Bold off

-- iyg (ihg@kuh.YG), March 16, 1999.

Drew:

OK, I guess I gotta roll up my sleeves here, after all, "Since [I] don't know what is going on here:" sounds like a pretty serious accusation (and slight singe, ouch!). Before we get rolling, bear in mind the last sentence of my last post: This article stinks, Drew. If you want to make a point, please pick a better one.

Look here: I'm occasionally sarcastic in my posts, but really, it's not that hard to pick up on. Is Ron Quiggins an expert? I believe that he is yyyesss, and what he says carries a lot of weight with me as well, yyyyyeeeeesssssss, and Shell is a leader in y2k industry compliance, corrrrrrrrrect again. I stuck in his quote since here's an industry expert (that would be RQ) who "knows of NO problems in Venezuela" as opposed to your champion (that would be Mr. Fox), who at least as portrayed by the article, thinks there are. If you'd like, next time I shall insert a special "sarcasm" warning.

As for Mr. Fox: I've never heard his name mentioned to this day. Call me sheltered. I don't care much for congressional testimonies either. He is probably is a fine human being, and may well have a background in the oil and gas industry (as opposed to a "professional researcher" - what's that? A librarian on steroids? Warning: Sarcasm!!) The point is, expert though he may be, the treatment he got from the reporter make him look uninformed and his analysis shallow (a dodo, if you will). I think his interview with the reporter may have been at greater length, but in the end, all we got was a silly newsbite: <i>"But now foreign oil imports amount to 60 percent of American consumption and disruption of oil supplies from Venezuela alone could reduce imports by at least 5 percent, Mr. Fox said"</i>

Which is wrong, by the way. It's 53.11 percent, not 60 percent: 8.246 million barrels/day of crude and 2.323 million barrels/day of "products", from total supply of 19.899 million barrels/day. Those are average figures, for the week ending February 26th (source, Oil and Gas Journal, March 8/1999)

There is certainly *MORE* reliance on imported petroleum and petroleum products as compared to a year ago, which *IS* genuine cause for worry (+5.7% for crude, +29% for products). Now why wasn't this fact brought up in that hard-hitting expose'?

Just for giggles, let's take another look at another piece of this Pulitzer candidate (Warning: Sarcasm!!):

"Bad computer chips could cause pumps and navigation computers on oil tankers around the world to malfunction, also delaying 5 percent to 10 percent of all oil shipments to the United States for weeks. Even minor disruptions in the oil supply chain that are quickly fixed after Jan. 1 would send ripples all the way to America's gas pumps, Mr. Garrison said, because gas stations rely on "just-in-time" deliveries of gasoline to keep running instead of stockpiling reserves." But really, I do feel better that a Senate Committee is closely monitoring the problem (Warning: Sarcasm!!).

A quick look at the US Industry Scorecard Table (same table, same issue OGJ) shows an average U.S. daily demand for 7,281,000 b/d of gasoline. Stocks are 230,096,000 barrels, or roughly a 30 day supply.

Let's talk about production, and spare production, and imports. Production today, before the planned cuts by Opec (which they'll cheat on anyway), is around 66 million barrels/day. Production more than a year ago (3Q97) was little over 74 million barrels/day. So that gives you what, 12% excess capacity. Does that take care of that "5 or 10 percent" shortfall? And that's not counting 3 or 4 mbd of spare production in places like Saudi Arabia.

"....and disruption of oil supplies from Venezuela alone could reduce imports by at least 5 percent" ---- and where oh where would we find a spare 500,000 barrels or so? Wait, 5.7% of 8,246,000 is 470,000 barrels. There, almost made up your shortfall, now all we need is 30,000 barrels, give or take a few. (5.7% increased exports is 5.7% less domestic production, agree?)

I see a lot of attention paid to "facts" on this forum - and rightly so. Just the facts, ma'am. Show us the facts. If I, as a member of the perceived opposition, said something like " Some specific facts may- or may not- be in question" do you think I'd get away with it?

Aside from all that, you might be shocked to know that I believe that there's a good chance of a brief price spike, come rollover. All is needed is the expectation of shortages, whether real or perceived, and prices will be bid up. Witness the latest rally to around $14/barrel, only based on Opec's announcement, not actual cuts. The second oil shock after the '73 embargo was in '79, you recall? No real shortages, but up the price went, and stayed up for a while. But 2000 is not 1973 or even 1979, there's plenty of oil, with more being discovered every week, and too much production capacity for prices to stay up for the long term. That's not only my ill-informed opinion (after all, I "don't know what's going on here"), but also found in the OGJ, Offshore Engineer, the Economist, World Oil, industry newsletters (like Africa Energy & Mining), you know, rags like that. You might want to check the latest issue of the Economist, there's a cover story titled "Awash in Oil" which even predicts $5/barrel oil.

I will further refer you to the thread "Saudi Oil". There was a third party posting of an Aramco Safety Engineer assessment. It's optimistic, perish the thought!

"As for Gartner- I haven't stopped by the Middle East recently to check on their facilities. Have you? Oh. " Er, no, that was was the whole point I think, you missed it once again. I checked the phone book and the Dubai and the Abu Dhabi Chamber of Commerce books, they're not there. Ditto in Saudi Arabia. I'm guessing that they're don't have an office in the region, since that's where they'd be if they had a presence here (or maybe Bahrain). So, they may be here, but I can't find 'em. Maybe they trade info with Ersnt & Young or Arthur Andersen. But probably not, seeing as how they missed the boat on Bahrain (Bahrain declared all their gov't systems y2k compliant back on Feb 1). Which leads into the very pertinent question: how did they assign those 50 and 66 percent failure ratings? Phone surveys? Information is hard to come by in this region, Drew. The press ain't free, no disclosure obligations, everything's a rumor. Who you gonna call?

What's left? Ah yes, the little "gem" from Reuters. Wait, are you being sarcastic here, or unintentionally funny? Because if I see one more posting, one more mention of the y2k bug hitting the Middle East's fresh water supplies (desal plants), I'm going to go outside, take ten deep breaths, and try very hard not to strain something while I ROTFLMAO.

" Some specific facts may- or may not- be in question. But the general picture is widely agreed upon. The bottom line: this story has received very wide play in a different number of outlets and forums for months. To say the Venezuela situation is an "urban myth," or that no one has been talking about the oil problem - at length - is preposterous on the face of it."

So, after all this, you've proven what, exactly? Because the Venuezuela story has been talked to death on Internet forums, then that makes it true? Argumentum ad nauseam.. And for the second time, please try answering Flint's points instead of citing authority. (Argumentum ad verecundiam?)

-- Morgan (morgan96@netscape.net), March 16, 1999.

Morgan: What makes you so sure there's no problem with the Mideast's water desalinization plants? There have been several reports on this over the past year or so from substantial sources indicating a serious concern about this. With no water, there will be no people to operate the oilfields. How do you know this is not a problem?

-- cody varian (cody@y2ksurvive.com), March 16, 1999.

Actually, Morgan, I think the bottom line is that you just do not want to admit to the possibility of a y2k oil disruption problem and no amount of such evidence will be enough for you. Have a look at the current issue of Wired Magazine for a specific example of a real embedded system failure. On second thought, don't bother; it won't open your mind in the slightest.

-- cody (cody@y2ksurvive.com), March 16, 1999.

Well, "millions of chips" does not sound farfetched at all to me. Consider this quote:

An offshore platform may have 10,000 or more embedded silicon chips governing all automated and even some manual processes (S. M. Shemwell, J. Dake and B. Friedman, World Oil, April 1998, Vol. 219 No. 4).

Obviously we are not talking about offshore rigs in the Middle East, but I suspect that even onshore rigs have considerable automation. It would only take 100 platforms at 10,000 chips per platform to get a million chips. Throw in some refineries which are probably an order of magnitude more complex than a drilling rig and....

-- Franklin Journier (ready4y2k@yahoo.com), March 16, 1999.

Morgan you're so smart you can't even clean up the mess you made.

-- Where are your FACTS Morgan? (morg@n.likestoargue), March 16, 1999.

Good grief!

-- saljdf (alsdfj@;alkjfd.alsjdf), March 16, 1999.

morgan,

first, i should apologize for my remark about not knowing what you're talking about in my previous post. i felt bad about that one, regardless of whatever it was you said prompted it; it's not my style to normally make such remarks.

i'm in a rush, so i will have to get through this as quickly as possible:

one: it seems like one of your prime objections to the wash times article was its headline. well, the fact is, the headline simply reflected the story: experts *are* predicting gas lines, whether you agree with it or not. you can call it sensationalistic or whatever (perhaps reflecting a bias on your part against y2k media coverage, especially if it doesn't agree with your point of view), but nonetheless it was a fair headline. i've seen some headlines which weren't (for instance, at news.com this morning, there's a headline about DOT possibly grounding flights because of y2k- however, the story is only talking about international flights, so that hed is not fair; similarly, heds about "75% compliance" aren't right, when the story is dealing with m-critical systems only).

second, re your intended sarcasm on the shell fellow- well, i guess i'm just stupid, but i'd have to say that it was not obvious at all that that was intended to be a sarcastic remark. you just appeared to be denigrating him (as in, "who's *he*?" etc).

third, re your statistics: of course i'm familiar with some to all of these. and i caught the 60% dependent stat in the wash times story, and thought that was high. however, i have also seen another recent stat which said u.s. dependence had grown to 57% (as opposed to other reports of 53%) in the last year, so i was willing to cut that one a bit of slack, although i doubt it's one i would have used myself without knowing the documentation.

fourth, on the point of "specific facts" - i should have used the word i meant, which was "specific details." iow, the fact that this or that detail is wrong does not make the overall, broader picture inaccurate. there are facts, so to speak, and then there are facts; ie, does a detail error make the overall picture inaccurate.

now, with respect to statistics: for some strange reason, i am of the belief that just quite possibly, people like lawrence gershwin and harrison fox and the u.n. delegate are aware of the very statistics you cite. they are, after all, public record. and yet, they are still deeply worried about the oil dependence situation. hmmmm... could they possibly know more than just these statistics? (hint: they do. so do people in the oil companies.)

my point about the senate committee was not so much that everything will be fixed because they are paying attention to it, but that after all of their hearings, research, interviews, etc on practically every topic, they rated the oil situation up near the top of their list of things to worry about. could they... just possibly... know more than public statistics?

as for flint's points- what else should i say? i don't know where marcoccio got his number, as i said before, but i don't know that he's wrong either. do you? he may be right on the principle, but wrong on degree (maybe way wrong, maybe not). the fact that flint called the venezuela situation an "urban myth" certainly says something. i have yet to come across anyone anywhere who calls venezuela an "urban myth" this late in the game. urban myths are not generally repeated by the caliber of people who are worried about venezuela. that tells me more about what may be flint's predetermined view than anything else.

after all this, i've proven "what, exactly?" well, a lot of knowledgeable people are worried. a lot. maybe you aren't, but not much i can do about that.

finally, i really don't care if oil/gas is affected by y2k or not. ie, i don't have a predetermined view on this. i have posted stories from api et al that were very positive. the truth is that the truth is hard to get on y2k. the amount of contradictions is staggering.

but i do know- know- that while some people in the oil industry are fairly sanguine (and in good shape)- others are, shall we say, concerned (the word "scrambling" has been given to me). consequently, regardless of what public statistics may look like, the private situation, as reflected by the cia et al, may be different.

sorry i don't have time for more detail.

-- Drew Parkhill/CBN News (y2k@cbn.org), March 16, 1999.

Here is a copy of the article:

Experts predict year-2000 gas lines

By Jason Schultz

THE WASHINGTON TIMES

Year-2000 computer experts predict skyrocketing gasoline prices and long lines of frazzled motorists come January, when computers with the millennium bug disrupt the steady stream of foreign oil that supplies U.S. gas stations.

Oil shortages "will potentially be the major source of economic disruption in this country," said Sen. Robert F. Bennett, Utah Republican and chairman of a Senate Special Committee on the Year- 2000 Problem.

Computer failures are expected at oil refineries and ports in Venezuela, Mexico and Saudi Arabia, which provide 43.5 percent of all U.S. petroleum imports, petroleum industry experts say.

The oil shortages of 1973 and 1974 were caused by a 5 percent reduction in foreign imports, which then made up 30 percent of all oil consumption by Americans, said Harrison Fox, an analyst for the House Government Reform subcommittee on government management, information and technology.

But now foreign oil imports amount to 60 percent of American consumption and disruption of oil supplies from Venezuela alone could reduce imports by at least 5 percent, Mr. Fox said.

Venezuela supplies the United States with 1.6 million barrels of oil a day, or 16.2 percent of total imports.

At least 20 percent to 35 percent of process controls at Venezuela's six refineries have bad computer chips that won't function, said Lou Marcoccio, chief researcher for the Gartner Group. These refineries process oil into gasoline for U.S. service station chains.

Oil companies in Venezuela "have no focus and just started awareness six months ago," Mr. Marcoccio said.

The main American petroleum companies in Venezuela are BP-Amoco, Shell, Conoco and Citgo, which is partially owned by the Venezuelan government.

Ron Quiggins of Shell, who served on the American Petroleum Institute's year-2000 task force, said he was unaware of the problems in Venezuela. Other companies declined to respond to inquiries.

Saudi Arabia and Mexico, which provide another 2.7 million barrels of oil a day to the United States, also have millions of tainted computer chips embedded in refinery machinery, oil tankers and port equipment.

The built-in glitch prevents the computers from reading dates correctly because only the last two digits of the year have been recorded.

Carl Garrison, owner of the Superior SI computer firm, said he is more concerned about the ability of oil companies to ship their products in oil tankers next year.

Bad computer chips could cause pumps and navigation computers on oil tankers around the world to malfunction, also delaying 5 percent to 10 percent of all oil shipments to the United States for weeks.

Even minor disruptions in the oil supply chain that are quickly fixed after Jan. 1 would send ripples all the way to America's gas pumps, Mr. Garrison said, because gas stations rely on "just-in-time" deliveries of gasoline to keep running instead of stockpiling reserves.

"For the first few weeks of 2000, you'll probably see gas prices shoot up drastically," said Bruce Webster, who runs the D.C.-based Y2K Group, a major year-2000 watchdog organization. "I would not be surprised to see a 50 percent rise in prices."

-- just me (trying@to.help), March 16, 1999.