Demand for Oil So Low, Producers are Running Out of Storage Space

Those poor, poor oil producers. They got really excited last year when oil prices rose to an all-time high of $147 per barrel, and they thought for sure that the prices would just keep on rising as demand continued unabated. But low prices haven’t raised demand, which has dropped dramatically in the past year – and producers are running out of room to store all of the excess.

From Twilight Earth:

Some countries, such as Iran, have filled their tankers with crude, taking it off the market to keep prices from dropping even more. The strategy is to sit on the supply until they can bring it to market for the best price, but oil producers, traders, and processors are unsure where the market is going.

“Nobody expected this. The majority of people out there thought the market would keep rising to $200, even $250, a barrel. They were tripping over each other to pick a higher forecast.” – Antoine Halff, Newedge analyst

The delivery point for oil traded on the New York Mercantile Exchange, Cushing, OK, has storage tanks that hold 10% of the US crude oil, and industry analysts are predicting that those tanks are rapidly nearing capacity. It looks like now is the time for any investor with storage options to stockpile it at a low cost and wait for the demand to catch back up and raise prices.

More than 30 tankers, rented by oil companies, with capacities of 2 million barrels of oil each, are now simply floating storage tanks. The crews are idle, and the companies have them moored all over the world, just waiting. It’s good business for the owners of the tankers, with rental charges up at $75,000 per day.

People are trying to save money, so they’re driving less – and last year’s high oil prices schooled many on the importance of switching to green energy. Demand will likely continue to fall as the economic recession circles the globe.

Does that mean the age of fossil fuels is over? Not quite, as much as we’d like it to be. China, for one, is showing signs that it won’t be moving on to cleaner energy any time soon – they’re stockpiling oil in mass quantities while prices are low.  The world’s number one producer of greenhouse gases went on an oil shopping spree that included deals with oil producers in Russia, Venezuela and Brazil.

Link [Twilight Earth] + [Sustainablog]

Photo credit: Delaware Dept. of Natural Resources

Welcome to the Black Hole of Despair: High Oil Prices Cause Resurgence in Coal Mining

Sigh. This is not good, people. Just when you think the high price of oil will force people to turn to greener sources of energy, they turn back to the tried and true. As if afraid to give new forms of energy a shot, demand is back up for dirty, dirty coal. This is not going to be easy.

The New York Times has it:

But after decades of seemingly terminal decline, Japan’s coal country is stirring again. With energy prices reaching record highs — oil settled above $135 a barrel on Thursday — Japan’s high-cost mines are suddenly competitive again, and demand for their coal is booming. Production has jumped to its highest in nearly four decades, creating a sensation rarely felt in these mining communities: hope.

Soaring commodity prices have had distorting effects across the global economy, driving up food prices and prompting fears of future energy shortages. But they have been an unanticipated boon to the coal producing regions of countries like Japan that had written off coal mining as a relic of the Industrial Revolution.

Please, Oh Flying Spaghetti Monster, don’t let this turn into a worldwide trend. This would send us backward in our progress toward a greener planet. Where high oil prices could have spurred increased funding and interest in wind energy, solar power and other renewable forms of energy, we’re increasing carbon output. How incredibly stupid. Perhaps the human race is hell-bent on destroying itself, after all.

Link [The New York Times]
Photo credit: Flickr user mangpages

Next thing you know ol’ Jed’s a Billionaire- Todays Oil Prices Make Clampetts Billionaires

Jed Clampett, the lovable old patriarch of the Clampett family who struck black gold one day while shootin for some food, would be an incredibly rich Hillbilly had that fortunate hunting accident happened today. You could say he’d be happier than a tornado at a trailer park.

Had Jed discovered that bubblin crude these days instead of 1962 he’d be worth a cool billion dollars. Back in ‘62 when Jed stuck oil in Bugtussel, the price per barrel was around $2.85. Kin folk told Jed move away from there, so The Clampetts loaded up the truck and moved to Beverly (Hill’s that is) with $25,000,000 in Mr. Drysdale’s bank.

Which means, if we do the math …that Jed uncovered around 8.7 million barrels of oil. At any price above $115.55/barrel Jed’s north of 10 figures (a Billionaire). A quick stop to Bloomberg Energy shows crude oil futures currently going for ~$118/barrel.

Wee Doggies!, imagine the party Jed, Granny, Jethro, Elly May, and Duke could throw with that kind of cash- the fancy vittles, moonshine and dancing out by the cee-ment pond. Which would make them all happier than cats a fish fry. Yeehaw.

Do We Have a Right to Quick and Easy Flights to Anywhere in the World?

In the last century, we’ve gotten used to a lot of conveniences. Travel is now extremely easy compared to what it used to be; the long, dusty journeys people used to take just to get a short distance are a nearly forgotten memory. We expect to be easily and conveniently able to get wherever we want, NOW.

That’s why recent news about airline woes and how it could cost us has people worried about the future of transportation. From ABC News:

Nightmare Scenario #1: You’ve got your briefcase in hand, boarding pass in pocket, and your carry-on rolling behind you. You head to the airport with confidence. Except — there are no planes there.

Sound crazy? Keep reading.

Nightmare Scenario #2: You jump in a cab, heading to the airport; you know your airline is there, so no worries about any missing planes. The only problem is, your cab ride to the nearest airport with flights takes four hours.

Impossible? Well, in today’s environment, it could happen. Airlines are bailing out of certain cities and routes. Your city could be next.

“Nightmare scenario”. Interesting choice of words. For the first time in decades, cheap and easy flights from your hometown to your destination of choice aren’t a given. Fares are steadily going up, airlines are charging more for services like checking a second bag and fuel costs will continue to make it all even worse. The idea of airlines cutting routes and cities is a frightening one for many people. But, do we as humans have the right to expect the world to be within 45 minutes of our doorstep?

While technology has afforded us that luxury, it has also contributed to the current mess we’re in. All of this rapid transport has a price, as we’re beginning to learn – both in its contribution to global warming, and the reduction of available energy resources. And unless new technology catches up, we’re likely going to have to make some sacrifices. Being a bit more patient will certainly be a virtue in the coming years. For a start, don’t be the asshole that makes a scene and shouts at some unfortunate employee when your flight gets canceled. It’ll make it a lot less painful for all of us.

Link [ABC News]
Photo credit: Flickr user kyle simourd

The Secret Culprit of Oil Consumption: Plastic Bags & Bottles

If you’re upset about the price of oil, your first instinct might be to point your finger at the usual suspects: the war, suburban housewives driving Hummers to the grocery store and oil companies that are taking the record profits and laughing all the way to the bank. While they’re definitely culpable, one thing you may not have thought of is your own contribution, even if you don’t own a car. Water bottles and plastic bags are a surprising culprit.

The Business Shrink has it:

The most reliable statistics from the Pacific Institute put America’s love affair with water bottles at 31.2 billion liters of water in 2006. Due to negative press on the possible health effects of the use, most people are aware water bottles are sold in polyethylene terephthalate (PET) bottles. In order to manufacture these bottles over 900,000 tons of plastic is needed. The mainstream manufacturing process that produces PET bottles requires a combination of natural gas and petroleum. The petroleum requirement is where the statistics show that America’s obsession could be hurting their wallets at the gas pump.

Bottom line, the production of 31.2 billion liters of water for the U.S. bottled water market took roughly 17.6 million barrels of oil.

America also uses an astounding 100 billion plastic bags per year, and it takes 12 million barrels of oil to produce them. When you add in worldwide consumption, we could save 120 million barrels of oil annually by switching to reusable bags.

Bottled water and all of these mountains of plastic bags are easy addictions to kick. Faucet-mounted filters, reusable bottles and reusable bags make it really easy to avoid consumption of so much petroleum. Honestly, what’s the problem here? Why do people have such a hard time making such a simple switch?

I’ve been carrying a set of cute little reusable bags to the grocery store for years now, and when I first started, the baggers would look at me like I was out of my mind and then acted like filling my bags instead of the plastic ones was some kind of insurmountable chore. Now they’re used to it though, and the more people start doing it, the more expected it will be.

Link [Business Shrink]

Photo credit: Flickr user klynslis