Bad news on the oil front - 20-25% US energy suppy gone - for quite awhile

[FloridaPat]

" What is not being discussed rationally by the mainstream media is Katrina’s impact on energy production. They don’t dare. By my calculations and those of oil energy expert Jan Lundberg, the United States has just lost between 20% and 25% of its energy supply. My projection is that it’s not coming back — at least not most of it.

As a result of Katrina, Saudi Arabia has finally admitted that it cannot increase production. Many of us knew they’ve been lying for at least two years. The Energy Information Administration has just admitted that global demand has been outstripping supply for several months before Katrina. Nice time to start telling the truth. Nature is finally calling everybody’s bluff. The liars, deniers and mentally ill will be exposed soon enough and they will pay their own price. Daniel Yergin will finally get his comeuppance. FTW’s race is to reach as many people as possible who want to prepare and are willing to prepare for this in local community settings.

As many as twenty offshore rigs have now been confirmed as adrift, capsized, listing or sunk. Each rig may have as many as eight wells. Where’s the money coming from to replace them? How long will that take?

Bottom line: my assessment is that New Orleans is never going to be rebuilt and that US domestic oil production will never again reach pre-Katrina levels. The infrastructure is gone, the people are gone, and the US economy will be on life support very, very quickly. If people are griping at $5.00 gasoline what will they do when it’s $8.00? $10.00? Start shooting (the wrong people)? How difficult is it to rebuild in that kind of social climate? And if US oil production does not soon exceed pre-Katrina levels then the US economy is doomed anyway. It’s a catch-up game now. I think it’s quite likely that the Bush administration is responding so ineptly in part because it is in a complete crisis mode realizing that the entire United States is on the brink of collapse and there’s very little they can do about it. The Bush administration doesn’t know how to build things up, only blow them up. They aren’t worrying about New Orleans because they’re frantically triaging the rest of the nation and deciding what can be saved elsewhere. "

http://www.fromthewilderness.com/free/ww3/090205_bet_life.shtml

[HockeyMom]

1. People FREEZING because they cannot afford to heat their Homes?????

That is what we are looking at, not just the price of gasoline.

[tocqueville]

5. it won't happen now

read my post below

[Media_Lies_Daily]

31. Do you really believe that the U. S. energy companies won't....

...gouge us for as much as they can get despite oil from other countries??

[mhr]

2. Peak Oil Trumps All

eom

[tocqueville]

3. Europe and other countries are starting a lifeline to replace it

http://news.yahoo.com/s/nm/20050902/bs_nm/energy_katrina_europe_wrap_dc

Oil price dips as Europe promises aid By Janet McBride and Peg Mackey
Fri Sep 2, 2:06 PM ET


LONDON (Reuters) - Oil prices fell close to $2 a barrel on Friday as Europe and Canada prepared to tap one million barrels a day of gasoline from emergency stockpiles to relieve an energy crisis threatening the United States.

Storage tanks have run down in the world's biggest consumer after Hurricane Katrina tore at the heart of the U.S. refining sector in the Gulf of Mexico on Monday and shut in a million barrels of daily gasoline output.

As the crisis deepened on Friday, the West's energy watchdog the International Energy Agency announced it members would release two million barrels per day (bpd) of oil over a 30-day period to help ease an oil supply crunch.

Non-U.S. refiners, mainly in Europe, will provide about half the volume, with the remainder coming from oil in U.S. reserves.

http://news.yahoo.com/s/nm/20050902/bs_nm/markets_oil_dc

[CHIMO]

16. Don't Believe

Everything you read.

Conservation needed to keep PM's promise to provide more energy to U.S.

SASKATOON (CP) - Prime Minister Paul Martin promised Friday that Canada will provide more energy to the U.S. in the aftermath of hurricane Katrina, but with oil production already flat-out, Canadians will have to use less fuel to create the extra supply.

Martin acknowledged Canada does not have a large reserve.

"So the question is are we going to be in a position to provide additional supplies and . . . we have checked across the country with the companies and the provinces . . . (and) we will be able to do so."

http://money.canoe.ca/News/Sectors/Energy/2005/09/02/1199613-cp.html

As there is no incentive for Canada to stockpile for the use of others any extra exports will essentially have to come from reduced consumption. This AM some gas stations outside Edmonton, Alberta had empty signs at their stations.

[daleo]

40. And Edmonton is the center of the Canadian oil refining industry

For those who don't know. I am glad I can walk to work. But this winter might be crazy for home heating.

[MercutioATC]

4. I thought the Gulf coast only provided 17% of our oil????

Some of that is back online already.

How are we losing 20-25%?

[achtung_circus]

8. Not just production.

Factor in refinery capacity.

[MercutioATC]

9. Gotcha. I haven't seen those numbers.

Obviously, that WOULD make a difference.

[achtung_circus]

13. Start here

"TEXAS CITY, Tex. - The forest of oil refining towers on this sprawling industrial complex on Galveston Bay sits in the heart of the greatest concentration of refining capacity in the world. Roughly half of the gasoline consumed in the U.S. is made along this stretch of Gulf coast from Corpus Christi, Texas to New Orleans."

<http://www.msnbc.msn.com/id/6019739/>

[screembloodymurder]

30. If the next hurricane hits anywhere near Texas, I'm going to be spooked.

Maybe Bush is the anti-christ.

[Massacure]

15. I hear 1.9 million barrels of refinery capacity is offline.

The U.S. uses about 21 million barrels. So we are missing just under 20% of our refining capacity.

[BeFree]

19. Good lord, can't you do math?

Quote:

I hear 1.9 million barrels of refinery capacity is offline."

The U.S. uses about 21 million barrels. So we are missing just under 20% of our refining capacity.

It is actually only 10%. Other refineries can ramp up that amount in a few weeks and cover the deficit. Now that people are starting to drive less, the demand is about to go down. And the messed up plants will be back on line soon.

Yall are chicken littles; saying we are doomed by sunset. Just stop it.

Yeah we are gonna run out of oil, one day. But that day is at least a few years away, and that day can be delayed by conservation and more economical use of the oil left.

Look, people are using less gas already due to the higher prices and I have a sneeking suspicion that this week's run-up is the oil companies last gasp in the $1.50 to $3.00 run-up we've recently seen. Gas will be back down to 2.25 before winter because there will be an excess on the market.

The Gulf is not wiped out. Only 10 % has been effected. Yall quit being chicken littles, Ok?

[Massacure]

32. Ahh, massive brain fart. Thanks for the correction.

[stillcool]

10. more from the article.....

Gulf energy production has four main components: drilling and production, pipeline delivery to shore, refinery capacity, and then delivery to the rest of the nation. We have heard precious little about the damage to Louisiana’s Port Fourchon which is the largest point at which energy passes from sea to land in the region. It is heavily damaged and mostly inoperable for now, despite optimistic financial reports, intended to calm the markets, stating that “damage is minimal.” I am quite sure that I speak for the maybe 250,000 New Orleans residents who couldn’t or wouldn’t get out when I say, “Screw the markets!”

Production, if and when it starts trickling again, will most likely shift to Port Murphy or to Lake Charles. Sounds easy in the abstract, but the corporate headquarters at which to make and implement those decisions were mostly located in New Orleans. Shifting energy flows will never replace what was lost because those two facilities already face the daunting task of restoring their own output. They can’t handle the additional burden of compensation for what has been lost. As one astute and great researcher put it, “How will the oil companies even find their workers or tell them where to report for work?” Where will the workers live? Where will they buy groceries? How will they get to and from work if the gasoline they’re supposed to produce isn’t there? The Louisiana Offshore Oil Port (LOOP) is also much more seriously damaged than press accounts disclose. It’s here that supertankers from overseas (used to) offload. They have no place else to do it. They’re too big. I have seen video of LOOP damage which doesn’t look anything like the minimal damage that’s been reported. OK, so when the port is fixed what about the damaged pipelines running to shore? How many boat anchors have been dragged over them? In how many places are they ruptured, crushed or broken?

As many as twenty offshore rigs have now been confirmed as adrift, capsized, listing or sunk. Each rig may have as many as eight wells. Where’s the money coming from to replace them? How long will that take?

[Toots]

25. Almost all oil landed in the USA does so near New Orleans

The pipelines havbe been severely damaged and offloading of oil has been put on hold for the time being while they are frantically trying to reestablish the connections. It is a MAJOR disruption.

[natrat]

51. so much for mr chicken littles yall just relax comments

[jsamuel]

6. I am starting to carpool to work next week. Try to do the same

[gasolineboycottday]

49. We support carpooling, public transport - Gasoline Boycott Day 9/5/05

We support carpooling, public transport - Gasoline Boycott Day 9/5/05...

News at:

http://www.gasolineboycottday.org

[stillcool]

7. Thank You for the link...

..and thank you Michael Rupport. Logic...what a concept.

[Drum]

11. I don't even have a vehicle

but I'll be ponying up plenty of $ for higher prices of everything, and even more pissed at our petro-fuel slavery, the gluttonous consumers, and the "ain't-life-grand" idiots that continue to drive us toward this precipice.

if we all suffered, it would be national, and strengthening. but these crises are---for some---big windfalls, again and again.

the new america?

[Eloriel]

12. NOMINATED - this is one kick-ass important thread, IMO nt

[MelissaB]

14. Kicking an important thread

[DoYouEverWonder]

17. How many years did we live without Iraqi oil ?

and the price didn't go up either.

[FloridaPat]

18. We were getting 10% of their oil. Don't forget all that crap about

how until this week prices were still lower than the 80's once you adjust for inflation.

[DoYouEverWonder]

20. How much of our oil comes from the Gulf

Not that much more I would guess, since what about 60 - 70% comes from the ME.

[FloridaPat]

21. Something like that. The rest comes from Gulf of Florida, Venuzuela,

(our 4th biggest export to us?( and Canada and Mexico.

[DoYouEverWonder]

23. So maybe with gas at $3.00 a gallon and more soon

a lot of people are cutting back on their driving. I think we could easily cut back and still be okay. But of course that would require leadership to help and encourage people to change their behavior. Kind of like Jimmie Carter in the 70's, but unfortunately he was too successful. Can't have that now can we?

[Dogmudgeon]

22. It's not as bad as Mike Ruppert makes it out to be

But it's bad enough.

It's actually not "that much" oil, but we don't have a whole lot of wiggle room anymore.

I also don't think that "the entire United States is on the brink of collapse", but this is going to hurt. In addition, there will be unforseen consequences to the loss of so many jobs and so much capital along the Gulf Coast. One cost that has been ignored is the loss of personal property. Less than 25% of the homeowners had flood insurance, for instance.

If the LOOP is out, and twenty rigs are gone, that's one hell of a massive financial loss, as well. There is a huge amount of capital tied up in the oil infrastructure, and billions of worker-hours of labor.

As for the human cost, it never gets counted, especially by Bush, but it will become increasingly important. A few more of these disasters, and most people in the USA will have lost a friend, neighbor, or loved one. This will have political consequences.

Katrina was a blow. A trauma. A wound. More problems -- during recovery, if you will -- are bound to happen, but we can cope. But we can't cope as well with ongoing energy resource depletion and the financial malfeasance that have been part of the underlying machinery of American power since WW2. If Mike Ruppert has exaggerated his numbers, he has been conservative in his explanation of the myriad side-effects of the storm.

--p!

[Strelnikov_]

33. LOOP Is Up

Until the next Cat. 5 blows in in a couple of weeks, that is.

http://www.theoildrum.com/

GOM production represents 25% of domestic oil production. More importantly, though, it represents the only proven high volume reserves remaining in the US. The Thunder Horse deep water platform was to produce 250k bbl/dy, until Dennis tipped it.

With global warming, one has to wonder about the true potential of GOM deep water, and therefore overall US domestic production depletion rates.

[MS68]

24. Some Orlando gas stations out of gas..

I called my husband on my way home from class and he told me I'd better stop and get gas. I thought he was nuts, but I figured I'd stop at the gas station. There were no cars at the first one I stopped at. I thought "This is either good news or bad news". It was bad news--no gas. A few others were out too. However, the local 7-11 had everything but super premium.

A bit scary to already be running out....

[charlie]

26. Ruppert's always been... excitable

Reality is usually a lot less dire than his overamped prognostications.

But we'll find out soon enough, won't we?

[BootinUp]

27. You're buying a load of bull IMHO.

I am not saying we won't be pinched for a month or two or even three. And this winter natural gas and heating oil and electricity will be way up. But these oil companies can and will increase production. The problem in the US is mainly on the refinery end.

[FloridaPat]

28. The oil companies can no longer increase production. At least of

sweet crude. They can only increase sour crude production.

[Strelnikov_]

34. .

[BootinUp]

41. There is missing information

How much is being spent to increase oil production. Without that information you're chart doesn't mean much.... except that there is still plenty of oil out there.

The oil companies have a desire to limit production in order to boost the price of their product.

[Strelnikov_]

42. Yes, There Is Still Plenty Of Oil Out There

That will be the oil that is recovered in the regression leg (as we Hydrologists call it) of the production curve.

The problem is peaking. The model has proven out in numerous countries, including the US. The only variable that really matters is reserve size. Problem is, most of the reserves remaining are in countries will little transparency.

I have done the reading/research. I am convinced peak oil is, if not here, is near. If you feel otherwise, if you feel we live on a world of infinite resources, with ever increasing rates of extraction possible, so be it. If you feel the Saudis, Hugo Chavez, Iranian Mullahs, UAE, Qatar, Putin's Russia, Canada, Kuwait, Nigeria, Norway, Indonesian, and the remaining seven sisters are colluding to restrict the supply of oil, so be it.

[BootinUp]

43. Did I say infinite, no I did not.

I am not an expert on reserves and the effect on world wide output. However, it is a fact that as the world demands more, more will be invested in order to meet the demand.

So, what is the definition of peak oil exactly? Is it that point that oil production goes down or the point where demand goes down due to price? Do you disagree with the hypothesis that if the world producers were investing more they could increase production?

[Strelnikov_]

44. Yes, I Do

And the definition of peak oil is the peaking of production rate. By definition, it is also the peaking of demand, since physical demand cannot exceed supply, and one would not be producing at a given rate without demand for an amount equal to or exceeding supply.

My reading/research indicates that this has already been taking place (EOR, deepwater). As M. Simmons notes, EOR has been used in the US for decades, and the production rate is still decreasing. The Saudis have been using EOR/Secondary extraction, and all indications are that their production is flat. Simmons et.al. also point out that the use of EOR/secondary extraction results in a natural gas like crash in production, versus the slow/steady decline for more conventional methods.

In other words, increased production simply means we run out sooner.

[BootinUp]

46. Demand is determined by

how much is sold in relation to price. Supply and Demand are intricately related but they are not the same.

Maybe I stated that in a non-standard way, anybody can jump in.

[Strelnikov_]

48. "Supply equals demand today, supply will equal demand in 2025 . . ,

http://www.econbrowser.com/archives/2005/08/limitations_of.html#more

The reason economists want to pay so much attention to the price is because it is the one variable that is guaranteed to adjust and adapt to any and all unforeseen circumstances that may develop so as to ensure that demand always equals supply. Supply equals demand today, supply will equal demand in 2025, and supply will equal demand in 2050. Whatever Hirsch means by "peaking of world conventional oil production," it certainly isn't the condition that "production will no longer satisfy demand."

. . .

Since Hirsch is using this notion of "world oil demand" in a way that he presumes holds meaning to any reader, but is definitely not the way mainstream economists would use the expression, I simply have to guess about what he thinks he means by the phrase. My best guess is that he has in mind something along the lines of the answer to the question, if prices don't change too much from where they are now, what would the quantity demanded be at any given point in the future? Confirmation that this assumption is not just Hirsch's definition of "demand" but is furthermore the foundation for the whole analytical framework comes from the report's later assessment that

As world oil peaking is approached and demand for conventional oil begins to exceed supply, oil prices will rise steeply.

While I do not agree with his pedantic interpretation of the implications of the Hirsh report, he presents the classic economic view that demand = supply with price as the mechanism that equates the two.

So, yes, I should have said "without demand for an amount equal to supply, and the desire for ever more".

The thing I think the economists miss is that we are not talking about toilet paper at Wal-Mart, we are talking about an essential nutrient of current industrial society, of which we have no viable substitute for in the short term.

Would an economist apply such a calculating analysis to, say, food. That price will equate demand and supply, through demand destruction, said demand destruction being death of a part of the population?

[BootinUp]

50. I think we are talking past each other

I simply don't agree that oil producers can't increase production at this time. They plan increases to coincide with world demand. And it takes a certain variable amount time and money to ratchet up production of course.

[Strelnikov_]

52. And I Do Not Think They Can, Based On The Research I Have Done

on the issue. As I stated before, I feel we are at or near peak, you apparently do not. So be it. The conclusions I have reached may be wrong. Wouldn't be the first time. Only time will tell. I never believed the Country would re-elect the Chimp, either.

In the meantime, until I am proven wrong, I am taking action to prepare myself as much as I can.

I think we do agree on Clark, though. Think how the hurricane response would have been different. Too bad the Democratic electorate did not have the foresight of the majority of DU'ers back in Jan. 04.

[BootinUp]

53. thats cool.

>In the meantime, until I am proven wrong, I am taking action to prepare >myself as much as I can.

One thing is for sure, there will be massive economic dislocation.

>I think we do agree on Clark, though. Think how the hurricane response >would have been different. Too bad the Democratic electorate did not >have the foresight of the majority of DU'ers back in Jan. 04.

So true. Cheers.

[lostinacause]

45. You are misinformed. America's production is no where near high enough

to supply oil for all its people.

[BootinUp]

47. Thats not what I meant

or said either. When I talked about oil companies I was referring to world wide oil basically. Should have been clearer.

[lostinacause]

55. That makes sense. Thanks for clairifying.

[Imagevision]

29. True or false - Bush will rework the scenario to benefit oil Companies

http://downingstreetmemo.com/

[leeroysphitz]

35. La la la la la, I can't hear you, la la la la la

[neverforget]

36. I saw oil analyst on TV say that we are already through the worst of

oil crisis and next week, prices will start to fall, but not by much. He cited that other countries were sending all of this oil over to the US. Now my understanding of the problem is that it's not one of supply, but rather refining capacity. We have the oil but not the refined gas. Anyway, I don't believe him because everything about this disaster has been underestimated.

[RummyTheDummy]

37. That's interesting

Because I noticed today prices dropped 2 or 3 cents in my area today. The OP that said the refineries and pipelines crippled by Katrina will "never be back" is wrong. But overall, clearly long term questions remain about supply.

[newswolf56]

38. Here's another piece of the same bitter pie:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x4592922

[newswolf56]

39. Oil is only the cornerstone of the problem. Shortages imposed by the...

aftermath of Karina -- food, medicine, goods of all kinds -- will afflict the entire nation in direct proportion to which the oil shortage cripples the transport system: 25 percent less fuel could easily mean 25 percent less highway transport. Worse -- with the most deliberately neglected rail network in the industrial world (this another consequence of the ruinous extent to which our whoring politicians have sold us out to Big Oil) -- the U.S. has nothing approaching the rail capabilities necessary to take up the slack. Shortages are thus inevitable, and with these shortages will come inflation of a sort never before seen in the United States -- inflation exacerbated by the increasing worthlessness of the dollar.

The hideous truth is that the horrific consequences of Katrina are just beginning -- and, yes, the media is indeed suppressing this information, no doubt on specific orders from its corporate masters. Ultimately what we are looking at is the end of life in America as we have known it. Forever.

Anyone who believes otherwise is ignoring current economic realities -- outsourcing, downsizing, wage-reduction, pension-looting, wildly skyrocketing prices, methodical destruction of the social safety net -- all precursory indications that prove beyond doubt no recovery is possible. Why? Because what these economic realities demonstrate conclusively is that the oligarchy will not allow recovery. The oligarchy profits obscenely by the reduction of all the rest of us to abject poverty and utter powerlessness: hence the permanence of the worsening conditions now being imposed.

[natrat]

54. damn , and i thought i was somewhat immune here on the west coast