Global oil supply and Bárðarbunga

Some time ago magma started rising in the rocks near the Bárðarbunga volcano in Iceland, and after weeks of increasingly intensified earthquake activity, the first signs of eruption were found to have occurred under thick ice within the last week. These were not that visible to the general public. That eruption was followed by a second, where there were some streamers of magma across the surface, without causing any significant airborne dust to interfere with aircraft.

The delays in dramatic eruption footage, and the early decay in immediate activity has led a number of folk to anticipate that the risk has declined and for some the risks from the eruption are over, with one scientist commenting::

"If this eruption persists it could become a tourist attraction, as it will be relatively safe to approach, although the area is remote,"

Figure 1. The eruption at Bárðarbunga (from the first webcam) at 5:40 pm Aug 31.

Figure 2. The eruption at Bárðarbunga (from the second webcam) at 9:00 pm Aug 31.


The eruption is continuing and will likely continue, and potentially significantly worsen, over the next several months. Yet, in the world of instant highlights, headlines and Twitter the risks from the long-term eruption (which can be horrendously severe) are immediately glossed over as the eruption fails the “dramatic event” test.

This is uncomfortably similar to the situation that one sees when writing about “Peak Oil”. One can, on any individual day, find comforting headlines that tend to gloss over the longer-term problem that is being written, in increasingly large letters on the predictive wall of our future. But that does not hide the potential disaster that it presages, it merely conceals it from the general public.

The headlines are those that are short-term, and deal with the drivers for the daily fluctuations in oil price, rarely do they back off to look at the overall threat that the situation may presage. Similarly the eruption in Iceland looks relatively tranquil at the moment, but may be of a similar nature to that of 1783, which created, over a period of months, an absolute disaster in Europe, and may have been one of the contributing causes to the French Revolution. The problem with the oil crisis is that there is no similar history to look back on. (Not that this would matter to those “editors of the moment” who control the daily press).

If one were to step back from concerns over daily price fluctuations for oil and gasoline, and consider the import of the trend in international politics one could very easily be aghast at the situation. Not that one might tell this from the headlines.

Consider that, of the three international leaders in oil production, one – Russia – is currently set on a course that may well lead the rest of us into World War 3. As a consequence is likely to be unable to attract the financing that will allow it to even approach the current levels of oil production that it need to retain current production levels in the years to come.

The second of the three is Saudi Arabia. Glossing over any problems that the Kingdom may run into in the next couple of years with the terrorism that is sweeping though its neighbors, it is a country that has realized that today’s cornucopia is about over, and it must seriously invest in exploration and development. The KSA recognizes that if it is to have a chance at being able to even meet the bills for domestic consumption, let alone export income, as the years move onward, it must find new oil. Again it would seem that global commentators fail to realize that, while KSA is recognizing the problem, any finds of “elephantine fields” would require huge investments of money and time, given that they are now likely to be off-shore and sour (as with Safaniya and Manifa, even if such fields exist, which is very doubtful).

The Kingdom has repeatedly stated that it will not increase its production over current levels, despite the assumption of many commentators that they will have to, if global balance is to be retained between supply and demand. Put bluntly, their analysts have realized that, without new reserves that are currently still to be found, they will be unlikely to be able to meet even current targets without major new field finds. Yes, they have fields that are found and available, but in relative terms they are tiny when set against the current levels of production. (Bearing in mind that a 5% reduction in production per year from existing fields, a level now increasingly found to be overly optimistic, would still cut existing production by 450 kbd).

And so, gentle readers, as we have so often in the past, we return to prognostications of future American production. This should, realistically, be focused on the production from the USA, since that in Canada is tied to production from the oil sands and that is only likely to change at a slow (one might suggest geological, but that would be a little harsh) time frame.

And in the United States hope continues to focus on an assumed linear increase in production, month on month, from the Bakken and Eagle Ford Shales. That this is denied by even the local authorities (who also note that the Bakken is named after a local farming family). Their current estimate (assuming more than 200 drilling rigs, and there are currently only 192 is that the fields will peak in 2017, and will start to decline in around 2026. The problem with that estimate relates both to the number of rigs employed (which have to be higher) and the quality of the remaining reserve (which is highly unlikely to be of equivalent value to that which is now, or has been, developed in the past.

I would venture into the second tier producers, but they include those that lie in the MENA (such as Iraq and Libya) and are in even worse condition than KSA, and yet, as documented here repeatedly, these states seem increasingly unlikely to meet projections and thus are an ongoing and significant threat to a balance between global production and demand.

The global economy, and particularly the economies of the Western countries, are tied to a cheap source of energy and power – on which their industrial clout is based. Remove that underpinning, and the writing is clear on the wall about this, and current levels cannot be sustained.

But, as with the wish of the press to get “beyond” the “yesterday’s story" of Bárðarbunga, so the reality of the energy situation is unlikely to be recognized until, as with the Iceland volcano. its effects become too evident to ignore.

Tech Talk - complacency does not see the slow erosion of supply

There has been some talk this week over the volumes of oil and natural gas that is being produced in America, with the WSJ, for example, noting that the US is on track to surpass the volumes produced by Russia. Given that Russia is the leading producer of crude oil at the moment, in August OPEC noted that their production was running at 10.51 mbd, in which month they noted that Saudi Arabia was producing 9.96 mbd. OPEC carefully give two numbers for US oil production, total production is given, for August, as 10.88 mbd, but of this only around 7.2 mbd is crude oil. (While the 9.96 mbd of Saudi production is their crude output, and they also produce some NGL’s from their gas production, as well as seeing some refineries gains as their processing capacity increases). However the WSJ notes that the grand total for the US also contains oil, natural gas and other related fuels to reach the 22 mbdoe, relative to the 21.8 mbdoe that Russia is estimated to be producing.

While the overall impression that is being bandied about, that the US will become energy independent, has been shot down more than enough times (see for example Chris Nelder, last year) there remains, however, a broad complacency that, with increasing production from tight rock, in both oil and natural gas, there is no reason to have concern over future supplies.

If one looks at the make-up of the US supply of energy, natural gas has been steadily increasing its share, as has crude oil, to the cost of the coal market.

Composition of the US energy supply sources, supply shown in quadrillion Btu’s (EIA )

The break-out for June gives more explicit figures:

Figure 2. US Energy supply by Source for June, 2013.

The gap between supply and demand for petroleum products (particularly for transportation) can then be assessed by looking at the consumption side of the equation.

Figure 3. US energy consumption by sector (in quads, EIA )

The bull stirring in our China shop (pottery variety) continues to be the levels of petroleum that we need, and that is unlikely to decline all that much in the intermediate term.

The problem that the world faces is that the balance between available supply of crude oil and the demands for it now lie within very narrow range of production. It is still not that much more of a concern that additional oil this month comes from the US, rather than the Kingdom of Saudi Arabia (KSA) since, give or take a few weeks, supplies can still be purchased from different sources and rapidly shipped by tanker to where it is needed. But if the US were to be asked to meet an additional production need of 1 mbd over existing supply, because of even a short-term failure of supply from another country, it would not be able to meet that demand. (Short, that is, of draining the strategic supply).

Most of the other countries in the world are in a similar predicament. And that includes Russia. Russia gets more than half of its budget from oil and gas revenues, and with their economy flattening out it needs more revenue. It would help considerably if that help came in increasing volumes of oil and gas for export. But the remaining oil and gas deposits are being found in more remote parts of the country, where the expense of not only drilling the wells, but also of getting the product to market, requires a very large capital and time investment. Thus, while it would be nice if they could, they can’t be expected to meet an upsurge in external demand by turning the odd tap on an oilfield to produce additional supply.

And if one goes around the world, as I have been noting recently, outside of the KSA, there is virtually no-one else who can relatively rapidly respond to bring the global market into balance. But even the KSA capabilities to meet that demand are limited. I would suspect that they would get uncomfortable if they had to produce over 10 mbd for any length of time.

And this is where the kicker in the story lies, because, if that is the case, and conflicts around the globe continue to nibble away at the production capabilities in places such as Sudan, Iraq, Libya and their neighbors, then the additional global reserve between available supply and demand is going to increasingly tighten. It is a relatively imperceptible change every month. A little less oil flows down the Alaskan pipeline (439,686 bd in August against the average ytd of 528,572 bd); South Sudan is running about 100 kbd behind the figures for January 2012; Libya continues to suffer from the actions of the militia that control two of their oilfields to the point that production is now around 1 mbd below normal production for the country. There are some indications that the situation is now improving, with flows returning to around 700 kbd but this is still only half of the original volumes. And while the problem is political, rather than technical, the optimism of the Libyan oil minister who projects a return to production levels of 1.6 mbd is perhaps difficult to justify realistically.

Figure 4. Recent changes in Libyan oil production (WSJ )

Libya is, perhaps, with Iran, an exemplar of the nations with the potential to produce more, but who are constrained by immediate political problems. Iraq, who might otherwise also be in the group, is challenged also to develop the fields that are required for it to bring in the additional volumes of oil to the world market.

If these countries remain at their current levels of production, and there is little to indicate any positive change in the near term, then the narrow band over which KSA production fluctuates to keep the balance may not be enough for much longer.

Complacency that there is currently enough oil and natural gas to go around, at current levels of price, lets the market focus on other, more immediately pressing issues. But the slow erosion of the remaining global production surplus continues, and accumulates, and the time when this becomes evident may only be when that reserve no longer exists. And that may not be nearly as far into the future as most seem to expect.

Tech Talk - Oil Supply, Oil Prices and the Kingdom of Saudi Arabia

From the time that The Oil Drum first began, and through the years up to the Recession of 2008-9 there was an increase in the price of oil, and that resumed following the initial period of that recession, and, in contrast to the price of natural gas, oil has recovered a lot of the price that it lost.

Figure 1. Comparable price of oil from 1946 (Inflation data)

And if one were to draw a straight line on that graph from the low point in 1999 though now there hasn’t been a huge variation away from the slope of that line for long. That, of course, does not stop folk from pointing to the very short, roughly flat, bit at the end and saying that oil prices are going to remain at that level, or are even about to decline.

To address that final point first, I would suggest that those making such a foolish prediction should go away and read the OPEC Monthly Oil Market Reports. Remember that, for just a little while longer, oil is a fungible product. OPEC make no secret of the fact that they continuously examine the global economy and make estimates on how it is going to behave. This month they note that the economies aren’t doing quite as well as expected, and have revised down global growth to 2.9%, though they expect next year to be better, and hold to their estimate of a 3.5% growth rate.

But OPEC go beyond just making that prediction, they use it, and data that they have on consumption and oil supplies around the world, to estimate how much OPEC should produce each month to balance supply against demand, so that the price will remain at a comfortable level for the OPEC economies. And based on those numbers they tailor production.

This month, for example, they note that global oil demand is anticipated to grow by 0.8 mbd this year (and by 1.04 mbd in 2014). They anticipate growth in production of around 1.0 mbd from the non-OPEC nations, with projected increases from Canada, the United States, Brazil, the Sudans and Kazakhstan contributing to an additional 1.1 mbd next year. From these numbers they can project that demand for OPEC oil will be slightly down this year, at 29.9 mbd down 0.4 mbd on last year, with next year seeing an additional fall of 0.3 mbd on average.

Figure 2. Projected oil demand for 2013 (OPEC MOMR )

Thus slight reductions in production from OPEC, and particularly the Kingdom of Saudi Arabia, (KSA) can keep the world supply in balance with demand and more critically for them keep the price up at a level that they are comfortable with. Note that in relation to the overall volumes of oil being traded they are not talking much adjustment in their overall volume (around 1% of the total 30 mbd) in order to sustain prices. The USA produces more, OPEC produces less – not much less because global demand is growing – and the price is sustained.

This has virtually nothing to do with the speculators on Wall Street and the corrections they might impose, this is all about supplying a needed volume to meet a demand and controlling that supply to ensure that the price is sustained.

There are a number of caveats to this simplified explanation, one being the short-term willingness and ability of some producers to keep to their targets. One of the imponderables is the production from Iraq. Although Iraq has been given a waiver through 2014 on the need to limit their production, the increasing violence has led to a drop in production, back below 3 mbd.

Figure 3. OPEC production based on data from secondary sources (OPEC MOMR)

As I have noted in the past, OPEC is sufficiently suspicious of the reported numbers from the countries themselves that they check from secondary sources, and provide both sets of numbers.

Figure 4. OPEC production numbers from the originating countries. (OPEC MOMR August 2013)

Note, for example, that Iran says that it is producing over 1 mbd more than other sources report, and Venezuela is around 400 kbd light. The balancing act is largely the charge of KSA, since it produces the largest amount and can adjust more readily to balance the need.

One of the other caveats is that the internal demand in these countries is rising, and that lowers the amount that can be exported. This will in time require that OPEC produce more, just to sustain the amounts that they export. And the problem here is the biggest caveat of all. Because KSA cannot continue to produce ever increasing amounts of oil.

Just exactly how much the country can produce is the subject of much debate, and has been at The Oil Drum since its inception. But if I can now gently admonish those who think it can keep increasing forever, and that it has vast reserves that can flood the market at need. This fails to recognize that the major fields on which the country has relied are no longer capable of their historic production levels, and that, over the time that TOD has been in existence, production has switched to the new fields that KSA had promised it would, back in time.

But these new fields, including Manifa and Safaniya produce a heavier crude that, for years, KSA struggled, usually in vain, to find a market for internationally. It is only now that it is building its own refineries to process the oil that it can find a global market for the product. Yet those refineries have only a limited capacity. If you can’t ship, refine and market your product in the form that the customer needs, it can’t be sold, regardless of how much, instantaneously, you can pump out of the ground. And so KSA is starting to look harder for other fields. They have increased the number of rigs employed to 170 by the end of the year (in 2005 they had about 20 oil and 10 gas rigs operating), going beyond the 160 estimated earlier, seeking both to raise production from existing fields, but also to find new ones. This is almost double the number that Euan reported at the end of last year. That this is being expedited is not good news! Because new fields will very likely be smaller, and more rapidly exhausted, and may not have the quality of the oil produced from Ghawar and the other old faithfuls.

Realistically, over a couple of years, I would suspect that the oil price line, that I mentioned was rising at the beginning of the piece will continue to rise and we are just going to have to accommodate to it.

Waterjetting 8a - cleaning with heat

Water is used almost everywhere as a way of cleaning surfaces. Several times a day we typically rub our hands together with water, and usually with some soap, to clean them. Pediatricians and others suggest that children recite a short rhythm, such as a chorus of “Happy Birthday” while doing so to allow the water, soap and mechanical actions to combine and effectively remove dirt. That teaches the child that it takes some 20 seconds for the cleaning action to be effective. The cleaning action is not to sterilize germs, viruses and other obnoxious things on the hands. Rather it is to ensure that they and other dirt particles are physically removed, leaving the hands clean. (This is a different action to the chemical washes that are becoming popular.)

This is not an instantaneous process since the soap and water must reach into all the dirt-collecting parts of the hand, hence the need for the nursery rhythm. The same basic sequence occurs in the cleaning action of a high-pressure waterjet on a surface, although the pressure of the spray means that the water can penetrate faster. But it is why, in using a car wash lance in cleaning a car, it is smart to spray the body of the car with a detergent first, then allow this to work in creating micelle clusters around the dirt particles, so that the mechanical action of the subsequent jet spray will dislodge and remove them. Merely adding detergent to the cleaning water as it goes through the cleaning lance, and strikes the car surface does not give the chemicals in the water time to act before they are gone. Bear in mind that the jet is moving at several hundred feet per second, and that it hits and rebounds from the surface over a path length of perhaps an inch or two. As a result the residence time of the jet on the surface is measured in fractions of a millisecond. This is not enough time for the chemicals to work. (On the other hand it does help keep the sewers under the car wash cleaner than might be otherwise expected.)

With an increase in jet pressure, the speed of the mechanical removal of dirt and other particles from a surface can be fast and effective. The ability of the jet to penetrate into and flush out surface cracks, and joints, means that it becomes a good tool for removing debris from the joints in concrete decks, and, at a little higher pressure, it can also be used to remove deteriorated concrete from surfaces. But I am going to leave that topic until next week.

The other “treatment” that we use when we wash our hands is to heat the water. When used with soap it helps to remove the surface oils on the skin that act as a host to bacteria. Heat is becoming a less common tool than it used to be in high-pressure jet cleaning. At one time steam cleaning, which was followed by hot pressure-washing, had a larger sector of the market. It is a bit more difficult to work with (the handles of the gun get hot, and the operator needs more protection) but for some work it is still the more effective way to go.

Steam, however, loses both heat and mechanical energy very quickly after it leaves the nozzle. It will, for example, lose some 30% of its temperature within a foot of the nozzle. Hot sprays of water can thus be more effective, but when cleaning grease and oils a lower temperature spray will merely move the globs of grease around the surface. Heating the water to around 185 degrees Fahrenheit, or 85 degrees C, will stop that happening and works much more effectively in getting the surface clean.


Figure 1. The effect of water temperature on cleaning different surfaces (A, B and C) of different types of dirt.

But, as with many tools, heated water needs to be applied with a little bit of background knowledge. I mentioned that just pointing a large jet of water at, for the sake of discussion, a boulder covered with an oil spill would, at lower water temperatures, just move the oil around the surface. At higher temperatures the oil would break into smaller fragments that are removed from the surface, but they need to be captured, otherwise the treatment is just spreading the problem over a larger area. This is why it becomes more effective to use smaller, higher pressure systems that have lower contained jet energy, and which can be used with a vacuum collection system to pick up the displaced water, oil and debris.


Figure 2. Using hot, pressurized water streams in cleaning up after the Exxon Valdez oil spill (NOAA )

With the streams used in the picture shown in Figure 2, the energy in the jet will move the oil, but without containment it was being washed down to the water, where it was collected using booms. This is not particularly effective, since in the process the jets also washed the silt out of the beach, and drove some of the oil down into the underling beach structure, so that it continued to emerge in later years contributing to an ongoing problem.

What is needed is to provide enough energy to drive the oil away from the surface, and yet not enough to move it great distances or to disrupt the surrounding material. This can be achieved by using a higher-pressure, but lower flow rate jet. Because some of the water will turn to steam as it leaves the nozzle, Short (PhD U Michigan, 1963) showed that the droplet size will fall from 250 microns to 50 microns when the water is heated above 100 degC.

Obviously that also will reduce the distance that the jet is effective, and so a balance needs to be achieved between the heat put into the water, and the size of the orifice(s) if the jets are to remove the contamination, but in such a way that it can be captured. And here again there is a benefit from having a suction tool associated with the cleaning spray. Because of the problems that oil and grease can cause, it will require special care in designing the capture systems downstream. Incidentally it is generally better if the water is heated downstream of the pump, since there are higher risks of cavitation in the inlet ports if the water is too hot.

And sometimes the two can be combined in ingenious ways. For example Bury (2nd BHRA ISJCT, Cambridge, 1974) added a steam shroud around a conventional waterjet at 5,000 psi as a way of cleaning hardened plastic from the insides of a chemical plant pipe.


Figure 3. Wrapping a conventional waterjet in a steam shroud (Bury et al 2nd BHRA ISJCT, Cambridge, 1974)

Without the steam assist the plastic was not removable, even at higher jet pressures, but with the steam to soften the plastic the pipe was successfully cleaned.


Figure 4. High-pressure water fails to remove hardened plastic, (lhs) but with a steam shroud a lower-pressure jet effectively cleans the pipe (rhs). (Bury et al 2nd BHRA ISJCT, Cambridge, 1974).

OGPSS - Shell looks to the future

Each year the larger oil production companies provide their views of the future, and I recently reviewed that for ExxonMobil. Shell has now produced their projections, though in a somewhat different format as the document “New Lens Scenarios” which deals with future projections as a set of differing options. That does not make these views less informative.

In reviewing where the world will go, Shell looks more to political impact as the future unrolls. They see the European Union stuck in a Trapped Transition” where:

the ‘can’ keeps being ‘kicked down the road’ while leaders struggle to create some political and social breathing space.
so there is continuing drift, punctuated by a series
of mini-crises, which will eventually culminate in either a reset involving the writing off of sign and political capital (through pooling for example) or the euro unravelling.

On the other hand countries such as China and Brazil are resilient:

in their different ways, they had the financial, social, political, or resource ‘capital’ to respond and reform, following a room to Manoeuvre pathway.

Within the next thirty years, as the population grows, so a greater percentage, up to 75%, will live in cities. And these will consume a greater fraction of the global energy supply, perhaps as high as 80%, up from the current 66%.

The document is very much slanted as a Socio-political forecast, with considerable polemic in regard to the weaknesses that the company perceives to exist in the West.

Shell postulate two different scenarios for the future. There is the Mountain scenario, where business continues very much as usual, and then there is an Oceans scenario where the” powers that are” work toward a more accommodative approach to those in the developing world, and the less fortunate layers of society.

The document begins with the impact if the Mountain scenario is to prevail, driven through a top down control, largely through existing institutions. Shell is not enamoured of this:

In the US, for example, income and wealth inequality continue to increase, with stagnating middle-class earnings, reduced social mobility, and an allegedly meritocratic higher education system, generously supported by tax exemptions, whose main beneficiaries are the children of the successful. superimposed on this class divide is an increasingly serious intergenerational divide, as commitments to the elderly via entitlement programmes crowd out discretionary expenditures that could rebuild economic and social infrastructure. Similarly, in Europe an ageing population and commitments to high levels of entitlement, which are frequently underfunded, create a mixture of social and political strains that deflect attention from the core structural economic issues facing the region.

Driven by this gloomy picture of the future Shell anticipate that global GDP growth through the 2030’s will average under 2%. This will, in turn, moderate the growth in energy demand. Increasing urbanization, the growth of the service sector and the greater use of electricity in developing countries, Shell anticipate that the strong correlation between economic and energy demand growth will be broken.


Figure 1. Shell projection of future energy supply, through 2060 under the Mountain scenario. (Shell)

N.B. All the illustrations come from the Shell New Lens Scenarios document.
Shell anticipates that hydrogen, an up and comer just a few years ago, and now largely neglected, will undergo a “phoenix-like” resurrection and find a market both in industrial and transportation as an alliance of government and private industry push a hydrogen infrastructure post-2020. They anticipate that the use of liquid fuels for passenger road transport will peak in 2035, and that by 2070 the global passenger transportation network, using roads, could be nearly oil-free, as hydrogen and electric powered vehicles take over.


Figure 2. Shell future projection of vehicular fuel sources.

The energy burden will transfer from crude oil to natural gas, which will increasingly underpin the global economies, as China joins the top tier of natural gas producers.


Figure 3. Sources of liquid fuels through 2060 (Shell)

The increase in the volumes of natural gas that become available from tight shales and coalbed sources are sufficient that, by 2035 Shell anticipates that natural gas will not only displace crude oil as the primary transportation fuel, but that it will also encourage a robust pretrochemical industry based on methane. Shell sees the possibility of US energy self-sufficiency in the 2030’s as peak oil theories are abandoned.

The availability and broad use of natural gas will also allow time for credible carbon capture and sequestration technology to be developed and demonstrated, so that by the time that coal is needed as a fuel (around 2075) it will be usable while sustaining the zero-carbon dioxide levels for electricity generation that become widespread by 2060.

In the alternative Oceans scenario, the more accommodative approach, Shell looks to a willingness to share technology and compromise on issues of ownership and profit as a way of encouraging globalization and developing productivity. Societal interconnectivity is encouraged by greater use of the Web, and this leads to significant changes, with existing leaderships yielding to allow a broadening of governance and significant reform. The greater spread of information and connectivity makes for the more fluid nature of geopolitics that names the scenario, as increasing populism is both a source of innovation and a challenge to stability. Populism is seen as a challenge to US dominance, and is considered likely to cause “destructive and violent reactions” as globalization progresses.

This progress is seen as most likely to through technological interconnection between entities that creates a new class of Mandarin who is less accountable to traditional masters. In this scenario Shell see the world increasingly run by more flexible, and decentralized governments “that have embraced radical pathways 
to economic sustainability”. And this includes both the United States and China. In this regard they quote the work of Anne-Marie Slaughter of Princeton on a New World Order.

This change from the current business-as-usual (BAU) model has an impact on fuel availability and use. The encouragement of entrepreneurship is seen to significantly increase the penetration of solar power into the energy mix, while sustaining the era in which crude oil contributes beyond that of the Mountains scenario.


Figure 4. Energy Sources under the Oceans scenario projected by Shell.

In comparison with the projections under the BAU natural gas is less of a player, though Shell don’t explain either where the additional oil will come from, or why the rush to invest in natural gas is turned off. They anticipate that the reliance on hydrocarbons will cause a rise in price that will open the door to new resources and technologies, particularly with solar power.

In this future Shell sees the developing world taking more of the energy pie, yet transitioning rapidly into a lighter industrial society, with a large service component. (One wonders where the necessary heavy industry goes, as it also transitions to become 80% more efficient?) Heat pumps become a widespread domestic unit, with their benefits in energy efficiency. And, in order to sustain their market share, internal combustion engines become increasingly efficient and technically advanced. While crude oil use will increase until the 2040’s, beyond that time the increased use of biofuels will allow liquid fuel dominance to continue in vehicular use. There are two main sources for these biofuels, first generation fuels, mainly sugar based ethanol, which will contribute some 4 mbd by 2050, and second generation biofuels from non-food crops which come to dominate beyond that time. As this transition occurs so traditional biomass use will disappear by the end of the century.

The different consequences of the two scenarios, as they impact fuel sources, and the unconventional nature of the Shell answers to “where will the resource come from” is shown in two plots that summarize the two energy futures.


Figure 5. Energy sources of the future, as seen by Shell under two different scenarios – Mountains and Oceans.

Under the BAU Mountain view the additional required energy will come in the natural gas side of the house, with Methane Hydrates being the major new source of fuel. With the competing Oceans scenario the energy comes from the development of kerogen from the oil shales of Colorado, Wyoming and Utah. By the end of the century renewable energy will supply more than half the electricity demand around the world, with solar carrying the greatest share of this. However they do not see the electricity generating industry becoming carbon neutral until the 2090’s, as CCS penetrates the industry.


Figure 6. Shell’s view of electricity power sources by 2100.

Shell foresee that the problems of energy storage (80% of the solar power in many OECD countries is generated in the summer) will be overcome through the use of electrolysis and the storage of the resulting hydrogen.

There is much to debate over the basis on which Shell have derived the scenarios that form this report. It remains more optimistic about the oil and gas futures that I can find a basis for accepting, but nevertheless it is well worth reading as it provides two views of what might come about. The impact of societal pressures and drivers produce two different energy futures, and while I suspect that reality will be quite different, with “unknown unknowns” having great influence, the effort is worthwhile.

OGPSS - China's energy and a conclusion

Although Energy Policy has not been a significant issue in the current political debate over who should be the next President of the United States, this has not been a particularly good month for that future. In August the Alaskan pipeline pumped an average of 399 kbd from the North Slope. As winter approaches that number needs to be above 350 kbd to ensure that there are no solids built-up within the pipe, and each year the numbers fall a little closer to that limit.

Just this past week Shell has announced that they will not complete any wells in the Chuchki Sea this year, but will only partially drill a number of wells, and leave completion until next year. This despite the fact that the Arctic Ice acreage fell to the lowest level in 33 years, the time over which these measurements have been made. Further over in Russia, the promised development of the Shtokman field, which has been postponed several times in the past, has again been put back on the shelf. The arrival of increasing quantities of shale gas, and the loss of the market to China have reduced the need, in the short term, for these supplies. At the same time the Russian government is, again, seeking support from Western companies for developments in East Siberia and offshore. They are, apparently, still courting BP.

Overall US Crude production has stabilized, following the impacts of Hurricane Isaac, but is not following the steadily upward production path that folks such as Wood Mackenzie would anticipate. That would require that the curve continue upward at a gain of around 0.5 mbd/year, which would be around the overall average for the gain this past year, but as a continuing slope, passing through the current apparent plateau.

US Crude Statistics for the week of Sept 20th 2012, (EIA TWIP)

It is this halt in the increase in oil production that is, perhaps, of the most concern to China (as well as the rest of us), since, while it can be shown that China has been able to provide for its future intermediate-term demand for natural gas and coal , they must have less confidence in their ability to sustain their growing demand for oil. The presumptive reason for that lack of confidence should come from a realistic assessment of their growth in demand, relative to the supply and demand scenarios for the rest of the world, Figure 1 playing some part in that realistic analysis.

The disagreements between China and Japan over island ownership in the China Sea is continuing to roil the waters. While the issue is nominally over who owns the Diaoyu/Senkaku Islands, the aggressive position that China is taking not only here, but also with other nations that border on the South China Sea show no signs of diminishing. Following a meeting between Secretary of Defense Panetta and the Japanese Foreign Minister Koichiro Gemba, the Japanese have stated that the US recognizes that the disputed islands fall within the purview of the U.S.-Japan security treaty. China, in response, is sending hundreds of fishing boats into the region, as well as official government ships that will monitor events.

“We will send monitoring ships in waves, and have them remain around the Diaoyu Islands at all times to display our will to defend our sovereignty,” the Chinese official said. The official added that the Fisheries Bureau will also work closely with the State Oceanic Administration.

According to the Fisheries Bureau, as of Sept. 19 more than 700 Chinese fishing boats were operating within 127 nautical miles, or 235 kilometers, of the Senkakus. Of these, 23 were within 60 nautical miles, or 111 km.

The official said commercial fishing boats will enter waters close to the islands at a time to be decided “based on the situation,” indicating that it will depend on Japan’s response.

Figure 2. Chinese fishing boats off the Senaku/Diaoyu Islands (Asahi Shimbun )

We are coming to the end of the period where increases in global demand for oil could be met by developing new reserves, or by expanding the production from older fields. Yet, while driving across America this past week, the amount of investment being made in repairing the interstate highway system, and expanding the number of lanes bringing cars into the cities shows that there is continuing commitment to automobiles and truck transport in the USA. (And as an aside there appeared to be more trucks on the road than I remember seeing in the past 3 or 4 years).

With a slow but significant re-growth in the American economy, certainly helped by the low price of natural gas, there remains a serious lack in viable alternative fuels to replace oil for use in transportation. Thus the demand for oil in America and Europe will continue to be sustained. It will continue to rise in those countries such as Brazil, Russia, China and India where automobile use has yet to fill the potential market. For the next few years Brazil and Russia can probably meet demand from their increased use of internal supplies, albeit by reducing exports. India and China, and their ilk, cannot.

Conflict over resources is, of course, not by any means new. Maschner and Reedy-Maschner have documented such conflicts in the Pacific Northwest during early arrivals of native peoples from Siberia, and conflict and warfare (as evidenced from skeletal remains) is pervasive throughout human history, from some of the earliest of times. (Stone weapon points found in mastodon skeletal remains are also found associated with some early human skeletal remains, showing that the tools were likely causes of the death of both).

The problem, however, that comes in the future is not just that the more powerful nations of the planet will need more crude oil resources than they can provide for their peoples on their own. It is that it will become more difficult to identify places where it is practical to carry out an invasion that will then provide the needed volumes for a given country. Evidence of recent conflicts (Iraq is a prime example) show that conflict makes resource recovery more difficult and delays levels of production that might be achieved if the conflict did not occur.

Perhaps the Chinese use of fishing fleets is an attempt to achieve its goals, without going to physical war. If so, it is unfortunate that the locations in which it can be deployed are likely to be few. Yet, at a time when most of the rest of the world appears unwilling to face the coming limitation on a vital resource, or to recognize that a problem might even exist, the Chinese awareness of the situation and their pro-active positioning of themselves to assure reserves ahead of other nations is beginning to be a greater concern.

The ExxonMobil view of the future

A couple of weeks ago I reviewed the BP Energy Outlook to 2030, and noted, in passing, that there were a couple of assumptions that might be quite optimistic – though I did not get into the details of the forecast. ExxonMobil (EM) has also put out a forecast, and it could be informative to see what, comparatively, they anticipate for this same future period. I am going to try and follow the same steps that I did with the review of the BP plan, to make comparisons easier.

The first difference is in world population, which BP anticipates will grow by 1.4 billion by 2030, EM is a little more conservative, with growth closer to 1 billion for a total of 7.9 billion. (Current population is 6.9 billion. EM relies on the UN and the World Bank for its figure). In itself this changes the overall level of demand, since both expect that per capita consumption of energy will also rise. There is one oddity that I might initially mention (and yes I know the dollar base differs) but contrast these two graphs – the left is from BP and the right from EM.


While I did not get the scales exactly the same, you can see, to a first estimate, that the global GDP in 2030 for EM is roughly the same size as the Non-OECD GDP estimated by BP. (A quick check on Google says that the current GDP is at $58 trillion). This difference continues in the assumptions of the areas of greatest growth. While, as can be seen above, BP sees OECD growth as virtually flat and all the increment being from non-OECD, EM has OECD growing at 2% and non-OECD at 5%. But that will still only put the non-OECD at 40% of the global economy by 2030, which is the inverse of the BP projection.

Change in GDP does not however easily translate into changes in energy consumption, particularly given the much lower relative energy consumption of the non-OECD countries. EM sees energy use in the OECD staying relatively flat, the gain in GDP is accomplished with an increase in the efficiency of energy use. (Which agrees with the BP position). Thus by 2030 it is the non-OECD countries that will increase demand to the point that they will have an energy demand that is 75% higher than that of the OECD.

With that as background, where and how much energy does EM anticipate will be used in this future. To make the two forecasts simpler to follow I have had to convert since while BP works in millions of barrels of oil equivalent (mboe) throughout, EM uses Quadrillion Btu’s or Quads in places. (A barrel of oil is equivalent to 5.8 million Btu, or conversely 1 Quad is equivalent to 172 million boe). And then to make life a little more fun BP has used tons of oil equivalent, making the Quad equivalent to 24 million tons of oil equivalent. (Using 7.16 barrels to the ton to simplify future arithmetic). Having done that, and with a little Photoshop scaling, I can compare the two energy projections.

Comparison of BP and EM energy futures, (The vertical scale is in billions of tons of oil equivalent. )

One of the immediately obvious items is that the amount of coal use that EM is projecting is considerably less than that projected by BP, there is a little more use of oil, and about the same amount of NG.

BP had generated a graph that predicted that by 2030 oil’s share of the global market would continue to fall, while after an initial increase in percentage use, coal would fall on a parallel path with oil, so that, by 2030, both would share equally with natural gas at about 26% of the global energy market each. The remainder of the market, at about 7% each would be equally divided between Hydro, Nuclear and Renewables. Of these renewables (which include biofuels and biomass) would have the steepest increase.

Sources of Future Energy Supply (BP Energy Outlook)

EM on the other hand see the energy supply in 2030 being divided so that oil retains 32% of the overall; natural gas has risen to 26%, and coal has fallen to 21% of the overall. The non-fossil sources are divided 8% for nuclear, 3% for hydro and 11% for the renewables that include biofuels and waste (which is not separately identified by BP).

EM estimate of how fuel use will change over the next 20 years

The above plot shows percentage growth, rather than market share, so that while wind, solar and biofuel energy production grows strongly, by 2030 it is still providing only 3% of global energy.

Looking at the individual fossil fuels in turn – EM sees that India will provide the largest new market for coal, while Chinese demand will soon peak, and demand in the more industrialized nations declines in the face of increased concerns over carbon dioxide emissions.

Increased production from the Canadian oil sands will team with the growth of biofuels in a combined 5% contribution to global liquid fuels according to EM (this is a little less than that projected by BP, who has 2 mbd for oil sand and just over 4 mbd in biofuel growth). And, by 2030 EM expects that NGL supply will amount to about 10% of total hydrocarbon liquids, totaling around 11 mbd. This is quite a bit more than BP project (at about 4 mbd – though that is assigned only to the OPEC nations, and there could be more from other sources though that is not mentioned in the BP document).


EM’s answer to where all the additional oil is going to come from is Deepwater. It projects that by 2030 deepwater production will be at over 14 mbd. The more than doubling of production is anticipated to be almost across the globe, whether Africa, Europe, Latin America or North America.


Because of this emphasis on deepwater, and in order to provide reassurance against the likelihood of another major spill, EM discuss, within their document, the development of the Marine Well Containment System, which is designed to ensure against what happened this past year.

Natural Gas is the seen as the major growth fuel of the next 20 years, and EM anticipate that use of NG will rise to make it the second most popular fuel (bypassing coal but not oil) by 2030. Interestingly they see the supply of NG over the 2005 volumes as coming almost equally from conventional wells, from unconventional (gas shale) wells in the US and Canada, and from imports. (Though it doesn’t say where from). Unconventional supply is anticipated to grow five-fold.


In the end EM seems to be expecting more from natural gas than other fuels over the next twenty years, more so than BP. This seems to be a reasonable assumption, as I said when reviewing the BP projections, providing only that that there is that one new development (cheaper production and longer well life) that is needed for more viable shale gas production. This is particularly true when one looks at the primary sources of electric power generation, in the three main sectors of the world.


EM sees the United States and Europe being much more aggressive in reducing coal use, and expects a greater role to be played by nuclear power plants than BP.

In summary ExxonMobil has a much more positive view of the long term sustainability of oil as a fuel, with a much greater contribution from the deepwater than BP had projected. It sees the role of coal fading from the future energy field, while natural gas will continue to develop and gain market share.

OGPSS - Some closing (for now) thoughts on Venezuela

I had not intended to start my new series of Tech Talks by looking at Venezuela, but that is how is has worked out, with three posts now on their crude oil and natural gas prospects. But Venezuelan production is not just tied in the oils of the Orinoco, most of it still comes from the more conventional oilfields of the country. As Jonathan Callahan noted, Colin Campbell has previously written on the geology, and equally important history and politics of Venezuelan production in his newsletter of July 2006. He takes us back to the first well that was drilled south of Lake Maracaibo in 1878, and outlines developments since that time. I looked through Daniel Yergin’s “The Prize” to see if it could cast a bit more light on the development of production through the country – but it is really a book more about the politics than the geology.

The book did, however, suggest that perhaps some of the developments of the industry were due to steps imposed on Venezuela and others. Thus, for example, up to 1932 Venezuela was supplying between 9 and 12% of US demand, but Congress then imposed a tariff on imports, leading to their being cut in half, and initially playing havoc in Venezuela, since about 55% of its production had been sent to the US. Within a few years they had, however, found an alternate market in Europe, and pre-war (WW2) were supplying 40% of the UK oil demand. In 1943 they decided that they weren’t getting a fair share of the profits and passed a law initially to nominally split the profit from the oil 50:50 with the oil companies. When President Betancourt came to power he first adjusted the rule to ensure that it really was 50:50 (and not realistically 40:60) and then was the first to ask for his percentage in oil, which the country could sell itself. Since the profit was set by the sales price of the oil, when Standard Oil of New Jersey on August 9, 1960 unilaterally cut the price of oil by fourteen cents, this led others to also cut their prices, and the economies of the oil exporting countries immediately suffered. The year before representatives of Venezuela, Saudi Arabia, Kuwait, Iran, and Iraq had met and signed a “Gentlemen’s Agreement” at the Arab Oil Congress in Cairo, which included language agreeing to “defend the price structure” and with the hope of switching the profit ratio to 60:40 in their favor. The drop in the posted price led to a meeting of the five initial signatories in Baghdad on September 10th, and by September 14th OPEC was formed. The oil companies then apologized and tried to re-establish control, but from such small beginnings . . . . (And The Prize was written in 1991). Venezuela nationalized their oil industry in 1975-76, creating Petroleos de Venezuela S.A. (PdVSA) as the operating company.

Well, with that bit of history behind us, and moving forward to 2006, when Colin wrote his piece, at that time the conventional fields in Venezuela were producing around 1.8 mbd, largely from the Lake Maracaibo conventional wells, and he anticipated that they could hold this level until about 2015, when it would drop to around 1.6 mbd. The unconventional production from the Orinoco was producing at around 650 kbd, for a total of around 2.45 mbd. He expected that the Orinoco flow would be stable until 2015, and would then rise at 3% pa through a peak in 2030, and then decline at 2% a year.

Venezuela claims to now have the world’s largest oil reserves, at 297 billion barrels, mainly in the Orinoco. In seeking to develop that oil, Venezuela is now actively working with Chinese companies (as I mentioned earlier) to the tune of a $40 billion investment, and the intent to raise production from the Orinoco by perhaps 800 kbd (with Venezuela still retaining that 60:40 split) . This gives Venezuela a target of producing 4 mbd by 2015. However that assumes that they are producing the “official volume” which is 3 mbd at the moment. The EIA put it closer to Colin’s total, or around 2.5 mbd in 2008, averaged 2.2 mbd in 2009, and it was falling. OPEC, in their January 2011 Monthly Oil Market Report notes that Venezuela has a production of 2.26 mbd in December. However this may not include the NGLs that are produced with the natural gas, and this has been estimated at around 300 kbd by the EIA. At the end of the year rains hit the Paraguana Refining Center refineries that process half of Venezuela’s crude, collectively around 1 mbd. The Amuay refinery (which processes around 650 kbd) was closed for a couple of days, while the Cardon refinery was closed for about two weeks.

If the Chinese loan of $20 billion last April is requiring Venezuela to ramp up deliveries to them from 400 kbd last summer, to 1 mbd by 2012 then this may explain why they are now having some difficulty making promised deliveries elsewhere, and are needing the helping hand that I mentioned in earlier posts. It might also explain why deliveries to the US have been falling off.

One way in which energy might be saved is to use renewable power to replace oil in the refineries. With most of the electric power in the country coming from hydro, it would have been thought that this could be a source of replacement. Unfortunately there are significant problems in the power systems of Venezuela – which I am going to forego discussing, other than giving the reference to a more comprehensive story. Cuba has, however, been instrumental in helping out with some of those problems, which were exacerbated by the severe drought. As a result thermal power stations were used to generate electricity, and it is this that Venezuela is considering to replace with wind energy.

The idea of using wind to provide some power for the refinery and thus release oil, was first bruited in 2005, it has apparently not yet worked out.

Venezuela's state oil company PDVSA aims to boost fuel oil exports by about 100,000 barrels a month through the increased use of wind for electric power generation, Nervis Villalobos, the president of state-owned electricity firm Cadafe and deputy energy and oil minister, told BNamericas

It was not until March 2010 that an agreement with the Spanish firm Gamesa was reached to build the first wind farm, And while plans for a significant development of some 100 MW in Falcon have been announced , this is partly now to reduce the reliance on hydropower. The overall intent is to generate 1500 MW in the next five years, but construction of that first farm, initially slated for last year, is now not projected to start until this July.

It is quite difficult to get accurate numbers on oil and gas production from Venezuela, so perhaps it is time to move on to a different place.

Climategate becomes more visible, data is analyzed

Slowly but surely greater attention is being given to the potential scandal that has acquired the “Climategate” label. There are 28.5 million results when I just typed that key word into Google. While the story was first carried in such news sources as Fox News, the Wall Street Journal, and the British Daily Telegraph it has only been much more recently that it has been recognized by others in the MSM. And while CNN is carrying the topic it appears to be slanting the coverage towards the AGW crowd.

This is not uncommon. For example on Friday there was a short mention of the topic on NBC though still doubting its significance. And analysis of the code by an expert was showing the existence of problems that has finally caught the BBC’s attention. Should you watch the BBC piece you might note that while the programmer highlights the words “fudge factor” on the screen, the reporter does not really cover what that means. Yet magazines such as Newsweek continue to offer apologia, rather than asking hard questions, and Nature, instead of explaining exactly how many folks reviewed papers on climate change topics, and whether the cartel really had the power the e-mails claimed to restrict papers, also defended their position editorially, raising the clear possibility that the reputation and integrity of one of the greater journals in science has been compromised.

And after being caught by Jon Stewart it has now reached the front page of the Washington Post (though it seemed to fall off the front page of the Internet edition rather fast).

Interestingly, however, one can pick up by the focus of the comments where the writers of the pieces are coming from. For example, with the Washington Post piece, it is accompanied by a side bar that shows the following graph:

The WAPO comment above the curve was “However, nine of the world’s hottest years have occurred this decade,” which the graph then illustrates.


Unfortunately this statement while obviously absolutely untrue, (there are a number of periods in the geological past that were significantly warmer) even in the context meant (likely that of the last say 2,000 years) is almost certainly wrong, and one of the underlying points revealed in the e-mails is that folk such as Dr Michael Mann appear to have known this. (It was apparently he who first came up with the trick of replacing the data from tree rings, which were starting to show an apparent decline in temperature, while the temperature was actually going up, with real temperature data.) Now there are several issues with this change that folk need to be aware of.

The first, and obvious one, is that if the proxy that is being relied on to predict temperature is not correctly recording temperature change, then the use of the proxy has to be questioned. If the folk who used it do not publically admit to this, then it is reasonable to raise a question both concerning their personal integrity and that of the published papers that they have generated. (Given the cross-exchange of e-mails it also brings others into this collusion to conceal information).

The second point is the one that scientists get fascinated with, and that is why did the proxy data stop being accurate? And one possible answer has been provided by Craig Loehle. To simplify his argument, he points out that the width of tree rings – assumed to be linearly related to temperature – will also be affected by other factors. For example it is not unreasonable to assume that, as temperatures rise above a certain point, that there will be less moisture in the soil, and thus the tree will increasingly suffer, rather than increasing to prosper. If such a case is so, above a certain temperature, then (as the data being used by Briffa showed the tree rings would start to shrink.

Proxy temperatures as predicted by tree-ring data as plotted by Steve McInyre from Briffa data.

Notice that, for the first time in the record the temperature rises above the zero line in about 1930. And then crosses it again in 1960, with the onset of the red part of the curve – which is the decline that has been deleted from the plot). If one looks at a recent Met Office plot of temperature for this period:

Met Office Plot of temperatures. (Sorry I could not get through to the site for a current reference. At present the popularity of the site is causing it to redirect traffic to the UEA announcement page).

One can see that temperatures have risen, at around that time, to lie above the baseline, where Dr. Loehle believes the inflection starts to occur. So that, in his projection, while the temperature continues to rise, the proxy (tree ring) data will fall:

Projection of variation in tree ring data, showing a projected false value for temperature, as increased temperature reduces soil moisture, and thus ring growth (according to Loehle).

The change from the debate about recent temperatures has some relevance, but it becomes much more relevant to the debate over the condition during the Medieval Warming Period. NOAA currently shows this chart, which comes from the 2007 IPCC report.



However what is worth a passing comment is that if one looks at the model predictions of temperature before about 1850 they clearly show that the models overestimate the actual temperatures, and that while the actual instrumented temperatures were showing a Little Ice Age back to 1500, the models and proxy data do not. And if one were to apply the Loehle logic to the data between 1000 and 1150 where some of the models show the temperature crossing the zero line, then one could project that within that period the temperature could be higher than projected.

The tree ring data came from the Western United States for that time period has been a critical part of the debate on the validity of the original Mann, Bradley and Hughes paper. But we know from Scott Stein’s work that the western United States went through two severe drought periods :

“We now have compelling proof,” says Stine, “that Owens Lake dried up and became a desert playa in the early medieval period. The finding has ominous implications for the future security of Los Angeles' water supply.”

Two years ago, Stine caused a sensation in the science press with his claim that California had endured two epic droughts in the Middle Ages, one of 220 years (from 892 to 1112) and the other of 140 years (from 1209 to 1350). By contrast, the most severe recent drought— which created an unprecedented statewide water emergency— lasted only six years, from 1987 to 1992.

Stine's primary evidence, now broadly accepted, consists of ancient tree stumps that were exposed to view when the 1980s drought and DWP greed reduced water levels by more than 50 feet in Mono Lake (the northernmost catchment of the Los Angeles Aqueduct) and other Sierran lakes and streams.

I would guess that the severity of a drought of that duration would, as Dr. Loehle has pointed out, be enough to narrow the tree rings of the time. Perhaps now we might get a little more investigation of this point?

The point is now being caught by some of the reporters that are actually bothering to dig into the data, and so, for example, Christopher Booker who brings a different interpretation to the story that I have tried to tell in the above. But it goes back to the reliance of the Global Climate Models (GCM) on too little data as I explained in an earlier post back in October.

It is also sad to note a comment in the London Times coverage of the decision of the British Met Office to re-create all the data.

The Met Office plans to re-examine 160 years of temperature data after admitting that public confidence in the science on man-made global warming has been shattered by leaked e-mails.

But

The Government is attempting to stop the Met Office from carrying out the re-examination, arguing that it would be seized upon by climate change sceptics.

They have got to be kidding !! Even Al Gore knows when he has a problem.

The CRU data dump and the journalistic integrity question

I would be obtuse, perhaps, this week to comment on anything other than the release of information from the Climate Research Unit (CRU) at the University of East Anglia. The folk that had used the site, and thus whose material has now been passed around, are largely those that contribute to the site at Real Climate, which has responded. For simplicity in what follows I will call them “The Team.” For those who are unaware, a significant amount of information at the CRU, including personal e-mails and data files, has been sent to a variety of sources, though which it is now publicly available.

The files have now been sorted (to the point that they can be surveyed by the curious) and my own initial curiosity – because I am just finishing reading Mia Tiljander’s dissertation, was to find if there was any information on the varve data that she had produced which, when she wrote her dissertation, showed clear evidence for a Medieval Warming Period, but once it passed through The Team, was used to show that the MWP didn’t exist. So I went to the search website typed in Tiljander, and found 3 references, the first of which is a memo from Darrell Kaufman recognizing that they had flipped the data . Not that this is particularly novel, since that recognition was, I believe, recently publically admitted, at least by some of the team, but indicative of the questions about honesty that will now, unfortunately, have to be addressed by The Team if the journalistic brother/sisterhood is to retain any credibility in this overall mess as unbiased reporters of the state-of-reality.

Nonetheless, it's unfortunate that I flipped the Korttajarvi data.

The memo seems to admit to regret at being caught, but little at improperly using data to backstop an opinion.

When the files were first revealed the most obvious candidate for a “smoking gun” memo was that from Dr. Phil Jones, the head of CRU to others of The Team in which he notes:

I’ve just completed Mike’s Nature trick of adding in the real temps 
to each series for the last 20 years (ie from 1981 onwards) amd from
1961 for Keith’s to hide the decline.

There is an explanation of what this entailed at What’s Up With That (WUMT).

If there was only this one memo, as evidence of improper activity, then perhaps it might be viewed less severely, although one has to bear in mind that it has been the CRU and GISS curves for average temperature over the decades, together with the now infamous Mann “hockey stick” of temperature over the last millennium that has provided most of the underpinning to arguments about global warming.

However, as the search has gone on through the apparently 1079 e-mails and 72 documents there are some disquieting suggestions of evidence of more serious malfeasance.

Bear in mind that the authors of these memos are public servants, whose supposed mission is to help answer queries about the topic, and then read the deliberate attempt at denying that role, with statements such as:

Send them a subset removing station data from some of the countries who made us pay in the normals papers of Hulme et al. (1990s) and also any number that David can remember. This should also omit some other countries like (Australia, NZ, Canada, Antarctica). Also could extract some of the sources that Anders added in (31-38 source codes in J&M 2003). Also should remove many of the early stations that we coded up in the 1980s.

Bear in mind that there was a request under the British Freedom of Information Act that had been submitted for this data and, as the Australian Herald Sun notes:

Destroying government data subject to an FOI request is a criminal offence. Is this data being deleted the stuff CA asked from Jones in repeated FOI requests? If true, Jones had better get himself a lawyer very fast, but I doubt very much he would have done anything remotely illegal.

To which issue there is also the following:

And don't leave stuff lying around on ftp sites - you never know who is trawling them. The two MMs [McKitrick, McIntyre] have been after the CRU station data for years. If they ever hear there is a Freedom of Information Act now in the UK, I think I'll delete the file rather than send to anyone. Does your similar act in the US force you to respond to enquiries within 20 days? - our does ! The UK works on precedents, so the first request will test it. We also have a data protection act, which I will hide behind. Tom Wigley has sent me a worried email when he heard about it - thought people could ask him for his model code. He has retired officially from UEA so he can hide behind that. IPR should be relevant here, but I can see me getting into an argument with someone at UEA who'll say we must adhere to it !

This from the same Dr Jones who later noted in a response to Roger Pielke Jr

Data storage availability in the 1980s meant that we were not able to keep the multiple sources for some sites, only the station series after adjustment for homogeneity issues. We, therefore, do not hold the original raw data but only the value-added (i.e. quality controlled and homogenized) data.

I believe that any reasonable person reading the memo and that response would be more than a little suspicious that there is something rotten resident in the CRU.

Those who have been engaged in the discussion of the truth of global warming are already finding tidbits that show that CRU had a significant ($22 million) investment in their work, which might argue for a motive in holding the position that they have.

It is disappointing to read of the effort to “diminish” the MWP” :

Phil and I have recently submitted a paper using about a dozen NH records that fit this category, and many of which are available nearly 2K back--I think that trying to adopt a timeframe of 2K, rather than the usual 1K, addresses a good earlier point that Peck made w/ regard to the memo, that it would be nice to try to "contain" the putative "MWP", even if we don't yet have a hemispheric mean reconstruction available that far back [Phil and I have one in review--not sure it is kosher to show that yet though--I've put in an inquiry to Judy Jacobs at AGU about this].

Well it is a mess. Much more manipulative it appears, than the first reports led readers to believe. But will it be more than a couple-of-day storm. Sadly that is going to have to rely on a group of journalists who have become quite sycophantic to The Team, but whose integrity now requires them to bite that hand. It will be interesting to see how many do, and then the response of the political wing that has so tightly embraced the Team position.