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Jet Fuel Prices WILL Be Climbing A LOT, and Soon

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The Energy Challenge

Maybe the sky isn't falling.




The Energy Challenge
By Alan W. Dowd
FrontPageMagazine.com | June 27, 2007​


Late last week (to be precise, late Thursday night), the Senate passed what the Washington Post hailed as “a sweeping energy legislation package.” (In truth, with its commitment to bio-fuels and higher fuel-economy standards, the bill is heavily focused on the demand side of America’s energy challenges.) Earlier that same day, President George W. Bush devoted some time to speaking about energy issues. The venue for Bush’s speech—a nuclear power plant in Alabama, where the TVA is revving up the first new reactor to come online in more than a decade—was a not-so-subtle reminder that if Americans want to make real strides toward energy independence, it’s time to exploit the nation’s vast energy assets. And nuclear energy is just one of many such assets.
As the Senate quibbled over new MPG standards for SUVs, Bush laid out the good news and bad news about America’s nuclear energy industry: It already provides 20 percent of the nation’s electrical power; it’s clean, preventing the release of 700 million additional tons of carbon dioxide into the air every year; and it can help break America’s unnecessary addiction to foreign oil.

“In 1985, about 27 percent of our oil came from other countries,” Bush observed. “Today, about 60 percent does.” This forces the American people not just to countenance thuggish regimes from afar, but to go to war for them (as in the Gulf War) or against them (as in the Iraq War), or at least to protect them and prop them up (as in the interregnum between those two wars).

One contributing factor in America’s apparent foreign-oil dependence (we will discuss the oil realities below) is the diminutive size of the US nuclear power industry, which remains too small for a country with the energy needs and appetite of the United States. Bush says that energy experts believe the US needs to build three new nuclear plants per year starting in 2015, just to keep pace with the country’s nuclear energy needs.

Yet the US has not ordered a new nuclear power plant since the 1970s. In fact, there were 112 reactors operating in the US in 1990; today, there are just 104. Bush wants to change that, forecasting construction of dozens of new nuclear plants by the end of this decade. In fact, as Sen. Pete Domenici (R-NM) observed during the Senate floor debate, thanks to the Energy Policy Act of 2004, “over 30 nuclear power plants are in the works…We went more than two decades without a single one applying, and we have now over 30.” Hailing America’s “nuclear renaissance,” he notes that once operational, “these plants will provide enough electricity for nearly 30 million American homes.”

In March, the Nuclear Regulatory Commission approved a site in Illinois for the first of these plants. As USAToday has reported, if built, it will be the first new nuclear plant to be constructed since 1979.

The three-decade delay was caused by three little letters: TMI. The failure of the feed-water pumps and consequent partial-core meltdown at Pennsylvania’s Three Mile Island in March 1979 virtually nuked the US nuclear industry. After the near-disaster, which caused precisely zero deaths and zero injuries, orders for new reactors fell from a high of 41 in 1973 to zero. The fact that the two million residents of the area were exposed to one-sixth the amount of radiation absorbed in a typical chest x-ray was irrelevant. The damage had been done, and more was yet to come.[1]

Seven years after TMI, a fire at the Chernobyl nuclear power plant in the Soviet Union released huge amounts of radiation. More than two dozen workers died within months of the disaster, and thyroid cancer spiked among children.

To be sure, the deaths and lingering effects at Chernobyl are tragic. But the disaster should have forced Americans to redouble their efforts to build the safest nuclear plants on the planet. Instead, we did something uncharacteristic of Americans: We stopped building, stopped inventing, stopped pushing the frontiers of technology.

What if we had reacted in the same manner in April 1947, when a port explosion in Texas City, Texas, triggered a massive fire at an oil refinery and killed 500 people? Should we have stopped drilling, pumping, exploring and transporting oil; should we have reverted to windmills; should we have turned back to firewood?

Together, TMI and Chernobyl staggered and ultimately stunted the nuclear power industry in America. Thus, nuclear power accounts for just 20 percent of America’s electrical energy, while it supplies almost 80 percent of France’s electricity needs; 79.9 percent of Lithuania’s; 55 percent of Belgium’s; and 50 percent of Sweden’s. Energy-hungry China has built nine new reactors since 1991, with plans to accelerate its nuclear power program. And fully half of Ukraine’s energy comes from the atom. That’s right: even the place that bears the scars of Chernobyl recognizes the benefits of nuclear power.[2] (The ironies don’t end there: Recall how an energy-independent Iran—with enough oil and natural gas to meet its current energy demands for 256 years—is going nuclear, albeit for different reasons.)
 
cont.


But going nuclear isn’t the only answer for America. There are multiple paths to energy independence, and as the chaos and wars of the oil-rich Middle East continually remind us it is in the national interest to pursue all of them. That includes nuclear energy, bio-fuels like ethanol, hybrid technologies, conservation strategies like those in the Senate bill—and fossil fuels from right here in America.

If you think the United States has exhausted its own reserves of fossil fuels, think again. The Energy Information Administration, a sub-agency of the Department of Energy, reports that, at this moment, the US has 29.9 billion barrels of oil. In other words, the US actually possesses more oil than oil-exporting countries such as Mexico, Norway and the UK.[3]

Plus, there are vast, untapped oil fields and other energy sources inside the US:

  • Just off the coast of Louisiana, Chevron has found an oil field—the “Jack 2” well—with 15 billion barrels of oil.
  • The nonpartisan research firm RAND estimates that Colorado, Utah and Wyoming sit on a goldmine of oil-shale deposits, once thought to be too expensive to convert into petroleum. These states hold between 500 billion and 1.1 trillion recoverable barrels. As RAND’s James Bartis explained in 2005, “We’ve got more oil in this very compact area than the entire Middle East.”[4]
  • As The Economist has reported, drillers have discovered a billion barrels of oil in Sevier County, Utah, alone.
  • Plus, the so-called Greater Rocky Mountain Region holds between 165 trillion and 260 trillion cubic feet of natural gas, which explains why geologists are calling this swath of the US, “the Persian Gulf of natural gas.” (Iran, by way of comparison, sits atop 26.7 trillion cubic meters of natural gas.)
In fact, when we add America’s existing proven reserves to the new finds along the Gulf and in the Big Sky states, the US possesses more oil than all the smug, petroleum-producing headaches of the world—combined. More than Saudi Arabia, more than Iran, more than the UAE, more than Venezuela, more than Russia.

In short, contrary to the mantras of forlorn politicians and newsmen, the “energy crisis” is more a crisis of will than of availability/quantity: The future-fuel alternatives are there—in nuclear power and hybrids and, further down the road, hydrogen. Do we have the will to exploit them? And the fossil fuels are there today—in the Big Sky states and the Gulf and Alaska. Do we have the will to extract them?

The National Center for Policy Analysis (NCPA) has found that “There is no evidence that the world, in general, or the United States, in particular, is running out of fossil fuels.” The very opposite may be more accurate:

  • In 1874, geologists in Pennsylvania (then the major oil-producing state) predicted there was only four year’s worth of oil remaining in the US. Yet by 1945, proven reserves of oil in the US amounted to 20 billion barrels.
  • Between 1945 and 1994, the US produced 135 billion barrels of oil domestically—“more than six times the entire amount known to exist in 1945.” Today, US reserves alone could sustain domestic oil needs for 38 to 75 years.
  • In 1920, the US Geological Survey estimated total world oil supplies at 60 billion barrels. In 1950, the experts pushed that number to 600 billion. By 1990, world oil supplies were estimated at 2 trillion barrels. By the mid-1990s, the estimate was higher yet—2.4 trillion. And by 2000, it was even higher—3 trillion barrels of oil supply.
The reason for this constant upward readjustment is technology. NCPA notes that before the first US well was drilled in 1859, “petroleum supplies were limited to crude oil that oozed to the surface.” But thanks to technological advances, oil is being discovered in new places; and trapped oil is being extracted from old places, as with the oil-shale deposits in the western US.

At a consumption rate of 20.6 million barrels a day, America’s substantial oil reserves are not an endless supply. But they are enough to carry us, comfortably, to what might be called “the post-petro economy.”

Notes:

[1] US Nuclear Regulatory Commission, “Three Mile Island Accident,” www.nrc.gov.

[2] See Energy Information Administration, “Nuclear Power,” www.eie.doe.gov; Foreign Policy, “The List: Sapping Europe’s Energy,” www.foreignpolicy.com.

[3] See Energy Information Administration, “World Proved Reserves of Oil and Natural Gas, Most Recent Estimates,” www.eie.doe.gov.

[4] Jennifer Talhelm, “Study Reveals Huge US Oil-Shale Field,” The Seattle Times, September 1, 2005.
 
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Hi!

My cousin worked at Johns Hopkins Applied Physics Laboratory in Maryland (North of DC), mostly developing miltary missles.

Everyone at his facility wore a radiation badge, due to the type of work carried on there.

A day or so after Three Mile Island, all of their radiation badges were maxed out, with doses beyond what their badges would read.

TMI was worse than the gov't admitted to.

Conversely, the new reactor types are very, very safe, and the death and injury rate with those plants on line are multiple times safer than coal fired facilities (miner deaths, deaths from air pollution, etc.).

The US badly needs new reactors to tide us over until we're using 100% renewable fuels.

cliff
YIP

PS-Jet fuel prices haven't climbed like I thought they would. The other day we topped off and tankered with fuel that cost about $5.90/gal, because the destination airport was $6.90/gal!!!
 
From: Reuters/CNBC

$95 Oil Seen if OPEC Holds Output Levels: Goldman Sachs
By Reuters | 16 Jul 2007 | 12:35 PM ET

U.S. crude prices could top $90 per barrel this autumn and hit $95 by the end of the year, if OPEC keeps oil production capped at current levels, Goldman Sachs said in a report issued on Monday.

U.S. oil prices have risen above $74 per barrel Monday, driven this month by higher demand and lower supplies (FROM ME: DID THEY ADMIT SUPPLY/DEMAND WAS ACTUALLY THE PROBLEM! WOW), the report said, pointing out that such fundamentals could tighten further unless key OPEC members hike output.

"We believe an increase in Saudi Arabian, Kuwaiti and UAE (United Arab Emirate) production by the end of the summer is critical, to avoid prices spiking above $90 a barrel this autumn," the report stated.

OPEC agreed last year to lower output by 1.7 million barrels per day (bpd), and Goldman said global oil production is down about 1 million bpd from last summer's levels.

Disappointing output growth from non-OPEC producers also helped tighten supplies, Goldman said, adding global demand was up by 1 million bpd from year-ago levels.

"Our estimates show that keeping OPEC production at current levels, and assuming normal weather this coming winter, total petroleum inventories would fall by over 150 million barrels or 6.5% by the end of the year, which would push prices to $95 a barrel without a demand response," the report forecast.

So the question is: Can Saudi Arabia increase oil production? Many are saying: "NO" because they're past peak oil with Ghawar declining very quickly.

The "production cuts" were announced after Saudi's oil production had already been falling steadily for 9 months. The cuts have continued month over month except when new fields were brought online which paused the declines. They're probably past peak which isn't good for the world.

Kuwait's Burghan field (second largest in the world) is past peak oil and declining quickly as well, so don't expect them to increase much.

Jet
 
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It's official peak oil is here now.........

From: Canada's Reportonbusiness.com

Oil executives sound alarm about fuel use

OTTAWA -- When executives from the world's largest oil companies say we need to cut back on our consumption, it should serve as the ultimate wake-up call about a looming energy crunch.

Yesterday, the former chairman of Exxon Mobil Corp. and the current chairman of Chevron Corp. led an urgent call for dramatic increases in vehicle fuel mileage standards and the rapid adoption of ethanol and other biofuels.

Without those measures and a host of others, the U.S. could face a punishing energy crisis by 2030 that would spare no energy consuming nation.

The call to arms was issued in Washington yesterday by a committee of the National Petroleum Council, which was chaired by former Exxon chairman Lee Raymond. He was joined on it by Chevron chairman and chief executive officer David O'Reilly.......

With U.S. Energy Secretary Sam Bodman in attendance, the council released an exhaustive report on U.S. and global energy challenges over the next 25 years, and offered a series of "hard truths" about the massive investment, both public and private, needed to meet rising energy demand.....

The council also recommended the expansion of nuclear energy and concerted government effort to develop clean-coal technologies......

Jet
 
From:
Dow Jones Newswires

Dubai Crude Output Down Rapidly As Govt Moves To Crimp Decline
LONDON (Dow Jones)--Production of Dubai's crude oil has fallen as much as a third in the past two years and is a fraction of that recorded in some government statements, company documents show, undermining the already fragile position of one of the world's top three oil price reference points.
Current output in the booming Persian Gulf sheikdom, one of seven semi-autonomous enclaves in the United Arab Emirates, is some two-thirds below the figure released by the national government, according to calculations by Dow Jones Newswires using data from the previous operators of the fields. It has fallen as much as a third in the past two years....

Daily output in the first three months of this year fell to between 65,000 barrels and 80,000 barrels against the 240,000 barrels stated on the U.A.E. government's Web site......

Well that makes another one past peak oil.......

They're trying their hardest to stop the declines and just can't.

Bad news for humans,
Jet
 
A Must, Must Read for anyone interested in their Aviation career:
From: OilDrum blog

This is a thorough analysis of all projected oil projects country by country that shows oil production is in SERIOUS trouble.

The Oil Drum: Updated World Oil Forecast, Including Saudi Arabia
The title says it all. This is quite possibly the scariest analysis post we have done in a long time, folks. Read it, bring popcorn. Amazing analysis, in my opinion.
The supply crunch is imminent. This is a must read for anyone concerned about the future.

(CLICK ON THE GRAPHS to make them larger and easier to read. They're kinda small)

Jet
 
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As supply continues to be less than demand in the 4th quarter (EIA says supply 85mbd and Demand 88mbd) here are two quick peak oil updates:

This first one is an update on world oil production.
The peak for crude oil is still May 2005 and we are 1 million barrels per day below the peak.
Peak oil for TOTAL LIQUIDS which counts ethanol, natural gas liquids, etc is still July 2006 and we're currently 1 million barrels per day below the peak:
Click here for an UPDATE ON PEAK OIL- You MUST look at the current oil production charts

Here is one of the best bottom-up studies I've seen on the future of oil production. They analyze the projected oil projects which take 5-10 years to bring to market and the declines in current fields and countries. They show that the peak was most likely for Crude oil(not total liquids) in 2005 and that the plateau for oil production should continue till 2009 with declines of only 1% per year and then after 2009 should decline at 4% per year.
Click here for the newest PEAK OIL STUDY on the future of oil production including price predictions for the future- You MUST look at the future oil production prediction charts

(click on the main chart to make it larger to see)

The above study also continues on the problems with oil production in Saudi Arabia with their massive ancient field Ghawar that provided over half their oil declining quickly like all other similar fields in history have done including Mexico's collosal declines that are happening in Cantarell.

Both are must reads!

The study shows the situation we face from now till May of next year with supply being less than demand. The Energy Information Agency says supply should stay at 85 million barrels a day and demand at 88 mbd in the 4th quarter. They say this will draw down global inventories (which don't count the Strategic Petroleum Reserve) by 5% in the 4th quarter. So there won't be shortages for a long time since the world has so much in storage but these being drawn down is not good.

Is the current $87/barrel high enough to bring demand down from 88mbd to the supply of 85mbd? Most definitely not. So inventories will continue to be drained until the price is high enough.

Each year in to the future supply is forecast to be farther below needed demand. Their charts are as good as a million words.

Isn't it amazing how besides a few Congressmen that have created the Peak Oil Caucus this is continually ignored by the government!?

The good thing is that even with record oil prices gasoline prices are staying relatively low (for now).

Jet
 
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I do, reality is a b!tch. I think some people are more concerned about a price hike at Starbucks than at the gas pumps.

So what do you propose Rick? Dig your own oil well? Put a huge underground tank on your farm full of fuel that will last you till your dead? C'mon, its out of our control and it will all work out in the end. Besides, whats the worse can happen, die? {hint: you're gonna die at some point anyways..} Enjoy life and let the cards fall where they may!
 
posted March 2007

Skifishfly,

2 billion barrels. That will last the world 23 days....

Plus it won't be on the market for 5-10 years.

Not fast enough to save us this summer if Saudi is past their peak oil like everyone is coming to believe and that they won't be able to increase their oil production this summer.

Global inventories are dropping at record rates right now because oil production is too low for even this slow demand season. Wait till the summer, or like I think when Iran gets hit in the next month or two.

Jet

So nutball...........we still have oil, and we havent "hit" Iran...........what else ya got?
 
Global inventories are supposed to be drawn down 6.5% this 4th quarter according to the EIA because demand is going to be 85mbd and supply 88mbd.

The inventories can't continue to be drawn down this long forever can they? The supply/demand situation is only supposed to worsen.

Jet
 
REMEMBER VOTE FOR GREEN CANDIDATES THEY ARE OUR ONLY SALVATION........WE NEED TO STOP USING SO MUCH OIL FOR ALL THINGS OUTSIDE OF AVIATION. Aviation will always need gas but our other industries and transportation services don't necessarily need it. If they use alternative forms of energy gas prices will stabilize or perhaps decline and we can then get our needed raises!!!

So remember all you knuckle headed republican conservative pilots that the global warming scare is good for us in aviation. No one will want to cut there dependence on flying but they will want to cut their dependence on useless SUV.

So vote DEMOCRAT!!!!
 
So what do you propose Rick? Dig your own oil well? Put a huge underground tank on your farm full of fuel that will last you till your dead? C'mon, its out of our control and it will all work out in the end. Besides, whats the worse can happen, die? {hint: you're gonna die at some point anyways..} Enjoy life and let the cards fall where they may!
Funny thing is I agree with you. I don't sit up at night worrying about this, after all it's out of my control. Peak oil is a reality that will have to be dealt with. The question is how? As far as digging my own oil well it would be a waste of time as I would be out of a job to drive to anyway.
 

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