Random Notes  

Hurricane Katrina is weakening now, with large areas of New Orleans under water and likely to remain so for some time.

"It looks to me like the whole damn city is under water," one rescue worker told the Guardian, standing by a flooded freeway close to the city limits. "That should be flowing the other way," said another, pointing to the 17th Street canal. New Orleans mayor Ray Nagin said there had been reports of more than 20 buildings collapsing in the city, while offshore at least two oil rigs were adrift in the Gulf of Mexico. The weather knocked out power to about 1.3 million people in Louisiana, Mississippi, Alabama and Florida, and analysts estimated the damage could top $26bn.

Damage has been reported to the Louisiana Offshore Oil Port LOOP and Port Fourchon but a complete picture of the damage doesn't seem to be available yet.

Ted Falgout, port director, Port Fourchon, Louisiana -- a key oil and gas hub 60 miles south of New Orleans on the Gulf of Mexico -- reported on CNN that the port had taken a direct hit from the hurricane. According to Falgout, this port makes up 16 to 18 percent of the US oil supply and Hurricane Katrina "will impact oil and gas infrastructure, not just short term but long term as well. The impact of the storm -- the Gulf is shut down; all of the area of the storm is shut down; a half billion dollars a day of oil and gas is unavailable."

Two rigs appear to be drifting and another rig that was in a dock in Alabama broke free of its restraints and collided with a bridge downriver (of the more than half of the 231 offshore rigs currently working in the Gulf were in Katrina's path) but according to TOD there are at least 6 rigs on the loose. Rigzone has a special report on the damage.

The largest refinery in Louisiana (ExxonMobil's in Baton Rouge) has now resumed normal operation, however NYMEX futures contracts for August gas have had "force majeure" declared.

For those who like to draw parallels to the plot of the movie "Oil Storm" (and the "Oil Shockwave" exercises), there are reports from Saudi Arabia about a gunbattle being fought in the city of Jubail with "Iraqis" (following the arrest of 41 militants a few days ago).

The Pat Robertson saga is also lumbering onwards with decreasing intensity, with Hugo Chavez requesting that Robertson be tried on terrorism charges (I guess everyone should play by the same rules - maybe Pat should be praying he doesn't suffer "rendition" to some unknown prison in the third world which shares US Attorney General Gonzales' views on the "quaintness" of protocols banning torture).

"I announce that my government is going to take legal action in the United States... to call for the assassination of a head of state is an act of terrorism," Mr Chavez said in a televised speech. "If the US government does not take action that it must take, we will go to the United Nations and the Organization of American States to denounce the US government," Mr Chavez said.

Mr Chavez, who has frequently charged that the US are plotting to kill him, said Mr Robertson was "crazy" and "a public menace".

Hugo also seems to be serious about his plans to sell cut-price fuel to the poor in the US, in the form of heating oil, according to a report after his meeting with Jesse Jackson.

On a predictable and likely to be repeated note for many airlines, Air New Zealand is forecasting a 40% slump in profits next year due to rising fuel costs.

Europe is still showing the way on the move to renewables, with Spain is aiming to double renewable energy generation by 2010.

Rigzone had a report today on a new Kuwaiti oil find in the north near the Iraqi border. Given my apopheniac penchant for muttering about large untapped Iraqi oil reserves I feel compelled to wonder how far north this newly explored geological structure extends.

State-owned Kuwait Oil Company (KOC) has hit upon commercially-viable light crude oil in one of its northern fields, senior company executives said Wednesday. The find is located just north of the Sabriya field at the Um Niqa structure, they said, noting that the most recent tests conducted in mid-August showed the well produces high-quality crude oil measuring 45 degrees on the API (American Petroleum Institute) scale.

The find is significant, said KOC executives, because it is the first hydrocarbon ever produced in Kuwait from an oil layer known as the Upper Marrat reserve, within the northern Jurassic formation. KOC tested the well at three intervals ranging between 14,580 and 14,884 feet in depth and found it capable of producing an initial 1,879 barrels per day (b/d) of light crude along with large amounts of associated gases. Heavier flow could be expected after the so-called acidization tests, they said. Early July KOC discovered the well of 45-degree crude at 15,000 feet within the Um Niqa structure.

The executives said then the discovery had "enormous significance" since engineers had suspected highly promising levels of crude lay within the Marrat and neighbouring structures.

Local parahistory buffs will be alarmed to learn that Rudy Guiliani is in town for Steve Forbes' conference for global business leaders, which has annoyingly taken over the environs around the Opera House. There have been some protests this evening but I'm not expecting to see any "Battle of Sydney" headlines tomorrow morning. Mr Forbes is blaming the current oil price "bubble" on "speculators", and says that oil will be back down to $35 a barrel next year. Obviously he has a different oil depletion model in mind to that of the ASPO or is anticipating a recession.

Forbes, in Sydney for a conference of global business leaders sponsored by his organisation, said US inflation was helping fuel the rise "and the rest of it is a sheer bubble of speculation". "I think in 12 months we are going to see oil down to $US35, $US40 a barrel," he said.

As Hurricane Katrina lashed the US Gulf Coast yesterday, oil hit $US70.80 a barrel before retreating. "It is a huge bubble, I don't know what's going to pop, but eventually it will pop," Mr Forbes said of the oil price.

Queensland State MP Andrew McNamara has done a good interview with Global Public Media on learning about peak oil and his Oil Vulnerability Task Force.

DR: How did you become aware of Peak Oil?

AM: Last Christmas a friend of mine gave me a book to read, it was Richard Heinberg's book on Peak Oil, and I found it quite startling. Like most members of Parliament I read a lot of stuff, and some of it's good and bad, but this one really made me sit up. And I thought because it's well written doesn't mean it's right, but if it is right it's got amazing implications, so I started talking to different people. A physicist I know in my part of the world, in Hervey Bay, Ian Richards is someone I respect and I said 'What do you know about this?' And he said 'Yeah, it's absolutely true.'

And so I started doing some research on it and talking to engineers and other people I'd met at various times and I was amazed that the scientific people that I got in touch with all were kind of blase about it, they weren't really startled. They said, well, it's quite obvious that oil is a finite resource and it's going to run out some time. This debate's been running for a long time, it's only a matter of when does it start to run down. And so I became convinced that this is completely correct and that the peak of world production was relatively near, and that the problems would begin not when we peaked but when demand outstripped the capacity of supply to keep up with it. And so I walked back into the Parliament after the Christmas break and the first sitting day of Parliament this year, the 22nd of February, made a speech and set out what I thought to be the basic premise, and that's had quite an extraordinary reaction with literally thousands of emails and an amazing response, particularly from the geology and broader scientific community who have really been quite unanimous in saying 'Yes, this is the case.'

...

DR: You mentioned the economic rationalist exercise of the 90's, is this the globalization trend that was going on throughout the world?

AM: Well, that's part of it. We, in Australia in the 90's, signed up to National Competition Policy, which was a proposition that all government services should be offered on a competitive basis rather than a monopoly basis, and that inefficient government services should be privatized or corporatized, and that where there was private sector capacity to offer a service that the government should vacate the field. So it was a bundle of Neo-Classical economic prescriptions that, as part of a globalization swept the world, going back to the Reagan and Thatcher days. So in the early 1990's, one of the things that the then Queensland government did was it looked at country rail lines and said, Are these rail lines efficient? Are they profitable insofar as the number of people completely covers the cost of operating this service? And where that didn't stack up we shut the rail lines. But it was a belligerent exercise. We didn't merely stop operating the trains, we tore up the tracks and sold the corridors. So I think of it as a belligerent economic rationalism where we said 'Not only are we not going to do this but we're going to make it really hard to ever go back.' And so we burned our bridges, literally. That's, I think, going to be looked on as one of the major policy failings of the last quarter of a century in Queensland because the idea that rail had to be profitable for government to offer it, a rail service had to be profitable, is missing the point about building public infrastructure and public capacity, and indeed service to the public. But it's also made life very hard for many, many rural and regional cities that no longer have these rail links and are now entirely dependant on road transport, and to reestablish these rail links we now have to go and buy back corridors and re-lay track which was already there. There's some substantial policy difficulties in that regard, but it was one of the trends that I think is going to prove to be of very poor fashion.

Continuing lobbying for a local nuclear power industry is propelling the shares of local uranium mining companies ever higher.

Uranium miners ERA tacked on an extra 3% and Paladin and extra 2% after the Australian Chamber of Commerce and Industry yesterday urged the federal government to undertake a feasibility study into establishing nuclear power facilities and reopen an energy study to canvas the possibility of a domestic nuclear power industry.

A Liberal Party MP has called for a two year moratorium on wind farms in Victoria. This couldn't have anything to do with them getting so much financial support from the coal industry of course.

Apparently criticising Halliburton is a career limiting move if you are part of the US armed forces. Who says the customer is always right ? And who cares if American taxpayers get ripped off anyway - if they did care they'd be complaining, right ?



Heading Out from The Oil Drum has been interviewed on BBC Radio 5.

Bubba has taken a look at deep water exploration and concluded that there isn't a huge amount left to find.

And to close, here's a weird one on Afghan War Rugs from the Evil Pundit.

One of the cultural side-effects of the Soviet invasion of Afghanistan in 1979 was the creation of a new sub-genre in the traditional world of rug-weaving. These war rugs featured traditional patterns enhanced with images of the tanks, helicopters and missiles that had begun to clutter the landscape.