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OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

General discussions of the systemic, societal and civilisational effects of depletion.

Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby kublikhan » Fri 10 Jul 2015, 18:30:23

2010 is pretty old so you use 2009 data instead? :) Anyway, this report is from 2014. Hopefully it's more to your liking. It examines changing crude blends from a mostly arab blend with an API of 31 to a mostly LTO blend with an API of 46. As expected, the diesel cut was reduced. But the difference was small. The gasoline:diesel ratio changed from 1.5:1 API 31 to 1.6:1 API 46. This is still much better than the old ratio of 2:1 when refiners were trying to optimize gasoline production. Note that this paper is based on utilizing current assets. IE, not making the large capital investments needed for higher diesel cuts. You might want to skip to page 15:

Refiners today face ever increasing demands to optimize current assets and operating expenses in order to maximize profitability. This paper attempts to explore some of the opportunities and challenges associated with shale crudes, aka tight shale oil.

Several case studies were run to show the impact of changing crudes. The total crude rate was kept constant at 150 MBPD. The base case crude consisted of 75 MBPD of Arab Medium, 39 MBPD of West Texas Intermediate and 36 MBPD of Maya. In case 1, the crude was changed to 113 MBPD of Bakken and 37 MBPD of Western Canadian Select. In case 2, the crude was 113 MBPD of Eagle Ford and 37 MBPD of WCS. The lighter Eagle Ford crude resulted in a higher crude blend API of
46.2°.

Case 1: Replacing crudes with Bakken/WCS
The first case evaluated the impact of changing to a lighter, less expensive crude blend of 75% Bakken and 25% WCS. The cost of the crude blend was reduced by $5.36/bbl, and the API increased from 31.3°API to 37.3°API. The lighter crude resulted in a higher percentage of LPG, LSR, with similar kerosene, diesel, but lower atmospheric residue cuts.

Case 2: Replacing base crude with EagleFord/WCS
In case 2, Bakken was replaced with the lighter Eagle Ford crude, increasing the blend API from 37.1° to 46.2°.

Product_ Unit Base Case1 Case2
Gasoline MBPD 84.6 86.4 83.2
Diesel__ MBPD 55.3 52.7 51.1
G/D___________ 1.5 1.6 1.6
Products $/BBL Base +$5.8 $2.76

UOP’s key LP findings when processing tight oils (Higher API’s):
 Lower crude price is the key economic driver
 Increasing API, increasing light Naphtha (C5/C6)
 Diesel Production decreases
 Isomerate and Reformate octane-bbls increase in gasoline pool.

SUMMARY
This case study demonstrated that existing refinery configurations can be optimized to process a new crude diet consisting of tight oils and increase profitability. Profitability can be increased further when employing the latest high yield catalysts.
OPTIMIZING NAPHTHA COMPLEXES IN THE TIGHT OIL BOOM
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby Pops » Fri 10 Jul 2015, 19:49:39

kublikhan wrote:In case 1, the crude was changed to 113 MBPD of Bakken and 37 MBPD of Western Canadian Select. In case 2, the crude was 113 MBPD of Eagle Ford and 37 MBPD of WCS.


Thanks for the link, but, uh: isn't that what I said?
Pops wrote:All new additions can be accounted for by tar sands and LTO from north America, ditto the falling price. Distillate increase is because of x-heavy & tar sand; and LTO makes the gasoline and lighter stuff.


Point being, we haven't peaked, because we've begun to replace cheap conventional with tar that costs a lot and ramps slowly and LTO that costs a lot and looks to ramp fast here but maybe not elsewhere.

Peachy for right now, especially for the US, but not so much for everyone else and not forever.
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby kublikhan » Fri 10 Jul 2015, 19:53:26

Yeah I wasn't disagreeing with you. I thought you might want to see the results of actual crude runs being done with various blends from a recent report.
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby Pops » Fri 10 Jul 2015, 19:55:12

kublikhan wrote:Yeah I wasn't disagreeing with you. I thought you might want to see the results of actual crude runs being done with various blends from a recent report.

Gah!

I was just getting warmed up!

:-D
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby ralfy » Fri 10 Jul 2015, 22:10:48

"Charts showing the long-term GDP-energy tie (Part 2 – A New Theory of Energy and the Economy)"

http://ourfiniteworld.com/2015/02/05/ch ... e-economy/
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby kublikhan » Fri 10 Jul 2015, 22:59:39

"Charts showing the long-term GDP-energy decoupling:"

Continuing declines in energy intensity – the broadest indicator of improving energy efficiency across the economy – lead to a marked widening in the gap between GDP and energy consumption.

This reflects the end of the phase of rapid growth in energy demand in developing Asia, centred on China, driven by industrialization and electrification. Slower economic growth and an accelerated reduction in energy intensity* (as economic growth becomes less dependent on heavy industry) play roughly equal parts in explaining the slowing of energy growth.
BP Energy Outlook 2035

2014 in review

Global primary energy consumption decelerated sharply in 2014, even though global economic growth was similar to 2013. Global primary energy consumption increased by just 0.9% in 2014, a marked deceleration over 2013 (+2.0%) and well below the 10-year average of 2.1%. Growth was significantly below the 10-year average for Asia Pacific, Europe & Eurasia, and South & Central America.
BP Statistical Review ofWorld Energy
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby kublikhan » Sat 11 Jul 2015, 00:55:57

Before worrying about others, perhaps you should worry about your own digestion problems pstarr:

kublikhan wrote:
pstarr wrote:Earth to Kub and ennui3: we've peaked.
During the last 10 years(2005-2015), world crude oil production increased from 73,866,000 bpd to 79,570,000 bpd. An average annual increase of 570,000 bpd.


kublikhan wrote:
pstarr wrote:We are still in a world recession.
According to the IMF, there have been four global recessions since World War II, beginning in 1975, 1982, 1991 and 2009, respectively. This last recession was the deepest and widest of them all. Since 2010, the world economy has been in a process of recovery.


kublikhan wrote:
pstarr wrote:The [housing] glut is way worse than you can imagine.
That crash is housing starts you highlight has led to a situation where housing starts have been well below demand for years. This has cleared out most of the glut to the point where inventory levels are below normal and shortages are starting to appear.
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby davep » Sat 11 Jul 2015, 04:11:12

Cut out the ad homs, it's getting tiresome.
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby kublikhan » Sat 11 Jul 2015, 13:38:49

Hey pstarr, dave is right. Sorry if I got snarky there. I still love u :)
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby ralfy » Sat 11 Jul 2015, 22:11:22

It's easy to decouple GDP from energy. Just create more funny money.
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby kublikhan » Tue 14 Jul 2015, 15:42:50

The money creation that has taken place since 2008 was insufficient to offset the loss in credit supply and credit demand.

This paper has explored the concept of global liquidity. Global liquidity cannot be summarised in a single indicator. Instead, global liquidity conditions are driven by three common factors. These three global liquidity factors can be identified as a global monetary policy factor, a global credit supply factor and a global credit demand factor.

Since the outbreak of the global financial crisis in 2008, the global monetary policy stance has been accommodative, while credit supply has been tight and credit demand has been weak. This implies that accommodative "official" liquidity conditions have been countervailing the adverse effects of weak "private" liquidity conditions on financial dynamics over this period, though without being able to fully offset them.
Understanding Global Liquidity
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby ralfy » Wed 15 Jul 2015, 05:18:55

Definitely. That's why the global economy remained weak while oil prices went up steadily.

The same paper also explained how loose credit for years led to the recent crash.

Also, from last year:

"BIS warns on 'violent' reversal of global markets"

http://www.telegraph.co.uk/finance/econ ... rkets.html
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby Pops » Wed 15 Jul 2015, 11:44:58

Kub, I think there are several parts to that weak demand; obviously overinvestment— in China, US, everywhere.
Add in the high commodities price hangover from all that demand (including oil of course),
Plus BIG MACRO stuff like the aging of the population in the big economies, increasing financialisation (whose only product is money), increasing automation that cuts out the cost of labor (and labor's income).

Then factor in the low real interest rates lever-pulling by central banks (US first) which affects inflation to an extent but also reduces returns on investments to zero or below eliminating the "penalty" on cash hoarding

And finally the Frack-Boom that has lowered the US oil imports has strengthened the dollar, and been more than offset by declining exports of other stuff.

Image

All that inflating in an attempt to combat the Forces of Deflation.

I think down the road somewhere we (or someone) will look back and see the oughts as the last big hurrah before the long fizzle.
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby kublikhan » Wed 15 Jul 2015, 16:53:10

ralfy wrote:
kublikhan wrote:
ralfy wrote:It's easy to decouple GDP from energy. Just create more funny money.
The money creation that has taken place since 2008 was insufficient to offset the loss in credit supply and credit demand.
Definitely. That's why the global economy remained weak while oil prices went up steadily.
If the increase in funny money was met by a countervailing and more powerful force of destruction of credit supply and demand, that means something else must be responsible for the decoupling of GDP and energy. Such as the explanation proposed by BP: economic growth becoming less dependent on heavy industry.
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Re: OXI! Ugo Bardi, Gail Tverberg, Steve Ludlum discussion

Unread postby ralfy » Fri 17 Jul 2015, 15:10:49

kublikhan wrote:
ralfy wrote:
kublikhan wrote:
ralfy wrote:It's easy to decouple GDP from energy. Just create more funny money.
The money creation that has taken place since 2008 was insufficient to offset the loss in credit supply and credit demand.
Definitely. That's why the global economy remained weak while oil prices went up steadily.
If the increase in funny money was met by a countervailing and more powerful force of destruction of credit supply and demand, that means something else must be responsible for the decoupling of GDP and energy. Such as the explanation proposed by BP: economic growth becoming less dependent on heavy industry.


I think the reasons are given in the article shared above.
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