Will the New Year bring Happiness and Prosperity?

I would like to begin, despite the title, by wishing you each, individually, a Prosperous and a Happy New Year.

The past year has been an interesting one to watch, and comment on, and I would hope that this site will continue to be of interest to you as the topic evolves over the next year. And let me quietly suggest that the topic is likely to remain sufficiently evident that Halfin's suggestion of a change in emphasis is unlikely to come to pass.

The problem with making predictions, and I suppose also the fun, is that there are so many imponderables, such as the weather, that can make them into so much hot air or wasted electrons which, as we have discussed relative to predictions from folks such as CERA, can later make them embarrassing to have to recognize. And given that FTX has collected some of the more interesting ones already, maybe I should avoid that route.

So instead of making them as predictions, perhaps it would be better to frame the following as areas that will likely get more interest from the main stream media in the next year, and thus, in turn, get a greater share of public awareness.

Given that Russia and Belarus have now agreed to a price for gas the new year will not start with an immediate shortage in the West of Europe, but the increasing control that Gazprom is obtaining over the supply pipelines (in this agreement they gain 50% control of the Belarus pipelines) is likely to become increasingly worrying. In part this is because Gazprom will not allow competitors to use their pipes, and the greater growth in Russian production is likely to come, over the next year, from those independent companies, though they could, of course, end up being swallowed by Gazprom, as it continues to flex it’s muscles. The problems of supply within Russia may also rise again, if, as last year, there is a strong cold spell – since the country is increasingly relying on natural gas as a power source.

Over the course of the year it is likely that the succession will be stabilized in Turkmenistan, and it will become a little more evident if the country will continue to supply natural gas through Russia, or whether the Chinese can strengthen their position and gain a source of supply. Given that they are currently strengthening their position in Kazakhstan the growing impact of Chinese demand and their acquisition of the resources to fill it will limit the resources that can provide for the growing needs of other countries. This example has not been lost on the South Koreans, who are planning to buy more resources foe their own use.

Korea is pushing to produce 18 percent of the country's oil needs from Korean-owned oil fields by 2013, against 4 percent now.

Given that the decline in production from Cantarell is having an impact both on overall Mexican production , but also on exports – most of which go to the United States, we can expect this to start having a visible impact sometime this next year, bringing the Peak Oil debate back to the country’s attention. For while it may not be that hard to replace the odd 200,000 bd, when this starts to reach more than 500,000 bd it may become a little more difficult, depending on how tightly OPEC will maintain their production cuts.

And in that regard it will be interesting to see how production from the Kingdom of Saudi Arabia changes. They are projecting that there might be some from the Manifa field next year though the maximum production of 900,000 bd will not be reached until 2011. At that time two refineries in the KSA will also come onstream to process that particular crude. Needless to say the Chinese are also involved, since a third refinery is being built in Fujian that will take an additional 160,000 bd from KSA. However there should be new production coming along next year in the KSA.The current status of new production plans (as of December 6th) appears to be:

The Abu Hadriyah, Fadhili and Khursaniyah fields are being developed, with production of 500,000 bpd of Arabian Light crude oil, plus more than one billion standard cubic feet/day (scfd) of associated gas. This is forecast to come online in December next year.
Located deep in the Rub Al-Khali, or Empty Quarter, the Shaybah field has been delivering 500,000 bpd of Arab Extra Light crude oil since its start-up in 1998. Plans call for increasing production capacity to one million bpd, with the first increment of 250,000 bpd under implementation and slated to come onstream by the end of 2008.
Two other major field development projects on track to meet the maximum production capacity target are the Khurais and Nuayyim fields. The Khurais project, which will also include production from the Abu Jifan and Mazalij fields, is projected to produce 1.2 million bpd of Arab Light crude oil in 2009. The Nuayyim project, a central Arabian field, is slated to add 100,000 bpd of Arabian Super Light crude oil by 2008.

Note that there is not much in this list until the end of next year, and then there is an increase in 2008, that will be supplemented with an increase in NGL by 310,000 bd, though again in 2008. Given that there are still those depletion numbers that must be dealt with, it will be another set of numbers to watch as the months roll by.

And speaking of numbers to watch the growing risks of American natural gas shortages by the end of the decade will likely become more evident. With the limited potential for alternatives, this will likely bring discussion on LNG terminals more into focus, though it is starting to be a little late to establish new supply trains from scratch to match the 10% of supply that was supposed to come from the Shtokman field but that is now scheduled for Western Europe .

The change in power in the Congress will bring more light on the situation as alternatives start to be discussed, and, in that regard, I suspect that some of the gilt may rub off the ethanol gingerbread. The price of corn has been steadily climbing and is now at $3.90 a bushel . Given that, just last July the Department of Argriculture was suggesting that the ethanol impact would only raise the price from $2.00 to $2.45, this additional cost may make the enterprise a bit less profitable and thus enticing. The calculation that shows a simplified version of the potential profit is given here . It suggests that there is no margin when the price of ethanol is $1.80/gal and corn costs $4.68/bu. This could lead to a fair amount of debate in those states that have mandated a certain percentage of ethanol be included in gasoline.

And, while I don’t foresee any major changes in direction for this site, I do expect that there will be an increasing focus on global warming with the change in Congress. Whether that will bring a greater degree of reality to the debate over energy supplies is, unfortunately, another matter.

Well, with a soft chuckle, my attempt to move higher up the TOD rankings for next year has now been made. (Sometime around the end of next year I will invite comments on this post that may move me (grin) above 16th in the ranking).

Until then, again, my very best wishes for the New Year to you all.

HO (Who is, alas, starting the New Year himself with a heavy cold, and hence posting instead of partying).

Happy New Year! HO--relax buddy--take care of your headcold.

Looking for the bright side of our global interconnectedness: if scapegoating has to be done [sigh] to achieve Detritus Powerdown, global warming being the focal point is better than all the myriad political groups choosing sides, then pointing fingers at each other. If we all see ourselves as part of the problem, and mutually work together towards solutions--this is far better than breaking up into countless warring factions jockeying for some perceived advantage. I hope we have the collective wisdom to choose this course. Maybe 2007 will be a lucky number!

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Well done HO. Happy New Year to you too!

Folks, also consider this a reminder to positively rate this articles (using the icons under the tags in the story title) at reddit, digg, and del.icio.us if you are so inclined.

This set of links especially would be a good thing for others to see, so they can sample The Oil Drum's content, so hit this hard, if you are so inclined!

Also, don't forget to submit them to your favorite link farms, such as metafilter, stumbleupon, slashdot, fark, boingboing, furl, or any of the others.

Cheers and Happy Holidays from The Oil Drum!

Re: 16th in the ranking

Uhmmm ... that's what you get for talking about specific oil & gas supply issues  

You must know by now that all you need is a world Hubbert Linearization and the whole peak oil problem is solved. This must mean that I'm 17th right behind Freddy Hutter ... I thought, after my OPEC/Angola post, that I was 16th ... but you've jumped ahead of me. I'll have to work harder!

Happy New Year

-- Dave

I read this article pretty frightening.


And this about supply problems.


The question is is peak coal possible. The reason I ask the question is coal extraction is limited technically by a number of factors similar in a sense to those facing the tar sands in Canada. We have not discussed the possibility of a peak in coal production in China but it looks to me that it might actually happen. The assumption is that at least one factor will limit the ability of china to produce and consume coal. Probably rail transport which seems to be a limiting factor in the US.

Thoughts ? Peak Coal can it happen ?

Here are the EIA projections.


The most surprising item in the EIA paper is it seems the US is a net importer of coal ???


The Americas

The United States is projected to import 91 million tons of coal in 2030, 64 million tons more than in 2004. Although this is still a small share of overall U.S. consumption, at 5.0 percent, it represents a shift for the United States from being a net exporter to being a net importer

What ?

And a further link on the environmental impact


Oil comes into play in CTL schemes and hybrids powered by coal generated electricity.

Finally I found a intresting article the original pdf seems to be missing

But it does hint that indeed china is having problems in its coal production and the limiting factor is not surprisingly railroads.

memmel, It is interesting you should link the story below:
On the prior string, I did a prediction set of my own...
Take notice of point 5:
5. China slowdown: Surprising many, China will slowdown, and perhaps to such an extent that it creates an investor crisis. China has overgrown it's resource base, it's labor base, and it's customer base. It has become a speculative bubble, competing in some very low margin industries, and there has been a great deal of "paper inflation" there, in real estate and over capacity of production facilities, but many of those of inferior quality. Do NOT think that China is immune to the type of "Asian flu" that has in recent years swept through several Pacific rim countries. India and other Asian economies are providing stiff competition to the Chinese. They will have to learn to get lean, something they have not been to this point. The energy waste in China has historically been horrendous. This must change.

The Times article you quote is very indicative of what I was talking about....

On the subject of "peak coal" you ask is it possible? Of course, any mineral that is finite not only can peak, but in fact MUST peak, that is the philosophical, almost theological in some ways, underpinning of "peak oil", isn't it? Several long standing coal producing nations have already peaked in fact.

The question is, just as with oil, is it a geological peak, or a logistical peak? They are two completely different things! Coal is more subject to logistical peak, due to the labor and machinery required to extract it, and as you point out, the rail system required to move it. This requires huge amounts of steel, fabrication, etc., just to provide the digging equiment, engines to drive them, locomotives, engines to drive them, rail lines and yards, handling facilities to load and unload the coal...etc. In fact, this is the issue with American coal, in that due to environmental issues and low return on investment, most folks have not been eager to invest in coal handling infrastructure, and for example we have trouble exporting coal because the shore facilities would rather handle something this is easier to move and pays better. Coal requires very large and heavy scale investment in handling facilities to export, and also large barges that are not useful for much else, and that are wore to pieces relatively quickly. For MANY decades, there will be more coal than people who want to deal with it in the U.S.

China faces the same issue we did after WWII. Do you stay with coal, which requires heavy industrial development, lots of steel, and a large workforce which can go on strike, or do you go to something lighter, easier to handle, and with a far lower number of laborers to have to deal with, such as Diesel fuel or natural gas. For America, the choice was easy.....the coal miners struck just as oil and gas went into a prolonged price decline that lasted until the U.S. peak in 1971.

The Chinese are unfortunate in that easy and cheap oil and nat gas may not be so readily available. Coal, the heavy dirty slow way, may be the only choice they have. This will surely limit their ability to grow.

This makes for an interesting structural situation doesn't it? Renewables such as wind, solar and methane recapture may work better in China than in the U.S. simply because we already have a large coal/gas/oil infrastructure, comparative to the size of our economy. China's while large, is not nearly as large or able to grow as fast as the economy they intend to build. In other words, our renewable industry is competing against a massively entrenched and already discounted fossil handling industry, already expensed, while China will have to bear the massive capital expense either way they go.

Back to my prediction: China will slow down considerably, the question is, will it be a soft or a hard landing? Many Americans will get caught in the downdraft. Recently, one General Electric executive said he expected 60% of GE's growth in revenue to come from Chinese sales (!!) Millions of jobs worldwide rely on Chinese growth which is simply runaway and cannot be realistically sustained.

Roger Conner known to you as ThatsItImout

Thank you !

Great response save me a lot of time trying to muddle tpo the same conclusion.

I did not think about strikes at all but your right thats China's great weakness esp with their communistic propaganda which would turn people away from the government if they crack down on workers.

I also find it interesting that China holds 1 trillion dollars in USD but claims to be a poor country and can't afford pollution controls.

To be honest I never quite understood what china was up too. I used to live in Shanghai and traveled through the country quite a bit. The problems were obvious. I'm flabbergasted by the western preoccupation with Chinese growth.
If you spend any time their its obvious that its a train wreck waiting to happen. I did not consider how crippling strikes would be to certain parts of their economy.

Thanks for your thoughts.

Powder River Basin coal is cheap to mine, but expensive to transport since it is so far from the markets on the East Coast. It only became economical (and broke the coal unions) when the government set the sulfur emission regulations just high enough to make Powder River coal burnable without sulfur remediation, and just low enough to make East Coast and Great Lakes states (union) coal require remediation.
That's why the fuss over expanding output from East Coast coal plants without remediating sulfur. The original regulations would require remdiation if expansion occured, but the remediation isn't taking place because then the coal burning power plants would burn East Coast and Great Lakes coal instead of Wyoming Powder River Basin coal.
Of course, when we lost those two railroads in the Basin in 2005, we damn near started burning East Coast coal because the Basin couldn't supply enough, but then we squeaked through and we are now building a new railroad into the Basin.

The coal that the U.S. imports is almost entirely metallurgical grade. It is used in direct heating/chemical reactions in production of higrade alloy steel. This replaces the Pennsylvania antracite that has been depleted, at least the easily mined material.

China is a bomb IMO. (Not the only bomb though.) The leaders are riding a horse they can't get off. Any slackening in the growth rate produces massive unemployment and upheaval. Yet the growth is totally unsustainable every which way. Unlike here, there are elderly Chinese (not even that elderly) who remember what it was like under Mao -- meager, simple, austere, but iron rice bowls, rudimentary universal health care, guaranteed minimal survival. Gone. Once the compensations of growth disappear, watch out.

These vulnerabilities are the reason the Chinese leaders put up with as much bullying from the US as they do, and continue holding a huge pile of rapidly depreciating dollars. Deadly embrace I call it.

Where else to go but coal after oil and gas become scarce? In more pessimistic moments (which stretch out into minutes, days, weeks sometimes) I think there's no hope that we'll avert worst-case scenarios of global warming and environmental devastation. Peak coal would be a blessing if it would but come on time. But it won't -- there's TOO MUCH of it. It seems that little stands in the way of our wrecking the planet.

Your comment about China not being able to back off its growth trajectory is particularly apropos. The Chinese leadership has convinced hundreds of millions of people (perhaps as many as half a billion people) to leave the farm for a life in the city working at salaried jobs. The arguments used involved freedom, personal development, and a change from calculating wealth in calories eaten per day.

It is highly likely that if the growth stops in China, then unemployment will increase. I doubt that the Chinese leadership will be able to convince people to go quietly back to the farm and count wealth by calories eaten.

It might well be worth the leaderships' life and China's existence as a single country to try.

I wonder... did anybody have to convince you to live in a city, drive a car, use an A/C etc.? Why didn't you instead become a farmer who works heavy almost all manual labour 24/7, just to feed his family? Tough choice I imagine. It surely has taken a lot of propaganda and communist brainwashing to do it.

Old saying (unknown source)

"Man will disappear with a wimper not a bang."

The US is not currently a net importer.

As noted elsewhere, the coal currently imported is relatively small, and fills a particular niche. The imports are also related to particular transportation costs: it can be cheaper to import australian coal by boat at a particular port than to move it from Wyoming or West Virginia.

Well, that's a reminder to be sceptical of "facts". I've read elsewhere that we've become net importers of coal. I checked EIA for YTD data:

Imports: 27.3 million short tons
Exports: 36.8 million short tons.

I was skeptical also hence the question marks.

I was actually surprised to see any imports.

There was an ad on Australian TV where a shopper wants a plastic bag and the sales assistant asks 'how do you expect the environment to deal with that bag?'. Seems with coal the message is more like 'enjoy'.

I recall in my Navy days seeing coal being loaded on a ship in Norfolk harbor. A local told me it was going to England. Quite literally a coals to Newcastle situation. This coal had certain properties that the British steelmakers wanted. Could it be that the coal being imported into the US has certain properties a specific customer wants?

Correct also its cheaper to ship via the ocean in some cases than rail.

Happiness in Suburbia?

Over the holidays, a good buddy of mine needed a house watcher. He and his family were going south for the holiday, and his wife could not abide the thought that her miniature Beagle would be alone with no one to play with...and my buddy could not abide the pooch bouncing around the cab of his pickup all the way down there....so, I got to live for several days in suburbia (I normally live in Rural (with a big R, you notice) Kentucky, way out in the sticks. So the cursed Suburbs were of interest to me, and I watched, looked and listened, to the way folks lived there and the way they COULD live there, in the event of a downturn in fossil fuel supply, and or a major upturn in fossil fuel prices. Here is what I observed:

1. Currently, suburban fuel waste is ASTOUNDING. You can stand in the yard of a suburban home, and watch 3 or 4 cars or trucks leave the driveway within a 30 minute span....and then see all of them returning in hours, within 10 or 20 minutes of each other, and then some fraction of them leave again....this goes on all day. It is hard to believe that all the repeated coming and going is needed. My friend took a total of 3 vehicles out of state to carry 5 people, due to the fact that several in the party did not get along well enough to ride together....this consisting of a total of two pickup trucks and one SUV! For a 230 mile trip, mind you...!! The issue of fuel seems to be, even at current prices, a non issue.

2. Everyone uses natural gas or propane, BUT, and this is big, has a stash of firewood and a woodstove, which they are currently holding in reserve. Fuel at this time is cheap enough that the inconvienence of replacing and handling firewood is not worth the effort. The reserves of firewood can be astounding, with many having enough laid up to last an easy 3 or more winters. The "convenience" premium for fossil fuel to heat with is purely that, a "convenience" premium, and not a "survival" issue. If nat gas and or propane were to rise greatly in price, the amount of fuel switching possible in many suburban neighborhoods could be astounding, and very fast. Electricity is generated in our area by coal, and everyone also has electric blankets and space heaters, which are used in "moderate" tempeture season, to cut the nat gas or propane cost. This is instant fuel switching to coal. Most of the houses are fairly well insulated and do not cost a great deal in heating.

3. Recreational vehicles of all types are in every garage: Motorcycles, Jet Ski's, Bass boats, even childrens go carts, drag race or road race cars, the variety is astounding. It is fascinating to think that many say it would be impossible for people to afford an electric or hybrid vehicle, due to cost, complexity, or "EROEI" issues. It begs the question (and I am going to stay on this point in other posts) as to how they can afford third, fourth, fifth and sixth vehicles, very complex ones with high horsepower, purely as amusements. What is the EROEI of a Bass boat? A Jet Ski?

3. Speaking of electric cars, when one watches these people operate, it becomes obvious how they afford the daily running about. I looked at a map of the suburbs around the town I was in in question: A person was within 6 to 12 miles of groceries, doctors, schools, workplaces, etc., and within 15 to 25 of a hospital, a community college etc., anywhere in the city. A small plug hybrid or full electric car could have easily made any of the trips taken on a daily basis, as they were short trips (no more that 40 or 50 mile range both way, and in most cases, not over 30) and for the most part under 35 to 40 mile per hour speeds. The potential for change is HUGE.

4. Most suburban households have excess land around them, for possible gardening, permaculture, fruit trees, greenhouses (by the way, many of them have two or three extra buildings, such as storage sheds, workshops, extra garages, etc). On many of them, the falling tree limbs and cut grass could be harvested for some type of biomass. They are not space limited in anyway.

5. Solar exposed roof area, again, is in no way limited. If one counts the roof of the outbuildings, it is huge, often totaling more by two or three times than the floor space of the house itself.

So on future prosperity, the suburbs don't have it so bad: With cost effective solar (both thermal and PV) and electric and plug electric vehicles, the total fossil fuel consumption could drop by very great magnitude without giving up much of what is considered "a suburban lifestyle". The electric infrastructure and vehicles would consume no more material, engineering, and energy than what is currently used to build the vast variety of high tech "toys" for recreational use only.

If I had to point to any one thing that was most educational, it is the last point made: The amount of energy that is consumed to build and power the vehicles we don't ever talk about much: The motorcycles, boats, jet ski's, recreational cars, street rods, race cars, scooters, go karts, on and on and on....a whole second automotive industry could be built out of the materials and fabricating facilities used just for America's "toys". I didn't even mention the vast hoards of high powered, high tech yard care tractors, small farm tractors for "tinkering" around on the property, Troy built type gardening tractors and tillers, etc. Oh, did I mention the RV's for the road trips, complete second but mobile homes that come with almost any well off suburban household? It is astounding.

Every time I look around me, I realize more and more that so called "mitigation" of possible peak oil is in no way a technical problem, or an "EROEI" problem, or a "unaffordability" problem, but is almost purely a factor of will.

The American middle class gets mad if you tell them this, but it is true, and someone must tell them now and then...."you take it so for granted don't you?' "Do you have any freakin' idea how good, how damm good, you have it?"

RC known to you as ThatsItImout

Here in Europe we have a good lifestyle, so I've always wondered why the US has a roughly 2 x higher per capita energy usage.

Your description of US suburbia now explains it all!

The middle classes in the US seem to have a LOT of scope for conservation without affecting their standard of living significantly.

A comparison of the USA to Europe would be a good TOD topic. There are many differences, the suburb structure is one. Two others that are important are (1) the relative distances between major cities, and (2) the relative extremes of the North American climate compared to Europe. You are warmer in winter and cooler in summer, and that affects demand considerably.

There is an extremely detailed analysis of this question that appeared in Science magazine as an article, at a rough estimate 25 years ago. As I recall, the major issues were distance travelled for shipments of all sorts and weather, exactly as you said. For example, in large parts of the country, if you want a six-pack of beer you must drive thirty miles. If I leave here (Massachusetts) and drive at top legal speed to the west coast at a reasonable number of hours a day, I will be most of a week en route. Also, the western part of that route is decidedly not flat.

When I lived in southern Michigan, I recall a year in which temperature and humidity were both in the 90s for 6-8 weeks. This was unusual, and inconvenient, but not viewed as lifethreatening in the town where I lived. Within a year or two of that, we had temperatures of zero to -20 (I dressed carefully to walk to work) for some weeks, not to mention two days with minus forty temperatures and high winds.

Perhaps someone can find the article and summarize it.

The scary thing is that absolute wealth (waste?) is not what will determine how the power down goes. The only thing that matters is expectations. People here in the US are so accustomed to this profligate waste of energy that no matter how well they could live without it there is a high probability of resentment when their choices become limited.

rc, ty for your post from the wasteland. i have been wondering about that planet since about '85. and on the subject of toys. i notice a proliferation of the inflatables (an obsession with blow-up dolls ?) the nyt stated that the electic costs can run as high as $1000 (seems overstated). but anyhow do we need 10 kw christmas light displays ? another energy wasting toy i see advertised is the remote car starter. what a waste. i'm sure there are many more

It is ironic that the very waste that is hastening the arrival of PO will probably make it easier to deal with when PO arrives.

It is easier to give up luxuries than necessities.

A lot our our economy is based on luxuries.
So contraction will have a lot of effects its not simple.
Basically your talking major depression.

Unfortunately the very wide income distribution may mean that some people will have to give up necessities well before others consider giving up their luxuries...

I've always thought the big problem with peak oil would be economic more than technical. Sure, there are a lot of toys we could cut back on. But those toys are someone's job.

I'm reminded of a friend of mine. He's a rabid rightwinger; his dream is to meet Newt Gingrich one day. He's wealthy, but notoriously tight. When we go out, we can't go anywhere but the local diner, where you get a huge amount of food for $7. Otherwise, he'll gripe for days. His wife never gets flowers, candy, jewelry, or any other gifts. No kids, no pets - they're too expensive. No cable, though he does have a 20-year-old black and white TV to watch the news on.

He thinks What's Wrong With America is too much wasteful spending. By the government and by individuals. He's always complaining about people who waste their money on Nintendos, McMansions, iPods, eating out, DVDs, new cars, etc.

I can see his point, but if everyone did what he wants - only buy necessities - the economy would crash. Heck, he'd probably lose his job, since he's a surveyor. I keep telling him, rather than griping, he should be grateful for the "waste" - it's made him a rich man.

Leanan wrote:

I've always thought the big problem with peak oil would be economic more than technical. Sure, there are a lot of toys we could cut back on. But those toys are someone's job./

I have read Browns Plan B 2.0, Gore's Inconvenient Truth, then last night while waiting for midnight to arrive the National Geographic HD channel had an interesting show called Earth Report.

Like others such as Mr Rapier who went before their politicians, I too will do this in 2007 before our local town council first.

Leanan there will be no jobs lost if you have read the above mentioned books/films. Take the dying fiercely competitive auto industry parts-plants, retool them to manufacture alternative energy devices such as wind mills and problems solved for all including the stakeholders. Just look at the market, 4 major manufacturers on the NA continent. How many competitors in the auto industry. Plus auto parts plants are the most efficient sector in manufacturing due to high repetitiveness volume based pricing, lean manufacturing concepts etc.

The other Deceptiveness is the ethanol markets, the high price paid for a barrel of oil now becomes the profitable price for expensive ethanol. With global warming, hot arid conditions, low water tables, heavy grazing, and finally expanding deserts, humans and agriculture with fight for their food against the ICE transportation industry.

My personal goal this year to to pump up the volume and write letters to the editors of local and national papers in my country to make people aware we are currently at a tipping point with all natural resources and the sustainability of mankind on this fossil fuelled, automotive centered, throw away economy based planet of ours.

Mother nature is yelling at us now to take action and give up on the politicians.

"Those toys are someone's job." Right. and so is being a guard in a Gulag, or a U-Boat commander or a--- (you fill in awful things we pay people to do which shouldn't be done at all).

And after you count all that trash in those suburb garages, go to any big box store and walk down any isle, and check off the stuff that, like the jet ski and the exercise machine, we could be happy without. My favorite bad example is the little fuzzy battery-powered squirrel from China that my granddaughter is gonna play with for a few minutes, break, and ask me to fix- or just chuck into the garbage.

Just think of it for a moment- what could we do with all that misdirected human effort and capital? We could do everything we talk about here and more, and everybody giving up a useless job and doing one of the important and world-improving ones would be much much happier, and I for one and you, probably, would be happier paying for their doing an electric car or a windmill storage system than we are paying the same amount to the same person for crap.

I just had a new year's party with friends. We all are retired academics with pretty good incomes. They had all that stuff mentioned, and we had none of it. We all agreed that I and my wife were "lucky to be so well off and happy" relative to the others. Well, maybe because we did not even think of buying any of that stuff that the other folks had stored in every corner of their houses? And because we had a big good garden and a well-insulated house, and lots of trees- and a whole lot of land that was bought with the money that didn't buy that junk, those kerosene jags to Indonesia, and , and , and--.

What we need here is a sales job- sell 'em the goods instead of the bads. No lack of good jobs here. But it had better be quick.

I'm not saying suburbia should be preserved. Indeed, I'm in the camp that thinks it cannot be preserved.

But how to get there from here...aye, there's the rub.

Also, I think the suburb described is a rather wealthy one. It is not typical.

Your comment states the whole conundrum.

"Those toys are someone's job." Right. and so is being a guard in a Gulag, or a U-Boat commander or a--- (you fill in awful things we pay people to do which shouldn't be done at all).

People would rather be Gulag warden or U-Boat commander than UNEMPLOYED, they don't set up their own job and even hardly choose it.
Someone else does, WHO and WHY?

My favorite bad example is the little fuzzy battery-powered squirrel from China that my granddaughter is gonna play with for a few minutes, break, and ask me to fix- or just chuck into the garbage.

Yeah, but WHY did you (or someone in the family) buy it?
Because it's fun and a minor expense as a single unit even if it is tremendously expensive for the utter crap it is.
Do you think this will go away or that "crappy products" should be banned (good luck with this...).

Just think of it for a moment- what could we do with all that misdirected human effort and capital? We could do everything we talk about here and more,

WHICH of the "everything possible" will be worked on, who will decide about what to work on, how will the cost effectiveness of those jobs be assessed?
Do you think NASA is cost effective even for the wondrous things they do?

Despite producing CRAP the free market economy "works" because the constraints on costs and sellability are really tight and hard pressing.
It is very unfortunate that the overall outcome is disastrous but to fix this requires equally hard constraints, some form of dictatorship.
Too bad dictatorships are driven by power and control, the USSR/Russia was and is pretty good at producing weapons.
What could enforce "enlightened production" and/or "enlightened consumption"?
Some enlightened socialism?
Tough luck if we can judge from previous experiences.

And anyway it take time to build social habits...

Funky formatting.

Take the dying fiercely competitive auto industry parts-plants, retool them to manufacture alternative energy devices such as wind mills and problems solved for all including the stakeholders.

That is not really how economics works, though. We don't have a king who can order the plants to retool and make it so.

And it's not just the car parts plants that will be affected. It will be everything. Waiters, college professors, highway engineers, airline pilots, hotel managers, salesmen, veterinarians, etc. Are they all going to become organic farmers or nuclear engineers?

I predict that there will be mass unemployment in the U.S. within the next fifteen years. Further, I predict that there will be a number of federal government programs to combat this mass unemployment; probably these will have little effect.

One of the things we should be thinking about now is how exactly to transfer income to twenty to forty million unemployed Americans. We're not going to leave them to freeze and starve in the gutters, but surely we need better mechanisms for redistribution of income than we now have.

Personally I'm a fan of Milton Friedman's idea of a negative income tax; politically that one might fly, and because we already have an Internal Revenue Service we would not need some brand new beaurocracy to administer it.

"I predict that there will be mass unemployment in the U.S. within the next fifteen years."

Because of oil shortages?

Don, previously you said that you wrote an economics textbook. That would require a serious economics background - could you tell us what book it was?

Could you outline the path you expect to take us from here to the U.S. of 15 years from now?

The title of the book is "Economics: Making Good Choices," by Don Millman, 1996, currently out of print but available cheap in used condition from The Great Amazon company and other similar places.

The future is going to bring surprises--most of them unpleasant ones.

The next recession will probably begin within two years and be mild and relatively short-lived.

Whoever is elected president in 2008 is going to face prodigeous problems of economics and finance. I think Congress is unlikely to do anything constructive until TSHTF, and not much then.

Now when will that be? DarnedifIknow. For a guess, I'll put it at 2012, a time when I think inflation will be worsening, oil and natural gas prices soaring, unemployment increasing, and federal budget deficits above the trillion dollar a year range.

Wild cards are things like wars. Compared to the wars of the twentieth century, Iraq has been pretty small potatoes; much worse could be in store for us.

I expect the U.S. government to respond to soaring oil prices with price controls, and price controls mean rationing. I would not buy any oil stocks, because I think at some point they will be slammed with punitive excess profits taxes; oil companies are the scapegoat so easy to hate, so easy for demagogues to blame, so big and vulnerable to taxes and price controls.

With regard to unemployment, I think the U.S. will fumble around with ideas warmed over from the New Deal--not necessarily useless programs, but at the same time much too little much too late.

When will unemployment top 10% in reported statistics? I'm guessing before 2012. When will unemployment top 20%? My guess it will come some time during the eight years from 2012 to 2020. Note that in the year 2020 the maximum costs will finally hit Medicare and Social Security from retirement of the Baby Boomers. Unemployed people will swell Medicaid rolls. Kuntsler may be correct about housing prices crashing now: More to the point it may take prices twenty years and a great deal of inflation to recover.

At some point I expect the Federal Reserve to throw in the towel and monetize the debt. Inflation could go up annualy something like this: 2%, 4%, 8%, 12%, 20%, and beyond that it could get really nasty.

What good news do I see on the horizon? Well, we are going to get plug-in electric hybrids--probably made in Korea or Taiwan or Japan, because both Ford and GM are sclerotic. Or maybe China will bring us the $10,000 knock off of Prius with more batteries and a plug-in charger--would not surprise me. Probably there will be some progress in biofuels and cleaner coal. But I do not expect much good news, because our government at all levels is broken and I see no probability that it will be fixed in my lifetime.

In the much longer run, looking at the lifetimes of my grandchildren, I'm a moderate optimist for the U.S. and an extreme pessemist for the poor countries of the world--which, IMO will be hit the hardest by Peak Oil and possibly also hit the hardest by Global Warming.

Note that all the above are guesses. I've been wrong before and could be wrong again. Dates are WAGS.

Take the dying fiercely competitive auto industry parts-plants, retool them...

Sadly, it's not just the auto parts industry that's in trouble. The parts industry itself is heavily dependent on tools, an example of a tool being the mould used to make a plastic part. Parts manufacturers typically don't make these tools themselves, they buy them in. North America used to be a leader in tool production but there's no prize for guessing to which Asian country much of this work has been outsourced. There's surely no guarantee that the same won't happen to the emerging technology for alternative energy hardware.

Only airline pilots of the above will be seriously disadvantaged.

There would be plenty of nuclear engineers if there's a demand. There's already plenty of engineers in areas who have been "cashiered out" due to the global economy and end up underemployed.

I'm a physicist, and if my country calls, I'd work as a nuclear engineer. Assuming I'd get paid with a steady job. I'm also mostly out of career options in science at present myself.

If you have pay with steady job (and health insurance) there will be people there.

I think you're dead wrong on that. A rising tide may not lift all boats any more, but a sinking one will lower most of them.

Who will be investing in car plants to turn them into solar plants? People will be losing their jobs, and won't have money to buy the solar panels, no matter how much they want them.

When people don't have jobs, the government can't collect taxes from them. So even government-supported projects like highways and schools will languish.

Now, I'm sure there will be some attempts by the government to fix things. Jobs programs, mortgage bailouts, food stamps, etc. But it will be like trying to empty the ocean with a teaspoon. They won't have the resources to really make a difference.

I think the problem is not the toys but the fact that the toys should be valued. Its not the production that is the problem but the throw away part of the equation. For example take something as simple as a broken glass.

First in a society that respects the cost of production the glass would be a work of art not a cheap mass produced item. If it break you would get it repaired or at the minimum recycle the glass.

The problem is that cheap energy results in the mass production of cheap goods and people loose access to custom high quality items that can be cherished and have intrinsic value.

When I was in chemistry for example I'd often dig up old instruments from the 1800's these were beautiful works of art made in glass and brass. The craftsmanship was outstanding.

I think one day we will go back to this society that respects crafstmanship.

I think it's partly a problem of identity. If I had spent 20 years building up my identity based on a conspicuous life of leisure. I would be mad too if some environmentalist type came along and told me that I couldn't have it.

It seems to me that in our current middle class social framework (also speaking for the UK) the first person who starts to give up all their "stuff" and energy use for the environment will look like a loser in our materialistic society. It will put them at a social disadvantage. I believe Margaret Thatcher said in the eighties (from memory) "If you are still taking the bus by the age of 26, you're a failure!" This is the kind of ingrained mentality here and its very competitive.

I see it as just getting used to a low energy future, but even if my friends believe me about that, they cannot bring themselves to cut back on stuff and I'm not very good at it either.

The competitive lifestyle will only change as people begin to open up to teamwork and social inclusion. I want this to happen, but it might take a disaster.


I looked around at the Palm Springs sprawl a week ago and had similar reactions as you. I think it's interesting that we, the relative optimists, feel ourselves so divorced from society at large as to be "ASTOUNDED" at their behavior.

Maybe I was less astounded this time, because I watch for that reaction in myself. I'm more aware now that my outlook has been shaped for the last few years by a sub-culture.

I think 2006 was a pretty good year. We got more response than I expected. Society is mobilizing. Even Forbes (a laggard at recognizing problems of resource and environment) now thinks:

One thing will most color 2007: energy. Concerns about energy will affect sales of large trucks and SUVs--Detroit’s backbone--and will make small cars more attractive than they have been in recent years. Energy issues will continue fueling the move toward smaller, car-like “crossover” SUVs. Lots of new ones are forthcoming. Even Corvette advertising hypes fuel economy these days, and with the success of the Tesla Roadster, even the electric car is back--in a big way. Flagship luxury cars are getting hybrid and diesel variants. Energy concerns will affect every type of automobile in 2007.

I think it's an open question how it will all work out, but I think the answer is in understanding the shifts taking place in broader society, rather than sitting back in a sub-culture and calling it all "denial."

I think we will see more in 2007 - more than the average TOD member expects.

(BTW, I drove 420 miles, and couldn't fit $20 worth of gas back in the tank ... Prius are cool.)


You have hit an important nail on the head. I am a reluctant member of suburbia, and everything you have noticed is true. There is enormous potential in the transformation of the suburbs. So much so, that I'm actually optimistic a transition from oil can be made, but it won't be easy.

My blog (http://greensgogreen.blogspot.com) is documenting our attempt to transition to a greener lifestyle while living in suburbia and keeping our (probably unsustainable) standard of living.

Two things I've noticed about demand destruction potential is that most car trips are short (< 10mi), so a PHEV would go a long way, and many of the lawns could convert back to agriculture relatively easily if required. Use of fossil fuels is a result of convenience to a large extent.

WRT the piles of firewood, most of it has come in the past two years as a result of higher fuel prices. I'm doubtful converting to wood is sustainable, given the requirements.

In any complex system there is an inertia to change. You have pointed out some of the resistance to change that mitigates the pure economic thrust. Keeping up with the neighbor who has one more toy than you is a powerful driver for many. Yet this desire has built in a buffer that will allow a "softer landing" if oil depletion is less than catastrophic. When push comes to shove, replacing a worn out toy is not going to be high on Maslow's list of needs fulfilment.

It is undoubtedly true that there are huge opportunities for conservation here precisely because we waste SO much. BUT, I suspect that conservation will take place by people dropping out of the middle class, not by conserving while they are still in it. For example, the diaspora from Katrina is not consuming a lot of energy -- or anything else.

One thing that's being missed is that the plethora of Jet Skis, go-carts, and riding lawnmowers represent money already spent and energy already burned. THAT is how we've invested the enormous wealth generated in the U.S. over the past fifty years. Yes, if those resources had been invested in public transit, infrastructure, alternative energy, etc., we'd be in great shape right now. But we can't - that potential is gone.

I would hold out hope for an easier transition if we had a high rate of personal savings and low national debt - that's energy waiting to be tapped. But an oversized house filled with gadgets? Nope - that's the "exhaust" of the market, not the fuel.

Generally most of the toys were manufactured in China so not only did we blow the money little went back into maintaining our own infrastructure.

Interesting to me because I don’t live in the US, though I am familiar.

The problem is not scaling down the 'plenty' (or 'waste') in a rational sense, but what happens when John, who is a manager of a company that makes indoor rowing and muscular training machines, and Cindy, who is an assistant in a real estate office, lose their jobs? Are they to count on their precocious eldest daughter, who is a entrepreneurial whiz, and a good looking one too, - she imports novelties from China and has even cornered the market for caps and more at the two local high schools - to pay the mortgage? How does that pan out?


One reason I had four brilliant and energetic children is so that they could generously support me in my declining years;-)

Call me sentimental but i was relieved about Ru & Belarus reaching terms. One thing that will be harder to ignore this year will be increasing demand destruction in less-industrialised countries as fragile economies fall to bits. 2007 might be the Year of Indifference as global production falls but consumption still rises in the notionally richer countries, and we all play dumb, ignoring it until the effects show up on our borders. My sole prediction then for 07 is for tourism to poorer regions to take a hit, just cos they'll be less safe or practicable to visit.

But it RAINED in my part of the world, a little anyway, who can be glum? Thanks (nearly) All for efforts, past and future, heres hoping insight beats programming in 07.

This could lead to a fair amount of debate in those states that have mandated a certain percentage of ethanol be included in gasoline.

I agree with you 100%. I think this story has only just begun to gain momentum. Remember, each year the amount of mandated ethanol increases, and this will put additional pressure on corn supplies/prices. As I have pointed out many times (and as I pointed out when I testified before the Montana legislature); any time you ignore economics and start mandating solutions that weren't previously economic, the impact on prices can be dramatic.

As an analogy, consider if Alaska mandated that each Alaskan must purchase 20 Alaskan-grown mangoes each year as part of their diet. Now, there is no doubt that you could grow mangoes in special greenhouses in Alaska. The costs of production would of course be very high. But since this is mandated, Alaskans get to pay the cost, no matter how high. That is the situation we are rapidly headed for with ethanol.

Re: Ethanol mandate.

There has been an ongoing debate here in Iowa as to whether the state should mandate ethanol in gas or not. Minnesota currently has such a mandate. Living in northern Iowa, it is easy for me to cross the line and check if there is a difference in the price of gas. Between Mason City, Iowa and Albert Lea, Minnesota there is practically no difference. Sometimes Mason City is cheaper and sometimes Albert Lea is cheaper as checked at the local Wal-mart. Both have ethanol plants nearby and there is another one about half way in between the two. I use to live in Minneapolis, so I compare prices there with Mason City just for fun on the Internet. Minneapolis being in Minnesota with the mandate usually has lower prices. IMO there is no evidence that mandating ethanol will increase the price of gas. If anything it will lower the price of gas by increasing the amount of fuel available. I could go on and on about the all the mandates the government requires in cars, insurance, housing and etc., but I will spare you. RR is wrong about mandates for ethanol. Happy New Year.

Between Mason City, Iowa and Albert Lea, Minnesota there is practically no difference.

You are ignoring state subsidies, and focusing on local versus a national mandate. States that grow a lot of corn could mandate ethanol without too much problem. Extrapolating that mandate nationwide is what causes the problem.

IMO there is no evidence that mandating ethanol will increase the price of gas.

Your opinion is worthless, given that there is no doubt that mandated ethanol has driven up corn prices, and this has translated into higher ethanol prices. Have you checked ethanol prices lately? Why do you think the spot price is so much higher than it was last year? Mandates.

RR is wrong about mandates for ethanol.

OK, then explain why corn prices are going up. Of course you being a corn farmer, this is to your benefit so you definitely have a conflict of interest here.

But of course you being an 'oil worker' do not have a conflict of interest here. Right?

But of course you being an 'oil worker' do not have a conflict of interest here. Right?

If you think ethanol is any threat to the oil industry, you are truly an idiot. For one, ethanol couldn't possibly make a dent in our consumption of gasoline. Second, if ethanol looked to be a long term solution, the oil companies would just start buying up ethanol plants. So no, I have no conflict of interest here. But a question for you. Do you ever get tired of trolling? Seriously?

Oh, it's fine for you to accuse someone of having a conflict of interest re ethanol because they are a corn farmer, but someone who points out that you have

Previous reply got cut off. It should read .....

Oh, it's fine for you to accuse someone of having a conflict of interest re ethanol because they are a corn farmer, but it's 'trolling' if someone points out that you have exactly the same sort of conflict of interest being an oil worker. There is no way that the oil industry can look favorably upon the ethanol industry, you are in the oil industry, hence the potential conflict. The fact that the oil industry is much larger and more powerful than the ethanol industry doesn't matter a wit.

Isn't this one of these 'ad hominen attacks' that you are SO terribly sensitive about? Shouldn't you be following your own lofty principles and weigh the previous poster's arguments solely on their merits rather than upon the poster's own vested interests?

Let us not be so full of ourselves.

This whole RR has a conflict of interest thing is getting really old.

He has explained himself several times.

He talks openly of his employment and makes no effort to hide it.

What more is the man to do?
Can we give it a rest?

Isn't this one of these 'ad hominen attacks' that you are SO terribly sensitive about?

No. Look up the definition. I actual addressed the issues raise. All you do is say "but you are biased." That's all you ever do. You have yet to address any issues with me.

Why don't you spell out my conflict of interest here? My livelihood is in no way impacted by ethanol. The entire ethanol production of the U.S. is equivalent to the output of one decent-sized oil refinery. The ethanol industry is highly dependent on the natural gas that my company makes. But you knew that, right? So, understand it is not protection of my job that has me criticizing ethanol. Otherwise, why would I preach conservation? Why would I suggest biodiesel or butanol as possibly better alternatives? Is this just a cover? Seriously, guy, get over your man-crush and move on. As Rethin says below, this act of yours is getting tiresome. If you want to address some issues, let's rumble. Otherwise, stop wasting everyone's time.

Well, every gallon of ethanol that's sold for fuel is (almost) a gallon of gasoline that isn't being sold by some oil company. Thus, if a state mandates say 15% ethanol in gasoline, than that is almost 15% less gasoline that the oil company will be selling in that state. I don't know about you, but if someone took an almost 15% chunk out of my business in a particular region, I wouldn't be too happy about it.

While your livelihood may not be directly threatened by ethanol, the oil company that employees you cannot be happy about seeing 10 or 15% of its gasoline sales decrease.

So, if you believe that this person called 'practical' has a conflict of interest because he grows corn, then why don't you have some conflict of interest because you are employed by a oil company that is opposed to ethanol?

On the other hand, if you DON"T have a conflict of interest for many of the reasons you stated, then neither does 'practical'. Come to think of it, even if there were no ethanol, 'practical' would stillI be growing and selling corn, albeit at a lower price. Ireally don't see how you can have it both ways.

By the way, you asked me to look up 'ad hominem'. I did, and I think you are using the phrase 'ad hominem attack' interchangeably with the phrase 'personal attack', which is not quite correct. Nit picking? Yes, but you were the one who brought it up.

Keep in mind, I brought this up merely as an issue of perspective; I am not any greater a fan of ethanol than you are.

While your livelihood may not be directly threatened by ethanol, the oil company that employees you cannot be happy about seeing 10 or 15% of its gasoline sales decrease.

I will again point out, since you seem to be reading comprehension impaired, that my company makes major money off of natural gas sold to ethanol companies. My company is the largest producer of natural gas in the U.S. Once again, where is my conflict of interest? If a gallon of ethanol displaces 0.65 gallons of gasoline, it used up that many BTUs of natural gas/gasoline/diesel in its production (and possibly more). So, there is no real impact to my company, nor to me. Understand?

By the way, you asked me to look up 'ad hominem'. I did, and I think you are using the phrase 'ad hominem attack' interchangeably with the phrase 'personal attack', which is not quite correct.

For your benefit (from Wikipedia):

An ad hominem argument, also known as argumentum ad hominem (Latin, literally argument against the person), involves replying to an argument or assertion by attacking the person presenting the argument or assertion rather than the argument itself. It is a logical fallacy. Some examples of it include include the personal attack, when a personal attack is used to discredit a specific claim or assertion, and the you-too argument.

You see, when you say "you are biased", but don't actually address my arguments, you are committing an ad hominem fallacy. What I did above was point out that Practical's livelihood is impacted by his ability to sell corn at artificially inflated prices. That alone would constitute an ad hom. But I also addressed the arguments. That is the piece that you are missing, which is why all you have are ad homs against me.

Do you plan on addressing my arguments at any point? Or is this "you are biased" song and dance all you can come up with?

This 'ad hominem fallacy' term that you seem to like bandying about so much applies mainly to arguments having to do with logic and statements of fact. But not opinion.

If person A expresses the OPINION that person B has certain biases, that is NOT an ad hominem fallacy in and of itself. It only becomes an ad hominem fallacy if person A says that person B's specific argument is incorrect solely because person B is biased. I hope you see the difference.

I don't recall every saying that your arguments were logically or factually incorrect because you work for an oil company. What I did say is that one's point of view and the ideas he chooses to promote or not promote is usually colored by one's background and by one's source of income.

So, if I occassionally chide you about certain things, it doesn't mean that I hate you, and it doesn't automatically mean that I am engaging in an 'ad hominen fallacy'. But if I were to say to you that I don't believe your argument about ethanol because you are a lying bastard, then you have every right to accuse me of committing an ad hominem fallacy.

I will, however, concede that Big Oil will recover the cost of a large fraction of the energy content of ethanol, at least that part consisting of fuel for farm equipment and and natural gas for distillation. However, it will usually not recover the value of the coal burned for electricity nor that of coal directly used to run certain coal-fired ethanol plants. Still, I would venture that Big Oil would rather there not be a proliferation of ethanol plants.

Alas, it's only January 2, and I've already broken one of my New Year's resolutions about not getting into this kind of discussion ;-)

A gallon of straight gasoline is not equal to a gallon of 10% ethanol 90% gasoline.

Ethanol spiked (10%) gasoline is equal to 0.96 gallons of pure gasoline.

So $2.50 MN gasohol = $2.40 pure Iowa gasoline.

Is there a dime difference in pump prices ?


PS: RR is right

In Minnesota the price difference between 10% ethanol 87 octane versus pure gasoline is several cents cheaper for the ethanol blend. It is, however, hard to find pure gasoline in the Twin Cities area, which is bothersome because my ancient motorcycles from the 1960s require either pure gasoline or major retrofitting for the ethanol blend. On the average, I'd say the difference is about six to ten cents a gallon. The pure gas I use is actually 92 octane, and it sells for about a dime more a gallon than 92 octane ethanol blend.

BTW, if you want fun, get an old single-cylinder motorcycle, either two-stroke for simplicity or four-stroke. These old bikes are not only fun, but they are even more fun to restore and fix up.

In Minnesota the price difference between 10% ethanol 87 octane versus pure gasoline is several cents cheaper for the ethanol blend.

The reason for that is that in addition to the national $0.51/gal subsidy, Minnesota also subsidizes ethanol to the tune of $0.13/gal. If not for that, the ethanol blend would be more, and E85 would be substantially more, while delivering less energy. Currently the spot price of ethanol is running $0.60/gallon higher than the spot price of mid-grade gasoline. With the $0.64/gal subsidy, the cost of ethanol can be brought down to slightly lower per gallon than gasoline.

Just thought I'd drop another random data point here. ... We just got back from a trip up from Austin TX to Jackson MS.

There were at least four drilling rigs active along highway 79 through east Texas and one along I20 in western Mississippi.

These new drilling projects were in existing fields, as indicated by the large number of pumpjacks. Most of the pumpjacks were still, maybe one in fifty of them was bobbing. Looks like an effort to exploit every last grease spot in these old fields.

[EDIT] ... just to add a bit of information to that, we've made similar journeys since about 1999. There were the pumpjacks all over east Texas but we rarely saw any drilling activity until this year.

If you don't trust the new year just refuse it.
For 2006 why not trying to get a refund from customer service?

High on my list of 2007 concerns is whether the readjusting of ARMs will impact energy usage, employment and imports/balance of payments. If the home ATM is turned off, it seems plausable that energy usage could drop significantly.

I don't think so all the graphs I've seen don't show usage changing much in a recession. Which makes sense since they change in GDP is only a few percent.

A recession is more a crises for investors or people with property than anything else.

From what I can see, the coal mines on the Rocky Mountain escarpment are located beside the railways which go through the most appropriate passes. The upthrust which extends from Alaska to Argentina exposes the carboniferous era quite conveniently, although I gather that South America has little coal in its upthrust.

If we look at Alberta and BC, the mines are on short rail spurs and there is no reason to assume that the seams don't continue for the hundreds of miles between passes. This is also, perhaps due to the [initial] depth of the deposits, quite hard and low sulphur carbon which is relatively easy to work. On a recoverable carbon basis, I have been led to believe it dwarfs both conventional oil and oilsands in potential volume. Until the oil discoveries in 1948, it was the major fuel source for home and industry and every home had a coal chute and a massive 'octopus' furnace in the basement.

Despite being an oil colossus, Alberta has a large coal fired powerplant at Wabamun Lake and the majority of electric genration is pobably a split between hydro and coal. Not surprisingly, those blue eyed Arabs of the North seem to have chosen a foolproof or should I say fuelproof investment in electrical generation. Granted, the major fuel for home heating is still natural gas, but the volume of easy access coal to roll downhill is apparently massive.

I see a similar deposit on the east side of the Wasatch range and more in Colorado. Lotsa carbon to burn. China, from what I gather, is mostly lower grade coal and subsurface mining, which is far more labor intensive and dangerous. Probably Peak Coal will never happen as we'll run out of atmosphere as we know it first. Peak oil is a blessing but peak coal will be a curse as we'll never get there by the looks of it.

Thermal coal prices are running about $40? a ton which is under $10 a BOE. ??Correct me if I'm wrong here, but it sure looks like a devastatingly cheap bargain - with the devil.

Despite being an oil colossus, Alberta has a large coal fired powerplant at Wabamun Lake and the majority of electric genration is pobably a split between hydro and coal.

Yes, lots of coal but Alberta has less hydro power than one might imagine. About half of Alberta's electric power generation is coal-fired and most of the rest (37% in 2005) comes from natural gas. The natural gas bit includes a sizeable co-generation component but is as vulnerable to declining supplies as anything else.

New capacity proposed and under construction looks like more of the same, including a 1,000 MW coal-fired plant near Brooks, except that the proportion of wind power is growing rapidly. Canada's installed wind capacity doubled in 2006, with Alberta just behind Ontario.

Alberta is pretty dry, especially in the southern third of the province where most people live. As a result, the contribution from hydro is small. The west side of the rockies is where most of the good hydro opportunities are located.

Now that you mention it, the wind potential is huge, especially if you design to utilise the tremendous concentration of wind in the Crowsnest Pass area of southern Alberta. Both it and the Bow River valley have serious wind 'problems' and harnessing that to pump water back uphill into the reservoirs could increase the capacity despite the relatively small scale of the rivers. Montana has a few of the same possible areas. Spain has done this in order to avoid 'wasting' irrigation water for hydro power.

When I see the pathetic pinwheels that qualify for harnessing wind power in today's tax system, it seems as though a hoax is being perpetrated. Let's get some concentrated slowing of the air that extends a half mile up at least; put a flag on it and maybe a giant plasma screen advertising the next green documentary. Progress! Remember, wind is another natural gas. Air is still pretty thick stuff for a couple of miles up and all we can get is maybe 100 feet? Not serious yet.

The whole east face of the Rocky Mountains has potential for significant wind power. This includes everything from well south of the Mexican border to the Peace River valley north of Dawson Creek.

The main difficulty with wind power is its fickle nature, which requires alternate power sources that can be brought onstream in real time. The hydro power installations on the west side of the Rockies are would work well for this purpose, but, alas, the management of power resources across the mountains is not well integrated in any of the three countries.

The Edge Annual Question — 2007:


If nothing else, look at it as a internet excursion into another sub-culture.

And FWIW, Jared Diamond's bit is that:

Good Choices Sometimes Prevail

and says:

I am cautiously optimistic about the state of the world, because: 1. Big businesses sometimes conclude that what is good for the long-term future of humanity is also good for their bottom line (cf. Wal-Mart's recent decision to shift their seafood purchases entirely to certified sustainable fisheries within the next three to five years). 2. Voters in democracy sometimes make good choices and avoid bad choices (cf. some recent elections in a major First World country).

[Update - I haven't read many, but my man Taleb rocks]

Certainly many writers at that link have rather rosier views of the future than many TOD forum contributors! But I wonder about that group (collective of scientists/thinkers with strong anti-religious-establishment sentiment) as with any group that ends up being rather homogeneous in their worldview.

In other words, if birds of a feather truly do flock together, are their individual thoughts actually different analyses of the world, or are they mirroring each other to provide mutual comfort and assurance?

odograph said,
[Update - I haven't read many, but my man Taleb rocks]

Indeed he does! He finished his piece with the PERFECT sentence!

"More tinkering equals more Black Swans. Go look for the tinkerers."

Man, that should be the MOTTO of the age! :-)

Roger Conner known to you as ThatsItImout

Fooled by the Question

Odograph writes:

Update - I haven't read many, but my man [--Fooled by the Randomness] Taleb rocks

I'm not going to repeat all that Taleb epistemologizes about. You can go to the link above to read it yourself.

But let me suggest that we are too often first and foremost fooled by the question itself.

TOD readers will generally cringe at a contrived question like:
When exactly will the oil run out?

The Edge poses an equally contrived question:
"What are you optimistic about?"

Well, that can be re-written as: Put on your rose colored glasses, ignore all things you are pessimistic about, give them no weight and now report to us on what is left in your limited field of vision: What are you optimistic about?

Taleb's answer shocks me in its simple mindedness. First he assumes that the "American" education system is some sort of superior "random" process that will bring forth the Black Swan-ugly ducklings out from the cesspool of ordinary ducklings. And second he assumes that the Black Swans will operate on the side of goodness rather than for the Dark Force and the Empire.

All these assumptions are incredibly naive given that the first business of "America" is business and that all our governmental processes are driven by corporate lobbyists. That is hardly a random stochastic process. (And that includes the American "Educational" system which is driven by a need to show large profits at the end of each semester rather than a need to produce rational human beings.)

"2. Voters in democracy sometimes make good choices and avoid bad choices (cf. some recent elections in a major First World country)."

Unbelievably childish and incredibly ignorant of little jared. I can't believe he was stupid enough to think something like this let alone say it out loud.

I dropped by TOD to see what sort of people would gather here at the first day of the new year. There are some (IMO) rational analysts, people who try to derive fact-based understanding of oil and energy supply. They may sometimes look forward with prediction, but I think they understand the difficulty with such prediction. It is hard enough to understand, say, Saudi production now. It is tremendously more complex to predict Saudi production 5 years from now, given geologic, religious, economic, and political possibilities.

There are unfortunately another set of folks who drop by TOD to share their fears, and to reinforce those fears in a particular sub-culture. Essentially, say we are doomed, and get a high five. Or, look out on the world, dismiss it (and smart people within it) as "delusional" or "in denial" and get another high five.

I think the pattern should give residents real pause. The sub-culture reinforces itself in ways that may not always be productive. And, I think history shows a poor record for groups which do insulate themselves in this way, and drop words like "delusional" or "denial" or "childing" or "ignorant" or "incredibly naive" quite so easily.


Those adjectives you list are all forms of the ad hominem fallacy. I'd also like to see an end to accusations that somebody is a troll; that is just another ad hominem insult.

like to see an end to accusations that somebody is a troll

Yes, lets also stop calling a lie a lie, it's SO inimical...

I taught logic for thirty years. Calling somebody is a liar is a form of the ad hominem fallacy, because there is no way you can KNOW somebody is consciously lying, because they may be mistaken but sincerely believe what they say.

The ad hominem fallacy covers a lot of ground.

because there is no way you can KNOW somebody is consciously lying, because they may be mistaken but sincerely believe what they say.

I entirely agree when one is basing the assumption upon a few exchanges and on the controvertible materiality of some facts, to err is human...
But when there has been a LOT of argumentation going on and you have had the opportunity to appreciate the underlying agenda, the STYLE of the answers and the constant weaseling there is MUCH LESS doubt about the appropriateness of the terms "liar" and "troll".

All TODers are liars and trolls.

The sub-culture reinforces itself ... drop words like "delusional" or "denial" or "childing" or "ignorant" or "incredibly naive" quite so easily [upon those they ridicule].

When I speak of the "sheeple", I speak of me.
I am ignorant.
I am delusional.
I am in denial.

It can't be helped. The brain I was born with contains a fearful and easilly "terrorized" lizard section. It contains a "go along to get along" sheepish section. And the tiny part left over, the part that believes itself to be "rational" and "knowledgeable" is constantly contriving new fantasies about how the inevitable "it" won't happen and how technology or some other fanciful thing will come to the rescue at the moment of need.

One more thing.
In speaking of the "sheeple", of the gaggling geese, we are oft fooled into believing that we have "free will", that by sheer mental focus we can alter our trajectory.

The New York Times today has an interesting article on "free will". Is it real or just another delusion?

“When we consider whether free will is an illusion or reality, we are looking into an abyss. What seems to confront us is a plunge into nihilism and despair.”

OUTSTANDING post and article stepback, thank you very much.

This line early in his article is funny:
"After all, we’re free humans, not slaves, robots or animals ... "

Ah... but we IS aminalz - nipples and all.

Frequently delusional, childishly naive and ignorant animals at that. That includes those who worry about collecting "high-fives" and those who try desperately to impress others (maybe they have a dopamine-deficiency ???).

Hook yourself up to an IV drip of adrenaline and testosterone and see how long you can maintain the delusion of free will.

Thank you once again for posting that wonderful article. Myabe Jar-Jar Diamond will read it to and reconsider his silly assumptions about the herd making smart "choices."

Thank you for the kudos SendOiler,

I would not be surprised to learn that for a great many who read TOD, I come across as a lunatic much the same way as many of us come across as lunatics to the general public (or to family members) when we try to raise the alarm about Peak Oil.

Without the proper education about human anatomy, about how the brain is structured and about how little we know of its inner workings, it all probably sounds like just so much gobbledygook.

But then again, without the proper education about physics, chemistry, geology, systems engineering, and all the rest we discuss here at TOD; much of what we say about Peak Oil probably sounds like so much more gobbledygook to the general public.

It's not that "they" are stupid and "we" are smart (or that we are "special"). All humans suffer from the same shortcomings. We are all programmed to possess a limited amount of knowledge and to operate in certain ways that are counter to our notions of "free will". That is the scary part.

It is only by coming to understand how it is that we are programmed that we might see a way of re-programming (re-engineering) ourselves.

IMHO, such re-programming is necessary to tackle the Peak Oil dilemma.

Without such re-programming, our semi-mindless machine continues to grind its way towards the cliff.

Here is what one Common Dreamer has to say about it:

We have to face the fact that we are a species that has, in the words of Wes Jackson, gotten very good at exploiting the energy-rich carbon in this world’s soils, forests, and fossil fuels to enrich ourselves at the expense of others. That’s part of human nature. Now we have to do what no other species has had to do -- self-consciously practice restraint at what we do best in such bad ways. That is no small task, but our ability to name that task and imagine accomplishing it also is part of human nature.


happened to run across this example of what others think about our lunatic theories:

9. I first heard about this [Peak Oil stuff] a few years ago and thought the person informing me had lost his mind or was reading National Inquirer under the bed covers at night. Anyway the latest theory (from findings in the gulf) is that the earth is making oil faster than we can consume it. In the Gulf of Mexico, old depleted wells are refilling from the bottom up as opposed to from the sides (like from another well). In the past it was thought that all oil was organic (old dinos), so it was surmised that the supply is finite. After all, how many old, dead dinosaurs are there? This latest phenomenon is reasoned to be oil made from methane deep in the earth's crust that is changed to oil as it moves up though the crust under tremendous pressure. As it moved up, organic compounds were mixed in fooling scientists into thinking it was organically created oil. But that wasn't the case. Once they realized that the organics were not part of the methane created oil they had to re-think. Lately, they have been finding new strikes by dragging an undersea sled, sniffing for methane.

There is no accurate way to judge how much methane made oil is in/under the earth's crust but there is thought to be quite a bit as methane is the (if I remember correctly) most common gas in the universe.

So whatever the doomsayers may say, there seems to be plenty of oil and there will be for quite some time. The enviro-wackos and the politics of letting us get to it is the bigger question.

That is a perfect pic for the author of that gibberish.

I bet he tucked himself in and slept well after his little "discovery."

Ignorance is bliss.


My intent was not to poke fun at the author, but to point out that there are intelligent beings out there who store knowledge bases very different than ours and thus believe in conclusions that are also quite different than ours.

It's a Tower of Babel.

Some more authors and points of view:

Malthus was wrong --GEOFFREY CARR, Science Editor, The Economist

Purity of Pure Science--PIET HUT, Professor of Astrophysics, Institute for Advanced Study

Ability of Humankind To Do the Right Things-- HAIM HARARI, Physicist, former President, Weizmann Institute of Science

Our Ability As a Species to Respond To the Challenge Presented By Peak Oil-- BRIAN GOODWIN, Biologist, Schumacher College, Devon, UK; Author

I'm Confident About Energy, ...--RAY KURZWEIL, Inventor and Technologist; Author, The Singularity

It can't be helped. The brain I was born with contains a fearful and easilly "terrorized" lizard section. It contains a "go along to get along" sheepish section. And the tiny part left over, the part that believes itself to be "rational" and "knowledgeable" is constantly contriving new fantasies about how the inevitable "it" won't happen and how technology or some other fanciful thing will come to the rescue at the moment of need.

I've read Domasio and take that as a general echo of his theme. I also think that Domasio and others acknowledge the healthy mind's ability to rise above such stuff, with effort.

"I also think that Domasio and others acknowledge the healthy mind's ability to rise above such stuff, with effort"

You also "think" ???

And I bet you "think" your mind is "healthy" too. And maybe you even think you are some sort of goddess who is above "such stuff."

Your thoughts and behavior are limited to whatever your neuroanatomy, neurochemistry and your environment dictate at any given moment.

Maybe you should supplement your limbic system's endocannabinoids and then read some more on the subject.

Your thoughts and behavior are limited to whatever your neuroanatomy, neurochemistry and your environment dictate at any given moment.

Nah! odograph's "thoughts" are limited by his employer/customer...

I do the best I can, with my bounded rationality, but I think knowing I am bounded changes my outlook a bit.

Does this get you closer to proving a case for the niche-doom-belief?

If we are all flawed, does that prove that some subset of flawed people can be sure of their projected future?

Or is this really a case for humility in face of the future?

Here is one piece I recently found at The Edge concerning "free will" [bracketed text added]:

(The motivation for understanding this springs from the question: Why do their eyes glaze over when you tell them / warn them about Peak Oil?)

Conscious self-modulation of behavior is a spectrum. [However until recently ...] We have treated it as a single property — you are either capable of [an undifferentiated amount of] free will, or [not because under criminal law you are legally insane, in other words,] you fall into an exceptional category — [This was so] because we could not identify, measure, or manipulate the various components that go into such self-modulation. Those days are now ending, and everyone from advertisers to political consultants increasingly understands, in voluminous biological detail, how to manipulate consciousness in ways that weaken our notion of free will.

In the coming decades, our concept of free will, based as it is on ignorance of its actual mechanisms, will be destroyed by what we learn about the actual workings of the brain. We can wait for that collision, and decide what to do then, or we can begin thinking through what sort of legal, political, and economic systems we need in a world where our old conception of free will is rendered inoperable.

Ye Gods step back ... I know you addressed the other end of the question above as well, but the question:

Why do their eyes glaze over when you tell them / warn them about Peak Oil?

can certainly be reversed to:

Why did I just tell them / warn them about Peak Oil?

There is no particular reason that Peak Oil folks are off the hook, though many, many, past threads in Peak Oil imply that. There is an assumption that Peak Oilers are "beyond" their programming, and those who are "delusional" or "in denial" are not.

I mean think about it, if "acceptance" may not be driven by "free will," what does that say about your or my past acceptance? and the acceptance from which we "tell them / warn them?"

Ah God odo,

That's why I keep saying, "I am sheeple".
I am no different than the rest in many ways.
There is no clear way to know if we at TOD are the ones who are part of a cult, that we are the ones who have been fooled, that we are delusional and that the Hubbert's curve data is all fake.

On a deeper note, I'm questioning whether it even makes sense to "warn" others about the danger of Peak Oil.

After all, in the Valley of the Deaf, who indeed do the bells toll for?

And even if they hear, it is possible that they have no "free will" in regard to their response?

Maybe the only response programmed into their heads is:
1. The Market will provide,
2. Technology will save us,
3. We'll muddle through it as always.

Maybe that "glazed eye" look is an indication that their processors have reached the outer limits of their programming?

In terms of "keeping it simple" Hubbert's curve might do that. It is a fairly simple predictive model about oil production, and it has worked in the past. People argue about how often it worked, but I let that fly by.

I think Hubbert, and obvious trends in current production (producers "fleeing" to oil sands and deep off-shore), are direct causes for concern. They don't need, in my mind, to extend into far and uncertain futures in order to be a cause for action.

So, see a problem, make a case, try to get some action. That's the route I like.

I don't like distractions about those far and uncertain futures. And, as it happens, far uncertain stories of doom distract me more than they motivate me.

As you can clearly see from my past distraction log at www.theoildrom.com

BTW, after writing that I happened to read another Edge essay, this one about getting beyond our own minds, so to speak:


Thanks for the link.
They were just showing the Stanford Prison Experiment on TV (on DateLine) the other night and questioing the right of society to punish people (i.e. US soldiers who commit war crimes) when the defense is "I was doing what I was ordered to do" --just like Nazi war crime defendants expalined at Nuremberg. But his time "it's different" because it's "our" boys in uniform who are being accused and not "their" boys. We're special. --Zimbardo's explanation: "the barrel had soured and was corrupting even [the] good apples"

Taleb’s piece is pure puff. (Though there may, as usual, some nuggets of wisdom, some correct facts, scattered about.) He makes an implicit comparison between evolution and the US ‘can-do’ (for short) attitude, which is nonsense.

Somebody in another country with the same kind of spin might say that the Iraqi insurgents will win, because they have several wars behind them, and they are tough, valiant, determined, smart, willing to sacrifice this or that...winning might event be in their genes !

He reinforces popular stereotypes, always good for readership. Europeans are full of shit because they judge Americans negatively, which is true in a way of course, but completely irrelevant. It is up to Americans to judge the US education system in function of their culture and goals, and to act on that.

Forays into medecine are typical of these kind of pandering pieces, as people are ignorant in that field, and relate personally to it in some way.

Of course tinkerers are great. Everyone loves them. Let them have a look in!

Err, not in the US in the last 10 or more years. Afaik.

You might read John Robb on Open Source Warfare, and compare and contrast to Taleb's piece on the random accumulation of knowledge.

Cure for the heavy head cold. Drink hot water with lemon juice, honey and wiskey added. May not actually help remove the cold but does make one feel better.

What a good thought - a hot toddy it is, at bedtime.


The second half of 2006 was incredibly benign for oil supply: no hurricane disruption, minimal other disruption apart from Nigeria. Oil ended 2006 within a handful of cents of its end 2005 price but remember: it closed 2004 at below $45, over $15 lower than now and the price in 2006 never dipped below $55. Barring a major economic depression and / or a financial earthquake we won't be seeing oil below $50 in 2007 or any time in the foreseeable future.

The odds of 2007 being as benign are low, probably below 50%. The weather conditions that made the 2006 hurricane season so mild for the USA were relatively freakish, there's probably as much chance of 2007 being that mild as there is that it will be as bad as 2005. Iraq and the middle east are less stable now than a year ago. Putin is due to end his term in 2008, things could get a mite interesting as that time nears.

I expect data in 2007 to show FIP decline rates rather higher than most forecasters have heretofore presumed. The bursts of investment and drilling inspired by increasing oil prices over the last 8 years (it almost touched $10 in December 1998) have probably given us a window over the last couple of years and possibly the next year or two when supply gets its last significant boost. I don't think the supply situation will get significantly better than it is right now, I see no concrete evidence for hoping that new production 3 years hence and beyond will be sufficient to fully compensate for existing FIP declines.

I think that the UK North Sea will provide a useful model for what we are likely to see globally - and fortunately there is good public data on it, Euan's excellent analysis about a month ago does not paint an optimistic picture.

Oil will probably trade in the $55 to $70 range during 2007 except when supply disruptions push it higher. Those disruption highs will probably be in the $80 to $100 range. Gold, silver, wheat and several other soft commodities are likely to make significant price gains - much will depend on how the US$ fares, I expect that to trade in the 78% to 86% range of its trade weighed index (currently it's at about 83.5%) and end 2007 very close to 78%. Copper may decline by 25%

I can predict with certainty a very big story in 2007: the IPCC (International Panel on Climate Change) are due to release their 4th report, their last was released in 2001, the coming one is going to be much scarier. I expect very major political action as a result, including from the current US administration, panic might not be too strong a word, "The Greening of Bush" will be a headline.

A related bugbear of mine: many folks in the US seem to use tumble driers rather than clothes' lines for drying clothes. I've even heard that some neighbourhoods have bye-laws restricting the 'unsightly' use of clothes' lines. This is just plain daft for most of the year unless you live in an apartment with no access to outside space, STOP IT! NOW!

And while you are at it start recycling - in a month of wandering in the US mid west in 2003 I saw no, yep, zero, facilities for recycling glass, cans, paper, plastics. Did you know that Germans recycle over 50% of their household refuse? even us lazy brits manage over 20% nowadays, I think.

I expect US house prices to continue down for perhaps another year or so, probably a further 25% average price decline. The consequent slowing of US and global economy will likely cause a decline in house prices in UK where I live. I am going to sell my house and become a nomad, visiting various intentional communities, learning and teaching skills.

Echinacea (Purple Coneflower, a herbal immune system booster) if taken at onset of a cold, flu or similar relatively mild viral infection, has been shown in decent clinical trials to reduce the typical duration of a cold from 7 days to 4 days. It probably won't make much difference if you start taking it 2 or 3 days after the cold has started. Note that you should not take echinacea for prolonged periods of time, I suggest 2 weeks maximum, certainly no more than 4 weeks.

Hi Agric,

Happy Travels. re: Recycling...If you wander to the US Central Coast, these guys are popular; I don't know how difficult it might be for others to follow suit:

Thanks Aniya, recyling in EU countries is mainly government / municipal authority driven, how does it work in USA?

In Germany there have been recycling points within about 5 minutes walk of most people in urban areas for years. We've had that more sparsely in UK for more than a decade but nowadays most UK municipalities collect most recyclables (paper, glass, metal, plastic) as a seperate part of the refuse collection - as those in your link seem to. It's been given another kick recently by EU directives which limit the amount of refuse that can go to landfill sites and by a UK landfill tax that was introduced a few years back. Perhaps a tax on refuse put in landfill might be a way to encourage it in USA?