An action thriller by Jock Miller


Fossil fuel has an ageless affinity with dinosaurs. To create oil, dinosaurs died.


purchase on Amazon.com





The perfect energy storm is sweeping over the United States: Japan’s Fukushima nuclear plant meltdown has paralyzed nuclear expansion globally, BP’s Gulf of Mexico oil spill has stalled deep water drilling, Arab oil countries are in turmoil causing doubt about access to future oil, the intensity of hurricanes hitting the Gulf’s oil rigs and refineries has intensified due to global warming, and the nation’s Strategic Oil Supply is riding on empty.

As the energy storm intensifies, the nation’s access to Arab oil, once supplying over sixty percent of our fossil fuel, is being threatened causing people to panic for lack of gas at the pumps, stranding cars across the country and inciting riots.


The U.S. Military is forced to cut back air, land, and sea operations sucking up 58% of every barrel of oil to protect the nation; U.S. commercial airlines are forced to limit flights for lack of jet fuel; and businesses are challenged to power up their factories, and offices as the U.S. Department of Energy desperately tries to provide a balance of electric power from the network of aged power plants and transmission lines that power up the nation.

The United States must find new sources of domestic fossil fuel urgently or face an energy crisis that will plunge the nation into a deep depression worse than 1929.

The energy storm is very real and happening this very moment. But, at the last moment of desperation, the United States discovers the world’s largest fossil fuel deposit found in a remote inaccessible mountain range within Alaska’s Noatak National Preserve surrounding six and a half million acres.

Preventing access to the oil is a colony of living fossil dinosaurs that will protect its territory to the death.

Nobody gets out alive; nobody can identify the predator--until Dr. Kimberly Fulton, Curator of Paleontology at New York’s Museum of Natural History, is flown into the inaccessible area by Scott Chandler, the Marine veteran helicopter pilot who’s the Park’s Manager of Wildlife. All hell breaks loose when Fulton’s teenage son and his girlfriend vanish into the Park.


Will the nation’s military be paralyzed for lack of mobility fuel, and will people across America run out of gas and be stranded, or will the U.S. Military succeed in penetrating this remote mountain range in northwestern Alaska to restore fossil fuel supplies in time to save the nation from the worst energy driven catastrophe in recorded history?

______________________________________________________________________________________________________________________________________


Cables Suggest BP Near-Fiasco in '08











BY GUY CHAZAN

U.S. diplomatic cables released this week suggest that BP PLC narrowly averted potential disaster after a 2008 natural gas leak at a field it operates in Azerbaijan, about 18 months before the deadly Deepwater Horizon explosion in the Gulf of Mexico triggered the worst offshore oil spill in U.S. history.

The gas leak, which was disclosed in BP's 2008 annual report and was widely covered by news agencies at the time, occurred in the offshore Azeri-Chirag-Guneshli (ACG) field, Azerbaijan's largest, in September 2008. ...



Click Here To Continue Reading: Log In or Subscribe

Residents say oil spill effects still felt

http://www.upi.com/

NEW ORLEANS, Dec. 22 (UPI) -- Some Gulf Coast residents and business still suffer economic and emotional effects of the Gulf of Mexico oil spill, tourism and fishing advocates say.

Representatives for several organizations in Gulf Coast states say residents are experiencing extreme stress -- including physical and mental health issues -- from losing their livelihood because of the months-long spill that spewed hundreds of millions of gallons of oil into the gulf before the well was sealed, The (New Orleans) Times-Picayune reported Wednesday.

"Families continue to need assistance and businesses are grappling with uncertainties about the future," said Dan Favre, a Gulf Restoration Network spokesman, said during a telephone news conference Tuesday. "After eight months, oil is still here and so are we. The BP disaster continues to have real impacts on real people."

Maryal Mewherter, spokeswoman for Bayou Interfaith Shared Community Organizing, said indigenous people "were left with an uncertainty about being able to return to work, sell their catch or being able to eat any of the seafood from the Gulf of Mexico."

Tourism-dependent Florida has been hit as well, Keith Overton, chairman of the Florida Restaurant and Lodging Association, told The Times-Picayune.

"We don't know how long it's going to take to restore confidence in people that the Gulf of Mexico is safe," Overton said.

The types of problems facing Gulf Coast residents aren't resonating in Washington, Farve said, explaining that Congress failed to approve legislation that would have directed spending of money from fines against BP and other parties for environmental restoration and failed to create an advisory panel that would have given Gulf Coast residents a voice in oil spill response decision-making.

Coast Guard Report Examines Oil in Sea Floor Near Blown-Out BP Well




By: Jenny Marder

A federal report released Friday detailed the levels of oil that remain lodged in sea floor sediment around the blown-out BP well in the Gulf of Mexico.

The oil was found in concentrations too small to collect in most areas, and below harmful levels. But the area spanning a mile and a half around the well had concentrations of oil mixed in with drilling mud at levels high enough to raise concerns about harming marine life. Chemical tests confirmed that it matched BP oil, and officials said there was no practical way to clean it.

"We are not finding any recoverable amounts of oil" on the seafloor, Rear Adm. Paul Zukunft said. "We are dealing with barely detectable amounts of oil in the parts per billion in many places."

The new findings were released by the Operational Science Advisory Team, a group formed in August to determine what happened to the 170 million gallons of oil that leaked into the Gulf. The report is based on a chemical analysis of nearly 17,000 water and sediment samples collected between May and October.

It also found that more oil detected in shallow waters along the coast could wash ashore.

Of the new findings, BP said: "The scientific evidence in this report is consistent with our observations that the beaches are safe, the water is safe, and the seafood is safe," Mike Utsler, BP's Unified Area Commander, said in a statement.

Government scientists said Friday's report was not an assessment of the spill's damage to the ecosystem, but rather a guide to help the Coast Guard and cleanup crews, according to an Associated Press report.

But many questions remain on the long-term fallout from the spill. Still unknown are the effects of the 1.8 million gallons of chemical dispersants sprayed into the ocean. Some tests have found chemicals contained in the dispersant in seafloor sediment, according to the Wall Street Journal. And scientists say they have found dead marine animals in areas where oil quantities were reported low.

We'll have more on the report's findings on the Rundown Monday.

Free Speech Radio News Documentary: Oil in the Bayou – After the Spill



One of the year's biggest stories was the BP oil spill in the Gulf of Mexico. After the explosion on BP's Deepwater Horizon Rig killed 11 workers in April, oil began spewing into the Gulf of Mexico from the damaged well, causing the worst oil disaster in US history. The blown-out well gushed an estimated 53 thousand barrels a day into the ocean for 87 days. The largest oil spill in US history has dramatically affected southern Lousiana's bayou communities.

This summer, FSRN reporter Julia Botero traveled to Terrebonne Parish to look at how the oil and gas industry has affected fishing communities. The spill has altered the way residents see themselves and the delicate place they call home. This is the first 13 minutes of FSRN's special encore presentation of their documentary, "Oil in the Bayou."


Download and Listen to More Here

Stephen Baldwin sues Kevin Costner over BP oil spill

Stephen Baldwin, the actor, is suing Kevin Costner and his business partner for $3.3 million over the BP oil rig disaster.















BP COO Doug Suttles and actor Kevin Costner, co-founder of Ocean Therapy






By Nick Allen, Los Angeles


The unlikely legal case centres on technology that Costner and his associates provided to help suck up oil following the spill in the Gulf of Mexico.

Costner, the Oscar-winning Hollywood star and environmental activist, has spent over 15 years developing machines designed to separate oil and water, 32 of which were bought for the clean up by BP.

The spill resulted from an explosion on the Deepwater Horizon rig and flowed for three months, releasing millions of barrels of oil into the sea and creating a giant slick.

Amid desperate containment efforts Costner appeared before Congress to describe how the oil separating machines worked and advocating their use.

Baldwin, 44, who starred in The Usual Suspects, claims he invested in a joint venture with Costner, 55, and others and that he owned 10 per cent of it

But he claims he was duped into selling back his share for just $500,000 having not been told that BP was buying the machines for $52 million.

Baldwin claims the venture made a profit of $38 million of which his share should have been $3.8 million (£2.5 million), so he lost out on $3.3 million.

Another member of the joint venture who claims to have had a 28 per cent share is suing for $9.2 million in a joint lawsuit with Baldwin against Costner and his business partner.

In the 31-page lawsuit obtained by TMZ, the celebrity news website, Baldwin and the other plaintiff claim they were "misled" into selling their interests in a joint venture called Ocean Therapy Solutions.

The lawsuit alleges: "The plaintiffs have been damaged directly by the misrepresentations and omissions of defendants in that they sold their membership interests for a fraction of their actual value."

Costner has declined to comment on the allegations.

Oil Spill Anxiety on the Bayou






In Bayou Barataria, Louisiana, shrimp fishing families brace themselves for the worst as a massive oil spill heads their way





http://www.time.com

BP Oil on Gulf Floor Draws Concern





http://online.wsj.com


Oil from BP PLC's blown-out well has lodged in the sediment of the Gulf of Mexico at levels that may threaten marine life, according to a federal report released Friday.

Heavy contamination from the oil spill is limited to a few locations in the Gulf relatively close to BP's Macondo well, officials said. Chemical tests have confirmed that oil in some sediment there matches oil from the BP well, according to the report by scientists advising federal spill-response officials.

There is no practical way to clean up the spilled oil that has settled deep in the Gulf, officials said, adding that microbes in the water could eventually eat it up.

"We've reached that point of diminishing returns," said Charlie Henry, a scientist at the National Oceanic and Atmospheric Administration involved in the report. Tests show levels of oil contamination that could threaten organisms in the Gulf. But "there's no longer any action we can take" to remove spilled BP oil far offshore, he said.

Closer in, from Florida to Louisiana, patches of oil remain in the water beside some beaches that were hit particularly hard by the spill. Some of that oil clearly "is from the Macondo well," said Sam Walker, another NOAA scientist.

The report finds that some of the oil near the shoreline could wash ashore. Workers will continue to try to remove oil left on beaches and in marshes in some parts of the coast, officials said.

BP interpreted the report as good news. "The scientific evidence in this report is consistent with our observations that the beaches are safe, the water is safe, and the seafood is safe," said Mike Utsler, head of the company's spill-response effort, in a statement.

Under federal law, a company found responsible for an oil spill must pay for environmental damage the government finds the spill caused. The more Gulf contamination that research links to the BP spill, the more money the federal government is likely to push BP to pay.

The report leaves unanswered many questions about the spill's environmental impact that scientists are likely to be researching—and BP and the government are likely to be fighting over—for years.

For instance, officials sprayed some 1.8 million gallons of chemical dispersants on the oil to break it up and prevent it from washing ashore. In some sediment, tests found a chemical contained in dispersant, but its environmental impact is unknown, the report said.

Separately, a federal judge in New Orleans on Friday ordered Transocean Ltd., the owner of the drilling rig that blew up when it was drilling BP's well, to give federal investigators safety records for other rigs it had in the Gulf at the time.

—Ryan Dezember contributed to this article.

.Printed in The Wall Street Journal, page A

WikiLeaks Reveals BP's 'Other' Offshore Drilling Disaster

By Vivienne Walt

Fire boats battle a fire at the off shore oil rig Deepwater Horizon April 21, 2010 in the Gulf of Mexico off the coast of Louisiana.

U.S. Coast Guard / Getty


A BP offshore oil platform suddenly shows signs of a potentially devastating leak. Bubbles form in the seawater. Alarms sound. Panicked oil workers flee the rig. That may sound like the moments that preceded last April's Deepwater Horizon explosion in the Gulf of Mexico, but it actually describes an event 19 months earlier, in the Caspian Sea waters of tiny Azerbaijan. There are uncanny echoes of the Azerbaijan incident in the Deepwater Horizon tragedy, including the likely cause — a faulty cement job. But there was one marked difference: While the Gulf explosion created an ongoing political firestorm, the Azerbaijan leak remained almost forgotten until last week, when another leak — this time of diplomatic cables, released by WikiLeaks — showed just how close BP had come to a major disaster in the Caspian.

A series of cables by then U.S. Ambassador in Baku, Anne E. Derse, chronicled a growing testiness between BP and the government of Azerbaijan, whose long borders with Russia and Iran and vast Caspian energy reserves give it strategic importance way beyond its small size. BP commands enormous clout in Azerbaijan, having invested $4 billion in gas and oil pipelines from Baku, which travel through Georgia to the Turkish port of Ceyhan, giving energy-hungry Western Europe a supply channel that bypasses Russia.

But the partnership with the Azeri state energy company SOCAR was strained to the limit one morning in Sept. 2008, when a blowout in a gas-injection well on BP's Central Azeri platform prompted the emergency evacuation of 212 workers, and shut down large parts of the offshore production in the Caspian's Azeri-Chirag-Guneshli (ACG) field. That accident deprived the Azerbaijan government of revenues of up to $50 million a day during the weeks when production plummeted, according to the leaked cables. "It is possible that BP Azerbaijan 'would never know' the cause of the gas leak," Ambassador Derse wrote to her bosses in Washington on Oct. 8, 2008, citing confidential talks with the American head of BP Azerbaijan, Bill Schrader. "BP is continuing to methodically investigate possible theories." A later cable says BP concluded that "a bad cement job" caused the leak. BP has not said which company was responsible for that cement work, and its 2008 annual report offered few details. The leak is mentioned on page 28 of the report, where it is stated only that production had resumed "following comprehensive investigation and recovery work."

The cables, first published in London's Guardian, demonstrate the sharp contrast between the saturation coverage of the Gulf blowout, and the Azerbaijan leak that was barely covered in the local press. "Unless you were on the inside you didn't know how serious it was," says Edward Chow, senior fellow at the Center for Strategic and International Studies in Washington. "It hit the trade press, so if you were reading Platts [a specialist oil newsletter] you would have seen it." BP said in a statement published in the Guardian that the company "enjoys the continued support and goodwill of the government and the people of Azerbaijan," and that its discussions with the government are confidential.

The pipeline project has always had a strong geopolitical undertone. A former aide to President Heydar Aliyev told TIME in an interview in Baku in 2006 that President Bill Clinton had urged the Azeri leader in 1994 to construct the pipeline link with Europe as part of "a very strategic plan" to bypass Russia and Iran. But the primary concern following the Caspian platform leak was less on potential diplomatic consequences in a region at the epicenter of energy-driven strategic contest but on the financial losses Azerbaijan suffered after BP's leak. "Schrader said although the story hadn't caught the press's attention, it had the full focus of the GOAJ [Government of Azerbaijan]," Derse wrote, "which was losing '40 to 50 million dollars' each day."

That loss seems trifling by comparison to the $40 billion or more in cleanup costs and legal liabilities that BP faced over the Gulf disaster, even before last week's Obama Administration decision to sue BP and eight other companies involved in Deepwater Horizon. And the revelations about the Caspian incident may have government lawyers picking over the details in search of a pattern of lax safety on BP platforms. In the Caspian leak, the gas did not ignite, and all the workers made it safely off the rig — a far happier outcome than in the Gulf. In what could be seen in retrospect as another portent of things to come, Ambassador Derse described the Azerbaijan government's annoyance over what they said was BP's secretiveness about the incident — a charge which would be repeated by President Barack Obama less than two years later, when he lashed out at BP for obfuscating over the Gulf blowout.

Chow also suggests that the suspicion that both accidents were caused by cement work around the wells could suggest a "systemic" problem with regard to BP's wells. "If you look at the larger picture, BP has had safety problems for more than five years now," Chow says. "It has been well documented, even before the Azerbaijan news."

In one cable from the embassy in Baku in October 2008, a U.S. diplomat says "BP has closed off a 'few suspect wells' from which they think a bad cement job caused the leaking gas." That, the diplomat says, "is actually good news, since had it been a reservoir leak the damage would have been potentially non-reparable, whereas now all BP has to do is fix the cement job." The repair work is "hard and expensive ... but preferable to losing the platform." By April 2010, that assessment would read like a gross understatement.




READ MORE

Did The Price Of Oil Help Cause The Financial Crisis Of 2008? Will Surging Oil Prices Soon Spark Another Financial Crisis?

By Michael Snyder
The Economic Collapse

Oil prices are starting to spin out of control once again. In London, Brent North Sea crude for delivery in February hit 91.89 dollars a barrel on Friday. New York crude moved above 88 dollars a barrel on Friday. Many analysts believe that 100 dollar oil is a virtual certainty now. In fact, many economists are convinced that oil is going to start moving well beyond the 100 dollar mark. So what happened the last time oil went well above 100 dollars a barrel? Oh, that's right, we had a major financial crisis. Not that subprime mortgages, rampant corruption on Wall Street and out of control debt didn't play major roles in precipitating the financial crisis as well, but the truth is that most economists have not given the price of oil the proper credit for the role that it played in almost crashing the world economy. In July 2008, the price of oil hit a record high of over $147 a barrel. A couple months later all hell broke loose on world financial markets. The truth is that having the price of oil that high created horrific imbalances in the global economy. Fortunately the price of oil took a huge nosedive after hitting that record high, and it can be argued that lower oil prices helped stabilize the world economy. So now that oil prices are on a relentless march upward again, what can we expect this time?

Well, what we can expect is more economic trouble. The truth is that oil is the "blood" of our economy. Without oil nothing moves and virtually no economic activity would take place. Our entire economic system is based on the ability to cheaply and efficiently move people and products. An increase in the price of oil puts inflationary pressure on virtually everything else in our society. Without cheap oil, the entire game changes.

The chart below shows what the price of oil has done since 1996 (although it doesn't include the most recent data). With the price of oil marching towards 100 dollars a barrel again, many people are wondering what this is going to mean for the U.S. economic "recovery"....

Just think about it. What is it going to do to U.S. households when they have to start spending four, five or even six dollars on a gallon of gas?

What is it going to do to our trucking and shipping costs?

What is it going to do to the price of food? According to the U.S. Bureau of Labor Statistics, food inflation in the United States was already 1 1/2 times higher than the overall rate of inflation during the past year. But that is nothing compared to what is coming.

During 2010, the price of just about every major agricultural commodity has shot up dramatically. These price increases are just starting to filter down to the consumer level. So what is going to happen if oil shoots up to 100, 120 or even 150 dollars a barrel?

Demand for oil is only going to continue to increase. Do you know who the number one consumer of energy on the globe is today? For about a hundred years it was the United States, but now it is China. Other emerging markets are starting to gobble up oil at a voracious pace as well.

Not that the price of oil isn't highly manipulated. Of course it is. The truth is that the price of oil should not be nearly as high as it currently is. Unfortunately, you and I have very little say on the matter.

If the price of oil keep going higher, it is really going to start having a dramatic impact on global economic activity at some point. Meanwhile, oil producers and the big global oil companies will pull in record profits, and radical "environmentalists" will love it because people will be forced to start using less oil.

When it comes to oil, there are a lot of "agendas" out there, and unfortunately it looks like the pendulum is swinging back towards those who have "agendas" that favor a very high price for oil.

So what does that mean for all of us?

It is going to mean higher prices at the pump, higher prices at the supermarket and higher prices for almost everything else that we buy.

If the price of oil causes a significant slowdown in economic activity, it could also mean that a whole bunch of us may lose our jobs.

In an article that I published yesterday entitled "Tipping Point: 25 Signs That The Coming Financial Collapse Is Now Closer Than Ever", I didn't even mention that price of oil. There are just so many danger signs in the world economy right now that it is easy to overlook some of them.

Yes, it is time to start ringing the alarms.

The ratio of corporate insider stock selling to corporate insider stock buying is at the highest it has been in nearly four years. This is so similar to what happened just prior to the last financial crisis. The corporate insiders are seeing the writing on the wall and they are flocking for the exits.

Many savvy investors are getting out of paper and are looking for hard assets to put their money in. For example, China is buying gold like there is no tomorrow. The Chinese seem to sense that something is coming. But of course they are not alone. All over the world top economists are warning that we are flirting with disaster.

On Friday, Moody's slashed Ireland's credit rating by five notches to Baa1, and is warning that even more downgrades may follow.

Just think about that for a moment.

Moody's didn't just downgrade Irish debt a little - what Moody's basically did was take out a big wooden mallet and pummel it into oblivion.

Irish debt is now considered little more than garbage in world financial markets now. Unfortunately, Greece, Spain, Portugal, Italy, Belgium and a bunch of other European nations are also headed down the same road.

The truth is that the euro is much closer to a major collapse than most Americans would ever dream.

The world financial system is teetering on the brink of another major financial crisis, and rising oil prices certainly are not going to help that.

If the price of oil breaks the 100 dollar mark, it will be time to become seriously alarmed.

If the price of oil breaks the 150 dollar mark in 2011 it will be time to push the panic button.

Let's hope that the price of oil stabilizes for a while, but unfortunately that is probably not going to happen.

The truth is that the economic outlook for 2011 is bleak at best, especially if the price of oil continues to skyrocket.


Read More

Justice Department to Join Oil-Spill Lawsuits

By EVAN PEREZ

WASHINGTON—The Justice Department on Wednesday is expected to seek to join civil lawsuits resulting from the Gulf of Mexico oil spill, the first major federal legal action in the probe of the disaster, according to people familiar with the matter.

Dozens of private-party lawsuits have been consolidated in so-called multidistrict litigation in federal court in New Orleans, representing claims against BP PLC and its contractors for damages from the worst oil spill in U.S. history.

In its complaint, the Justice Department is expected to allege violations of environmental-protection regulations, which could trigger penalties under laws including the Clean Water Act and the Oil Pollution Act, these people say.

By joining the litigation, Justice Department lawyers would likely play a major role in upcoming legal steps in the cases, including depositions of key witnesses, which could aid the government's ongoing investigation, these people say.

The Justice Department declined to comment.

The government's civil complaint is only the first salvo of what is likely to be a lengthy legal fight as the government and the companies involved try to assign blame for the April 20 oil-rig accident and the subsequent spill.

The rig explosion killed 11 people. Government officials estimate about 4.9 million barrels of oil spilled from the leaking well before BP plugged the leak on July 15.

In June, Attorney General Eric Holder announced that the Justice Department was conducting a broad probe into a wide range of possible criminal and civil violations in the disaster. Law-enforcement officials say a major focus of the investigation centers on violations of environmental-protection laws.

Most of the government's legal strategy isn't yet public. But government lawyers in recent months have tussled with a major BP contractor, Transocean Ltd., which owned the rig destroyed in the incident, over Transocean's attempts to limit its liability.

President Barack Obama appointed a commission to investigate the causes of the disaster, with a report due to the president in January.

Over the past decade, BP has had several run-ins with the Justice Department. In October 2007, the company settled a government investigation of a deadly accident at a refinery in Texas, a 2006 pipeline leak in Alaska and improper propane trading in 2003 and 2004.

BP pleaded guilty to a felony violation of workplace-safety rules in the refinery case, pleaded guilty to a misdemeanor violation of federal clean-water rules in the pipeline spill and entered a deferred prosecution agreement to settle the propane price manipulation matter. In all, the company agreed to pay more than $370 million in criminal fines and restitution to resolve the cases, and was placed under probation for three years.

The company's past transgressions are expected to prompt government lawyers to seek stiffer penalties, U.S. officials say.

The fines under the Clean Water Act could at a minimum amount to $4.5 billion, which would be $1,100 for each of the estimated 4.1 million barrels (out of a total of 4.9 million emanating from the well) that spilled into the waters. A maximum fine could be $21 billion if gross negligence is found by the courts. That fine would carry a $4,300 penalty for each of the total of 4.9 million barrels.

In addition to the federal probe, attorneys general from states, including Louisiana and Mississippi, whose coastlines were most affected by the spill, also have their own investigations under way and have agreed to pool their resources and share documents.

The Justice Department also helped the government negotiate with BP an initial $20 billion fund to pay claims from businesses and individuals whose livelihoods were affected by the disaster. Government officials say the fund doesn't affect the total bill for damages the company could face.

Write to Evan Perez at evan.perez@wsj.com

Government issues guidance on offshore drilling rules



Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana August 11, 2010. REUTERS/Lee Celano

Interior's Bureau of Ocean Energy Management detailed how drillers can comply with recently imposed requirements regarding updating spill response plans, blowout preventer testing and calculating worst-case flow-rate scenarios for an uncontrolled spill.

"As we continue to strengthen oversight and safety and environmental protections, we must ensure that the oil and gas industry has clear direction on what is expected," said Michael Bromwich, the head of BOEM, in a statement.

The information does not include any new requirements. It is intended to provide a path forward to deepwater drilling in the aftermath of the massive BP oil spill, the agency said.

One area where the agency attempted to provide some clarity for drillers was the worst-case discharge estimates that operators have to provide regarding their wells.

The agency said it has developed a consistent methodology for these calculations and encouraged companies to consult with agency staff about estimates for specific projects. Some drillers had complained these calculations were holding up permit approvals.

The guidance also explained the agency's expectations for companies' oil spill response plans. Under Interior's regulations, the agency may require an operator to revise its response plans if they are found to be deficient.

One primary deficiency the agency said it has identified in its review of response plans is the lack of sufficient subsea containment equipment. When deepwater drillers apply for new permits they have to demonstrate they have access to and can deploy the necessary resources to deal with a subsea blowout.

The agency explained that drillers may meet this requirement by submitting a containment plan that addresses debris removal, the use of remotely operated vehicles, containment domes and capping stacks.

BP's drilling accident over the summer unleashed millions of barrels of oil into the Gulf of Mexico, prompting a months-long ban on deepwater drilling and a raft of new rules for energy firms.

Since the disaster, offshore drillers have complained that the lengthy permitting process has amounted to a de facto ban on all offshore drilling.

The oil industry's major lobbying group, the American Petroleum Institute, said it "is taking a close look at the guidance to evaluate whether it provides the clarity operators need to understand and implement the new standards."

As of Monday, two deepwater permit applications for new wells have been submitted since the agency's drilling ban was lifted in October.

(Editing by Lisa Shumaker)

Beware $90 oil




http://finance.fortune.cnn.com

With high unemployment, weak consumer spending and falling home prices, what else could possibly slow America's economic recovery? Oil prices.

Though prices have retreated a bit since, crude oil climbed above $90 a barrel on Tuesday – its highest level in two years. Futures rose by 1.5% to trade as high as $90.76 in New York, according to Bloomberg.

Why should we care? The development alone certainly won't pull the economy back into a recession, but it's an indicator to start watching closely, says James Hamilton, economist with the University of California in San Diego. Hamilton, who has done extensive research on oil shocks and business cycles, says the rise could put another damper on consumer spending and add to factors slowing the economic recovery.

He believes that the surge in oil prices, which surpassed $140 a barrel in the summer of 2008, helped send the economy into the Great Recession that started December 2007 and ended in June 2009. It's true that the housing and banking crisis played a major role, but so did oil shocks. The spike in prices hurt consumer spending, and especially the U.S. auto industry.

In his research, Hamilton looked at the impact of oil prices on the auto industry to economic growth. He found a clear decline as oil prices skyrocketed and estimated that if the auto industry hadn't shrunk, GDP growth would have been half a percentage point higher from mid-2007 onward.

Consumption overwhelming makes up the majority of GDP -- about 70%. With so many dicey variables teetering either way in today's economy, it's anyone's guess how this latest development could impact the consumer in the coming months.

The rally Tuesday came as President Obama and Republican leaders agreed to extend Bush-era tax cuts. Also, a cold snap through Europe and the U.S. lifted demand for fuel. But U.S. crude fell slightly to $87.93 a barrel Wednesday after U.S. government data showed inventories for refined products rose sharply last week.

So where will oil prices go in the coming months? Some analysts predict that the commodity will hit $100 a barrel sometime next year as demand rises from China and other emerging economies. But various factors might send prices down as well, as the spread of Europe's debt crisis could strengthen the U.S. dollar and send prices for the dollar-denominate commodity downward.

For now at least, the $90 price is right around the point where consumers start noticing higher oil prices at the gas pump, Hamilton says. And with noticeably more spending on fuel, this could be another factor tightening consumption -- a development that would almost certainly slow down the recovery further.

Part II: Scouring the Globe for Fuel

by Chris Mortenson ChrisMartenson.com




"Tomorrow’s [economic] expansion was collateral for today’s debt."

~ Colin Campbell

The implications from this report are too important to preserve just for the enrolled members who support this site's mission, people, and goals. We're going to open up most of this report to the general public because we feel it's the right thing to do. For those unfamiliar with my work, the job I do most frequently is a combination of information scout (I connect dots) and analyst (I dig deep).

Okay, let's head deeper into the World Energy Outlook (WEO) 2010 report. Here's my quick summary of the report.

By 2035:

  • Between 2008 and 2035, total energy demand grows by 36%, or 1.2% per year; far less than the 2% rate of growth seen over the prior 27 years. (Note: This comes from the "New Policies Scenario," which is the middle scenario of three in the report. We'll discuss this one throughout.)
  • Renewables will be contributing very little to the overall energy landscape, just 14% of the total, and this includes hydro.
  • 93% of all the demand increase comes from non OECD countries (mainly China and India).
  • Oil remains the dominant fuel (although diminishing in total percentage).
  • The global economy will grow by an average of 3.2% per annum.
  • It's time to cut demand for oil by raising prices (they recommend ending energy subsidies for fossil fuels as the mechanism).
  • Conventional oil has peaked, and this is a permanent condition. All oil gains from here forwards will come from non-conventional sources and gas and coal-to-liquids programs.

There are enormous implications to that series of bullet points, if one stops to think about them in total. One glaring difficulty in all of this is that the IEA notes that China and India are going to consume nearly every drop of any potential future increases in oil production. Yet overall production is only going to grow by a meager 0.5% per year.

So how does the IEA suppose that oil growth can slow down to a paltry 0.5%/year, see China and India increase their consumption massively, and still have everything balance out? We all know that China and India (et al.) have been growing their oil consumption by massive percentages in the recent past, and there's some evidence that we can expect more of that behavior in the years to come.

In fact, this was what India's Premier told the world on November 1, 2010:

Premier Manmohan Singh told India's energy firms on Monday to scour the globe for fuel supplies as he warned the country's demand for fossil fuels was set to soar 40 percent over the next decade.

The country of more than 1.1 billion people already imports nearly 80 percent of its crude oil to fuel an economy that is expected to grow 8.5 percent this year and at least nine percent next year.

(Source)

So, yes, it's pretty much expected that China and India, et al., will be increasing their consumption by rates much (much) higher than 0.5%, which means, logically, that some other countries will have to consume at negative rates in order for the equation to balance.

And this is exactly what the IEA has modeled and proposed:

I want to draw your attention to the green circles that I placed on there. Yes, you are reading that right. To balance everything out, the IEA has modeled the OECD as actually decreasing its consumption of coal and oil by significant amounts (that's what a negative 'incremental demand' requires: a decrease in current consumption). The difference is made up from a mix of renewables, biomass, nuclear, and natural gas.

Never has such a thing happened in the entire industrial history of the OECD. Never. There are no models or examples to follow here. No guidance is offered to suggest how such a monumental feat will be accomplished, beyond tossing a few more bucks at renewables, as if money alone could correct for vast differences in energy quantity and quality.

To suggest that the next 25 years for the OECD will be characterized by a significant reduction in the use of the two primary industrial fuels is an astonishing claim, and so it deserves to be carefully examined. But, speaking bluntly, this is not going to happen.

Any suggestion that the OECD is going to reduce its use of coal for electricity and oil for liquid fuels has to be accompanied by evidence of massive programs of investment towards energy transitioning that, truth be told, have to have been started a decade or more before the arrival of Peak Oil. Hinting that it might possibly be a good idea to move these renewable dreams to the drawing board after the advent of Peak Oil is akin to playing tunes on a sinking ship; at best, you are providing a captivating diversion.

Regardless, no such programs operating at appropriate scale are even remotely in sight.

A point that I try to make clear in my upcoming book (due out in March 2011 from Wiley) is that such an energy transition would be evident by such things as the trillions of dollars being dedicated to it, by eminent domain actions to secure new land for natural gas pipelines, and by vehicles that could run on electricity or natural gas being churned out by the millions. While we can debate whether we might get there someday, there can be no doubt that we are not there today.

So if one is a card-carrying member of the mainstream media, what does one do with such a major event as the WEO 2010 report? In the case of the New York Times, the answer is to run a completely schizophrenic pair of articles, but bury the supportive one deep in the "blogs" section while placing the one that completely ignores the WEO 2010 report prominently in the business section.

The first of these two articles, separated by only a day and centering firmly on the IEA report, is titled "Is ‘Peak Oil’ Behind Us?" to which the article correctly answers "Yes":

Is ‘Peak Oil’ Behind Us?

Peak oil is not just here — it’s behind us already

That’s the conclusion of the International Energy Agency, the Paris-based organization that provides energy analysis to 28 industrialized nations. According to a projection in the agency’s latest annual report, released last week, production of conventional crude oil — the black liquid stuff that rigs pump out of the ground — probably topped out for good in 2006, at about 70 million barrels a day. Production from currently producing oil fields will drop sharply in coming decades, the report suggests.

That's pretty accurate. You'd think that such a stunning admission by the preeminent body responsible for preparing such reports for the OECD would have sparked a fury of investigation and maybe even self-investigation by the New York Times, which through the years has pooh-poohed the entire idea of Peak Oil rather religiously. But that didn't happen.

The second article is entitled "There Will Be Fuel" and is chock full of comforting anecdotes and quotes from oil industry executives:

There Will Be Fuel

Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation.

“The estimates for how much oil there is in the world continue to increase,” said William M. Colton, Exxon Mobil’s vice president for corporate strategic planning. “There’s enough oil to supply the world’s needs as far as anyone can see.”

Somebody get that man a pair of glasses (!)

Seriously, any country or corporation that cannot foresee the end of cheap and abundant oil is being run by dangerous people. To suggest that even the most optimistic assessment of oil, which has it peaking in 2030, is too far away to begin planning for today is just silly. Really, now...responsible planners considering major capital projects with multi-decade life spans (which can be 30 years or more for many things) should just ignore energy? That's the message here? Goodness, gracious.

In fact, there are so many problems with "There Will Be Fuel" that I hardly know where to turn to next. I suppose we could note that the article quoted "100 years of natural gas" left in the US without mentioning the all-important phrase "at current rates of consumption." To those who are familiar with exponential processes, and who know that energy consumption has been increasing exponentially for decades, such an oversight is an enormous red flag. It betrays either ignorance or deception on somebody's part (perhaps the editor?), and neither are acceptable at this stage of the energy debate. Once we increase consumption at reasonable and prior rates, that 100 years can rapidly shrink to mere decades in a hurry.

What's the difference between "100 years of gas" and "maybe a couple of decades"? Night and day.

Next, we might note that the article goes out of its way to make the case that "estimates for how much oil there is in the world continue to increase," while somehow avoiding the essential point that it's not the amounts that matter, but the rates at which the oil can be coaxed to flow out of the ground. Peak Oil is, has been, and always will be about flow rates, not amounts.

For example, if the very center of the earth were entirely filled with oil, but we could only get to it through a single, very thin tube (limiting how fast we could pull the oil out), it wouldn't really matter how much was there - a hundred trillion barrels could be there - because how much we could do with it would be limited by the rate of extraction. Exponential economic growth requires increases in fuel consumption. It always has and it always will, until and unless a brand new model of economics is developed.

Again, the lack of awareness of this basic concept of the difference between rates and amounts leaves the New York Times piece very much in doubt.

I could go on, but it's not all that helpful to once again catch the New York Times playing fast and loose with the facts in order to advance an agenda; for now, let's just observe that Peak Oil refers to a condition where the rate of extraction cannot be increased. If it were about amounts, then I suppose we would call it "Peak Reserves," but it's not, and for a reason: We care about the flow rates.

It is on this matter of flow rates that the IEA report was especially jarring and succinct: Peak Oil has happened.

At this point, it may be good to remind ourselves that last year an IEA whistleblower said that the organization had willfully underplayed looming shortages due to political pressures from the US.

Please read the following very carefully; it represents very important context for what we are about to discuss next. (I'm quoting at length because it's all essential):

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

(Source)

The idea expressed above is simple enough: The oil data has been fudged to the upside by the IEA. Pressure has allegedly been applied upon the IEA to paint a rosier picture than a strict interpretation of the data would warrant. To speculate, the reason why is that there are a host of interlocking vested interests in the financial but especially political spheres that would find the public recognition of Peak Oil to be disruptive and therefore unwelcome.

This is just another example of Fuzzy Numbers, but the consequences of fibbing to ourselves about oil are far more dire than when we lie about employment. If it weren't so serious, it would be just another somewhat regrettable obfuscation of reality created to serve narrow and temporal political purposes.

Note: There is a well-recorded history, going back at least 13 years, of the IEA being fully aware of Peak Oil but bowing to political pressure to soften the message. Read paragraphs 4 & 5 of this piece by Colin Campbell for some more essential background.

Conclusion

Here's where we are:

  • The IEA has known about looming Peak Oil issues for more than a decade and is only now explicitly recognizing the idea in their public documents.
  • People inside and outside of the IEA say that the organization has downplayed both the timing and potential severity of Peak Oil.
  • Peak Conventional Oil has already happened.
  • Any possible growth in future oil that the IEA can envision -- and we might suspect that even this is fudged to the upside and will retreat in subsequent reports -- is going to be almost entirely eaten up by China and India.

What this means is very, very simple. There will be an energy crisis in the near future that will make anything we've experienced so far seem like a pleasant memory.

The very best personal investments you can make at this stage will involve increasing your energy resilience. Make your house require less heating and cooling, use the sun wherever and whenever possible, and increase your personal storage of the fuels you use (if and when possible).

The potential knock-on effects of less energy to the complex system known as our economy are unpredictable in their exact details and timing, but are thoroughly knowable via their broad, topographical outlines. The economy will become simpler and less ordered.

http://seekingalpha.com


Economic Implications of IEA's Lowered Oil Estimates

by Chris Mortenson ChrisMartenson.com

Once a year, the International Energy Agency (IEA) releases its World Energy Outlook (WEO), and it's our tradition to review it. A lot of articles have already been written on the WEO 2010 report, and I don't wish to tread an already well-worn path, but the subject is just too important to relegate to a single week of attention.

Because some people will only read the first two paragraphs, let me get a couple of conclusions out right up front. You need to pay close attention to Peak Oil, and you need to begin adjusting, because it has already happened. The first conclusion is mine; the second belongs to the IEA.

Okay, it's not quite as simple as that; there are a few complexities involved that require us to dig a bit deeper and to be sure our terms and definitions are clear so that we are talking about the same things.

But if we can simply distinguish between two types of "oil" (you'll see why that term is in quotes in a second), the story becomes much easier to follow.

  • "Conventional oil" is the cheap and easy stuff. A well is drilled, pipe is inserted and oil comes up out of the ground that can be shipped directly to a refinery. Whether the oil is "sour" or "sweet" doesn't matter; it's still conventional oil.
  • "Unconventional oil" refers to things like tar sands, ultra-deep-water oil, coal-to-liquids, oil shale, and natural gas liquids. In other words, oil that is much more difficult and expensive to produce.

The IEA has been producing annual reviews of the world energy situation for a long time and has not mentioned the term "Peak Oil" (as far as I know) until this year's report. And not only did they mention it, they said that as far as conventional oil goes, it's in the rear view mirror:

Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGL) and unconventional oil grows quickly.

WEO 2010 - Executive Summary

I might quibble that the all-time peak remains 2005 in the US Energy Information Agency data set, but the main point here is that the IEA has not only used the words "Peak Oil" (finally!) but they've done so in the past tense, at least with regard to conventional oil.

The IEA now sees all forms of oil, conventional and unconventional, hitting a high of 99 million barrels per day (mbd) by 2035 (including 3 mbd of 'refinery gains'). Of course, we may wish to take even this tepid estimate of growth in oil supplies with a grain of salt, because in every annual report, like clockwork, the IEA has been ratcheting down its estimate of how much oil we'll have in the future:

click to enlarge images

Assuming that this trend will continue, our prediction is that next year the estimate of future oil supplies will be ratcheted down one more notch. Perhaps by another 6 mbd, to match the difference between the 2009 and 2010 reports?

It's when we eyeball the graph that shows us the breakdown in petroleum sources by type that a few important details jump out at us:

First, pay close attention to the legend for the chart. Starting at the bottom, note that crude oil from "currently producing fields" (dark blue) is already in sharp decline and is expected to decline from a high of 70 mbd in 2006 to ~15 mbd in 2035; a loss of 55 mbd over 25 years, or 2.2 mbd per year. The next band up (gray) is crude oil from "fields yet to be developed," which we largely know about but have not yet really started producing significantly.

My only comment here is that these fields cannot overcome the expected rate of loss in the dark blue band below them. All of the conventional oil that we know about is now past peak. In order to keep conventional oil flat, we have to move up to the third band (light blue), which goes by the spine tingling name "fields yet to be found" - which will apparently be delivering a very hefty 22 mbd by 2035. In other words, the IEA is projecting that in 25 years, more oil will be flowing from "fields yet to be found" than from all the fields ever found and put into production by the year 2010.

Colin Campbell, one of the earliest analysts of peak oil who has decades of oil field experience, is on record as saying that the "fields yet to be developed" category, originally introduced to the world as unidentified Unconventional in 1998, is a "coded message for shortage" and was, off the record, confirmed as such by the IEA. That coded message is getting easier and clearer to receive by the day.

But back to the main story line. Even if the final assessment of future oil production isn't notched down even one more tick, we have all the information we need to spot an enormous problem in the global story of growth. Assuming that we stick with the 99 mbd by 2035 estimate going forward, this represents a growth rate in oil of only around one-half of one percent (0.5%) per year between now and then.

This means that over the next 25 years, the global economy will have to make do with less than half the rate of growth in oil that it enjoyed over the prior 25 years. How will the economy grow with less oil available? What will happen to the valuations of financial assets that explicitly assume that prior rates of growth stretch endlessly into the future?

To cut to the chase, the admission by the IEA that we will not be achieving past levels of energy growth should be the most gigantic red flag in history, at least to those who might care that their money or other paper-based forms of wealth be worth something in the future. What if that future growth does not emerge? What happens when the collateral for a loan goes sour? The IEA report indicates an enormous set of risks for an over-leveraged world reliant on constant growth.

The bottom lines are these:

  • The IEA now admits that conventional crude oil peaked in 2006. Permanently. Any gains from here are due to contributions from unconventional oil and natural gas-to-liquids.
  • Under no scenario envisioned will future growth in fossil fuel supplies be equal to prior rates of growth.
  • Energy from here on out is going to be (much) more expensive.

I cannot state this strongly enough: The WEO 2010 report is an official admission that Peak Oil is not only real, but it's already here.

http://seekingalpha.com


The Consequence of Oil - Part One

The Consequence of Oil from Global Access Media on Vimeo.


The first in a 12 part documentary series investigating the the real effects of the BP oil disaster on the people and environment of the Gulf.

The BP oil disaster has the potential to shift the entire global energy paradigm - IF the public stays focused and aware of the situation and it's consequences. As the mainstream media shifts away from the people and stories of the Gulf, Global Access Media's 12 part series, The Consequence of Oil, will continue to shine a light on the reality and long term effects of this disaster.

Celebratng Fossil River With Literary Manager Kenneth Atchity