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OPEC+ Considering Additional 1 Million Barrel Oil Production Cut Amid Outrage Over Gaza War

OPEC+ Considering Additional 1 Million Barrel Oil Production Cut Amid Outrage Over Gaza War

Two days ago, JPMorgan’s head of energy strategy Christyan Malek warned that amid the recent plunge in oil prices, driven as much by shorting CTAs (who today are in full-blown short squeeze panic mode) as the BIden admin, the oil market was underestimating the chances of deeper supply cuts during this month’s Nov 26 OPEC+ meeting.

“The market’s probably assuming very little chance of that happening, I’d say it’s much higher than that – not as a base case but as a scenario” Malek told Bloomberg in an interview, adding that deeper curbs would be in order to get ahead of potential weakness in the first half of next year.”

“We may need to see” a cut “given where the balances are, particularly given the demand trending.” And while “there’s a view that Saudi is tapped out”, Malek said that he doesn’t believe that: “I think there’s more flex if they wish to cut. We could see them do sizable cuts from here; having said that, I think it’s more likely they’ll want to socialize them among their OPEC peers – a collective cut rather than one on their own.”

And so, from JPM’s strategist to OPEC+’s ears because moments ago the FT reported that what until recently was unthinkable, is suddenly all too possible and largely thanks to the (mostly) Arabic resentment at what Israel is doing in Palestine: according to the FT, not only is Saudi Arabia prepared to prolong oil production cuts well into next year but Opec+ is weighing further reductions in response to falling prices and rising anger over the Israel-Hamas war.

…click on the above link to read the rest…

 

Today’s Contemplation: Collapse Cometh XXVII–Ecological Overshoot, Hydrocarbon Energy, and Biophysical Reality


Today’s Contemplation: Collapse Cometh XXVII

July 24, 2021

Tulum, Mexico (1986) Photo by author

Ecological Overshoot, Hydrocarbon Energy, and Biophysical Reality

Discussing ‘renewable’ energy and its shortcomings with those who hold on to the belief that they offer us a ‘solution’ to the predicaments humanity faces is always ‘challenging’. Today’s contemplation is based on a recent dialogue I have had with a few people who seek to hold on to the belief that we can completely abandon fossil fuels and simply shift support for society’s complexities over to ‘renewables, and my response to someone who complimented my viewpoint (an unusual occurrence on the pages of the online media site (The Tyee) I frequent, whose writers/editors/commenters mostly support ‘renewables’ and the promises the proponents of them make). The story is not so straightforward and most don’t want to hear that. You can check out the conversation here.


Thank you. The root cause of our problem appears to be ecological overshoot brought on, primarily, by our exploitation of a one-time energy cache (fossil fuels) that has helped to ‘power’ amazing technological tools and processes that, in turn, have allowed us to exploit the planet and its resources substantially. This has led to a number of positive feedback loops, particularly exponential increases in population, waste (including greenhouse gases), and the speed at which we use these finite resources.

The crowd that insists ‘renewable’ energy (and it’s not truly ‘renewable’ given its dependency on finite resources, and certainly not ‘green/clean’ based on the processes necessary to produce them) can ‘sustain’ our energy-intensive complexities tend to be willfully ignorant of their negative consequences and deficiencies. In fact, my guess is that many have little experience with or knowledge of them (see Alice Friedemann’s work at Energy Skeptic and especially her most recent Springer Energy Series publication, Life After Fossil Fuels) and are grasping for solutions to our predicaments.

The cost, components, capacity, and energy-return-on-energy-invested for ‘renewables’ is nowhere near what most imagine; and I’m thinking most hold on to the belief that governments will ‘pay’ for the massive systems that would be needed to support our complex societies (and there simply aren’t enough finite resources on this planet to do this; to say little about the massive debts already existing within our Ponzi-like financial/economic/monetary systems that themselves are on the verge of collapse and the struggles many people have in just affording day-to-day living expenses). I personally have installed a photovoltaic system as an emergency backup system for our home. I have spent well in excess of $10,000 putting up about 2.2 KwH of panels, connecting charge controllers, deep cycle batteries, and inverters. I am under no delusion that such a system can sustain our household, particularly in our Canadian winters. The power is intermittent. The batteries drain relatively quickly. And charging can take days/weeks when its cloudy and cold, and/or snow builds up on them.

The religious-like adherence to the belief that ‘renewables’ are part-and-parcel of a ‘solution’ to the negative consequences of fossil fuels leads many to ‘attack’ anyone who questions their ‘faith’ (see Mike Stasse’s Damn the Matrix). I have been accused numerous times of being a shill for the fossil fuel industry and even threatened because of this allegation; one person recently wished me the worst possible end I can imagine and then multiply it by 1000 because I questioned the entire ‘renewable’ mantra and didn’t by into his ‘solution’ for addressing the climate crisis.

I usually attribute this to the first few stages — denial, anger, bargaining — of Kubler-Ross’s model of grief, which people who come to realise our predicaments tend to travel through. It is also a result of believing that what we face is a problem that can be solved when in actuality it appears to be a predicament that we are going to have to face and attempt to ‘weather’ (see Erik Michaels’ Problems, Predicaments, and Technology). In fact, I would argue attempts to replace fossil fuel inputs with alternatives is a very misguided and potentially catastrophic path to take. The fossil fuel platform is significantly required for almost all the processes necessary to shift to alternatives. From steel and concrete manufacturing to the heavy machinery necessary in mining and transportation, large fossil fuel inputs are required.

Then there’s the fossil fuel inputs into modern industrial agriculture: the pesticides, herbicides, fertilizers, heavy machinery, irrigation, and transportation that sustain food production in sufficient quantities and keep the just-in-time, long distance, supply chains functioning — to say little about the finiteness of the chemicals required for fertilizers or the drawing down of water aquifers. Food shortages would be guaranteed to be massive should fossil fuel inputs suddenly disappear without local, regenerative permaculture being ready to replace it; something we are woefully blind to. ‘Electrifying’ everything does little to address many of the negative consequences of our overshoot.

There are so many negative consequences to our overshoot that we are ignoring — in our zeal to sustain our complexities via ‘renewables’ — that would continue or expand by chasing such ‘solutions’ as widespread adoption of electric vehicles and solar/wind energy. In our rush to justify all the modern ‘conveniences’/‘energy slaves’ we have (especially in so-called ‘advanced’ economies) we are taking the world even further into overshoot which will lead to an even more catastrophic ‘collapse’ when it finally occurs.

We can accept that ‘collapse’ is imminent (and pre/history shows this occurs for every complex society that we have experimented with for the past 10,000+ years — see archaeologist Joseph Tainters’ text The Collapse of Complex Societies) and attempt to prepare for it, or continue the wishful thinking path that ‘this time is different’ and chase actions that will make the situation even more dire. I would prefer the former but my guess is we will attempt the latter for two main reasons.

First, we have been propagandised by what should be called ‘snake oil salesmen’ and their marketers who have taken advantage of our energy crisis. They have created a massive marketing campaign to sell their products and done so on our emotions, particularly fear and the need to have some ‘certainty’ about the future (refer to Dan Gardner’s Future Babble). The marketers have set fossil fuels up as the ‘problem’ and offered a ‘solution’ that just happens to enrich them. As with all such marketing, the negative consequences of their products have been left out of the narrative.

Second, having bought into the sales pitch, most people have created a set of beliefs that serve to help justify their living arrangements and avoid the difficulties that very likely lay ahead. Core beliefs are difficult to challenge. Questioning them creates cognitive dissonance in the adherent which can only be dissipated by clinging more strongly to the belief (usually by ignoring or attacking those challenging them) or reflecting on the beliefs and shifting them towards a more neutral or different stance. Most people tend to protect their core belief systems, regardless of the evidence/facts/data that would suggest they are misguided/misinformed; thus the ire/anger by some when the idea of ‘renewables’ being able to replace fossil fuels is confronted.

For the most part, the future is unwritten. We can accept the challenges of a world without all the energy slaves we have created with our ingenuity and tool-making acumen, and prepare for life with less, far less. Or, we can continue down the ‘business-as-usual’ path and attempt to sustain the unsustainable (see Meadows et al.’s Limits to Growth and its various updates), and that will likely result in far more chaos and difficulty as the bottleneck we have created closes around us (see William Catton Jr.’s book, Overshoot).

I’m increasingly chagrined to see us continue to chase the infinite growth chalice with a belief that this will all work out just fine, thank you, as long as we abandon fossil fuels and shift to ‘renewables’ with a religious-like fervour that completely ignores some harsh, biophysical realities. I am reminded of author Robert Heinlein’s observation that we are rationalising creatures, not rational ones, and we are leading ourselves into a very, very precarious and dangerous place.

De-Dollarization? China Completes First Digital Yuan Purchase For Cross-Border Oil Transaction

De-Dollarization? China Completes First Digital Yuan Purchase For Cross-Border Oil Transaction

De-dollarization continues accelerating with news of the Shanghai Petroleum and Natural Gas Exchange (SHPGX), a Chinese-backed exchange for trading energy-related products, settling its first cross-border transaction in digital yuan.

Chinese-based financial news outlet “Yicai” first reported PetroChina International bought one million barrels of crude oil using digital yuan on Thursday. It was the exchange’s first overseas oil settlement in digital yuan. However, the name of the seller was not disclosed.

SHPGX has made several transactions in yuan earlier this year: In March, PetroChina and TotalEnergies completed a yuan-denominated liquefied natural gas transaction on the exchange. According to the exchange, four such LNG transactions have occurred this year.

China’s central bank began the digital yuan project in 2014 and has piloted the electronic currency in numerous regions across China. The world’s second-largest economy has been preparing to use the yuan and its digital version in international trade and finance as an alternative to the dollar.

In August, Brazil’s President Luiz Inacio Lula da Silva called for BRICS nations to create a common currency as the world furiously searches for ways to circumvent the dollar-based financial system.

Brazil’s president said a BRICS currency “increases our payment options and reduces our vulnerabilities.”

The US shutting Russia out of the SWIFT messaging system that underpins most global payments in response to its invasion of Ukraine has supercharged the de-dollarization trend.

It remains to be seen who exactly PetroChina paid digital yuan for the crude oil, but it might not be out of the question that it was Russia, considering it’s been shut out of the SWIFT system, plus oil exports to China have hit a record high.

An Inconvenient Talk

An Inconvenient Talk

Dave Hughes’s guide to the end of the fossil fuel age

DAVE HUGHES IS DRIVING north on Highway 2. Headed out of Calgary, where he worked for thirty-two years at the Geological Survey of Canada, mapping the nation’s coal reserves. Bound for Edmonton, where he grew up and earned two degrees in geology. It’s not yet dawn, the sky deep black and the windows of his pickup truck like mirrors, the southbound lanes a line of smeared headlights as long-haul commuters make the trek the other way into the capital of the oil patch. Hughes sips coffee from a reusable mug, fighting back sleepiness. Just another commuter trailing a cloud of burnt dinosaur bones on his way to work.

Dave had to start out fifteen minutes earlier than the requisite ungodly hour so he could pick you up at your house. So you wouldn’t drive yourself. Save a few hydrocarbons, he’d joked. He’s a coal man, a geologist, and he always refers to the holy trinity of fossil fuels whose flames have stoked the past 200 years of industrial growth—coal, natural gas, and especially oil—in that same semi-technical way: hydrocarbons. Dave Hughes has a lot to say about hydrocarbons, mainly how there’s no possible way to keep running the engine of a modern global economy for much longer at the pace we’re burning them. Which is why you felt compelled to join him in the black chill of this late-autumn morning. Because that seems like a pretty big deal.

Dave came right to the curb out in front of your house, your personal chauffeur, because you said you were interested in hearing his talk a second time, and he’ll do his level best to bring his talk to just about anyone who asks…

…click on the above link to read the rest of the article…

Geopolitical Stakes Are Huge On This Tiny Island

Geopolitical Stakes Are Huge On This Tiny Island

Cyprus

The specter of a rumored U.S. military buildup in Cyprus that would draw a major Russian response now adds to the ongoing Greek Cypriot-Turkish conflict over the island and the oil and gas riches it promises.

Ever since the massive hydrocarbon discovery in Cyprus’ exclusive economic zone (EEZ) in 2011 by American company Noble Energy the island has been the center of a geopolitical game that doesn’t stop with rife tensions between Turkey and the Greek Cypriots.

And now this game is drawing nearer to its climax, with much at stake.

Cyprus–an island in the eastern part of the Mediterranean Sea—is divided into the Greek-dominated Republic of Cyprus in the south and the Turkish-controlled north. Since 2004, the Republic of Cyprus has been a member of the European Union, and the northern ‘entity’ remains recognized solely by Turkey.

But it is the EEZ—the exclusive economic zone—where this geopolitical game of chess is being played out.

(Click to enlarge)

Generally, Turkey doesn’t accept the jurisdiction of Cyprus over the EEZ, and particularly the process of bidding on and awarding concession for offshore oil and gas drilling. Every attempt by Nicosia to invite international companies to explore offshore has been met with a strong reaction from Turkey, which is constantly looking for geopolitical leverage in this battle.

From the Turkish perspective, the Greek Cypriots persist “in ignoring the equal and inalienable rights and interests of the Turkish Cypriot side on natural resources of the island”.

Indeed, everything in correlation with oil and gas on Cyprus has a specific political weight and is highly sensitive.

…click on the above link to read the rest of the article…

How Has the US Fracking Boom Affected Air Pollution in Shale Areas?

How Has the US Fracking Boom Affected Air Pollution in Shale Areas?

Trucks in front of a flare at a fracking site

Urban air pollution in the U.S. has been decreasing near continuously since the 1970s.

Federal regulations, notably the Clean Air Act passed by President Nixon, to reduce toxic air pollutants such as benzene, a hydrocarbon, and ozone, a strong oxidant, effectively lowered their abundance in ambient air with steady progress.

But about 10 years ago, the picture on air pollutants in the U.S. started to change. The “fracking boom” in several different parts of the nation led to a new source of hydrocarbons to the atmosphere, affecting abundances of both toxic benzene and ozone, including in areas that were not previously affected much by such air pollution.

As a result, in recent years there has been a spike of research to determine what the extent of emissions are from fracked oil and gas wells — called “unconventional” sources in the industry. While much discussion has surrounded methane emissions, a greenhouse gas, less attention has been paid to air toxics.

Upstream Emissions

Fracking is a term that can stir strong emotions among its opponents and proponents. It is actually a combination of techniques, including hydraulic fracturing, that has allowed drillers to draw hydrocarbons from rock formations which were once not profitable to tap.

Drillers shatter layers of shale rock with high-pressure water, sand and chemicals to start the flow of hydrocarbons from a well. The hydraulic fracturing process itself, aside from its large demand for water, is possibly the least environmentally impactful step along the complete operational chain of drilling for hydrocarbons. Arguably, the more relevant environmental effects are wastewater handling and disposal, as well as the release of vapors from oil and gas storage and distribution.

…click on the above link to read the rest of the article…

Leaked Map Reveals Big Gas Is Setting Its Sights on the Most Biodiverse Place on Earth

Leaked Map Reveals Big Gas Is Setting Its Sights on the Most Biodiverse Place on Earth

    Part of a map from Pluspetrol, an exploration and production company, showing its interest in areas of Manú National Park in Peru’s Amazon. (Pluspetrol)

A leaked map shows that a private energy corporation based in Argentina is eyeing Manú National Park in Peru’s Amazon, one of the most biodiverse places on earth.

In a detailed article in The Guardian, environment writer David Hill, who researches forest governance in Peru from his location in the Amazon, traces the back-and-forth of Pluspetrol’s apparent quest for the hydrocarbons beneath the protected land:

The map vaguely and ignorantly – or hopefully? Disdainfully? – calls Manu a “reserve”, where gas operations are permitted. Not so in national parks. Peru’s 1997 Law of Protected Natural Areas states “the extraction of natural resources is not permitted” in parks, while the 2001 regulations for “protected natural areas” states the “settlement of new human groups and the exploitation of natural resources is prohibited.” In addition, the 1993 Constitution “obliges” the government “to promote the conservation of biological diversity and protected natural areas.”

Manu isn’t just any national park. It is home to members of several indigenous peoples – the Matsigenka, “Matsigenka-Nanti”, “Mashco-Piro”, Nahua, Quechua and Yine – while UNESCO, which has designated it a biosphere reserve and World Heritage Site, says that the biodiversity “exceeds that of any other place on earth.” In early 2014 scientists described Manu as “top of the [world’s] list of natural protected areas in terms of amphibian and reptile diversity”, and back in 2006 other scientists found that the number of bird and mammal species is the “largest for any similarly sized area in the world.”

“For 10 years [Manu] has held the title as the world’s richest protected area for birds and mammals,” Bruce Patterson, from The Field Museum in the US, told the Guardian.

Hill writes that the map was featured in April 2013 in a report by the Peruvian nongovernmental organization Ecodess. So why draw attention to it now?

…click on the above link to read the rest of the article…

Revolution? More like a crawl

Revolution? More like a crawl

The energy visionary Vaclav Smil — Bill Gates’s favorite author — says that when our leaders promise quick energy transformations, they’re getting it very wrong.

America in 2015 finds itself almost in a new energy reality. It recently became the world’s secondlargest extractor of crude oil, and since 2010 has been the leading producer of natural gas, whose abundant and inexpensive supply has been accelerating the retreat from coal as a national source of electric power. 

Some see this as the beginning of an even bigger transition, one in which America’s dominant status as a producer of hydrocarbons ends its allies’ dependence on Russian gas and makes OPEC terminally irrelevant, while its entrepreneurial drive helps it quickly advance to harness renewables and reduce greenhouse gas emissions.

All of this sounds too good to be true — and it is. Indefensible claims of imminent transformative breakthroughs are an unfortunately chronic ingredient of American energy debates.

When American leaders talk about energy transitions, they tend to sell them as something that can be accomplished in a matter of years. Al Gore, perhaps the country’s most prominent climate activist,proposed to “re-power” America, making its electricity carbon-free, within 10 years, calling the goal “achievable, affordable and transformative.” That was in 2008, when fossil fuels produced 71 percent of American electricity; last year 67 percent still came from burning fossil fuels.

President Barack Obama, who has a strong rhetorical dislike of oil — although kerosene distilled from it fuels the 747 that carries him to play golf in Hawaii — promised in his 2011 State of the Union message that the country would have 1 million electric cars by 2015. That goal was abandoned by the Department of Energy just two years later.

 

…click on the above link to read the rest of the article…

Stranded Assets in Oil and Gas a Reality

Stranded Assets in Oil and Gas a Reality

Just a few short years ago a friend called me to chat about the possibility of stranded assets in oil and gas due to climate change and the expected legislation and new regulations that would entail. This was an interesting idea coming out of the UK at the time. Since then, the idea has gained more and more traction. What is starting to emerge, however, is that stranded assets in oil and gas are not going to happen merely because of climate change. It is happening as we speak because a number of potentially disrupting events are all converging on one point: our use of hydrocarbons. Some of the challenges are due to climate and some are not. What is clear, however, is that they are multiplying. Though climate change will no doubt prove to be one aspect of stranded assets, others will include a simple but powerful realization that there are simply better places to put your investment dollars…or euros…or yuan.

So what are these potentially disrupting events? Let’s start with just one.

We’ve all heard of the compound effect and how it can beneficially impact our investments. What we don’t hear as much is what it can do detrimentally as well. Because the compound effect doesn’t just work on investments. It also works on every aspect of your life. If you choose to add desserts to a couple of meals a week when you never ate dessert before, chances are that you will gain weight. It won’t seem a big deal at first. You won’t even notice it but then one day you will wake up and “somehow” you’ve gained five pounds. Something similar is happening with the alternative energies of wind and solar. While most of us were not paying attention, they were quietly adding capacity to the grid. While we were incessantly fixated on the “shale revolution” they were streamlining manufacturing processes and the costs were plunging.

…click on the above link to read the rest of the article…

 

 

2015: Asymmetric Oil Warfare

2015: Asymmetric Oil Warfare

Let’s consider some examples of potential asymmetric-warfare tactics as they relate to the price of oil.

The world has habituated to the never-ending undeclared war over ownership and access to hydrocarbons. Now we are entering a new phase of asymmetric war being waged not over oil but the price of oil. Many observers see a parallel in Saudi Arabia’s stated intent to force other exporters to cut their production (if they want to maintain the price of their oil) to the mid-1980s, when a similar oil-pricing war drove prices to lows that helped bankrupt the Soviet Union.

 

While there are certainly parallels to that period of superpower confrontation and the Saudis’ use of the oil weapon, it seems to me that the current era is less a replay of the 1980s than a new chapter in asymmetric warfare that may see a variety of oil-related weapons being deployed.
Asymmetric warfare is defined as war between belligerents whose relative military power differs significantly, or whose strategy or tactics differ significantly. Oil exporters come in a variety of sizes and favors, as do major oil producers and consumers (for example, the U.S. is a major producer but it still imports oil from other producers).
Each party with an interest in the price of oil has a different set of weapons, goals, and relative military/financial power.

…click on the above link to read the rest of the article…

 

Abundance Thinking | The carbon pilgrim

Abundance Thinking | The carbon pilgrim.

On a fine August day, I flew to New England in search of abundance.

I was on the road to visit Dorn Cox, a young farmer who lives and works on his family’s 250-acre organic farm, called Tuckaway, near Lee, New Hampshire. Dorn calls himself a “carbon farmer,” meaning he thinks about carbon in everything he does. Confronting agriculture’s addiction to hydrocarbons, for example, Tuckaway produces a significant amount of its energy needs on-farm. Dorn does it with biodiesel – canola specifically – which he and his family grow on only 10 percent of the farm’s land. This was big news, so I thought a visit would be worthwhile.

I met Dorn in a hayfield behind a home belonging to a University of New Hampshire professor, spreading wood ash carefully among a grid of study plots. He gave me a wave as I parked the car, putting the ash can on the ground. Farmer-thin, wearing muddy jeans, a yellow shirt, and a floppy straw hat that shaded intense blue eyes, Dorn extended a hand and gave me an energetic grin.

“What’s going on here?” I asked nodding at the gridded plots, though I knew it was part of his Ph.D research. “Just trying to figure out the best way to turn a hayfield into a farm without tilling it,” he replied. “And create a food and energy system that puts more carbon into the soil than comes out.” Was the professor okay with this? I asked. He’s fine with it, Dorn reassured me. “There are a lot of these little fields behind people’s houses. With some work they could be growing a great deal of produce,” he said. “We just need to figure out a way to do it without using a plow.”

As we walked across his study plots, Dorn explained his thinking.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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