OGPSS - Oil production within China

If one looks at a map of China, at first it seems to be a land that has been heavily endowed with gas and oil fields. However, with the continued rise in demand for liquid fuel, exploration and development are being aggressively pursued inside the nation, as well as offshore and abroad. Current levels of production, and those planned, still leave an increasing volume that must be imported each year to meet the national demand.

Figure 1. Exploration and Production map for PetroChina (PetroChina )

And yet, as has been noted earlier, while demand has continued to soar, overall domestic production has not changed all that much. China has three major oil production companies, PetroChina, Sinopec and CNOOC, where the last of these, the Chinese National Offshore Oil Company (discussed in an earlier post) deals – as the name suggests – with offshore deposits, and the other two are concerned with onshore production.

According to the 2012 BP Statistical Review China produced an average of 4.09 mbd in 2011, which was a 0.3% increase over that produced in 2010. As mentioned in the earlier post, CNOOC is only able to project a sustained production level this year because of the increasing production from its overseas properties in Canada and Iraq. In the first half of this year they produced some 127 million barrels of oil, close enough to 700 kbd in total, and similar to last year’s average.

Within the country the industry is split between two companies, the China National Petroleum Corporation (CNPC), which has PetroChina as its publically traded division, has some 60% of the oil production and 80% of the natural gas production. Just this year PetroChina was recognized as having passed ExxonMobil to become the largest listed oil producer in the world. With overall production of 2.43 mbd it exceeded the ExxonMobil total of 2.3 mbd in January. (Although it is suggested that PetroChina made only half the profit of its competitor).

One has also to distinguish between the production that the company is able to achieve in China, relative to that which it achieves through its acquisitions abroad. The company shows a domestic record of production that has averaged 2.42 mbd in 2011 with slight rises in production for the past two.

PetroChina domestic production through 2011. (PetroChina)

For the first half of this year the company has refined an average of 2.69 mbd which was expensive for the company given that the sales price for the resulting products are controlled in China. Additional production, to the tune of 343 kbd, comes from their foreign holdings. By 2020 the company intends that this amount (almost 10% of output) will be increased to 50% of the company production. Assuming that it can sustain domestic levels of production this anticipates that it will need to be able to find roughly 1.4 mbd of additional production from sites abroad.

PetroChina, runs, inter alia, the largest field in China, that at Daqing. After the discovery of commercial oil at Songji No. 3 well in September 1959, the field was brought into production over three years. The field was where “Iron Man” Wang Xinji gained national fame through his efforts as an oil driller with the 1205 Drilling Team to bring in the first production well. Production at the field peaked in 1976 at roughly 1 mbd with more than 14 billion barrels of oil now having been produced. Oil recovery is cited at 50%, a rate that is about 10-15% higher that the average in Chinese reservoirs. Just this week the company completed an addition to the refinery there that raises capacity to 197 kbd at that refinery of Daqing Petrochemical. Production at the field itself has now fallen, in overall average for 2011, to roughly 790 kbd, and relies on tertiary recovery using a polymer based flood in a field which has an over 80% water cut. The company believes that more than 70% of the recoverable oil now has been.

Next door to Daqing lies the Jilin Oil Province, containing some 21 oil fields. Of these the Fuyu field was first discovered with the well Fu-27 in September 1959, with full exploration in 1961 though it was not developed to full potential until 1970. CNPC, PetroChina’s parent, runs the Province, which is the seventh largest in China. Last year it produced some 148 kbdoe and this is to be raised to roughly 200 kbd by 2015. CNPC also began production in Iraq this past year, and anticipates some 59 kbd from that source.

The Changqing Oil Field is also operated by CNPC. Discovered in 1971 it reached a total of 800 kbdoe in 2011 with a year-on-year growth in production of some 7 million barrels.

Figure 3. China’s major oilfields (Energy-pedia )

Far out West in China lies the Tarim Oil Field, which has been set a goal of producing sensibly 1 mbdoe by 2020, though more recent announcements have lowered that target by 20%. Operated by PetroChina, achieving that target will move it toward the front of the fields in the country, from its current fourth place. It has a reserve estimated at 100 billion barrels of oil equivalent, and is the largest natural gas producer in China.

Shengli (Sinopec) Shengli field, which is, at around 557 kbd production in 2010 is currently the second largest producing field in China.

Sinopec anticipate that by 2020 it will produce more than half of its oil and gas from abroad and by 2015 expects that it will be close to that goal.

China Petrochemical, Sinopec’s parent, seeks to produce 50 million metric tons of crude a year overseas by 2015. Last year, foreign production was 22.9 million tons. Sinopec said it boosted first-half crude output 4.3 percent to 163.09 million barrels and overseas production jumped 82 percent to 11.13 million barrels.

If Sinopec sustains domestic production at some 895 kbd through 2020, then it will need to find nearly 1 mbd of overseas production to match that in just 3 years. In short, while China is working as hard as it can to sustain current levels of production into the future, in order to meet the growth that they anticipate they will be looking to buy (combining all three company goals) close to 2.5 mbd from overseas deposits.

The big question of course remains as to where that production will come from, and, if we are at a world plateau in overall production, at whose expense will that supply need be met.

P.S. On a continuing note, it is worth remarking that the Alyeska pipeline flowed at an average volume of 430,967 bd in July.

Hurricane ISAAC and the Gulf Coast

The political world is waiting patiently for Tuesday, when the Republican National Convention is officially getting under way, after a postponement due to the nearby passage of what remains Tropical Storm ISAAC. The question that begins to arise, however, is as to whether the political news will be swamped by the consequences of ISAAC’s arrival.

Figure 1. The current prediction for the path of Tropical Storm ISAAC, as it skirts Florida, on its way to the Gulf Coast.(National Hurricane Center)

It has been some 7 years ago that the three hurricanes of 2005, DENNIS, KATRINA and RITA, did a number on Gulf oil production. We have, in the interim, perhaps become a little complacent about the impact of a major hurricane on Gulf oil production. It was DENNIS which did such damage to the Thunder Horse platform back in July of 2005, that it took several years to bring it back into operation. (video here ). DENNIS shut in some 1 mbd, but for only a short time.

Figure 2. The Thunder Horse platform after Hurricane DENNIS in July of 2005. (Youtube )

However it was followed by KATRINA and RITA, so that, between the three of them they covered not only the swath of the ocean that included most of the drilling platforms in the Gulf, but also, as they moved inland, a significant number of the refineries on which the nation has come to depend.

In the seven years since then, the lack of significant hurricane impact on the Continental United States has led to some complacency as to the vulnerability of the country to the hurricanes that have, from time immemorial, threatened these shores.

But it is worth just a quick reminder that the impact is not just seen in damage on shore, grievous though that may become. (I was on a survey team that was one of the early groups that went down the delta after KATRINA). Already platforms are being secured:

The Bureau of Safety and Environmental Enforcement says 39 production platforms and eight drilling rigs have been evacuated as of Sunday. That's about 6.5 percent of the 596 manned platforms and 10.5 percent of the 76 rigs operating in the Gulf of Mexico. . . . . . . The bureau says operators estimate that about 24 percent of the current daily oil production and 8 percent of natural gas production has been cut off.

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The paths of the storms are somewhat different. KATRINA came in more directly from the south:

Figure 3. Path of KATRINA in 2005 (Central Florida Hurricane Center).

The path of ISAAC is currently anticipated to be more direct, as shown in Figure 1, but there are several things to bear in mind, as we move into this week.

Figure 4. Platforms along the Gulf of Mexico (FOX 4)

Firstly it was not only the platforms themselves that caused the problems in the United States after the hurricane season of 2005. There are a lot of refineries around the NOLA area that were damaged at the time, and which have not moved since.

Figure 5. Refineries around New Orleans in the region of the KATRINA hurricane track.

Hopefully between then and now the relevant refinery will have got all the switchgear that gave them problems back then out of the basement and into a less flood-threatened location.

As far as the people that live in the region are concerned, there are two additional worries. The first is that there is some thought that the hurricane may strengthen beyond a level 2, and KATRINA was only at a level 3 when it hit in 2005. The second is the direction in which the storm is approaching. While KATRINA had the full length of the delta over which to lose power, if ISAAC swings in from the East then it will pose a greater threat to the levees because it will impact Lake Ponchartrain.

If the storm tracks west of New Orleans, a storm surge into Lake Ponchartrain could push water against the city’s still-fragile levee system. If the storm makes landfall east of New Orleans, northerly winds on the west side of the storm could still create wave and water problems for the Crescent City. A landfall east of New Orleans could also bring a devastating storm surge onto the Alabama-MIssissippi coast.

. As a precaution rigs and platforms have been put into a protective posture, which has reduced daily oil production by 24% and natural gas production by 8%.

Until the full nature of the threat develops, however, it is thought that the refinery fire in Venezuela may have greater impact, although it is being reported that the damage there was constrained to just two storage tanks. (Not that this is as big a concern to the United States as it used to be:

In the first five months of 2012, the United States imported just over 50,000 bpd of fuel from Venezuela, down from nearly 290,000 bpd in 2005, according to data from the U.S. Energy Information Administration.

And for the people of New Orleans and particularly those in the ninth ward, I hope that this time they have not dredged next to the levees, nor have they left any of the barges less than totally secured.

And, lest the Democratic Party start to feel too superior, there are rumors of another Tropical Depression that might make it more interesting in Charlotte, in early September.

OGPSS - China's offshore oil

The recent post on Chinese claims to territory in the China Sea, mentioned the rush to plant flags on different islands in the South China Sea portion, as a sign of the ongoing nature of the disputes that continue to develop in the region. That status has continued with protests this last weekend in China over Japanese flag-waving over an island in the East China Sea. The islands are called Diaoyu or Senkaku, depending on whether the report is Chinese or Japanese.

Figure 1. Location of the Senkaku/Diaoyu Islands in the East China Sea (Google Earth). The yellow patch shows the rough location of the Shirakaba/Chunxiao gas field. The Japanese claim runs through the center of the field, China says the boundary is to the East of the field (half way between the disputed islands and Okinawa).

CNOOC, the China National Offshore Oil Corporation, and the company designated to handle their offshore deals, has been producing oil and natural gas from the field since at least March of 2011. Back then:

"China has complete sovereignty over the Chunxiao oil and gas field and administrative authority," Chinese Foreign Ministry spokeswoman Jiang Yu told reporters at a regular news briefing.”

The gas field is 7 minutes flying time for the new Chinese air base at Shuimen.

CNOOC has just released their Mid-year Review noting that they are on track to produce between 330 and 340 million barrels of oil equivalent (mboe) this year. They have 10 new discoveries and 18 successful appraisal wells, and have signed an agreement to co-operatively develop coalbed methane onshore in China. (Their realized gas price is $5.90/kcf up from $4.92 over the same period last year.) However they are running about 4.6% down in production y-o-y, which they blame partly on the production outage at the Penglai 19-3 oilfield, in Bohai Bay, due to the oil spill last year. The shut-down reduced overall company production by 40,000 bd, from a field which has been producing at some 160 kbd.The field, the largest offshore discovery in China is run in partnership with ConocoPhillips, came on line in 2002 and was the site of another small spill this June. Production at Penglai 19-3 was restarted in March, with the intention of ramping up to close to the original flow volumes.

The review notes that of the three appraisal wells drilled in Bohai Bay , Penglai 9-1 was the largest oilfield in recent discoveries in the Bay, and it tied in with the discovery of oil at Penglai 15-2 which is some 8 km south. When included with a third successful appraisal in the Bay (Qinhuangdao 29-2) they have collectively expanded the reserves in the Bay area. CNOOC also note new discoveries further north in the Bay at Luda, which originally came on stream at 11 kbd in 2009.

The second largest oilfield in China, the Shengli field, lies just to the West of Bohai Bay but the onshore fields will be covered in more detail in a later post.

CNOOC is also producing oil from the Xijiang oil field in the East South China Sea. This field started production in 2008, when it was projected to produce 40 kbd from fifteen wells.

(Note this should not be confused with the Xinjiang Oil Province in northern Xinjiang Uygur Autonomous Region, which is a heavy oil deposit which the Chinese are developing using a SAGD technique.)

However, oil fields off the China coast have been in development sufficiently long that some are now depleting. The Lufeng 22 field some 150 miles south-east of Hong Kong has been officially shut down in June 2009. It had 5 long horizontal wells, which ran up to 2 km in the lateral.

Thus when one compares production from the different CNOOC sources in the first half of this year, relative to last year, the increasing role that overseas investments will be called up to maintain overall production levels becomes more evident. Those investments are in the Long Lake Oil Sands in Canada which they acquired with Nexen, and the Missan Oilfield in Iraq. It should be noted, however, that this is still up considerably from the 469,407 bd that the company averaged in 2007. However the 450 kbd anticipated from Iraq is sure to help more.

Figure 2. Comparative production from the various CNOOC operations, 2012 v 2011. (CNOOC Midyear Review)

When one realizes that about 25% of the oil comes from the South China Sea, this tends to draw a little emphasis to the ongoing disputes in that region. There are four projects scheduled for production in the region this year, they are Weizhou and Yacheng in the Western South China Sea, and Panyu and Liuhua in the Eastern. Added to these are the discoveries at Enping in the Eastern South China Sea, and Dongfang in the Western.

Figure 3. CNOOC fields scheduled for production in the South China Sea (CNOOC Midyear Review).

Weizhou is actually an old sandstone reservoir that has been in production for quite some time, but CNOOC now has an interest in some of the fields that are still being developed in the region, which lies in the Beibu Gulf. The reservoir has a relatively low permeability such that various different EOR techniques are being considered for the region. The new developments this year should add around 20,000 bd to production in the Beibu Gulf region.

Yacheng is a gas field that has just started production. It is anticipated to reach peak production of around 1 mcm/day next year.

Panyu is a field that CNOOC acquired from Devon Energy and ConocoPhillips has an interest as the operations move into an expanded Phase II, over the 11 kbd which has been achieved prior. Two new drilling and production platforms are being fielded. Weather in the region is considered a problem.

Liuhua, while one of the largest discoveries in the South China Sea, has a relatively heavy oil, with about a billion barrels in reserve, found in a carbonate reservoir. It was originally discovered in 1987, and was first developed in 1993. It was successfully restarted in 2007, with 25 wells producing some 23 kbd of oil, after being closed due to damage from typhoon Chanchu. The new development is Liuhua-4, which has low reservoir pressure, and so will require the use of electric submersible pumps.

Katla twitches

While the earthquakes in the region around Myrdalsjokull have remained concentrated in and around the Katla caldera for some time, they have been relatively small. However I see that one has just crept up above a value of 3. (Barely it is a 3.1). While in itself this is not significant, it continues to suggest that there is activity within the volcano that will, in time, create problems. There has been too little associated activity to suggest that this is, however, anything critical at this stage.

Figure 1. Recent activity at the Katla volcano in Southern Iceland. The star indicates the location of a 3.1 earthquake, and the green shade indicates that it occurred within the last 24-hours. (Icelandic Met Office.)

There is no more.

The Family DNA - the female side, part 1

When I began writing about the use of DNA in confirming some of the stories of history, and challenging others, I was really still only aware of the two major initial areas of study through which DNA was being applied. The first of these, the topic of the last post, was the male Y-chromosome, which is passed down from father to son through the generations, while the second was the matriarchal line, which is established through changes in the mitochondrial DNA passed down from a mother to her children. The study of DNA has, however, advanced considerably in the last few years, and it is now possible to get much more information from a sample and it is worth pausing to describe some of this background, since it makes later discussion a bit easier to follow.

When the body of an individual is being developed, the engine of growth needs a blueprint to follow as the various parts of the body evolve from the original egg. This direction comes from the set of instructions which are held for that individual in the arrangements of the series of sugar molecules, separated by phosphate molecules that make up that person’s Genome.

The solving of the structural shape of the Human Genome rightly brought Watson and Crick a Nobel Prize, as it explained the arrangement and nature of these instructions which lead us to become our individual selves. Our deoxyribonucleic acid (DNA) is made up of alternating sugar and phosphate molecules, with the sugar molecules being one of four basic types or nucleotides, adenine (A), cytosine (C), guanine (G) and thymine (T). The Watson and Crick breakthrough was to see that these nucleotides, or bases, would only fit together with A connecting to T, and C connecting to G, and that these linkages formed the rungs of a ladder which formed the two strings into a single double helix.

Figure 1. The interaction between the nucleotide bases to form the double helix of the DNA molecule (Technyou)

The total set of information comes divided into twenty-two pairs of chromosomes, (or autosomes) together with either a pair of X chromosomes, if a girl, or an X and a Y chromosome if a boy. Normally these cannot be seen, except when they concentrate at the time of cell division, and they normally appear as small thread-like strings within the nucleus of the cell.

Figure 2. The pairs of chromosomes in a human cell, note that they are sorted by size, and that the X and the Y are often referred to as the sex chromosomes because they dictate the sex of the individual based on the presence or absence of the Y. (Genetics Home Reference )

Because the autosomal chromosomes are sorted by length, pictures of them are also (and most typically in genealogical material) laid out in more of a tabular display. I will come back to this layout in a future post.

Figure 3. Layout of the chromosomes, (23and me), the shorter length is referred to as the p-arm, and the longer as the q-arm with the constriction being the centromere.

When a new person is born their DNA forms in their pairs of chromosomes, of which one of each pair comes from the father and the other from the mother. However the two separate parts of the new DNA each are combined out of the information in the pair of chromosomes that come from the parents of each of the new parents. This recombination of two separate strings is not as yet fully understood, since parts of the string come from one parent and part from another in segments, and I will return to this in a later post. But out of the separation and recombination of the parental strings comes the DNA that lies in the new chromosomes of the cell nucleus.

The order of the bases, i.e. the sequence in which they run – for example ATTCAG – carries an instruction, but when the strings separate because of the matching requirement, the mating string on the other side will always form in the same way – in this case TAAGTC, tailored to match the form of the separated string. This occurs all along the string and forms the new DNA within the cell. And after the formation and division of the cells, the DNA spreads out again into almost invisible threads. The DNA itself does not carry out the instruction, but rather provides the information, through a grouping of the bases in sets of three, or triplets. Thus, as Bryan Sykes illustrates, the sequence ATGACCTCCTCC becomes the instruction ATG-ACC-TCC-TCC, with each triplet specifying production of an amino acid (in the sequence, methionine, threonine, serine, pheylalanine, and phenylalanine which are part of the sequence required to generate the amino acids that combine to form keratin which is produced as hair from the hair cells on your head).

However not all the DNA material and the information is held inside the nucleus of the cell. Around the outside of the nucleus, but inside the cell wall, lies the cytoplasm which contains some very small structures called the mitochondria, which are also DNA strings. As with the Y-chromosomes these small units have segments that remain the same from generation to generation, as they are passed down. But, in contrast with the information in the Y-chromosome, that in the mitochondria comes from the original egg, and that originates with the mother. Thus the mitochondrial DNA (mtDNA) comes down the maternal line.

Figure 4. The descent of mtDNA from generation to generation, note that it goes to children from the mother, regardless of their sex, but nothing comes from the father.

When a new person is formed the mtDNA in the child replicates that of the mother. And while the nuclear chromosome is some 3 billion bases long, the mtDNA is only 16,569 bases long and it is evaluated over a range of 340 to 1,000 bases. (Smolenyak). Initially as Sykes noted the analysis was kept to a control block of some 500 bases, since this region known as the control region, where variations in the mtDNA crop up more frequently but, because the section has not defined purpose they do not select out in the next generation. (Mutations in other parts of the DNA chain induce consequences in the person when the DNA is implemented and if the variation causes a significant change, then the person may not either survive or reproduce – thus the code is, to a degree self-regulating).

In passing from one generation to the next there is not normally any variation in the sequences in the mtDNA control, but there are the occasional changes that can slip in. These are very rare, but when one does occur and can survive, then it will be passed on to the generations that follow as children, and then daughter to daughter down through the generations. That change however is unique to a branch of the main family tree, and those not on it do not carry that particular variation as the other branches extend on through time, though they make pick up others. As a result it becomes possible, by looking at the different variations at different points along a person’s mtDNA to establish were along the path of human development, an individual’s family moved. In the same way as with the Y-chromosome the variations are cumulative, so that both the points where branches diverged, and the trunk from which they diverged, can be identified.

In this way it has proved possible to trace back all of those currently alive to an individual, who lived in Africa roughly some 160,000 years ago, and who has been described as “Mitochondrial Eve.” (mtEve)

By looking at the major variations in the mtDNA control, it is possible to identify different changes that subdivide the whole into different subsets, or haplotypes. These (branches) split away at different points in history, and have been given different identifying letters, to help clarify the division.

Figure 5. The sequential change in different segments of the control region mtDNA that has created different Haplogroups. (io9)

Because some of the populations at different points along the paths that humanity has followed from the time of mtEve have stayed in the same place since that time (something which Spencer Wells has documented in Deep Ancestry- Inside the Genographic Project) it then begins to be possible to show the track of an individual’s ancestors.

As it happens we had sent away the Nurse’s sample at the same time as mine, and her result came back showing that the female ancestral line had followed the following path:

Figure 6. Path of our female ancestors through time, showing the different spin-offs of different haplogroups along the way. (The Genographic Project).

The movement out of Africa occurred with the group that was founded by the woman with the variation designated L3, who lived about 80,000 years ago and whose family moved north as the climate conditions changed, first into North Africa, and then over into what is now Saudi Arabia. Along the way the group divided, and while one group (M) moved East and eventually occupied land all the way down to Australia, our group went North and was given the designation N. This occurred around 60,000 years ago, and since there were still Neanderthals around at the time, it is perhaps no surprise that some Neanerthal DNA is now also part of the mix.

Out of the N group a smaller subset at the time, designated R, began to spread away from the central focus of the group. Given the climate conditions of the time, conditions they spread over much of Central Asia and provide one of the common groupings found almost everywhere now. (The changes that allow the discrimination between groups can be approximated – as suggested by Bryan Sykes) to occur roughly every 20,000 years, so this is around 40,000 years ago).

Out of group R the group that would form into the two haplogroups H and V now began to move West. And with the coming of the Last Glacial Maximum moved down into Spain to where it was warmer. This group (and it is interesting to note that my male line turned up in the same place at the same time) became Cro-Magnon man and now dominates the female part of the European landscape.

Bryan Sykes, in his book “The Seven Daughters of Eve”has given the different haplogroups names rather than letters. Since the variations that create the divisions occur at roughly regular intervals he can also give a rough time frame for when the original clan mother lived. (Which are in parentheses). Thus he refers to the branches as Ursula (45,000 BP), Xenia (25,000 BP), Helena (20,000 BP), Velda (17,000 BP) , Tara (17,000 BP) , Katrine (15,000 BP) and Jasmine (10,000 BP), rather than just using the letters, and 95% of European women fall into one of these groups. Our mtDNA designates us as falling into the Helena haplogroup.

While I would otherwise leave the story there for today, there is a small corollary. Bryan Sykes went on to write another book “Saxons, Vikings and Celts:The Genetic Roots of Britain." For what it is worth I think his analysis short changes the region of the borders between England and Scotland, which is where we come from, but the book does show an initial approximation of the Helenic distribution around the isles: (I say initial because the sample size is relatively small.)

Figure 7. Matriarchal clan percentages in Scotland (Bryan Sykes)

Figure 8. Matriarchal clans in England (Bryan Sykes)

I will have a bit more trying to show how to get from Cro-Magnon man to where the family ended up, in another post, and then I will try and tie some of this information back into the Europeanization of America, and back to the original topic, in posts that will follow after the family summary.

OGPSS - Considerations of Chinese demand growth

Three years ago I took my third trip to China, flying this time to Qinghai Province and then taking the train back down from Xining City through Xian to Shanghai. One of the more striking parts of the trip was the first day of the train travel, where the tracks cut down from the Tibetan Plateau to the plains of the East. The valleys are narrow, so that it is often difficult for the train tracks and road to find an easy route, and this led to many tunnels, and, in places, one or the other running on piers up the valley.

Figure 1. Railway causeway set across a valley carrying a second line (photo taken from the first, about to go into a tunnel) the river crosses under the line and runs along the left hillside.

The countryside was redolent with new construction of highways, and the necessary tunnels to bring additional communications into a hinterland that had, in the past, few good roads or methods of reaching into the more remote communities.


Figure 2. Further down the valley it is much narrower and the road and rails run in tunnels (on each side of the river). The current narrow road is being widened but whenever there was a hold-up, the line of trucks waiting grew by miles. (Very few cars).

A historian once commented on the major impact to the American economy and social infrastructure created with the development of the road network and the addition of the Interstate system. When I first went to China in 1987 poverty was rampant, the main method of transportation was by bicycle though I travelled by train and minibus. By the time of the second visit in 2002 the economy was undergoing rapid changes. Their interstate network was being developed, although I remember noting that the train passed many miles of freeway with very little traffic. They are now seeing this gain, but it is a work still in progress, and it, in turn is driving the growth in their oil demand.

Figure 3. Changes in Chinese oil consumption and imports over the past decades (Energy Export Databrowser )

It is important to recognize that there are many parts of the country where these interconnections and improvements to the infrastructure are still going on, and as those changes occur so the increasing use of power-driven vehicles continues to rise, and with it the need for increased supply. The risk of exacerbating popular unrest if that change were to stop is just one reason why it is bound to continue, and with it China’s continued need for additional supplies of all forms of fossil fuels, as well as the rest of those supplies that we all need that come from the earth. And that includes water, a vital resource, but one whose limit restricts some of the options that the Chinese government can adopt.

In the July Monthly Oil Market Report, OPEC note that automobile sales in China were up for May by 22% y-o-y , though this is not expected to change the rate of growth in overall oil demand for the country. In total they expect, as they noted in August, China’s economic growth forecast remains at 8.1%, with an 8% projection for 2013.

Figure 4. Changes in apparent oil demand for China (OPEC August MOMR)

Within that overall demand the relative proportions of the mix change, over time., though it must be remembered, in this regard that China is still building a Strategic Petroleum Reserve of its own, and up to 1 mbd can be fed into this when judged appropriate.

Figure 5. Change in apparent oil consumption in China (OPEC August MOMR)

The problems of traffic congestion, exemplified by the 11-day Beijing traffic blockage in 2010 is leading to some restrictions within the cities. Four cities (Beijing, Shanghai, Guiyang and Guangzhou are now said to restrict car sales (OPEC August MOMR) and electrical vehicles and taxis are being introduced, with a target of half-a-million vehicles by 2015. This is now seen as an area of growth, especially in battery development, and a target of 5 million cars has been set for 2020. And while this might seem to be a market opportunity for the Volt, domestic tax protection has made it a difficult sale to the present.

And a recent report by the Economist indicates that sales of these vehicles have not taken off as hoped, with only 8,000 being sold, largely to government agencies. As in the United States there is an element of “chicken and egg” to the story, in that without a network of charging stations there is a certain amount of caution in committing a higher than normal investment without the assurance of benefit in the very near future. The suggestion is that China may backtrack to a greater emphasis on hybrids before returning to push for the purely electrical car.

This is not to say that there is not a recognition of the need for alternate sources of energy. But in China the general populace has a much better understanding of the limited nature of energy supplies, a lesson that the rest of us will likely have to learn another way. Thus one finds a much wider use of solar power, including for the more mundane use in making tea. It was instructive to see, as we drove down a street in one of the tourist resort towns near a lake, that each house along the street had a large kettle sitting outside, on a solar collecting dish.

Figure 5. Solar heating of a kettle (30 min to boiling)

Many had solar water heaters on the roof also, and while somewhat more unsightly than many systems (mine for example is black plastic solar pipes that blend into the roof) they take up less space and serve their purpose.

Figure 6. Solar water heater (cost around $1,000 installed)

I came away convinced that China is nowhere near the point where it can meet the growing demands that a developing society will have for energy, and that their government will be driven to find creative ways of meeting that increasing demand.

The family DNA - Y-chromosome initial results

Back in June I began what I expected to be a very short series of posts on archeological and biological reasons for deciding when Europeans first came to America. It was motivated by the more European look in early illustrations to the Eastern Native Americans, as opposed to the more Asian look of those further to the West.

As I began to research the topic, however, a number of distractions began to appear, and took time to look into. I have now read about a dozen books on related topics, as well as visiting many Web pages. The study has rekindled my interest in my own ancestors, and I have scraped my cheek, and will soon spit into a tube, as ways of seeing what my own DNA will reveal. In the process of doing all this it seems as though, when my generation and the baby boomers who follow, reach a certain age we get more interested in the past. Thus the apparent growing success of the two recognized sites that provide autosomal DNA testing as well as the mitochondrial and Y-chromosome evaluations that have been the more traditional sources. (I base that on Bryan Sykes’ opinion in his book “DNA USA:A Genetic Portrait of America".) Professor Sykes is former Professor of Human Genetics at the University of Oxford, and Chairman of Oxford Ancestors, a UK firm providing DNA services. The two American sites are Family Tree DNA and 23andme. There will be a separate post to explaining the strides that have been made in the last decade in DNA testing, and why, for example, without seeing more than her DNA sample, the Actress could be told by one of these companies that she had brown eyes and curly hair (which she does), among other interesting information.

I began our own DNA study after reading Spencer Wells’ book “Deep Ancestry: Inside the Genographic Project". Dr. Wells is an Explorer-in-residence at National Geographic, and has been the person most clearly identified with the Genographic Project run by National Geographic, which takes samples of the DNA of different groups and ties them into the spread of mankind from their origins in Africa. The story he told was sufficiently intriguing that I persuaded my sister, the Nurse, to scrape her cheek and to send her sample off with mine to that program.

The reason to do both comes from the two different lines that can be traced back most easily for an individual. These are, for males, based on the Y-chromosome and parts of its structure that do not change from generation to generation, except only through variations that occur at very infrequent intervals Thus, in the particular part of the Y-chromosome that is studied, I carry the same information string as my father, and his father, and so on back through time. (The next post will deal with the mitochondrial DNA line through my sister, that marks the maternal descent).

Figure 1. The passing of Y-chromosome information from generation to generation. (By convention squares are male and circles represent females, and each line down represents a generation).

Because daughters do not inherit the Y-chromosome (otherwise they would be sons) a lineage can “daughter out” if all the children across a line are female, since there is then no path for the male lineage to continue – through that line – but, as I will explain in the next post, there is a part of the male ancestor that still makes it through, albeit in a different form in the autosomal DNA. (And if you want to read ahead you might look at Charts, Graphs and Diagrams).

Thus, by sending away the scraping from my cheek to the Genomic Project I received, about six weeks later, notification that my results had been posted. (The information is passworded and only that which I have approved gets used in the program, with as much anonymity as I seek to have. But, as you may note by my writing about it, I have chosen, for reasons I will later explain, to be quite public).

The information that I received was, relative to all that I now know is available, somewhat cursory. Simplistically it showed the path that my own particular ancestors trod, following the time of the male common ancestor (referred to as Y-chromosomal Adam) who lived about 60,000 years ago.

Figure 2. Path of my ancestors from the time of Y-chromosomal Adam until about 20,000 years ago. (I come from the Cro-Magnon line).

Simplifying the report, relative to the above path, my basic haplogroup (the term for the classification group for my DNA, of which more later) is haplogroup R1b, M343 (Subclade R1b1a2, M269). It is the most common group in Southern England, where 70% of males fall into this category. But the part where we reached England is not covered in the initial National Geographic report. Rather they just spell out the bit that led to Cro-Magnon man.

From the earliest time in Africa the group in which I fall started with a modification M!68 to the initial DNA. At that time, roughly 50,000 years ago there were believed to be only around 10,000 people of the homo sapiens type. And the group was thought to originate in the Rift Valley from which the individual with this marker moved up and out of Africa. The marker is carried by every non-African man today.

A second distinctive marker (M89) developed some 45,000 years ago, as the human tribes began to follow the herds of game into the plains of Central Asia. It is this herd following practice, which led into the herding cultures of the Lapp and other northern tribes across the Arctic perimeter and which, I believe, hastened the speed at which some of these migrations occurred. Although, as Spencer Wells notes in the video “The Human Family Tree” even if the migrations moved at only a mile a year, they had plenty of time to reach the different points along the way, in either the route shown above, or to more distant places such as Australia.

While some did move on to Australia (having had to develop ways of crossing the sea to get there) a smaller group (including us) moved further north and across the mountains and this group with the M9 marker, which developed around 40,000 years ago, spread over much of Eurasia.

The mountains divided the tribes here, some moved further East, to Siberia and then on to America, others went down to India, and others north of the Hindu Kush where the advancing glaciers of the time (about 35,000 years ago). The M45 marker is found as mankind was learning to make tools of other materials than just stone. Smaller flakes made it easier to make more precise tools, and needles were made from bone to make warmer garments.

With the growing cold my ancestors, now also carrying an M207 marker moved west. Some turned south down towards India, but the remainder move towards what is now Europe bringing a new marker M173 to mark their distinction. These were the first of the homo sapiens line to establish in Europe, where Neanderthals had predominated. (And for those wondering what happened to them, there was at least some inter-relationships since the average person today carries between 1 and 4% of the Neanderthal DNA.)

As my National Geographic report states:

This wave of migration into Western Europe marked the appearance and spread of what archaeologists call the Aurignacian culture. The culture is distinguished by significant innovations in methods of manufacturing tools, more standardization of tools, and a broader set of tool types, such as end-scrapers for preparing animal skins and tools for woodworking.

In addition to stone, the first modern humans to reach Europe used bone, ivory, antler, and shells as part of their tool kit. Bracelets and pendants made of shells, teeth, ivory, and carved bone appear at many sites. Jewelry, often an indication of status, suggests a more complex social organization was beginning to develop.

The onset of the Last Glacial Maximum drive humans south, into Spain, where they gave birth to Cro-Magnon man, who carried the M343 marker (as do I) and it is there that the National Geographic report ends. At the time of Cro-Magnon man, as Brian Fagan notes in "The Long Summer" were still hunting reindeer as they migrated through the passes, as the herds migrated through the valleys of south-west France. Ice at the time covered most of the UK.

Figure 3. The extent of ice during the last Glacial Maximum.

One of the options that National Geographic provides is that you can then send your sample to Family Tree DNA for further analysis, and for comparison with a broad range of other individuals who have sent in their samples. I have done that, and in future posts will let you know how that went, as well as passing on some of the information that we got from the maternal side of the blanket, through my sister's DNA, and also for the Actress and how they knew she has brown eyes.

Temperature drop with elevation

This morning I visited Watts Up with That and read a post on the accuracy of the new set of temperature stations around the country. It points out that the new set of stations show, on average, a lower temperature than the record claimed by Jim Hansen.

In his rebuttal to this Nick Stokes points out that the average elevation of the two sets of stations is different and that when that is taken into account, allowing a temperature drop of 6 degC/km then the difference between the two sets of data is explained.

However the original network had an average elevation of 1,681 ft (512 m) and the new network has an average of 2,223 ft (667.6 m) giving a difference of 155.6 m or an anticipated temperature difference of 0.1556 x 6 = 0.93 deg C.

Well, in the state data that I calculated some time ago I plotted the temperature against elevation and so I quickly (too quickly as I found out) went through the various posts for the different states shown undeer the Follower pictures on the right hand side of the page, and listed them with the average slopes of the graphs I had plotted. Ran an average, and posted the result on WUMT.

Turns out I made a slight error since I plotted the temperature in deg F and the elevation in meters, so that the correlation I got was in bastard units. And I mis-entered one of the data points into the table. It translates, when done correctly into an average decrease of 0.016 deg F per meter, or 0.0089 deg C per m, 8.9 deg C per km, 50% higher than that quoted by Nick.

For those interested I have tabulated the average slope against average state elevation and then plotted it, just for grins.

Figure 1. Temperature trend with average elevation for each of the Contiguous United States

What is interesting (apart from the two negative values for North and South Dakota) is how the trend shifts as one gets closer to sea level. I did not plot this relative to their actual distance from the sea, but it reinforces my conclusion that the sea temperatures have more of an influence than we are giving them credit for.


There is no more

OGPSS - Tensions over oil in the South China Sea

In the introductory remarks to these posts on Chinese energy supplies and usage, I mentioned that one of the concerns beginning to be evident lies in disputes over the ownership of some of the oilfields offshore. Disputes over ownership have been continuing for some time, and this week was no exception, with Chinese moves to create a new city, Sansha, on Woody Island and thereby strengthen their claim to the region. Woody Island, or Yongsing lies in the Paracel chain of islands in the South China Sea.
(The post has been slightly modified to recognize the speculative nature of the overall resource available.)

Figure 1. Location of the current region of dispute in the South China Sea (Agency France Press)

Ownership of the territory, and underlying potential hydrocarbon reserves, is a matter of dispute between several countries, although China has administered the region since a 1974 conflict with Vietnam.

The Chinese government declared the establishment of Sansha last month, saying its role is to administer the disputed Paracel and Spratly archipelagos and surrounding South China Sea waters, which are believed to hold oil and natural gas deposits. The islands are claimed in whole or in part by Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam.

The China National Offshore Oil Corp (CNOOC) has recently sought foreign interest in exploring nine blocks in the region, coming as close as a mile to the Paracel Islands – a region that Vietnam claims lies within its territorial waters, and which it used to occupy.

Further south, near the Spratly Islands, the dispute switches to include the Philippines with the latter already getting bids for some of the blocks, which the Philippines also claims lie within their 200-mile territorial waters. The benefit that China achieves by claiming the Spratly Islands can be seen by looking at the change that this brings to their territorial waters, in contrast with those of the other adjacent countries.

Figure 2. Disputed territories around the Spratly Islands, and the territorial waters in dispute. (EIA ) The extent by which the Spratly’s extend Chinese territorial waters can be understood from the location of the red line showing their claims.

In more detail, the areas of dispute can be broken into more specific locations, names that will likely become more familiar as these disputes continue to fester. The actual amount of oil and gas that might be available is still relatively speculative, since there has been little actual drilling in the region, as yet. However, by some estimates, much of which is Chinese, the region is thought to hold up to 213 billion barrels of oil, more than that left in the Saudi reserve. On the other hand, as Joules and Art have reminded me, the USGS estimates put the total at only on the order of 20 -30 billion barrels. Only drilling into the putative fields will realize an answer to that question, but then this turns to the debate into who gets to sell the permits for such drilling.

Figure 3. Regional identifying names in the South China Sea. (Next Big Future )

The disputes are now moving to possibly bring in additional players, with China already accusing the United States of meddling, and this just after Secretary Clinton had appeared to make some progress in defusing the tensions.

These tensions in the region are not new, and in his book “Resource Wars” Michael Klare listed some of the conflicts that had taken place between some of the involved parties in the years to 2001, when the book was written. In several cases shots had been fired and people died, as the different nations tried to establish claims, most particularly to various, otherwise uninhabited islands in the Spratly Islands.

In 1974 China seized the Paracel Islands from Vietnam, and in the resulting conflict a Vietnamese naval vessel was sunk, and several soldiers were killed.

In 1988 the Chinese and Vietnamese navies exchanged shots at Johnson reef (video here ) with Vietnam losing three ships.

In 1992 Vietnam accused China of landing troops at Da Luc Reef, and China seized 20 cargo ships in the ongoing dispute. Both parties have landed on different islands as a way of seeking to claim the territory and the Vietnamese Parliament has just (2012) passed a law establishing sovereignty over the Paracel and Spratly Islands. This has raised more tension with China.

The conflicts are not just between China and Vietnam, in 1995 the Phillipine government discovered that China had built a military base at Mischief Reef, which lies some 150 miles from Palawan Island, and as Michael Klare notes, well within the 200 mile territorial waters of the Philippines (which extend 200 miles – to simplify the explanation of the nuances of maritime law). Given that there are mutual defense treaties between the USA and the Philippines (dating from 1951) and that China militarily rebuffed the Philippine ships sent to investigate, created new tensions in the region. An Army War College review paper has noted the military buildup that is now occurring:

Aside from China's long-term modernization plan for both her Army and Navy, Brunei, Malaysia, and lndonesia have purchased aircraft from the United Kingdom. Malaysia bought guided missile frigates from the United Kingdom and lndonesia purchased sixteen corvettes from the former East Germany. Even the financially strapped Philippines is acquiring Italian aircraft and is also considering an additional $14 billion for defense modernization. The possibility of a regional arms race is clearly very real, if not already underway.

The situation at Mischief Reef has continued to evolve. As Strategy World notes:

For over three decades China has been using a gradual strategy that involves first leaving buoys (for navigation purposes, to assist Chinese fishermen), followed by temporary shelters (again, for the Chinese fishermen) on islets or reefs that are above water but otherwise uninhabited. If none of the other claimants to this piece of ocean remove the buoys or shelters, China builds a more permanent structure to aid passing Chinese fishermen. This shelter will be staffed by military personnel who will, of course, have radio, radar, and a few weapons. If no one attacks this mini-base China will expand it and warn anyone in the area that the base is Chinese territory and any attempts to remove it will be seen as an act of war. The Vietnamese tried to get physical against these Chinese bases in 1974 and 1988 and were defeated both times.

Since the initial incident the small base at Mischief reef has been expanded into a more substantial military base, whose presence is now being used to justify a Chinese objection to the Philippine authorized drilling for oil off Palawan Island. The Chinese have also prepared to start drilling around Palawan Island, bringing the Philippine Navy back into the dispute.

And further north the Chinese Drilling Ship the CNOOC 981 has begun (in early May) to drill around the Paracel Islands. This is the first deep water well that the company has drilled itself, the fifteen earlier such wells being drilled by CNOOC partners. The exploration vessel Ocean Oil 708 is now also working in the disputed region.

Although the tensions have not accelerated as swiftly as Michael Klare anticipated when he wrote “Resource Wars” over a decade ago, they are nevertheless indicative of the aggressive position that China is taking to secure as much oil and gas as it can for future needs. With the modernization of their navy there some quite serious concerns developing over their future plans, since territorial issues can lead on to much greater conflict that we have seen so far in the region.

The disputes has now spread to Scarborough Shoal where an initial arrival of Chinese fishing vessels has been followed by support vessels from Chinese government agencies. Scarborough shoal lies 124 miles from the main Philippine island of Luzon. However

China insists it has sovereign rights to all of the South China Sea, even waters close to the coast of other countries and hundreds of kilometres from its own landmass.

This makes claims for even the smallest piece of land projecting from the sea more critical.

Figure 4. Raising the Philippine flag over part of Scarborough Shoal. (News Com)

Figure 5. Chinese flag flying over Scarborough Shoal (or Reef) (Huang Yang Dao Google Earth)

OGPSS - introduction to China

When I first began this review of future production from the different oil producing countries about fifteen months ago, I produced this list of the relative performance of the top 30 producers.


Figure 1. Top 30 oil producing countries (those increasing production over 2009 are shown in red). (Click on the table to enlarge it)

So, after covering the top three the question becomes which country should be covered next, given the changing ranking? The United States is now producing some 6.36 mbd of crude oil, and after a steady rise in production seems to have, transiently perhaps, reached a plateau. The number given in the table above includes ethanol and refinery gains, among others, and OPEC considers that the total average production this year will be 9.8 mbd. (MOMR)

Figure 2. US Crude oil production for the past year (EIA TWIP) OPEC consider that Russia will average 10.34 mbd this year, and is running just under that number this month, and Saudi Arabia is running at between 9.89 and 10.1 mbd at present. As one moves beyond this top three China has now moved into fourth place with a reported production of 4.22 mbd. (OPEC MOMR)

China’s supply is expected to average 4.22 mb/d in 2012, an increase of 80 tb/d over 2011 and steady from the previous month. China’s output in May averaged 4.19 mb/d, also steady from the previous month and the same month last year. However, cumulative production till May 2012 indicates a decline from the figure for the same period in 2011. This has been mainly due to the shutdown of the Penglai field, while healthy production from the Changqing field, which reached a record level in May after 40 years of operation, has partly offset the decline.

As the initial table above shows, China has been lagging Iran in production, but even as China has grown production, that in Iran has slipped. OPEC report that (again depending on who one believes) Iran is producing between 2.96 and 3.76 mbd. (The latter is the Iranian number). Iraq is still running either slightly ahead or behind at 2.98 mbd. Iran may therefore be moving from 4th to 6th in production rank.

Even as China’s production has crept up, and against an EIA estimate of 20 billion barrels of reserves, these numbers are being dwarfed by the rate at which demand is rising.

Figure 3. Comparison of Chinese crude oil production and consumption (Index Mundi)

The EIA notes that this ranks the country as second (to the USA) both in terms of overall consumption, and also of imports (running at around 5.5 mbd).

As the demand for fuel for China has increased over the past decade, the country has been assiduous in seeking resources abroad which can provide future supplies. Although at present some of these resources are selling to other markets their products can be “swopped” for that from other sources which can be diverted to China. (Nexen which CNOOC has just moved to acquire produces 213 kbd.) It is worth noting the comment that:

the acquisitions will help China "lower the risks when energy shortages become an urgent problem in the global market."

Also this week Sinopec bought into 8% of the production from the United Kingdom (1.8 boepd) as it purchased 49% of Talisman.

China still gets most of its energy from coal, (71% in 2008 according to the EIA review)

Figure 4. The sources of Chinese Energy (EIA)

At a time when India has just emerged from two days of blackout vulnerabilities outside of the availability of the fuel itself are ubiquitous and equally well hold true in China where both domestic and imported fuel must make its way through a crowded infrastructure to the point of use.

Oil and natural gas are more easily transported in pipelines, though the large distances and the mountainous terrain in regions of the country does not make that construction easy. China has, however, been willing to invest in such pipelines to gain access to, for example, natural gas supplies from Turkmenistan. Until the advent of the pipeline in 2009 the Turkmen were stuck with having to sell their natural gas through Russian pipelines into Europe, and had to take the price that they were allocated. With the opening of a second market, this was foreseen as a considerable boost to both countries. However there have since been some further negotiation of price, as the global market has changed. Those negotations are now complete and flows will increase to some 65 billion cubic meters/year (bcm/yr). It is anticipated that this will cut the need for China to import additional volumes of natural gas from Russia. To date some 20 bcm have been shipped from Turkmenistan through the 1,830 mile pipeline since it opened in 2009, and field development in Turkmenistan is proceeding to provide the volumes required by the new agreement.

In terms of their own resources China has a number of large oil fields, ownership of some of which (the offshore ones) is not always completely agreed.

Figure 5. Major oilfields in China (Rigzone via EIA ).

The development of natural gas resources from shale has yet to begin in China, but as the Polish experience has shown, it is too early yet to predict that this might achieve the success of that in the United States.

As with oil China has significant quantities of coal, but still imports large quantities from abroad to meet the distributed demand across the country. It is not used purely for electric power generation, in the far West houses are transforming from mud brick to baked brick, with all the local brick works fired by coal, in a region which otherwise gets its power from hydro-electric plants.

Figure 6. The coal fields of China (USGS )

There is, in short, a fair amount of complexity to the Chinese energy story, which will form the focus of the next few posts.