Observing the renewable energy transition from a European perspective

Archive for the month “January, 2012”

Global Oil Production – arrived at the plateau


The (End of the) Petrodollar System

To explain this situation [rise of the petrodollar] properly, we have to start in 1973. That’s when President Nixon asked King Faisal of Saudi Arabia to accept only US dollars as payment for oil and to invest any excess profits in US Treasury bonds, notes, and bills. In exchange, Nixon pledged to protect Saudi Arabian oil fields from the Soviet Union and other interested nations, such as Iran and Iraq.

2012 might end up being most famous as the year in which the world defected from the US dollar as the global currency of choice.


According to this video, that goes hand in hand with the previous article, the dollar will collapse when the petro-dollar system will collapse. Likely 2012 or a little later.

Discussion of the merits of this video in this [forum thread].

Electricity prices in the developed world

Prices in US$ cent/kwh and include taxes. Electricity in Denmark for example costs seven times the amount in Spain.

Most interesting, though, is that the there’s very little correlation between the fuel that a country uses for power and electric rates. Australia, like the United States, is heavily coal-based. Portugal gets a huge amount of power from wind and solar. Spain famously has invested heavily in solar power. Canada uses primarily hydropower. France, with rates about twice those of the United States, uses nuclear power.


It remains to be seen how accurate the data is. Here are figures from [eurostat] (in euro cent) and figures are vastly different.

Howard Kunster – Jive Talk

Howard Kunstler caustic as ever about American society, its leadership and its refusal to see what is coming.

Nicole Foss on Peak Energy

Nicole Foss, who under the pen name Stoneleigh co-edits the Automatic Earth website, just did a long-form interview with an Italian magazine where she lays out her peak energy, societal collapse thesis in the coherent, accessible way that fans of her writing have come to expect.

[Dollar Collapse]

[Interview] with both Nicole Foss and Jeff Rubin.

German industry starts raw materials alliance

[Wolfram halogen lamp][source]

Out of fear for coming raw material shortages the German industry starts an offensive to counter that threat organized by BASF, ThyssenKrupp and some ten other firms. In the coming 5-10 years investments are to be made in the order of one billion euros. The alliance will act in coordination with the federal government. Core materials of concern are: rare earths, wolfram and cokes.

[Der Spiegel]

Moody’s Credit Rating

On a site dedicated to geopolitics a chart like this can not be lacking. For extra interactive data go the Guardian to see the original map. Note that although Japan has a national debt of 200% GDP, it still is categorized as ‘high grade’ because it has a highly competitive economy. This cannot be said of the US but is even rated prime anyway because it own’s the world reserve currency, a left over of WW2. This way the US can export its inflation to the rest of the world.

Russian Energy Geopolitics

[Click to enlarge]

Moscow’s High Stakes Energy Geopolitics (summary) – by F. William Engdahl

Through the new North Stream and South Stream pipeline systems, Russia is clearly redrawing the energy map of Europe… energy is the lever for Russia’s return to the world stage and for checkmating Washington’s NATO encirclement strategy… On November 7 the first of two pipelines for Nord Stream, the huge Russian-German gas pipeline project, began delivery of gas. A 1224 km pipeline delivers gas from the Siberian Yuzhno-Russkoye field to Lubmin/Germany. Total cost: more than 12 billion $. After completion of the second pipeline by the end of 2012, 55 billion cubic meters of Russian gas a year, almost ten percent the entire EU annual gas consumption, or roughly one third the entire current gas consumption of China. The EU is going for natural gas energy big time and Moscow intends to be a major, if not the major beneficiary of that push. Nord Stream will deliver to Germany, the United Kingdom, Denmark, the Netherlands, Belgium, France and the Czech Republic. Read more…

Panic buying of fuel in the UK

Map of British oil refineries

One of the biggest British refineries in Coryton was closed today after its Swiss parent company went bust. With the current instability around Iran the only way for the prices is up.

[All British refineries]

[Daily Mail]

Already Past Peak Oil?

Possibly the world is now living off an oil plateau—roughly 75 million barrels of oil produced each and every day—since at least 2005. The first trillion barrels of oil have been consumed, another trillion is still waiting in the earth. However, getting the next trillion is likely to cost a lot more than the previous trillion. Based on an analysis of oil data from the U.S. Energy Information Administration it can be concluded that since 2005 production has remained essentially unchanged whereas prices (a surrogate for demand) have fluctuated wildly. This suggests that there is no longer any spare capacity. The difference between this plateau of 75 mb and the actual production of 82 mb in 2010 can be explained by the production of “unconventionals”—Canadian tar sands or the natural gas liquids co-produced with oil extraction. Others like environmental scientist Vaclav Smil however argue against the existence of a plateau since the oil price, adjusted for inflation, is virtually the same as in 1981. And that enough oil has been produced to satisfy demandsof new consumers in India and China. Against that idea it can be argued that energy effficiency has greatly increased during that period.

[Scientific American]

Global oil reserves January 2011

Total global oil reserves in January 2011 according to U.S. Energy Information Administration. Note that these figures say nothing about the quality of the oil concerned. Canada is third on the list but the number refers to low quality tar sand oil with a low EROI. Canada can not be seen as the world’s third oil supplier.


Iranian oil exports first half of 2011

These are the countries Iran was selling its oil to during the first half of 2011, according to the U.S. Energy Information Administration.


No dependency on the Gulf for Germany

Germany’s largest oil supplier by far is Russia. This means that Germany is not going to affected directly in case of hostilities in the Gulf between Iran and the U.S.   Germany nevertheless will suffer from the consequences of such a conflict as a result of steep price increases.


The Eurasian Triple Alliance.

Moscow and Tehran have strong common interests. Both want to prevent western control of the energy corridors of the Caspian Sea Basin. But the main factor they have in common is that they are both main geo-strategic targets of Washington. Russia, China and Iran are a strategic barrier against American expansionism. This ‘Triple Alliance’ can be seen as the last obstacle against U.S. global hegemony. All three are wary against U.S. and NATO military presence in Afghanistan. An Iran drawn into the U.S. sphere of influence would function as a primary energy corridor for the Caspian Sea Basin. The transformation of Iran into an American client state would threaten both Russia and China. In general support for Iran by Russia and China is underestimated. Both nations refused to cooperate with the latest 2012 unilateral sanctions imposed by Washington.

Credits: Mahdi Darius Nazemroaya [video]


The End Of The Petrodollar

There is no real proof that Iran is developing nuclear weapons. Nevertheless the West is insisting it does and wants to impose oil sanctions. But these sanctions are going to fail if not backfire since Iran has many alternative customers for its oil, like India and China. The sanctions are not just about nukes. The eroding position of the dollar as the world’s reserve currency is at least an important factor in the current stand-off. 1973 marked the beginning of the petro-dollar era with an agreement between Nixon and king Feisal: protection against the USSR of Arabia in exchange for acceptance of the hegemonic role of the dollar in oil affairs. Oil=dollar. Since it is the US that prints dollars, it virtually owned oil for free while the rest of the world started to hunt for dollars, not just to pay for oil but for other international trade as well. Read more…

German Army Predicts Global Collapse In Ten Years

Food security according to leaked report German army peak-oil study group:

Source pic as well as summery report:
[Spiegel – summary in German/English]

P.S. 23-11-2012: full report in English here [mirror]. Interesting note on page 68: “Implications for Germany: In view of the dominant role these countries play in German imports, stable and reliable supply relationships with the “northern dimension” of the Strategic Ellipse, in particular with Russia, will continue to play a central role in shaping German energy relations.“. In other words expect Germany to turn eastwards, where the remaining resources are.

Core concept Bundeswher study: “strategic ellipse“, that is territory with 74% planetary conventional oil and 70% dito gas.

Pipelines of the Middle East

[map legenda]

Saudi-Arabia has alternatives to exporting oil via the Strait of Hormuz, namely to the Red Sea as well as the Mediterranean.

Pipelines in western Eurasia

Credits: Philippe Rekacewicz, 2007


Strait of Hormuz from space

Bottom left is Iranian teritory, the bright lights are in Dubai/United Arab Emirates and the Arabian Sea/Indian Ocean in the background.

Will the Strait of Hormuz be the Sarajewo/Danzig of World War III?
Read more…

Shale Oil Is Not The Answer

Applying the EROI concept to the shale oil reserves in the US reveals that this form of energy is not the answer to US energy problems. Realistic recoverable oil from Bakken is probably under 5 billion barrels, or less than a year of total U.S. consumption.


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