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Proposed Tax Changes on US Oil and Gas Producers

Thu, 21 May 2009 00:00:00 -0700

The Oil Drum - May. 21 (Opinion) - Last week, the government released a lengthy document, General Explanations of The Administrations 2010 Revenue Proposals, which includes a 12 page segment titled "Eliminate Oil and Gas Company Preferences". I've excerpted some of these below the fold. It strikes me that the authors of these rules do not grasp that oil has peaked, and we can't continue business as usual nor pay back our financial debts by importing 70%+ of our oil. My thoughts follow the excerpts.

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Why Oil Shortages May Cause Price Decreases, Rather than Increases

Mon, 18 May 2009 00:00:00 -0700

The Oil Drum - May. 18 (Opinion) - A lot of people think peak oil is no longer a problem because prices are no longer in the stratosphere. It seems to me that standard economic models start breaking down when production for a commodity like oil starts becoming difficult to expand and there are no good substitutes.

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Europe | Post-peak mechanized agriculture: the RAMSES project

Tue, 28 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 28 (Opinion) - Today, agriculture in the industrialized world is a task for a minuscule fraction of the workforce; people whose job is to operate heavy machinery powered by fossil fuels. But, with peak oil arriving, or perhaps already arrived, we are going to see big changes. In itself, mechanization does not affect agricultural yields, but higher costs of fossil fuels are already affecting food prices. And, without power from mechanical engines, farming would have to go back to the old ways; relying again on human and animal muscles. Richard Heinberg has spoken of the need of "50 million farmers" for agriculture in the USA. But that would imply transforming overweight and under-excercised office workers into the kind of lean and fit peasants who are the typical workforce of countries where the industrial revolution has not arrived yet. It won't be easy, especially if we were forced to do it in a short time.

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Iraqi Oil: Black Gold or Black Hole?

Mon, 27 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 27 (Opinion) - However, six years after the fall of Baghdad, the country is nowhere close to producing 6 million barrels a day. As a matter of fact, the country is still not producing at the same level it did before the war (2.2m bpd vs 2.5m bpd before the war). It is worth noting that the pre-war level was achieved despite years of war and crippling economic sanctions. Yet despite current access to capital and technology, the country could not yield better results than oil production under the Saddam regime in the midst of war and sanctions.

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Limits to Growth Model Worth Another Look

Fri, 24 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 24 (Opinion) - There are only finite resources in the world, but population continues to grow. How will this situation resolve itself? This was a question a group of scientists (Meadows et al), commissioned by the "Club of Rome," attempted to answer back in 1972, in a book called Limits to Growth. The model they presented predicted growing resource scarcity, increasing pollution, and eventual population decline, all prior to 2100.

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Further Evidence of the Influence of Energy on the U.S. Economy - Part 2

Thu, 23 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 23 (Opinion) - I will show an even greater connection between energy prices, interest rates, and the financial sector, based in large part on a review of minutes of the Federal Reserve Open Market Committee (FOMC) from the end of 2002 to 2007. It appears the Fed’s inflation expectations were very closely linked to petroleum prices. Because of this, the rise in oil prices led the Fed to raise interest rates in an attempt to control inflation, which in turn had unintended consequences.

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Forecasting Coal Production Until 2100

Tue, 07 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 07 (Opinion) - A model capable of projecting mineral resources production has been developed. The model includes supply and demand interactions, and has been applied to all coal producing countries. A model of worldwide coal production has been developed for 3 scenarios. The ultimately recoverable resources (URR) estimates used in the scenarios ranged from 700 Gt to 1243 Gt. The model indicates that worldwide coal production will peak between 2010 and 2048 on a mass basis and between 2011 and 2047 on an energy basis. The Best Guess scenario, assumed a URR of 1144 Gt and peaks in 2034 on a mass basis, and in 2026 on an energy basis.

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A North American Energy Plan for 2030: Hydro-electricity - The forgotten renewable energy resource

Mon, 06 Apr 2009 00:00:00 -0700

The Oil Drum - Apr. 06 (Opinion) - Presently 38% of North American electricity is produced from carbon free sources (nuclear 19%, hydro 18% and wind energy 1.7%). N America has substantial oil, natural gas and coal reserves, exceptional potential solar and wind resources, a large hydro electric capacity, and unique natural hydro storage lakes that can be used for short and long term energy storage.

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Where we are headed: Peak oil and the financial crisis

Wed, 25 Mar 2009 00:00:00 -0700

The Oil Drum - By Gail Tverberg - Mar. 25 (Opinion) - The current financial crisis is a direct result of peak oil. There may be oscillations in the economic situation, but generally, we can't expect things to get much better. In fact, there is a very distinct possibility that things may get very much worse in the next few years.

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Senate Testimony on the Energy Water Nexus

Tue, 24 Mar 2009 00:00:00 -0700

The Oil Drum - By Michael E. Webber, Nate Hagens - Mar. 24 (Speech) - My testimony today will make four main points: 1. Energy and water are interrelated, 2. The energy-water relationship is already under strain, 3. Trends imply these strains will be exacerbated, and 4. There are different policy actions that can help.

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World Oil Production Peaked in 2008

Tue, 17 Mar 2009 00:00:00 -0700

The Oil Drum - By Tony Eriksen - Mar. 17 (Special Report) - World oil production peaked in 2008 at 81.73 million barrels/day (mbd) shown in the chart below. This oil definition includes crude oil, lease condensate, oil sands and natural gas plant liquids. If natural gas plant liquids are excluded, then the production peak remains in 2008 but at 73.79 mbd. However, if oil sands are also excluded then crude oil and lease condensate production peaked in 2005 at 72.75 mbd.

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Europe | Fire or Ice? The role of peak fossil fuels in climate change scenarios

Mon, 09 Mar 2009 00:00:00 -0700

The Oil Drum - Mar. 09 (Opinion) - Will the world end in fire or in ice? That is, are we going to be hit by global warming or are we going to freeze because of lack of fossil fuels? We don't know yet, but here is a brief summary of the recent papers that have appeared on the subject.

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Mechanics of Future Oil Price Volatility (A Flubber Cobweb)

Thu, 05 Feb 2009 00:00:00 -0800

The Oil Drum - Feb. 05 (Opinion) - The fundamental problem facing oil markets at present it this: while present supplies are sufficient to meet present weak demand, these sources of production face rapid decline. The current low oil prices are not sufficient to support the long term investment in future supplies, conservation, and consumption efficiency that will be necessary to mitigate the impact of this decline. Because of the time-lag between a sufficient price signal and oil reaching the market (or demand being reduced), and because of the impact of the recent price collapse on producer psychology, volatility will rapidly incrase as the market's price signal must make incrasingly exaggerated moves to bring supply and demand into equillibrium.

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Obama's Energy Policy Announcement

Tue, 27 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 27 (Opinion) - Yesterday, President Obama delivered remarks on his plan to "reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs". In this post, I provide Obama's remarks on his plans to reduce our dependence on foreign oil (not really "energy independence", as some have called it), plus some graphs of current imports to put these remarks in context.

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Advice to Pres. Obama (#5): One Engineer's Advice for Energy Policy

Mon, 26 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 26 (Opinion) - For much too long, US energy legislation (I hesitate to call it policy, because it lacks the coherence to justify the label) has been aimed at short-term patches on problems which have only gotten worse. CAFE regulations have barely held fuel economy steady, while low fuel prices caused consumption to skyrocket. "Free trade" allowed cheap oil imports to kill movement toward efficiency and substitutes. The auto industry lobbied against fuel taxes to promote its short-term interest in selling profitable trucks, with the long-term result that all 3 US automakers will go bankrupt in the next year if nothing is done. We've had change before, but the results put us where we are now. It's time for the right change.

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Energy Taxes and the Electric Grid

Fri, 16 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 16 (News Analysis) - The tax code is not at all generous with respect to investments in the electric grid. The effective tax rate on these investments is very close to the unadjusted statutory tax rate of about 39%. If investment is to be encouraged in the electric grid, Dr. Metcalf believes that this tax rate must be lowered.

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Advice To Pres. Obama: Yes We Can, But Will We?

Thu, 15 Jan 2009 00:00:00 -0800

The Oil Drum - Jan. 15 (Opinion) - We are at a major crossroads in the history of our nation and our world. There are dozens if not hundreds of salient aspects of our supply and demand situation, each with its own cheerleaders, opponents and unaware. Myopic focus on any particular issue runs the risk of creating more long term harm than good.

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Floating Offshore Wind Power

Tue, 09 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 09 (Opinion) - Ideally, offshore wind farms will be far enough away from land to avoid being seen from the shoreline, eliminating any residual objections from local residents. Current offshore projects tend to site turbines in waters less than 20 metres deep - going further offshore would mean locating them at depths of 50 meters or more, which is too deep to build supporting towers or trusses down to the sea floor at an affordable cost.

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Why are gasoline (and oil) prices so low -- and where are they headed?

Mon, 08 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 08 (Opinion) - Why are gasoline prices so low? And why do they continue to drop? The recent drop in oil prices has truly been extra-ordinary. Gasoline prices are down almost as spectacularly, and the price of diesel is down is well. If we look at the graph, it doesn't look at all like anything we have seen before. What is happening, and where is this headed?

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IEA WEO 2008 - NGLs to the Rescue?

Fri, 05 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 05 (Opinion) - In the oil and gas industry, there is a broadly used parameter that expresses the “dryness/leanness” or “richness/wetness” of natural gas. In this post, I document that this parameter is expected to change to dryness/leanness over time, based on an extensive analysis of actual data on fields, areas and regions. I also show that the IEA WEO 2008 forecast to 2030 implies the opposite result--namely that the shift will be toward richness/wetness.

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The IEA WEO 2008: Long term prospects for coal production

Thu, 04 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 04 (Opinion) - My conclusions are that if we look at a global level, taking coal reserve data at face value, the global IEA reference scenario for coal production to 2030 is possible. However, when focusing on China, the country that now produces 41% of all coal, the scenario is unlikely to occur because China possesses insufficient coal reserves to sustain production to 2030 at the level expected by the IEA. Only in a highly optimistic case, if China's coal reserves are more than double those currently known, will China be able to sustain coal production as expected in the IEA reference scenario.

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The 2008 IEA WEO - Renewable Energy

Wed, 03 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 03 (Opinion) - The renewable energy portion was a tale of two technologies: Renewable electricity and renewable biofuels. Renewable electricity is forecast to grow rapidly, and make up an increasing portion of electricity supplies. Renewable biofuelsare forecast to still make a very small contribution by 2030.

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IEA WEO 2008 - Fossil Fuels and CO2 Emissions

Tue, 02 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 02 (Opinion) - The IEA presents a cheerful view of Man's energy future based on doubtful reserves and production estimates that are significantly higher than the figures both the energy industry and independent researchers have assessed.

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Impact of Credit Crisis on the Energy Industry - Where Are We Now?

Mon, 01 Dec 2008 00:00:00 -0800

The Oil Drum - Dec. 01 (Opinion) - There are really two closely related problems. One is reduced access to credit, making new borrowing difficult for nearly every business that requires debt. Prices for all commodities have been dropping as well. At least part of the reason for this price decline is the lack of availability of credit—many of the less credit-worth buyers drop out of the market. This leaves fewer buyers and almost the same number of sellers, so the price drops.

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IEA WEO 2008 - Objectivity of the International Energy Agency

Wed, 19 Nov 2008 00:00:00 -0800

The Oil Drum - Nov. 19 (Opinion) - Given the current structure and objectives of the IEA, it seems like it would be very difficult for the IEA to be 100% objective, especially in making forecasts where there is a high degree of uncertainty.

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