Peak Oil News

Questa è la relazione che ho avuto l'onore di presentare ad ASPO Italia, il 3 maggio 2008, in occasione della conferenza annuale tenutasi a Torino. Sono 24 slides integrate dai commenti (i riquadri sottostanti) che ho potuto esporre a voce durante la presentazione. La versione inglese di questo post è disponibile qui . Un ringraziamento a Maurizio Moretto per la traduzione italiana. Un ringraziamento a Maurizio Moretto per la traduzione italiana. Ringraziamenti sono dovuti anche a Jean Laherrere di ASPO France per aver fornito il suo punto di vista sulle forniture di gas dalla Russia e dal Nordafrica. [break] Il gas naturale costituisce il 29% del consumo primario di energia fossile per l'Europa OECD (intesa come l'Europa a 15 più Rep. Ceca, Ungheria, Islanda, Norvegia, Polonia, Rep. Slovacca, Svizzera e Turchia). Esso viene utilizzato per: Riscaldamento domestico Calore ed energia per l'industria ed il commercio Produzione di energia elettrica Materia prima per la produzione di composti chimici e fertilizzanti Negli ultimi 25 anni il consumo complessivo di combustibili fossili in Europa è stato all'incirca costante. Mentre però l'utilizzo del carbone è diminuito, quello del gas naturale è aumentato. Negli ultimi 40 anni il consumo europeo di gas naturale è aumentato di 19 volte. Penso che questo sia davvero un grafico sorprendente: mostra come siano aumentati il nostro utilizzo di gas e la dipendenza che da esso abbiamo sviluppato. Come vedremo più avanti, ciò è ..

This is the talk I was honored to deliver to ASPO Italy on 3rd May 2008 at their annual conference in Turin. 24 slides below the fold plus narrative of what I said on the day. The narrative boxes are below the slides. An Italian translation of this post is available here . Thanks to Maurizio Moretto for the translation. Thanks are also due to Jean Laherrere of ASPO France for providing his interpretations of Russian and North African gas supplies. [break] Natural gas provides 29% of OECD Europe’s primary fossil fuel energy. It is used for: Home heating Heat and power for industry and commerce Electrical power generation Feedstock for chemicals and fertilizer For the last 25 years fossil fuel consumption has been more or less flat in Europe. But as the use of coal has declined, the use of natural gas has increased. In the last 40 years, Europe’s consumption of natural gas has increased 19 fold. I think this is really quite an astonishing chart showing how our use of and reliance upon natural gas for fuel has grown. As we shall see later, this was made possible by rapid growth of natural gas production in the North Sea. This bounty whilst not yet exhausted is getting tired and is about to go into decline causing major problems for European gas and energy security. Since we are in Italy, it is worth spending a moment looking at Italy’s reliance on natural gas. Italy does produce some gas - 11 bcm in 2006 and falling. This is compared with consumption of 77 bcm. So Italy l..

Infectious Greed: Great T. Boone Pickens Interview from Milken .

The ongoing oil price spike is attracting renewed attention to the government's policy of continuing to fill the Strategic Petroleum Reserve with extremely pricey oil, which I mentioned in Wednesday's posting . Members of Congress and various commentators are calling for a reassessment, as I've done since last October . We're also seeing suggestions such as the one in today's Wall Street Journal for ways to use the SPR not just as a hedge against catastrophic supply disruptions, but as a tool for managing oil prices. A new administration will take office in eight months, and energy is likely to be a key focus of its new policies. I can't imagine a better way to kick off a fresh look at the nation's energy problems than with a complete rethinking of the basis and design of our strategic oil inventories. The op-ed in today's Journal applies a combination of common sense and questionable judgment to the problem. The author, the chief economist at a firm that supports independent financial planners, is right to point out that $120 oil is too dear to squirrel away against the low likelihood of a massive disruption in oil supplies, the likes of which we haven't seen since the SPR was created in the 1970s. Unfortunately, the rest of his proposal for reducing the scale of the SPR and using it to set a price ceiling for oil relies too much on economic theory and too little on the geopolitical and logistical realities of the situation in which we find ourselves. More importantly, it do..

Washington Post By Jeffrey H. Birnbaum Faced with a national outcry over the high price of gasoline and soaring profits for energy companies, the oil and gas industry is waging an unusually pricey campaign to burnish its image. The American Petroleum Institute, the industry's main lobby, has embarked on a multiyear, multimedia, multimillion-dollar campaign, which includes advertising in the nation's largest newspapers, news conferences in many state capitals and trips for bloggers out to drilling platforms at sea. The intended audience is elected officials and the public, with an emphasis on the latter. The industry is trying to convince voters -- who, in turn, will make the case to their members of Congress -- that rising energy prices are not the producers' fault and that government efforts to punish the industry, especially with higher taxes, would only make pricing problems worse. "We decided that if we didn't do something to help people understand the basics of our industry, we'd be on the losing end as far as the eye could see," said Red Cavaney, the institute's president. Despite the efforts, Democratic congressional leaders this week again proposed an energy plan that would strip oil companies of billions of dollars of tax breaks and impose a tax on windfall profits. Also, the Democratic presidential candidates routinely pronounce "big oil" as if it were a one-word epithet, said former Oklahoma senator Don Nickles, an energy lobbyist. Still, the oil lobby thinks it h..

Amidst all of the noise, it's easy to forget that the US continues to be one of the world's largest exporters. The strong dollar policy is paying off, and this may be the reason we're not in a full blown recession. The Wall Street Journal: Container Shortage Frustrates U.S. Exporters . Quotes: Surging U.S. exports on a range of goods including corn, soybeans and frozen pork are hitting a bottleneck in the nation's overloaded ports, threatening to crimp profits for U.S. farmers and agricultural processors at a time when it is easier than ever for them to sell their goods abroad. The problem can be traced to a shortage of once-plentiful shipping containers and other transportation equipment, along with a lack of space on outgoing ships. The shortage is affecting other industries, including exporters of manufactured goods and sellers of scrap metal and paper.

Seeing CNBC with features on oil all throughout the day makes me nervous we may be at a short term top. But what's going on with oil? Everybody suddenly realized just how valuable it is. CNBC: What's Going on With Oil ?

Association for the Study of Peak Oil & Gas - USA By Dave Cohen 1st soldier: Who goes there? King Arthur: I am Arthur, son of Uther Pendragon, and this is my trusty servant Patsy. We have ridden the length and breadth of the land in search of knights who will join me in my court at Camelot. I must speak with your lord and master. 1st soldier: What? Ridden on a horse? King Arthur: Yes! 1st soldier: You're using coconuts! King Arthur: What? 1st soldier: You've got two empty halves of coconut and you're bangin' 'em together. — Monty Python and the Holy Grail The disconnect between peak oil concerns and the presidential race is almost total. As prices at the pump rise, each candidate is now talking about their so-called solutions to the problem. Despite clear new warning signs from Russia, Saudi Arabia, Mexico, and Nigeria that peak oil is nigh, the candidates remain unwaveringly oblivious to the true causes of rising fuel prices, preferring instead to dwell on irrelevant—actually, counterproductive—measures like suspending the federal gas tax during the summer months or taxing Big Oil. This is akin to putting a band-aid on a melanoma. Our nation's capital is a self-reinforcing bastion of ignorance about the longer term oil supply issues, Roscoe Bartlett (R, Md) and a few others excepted. The candidates and their energy advisers are full-fledged members of the "Washington Insiders" club, a group that only talks to each other and gets all of its information from..

Written originally for a woman of a diametrically opposed political view, I'd like to dedicate this song to Hillary Clinton. She may not be ready to give in, and her opponent Obama doesn't appear quite ready for prime time either, but Hillary is done, as I thought back in December she might be .

This story is part of my new Countdown to $200 oil series, which is the successor of my earlier, and now terminated by reality, Countdown to $100 Oil series. As in previous years, I got my ass whipped in my latest attempt to suggest on Daily Kos that gas taxes should be increased , despite the fact that the place is completly dominated by Obama fans and Obama's solid stance against the gas-tax holiday.. Some commenters kindly called me a "rich elitist f*ck from Europe" (guilty on all counts, of course) for wanting to bankrupt poor Americans who cannot do without gasoline, preferably cheap, and are already struggling mightily..... [break] And that was despite my acknowledging upfront that a gas tax increase is politically deadly, and highly regressive, and my corresponding suggestion to make it part of a plan to (i) directly support those hardest hit by revenue transfers and (ii) use the money raised to invest in alternatives (public transport, renewable energy) Of course, the fact that oil prices are reaching new highs almost every day these days might have given them pause for thought. As might this, which further underlines that this is not a short term phenomenon: Oil moves above $120 mark The entire WTI futures curve is trading well above the $100-a-barrel level with the longest dated contract for December 2016 up $1.57 to $110.55 a barrel on Monday, signalling the market’s consensus that $100 oil is here to stay . Oil prices are going in one direction only, and there'..

FrontPage Magazine By Vasko Kohlmayer A recent survey on the environment found that seventy percent of people worldwide think that the planet is running out oil. Only less than one quarter believe that there is enough of it to keep it as a primary source of energy. Petro pessimism runs especially high in the United States where a full two thirds think that the point of depletion is within sight. Here are some hard facts. According the Energy Information Administration as of January 2007 there was more than 1.3 trillion barrels of proved crude oil on earth. Even if this were all the oil on the planet there would be no immediate danger of shortages, because at the current rate of consumption – roughly 85 million barrels a day – this supply would last for more than 40 years. But the 1.3 trillion in these so-called proved reserves refers only to a tiny fraction of earth’s oil, designating only that portion which can be extracted under current ‘economic and operating conditions.’ As it happens, this figure grows with each decade and usually dramatically so. In 1882, for instance, there were 95 million barrels of proved petroleum reserves. This number jumped to 4.5 billion in 1926 and then to 10 billion in 1932. In 1944 the quantity stood at 20 billion. In 1950 it leaped to 100 billion and in 1980 it was 648 billion. In 1993 the world’s proved reserves grew to 999 billion, and today they stand at 1.3 trillion barrels. These figures show that our..

The pdf is a short report written by Robert F. Wescott and published in April 2006 by Securing America’s Future Energy . It was written when oil was ~$60 a barrel and addressed a scenario where the price of oil surged to $120 due to coordinated terrorist attacks on global oil transport infrastructure. Well, here we are, two years on at $120 oil (without the attacks) so it’s worth revisiting the analysis in light of the conclusion: The main conclusion of this note is that $120 oil would have profound negative effects on the world economy and global financial markets. ... Such oil prices would almost certainly precipitate a global recession. Click to download pdf [break] The scenario is not identical to the present situation, Wescott’s terrorism induced $120 involves a rapid spike upwards however the analysis is based on the $120 price being sustained for a year. This long term high price is similar to today’s situation. The most interesting chart from the report shows world oil expenditure as a percentage of world GDP: Wescott points out that historically this metric has been in the range of 1-3% and recessions have occurred when the expenditure exceeded 4%. $120 represents approximately 8% of world GDP, higher than at any time in modern history. Two studies are cited: The International Monetary Fund (IMF) suggesting a $5 increase cuts world GDP by 0.3% so it follows that the $60 to $120 doubling would reduce world GDP by 3.6% and the US Federal Reserve estimates that..

CNBC: Goldman: Natural Gas Crunch Possible This Winter . Goldman Sachs: $100 oil reality, part 2: Has the super-spike end game begun? [Otherwise known as the $150-200 Oil Report.]

The price of oil has set consecutive record highs this week, with no end in sight. This energy crisis that has crept up on us over the last four years, doubling the historical average price of oil , doubling it again, and in the widely-reported view of Goldman Sachs heading for a third doubling, is now provoking a sense of panic. You can see this in the flurry of proposals for providing short-term relief from retail gasoline prices that have increased by nearly 60% in the last 18 months. But while most of these ideas would likely be either ineffective or counter-productive, there are a few options that could make a difference this year, without having to wait for infrastructure to be built, fleets to turn over, or new production to come on line. In order to see what might work, we need to start with a clear understanding of what has driven prices well beyond most experts' expectations, including mine. Rising prices have failed to halt the steady growth of global demand, because many of the countries in which demand is increasing fastest insulate their consumers from the global energy market. Nor has $100+ oil stimulated a flood of new production, because too much of the world's resource base is locked up by nationalist or environmentally-inspired barriers. To make matters much worse, important suppliers such as Nigeria are under-producing due to unrest, while Mexico and Russia are allowing their output to slip because of domestic politics. Instead of giving in to our frustrat..

People's Weekly World By Mark Hertsgaard Never underestimate a politician's ability to pander. With gasoline prices nearing $4 a gallon and the summer driving season approaching, presidential candidates John McCain and Hillary Clinton have responded by calling for a consumer holiday from the federal gasoline tax. But both McCain and Clinton must know that blaming taxes for soaring gasoline prices is absurd. The tax hasn't changed. What has changed is the price of crude oil, which hit a record $119 a barrel in April. Get used to it. Contrary to McCain and Clinton's feel-good simplifications, there's no easy answer to this problem. Gasoline prices are rising-and will continue to rise-because global demand is outstripping supply. Combine America's gas-guzzling ways with millions of new middle class consumers in China and India, and global demand is bound to increase for years to come (absent a global economic depression). Meanwhile, global oil supplies are essentially flat. This mismatch pushes up prices. The real issue that McCain, Clinton and anyone truly serious about gas prices must confront is peak oil. Peak oil theorists do not suggest that the Earth will surrender its last drop of oil anytime soon. Rather, they contend that the world's oil supply has, or soon will, hit its upper limit, and then shrink. This, the end of abundant oil, spells the end of cheap oil. As limited supply confronts growing demand, the result will be volatile higher prices and shortages that c..

FuturePunditl By Randall Parker On a day when oil went over $120 per barrel you might wonder which direction production and prices are headed. Well, the richest man in the world (Warren Buffett or WB below) asked his long time business partner (Charlie Munger or CM below) where he sees oil production in 25 years. Charlie Munger sees oil production down in 25 years and Warren Buffett thinks a peak is possible in 5 to 10 years. WB: Oil won’t run out - it doesn’t work this way. At some point the daily productive capacity will level off and then start declining gradually. There is the depletion aspect and the decline curves. We are producing 86m barrels per day or so, more than ever produced. We are closer, by my calculations, to almost our productive capacity, than we have ever been. I think our surplus capacity is less, and quite a bit less, than in past. Whatever that peak is, whether 5 or 10 yrs, the world will adjust, and we will think about it. Adjustments will cause demand to taper off. I don’t know how much oil is there, but there are lots of barrels of oil in place. We never recover total potential. We may have better engineering recovery in future. It is nothing like an on and off switch. You may still have enormous political considerations to get access to avail oil since it so important. There is nothing you can do over short period of time to wean world off oil. CM: If we get another 200 yrs of growth dispersed over the world while population goes ..

The fate of the renewable electricity production tax credit (PTC), which provides incentives for power generated from wind, solar, and other alternative energy sources, is apparently still in doubt. Last month the US Senate approved a one-year extension of the credit as an amendment to a housing bill, but the House of Representatives is apparently balking at the provision's cost. Previous efforts to extend the credit and pay for it by revoking tax benefits for the oil industry failed . With oil companies earning record profits, the temptation to tax them to pay for alternative energy seems overwhelming , but it reflects a profound misunderstanding of the nature of our energy problems and the relative scale of the available solutions. We need more wind power and more oil, not one at the expense of the other. To understand why taxing the oil industry to subsidize wind and solar power won't advance US energy security--never mind energy independence --consider the contribution of additional wind power to the US energy balance. In 2007 the US wind industry had a banner year, adding 5,244 MW of new wind capacity, expanding the installed wind power base by 45%. This represents an important increment of renewable energy that will help reduce our future greenhouse gas emissions. At an average capacity factor of 30%, the new wind turbines added last year will generate approximately 14 billion kilowatt-hours each year they are in operation. That's a substantial amount of electricity, th..

Eric Bolling used to be on CNBC's Fast Money until FoxNews gave him an offer he apparently couldn't refuse. (A big loss for Fast Money and maybe for Bolling too as litigation kept him offscreen for a while.) He's appearing on Fox now, but since nobody much watches... Anyway, he's now also writing a column on stock picks for TheStreet.com, and because of his long background in energy trading, he is well worth paying attention to. In the below article, he suggests that oil may be about to back off a bit, giving refiners better margins and extra breathing room. On that basis, he recommends Tesoro and Chevron. TheStreet.com: Bolling: Chevron, Tesoro Ready to Roll .

The super spike is now moved from $105 to $200. Whoa boy. While U.S. demand is starting to actually fall , it's still rising in China and other places. Bloomberg: Goldman's Murti Says Oil `Likely' to Reach $150-$200 . Quotes: Crude oil may rise to between $150 and $200 a barrel within two years as growth in supply fails to keep pace with increased demand from developing nations, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report. New York-based Murti first wrote of a ``super spike'' in March 2005, when he said oil prices could range between $50 and $105 a barrel through 2009. The price of crude traded in New York averaged $56.71 in 2005, $66.23 in 2006 and $72.36 in 2007. Oil rose to an intraday record $120.93 today on speculation demand will rise during the peak U.S. summer driving season. ``The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,'' the Goldman analysts wrote in the report dated May 5 .... China, the world's fastest-growing major economy, has more than doubled oil use since New York crude oil dropped to this decade's low of $16.70 a barrel on Nov. 19, 2001. Record prices have failed to stem rising consumption in developing nations, with demand led by China, India and the Middle East. .... ``The core of our super-spike view has been that a lack of adequate supply growth coup..

The logo of the ASPOItaly-2 conference. It shows, superimposed to the classic ASPO peak, the mythical " post peak car ", the battery powered, retrofitted Fiat 500 [break] The second national conference of the Italian section of ASPO, ASPO-Italy, was held in Torino on May 3rd. Among the speakers, many were well known to readers of TOD. We had Euan Mearns as guest of honor, but also Ugo Bardi, Pietro Cambi, Marco Pagani and Eugenio Saraceno; all of them have signed posts on The Oil Drum. The conference's language was mainly Italian. It is a general problem: a lot of good work on depletion is being done in many non-English speaking countries. However, translations are expensive and time consuming; so the interaction with the rest of the world is limited. The best that I can do here is summarizing what was said so that you can have a feeling of what is being done in Italy and how the situation is here. First, something about ASPO-Italy. It is not so much geology-centered as ASPO international is. It is mostly a group of technology-minded people, several are specialists in renewable energy. They have quickly understood the question of the peak and they have derived from it a sensation of urgency that something is to be done, and fast. It was for this reason that we chose as logo of the conference not just the traditional ASPO peak, but also the "post peak car", the retrofitted, battery powered, Fiat 500 created by Pietro Cambi. This little car has become a sort of symbol of the e..

The quest for US energy independence might just be the biggest and most persistent bad idea in the last several decades of energy policy. I've been railing about this subject since I started this blog more than four years ago, and I have acquired a deep understanding of what it means to swim against a strong tide. A few years ago, pointing out the impracticality of energy independence was treated as a mild eccentricity; since then it has become a form of political incorrectness verging on heresy. I'm glad to have some company in this effort, from the author of a comprehensive examination of the subject, " Gusher of Lies ," by Robert Bryce. It provides a useful counterpoint to a seemingly endless stream of books and articles extolling the virtues and relative ease of shaking off our oil habit and thumbing our noses at the global energy market. But while I agree wholeheartedly with the main thrust of Mr. Bryce's book, I feel obliged to mention a few quibbles. The subtitle of "Gusher of Lies" provides a good sense of the author's perspective on America's energy problems. "The Dangerous Delusions of 'Energy Independence'" sets it at odds with many of the statements about energy that we've heard from candidates in the current election cycle. Among the strongest chapters in the book are those placing our desire for energy independence in the context of the long energy history of this country, and explaining why many common assumptions about the mechanisms for attaining independence..

Clusterf**k Nation By Jim Kunstler A friend asked me how come the public apparently grasps the reality of climate change but can’t seem to wrap its collective brain around the unfolding oil crisis. I'm not convinced that the public does grasp climate change. It's perceived, perhaps, as a background story to daily life, which goes on regardless. Are you even sure Hollywood didn't invent it -- and maybe some boob at Time Magazine is selling it as though it were really happening? Few have anything to gain by espousing denial of climate change. It's hard for most people to tell if they have been affected by it. It doesn't quite seem real. Those who actually make gestures in the face of it –- screwing in compact fluorescent lightbulbs, buying Prius cars -- end up appearing ridiculous, like an old granny telling you to fetch your raincoat and rubbers because a force five hurricane is organizing iself offshore, beyond the horizon. The public appears aggressively clueless about the peak oil story. They do not accept any threats to the motoring regime. The news media is surely not helping sort things out. I saw a remarkable display of ignorance on CNN last week when the new resident idiot-maniac Glenn Beck hosted Teamster Union boss James Hoffa and they agreed that the oil companies were to blame for high fuel prices. To put it as plainly as possible, Beck doesn't know what the fuck he's talking about, and it's disgraceful that CNN gives free reign to this moron to misinf..

The Independent By Leonard Doyle America's love affair with sports utility vehicles (SUVs) and pick-up trucks is finally over. The gas-guzzlers that ply the country's freeways and clog its city streets and parking lots are falling victim to ever-rising petrol prices, rather than concern about the country's oversized carbon footprint. The fall-off in sales is dramatic however. Even offers like that from a Denver showroom of a year's free petrol with each new SUV isn't shifting the pick-ups and 4x4s quickly enough to stave off financial ruin for the country's car manufacturers. With petrol now selling for almost $4 (£2) a gallon, consumers are trading in their Humvees and Ford Explorers so fast that for the first time, one in five cars sold in the US is now a compact or subcompact. In another first, sales of six-cylinder vehicles were bypassed by smaller four-cylinder, mostly Japanese, cars in April. In some cities sales of hybrid cars outnumber the lumbering vehicles that are still pouring off the assembly lines at Ford and General Motors in Detroit. The occasional Smart car can even be seen nipping through the traffic. "The era of the truck-based large SUVs is over," said Michael Jackson, boss of the country's largest car retailer Autonation. Another car executive called it the most dramatic shift in the market in 30 years. There has been a gradual shift by car-buyers to smaller, European-style vehicles over the past few years, but high petrol prices have turned what w..

BBC NEWS By Brendan O'Neill In the 1950s and 1960s, bunkers were a feature of many American suburban homes, populated by families fearful of the prospect of nuclear war. That threat has subsided, but now many reasonable people are stocking up on essential supplies in preparation for a new cataclysm. When you hear the word "survivalist", what image comes to mind? Perhaps you think of a gun-toting loner in Mid-West America, who lives in a shack surrounded by tinned food and emergency water supplies. Or maybe you think of end-of-the-world religionists retreating to a fortified camp with enough food and drink to last them until Judgement Day. But today there is a new breed of survivalist – and they're well-heeled, well-educated and more likely to wear an immaculately pressed suit than a camouflage flak jacket. Civilisation breakdown Barton M Biggs is about as far as you can get from the old John Rambo-style survivalist. Forget long, unkempt hair and a sweat-stained vest. Mr Biggs is a former chief global strategist for Morgan Stanley, who now runs the hedge fund Traxis Partners in New York. Yet in his latest book, Wealth, War and Wisdom , he suggests that all right-minded people should "assume the possibility of a breakdown of the civilised infrastructure". "The four horsemen of the apocalypse ride out every two generations, and they come in different disguises," he says. "We are due to see the horsemen again some time in the next 10 to 20 years – and the prudent per..

Falls Church News-Press By Tom Whipple In recent weeks, airlines around the world have been reporting substantial losses, declaring bankruptcy or completely shutting down. So far the losses have been mostly of small airlines, but many of the large ones have started to thrash around for merger partners. At $3.71 a gallon, jet fuel is now the single largest expense an airline faces. In 2000, the airlines fuel bill was $14 billion. It is now pushing $60 billion and climbing. Southwest, the most profitable carrier, recently announced that this year’s fuel bill will be $500 million more than last year and equal to 2007 profits. During the first quarter of 2008 American airlines lost $328 million; Delta lost $274 million; United lost $537 million; Continental $80 million; Northwest $191 million; and US Airways $236 million. Only Southwest Airlines, which did a better job of hedging its fuel than the others, made a profit. It is clear we are going to see major changes in air travel shortly. For some time now, airlines have been eliminating frills, raising prices, filling the planes and effecting whatever other economies come to mind. After the summer flying season ends next September, many airlines are planning to retire 5-10 percent of their least efficient aircraft, thereby reducing their flight schedules by a similar amount. Knowledgeable observers are expressing doubts these moves will be enough. People are starting to talk about $200 oil which implies that airline fuel c..

With American consumers reeling from gas prices that have gone up by fifty cents per gallon since the beginning of the year, it occurred to me to wonder what Europeans are now paying. Although the decline of the dollar has amplified the impact of recent increases in oil prices, Europe hasn't been immune, either. Crude oil expressed in Euros or Sterling is roughly 75% and 110% higher, respectively, than it was in January 2007 , and this has boosted the price of fuels that were already much more expensive than those sold here. While searching for European fuel price data, I was surprised to discover proposals for gas tax cuts similar to those being debated here . Consumer displeasure with petroleum product prices is increasing the pressure on governments on both sides of the Atlantic to respond. Having lived in both Germany and the UK, I chose them as my basis of comparison--one inside the Euro zone, the other outside. As of today, Normalbenzin (regular gasoline) averages €1.457/liter , or €5.51/US gallon. So whether you assess the dollar/euro exchange at its market rate of $1.55 to the Euro --which gets you to $8.55/gal.--or adjust it based on purchasing-power parity , or even the Economist's Big Mac Index , which was close to 1:1 last summer, gasoline in Germany is a darned sight more expensive than it is here, thanks to Europe's stout taxation of motor fuels. And while diesel is taxed at a lower rate, to promote the use of diesel automobiles as a means of reducing oil co..

The New York Times: As Gas Costs Soar, Buyers Flock to Small Cars . Quotes: Soaring gas prices have turned the steady migration by Americans to smaller cars into a stampede. In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car. The switch to smaller, more fuel-efficient vehicles has been building in recent years, but has accelerated recently with the advent of $3.50-a-gallon gas. At the same time, sales of pickup trucks and large sport utility vehicles have dropped sharply. In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April. “It’s easily the most dramatic segment shift I have witnessed in the market in my 31 years here,” said George Pipas, chief sales analyst for the Ford Motor Company. .... Previous spikes in sales of smaller cars were often a result of consumers trading down during tough economic conditions or gas-price increases. When the economy improved or fuel prices dropped again — as they did after the oil-price shocks in the 1970s eased — buyers invariably went back to bigger vehicles. But with oil prices expected to remain high for years, auto industry executives are seeing a turning point. “The era of the truck-based large S.U...

Les Dossiers du Net By Dale Allen Pfeiffer Current civilization is founded upon an abundance of cheap energy derived from hydrocarbons. Hydrocarbons not only run our transportation; they provide the power for all of our technology. Take a moment to think about your immediate home environment. Not only do hydrocarbons take you to work and to the grocery store; they are used for virtually everything around you. Your home and your furniture were built using the energy of hydrocarbons. If your chair has a metal frame, that metal was forged with hydrocarbons. Your carpet and your polyester clothing are products of hydrocarbons. All of the plastics around you are derived from hydrocarbons. Even this journal was printed and delivered using hydrocarbons. The very value of the money in your wallet is pegged to oil. Go to the refrigerator (powered and produced via hydrocarbons) and take out any food item. Every single calorie of food requires ten calories of hydrocarbons. This is the blessing of modern hydrocarbon based agriculture with its natural gas based fertilizers and oil based pesticides. The human population on this planet currently exceeds 6 billion. Without hydrocarbon based agriculture, it is estimated that this planet could only sustain 2.5 billion people. Previous to the industrial revolution, all civilizations were built on the energy of slave labor. Even the United States required the sweat of slaves during its early years. The industrial revolution rendered slavery, an..

As if the politics of addressing global climate change weren't already daunting enough, a new paper published in Nature this week suggests that the Northern Hemisphere, where most of humanity lives, could be due for a cooling trend, thanks to shifting ocean currents. Coming at a time when the idea of global cooling has been making the rounds on the internet, the prospect of a break in the observable warming trend greatly complicates the task of policy makers who are answerable to their electorates. It would be much harder to contemplate jarring changes to the economy to reduce greenhouse gas emissions, if the polar ice were to stop retreating and glaciers stabilized, or even began to grow again. The new prediction is based on modeling work described in today's New York Times. It also prompts comparisons to predictions that global warming might trigger even more dramatic cooling, by altering the strength and path of the Atlantic thermohaline current, or " salt conveyor ". Once again, we are reminded that global warming has always been a highly imprecise term for the complex processes now at work. That's why I prefer "climate change"--not as a euphemism, but as a more accurate description of the outcomes we face. Some even prefer " global weirding ." But while environmentalists may embrace this new scientific view of climate change as more volatile than the steady warming many have expected, climate skeptics will see it as a glaring inconsistency, particularly if the global ris..

In recent days a series of media articles surfaced pointing to a concerning situation in China. The New Scientist reported: At the end of a cold and stormy winter, the country has just 12 days of coal reserves at most power stations. Some provinces, including Hebei, bordering Beijing, have less than a week's coal left. This is a record low, the state electricity regulatory commission revealed on Tuesday. [break] It continues: China relies on burning coal for 70% of its electricity. Even though Chinese coal production in the first quarter of this year was up almost 15% on the same period last year, it has apparently not been enough to meet rapidly growing demand. [...] The coal mining industry, and the rail network needed to bring the coal to the power plants, are both struggling to keep up with the drive to build ever more generating capacity. The strains raise questions about how much longer China's breakneck industrialisation can continue. China Stakes presents even grimmer details: The Vice-President of the State Electric Power Supervisory Commission, Wang Yeping, said that in Hebei, Anhui, and Chongqing, the stockpile of coal for power generation was not even enough to last 7 days. This situation is quite similar to the one that existed in January 2008. Theoretically, a stockpile that is smaller than 7 days supply has reached an “urgent level”. This scenario is even more concerning coming during the Spring when electricity demand is at the lowest. Air conditioning is..

CNBC: Picken's Next Prediction . Quotes: "The biggest move will come in natural gas, not oil." I'm with ya there , Boone.

American consumers have just dodged a bullet at the gas pump, and they don't even know it. This news would surely perplex anyone who has filled up in the last few days, as the national average retail gasoline price has zoomed to another new record of $3.60/gallon . Yet it is no less true, involving an event that has received scant media attention here. For two days, a major pipeline delivering North Sea crude oil to Scotland was shut down by what the British refer to as an " industrial action " that idled the 200,000 barrel per day Grangemouth Refinery near Edinburgh. Had the strike continued, we might have seen US refining margins break out of the unusual doldrums they are experiencing. As it is, we may yet see some ripples from this event on our side of the "pond", as the global fuel market adjusts to the lost refinery output. It is a reflection of the degree to which US fuel supplies are integrated into the global market--and of how stretched those supplies have become as a result of sustained high global demand growth--that a problem at a medium-sized refinery in Europe might affect what US consumers pay for gasoline and diesel fuel. Because our refinery capacity has not kept pace with demand growth, the US imports an average of over a million barrels per day (bpd) of gasoline and gasoline blending components , and another 300,000 bpd of diesel and heating oil. That means our prices must be high enough to compete for those supplies against other fuel importers. When a ref..

Submitted by my friend Richard, and via fivecentnickel.com : c|net Green Tech Blog: Can renewable energy make a dent in fossil fuels ? Quotes: 4.2 billion. That's how many rooftops you'd have to cover with solar panels to displace a cubic mile of oil (CMO), a measure of energy consumption, according to Ripudaman Malhotra, who oversees research on fossil fuels at SRI International. The electricity captured in those hypothetical solar panels in a year (2.1 kilowatts each) would roughly equal the energy in a CMO. The world consumes a little over 1 CMO of oil a year right now and about 3 CMOs of energy from all sources. Put another way, we'd need to equip 250,000 roofs a day with solar panels for the next 50 years to have enough photovoltaic infrastructure to provide the world with a CMO's worth of solar-generated electricity for a year. We're nowhere close to that pace. But don't blame the solar industry. You'd also have to erect a 900-megawatt nuclear power plant every week for 50 years to get enough plants (2,500) to produce the same energy in a year to equal a CMO. Wind power? You need 3 million for a CMO, or 1,200 a week planted in the ground over the next 50 years. Demand for power also continues to escalate with economic development in the emerging world. "In 30 years we will need six CMOs, so where are we going to get that?" Malhotra said. "I'm trying to communicate the scale of the problem." The CMO is a figure you might begin to hear more as utilities and governments ma..

The New York Sun Big New Shock at the Pump Forecast by Two Analysts By Dan Dorfman Get ready for another economic shock of major proportions — a virtual doubling of prices at the gas pump to as much as $10 a gallon. That's the message from a couple of analytical energy industry trackers, both of whom, based on the surging oil prices, see considerably more pain at the pump than most drivers realize. Gasoline nationally is in an accelerated upswing, having jumped to $3.58 a gallon from $3.50 in just the past week. In some parts of the country, including New York City and the West Coast, gas is already sporting a price tag above $4 a gallon. There was a pray-in at a Chevron station in San Francisco on Friday led by a minister asking God for cheaper gas, and an Arco gas station in San Mateo, Calif., has already raised its price to a sky-high $4.62. In Manhattan, at a Mobil gas station at York Avenue and East 61st Street, premium gas is now $4.03 a gallon. Two days ago, it was $3.96. Why such a high price? "Blame the people at STOPEC (he meant OPEC) and the oil companies," an attendant there told me. These increases are taking place before the all-important summer driving season, signaling even higher prices ahead. That's also the outlook of the Automobile Association of America. "As long as the price of crude oil stays above $100 a barrel, drivers will be forced to pay more and more at the gas pump," a AAA spokesman, Troy Green, said. Oil recently hit an all-time high of n..

It's tremendously encouraging to witness the explosion of energy innovations being unleashed by sustained high oil prices and environmental concerns. Our supply of ingenuity seems more inexhaustible than the supply of fossil fuels. However, that does not mean that every new energy idea will be a good one. Some, in fact, may turn out to be distinctly bad, and yesterday's New York Times provides us with a prime example. At a time when the unintended consequences of our strategy of turning food into fuel have become alarmingly evident on a global scale, it's hard to imagine a worse notion--or worse timing--than a new device for producing automotive ethanol in your back yard. I don't question that the MicroFueler designed by the founders of E-Fuel Corporation is a very clever machine. For ten grand, you will be able to purchase an appliance that turns sugar and water into 200-proof ethanol, at a cost somewhere between $1.00 and $7.00 per gallon, depending on how cheaply you can source the sugar. That doesn't include the cost of converting your automobile to run on pure ethanol, if it's not already a Flexible Fuel Vehicle (FFV). Now, who could fail to see the appeal of this: saving money, gaining freedom from oil and its emissions, becoming self-sufficient, and reducing one's impact on the planet? Unfortunately, on further inspection most of these attributes turn out to be illusory, or at least severely compromised. Start with the implied energy independence angle, which has been ..

The sequence of events that led to the Forties Pipeline closure on 27 April 2008 began in 2005 when BP, currently the UK's largest company, sold Innovene, their Grangemouth refinery subsidiary to Ineos. Ineos is privately owned petrochemicals company that has grown from nothing since its formation in 1998, fueled by debt reported to be €9 billion . BP, once 50% owned by the UK government, used to own and operate the Forties Field, the Forties Pipeline system and the Grangemouth oil refinery. This is a tightly coupled complex system where oil from the North Sea flows by pipeline to Kinneil terminal where it is either diverted to Grangemouth to be refined and then combusted by energy hungry consumers or it is diverted to Hound Point for export by tanker (see map below the fold). The failure of any vital part of this complex system may close the whole system down. This system is now fragmented and its failure has just happened. Failure by BP to recognise the dependency of the Forties Pipeline upon vital services provided by Grangemouth, and to provide contingency back up for their loss, is the principal cause for over 40% of UK North Sea oil and gas production now being shutdown. Incident prone BP are of course not the only stake holder to shoulder responsibility and below the fold I explore the responsibilities of the Grangemouth Workers, Ineos, The Banks, Government and The Media in contributing to this debacle. [break] Grangemouth oil refinery lies close to the Kinneil ter..

Extended from the European Tribune version , which was itself inspired by earlier coverage here on TOD . More relevant background can be found in these two articles from a few months ago: UK Energy security and The European Gas Market , both by Euan Mearns. Now that the news that the Forties pipeline has to close down is known, the blame game has started: UK resists fuel curbs despite strike The UK is “nowhere near” having to impose emergency powers to restrict fuel supplies to essential users, the government insisted on Sunday, despite a strike forcing the closure of a pipeline that carries nearly half of Britain’s North Sea oil. (...) But the Conservatives sought to make political capital from the unrest. On Sunday, they argued that the strike was a byproduct of his weakness. “Whether it is teachers or whether it is oil workers or whoever else, they’re actually saying we can push this guy around,” David Cameron told the BBC. The Tory leader argued that Mr Brown was indirectly to blame for the dispute because of his changes as chancellor to employer pension schemes. “Who is the man who wrecked the British pension system? He is the prime minister,” Mr Cameron said. The Grangemouth workers are protesting over the company’s intention to close their final-salary pension scheme to new employees from August 1. Ineos has offered to suspend plans to make existing employees start making contributions, pending further talks. I'd like to flag just a few points that s..

sfgate.com By David R. Baker, Chronicle Staff Writer Rocky Twyman has a radical solution for surging gasoline prices: prayer. Twyman - a community organizer, church choir director and public relations consultant from the Washington, D.C., suburbs - staged a pray-in at a San Francisco Chevron station on Friday, asking God for cheaper gas. He did the same thing in the nation's Capitol on Wednesday, with volunteers from a soup kitchen joining in. Today he will lead members of an Oakland church in prayer. Yes, it's come to that. "God is the only one we can turn to at this point," said Twyman, 59. "Our leaders don't seem to be able to do anything about it. The prices keep soaring and soaring." Gas prices have been driven relentlessly higher this year by the bull market for crude oil, gasoline's main ingredient. A gallon of regular now costs $3.89, on average, in California, while the national average has hit $3.58. To solve the problem, Twyman isn't begging the Lord for any specific act of intervention. He is not asking God to make OPEC pump more oil. Nor is he praying for all the speculative investors to be purged from the New York Mercantile Exchange, where crude oil is traded. Instead, he says anyone who wants to follow his example should keep it simple. "God, deliver us from these high gas prices," Twyman said. "That's all they have to say." Consumer advocates who have been howling about gasoline prices for months say they understand his frustration, even if they haven't trie..

Vertical integration is a time-honored strategy in the oil and gas industry, though for the last couple of decades it has operated in more of a virtual, rather than physical mode. Oil producers sell mainly into the open market, and the refineries of integrated companies buy as much or more from third-party suppliers as from their own affiliates, and then ship their products in fungible pipelines, with brand identity deriving from the additives with which the fuel is dosed at the distribution terminal, rather than any notion of continuous custody of molecules from well to pump. Various factors have prevented alternative fuels such as ethanol from attaining this highly-evolved state, and that makes the acquisition of Exxon Mobil's Esso marketing network in Brazil by Cosan Ltd ., a large Brazilian ethanol producer, all the more interesting. Call it convergence or an example of parallel evolution; this is a notable signpost of the growth of biofuels and the diversification of the global liquid fuel system. There are many reasons why a producer might want to integrate into the distribution and marketing of its products, and they vary with the conditions of the market in which it operates. The relatively recent integration of the leading US refiner Valero into branded marketing probably had more to do with gaining access to a less cyclical and non-correlated source of profit margins than with any concern that it would be unable to sell its output into the market. From the account o..

Investor's Business Daily: See Gore, See Spot . Quotes: A former NASA astronaut says the same solar phenomenon that doomed Napoleon's army may soon stop Al Gore's march to glory cold. Prepare for the big chill. Napoleon's retreat from Moscow is a legendary military disaster. While historians and military buffs note the toll the Russian winter took on La Grande Armee, few if any appreciate the role solar activity, or the lack of it, played in one of the great military reversals in history. Geophysicist Phil Chapman, the first Australian to become a NASA astronaut, and who served as mission specialist on the Apollo 14 lunar mission, writes in the Down Under newspaper the Australian that "the rout of Napoleon's Grand Army from Moscow was at least partly due to the lack of sunspots." This is more than a historical footnote. The same pattern of solar activity that doomed Napoleon is occurring as we speak. The sun goes through a series of 11-year cycles in which sunspots fluctuate in both number and intensity, greatly influencing Earth's climate and weather. The end of each cycle is called a solar minimum, where sunspot activity is at a low point. Activity usually picks up after that as each new cycle begins. As Chapman notes, the most recent minimum occurred in March 2007. Sunspot activity should have increased shortly after that but sunspot activity has remained at a virtual standstill. If you log on to www.spaceweather.com , you will see a current picture of the sun from the U.S..