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06 September 2014

Press review 06-09-2014 - The Limits

These days, having the media referencing "Peak Oil" in reasonable terms is a rare enough event; having it referenced together with the Limits to Growth study is pure luxury. But that is just what two journalists writing for The Guardian did, noting that the standard scenario produced by the MIT scientists in 1973 has been remarkably accurate. This should not be something new to regular readers, but it is important to know that the issue of exponential growth is still being studied seriously.

Contrary to what these journalists assert, I do not find the study to be a doomsday prophecy. The standard scenario is one of various developed, each with a different outcome. The study provided important insights into the mechanisms driving exponential growth and the possible obstacles to its perpetuation. The fact that the standard scenario has been the most accurate these past forty years means that finite resources are the most important of these obstacles, anticipating an end to growth sooner rather that later. And herein lies the path to a sustainable future: replacing finite resources with renewable ones and/or closing the resource extraction - usage - disposal cycle.

The Guardian
Limits to Growth was right. New research shows we're nearing collapse
Graham Turner and Cathy Alexander, 03-09-2014

The 1972 book Limits to Growth, which predicted our civilisation would probably collapse some time this century, has been criticised as doomsday fantasy since it was published. Back in 2002, self-styled environmental expert Bjorn Lomborg consigned it to the “dustbin of history”.

It doesn’t belong there. Research from the University of Melbourne has found the book’s forecasts are accurate, 40 years on. If we continue to track in line with the book’s scenario, expect the early stages of global collapse to start appearing soon.

Limits to Growth was commissioned by a think tank called the Club of Rome. Researchers working out of the Massachusetts Institute of Technology, including husband-and-wife team Donella and Dennis Meadows, built a computer model to track the world’s economy and environment. Called World3, this computer model was cutting edge.

[...] The issue of peak oil is critical. Many independent researchers conclude that “easy” conventional oil production has already peaked. Even the conservative International Energy Agency has warned about peak oil.

Peak oil could be the catalyst for global collapse. Some see new fossil fuel sources like shale oil, tar sands and coal seam gas as saviours, but the issue is how fast these resources can be extracted, for how long, and at what cost. If they soak up too much capital to extract the fallout would be widespread.
Cap off to these journalists. The media in general struggles at lengths to tackle this sort of broad scope issues and secular trends, it is simply out of their usual framework. Dave Summers published a remarkable reflection on this phenomenon, absolutely mandatory reading.
Bit Tooth Energy
Global oil supply and Bárðarbunga
Dave Summers, 31-08-2014

[...] The delays in dramatic eruption footage, and the early decay in immediate activity has led a number of folk to anticipate that the risk has declined and for some the risks from the eruption are over, with one scientist commenting:
"If this eruption persists it could become a tourist attraction, as it will be relatively safe to approach, although the area is remote,"
The eruption is continuing and will likely continue, and potentially significantly worsen, over the next several months. Yet, in the world of instant highlights, headlines and Twitter the risks from the long-term eruption (which can be horrendously severe) are immediately glossed over as the eruption fails the “dramatic event” test.

This is uncomfortably similar to the situation that one sees when writing about “Peak Oil”. One can, on any individual day, find comforting headlines that tend to gloss over the longer-term problem that is being written, in increasingly large letters on the predictive wall of our future. But that does not hide the potential disaster that it presages, it merely conceals it from the general public.
On a shorter time scale Ukraine remains the epicentre, at least when viewed from this point of the world. The Spiegel magazine published a long interview with Rosneft's president that includes many important points, not the least that American companies are filling in for European suppliers that were cut off from the Russia market with the sanctions. I would expect the sanctions to be enacted in equal measure by NATO members, but it seems not. Wake up! oh you driving the European economy!
Rosneft President Igor Sechin: 'Russia Didn't Initiate the Ukraine Crisis'
Gerald Traufetter and Matthias Schepp, 02-08-2014

[...] SPIEGEL: Has your cooperation with German companies like Siemens been negatively affected by the sanctions?

Sechin: No, the gas turbines and control systems that we buy do not fall under the resolutions. But in the first half of this year, our imports of technology from Germany as a whole have sunk by 15 percent. Nevertheless, there isn't a deficit of such machinery in Russia. American and Asian companies have been more than happy to fill the void. Certainly, Germany produces quality drilling rigs and pipeline systems. But if Germany doesn't want to deliver, we'll just buy in South Korea or China. If Germany's goal is that of preventing its own companies from earning money, then go ahead.

[...] SPIEGEL: Yet raw materials have always been an element of politics.

Sechin: Rosneft closed its first contract with China in 2010, prior to the sanctions. The Indians, too, need oil. In the Asia-Pacific region, the need for liquid natural gas is immense. It is thus impossible to isolate Russia. The world today is different than it was a few decades ago. With its sanctions, the West is first and foremost limiting itself -- when it comes to the importing of Russian raw materials and the exporting of machines and facilities.

[...] SPIEGEL: What will happen with Rosneft investments in Ukraine?

Sechin: By the end of the year, we had planned to open a refinery that we modernized in the eastern Ukrainian town of Lysychansk. There was no fighting there, but Ukrainian artillery has reduced the facility to rubble. We estimate the damages to be around $140 million and we will negotiate with the government in Kiev over compensation.
Another of Igor Sechin's claims is intriguing: the Ukrainian army seems to have been deliberately targeting energy infrastructure in conflict areas. As noted in previous reviews, the country is facing overwhelming energy shortages the coming winter, possibly the driving force for a short term cease fire.
Ria Novosti
Union of Mineworkers: Ukraine’s Coal Reserves to Run Out in November

Coal reserves at Ukraine’s electricity producing thermal power stations will only last until this November, the chairman of Ukraine’s Union of Mineworkers Mykhailo Volynets said Tuesday.

“Free Miners Union today warns people that we are not ready for the winter and that our reserves of coal will run out in November,” Volynets said during a press briefing.

According to earlier media reports, Ukraine’s Ministry of Energy sent a message to local energy saving companies about possible temporary electricity blackouts due to capacity shortage in the national grid, just as it was in the 1990s.
Electricity generation in Ukraine is already deficient, and the shortage is being used to punish Crimea for its secession.
Ukraine slashes power to Crimea as electricity crisis deepens
Pavel Polityuk and Svetlana Burmistrova, 03-09-2014

Ukraine reduced electricity supplies to consumers in Crimea on Wednesday and threatened to cut power altogether if quotas were breached, as it battles a power crisis on the mainland that threatens to cause rolling blackouts across the country.

Kiev has declared a state of emergency on the electricity market after months of fighting between pro-Russian rebels and Ukrainian forces disrupted supplies to thermal power plants (TPP), which provide around 40 percent of Ukraine's electricity.

The power crisis together with an expected shortfall in gas supplies from Russia mean Ukraine faces a winter that Prime Minister Arseny Yatseniuk said would be "extremely difficult".
One of the claims by Igor Sechin is very true: NATO can not possibly isolate Russia. The sanctions enacted these past few months show that NATO members do not understand they no longer sum up to an all-reaching power.
Under Putin's gaze, Gazprom starts mega-pipeline to China
Vladimir Soldatkin, 01-09-2014

President Vladimir Putin on Monday oversaw the start of construction on a giant pipeline that is due to ship $400 billion worth of Russian gas to China in the three decades after flows begin in 2019.

The 4,000 km (2,500 mile) "Power of Siberia" pipeline, being built by state-controlled Gazprom, forms a key part of the Kremlin's energy strategy, symbolising Russia's attempts to wean itself off dependence on European markets that account for most of its exports.

"Just now, we along with our Chinese friends are starting the biggest construction project in the world," Putin told a Chinese delegation, headed by Vice Premier Zhang Gaoli, and a group of Gazprom workers in Russia's far east.
After the "Russian invasion" hype of last week, there was more vocal calls for an all out economic blockade to Russia. This seems still a remote scenario, but it is important to note that the media is not yet fully "bandwagoning" on to such folly. The vital dependence on Russian resources is still an acceptable theme.
Finland most vulnerable to Russian gas cut-off
Valentina Pop, 03-09-2014

Finland would experience gas shortages even if Russia cut off exports just for one month, while other EU countries would last between three to nine months without Russian gas, according to a German study.

"A Russian gas export embargo during the winter of 2014/15 lasting for more than 6 months would cause supply shortfalls in many European countries, in particular, in central and eastern Europe, including Germany," according to a study published Wednesday (3 September) by the Institute of Energy Economics at the University of Cologne.

Based on a computer simulation of European pipelines, storage facilities and liquefied natural gas (LNG) infrastructure, the study explores what would happen if Russia would cut off the gas for one, three, six or nine months.
The coal shortage in India is appearing with great insistence in the press. Indeed the situation seems to be still in the worsening phase, and short-term solutions do not seem at hand.
India Blackouts Widen as Coal Stocks Drop at Power Plants
Rajesh Kumar Singh, 30-08-2014

Blackouts in India widened as inadequate coal supplies forced plants to shut down, after increased industrial activity and a monsoon deficit boosted electricity demand from factories and households.

The national peak shortage yesterday expanded to more than 6 percent from the 3.9 percent average in July, according to data from the Power Ministry and Power System Operation Corp., a unit of Power Grid Corp. of India. Stocks at power stations run on local coal plunged. Equipment breakdowns or maintenance also caused other plants to be under shutdown, including ones operated by Tata Power Co. (TPWR) and Adani Power Ltd.
Recently, even the coastal financial centre of Mumbai has been affected, at some point prompting fears of a market shut down. For now emergency generators have kept trading on line.
Hindustan Times
North to west blackout: power crisis to worsen
Anupama Airy, 03-09-2014

Blackouts across large swathes of north and west India look set to worsen with several power plants shutting down due to a crippling coal shortage even as a deficient monsoon drives up power demand.

Of the country’s 100 thermal power stations, 56 have less than seven days of coal stocks, including 27 with supplies to last under four days, government data showed Wednesday.

Long outages in the last few days have hurt operations in tens of corporate towers in Mumbai and adjoining areas while the national capital’s suburbs in Gurgaon, Noida and Faridabad have also been left in the dark.

Regular blackouts have led to street protests in Uttar Pradesh, Punjab and Bihar.

A patchy monsoon has kept water levels in reservoirs low, impacting hydro power generation.
In the past couple of weeks the Islamic State has been transformed into the worst enemy of the West, after being an ally for over two years. The American mainstream media has played an important role in this sudden tactical swerve, and albeit two weeks being a long period in the age of Twitter, some folk do take notice.
The Mother Of All Blowback
Eric Margolis, 30-08-2014

[...] The US sponsored and armed the uprising against the Assad regime, which had brutally ruled Syria for 43 years. France, Britain, Saudi Arabia and other Arab nations backed the campaign to overthrow Assad, as a way to damage Iran, Syria’s principal ally. The result: a bloody war of attrition that is slowly being won by Damascus.

Worse, the western intervention in Syria produced what is known in the intelligence business as “blowback”- in this case the Mother of all blowback.

The Syrian jihadist supported by the western powers and, for some baffling reason, Turkey, ran amok. A previously unknown band of gunmen known as the Islamic State of Iraq and the Levant were trained and armed in Jordan by CIA, then turned lose on Syria.

ISIL became ISIS, then the by now notorious Islamic State(IS) which has been rampaging across northern and central Iraq. What makes IS so effective is that the major portion of its leaders and soldiers are veterans of President Saddam Hussein’s army, notably the Republican Guard. With IS is the last surviving Saddam insider, Izzat Ibrahim al-Douri.
Courtesy of the Islamic State, petroleum extraction in Iraq is now taking a visible hit, especially in the Kurdish region. A solution to the problems described below with air strikes is not obvious.
Gulf Times
Oil production in Iraq’s Kirkuk slumps 90%

Oil output in Iraq’s Kirkuk has slumped to 30,000 bpd since June, 90% down on earlier this year, and a federal pipeline to the Turkish port of Ceyhan may be out of action for over a year due to sabotage, Kirkuk’s governor said yesterday.

In February this year Iraqi oil production hit record highs of 2.8mn bpd nationwide, with an estimated 300,000 bpd coming from the northern province of Kirkuk.

“There have been no exports since March and the only production in Kirkuk has been the 30,000 bpd to a small refinery and enough gas to get our electrical grid going since June 8,” Najmaldin Karim, Kirkuk’s governor told reporters at an industry conference in Istanbul.

“I don’t think there will be exports from Kirkuk to the Ceyhan pipeline any time soon. It has been sabotaged continuously and to get it all back would take at least a year or more,” he added.
And in neighbouring Iran the Nuclear story is also picking up. Again demonstrating the failure of the isolation attempts by NATO, Russia seems set to speed up the Nuclear programme of the Persian country.
Turkish Weekly
Russia to build two nuclear plants in Iran

Russia will build two new nuclear power plants in Iran, says the head of Iran's nuclear energy institution.

Semi-official Fars News Agency on Saturday quoted Ali Akbar Salehi, the chairman of Iran Atomic Energy Organization (AEOI), as saying that Moscow and Tehran would soon sign a deal for the construction of the new nuclear plants in southern coastal province, Bushehr.
On the broader picture the financial troubles of the petroleum and gas industry are still making the rounds within the alternative media. As the author below notes, this story has been largely kept back by the mainstream media.
The Tyee
A Big Summer Story You Missed: Soaring Oil Debt
Andrew Nikiforuk, 29-08-2014

Some of the summer's biggest news stories took place in the bombed schools of Gaza, the abandoned hospitals of the Democratic Republic of Congo, the wheat fields of eastern Ukraine and the bloody mountains of northern Iraq.

But one of the most important made virtually no headlines at all, and seemed to only appear on the website of the U.S. Energy Information Administration.

Last July the government agency, which has collected mundane statistics on energy matters for decades, quietly revealed that 127 of the world's largest oil and gas companies are running out of cash.
Negative news regarding the Nuclear park in Europe have accumulated these weeks: power plants halted in Belgium and the UK and now another delay to the Olkiluoto reactor in Finland. Perhaps these are unrelated events, but they certainly highlight the lack of a clear policy in Europe towards this technology.
Finland's nuclear plant start delayed again; Areva, TVO trade blame
Jussi Rosendahl, 01-08-2014

Areva-Siemens, the consortium building Finland's biggest nuclear reactor, said on Monday the start date of the much delayed project will be pushed back to late 2018 - almost a decade later than originally planned.

Areva-Siemens blamed disagreements with its client Teollisuuden Voima (TVO) over the plant's automation system, the latest blow for a project that has been hit by repeated delays, soaring costs and disputes.

Olkiluoto 3, which will be Finland's fifth and biggest nuclear reactor as it aims to increase energy self-sufficiency, was originally due to start operating as early as 2009, but has been hit by repeated delays and soaring costs.

Areva said construction, which started in 2005, would not be completed before mid-2016, and that operations at the 1,600 mega-watt plant were not expected to start until late 2018.
There are no positive news in this edition, signs of the times? Perhaps not. Below just a reminder that not all that shines is gold, while some renewable technologies have matured remarkably well in recent years, others have had a different fate.
How Badly Is the Wave and Tidal Industry Struggling? Likely Worse Than You Thought
Stephen Lacey, 15-08-2014

[...] Nearly a decade after the surge of attention in marine energy technologies, the industry has not been able to overcome severe technical and financial challenges. As a result, installations have remained at pilot scale, while financing has been largely limited to government programs for testing and demonstrations.

And new projections from Bloomberg New Energy Finance (BNEF) show that the market for marine energy will be inconsequential for years to come.

According to BNEF, tidal power installations are expected to hit 148 megawatts by 2020, down 11 percent from forecasts made just a year ago. Wave power will be even smaller, with global capacity expected to reach 21 megawatts by the end of the decade -- a 72 percent downward revision from earlier forecasts.
Until a next time.

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