Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Joined: Sep 25, 2004 Posts: 4721 Location: Boston, MA
Posted: Fri Sep 05, 2008 5:34 pm Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
It's not an optimistic scenario to react after disaster, it's human nature.
We only respond when a crisis becomes obvious.
DDT, ozone layer hole, deforestation, American Buffalo over-harvesting, massive flooding along the Mississippi.
When the situation gets bad enough, people do their very best to fix it. They don't always succeed, but they make a concerted effort. The current opposition to energy development (waning rapidly as gas prices hit $4/gallon) will drop off even further after our first real blackout.
I also think if we consume even a third of today's energy in 40 years, we'd still be living pretty decently. The infinite material growth mentality is not sustainable and I don't believe it is necessary. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Fri Sep 05, 2008 6:46 pm Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
seahorse2 wrote:
Tyler,
The headline on the Exxon increasing its exploration budget is misleading. This is from the article:
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The capital budget is to be increased about 5.5 percent over the $19.9 billion that the company spent last year on exploration and construction
That barely keeps up with the inflation rate, assuming you use gov't statistics to measure inflation.
So we go from "not increasing at all" to something like "not increasing as much as I think it should". If we want to talk about misleading articles, lets talk about the article that started this thread. Of course you swallowed that one whole. Tyler proved that the average amount that needs to be invested per year worldwide is already being invested, and then some.
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Oil production will begin its inevitable decline shortly, if it hasn't already.
That's seems a little doomerish Tyler. I personally don't think we are there yet. I sure hope not, bc the resulting economic ramnifications of that mean that there will be a depression (which we may be entering one already). If there is a depression for any reason, I don't see how that is good for anybody in any way. Energy supply will not be the problem to deal with, starving masses will be.
If we will enter a depression it is because our financial system is collapsing, not because of PO (or peak anything). Oil will probably peak in 10 years, and that is a long time to wait.
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That's why we have alternatives rushing to fill as much of the void as they can:
First, your chart is a little misleading to others that may not realize that even 20 years from now, oil will provide about 80% of the world's energy needs, something like that. I'm to lazy to look it up right now.
But, if we have entered oil decline already as you suggest we might have, I don't think the alternatives can fill even the modest 4% decline rate predicted by CERA. Further, if we are entering the decline of oil and a depression at the same time, I don't think money will be available to do anything about alternatives etc. There's a lot of speculation there on your part and my part, I hope you're right. I have three kids.
It also seems rather speculative to say "I don't think alternatives can fill the gap".
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I mean that those babies aren't going to be living in a China/India that is growing its GDP at 10%+ a year. Moreover, China's one-child policy will result in a declining population by 2025 according to many estimates. India's fertility rate is falling rapidly as well. Population growth outside of Africa and the Middle East is decelerating.
Interesting, you think China's population will continue to grow until 2025 but they will live like cavemen? I don't know. Something has to give. Takes a lot of energy just to grow food to support an extra billion or two in people, even if all they do is eat and nothing else. So, if we are at the precipice in oil decline as you suggest, I don't know how we will be feeding all these new cavemen by say, 2020. Maybe Maslow will take care of them.
So, arguing "optimistically" that the oil will decline "shortly" and somehow arguing optimistically that China's population will start decreasing in 2025 just does not sound that optimistic to me.
A lot of them don't live like cavemen as it is, and the future fewer of them will. China's population is going to peak around the same time oil does, within 10 years (more or less). It's population will not reach 2 billion, not even close.
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India is a prime example of this. Heavy fuel subsidies encouraged wasteful consumption and are bankrupting the government. That is going to stop.
There's a reason why they haven't stopped subsidizing yet, bc when they do, a billion people will get pissed, and that's just in India alone. Add to that a billion pissed off Chinese and several hundred million pissed of Arabs and that's a lot of pissed off people. If gov'ts are going to have to quit doing that, it cannot end well. You and I may both agree that all good things like subsidies must come to an end, where we disagree is whether this is a good thing or a bad thing. Gov'ts may cease to function, at least for awhile. This will not help rebuild the energy infrastructure, not until the people's anger is spent.
So much of India is subsidized it is ridiculous, but they do it because it helps them pander to get votes. At this point if the Indian government officially ceased to function I doubt anyone would notice, that's how dysfunctional it is. [/quote]
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US ethanol subsidies are driving up food prices and wasting government resources, both candidates seem inclined to cut back on those subsidies.
Both candidates seem inclined to do something about the ailing Social Security system too, but don't hold your breath. Bush, the oilman, approved subsidies even though the oil industry fought against them. The farm lobby is powerful. Paper solutions seem easy, but putting them into practice is not so easy.
True, but farmers are only a small percentage of the total population. If push comes to shove, they would go with the 95% of the people who aren't farmers.
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As for NIMBY problems or rate increases, wait till a few rolling blackouts or 30 cent kilowatt/hour prices ripple through the system. If the government doesn't get out of our way after that, this country deserves to collapse.
There we go. In order for things to turn out optimistically, we have to wait for the worse case scenario to unfold, like blackouts that piss millions enough off to get crap done. As Simmons says, the New York blackouts should have been a wake up call, everyone kept snoozing. Same with the California crisis. No one listens, even hear they don't listen. I've long said that all problems are solvable, if people would just act to solve them. But, most people, 99.9% of them don't even think there is a problem, so the solution? We need a crisis, then, they will act. How is that optimistic?
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People in the US only change when they get kicked in the ass hard enough. It's always been that way.
and BTW, the California crisis of 2000 had nothing to do with electricity generation or infrastructure, but rather it was because of Enron's tampering.
Joined: Oct 15, 2004 Posts: 2256 Location: Arkansas
Posted: Fri Sep 05, 2008 9:42 pm Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
I hope everyone realizes that Tyler's graph does not show what percentage of energy will be provided by alternatives, but is showing percentage growth of alternatives. Although it appears impressive, alternatives are not predicted to provide much, percentage wise, to the world energy production even in 2025.
So, everyone thinks it will take some type of disaster or calamity to get people moving and that's a good thing?
Now, outcast, you don't read my posts very well do you. I have consistently said that the world will not come together, hold hands, and cooperatively invest $22 trillion in energy production and given several examples that fly in the face of that notion - like Russia, Venezuela, etc.
Tyler then suggested we are already spending that amount today, and nothing suggest we are. Even with the western oil majors, the articles linked show that exploration budgets are essentially flat, meaning, not enough to make up for any increase in demand.
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If we will enter a depression it is because our financial system is collapsing, not because of PO (or peak anything). Oil will probably peak in 10 years, and that is a long time to wait.
Now, I never said what would cause a depression did I? However, Tyler said oil has either peaked or will peak shortly. Assuming that to be true, then the critical and unknown fact is what will be the average decline rate. If, for example, CERA is correct that there will be an average 4% decline rate, than it will not be possible for alternatives to fill that gap. That's not an assumption, that statement is made based on the IEA graph posted above and the Hirsh report to the DOE on "Mitigating the effects of PO." At least, I've adopted the assumption of those who have been paid to research and make those assumptions.
Now, if we do have a depression, for any reason, it only means that financing will not be there to move to alternatives. The worse case scenario would be for Tyler to be right, that PO is now or soon to arrive. In this case, we would be fighting a decline in oil production with no money to invest in alternatives.
Now, as for your comment that oil will probably peak in 10 years, this is a guess based on what? And you think that 10 years is a long time? You must be young. I just have my 25th high school reunion, and it seems like only yesterday I graduated from high school. I have a 13 year old daughter who will graduate in a mere 5 years, funny how 10 years to a peak in oil production doesn't seem like a long time to me, certainly not to my daughter. And, if that IEA graph is right, alternatives won't do much to ameliorate a decline in oil production, not now, and not 10 years from now. What do I base that statement on? The IEA graph linked above.
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It also seems rather speculative to say "I don't think alternatives can fill the gap".
Again, based on the IEA graph above and based on the Hirsch report to the DOE, I've merely adopted the assumption of those paid to make those assumptions.
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A lot of them don't live like cavemen as it is, and the future fewer of them will. China's population is going to peak around the same time oil does, within 10 years (more or less). It's population will not reach 2 billion, not even close.
Tyler made the assumption that energy use would decline in a depression despite the fact that world population would continue to grow. I don't see how this is possible. More people means more energy use. I think your statement above confirms what I am saying, yet you seem to want to argue when we say the same thing. You said in the future fewer Chinese, who are growing in population, will live like cavemen. This means that China's energy use will continue to grow, which was my point to Tyler.
Tyler said China's population would peak about 2025. How he came up with that figure, I don't know. But I would hope it would peak now so that we could hope to possible contain their increasing energy needs. Now, you disagree with Tyler and argue their population will peak in 10 years, again, it is unknown how you arrive at this date or what their population will be in 10 years, but at any rate, it only suggests that China's energy demands will continue to grow and alternatives to oil will not be producing enough to offset any declines in oil production at this time. So, something has to give.
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So much of India is subsidized it is ridiculous, but they do it because it helps them pander to get votes. At this point if the Indian government officially ceased to function I doubt anyone would notice, that's how dysfunctional it is.
You don't think India without a gov't would matter? You push the ridiculousness here. What about their nukes? It seems the world is very concerned with their neighbor Pakistan who is teetering on not having a gov't, so why wouldn't we be concerned with an India without a gov't? You need to think more about these extreme statements.
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True, but farmers are only a small percentage of the total population. If push comes to shove, they would go with the 95% of the people who aren't farmers.
You base this on what? So far, you are wrong, so, how do you define "push comes to shove" some sort of depression? revolution?
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People in the US only change when they get kicked in the ass hard enough. It's always been that way.
Have you ever been kicked in the ass real hard? Is that what you are waiting for? to get kicked in the ass real hard before you decide to act? Are you waiting for a blackout? before you go broke or can't find a job before you care? Maybe, just maybe, instead of being the victim, you should be proactive and demand more from your politicians instead of waiting for you to get kicked in the ass by something very preventable.
But, again, you and Tyler both saying it will take a good ass kicking to get anything done on the energy front is what makes me a pessimists. I don't like getting my ass kicked. No one that has ever had their ass kicked financially or physically enjoys the experience. It tells me you haven't been there, be careful what you pray for.
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and BTW, the California crisis of 2000 had nothing to do with electricity generation or infrastructure, but rather it was because of Enron's tampering.
So we shouldn't use that experience to teach us about how we should be moving to alternatives like solar, wind, whatever, which makes us less vulnerable to blackouts? Nothing to be learned about changing laws to prevent this type of energy manipulation? You do realize that one of the criticisms of energy deregulation was the fact that it lead to energy manipulation and also - lack of investment in energy infrastructure. So, I believe there is a lot to be learned from the California experience, but the fact that you don't see that, well, is typical of the average American for sure.
Joined: May 26, 2008 Posts: 1190 Location: Chicago, IL
Posted: Sat Sep 06, 2008 7:06 am Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
seahorse2 wrote:
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Oil production will begin its inevitable decline shortly, if it hasn't already.
That's seems a little doomerish Tyler. I personally don't think we are there yet. I sure hope not, bc the resulting economic ramnifications of that mean that there will be a depression (which we may be entering one already).
I don't see how that's doomerish. World oil decline is inevitable, and it could be upon us any day now. I actually watched a show on IFC and one guest stated we are already short of 1mbpd. That's his opinion, not mine; my oilstick doesn't reach that deep.
As for depression, the govt has been manipulating the "official" statistics for decades. I have no doubt we are in recession, which is second cousin to a depression.
Joined: May 26, 2008 Posts: 1190 Location: Chicago, IL
Posted: Sat Sep 06, 2008 7:12 am Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
Tyler_JC wrote:
I also think if we consume even a third of today's energy in 40 years, we'd still be living pretty decently. The infinite material growth mentality is not sustainable and I don't believe it is necessary.
Agreed. If we get passed the need to sustain constant growth, and live just a little bit more modestly, we can have wonderful lives and life-styles with half or less energy. It's like an engine; to maintain at 100mph is very easy, but to accelerate to 105mph and constantly 5% thereafter requires an enormous amount of horsepower.
Posted: Sat Sep 06, 2008 7:12 am Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
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Now, outcast, you don't read my posts very well do you. I have consistently said that the world will not come together, hold hands, and cooperatively invest $22 trillion in energy production and given several examples that fly in the face of that notion - like Russia, Venezuela, etc.
And not once did I say it would happen. It is each nations choice whether they invest the appropriate amount on their energy infrastructure, if they don't they suffer the consequences.
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Even with the western oil majors, the articles linked show that exploration budgets are essentially flat, meaning, not enough to make up for any increase in demand.
And yet Exxon is increasing it by several billion dollars.
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Tyler then suggested we are already spending that amount today, and nothing suggest we are.
Because different nations have different requirements, and in many places like the US there hasn't been as much investment as there should have been.
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Now, I never said what would cause a depression did I?
A technicality.
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Now, as for your comment that oil will probably peak in 10 years, this is a guess based on what?
A crude awakening said something to this effect, although I can't recall the exact amount since it was late at night when I wrote this and I haven't seen the movie in a while.
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And you think that 10 years is a long time? You must be young.
I turned 23 last summer.
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Tyler made the assumption that energy use would decline in a depression despite the fact that world population would continue to grow. I don't see how this is possible. More people means more energy use. I think your statement above confirms what I am saying, yet you seem to want to argue when we say the same thing. You said in the future fewer Chinese, who are growing in population, will live like cavemen. This means that China's energy use will continue to grow, which was my point to Tyler.
The African population has exploded and yet they [url=http://www.sudankpc.com/rockoil/rockoil.files/mideastafrcons.gif] don't use any more oil now than they did in 1980. China's increased energy use will not come from population growth (a little will) but rather it will be because of economic development and modernization.
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Tyler said China's population would peak about 2025. How he came up with that figure, I don't know.
UN
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But I would hope it would peak now so that we could hope to possible contain their increasing energy needs. Now, you disagree with Tyler and argue their population will peak in 10 years, again, it is unknown how you arrive at this date or what their population will be in 10 years,
I arrived at this based on my guess work, I could of course be wrong. I think it might peak sooner than the UN estimates because the mass migration to the cities will make the one child policy more enforcable, of the young generation (people my age) in the cities a growing number dont want to have children, and even if they do they dont want more than one.
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You don't think India without a gov't would matter? You push the ridiculousness here. What about their nukes? It seems the world is very concerned with their neighbor Pakistan who is teetering on not having a gov't, so why wouldn't we be concerned with an India without a gov't? You need to think more about these extreme statements.
I forgot to put a smilie at the end, and it was intended to be just an exaggeration. Like I said, it was late at night.
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You base this on what? So far, you are wrong, so, how do you define "push comes to shove" some sort of depression? revolution?
I'm not wrong because "push comes to shove" = crisis that would force them to make a choice. We haven't had that yet.
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Have you ever been kicked in the ass real hard? Is that what you are waiting for? to get kicked in the ass real hard before you decide to act? Are you waiting for a blackout? before you go broke or can't find a job before you care? Maybe, just maybe, instead of being the victim, you should be proactive and demand more from your politicians instead of waiting for you to get kicked in the ass by something very preventable.
I don't want any of that to happen, but the problem is that so many people, especially my age, either don't care or don't get it. I tried on a limited scale to convince people of something like this a while back when I was still in the US, but I had no success. People were more concerned with gay marriage than this, if they were concerned with anything at all.
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But, again, you and Tyler both saying it will take a good ass kicking to get anything done on the energy front is what makes me a pessimists. I don't like getting my ass kicked. No one that has ever had their ass kicked financially or physically enjoys the experience. It tells me you haven't been there, be careful what you pray for
I don't wish for it, but I know that is what is going to happen before something is done. I don't live in the US anymore, and so what goes down there isn't my problem anymore.
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So we shouldn't use that experience to teach us about how we should be moving to alternatives like solar, wind, whatever, which makes us less vulnerable to blackouts?
None of that would have helped since the blackouts were done on purpose.
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Nothing to be learned about changing laws to prevent this type of energy manipulation? You do realize that one of the criticisms of energy deregulation was the fact that it lead to energy manipulation and also - lack of investment in energy infrastructure.
Absolutly, but deregulation wasn't reversed because of pressure from the lobbyists.
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So, I believe there is a lot to be learned from the California experience, but the fact that you don't see that, well, is typical of the average American for sure.
Joined: May 26, 2008 Posts: 1190 Location: Chicago, IL
Posted: Sat Sep 06, 2008 7:16 am Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
seahorse wrote:
...alternatives are not predicted to provide much, percentage wise, to the world energy production even in 2025.
I can't speak for the whole planet, but here in the US, most RPS's or look-alike's, are targeting 20-25% by 2025. Granted, lots can happen by then, but that's mandate.
Joined: Oct 15, 2004 Posts: 2256 Location: Arkansas
Posted: Sat Sep 06, 2008 7:26 am Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
Vmar,
There is the belief that the world will somehow come together and cooperatively come up with over $22 trillion dollars over the next 20 years and spend it necessary infrastructure development to meet future world energy needs.
(1) my first disagreement is the world will cooperate on anything;
(2) since it will be left to individual countries to meet their own needs, I don't think that will happen either, for the simply reason that Tyler and Outcasts point out, it will take a serious ass kicking to get people moving;
(3) my third disagreement is that private enterprise is getting it done. I disagree with this statement because bc most of the energy in 2030 will come from oil, not renewables, and the big oil majors are not increasing their exploration budgets. For example, renewables only expected to provide 8% of electricity by 2030.
Futher, saying private enterprise will take care of our needs overlooks the very important role that gov't plays in energy development. To show the key role that gov't plays, I mentioned coal, and said no knew coal plants are being built bc the gov't recently stopped backstopping new loans for coal plants. As you will see, the gov't quit doing this for two reasons: (1) the move to green and the ongoing credit crisis. So, it seems foolish in my opinion to automatically assume that in a credit crisis money will be available to develop any new energy projects; futher, it shows the continued power of NIMBY syndrome.
Now, if two new coal plants are being built in your area, they must have already had the financing secure. Keep in mind that the plants that aren't being built, are plants on the drawing board according to this article.
As for the no new coal plants being built, here is the article I posted on the Olduvai Gorge thread and which I will repost here (my post):
seahorse wrote:
US Federal Gov't is suspending gov't loans to build new coal plants, leaving me to conclude that our lack of foresight and lack of fuel are coalescing to bring us the gorge right on time.
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Loans Program for Coal Plants Suspended
Wednesday March 5, 3:56 am ET
By Matthew Brown, Associated Press Writer
Feds Suspend Loan Program for New Rural Coal Plants Citing Climate Change, Cost Issues
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BILLINGS, Mont. (AP) -- The federal government is suspending a major loan program for coal-fired power plants in rural communities, saying the uncertainties of climate change and rising construction costs make the loans too risky.
My comment: In the past, it was argued that rising energy costs would create incentive to develop new resources. But the exact opposite is happening. Rising energy costs have fuelled inflation, raising the costs of construction, and quickly, as we see here, making new development too costly. Rising costs are affecting not only new coal plants, but new oil development as well.
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After issuing $1.3 billion in loans for new plant construction since 2001, none will be issued this year and likely none in 2009, James Newby, assistant administrator for the Rural Utilities Service, a branch of the Department of Agriculture, said Tuesday.
My comment - Everyone who has looked at the electrical demand issues says there are two huge problems: (1) rebuilding and aging infrastructure and (2) building new capacity to meet growing demand. We aren't doing either as this article indicates. How will we meet rising demand if we are not building new coal plants? Especially since NG has peaked in the US and is getting ready to peak in Canada, probably in 2009? If we don't have the gas, we need the coal, but we aren't building the coal plants we need. This is not good and cannot possibly end well for you and me.
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The program's suspension marks a dramatic reversal of a once-reliable source of new coal plant financing. It follows the announcement last month that several major banks will require plant developers to factor in climate change when seeking private funding.
Hmmm, makes me think that this housing crisis problem, which has caused all credit to freeze, might be he real culprit behind stopping these loans for new coal plants. Its too easy to blame it on the politically correct statement that "we're worried about greenhouse gasses", that's nonsense. That's utter nonsense. The Bush admin has never worried about greenhouse gasses and has refused to sign the Kyoto Protocal, so, why the suddent interest in greenhouse gasses now? I suspect that stopping the loans has more to do with our banks going belly up in this housing crisis than it does with worry about the environment.
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"This is a big decision. It says new coal plants can't go to the federal government for money at least for the next couple years, [b]and these are critical times for companies to get these plants built," said Abigail Dillen with the environmental law group Earthjustice. The group filed a federal lawsuit last year seeking to block the loan program.
Yes, Duncan would agree this is a very critical time to be building new capacity, not stopping it.
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At the time of the suspension, at least four utilities had been lined up for loans totaling $1.3 billion -- for projects in Kentucky, Illinois, Arkansas and Missouri. A project in Montana was denied funding last month. Two more were recently withdrawn: last October in Wyoming and earlier this week in Missouri.
My comment: They obviously projected they needed this new capacity, so how will it be made up and by when? I see a real problem developing.
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Newby said material and labor costs for new coal plants have been rising 30 percent a year, even as utilities struggle to pinpoint future costs of controlling greenhouse gas emissions. The 2 billion tons of those gases produced annually by coal-fired plants in the United States exceed the emissions of any other source.
My comment - Again, I suspect this has more to do with our bankrupt banks being unable to make loans than all the sudden the banks and gov't are worried about greenhouse gasses.
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Newby said those uncertainties prompted the White House's Office of Management and Budget to ask that new loans be put on hold until risks can be better quantified.
My Comment - Yes, the banks can't make the loans, they don't have the capital.
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Rural utilities provide power to about 40 million customers across the nation. More than 60 percent of that electricity comes from coal.
Whether the plants that were awaiting federal loans can find alternative financing remains to be seen.
Associated Electric Cooperative Inc. announced this week it was "delaying indefinitely" its proposed plant in Norborne, Mo., after receiving word of the loan program suspension.
At least one developer, the East Kentucky Power Cooperative, is hoping to wait out the suspension of the loan program rather than seek more expensive loans on the open market, spokesman Nick Comer said.
Two more projects -- Southern Montana Electric's Highwood Generating Station and Basin Electric Power Cooperative's Dry Fork plant in Wyoming -- already are seeking private funding.
A representative of the East Texas Power Cooperative, which has proposed a plant in Plum Point, Ark., also said his utility would seek private financing if the loans are not resumed.
"We'll have to look elsewhere for funding, which will increase the interest expense, which will increase the electric bill for the consumers at the end of the line," said the cooperative's Ryan Thomas.
My comment - Assuming they can find someone to loan them the billions they need in this credit crisis, the next question will be whether the cashed strapped consumers, who may not even have jobs a year from now, can afford the new, higher rates.
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Newby, with the Rural Utilities Service, said his agency is considering imposing upfront fees on coal plant developers as a way to mitigate taxpayer exposure through the loan program. Initial discussions have centered on a 0.2 percent fee -- equivalent to $2 million on every $1 billion in loans.
Newby added he was confident the government would work through the concerns over risk and resume issuing loans possibly as soon as 2010.
My Comment - 2010? That may be too late. How will we meet demand in the meantime? I assume they were planning these additional plants for a reason. But assuming they get all these funding issues worked out by 2010, how long will it take to get the plants built and brought on line? And how do we make up for the shortage in production in the meantime?
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Glenn English, chief executive of the National Rural Electric Cooperative Association, said the program's suspension was a sign of "nervousness" among lenders anxious over the potential ramifications of climate change legislation now before Congress.
Depending on what policies are adopted, retail electricity prices could increase sharply once the costs of reducing greenhouse gases are factored in, he said. Utilities that drop coal-fired power proposals will be forced to shop for more expensive electricity on the open market.
My comment - Assuming the consumer can pay for the more expensive electricity, that also assumes that the extra power can be found on the open market. But with none of these numerous plants being built, with all of them on hold, it sounds like there will be lots of bidding for what little, if any, spare capacity there is. It sounds like the California brown outs were a precursor to what we may be experiencing nationally in the next few years.
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"What you're seeing (with the Rural Utilities Service) is a general reflection of the attitude we find in the financial community, mainly this apprehension about what the future holds and what can be expected out of government," English said.
My Comment - Yes, we wonder the same things here at PO. What does the future hold and what can be expected of our government? Welcome to PO.
In the end, human stupidity, lack of foresight, will push us right into the abyss of the gorge. Everyday that passes, I lose just a little more hore hope that we, as a people, will take a step back. I do believe that all problems are solvable, but I guess not by people.
We also see the current credit crisis affecting new LNG facilities:
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[quote="seahorse"]The news is only getting worse. Not only is there no financing for new coal plants, apparently, the banking subprime issue is also adversely affecting new financing for LNG facilities (which are so necessary for the US to make up for a decline in NA NG production).
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Despite such a recent golden age for the borrowing parties in LNG project finance deals, recent events seem to be conspiring to mark a turnaround in financing conditions.
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Several events have had a major impact on financing:
The US subprime debt crisis of August 2007 and the consequential global tightening of debt markets.
Fiscal instability and toughening terms for international oil companies (IOCs) in upstream gas supply contracts.
Rampant and sustained oil and gas industry cost inflation (2005-07).
Devaluation of the US dollar by some 67% against the euro since 2002.
Volatility and future uncertainty in gas markets, in terms of both supply-demand fundamentals and price. For example, the UK LNG market has deteriorated with the commissioning of new pipelines in 2006; the Japanese market for LNG strengthened in 2007, with significant loss of nuclear power capacity; and the US LNG market remains uncertain because of possible increases in domestic gas exploration and production and the delays in building key LNG receiving terminals.
Less security of offtakes underpinning LNG sales contracts.
Substantial delays and massive cost overruns in some large liquefaction projects such as Sakhalin II and Snohvit.
Lack of skilled personnel and the unavailability of experienced engineering, procurement, and construction (EPC) contractors.
Difficulties gaining regulatory approvals to build new LNG receiving terminals in key markets: California and New England.
Despite a strong global LNG demand and a lack of sufficient supply increases, these events have substantially increased the risks and costs for lenders, which may lead to increased lending margins and make debt financing for LNG projects more difficult to secure.
Joined: Oct 15, 2004 Posts: 2256 Location: Arkansas
Posted: Sat Sep 06, 2008 7:56 am Post subject: Re: Financing The World Energy Industry Requires $22 Trillio
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I don't want any of that to happen, but the problem is that so many people, especially my age, either don't care or don't get it. I tried on a limited scale to convince people of something like this a while back when I was still in the US, but I had no success. People were more concerned with gay marriage than this, if they were concerned with anything at all.
Outcast, I agree with the above, and that's what makes me pessimistic. In all the years I've been here, I don't think I've ever tried to predict what a good "ass kicking" to society means. I only predict that I can see one coming if people don't recognize problems in energy and attempt to deal with them. However, I generally subscribe to the beliefs of Michael Klare in his book "Blood and Oil" that rather than work to solve energy problems, the world will most likely fight to solve those problems. Further, how bad an ass kicking will we take? Hirsh in his report to the DOE outlines a pretty scary picture of an economic ass kicking.
Now, I'm 43, an attorney, and have for years dealt with people who had their asses kicked financially. Its not pretty. I'm seeing more and more of those people lately. What I take issue with is the view by you and Tyler that this "ass kicking" the world is going to take is somehow not that big a deal or is in fact, a good thing. Its not. Maybe you and your families will be insulated from it, but the vast majority of people will not be, and it will be difficult and is already difficult for many.
You made this statement earlier:
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The African population has exploded and yet they [url=http://www.sudankpc.com/rockoil/rockoil.files/mideastafrcons.gif] don't use any more oil now than they did in 1980. China's increased energy use will not come from population growth (a little will) but rather it will be because of economic development and modernization.
The way you and I look at the African example is the difference between u. You seem to suggest or imply that Africa is an example of how populatin can grow even without increasing energy use, like this is a good thing. Africa is a horrible tragedy, where disease, war, famine, crime, inflation, unemployment, genocide, infanticide, are all rampant. You somehow hold this out as an example that everything will be okay. I have said many times that when we look at Africa, we may be looking into our own future. To me, that's a very pessimistic future, and I would like to avoid that future at all costs, especially for my kids. Its no way to live, when it is or should be completely unavoidable. But, as you say, most people only care about gay marriage, so, it seems we have sealed our fate.
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