Posted by Max Dunn
Sun, 03 Apr 2011 17:05:22 GMT | 1 comment
In Peak Oil in 2012, I looked at the strong link between worldwide GPD and oil consumption. But what about per capita oil consumption? It turns out that there is a very interesting story there too.
As reported by Frank Holmes in Seeking Alpha, China currently consumes 2 barrels of oil per per per person. At the same PPP level of $5,000 per year, Japan consumed over 18 barrels, Taiwan 6 barrels and Korea 4 barrels!
Since China currently consumes about 10 million barrels a day, just doubling their per capita usage would require an extra 10 million barrels a day, which is 12% of the world total. Since oil production has been relatively flat since 2005, it is unlikely that additional oil production will ever be able to provide that amount.
This is just another indicator that our worldwide oil supplies will never again be able to meet our total oil demand.
Posted in Peak Oil
Posted by Max Dunn
Sat, 12 Mar 2011 18:43:02 GMT | no comments
How much oil do we use in the United States and where does it come from? This is a question that hasn’t been exactly clear for me until I read this article on the Energy Information Administration (EIA) website. Here is the quick answer.
The US is the largest oil consumer using 19.1 million barrels per day (mbpd). We are the the third largest crude oil producer at 5.5 mbpd. In addition, we produce 3.9 mbpd of biofuels, natural gas liquids and processing expansion. This means we need to import about half our oil, or 9.3 mbpd.
Contrary to popular belief, two of our largest oil suppliers are Canada and Mexico. Overall, Western Hemisphere nations provide about half of our imported petroleum.
Now you have it. While the US uses about 19 mbpd, we produce 5.5 mbpd of crude oil and create another 4 mbpd of fuel products so the 9 mbpd we import is about half our usage.
References:
EIA. (November 29, 2010). How Dependent Are We On Foreign Oil? U.S. Energy Information Administration. Retrieved March 12, 2011 from http://www.eia.gov/energy_in_brief/foreign_oil_dependence.cfm
EIA. (March 8, 2011). Short-Term Energy Outlook. U.S. Energy Information Administration. Retrieved March 11, 2011 from http://www.eia.doe.gov/emeu/steo/pub/contents.html
U.S. Census Bureau. (March 10, 2011). U.S. International Trade in Goods and Services. January 2011 U.S. Census Bureau. U.S. Bureau of Economic Analysis.
CB11-41, BEA11-09, FT-900 (11-01). Retrieved from http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf
Note: All numbers for 2010 except oil additions for 2009.
Posted in Peak Oil
Posted by Max Dunn
Thu, 30 Sep 2010 14:32:28 GMT | 1 comment
A new report from Rice University confirms what I have been saying for a long time – electric vehicles (EVs) are the best way to reduce America’s oil dependency.
The report found that if only 30% of vehicles are electrified by 2050, oil usage would be reduced by 2.5 million barrels a day and carbon emissions cut by 7% – even if the electric generation mix remains the same as today. They also found that a carbon tax of $30 a ton would actually increase US dependence on foreign natural gas!
So even if our government is not able to get its act together and institute a comprehensive renewable energy policy, the widespread adoption of EVs will do the job anyways.
(Source: AllCarsElectric.com)
Posted in Electric Vehicles, Global Warming, Peak Oil
Posted by Max Dunn
Wed, 07 Jul 2010 03:36:35 GMT | 1 comment
I have long heard that oil companies get a lot of special tax breaks, but no-one has ever been able to explain clearly what those tax breaks actually are. Now an article in the New York Times As Oil Industry Fights a Tax, It Reaps Subsidies provides the best explanation I have seen. Some of these tax breaks are:
- Moving corporate headquarters offshore to avoid taxes in the US
- Capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general
- Leasing rigs, like the Deepwater Horizon, to take advantage of a special oil industry tax break that allows them to write off 70% of the leasing cost
- A lingering provision from the Tariff Act of 1913 that allows many small and midsize oil companies based in the United States to claim deductions for the lost value of tapped oil fields far beyond the amount the companies actually paid for the oil rights
- Reclassifying the royalties charged by foreign governments to American oil drillers as taxes which entitles the companies to subtract those payments from their American tax bills
While some of these ploys are also employed by other industries, like moving their headquarters outside the US, the US tax code makes it especially easy and profitable for oil companies to employ these tactics.
Furthermore, many of these tax breaks no longer have any valid reason for existence since they were enacted a century ago to encourage oil exploration in the fledgling industry and then later in the 50s to decrease Soviet influence in the Middle East.
It is estimated that these tax breaks averaged $12 billion from 2006 to 2008. While this is a large number, it is only a small fraction of the $280 billion the oil industry was taxed in this period.
Nonetheless, with a growing deficit, dismantling these archaic tax breaks for the oil industry would raise badly needed revenue and help reduce the unfair advantage that the oil industry holds over cleaner forms of sustainable energy.
Posted in Peak Oil, Sustainable Energy
Posted by Max Dunn
Mon, 12 Apr 2010 15:18:10 GMT | 1 comment
The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.
“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,” says the Joint Operating Environment report from the US Joint Forces Command.
It adds: “While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India.”
(From: guardian.co.uk)
Posted in Peak Oil
Posted by Max Dunn
Sun, 28 Mar 2010 15:32:54 GMT | 3 comments
There was an interesting article today on The Oil Drum today titled Using heat to refine kerogen from oil shale. The basic idea is that in order to get oil out of shale you need to heat it up, but then the oil can flow away and water can flow in. So first, it is necessary to create an ice wall around the site.
However, both the freezing and the heating takes tremendous amounts of energy. The article states:
“It has been suggested that the technology would need a dedicated power source of some 1.2 gigawatts, in order to yield a production of 100,000 bd.”
Let’s look at these numbers: 100,000 barrels of oil contains 4.2 million gallons of oil and if this were all converted to gas and used in standard cars that get 20 miles per gallon, it would power cars 84 million miles.
However, a 1.2 GW power plant would produce about 28 million kWh of electricity per day and if used for a standard electric vehicle (EV) which gets about 3 miles per kWh (plant to wheels) then it would power cars for 86 million miles.
So why spend all that effort and energy to extract oil from shale when the same amount of energy would power EVs farther?
Posted in Electric Vehicles, Peak Oil
Posted by Max Dunn
Sun, 07 Mar 2010 06:10:06 GMT | no comments
I have often thought that the recession was really caused by the high price of oil and not by subprime mortgages. However, I haven’t seen any credible source to back this up until I read a post by Jeff Rubin today called: We’re all PIGS now.
Rubin worked for nearly 20 years as the chief economist of CIBC World Markets and here is what he believes:
It wasn’t subprime mortgages but triple-digit oil prices that brought down the world economy.
And unless that economy started to wean itself off an ever-depleting supply of affordable oil, there would be other recessions to follow as economic recoveries would simply push oil prices right back into triple-digit range.
While I took exception with a lot of what Rubin said in Why Your World is About to Get a Whole Lot Smaller, here he is in the territory he knows best – economics – and I think his conclusion that record oil prices caused the recession is right on the money.
Posted in Peak Oil
Posted by Max Dunn
Tue, 09 Feb 2010 16:51:56 GMT | 2 comments
The CEO of Petrobras gave a presentation in December of 2009 which shows world oil capacity peaking in 2010 because new oil projects won’t be able to offset the decline in existing oil fields.
These statements are in line with other oil company like Aramco that believes world oil production is on a peak plateau, and Total that doesn’t see global oil production ever exceeding 89 mbd.
(Reference: The Oil Drum: World Oil Capacity to Peak in 2010 Says Petrobras CEO)
Posted in Peak Oil
Posted by Max Dunn
Wed, 25 Nov 2009 16:21:40 GMT | no comments
Oil demand is predicted to rise by 1.3 million barrels per day (bpd) next year to 85.9 million bpd, according to a Reuters poll of the ten top oil-tracking analysts and organizations. This bodes ill for the prospect of meeting the world’s oil demand, which is feared to erode the huge crude stockpiles which resulted from the global recession.
Even though major US crude ETFs like the United States Oil Fund LP (NYSE: USO) and oil companies like Exxon Mobil Corporation (NYSE: XOM) are not showing robust results today, if the demand curve beats the supply curve next year, these stocks will see a major upgrade. "The key question for prices is supply," Barclays Capital analyst Costanzo Jacazio said.
Investment banks Goldman Sachs and BofA-Merrill Lynch have the most bullish outlook for demand, projecting 86.4 million bpd and 86.7 million bpd respectively. This is good news for the likes of USO and XOM.
(Posted on 11/24/09 at 1:45pm by Ed Liston on Benzinga: The Stock Idea Network. Demand For Oil Will Likely Beat Supply Next Year)
Posted in Peak Oil
Posted by Max Dunn
Tue, 12 May 2009 15:55:33 GMT | 2 comments
by Steven Kopits, Managing Director, Douglas-Westwood, New York, 5/11/2009
NEW YORK: In seeking to explain the run up in oil prices from 2004 to 2008, commentators often turn to “speculation” as the primary cause. While speculation – or at least a kind of piling-on – may have explained the very late stages of the oil price rally, the willingness to attribute oil prices primarily to financial investors – as the CBS news show ‘60 Minutes’ did a few months back – risks drawing the wrong lesson from the period. Let’s re-wind the clock and recall the events of the time.
Read more...
Posted in Peak Oil
