This is guest post by Christian Kerschner. Christian is a PhD Candidate of the Institute for Environment and Technology (ICTA) at the Autonomous University of Barcelona and a Researcher at SERI Vienna. In his PhD he focuses on a Multimethod-analysis of Peak Oil, mainly using Input Output Approaches. Moreover he published scientific articles on the steady state economy and degrowth. His latest work centres around attitudes towards technology.

ASPO is a no-budget loose association of people interested in studying Peak Oil. It was formed in 2002 (10th anniversary this year) by Colin Campbell and Kjell Aleklett, both petroleum geologists. The term Peak Oil (which often creates confusion - I don't know how many times I had to say "no, not Pig Oil - Peak Oil") by the way was "created at that moment". They thought that ASOP (Association for the study of the oil Peak) did not sound so good so they changed the word order. The community meets yearly and consists of scientists and analysts /consultants. All speakers are on invitation only and there are mainly plenary sessions. Many speakers are contributors of the community's main communication platform The Oil Drum, which is a high profile, quite strictly edited blog and one-stop-shop for everything related to Peak Oil (PO).

In recent posts I have been looking at the potential for the historically high-producing Saudi oilfields at Abqaiq, Berri and Ghawar to sustain or even to increase current levels of production into the future. This is particularly important when one considers the historic main oilfields in production within that country. And of these, the largest not yet covered is the offshore field at Safaniya, today's topic.

Oilfields in Saudi Arabia (from Aramco via energy-pedia)

Chinese Data Mask Depth of Slowdown, Executives Say

Hong Kong. As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.

Record-setting mountains of excess coal have accumulated at the country's biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said. Electricity production and consumption are considered a telltale sign of a wide variety of economic activity, and thus are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country's economy, because the gathering and reporting of data in China isn't considered as reliable as it is in many countries.

This is a guest post by Stephen Bowers (TOD user carnot) who works for Evonik, a major chemical company based in Germany. Stephen is a petroleum chemist with over 30 years experience and started his career as a mud logger drilling oil wells.

Oil refining in Europe enters a new phase as the combination of emissions legislation and dieselisation of transport fuels demand really starts to bite. In the past months we have seen the rather muted bankruptcy of a major independent refiner, Petroplus, which was set up in the last decade by one Thomas O'Malley, who had previously set up the independent and very successful refining group Valero. Petroplus, it would appear, tried to emulate the strategy of Valero, and in Europe purchased 7 refineries of rather mixed capabilities at relatively low cost: two in France (ex Shell), two in the UK (ex BP and Phillips), one in Germany (ex Exxon), one in Belgium, and one in Switzerland. By the time of the bankruptcy announcement Petroplus had shuttered two of the refineries: one in the UK and one in France.

How did it all unravel?

In this article, the changing landscape experienced by European refiners will be explored to help understand how a business that was profitable a few short years ago became much less so.

There is a growing impression being given in the discussion of oil and natural gas supplies that the world is moving into a period where there will soon be such a plentiful sufficiency of crude that the US may consider exporting some of its production (h/t Leanan). But if one looks behind the headlines, and particularly at the current status of the largest oilfield contributing toward this rosy picture - the Ghawar field in Saudi Arabia - that optimism becomes more evidently built on a very transient set of data that, as this series of posts seeks to show, will not be sustainable for any significant period into the future.

The three major oil producers (i.e. those producing more than 5 mbd each) are currently seeing surges in production as the world moves to an overall production of 90 mbd. The OPEC June Monthly Oil Market Report (MOMR) notes that this has brought Russia to 10.33 mbd in May, some 100 kbd over the same period in 2011; and Saudi Arabia is reported to have averaged 9.917 mbd in May, up 40 kbd over April. The United States is running at 6.236 Mbd of crude (from the EIA TWIP), while importing 9.117 mbd. The MOMR reports US oil supply at 9.66 mbd on average, but counts more than just crude in this value. The gain over the past year is around 600 kbd. It is interesting to note, in regard to OPEC production the continued difference between the volumes that OPEC reports from direct contact with the suppliers, and that when the numbers are obtained from “secondary sources.”

Figure 1. OPEC production from its members, with values provided by them (OPEC June MOMR)

This is a guest post by Matthew Kuperus Heun (Calvin College) and Martin de Wit (Stellenbosch University & de Wit Sustainable Options) based on their recent paper in Energy Policy.

The Oil Drum Editors' Preface

The following analysis provides an interesting view on the relationship between EROI (Energy Return on Energy Invested) and market prices, but the strong inverse correlation that the authors emphasize may be an artifact of the underlying Cleveland (2005) EROI statistics that they use. Cleveland’s indirect energy intensity approach, based on calculating EROI from $/BTU and adjusting for energy quality using price indices, will plausibly result in lower EROI during periods of oil price spikes because of higher prices of inputs that do not correspond with higher energy inputs, and will, therefore, overstate changes in EROI that are unrelated to “energy quality.”

Because this post is excerpted, we suggest that readers refer to the full paper in Energy Policy for details of the analysis not mentioned below.

Introduction

The economical and sustainable provision of energy to run modern economies and meet human development goals is one of the Grand Challenges facing the world today. There is increasing evidence that the physical scarcity of fossil fuels is a serious possibility to reckon with. An important question to ask is whether price signals of physical scarcity will be sufficient to cause transitions to alternative fuel sources.

One proposed physical indicator of energy supply scarcity is energy return on (energy) invested (EROI). Little work has been done so far to model, test, and understand the relationship between oil prices and EROI over time. This post (based on our recent paper) investigates whether declining EROI is associated with increasing oil price and speculates on the implications of these results on oil policy. The questions addressed are:

• ‘‘How is EROI related to energy prices?’’
• ‘‘What implications do EROI trends over time have for economic and energy policy?’’
• ‘‘What is required to ensure a smooth transition away from oil toward substitutes?’’

We propose a physically based model of the interaction between physical scarcity and market prices, with a focus on the behaviour of EROI and oil prices over time.

This is a guest post by Tom Murphy. Tom Murphy is an associate professor of physics at the University of California, San Diego. This post originally appeared on Tom's blog, Do the Math.

What do you get when you cross an astronomically-inclined physicist with concerns over energy efficiency in lighting? Spectra. Lots and lots of spectra. In this post, we’ll become familiar with spectral characterization of light, see example spectra of a number of household light sources, and I’ll even throw in some mind-blowing photos. In the process, we’ll evaluate just how efficient lighting could possibly be, along the way understanding something about the physiology of light perception and the definition of the increasingly ubiquitous lighting measure called the lumen. Buckle your physics seat-belt and prepare to think like a photon.

The price of crude oil has been shown to have significant impact on the global economy, and in the current and somewhat fragile state of the various parts of that economy, the lower prices help. Yet Stuart Staniford has commented that given the Saudi need for income to hold off “Arab Spring” dissatisfaction, they are unlikely to let prices fall too far before cutting production, since even a 10% reduction in output could raise prices 20%, thereby resolving their future income concerns. This reflects well the role of the Texas Railroad Commission back when it controlled US production in order to sustain an acceptable price for oil. But that role collapsed when overall US production was no longer able to spring to the rescue when demand rose and US production could not, passing the control over prices to OPEC and more particularly the Kingdom of Saudi Arabia (KSA), who have shown a willingness to control output to ensure that it proximately followed demand and has kept prices within an acceptable range for them. Their recent increase in production to offset possible Iranian sanctions, however, is likely to be transient, since – apart from annoying Iran, it has also driven prices below that benchmark.

It is relatively easy to return to a more acceptable price by curtailing production, and as Stuart noted, this can increase KSA revenue at a time of falling global demand. However, in the opposing case, where the global economy requires a “reasonable” price for oil and will require them to increase production on a sustained basis, as they have done transiently to the limits of demand growth in the past year, that ability may be limited and of a shorter duration. It also occurs at a time that the internal use of crude is limiting the amount that the KSA can export. But while there is considerable discussion about this situation, there has been some increase in natural gas liquid production that is also important, and thus a main point of this post.

Figure 1. Recent KSA production and exports of oil (Export Databrowser)

After Part One, this is Part Two of my thoughts on some of the energy related themes of this ASPO conference and where we find ourselves now.

From the ASPO 10 Picture Gallery

Renewable Energy and Electricity

There were several presentations through the conference with a focus on renewable energy. Unfortunately, most of them were largely about the vision for renewables in Europe, rather than the details about how the vision might be achieved. For a technical ASPO conference this was a little disappointing, but reflected partly the political nature of the keynote speakers and/or sponsors. The only thing that was really new to me was the Power to Gas presentation (see energy storage below).

During the past seven years, TheOilDrum.com has hosted analysis and discussion surrounding the possibility and implications of a near term peak in global oil production and importance of energy to society in general. Out of the ~8,500 articles posted here (all searchable by keyword in upper left), the list below comprises what each author considered some of their most relevant content.