Author Archive
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Post-Peak Mexico
Gregor MacDonald, | January 23rd, 2010 at 12:46 pm
Each year brings fresh updates to the body of peak oil research but I thought the recent An Explanation of Oil Peaking, R.W. Bentley, University of Reading 2009 was particularly good reading. Bentley does such a good job of explaining in direct terms a simple model for peak oil, without excluding any of the attendant complexity. (This would be a very good introduction for someone new to the subject). I especially liked his articulation of how the total production arc for, say a country or a region, is a sequence composed of the largest fields eventually giving way to many smaller fields. That description made me think of the post-peak production profile of the United States, with its long-life extension at levels well below the 1971 peak. And, it also brought to mind Mexico.
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Venezuela Bids to Become a Dysfunctional Petrostate
Gregor MacDonald, | January 21st, 2010 at 7:59 am A great deal of the newsflow from Venezuela over the past decade has detailed the gutting of PDVSA, the national oil company, for the sake of illusory programs dreamed up by one Hugo Rafael Chavez. As this has gone on for some time now it was inevitable that Venezuelan oil production would eventually suffer. Indeed, after serial takings in the Orinoco, the stuffing of PDVSA with cronies, and the depletion of its capital, there’s little surprise that Venezuelan oil production is down 1 mbpd since 2001. That’s a 30% fall.
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1965: When Oil Finally Overtook Coal
Gregor MacDonald, | January 16th, 2010 at 11:23 am We generally think of the Oil Age as having begun around the start of the 20th Century. Henry Ford began production of the Model T in 1908, and British coal production would peak soon thereafter in 1913. And yet, despite the fast global uptake of oil through the first half of the century–and both world wars–it was not until 1965 that oil use in BTU terms overtook coal.
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Peak Non-OPEC in 2010, Officially Speaking?
Gregor MacDonald, | January 15th, 2010 at 7:59 am You will recall the big dust up between the Guardian newspaper and IEA Paris in November of last year. The newspaper broke the story that the international energy agency had either been fudging data or at the very least downplaying data, in an effort to diminish the urgency of peak oil. The Guardian claimed to have statements from not one but two whistleblowers, either working or previously working inside IEA. More sensational was the claim for motive: the IEA had been putting sunny forecast spin on top of the data at the request of US government in Washington.
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Non-OPEC Production Soars in Latest EIA Data
Gregor MacDonald, | January 12th, 2010 at 10:00 am In October of 2009, for which EIA Washington just supplied the latest data, Non-OPEC crude oil production soared by over 500 kbpd, going from 41.567 mbpd to 42.109 mbpd. This is the first time since the Spring of 2007 that Non-OPEC hit a single month’s production level at/above 42 mbpd. (Nota Bene: all data has been backward adjusted for the additions/subtractions to OPEC/Non-OPEC: Indonesia, as one example).
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Readings: Tuesday 12 January 2010
Gregor MacDonald, | January 12th, 2010 at 8:28 am The Future of the Southwest – Localization and Carrying Capacity: Chris Nelder, getrealist.com.
Power Surge (Energy demand in China): Geoff Dyer, The Financial Times.
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Gasoline and Unemployment in Southern California
Gregor MacDonald, | January 11th, 2010 at 12:08 pm The recent release of State and Metro unemployment data from BLS comes at a time when oil prices have just made a new, 52 week high, and it seems appropriate to consider the these developments together. As I have noted previously on this blog, Southern California is a kind of super-region in terms of population and our collective vehicle fleet to both the State of California itself, and to the United States as as whole. Indeed, there is no more perfect region in the country to watch the effects of the housing crash, unemployment, changes in interest rates, and the price of oil.
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Inventories and the Price of Oil
Gregor MacDonald, | January 7th, 2010 at 11:44 am Over the past decade two blindspots have consistently marked popular oil price forecasts, of the kind you see each day on TV. First, there is the ongoing misunderstanding about inventory measurement as an absolute number, rather than on a days supply basis. I would agree that at the extremes, when oil inventories are very high or very low, it does make sense to consider the absolute measure. But outside of these extremes, relative inventory on a days supply basis is a much stronger price determinant because the oil price will guide itself on a 6 month basis towards those conditions. Most of the oil price forecasts and analysis you hear on TV is about the 30 day market, which has as its only focus the price needed to clear smaller changes in under or oversupply on a local basis.
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Coal? Sold! to the Developing World
Gregor MacDonald, | January 6th, 2010 at 8:00 am The energy source of choice in the developing world remains coal. And, as I have argued, unless the developed world undertakes energy transition now, it too will be forced back into coal as the decade progresses. Today comes an intriguing story from Bloomberg, that the massive and iconic Richard’s Bay Coal Terminal in South Africa may have, for the first time, shipped more coal to India than Europe:
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Gregor Weekly Macro Note
Gregor MacDonald, | January 4th, 2010 at 7:58 am The GregorWeekly model portfolio was initiated the last week of August in 2009, with $100,000 USD notional. My stated goal at that time was to achieve positive absolute returns, while assigning a lesser role to individual equities.
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Choosing An Energy Deficit
Gregor MacDonald, | December 15th, 2009 at 8:05 am Energy analyst and author Richard Heinberg published a sobering piece on energy transition and climate change last week, and he hits upon a theme that I’ve been addressing in my recent work on coal. Titled, Trying to Save the World, Heinberg writes about the energy deficit one would be choosing to enter, as part of carbon reduction:
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Exxon Faces Reality
Gregor MacDonald, | December 14th, 2009 at 2:44 pm Exxon is like the government. It’s constitutionally unable to face reality. This has been the case for some years now, and has been reflected in their refusal to accept that spending billions annually would not result in any appreciable growth in their oil reserves. I’ve been snickering for years at XOM’s stuck-in-time approach. Here’s a snippet of a post of mine from a year ago, Advice to Major XOM.
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Podcast Picks: Friday 11 December 2009
Gregor MacDonald, | December 11th, 2009 at 12:08 pm Anthony Bolton Goes to China: Business Daily, BBC World Service .
Gas, Shale, and Hydrofracking – problems of shale gas extraction: Medlock, Mall, Adams, Wujnovich, WBUR On Point Radio.
Aqua Shock – The Water Crisis in America: Author Susan J Marks, Financial Sense Online.
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MacroTwits Hour With Gregor MacDonald
Gregor MacDonald, | December 7th, 2009 at 7:57 am On MacroTwits Hour Gregor Macdonald discusses energy transition issues; covering coal, natural gas, oil, and solar. He begins by reveiwing his "Coal World" presentation from the Agoracom Conference last week. To view part one please click here. To view part two please click here.
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Coal World
Gregor MacDonald, | December 3rd, 2009 at 8:12 am The November issue of Gregor.us Monthly, Coal World, has now been published and it carries an unhappy message. I am forecasting that the world will not successfully transition from oil to a broad basket of renewable energy and power sources over the next twenty years. Instead, I strongly favor an outcome in which oil, the construction fuel for the global buildout of new power generation, becomes so expensive that the world becomes energy poor, and turns instead back to coal. In case you hadn’t noticed, the process of energy impoverishment has already begun.
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