[RD] Daily Graphs and Charts

[Monsterzuma]

According to the FAO, it takes 1,000x more water to feed a population via agriculture than it does to satisfy thirst. This is leading to growing demand-side water pressure as food demand is expected to increase by 50% by 2025 to 2030 – meaning another 1,000km3 (1tn m3) of water per year – equal to the annual flow of 20 Niles or 100 Colorado Rivers (Source: InterAction Council). This will significantly exacerbate the imbalance between water demand and supply.

CHART: It Takes 1,000 Times More Water To Feed A Person Than It Does To Satisfy Thirst
http://www.businessinsider.com/how-much-water-it-takes-to-make-food-2012-11

 

[Lord Chambers]

In a recent Bank of America Merrill Lynch report titled The Blue Revolution – Global Water, strategist Sarbjit Nahal takes a close look at the water story as it relates to food.

http://www.businessinsider.com/how-much-water-it-takes-to-make-food-2012-11

I'm having a hard time finding this report. If it's published by an investment bank, does that mean it's likely only to circulate among clients? And if so, why is it getting publicized?

 

[luiz]

Because that wishful thinking is what keeps the world economy chugging along.

Yes, of course. All the world's industrialists, all financiers, all entrepeneurs, they're all a bunch of imbeciles who can't see the impending doom.

That is clever fudging of the numbers, on multiple levels. Lets compare:

Yeah, it's such a "clever fudging" that it is actually the standard way to measure oil production. It's what Wikipedia, for instace, has to show when one searches for "list of countries by oil production"

One could conceivably count NGLs towards the "oil production", after all that's ready made energy coming out of the ground. But still, it has less energy density than crude, only in the ballpark of 80%

And that's why they calculate by "oil equivalent".

Unless only you know this shocking information that not all sources have the same energy density.

But "refinery gains" are basically empty air, gained by expanding the oil volume, without changing the energy content at all. Just some accountant's trick. So that's one less mbd for the US.

True, but I assume all countries have "refinery gains" and this doesn't change at all the story of rapidly rising US oil production.

And unlike Brazilian bio-ethanol, US corn ethanol is, at best, energy neutral, i.e. at least the same amount of energy is consumed to produce a barrel of "other liquids" as is embodied in said barrel.
Scratch another mbd for the US, possibly more.

Hold that scratch, because the oil equivalent figures I referred to do not include ethanol or other bio fuels. From wiki:
"Note that oil production refers to the sum of barrels of crude oil extracted each day from drilling operations compounded with the equivalent production of natural gas liquids and refinery gains from domestic or imported petroleum production.[2] This should not be confused with oil supply, which often refers to market availability of multiple types of petroleum and non-petroleum fuels (such as natural gas and bio-ethanol), as well as refinery gains and extraction from man-made reserves of different petroleum products (such as the US strategic reserves)."

Overall, the actual energy equivalent for the US "oil production" of 10.1 mbd in 2011 is more like 7.5mbd of real crude oil.

Not really, because you're deducting stuff that should not be deducted.

The projection of expanding shale oil production has not much to do with the geological factors underground nor with the available oil production infrastructure (at least according to the petroleum geologists that offer their opinion online and the leading technical experts in the oil industry):


, but it is the same tried and tested purely economic modelling that resulted in this (sorry, can't be posted often enough):

The Canadian oil sand reserves on the other hand are real enough, but they follow a similar economic model and extraction curve as near surface coal deposits, i.e. it makes sense to keep digging at it with roughly the same speed for decades.

We'll have to wait and see. For now I'll trust the IEA over you, though.

 

[Winner]

Yes, of course. All the world's industrialists, all financiers, all entrepeneurs, they're all a bunch of imbeciles who can't see the impending doom.

Wouldn't be the first time that happened. They're not imbeciles, they're just too invested in the system. Basically all the civilizations which at some point collapsed did so with their elites being either completely ignorant of the danger, or in denial about it.

It's actually those who profit the most from existing unsustainable policies who are the most *unlikely* to admit their source of wealth and power is rapidly eroding away. So now we're still in the "let's build more Moai statues and pyramids to show off our wealth and prosperity, and all will be just fine" mindset. Give it 10 or 20 years, and I guarantee you that mindset will look even more silly than it does today.

 

[potatokiosk]

Or, you know, maybe shale oil really will be a worthwhile investment and we're not about to see oil prices skyrocket. But perhaps not. Maybe oil futures are an excellent investment right now and mysteriously no one is taking advantage of it because investors are all somehow denying reality.

 

[Borachio]

But hang on, now you seem to be saying that high oil prices would be a bad thing for investors.

 

[Murky]

One of two things has a future; the fossil fuel industry or civilization as we know it.

 

[potatokiosk]

But hang on, now you seem to be saying that high oil prices would be a bad thing for investors.

Not if they buy oil futures. In that case, they profit from higher oil prices.

Of course, oil companies are aware of oil futures markets and if the market predicted very high prices in the future, the oil companies would save more of their oil instead of drilling it now.

 

[luiz]

Wouldn't be the first time that happened. They're not imbeciles, they're just too invested in the system. Basically all the civilizations which at some point collapsed did so with their elites being either completely ignorant of the danger, or in denial about it.

It's actually those who profit the most from existing unsustainable policies who are the most *unlikely* to admit their source of wealth and power is rapidly eroding away. So now we're still in the "let's build more Moai statues and pyramids to show off our wealth and prosperity, and all will be just fine" mindset. Give it 10 or 20 years, and I guarantee you that mindset will look even more silly than it does today.

But certainly we can recognize that our civillization is a wee bit more sophisticated than that of Easter Island.

Are you familiar with the famous Club of Rome report, from 1972? Basically they assumed that demand for resources would grown exponentially (as would population, pollution, etc) but supply and resource-saving technologies would at best grow linearly, if at all. I am mostly familiar with their projections for steel demand (because I work in the steel sector) and they have been completely and utterly debunked by facts. Basically the price mechanism by itself is more than capable of adjusting demand to supply, and resource-saving technologies progressed much faster than anticipated (the developed countries managed to keep growing even though their per capita consumption of steel has fallen quite a lot from its peak - the same will certainly happen with oil).

Or, you know, maybe shale oil really will be a worthwhile investment and we're not about to see oil prices skyrocket. But perhaps not. Maybe oil futures are an excellent investment right now and mysteriously no one is taking advantage of it because investors are all somehow denying reality.

Indeed!
Why doomsayers never use their vast knowledge of the impending doom to get filthy rich is beyond me.

 

[Borachio]

Not if they buy oil futures. In that case, they profit from higher oil prices.

Of course, oil companies are aware of oil futures markets and if the market predicted very high prices in the future, the oil companies would save more of their oil instead of drilling it now.

But look, are you saying peak oil isn't going to happen in 2025? (or whenever it is)

It seems to me the oil companies, as a whole, are making a balanced decision. Based on the balance between income now and income in the future.

They have to supply sufficient oil for consumption now or see their future market disappear.

And the profits they make now are sufficient to reassure them that supplying oil now is worthwhile.

But how far ahead do the oil futures markets look? Is it 1, 2, 5, 10 years?

Also, the people running oil companies aren't interested in oil per se. But in making money. When oil runs out (as it surely must), they'll invest elsewhere.

 

[tokala]

Yeah, it's such a "clever fudging" that it is actually the standard way to measure oil production

Yes, those volume numbers may be technically correct but they are significantly misleading when used to proclaim an "energy independent" US for the near future. You would be interested in the actual net energy content of the domestic US "oil + other liquids" production, no?

Unless only you know this shocking information that not all sources have the same energy density.

Naively one would assume that "barrels of oil equivalent" would mean that those "other liquids" are normalized to the energy content of the equivalent amount of enery contained in crude oil, no?
After all, that's what most of the customers using oil products are interested in, energy content.
And I don't recall to have ever read an article in the mainstream press dealing with global oil production making a point of clarifying the difference in energy content between crude oil and "other liquids".

True, but I assume all countries have "refinery gains" and this doesn't change at all the story of rapidly rising US oil production.

Yes they have, but on average much less than the US. Compare the charts for Saudi Arabia and Russia with the US. Almost entirely the (high energy density) crude, with a bit of "second best " NGLs. The same for global production:

Hold that scratch, because the oil equivalent figures I referred to do not include ethanol or other bio fuels.

You quoted a percentage much closer to the "all liquids" number:

As of 2011 the US is the third biggest oil producing nation in the world (in terms of oil equivalent), with a production equal to 92% of Russia's (the world's biggest producer).

Crude Oil:
Russia – 9.8 million barrels a day (mbd)
Saudi Arabia – 9.5 mbd
United States – 5.7 mbd
US ~ 60% of Russian production.

Crude + substitute liquids :
Saudi Arabia – 11.2 mbd
Russia – 10.2 mbd
United States – 10.1 mbd
US ~100% of Russion production.
(Numbers and graphs are from this site, using data from the EIA not IEA)

Okay, where did that 92% number originate from? Is there any handy breakdown of the numbers in the "IEA Energy outlook" on the net?
It would indeed come close to the "Crude+substitutes" EIA numbers without biofuels (about 1mbd in 2011).
Doesn't change the fact that refinery gains don't mean energy gain and the lower overall energy content of the US oil "production" mix.
Still, I have to concede that I got carried away a bit there.
The US production number you quoted is likely to be inflated by about 15%, not 25% (energy content).

BTW, the EIA does include biofuels for the US production outlook (but not refinery gain ):

Why doomsayers never use their vast knowledge of the impending doom to get filthy rich is beyond me.

Because if those doomsayers are right, there won't be much value in their money beside its calorific value.

 

[Murky]

It's not all doom and gloom people. Look at places where they are successful in switching to renewable energy and getting more energy efficient. It can give you and idea of where we might go once enough political momentum builds.

 

[luiz]

Yes, those volume numbers may be technically correct but they are significantly misleading when used to proclaim an "energy independent" US for the near future. You would be interested in the actual net energy content of the domestic US "oil + other liquids" production, no?

Nobody is talking of an energy independent US in the near future, they're talking about the US being the biggest oil producer by 2017. That is a very solid prediction. The prediction of the US becoming energy independent, and eventually a net exporter of oil, are much further into the future and thus far more uncertain.

Naively one would assume that "barrels of oil equivalent" would mean that those "other liquids" are normalized to the energy content of the equivalent amount of enery contained in crude oil, no?
After all, that's what most of the customers using oil products are interested in, energy content.
And I don't recall to have ever read an article in the mainstream press dealing with global oil production making a point of clarifying the difference in energy content between crude oil and "other liquids".

But that's why they use "oil equivalent", because not all sources have the same energy content.

Yes they have, but on average much less than the US. Compare the charts for Saudi Arabia and Russia with the US. Almost entirely the (high energy density) crude, with a bit of "second best " NGLs. The same for global production:

You quoted a percentage much closer to the "all liquids" number:


Crude Oil:
Russia – 9.8 million barrels a day (mbd)
Saudi Arabia – 9.5 mbd
United States – 5.7 mbd
US ~ 60% of Russian production.

Crude + substitute liquids :
Saudi Arabia – 11.2 mbd
Russia – 10.2 mbd
United States – 10.1 mbd
US ~100% of Russion production.
(Numbers and graphs are from this site, using data from the EIA not IEA)

Okay, where did that 92% number originate from? Is there any handy breakdown of the numbers in the "IEA Energy outlook" on the net?
It would indeed come close to the "Crude+substitutes" EIA numbers without biofuels (about 1mbd in 2011).
Doesn't change the fact that refinery gains don't mean energy gain and the lower overall energy content of the US oil "production" mix.
Still, I have to concede that I got carried away a bit there.
The US production number you quoted is likely to be inflated by about 15%, not 25% (energy content).

I quoted it directly from the aforementioned list of countries by oil production, on Wiki. Those numbers explicitly do not include any biofuels. The numbers are:

1 Russia 10,540,000
2 Saudi Arabia 10,270,000
3 United States 9,688,000

So US = 0.9188 of Russia, which I rounded up to 92%.

Because if those doomsayers are right, there won't be much value in their money beside its calorific value.

They can make a lot of money before the complete collapse, use to buy guns and ammo and food and then rule the post-apocalyptic world.

 

[tokala]

I quoted it directly from the aforementioned list of countries by oil production, on Wiki. Those numbers explicitly do not include any biofuels. The numbers are:

1 Russia 10,540,000
2 Saudi Arabia 10,270,000
3 United States 9,688,000

So US = 0.9188 of Russia, which I rounded up to 92%.

The numbers in that article appear to be not very consistent. The ones you listed here are directly from the CIA world factbook, and the US value is given as 2010 estimate, without making entirely clear what exactly is included there.

The latest numbers from the American Government agency EIA were 10.1 mbd for 2011, and for 2010 were 9.49 mbd. Including:

Crude oil (including lease condensate) production; natural gas plant liquids production; and processing gain (refinery and blender net production minus refinery and blender net inputs). Beginning in 1981, also includes fuel ethanol (minus denaturant) production. Beginning in 2001, also includes biodiesel production.

This is quite close to the (estimated) wiki page number, implicating that in fact the number for the US there has also to include NGLs, biofuels and refinery gains to make sense.

Contrary to what's noted in the introductory statement there.

This is also noted in the very first discussion point of the wiki "talk" page.



BTW, the reason why the US has such disproportionate refinery gains:

They process about 1/4 of world crude output, while themselves producing only about 1/10 of world crude output.

 

[Monsterzuma]

http://qz.com/29735/there-is-only-one-thing-that-can-save-japan-now-inflation/

Doesn't this pretty much fly in the face of everything neo-keynesians like to repeat about the destructiveness of downward nominal price and wage rigidity? Japan doesn't suffer nearly as much as these theories would imply given this long term negative trend in nominal GDP growth.

 

[Monsterzuma]

 

[luiz]

http://qz.com/29735/there-is-only-one-thing-that-can-save-japan-now-inflation/

Doesn't this pretty much fly in the face of everything neo-keynesians like to repeat about the destructiveness of downward nominal price and wage rigidity? Japan doesn't suffer nearly as much as these theories would imply given this long term negative trend in nominal GDP growth.

I read an interesting article some time ago about how despite all the negative covegare Japan gets in the West, things there are actually working out quite well for a key demographic (and very big voting block): the elderly. Basically, falling prices are good for them. They have no incentive whatsoever to vote for someone who would offer higher inflation to boost GDP.

 

[Cutlass]

http://qz.com/29735/there-is-only-one-thing-that-can-save-japan-now-inflation/

Doesn't this pretty much fly in the face of everything neo-keynesians like to repeat about the destructiveness of downward nominal price and wage rigidity? Japan doesn't suffer nearly as much as these theories would imply given this long term negative trend in nominal GDP growth.

I'm not sure what point you're trying to make? They've covered their shortfalls in part with deficit spending.

 

[Monsterzuma]

That seems to only have halted an even further fall in NGDP?

 

[Cutlass]

Japan's big question is what happens when they reach a point where higher debt is no longer a viable option? And the second question is when does that threshold get crossed? I think after that tsunami the day of reckoning became much, much, closer than it was previously. What changes they make then are going to be interesting to see.