Author's Note: Art Berman (aeberman) is an Oil Drum staff member and geological consultant whose specialties are subsurface petroleum geology, seismic interpretation, and database design and management. He has been interviewed on CNN and BNN about the Deepwater Horizon disaster. William Semple collaborated on this post. Mr. Semple is a drilling engineer and independent drilling consultant with 37 years of experience in the oil and gas industry. He worked for 16 years with a major oil company and has 24 years of experience as a drilling supervisor. He has been a guest contributor on The Oil Drum writing about the Deepwater Horizon (June 19, 2010).

A permanent solution to the BP Macondo blowout in the Gulf of Mexico may be achieved soon but there are risks. Admiral Thad Allen announced on Monday, July 26 that a static top kill would be attempted on August 2. The schedule may be accelerated to July 31 or August 1 according to an announcement today (July 29). The sealing cap has successfully stopped the flow of oil and gas from the well and the pressure continues to build slowly. Temperature at the wellhead has not increased, and seeps near the well are mostly nitrogen and biogenic methane unrelated to leakage. BP Senior Vice President Kent Wells’ technical update on July 21 explained these findings and showed how the well will be killed.

There are risks involved in both the top and bottom kill procedures. The purpose of this post is to describe those risks. There are two risks associated with the static top kill. First, it may not work at all and second, it may rupture the casing by pumping heavy mud under pressure (“bull heading”).

Kent Wells described the static top kill as a process of continuously pumping mud into the well until the oil is pushed into the reservoir. This is clearly erroneous and must be a simplification designed for the general public. What will more probably take place is a practice called “bleed and lubricate”. Heavy mud is pumped into the well through the choke and kill lines on the blowout preventer (BOP) and allowed to sink to the bottom of the well. Hopefully, the mud will retard the flow so that some of the pressure can be bled off by producing oil to the surface for a short period. Then, more heavy mud will be pumped into the well, and the process repeated as necessary until the well contains enough mud to kill the well.

The first problem with stopping the flow from the top is that it has to be an annular kill: the flow was coming up the annulus outside the production casing. This is a very narrow space so mud will have to pumped at high pressure to achieve entry. It will initially be working against a full column of gas and oil and the shut-in pressure at the well head. On the positive side, if produced sand has accumulated in the annulus, the operation may not have to contend with the full force of the reservoir pressure in addition to these obstacles. On the negative side, the well head seals might prevent or restrict downward flow, or the pumping pressure could rupture the 22-inch casing, or reach a pressure high enough to call off the operation.

Figure 1a (based on a government document) shows that the upper part of the well bore is protected by three strings of casing (36-, 28-, and 22-inch) and cement down to 7,937 feet (measured depth below sea level). A fourth string of 16-inch casing extends nearly from the well head to where it is cemented at 11,585 feet, but it is apparently hung inside the 22-inch casing at 5,227 feet, leaving a gap of 160 feet. The 16-inch pipe has a burst rating approximately equal to the current shut-in pressure of 6,900 psi (80% of rating), but the 22-inch pipe does not meet this standard.

BP has said that the relief well DD3 plan will continue regardless of the success of the top kill operation. The main risk with a bottom kill is that it may take considerable time to accomplish. Because of the recent tropical storm, crews are just removing the storm packer today, and it will take time to re-enter and condition the hole before drilling resumes. BP estimate that the DD3 will intersect the Macondo well around August 10. Most efforts to intersect a blown-out wells require several attempts. The recent 2009 Montara blowout in the Timor Sea required four attempts that took a month after the relief well was near the blow out and cased. The bottom of the first Macondo relief well is currently located a few feet from the target at approximately 17,220 feet measured depth (based on Wells’ update and shown in Figure 1b).

The good news is that, in this case, the relief well does not, apparently, need to intersect the well exactly--it just needs to be close. Once the relief well penetrates the reservoir, enough mud can be pumped to hopefully overcome flowing pressure and kill the well. The bottom-kill option has the same annular flow path liabilities as the top kill, but it has the capacity to deliver higher flow rates directly to the reservoir. This approach will not cause significant pressuring near the well head and should not, therefore, pose a risk of rupturing the 22-inch casing.

The bottom kill option involves considerably less mechanical risk than the top kill, but time is the enemy, so the top kill makes sense. Maintaining the objectivity to abandon the operation rather than risk casing rupture will be critical.

This is a guest post by Gregor MacDonald. Gregor is an oil analyst and energy sector investor, who, in his words, "also focuses on the coming transition to alternatives". This post was previously published on Gregor.us.

Left unaddressed during the past 3 years in most of the debates between economists has been the problem of energy. The reason is simple: post-war economists don’t do energy, except as an ever-expanding resource that the credit system and technology makes available. For the post-war economist, the supply curve of energy–save for brief lags–is always coming back into rough equilibrium with the economy.

Accordingly, the ongoing dispute between Keynesians and Austrians (or Austerians if you like) is exceedingly boring in this regard. As late as 2008, for example, economist Paul Krugman was at least an infrastructure-and-engineering Keynesian. However, Paul quickly converted to becoming just a throw lots of money at the existing system Keynesian. The hollow nature of Krugman’s debate with Niall Ferguson meanwhile comes via their shared belief that the system will self-organize, if you follow their respective prescriptions. They are indeed the inheritors of Adam Smith.

However, neither allowing the economy to deflate further from here via austerity, nor throwing more debt-marked stimulus will solve the present day problem. For the United States, along with the rest of the developed world, has reached a boundary in energy.

Only an economist could wonder in their leisure now, whether energy played a significant role in our current crisis. Indeed the public remarks of Ben Bernanke on the matter of energy, during the 2005-2010 period, were at least as clueless as his embarrassing commentary on the historic bubble in housing and credit. As the nation’s chief economist, Bernanke saw no problem with credit, with derivatives, with the fast inflation in housing prices, or with energy prices. And as an American economist, he was not alone.

As state’s see their budgets collapse and start a new round of layoffs, we should consider the fact that house price inflation masked the lack of wage growth in the United States. And now that house prices continue their descent for a 5th year, American workers are more fully exposed to the decade-long march higher in energy costs. They can experience this individually through energy prices, or more generally through the overall energy cost to the economy. Hence, the chart above.

Unlike many who were either shocked or angered at the ridiculous paper released by Richmond Fed Economist Kartik Athreya, Economics is Hard, I was delighted. For, the paper confirms that at the Federal Reserve, just as in the post-war economics profession, competency has been replaced with authority. Indeed, this was in fact Athreya’s central point: that only a PhD in economics conferred the proper access to discuss economic issues. The most beautiful rebuttal came from Ambrose Evans-Pritchard, who made a point dear to me and one that I have made for years: economics is a social science, not a science. In other words, economists are working down here, alongside the rest of us humanists. History, literature, psychology, and anthropology to mention a few disciplines are all equally competitive fields of knowledge to understand the system of behavior known as an economy. Accordingly, it behooves post-war economists to dislodge themselves of the view that their discipline neatly explains energy and energy supply. Lose the attitude. The problem of energy limits awaits you.

-Gregor

Chart: United States Energy Expenditure as a Percent of GDP 1999-2008. Data used is the latest available. GDP series comes from the US Department of Commerce, Bureau of Economic Analysis. Energy Expenditure data comes via EIA Washington’s SEDS series, for all states and also the country as a whole. I put these two data series together on my own, but, checked it against EIA Washington’s own calculation of Total Energy Expenditures vs GDP. 2009 is not omitted from the chart by choice, but rather, because expenditure data is not easily available yet for that year. Background photo is of a rooftop sculpture by Antony Gormley from his project Event Horizon, which was displayed in both London and New York.

ANALYSIS-Russian oil output yet to peak, say drillers (Reuters) - Global oil servicing firms are seeing strong growth in Russia as companies order advanced technology for depleted West Siberian fields in a move that may allow Russian output to grow further from current peak levels.

Russian oil output has grown by 70 percent since 1999 to exceed 10 million barrels per day and become the world's largest. It has defied repeated predictions it would fall as depletion of West Siberian fields outpaces production growth in East Siberia.

But oil servicing firms say the quest for the best equipment and technology may allow Russia to achieve even its ambitious targets to produce as much as 10.7 million bpd by 2030 if Arctic and offshore Caspian Sea fields are also put on stream.

Why We'll See $300 Oil by 2020 For decades, the theory of peak oil—or the idea that the world either has or will soon exhaust its ability to produce more oil—was derided as a doomsday scenario too unbelievable to ever come to pass. But $147 oil and one commodity crash later, and suddenly peak oil doesn't sound so strange after all.

In fact, mounting scientific evidence suggests that peak oil will not only be a reality, but may soon be upon us, says Charles Maxwell, senior energy analyst for Weeden & Co.

Scientists: BP dispersants have made spill more toxic Amid growing concern about the use of dispersants in the Gulf of Mexico, a group of scientists working for law firms suing BP says their testing indicates that the dispersants being used to break up the oil are making this spill even more toxic to marine life.

U.S. Justice Staff Said to Urge Subpoenas for BP Managers U.S. Justice Department attorneys conducting a criminal probe of the BP Plc well explosion in the Gulf of Mexico have recommended that a grand jury be convened and BP managers subpoenaed to determine if any laws were broken, a person familiar with the investigation said.

Niger Delta Militants Threaten to Resume Attacks on Oil Facilities Nigeria's main militant group, the Movement for the Emancipation of the Niger Delta (MEND), is threatening to resume attacks on oil facilities in two weeks unless there is more progress in tackling the region’s problems. A spokesman for the group blames what he calls government inaction.

Venezuela approves Orinoco oil joint ventures Reuters) - Venezuela has formally approved the creation of three joint ventures with foreign energy companies in the next step towards developing the OPEC nation's vast Orinoco extra heavy crude belt.

The Latin American country signed deals with several companies in February to exploit the reserves in the region, which are seen as some of the biggest deposits in the world.

Sri Lanka: Where there’s oil – There’s turmoil We are almost certainly on the threshold of a new era of economic development and international diplomacy ushered in by the imminent discovery of oil. Drilling is due to start in the Mannar Basin next January. This opens before us exciting prospects of economic prosperity as well as daunting challenges posed by players in the arena of global political and diplomatic relations.

Mexico arrests Pemex oil official in bribery case MEXICO CITY (Reuters) - Mexican police have arrested an official at state oil monopoly Pemex on suspicion of trying to sell an exploration contract for around $19,000, the attorney general's office said on Thursday.

Kabul rioters burn SUVs, yell 'Death to America' KABUL, Afghanistan — Afghan police fired shots on Friday to disperse hundreds of people protesting the deaths of civilians in an accident involving a U.S. Embassy vehicle, officials said.

A crowd of angry Afghans shouted "Death to America," hurled stones and set fire to two SUVs after the crash on a road leading to Kabul's airport, according to the capital's criminal investigations chief, Abdul Ghaafar Sayedzada.

A NATO official told AFP the vehicles involved in the crash belonged to the U.S. Embassy.

Greek gas pumps dry despite strike order Serious fuel shortages persisted in Greece on Thursday, hurting businesses and the country's tourism industry, after an emergency order to force striking truckers back to work was stalled by red tape.

Large coal reserve base to be built in Wuhan (China Knowledge) - Henan-based China Zhong Ping Energy Chemical Group Co will team up with the Wuhan municipal government to build a large coal reserve base in the city, according to a statement published on the website of the Department of the Commerce of Hubei Province.

China's Nuclear Power Building Boom The demand for emission-free nuclear electricity in China is growing as quickly as its megacities and middle-class. Some analysts estimate that China will need to build as many as 300 new nuclear power plants by 2050 -- a nuclear building boom so ambitious that it threatens to tax the world's supply of uranium to its limits. China currently has 17 nuclear reactors under construction or in the planning stages and 11 in operation. For comparison, the United States depends on 104 active reactors to provide about 20 percent of nation's electricity.

Steve LeVine: How long will the Chinese put up with coal? Woodmac's report concludes that China's appetite for LNG will swell for the next decade, requiring the gas equivalent of 380,000 barrels a day of oil imports, but that this demand will be cut in half in the 2020s. Why? Woodmac doesn't say China will give up on gas, but rather that it's going to develop its own domestic resources -- specifically shale gas, using hydro-fracturing technology invented in the United States. In this scenario, China's gas supplants its use of industrial oil, but not too much coal, which will continue to be far and away the fuel of choice for the production of electricity.

GM to boost Chevy Volt production NEW YORK (CNNMoney.com) -- General Motors announced Friday that the automaker has raised its planned production of the Chevrolet Volt electric car to 45,000 in 2012.

Originally the automaker planned to produce 30,000 Volts in its second year of production.

Gazing at the globe through a glass half full I’m settling into my summer reading: I’ve read Matt Ridley’s The Rational Optimist and I’ve now moved on to a note just out from Baillie Gifford called Rational Optimism.

I found myself rather taken by Ridley’s book – largely because I think I might be something of an optimist myself. I’m mildly concerned about peak oil. But I also think it pretty likely that any long-term crisis over a shortage of fossil fuels will be thwarted by something along the lines of Ridley’s “vast solar power farms” in Algeria and some “pebble-bed passive safe modular nuclear reactors”. As my husband mutters every time an oil doomster comes to dinner, the Stone Age didn’t end because they ran out of stones.

Industrial Graft-Vs-Host Disease and the Throw-Away Economy It has been noted among many Peak Oil advocates that in the future, as the cost of a) producing consumer goods, b) shipping them from the other side of the planet, or c) both, rise with the price of oil, people will turn repeatedly to repairing that which they already own.

Unfortunately, when it comes to many (most?) of the small consumer items we take for granted, this may be somewhat wishful thinking.

How Can We Reduce Oil Consumption & Still Ship Goods and Ourselves Around the Globe? Two things which I think are worth keeping front and center when discussing how we wean ourselves off our petroleum addiction: Travel between nations is good; trade between nations is good. It's easy to point out specific incidences where less-than-savory outcomes resulted from trade and travel, but on the whole both are beneficial for human culture. What we need to address is how are we going to move our goods and ourselves around in less energy intensive ways, so that both are less harmful to the planet (and therefore ourselves).

Trapped in an age of false plenty In the 1920s, in southern US states like California and Florida, it wasn't uncommon to see solar water heaters on the roofs of homes. Not that there were a lot of people eager to be green back then, it was simply an inexpensive way to heat water.

Then natural gas wells were drilled, and pipes were laid, and new homes were built with the pipes running right up into the hot water heaters. And the rooftop water heaters vanished.

Why?

Because natural gas was cheaper? Of course not. How could anything you pay for be cheaper than free sunlight? But natural gas was more efficient, and it didn't require home builders to put up the rooftop heaters, and roofs probably looked a bit prettier without pipes running across them.

The watermelon party Two years ago as the world's economy collapsed, The Economist devoted an entire issue to the idea of so-called steady state economics.

The issue featured two academics who were already stars of the environmental movement, Tim Jackson and Herman Daly.

First results from Transition Together evaluation ‘Transition Together’, the street-by-street behaviour change programme developed by Transition Town Totnes and now being piloted in 10 other communities, has just completed analysing the data that has come back from the first 4 groups, comprising 32 households in Totnes. They have completed all 7 of the sessions set out in the workbook, and the data offers a fascinating first look at whether the process works or not. The results from the other 31 groups currently underway are expected this Autumn. Here, Fiona Ward of Transition Together shares the results that have emerged.

Unnatural Science Clearly I’ve been out of some loop for too long, but does everyone take for granted now that science sites are where graduate students, researchers, doctors and the “skeptical community” go not to interpret data or review experiments but to chip off one-liners, promote their books and jeer at smokers, fat people and churchgoers? And can anyone who still enjoys this class-inflected bloodsport tell me why it has to happen under the banner of science?

Hammering away at an ideology, substituting stridency for contemplation, pummeling its enemies in absentia: ScienceBlogs has become Fox News for the religion-baiting, peak-oil crowd.

Fossil Fuel Subsidies Are 12 Times Support for Renewables, Study Shows Global subsidies for fossil fuels dwarf support given to renewable energy sources such as wind and solar power and biofuels, Bloomberg New Energy Finance said.

Governments last year gave $43 billion to $46 billion of support to renewable energy through tax credits, guaranteed electricity prices known as feed-in tariffs and alternative energy credits, the London-based research group said today in a statement. That compares with the $557 billion that the International Energy Agency last month said was spent to subsidize fossil fuels in 2008.

“One of the reasons the clean energy sector is starved of funding is because mainstream investors worry that renewable energy only works with direct government support,” said Michael Liebreich, chief executive of New Energy Finance. “This analysis shows that the global direct subsidy for fossil fuels is around ten times the subsidy for renewables.”

Disguised Blessing Oil is nobody's poster child at the moment, what with the spill off China's Dalian port an aching reminder of the much larger calamity on the U.S. Gulf coast and persistent fouling of places like Nigeria. This can be a dirty business, even before the fossil fuel is burned and we experience whatever the effects of that are.

Yet there is good news on the oil front--the gloomiest pricing scenario has not happened. Remember July 2008, when spot crude exceeded $140 a barrel? Serious people were contemplating a $200 level, and some in the "peak oil is here" camp--that's the theory that the world has already begun to exhaust its reserves and, thus taken by surprise, will enter a panicky price spiral--were talking $300. In fact, the spot price has barely touched $83 in 22 months.

Oil Falls, Poised for Weekly Decline, on Weaker Global Economic Concern Oil fell in New York, poised for its biggest weekly decline in four, on concern that faltering global economic growth will curtail a recovery in fuel demand.

Crude pared yesterday’s 1.8 percent gain as Asian and European equities dropped before a report on U.S. gross domestic product. Oil has retreated 1.4 percent this week, its largest loss since the five days ended July 2. Prices may decline next week as U.S. inventories rise, according to a Bloomberg survey of analysts.

British Gas warns of rise in energy bills British Gas, major provider of gas and electricity to UK homes, has said energy bills may rise although it "will try to delay" the hike as long as it can.

The warning comes just as the company is being pressurised by consumer groups to cut energy bills, after it reported a 98 per cent rise in profits to £585m over last year.

Gulf of Mexico Oil Imports Rise as Floating Storage Wanes Oil imports into the Gulf of Mexico region surged to a record last week as the profits from floating storage evaporated, pushing traders to unload their cargoes and forcing crude futures lower.

The price advantage for traders who buy oil and store it at sea for a month instead of delivering it immediately has shrunk 90 percent since May. Floating storage in the Gulf dropped 24 percent in the week ended July 23, Bloomberg data show.

Rosneft, Others May Deliver Gasoline to Iran Rosneft, Gazprom Neft and Tatneft may begin delivering gasoline to Iran in a month, the head of the Iran Commission of the Moscow Chamber of Commerce and Industry said Thursday.

Talks are being held on a “working level” and the first delivery may take place in late August or September, Rajab Safarov said in an interview.

China Declares Sovereignty in Southern Sea as U.S. Seeks Role in Disputes China declared its “indisputable sovereignty” over the South China Sea and held naval drills in the waters, pushing back against a U.S. role in resolving disputes in one of the world’s busiest shipping lanes.

“China has indisputable sovereignty of the South Sea and China has sufficient historical and legal backing” to underpin its claims, Geng Yansheng, a Ministry of Defense spokesman, told reporters at a military compound outside Beijing today. It opposes efforts to “internationalize” the issue and will resolve differences through “friendly negotiation,” he said.

Big Oil posts better profits on higher fuel prices NEW YORK — The major oil companies continue to climb back from the recession, with higher fuel prices driving up earnings.

After setting record profits in 2008, the oil industry tanked last year as the global economic downturn induced a dramatic drop in oil and natural gas prices. On Thursday, Exxon Mobil Corp. said it earned $7.56 billion in the second quarter, its best result since the last three months of 2008. Royal Dutch Shell Group posted a 15 percent gain in net income. A day earlier, ConocoPhillips said net income nearly tripled in the April-June period.

Exxon Mobil, PetroChina In Talks On China Gas Project -Source BEIJING -(Dow Jones)- U.S. oil major Exxon Mobil Corp. (XOM) is in talks with PetroChina Co. to jointly explore and develop an unconventional gas block in the resource-rich Ordos basin in north China, a person who has direct knowledge of the matter told Dow Jones Newswires.

A successful conclusion to the talks would mark the entry of another global energy major into China's huge but undeveloped shale or tight gas sector, which China hasn't been able to develop due to a lack of technical expertise.

Total Reports 72% Increase in Profit After Raising Production Total SA, Europe’s third-biggest oil company, reported a 72 percent increase in second-quarter profit after projects started last year were ramped up.

Profit excluding changes in inventories and the value of a stake in Sanofi-Aventis SA rose to 2.96 billion euros ($3.9 billion) from 1.68 billion euros a year earlier, the Paris-based company said today in a statement. That beat the 2.65 billion- euro mean estimate of analysts surveyed by Bloomberg.

Sunoco Rebounds on Refining Independent refiner and marketer of petroleum products, Sunoco Inc. reported significantly better-than-expected second quarter 2010 results, driven by steady earnings from most of its business segments. Earnings per share, excluding special items, came in at $1.31, outshining the Zacks Consensus Estimate of 74 cents. The reported quarter result was substantially ahead of the loss per share of 27 cents in the second quarter 2009.

Pair of Atlantic Weather Systems Have Low Chance of Becoming Depressions Two weather systems over the Atlantic and southeastern Caribbean have a “low chance” of strengthening into depressions or tropical storms, the National Hurricane Center said.

Russia To Export 5.5 Million Tons Urals From Primorsk In Aug LONDON -(Dow Jones)- Russia plans to export 5.5 million metric tons, or around 1.3 million barrels a day, of Urals crude in August from its Baltic Sea port of Primorsk, which is lower than the 6 million tons planned for July, according to the loading program seen by Dow Jones Newswires Friday.

Formosa Oil Refinery Fire May Have Polluted Taiwan Fishery, Officials Say A fire at Formosa Petrochemical Corp.’s residual processing unit this month may have polluted fishery near the plant, local government officials said.

Dead clams and fish have been found in an area of about 1,000 hectares (2,471 acres) since the July 25 accident, said Lai Chien-sheng, a section chief at the agriculture department of Yunlin county, where the plant is located. “We’re probing the cause of the deaths,” he said by phone today.

Regulators Warned Company on Pipeline Corrosion BATTLE CREEK, Mich. — The company responsible for a massive oil spill here was warned in January by federal regulators about insufficient monitoring of corrosion on the pipeline that federal officials say leaked more than one million gallons of oil into a major waterway this week.

The owner of the pipeline, Enbridge Energy Partners, received several citations from federal regulators in recent years before the warning in January. Company officials said they had routinely tested the pipeline for corrosion.

Enbridge: Corrosion not clue in oil spill Reports of corrosion on Enbridge Inc.'s local oil pipeline aren't necessarily clues to the cause of the company's possibly 1 million-gallon leak into the Kalamazoo River this week, Enbridge officials said Thursday.

The unseen damage of a leaking pipe Thick, black oil covers patches of grass on Debbie Howard's property, which borders the Kalamazoo River for slightly more than a mile.

Flooding has brought oil from the river onto Howard's 60-acre property in Galesburg, next to the Fort Custer Recreation Area. The water receded but left a coat of oil in its wake, she said.

Report: Michigan ranks high in pipeline accidents WASHINGTON -- Michigan is more familiar than most states with oil spills and other pipeline accidents, according to a report released Thursday by the National Wildlife Federation.

Michigan had 61 "significant incidents" over the past decade, the ninth-largest number in the country.

Spill halted, Enbridge’s reputation sullied The Enbridge spill into Michigan’s Kalamazoo River has been contained, but it’s left a nasty sheen on the company’s reputation and its sprawling network of aging pipelines in North America.

US expert says China's worst oil spill is far larger than government has reported so far BEIJING (AP) — China's worst known oil spill is dozens of times larger than the government has reported, and some of the oil was spilled deliberately to avoid an even larger disaster, an American expert said Friday.

China's government has said 1,500 tons of oil spilled after a pipeline exploded two weeks ago near the northeastern city of Dalian, sending 100-foot- (30-meter-) high flames raging near one of the country's key strategic oil reserves. It has not updated that estimate since a few days after the spill.

But Rick Steiner, a former University of Alaska marine conservation specialist, estimated 60,000 tons to 90,000 tons of oil actually spilled into the Yellow Sea.

Explosion, Fire at Storage Tank at Pemex's Madero Refinery Evacuates 2,000 About 2,000 people were evacuated by Mexican authorities after an explosion and fire at a coker unit gasoline storage tank at Petroleos Mexicanos’s Francisco I. Madero refinery on the Gulf of Mexico.

The blaze was under control at 6:30 p.m. local time yesterday, said a Pemex spokesman, who asked not to be identified in accordance with company policy. No other facilities at the refinery were damaged, he said.

Libya boosts reserves Libya's proven crude oil reserves rose to 46 billion barrels in the first half of this year after adding 612 million barrels from new fields, according to reports.

House to Take Up Offshore Drilling Reform Bill Three months after the catastrophic oil rig explosion that sent millions of gallons of crude spewing into the Gulf of Mexico, the U.S. House of Representatives was poised on Friday to debate legislation clamping down on the industry's offshore drilling practices.

BP's Hayward: 'I became a villain for doing the right thing' Tony Hayward, who resigned as chief executive of BP in the wake of the Gulf oil spill, has said that he was turned into "a villain for doing the right thing."

In his first interview since deciding to step down, Hayward told the Wall Street Journal that he did everything possible after the Deepwater Horizon exploded, by taking responsibility for the spill and spending billions on the clean-up operation and efforts to stop the leak.

US gas stations: Stay BP or change name to Amoco? NEW ORLEANS — BP gas station owners across the country are divided over whether the oil giant stained by its handling of the Gulf spill should rebrand U.S. outlets as Amoco or another name as part of its effort to repair the company's badly damaged reputation.

Sinopec Says BP Declined Its Offer to Buy Some `Good' Assets After Spill China Petroleum & Chemical Corp., Asia’s biggest refiner, said BP Plc declined an offer by the Chinese company to buy some of its assets.

“We’ve talked to BP on some good assets, but they won’t sell,” Zhang Jianhua, senior vice president of the company known as Sinopec, said in an interview in Shanghai today, without naming the ventures. “We aren’t in any talks with BP right now.”

Blowout Beneficiary BP's spill is scaring oil and gas majors out of the deep water. That's good news for shale gas pioneer Range Resources.

Gulf of Mexico Has Long Been a Sink of Pollution HOUMA, La. — Loulan Pitre Sr. was born on the Gulf Coast in 1921, the son of an oysterman. Nearly all his life, he worked on the water, abiding by the widely shared faith that the resources of the Gulf of Mexico were limitless.

As a young Marine staff sergeant, back home after fighting in the South Pacific, he stood on barges in the gulf and watched as surplus mines, bombs and ammunition were pushed over the side.

He helped build the gulf’s very first offshore oil drilling platforms in the late 1940s, installing bolts on perilously high perches over the water. He worked on a shrimp boat, and later as the captain of a service boat for drilling platforms.

The gulf has changed, Mr. Pitre said: “I think it’s too far gone to salvage.”

‘Peak oil boost for our industry’: 2020 Vision However, the Twenty Teens are predicted to herald the arrival of Peak Oil. This will finally bring home the message that our transport needs to change dramatically.

Has this province reached its peak? In a sense, Alberta reached its peak oil moment years ago with the decline of conventional oil reserves followed by the demise of its natural gas sector. When previous booms went bust, the expectation of the good times cycling back was always fulfilled — a resiliency no longer guaranteed.

Given its dependence on the oilsands, Calgary’s one-horse standing’s been whittled down to a pair of hooves and the pony they’re under has become an international pariah.

T3 presents - Making Sense of the Financial Crisis in the Era of Peak Oil Transition Town Tramore (T3) and Futureproof Kilkenny have come together to organise for Canadian Energy Consultant and Financial Blogger Nicole Foss to visit the South East and give a presentation entitled Making Sense of the Financial Crisis in the Era of Peak Oil.

Nicole's presentation will give a thorough overview of the problems being faced within the financial system, and explain how it relates to the problems being experienced in the energy production system.

Living off the land Five years have passed since we left Sydney. It seems like five minutes, yet our city life feels like a hundred years ago. We left to become as self-sufficient as possible after learning about the coming age of shortages and chaos resulting from peak oil (see opposite). Six months after leaving Sydney behind, I wrote a book called Choosing Eden (published by Random House Australia) explaining the move to the little farm we grandly called Eden Forest Permaculture Sanctuary.

Improved Gulf power grid reduces blackouts The new GCC electricity grid has put an end to power cuts in four countries in the northern Gulf but the lack of an agreed tariff is hampering more effective use of the US$1.4 billion (Dh5.14bn) network, a senior official says.

The grid, which was connected for the first time last year, has allowed Kuwait, Saudi Arabia, Bahrain and Qatar to better handle surges in demand on the hottest summer days.

Spain Nearing Accord With Solar Producers on Reducing Subsidies The Spanish government and solar- power producers are moving toward an agreement aimed at reducing subsidies to the industry and reining in electricity prices without damaging the country’s renewable energy industry.

Spain to Investigate Solar Plants Over Subsidies, Government Official Says Spain may force any solar plant owners who cheated on paperwork to gain higher subsidies to repay income earned through deception, a ministry official said.

California Clears Hurdle for Electric-Car Charging Stations to Sell Power California regulators voted to make it easier for electric-car charging companies to sell power in the U.S. state that’s likely to be the biggest market for such vehicles.

Fight Gears Up on Biomass There is evidently no form of energy, including renewable energy, that lacks opposition. A big spat right now centers on biomass power plants.

Bike may spark an electric revolution Eqbal al Yousuf said his company planned to sell Phoenix’s first 150 electric pick-up trucks by the end of the year but mainly in the US where there were government cash incentives for buyers and American authorities were pushing for green vehicles to be used in the public sector.

Without the government support to reduce the cost and risk in the UAE, local consumers will be wary of spending the US$75,000 (Dh275,475) for such a pick-up, he said.

“Humans get scared of anything new. We get scared of the unknown,” Mr al Yousuf said. “And this technology here is unknown for a lot of people around the world. So without the government push, without the government support, even if it’s cost-effective, a lot of people will not go for it.”

Instead of four-wheel vehicles, Mr al Yousuf plans to sell Phoenix’s electric bicycles in the UAE as early as September, before they are rolled out in any other market. The first shipment will be for 500 bikes, he said. The $800 bicycles have a maximum speed of 26kph and a range of 31km on a full charge.

Government funding for electric cars cut by 80% A government scheme to give motorists money off when purchasing electric cars has been cut by 80 per cent. Despite recent warnings from independent climate change groups that Britain must increase the amount of electric cars drastically if it wants to meet EU emission targets, the fate of low-carbon charging points hangs in the balance. Environmental groups, politicians and electric car-makers argue that cutting the incentive will reduce the amount of green jobs and harm the cars’ take up.

Energy Department tests energy-saving program The Energy Department has picked Bethesda-based Marriott International Inc. to be one of the companies in a pilot program to help businesses, governments and other organizations reduce energy use in their buildings.

EPA rejects challenge to climate rules The Environmental Protection Agency Thursday rejected an effort to keep it from regulating greenhouse gas emissions, saying that e-mails released in last fall’s “Climategate” scandal gave it no reason to reconsider the science of global warming.

In a sternly written opinion, EPA Administrator Lisa Jackson said she didn’t agree with requests from the GOP attorneys general from Texas and Virginia, the U.S. Chamber of Commerce and other conservative groups that questioned the underlying science linking humans to global warming and also warned of the potential economic burdens from new climate rules.

Cutting soot emissions best hope for saving Arctic ice According to a new study led by Mark Z. Jacobson of Stanford University in the US, the quickest, best way to slow the rapid melting of Arctic sea ice is to reduce soot emissions from the burning of fossil fuel, wood and dung.

His analysis shows that soot is second only to CO2 in contributing to global warming.

Matt Simmons, author of Twilight in the Desert, has long been one of the most famous and influential voices on the subject of peak oil. After the release of his book, Simmons rose to fame as Saudi Arabian oil production declined and global oil prices skyrocketed.

However, Simmons has lately been making hyperbolic claims related to the deepwater spill in the Gulf of Mexico. Based on the scenarios Simmons has outlined, he argues for responses such as using a nuclear explosion to seal the well and evacuating 20 million people from the Gulf Coast. Extraordinary responses such as these would impact a great many people, so The Oil Drum staff felt that a critical look at some of Simmons’ claims was in order.

Note: This essay is a compilation of work from multiple Oil Drum staff members, particularly JoulesBurn, aeberman, Euan Mearns, and Robert Rapier.

1. The real leak is seven miles away.

Simmons first suggested this in an interview with MSNBC’s Dylan Ratigan on May 26th, 2010. In response to a question about a second leak, Simmons replied that there was reportedly a lot of oil six miles away, and said “I think that’s where the wellhead is.” He also mentioned that he had been telling government officials that. In a later interview on June 7, 2010, Simmons made the following claim:

I would think by the end of the week we will discover that we have an open hole with no casing in it which [inaudible] about seven miles away from where BP had been trying to fix these little tiny leaks in the drilling riser. I bet we'll find the drilling riser is still connected to the rig bore, and so they've done everything wrong.

Source: May 26th on MSNBC, June 7 on MSNBC

Response

Simmons apparently came to this conclusion because the leak from the end of the severed riser seemed to him too small to account for the large and growing oil slick on the surface of the Gulf of Mexico. This, coupled with reports that a NOAA ship, the Thomas Jefferson, identified possible oil plumes beneath the waters 5-10 miles away, led him to conclude that this new location was where the real spill, and the original well, lie. That BP and the US Coast Guard continued to maintain that the blowout preventer (BOP) was still intact atop the original wellbore, and then proceeded to stem the flow of oil with a series of efforts, suggested to him a massive coverup.

Although it is difficult to prove that a ruse this elaborate has not been staged on the seafloor, there is clear evidence that the assemblage of ships involved in the spill response has been positioned around the Macondo-252 well location specified in the original well plan submitted to the Minerals Management Service (MMS) by BP. DigitalGlobe, a satellite imagery provider for Google Earth, has made available georeferenced photographs taken on May 24, when oil collection operations were underway. Using data from the above sources, the pictures below can be constructed showing the positions of interest on the BP well plan and the satellite image.

Figure 1. Satellite photograph (DigitalGlobe) showing relief well rigs and oil containment ships operating on May 24, 2010. Location of MC-252 well on photo ascertained using coordinates from DigitalGlobe measurements and the Macondo well plan and drilling authorization submitted to MMS by BP.

Figure 2. Map from BP well plan with ship positions (as per DigitalGlobe measurements) indicated. Well "A" is consistent with the Macondo drilling authorization.

If you go to the MMS Gulf of Mexico Region web site, you can find information showing that the original well and the relief well are in the locations where activity has recently been taking place, by looking up information using 'Fast Facts', 'Application for Permit to Drill' (APD), 'Bottom Lease', and 'G32306'. A reader made this screenshot showing the coordinates of the wells and sidetracks planned. Coordinates for blowout well match well "A" on the initial Macondo well plan.

Finally, it can be shown that the burning rig was located where the MC-252 well plan indicated (and where the relief well rigs, etc. have been operating).

Figure 3. Satellite photo taken while the Transocean Deepwater Horizon was on fire, geo-referenced using Google Earth. MC-252 location from the Macondo well plan. 7 mile horizontal line added (to left of well) for distance reference. (click on image for larger version)

The alleged relocation of the BOP and riser several miles from an explosively uncased well, besides being inconsistent with well documented coordinates for the well, presents several logistical problems. Foremost, the BOP was initially still attached to part of the riser. Thus, this ungainly pair would have to been launched from the well several miles until it lodged in the mud on the Gulf floor, in the correct orientation. If the riser was still attached to the Deepwater Horizon, as Simmons also suggested, this stretches credulity even further.

In short, there is no evidence that the well recently capped by BP is not the original Macondo well, or that the original well is still flowing with no casing.

2. Oil is flowing at 120,000 barrels/day

Simmons has stated on a number of occasions that he estimates that oil from the blowout is flowing into the Gulf of Mexico at a rate of 100,000 to 150,000 barrels per day. From a talk at Camden, Maine on July 15th:

Simmons described the real blowout as an open hole gushing 120,000 barrels of toxic crude every day below the surface of the Gulf six or seven miles away from the riser. And BP is ignoring it, he said.

"What you are seeing on television, what BP is saying about relief wells . . . that's a total ruse," said Simmons.

Source: Simmons' Take on the Oil Spill in the Gulf

Response

This figure appears to be a guess based on an estimated reservoir pressure of 40-50 thousand psi, which itself is a guess based on the intensity of the surface fire before the rig sank.

Oil Drum contributor Arthur Berman (aeberman) has compiled data from the MMS that summarizes all Outer Continental Shelf (OCS) well maximum flow rates. The spreadsheet can be accessed here. The data show that the average well in the OCS had a maximum flow rate of 11,800 barrels per day (bpd) and the maximum flow of any well was 46,500 bpd. Thus, the flow rates Simmons postulates are far beyond any well seen to date in the OCS.

It should be noted, though, that the flow in these wells is typically constrained so as to prevent damage to the wellbore. Indeed, the flow from MC-252 (the one seen on the ROV videos) is likely constrained within the BOP and possibly in the wellbore. Given this, it is possible that an uncased well (if it existed) would support this high flow rate if the reservoir pressure was as high as Simmons suggests. However, Macondo reservoir pressures of 40-50 thousand pounds per square inch are not supported by any data.

Source: June 7 on MSNBC

3. The real spill has caused a lake of oil larger than Washington state.

In the talk at Camden, Maine, Simmons claimed that BP was intentionally misleading the public and the government about the extent of the spill and that it would take a heavy toll in human lives:

That submerged lake of oil has grown larger than the size of Washington state and is approximately 500 feet thick, according to Simmons' estimate.

"It's thick oil, flowing like lava . . . covering a large part of the Gulf of Mexico and taking the oxygen out," said Simmons. When it mixes with the upper layer, the toxicity will be released, and when it comes ashore Simmons predicts it will take a heavy toll in human lives.

Response

The area of Washington state is 71,303 square miles. If the lake is 500 feet thick, this would imply 177 trillion barrels of oil in the lake, vs. 2-4 trillion barrels estimated total reserves plus production to date for the world.

Also, claims of a quantity of oil this large are not consistent with Simmons' claim of 120,000 barrels/day from the "real" well bore. For example, at this flow rate for 90 days, a spill the size of WA would only be 10 microns thick (.01 mm).

Finally, the lake of oil defies the laws of physics by staying on the sea floor and not rising to the surface of the Gulf of Mexico, because most of this type of oil is lighter than water, so would be expected to rise.

4. Methane is lethal and toxic.

In an interview on NPR on July 15th, Simmons made the following claims:

It’s this toxic waste and crude and it’s releasing methane gases that are absolutely lethal which is why all the fish and dolphins and sharks and whales are dying. And workers too, which is why so many have gotten sick, or maybe really sick.

“The health problems are so serious,” Simmons said. “When you inhale methane you just die.”

Source: They’re still lying about the oil disaster

Response

There are many natural sources of methane in the environment, including belching cattle and decomposing organic matter. Many of us use natural gas - mostly methane - to heat our homes. All of us inhale methane every day. While methane is clearly flammable and it is a potent greenhouse gas, it is completely non-toxic. Methane, like the nitrogen that makes up 78% of the earth’s atmosphere, is a simple asphyxiant. What that means is that it could kill you by displacing oxygen, but methane itself is non-toxic (unlike carbon monoxide, for example).

In the same interview, Simmons discussed the toxicity of hydrogen sulfide gas, which is often present in petroleum reservoirs (although not significantly in Macondo). He noted that low-level concentrations can be fatal, and that workers are trained to put gas masks on quickly if monitors detect its presence. He then states that methane is more toxic than hydrogen sulfide. As per above, this is completely erroneous; hydrogen sulfide is highly toxic while methane is non-toxic.

Reference: Material Data Safety Sheet for Methane

5. Use of a small bore nuclear device is the “only option” to stop the flow of oil.

In an interview on Bloomberg Television on July 21st, Simmons repeated his accusation that BP was lying about the extent of the disaster, and called it "the biggest environmental cover-up ever." He further stated that "we have killed the Gulf of Mexico", that clean-up costs, if clean-up were even feasible, would top $1 trillion, and that "if they (BP) told the truth, they would all go to jail."

Simmons had stated previously that a small nuclear device was the only option to seal the leak. In this interview, one of the reporters indicated that reports were coming in that the oil was no longer leaking and asked if that gave Simmons hope. Simmons replied:

“No, because that’s not the gusher. That was a little bit of condensation that would have ended anyways. There’s no way to fix the gusher because there’s no casing left in the hole other than doing a small diameter nuclear bomb...It's the only way. With no casing left in the hole, the odds of the relief well working are zero."

Source: July 21, Bloomberg TV

Response

It is certainly surprising that the guy worried about toxic methane clouds isn't worried about a nuclear explosion in the Gulf of Mexico. But Simmons is not only advocating this position as "the only solution", he is telling government officials that this is the course of action that should be pursued.

The basis for his position is built upon his notion that there is a massive open hole spewing oil into the Gulf of Mexico miles from where BP is pulling off a massive scam. Per Point 1 there is no evidence to support the existence of this hole that Simmons believes will take a nuclear explosion to cap.

As previously discussed here at TOD, the Soviets did in fact use nukes successfully for gas well fires. The differences between the situations then and now were 1). The leaks were onshore; 2). The leaks were gas; 3). These were actual leaks that needed to be sealed that had resisted other efforts.

Given that there is no evidence of this massive gusher -- and even if it did exist, the idea of using a nuclear explosion at those depths and under those conditions is fraught with uncertainties -- this is not a reasonable option for dealing with the spill. Further, evidence continues to mount that the leak has been slowed or perhaps stopped.

Conclusion

Those who suggest that Simmons might be right, based on some new information that arises or some misinformation supplied by BP, should identify which parts of his story are right: the gravity-defying lake of oil? Flying BOPs? Methane death clouds?

In addition, for those who ask the question "what if Simmons is right?", the answer would be that all textbooks on basic physics, chemistry, and toxicology would have to be rewritten to handle the discrepancies between what is currently believed vs. what Simmons suggests has occurred.

In conclusion, the claims made by Simmons and documented in this essay are not credible. Some - such as the idea that methane is toxic - are factual errors. Other claims, such as an open gusher that BP is covering up, defy logic. How Simmons will respond if no evidence of his claims emerges remains to be seen.

This thread is being closed. Please comment on http://www.theoildrum.com/node/6790.

Admiral Allen held a press conference in the Gulf region (rather than recent ones held in Washington), in which he noted that the news of the rapid disappearance of the oil already emitted by the Deepwater well is raising questions as to how long to retain the different parts of the fleet assembled to deal with it. Well pressure continues to slowly build, and there are no signs that the well integrity has been breached. The problem of the skimmer fleet, and the distributed lengths of boom are non-trivial. Should a hurricane appear then the oil-contaminated boom segments can become polluting sources themselves if they are carried inland. And so they must be collected, cleaned and stored, if there is no longer a need. (Or if they are too contaminated they may need to be disposed of as hazardous waste).

The Admiral also discussed the continuing developments with both the top static kill, (waiting on the cementing of the relief well) and the progress of the relief well itself. The packer sealing the well has been released and recovered, and the well is now being cleaned, before operations restart.

They removed the subsea containment device—which they call a packer—that was put in to protect the well while they evacuated the site before of the severe weather.

After that (was) done, they will run another drill string clear to the bottom of the relief well, and then they're going to flush the entire wellbore out to make sure there's no particles or anything—sediment from the formation. When that is done, they will be ready then to put the casing pipe in. The casing pipe is the last structural member that will go into the relief well and cement that in place.

Once that is done, that will be the cue to start the static or the top kill we've talked about, which will happen next week. Following that—then we'll be in a position, once the cement dries, to go ahead and drill into the annulus and begin the bottom kill sequence of events as I've briefed before.

Note that once the relief well (RW) is cased and cemented, then it is not necessary to have the cement harden before doing the static kill, though it will be necessary for the relief well operation to complete.

In the latter case, since the cemented casing will act as a springboard to allow the drill to advance the last one hundred feet to meet the 7-inch casing of the original well, accuracy in positioning is still critical to success. The RW is planned to run alongside the original well, slowly chewing through the original cement annulus and finding out whether that is the source of the oil, or whether its integrity is still sound. (And with lots of opinions there is yet little real data on which to give a definitive answer.)

In regard to the static kill, he answered a question on the chances of success by noting

One of the things that, as you know, has been a subject of a lot of controversy or discussion, I would say—maybe not controversy, but discussion, spirited discussion among the science team, BP engineers, and so forth—is why the pressure was so low when we capped the well itself, down in the 6,000 range.

The competing theories from that are we have depletion in the reservoir that caused the pressure to be lower or there could potentially be a leak down there.

One of the things we're going to find out when we start to put the mud in for the static kill—if there's a precipitous drop in pressure, we'll know we have a well integrity issue at that point. If there is not, and we fill that well with mud right away, and it holds pressure, I think we'll know a lot more about the condition of the well.

One of the big concerns with injecting fluid into the well lies with the strength of the rocks in the bottom of the existing well. There is some concern that if the mud injected into the well is too heavy, then it can raise the pressure in the bottom of the hole to the point that the surrounding rock fractures. At this point the build-up of pressure in the well is relieved, as the fluid can now flow into the crack generated (and there is the precipitate drop in pressure that the Admiral refers to). That (because the rest of the well is lined with a cement and steel jacket or casing) is most likely to occur in the lowest section of the well, where it was not lined with both steel and cement, but rather a full-well-length steel tube (the production casing) was cemented into place, with cement only at the bottom of the well. Further the oil bearing rock tends to be weaker than the rest.

It is thus down around the zone of the producing rock that this fracture and leakage – the loss in well integrity – is likely to occur. And it is that zone that will be penetrated by the relief well. Thus if there are problems that arise during the static kill from the top of the well, then they will likely be remediated by the following arrival of the relief well in the critical region.

Now I think there may be another complexity (and in reality there are many in this process) and that relates to the possible injection of cement at the end of the static kill as a way of sealing the well. My concern is that while the static kill will displace oil and gas in the well by pushing them back into the formation, from which they earlier escaped, that is not true with the mud. The oil and gas, having flowed out of the rock with the differential pressure having the well pressure lower, can flow back, when the well pressure is higher. Mud on the other hand, bear in mind, is designed in part to line the well and provide an impermeable liner to the well during drilling. Thus to inject cement with the intent of driving some of the mud that the cement displaces into the formation may require higher pressures that with the oil and gas. This may, in turn, bring the well pressure above that at which the formation fractures. It is for reasons such as this that I expect the process to be carried out somewhat slowly, and in stages, rather than as a sudden “magical” flourish to end the crisis.

Hagens: U.S. addicted to energy, debt In spite of what you might have heard, the planet may never run out of oil.

Fat lot of good that'll do when it takes a barrel's worth of energy to get a barrel of oil out of the ground.

And we've long since used all of the easy-to-extract oil, says Nate Hagens, speaking Tuesday night at Kansas Wesleyan University on how communities can learn to adapt to declining resources, energy included.

Hagens is a former vice president for both Lehman Bros. and Salomon Bros. investment firms but quit that career several years ago and last week completed his Ph.D. in natural resources studies at the University of Vermont.

Until recently, he was also editor of theoildrum.com, a website dealing with global energy supply.

Hagen pulls from those areas, and others, such as evolutionary biology, to explain why America and other developed nations are addicted to both energy and debt, and how those addictions work against our long-term good.

John Michael Greer: The cybernetics of black knights Let’s start with a few basics. Information is the third element of the triad of fundamental principles that flow through whole systems of every kind, and thus need to be understood to build viable appropriate tech systems. We have at least one huge advantage in understanding information that people a century ago didn’t have: a science of information flow in whole systems, variously called cybernetics and systems theory, that was one of the great intellectual adventures of the twentieth century and deserves much more attention than most people give it these days.

Unfortunately we also have at least one huge disadvantage in understanding information that people a century ago didn’t have, either. The practical achievements of cybernetics, especially but not only in the field of computer science, have given rise to attitudes toward information in popular culture that impose bizarre distortions on the way most people nowadays approach the subject. You can see these attitudes in an extreme form in the notion, common in some avant-garde circles, that since the amount of information available to industrial civilization is supposedly increasing at an exponential rate, and exponential curves approach infinity asymptotically in a finite time, then at some point not too far in the future, industrial humanity will know everything and achieve something like omnipotence.

Richard Heinberg: Beyond the limits to growth In any case, the underlying premise of the book is irrefutable:

At some point in time, humanity’s ever-increasing resource consumption will meet the very real limits of a planet with finite natural resources. We the co-authors of The Post Carbon Reader believe that this time has come.

Spill marks turning point for offshore oil, not demise With the Macondo well corked for now and perhaps days away from a permanent seal, the momentum for offshore work may be returning.

Companies are starting to adapt to the new shallow-water rules, with Houston's Apache obtaining a new drilling permit this month.

And four oil majors have banded together to create an oil spill response company that aims to address the industry shortcomings that were brought to light by the Macondo spill.

"Painfully, we learned how significantly the actions of one company could influence a huge swath of the Gulf Coast economy," said Dan Pickering, head of research at the energy investment firm Tudor Pickering Holt & Co.

Anger over the spill hasn't translated into legislative gains for fossil fuel foes.

Oil Industry Rethinks Cost, Risk Of Drilling In U.S. The BP spill in the Gulf of Mexico is bound to have repercussions for the oil industry and America's energy future, but experts say it could be a while before they are all sorted out — and the final consequences could prove surprising.

The Risks of Deep Water Drilling The Deepwater Horizon disaster serves as a tragic reminder of oil’s shortcomings.

In particular, it shows how the industry is trying to operate in very tricky conditions when it comes to deep water drilling. As oil executives say, at such depths, the seabed is as remote as the moon. And it has the added threat of much higher pressures.

Yet for all the hazards, production won’t move back towards shore anytime soon.

Shell could pursue BP for gulf damages Shell today refused to rule out pursuing damages claims against BP and other companies involved in the Gulf of Mexico disaster.

The company took a $56m (£36m) hit after it was forced to stand down seven rigs and platforms because of the moratorium on drilling in the US imposed in the wake of the disaster.

Why Robert Dudley's BP Could Be Even Riskier The embattled oil giant's first American CEO embraces a high-risk survival plan.

Florida bets on Feinberg DESTIN, Fla. (CNNMoney.com) -- Business owners in Florida believe Kenneth Feinberg will manage the $20 billion oil spill claims fund fairly and efficiently, but because of the complicated nature of their claims, they're anxious about how much they'll get paid.

On the 100th day since the oil started spewing, Feinberg spoke to a jam packed crowd of business owners and industry leaders in Destin, Fla.

Mexico's exploratory drilling at record low Mexico's state-owned Pemex has this year drilled the fewest wells in search of new crude and natural gas reservoirs since 2001, raising doubts over its drive to sustain production as major fields age.

Nigeria oil reserves drop by 4.79% Crude reserves in Nigeria have dropped by 4.79% to 31.81 billion barrels over the past year because companies refuse to undertake exploration, a senior industry official said.

Michigan oil cleanup 'inadequate': governor Michigan Gov. Jennifer Granholm says the cleanup so far has been "wholly inadequate" and warns of a tragedy if the oil reaches Lake Michigan — and local residents are also expressing concern.

Greenpeace protest against Enbridge pipeline ends with four arrests Four Greenpeace activists have been charged after protesters occupied the downtown Vancouver office of Enbridge and demanded the company halt plans to build a pipeline from Alberta to B.C.

Canadian oil sands profits jump amid green battle CALGARY, Alberta (Reuters) - Two of Canada's biggest oil sands companies posted higher profits on Thursday on strengthening oil prices, as controversy builds over the environmental costs of tapping North America's biggest crude reserves.

Alberta gas shortage spreads to B.C. A gasoline shortage at some Shell stations has spread from Alberta to southeastern B.C.

Shell said it doesn't know how many service stations have run dry, nor how long it will take to get fuel to them.

Mexico's Pemex posts Q2 20.1 bln peso loss on FX (Reuters) - Mexico's state oil monopoly Pemex posted a quarterly loss on Wednesday, hit by foreign exchange losses on its U.S. dollar-denominated debt and domestic price controls for fuel sales.

Shipping goods from Asia more costly The cost of shipping consumer goods from Asia to Canada is surging, with another price increase kicking in Sunday, as freight forwarders face a shortage of containers this summer and fall.

“This is traditionally the peak season for imports coming from China to Canada,” said Perry Lo, president of Canaan Transport Group Inc., a freight forwarding firm based in Mississauga, Ont. “And now we face a huge price hike.”

TransCanada profit down, hurt by nuclear business CALGARY, Alberta (Reuters) - Pipeline and power company TransCanada Corp reported a 9.2 percent drop in quarterly profit on Thursday, hit by hedging losses as well as lower power prices and higher costs at its partly owned Ontario nuclear plants.

Is Outgoing Colombian President Riling Venezuela? In Sunday's bombastic speech, Chavez told his countrymen war was imminent — and that it was the Yankee empire orchestrating the coming bloodbath. If an attack came, Chavez said, he would shut off the oil spigot to the United States — even if that meant Venezuelans would be forced to eat rocks.

This has been a regular threat over the years, and it plays well to Chavez's most radical followers.

But Chavez's latest diatribe comes at a particularly delicate time. Last week, in a special emergency session of the Organization of American States, the Colombian ambassador to that body, Luis Alfonso Hoyos, detailed how Venezuela allegedly aided and abetted Marxist rebels who have been fighting Colombia since the 1960s.

The black gold paradox BANGLADESH that has been facing severe energy crunch, continues still to be indecisive about the use of one of the cheapest energy source, coal. Despite having a substantial reserve of the mineral, successive governments have failed to finalise a coal policy determining the methods of its extraction. The draft coal policy has been revised again and again in the light of recommendations of the experts but the final policy resolving the contentious issues involving the method/s of mining is yet to emerge.

The dispute over methods of mining in a country where coal mines are located in heavily populated areas is nothing surprising. The old method of coal mining, making tunnels underground, does not cause any major displacement of population or destroy forests and other infrastructures. But very marginal exploitation of coal reserves, estimated at 20 per cent of the entire reserve, is considered to be uneconomic. The other method, the open-pit mining ensures the full exploitation of the reserve. But it entails an enormous sacrifice in terms of loss of land and property and damage to environment, flora and fauna.

Front Yard Wind Power Plan Irks SF Neighbors "I am pro wind and pro solar but I don't think this kind of thing belongs in a dense urban setting. I don't," said neighbor Lucile Taber. "If it were to fall it would fall directly to the home over there, another concern is the noise, there is flicker problems with it."

Hawaii utility proposes electric car charging deal Hawaiian Electric Co. is proposing a plan to make it cheaper for early adopters of electric vehicles to charge up.

Palm oil giant accused of rainforest destruction caught ‘red-handed’ A major supplier of palm oil and pulp (paper) to multinationals, including food giant Cargill, has been caught clearing orang-utan habitats and carbon-rich peatlands.

Alaska Airlines cuts emissions with smoother landings Smoother airplane landings are not only easier on passengers but also on the environment as they reduce greenhouse gas emissions, according to new test results by Alaska Airlines.

The Seductions Of Clicking: How The Internet Can Make It Harder To Act Our online networks build on what sociologist Mark Granovetter called "the strength of weak ties." Older forms of community built on distinct local networks where people knew each other face-to-face, but where reaching out beyond those they saw day-to-day was harder. Our new tools make it easy to maintain far looser networks that we can continue to easily nurture. As Gideon Rosenblatt of the environmental group Groundwire points out, "these networks of weak ties can be put into action on a moment's notice, enabling online social change efforts to go viral at a speed and on a scale never previously possible." We take for granted our ability to link overlapping circles of friends and acquaintances in a manner until recently inconceivable.

Iran’s top oil customer buys less China’s imports of Iranian crude oil fell by almost a third in the first half of the year, new figures showed this week.

Volumes have decreased just as new US and European sanctions threaten to disrupt energy ties between the two countries, experts say.

Iran shipped just over 9 million barrels of oil to China to the end of last month, making it China’s third-largest crude supplier, according to fresh Chinese customs data. That was down from 13.1 million barrels in the first half of last year, even as Chinese imports from Angola, Saudi Arabia and other major exporters rose significantly.

Oil Declines on Rising U.S. Crude Inventories as OPEC Production Increase Crude oil dropped for a third day in New York on speculation the economic recovery is not proceeding fast enough to rein in excessive fuel supplies.

The Organization of Petroleum Exporting Countries’ oil output increased for the third time in four months in July, led by gains in Iraq, a Bloomberg News survey showed. Futures yesterday declined to a one-week low after U.S. crude imports jumped to the highest level in almost four years, leading to an unexpected increase in commercially held inventories.

OPEC meets only half July oil output curbs -survey LONDON (Reuters) - OPEC is meeting only half its promised cuts in oil supply this month thanks to a big jump in exports from Nigeria and despite a smaller decline in production in Angola, a Reuters survey showed on Thursday.

Supply from the 11 members of the Organization of the Petroleum Exporting Countries with output targets, all except Iraq, has averaged 26.95 million barrels per day (bpd) this month, up from 26.75 million bpd in June, according to the survey of oil firms, OPEC officials and analysts.

Asia-Pacific crude-Sept Tapis climbs on gas oil strength (Reuters) - Prices of Malaysian Tapis crude climbed on Thursday reflecting market-wide support for distillate-rich grades in Asia-Pacific.

Exxon Mobil's earnings more than double NEW YORK — Exxon Mobil Corp. said Thursday its second quarter income nearly doubled to $7.56 billion as oil prices increased from last year.

It's Exxon's highest quarterly profit since the $7.82 billion earned in the last three months of 2008. But it's still well below the record-setting third-quarter profit of that year, when Exxon earned $14.83 billion after oil prices spiked to near $150 per barrel in the summer.

Shell defends deep-water drilling as profits soar Royal Dutch Shell posted soaring profits on Thursday and defended deep-water oil production, saying it has an "important role" to play despite the US Gulf of Mexico disaster that rocked rival BP.

The Anglo-Dutch oil giant reported a 15-percent jump in net profit to 4.39 billion US dollars (3.38 billion euros) in the second quarter, as it slashed costs and raised output.

Its performance contrasts markedly with that of embattled BP, which on Tuesday posted a second-quarter loss of 16.9 billion US dollars in the wake of the devastating Gulf of Mexico oil spill.

Natural-Gas Squeeze Prompts Switch of Fuel in Middle East Persian Gulf petrochemical producers are turning to naphtha as a feedstock for the first time amid growing power-plant demand for natural gas.

Abu Dhabi plans to build the Middle East’s first plant that will only use naphtha to make plastics. Saudi Arabia may develop similar units as part of two refinery ventures, according to state-run Saudi Aramco, France’s Total SA and Sumitomo Chemical Co. of Japan, the partners in the projects.

While naphtha, a product of refining crude oil, is used to make petrochemicals around the world, countries in the Middle East have traditionally preferred cheaper home-produced natural gas. Now, new power plants are competing for those gas supplies, stoking demand for alternatives. That’s being exacerbated as the United Arab Emirates and Saudi Arabia expand petrochemicals production to cut dependence on crude exports.

Mystery of Japanese tanker damage probed An investigation has been launched into the unexplained damage suffered by a Japanese oil tanker in the Strait of Hormuz near Oman.

The M Star was damaged on Wednesday while travelling from Qatar to Japan.

Port officials in Fujairah in the United Arab Emirates say the ship was involved in a collision. However, the boat's owners Mitsui OSK believe their vessel may have been attacked.

Early reports that the ship was struck by a freak wave have been dismissed.

North China gas well fire burning for nearly week: Xinhua BEIJING (Reuters) – A natural gas well operated by Shaanxi Yanchang Petroleum Group has been burning for nearly a week since drilling in the well caused gas to leak out and explode, Xinhua reported on Thursday.

No casualties have been reported. Villagers near the well were evacuated shortly after the accident, Xinhua cited a local county official as saying.

Crews work to cap new La. oil leak near Gulf NEW ORLEANS – Oil, natural gas and water are still spewing from an abandoned well hit by a barge on a Louisiana waterway near the Gulf of Mexico.

Coast Guard Capt. John Arenstam says a wild well company is working on a plan to shut down the well, which is north of Barataria Bay and has been leaking since early Tuesday.

BP aims for quick well kill HOUSTON/MIAMI (Reuters) – BP may permanently shut the well that caused the worst off-shore oil spill in U.S. history as early as Monday, the company said as speculation grew over assets it might sell to cover mounting costs.

Incoming BP chief executive, Bob Dudley, said on Wednesday the company would stay involved with the cleanup process in the Gulf of Mexico long after the leaking well was plugged and expressed optimism the damaged environment would recover.

"It is possible that as early as Monday or Tuesday this well might be killed," Dudley said on National Public Radio.

BP's Dudley Targets Riskiest Deepwater Drilling After $32 Billion Blowout Robert Dudley, the man charged with rebuilding the reputation of BP Plc after the disastrous oil spill in the Gulf of Mexico, will slim the company to its core strength: the high-risk, high-return search for oil and gas in demanding environments.

That suggests Dudley, who becomes the first American chief executive officer of the British oil giant on Oct. 1, will follow the same strategy that led to the Gulf spill and turned outgoing CEO Tony Hayward into a pariah, Bloomberg Businessweek reports in its Aug. 2 issue.

HSBC tapped to sell BP's stake in Vietnam gas project HONG KONG/LONDON (Reuters) – BP has tapped HSBC to sell its stake in the Nam Con Son gas project in Vietnam, as it scrambles to hive off $30 billion of assets to pay for the clean-up of the worst oil spill in U.S. history, three sources said.

The British oil giant, which is on a campaign to sell a host of assets from Pakistan to Egypt, said last week it is seeking a buyer for its stake in the Nam Con Son gas project offshore southern Ho Chi Minh City, worth $966 million by one estimate.

BP May Sell Venezuela Oil Stakes to Russian TNK-BP Venture BP Plc has told Venezuela’s state oil company it’s interested in selling stakes in three projects to its Russian venture, TNK-BP Holding, Petroleos de Venezuela SA Vice President Eulogio del Pino said.

Barring BP From Drilling Would Cost Jobs in U.S., Company Tells Congress BP Plc objected to proposed legislation that would bar the oil company from operating new drilling leases in U.S. waters, saying it could trigger job losses and threaten the nation’s energy security.

A provision of the House bill may have a “drastic impact,” David Nagel, executive vice president of BP America, said in a July 28 letter to Democratic Speaker Nancy Pelosi of California and Republican Minority Leader John Boehner of Ohio.

First lawsuits linked to Gulf spill go to court WASHINGTON (AFP) – The first lawsuits linked to the Gulf of Mexico oil spill go to court Thursday, as BP prepared -- after months of trying -- to permanently seal its ruptured well.

As the Gulf of Mexico disaster this week reached the 100-day mark with hopes high that the endgame may be under way, families of those killed in the rig explosion that sparked the disaster, and fishermen who lost their livelihoods because of it, were to face BP in court for the first time.

BP Said Negligence May Be Found in Cause of Oil Spill, Texas Letter Shows A BP Plc lawyer said evidence would show that an April explosion and oil spill in the Gulf of Mexico were the result of gross negligence, Texas officials said in a letter that didn’t say who committed the alleged negligence.

Governor Rick Perry and Attorney General Greg Abbott said in the July 22 letter that BP didn’t attempt to take advantage of a cap on damages under the Oil Pollution Act because gross negligence would make that irrelevant. The letter was addressed to Doug Suttles, chief operating officer for exploration and production, and Jack Lynch, a general counsel.

News Cycle Turns in BP’s Favor The answer is boringly simple–BP capped the well, oil stopped flowing into the Gulf, beaches and fisheries reopened, the TV cameras moved on to the next sensation and the doom mongers that didn’t have the sense to pack up and leave too were left looking a little silly. Indeed, Matt Simmons retired as Chairman Emeritus of Simmons & Co.

Just as new shoots of grass are sprouting on once-oiled marshes, the facts are beginning to thrive now that the flood of hype has receded.

Gulf spill raises long-term beach safety questions MIAMI (Reuters) – It could be years before some Gulf of Mexico beaches recover fully from BP Plc's massive oil spill and are declared free of toxic pollutants, including heavy metals, that can make people sick, a leading environmental advocacy group said on Wednesday.

Feds, farmers create habitats for migrating birds MAMOU, La. – Water gurgling from a well is flooding Craig Gautreaux's rice and crawfish fields, turning the farm into a wetland for migratory birds whose usual Gulf of Mexico wintering grounds are threatened by the oil spill.

Across eight states, farmers such as Gautreaux are inundating fallow fields to provide an alternative for some of the tens of millions of ducks, geese and shorebirds that are beginning to make their way south on a flyway that stretches as far north as Alaska and Iceland.

BP Disaster Regnites California’s Anti-Drilling Fervor What a difference an oil spill makes. Californians, whose dislike of offshore drilling dates back to the Santa Barbara spill of 1969, had begun to see virtue in new sources of oil as gasoline prices soared in 2008, polls showed.

That year, for the first time since 2000, when the first poll of the state’s environmental attitudes was taken by the Public Policy Institute of California, a majority — albeit a bare one, 51 percent — was willing to allow more drilling off the California coast. The majority was about the same in 2009, and opposition dwindled to 43 percent.

The latest poll, however, shows the opposition snapping back after the offshore oil disaster in the Gulf of Mexico. In the institute’s survey this month of 2,502 Californians, 57 percent opposed new offshore drilling; the proportion supporting drilling dropped to 36 percent, down 15 percentage points from 2009 levels.

Analysis: BP spill seeps into Norway's Arctic drilling debate (Reuters) - Norway's decades-old political consensus on offshore drilling is under attack in the wake of the BP oil spill, just as it covets new riches in the Arctic.

The powerful oil industry says it needs to tap resources off the Arctic archipelagoes of Lofoten and Vesteraalen and in a huge, recently demarcated Barents Sea border region with Russia to continue Norway's oil boom amid dwindling North Sea output.

But, emboldened by the Gulf of Mexico well blowout, Norwegian environmentalists seek to grab the upper hand in a battle they feel they have long been loosing.

Senate energy bill draws widespread criticism WASHINGTON (Reuters) – Republicans and some moderate Democrats in the Senate on Wednesday began picking apart a new energy bill that they complained goes too far in holding oil companies responsible for accidents like the massive Gulf of Mexico spill.

"I think people who are very serious about responding to the spill in the Gulf should be offended by what has been presented" this week by Senate Democratic Leader Harry Reid, said Republican Senator Lisa Murkowski.

Local food trend helps more folks eat fresh fruits, veggies The "local" movement — buying and eating food produced locally rather than shipped from thousands of miles away — has been gaining steam with the steady growth of farmers markets and a phenomenon called community-supported agriculture. CSA members purchase shares of a farmer's crop for the season. The government doesn't track the numbers, but Local Harvest, a nationwide directory of small farms, farmers markets and other local food sources, estimates that tens of thousands of American families belong to CSAs, and supply trails demand. The number registered with Local Harvest alone indicates how quickly CSAs have multiplied over the past decade: The directory's listing has increased from 374 farms in 2000 to 3,660 today.

BANGLADESH: Spreading the floating farms’ tradition CHANDRA (IRIN) - As swollen monsoon rivers and rising sea levels threaten to engulf more land across Bangladesh, NGOs are training thousands of farmers in traditional soil-less farming on water.

Transition model making headway in North County Tina Clark, one of 21 trainers for Transition United States, spoke on July 7 about the Transition model, which is used around the world to help communities prepare for the social and economic changes that will occur as global oil supplies and other natural resources decline in the next century.

Clark told the group of 31 who attended the meeting about how each of us in our own way can help our communities prepare for a world without many of the luxuries that cheaply produced oil makes possible and at the same time replace them with meaningful alternatives.

A Push for Action on Renewables With a cap on carbon dioxide an apparent nonstarter in the Senate these days, some clean energy and climate advocates have shifted their sights to a scaled-back but still ambitious goal: passage of a national renewable electricity standard.

Such a law would require utility companies to produce a set amount of electricity from renewable sources by a certain date, spurring the development of clean sources like wind and solar and probably lowering overall emissions nationally. Perhaps most important, some argue that with a strong push by the president, such a measure could actually clear the high bar for passage of 60 votes in the Senate this fall.

Why is our electrical system resisting open source? A new research report from GigaOm asks an intriguing question.

Why is the smart grid resisting open source?

Canadian researchers hope to green the web, make Canada the world's web server Canadian researchers hope to stem the global IT industry's rampant output of greenhouse gas emissions by perfecting a way to host the Internet's content purely on green power.

And if their experiment succeeds, Canada could essentially become the world's largest Internet server — powered with almost no carbon footprint — and help reduce one of the most significant, growing sources of pollution.

Biofuel Investment in Australia `Inadequate,' Caltex CEO Julian Segal Says Caltex Australia Ltd., the nation’s biggest oil refiner, called for increased government funding to spur biofuels development as part of an effort to curb greenhouse-gas emissions and bolster energy security.

Australia has “inadequate funding” for biofuels, with the government devoting just $15 million to the technology, Julian Segal, chief executive officer of Caltex, said in a speech in Sydney today. The U.S. Department of Energy by contrast is investing more than $1 billion to advance the field, he said.

In China, Pollution Worsens Despite New Efforts BEIJING — China, the world’s most prodigious emitter of greenhouse gas, continues to suffer the downsides of unbridled economic growth despite a raft of new environmental initiatives.

The quality of air in Chinese cities is increasingly tainted by coal-burning power plants, grit from construction sites and exhaust from millions of new cars squeezing onto crowded roads, according to a government study issued this week. Other newly released figures show a jump in industrial accidents and an epidemic of pollution in waterways.

NOAA: Past Decade Warmest on Record According to Scientists in 48 Countries The 2009 State of the Climate report released today draws on data for 10 key climate indicators that all point to the same finding: the scientific evidence that our world is warming is unmistakable. More than 300 scientists from 160 research groups in 48 countries contributed to the report, which confirms that the past decade was the warmest on record and that the Earth has been growing warmer over the last 50 years.

In Memoriam

      Victim of D.C. area storm, a local environmentalist, 'lived what he believed' Seven families who tend the Watkins Pond Community Garden in Rockville gathered Sunday for a picnic and double celebration: to mark their second summer harvest and to thank Carl Henn, the local environmental activist credited with creating their beloved garden.

When dark clouds blew in without warning about 3:15 p.m., the group ran from the King Farm Park picnic area to its cars. Five minutes into the roaring wind and pelting rain and hail, one picnicgoer said, a bright bolt of lightning filled the sky, followed instantly by deafening thunder.

It was only when everyone had emerged after the fast-moving storm passed a few minutes later that they saw Henn lying beneath a towering tree that had a fresh, eight-foot-long gash where lightning had apparently struck, said Dennis McCarthy of Rockville.       Carl Henn was a long time member of The Oil Drum, and the author of this guest post.

Recently, ASPO-USA's newsletter printed an interview (Part 1 and Part 2) with Oil Drum staff member Art Berman (aeberman). Art is a geological consultant whose specialties are subsurface petroleum geology, seismic interpretation, and database design and management. The people doing the interview are members of the "Peak Oil Review Team," abbreviated POR in the text below. This is the shale gas portion of the interview.

POR: Can you give us your latest updated perspective on the shale gas story?

Art Berman: You have to acknowledge that shale gas is a relatively new and significant contribution to North American supply. But I don’t believe it’s anywhere near the magnitude that is commonly discussed and cited in the press. There are a couple of key points here. First the reserves have been substantially overstated. In fact I think the resource number has been overstated.

If you investigate the origin of this supposed 100-year supply of natural gas…where does this come from? If you go back to the Potential Gas Committee’s [PGC] report, which is where I believe it comes from, and if you look at the magnitude of the technically recoverable resource they describe and you divide it by annual US consumption, you come up with 90 years, not 100. Some would say that’s splitting hairs, yet 10% is 10%. But if you go on and you actually read the report, they say that the probable number-I think they call it the P-2 number-is closer to 450 Tcf as opposed to roughly 1800 Tcf. What they’re saying is that if you pin this thing down where there have actually been some wells drilled that have actually produced some gas, the technically recoverable resource is closer to 450. And if you divide that by three, which is the component that is shale gas, you get about 150 Tcf and that’s about 7 year’s worth of US supply from shale. I happen to think that that’s a pretty darn realistic estimate. And remember that that’s a resource number, not a reserve number; it has nothing to do with commercial extractability. So the gross resource from shale is probably about 7 years worth of supply.

For a project that a colleague and I did for a client, I actually went in and looked at all the shale plays and assigned some kind of a resource number to them. I also used some work that was done by Wendell Medlock at Rice University’s Baker Institute. He did an absolutely brilliant job of independently determining what the size of the resource plays in Canada and the US might be.

The resource hasn’t been misrepresented but the probable component has not been properly explained as a much smaller component of the total resource; I guess they just didn’t read the PGC’s report carefully enough. If you take the proved reserves plus the report’s probable technically recoverable number, we have something like 25 years of natural gas supply in North America, which is quite a bit. It’s a lot. I don’t say any of this to give shale gas a bad name.

The other interesting thing about the PGC’s report that nobody seems to pay attention is this: they said there is something like 650 Tcf of potential shale gas. Well, there’s 1000 Tcf of something else. What’s the something else? It’s conventional reservoirs plus non-shale/non-coalbed-methane unconventional reservoirs. So there’s 70 percent more resource in better quality rocks than shale. It just astonishes me that nobody has paid any attention to that.

So that’s the simple view. And then the other thing that we see empirically is that if you look at any of these individual shale-gas plays-whether it’s the Haynesville or the Barnett or the Fayetteville-they all contract to a core area that has the potential to be commercial that is on the order of 10 to 20 percent of the geographic area that was originally represented as all being the same. So if you take the resource size that’s advertized-say for the Haynesville shale, something like 250 Tcf-and you look at the area that’s emerging as the core area, it’s less than 10 percent of the total. So is 25 Tcf a reasonable number for the Haynesville shale? Yeah, it probably is. And it’s a huge number. But the number sure is not 250 Tcf, and that’s the way all of these plays seem to be going. They remain significant. It hasn’t been proved to me yet that any of it is commercial, but they’re drilling it like mad, there’s no doubt about it.

Those are sort of the basic conclusions. And when you look at it probabilistically, which I think is the only intelligent way to look at anything which you have any uncertainty about, what you realize is that the numbers that are being represented by all of these companies as “truth” are probably like the P-5 case, having a 5 percent probability of being true. So they say, “well, our average well in the Haynesville is going to be 7 Bcf,” and I say there will certainly will be wells that make 7 Bcf but there’s no way that the average is that high. My take is that there will probably be 5 percent of wells that will make 7 Bcf.

I just think everybody is caught up in this. I have a slide where I say, you guys need to get over the love affair and get on with the relationship. You keep talking about how big it is and how great it is, but at some point you have to live together and that’s hard work. You have to be honest with yourself and with each other and you have to do some work. I just don’t think we’ve moved past the love affair.

One other important thing is the Barnett shale. We keep coming back to it because it’s the only play that has much more than 24 months worth of history. I recently grouped all the Barnett wells by their year of first production. Then I asked, of all the wells that were drilled in each one of those years, how many of them are already at or below their economic limit? It was a stunning exercise because what it showed is that 25-35% of wells drilled during 2004-2006-wells drilled during the early rush and that are on average 5 years old-are already sub-commercial. So if you take the position that we’re going to get all these great reserves because these wells are going to last 40-plus years, then you need to explain why one-third of wells drilled 4 and 5 and 6 years ago are already dead.

POR: When you say one-third of the wells are already sub-commercial, do you mean they have been shut in, or that they are part of a large pool where no one has sharpened the pencil?

Berman: Some of them never produced to begin with. No one talks about dry holes in shale plays, but there are bona fide dry holes-maybe 5 or 6 or 7 percent that are operational failures for some reason. So that’s included. There are wells that, let’s just call them inactive; they produced, and now they’re inactive, which means they are no longer producing to sales. They are effectively either shut-in or plugged. Combined, that’s probably less than 10 percent of the total wells. But then there are all the wells that are producing a preposterously low amount of gas; my cut-off is 1 million cubic feet a month, which is only 30,000 cubic feet per day. Yet those volumes, at today’s gas prices, don’t even cover your lease/operating expenses. I say that from personal experience. I work in a little tiny company that has nowhere near the overhead of Chesapeake Energy or a Devon Energy. I do all the geology and all the geophysics and there’s four or five other people, and if we’ve got a well that’s making a million a month, we’re going to plug it because we’re losing money; it’s costing us more to run it than we’re getting in revenue.

So why do they keep producing these things? Well, that’s part of the whole syndrome. It’s all about production numbers. They call these things asset plays or resource plays; that reflects where many are coming from, because they’re not profit plays. The interest is more in how big are the reserves, how much are we growing production, and that’s what the market rewards. If you’re growing production, that’s good-the market likes that. The fact that you’re growing production and creating a monstrous surplus that’s causing the price of gas to go through the floor, which makes everybody effectively lose money….apparently the market doesn’t care about that. So that’s the goal: to show that they have this huge level of production, and that production is growing.

But are you making any money? The answer to that is…no. Most of these companies are operating at 200 to 300 to 400 percent of cash flow; capital expenditures are significantly higher than their cash flows. So they’re not making money. Why the market supports those kinds of activities…we can have all sorts of philosophical discussions about it but we know that’s the way it works sometimes. And if you look at the shareholder value in some of these companies, there is either very little, none, or negative. If you take the companies’ asset values and you subtract their huge debts, many companies have negative shareholder value. So that’s the bottom line on my story. I’m not wishing that shale plays go away, I’m not against them, I’m not disputing their importance. I’m just saying that they haven’t demonstrated any sustainable value yet.

POR: How have analysts and investors responded to your studies and your viewpoints?

Berman: My biggest clients, for this kind of talk and work, are investment bankers and investment advisory companies. I gave two talks in Calgary over the last week-one to CIBC and the other to Middlefield Capital. I’ve given multiple talks to energy investment companies. They’re the people who are really paying attention to this. The answer is that a significant portion of the investment banking sector takes what I’m saying quite seriously, but what they do with that I can’t tell you.

POR: How has the gas-producing industry responded to your studies and views?

Berman: The U.S. companies have pretty much chosen to ignore me. Or they’ve made public statements that I’m a kook or I don’t understand or I’m hopelessly wrong. Some them-especially the Canadian companies for some reason-want me to advise them even though my message is not a message that they prefer.

It’s a fascinating process. My sense of it is that the level of interest, and whatever notoriety I have, has only increased. I credit the ASPO 2009 peak oil conference in Denver with really kicking that off. That presentation was a tipping point in awareness about the truth of shale gas reserves and economics. After my presentation, I had almost five hours of discussions with analysts that had attended the talk. Associated Press reporter Judith Kohler published an article -Analyst: Gas shale may be next bubble to burst‖ that was distributed to hundreds of outlets in the national press and that brought this topic into the mainstream. U.S. E&P executives responded with a series of ad hominem opinion editorials and earnings meeting statements that minimized the fact-based positions that were presented at the ASPO 2009 meeting.

Before that, I spent months making presentations to professional societies of geologists, geophysicists and engineers throughout the Gulf Coast. These are colleagues who do the work of the petroleum industry that gave me what amounted to a peer review. I know that there were silent people in those audiences who disagreed with me, but the overall response was supportive and enthusiastic. I also got hundreds of e-mails responding to my World Oil articles that included testimonials about companies’ experience with shale gas wells in the real world.

E&P executives don’t have any such base, nor do they know about this experience. In all of my presentations, I acknowledge people that include some of the most respected E&P CEOs, opinion leaders, and experts on oil and gas price formation, reservoir engineering, economic evaluation and risk analysis. In addition, there are also many industry analysts in research companies, financial advisory and fund management firms, and reporters in the energy press that consult and publish opinions about my position on shale gas.

The point is that I am not alone. I have a large community of supporters with impeccable credentials. I am a cautious and somewhat conservative person in my professional work because I advise clients on high-risk and very large bets on wells and investments. My reputation and future income depends on the credibility of my evaluations and the quality of my research. I do not believe that the same can be said for the CEOs of the U.S. public companies that dispute my findings.

I’m a fairly busy guy, and a lot of people want to hear the story; I talk to Bloomberg and Platts and others all the time. If anything, I feel as if I’m sort of slipping into the mainstream, in a weird way. It’s a scary thought. I’m now asked to participate in august panel discussions, albeit representing the radical fringe; but a year ago nobody even wanted to talk to me.

I don’t know where it’s going. It seems inevitable to me that it is sort of a bubble phenomenon; but bubbles can go on for 25 years or so, even though everyone knows that’s what’s happening. As long a capital markets continue to fund these things it’s going to keep on going. I’m not saying that’s even a bad thing, though I wouldn’t put any money in it, that’s for darned sure.

POR: Back in the 1960’s the phrase “too cheap to meter” was introduced, by some promoters, as being the future of nuclear energy. Over time, the reality obviously didn’t match the hype. It feels to us that there could be a parallel with the recent 100-year-supply statement…

Art Berman: It could be a big denial issue…

POR: Like that early era for atomic power, the shale gas story still seems so new that there are a lot of uncertainties about the shale gas bucking bronco, if you will. How will the industry respond to the uncertainties? How are they responding to the current tough price signals?

Berman: Not at all right now. I had a whole series of talks that I gave last spring called, “North American Natural Gas: Acknowledging the Uncertainty.” That’s all I want people to do. Not that they shouldn’t drill for it or that I’m right; all I’m saying is acknowledge the uncertainty.

A Few Related Links

Art Berman's Presentation at October 2009 ASPO-USA Meeting Shale Plays: A Time for Critical Thinking

Shale Gas Estimates Perhaps Optimistic - An Interesting and Worrying Talk at ASPO by Heading Out, October 2009

More Natural Gas Controversy by Gail the Actuary, November 2009

ExxonMobil’s Acquisition of XTO Energy: The Fallacy of the Manufacturing Model in Shale Plays by Art Berman, February 2010

This is the EIA's Natural Gas forecast from the current Annual Energy Outlook. While shale gas didn't amount to a very large percentage of production through 2008, the forecast they are using is for it to provide a large increase. Without it, US natural gas production would fall.

This thread is being closed. Please comment on http://www.theoildrum.com/node/6789.

The work in the Gulf that is moving toward a more permanent solution to the leaking well beyond the current cap on the well is moving forward at a slow and cautionary pace. In his briefing at 2 pm Tuesday afternoon, Admiral Allen noted that the riser has now been connected between the Development Driller III and the BOP on the relief well. When that pipe is put into place it is full of seawater, and for a variety of reasons it is best that this is replaced with drilling mud of the required density before proceeding any further. (You may remember that it was the reverse of this process that led, in part, to the Deepwater Horizon disaster). Once this process was completed, then the pressure holding the packer in the well so that it sealed against the walls of the well, has been released.

This allows flow down the drill pipe in the well, and then back up through the gap between the drill pipe and the steel and concrete casing of the well that is known as the liner. This gap that the mud will flow through is known as the annulus, and mud will be pumped down the pipe and up the annulus in a process known as circulation, which, because the mud will leave the drill pipe at the bottom of the well is known as “bottoms up.” According to Mr Wells in his later brief, once everyone is sure that the well is in good condition, they will pull the packer. This will likely occur tomorrow, and once that is out of the way and the well recleaned, the final length of casing for the relief well will be run down to the bottom of the well and cemented in place.

Normally this is a job for which Halliburton would be subcontracted (as they would have been contractor for the earlier cementing of the casings higher in the well bore). However, in the brief Admiral Allen became a little coy in regard to who would actually be doing the work. You know I don’t know off ha(n)d but we can find that out and get it to you. You know a lot of these things are done by subcontractors and there are a lot of them that are out there. And they aggregate together to do what their specialty is and we will get that and pass it to you. I just don’t know off hand.
The casing should be in place and cemented by the weekend, at which time the preparations for the static kill will move into performance, with Mr. Wells anticipating that the process could even start late on Sunday night.

Going back to the animation that was used the first time that the top kill was tried, the flow will, this time, include a vessel holding the mud, as well as a vessel with the high pressure mud pumps needed to inject the mud into the well through the choke and kill lines. Here is the initial animation from BP:

This is a link.

I expect that this operation will follow much along the same lines, only the relative locations of the choke and kill lines may be relatively displaced by the changes in circuitry that happened during the oil collection phase of the effort.

There is increasingly less concern over the likelihood of there being an additional leak of oil from this well, into the Gulf, though that does not preclude other accidents from happening elsewhere. As Admiral Allen noted:. . . the Coast Guard received a report that the uninspected towing vessel, Pere Ana C pushing the barge Captain Beauford collided with an oil and natural gas rig in the northern part of Barataria Bay south of Lafitte.

The structure itself is called C117 and that is a state owned well. We have about 6,000 feet of boom around the facility right now, there’s an over flight in progress with Admiral Paul Zukunft and Governor Jindal right now and they are assessing the issues on scene, and will be available to report updates on that later today and out of the JIC and so forth. Subsequently the well was reported to be spouting a mixture of fluids into the air from the unplugged well. Fortunately there are enough resources in the area to deal with the developing problem.

With the time since oil was flowing into the Gulf getting longer, the amount of oil that can be collected from the Deepwater Horizon well is significantly reduced, and so some of the fleet could more easily be made available if needed. The dispersal of the oil does seem to be justifying the decisions of both BP and the various agencies to rely on the dispersant at the beginning of the spill. The longer term effects of the process will not, however, be available for some time.

And in the meanwhile, BP, having agreed to pony up the $20 billion for compensation payments, is making a business charge of $32 billion for the spill, so that, it appears that it will not have to pay taxes on those funds, which will thus cost the taxpayer somewhere around $10 billion. It is, after all, a business cost. But there are also going to be questions raised about how long the funds should pay for damage, if the oil is dissipating, the sands are clearing and the fishing is returning. Obviously, for example, the sand islands being raised along the coast will not be installed in time to be of much benefit for the current problem, given the speed with which the oil is dispersing so does the $0.36 billion being spent on that project reflect the best use of funds? These issues are likely to remain very contentious as we move into the election cycle.

Analysis: U.S. refineries still need to trim capacity (Reuters) - Atlantic Basin refineries remain most at risk for closure as refiners cut more capacity to balance supply with still-weak demand for gasoline and other oil products, but refineries in other parts of the United States are not immune.

The global economy is expected to show signs of recovery in 2010 and oil demand is predicted to grow but key gasoline demand in the world's largest oil consumer is not expected to return to its 2007 peak.

"Refineries at risk are not just in the Atlantic Basin," said Mark Routt, senior staff consultant with the economics unit of Texas-based consultants, KBC Advanced Technologies.

"Small refiners will find it increasingly difficult to compete against economies of scale available to larger rivals. So, too places in Canada and even the U.S. Pacific Coast where there are several refineries are also under pressure."

Gulf of Mexico's Deepwater Oil Industry Is Built on Pillars of Salt Moore, while at Anadarko Petroleum Corp., was one of the earliest geologists to probe beneath the Gulf's salt, helping discover the Mahogany oil reservoir, the region's first producing subsalt field, after burrowing through 3,825 feet of salt in the early 1990s. The productivity of these salt-based fields could prompt a re-evaluation of peak oil's arrival, he said.

"If the volumes are there, this will be a significant addition to the world's resources," he said.

Centrica's East Yorkshire gas storage project on hold Plans for an onshore gas storage facility in East Yorkshire by the British Gas owner, Centrica, have been put on hold.

The company said a lack of clarity over regulator Ofgem's access rights rules meant they were not in a position to proceed with the project at present.

Peak Oil – Who’s Using it all up? However, it is the Indian/Chinese/Japanese bloc which should give rise to sleepless nights. This area is accelerating its oil consumption at ever increasing rates, far higher than North America, Europe and the rest of the world, but has very few oil reserves. Don’t forget, when the Japanese attacked Pearl Harbor in 1941, for them it was a war to secure natural resources in the Pacific, (what US administrations now refer to as “energy security”). Will this same pattern repeat itself?

Second Gulf spill spreads A separate spill has spread to cover about six square miles in the US Gulf of Mexico as oil continues to shoot as much as 100 feet into the air from a damaged wellhead.

Fallout from Enbridge oil spill spreads CALGARY -- As Enbridge Inc. scrambled Wednesday to get a damaged section of oil pipeline in Michigan back into service, it said it will also move to deal with concerns from opponents of its proposed Northern Gateway pipeline to the British Columbia coast.

The Calgary-based company said Wednesday it will be days before it can get the section of the line in Michigan back into service as it begins to assess the cause of the rupture and cleans up crude fouling a river.

Analysis: Oil companies more cautious on storms after Gulf spill (Reuters) - Heightened caution following the BP oil spill is prompting oil and gas producers in the Gulf of Mexico to shut more production faster as storms threaten, exacerbating energy price volatility this hurricane season.

Comparing producers' precautions ahead of storms this year with preparations for more severe storms in previous years indicates that companies are taking tropical threats more seriously, even though predictions of a harsh hurricane season have yet to be borne out.

BP's missed opportunity on executive pay As BP struggles to repair its severely tarnished reputation, analysts say reforming the way it pays senior executives could send a powerful message.

"Compensation for CEOs and other senior managers is the single best way to ensure that a company puts its money where its mouth is in terms of corporate values," said Nick Kalm, president of corporate consulting group Reputation Partners. "BP will have missed a major opportunity if compensation is not tied in a meaningful way to safety."

‘Greenwashing’ no longer enough for businesses For more than a decade, BP had flooded the media with advertisements showing solar panels, windmills and waving fields of grass without a drop of oil in sight. It changed its name, KFC-style, from British Petroleum to BP to de-emphasize its claim to fame: hydrocarbons. The company adopted a stylized green sun as its logo and rolled out the slogan "Beyond Petroleum."

But when the company's Deepwater Horizon offshore well began blowing tens of thousands of barrels of crude into the Gulf of Mexico each day, no outlay of advertising dollars could change the cold, hard facts: The company that had cultivated the greenest image in the oil industry still derived more than 99 percent of its revenues from gas and petroleum. For consumers who had been fed the image of the company out tending windmills, the revelation was almost as shocking as the images of oil-soaked pelicans.

California's clean energy future threatened by federal delays, state officials say The U.S. Department of Energy is accused of foot-dragging in approving loan guarantees to finance several major projects worth an estimated $30 billion.

Botanical Gardens Look for New Lures For the last quarter century, the Cleveland Botanical Garden went all out for its biennial Flower Show, the largest outdoor garden show in North America. With themed gardens harking back to the Roman empire, or an 18th-century English estate, the event would draw 25,000 to 30,000 visitors.

But in 2009, the Flower Show was postponed and then abandoned when the botanical garden could not find sponsors. This year, the garden has different plans. From Sept. 24 to 26, it is inaugurating the “RIPE! Food & Garden Festival,” which celebrates the trend of locally grown food — and is supported in part by the Cleveland Clinic and Heinen’s, a supermarket chain.

“The Flower Show may come back someday, but it’s not where people are these days,” says Natalie Ronayne, the garden’s executive director. “Food is an easier sell.”

Why were resources expunged from neo-classical economics? Something strange happened to economics about a century ago. In moving from classical to neo-classical economics — the dominant academic school today — economists expunged land — or natural resources. Neo-classical value theory — based on marginalism and subjective valuation — still makes a great deal of sense. Expunging natural resources from the way economists think about the world does not.

No friends? It's worse for your health than being fat "For instance, trends reveal reduced intergenerational living, greater social mobility, delayed marriage, dual-career families, increased single-residence households, and increased age-related disabilities," they wrote.

"More specifically, over the last two decades there has been a three-fold increase in the number of Americans who report having no confidant," they added.

"Such findings suggest that despite increases in technology and globalization that would presumably foster social connections, people are becoming increasingly more socially isolated."

A snatch of old song Scything, largely thanks to Simon, is undergoing a renaissance in Britain. Scythes were used here from Anglo-Saxon times right up until the 1940s, initially to mow grass for haymaking and later also to mow cereal crops. They were operated by large mowing teams in the summer months and they were, and are, a terrific example of what used to be called ‘appropriate technology.’ The wooden handles, known as snaths, can be made anywhere there are trees by any competent woodworker, and the blades can be made by any blacksmith. They’re a genuinely pre- and post-modern tool, and will doubtless be around long after the Flymo has faded into legend. Keep the blade honed and peened, and know how to use them, and you have probably the most efficient and effective tool for cutting grass ever developed. This is proven entertainingly year after year at the Somerset Scythe Festival where the annual ‘scythe versus strimmer’ contest is always won by the scythe.

India’s new dams threaten Pakistan’s farming sector The World Bank, which had been a party to the original treaty, appointed a Swiss civil engineer to arbitrate the technical aspects. In 2007, the engineer released his findings. While modifying some of the project’s design, he found technically that India’s argument was sound and ruled in its favour as far as the spillway gates were concerned.

As a result, Pakistan lost its single assurance that India would not manipulate the flow of water. And, now that it had the capability, India used it. To quote a recent article by John Briscoe, a former senior adviser to the World Bank who has worked on water issues on the subcontinent for 35 years: “This vulnerability was driven home when India chose to fill Baglihar exactly at the time when it would impose maximum harm on farmers in downstream Pakistan.”

Michigan oil spill Enbridge’s ‘highest priority’ A serious pipeline leak in Michigan has cast a dark shadow over what would otherwise have been an upbeat financial report from major oil and gas pipeline operator Enbridge Inc. on Wednesday.

The Canadian company said crews are doing their utmost to deal with a spill of about three million litres of oil, which has affected the Kalamazoo River in Michigan.

Top 7 suppliers of oil to the US Really big oil: Where does the US get its crude? Here's what you need to know.

Saudi Aramco Awards Yanbu Refinery Works to Tecnicas, Daelim Industrial Saudi Aramco, the biggest state- owned oil company, awarded contracts at the planned 400,000 barrel-a-day Yanbu refinery in Saudi Arabia to companies including Tecnicas Reunidas SA and Daelim Industrial Co.

Tecnicas Reunidas will do work on the coker unit, Daelim will build the gasoline and hydrocracker units and SK Engineering & Construction Co. will work on the crude unit, Saudi Arabia’s state oil company said today in a statement. Tecnicas said separately it got $700 million contract.

Global lands Pemex pipeline contract US-based Global Industries has won a $40 million contract from state-run Pemex for pipeline work in its Ku-Maloob-Zaap field in the Bay of Campeche.

BP to Pay Estimated $60MM in Advance Payments BP estimates it will pay at least $60 million in advance payments in August to claimants across the Gulf Coast who have lost income or net profit due to the oil spill in the Gulf of Mexico.

BP, which has paid $256 million to date for claims including $30 million in the last seven days, will start making the advance payments by the end of this week. Claimants will receive their check about 30 days after they received their July payment.

Bangladesh and India sign electricity deal DHAKA, Bangladesh (UPI) -- Bangladesh and India signed a power transmission agreement Monday for electricity to be imported to energy-starved Bangladesh.

Initially, 250 megawatts of power would be available to Bangladesh from India, with transmission to start in 2012.

Homeowners face £277 fuel-bill hike: Move towards 'green energy' will come at a price Plans to tackle climate change will add £277 to annual household fuel bills unless consumers give their homes a ‘green makeover’, ministers warned yesterday.

Energy and Climate Change Minister Chris Huhne admitted the massive expansion of wind farms across Britain – along with clean coal power stations – will send electricity and gas prices soaring.

But Mr Huhne claimed that the price increases would be offset by government plans to improve the energy efficiency of millions of British homes.

"Brilliant": Prepare for the fluorescent future In the book you argue that a more brightly lit street isn't necessarily a safer street. Why is that?

There was a big study in Illinois that showed that a reduction of street light reduced the amount of crime; it also increased the amount of crime that happened during daylight hours. We automatically assume that a well-lit street is safer, but I'm not sure if that basic assumption holds. A lot of cities thought stationary oil lanterns would hinder crime when they were first set up, but there were several cities, including Cologne and Birmingham in Britain who refused to put out streetlights because they thought it would aid and abet criminals. Absolute dark isn't safe but neither is absolute brilliance. The more light we have, the more light we feel we need to be safe.

Canning preserves summer's bounty for colder seasons ahead "If you have your own vegetable garden, if you're shopping at farmers markets or if you belong to a CSA [Community Supported Agriculture farm share program], you're going to end up with more than what you need," she says.

What to do with the excess is the subject of "Saving the Seasons: How to Can, Freeze or Dry Almost Anything," a new book Meyer edited for her employer, Herald Press, the mainstream publishing arm of the Mennonite Publishing Network, with offices in the United States and Canada.

Mitsui Says Oil Tanker Possibly Attacked Near Hormuz Mitsui O.S.K. Lines Ltd., operator of the world’s second-largest oil-tanker fleet, said one of its ships may have been attacked near the Strait of Hormuz, deemed by the U.S. to be the most important chokepoint for oil supply.

An explosion, which “may have been caused by an external attack,” occurred at 5:30 a.m. Tokyo time, slightly injuring one of the crew of 31, Mitsui said in a statement. The vessel, M. Star, is on its way to Fujairah in the United Arab Emirates to assess the damage and no oil is leaking, Mitsui said.

Oil dips to near $77 after surprise US supply jump Oil prices dipped to near $77 a barrel Wednesday after a report showed U.S. crude supplies unexpectedly rose last week, suggesting demand remains weak.

...Crude inventories jumped 3.1 million barrels last week, the American Petroleum Institute said late Tuesday. Analysts had expected a drop of 2.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Supplies of gasoline and distillates also rose, the API said.

Oil May Rise Only as Far as $80 Fibonacci Resistance Crude oil, which fell the most in more than three weeks yesterday, remains in a rising channel on technical charts and will continue to face resistance near $80 a barrel, according to Societe Generale SA.

Jeff Rubin: China’s energy consumption a zero-sum game It wasn’t sheer coincidence that last year marked two pivotal events in the world’s vehicle industry. In 2009, China became the largest car market in the world, while in the same year there were four million fewer vehicles on the road in the United States. In a world where the supply of economically viable oil has peaked, or is, at best, growing marginally, driving has suddenly become a zero-sum game.

That means that if millions of new drivers are about to get on the road in China, then somehow millions of other drivers will have to get off somewhere else. Last year, that’s exactly what happened in America for the first time since World War II. And unless T. Boone Pickens is miraculously able to convert the American vehicle stock to natural gas–powered engines, some 40 million other vehicles in the U.S. will similarly be taking the exit lane over the next decade.

Refining Hits 10-Week High as Japan Starts Idled Factories Oil refining in Japan, the world’s third-largest consumer of crude, rose to a 10-week high as producers resume operations after maintenance shutdowns.

China lifts its gas use in first half China’s use of natural gas jumped by 22 per cent in the first half of the year from the previous six months, government figures showed yesterday, propping up a global industry that has seen a supply glut push down prices.

China’s insatiable demand for energy has steered the direction of the world oil market for years but the country’s power industry and manufacturing are now turning increasingly to gas, with a new emphasis on shipping in the fuel from Qatar and other Gulf states. Chinese demand for tanker imports will increase fourfold by 2020, according to a study released yesterday. That could make up for the weaker-than-forecast growth in US demand and a flat outlook for liquefied natural gas (LNG) in Japan and South Korea.

China, India shift to gas for clean growth Asia is boosting consumption of liquefied natural gas (LNG) relative to oil as nations from China to India try to pollute less while driving economic growth.

Shell's Impact in Australian Oil, Gas `Only the Beginning,' Goldman Says Royal Dutch Shell Plc is set to have an even bigger impact in Australia in the next year, potentially joining with Santos Ltd. to develop a gas project in Queensland and selling its refining assets, Goldman Sachs JBWere said.

Chevron in Australia native land title deal for plant (Reuters) - Chevron Corp has signed a preliminary agreement with a group of native land owners in western Australia that will allow it to construct a liquefied natural gas processing plant, it said on Wednesday.

UK gas halts slide as maintenance restricts supply LONDON (Reuters) - Prompt British gas prices were firm on Wednesday as terminal maintenance restricted supply, while forward contracts were mixed on more scheduled North Sea field and pipeline outages and liquefied natural gas imports.

Reliance Profit Growth May Peak on Failure to Raise Gas Output Earnings growth at Reliance Industries Ltd., India’s largest company by market value, may slow from the fastest pace in more than two years as the company falls behind schedule to increase gas production, investors said.

ENI announces energy venture with Egypt MILAN (AFP) – Italian energy group ENI said on Wednesday it had signed an agreement with Egypt on the production and transportation of oil and gas which would raise Egypt's profile as a supplier to the Middle East and Mediterranean region.

ENI and the two Egyptian state-owned oil companies EGPC and EGAS will establish a joint venture and work together on oil and gas upstream activities in Iraq and Gabon, the Italian company said late on Tuesday.

Shell Conducting Repairs at Australia Refinery; Unit Still off After Fire Royal Dutch Shell Plc, Europe’s largest oil company, says it’s carrying out maintenance at its Geelong refinery in Australia, declining to provide details of what units are being serviced.

“The facility is still functioning,” Paul Zennaro, Melbourne-based spokesman for Shell, said by telephone today. The bitumen unit, damaged in a May fire, remains offline and it isn’t known when it will return to service, he said.

Formosa Says 1-2 Weeks Before Two-Thirds of Oil Refinery Online After Fire Formosa Petrochemical Corp., Taiwan’s only publicly traded oil refiner, said it may need one to two weeks to have two-thirds of its Mailiao oil refinery fully operational after a fire damaged a unit three days ago.

Enbridge posts 19% profit rise Canadina pipeline player Enbridge said today that second-quarter operating profit rose 19%, driven by growth in both its natural gas delivery and oil pipeline businesses.

Congress Set to Tackle Oil Spill Liability, Drilling Safety U.S. Senate Democrats are set to unveil a slimmed-down energy bill Tuesday aimed at reforming offshore drilling, but House lawmakers are taking up a tougher bill on Friday that adds another hurdle to get a bill signed into law this year.

U.S. Senate Majority Leader Harry Reid plans to pass a bill before lawmakers leave for their summer recess next week, focusing on holding BP Plc accountable for its massive oil spill. Debate on the Senate bill could begin as soon as Thursday.

U.S. readies criminal probe of oil spill-report (Reuters) - Several U.S. government agencies are preparing a criminal probe of at least three companies involved in the massive oil spill in the Gulf of Mexico, though it could take more than a year before any charges are filed, the Washington Post reported on Wednesday.

BP gets "wake-up call" and $32 billion in spill charges LONDON/HOUSTON (Reuters) – BP Plc's newly named chief executive on Tuesday called the Gulf oil spill a "wake-up call" for the entire industry as the company tallied up its losses and disclosed two U.S. investigations.

Bob Dudley, who will replace gaffe-prone Tony Hayward as chief executive on October 1, said safety would be among his highest priorities as the first American to lead BP tries to refurbish the British oil company's battered reputation.

New CEO Dudley faces daunting task at BP BP has been here before. Hayward himself was named to succeed a predecessor who oversaw a series of safety lapses that culminated in a blast at a refinery in Texas City, Texas, that killed 15 people in 2005.

Now, Dudley will embark on the clean-up of a company saddled with huge liabilities, a broken corporate culture, strained government relations and a badly damaged brand.

'Demonised' BP boss sparks fresh US anger on exit LONDON (AFP) – BP's outgoing chief executive Tony Hayward was the target of fresh US anger Wednesday after claiming he had been "demonised and vilified," threatening efforts to draw a line under the Gulf oil spill.

The comments by Hayward, who resigned Tuesday following his heavily criticised handling of the Gulf of Mexico disaster, drew renewed criticism from Washington as BP struggles to restore its reputation after the spillage.

BP CEO change won't diminish Gulf response: govt HOUSTON (Reuters) – The top U.S. official overseeing the response to BP Plc's Gulf of Mexico oil leak said on Tuesday he doesn't expect the company's commitment to cleaning up the spill to be diminished with its change in leadership.

"I don't see any diminishing of performance or priorities," retired Coast Guard Admiral Thad Allen said of BP's earlier announcement that Bob Dudley, who has been BP's top executive handling the spill response, will replace Chief Executive Tony Hayward on October 1.

Lift 'reckless' oil drilling ban, Gulf residents plead WASHINGTON (AFP) – President Barack Obama's "reckless" moratorium on deepwater drilling in the Gulf of Mexico is suffocating small businesses and destroying livelihoods, lawmakers and residents said Tuesday.

"The decision to stop energy exploration in the Gulf of Mexico appears to have been made in an uninformed manner that borders recklessness," Democratic Senator Mary Landrieu told the small business committee, which she chairs.

X Prize to offer millions for Gulf oil cleanup solution SAN FRANCISCO (AFP) – The X Prize Foundation launches a competition this week promising millions of dollars for winning ways to clean up crude oil from the BP spill in the Gulf of Mexico.

The nonprofit group will hold a press conference in Washington on Thursday to reveal details of an Oil Cleanup X Challenge inspired by the disaster.

Gulf flow has stopped, but where's the oil? NEW ORLEANS – In the nearly two weeks since a temporary cap stopped BP's gusher at the bottom of the Gulf of Mexico, not much oil has been showing up on the surface of the water.

Scientists caution that doesn't mean the crude is gone. There's still a lot of it in the Gulf, though no one is sure quite how much or exactly where it is.

BP Oil Is Dissipating, Easing Threat to East Coast Oil from BP Plc’s record spill in the Gulf of Mexico is biodegrading quickly, probably eliminating the risk that crude will go around Florida and hit the U.S. East Coast, the National Oceanic and Atmospheric Administration said.

Oil has been dissipating through evaporation since BP stopped the flow from its Macondo well off the coast of Louisiana on July 15, NOAA Administrator Jane Lubchenco told reporters yesterday on a conference call. Crude that’s dispersed into the sea is being gobbled up by bacteria, she said.

On the Surface, Gulf Oil Spill Is Vanishing Fast; Concerns Stay The oil slick in the Gulf of Mexico appears to be dissolving far more rapidly than anyone expected, a piece of good news that raises tricky new questions about how fast the government should scale back its response to the Deepwater Horizon disaster.

Gulf spill has not fouled most beaches but hurts tourism The massive Gulf of Mexico oil spill has not fouled the vast majority of the area's beaches but is still scaring tourists away, according to a report to be released Wednesday.

100 Days Into Spill, Gulf Life Forever Changed (AP) A hundred days ago, shop owner Cherie Pete was getting ready for a busy summer serving ice cream and po-boys to hungry fisherman. Local official Billy Nungesser was planning his wedding. Environmental activist Enid Sisskin was preparing a speech about the dangers of offshore drilling.

Then the oil rig Deepwater Horizon exploded off the coast of Louisiana, and in an instant, life along the Gulf Coast changed for good.

Appeals Court Rejects Effort to Create Hybrid Taxi Fleet The Bloomberg administration’s years-long attempt to force the city’s cab owners to switch from gas guzzlers to hybrid vehicles was rejected by a federal appeals court Tuesday morning.

The Court of Appeals for the Second Circuit upheld a judge’s 2009 ruling, in a suit brought by taxi fleet owners, that the city’s rules amounted to an effort to mandate fuel economy and emissions standards, something that only the federal government is allowed to do.

Wind Drives Growing Use of Batteries The rapid growth of wind farms, whose output is hard to schedule reliably or even predict, has the nation’s electricity providers scrambling to develop energy storage to ensure stability and improve profits.

As the wind installations multiply, companies have found themselves dumping energy late at night, adjusting the blades so they do not catch the wind, because there is no demand for the power. And grid operators, accustomed to meeting demand by adjusting supplies, are now struggling to maintain stability as supplies fluctuate.

On the cutting edge of a potential solution is Hawaii, where state officials want 70 percent of energy needs to be met by renewable sources like the wind, sun or biomass by 2030. A major problem is that it is impossible for generators on the islands to export surpluses to neighboring companies or to import power when the wind towers are becalmed.

Is the welfare state in terminal decline? As with cheap oil, we assumed that state services would continue at a certain level for the foreseeable future. Now we are moving into a period where the best of the state's provision may be behind us and, as with our oil reserves, we will be struggling to manage an increasingly scarce resource.

Many people still assume that, once the fallout from the economic crisis has worked through and the economy starts to grow again, things will get back to normal. The concept of the peak state, though, presents a different future.

Doomsday shelters making a comeback Jason Hodge, father of four children from Barstow, Calif., says he's "not paranoid" but he is concerned, and that's why he bought space in what might be labeled a doomsday shelter.

Hodge bought into the first of a proposed nationwide group of 20 fortified, underground shelters — the Vivos shelter network — that are intended to protect those inside for up to a year from catastrophes such as a nuclear attack, killer asteroids or tsunamis, according to the project's developers.

Transition Town Star Rob Hopkins and a group of compatriots decided to help Totnes begin the process of what they call "powering down." Powering down means relocalizing food and energy production, working to transform fossil-fueled behaviors, and increasing the community's capacity to deal with any systemic shocks caused by climate change or disruptions in fuel availability.

And thus the Transition Town movement was born.

China's Environment Accidents Double as Growth Takes Toll China, the world’s largest polluter, said the number of environmental accidents rose 98 percent in the first six months of the year, as demand for energy and minerals lead to poisoned rivers and oil spills.

“Fast economic development is leading to increasing conflicts with the capacity of the environment to absorb” demands, the environmental protection ministry said in a faxed statement in response to Bloomberg questions.

Research ship Akademik Fyodorov leaves for 100-day Arctic expeditn ST. PETERSBURG (Itar-Tass) -- The polar fleet flagship Akademik Fyodorov leaves the port of Arkhangelsk on Wednesday for a 100-day scientific expedition to the Arctic Ocean.

The expedition is launched within the implementation of a major state project, sources at the Arctic and Antarctic Scientific Research Institute told Itar-Tass.

Spread of Deadly Cryptococcal Disease in U.S. Northwest Linked to Global Warming A deadly infectious disease once thought to be exclusively tropical has gained a toehold in the Pacific Northwest, and health experts suspect climate change is partially to blame.

Last week the CDC issued a report warning U.S. doctors to be alert for patients showing signs of a cryptococcal infection.

Cap and Trade is Dead. Long Live Cap and Trade. Hard on the heels of the Senate Democratic leadership’s decision to put aside climate legislation intended to cap carbon dioxide emissions, another carbon-capping precinct was heard from this week.

Debate over China's role in reversing climate change At the Copenhagen summit, did China sink the chance for an international deal to confront global warming, or merely refuse to be bullied by the United States and Europe? One truth underlined by the Copenhagen failure is that if there is to be a climate change solution it will have to be acceptable to China.

Chinese Consider Setting Coal Production Ceiling by 2015 to Cut Emissions China, the world’s biggest polluter, may impose a cap on the country’s coal production by 2015 and enforce energy consumption targets to cut carbon emissions and reduce reliance on fossil fuels.

“There must be a ceiling on coal output in the future, and energy needs can be met with new and renewable energy,” Wu Yin, a deputy director at the National Energy Administration, told the official China Energy News weekly newspaper in an interview. Wu didn’t specify any production targets.

Steve Mohr is a young man who recently received his Ph. D. in Chemical Engineering at the University of Newcastle in Australia. His Ph. D. thesis is titled Projection of World Fossil Fuel Production with Supply and Demand Interactions. We published an article of Steve's earlier, called Forecasting Coal Production Until 2010.

In his thesis, Steve makes projections of future oil, coal, and natural gas production, using approaches he developed that consider both supply and demand for each of these three fuels. He makes these estimates assuming three levels of reserves: low estimate, best estimate, and high estimate. In his analysis, natural gas is the fuel that offers the biggest future potential for energy supply, not coal.

Below the fold, Steve provides a summary of his thesis.

Projection of World Fossil Fuel Production with Supply and Demand Interactions

Historically, fossil fuels have been vital for our global energy needs. However climate change is prompting renewed interest in the role of fossil fuel production for energy. In order to plan appropriately for our future energy needs, a new detailed model of fossil fuel supply is required. It is critical to know whether fossil fuels will continue to be able to supply most of our energy requirements and meet the ever increasing energy demand in the future. This knowledge is essential for identification of possible periods of energy shortage so that alternative energy resources can be utilised in a timely fashion. The aim of this study was to develop a model to predict fossil fuel production for the long term based on historical production data, projected demand, and assumed ultimately recoverable reserves for coal, gas and oil. Also, climate change is an important issue confronting society and it is hoped that the work contained in this thesis will aid climate change modeling by focusing attention on realistic fossil fuel production projections.

The modelling applied an algorithm-based approach to predict both supply and demand for coal, gas, oil and total fossil fuel resources. Total fossil fuel demand was calculated globally, based on world population and per capita demand; while production was calculated on a country-by-country basis and summed to obtain global production. Notably, production over the lifetime of a fuel source was not assumed to be symmetrical about a peak value like that depicted by a Hubbert curve. Separate production models were developed for mining (coal and unconventional oil) and field (gas and conventional oil) operations, that reflected the basic differences in extraction and processing techniques. Both of these models included a number of parameters that were fitted to historical production data, including: (1) coal production in New South Wales, Australia; (2) gas production from the North Sea, UK; and (3) oil production from the North Sea, UK and individual states of the USA.

The combined supply and demand model included the capability that demand and production could be influenced by each other, i.e. if production could not meet demand then future demand for that energy source was reduced. In this study, three options were considered. Firstly, the STATIC option resulted in demand and production acting independently of each other at all times. Secondly, the DYNAMIC option allowed both fossil fuel demand and all fossil fuel production to change from the STATIC situation when there was a difference between the two. Finally, the INDEPENDENTLY DYNAMIC option was an extension of the DYNAMIC situation, but treated each fuel source individually when applying the supply and demand interaction, with both demand and production able to vary.

The model required estimates of Ultimately Recoverable Resources (URR) for coal, gas and oil, where the following definitions were used for each resource:

(1) Coal: anthracite - lignite;

(2) Gas: conventional and unconventional (tight, shale and coal bed methane);

(3) Oil: conventional (API>10o) and unconventional (natural bitumen, extra heavy oil, oil shale).

Following a critical review of the literature, included in this study, three cases were adopted. CASE 1 and CASE 3 being lowest and highest recent estimates, respectively, and CASE 2 being the author's best guess based on the information available. The URR values for CASE 2 were, total (60,800 EJ), coal (19,350 EJ), gas (17,680 EJ) and oil (23,780 EJ).

The supply and demand model was used to obtain future predictions for individual and total fossil fuel production for a number of different scenarios, including CASE 1, CASE 2 and CASE 3 and STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC supply and demand interaction options. The following results were obtained:

Coal: For CASE 2 (based on the author’s best informed guess of URR), peak production year remained constant at 2019 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 212-214 EJ/y. Similarly, for CASE 1 (based on the lowest recent URR estimate), peak production year was the same at 2014 for all three demand-production interaction options. However, for CASE 3 (highest recent URR estimate), there was some variation in the peak production year at 2020, 2019 and 2030 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options respectively. Of interest also, was the projected peak in Chinese production, accounting for well over a third of the total production, occurring between 2010 and 2018, which compares with reported literature values in the range of 2015-2033.

Gas: For CASE 2 (URR best guess), peak production year varied from 2028, 2047 and 3034 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, respectively. The corresponding peak production outputs were 145, 157 and 143 EJ/y. For CASE 1 (lowest URR), peak production year varied from 2019, 2033 and 2026, respectively, for the production interaction options. For CASE 3 (highest URR), the peak year range was much narrower, varying between 2060 and 2062. The overall range of between 2019-2062, was much wider than that reported in most of the literature of 2020 ± 10 years. While it was found that the production of unconventional gas was considerable, it was unable to mitigate conventional gas peaking.

Oil: For CASE 2 (URR best guess), peak production year remained almost constant at 2011-12 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 179-188 EJ/y. Similarly, for CASE 1 (lowest URR), peak production year was the same at 2005 for all three supply and demand interaction options. For CASE 3 (highest URR), peak production year varied only slightly at 2019, 2011 and 2016 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, respectively. The important outcome was that, of all scenarios, the latest peak year was 2019.

This thread is being closed. Please comment on http://www.theoildrum.com/node/6786.

BP does not seem to have gone back to the daily briefings, let alone the twice-a-day ones that were being issued just a couple of weeks ago. Admiral Allen has given permission for the top and bottom kill (through the relief well (RW)) activities to continue. The Admiral also noted that the riser for the RW has been reattached, and the reconnection, removal of the plugging packer, and cleaning of the well is in process. It is estimated that the intersection with the original well will now occur on the 7th August, with the final set of casing being run into the hole this week, and then, after cement injection, the well will WOC (wait on cement) while the cement hardens, and is then checked. In the meanwhile, the undersea valve system is being modified to carry out the static kill that I discussed earlier. (And the leak monitoring has transferred to the BOA ROV 2, which is now showing four leaks.)

Once the flow channel to the well is restored, and the casing set and cemented in the relief well, then the Q4000 will carry mud from the HOS Centerline, driven by pumps on the Blue Dolphin into the riser, and down to the BOP to carry out the static kill. The Admiral currently expects that this will begin on August 2nd. He did note that the plan is still to inject cement into the top of the well, after the mud has killed any pressure differential between the bottom of the well and the reservoir, and thus also stabilized the well.

As the more immediate and visible problems reduce, with this path toward the final sealing of the well, and with future flows from it into the Gulf becoming less likely, the oil on the surface, and that migrating towards the shore is getting less. This will allow the Admiral to redeploy assets. For example it now appears that the risk of oil East of the Mississipi is declining, and that commercial fishing there may reopen before the end of the week, given that

"We're 90 days into this, and I think the data speaks for itself," said Randy Pausina, assistant secretary for fisheries at the Department of Wildlife and Fisheries. "There's been no indication that any seafood is even remotely close to being at any level of concern. Find me the concern and prove it to me."

Sport fishing has already been restarted.

We are now in the most intense driving season of the year, and this is evident, with traffic noticeably heavier on the roads in New England in recent days. SeaCoast Sunday noted in their paper edition on Sunday that occupancy rates in the York area of Southern Maine are over 90% during the week and at 100% on weekends. It is therefore not surprising that gas prices are on the rise, being on average 25 cents higher than this time last year.

We have been fortunate that the weather in the Gulf has not generated that much damage to the rigs and platforms yet this year, and those that were affected by Bonnie are now back in business. But the season is still young, and may yet remind us of our vulnerable dependence on oil.

U.S. Rep. Schauer: Oil spill near Battle Creek largest in Midwest history Marshall Township -- As much as 1 million gallons of oil may have leaked into the Kalamazoo River near Battle Creek in what could be one of the largest oil spills in Midwest history, officials say.

U.S. Rep Mark Schauer, D-Battle Creek, called it the "largest oil spill in the history of the Midwest" in a description to President Barack Obama this afternoon prior to a conference call with the media.

"According to EPA officials, this is the largest oil spill ever in the Midwest," he said. "The EPA is estimating 1 million gallons (spilled). ... This feels like déjÀ vu all over again with regard to what happened in the Gulf."

US, Canada refiners say unaffected by pipe rupture CALGARY, Alberta (Reuters) - The rupture of Enbridge Inc's 190,000 barrel a day pipeline in Michigan has yet to choke off oil to several U.S. and Canadian refineries served by the artery, but it could be lifting prices for some alternative supplies.

Refiners such as Marathon Oil Corp, Suncor Energy Inc, Royal Dutch Shell Plc and Husky Energy Incsaid their plants in the U.S. Great Lakes region and southern Ontario were not hampered by the break of Enbridge's Line 6B at Marshall, Michigan, on Monday.

Crude Oil Declines From 11-Week High After Consumer Confidence Report Crude oil tumbled the most in more than three weeks in New York after the Conference Board reported confidence among U.S. consumers fell, a sign that economic growth and energy demand may be restrained.

Japan, China agree to speed up gas fields talks Japan and China agreed on Tuesday to seek an early conclusion to talks over plans to jointly exploit oil and gas fields in a disputed area of the East China Sea, officials said.

Valero sees refinery runs down 12-13 pct (Reuters) - Valero Energy Corp (VLO.N) said Tuesday its refineries will run between 12.5 and 13.1 percent below their combined capacity in the third quarter.

The 15 refineries, with a combined capacity of 2.78 million barrels per day (bpd), are expected to run between 2.355 million and 2.435 million bpd in the third quarter.

BP Unlikely to Sell Venezuelan Assets to Cover Costs for Strategic Reasons BP Plc, battling to contain the worst oil spill in U.S. history, is unlikely to sell stakes in three Venezuelan joint ventures as it seeks to raise cash to pay for the slick in the Gulf of Mexico, said Richard Obuchi, a professor at the International Energy Center in Caracas.

London-based BP is more likely to keep a presence in South America’s largest oil producer as a base for future expansion, Obuchi said yesterday in a phone interview. The Energy Center is part of the IESA business school.

Best Peak Oil Blogs 1. The Oil Drum – The Oil Drum discusses the future of energy and its impact on our world. They believe that we are near a peak oil point and that current oil production levels cannot possibly match the world’s ever growing energy demand. With original research and calculated conclusions, they aim to raise awareness and persuade people to work towards a common goal.

Russia attacks Iran's verbal assault on Medvedev (Reuters) - Iranian criticism of Russian President Dmitry Medvedev is "unacceptable" and "fruitless, irresponsible rhetoric", the Russian Foreign Ministry said on Monday.

Medvedev told foreign ambassadors on July 12 that Iran was moving closer to the potential to create nuclear weapons.

Chevy Volt priced at $41,000 NEW YORK (CNNMoney.com) -- General Motors announced the final price of its Chevrolet Volt electric car Tuesday afternoon, but it's the lease rate that will probably be most interesting to consumers.

The purchase price for a Volt will start at $41,000. The vehicle qualifies for a $7,500 federal tax credit, for an effective price of about $33,500.

More roadside chargers needed for electric cars NEW YORK — The auto industry calls it range anxiety: Drivers want electric cars but worry they won't have enough juice to make long trips. After all, what good is going green if you get stranded with a dead battery?

It's a fear that automakers must overcome as they push to sell more battery-powered cars. So government and business are taking steps to reassure drivers by building up the nation's network of electric charging stations.

US seeks solar flair for fuels The US Department of Energy has launched an 'artificial photosynthesis' initiative with the ambitious goal of developing, scaling up and ultimately commercializing technologies that directly convert sunlight into hydrogen and other fuels.

Palladium: The Cold Fusion Fanatics Can't Get Enough of the Stuff mong physicists and chemists, cold fusion—nuclear fusion at close to room temperature—enjoys a reputation about on par with creationism. Cold fusion has always been alluring, however, because if it worked, our world energy shortage would be over. Instantly. It would produce loads of energy from, potentially, nothing but water and leave very little nuclear waste to deal with. But it also tempts people precisely because it's been pronounced impossible so many times—there's no better way to make your name in science than by demonstrating something impossible.

Audit: U.S. can't account for $8.7 billion in Iraqi cash BAGHDAD — The U.S. Defense Department is unable to properly account for over 95 percent of $9.1 billion in Iraqi oil money tapped by the U.S. for rebuilding the war ravaged nation, according to an audit released Tuesday.

The report by the U.S. Special Investigator for Iraq Reconstruction offers a compelling look at continued laxness in how such funds are being spent in a country where people complain basic services like electricity and clean water are sharply lacking seven years after the U.S.-led invasion that toppled Saddam Hussein.

Oil spewing from wellhead in Louisiana marsh Adding insult to the Gulf's injury, an oil wellhead ruptured and is spewing oil into a Louisiana marsh, officials said Tuesday.

The oil is shooting up 20 feet into the marsh area, the office of Plaquemines Parish President Billy Nungesser said.

The well is in inland waterways on the border of Plaquemines and Jefferson parishes, about 65 miles south of New Orleans, and in a marsh area not accessible by road.

How the Gulf of Mexico became the nation's 'toilet bowl' Perhaps nowhere is the protracted death of the Gulf Coast more apparent than in Pointe-Aux-Chenes, Louisiana, and other indigenous bayou communities where, decades before the BP oil disaster, the marsh started disintegrating and environmental problems washed in from as far away as North Dakota and New York.

The Gulf of Mexico became, in effect, the United States' toilet bowl -- known for its seasonal "dead zones," high erosion rates, dirty industry, ingrained poverty and, now, for the biggest oil disaster in the history of the country. Compare that legacy on the Gulf Coast with the East Coast, with its wealth, and the West, with its more-sterling record of environmental stewardship.

Richard Heinberg: You Can be a BILLIONAIRE Without Even Trying! What can you do to optimize your chances in the case of hyperinflation, a deflationary economic Depression, an oil crisis, a famine, or a series of horrendous environmental disasters? If you don’t already know, you’d better wise up fast—because some or all of these exciting opportunities are on their way to a neighborhood near you! In fact, one or two may already be tapping you on the shoulder and asking to make your acquaintance.

Pointy-headed intellectuals have been warning us about this stuff for years. Decades. Who cares? Who’s had the time for depressing, worrisome, gloomy, hard-to-understand statistics and graphs? There’s been work to do, money to be made, kids to put through college, new episodes of American Idol to watch.

The End of Capitalism? Part 2A. Capitalism and Ecological Limits The following exchange between Michael Carriere and Alex Knight occurred via email, July 2010. Alex Knight was questioned about the End of Capitalism Theory, which states that the global capitalist system is breaking down due to ecological and social limits to growth and that a paradigm shift toward a non-capitalist future is underway.

Monitor Urges Utilities to Go Slow on Smart Grid Renovations A report by the operations monitor of the North American electricity grid, issued today, raises a large yellow caution flag over climate policy initiatives that would require a massive change in the nation's power and transmission infrastructure.

A task force on climate change formed by North American Electric Reliability Corp. urges that policymakers not count on large amounts of renewable energy, demand reduction from smart grid systems or new storage technologies before they prove they can be worked onto the grid without endangering the system's reliability.

Deep cuts in generators' greenhouse gas emissions require an unprecedented transformation from current generation, says Mark Lauby, NERC's director of reliability assessment and performance analysis.

A cure for the energy crisis Mike Markham used to hold a match under his faucet and light the tap water on fire. He’d get a small blue flame or an explosive orange fireball, depending on the day. “I had to check to see if I still had a moustache,” he says. Markham lives on an 80-acre farm in Fort Lupton, Colo. There are about eight natural gas wells within a few miles of his property, which he says are causing methane gas to migrate into his water.

The problem, which also affected about 100 of Markham’s neighbours who get water from the same aquifer, ended this year when the drilling companies changed pipe infrastructure and introduced filters and holding tanks to remove the gas before it entered household sinks. The aquifer is still contaminated, but local concerns about water quality aren’t going to stop the nearby drilling. That’s life on the front lines of what might be the biggest energy revolution in generations.

Valero CEO says Aruba restart in Sept. if profitable (Reuters) - Valero Energy Corp plans to restart its shut 235,000 barrel per day (bpd) Aruba refinery in September after completing an overhaul currently underway and if the plant can operate at a profit, Chief Executive Bill Klesse said in a statement.

Kyrgyzstan’s energy crisis worsens BISHKEK – Kyrgyzstan might see energy prices go up again. After April’s ouster of then-president Kurmanbek Bakiyev, the new government reduced electricity rates for the population from 1.5 KGS (about 3 US cents) per KWh to last year’s level of 0.7 KGS, pledging no more cyclic power cut-offs or rate increases in the near future.

The Bakiyev government explained the 2009 rate increases as needed to cover an energy industry deficit of 1.4 billion KGS. Those price hikes caused mass protests.

Time For Indonesia To Accelerate Use Of Renewable Energy JAKARTA (Bernama) -- With the impressive rate of its economic growth which leads to a dramatic increase in energy consumption and in an effort to reduce its greenhouse gas emissions, Indonesia has to find renewable energy that would may help reduce reliance on carbon-fueled energy, Antara news agency reported.

It is for that purpose that the Energy Care Society (MPE) on Sunday urged the government and the House of Representatives (DPR) to encourage the use of renewable energy as an alternative to fossil fuel.

Pakistan: PM extends two-day weekend till October 31 ISLAMABAD: Prime Minister Yousaf Raza Gilani on Tuesday extended two-day weekend for government employees till October 31.

The decision to extend the weekend came after a meeting to discuss the energy crisis was held, where all four chief ministers were present.

UK to back wind and nuclear to avert energy crisis Energy secretary Chris Huhne will today set out the government's policy to secure the UK's energy supplies amid warnings of a potential power crisis.

The government will also publish a series of suggestions as to how the UK can meet its commitment to reduce emissions by 80% by mid-century.

China seen quickening hydropower approvals - media (Reuters) - China is likely to expedite approving hydropower projects from the second half of this year, or face missing its ambitious renewable energy target after cutbacks in the past five years, local media said.

ANALYSIS: Wounded oil giant BP heads for uncertain future The April 20 oil rig explosion in the Gulf of Mexico, which killed 11 people and sparked the biggest environmental disaster in United States history, was a 'watershed incident' in BP's 101-year-history, chairman Carl-Henric Svanberg said Tuesday.

But he hopes that the company, whose cash flow and underlying performance remains strong, has turned a corner in the fight to salvage its reputation - and secure its ultimate survival.

FACTBOX - BP sells assets to cover oil spill costs Below are details of the assets BP has agreed to sell, and those that analysts deem likely to be considered for sale or that have been reported to be for sale.

BP should end the oil age early The Gulf oil spill should spur BP to leave Canada's tar sands alone, and focus their energy on renewable power

James Akins, 83, dies; energy expert presaged danger of relying on Mideast oil James E. Akins, 83, who as the State Department's chief energy expert in the early 1970s controversially predicted that growing U.S. dependence on Middle East oil gravely threatened the national economy and was vindicated when nearly all of his predictions came true, starting with the 1973 Arab oil embargo, died July 15 at his home in Mitchellville after a heart attack.

Eliot Spitzer: Two Crises Wasted As we all now know, a crisis is a terrible thing to waste, and here we have wasted two of them. The momentum for change will now fade into the haze of a long, hot summer. Many Americans hoped that the BP leak would finally focus us on generating an energy/climate policy that would deal simultaneously with global warming and our dependence on fossil fuels. That hope has now totally disappeared. Senate Majority Leader Harry Reid announced the end of meaningful reform in the energy arena, and the politics after the midterm elections will make that issue even less palatable.

Australia: Food security plan essential for the national interest While people discuss the threat of obesity in the suburbs and in the seat of power, nobody talks about the threat of global food scarcity. No one in Government seems worried about where the world will source its food or the consequences of shortages. Few are concerned about land being bought by overseas interests, about farmers being driven from the land by low farm gate prices and trade rules which discriminate against Australian growers. In fact, the Labor government in its 2010-11 budget cut programmes for natural resource management and land stewardship in the face of climate change and peak oil.

Selling the Farm, Part I: Does Australia risk losing control of its food resources? Foreign interests including state-owned companies from China and the Middle East are increasingly looking to Australia to secure their food production by purchasing key agricultural assets.

Selling the Farm, Part II: Does Australia need a food security plan? Tasmanian Greens Senator Christine Milne says Australia urgently needs a national food security plan because of the growing danger of foreign takeover of key Australian agricultural assets.

Oil Trades Near 11-Week High; Goldman Says Crude Too Cheap Oil traded near an 11-week high in New York as equities rallied around the world and Goldman Sachs Group Inc. said crude prices are too cheap.

Oil was at about $79 a barrel before a government report due tomorrow that may show U.S. fuel supplies increased last week. Goldman Sachs said futures prices are “significantly” below the level warranted by “fundamentals,” offering buying opportunities for this year and next.

“We expect an average of $92 next year, so on a longer- term horizon prices are too cheap, but not far too cheap,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. “Crude faces some resistance around $80 as although fundamentals are slowly improving they’re not yet strong enough.”

Fuel price hike won't affect consumers: Deora New Delhi (PTI) Ruling out any rollback in cooking gas and kerosene prices, Petroleum Minister Murli Deora today said that the increase was "not that high" and would not affect consumers much.

"What should we rollback? We have increased prices only by Rs 3. If a family uses 5 litres of kerosene in a month, then its expenditure is increased only by 50 paise per day," he told reporters here.

Oil Supplies Falling to Four-Month Low in Survey on Storm U.S. crude oil inventories probably fell to a four-month low last week as imports declined and Tropical Storm Bonnie disrupted production in the Gulf of Mexico, a Bloomberg News survey showed.

Stockpiles fell 1.75 million barrels, or 0.5 percent, in the seven days ended July 23 from 353.5 million the week earlier, according to the median of 11 analyst estimates before an Energy Department report tomorrow. The last time supplies were so low was March 19, when prices averaged $81.46 a barrel.

Natural gas could lead to new Lebanon-Israel war BEIRUT – The discovery of large natural gas reserves under the waters of the eastern Mediterranean could potentially mean a huge economic windfall for Israel and Lebanon, both resource-poor nations — if it doesn't spark new war between them.

The Hezbollah militant group has blared warnings that Israel plans to steal natural gas from Lebanese territory and vows to defend the resources with its arsenal of rockets. Israel says the fields it is developing do not extend into Lebanese waters, a claim experts say appears to be correct, but the maritime boundary between the two countries — still officially at war — has never been precisely set.

Occidental Petroleum Misses Analysts' Estimates on Shortfall in Production Occidental Petroleum Corp., the U.S. oil producer that bought Citigroup Inc.’s Phibro energy-trading unit last year, posted a smaller profit increase than analysts predicted as output fell short of the company’s forecast.

Russia to use space tech to develop energy sector MOSCOW (Reuters) - Russia will employ technologies, initially meant for outer space research programmes, to develop its vast energy sector, Energy Ministry said on Tuesday in yet another sign of the Kremlin's modernisation drive.

The ministry said in a statement it signed a long-term agreement with Russian space agency Roscosmos "to secure effective exploration, production, transportation and usage of the energy resources by employing modern space technologies, products and services".

Total, Novatek Natural-Gas Venture in Russia Risks Losing Siberian License Total SA and Russian partner OAO Novatek may lose a license to develop an Arctic natural gas field in a venture agreed on last year that was green-lighted by Prime Minister Vladimir Putin.

The Natural Resources Ministry’s environmental watchdog put a permit for the Terneftegaz venture on a list for possible early termination, according to its website. The Moscow-based regulator, Rosprirodnadzor, didn’t cite a reason.

Is peak oil imminent? I have just read an article by Brendan Coffey with the title "Has peak oil arrived?" The short answer is "no" since OPEC has ordered its members to shut in production in order to keep up prices. Until the world economy picks up, there will still be a surplus of oil available.

BP replaces CEO and posts $17 billion quarterly loss LONDON (Reuters) – Oil giant BP Plc launched a plan to repair its battered image in the United States on Tuesday, ditching its gaffe-prone chief executive and promising to slim down by trebling an asset sale target to $30 billion.

However, the company, the target of public anger over its Gulf of Mexico oil spill, tempted further ire by denying it needed cultural change and offsetting the costs of the spill, including expected fines, against its taxes.

The tax move will cost the U.S. taxpayer almost $10 billion.

BP Asset Sales Win 58% Premium, Show Potential for More Deals Robert Dudley, appointed as BP Plc chief executive officer today, will sell as much as $30 billion of assets over the next 18 months after the company got a 58 percent premium for fields bought by Apache Corp.

BP plans to dispose of between $25 billion and $30 billion, mainly in oil and gas production, “worth more to other companies than to BP,” the company said in a statement today after it reported a record $17.2 billion second-quarter loss because of the costs of the Gulf of Mexico oil spill.

Activists disable some London BP petrol stations LONDON (Reuters) – Protesters from environmental group Greenpeace disabled some of BP's 50 petrol stations in central London on Tuesday in protest at the Gulf of Mexico oil spill.

Greenpeace said its activists had managed to close down 47 service stations in the capital. BP confirmed 30 had been forced to close temporarily. The company branded the demonstrations an "act of vandalism" and said it would reopen the sites as soon as it was safe to do so.

Conference looks to secure energy future The future of Australia’s energy security is one of the key agenda items at the 2010 Gaseous Fuels conference being held this week.

Hosted by the Society of Automotive Engineers – Australasia (SAE-A), conference delegates are discussing a variety of topics.

However the central theme of many presentations is securing Australia’s energy future by promoting home-grown gas fuels, including liquid propane gas (LPG), compressed natural gas (CNG) and liquefied natural gas (LNG).

India's Nuclear Push: The Conflicts Within After years of years of negotiations and sustained backing from the US government to find acceptance as a global nuclear power, India's plans to go nuclear for a major share of its energy production are in limbo, stalled by the refusal of the Lok Sabha, the country's lower house of parliament, to pass legislation limiting corporate liability in the event of a nuclear accident.

Porsche testing three electric Boxsters in 2011 Porsche has been ramping up its vehicle electrification program, ranging from the plug-in hybrid 918 Spyder concept and the 911 GT3R Hybrid racer to the new Cayenne hybrid that recently went into production. The latest addition to the electric drive program is a trio of experimental Boxsters that are powered purely by electrons.

Bikes and Cars: A Lesson in Los Angeles Attending the Copenhagen climate conference last December, Mayor Antonio Villaraigosa of Los Angeles had a revelation: his own city needed to do more to promote bicycling as a clean form of transportation.

“I’ll tell you what I came away with: that in the area of bicycling, I’ve got to do a better job and the city’s got to do a better job,” Mr. Villaraigosa told Southern California Public Radio.

Last weekend, however, the mayor learned a tough lesson about urban cycling firsthand: cars and bikes don’t mix.

Let There Be Dimmers on Our Glowing Planet America roared into the electric age and didn’t stop to consider what it had wrought until just short of the 100th anniversary of Thomas Edison’s incandescent light bulb.

That’s what Jane Brox, author of “Brilliant,” argues, and she dates that realization not to the 1965 blackout that closed down most of the northeast but to President Nixon’s dictum in the wake of the 1973 energy crisis that all nonessential lighting — holiday lights, advertising, the lights of Broadway — be dimmed. “Something essential had been taken away,” she writes, “something larger than sheer illumination: the assumption that we could live without thinking about energy, that we could take it all for granted.”

Delawares Drinking Water at Risk: At decades-old bait shop, fear erodes a livelihood Decades of spills and accidents have delivered hundreds of thousands of gallons of oil, refining chemicals and plastic residues onto fields that drain toward the run.

In 2006, a federally mandated investigation at nearby Delaware City Refinery found benzene trickling into Dragon Run from its bottom, along with other gasoline additives. Levels of benzene, a known carcinogen, had reached 50 percent of the concentration in some samples that would make the water off-limits for drinking.

"It used to be better and cleaner," Wilmoth said. "Now a lot of people are afraid to even go and catch any fish. They say not to eat this or that. Everyone is sort of scared about the river. The only people who aren't afraid are temporary workers, immigrants. That's mostly who I deal with now."

Voyage Redeems 12,500 Plastic Bottles SYDNEY, Australia (AP) — A 60-foot sailboat built largely from 12,500 recycled plastic bottles docked Monday at Sydney, after four difficult months crossing the Pacific Ocean on a trip meant to raise awareness of the perils of plastic waste.

Brazil Indians free workers at hydroelectric site SAO PAULO – Protesters on Monday released workers from the construction site of an Amazon hydroelectric plant that Indians say is being built on an ancient burial ground.

The Indians initially freed about 100 rank-and-file workers and later the last five senior employees who had been kept inside the Dardanelos plant in the city of Aripuana, national Indian bureau coordinator Antonio Carlos Ferreira Aquino said.

Virginia: Emissions Ruling for Coal Plants Is Reversed A three-judge panel of the United States Court of Appeals for the Fourth Circuit, in Richmond, on Monday reversed a ruling requiring the Tennessee Valley Authority to upgrade emission controls at three coal-fired power plants in Tennessee and one in Alabama.

Texas: Air Quality Decision Is Appealed State officials on Monday appealed the Environmental Protection Agency’s decision to overturn a state air permitting program. The E.P.A. ruled last month that the state’s flexible permit program violated the Clean Air Act, which requires state permits to set limits on each of the dozens of individual production units inside a plant.

Armageddon Wars: Overpopulation Vs. Global Warming When the problem is resource scarcity, companies and individuals have a powerful incentive to become more efficient. It keeps their costs down. Mr. Simon understood this, and it’s the fundamental reason he won the bet.

But global warming is different. The fact that carbon emissions are warming the planet doesn’t make it more expensive to produce those emissions. So companies do not have an ever-increasing incentive to emit less — the way they would if the problem were, say, a lack of oil. Global warming doesn’t solve itself the way that resource scarcity does.

Green machine: Aircon that doesn't warm the planet Maidment is leading a research effort, funded by the UK's Engineering and Physical Sciences Research Council, to investigate more environmentally friendly air-conditioning and refrigeration systems. One option, ironically, is to use carbon dioxide to replace the synthetic HFC refrigerants used in such systems, he says: such gases can have around 4000 times the global warming potential of CO2. Around 2 per cent of the UK's greenhouse gas emissions are attributed to them, says Maidment.

European Climate Exchange site hacked The hackers took the website offline and in a public act of digital direct action posted a message that they aimed would raise awareness about carbon trading as a "dangerous false solution to the climate crisis". Instead the group showed its support of the grassroots activists aiming to oppose the power structures and companies profiteering from the dysfunctional Cap & Trade scheme.

Fiorina backed by coal-mining firms Republican U.S. Senate candidate Carly Fiorina has received about $63,000 in donations this year from Appalachian coal-mining interests, much of the money from an outspoken Ohio mine owner who dismisses global warming as "hysterical global goofiness."

In a cluster of transactions, most of them dated Feb. 4, 64 donors associated with mining in Ohio, West Virginia and other coal-producing states made contributions to Fiorina, who is challenging incumbent Democrat Barbara Boxer.

U.K. Carbon Calculator Shows 80% Emissions Reduction Is Achievable By 2050 The U.K. Department of Energy and Climate Change announced a “carbon calculator” that shows the country’s goal of reducing greenhouse gas emissions by 80 percent in the six decades through 2050 is achievable.

The calculator is an online tool that allows power consumers to gauge how to achieve the necessary cuts by adjusting 34 measures of energy demand and supply, ranging from the temperature of people’s homes to nuclear power generation.

The following is the first of two posts based on a recent paper published under the same title in the journal Environment, Development, and Sustainability. The paper is divided into five sections, and to keep each post succinct, we have divided the paper into two posts. The first post will present the first two sections of the research and the second post will present the last three sections and the conclusions of the research.

Fig. 2. Map of the EROI of corn ethanol production for counties within states that produced at least 1% of the corn harvest in 2005, and biorefinery locations.

Introduction

Over the past decade there has been considerable debate on corn ethanol, most focused on whether it is a net energy yielder. The argument is generally that “if the Energy Return on Investment (EROI) of corn ethanol is positive then it should be pursued. On one side are Pimentel (2003) and Patzek (2004) who claim that corn ethanol has an EROI below one energy unit returned per energy unit invested, and on the other side are a number of studies claiming that the EROI is positive, reported variously as between 1.08 and 1.45 (Wang et al. 1997; Wang 2001; Shapouri et al. 2002; Graboski 2004; Shapouri 2004; Oliveira et al. 2005; Farrell et al. 2006; Wang et al. 2007). Even with numerous publications on this issue, disagreement remains as to whether corn ethanol is a net energy yielder.

We believe that focus within the literature on whether or not corn ethanol yields a positive net energy gain has diverted attention from more fundamental issues. The following is a brief description of some of these issues and how we addressed them in this research.

First, none of the major studies of the EROI of corn ethanol account for statistical error within their analysis. Error is associated with all measurements, and we should expect there to be error associated with EROI as well. Yet each of Farrell et al. (2006), Wang et al. (2007), Patzek (2004), Pimentel (2003), and Shapouri et al. (2002) fail to report even general error statistics associated with their calculation of EROI. Considering that the range of published values for the EROI of corn ethanol is so small (from 0.8 to 1.5) one would expect that even a relatively small amount of error could be meaningful. In response to these concerns, we performed an error analysis for the calculation of the EROI of corn ethanol.

Second, most analyses to date, including those referenced above, use optimal (i.e. Iowa) values for corn yield, fertilizer, and irrigation, despite the fact that each of these have large geographical (as well as other) variation. Because of this they fail to represent the variable nature of corn production across space, and by extension the subsequent variability in the EROI of corn ethanol. Our spatial analysis addressed this issue by examining the impacts of the natural geographic variability of corn inputs and yields on the EROI of corn ethanol production within the U.S.

Methods

We performed four major analyses in this research. The first was a meta-error analysis, in which we quantified the error associated with the calculation of EROI of corn ethanol based on various estimates of the energy inputs and outputs found in the literature. This analysis was based on the five main studies in corn ethanol: Wang et al. (1997), Shapouri et al. (2002), Pimentel (2003), Patzek (2004), and Farrell et al. (2006). The second was a spatial analysis of the EROI of corn ethanol. It is these two items that are discussed in Part 1.

The third was a sensitivity analysis; wherein we assess the degree to which corn yields and co-product credits impact the EROI of corn ethanol. Fourth, we combined the results of our EROI analysis with the data of biorefinery production to assess how much net energy was delivered to society by ethanol in 2009. These items are discussed in Part 2, which is a separate post.

Results

The results from our meta-error analysis indicated that the average EROI for corn ethanol was 1.07 with a standard error of 0.1. The 95% confidence interval was 1.07 ± 0.2. This result is interpreted as follows: there is a 95% chance that the true value of the EROI of corn ethanol is contained within 0.2 of 1.07. Alternatively, this calculation means that we are unable to assert whether the true value of the EROI of corn ethanol is greater than one.

EROI values calculated in the spatial analysis ranged from 0.36 in less optimal corn-growing areas, for example southern Texas, to 1.18 in optimal areas, for example Nebraska (Fig. 2). If we apply the same confidence calculated in the meta-error analysis to the results of the county EROI analysis, we find that none of the counties had an EROI that was high enough (1.20) to conclude that corn ethanol was produced at an energy profit. The average EROI value across all counties was 1.01, which was 0.06 less than the average calculated across the literature. This supports the idea that the literature used optimal values for corn ethanol inputs and outputs and as such has underestimated costs, overestimated benefits, or both. The distribution of EROI values followed a normal distribution skewed slightly left (Fig. 3). The vast majority of counties had EROIs that fell within either the 1.01–1.05 or 1.06–1.10 category.

Our spatial analysis indicated diminishing returns to EROI as distance from the Corn Belt increased. Counties with high EROI values were located in Nebraska and other Corn Belt states, while the lower EROI values were located in counties toward the northwest or southeast of the area analyzed, essentially northwestern South and North Dakota, and southeastern Texas, respectively (Fig. 2). As expected, the counties with EROI values within the top 10% had a combination of higher yields and lower agricultural inputs, while the counties within the lowest 10% of EROIs had lower yields and higher agricultural inputs on average (Fig. 4). We can conclude that even with a precision of ±0.2, 48 counties have EROIs below 1, as the EROI calculated for each of these counties was <0.80 (Fig. 3).

Fig. 3. Histogram of number of counties vs. EROI.

Fig. 4. Average values for spatial agricultural inputs and corn yield for counties with EROI values within the top and bottom 10% of all counties.

An analysis at the state-level indicated a similar geographic pattern, as the Corn Belt states, i.e. Nebraska, Minnesota, Iowa, Illinois, had EROI values in the upper half of the states analyzed and states further from the optimal corn-growing lands were located in the bottom half, e.g. Kentucky, Texas, Missouri. EROIFG (EROI "Farm Gate") ranged from 3.81 to 6.25, while EROIRG (EROI "Refinery Gate") ranged from 0.96 to 1.14 (Table 4). Since much of the costs of the agricultural phase of corn production were constant across all states in this study (i.e. non-spatial), the range in EROIFG reflects the corn yields and fertilizer inputs in different environments rather than differences in the energy cost of planting and harvesting an acre of corn. On the other hand, the small range in EROIRG indicated that the off-farm costs dwarfed the energy costs on-farm. We calculated that 65% of the costs of producing ethanol from corn originated in the biorefinery phase (Fig. 5).

Table 4. Table 4. Summary statistics of the costs and gains of the agricultural phase of corn ethanol production for states that produced at least 1% of the 2005 corn harvest in the United States, ranked by decreasing EROIRG.

Fig. 5. Relative mix of inputs (spatial agricultural inputs, non-spatial agricultural inputs, biorefinery phase) and outputs (ethanol and co-products) of corn ethanol production.

According to Eq. 2, to deliver one liter of ethanol as net energy at an EROI of 1.18 (max found in the spatial analysis), 7.5 liter of ethanol must be produced; 1 liter as net energy and 6.5 liter (or its energy equivalent) to be reinvested to produce more ethanol. If we assume that the average we calculated across all counties (1.01) was the actual value for EROI, then producing ethanol is virtually a zero sum game; i.e. energy produced equals energy consumed.

Equation 2. Gross amount of energy required to deliver one unit of net energy = EROI/(EROI-1)

Applying Eq. 2 to our spatial analysis reveals other interesting results. Eight liters of ethanol must be produced to deliver one unit of net energy in Minnesota, using an EROI of 1.14. Another way, only 13% of the ethanol produced in Minnesota is net energy because the energy equivalent of 87% of the ethanol produced must be reinvested to produce more ethanol. The energy reinvested is in many forms, including, but not limited to, the fossil energy required to generate corn, fertilizer, lime, gasoline, natural gas, diesel, etc. For states with an EROI below 1.0 (Texas and Missouri), the production of ethanol is acting as a drain on the energy system, requiring more energy to produce ethanol than the energy contained in the ethanol product.

The EROI values for counties with biorefineries ranged from 0.64 in Stark, North Dakota, to 1.18 in Phillips, Kansas. Our analysis of 127 biorefineries indicated that of 31.6 billion liters of ethanol produced in the United States, only 1.6 billion liters were net energy (roughly 5%). As a point of comparison, of the 136 billion liters of gasoline consumed in 2009, roughly 122 billion liters (90%) were net energy, assuming that the 136 billion liters were produced at an EROI of 10 (Cleveland 2005). Adjusting for the lower energy content of ethanol (21.46 MJ/L etoh vs. 34.56 MJ/L gasoline = 0.62), we calculated that the net energy from ethanol is roughly 0.99 billion ‘‘gasoline-equivalent’’ liters.

Dividing the net energy supplied to society from ethanol by that from gasoline, we calculated that the supply of net energy to society from ethanol is only 0.8% of that from gasoline (0.99/122 = 0.8%). Thus comparing simply the gross production of gasoline-equivalent liters of both ethanol and gasoline is misleading, as one would conclude that the US production of ethanol is 14% of gasoline consumption (19.6/136 = 14%).

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The “Bonnie” storm has passed, and the different vessels are not only returned to the site, but are already making progress in returning to operations. As Admiral Allen noted on Sunday

DDIII is now running the riser pipe down. They have 67 joints to complete, they've done 39 of those as of about 10:30 Central Daylight time this morning, need about five more hours to do that. They are planning to latch on to the well around midnight tonight. Development Driller II which was – had drill – was involved in drilling the backup well is returning to site and will start running their riser today.

Q4000 is inspecting the yellow pad, that is the control device that's placed subsea to operate the hydraulics. They replaced the valve on that and they plan to install it later on today and then they will begin preparations for the static kill operations.

He also noted that the pressure in the well has now risen to just over 6,900 psi, while the temperature at the BOP remains at 40 deg – suggesting no flow and that well integrity is apparent. The storm has, however, dispersed and moved the oil, and they are resurveying to find where the threats now lie.

He then gave the current anticipated time line for the kill of the well.

The time line is roughly over the next week. We'll return the Development Driller III, run the riser pipe, latch in, pull that undersea containment device, which they call a packer. They're going to need to circulate conditioning fluids through that pipe line to make sure it's ready what they call conditioning a hole and then some time in the next week they'll be in a position to be able to run that (nine and seven-eighths inch) liner which is the critical path right now to moving – to move ahead.

Once that liner is laid, they're going to put cement in and around it. And at that point the two vessels that were supporting the liner operation, one call the Blue Dolphin, the other is called the Center Line will redeploy and hook up with the Q4000.

This is sometime – this will be sometime during the week of 1 August. And they will set up for that to be able to inject the static kill and during that week of August subject to the (inaudible) I'm sorry the containment pipe being installed and cemented in then we will go to the static kill with the Q4000.

Kent Wells has also now released the animation showing how the different kill methods will take place, and interestingly also showed the section at the bottom of the well that shows the different layers of oil bearing rock in the reservoir.

The animation follows along the process in much the way that I described in an earlier post on the bottom kill, which is now scheduled in two parts. As the Admiral noted, the first part is to case the relief well. Once that is in place, and the cement run, then the top kill will start.

Because the well is shut-in, the plan is that the flow to the surface will be reversed. the flow lines are now passing oil and gas to the surface, the circuits will be reversed to return them to their original condition, and then mud will be fed into the well. Because this can be done a little at a time, it will be, and the pressures will be monitored to ensure that, as the well fills with mud, that there are no integrity problems.

Once the well is full of mud, they may try pumping cement into the well from the top (this is shown in the animation), though, because of concerns over flow control, I would suspect that they will not put the cement in until they connect through the relief well, and they will then do a two stage (annulus and then inside the casing) final kill.

And I should note that, contrary to my concern, the leaks that are being shown again now by the HOV ROV1 are no worse than they were before the storm, so perhaps that is not going to be much of a problem going forward.

U.S. Says 27% of Gulf of Mexico Oil Production, 10% of Gas Idled by Storm About 27 percent of crude-oil production in the Gulf of Mexico and 10 percent of natural-gas output is still idle because of Tropical Storm Bonnie, the U.S. government reported.

Oil and gas producers report that one rig and three production platforms remain evacuated, the Bureau of Ocean Energy Management, Regulation and Enforcement said today in a statement on its website. About 428,000 barrels of daily oil production are shut-in, along with 618 million cubic feet of gas.

Russia's Novatek forms Arctic JV with Gazprom Neft (Reuters) - Russia's largest independent gas producer, Novatek, has formed a joint venture with Gazprom Neft to develop several Arctic fields, Novatek said in a statement on Monday.

China First-Half Gas Demand Rises 22% as Output Grows (Bloomberg) -- China, the world’s biggest energy user, consumed 22 percent more natural gas in the first half compared with a year earlier as the country boosted production and use of the cleaner-burning fuel to cut emissions.

Spill puts Obama's oil fund chief on hostile turf BAYOU LA BATRE, Ala. (Reuters) - The man who acquired a solid gold reputation for fixing sticky situations for the U.S. government is facing one of his toughest challenges yet: running BP Plc's $20 billion compensation fund.

Who is Bob Dudley? NEW YORK (CNNMoney.com) -- Talk of the imminent departure of embattled BP chief Tony Hayward has the rumor mill working overtime on the man expected to replace him.

So just who is Bob Dudley?

BP’s Hayward to resign in October Tony Hayward, who became the face of BP PLC's flailing efforts to contain the massive Gulf oil spill, will step down as chief executive officer in October and be offered a job with the company's joint venture in Russia, a person familiar with the matter said Monday.

W.House - BP must clean Gulf, no matter who in charge (Reuters) - BP Plc must meet its obligations to clean up the Gulf of Mexico oil spill, despite any changes among its executives, White House spokesman Robert Gibbs said on Monday.

Latin America: A Blind Spot in US Energy Security Policy For more than a decade, America’s relationship with Latin America could most accurately be described as unfocused engagement, driven by reactions to events or crises at best and benign neglect at worst. Apart from intermittent efforts to secure free trade agreements (NAFTA and CAFTA), combat drugs (Plan Mérida and Plan Colombia), and weigh in—often too late and too sheepishly—to political events (Honduran Presidential crisis or President Hugo Chavez’s saber rattling), the US has failed to engage the nations of resource-wealthy Latin America in any strategic manner.

This lack of attention to our closest neighbors—and some of our strongest allies—is quite alarming given US dependence on Latin America to provide our energy. Currently, more than one-fourth of imported oil comes from Latin America (and almost 50% from the Western Hemisphere). In 2009, the top sources of US imported crude oil (and their percentages) were Canada (21%), Mexico (11%), Venezuela and Saudi Arabia (9% each), Nigeria (7%), Russia (5%), Iraq, Algeria and Angola (4% each), Brazil (3%), Colombia and Ecuador (roughly 2% total). As is widely known, America imports more than 65-70 percent of its energy needs, which means that we are vulnerable to disruptions in the supply chain and to price volatility, which are affected by domestic political and economic conditions in oil-exporting countries upon whom we depend.

Tropical Storm Threat Passes, Operations Resume in GOM Offshore oil and gas operators in the Gulf of Mexico are re-boarding platforms and rigs, and restoring production following Tropical Storm Bonnie. The Bureau of Ocean Energy Management, Regulation, and Enforcement's (BOEM) Hurricane Response Team is monitoring the operators' activities. This team will be activated until operations return to normal and the storm is no longer a threat to the Gulf of Mexico oil and gas activities.

View Is Bleaker Than Official Portrayal of War in Afghanistan A six-year archive of classified military documents made public on Sunday offers an unvarnished, ground-level picture of the war in Afghanistan that is in many respects more grim than the official portrayal.

The secret documents, released on the Internet by an organization called WikiLeaks, are a daily diary of an American-led force often starved for resources and attention as it struggled against an insurgency that grew larger, better coordinated and more deadly each year.

...The documents — some 92,000 reports spanning parts of two administrations from January 2004 through December 2009 — illustrate in mosaic detail why, after the United States has spent almost $300 billion on the war in Afghanistan, the Taliban are stronger than at any time since 2001.

WikiLeaks: More US documents coming on Afghan war LONDON – The release of some 91,000 secret U.S. military documents on the Afghanistan war is just the beginning, WikiLeaks founder Julian Assange promised Monday, adding that he still has thousands more Afghan files to post online.

Interview with Art Berman - Part 2 I personally think the current administration is milking this thing for all the political capital they can. Nobody who’s handling this for them really knows much about the oil and gas business. You have a theoretical physicist running the Department of Energy and I’m sure he’s a very intelligent and high-integrity guy but he didn’t really know anything about drilling or petroleum and I don’t think Salazar is particularly schooled in it. President Obama doesn’t know anything about it. So you have a bunch of amateurs dealing with something that needs a bunch of professionals. Even on the networks and cable news shows, I haven’t seen anybody they’ve brought on who knows anything about it. A lot of interesting people get in front of the cameras and talk: college professors and oceanographers and image analysis specialists and the director of a center for biodiversity-he seems like a real smart guy-but they don’t know anything about drilling operations or petroleum. I don’t say that hyper-critically; it’s just a fact.

Some new rings of power as the Gulf enters a third age The under-fire BP chief executive Tony Hayward’s recent visit to the Middle East may mark a new chapter in the long-running relationship between this region and the supermajor oil companies.

Tullow Discovers ‘Major’ Oil Field Off Ghana’s Coast (Bloomberg) -- Tullow Oil Plc, the U.K. explorer with the most licenses in Africa, discovered a “major new oil field” off the coast of Ghana.

China says ocean cleared of oil 10 days after spill Chinese officials say crude from the July 16 pipeline explosion near the port city of Dalian has successfully been cleaned up. Environmentalists say that, despite the removal of oil, damage is extensive.

Rosneft Second-Quarter Profit Advances 60% on Gains in Production, Prices OAO Rosneft, Russia’s largest oil producer, said second-quarter profit advanced 60 percent on higher oil prices and output.

Five-day week saves millions ISLAMABAD (APP): The five-day week system adopted by the government has saved millions of rupees in fuel and energy costs, besides enhancing efficiency and improving social life of the people, a survey said. The government initially adopted the five-working day week to cut down by 33 percent or 500 MW of electricity in April this year and the results were soon evident.

Analysis: EIA Analyzes Proposed Climate Change Laws On March 29, 2010 the U.S. Senate (specifically Senators Kerry, Graham, and Lieberman) sent a letter to the U.S. Energy Information Agency (EIA) requesting analysis to help them in their consideration of climate change legislation. Three goals were mentioned as the top priorities of this proposed legislation called the American Power Act of 2010 (APA): creating jobs, achieving energy independence, and reducing carbon pollution (in that order).

The EIA responded this month with their findings in a paper titled Energy Market and Economic Impacts of the American Power Act of 2010 (pdf). The EIA's report focuses on the impact that the policy proposals envisioned in the American Power Act of 2010 would have on the decisions of both consumers and producers and the implications of these decisions on the U.S. economy.

Kurt Cobb: Asymmetrical accolades: Why preventing a crisis almost never makes you a hero A friend recently related to me that the quality assurance manager at the pharmaceutical firm he used to work for was an absolute stickler for one thing: There had to be a convincing cleanup procedure for anything anyone proposed to bring into a pharmaceutical manufacturing plant. If it got on the floor or in the air or on the walls or in the production line and it wasn't supposed to be there, there had to be a way to get rid of it completely. Either that or it wasn't coming into the building.

This friend explained that the quality assurance program run by this man was so good that the Food and Drug Administration pointed other firms to it as an example of what they should be doing. So, how did people at the company feel about this man? Well, they didn't really like him. I imagined that to his fellow employees this man must have been like an insect buzzing around their heads--a beneficial insect, to be sure--but a buzzing insect nevertheless.

Turkey: Iran to respond to concerns about nuclear swap deal Istanbul - Iran will respond to concerns about the nuclear swap deal it signed with Turkey and Brazil in May in a letter to the International Atomic Energy Agency (IAEA) on Monday, Turkey's Foreign Minister Ahmet Davutoglu said Sunday.

'Iran notified us that they will submit a letter to the IAEA tomorrow morning,' Davutoglu said after meeting his Brazilian counterpart Celso Amorim and Iranian Foreign Minister Manouchehr Mottaki in Istanbul.

Can sustainable farming really feed us? After a vivid and thoughtful discussion of the organic farming practices and the positive effects of a strong local economy that has in many ways rejuvenated the town of Hardwick, Vermont, the host, Robin Young, asked a pricelessly dense question: “but can sustainable farming really feed us all?” The thoughtless presumption of the question is that unsustainable farming might possibly be a better approach, that we ultimately have any choice but to follow sustainable practices, at least if we wish to sustain our civilization.

The answer I would have liked to have heard is: “but is unsustainable farming really sustainable?”

Growing Shortages of Water Threaten China’s Development With 20 percent of the world’s population but just 7 percent of its available freshwater, China faces serious water shortages as its economy booms and urbanization increases. The government is planning massive water diversion projects, but environmentalists say conservation — especially in the wasteful agricultural sector — is the key.

'Villages' let elderly grow old at home Phinisee, a widow for 40 years, can get around her home on Capitol Hill in Washington, D.C., but she needs help opening jars and reaching things. She can't handle even minor repairs around the house or drive places (she gave up her car in 1993).

That's OK because Phinisee lives in Capitol Hill Village, which began operating three years ago and is the oldest of six such villages in the nation's capital. She calls the village office, and they send her folks who clean her garden, install a railing, fix her windows, bring her groceries or drive her to the bank.

Ed and Margaret Missiaen, both retired and in their late 60s, are Capitol Hill Village members who volunteer. Margaret has cleaned Phinisee's garden. Ed has helped fix her windows.

They're counting on the village to help them when the time comes.

Nuclear experts seek to advance fusion project MARSEILLE, France (AFP) – An explosion in costs has cast a cloud over a multi-billion-dollar nuclear fusion project aiming to make the power that fuels the Sun a practical energy source on Earth.

Delays, rocketing costs and financing problems have hit the International Thermonuclear Experimental Reactor (ITER) whose consortium members start a meeting on Tuesday aiming to get the project back on course.

ITER was set up by the European Union, which has a 45-percent share, China, India, South Korea, Japan, Russia and the United States to research a clean and limitless alternative to dwindling fossil fuel reserves by testing nuclear fusion.

Crude Oil Declines a Second Day on Concerns Recovery Stalling Oil declined for a second day in New York on speculation that the global recovery may stall and crimp fuel consumption.

Crude oil slipped from near its highest level in 11 weeks as European equity indexes pared gains on losses among health- care and food companies. The U.S. economy probably expanded at a slower pace in the second quarter as the trade deficit swelled, economists said before reports this week.

“We are bumping up against resistance again around $78,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “It’s going to take better macroeconomic news or perhaps storm activity in the Gulf of Mexico to spring prices from their narrow trading range.”

Survey: Gas prices barely rose in 2-week span CAMARILLO, Calif. — A survey says the average price of regular gasoline in the United States has gone up in the last two weeks, but by less than a cent.

The Lundberg Survey of fuel prices released Sunday says the price of regular rose slightly to $2.73.

Gulf Storm Drives Gasoline Bets Higher on Refinery Threat Gasoline futures trading rose at the fastest pace in more than four months as Tropical Storm Bonnie, the second of the 2010 Atlantic hurricane season, threatened to disrupt refineries in the Gulf of Mexico.

Chavez Warns of Cut in Venezuela Oil Supplies to U.S. if Colombia Attacks Venezuelan President Hugo Chavez said his country would suspend oil shipments to the U.S. if a military attack were to be launched from Colombian territory.

The U.S. plans to assassinate him and overthrow his government, Chavez said yesterday on state television, citing a letter from a source he didn’t identify. Chavez has used speeches to warn that the U.S. is planning an attack from seven Colombian military bases where it has access, and to denounce alleged assassination plots.

EU to apply pressure on Iran with extra sanctions BRUSSELS (Reuters) – EU foreign ministers will approve tighter sanctions on Iran over its disputed nuclear activity on Monday, with steps to block oil and gas investment and curtail Tehran's refining and natural gas capability.

The measures go beyond sanctions imposed by the United Nations last month and mirror steps taken by the United States in recent weeks to apply extra pressure on Tehran and get it back to negotiations over its uranium enrichment program.

ANALYSIS - Iran oil sanctions will leak (Reuters) - Sanctions on Iran tighten their grip on Monday with European measures to make business with the OPEC member even harder, but no-one expects its oil trade to cease as high profits and energy needs inspire ingenuity.

Sanctions on Iran affect Gulf states The sanctions are expected to disrupt the development of the Gulf region’s biggest shared resource, the giant offshore gas and condensate field known as the North Field in Qatar and South Pars in Iran. It ranks as the largest single conventional hydrocarbon deposit in the world, containing an estimated 310 billion barrels of oil equivalent in total reserves and supports Qatar’s position as the world’s leading LNG exporter.

Tehran Exchange Begins Trading Futures to Attract Investors (Bloomberg) -- The Tehran Stock Exchange, home of the world’s second-best performing equity index, began offering derivatives based on local banks to diversify and attract foreign investors.

Formosa Petrochemical Shuts Down Unit at Mailiao Oil Refinery After Fire Formosa Petrochemical Corp., Taiwan’s only publicly traded oil refiner, said it has halted its 540,000 barrel-a-day refinery at Mailiao after an oil leak triggered a fire at a residual processing unit.

Dalian Port Resumes Operating Two Oil Berths After Explosion Caused Spill Dalian Port (PDA) Co., operator of China’s largest crude-oil terminal, said two oil berths resumed operations after a pipeline explosion caused a spill.

A third berth, capable of receiving 300,000-deadweight-ton crude oil tankers, will restart “in the near future,” the company said in a statement to the Hong Kong stock exchange.

China to buy less LNG: study China could be set to buy less natural gas from countries like Australia in the future.

According to a new study, China is preparing to develop its own huge gas reserves and will import significantly less LNG in the future.

ONGC Said to Plan $5 Billion Spending to Boost Gas Output 60% in Six Years Oil & Natural Gas Corp., India’s biggest energy explorer, plans to spend a record $5 billion to develop gas fields to boost output by almost 60 percent in six years, two people with direct knowledge of the matter said.

Russia May Sell Stakes in Rosneft, Sberbank in Bid to Raise $29 Billion Russia may raise 883.5 billion rubles ($29 billion) to help cover its budget deficit by selling minority stakes in 10 companies including OAO Rosneft, the country’s largest oil producer, the Finance Ministry said.

U.S. official: BP’s Hayward will be replaced NEW ORLEANS — Gaffe-prone BP Chief Executive Tony Hayward — who incensed many on the Gulf Coast by saying he wanted his life back as they struggled with the fallout from the company's massive oil spill — will be replaced, a senior U.S. government official said Sunday.

The official, who spoke on condition of anonymity because an announcement had not been made, was briefed on the decision by a senior BP official late last week.

BP boss expected to quit but new payoff row looms LONDON (AFP) – BP chief executive Tony Hayward is expected to quit imminently with a payoff of up to 18.5 million dollars despite being lambasted over the Gulf of Mexico oil spill, British media reported Monday.

The size of the payoff, which must be agreed by a BP board meeting in London on Monday, risks sparking fresh controversy as the British-based firm battles to rebuild its reputation after the worst environmental disaster in US history.

Voyage to the bottom of an oily sea It's not for the claustrophobic, the seasick or anyone fearful of venturing underwater, but the mini-submarine operated by the Harbor Branch Oceanographic Institute offers an unparalleled glimpse into the potential impact of the Gulf of Mexico oil spill.

Our view on gas tax: Price holds key to ending nation's addiction to oil Two years ago this month, crude oil prices spiked to more than $145 a barrel, driving the price of regular gasoline to more than $4 a gallon and painfully reminding the nation once again how vulnerable it is to the whims of the international oil market.

It's reasonable to ask what policymakers have done in the past 24 months to try to reduce that vulnerability. For that matter, it's reasonable to ask what they've done in the 37 years since the Arab oil embargo, which caused huge lines at gasoline stations, to stop enriching hostile petro-states in the Middle East and elsewhere.

The answer: not nearly enough.

Opposing view on gas tax: Unwise and unaffordable If you think the USA would be better off with a higher unemployment rate, fewer small businesses and less money in family bank accounts, you should support big increases in federal taxes on gasoline and other motor fuels.

Senate Democrats to introduce energy bill WASHINGTON (Reuters) – U.S. Senate Majority Leader Harry Reid will unveil as early as Monday a slimmed-down energy bill seeking to make offshore drilling safer and convert trucks to run on domestic natural gas.

The full Senate could begin consideration of Reid's bill on Tuesday and Democrats would like to pass it by the early part of the following week.

How Soon Will Saudi Arabia Turn To Nuclear Energy? While a growing number of countries have announced their civilian nuclear energy ambitions more than the past twelve months, no other nation is probably to have a lot more of your psychological impact on the nuclear energy picture than Saudi Arabia. We believe the Kingdom’s organic gas and drinking water issues will lead them to nuclear, sooner somewhat than later, possibly as early as this year.

Russia police kill two power plant attackers MOSCOW (Reuters) – Russian police killed two men on Sunday accused of bombing a North Caucasus hydroelectric plant, media reported, just days after President Dmitry Medvedev threatened to sack security officials if there were another attack.

Six masked men, suspected Islamist militants, stormed the Baksanskaya power plant in Kabardino-Balkaria Wednesday, shot dead two guards and set off remote-controlled bombs beside the main generator units, bringing the station to a halt.

Brazil Indians block workers at hydroelectric site SAO PAULO – About 300 Amazon Indians prevented workers from entering or leaving the construction site of a hydroelectric plant that protesters say is on an ancient burial ground, Brazil's official news agency said Sunday.

Indians from eight tribes taking part in the protest are demanding compensation for losses caused by construction of the Dardanelos plant in the southern Amazon city of Aripuana, according to Agencia Brasil.

Brazilian Indians take hostages at Amazon dam site BRASILIA (Reuters) – Brazilian native Indians on Sunday took 100 workers hostage at the construction site of a hydroelectric plant in the southern Amazon region, local media reported.

As many as 400 Indians from several different tribes occupied a power plant they say was built on an ancient burial site.

A sap and his ZAP (1) My story begins a few years ago when I taught a series of classes through the Shasta College Community Education Program before they got wise and quit letting me teach there. They were not well attended but I've had worse. I recall having 5 to 15 in each one. This particular class was one night only and the topic was a bit dark. I called it The End of Oil and showed a film called The End of Suburbia.

I did a PowerPoint presentation on Hubbert's peak and explained that way back in 1956 this geologist named M. King Hubbert predicted that oil production in the United States would peak in 1970, which apparently it did about then.

Exploring Algae as Fuel Foreign genes are being spliced into algae and native genes are being tweaked.

Different strains of algae are pitted against one another in survival-of-the-fittest contests in an effort to accelerate the evolution of fast-growing, hardy strains.

The goal is nothing less than to create superalgae, highly efficient at converting sunlight and carbon dioxide into lipids and oils that can be sent to a refinery and made into diesel or jet fuel.

Engineers race to design world's biggest offshore wind turbines British, American and Norwegian engineers are in a race to design and build the holy grail of wind turbines – giant, 10MW offshore machines twice the size and power of anything seen before – that could transform the global energy market because of their economies of scale.

Smart home meters draw consumer complaints As smart meters become more common in U.S. homes, they are triggering complaints that they're causing an increase -- not a decrease -- in utility bills.

2011 Ford Explorer makes its debut as an evolved SUV DEARBORN, Mich. — It never became a symbol of excess, like the Hummer, but the once wildly popular Ford Explorer had become a relic of days when gas was cheap, housing prices were rising and the idea of driving a big, truck-based SUV to the suburban supermarket was rarely questioned.

But Ford unveils its new-generation 2011 Explorer today in a different world, where unemployment is still painfully high and people are questioning the costs of everything: gas, food, college degrees.

For Hybrid Cars, a Hybrid Invention A company with a different approach to the electric car battery problem got a small boost recently when the Patent Office said it would issue a patent on its concept: using a storage device called a capacitor in conjunction with a traditional battery.

Cities tackle traffic head-on with commuter options MINNEAPOLIS — The morning rush-hour traffic on Interstate 35W is crawling. The highway, which connects downtown Minneapolis and its northern and southern suburbs, is the busiest road in the state. When traffic snarls here, backups spread across the region.

A year ago, Peggy Birler, 45, would have been right in the thick of it, spending up to an hour driving alone to work. Today, Birler has a much shorter commute: She drives less than a mile to a Park & Ride lot, boards a bus for a 10-minute trip downtown, zipping along in a bus-only lane, then walks 1½ blocks to her office.

Paper Mate has biodegradable pens for back-to-schoolers It may be less crucial for your kids to have Iron Man or Hannah Montana's images on their back-to-school supplies this fall than it is to have a currently far cooler word stamped on the stuff: biodegradable.

More than a decade after recycled paper started to become a serious factor in the $55 billion back-to-school market, the new buzzword for 2010 appears to be biodegradable (i.e., an item that will decompose in soil or in your garden compost pile).

Peak Oil and Climate Change: Between Too Soon and Not Soon Enough We are going to burn all of the oil and coal we have, because their benefits as energy sources are concrete, immediate, and local, while their costs are gradual, delayed, and global.

Not to put too fine a point on it, but when facing similar choices, humankind has never chosen the more long-term view.

Gift Economy (1) - Reconceiving The Market The show this week looks at the gift economy. We look at a range of reasons to challenge the cynical, capitalist view of the human as 'red in tooth and claw', listening to evidence from speakers including Alfie Kohn, Genevieve Vaughan & Jeremy Rifkin.

The Ecological Crisis is an Economic Crisis is an Energy Crisis The world crisis is economic, ecological, and energy-based. Liberals want the state to regulate business and have a "new New Deal" to rebuild the economy and ecology. It won't work. Revolutionary anarchists want a new, ecological, economy which is democratically planned, produces for need not for profit, and is a decentralized federalism.

The Right and the Climate The Seventies were a great decade for apocalyptic enthusiasms, and none was more potent than the fear that human population growth had outstripped the earth’s carrying capacity. According to a chorus of credentialed alarmists, the world was entering an age of sweeping famines, crippling energy shortages, and looming civilizational collapse.

It was not lost on conservatives that this analysis led inexorably to left-wing policy prescriptions — a government-run energy sector at home, and population control for the teeming masses overseas.

Social conservatives and libertarians, the two wings of the American right, found common ground resisting these prescriptions. And time was unkind to the alarmists. The catastrophes never materialized, and global living standards soared. By the turn of the millennium, the developed world was worrying about a birth dearth.

This is the lens through which most conservatives view the global warming debate.

Modern cargo ships slow to the speed of the sailing clippers Container ships are taking longer to cross the oceans than the Cutty Sark did as owners adopt 'super-slow steaming' to cut back on fuel consumption.

Four Ways to Kill a Climate Bill IF President Obama and Congress had announced that no financial reform legislation would pass unless Goldman Sachs agreed to the bill, we would conclude our leaders had been standing in the Washington sun too long. Yet when it came to addressing climate change, that is precisely the course the president and Congress took. Lacking support from those most responsible for the problem, they have given up on passing a major climate bill this year.

California: Climate law adds jobs to state payroll The state's landmark global warming law has yet to create the promised bonanza of green jobs, but it has boosted payrolls in another sector of the economy: state government.

At a time of budget cuts and state worker furloughs, the state agency primarily responsible for regulating global warming has bulked up its staff as it prepares to enforce AB 32, the climate change law signed in 2006 by Gov. Arnold Schwarzenegger.

Arctic may be ice-free by 2050: Russian expert Media reports say Moscow and Washington are discussing cooperation in Arctic at the highest political level. Russia and Canada would also soon start negotiations on the integration of their national space systems to monitor the Arctic.

Anatoly Shilov, Deputy Chief of the Federal Space Agency, said Russia would spend USD 2 billion for the creation of multipurpose space system Arktika (Arctic) to monitor climatic changes and survey energy resources in the Arctic region.

An icy retreat The fact that it was sometimes warmer at our measurement site at the West Coast of Greenland than it was in Central Europe at the same time surprised us quite a bit. However, some recent studies indicate that such a distribution of relatively high temperature in parts of the Arctic and relatively low temperature in Northern and Central Europe and parts of the US might become somewhat more wide-spread in the future. While the Arctic has always shown large internal variability that lead to large-scale shifts in weather patterns, in the future the ongoing retreat of Arctic sea ice might cause those weather patterns to occur more often that allow for Northerly winds to bring cold air from the Arctic to the mid-latitudes. Hence, it is quite possible that because of the retreat of Arctic sea ice, some smaller parts of the Northern Hemisphere will experience pronounced cold spells during winter every now and then. The mean temperature of the Northern Hemisphere will nevertheless increase further, and the export of cold air from the Arctic of course leads to warm anomalies there.

This thread is being closed. Please comment on http://www.theoildrum.com/node/6780.

Because of the number of comments, this is a second copy of this thread. The previous one can be found at http://www.theoildrum.com/node/6775.

With Tropical Depression Bonnie dissipating, the slow process of getting all of the boats back in place and workers back to work is now beginning. Much of the discussion at Admiral Allen's press conference on Saturday, however, was about the expected impact of the Bonnie. NOAA Administrator Dr. Jane Lubchenco was present to explain the impacts. She indicated she expected a number of positive benefits of the storm:

• It will spread the surface slick out and thereby lower oil concentrations.
• It's expected to break tar patches and tar mass into smaller tar balls which means faster weathering and faster natural biodegradation.
• It will also cause more natural dispersion again lowing the concentration of oil in the water and making it more available to the natural bacteria that are in the water that do this natural biodegradation.
• Some waves generated by Bonnie may act to flush the beaches and redistribute oil and tar balls that are on the beaches. Some of those tar balls may be dispersed, some may move back out to sea. In some cases, the beaches may look cleaner as a result of this redistribution.

Dr. Lubchenco wouldn't quite go as far as say that she expected the storm to be a net benefit, though. She said it would depend on where you are. Some places might be better, but others might be worse. In some places, oil might be pushed farther inland, although with little storm surge, this would be a relatively smaller problem. The storm wouldn't have any impact on the deep oil mixed with the water.

Admiral Allen mentioned that it had been possible to keep two vessels on the scene, so they were able to be with the ROVs overnight. Thus, they were able to continue monitoring pressure readings. Pressure readings continue to slowly rise (6,891 psi at midnight last night), showing evidence of integrity at the well head.

New Oil Spill Containment System Planned by Chevron, Conoco Phillips, ExxonMobil, and Shell

I thought I would shift gears and show some information about the new oil spill containment system that the four other major oil companies are working on, which you have probably read about in the news.

The information I am quoting and the image are from the Containment System Fact Sheet. Further information is available on a Press Release.

According to the Overview:

This system offers key advantages to the current response equipment in that it will be pre-engineered, constructed, tested and ready for rapid deployment in the deepwater Gulf of Mexico. Its primary objective is to fully contain the oil with no flow to the sea. The system will be flexible and adaptable. It will be responsive to a wide range of potential scenarios, deepwater depths up to 10,000 feet, weather conditions and flow rates exceeding the size and scope of the current spill. Once constructed, the system components will be fully tested to ensure functionality and will be maintained in a state of continuous operational readiness. In the event of a future incident, mobilization to the field will start within days and the system will be fully operational within weeks.

Subsea components:

• A newly designed and fabricated subsea containment assembly will create a permanent connection and seal to prevent oil from escaping into the water.

• The assembly will be equipped with a suite of adapters and connectors to interact with various interface points such as the wellhead, blowout preventer stack, lower marine riser package and casing strings, including any well design and equipment used by the various operators in the Gulf of Mexico.

• The assembly will be designed to prevent hydrate formation and blockage.

• Capture caisson assemblies will also be built for use if required to enclose a damaged connector or leak outside the well casing. Once installed, these assemblies will create a seal with the seabed to prevent seawater from entering the system.

• The oil would be captured by the subsea containment assembly and flow through flexible pipe to a riser assembly. Riser assemblies are made of a seabed foundation, vertical pipe, buoyancy tanks and a flexible pipe specifically configured to connect to the capture vessels.

• The subsea system will be supplied with the necessary hydraulic / electric controls and chemical injection (such as hydrate inhibitors) through an umbilical.

• A manifold will distribute the oil from the subsea containment assembly to multiple riser assemblies if more than one capture vessel is necessary.

• Riser assemblies and umbilical will be designed to quickly disconnect from capture vessels so that all subsea equipment stays in place in the event of a hurricane. An additional system component will be available to inject dispersant into the subsea containment assembly if required.

There are also surface vessels, which I won't describe. The fact sheet indicates that the initial investment is expected to be approximately $1 billion. The new system is targeted for completion within 18 months. ExxonMobil has been designated to lead the engineering, procurement and construction of the system components. The companies behind this endeavor will form a new non-profit organization, the Marine Well Containment Company (MWC), to operate and maintain the system.

Previous talks in this series can be found by clicking on tech talk, in the tags, or at the top of the "Home" screen.

Earlier I have written about the large amount of coal that was often left to hold the roof up while miners excavated the coal from rooms offset from main tunnels, with the rooms themselves being extended to create an intersecting set of passages. But even where the pillars left between the original tunnels are later removed as the mine retreats the working faces back towards the main shafts and exits, a significant amount of coal can be left.

About 250 years ago this was a clear problem in the Shropshire coalfields of the United Kingdom. At that time underground mining was usually carried out by crews of men and boys, where the coal was first removed by undercutting the coal seam manually with a pick, to a depth of about 3 ft. The bulk of the coal was then broken down to this slot and the fragments (ideally about 4-inches in size) were shoveled and hand-loaded into pit tubs, to be hauled away. A good day's work was about 20 tubs, and I have described this method and how it evolved, in earlier posts.

However, even as early as the 17th century (Economic Development of the Coal Industry 1800 – 1914 Brian R. Mitchell p 71), a different method of mining began. At first it was known as Shropshire mining because of where it started, but it later became known as “longwall mining”. The advantages, even then, of the technique were obvious. They included a greater percentage of larger coal (easier to sell), simplicity of working and ventilation, better roof control and a greater production of coal from the workforce, perhaps as much as 30% higher. In particular it was a cheaper method of mining and it allowed a much higher level of production from an area by concentrating the activities of the miners, and focusing the transport.

I just came across the book that appears to have been the first proposal for the more modern version of its use. (The Miners Guide – being a description and illustration of the principal mines of coal and ironstone in the counties of Stafford, Salop, Warrick and Durham”, by Thomas Smith 1836). And so I thought I would begin this short sequence on longwall mining with a description of how the technology first evolved, from that book.

The method was one that gradually evolved from initial headings that were mined by two separate working teams, the first being the holers and the second the brushers..

When the coal was of good quality, and high, then the process was to undercut the coal to a depth of 3-ft, with a man being able to undercut a length of about 22.5 ft a day. He would then cut vertical cuts to the same depth along the edge of the heading, which in the illustration below would be about 30 ft wide – depending on coal and roof quality. There were a group of these men who initially worked the face, and then moved on. They were followed by the brushers, whose job would be to break out the bulk of the coal from the face, and load it into tubs. They would also support the roof with timber props, as this was needed and the coal was removed. This was conventional room and pillar. But it left a lot of coal in the pillars.

Plan view of room and pillar or "on the square" mining.

Initially it was in thinner coal seams that “the long way” was developed as a way of getting almost all the coal out.

First, as with conventional mining, gate roads are dug out to the edge of the property (back in those days this was about 300 to 600 feet) with the direction going down the dip of the seam from the shafts at A and B, which are about 20 ft apart and some 7 ft in diameter. These roads were 6 - 9 ft wide and full seam height. Air passages or thirls were driven between the gate roads to help ventilate them as they were driven (the “a” passages). Cross-connecting tunnels between the gateroads were then driven, near the edge of the property.

In those days it cost around 0.35 to 0.4 English pounds (Ep) per yard, with workers being paid 0.225 Ep per day including candles and drink. The thirl would cost around 0.15 to 0.2 Ep per yard to drive. (An area up to 60-ft in diameter would be left unmined around the shaft area to hold it up).

Once the edge of the property had been reached then a section of the mine, some 90 ft long, would be mined with six miners each taking some 15 ft and holeing the coal. This was undercutting the face, to a depth of 3 ft, over each stint, and it would take a day, with the each miner also cutting a vertical slot at the edge of his section, so that it was held only by the coal at the back of the panel. The sections were mined on either side of the gate roads, moving towards the common middle of the “panels” being mined.

The holers were then finished in that section and moved to a different section, and a second set of miners mined out the rest of the coal, known as brushing the coal to the 3-ft depth. At the same time, since they were removing all the roof support they would put in timber props to hold the roof up, and would also construct small pillars or cogs, that were made from stone, fine coal, and other refuse, when they felt they were needed. In this way the white strip shown in the diagram below, at the back of the mine was extracted first, with the sections progressing first laterally out to the adjacent gate roads, and then back towards the shaft. While it takes 6 men to hole the 90 ft face, it would take only 3 men to brush and cog it. (And they would use small charges of gunpowder to help if the coal was not easily broken out). The difference from conventional room and pillar can be seen in the small size of the cog pillars that were left, as mining progressed. In this case, from one gate road to the next, with the mining face parallel to the gateroads and retreating from one to the next.

Plan view of Shropshire mining> The mining faces were parallel to the gate roads, and the dotted lines show the way that the tracks would be laid to get the tubs in and out.

Wooden tracks were laid along the gate roads, and then bent to pass along behind the face, to allow a horse and boy to collect the tubs as they were loaded, and then to replenish the men with empties. The costs for this method of mining, which was known as broaching, was given as:

(note that there are 12 pennies (d) in a shilling (s) and 20 shillings to an English pound of the period. And an English pound is now worth roughly $1.50). At that time the market for coal was such, that the mine owner would expect to get the following for the coal (with the price based on size).

A profit, at best, of just under 0.10 Ep per day, per working section.

The technique was still quite dangerous, since the expanse of roof that the miners worked under got larger as the excavation moved away from the gate roads, and the cost of moving rock and dirt into the workings to build the cog pillars would have been significant (as would the time taken to assemble them).

Thus a new method was proposed, and the initial description is as follows:

For getting out the coal by long work, the pits A and B are sunk, as in the other case, at a distance of six or seven yards from each other; and the main gate roads driven to the boundary of the work at C and D, properly thirled with the openings for temporary use. From the ends of the main gate roads branches are cut, at right angles, to E and F, along the boundary line of the proposed area to be cleared, so that the mine may be said to be headed in the form of a Roman T, the roads E C, and D, F presenting the faces of the coal, which are to be worked homewards, or towards the pits. Simultaneously with the traverse gate roads, an air head ef is driven at a distance of three or four yards, with its thirls, which are closed in succession as the work proceeds. . . . . .The necessary roads and heads being completed, the work of getting commences; in order to which, the miners hole one yard under along the entire faces of work EC and DF which may be each from 50 to 100 yards in length according to the extent of the area to be cleared. Cuttings are then made at proper distances, to the height of five or six feet, or to a convenient parting, and the coals are brought down, turned out and drawn away along the gate roads. Cogs or pillars are then constructed of the waste and slack, to support the upper measures.

The holeing and cutting then proceed another yard in width, and then another; still clearing away the coal and supporting the roof with cogs, till the lower measures are drawn out, to the width, along the under face of 8 or 10 yards. By this time the over-hanging measure have, by their gravitating force (sic), sunk and bedded themselves on the cogs, pressing them down to a sort of continuous floor of what is called gob, or compressed and compacted slack. This is assisted by the use, as experience may dictate, of timber, which is taken away when the working of the stage above commences.

This is the first description I have found for what we now call longwall mining. By turning the mining face so that it advanced into the solid and away from the opening left, the overlying roof was able to bridge over the working area. This considerably improved roof control, and made it a much safer method of mining. In presenting the method the author notes that the cost of large coal, using room and pillar mining, which is the top method described, worked out to be around 0.118 Ep per ton mined. When the costs were worked out for the long way, the mined cost was found to be 0.105 Ep per ton, giving 0.013 Ep (3.25d) benefit.

However the increase in the volume of coal produced (and thus the royalty yield per acre) doubled to 2,046 EP per acre.

At the time that the book was written, it was a method just beginning to be developed, and the presentation was as much a proposal as a description of something in place. How it turned into the most productive of underground mining methods, in the course of the following 180 years will take another post or two to describe.

The old pocket watch that I used as a prop for my talk on peak oil to a group of elderly people in a countryside church. It was made in 1946 - the date and the name of the owner are still engraved on the back. When I arrive, the friend who has invited me tells me that he is sorry, but the room where they usually have these meetings is not available today. So, they have arranged my talk in the church. Will that be all right? I say that it will be all right, of course. It will be the first time I give a talk in a church but, why not? So, my friend takes me inside, where they have arranged the benches in a semi-circle. I will be speaking standing in front of the altar; as if I were giving a sermon. But, again, why not?

As I stand there, people start arriving. Not that I expected a crowd, but it is a sizeable number for a small countryside parish: about 20 people. I didn't expect to see anyone young, either; after all it is a Saturday afternoon and the young people have other things to do than to listen to my talk. Myself and my friend are the only ones in their 50s, it seems. Most of the others seem to be well in their 70s ore even in their 80s. Old couples, several old ladies alone. My friend had alerted me: they are people of the parish who have formed this group where they try to learn about energy and sustainability. They are also cultivating a vegetable garden on the parish's land.

Before we start, the priest comes to greet us. He thanks me for having accepted the invitation and he says that we should say a little prayer before starting. I think that the last time I prayed in church must have been when I was - perhaps - twelve years old. But I can't think of a reason why I should not join. We all hold hands together, in a circle, and we say a Pater Noster .

And here I am, in front of these good people. There is no way to show them slides and - even if there were - it would not be the way of speaking to them. Clearly, they are not interested in long lists of oil reserves or in details on future production. But I had suspected what I was going to face and so I am prepared. I take up the old pocket watch that I had taken with me. I show it to them. "It is an old watch," I say. "It belonged to Swiss man. I know that because there is his name engraved inside. You see? " I open the watch, showing to them the engraving inside. "There is a name and a date. This watch was made in 1946."

I continue, "I never met the owner of this watch, but I know who he was. He was a Swiss industrialist who had a hat factory in Florence. He must have liked Italy, because he got old here and he died here; in the 1970s. But it was also because Italy was less expensive than Switzerland and the salary of workers was lower. Some things never change over time; companies go where workers cost less. So, my grandfather used to work for this man, and my aunt took care of him when he was very old and sick. This watch was, I think, a gift of this man to my aunt; and so I have it now. You see, it is a a rare model. It has an internal alarm; it was not common at all to have this feature in a pocket watch. But the owner was a businessman and he probably travelled a lot and stayed in hotels. So, he needed a watch that was also an alarm clock. It is a nice object; I like it a lot and I use it sometimes, not very often because I am afraid of breaking it. But it still works very well."

I look around me. The old people seem to be fascinated. They are old enough to remember that kind of watch and the times when a watch was an expensive object. They are from a generation when you would get your first watch as a gift for the solemn occasion of your first communion.

I keep going. "These watches were not cheap at their time but you didn't need to be rich to have one. A friend of mine has one of these pocket watches that belonged to her grandfather. Not so fancy as this one, of course, but a good watch anyway. And her grandfather was a peasant of the Appennini mountains. He was not rich but he could afford a pocket watch. Today we think that a cheap watch is something that is made in China, costs very little and you throw it away after a few years, when you are tired of it. But are we sure that it is the way a cheap watch should be? What is that makes something cheap or expensive? Of course, it is the work that you need for making it and the materials that you need to make it. This watch that I have here doesn't contain expensive materials: it is only steel, glass and a little enamel, that's it. Its cost would be mainly for making it - paying the watchmakers, that is. So, it was expensive, especially if it was a bit fancy, like this one. But then it would last for a long time and so it made sense to make a little investment in something that you would keep for many years. Even a peasant could do it and this is the reason people had their name engraved on the rear of their watch. It was made to last."

They are listening. I know that they are thrifty and the idea of a watch that lasts a long time makes sense to them. I continue: "Now, think of a modern watch: it takes very little work to make it; it doesn't have all the delicate gears that are inside one of these old watches. But the problem is that a modern watch uses a lot of rare materials that have to come from far away. The battery, for instance, uses a metal called lithium that comes from Bolivia and it is rare. And there is a microprocessor inside, probably has gallium in it. Gallium is another rare metal - very, very rare. There are no gallium mines; gallium is just an impurity of aluminium. And, for the display, you need indium - another rare metal. You probably never heard of these names, but we are using elements of which there is a very small supply on this planet. So far, they haven't been so expensive, but there is not an infinite amount of them. Then, of course, the case of the watch, the strap and other components are made in plastics which is made from crude oil. And to make a watch like this one takes energy. Energy comes mainly from oil and every time we throw away a watch, to make another one we need to use more energy and to dig out more rare materials. And this is a problem because there is not an infinite amount of stuff that we can dig out of the ground."

From then on, it is easy. They are fascinated by the story of crude oil and they listen with great attention when I tell them how it is found, extracted, transported, refined and transformed into many things; from fuel to plastics. I don't tell them much about peak oil; I just mention it in passing. But it is not difficult for them to understand that oil resources are not infinite and not even abundant any more. They were born in a world where nothing was really abundant; a world in which everything had to be used sparingly. I try not to scare them, of course. I tell them that they should try to make up their own minds; "Don't just trust me but try to see all what is happening in light of what I said. Don't you think that these difficult times we are seeing could be due to the fact that mineral resources are slowly running out?" They nod. It makes sense to them.

I look at the time on the old pocket watch: I have spoken for just a little more than half an hour. So far, I didn't see anyone sleeping or distracted, but old people tend to tire rapidly, so it is better to close. I finish my talk with some more considerations on mineral resources and there come the usual applauses.

There comes the time for questions. They are a little shy, but a lady raises her hand. She is probably the youngest in the audience - in her early 60s, I'd say. She says "Professor, we enjoyed very much your talk and I can understand the problems you told us about. But, in practice, what should we do about it?"

I expected this question. I make a point not to tell people what they should do in my talks - not normally, at least. It think it is not so polite; I mean, who am I to tell other people what to do? But if they ask me, well, then I can give my opinion. So, I say, "You see, I speak sometimes to young people. For them, what I told you is very important and also very worrisome. They have to plan ahead for a world in which many things will not be so abundant as they had grown accustomed to. They will see enormous changes during their lifetime and they'll have to adapt to them, starting from scratch. In our case, well, we are not so young any more and we might tend to ignore these things. The world will change; sure, we see it changing already, but what we have done is done, and we can't restart from scratch. So, what can we do?"

I sort out again my old watch, "You see, this old watch is still working, more than 70 years after it was made. Whenever I look at it, I feel a kind of kinship to the man who left it to me. I am grateful to him because he left me something that still works, that I can use and that I like. And I think he may be happy, too, if he looks at us from above, that his old watch is still appreciated by someone in this world". I pause for a moment to look upwards, as if I were seeing the ghost of the old Swiss man. The people in the audience do the same. There is only the roof of the church, up there, but - who knows? - maybe the owner of the watch is really watching us from above.

I continue. "Now, for myself I think I would like to do something similar - to leave to those who will come after me something that they may use, that will be useful to them. I would like to leave something that lasts a long time and that doesn't need precious resources that can't be replaced. Something 'sustainable' as people say. Of course, I am not saying that we should go back to this old way of making watches - although, who knows? - But, surely, there are things that we can make which are sustainable and that will last a long time. Think of a wind turbine; you have surely seen them. They are big mechanical things, mostly made out of steel; like this watch. If they are well kept and maintained, turbines they can last many decades, like this watch, and why not a century or more? And they can produce good energy for all that time. That is true not just for wind turbine. Solar plants can last a long time and you can insulate your home in such a way that it doesn't need much energy to heat or cool. If you do that, I am sure that the people who'll live in it after you will be happy about what you did. There are many big things that you can do if you are rich and many small things that you can do even if you are not rich. I am sure that you can think of something you can do, and if we leave this kind of things to our descendants they may forgive us for having misused so badly of the mineral resources of this planet." They all nod. They are thinking about what they can do. I can't say whether they'll be really able do something, but they might.

I finish my talk pointing at one of the windows of the church. I say, "and a vegetable garden is sustainable as well, as the one I have seen when I came here." They smile. One of the old men says, "Yes, we are cultivating it. The young ones don't care too much about it." I say, "They'll learn and they'll be happy that you left it to them." They all smile. Then we all leave for a snack in a room nearby; with food that comes from their garden.

Questions Now, for myself I think I would like to do something similar - to leave to those who will come after me something that they may use, that will be useful to them. I would like to leave something that lasts a long time and that doesn't need precious resources that can't be replaced. Something 'sustainable' as people say. . . There are many big things that you can do if you are rich and many small things that you can do even if you are not rich. I am sure that you can think of something you can do, and if we leave this kind of things to our descendants they may forgive us for having misused so badly of the mineral resources of this planet. 1. What can we leave to our descendants, that is sustainable?

2. Are there ways that we can build things to last longer?

3. Older folks and younger folks sometimes travel in different circles. Are there ways we can learn more from those with years of experience in gardening and other needed skills?

Worsening electricity shortages fuel growing crisis Global electricity demand is growing again after a lull last year related to the economic slowdown.

The result is more countries face electricity shortages.

This is not just a matter of insufficient fuel or high energy prices as the world has a glut of natural gas, the fuel of choice for thermal power generation.

Instead, it mainly reflects poor government planning and neglect of essential infrastructure. It also reflects the accelerated urbanisation of the developing world, which has become a hallmark of the 21st century.

Recovery strains electricity grid Electricity demand is rising once again as the world recovers from the worst economic slowdown in decades.

A return to levels of demand unseen since early 2008 spells problems for many countries that failed to make adequate preparations for the predictable follow-up to the sharpest decline in energy consumption on record. See also: Round-up of global electricity developments

UAE firms adopt energy-saving solutions With utility bills in UAE for commercial buildings rising by over 50 per cent in the last two years, more and more companies are adopting energy-saving solutions to cut down their costs and carbon emissions, said an expert.

It is the financial as well as environmental issues that are driving energy-efficient lighting solutions, observed Anita Mathews, exhibition director of Middle East Electricity, which takes place at the Dubai World Trade Centre on 8 to 10 February 2011.

Iraq’s volatile north still a powder keg WASHINGTON — As US troops withdraw from Iraq, a large swath of the oil-rich north coveted by the Kurdish regional government remains a powder keg that threatens to explode in violence, experts here say.

EU to hammer Iran with oil sanctions BRUSSELS — The European Union will hit Iran with tough sanctions against its vital oil and gas industry on Monday in a bid to lure Tehran back to the negotiating table over its disputed nuclear programme.

EU foreign ministers will formally approve the sanctions following Iran’s repeated refusals to halt sensitive nuclear activities, which the West fears are aimed at building a bomb.

Iran launches nuclear fusion program, says atomic energy chief Tehran, Iran (CNN) -- The head of Iran's nuclear energy agency announced Saturday that the country had launched a "serious" nuclear fusion research program, according to state-run Press TV.

Ali-Akbar Salehi, the chief of the Atomic Energy Organization of Iran (AEOI), said as many as 50 scientists were participating in the research to break into alternative energy, Press TV said.

BP set to being drilling off Libya TRIPOLI, Libya (UPI) -- British oil company BP confirmed Saturday it would begin a deepwater drilling program off the coast of Libya in a matter of weeks.

Israel's gas take even lower than thought, Knesset study finds The Israeli government takes one of the smallest percentages of revenues from natural resources in the world - only 32%, compared with the average 53% among other Western countries with similar fiscal regimes, the Knesset Research and Information Center said in a report published over the weekend.

Relief well vessel returns to oil spill site New Orleans, Louisiana (CNN) -- The vessel that engineers are using to drill a relief well was back on site near BP's ruptured deepwater well on Sunday. However, officials said storms could continue to thwart containment and cleanup efforts.

"We're going to be playing a cat-and-mouse game for the remainder of the hurricane season," retired U.S. Coast Guard Adm. Thad Allen told reporters Saturday.

Hayward departure from BP called imminent LONDON — Chief executive Tony Hayward's departure from spill-plagued BP appears imminent, British media reported.

While a company spokesman told Reuters Saturday that Hayward still has the full backing of BP's board, industry insiders said Hayward may announce his departure by Tuesday, when the oil giant releases its six-months earnings report.

How crisis PR hasn't kept up with the turbulent times A veritable deluge of crises since 2008 has shown that crisis PR is no longer up to the job. The BP oil spill, Apple's Antennagate, the fall of Goldman Sachs, Toyota's Great Recall, the sexual travails of Tiger Woods, the trysts of Al Gore, the loose lips of Gen. Stanley McChrystal -- all these combustions would have been fixed, in the good old days of 2007, with a call to Burston-Marsteller or Sitrick and Co. The accepted wisdom was that you didn't want to be on the other side of a Mike Sitrick counterattack. Crisis PR wasn't just effective, it was feared.

But the new crisis paradigm is spinning hopelessly in the dark. By mid-2010, the stories were changing too rapidly to control, much less to revise. Like a violent postmodern vortex, the bad news sucked down all who struggled to escape it. Unsurprisingly, the Internet is to blame. But the phenomenon goes beyond the 24/7 news-and-comment cycle. It forces the PR world to confront something far more disruptive -- and something that will undercut its $700-an-hour fees.

New Study Shows Positive Effects From Marcellus Shale Drilling CHARLESTON -- It's an industry often criticized for its negative impacts. But now, a new study says natural gas production in the Marcellus Shale region -- if developed -- could create 280,000 new jobs and add $6 billion in new tax revenues to local, state and federal governments.

The study was just released by the American Petroleum Institute.

Oil Democracy - Government of Ghana, By GNPC For the Chinese The Petroleum Agreement (PA) gave Ghana 10% initial stake that is free of charge. In addition, Ghana has 5% in royalties – also free. Next, Ghana gets to collect 35% taxes for being the host country. Finally, Ghana has a paid interest of 2.5%. That is called a paid interest because for Ghana to enjoy the benefits of that percentage, it has to pay 2.5% of all developmental costs leading up to production and thereafter. Even that Ghana cannot pay. We are relying on the very people whom we are damaging to pay that for us so that we can reimburse them when the oil starts flowing.

Small N.Y. hamlet gets big train-car contract NEW YORK (CNNMoney.com) -- The town of Elmira, an upstate New York community that once prospered during the manufacturing boom, got a spot of good news Friday.

A total of 575 jobs are coming to the small city, after Amtrak awarded an Elmira-based company a contract to build 130 new train cars.

Tesla Electric Cars: Revved Up, but Far to Go The sedan fits five adults as well as two children in rear-facing seats, Mr. Musk said, and could drive halfway across the country between breakfast and bedtime. It would, he said, be on the road in 2011. Tesla already had a factory lined up and hundreds of millions of dollars in financing on the way from the Energy Department.

Today, production of the Model S hasn’t even begun. Some critics doubt whether the sedan can actually transport seven passengers. And Mr. Musk concedes that driving halfway across the country would take at least 16 hours at a rather heady average speed of 75 miles an hour — not including stopping at swapping stations that Tesla has yet to build to change a heavyweight battery that will have, at best, a 300-mile charge.

Ethanol-free gas running on fumes Drivers seek stations selling conventional fuel, paying more to get better mileage. But those outlets are getting hard to find.

Huhne Backs Wind Turbine Increase Energy Secretary Chris Huhne has paved the way for a controversial increase in wind turbines to prevent the UK suffering a power crisis.

A Deutschland disconnected from its Volk For the German renewables technology mission masters however, aiming for the clean energy high ground at a global scale is rather different from the view from the ground at home, in the streets of Berlin's suburbs and its middle-class housing enclaves, where a steadily ageing population is struggling more with every passing year to make ends meet.

Babysitters for backyard chickens PORTLAND, Ore. (CNNMoney.com) -- You've heard of cat-sitters, dog-sitters and, of course, babysitters. But chicken-sitters?

In Portland, Ore., a city known for its deep do-it-yourself streak and poultry-permissive laws, two backyard farmers have stepped up to meet an unusual need: watching hens when their owners go on vacation.

The Risks Of Fiddling American Empire provides bread, circuses, and all the toys we (think we) need, stolen from other countries and future generations. I can understand why people are reluctant to abandon the empire. In exchange for inhabiting a cubicle, you get to harvest the fruits of empire while avoiding any steps toward self reliance. You get to shower in the morning, kibitz at the water cooler with your friends, flirt with the hot thirty-something in the next cube, and dine on Thai take-out. What’s not to like, especially if, like most Americans, you couldn’t care less about the people we oppress to do your bidding or the costs to the living planet?

Immorality aside, there is a risk. The risk comes in two flavors. One flavor is the opportunity cost of abandoning the empire too soon. The other flavor is the bitterness that comes when you realize you waited too long to abandon the empire, and you are suffering and then dying as a result. And surrounded by a bunch of ugly boxes we call suburbia, no less.

It's A Race To Failure Between Rogue States And Global Oil Output Dwindling global oil supplies are leaving the world ever more reliant on a group of unstable countries – many of which are themselves facing major domestic problems right now.

Believe it or not, many of the world’s major oil exporters cannot maintain their own domestic energy requirements. Venezuelan consumers endure electricity blackouts of “seven or eight hours a day,” but less well known is the situation in the Middle East, where residents are facing rolling power outages just as summer temperatures soar, and with it, the demand for air conditioning.

China questions review of controversial carbon program A Chinese government fund has told a U.N. panel it supports project developers that earn carbon offsets under a lucrative Kyoto Protocol program, and rejects the idea that they are overcompensated.

New Map to Help Calculate Antarctic Ice Loss High-resolution satellite images and newly developed computer software have enabled NASA researchers to create the most accurate map to date of the snaking line that marks the edge of the ice sheet covering much of Antarctica.

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With Tropical Depression Bonnie dissipating, the slow process of getting all of the boats back in place and workers back to work is now beginning. Much of the discussion at Admiral Allen's press conference on Saturday, however, was about the expected impact of the Bonnie. NOAA Administrator Dr. Jane Lubchenco was present to explain the impacts. She indicated she expected a number of positive benefits of the storm:

• It will spread the surface slick out and thereby lower oil concentrations.
• It's expected to break tar patches and tar mass into smaller tar balls which means faster weathering and faster natural biodegradation.
• It will also cause more natural dispersion again lowing the concentration of oil in the water and making it more available to the natural bacteria that are in the water that do this natural biodegradation.
• Some waves generated by Bonnie may act to flush the beaches and redistribute oil and tar balls that are on the beaches. Some of those tar balls may be dispersed, some may move back out to sea. In some cases, the beaches may look cleaner as a result of this redistribution.

Dr. Lubchenco wouldn't quite go as far as say that she expected the storm to be a net benefit, though. She said it would depend on where you are. Some places might be better, but others might be worse. In some places, oil might be pushed farther inland, although with little storm surge, this would be a relatively smaller problem. The storm wouldn't have any impact on the deep oil mixed with the water.

Admiral Allen mentioned that it had been possible to keep two vessels on the scene, so they were able to be with the ROVs overnight. Thus, they were able to continue monitoring pressure readings. Pressure readings continue to slowly rise (6,891 psi at midnight last night), showing evidence of integrity at the well head.

New Oil Spill Containment System Planned by Chevron, Conoco Phillips, ExxonMobil, and Shell

I thought I would shift gears and show some information about the new oil spill containment system that the four other major oil companies are working on, which you have probably read about in the news.

The information I am quoting and the image are from the Containment System Fact Sheet. Further information is available on a Press Release.

According to the Overview:

This system offers key advantages to the current response equipment in that it will be pre-engineered, constructed, tested and ready for rapid deployment in the deepwater Gulf of Mexico. Its primary objective is to fully contain the oil with no flow to the sea. The system will be flexible and adaptable. It will be responsive to a wide range of potential scenarios, deepwater depths up to 10,000 feet, weather conditions and flow rates exceeding the size and scope of the current spill. Once constructed, the system components will be fully tested to ensure functionality and will be maintained in a state of continuous operational readiness. In the event of a future incident, mobilization to the field will start within days and the system will be fully operational within weeks.

Subsea components:

• A newly designed and fabricated subsea containment assembly will create a permanent connection and seal to prevent oil from escaping into the water.

• The assembly will be equipped with a suite of adapters and connectors to interact with various interface points such as the wellhead, blowout preventer stack, lower marine riser package and casing strings, including any well design and equipment used by the various operators in the Gulf of Mexico.

• The assembly will be designed to prevent hydrate formation and blockage.

• Capture caisson assemblies will also be built for use if required to enclose a damaged connector or leak outside the well casing. Once installed, these assemblies will create a seal with the seabed to prevent seawater from entering the system.

• The oil would be captured by the subsea containment assembly and flow through flexible pipe to a riser assembly. Riser assemblies are made of a seabed foundation, vertical pipe, buoyancy tanks and a flexible pipe specifically configured to connect to the capture vessels.

• The subsea system will be supplied with the necessary hydraulic / electric controls and chemical injection (such as hydrate inhibitors) through an umbilical.

• A manifold will distribute the oil from the subsea containment assembly to multiple riser assemblies if more than one capture vessel is necessary.

• Riser assemblies and umbilical will be designed to quickly disconnect from capture vessels so that all subsea equipment stays in place in the event of a hurricane. An additional system component will be available to inject dispersant into the subsea containment assembly if required.

There are also surface vessels, which I won't describe. The fact sheet indicates that the initial investment is expected to be approximately $1 billion. The new system is targeted for completion within 18 months. ExxonMobil has been designated to lead the engineering, procurement and construction of the system components. The companies behind this endeavor will form a new non-profit organization, the Marine Well Containment Company (MWC), to operate and maintain the system.