The US in a High Emissions Scenario

Number of days annually over 100^oF in the recent past, and under high emissions in 2080-2099 according to p90 of Global Climate Change Impacts in the United States

East Coast Snowstorms Predicted By Climate Change

I am currently ploughing through Global Climate Change Impacts in the United States, which is a comprehensive 188 page report from June 2009, and produced by a set of government agencies in the US, headed up by the National Oceanic and Atmospheric Administration, looking at the likely impacts of climate change on the U.S.  I'm kind of going through it in a spirit of "How bad is this going to be?" if we make fairly pessimistic assumptions of very high emissions in future, which certainly seem warranted at the moment.  More on that later.

However, I note that climate sceptics have been doing a great deal of crowing lately about how the heavy snowstorms on the East Coast prove global warming must be wrong (eg see here or here).  And so it was interesting to come across this prediction from p38 (written last summer, recall).

Emissions Compared to IPCC Scenarios

Future of Chinese Carbon Emissions

Prosperity Without Growth

I recently came across a report, Prosperity Without Growth by the United Kingdom Sustainable Development Commission, which I didn't know about before, but according to the web page:

The Sustainable Development Commission is the Government's independent adviser on sustainable development, reporting to the Prime Minister, the First Ministers of Scotland and Wales and the First Minister and Deputy First Minister of Northern Ireland. Through advocacy, advice and appraisal, we help put sustainable development at the heart of Government policy.
On 1 February 2009, the Sustainable Development Commission (SDC) became an executive non-departmental body (Executive NDPB).
The SDC is registered with Companies House as a Company Limited by Guarantee, and registered with the Cabinet Office as an Executive NDPB. It is wholly owned by Government.
As a separate legal entity the SDC will:
reinforce its remit as the UK Government’s sustainable development watchdog and advisor;
have more freedom to make decisions over staffing and finances;
continue to have a close working relationship with the UK Government and the Devolved Administrations.

Progress in Furniture from Ancient Egypt

February US Consumer Confidence

Popular Sunni political party to boycott Iraqi elections

According to the WaPo on Sunday:

BAGHDAD -- A popular Sunni party announced Saturday that it will boycott Iraq's parliamentary elections next month, but it stopped short of urging supporters not to vote.

The decision by the National Dialogue Front to pull out of the March 7 elections could cement views here that Shiite religious parties have rigged the vote against secular and Sunni candidates.

Saleh al-Mutlak, who leads the party, was among about 500 candidates disqualified from the elections because of their alleged ties to Saddam Hussein's Baath Party. A panel of judges signed off on most of the disqualifications. But before the appeals process, all but 171 were replaced by their parties or withdrew. Only 25 prevailed upon appeal.

"It's a bad environment for the election," said Haider al-Mullah, a spokesman for the National Dialogue Front, which has 11 seats in parliament. "They are preventing good leaders like Doctor al-Mutlak from running."

The disqualifications have caused widespread fear that the elections will be deemed illegitimate.

China and Comparative Advantage

In response to my rant about China the other day, commenter James (along with a few others) suggested that the problem was that I didn't understand enough economics, and helpfully assigned some remedial reading on the benefits of free trade, and in particular on Ricardo's theory of comparative advantage.

For example, he suggested the essay by Paul Krugman from 1996 entitled Ricardo's Difficult Idea, which I duly read, along with various other suggested references.  Other references will have to wait, but I'd like to take the opportunity of this morning to outline why the conventional theory of international trade, as exemplified in Krugman's essay (but which I originally learned in high school), doesn't reassure me much at all.

I'll begin with some caveats: I've read Paul Krugman for many years, he's obviously a genius, as well as a brave and decent human being.  This essay is from 1996, and doesn't represent his recent thinking on China (which in my opinion still has blind spots but is more nuanced).  So I'm more using the essay above because it's a very accessibly written meditation on the case for the conventional economic wisdom of the benefits of international trade.  Further, I'm not attacking international trade in general, or globalization in general, or suggesting protectionist policies as a specific response.  At this point, I'm simply trying to make a specific case about some dangers to the United States of what is happening in China (probably to other western countries too, but I haven't had the chance to think about that much in depth yet).  So in this post, I want to highlight what the conventional assumptions of the Ricardian model are, and point out that, empirically, they are materially violated here.  End Caveats.

China: The Mother of All Black Swans?

Commenter Manolo pointed to this presentation from Vitaliy Katsenelson on the possibility of an over-inflated China crashing. I haven't been able to come to a conclusion on how seriously to take this risk, but this seems a good summary of the case for it.

China - The Mother of All Black Swans - By Vitaliy Katsenelson

The Scale of the Deficit with China

Composition of US Employment

Chinese Labor Costs, Tea Partiers as True Believers

Source: Lett and Banister, China's Manufacturing Employment and Compensation Costs: 2002-2006, Bureau of Labor Statistics Monthly Labor Review, April 2009.

Specter of Sectarian Violence in Iraq

The Washington Post has a piece on possible resurgence of sectarian violence in Iraq:

It was only one killing, but it unleashed the demons of a bitter and perhaps unfinished past.

The victim was a Sunni man in the mostly Shiite neighborhood of Hurriyah, in northwest Baghdad. The death and the aftermath were reminiscent of the prelude to the sectarian war, which began in late 2005 with a smattering of killings and threats and culminated with 100 bodies a day being dumped in the streets of the capital. With the imminent departure of American forces and fierce competition for power ahead of general elections on March 7, many here say sectarian strife is reigniting.

But this time, there will be no outsider acting as a buffer between the warring sects. U.S. military officials acknowledge that as Iraq regains sovereignty, their influence is waning. A senior U.S. military official who has spent years in Iraq said he fears that as the drawdown begins, American forces are leaving behind many of the same conditions that preceded the sectarian war.

"All we're doing is setting the clock back to 2005," said the official, who spoke on the condition of anonymity to offer a stark assessment. "The militias are fully armed, and al-Qaeda in Iraq is trying to move back from the west. These are the conditions now, and we're sitting back looking at PowerPoint slides and whitewashing."

I'm not fully persuaded by the evidence presented in the piece, but it's definitely worth a read. Needless to say, a return to pre-surge levels of violence would make success of the al-Shahristani plan much less likely, which in turn will make global oil supply problems far more severe in the medium term. There's a lot at stake.

More Iraq blogging here.

Dynamics of US Unemployment

Latest Iraqi Oil Production Statistics (to Jan 2010)

Global Oil Production Statistics (to Jan 2010)

Sustainability and Global Seafood

Gone Kayaking

My wife and I are headed up to Tomales Bay with kayaks and camping gear for the long weekend.

No further blogging until Tuesday morning.  Have a great weekend everyone.  Will try to add a few photos to this post when I get back.

In the meantime, there's an actual post below.

Update: A few snaps below the break.

The Scale of Alternative Liquids

Food Security: The Challenge of Feeding 9 Billion People

The New York Times Dot Earth blog last night pointed out that Science magazine (one of the two premier publication forums for academic science) has removed the paywall from a review by Godfray et al (a set of British biologists and development studies specialists) titled Food Security: The Challenge of Feeding 9 Billion People. This is a subject near to my heart, and I somehow missed it when it first came out online last month (I subscribe to Science but am inconsistent about reading it when it comes out - I mainly have a subscription so I can always go and search the archives and read any Science papers on some subject that I'm pursuing).  So I enthusiastically headed over to read it. It turns out the current issue of Science is devoted to food security, so I'll probably be blogging about it a lot.

The point of a scientific review is to provide a survey of some field of inquiry, with references to the important papers.  The best reviews provide the reader with a real synthesis of what the state of knowledge is currently, as well as an indication of where the frontiers of research currently lie - what things are most in need of further study (but where there is some hope of actually making progress).  The target reader of reviews is generally considered to be non-specialist scientists who need to understand the field, or graduate students just coming up to speed.  Actively working specialists in the field being reviewed are assumed to be up to speed on the literature and to already have their own perspective (though it can certainly be helpful to understand how someone else views the big picture).

Chinese Steel Production

Figures are from the World Steel Association.  I've been making this chart for the last couple of hours, and the longer I've gone on, the more my heart sinks.  One way or another, it's hard to see how this set of trends can end well.

Nigerian Oil Production: Analog for Iraq?

Indian Tribe Appeals to James Cameron for Help

Oil Companies May Book Iraq Reserves

There's a very interesting story leading the new Iraq Oil Report. Unfortunately, it's behind a paywall (though you can get a three week free trial). However, the story is interesting enough I'm going to mention it anyway. The gist is that the major oil companies with contracts in Iraq are planning to book the reserves:

Avatar and the Unabomber

I had said I would do a book review each weekend. However, I'm going to violate the pattern from the very beginning by starting with a movie review instead. But all is not lost: in explaining what I think about Avatar, I'm also going to have to work in discussion of half a dozen books that were formative in developing my worldview, and which are currently sitting in a pile on my desk, pulled off the shelf for the purpose.  However, this essay ended up going so long that I'm splitting it into a series which will probably run from now to sometime around Oscar night (March 7th).

Avatar, if you've been living under a rock, is the blockbuster movie written, directed, and produced by James Cameron (Titanic, Terminator, Aliens...) and released last month, which is now the highest grossing movie of all time (taking in $2.1 billion as of this writing - admittedly these comparisons are not adjusted for inflation, which is tricky to do right because of the 3-D).  It's becoming one of those must see events in which people are compelled to go a second and third time to take their friends, and just to see the movie again.

Here I'm going to assume the reader has seen the movie and I will try to analyze the strength of the feelings most of us have had to it - love it or hate it.  If you haven't seen it yet, just go do it, ok?  It's an amazing experience, and you're not going to be altogether culturally literate in future if you haven't seen it.

Mexican Oil Consumption

Crosschecking US Oil Demand Statistics

Dec 2009 Iraq Stability Report is Still Missing

The US Department of Defense is mandated to produce quarterly reports on the stability of Iraq to congress.  The reports are a very useful compendium of all kinds of data about the stability of the country.  According to the schedule of recent years, the last report would have been in Dec 2009.  It's now February 2010, and we are still stuck reading the September 2009 report (see the above screenshot which I just made now).  That's a very long quarter!

Where is the Dec 2009 report?  Inquiring minds would like to read it please.

Update: Gotta love Google. Within twenty minutes of posting this, it's the number four result on a Google search for "iraq stability report". Quite right too.

Saudi Aramco: Peak Oil is Nonsense (but we are at peak)

I'm a bit behind the curve in commenting on this, but did anyone else find this hilarious:

Khalid Al-Falih: The nonsense of peak oil is now hopefully behind us. Sees no difficulty in getting above 100mb/d. Saudi Arabia has 1/3 of its capacity (4mb/d) idled at the moment. Will attempt to continue its role as price stabiliser (although idling capacity is v. expensive). Brought 2mb/d capacity onstream last year.

Incremental barrels of onshore Saudi oil capacity now cost 6-7 times what they used to in 2000. Projects take 7-10 years to come on stream. Will make investment to maintain capacity, scoffs at IEA former predictions of 25mb/d Saudi oil, but will stay at about its current level. Has long list of projects to offset its decline in current fields.

Very confident that technological improvements will facilitate increased production.

Very pissed off at rhetoric about 'moving away from oil' or misleading notions of 'energy independence'. Energy security should be addressed through the framework of energy interdependence. Fossil fuels predominant for decades to come. Focus on efficiency, renewable deployment will be very slow.

So "nonsense of peak oil" but Saudi Arabia's oil production capacity "will stay at about its current level". What does he think we should call it when a country can't/won't raise it's oil production capacity any higher?  And if Saudi Arabia can't/won't raise it's capacity, who does he think has more oil than them?

This tends to confirm my impression that the peak oil question is now mainly about Iraq.

OPEC MOMR: Oil Demand Recovery Mainly in OECD

Rumaila to increase by 110kbd in July or August

The WSJ reported yesterday:

Crude oil production from the giant Rumaila oil field in southern Iraq is expected to increase by 110,000 barrels a day either in July or August, a senior Iraqi oil official said Monday.

Rumaila, Iraq's largest producing oil field, is currently producing an average of 1.07 million barrels a day, Abdul Mahdy al-Ameedi, director-general of the Iraqi Oil Ministry's Petroleum Contracts and Licensing Directorate, told Dow Jones Newswires

BP PLC (BP) and China National Petroleum Corp., known as CNPC, signed a 20-year technical service contract in November last year to develop the field, which holds oil reserves of 17 billion barrels.

"According to the plan submitted by the contractors, oil production from the field will increase by 10% in July or August, which means an additional 110,000 barrels a day," Ameedi said.

That would be a modest start, but a start...

Also, the deal for West Qurna Phase II is final.

Biofuels and Farm Prices

Iraqi Production Flat in December

Biofuels: the Biggest Supply Response to the 2000s Oil Shock

Real annual average oil price according to BP (top graph), and estimates of volumetric production/capacity for various oil alternatives (bottom).  1975-2008/9.  Note that these are total volumetric estimates: about half of tar sands production is sold as bitumen, not synfuel, and the energy density of the biofuel stream is only about 70% or so of that of crude oil.

State of the Blog, Jan 2010

Gas-to-Liquids Production Statistics

Shatha al Musawi

Who is this member of the Iraqi parliament who is suing to stop Dr al-Shahristani in his tracks?

The picture at right is from Troopscoop.  The New York Times covered her in 2005 (worth reading in full):

Tracking al-Shahristani Plan: Iraq Oil Contract Status

It seems worth keeping a regular eye on Dr al-Shahristani's is-he-crazy-or-a-genius plan to develop a sizeable fraction of Iraq's oil reserves all in parallel. Therefore, I've updated the table from my original post with the contract status in each case, and will maintain this periodically in future. Dates that were anticipated are in italics if either they are still in the future, or I haven't been able to confirm yet that they actually happened.

Overall, the final contract negotiation and signing process seems to have gone pretty smoothly and rapidly.

Failed State Index: China in Worsening Economic Decline

Coal-to-Liquids Production Statistics

Most Rapidly Deteriorating Nations

Tar Sands Production Graph

Trends in Failed State Count

There is Method to my Madness

The readership of the blog has been increasing very fast (admittedly from a miniscule base), and it occurs to me that from the perspective of a new reader it must appear that I am exploring a melange of apparently unrelated issues, and it's not clear what I think the connection is to "Risks to Global Civilization".

So let me lay out my hypothesis. I think it's possible that the leading risk to global civilization in the medium term is the following chain of events:

Royal Bank of Scotland on Iraq

According to the London Evening Standard

Royal Bank of Scotland warned that investors expecting the imminent return of China-fuelled oil price rises will be disappointed and that the supply side rather than demand will dominate the oil story in the coming decade.

RBS is still predicting a strong rebound in earnings from the titans of oil, thanks to moderately higher oil prices, however. But Iraq could change the picture entirely. The bank said: “We believe recent news flow from Iraq threatens a paradigm shift in oil markets that could cap oil price expectations and earnings forecasts in the medium term.”

Increases in output from Iraq are likely to be modest until 2013 leaving scope for shares in the sector to rise. But Iraq fears could begin building among investors this year, with the company strategy presentations approaching and the conclusion of Iraq's parliamentary elections in March likely to highlight the potential increase in oil supply.

Well, if you'd been reading this blog, you'd be well informed on both sets of issues :-)

I haven't fully made up my mind here. In particular, I don't yet understand why global oil production has been recovering so fast in the second half of 2009. However, it does seem to me that there is potential for both of the stories above to be true in sequence - there may be enough time for another oil price spike due to OPEC spare capacity getting used up, before an Iraq induced price fall if the al-Shahristani plan succeeds on something like the intended scale.

Where are Chinese Cars in their Oil Consumption?

Jan 2010 OPEC MOMR Out

Saudi Oil Production According to Various Estimates

A Consistency Check on Chinese Vehicle Growth

Iraq Contract Negotiations Proceeding Steadily

Scanning the Iraq news quickly this morning, it looks like the negotiations to finalize the contracts for the al-Shahristani plan are proceeding steadily.  Dow Jones reports:

A consortium led by Exxon Mobil Corp. (XOM) and Royal Dutch Shell PLC (RDSA) Monday accepted amendments made by the Iraqi government to a service contract to develop the West Qurna Phase 1 oil field in southern Iraq, a senior Iraqi oil ministry official said.

"They have accepted the changes, and we are finalizing the deal with them on Jan. 25," Abdul Mahdy al-Ameedi, head of the oil ministry's Petroleum Contracts and Licensing Directorate, told Dow Jones Newswires.

Exxon Mobil, the first U.S. company to gain access to Iraq's oil reserves, and Shell won the right to develop the oil field, which holds proven oil reserves of 8.7 billion barrels, following the country's historic first post-war oil-bidding round held in June 2009.

How Much has OECD Oil Demand Recovered?

The Elephant in the Room

The book reviews I did over the holidays (1, 2) were pretty fun to do, and seemed to be of value to some readers, so I've decided to make a book review a regular weekend feature of this blog.

I'll kick this off with a recent read of mine: The Elephant in the Room: Silence and Denial in Everyday Life by Eviator Zerubavel. I bought this because I think the general topic of denial is very pertinent to any discussion of global risks. When something is scary, people have an incentive to somehow avoid dealing with the facts, and a variety of creative strategies are available to them.

And in the alternative, if you commit yourself in some way to the idea that a particular risk is a big deal, (eg taking a public position, making career choices based on your assessment), you have a psychological incentive to deny evidence that maybe the problem is not so severe after all.

I think it's these dualing incentives that create the structure we so often see around major global risks - one side is busy either ignoring the problem, or if that is no longer working, minimizing it, attacking the integrity of the proponents, etc. Meanwhile, the other side is at risk of exaggerating the seriousness of the problem, ignoring countervailing evidence or important context and of course attacking the integrity of the deniers. Both sides are often sincerely convinced of their own rightness (though there certainly can be scope for cynicism and deliberate dishonesty as well, and both sides will be very quick to point to the evidence for this on the other side, and very slow to examine it on their own side).

New IEA Oil Market Report Out

World Bank Negative on Chinese Bubble

Some people are concerned about the possibility of an asset price bubble in China. I discovered that the World Bank does quarterly reports on China, and the most recent one (4MB PDF) is pretty interesting reading.  The bank does not believe there is a serious bubble:

China's Empty City

Via commenter Gunter, here is the incredible Al-Jazeera report on China's empty city.

Uncertainty Range for Iraqi Production

Urbanization Trends in China

Chinese Transportation Growth

Tariq Shafiq on Iraqi Oil Reserves

Another interesting reference on Iraqi Oil Reserves (besides the al-Mehaidi report I already mentioned) is Iraq Oil Development Policy Options: In Search Of Balance by Tariq Shafiq from December 2003 (ie about 9 months after the US invasion). According to the article,

Tariq Shafiq is a petroleum engineer who was Vice President and Executive Director of the Iraq National Oil Company (INOC). Recently he was the leading researcher and coordinator for a Petrolog & Associates study on Iraq’s exploration and production capacity, in a joint venture with the Centre for Global Energy Studies

Here are a few excerpts of interest

Hubbert's Curve in OilWorld

Jay Park on al-Shahristani Plan

If you are interested in this whole question of the ramp-up of Iraq's production, don't miss Jay Park's comment on my cross-post at The Oil Drum. According to his LinkedIn profile, Jay Park is Partner, and Chair, Global Resources Practice Group at Macleod Dixon LLP in Calgary.  He has been practicing law in the oil and gas area for three decades.

Here's a couple of excerpts of what he had to say (but read the whole thing and the follow-up discussion at the link above).

Iraqi Oil Reserves By Province

I found an interesting report prepared by Kamil al-Mehaidi for the Revenue Watch Institute. It appears to be as of 2006.  Here's what the Institute says of itself:

The Revenue Watch Institute is a non-profit policy institute and grantmaking organization that promotes the responsible management of oil, gas and mineral resources for the public good. With effective revenue management, citizen engagement and real government accountability, natural resource wealth can drive development and national growth. RWI provides the expertise, funding and technical assistance to help countries realize these benefits.

The Revenue Watch Institute is the only organization dedicated exclusively to addressing the special problems of oil, gas and mining-dependent countries—countries where poverty, conflict and corruption too often converge.

RWI is funded through the generous support of the Bill and Melinda Gates Foundation, the William and Flora Hewlett Foundation, and the Open Society Institute, along with several other donors. First launched in 2002 as the Revenue Watch Program of the Open Society Institute, it became an independent organization in June 2006.

Revenue Watch promotes transparent, accountable and effective management of natural resource wealth to help countries avoid the "resource curse." We take a comprehensive approach to improving governance and development across the entire value chain—from the organization of extractive production, revenue generation and revenue management, through the expenditure processes and development outcomes in resource rich countries.

The report has some very interesting detail level tables of reserves and production by province. I don't yet have an independent opinion about the accuracy of these or other Iraqi reserve figures, but thought the information was interesting and worth passing along. This is certainly a level of transparency we would love to have in Saudi Arabia.

Regional Security Perceptions in Iraq

Chinese rare earth exports

I don't know all that much about this issue, but Jamais Cascio has an interesting post up about China placing limits on exports of rare earths that could potentially cause problems for the rest of the world.  The graph is from the Wikipedia article, which is also worth reading.

How Long Do Mega-mega-projects Take?

The al-Shahrastani plan in Iraq raises a number of interesting questions. I think there are generally two directions that scepticism could go in. One is scepticism over the reserves and/or plateaus - is there really enough oil in Iraq and in the auctioned fields specifically, to produce 12mbd at any point in the future?
The second set of questions is around the timing. Is it really realistic that this can be done in six or seven years as the oil minister is claiming?

To me, the second set of questions seems the more urgent to answer. While the exact amount of oil in Iraq is highly debatable, there's not much doubt that there's a heck of a lot of it.

One way to think about the timing issues is that each of these field contracts is basically a huge megaproject. What al-Shahrastani is proposing, and what Big Oil is signing up to deliver, is a huge set of megaprojects, conducted in parallel, in a country that was a war zone until fairly recently. The potential for chaos is considerable. The potential for some folks to make an awful lot of money is also considerable.

Does al-Shahristani Really Think Six Years?

Many people have reacted to Monday's post with disbelief that such an enormous increase in oil production could happen in only six years. I share that scepticism! However, I wanted to document that Dr al-Shahristani really has been saying this. Here's a sampling of news coverage on the point.

The Water Constraint In Iraq

I emailed a few people with links to yesterday's Iraq post. One person who responded (and gave me permission to post his response) was Matt Simmons, who wrote:

At last fall’s Oil and Money conference, the EIG advisory board discussed BP’s just announced service contract. It was the opinion of both Sadad al-Husseini and Issham Chalabi, former Iraq Oil Minister, that the likelihood of these companies ramping up these oil targets is remote at best and if they happen, it will be like Cantarell, doomed for over production and subsequent rapid collapse. A big problem never addressed is the lack of quality water from the shrinking Iraq rivers to due water injection for creating artificial reservoir pressure.

Hope this helps shed some truth into these great hypes.

The other points I'll respond to at some future time, but the water issue I hadn't thought about at all, and seemed quite interesting and important.  Matt is alluding to the fact that it's common practice to inject water into oilfields to help drive the oil through the rock to the producing wells, and this water has to come from somewhere.

Iraq Could Delay Peak Oil a Decade

Historical annual Iraqi oil production, together with linear implementation of Iraqi capacity growth plan announced in 2009. See text for details

Global oil production recovering at 3.7mbd/year

Happy 2010

Best wishes to all for a great 2010!

The picture shows a blue moon* rising over Half Dome, in Yosemite, where we just spent Xmas break.