Y2K & Oil A Final Evaluation

Part 3 -- PROJECTIONS (for rollover and beyond)

CRUDE OIL: The following is based upon statistics and previously reported problems and failure ratios applied to general statistics. We'll look at each of the 4 areas that we previously examined only now we'll look at projections for each. From there we will draw overall conclusions that become our expectations for how the rollover might proceed for oil.

We are assuming that every other aspect of the national infrastructure experiences no problems. By this we mean that we are assuming that there is no problem with the national electricity grid and no regional or local power outages where refineries or ports are located. We assume the phones will be okay. We assume the water supplies to refineries are okay. We assume there are no problems with the banking or financial market sectors. We assume that all the vendors that supply support products to oil refineries, ports, tankers, and pipelines and oil wells are all okay. [that is a tall assumption, isn't it?] In other words, we are really removing from our equations any other potentials for trouble that are beyond an oil company's control. We want to try to measure just the main impact for the oil industry itself.

OIL WELLS and Crude Oil Production levels.

Given that 80% of USA crude production is subject to the Y2K embeddeds problem we realize the mathematical factors.

Small oil wellsno problem 20% of USA crude oil production or about 9% of total US needs will not be affected unless pipelines fail.

Large oil wells With 50 to 100 LSES for each well, and a 30% to 50% LSES fail rate per well we can expect 15 to 30 LSES to experience failures. This however does not necessarily mean that all the failures will shut the well down. In fact, we suspect that at least 1 system failure and probably upwards of 5 failures per well that can/will (?) cause shutdowns. This will not be for every large well as some wells newly developed had compliant equipment already. Still, in theory this should affect nearly 80% (give or take some) of domestic oil wells. Some wells may have manual overrides that can still work but others will not. The greatest problems will be with the large offshore wells. The Large Oil Well problem could affect as much as 36% of all oil supply needed daily by the U.S. (However, if Y2K affects other industries severely, there may be less need demanded).

For purposes of projections, Let us assume a mild scenario of only 1 in 10 oil wells suffers catastrophic shutdowns that can't be fixed in a few days. We know that 46% of our needs are met by US producers. Of that 46%  36% is from large oil wells. If 10% of supply is lost from those wells for indefinite or prolonged Periods we would then have a 3.6% supply drop to demand ratio. So we have a strong threat to the 36% of US oil supply going to refineries from US producers. A 10% reduction would mean a 3.6% drop in supply. This is roughly the equivalent of the 1973/74 Arab oil embargo but this is not the only threat. A 10% loss estimate is especially optimistic considering the mathematical odds but we can hope that parts are available in some cases, and workarounds available for other and the remainder of the 90% simply luck out. That would leave us with a 10% reduction. This, I say again, would be extremely optimistic given the mathematical odds based on the prior testing that gave us the failure ratios we are working with.

Foreign oil well production:

What goes for America, also works for oversees oil-producing nations. In foreign oil producing/exporting nations we find similar problems. This is apparently true for those cities that were highlighted in the latest US DoE "watch list" dated at the first of December. This list includes Venezuela, our number one source for imported oil. It also includes Columbia, Nigeria, Iran, Iraq, Russia and others. For the links and snippets see the old thread: http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001zSh

See this link to the separate thread on Venezuela and the link to DoE on this nation. http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001zHG

In addition, you will recall the other day's Bloomberg Financial News story citing UN officials reporting that Gulf Oil producing nations were not compliant. Later the story was downplayed and the spinmeisters came out of the woodwork to claim all is A-OK with oil. I've now had 3 seen three separate sources from oil insiders saying Saudi Arabia is in deep trouble and is not expected to make it even with their oil sector.

Folks, if the Persian gulf nations don't make their oil sector compliant and it goes Down, there is no need to continue this analysis. There's no need to even have this forum anymore, because if they go down, and hard as reports suggest, combined with all else you can kiss this nation goodbye. A 70% to 90% loss of oil would be the death knell of civilized society. So, we're going to take a more contrarian view and assume that it won't be that bad.

Let us optimistically assume, that only 10% of the oil production is affected in the Gulf. Let's project the potential problems on this basis. Please see the US DoE summary of Oil-importing nations and their percentage of supply to US needs. See the link: Latest monthly tallies:

http://www.api.org/faqs/

The link found below shows the US Senate figures on annual reports based upon 1998 final totals. (Remember that these are monthlies and fluctuate drastically from month to month.) Risks assessed by Gartner Group analysis supplied to the US Senate by request. http://www.iea.org/ieay2k/newlinks/imports.htm

We will also project that nations on the High level of probable disruptions will lose a third of their export quantities to the U.S based in part upon the mathematical factors plus the indications that those nations are less likely to provide sufficient infrastructure support. It may well be 100% and not 33%. We also then assumed that everyone else except the UK would lose 10%. (UK is not much of a factor anyway for US needs). What we then see here is a total impact of 22.8% of foreign crude oil supply lost to US. This translates out into an 11% of US needs not being met due to foreign interruptions. Combine this with a 3.6% domestic production loss and you have a 14.6% loss of crude oil. This would be far more severe than either of the previous oil-shock situations. Remember also, that I'm arbitrarily being optimistic in spite of the mathematical equations suggesting that all large wells will experience a shutdown failure. The prior testing models are suggesting that 1 to 5 of those systems that fail will be critical shutdown failures.

If only 10% stay down, that would be very optimistic. We note that parts problems are just one of many factors that could delay crude production stoppages. If you noted in the TAVA study, a real problem was lack of replacement parts because vendors were either no longer in business or no longer willing to make that part but rather required buying a whole new customized system. Well re-drilling is another aspect to consider when it has to replace the old well that lost all pressure and cannot be re-utililized. My point is that the odds are very much against just a 10% loss. But that is what we will work with except for high-risk nations known to have tremendous other infrastructure problems and severely behind on remediation.

What is the median expectation for well failures? I'd be more inclined to say a third to one half as being more realistic. If this were so then we'd be looking at a 30% to 46% loss of domestic US sources for US supply needs. Remember though that this reflects the deductions for the 9% factor supplied by non-embedded oil wells that must be subtracted.

So what do we have for an average projection range?

Most optimistic -- 14.6% loss of supply needs. Modest projection -- 30.0% loss of supply needs Median projection -- 46.0% loss of supply needs Maximum -- 91.0% loss of supply needs

When I review the statistics for the limited testing that was done and then apply that to the overall quantity statistics that we do have, I just don't see anything more optimistic than a 14% loss of supply, although I'd apply a plus or minus range of 5 percentage pointsfor a minimum range of 9% to 19%.

I also don't think it will reach maximum either. So, I'm still inclined to range it as between a 20% to 30% loss of supply based upon the statistics and insider reports of prior results.

B. Oil transportation -- pipelines, ocean tankers, port facilities

I simply don't have enough data to factor into projections for any problems that might be involved. I have noted the US Coast Guard commander's comments. We've noted that some port authorities are imposing restrictions. We've noted the problems with embedded systems within tankers and of course the loading and unloading systems in ports. Our projections then will assume these problems will only be short-lived. These assumptions may be too optimistic. I just have no statistics with which to crunch numbers for projections.

C. Oil Refining

This is the next big factor in projecting oil issues in Y2K. In doing so we should remember the earlier quotes from the Tava report on its experiences with its own major oil company.

Note the following sequence of failure???

"One of the more troublesome findings was that the analyzers would continue to work but would send erroneous data." (SO, IT WOULD CONTINUE TO WORKfor awhile, BUT)

"The proprietary networks from the control systems to the analyzers would fail. The inventory and analysis would take 7 weeks and cost $122,000. The conversion for two units would take an estimated 15 weeks and cost $760,000."

(NOTE: TAKE 15 WEEKS!!! That is almost 4 months!!!)

" One piece of equipment successfully made the January 1, 2000 transition and was allowed to continue. Just over a month later, when checked again, the date on the equipment was January 34! "

It took a month to show up!

" The projected risk levels for failure of all the units of these companies was between 60% and 90% if the non-IT parts of the business were not found and fixed."

Well those are pretty high numbers. We know that the US Department of Energy indicated in a 1998 year-end report that the US had 95 refineries operating last year. The report cited above refers to a major oil company that employed consultants from Tava to assist in remediation efforts. Prior remediation found a 60% to 90% risk of failure in embedded systems in these refineries if not fixed. We know, and the oil companies in their 10-Qs, as well as the NIST report tell us that they know they didn't/couldn't get them all. The US Dep't of Commerce's NIST report at the end of November tells us that testing was completely insufficient. So what kind of failure rates should we expect that would close down a refinery?

Now, I've come across information from an embedded systems oil engineer who served as the chief designer of embedded systems for a major oil company. He has over 20 years in the industry and until this past summer was involved in remediating those systems that he designed. He also assisted in helping other oil companies with their refinery embedded problems.

He has indicated that after reviewing the famous DD1 Light oil chat dialogue, he indicated that the projections made by DD are very "possible." He also said:

"No one (in this industry) is putting out accurate information any more, its impossible."

He goes on to say:

"When I was at ______ [Ed. Note: Oil co. name is deleted by this editor] site in ______, [Ed. Note: city location deleted for confidentiality] they said they were shutting down at the end of the year. There are a lot of other refineries doing same. "_______ [Ed note: Oil co. name again deleted] is having problems world wide. ARCO and EXXON are shutting down the two major international pipelines." "The least of my concerns are oil and chemical,  main concern is nuclear reactors. The same embedded systems used in the refineries are used at the nuke plants. The whole northern hemisphere is going to be exposed to radiation."

"Gulf is announcing they are shutting down overseas as non-compliant."

This fellow's experience with embeddeds in oil has led him to conclude that similar embedded problems in the nuclear power industry will lead to nuclear accidents and thus overshadowing problems within the oil industry. Indeed, if nuclear clouds were hanging over the whole Northern Hemisphere it would overshadow any percentage drop in oil supply or refined products. This is someone that I was hoping to make contact with and hopefully persuade him to come to this forum and share with us his knowledge. Unfortunately, I did not know how to contact him until a few days ago and the holiday time has made contact difficult although I have tried. I will keep trying to reach him and perhaps he will wish to post here.

The US Dep't of Energy in their 1998 summary says there are 95 active crude oil refineries operating as of the end of 1998 here in the U.S. What if 10% of those 95 US refineries go down and 10% of the foreign refineries go down? What is the impact? Substantial, to say the least. I will leave you to fill in the numbers, but what I've just related is a very, very optimistic projection. A single refinery shutdown in the past has sent tremors through the markets and triggered rising prices. Now, combine that with oil well production problems and you can see at least a pricing impact. This is based upon ignoring all other US refineries.

What if 20 refineries have problems? Especially if they are some of the largest capacity refineries. Keep in mind that a lot of the larger production plants have greater amounts of embedded systems and require only a handful of men to operate them. BUT, when a problem develops and a refinery full of embeddeds shuts down, there is a problem. It takes manpower to bring it back up. There are teams of specialists who go around doing nothing but starting back up refineries from maintenance turnarounds. Please note what another oil engineer had to say in commenting about the quotes from this engineer whom you just read about. This second engineer made the following comments about re-starting an embedded systems controlled refinery:

" Some crews specialize on such re-start-ups, so that shut downs are normally staggered to better utilize such specialists. An industry wide shutdown and fresh start-up is of itself an unprecedented hazard, because tiny misjudgments in start-up can be very costly, and destroy a plant. The hazards of having plants started-up without control by sufficiently experienced "start-uppers" might be almost as hazardous, and a global scale, as any embedded chip problems."

Now, perhaps you can see some other factors that are indirectly involved in this problem for the oil industry. Other problems can cascade indirectly from software code and embedded systems problems.

Do you think that perhaps my projection of only 4 or 5 plants shutting down is a bit too pessimistic? Or is it too optimistic? You decide. Frankly, I think I've been overly optimistic.

In summary, we don't know how many catastrophic events will occur on rollover that we will be able to see or hear about immediately. I suspect it could be several days. There will be delayed events that were fatally wounded but unknown to the company until perhaps a month later when it finally keels over dead surprising operators who had no clue. Expect many of these problems to take a long time to fix before production can resume. Yes, there may be some workarounds available but primarily in smaller less developed refineries.

Effects should begin to be felt later in the month at the pump. If it jumps in the first few days due to known problems, just figure it's only just begun to jump and that more problems are yet to come. Supplies would begin to shrink within days but the full magnitude may slowly develop at the pumps over a course of weeks. Probably mid-February if these systems follow the same fail ratios as during testing. How long will it last? I would suspect that it will be 6 months at the earliest to recover from the lengthy problems of system replacements and it is possible that it could be closer to 9 months or a year.

I suspect that we'll see at least 4 or 5 refineries out of production for at least a significant period of time (say 4 to 6 months). This would be the very minimum. That would be exceedingly optimistic. It is also premised on the notion that there are NO power outages or dirty power problems for any refineries. Dirty power could really screw up a refinery and quickly cause a shutdown. It also assumes that there will be NO phone outages, and NO water disruptions. Any shutdowns for any reason at a refinery loaded with embeddeds could mean a long wait for a special re-start team to comeIF there are several other refineries in the same boat. Remember a refinery that has gone cold can take a long time to get re-started.

Therefore, 4 to 5 refineries lost and out of production for an extended period of time is exceedingly optimistic. There is a good chance that 10 to 20 refineries could go down for various reasons, and not all might even be related to the embeddeds issues or power failures. It could be dirty power that knocks them out or perhaps phones or even complete loss of water for an extended period. My projection though is going to focus only on the embeddeds issue, not software code problems, not power loss, not dirty power issues, etc. We're just looking at it from the embeddeds standpoint. I think there's a good chance that we'll see 20 to 40 refineries go down with problems. Some will go down briefly, others for several days. These would not be the embedded refineries with only a handful of workers. These minimal staffed refineries will stay down much longer even if the embeddeds are fixed prontoIF many of them go down at once. Why? Not enough specialists around to restart.

I'm also not going to factor in possible explosions and fires that might take a refinery down for months or years. Still I think we stand a better than 50/50 chance for at least 9 or 10 refineries to go down for most of the winter and spring. Worst case would be all refineries going down for various reasons. I think that is highly unlikely without the grid going down. IF the grid goes down, the oil industry is TOAST for 6 months. PERIOD! Median case would be 30 to 40 going down and 20 to 25 staying down for 6 months or more.

It also assumes that pipelines will function normally and that there will be no problems with oil tankers or oil docking facilities.

Based upon a premise of no other infrastructure problems"

I think there is a 5% to 10% chance that no refineries will go down. I think there is a 5% to 10% chance that half the refineries will go down I think there is a 50% chance that 9 or 10 refineries will go down for 6 mo. I think there is a 20% chance that 20 to 30 refineries will go down for 6 mo.

I see a 95% chance for at least a 7% drop in oil supply for the USA I see a 70% chance for at least a 14% drop in oil supply for the USA I see a 50% chance for at least a 30% drop in oil supply for the USA I see a 60% chance for at least a 40% drop in oil supply for the USA

I see zero chances for NO oil. There will still be oil from stripper wells if the pipelines stay up.

I see problems developing fairly quickly but not publicly known for perhaps 2 weeks even if there are explosions and fires. I suspect the spin meisters will work overtime to blame any problems on any thing but Y2K due to liability factors. We will not likely know about oil and Y2K directly until later in the month, even if prices keep going up. There will be other excuses in order to keep the markets calm as long as possible.

I see 100% likelihood of LIES being spun by the government and big business starting on January 1, 2000  within 2 minutes after rollover. YOU CAN TAKE THIS ONE TO THE BANK.

-- R.C. (racambab@mailcity.com), December 27, 1999

Answers

Remember folks,

Those projections are based upon the pollyanish assumptions that nothing else will have a problem... none, zip, zada. And still this is as optimistic as I can see it...but I could see it a lot worse, but not complete collapse of the oil industry.

-- R.C. (racambab@mailcity.com), December 27, 1999.

RC,

I hope now the morons that have been attacking you realise why you have taken your time to get this evaluation together - it is IMHO a Tour de Force... you have managed to pull together so many different strands of data into a cohesive whole that this should give even the most ardent pollies pause.

I have posted all three parts on all the Gold forums.

Thanks once again, an outstanding effort!

-- Andy (2000EOD@prodigy.net), December 27, 1999.

Thanks RC ... an outstanding job.

Please accept my deepest heartfelt sympathy on the news of the passing of a member of your family. My prayers go out to you and yours.

Rev. ThunderLight

-- hiding in plain (sight@edge. of no-where), December 27, 1999.

You my friend are the very reason I have become so addicted to this board, my wife is starting to complain (again). You cut through all the hogwash that is spoon fed to us by the wimpish, politically correct press and Television. If it were not for people such as you, us poor yokels would be wallowing in the dark. On the accepted scale of 1 to 10, I would venture to say that it will be an 11. Thanks for the info, I am saving it for history, true history, not from the history spin masters.

-- Notforlong (Fsur439@aol.com), December 27, 1999.

Notforlong,

Sorry to get you in trouble. It'll all be over soon enough. But I'm just one of you guys. We're all searching together, and none of us has all the answers, we don't even have all the pieces of the puzzle.

One comment you made:

"You cut through all the hogwash that is spoon fed to us by the wimpish, politically correct press and Television."

ME:

Well, I used to be one of them. I worked in radio...at one time I was a spinmeister for the Reagan-Bush Re-election team. So, I guess the old phrase "takes one to know one" might apply here. I can spot spin a mile away. I can see their situations and figure out what is their most likely spin of action going to be.

I'm not the only one here... there are dozens of us that post important info here. In my case, I just happen to have some contacts within a segment that is definitely up to its eyeballs in trouble with Y2K.

Regarding the notion of 1-10 scale... Everyone has their own opinion and is entitled to it.

I see it as still probably about a 7 I suppose. I think oil is likely going to be fairly bad relatively speaking, but if every other aspect of the infrastructure stays up, then the oil industry will escape devastation and face only some relatively major problems.

-- R.C. (racambab@mailcity.com), December 27, 1999.

Thank you R.C., for this extensive and informative series of reports and analysis. In my opinion, you have provided the best and most thoughtful overview of what promises to be an incredibly diificult sequence of events for this nation.

I deeply appreciate your knowledge and attention to detail. Thanks again!

-- Irving (irvingf@myremarq.com), December 27, 1999.

RC

I just posted this on Gold-Eagle and it was pulled, presumably by Dr. Vronsky.

This is outrageous IMO.

I know that your last analysis was featured on the site as a guest editorial -

Just a heads up should Vronsky approach you.

It's pretty pathetic that Gold-Eagle should pull the most important post thay've had in my memory.

Any gold-eagle lurkers here should complain to Vronsky.

-- Andy (2000EOD@prodigy.net), December 27, 1999.

Andy,

The Count posts here alot. Maybe he just wanted my permission. If so perhaps this post will be all that he needs. He is welcome to post it if he so desires. He has my permission if he feels he needs it. Perhaps though, it may be too hot to handle. I did quote someone who names a few names of oil companies, plus the links name companies.

-- R.C. (racambab@mailcity.com), December 27, 1999.

RC

I can't thank you enough for your thought provoking evaluation. Extend these metrics to other known trouble spots such as water supply, sewage, government at ALL levels, large corporations (the small and medium sized ones are DOA), and you begin to realize that there's a good chance that within 1-2 years we may find ourselves somewhere between TEOTWAWKI and TEOTW.

-- Dr. Roger Altman (rogaltman@aol.com), December 27, 1999.

Most optimistic -- 14.6% loss of supply needs
This is more than double the 70s Recession amount...
Like I've said before, a Global Depression is the BEST we can hope for.

-- Dan G (thepcguru@hotmail.com), December 27, 1999.

Thanks R.C. Hard data has been hard to come by with respect to Y2K. Your report has been a great help to me.

I've passed the info along to all of the people on my Y2K list.

Fundamental Law of the Universe 23b "Every organism, from the lowly ameba to the smartest human does that which it PERCEIVES to be in its own best interest." Desert (Yes, you may quote me.) Dave

-- David Craig (DesertDave@aol.com), December 27, 1999.

RC:

Do you know if the equipment in use in Iran and Iraq are as automated as other places? Is it possible that their equipment is much older and not updated (due first to the Iran/Iraq war in the 80s and the subsequent Gulf war with Iraq and the Technology Embargo on Iran in the 90s) and therefore may largly lacking LSES and therefore not at risk?

If my idea is correct, would that not put these two in a rather unique position post y2k to supply oil?

-- Interested Spectator (is@the_ring.side), December 27, 1999.

IS,

I am sure they use relatively modern technology. There was a post from PNG who lives in Japan, where he described a meeting with a Japanese embedded systems designer who stated that the systems he installed throughout the middle east would not be compliant.

In Europe the North Sea platforms built fully 25 years ago are full of embedded chips...

Plus I'm expecting Saddam and perhaps others to pull the plug on oil anyway to stick it to the West, y2k or no y2k...

-- Andy (2000EOD@prodigy.net), December 27, 1999.

Seven sisters = four horsemen?

-- number six (th@t's_all,_folks.com), December 27, 1999.

IS

Spokesmen for both nations... Official spokespersons... have recently (in the last 2 months) stated that their countries would not make full compliance.

Both employ LSES in their oil industries.

Iran admitted to of its refineries (largest ones) would not be compliant. Furthermore, they said they could not find/obtain parts to make the needed repairs. They admitted their refineries would not remain operational. They have 2 other refineries that are now under construction but will not be ready for another year or more. Iran apparently picked up a lot of imbeddeds during the waning months of the Shah... in the late 70s.

Iraq had much newer systems picked up during the 1980s from the US. How much of that survived the Gulf war bombing, I do not know. From what I gather the USAF and allies only bombed key points of refineries just enough to put them out of action for the war's duration but didn't obliterate the refineries...after all, might need it later after the war.

Iraq has admitted that it cannot fix its embeddeds and has adopted a Fix on Failure policy. They've admitted it. That's more than I can say for our lying leaders.

-- R.C. (racambab@mailcity.com), December 27, 1999.

"The least of my concerns are oil and chemical,  main concern is nuclear reactors. The same embedded systems used in the refineries are used at the nuke plants. The whole northern hemisphere is going to be exposed to radiation."

-- Hokie (nn@va.com), December 27, 1999.

RC:

I could handle and almost expected (but was hoping otherwise) the grim siutation (I didn't know the details but just knew TPTB were lying on a grand scale) you laid out and therefore was angry but not surprised at what you uncovered. However there was one sentance that made me just stop cold and go numb:

"The least of my concerns are oil and chemical,  main concern is nuclear reactors. The same embedded systems used in the refineries are used at the nuke plants. The whole northern hemisphere is going to be exposed to radiation."

Can you please explain this to me what this means so I know I haven't misunderstand this. I understand this to mean that within 6 months to 2 years the Northern Hemisphere is over. (May be that's why Gates is on a boat in Australia).

-- Interested Spectator (is@the_ring.side), December 27, 1999.

Well all, we know know why all the old nuclear bunkers were brought back into service and what TPTB meant when they said they had bunkers. The term was obviously not chosen lightly.

I thought TEOTWAWKI meant "Mad Max" (the world as we know it, but not as the third world knows it), but why does "Deep Impact" now come to mind instead?

-- Interested Spectator (is@the_ring.side), December 27, 1999.

IS

Yes that is a chilling quote isn't it? This fellow I'm quoting here is the one I've been trying to contact and convince him to go public.

He's thinking that because he knows embeddeds so well in the oil refineries...he is a design engr specializing in embedded systems and knows them inside and out. He's figuring that if it's this bad in the oil sector, it must be equally bad in the nuke power sector. Thus this man is quite concerned and assumes the nuke plants are gonna let loose a lot of contaminated clouds of steam.

I don't really think he's right though. I've read enough that leads me to believe now that perhaps there are strong differences between embedded systems in oil versus power, espec nuke power. I did have correspondence with a nuke engr at a plant I won't disclose per his request. He told me that he's quite concerned but not so much over nuke power or electricity power. He's more worried about oil and other problems. He told me that his nuke plant had very little problems but was combed with a fine-tooth comb repeatedly. The only problem uncovered was that the secondary back up cooling system water supply was the local water utility which did not pass Y2K tests for compliance. Thus, there is concern but not enough to shut down the plant. He thinks (based upon what he's heard and knows) that the nuke plants will be okay.

On that basis, I've really relaxed about the nuke issue. I suspect now that there may be no problems...but wouldn't rule it out. You just really won't know til it rolls.

-- R.C. (racambab@mailcity.com), December 27, 1999.

IS,

Looks like that line struck us the same way at the same time. I as well would like more info on this. A CBS Chalkboard breakdown. Are we talking Chernobl's in every state?

-- Hokie (nn@va.com), December 27, 1999.

Ah. So did the nuke dude identify systems that were inaccessible?

-- Hokie (nn@va.com), December 27, 1999.

Hokie,

See the above...looks like you posted about the same time as I did.

I am not privvy to any further comments unless or until he contacts me and responds to that point. I've asked him pointblank about this by email...but with the holiday and all he may have not even downloaded his mail for awhile.

As I stated above, I think perhaps this fellow is assuming that both industries use the systems nearly the same way, and from what I've been able to pickup as a layman, it seems that each industry uses them with enough differences that indeed there may be little or no issue for the nuke plants.

-- R.C. (racambab@mailcity.com), December 27, 1999.

Tell me something folks. I began to suspect that perhaps my post would not live up to the early announcement I made about being shocking. Frankly, most of my projections are not shocking to me. But I was referring to the oil engr who made some shocking comments about oil versus nuke power plant problems. It shocked me but did that quote live up to the advance billing and shock you too?

-- R.C. (racambab@mailcity.com), December 27, 1999.

R.C.

Thanks for all your work. It seems to me that the oil dude's concern was largely compounded by the inaccessibility of the LSES, and so if this is accessible in the nuke plants, then reports of success in testing could be accurate. Of course, I am a layman as well, just pluggin' along here, so my thoughts probably don't mean shit...

I really do appreciate your work R.C. You broke things down real well for me.

-- Hokie (nn@va.com), December 27, 1999.

Heh, I was shocked all right!!!

-- Hokie (nn@va.com), December 27, 1999.

R.C., first of all, sorry to hear you had a death in the family. Just read your long awaited posts. I suspect there will be flames on the forum with debunkers, but really now--You, Andy, Gordon, Downstreamer, Interested Spectator et al have spent a lot of writing time creating this information and have supplied too many details for these and other posts to be figment of your imagination.

Thank you for your hard work at some probable personal cost. I have two other women friends who are now or were in the high tech field who are believers as I am. I sent this to them as a follow up to our dinner table discussion last Monday when we all met for dinner.

You just moved my number projection up the scale. I have to think about where my preps are and maybe make a trip to the SPCA for a loud dog among other choices.

Thanks again.

-- Nancy (wellsnl@hotmail.com), December 27, 1999.

Yes, I was shocked by the nuke implications. Makes me wonder " How do I nuke-proof my bunker/basement? Can anyone point me to a relevant thread?

-- cmd0903 (cmd0903@dontcall.com), December 27, 1999.

Hey guys,

I really don't think the nukes are that serious a threat at this point. I don't think they'd have risked life as we know it (lawki) just to keep the sheep quiet and the quarterly profits running a little longer. After all what does that matter if nuke radiation kills you and and all your customers? BUT... there is another thread going on down lower on this... and it looks more than one person has been hearing reports on the nuke plants taking some sort of action... here's the thread...one of the comments near the bottom links to a website reporting on this. FYI:

http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0026ub

Again, I'd take this with some grains of salt... and while there is some reason to wonder, I'd not get panicky on this one, at least not until they start evacuating the areas or you see martial law declared early on, which I'm now not inclined to expect before rollover.

-- R.C. (racambab@mailcity.com), December 27, 1999.

thank you RC and all your associates who post here. thank god for those who speak the truth. unfortunately, the "truth ain't too rosy, is it?" god bless and thanks for taking so much of your holiday time to finish your analysis.

-- tt (cuddluppy@nowhere.com), December 27, 1999.

Of course that statement is shocking.

I continue to believe that a prudent individual would opt to shut down nukes prior to the rollover. This *might* lend credence to rumors concerning gov't action on or around the 28th. My research suggests that, despite the six months required to fully cool a reactor core, the initial 48 hours represent the critical risk (shutdown on the 28th would allow 72 hours or so of fully functioning infrastructure). Otherwise, should the grid falter along with the plant, we would be one 'glitch' away from a meltdown. Backup generators, cooling water, internal 'networks', embeddeds (esp. monitoring) would *all* need to function flawlessly to avoid catastrophe. Thus I believe discussion on pre-emptive shutdown is probably ongoing. If a decision is made in the affirmative, then some declaration will be forthcoming, along with certain restrictions. As stupid as people are, shutting down nukes would scare them by 'revealing' the legitimacy of the threat.

I expect that there *will* be shutdowns of "Soviet-style" (esp. "Chernobyl design") nukes. If all of these are not shut down within the next 48 hours, expect at least one to melt down. This may also lead to panic and the 'Dec. 28th scenario' again becomes more credible.

Simultaneous meltdowns in CIS and European countries with release of radioactivity would indeed 'cover' the Northern hemisphere with radioactivity. Though not exactly comforting, the effects on North America could be minimal. I don't know, but I believe the radiation/radioactive fallout reaching N. America from Chernobyl was approximately zero. Definitely worth a few $'s to have a stock of KI on hand (at minimum).

What is most "shocking" in this report is realizing, once again, how close we really may be to a complete collapse. When best case scenarios look this bleak it does not require an overactive imagination to contemplate events in such a way that TEOTWAWKI becomes the most likely outcome. It is hard to avoid such a conlusion even after assuming that every other aspect of our infrastructure functions perfectly. This assumption is not just "petty tall", it is totally irrational!

Contrary to the assertions of true pollies and trolls, namely that we (the doomers/realists/GI's) *want* these terrible things to ocur, we are all pollies in our own way. R.C. wrote, "I've now had 3 separate sources from oil insiders saying Saudi Arabia is in deep trouble and is not expected to make it even with their oil sector. Folks, if the Persian gulf nations don't make their oil sector compliant and it goes down, there is no need to continue this analysis. There's no need to even have this forum anymore, because if they go down, and hard as reports suggest, combined with all else you can kiss this nation goodbye. A 70% to 90% loss of oil would be the death knell of civilized society. So, we're going to take a more contrarian view and assume that it won't be that bad."

I'm with you on that one R.C. It may be that the most 'realistic' and purely analytical assessment heavily favors a complete infrastructure collapse, but let's not go there. A true pollyanna is in state of complete denial. I'm in a state of partial denial, otherwise known as undue optimism. I'll hope against hope for the best case scenario because I love my family, my friends and my country. I need to keep hoping, regardless of what irrational assumptions are required, because without hope I will be paralyzed. Without hope I cannot do the things I need to do today.

Perhaps there is only a modest difference between the pollies and the 'realists'. Each group will only admit to a possibility for that level of disaster which they can psychologically bear. Our ability to live and function while acknowledging potential disaster is greater, but not unlimited. My 'polly-mode' kicks in a little further down the spectrum than the avg. polly - that is all. I need a little less of unwarranted and irrational optimism, pollies need a little more. I believe we all need some.

With that in mind, I wish us all the best. I acknowledge that my preps, though extensive, are not sufficient to see me safely through what I believe lies ahead. To think otherwise would be hubris, pride, arrogance and irrationality in the extreme. I believe we will each soon attest that "these are times that try men's souls."

May God bless and keep each one of us.

-- Me (me@me.me), December 27, 1999.

Hey, RC. Excellent summary. Glad to see you maintaining your optimistic view. Looks to me like you're in the right range for crude, but you've pollyfied a bit regarding the refineries. '50% chance that 9 or 10 refineries go down for 6 mo'? This would only be about 10% of the number of refineries (not necessarilly 10% of capacity). Just guesstimating, but I bet this one's going to be quite a bit higher.

Shocking? No. On the whole, it's right in line with all the data you've been gathering and we've been discussing all year. (As you did, I have to discount the 'nuke' statement, as it's not coming from a nuke guy.) And while this may be right in line with our expectations around here, it will be o major shock to about 95% of the people in the world. You can fool most of the people most of the time...

Because that's what they want.

Thanks for all your hard work, RC.

Godsp

-- Pinkrock (aphotonboy@aol.com), December 27, 1999.

R.C. - THANKS! That's a long time to be "breathlessly waiting" - vbg - but worth it! So sorry about your loss.

Yes the nuke quote was a bit of a shocker, but I wouldn't be so quick to assume that all is well. While I doubt that ALL nukes will head to China, I would be very (and very pleasantly) surprised if we don't have at least one nuclear "incident" due primarily or secondarily to Y2K. I don't think LSESs are the only problem. If there was a "station blackout" at a nuclear plant it would be a "bad thing" and with the foolishless at NERC and the codependence of the nuke and non-nuke plants in order to keep the grids up, and the dependence of the non-nuke plants on oil and trainloads of coal.. I just can't be optomistic enough to assume there will be no "incidents".

I do have a couple of questions for you.

You say: "He has indicated that after reviewing the famous DD1 Light oil chat dialogue, he indicated that the projections made by DD are very 'possible.'"

I must have missed that famous chat. Could you point me to it, or repost it here? Thanks.

Also.. about pipelines. Several places you say "if the pipelines stay up". And "I see zero chances for NO oil. There will still be oil from stripper wells if the pipelines stay up."

You kind of quickly gloss over the pipeline risk in these 3 posts, but I seem to remember (perhaps it wasn't from you) some pretty scary discussions about the risk of embeddeds in pipelines, and how if pipelines shut down - esp. in cold climates, it will be a LONG time before they are working again.

So, in addition to the fact that you have taken an arbitrarily optomistic stance in your other projections, and you have chosen to assume that all the infrastructure stays up, you have chosen the most optomistic assumption with regards to pipelines, right?

As Infomagic says: : "I could be wrong...it could be worse."

Links from above:

the latest US DoE "watch list" dated at the first of December. This list includes Venezuela, our number one source for imported oil. It also includes Columbia, Nigeria, Iran, Iraq, Russia and others. For the links and snippets see the old thread: http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001zSh

See this link to the separate thread on Venezuela and the link to DoE on this nation. http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001zHG

Please see the US DoE summary of Oil-importing nations and their percentage of supply to US needs. See the link: Latest monthly tallies:

http://www.api.org/faqs/

The link found below shows the US Senate figures on annual reports based upon 1998 final totals. (Remember that these are monthlies and fluctuate drastically from month to month.) Risks assessed by Gartner Group analysis supplied to the US Senate by request. http://www.iea.org/ieay2k/newlinks/imports.htm

re nuke plants: BUT... there is another thread going on down lower on this... and it looks more than one person has been hearing reports on the nuke plants taking some sort of action... here's the thread...one of the comments near the bottom links to a website reporting on this. FYI:

http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0026ub Nuke plant

From Part 2:

Here is a recent report on the US Coast Guard's position regarding this issue. From Federal Computer Week: http://www.fcw.com/pubs/fcw/1998/1207/fcw-newscoast-12-7-98.html

Here is a link to another Maritime website that spells out more details of problems with embedded system aboard ships: http://www.ship2000.com/Ship2000.nsf/5a8ba7baee61c43c802565df004ad3f f/29a84b3de62b2a0e802566b300416c04?OpenDocument

What do we know about Y2K remediation in refining? The oil industry is not providing details anymore about its progress. We can however refer back to this classic webpage for an interesting article on one Y2K remediation company's work with a major oil company. This article describes the remediation company's efforts and those results at the 18 refineries owned by the Client Company. http://www.prepare4y2k.com/embed1.htm

And another archived article confirms the premise:

http://www.cio.com /archive/090198_y2k_content.html

And for just a little more about nuclear plants (one recent thread - many more in the archives) see: Remember Shirly Jackson, chairman of NRC, why did she resign?

Again.. thanks so much for adding your piece to the puzzle. Your efforts are greatly appreciated.

-- Linda (lwmb@psln.com), December 27, 1999.

R.C.: Two of my grandsons are coming for a visit today. I think that I will give my daughter and grandsons an extra hug when they arrive. Grandmother and I have planned a big day for them doing the things they like to do. When finished, I will watch them leave for their home 180 miles away and be happy. I live within visual range of Commanche Peak and I cannot afford to be optimistic about their remediation. We are primed to move within MINUTES IF NECESSARY. Thanks for your excellent summation. Please allow me to hope you are wrong. Based on what I have seen in Senator Bennett's committee however, I believe you are on the optimistic side and have planned accordingly. Feliz Ano Nuevo.

-- Neil G.Lewis (pnglewis1@yahoo.com), December 27, 1999.

Neil,

You must understand that I don't endorse nor do I propose that the nuke plants will go haywire. I'm only fowarding the quote from the oil embeddeds expert who figures that the nuke plant problems must be similar to the oil refinery problems. They may be, but then again they may not be. So, I encourage you all not to panic over this. But it is prudent to remain vigilant, alert and prepared and not let your guard down due to the pandering pablum of the spinmeisters.

-- R.C. (racambab@mailcity.com), December 27, 1999.

Other than the shocker re the nuclear plants, the thing that shouts out to me in your projections is that they are all based on EVERYTHING ELSE UP AND RUNNING. However, without oil there isn't going to be much that is up and running. No oil, no grid...no grid, no oil. Seems to me the whole infrastructure comes down to a bottom line of oil, and without it we are toast for at least 4 years with infrastructure repair/rebuilding... and at least 10 years for economy to come out of the depression. For most of us trying to see into the future and prepare, we have no concept of what could or will happen. All of these failures could provide lots of employement...on the other hand, is it just high tech employement where most will not qualify or will there be a need for a lot of ditch diggers, pipe fitters, welders, large equipment operators, etc. And last but not least, do we women get relagated back to the pencil pushing jobs of minimum wage once more?

Taz

-- Taz (Tassi123@aol.com), December 27, 1999.

Hi Linda,

Question 1: about the DD1 Light Oil chat ... wow! You mean you missed that? It had to be one of the top 10 stories of the year covered on this here forum.

Answer: See the following links:

Here's the main thread with the dialogue of DD1 Light

http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001gGj

Here is the follow up with a short interview of DD1 Light by Gary North

http://greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001gf6

QUESTION #2: About why I assumed that the pipelines will stay up when making projections.

Answer: Because I don't have the hard data to crunch the numbers. So anything less and the pollys just blow smoke to distract from the areas that do have numbers. Does that make sense? In other words, there's enough hard data with numbers...that if I just focus on those 2 aspects... numbers on oil wells and numbers on refineries... those numbers alone are enough to destroy the polly claims of BITR only.

In other words, we don't need the pipeline aspect put into the equation. We don't know the stats so let's go with what we do know, assume that what we don't know is no problem, so that it doesn't muddy up the waters of debate/discussion. You don't need the pipeline aspect to realize that oil is going to be more than a BITR.

I tried to be absolutely optimistic whenever it was possible to be so and still stick to the numbers...in order to show just how devastating the mathematics actually are and how absolutely PERFECT every part of remediation must be to make sure its BITR only. I mean, they've got to have really remediated PERFECTLY ... PERFECTLY to avoid serious problems. Even then, Even then, the risks don't go away. Dirty power alone could take down a bunch of refineries...and then not have enough trained teams available to get them all back up anytime soon, plus the inherent problems of restarting a refinery. That could all happen even if EVERYTHING was remediated perfectly.

I hope you see why I did this...it was a final attempt to demonstrate just what a moron someone has to be to expect a BITR on oil. Note, I didn't say 'hope' I used the term "expect". I hope its a BITR. I had big hopes and plans if Y2K is a non-event. We all do, I'm sure. But that isn't going to interfere with a rational analysis of risk.

Linda-- re your comment: "and how if pipelines shut down - esp. in cold climates, it will be a LONG time before they are working again."

I think you confused my cold weather discussion about crude oil candling in pipelines where cold temperatures cause the crude to gel and essentially clog the lines at very cold temps. This is related to the refineries and their losing electrical power which is used to keep the lines warm when they come up out of the ground and into the refinery. (btw, the pipelines themselves are buried deep enough below the frost line that cold/extreme temps are not a problem except in refineries where the crude in pipes is above ground and exposed to cold temps... I discounted this again, to prove a point... I don't need that aspect to make the case that its not a BITR for oil.

All of these things that I leave out point to the higher numbers for a median range of numbers... i.e. 30% supply loss or 46% supply loss. Frankly, though, if the infrastructure goes down, then so does oil. Moot issue. Do I see that happening? I don't have enough hard numbers data to crunch it into the equation. Again, the numbers are what make the case. We're trying to avoid a subjective case of negativity in order to better present the minimal case to the skeptics.

Basically I chose to review the elements that I could demonstrate with statistical numbers to make the projections case. Could it be far worse? YES it could. Could it be far less than I figure? Only if the fixes were PERFECT.

-- R.C. (racambab@mailcity.com), December 27, 1999.

R.C.: Thanks for the reply. No, we are in no panic. We knew last January that this time would arrive. We have nuclear engineers living all around us and their happy faces and demeanor belie a a gross misunderstanding on their part of the systemic nature of the problem. There is the happy thought that we are overestimating the problem here locally and will most gladly lead the giggles at ourselves if nothing happens by April. On the other hand......

-- Neil G.Lewis (pnglewis1@yahoo.com), December 27, 1999.

D D Reed chat room oil discussion. Link is to "DD answers G North. From there one can link back to the original chat session of Oct 26th ('99). This all comes from the Tuesday chat sessions of Greg Caton at www.soybean.com

link

-- rb (ronbanks_2000@yahoo.com), December 27, 1999.

R.C.,

As usual, thanks so much for the incredible effort you have put into this.

Could you please clarify what, if anything, you think your analysis means with respect to the natural gas industry, in particular impacts on end-of-pipeline delivery?

-- Brooks (brooksbie@hotmail.com), December 27, 1999.

Thanks R.C. and rb for the links to the DD chat. I must've been off planet or something. Got to head off to pretend to work, so will read later. And yes, I see that you put the best face on it with the numbers you have. I believe Ed Yourdon said on one of the Art Bell talks that he "hoped it would be no worse than the Great Depression." Its looking more and more like the Great Depression might have been a BITR.

Darn... I KNEW I should've dug a hole. Wonder if Beach is still accepting applicants?

Going to be one heck of a ride.

-- Linda (lwmb@psln.com), December 27, 1999.

Brooks,

I don't have enough hard data on Natural gas to make dogmatic claims but what I've heard which is second, third or fourth hand to me, is not strong enough for me to get dogmatic. Furthermore, I've not seen statisticals on Nat gas to make projections. My instincts and the basics tell me that whatever happens with oil pipelines will happen with nat gas too. I expect at least some problems, how much, how bad is a little to difficult for me to say with any confidence. It won't be a BITR, IMHO. but it might be something that only has sporadic interruptions of service regionally/localize for the first few days. Then again, the whole system might go down. I'm inclined to think though the odds favor more regional/localized problems.

-- R.C. (racambab@mailcity.com), December 27, 1999.

RC,

Good job. I appreciate all the long hours you've put in here.

But I do need to interject a modicum of moderation. The main new revelation here is from your 20 year oil industry embedded system expert who has declined, or at least failed to respond, on going public. You acknowledge his nuc meltdown assessment is a stretch and you aren't buying it. I'm not either. Where does this leave the rest of his contentions? If he's off base on nuc issues, why are accepting his oil industry contentions?

Neither you or I are techies although we both have extensive contacts and long term relationships with people that are. Like in all other fields, we know oil doomers and oil pollies. You must acknowledge that the majority of the oil industry engineers and technical types are pollies or at least thats been my experience- by far.

Oil markets would also reflect catistrophic shutdown expectations unless the insiders are totally in the dark. I continue to contend that most of the strength we've seen in NYMEX oil futures is due to non-rollover issues- hoarding, the OPEC/Mex/Nor agreement and Iraq games. Refinery crack spreads are well below historical averages. If the powers that be know we have probs, they'd be in there with personal and company NYMEX and spot market positions that would end up being reflected in NYMEX values. A majority of oil industry insiders and bigwigs are not expecting rollover probs (I'm talking domestic here). I'll acknowledge this might be like the old Gulf War when the consensus was wrong- everyone expected crude to shoot up past $50 at the start of the war, instead it dropped over $10 / bl.. Consensus isn't always right.

But are we pompous enough to think we know oil industry operations and risks better than the technical field industry professionals? I know you'll respond that you know plenty that are concerned. But lets have at least one of them come forward on an issue that is this crucial and potentially catistrophic. I haven't seen it.

I guess where I differ with you and a numer of others on this board is on conspiracy type issues. You think oil industry insiders know they have probs and they're spinning and hiding it. I'm with you that there might be probs, but I think rollover probs are gonna catch most traders and oil industry higher ups by surpise.

Thanks again for all your diligent work. In a few days we'll know a lot more....

-- Downstreamer (downstream@bigfoot.com), December 27, 1999.

Oh also...

It takes a lot of guts to post specific predictions like you just did a few days before the rollover...I respect that. Good luck to RC and all!

-- Downstreamer (downstream@bigfoot.com), December 27, 1999.

Thank you, R.C., for this thorough analysis of the Y2K threat to the oil industry and therefore to our way of life. This report is one of the most vitally important Y2K reports I've seen in the past two years (and I've seen thousands of them) because of the depth of analysis and the calmly reasoned tone you employ.

About six months ago it dawned on me that the international oil supply would be the Achilles heel of Y2K compliance and I have seen nothing to date to change this perception. Fix On Failure only works if there are no failures to amount to anything and this is an unlikely scenario according to what you have uncovered.

We all appreciate your efforts; you may have saved some lives by alerting us to the reality of the oil industry's Y2K vulnerability.

-- cody varian (cody@y2ksurvive.com), December 27, 1999.

R.C.

I too want to extend my condolences and my thanks. Re: nukes Early this year, the NRC did random audits of 12(?) nukes. I read (actually, skimmed) through 3 of them. One listed all there embedded systems and many said "not date function, so no problem" or "vendor said they are ok". I was shocked!!! If the nukes aren't going to test the embeddeds then I knew our local utilities wouldn't. There has been too much information around on the problems of "vendor assurances" and hidden date functions.

thanks again R.C. and God bless

-- bob (bb@myhouse.com), December 27, 1999.

RC..sorry about the death in you family. Thank you for the post. It's going to take me awhile to digest it all but I got the gist of it. Living in Houston, I always wondered about thesre refineries and pipelines, nuclear plant etc. We hope things won't be too bad. Thanks again.

-- quietly (quietly@preparing.com), December 27, 1999.

R.C.,

You wrote:

"btw, the pipelines themselves are buried deep enough below the frost line that cold/extreme temps are not a problem except in refineries where the crude in pipes is above ground and exposed to cold temps... "

What about the Alaska pipeline? Isn't a large portion of it above ground (I've seen pictures of portions of it), in a rather cold climate? What percentage of our oil comes from there? I live in Washington state and I think most of our oil in this region comes from Alaska. Jim Lord predicts it will go down for a long time:

"Biggest surprisetheres a strong possibility the Alaskan Pipeline will break down. For a long, long time."

http://209.26.203.146/subscribers/december.html

-- Bruce (no@oil.for us), December 27, 1999.

R.C., Cody said it for me. It raises the stakes, doesn't it? Time to print a few copies.

-- Mike Lang (webflier@erols.com), December 27, 1999.

RC,

I found your post extremely illuminating, though not shocking. (With everthing I've seen during the last two years, it would take an incoming ICBM to shock me!).

Being from South America, I'm interested in the situation there. Besides Venezuela, who has a direct impact on oil supplies, Brazil and Argentina have HUGE potential economic impacts on the US. If the oil supplies are short/expensive in the US, what do you think could happen in these other countries?

I thank you for all your efforts (which I have shared with hundreds of people in Argentina through my private mailing list). I hope it gives you comfort to know that, in part thanks to you and your info, some of these people may be alive and relatively well next year even if your "optimistic" predictions come true.

May we all stay conscious during dark times.

-- El Argie (el argie 1@aol.com), December 27, 1999.

Really R.C. I think you should have checked with Stephen Hawking (sic?) before posting this.

-- Blew5M (gaf@mindspring.com), December 27, 1999.

RC;

Thanks for the hard work, I did not want to hear this report, but I am glad I have the heads up (i think).

It is too bad that this forum only touches the limited numbers that post and lurk here, you analysis deserves wider distribution.

Take care. Things will get worse before they get better.

-- Helium (Heliumavid@yahoo.com), December 27, 1999.

RC:

I just had to go to sleep last night after my last post. Thanks for the replies. I guess I was not shocked about the info as I had suspected as much, but I was shocked nonetheless in the sense that it was confirmed, and as a human, I was hoping otherwise.

Stupid question about the Nukes: Obviously TPTB know what you know, and granted from your replies, it seems we can generally relax on this issue, but why don't they just shut them down. I agree with your comment there is no point in worrying about keeping a tight lid on things when they'll be no one left to listen, so regardless of any other hidden agenda's going on parallel to y2k, eliminating the population over time can not help any agenda, so unless TPTB are the most stupid people on earth, why don't they just shut them down? As Ed so often reminds us: Its not the probability, its the stakes.

That being said, do you think that TPTB will keep us advised if one of these nukes goes south or hide it from us?

Sorry for the loss in your family at such a time. Staying the course proves to us that you are a true professional who does great work and we all owe you our deepest gratitude.

-- Interested Spectator (is@the_ring.side), December 27, 1999.

Time was...

The only "embedded systems" in Refineries were based on Fluidics...simple digital pneumatic computers that were truly date insensitive. Then the dirt cheap 80286 based process control computers came along...I guess the Human Race fails the Darwin test.

-- K. Stevens (kstevens@ It's ALL going away in just four days.com), December 27, 1999.

RC

Thanks for all your efforts

-- gary (a@a.com), December 27, 1999.

I consider this post to be one of the most informational to ever have been placed on the forum. It should be "taken to the top" of ANSWERS from time to time so more forum readers will be "exposed".

-- tc (trashcan-man@webtv.net), December 27, 1999.

R.C.

Excellent work! After a Christmas filled with good food and good company, I was slipping into a bit of complacent attitude. You woke me up again...thank you!

John Ludi, Topping off the tank tonight.

-- Ludi (ludi@rollin.com), December 27, 1999.

Hello R.C.:

Thank you for the incredible effort and excellent reporting. These three threads comprise some of the top material coming from this forum -- certainly deserving of wider distribution.

Proud to have been here through the past couple years, and to have "known" people like you.

Thanks again.

-- Anita Evangelista (ale@townsqr.com), December 27, 1999.

and to think--shows like dateline win the Edward Murrow award--

Excellent!!!

-- d----- (dciinc@aol.com), December 27, 1999.

R.C. - GASP! Incredible and gut wrenching. Thank you for your "labor of love" and our sincerest sympathies on your loss.

It has taken the better part of the afternoon for me to digest your post and all the corresponding answers and questions. So, I guess the only one that has not been resolved for me is why you think that gasoline will be readily available at the gas stations.

I don't pretend to know how the oil/gas industries interact with each other, but I thought that if there was an oil crisis then gasoline would be in short supply as well. Isn't that what drives the prices of gas up? Supply and demand?

I can't and won't even consider the nuclear issues...if there are nuclear incidents/accidents, well as you said, all else is moot.

I appreciate your extensive efforts and I am in complete agreement with all that have posted here in that you have done an outstanding job, and it had to have been a dirty job.

My scale-0-meter is broken now. I have worn it out this past year going back and forth based on the latest information. I am convinced that things are going to change radically for us in the coming months, but to what extent, I am absolutely exhausted trying to predict. I want to believe a BITR, but I am too much of a realist/analyst for that.

Congratulations on an outstanding accomplishment, I am grateful.

Peace be will us all.

-- LZach (lisa@texasnetworks.com), December 27, 1999.

R.C., I really appreciate what you've done. I have a question about the following paragraph:

I see a 95% chance for at least a 7% drop in oil supply for the USA I see a 70% chance for at least a 14% drop in oil supply for the USA I see a 50% chance for at least a 30% drop in oil supply for the USA I see a 60% chance for at least a 40% drop in oil supply for the USA

These last two figures (50% and 60%) seem in conflict.

-- David L (bumpkin@dnet.net), December 27, 1999.

To Interested Spectator:

To answer your question about nukes, you need only look at the assumptions. Assuming no power interuptions. To have power you must have generating capacity. During January in the North is a peak load condition time with little "spare" capacity for things like disruptions. TPTB know that there is very little wiggle room as it is, add in the unknown with ALL generating plants and you see the predicament they/we are facing. The nukes if they show any operating irregularities will I truly believe be shutdown and cooldown will commence. In normal times they would have probably been shutdown already. I think it is now obvious, painfully, that we are not in normal times. The threat of a dangerous release is not worth worrying about (as if you do anything), this is measured against the threat of how many freezing to death. Not to mention the threat that little items like refineries loose any chance at all of normal operation or an orderly shutdown.

We are as it were stuck between Iraq and a hard place (pun intended). We need as much running as possible and hope that what remains running after the rollover is enough to hang on...

-- Squid (ItsDarkest@down.here), December 27, 1999.

Thank you for your well written projection. I have bought some crude oil call options because of possible oil shortages. However after reading your article it would seem there may be enough crude for the refineries to use because decreased capacity. Wouldn't the most desparate shortage be the products of heating oil and gasoline and therefore the most likely rewarders of call option purchases?

-- Ron Anderson (goldmine@arctic.net), December 27, 1999.

David L,

Your right, arrrgggghhhh, where's an eraser? Should be only 40% chance for 40% oil supply loss. Inadvertent error in transposition. Sorry about that.

-- R.C. (racambab@mailcity.com), December 27, 1999.

Downstreamer,

The oil engr who mentioned the nuclear aspect may actually not be referencing USA nukes. Did you consider that he may be thinking of foreign nuke plants Europe and Russia? I don't know. We don't have near enough information to go on to judge his comment one way or the other. He may know more than we do.

Irregardless, let's compare you. You are an "expert" or professional on the oil price trading out of the NYMEX. But lets' say you comment on and make projection about the DJIA and it seems outlandish? Does that mean your abilities in oil are any lessenned?

Markets are not gods. They don't know everything. This market is however aware of and pricing Y2K to some extent. The Arabs/OPEC for all we know may have made their production/pricing deals because of Y2K to raise the money to pay for remediation perhaps. What I'm saying is that you don't have all the data. Neither do any of us. We need to be careful in thinking what and why a market is doing something.

I know a number of engineers who are publicly pollies but in private their scared straight and prepping. In fact that ratio is about 10 to 1. Let me tell you that my guys, most of my contacts, ... if they didn't know you...and maybe even if they did know you, they'd tell you polly spin only. These guys trust very few folks... and most don't trust oil traders any farther than they can throw them. Too many been burned in oil futures at least once in their lives. So an oil trader is more inclined to hear disinformation than information from these guys.

Regarding the notion that someone has to come forward and go public. Ever heard of non-disclosure clauses in contracts? Only the top echelons of corporate have all the information pieced together about their co's. They won't disclose, they can't disclose, it would be against their financial interests to disclose. It might even be against their health interests to disclose.

Whether anyone comes forward or not has nothing to do with whatever breaks down. Whatever breaks will break. We evaluate the evidence based upon the evidence at hand whether someone blabbs or not.

Oh, and don't forget the Tava report. That pretty much tells the story for oil.

We'll know more within the next 2-3 weeks...and maybe alot more on rollover itself

-- R.C. (racambab@mailcity.com), December 27, 1999.

Several of you have asked questions that I'll respond to in a single post here:

To Downstreamer's comment-- I'd like to clarify on this:

"It takes a lot of guts to post specific predictions like you just did a few days before the rollover...I respect that. Good luck to RC and all!"

Downstreamer =========== My Response:

Downstreamer... I think I should clarify that I'm not trying to guess or predict really, but rather. I think of it as risk assessment looking at percentages. Somewhat a cross between an insurance co risk assessment and a weather forecast. Just trying to put some sort of perspective of what the risk percentages are. I probably should have done a better job of explaining that initially in the main post.

We've got hard indications that the oil industry did not fully remediate. In fact many instances where nothing was done regarding embeddeds. So we extrapolate data from reports like that provided by TAVA and also the NIST report to make some assumptions upon which to base an hypothesis that seeks to quantify the potential risks. In other words, it becomes something of a cross between an insurance company casualty risk study and a weather forecast. We're not saying 100% that its a TEOTWAWKI, (in fact we state it won't be for oil unless certain other aspects develope that we don't now foresee)... We don't see it as a BITR, although it is a mathematical possibility but too improbable to consider likely ... based upon the data we've extrapolated from reports of those in the field. We do grant though that this information is still sketchy at best and therefore assumptions are based on less than preferable information.

================ Next Question ==================================

From Bruce who writes:

"What about the Alaska pipeline? Isn't a large portion of it above ground (I've seen pictures of portions of it), in a rather cold climate? What percentage of our oil comes from there? I live in Washington state and I think most of our oil in this region comes from Alaska. Jim Lord predicts it will go down for a long time:

"Biggest surprisetheres a strong possibility the Alaskan Pipeline will break down. For a long, long time."

http://209.26.203.146/subscribers/december.html

-- Bruce (no@oil.for us), December 27, 1999.

---------------------------------------------------------------------- ----------

Answer to Bruce:

This is a great question. I should have gone into more detail on it. I've made many inquiries into this. I've had 2 short casual conversations with 2 fellows up there working with that project. They tell me that they have always been prepared for any contingency power or otherwise. They tell me that they were made aware of the embeddeds several years ago and began work on it far earlier than most. They claim that while end to end testing was not done, they went as close as could be (and they think sufficient to not be a problem). Based upon this testimony, I've no contradictory evidence to grasp otherwise. I find it somewhat suspicious especially when end-to-end testing cannot be performed. But for final evaluations... I had to go with only what I knew. Jim Lord's contacts may be correct but I for one have no contacts with anyone that will/can confirm it. Regarding being above ground??? My contacts tell me that they have multiple backups to keep the above segments warm no matter what and that its always been that way. I believe them.

=========================Next Question========================= From El Argie...

"If the oil supplies are short/expensive in the US, what do you think could happen in these other countries?" -- El Argie (el argie 1@aol.com), December 27, 1999.

========== My Response:

Hi El Argie,

Glad to have you aboard...and I think I've seen you post from time to time but not sure if I posted to any threads with you before.

Regarding foreign oil situation? I think it will most likely be a mess everywhere. Argentina does do a small bit of oil exports to the US but relatively small amounts. I suspect that the impact of oil problems will be felt everywhere and probably Brazil will be most affected of countries in Central and South America. I've not heard if Argentina's oil wells are large enough to have embeddeds or not. I assume that some are. I just don't have any statistics. IF Argentina is not loaded with embeddeds and has remediated most software code correctly then perhaps Argentina will come out ahead of many other nations and be able to take economic advantage and gain market share and higher growth on recovery. Regarding pricing for oil. I think it will be expensive everywhere... probably running in ratio with USA pricing and the dollar trading levels. Hope that helps answer your question.

================Next Question====================================

Interested Specator asked:

"That being said, do you think that TPTB will keep us advised if one of these nukes goes south or hide it from us?"

-- Interested Spectator (is@the_ring.side), December 27, 1999.

---------------------------------------------------------------------- ----------

My answer: I think it will be hard to hide a nuke accident from anyone. Russians tried it and didn't get away with it. I don't think anyone else will be able to get away with it either. Squid gave a pretty good answer earlier too.

==========================Next Question=============================

LZach asked:

"So, I guess the only one that has not been resolved for me is why you think that gasoline will be readily available at the gas stations."

-- LZach (lisa@texasnetworks.com), December 27, 1999.

To LZach:

I don't think gasoline will necessarily be readily available at the gas stations. I think the gas stations will be "ready" for the most part...but if we have crude shortages and diminished refinery capacity we'll have gasoline shortages, no doubt and many gas stations will only get sooo much and no more. You may well see convenience chains go belly-up should problems get severe and prolonged.

-- R.C. (racambab@mailcity.com), December 28, 1999.

R.C. You mention that there are about 95 refineries in the U.S.

1-In order to by-pass the potential spin, can an observer outside the fence tell if a refinery is off-line? Where I live, it seems to me that running refineries belch fire out of their chimneys.

2-Given that there are a relatively small number of refineries out there, is there any means of collecting data "from outside the fence" and sumarizing it on this post or at some other location starting a couple of days before roll-over?

L.D.

-- Louis DeSerres (louisdeserres@videotron.ca), December 28, 1999.

Louis,

Those are some interesting questions with points I'd never thought of covering.

You asked Q#1: "-In order to by-pass the potential spin, can an observer outside the fence tell if a refinery is off-line? Where I live, it seems to me that running refineries belch fire out of their chimneys."

Well, ordinarily not. I know as a kid growing up, the refinery (where my relatives worked at) would have problems and go off-line, but the fire that you talk about are the means by which extra natural gas is burned off to simply get rid of it. A refinery can be off-line and not producing and still be burning these gas flares. IF there is no noise and no flares, you can be sure the system is down and out cold, but I'm not sure the flares would go out even in a Y2K shutdown mode. I suspect they would stay up. Frankly, I've not asked anyone about this so I don't want to be dogmatic on this matter. Perhaps Shakey or someone else here can elaborate.

Q#2: " Given that there are a relatively small number of refineries out there, is there any means of collecting data "from outside the fence" and sumarizing it on this post or at some other location starting a couple of days before roll-over?"

Answer: I'm not aware of any website that would likely be posting on this. The industry itself is playing this very close to the vest. If you live near an oil refinery and want to know more...check out a local coffee shop nearby or a truck stop where the tanker drivers stop. Once there, make it a point to find tables where drivers are joined together eating, or sipping coffee and talking... early mornings are a good time. Ask about the refinery operations and ask the drivers where the refinery workers hang out for coffee. Also, you may stumble across retired refinery workers too. Best places to try are local diners or perhaps small truck stops nearby the refinery. Also, if nothing like I described fits, but there is a local fast food joint like a McDonalds or similar chain or a sitdown joint like a Denny's Restaurant chain near the refinery then try those places. Refineries though with embedded systems may have only a couple or three dozen employees. For those situations... truck drivers would be the key information to help track down folks.

Hey, you might even contact the refinery and find a public relations person that might answer your questions about current operations. Chances are they'll be more likely to tell the average citizen than a reporter that might blab something they don't want to be widely known. Then again, they probably will be under some sort of pressure to not say too much, and may not know too much anyway other than they're up and going or their idle or what not. Chances are you won't get much comment though from them until after the rollover if even then.

-- R.C. (racambab@mailcity.com), December 28, 1999.

I would be really nervous about your predictions, if I didn't live in Norway, knowing how the stock exchange works here. Norways economy relies very much on the oil price. Also, insiders here pretty much *always* leak information to big traders before it is made official. If anything big was about to happen in the oil industry, here or elsewhere, a lot of Norwegians would know, and stockprices here would fall. Instead, the prices are pretty much what one would expect them to be if there never was a y2k issue.

-- Norwegian (dont@spam.me), December 28, 1999.

Norwegion,

Good points - but in the USA it is very differenet because the country is so huge and it is geared to everyone running around wasting gasoline - at an average of under $2 a gallon, dirt cheap compared to Europe. Also the oil is imported from a lot of didderent countries, many of which have botched their y2k planning completely. The ramifications of a big oil increase together with scarcity/rationing are very serious for the USA for industry, power and chemicals/heating/trucking etc. etc.

We have to think Global here in the USA...

-- Andy (2000EOD@prodigy.net), December 28, 1999.

Ron, you asked, "Wouldn't the most desparate shortage be the products of heating oil and gasoline and therefore the most likely rewarders of call option purchases?"

It does seem plausible that end products such as heating oil and gasoline would be in shorter supply than intermediate products. But I'm not sure this would translate directly to a greater price rise for those end products. Automobile use might decrease due to disruptions such as unemployment or business closings, which leave people with fewer places to go. Perhaps demand for heating oil would be less sensitive to this.

The price of goods will also depend on the ability of markets to remain viable despite infrastructure failure. The seller may be presented with only a portion of the actual demand for his commodity, if potential buyers are thwarted by disruptions in communications or transportation.

-- David L (bumpkin@dnet.net), December 28, 1999.

One easy way to tell if a refinery is having problems is the flare stack, but only if you have made a practice of seeing what it looks like normally, so that when Y2K comes that you will be able to tell a differance. If the flame suddenly doubles or triples in size (or more) and intensity you can be asssured that one or more units in the plant are having trouble. If you are able to see the employees parking lot and again note what a normal shift looks like you could judge for yourself what effect Y2K had on the plant by the number of cars in the parking lot come January 1st. I would imagine that most plants will have extra crew on for the date change over, but if the lot capacity doesn't quickly return to normal by Jan. third I would say that plant has had some difficulties.

-- (bearbob@home.com), December 28, 1999.

Thank you R.C. for posting these.

Your work and efforts are very much appreciated.

Thank You again,

-- Dee (Dnusser@aol.com), December 28, 1999.

I guess I qualify as an oil industry insider, since I've been working for a big oil company for 20 years now. I could rehash the problems. I've posted them here before.

I have the Dog Gone Strategic Gasoline Reserve. Several hundred gallons. All with a stabilizer.

RC, good job.

-- Dog Gone (layinglow@rollover.now), December 28, 1999.

Thank you RC for your hard work.

Now, my optimistic self is wondering what you think about the possibilities of this, eventually, being "good" for Texas. We have seen ups and downs in the oil price and subsequent ups and downs in the Texas economy. Assuming (as you optimistically did, and as I wish really really hard) that the grids hang tough and there are no other problems besides oil, domestically do you think there would be a drive to drill and pump from new wells? Would there be financial ability (investment $) to do so?

-- mommacarestx (nospam@thanks.net), December 28, 1999.