A "run on the energy bank" is an immediate threat

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switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
A "run on the energy bank" is an immediate threat

Check out this video of Matt Simmons discussing the very real and immediate danger of a "run on the energy bank" and the effects it would have on our economy and our lives.  

He is very concerned about the gasoline shortages we've been seeing across the country.  His biggest fear is that, once people become aware of the shortage, a large number will flock to gas stations to top off their tank.  If that happens, it's very likely that our current stocks will be depleted to the point where the pipelines drop below minimum operating capacity.  Once that occurs we're literally out of gas, and it would take quite a while to rebuild the stocks and resume distribution.

Here are the numbers.  Currently 220 million personal vehicles.  Estimate that they each have approximately 5 gallons of gas in them, with a 20 gallon capacity.  If all of those vehicles filled up their tanks, that would consume 78 million barrels of oil. Our current reserve is 87 million barrels.

Of course, once the gas runs out that means supermarkets are out of food within five days, people can't get to work, the economy comes to a grinding halt, the markets panic, etc.  He sees this as a much larger immediate threat than the current financial crisis.

It seems unlikely to me that all 220 million vehicles would top-off their tanks together, but perhaps not all of them have to in order to deplete current stocks to the point where the pipelines wouldn't be able to operate. 

Tesseractal's picture
Tesseractal
Status: Bronze Member (Offline)
Joined: Apr 18 2008
Posts: 25
Re: A "run on the energy bank" is an immediate threat

 

Hmmm ... am I missing something ......I can't watch the link but....... based on the post from switters

No. 1 - everybody fills up their tanks but doesn't exhaust the reserve - then consumption will go back to where it was (or slightly less as panic eases and people run their tanks down again)  - if the current pipeline can meet existing demand beforehand then it will be able to meet it afterwards - it is just a question of how fast reserves are replenished and allowances for a few hiccups with the distribution network during the run.

No. 2 - pipelines dropping below minimum operating capcity - what does that mean?  You can only take out of a pipe as fast as you put in - put differently the determinant of pipeline capacity is how fast you put stuff in - in other words supply - a pipeline will continue to function according to how fast you stick stuff into the "in" end with allowances for how many holes there are.

The only issue in the scenario is whether there is stuff to put "in" to the pipeline and that has always been the issue - viz peak oil.

I can't see any new or different, real and immediate danger in what was written - is more to what Matt Simmons is saying?  If so can someone clarif what it is.

 

 

the navigator's picture
the navigator
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Joined: May 20 2008
Posts: 30
Re: A "run on the energy bank" is an immediate threat

am I missing something

I believe the word "pipeline" is being used in the metaphorical sense meaning the available fuel from its source through the refinery and to our gas stations.

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: A "run on the energy bank" is an immediate threat

Yes, there is much more to it.  I'm not sure why the link doesn't work, but go to youtube.com and type "oil gas next meltdown simmons" into the search box.  The video will show up first in the list.

No. 1: if everyone filled up their tanks at the same time, the system would shut down and we'd be out of gas.  Simmons states this quite clearly in his presentation and the numbers back it up.   

No. 2: the lower we draw down gasoline stocks, the closer we get to "minimum operating levels".  Once we reach minimum operating levels, shortages become imminent.  My understanding is that the pipelines that distribute gasoline must have a certain amount of gasoline in them to run properly.  Once levels drop below the minimum, the gasoline stops flowing. Simmons explains this in the video - don't take my word for it.

The immediate problem was caused by refineries going offline due to the hurricanes.  It's not a permanent supply problem (in the sense that peak oil is), but if there's a "run" on gasoline supplies it could create a very serious crisis.

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