gordon.coale
 
Home
 


Weblog Archives

   
 
  Monday  March 5  2007    09: 19 AM

energy

Saudi Arabian oil declines 8% in 2006


Overall, I feel this data is clear enough that I'm willing to go out on a limb and conclude the following:

Saudi Arabian oil production is now in decline.

The decline rate during the first year is very high (8%), akin to decline rates in other places developed with modern horizontal drilling techniques such as the North Sea.

Declines are rather unlikely to be arrested, and may well accelerate.
[...]


I suggest that this is likely to place severe political strains on Saudi Arabia within a year or two at most.

[more]


The Ethanol Scam
Food or Fuel?


The ethanol scam just keeps getting more and more absurd. In January, three U.S. senators two Democrats, Tom Harkin of Iowa and Barack Obama of Illinois, along with Indiana Republican Richard Lugar introduced a bill that would promote the use of ethanol. It also mandates the use of more biodiesel and creates tax credits for the production of cellulosic ethanol. They called their bill the "American Fuels Act of 2007."

The most amazing part of the press release trumpeting the legislation is its fourth paragraph, in which Lugar declares that "U.S. policies should be targeted to replace hydrocarbons with carbohydrates."

Let's consider that for a moment. In the 18th and 19th centuries, the U.S. economy was primarily based on carbohydrates. For most people, horses were the main mode of transportation. They were also a primary work source for plowing and planting. Aside from coal, which was used by the railroads and in some factories, the U.S. economy depended largely on the ability of draft animals to turn grass and forage into usable toil. America's farmers were solely focused on producing food and fiber. And while the U.S. was moderately prosperous, it was not a world leader.

Oil changed all that. After the discovery of vast quantities of oil in Texas, Oklahoma, and other locales, America was able to create a modern transportation system, with cars, buses, and airplanes. That oil helped the U.S. become a dominant military power. Humans were freed from the limitations of the carbohydrate economy, which was constrained by the amount of arable land.

Thus while Lugar and his ilk promote ethanol, they are ignoring a pivotal question: should our farms produce food or fuel?

Last September, Lester Brown, the president of the Earth Policy Institute (a group that promotes "an environmentally sustainable economy") wrote in a Washington Post opinion piece that the amount of grain needed to make enough ethanol to fill a 25-gallon SUV tank "would feed one person for a full year. If the United States converted its entire grain harvest into ethanol, it would satisfy less than 16 percent of its automotive needs." Brown said the ongoing ethanol boom in the U.S. was "setting the stage for an epic competition. In a narrow sense, it is one between the world's supermarkets and its service stations." More broadly, "it is a battle between the world's 800 million automobile owners, who want to maintain their mobility, and the world's 2 billion poorest people, who simply want to survive."

[more]