Tarry for the Nonce

August 25, 2005

Scotland Is Open

Filed under: News — lmwalker @ 3:39 pm

Ireland is closed this week.



  1. Wow, you visit, and shortly thereafter the whole country is closed? Just a coincidence, I’m sure…

    And while on the subject, I’m getting pretty annoyed with all of you. I mean, I leave the country for one day, and come back to find gas prices have skyrocketed. Can’t you people keep things under control in my absence?

    Comment by Toly — August 25, 2005 @ 5:30 pm

  2. HAHA..well, we made sure that when you came back you’d be paying more…had it arranged and all that. I need a new boat, so cough up the extra doh!

    Actually, you can blame China for the most part, with their increased demand.

    Comment by Andrew P. — August 25, 2005 @ 5:41 pm

  3. We are running out of oil, so naturally the prices will hit record highs.

    Keep your wind-powered vehicles at the ready.

    Comment by auntlori — August 26, 2005 @ 7:12 am

  4. Actually, to be truthful, oil reserves are reaching the peak mark. Ie. the amount of oil we have left is going to slowly dwindle from here on out, so start buying those oil contracts now before everyone switches to fuel cells.

    Its rather fascinating. To find out more information, I recommend Hot Commodities by Jim Rogers.

    One of the books President Bush is reading is Salt: A World History by Mark Kurlansky, who chronicled the rise and fall of what once was considered the world’s most strategic commodity.
    For most of recorded history, salt was synonymous with wealth. It established trade routes and cities. Adventurers searched for it. Merchants hoarded it. Governments taxed it. Nations went to war over it. … in the early 20th century, salt became ubiquitous.

    Why is it every year I smack myself for not buying oil futures?!

    Comment by Andrew P. — August 26, 2005 @ 8:01 am

  5. Bah, anyone panicing about peak oil theory, the Saudis or “running out of oil” needs to learn about something called proven reserves. Don’t forget too that our bigest oil sources are Canada and Mexico

    Plus, the market is already taking care of the “crisis”.

    Not that this has anything to do with Ireland.

    Comment by Mark — August 26, 2005 @ 9:44 am

  6. No one’s panicing about peak oil. Regardless, the market/crowd psychology is working w/ regards to oil. So…its a great time to make money from oil. Besides, a number of studies indicate the crowd is usually right.

    From what it looks like, you might want to check your facts. There’re 2 reasons prices are on the rise:

    1. Supply is less than demand.
    2. Underinvestment in the capacity to pump and transport oil 1

    And, unlike gold [which does not get consumed], there’s a finite supply of oil which exacerbates the issue.

    …by 2004 we were importing 13M barrels per day [or bpd] [4.745B barrels per year or bpy], more than 60 percent of the oil we use… 2

    Now, if there’s 77M bpd consumed world-wide (assuming that there wouldn’t be more barrels produced than consumed), and we calculate that out… that’s approx 28.105B bpy. According to the site you linked to, the 175B barrel ‘discovery’ in Canada would be used up in approx. 6 years, 2 mos, 21 days, 14 hours, and 15 minutes at current consumption (assuming demand doesn’t increase or decrease during this time and that all of the world’s oil came from Canada). So, let’s add up the numbers in the article you linked to, paying particular attention to the graphics versus what the article postulates. Particularly:


    The article text claims that Iraq has half of the 175B and Saudi Arabia has approx. 2/3 more (175/2 + 175 + 262.5) = 525B. Now, unless my calculations are off, the article’s pretty pictures indicate that SA alone has ~686B barrels of proven reserves.

    Let’s say that this is correct. Let’s say that the bad math is due to incorrect assumptions about what 2/3 equates to in real life. Let’s assume that we have 900B barrels of real reserves (both light crude and ‘heavy’ crude) in Saudia Arabia. Let’s say that both South America and Canada have 200B, plus let’s throw in another 400B for kix and wiggle room.

    Now, we have approx. 1500B in proved reserves. How long would this last us? Approx. 53 years, 4 months, 13 days, 4 hours, and 48 minutes. And that’s a fairly liberal estimate. Even if we went and stretched it and used the #s in the second graph, being very generous to Latin America by giving it the same amount that is in Europe, we still walk away with only 2484B barrels in the world. Which means, that we have approx. 88 years, 4 months, 17 days, 19 hours, 49 minutes, and 27 seconds to find an alternative fuel source. Doh, now we have 26 seconds…25….24…. Assuming the approximate consumption never increased beyond what it was in 2004 (a really poor assumption).

    I tend not to trust articles that contradict themselves. I mean, if the figures say one thing, but the text says something else, you suddenly have a credibility problem, and therefore must discard, or at least question, most, if not all, of the information presented. Are the numbers current and is the data relevant is another question that comes to mind; however, that is for a separate topic.

    The article postulates a postion that relies on an assumption (that of attempting to prove that the USGS is more credible than the DOE), which it fails to do. It assumes that the government does a better job of monitoring the world’s energy reserves than the industry (and may be justified in this postion); however, its usually best to err on the side of caution.

    The chapter goes into more detail regarding the external reserves and ‘heavy’ oil, but these aren’t going to save us, especially with the given infrastructure build-out that is required to squeeze every last drop of oil from the earth.

    I’ll throw this in to give you an idea of the complex nature of the problem:

    Geologists and oil analysts estimate that OPEC is sitting on top of more than half of the world’s proven oil reserves, supplying more than a third of the world’s oil. By fall 2004, OPEC was reporting that it had increased its production from 23.5M barrels per day to 26M and was ready to pump even more. Saudi Arabia…maintained that it was producing 8 to 9M barrels of OPECs daily prroduction. Saudi oil officials contend that within 48 hours they can ratchet production up another 2M barrels a day and continue pumping that amount through 2009 [10 – 11M bpd total]. They also claim that by 2015 they will have new fields on line and will be able to pump 2 to 3M more barrels a day [12 – 14M bpd total]- and continue to do so for 50 years. In addition, the Saudis claim to have 260B barrels in proven crude reserves, more than 1 quarter of the world’s total supplies.

    The “reported” reserves of the major OPEC producers have raised eyebrows since the 1980s….

    Why is it that OPEC’s oil has been increasing, while the rest of the world’s reserves are becoming depleted?

    The output for an average oil field, according to geologists, declines by about 4.8 percent a year. In 2000, oil production worldwide was about 77M bpd. By 2005, existing fields will be producing 60M bpd – 47M by 2010. The U.S. fields have been declining for 30 years; Britain’s reserves are dwindling fast. In 2004, analysts were forecasting a net growth in non-OPEC oil (not counting Russia) of zero.

    The zero-growth scenario has led some analysts to charge that the OPEC increases were phony – mere “paper barrels” of oil that existed only in the minds of oil producers. (Remember, OPEC production quotas are based on each member country’s reserves, so everyone wants to report higher reserves). More ominous still, a handful of geologists and analysts have invoked Hubbert’s ghost by predicting that the peak of world oil production is nigh-literally now or within a decade. Colin Campbell, a retired British geologist who worked with major oil companies from 1957 to 1990, has predicted that production will peak around 2005. The British Independent energy-analysis firm Douglas-Westwood warns that “the world is drawing down its oil reservers faster than ever and is facing a future of oil price increases.” In the U.S., Ken Deffeyes at Princeton University has been updating Hubbert’s work and is not optimistic. Henry Groppe of the Houston-based oil industry analysts Groppe, Long & Littell, who has been analyzing the oil business for more than 50 years, is convinced that worldwide oil production peaked sometime in the first five years of this century, i.e. between 2000 and 2005. PFC Energy, petroleum consultants in Washington, D.C., predicts peak production by 2015.
    … 3

    1. Hot Commodities 2004 Random House, Jim Rogers, p.152
    2. Ibid. p. 126
    3. Ibid. pp. 128-130

    Oh, and Laura, underline doesn’t work, superscript doesn’t work, its really annoying (your site kept moving the #3 reference above on me outside of the blockquote when I didn’t want it italicized)…you need to fix your blog. Not sure what type of problems you’re trying to curb, but it might be more beneficial to just remove your filters all together.

    Comment by Andrew P. — August 26, 2005 @ 6:29 pm

  7. Not sure what type of problems you’re trying to curb, but it might be more beneficial to just remove your filters all together.

    I can’t figure out how to remove it. If you know how to get the sanitizer out of MT 2.661, feel free to point me in that direction.

    In the meantime, let me know what html tags you want to use and I will try to accommodate you.

    Who in the world finds superscript necessary in casual HTML?

    Comment by laura — August 29, 2005 @ 4:26 pm

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