ASPO Thread

by Saint Bif

Part I – Monday

Jim’s Monday post was obviously still on his mind tonight as he, Dennis Hayes, Randy Udall and Richard Brenne took hits on a tequila bottle and squared off in philosophical debate that was supposed to address our post-peak future. Brenne providing much needed levity and picked on Jim repeatedly, which Jim and the crowd enjoyed.

From my notes but in no particular order, not that there really was one. Jim made his Millard Filmore Whigs and Abe Lincoln-moment parallel, and he wanted to get that off his chest, which was alright. Politics had been somewhat down-played until then but Jim went big on a “the party that wrecked America” rant (there was some vigorous applause, a few protests), but he also pushed back hard on the idealists in the crowd and who have graced the podium who keep yearning for a “lock arms and all work together” solution. Jim said we’ll never get to the kumbaya moment, it isn’t going to happen.

Jim talked about how in future people will necessarily create a new reality, it could be very different, empiricism and logic as we may know it will be out the window, and he tried to get this into WMBH. (beats me, this unfortunately may be about the fat lady).

It was Brenne, as moderator, with the best lines, “the rat tail is the gateway to full mullet-hood”, and also Jim as bringing his experience of having been through “peak hair” already. And finally, regarding the airline industry, we’ll never be able to get the passengers to shovel coal so its not going to happen, however hypersonic works, but only of you fly non-stop around the whole world. Jim, saying techno triumphalism has run its course, transition will not be orderly, and Brenne saying Heinburg thinks we’ll see something like WMBH except maybe 15 minutes early than what Jim says. On and on it went.

Hayes concerned more about abundance of coal and uranium rather than scarcity (get it?) (note: around then I spilled beer on my notebook and after mopping it up scribbled “woah”. It was in fact a double woah). Randy Udall also trying to reconcile that it turns out orangutans are more intelligent than chimps and so maybe the higherl intelligence is at the other end of the primate lineage (score one for dave), and afterall, if you keep going with that: the trees have all along equipped themselves with very efficient leafy solar panels. (I know. Me too).

Udall: maybe its no coincidence that peak environmental achievement happened to coincide with peak oil discovery. Crowd fidgets and imagines a permanently trashed world rather than perma-utopia. Yes but there may have to be certain compromises/tradoffs on environment. Grumble.

The tequila did take firm hold eventually, as evidenced when Udall says he’s not convinced water is a limiting factor on world population going to 9 billion. Huge groans from the bard on that one.

Someone yelled something about psychopathy (that’s what my notes indicate anyway, though I don’t know context, or who yelled it at who).

PO conferences are not the best place to meet women, Jim quipped.

All the giants of PO here except Kris Kan. Too bad. All the main actors and supporting cast are friendly and approachable.

OK sorry, interesting night, but on serious side, I have some good info, and I’ll work up some notes and post some highlights.

Part II – Tuesday

A diverse crowd at ASPO-USA meeting as you might suspect, and presentations running the gamut as far as content, and unfortunately, quality, especially in addressing transportation piece. I think these presentations will at some point be available on their web site so I won’t attempt to reconstruct it all, but will offer a few highlights and comments where I was interested and took notes. I did not see all of the talks but I was in most, and here are the ones I thought were most interesting:

=======

Kjell Aleklett -President ASPO International: What’s going on in Africa right now (oil and mineral extraction) is the biggest robbery in history and no one is talking about it.

========

Matt Simmons – talked about how big banks used to use an 8:1 limit on investment risk and our geniuses on Wall Street have apparently been going at more than 400:1. Not sure how he gets that number but the gasp from the audience was impressive.

He said the gasoline purchasing behavior in wake of Ike is a good sample of what can happen even when the disruption is relatively minor compared to what we could see in future. The urge of millions to “top off” the gas tank can crush our usable gasoline stocks pretty quickly, creating snowball conditions that only make matters worse.

Why expect a political leader to give the public the straight scoop when this will only cause panic and bad behavior. Unless you have a solution or plan to go with the bad news, don’t upset the masses. Presently there is no plan.

We don’t know our actual usable gasoline stocks, its all based on sampling of primary supplies, then the numbers are “grossed up” and seat of the pants estimates made for secondary and tertiary contributions.

He talked the usual warning on lack of rigs; lack of knowledge, talent and skills; lack of college grooming and production of engineering and scientific talent; no young Americans going into these areas of education/skill.

Rusting infrastructure. Expect massive effort to upgrade this at some point. His usual pitch on this topic.

Need to be brutally honest about EROEI for developing Barnett shale. Maybe 1:1!?

IEA report coming out Niov 15 may be brutally honest. This will shake up and upset some people.

Back in the 70s the way we rationed gasoline was odd-even license plates, but that was in the days we had gas station attendants. Nobody is printing ration coupons, better do something.

He said the majors were in a state of permanent liquidation.

========

Jeff Rubin, Chief economist, CIBC World Markets: Triple digit oil prices matter with trade.

Globalization = wage arbitrage, he said.

But transport cost is trumping that now. It’s no longer a matter of cheap labor markets when transport cost gets super high.

$20 bbl oil = incidental cost

$100 bbl = 40% increase in transport cost.

$200 bbl = 80% increase in transport cost

It’s no longer where cheap labor is but where factory is in relation to raw materials and market. Transport cost has essentially become a tariff rate. $150/bbl quadruple tariff rate, and $200/bbl quintuple tariff rate.

In 1970s trade was less emphasis and domestic markets huge emphasis, trade was mostly with neighboring countries. We’re going back to that.

In 2000, a 40ft shipping container shipping cost: $3K

2008 it was $9K

At $200/bbl it’s 5x what we were ($15K?)

Iron ore from Brazil shipped to China and rolled steel manufactured and sent to U.S. = $90/ton. Transport cost has trumped labor cost here as steel manufacturing has increased 10% in U.S. and Chinese imports are dropping. Important because for years the trend was opposite. Energy cost increase sole reason for the shift.

Part III

Tuesday

Paul Gipe – Windworks. For grins he walked through a scenario for replacing all current FF consumption in US and Canada with wind power. What would the power requirement be?

2,500,000 MW total replacement of FF
800,000 MW for cars and light trucks (based on 1/3 kWh /km)
200,000 MW heavy trucks

For reference, this year we’ll add about 8,000 MW in wind turbines he said. Last year was 5600 MW.

Michael Webber – U of Texas. A few items he mentioned on coal, coal to liquids (CTL) and biofuels.

Coal reserve estimates/methods have not been revisited since 1974.

A comment on fusion – “We’ve been within 50 years of having fusion for 60 years.”

Body slam on Brazil oil and biofuels – “Brazil is the next super power and always will be.”

Water requirements to fuel production ratio (vol.):
CTL is 7:1
Conventional coal 1:2.5
Irrigated biofuels 1,000:1

“Alternatives are so great we keep coming back to coal”, he said. (Scattered sounds of evil laughter in the room mixed with a few boos and hisses). Expects a 70% increase in use of coal in US by 2030. Already 2/3 of it transported by rail and it’s a bottleneck. Would need to double much of the trackage in US.

USAF is worlds biggest single customer of liquid fuel. By 2016 they want at least half of their annual 3.3 billion gallons jet fuel to come from domestic sources. CTL is the preferred way to do it (compared to all the other ways I guess?). Problem is recent legislation (Sec526) prohibits alt fuels that are GHG intensive. Woops, mulligan please.

49 Replies to “ASPO Thread”

  1. That was cool, Bif, thanks for posting it.
    So now even ZK has a roving reporter, huh? “Next from Bif, our man on the scene… ” ; )

  2. Wearing my hat as editor I try not to comment too early on posts, but I just (sorry thal) have to say this is excellent. I think when you get back you should seriously consider writing more.

    If you need to “rove” and “report” than I suggest you write about your trips to the mall or Starbucks. I’m not kidding either. You have talent and I want you to practice here.

    In fact, when you are done at ASPO can you go directly to Wall Street? We need boots on the ground. It’s all so confusing for the layperson.

  3. Thanks for the cruel compliments!

    OK. Clarification. Sorry, the comment on political leaders/candidates needing to hold off on giving straight scoop to the public (unless a clear plan can be offered for addressing it) was not made by Simmons, but rather was added to the discussion by Robert Hirsch. [It was obscured by my note to self:… “no sense needlessly/preemptively detonating the big nasty OMG SHTF public reaction, but… plan?”]

    Continuation of “report”:

    [I moved the rest into the main post under Part II – JR ]

  4. ya, for whatever its’ worth, i’ve been betting on gas to L and CTL. just because i think we’re gonna need(want? is maybe more appropriate) liquids more than anything else, in the short term anyway. that’s what drove ethanol, until people started to say, “oh shit”. all this is pretty obvious, i think.

    surpised that there’s not more commenting on drill, baby, drill. we will, or at least we’ll try.

    very nice reportage(reporting?) biff.

  5. Read somewhere that Ghawar is declining at 8%, along with Cantarell. The same source said the underlying depletion rate of the giants is now about 7%.

    There are no available rigs to drill, baby, drill, per Matt Simmons. So it’s little more than a cry, like a baby bird does for its mommy when cornered by the big bad cat.

    Careful on your bets, dave. You’re assuming there will be some excess energy out there to develop CTL and GTL. We may be scrambling to maintain what we have, so nothing will be left over for new projects.

  6. Great report, O Sainted One!

    Dave, I think liquids are important because they can be transported by pipeline or tanker and easily dispensed into vehicles. Gas only matches the first part… any fool can pump gas into a TPC, but a trained attendant has to refill the propane tank. Liquids are also safer in that they can be stored without pressurization. I once repaired a perforated motorcycle gas tank with bondo & it has been fine ever since. Betcha can’t do that with a propane tank.

    Your investment/betting strategy might be a pretty good one — if we don’t have the energy to develop alternatives, we’re screwed anyway & taking a bath in the stock market won’t even register.

  7. FAR, GTL is not the same as a propane tank. I think the idea is to create a liquid fuel from gas, not just pressurize it into a liquid. You boys should know these liquids ploys will not scale and will not produce at the replacement rates needed. dave is trying to make a buck, just like the next guy, huh, dave?

  8. Bif, great stuff. I thought I already said this, but cannot find the comment. Appreciate the concise, summary style.

  9. “ya, like we’re gonna be worried about GHG’s in 5 years.”

    I thought this issue was very divisive at ASPO. The climate crowd and PO-types are not at all peas and carrots, but seem more like crips and bloods. I guess its not hard to see why that schism would occur.

  10. eh, you can always count on people panicing and doing stupid shit. the problem is that you never know exactly what stupid shit they’ll do and when they’ll do it.

    my own thoughts have been something like, when oil hits 180, maybe 200, we’ll see what’s happening at the time, i’m bailing out of the markets completely.

    GHG’s? look at china, they don’t give a fuck, and niether will we if, or when, we need to make stuff again.

    drilldrilldrill, we’ll try, at least that’s my bet. will we find? fuck we don’t even know where to look. there’s a lot of geophysical mapping services that might be good bets. what do you know about that shit Doom? we got capital on this board. fucking jr can launch an ipo for us. we’ll be fucking rich. you think i’m joking but i’m not.

  11. i mean shit, a row boat and a couple of sticks of dynomite. what else do we need? you could write reports and shit.

  12. dave, sorry, i keep forgetting to make the distinction between helping ourselves and helping society. yes, there’s a buck to be had offshore. that’s how Bush daddy got his billions. but, most of the really good spots are drilled already–GOM. there’s oil off the east and west coasts, and probably some in the arctic, maybe even antarctic offshore.

    schlumberger and halliberton know how to prospect for it, using at sea seismics, magnetics and gravity maps. probably best to hire them or buy their stock, there are smaller companies also, like western geophysical. maybe get lucky and find a big one, like the Brazilians did.

    i teach this shit., but that’s a far cry from doing it. otoh, the secret is marine geophysics is both easy and fun to do. and geophysicists make great drinking buddies. most of my former geophysics classmates have retired already, rich bastards.

  13. Doom, I know that CtL and GtL end up with liquids, and that it ain’t gonna scale… I was pointing out why people want to do it. ;-)

    There was a map on ToD over the last week or so that showed the estimated oil to be found off the coasts — compared to the well-tapped GoM field(s), it ain’t all that much. It leaves me to wonder why the oil companies are pushing their pet congresscritters to let ’em have it. Personally, I think the goplets hate the idea of environmental preservation so much, they just want to screw up ANWR and the coastal areas on general (lack of) principle.

  14. To everyone’s delight, Robert Hirsch made a big fuss about the words “willful blindness”, and now everybody likes to work it into their rants, but it was Neil King of the WSJ who had coined this a day earlier in his talk about the MSM not digging into and reporting on our energy predicament. Somebody in the back asked what it would take for the youth of America to know anything about energy and Neil King jokingly suggested they might begin their learning from Kris Kan’s PO striptease tutorial.

    In order to get into the small room where Neil King and other journalists were talking and fielding questions about how PO is handled/avoided/soft-pedaled in media, you had to cut through the back of a giant meeting hall where hundreds of women were gathered for a prayer session and sing-along. Even with our door shut we were still serenaded by gospel tunes and thunderous hand clapping, making the serious discussions regarding the barriers to public understanding of energy realities in a way surrealistic.

  15. Although I have read the Archdruid’s blog from time to time I’ve never been a big John Michael Greer fan. However, upon encountering him at ASPO (hard to miss with his very very long beard) I found him to be a very pleasant fellow with a witty sense of humor and a huge laugh. I am considering giving his blog another look.

  16. Ah well, I live for irony. It is this prospect that gets me out of bed in the morning.

    the age of irony is nigh well over.

  17. schlumberger and halliberton know how to prospect for it, using at sea seismics, magnetics and gravity maps. probably best to hire them or buy their stock, there are smaller companies also, like western geophysical. maybe get lucky and find a big one, like the Brazilians did.

    doom, here’s the deal. we get hookers to sell our shit to the arabs. arabs love hookers. this fucking no lose. i’ll send you a business plan with the details. you think i’m jokeing, but i’m not.

  18. Holmes I can’t say a lot about Africa except that as far as raw extraction of energy and minerals goes we haven’t begun to seen the sheer immensity of effects. With all the concessions going it would probably be easier to map the areas NOT to be affected. As somebody said, Africa is now where neo-colonialism meets neo-neo-colonialism. That’s too abstract. I prefer to call it expeditionary land rape.

    It seems that nearly all countries of the east and west are ratcheting up the intense competition to loot and exhaust Africa of its fossil fuel, minerals and other natural resources endowment, taking down the future of its people and what’s left of its ecosystems in the process. Perhaps the world economic engine will throw a rod or blow a gasket before this progresses all the way to a complete hollowing out of the continent.

    Another area of concern that some people are talking about is the inevitability of mass migration of people in response to changing climate, drought, and loss of soil productivity, particularly in the Subsaharan regions, and the obvious geopolitical implications between countries in Africa, and between Africa and Europe and regions beyond.

  19. Bif, JM Greer is a pompous ass. If he’s right, I wanna be wrong.

    He’s kinda long winded, too. Boring pompous ass.

  20. Another area of concern that some people are talking about is the inevitability of mass migration of people in response to changing climate, drought, and loss of soil productivity, particularly in the Subsaharan regions, and the obvious geopolitical implications between countries in Africa, and between Africa and Europe and regions beyond.

    dieoff is a given.

  21. He’s kinda long winded, too. Boring pompous ass.

    i’m half way through his book. the first half bordered on a form of genius, with his relation of action to myth and such. i’m really bogging down on second half. like survivalists are somehow “wrong” or something. i mean, i don’t want a fucking cabin in the woods or whatever. but if that’s what turns your crank….. ok with me.

  22. “JM Greer is a pompous ass.”

    He certainly can be that. A lot of these guys, including JHK, are pompous.

  23. back in my navy days, it’d be like: well a mil her and a mil there, pretty soon you’re talking real money. today, change mil to bil. trillion, kinda funny. all the irony you need.

  24. okay then, dave, if the world doesn’t completely fall apart in the next few months, next time i’m on the east coast, let’s you and i huddle with jr.

    our plan is to make trillions. it is simple, and involves a business plan, jr’s capital, hookers, and rich chinese and arabs with or without small dicks. i guess we use jr’s capital to attract the rich chinese and arabs, rent some office/hotel space, and then let the hookers take care of the details. offshore n.a. oil and gas exploration is the gimme.

    it sounds like a sting operation, but what the hey, even if it folds, we’ll have fun trying.

    please send me a draft bp by private email. mahalo. looking forward to working with you and jr.

  25. I’ve always found gorillas, chimps, monkeys and humans moron attractive than orangutans and gibbons, but I might have some cultural bias going, dunno.

  26. “A lot of these guys, including JHK, are pompous.”

    hm-m-m… I’ve always thought that pomposity was a male, secondary sex characteristic.

  27. Thanks, Dave. I think ASPO ended a couple of days ago, but had I known about your mad internets search skillz I would have put you on the payroll. There’s always next year.

    @Bif –

    Neil King did not say that about Kris Kan ?! You’re making that up, I don’t believe it.

  28. Neil King… proudly representing WSJ. I want to party that dude. He knows the score.

    Bill Murray talks about dave and burning down an Indiana town. Sometimes you just get lucky.

  29. I want to party *with* that dude. [JR, if I’ve violated some rule, take it out of my annual bonus. Thanks.]

  30. Dunno why y’all hate on the Archdruid. If he gets a little testy… well, I’ve been around the tubes a while too, & I can imagine I’d get a bit huffy at people bringing up the same refuted arguments over & over. Actually, I think I found CFN through his blog.

    I really think his ideas about decline are more likely than the Mad Max scenario. As much as I’d like to just get it over with and get to WMBH, he makes a good case for it not going that way.

  31. JR. On my honor I swear its true. But I must clarify that he did not mention her specifically by name (saying something like “the woman who did the PO striptease”), and judging by the huge outburst of laughter, there were very few people in the room who didn’t know who he was talking about.

    King was very good, but I also should mention that Erica Etelson of the San Francisco Chronicle seemed very informed on these matters and was impressive. I am interested to read some of what she has been writing.

  32. hm-m-m… I’ve always thought that pomposity was a male, secondary sex characteristic.

    i think you’re thinking of the ass spanking gene. only pussies are pompous.

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