Friday, July 21, 2006
Houston-based Baker Hughes , a provider of oil-field products and services, said the number of oil rigs rose by three to 299 from last week. A year ago, there were 181 such units.
The company also reported that the amount of gas rigs increased by 13 to 1,381. A year ago, gas rigs totaled 1,228.
read more | digg story
Tuesday, July 18, 2006
July 18, 2006 - Increased concerns about interest rates and housing affordability caused builder confidence in the market for new single-family homes to slip three more notches to 39, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for July, reported today.
One reason is maybe the surge in building material costs:
In May, the producer price index -- the selling price received by domestic producers of goods -- of gypsum, a component of wallboard, rose 26.4 percent compared to the same month in 2005. Plastic construction materials jumped 18 percent, cement rose nearly 15 percent, and copper and brass products increased 86.9 percent from the same period a year ago.
The Housing Market Index (HMI) has reached a 15 years low in July:
Fig. 1 Housing Market Index (HMI) from 1995 to now (src: NAHB).
Fig. 2 Traffic of Prospective Buyers index. The gray background gives the observed values between 1985 and 2005, the darker the shade the more frequent the corresponding value.
Fig. 3 Single Family Sales: Next 6 Months. The gray background gives the observed values between 1985 and 2005, the darker the shade the more frequent the corresponding value.
Fig. 4 Current Single Family Sales. The gray background gives the observed values between 1985 and 2005, the darker the shade the more frequent the corresponding value.
Fig. 5 Housing Market Index. The gray background gives the observed values between 1985 and 2005, the darker the shade the more frequent the corresponding value.
Thursday, July 13, 2006
My reasoning is as follows.
- The auto/housing/finance group wants to continue selling and financing large autos and houses.
- The media group wants to continue selling advertising for large autos, houses and loans.
- The major oil companies are concerned that if they admit to the reality of Peak Oil, they may face punitive taxation. The major oil exporters are afraid of military takeovers, if they admit to the reality of Peak Oil. The energy analysts are hired guns. This group provides the intellectual ammunition for the other two groups.
ExxonMobil is a good example of the major oil company faction. Opec of course is the Organization Of Petroleum Exporting Countries. Cambridge Energy Research Associates (CERA), founded by Daniel Yergin, is a good example of the energy analyst faction. Following are recent direct quotes, in chronological order, regarding Peak Oil, by these three factions.
"Rather than a 'peak,' we should expect an 'undulating plateau' perhaps three or four decades from now."
Mr. Robert Esser
Senior Consultant and Director, Global Oil and Gas Resources
Cambridge Energy Research Associates
Understanding the Peak Oil Theory
Subcommittee on Energy and Air Quality
December 7, 2005
"Contrary to the theory, oil production shows no signs of a peak... Oil is a finite resource, but because it is so incredibly large, a peak will not occur this year, next year, or for decades to come"
ExxonMobil Advertisement in New York Times, June 2, 2006
We in Opec do not subscribe to the peak-oil theory.
Acting Secretary General of Opec, Mohammed Barkindo
July 11, 2006
In a column in Forbes Magazine, published on 11/1/04, Daniel Yergin, in response to a question about the future direction of oil prices, dismissed concerns about oil supplies and asserted that oil prices on 11/1/05 would at $38 per barrel. Note that oil prices exceeded $60 in the summer of 2005, prior to the hurricanes.
In my opinion, Mr. Yergin serves as an excellent symbol of the major oil company/major oil exporter/energy analyst group. And since oil prices are now trading at close to $76 per barrel--twice Mr. Yergin's prediction--I hereby designate July 13, 2006 as "Daniel Yergin Day," in honor of Mr. Yergin's continued efforts to, in effect, persuade Americans to continue driving large debt financed vehicles, on long commutes to and from large mortgages.
One of the little ironies about the Peak Oil debate is that it is those who are trying their best to warn Americans about the dangers posed by Peak Oil---Matt Simmons; Colin Campbell; Kenneth Deffeyes; Boone Pickens, Jim Kunstler etc.--who are most often blamed for rising oil prices. I think that it is just the opposite.
If you believe Matt Simmons, et al, about the future direction of energy prices, you will drastically reduce your overall consumption, especially your energy consumption, by living in a small energy efficient home, close to where you work--which would ideally allow you to walk or take mass transit to work, or at least result in a short commute.
In my opinion, it is those who are telling us that Peak Oil is decades away--such as ExxonMobil, Opec and Yergin--who are most responsible for, in effect, encouraging Americans to continue driving $50,000 SUV's on 50 mile roundtrips to and from $500,000 mortgages in the suburbs.
My personal take on this issue is that we have to kill consumption--via a large tax on energy consumption, offset by tax cuts elsewhere--before consumption kills us.
Jeffrey J. Brown is an independent petroleum geologist in the Dallas, Texas area. e-mail: firstname.lastname@example.org
Friday, July 07, 2006
Fig. 1 Example of a simple self-similar object size distribution represented in a log(rank)-log(size) plane. The red line has a slope equals to -1.
The Parabolic Fractal Law (PFL) is an unperfect self-similar law where a quadratic term is added:
log(Size(i))= a + b.log(i) + c.log(i)^2
URR= Sum_i(a + b.log(i) + c.log(i)^2)
with: a + b.log(i) + c.log(i)^2 > Size_Min
Application to Saudi Arabia
Unfortunately, there is no public database on Saudi Arabia oilfields. We don't need to get an exhaustive dataset but only a few estimates about the size of the largest fields. I found some data about the top 9 fields from various sources on the web and from Simmons's book (Twilight in the Desert).
|Field||URR (Gb)||Discovery Date|
Because we have so little data, it will be difficult to reliably estimate a valid parabolic curvature. So we proceed asfollowing:
- The Field URR are ranked according to their size and represented in a log(rank)-log(URR) plane as shown on Fig. 2. When only an interval is available, we take the center value.
- a robust linear fit (no curvature) is applied on the data points (red line on Fig. 2).
- A parabolic model is then fitted using the slope established in 2) as first guess for the linear term b and a fixed curvature value c (blue lines on Fig. 2). The algorithm used for this step is the Levenberg-Marquardt algorithm.
- The URR values are estimated from the areas under the PFL curves conditionally to a particular minimum oil field size as shown on Fig. 3.
Fig. 2. Estimation of various PF Laws with different fixed curvature values. Each data point is color coded according to the oil field age.
Fig. 3. Derived URR from the PFL shown on Fig 2. The URR value is function of the minimum oil field size considered.
Fig. 5. Hubbert Linearizations on Saudi Arabia Production profile (data from BP, Crude + NGL). The blue points are the ASPO forecast which see a constant production level for the next 20 years at 9.5 mbpd (newsletter 66).
Fig. 6. Contributions from oil fields using the PFL law for Saudi Arabia with the world curvature (green line on Fig. 2 and Fig. 3). The top 10% of oil fields (size > 67 Mb) contributes to 97% of the total URR.
- combined with the Hubbert Linearization technique, the PFL could be useful for tortuous production profiles from immature countries such as Saudi Arabia, Iraq and Iran.
- only the top fields are necessary for the fit which is interesting because they are usually the most mature and the most documented. However, we implicitly assume that the discovery of large fields has peaked early in the production history and that no giant or super-giants will be discovered.
- the PFL integrates naturally contributions from small fields and the derived URR is dependent on the minimum field size. Therefore, some reserve growth can be simulated by changing the small field cutoff value.
- Jean Laherrère: “Parabolic fractal” distributions in Nature. (in French but has many interesting graphs),
- Ada A. Adamic. Zipf, Power-laws, and Pareto - a ranking tutorial
- William J. Reed. The Pareto, Zipf and other power laws
- Narushige SHIODE. Power Law Distributions in Real and Virtual Worlds.