Electric cars are a pipe dream
- Thread starter Syzygys
- Start date
Thanks for working link, but the US government’s projection, IMHO are not as likely to be valid as those of the oil watch or other independent sources. They can hardly project the disaster of oil prices than will exist when China ALONE is using more oil than the US, and has much more money to buy it than deeply in debt USA.
That is not even considering the highly likely, imho, collapse of the dollar’s value. It is steadily eroding in value now as reflected in gold and other commodity prices; however there will come a point in time when that controlled loss of value turns into a run to get out of dollars. In a few months the dollar can easily lose ¾ of its value.
At a sub link of your link concering petroleum at http://www.eia.doe.gov/oiaf/aeo/assumption/petroleum.html
They discussed many things about US refining and distribution, but said nothing about where the petroleum would come from. Currently the US gets 10 to 15% from Venezuela but in a few years will get none from there.* Mexican production is decreasing. China has even bought up some Candian oil sands. China is signing long term contracts for oil but the US is not. For the 10 million dollars, paid up front to Brazil’s PetroBras about two years ago, China will get 200,000 Barrels /day for 20 years. This is a minor part of China’s long term locked up supply of oil.
Point is not only is oil production very unlikely to keep up with rapidly growing Asian demand, but the fraction of that production available for sale is declining too.
SUMMARY: Your government source understandable, neglects these important factors.
* Chavez would stop selling oil to the US today if he could, but his heavy oil can only be refined in the US's gulf coast refineries that were built for it. Both China and Brazil are building new heavy oil refineries in Venezuela now (three total) so in a few years Venezuela will export refined product, mainly to China. This fact, rarely mentioned in the US, is why (or at least the main reason for) the construction of the Canada to gulf coast oil pipeline - These refineries will run on Canadian oil sand petroleum a decade from now.
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They have no reason to make unreasonable projections.
If you want better projections you have to pay for them.
By the way, I should have pointed out that the figures I gave were their "reference" case, or what they think is the most likely scenario for the future, but they also have a more pessimistic "high' case, where essentially most assumptions tend to lower supply and higher demand.
Their "high" case has oil at $185 per barrel in 2020.
Arthur
Sure they do. It is called elections. They are part of the administration. Their reason is why, even the non-partisian CBO is not being realistic, and even refusing to project the US deficit beyond 2020.
Not a lot. Mainly, you need to include the dominating factors I mentioned in post 742, instead of pretend they do not exist.
DOE's eia's study /report is very rich in details as a smoke screen hiding the truth should be.
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The EIA staff who put this report together are NOT part of the Administration and do not turn over due to elections.
As far as post 742, you mention a few tiny events in the VAST world of oil exploration and expect to make your case?
Sorry, so far you have made no compelling arguments that the EIA is wrong, nor do I buy your idea that the US dollar is going to lose 3/4 of it's value in a few months.
Arthur
Low prices like less then $2 a gallon will be impossibility, will it reach $10 a gallon probably not, but the age of cheap oil is over.
That a good appeal to authority, Lets take a look at how accurate EIA projects have been in the past:
Real accurate
notice the trend they always claim oil production is going to go up, despite the actual peak and fall since 2006, and have been completely wrong for at least 4 years now: So no, I don't believe them.Here a good read on how accurate the EIA has been: http://www.energybulletin.net/node/53331
But it hasn't peaked and fallen since 06.
2010 is averaging more than 06, and the only reason the production was down in that short interval was because of weak demand due to the global recession, not because we couldn't produce more.
2010 looks on track to be a resumption of the climb.
http://www.eia.gov/emeu/ipsr/t21.xls
So yes, I still tend to believe them.
Arthur
2010 is averaging more than 06, and the only reason the production was down in that short interval was because of weak demand due to the global recession, not because we couldn't produce more.
2010 looks on track to be a resumption of the climb.
http://www.eia.gov/emeu/ipsr/t21.xls
So yes, I still tend to believe them.
Arthur
On (1) I agree the low level quants* who make these models will not lose their jobs with elections. What they are allowed to include and conclude is definitely subject to the wishes of their appointed bosses who may. Last time I looked the Eia was under Doe, which is part of the administration. Why do you think it is independent of political influence?
Recall that the former head of the SEC, under GWB, when being raked over the coals by Congressional committee investigating why the SEC ignored very well documented (21 specific and documented in detail indications of Maddoff's fraud sent to the Boston office of the SEC by well qualified people working in the mutual fund industry) proof that Maddoff was running a Ponsi scheme said: "The administration keep us on a very tight leash." And that was true. GWB, and most of his administration, thought that government regulation of investment industry was bad for economic growth.
On (2) if you think China ALONE surpassing US oil consumption 10 years from now (more than doubling current oil consumption) is a tiny event; please tell what event you would consider large.
Is China locking up oil supplies even 30 years into the future not reducing what the US can buy during the next three decades? Is that reduction in available supply for the US a "tiny event" the Eia models can also ignore?
Perhaps the Eia does not know China (and India, etc.) exist and are rapidly growing their oil use (~7% per year)? No, it seems more likely to me that the quants' bosses told them not to include "speculative events" such as these in their models or resign the position at Eia.
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*Most of these quants will tweak their models to get the results that their bosses want. A few will resign, instead. No one can be sure that China's oil demand will more than double or that China is locking up a lot of the oil that will be available in long term (up to 30 years) delivery contracts, so not available to the US. Thus not too hard to rationalize ignoring these uncertainties to keep your job.
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From your link:
China’s oil use in: 2006= 7.26; 2007= 7.58; 2008= 7.83; 2009= 8.32 in million barrels / day (I think). Thus
Comparing between 2006 & 07 use it grew by 4.41%
Comparing between 2007 & 08 use it grew by 3.30%
(Contrast China’s slower GROWTH in the recession with US’s drop in consumption. The 7.83 is the use in the year 2008.)
Comparing between 2008 & 09 use it grew by 6.26%
And from oil watch data, for first half or 2010 China’s oil consumption grew at annualized rate of more than 7%.
Even at only 7% it will double in 10 years and the RATE of increase is accelerating as China rapidly grows and sells more cars than any other country. I.e. will more than double in 10 years and surpass US oil consumptions.
How can the Eia ignore these much more than “tiny facts”? IMHO, China will dominate the price of oil in 1020 as China has the money to buy at much higher prices and the US does not. To understand "dominate" re read:
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They don't:
The difference is they are realistic about what we can do to meet this demand.
http://www.eia.doe.gov/oiaf/ieo/liquid_fuels.html
Again, I believe their view is realistic.
They know that oil will be quite a bit more expensive in 2020, no doubt about it, probably ~twice as expensive as now (and in their high case, three times as expensive as now), which means that on the way to 2020 we will see substantial increases in vehicle miles per gallon and decreases in per capita use of oil in much of the industrialized world.
But we will still be ok even if Gasoline hits $8 per gallon because cars like the Volt will get effectively 3 times the miles per gallon as similar conventional IC cars do today.
As far as your amazingly condescending:
Unsubstantiated BS. (besides we have decent whistleblower laws to protect them if their appointed administration tied bosses tried this).
And secondly this Admin is not only unlikely to do so, but would if anything want them to show a more bleak case, since the Admin wants to up the CAFE standards and is pushing electric vehicles, high speed rail, bio-fuels, carbon caps etc etc, so a more pessimistic view would be more inline with their proposed policies.
Arthur
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To adoucette:
Your last post had quote of the Eia as follows:
"... To satisfy the increase in world liquids demand in the Reference case, liquids production increases by 26 million barrels per day from 2007 to 2035, including the production of both conventional liquid supplies (crude oil and lease condensate, natural gas plant liquids, and refinery gain) and unconventional supplies (biofuels, oil sands, extra-heavy oil, coal-to-liquids, gas-to-liquids, and shale oil) (Figure 28 and Table 3). In the Reference case, sustained high world oil prices allow for the economical development of unconventional resources and the use of enhanced oil recovery technologies to increase production of conventional resources."
This essentially circular logic. They build a model with a reference case demand increase much lower than any reasonable estimate that only includes China and India rate of oil consumption increase. They and you justify this lower demand as follows, to quote you:
" they are realistic about what we can do to meet this demand.”
I.e. only about 26 million barrels can be produced with current technology at the price increase they assumed (that is the circular reasoning) so demand cannot increase more than 26 million barrels.
Oh but it can and will by the increase demand from China and India alone. If we don’t use circular reasoning and avoid assuming a price from models that makes demand increase only 26 million barrels, but instead estimate the demand, whether or not it can be satisfied at their model’s price increase, then both higher prices and higher production are realistic. I.e. the Chinese will be able to pay for some of Brazil’s sugar cane to be converted into expensive liquid fuel for existing gasoline cars. - It is already being made into diesel fuel and plastics. That may require the price to be $300/brl. But China can and will pay it. California's old oil fields will produce again when the price gets high enough, etc.
Summary: You can not build a model that projects a price, based on a model of demand and then deduce the increment of production that price will produce, which will be the increase in satisfied demand. That is circular logic. (Start with model's demand, turn some math cranks and end up with computed demand.)
I don’t believe them because:
(1) Circular reasoning is not valid.
(2)They are under political pressure not to project a disastrous oil future for the US
PS If you don’t believe models, even made by quants, are adjusted to show the sponsor’s desired results, you are very naive. For example, some very skilled quants designed the complex CDOs and as requested told that because of their tiered structure and regional diversification they were much more secure than the underlying mortgages. That was what they were paid to do and say. Well we now call those CDOs “toxic trash” but the quants satisfied the desires of the banks and mortgage writers who hired them. Their models showed them to be very sound, AAA, investment as that was the wish of the people paying them.
The manufacture's models of the Abrahams tank* showed it would float, not explode when hit by artillery shell, not kill everyone inside with toxic gases, etc. but one Whistle blower filled one with sheep and they died. Same story on the Marine’s “osprey” plane / helicopter. Models did not show most would crash. Climate effect of CO2 models strangely always show what their sponsor wanted them to. Etc.
In the modern computerized world, you must have a model to prove your point, so you build one that does.
* I may have the name wrong. It was also called the "all purpose fighting vehicle" as I recall. There even was a movie made to tell this disaster of models and design claims both by the maker and the Army people promoting it, and the Congressmen in whose districts jobs would come.
Your last post had quote of the Eia as follows:
"... To satisfy the increase in world liquids demand in the Reference case, liquids production increases by 26 million barrels per day from 2007 to 2035, including the production of both conventional liquid supplies (crude oil and lease condensate, natural gas plant liquids, and refinery gain) and unconventional supplies (biofuels, oil sands, extra-heavy oil, coal-to-liquids, gas-to-liquids, and shale oil) (Figure 28 and Table 3). In the Reference case, sustained high world oil prices allow for the economical development of unconventional resources and the use of enhanced oil recovery technologies to increase production of conventional resources."
This essentially circular logic. They build a model with a reference case demand increase much lower than any reasonable estimate that only includes China and India rate of oil consumption increase. They and you justify this lower demand as follows, to quote you:
" they are realistic about what we can do to meet this demand.”
I.e. only about 26 million barrels can be produced with current technology at the price increase they assumed (that is the circular reasoning) so demand cannot increase more than 26 million barrels.
Oh but it can and will by the increase demand from China and India alone. If we don’t use circular reasoning and avoid assuming a price from models that makes demand increase only 26 million barrels, but instead estimate the demand, whether or not it can be satisfied at their model’s price increase, then both higher prices and higher production are realistic. I.e. the Chinese will be able to pay for some of Brazil’s sugar cane to be converted into expensive liquid fuel for existing gasoline cars. - It is already being made into diesel fuel and plastics. That may require the price to be $300/brl. But China can and will pay it. California's old oil fields will produce again when the price gets high enough, etc.
Summary: You can not build a model that projects a price, based on a model of demand and then deduce the increment of production that price will produce, which will be the increase in satisfied demand. That is circular logic. (Start with model's demand, turn some math cranks and end up with computed demand.)
I don’t believe them because:
(1) Circular reasoning is not valid.
(2)They are under political pressure not to project a disastrous oil future for the US
PS If you don’t believe models, even made by quants, are adjusted to show the sponsor’s desired results, you are very naive. For example, some very skilled quants designed the complex CDOs and as requested told that because of their tiered structure and regional diversification they were much more secure than the underlying mortgages. That was what they were paid to do and say. Well we now call those CDOs “toxic trash” but the quants satisfied the desires of the banks and mortgage writers who hired them. Their models showed them to be very sound, AAA, investment as that was the wish of the people paying them.
The manufacture's models of the Abrahams tank* showed it would float, not explode when hit by artillery shell, not kill everyone inside with toxic gases, etc. but one Whistle blower filled one with sheep and they died. Same story on the Marine’s “osprey” plane / helicopter. Models did not show most would crash. Climate effect of CO2 models strangely always show what their sponsor wanted them to. Etc.
In the modern computerized world, you must have a model to prove your point, so you build one that does.
* I may have the name wrong. It was also called the "all purpose fighting vehicle" as I recall. There even was a movie made to tell this disaster of models and design claims both by the maker and the Army people promoting it, and the Congressmen in whose districts jobs would come.
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Production fell before the recession, in fact the recession may have been amplified by high oil prices.
http://www.theoildrum.com/node/4727
http://www.voxeu.org/index.php?q=node/3664
http://www.frbsf.org/publications/economics/letter/2005/el2005-31.html
Despite the fact they were wrong every other year, what faith
No production fell first because of the spike in high prices and then because of the recession.
2010 production is up over 2006.
So no, they are not wrong, their predictions are long range predictions, so looking over a 3 year horizon means nothing.
Arthur
2010 production is up over 2006.
So no, they are not wrong, their predictions are long range predictions, so looking over a 3 year horizon means nothing.
Arthur
and why did prices go so high, huuumm? because demand nearly out stripped supply and the production margin over demand was dangerously narrow! Of course production dropped with the recession, less oil was needed, but that after the fact.
long range, not wrong? They can't even make consistent long term projections! Let alone been any more accurate then a shot in the dark in the short term! Check it:
"As recently as 2007, the EIA saw a rosy future of oil supplies increasing with demand. It predicted oil consumption would rise by 15 mbpd to 2020, an ample amount to cover most eventualities. By 2030, the oil supply would reach nearly 118 mbpd, or 23 mbpd more than in 2006. But over time, this optimism has faded, with each succeeding year forecast lower than the year before. For 2030, the oil supply forecast has declined by 14 mbpd in only the last three years. This drop is as much as the combined output of Saudi Arabia and China."
"In the last decade or so, the EIA's forecast has inevitably proved too rosy by a margin. While SEC-approved prospectuses still routinely cite the EIA, those who deal with oil forecasts on a daily basis have come to discount the EIA as simply unreliable and inappropriate as a basis for investments or decision-making. But the EIA appears to have drawn a line in the sand with its new IEO and placed its fortunes firmly with the peak oil crowd. At least to 2020."
http://www.econbrowser.com/archives/2010/06/eia_hard_core_p.html
Actually:
the EIA, normally the cheerleader for production growth, has become amongst the most pessimistic forecasters around. For example, its forecasts to 2020 are 2-3 mbpd lower than that of traditionally dour Total, the French oil major. And they are below our own forecasts at Douglas-Westwood through 2020. As we are normally considered to be in the peak oil camp, the EIA's forecast is nothing short of remarkable, and grim.
the EIA, normally the cheerleader for production growth, has become amongst the most pessimistic forecasters around. For example, its forecasts to 2020 are 2-3 mbpd lower than that of traditionally dour Total, the French oil major. And they are below our own forecasts at Douglas-Westwood through 2020. As we are normally considered to be in the peak oil camp, the EIA's forecast is nothing short of remarkable, and grim.
My argument stands, they completely flipped position, and yet you still think them reliable! You know who reliable: the ones that that have been saying peak oil was coming decades ago! Hubert made his prediction over 50 years ago and was off by 6 years and the whole EIA have been off by decades even several years after the peak! More so your argument that unconventional production will keep up and keep oil prices from going astronomical/shortages is pure optimism, and to claim that the EIA belief in this optimism is good evidence runs contrary to the fact the EIA is been completely wrong most of this time. If you want to convince me in this optimism you best find more reliable sources than the EIA!
I don't need to convince you.
Pessimists seem to like to try to convince everyone that the sky is falling.
It's not.
We have more proven reserves today, then we have EVER had.
http://reason.com/archives/2006/05/05/peak-oil-panic
Arthur
Pessimists seem to like to try to convince everyone that the sky is falling.
It's not.
We have more proven reserves today, then we have EVER had.
http://reason.com/archives/2006/05/05/peak-oil-panic
Arthur
No I'm quite open to believing this.
Because of the addition of unconventional oil, oil which is expensive and slow to extract, getting that capacity online and dealing with normal prices in excess of $100 a barrel is going to take some time, time we may not have.
Fraggle Rocker
Staff member
As I have posted elsewhere (perhaps earlier in this thread, so please forgive me if you've already read it and "just move along folks"), we will eventually exhaust our supply of fossil fuels for one insurmountable reason: fossil fuels are no longer being created!
When the first trees evolved, no organism in existence had an enzyme that could break down lignin, the organic compound that gives wood its hardness. When trees died and fell over they just lay there, and lay there, for tens of millions of years, until physical forces rather than biological ones slowly broke them down, such as erosion. Most dead trees were buried. The pressure slowly condensed the carbon in them into coal, then petroleum and even natural gas. (A few happened not to be buried. Water flowing through their microscopic capillaries slowly replaced their organic molecules with minerals, creating the Petrified Forest in the Arizona desert.)
But nature has a way of balancing itself. Along came one of the most humble organisms ever to live on this planet: the lowly mushrooms, the species in the order Agaricales within the kingom Fungi. (Fungi are not plants, they do not perform photosynthesis.) Mushrooms produce lignase, the precise enzyme necessary to decompose lignin. Many fungi are parasites, but mushrooms are detritivores, consumers of dead organisms. They shoot roots into dead trees, break down the lignase and metabolize the chemicals for growth and reproduction.
If you had walked through a forest a couple of hundred million years ago, you would have had to make your way around gigantic piles of strong, solid dead tree trunks: that's why it was called the Carboniferous Era, the era in which coal deposits were laid down. Today you see a single layer of rotting trunks utterly covered with healthy, hungry mushrooms!
So the fossil fuels we have today are all that there will ever be. When we use them up, they will be gone forever. The question is, therefore, which generation is going to have to deal with this reality? What a legacy to leave to our great-grandchildren, aren't we nice!
), we will eventually exhaust our supply of fossil fuels for one insurmountable reason: fossil fuels are no longer being created!When the first trees evolved, no organism in existence had an enzyme that could break down lignin, the organic compound that gives wood its hardness. When trees died and fell over they just lay there, and lay there, for tens of millions of years, until physical forces rather than biological ones slowly broke them down, such as erosion. Most dead trees were buried. The pressure slowly condensed the carbon in them into coal, then petroleum and even natural gas. (A few happened not to be buried. Water flowing through their microscopic capillaries slowly replaced their organic molecules with minerals, creating the Petrified Forest in the Arizona desert.)
But nature has a way of balancing itself. Along came one of the most humble organisms ever to live on this planet: the lowly mushrooms, the species in the order Agaricales within the kingom Fungi. (Fungi are not plants, they do not perform photosynthesis.) Mushrooms produce lignase, the precise enzyme necessary to decompose lignin. Many fungi are parasites, but mushrooms are detritivores, consumers of dead organisms. They shoot roots into dead trees, break down the lignase and metabolize the chemicals for growth and reproduction.
If you had walked through a forest a couple of hundred million years ago, you would have had to make your way around gigantic piles of strong, solid dead tree trunks: that's why it was called the Carboniferous Era, the era in which coal deposits were laid down. Today you see a single layer of rotting trunks utterly covered with healthy, hungry mushrooms!
So the fossil fuels we have today are all that there will ever be. When we use them up, they will be gone forever. The question is, therefore, which generation is going to have to deal with this reality? What a legacy to leave to our great-grandchildren, aren't we nice!
Nope.
The definition of proven reserves takes into account only that which you can recover at current market conditions.
If you were to double the price people were willing to pay for a barrel of oil you would greatly increase the proven reserves.
As far as "time we may not have", not likely. We use a great deal of oil that we don't absolutely have to use, if the price was to go up considerably people would change their usage patterns and the demand would drop.
Arthur