.
When it was set-up in 1947, the welfare state was intended as a safety-net, not the way of life it has become for many. It has been argued that the system has contributed to social disintegration since broken families are "encouraged" by it, coupled with high ("real") unemployment, and this is a significant part of the rise in crime among sectors of the young [2]: a lack of a sense of belonging and purpose. The welfare system props-up the mess without fostering the means to get out of it. Personal debts and government debts are high. If the economy is on the verge of a recession, the service sector will begin to contract and since we have "lost" most of our manufacturing industry, it is service-jobs that keep the money in circulation. Less money in people's pockets will hit retail and entertainment industries hard, resulting in job-losses, more for the welfare system to pay out and less in the way of tax coming back into it. The escalation in the cost of basics like fuel and food will compound these difficulties. A real clusterfuck situation.
I do not envy the present government its many tasks. Some solutions might be simple but harshly unpopular. Real vote-losers; but the present issues are of far greater magnitude than mere party-politics. How to unify a nation in economic decline and which will call its debts in? Mr Brown has called for the British people to waste less food. Good common sense, one might say. When I was a kid, food wasn't wasted. We didn't starve but neither did families put half-dozen different ready-meals into a microwave because one child wanted this, another that and another sibling something else. You ate it or went without. Perhaps there are too many choices now and this has contributed to the confusion and freneticness that we seek to escape from by buying more material things.
Ironically, it is cheaper to cook from basic ingredients than any number of BOGOF's (buy-one-get-one-free deals), which are under threat, being blamed for much of the 4.1 million tonnes of food that is wasted in Britain annually - around £1 billion worth or £400 a year for an "average" family, whatever that is these days. I reckon about 3 people per household given these figures. There is a lack of awareness of basic skills such as growing food, cooking it, elementary nutrition, household repairs and so on that were not that long ago, common knowledge.
I'm not knocking anyone or anything, and I am certainly not as pessimistic as Kunstler (probably because I can't bear to think that way), but in an age of unparalleled university expansion in Britain, there is an absence of fundamental teaching about how to live and to live within one's means. When the credit cards are taken away, the housing market has fallen and the welfare bill is no longer affordable, what otherwise will happen to this population, on the whole of pretty decent people, left without the wisdom and practicality of generations? Mr Brown, apart from not wasting food, what should be our priorities in the world at hand?
References.
[1] http://en.wiktionary.org/wiki/clusterfuck
[2] "The welfare state is behind youth crime." By Simon Heffer: http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/28/do2801.xml
Monday, July 07, 2008
UK "Secondary Priority" for Norwegian Gas Supplies.
The UK has much of the infrastructure in place to receive imported gas from Norway and other nations, but how certain can we be that the gas will come here? Alarmingly, the executive vice-president of the Norwegian pipeline company, Gassco, has stated categorically that: "the UK is a secondary priority. Like it or not, that is a fact." His remarks stressed that long-term contracts with continental European countries were paramount. This is despite building the new Langeled gas-pipeline from a major offshore gas-field to the UK last year. Imports of gas from continental Europe via. the Netherlands and the Belgian connector are down, despite the significantly greater gas-prices in Britain.
The UK has gone to considerable efforts and expense to build gas-infrastructure, both in terms of pipelines and gas-terminals, but this does not of course guarantee the gas will follow. We import 20% of our gas from Norway now and this fraction of our gas supplies was expected to increase ("Hands Across the North Sea: British-Norwegian Gas Connections", posted July 6th, 2007); however this is now in doubt. By 2020, Britain will need to import 80% of its gas; a significant amount (perhaps 30%) is expected from Qatar in the form of Liquefied Natural Gas (LNG), for which two storage terminals, Dragon and South Hook, are being completed at Milford Haven, in south west Wales. There is another LNG terminal at Isle of Grain, at Medway, Kent, but this hasn't received a cargo since January.
Illustrating the buyer-seller aspect of gas-supplies now and in the future, one anticipated shipment of LNG from Algeria was abruptly diverted to Turkey, because the buyer offered more money in consequence to an interruption of existing pipeline-supplies of gas by Iran. Gas-prices are set internationally and have been raised by rising bids from Japan, Korea and China, who are worried over securing gas-supplies. An earthquake in Japan knocked-out some of its nuclear-electricity production, thus forcing the nation to lean harder on gas-fired power.
There seems little doubt that unless energy-utilities in the UK are prepared to stump-up for competitive gas-prices, we may run-short, as precious resources are simply sold-on elsewhere in the global marketplace. Britain must meet the shortfall in urgently declining production from the North Sea, and we will have to pay through the nose for it. Even though British customers are encouraged to change their energy supplier, the overall costs of both gas per se, and electricity, much of which in the UK is made from gas, rise relentlessly.
Prices of oil, and of its siamese-sister gas, will continue to rise according to increasing demand against the limited and competitive availability of resources. Oil production is expected to peak soon and gas within a decade or so, which begins to set limits on the production side of the energy gap that threatens. Among its other deliberations, I hope the G8 will now begin to make using less in the way of fossil fuels, a priority. The world will not run-out of them for a very long time, but we seem to have run-out of the cheap stuff. Some estimates are that fuel prices will be higher by as much as 40% this winter, and that is whether demand can be met or not. We may have power-cuts and still pay for the privilege.
Related Reading.
[1] "Gas flow to Britain slows depsite high prices." By Mark Milner. http://www.guardian.co.uk/business/2008/apr/28/oil.energy
[2] "Supply and demand keeps gas pressure building." By Alf Young.
http://www.theherald.co.uk/business/comment/display.var.2231852.0.supply_
and_demand_keeps_gas_pressure_building.php
The UK has gone to considerable efforts and expense to build gas-infrastructure, both in terms of pipelines and gas-terminals, but this does not of course guarantee the gas will follow. We import 20% of our gas from Norway now and this fraction of our gas supplies was expected to increase ("Hands Across the North Sea: British-Norwegian Gas Connections", posted July 6th, 2007); however this is now in doubt. By 2020, Britain will need to import 80% of its gas; a significant amount (perhaps 30%) is expected from Qatar in the form of Liquefied Natural Gas (LNG), for which two storage terminals, Dragon and South Hook, are being completed at Milford Haven, in south west Wales. There is another LNG terminal at Isle of Grain, at Medway, Kent, but this hasn't received a cargo since January.
Illustrating the buyer-seller aspect of gas-supplies now and in the future, one anticipated shipment of LNG from Algeria was abruptly diverted to Turkey, because the buyer offered more money in consequence to an interruption of existing pipeline-supplies of gas by Iran. Gas-prices are set internationally and have been raised by rising bids from Japan, Korea and China, who are worried over securing gas-supplies. An earthquake in Japan knocked-out some of its nuclear-electricity production, thus forcing the nation to lean harder on gas-fired power.
There seems little doubt that unless energy-utilities in the UK are prepared to stump-up for competitive gas-prices, we may run-short, as precious resources are simply sold-on elsewhere in the global marketplace. Britain must meet the shortfall in urgently declining production from the North Sea, and we will have to pay through the nose for it. Even though British customers are encouraged to change their energy supplier, the overall costs of both gas per se, and electricity, much of which in the UK is made from gas, rise relentlessly.
Prices of oil, and of its siamese-sister gas, will continue to rise according to increasing demand against the limited and competitive availability of resources. Oil production is expected to peak soon and gas within a decade or so, which begins to set limits on the production side of the energy gap that threatens. Among its other deliberations, I hope the G8 will now begin to make using less in the way of fossil fuels, a priority. The world will not run-out of them for a very long time, but we seem to have run-out of the cheap stuff. Some estimates are that fuel prices will be higher by as much as 40% this winter, and that is whether demand can be met or not. We may have power-cuts and still pay for the privilege.
Related Reading.
[1] "Gas flow to Britain slows depsite high prices." By Mark Milner. http://www.guardian.co.uk/business/2008/apr/28/oil.energy
[2] "Supply and demand keeps gas pressure building." By Alf Young.
http://www.theherald.co.uk/business/comment/display.var.2231852.0.supply_
and_demand_keeps_gas_pressure_building.php
Thursday, July 03, 2008
U.K.Fuel Tax Freezes, but Rising Prices.
The price of fuel at the pump in the U.K. is the highest anywhere in Europe and this is making life very painful for all kinds of motoring particularly the haulage industry. The price of a barrel of Brent crude oil hit $145.11 on the Asian markets yesterday, and that $150 "sesquiennial" watershed before the feared $200 barrel does look imminent, although I had thought we would not see oil at $150 until the end of 2008. It seems, however, that oil prices are becoming less predictable beyond the reasonable expectation that they will continue to rise.
Yesterday saw a truckers' protest in London, but I doubt it will have any effect in reducing fuel prices. Into this tinderbox was threatened the spark of the government increasing fuel taxes by 2p a litre, amid urgent calls to reduce it. The Daily Express newspaper has been bearing a flag that fuel costs could be reduced by 14p a litre, but since this would involve depleting the chancellor's coffers at an especially demanding time - Mr Darling has already had to borrow over £50 billion this year - I doubt tax-reductions are feasible. It seems likely that the 2p tax increase will be stalled, which would amount to, pro rata, around £1 billion a year.
Even freezing this fuel duty will provide little balm for drivers, however, who are paying around 120p per litre of unleaded and 130p per litre of diesel, the latter being a tough outlay for haulage firms who use mainly diesel as a fuel. The price of oil has increased by a factor of ten over the last decade, has quadrupled since 2004 and doubled in the past year. There is now speculation that it will reach $250 next year, and that will increase fuel prices by around 60p a litre, irrespective of what the government does regarding taxation: the £2 litre is in sight, or $15 a gallon (U.S.).
We will face very difficult times, undoubtedly, and the only glimmer of hope is that new technologies will become "affordable". Put another way, the cost of oil will be so outlandish that other means to preserve as much transport as possible might appear less expensive: e.g. electric, second generation biofuels, hybrid (I am leaving-out hydrogen/Fuel Cells for the moment since this technology is years away and poses a chain of technological challenges to be surmounted before it can really get anywhere) and probably most viable, fuel-efficient engines.
Meanwhile, the airlines easyJet and BMI have told their pilots to fly slower since this uses less fuel. I believe there is a technique that can be used at altitude, which is to lower the wing-flaps so that more lift is obtained, and hence less fuel is required to keep the plane airborne at a reduced velocity. Simultaneously, train-drivers have been recommended to switch off their motors and coast downhill at suitable points, and bus-drivers to "travel smoothly" to reduce the amount of fuel required per journey. The price of a litre of diesel is forecast to reach £1.50 this summer.
Energy efficiency has to be the way forward, but wrapped neatly in a whole reformed manner of living which is simply less transport intensive overall.
Related Reading.
[1] "Fuel tax revolt." By Andrew Grice. The Independent, Tuesday 01, July 2008.
[2] "Airlines tell pilots to slow down as fuel prices hit record levels." By Sophie Borland.
http://www.dailymail.co.uk/news/article-1030102/Airlines-tell-pilots-slow-fuel-prices-hit-record-levels.html
[3] "14p a litre off petrol: it can be done." By Louise Barnett. Daily Express, Monday, June 30, 2008.
Yesterday saw a truckers' protest in London, but I doubt it will have any effect in reducing fuel prices. Into this tinderbox was threatened the spark of the government increasing fuel taxes by 2p a litre, amid urgent calls to reduce it. The Daily Express newspaper has been bearing a flag that fuel costs could be reduced by 14p a litre, but since this would involve depleting the chancellor's coffers at an especially demanding time - Mr Darling has already had to borrow over £50 billion this year - I doubt tax-reductions are feasible. It seems likely that the 2p tax increase will be stalled, which would amount to, pro rata, around £1 billion a year.
Even freezing this fuel duty will provide little balm for drivers, however, who are paying around 120p per litre of unleaded and 130p per litre of diesel, the latter being a tough outlay for haulage firms who use mainly diesel as a fuel. The price of oil has increased by a factor of ten over the last decade, has quadrupled since 2004 and doubled in the past year. There is now speculation that it will reach $250 next year, and that will increase fuel prices by around 60p a litre, irrespective of what the government does regarding taxation: the £2 litre is in sight, or $15 a gallon (U.S.).
We will face very difficult times, undoubtedly, and the only glimmer of hope is that new technologies will become "affordable". Put another way, the cost of oil will be so outlandish that other means to preserve as much transport as possible might appear less expensive: e.g. electric, second generation biofuels, hybrid (I am leaving-out hydrogen/Fuel Cells for the moment since this technology is years away and poses a chain of technological challenges to be surmounted before it can really get anywhere) and probably most viable, fuel-efficient engines.
Meanwhile, the airlines easyJet and BMI have told their pilots to fly slower since this uses less fuel. I believe there is a technique that can be used at altitude, which is to lower the wing-flaps so that more lift is obtained, and hence less fuel is required to keep the plane airborne at a reduced velocity. Simultaneously, train-drivers have been recommended to switch off their motors and coast downhill at suitable points, and bus-drivers to "travel smoothly" to reduce the amount of fuel required per journey. The price of a litre of diesel is forecast to reach £1.50 this summer.
Energy efficiency has to be the way forward, but wrapped neatly in a whole reformed manner of living which is simply less transport intensive overall.
Related Reading.
[1] "Fuel tax revolt." By Andrew Grice. The Independent, Tuesday 01, July 2008.
[2] "Airlines tell pilots to slow down as fuel prices hit record levels." By Sophie Borland.
http://www.dailymail.co.uk/news/article-1030102/Airlines-tell-pilots-slow-fuel-prices-hit-record-levels.html
[3] "14p a litre off petrol: it can be done." By Louise Barnett. Daily Express, Monday, June 30, 2008.
Tuesday, July 01, 2008
Gordon Brown and the Peak Oil Myth?
It is claimed in a recent article [1] that the British P.M., Gordon Brown has misunderstood the cause of the present oil crisis, but if so he is hardly alone in this. There is much confusion and obfuscation surrounding the massive oil-price hike which yesterday hit $144 a barrel. Mr Brown takes an economist's view that the problem rests in barriers to supply that are "technical, financial and political". There is no doubt these are factors in the game. There are many technical challenges attendant to producing oil, especially as it becomes necessary to extricate the material from more difficult locations and to squeeze more out of existing fields. The fall in the value of the U.S. dollar has also impinged on the high price of oil and most immediately, demand for oil is such that production is struggling hard to meet it. Mr Brown and his Chancellor, Mr Darling, can urge North Sea producers and coax them with tax-incentives to sweeten the taste, but there is only so much that can be drawn from fields that peaked in 1999 at a daily near 3 million barrels but whose output is now down by 60% to 1.2 million bpd.
There are basic geological problems associated with oil production which cannot be sensibly surmounted. The prime one is that oil is buried at depth and under pressure and so when a well is first struck, the pressure of gas in the reservoir forces the oil out, but as the oil is extracted, the gas expands into the remaining volume so reducing its pressure and the oil is expelled more slowly. To maintain a decent flow-rate, the well may be artificially pressurised, e.g. with CO2, or sea-water pumped into it to displace the oil. Ultimately, the well is no longer viable to extract oil from and the company moves-on to another one. In addition, when oil companies explore for oil, they usually hit the largest fields first and exploit them, and hence as a particular region ages, it becomes necessary to start squeezing increasingly smaller oil deposits. Thus, the combination of these two "geological" factors means that decline of a field is inevitable as happened in the North Sea, irrespective of economic or political features.
So it is with all oil-fields, and tax-incentives will barely influence North Sea output or indeed that of the rest of the world. In the wider context, Mr Brown called the fact the OPEC controls 40% of the world's oil as a "scandal", when in fact the location of the oil is a bestowal from geology, and we can hardly blame the Arabs, Venezuelans or Indonesians for the oil under their lands. It was not they who put it there but some higher power. OPEC produces about 36 million bpd and the non-OPEC countries the remaining 50 million bpd or so. Things can change however, and according to the pressure/production argument above, they must. Accordingly, many experts now predict that OPEC output will peak at around 2010, and in effect that of the world.
The OPEC cartel probably has precious means for raising capacity overall. It may be able to push a little more out of existing wells, but this has to be measured against the fact that output from others is falling. Probably there is practically no overall excess capacity and most of the oil that will be produced (noting that oil will be produced for decades yet) will tend toward being of the heavier, high-sulphur varieties, for which additional refining capacity must be installed. Refining high-sulphur oil is expensive and so the product will not be cheap. The economic factor comes in through the increasing costs of exploration and extractive technology, in addition to the simple fact that an inability to produce more oil against rising demand will tend to keep the price up anyway.
But why worry? Apparently there is plenty of "new" oil to be had [2] which should cheer any politician who would rather not confront the only real solution to the oil-crisis and that is to use less of it. This is attacking the demand-supply gap from the other side. If we can't sensibly produce much more oil, then using less would achieve the same healthy supply-surplus. Easier said than done, I concede, but what about all this extra new oil?
Well, in a nutshell [2], it is claimed there are vast reserves of oil, as yet untapped. There are apparently 33 billion barrels off Brazil, and another 15 billion barrels of oil and gas in the Gulf of Mexico. There are other deep-water deposits,off West Africa and near Sleipner in the North Sea. There are also vast resrerves in Iraq and Iran. Then there is oil shale under much of the mid-U.S. and the Alberta tar-sands and Venezuelan ultra-heavy oil. Bakken shake too deserves a mention, under North Dakota, from which 4 billion barrels is thought a potential yield, to be compared with a total of 10 billion barrels in the Arctic National Wildlife refuge.
We could go on, and if coal-liquefaction is included there are estimates that we have 3.7 trillion barrels worth of hydrocarbons left. But sorry to spoil the party - so what? The mere amount of these hydrocarbons tell us nothing about the rate at which they can be extracted, and how much really can, by when or if at all. To access the deep water oil will require technology that is still under development, and all of the other sources will not be cheap and will require a great deal of engineering to exploit. We are on the verge of a gap that conventional production of oil is unable to bridge, and this is now lapping on the shores of peak oil, beyond which production will actually fall - for specified geological reasons.
Demand rises mostly from developing economies, e.g. China and India, and is maintained in any case by others, e.g the West. The "new" reserves will take years to develop and their oil will not offset the inevitable and imminent fall in traditional production. Welcome to the age of very expensive and increasingly scarce oil. Now, how are we going to manage with less of it, but in a positive way?
References.
[1] "Gordon Brown doesn't get the oil crisis." By David Strahan. http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/29/do2902.xml
[2] "The 'Peak Oil' Myth: New Oil Is Plentiful." By Jason Schwarz. http://seekingalpha.com/article/82236-the-peak-oil-myth-new-oil-is-plentiful
There are basic geological problems associated with oil production which cannot be sensibly surmounted. The prime one is that oil is buried at depth and under pressure and so when a well is first struck, the pressure of gas in the reservoir forces the oil out, but as the oil is extracted, the gas expands into the remaining volume so reducing its pressure and the oil is expelled more slowly. To maintain a decent flow-rate, the well may be artificially pressurised, e.g. with CO2, or sea-water pumped into it to displace the oil. Ultimately, the well is no longer viable to extract oil from and the company moves-on to another one. In addition, when oil companies explore for oil, they usually hit the largest fields first and exploit them, and hence as a particular region ages, it becomes necessary to start squeezing increasingly smaller oil deposits. Thus, the combination of these two "geological" factors means that decline of a field is inevitable as happened in the North Sea, irrespective of economic or political features.
So it is with all oil-fields, and tax-incentives will barely influence North Sea output or indeed that of the rest of the world. In the wider context, Mr Brown called the fact the OPEC controls 40% of the world's oil as a "scandal", when in fact the location of the oil is a bestowal from geology, and we can hardly blame the Arabs, Venezuelans or Indonesians for the oil under their lands. It was not they who put it there but some higher power. OPEC produces about 36 million bpd and the non-OPEC countries the remaining 50 million bpd or so. Things can change however, and according to the pressure/production argument above, they must. Accordingly, many experts now predict that OPEC output will peak at around 2010, and in effect that of the world.
The OPEC cartel probably has precious means for raising capacity overall. It may be able to push a little more out of existing wells, but this has to be measured against the fact that output from others is falling. Probably there is practically no overall excess capacity and most of the oil that will be produced (noting that oil will be produced for decades yet) will tend toward being of the heavier, high-sulphur varieties, for which additional refining capacity must be installed. Refining high-sulphur oil is expensive and so the product will not be cheap. The economic factor comes in through the increasing costs of exploration and extractive technology, in addition to the simple fact that an inability to produce more oil against rising demand will tend to keep the price up anyway.
But why worry? Apparently there is plenty of "new" oil to be had [2] which should cheer any politician who would rather not confront the only real solution to the oil-crisis and that is to use less of it. This is attacking the demand-supply gap from the other side. If we can't sensibly produce much more oil, then using less would achieve the same healthy supply-surplus. Easier said than done, I concede, but what about all this extra new oil?
Well, in a nutshell [2], it is claimed there are vast reserves of oil, as yet untapped. There are apparently 33 billion barrels off Brazil, and another 15 billion barrels of oil and gas in the Gulf of Mexico. There are other deep-water deposits,off West Africa and near Sleipner in the North Sea. There are also vast resrerves in Iraq and Iran. Then there is oil shale under much of the mid-U.S. and the Alberta tar-sands and Venezuelan ultra-heavy oil. Bakken shake too deserves a mention, under North Dakota, from which 4 billion barrels is thought a potential yield, to be compared with a total of 10 billion barrels in the Arctic National Wildlife refuge.
We could go on, and if coal-liquefaction is included there are estimates that we have 3.7 trillion barrels worth of hydrocarbons left. But sorry to spoil the party - so what? The mere amount of these hydrocarbons tell us nothing about the rate at which they can be extracted, and how much really can, by when or if at all. To access the deep water oil will require technology that is still under development, and all of the other sources will not be cheap and will require a great deal of engineering to exploit. We are on the verge of a gap that conventional production of oil is unable to bridge, and this is now lapping on the shores of peak oil, beyond which production will actually fall - for specified geological reasons.
Demand rises mostly from developing economies, e.g. China and India, and is maintained in any case by others, e.g the West. The "new" reserves will take years to develop and their oil will not offset the inevitable and imminent fall in traditional production. Welcome to the age of very expensive and increasingly scarce oil. Now, how are we going to manage with less of it, but in a positive way?
References.
[1] "Gordon Brown doesn't get the oil crisis." By David Strahan. http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/29/do2902.xml
[2] "The 'Peak Oil' Myth: New Oil Is Plentiful." By Jason Schwarz. http://seekingalpha.com/article/82236-the-peak-oil-myth-new-oil-is-plentiful
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