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By Robert Rapier on Dec 11, 2006 with no responses

Debate on Oil Exports – Part II

Note: This post will be going up at The Oil Drum in the morning. For viewers of this blog, you get to see it first. This is my response to geologist Jeffrey Brown’s (alias westexas) post on whether world oil export numbers signal that world oil production has peaked. First of all, while I kept the title consistent with Jeffrey’s original, I consider it to be a misnomer. I do not intend to debate the timing of Peak Oil. Some have misunderstood my long-running debate with Jeffrey to be a quibble about the timing of the peak. That is not the case. Yes, in my opinion Peak Oil is at least 3 years out. But that opinion is based on… Continue»

By Robert Rapier on Dec 8, 2006 with no responses

Amazing U.S. Oil Production Statistic

While preparing my response to Jeffrey Brown on the exports debate, I read as much as I could on Saudi Arabia, their exports, and their reserves. It is pretty common knowledge that the entire world is at the mercy of Saudi’s reserves, so it is important that we know the size of their reserves. The “official” number (from BP’s Statistical Review of World Energy) is 262 billion barrels remaining. If this was in fact true, then Peak Oil is very distant (although Peak Lite would still be a threat). However, many are skeptical of this number. The case for a much lower reserve number was argued by Matthew R. Simmons in Twilight in the Desert: The Coming Saudi Oil Shock… Continue»

By Robert Rapier on Dec 6, 2006 with no responses

This Week in Petroleum 12-06-06

I have a challenge for the conspiracy theorists out there who think oil companies purposely dropped the price of gas leading up to the recent elections. Here is the gasoline inventory graph for the past year, which the EIA just updated today at This Week in Petroleum: Note that gasoline has dropped below the bottom range of where inventories typically run at this time of year. We are one pipeline or major refinery issue away from having a serious gasoline supply crunch. So, what do you do? If prices increase, people cry foul. Yet demand hit an all time record for this week of the year (despite this, prices fell today). Personally, I think prices need to come up (as… Continue»

By Robert Rapier on Dec 4, 2006 with no responses

Debate on Oil Exports

Over at The Oil Drum, geologist Jeffrey Brown, aka westexas, made a claim back in January that we face an imminent export crises because the major exporting countries have peaked. In other words, Peak Oil is here. I have disputed his interpretation of the data. I have argued that imports closely track refinery utilization, and that in the first quarter when imports were falling, refineries were in the midst of their turnarounds. When the refineries came back up, so did imports. We have argued back and forth about this for several months, so I finally challenged him to a debate to get our positions on the record and documented. My primary concern with his position is that I believe he… Continue»

By Robert Rapier on Dec 1, 2006 with no responses

Last Post on Corn Ethanol Boondoggle

OK, for a while. I am trying to work on a post on energy subsidies in general, but ethanol has been a hot topic today. A newspaper in Lincoln Nebraska published a story in which a skeptic discussed what he foresees for the ethanol industry: Ethanol skeptic sees painful realities ahead There is also a lively debate going on after the story. Some excerpts: What he can’t see coming from his seventh-floor office window in downtown Lincoln, Doug Carper can usually piece together on the four, super-sized computer screens at his desk. Having pored over all the charts and graphics, and having weighed the numbers against his many years as an agricultural commodities broker, the 56-year-old Carper sees trouble coming… Continue»

By Robert Rapier on Nov 30, 2006 with no responses

Ethanol Demand Boosting Corn Prices

A new story today from Yahoo News: Ethanol demand boosting corn prices Some excerpts: INDIANAPOLIS – The ethanol industry’s growing appetite for corn has pushed prices for the grain to their highest levels in a decade amid a surge that agricultural experts say could lead farmers next spring to plant their largest corn crop in 60 years. Farmers who plant more corn in 2007, however, will be betting that the nation’s burgeoning ethanol industry won’t go bust and oil prices stay high, keeping up demand for the corn used to make ethanol, said Chris Hurt, a Purdue University agricultural economist. With a growing amount of corn being diverted from food products and livestock feed toward ethanol production, per-bushel prices have… Continue»

By Robert Rapier on Nov 27, 2006 with no responses

Epic Essay on Sustainability

I would like to direct your attention to the epic post written by The Ergosphere’s Engineer-Poet: Sustainability, energy independence and agricultural policy It is a monster (the last draft I saw before publication was over 8,000 words) and it is really thorough. It should be cross-posted to The Oil Drum in a couple of days. Here is a brief introduction of what the essay covers: What would you say if I told you that we could use biomass to: Replace all the petroleum used by the ground-transport sector (55% or more)? Replace all the natural gas used by the electric-generation sector (about 1/3 of US natural gas consumption)? Replace every pound of coal burned for electricity (about 90% of all… Continue»

By Robert Rapier on Nov 23, 2006 with no responses

Ethanol, Biodiesel, and Food Prices

The following story from Bloomberg caught my eye today: Ethanol Drives Up Food Commodity Prices Some notable excerpts: Nov. 22 (Bloomberg) — Global ethanol production is driving up prices for food commodities, from feed stocks such as sugar, to meat, said Datagro, Brazil’s biggest sugar-industry forecasting firm. U.S. production, forecast to increase more than 70 percent by 2012, will use 37 percent of the country’s current corn supply to meet output needs, up 15 percent from 2006, Datagro said. Land for soy oilseeds is increasingly being diverted to grow corn, reducing soy supply and driving up animal feed prices, according to the company. In China, competing demand for corn from the food and ethanol industries may lead the country to… Continue»

By Robert Rapier on Nov 22, 2006 with no responses

This Week in Petroleum 11-22-06

The weekly EIA report was released this morning: Summary of Weekly Petroleum Data for the Week Ending November 17, 2006 Some excerpts: U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ending November 17, up 60,000 barrels per day from the previous week’s average. Refineries operated at 87.1 percent of their operable capacity last week. Gasoline production inched slightly higher last week compared to the previous week, averaging 8.7 million barrels per day, while distillate fuel production increased as well, averaging nearly 4.1 million barrels per day. U.S. crude oil imports averaged 10.5 million barrels per day last week, up over 1.0 million barrels per day from the previous week. Over the last four weeks,… Continue»

By Robert Rapier on Nov 20, 2006 with no responses

Gas Prices, Gouging, and Food versus Fuel

A few newsworthy items to cover: Gas prices, gas gouging legislation, and food versus fuel. Gas Prices on the Rise Surprise! It seems that gas prices are rising: Gas prices on the rise again, analyst reports Gas prices are on the rise again, just as Americans hit the highways for Thanksgiving. Gas prices rose about 5 cents per gallon nationwide compared to two weeks ago, industry analyst Trilby Lundberg said Sunday. Of course if you read this blog, you knew this was coming. I have made this case in two recent essays, and I have been saying this at The Oil Drum for about a month: A Case Study in Cluelessness This Week in Petroleum 11-15-06 Gasoline inventories are being… Continue»