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DrumBeat: January 12, 2007
Posted by threadbot on January 12, 2007 - 10:05am
Assuming, for simplicity's sake, that the world reached its peak oil production back in 2005, that would mean that by 2025 there would be as much oil produced as there was in 1985. Fine, there was a lot of oil for the world in 1985. Only there's a slight hitch.By 2025, the world's demand for oil is going to be 60% greater than it is today, while production capacity is thrown back to 1985 levels. This is due to the world's rapidly growing population and increasing industrialization. China's annual oil consumption growth rate of 7.5% and India's of 5.5% are both expected to take a quantum leap over the next decade.
U.S. Boosts Iraq Force; Allies Pare Down (AP)
Is a Candu really the answer for Alberta's oilsands?
At first blush it seems like a pretty incongruous idea — to plunk a honking big nuclear reactor in the very heart of Alberta's oil patch, to help steam the raw bitumen from the thick tar sands.But as of this week, there are two serious oilsands players — Husky Energy Inc. and Total SA of France — who are publicly mulling the nuclear option. As well, four others, according to the biggest proponent of the plan, are quietly thinking about it.
Confronting our addiction to oil
There is a growing consensus amongst geologists that global oil production has either already peaked, or it will within the next few years. The most optimistic forecasts predict the peak to occur absolutely no later than 2035. Thereafter, even if industrial societies begin to switch to alternative energy sources, we will have less net energy each year to do all the work essential to the survival of complex societies. We are entering a new era, as different from the industrial era as the latter was from medieval times.
Justice, Farms and Victory Gardens
In the years immediately before the industrial revolution, it took 6 farming households to support one single doctor, teacher, lawyer or artist and her household.
John Michael Greer: This faith in progress
We have our heaven and our Golden Age, too, but unlike most other cultures we put ours in the future, and tell ourselves that we’re moving closer to Paradise with every day that passes. Other cultures put their faith in gods or stars or cosmic cycles; we put ours in progress.
Independence from the Corporate Global Economy
But what's the alternative? We're taught that there are only two possible economic choices: capitalism—a system in which rich people and corporations have the power, make the decisions, and control our lives; or communism—a system where state bureaucrats have the power, make the decisions, and control our lives. What a choice!When it comes to real economic alternatives, our imaginations are stuck. Clearly, we need something different, but what would it look like? How do we start to imagine and create other ways of meeting our economic needs?
Jan Lundberg: The Only Hope Is Unity
When people unite to fight a great, imminent threat, as I predict we will, as events and developments accelerate, there will be rapid progress towards addressing problems. This may occur concurrently with desperate and antisocial behavior especially as fuel and food shortages strike. The climate's active distortion seems about to painfully kick many more people "upside the head like a two-by-four," as Julia Butterfly characterized the common stubbornness to overdue change.
Stratfor: Global Market Brief: Europe's Long-Term Energy Proposal
The European Commission on Jan. 10 issued a set of proposals aimed at mitigating Europe's long-standing reliance on third-parties, especially Russia, for energy supplies. The plan, to be presented to all 27 member countries at the EU summit in March, focuses on heightening cross-border cooperation and reducing Europe's dependence on oil and natural gas.
To pre-empt an energy cut-off by Russia, Europeans need to make huge investments to build new supply lines, reserve supplies and distribution channels.That would mean a gigantic diversion of money and resources from social sector development programs. Though Europeans have a genuinely hard choice in hand, they have to act quickly.
Chile Protest Dams In Coyaique
The main justification for the dams is their promise to free Chile from dependence on Argentine natural gas and alleviate the current “energy crisis.”However, as of March 2006, domestic consumption accounts for only 15 percent of national energy, use while industrial use accounts for more than 60 percent. According to ENDESA’s justification statement in 2005, Chile’s demand for electricity will double in ten years and triple in twenty, mainly due to proposed mining projects between 2008-2017. The fact that they mentioned such growth in their original proposal indicates to the Coalition that budding mining projects like that in Pascua Lama are the designed recipients of the dams 2,400 MW, not Chilean households.
No Progress in South Korean Talks on Kidnapped Workers' Release in Nigeria
Officials of a South Korean construction company began negotiating terms Thursday [11 January] for the release of the company's nine South Korean employees who were abducted a day earlier in Nigeria by a group of armed insurgents, but the initial contact ended shortly without any progress, a Foreign Ministry official said. The kidnapped workers remained safe, according to the official. But the official refused to reveal the kidnappers' demands, citing safety concerns.
Analysts: Nigeria May Be Hot Spot For Terrorism in West Africa
While current U.S. military attention is focused on removing possible al-Qaida cells in Somalia, some analysts say terrorist threats from other parts of Africa should also be closely monitored. They say Nigeria's violence-wracked, oil-rich Niger Delta could become a new theater for terrorism.
Energy crunch looms as southern Africa economies boom
JOHANNESBURG - Home to some of Africa's fastest growing economies, southern Africa is on the cusp of an energy crisis that threatens to clip industrial growth and stymie plans to deliver electricity to millions without.Power utilities throughout the region are struggling to cope with increasingly frequent blackouts that are hampering operations at factories and mines and darkening homes in cities stretching from Cape Town to Kinshasa.
Jordan: Ship laden with 5,700 tonnes of LPG docks at Aqaba Port
The Jordan Petroleum Refinery Company (JPRC) on Thursday said the crisis over a shortage of liquefied petroleum gas (LPG) during the past few weeks is over now, following the arrival of an Egyptian ship laden with 5,700 tonnes of LPG from Saudi Aramco....The recent shortage of gas cylinders that led to a nationwide crisis was attributed to the JPRC's low production levels and a sharp increase in demand as a result of two cold fronts with heavy rain and snowfall, which closed roads in the southern part of the country and prevented trucks from reaching the capital.
Albania: Prime Minister Berisha blames KESH and ERE for the energy crisis
Prime Minister Sali Berisha put the blame yesterday on KESH - the Albanian Power Corporation (APC) and the Energy Regulatory Entity (ERE) for the recent increased power cuts.
Chevron, Statoil Exposed to Venezuela Push to Control Gas
In 2003, Statoil and Chevron Corp. took advantage of business-friendly natural gas laws to launch multi-billion-dollar offshore projects in Venezuela's Atlantic waters.Four years later, President Hugo Chavez is changing the rules, demanding majority control of projects they expected to operate themselves. Venezuela hopes to begin exporting natural gas before the end of the decade, but the contract uncertainty will likely slow the development of existing projects and push new licensing rounds off corporate radar screens.
Gartner Urges IT and Business Leaders to Wake up to IT's Energy Crisis
Organisations are under mounting pressure to develop ‘greener’ approaches towards their information technology (IT) practices, and IT and business leaders need to wake up to the issues of spiralling energy consumption and environmental legislation, according to Gartner, Inc. Although technology can help reduce the impact of some environmental problems, its potential harmful effect is receiving increasing attention from environmentalists and policy makers alike.
Energy Costs: 'If You Don't Manage It, It Will Manage You'
As with taxes, everyone seems to complain about "the energy crisis," but no one seems to do anything about it.
Saudi Arabia: Institute Planned to Build Energy Cadre
The institute will meet the growing demand for the right workforce in this vital sector. Abdullah Jumah, the CEO of Saudi Aramco, has said that the global oil industry was now reaping a poor harvest from the shortsighted human resource policies of the past.
2007: Renewable Energy Gets Real, Part One
First and foremost, I think it’s clear that 2007 is the year when renewable energy finally gets real. That is, it will make sense as an investment just on the return alone, no matter what your politics or your view on climate change may be. This tipping point for RE has been awaited for so long that the veterans in the wind and solar businesses (especially) have grown gray and wrinkled, waiting at the altar with a handful of long-dried brown flowers while their beards grew to the floor. But no more. This is it, baby!
Mr Sarich became a household name in the 1970s when he invented his orbital engine, which was 40 per cent lighter, 60per cent smaller and 35 per cent more efficient than standard car engines.Why it never took off in cars remains in dispute, but the sophisticated fuel-injection and combustion system was developed for use in two-stroke engines and is used today in boat engines, motorbikes, lawnmowers and some small cars.
Jerome Corsi: A 'Switch Grass' Energy Solution?
“Why do people only believe bad news about energy?” This question was often posed by Julian Simon, a now deceased University of Maryland professor of business administration, who had the courage to argue that “peak” theories about energy resources are typically hoaxes.Unfortunately, President Bush appears to be a “peak oil” believer who has a strong predisposition that using carbon fuels is somehow bad.
Ali Samsam Bakhtiari: Will crude slip further?
One of the sure signs that we have passed peak oil in 2006 is the price during the summer, which is 50% higher than it was during the winter.
Top oil exporter Saudi Arabia will deepen crude supply curbs to Asian refiners next month to comply with Opec's second output cut, industry sources said yesterday, but the news failed to stem a sharp slide in prices.
So why, against all this background, is the US so bent on attacking Iran? Two considerations are probably decisive. One is that President Bush clearly sees his role in the Middle East in messianic terms and will not let does-not-make-sense arguments stand in the way of what he regards as his manifest destiny. The other is oil. Iran holds the world's largest supplies of oil after Saudi Arabia and Iraq, and holds more oil and gas combined than any other country on the planet. As Peak Oil rapidly approaches, the US demand to control the lion's share of what is left - pitifully short-sighted though such a policy is - is now the dominant driving geopolitical force in world politics today.
The Great Emergency: Global Warming, Mass Death and Resource Wars in the 21st Century
The feel good approach Gore pushes is dead wrong: Economic growth and saving life on Earth are not compatible goals. Industrial civilization isn’t harming the Earth, it’s killing the Earth. The system has long since passed the limits of growth - it can’t be sustained.
Resident to discuss Peak Oil at conference
Bill and Sydney Blackwell, founders of Harvard Local, have been working to create community awareness of issues related to fossil fuel depletion, as predicted by Richard Heinberg and other leading experts on the subject.
BEIJING -- China imported 14.5% more crude oil last year than in 2005, and imports are likely to continue growing in the double-digits in 2007 as the country's economy shows no sign of slowing down and more of its strategic petroleum-reserve tanks become ready for use.The data and expectations of continued demand growth add to the worries of global energy and security experts who believe China's growing need for foreign oil to supplement stagnant domestic output is contributing to an unsustainable global energy future.
Exxon cuts ties to global warming skeptics
NEW YORK - Oil major Exxon Mobil Corp. is engaging in industry talks on possible U.S. greenhouse gas emissions regulations and has stopped funding groups skeptical of global warming claims — a move experts said could indicate a change in stance from the long-time foe of limits on heat-trapping gases.
California plans major carbon cut in its gasoline
ow that California is on record as mandating a 25 percent cut in the state's greenhouse-gas emissions by 2020 - a move that made headlines worldwide four months ago - leaders here are starting to lay out how they intend to hit that ambitious mark. First up: requiring transportation fuels sold in California to contain less carbon, a major greenhouse gas.
Tories push for 80% carbon emissions cut
The Government may be forced by MPs to adopt tougher targets to reduce carbon emissions in order to step up its fight against climate change.
Kyoto Protocol: France trims carbon pollution in 2005
Congress to reconsider caps on carbon
WASHINGTON - Potential presidential rivals John McCain and Barack Obama are joining with newly independent Sen. Joe Lieberman on a plan they say would reduce annual global-warming gases by two-thirds by mid-century.
Europe's oil shock ... and opportunity
Strongmen make weak partners, as Europe had to learn again this week. For the second time in a year, Russian leader Vladimir Putin cut off fuel exports to the Continent in a money dispute with a former Soviet satellite that is a pipeline transit state. This is not Europe's idea of energy security or of trusted neighbors.
Fears of superhigh-priced oil, including petroleum reaching $100 a barrel, are receding, at least for now, as crude's cost continues to plunge.
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Looking at Total Imports
If you go to: Weekly Petroleum Status Report Then click on 8 U.S. Imports of Crude Oil and Petroleum Products “XLS”, This brings up an Excel spreadsheet of the data. Here you can get the weekly import data of crude oil all the way back to August of 1982 though Total Imports only go back to 1991.
The first thing you may notice is that as US production has dropped and US consumption has increased over the years, total imports have gradually increased over the years. They were around 7 million barrels per day in early 1991 and passed 14 million barrels per day this past summer. They are hovering around 12.7 million barrels per day right now.
You can copy and paste this data into your own spreadsheet. I did and charted it. The weekly data jumps around so fast only a general trend can be discerned. However you can do a 10 week moving average and get a much better picture of what is happening. A 10 week moving average shows total imports at the lowest point in over two and one half years. You must go back to May of 2004 before the 10 week average of total imports were lower than today.
The data also includes Net Imports, That is imports minus exports. When you do that you must go back another two months, to March 2004 before you hit a lower point than today for the ten week moving average.
One more point, If you go to This Week in Petroleum you will see that crude oil inventories this past week are exactly 4 million barrels below the same week last year and are at their lowest point in over a year.
Right now inventories are sitting at 314.7 million barrels. At this point last year we were at 318.7 million barrels and that was just before inventories began their meteoric rise that eventually topped out at 347 million barrels in June. I am betting that in June of 2007 we will be well below 300 million barrels, in the lower part of the five year range if not below it.
Ron Patterson
Darwin: Thanks for all the work. It is my understanding that 270 million is pretty well the absolute minimum before supply problems arise so it should be interesting.
Long time lurker, first time caller.
Thanks for the info on the inventory status, Ron. I have a question that I'm having a hard time wrapping my admittedly non-technical mind around, and I was wondering if you could help conceptualize it for me (anyone else is welcome to do so, as well!): why, in the face of this kind of news, has the average gasoline price in my area (mid-central Indiana) dropped to $1.99/gal for the first time in a long, long time?
I do not ask this with any facetious sense at all; I'm trying to understand the relationship between the global oil status and what it means to the average consumer (ie. me). Where is the market response to the observable plateau in production upon which we are currently sitting?
Anticipatory thanks, by the way...!
Quijohn, welcome to the Oil Drum!
The answer to your question-who knows? If oil prices followed some type of logic that I could discern, I'd be very rich.
why, in the face of this kind of news, has the average gasoline price in my area (mid-central Indiana) dropped to $1.99/gal for the first time in a long, long time?
Product inventories are high and have been climbing. If the trend continues, the price will keep falling. Margins have been eroding, so I expect to see some of the excess removed by refiners slowing down a bit. But gasoline inventories are near the top of the range for this time of year, and have been climbing steadily. That indicates that lower prices and/or reduced refinery runs are on the way.
You've also hit on a point that isn't always clear in TOD.
1. we have (a pretty) good idea of world demand
2. we have a (somewhat good) idea of world inventories
3. world supply we have a poor fix on (because there are incentives out there to lie eg Iraq exports a lot of oil as 'smuggling' which is not recorded and also OPEC countries cheat on their quotas etc)
4. we have no good picture of reserves for at least half the world (see Twilight in the Desert by Matt Simmons re Saudi Reserve data, or any of the powerpoints on the Simmons & Co. website)
Demand +/- changes in inventory = Supply
So supply always equals demand. The way the 2 are made to come together at one point is *price*.
If we were at peak oil *now*, then given that demand is still rising, price would be shooting through the roof. It will do that because demand for oil is quite inelastic to price (2/3rds of oil use is in transportation, and it's not easy for the global economy to give up transporting things and people) and supply of oil is also quite inelastic to price (you have to find oil to produce more of it, and that takes time).
Now (4) tells us we don't know when Peak Oil will come. It could be tomorrow morning.
We can observe price, and price is not shooting up. Given that oil demand is apparently still rising, oil inventories are not plunging, we are not at peak oil.
Value, oil demand is not nearley as inelastic as you seem to think. Methinks you are comparing the US with the rest of the world and assuming they are very much alike. That is far from the truth. Many small countries that use crude or diesel for power generation is cutting back drastically. Blackouts are increasing dramatically in all third world countries. Everywhere lower income people are consuming less and less.
Bottom line, with the recent OPEC cuts the world is producing about one million barrels per day less than it was in the summer of 2005. And of course we are consuming about one million barrels per day less. Though consumption was not dramatically affected by the rise in the price of oil in 05, the high cost of oil has finally started to squeeze the consuming public, especially in the undeveloped world.
Theories count for nothing Value, if the the data tells a different story. As Matt Simmons is fond of saying; "Data trumps all theories." And so far the data tells us that we are at peak right now. We have been on the plateau for about two years. You just cannot argue with the data, though some people foolishly try to do that.
Ron Patterson
And so far the data tells us that we are at peak right now.
Of course used in that way, the data would have told us several times in the past we were at peak.
Data is subject to interpretation. Oil production goes flat or declines for other reasons than a production peak, as has been witnessed multiple times in the past.
Robert, with all due respect, I did say so far!
Now having said that, I think it is extremely foolish to declare, as Value did, that we are definitely not at peak because of the price of oil. The world has, without a doubt, produced less oil in 2006 than in 2005. Looking at that fact alone I think it is extremly foolish to say that we cannot be at peak because of the price of oil.
And just one more very important point! Before the OPEC cuts went into effect on October 1st, we were already below 2005 levels of production. A plateau of two years along with a slight drop in production, has never before in the history of the world happened except in the case of OPEC deliberately cutting production, Iran-Iraq war and the following tanker wars, or the collapse of the Soviet Union causing a cut in production.
I get so damn tired of people pointing to past drops in world oil production without giving us the cause of these drops! This time, before November 1st of 2006, that a plateau of two years and a drop happened while all the world was producing flat out. This has never happened before and that fact should simply should not be overlooked.
Ron Patterson
This time, before November 1st of 2006, that a plateau of two years and a drop happened while all the world was producing flat out.
That last portion, though, is not a fact. It is your opinion. In fact, "all the world" certainly wasn't producing flat out, as I have argued before. Canada was not producing flat out. But even in the Middle East, Saudi had already made the statement that they were having trouble finding buyers. They had already made cuts. You simply choose to believe that they were lying about the statement they made.
Ad the Saudis not having buyers for their oil in June 2006, when NYMEX light sweet was 70 $/b plus.
In 2006 if Aramco - like CERA and others - believed that the price of oil soon (within a year or two) would fall, then how come they didn't lower the price a little?
It has been argued (Robert) that an eventual bluff easily could be nuked by someone simply buying oil from the Saudis. IMO, this is not an evidence for spare production capacity. We all believe the Saudis have tank farms, don't we?
An explanation to my question could be ECONish, that maximizing the profit means producing less than 100%. Personally i don't think the Saudis are free to produce less. Such behaviour would not be tolerated by Uncle Sam, which i think has lot of tools to utilize when exercising power. But this of course, is just an opinion. I'm sure there are knowledgeable generalists, like Sailorman and others, that has a more qualified say on this than I.
I just watched "Lawrence of Arabia" again. Anybody who thinks Arabs are likely to act in their long-term best interests should watch that movie.
Can the Saudis restrict output to boost prices and hence revenues? Heck yes they can; Uncle Sam does not get to peek at their books (which assumes, BTW, that the Saudis know how much they are producing--highly questionable IMO).
So what are the Saudis doing?
1. Nobody knows.
2. That probably includes the Saudis. Why assume that they know what their production capacity is--not to mention their reserves?
It is always a great mistake in human affairs to assume that the other guy knows what he is doing.
Am I missing something here? You are being ironic?
I assume that Aramco has a functional hierarchy, reporting oil output to the top dogs, wouldn't you?
US knowledge of KSA internal affairs?
There is quite a few Saudis with cultural links to US; education, business et cetera. I can easily imagine Uncle Sam having many informants in KSA. But of course, it's just unqualified speculations. I know very little about KSA.
Here in Norway, US knowledge of internal affairs caused big headlines recently. Prior to the invasion of Iraq, the inner circle of the cabinet had secret discussions. The former prime minister, Kjell Magne Bondevik, revealed in his biography that the ambassador in Washington, Mr. Vollebæk, got those discussions referred in a meeting with the state department. It was the state department who initiated the meeting.
The secret discussion was limited to a group of five ministers (prime, finance, foreign, defence and justice) and their apparatus.
So, either the US is exercising technical surveillance on Norway's "white house", or they had a mold inside the apparatus of the inner cabinet. At least, that is my interpretation of that event.
I was not being ironic. Norway is not KSA. Norwegians have been counting accurately every single herring they have caught for the past thousand years.
The people I have reason to believe who know the most about KSA oil production claim to know the least. (Those with claims of knowledge about Saudi production and reserves have no consensus nor any strong claim to such knowledge.)
My position on KSA is based almost entirely on Matt Simmons, "Twighlight in the Desert."
Well said. You seem to have a talent for summing it all up in one sentence. You should write books. We should all spend less time reading Westexas and more time letting you shake the fuzzy dice.
First of all, thanks to all of the thoughtful responses.
Now, as to this:
Regarding our current inventory level, which as Robert pointed out:
...is it that our inventories are filling up at the expense of these Third World countries? Is there any data to support decreased consumption/demand in these countries? It makes a modicum of sense that if these countries have indeed "bowed out" of the oil bidding for the time being, the increase in supply would result in a lower cost, which (if I understand you all correctly) could very well explain why the inventories have been climbing (ie. "buy it while it's down and store it for when it isn't").
But if that isn't the explanation, what other things could be responsible for the current mix of low price points & high inventories, again, when viewed in light of the plateau that I see time and again by the many impressive graphs around here? :)
Again, I apologize if any of this seems pedantic or redundant. I'm just trying to research this and come up with responses to potential questions about PO - it's hard to convince somebody to that PO should be a concern when the gas pumps don't reflect it. It's the old "Who do you believe? Me or your lying eyes?" issue.
Well, for starters our inventories are not filling up. While it is true that gasoline and distillate inventories are up, crude inventories are down by a greater amount. All in all, inventories are down.
The power and gasoline problems in developing countries has been in the news frequently lately. And they always give the high price of oil as the problem. That being said however, developed countries are cutting their consumption also.
OECD demand for 2005 49,601,000 barrels per day.
OECD demand for 2006 48,923,000 barrels per day. (First 9 months avg.)
http://www.eia.doe.gov/emeu/ipsr/t17.xls
There is all the proof you need. High prices are pushing demand down everywhere. And inventories are decreasing, not increasing. Inventory days of supply for OECD nations were at the top of their range during the third quarter of 2006, dropped to near the middle of the range at the end of the fourth quarter and are expected to drop to the bottom of the range in 2007.
http://www.eia.doe.gov/emeu/steo/pub/contents.html
Ron Patterson
North American demand dropped 0.064-mbd in 2006, while Asian demand grew 0.339-mbd. And non-oecd natins were just part of it. Latin American grew demand by 0.109-mbd. In all, global demand grew by 0.91-mbd in 2006, almost all that coming from non-OPEC producting nations. There is much disinformation at TOD.
Have prices since my inventory warning last year reflected my reporting of events and facts or that of the Peaksters?
There are also many reasons why consumption of oil might drop besides the price of oil, i.e. general economic slowdown because of multiple reasons, some probably energy-related, many more strictly economy related (falling housing market, etc).
It seems to me that the global crude oil market is so huge that a few fractions of percent of drop in consumption over a critical mass of consuming economies can cause high volatility in prices. In other words, there is a huge amount of 'slop' in the markets in terms of trading prices and anticipations of supply/demand, even while there may not be this 'slop' in terms of actual supply. IMO we could go several years beyond peak before the 'noise' in the economy, including possibility of deep recession, will give away to clear trendlines indicating economic realization of the peak.
This is why (if it wasn't clear already :) I think WT and RR could be both essentially correct, just looking at the situation in different lights.
I believe "price" in an open/free marketplace would be a good indicator in this situation. I am not convinced crude oil prices are set in an open/free marketplace. If there is any manipulation going on, then the price will never be a good indicator.
The Global Distribution Map i posted this week (http://trendlines.ca/energy.htm#misc) shows that every barrel not taken up by usa & europe went to non-oecd nations. There are a few TOD dieoff fans like Ron et al that want us to believe there was extreme hardship around the world last year due to high prices. Anecdotal and out of proportion.
We now know that the price spike in 2006 was artificial. The 1.7-mbd in surplus supply went to inventories. The demand destruction in the West went to asia. This is not rocket science.
Exports compared to a year ago are bunk. The global export/import patterns were skewed by the Gulf Hurricanes. Tankers were diverted. Now all is back to normal. In 2006, the usa produced within 40-kbd of 2005 volume. In 2006, usa nat'l gas production exceeded 2005 by 2.9% and TEOTWAWKI did not happen despite all the forecasts by some of the TOD pundits from the lunatic fringe.
Please mister Hutter, be more polite.
Tell me, why do you bother to read and post at TOD, which obviously is a peak oil freak show?
Is "debunking" Ron and others your idea of public service, being useful for the community? It would be better if you spent your energy on expanding on the ideas here, and of course exercise your intellect to criticise. IMO most of your posts are not honest criticism. It's mainly rhetorics and a strong bias without acknowledging others views, certainly not a quest for reality and truth.
Freddy is usually full of it, but in this case he is even more full of crap. No one is comparing the entire year Freddy, I was using a 10 week moving average. What about the eight months before the hurricanes?
What about the first 9 months of 2006? Why are total imports, using a 10 week moving average, lower now than any time in the last 31 months? Did hurricanes skew the production for two and one half years, when about half those months were before the hurricanes?
I was using a 10 week moving average and comparing it with every other 10 week average over two and one half years.
Sometimes Freddy, you just open your mouth and stick your foot all the way down your throat.
Ron Patterson
Nobody really cares about your ten-week avg, ronny. I sure don't. It indicates dick all. And i have never commented about your academic exercise; so i don't know why u are on a tirade.
Jeffrey is the Poster claiming that Exports today compared to a year ago (hurricane episode) is relevant. And i addressed that ridiculous comparison. That's all.
He is clearly wrong. And u are lost in space.
But don't let me stop u from taking a moment to explain to us why we should care that exports in Q4 down from 2004 should concern us...
Over the last nine months there have been several issues wrt inventory, non-OPEC supply growth, OPEC quota reductions & usa Demand destruction that i have addressed since October. All my statements and suppositions are backed by posted graphs and stats (some of which are still posted at http://www.trendlines.ca/energy.htm#misc
OTOH, u and Jeffrey are involved in alotta hokus pokus rhetoric mixed with baseless claims of decay in KSA, Russia, etc etc.
My explanations follow the price movement and geopolitical action impecably. Yours takes a leap of faith worthy of a fundamentalist religious zealot.
I am content to watch the world and event unfold as they should. U and westexas are eating up our bandwidth with your daily repetitive bund as if saying it a hundred times will finally convince us via some sort of fatigue factor.
Oil futures fell another five bucks this week. WT and u lost much more than that in credibility...
Peaksters defended the post Iraq2 price hikes as proof of Peak. Now that they recede, it's supposedly just a correction. Yup.
I have defended $50 contract prices as the equilibrium price for 18 months. I warned that there was a fear component and surplus capacity issues and thus prices could not sustain their recessionary heights.
Folks can believe your off-the-wall rants or my data supported outlines. Since 2003, your luv affair with EIA stats has made u look foolish in your retractions and false accusations. My IEA figures have been consistent in both forecasting upcoming events that i have posted and explaining past trends.
Do you have no shame, Fraudy, to be back here lying when I just showed that you can't even report accurately the weather in your own town?
today we learn that the lunatic fringe no longer takes the weekend off...
If oil is like other markets, the price is determined at the margin. If there is one extra barrel of oil with no buyers the price will fall to find a buyer. Likewise if there is a buyer for one barrel of oil and no sellers, the price will rise to find a seller. This is why commodities are so volatile. The actual physical amount available is irrelevant in the futures market since it is all paper barrels. In the corn market, with which I am more familiar, the bins can be nearly empty of corn just before harvest and yet the price of corn will fall. The futures market which determines the cash price is anticipating the harvest and lowering the price (normally). Likewise after the harvest, normally, the bins on the farm are full of grain, but the price of corn normally rises. I know these seems counter intuitive, but that is the way it normally works. This past harvest was unusual in that prices rose at harvest, a rare event. In the case of oil, I would suspect that the market is anticipating an over supply in the future. The declining inventories now are irrelevant. It is a futures market of paper barrels. Possibly the rapid expansion of ethanol is lessoning the need for crude oil as there will be ample supply of motor fuel at the margin. Add in the global warming effect and you get an over supply at the margin, which is turn decides the price for all the crude. The physical inventory numbers are irrelevant to price. However they could still indicate that peak oil is near or here already, it's just that ethanol and global warming are mitigating the effects at the moment. This can all change overnight.
Briefly, it is clear that world oil traders/companies do not believe we are peak right now (whether we are or aren't, people's behavior reflects primarily what they believe), crude prices have fallen from their high, no new obvious threats to oil supply have emerged (I think the concerns with Nigeria and Iraq have gone somewhat stale) and there is no shortage of supply - at least for the developed world. The question is given these factors, why wouldn't prices be dropping? Supply/demand imbalance will have to become much more evident for prices to really climb again in the absence of another new major supply threat (such as terrorism in SA).
There exists a certain knock-out effect too. I don't know how common it is, but if somebody is forced out of oil because of too high prices, he/she/it might just not rely on oil ever again even if the price falls back down. This is a bit more permanent type of demand destruction. This sort of behavior might also prevent the price of oil from ever rising into astronomical levels. It's a slow squeeze and financial entities (people, firms, countries..) are dropping out of the game one by one. A small player drops and the price growth slows down a bit. A large player drops and the price drops a bit. A very large player (or lots of smaller ones) drop out and the price just falls like a rock. Ofcourse the supply still keeps shrinking so the prices start to go up again.
Yes, I know this is quite obvious to many and the rest just probably disagree but this is my point of view.
U have described the process wonderfully. In 1998/99, many new users were drawn to petroleum use, both domestically and commercially. At that time, if anyone suggested crude cost would rise from $15 to $69 within ten years, they would be considered insane.
And so they became part of demand. As the baseline Price rises, those fringe users get knocked out of the game. At present, many are hoping that the baseline is still about $40 i.e. the contract price will still see $40 in the price troughs. Today it is $51. And as the fear premium and geopolitical premiums as price components extinquish, we are finding out this month where that bottom is.
IEA is advising that non-OPEC supply will increase 1.7-mbd in 2007. This plus their 0.65-mbd increase in 2006 will far surpass announced OPEC quota cuts to date. OPEC's next scheduled talks are in March.
It appears to me that in a 'just in time' world the the price of oil is only linked with fulfilling current physical trades. With remarkably warm weather in the northern hemisphere and low heating demand, no hurricane outages this year and no geopolitical issues stopping any major production there is no shortage at the current prices.
The situation with North American gas should however serve as a warning, (Perhaps also the major daily shifts in UK prices that frequently now happen.) post Katrina over $15.00 currently $6.60 with lots of price volatility. From the posts here we know that ongoing North American gas suppy is going to be critical in a short space of time with production in steep decline. However the JIT culture only 'sees' the immediate requirement and the price swings to enable current delivery. The futures market also seems to be deeply anchored in the 'now' with no consideration of potential production shortfalls that will result from resource depletion.
Its this kind of 'now' culture that I am sure is the prime driver of the oil price.
One more point, If you go to This Week in Petroleum you will see that crude oil inventories this past week are exactly 4 million barrels below the same week last year and are at their lowest point in over a year.
Yet we are still above the historical range for this time of year. We would have to drop another 25 million barrels just to get to the average portion of the range. High inventories amount to idle money. After Katrina, a lot of refiners started to keep higher inventories, but that memory is fading. I think inventories will continue to drift down until they are back in a more average range for the specific time of year.
The other thing to keep an eye on is product inventories. They have been climbing, and if they continue to climb refiners will start to cut refinery runs (and prices will continue to fall). This will also cause imports to fall farther. Finally, turnaround season will start in a couple of months, and you will definitely see imports down then. But they will come back up in May and early summer. Remember, just last summer we were setting new import records after imports had fallen in the spring.
RR
P.S. It was 19 below at my house in Montana this morning. Winter is here finally.
High inventories lead to more profit, if the markets are in contango (long dated higher than short dated), right? I thought that inventories were generally and persistently high for this reason for a while.
If this mentality changes (and it's starting to look this way) then I'd imagine there'd first be a quick liquidiation of inventories, hence even less importation, for a little while.
High inventories lead to more profit, if the markets are in contango (long dated higher than short dated), right?
Yes, this has also likely contributed to the high inventories.
If the new congress passes the much talked about inventory tax (LIFO) against oil companies, it will become much more expensive to hold inventories. In that case, you will see inventories drop substantially. Then the first time our supply gets disrupted and prices sky-rocket as inventories are drained, the congress will realize their error and repeal the tax (while complaining about the profiteering going on as oil companies rake it in due to the high prices). But I suspect they may have to learn this lesson the hard way.
Good point, although what's interesting is that the steep contango has persisted right through the recent sharp price decline (in fact the curve is now very close to a perfect contango). The incentive to maintain high inventories has persisted over the past few months, and therefore the remorseless weekly decline in stocks has been puzzling.
There's an argument that can explain how a fall in price such as we have seen can occur despite little or no surplus in worldwide production capacity. In simple terms it goes like this:
1) Expectation of future capacity constraints + hedging (e.g airlines) --> steep contango in futures market.
2) Contango leads to heavy inventory build, keeping oil from reaching spot market. Spot price rises, but this reinforces 1) above, so contango persists. Inventories continue to rise.
3) Storage approaches limit and high spot price suppresses demand in short term --> upward pressure on spot price subsides.
4) Market receives a false signal - sees price has topped and interprets rise in stocks as overcapacity --> price falls
5) Factors reduce expectations of immediate capacity constraints (e.g. mild weather, eased political tension) and medium term capacity constraints (e.g. new non-Opec supply) --> further sharp drop in price along the short and medium parts of the curve.
The key point in this is that at no time over the past few months has the contango gone away. There has been every incentive to maintain high inventories under the current price structure if there has been adequate production.
And yet inventories have been falling...
I think we are now in a Housing lead recession. The housing industry seems to use a lot of oil and oil products compared to traditional industries so I think we are seeing more of a demand drop than I predicted.
As far as I know this is the first Housing lead recession that has happened so looking at past consumption patterns during a recession may not be quite right.
So in general the drop and oil consumption is a indicator of the housing slump. Motorola's recent weak number should be a warning that consumer spending is waning quickly.
The warm weather helped also but I think we will know over the next few weeks how big a factor it really was. In fact it would be cool :) if we can get the consumption boost from this cold front since it will give us a good idea how big the warm weather effect is.
Great post and suggestion. The first Recession in history anywhere with a 4.5% Unemployment Rate. And yesterday Bloomberg reported December consumer spending set a record.
Good call, Mike.
Memmel,
I sold my last spec house this past summer. Saw the writing on the wall, stopped building, and I am sitting on the sidelines.
Building homes is very energy intensive. The manufacturing and transportation of building materials uses lots of energy. Think concrete, asphalt shingles, and all that vinyl.
The actual process of building burns lots of fuel. Saw my subs pumping 50 gallons a diesel a day into their excavators, bulldozers, backhoes,etc. Just the logistics of running around to move equipment, procure material and deal with the local govt burns alot of fuel.
I personally went from burning 40 gallons a week to way less than 40 gallons a month, once I stopped building.
All in all, a very energy intensive activity.
Look in to green building standards in your area.
Hmm good point. The energy saved by not ordering all the construction materials is pretty high also this would put a damper on NG/electricity usage also. A lot of construction material. And of course all the transport costs for them with a lot of it moving by truck.
Of course the warm weather helped but I think we will find out over the next few weeks how big a effect that was causing.
This morning on CNN, they were predicting millions would be without power over the weekend. They said it was 51F in Indianapolis, -51F in Calgary. Result: huge ice storm, probably centered on St. Louis.
Hello Leanan,
Not a weather expert, but aren't ice-storms more destructive than a normal snow-storm? Does GW guarantee more ice-storms than snow-storms during winter?
What will be interesting is if millions without power for an extended period of time from this icestorm will also help drive FF prices down overall during this period because of greatly reduced involuntary demand. If the power transmission infrastructure really gets torn up with numerous high voltage steel-towers turned to trash, and countless miles of powerlines out of service: will even the natgas pumping stations potentially go down for some time?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Not a weather expert, but aren't ice-storms more destructive than a normal snow-storm?
Very much so. It doesn't take much to start causing real problems. I went through 2 very bad ones in Oklahoma. Trees down everywhere, power lines down, icy roads where people are unaccustomed to them. We were without power during one of these storms for a week. I remember watching transformer after transformer explode during that storm. It was quite a light show.
The ice storm that hit Quebec in Jan 1998 was among the worst natural disasters to hit Canada. I recall watching trees self destruct before my very eyes. The temperature was -5C and it rained for about 5 days. The 720 kV towers collapsed in some areas...
Flak
1998, eh. Hmmm. Last year we had a big el nino? Nahh, must be coincidence!
Like fish in a barrel...
www.realclimate.org
Hello R-squared,
Thxs for responding. This may seem like a stupid set of questions, but living in Phx since I was a kid--I have totally ignorance on this subject.
Can a snowplow remove road-ice or not? Or is the coating generally too thin causing the snowplow to get damaged and/or damage the roadbed? Or is the loss of sufficient snowplow traction and control the primary reason this is not done? Do they have mechanized ice-grinders that can easily chewoff this road coating?
I can see where salting the ice may be helpful, but if salt is required--doesn't that really screw up the soils/rivers affected by the eventual runoff? Or do they have some way to neutralize this?
Arizona high country uses volcanic cinders, not salt on their roads. A thin coating worked into the ice/snow almost becomes like asphalt restoring vehicle traction and control. The loose gravel sure chips the paint and windshields of vehicles tailgating, but most drivers quickly figure out that leaving much more space between vehicles is not only safer, but much cheaper too. Thxs for any reply.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Salt helps, as long as it's not too cold, and yes, it does pollute. (The worst ice storm I've ever driven in was one where it was so cold that road salt didn't help. What a mess that was.)
There are ways to mitigate it. (Generally in the road/drainage design.) And using salt may be forbidden in especially sensitive areas. They'll just use sand, no salt.
They did a study in one of the northern European countries - Denmark, or some place like that. They had two similar stretches of road, one that was salted and sanded, and one that was not. They found that the cost was the same. That is, the cost of the salting and sanding offset the cost of the increased damage and injuries on the unsalted road.
Can a snowplow remove road-ice or not?
The first problem is that they don't even have snow plows in that area. Ice and snow aren't frequent enough to justify them in most Oklahoma cities. The larger cities may have some; I don't know.
But, no, to my knowledge a snowplow can't remove ice. Our roads are covered with ice here in Montana, even though the snow plows have been out working.
Like the often repeated road report:
"Ice and snow covered, whipping bare in the driving lane" The "whipping bare" is so descriptive.
The worst is the black ice--slick and so clear, it looks like asphalt. Very hard to notice.
Yup, hailing from Finland I can pretty much guarantee that there is absolutely no way to remove ice from the road mechanically without destroying the road in the process. Hell, even then you'd have to repeat the destruction quite often.
Here in Quebec there are a lot of different road conditions. Rain on bare frozen pavement will result in black ice. You steer left the car goes straight. You brake, nothing happens. The plows will be out but they will be salting. The coating is too thin to be removed by the blade.
Snow on bare pavement will compact if it is wet and will then act like the ice coat above. This will be about an inch thick and may get lifted by a plow but generally this is handled by further salt applications.
All the salt mixed with road snow lowers the freezing point of the snow so you get a brown slush which remains semi-liquid. Once you get into this stuff the car will hydroplane and you have all sorts of control problems.
The continual friction of tire on main roads creates heat and this, plus plows, will keep most roads more or less clear. The salt does create problems but this falls into the same category as tailpipe emissions - nobody is really going to address the problem as there is no other means of getting around. Cars do not last long up here and neither do boots or winter clothing.
And it's underway:
Ice storm threatens chaos
Poor Oklahoma. They just got the power fixed from the last ice storm.
We are in the thick of it in KC, MO right now as well...freezing rain, sleet, now...temp is about 18 degrees F right now.
This is a HUGE storm. Watch out in St. Louis...they are going to get nailed on this one and with the power problems they had with the last storm...double nasty.
Stay warm all my Midwestern brethern.
That comment about "one-in-maybe-15- to 25-year event" indicates Chad Meyers doesn't know too much about Oklahoma weather. I went through two of these - very bad both times - since 2000. I also remember we had a really bad one in Oklahoma about 1990 or so.
I posted a note from an Accuweather guy a couple of days ago in which he suggested that we could see something like the 1977-78 winter, which started off mild but ended very badly.
We can't say global warming *guarantees* more ice storms than snow storms.
What we can say is it is likely that when there are storms, they will dump more moisture. Conversely winters are likely to be later, warmer and shorter.
So what is it about St. Louis, being hit so hard so many times in the last year?
God is angry. He was betting on the Tigers to win the World Series. ;-)
Yikes! Now that's real Montana winter weather.
Well, as the Zen koan goes:
Chop water, haul wood. :-)
Or as I say here in Vermont: chop water, carry wood.
(Chopping the water refers to shoveling the snow and ice.)
Note that Total US Petroleum Imports doubled in 15 years, from 1991 to 2006. As I have noted, this is just shy of a long term exponential growth rate of 5% per year, as our domestic production has fallen and as our consumption has increased. Based on the HL method, we have consumed about 5/6ths of our conventional crude oil reserves.
BTW, based on consumption, crude oil inventories are down to about 20 days consumption, versus the 30 days that we had in the early Eighties.
One of the things that caught my attention was the rapid increase in Chinese oil imports, versus the decline in US imports in the fourth quarter, combined with the reported reduction in Saudi production of over one mbpd since early 2006 (I estimate that exports from the top three exporters may be down as much as 2.5 mbpd in 2/07 relative to 2005).
As I said yesterday, connect the dots. We are seeing a substantial movement of US land, air and sea forces to the Middle East, just as the available data are pointing to rapidly declining world exports, and by the way, the available exports appear to be headed more for China than to the US.
So WT, since you paint yourself as all knowing on oil matters around the world, would you care to explain to us why prices are now down 35% from their all time high set last summer, despite the fact that 2.5+ mbpd that hasn't been replaced is supposedly off the market?
As I noted down the thread, lower short term demand because of a combination of a (so far) warm winter and perhaps a slowing economy (and lower demand in many poorer countries) is not mutually exclusive with Peak Oil. What we are not seeing is higher crude oil production.
Hothgor, just curious. Why do you feel that it is necessary to open every comment with some kind of snide remark?
As I said earlier, you apparently have no problem with the concept of a virtually infinite growth rate against a finite resource base. I do. Why don't we just leave it at that?
westexas:
I see the demand destruction due to warmer weather, but here's the part I question: You state "we are not seeing (is) higher crude oil production".
Granted, we are not seeing higher crude oil production because the market is currently flooded, I would assume. Why supply 500,000 more barrels when the market is not demanding them?
On that rationale, OPEC's desire to cut output, and for others to throttle theirs down would seem to me to be more a function of market economics than inability to produce more.
I agree with the finite resource base argument, I just don't think that the data right now would support that as being the prime factor behind slowing production figures. I'm calling market economics at this time.
Re: Declining Oil Production: Voluntary or Involuntary
In geophysics, when we do gravity surveys, one inherent problem with the technique is that an observed anomaly may be due to either a small shallow structure or a large deep structure (and anything in between). In other words, all we have is the observed anomaly. (One my daughter's middle school science projects was to measure the gravitational effect of the moon. I borrowed a $25,000 gravimeter for the project.)
One way to address the interpretation problem is to develop models to compare to the observed data.
So, the oil anomaly we see is that the world is going to clearly end up 2006 with lower crude oil production than we had in 2005, after five years of an average year over year increase in oil prices of 21% per year.
As noted down the thread, the Saudis started "voluntarily" cutting production as oil prices went from around $60 to around $75. Oddly enough, while they claimed that they could not find buyers for even their light, sweet oil, many other countries, such as Iraq, had no problems finding buyers.
And the decline in Saudi and world production fits the mathematical models. In other words, our observed data match the models. Does it prove that we are past peak crude oil production? No. But ask yourself this question. If we had had a cold, or even normal winter, do you think oil prices wold be "down" to the low $50 range? So, do you think that short term weather patterns (plus some overall reduction in demand) are affecting the short term supply/demand balance?
So, the oil anomaly we see is that the world is going to clearly end up 2006 with lower crude oil production than we had in 2005, after five years of an average year over year increase in oil prices of 21% per year.
But as you said above, demand is currently down. If demand is down, that means lower production and lower imports. All that is needed to explain the lower production is that demand is down. We don't require any conspiracy at all.
As noted down the thread, the Saudis started "voluntarily" cutting production as oil prices went from around $60 to around $75. Oddly enough, while they claimed that they could not find buyers for even their light, sweet oil, many other countries, such as Iraq, had no problems finding buyers.
That isn't true. Between January and May of 2006 - when Saudi first said they were having trouble finding buyers, Saudi production fell by 200,000 barrels a day, or 2%. During that same time period, Iranian production fell 150,000 barrels a day, or 3.7% (despite record high oil prices). In fact, production in most OPEC countries fell over that time period. Does that mean they have all peaked?
As I have shown, this time period also corresponded to a very large increase in U.S. inventories. It is a fact that if our inventories are very full, we will need less imports. There is absolutely zero evidence, despite your claims that the Saudis are lying about this, that they in fact are. Their comments are completely consistent with what was observed in the market.
I agree that it is getting kind of hard to find countries with rising production, but from the January to May time period, Iraq's production went from 1.6 to 1.9 mbpd, on its way to 2.2 mbpd in July, while Saudi Arabia--because they couldn't find buyers for all of their oil, even "their light, sweet oil"--saw their production fall, within the context of the overall decline from 9.6 mbpd in 9/05 to a projected 8.5 mbpd in 2/07.
So, if the Iraqis could find buyers--even for "their light, sweet" oil--for another 600,000 bpd in production from January to July (as oil prices hit their so far all time record nominal high), why couldn't the Saudis find buyers?
I agree that it is getting kind of hard to find countries with rising production, but from the January to May time period, Iraq's production went from 1.6 to 1.9 mbpd, on its way to 2.2 mbpd in July...
Again, as I said in the first response, Iran's production fell over that time period. Here are the numbers:
http://www.eia.doe.gov/emeu/ipsr/t11a.xls
Does this mean they have peaked? Their production fell by a larger percentage than did Saudi's. Other oil producers that saw lower oil production over this time period were Nigeria, Algeria, Indonesia, and Kuwait. So, why would their production fall if oil prices were so high? Answer: High oil prices don't necessarily indicate that a country will be producing at maximum capacity. There are other considerations. But when one is merely data-mining, it is quite easy to just pick the pieces that fit the theory they are promoting. Much more difficult to take all the data and put it together. But the fact is, other countries - including countries that have not peaked - saw their production fall over the same period that Saudi claimed they couldn't find buyers. It is also indisputable that U.S. inventories rose sharply during this time, indicating that in fact supply was exceeding demand.
But I'm puzzled as to why Iraq and Russia were able to sell another 830,000 bpd of crude production--from January, 2006 to July, 2006--when Saudi Arabia couldn't find buyers. Could you enlighten me?
There was also the curious fact that average US spot prices went from $61.63 in January to $74.41 in July--as the Saudis couldn't find the buyers that the Russians and Iraqis seemed to have no trouble finding.
Do the Russians and Iraqis just have better oil traders?
But I'm puzzled as to why Iraq and Russia were able to sell another 830,000 bpd of crude production--from January, 2006 to July, 2006--when Saudi Arabia couldn't find buyers. Could you enlighten me?
Maybe they were selling to people who didn't have overflowing inventories. Maybe Iran was selling to some of the same customers as Saudi - customers with quickly filling inventories - which explains why their production dropped.
There was also the curious fact that average US spot prices went from $61.63 in January to $74.41 in July...
Again, data-mining. You are ignoring all the factors I laid out in my debate response to you. There was a lot of geopolitical stuff going on - right in the wake of Hurricane Katrina taking a lot of supply off the market. Again, no conspiracy necessary to explain that.
as the Saudis couldn't find the buyers that the Russians and Iraqis seemed to have no trouble finding.
You don't know whether they had trouble or not, do you? You know they were able to increase production, but you don't know whether they were offering discounts, etc. Again, "having no trouble" is spin. Iran apparently had a little trouble. Ditto Nigeria and several others. Again, have they peaked?
So, why were Iraq and Russia both able to find the right buyers at the $74 US spot price in July, but Saudi Arabia couldn't? It's not like the all time record high oil price didn't offer them a huge incentive.
In regard to your peaked question. The problem in Nigeria is self-evident. I have seen HL plots on six of the top ten net oil exporters--Saudi Arabia; Russia; Norway; Iran; Mexico and Kuwait--and in all six cases they are right at, or past, the 50% of Qt mark. In aggregate, the six have consumed more than half of their recoverable reserves.
So, why were Iraq and Russia both able to find the right buyers at the $74 US spot price in July...
Proof that they found buyers at $74? OPEC crude trades at a discount to WTI, you know. You have no idea what kind of price they offered to move their crude. None. Producers offer customers discounts all the time, so once again you are spinning.
It's not like the all time record high oil price didn't offer them a huge incentive.
Thus you continue your pattern of simply ignoring data that don't fit. You are a hammer. Every problem is a nail. I show you a screw and you just ignore it and continue to talk about the nails. To you, screws don't even exist.
Did the all time record high oil price offer Iran an incentive? Yes or no? Has Iran - not in aggregate but by itself - peaked? Yes or no? Did Iran, and several other OPEC members besides Saudi, lower production over the same period? Yes or no? To pull Saudi from the group, suggest they were lying even though rising inventories supports their story, ignore the fact that other producers showed the same behavior during these record high oil prices, and only pick out the cases that support your argument is nothing but data mining. The argument is ad hoc. It is infinitely malleable.
And this is what we call "putting the cart before the horse."
Demand is down because of higher prices. Higher prices are caused by a shortage of supply, which is a product of lower imports and other product limiting factors.
When the supply of any product drops, then prices automatically rise until demand drops to meet supply.
All that is needed to explain lower demand is higher prices. That was covered in economics 101. Perhaps you missed that class. But at least you got one thing right, no conspiracy is involved.
Ron Patterson
When the supply of any product drops, then prices automatically rise until demand drops to meet supply.
So then I guess what we have right now, with falling prices, means that supplies are rising - just the opposite of the scenario you described. Which means falling imports, inventories, etc. are quite irrelevant given that prices should automatically fall until demand increases to meet supply. The market is signaling that there is plenty of supply at the moment. That's based on your own logic.
Robert, you need to understand one thing very clearly, this is not my logic! This, as I said, is basic economics 101. And even people who hate economics and economists agree on that very simple principle. When supply is in excess, prices drop until enough buyers take up that excess or producers are unwilling to produce at that reduced price. And the vice versa when there is a scarcity of supply. When supply drops, the price rises until it prices some buyers out of the market and/or more producers are willing to produce more at a higher price.
If suppliers, because of a high price, find themselves without buyers, as Saudi Arabia says they did, then all they must do to find buyers is lower their price. That is why everyone knows they are lying when they say they had no buyers for their oil. Well, everyone except those who do not understand economics 101. There are always buyers! The price simply must simply be adjusted until buyers come into the market. It is called the law of supply and demand.
And yes, the market is signaling, with falling prices, that there is enough oil at that price. As of late there has been considerable decimation in demand, due to the price of oil over the past two years. People are buying smaller cars, people are driving less, and countries that use oil to produce electricity are just producing less of it. And of course the very warm winter is no small factor in the reduced demand. And, of course, the fear premium has largely disappeared.
Saudi Arabia reduced production when prices were in the mid sixties. All they had to do to attract buyers was lower their price a dollar or two. At the time Arab light was going for about 60 bucks. All they had to do to attract every buyer in the market was lower their price to $58 a barrel. Only someone who has no concept of how economics works could possibly believe that they could not find buyers at only a slightly lower price.
Ron Patterson
That is why everyone knows they are lying when they say they had no buyers for their oil. Well, everyone except those who do not understand economics 101.
Or those who apparently think a sound Saudi strategy would be to sell more of their non-renewable oil by lowering the price. If I were in their shoes, I certainly wouldn't.
Only someone who has no concept of how economics works could possibly believe that they could not find buyers at only a slightly lower price.
No need for straw men, Ron. I never argued that they couldn't have found buyers if they lowered the price. Heck, my company could sell a lot more too if we lowered the price. But why would we? Why would we risk starting a price war? Saudi said they weren't going to leave money on the table. Can you blame them? Would you lower the price of your non-renewable resource to sell a little more of it? If I was the largest producer, I would try to keep prices as high as the world could stand it. I would try to push prices back up to the $70 range. I would do that by cutting production if the price started to soften.
They could have sold at $58 to $65 when WTI was selling at above $70. And they did not! And you believe them?
Now the contract price of Arab Light is below $50. The very oil they are selling right now, some 8.7 mb/d of it, (best guess), at below $50 a barrel, they could have sold for $60 a barrel. Because they were unwilling to take that low a price for it.
Yeah Right!
Do you own any bridges Robert?
Ron Patterson
They could have sold at $58 to $65 when WTI was selling at above $70. And they did not!
Can you see the future, Ron? You can't say what they could have done based on what prices have done since then. They were trying to prop the price up. A year ago, we were selling gasoline for a much higher price. Oil companies would have liked to see the price stay high. Yet today margins have eroded and we are selling gasoline for a much lower price. Does that mean in hindsight we should have sold more when prices were higher? Well, we might do a lot of things different with the perfect view of hindsight.
Look at inventories, Ron. Simple questions. 1: Were U.S. inventories at all-time record highs and rising when Saudi made this claim? Question 2: If inventories are very high and rising, doesn't this mean that companies are going to slow down on their purchases? Question 3: If companies slow down on their purchases, doesn't that mean that some suppliers will need to reduce output?
Do you own any bridges Robert?
I own 1, but I am reluctant to sell. Make me an offer.
I guess I'm still confused. Saudi Arabia's stated position for years has to keep oil prices within a certain band--not too high or too low. They didn't want oil prices to go too high because it would encourage conservation and alternative energy. Why suddenly abandon that position?
And why were the Saudis willing to sell 9.5 mbpd in July, 2004 at an average US spot price of $40.78, but they were unwilling to sell 9.5 mbpd in July, 2006, when the US spot price was an average of $74.41?
And why cut February, 2007 production to 8.5 mbpd, when current US prices are above $50, when they produced 9.5 mbpd in 2004 at $40 per barrel?
(I realize that OPEC oil sells at a discount to US spot, I'm just using it for comparison purposes).
Why suddenly abandon that position?
I know I have explained this several times. Because they saw that the world was willing to pay that price, and it didn't cause the kind of fallout they had feared. As I said before, I might have been happy 2 years ago to get a price for my house that would be ridiculously low today. Why might that be?
So the Saudis, being ruthless capitalists, cut their production and allowed competitors like Russia to take advantage of the US spot price of $74 in July?
In any case, I would argue that we have been in "Peak Lite" since 2002, given that the average annual year over year increase in oil prices, starting in 2002, has been 21% per year for five years. After Peak Lite comes the Real Decline.
So the Saudis, being ruthless capitalists, cut their production and allowed competitors like Russia to take advantage of the US spot price of $74 in July?
You have provided no evidence that Russia got that price for their crude. I also read an article today that Saudi is not too happy over Russia's refusal to cut production to keep prices high.
In any case, I would argue that we have been in "Peak Lite" since 2002, given that the average annual year over year increase in oil prices, starting in 2002, has been 21% per year for five years. After Peak Lite comes the Real Decline.
On that, we can agree, although we won't have a clear picture of the true supply situation until prices pick back up. At the moment, the very thin margin between supply and demand has fattened up a bit. How long this lasts largely depends on China.
As I said, I'm just using US spot prices for comparison purposes. But no one disputes that oil prices went way up from January to July.
Jeffrey, your misunderstanding of the market continues to be founded in your belief that somebody buys crude at Spot. Spot and futures are for options traders ... not specifically for trading of oil. Oil and nat'l gas is commonly sold in six month and one to three year contracts. LNG is sold in 10 - 20 year contracts. These contracts are not rigid and have some pro rata built in to protect both parties. OPEC contracts warn that quota cuts will supercede the Agreement and not necessarily respectively.
Perhaps also, a nation or oilco may holdback sales in hopes of higher pricing regimes at a later time (like when opec quota cuts kick in). Or they may dump knowing that prices are on the way down (due to increased non-opec supply coming down the pike).
You and Ron continully analyse the past as monday morning quarterbacks and thus y'all are confused by why they took certain decisions at that time. They did not have your advantage.
When u ask why a country did not choose to sell when others did, it illustrates that u are not aware of the infrastructure limitations of choosing your customers. And some nations sell "regardless" 'cuz they need the cashflow. These will be mostly national oil companies that have payrolls and IMF payments to make. Not every seller is a willing seller.
simply put the gravitational effect of the moon on you is the same a pea has on you held .5 meters or 1.5 feet above your head.
We have to correct gravity surveys for the earth tide effect caused by the moon.
I don't understand how can you say that nobody is demanding more oil today or during 2006 while China, for example, is growing by 10% each year! And it is not the only contry in this situation.
I mean, it seems obvious for me that we are, since a couple of year, in a time frame where there is never too much oil to buy!
If there was demand, prices would be rising. Instead, they are falling. It really is that simple. The high oil prices of last year plus the mild winter could have destroyed a lot of demand. At the same time OPEC got a great test case that the market can support $60/barrel. Why let go of that if you can force it by removing supply (plus buying yourself months, if not years until the peak)? As soon as demand picks up during driving season, prices will start to rise, unless I am totally mistaken and demand destruction goes way beyond anything the producers could imagine.
"I mean, it seems obvious for me that we are, since a couple of year, in a time frame where there is never too much oil to buy!"
So you are obviously wrong. You wouldn't be the first one.
manmax -
I'm not saying that nobody is demanding more oil, but what I am saying is that it would appear the market is sufficiently supplied at the moment and is not demanding much more. China may be growing by 10% *annually*, but right now, on January 13, 2007, we must ask: who is buying and in what quantity? This is not to say that 6 months from now supply will be outstripped by demand.
Right now, however, the market appears to be balanced, if not in excess supply.
Also, on the discussion of prices and correlations - let's not forget that in 2006 there was a significant "fear premium" built into commodity prices, specifically oil. There was the forecast and fear of a strong Hurricane season, there were geopolitical concerns in the middle east with Lebanon, Iraq, Iran, there were concerns about China's strategic petroleum purchases, etc.
However, by the end of July, when the Lebanon conflict began to subside, when it appeared that the forecast for the hurricane season wouldn't pan out, and Americans started to become a bit more prudent in consumption, it became apparent that the $74/barrel price was unjustified and the great sell off began.
For sales and purchases, someone mentioned that you have to consider logistics and financial needs when questioning motives and answers for the market. For example, Saudi Arabia said it could not find buyers for its light-sweet crude in 2006. There's a lot there for interpretation. For example (and without data), perhaps the United States' reserves will adequately supplied, perhaps in general, Saudi Arabia's buyers were already taken care of and weren't demanding more, perhaps the Iranians and Russians were selling every drop to the Chinese, locking out the Saudis from that market, etc.
There's a lot that can be interpreted and needs to be studied in the financial markets to get a better grasp of what was going on seven months ago.
This year we may see prices stay depressed because of extra capacity that has come online, infrastructure that has been upgraded and improved, new technologies, etc. This is not to say that our oil is an infinite resource, but that concern about peak oil being "just around the corner" may be overblown.
I have a strong feeling we're going to see repeats of the 2006 oil market off and on for many years to come.
Yes. Here's hopes for a nonsnarky New Year. Love and kisses.
An interesting chart out there shows the Chinese buying big on the dips. It seems while the loudmouths in the financial media in the West do their part in beating down the price of oil with their reporting on full tanks and warm Manhattan weather the Chinese quietly stock up.
They said they were going to do that. They started their SPR when prices were going crazy, but said they weren't planning to fill it until prices went down.
Proof of the hopelessness expressed by ronny:
I thought I would give some info on the situation in Denmark. The link is in danish but it says that oil production from the North Sea has dropped 6% from 113 m/b in 2005 to 106 m/b in 2006.
There is no mention that Danish oil production peaked in 2004 (no surprise there). And the journalist seems to be blaming maintenance for the shortfall.
With regard to today's article, 'China's Thirst for Oil Grows', I just read an AP article in the business section of our local paper that China has just passed Japan as the world's No.2 car market, as purchases by newly affluent drivers jumped 37% from 2005.
The article further stated that some analysts believe China could overtake the US as the world's largest car market by 2015. China's rapidly growing car market has also given a much needed boost to US auto makers General Motors and Ford.
The whole tone of the article was in glowing terms, and suggested that this was a great thing that will help the global economy continued to grow. Not a word was mentioned about where the additional oil for all these extra Chinese cars is going to come from, but then again, business reporters usually don't trouble themselves over such boring details.
I think I posted a similar article a few days ago.
This was what made Matt Simmons a peak oiler. He started wondering whether there was enough oil in the world to allow China to achieve a U.S.-like standard of living. After crunching the numbers, he realized that even a 1960 Japan standard of living would be pushing it.
Does this assume oil available by impoverishing the USA down to the level of 1960's Japan?
Joule: IMHO, there is lots of oil for Chinese car buyers. If you follow the globalization trend, eventually the same % of Chinese will own cars as Americans (wild as that may sound). Possibly it will even out at 15% of the population owning cars (45 mill USA, 150 mill China). Magnus from Sweden noted the other day that only 3% of Swedes are car owners. It would appear that the combination of oil depletion and agressive globalization will put an upper limit on cars owned per capita (in any large nation).
I cannot believe only 3% of Swedes own cars.
Unless they lease cars, and that is not counted as 'ownership'.
Having been to Sweden, I would say every middle class Swedish household has a car, and many working class ones.
So say there are 3.5m households in Sweden and 8 million people. I would say there are at least 3m cars in Sweden.
http://epp.eurostat.cec.eu.int/pls/portal/docs/PAGE/PGP_PRD_CAT_PREREL/P...
gives 456 cars per 1000 Swedes. Which feels about right.
Interestingly they have very few diesels, in marked contrast to the rest of Western Europe (France 60% of new cars). I don't know if this is a 'cold start' problem, or something else.
They also have (same data) about 1/5th the motor accident death rate of the US. The US, ranked in Europe, would be among the most dangerous countries to drive. I wonder why that is?
I suspect that is simply that Americans don't like seatbelts, rather than anything more nefarious (also that they drive longer distances).
Value: Sorry- Magnus said there were 313000 registered vehicles in Sweden (for a population of 9 mill) and I didn't check it.
My thought:
- in 2035 or so there will be 400m Americans, and something like 250m cars v 150m now)
- in 2035 there will be c. 1.3bn Chinese, and something like 250m cars
(I've not modelled the penetration curves for other fast growing economies eg Korea and Taiwan and Japan in their own pasts, but this feels about right)
There is no way the Chinese can build roads any faster than that-- even the Chinese.
*what* will *fuel* these cars is an interesting and open question.
If you have been paying attention to this site, the obvious answer is that, no, there will not be those numbers of cars, in either country.
The Chinese built roads in advance of the cars. Their "interstate system" wasn't well developed when I was last there in 2003, making driving between some large cities problematic, but the cities have extraordinary roads.
The largest Chinese cities were fortified at one time with massive walls ringed in layers around the city. As many as eight walls in the largest cities.
They took the walls down and used the right of way to build highway ring roads connected with broad spoke-like avenues. It was a very strange experience to motor completely alone on a modern six lane freeway near Chengdu and watch someone riding their bike across the dusty highway.
In Shanghai, the freeway system is completely modern, although the drivers leave something to be desired. I flew into Shanghai late in the evening once and popped into the front seat of a cab. I like to talk to cabbies. They know what is going on and aren't shy about talking.
We were driving into Shanghai in fairly heavy traffic when the cabbie decided he really wanted to tell me about some of the amazing skyscrapers we were passing. So he slowed down so we wouldn't pass them before he told me the whole story. I mean he really slowed down, in the middle of multiple lanes with cars screaming up on us and passing on both sides. I wanted him to get moving but he wasn't finished so he came to a stop!! Then he started slowly changing lanes to get off to the side. I've never been more afraid in my life and I don't even recall what he said. I think when he finally dropped me at the YMCA I was in shock.
Living in Sweden I can guarantee you that isn´t the correct figure. 2006 we had appro 4 million registred cars (population 9,1 million).
Compared to others parts of Europe, we have historically low numbers of diesel vehicles, but recently we´ve had a huge upsurge of diesels (27% as of late 2006) and "environmentally friendly" cars (13% of all vehicles bought), ie hybrids, flexfuel, very-high-mileage etc.
For those of you who know swedish here is the link:
http://www.bilsweden.se/aktuellt_arkiv.asp?ArticleID=233&
I am increasingly struck by how climate change and peak energy are intertwined. The energy crises in Albania and South Africa are due at least partly to droughts that have reduced their hydroelectric power. Drought is reducing grain production, even as ethanol from wheat and corn is taking off. Unexpected cold weather and snow in Jordan results in a natural gas shortage.
And in the U.S., warm weather is depressing demand for heating oil and natural gas and is arguably one of the major factors in crude's 15% price plunge so far this year.
When I grew up, Ontario had a winter electricity peak.
It sold electric power at a very high price to New York during the summer. It bought cheap electric power from Michigan and NY in the depths of winter.
Now Ontario has a summer peak (air conditioning load, plus urban heat island effect in Greater Toronto Area) and so it buys expensive power in the middle of summer.
Partly that is lifestyle change, but it is also a mark of how much warmer it is in Ontario both in winter, and in the summer.
When yeast fill their container and reach the limits of their sources and sinks (they run out of sugar and poison themselves with alcohol) they die, and a new species (aerobic bacteria) takes over that can eat the alcohol and the dead yeast. Eventually the aerobic bacteria reach their limits of source and sink and the anaerobes take over. Eventually, of course the result is -- you guessed it. OIL!
Life doesn't end at peak oil, or even end of oil. There were civilizations before oil, and there will be civilizations afterward. They will, of course, look very different. And getting to them appears already to be in progress -- and to look around, there are some areas of unpleasantness.
Two questions:
1) Echoing Bob Shaw -- are humans smarter than yeast?
2) Is it possible for a runaway greenhouse to make our planet look like Venus?
Since geological data seems to indicate that much of Earth's geological history has been totally ice-free, the answer to #2 seems to be no.
And my answer to #1 has only personal, anecdotal data to back it up -- but again, the answer seems to be no
Now, about C02 emissions and Earth turning into Venus--possible but highly unlikely. Note:
1. Venus is much closer to the sun than Earth. That matters a lot.
2. The climate change models are inspired guesswork and nothing more:
a. Nobody knows what is going to happen to cloud cover.
b. Cloud cover dominates Earth's albedo.
c. Albedo dominates global temperature effects.
3. Therefore I'm going to party tonight. Probably the earth is going to get substantially warmer. Who knows, perhaps we'll go back to the Cretaceous, as I have us doing in my science fiction novel, "The Adventures of C.C. Eggum."
2) Is it possible for a runaway greenhouse to make our planet look like Venus?
Not very likely. You'd have to kill off all the plants and keep them dead. Eventually we could then revert to a 20% CO2, 80% N2 atmosphere. But life is incredibly resilient. Even the Permian extinction couldn't do it, we wouldn't get close.
In the Star Trek franchise "Enterprise", Season 3, Episode 11, titled 'Carpenter Street', Captain Jonathan Archer of the starship 'Enterprise' declares that Peak Oil occurred in 2061.
Just some trivia.
Hans, that is not trivia. It's not a fact, it's from a fantasy.
It's just something light. Don't take it serious.
It's just something light.
Catastrophe, Social Collapse, and Human Extinction (paper pdf) January 2007, Robin Hanson, Department of Economics, George Mason University
Via author's post Epidemics are 98% Below Average post on Overcoming Bias blog.
(apologies if previously noted on TOD)
I saw that too. Nice to see that Overcoming Bias is picking up some readers. The "Epidemics" post was interesting.
Hanson mentions building sanctuaries to preserve civilisation.
The building places to rehabilitate civilisation is a stock of fiction over the last 50 years.
Thinking the classic Larry Niven/Jerry Pournelle Lucifer's Hammer where a *nuclear power plant* saves civilisation (from an alliance of cannibalistic black ex soldiers, LA street gangs and leftist environmental anarchists -- I kid you not). A great read if you can bear (bare?) the politics.
http://www.fantasticfiction.co.uk/n/larry-niven/lucifers-hammer.htm
And also 'A Canticle for Leibowitz' by Walter Miller, which was named a Catholic Great Book by the Pope. A group of monks save the knowledge of electricity from a post nuclear war Dark Age. The ending is one of the most heartbrakingly beautiful images I've ever read.
http://www.fantasticfiction.co.uk/m/walter-m-miller/canticle-for-leibowi...
I can think of examples in history (sort of): monks in Ireland saved much Roman and Greek classical learning during the Dark Ages (but scholars of the Arab Empire saved more).
But mostly what tends to happen is aforesaid sanctuaries:
- fall apart in infighting
- the barbarians (think the Vikings amongst others) batter down the front door and sack the place (Baghdad, National Museum, April 2003 anyone? To quote Donald Rumsfeld 'Freedom is messy').
That Russian seed bank is real, and has helped in smaller scale disasters, yes?
From my skim I'd guess that his angle is that IF disasters follow a power law, then even punting on prediction, appropriate "insurance" is warranted.
The Canticle for Leibowitz is one of the darkest books ever written. It came out of the same incubator as Slaughterhouse 5 (Kurt Vaunnegut), and tells the same dismal story in a somewhat different way.
Walter Miller was so depressed he killed himself -- or at least, that is the story. Kurt Vaunnegut went on to be something of a picaresque hero and purveyor of a strained sort of hope.
Vonnegut is a peak oiler:
Wow! Not only is Vonnegut a peak oiler, he is a doomer as well.
Ron Patterson
And 128 years old, so a happy doomer: apres moi la deluge.
Always wonder what the Kissingers and James Bakers of the world think: they have max 10 more years, and judging by their actions they're the ones most interested in the second coming.
Could be brain defects too.
I just read a painfully dark book. Darker than most of the SF I read when young. It's called "The Great War For Civilization: the conquest of the middle east" by Robert Fisk. Unfortunate that it's not fiction.
It goes from the Armenian Holocaust during WWI (and drips with acid for the Western world allowing Turkey's denial) through the current war in Iraq. In between there are maybe 1000 pages of carnage largely driven by the great powers of the world seeking access or control of oil.
I hope conservation, wind power and solar power develop rapidly as oil declines. These being well distributed should give less cause for wickedness.
It appears that the right-wing blogs are abandoning Emperor George II by comparing him to Jimmy Carter for advocating renewable energy. Natural law cannot be repealed. Rats do not run towards a sinking ship.
Since Iraq I have found it increasingly difficult to find a right wing blogger who makes any sense. It seems like Iraq has caused them to take leave of their senses, it doesn't matter on what subject (global warming, Iraq, energy dependence etc.) inconvenient facts are just thrown out or are a plot by liberals.
I've lost track of the number of Republicans in 2006 who posted that real progress was being made in Iraq, and they expected victory quite soon. I mean in 2006 they posted that! It's like reading General Haig's despatches from The Somme, as he sent another division over the top to be exterminated.
The party line on global warming has become so tedious, and the tendency to interpret everyone's reasonable fears on the matter as some kind of left wing scientific conspiracy against America (see recent debates on Jane Galt/ Asymmetric Information) (a plot against America which must include Tony Blair and the Tory Party leader David Cameron I might add), that I've just found diminishing marginal returns reading their stuff.
(Marginal Revolution is still good)
Instapundit, Tacitus-- they all seem to have lost their minds.
(oddly enough although I oppose a surge, I don't think Congress should try to stop it. If the Joint Chiefs of Staff and the President wish to make a strategic decision (other than to go to war) then it should not be the prerogative of the Legislative authority to overrule that)
My Idea: This is a Rovian plot. He makes a "false charge" for a surge, taking as his win that it totally takes discussions of "troop reductions" off the table. Look how well it works, who can talk about reductions when we are busy arguing about a surge?
It would be distressing if Karl Rove was having that kind of influence on the making of foreign policy. But the Nixon Administration certainly behaved that way, and this Administration shares certain characteristics...
More likely I think is the point raised by Steve Clemons in The Washington Note (the best foreign policy insider blog) and by Jonathan Micah Marshal in www.talkingpointsmemo.com and a previous article in the Washington Monthly a few years back www.washingtonmonthly.com . What is going on here (see the raid on the Iranian consulate yesterday) is a softening up of political opinion, and a positioning of forces, for a move on Iran.
Iraq has become an almost irrelevance, as Afghanistan did. This Administration has raised its game.
Real Men go to Tehran.
Of course a "surge" in no way is an "escalation" like repeatedly happened in Vietnam. New words, same old tune.
Try this for the intent of the speech---a "casus belli" for Iran invasion.
This is from former CIA and Bush National Security Council senior official, Flynt Leverett:
"The most important things that President Bush said last night dealt with Iran, not Iraq:
According to the President, the Iranians are providing "material support" to attacks on U.S. forces. That is a casus belli. It fits in with the administration's escalating campaign -- encompassing rhetoric and detentions of Iranian officials in Iraq -- to blame Iran for a strategically significant part of the ongoing instability and violence in Iraq.
In the context of describing the deployment of additional U.S. forces to Iraq, the President also noted the importance of securing Iraq's borders. I suspect that at least some of the additional U.S. soldiers going to Iraq will end up on the border with Iran.
Moreover, the President strongly implied that the U.S. military would start going after targets in countries neighboring Iraq to disrupt supply networks for insurgents and militias.
The deployment of a second carrier strike group to the theater -- confirmed in the speech -- is clearly directed against Iran. Since, in contrast to previous U.S. air campaigns in the Gulf, military planners developing contingencies for striking target sets in Iran must assume that the United States would not be able to use land-based air assets in theater (because of political opposition in the region), they are surely positing a force posture of at least two, and possible three carrier strike groups to provide the necessary numbers and variety of tactical aircraft.
Similarly, the President's announcement that additional Patriot batteries would go to the Gulf is clearly directed against Iran. We have previously deployed Patriot batteries to the region to deal with the Iraqi SCUD threat. Today, the only missile threat in the region for the Patriot to address is posed, at least theoretically, by Iran's Shihab-3."
http://www.thewashingtonnote.com/
I hope the Carriers that he is sending don't get "SunBurned".
More news along this topic:
Did the President Declare "Secret War" Against Syria and Iran?
http://www.thewashingtonnote.com/archives/001869.php
Gates, Pace Say U.S. Troops Won't Enter Iran or Syria
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZSDxoH3ye7U&refer=home
dragonfly,
I always wonder whether your tag is in reference to any specific genus, larval or adult-- Gomphus, Aeshna?
Actually, I was an environmental ecologist specializing on aquatic system bioassessment. I looked at aquatic fauna and water/sediment chemistry to assess effects of pesticides and sewage on freshwater aquatic systems (ponds, wetlands, lakes, streams and rivers). I did work in Kansas, Missouri, Nebraska, Minnesota, and Colorado. I specialized in Chironomidae (midges) collection and identification, but always loved dragonflies.
Aeshnids were always my favorite.
http://stephenville.tamu.edu/~fmitchel/dragonfly/photo/t_3329.htm
Specializing in chiros-impressive. All that mounting of head capsules, the picking before you even got there. I assume larvae from aquatic assessment. I worked similiar during and after grad school, in forest stream habitats evaluating different harvesting/roading methods. I like the Libellulidae larva-what a mouth.
I did my Master's under Dr. Len Ferrington, Jr. at University of Kansas. The Chironomid group was a small one globally. I probably know you. Are you Canadian? I had the pleasure of hosting Ole Saether at KU one summer with Dr. Ferrington. Do you know him?
No, I did my benthic analysis in the 70's, the chironomids were few in comparison to what you must have observed on the plains. For that work, my most involved taxonomy centered with the trichopterans, a fascinating, diverse group in first and second order mountain streams. Primary indices for macrobenthos were biomass, species composition and the old Shannon-Weaver Diversity--archaic now, I imagine. Worked in MT, then ID, one 2 yr prelog assessment, the other multiyear forest impacts. Academic degrees in Fisheries, I just got happily sidelined for awhile, had alot of fun with periphyton also.
Instinctive Rats vs Ideological Rats..
Right. But how many rats do you know who would abandon the sinking ship to hop a ride on the Burning Arsenal ship that's passing by?
"This business will get out of control,and we'll be lucky
to live through it."
Sen. Fred Thompson, in "The Hunt for Red October"
..
Eject, eject, eject!
Fire, fire!
Fire on the flight deck!
...
Fire on the flight deck. All hands lend assistance.
The bird's loaded down with enough fuel to get you there, but Dallas may not be there. "
Will Saudi Arabia (KSA) Ever Again Produce 9.6 mbpd?
For the purposes of this discussion, I define crude production as crude + condensate (EIA data).
We are approaching the one year anniversary of KSA’s first “voluntary” production cutbacks, which started in the first quarter of 2006. Saudi Arabian oil minister Ali Naimi was quoted as saying that Saudi Arabia had cut back production because they could not find buyers for all of their oil, even their “light sweet oil.”
From 2/06 to 7/06, US light, sweet spot oil prices rose from $61.63 to $74.41, as KSA crude production fell from 9.5 to 9.3 mbpd, and as KSA continued to massively increase their drilling program. (Media reports put projected KSA production at 8.5 mbpd in 2/07.)
One thing that I found odd was that while KSA was “voluntarily” cutting production, because of a lack of buyers, Iraq was increasing production from 1.8 mbpd in 2/06 to 2.2 mbpd in 7/06.
I have a question: Why could Iraq find buyers for their additional oil, but KSA could not?
Note the combination of Rising Oil Prices + Increased Drilling = Lower Oil Production. Where have we seen that before?
I remember, Texas--the prior swing producer, which like KSA, went for long periods of time producing at less than capacity.
Coincidentally enough, KSA production started declining “voluntarily” at the same stage of depletion, based on the HL models, at which Texas started declining. Just a coincidence, I’m sure--one of many.
We have frequently discussed that if KSA has peaked, the world has peaked, and in fact if Saudi Arabia had just maintained its 2005 peak production level, world crude production would be up and not down year over year. We can further reduce that to say that if Ghawar is declining, KSA is declining, and world production has peaked.
Back to Ghawar, where they were forced to go to horizontal wells, because the vertical wells watered out, because of the thinning oil column--and where the best case is that they are getting one barrel of water for every two barrels of oil, even with horizontal wells.
Are we seeing short term lower demand, because of a combination of a (so far) warm winter and perhaps a slowing economy? Certainly. But lower demand and Peak Oil are not mutually exclusive.
From one of the news stories above:
This sort of simplistic reasoning always befuddles me. Were there not other factors that may have contributed to a price spike? Say, Hurricane Katrina taking some supply offline, followed by problems in Nigeria, and then Iran saber-rattling? Have we never seen a price spike like this before? Did that mean that we were at peak? What to say now that prices are falling? Is that a sign that we are now not at peak?
The moral is that using price to signal peak is questionable at best. Lots of things unrelated to peak can cause prices to spike. Just a simply tightening of supply and demand can cause prices to spike. Just as I wouldn’t say that the current falling prices signal that peak is far off, I wouldn’t suggest that spiking prices mean that peak is here. When peak arrives, I do expect spiking prices. But even though B may follow A doesn’t mean that B signals that A has occurred.
RR, I'm sure you are right about the price signal being of limited usefulness for determining the exact moment of peak oil, also that the prices and demand are being distorted by ethanol, ng liquids, and synthetic crude, and the state of the US economy and the petrodollar vs. the Euro. There are just too many variables to rely on anything other than 20/20 hindsight.
Our friend WestTexas has been quiet about his ELP program of late, and it makes the most sense to me because it will make us all more happy even if we are dead wrong about peak oil. So Economise-learn to save and get by on 1/2 your current income
Localise-support your local merchants, artesans and farmers, learn to use local products and
Produce-learn to make a real product or provide a real service. Garden, repair shoes, learn to plumb, drill some shallow oil wells .
Our friend WestTexas has been quiet about his ELP program of late, and it makes the most sense to me because it will make us all more happy even if we are dead wrong about peak oil.
Sure, ELP makes sense for a number of reasons other than just imminent peak. It will lower greenhouse gas emissions, and it will save you some money.
Perhaps we should have a page what we did today to ELP.
Also what we learned from the experience.
"By 2025, the world's demand for oil is going to be 60% greater than it is today, while production capacity is thrown back to 1985 levels."
I think sentences like this show pretty conclusively how limited the understanding of basic economy is among both commentators and statisticians. It is pretty obvious that demand will NEVER outstrip supply by much because as we go along, the rising price levels will destroy most of it. Let us just assume for a moment that it is 2025 and the world has peaked twenty years ago. We are producing on 1985 levels and someone finds a giant oil field in, how about, the town of Pisa (that's why the tower was leaning all the time!). Suddenly the world has 60% more oil available and prices drop to $5/barrel. Where is the immediate demand going to go? Nowhere. As it turns out, there are not enough cars, power plants etc. around to burn 60% more oil and nobody needs the stuff any more. Many people are not driving EVs and hydrogen hybrids. What are they supposed to do with more oil? The car industry has re-tooled from SUVs to compacts and carbon fiber bodies. They would take years to design an SUV or pickup that people would buy (would you buy a sucky 20 year old SUV design if they built that old-timer again from the blueprints - in other words, would you buy a 1985 car today?). Moreover... there will probably be a serious carbon tax on oil, so that even if the price dropped to $5/gallon, the price for gas at the pump would not drop to near zero at all.
Infinite: Exactly. Another mistake that theorists make is postulating an extremely high coorelation between economic growth and oil supply. What is forgotten is that as the first world becomes more third world in nature due to globalization, the link between energy demand/supply and economic growth becomes less and less.Every day the USA is becoming more of a financial economy than an industrial one. The result: the rewards of the economy transfer to fewer and fewer (check out the average renumeration at Goldman Sacks vs. Ford) and less energy is required. The same thing is happening on a larger scale on the entire planet. Matt Simmons is really smart, but China will not become like 1979 USA, the USA will become like China/Hong Kong (unless drastic political change occurs, which is considered unlikely).
you don't understand how economies work, at least ours
the only way the US will ever require less energy is through a massive collapse, but never a slow process, it doesn't work that way, it can't.
if we all stood still in our energy use, the economy would collapse in a wink. we have principal and interest to pay, which we don't even succeed in doing with growing energy use
in this century/millenium so far, our national debt has risen by 150%, as per the GAO, from $20 trillion to $50 trillion, while energy use and demand went up. consumer debt may well be worse.
that has to be paid back, which is only possible through increased economic activity, and that means increased energy use
you cannot grow an economy on less energy, not now, not ever: it's not an "extremely high correlation", it's simply one on one
the US can only become economically like China through the gates of hell and back, the equivalent of political change on steroids
and I'll be the last to claim that's not in the works
You know that the Japanese did reduce overall oil usage, right? In "peak oil" I'd think that is the most pressing test.
The Japanese national debt currently stands at 150% of GDP, way worse even than the US. Even then, they are kept alive only by the Sony's and Toyota's, by selling things abroad. Interst rates in Japan are lower even than in the US, barely above zero percent. Kept alive by an external footprint, you could say.
When economies shrink, exports do too, and they won't have the moeny to be their energy.
Just watch what happens then.
So there is at least one other way, besides "the only way?"
Not only that..."reducing oil usage" means nothing if you don't consider the oil that went into imports. Japan imports 60% of its food...no doubt most of it produced with fossil fuels. They import raw materials, like steel from China. No energy went into making those, I'm sure.
The U.S. and Europe have also reduced their oil usage...on paper. Because they offshored the energy-intensive industries like manufacturing. Aluminum or plastic made domestically takes energy. Imported from Africa or China - no energy consumed.
Obviously, this calculus is going to change, when the peak is worldwide instead of just local. Talking about a country "reducing oil use" makes no sense unless you consider the oil that went into imports, and nobody seems to be tracking those numbers.
Very true.
You can cheat thermodynamics fo a while, but you can't beat it.
I can greatly reduce my energy use by letting you do my work, but what's the net effect?
So, no, Odo, there is no "other way", it stands as it does, and you know that too, so why ask the question?
Never heard of Carnot? 1824? How old are you?
Thermodynamics says that if you have a thermal reservoir with 5800K and another one with 350K, the Carnot Cycle can give you a limit for thermodynamic efficiency of 93.9%. That is the upper limit for the efficiency of solar cells. Practical efficiencies will go as high as 30-40% (with triple junction cells). In other words... at many sites like the Southwest of the US you can make something like 1-2kWh/m^2day. A commuter EV requires approx. 10-20kWh/day to get you to work and home. In other words... you can keep commuting for something like 10m^2 worth of solar panels. The price will be roughly 15 cents/kWh, i.e. your commute will cost you $1.50-$3.00 in energy, roughly the cost of a bus ticket. That is not going to break the piggy bank, is it?
There are many other ways. All you got to do is to think outside the box.
I can do 40 mph on 1.5 kW on my current electric bicycle (plus maybe 150 watts from me). With a more aerodynamic design I can either drop the power required or raise the speed. I've never gone through more than 5kWh in a single day (and that was to go to Milwaukee & back to Chicago). I doubt very many people commute that far.
Solar electricity may never get down to $0.15 per kWh, but at even current prices it could still be practical as a power source for commuting if people give up on the idea of using 2 ton vehicles.
"nobody seems to be tracking those numbers."
Actually, someone has made an attempt to track at least some of those numbers and if I can relocate the file, I'll provide you with the name/link.
You make a good point. I always consider commentary that employs the energy use/gdp ratio as uninformed.
I sent a graph http://www.theoildrum.com/node/2150#comment-145230 (sorry it doesn't look as good as the ones made by professionals) that confirms your point but in context with overall energy use it appears to be of no real help.
BTW I think there are some very knowledgable people around, thank you all for your comments (I would not even dare to place this thank as a comment to the fusion article ;).
As someone pointed out, overall Japanese oil consumption has been flat to lower, but I believe that their total energy consumption is up substantially over the same time period.
Is energy consumption from wind/solar/geothermal bad? Those are probably easy "no" answers. Nuclear? Harder, but in terms of "peak oil" ...
I actually do expect a powerdown in the US, as I've said before "whether we want one or not," but I'm not sure how to project that powerdown, or how much faith to put in my projection.
... but if you want to earn a brief post from me, just say "the only way" we'll reduce usage is "through a massive collapse," as the poster above did. I don't think anybody is that good, to know the "only" future ... do you?
Even so Japanese comsumption per capita is only half of that of the US. After all, we are importing as much junk from other countries as they do, if not more. On the bright side, if a significant amount of their food comes from the US, that energy would count towards the Japanese economy, not ours, effectively decreasing the ratio of per capita use between Japan and the US. I doubt it makes for more than a 5-10% effect, though.
As far as food is concerned in general, a more vegetarian and less meat centered diet makes all the difference. It would also greatly decrease cardiovascular disease and remove a lot of cost from public healthcare. I actually wouldn't mind replacing some of my beef and pork intake with beans. Sadly enough it is much harder to get a nice bean dish than a halfway decent burger in a restaurant.
You are absolutely right. Without constant growth the US will start going bankrupt within 2-3 years. Total debt is now close to $50 trillion (Federal, State, Local, Corporate, Household), or 345% of GDP, including the Treasury bonds held by Social Security.
The debt burden requires a minimum nominal GDP growth (i.e. including inflation) of 5-6% just make debt service possible. That is why the Fed cut interest rates near to zero in 2002-04.
Or... we just stop to escalate our military spending, start taxing the rich again, pay the debt back in ten years and are on our way to a civil society with universal healthcare. I know this does not quite fit into the neocon wet dreams, but I think those guys could jerk off enough already. Time to do politics right.
Alas that won't happen. Peak Oil is not a technical problem, it is a social / political / cultural problem.
Reducing the size of the US military by half and taxing the rich 10% more are not technical solutions, either. They are social/political/cultural. So is slapping a $1/gallon gas tax on at the pump. But it would solve the problem with PO for at least a decade, if not more, because people would buy smaller cars, thus consuming less oil.
:-)
would that it were so!
He Is: Open your eyes. Where and who is using the energy is the USA? The more the USA is an egalitarian society the more energy will be used. You figure out why. How much energy per capita are the poorest Americans using? Increase the number of middle class who become poor and you decrease energy usage.You are confusing economic growth (GDP) with a rise in median standard of living.
I do not completely agree with that statement. Personally I happen to be reasonably well off (for sure better than the median or even a typical middle class person), yet my energy use is a lot less than that of co-workers in my own company. If you look at the engineers here, they all drive compacts and reasonable size sedans and some drive a Prius. A couple of us, me included, commute on the train. The technicians, on the other hand, who probably make half of our salaries (or less) are the ones commuting 30-50 miles one way in 5.8l V8 semi-trucks. I don't think my company is an absolute exception. The difference is simply that all the engineers (most of whome have PhDs) around here are sending their kids to expensive universities while probably few of the technicians will. So the two groups are spending their incomes in vastly different ways. Large cars (not luxury cars) are a status symbol of below-middle class people while education is the status symbol of the technocratic middle-class.
Of course, the conclusion that making this society more egalitarian would increase energy use still holds because giving people more money does not equal giving them more common sense. However, this is where the federal or state governments will have to intervene and start thinking for people. I understand that this is considered un-american but I doubt that the realities of oil import cost and trade deficits will care much about Cheney's definition of the American Way of Life. It will go where it belongs: into the dumpster of history.
Your car preference observations are interesting. It is something that I've noticed where I've worked in the past, namely that the lower paid tended to drive the bigger vehicles.
Also true of our babysitters versus ourselves. We drive the hybrids, they drive the V8s.
Where I worked, in video games, the trend was the higher the income the more spent on vehicles. More expensive didn't always mean bigger, but even the smaller cars like Ferraris weren't terribly fuel efficient.
Myself, as my income went up my vehicle size went down and I retired young riding bicycles.
You've got to include the energy usage caused by what you do with the rest of your money, too. Not just directly on cars and such. Spend big bucks on sending kids to college? That has an energy footprint. Etc. Save it in the bank? Then it fuels other peoples' "growth". In my more cynical moments I am convinced that ones total energy use is directly proportional to ones income, and even giving it away will not erase that. You cannot change the way the world works.
That said, you CAN change the way the world works, slightly and slowly, by setting an example of a more reasonable lifestyle. And some are thinking of alternative economics. But it's probably too late for that, even if done by the thousands that are peak aware, to avert a collapse.
"You've got to include the energy usage caused by what you do with the rest of your money, too."
True in general, but in my own case pretty meaningless. I don't buy big stuff. I feel completely shopped out. We don't own a large place (the heating and electricity bill is trivial) and we can't stuff anything more in the amnount of space we have. The most expensive purchases are for things with negligible energy footprint like art.
"You cannot change the way the world works."
I don't have to because in case of energy the economics of it will make people change their ways. If it becomes more expensive, as it does right now, people can only use less of it.
"But it's probably too late for that, even if done by the thousands that are peak aware, to avert a collapse."
The "it's probably too late, anyway" argument is more of a psychological profile of the person who uses it rather than it is an argument for or against anything. If you look at reality, we are peaking as far as anyone can tell, yet, demand destruction seems to be ahead of the curve. You might not believe that it will stay ahead of the curve, but that is a belief, not something you can prove with facts. Europe and Japan are both more efficient per capita by a factor of two, so the US has plenty of space to conserve. We have plenty of space to up our investment in renewables, too. Truthfully, you ain't seen nothing, yet, in terms of energy use and the economic shift from an oil economy to an economy of renewables. Worldwide investment in wind and solar energy is around $30 billion, that is no more than one tenth of US oil imports and one ninth of the taxable revenue of the US car industry ($260 billion, I believe). In other words, there is at least a factor of ten to twenty in there and all we need to do is to replace 3-5% of our annual energy use per year. Per capita that amounts to investments of well less than $1000 per year for the comming decades. Not trivial but not impossible, either, and it can be financed with a mix of gas taxes and higher energy prices. Fixing social security and medicare will be MUCH harder.
Infinite: I re-read what I wrote and I agree with you (I misstated my argument). What I should have said is: the trend toward the rewards of the society being concentrated in fewer hands results in less energy use per dollar of GDP.
HeIsSoFly -
You state, "the only way the US will ever require less energy is through a massive collapse".
I disagree with that statement. Look at last year and mass exodus from SUVs during the height and immediate aftermath of near $80/barrel oil. That is proof positive that market economics can create a shift in consumer habits. On the same note, look at the massive sales increase for more fuel efficient vehicles at the same time.
Last year, 30% of Volkswagen Jetta sales were TDI (diesel) models, Toyota was sold out of their hybrids and SUV sales utterly collapsed.
Anectodal, I agree, but it displays a trend. You'll note that SUV sales have stabilized considerably since then as oil prices have plummeted. While correlation may not be causation, this is pretty strong evidence that marginal change can be made based on price and not necessarily "collapse".
Had oil prices stayed in the $80 range some seven months later, I would imagine we'd continue to see demand destruction and a move into more 'green' renewables. We'd see increased demand for efficiency in housing, transportation and the like as prices increased.
This wouldn't portend a collapse so much as a recalibration. I think that over the next 20 years as we go through more of these peaks and valleys in price that we'll see gradual progress toward more efficiency. With that efficiency will come a reduction in demand.
See Leanan's post above about imported products and their energy use. The domestic straighforward energy use in the US does not take into account the embodied energy in all our imports, a good portion of which are not being paid for in kind by exports containing a similar quantity of embodied energy. At least a percentage of the trade deficit should be considered in the energy usage column for the US.
Do you have a link with actual numbers? I would be interested to see how much more energy we are really using than what shows up on the domestic statistics.
Thanks!
There is none. That is the point. The energy statistics are all energy used in the country. Nobody tracks the energy contained in imports.
Which would admittedly be rather difficult. How much energy in a container shipment of videotapes or DVDs from China? Or in a nice new SUV from Japan? Or a ton of coffee or bananas from South America?
Exactly. I was hoping someone had a link to research into that topic. It is probably hard to keep these things straight, so I wouldn't attempt to do it myself without having done some serious research. But that doesn't mean that there couldn't be some smart economists (I bet there are a few of those, too) who are taking this one head on. I hope someone can post a link, after all.
A group of people (including Heinberg, I think) are setting up a database that will supposedly have the total energy costs of various consumer goods. For people who want to minimize their footprint. It's still only in the planning stages; they are considering charging a fee for access.
And some people have tried to calculate the "real" efficiency gains in the Europe and the U.S. after the '70s energy crisis. The general consensus seems to be about 50%. That is, 50% of the "efficiency" gains were actually offshoring - using the energy overseas instead of at home.
In any case, you can expect any numbers to be controversial. Look at ethanol. The experts can't even agree on whether it's energy-positive.
Perhaps most striking is that there is so little interest in the topic. We really are like fish, trying to imagine the desert.
I hope they will have a database WITHOUT fees... nothing else is going to fly.
I don't know how controversial the ethanol numbers really are. To me it seems more like we are looking at an early stage of a "nicotin is healthy" and "global warming will let you grow palm trees on Nantucket's sandy beaches" kind of campaign by the ethanol industry. This will stop over the next few years and the true scientific consensus will emerge. And that will probably be dire. The good that might come out of it is that people will start thinking seriously about the EROEI of solar technology combined with agriculture and that will probably lead to serious improvements in agricultural EROEI in a number of fields. Even ethanol production become actually quite feasible once you cut the oil and NG out of the production process and replace it with solar process heat and steam.
I like the desert... so much sun there for PV...
Very true.
The problem of embodied energy is central to any ERoEI study and a really tough problem and there is tons of ill-informed BS flying around about it. Solar PV is a good example. I spent a number of years reading and posting on energyresources. Moderator Tom Robertson would frequently lament the lack of a standardized methodology for doing ERoEI studies. A rough notion of various ERoEIs discussed over the years on ER that had various sources was in this ballpark:
Crude Oil ~10 or more
Nuclear ~5
Wind ~3
Solar PV ~2
Ethanol ~1
So when I see 'payback time' studies that people take as showing PV with 30:1 and even greater than crude oil, I know that things are out of whack and there are lots of apples and oranges flying around. The other reality check is the market place and the monetary cost. It would cost me roughly 6 times for PV electricity what I'm paying for the combination of coal, NG and hydro that we have in my neighborhood. So, if any PV mavens out there have a system that, when totally amortized over its 30 year projected life, will deliver me $0.15/kwh (twice my current rate), put your money where your mouth is 'cause I'm ready to buy.
The EU has passed, or is in the process of passing, legislation that will require all goods sold in the EU to indicate the carbon content. The intent of this measure is to inform the consumer so they can decide to buy broccoli from Chile or broccoli from the next village over. This measure goes beyond foods to require similar information be provided on all goods. Those folks are serious about GW.
Yes, there have been studies of this kind. But you'll most likely find them in subscription academic journals instead of on free websites. I worked with a woman who looked at it from the point of view of embodied CO2 (same diff) in the trade between the US and China. You can see a summary of the work at http://www.ucar.edu/news/releases/2005/china.shtml.
The trade deficit is around 900 billion. The GDP is around 13 trillion. The minimum amount of imported energy (in the form of imported products) is probably around 7.5% of our usage. Considering a large portion of the inports are energy intensive manufactured goods, the actual amount of imported energy is probably 10% or more of our usage.
Need I say more? Is massive sales increase clear enough? That is your economic system for you. You'll have to have that same massice increase year after year, though, so keep on importing the oil and the cars. Or else.
Building a few hunderd million new devices for everyting that you think could be more efficient, is a very inefficient way to spend the energy you have. It's a train of thought that only makes sense in a situation of abundant energy.
This is true for hybrid cars, PHEV, wind turbines, PV, all of it: it is only economically, and therefore, practically, feasible when you have an abundance of energy sources.
But that is in direct contradiction with why you wish to build and buy all these things in the first place.
And that is why it will never happen. Building energy efficient contraptions costs more energy than an individual or society with a shrinking energy base can afford.
"This is true for hybrid cars, PHEV, wind turbines, PV, all of it: it is only economically, and therefore, practically, feasible when you have an abundance of energy sources."
This simply is not true. Please think about it one more time.
PV has EROEI of 5-10, which means that you can double your PV resources every three to five years with nothing but energy from PV alone. Wind is even better and breaks even in shorter time.
Building a smaller, more efficient car requires less materials and less energy than building a large car. Since you have to replace the large car, anyway, there is a positive net gain in replacing it with a smaller one.
"Building energy efficient contraptions costs more energy than an individual or society with a shrinking energy base can afford."
You are wrongly assuming that the energy base will be shrinking because you believe that all energy we expend is used with 100% efficiency. That, as California, Europe, Japan and even China prove, is not correct. They all do more with less. What is really going to happen is that over the short term (10-20 years) we will decrease our average per capita energy use while increasing the efficiency with which that energy will be used. Over the long term (50+ years) we can even increase our per capita use again because renweables have plenty of room to grow.
Reality is not as simple as it seems. You have to take second order effects into account.
He is: One on one? As per the CIA Factbook: Saudia Arabia consumes 74% as much oil as India. India's GDP is 10.5 X larger.
Are you trying to say anything in particular?
I'm not geeting this. You forgot to mention that India's population is some 45 times the KSA population, and oil is not the only energy form, India runs on coal for instance..
But that's not the point. What is, is the growth of an economy, not a state it is in.
I think a lot of economists are truly unaware where the competitive advantages of Asia come from. While I have not been to the mainland, myself, I have seen Singapore, which is overwhelmingly Chinese in its population and cultural heritage. The economic advantages of a society which is much better planned and optimized in its land and energy use are totally obvious once you spend a few days there and dare to look around. Not only that, but life there is actually pleasant when compared to many American cities. Certainly, if I only had a choice between L.A. and Singapore, the winner would be clear. And if China and India manage to clean up their acts and environments, the US is completely hosed. We better start sending our urban planers and future architects to Europe and Asia now... or we will be structurally very sorry in a few decades.
Infinite: I would buy a 1985 Honda today. I don't think there has been much improvement. "Modern" improvements like power windows that you can't open with the car shut off and GPS navigation add nothing to my driving pleasure. And the gas mileage isn't much better in a Prius on the open road.
Power windows and GPS add almost nothing to the car's cost but greatly increase the price. They are the things that increase the profits over revenue for the manufacturer. I agree. But I doubt that they would sell a 1985 model to you for the price of a new car with similar core features... there have been significant increases in productivity and cost cuts over the past 20 years. So if they would build one of those models again without changing the design, it would probably come in way too expensive even without the extras. You would likely feel raped just looking at the price tag. Quality is a different matter... you actually might have been better off with the older models.
The problem with the Prius milage is that most people are not driving it on the open road. The Prius sells best to commuters in urban areas. That is what the car is made for and that is where it really beats non-hybrids. And all the Prius owners I know say that it roughly cut their monthly gas bill in half. It works and is a fun car to drive from all I have heard. It is also a nerd toy. You can get almost the same milage from a Yaris or any number if compacts sold in Europe... but at the price of driving smaller low cost models without the tech factor. Not that there is anything wrong with that...
From www.fueleconomy.com, you can compare the 1985 Honda Accord to the 2007 Honda Accord. For the 4-cylinder automatic you find that the 1985 version have 24/36 mpg city/highway, while for the 4-cylinder automatic for 2007 you get 24/34 mpg. Combined mileage has the 2007 beating the 1985 by 2 mpg. Not much that is true. HOWEVER, the 2007 vehicle is a 2.4 liter engine while the 1985 is a 1.8 liter engine.
As the CAFE standards have remained unchanged, automakers have channeled their upgrades into horsepower than to fuel economy.
Have to disagree on the GPS. I can now use it when lost instead of succumbing to my wife's demands that we stop and ask for directions.
As a hybrid owner, I agree more or less with Inf's assessment. The differences are, (1) again, horsepower, and (2) space for equivalent fuel economy car. If I could plug it in, however, then it would be a different ballgame. The hybrid would win no-contest.
My 2003 Toyota Corolla has manual windows & door locks. Gets decent mileage too. I put about 5000 miles a year on it. Hoping it lasts a long time!
California reducing carbon levels in fuels?
Am I utterly ignorant? How is this possible? Do these official mainstram-media utterances refer to using more ethanol? Does ethanol have less carbon per joule produced than gasoline?
Does ethanol have less carbon per joule produced than gasoline?
Yes, it does. In usual fuel there are 4 parts carbon with 9 parts hydrogen, in ethanol it is 4 to 12. On the other hand ethanol is less effective.
Sadly enough ethanol production has a very poor EROEI and requires a lot of oil/NG as part of the process. It is highly doubtful that there is any gain in total carbon footprint. The ethanol industry does not care. They scammed their way through politics already and are making the big bucks no matter what their impact on the environment is.
I'm perplexed by the thing about lower carbon contant too. On the other hand, if the cost of the fuel goes way up as a result of the government meddling then less fuel will be burned. California already has higher gasoline prices than most of the rest of the USA and also has lower per-capita gasoline ues than most of the rest of the USA; perhaps the two are related.
I don't know is this to laugh or to cry...
So the Tories are beating the Whigs by proposing 80% cut by 2050. The latter are expected to respond by moving the target to 90%, to which their competitors will respond with 110%! To the amazed public they will explain that by 2050 the Tories will make sure UK captures carbon from the air. Actually every party member will plege to instruct his/her grand kids how to inflate balloons and bury them underground.
Actually I made my mind - it is time to laugh, crying time is long in the past.
Some some interesting remarks about "What’s Behind the Crash in Crude Oil?"
Re: The Psychology of Peak Oil
I don't know how much of this is true. Maybe none of it is. I guess the, "anti-Dwights" have always been around in one form or another. They've been wrong quite a few times. They've lost some credibility. The, "Dwights" are still basking in an aura of invencibility. They feel like endless optimism is the answer. Most people want to be, "winners" and, "confident," so they tend to side with the, "Dwights." On the other hand, people like WestTexas have successfully used a mathmatical model to predict the peak in global oil production (although Oil CEO claims that he will debunk this argument shortly). Maybe the truth is, if it weren't for the whole, "Dwight - anti-Dwight" dynamic, the debate about peak oil would be far more reasonable and a greater fraction of society would be doomers?
I appreciate the kind words, but just to clarify, the HL work on the world that Khebab did and that I interpreted, was really just in support of Deffeyes' prediction that 2006 was the most likely year for the start of a decline in world crude production.
The semi-original work that I have done (again based on Khebab's work) was on net exports and in predicting that 2006 was the most likely year for the start of the Saudi production decline. But again, I was building on prior work done by someone else, Matt Simmons in these two cases.
It's hard to imagine that Saudi production will soon be down 1 million bpd. The fat lady has sung. Good call, my friend.
OK folks. When SAT starts saying the Fat Lady has sung, it's time to listen and get scared. He has uncanny insight into world economies.
Hi SAT. Well, all my stop losses in crude kicked in a while ago, so I am totally out of the energies at the moment and mainly in cash. (However, I enjoyed the over 5% jump in soybeans and corn on Friday, very sweet). Nice to be on the sidelines while crude had another lousy week.
So how is your crystal ball? What is the next crude buy point? $50? $47?
Is there a pivotal issue that makes you think they've peaked?
I like your comments. You, Halfin and Stuart should post more often. It's healthy to write.
Someone just e-mailed me this:
http://news.bbc.co.uk/2/hi/americas/6255781.stm
Tortilla prices are on the rise:
I have a feeling globalization is going to prove a very evil thing to have done to Mexico.
One of the complaints about globalization I've often heard is that farmers in developing nations couldn't compete with subsidized grain from industrialized nations. Now higher grain prices are generating the complaints. Does matter what happens if it can be connected somehow to globalization it must be bad.
Can you really not see what's wrong with this picture?
Globalization would be fine, if the cheap oil fiesta was going to continue forever. But it's not. Now people who need corn for food are bidding against people who want to put it in the tanks of their SUVs.
Goodbye cheap corn imports for Mexico. Corn supply estimate lowered by USDA
http://tinyurl.com/y9bxal
Ahhh, the ethanol connection again. Just wait until there's a tequila shortage!
This was also discussed several days ago, on Drumbeat.
Interestly, Iowa St ag economist and director of ISU's Beef Center, John Lawerence, predicts an annual state production of 11 billion lbs DG's and a new beef feeding center.
Yes and I also pointed out that the Canadian government is expecting a GLUT of high protein feed to hit the market as a direct result of US corn ethanol production.
And as I've noted since my return from D.C., I apparently have been accused of being a corn ethanol 'shill' - an assertion I find to be quite hillarious as any Drummer who has read my posts would know that I have ALWAYS advocated that in order to address the LTF crisis we face 1) conservation will play the biggest role 2) corn ethanol is but a stepping stone to 2nd and 3rd gen production paths and most recently 3) that the US government should implement an organic corn ethanol mandate as this would greatly increase the EROEI while decrease the environmental impact of corn ethanol production.
I did in fact have the opportunity to broach the latter (point 3) with my collegues in Washington, however, from the responses received, I can see that such a mandate will be an uphill battle indeed.
It also looks as though Cherenkov has asked me for some homework re: the positive EROEI of corn ethanol and I am only too happy to oblige.
Here are the links to both the Hill and Farrell studies respectively:
http://www.pnas.org/cgi/content/abstract/0604600103v1
http://www.sciencemag.org/cgi/content/short/311/5760/506
These scientific papers are the absolute most current studies of corn-ethanol to date and should you STILL come away saying that Pimental is correct with his "corn ethanol EROEI is negative even with a 30% increase in efficiency" garbage... well sir, I can't help you.
Big E Allan (if you're around) thank you for bringing that conference item to my attention. I unfortunately did not have the chance to attend that particular session, however, as you are no doubt aware, energy was a huge topic on the Hill all week.
Have a great weekend everyone.
www.defendscience.org
Here are the links to both the Hill and Farrell studies respectively:
I have the Farrell study in my hand. A couple of key highlights:
"Corn ethanol reduces GHG emissions only moderately, by about 13%."
"Key issues remain unquantified, such as soil erosion and the conversion of forest to agriculture."
They also developed some "alternative metrics" for evaluating ethanol that made it look a bita better than our standard metrics. They admit that results are highly sensitive to the assumptions that go into the calculations. So, should I be surprised that Kammen, an ethanol advocate who has appeared on TV hawking the wonders of ethanol, could come up with some "alternative metrics" to exaggerate ethanol's benefits.
The bottom line though is in the GHG emissions. You can cut through all the BS and ask why even the ethanol advocates only found a 13% reduction in GHG emissions (and did not consider the fact that cows fed DDGs emit more methane, a potent GHG). Why such a mild GHG reduction? Because ethanol has such a high level of embedded fossil fuel inputs. Play with the alternative metrics all you want; that's the bottom line.
Our very own Nate Hagens had a response published in Science to one of these pro-ethanol studies. As he pointed out, they were mixing their metrics: Look at gasoline one way, but ethanol another way. When you do that, ethanol can look better than it really is. But you can't get away from that GHG conclusion.
And Canada has just announced that it is taking the US to the WTO over corn subsidies. We want to make your corn even more expensive.
Softwood lumber is resolved so I guess we have to find something for all those lawyers to do.
Well Robert perhaps you should email the following in return:
The New York Times
February 26, 2002
Manzanillo Journal;
In Corn's Cradle, U.S. Imports Bury Family Farms
...The powerful force of American agribusiness, unleashed in Mexico by the North American Free Trade Agreement, may doom the growing of corn as a way of life for family farmers here, agronomists and economists say...
...Mr. Rebollo is one of about 3 million Mexicans who farm corn and support roughly 15 million family members. His grown sons have left for the United States to make a living, and Mr. Rebollo says he may be the last man to farm this patch of earth. It is the same story all over Mexico: thousands of farmers pulling up stakes every year, heading for Mexico City or the United States. Some grew coffee or cut sugar cane. But most grew corn. Roughly a quarter of the corn in Mexico is now imported from the United States. Men like Mr. Rebollo cannot compete against the mechanized, subsidized giants of American agriculture...
..."Corn growing has basically collapsed in Mexico," Carlos Heredia Zubieta, an economist and a member of Mexico's Congress, said in a recent speech to an American audience. "The flood of imports of basic grains has ravaged the countryside, so the corn growers are here instead of working in the fields...
...The facts are stark. Since Nafta took effect eight years ago, imports of corn to Mexico from the United States have increased nearly eighteenfold, according to the United States Department of Agriculture...
....
Once again... protectionist trade policies of the OECD are the bane of the developing world -a fact I have pointed out many times for TOD readers.
Leanan is right, globalization and Mexico have not been great dance partners and I would like to thank Robert for providing us with -sadly- one of the world's best case studies of how a nation's agro-economy can be affected if not utterly destroyed by such policies; the results of which are highlighted in both my post and his.
THANKS to US corn ethanol production, however, the current farmgate price of corn should lend its way to a revival in Mexican corn production as the country's farming communities will finally have the fiduciary incentive to return/stay in Mexico and work the land as their forefathers have for generations.
Meanwhile back at home... at $3+ a bushel, the millions of $$$ in subsidies that US corn farmers would have otherwise been paid from Drummers back pockets this year as insurance against depressed prices -a direct result of the decade long glut of over production- will be cancelled.
Imagine that.
Meanwhile back at home... at $3+ a bushel, the millions of $$$ in subsidies that US corn farmers would have otherwise been paid from Drummers back pockets this year as insurance against depressed prices -a direct result of the decade long glut of over production- will be cancelled.
Right. Instead of paying millions in corn subsidies we now get to pay billions in ethanol subsidies and higher food prices for everyone.
Imagine that. But hey, at least the farmer is better off. But we would have been better off just sending them a check and cutting out the middle man.
Nice dodge on the Mexico subject. Care to admit that I'm right?
Meanwhile... handing US corn farmers a vertible blank check is exactly what has been happening for years -to the tune of billions if you want to get specific- checks drawn from your bank account.
Are we trading subsidies for subsidies? That's up for debate. So too, however, is your assertion that there will be higher food prices for everyone because ethanol production has finally brought the price of corn up to what it actually costs to grow it.
Does no one see the irony in this situation?
Please explain how my 6 cents worth of corn in a box of corn flakes raising to 8 cents next year, is not going to be blown away by the transportation costs of shipping said box in a world of permanently declining fossil fuels?
Nice dodge on the Mexico subject. Care to admit that I'm right?
No dodge, I just didn't have any comment on it. Did cheap corn put a lot of Mexican farmers out of business? Maybe it did. Will those who have moved to Mexico City suddenly be able to pick up and start farming corn again? That's the issue. Rising corn prices will be an inconvenience in the U.S. In some other countries, it will mean starvation. Mexico won't be able to simply turn up the corn production switch in an instant.
Are we trading subsidies for subsidies? That's up for debate.
What is the debate? The price of corn is increasing due to demand for ethanol production. Ethanol production is being directly subsidized to the tune of around $2.5 billion and growing. Legislators are trying to make this subsidy permanent. Which part is up for debate?
So too, however, is your assertion that there will be higher food prices for everyone because ethanol production has finally brought the price of corn up to what it actually costs to grow it.
My family farms. I grew up on a farm. Don't try to pull the wool over my eyes by claiming that corn farmers have been losing money all these years. They haven't been. Oh, some have, but people lose money in every business. But now everyone is starting to make some real money. That is true. However, we are all subsidizing and encouraging more corn farming, which is one of the most environmentally destructive crops to farm.
Please explain how my 6 cents worth of corn in a box of corn flakes raising to 8 cents next year, is not going to be blown away by the transportation costs of shipping said box in a world of permanently declining fossil fuels?
Corn prices are up much more than the 33% in your example above. Yet with the poor EROI of corn ethanol, permanently depleting fossil fuels will not only mean much higher corn prices, it will also mean much higher ethanol prices. If you take away the cheap fuel crutch, ethanol costs are going to be much higher.
By the way, I note that you had trouble convincing anyone to talk about changing the ethanol subsidy. That's the real problem here. You might like to subsidize only ethanol from organically grown corn, or ethanol plants that recycle their methane and use it for their boilers, but you are running up against entrenched ag state handouts that aren't going anywhere.
I have seen the future. This experiment ends after many, many billions in subsidies and sky-rocketing ethanol and corn costs. The first really bad drought we have will probably be the initiator. But Peak Oil will expose corn ethanol as the pretender that it is. Sadly, we will have spent many resources pursuing this false solution, which will probably doom many people.
Doubtful. Many of the former corn farms have been converted to other uses. That was supposed to be what happened, right? Grow luxury crops that bring in more money than corn.
Here's another article about the tortilla issue:
Tension heats up over Mexico's rising tortilla prices
re: Candu in Canada ("Can Do" ?? or "Canned Doo"???)
Could we apply EROEI to this situation please??
How much energy (not money, ENERGY!) will we have to spend to construct a nuclear power plant in the middle of Alberta/nowhere? How many planeloads of stuff have to be flown in, more big trucks, all sorts of energy-guzzling stuff. Take all that energy spent and SUBTRACT IT from the energy supplied from the goop. A process that has a crappy EROEI to begin with. Oh, and don't forget the energy costs of mining the uranium, refining the ore, and then enriching it so we can use it in the first place. What is the energy cost of enriching uranium?? Gotta think a little bit of juice is required to accomplish this. Etc, etc, etc...
To me, this all seems so simple and obvious. And, really, I'm not that bright... ;o)
Sadly enough, it still might work out economically for the companies. Stock market investors might be willing to speculate on oil prices of $80\barrel or above. These investments are not always being made on a rational background.
But you're talking about money. MROMI: Money returned over money invested.
My point is about EROEI: ENERGY.
We "create" money. Well, kindasorta...
We cannot create energy! (First Law of Thermo)
EROEI has NOTHING to do with money.
I completely agree with you that mining tar sands is nonsense economically and ecologically. But what rules is the chance for some people in the industry to make serious money. And that's how the decisions are being made. In a future far, far away we will probably have abundance and a global science council will be running things on Earth... or maybe I am just talking about the SciFi of the brother's Strugatsky here. For now, people dream up stuff that can create wealth in a stock market world fueled by dumb money.
Here you're converting nuclear energy into process heat for tar sands refining. It doesn't matter if the process has a crapping energy return, you're producing a product, not energy. Oil here is just an energy carrier, the source is partly nuclear.
For the nukes themselves, the energy return is huge even with enrichment. And CANDU uses heavy water moderation so you dont even have to enrich the uranium.
http://www.nuclearinfo.net/Nuclearpower/UraniuamDistribution
Nuclear power in the tar sands is all but inevitable.
I was an advocate of Nukes in Alberta until today.
If the article is correct and only a tiny % of NatGas usage will be offset by an insitu reactor, then what's the point?
The point is that after the first couple of reactors break the ice, the others will start following in geometrical progression - given the obvious technical, enviromental and economical benefits. By 2030 you may very well have replaced all NG for tar sands production with nuclear.
The current hurdles are political (NIMBYsm) and economical (long lead times - largely because of the political hurdles). So if you remove NIMBY you may very well have low-carbon syntetic oil production in 2-3 decades.
My TV just had a test of the Emergency Alert System. I saw one a couple of days ago, too. The crawl says it's a monthly test.
Hmmmm...
Kill your TV.. it's sending subversive messages to your houseplants. (It gave up on you when you started going to TOD)
Hello TODers,
I would like to refer everyone to Leanan's EnergyBulletin toplink on the Victory Gardens--I think it is a key essay--goes into much more detail than my past postings on the need for 150 million wheelbarrows, and transforming most of our labor force into permaculturists.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Sharon Astyk is a gem.
Check her blog too, casaubonsbook.blogspot.com.
She writes far too much for a farming mother of four though, she has me worried.
I've been reading her for a few years now on
http://tech.groups.yahoo.com/group/RunningOnEmpty2/messages
She's
sharondownonthefarm
GREAT POSTS. Also Linda Graves on the Same Yahoo list... Great Knowledge, both of them.
Yes, I liked that one, too. IMO, she hits on what many peak oilers overlook: the cost of specialization. It's oil that allows 3% of the population to feed the rest of us. If more of us have to become farmers, that means less of us to be engineers, scientists, teachers, etc.
It was only a few generations ago that school was seen as a waste of time by many Americans. The kids were needed on the farm, and would be kept out of school or pulled out before high school. College was for the wealthy elite.
They weren't just ignorant of the advantages of education back then. The economy was different, and prompted different choices.
I'm not saying we are necessarily going back to that model, but I do think peak oil will mean more of our economic activity will be directed to food production, and less to specialties like science, engineering, and teaching. Which is going to make it harder to innovate our way out of our problems. We may not even be able to maintain our current level of technology.
Leanan,
With all due respect, I think most of the technology developments of the past sixty years have been worthless or of marginal benefit at most. Let's take a look:
1. Television--an experiment that failed.
2. Jet planes gave us global tourism. Ugh.
3. Computers gave us computer games and Internet porn. Plus, information is so easy to access that many seem to have found it hard to imagine that with a good librarian and a library you can find just about anything you want, though it may take a few days.
4. Cell phones. Of marginal benefit. Dangerous when misused.
5. Microwave ovens--nice but hardly important.
6. Birth control pills--helped spread STDs--and completely unnecessary for reducing fertility, as shown by the statistics on falling births during the Great Depression.
7. Computer controlled cars--hard to fix and vulnerable to EMP.
8. The Green Revolution--created more poverty and undernutrition than all other factors combined. Doubling in human misery over the past forty years.
9. Miracles of modern medicine--prolong the last year or two of life into a meaningless agony. However, I make an exception for cancer treatment, which has twice saved my sister's life.
10. Pick your own.
Now it may be that I'm an old fart unimpressed by progress, but IMO we'd mostly be better off with 1950s technology than with current tech. (By "we" I'm including the two billion or so humans that can be kept alive with 1950 technology.)
Thanks to the Green Revolution and cheap fossil fuels we are now so far into overshoot that it is hard to imagine a decent outcome for most of the world. Am I a doomer? Yes and no: Yes for the poor countries of the world, but a tentative "Not necessarily" for the rich countries.
Don;
It's a new year, cheer up! Run around your neighborhood naked or something. (Apologies if you're already doing that.) I shouldn't take the bait, cause you're obviousely in a muddle. The other day, when you started grousing that 'all the great songs were written by the sixties/seventies', I should have just let you have your snit and be done with it. It was all I could do not to drop in a few measures of "Those were the days.." when Carol O'Conner crooned it to us...
-but come off it!
All computers do for us is internet porn? (Links, we need some links to verify)
The Green Revolution CAUSED all that hunger and despair, or simply was unable to quell it?
(No good deed goes unpunished..)
and "Pick Your Own" is certainly thousands of years old, and must be stricken!
I just hope you're not stricken, bro.. go on, strip down, get out that door and cleanse, cleanse thyself in the frigid Minnesota breezes!
Bob
Thanks, it went down to zero tonight so I built a big bonfire, invited all my neighbors over, then we stripped to the buff and danced naked while drinking hot unbuttered rum.
All better now;-)
1. Television - I learned calculus on my own from a tv college program. Worked for me.
2. Jet planes: I can live in the US and visit my parents in Europe any time I like. Works for me.
3. Computers. I use them mostly for computer aided design. Now I don't have to cut hundreds of pieces of black tape any more to make a printed circuit I will sell to your for a couple grand. Oh, yes, the quality of my designs has also improved because I can simulate them before I build them... Works for me.
4. Cell phones. I use them to meet my girlrfiend after work. We are more flexible that way and she has to drive less because I can get off at the right train station. Works for me.
5. Microwave ovens. Did you know that microwave ovens use the same technology that lets us communicate to our spacecraft flying to the outer solar systems? And microwaves make sure that those jet planes don't collide, too. Works for me.
6. Birth control pills. They make sure that less people get pregnant, so the population explosion we feared so much did not happen. Works for me. STDs are as old as mankind. You could get them just as easily before the pill was invented. Probably easier...
7. Computer controlled cars. Never seen one fail. They just work for me. Maybe you need to buy a better brand? Think TOYOTA and HONDA.
8. The green revolution. Works for me. You, on the other hand seem to grow all your veggies yourself? Good for you. I couldn't care less because I don't have to go hungry. Chances are, without it, I would. Actually... the chance for that is 100%.
9. Miracles of medicine. Works for me: when I broke my ankle, I had surgery and they fixed it. I can walk, run, pretty much anything. Without the surgery I would have been limping in pain for the rest of my life. Worked for me...
10. Pick your own. The internet. Every doomer now has an outlet for himself. In the past you had to stand at the corner and hold up that sign "The end is near! Repent!" until your arms hurt. Not any more. Works for you, it seems. Works for me, too. Now I can laugh about you all I want and nobody will scold me for not leaving the village idiot alone.
"Now it may be that I'm an old fart"
What do you mean by "it may be"???? Isn't that a given after this rant? Not sure what was so great about 1950s technology, anyway. It was good enough to make nukes to whipe out the world but not good enough to give a clear picture of astronauts in orbit and on the moon. It really sucked pretty bad, if you think about it. Just compare that to the clear pictures we are getting from Mars and Saturn right now. The nukes to blow all of us up are still pretty much the old 1950s designs...
Actually, the Apollo 11 video that we all saw on TV was really degraded from the original source:
http://www.wired.com/wired/archive/15.01/nasa.html
Now if we could only find those tapes!
Bah, Humbug!
Has the Internet helped people to make better decisions than we did in 1950?
Are American politics more effective now than in 1950?
Are more than two billion people now undernoursihed?
I rest my case.
Ah but the internet gave us TOD so we can say these things to each other. I find it a lifeline.
"Has the Internet helped people to make better decisions than we did in 1950?"
It does help me. But then, I am also being helped by a place called "The Library"...
I think you are looking at two different problems here: the role of technology as an enabler, which is real, and the inability of the American public to use that function, which, unfortunately, is also real. Don't blame the internet for this intellectual misery, blame your schools.
"Are more than two billion people now undernoursihed?"
You mean the two billion people who are not participating in the green revolution because they live on lands with subsistence farming? What does that prove? That subsistence farming is not good for you? We have archeological history spanning ten or fifteen thousand years to back that claim up, for sure. No need to start a headcount.
In 1950 there were far far fewer than two billion undernourished people living in absolute poverty and misery. The Green Revolution enabled the population explosion that has multipiled misery and hunger and despair.
Don't evade the point.
maybe when you have lived as long as the sailorman your opinions of whiz bang technology will change...........
I can agree with one point:
1. Let us accept that the green revolution has resulted in say a tripling of food production (don't know if it is true - but seems to be conventional wisdom). So now we have three times as many people with partial nourishment. For e.g. the population of India is up from ~300 million to ~1 billion. The number of hungry people are up from max. 300 million to a number far greater than 300 million.
The "Green Revolution" is one of those things that seems like a great leap forward at a glance, but on further analysis, maybe not quite...
The GR depends on commercial hybrid seed, chemical fertilizers/pesticides/herbicides, and more water. Totally unsustainable. To the benefit of you-know-who, and to the detriment of traditional farmers. This stuff requires "economies of scale".
Thus, as small farmers sell out or commit suicide by the thousands (often by drinking pesticides, fittingly), the lands get concentrated into bigger and bigger holdings, and more and more dependent on fossil fuel "inputs". Hundreds of local varieties of rice are lost forever, along with their resistance to various climatic conditions and pests, etc. This story is repeated all over the world (rice, corn, potatoes, whatever).
Throw GM crops into the mix (you can't save seed - it's right there in the contract!, and with "terminator technology" you don't have that option anyway), and now you've got the GR squared. GM crops are IN NO WAY about feeding the Third World. They're about enriching Monsanto and their ilk, period.
This is just one of the most hideous aspects of "globalization".
- sgage
I agree 100%.
From what I have read, traditional farming methods (at least in India and perhaps in other societies) were sustainable yet productive on a per acre basis.
Infinite
Your #6 "the population explosion did not happen" may be a bit off. Take two aspirin and call me in the morning.
#9 about the broken ankle - most broken ankles can be, are, and have been treated with low tech medicine. Few broken ankles cause a lifetime of pain and suffering.
Your other points similarly overstated, dubious.
If you cut the efficiency of modern farming in half, it does not matter how many people are working on the fields. You will still starve. Let's look at a modern tractor:
http://www.deere.com/en_US/ProductCatalog/FR/series/7020_small_chassis.html
This small tractor has 95hp. Let's say you need 40hp to plow that field as this machine does. One hp is approx. 750W in SI units. So that means we need 30kW of power for plowing. A single person can produce approx. 150W or one sixth of a kW. In other words... that tractor produces the equivalent power of at least 200 people. Even if you allow for ten times the time for plowing, it still takes 20 people to replace that one machine alone. Those 20 people will require ten times more expensive food than the tractor will ever require in diesel or bio-diesel.
On the other hand... a handful of SUVs probably consume more gasoline than that tractor needs to do the agricultural work to feed a hundred people. So what are you going to give up first... SUVs for commute or that tractor? Very simple: Dad will pay whatever it takes to buy the bread for his family. Consequently the farmer can always charge enough for his grain to fill up his tractor and everyone eats. But because bread is so expensive now and gas is too, Dad might simply give up driving his SUV to work and instead take the bus or share a ride.
You are right... more energy will go into agriculture in relative terms. That does not mean there will be more people working on the farm. Quite the contrary, the more cost for agricultural production will rise, the fewer people will work on the farm because machines are always cheaper than people. Even machines that run on solar electricity.
As for the trend in engineering and teaching jobs, the correlation is clear: China makes more and more engineers and teachers and less and less farmers and they are economically expanding because engineers produce an order of magnitude more GDP than farmers. The US, on the other hand, makes far fewer engineers than it needs and has to import people from Europe and Asia to get these jobs filled. If this stream of immigration were to be cut off, the country would be in technological free-fall.
"It was only a few generations ago that school was seen as a waste of time by many Americans."
And I thought that was a rather recent development. See how litte I know? It turns out this country was always stupid, expect for the smarts to let the smart people they needed immigrate.
"College was for the wealthy elite."
And look at you! Nothing has changed! Ooops, I take that back. Now most kids go into retail rather than work on the farm. And those jobs are just as great: no health insurance and arbitrary work hours set by your boss. If you complain, someone will be fired. Way to go, kids, way to go!
<
If you cut the efficiency of modern farming in half, it does not matter how many people are working on the fields. You will still starve.
>
Far, far less than 50% of the grain grown is eaten by people. If we lost half the grain supply starvation could still be avoided by eating a greater percentage of the grain. And there are many ways of increasing food supply such as replacing some of our decorative trees with ones that produce food or growing vegetables instead of lawns of grass or at least grazing poultry, rabbits, goats, etc. on our lawns.
But that would require more energy - human energy. The average American prefers to conserver their energy by popping into the microwave a tasty frozen dinner made mostly from industrial corn processed by industrial cattle.
From your link:
“Oh no, we’ve never done that. We’d have to wash it, and how would we know it wasn’t contaminated?”
In spite of the irony in this statement, it remains one of the biggest hurdles for small farmers.
Quality assurance to the market, and getting around the endless regs, red tape and ungodly expenses written by business and the state. It seems impossible to sell anything for food, given both constraints.
My father has a funny story he used to tell. Before WW11, he's home on leave from the Coast Guard, for the first time, real money in his pockets, in dress whites and beaming. He wanted to give his folks a chicken dinner. So he hurries down to the market, buys the chicken, and returns. Then the chickens were sold live. He's about to knock off the head, then gets worried about blood splatter on his uniform as the ax is falling. Down comes the ax, misses the neck, upsets his balnce and he falls splat in the mud. The chicken ran off into the woods.
How different our markets, our fast food culture.
Found this little jewel while reading about rising tortilla prices in Mexico.
"Mexico leader in tortilla pledge"
On Thursday, government officials from the Federal Competition Commission said that they were investigating claims that tortilla companies around the country were manipulating prices and restricting supplies to boost profits.
"If we detect monopolistic practices, we could impose fines of up to 70m pesos [$6.4m]," commission director Eduardo Perez Motta said in a statement.
Under the 1994 North American Free Trade Agreement, Mexico used to get cheap corn imports from the US, but Mexico's Economy Minister Eduardo Sojo said that with more US corn being diverted into ethanol production, supply was dwindling."
Link: http://news.bbc.co.uk/2/hi/americas/6255781.stm
There's a discussion of this story upthread.
I don't know how I managed to let this one slip by yesterday. I thought Bush came within a breath of using the "draft" word in his Wednesday night speech. Instead, he was just waiting for the Democrats to take care of that necessary logistical detail.
Anti-war Rep. Rangel re-offers military draft bill.
Congressman Rangel is Chairman of the House Ways and Means Committee. By "everyone" he means women and university students as well.
My teenage son is an American and the US will still be in Iraq, and lord knows where else, when he turns 18. Maybe this is what it will take to mobilize the American public to end these wars.
I wouldn't count on it. Rangel has been harping on this since before the Iraq war started. It's his way of protesting the war.
I agree... you can have any two out of these three: the war, the draft or votes in the next election. You can't have all three at the same time. I am sure that the draft will bite the dust because politicians will not give up the votes and they won't be able to stop the war.
I do hope you are right. We don't know much about the US politics of implementing a draft up here in Canada. We have never had a proper draft.
If they were going to bring back the draft, they'd have to have done it on September 12, 2001. If Bush had asked for the draft the day after 9/11, he might have gotten it.
I can't see it happening now. Rangel is just posturing. He knows it will never happen. He's just trying to make a point.
And I suspect a draft won't be needed in the long run. As the economy sours, military recruitment will rise.
What they are doing is a "back door" draft--extending the service for the guard and reserves and dipping deeper into the pool of the IRR (people who never dreamed that they would be called back to active duty).
I think you are right for now, Leanan.
But: in between the lines of Bush' speech, and Gates' numbers, 92.000 new soldiers, and their admission that it will take at least another 5 years of US presence in Iraq, it's getting hard to see how they would carry on without a draft.
Letting the economy implode might go a long way there, though, as would handing out green cards in return for service. Thing is, in 1991 there were a lot more men and women in active service and reserve than there are now, and I bet you they are looking at those numbers and will present them at their convenience.
The opportunity to tell the American people that Clinton let the army get so much weaker is just too beautiful to let go. Ace up sleeve.
What hit me yesterday was the fighting words vs Iran and Syria, but countless "experts" have shone their light on that already.
I know of too many examples of politicians who hid their domestic failures by mobilizing the economy and the population versus an enemy abroad.
And those history lessons make me fear for America. Can you imagine the impact of a 2nd 9/11 on the psyche of the people?
No, I can't. I've thought about it a lot. I think if it had happened shortly after 9/11, the American people would be up in arms. Nuke the entire Middle East and let god sort 'em out might not be too extreme.
But now? The wars have not turned out well. People have gotten cynical. Most Yankee fans I know, even the flag-waving types, are sick to death of "God Bless America" during the 7th inning stretch; some even blame the song for the lack of World Series rings since 9/11.
It's hard to say for sure, but my feeling is that another 9/11 would turn the country against the president. Even more than they already are. They would either suspect he was behind it, in a "Wag the Dog" scenario, or they would blame him for not protecting us.
"my feeling is that another 9/11 would turn the country against the president."
I agree, and the attack would not have to be as severe as the first.
If it's not as severe as the first then it won't be by orchestrated by Osama. He's been quite clear that if we don't make some progress on his seven or so demands (stop interfering in the politics of Islamic countries, stop unconditional support for Israel, etc.) that his next action will be much more severe.
It might be the logistics of doing a much bigger attack are what has given us the long respite, but I've read in several places that he has been making statements to the Arab/Islamic world seeking approval for a major escalation. They might just be waiting for better polls.
It could be the logisitics, but even if they aren't able to purchase atomic weapons from former Soviet states or from Pakistan there are incredible amounts of radioactive waste to be had for really nasty dirty bombs. And even if that is too difficult for them to acquire (but I doubt it) even the supposedly safe DU that we've scattered all over Iraq and Afghanistan would likely be unpleasant if ground very fine and packed into ieds to be detonated in Manhattan or our other large cities.
I can't imagine how the US public would respond to an attack orders of magnitude more severe than 9/11. But even if everyone turned on Bush I'd expect we'd be in for more escalation as opposed to reconciliation. And I think that's why Osama/Al Qaeda will wait until their support runs very deep.
And they would be right either way. Without going too deeply into a TOD taboo topic... The US govt's complete lack of interest in border and port security (or even those scary liquids on checked airline baggage) is not consistent with protecting the US against a dire foreign terrorist threat. Either there never was a serious foreign threat or the US govt couldn't care less about protecting the public.
"Can you imagine the impact of a 2nd 9/11 on the psyche of the people?"
Yep. They will learn what everyone with half a frontal lobe already knows:
1) The war in Iraq did not make us any safer.
2) Terrorists can hit any time they like and there is little that could be done about it.
Some truths require a few iterations before they sink in.
You guys need to read the entire month of January at
http://www.tomdispatch.com
Lord Browne to retire early
I thought the more important news was that BP is building five wind plants with 550MW capacity in 2007 a year ahead of schedule and has signed agreements with turbine manufacturers last year for over 2000MW capacity.
I know that many think BP is just trying to look green. Personally, I don't think so. There is a fast growing $30 billion market in renewables. Why would they leave money on the table if they can get into this market now for cheap and grow with it? I wouldn't be surprised if BP was going to be the first oil company to receive more revenues from renewables than from oil a few decades down the road. I could be wrong, of course, about how smart they are. They sure look smarter now than Exxon and some of the others.
Hope the door hits him on the way out. He was the Blair of business.
Hell, half the politicians probably think that carbon is like lead in the gasoline. If they require the oil companies to take it out of the gas, they will.
Heh... reminds me of a once popular TV show in Bulgaria, where they were making interviews with prominent local politicians about a very dangerous problem - the alarmingly high percentage of Hydrogen in bulgarian water - more than 11% by weight! :)
A lot of them took the bite.
Water fountains all over the country tainted with dihydrogen monoxide!!!
Signs of dihydrogen monoxide intake intake include:
Increased desire to urinate
Lack of thirst
Wetness of tongue...
NO GLOBAL WARMING
Inconvenient Truth banned in Seattle suburb schools
"Federal Way School Board on Tuesday placed what it labeled a moratorium on showing the film."
http://seattlepi.nwsource.com/local/299253_inconvenient11.html
"School Board members adopted a three-point policy that says teachers who want to show the movie must ensure that a "credible, legitimate opposing view will be presented," that they must get the OK of the principal and the superintendent, and that any teachers who have shown the film must now present an "opposing view."
"Condoms don't belong in school, and neither does Al Gore. He's not a schoolteacher," said Frosty Hardison, a parent of seven "
That's it. Game over. I weep for my country.
Believe it, mister. 40-60% of the population of the most wasteful nation on the planet prefer to believe that global heating is just made up by Al Gore; to believe otherwise would be, oh, inconvenient I suppose for continuing their "party on, Garth" lifestyles. Anybody who thinks otherwise needs to look at the last 6 years and contemplate how delusional the discourse is in this country.
"Believe it, mister."
Alas (and woe betide!), I DO believe it. I have been waiting for decades to see some sign of intelligence in the culture and politics of my dear USA. I was brought up to think that sooner or later, the body politic will do the right thing. All I've ever seen, and what I see now, is very deeply delusional discourse.
"credible, legitimate opposing view will be presented," The kicker is "credible"
We've just had two years of exceptional warm, exceptionally wet winters here in the Northeast US.
I understand that it's not possible to conclusively say this results from global heating, which results from human carbon emissions (though I "believe" that to be the case): But here's how a Republican friend of mine greets 50 degree weather in January:
"Isn't this weather just lovely?"
I don't live in the US, and I was surprised to read this Washington Post op-ed by Laurie David, a producer of "Inconvenient Truth". Is this as bad as it sounds?
More on this in posts by John F. Borowski:
Largest Science Teachers Organization Rejects Gore Video ... Why?
World's Largest Science Teachers' Organization Awash in Denials
More proof that Cantarell is crashing. The link is in spanish, but you can roughly translate it through google.
^/\swco
The largest source of oil yet to be exploited is the gluttonous waste of oil by the American way of life. Peak oil will produce a slow decline, not a sudden crash. A slow dieoff is still a dieoff. A sudden crash will occur because of something else. There will be plenty of evidence that supports the optimists view that peak oil isn't so bad. However, it is unlikely that we can have a slow decline for 20 years and nothing goes wrong. Something probably will go wrong. It could be weather, war, financial crisis or a combination. The free market won't save us. The government won't save us. The government is more likely to be part of problem than the solution. When the system fails there will be no solution. If the system can't save itself, it can't save anybody.
Here's the thing: we can't know anything precisely. Follow the debates between WT, R2 and Darwinian (scolling past the usual trolls), and see what I mean.
And that uncertainty is PRECISELY what makes me a "doomer." We have lots of talk, no action.
Well, not just because I share my name with this well-regarded journalist, but that this seems relevant to any discussion of Oil and Politics.. With all the heat thats rising from Carter's book "Palestine..", I wonder how much the current wars are- 'it's the Oil, stupid', as opposed to 'it's Israel, stupid'?
http://news.independent.co.uk/world/fisk/article2097774.ece
" call it the Alice in Wonderland effect. Each time I tour the United States, I stare through the looking glass at the faraway region in which I live and work for The Independent - the Middle East - and see a landscape which I do no recognise, a distant tragedy turned, here in America, into a farce of hypocrisy and banality and barefaced lies. Am I the Cheshire Cat? Or the Mad Hatter?
"I picked up Jimmy Carter's new book, Palestine: Peace Not Apartheid at San Francisco airport, and zipped through it in a day. It's a good, strong read by the only American president approaching sainthood. Carter lists the outrageous treatment meted out to the Palestinians, the Israeli occupation, the dispossession of Palestinian land by Israel, the brutality visited upon this denuded, subject population, and what he calls "a system of apartheid, with two peoples occupying the same land but completely separated from each other, with Israelis totally dominant and suppressing violence by depriving Palestinians of their basic human rights".
This is Bob Fiske, with Robert Fisk.. for the oil drum
Ready or not, this blog predicts $20 a barrel.
At this point, that wouldn't surprise me a bit. I've learned that oil prices tell us exactly nothing about the timing of peak oil.
But here's a comment by my beloved professor, [Craig Bond Hatfield http://hubbert.mines.edu/news/Hatfield_97-4.pdf](made ten years ago), that is so indisputable it should make everyone shake in their boots:
Welcome to the latest round of complacency.
Just think back to the price of tulips or the price of dot.com stocks.
Of course someone here is going to make up a rationalization regarding why this happens by evoking another arbitrary noise, "speculation". But isn't all pricing "speculation"? Aren't we always speculating about the "value" (in monetary terms) of one thing or another?
As long as we "feel" that our recent speculations were a truth of some sort, we feel happy and complacent.
As soon as we get an inkling that our speculations were just that, irrational assesments of the reality (irrational exuberance), we switch into panic mode.
I used the comparison once that "catastrophists" see "the scratch and not the table top."
Panics are real, market crashes are real, but they are rare (perhaps relating to a power law?). Now, are you upset because prices won't predict the scratch? That they can only tell you about the table?
Fact is, most years we don't have panics, crashes, collapses, die-offs, and so on. And I think prices might indeed tell us something about that stability. Stable prices probably are an indication of a stable period.
The real trick for catastrophists is that catastrophes are so rare that there may not be any reliable way of predicting them. Indeed their triggers may be largely random.
If that's the case, the best strategy for the catastrophist is probably to predict a catastrophe every year, and then hope he lives long enough to see one ;-)
We value large SUV's that take us to new heights of self-importance.
We value muscle cars that make us feel all powerful.
We value McMansions that make each of us a Burgher and a King of his own white castle. (yes all very punny)
Think that's all chicken "scratch"? Think again.
It's more like T-Rex claw marks.
The human termites are eating away at the table that feeds them.
We eat because "The Price is Right".
Those aren't scratches.
They are termite holes.
Very soon the table will collapse.
Cause we et' it all up.
Cause the price was right.
huh. I went on a six mile hike today and spent part of the time thinking about how much I valued my boots.
... but that doesn't change the good work in things like the Black-Scholes formula, or Mandelbrot on cotton prices, or even Vernon Smith on experimental economics. I'm all about limits to prediction, but I'm not going to punt, spout gibberish, and declare that prices tell us "exactly nothing about the timing of peak oil."
Though with a witch doctor like you around, all we need to do is shake the bones.