Archive for the month “October, 2014”

Report: Drilling Deeper

A reality check on U.S. Government forecasts for a lasting tight oil & shale gas boom

David Hughes, Post Carbon Institute

Drilling Deeper reviews the twelve shale plays that account for 82% of the tight oil production and 88% of the shale gas production in the U.S. Department of Energy’s Energy Information Administration (EIA) reference case forecasts through 2040. It utilizes all available production data for the plays analyzed, and assesses historical production, well- and field-decline rates, available drilling locations, and well-quality trends for each play, as well as counties within plays. Projections of future production rates are then made based on forecast drilling rates (and, by implication, capital expenditures). Tight oil (shale oil) and shale gas production is found to be unsustainable in the medium- and longer-term at the rates forecast by the EIA, which are extremely optimistic.

This report finds that tight oil production from major plays will peak before 2020. Barring major new discoveries on the scale of the Bakken or Eagle Ford, production will be far below the EIA’s forecast by 2040. Tight oil production from the two top plays, the Bakken and Eagle Ford, will underperform the EIA’s reference case oil recovery by 28% from 2013 to 2040, and more of this production will be front-loaded than the EIA estimates. By 2040, production rates from the Bakken and Eagle Ford will be less than a tenth of that projected by the EIA. Tight oil production forecast by the EIA from plays other than the Bakken and Eagle Ford is in most cases highly optimistic and unlikely to be realized at the medium- and long-term rates projected.

Shale gas production from the top seven plays will also likely peak before 2020. Barring major new discoveries on the scale of the Marcellus, production will be far below the EIA’s forecast by 2040. Shale gas production from the top seven plays will underperform the EIA’s reference case forecast by 39% from 2014 to 2040, and more of this production will be front-loaded than the EIA estimates. By 2040, production rates from these plays will be about one-third that of the EIA forecast. Production from shale gas plays other than the top seven will need to be four times that estimated by the EIA in order to meet its reference case forecast.

Over the short term, U.S. production of both shale gas and tight oil is projected to be robust-but a thorough review of production data from the major plays indicates that this will not be sustainable in the long term. These findings have clear implications for medium and long term supply, and hence current domestic and foreign policy discussions, which generally assume decades of U.S. oil and gas abundance.

For more details and to download the report, click here.

Peak Shit! How Oil Spilled the Economy – 3

Part 3 – Economic Shock and Emotional Disorder

Stanley Ravi, POI Member

In the year 2007, just before the economic recession hit the world, the price of tea, ginger and pepper hit unexpected highs. I had in-laws in Gudalur, near Ooty, where these crops are widely cultivated. Once the prices hit the high watermark, common folk there went on a spending spree that was unimaginable before.

Farmers would travel in the back of trucks with their crop and come back driving brand new SUVs. Scorpios were like toys in those days. In no time, the face of Gudalur had changed completely. And then came the crash. Read more…

News update

U.S. Streaks Past Saudi Arabia as World’s Largest Oil Producer
Breitbart News
The United States surpassed all other countries this year with daily crude oil and other petroleum liquids reaching 11 million barrels per day (mbd). Since the beginning of 2011, U.S. liquid fuels grew by more than 4 mbd, including 3 mbd of crude oil. The growth of U.S. production has been the “main factor counterbalancing the supply disruptions on the global oil market” and “has contributed to a decrease in crude oil price volatility since 2011”, according to the U.S. Energy Information Agency (EIA).

Oil supply and demand shuffled as new tight shale makes impact felt
North Denver News
World markets for petroleum and other liquid fuels have entered a period of dynamic change—in both supply and demand. Potential new supplies of oil from tight and shale resources have raised optimism for significant new sources of global liquids. The changes in the overall market environment have led the U.S. Energy Information Administration (EIA) to focus on reassessing long-term trends in liquid fuels markets for the 2014 edition of itsInternational Energy Outlook (IEO2014).

Is the Shale Revolution a ‘Ponzi Scheme’ or the End of Peak Oil?
Rising prices at the beginning of the 21st century did, in fact, promote more exploration and faster technological progress, resulting in the shale revolution the U.S. is currently enjoying. If this dynamic is not unduly hampered, it’s a good bet that the prophets of bubble-bursting doom are wrong yet again. (Also see:

Reliance looking to sell US shale gas interest
Business Standard
Reliance Industries is looking to sell its 45 per cent stake in the Eagle Ford basin shale oil and gas venture in the US for an estimated USD 4.5 billion. RIL, which bought 45 per cent interest in Pioneer Natural Resources Co’s Eagle Ford shale formation of south Texas for USD 1.3 billion, is working with Citigroup Inc and Bank of America Merrill Lynch to find a buyer, industry sources said.

Energy Expert Interview Series: Bill Reinert
Big Picture Agriculture
Bill Reinert was national manager of Toyota Motor Sales U.S.A. Inc.’s advanced-technology group for the past 15 years prior to his retirement in 2013. A staunch environmentalist, he helped establish a global model for cleaner energy use in the Galapagos Islands in conjunction with the WWF. As a futurist, and a leading global expert on energy and transportation trends, he helped to found the annual “Meeting of the Minds” events which focus on future smart urban planning, transportation, and energy use.

World War III: It’s here and energy is largely behind it
Kurt Cobb, Resource Insights
I’ve been advancing a thesis for several months with friends that World War III is now underway. It’s just that it’s not the war we thought it would be, that is, a confrontation between major powers with the possibility of a nuclear exchange. Instead, we are getting a set of low-intensity, on-again, off-again conflicts involving non-state actors (ISIS, Ukrainian rebels, Libyan insurgents) with confusing and in some cases nonexistent battle lines and rapidly shifting alliances such as the shift from fighting the Syrian regime to helping it indirectly by fighting ISIS, the regime’s new foe.

Peak oil is here: the view from Barbastro
Ugo Bardi, Resource Crisis
Two days of conference in Barbastro were a hard reminder that oil is still the most important resource in the world. At the conference, a number of impressive speakers lined up to show their data and their models on peak oil. Antonio Turiel, Kjell Aleklett, David Hughes, Gail Tverberg, Michael Hook, Pedro Prieto. From what they said, it is clear that the future it is not any more a question of arguing about resources and reserves, lining up barrels of oil as if they were pieces to be played on a giant chessboard. It is not any more a question of plotting curves and extrapolating data. No: it is more a question of money. We are not running out of oil, we are running out of the financial resources needed to extract it.

The Thermodynamic Theory of Ecology
Quanta Magazine
John Harte, a professor of ecology at the University of California, Berkeley, has developed what he calls the maximum entropy (MaxEnt) theory of ecology, which may offer a solution to a long-standing problem in ecology: how to calculate the total number of species in an ecosystem, as well as other important numbers, based on extremely limited information — which is all that ecologists, no matter how many years they spend in the field, ever have.

Naomi Klein: Capitalism vs The Climate

Naomi Klein, author of the groundbreaking books, No Logo and The Shock Doctrine, is back with a new groundbreaking work, This Changes Everything: Capitalism vs. The Climate. The book resets the debate over global warming by focusing on how it is integrally related to the current economic system that spans the globe.

Her new book, This Changes Everything: Capitalism vs. the Climate out now from Simon & Schuster, is a broad challenge to those who want a livable planet: We need to come up with a livable economic system too. Deeply researched and personally reported, Klein’s third book takes us from the tar sands in Alberta (“Earth, skinned alive”) to the oil-soaked waters of the Gulf of Mexico (“a miscarriage”), from climate denier conferences to a meeting of would-be geoengineers, as she traces the path of destruction that capitalism and a mindset she terms “extractivism” – that is perhaps even older – have left on the Earth.

At one point, Klein concedes, it might have been possible to stop the climate crisis with a few regulations here, a carbon tax there. But we’re too far gone for that, and nothing but a full-on change in how humans relate to the Earth and to each other will save us now. Read’s interview with Klein

Klein’s 2010 piece on Climate Change: How science is telling us all to revolt


Sagar Dhara: A.P. needs smart governance more than a smart capital

Sagar Dhara, POI Founder Member

(Note: An edited version of this article appeared in The Hindu, dated October 9, 2014, under the title ‘Including people in governance)

The soul of India lives in its villages, Gandhiji said 100 years ago.  London governed India’s soul then, which it perceived as unjust and so revolted.  Delhi and the state capitals now govern India but not quite in a way that allows people to participate in decision-making.

By declaring the Vijayawada-Guntur region as the new capital of the successor state of Andhra Pradesh (AP), and wanting all major government institutions there, Chief Minister Chandra Babu Naidu has, like in other Indian states, has favoured centralized governance.

The logic for choosing Vijayawada-Guntur as the capital can be traced to the outdated industrial location theory (ILT), whose object is to choose industry sites that minimize transport cost of raw materials and finished goods.  No doubt, Vijayawada-Guntur is centrally located in AP is and well connected, which helps minimize transport cost for visitors to the capital.  But ILT does not consider many other critical issues.

First, it factors only direct costs, not externalities. The Vijayawada-Guntur is surrounded by some of AP’s best farmland, and a part of it will be lost to the new capital.  Per researchers Ashmore, Marshall and others, air pollution from large cities like Mumbai and Ahmedabad have caused wheat and paddy yield losses of 15-40%, totalling to lakhs of tons, in a 60-70 km radius around each city.  Air pollution from thermal power plants is similar to that from cities; hence crop yield losses around power plants can be extrapolated to estimate losses around cities.  A 2013 environmental impact appraisal of the 1,760 MW Ibrahimpatnam thermal power plant located near Vijayawada, estimated that the plant’s air pollution-related crop yield losses in a 10 km radius around the plant were Rs 200 crores per annum.  Extrapolating this to air pollution-crop yield losses in a 25 km radius around the new capital would mean a loss of Rs 1,000 crores per annum to local farmers.

And as the new capital grows it will attract migrants, the city’s carbon emissions will increase by at least one million tons per annum.  The cost of raising plantations that can sequester these carbon emissions is Rs 3,500 crores.

Second, ILT does not factor costs for social conflicts.  The new capital is to be made a smart city like Singapore.  The energy required is 6 million tons of oil equivalent costing Rs 35,000 crores, i.e., a third of AP’s 2014-15 budget.  To mobilize these funds, a public-private partnership may be sought.  Private parties invest for profit and will want to transform newer parts of Vijayawada-Guntur into gated communities with super malls, leaving the older and crowded One-Town in Vijayawada and Patha-Guntur as are.  Uneven development of Vijayawada-Guntur is likely to cause social conflict in future, and that has a cost.

Third, ILT may work for a single node like a centralized capital, but not for not for smart governance, i.e., decentralized democratic participative governance.  In the former, higher-level government functions are centralized in one location, e.g., Vijayawada-Guntur as envisaged by AP’s chief minister.  In the latter, government functions are dispersed throughout the state.  Hence, people will travel shorter distances to district, taluka/mandal towns for their work with government rather than to the capital, thus minimizing transport cost.  More importantly, the state’s polity, and all its regions will feel that they have been included in the state’s governance.  The process of choosing a capital has just begun.  AP should use this unique opportunity to opt for smart governance, an opportunity that Telangana does not have.

Tasked by the Union Government to identify sites for the new AP capital, the Sivaramakrishnan Committee has recommended dispersing government institutions across the state to allow for distributed and equitable development of all of AP, e.g., locate departments related to industry in Visakhapatnam, agriculture in Prakasam and mining in Rayalseema, etc.  Accepting this recommendation to decentralize is the first step in smart governance.  It will make all AP regions feel involved in the state’s governance.

The second step is to move to democratic participative governance.  Indian law empowers local self-governments (LSG)—panchayats, municipalities, etc., to take decisions about local matters.  LSGs have not discharged their mandate adequately for lack of clear jurisdiction and adequate funds.  If this is corrected, governance can be transformed from a top-down for the people model of centralized governance done from state capitals to a bottom-up by the people model, where every village and town becomes self-governing.

Smart governance experiments have been done in many parts of the world.  Participatory budgeting first began in 1990 in the Brazilian city of Porto Alegre.  In the first quarter of every year, communities hold open house meetings every week to discuss and vote on the city’s budget, and spending priorities for their neighbourhood.  Later, city-wide public plenaries pass a budget that is binding on the city council.  The results speak for themselves.  Within seven years of starting participatory budgeting, household access to piped water and sewers doubled to touch 95%.  Roads, particularly in slums, increased five-fold.  Schools quadrupled, health and education budgets trebled.  Tax evasion fell as people saw their money at work.  People used computer kiosks to feed communicate suggestions to the city council’s website.

Participatory budgeting is now being done in 1,500 towns around the world—Europe, South America, Canada, India—Pune, Bengaluru, Mysore and Hiware Bazar.  Twenty five years ago, Hiware Bazar was like any other drought-prone village in Marathwada.  Today its income has increased twenty-fold and poverty has all but disappeared.

In the early-1970s, British scientist, Stafford Beer, designed a cybernetic system that did realtime monitoring of Chile’s economy and allowed production decisions to be taken at different levels, the lowest being shopfloor workers, the next being people in the entire production facility, then by representatives of like production facilities in a city; finally the highest level being the cabinet’s economic committee.  If an issue arose on a particular shopfloor, workers were given a certain amount of time to discuss and fix it.  If they failed because the issue was beyond their control, e.g., raw material shortage, an algedonic meter sounded an alarm and the decision shifted to a next higher level, and further upwards if necessary. Two 1970s-generation computers and telex lines was the technology used.

Before the Right to Information (RTI) became law in India, public boards carrying information on daily receipt and disbursement of foodgrains were ordered to be put up outside ration shops in Madhya Pradesh.  Immediately after, foodgrain shortages in ration shops disappeared. Fifteen years ago, plants in AP were ordered to put up public boards outside their main gate with information regarding their compliance conditions, environmental data and the maximum vulnerable zone in catastrophic accidents.  To make RTI more effective, a non-computerized information search engine has been designed in India.

Thirty years ago, Narsappa, an illiterate farmer aggrieved by Harihar Polyfibers’ effluents, was told by the plant’s management that their effluents were being treated to required standards and that he had no cause for worry.  He asked why then could the locations of the plant’s fresh water intake and effluent discharge points not be switched; the intake point from upstream to downstream of the plant site on the Tungabhadra River and the effluent discharge from downstream to upstream.  Narsappa’s question remains unanswered to this day.

Narsappa is an important part of India’s soul.  Grassroot decision-makers in Brazil and Chile are like Narsappa. Participation of people like Narsappa in smart governance or gram swaraj will make AP and India a vibrant society, much more than using expensive smart toys like online air quality monitors from Singapore, the output data from which is un-actionable in Indian cities.

(The author works with Cerana Foundation on energetics of human societies and environmental risks, and can be contacted at

News update

Ebola: Uncharted territory for a system in overshoot
Mary Odum,
We are in uncharted territory with the Ebola virus disease (EVD). This pandemic signifies a turning point for society in response to peak oil, highlighting the problem of globalization for a planet of 7 billion people. We have lost control of a deadly outbreak, and our responses to its exponential growth are linear at best, ensuring that this plague will most likely spread further.

Peak Oil: Are We In The Eye Of The Storm?
A temporary surge in what was heretofore a little-known source of oil in the U.S. is masking the larger story of what is taking place in the global oil situation. The simple answer is that except for the U.S. shale oil surge, almost no increase in oil production is taking place around the world.

WSJ Gets It Wrong: Why Peak Oil Predictions Haven’t Come True
Gail Tverberg
On September 29, the Wall Street Journal (WSJ) published a story called “Why Peak Oil Predictions Haven’t Come True.” The story is written as if there are only two possible outcomes: 1) The Peak Oil version of what to expect from oil limits is correct, or 2) Diminishing Returns can and are being put off by technological progress–the view of the WSJ. It seems to me, though, that a third outcome is not only possible, but is what is actually happening. (Here’s another refutation of the WSJ article by Kevin Drum, writing in Mother Jones: “Peak Oil Is All About Cheap Oil“)

Why the People’s Climate March Fails As a Strategy
Zaid Hassan, Caravan Magazine
The People’s Climate March was organized in cooperation with the New York Police—who formally issued a permit for it. It had pre-arranged start and end times. It had a pre-agreed route that ended a mile away from the UN building (not that global leaders were there on a Sunday). There were no closing speeches. No laws were broken. No arrests were made.

Scientists speed up analysis of human link to wild weather
Yahoo News
Climate scientists hope to be able to tell the world almost in real-time whether global warming has a hand in extreme weather thanks to an initiative they plan to launch by the end of 2018.

Wildlife populations down drastically
Daily Mail, UK
Populations of about 3,000 species of wildlife around the world have plummeted far worse than previously thought, according to a new study by one of the world’s biggest environmental groups. The study from the Swiss-based WWF largely blamed human threats to nature for a 52-percent decline in wildlife populations between 1970 and 2010.

World’s Population Unlikely To Stabilize This Century
Contrary to previous projections, it now appears that the world’s population is unlikely to stop growing this century. There’s at least an 80% chance that between 9.6 and 12.3 billion humans will inhabit the Earth by 2100 — and much of this increase will happen in Africa. It’s the first U.N. population report to use Bayesian methods — a modern form of statistics that combines all available information to generate more accurate predictions.

Can Narendra Modi bring the solar power revolution to India?
The Guardian, UK
As chief minister of Gujarat, Modi spurred companies to build more than 900MW of solar plant across the state in just a couple of years. Now, as prime minister, the question is whether he can repeat the feat across India, which receives more sunlight than any other country in the G20.

Irony alert: Yergin gets award named after peak oil realist Schlesinger
Kurt Cobb, Resource Insights
It is a supreme irony that cornucopian oil industry mouthpiece and consultant Daniel Yergin should receive America’s first medal for energy security named after James Schlesinger, the first U.S. energy secretary, who was a peak oil realist.

Ted Trainer: The Simpler Way

Ted Trainer, Social Work, University of NSW

(Editor’s Note: Below is a summary of Ted Trainer’s ‘The Simpler Way‘, which he defines as “Working for transition from consumer society to a more simpler, more cooperative, just and ecologically sustainable society”. In the web page linked above, Trainer provides more information and an exhaustive set of documents arguing how environmental problems can’t be solved in or by consumer capitalist society)

Global problems cannot be solved without huge and fundamental change, because they are directly caused by our present socio-economic system.

The basic cause of the problems is over-consumption — the grossly unsustainable demand for high material “living standards” in a world of limited resources. We cannot keep up the present levels of production and consumption and resource use for long, and there is no possibility of all the world’s people ever rising to these levels. People in rich countries have these high “living standards” only because we are taking much more than our fair share of the available resources and depriving the majority.

Even though present levels of production and consumption are unsustainable this economic system must have constant and endless increase in output, i.e., economic growth. A sustainable world order is not possible unless we move to much less production and consumption, and much less affluent lifestyles within a steady-state economic system.

Our second major mistake is allowing the market to determine our fate. An economy which relies heavily on free market forces will inevitably allocate most of the world’s wealth to the few, produce inappropriate development, destroy the environment, and ignore the needs of the majority. What is done must be determined by what humans and ecosystems need, not by what is most profitable in a market.

Underlying these faults is a culture based on competition, individualism, acquisitiveness, wealth and luxury. There must be a value change to much more concern with cooperation, sharing, helping, caring, collective welfare and living more simply.

Technical advance cannot solve these problems. It cannot make a big enough difference to levels of resource use and ecological impact. It cannot eliminate the need for radical change in our “living standards”, values and economy.

Consumer-capitalist society cannot be fixed — reforms to it will not solve the problems. Its basic structures and systems must be replaced.

We cannot achieve a sustainable and just world order unless we change to,

– Simpler lifestyles, much less production and consumption, much less concern with luxury, affluence, possessions and wealth.
– Small, highly self-sufficient local economies, largely independent of the global economy.
– More cooperative and participatory ways, enabling people in small communities to take control of their own development.
– A new economy, one not driven by profit or market forces, and a zero-growth or steady-state overall economy, which produces much less than the present economy.
– Some very different values, especially cooperation not competition, and frugality and self-sufficiency not acquisitiveness and consuming.

The Simpler Way is about ensuring a very high quality of life for all without anywhere near as much production, consumption, exporting, investment, resource use, environmental damage, work etc. as ther e is now. There are many rich alternative sources of satisfaction other than material acquisition and consuming. Consider having much time for arts and crafts and personal growth, living in a rich and supportive community, having to go to work for money only two days a week, living in a diverse and productive leisure-rich landscape, having socially worthwhile and enjoyable work with no fear of unemployment…and knowing you are not contributing to global problems. There is no need to sacrifice modern technology to achieve these benefits.

The fate of the planet depends on whether initiatives such as the Transition Towns movement can provide many impressive examples of sustainable, just and pleasant ways showing people in consumer society that there is a better way.

The main purpose of this website is to provide information which will help people in their efforts to educate about the need for change to The Simpler Way.

Peak Shit! How Oil Spilled the Economy – 2

Part 2 – We The Unwilling
(Read Part 1 )

By Stanley Ravi, POI member

As I said last time, my exposure to Peak Oil made me realise a few things:
– We are approaching the ‘Limits to Growth’
– Growth is dead
– Oil will be gone
– The world is going to come to a grinding halt.

None of this happened, I repeatedly made a fool of myself, I couldn’t fit in to work, and so the home front suffered. Imagine walking into your employer’s office and saying, “There is no more space to grow. Oil production has passed its half life span, extracting the first half was easy, extracting the second half is self-defeating.”

Read more…

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