US Dept Interior says onshore damage 'major hindrance' to
Gulf oil recovery
MarketWatch 16 September 2005
Hurricane Katrina doesn't appear to have caused the same damage to
offshore pipelines as Hurricane Ivan, but instead did terrible damage ashore
that has bottled up oil production, the U.S. Minerals Management Service said
Friday. "The major hindrances to restoration of energy resources have been
damage to onshore infrastructure, such as refineries, processing plants and
pipelines; difficult and intermittent communications in the Gulf region;
shortage of helicopters, boats, divers and power," the MMS said
in a statement released Friday morning. "35% of shut in oil is due to
problems with onshore infrastructure."
Four refineries accounting for 5% of U.S. capacity remain shut in the wake of
the storm. In addition, the Empire petroleum terminal operated by Chevron Corp.
(CVX) was damaged, bottling up output from Gulf of Mexico producers who are
otherwise ready to come back on line.
The storm also inundated the important offshore oil service port (LOOP) at Venice,
La., and did significant damage to natural gas processing plants owned by
Dynegy Corp. (DYN), Enterprise Products Partners (EPD) and others that have the
capacity to handle more than 40% of the Gulf's output.
Ivan also bottled up production, but did so by triggering massive underwater
mudslides that tore apart pipelines. Pipeline damage on the same scale doesn't
appear to have happened with Katrina, though it's too early to draw firm
conclusions, the MMS said. "Preliminary reports suggest that Katrina did
not cause the same extensive mudslide damage to pipelines as Ivan, but this is
still preliminary and subject to information which is changing
continually," the MMS said.
The MMS is a division of the Interior Department that administers oil and gas
production in the federal waters of the Gulf of Mexico.
US Oil shale - 20 years before >1mil/b/d
Rand Corporation July
2005
A previous Seattle Times story on
this report omitted an interesting conclusion:
"Consequently, at least 12 and possibly more years will elapse before oil
shale development will reach the production growth phase.
Under high growth assumptions, an oil shale production level of 1 million
barrels per day is probably more than 20 years in the future, and 3 million
barrels per day is probably more than 30 years into the future."
Report: 'Oil Shale Development in the United States, Prospects and Policy
Issues', by James T. Bartis, Tom LaTourrette, Lloyd Dixon, D.J. Peterson, Gary
Cecchine.
Only 12 pages are available at the link, and
this excerpt isn't in them. Hat-tip to Michael D. on ERT for bringing this to
wider notice, we'd appreciate confirmation that this is in the report and any
additional highlights.-LJ
Saudi backs OPEC
increase despite crude surplus OPEC's analysis, backed by industry
experts, is that world crude supplies are ample. Refinery bottlenecks in
consuming nations are the problem. "You know better than I where the constraints
are, they are not on the supply side on crude oil, the constraints are in the
downstream and Katrina damaged some of the infrastructure," said Naimi.
Hurricane Katrina's assault on U.S. Gulf refineries has caused a
refining crisis with 880,000 barrels a day, about a tenth of U.S. plant, out of
action in the world's biggest consumer.
The slowing of global fuel demand growth resulting from highs prices
mean it is in OPEC's interest to push prices down further from Friday's $63
close for U.S. crude.
Riyadh has already scouted refiners to sell more of its crude in
October, but its incremental high-density, high-sulfur crude, difficult to
process into transport fuel, has found no takers. The only option left for its least popular grades would be
to discount prices more heavily.
"We price to be competitive in the market, we don't price to
increase demand," said Naimi.
http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2005-09-17T163614Z_01_MCC746542_RTRUKOC_0_US-ENERGY-OPEC-NAIMI.xml
OPEC may offer every barrel members can
pump http://quote.bloomberg.com/apps/news?pid=10000006&sid=aKXRX9tT.1YI&refer=home
Iran announces oil ‘smart cards’ to
moderate consumption: target date Feb. 2006 http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=35677&NewsKind=Current%20Affairs
Stocks slump on Rita news: Oil analysts and executives are
preparing for Hurricane Rita's impact as energy prices rise across the board.
Stocks move lower. The oil industry is bracing for a disaster as Hurricane Rita
hit Category 4, with the potential to reach Category 5, and heads towards
energy infrastructure in Texas.
"If (Rita) keeps going on its current path, it's going to basically
destroy the rest of the (energy complex Hurricane) Katrina didn't,"
Matthew Simmons, CEO of independent energy investment bank Simmons & Co.
International, told CNBC's "Squawk Box." "It's a problem that could easily be as significant in
my opinion, and I hope I'm overly exaggerating this, as Pearl Harbor,"
Simmons said. It could
take two or three years to recover from the two storms, he added.
Given than four oil refineries are already down, Rita "really is a national
disaster," Valero Energy (VLO, news, msgs) CEO Bill Greehey told
Reuters. http://moneycentral.msn.com/content/CNBCTV/Articles/Dispatches/P130219.asp
For great Oil Industry and storm impact
coverage check out The Oil Drum
(TOD) http://www.theoildrum.com/
Matthew Simmons: Are
we now in an energy hole?
Slides from a
presentation to World Affairs Council, Houston, Tx. 13 Sept 2005 http://www.energybulletin.net/9090.html
I Believe We Are Now In A Deep Hole
* Spare capacity is over.
* System was too tight in 2004 and only got tighter.
* Adding significant capacity in key bottlenecks takes 5 – 15 years to effect.
* Too much oil and gas production is now in irreversible decline.
* Demand has a resilience not easily hampered by price.
* Stocks got to “just-in-time supply.”
Katrina Was An Energy Tipping Point
* Risk of experiencing finished product shortages over next 6 months is high.
* Risk of forced natural curtailment is high.
* Rig shortage was already real and got far worse by systemic mooring system
failures.
* It might be impossible to recreate energy cushion without permanent demand
destruction.
* The pain is currently U.S. based: The tightness soon becomes global.
Post-Peak Oil Is A Big Deal
* Oil demand growth is insatiable.
* Oil use can never exceed useable supply.
* Working out a peaceful resolution to this pending clash can be done, but will
not be easy.
* If issue is ignored and it happens, it becomes a social tipping point.
* It is past time for data reform.
* It is time for a Global Energy Summit.
Tom Whipple: Peak Oil: The
First Casualty When the historians come to write the history of the
21st Century, they may well record that the African nation of Zimbabwe was the
first to succumb to peak oil. For students of African economies, the current
Zimbabwean meltdown comes as no surprise. During the last decade, Zimbabwe 's
dysfunctional government got itself involved in war that drained the treasury
and then implemented a land redistribution program that drove out the white
farmers. ...
A few years ago, the government turned much of the oil import business over to
the private sector while retaining price caps on retail gasoline. Obviously,
when the cost of oil got higher than the permissible sales price, gas stations
went dry. This has resulted in a black market where gasoline is selling for ten
times the controlled price.
While Zimbabwe 's multiple economic problems make it an atypical case, it is
the first country to run almost completely out of oil. This, in turn, gives us
a look at what will happen as the consequences of expensive and scarce oil
spreads around the globe.
By last week, nearly all buses and commuter taxis in the capitol, Harare, had
stopped running, forcing tens of thousands to walk to work. While there are
still a lot of private cars on the road, they are being fueled with $36 a
gallon black market gasoline.
Falls Church Observer http://www.fcnp.com/529/peakoil.htm
Andrew DeWitt: Peak Oil and Japan’s Food Dependence “As noted above, Japanese consumers already "eat"
a very great deal of oil. Not only is there much domestic haulage, but the more
than 60 million tons of food imported annually is transported over great distances
as in the case of North American grain and fruit, and Australian beef. Japanese
attention to the food problem, however, has thus far centered on the amount of
food wasted and the environmental impact of the greenhouse gases give off.
... The extent of this transportation of foodstuffs can be calculated as "food mileage" by multiplying the
transportation distance with the volume of food transported. The higher the
food mileage, the larger the burden that a particular country places on
fossil-fuel resources, as well as the global environment.
...Japan's total food
mileage in 2001 was a massive 900 billion ton-kilometres. This was more than three times that of the
United States. But the numbers are even more startling when seen in per capita
terms. Each Japanese
consumer annually consumed 7093 ton-kilometres of food whereas consumers in the
US consumed 1051. Even Britain, another island nation, took only 3195
ton-kilometres per capita.” http://www.japanfocus.org/article.asp?id=397
