Monday, February 28, 2011

Hope for Libyan Oil Production?

This is interesting:
In Benghazi, rebels have said that Libyan soldiers had joined the rebels in securing vital oil industry facilities around that part of the country. Some oil industry workers fleeing across the Tunisian border in recent days said they had seen Libyan soldiers fire their weapons to drive off foreign mercenaries or other security forces who had approached oil facilities not far from here.

Hassan Bulifa, who sits on the management committee of the Arabian Gulf Oil Company, the country’s largest oil producer, said Sunday that the rebels control at least 80 percent of the country’s oil assets, and that his company, based in Benghazi, was cooperating with them. The company resumed oil shipments on Sunday, loading two tankers at a port in Tobruk, Mr. Bulifa said. The ships — one bound for Austria and the other for China — represented the company’s first shipments since Feb. 10.

Although the revenue from those sales goes the company’s umbrella organization, Libya’s National Oil Company, Mr. Bulifa said Arabian Gulf Oil had ceased any coordination with the national company, though it was honoring oil contracts. And he insisted the proceeds would ultimately flow to the rebels, not Colonel Qaddafi. “Qaddafi and his gangsters will not have a hand on them,” he said. “We are not worried about the revenues.”
Too soon to know how much emphasis to place on this, but certainly worth watching. If the rebels can keep society organized well enough for the oil to keep flowing, the externalities to the rest of the world will be a lot less severe.  Money to fund the rebellion, too. Qaddafi has certainly made himself a pariah at this point, and it's devoutly to be hoped that the rebels succeed both in displacing him, and in creating a better society afterwards.

US Ethanol Production

Sunday, February 27, 2011

Unrest in Oman

Some Basic Sanity Checks on the NYT Radioactivity Piece

Radioactivity in Shale Gas Drilling Wastewater

The New York Times has an extremely eye-opening investigative piece this morning, looking at the issue of radioactivity in wastewater from shale gas hydrofraccing, mainly in Pennsylvania.
The risks are particularly severe in Pennsylvania, which has seen a sharp increase in drilling, with roughly 71,000 active gas wells, up from about 36,000 in 2000. The level of radioactivity in the wastewater has sometimes been hundreds or even thousands of times the maximum allowed by the federal standard for drinking water. While people clearly do not drink drilling wastewater, the reason to use the drinking-water standard for comparison is that there is no comprehensive federal standard for what constitutes safe levels of radioactivity in drilling wastewater.

Drillers trucked at least half of this waste to public sewage treatment plants in Pennsylvania in 2008 and 2009, according to state officials. Some of it has been sent to other states, including New York and West Virginia.

Yet sewage treatment plant operators say they are far less capable of removing radioactive contaminants than most other toxic substances. Indeed, most of these facilities cannot remove enough of the radioactive material to meet federal drinking-water standards before discharging the wastewater into rivers, sometimes just miles upstream from drinking-water intake plants.

Friday, February 25, 2011

No, no, no, no!

Spain will lower highway speed limits, cut train ticket prices and use more biofuel under an emergency energy-saving initiative because of soaring oil prices brought on by unrest in Libya, an official said Friday.
Finally, oil companies will also have to add more bio-fuel to the gasoline and diesel they produce — from the current mandatory 5.8 percent proportion, up to 7 percent, the deputy prime minister said.
Emphasis mine. This is an unbelievably counterproductive thing to do. A significant part of the cause of the unrest in the Middle East is due to high food prices. The regimes are all rushing out buying food in an attempt to appease their populations. The unrest is now sharply increasing oil prices, and the geniuses in the Spanish government want to respond by calling for more food to be converted into biofuel, thus further increasing the strain on food prices?

Nine Million Barrels/Day?

Thursday, February 24, 2011

Wednesday, February 23, 2011

Libyan Oil Grinding to a Halt

Here's the latest:

At least 300kbd-400kbd of oil production are shut-in already, and likely more, but the situation is still confusing.
As much as a quarter of Libyan oil output has been shut down, Reuters calculations showed on Wednesday, as unrest prompted oil companies to warn of production cuts in Africa's third-largest producer.

Austria's OMV said on Wednesday it might be heading for a full production shutdown in Libya. Total, Repsol, Eni and BASF have also said they are either slowing or stopping output.

The latest comments point to a growing impact on oil output from Libya, which produces 1.6 million barrels per day (bpd) of high-quality oil, or almost 2 percent of world output. About 1.3 million bpd is exported, mainly to Europe.
According to Time Magazine's Robert Baer, anonymous sources close to Gaddafi say he is now giving orders to sabotage Libya's oil industry:
There's been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos.
Libyan ports are shutting down:
Libyan cargo port operations have shut down due to increasing violence sweeping the country, Reuters has reported.

Operations at Tripoli, Benggazi and Misurata Mediterranean ports, which handle general cargo and container shipping, have closed.
In particular, oil exports appear to be halting completely:
Operations at Libyan oil ports were disrupted by a lack of communications, trade sources said, and flows from marine oil terminals in Libya were halted on Tuesday, an Italian government source said.

"The situation is worrying. This morning the oil terminals were blocked in Libya," the government source said.

It was not possible to get through by phone to Libyan oil ports or shipping agents on Tuesday.

"Everything is out," said a source with a major oil company. "We can't get through to anyone. Our operations people say contact is impossible with the shipping agents, port officials, anyone. The lines are all down."
The country appears to be descending into civil war:
Col. Muammar el-Qaddafi of Libya kept his grip on the capital on Wednesday, but large areas of the east of the country remained out of his control amid indications that the fighting had reached the northwest of the country around Tripoli.

Libyans fleeing across the country’s western border to Tunisia reported fighting over the past two nights in the town of Sabratha, home of an important Roman archeological site 50 miles west of Tripoli. Reuters reported that thousands of Libyan forces loyal to Col. Qaddafi had deployed there.

“The revolutionary committees are trying to kill everyone who is against Qaddafi,” said a doctor from Sabratha who had just left the country, but who declined to give his name because he wanted to return.
Of course, as for the oil production losses, the Saudi's say they stand ready to make up the difference:
“OPEC is ready to meet any shortage in supply when it happens,” the Saudi oil minister, Ali al-Naimi, said at a news conference after a meeting of ministers of oil producing and consuming nations in Riyadh, Saudi Arabia. “There is concern and fear, but there is no shortage.”
The next few months' oil statistics are going to be interesting, to say the least. It now seems increasingly likely that Libya's oil production (about 1.6mbd) is largely going to halt, or at least not get exported.  So we will see if Saudi Arabia's production really will rise to compensate. The problem, of course, is that Mr al-Naimi's idea of what constitutes a "shortage" may not be the same as the rest of us.

Tuesday, February 22, 2011

Monday, February 21, 2011

Friday, February 18, 2011

Brent-WTI spread

Chinese Railway Chief Fired

Some very interesting reporting in the NYT this morning:
In his seven years as chief of the Chinese Railways Ministry, Liu Zhijun built a commercial and political colossus that spanned continents and elevated the lowly train to a national symbol of pride and technological prowess.

His abrupt sacking by the Communist Party is casting that empire in a decidedly different light, raising doubts not only about Mr. Liu’s stewardship and the corruption that dogs China’s vast public-works projects, but also, perhaps, the safety, financial soundness and long-term viability of a rail system that has captured the world’s attention.

Thursday, February 17, 2011

History of Democracy Question

Jamais Cascio seems to have suddenly returned to the blogosphere, and has a post worrying about various possible signs and indicators of decay in American democracy.  I've also been thinking a lot about democracy in light of events in the Middle East.  In particular, I have the impression that once democracy is well entrenched in a culture, it's actually very difficult to dislodge, and that US democracy will prove much more robust than Jamais worries.

Clearly, some autocratic countries become democratic briefly, and then lapse back into some form of autocracy.  The Weimar republic lasted from 1919 to 1933, for example, before Hitler effectively abrogated the constitution.  However, I can't think of any case, in the modern era, of a multi-generational democracy that has ever reverted back.  For example, Britain managed to lose an entire empire without ever any serious threat to its status as a democratic country.  Britain and the US made it through two world wars and a great depression without losing their democratic status.  Indeed the US managed to fight a civil war with itself, without either side actually giving up on the democratic form of governance.

So my question is this: what is the longest period that a country has been a democracy, and then reverted to some non-democratic form of government?  Let's confine it to the post-industrial revolution era.

Right now, the longest case I've found is Chile - if I'm understanding the history correctly, Chile was a democracy from 1932 to 1973 - 41 years - before the government was overthrown in a military coup.  Are there any cases more pronounced than that?

Do Mediterranean Crop Yields Show Climate Stress?

Wednesday, February 16, 2011

Tuesday, February 15, 2011

Monday, February 14, 2011

Friday, February 11, 2011

OPEC Production

Wednesday, February 9, 2011

What did we Learn From the Saudi Cables?

All The Guardian Saudi Oil Cables

At present, I have found five Wikileaks cables that the Guardian has published which concern Saudi Arabian oil production and reserves. Here are links to each one, in chronological order, and a short excerpt to give the flavor:

Tuesday, February 8, 2011

Wikileaks confirms Saudi Reserve Overstatement

The Guardian has a very interesting piece for us keen Saudi watchers:
The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.
Emphasis mine.  Also...

Chicago in Context

Friday, February 4, 2011

Thursday, February 3, 2011

Food Prices Up Again in January

The FAO reported this morning on their latest global food commodity price index for January, and it rose 3.4% from Dec 2010 to Jan 2011 (which was already higher than during the 2008 food price shock).

Why Oil Matters More Than Rubber

I was thinking about Paul Krugman's Cross of Rubber column, and in particular the associated blog post Commodities: This Time is Different.  My take on Krugman is that he's an extremely brilliant guy who's been thinking about economics for a good long time.  His enormous knowledge and insight are invaluable, and I pay close attention to his writing.  However, I also think he's gotten into some pretty deeply scripted habits of thinking based on past events and isn't paying close enough attention to the ways in which the present and the future are likely to be different than the past.  In particular, his frame of reference for the events of the last few years has been past deflationary episodes such as the Great Depression in the 1930s and Japan in the 1990s.

Wednesday, February 2, 2011

Tuesday, February 1, 2011