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Preview: The Oil Drum: Europe - Analysis and Discussion of the European Energy Gap and Peak Oil

The Oil Drum: Europe - Analysis and Discussion of the European Energy Gap and Peak Oil


Global Oil Supplies as Reported by EIA’s International Petroleum Monthly for November 2010

Fri, 12 Nov 2010 14:21:56 +0000

My post is mainly an update to Global Oil Supplies as Reported by EIA's International Petroleum Monthly for September 2010, based on data which the EIA reported in the past few days. I will also briefly present updated information regarding OECD and Non OECD oil supplies/consumption. The stacked columns show crude oil and condensates supplies split among OPEC, Russia and ROW (Rest Of World which also includes OECD), from January 2001 through August 2010. The development in the average monthly oil price is plotted on the left hand y-axis. Note that world oil production has been on a plateau, from late 2004 to the present, with a small dip when prices dropped in late 2008 to early 2009. This graph considers crude and condensate only, excluding natural gas liquids and other forms of liquid energy, such as biofuels. DISCLAIMER: The author holds no positions in the oil/energy market that may be affected by the content of this post. NOTE: Scaling varies from chart to chart and some charts are not zero scaled. Labels indicate whether graphs are on an "all liquids" or "crude and condensate" basis. Figure 01: The stacked columns in the diagram above show development in global supplies of crude oil and condensate, NGL and other liquid energy from January 2001 through August 2010. The development in the average monthly oil price is plotted on the left hand y-axis. NOTE: Diagrams based upon EIA data may be subject to future revisions. Figure 02: The stacked columns shows crude oil and condensates supplies split among OPEC, Russia and ROW (Rest Of World; which also includes OECD), from January 2001 and as of August 2010. The development in the average monthly oil price is plotted on the left hand y-axis. Over the period covered by the graph (2001 to present), growth in Non OPEC supplies have primarily come from Russia. Oil supplies from the "Rest of World" (ROW) have not grown. The long bumpy plateau from late 2004 to the present illustrates that huge swings in oil prices in recent years have had only a small impact on crude oil and condensate supplies. EIA in their STEO (Short Term Energy Outlook) for November 2010 projected a slight decline in OECD and Russian petroleum supplies from 2010 to 2011, but a smaller decline than in the September STEO had shown. Under most circumstances, it could be expected that most of these declines would be offset by growth in OPEC supplies. Figure 03: The diagram above shows development in OECD consumption of petroleum products between January 1990 and June 2010 together with the development in the oil price. In the recent months, petroleum consumption within OECD has seen some growth and this coincides with the recent growth in the oil price. Figure 04: The diagram shows development in net oil imports for OECD from January 2000 through June 2010. This diagram shows that the recent oil price growth happened as OECD again started increasing oil imports. This is one of the indicators suggesting that the oil price now has strong support based on fundamentals. Figure 05: The above diagram shows implied demand for liquid energy from Non OECD countries from January 2001 through June 2010. (I describe it as implied demand as the diagram shows the difference between total global supplies of liquid energy and OECD supplies (production + net imports)). Recently, demand for petroleum products from Non OECD seems to have leveled out as illustrated by the 3 MMA (3 Month Moving Average). (I use the 3MMA both to more easily identify seasonal variations and also to act as a “pilot” for trends over several months.) Figure 06: The stacked columns show the split between OECD and Non OECD supplies of liquid energy from January 2001 through June 2010. The average monthly oil price is also plotted on the left hand y-axis. If we start with Figure 05 there clearly was a strong growth in demand from Non OECD starting early in 2009. From the diagram it shows the price grew with the demand growth from Non OECD. OECD demand was tanking at the time. To me this is a strong indicator that price in this period[...]

How to Get a Pipeline Built - Revisited

Sat, 06 Nov 2010 14:50:40 +0000

This is a post that was originally written in 2007. There are regularly stories in the media or in the blogosphere about various pipeline projects that are announced with much publicity, and are seen to have major strategic consequences, or conversely about projects that are more discreet but are seen as the "real" justification for various military or diplomatic acts. For instance, the announcement last month of an agreement between Russia and several central Asian republics about a new pipeline was widely interpreted as a major move against European energy security. Similarly, the war in Afghanistan has often been blamed on a long mooted Turkmenistan-Afghanistan-Pakistan pipeline. These analyses (which are absurd to anyone with a basic knowledge of the oil&gas industry) completely ignore the dynamics of what it takes to actually get a pipeline deal done, and what it means for relations between the parties involved. Therefore they fail to understand the significance (or lack thereof) of announcements by energy companies or governments and wrongly interpret the geopolitical implications of both pipelines, and announcements of pipelines. So, in order to help oildrummers better interpret pipeline news, here's a primer on why and how pipelines get built - which essentially means how they get financed. In order to understand pipelines, it's easiest to cut the task into smaller pieces, and see how these are required to be put in place and fit together. But even before that, one fundamental question to ask whenever an article or anyone talks about a pipeline is: oil, or gas? The two are completely separate businesses, and are totally independent one from the other, but they are very often mixed up by uninformed commentators. An article that includes a map that does not separate and identify the two networks, or that talks blithely about pipelines between two countries without identifying what resource is actually transported can safely be ignored as fundamentally clueless. Beyond that first step, a cursory look at what is to be linked by any pipeline can allow to further eliminate many stories. For instance, the article linked above about the Afghanistan pipeline talks throughout about oil, when the pipeline that was discussed for a while was a gas pipeline - for the simple reason that Afghanistan's neighbor, Turkmenistan, has gas but little oil, and any oil pipeline would need to come from even further afar and involve more countries. From now on, I will only be discussing gas pipelines. The logic is mostly similar for oil, if a bit simpler (I'll comment on the differences where relevant). With this point clarified let us address the components of a pipeline: A supply of gas A supplier of gas A market for gas A purchaser of gas An entity operating the pipeline Government authorisations for pipelines crossing their territory -for each country A price for gas transport An entity (or more) building the pipeline An entity (or more) paying the pipeline The fundamental point is that all of the relevant components and parties need to be present at the exact same time for the project to exist. And by "being present", I mean "irrevocably making binding commitments, representing large sums of money." And it is a surprisingly difficult job to bring all the parties to the table in that way at the right moment - which is why fewer pipelines than one would expect are built, and why few entities are actually able to pull it off. And, as we will see, being able to pay for the pipeline is not quite enough. A pipeline concept will usually come to life via 3 circumstances: (i) when a large supply of gas needs to be brought to the market, (ii) when a large enough market/customer not or insufficiently supplied needs gas, and (iii) when a large supply of gas and a large market are close enough that it might be worth linking them. But that's just a concept. At that point, economics have not been examined, and parties even less. The concept may be floated by analysts, examined by energy companies, pu[...]

A Primer on Reserve Growth - part 3 of 3 - Revisited

Tue, 02 Nov 2010 14:20:32 +0000

This post was originally written by Rembrandt in 2006. Will 730 billion barrels be added to the reserve pool from reserve growth between 1996 and 2025 as estimated by the United States Geological Survey? This post is the third part in a three piece series about the phenomenon of reserve growth in found oil fields. Insight in future reserve growth, often attributed to technological advancement, is crucial in determining the peak of conventional oil production. Parts 1 and 2 can be found here and here. What we learned in part 2 of this series is that the data with respect to reserve growth is utterly confusing. Nonetheless, we need an answer to the question what the future perspectives are for reserve growth in order to; 1) improve forecasting the peak in conventional oil production; 2) Increase the understanding of the future role of technology in the oil industry. The United States Geological Survey has so far been the only institute which has published an estimate for future reserve growth. In their World Petroleum Assessment from the year 2000 they estimated that reserves would grow with 730 billion barrels between 1996 and 2025.(612 billion barrels for conventional oil, 118 billion barrels for Natural Gas Liquids). By estimating past reserve growth in the US lower 48 a reserve growth algorithm was established. This algorithm of which the curve is shown below was then applied to the entire world. Delivering an estimate of 730 billion barrels. Chart 1 - Source: USGS, Verma The problem with this method is the way how crude oil reserves are reported in the US which has been described in detail in part 2. Because of the practice of reporting only proven reserves, the amount of reserve growth is very high in the US when compared to other regions. In addition several heavy/extra heavy oil fields such as the kern river oil field are included in the assessment, which showed huge reserve growth due to the advancement in steam technology necessary to dilute the oil to produce it in the middle of the 20th century. It is erroneous to apply reserve growth in such heavy/extra heavy oil fields with medium and light crude oil fields. Thirdly applying onshore reserve growth to offshore and deepsea fields is certainly not an approach that gives a correct estimate. Based on these three issues, the figures presented by the USGS do not seem to have much value. The method used likely provides figures too inacurrate to be relied upon. However, the USGS authors (Albrandt et al) have acknowledge a part of the problems outlined: "There are several reasons why a reserve-growth function that is based on historical trends for oil and gas fields in the Lower 48 states could Overestimate world potential reserve growth: Engineering criteria for reporting reserves of world oil and gas fields might, in general, be less restrictive than those for the United States, tending to increase known reserves and decrease the potential for reserve growth. Reported reserves might be deliberatly overstated in some countries, reducing the potential for future reserve growth. Large world oil and gas fields might tend to have more substantial development than U.S. fields prior to release of initial field-size estimates, leading to more accurate initial reserves estimates and reducing the potential for future reserve growth.(USGS WPA 2000, chapter AR)" To see if these critical remarks on their study held any value the authors of the USGS study attempted to apply their function for reserve growth, as shown in graph 1, to other oil producing regions in the world. Several latter publications were published with respect to reserve growth in Volga-Ural (Verma et al., 2000), West Siberian Basin (Verma and Ulmishek 2003), the North Sea (Klett and Guatier 2003, 2005), the Middle East (Verma et al., 2004) and Canada (Beliveau, 2003; Verma and Henry, 2004). Their conclusion was that the reserve growth curve is indeed applicable to the entire world, given reserve growth patterns observed in these other regions. The one a[...]

A Primer on Reserve Growth - part 2 of 3

Sun, 24 Oct 2010 14:48:09 +0000

This post was originally written by Rembrandt in 2006. This post is the second part in a three piece series about the phenomenon of reserve growth in already found oil fields. Insight in future reserve growth, which is often attributed to advancement in technology, is crucial in determining the peak of conventional oil production. For those not familiar with reserve growth it would be best to read part 1 first: 1. General introduction to reserve growth, what can we learn from the worldwide recovery factor of conventional oil fields? In this second part various scientific studies about reserve growth in the United States, the North Sea and Russia are analysed. The third part will look at the reliability of the estimate from the United States Geological Survey in their World Petroleum Assessment 2000 with respect to future reserve growth. What can we tell from reserve growth in the United States? The situation in the United States is quite unique in the world. The country shows the largest amount of reserve growth over time in the entire world. Soveral fields have grown ten to twenty times their original size. The cause of this huge resreve growth is the reporting practice of operators, which report proven reserves only: "In principle, US companies are expected to follow industry guidelines that define Proved (described as having "reasonable certainty" in the SEC rules) as having a 90% probability of occurrence, but in practice it appears that their estimates come closer to the Mode value. For the last 20 years, the amount of positive revisions reported by the US Department of Energy were double the negative values, meaning that the original estimates had a probability of around 66%. That is close to the Mode value, which in fact represents what the engineers consider the most likely. The huge "field growth" of the United States is clearly a reporting phenomenon, as only 6% of the additions over the past twenty years have come from new discoveries. The rest-of-the-world reports Proved & Probable estimates, because the industry has a greater need to know what the fields will actually deliver when they plan costly offshore facilities or pipelines to remote areas. It is worth discussing this critical issue in greater detail. The SEC rules were formulated long ago when most US production was onshore, and required that reserves for financial purposes were restricted to those being drained by a producing well.. Such onshore fields could be placed on production as soon as the first well was drilled, meaning that the reserves grew as the field was drilled up over time, in some cases tapping subsidiary reservoirs or new pools at greater or lesser depth or in the immediate vicinity. In some cases, infill drilling was also undertaken changing the reserve estimates. In the rest of the world, the reserves of a field are normally reported when production starts, the earlier estimates being held confidential by the company. Host governments take an interest to ensure that good oilfield practices are used to maximize recovery, and in some cases revenue. The companies accordingly have to compromise in their reporting between their general desire to under-report and the demands of the host government. For these reasons, more valid estimates are reported, although still often as much as half what the field is eventually found to deliver."(J. Laherrère, 2000) Because US operators are obliged to report very conservative proven reserves, a huge amount of reserve growth occurs. This makes it very difficult to estimate whether reserve growth is due to technological advancement or not. It is important to know that the Energy Information Administration makes an excellent division between added contributions from new discoveries, field extensions, new reservoirs discovered in old fields and changes in the reserve estimates of a given oil field. This makes it possible to exclude the contribution from added Oil Initially in Place in estimating Reserve Growth of t[...]

A Primer on Reserve Growth - part 1 of 3 (Revisited)

Sat, 23 Oct 2010 14:48:40 +0000

This is a post by Rembrandt that was originally published in 2006. The difference in vision between so called "optimists" and pessimists" with respect to the peak in world oil production is often caused by a view of future technological development in the oil industry. This development influences both conventional and unconventional oil production. Only a part of the oil in an oil field can be produced. It is claimed by oil companies and various institutes that technological advancement will increase the recoverable amount, thereby postponing the peak in conventional oil for several decades. In essence this means that the amount of recoverable reserve increases over time due to changes in technology, economy, insights. But also expected recoverable reserves increase over time due to past underestimates. This is why the term is called "reserve growth". The only institute that has done exensive studies with respect to the growth of recoverable reserves over time is the United States Geological Survey. In their World Petroleum Assessment 2000, the USGS claims that between 1996 and 2025 worldwide conventional oil reserves will increase by 730 billion barrels due to reserve growth.A large amount of forecasting institutes such as the International Energy Agency and Energy Information Administration take the figure of 730 billion barrels from the USGS for granted. In addition to forecasting institutes, oil companies often claim that reserve growth is the key to postponing the worldwide peak of conventional oil production. The question is to what extent the USGS prediction can be relied upon.Two weeks ago I posted a piece about the discovery forecast of the USGS. In this second post with respect to the USGS World Petroleum Assesment 2000 we take a first glance at what reserve growth really is and what we can learn from studying the worldwide recovery factor of conventional oil fields Because the topic is so complex, I have decided to split this keypost into three parts: General introduction to reserve growth, what can we learn from the worldwide recovery factor of conventional oil fields? What do scientific studies say about reserve growth in the United States, the North Sea and Russia? To what extent does the USGS study give a reliable figure for future reserve growth? This is the first post of this three part series. Lets start with a simple definition of reserve growth Reserve growth is an increase in the estimated recoverable oil reserves from the moment that an oil field is discovered and/or starts producing until the end of the fields life. In order to study reserve growth it is necessary to look at the change in estimates for recoverable reserves over time in the life of an oil field, from initial production until the time at which production seizes. As an example of reserve growth the American oilfield Prudhoe Bay is shown below. Prudhoe bay is one of the largest fields in the world. Production started in 1975. In 1977 it was forecasted by reservoir engineers that ultimately, 9.4 billion barrels would be produced from the field. By 2005 this estimate had been increased to 13.5 billion barrels. Estimated reserves in Prudhoe Bay have so far "grown" with 4.1 billion barrels over time. Of course we won't know until Prudhoe Bay stops producing whether this will actually be the case. Chart 1 - source: presentation from Chris Skrebowski at ASPO-V The causes for reserve growth can be classified into three main groups: 1) An Increase in the Oil initially in place (OIIP), for instance by the discovery of an extension to the field or the addition of a satellite (small oil field nearby). This addition is sometimes counted as a discovery and sometimes as reserve growth. The addition of Oil Initially In Place usually does not change the recovery factor. Chart 2 - Reserve growth by increasing OIIP - Source: Attanasi & Coburn. 2) An increase in the reserves of the field due to bad and inconsistent reporting pract[...]

Cost of energy imports to UK trade balance

Thu, 21 Oct 2010 14:40:21 +0000

Over the years I have drawn attention to concerns about the impact that peak oil (1999) and gas (2000) in the UK North Sea would have on UK trade balance. In the space of a decade, the UK has gone from oil and gas exporter to importer. In articles such as UK Energy Security (July 2007) and A State of Emergency (June 2008) I speculated about the financial cost and in today's article I put real numbers on the cost of UK energy imports. Figure 1 Data compiled from tables published by the UK Office for National Statistics. The cause of the UK's energy woes is summed up in Figure 2 that shows the history of UK primary energy production (excluding whales) since 1830. In 1981 the UK became a net primary energy exporter and more or less remained so until 2004. During that period (of low energy prices), the UK exported oil and gas (not every year) to the benefit of the trade balance and the financial well being of the nation. Since 2004 the bounty from North Sea oil and gas exports has been replaced by the burden of imports and the main purpose of this article is to draw attention to the magnitude of this burden and to consider the most appropriate policy responses. Figure 2 UK primary energy production from 1830. Coal data from Dave Rutledge (and references therein), rest from the 2010 BP statistical review of world energy. In Figure 1 the trends are dominated by oil & gas, food and coal. I have included food (fish and fertlizer) since they are fuel, primary energy products, and it is most relevant to consider the trend in food given the UK and EUs commitment to promoting and subsidising the production of bio fuel. Fish, fertilizer, electricity and uranium are all small bit players in the big picture, but all are worthy of inclusion nonetheless. The monetary trends are controlled by volume and price. Price is very important, and, for example, 1998 just preceded the peaks in UK oil (1999) and gas (2000) production, but exports yielded low value owing to extreme weak oil prices that were temporarily below $10 that year (Figure 1). The swing from exports to imports from 2004 to 2005 is clearly seen in financial terms. And for every year that passes this problem is set to get progressively worse as UK oil and gas production continues to fall (Figure 2) although future price is difficult to predict. Figure 3 The swing from UK energy surplus (negative numbers) to energy deficit (positive numbers). The scale of the problem is best seen in Figure 3 showing that in the year 2000 energy products contributed net 6% to trade surplus but by 2008 (the year of the spike) that had swollen to a 19% deficit, a swing of 25% in 8 years. Peering into the future is far from straight forward. It is relatively straight forward to envisage the plunge in North Sea oil and gas production continuing for the foreseeable future, but much more difficult to understand how demand and price will evolve. The main conclusion I can draw here is that the UK cannot afford to pay for rising energy imports and higher prices simultaneously and so something will have to give, either locally or globally. Given that a large number of energy importing OECD nations face similar problems, it seems likely that the solution will be a global one and that energy prices must fall to make them more affordable and the mechanism most likely to bring this about is a global reduction in demand for energy. The average oil price during 2008 was $97 compared with $62 in 2009. The average price so far this year is well above $62. The oil & gas deficit for Q1+Q2 of 2009 was £1.79 billion and this has grown to £2.55 billion for the first two quarters of 2010, a deterioration of 42%. With food and coal prices both rising the trade deficit for 2010 is set to become a whole lot worse, despite lingering recession. Policy response Figures 1 and 2 provides some insight to what government should be doing to resolve these structural problems in the U[...]

Global Resource Depletion

Wed, 20 Oct 2010 14:40:00 +0000

André Diederen's recent book on resource depletion I have been thinking, sometimes, that I could reserve a shelf of my library for those books which have that elusive quality that I could call "modern wisdom". Books that go beyond the buzz of the media news, the shallowness of politicians' speech, the hyper-specialization of technical texts. That shelf would contain, first of all, "The Limits to Growth" by Meadows and others; then the books by Jared Diamond, James Lovelock, Konrad Lorenz, Richard Dawkins, Peter Ward and several others that have affected the way I see the world. I think I'll never set up such a shelf, I have too many books and too few shelves; many are packed full with three rows of books. But, if I ever were to put these books together, I think that the recent book by André Diederen "Global Resource Depletion" would make a nice addition to the lot. The subject of resource depletion, of course, is well known to readers of "The Oil Drum". So well known that it is difficult to think of a book that says something new. Diederen, indeed, succeeds in the task not so much in reason of the details on the availability of mineral commodities that he provides, but for the innovative way he describes our relation to the subject. In other words, Diederen's book is not a boring list of data; it is a lively discussion on how to deal with the implications of these data. It is a book on the future and how we can prepare for it. To give you some idea of the flavor of the book, just a quote: (p. 43) "... it isn't enough to have large absolute quantities ("the Earth's crust is so big") and to have all the technology in place. (p. 33) ... we have plenty of water in the Mediterranean or Atlantic Ocean and we have ample proven technologies to desalinate and pipe the water to the desert, so, why isn't the Sahara desert green yet?" This is, of course, the crucial point of resource depletion: what counts is cost, not amounts (I plan to use this example in my next talk!). Diederen is an unconventional thinker and he goes deeply into matters that, in some circles would be thought to be unspeakable; for instance (p. 41) "I consider it quite likely that we will see the following management style trend taking shape within the next years: a military inspired no-nonsense approach, adapted to the pressing needs of our civil society. There are various factors which may lead to such a development: the need for triage-like decision making and subsequent actions as events unfold, the increasing public desire for strong leadership (amplified by tje current general lack thereof) and the unambiguous nature of the military command structure. .. As the saying goes, if you have to steer through turbulence, you should sail faster than the current. Governance based on a more autocratic leadership style has a definite advantage in this respect" That is a point that I myself have been examining when thinking about methods of "steering the elephant." If you have a large and complex system to control, multiple nested feedback loops will make it impossible to govern it unless you establish a hierarchy that dampens the negative feedbacks. It is something that will necessarily look like a military command structure. This is the structure that we use to deal with local emergencies: from fires to floods. If we are to deal with a global emergency, in either climate change or resource depletion (or both), it is very likely that we'll adopt this kind of structure - or at least we'll try to. The basic message of Diederen's book, in any case, is that in the future we'll have to face deep changes in the way we exploit and use minerals. We'll have to be much more careful, use less and recycle more. Diederen classifies metals in three categories. One is the "elements of hope," those which are abundant in the earth's crust: aluminum, iron, silicon and others. Then, there [...]

Take up the 1 litre 100 km challenge and be prepared for peak oil

Mon, 11 Oct 2010 14:35:35 +0000

This is a guest post by Jean-Luc Wingert from ASPO-France. Jean-Luc is a sustainability consultant and author of the book "La vie après le pétrole". He is presently the president of the Association Challenge 1 litre 100km. Anyone interested in “peak oil” or oil future scarcity knows that transportation is soon going to be a difficult issue. This is one of the main motivations for launching the Challenge 1 litre 100 kilometer contest. It is a car race where participants will have only 1 litre of petrol to travel 100 kilometers. Of course, trying to take up the challenge with your regular car doesn’t make sense. It will be necessary to build a vehicle especially for this contest. The Challenge 1 litre 100 km is open to students aged 18 or above from any country of the world. The small car they are required to build must have two seats and space for luggage. We would like this vehicle to herald an efficient mobility option for the near future. Therefore we encourage interdisciplinary entries, with the involvement of graphic designers and innovative materials. The idea is not to have a vehicle built for “engineers only”--rather a nice car-of-the-future-after-oil. We have chosen a race circuit that is quite demanding in braking and acceleration, but the requirements should leave room for engineering creativity, notably around hybrid technology. If we do encourage creativity, for safety reasons, we are setting up some boundaries in the Challenge’s official rules. A recently-published confidential report by a German military think-tank very seriously considers the possibility that peak oil will be around 2010. The permanent supply crisis they describe and its consequences seem quite dramatic. The people who have followed ASPO’s (Association for the Study of Peak Oil and gas) work for many years will not be surprised. The idea of the Challenge 1 litre 100 km is to address a serious issue with a touch of fun. If the challenge is ambitious and departs from old ways of doing things, it’s also because the situation demands it. There is probably an important market for these two seat-cars. First, for economic reasons, the crisis is unfortunately here to last. Without this crisis, oil prices would be skyrocketing as production limits close in. We are now seeing the first electric cars being introduced, but they are quite expensive. For the young middle-class couple that chose to have their house built 35 km away from the city (where land price is affordable), the problem is knowing what type of vehicle to buy and use. Available public transport is likely to be poor because of a low population density. The evolution of transportation will probably be in the direction of specialisation by usage. Having the same car to drive alone to work all year around and twice a year with your entire family on holidays is not the best for energy efficiency. The solution will be to rent a vehicle for extraordinary use, so renting a big car twice a year and owning a small one seems to be a good option. Of course, reality is more complex, but the idea is that we need vehicles that fit the needs they satisfy on an everyday basis. In the future mobility landscape, public transport is likely to play an important role, but it requires infrastructure that takes a long time to build. So does the setting up of supply systems for electric cars on a large scale. The Challenge 1 litre 100 km is a platform for stimulating innovation in the field of extremely energy efficient vehicles. The challenge of finding new solutions to old problems is an opportunity to invent new mechanisms with 21st century technology, and to register new patents. For example, the motorcycle maker Piaggio patented more than 20 inventions to develop the MP3, its new three wheel vehicle. The technical rules of the challenge give room for technical creativity: the vehicle’s weight mu[...]

Good news from Italy: the Kitegen is in motion

Mon, 04 Oct 2010 13:23:44 +0000

Massimo Ippolito, president of KiteGen Research (KGR) s.r.l., poses in front of parts of the prototype being built near Torino, in Italy. The Kitegen is an ambitious and innovative research project that promises high efficiency in energy production from high altitude winds. I am just back from a trip to Piedmont, Northern Italy, where I have visited the construction site of the new prototype of the Kitegen; the high altitude wind power (or "Airborne Wind Energy", AWE) system being developed by Kitegen Research s.r.l., headed by Massimo Ippolito. I can bring good news to you: the kitegen project is in motion. After a first, reduced scale prototype, built and tested two years ago, now a full size system is being completed. The Kitegen is a very innovative technology based on the idea of capturing the abundant energy of high altitude winds. It uses a kite that is launched from a ground based structure that contains all the machinery and control systems. The kite is expected to fly at altitudes up to 2000 meters and to provide energy by pulling on a set of cables that act on a power generator. The promise of the kitegen is remarkable; preliminary calculations indicate an EROEI better than anything that can be obtained by traditional wind or solar technologies. However, one thing is paper, another is the reality of putting together a machine that had never been built before. It is an incredible challenge that Massimo Ippolito has taken onto himself and that he is succeeding in overcoming; step by step. The challenges facing new technologies are not just technical. The main problems are with bureaucracy and with the general attitude of a society which is becoming more and more hostile to innovation. This attitude has forced Kitegen Research to abandon the initial plans of building the first prototype near the town of Berzano, not far from Torino, in Italy. A small group of local residents has been extremely active in harassing the project; to the point that, eventually, the company had to choose another site. That has generated almost one year of delay; since everything had to be moved to the new site and a new set of permits had to be obtained. However, now everything is ready with the new site: all the parts needed for the prototype have been manufactured and the permits are all available. The construction of the new prototype has already started, as you can see in the picture below that shows the structure of the dome that will house all the ground based parts of the system. In the picture, you can also see the modest me (Ugo Bardi), left in the picture, together with Mr. Mario Marchitti of Kitegen Research. The technology that has been developed for the kitegen is impressive: it is an extremely modern approach which is based on keeping costs low by using simple and inexpensive materials. For the structural parts on the ground, the system uses only aluminium, steel and carbon fiber. Dyneema (high strength polyethylene) is used for the cables that control the kite. The power generator is based on neodymium-boron-iron magnets. The key element of the system is its sophisticated software that controls everything and that makes it possible to use a relatively simple design. This is a typical characteristic of modern robotics and the kitegen is, actually, a robot that controls the system in real time on the basis of an array of sensors; some located on the kite, some on the ground. So, things are moving on with the kitegen. In a couple of months, the system should be completely assembled; then it will be time to start flying tests. Links to more information The site of Kitegen Research High altitude wind power: an era of abundance? by Ugo Bardi High altitude wind power II by Ugo Bardi The site of the AWE community Disclaimer: I have inves[...]

The oil 'peak' has been reached

Wed, 29 Sep 2010 13:28:35 +0000

Jorge Nascimento Rodrigues is perhaps the only journalist in Portugal aware of the issue of oil scarcity. During the past few years, I have had the opportunity to collaborate with him several times, bringing the Peak Oil message to a larger audience on an almost regular basis. Last weekend, the largest weekly newspaper in Portugal (and among the diaspora), Expresso, had another article in its Economy section, penned by Jorge with a few thoughts on present events and trends. Samuel Foucher kindly provided an updated version of one of his graphs to illustrate the article.   Below the fold you will find an English translation of this article. This is an improved version of a log at the EuropeanTribune. The alarm has sounded: the scarcity of oil will affect everyone, say analysts 'Peak' oil is no longer debatable. The projections for the year, the five-year period, or the decade when global oil production would start declining "are now a part of history", says Luís de Sousa, member of ASPO-Portugal and contributor to the blog "The Oil Drum", talking to the Expresso. "The period of peak is already being lived. Predicting it is no longer relevant", he adds. According to this specialist, the vast majority of the important mathematical and accounting models of oil production used by entities independent from the oil industry all point to a similar time period when oil production reaches a maximum and begins to decline. This is a period of about a decade centred between 2008 and 2010, and the maximum oil produced is between 78 and 85 million barrels daily. Luís de Sousa emphasizes that since 2005 world liquids production has been bound between 80 and 82 million barrels per day, clearly in agreement with those models. This plateau "has been sustained by the increase of natural gas liquids, with pure crude [petroleum] in decline since 2005". Recently, the 'peak' has returned to the spotlight because of a secret report by the Future Studies group of the German Centre for the Armed Forces Transformation, a military think tank working for the Berlin Ministry of Defence. The study was published by "Der Spiegel", causing considerable concern by those less used to the issue and its geopolitical implications. The Diplomacy of Oil The report has an alarming tone: "scarcity shall affect everyone" and "oil price increases pose a systemic risk, not only for transport systems, but also for all other systems". And left a message: "It is vital to secure access to oil", for in a fairly short time-frame, between now and 2040, we may see "a change in the international security panorama with new risks - like that of fuel transport - and new actors in a possible conflict around the distribution of an increasingly scarce resource". The German report concludes that "oil exports available through the market of supply and demand will shrink" and that need for oil diplomacy will sky-rocket because of oil's geo-politization. The increasing scarcity referred by the Germans is associated with "an almost unchanging level of oil production, fixed within a band that began during 2004," emphasizes Luís de Sousa. This variation "band" is called by many specialists, with some humour, an "undulating plateau".  Meaning, in this plateau, production variations oscillate, like a wave, from year to year, independent of price variations. The present crisis, whose end continues to be debated, "will likely prolong this undulating period, flattening what otherwise would have been a prominent peak". More important than the peak itself or the production plateau is the volume of oil available on the international market, or in other words, what is available for export beyond what is consumed by those producing the oil. "Maximum exports were reached in 2005, at an amount equal to 44 million barrels a day [...]