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By Robert Rapier on Mar 29, 2007 with no responses

This Week in Petroleum 3-28-07

The supply situation is quickly coming to a head, and many questions will be answered in the coming weeks. Will OPEC increase oil production? Can they? Will there be any relief from rising gasoline prices? Will gasoline demand remain strong in the face of the recent price spike? The trend at this time of the year – because some refineries are offline for maintenance – is that crude stocks are generally rising and gasoline is generally falling. (The trend for distillates is very dependent upon the weather). That has been the trend for several weeks, but this week crude oil inventories dipped slightly. This will happen as refineries start to come out of turnarounds, with the trend of falling crude… Continue»

By Robert Rapier on Mar 27, 2007 with 8 responses

The Logistics Problem of Cellulosic Ethanol

Update: This article got a mention in today’s Wall Street Journal Energy Roundup. ————————– In my essay Cellulosic Ethanol Reality Check, I identified several big challenges that must be addressed before cellulosic ethanol is commercially feasible. One of these is the logistics problem, and a recent story in the Omaha World-Herald emphasizes the point: The future is not now for biomass ethanol industry The article describes the logistics challenges for a single ethanol plant: The logistics of collecting and storing a million tons of corn stubble each year for an ethanol refinery are mind-numbing. It would take 67,000 semitrailer loads to haul the baled stubble out of the field. That’s 187 truckloads a day, or one every eight minutes. To… Continue»

By Robert Rapier on with no responses

More on Hot Gas Lawsuit

I really love my Site Meter at the bottom of the page. I check it most days, and it gives me a lot of good information about who is linking to the site and where they are coming from. Incidentally, you can access the same information I can see by clicking on it. Anyway, a few days ago I wrote Hot Gas Lawsuit in Utah. It is about a class action lawsuit that claims that oil companies are making a killing from overcharging customers because gas expands in the summer. According to my Site Meter, I was getting some hits on this article, which I ultimately tracked back to here. The discussion was fine, until one of my beloved fringe… Continue»

By Robert Rapier on Mar 26, 2007 with no responses

Is Peak Oil a Belief, Theory, or Fact?

One of the comments by KingofKaty that followed my essay Peak Oil and the Lunatic Fringe brought up something that is worth addressing, because it comes up pretty frequently. The phrase of interest was “you believe in peak oil.” I have heard peak called a belief , a theory, or just an observation. In fact, all three descriptions apply depending on the situation, but it is important to clarify what’s what. And I want to make it clear that even though I “believe in peak oil”, it is not in the same context as one would “believe in the tooth fairy.” Peak Oil as Observation Peak oil is an observation, in that we have observed many regions of the world… Continue»

By Robert Rapier on Mar 25, 2007 with no responses

Windfall Profits: A Lesson from the U.K.

Regardless of your position on windfall profits taxes on oil companies, one thing has been demonstrated again and again. Governments consistently fail to accurately anticipate the consequences. As oil prices have increased, governments have seen tax revenues from oil and gas grow significantly. But they apparently believe they know how to deal with a goose that lays golden eggs: Take some food away from that corpulent goose, but expect it to keep laying golden eggs. The purpose for imposing windfall profits taxes is generally two-fold. First, a government can tell the citizens that despite their inability to control oil and gas prices, they are doing something by “punishing” the oil companies that benefit from these rising prices. Second, they genuinely… Continue»

By Robert Rapier on Mar 24, 2007 with no responses

Peak Oil and the Lunatic Fringe

I have been posting at The Oil Drum as a contributor for about a year now. Yesterday, I announced that I would be taking a break for a while. (I will continue to post at least one new essay a week here). As I am getting quite a few e-mails about this, I wanted to document what has precipitated this for those who may not know the history. The Oil Drum receives a great many visitors each day (currently over 12,000 a day). While the vast majority are interested in intelligent discourse on energy issues, there is a very vocal lunatic fringe who accept Peak Oil RIGHT NOW with a religious fervor. They lash out at any viewpoints that challenge… Continue»

By Robert Rapier on Mar 22, 2007 with no responses

What Planet Are They From?

I have come across a couple of articles in the past few days that really left me shaking my head. One praises Hugo Chavez as a hero, and the other blasts oil companies for their multi-million dollar gifts to higher education. These people definitely see the world through a very different set of lenses than I do. Hugo Chavez: Hero of the People There are extremists on both ends of the political spectrum. For every Ann Coulter on the Right, there is a Wayne Madsen on the Left: Both are just as out of touch as they can possibly be. I have found that I can’t communicate with either sort of extremist, because they are generally entrenched in their views… Continue»

By Robert Rapier on Mar 20, 2007 with 1 response

Hot Gas Lawsuit in Utah

I wrote this up a couple of weeks ago, but never got around to posting it. I guess business is slow for the folks who sue people for a living: Suit Seeks to Deflate Excess ‘Hot Gas’ Profit Source: Salt Lake Tribune Mar. 7–When the temperature of gasoline rises, the volume of the fuel expands. And that means Utah drivers who fill up during the summer may get fewer miles out of a tank of gas than during the colder months, when the temperature of the fuel they pumped into their automobiles and pickups was lower. The prospect that motorists may not always be getting all the energy from each gallon of gasoline that they paid for has ignited a… Continue»

By Robert Rapier on with 1 response

Water Usage in an Oil Refinery

There has been much controversy regarding the amount of water used to produce a gallon of ethanol. Considering just the usage in the ethanol plant (ignoring any irrigation requirements for the corn), this amounts to about 4 gallons of water per gallon of ethanol produced: New Research Paper Finds Water Availability Critical to Growth of Ethanol Industry Generally, an ethanol plant will use 10 gallons of water per minute for each 1 million gallons of ethanol produced. A typical 50 million gallon plant, would need 500 gallons per minute of water. There are no publicly available records on water use by ethanol plants in the United States, the authors found, with the exception of the Minnesota Department of Natural Resources…. Continue»

By Robert Rapier on Mar 19, 2007 with no responses

Ethanol in the News

There were several ethanol stories in the news today. It was a mixed bag. From BusinessWeek: Ethanol’s Growing List of Enemies Paul Hitch has spent his entire life raising cattle and hogs on a stretch of the Oklahoma panhandle he says is “flat as a billiard table.” But he worries that they’ll face mounting pressures in the industry, particularly because of the soaring price for corn, which the business depends on to feed the livestock. In the past year, corn prices have doubled as demand from ethanol producers has surged. “This ethanol binge is insane,” says Hitch, who’s president-elect of the National Cattlemen’s Beef Assn. (NCBA). “This talk about energy independence and wrapping yourself in the flag and singing God… Continue»