[dohboi]

Good to see that WT is hear discussing his important insights and theories.

At neven's forums, we were discussing the future of food, and it struck me that one might be able to set up something like an ELM for food that might be useful in seeing where the biggest crunches were going to come the fastest. Of course, in that case, you have elements like major flooding and drought (both predicted to increase dramatically under GW) that may be hard to model. But the general trends of amount of food grown, amount of food exported and amount of food consumed internally for each major producing (and consuming?) country might be worth looking in to.

Do you know of anyone trying to apply your model to food in that way? I'm not sure I have the mathematical or graphing chops to do it myself--in fact, I'm sure I don't.

[SeaGypsy]

The USA may not be a net exporter, but it is in the top 3 grain exporters. When things get tight, it's not $20 jars of fake caviar that matter, but basics- grain being primary. Australia supplies grain equivalent to the requirement of about 70 million outside it's borders, beef to another 20 million; exports more than 4 times as much coal and iron ore as it uses- yet still manages a negative trade balance. How much of the leakage is low priority spending dependent on high disposable income? The principle of ELM should certainly apply to agricultural products, but the modeling will be even more complicated. Of course there is also an inter-relation when you have ELM (oil) hit dependent food importers. Then we have the complications of likely climate disruption into the mix.

[Pops]

I think basic ELM is like a measure of the food dribbling out of the side of the producers mouth, if you have more than you can use, you waste it, or at least use it for less than it's optimum purpose. Like the difference in how lobster is treated in Maine and in Missouri, especially if the lobster in Maine gets a subsidy. wt has more finely honed measures but that is the basic idea

The thing about food is, modern calorie farming is super energy and labor efficient so super cheap, modern eating on the other hand isn't. Modern eating is totally dependent on oil. Processing, packaging, marketing, transporting various ingredients here and there to get to manufacture a predigested MRE suitable for our microwaving pleasure is where all the energy and costs go, the calorie producer gets only a very small portion.

So the basic ELM of food or oil is perhaps only viable up to a point on the cost scale isn't it? KSA in fact is seeing the distortions and talking about it publicly. Here from May 8th, 2013

$this->bbcode_second_pass_quote('', 'S')audi Arabia should cut energy subsidies that are burdening public finances, the economy minister and the head of the state-run utility said, a move that would also tackle the issue of erosion of crude exports.

Rock-bottom prices for gas, power and gasoline have turned the world’s 20th biggest economy into its sixth-biggest consumer of oil, producing less than $3.70 of economic output for every kilogram of oil equivalent that it used in 2010, compared with the global average of $6.20, according to World Bank data.

“This has become an increasingly important issue as these subsidies have become increasingly distorting to our economy. This is something we are trying to address,” Economy and Planning Minister Mohammed Al-Jasser said yesterday.

“Rationalization of subsidies, particularly on fuels for non-targeted participants”, is needed to improve Saudi productivity, he told a financial conference in Riyadh.

[TheDude]

$this->bbcode_second_pass_quote('Pops', 'h')ttp://www.albawaba.com/business/lifting-oil-subsidies-490266

[Subjectivist]

$this->bbcode_second_pass_quote('TheDude', '')$this->bbcode_second_pass_quote('Pops', 'h')ttp://www.albawaba.com/business/lifting-oil-subsidies-490266

[ROCKMAN]

sub - Here are the latest numbers from wiki...if you trust them:

"Electricity generation is 65% from Oil, 27% from Natural Gas and 8% from steam. Generation capacity is approximately 30 GW"

Not sure what they mean by "steam" since that's not really an energy source.

[SeaGypsy]

Much human activity is driven by mysteriously derived 'hot air', probably where that steam came from.

[TheDude]

That's from the EIA - in 2007...link is broken of course. Latest version of the Country Analysis Brief for KSA tells us:

"Electricity generation is 65% from Oil, 27% from Natural Gas and 8% from steam. Generation capacity is approximately 30 GW"

Saudi Arabia - Analysis - U.S. Energy Information Administration (EIA) They repeat/confirm that KSA peaks at burning 1 mb/d during the hottest days of the year.

Of course the Saudis would like to move away from burning oil - that goes without saying. But despite having enormous gas resources the logistics continue to favor using petroleum. For instance, there's a huge amount of gas underneath the Ghawar oil reservoirs, in the Khuff formation - but it's too deep/sour to bring to market cheaply enough to compete with resid etc.

Some of the Gulf countries were at work on building interties between their nations, to create a more generalized power grid, which would ease power demand for all, ala the setup in Europe or North America. Obviously the Middle East also has enormous solar power potential, too.

Sadad al-Husseini says crude burn fell last year - from 800 kb/d to 700 kb/d, owing to more available gas: Saudi ramps up gas drilling to ease demand for oil - FT.com. So steps are being taken in this direction.

[dohboi]

Thanks all for your comments on Food ELM. Sounds like it way too complicated for my small brain to analyze, but maybe some of the wizards here would think about picking it up?

[ROCKMAN]

Just caught a link in another thread that may be an indication of more ELM fall out from a country we don’t normally associated with that dynamic: Canada. From: http://business.financialpost.com/2013/ ... =e2c1-75fa

There have been discussions to ship western Canadian oil to their east coast refineries that have to import from across the Atlantic. As the link shows not only are the producers looking to market their oil east but also the Alberta govt. It has the option to take royalty payments in kind instead of cash. And they’ve begun exercising that option as well as indicating financial support for infrastructure expansion to aid the movement and refining of the oil sands production to their east coast. It may not take too long: there is a current consideration to reverse the flow of a NG pipeline and use it to move the oil to the east. That would take considerably less time than building a new line.

While folks have been focused on Canadian oil moving to the west coast and escaping the US market the biggest loss to US imports of Canadian oil may happen much sooner and due to ELM instead of China. Given the US imports virtually all of Canada’s oil exports any ELM loss with exclusively affect our bottom line.

[mtadd]

$this->bbcode_second_pass_quote('ROCKMAN', 's')ub - Here are the latest numbers from wiki...if you trust them:

"Electricity generation is 65% from Oil, 27% from Natural Gas and 8% from steam. Generation capacity is approximately 30 GW"

Not sure what they mean by "steam" since that's not really an energy source.

[ROCKMAN]

mtadd - Sounds reasonable. Thanks

[TheDude]

Poking around with the Energy Databrowser I see that KSA has switched from resid fuel to diesel for peak demand needs:





Note that they're importing more diesel for those peaks, affecting their cash balance. Higher ups must figure this is an affordable way to placate the populace, since diesel is a good deal more cleaner burning fuel to use. Overall they're still a net exporter of products.

[ROCKMAN]

Dude – Did you mean net exporter of products or hydrocarbons? Or do they export a lot of non-diesel products perhaps? I have read that they are exporting a lot of plastics and chemicals. From: http://www.arabnews.com/news/458132

“Saudi Arabia will import higher than usual volumes of diesel for August as soaring temperatures stoke demand for the power generation fuel. State oil giant Saudi Aramco will likely import about 6 to 7 million barrels of diesel in August, down from an estimated 7 to 8 million barrels in July, according to one of the sources familiar with the matter. Top oil exporter Saudi Arabia shipped in near record diesel volumes of up to 8.9 million barrels of diesel in June, trade sources have estimated earlier.

It last imported a record high diesel volume of 8.99 million barrels in July, 2011. Aramco relies heavily on imported diesel in summer when demand for electricity peaks with rising use of air-conditioning as temperatures can soar to a grilling 50 degrees Celsius.
To cut its imports, Aramco has planned three new refineries. But the first of these, which will produce 176,000 barrels per day of diesel, comes online in the fourth quarter of 2013 at the earliest, instead of the second quarter as previously expected, traders said.”

And then add the recently announced JV between China and the KSA to build a 400,000 bopd refinery on the Red Sea. It sounds like they are making serious efforts to move further down the value chain from just exporting oil.

[TheDude]

Thanks for the link, ROCK. They're a net exporter of practically everything, is what I meant; but have been shipping in more diesel like your story states. I wonder how much extra raw crude they're burning up these days during the summer peak; you'd think they'd phase that out first of all.

[Subjectivist]

$this->bbcode_second_pass_quote('TheDude', 'T')hanks for the link, ROCK. They're a net exporter of practically everything, is what I meant; but have been shipping in more diesel like your story states. I wonder how much extra raw crude they're burning up these days during the summer peak; you'd think they'd phase that out first of all.

[M_B_S]

http://www.iea.org/publications/freepub ... anyOSS.pdf

Germany has very little domestic oil and natural gas production and relies heavily on imports. It
has well diversified and flexible oil and natural gas supply infrastructure, which consists of crude,
product and gas pipelines and crude and oil product import terminals. Natural gas is imported into
Germany exclusively by cross-border pipeline. The country has no LNG infrastructure, although
some German companies have booked capacities in overseas LNG terminals.
Oil continues to be the main source of energy in Germany although it has declined markedly since
the early 1970s. It now represents approximately 32% of Germany’s total primary energy supply
(TPES).
Natural gas consumption in Germany has declined 10% since 2006. Demand was 90 bcm in 2010,
down from 100 bcm in 2005. According to government commissioned analysis, the total
consumption of natural gas in Germany is expected to continue to decline over the long term. The
share of natural gas in Germany’s TPES is currently around 22%.
***************************************************************************************

Peak Oil Import was 1995 (IEA) 2,8 mb/d

Oil + Gas bill in 2012 ~ 100 Billion € / a

Oil Import Decline : 1995 - 2012 = 1% / a

[ROCKMAN]

MBS - What percentage of your refined products are imported compared to that produced in Germany from imported oil? Lately I've been focused on efforts by oil exporting countries to transition from only exporting oil to more product export.

[M_B_S]

$this->bbcode_second_pass_quote('ROCKMAN', 'M')BS - What percentage of your refined products are imported compared to that produced in Germany from imported oil? Lately I've been focused on efforts by oil exporting countries to transition from only exporting oil to more product export.