This blog is really dead!

If you haven't noticed, this blog is DEAD! I write in English on futuramb blog and in Swedish on Scenariotankar (which is really a bad name but...)

See you there!

Former Aramco top executive reveals clues to the Saudi situation

Peter Maass is a journalist writing a book about the current oil situation wrote this interesting New York Times article about the state of Saudi Arabia's oil production. It turns out that nobody outside Saudi Arabia actually knows how much oil is available and which capacity the system really has.

Quote from article:

The most worrisome part of the crisis ahead revolves around a set of statistics from the Energy Information Administration, which is part of the U.S. Department of Energy. The E.I.A. forecast in 2004 that by 2020 Saudi Arabia would produce 18.2 million barrels of oil a day, and that by 2025 it would produce 22.5 million barrels a day. Those estimates were unusual, though. They were not based on secret information about Saudi capacity, but on the projected needs of energy consumers. The figures simply assumed that Saudi Arabia would be able to produce whatever the United States needed it to produce. Just last month, the E.I.A. suddenly revised those figures downward -- not because of startling new information about world demand or Saudi supply but because the figures had given so much ammunition to critics. Husseini, for example, described the 2004 forecast as unrealistic.
...
When I asked whether the kingdom could produce 20 million barrels a day -- about twice what it is producing today from fields that may be past their prime -- Husseini paused for a second or two. It wasn't clear if he was taking a moment to figure out the answer or if he needed a moment to decide if he should utter it. He finally replied with a single word: No.

End quote.
>> The New York Times article in Energy Bulletin

China - the world's factory for cars as well

During the Shanghai Auto Show, DaimlerChrysler shocked the automotive world by announcing their intention to export small cars from China to the United States. This is just another step in China's direction towards becoming the world's factory. Auto parts have been manufactured in China since long, and the problems to compete with the west so far have just been the quality. Gradually the quality is increasing and is currently on par with Korea and rising.

China's Commerce Ministry is forecasting the automotive exports, which mainly consists of auto parts today, to increase from $11.8 billion last year to between $70 and $100 billion by 2010.

If we haven't done our scenario work about how the world will look like when China steps forward, it is about time now!

The main problem today is that our institutions are almost completely unable to think about decline. TV-program after TV-program is reporting on the effects of the business tsunami created by WalMart and others... but who is building the structures that will come after? If it is necessary for the old organizations to die and for others to rise from the ashes, who is creating the new frameworks and mindsets for them?

International Herald Tribune - China on brink of cracking car market

Consequences for US after the oil peak

Since most of the countries in Europe have experienced several oil crisis, we think we know what it is all about. And maybe we are right, but all the previous oil crisis situations have been temporary. The coming one is not temporary but one that will prevail - it is a permanent situation. The solution is not to hide and bunker, but to change to other sources of energy and as fast as possible change our patterns of behaviour to a more sustainable way.

For Americans this issue could turn out to be much more interesting, or should I say, stressing. What is happening in an oil crisis situation in a country which does not have a decent railroad system. Most people and businesses rely on cars, trucks and aeroplanes. How will this affect the big cities which rely heavily och trucks for the food supply. What is happening on the national security scene with a country which has been going to war several times since to 1970:s mainly to protect their oil supply?

James Howard Kunstle has written a book by the name The Long Emergency which have been adapted to an article in The RollingStone where he discuss the consequences for the American society. It is an interesting and sometimes frightening reading. This is quote from the beginning of the article:

Carl Jung, one of the fathers of psychology, famously remarked that "people cannot stand too much reality." What you're about to read may challenge your assumptions about the kind of world we live in, and especially the kind of world into which events are propelling us. We are in for a rough ride through uncharted territory.

Read the article

IMF - Oil price will remain high

In a recent report IMF acknowledges that the Oil price will remain high. The IMF report doesn't however seem to acknowledge the uncertainty that China's oil consumption will grow exponentially when certain income levels are met (see my blog: Criticial Uncertainties in the Oil forecasts.

In the report IMF are forecasting a sustained oil price at levels between $69 and $97 in 2030. The message to the world is of course to adjust to these new levels.

One of the really big question marks is how and when George W. Bush will react and what measures he will take. In a critical article in NY Times (free registration required> Thomas L. Friedman asks the relevant question:

How will future historians explain it? How will they possibly explain why President George W. Bush decided to ignore the energy crisis staring us in the face and chose instead to spend all his electoral capital on a futile effort to undo the New Deal, by partially privatizing Social Security? We are, quite simply, witnessing one of the greatest examples of misplaced priorities in the history of the U.S. presidency.

This article spread quickly in the world, which only underscores it's relevance.

Will the IMF report be a mile stone in the process to change the American mindset towards a new relation to oil?

Read about the report in an article in International Herald Tribune.

More arguments towards oil peak scenario

The analysts who pointed out strange things at Enron before it chrashed is now commenting the coming oil peak.

Since last fall, Herold has done peak estimates on about two dozen oil companies. Herold believes that the French oil company, Total S.A., will reach its peak production in 2007. Herold expects 2008 to be critical, with Exxon Mobil Corp., ConocoPhillips Co., BP, Royal Dutch/Shell Group, and the Italian producer, Eni S.p.A., all hitting their peaks. In 2009, Herold expects ChevronTexaco Corp. to peak. In Herold's view, each of the world's seven largest publicly traded oil companies will begin seeing production declines within the next 48 months or so.

This is another argument in the scenario describing $200/barrel scenario. An oil peak before year 2010 seems more likely for every day.

Read the article: Salon.com News | Running on empty

Even the US government knows about the coming oil peak

Many bloggers including WorldChanging and Bruce Sterling is together with me convinced that the oil is bound to peak in the near future. Al Jazeera recently wrote an article pointing out a US government report which clearly explain the unevitability of the coming oil peak. The question is not if, but when.

From the report summary:

In summary, the problem of the peaking of world conventional oil production is unlike any yet faced by modern industrial society. The challenges and uncertainties need to be much better understood. Technologies exist to mitigate the problem. Timely, aggressive risk management will be essential.

In the report there are three scenarios analyzing the effects if

1. the actions to meet the oil peak is immediate
   
2. the actions to meet the oil peak happens 10 years from now
   
3. the actions to meet the oil peak happens 20 years from now

The question is what US government will do about it. How do we prepare here in Europe?

WorldChanging: Another World Is Here: "Oil Peaking is Going to Happen"
Al Jazeera article about the report
Download the report here