Reflections on the Saudi Wars

Meet the Doomers

It was early 2007, and I was riding high at The Oil Drum. I had written a number of articles on energy policy, and a consistent theme of mine was that biofuels weren’t going to replace our current level of fossil fuel usage.  For the most part these essays were very well-received, until I turned my attention toward the topic of oil production in Saudi Arabia.

Realize that while there is a diverse readership at TOD, there are quite a few very vocal contributors who are ‘doomers.’ What exactly is a doomer? Doomers believe that peak oil will inevitably lead to a Malthusian collapse of society. Many cheer for stories that support their idea of doom (e.g., “biofuels will not save us”), but they can be downright vicious if what you are writing implies that things may not be exactly as bad as they think. The latter was the case with my Saudi essays.

Matt Simmons and Saudi

I have been highly interested in what is going on with Saudi oil production for a long time. Saudi has a tremendous amount of economic leverage because of their oil production, and if their production declined sharply, then a lot of doomer points would start to look more plausible. Thus, I am keenly interested in understanding the true situation in Saudi. This was one of my primary motivations for reading Twilight in the Desert.

Twilight was published in 2005, and argued for a near-term collapse in Saudi oil production, with an inevitable price shock to follow. Following publication of the book, Matt Simmons made a $10,000 bet with New York Times columnist John Tierney that oil prices in 2010 would average over $200/bbl (see the Simmons-Tierney bet). This bet is useful for understanding the time frame Simmons had in mind for a Saudi collapse; certainly by now we would be in the midst of a full-fledged Saudi production collapse.

Given his message, it should come as no surprise that Simmons has gained quite a following among the doomers. He is held in very high regard by many at TOD, and a number of people have used his work as a jumping off point for their own claims of a Saudi collapse. And in late 2005 when Saudi production began to fall, it seemed to many that Simmons’ analysis had been spot on and very timely. The bandwagon began to fill up; the decline had begun and Simmons’ star was on the rise.

The Saudis maintained that the declines were voluntary because the world oil markets were oversupplied. But they would say that, wouldn’t they? Or would they? I went back and forth on that point; I could see pros and cons either way. But the doomer contingent had decided: The Saudis were bald-faced liars. I lost count of how many times I saw the Saudi Oil Minister accused of lying when he maintained that the declines were voluntary, because the doomers “knew” good and well they weren’t.

I Had My Doubts

I was especially curious to get to the bottom of whether Saudi was on the brink of a production collapse. Saudi production fell from the end of 2005 through the end of 2006 by one million bpd even as oil prices were rising. But I started really trying to get my head around this issue, and the more I looked, the more I was convinced that the Saudis were not lying. The declines did appear to be voluntary.

I laid out much of my reasoning in When Will Saudi Arabian Oil Production Peak? My position had three major points. First, worldwide crude inventories were at record highs and rising when the Saudi cuts began. We had this information directly from the OECD, but I also found news accounts of this coming from important non-OECD consumers like China and India.

Second, I took a long hard look at one of the major tools being used to project that Saudi had peaked. The tool was called Hubbert Linearization (HL), and I tested it first by plugging in historical data to see if it would have predicted previous peaks. In the case that was being used as a proxy for Saudi – Texas – it would have predicted peak production 16 years too early (as shown in the previous link). It would have also had a large degree of uncertainty until about 5 years after the peak. So for 21 straight years, one could have made the argument that Texas had peaked in that particular year on the basis of the HL.

Worse, I found that it would always predict a peak even if I fed the model an infinite series of constant, or even mildly rising production rates. And as more data was fed to the model, it predicted higher and higher recoverable reserves. In the case of Texas, what was predicted to be recovered in 1960 was far lower than what has been produced to date.

HL was the mathematical version of a dowsing rod. There was so much wiggle room that you could predict peak based on very liberal criteria. For many doomers, 2005 was that year, and I received a great deal of verbal abuse and hate mail for pointing out that the technique didn’t really work. I documented some of that in Peak Oil and the Lunatic Fringe, and that led to me taking an extended leave from TOD. (I had to block two regular TOD contributors because they bombarded me with e-mails over this).

There was one final point that convinced me that Saudi production declines were probably voluntary. First, it is true that Saudi reserves are not an open book to outsiders. They have withheld detailed data on their reserves since 1982. They raised their reserve estimates by 90 billion barrels in 1990, once again leading to chants of “Liar, Liar” about their reserve numbers. Presently their reserves are estimated to be 267 billion barrels. Doomers will tell you that this is laughable. The HL technique was pointing at a remaining reserve number of only 70 billion barrels.

However, I did a little sanity check on this number (a more detailed analysis than what follows is here). It is true that Saudi stopped publishing detailed data in 1982, but prior to that their reserves were an open book. In 1982, their reserves were estimated to be 164.6 billion barrels. Even if I assumed no new discoveries and just subtracted subsequent production, I came up with 95 billion remaining barrels – already well above the HL prediction.

But of course they would have had new discoveries as well and technology has increased the amount of oil that can be recovered. Look at what happened in the U.S over that same period of time. In 1982, U.S. reserves were estimated at 27.9 billion barrels. Over the next 24 years U.S. production was 56.9 billion barrels. Yet in 2005, U.S. reserves were still 21.8 billion barrels. So over that 24 year-period the U.S. produced 57 billion barrels of oil and pulled reserves down by only 6 billion barrels. To me this was another piece of evidence that the HL technique had to be wrong about Saudi.

I also tried to put myself in the shoes of the Saudi Oil Minister. How would I manage their oil? Pretty much just as he was doing it. I wouldn’t manage oil just so American consumers could have cheap gas. I would try to maintain prices at the highest possible level that could be tolerated by the economy. That oil endowment would have to serve future generations, so I would want to maximize the value. That’s a fine line, and if you are too aggressive you can cause economic havoc. But if I saw that global inventories were rising, I would begin to cut production as well to avert a future price collapse.

So my conclusion – which I stated numerous times starting in 2006 was: The Saudi production decline was voluntary, and if global crude inventories starting dropping they would raise production.

The Critics Emerge

If you want to get a real flavor for the kind of trollish commentary I had to deal with over this issue, see the comments following Stuart Staniford’s TOD essay A Nosedive Toward the Desert (…Or, Why the Decline in Saudi Oil Production is Not Voluntary). (By the way, none of this is meant to pick on Stuart. Reasonable people can disagree about the data, and that’s how I would characterize my debate with Stuart. I think his analysis was data-based, unlike many of the others. He was not using the HL as the basis for his analysis, and he did come around to the view that the HL wasn’t useful for predicting a peak).

Stuart called me out in that essay, suggesting that my arguments for why the Saudi decline was voluntary were “completely implausible.” His argument was the polar opposite of mine. He wrote “Declines are rather unlikely to be arrested, and may well accelerate.”

But people really went after me in the comments section. I was dealing with one attack after another not only on TOD, but they even spilled over to other sites. There was this great thread as well at the Peak Oil message board. One commenter who belonged to the “I love HL” and “Saudi has peaked” fan clubs had this to say (among other snarky comments):

Robert Rapier was among the more optimistic (David Cohen being another) regulars at the Oildrum. Those two are in decendence as the very convincing argument for SA decline by Westexas, Stuart, Euran (and tons of others) continue to gain validity.

And then this one, by the same poster (responding to a comment from someone else):

“Robert is way too optimistic regarding SA. I always side with west texas on those debates.”

and so do I, and it appears the majority at the Oildrum agrees that Mr. Rapier is no longer a major player. The ball is definitely in Stuart’s court. I understand Stuart has submitted his analysis to Science magazine for publication.

I was no longer a “major player” because I took the view that Saudi was not on the verge of terminal decline, which a lot of doomers didn’t like. A major player can’t give them an opinion contrary to what they “know.” If they do, they are by definition not a major player. Well, I would just have to settle for the consolation prize of being correct.

Saudi Production Turns Around

Look at what has happened since Stuart’s post. When Stuart wrote Nosedive in March 2007, production (C+C) in Saudi was 8.6 million bpd (Data from the EIA). I predicted that the declines would stop by summer, and little did we know that when Stuart published that essay, declines had just stopped and would be stable until late summer before beginning to rise.

The Saudis had production back above 9 million bpd by December 2007, and by July 2008 they had production at 9.7 million bpd – the highest level in almost 30 years (and without the aid of some of the major new projects that were expected to bump production a little). Their production then pulled back after prices collapsed. Just the fact that production flat-lined for 7 months with no new major projects coming on says without a doubt they were sitting on spare production when I was arguing that they were. If they hadn’t been, they would have declined a bit each month and could have only reversed that by bringing new projects online.

One argument that many people made for a permanent decline was that if Saudi had spare production they would have brought it online in 2006-2007 as prices climbed. As I replied at the time “Not if inventories are full.” (Of course Saudi production rose with the price of oil in 2008, and hit 9.7 million bpd in the same month that oil prices hit $147). This argument (and I am not naming names, but many of you will know who I am talking about) goes like this: “If Saudi had just kept producing at their 2005 levels, they would have produced X billion more barrels and made XX billion more dollars. Thus, it is implausible that their declines are voluntary.”

Later, a friend sent me a paper explaining that Saudi often cuts production in the face of rising prices. That’s because they are looking at data besides prices. See Saudi Production Management.


So what’s the point of this post? Am I just gloating? Not really, but after some of the treatment I received as a result of my arguments, I think readers could forgive me for doing so. I have to admit that it wasn’t all bad; I always had supporters as well. It is just that the kind words of a supporter have less impact than a bitter diatribe and volley of e-mails from someone whose world view you are threatening.

Anyway, three things motivated me to write this post. First, a reader commented after the previous post that they had appreciated the critiques of the HL. That planted the idea for maybe taking a look back at how Saudi production played out following the predictions of imminent doom and my counter-predictions of a production rise.

Second, I have observed that the amnesia and selective memory have really gotten bad on this point. People who made dire predictions seem to have completely forgotten about them, or they rationalize them away by saying that the declines are right around the corner. Or, they say that they knew all along that the decline would really be the plateau we have seen instead of a steep drop – and that the financial crisis would be the real story.

The level of rationalizing has been impressive; I have seen none of the vocal predictors own up to being wrong about this issue. Some people have simply stopped talking or writing about it, but others are still out there making the same sorts of predictions (some even insisting that their predictions of steep declines were correct; that the Saudis are lying about their production).

Finally, today I saw a post over at The Oil Drum by Leanan, the Drumbeat editor who really captured the mass amnesia in a nutshell:

Back then, it was a topic of much debate here. Was Saudi heading for “a nosedive into the desert”? Or would they “turn on the taps” later in the year, proving they were not yet at peak oil?

In reality…neither happened. Production did not crash, nor did it sharply increase.

I did respond by saying I disagreed; that in fact Saudi had increased production by 1.1 million bpd in the 15 months following Stuart’s essay. If over that same time period production had fallen by that amount (which was the magnitude of many predictions), I think we would have agreed that this would have been a crash. So it is hard to argue that a 1.1 million bpd swing in the opposite direction was anything but a sharp increase. But I also thought to myself “I should go ahead and write up my historical perspective on this, which I have never done.”


Something that was repeatedly misrepresented was that this was a debate over the actual peak date of Saudi oil production. It was not. It was a debate over a faulty methodology used to come up with a date that was being heavily promoted.

One thing is clear now in hindsight: Saudi did not go into terminal decline in 2005. Proponents of that theory have now shifted their position to “I will give up the idea that 2005 was the peak when the January-December average production exceeds that of 2005.” That’s wrong on two counts. First, production in 2008 rose hand in hand with oil prices, and by July when prices hit record levels the production rate was at the highest level in almost 30 years. If 2005 was the peak, no way would that have been possible.

Second, they seem to forget their argument. Assume for a moment that Saudi produces at only 90% of the 2005 rate, but do it for the next 40 years. Will the 2005 peakists maintain that 2005 was the geological peak? As I pointed out recently to someone who made that argument (“I am correct that 2005 was the peak until production for a calendar year exceeds 2005 production”) – Saudi production in 1980 and 1981 were both higher than for 2005. By their logic, I must conclude that 1980 was the Saudi peak.

I think ridicule and loss of credibility is inevitable if you are out making predictions based on shoddy analysis – which I felt was the basis for many of the imminent Saudi decline predictions. I believe when you are wrong about something, you try to learn from it so that future projections are better. If you simply rationalize away wrong predictions, you will likely continue to make them. But I have also learned that people using shoddy analyses to make predictions are also unlikely to own up to failed predictions. There appears to be a strong correlation between them embracing shoddy analyses that gives them the “right” answers – and rationalizing when the “right” answers turn out to be wrong.

Finally, while I feel like we won’t see the sharp declines in Saudi production right away, I still don’t like being dependent upon Saudi (or Venezuela) for U.S. crude supplies. I would rather see us proceeding with a plan that discounts their future production. Even if production doesn’t decline sharply, I think Chinese demand will keep pressure on prices, and therefore it would be a good idea if we seriously try to wean ourselves away from oil.

75 thoughts on “Reflections on the Saudi Wars”

  1. Robert — Although I understand the concept of a "Hubbert Peak" I admit to not knowing much about the HL approach. If it is wrong for Saudi Arabia, is at also wrong for the world as a whole, and is it the basis for many or most Peak Oil claims? If so, is there cause to doubt those claims, or is there other substantial evidence for Peak Oil? (I've been reading about Peak Oil since about 2000 … the crisis seems to be still just around the corner, but rounding the corner is taking a hell of a long time).

  2. “and the more I looked”

    In 50 years, not one doomer prediction has come true. Like RR, the more I looked the less concerned I was. One reason that predictions not coming true is that the doomer identified a real problem and the problem got fixed. A second is that the prediction was just wrong.

    In the late 60's a young lawyer came to campus to promote his book UNSAFE AT ANY SPEED. I listened for a few minutes and then got up and left concluding Ralph Nader was a loon. Did promoting safety raise consumer awareness to demand safer cars or did safer cars emerge as a result of engineering advances?

    The other thing about doomers is that some make a career of it. They are experts on many things. Ralph Nader is also a anti-nuke.

    “He advocates the complete elimination of nuclear energy in favor of solar, tidal, wind and geothermal, citing environmental, worker safety, migrant labor, national security, disaster preparedness, foreign policy, government accountability and democratic governance issues to bolster his position.”

    I do know that Ralph Nader did not do anything to make commercial nuclear power safer.

    So why are doomer predictions so popular? Energy is freedom, freedom from being a beast of burden freedom from dying of exposure, freedom from water borne epidemics. Notice that Ralph Nader offers alternatives to nukes. We are afraid of loosing freedom.

    The reason I am not worried about peak oil is because I see all the other way to provided energy for transportation.

    One of the things I have learned over the years is to listen to the loons. Just because Ralph Nader is nuttier than a fruit basket, does not mean he could not be right on occasion. If Ralph Nader thinks radiation or mercury is a problem, I will check to make sure it is not.

    The difference between protecting the public and being a loon is checking the data.

  3. RR – congratulations on the quality of your predictions.

    The need for "Doom" seems to be inherent in the human race. Whether it is Shiva destroying the world or Alleged Anthropogenic Global Warming, a lot of us seem to need the belief that it will all end badly.

    Back to oil supply — another recommendation for your reading list: "Scarcity & Growth Considering Oil & Energy", by Prof. Douglas Reynolds of University of Alaska Fairbanks.

    Prof. Reynolds provides some very interesting economic analyses demonstrating that politics trumps geology on production rate, particularly as the role of state oil companies increases.

    For what its worth, in addition Prof. Reynolds has very low expectations for "alternate" energy sources, due to what he calls the "entropy subsidy" from fossil fuels. (Can we build a windmill using only wind energy?) He's a regular (albeit articulate & reasoned) doomer.

  4. I would being to cut production as well to avert a future price collapse.

    Typo ?

    Historical perspectives for the record are great to have.


  5. A great many of the articles at the Oil Drum are just plain terrible.

    I'm now highly selective of what I will and won't read at the oil drum based on what kind of post it is (technical or cultural) and who the author is.

    Many of the technical posts are still worth a read and can educate, and many of the "present the data" type articles are also ok.

    But many of the "this is why we're screwed" articles are fairly thin on logic and could be pulled apart by a decent high school student.


  6. Oh, and to add, I now follow some of the original TOD posters (ok, two Heading Out & RR) at their own blogs.

    Used to read Engineer Poet too, but as far as I know he chucked his blog and only (rarely) posts at TOD.

    Reading at the authors own site is better and I find the commenters more civil too.

  7. I don't know when oil will "peak."

    But, I do know this: There are over a Billion Chinese, and they are starting to make a little money. And, only a few of them (percentagewise) have cars.

    I suspect Most of them Want cars. And, I also have a hunch that quite a few of them are going to "get" cars.

    India is a similar case (about 1.2 Billion people,) although, presently, on a somewhat less dramatic scale.

    I think it would behoove us to be cognizant of the "worse case" scenario. Maybe, do a little planning, and preparation – just in case.

  8. Typo ?

    Thanks for catching that. I finally posted that at about 1 a.m. here, and every time I read back through I kept changing it. I finally decided to put it up, but without one final proofread. Even then I was thinking "Bet I still have a typo." But I was so tired I probably read right over that.

    You may not know (or maybe you do) that typos drive me crazy.


  9. If so, is there cause to doubt those claims, or is there other substantial evidence for Peak Oil?

    Pete, the HL was used (and is still being pushed) by some very vocal people as an accurate way to project both peak and the amount of oil left in the ground. What I did was show that it was neither.

    However, peak oil itself does not hinge on the HL. In fact, it isn't clear what Hubbert himself used to predict the U.S. peak. But one thing is clear. U.S. production did peak in the early 70's, and 40 years later we have not managed to reverse that slide. Fortunately for our economy the rate of decline has been low, unlike some of the very high decline rates predicted for Saudi and the world as a whole (and the HL is again the basis of some of those decline rates).

    So I am a believer that the world will peak, and while we may not be at geological peak yet, we may be in the midst of Peak Lite. It is possible that we may never exceed the levels of a couple of years ago; I think the longer the economy takes to recover the more depletion marches on and the less likely we are to exceed the 2005-2008 levels.


  10. I think it would behoove us to be cognizant of the "worse case" scenario. Maybe, do a little planning, and preparation – just in case.

    I am fully on board with that. As I tell people, I don't think my house will burn down, but I have homeowner's insurance just in case. At a minimum, peak oil mitigation will serve to insulate us from the actions of China and how they impact the world oil markets.


  11. Kip,

    Did promoting safety raise consumer awareness to demand safer cars or did safer cars emerge as a result of engineering advances?

    I would say the Former with engineering advances driven by consumer demand and regulatory requirement.

  12. The big unknown with KSA is Ghawar. That one field is enough to make KSA the world's third largest oil producer. No other oil field ever came close to producing the millions of barrels per day Ghawar has given up over the last 60 years. Replacing 5M bpd is a gargantuan task. I've got trouble believing any country has the capability.

  13. Robert, I've been curious regarding your opinion of the book, Gusher of Lies, by Robert Bryce (public Affairs, Perseus Book Group, 2008). In spite of the sensational sounding title, I found this book to be relatively objective and well docomented.

    I contrast this with Simmons's very popular book, Twilight in the Desert, which, in my opinion, is obviously biased, repetitive, and not very "scholarly." While these two books address distinct subjects, there is considerable overlap, and they lead to quite different conclusions.

  14. This is yet another great post by RR.
    The doomsters simply do not understand the price mechanism.
    Higher prices encourage more energy supply and less energy consumption. "Shortages" usually lead to gluts.
    And few, in any, outside the Saudi thug state know how much oil they want to produce.

    I can sketch a scenario today that OPEC has at least two daggers pointed at its dark and foul heart, and could find itself itself slipping into backwater status within years: The CNG and PHEV vehicles.
    CNG is cheaper than gasoline already, and PHEVs promise to be cheaper with a few years (especially if the much-ballyhooed oil production collapse happens, though that is unlikely).
    The CNG and PHEV are great, but there is also the arrival of plain-vanilla but much-higher mpg cars.
    Oil demand has been falling in developed nations for decades.
    China and India may simply leapfrog the gasoline or diesel ICE, and go straight to PHEVs and CNGs.
    China is not the USA. Under their political system., they could simply mandate PHEVs. Then what?

    Any numbers of commentators have been banned from TOD. The funding of TOD has never been reveled, nor if TOD editors received money from other sources. Unlike real editors at, say The Wall Street Journal, TOD editors do not fill out financial disclosure statements.

    I remain deeply skeptical of TOD, and its agenda. I assume they are useful idiots to the oil speculators and manipulators. That's being generous. Maybe they are cynical collaborators.

    Remember Hurricane Gonu? It was supposed to wreck Mideast oil production for decades, if you read TOD. Even after the "hurricane" had petered out (hit that desert air), TOD was posting doom for the world.
    Trying to bump NYMEX prices?
    Who knows?

    I understand concerned parties have sent e-mails to the CFTC, and lately the CFTC is more responsive. Time will tell.

  15. Mexico's Cantarell field was the world's second most prolific well 5 years ago. Production dropped over 60% since then. If that happened to Ghawar today,the world is left with no spare capacity. Or even a supply shortfall.

  16. We've got a number of ways to tackle peak oil Benny. More efficient cars,like PHEV's and EV's. CNG for the big rigs. And biofuels,of course. But,we need time. Iraq might just buy us the 5 or 10 years we need to scale up those options. They could triple output to 6M bpd in the next few years. Cross your fingers.

  17. "Oil demand has been falling in developed nations for decades."

    Benny, are you sure about that?

    Per the BP Annual Statistical Review (recognizing that all such compilations have issues), global oil consumption grew over the decade 1998 – 2008 from 73.6 to 84.5 Million Bbl/d — healthy growth.

    US oil consumption over the same decade grew from 18.9 to 19.4 Million Bbl/d. Growth, not fall, in consumption in a developed nation.

    EU consumption over the same decade was flat at 14.8 Million Bbl/d. Flat, not decline, in developed nations.

    Another factor to consider is that, over the decade, US & EU exported a lot of their manufacturing industry — eliminating good-paying jobs for what used to be called the Working Class, at the same time as offsetting growing energy consumption elsewhere in their economies.

    Some of the growth in energy demand in places like China has simply been the relocation of the point of consumption from the West. When 20% of the people in Obama's America are un/under-employed, further export of the industrial base is politically non-sustainable. We should not count on further declines in energy consumption in developed nations.

    On the downside, we know that fossil fuels are finite. We know, as RR has pointed out, that some alternate sources like biofuels will never have the scale to replace fossils. We know that other alternate sources like wind & solar are unsustainable, needing subsidies to survive.

    No need for "doom" on this. We already have known alternates which can meet all future energy demands for millenia. And we have the very deep well of human creativity. All we need to do is get the Political Class out the way, and let innovation flourish.

  18. "I can sketch a scenario today that OPEC has at least two daggers pointed at its dark and foul heart, and could find itself itself slipping into backwater status within years: The CNG and PHEV vehicles."

    Some day, Benny, you might address the reasons for poor acceptance of Compressed Natural Gas vehicles in many locations around the world over many decades. Just wishing something does not make it so. As RR keeps emphasizing, let's start with the data.

    But no need for "doom"! We could double, triple, quadruple the energy efficiency of most existing vehicles simply by getting more passengers into them.

    It can be done — you don't see so many Single-Occupant Vehicles in the Former Soviet Union. Seems odd that former Communists are more aware of the benefits of financial incentives and limited regulation than is our own Western Political Class.

    But we have all been over this before.

  19. Andytk – ditto. I liked Engineer Poet's numerical approach to everything (mostly switchgrass iirc). TOD is still good for technical articles, like the Sunday series on oil drilling techniques. If only everything else wasn't called something like "Mad Max Beyond Thunderdome Demonstrates 101 Things To Do With a Solar Fruit Dryer While You Wait For Armageddon To Arrive".

  20. For those that miss Engineer Poet's commentary, you can catch him from time to time on

  21. The fact is that many people were dying and being needlessly hurt and maimed, the great Ernie Kovacs among them, in accidents that were caused by the Corvair’s design faults! This does not indicate small ‘problems’. And detroit didn’t try to fix things; they didn’t thank Nader… they sent detectives after him to try to discredit him! They weren’t interested in innovation; they were building junk and they knew it. See and read “Unsafe At Any Speed.”
    You should be thanking this great American; your anger is misplaced.

    …if you look at the dvd of “An Unreasonable Man,” it quite clearly states that Mr. Nader became interested in auto safety when a law school friend of his, who had a wife and 4 kids at the age of 28, was in an accident that caused him to become a paraplegic. He was a trailblazer with his 1959 article for the Nation magazine about the designed-in dangers of automobiles. This was a totally novel topic at the time since these machines were basically being sold as part of the American Dream. At that time, he did not single out any particular vehicle, but instead wrote: “…Almost no feature of the interior design of our current cars provides safeguards against injury in the event of collision.” He gave specifics about “…doors that fly open on impact, inadequately secured seats, the sharp-edged rear-view mirror, pointed knobs on instrument panels and doors, flying glass, the overhead structure–all illustrate the lethal potential of poor design.”

    He went on to write about a safer alternative that had been tested:
    “… the car body was strengthened… doors were secured…occupants were secured… interior knobs, projections, sharp edges and hard surfaces have been removed and the ceiling shaped to produce only glancing blows to the head…the driver’s environment was improved to reduce accident risk by increasing visibility, simplifying controls and instruments, and lowering the carbon monoxide of his breathing atmosphere…”

    He also wrote about changes that increased pedestrian safety as well. This was a totally novel topic at the time. In fact, Henry Ford II put a safety package option in their cars in 1955-56. It had seat belts and a padded dash, etc and was extremely popular with the public. But then, General Motors called up Mr. Ford and said that if they didn’t stop it they would undercut Ford and put them out of business; Ford decided to drop the safety package! The reason for this was that car companies did not want the Federal Government to tell them how to build cars because, they feared, then they would tell them about mileage and pollution control… that was an easy sell in Detroit! That meant more to the executives than the lives and safety of the public. This is all documented in An Unreasonable Man.

    the car manufacturers could not keep up with the demand for the safety features; they made the decision not to continue due to pressure from General Motors and fear of further government control, rather than caring about the consumer and the environment. Furthermore, the car makers tried to blame the accident’s on the “nut behind the wheel,” and tried to abdicate any responsibility in the midst of all this! The engineers, who Nader used to interview in secret, admitted that they knew all along that they were building junk!

    … Nader originally gave the story about the problems of U.S. cars to James Ridgeway at the New Republic who wrote an article on car design and public safety which, among other things, stated that this car that was being marketed to the general public was “…inherently dangerous…” When publisher Richard Grossman called him up and wanted a book, it was Ridgeway who said that Nader was the man to write it as he knew more “… than any other 10 people in the world on the subject of auto safety…”

  22. nader part 2

    This was not a popular subject at the time. He took the idea of the “nut behind the wheel” and revealed the truth that cars that were being built were unsafe.

    …if you read “Unsafe at any Speed,” one of the things that stands out is, on page 7, the testimony that dealers of the Corvair were *never* instructed to tell the public that tire pressures were crucial to safety. He goes on to write on page 33, “…The car was built and sold as ‘easy handling’, as a family sedan, ‘as a car that ‘purrs for the girls,…”. Although other cars were unsafe, it is the marketing of the Corvair that seems to make it’s safety issues that much more deadly!

    Nader cannot be called a politician in the sense that we typically use the word. When the book first came out, GM sent detectives to try to discredit him and actually sent hookers after him to try to get him in a compromising position that would discredit him. How many “politicians” could stand up to that? This was proven in a lawsuit that Nader won and what did he do with his money? He did not “… go to Disneyland…”… he used it to start his campaign “…for the people…”.

    Also, if you see “An Unreasonable Man,” you will see, among other things, some of the laws Mr. Nader is responsible for e.g. The Freedom of Information Act, OSHA, The EPA, the clean air act, the clean water act… he is estimated to have saved over 500,000 lives just from the National Highway Traffic and Safety Act that LBJ signed and that Nader was responsible for. In short, this is one of the greatest friends the American people have had for the last half century… but the human race is famous for not knowing who their friends are.

    I feel no sympathy for the car companies and the argument that Nader’s work inhibited innovation or safety is simply not borne out by the facts; it was, in fact, the greed and short-sightedness of the auto executives!

    In regards to the 2000 election, the short answer is this:
    the reality [and you can know this for yourself if you see is that
    gore threw the race in ‘00 at least 3 times:
    1.] when, at the beginning of his campaign, he and lieberman stopped trying to say things that the people wanted to hear because their corporate paymasters yanked their leash [see “crashing the party” by ralph nader]
    2.] gore now ADMITS that he didn’t try hard enough to contest the voting irregularities
    3.] if you see michael moore’s FAHRENHEIT 9/11, you can see with your own eyes Al Gore shouting down the congressional black caucus’ attempt to question the voting irregularities on a ‘point of order’ which is like saying that, if i mug you, you can’t yell for help if we are in a ‘quiet hospital zone’.
    Besides, there were a total of six third party candidates, all of whom got more than the # of votes that gore ‘lost’ by, so why blame nader?
    the dems [or the car companies for that matter] blaming nader for their losses is like a hooker blaming their v.d. on mother theresa…!

    I mean, the democrats wanted the biggest job in the world and blamed their mistakes and losses on the man who gave us the EPA, OSHA, the freedom of information act, and so much more? it’s just baloney…
    and, as far as someone saying :
    “Easy to drive, easy to fix. That was the Corvair. Take that, Ralph Nader!”
    …sad to say, it was also easy to die in…

  23. Whenever possible I like to correct the misconceptions E-P spreads.

    You didn't really correct anything though?

    I figured the two of you would get along grandly as he is very pro-nuke, much like yourself. At least I thought.

  24. Kinu-

    On oil consumption–go back even further in time. You will see Europe, Japan and USA used to use more oil than now.

    On CNG–supposedly, global acceptance is rising, and there will be 15 million CNG cars within a few years, up from 10 now.

    Yes, a sliver of the total. But as infrastructure grows, there may come a "critical mass" point or tipping point. People will get comfortable with CNG, see that it is cheaper, and switch. Some dealers, like the one I have cited in Oklahoma ( will specialize in conversions.

    Drive in your gasoline car, make a trade, and drive off lot with a CNG car. Done deal. (I have no connection to this used car dealer, and so caveat emptor).

    Some countries, such as India, Iran and much of Europe, are much further along the road.

    You are right, we have discussed CNGs before, and you are right, you could stand on the road a long, long time before you see one drive by in the USA.

    The new CNG pump in West Los Angeles, near Beverly Hills? I have never seen it used.

    Still, prices matter. If gasoline goes to $5 a gallon in USA, watch for huge changes in consumer behavior.

    I am glad you are not in the doomer camp. We need you in the positive side of the force.

    For myself, I think we are nearly upon a boom-time golden age. A more-prosperous and cleaner future.

  25. Glad I could serve as a source of inspiration. Those early articles getting into the nitty gritty of depletion at TOD are great reading all around. The bona fide data like the megaprojects wiki is the sort of work I applaud the most there; I'm really puzzled why the prepping contingent doesn't do more in the way of building up useful resources like that, if they think the Internet is going away soon. It leads you to the conclusion that these days the place is primarily a sort of gloomy kaffee klatsch, or 21st century form of group therapy, or cult, or ____. Quite a change from its early days.

    That thread is pretty par for the course. There are some useful members there though. A guy whose posts changed my tune about KSA is rockdoc123, who claims to be a veteran petroleum geologist, and certainly comes across as the real thing. Just like Henry Groppe, he thinks KSA has decades of life left; and also thinks we face near-term peak – ca. 2012, he said that pre-recession though. Claims to have access to the IHS data at work. Groppe was calling for 2008 world peak in the 2007 Strahan interview. I wish he'd elaborate on his perspective with something accessible to the public, a .pdf, .ppt or the like. His claims are fascinating stuff, but I've never seen any of his company's data on the table, these claims of massively exaggerated exports etc.

    Speaking of data, here's a spreadsheet you all are free to download. Finished it up just this very minute, it's discovery data from AAPG's EXPLORER bulletin, every January they have a roundup of last years' finds. Except in 2003 and 2005 for some reason, those years they just published a smattering. Other years have pretty big tables, just the highlights but that amounts to quite a bit – 2004 has 355 entries. I've written the editors asking if they can provide data for the missing years. This was a big chore to compile! Sometimes the format was screwy and I'd have to do a lot of laborious editing. It's in Open Office .ods format, too; if anyone is really interested I can upload it in .xls etc.

  26. Hmm.. So in
    when Kit P wrote: That is an incredibly misleading statement
    about something that RR wrote that RR then said: There was nothing misleading about the statement.
    Kit P almost got permanently banned for "accusing someone of making misleading statements…
    Now, if you want to disagree with that, you need to show how it is wrong.

    Now once again Kit P is accusing someone of making misleading statements while not showing how the statement was wrong, and this time the accused isn't here to defend himself. Instead Kit P gives us a link to a post where Kit P heaps gratuitous insults ("This is something that E-P does not understand") on Engineer Poet that Kit P wouldn't be allowed to post directly here on R-Squared Energy Blog.

  27. this time the accused isn't here to defend himself.

    He's coming. 🙂

    To be clear, Kit's flirtation with banishment goes much deeper than accusing me of making a misleading statement when I correctly quoted a natural gas contract price. In fact, I only threatened to ban when he continued to maintain that there was nothing at all wrong with his accusation. And we all know that much history preceded that.


  28. Robert, I've been curious regarding your opinion of the book, Gusher of Lies, by Robert Bryce (public Affairs, Perseus Book Group, 2008). In spite of the sensational sounding title, I found this book to be relatively objective and well docomented.

    Loved it. Of course the fact that I was in it made it even more interesting for me. 🙂

    I think Bryce is a really good author, and I look forward to his newest book.


  29. “while not showing how the statement was wrong”

    Clee, did you read the UC Davis study? E-P has misconceptions about where the electricity come from to charge BEV. From his comments, it would appear that they have not changed. In any case, the important information is in the study. Read it for yourself, decide for your self.

    Let point out to both Clee and RR. Just because you declare I am wrong doe not mean that I am wrong. Sometimes I have other things to do and some times I decide there is no point in debating something if has turned into an argument.

    RR thinks that I am not civil. I think that RR is not civil. If there is mutual disrespect on a topic, move on.

  30. "while not showing how the statement was wrong"

    Clee, did you read the UC Davis study? E-P has misconceptions about where the electricity come from to charge BEV.

    No, I did not read the UC Davis study, but I did read E-P's comments and he did not say anything about where the electricity comes from to charge BEVs. Please quote to me where he did so.

    He did say that “The new wind farm in Aruba is up and running, and is showing a capacity factor of about 60%.”, which you did not show to be false.

    E-P appears to have written that in reply to a comment that "Recent wind farms production efficiency is 18% for poor sites and 41+% for better mountain top sites." and the confusion between the terms "efficiency" and "capacity factor" and not as a suggestion that the Aruba wind farm would be providing electricity to California BEVs.

  31. A guy whose posts changed my tune about KSA is rockdoc123, who claims to be a veteran petroleum geologist, and certainly comes across as the real thing. Just like Henry Groppe, he thinks KSA has decades of life left;

    There is another poster on this blog, kingofkaty?, that has made sort of a similar claim. Basically, a large chunk of SA has not been explored and there is much oil left to be had. That was a few years ago, though. Hopefully they will see this post and can offer any updates.

    I will say from all the stuff I have read about SA, the only thing that was extremely clear to me is that they are very aware of the decline rate in their existing fields and bring new fields online to offset the decline, NOT to flood the market or even raise production numbers by much. They seem to be afraid of an oversupply, more so than any shortages.

    I have to laugh at the worship of Matt Simmons by the doom crowd. They seem to be oblivious or completely ignore the fact that he has said on a few occasions, that I have seen, 'we will somehow muddle through peak oil'. Nope, can't have that, it has to be Mad Max OR BAU. There is nothing in between.


  32. If the wiki "Megaprojects" data is, more or less, correct, and If I'm correct in that, by way of drawing down offshore inventories, and onshore "Product" inventories, we are, "Presently" Consuming approx. 2 Million more bpd than we are Currently producing, then we Could hit a Crunch as early as mid-summer.

    Of course, our "Rebound" could stall, and SA "could" pop another 2 Million bpd onto the world market, and I could be just another hysterical, arm-waver babbling cluelessly in the corner (actually, I could be that no matter what happens this summer.) 🙂

    Interestin' times.

  33. Benny Cole wrote: Oil demand has been falling in developed nations for decades.

    Kinuachdrach replied: US oil consumption over the same decade grew from 18.9 to 19.4 Million Bbl/d. Growth, not fall, in consumption in a developed nation.

    Benny Cole adds: Kinu- On oil consumption–go back even further in time. You will see Europe, Japan and USA used to use more oil than now.

    Okay, according to the EIA, looking at 1950 to 2000, the US petroleum consumption had a local peak in 1978 at 18.8 million barrels per day
    The actual peak was just a few years ago in 2005 at 20.8 million bbls/day. So oil consumption in the developed nation of the US has only been falling from its all time peak for 4 years now.

  34. "On oil consumption–go back even further in time. You will see Europe, Japan and USA used to use more oil than now."

    Perhaps you mean on a per capita basis? Yes, that's true for the rich nations. But not across the board on an absolute basis. According to the 2009 BP Statistical Review, North American demand peaked in 2007 (although 2004-2007 was like a plateau); demand in western Europe peaked in 2006; and ANZ + Japan/So Korea/Taiwan/Singapore demand peaked in 2005 (Japan peaked in 1997 though).

    Actually, I think we might be making too much of this 2005 peak demand in the US. From a long term perspective, I'd be suspicious of what 2008/2009 data is really telling us, due to anomalous demand conditions in the wake of global financial disaster.

    Looking at it in that way, yes, peak US petroleum demand was in 2005, but that peak demand was only 0.6% more than in 2007. The 2005 peak is really almost noise in a four year demand plateau. Gasoline and distillate demand had been climbing steadily through 2007. Where would it be now without the recession?

    Declining unit demand in terms of improved efficiencies could be overtaken by sheer numbers – the US is one of the few large OECD countries whose population is expected to grow significantly.

  35. Okay, according to the EIA, looking at 1950 to 2000, the US petroleum consumption had a local peak in 1978 at 18.8 million barrels per day.

    Don't forget US consumption dipped down to as low as 15mbd by 1983. Surely losing almost three mbd in just three years caused mad max? I don't remember mad max, but I was pretty young at the time, so I could be wrong.

    What is amazing to me is production has been pretty much stagnate for the past thirty years in the US, yet the economy has grown and even more amazing the population has increased by over one hundred million people in that time. So much for the argument oil consumption must increase along with the population. Yes, I know we have offshored much manufacturing, but enough to offset a one third growth in population? Call me skeptical.


  36. “No, I did not read the UC Davis study ..”

    So go read the study so you can be better informed about your state Clee. You are better informed than most who post here and live in California. My assumption here is that you want to be better informed.

  37. rocdoc's conclusion are mostly predicated on faith in Aramco's reservoir management, actually; he thinks tech like MRCs and intelligent completions will allow them to hit staggeringly high RF in their major fields. In this he's more of an optimist than Peter Wells, who believes Ghawar is in decline but "new" fields from their heritage exploration will fill the gap.

    The spreadsheet I uploaded covers KSA, of course. Pretty spartan, really, and what is quite surprising are the marginal producers that have huge numbers of discoveries most years – who knew there were such opportunities for wildcatting in Poland? The latest interview with Simmons I listened to had him pretty buoyant about the prospects for ammonia production. Peak oil is still well worth discussion, as who knows what the fallout from it will be.

    Much oil consumption was phased out in the 80s with fuel switching away from burning resid to NG (North America) or hydro/nuclear (Europe). That and increased vehicle mileage standards is what brought on the drop in consumption 1980-1994. You can plot all this out for yourself with the BP Stat Review data.

  38. "What is amazing to me is production has been pretty much stagnate for the past thirty years in the US, yet the economy has grown and even more amazing the population has increased by over one hundred million people in that time. So much for the argument oil consumption must increase along with the population."


    US oil production is down about 40% from 30 years ago. US oil consumption (petroleum product supplied) is up by about 20% over the same time frame. Thus the steady growth of oil imports.

    US per capita petroleum consumption has declined by about 15%, but its population has grown by about 30% since 1980. The net result is an increase in petroleum demand of about 5 million barrels of oil per day.

  39. "You are right, we have discussed CNGs [Compressed Natural Gas vehicles] before, and you are right, you could stand on the road a long, long time before you see one drive by in the USA."

    Not sure about that, Benny. There are lots of vehicles driving around with those diamond-shaped "CNG" stickers. Problem is, most of them are dual-fuel vehicles (CNG & gasoline) and a lot of them are driving on gasoline most of the time. (Dual-fuel conversions are one of the reasons projected future increasing numbers of "CNG" vehicles are misleading).

    My evidence for the following is anecdotal rather than scientific, but it seems that a lot of the rejection of CNG ties back to limited range & frequent lengthy refueling. Very inefficient use of people's time.

    That's what I heard from CNG users. There was an article recently about BMW's electrically-powered mini, which has been leased to a small number of enthusiasts. Even those enthusiasts were frustrated by the limited range, frequent recharging, and long time to recharge.

    The time inefficiencies associated with gas or electricity as a transportation fuel are a huge barrier to widespread acceptance. This leads me to think that it would be better to focus on ways to make liquid hydrocarbon transportation fuels from unconventional sources, e.g. nuclear power -> oil shale -> gasoline.

  40. US oil production is down about 40% from 30 years ago. US ol consumption (petroleum product supplied) is up by about 20% over the same time frame. Thus the steady growth of oil imports.

    Obviously a typo, US oil consumption, not production, is the same now as it was in 1978. That's what I get for posting at 3 in the morning.

    Of course imports have grown. The US peaked long ago..


  41. Kinu –

    My anecdotal evidence is the opposite of yours. The few CNG owners I have spoke with in our state use CNG exclusively. Granted I live in a state that is supposed to be one of the best for CNG availability.

    You can also make liquid fields from CO2 and nuke power, no need for oil shale.


  42. Consumption is roughly at 1978 levels, but 1978 was a local peak and 2009 is significantly down from pre-recession highs, so it seems to me a case of arbitrarily picking start and end points for dramatic effect.

    Consumption had been climbing more or less steadily since 1983 and reached a plateau at about 20.5 mmbls per day from 2004-2007, 10% above the 1978 peak, and 36% above the 1983 trough. I expect that once the economy gets back in gear that we'll be well above the 1978 peak. In other words, I think the long term trend is still rising, even though there are short term effects which give the opposite impression.

    The long term rate of increase in the US does appear to be falling off though, and consumption will perhaps (if it already hasn't) start to level off soon and decline in a long term sense.

  43. RR thinks that I am not civil. I think that RR is not civil. If there is mutual disrespect on a topic, move on.
    Maybe we neutral observers can help you out, Kit.

    Let's have a vote, shall we?
    Who is NOT civil?
    RR 0
    Kit 1

    Take it away, regulars…

  44. Problem with PeakOil (PO), as with some other topics, is that it becomes a pseudo-religion, instead of a scientific debate. Hence POers discuss such handy topics as "sharing PO with your friends and loved ones". When people have made that emotional investment in PO, no factual argument will sway them back to reality. Best to leave TOD to their canned food and Mad Max preparations.

    Of course, people on the opposite side of the discussion can fall into the same trap. Exhibit A: Benny BND Cole and his counterfactual statement about oil consumption going down in developed countries. Or his prediction that oil prices were headed back to $10/bbl long term. Or his unscientific belief in CNG and HPEVs.

    Of course, of the two extremes, the optimistic version is easier to live with. But then, I'd say that, wouldn't I?

  45. Maybe what Kit meant was that RR is not a civil engineer. But as far as behaving in an appropriate manner, Kit is the one who needs etiquette lessons.

    So mark me down:

    RR 0
    Kit 2

  46. Let's have a vote, shall we? Who is NOT civil?

    Since I was the first to comment to Kit about his civility …

    RR = 0
    Kit = 3


  47. OD wrote" "The few CNG owners I have spoke with in our state use CNG exclusively."

    That is interesting. It is challenging to try to sort out why Compressed Natural Gas vehicles have not found wider acceptance. The economics are clear — CNG is cheaper than gasoline. The technology is available. Yet the take up has been painfully slow, and has tended to be driven by mandates, not consumer demand. Why?

    Most CNG vehicles are dual-fuel conversions of gasoline vehicles. Still have the gasoline tank, and a switch on the dashboard to flick from CNG to gasoline. Many CNG vehicles are fleet vehicles, where the operators have been trained in the fine art of refilling with high pressure gas, and are being paid for their time spent refilling. Yet they still resent the inefficient waste of their time, and flick that switch to gasoline every chance they get.

    If you have heard a different message from the CNG users you have met, please share. The failure of CNG to win broad acceptance is clear, but the reasons are not.

    The (tentative) bottom line seems to be that we need a technological breakthrough in one of two directions. Either a refueling breakthrough which makes refilling with high pressure gas at least as fast & simple as refilling with gasoline. Or a breakthrough in making gasoline from natural gas economically.

  48. Robert,
    Somewhere I read your comments on the Henry Groppe presentation at an Oil Drum conference and I knew you had a open mind. Mr. Groppe said that coal would be used to generate electricity in China so the oil that is currently being used in China to produce electricity would be transferred over to transportation. I believe Mr. Groppe is correct on this point and many others. In fact Mr. Groppe seems to have a very good handle on this peak oil situation. He has said we will never run out of oil just we will first run out of $20 then $30 then $40 ect oil. I also tried to get David Cohen to listen to what Mr.Groppe said but he would not even hear of it. Unfortunate about the human species we tend to stick to our reality regardless of new facts. That is why I don't go to the oil drum conferences anymore ….like Keynes said in the face of new facts I always change my mind…(to the impertinent journalist who asked why he changed his mind on a previously expressed opinion) what about you?
    Robert thanks for your open mind

  49. A model that spits out the same alarming result, whatever data you feed it. Amnesia when grotesque predictions turn out wrong. Rabid crusaders. Reminds me of something else, but what?

  50. Kinu, you could be right. I honestly don't know. Unfortunately, every person I have talked to about their CNG car has been a complete stranger. They were conversations started by me when i saw the CNG sticker.

    I was seriously looking at having a conversion done last year, so I was full of questions. I can tell you the people I know that do not have CNG cars are frankly terrified of having a conversion done. They are worried about the car exploding. I questioned several people when gasoline prices were skyrocketing about doing a conversion.. the answer was always the same, 'that thing will explode'. Oh well.

    Honestly though, just a quick google shows there are over 90 CNG filling stations within a 90 minute drive of my house and 20 being open to the public. It would not be hard to own a CNG car here. However, looking up where some of them are located, they are in some obscure places. Probably another roadblock for many conversions.

    I'm still looking at doing a conversation, but with the new EV's coming out in the next year or 2, it's going to be a hard decision.


  51. Kinu/OD

    I think the main reason for the lack of acceptance of the CNG (only) cars has been the high initial cost, for a reduced range. A new Honda Civic GX (their CNG only car) is about $6k above the similar equipped gasoline version. People have paid this premium for hybrids (where you get extended range) but not CNG, where you get reduced range.. Aftermarket conversions are cheaper, but seem to reduce re-sale value, not increase it.

    I used to run a propane (only) car back in Australia, got 2/3 the range of gasoline and at half the cost per km. Not suprisingly, every taxi in existence there uses it. But with CNG your range is much less, so for taxi drivers, that is an inconvenience. Still, when Aust is importing oil while exporting LNG, I think there is something wrong.

    Personally, I think LNG is a better way to go than CNG, more dense fuel and if you use the intake air to vaporise it before going into the high compression engine (up to 23:1) you get better than diesel efficiency. The storage tanks developed for liquid hydrogen are ideal for this. As with most alternatives, the early adoptions for CNG/LNG are, and will continue to be, with fleet vehicles, particularly diesels, that do lots of miles per year. the $ savings are just to great to ignore, and diesel engines need minimal modification for dual fuel operation.

    Watch for more on this in China, They import LNG from Australia, and now have an NG pipeline from Russia coming in (which spells more trouble for Europe). They are also doing lots on biomass to biogas and coal to liquids – in short, anything to displace oil. That said, they realise they will still need oil -they have just bought into a major Canadian oilsands project to go with their investments in Sudan, etc.

    Regardless of what the true status of the Saudi oilfields are, no country is willing to bet their future on it…

  52. good thoughts paul. I would not want to be in EU's position. They use less oil than the US, but are more dependent on fossil fuel imports as a whole.

    LNG, can that be made from methane? I recall Japan is going to try to harvest methane from the ocean floor in another two years, or so. They are definitely the canary in the peak oil coal mine with very very little natural resources of their own. I would expect a lot of peak oil mitigation solutions to start there. We'll see though.


  53. "LNG, can that be made from methane?"

    Acronyms should be used only between consenting adults! LNG = Liquified Natural Gas. Cryogenic methane. Much better energy density than Compressed Natural Gas, but needs more knowledge/skill to handle. Not practical for ordinary motorists, but has been used for buses & heavy trucks.

    I am not sure, Paul, that cost is the reason for CNG's lack of acceptance. A CNG conversion of a pickup truck is way cheaper than the battery-powered Minis that BMW is leasing to yuppies. A lot of CNG vehicles are there because of government mandates, and yet still the operators drive on gasoline every chance they get.

    Agree with you, Paul, about EU's sad situation. By far the world's largest fossil fuel importer, but too convinced of their own moral superiority to realise that their pants are around their ankles. Heavily dependent on Russian gas — trying to diversify to Algerian gas, or Turkmenistan gas. Talk about an accident waiting to happen!

  54. Now, having said that China is going to buy LNG from Australia (deal signed two years ago), they backed out of it this week -within a month of the Russian announcement about their gas pipeline to China!

    Couldn't agree more that both Europe and Japan have far more to lose from oil/gas shortages/price increases than we have. That's why the French still try to keep their influence in Africa (that and the Uranium from Namibia).

    Kinu, I too am surprised at the lack of NG vehicles here – but then I was also surprised at the lack of diesel vehicles here too – especially when Ford and GM and Toyota make and sell them in the rest of the world.

    I think it's a case of people sticking to the devil they know, and that real pickup truck driver don't waste money on image enhancements like yuppies do. If Ford doesn't think they can sell a diesel F-150, then clearly people are not ready for NG – though I do see the odd (old) pickup driving on propane. The relative scarcity of refueling stations is an issue, though that could easily be addressed. And the performance aspect is what comes from having a dual fuel vehicle – it just can't (easily) be optimised for gas operation.

    Compare the Honda Civic GX with the Gasoline version. Both have 1.8L engines, but the gasoline car has 140hp to 113 for CNG, and 128ft-lb torque to 108. Compression is 12.5:1 for CNG and 10.5:1 for gasoline.

    Bump up the compression to 16 or even 20 for NG and you would see a different story (and need a diesel engine block). So, as long as you are using a gasoline based engine, you will always have less performance, though it will be cheaper to run. Like ethanol, if you insist on maintaining backwards compatibility with gasoline, you give up the potential for much greater energy efficiency with the alternative fuel.

    My version of a meaningful flex fuel vehicle would be one that runs on ethanol and NG, as either can use a 16:1 engine, NG solves the cold start problems of ethanol, and ethanol solves the range problems of NG. Plus, if you are running on Ethanol not mixed with gasoline, you don't need anhydrous ethanol, so it is cheaper to produce. I could go on, but that's a topic for another post.

    But if those fleet drivers were paying their own fuel bill, I'll bet they would stay on NG. The more miles per week, the more you save, that is why buses and commercial trucks are converting.

    Some buses in Sweden are now running on biogas – that is a country that IS ahead of the curve in trying to gain their energy independence.

  55. "But if those fleet drivers were paying their own fuel bill, I'll bet they would stay on NG."

    Possibly, Paul. Would depend on the value the person puts on his own time.

    Whenever a process has multiple inputs, there are multiple definitions of 'efficiency'. Does it make sense for a skilled technician who is costing his employer $40/hour or more in total employment costs to spend an hour or so per week to save $20 in fuel costs? Flicking that switch from CNG to gasoline may improve the technician's overall economic efficiency.

    I like your idea of a custom-designed ethanol/CNG bi-fuel vehicle. That is the kind of economically-competitive real innovation we might see — if it were not for the stultifying hand of the Political Class with their mandates, subsidies, and excessive regulations.

    As an aside, a custom-designed mass-produced single-fuel CNG vehicle could be comparable in cost, range, & performance to a gasoline vehicle — through things like the high compression engine you mentioned and fuel tanks integrated into the frame. Johns Hopkins University did some interesting work in this about a decade ago.

    In contrast, a CNG conversion of an existing gasoline vehicle is always going to cost more and underperform.

  56. Robert, you are very harsh on those that would see a peak to this oil powered world.

    When one looks realistically at peak oil doomerism, wouldn't a true doomer pray to the 'god of greater oil reserves' for more oil, and so the eventual ecological destruction that would bring?


  57. Robert, you are very harsh on those that would see a peak to this oil powered world.

    False. I see a peak to this oil-powered world. Did you just stop by and comment without even attempting to understand my position?

    I am harsh to those who 1). Are cocksure of their point of view; 2). Use faulty analyses for support; 3). Heap scorn and disregard on those who challenge those analyses.


  58. Agreed on all counts Kinu. For the fleet driver, it is where the business IS driving (e.g. delivery trucks, city buses, some taxis) that we are seeing the greatest uptake. For a tradesman, it is probably viewed as an unnecessary complication to their business.

    There are some enthusiastic homeowners that have the home filling stations, so they effectively have a "plug-in" vehicle, but at $5k for the filling station (a glorified compressor) you need to be doing a lot of miles to get the money back.

    I was surprised at the $8k premium Honda charges for their CNG Civic. Presently, they only sell this vehicle in California and New York. Clearly, they have economy of scale on making the Civic vehicle itself, but have restricted the size of their market for the CNG version, for reasons I don't understand.

    For a country like Australia with lots of NG and dependent on oil imports, NG looks like a good solution, but making a country wide "system change" is very difficult.

    When oil gets back past $100/barrel and stays there, I think we will see more of the innovation. And if the subsidies are kept under control (i.e. eliminated or at least applied across the board) then only the truly worthwhile solutions will be adopted.

    Expect the innovations to come from the countries that have the most to lose from high oil prices and/or reduced supply, like Sweden, Israel, Aust/NZ , Japan, and, of course, China. Here there are still options to increase supply (oil sand/shale), it's just a question of cost – something Americans seem to be disproportionately sensitive to.

  59. "I was surprised at the $8k premium Honda charges for their CNG Civic."

    Paul, from what I understand, almost all Compressed Natural Gas vehicles today are rebuilds — a bit like many convertibles. The vehicle comes off a standard assembly line as a fully functional gasoline-fueled vehicle, and then is modified for CNG. So, naturally, it costs more than the original gasoline-fueled model.

    "When oil gets back past $100/barrel and stays there, I think we will see more of the innovation."

    Lots of people think that, Paul. But how do you explain the massive European failure to innovate, even though the European consumer has been paying the equivalent of $250/Bbl or more for years?

    What we have seen in Europe are massive Mercedes Benzes for the elites (Damn the fuel cost!) and motorized shopping carts for the peons — small, but still using conventional gasoline or diesel.

  60. paul wrote: if the subsidies are kept under control (i.e. eliminated or at least applied across the board) then only the truly worthwhile solutions will be adopted.

    And yet there is a $4000 tax credit for buying CNG, LNG, LPG, hydrogen and methanol (M85) vehicles
    but no such tax credit for buying ethanol or E85 vehicles.

    Alternative fuels CNG,LNG, LPG, hydrogen and CTL had a tax credit of $0.50 per gallon.
    fairly close to the $0.45/gallon for ethanol.

    There is a 50% tax credit up to $50,000 for installing alternative fueling pumps for CNG, LNG, LPG, hydrogen, electricity, E85 and B20.

    So it seems to me that the incentives are already applied across the board.

  61. Kinu,

    I guess no single manufacturer is willing to commit a production line to NG vehicles. To unbuild one seems wrong, but the realities of production assembly probably dictate it.

    On NG vehicles, I would suggest Europe hasn't made a big move on that because then they trade their middle east oil dependence for Russian gas dependence.

    I guess we'll have to agree to disagree about Europe's level of innovation. I wouldn't call it a massive failure, (or a success either) but I think they have at least been more innovative than we have.

    Mercedes has done what GM and all the others have done – build big expensive (and highly profitable) cars for those that can afford them. Meanwhile the small, cheap and efficient Smart has struggled for profitability, so I guess you could say the fuel hogs are subsidising the car companies to build fuel misers.

    Mercedes wanted to bring the original Smart (3 cyl diesel engined version) to the US and Canada, six years ago. Mercedes Benz US refused to sell it until they came out with a gasoline engined version, as the US market "wasn't ready" for it. They did bring it to Canada, and it sold like hot cakes. Then they did bring out the gasoline engined version in 08, which only gets 2/3 the milage of the diesel, and stopped bringing in the diesel. So there was an innovation, and it's introduction here was blocked.

    The fact that they produce diesel cars and we don't is at least one level of innovation, but agreed that at 2.5x the price, I would have expected more than just that. After all, diesel cars are not a new idea, they have just stuck with it. If gasoline in the US went up by 2.5x, we would see much more innovation, (as long as we survived the riots first) – is that the basis of your failure to innovate position?


    Clearly, the incentives are already across the board, though maybe not evenly. Equally clearly, they are not making much of a difference!

    Those numbers are, quite simply, amazing -so many different subsidies and tax breaks, that consumers could never keep track of them all. presumably the various sellers are up to date, but a consumer who doesn't know about them will never go looking for an NG vehicle. Of course, none of them are available in Canada!

    So these options are either truly not worthwhile, or else the decision makers are not aware of them. which would explain why it is mainly commercial fleet/bus operators taking them up – someone somewhere in those operations has done the numbers.

    This would suggest what people want is to modify the alternative fuels to suit standard vehicles. I think we should modify the vehicles to suit alternative fuels. Every time you modify the fuel, and you have to modify every drop of it, the 2nd law of thermodynamics takes its share. In the case of any X to liquids process, this "tax" would seem to be at least 50%.

    With the vehicle, you modify it once, or produce it differently in the first place, and then get full value for your fuel.

    Convincing the marketplace that this is better is obviously a challenge that no one car or fuel company is willing to take on – and I can't blame them for that.

    Much as I think NG vehicles, of all sizes, are a great option, clearly they are not going to displace gasoline unless something dramatic changes. Im sure the Saudi's are cheering that

  62. Paul wrote: "I guess we'll have to agree to disagree about Europe's level of innovation."

    Surely we can agree that consumer prices in Europe far above $100/Bbl have not resulted in any major switch away from oil-based transportation fuels? No big use of biofuels. No big use of natural gas. No big use of electricity.

    One view is that Europe has failed to innovate because Europeans are a dead end in human development. Although European politics are despicable, I find it hard to accept that the people who gave us the Industrial Revolution and Einstein are now devoid of any value.

    The other view is that, even at $250/Bbl, Europeans have still not approached the price level at which any of today's alternate fuels would be close to being economically competitive.

    Bottom line — the world needs signficant innovation in transportation. There is a tremendous opportunity waiting there.

  63. "Surely we can agree that consumer prices in Europe far above $100/Bbl have not resulted in any major switch away from oil-based transportation fuels?"

    Yes, I sure can agree on that. They do, of course, have a high level of rail based passenger transportation that displaces some vehicle traffic – but they have always had that, since before the vehicles, so we can't call that an innovation, it was already there.

    And vehicle traffic has steadily increased in all major cities to the point of needing drastic interventions, like the London congestion charge. And even that, which made a 12% improvement in trip times when introduced, has now lost it's effect, central London is just as gridlocked, but the city has a nice little earner..

    I guess their innovations have been incremental improvements in vehicle efficiency and size reduction, but yes, no shift away from oil based fuels.

    If $250/bbl isn't enough, as it would appear, one wonders if what price it would be?
    Here is a summary of world gasoline prices from The Oil Drum – the western European nations are already have the highest prices in the world.
    But of course, the government gets 50% of that in taxes, so your point about addiction to tax revenue is valid. They want to keep prices high, and volume steady. If a large scale alternative fuel or system suddenly became available, it would be politically incorrect to tax it at the same level as gasoline, so then how do they plug the revenue hole?

    You couldn't be more right about requiring a significant innovation in transport, but what will it be? Jeff Rubin's answer, in his excellent book "Why your world is about to get a whole lot smaller" is that we will simply have to get by with less transportation – i.e. more local production and consumption, less leisure travel etc. In the absence of any significant innovation, and if oil goes back into triple digits (he predicted the $150 peak several years ago), then I think he is right.

    In that scenario, Europe will be able to adapt spmewhat better than we can, as they are less dependent in the first place, by about 30%per dollar of GDP.

    So America's options are then to either make the innovations (alternative transport or alternative fuel), or secure continued supplies of oil and keep it cheap. Current strategy is clearly the latter, but I'd link to think if a significant innovation showed itself, that it would be adopted. The stuff we are seeing (corn ethanol,soy biodiesel) are merely incremental, and clearly not large scale solutions.

    The only historical example I can think of for a real shift from oil based vehicle transport is the widespread use of wood gasifiers in Europe in WWII, particularly Sweden. And this was driven by unavailability of oil, not a price issue.

    Much as I love wood as a biofuel, I can't see a large scale adoption for transport fuel soon, if ever. Gasifiers would be too "inconvenient" for the general public, and turning it into liquid fuels is a huge waste of energy. The only readily available substitute for oil is NG, which is clearly making less progress than ethanol, etc. With the US finding more of it every day, I still think this is the best, currently available option, and all domestic supplied, too.

    A feasible coal to liquid solution may yet present itself, and were it not for the greenies, it might get accepted.

    Looks like everyone is holding their breath for electric cars, and I think we'll faint before we get to see them as a large scale alternative.

    We need a car equivalent of the cellphone revolution, but the thing is, the cellphones are the communication equivalent of cars – they freed us form the "railroads" of landlines, and now people will starve before giving up their cellphones, just like their cars, but at least cellphones don't run on oil.

  64. A lot to agree with there. But one small nit.

    paul wrote: I guess their innovations have been incremental improvements in vehicle efficiency and size reduction, but yes, no shift away from oil based fuels.

    I view improvements in vehicle efficiency to be innovation, but vehicle size reduction is not innovation.

  65. Clee,

    I guess we can split hairs about whether size reduction is an innovation.

    One way to reduce fuel consumption is to reduce size. And to reduce size (and weight) while maintaining functionality, takes innovation.

    Think cellphones – they downsized steadily from the Motorola Brick in the 80's and 90's, while functionality remained about the same – that took some innovation.

    When Alec Issigonis designed the Mini, it was an exercise in size reduction – the smallest, simplest, possible car that could fit for people. To do this, he created such innovations as front wheel drive, with the east-west engine and the gearbox integrated under the engine sump. A pattern almost every front wheel drive vehicle uses today – so I would call that a successful innovation.

    The MIni is still with us and was declared the Car of the 20th Century, so the motoring writers of the world seem to think it is innovative too.

    I would call the Smart car innovative too. Highly fuel efficient, can be parked tail to kerb to save space (try to find a parking spot in Central London and you would appreciate this innovation).

    I also call it ugly, but that's another story – it's kind of like a pug dog – only their owners can love them.

    They are not engine or alternative fuel innovations, to be sure, but they are still innovations (or at least actions) that have led to reduced fuel consumption, which is a definite benefit.

    Now, that doesn't mean all these innovations are as applicable here – I recently drove I-5 from Bakersfield to Vancouver, I wouldn't want to do that in Smart car. That said, I know of one owner who has taken his Smart from Vancouver to Toronto, and back, and would gladly do so again, and paid half in fuel that anyone other than a Prius driver would.

    Agreed to switch from a large vehicle to a small one is in itself not innovative, but producing efficient small vehicles that make people want to switch from large ones is. The success of Minis and Smarts here is testament to that.

    Now, we just have to get on and find alternative means to power all vehicles great and small.

  66. Paul — Yes, we agree on a lot. Just an observation on the sociology of energy.

    We are all familiar with the True Doomers — the world is going back to the Middle Ages, presumably with high-ranking members of Greenpeace now having the old aristocratic Jus Primae Noctis. (There will be no TV in Doomer World, so the main guys will need some other form of entertainment).

    Then there are the Pessimists. Technology will not revert to Doomer World level, but the cost of power will rise so high that many of the things we treat as normal today (health care, travel, education) will become rare luxuries.

    Last, there are the Optimists. There is no reason why the price of non-fossil energy should be higher than that from fossil fuels — nor that the supply should be unduly constrained. But today's Politically Correct alternate energies don't fit the bill.

    Personally, I would encourage us all to be Optimists. But recognize that the main obstacle to technological Optimism is our current self-imposed political barriers.

  67. Kinu, our discussion here has merged with the of the biodiesel thread. Since we are all in agreement on the many failings of our dear leaders, I'll park that and focus on looking for solutions real world solutions, since that's what we engineers do best.

    I think the best statement here is "Bottom line — the world needs signficant innovation in transportation. There is a tremendous opportunity waiting there."

    And the problem is that most of today's "innovations", are focussed on either oil efficiency (reduces the symptoms but does not solve the problem) or putting the round fuel (biomass, coal) into the square(liquid fuel) hole.

    Add to that the significant parties, such as the saudis, that want to maintain the status quo, and it's no wonder nothing much is happening. I am not a supporter of the Big Oil conspiracies, but am I do think that if they put their considerable resources behind a quest for such innovation, it would arrive much faster. The command a significant share of societies resources, but for the (legitimate) commercial purposes, they are spending them looking for more oil, not more ways to get off oil.

    So their interests are not completely aligned with our country's interests.

    Don't think that I am a China fan, but I do think they have an opportunity we don't because the their government effectively commands all their resources (and a fair chunk of ours!), and can deploy them as best they see fit. We ma, or may not agree with some or all their policies, but I am envious of their ability to implement them on large scale and in short time frame. You just have to hope they make the right decisions.

    Just imagine a general that couldn't completely command his army because he had to bow to corporate interests! No sane country would ever let that happen, unless you had the corporate interest being the VP of the country, and thus the deputy commander in chief…

  68. Ah, I had not known that the modern front wheel drive innovation came as a result of trying to make the Mini as small as possible while still comfortably carrying four adults. Neat.

  69. Here is the real doomer 🙂

    All the talks about peak oil are more or less irelevant, since we have crossed the safe level of CO2 concentration by 37 ppm (for 2009). So any new molecule of CO2 in the air is just nearing us into unknown territory of climate changed (and mostly less king) world.


  70. "here is the real doomer" Yes, you sound like a real doomer.

    To give up hope because we have passed what someone has decreed is the "safe" level is just stupid. It's the equivalent of saying, once you turn 40, your body starts to decline, so you might as well just die then.

    If our CO2 emissions are NOT contributing to global warming, reducing/replacing oil usage has many economic, political and environmental (pollution, etc) benefits. If it IS contributing to GW, then, that's an additional, and powerful incentive.

    BUt even without that, we have plenty of incentive to move away from oil, and be more efficient with all our energy usage. No human problems ever got solved by resigning to be doomed. In fact, many innovations come in the face of adversity, by refusing to accept that we are doomed.

    You can sit on your butt and just say we are doomed or get up and try and do something positive. If, and only if, everyone adopts your approach, then yes, we are doomed.

  71. Clee, just think about all the innovations as a result of the aerospace industry – lightweight + strong materials, turbine engines, instruments etc. Same for computers and cellphones. If material availability or portability is a constraint, good design will beat out big design in the long run.

    I have no problem with people choosing to have big cars and houses, as long as they are prepared to accept the true cost of the materials and energy required to build and operate them. The demands from people to keep energy prices low suggest that many are not prepared to accept such cost.

  72. > There appears to be a strong
    > correlation between them embracing
    > shoddy analyses that gives them the
    > "right" answers – and rationalizing
    > when the "right" answers turn out
    > to be wrong.

    Of course – both stem from confirmation bias, which is essentially using a pre-determined conclusion to define the value of evidence; the opposite of rational reasoning.

    There are very significant issues regarding energy that society needs to deal with, which makes it very unfortunate that the concept of peak oil attracts so many people who just want to use it as a prop for their beliefs about how the world should work. They make "peak oil" sound like a doomer delusion, which obscures the very real energy issues it touches on.

    We're lucky that there are people who are willing to follow the data, rather than try to lead it, and who are willing to publicly and persuasively argue in favour of solutions that the data supports. So thanks for fighting the good fight, RR, no matter how thankless it may sometimes be.


  73. Hi Paul,

    I totally agree! In fact, I am translating the book of David MacKay (Sustainable energy without hot air – and I am actively blogging about climate change and peak oil.

    I agree that deterministic view is not very useful, but I just wanted to show to Robert that there is good reason to be depressed…


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