DrumBeat: February 20, 2007

Weak oil theory

After months of shadowboxing with the fanciful spectacle promised by Peak Oil Theory -- conventional world reserves are running out and prices will soar -- now may be the time to move on to another, more realistic perspective. A number of analysts are gearing up for a major oil-price correction, one that could drive a barrel of crude back down to a level that better reflects oil's long-term price: US$30.

Wind power blows through China

The central government's heavy hand helps spark opportunities for Chinese and international players to green up the coal-fired country.

Saudis' cutbacks raise oil concerns: Some question country's reserves

It is not just the decline that is troubling, Hamilton said. "I don't know for sure what the answer is, but I find the facts disturbing."

  • Cutbacks started when prices were high.
  • The Saudis have been nearly frantic in their recent drilling for more oil.
  • Some reports show the Saudis increasingly relying on lower-quality, less valuable oil.

Russian economics ministry forecasts oil, gas exports growth by 2010

Russia's economics ministry said Monday it forecasts growth in oil exports to 273 million metric tons (some 2 billion barrels) and natural gas exports to 221.6 billion cubic meters.

In 2006, Russia's oil exports totaled 249.9 million tons (1.8 billion barrels) and natural gas exports 201.1 billion cu m.

Russia Lowers Economic Growth Forecast, Cuts Crude Oil Estimates

Russian leaders have warned that growth, which has been bolstered by oil and gas and helped the country pay back billions of dollars in debt, may slow as energy prices fall. President Vladimir Putin has urged the country’s largest companies to do more to lessen Russia’s reliance on raw materials exports, as crude oil prices dropped below $60 a barrel this year.

Why the precautionary principle doesn't cut both ways

Tillerson's plea is one that is heard daily in industry circles when any kind of regulation is discussed, especially any that are labelled "environmental." The argument amounts to an economic precautionary principle. We are told that we must not allow any regulation to proceed if it could harm economic activity. After all, what will happen to the poor, corporate leaders say, if we cannot lift them up with economic growth? (There is, of course, no discussion about lifting them up through the redistribution of wealth, say, via public services; naturally, that kind of discussion is considered a breach of etiquette among the world's CEOs.)

Japan, China Agree to Restart Gas Field Talks as Soon as March

Japan's Prime Minister Shinzo Abe and China's Foreign Minister Li Zhaoxing Friday agreed to resume talks as early as March on possible joint development of gas fields in an area claimed by both countries in the East China Sea, a senior METI official said Monday.

Pollution chokes Ulan Bator skies

Mongolia is one the most sparsely populated countries in the world, with about 2.6 million people. But it is becoming increasingly urbanised - according to the UN Population Fund, 60% of the population live in urban areas, approximately one third of them in Ulan Bator.

Governor Richardson Announces Tesla Motors Assembly Facility for Albuquerque; 400 New High Wage Jobs

Tesla Motors, based out of San Carlos, Calif., will use the plant to produce its “WhiteStar” car, a four door, five-passenger sports sedan, which is 100 percent electric. The New Mexico plant will be the company’s first assembly facility in the United States.

Will CO2 Drilling in Southern Utah Solve Global Warming?

Work is underway in Southeastern Utah on a big and very expensive scientific experiment. The idea is to see if part of the solution to global warming is tucking greenhouse gases deep underground.

US 'Iran attack plans' revealed

US contingency plans for air strikes on Iran extend beyond nuclear sites and include most of the country's military infrastructure, the BBC has learned.

Guilt-Free Pollution. Or Is It?

Some carbon-offset firms have begun to acknowledge that certain investments like tree-planting may be ineffective, and they are shifting their focus to what they say is reliable activity, like wind turbines, cleaner burning stoves, or buying up credits that otherwise would allow companies to pollute.

Artificial trees: A green solution?

Carbon capture, in the form of "artificial trees", is one idea explored in the BBC Two documentary Five Ways To Save The World. But could these extraordinary machines help to mitigate our excessive burning of fossil fuels and its consequence, global warming?

Australia refused talks on sea levels, island nation says

The Prime Minister of a Pacific island nation in danger of being submerged if sea levels rise, Tuvalu, was rejected by his Australian counterpart when he sought a meeting on the topic, senior Tuvalu officials said.

Energy solution is growing on trees

Sweden, Finland, Austria, Britain and Germany, among others, are investing heavily in energy plants fuelled by woody waste, often mixed with flammable municipal waste.

IT goes green

The inconvenient truth about IT can be found in a simple equation: at the heart of every computer is a machine that sucks in power, and creates information plus heat.

China plans to shut smaller, dirty, power plants

The State Council, China's parliament, recently endorsed a plan to accelerate closure of the nation's smaller coal-fired power plants. The plan, developed by the nation's top two energy policymaking bodies - the Office of the National Energy Leading Group and the National Development and Reform Commission (NDRC) - sets forth concrete targets for decommissioning older and smaller plants.

Aim for low world warming despite hardship-scientist

The world must aim to limit the temperature rise due to global warming to just two degrees Celsius (4 F) despite the near impossibility of achieving it, World Bank Chief Scientist Robert Watson said on Monday.

It isn't gridcrash that makes the lights go out

There's been some interesting discussion since the revision of the Olduvai Hypothesis about gridcrash and blackouts as a likely indicator of infrastructure crisis. Personally, I don't really have a strong opinion about whether the grid as a single entity will live or die.
...But what I do have a strong opinion on (you knew there had to be something ;-), is this: I think most of us ought to be preparing for a life without electricity, regardless of whether we believe that peak oil may cause disruptions in the electrical grid.

Latin America prepares for prosperity, sparked by biofuel boom

International maize prices, driven up by the burgeoning US ethanol biofuel industry, have soared to their highest in a decade, making farmers in Mexico, Brazil and Argentina feel as if they have just won the jackpot.

CERA: High Rig Costs, Tight Labor Markets to Support Gas Prices

Rising rig costs and a tight pool of qualified labor are likely to support natural gas prices over the next two years, according to Michael Zenker, head of global gas for Cambridge Energy Research Associates.

"Rig rates climbed 30% per year in 2003, 2004 and 2005," Zenker said in an interview at CERA's annual energy conference here.

CERA’s peak oil critique has a credibility problem

Headed by Pulitzer Prize winning petroleum historian Daniel Yergin, CERA employees hundreds of people who study energy developments. In the last two years, CERA has spearheaded a campaign of peak oil denial. One of its senior staff, Robert Esser, has been quoted as saying, “Peak oil theory is garbage as far as we’re concerned."

CERA’s arguments about peak oil are showing a few chinks in the armor. Consider just the following...

EU backs target to cut CO2 emissions

European Union governments agreed Tuesday that the 27-nation bloc should cut carbon dioxide emissions 20 percent by 2020.

They also said they would support a steeper 30 percent target from 1990 levels if other industrialized nations would match European efforts to curb global warming.

Drilling for information in energy sector

Stephen Carter comes from a family of oil and gas drillers and explorers. His father, grandfather and great grandfather were all in the exploration business. He grew up in Dallas, where all his friends and neighbours were in the business. If it rains over there, it rains oil. So when he called me up in the middle of last year to tell me he was leaving his hedge fund, AndrewCarter, and starting a new hedge fund, Keyrock Energy, with hedge fund manager Hohman Finney, I wasn't surprised. But I was a little annoyed.

Bright idea? Australia pulls plug on light bulbs

Australia has announced plans to ban traditional light bulbs in a move Prime Minister John Howard called a practical step toward slowing climate change.

Global warming scientist is encouraged

A top scientist in the study of climate change says she is optimistic about public understanding of the dangers of global warming.

"I'm incredibly encouraged," Susan Solomon beamed after speaking to the annual meeting of the American Association for the Advancement of Science.

Is U.S. near a tipping point on global warming?

U.S. policy on global warming seems headed for a tipping point, with politicians, business leaders and economists joining environmentalists to call for new laws to limit greenhouse gases that spur climate change.

Robert Newman's History of Oil

British comedian Robert Newman's humorously insightful perspectives on oil and how the world became addicted.

Michael T Klare: Targeting Tehran

Has Bush, in fact, set a specific time limit on his patience? Although it is impossible to know, there are a number of indications that such a limit has been set, possibly for later this year.

Getting a fair sheik

Saudi Arabia has not had an easy press on its attitude to global warming. It has been portrayed abroad as being as much in a state of denial about it as American neo-cons. The accusation is that it does not support alternative energy because oil revenue would be hit and so it stubbornly refuses to accept the existence of climate change.

South Africa: We can avoid the energy crisis

Appropriate energy models and proper management of natural resources were needed to avert a looming energy crisis in southern Africa, said Science and Technology Minister Mosibudi Mangena yesterday.

Nationalization Contracts to Come into Effect by March 15

The 44 contracts negotiated with 12 oil firms as part of Bolivian President Evo Morales' nationalization program will come into effect by March 15, government news agency ABI reported hydrocarbons minister Carlos Villegas as saying.

Venezuela's Real Enemy

Given the current direction of the Chavez government, al Qaida is the least of its worries in regard to its oil production.

That's because, even in the absence of an attack, Venezuela's oil production is declining at an alarming pace.


I really appreciate the new drumbeat - quiet, relaxed, fruitful discussions - look, its been on for a quarter of an hour and no strange comments :)

Yeah it is really nice to have the old TOD back. I really want to thank the editors for getting rid of the following people:

1. dmathew1 = "Humans are evil; Americans are evil; oil industry is evil although I consume their products; technology is evil although I have internet and cable TV; no, I am not a pompous, depressed, hypocrite who loves to not practice what he preaches, humans deserve to go extinct; humans will go extinct; Chinese are evil just like the Americans,....."

2. Hothgor = "I am too intelligent to be fodder like those frontline troops in combat; if you are not a warmonger imperialist like me then you are an anti-American liberal......"

3. Freddy: well you get the picture; I don't have to write about him :-)

In fact, you didn't have to write any of that.
It doesn't show a lot of class.
The idea is to return to, or move towards, an environment of more respect.
That includes everyone.

I did regret my own comment at the top after posting as I realised some repeat discussion about the ban would restart. Sorry about that.

I agree that I shouldn't have written that. But the sense of relief was overwhelming and I got carried away.

Exhibit A: Why posters 2. and 3. were not the problem.

WOW! I still can log on!

The rocket must have missed me and hit Matthews...

No point in starting flame wars against people who cannot now answer back :-(

two comments.

1. if you judge a person or group of people by their actions then dmathew was right our actions are evil. that is of course your one of those humans who care for the only known world in the universe harboring life over money.

2. continue parsing the ideological purge, but don't come crying to me or anyone else when you end up on the wrong side of the next one as the editor's here including leanan demonstrate how thin of skin they actually have by removing people who *gasp* have different views.

As boring as you continue to be, your comments do not capture the sentiment of the many "thank yous" I have received in the eds box over our decision...and perhaps, if you would do a little thinking instead of whining, which may be too much to ask, the fact that you are still posting perhaps answers your cries of unfairness.

It was not an ideological purge. It was not a perspective purge. It was a purge of a lack of civility and respect for what we are attempting to do here...and, frankly, if you don't buy that, I could really care less.

As I said over on the other thread:

Here is the policy (which I would hope people would ascribe to in their every day lives, but perhaps that's too much to expect from adults): be civil, be respectful of others (including typing in a manner suitable for someone over the age of four), and you can participate here, whatever your perspective.

Not that we have to justify our decisions, but none of us enjoyed making the decisions we made the other day; however, know that we will do what we need to in order preserve TOD as place where we can talk about ideas in a civil and respectful manner.

It got out of hand, and it was dealt with. It will get out of hand again, and it will be dealt with again.

If folks don't like how we do things around here, oh well. You're always welcome to go elsewhere.

We made decisions. If you don't like them, as I said above, I could really care less.

First of all, there is absolutely no evidence that dmathew1 cares about the environment any more than the CEO of Monsanto. Writing melodramatic posts on the internet is not evidence of any constructive action.

Secondly, after you have heard him for the first time, there is no point in listening to him again. He has nothing new to say other than the rant I posted in my original comment.

The third point I want to make is that he is a hypocrite. If he truly believes that technology, electricity, oil industry, etc. is evil then why does he not build a shack in the woods and live off the land? He mentioned in one of his posts that he has cable TV with 200 channels (or something like that). Don't you see the contradiction?

And last but not the least, yes, it is true that humans are selfish and all evil flows from that. But that will never change. So what is the point in bringing it up again and again? If you really believe that humans deserve to become extinct then you have start with yourself by committing suicide (I am not really advocating suicide; this is rhetoric).

This is my final post in this thread.

I have been hacking the TodBan script in order to add a function that gives an overview of the number of posts per poster for the current story:


* function "Show users" that opens a new window containing a table with the list of posters along with their number of posts and their ban status.
* added TOD:Europe and TOD:Canada

The original set of instructions from Greenman is here:


Note: I'am not sure the "Manage Posts" function in the GreaseMonkey plugin is working properly. I suggest you to first remove the script and then restart Firefox before installing the new one.

Hi, Khebab. More changes from me, mostly just cleanup. They're in the change log. http://stalkylittleboy.com/todban.user.js

Thanks! I've updated my url above with your version.

Looks great, guys! Stalky: did you merge out khebab's change to add tod:europe and tod:canada?

Three days, and the reason for the script went away, and you guys turn my hack into a masterpiece.

I'm just too old to keep up...

I changed www.theoildrum.com and europe.theoildrum.com into *.theoildrum.com.

I'm thinking to add a Hide Thread option next to Subthread in each comment's header bar. When clicked, it would hide the post and all replies, but leave the header bar, changing the option to Unhide Thread. Any thoughts or requests?

Maybe it's time to learn how to write a proper Firefox extension...

Feature creep. Leave that for a server-side upgrade. Let's finialize this and I'll slap a fresh version on my page.

To others: apologies for airing this stuff on the public forum.

I agree, this is not the place. Sorry, all. GreenMan, Khebab, I'm chris at stalkylittleboy.com; if we're going to keep working on this, let's discuss it somewhere other than the drumbeat.

I agree, my address is Khebab@TheOilDrum.com

About firefox extension, there is GreaseMonkey script compiler:


but it seems to produce only .xpi compatible with FireFox 1.0.

Wow! This is fantastic. I installed Greasemonkey several days ago and was trying to create a ban script myself, but I just don't know enough about javascript to do it. This will make TOD much more pleasant to read.

Thanks, Khebab and all the moderators of TOD for your work on keeping this forum reasonable. It's a breath of fresh air among all the other sites and their flamewars, caracter assassinations, strawman arguments and pointless "how many angels on the head of a pin" quasi-philosophical pissing contests. :)

Hey, any chance of getting a version for Windows XP for those who dont run Firefox?

If you are asking for an Internet Explorer version, no. It does not support this sort of plugin.

Firefox does run on Windows. Try it, you'll like it!

Yes, try Firefox. It works great on Windows XP. And it has free plugins for just about anything.

Including many that are helpful at blogs like this one, such as HTML formatting, spell-checkers, etc.


Altanta Journal Constitution

Meanwhile, Saudi production is reportedly down about 1 million barrels a day from an average of about 9.5 million barrels a day through much of 2005.

It is not just the decline that is troubling, Hamilton said. "I don't know for sure what the answer is, but I find the facts disturbing."

• Cutbacks started when prices were high.

• The Saudis have been nearly frantic in their recent drilling for more oil.

• Some reports show the Saudis increasingly relying on lower-quality, less valuable oil.

The questions about Saudi Arabia tap into an ongoing controversy.

WestTexas....check...I've hung my hat on their demise is now, well actually 18-24 mos back.

Yeah, seeing that article, I did wonder if James Hamilton maybe reads Westexas' stuff.

My usual disclaimer: I was building on work done by Simmons, using Khebab's graphs.

The more I think about our future, such as it is, the more I am convinced the Alan Drake is outlining our best chance for getting through this thing:



The author of the Atlanta Journal article is Michael Kanell. He told me in an e-mail last year that he reads TOD from time to time.


This was up on Bloomberg earlier:


Feb. 20 (Bloomberg) -- Saudi Aramco, the world's largest state-run oil company, discovered a new oilfield in the Persian Gulf kingdom, the official Saudi Press Agency reported today, citing the country's oil minister, Ali al-Naimi.

A well, known as Dirwazah-1, located 70 kilometers (44 miles) southeast of Ghawar, the world's largest single oil deposit, pumped at least 3,915 barrels a day of crude and 11.9 million cubic feet a day of associated gas during tests, Saudi Aramco said in an e-mail.

Al-Naimi said last month that Saudi Arabia, also the largest producer in the 12-member Organization of Petroleum Exporting Countries, had 3 million barrels a day of spare oil output capacity.

Persian Gulf states such as Saudi Arabia, the United Arab Emirates and Qatar, which pump about a fifth of the world's oil are investing billions of dollars to expand production facilities and search for new deposits as ageing fields decline.

Just throwing this one down...what if Saudi really does have the capacity? What if there is a strategy to cover the lost production from Iran once the Israeli (proxy US) attack is unleashed?

There are two ways to build surplus capacity:

1. drill and develop
2. cut production

KSA has been doing both.

I'll bet the White House calls KSA Oil Ministry every week and asks "can you supply 2.5 mbpd to cover Iran's exports yet?".

I think KSA surplus capacity is the wildcard in all this. They may have gone on their drilling spree not because they were unable to maintain current production, but because they were unable to maintain their desired level of surplus. They may have been cutting production to maintain that level of surplus, and drilling like mad to try to increase (or rebuild) it.

As a point of information, the Saudis recently stated that 9.5 mbpd was 'flat out', and as an unrelated reminder, Iran exports no oil to the US.

So unless they get production down to 7.0 mbpd from around 8.3 to 8.5 mbpd now, they won't have 2.5 mbpd surplus capacity anytime soon.

I've also heard that "pumping flat out" production comment. I'm not sure I take it at face value. I could be convinced that it means "as much as we are willing to pump". Aren't they still claiming to have over 10 mbpd capacity? We'll have to see.

I'm aware that the US does not import from Iran, but they also have an interest in not pulling 2.5 mbpd off the world markets in the event of a conflict. The same people who thought they were going to be greated as liberators of Iraq and showered with flowers may think they can keep oil flowing out of the Gulf without interruption after the shooting starts.

Dear Sangiovese,

Your comment implies the Iranians will simply shut off thier own oil exports. I find this wildly improbable. From what I have read, a few missiles aimed somewhere near a few oil tankers entering the gulf will persuade most oil tanker owners the risk is not worth the trip. Iran has been developing missile and high speed torpedo technology for some purpose. The entire width of the Strait of Hormuz is easy reach.

Why is this story featured on Bloomberg, but not the main MSM venues?

USS Stennis Carrier Group Deploys Into Gulf Region


Iranian President Mahmoud Ahmadinejad today rejected a United Nations Security Council resolution that called for the suspension of the country's uranium enrichment program.

The Iranian people ``will protect their nuclear rights until the end,'' Ahmadinejad, pronounced ah-ma-deen-ah-ZHAD, told supporters at a rally in Iran's northern Gilan province today. The comments were carried live on state television.

The Revolutionary Guards Corps said it was planning to start a three-day exercise yesterday to ``preserve the readiness'' of its troops, Iran's state-run Fars news reported on Feb. 18.

The nuclear-powered USS Stennis is accompanied in the Middle East by a flotilla of naval vessels including the guided-missile ships USS Antietam, USS O'Kane and USS Preble, according to the U.S. Navy statement.

Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, dominates the Strait of Hormuz. The waterway links the Gulf with neighboring Omani waters and is the main thoroughfare for oil tankers shipping the region's crude exports.

This is the top story at Yahoo right now:

U.S. Navy buildup came after Iran moves

MANAMA, Bahrain - Iran has brought its war games maneuvers over the past year into busy shipping lanes in the Straits of Hormuz, the narrow mouth of the Persian Gulf through which two-fifths of the world's oil supplies pass, the top U.S. Navy commander in the Mideast said.

The moves have alarmed U.S. officials about possible accidental confrontations that could boil over into war, and led to a recent build-up of Navy forces in the Gulf, Vice Adm. Patrick Walsh said in an interview with The Associated Press and other reporters.

During maneuvers, Iranian sailors have loaded mines onto small minelaying boats and test-fired a Shahab-3 ballistic missile into international waters, he said.

"The Shahab-3 most recently went into waters very close to the traffic separation scheme in the straits themselves. This gives us concern because innocent passage of vessels now is threatened," Walsh said in the interview Monday on the base of the Navy's Fifth Fleet in the Gulf island kingdom of Bahrain.

The moves have alarmed U.S. officials about possible accidental confrontations that could boil over into war, and led to a recent build-up of Navy forces in the Gulf, Vice Adm. Patrick Walsh said in an interview with The Associated Press and other reporters.

Ha! That's rich! Worried about an accidental confrontation? Throw a few more people into the pool.

just a quick comment on something that struck me a odd....

the man's title is :"World Bank Chief Scientist" Robert Watson

whats next, "newscorp's department of ecology and earth sciences"?

Why wouldn't the World Bank have a Chief Scientist? I'm actually glad they do. Especially Robert Watson, who was IPCC chair when TAR came out. We (the US) did not want to have him return, despite the backing of scientists and most of the developed nations. Of course we (the US) did not get the Assessment report we wanted (it's all OK, we can have our Hummers and McMansions, no problem), so maybe in the end that whole controversy was much ado about nothing.

Two articles of note:

Samsara recommended the following article on US military encirclement of Russia:

V. Putin & the Geopolitics of the New Cold War:
Or, what happens when Cowboys don't shoot straight
like they used to...


I offer up the following article:


737 U.S. Military Bases = Global Empire

I posted the engdahl link yesterday on Drumbeat - found it the most thought-provoking analyzis of US Nuclear ambition I have read in a while.


Samsara recommended the following article on US military encirclement of Russia:


While we are ALL looking towards Iraq/Iran
(justifiably so) The REAL game is the Grand Chess board (Zbig) and all the bases blocking Russia and China from the Gulf.

The Nuclear developments are VERY scary.

For background on how this unfolded, and the players you GOTTA read this one.

Donald Rumsfeld's Long March


Learn how him and Cheney got together, and how we got here.

A must read I think. It is a great companion to the V. Putin - Nuc's article.

These Rumsfeld articles are great not just for what they say about current politics but for how they show how politics and industry work and work together. Thanks for posting this!

GasBuddy has created a cool USA Temperature Map (for gas prices):



Sheesh! California has become a red state. I saw diesel the other day for more than $3.00 a gallon.

If Energy is the first priority, a sound currency is a close second.

Nice graphs for the TA-types.

Monetary history shows that no fiat currency has ever survived, which suggests a 100% probability that the dollar eventually will be destroyed.

...If so, then gold will never again go back below $600, just like I expect that it will never again go back below $500 (which I consider to be a 75% probability), or $100 (a 98% probability) or fall to $35 (a 99.99% probability).

The $35 rate of exchange to the dollar ended with President Nixon's decision to abandon the gold standard, creating the fiat currency we have today...

James Turk


Monetary history shows that no fiat currency has ever survived

Correct me if I'm wrong...aren't all currencies today fiat currencies?

That would seem to indicate a bit of risk.

EDIT: I forgot. "It's different this time."

Switzerland has the closest thing to a non-fiat currency. Their constitution requires that a certain percent of the countries currency value (I believe 25%) be backed by gold holdings. Hyperinflation should be impossible for them.

Any currency is a fiat currency - even precious metals. After all, the use of anything as a currency is dependent on a population's willingness to accept it as such. Gold may be far less destructible than paper, but to a starving man it is equally useless. Besides, using gold as a currency requires believable scales and some method of breaking it up. It also would require the possession of chemicals to differentiate it from, say, iron pyrites [aka fool's gold].

Everything changes even noation states and currencies.

James Gervais aka ImSceptical

Yes, you make a good point. I would add that currency has value because it facilitates division of labour.

I don't think URskeptical, just ah... "ill-informed."

Yes, "everything changes" including currencies - but Gold is always the Currency of Last Resort when government fiat currencies go up in the smoke of hyperinflation. It's been used as a store of wealth for 5000 years for a reason.

Gold is not a "fiat" currency. It has intrinsic value that does not depend on "government fiat," and cannot be created at will (inflated away) by government. It is a store of wealth for those with wealth that wish to protect their wealth from an irresponsible government.

Central Banks hold paper currencies and gold (well, except for Britain and a few others who sold the last of their reserves when gold hit it's 20 year low ~'99/2000).

Is a dollar bill useful to a "starving man"? So is gold - both can be used to buy food - even if the starving man has to convert it into the fiat paper demanded by the government.

As for "believable scales" and "breaking it up"- gold can be used in grams quantities and can be "broken" - just as you would break a dollar.

As for "chemical tests" - Do you test your dollar bills to see if they are counterfit? Buy gold coins minted by governents you trust.

SOP, thanks for the reply.

Yes, of course, gold has been used as a store of wealth by people for many years. And it has some unique properties that make it attractive as such.

I'm sure you already know the following but I wish to buttress my original remarks as follow:
To be a 'currency', any metal needs to have some standardization of value. The usual practice is to put a specific amount into a coin and mark it distinctively. In other words, an issuing authority has legitimized its use.
If such standardization is not done, the person trying to obtain other goods must essentially bargain with the holder of such as to how much metal is to be traded; in other words, they are bartering. And there is always the possiblity that the holder of the desired goods isn't interested in that metal or any other.
Of course, as we all know, in an economic meltdown, a fiat 'currency' will also be useless.

James Gervais aka ImSceptical

I do see where you are going with this and, at the extreme, it is true.

I remember reading an old sci-fi book in the 70s about society after a plague wiped out 99.9% of the people.

The remaining people reverted to tribal life and used silver quarters to make arrow heads. Best use for them at the time.

I wish I could remember the name of the book, but it was out of print when I read it.

The name of the book is "Earth Abides," and the author is George R. Stewart. It is a most excellent book and based on sound science; the author consulted with some leading biologists before writing, and the anthropology in the book is sound. I've read that book half a dozen times and plan to read it again.

Organic molecules convert heat to energy

BERKELEY, Calif., Feb. 19 (UPI) -- U.S. engineers report successfully generating electricity from heat by trapping organic molecules between metal nanoparticles...

The researchers said their discovery marks a milestone in the quest for efficient ways to directly convert heat into electricity...

"Generating 1 watt of power requires about 3 watts of heat input and involves dumping into the environment the equivalent of about 2 watts of power in the form of heat," said Professor Arun Majumdar, principal investigator...


Every time I see "nanotechnology" I end up wondering "what's the 2nd Law hit here?" It is no wonder that computer chips are so energy and resource intensive to make, they're (shall we say) seriously nonspontaneous. Will nanotech have the same issues, and if so, what will the entropic cost be?

One could argue that the last few decades of technology improvments are all about the control of the increasingly small. Think about how cars and houses have gotten lighter - or even pop bottles. It's the better control of things. Similarily car engines last a lot longer - better control of rings, blow-by gasses and lack of oil contamination as well as reduction in friction due to lubricant improvements.

The leaps in increases in technology are all about the small and seeming violations of what we take for granted. One recent improvement was the magneto-resistive head for harddrives pioneered by IBM. Drive density was increasing at a certain rate and then they discovered some obsecure quirk at low temperatures, which was explored, understood and leveraged to room temperature increases in harddrive density. At that point harddrive storage density increased at an even faster slope.

Making things smaller makes them more power efficient - the Pentium 4 CPUs being a notable exception. P4's were a push to get performance up - leakage current (and heat) be dammed. They've backed out of that fiasco now with the Intel Core processors.

There are amazing breakthrues likely around the corner by moving to the nano scale - being able to build things molecule by molecule and understand what is happening at that level.

At this point operating at the nano scale is highly energy intensive - insanely so. However, think about living things - about clams making their shells; about our bodies building things with very little energy - even plants making sugars and oxygen via sunlight.

However I'm a strong believer that technology will not get us out of what we've done - how we've destroyed our society, our selves thru consumption and the uncontrolled application of technology. We have always existed in tribes and technology can't help us if we've forgotten that. It certainly can't replace real relationships. Or has often been said - we are worshiping a false god - technology.

One could argue that the last few decades of technology improvments are all about the control of the increasingly small. Think about how cars and houses have gotten lighter - or even pop bottles. It's the better control of things.

Very true. Also true that the industrial infrastructure that makes it possible is immense.

It may well be that nanotech will solve a lot of energy related problems. But I wonder if anyone working in the field has seriously considered the thermodynamics of the big picture, the EROEI if you like.

Good questions. I have no idea if this bit of nanotech will ever make it any further than the drawing boardz and lab bench. It sounds interesting but as you note, it may have some serious limits.

featured on slashdot and surprisingly a poster or two there pointed out that.
1. this is device is nothing more then a organic thermo-couple. using the thermoelectric effect which is used in temp sensors.
2. is completely in-line with the third law of thermodynamics which basically means this will not decrease entropy. so don't expect any thing above a fraction of a percent recovery of energy wasted as heat in /any/ process this is added too.

but then again this comment will be edited or deleted by leanan for not jiving with the view of the place.

"but then again this comment will be edited or deleted by leanan for not jiving with the view of the place."
(sigh) Come on TK buck up.
I liked you post. Thermo couples for power generation, I had never thought of using as such. Found this site.


With this dry humor inside

"Unfortunately, Ohm's law was met with resistance."

The problem with typical thermocouples (Peltier-effect devices) is that more heat passes through by conduction (loss) rather than in a way which does useful work.

I doubt that these organic things are as good as, say, a modern 30-kW gas turbine.  The advantage is that their efficiency will not be reduced with decreasing size, so very small units can still produce useful power.

One Novosti article you missed:


The [Jan 2007] production of oil with gas condensate stood at 41.65 million tons (311 million barrels) in January, adding that LUKoil, Rosneft, TNK-BP, Surgutneftegaz and Gazprom Neft boasted the largest production volumes.

As would be expected, a rather upbeat article from them.

I wonder how commonplace among the public around the world is the idea that Russia, not the KSA, is the world's leading producer of these liquids?

(At the risk of being added to the ban list for too many posts/article....)

The global warming wire story to which you linked, from Reuters, http://www.alertnet.org/thenews/newsdesk/L19251030.htm is a good example of why Reuters has turned out to not be the organization it once was.

Namely, "facts" stated without reference. Ex., the following:

Current levels are already over 400 ppm and rising at around two ppm per year.

The latest figures I could find, from a Scandinavian balloon sample, was 390ppm. Can anyone link for me the "over 400ppm" data?

Also, classic Reuters selection bias:

At the moment the only global plan is the Kyoto Protocol. But that expires in 2012, was rejected in 2001 by the United States -- the world's biggest polluter -- and is not binding on boom economies China and India.

That is just bad on so many levels.


shows a high of 384.94 - Monthly mean atmospheric carbon dioxide at Mauna Loa Observatory, Hawaii


There are two different numbers in play, which may (or may not) cause the discrepancy:

There's CO2, but also CO2e , where the "e" stands for equivalent.
CO2e, from what I've seen, is at 450-460 ppm presently.

It might make for an interesting discussion, the inclusion in the numbers of methane et al.

and the co2e is the main reason why 'carbon trading' will never work.
it was posted before on another drum beat and even mentioned on npr. all that was needed was for one company(though i forget the name) to reduce a rare gas but is 1,000's of times more powerful a greenhouse gas then c02 to mainly get a free pass to sell a mountain load of carbon credits at low low prices allowing other company's to pollute as much as they want because they bought these credits.

also keep in mind nature DOESN'T care about these, nature is simple.
carbon emitter = someone who emits more c02 then they take in
carbon neutral = someone who takes out physical(not offsetting) the exact same amount of c02 they emitted
carbon sink = someone who takes out more c02 then he emits.

Rick: What month was that for? I have all the monthly means from Mona Loa in XL thru Dec 2004 @ 377.5
The annual variation is usually about 5 to 6 with the peak in May and the Null in Oct. the 2004 range was 380.6 to 374.1 The Dec number is usually very close to the annual Avg.
Your address don’t work, and I lost my address to up date the data.

The link worked for me. :-)
May 2006

MLO 2005 01 378.43
MLO 2005 02 379.70
MLO 2005 03 380.92
MLO 2005 04 382.18
MLO 2005 05 382.45
MLO 2005 06 382.14
MLO 2005 07 380.60
MLO 2005 08 378.64
MLO 2005 09 376.73
MLO 2005 10 376.84
MLO 2005 11 378.29
MLO 2005 12 380.06
MLO 2006 01 381.40
MLO 2006 02 382.20
MLO 2006 03 382.66
MLO 2006 04 384.68
MLO 2006 05 384.94
MLO 2006 06 384.02
MLO 2006 07 382.14
MLO 2006 08 380.31
MLO 2006 09 378.81
MLO 2006 10 378.99
MLO 2006 11 380.17
MLO 2006 12 382.43
MLO 2007 01 383.84

Many thanks.

I remember seeing numbers over 400 every now and then. The numbers under 400 are just CO2 if I remember correctly. Anyway, a quick google glance (didn't read much) showed up this for example:


The total concentration of all greenhouse gases (GHG) included in the Kyoto Protocol has reached a level of 427 ppm in 2005, or an increase by 149 (54%) ppm compared to the pre-industrial level.

About 430 ppm CO2e last I read, but going up... The Mauna Loa average for 2006 was just under 382 ppm CO2 alone. The difference between the two figures is largely due to methane and nitrous oxide, with a minor contribution from a number of industrial gases. The average rise at Mauna Loa over the last ten years is 1.8 ppm CO2 per year.

Stern (Sir Nicholas, not Howard) has said that stabilizing at 450 ppm CO2e is probably beyond reach, with the most practical target for stabilization being 500-550 ppm CO2e. At that level, the chance that global average temperature would increase more than two degrees Celsius is 77-99%, depending on the model used. That figure of two degrees is perhaps the best guess of the threshold for "dangerous interference" with the earth's climate system. The "business as usual" case is associated with at least a 50% chance of exceeding a 5 degree rise by the end of the century.

Today's print edition of "The Wall Street Journal." has three articles on Iran and oil. On the front page:

"CRUDE REALITY: Soaring Energy Use Puts Oil Squeeze on Iran" by Bill Spindle.

Both this article and the other two are very interesting, though as a regular reader of TOD I was already familiar with the issues and most of the numbers.

My perception is that some of the reporters who work for WSJ are step by step moving toward a recognition of Peak Oil.

We need to make sure TOD is as easy for them to read as possible!

Seriously, Kunstler quotes westexas by name. One of the articles referenced by leanan looks like he was reading westexas articles. Keeping TOD accessible to reporters looking for background information can only help.

I have known Jim for close to three years, and while he is obviously controversial, I think that he is really a man in mourning--mourning for what the country was, for what it has become, and for what it could have been. And I consider him to be one of the top three or so people in the country trying to warn us of what is coming.

The Simmons/Kunstler interview and symposium in Dallas were really remarkable. Their backgrounds could not be more different, but they arrived at essentially the same point regarding Peak Oil, after independently studying the issue for years.

Matt Simmons said that if we do nothing to address Peak Oil, "Jim Kunstler will have turned out to be an optimist."

I'd just thought I'd post a comment about how warm it has been this winter in Europe. I live just north of London, so I really don't get the extreme cold that a lot of New Englanders and Minnesotans get. I heat my mid terrace house with Natural Gas central heating. In the previous two years I have used about 300 cubic metres of Natural Gas between October and March, but this year I have used 28 cubic metres so far and expect to see that increase to 30 or 40 cubic metres depending on the rest of the winter. My house is pretty well insulated from a few years ago so these readings are relatively comparable.

If Global Warming continues to increase temperatures, that may well drop down to 5 or 6 cubic metres for 6 months use (from 300 cubic metres). So perhaps GW may well help in dramatically reducing demand for NG and other heating fuels. I don't have air conditioning and don't really want it either, as I don't feel it can be justified for the few days per year when it would be nice to have, not essential to have.

This winter was an(other) "extreme" in Europe. Reply if you want me to back up with data.

This means that any squeeze in natural gas or heating oil or such stuff, will not show up. Does this mean that if next winter would get cold, we are in for trouble, and really peaks in energy prices?

I think weather is a huge factor. In the US we had a fairly mild winter in 2005-2006, a relatively mild cooling season in the summer, no hurricane season to speak of, and the first 6 weeks of this winter (2006-2007) were the warmest on record.

I think fuel inventory levels would be much different if the weather had gone the other way. And I don't expect this sort of weather pattern to hold indefinitely.

I agree that weather is a huge factor, perhaps more so in the case of natural gas than oil. In North America, the consequences of flat to slightly lower natural gas production over the last two years have been mitigated by mild winters, at least up until the middle of January this year.


I don't remember what post I got that from. It was sourced from ASPO. If true, the cliff is NOW, and only the benign weather is keeping the wolf at bay.

Please post the data. I've buckets of anecdotes and miscellany on how warm Europe has been, something systematic, no. Have been trying w/o success to get the GISS server, have been inventing new terms to google, and squat. I'd be very interested in what you have.
Not many on this side of the pond seem aware that it's a whole different ball game than the warmish Dec./Jan. we had here.

TOD Europe had a great post with links on this Eurasian/Arctic warmth this winter and the recent global trend. Chilling... er, not.


Segeltamp - I've done two posts on weather / climate with lots of NASA charts etc which show it is very, very warm in the N hemisphere this winter, which it is..


Figure 2. January 2007. Goddard Institute for Space Studies.

Each time I click on the Goddard link I'm told the URL could not be found. I've looked up other URLs for Goddard and the same answer comes back.
It was a great post you did. I'd sorta like to go through more data. Any thoughts? Thank you.

Funny, OH, I had no problem with it:


It still says ".....could not be found. Please check the name and try again." Says that every time. I'm clueless.

Hmmm. Desperation suggestion: Try typing the address as it appears into your browser's address bar (maybe you already did that?).

Homepage here: http://www.giss.nasa.gov/

That desperation maneuver I know. No dice. I think the answer is not to troubleshoot this but do it on another computer. Thing is, SBC has a near-monopoly around here, and the easiest to borrow computer gets the same result w/ pretty much the same hardware & provider. But thanks.

Sorry I couldn't help. Maybe run it by one of the hackers here.

You can use the actual IP address:

Sounds like your ISP's DNS server(s) may be down, your computer may have incorrectly specified or missing primary/secondary DNS servers or your computer may be locally caching negative DNS replies for extended periods.

Try flushing your computer's DNS cache using following commands (without double quotes):
Windows: "ipconfig /flushdns"
Mac OSX: "bash-2.05a$ lookupd -flushcache"
Linux: "/etc/rc.d/init.d/nscd restart"

Might also want to add a DNS server other than those from your ISP to your networking setup, such as one of these (from www.opendns.com):

Or, look up a site's IP address manually using nslookup (older tool on most systems) or dig (newer tool, on fewer systems). If used without specifying a DNS server, both tools default to your computer's current setting. If not successful with the default, use another DNS server such as one of the OpenDNS ones listed above.

Once you get the IP address, put it into your computer's "hosts" file. This file is usually checked first when you try to connect to any Internet site. If the site is not in the file, then the DNS server is queried.

Thanks for the tip, OilLearner! My ISP's DNS servers frequently go out to lunch, and I've been looking for an alternative. I switched to opendns and everything seems to be copacetic.

Well, I'm still here.

I think I'm here.

(Counts fingers and toes in cyberspace)

Installed that opendns thing. Or I think I did. Got the welcome page that opendns says is a test. But the words "welcome" and "test" no longer mean what they meant when I learned English so I don't know.

Anyway. The most amazing thing is that most computer functions remain normal in spite of all the problems. And it seems it's not going to crash and quit. But then "normal" is another word that has lost meaning as we walk again through the looking glass into the wonderful world of computing.

Entering any numeric IP address invariably brings the 403 Error Forbidden page. That's the last simple one.

Hyperlinks are a problem. Maybe half the time they just work. But they also work for a few seconds, or a fraction of a second and then I'm returned to from where I started. Or I get a page of code. Or flip from one page of code to the next. Or the usual 403 & 404 Error pages. Or the computer shuts down. Turns off. Cold. Or I get the blue screen of death>disk check.

In a week or three I suppose I'll contact the Opendns people & report all this. But do I trust them? Trust is not a word that has had it's meaning changed, it just got ripped out of the dictionary.

Note to programmers & software developers: What on Earth are you doing for beta testing? If you test with people who are clones of yourself; that is, if your testers think exactly like you and have all the same experiences you have had; then your baby will perform for your testers just like it did for you. Give your babies to the technically inept. Give your baby to random 8balls like the oldhippie. Watch it crash. You might learn something.

Give your babies to the technically inept. Give your baby to random 8balls like the oldhippie. Watch it crash. You might learn something.

This is what is already done in most (serious) places.
Your problems look more like you have a virus or some spyware/malware on board and nothing really specific to DNS or hyperlinks.
Use an antivirus to cleanup, get some local help from a knowledgeable friend.

I run three antivirus programs every day. The box gets wiped clean and rebuilt every 90 days. New box annually with nothing at all transferred from old to new box.
I am certain I have spyware and malware. Those of us who don't know what we are doing create a huge wounded animal thrashing in the water signature that the varmints find easily.
I did beta testing once, maybe about 1990. Recruited by an ex who was doing a project for Apple. When it was over she told me my fumblings had exposed more faults than all the other testers put together.But I would never be used again. Product did not need to be good enough to survive me.
Everyone else I've come across who can tell a srory about beta testing was a geek.
At the logical level changing DNS codes can not possibly cause my problems. The coincidence of new code and problems is purely a coincidence. When did computer problems have anything to do with logic?
It's a circus. It doesn't stop.

I guess your only hope now is Goat Sacrifice.

Aberdeen has been tropical this winter - little snow or frost, its about 12 C out today. Snow drops are out and over the weekend we had bees buzzing in our garden.

Gaia to the rescue.

It hasn't generally been that cold here in Finland either although it's a bit colder again at the moment. The warmest moment of the day was at -15C here in southern Finland. I suppose naming the place would mean Very Little :)

Then again, if I plan to be outside for less than 30 minutes I still wear just a t-shirt. (Well ofc I have some pants on damn it!)

Here in western Britain (Wales) we have had about 5 days of "winter" over the last 3 months - two spells of cold weather of 2-3 days each. Mostly, it has been several C above typical temperatures for this time of year. I think it was recently reported that globally, it was the warmest January ever. Now, mild winters are not rare, but there have been so many "warmest" records in W. Europe in the last few years (e.g. last summer June - August was the warmest ever in central England).

Euan's recent graphs in the article just above, should be a source of major concern. These suggest that temperatures over W. Europe and N. America (where a lot of people live and where a lot of food is grown), are climbing much more rapidly than the IPCC forecast which is a mean for the whole world. Most people do not care what the temperature is like over mid-ocean. The populated continents is where the effects will be felt - there, things seem to be changing faster than IPCC averages would suggest.

I think it is worth pondering, that 100 years ago people survived with very little oil, albeit in a lifestyle very different to now, but even mere survival is more difficult in a radically changed and disturbed climate. When gales come and rains fail, the most basic human needs - food and shelter - may be under threat. You can't run away to the hills to hide with hundreds of kilos of dried food as the conventional "doomers" and survivalists would do, if nobody has surplus food to store and dry and sell to you.

Right about the global averages. The other point to remember is that the annual average temperature increase is probably of less concern than an increased frequency of summer heat waves. The cartoon below shows how, when the average annual temperature rises, the frequency of extremely hot weather increases.

Model projections show that the hottest year in the period 1961-1990 will become the norm by the end of this century. In more practical terms, the summer temperature excursions off the end of current experience mean the end of quality wine production in the Napa and Sonoma valleys, perhaps as early as mid-century. Now that's something to be concerned about.

Gaia to the rescue.

In a sense i suppose this is true. The growing season in northern locales is certainly going to several months longer... quite how this is going to stack up against our continued efforts to suffocate ourselves is anyones guess.

That being said, the season variation in CO2 is large, and probably (depending on other feedback mechanisms) going to get larger.

A US consequence of hot and dry that hasn't recieved as much play is in on Yahoo US today:


"GRANTS PASS, Ore. - Two dozen firefighters died last year battling wildfires across the nation, a number that has increased in the face of drier summers and increased job pressures."

I haven't checked the Feb 1 snowcourse data yet. It seems the winter for avalanches, six died in the west over the weekend. In part due to a frozen pack with heavy wet snow falling atop.

Last year, we ate the last homegrown tomato in December. This year, they lasted until February. (latitude of Brussels-Maastricht) We've just had a day of 16°C, while it should be freezing half of the time.

Chart of the Day

Every now and again I see a chart that takes my breath away....

This one appeared on 321Energy


I'm pretty well subscribed in Uranium stocks, some of which resumed their bull run this last 6 months. I'm always open to hot tips though.....

Uranium Stocks makes no guarantee or warranty on the accuracy or completeness of the data provided on this site."

The one meaningful and well researched line on the page.

I have an interest in property in British Columbia. Is TOD the place for me to promote my interest by posting logically-challenged claims of a property gold rush to come in BC?

Frankly, I would rather have what'shisname back with his biblical quotations than this self-interested rubbish.

Frankly, I would rather have what'shisname back with his biblical quotations than this self-interested rubbish.


Toilforoil - you either don't like the chart or you don't believe the chart - difficult to tell. So why don't you go and contribute something positive and do the calculation and see if its true or not.

I'll give you a starter:

Today's oil price is around $58 / bbl
U3O8 is selling for $75 / pound

Its up to you to do all the calculations on energy transformations and energy loss.

You may then want to express a point of view on whether U is under priced or is it oil that is over priced?

I'm also really, really interested in world U resources, grades of ore, and the energy required to mine it, where it is - Canada, Australia, Namibia and Kazakhstan - are currently the largest producers. And yes, I'm interested in the companies that have mining rights etc.

Perhaps you would like to give an opinion on this report too while your at it:


This has U mining going off an energy cliff around 2070 - what do you think?

And then ofcourse there is the issue of al these nuclear weapons that neither the USA or Russia needs. My feeling is that Russia will sit tight now on its bombs and recycle that fissile material into the world market at prices vastly inflated to today's - $500 / pound or higher, who knows?

You said it was rubbish - now come back with some calculations and facts.

Here's another good site that might help you get your head around the nuclear calculations:


I will let the article to which you linked speak for itself. But I will say that is very clever of the Chinese to disguise their world wide securement of uranium in a series of oil company takeovers and long-term oil procurement contracts, and at the same to build hundreds of nuclear reactors all having the appearance of coal fueled plants.

By the way, folks, I'm selling options to purchase the next surely fired thing. You can reach me at: oneborneveryday-at-snakeoil.palmspringshotel.con

Uranium to Fuel Chinese Economic Advance
Sam Kirtley.
February 14, 2007

The rapidly growing economy in China is causing more that just ripples across the economic, financial and business community. Its is growing at an alarming rate and shows no signs of slowing down as it's GDP has been growing at 8% per year since 1978. However the question arises, how is this rapidly growing economy going to get the power to maintain this level of growth or simply to sustain current levels?

Although China does have a great deal of coal reserves, nuclear power is a cleaner more efficient way of producing energy. The Chinese government has already announced that they will be building a number of nuclear power stations but these estimates are a drop in the ocean compared to what China requires. The Chinese are savvy enough not to announce how many they actually need, as this would send uranium prices sky high.

So let us consider how much it would cost for China to get its electricity from nuclear power. Electricity consumption in China is approximately 2.494 trillion kWh. The cost of energy from nuclear power is around 1.68 cents per kWh. This is inclusive of the cost of fuel as well as operating and maintenance costs. Therefore to supply all of China's electricity needs for one year by nuclear energy would cost nearly $42 billion. (2.494 trillion kWh x 1.68 cents / kWh = 4189920000000 cents = $41,899,200,000.00) Although at a glance this may seem like a large figure, it is relatively very low considering the cost of running on other fuels and the fact that China has $1 trillion in US Dollar reserves.

Uranium is used in nuclear power plants in pellets. Typically a pellet of uranium weighs around 7 grams (0.24 ounces). This pellet is capable of generating as much energy as 3.5 barrels of oil, 17,000 cubic feet of natural gas, or 1,780 pounds of coal. Therefore if you compare uranium with oil in terms of energy produced, 3.5 barrels costs about $210 assuming $60 per barrel. For Uranium, it costs around $1.125 to buy 0.24 ounces of uranium at the current price of $75/lb. This is a vast difference in cost and shows how cheap uranium is at current prices.

Yet even with this vast difference in cost, China continues to use oil at a rate of 6.534 million bbl/day. However China has seen that nuclear power is the far better option to supply its energy needs and they have started to switch fuels from oil to uranium. I will try to demonstrate the benefits to China of changing from primarily oil powered to nuclear.

If China was to replace its 6.534 million bbl/day oil consumption with energy from nuclear power they would need about 13,068,000 grams of uranium, around 28,810 pounds. So 28,810 pounds of uranium per day to replace oil would see China using 10,515,650 lb per year. Using the current uranium price of $75/lb that would cost China about $788,673,750 per year. The same cost in oil would be $392,040,000 a day at $60 per barrel, that's $143,094,600,000 a year.

In other words China can run on oil for two days, or uranium for a whole year, at the same fuel cost.

This is why China is moving away from oil and towards nuclear power. It makes sense for China to stop using oil and change to uranium. Of course they could still use fuels like coal, which they have great supplies of, but oil is simply too expensive, not only in terms of money, but also in terms of risk. Oil comes with great geopolitical risk with problems in the Middle East and in oil rich countries like Sudan in Africa. The oil supply is vulnerable as it comes from areas where war and unstable regimes are rampant. Uranium on the other hand originates from “safer” countries such as Australia and Canada. A secure source of energy is a major issue in today's political world and China will ensure that it has a reliable supply of clean, safe and relatively inexpensive fuel. This is why China is going nuclear, like it or not.

As China shifts to using uranium as a fuel instead of fuel like oil, this will send the uranium price much higher. The above graphs demonstrate how much more China and other countries can afford to pay for uranium, as the yellow cake is still quite cheap. As the uranium price moves up, uranium stocks will surge dramatically upwards and you can profit from this by investing in uranium mining and exploration companies. Do not simply buy any uranium stock, but look for well-managed, small to mid cap companies with proven reserves and preferably an operating mine. For advice on which uranium stocks to invest in, subscribe to the uranium stocks newsletter at www.uranium-stocks.net completely free of charge. Uranium to Fuel Chinese Economic Advance.

Sam Kirtley
February 14, 2007

Uranium Stocks makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.


Good to see you here, and much appreciate the gentlemanly response. Bright day in Aberdeen?

As for the StormSmith file, 2070 seems a very late date to call the cliff, that's, as per them, when the barrel really has been scraped clean, like when mining uranium causes more CO2 emissions than it saves. 2016 and 2034 are two important approximate dates for ore grade decline.

David Fleming has written extensively on the same subject, which for some reason meets with complete denial in most nuke-hopeful circles. I see uranium from seawater float by on a regular basis, even here. There have been people trying to refute the study, but that unfailingly moves towards breeders etc. It's still hard to comprehend that what was uneconomical in the energy field yesterday, will likely also be so tomorrow. No breeders now, none then.

It's similar to what Deffeyes writes about oil shale: everytime oil prices rise so much that shale seems feasible, exploration costs go up. And no-one sees the connection.

Vital detail: Storm van Leeuwen said in private conversation that the report is based solely on the expansion of UK nuclear plants, not a worldwide surge. The latter would bring the cliff forward by quite a few years.

HISF and Double D (swinging below here somewhere) - very seldomly I get called a gentleman - so I'm glad my response to Mr Toil was not overly assertive.

I'm still none the wiser whether the chart above is accurate or not. There was a poster called Whitehall who used to frequent these pages who maintained that U was in a bubble - which is pretty hard to reconcile with this chart.

I feel as though I'm totally in the dark WRT U (and nuclear) resources - as many disparate opinions on U as there are on oil. One difference, U exploration is still very competitive and the companies involved are very secretive. Th fuel cycle and breeders - neither proven commercial technology as far as I'm aware, are frequently offered as a solution.

Anyone got any links on China's and India's nuclear energy programs?

Euan, I'm sure you are a gentleman. I didn't find your response overly assertive. Rather more deflective than anything else.

I don't think TOD should be a place where people tout stocks, generic or otherwise.

That you have difficulty recognizing rubbish speaks to a blind spot, because you are obviously a well educated and reasonable person.

You ask for calculations. I will point to the only one that counts: the price paid for the btu at work in the economy. The price of x-units of uranium vs x-units of crude oil is irrelevant.

I will point out that I'm not opposed to nuclear. I keep an open mind and come here to read rational arguments for and against. At the moment, I'm leaning in favour of some nuclear, not because there is any evidence that it is the best investment, nor because I'm reassured on the waste management side, nor because of climate change advantages, but because I'm frightened by the rise of facism and aware that there is line to be drawn from economic decline to the appeal of the worst demagogues. I believe that nuclear may be a necessary part of a package that allows us to overcome some of the immediate problems that declining hydrocarbons are more than likely to visit on our world.

I just ask one thing: please don't insult my intelligence.

There is another readily accessible source of slightly enriched uranium; spent fuel.

It is costly (in $, but not in energy) to recycle spent fuel (we did it to extract Plutonium for bombs for years).

I noted with interest that the latest French nukes used three grades of enriched uranium; I presume richest in the center and lowest % U 235 (1.4% from memory) on the outside. "Used" uranium (perhaps not even reprocessed, just aged) could, perhaps, be used on the outer layers after burning up most of the good stuff (U 235).

We have quite a few thousand tonnes of spent fuel "just sitting", some for over 40 years. This allows the shorter lived (and more intensely radioactive) isotopes to decay away, making reprocessing safer & easier (all things are relative).

Happy Mardi Gras (just stepped in for lunch),


Reprocessing regimes face economic challenges because of several factors.

The biggest problem it faces is that large scale reprocessing regimes today are a relic of weapons production. The PUREX process threw economic scalability to the wind and focused only on producing very high purity plutonium, and thus we have the aqueous process we know and hate. With aqueous regimes you have to be careful of criticality and decay heat, so you cant easily operate on fuel just out of the reactor. It also yields large volumes of low and mid-level waste. We could replace these processes with pyrometalurgical electrorefining of molten salts, and that promises to be much cheaper.

The other large problem is that reprocessing often focuses on plutonium utilization, which is a big mistake. Plutonium has higher alpha activity and higher reactivity. It makes the fuel much more expensive to handle and use. We should just store it for future fast reactors, I assume will be used in a century or two. We could instead focus entirely on uranium extraction. If we do this with pyroprocessing its entirely conceivable that we could do this profitably at market rates.

With pyrometalurgical electrorefining# would it be easy to extract the fission products ? (a potential major source of platinum group metals).

# My LIMITED understanding is that this process uses the differing electronegativity of the different elements to selectively plate them on the electrode of choice.

Happy Mardi Gras,


With pyrometalurgical electrorefining# would it be easy to extract the fission products ? (a potential major source of platinum group metals).

Yes. Separating the fission products from each other would require more development of course, but right now you drop the spent fuel (after deoxidation) into a molten salt bath, turn it on. There are several different processes...


"The uranium metal fuel is dissolved in LiCl+KCl molten bath, the U is deposited on a solid cathode, while the stainless steel cladding and noble metal fission products remain in the anode, and are consolidated by melting to form a durable metallic waste. The transuranics and fission products in salt are then incorporated into a zeolite matrix which is hot pressed into a ceramic composite waste."

Alternatively, all the actinides, including U and Pu, can be separated together from other wastes (the highly radioactive mix is not useful for bombs) and cast together, then used in a fast reactor. Only relatively short lived wastes remain to be buried.

Sure, but this is only interesting when we have fast reactors to burn the actinides in. Untill then, we should only pursue uranium extraction.

David Fleming has written extensively on the same subject

Your post brought this article to mind, and much to my suprise, it was written by David Fleming!


I make no claim to be knowledgeable about such things. This article does state that:

The advantage of nuclear power in producing lower carbon emissions holds true only as long as supplies of rich uranium last. When the leaner ores are used - that is, ores consisting of less than 0.01 percent (for soft rocks such as sandstone) and 0.02 percent (for hard rocks such as granite), so much energy is required by the milling process that the total quantity of fossil fuels needed for nuclear fission is greater than would be needed if those fuels were used directly to generate electricity. In other words, when it is forced to use ore of around this quality or worse, nuclear power begins to slip into a negative energy balance: more energy goes in than comes out, and more carbon dioxide is produced by nuclear power than by the fossil-fuel alternatives.


There is enough usable uranium ore in the ground to sustain the present trivial rate of consumption - a mere 2 1/2 percent of all the world's final energy demand - and to fulfil its waste-management obligations, for around 45 years.

Sure, it might be interesting if we had to use hard ores. We dont. Theres recoverable uranium on the order of 1 trillion tons from soft ores in shales and phosphates. Thats enough to last us the next million years.

And the article is incredibly misleading suggesting that milling not be done by electricity. What I find lacking in the article is any quantitative measures on energy payback, just assertion that it must be negative; Oh it references the Storm Smith stuff, but thats been addressed ad-nausium. Its a pile of alarmist nonsense.

Dezakin - 1 trillion tons of uranium from soft ores? Is that 1 trillion tons of ore with 0.01% U3O8 (or U metal) or are you talking about 1 trillion tons of U metal?

U is a fairly common trace element that occurs in many rocks - normally bound up in the silicate mineral zircon or phospahte minerals monazite or apatite - that don't normally lend themselves to U recovery via leaching.

So when you say 1 trillion tons of recoverable U - I'm scepticle.

You got to back up statements like that with references.

References please.

Dezakin - 1 trillion tons of uranium from soft ores? Is that 1 trillion tons of ore with 0.01% U3O8 (or U metal) or are you talking about 1 trillion tons of U metal?

U metal, at 10-20ppm, which is recoverable from soft ores today. The only assumtion being made is energy cost increases in inverse proportion to ore concentration.


The following table is from Deffeyes & MacGregor, "World Uranium resources" Scientific American, Vol 242, No 1, January 1980, pp. 66-76.


With a breakdown of the energy lifecycle:


This references several analysis from Vattenfall, Rossing mine, and others.

The "Uranium Distributions in the Earths Crust" table is also plotted as a graph in chapter 8 of Deffeyes' "Beyond Oil". I re-read the chapter last weekend, and indeed there is a lot of uranium around. This data apparently came from commercial uranium mine records, and oil-well drill hole measurements.
What was not covered in "Beyond Oil" was the EROEI of mining the lower grades of ore. (Not sure if it was in the Scientific American article).

The Rossing mine webpage http://www.rossing.com/ is good reading. My main take-away was that it is an enormous deposit of low concentration ore, and that is economic because of the low overburden at the site. (Roughly 1.16 : 1 Ore to waste rock in 2005) but the economics are still a close thing, there was no corporate profit made on 2005. The mine had been scheduled to close in 2009, but has been extended to 2016. A bit of poking around on the web found references to "Rossing-like" deposits that were in search of funding, so there must be a couple other deposits similar to this that are being pitched to the investment community.
Oh yeah, one more thing. The Government of Iran is a shareholder in the mine. ^_^;

From the "Energy Lifecycle of Nuclear Power" page you referenced:

Additionally SLS predict that the yield of of Uranium extracted from low grade Ores will fall to 0 at concentrations of 0.0002% (2 ppm). The Olympic Dam mine extracts gold at high efficiency at concentrations of 0.0005% (5 ppm (parts per million)) and there are many other gold mines which produce gold profitably at this concentration. Given the huge Uranium reserves present at 5 ppm, it unlikely we will ever need mines that operate lower than this.

Two points:
1) Uranium was $4.69 per Oz ($75 / LB ) when I just checked, and gold was $660 per oz ($10,560 / LB). That's about 1:140, so the economics to "produce gold profitably" are a little easier. ^_^

2) Gold is not mined for its energy content, while uranium is only mined for its energy content.

Maybe it's just me, but I find that nuclearinfo webpage far too terse. I think it would be much improved if some of the information was presented in tables, rather than in paragraph form.
I spent a couple of minutes trying to cross reference the numbers with the Rossing site and ended up quite muddled.
I'd really love to see a table with the raw Rossing site numbers in one column, followed by a column with the numbers converted to the units preferred by the nuclearinfo writers. At least to me, that would make the information more digestible, and would add (IMHO) to the credibility of the info.

1) Uranium was $4.69 per Oz ($75 / LB ) when I just checked, and gold was $660 per oz ($10,560 / LB). That's about 1:140, so the economics to "produce gold profitably" are a little easier. ^_^

Given that nuclear fuel comprises a very small component of the price of nuclear power, uranium prices can rise quite a bit and not affect nuclear energy prices noticably, especially if we move to reprocessing regimes and MOX fuel, which are demonstrably feasable.

2) Gold is not mined for its energy content, while uranium is only mined for its energy content.

The point here is the energy cost measured in dollars for mining gold cant be more than the value of the gold itself.

I'd really love to see a table with the raw Rossing site numbers in one column, followed by a column with the numbers converted to the units preferred by the nuclearinfo writers. At least to me, that would make the information more digestible, and would add (IMHO) to the credibility of the info.

Well you can allways look at the linked spreadsheets and the Vattenfall study. I'm not sure how one could look at the avaliable data and conclude that nuclear fuel for all of civilization is in short supply anytime in the next thousand years. Solar power will become too cheap before nuclear fuel becomes too expensive.

"..Given that nuclear fuel comprises a very small component of the price of nuclear power..."

Do you have a sense of how much the cost of nuclear fuel is dependent/subsidized by fosil fuels? How that cost of extraction (energy or $'s) is a function of the quality of ore (fuel content/density)? Perhaps you've already answered this.

Do you have a sense of how much the cost of nuclear fuel is dependent/subsidized by fosil fuels?

Well, given most large mine machinery can (and often is) electrically powered, its not strictly dependant on fossil fuels except for the sunk cost infrastructure thats in place.

How that cost of extraction (energy or $'s) is a function of the quality of ore (fuel content/density)?

Its generally inversly proportional to the ore density.

You're actually buying the line of lies that the Storm/Smith report posits? They insist on using gasseous diffusion for their energy return analysis, when centrifuge enrichment is 50 times as efficient and been in use for decades worldwide!

We will never use seawater uranium, not because its unworkable, but because we wont ever run out of ore thats cheaper to use. We might use breeders, but it will have to be for reasons other than fuel scarcity, because we arent set to run out anytime this millinium with thousands of light water reactors worldwide.

You want to break down the numbers? Its been done time and time again.

First, theres thousands of tons of spent fuel that can easily be
reprocessed into new nuclear fuel rods for light water reactors,
enough to easily last 30 years. And the reason most dont is uranium is
still cheaper to mine from the ground.


using today (300ppm and higher) we have approximately 100 million tons
of uranium. A 1GW light water reactor uses about 170 tons of uranium
ore per year, lets round that up to 200... and there are less than 500
commercial power reactors around the world... Lets pretend there are
1000 sucking down 200000 tons of uranium ore per year... Our nuclear
fuel supply will run out in five hundred years. But we can easily mine
lower concentration ore bodies than 300ppm. The rossing mine in nambia
has an energy return of over 500 on mining operations! If we use only
uranium extraction reprocessing we more than double our resource base,
and with MOX fuel its quadrupeled... 2000 years worth of supply from
ore concentrations as high as we're using today.


Lets say we run all of civilization on these reactors. We'll need
about 20000 light water reactors, that sucks down 4 million tons of
uranium ore per year. If we limit ourselves to shales and other soft
ores that have an energy return from 16-32 from light water reactors,
we have approximately 1 trillion tons of uranium. Our resource base
will last about 250000 years, or a million years if we use MOX fuel.

Now, one might assume that we could get breeder reactors to work sometime in the next million years. I'm betting that we can even figure out how to do solar power competitively by then.

In no way are we close to running out of nuclear fuel. Open questions are along the lines of, when will wind or solar be less expensive than nuclear.

It's similar to what Deffeyes writes about oil shale: everytime oil prices rise so much that shale seems feasible, exploration costs go up. And no-one sees the connection.

No its not. Nuclear fuel is a very small component of the price of nuclear power.

This laser enrichment process seems to have stalled
Interestingly one of the constraints to increased uranium production is lack of water as with tar sands and so on. If that problem can be solved at Olympic Dam (the Ghawar of uranium deposits) then it will go on to become the world's largest mine of any kind. The town where the permanent workers live (Roxby Downs) will be relocated as it is consumed by a giant pit.

I asked if thorium rich tailings are being used in the backfill of the current underground operation and apparently they are kept to one side for possible reprocessing. Yes the outlying deposits in the region are being bought by the Chinese.

To clarify, while I have hope for laser enrichment, centrifuge enrichment is a mature technology far more efficient than gasseous diffusion. Perhaps someday laser enrichment will advance to the point that will allow economic separation of fission products for market distribution.


You are a gentleman and perhaps a scholar ta'boot.

The oxford research report says it is based on the assumption that no new comparable uranium deposits will be found. That sounds a lot like the Club of Rome predictions, which were way too pessimistic.
I believe in ELP, but I'm not ready to write nukes off yet as a part of the future.

Yes, the Oxford report was way too pessimistic with regards to global U resources, but perhaps too optimistic regarding demand.

Euan, Sprott Asset Management produced this report on Uranium Producers I found it pretty well done and interesting. May take a moment to download as its 120 pages


My favorite Uranium stock is UEX have been accumulating since late 04. Its been on a bit of a tear since the Sprott report was issued last week. However the report did not include the information included in the latest UEX release of 2/13.


Would advise you to review their press releases as well as the covered section in the Sprott report.

Finally the Sprott guys are definately on board with the Peaksters. Linkage to their Peak Oil page its a good resource


Kansas - thanks very much for that! At 120 pages I ain't read it all yet - but it looks like a great overview.

This also provides a good starting point for compiling some resource figures - am aware of the need to take into account the significant reserves of BHP, Anglo and Rio etc.

Euan my pleasure hope you find it useful. Would appreciate any perspective on the UEX you might have they have located, drilled and found some pretty rich intercepts. I think they are still a sleeper. Good luck with your research and thanks for the many useful posts.

Don't forget the Uranium Participation Corporation. It is an exchange traded commodity fund that buys U3O8 yellowcake. Symbol U on the Toronto Stock Exchange.

Good call... it is the best pure Uranium play out there....

In reference to the Saudi cutbacks: This summer could be very interesting and very telling.

Right now, I'm sticking to the theory that Saudi cutbacks are nothing more than KSA trying to keep pricing in their favor. I also think that after last year's testing of the $80/barrel range, they have learned that the market can in fact support oil prices as high as the lower $70s without too much trouble.

Based on those assumptions, we can expect that KSA is going to try and fiddle with the market to boost prices above $60 again. And why not? If $70 doesn't bring about chaos, why not keep prices higher?

There is some credence to arguments that KSA may be in trouble. This summer may well be the test. If supply is too low and KSA cannot increase production quickly in order to meet demand, that may be a very telling sign. Telling of what is still in the air: it could mean problems with production facilities, it could be problems with rigs, it could be problems with equipment, or - as many here would argue, it may mean problems with available oil.

Since raw data out of KSA is so hard to come by, we're going to be left with speculation and educated guesses. Unfortunately, without some good hard data it will be next to impossible to make good arguments. All it will take is a normal to moderate hurricane season affecting the Gulf of Mexico this year, or political instability in an oil producing region of the world and prices will spike dramatically. Those 'fudge factors' don't necessarily point to KSA having peaked or KSA being in decline - they just complicate the matter.

KSA cannot let out information about their oil for a very good reason. The Royal family (now vastly extended) are in a very precarious position. If the cat gets out of the bag there would be a civil uprising. I believe they fear this more than any rectriminations for lying to the world about their reserves.


imo the proof you are waiting for next summer was on the table last summer, as prices rose, production fell, and meanwhile sa rig count was up 3x.
Not long ago there was serious speculation that sa would boost production and thereby drive down the price to hurt their old nemesis, iran. The second theory, which you expressed, is that they are voluntarily cutting production 2x what they agreed to do in an effort to boost prices. IMO they're trying their best with the first and, in failing, are succeeding in the second.

An environmentalist in the White House

He heads Treasury, not the EPA, but Hank Paulson is investing time in making this White House greener.

Is it my imagination, or are the number of articles on the drumbeat greatly increasing? Is this just because Leanan is posting more, or is it because there is that much more news about oil and oil related "stuff" floating around in the ether? If the latter, is this, in itself, an indication of a problem?

Just curious....

It varies a lot depending on current events and the day of the week. Sunday and Monday tend to be slow, because of the weekend.

There are a lot of energy articles these days, perhaps because prices have gone up again.

From today's Wall St Journal front page, there is an article headed "Crude Reality" which outline's Iran's problem with falling exports. Westexas and his Export Land model continue to be vindicated. Don't worry, Canada has lots of tar.

The site is subscription only, but under fair use, here are some quotes:


Iran sits on one-tenth of the world's known oil supplies but is using so much energy these days it may start rationing gasoline as soon as next month...

Iran, where a huge population bulge is reaching adulthood, is confronting the export crunch earlier and more acutely than others. Iran already consumes more oil than all but 15 other countries on earth, according to the International Energy Agency, which monitors the world energy market. In 1995, Iranians used the equivalent of 34% of the oil they pumped from the ground, exporting the rest. Last year they used 40%. In Iran's natural-gas industry, the pinch has already begun. Although Iran has 15% of the world's gas reserves, the country imported more than it exported in 2005. In January, Iran briefly cut off gas exports to Turkey as the Iranian government struggled with a surge in domestic use during a stretch of cold weather....

subsidies make energy practically free in Iran, discouraging any serious energy conservation. Gasoline, for example, costs about 40 cents a gallon at the pump. That's encouraged an explosion of use, as Iranians add new cars while continuing to use fuel-guzzling old models. It has also encouraged a brisk smuggling trade as Iranians buy millions of gallons of fuel at the subsidized price and truck them into neighboring Pakistan, Turkey, Afghanistan and Iraq for sale at market rates.

To alleviate these problems, and the looming export squeeze, the government has also embarked on a massive plan to try to boost oil and gas production. But there are problems with both initiatives. The Azadegan oil field, located about an hour's drive west of Ahvaz near the border with Iraq, underscores some of them.

The field, discovered in late 1990s, is among the largest deposits in the world. It holds about 26 billion barrels oil and could one day produce as much as 260,000 barrels a day, Iranian officials estimate. It's the kind of field U.S. oil majors would be keen to help develop, were it not for U.S. government sanctions on Iran preventing them from participating. In 2004, Iran signed a deal to allow a Japanese company, Inpex, to take a 75% stake in the field and develop it. But for years, the project remained stalled by the need to remove land mines left from the war. The U.S. also urged Japan behind the scenes to scale back its involvement in the project, as Iran's confrontation with the international community over its nuclear program has escalated.

Matt, thanks for the WSJ quotes.

Please note, what is missing from the quotes, but what Westexas has pointed out, is that one of Iran's major obstacles is the lack of refining capacity. They import gasoline on account of that.

Iran can extract, but not "produce", so to speak. That is their bottleneck today. In 10 years they'll hit the big one.

HeIsSoFly — Send me an e-mail.

- davec @ linkvoyager.com


The more I study the export issue, the more concerned I get. I am amazed that almost no one in the MSM has picked up on the fact that Russia reported increasing production but declining oil exports.

IMO, Russia will start showing lower crude oil production in the very near future, probably this year.

We've seen what happens to exports when production starts falling, while consumption is increasing, e.g. the UK, which went from exporting one mbpd in 1999 to being a net importer last year.

Taking a time-out from all the charts and graphs for a moment, I propose J.R.R. Tolkien had assessed the situation many years ago and had a literary take on the problems of an industrial-based society.

Tolkien's "ring of power" was basically an energy-magnification device. When asked what it represented, he described it as "the machine."

His solution involved casting the ring of power "back into the fiery chasm from whence it came."

No more "ring of power," no more industrial machines, no more vast fields of industrial food, no more massive population boom. The Shire is saved.

I think restraints in petroleum geology may end up being the default ring-bearer of our time.

Okay, back to the science ...

Nice to see another Tolkien reader on the board. I have had the same
interpretation of Tolkien's work, especially LOTR, from the very first time i
read it maybe 17 or 18 years ago. Even though Tolkien disavowed allegory in
his later years, his works are a supreme allegory (as well as some pretty good

Of course, there is not a single point of concentration of all the power like
the Ring, and we are thus at the mercy of this horrible machine burning itself
out instead of being able to throw it into the Fire at a time of our choosing..

Tolkien was not the first philosopher to observe the inescapable corruption and
lethality of the power the Ring offers. Even rather early on people have been smart
enough to see where this road leads. Sumerian myths about the origins of cities
(they still had a concept of humans living without them, either from interactions
with non-civilized peoples beyond their borders, or from older oral histories..
maybe a mix of both) clearly cast the city as the winnings from a classic
'deal with the devil' sort of transactions with some mischevious gods, with the
admonishment that 'once you've accepted the gift, you can't give it back'.. the
same story has been recast uncounted times since, with flavoring to suit the
tastes of individual tellers.

The reason all the people through so many millenia all clamoring that what we've
been doing is a one way ticket to disaster have never managed to accomplish
anything to avert it is because quite fundamentally until this disaster reaches
its own absolute physical limits, there's no stopping it. it _is_ the competetive
juggernaut that _will_ bulldoze all opposition out of the way and dominate the
physical resources of the earth necessary for the survival of all.. right up
until its unstable characteristics can't find anything new to conquer or any
new way to squeeze more out of what's there. And only when that acceleration starts to sputter out does it even become possible to consider doing anything
about it - the most one could do then is help it along on the way down, which
is swift and painful.. and we're already on the downhill side of that slope, peak
oil or not.

In the end, while PO will provide an important catalyst to the process, the end
of the road for this escalation game comes when the game is being played everywhere and runs out of _room to grow_, even more than any particular physical
resource. From that point, the primary vector for growth and survival of any
entity inside this game is what basically amounts to cannibalism. In the
beginning we call it consolidation. When the playing field is full of numerous
small players, cannibalism doesn't imperil the game much. But when it's an
industrial economy of global proportions, where players can be physically
enormous, it means such an interdependent, tangled mess (in the beginning we
call it integrated and pay bonuses to people who can pull it off) that rather
quickly has lost any fault-tolerant redundancy it might have previously had.
Then that primary vector for continued growth of players becomes very parasitic
on the health of the whole integrated global machine: the machine's own parts
must compete with each other, and sooner or later, even if they win they lose.

This deadly escalation game that has been running since the agricultural revolution, which took on an important new facet with the industrial revolution,
has been unstoppable as long as in every round of the game _someone_ managed to
raise the stakes and play another round of more intense exploitation.
Even absent a shortage of the basic resources, though, such a global just-in-time
system makes itself more and more vulnerable to even random failures which
cause cascading failures- and at the same time, the machine as a whole can afford
less and less total real investment (it's redundant and unprofitable, remember,
to do the same thing twice when you could fire half of them and do it only once!)
and will even starve in the midst of plenty.

Now throw into the mix that the game is pushing up against some fundamental
limits, too- PO is real, agricultural outputs are flagging from an exhausted
ecosystem and environmental damage on a catastrophic scale, inertia inside the
machine is pulling some components apart at the seams and the competition for
survival inside heats up even more.

Like the Ring, our technologies, the machine, is in its utmost a means of
introducing an imbalance of power. When we're on the using end of such a tool,
we call it a Good Thing. The dominant culture is that of the victors, and so
naturally by thie point in time 'progress' is sacred and a universal 'good'.
Like the Ring, no matter how good the intentions were in the beginning, the whole
thing turns to a miserable end because no matter what that imbalance of power
is used for to begin with, if one doesn't cover the meat and potatoes basics
(which includes a much bigger appetite if one needs to feed the ever growing machine as well- ah, the price of progress!) , one loses. As the machine becomes
more extreme and the exploitation it uses to give power becomes more absolute,
covering the basics becomes more and more important.. and since that's dependent
on physics and nothing else, the more advanced it gets the fewer differences
or deviations there _can_ be between any competing users of their Rings. Power
is power is power, and it needs fuel. Those of us in the wealthy West have been
using this Ring more than most others, but just as with the users of Rings, we
too are slaves to the tool of our power. We are so dependent on it that it is
a laughable proposition to consider disposessing ourselves of our Ring now, for
it would mean our own _immediate_ demise. Of course, we are also probably rather
aware that we have already stepped into the trap when we put the Ring on to
begin with- the power we got from that escalation came at the price of stability
and sustainability, and from then on we were borrowing from the future. Our
continuing use of the Ring also guarantees our _eventual_ demise, and the longer we go the worse it gets when it does happen, but of course at every step along the way, eventual is preferable to immediate.

Tolkien did a magnificent job illustrating that relationship.

And as those who returned to the Shire discovered, evn in the very final death throes, the Machine is likely to make a terrible mess and do great damage as it
clings to every possible branch or twig on its way down. Even those who eschew
Rings and try to get out of the way of the falling tower can and likely will
find the violent turmoil of the Machine's last days on their own doorstep.

LOL - makes you wonder why up here we call the tar sands 'Mordor'.

this is what makes the genre's of science fiction and fantasy so good. they are great ways to approach subject that if were approached directly would result in well a punch in the face more or less.

Thanks, Rudolph,

That was a nice interpretation of Tolkien. When people ask me whom I relate to best in the book, I always have to say the Nazgul, the lost kings who have been turned into ghostly wraiths by the power of the ring.

They always look at me funny ...

BP chief economist predicts prices falling back to $40 off back of increasing supplies:


No surprise there then?

Hello TODers,

By just doing a quick scan through my online yellow pages for my Asphalt Wonderland: I estimate that Phx and the surrounding area has over 400 tanning salons. I would imagine this equipment in not cheap. I wonder how many salon owners are Peakoil informed, and what their future plans are? Will they convert these tanning beds into areas where plants can grow under the lights? Will they eagerly abandon this equipment in time to buy bicycles and wheelbarrows? How eager are the former owners and their rich customers willing to work all day outside in the blazing Az sun to get the perfect tan along with his/her tomatoes?

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

That IS funny, Bob, first thing that pops into my head is Eskimo's and fridges.

But for them to make the required changes, I'm guessing you'll have to come up with a bike that provides the ideal tan while you ride it. Now before you jump on the obvious, I'll bet you they'll insist on airco.

Bob, that's funny! According to Wikipedia, Phoenix gets 300 days of sun per year! What will they think of next? Bottled water?

You've found the best example yet of why humans are not smarter than yeast. I've always thought that tanning salons and nail salons will be some of our most sensitive economic indicators.

I would say car washes. I personally can't imagine anything stupider than paying money to clean a car which is dirty 10 minutes later.

My guess is that when you are paying $200 to fill your SUV, you will quickly stop caring that it is dirty. At that point, hopefully everybody will hate cars, and be more than ready to scrap them for something (anything) that will get rid of that cost.

I would add plastic blow up santa clauses/snowmen and drive up coffee shacks.

my wife has a tanning bed at her day spa. the power meter make a crazy sound when it runs, So many times I've threatened to put up solar panels on the building. just imagine, getting a tan with solar power, so cutting edge.
as far as economic indicators, I don't think so. vanity is of our most over looked natural resources. It's my observation that most women will go without cable, high speed and coffee before giving up their biweekly trip to the salon.

hello bob. one can only hope they see the light.
on a side note, i am glad you at least were not caught in the recent ideological purge here. and i do hope your not caught any any of the other ones to come too.

i do hope your not caught any any of the other ones to come too.

It looks like you need some sedative or help from a shrink.
Don't worry, I have done much worse than many, been nearly banned and I am still here, so?
Oh! That's because I am a doomer?
OK, paranoia can be cured too...

Re: Weak Oil Theory

Left to market factors, the price of oil would tend to drift lower as new technology increases the supply, not just of oil itself but also the supply of energy that can be extracted from a barrel of oil. Today's oil refineries get many more Btus out of a unit of crude oil than they used to. At the same time, demand for oil per unit of economic output -- or oil intensity -- is falling as energy users constantly shift energy practices and technologies. Since 1970 alone, the oil intensity of OECD countries has dropped by 50%.

A few comments:

  1. OK, how many more BTUs can refineries get from a barrel of oil than in days past? Or is it rather better utilization of poorer grades?
  2. Isn't the biggest reason for declining oil intensity of OECD countries the outsourcing of heavy industry to China? In any event, the message seems to be that it doesn't matter how much oil we use as long as it produces more and more GDP.
  3. By devine decree, oil should be at $30/bbl. That it has been twice that high for awhile now is ascribed to bad, greedy countries. Of course, this is just an admission that no one else can cough up any extra production to undercut the current rate. Is it that market forces can't be expected to work their magic in the short term?
  4. In a similar vein, I think that the median US house will cost $50k over the next 20 years. After all, we are able to put more and more house on the same size lot. Plus, new land is being freed up every year by carving up farmland which isn't pulling its weight in GDP.

JB, what caught my eye in that article was the disconnect between the author's insistence that oil ought to be priced at $30, and his listing of all of the reasons why it was in various people's interests (many of them government interests) to keep the price up. CYA time, I guess.

I'm just having a hard time figuring these analysts out. Who believes this stuff? Certainly not oil producers, or they would be producing like mad to make more money before the price goes back to $30. Unless, of course, they can't.

I don't get it either. They aren't TOD regulars, that's for sure. Michael Lynch was quoted in our hometown paper a couple of months back saying that oil would drop to $40 a barrel in the next year or so. I guess that makes Michael a pessimist!

The underlying principle is the "Peter Huber Principle," to-wit, that our consumption of energy will increase essentially forever. There will always be new sources of energy to replace older, depleting sources of energy.

If pressed, Huber will admit that some oil producing regions are in terminal decline, but he literally asserts that our aggregate energy consumption will increase forever. As I have previously noted, this is analogous to asserting that while individual oil wells will peak and decline, the production from a field--which is the sum of individual wells--will never peak and decline.

That's why I always thought it interesting that the Peak Oil guys--who believe that a physical world has physical limits--are the ones who are commonly described as "cultists."

The problem is, who has the more beguiling message--the sour puss geologist telling you to "ELP" or the guy telling you that we can maintain our SUV/Suburban way of life--we will just use different forms of energy?

The problem WT, is that earth scientists are taught that resources are finite, while economists are taught that resources don't matter.

Enough with the economist jabs! Seriously, it makes you look ignorant. You can not use a superficial understanding of the science to interpret the comments of ONE economist (who happens to have a bearish position on oil) and extrapolate to the entire field of economics.

Allow me to summarize more succinctly:
Economics is the study of how to most efficiently allocate scarce resources.

By definition economists understand resources are finite.

Surely you jest, my friend!?!?!

Very few economists that I know of show any sign of understanding anything at all about resources.

There are some people engaged in environmental or ecological economics, but they do seem to be swimming against the tide of that sour pseudo-science.

Which economists, in particular, do you see as studying "how to most efficiently allocate scarce resources?"

Hi beggar,

Since it's late, I just thought I'd chime in after doing my civic duty (I hope) - engaging in a "peak oil" conversation with one econ undergrad and his buddy, a Spanish/Biopsych (double) major.

me: "OK, so you have travelled a bit. Been to Mexico?"
Bio: "Latin America".
me: "I have a question for you - Why is it there's so much wealth in the US?"
Econ: "Other people don't have that mindset. They don't think about making money like we do..."


Economics is a broad science, but a central tenet to much of economics is the concept of scarcity.

Scarce is not the same as finite. In fact, I don't think peak oil means that the oil will run out, it probably never will. It's just that supply will go down so that it will become truly scarce, in the sense that there is not enough for everybody currently consuming it. But for those who are willing and able to pay enough there will always be oil.

That is true to an extent, although an economist would generally say that oil is a scarce resource now. That's because there is not enough available to satisfy every person's unlimited desire. There are billions of people in this world who do not own a car (or have one car instead of two) because they can not afford it. If we (as a society) tried to cater to everyone's desire there would not be enough to go around. Rather than make difficult decisions as to who gets oil and who doesn't (as in a command economy), in a market economy the price of a good regulates how much is demanded.

You're right that there will always be oil. The price may one day have to be in the stratosphere to make supply equal to demand, but there will still be some oil being produced and consumed. Even if it's just as a result of CTL.

Ener Ji,

No disrespect meant here, but you had me falling out of my scarce armchair and ROTFL with some of your ideations. Obviously you accept with unquestioning blind faith some of the propaganda that has been pumped into your head by a college "professor" or another such authoritarian figure:

... it makes you look ignorant. ... a superficial understanding of the science [Economics? a "science"? give us all a break] ...
Economics is the study of how to most efficiently [efficient for whom???] allocate scarce resources [to the advantage of whom??? This is an incomplete sentence.].
By [their] definition Economists [claim to] understand resources are finite.

I have yet to see an Economist declare that the number of practical "substitutes" might be finite.

I have yet to see an Economist declare that "human ingenuity" might have finite limits.

--Sorry, still laughing (not at you, just at the statements).

I awakened this morning still on the floor with a hangover from my laugh binge of last night. What I wanted to add (now that I'm sober) is the observation that so many of our fellow human beings accept, without any hesitation or questioning, whatever "defintion" or assertion the Eco 101 professor will throw at them.

Here is MY definition of what "Economics" should be:

The study of how humans and other animals trade with each other.

It is a very short, but deeply loaded defintion.
Westexas mocks here at the Peter Huber notion that "our consumption of energy will increase essentially forever. There will always be new sources of energy to replace older, depleting sources of energy."

On a broad perspective, as long as the Sun keeps burning, there will be more radiant energy heading our way from that heavenly body. Imagine that you are a bonobo ape as pictured above.

Imagine that due to your limited (finite) brain power you are unable to conceive of the notion of concentrating optics and solar energy. Then indeed it does seem to be an absolute truth that when the forest runs out, "all the energy" will be gone.

Imagine next that you are a human being and you are deeply in love with the notion that human ingenuity is at the top of the Universal heap. Then of course, and naturally, you will accept the argument that "all the energy is gone" if humans are incapable of grasping something that occurs at the next level up in cognitive appreciation.

I use bonobos as an example here because they too have an "Economy". They trade with each other. They establish power structures and social contracts. Given that this is a family web site, I won't go into too much detail regarding what bonobos use as their medium of exchange --their "money". Suffice it to say that we humans think we are above that sort of behavior.

Insights into bonobo economic behavior may be found here and here.

I'm glad I was able to give you a good laugh.

Just because you do not consider economics to be a science doesn't not make it so. Unfortunately, just because you have an idea as to what the definition of economics "should be" also does not make it so.

The lessons learned from the study of economics offer extremely powerful insights that can help us understand how people and markets will react to peak oil. That understanding can then help us as a society to chart the best course. It's really unfortunate that so many peak oilers feel at odds with economists and economics in general, when really economics is simply a tool to help us analyze and predict human and market behavior.

.... a tool to help us analyze and predict human and market behavior.

Ener Ji,
Well now we are getting somewhere rather than just falling off the bar stool drunk again.
If you truly want to predict "human" behavior (which is merely a non-special subset of animal behavior) you need to scientifically admit that human beings are emotional, irrational creatures and thus often make emotional, irrational decisions, including decisions on whether to "believe" in Peak Oil and whether to respond rationally to the situation. Real scientists do not believe in invisible appendages or in intelligent design by such supernatural forces.

The powerful insights that I got from my Eco 101 courses are that most people are gullible and accept what the teacher says on a faith-based basis.

It's a bit sad that you come to that conclusion after taking a single introductory economics course.

If you truly want to predict "human" behavior (which is merely a non-special subset of animal behavior)

Realistically speaking, there are clear qualitative differences between human behaviour and the behaviour of other animals, to the extent that it's easier to remark on similarities rather than differences at anything other than an extremely coarse level of analysis.

you need to scientifically admit that human beings are emotional, irrational creatures and thus often make emotional, irrational decisions

"Bounded rationality" is the term used in economics to describe that.

Real scientists do not believe in invisible appendages or in intelligent design by such supernatural forces.

Real scientists believe in whatever they want - I've seen Nobel Prize dedications that thanked Allah for providing this marvelous world to study and understand.

Fundamentally, it doesn't matter what a scientist believes - what matters is his science. And if he keeps doing good work, with solid data, that passes peer review, is reproducible, and leads to insights in the field, the rest of us scientists just plain don't care what his religious beliefs are - they're no more relevant than her gender.

Ha! Ha! I knew I'd draw fire for that one.

Actually, it was a lame attempt at humor. I was merely pointing out that geo-types tend to focus on a physical resource while econ-types see human ingenuity as the ultimate resource. Apologies for any gastric disturbance that I may have caused.

In a market with abundant supplies, the price of a commodity falls to the cost of production, and only the low-cost producers stay afloat. The higher-cost producers close the mine or cap the well and come back years later when prices may be higher.

These guys who think "the magic price is $30" are the ones who think there is plenty of supply, plenty of surplus production, plenty of new projects in the pipeline, and it is only government interference and dirty terrorists that are keeping the prices from dropping to the cost of production, where they belong.

They also don't think the cost of production has gone up in the last few years. The cost of production probably isn't $30 anymore.

The Stennis arrived in the 5th Fleet AO today, as reported on Bloomberg and quoted above. I expected oil to go up. It dropped, attributed to warm weather and the contract expiration (though the April contract dropped almost as much). But if you are a money manager and think that terrorist thugs and those pesky Iranian rascals are causing unrest, pushing up the cost of oil, you probably think the arrival of a carrier group is going to cool the situation off and lower prices.

Commodity market cycles are fairly long with respect to an investor's lifetime - like 20+ years. Unless they are near the end of their careers, they haven't been around long enough to realize that it takes years of higher prices before more expensive projects are embarked upon (which depend on higher prices to show a profit), and years more to bring the projects on-line. Then you get the production. Then the price can drop.

If we really are not at overall peak, if we really are going to bring another 50 million barrels per day of capacity on-line, we'll have to convince college freshmen to major in petroleum engineering (by showing them big starting salaries and a career path), wait for them to graduate, hire them and train them, then unleash them on new projects. Long lead times.

I think the people waiting for $30 oil are going to be waiting a long time, regardless of PO. Still, I never thought we would drop below $50 again, but we did.

Oil price is going to be ever more volatile, and this means down as well as up.
Refiners are seeing higher futures (very unusual historically for the oil markets), and this encourages them to maintain/build high storage. Prices climbed through last summer because refiners kept buying even as storage continued building. But, everything lined up last jul/aug, and the world produced more in a two-month period than ever before, certainly all liquids. Suddenly stocks surged, prices begon going south even as stocks continued building thru mid oct, some buyers stopped buying, and the pendulum swung violently the other way.
Storage has declined 60+Mb since mid oct, tho still high historically, but futures are remain higher than spot, so refiners remain interested in high storage. IMO stocks will continue to decline - recently fell below year ago levels, a first* in a year, partly geology and partly political, and at some point the pendulum will swing the other way, maybe violently. And, this is if iran is not attacked or embargoed...

*BTW, NA ng storage is also below year ago levels... IMO the stars are lining up for higher energies. Markets remain bearish, maybe not for long. Potential for higher prices is much better now, with storage much lower and price under 60, than they were in jul when storage was very high and price was nearing 80. We might come out of the spring shoulder with a rush...

All I can say is, if oil halved in price and the price of motor fuel went down proportionately, I'd buy a lot more of it - to burn for "happy driving" days and trips, and to store in a garage full of jerry cans. Which would presumably drive the price back up again. Surely price can only go down and stay there if either demand is seriously destroyed (i.e. recession or some "wonder substitute" which isn't yet visible) or supply (C + C + NGL output) is significantly increased, which doesn't look possible either.

Terence Corcoran seems to know dangerously little for being a pontificator for the National Post. The Toronto Globe and Mail is touted as Canada's newspaper and its rival the Post makes the contest easy. It is a thin and feeble paper, probably supported from without, as it has no visible means of support, and seems to employ the B team from the Weekly Standard.

That said, I am hoping that his column leads the financial wizards of Toronto to short oil stocks so I can have a buying opportunity. The Recoil Theory.

These bean counters who cite the GDP/bbl relationship are not connected to reality. He thinks a great deal of oil is used to produce goods and services when in fact it is electricity. Very little electricity is generated using oil.

That comment about "...get[ting] many more Btus out of a unit of crude oil than they used to" pretty much flags the author as a know-nothing - probably an arts graduate. Same thing as Freddy Hutter's recent comment about 100-square-mile well spacing in the Saudi oilfields. Once you see something like that, the weight you attach to the author's opinions goes to zero.

You look clean today, I actually read all of the posts.

One thing has been bothering me for a while: Carbon Sequestration/'Clean Coal'.
I have heard these two things mentioned a few times on drumbeats, mostly when GW is brought up and I was wondering if anyone had written an article or could fill me in on these technologies, especially the carbon sequestration. I have read a few proposals of ways to sequester CO2, some more laughable than others, and none seemed to have to possibility of using less energy than was produced when the FF was originally burned.

Note that I am not including Terra Preta in this query, because it is simply too cool to be lumped in with the other technologies, and also because it is more of a temporary storage method than a true sequestration method. Also, I am curious about methods of carbon sequestration that are currently in use, work in the lab, or proposals that have been published in peer-reviewed journals; not some idea that some guy in some town had. Ideally they would be methods that can be teamed with a FF power plant and not be a net energy loser.

Thanks in advance for taking the time to reply.

This page at the NETL site has a lot of (links to) information on both capture and storage:


You won't find much about the beauty of Terra Preta there anyway.

I wouldn't mind reading that article myself!

It will always take a lot of energy to capture, concentrate and pump CO2 to sequester it, and that simple point seems to be overlooked in much of the discussion of the subject, which tends to focus on technical and geological feasibility.

Shell in Australia has a pilot IGCC plant with CC&S planned. According to figures they showed in a talk they gave here a few months ago, adding the CC&S derates the efficiency of the IGCC plant from 47% to 34%. In other words, capturing the carbon turns a high efficiency plant into an ordinary plant, and so retrofitting an existing ordinary plant would substantially derate it (since you don't have the concentrated CO2 stage of IGCC). It also means that moving to IGCC as an efficiency measure in the end won't save any primary energy at all because of the CC&S energy costs.

I have read a few proposals of ways to sequester CO2, some more laughable than others, and none seemed to have to possibility of using less energy than was produced when the FF was originally burned.

The synthetic natural gas plant which is feeding its CO2 product to an oil field in Weyburn, SK would appear to be energy-positive.  This contradicts your claim.

I've not seen the actual input and output figures for the SNG plant, its pipeline (and pumping requirements), etc. so I cannot say exactly how good it is.  I will accept corrections.

Terra Preta ... is more of a temporary storage method than a true sequestration method.

In this context, thousands of years qualifies as sequestration.  Some Terra Preta appears to be 2000 or more years old, and IIRC archaeologists regularly date remains of fires which are much older.

I just wanted to thanks Leanan for her wonderfull everyday job of collecting these interesting articles.

Saudi discovers new field

Derwaza-1 flowed at 3,915 bopd. Of course, Oil Minister Ali al-Naimi can't give further details on the size or future production yet.

Maybe this is Saudi's last attempt at trying to convince the world that they have ample oil reserves and production capacity to meet the world's demand. I think that Saudi may have difficulty meeting the demand increase starting in about 4 months.


New field boosts Saudi reserves

By Upstream staff

State-run Saudi Aramco has discovered a new oilfield in the east of the country near the giant Ghawar field, Oil Minister Ali al-Naimi said today.

"Saudi Aramco has discovered a new oilfield south east of Ghawar," the official Saudi Press Agency (SPA) quoted Naimi as saying.

"On 11 February, oil from the Derwaza-1 well ... flowed at a rate of 3915 barrels per dail, (together with) 11.9 million cubic feet of gas per day," he added.

The well, 70 kilometres south of Ghawar, is expected to produce at higher levels, he said. He gave no further details on the size of the find or potential future production.

Saudi Arabia claims about 260 billion barrels of reserves, nearly a quarter of the world's total, according to the BP Statistical Review.

Saudi oil officials say it also has gas reserves of 242 trillion cubic feet.

20 February 2007 14:06 GMT | last updated: 20 February 2007 14:06 GMT

Qatar & ExxonMobil drop GTL project which was going to produce 154,000 bopd due to costs rising from $7 billion budget in 2004 to $18 billion.

Wonder what will happen to other GTL projects around the world?



At an industry meeting a year or so ago, I asked the President of ExxonMobil Production (not the main company), what he thought of GTL versus LNG. He basically said that they were only doing GTL because Qatar wanted them to do it.

Note that the new GTL cost would have been a capital cost of about $117,000 per bpd of production--not counting operating costs and the cost of the natural gas. This is in the same range as some costs in the Tar Sands Play in Canada.

I ran some numbers on a proposed pilot cellulosic ethanol project a few days ago, on a BTU equivalent basis, it will cost more than $500,000 per bpd of oil equivalent.

The common theme? It is going to be very, very expensive to ramp up alternative liquids production.

Once again, I think that Alan Drake has the most sensible idea.

Ah come on WT, you know that the BTL project in question is the first of its kind in the world whereas Syncrude and friends have had literally decades to play in the tar box.

The true bpd numbers you came up with (thank you btw) were more along the lines of $300,000 if I'm not mistaken.

That's correct. Per barrel of ethanol, its on the order of $300,000 per bpd, but adjusted to the BTU equivalent of oil, it was $500,000 plus.

I realize it's a pilot project, but ExxonMobil is canceling projects that cost $117,000 per bpd of oil equivalent. It would be a pretty good trick to get the cost per bpd of oil equivalent down to the range at which ExxonMobil is canceling projects. But I guess it's certainly possible.

In any event, I think that Alan's Electrification of Transportation idea makes a lot more sense.

IMO the cost of ethanol can't go down much because the ng input is so high. NG is cheap now, but imo this is temporary... ng rigs are increasing in the us only because canadian rigs are down 25%... so, we will see flat us ng while canadian exports decline sharply, both because of lower production plus more for tar sands. So, with higher ng, how can ethanol cost go lower, even if the fertilizer is imported from qatar?


The cost (in $$) will go lower when they start using coal instead of natural gas, but this will only make the CO2 cost go higher.

Well it depends on where and how and from what the ethanol is produced.

In the US for instance, an integrated corn ethanol biorefinery would enjoy both increased ethanol yields and an NG free facility via the inclusion of CHP generation from a 3rd gen thermo-chemical production path.

Furthermore, as cellulosic and thermo-chemical ethanol production paths become increasingly cost effective, corn ethanol will likely be phased out due to unfavorable operating profit margins.

Lets face it... the corn ethanol plant infrastructure is already built and although many here don't see it, 2nd and 3rd gen ethanol technologies are exceedingly complimentary not only to the fermentation production path but more importantly, the infrastructure itself.

I totally agree with you about Alan's plan and wisdom here. I would expect that capitalism may realize this before the government choosing winners realizes it. My feeling is that these ethanol experiments are only made possible by an affluent society. When things get more painful--higher gas prices, unemployment, and food prices, that Manhattan project for transportation will have to go the electrification route, along with very high MPG FF vehicles. How much time we have for that to happen, and how painful the process of getting there will be, are the unknowns.

Really? How affluent is Brazilian society?

The ones that buy the ethanol are very affluent. The ones that do the work to produce it, not so much.

>At an industry meeting a year or so ago, I asked the President of ExxonMobil Production (not the main company), what he thought of GTL versus LNG. He basically said that they were only doing GTL because Qatar wanted them to do it.

Yup. I am glad some one else is seeing the light. I started discussing the problems of GTL/CTL/BTL more than a year ago. In addition these types of projects have limits to scale. I suspect that the tar sands is approaching max production rate, far short of what is reported in the media and PR releases. Most of the future projection estimates fail to account for logistics issues, which can quickly stall expansion, as the costs for maintaining the existing infrastructure begin to suck of capital, materials, resources, and labor that would have been used for expansion.

While I believe production from non-conventional liquid fuels will continue to expand, the expansion will never be able to match declines of conventional oil. As conventional oil production declines, it will lead to shortages, and loss of capital, labor and materials required for future expansion of non-conventional sources. Unemployment will surely rise as fuel prices rise leading to demand destruction. Available capital will disappear as the recession causes easy credit (do to higher defaults) to dry up. Existing project cost overruns and declining demand (for energy, goods, and services) makes investors perturbed in funding future expansion or new projects. Another words, the aftermath of an energy crisis will be a bad recession that removes investor confidence. The situation will further be exerbated caused be bad gov't policies (ie High tax rates on energy companies and increased entitlement funding). We'll likely face a very long period of spiralling economics lead by decline investor confidence, declining energy production (both by declining production at existing fields and lack of upkeep of production infrastructure (aka declining production in Venzuela and Iran do to bad gov't policies).

Sidenote: Watch Ben Bernake speeches and watch his eyes when he discusses the future prospects of our economy. If Ben ever envites you to a poker game, I believe you find it quite profitable to play.

"I suspect that the tar sands is approaching max production rate, far short of what is reported in the media and PR releases. Most of the future projection estimates fail to account for logistics issues, which can quickly stall expansion, as the costs for maintaining the existing infrastructure begin to suck of capital, materials, resources, and labor that would have been used for expansion."

Good point. I think someone previously provided some information about depreciation allowances for tar pit investments. Definitely worth following up.

Re: Artificial trees

Claire showed she could actually pull carbon dioxide out of the air by blowing it through a solution of sodium hydroxide.

Well, duh. Now all we need is 20 million (or was it billion?) tons of NaOH per year. And someplace to dispose of the baking soda.

It's surprising how much traction a silly idea like this can have.

We could alway dump all that NaHCO3 in the ocean to bring up the ph.

Or we could just dump the NaOH in the ocean immediately and bring up the pH even more. Come to think of it, that would bring it up exactly as much as the alkali manufacturing process brought it down.


US contingency plans for air strikes on Iran extend beyond nuclear sites and include most of the country's military infrastructure, the BBC has learned.

Scary to think about.

Recent publications reveals that Zibgnew Brzezinski, Jimmy Carter, and others incited Saddam Hussein to attack Iran.

This is a violation of CHAPTER 50A—GENOCIDE
Release date: 2005-08-03

§ 1091. Genocide
§ 1092. Exclusive remedies
§ 1093. Definitions

Let's see what happens.


Senior citizen is going essential non-gas-wasting brown and rainbow trout fishing at Navajo lake tomorrow.


That's a coincidence because Dick Cheney is going trout fishing an hour up the road from my place in a couple of days. I'm 43 degrees south. But he's taking Air Force Two.

For peakers in Ontario.
Refinery fire causes shortage of gas and stations to close.


Hot Damn, TOD is back. About time!