Monthly Archives: March 2012

Pres. Obama Says US Only Has 2% Of World Oil. Can That Be Right?


Obama said:  “With only 2% of the world’s reserves, we can’t just drill our way to lower gas prices.  Not when we consume 20% of the world’s oil.”  Addressing the 2% part of his statement, if he meant we have only 2% of the “proven reserves” he is correct. But he uses this figure hoping that you will come to an incorrect conclusion. The US is, by every analysis one of the most energy rich nations in the world.   Others, including the Congressional Research Service, say that the US is the most energy rich nation in the world

The second part –consuming 20% of the world’s oil– is a non sequitur, meaning it does not follow logically from the previous part of his statement.  We will talk about that later.

The basis for the President’s statement came from the DOE’s Energy Information Administration.  The US’s “proven” reserves of 20.6 billion barrels of oil are equivalent to 2% of the worlds proven reserves.

DOE’s Energy Information Admin (EIA) Table of US Reserves (Billions of BBL’s) 10/19/2011

Region Proven Inferred Un-discovered Total TechnicallyRecoverable
Onshore 12.7 50.1 51.1 113.9
Offshore 4.3 10.3 42.7 57.4
Alaska 3.5 2.1 42.0 47.6
Total US 20.6 62.5 135.8 218.9

Interpreting the table, Proven reserves are where oil production is underway and the extent of the fields is well known.  Inferred is the volume by which the estimate of total recovery from a known crude reservoir or aggregation of such reservoirs is expected to increase during the time between discovery and permanent abandonment.  Undiscovered is oil that very likely exists, and can be recovered depending in part on technology and/or the price of oil.

This table understates the reserves.  EAI says of the above table: Resources in areas where drilling is officially prohibited are not included.  Estimates of the resources in the Northern Atlantic, Northern and Central Pacific and within a 50-mile buffer off the Mid and Southern Atlantic OCS are excluded from the technically recoverable volumes.  A case in point is that the reserves in ANWR which according to the USGS may contain 12 billion barrels is not included because the Feds have taken it off the table.   Most of our costal waters are off-limits as well.

This table also excludes the shale oil in the Green River Formation in Colorado, Utah and Wyoming. The Feds control roughly ¾ of the public lands on which fossil fuel resources exist. Wiki says that: “The Green River Formation contains the largest oil shale deposits in the world. The 213 billion tons of oil shale contain an estimated 2.38 × 10¹¹ m³ (1.5 trillion US barrels) of shale oil.

When the proven reserves are stated,  how should you interpret the number?  Here is an example from The Institute for Energy Research:

Proved Oil Reserves Are Not Static

Let’s take a look at history. In 1944, U.S. proven oil reserves were 20 billion barrels — about the same as they are today. Yet, between 1945 and 2010, the United States produced 167 billion barrels of oil. In other words, the United States produced over 8 times more oil than the amount of proven oil reserves it had in 1944.  How can that be? The answer is that proven oil reserves are not stagnant because people keep looking for oil. Proven oil reserves keep changing, are officially recorded every year, tallied country by country, and published in the Oil and Gas Journal, among other publications. And due to U.S. entrepreneurship and ingenuity, more reserves are found and proven each year.

What Does More Recent Data Look Like?

So, is this an historic anomaly? No. Let’s look at more recent data. In 1980, according to the Energy Information Administration, the United States had 31.3 billion barrels of proven oil reserves. However, between 1980 and 2010, the United States produced 77.8 billion barrels of oil and still had 20.7 billion barrels of oil reserves left. In other words, between 1980 and 2010, the United States produced 2.5 times the amount of oil as it has proven oil reserves in 1980.

The preceding illustrates that comparing the proven reserves to oil consumption is at least faulty and perhaps intended to misinform.

The President said that we can’t drill our way to lower prices when we  are the largest consumer.   Now I know that OPEC is the major force in setting the price of crude.   Even so, they are not immune to the laws of supply and demand.  They know that  a substantial excess of supply over demand will cause them to either curtail production within the Cartel  to rebalance supply and demand or the price will drop.  They also know that if they see widespread drilling being undertaken,  lowering the price of crude can cause some marginal production capacity to shutdown.

Every country that has shale oil, will be out there trying to achieve some piece of national security brought about by having their own oil.  So the over supply is likely to happen.  Ask the natural gas suppliers how well their prices have held up in recent years now that the shale natural gas is becoming oversupplied.   It will happen to OPEC too.  And the sooner the better.

cbdakota

Fisker Has A New Problem


The Securities and Exchange Commissions (SEC) issued Wells Notices to the brokers (Advanced Equities, Inc) who raised most of the private financing for taxpayer-backed Fisker Automotive in connection with a private offering in 2009.  A Wells Notices tells the recipients that charges may be brought against them. According to SEC.com,  “Receiving a Wells Notice is hardly a positive event, as it signifies that you are the subject of an investigation and that enforcement proceedings are going to be commenced against you”.

There is speculation that this action by the SEC followed the filing of a lawsuit against Fisker and Advanced Equities by investor, Daniel Wray, for their alleged failure to perform fiduciary duties and for fraud, according to a posting by the National Legal and Policy Center.   This may be why the Energy Department (DOE) is holding up further distribution of a loan set aside for Fisker.  As noted in previous postings DOE said Fisker had not met the required “milestones”.

The National Legal and Policy Center posting, written by Paul Chesser, does some editorializing that is pretty much on the mark.

“It seems every week taxpayers learn something new about the clean energy “bets” the Obama administration has demanded they finance – especially Fisker. So far, before the loan was halted, $193 million in public money poured into the maker of an EV that only rich people can afford, who also get a $7,500 tax credit (plus whatever California is handing out lately) per vehicle purchase to boot. Beyond that the taxpayer support for Fisker enhanced the stock of its political allies like Kleiner Perkins (where Gore is a senior partner), and also helped pay for connected lobbyists to get the loan, while crony lawyers got paid to work inside DOE to see the loan to completion.

And now we discover The Chicago Way may have been behind Fisker’s private fundraising, and the SEC plans to find out more. This dog has a lot of fleas.

Last week,  the President announced that he wants  to up the rebate for the purchase of a hybrid or an EV. Currently the buyer can to receive up to a $7500 tax credit.  Obama  now wants to give the buyer a $10,000 check at the time of purchase.

cbdakota

Fisker Karma Dies During Consumer Report Prep For Tests


Consumer Reports was doing speedometer calibration on the Fisker Karma before undertaking the road testing when the car quit operating during  . The Dealer was called and hauled it away.  Consumer Reports said: “We buy about 80 cars a year and this is the first time in memory that we have had a car that is undriveable before it has finished our check-in process”.

Fisker says the vehicle is operating at the Dealership

Consumer Reports said: “We encountered other problems with a Karma press car that visited the track for a few hours, and we have heard of problems at press events. In addition, we see that some owners are experiencing a variety of issues, as evidenced by forums such as FiskerBuzz.com.

When we get the car back, we’ll film a First Drive video with our more traditional initial impressions. But so far, Fisker ownership is proving to be a bumpy ride”.

To see a more detailed account of this situation click here.

cbdakota

Climate Change Impacts In The USA are Already (NOT) Happening


This posting’s title, “Climate Change Impacts In the USA Are Already (Not) Happening” is a direct lift of a Craig Loehle, Ph.D. essay that was posted on the WattsUpWithThat website.   Loehle says that the US Government reports by such groups as “NASA, NOAA, EPA, USFWS, USFS, USDA and other agencies mention that climate change impacts are already observable in the USA.” Loehle adds: “This is discussed in the context of endangered species conservation, forest resource assessment, future water availability, disaster planning, agriculture policy, etc. I have read many of these reports, which often refer back to the IPCC or the US Global Change Research Program. But they are usually vague on details of what bad things are expected to happen, generally referring to increases in extreme events. Nevertheless, these vague bad things are being used to guide policy.

The USA has some of the best data and is a large country. Are bad effects of climate change really visible already? In what follows, I address the evidence often put forward to support these claims and compare these to the literature. The true story is far from alarming.”

Loehle discusses what the facts support about these observable climate impacts versus the vague bad things that the Government is spinning. The main topics he weighs in on are:

  • Ocean Acidification
  • Sea Level Rise
  • Temperature Increases
  • Floods
  • Regional Drought Frequency
  • Extreme Storm Events
  • Hurricanes
  • Fires
  • Algal Blooms
  • Changes in Ecosystems

That is a comprehensive list.  He includes references for your examination.  Click here to see the complete essay.

Loehle concludes saying: “Within the United States, the claim that bad climate effects can “already” be detected is a totally subjective and unsupported hypothetical.”

Read Loehle discussion of each of these topics.  Then spread the word.  You have to do it via the Internet and/or conversations with family, co-workers, and friends.   We cannot depend on the media as they just regurgitate whatever the alarmist say.  Partly because the media loves doom, gloom and blood to try to catch their reader’s interest.

cbdakota

Cycle 24—February Update


Cycle 24 activity took another drop in February.  The Sunspot number for February was about 30 versus the 60+ in January. (Click on Charts to expand.)

That’s a major drop in the sunspot number.  Cycle 24 certainly looks like it will be the least active cycle in the last hundred years.

Dr Hathaway of NASA has again revised his forecast of Cycle 24 Sunspots.  He now says that  the Cycle 24 sunspot number will peak (maximum) at 59. Below is his March 2012 sunspot number forecast:


F10.7 cm radio flux is down as well.  First shown on the NOAA chart followed by Dr Hathaways revised chart:

And the magnetic activity as indicated by the Ap index remains low:

cbdakota

GM Shuts Down The Volt Line. Temporary Layoff For 1300 Employees.


GM will lay off  some 1300 employees that make Volts for 5 weeks. General Motors sold 1023 Chevrolet Volts this past February , but made  2,347 Volts.

Where is GE, a company that has promised to by a boatload of Volts?

See this link for more on the story.

cbdakota

Global Temperature Update—February 2012


The UAH satellite global temperatures have been posted by Dr Roy Spencer on his website.  The February temperature anomaly is -0.12 C.   That is just slightly down from the January number of -0.09C.

Above is Dr Spencer’s chart (click on it to enlarge) of the global temperature anomalies since the start of the satellite temperature-measuring program in the late seventies.  The average global temperature departure is about 0.16C warmer that the average temperature for the period 1981-2010.  Dr Spencer might not approve of this calculation but 0.16 C over that 30-year period might indicate a warming of about 0.6C per century.  Further, if solar Cycle 24 and the next Cycle 25 perform as many are now forecasting, we may see the anomaly go negative for many years.

cbdakota