Would that peaking were so transient or distant

We are failing or, perhaps, since this is a developing situation, we are not yet beginning to succeed. You might wonder at this opinion, with an AP story on Peak Oil this week that reached the headlines of papers not only in the US but also in China. And in the columns of the opinion makers of the country, Kevin Drum has just devoted five segments to the topic with the just posted last part here.

So why the gloom? Well back in July of 2003 Time magazine carried a major article on the fact that the US was running out of both oil and natural gas. As a news item it may have been mentioned around the coffee pot for a couple of days, but then the story quietly melted away. And for the past two years realistically nothing much has changed.

And now we have a little spate of publicity again about the topic. But I am (you will forgive me) an experiment-oriented engineer, geared to seeking tangible results of an event. And I suspect that in two or three days the topic will again fade from the pages of those who guide our opinions, and within a week, apart from when one visits the gas pump, the topic will be largely forgotten for another summer.

It is important that ProfG & Ianqui, J and others begin the grass roots movement that will help change public behavior and help lower overall demand for fuel. But the press and the public in general are still treating this as a transient topic of interest rather than an absolute event that will, very shortly, change the way we have to live. The Japanese, more dependant on foreign sources of fuel, are recognizing this with their government's move to change sartorial styles and do away with suits so that air conditioning demands may be lowered. The impact of higher prices is being felt in the poorer countries of the world already, and since prices will inexorably go up, this is only going to get worse.

Very largely we are still protected from these initial wavelets of the coming tide. Price increases are an inconvenience rather than, for most, a devastating blow to a sustainable lifestyle. But by having "covered the peak oil topic" and then left it there is no sense of urgency created, and no pressure on the politicians and bureaucrats to begin serious work on how to help the nation through the transition. The British government has already been funding steps to install windmills as one part of a move to provide 10% sustainable energy into their mix by the end of the decade. In the United States the political will is still to discourage them.

The problem is (and I regret having to take issue with Kevin Drum on this, since he has both recognized the issue and taken kind notice of this site) that it is more important to recognize the coming peak, than the convergence of supply and demand.

The reason is that slight changes in demand brought about by the demand destruction initiated by price can bring supply and demand into convergence. But an imminent peaking and then decline of supply makes that almost impossible without a much more drastic change. And sadly we (as a community) failed to convince him that the peak is much closer than 15 years away.

A delay in the recognition of the problem, and some mandated change in consumption patterns will mean that oil reservoirs will be extracted at higher rates that damage the rock and reduce longer term production. This will also accelerate the rate of decline. Earlier models have discussed depletion rates of 7%. The numbers that are now showing up are up to double that, and that means that the fall will be much more dramatic. It should be noted that so far this year Russia is not fulfilling the promise of increased production, and several of the OPEC nations (Venezuela, Iran, Indonesia) are in decline already (see the OPEC production table in the blogroll).

Until the day that these concerns appear in national newspapers and web sites on a much more frequent basis, and politicians begin to be asked about them on a regular basis, we have not succeeded. I suspect however that by sometime in the fall the situation will have changed and both the intersection of supply and demand, and the peaking of oil, will both be more evident. And given such a prediction, it will not be long until I will be proved either right or wrong. 'Til then we need to go forth and find more facts, so back to the detective work.

Go to the postings for today

Technorati Tags: ,

Well, sounds like you are where I was at a few years ago. Burnt out from the uphill fight. I'm a lot more mellow these days. First of all, in the grand scheme of things a few months or a year or so isn't going mean a rat's ass anyway. Second, I'm convinced that the only thing that is going to cut through the crap is physical shortages. And we are going to see them in the third quarter of 06. Until then, talk amongst yourselves. Nothing is going to happen. As long as there is plausible deniability we will live alongside that river.

When we were predicting something that was going to happen twenty years in the future, when there was time to do something constructive about it, I used to get into heated arguments about it. It was really bad for my blood pressure. Today, I am serene. When the shit hits the fan, we will have to get to work. It may be too late to avoid some nasty consequences, but it is simply not possible to get any tangible results until then. So, keep your powder dry. Make your plans. But don't knock yourself out trying to piss into the wind.


I very respectfully, but wholeheartedly, disagree. I believe we can make a difference now, through education, and I, for one, will not stop "fighting the good fight."

I think the key is to pick our spots and have realistic expectations for each. Web site like this one (and mine, if I can be so bold) are a great help once people are interested enough to spend some time online actively educating themselves.

The trick is to break through what I call the "conspiracy theory barrier" most mainstreamers erect, the defense mechanism they use to filter out the crazy people we all run into in life. I suspect everyone here could have quite a discussion about which techniques do and don't work to get over that hurdle.

But even if I didn't think I could do any good, I would still try hard. There's simply too much at stake to do anything else.

Lou--thanks for putting up a fight against futility. So now we need real suggestions as to how to effect large-scale change. In my post below, J suggests that noise at a local level will at least make your community take notice. Is that good enough? I don't know, but it's a start, I guess. Of course, now I have to grow to balls to actually do something. It's one thing to post some suggestions on a website--it's a totally different thing to take on Community Board 2, or even NYC City Council.

Maybe I'll start with the community board.

Oh, by all means, raise the roof. Just don't get twisted out of shape when the default conventional wisdom remains that all of our problems can be laid at the feet of under-investment and that we will all presently be saved by Adam Smith's invisible hand after a period of inconvinence and increased expense. The basic problem is simply that there are vested interests that profit by this perception and it has a powerful ally in basic human nature which is change averse.

This is why I think that the only thing that will actually impact this essential dynamic are physical shortages. All the reasoned arguments, all the blogs, all the websites, all the books and lectures are just one side of a "he said she said" arguement as far as the public is concerned. And the other side has the virtue of appealing to the basic human desire for continuity.

The good news, if you can call it that, is that I don't think we are going to have to wait all that long for the physical shortages to show up. And when they do, the intellectual log-jam will break and the stored knowledge bank we have been accumulating will be re-evaluated in an entirely different light. So, by all means keep up the fight and the work, it is important and it is needed. Just don't expect any sort of public breakthrough until it is forced on the populous.

Maybe this is overly cynical. But that may be a function of having been making these arguments for well over a decade now and getting nowhere. The prospect of another year or so doesn't seem all that horrifying.

I don't think physical shortages are needed to get the point across. All you have to do is tell someone who's bitching about gas prices that they'll never get any lower, and wait for them to ask why. Works every time.

Then you tell them about rising Chinese demand, the lack of refinery capacity, etc. (the pure, pre-peak S&D issues), and then ease into the declining production of many oil exporting countries, the fact that the US production peaked in 1970, etc. Be prepared to tell them at several points along the way that yes, you do indeed have proof of all this, and you can e-mail a list of links to them.

One of the keys is that you DON'T use the phrase "peak oil" until you're well into the conversation. For some reason, if it has a specific name before the listener is hooked, his or her eyes glaze over. Also, with the mainstream press just starting to cover the issue, many people will recognize the name and think it's another one of those iffy things like long-term weather predictions that might or might not be true.

Above all, be prepared to answer all the obvious questions, e.g. why didn't anyone talk about this before (remind them of a guy named Jimmy Carter, then tell them about Hubbert and the morons who laughed at him), or what we'll do when oil gets very expensive (this depends heavily on how you think the scenario will play out--rates of supply decline and demand destruction, ramp-up of alternatives, etc.).

Yes, it's work. Yes, a lot of people give you funny looks. So what? Would you rather stand around on at a gathering talking about how shocked everyone is that cousin Fred proposed to that slut he's been dating?

I'm also exploring the possibility of giving presentations at local libraries. But that's harder to set up, and it takes a lot of advance work--you want people to walk out with a feeling you really know what you're talking about, aren't selling them something, and aren't a nut. You also need to send them out with a good set of reference material so they can continue the education process on their own--you're just kick starting the process.

Well, God bless you Lou. That sort of retail jawboning is definitely a lot of work and you are certainly to be commended for it.

I give talks at local service clubs - I am waiting until next week to see if the latest one had much in the way of impact. But all one can do at this point is to continue to lay the ground work. Given my job I talk to a lot of folk over the course of a year, and most of them have never heard of Peak Oil or have a clue as to what it might mean.

Guys - I think you are selling the wrong thing.

You should go after sustainability and conservation.

Two reasons: tangible and measurable impact economically in most cases, and it resonates with everyone at some basic level.

Dump Peak Oil as the main item on the menu - it will be exactly as this posting described - flash in the pan, and then forgotten until the pain SW is waiting for hits.

But sustainability and conservation can move forward irrespective of anything else..

sorry - forgot to sign in above!

What I am trying to say is that regardless of whether it is climate change, overshoot, resource depletion - any of the key issues - the answer is conservation and sustainable society.

Use whatever lever turns the wheel best with your audience, but the message of conserving and becoming self-sustaining is what needs to get out there. There are multiple reasons why, but only two solutions. So, teach the solutions, as they have their own intrinsic values and economic rewards.

The knowledge of alternatives to everyday petroleum can be sold on economics alone, but not until gas reaches $10 or more per gallon for the hard-core petro junkie. So, what do you do? You set the example and share how much you saved doing it differently. Provide a working alternative, not just a speech and some depressing BS.

Proof of a better and different way of living need to be visible in lives, today. The only way to do this is (to be Nike-ish), just do it. You can talk-the-talk, but until you walk-the-walk, nobody will take you seriously.

I am inclined to agree with SW's perspective. I will talk about Peak Oil to anybody who will listen, but I figure that that effort is mostly wasted - at least until Peak Oil actually happens. Then, at least, people may understand what is actually happening to them and hopefully that will reduce the amount of counterproductive responses to Peak Oil.

On the bright side, if the general public is at least aware of the concept of Peak Oil, it is easier for them to start to accept it as a reality as the evidence mounts. Before the evidence mounts, they probably will regard us all as a bunch of nutcases.

OT but important:

Venezuela govt ready to close ops of oil cos that evaded taxes till they pay. I am interested in any comments from other readers about where this standoff is likely to go and what it might mean for oil supply and prices.

I have to agree with J on this one. I think that there is a momentum starting to build with green technology and conservation in the public eye. Even though the smoke screen that GE is putting up with the Eco-magination is a little thick, and BP now apparently stands for "Beyond Petroleum", I think that consumers are starting to catch on that, "well if big corporations are starting to think about it, maybe I should too." How many mainstreet Americans would have thought about getting a Prius 3 years ago 1 in 1000? I think with rising gas prices, we are finally capturing some attention.

Start with distributing info on conservation and sustainability and then use demand, and peak oil to back up your claims. I sent information to my friends about both peak oil and sustainability, and the responses that I got back were: for peak oil "holy shit." and for sustainability, "how about (this), that is what we are trying to do at our house." I think that giving people a solution along with the bad news is more effective at the local level.

I will be proposing a email and letter writing campaign [touting sustainability and warning of peak oil] to both newspapers, and local government officials, once I get the time to sit down for more than a few minutes, and can figure out how it can be done online. Ideas, anyone?

SW's philosophical approach about PO resonates with me... perhaps because I'm over 50 and have gone through several crises (personal, professional and political) that seemed earthshaking at the time.

Pacing oneself is a key skill. If low energy is our future, we will have centuries to adapt to it. Changes like this don't happen overnight, in one year or in a decade.

Besides, what good does it do if you burn yourself out? Pursuing an ideal too intensely makes one inefficient, intolerant and unhappy.

It calms me down to read history or literature from the past. Many people in the past lived happy lives without our gadgets and high-wattage lifestyles. We can too.

I'm afraid I tend to agree with SW (although Lou and Heading Out are to be commended for putting in the effort to spread awareness of the situation) - nothing much will happen until supply shortages start to bite into people's daily lives.

I've convinced quite a few people about the imminence of peak oil - pretty much everyone I've talked to about it in fact - and I rarely mention the subject more than once to any given person.

But the fact is - its not causing them pain now (and those of us invested in energy related areas actually feel financially better off at this point), so they don't feel any urgent need to act - the unpleasant sensation that people get when they first understand the implications of peak oil is something they are quite happy to forget about as they go about their daily lives.

Thats not to say we shouldn't keep making plans and educating people - just don't expect it to have too much of an impact. After all, most people understand that global warming is a serious problem, but few are agitating for any meaningful action to be taken about it - even in areas that are starting to see the effects.

I also think it may be incorrect to assume that our governments and the oil companies aren't aware of the situation. How we get them to take action about it (other than occupying the middle east) is another matter.

I'm not sure what the answer is there - the more I look at it the more I believe this problem has been understood for 30 years - yet if anything we've acted in ways the opposite of what common sense would dictate. I guess this explains why conspiracy theories flourish in so many corners of the peak oil world.

Looking at a little history of addiction in the past 80 years suggests that SW will be proven right.

The market crashes of 1929, 1987, 2001-2002 were all preceeded by warnings from intelligent market mavens, and were largely ignored by the masses.

The energy crisis in the early 1970's, during which oil prices quadrupled, had a postive impact on consumption - fossil fuel usage declined. When, in the words of SW, 'the shit hit the fan', consumption declined. It may need to hit the fan again before behaviour changes.

I'm hoping that talking to young people will help. Give them the right framework to understand what will be happening to them in 2-15 years, and hopefully the damage can be contained, even if it would have been better to start sooner. Get them thinking about future scarcity and sustainability now, and they will be in a position to shape the solution in the future.

I suppose that's part of my faith as a teacher.

I'd like to start a discussion on investing as peak oil nears. I'm already invested in several Canadian Royalty trusts. Does anyone have any other recommendations?

Unfortunately, I agree with SW too. It's so easy just to keep putting it off, and keep putting it off until the shit hits the fan. Maybe if the government started issuing those WWII-esque signs again, people would start to listen. A few years ago there was a drought where I lived, and once the mayor and the governor started telling us to save water, people did. But we were already in the drought by then, and I'm afraid the same thing will be true about oil.

There have always been a few people moving in the right direction with conservation, sustainability, efficiency. It is also true that society's (and government's) focus has been elsewhere.

Would it be fair to say that the number one priority in America for the last decade has been in wealth accumulation? From Enron to MTV Cribs ... it is about crazy-big numbers.

There are some justifible drives here, for happiness (and even status) but the tight coupling of those to a high-energy lifestyle is unfortunate.

I'd like to encourage people to a happier, simpler, life ... but I'm afraid that kind of message has always been there as well. It is a minority opinion.

Despite the fact that energy does not buy happiness:


In terms of investing, I've bought a ETF that is invested in many green power companies - PBW. I put in a few hundred dollars a month.

I'm trying to figure out the best way to invest in commodities (Gold, Oil, Platnium) using my Scottrade account - any ideas?

IMO one of the best ways to own gold is to hold actual bullion. Otherways include investing in mining stocks or the new gold etf "GLD".

I am also considering an investment in Suncor, a Canadian company that processes the abundant tar sands. These tar sands will never completely quench our oil thirst, nevertheless, I feel that we will rely on them once oil reaches $75-$90 a barrel.

When you're in a hole, the first step is to stop digging. On a local level the best first step would be to discourage sprawl and exurban development. Unfortunately I suspect that there is so much money in housing development that the people involved are going to keep it up until it's impossible.

If you're already in or near a city I suppose the best thing would be to make sure local food production stays around.

"Demand destruction" is already happening. Non-oil producing third world countries are already being priced out of the market and deprived of energy.

"Nicaragua announces state of emergency to end energy crisis":


Ironically this will help them adapt in the longer run but will cause pain in the short run.

I've just been reading what everybody has written - depressing, for various reasons.

One: it doesn't sound to my eyes (from reading) like anybody has engaged their plans for the future, but more like everybody is just talking. SW & BA are older guys like me - have you guys done anything, or just talking? Not trying to be prodding or point fingers, but just curious here.

Two: WE ARE THERE NOW - whether we are at PO in numbers or not, we are (reasonably) within relative PO time. Talking should be continued, but doing should have begun, whether your neighbors want to come along or not. People should be MOVING in the countercurrent direction; the herd should be moving one way, those "in-the-know" in a contrary way. It is already happening in the markets...

Three: you all know intuitively that the majority of the herd population will go over the cliff as directed. Most of you know that we are marching towards several cliffs right now. At what point do you start changing REGARDLESS of the rest of the herd?

Four: I spoke with the VP of my company yesterday. His perspective (as VP of a large multinational oil company) is that oil will rise from here on until his death, with various retreats caused by reductions in consumption or other factors. Yet after each retreat, the price will continue to rise. There is a point (10-20 years out) where the oil industry may collapse (there are multiple reasons that is possible). If that happens, it could be even worse than people imagine.

So, who is talking and who is actually doing around here? I am really curious about this...

J--What would you have us do?

For example, I am a college professor in New York City. I know that what I ought to be doing is quitting my job and buying a farm in a somewhat warmer region near a small city so that I can have my own food, but be fairly near other commodities (ideally, w/in biking distance). That way, by the time the shit hits the fan, I'll have a working organic farm. It should take me about 5 years to learn everything I need to know.

Am I really going to do that? Jesus Christ. You've got to be kidding me. And I even have the support of my husband.

No, I'm going to enjoy the last dregs of the industrial world while I can. Hopefully responsibly, though. I don't drive, I eat organic, I etc. My plan is to move in with my parents who live in a semi-rural area (near some train tracks) with an acre of land, if it comes to that. I'll find local farmers to learn from then.


I'm in New York as well...are you a part of an peak oil organization? If so, I'd like to join.

I think that "Huh? - oh! - oh crap!" moment will hit the general public when the gaslines re-appear.

It's one thing to pay $4 for a Gallon of Premium.

It's , far far worse to wait in line for an hour to pay $4 a gallon for premium.

It's a life changing experience to wait in line for an hour to pay $4 a gallon -- in an Escalade.

I think my general plan, to be debt free, and to live simply, with some savings on hand, works for a lot of disaster scenarios. And I don't think this will really be "a disaster movie."

Chances are, we will adjust, just a little later (and with a little more pain) than we could have done.

Vic--I'm not a part of any group, although recently I did notice that there's a peak oil NYC meetup listed on meetup.com.

I'm not sure I'm ready to join, though--sometimes I like the delayed reaction of the internet in order to compose my thoughts.

Agreed that nothing will wake people up like price signals. My question is: shouldn't the futures market give us these price signals beforehand? If when they do, how does that affect the economy as a whole?

For example, say we will be at the start of the downslope of the peak in 2010. When traders reached this consensus now, 2010 crude oil futures would be trading much higher than current prices. When this happens it doesn't mean the peak is here, it means that a consensus has developed that the peak is inevitable with 2010 (in this example) being the target date.

If such a scenario were to happen soon, would it have an effect on the current price of oil? Even if the current supply & demand equation indicated a price of $55? Or does the far futures price affect only those firms who are hedging the long-term price of oil?

Developing this further, would the market signal of $100, $125, $150 oil for 2010 delivery cause panic in the overall economy? Is it that the panic over peak oil is feared by the elites even more than peak oil itself? Otherwise, what would be the reason for the failure of the elites to publically address the issue? Just wishing the problem will go away?

The late John Denver got a lot of attention when he built and filled a large gasoline holding tank on his home property back in the mid 1970's.

Perhaps when Paul Allen of MicroSoft fame builds a similar but much, much larger reserve for his new boat (Octopus), we'll know the jig is up. That boat holds roughly 250,000 gallons of fuel, carries two helicopters, seven runabouts of various sizes, and a submarine capable of staying underwater for two weeks with full crew.


I prefer a canoe.

Uncle Toby -

The Oil market like all commodity markets get priced on the cash and carry basis. Especially if the commodity isn't perishable.

That means that current prices will always reflect future tightness because arbitrage traders can always save the current oversupply for future use.

In fact, the Oil market currently reflects an anomoly that is quite new and has not been seen for a very long time. The Oil contract is in Contango. That is the current spot price of oil is lower than future prices. Usually, almost at all times, the Oil contract is in backwardation - the opposite of contango - the spot price is higher than future prices.

The only times I have ever seen the Oil contract in contango has been when prices have gotten unusually low, never when they are nominally high.

I am not sure I completely understand the implications of this. It does seem to indicate the market isn't being driven by current supply and demand. The Wall street analyst that keep harping on the ample supply are obviously missing something.

I am agnostic about peak oil - I just don't know enough to know. But the term structure of Oil prices do reflect some serious anomolies.


j writes: "it doesn't sound to my eyes (from reading) like anybody has engaged their plans for the future, but more like everybody is just talking. SW & BA are older guys like me - have you guys done anything, or just talking?"

Actually I've been lucky in that I was able to retire early and devote myself to gardening and spreading the sustainability gospel via the Web. (I co-edit energybulletin.net and write about gardening and permaculture.)

We all have to start from where we are. The important thing is to start moving, even if it seems ever so slow at first.

I'm not a big fan of dramatic, impulsive action -- quitting your job and moving to the mountains with 200 lbs. of dried beans. I think it is much more valuable for people to use the contacts, knowledge, and skills they have right now to move things in a sustainable direction. Teachers can initiate school gardens or teach from the environmentalist classics. Carpenters and contractors can get into "green building." We all can learn to live in a more responsible fashion -- eating from local food sources, decreasing our energy consumption, arranging our lives to minimize the use of cars.

There is so much to be done, and I'm convinced that the new way of life will much more satisfying than the consumerist/workaholic lifestyles that is now the norm.

J, I'll bite. Yeah, I do a few things. I've been working on alternative energy research for about twenty years now. As I said upstream, I've expended a lot of energy over the past couple of decades trying to convince folks in the government that the reason we are working on this stuff is that the fossil fuel is going to give out rather than as some sort of twisted industrial policy jobs program etc. You'd be amazed....

I've pretty much forgone the "American dream" of buying a single family home in favor of a relatively high density multi-family place where I can walk to work and the store. So, I guess you might say that I have managed to walk the walk although I'd hate to give up my Fender tweed amp or my vacuum tube stereo amp.

We have an option here called "windsource" that you can sign up for to subsidize wind power, so I'm doing that. Looking at an electric scooter for trips to the store.

So, what am I doing? Not all that much. Probably not nearly enough.

A useful discussion of the future of oil prices, along with selected investment advice in the oil and gas royalty trust sector, can be found in the following link:


Scroll down to the Friday 12:30 segment (Market Call with Jim O'Connell). Henry Groppe, a Houston oil stock advisor provides some very interesting comments about the future of oil and gas prices.

Canadian royalty trusts provide relatively high dividend returns because they pay out a large part of the total revenue stream from oil and gas production.

How does one who believes that Peak Oil will be a real problem convince others, when we're only 5 short years past the total failure of the most-hyped man-made disaster in the history of the world, Y2K? People remember, especially the ones who didn't really understand the problem but went ahead anyway and made some plans. They won't be willing believers this time.

Just get used to the same glazed-over eyes or deer-in-the-headlights stare and realize that very, very few people will even listen.

And even fewer will understand the magnitude of this problem until something catastrophic happens. I doubt that higher gasoline prices would do the trick.

SW -

Just shifting to somewhere that IS walkable is much more than most people will even consider. And I think you should definitely hold on to your tube amps - I have a 1964 Sears Silvertone in a walnut cabinet I have used since 1974. Modern stereos are made to be thrown away, so you are definitely doing the sustainable thing there. I also have a tube SW transceiver, BTW.

And as for your scooter - I have seen a couple of other rebels arouind here using bicycle trailers on their scooters for groceries.

Would like to talk about your alternative energy research if you will email me...

BA -

I tried the "survivalist way" decades ago. Just too frigging stressful and over-the-top. But it did get me thinking the Boy Scout motto daily.

I think once people actually see someone living a more sustainable way, they get a feel for the "rightness" of it. That's why it has caught on within my neighborhood. Recently city council granted permit for some kind of fried chicken joint agjacent to residences. We went down 20 strong and told them we did not want this, and exactly why. Within 20 minutes the deal was killed.
And this was something ad hoc, not done with door to door or phone calls.

Activism needs to be resurrected, but you have to realize politicians are greedy, and that they COUNT ON apathy these days. You have to tell them what you want, justify it with numbers of people or financial rationale, and make them do what you want.

After a few short years of doing one or two things a year, I have instant recognition at city hall. When I show up at a meeting, I get buttonholed by one or two councilmen trying to find out why I am there, and what I am wanting.

The reality is so very different from what people have come to believe -

As for you? kudos!

ianqui -

There is nothing wrong with your plan at all. It is extremely pragmatic. All I would suggest is that you frequent your parents place as much as possible, and have some way to get there that is bulletproof, regardless of city conditions (riots, upheaval, etc.) Tell super G to strap on his overalls and go put in a truck patch with your folks!!

If you wish to introduce the concept of "carrying capacity" and "resource limits" to some one, the following presentation has a lot to say for it


If any one seeing this is not convinced, then they are probably beyond redemption!

The typical response I have had to the above presentation is "WOW"

From http://unplanning.blogspot.com/2005/06/digging-for-problems.html

Energy costs are also causing headaches.

Modern aggregate operations are very energy intensive operations. Surface mining equipment burn through gallons of fuel an hour and shipping via truck increases in cost the further you have to drive it. The processing plant requires a significant amount of electricity to run. All of these input costs have been rising.

One mine operator estimated that it took him 150,000 gallons of diesel to produce 500,000 tons of aggregate in an average year. As prices have more than doubled in the past few years, so too have aggregate costs. Trucking firms add an additional surcharge for their added fuel costs.

Although most sites do not use natural gas, they do consume copious amounts of electricity to run their crushers, sorters, screeners and conveyer belts. An operator capable of processing up to a million tons per year in this county currently uses 40% of the nearest substation's current. The utilities consider these such intensive users they offer them cut rate power if they agree to completely shut down during power emergencies. If they do not agree, they have to pay higher than residential rates for their power. The ISO is starting to get nervous about this summer and as a result a number of mine operators have switched to interruptible in case of power emergencies. During the 2000 and 2001 power crisis, these operations were routinely interrupted at significant expense to their firms.
The mine operators are getting increasingly edgy about the future. Like most other individuals that sense of unease is directed at the wrong issues. The most common complaint heard today is in regards to the great difficulty in opening a new mine due to mountain of bureaucratic read tape and "rampant environmentalism." Their collective fear is that without super-long extended permits they will not be able to meet tomorrow's demand. To that end one mine company requested a 65 year permit and sucessfully permitted a 120 year permit in an another county.
120 years is a long, long time. In all liklihood that mine will never be exhausted. In fact, it may never come close to 1/20 th of the capacity. Declining energy availability will hit the mining sector harder, faster and more severely than others. Without cheap fuel, the material becomes more difficult and costly to extract at the same time most work will dry up. People simply will not be able to afford to build anything any time soon.

Most miners are not aware how dependent they are on the continued flow of cheap energy. The next few years will bring that fact close to home for them. Afterall, depletion is a concept that they are well accustomed to understanding.

I also read somewhere that the popularity of open mountaintop coal mining over deep mining depends totally on cheap oil and cheap explosives (meaning ammonium nitrate, which is produced from natural gas). As energy rockets out of sight it could put a crimp in that.

J: would need an e-mail address to do that.