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The Real Iraqi Crude Story (Hint: It Ain't Iran)
Sadly, media misfeasance (or malfeasance) has become such a common experience that it begins to look like a go-to story on Zero Hedge during slow news cycles. All we can say is that despite its increasingly droll repetition, we think media degradation in all its forms an important issue. So when, just for instance, the mainstream media jumps all over the Iranian "invasion" of Iraq to seize oil wells, despite the fact that the seizure of the well itself is only one of a rather unremarkable series of similar incidents in exactly the same disputed area going back years, and at the same time totally ignores the much more serious news of terrorist attacks on Iraqi pipelines that actually halt about 400,000 barrels per day of crude flow, well, we are just not that surprised anymore. One has to go to Alsumaria, Iraq's satellite channel, to find this story today:
Iraq's deputy oil minister Abdul Karim Al Luaibi said that Iraq expects to resume oil exports from Kirkuk to Turkey today. The pipeline was shut Saturday by sabotage, he added. Earlier on Saturday, Kirkuk oil flow towards Ceyhan Turkish port was halted. It is to be noted that November flow rate was of 404000 barrels per day.
This particular bit of oversight cannot simply be explained away by the lack of a compelling narrative either. The area in question is known for its friendly refuge for the activities of the Kurdistan Workers' Party (hereinafter the "PKK"). Yes, the same separatist (and if you adopt the definition used by the United States, Canada, the European Union, Iraq, Iran, Syria and, of course, Turkey also "terrorist") PKK that gives Turkey fits. One would think that the PKK's potential involvement in the (apparently effective) sabotage of oil assets in the region, or at least the sabatoge in a region known for PKK activity, on a Turkish conected pipeline would be worth noting, particularly where a pipeline cut disrupted serious pipeline flows for days. One would think wrong.
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I have been watching this story closely at stratfor. It is important in many ways. Yes, this incursion was played up and the other virtually unreported at news sites and TV. I see you got it from over seas. Good.
To me the point is that if matters go off the rails, it will be because of this area. For whatever reason, the consequenses will be large.
400kbpd going offline here and there is a significant amount, like half a percent of global production. If there's any rebound in consumption - and it's tough to tell what the consumption figures are - then this can push the world into supply deficit all by itself. Nigeria is subject to the same types of disruptions.
Meanwhile, mature producing fields continue to decline, Burgan, Ghawar, Cantarell. The world's hope right now rests on a steep increase in Iraqi production, but one must really anticipate that if they ramp the production up so sharply, that the field's production lifespan will be much shorter. That's the trend in terms of oil extraction "efficiency," the grail that the PO ignorers rest upon to save us. Oh we'll improve efficiency of extraction and that will get us more oil. No - it merely lets the producers get the oil out faster, basically like sucking with a bigger straw. The side effect is that the field hits a production plateau far earlier and then maintains that peak for 7 or so years and then production absolutely crashes. Trapezoidal-shaped production curves are the norm now, for all fields that went into production in the 70s onward.
We've seen 30% YoY production declines on Cantarell, 15% on Prudhoe, similar for the North Sea. These decline rates are far steeper than the old methods that were employed for the 50s and earlier vintage fields.
Iraq is the last of the supergiant surface fields.
Iraqis are saying they are aiming for 12 million barrels per day over the next 5-7 years. Many people say this is impossible etc. Do you know if there is some information on the web that provides a timeline on this?
maybe they think they can theoretically get to 12mbpd in 5 years. That will require nirvana to break out in Iraq.
Iraq is producing a bit over 2 million barrels per day right now. There is no geologic evidence of which I am aware that Iraq can increase production to more than Saudi Arabia and Russia. None. Zero. Zip. Zilch.
There is evidence that Iraq may be able to sustain 4-5 million barrels per day (mbpd) of production for several decades, which would make it larger than Iran amongst oil producers. But even this would require massive investment to effectively double production.
Statements about 12 mbpd production are simply propaganda intended for the gullible. Even Saudi Arabia, with far greater reserves and far greater investment, barely ever hit that number even a few times and then only by including natural gas liquids in the total production stream (which, while useful stuff, is not oil).
I could believe 4-5 mbpd if peace breaks out, their economic system begins to stabilize, and investment in oil increases by about 150%. Given that I do not believe that these conditions will be met in the next 5-7 years, I am doubtful even about 4-5 mbpd. But a 600% increase to 12 mbpd in that same timer period just doesn't wash.
global guerillas have been following the nigerian story:
http://globalguerrillas.typepad.com/globalguerrillas/2009/12/journal-she...
sounds quite similar yes?
JournoList: Inside the echo chamber
http://www.politico.com/news/stories/0309/20086.html
WaPo's Ezra Klein founded Jlist during his stint at American Prospect where he penned clever pieces as this
As the oil fields open up we realize that Iraq is drowning in the stuff, fantastically more than thought possible. What goes for Iraq goes for KSA and the other Gulf states. Peak oil nonsense designed to make easier the gross manipulation of commodity markets by pigmen. It never made sense to me, why would the oil states exaggerate their reserves? They wanted to drive down the price of their only export? Bull poo on stilts, turns out they were intentionally under stating the true state of their reserves as new fields opened up. Just my opinion, but those who argue the opposite will have to suspend the laws of human nature, and no saying that the oil princes were worried about us all driving electric cars won't cut it, there is no alternative to hydrocarbons until we figure out a way to make that back to the future fusion reactor on the DeLorean. Well let me rephrase that, there is no alternative to hydrocarbons should we want to maintain the current lifestyles most of us fat westerners are accustomed to.
Human nature of greed. Opec nations overstated reserves because in order to prop up the crude price they had to restrain production of members. Each member was restricted from producing a certain percentage which was based from those given reserve numbers. As soon as one member cheated by mysteriously doubling reserves as so to be alloted a larger percentage of production, then they all did it. It strikes me as being a bit more than odd how all these members supposedly found an amazing amount of new oil reserves in the same timeframe.
knothead
Why would US banks exaggerate the nature of their reserves? Why would US banks hide the extent of their losses? Because human beings lie.
I suggest you review the massive reserve "upgrades" of OPEC across the board in the late 1980s. What happened was this - OPEC announced a new quota system where what you could pump (and sell) was tied to your total reserves. Within 2 years almost every single OPEC nation announced huge reserve increases with ZERO new oil field finds. Further, all of those fields had been surveyed and estimated by western oil companies prior to being nationalized.
Graph of Opec Reserve Increases
Most of the reserve increase from that time period therefore is most likely to be fraudulent. Indeed, Kuwait in the last two years has been discovering that the numbers they have been telling the word are less than truthful. There is no reason to expect different behavior from the other OPEC nations either.
Peak oil is not nonsense. The date of peak oil may be near or it may be far in the future, but clearly homo sapiens is using oil faster than the multi-hundred million year processes that create oil can replenish it. Oil is a finite resource. Calculating the exact date of peak oil, like any forward looking activity, is fraught with issues but a peak will occur eventually and then a plateau followed by declining production numbers. Indeed this is exactly what happens to any individual oil field. Given that the earth is finite, why would the sum of all oil fields be different than any individual field when all individual fields thus far are observed to follow this same behavior?
Any intent by an advanced nation to establish energy independence is going to have to rely on something other than the pathetic "Drill, baby, drill" mantra that helped McCain lose the election. My own opinion is that nuclear fission is our best long term bet, if or until we can get nuclear fusion working. I can see solar, wind, tidal, and geothermal all acting as supplements but our base load on the electric grid is so large that I have not yet seen a reasonable proposal from any energy source other than nuclear fission which can cover that load for the foreseeable future.
Oh, and while we have a boatload of coal, it too is a finite resource. And like oil, it has better uses than burning for energy. Our great-grandchildren will probably curse over our gravestones at our stupidity in burning one of the most useful biochemical feedstocks available.
P.S. Saudi Arabia, Iran, Kuwait, and the UAE have never opened a new field even 25% of the size of their largest fields. All new discoveries in those nations have been small fields and small fields are depleted far faster than large fields. Iraq's saving grace is that it was run by a megalomaniac who was unable to develop the reserves he had in any large scale fashion. Further, Iraq's reserves, even the inflated reserve numbers of the 1980s, are still less than half of Saudi Arabia's stated reserves. Don't get me wrong, Iraq has some nice fields to help them pay the bills for several decades but they are not infinite and they will never approach Saudi Arabia's peak production. The key point is that we do have the technologies to solve this problem if we ever muster the political will to do so. I'm not worried about the technologies. I'm worried about the political will. And when I watch the asinine responses to this financial crisis from the US government, I don't get a warm fuzzy feeling about how the US will respond to the real fossil fuel energy crisis when it arrives at some point.
"most useful biochemical feedstocks available"
could you please elaborate on this greyzone? (great comment btw)
Our base load on the American electric grids doesn't affect oil hardly at all. We use oil for plastics and transportation. Only about 3% is used for electricity.Nukes won't solve the planes, trains, and automobile problem. We have more oil than Saudi Arabia ...we should drill baby drill. AND since we conquered Iraq, we should pump it dry...at a fair price to them. Cut the Saudis off.They owe us and they aren't helping.
good lord, this is astonishingly stupid.
56/65 oil producing nations are in production decline.
That means they PEAKED.
http://blogs.telegraph.co.uk/news/jamesdelingpole/100020515/climategate-...
Thanks for the link..Jim was on AJ yesterday...
Climategate
The corruption of Google actually. Search "climategate" on Google. Now only 8,470,000 links. Two weeks ago 31MM. A Bing search yields over 50MM links.
Google "googlegate". Yesterday 33 hits. Only 33. (Update today 23,000)
Bing "googlegate"? Over 70MM hits...
What exactly is Al Gore and friends up to?
Judging from the headlines of the last few months the US is setting up Iran for a potential conflict/war in the next year or so. If the US economic malaise gets too severe it will be a great diversion for an increasingly volatile populace.
Ms. Palin can stick a straw in the Alaskan dirt and pull out that kind of production?
To listen to her, (Ms Palin) That's what is being touted..
I have used a four cylinder vehicles (by choice) since 1986.
News and information manipulation is as old as ancient Chinese Dynastic empires. The only thing remarkable about this example is that even with competing news sources, the average person is about as informed as your neighborhood fire hydrant.
Many have become the fire hydrant. They believe any and all the shit they are fed, no matter how ridiculous, while the dog continues to piss on them. I am truly amazed at the ignorance of people. I was thrown off a political website because I argued some issues of misinformation, while possessing what I considered factual proof. If it wasn't from their news outlet of choice, it was wrong, no debate about it.
We can never fix anything as long as the population is so divided, which is what they want and count on, because they too, know ignorance is on their side. Pathetic all the way around.
There's nothing amazing about it.
1. Force people to subscribe to and pay for an inferior education system that teaches rote memorization at the expense of how to learn ie dumb down.
2. Begin drugging kids at an early age to control "unacceptable" behavior. Listen to the Reckless Kelly song "Wiggles and Ritalin" if you don't believe me.
3. Make recreational drugs widely available to adults so that they believe the answer to every problem comes in pill form.
It's not a new playbook. Use the apparatus of the state to tell people that they're getting the best of everything and they believe it until it all goes to shit. We've believed it for at least 30 years, in spite of the fact that it was screamingly obvious that we were getting jobbed. Nobody gives a care though until it affects them.
I would argue that public education in America has been an overwhelming success. We're clueless drones and that was, after all, the plan. We're also heavily medicated. I watched people in my town get in line to get injected with who knows what to stave off swine flu in spite of the fact that nobody knew if it was a threat.
Every one of these events is a test. 9/11 was a test. Not saying it wasn't real or it was us that did it, just that it gave our gubment the opportunity to see how we'd react. Same with the market crash, swine flu etc.
We are behaving just as they want us to. When they bring the boxcars, they know that most of us will get on. Those that won't they'll kill. They can kill me. It would be better than living in what they have planned for us.
Sorry for the rant. It's just the hypocrisy of it all. This is nothing new. It's too late to fix it now. They know it, even if you don't.
It isn't over unless you give up, I haven't.
Your rant sounds kind of familiar, what news do you listen to?
Good real rant or Read PKDick read a few over the holidays
The Truth Behind The Iran Rumors
The latest rumor comes from the Saudi owned al-Arabiya (partially owned by Kuwait and Persian Gulf States) which announced that 11 Iranian soldiers had taken over an Iraqi oil field. Although this report was denied by Iraq's Deputy Interior Minister Ahmed Ali al-Khafaji, and "A US military spokesman told AFP at Contingency Operating Base Adder", other media sources have run off with it. What was the intention of releasing such 'news'?
http://www.informationclearinghouse.info/article24227.htm
Some Climategate related trivia.
http://www.telegraph.co.uk/news/6847227/Questions-over-business-deals-of...