The internet v the world part 1 gatekeepers lose control as we connect

Crikeys Bernard Keane has some thoughts on the challenge to gatekeeping institutions posed by the internet - The internet v the world part 1: gatekeepers lose control as we connect .

Here are some scenes from the internet in the last decade of the twentieth century and the first of the 21st, in no particular order.

* The internet versus music and movies. The digitisation of audio-visual content and higher internet bandwidth enables mass downloading of music, movies and television programming entirely outside the legal copyright system. In Australia, much of it is driven by the FTA television networks’ refusal to screen foreign programs for many months after they’ve screened in the US. The response of copyright owners and media companies is to prosecute individuals, websites or companies that download illegally, or facilitate downloading, and convince governments to impose new, often draconian, copyright laws. Their efforts are futile. About 25% of global internet traffic is estimated to be file sharing, nearly all of it illegal.

* The internet versus lawyers. Lawyers in jurisdictions across the world become increasingly concerned about jurors using the internet to find out about cases. Judges take to threatening jurors with contempt of court if they breach agreements about using the internet. In 2008, a Victorian judge demands the suppression of an episode of Underbelly. As soon as the banned episode is broadcast elsewhere, it is available online and downloaded thousands of times. In 2009, a judge orders Australian websites to take over 1500 articles offline about an individual on the basis that they will prejudice a trial jury. The material remains easily accessible even after removal by the sites in question.

* The internet versus gambling opponents. Moral panic over gambling and pressure from casinos prompts the Australian Government to ban online gambling in 2001. According to the Productivity Commission, the ban fails to prevent continued growth in online gambling at rates similar to other countries. The ban ensures Australians’ money goes to poorly-regulated foreign sites and not safer local sites and Australian taxpayers.

* The internet versus government secrecy. The website Cryptome began publishing classified and confidential government information in 1996. Similar sites like Cartome, Eyeball Series and Cryptome CN also offer other types of information governments want suppressed. Cryptome’s founders claim FBI harassment, the site has its server capacity removed and companies like PayPal refuse to enable contributions to the site. But as WikiLeaks will demonstrate, the harassment appears to have no noticeable impact on the release of material.

* The internet versus transnationals. In October 2009, the transnational energy company Trafigura, which has successfully used the UK courts to suppress reporting of evidence it released toxic waste in Cote dIvoire, obtains a "superinjunction" against the Guardian on the same issue. But "Trafigura" becomes a trending topic on Twitter, and a number of websites and WikiLeaks publish material on the case. The company abandons its attempts to suppress efforts to expose it.

* The internet versus journalists. Some Australian p olitical journalists, angry at criticism of their coverage of the 2010 election, lash out at "parasites", "free riders" and "armchair critics" online. "Just let the professionals do their job" demands one on Twitter. But the editor of The Australian goes further. Angry that online critics are routinely deriding the paper’s partisanship and anti-science stance on climate change, he threatens to sue an academic over tweets made about a presentation at a journalism conference -- though not the presenter herself, a former journalist at his own paper -- and boasts about bringing his lawyers into the matter. His Media Editor then threatens to report another academic to police over a Twitter comment. The result is extensive coverage of the original presentation here and overseas.

* The internet versus the Australian Government. In response to WikiLeaks releasing US diplomatic cables, the Australian Prime Minister labels the act "illegal" and her Attorney-General talks about measures to prevent the release of national security material in the media. He writes to mainstream media editors with the goal of developing a protocol to do so. Later, Australian police advise that WikiLeaks has not broken any Australian laws, and the Prime Minister is forced to carefully parse her claim about illegality.

* The internet versus Big Retail. Australia’s major retailers, used to earning oligopoly profits, are unhappy Australians are using the internet to shop online at overseas sites. They demand the Government take "decisive action" in the form of higher taxes to deter consumers and protect their profits.

The common theme across these examples is that the gatekeepers and the privileged intermediaries of late twentieth century Western economies -- politicians, lawyers, the mainstream media, large corporations -- are threatened by the connectedness that the internet enables.

Humans are, to nick a phrase from David Attenborough, compulsive communicators. The urge to converse, debate, joke, fight, trade, play and form relationships with each other is hard-wired into us. And the internet dramatically expands the community within which we can do that, from one constrained by geography to one only constrained by technology.

And it directly undermines the power of those who want to regulate that interaction, or profit from it. Governments that want to police it. The media that profits by connecting us. The corporations that rely on consumers knowing less than they do. The courts that regard jurors as easily-swayed fools who need to be treated like mushrooms. All now confront interconnectedness on a scale far greater than ever seen before, with far fewer opportunities to regulate or exploit it.

But the gatekeepers and intermediaries are unwilling to let their power go easily, even as it slips away from them. And they reflexively resort to litigation, regulation and prohibition to maintain their power.

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The most secure bike lock in the world

Grist points to an interesting bike lock concept - The most secure bike lock in the world.

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Has The World Reached Economic Peak Oil

The peak oil world seems to have (thankfully) mostly moved from viewing the defining aspect of the peak of oil production as a function of oil in the ground to being a function of the price it takes to produce new oil - David Strahan has a good example of this at his blog - HAS THE WORLD REACHED ECONOMIC PEAK OIL? .

Whisper it. Oil production in the US is increasing. The country where output peaked in 1970 and then shrank by 40 per cent over four decades, has turned some kind of corner. Between 2008 and 2010, production rebounded by 800,000 barrels per day to 7.5 million barrels per day, and analysts forecast more growth to come. Goldman Sachs predicts that by 2017 production in the US could reach almost 11 mb/d, just shy of its all-time high, restoring the country to its former glory as the world’s biggest producer. ...

Indeed, if the world is suddenly awash with oil, somebody forgot to tell the oil market. Oil remains stubbornly above $100 per barrel of Brent crude, the main international benchmark. Most analysts agree this is because supply is struggling to keep pace with demand, despite weakening western economies. But if all this extra oil is coming on-stream, how come?

Part of the reason is down to short-term unforeseen disruptions, such as the Deepwater Horizon disaster in theGulf of Mexico last year which delayed many drilling projects, and the Libyan revolution which cut global supply by almost 1.6 mb/d. The impact of these events should fade in time but there are clearly deeper forces at work. Producing oil is getting harder.

Not that it was ever easy. The amount of oil produced by existing fields is always in decline because as oil is extracted, pressure in the reservoir falls and the oil comes out more slowly. As a result, every year the industry must drill new wells capable of supplying around 3 mb/d – or 30 per cent of Saudi Arabia’s production – just to stand still. Satisfying the growth in global demand, at least when the economy is expanding, requires roughly another 1.5 mb/d annually.

Filling these holes gets more difficult as the “easy oil” gets scarcer. Companies are now exploring to the ends of the earth – from the Falklands to the Arctic– and are drilling reservoirs that are deeper, hotter and higher pressure than ever, all of which raise new engineering challenges. That has pushed costs up massively, with effects that have yet to be widely understood.

Offshore, companies are working at ever greater depths. During the 1980s and 1990s, for instance, Petrobras, Brazil’s state oil company, made most of its offshore discoveries beneath about 3 kilometres of sea and rock. In 2007, it found the Lula field, about 7 km down. Drilling Lula needed 4 km more specialist steel pipe at a time when steel prices were soaring because of higher energy costs.

Even onshore, costs are rising. Shale-oil fracking wells typically run horizontally and need four times as much steel as a vertical well. According to analysts at JPMorgan, such inflation is rampant throughout the industry. Exxon’s production investments, for instance, soared from $15 billion per quarter in the 1990s to more than $100 billion in the second quarter of 2008 – while the amount of oil and gas it produced scarcely changed.

Some of the most costly oil comes from the tar sands of Canada, with its vast open-cast mines and energy-intensive production processes. According to investment bank Barclays Capital, new projects here need to earn as much as $90 a barrel just to break even. Saudi Arabia, the only country with meaningful spare production capacity, could have produced oil more cheaply a few years ago, but not now. It has increased public spending following the Arab Spring, and now needs $95 per barrel to balance its budget. These pressures, says Paul Horsnell, director of commodities research at Barclays, mean that oil prices are unlikely to fall below these levels unless the economy collapses. He forecasts $137 per barrel in 2015, and $185 in 2020.

So if there is lots of oil down there but it is much more costly to produce, can we have as much as we want if we are prepared to pay for it? Well, that depends on what you judge to be enough and who you mean by “we”, says Steven Kopits, US managing director of energy consultants Douglas Westwood.

The trouble is, high oil prices don’t just encourage oil companies to innovate, they also damage national economies – although some countries are more resilient than others. A penetrating analysis by Kopits found that historically theUSgoes into recession whenever it spends more than about 4.5 per cent of its GDP on oil. Today, that would equate to $90 a barrel. That level also holds for others in the OECD club of wealthy nations, says Kopits. But the evidence suggests thatChinais willing to pay more; it only cuts back on oil purchases when they account for more than 6 per cent of its GDP, equivalent to about $110 per barrel.

The disparity, says Kopits, arises because Chinese society assigns more value to a barrel of oil. Gaining a barrel can transform the lives of Chinese people – allowing them to travel by car for the first time, for example. In the west, losing a barrel merely means trading in a gas-guzzler for a more fuel efficient model.

But oil is so useful that nobody cuts back voluntarily, meaning prices must rise to excruciating levels to force rich western consumers to economise. The first “peak oil recession” started in 2009, says Kopits. It took oil at $147 a barrel and the deepest recession since the 1930s to prise oil from the grip of consumers in OECD countries. Since early 2008, OECD oil consumption has fallen by 4 mb/d, while non-OECD consumption – mainly inChina– has gained 6 mb/d. Global oil production rose 2 mb/d during that period, so developing countries have consumed all the additional supply plus that given up by industrialised economies. “China is bidding away the OECD oil supply,” says Kopits, “and recessions are the mechanism by which that oil is being transferred from weaker economies to faster growing economies.”

With China embarking on rapid “motorisation” – car sales in China leapfrogged those in the US in 2010 – the outlook is for repeated oil price spikes and recessions. We appear now to be entering the second peak oil recession, says Kopits, and others will follow. For the time being this is a problem for the west, but prices could rise to levels that are unsupportable even for China. On this view, peak oil is as much an economic construct as a geological one.

Analysts at Deutsche Bank are more optimistic, and predict that a final oil price spike to $175 in 2015 will lead to rapid electrification of transport and relieve pressure on the oil supply. But Kopits is doubtful that we can escape so easily. “Buckle up,” he concludes, “we’re in for a bumpy ride.”

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China consumes nearly as much coal as the rest of the world combined

Stuart at Early Warning points to this article on Chinese coal consumption - good for Australian coal miners (other than when they get flooded each year), bad for everyone else - China consumes nearly as much coal as the rest of the world combined

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45bn coal seam gas projects draw workers from around the world

The Australian has an article on the windfall heading Bechtel’s way as construction looms for 3 coal seam gas LNG projects in Queensland - $45bn gas plan draws workers of the world.

WORKERS from as far away as Ireland will be part of the massive fly-in, fly-out workforce needed to build the $45 billion development turning coal-seam gas into liquified natural gas on Curtis Island off Gladstone, central Queensland.
About 800 people are now working on the mangrove-fringed island on the north side of Gladstone Harbour, but this is expected to rise to at least 6000, housed in specially constructed camps, within two years. There will also be up to 2000 contractors, who will not live on site but will be ferried across from Gladstone every day to help build the three liquid natural gas plants, expected to be operating by 2015.

While protests against coal-seam gas continue in areas such as the Darling Downs, where 40,000 coal-seam wells will be constructed, the export industry is proceeding rapidly. The pipeline that carries the coal-seam gas from the Darling Downs to Gladstone is under construction, and work on the plants that will convert the gas into 38 million tonnes of liquid to be exported to Asia each year is well under way.

Three LNG plants are being built -- by the British-owned BG Group, Santos and Origin -- but all three $15bn plants are being built by US construction giant Bechtel, which owns the intellectual property rights to the technology. Bechtel, one of the worlds biggest contractors with a global workforce of 55,000, is already a big employer in Gladstone, with about 1500 people working at the expansion of Rio Tintos alumina refinery at Yarwun. …

The sheer scale of the three projects is having a debilitating effect on the central Queensland region, already suffering a skills shortage because of the mining boom. While wages for unskilled workers in mining average between $80,000 and $120,000 a year, with up to $150,000 for more skilled workers, labour hire operators estimate the short-term nature and urgency of the jobs on Curtis Island mean the pay on offer is 15-20 per cent higher than in mining industries. ... A mine worker paid $150,000 a year might be able to get $180,000 as the Curtis Island workforce increases.

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IEA World Energy Outlook 2013

This years World Energy Outlook from the IEA has been released, prompting a flood of press reports. Most of them are headlining that the US is predicted to become the worlds top producer in 2015 on the back of the shale oil boom, but that this wont last - with the middle east soon returning back to the top. Others note the (pessimistic and inaccurate) forecast for renewable energy growth.

National Geographic has a summary - IEA World Outlook: Six Key Trends Shaping the Energy Future.

Thanks to "fracking," the United States is reaching the top spot among world oil producers sooner than expected, and is "well on its way to realizing the American dream" of energy independence, the International Energy Agency (IEA) said Tuesday. "But this does not mean that the world is on the cusp of a new era of oil abundance," the IEA warned in its closely watched annual World Energy Outlook. Instead, the agency predicted that no other country will replicate the United States success with hydraulic fracturing and other unconventional technologies that have led to the North American boom in oil and natural gas production. (See related "Interactive: Breaking Fuel From Rock," "The Great Shale Gas Rush," and "The New Oil Landscape.") And by the mid-2020s, the Middle East—the worlds only source of low-cost oil—will again be unchallenged as the most important and influential source of oil supply on the globe. The Paris-based IEA was established after the oil crisis of the early 1970s in a move by oil-consuming nations to keep better track of trends and improve energy security. Its annual World Energy Outlook, with hundreds of pages of analysis and charts, is considered the industry bible. Heres a rundown of key trends IEA identified as shaping the world outlook this year ...

1. U.S. energy boom is unique, has risks. ...

2. Fossil fuels will still dominate the scene.

IEA expects renewable energy generation to double by 2035 under existing policies. But solar, wind, and hydropower are not on track to catch up with oil or coal, and world primary energy demand is on track to increase 43 percent.

Todays share of fossil fuels in the world energy mix—82 percent—is the same as it was 25 years ago. And by 2035, the IEA forecasts that fossil fuels will barely give up ground, providing 75 percent of global energy.

Governments around the world subsidized consumption of fossil fuel to the tune of $544 billion last year—more than five times greater than supports for renewable energy, which totaled $101 billion in 2012. IEA expects subsidies for renewables to more than double to $220 billion by 2035, but they will still be overshadowed by government supports for fossil fuels without reform.

Unsurprisingly, given the expected energy mix, carbon dioxide emissions from energy are expected to continue their upward movement, jumping 20 percent by 2035. This leaves the world on a trajectory consistent with a long-term average temperature increase of 3.6°C (6.5°F), far above the internationally agreed 2°C (3.6°F) target.

3. India will edge China as "engine" of energy demand. ...

4. Move over, automobiles. The age of trucks is here. ...

4. Renewable energy giant Brazil set to be major oil exporter. ...

6. Reliance on costly imports means long-term hurt for Europe. ...

• Christian Science Monitor - US to be No. 1 oil producer, but it wont last
• ReNew Economy - http://reneweconomy.com.au/2013/iea-sides-utilities-free-riding-rooftop-solar-pv-98650
• ABC - IEA predicting severe temperature rises
• Business Insider - IEA: The World Is Totally Unprepared For When The Great American Shale Boom Fizzles
• Bloomberg - China to Build More Renewables Than EU, U.S. Combined, IEA Says
• Bloomberg - EU, Japan to Lose Third of High-Energy Goods Share, IEA Says
• SMH - Climate change: Golden energy age for Australia will cost the world dearly
• NYT - Shale’s Effect on Oil Supply Is Forecast to Be Brief
• Seven - Brazil set to become major global oil supplier - IEA

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Has Peak Oil Come To The Non Opec World Maybe

Forbes has a look at peak oil production in the non OPEC world - Has Peak Oil Come To The Non-Opec World? Maybe..

The world’s biggest oil companies put in a pretty pathetic performance in the second quarter of 2011. Not in terms of earnings — those were great, with Exxon posting $10.7 billion and Royal Dutch Shell doing $8 billion. Just what you’d expect with Brent crude at a lofty $120 a barrel.



Where the results were disappointing was in the barrels. Of the 16 big U.S. and European oil companies studied by Deutsche Bank analyst Paul Sankey, 14 of them saw their production of petroleum decline in the quarter. Collectively, the drop amounted to 12% of total liquids volumes, or 1.2 million bpd. Their average output for the quarter totalled, 14.67 million bpd. Even excluding the effect of Libya’s issues, the decline was 8%.



Only Exxon and Shell managed 1% volume gains in liquids.



The situation didn’t get much better when Sankey looked at other big non-OPEC producers. Brazil’s supposed growth engine Petrobras was down a touch, as were Russia’s Lukoil and TNK-BP and China’s Sinopec. Rosneft (2.2 million bpd) and PetroChina (2.4 million bpd) did eke out gains of 2% and 4%.



Overall, the producers of 31 million bpd (out of a worldwide total of roughly 86 million bpd) saw their output fall 4%. No wonder Sankey titled his report “The Death of Non-OPEC.”



OPEC volumes, by contrast, were up 2% in the quarter, figures Sankey.



So what’s going on? Is Peak Oil here, at least in the non-OPEC part of the world? Maybe so. “In identifying mega-themes, we have argued that the shift from the 20th to 21st century represents the end of the oil age and the beginning of the global electricity age,” writes Sankey. “The concentration of remaining (abundant) oil reserves into OPEC hands derives an obvious corollary: the end of growth from non-OPEC supply.”



The supermajors are finding it harder and harder to pry away the remaining megaprojects from state-run oil companies. Of the biggest OPEC members like Saudi Arabia, Iran, Venezuela and Iraq, only the latter is eager to bring in the majors to help develop reserves.



Add in the fact that natural decline rates on big fields average 5% a year, and it will become ever harder for Big Oil to stay big. Christophe de Margerie, the pragmatic chief executive of French giant Total, believes that global peak oil will hit within five years (see my story on Total: “High Friends In Low Places”).

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