Peak Oil (2)

(Part1)

[He] shall ravin as a wolf: in the morning he shall devour the prey, and at night he shall divide the spoil...[Genesis 49:27]

I would be remiss if I did not draw the gentle reader's attention to this morning's article at Eurasianet:

Intense competition for unimpeded access to the world’s natural resources is continuing and is likely to increase, according to the April 21 edition of "Jane’s Foreign Report." The current unprecedented surge in fuel prices illustrates the growing need for a greater supply and consequently demonstrates the volatile nature of the energy market. The Caspian Sea could meet some of that demand, because it has sizeable... oil and gas reserves. The littoral states of the Caspian Sea — Russia, Kazakhstan, Turkmenistan, Iran, and Azerbaijan — collectively have an estimated 10 billion-32 billion barrels of proven and another 233 billion barrels of possible oil reserves. In comparison, Saudi Arabia has 261 billion barrels of oil, while the United States, China, and India’s proven oil reserves are respectively 22.677 billion, 18.25 billion, and 5.371 billion barrels.

[links added; several erroneous "trillions" in original corrected—JRM]

The article summarizes the conflicts over pipeline routes as well, but failed to mention a few key issues.

The first of these is that the oil reserves cited by Houchang Hassan-Yarivary dramatically; observe the extreme gap between "proven" and "probable" reserves. For over a decade the region has been alleged to have been virtually another Persian Gulf, home to hundreds of billions of untapped oil reserves. But the '90's were also tough times for oil exploration, as oil prices languished below $20/barrel.

US Dep't of Energy: Growing oil production since independence (an increase of roughly 70% since 1992) has come primarily from the north Caspian states of Kazakhstan and Azerbaijan. Development of the region's oil resources has been led by two major projects: Kazakhstan's Tengiz, and Azerbaijan's Azeri, Chirag, and deepwater Gunashli (ACG) (see Table 1.) Combined, these two projects produced about 410,000 barrels per day in 2002, one-fourth of the regional total, and are expected by the operating companies to produce 1.7 million barrels per day for world oil markets by 2010. Development of these vanguard projects, which are each roughly ten years old, has given rise to the influx of new investment and infrastructure development that constitutes the "second Caspian oil rush," the first having occured in the late 1800s.

Of course, China's daily consumption is 5.5 million barrels a day right now, a doubling since '93; as the nation's fleet of autos explodes in number, it seems reasonable to expect this growth rate to accelerate.

It's long been established that taxes on a good can, in special cases, actually reduce its equilibrium price (Edgeworth, Hotelling). In the case of petroleum, gasoline taxes or BTU taxes can reduce rates of consumption, leading to the development of more efficient devices or, as was the case in countries such as Japan and South Korea, the development of industry and consumption along far less energy-intnesive paths.

ALSO FROM EURASIANET: This review of two "recent" books on the Aral Sea caught my eye. The Aral Sea is fed by two rivers, the Amu Darya (Oxus)and the Syr Darya (Jaxartes); during Soviet times these rivers were diverted to grow cotton in Turkmenistan and Uzbekistan. The Aral Sea lost over 80% of its volume, leaving ships stranded in the desert (Aral Sea Homepage). Sadly enough, this is another case of ecological redemption gone badly wrong, but I need to post about that another time.

(Cross-posted at Hobson's Choice)

Peak Oil (1)

Peak oil theory (sometimes called Hubbert Peak Oil, after Dr. M. King Hubbert) is the proposition that there is an de facto limit at any time to the rate at which oil can be pumped from available fields; and this limit tends to follow a normal curve over time. An addition point of the proposition is that we are very close in time to this peak, after which the rate will fall off regardless of increased demand. Oil industry executives insist that there have been new reserves of oil being identified over the years, and provable reserves are greater now than they were [thought to have been] at the time of the 1973 Arab oil embargo. Peak oil theory holds that we are fast approaching the point where further increases in the volume of oil will be economically unsustainable.

For decades we've been warned of the end of cheap oil. Oil is exceptionally difficult to replace—most of the proposed substitutes are not substitutes at all. Advocates of a hydrogen-based economy, for example, tend to ignore the fact that hydrogen must be separated from other chemicals to create a gas, and that separation process requires more energy. Likewise, photovoltaic cells require large amounts of electric power to produce—they're essentially semiconductors. Biodiesel has attracted some attention in recent years, but of course biodiesel works for a small cohort of people who can gather used cooking oil and using it in their vehicles. It's an incidental use of a material which itself requires a lot of energy inputs. Ethanol is a more direct route—it's an alternative fuel made from organic products like grain or corn, but cultivation of ethanol consumes more energy than it generates. It is, however, heavily subsidized.

Electric-powered vehicles require generation of electricity to recharge batteries; much of electricity in the USA is generated by the burning of oil and natural gas (half is from coal, which contributes heavily to global warming). And atomic fission has its proponents, but created a huge environmental burden in the future as nuclear wastes pile up. As it happens, the US atomic power industry was a dismal managerial failure, and the regulatory environment is dreadful; it's just as well, because atomic fission is a faustian bargain; European nations are addicted to it, albeit less destructively than the USA is addicted to fossil fuels and coal.

Atomic fusion has enjoyed massive subsidies in multiple countries; in 1996, the US withdrew from the International Thermonuclear Experimental Reactor (ITER; BBC) project, but rejoined in Feb 2003. In addition, there is a ten-year project ($1 billion) to build a coal-powered generating plant which captures [90% of] its own emissions. This, like the freedom car and the aforementioned ITER re-entry, strike this writer as a fig leaf for otherwise blatantly shortsighted disregard for the approaching energy crisis. If ITER is to solve the world energy crisis depicted in peak oil theory, then the commitment required would be on the order of tens of billions per year; the development of an entire fusion-based economy would be required, such as power-storage and transmission, or longer-range technologies such as small fusion facilities. Needless to say, no such project was announced.

So I think it is worthwhile to return to the concepts of peak oil theory. First, I want to introduce some vocabulary (courtesy of Van Nostrand's Scientific Encyclopedia, Fifth Ed., 1976):

produced: misnomer for recovery of crude oil/natural gas; "recovery" suited to getting oil out of the ground, while "production" applicable to end-user products like aviation fuel, gasoline, kerosene, fuel oil, and diesel. provable reserves of crude oil: estimated quantities of all liquids statistically defined as crude oil, which geological and engineering data demonstrate to be recoverable from known reservoirs under existing economic and operating conditions. A major improvement in recovery technology, or favorable changes in the price structure for petroleum products, can increase proved reserves. Proved resources are calculated using conservative benchmarks; if there is no fluid contact (for example, no wellheads in a margin of the reservoir), then the lowest figure for oil content is given, based on geological structures.

The term "proved" used to apply to the above category of oil reserves. However, marginal sections of a reservoir with no fluid contact are now excluded from the definition of "proved." Readers with direct knowledge of the oil industry are requested to advise if my scientific encyclopedia is actually mistaken or merely out of date. The distinction is quite important. ExxonMobil, the biggest US oil firm, has 22bn barrels of proved reserves, but another 50bn barrels of "provable" (BBC).

probable reserves: same as above, except that mean probable estimate (rather than structural minimum) of recoverable reserves are used. By definition, a reservoir's "probable reserves" will be greater than its "provable reserves," and both will be greater than "proved" reserves.
oil in place: includes all oil estimated to exist in a reservoir, regardless of technological constraints.

crude oil: a mixture of carbon-based molecules, mostly of comparatively high molecular weight. Organic compounds like methane (CH4), ethane (C2H6),..., propane (C5H16) are gases at ordinary temperatures and pressures, and are a separate product; natural gas is about 95% methane, 1% ethane, and 4% nitrogen. In contrast to NG, crude is extremely complex chemically, and its place of origin can be determined based on its chemical composition. Crude oil, when recovered, can be dark, clear, golden, or greenish.

gravity, degrees API: API stands for "American Petroleum Institute"; the designation works backwards. "Specific gravity" is a general term representing the unit density of a substance, so water at ordinary heat and temperature has a specific gravity of about one gram per cubic centimeter. For high quality grades of crude, this is typically about 0.7 g/cm3. API assigns 10.0 to water, and moves upward as the fluid gets lighter. Since the most commercially desired products, like aviation fuel and gasoline, are very light (60% as heavy as water), the highest grades of crude are 35-40° API. The poorest grades are found in Wyoming and California, and reaches as low as 13° API. Typically, higher degree crudes are recovered first; the API rating declines as a field is drained.

Another attribute of oil is the sulfur content. Sulfur must be refined out of oil; if there is very little, as in West Texas or Iran, then it is called "sweet"; high levels of sulfur and other undesirable chemicals are "sour."

oil reservoir: more precisely, a proven oil reservoir includes area delineated by drilling, plus neighboring areas deduced from geological analysis, from which oil can be recovered economically.

refining crude: the main part of this procedure is boiling the crude at different levels. East Texas light crude, for example, boils at 125° F (51° C), an unusually low temperature; 5% boils off before 191° (88.3°) is reached. By volume, 29% of this grade is gasoline; 10% is kerosene; 18% is diesel. What is left behind boils at temperatures of almost 800° (426°), and forms asphalt. In addition, there are trace compounds of salt and sulfur, nickle and vanadium. This process is called "distilling." The middle distillates (gasoline, diesel) are then subjected to cracking (which breaks large hydrocarbon molecules into smaller ones), alkylation, catalytic reforming, polymerization, isomerization, and other processes. Then they are blended. About now, the oil companies are required to add ethanol as an oxidizer; because ethanol blended with gasoline is not stable, it must be blended in the tanker trucks before being delivered to the service station.

Refineries and the capitalization of their costs account for about half the cost of gasoline at the pump in most US states. Motorists share that cost with airline passengers, homeowners and utilities customers, and users of products like plastics, fertilizers, and other petrochemicals.

When researchers attempt to calculate proved oil reserves, they lump all grades together although the utility of those grades vary as well.

For example, recently estimates of Canada's reserves were drastically increased, pushing Canada from well below the USA in terms of total proved reserves to far above it. The reason is that 175 billion barrels of bitumen held in the oil sands of Alberta, Canada, were suddenly included in the total. Suddenly Canada is believed to have more oil than Iran and Venezuela combined. Yet bitumen requires extraordinary processing before it can be refined. I was surprised to learn that Alberta already produces massive volumes of gasoline and diesel from oil sands (a third of Canada's total output is from oil sands).

Conventional economic analysis of oil reserves would lead one to believe that, as the commercial value of productive reserves declines, the cost of products (like gasoline) will go up. If the price of gasoline rises to $4/gallon all the time, then marginal oil fields will go online. Refineries will become more sophisticated; new procedures will be introduced. Airlines will shift to airplanes with 100-250 passengers rather than the gas-guzzling jumbos (which burn more fuel per passenger), then to turboprop airliners (which are the most efficient planes of all). SUVs, created by massive government subsidies, will disappear as prices climb above $6/gallon, while new industrial processes phase out petrochemicals. Eventually the pressures gradually push the developed world into developing post-petroleum energy systems, and the problem goes away.

Under peak oil theory (POT), this doesn't happen because, when oil rises above $80 a barrel and stays there, the world economy implodes. Refineries may require twenty years before the bulk of capacity incorporates major new equipment optimized for $80-crude, simply because of the risks associated. In the meantime, economies like that of China require massive new infusions of petroleum. Exactly what happens then is a matter of intense debate. Here is a casual listing of speculative analyses by extreme pessimists. The listing is handy because it gives names, titles, and summaries.


While it's true that there is a physical limit to the volume of oil that can be pumped per day—it's about 80 million barrels per day, of which 20 million is consumed in the USA—it seems likely that we would simply revisit 1978. That was the year that the real price of oil was driven to a record high by a shortfall, then created by OPEC. The effect of '78 was to send a huge lump of global income to the banking system of the West, as petrodollars flowed into OPEC coffers, then back to New York and London. The dollar soared relative to the rupee (Indian and Pakistani) and other non-OPEC third world nations. Then latter had a debt crisis and capital flows to those countries dried up. When they revived, the damage was done; countries like India or Brazil had permanently exploitive terms of trade with OECD countries. This damaged the bargaining position of American workers relative to management, and soon after 1980, the real outsourcing revolution began. The maquiladoras opened up along the border with Mexico, median wages stagnated, and the lines of debate in the USA moved relentlessly to the right. Certain liberal measures like legal abortion and civil rights survived because they benefited many income categories; and Europe was spared the decline in wages because of a sound industrial policy.

A repetition of '78 could simply make everything more extreme. American society could fall apart, placing extreme pressures on European society, then on Japan. China could suffer a depression, while Latin America explodes into revolution. Or it could cause the reverse: it could create a crisis felt disproportionately by American elites, reversing the decades-long growth in inequality. Or, of course, I could be in denial, and the POT could explain why the world will end and we will be plunged into the stone ages.

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Additional Reading:

Oil Depletion Analysis Centre (ODAC), London, UK;

Inventory of US & global reserves of oil and energy situation overview for all countries (Department of Energy);

Exxon Mobile report on energy trends : an analysis of growth in demand for various types of energy. According to the report, global oil consumption is expected to double by 2020; 80% will be in developing countries.

Chevron’s Pascagoula Refinery Home Page: guided tour of a modern facility with simple explanations of processes involved

(Part 2)

GPS in PDAs

This is not at all surprising: a PDA incorporating GPS. For a couple of years at least, GPS was available as a "card" (i.e., as a device that plugged into the PDA using the PC Card/PCMCIA slot). Now more OEMs are incorporating the GPS into the device itself, along with GPS applications (e.g., navigation systems).

The hv6500 Mobile Messenger will be available with Vodafone SIMs shortly, and can be ordered from online retailers in two versions, the hv6510 without a camera, at £366, and the hv6515 with a camera at £389. Despite being a newcomer to telecoms handsets, and some teething trouble with the 6315 model, HP is adapting well to the demands of operators, said Regine Hohnsbein, HP's European director of handhelds and mobility. "We already have 15 operator contracts in Europe for converged devices," he said.

The camera-free version has been made at the request of corporations, but their stance that cameras are frippery has softened, said Smith. "Some corporates don't want cameras, but we've been asked for some applications that use cameras," he said, listing insurance assessors and car -ire companies. "It's not just consumers that want cameras."

Of course, my next prediction is neural microprocessors that allow PDA users to literally download additional capacities for their devices. If your PDA doesn't come with GPS, it can become GPS -capable by reconfiguring its microprocessor instruction set.

Terror as Political Theater

A narrative is a story that takes things we expect, like the handsome peasant's son falling in love with the comely princess, and combines them to explain things we do not, like the crystal casket and the magical kiss of true love. When the bombs went off in London this morning, there were many narratives used to explain why this happened. How can a man get on a train filled with Londoners and not be smitten with tenderness for them? How can he will their deaths? Did the perpetrator wear the bomb, or did he use ingenuity to leave it where it would kill? Was he forced to commit the act by thugs holding his family hostage? I can try to spin a narrative, which involves very severe errors of logic, a psychopathic distortion of religion, and the teachings of Frantz Fanon.*

Another narrative is, of course, that of Frantz Fanon himself (Wikipedia) and Che Guevara. Whatever may be the supposed influence of Fanon or Guevara on such thinking, they described political narratives in which the oppressed—a subjugated race, like the Blacks of French West Africa, or the dispossessed Arabs & Berbers of Algeria—would perceive violent resistance as their only hope. Fanon was a psychologist, and he includes case studies in the appendix of Wretched of the Earth, so his chain of reasoning owes much to empirical research.

However, I cannot take the idea seriously that terrorism actually achieves progressive motives. It alters how power is exercised; sometimes the perpetrator becomes an associate, as happens in some 3rd world insurgencies; in other cases the terrorist group abandons terrorism because the battlefield has changed (e.g., Hizbullah in Lebanon).

However, the main purpose of terror is political theater. The terrorist, we all understand, is in a derranged mental state and cannot make reasoned judgements. Just as the insane person can claim to be acting upon logical arguments, the terrorist communique or training manual claims to be following certain facts to their "inevitable conclusion." We often assume that insane people are illogical; that's not true. What makes a sane person sane is the ability to recognize when a stream of logic has gone too far from common sense or other forms of rational thinking. Somehow, the guardrail that prevents sane people from becoming murderers of people they never met, and who never did anything to them, is simply missing. To such a mind, death is merely an abstract loss; where you and I see 33 persons who were cruelly murdered, they see a "statement," a tactical "insult" towards a monolithic "other." Each and every person is somehow a manifestation of the hated "other" (I've actually read a fair amount of eschatological literature in translation; whether Evangelical Christian, like the Left Behind series, or Islamicist, this is an explicit feature of how the unbelievers are regarded. In most cases, the literature includes fantasies in which a huge share of "weak" coreligionists—e.g., "liberal" Christians, non-Qutb-ist Muslims—are slaughtered as part of a colossal redemptive auto de fe. Invariably, in these stories, both the errant coreligionists and the satanic infidels display astonishing determination to remain hostile to God's revealed plan).

In theater, the object is to tell a narrative that combines plausible events to create a surprise (e.g., a man unwittingly murders his father and beds his mother); in political theater, the object is to act in a way that reveals political possibilities. The new possibilities are "taking down" the Great Satan [sic.]; the goal, or dream , is not to persuade, but to defeat. In the 1960's, such an idea was not even madness; it wasn't even coherent enough to be Dadaism. The technology (gadgets) of mass destruction have escalated the plausible level of terrorist action, but so far we haven't seen the use of atomic bombs or really effective use of sarin gas. On the other hand, the technical aspects of civilization—the global system of fellowship known as civil aviation, for example—have been profoundly hurt by terrorism. For decades, European countries faced with smallish terrorist attacks have adopted sophisticated surveillance technology and onerous security systems that foreigners took in stride. American efforts to do so, regardless of the urgent motivation, have touched off extreme resentment in countries like Brazil.

Theater is about plausibility. Revolutionary theater, or political theater, seeks to convince the audience that total victory is in reach. Technology is about integration of knowledge, plus its diffusion. Both are about propagating ideas. Terror makes technology vulnerable; technology makes terror shift position. In the 1960's, the most ambitious terrorism was associated with Communism, which was affiliated with Moscow or Beijing; then, with Arab nationalism, which was associated with Cairo, Baghdad, or Algiers. In the 1970's, Leninist ideology was challenged by more radical, apocalyptic tendencies. In the 1980's, Hizbullah (Lebanon) challenged conventional (Sunni) Arab nationalist movements, just as Black September outflanked the mainstream PLO. Al-Fatah, now faced with a myriad of more desperate, far-fetched theaters of violence, sought international diplomatic recognition and renounced terror. The New Left was now under fire from genuinely nihilist movements, and—in Europe and the Middle East—abandoned violent "struggle." Al-Qaida represents a thread of conclusively nihilist theoretics, something that the founders of Hamas would probably concede was less plausible than levitating Israel to the North Pole.

With the shift of technology, the todays perpetrator becomes tomorrow's target, because the theater of terror is all about marginal plausibility and desperation.
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*Frantz Fanon: I admit I'm uncertain about the role of Fanon's thinking in the ideology of "Islamic" terror. First, Fanon had an analysis of anti-colonialism that tended to implicate the entire populations of colonial powers, thereby validating violence against them. Defenders of Fanon, like Mahmoud Mamdani, argue that all he was doing was explaining what was already there. Others say he was an ideologue of murderous revolutionary violence, someone who justified terrorism by equating the person of non-combatant Europeans with colonial oppression. Someone reading his works would presumably see why it made perfect sense for Black September to gun for Israeli athletes (Munich, '72) or for the ANO to throw Klinghoffer off the railing of the Achille Lauro. Did that mean Fanon therefore is to blame for the newfound [?] enthusiasm with which terrorists target the helpless, rather than go after the people who actually do supervise their oppression?

Scientifically, the answer can only be "no." Fanon's works are seldom read; the indoctrination of terrorists or genocidal killers never alludes to Fanon. However, it often uses reasoning he had outlined. He wrote about terrorism after it had shocked the world. Hence, even if one is vulnerable to post hoc ergo hoc fallacy, it still makes no sense to accuse him of instigating things that occurred before anyone had read him. On the other hand, he seems to endorse the point of view of the terrorist: that the mass murderer, by virtue of representing an [arbitrarily designated] group of underprivileged, do indeed achieve liberation merely through killing the [arbitrarily designated] oppressor. The terrorist, in his view, represents a moral alternative to the oppressor. This, I cannot accept. The terrorist is another type of oppressor, and what he validates is the act of oppression.

Bombings in London

As everyone knows, there's been four bombings in London that are reported to have killed 37 people and included several hundred (BBC). I have never been to London, but of course the murder of random people to terrorism is always and everywhere a monstrous crime. Regardless of how one may feel about the governments in the West, or the G8 leaders & their relative influence, this is a vile and utterly indefensible crime.

At this time I feel a little sketchy about trying to find a technology "spin" to this atrocity. There's something repulsive about glomming onto people's anguish like a fly on a wound and say, "As an expert [sic] on telecommunications and information technology, this is important because..." It's important to human beings because it's a perverse, sick crime. Randomly chosen commuters don't deserve to have this happen to them.

Terrorism is part of the political theater; it's about lies purporting to be historical narrative. It is, in effect, a deed that tells a lie. The historical narrative is war between civilizations, as if the relationship of civilizations to each other could ever be one of bombings and hatred. Civilization is insight and imagination; it comprises the institutions we create to bring humans together to solve problems, not about might. In my next post, I want to discuss this political theater as something that is changing. The technology of "communication" [sic] is transforming the theater, changing the lies it attempts to cast as narrative, and changing the way we respond to it.

The moral urgency of all this, in my opinion, is that technology itself is a modality of civilization. It's always fascinated me: the irony of a nihilist on the computer, using a byproduct of civilization to attack it. People like Heinlein and Niven, in my view, are as wrong as it's possible to be about technology; that it's about gadgets and individual use of them. Technology requires extreme cooperation and it is really one of the things that civilization allows. It has no meaning and cannot be sustained without huge, functioning societies and globalized industries (that's why post-civilization tehnologies they write about are merely sci fi; if society broke down, this computer would be just 20 Kilos of toxic waste. Civilization itself has to harness technology to resist its expropriation by people who kill in its name (and by that, I mean, the unctious spokesmen of political theater everywhere).