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THE International Energy Agency (IEA) Thread pt 4

Discuss research and forecasts regarding hydrocarbon depletion.

Re: IEA Medium Term Outlook

Unread postby Tanada » Wed 15 May 2013, 06:33:22

Keith_McClary wrote:If (hypothetically) USA imports no oil from the Middle East, a supply disruption would only affect USA prices if exports from USA were allowed.

Will USA continue to spend $trillions keeping compliant kings, dictators, emirs and sultans in power just in case of a supply disruption? It would be much cheaper just to ban exports.


Most of the oil the USA imports today does not come from the Middle East, it comes from Canada, Mexico, Venezuela, Nigeria. We also import from KSA and Iraq but not as much as we get from the other four I named.

Your statement makes the assumption that if we didn't import any oil from the Middle East we would face no consequences to a disruption in Middle East supplies, but the other countries we import from outside the Middle East would sell to the highest bidder. That means Nigeria, Venezuela and possibly Canada and Mexico would sell to the person with the biggest check, not necessarily the USA.

Even worse the USA has oil sharing treaty agreements with her allies, if their oil is reduced by law we will offset part of that loss from our stocks.

The only way for your scenario to come true would be for the USA to produce all of its oil internally and refuse to export any of it.
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Re: IEA Medium Term Outlook

Unread postby ROCKMAN » Wed 15 May 2013, 07:09:04

Tanada – And not just sell to the buyer with the bigger check but where there is also other incentives. Again, to beat that dead horse some more, how much oil the world is producing in X years isn’t the key factor for the any one country’s economy. It will always be how much imported oil an economy has available to it and at what price.

And then odd statements like: “The threat of chronic oil shortages is all but gone”. Gone??? The world is currently dealing with a huge oil shortage. Just ask the folks in Greece. Obviously my point is that the world is facing a huge shortage of $40 oil. But there’s an adequate supply of $100/bbl oil…all you have to do is pay for it. Based on the logic of that statement the world will never experience a “shortage” of oil: the price of what oil is available will rise to the point where supply will always meet demand. With as usual, demand being what an economy can afford to buy…not what it needs to buy.

Again, I beat my other dead horse some more: the critical dynamic isn’t when PO has or will occur. It’s that Peak Oil Dynamic. You mentioned Canadian, Nigerian and Venezuelan oil imports to the US. Those sources are part of the reason there is no “threat of chronic oil shortages” for us. Vz already has hundreds of thousands of bbls oil going to China as a result of a refinery deal…oil that used to go to US refineries. China is going to build 3 new refineries in Nigeria. Safe bet that Nigeria will be sending their oil to their refineries. Again, some of the oil currently being exported to the US. And then there's the huge refinery in British Columbia that the Bank of China will help fund. A refinery that will take oil sands production (which is currently being exported to the US), refine it and ship it to the west coast for transport to the market that makes the most profit. Unless, of course, if the Bank of China has a call on some or all of those products as part of their finance arrangements. A fairly common practice in such deals.

Regardless of how much oil/product is diverted away from the US market we’ll never face a “chronic shortage” of such commodities: we will always have as much as we can afford to pay for. How well our economy copes with that price and all the other aspects of the POD is another question. And IMHO the answer to that question has little to do with whether PO happened in 2005 or will happen in 2016.
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Re: IEA Medium Term Outlook

Unread postby Tanada » Wed 15 May 2013, 11:14:37

Roccman, please read your PM's.
I should be able to change a diaper, plan an invasion, butcher a hog, design a building, write, balance accounts, build a wall, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, pitch manure, program a computer, cook, fight efficiently, die gallantly. Specialization is for insects.
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Re: IEA Medium Term Outlook

Unread postby kublikhan » Wed 15 May 2013, 13:22:20

ROCKMAN wrote:Vz already has hundreds of thousands of bbls oil going to China as a result of a refinery deal…oil that used to go to US refineries.
That seems to be a rather inefficient way of doing business. The US already upgraded it's refineries to handle that heavy sludge. But instead of keep on selling to the US, Vz decides to sell the oil to China, which takes 40 days to get there and has higher transportation fees. Meanwhile the Chinese have to spend billions building new refineries? Maybe that's why the Chinese are selling much of that oil back to the US on the sly, pocketing the spread between the Vz discount and the market price as profit.

China is investing in Venezuela for energy security but also for business and profit. Due to the transport distance (it takes about 40 days to ship oil to China) and refining problems, Chinese state-owned companies sell up to a third of Venezuelan oil locally for profit (there is a noticeable gap in between PDVSA export and Chinese import figures)
China in Venezuela: loans for oil

Will this change after China finishes building it's new refineries? Perhaps, but I also read that Vz is having issues ramping up production in the Faja. I wonder if Vz will be able to feed all those new refineries going up in China with the snafu that is going on in the Faja.

The only Orinoco Tar Belt project that’s actually ready to start work (i.e., project finance in place, basic engineering worked out, permits cleared, work ready to start this year) is the construction of a massive new refinery in Guandong province. The oil is there, but the conditions – both financial and physical – are so far from ready for prime time that getting foreigners to risk money in the Faja is one tough slog.

This way of managing the Faja is storing up an enormous amount of future trouble in terms of Venezuela relationship with China, our soon-to-be economic overlords. Because, remember, within a few years, the Chinese will have built their big refinery in Guangdong, and the Venezuelan side is going to be late. Very late. The shiny new $8.6 billion piece of kit is going to just sit there. Except, don’t forget, China’s already paid for that oil! That’s where the Fondo Chino money comes from. If Venezuela doesn’t ship it, we’re looking at defaulting on bilateral debt. That Chinese Refinery is an atomic bomb in the making. Pity the poor Capriles minister who gets called in to deal with it.
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Re: IEA Medium Term Outlook

Unread postby ROCKMAN » Wed 15 May 2013, 17:25:58

k - And that's the leverage the Chinese have: the option to ship the oil to where it serves them best. When that big BC refinery that the Bank of China is financing starts shipping product made from oil sands production (that our refineries thought they had locked up) to the west coast it may all be sold in CA. Or, if it benefits China more to sell it somewhere else or ship it back to China, that could be their option.

As far as that Vz oil China may be getting all of it...just not directly. The "swap system" has been in place for decades and yet few in the public are aware it even exists. A US refiner has a long term contract for Nigerian oil; China has the same deal for Vz oil. So the Chinese and US refiner do a paper swap: the US refiner gets the Vz oil and China gets the Nigerian oil. Differentials are paid and both sides save money on transport. The Chinese might ship the oil home or maybe they'll run it thru one of the 3 Nigerian refineries they are planning to build and sell the products to the EU. Again, they are in control and it's their option to derive the max benefit.

But the critical aspect is that China controls where this oil or the products end up. In the next few years it may benefit them more to see much of it end up in other countries. But the day may come when the better option would be to ship any or all of it home. And it will be their choice to make. The general term for such options is “having the call”. Having the call has been a major negotiations point I’ve observed since I started my career in 1975. It was a huge issue even domestically between US companies. Especially so regarding NG. And having the call may be completely separate from ownership. And, again, it’s information that is rarely shared with the public. And it is a very dominant factor when investing hundreds of $billions in new refineries.
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IEA's Didier Houssin: the world's energy future not hopeless

Unread postby Graeme » Thu 06 Jun 2013, 10:15:08

IEA's Didier Houssin: the world's energy future is not hopeless

As part of an institution that is raising the alarm about the future of the planet, you would expect Didier Houssin, director of sustainable energy policy at the International Energy Agency (IEA), to be gloomy. "Scaring people is not always a good strategy," he says. "It's important to explain that there are solutions, the future is not hopeless." He concedes that the situation "is not rosy", but "there are some positive examples and we need to learn from them".

Some clean technologies are progressing fast, with developments in electric vehicles boding well for a decarbonised transportation system, for example, and people can make a big impact with some simple changes in their lifestyle. But the world's hunger for energy is still satisfied by coal, says Houssin, and without a more incisive switch to greener sources he believes the battle against climate change will be lost within less than a century.

More than ever, countries and industry are trapped in uncertainty about how to deal with growing energy demand. According to Houssin, and the Tracking Clean Energy Progress report 2013 published by IEA this spring, we are not on track to avoid the serious consequences of climate change.



But the outlook will be poor without a long-term vision that encompasses changes in individuals' behaviour.

"Better energy management also means less consumption and lower bills. Choosing a bike instead of a car saves emissions and it's good for your pocket." Once people have realised how much of a difference small changes in their daily routine can make, "then there will be a way out".


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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby dissident » Thu 06 Jun 2013, 11:04:34

Chirpy feel good BS. The issue is on what timescales the alternatives can replace the decline fossil fuel energy sources. All available data indicates that there will not be a seamless transition to the Star Trek future. In fact, the last few years the growth of alternatives has dropped significantly as various subsidies have been phased out. Even with rosy growth rate projections it will take decades for alternatives to ramp up. We are lucky if we are not economically collapsing around 2020 when global oil production will be lower than today by 10-20%.

Also it is quite revealing about this clown's agenda when he talks about scaring people. Yeah, right. It is much better to tell them nothing and pretend we will have BAU forever. The market will provide. And since when is telling people the truth the same as scaring them. If they are scared in the face of the truth then 1) it is their problem and 2) a good sign that the current state is dire.
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ROCKMAN » Thu 06 Jun 2013, 11:32:42

dis - I think it’s also good not to make assumptions about his undefined expectations: “But the outlook will be poor without a long-term vision that encompasses changes in individuals' behavior.” It seems to me that “individual behavior” can be defined anyway you want. Anything from not taking that summer driving vacation to laying off your some of your workers to compensate for increased operating expenses due to high energy cost. From lowering your thermostat a couple of degrees in the winter to cutting out a lot of discretionary spending which would reduce revenues to many businesses. There will be voluntary changes to behavior as well as those involuntary changes. But both would come under his classification. Yes: many may reduce their miles driven when they can no longer afford gasoline. I don’t consider that a change in behavior that should be viewed so favorably.
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby Ron Patterson » Fri 07 Jun 2013, 09:37:00

The article expresses concerns about global carbon emissions and implies that the global warming outlook is bad, but not hopeless. Any possible decline in the global oil supply is not even on their radar.

They don't know it yet but that situation is hopeless.
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ralfy » Fri 07 Jun 2013, 09:43:08

From the same organization:

"World headed for irreversible climate change in five years, IEA warns"

http://www.guardian.co.uk/environment/2 ... ate-change
http://sites.google.com/site/peakoilreports/
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ROCKMAN » Fri 07 Jun 2013, 10:11:44

ralfy – Not to diminish the negative impacts of climate change but there seems to be a bit imbalance with concerns about the negative impacts of high energy costs. Not talking about Starbucks raising their prices in the US but what the 3rd world in particular has to deal with. Those high prices negatively impact everything from food supplies, medical care and employment.

Think back and add up such stories and compare to the number of stories concerned with future climate impacts. Rather disproportionate IMHO. Might be due to the fact that expanding energy resources to the poor countries works against efforts to mitigate AGW.
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ralfy » Sat 08 Jun 2013, 00:35:59

Think of high prices maintained during the last few years and yet oil consumption for the rest of the world not only rising but negating demand destruction in the U.S., EU, and Japan.
http://sites.google.com/site/peakoilreports/
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ROCKMAN » Sat 08 Jun 2013, 04:20:47

ralfy – Good point. Why I have a problem accepting the positive spin on the decrease in US consumption. For the most part it wasn’t a voluntary choice but induced by those high prices IMHO. Many ignore the pain of millions induced by those high prices along with whatever portion of our current unemployment is a result of business coping with those increased costs.
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby pstarr » Sat 08 Jun 2013, 13:13:42

ralfy wrote:Think of high prices maintained during the last few years and yet oil consumption for the rest of the world not only rising but negating demand destruction in the U.S., EU, and Japan.
All evidence suggests otherwise. Where are the increases? Not the PIGGS, the rest of Europe, or the "Arab Spring+Turkey" nations. The plateau has barely budged. Chinidia (per Jeffrey Brown) alone shows substantial increase. Other national consumption increases are few and far between (some OPEC countries, Brazil, Russia?) and can also be explained by Westexas' Export Land Model. So their increased consumption is matched by decreased exports.


"The Future" Leonard Cohen

Give me back my broken night
my mirrored room, my secret life
it's lonely here,
there's no one left to torture
Give me absolute control
over every living soul
And lie beside me, baby,
that's an order!
Give me crack and anal sex
Take the only tree that's left
and stuff it up the hole
in your culture
Give me back the Berlin wall
give me Stalin and St Paul
I've seen the future, brother:
it is murder.

Things are going to slide, slide in all directions
Won't be nothing
Nothing you can measure anymore
The blizzard, the blizzard of the world
has crossed the threshold
and it has overturned
the order of the soul
When they said REPENT REPENT
I wonder what they meant
When they said REPENT REPENT
I wonder what they meant
When they said REPENT REPENT
I wonder what they meant

You don't know me from the wind
you never will, you never did
I'm the little jew
who wrote the Bible
I've seen the nations rise and fall
I've heard their stories, heard them all
but love's the only engine of survival
Your servant here, he has been told
to say it clear, to say it cold:
It's over, it ain't going
any further
And now the wheels of heaven stop
you feel the devil's riding crop
Get ready for the future:
it is murder

Things are going to slide ...

There'll be the breaking of the ancient
western code
Your private life will suddenly explode
There'll be phantoms
There'll be fires on the road
and the white man dancing
You'll see a woman
hanging upside down
her features covered by her fallen gown
and all the lousy little poets
coming round
tryin' to sound like Charlie Manson
and the white man dancin'

Give me back the Berlin wall
Give me Stalin and St Paul
Give me Christ
or give me Hiroshima
Destroy another fetus now
We don't like children anyhow
I've seen the future, baby:
it is murder

Things are going to slide ...

When they said REPENT REPENT ...
Haven't you heard? I'm a doomer!
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ralfy » Sat 08 Jun 2013, 18:59:50

pstarr wrote:All evidence suggests otherwise. Where are the increases? Not the PIGGS, the rest of Europe, or the "Arab Spring+Turkey" nations. The plateau has barely budged. Chinidia (per Jeffrey Brown) alone shows substantial increase. Other national consumption increases are few and far between (some OPEC countries, Brazil, Russia?) and can also be explained by Westexas' Export Land Model. So their increased consumption is matched by decreased exports.


I'm referring to the first chart found here:

http://ourfiniteworld.com/2013/04/11/pe ... e-problem/
http://sites.google.com/site/peakoilreports/
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby pstarr » Sat 08 Jun 2013, 19:56:59

I don't understand that chart.
Image
This one makes sense
Image
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby SeaGypsy » Sat 08 Jun 2013, 20:27:01

http://ourfiniteworld.com/2013/04/11/pe ... e-problem/

Tverberg:

Part of our problem now is that with globalization, world oil demand is rising very rapidly. Chinese buyers purchased more cars in 2012 than did European buyers. Rapidly rising world demand, together with oil supply which is barely rising, pushes world prices upward. This time, there also is no possibility of a dip in world oil demand of the type that occurred in the early 1980s. Even if the West drops its oil consumption greatly, the East has sufficient pent-up demand that it will make use of any oil that is made available to the market.

Adding to our problem is the fact that we have already extracted most of the inexpensive to extract oil because the “easy” (and cheap) to extract oil was extracted first. Because of this, oil prices cannot decrease very much, without world supply dropping off. Instead, because of diminishing returns, needed price keeps ratcheting upward. The new “tight” oil that is acting to increase US supply is an example of expensive to produce oil–it can’t bring needed price relief.
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby SamInNebraska » Sat 08 Jun 2013, 21:14:38

ralfy wrote:From the same organization:

"World headed for irreversible climate change in five years, IEA warns"

http://www.guardian.co.uk/environment/2 ... ate-change


I wonder what the IEA knows about climate change?
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ralfy » Sun 09 Jun 2013, 04:39:15

pstarr wrote:I don't understand that chart.


From what I gathered, the first chart shows that oil consumption for the U.S., EU, and Japan started at around 32 Mb/d, went up to around 41, then went down to around 36. Meanwhile, for all other countries (that is, not the U.S., Japan, and EU members), consumption started at around 28 Mb/d and has now gone up to 51.

Alternative sources of data can be found here:

http://omrpublic.iea.org/balances.asp

and elsewhere.

If the IEA charts are not available, you might find them elsewhere. Here's one article featuring such from 2011:

http://www.resourceinvestor.com/2011/07 ... ins-strong

Also,

http://en.wikipedia.org/wiki/List_of_co ... onsumption

esp. for Asia, Oceania, Africa, and the Middle East.

http://guyaneseonline.wordpress.com/201 ... oil-order/
http://sites.google.com/site/peakoilreports/
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Re: IEA's Didier Houssin: the world's energy future not hope

Unread postby ralfy » Sun 09 Jun 2013, 04:41:06

SamInNebraska wrote:I wonder what the IEA knows about climate change?


I think It has a directorate and a secretariat that works with the UNFCCC:

http://www.iea.org/topics/climatechange/
http://sites.google.com/site/peakoilreports/
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