US Gas Supplies Peform Sky Jam

Natural gas news seems to be as abundant as the resource itself. US natural gas reserves recently jumped 35% thanks to - yours favorite - shale gas:

Thanks to new technology that has allowed producers to drill for gas in shale rock, the Potential Gas Committee in Golden, Colo., said that the country's estimated reserves are 35 percent higher than just two years ago and have reached the highest level since the group started tracking the information 44 years ago.

[...]

The committee, a volunteer group backed by natural gas producers and utilities, estimated the country's total natural gas resources at 2,074 trillion cubic feet, an increase of 542 trillion cubic feet from its last report.

The figure includes 238 trillion cubic feet of proven gas reserves as established by
the Department of Energy and 1,836 trillion cubic feet of reserves it labeled as probable, possible, and speculative.

The report is similar to a study prepared last summer for the natural gas-backed American Clean Skies Foundation that found the country had 2,247 trillion cubic feet of natural gas reserves -- a 118-year supply at 2007 production levels. The U.S. consumes about 22 trillion cubic feet of gas per year, almost all of it produced in the U.S.

Remember, shale gas is in its infancy. Expect more news of reserve jumps in the future. Hmmm... looks like the US gas shortages the peaktard community has been warning about will be put off for a long, long time.

- Brewskie

Iraq Kick Starts Nassiriyah

In a bid to ramp up oil production, Iraq has fire up the giant oil field, Nassiriyah, for the first time...

Nassiriyah, which accounts for some 4.3 billion barrels, was discovered in 1975 and remained undeveloped for more than three decades due to war, lack of cash and economic sanctions. The field, whose production capacity could reach 300,000 barrels a day if it is properly developed, is currently subject to direct negotiations between the Iraqi oil ministry and three oil companies: Italy's Eni SpA (E), Japan's Nippon Oil Corp. (5001.TO) and Spain's Repsol YPF SA (REP).


Nassiriyah's new production is part of a "crush plan" proposed by the Iraqi
Oil Ministry earlier this year to increase production from southern oil fields by 350,000 to 500,000 barrels a day in two years.

Brewskie point: though Ghawar Guzzler is not a political blog, it still begs to question what could have been had president dingle-berry chosen against a trillion dollar crusade. The money would have been better flushed down into the world's largest toilet expo...

- Brewskie

Palin's Pipe Dream: R.I.P?

Alaska Govonor Sarah Palin has made the Alaska Natural Gas Pipeline a centerpiece to her political ambitions. However, with America practically overdosing on shale gas and plenty more in tow, the question begs: do we really need to squander billions building the pipeline?

No so, claims T. Boone Pickens. Pickens believes with practically an unlimited supply (for a long time anyway) of shale gas here in the continental US, he feels America is better fit drilling closer to home vs. piping afar.

Read below:

Billionaire oil investor T. Boone Pickens said on Wednesday he doubts a $26 billion natural gas pipeline from Alaska will be built any time soon as abundant new shale gas supplies reduce the need for the expensive project.

Pickens, who is promoting a plan to boost investment in wind power and natural gas to cut U.S. oil imports, said at a Calgary appearance that he sees little need for Alaskan gas given massive shale gas discoveries in the Barnett shale play in Texas and elsewhere.

"All the proven gas on the Arctic coast is 39 (trillion cubic feet). That's not as much as you have in the Barnett shale," Pickens said at a Calgary speech. "I don't think a pipeline from Alaska through Canada to the lower-48 makes sense."

[...]

Still, with the Barnett shale containing as much as 50 trillion cubic feet of gas, and new plays in Louisiana, Arkansas, Pennsylvania, British Columbia and elsewhere showing the potential to be even bigger, the need for an Alaska line is questionable, Pickens said.

"I don't think that pipeline gets built right now," he said. "I don't think the pipeline will be built for 10 to 15 years."

Added: It appears Alaska isn't the only place with dreams "going up in smoke;" Canada's Mackenzie Valley Pipeline also appears to be uncertain. Because of why?

The emergence in the last couple of years of large new deposits of shale gas close to major markets is seen as the latest stumbling block for Arctic resource development, although Mr. Sykes said natural gas in the Mackenzie Delta is competitive with most shale plays in North America.

- Brewskie

Who Needs Cantarell?

One of the most popular firearms for this peakers' drive by shooting summer is the Canatrell collapse cannon. "Canterll collapsed in 2004 at 2 mbpd. It's down to 700,000 bpd; it's no longer Mexico's largest-producing field (Ku Maloob Zaap is)! I say: who needs it?

In 2007, Mexico was supplying America with 1.3 mbpd, making it effectively America's 3rd largest supplier. However, like much of the developed world, America has shrank the flubby ballast in response to high oil price overdose. As we can see from the graph below...

her appetite has shrunk considerably from the 21+ mbpd day she gorged on back in 2005, to under 19 mbpd currently. A recent estimate holds steady at 18.74 mbpd; the 2Q US oil usage is projected to be 4.2% lower than of last year, making it the lowest in 12 years. Don't slack now kids, let's keep up the good work!

As I've also posted before, despite Canatrell and the N Sea's seemingly sharp drops, non-OPEC crude production hasn't declined that catastrophically since its record in 2004:

She's declined an average of roughly 1 mbpd - that's an annual depletion rate of less than 1%! That's a far cry from the peakers' call of 5%, 6.5% 8% (I've even heard as high as 13%!). It also fits the debunkers' assertion that global peak will result in a slow decline, not a hard crash. It seems King Hubbert thought so, too.

So while Canatrell is giving up the ghost, OECD countries move on without a care...

And let's not forget that non-OPEC total liquids has been kicking ass; that we have our friendly neighbor to the north, Canada, who in good time pick up the slack where Mexico is leaving off (with unpardonable environmental sins, of course). So I say... let Canatrell die, because with 700,000 bpd to date, it can't hurt things much more.

In actuality, there is one country that needs Canatrell badly: Mexico. This impoverished nation receives 40% of its federal budget through oil revenues. With declining oil revenue, Mexico is still loaded with poverty, illiteracy, gangs, drug wars and guns. Somebody might want to tell Dr. Wirth he may want to reconsider his location for a peak oil sustainability.

- Brewskie

Back From Sabaticalsabbatical

I took a few days off last week from work to recuperate from a monster project I did a few weeks back (670 pages). We're ready to go.

- Brewskie

Texas to Gain America's Biggest Solar Power Facility

(Hat tip: the always wonderful Big Gave of Peak Energy)

Texas has big steers, big SUVs, big McMansions, big butts, big DQ's, big BBQ. They also have big wind and now Austin has big solar, too.

Texas is famous for having the biggest of everything, from the biggest capitol in the nation, to the largest population of livestock cattle. And while one may not immediately think of Texas as a green state, that will soon change, as Gemini Solar Development has been selected by Austin Energy to install the United States’ largest solar power facility. A green Texas? Why not!

The array will be owned by San Francisco-based company Gemini Solar evelopment, which will lease the plant to Austin Energy. 30 megawatts is the amount of power that will be produced by the United States’ largest solar array - enough power for about 5,000 homes, and around double the output of the current largest solar array in the US. The array will be located in a 300 acre site at Webberville, which is owned by Austin Energy, the city’s electric company.

The plant is being installed as part of the city’s plan to increase its use of renewables by 30 percent in the year 2030.

- Brewskie

Israeli Hotshot Claims Cheap Cellulosic Privy

A Tel Aviv, Israel, startup claims it has nailed a cheap cellulosic ethanol production process:

A startup based in Tel Aviv, Israel, called HCL-Cleantech has reinvented a century-old process called the Bergius process as a much cheaper method to produce ethanol from biomass. The process uses concentrated hydrochloric acid (HCL) to breakdown biomass into sugars but has been too expensive for commercial use. The company, however, says that it has developed a way to recycle 42 percent of the HCL, pumping it back into the system and significantly reducing the cost of making ethanol.

"The only really innovative aspect of what we do is the recovery of the acid, which costs 10 percent of what it used to cost," says CEO Eran Baniel. But that tweak attracted interest from a number of companies in the United States, and recently HCL-Cleantech received $5.5 million in venture capital from clean-energy investors Khosla Ventures and Burrill and Company to build a pilot plant in the United States.

To produce ethanol from cellulosic sources like wood chips and corn stover, the feedstock first must be stripped into three parts: lignin, sugar-rich cellulose, and hemicellulose. These last two parts must then be converted into sugars, which can then be fermented into ethanol by organisms such as yeast. Conventional ethanol technology uses dilute acid solutions in a pretreatment phase to separate lignin from cellulose and hemicellulose. Expensive enzymes then break down cellulose and hemicellulose into simple sugars.

As a cheaper alternative, HCL-Cleantech uses a much stronger, concentrated HCL solution that combines the first two stages of ethanol production, simultaneously stripping away cellulosic sources and breaking them down into fermentable sugars. Baniel says that the acid hydrolysis is able to squeeze up to 97 percent of sugars out of cellulosic sources like wood. Using HCL also reduces the amount of unwanted by-products that normally occur with more dilute acid solutions. What's more, the concentrated acid reaction can occur at low temperatures, which reduces the energy required to run the system.

However, recycling HCL has proved a tricky challenge. Researchers have found that as HCL breaks down cellulosic sources like wood into sugars, it forms strong bonds with water that are difficult to break. Industries that recycle HCL, such as citric acid manufacturers, use expensive high-temperature and -pressure methods to evaporate water, isolating HCL.

Instead, the scientists who developed the technology for HCL-Cleantech came up with a cheaper route to separate and recycle HCL. They devised a proprietary solvent that attracts hydrochloric acid. They mixed this solvent with the HCL-water solution, and found that the solvent broke the HCL-water bond and extracted HCL from the water solution. The scientists then developed a method to get the solvent to release HCL as a gas, pumping it back into the system to break down more cellulose.

[...]

The company anticipates that its pilot plant will be ready in the latter part of 2010. In the meantime, Baniel says that the company will test multiple steps of its process at various industrial plants in Israel to see whether the technology can run efficiently at large scales.

Mascoma of NH also claims privy to a cheap cellulosic ethanol production process.

- Brewskie

Smart Grid: Five Smart Cities

Here's five cities on top of the smart grid game:

Boulder, CO: Boulder is aiming to become the world's first smart grid city by the end of 2009. The city has partnered with Xcel Energy on the $100 million effort and customers can use the Internet to lower their thermostats or home or change the temperature on their furnace.

Worcester, MA: National Grid will be building a smart grid pilot in Worcester. The pilot, believed to be the largest in New England, will work towards creating a highly reliable modern grid that can provide customers with energy use information, automation, and the ability to control how they use energy.

Miami, FL: Energy Smart Miami, an energy initiative here proposes to use federal economic stimulus funds to help spur a $200 million investment in smart grid technology over the next two years. The initiative will deploy more than 1 million advanced wireless meters to every in Miami-Dade County. These meters will give Florida Power & Light Company (FPL) customers more information and control over their electricity usage while also providing FPL with information that will enhance system efficiency and reliability.

Austin, TX: The city of Austin's Pecan Street Project aims to get people to start generating power from their own homes. "Smart" appliances, like refrigerators that turn off when there's too much load on the grid will also be a part of the project.

Chicago, IL: With the help of the Galvin Electricity Initiative the Illinois Institute of Technology (IIT) is adopting the electric grid. As with the other cities, the smart grid would use digital technology to collect, communicate and react to data, making the system more efficient and reliable. For example, sensors would help utilities locate problems and fix them quickly.

- Brewskie

PA to Force Companies to Expose More Gas Data

In a follow-up to a previous story, the Pennsylvania Senate passed a bill that will ensure gas companies drilling the Marcellus Shale will disclose data publicly. The aim of this is to use production results, and encourage other companies to ponder the Marcellus (link).

A bill that would require faster disclosure about production results from wells drilled on the potentially lucrative Marcellus Shale gas formation in Pennsylvania is on the move.

The state Senate on Monday passed the bill unanimously and sent it to the House of
Representatives for consideration.

Under the bill, companies would have to report well-specific production to the state twice a year. Those reports would then be made public.

Current law prevents the state from releasing that data for five years, putting Pennsylvania out of step with the nation's biggest gas-producing states.

Advocates of the bill say revealing the information sooner will assure people that the industry is above-board and encourage other drilling companies to invest in Pennsylvania.

- Brewskie

Zerrs Gold I Hear Off Zat West Coast

The specifics aren't clear, but Ireland made its first oil discovery off of its west coast in thirty years:

OIL has been found off the west coast for the first time in over 30 years, a discovery which could spark a new rush of exploration drilling.

The discovery was made by a small UK company Serica Energy, which was drilling for gas.The find was made 100km off the west coast, it emerged yesterday.

Shares in the small exploration company Serica Energy soared by 18pc on the London Stock Market after news of the discovery broke.

Serica chief Paul Ellis said that while it was too early to say how much oil had been found, the company now intended to carry out new site surveys to choose a location for a follow-up well next year.

The drilling, which cost the company around $50m (€36m), was paid for under an agreement with Serica's new partner, the German company RWE. In return
for paying the cost of the well the German's secured a 50pc stake in the find,
with Serica holding the balance.

[...]

The discovery is likely to re-awaken interest in oil exploration off the west coast, including in these areas which are not currently under licence.

"This is the first oil discovery west of Ireland for nearly 30 years," Mr Ellis said, adding that its 600 sq km licence area contains several prospects which will now be evaluated as potential drilling targets.

- Brewskie

The "New Gold" Rush in Africa

Europeans rapaciously plundered the continent of Africa for gold and other resources; now the thirst for oil has brought attention to Africa, and its untapped petroleum resources...

West Africa now offers "unparalleled opportunities" for major and independent oil and gas companies, writes Patrick Morris, CEO of Vancouver-based Gold Star Resources Corp. (OTCBulletinBoard: GXXFF) in the June 10th issue of
AFROIL, Africa Oil & Gas Monitor, an online publication of Newsbase Ltd.,
Edinburgh, Scotland read by subscribers in 25 countries (www.newsbase.com; Week 23; page 5 Guest Column). Morris, author of a news column published in AFROIL entitled "West African Oil Rush, Challenges", reported that changing geopolitics, reduced security and political risks, the recent 1.8 billion barrel discovery in West
Africa's largest oilfield, the Jubilee in Ghana, and a new African foreign policy by recently elected U.S. President Barack Obama have all helped in making West Africa a "desirable destination for oil and gas exploration and production."

According to Morris, "For a long time West Africa has been off the radar of the international community because of messy politics and brutal civil wars. Also, apart from Nigeria and Gabon, there had been the disappointing size of oil discoveries made at times of low oil prices. All this is now changing. Expectations by countries and oil & gas companies to discover new reserves in the region are high. Exploration and seismic research activities are underway in all countries of West Africa bar Burkina Faso and Cape Verde. Governments are also actively involved. For example, in Liberia, the National Oil Company of Liberia (NOCAL) is promoting oil and gas exploration and development of its hydrocarbon resources along its continental shelf and slope. The sub-region is also gaining global attention as calm has been restored to countries such as Liberia, Sierra Leone and Cote d' Ivoire, reducing security risks."

Among other things in Africa, it's been recently announced that Uganda's oil reserves may rival Suadi's (even if there's just a quarter of truth here, that's still magnificent), and Brazil, an offshore drilling superstar, has been expressing interest in Angola's sub-salt formations which are reportedly "very similar to Brazil's."

- Brewskie

EU Snubs Algae Biomass; US Cocksure

The European Algae Biomass Association released a pessimistic outlook for algae biomass, where as the US seemed uberly optimistic (link):

In Italy, the European Algae Biomass Association officially launched yesterday with a decidedly pessimistic outlook for commercial-scale algae bioenergy production. New EABA Executive Director Raffaello Garofalo said that it will take 10 to 15 years for algae to reach industrial-scale production, and that, at present, making biodiesel from algae costs 10 to 30 times the cost of making biodiesel from traditional feedstocks.

Garofalo told Reuters that the new association has 54 members and that he saw a price of $500-$550 emerging for the algal fuel market, in the long-term, after other fractinos of algae biomass were sold for animal feed or to the nutraceutical markets. Garofalo referred to pilot projects in Portugal and Italy but cautioned against expectations of quick breakthroughs in the path towards algae commercialization.

This outlook contrasts with a more upbeat assessment from the United States, where Sapphire Energy has projected that it will reach 1 Mgy in production in 2011 and 100 Mgy by 2018, while Solazyme has projected reaching 100 Mgy by 2012 or 2013. Biofields has projected production in Mexico of 250 Mgy by 2013 based on the Algenol process, and PetroAlgae has indicated it expects reach commercial-scale production volumes (below 100 Mgy) in 2011 based on its licensing activity to date. Aurora Biofuels has projected the development of “$1.30 at the gate” fuel by 2013.

My opinion of this? I think the European Algae Biomass Association should pay closer attention to the news.

- Brewskie

Never Recharge Your Cell Phone Again

Thankfully this isn't a bad dream where Billy Mays screams in your face: "Never recharge your phone again! It's got a Swiss Army knife, it can perform quantum physics in your sleep, it will replace your ex-girlfriend!" It looks like Nokia is smart enough to beat the man to the game (link):

A cell phone that never needs recharging might sound too good to be true, but Nokia says it's developing technology that could draw enough power from ambient radio waves to keep a cell-phone handset topped up.

Ambient electromagnetic radiation--emitted from Wi-Fi transmitters, cell-phone antennas, TV masts, and other sources--could be converted into enough electrical current to keep a battery topped up, says Markku Rouvala, a researcher from the Nokia Research Centre, in Cambridge, U.K.

Rouvala says that his group is working towards a prototype that could harvest up to 50 milliwatts of power--enough to slowly recharge a phone that is switched off. He says current prototypes can harvest 3 to 5 milliwatts.

[...]

Nokia is being cagey with the details of the project, but Rouvala is confident about its future: "I would say it is possible to put this into a product within three to four years." Ultimately, though, he says that Nokia plans to use the technology in conjunction with other energy-harvesting approaches, such as solar cells embedded into the outer casing of the handset.

- Brewskie

US Oil Demand Down to 12-Year Low

The EIA sees second-quarter US oil demand down 4.2%:

U.S. oil demand in the second quarter was revised up by a slim 100,000 barrels a day from a month-earlier estimate, but will be a 12-year low for the period, at 18.74 million barrels a day, government forecasters said Tuesday.

Second quarter demand will be down 4.8%, or 940,000 barrels a day,
from a year ago.

Citing the weak economy, the U.S. Energy Information Administration also said full-year 2009 oil demand of 18.86 million barrels a day will be the lowest since 1997, and down 2.9%, or 550,000 barrels a day from a year earlier. That would mark the fourth-straight annual decline in demand in the world's largest oil consumer, and follow a 1.26 million barrels a day, or 6.1%, decline in 2008.

In 2010, the EIA said oil demand will rise a modest 300,000 barrels a day, or 1.6%, to 19.16 million barrels a day.

[...]

The EIA said third-quarter U.S. oil demand is expected to average 18.83 million barrels a day, little changed from 18.84 million barrels a day a year ago. Fourth-quarter demand is expected to average 19.05 million barrels a day, down 1.2%, or 230,000 barrels a day, from a year ago. In May, EIA said fourth-quarter demand would average 19.02 million barrels a day, down 260,000 barrels a day from a year earlier.

BTW - I caught this graph over at Carpe Diem. America's driving decline continues.
>- Brewskie

Senate Panel Approves Expanded Offshore Drilling

The Senate's Energy and Natural Resources Committee approved expanded offshore oil and gas drilling in the Gulf of Mexico:

The Senate Energy and Natural Resources Committee voted 13- 10 today in favor of an amendment to expand drilling, as part of its debate over pending energy legislation.

Former President George W. Bush removed a presidential moratorium on offshore drilling last year, and Congress let a ban expire after oil prices reached a record $147.27 a barrel. The amendment, proposed today by Senator Byron Dorgan, alters a remaining ban on drilling from 2006 legislation that protected portions of the gulf.

“That portion of the eastern gulf that is not open, with a buffer zone of 45 miles, should be available for drilling for oil and natural gas,” said Dorgan, a North Dakota Democrat. The drilling area includes the Destin Dome, an area off the coast of Pensacola, Florida, which may hold 2.6 trillion cubic feet of natural gas, according to the Energy Department.

The drilling provision is one of several amendments that have been considered during the weeks the committee has spent debating energy legislation that would, among other things, require a portion of electricity to come from renewable resources and set new energy efficiency standards.

- Brewskie

Some Natural Gas Developments

Here's some news on natural gas that I've consolidated into one post.

First, we all know natural gas is cheap. Some people swear if I keep bringing this up, they're going to use me to cap off a retired oil well. But did you know it's the cheapest compared to oil since '92?

This year’s 31 percent decline in natural gas made it the worst performing commodity and the cheapest next to oil since the fall of the Soviet Union. That’s about to change, if history is any guide.

Natural gas lost 72 percent in 11 months as the U.S. fell into the deepest recession in 50 years and drillers failed to idle rigs fast enough to control inventories. Stockpiles are 22 percent larger than the five-year average, the Energy Department said. Oil costs 18 times more than gas, the biggest gap since 1992, when the collapse of communism cut supplies from Russia, according to data compiled by Bloomberg News.

The EIA sees total US gas consumption falling 2.2% this year:

The U.S. Energy Information Administration on Tuesday expects natural gas prices to remain below $4 a thousand cubic feet until late this year amid robust supplies and weaker demand resulting from the economic downturn.

Industrial gas consumption is forecast to decline by 8% this year, unchanged from last month's forecasted decrease, according to the EIA's Short-Term Energy Outlook.

Major industrial gas consumers, including companies in the fertilizer, chemicals and aluminum industries, have curbed gas use and cut spending.

Total natural gas consumption is expected to fall 2.2% in 2009 amid the ongoing economic downturn and increase slightly in 2010, said the EIA, the statistical arm of the U.S. Energy Department. The EIA had previously forecast a 1.9% drop in 2009.

U.S. marketed natural gas production is expected to fall 1.1% in 2009 and slip 2.6% in 2010 following a widespread pullback in drilling activity. Producers such as Chesapeake Energy Corp. (CHK), Devon Energy Corp. (HK) and SandRidge Energy (SD) have scaled back spending amid falling commodity prices. The companies idled rigs and trimmed production forecasts to cope with lower gas prices and stem the flow of gas into the marketplace.

[...]

Liquefied natural gas imports to the U.S. are expected to rise to 495 billion cubic feet in 2009, up from the 352 billion cubic feet received last year, as new global LNG production capacity comes on line worldwide.

Natural gas prices at the benchmark Henry Hub are expected to average $4.13 a thousand cubic feet in 2009 and 5.49 a thousand cubic feet in 2010, slightly higher than the previous forecast and down from an average $9.13 a thousand cubic feet in 2008, the EIA said.

Finally, with North Slope oil production dribbling close to a trickle, the long-awaited dream of building a natural gas pipeline to sap out Alaska's huge natural gas reserves and pipe it down to the lower-48 may be coming closer to fruition (assuming Governor Palin doesn't ditz this up):

Key U.S. lawmakers have reached a deal on legislation that would boost the federal government's loan guarantee for building a massive pipeline that would transport Alaska's huge natural gas reserves to the lower 48 States.

Senate Energy and Natural Resources Committee Democratic chairman Jeff Bingaman and top panel Republican Lisa Murkowski have agreed to a measure that would raise the 2004 loan guarantee program for the pipeline project to $30 billion from $18 billion.

TransCanada Corp (TRP.TO) received a state license in December to build a $26 billion pipeline from Alaska to a pipeline hub in Alberta. North Slope Gas producers BP Plc (BP.L) and ConocoPhillips (COP.N) have also proposed an Alaskan gas line project, however.Either project would be eligible for the Senate measure, which also clarifies that the federal government will step in and repay loans for up to 80 percent of the cost of the total project if the pipeline's owners default on the financing.

[...]

Since the 1970s government officials and industry groups have sought to construct a pipeline that would be used to ship the North Slope's known natural gas reserves of 35 trillion cubic feet.

- Brewskie

Spandex! Spandex!

This is a busy day so posting will be tad light. Here's what lab rats are doing with E. coli...

A company called Genomatica, based in San Diego, says that it can make the key ingredient in spandex from sugar, and do so at a cost that competes with current chemical processes, which use fossil fuels. It has developed genetically engineered E. coli bacteria that excrete a chemical called 1,4-butanediol, or BDO, which is used to make a number of products, including textiles, car parts, and pharmaceuticals.

The company announced that it has demonstrated a proprietary process that allows it to produce the BDO at greater than 99 percent purity, a technical milestone that clears the way for the one-ton-per-day demonstration plant that it plans to build next year. (Total worldwide production of BDO is about 1.5 million tons.) The company also reported increasing the productivity of the bacteria to a level that it says is near what's needed to compete with petroleum and natural-gas-based processes.

Christophe Schilling, Genomatica's CEO, says that its process will reduce energy use for making the chemical by about 30 percent. It will also decouple its cost from the cost of fossil fuels. He predicts that the company's process will cost 25 percent less than conventional methods used to make BDO, provided the price of oil stays above $40 to $50 a barrel and the cost of sugar is about 10 to 12 cents a pound.

[...]

Pierce predicts that the next 15 years will see a significant shift toward using biological processes to make chemical intermediates, as fossil fuels become more expensive. "Historically, petroleum has been cheaper [than sugar]--that's why we've had a petroleum age," he says. "It's been the place everyone goes to get cheap raw materials. We're in a period of transition now, where it's becoming more and more frequent that it's cheaper to do a biological process."

- Brewskie

Non-OPEC Production Offers Optimistic Peak Oil Prelude

Doom-sayers in the peak oil community warn of an impending oil crash once global peak kicks in: it will be like the Titanic, one year after another, with wave after wave of chilling ocean water conquering compartment after compartment. There's no way but down.

Many debunkers beg to differ: many of us argue that declines in oil production will occur at a steady, manageable pace over years that will allow the global community to adjust with ease; and there appears to be evidence to suggest the case.

Non-OPEC crude production has been declining since its record-setting year of '04.

Did you know that? Have you felt it? Do you care?

Right here's the proof. Puts a cratered yawn in your face, doesn't it?

Average crude production has only dropped about a rough million barrels since '04; production is even up a little this year over last. This is with N Sea production dropping at a good clip, and Cantarell falling faster than a meteor. So far, the decline is a far cry from the 5%, 6.5% or even 8% annual decline-rates many doomers have been warning us about. On the other hand, total liquids has been kicking ass and driving up production, nullifying the loss in crude production:

But here's the real gold-plated money shot, the graph that really counts. Remember, folks... China is considered apart of the OECD.

So there you have it. Non-OPEC crude has been in decline since 2004, and the developed world has been sleepwalking through it all without a care. Best of all, OECD demand has fallen roughly 5 mbpd since '05.

Of course I'd like to America's own peak as an example. The typical doom chant in any peak oil convention is the numb-minding reminder that America's oil production peaked in 1970 at 9.5 mbpd. Yup, it certainly did, and today we produce about 8 mbpd - making us the the 3rd largest producer in the world, double of OPEC's second largest producer, Iran. If Japan had our production, it would easily fill all of its consumption needs, plus have enough leftover to be a Top Five exporter. Is Alaska helping us? Alaska crapped out long ago! Production isn't America's problem, it's consumption.

For more info. on the argument for a slow decline, check out this excellent post by JD of Peak Oil Debunked. Pay attention to N America's own oil production statistics - it's been in a plateau of about 14-15 mbpd for the past 30 years. Has this impacted your life? Are you still able to drive your car? Are the freeways devoid of commuters? Has this impacted your ability to buy cheap plastic crap from the shelves of Target? Maybe you should stay in your doom bunker until it's safe!

- Brewskie

2009 Oil Graphs Through April

Whoo-hoo! It's time to play the nerd. Let's get gawky and look at some oil production and demand statistics from the May issue of Oilwatch Monthly.

Below is global liquids production through April.


We have OPEC crude production...

And OPEC total liquids.

Non-OPEC liquids.

Here we have OPEC demand. Going up a bit.

US demand keeps going down...

OECD shows an amazing decline since 2005 that keeps going into this year.

Chinese oil Demand...

EU-27 shows steady decline.

And now for inventory stocks. OECD crude stocks are pretty high...

And so are America's.

- Brewskie

Tillerson, Yergin See Oil Price Decline

I found this interesting bit off of MSNBC.com. One fool from Motley Fool also foresees an oil price decline (and see who else does, too):

Oil's flimsy fundamentals

No longer being deeply oversold by investors, I have to assume that the oil services group is now largely trading up on the improving price of crude, which has risen more than 60% from its February nadir of around $42 per barrel. (I'm ignoring the exaggerated effect of the January futures contract expiration.) This is exactly why I'm nervous about these stocks today.

And what do Rex Tillerson and Daniel Yergin say?

Rex Tillerson, chief executive of ExxonMobil (NYSE: XOM), said fundamentals didn't justify $70 oil in September 2007. After the demand destruction that's followed, he obviously doesn't think much of this latest rally in crude, calling it "just a bet" on the part of traders.

Daniel Yergin, author of The Prize and chairman of IHS Cambridge Energy Research Associates (CERA), is in pretty much the same boat, pointing to a 3 million-barrel-per-day drop in demand to pre-2005 levels. He attributes oil's performance more to the stock market rally and the falling dollar.

If Yergin is correct on this point, and I believe he is, then there are two reasons to be concerned.

- Brewskie

The King's Latest Presentation

I was scoping out the Oil Drum and found a link to Matthew Simmons's latest slide-show presentation, Two Energy Oxymorons: 1. Energy Independence 2. Energy Security. I didn't have much time to check it out, but here's a few things I found while skimming through it:

• Oil defiantly peaked in 2005 (some things never change; I think his reputation peaked in 2005).

• Shale gas won't save us; gas production still going down.

• UN dead wrong: world population will soar past 2050 expectations (Freddy Hutter pointed this out earlier).

• We're screwed! Oil production is going to fall off of a cliff, so is gas, the world's population is going to soar past anything meager oil production is going to sustain. Therefore... it's completely imperative to divert mountainous supplies of cash and resources to rebuild the oil industry's infrastructure! (Yeseriee, the King of Peak's twisted and contradictory logic is becoming eerily more Wacko Jacko.)

That's just a few tid bits. I'll try to scope through it more when I get the time.

- Brewskie

Japanese Oil Demand in Death Spiral

I hope you're not drinking something this moment: you're going to spit it all over your computer's screen when you read this:

Japan may be forced to shut more than a fifth of its refining capacity, at least 1 million barrels per day, in the next five years as oil demand falls faster than expected, the head of the country's top refiner said on Tuesday.

Nippon Oil Corp President Shinji Nishio also told the Reuters Energy Summit that the company, after its planned merger with Nippon Mining, might shut in 200,000 bpd more capacity than originally planned by 2015, underscoring the rapid demand erosion in the world's No. 3 consumer.

Japan's trade ministry projects oil sales will fall by an average annual 3.5 percent to 168.2 million kl (2.9 million bpd) in the year from April 2013, from a total 3.46 million bpd last year. It has the capacity to refine 4.8 million bpd.

"Unless we cut the capacity by (1 million bpd), the nation's production will not be at an optimum level," he said. "When you think about the future beyond (2013), we will have to cut even further."

Total oil sales in the year ended March 31 slumped 8 percent, the sixth straight year of decline, as the global economic crisis has slowed industrial activity, adding to already waning demand caused by an aging population, a shift toward smaller, fuel-efficient cars and drive to embrace greener energy sources.

- Brewskie

Battery Life Worth its Weight in Salt

This article is about a chemist's recently discovered salt that has garnered much industry praise towards extending lithium-ion batteries' life. The article doesn't get into specifics (nor regrettably, the salt), but this could be something to keep an eye out for.

University of Rhode Island chemistry professor's discovery of a new salt has been received with enthusiasm by companies seeking to develop an advanced lithium ion battery for use in the next generation of hybrid and electric vehicles.

Brett Lucht, co-director of the URI Energy Center, recently received a $731,000 contract from the Batteries for Advanced Transportation Technologies program, which is supported by the U.S. Department of Energy's Office of Vehicle technologies. The URI professor and his research group have been studying the mechanism that causes lithium ion batteries to degrade over time.

[...]

Lithium ion batteries have greater energy density than the nickel metal hydride batteries currently used in hybrid vehicles, which means they can provide the same amount of power as batteries nearly twice their size and weight. Smaller, lighter weight batteries will help to extend the range and gas mileage of hybrid vehicles.

"Most of the problems associated with the aging of batteries are due to the electrolyte – the liquid in the battery that contains dissolved salts and that allows the lithium ions to go back and forth between the electrodes," explained Lucht.

The structure of salts in battery electrolytes is much more complex than typical table salt (sodium chloride), according to Lucht. The best salts for lithium ion batteries are those that have high conductivity and excellent stability. "Few molecular structures are both," he said, "and we have discovered a new one."

[...]

The researchers have been working closely on the salt with Yardney Technical Products of Pawcatuck, Conn., which makes specialty batteries for the military and the National Aeronautics and Space Administration. Several Fortune 500 companies will also be conducting tests on the salt.

In addition to his salt discovery, Lucht has also developed additives for lithium ion batteries that stabilize the salt in the battery electrolytes and inhibit its degradation due to heat. Patents are currently pending on this technology. These additives have been successfully tested in small lithium ion batteries, and testing in larger batteries is now under way.

A patent is pending on the new salt.

- Brewskie

Copying Nature's Cheap-Made Hydrogen

Why has humankind been using exotic materials for hydrogen catalysts? Nature's been doing it on the cheap - iron, nickel and sulfur! Now researchers at the University of Illinois have seemingly caught up to nature's coy play (link):

Scientists have long been puzzled by nature's ability to use cheap and plentiful building blocks – iron, nickel and sulfur – to achieve the catalytic performance seen in rare and expensive metals. In particular, two enzymes – iron-iron hydrogenase and nickel-iron hydrogenase – function as hydrogen processors, much like platinum.

"Nature relies on a very elaborate architecture to support its own 'hydrogen economy,' " said Thomas B. Rauchfuss, a professor of chemistry and corresponding author of the paper. "We cracked that design by generating mock-ups of the catalytic site to include the substrate hydrogen atom."

The researchers' model of the nickel-iron complex is the first to include a bridging hydride ligand, an essential component of the catalyst.

"By better understanding the mechanism in the nickel-iron hydrogenase active site, we are learning how to develop new kinds of synthetic catalysts that may be useful in other applications," said graduate student Bryan E. Barton, lead author of the paper.

- Brewskie