Giving Credit Where Credit Is Due -- November 1, 2016

Russia's Northern Fleet, most recent update: the last ping was 20 hours ago, so not much change from previous report. The fleet's location 20 hours ago was at the east end of the strait separating Malta from Sicily -- so twenty hours ago, just slightly northeast of Malta, southeast of Sicily. This is about 6/11ths or about halfway between the Strait of Gibralter and Syria. The fleet has transited the Strait of Gibralter on October 26; they may have loitered for a day in the western Mediterranean. October 26 - October 31 (twenty hours ago): 5 days. So, about five more days to destination (Syria). Arriving about November 5, two or three days before US election?

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Oil History -- Courtesy of EAI

Whale oil. From EIA today:

On Tuesday, the Cleveland Indians are set to host the Chicago Cubs in game six of the 2016 Major League Baseball World Series.

In the 68 years since the last title for the Cleveland Indians, and the 108 years since the last World Series title for the Chicago Cubs, energy production and consumption patterns in the United States have changed a great deal…

In 1908, the last time the Cubs won the World Series, the United States produced less than half a million barrels per day (b/d) of oil, with crude oil production having only started approximately 50 years earlier.

At that time, crude oil was mainly refined to produce kerosene for use in lamps. The first Ford Model T automobile was produced in 1908, kicking off a shift in demand for petroleum products from kerosene for lamps to gasoline for automobiles….

The last time the Cleveland Indians won the World Series, in 1948, the United States produced 5.5 million b/d of crude oil. Crude oil production had been steadily increasing since declines in the 1930s and would continue to increase until production declines in the 1970s. --- EIA

It would have been nice to have given some credit to Gesner and Rockefeller. LOL.

The intense whale hunting drove the number of sperm whales down appreciably. It's estimated that nearly 236,000 whales were killed in the 19th century alone.

And then, in 1846, the industry reached peak sperm whale oil.

Whalers, after plundering the Atlantic, Pacific, and Indian Oceans, were having to chase smaller whales in colder and more extreme waters, while having to utilize bigger ships over longer periods of time. This led to fewer capital returns, causing the price of whale oil to double.

But the industry peaked at this time for another reason — and it had nothing to do with what was happening on the oceans. Rather, it was the invention of a new fuel source, one that, quite literally, saved the whales.

In 1849, Dr. Abraham Gesner, a Canadian geologist, figured out a way to distill kerosene from petroleum. His method allowed for the cheap and easy production of the much desired lamp fuel. Moreover, unlike sperm whale oil, it could be stored for longer periods of time and it didn't produce an offensive odor.

Gesner's innovation sparked the rise of the American petroleum industry in the 1850s, and by the end of the decade there were 40 kerosene plants in the United States. During the 1860s, John D. Rockefeller and Samuel Andrews worked to improve the efficiency of petroleum processing. Together, and backed by an army of investors, they set up a network of kerosene distilleries that would later develop into Standard Oil.

Combine this with a sperm whale oil industry that had just peaked, and the market for spermaceti quickly evaporated.

Had we run out of sperm whales and had there been no petroleum, we would probably be burning coal for electricity and we would all be driving EVs.

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Average Price Of WTI For Calendar Year 2016

This probably won't make sense to anyone but I want to capture this for the archives.

In late 2015 or early 2016, I set up five scenarios and "predicted" the average price of WTI for each calendar month in 2016 given those five scenarios. Had things turned out differently, the scenarios would have mattered; with the price of oil where it is today, the scenarios no longer matter.

At the end of each month, I replaced the "predicted" price of WTI for each scenario with the "actual" price of WTI for the month as taken from the television crawler or the Yahoo!Finance page as a proxy.

My thesis and process was this:

• Saudi's national budget is based on $100 oil.
• there is a Saudi price, a Brent price, and a WTI price. Saudi oil probable sells at a premium to the other two (right, wrong, indifferent -- probably not particularly significant for this exercise)
• Saudi will hemorrhage cash at oil prices below $100
• it was fairly obvious in late 2015 / early 2016, that we would not see an average of $100-oil for calendar year 2016 (what the Saudis needed)
• but if they could at least average $80-oil for the year, maybe things would not be so bad
• so I developed five scenarios (high to low) to see how the annual average would work out -- and at what price of oil had to be each following month to get to $80 oil
• the January - October data below is "actual" -- with the disclaimer noted above
• in four of the five scenarios I put end-of-year oil at $80 and $85
• even at end-of-year oil at $80 and $85, average price of oil for the entire year will barely average $50
• if oil gets to $50 for the remaining two months, the average price of oil for the year will have been about $44, almost half the bare minimum ($80) that Saudi would need
• to get to $80 average for the entire calendar year of 2016 (last column below), oil will have to go to about $260/bbl for the last two months of 2016 -- probably not gonna happen

It will be interesting if the chart for 2017 looks much different than the calendar for 2016:

	Scenario One	Scenario Two	Scenario Three	Scenario Four	Scenario Five	To Get to $80
January	35	35	35	35	35	35
February	35	35	35	35	35	35
March	35	35	35	35	35	35
April	45	45	45	45	45	45
May	47	47	47	47	47	47
June	50	50	50	50	50	50
July	45	45	45	45	45	45
August	45	45	45	45	45	45
September	45	45	45	45	45	45
October	48	48	48	48	48	48
November	80	80	80	80	50	260
December	80	85	85	85	50	260
2016 Average	49	50	50	50	44	79

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Rise of the Rocket Girls: The Women Who Propelled US, From Missiles to the Moon To Mars

Nathalia Holt

c. 2016

This is really cool.

Some time ago I read a book on the woman who discovered/developed -- I am not sure of the correct word -- the rocket propellant that was instrumental in the US space program. I have notes of that book at this post.

I see now another book on the same subject, or at least similar subject, the one by Nathalia Holt. I immediately checked the index for Mary Morgan Sherman. Not there. It will be interesting to read this new book in light of the older book.

I will place notes of this book -- the Nathalia Holt book -- at this post.

By the way, another book along this line:

Hidden Figures: Black Female "Human Computers" -- WWII Through NASA (Space Race)
Margot Lee Shetterly
c. 2016
DDS: 510.92 LEE