DrumBeat: March 5, 2007

A review of 2006 EIA Data; Expectations for Year Ahead

Oil prices set new records and the industry maintained a historically high level of activity in 2006. Energy agencies issued consensus forecasts that production would rise. Yet crude oil production was down and total liquids production was flat. The economists should be shaking in their boots.

New Evidence That Global Warming Fuels Stronger Atlantic Hurricanes

Atmospheric scientists have uncovered fresh evidence to support the hotly debated theory that global warming has contributed to the emergence of stronger hurricanes in the Atlantic Ocean.

US Coal-Fired Power Plant Plans up in Smoke?

The future of coal-fired power plants is seen so tied up by legal challenges from green groups, that it could slow, or even thwart, plans to use America's abundant coal supplies to generate its growing electricity needs.

High temperatures leave five million Chinese short of water

Nearly five million Chinese are unable to get enough drinking water because of a series of droughts caused by "abnormally high" temperatures, state media said Sunday.

Crucially in a nation which still relies on agriculture for the majority of its people, the drought is also cutting off sufficient water supplies for 2.5 million livestock, the Xinhua news agency reported.

Telling OPEC to keep its oil

The economics of biofuels are debatable, but regardless of the economics, alternative fuel has one overriding appeal: If we make enough of the stuff, we can tell OPEC and characters like Venezuela’s Hugo Chavez to take their oil and stuff it.

Gasification may be key to U.S. ethanol

The government awarded $385 million in grants last week aimed at jumpstarting ethanol production from nontraditional sources like wood chips, switchgrass and citrus peels. What's surprising is that half of the six projects chosen will use a process first discovered almost a century ago to turn coal into a gas.

Why Iraq's new oil law won't last

It faces strong opposition, companies reluctant to get involved, and corruption – and may be contested as invalid.

Oil Innovations Pump New Life Into Old Wells

Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before.

Brazil Accused of Getting Biofuel with Slave Labor: Full Tanks at the expense of Empty Stomachs

One of the main concerns is with working conditions in farms. And this includes the use of indigenous labor which, particularly in sugarcane plantations, often faces conditions similar to slavery: low pay, no safety, long months away from their villages and homes.

New Zealand: Renewables don't need help to compete, energy users say

The Greenhouse Policy Coalition, whose members include Fonterra, New Zealand Steel, Solid Energy and Vector, commissioned a report from economic consultancy ACIL Tasman that found renewable generation is already competitive with or below the cost of coal and gas generation.

Nationalization Of Oil Sector In Venezuela: Action Or Reaction?

Some specialists argue that even if western firms will withdraw from Venezuela, this state will be able to find an alternative and, as such, will be open to Russian companies. Thus, since 2004 the Russian company LUKOIL plans to invest in the economy of the country about one billion USA dollars. Then from the end of 2006, the company started a joint drill with the national company of the country in one of the oil fields.

The Big Green Fuel Lie

The ethanol industry has been linked with air and water pollution on an epic scale, along with deforestation in both the Amazon and Atlantic rainforests, as well as the wholesale destruction of Brazil's unique savannah land.

CO2 output from shipping twice as much as airlines

Carbon dioxide emissions from shipping are double those of aviation and increasing at an alarming rate which will have a serious impact on global warming, according to research by the industry and European academics.

Evangelical Angers Peers With Call for Action on Global Warming

Focus on the Family founder James C. Dobson and other conservative Christian leaders are calling for the National Association of Evangelicals to silence or fire an official who has urged evangelicals to take global warming seriously.

Germany wants 60-percent cut in CO2 by 2050

Global warming is human rights issue: Nobel nominee

How hot is it? So hot that Inuit people around the Arctic Circle are using air conditioners for the first time. And running out of the hard-packed snow they need to build igloos. And falling through melting ice when they hunt.

The Climate-Change Precipice

The question now is what to do about global warming. This is a political problem more than a scientific one. The solutions (if we can agree on any) will require political will and imagination -- and also pain. That was my only reservation about the Oscar night celebration of Al Gore's leadership on this issue. The gowns and black ties and the celebrity back-slapping made it look like dealing with global warming will be fun, a walk down the red carpet. But it's more likely to be about catastrophe and how to share the pain.

Peak oil talk in Albany, NY

Dr. Taury Smith, New York State Museum geologist, will discuss the past, present and future of oil production, the concept of peak oil and the issues surrounding this controversial topic in "Peak Oil: The End of Life as We Know It?" at noon Thursday in the Carole F. Huxley Theater of the state Museum. Admission is free.

Britain to Become German Energy Vassal

Knowingly or not, Britain’s North Sea geologists may have deceived their nation. Britain is no longer energy self-sufficient and, contrary to forecasts and models, oil and gas production has dropped precipitously.

Germany has a strategy to take good care of British energy security. But should Britons be concerned about placing too much reliance upon their former enemy?

Energy Sector at Nicaragua-Venezuela Joint Commission

This meeting, to whose closing ceremony on Tuesday will be attended by Venezuela's President Hugo Chavez, means to formalize several accords still implemented, the minister told Prensa Latina.

Rapaccioli recalled that as part of those agreements, Nicaragua has already received 32 electricity generating plants from Venezuela, eight of them already producing 15 megawatts to the national electric power system.

Feds say 'no' to off-road fuel relief; Truckers 'on their own'

The federal Conservative government won't find a way to allow Ontario truckers to fill up temporarily with off-road diesel until the fuel supply disruption in that province settles.

At a press conference in Victoria following a meeting of the country’s energy ministers, federal minister of Natural Resources Gary Lunn said Ottawa would not grant the Ontario Trucking Association's request of making available non-ULSD fuel (still used in off-road and rail) to the highway truckers in Ontario, which has been plagued with a province-wide fuel shortage since the middle of February.

Gas price cap could spark a shortage, MLA says

Surrey-White Rock MLA Gordon Hogg says a private member’s bill calling for B.C. to regulate gas prices could backfire on drivers and cause a province-wide fuel shortage.

Premier says China to close dirty steel mills in conservation drive

: China will close its dirtiest steel mills as it steps up efforts to rein in surging energy use and clean up environmental damage caused by its economic boom, Premier Wen Jiabao said Monday.

"We will take strong measures to save energy, lower energy consumption, protect the environment" and use limited farmland more effectively, the premier said.

What would peace in the Middle East mean for the oil price?

The international conference convened in Baghdad for March 10 represents an important first step to finding a lasting solution to the chaos of Iraq since the US invasion four years ago. But if the Middle East can summon the political will to deal with this situation will this not cause a fall in the oil price?

Hi everyone,

I'm just a lay-person when it comes to this stuff. But the information, and discussion on this website is, I believe, invaluable.

In the end, this is a search for truth and honesty, from an industry that is conspicuously, and more often than not intentionally lacking in both.

So my greatest concern right now isn't so much the "if/when", but rather the message.

I agree completely with the tone of Robert Rapiers comments in the last drumbeat.

What do "we" do on this site, if those of us who are calling for a peak right now, (or already past), face a new peak (in world, or Saudi) production in, say, 2008 when demand picks up again?

How do we address the people that would call us crackpots or chicken-littles?

Personally, I think we must shy away from any pronouncements unless it's already in the rear-view. Put trumpet loudly what the data shows us for the future *barring any new data* or massive technological advancements.

Maybe we should be exploring exactly what those advancements might be, and hnow they might affect what we're trying to warn people about.

We are in this together.. if we, the people who are the most acutely aware of this problem, can't collaborate and show a united, and fact-based approach, then there is no hope for us to affect change anywhere in the "real".

Disagree. We will never have a united front until peak oil is years in the rear view mirror. By then, it may be too late to do anything about it.

We have competing theories now. Eventually, we will know which one is right. That is how it should be, IMO.

I wouldn't worry about being considered crackpots. We already have a lot more prominent peak oilers who are more extreme than Westexas or Stuart will ever be.

Your comments remind me of the scientists who wanted Stephen Jay Gould to shut up about punctuated equilibrium. They argued that it was better to present a united front against the creationists "just for now." Um, no. That's not how science works.

I'm not saying we should all agree, not at all... open debate and conjecture and argument is how truth is discovered. I just think, and I think RR would agree, that there isn't much discussion about what might cause oil production to *rise*. And how *we* as the unofficial "peakist community" would address that.

It would be valid to go through all the possibilities, and revisit them on a regular basis. And not simply as an exercise to discredit anything that might go against peak-oil-now.

Hey Chrisale,

Here is my letter to my congressman, which I will edit and send to my senators. Maybe if we want to do something we should try to force the Congress to ask one question of our friends the Saudis. It seems like any easy question from my point of view. Editorial comments accepted.

Dear Mike,

I do not write too much, but I am worried about the state of the world and frankly my investments at home. I have thought about the reasons for my anxiety and I have come to the conclusion that you can help. The source of continued growth and expansion in the world economies is the effective use of energy. Energy allows countries to reduce human suffering and elevate freedom. With this thought in mind, we urge you to ask President Bush to implore his friend and ally Saudi Arabia to “open the books” on the oil reserves to outside scrutiny. The audit of energy resources will allow me and many others to plan for the future and allow me to get back to work to generate revenue for the Treasury.

If you would like my recommendations for the blue ribbon panel to conduct this review, please do not hesitate to call, or better yet speak to Roscoe Bartlett R-MD.

Your Constituent,

Greg Hunter


Two, maybe three questions:

1. Do you have a net worth more than $10 million?

2. How much money have you contributed to said politician?

3. If you haven't sent ALOT of money why are you bothering to write your Congressman?

If the answer to #3 is "I dispatched some hookers along with the note I sent . . ." then I understand you may not be able to disclose your lobbying strategy here on a public internet forum.


Disagree. We will never have a united front until peak oil is years in the rear view mirror. By then, it may be too late to do anything about it.

I tend to agree with this. In a sense it is already too late, and the actual ‘peak’ may be in the past, not that that matters much.

The difficulty is that it is a systemic problem (compare with smoking, asbestos in buildings, frogs dying, forests being decimated, teen drugging, car accidents, etc. though all those are also embedded in particular landscapes, societies, etc.) and the change required is a type II change, that is a ‘revolution’, a change in basic principles, rather than ‘tweaking,' ‘fixing’, ‘adjusting’ and so on.

Peak oilers, eco-types, seers and savants, your modest vegetarian bicycle riders, up-to-scratch scientists, even your mad doomers, don’t have an agenda they can agree on, which is understandable as the problem is so overwhelming, bringing so many parameters and ‘habits’ on board.

Second, and more importantly, they have no (or little) political power, and face opposition, which is determined, not to ignore the problem (they know all about it) but to handle it in their own way. They don’t want any interference, and hold the upper hand. So the scene is not ‘in getting the news out’ or ‘making ppl aware’ (say, though that might be a first step of some kind) but in gaining power to force the adoption of one or the other ‘solutions’, more properly, reactions. And that is a tough call.

Reason, scientific fact, understanding, have all gone down the river long ago.

Argh the river dried up. I forgot!

Some people who post here feel they are part of a community, or feel a responsibility towards creating credible policies. Reasonable people, with reasonable goals.

Others of us don't care about credibility in this sense at all. It was blindingly clear ca 1977 what the future would look like in terms of oil, and whether that future was in 10 years or 30 years wasn't exactly the important point - the important point was to prepare.

If you live in America, look around and tell me what you see in the way of preparation for peak oil since 1977. So much for credible policies following reasonable discussion.

When peak oil arrives, and in my view, it has, it likely won't lead to Americans suddenly questioning how they have lived for the last 30 years. But it will force them to change how they live, whether they desire it or not.

One of the big background questions here is, how will America deal with reality? TOD is pretty America-centric, which allows for a fine glimpse into something a lot of non-Americans just can't grasp - why Americans have built an entire infrastructure over the last couple of generations which doesn't allow people to walk, for example, is something Germans just can't comprehend.

At this point, whether peak is now or in 3-5 years (a solid consensus estimate by most reasonable measures) really doesn't matter that much to America's immediate future.

One OECD country, a very statist one, - France -, following the legacy of De Gaulle, did take it to heart and tried to anticipate and build a ‘communal’ - country, nation, region, all people together - solution, or action, or re-action, and, as we know, go for ‘nukulear’ run by the State.

Whether this is good or bad I leave up to others.

Of course, France’s nuclear push predates the early 1970’s oil shocks.

First nuclear plant which produced electricity, USSR, 1954.

France: 1963, at Chinon. (afaik)

So history has a long arm...

Good points expat -

I read and sometimes post comments to TOD because I just happened to stumble upon the immediacy of peak oil (I’m a geologist so I knew the concept well but truthfully hadn’t paid much attention to its implications) when I was surfing around the internet after a particularly bad week (personally) in these United States. The internet, TOD and Kunstler in particular, contained observations and opinions from people who actually had the perception to realize and articulate that something was (is) fundamentally wrong out there with our way of life. I had this building feeling that if you were a person who didn’t buy into this hyperconsumer lifestyle then you were just going to get rolled by those who have been consumed by it… I simply was not encountering any engagement on this feeling with any other people I talked with – just would get the classic “eyes glaze over, 1000 yd. stare, quick change the subject this is boring me” response. My girlfriend has been amazing because she does see what first brought me to TOD and agrees that we’re in trouble but I think she’s a bit more optimistic than me and thinks that things could get bad for a spell but ultimately we’ll all pull together… I argue with her that I don’t think human nature (genetics) bode well for that kind of happy thinking… but we’re still both works in progress – and we are struggling to prepare, as you suggest…

Thought I’d relate this to you because I think your observation about TOD contributors feeling as though they’re “part of a community” really is what has been most important to me. The reinforcement of these ideas has actually spurred me on to prepare for this when everyday influences and encounters try to suggest the exact opposite (“move along – nothing to see here”, bread & circuses etc.). Seeing items other people have written and saying to myself “damn, that sounds EXACTLY like what I think…” has been very helpful when, in my every day life and encounters, I feel that way very, very rarely…


Chrisale, thanks for the great post. But I must disagree with you when it comes to making pronouncements about peak oil. Suppose Matt Simmons had this same attitude concerning his prediction that Saudi oil production is nearing its twilight? Suppose he had been concerned about being called "Chicken Little?"

At any rate, as I have stated time and time again, the exact month that production peaks is not important. What is important is the current plateau that we now find ourselves on. We have been on that plateau for about two years. That IS important. During that two years every nation tried to ramp up production. Every old field in every nation is now being milked for all its worth but we still remain on the plateau.

We have been talking about these "massive technological advancements" as you put it for almost thirty years. Catton, in 1980, called them superstraws. They suck the oil out a lot faster but do not put more oil in the ground. What Saudi Arabia and other nations now do with horizontal christmas tree wells Texas did years ago by sinking a vertical well every few feet. At any rate, all this "new technology" have already done its thing, getting us to where they are. We have already witnessed their contribution.

As for affecting change. You are dreaming. The world will change when events force change, not when people make logical arguments that change is needed. Reason is a pitifully impotent tool when it comes to changing people's behavior.

It is impossible to reason a man out of something he has not been reasoned into. When people have acquired their beliefs on an emotional level they cannot be persuaded out of them on a rational level, no matter how strong the proof or the logic behind it. People will hold onto their emotional beliefs and twist the facts to meet their version of reality.
- Sidney J. Harris

Ron Patterson

We are in this together.. if we, the people who are the most acutely aware of this problem, can't collaborate and show a united, and fact-based approach, then there is no hope for us to affect change anywhere in the "real".

I strongly suspect that nothing we do will have any material impact on public policy, which is why I have increasingly described the 2005/2010 debate as roughly akin to a couple of engineers debating how long it will take for the Titanic to sink.

IMO, it is much later than most of us think, and I think that most Americans have two choices: (1) Dramatically reduce your consumption now, while you can do it voluntarily, or (2) You will be forced to do it later, much like the forced conservation we have seen in Africa.

I do think that the New York Times article ("Oil Innovations Pump New Life Into Old Wells") is another example of the "Iron Triangle" striking back (see explanation at the end).

I suspect that the recent flood of attacks on the near term Peak Oil position and on Peak Oil in general have a lot to do with the release of the EIA data showing a continued decline for all of 2006, as predicted by the HL models, in world and Saudi crude oil production--while oil prices have consistently been about two-thirds higher than in the 20 months prior to 5/05.

Again, all I can advise people to do is to ELP, i.e., "Cut they spending and get thee to the non-discretionary side of the economy."

Iron Triangle:

I I think that we are seeing an "Iron Triangle" of sorts defending the status quo concept of ever expanding energy supplies: (1) most housing, auto, financing and related companies; (2) Most MSM companies that are selling advertising to Group #1 and (3) some major oil companies, major oil exporters and energy analysts that are working for the major oil companies and exporters.

The housing/auto/finance group wants to keep selling and financing large homes and SUV's.

The MSM wants to keep selling advertising to the housing/auto group.

In my opinion, some major oil companies are afraid of punitive taxation, and some exporters are afraid of military takeovers. This group of oil companies, exporters and their analysts provide the intellectual ammunition for the other two groups, i.e., promising trillions and trillions of barrels of conventional and nonconventional oil reserves.

I suspect the triangle is getting more sides. Any industry that has been benefiting from cheap transportation is now desperately trying to erase the writing on the wall. Or at the very least making sure that someone else is first in line to be screwed.

Your triangle makes even more sense if you re-phrase #2: MSM that sells consumers to #1. If the consumer even thinks that suburban MacMansion or GM Suburbans might be a poor investment, advertising revenues will shrink, and our celebrity 'news' people might have to find real jobs. The extent to which they stifle debate is telling. Just look at the post below of the article from today's NYT. Peak Oilers are confined to the lunatic fringe and it is obvious that petroleum supplies are limitless.

That NYT article was placed on the front page of today's Providence (RI) Journal and featured the sub-headline "With higher prices in effect, oil producers find that old fields may be the best fields". Yeah, just gotta love those old fields, I'm sure we can count on them to meet the world's future demand growth...unbelievable.

The PROJO is owned by Belo Inc., based in Dallas, TX. Iron Triangle in action IMHO; after reading this tripe I finally convinced my wife to drop our subscription to this rag. Does anyone know if the Dallas Morning News has the NYT article up on the front page?

The thing I found most preposterous in the article was this gem: "CERA....estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate - which CERA says will probably grow...."

4.8 trillion and growing, that's all you need to know folks. Nothing to see here, business as usual - party on!

Loomis: I am sure you are aware of this, but it is not just the subject of oil depletion. Literally ANY subject that one takes an interest in and starts to research leads to the realization that the MSM is not stating the truth (whether intentional or accidental). Peak oil is not being treated differently by the MSM (including the NYT) than any other subject.People forget that the Times was a major cheerleader for the spooky WMD that would turn America into a smoldering cauldron.

A further note on, I think, the same track
Those who were wrong about WMD, wrong about invading Iraq, really wrong about everything, suffer no consequences, keep their sinecures, get ink and airtime. Those who are and have been right about WMD, this foolish war, NAFTA, whatever, those who are right are still consigned to outer darkness.
Being right about peak oil is not going to help anyone. Being wrong about peak oil or oil prices will never hurt CERA.

One small exception to the above; Barack Obama was at least partially right about Iraq and was very wise to be right very very quietly.

Of course the media distort the truth -- the US media serve only the profit motive (this is how we've set it up), the truth is beside the point isn't it?

Amen. Pollution, over fishing, over logging, etc. Anything that threatens large businesses will be attacked by them tooth and nail.

This was an interesting article. Without citing proof they kept raising the possible reserves. Starting with an already high estimate of 250 billion barrels in Saudi Arabia Mr. Saleri confides that the real amount is nearly three times that much and he "wouldn't be surprised" if the actual number turned out to be 1 trillion barrels. You'd think that after all these years they'd have a better handle on this.

The NY Times is so important that a good letter to the editor is called for, IMO, rebutting the main arguments. I'm not qualified to write it. I hope someone will.

It really is the most mendacious piece in the MSM I've seen in quite awhile, and it just reinforces the belief, expressed by Noisette, Leanan, et al., up post that we will not do anything until its too late.

IMO peak oil is similar to the Christian idea of the second coming of Christ, only with a lot more evidence. Christianity has divided itself over and over again and yet has as much or more influence than ever. It has predicted the second coming for over 2000 years and been wrong for 2000 years with little, if any, reduction in its credibility. Less than 5 percent of Americans in one poll I saw think than an atheist, which I am, should be President of the United States. Most Americans call themselves Christians. Being wrong or even consistently wrong has no effect on your credibility in the average person's thinking. People believe what they want to believe largely irregardless of the facts.

I have to rebut this: peak oil is nothing like, and has nothing to do with, christian (or jewish) apocalypticism.

1. "apocalypse" means revelation or vision. The Hebrew writers based their writings on dreams and visions, either creative or mushroom- or epilepsy-induced. These visions were spawned not by studying data, but by the desperate state of Israel under the Roman occupation and after the destruction of the temple. Peak oilists are scientists doing what scientists have always tried to do: make forecasts based on data.

2. Some of these Hebraic-Christian visions concerned a new Kingdom of God on the earth, while others imagined an "end times" scenario when the earth would be utterly destroyed. Peak oil does not imagine either a new kingdom or "the end of the world." The world will persist, even, sadly, amidst the worst-case scenario--die-off. People unfortunately use the phrase "the end of the world as we know it," and denialists leap on the first five words of that phrase and ignore the last four. I think we should just stop using it altogether.

3. The coming of a Messiah is part & parcel of the ancient apocalyptic visions. Peak oil expresses the exact opposite idea: there are no "saviors," no messiahs.

In fact, the true apocalyptic visionaries are the cornucopians, who imagine with messianic fervor the Coming of the New Oil from Old Wells: See today's above-the-fold headline in the NYT.

There is no Second Coming for oil. Peak oil is not an apocalyptic idea.

Peak oil is very much an apocalyptic concept. The ancient prophets looked at the condition of society as they saw it and synthesized predictions and warnings of dire consequences if people didn't change their ways. Due to the political situation they found themselves in they used symbolism and code words which protected them from the Romans while communicating with those who understood the hidden meanings. Hubbert looked at his world and synthesized predictions from them along with suggestions on how America could change its ways in order to insure a continuance of the American Dream. Many posters to this site including myself also make predictions of dire consequences if we don't change our ways and offer suggestions on the straight and narrow path to follow.

You've misunderstood everything I've said: the concept of the coming messiah IS THE CENTRAL concept of apocalypticism.

Peak oil offers no messiah. The equation of peak oil with apocalypticism is a perfect example of what Richard Dawkins calls "bad poetic science."

Apocalypse is just another word for revelation or prophecy. Instead of a divine individual many of us look to the heavens and all the solar energy continually bathing Earth as our savior. We see the brimstone laden coal and oil as underworld demons which we need to be saved from. There may actually be among us those who long for a single inventor who will provide the perfect answer to our energy woes (the zero-point energy believers for instance). The solution to the peak oil challenge lies within our souls. As individuals it means seeing the hollowness of what Madison Avenue places before us as solutions to our pursuit of happiness. It means including all the externalities into the calculus of business. It means calling on our governments to change a few rules of the game to prevent using the cheapest energy products in favor of the most sustainable and equitable alternatives. It means focusing on economic development which improve the quality of life for all over pure economic growth which brings more stuff to the rich.

Human beings suffer bounded rationality. They have a limited ability to understand their world, and a pretty spotty record in preparing for their future.

But at the same time we have no shortage of fears, monsters in the closet. Each of these do attract a following: economic collapse, superquakes, pandemics, peak oil ...

I think the thing to live with is that while each of these is a real risk, we experience very emotional responses to them. We feel the fear more than we know the mathematical risk. This November '06 Time Magazine article hit all the high points on that.

So if you focus on one thing, one fear, or one outcome in all that ... you might be a "crackpot or chicken-little."

If you take the more reasonable course that life has risk, but that there are moderate steps we can make to safe and happy life ... you might be sane.

A little voice in my head occasionally says, in regards to peak oil (and economic collapse and global warming, "These things are just monsters in the closet. They're not real. It's your caveman instincts overpowering your logic".

One of the reasons I read TOD and other sources is that I want to convince myselft that these things truly are just monsters in the closet. So far logic hasn't allowed me to dismiss my concerns.

But instinct has a purpose. Cavemen and Cavewomen had to be careful when approaching dark, unfamiliar caves to avoid being attacked by a predator. This carries over to the monster in the closet concerns each of us had as kids.

In the same light, being concerned about Peak Oil, financial collapse, global warming and so on is not a useless exercise. I've done things to "hedge my bets" in the event of financial collapse and resource scarcity. But I think the biggest benefit of being "aware" is the fact that I won't be surprised by volitility in the future.

Tom A-B

For what it's worth, I no longer read Peak Oil news daily. I've satisfied myself that I understand the issues, made my moderate preparations, and all that remains is for the shoes (little ones or big ones) to drop.

The ten trillion dollar question (when is PO?) will resolve itself in its own time.

For what it's worth, I too have stopped reading TOD and EB on a daily basis. It's just too depressing.

I try to go on with "normal" life.

However, everything is colored by this huge "paradigm shift", by my awareness of the PO Possibility.

What I mean by "paradigm shift" is similar to the one undergone by the more educated in society when they began to understand that the Sun does not revolve around the Earth or that Evolution is the way "we" came to be what we are rather than according to the fairy tale story in the Bible. These kinds of understandings change everything and yet they change nothing.

Occupants of the Middle Ages (including Galileo) had to bow down daily to the brain washing tactics of the church. They had no choice. It was that or getting burnt at the stake. Only in their hearts could they mutter "Nonetheless it moves" --quoting Galileo.

So when the happy-times CERA crowd or the happy New-York Times cornucopians step out on to the church steps to proclaim that the oil-bulging Earth remains the center of the Universe and the Singularity is soon upon us; all I can do is mutter in my heart, "Nonetheless it (Hubbert's curve) moves".

The whole question of the near term, medium term and long term peak really revolves around Saudi Arabia, and in effect, the Ghawar Field.

I strongly advise everyone to read the series of posts that Down Under and others made on Saudi Arabia yesterday on the 3/4/07 Drumbeat, up near the top.

The continuing irony of all the attacks on the HL method is that world and Saudi crude production are both declining, as predicted by the HL models.

And the hard, cold fact is that world oil prices have been bid up to a level about two-thirds higher than in the 20 months prior to 5/05, and the inflection point on this price increase was May, 2005.

Has the US--so far--been well supplied with petroleum products? Yes.

That has not been true for regions like Africa, which have faced forced conservation, because they could not afford to buy petroleum, in effect, because richer nations outbid them. But forced conservation is moving up the food chain.

How do we address the people that would call us crackpots or chicken-littles?

Mmmmmm. . . I think anybody who truly recognizes the ramifications this will have on each of us as individuals simply does not care about being viewed as a "crackpot."

How do we address the people that would call us crackpots or chicken-littles?

Mmmmmm. . . I think anybody who truly recognizes the ramifications this will have on each of us as individuals simply does not care about being viewed as a "crackpot."

News From Saudi

As I have stated before I have a (friend) in Saudi Arabia. That is all I will say about the relationship because I wish to keep his identity anonymous. At any rate I emailed him and asked him if he had heard any rumors about Saudi oil production. Getting such information out of him in the past has been difficult because he is in denial about peak oil himself and does not wish to talk about it. And he is in electronics and does not work with production engineers.

He has two small children, ages 8 and 5 and wishes to believe that their future is bright, so I really cannot blame him, or for that matter press him too hard. I have tried to clue him in about peak oil in the past but found it was like talking to a wall. He simply refused to hear a word I was saying. He lives in Ras Tanura, or RT as he calls it. Anyway, here is part of his reply.

As for oil production, I haven't heard a thing. What I do know is they are in design stages of a huge petro-chemical plant to be built just north of Ras Tanura. I understand that it will be HUGE with capital letters. Reportedly to take up all the space between RT camp and the Juaymah gas plant. People are of mixed emotions about this. They don't like the idea of being sandwiched between a refinery and a petrochemical plant. But we do look forward to the massive influx of people this signals. The population has already started to increase even if only slightly and so far, mostly South Americans. What I hear is that the salary offers are no longer competitive enough to lure the Americans here, so they are having to do a lot more recruiting in the other oil countries. We'll see. Like I said, it's only in the design stages now and still a few years away. This should be about right for me because I'm looking at a 4 to 7 year window for retirement. Four years until I turn 50 and seven before Ray has to start boarding school.

Saudi schools for expats only go through the ninth grade, which is why he added the part about boarding school. He sent two other children, by a former wife, to boarding school and swears he will never do that again. But I thought the part about the petrochemical plant very interesting. My take on it is, the Saudis are divesting their resources and paying lower salaries for imported workers.

Now I haven’t a clue as to what a petrochemical plant produces. Perhaps Robert or someone else in the business can give us a clue here. But even if Saudi is in decline they will have some oil production for decades to come. Perhaps they are trying to increase the profit margins on the oil they produce. Plus they really have nothing else to sell to the world other than oil products so a petrochemical plant that manufactures (whatever) would seem to be the perfect choice if they wish to diversify.

Ron Patterson

I think Simmons said the KSA's existing petrochemical industry uses gas and came into being when the Saudis had limited natural gas markets. If the new factory uses more crude, that would be a new wrinkle.

Or maybe they plan on producing chemicals for use closer to home???

Saudi Arabia still has a population of only 23 million. Increasing consumption is more likely to affect the exports of Russia and Iran, but less likely to affect the KSA.

According to the EIA, in 2004 KSA consumed 1.64 mbpd (Total Liquids), and in 2005, 2.0 mbpd, an increase of 360,000 bpd, a rate of increase of 22%. At this rate, their consumption would double every 3.3 years.

Of course, this only one year, but on the other hand, the average Saudi family has six to seven children, so I would think that they will continue to see large year over year increases in consumption, at least in the short term.

By the way, if we assume about a 20% increase in consumption for 2006, on a crude + condensate basis, I estimate that Saudi net oil exports fell from 7.8 mbpd in 12/05 to 6.8 mbpd in 12/06, a month to month decline rate of 14%, which would translate to a 50% drop in net oil exports in five years.

In any case, KSA's consumption--in 2005--was equal to the 2005 Total Liquids production of the 14th largest producer in the world, Brazil.

How much of this consumption was actual end-product use, and how much was actually a value-added manufacturing of crude/condensate into end products which were subsequently exported?

SF, Saudi Arabia does not have a petrochemical industry other than its refineries. Refined products, that are actually exported, are counted as exports. Therefore production minus exports equals oil products that were all consumed within the country.

Saudi does have a huge petrochemical plant on the drawing boards but it has not preceeded beyond that stage.

Ron Patterson

Check p. 246 of Twilight in the Desert.:
"In 1975, the Saudi government established its Master Gas System (MGS) to begin using this clean, low-cost byproduct of its oil production as feedstock to create a gigantic petrochemical and chemical complex. .. Within a few years, SABIC became a world-class petrochemical and chemical business, with major plant facilities on the Persian Gulf and the Red Sea."

The oil consumption figures given by WestTexas are about 25% higher per capita than the United States, which is supposed to be the oil hog of the world. This makes me suspect that a lot of the "consumption" is actually manufacturing. I guess another possibility is that there has been a huge increase in the oil needed to extract the oil.

Sorry, I was misteken about Saudi's petrochemical industry. It appears that they do had a Natural Gas petrochemical industry. And I am sure some of it probably uses crude oil as a feedstock also. My mistake, sorry.

According to the CIA factbook the population of Saudi Arabia is 27,000,000. This includs 5,576,076 non-nationals. But they consume oil also you know. This means that the average person living in Saudi consumes just a tad more oil per capita than the average American. This is not surprising. I know that when I lived in Saudi Arabia I consumed a lot more energy than I do now. Air conditioners run around the clock for about eight months a year. I drove a lot more and so did everyone else.

Saudis consume a lot of oil. Think about it. Virtually all of their potable water comes from desal plants. Every compound there has its own desal plant and these use mostly diesel fuel. The huge desal plants use natural gas but they can use crude oil in their boilers also. All the small ones use diesel powered pumps and the reverse osmois process.

But the EIA includes in "Total Imports" into the USA, all petroleum products including petrochemical products. And I suppose the they do the same for exports from Saudi Arabia.


Of course, regardless how the energy is used, an exporter can only export what is left after domestic consumption, and Saudi exports are being squeezed hard from two directions. Last summer the Saudis had to import some petroleum products.

Wow WT. The stats that you are able to pull up quickly or outright remember is astounding. I can always count on you for a dose of reality.

Which, BTW, based on loitering on TOD since nearly the beginning and always reading your comments and diaries, I have ELP'ed. Cut my house to 1/2---down to 1100sf. Moved to a place where I don't need heating or cooling and which has a great growing climate. Have planted more than 50 fruit trees in the past year, some are already bearing fruit. The vege garden is overflowing and the surplus goes to neighbors and friends.

We installed solar hot water, and a PV system is next. Electricity usage is down to 400KWH per month and going down, and we use no NG or fuel oils except for a small propane tank for the tiny barbecue. Vehicle fuel is down to about 20 gallons per month.

House/property paid off (closed out all investment accounts except IRA's to do so), and only owe a total of $15K which I just borrowed for the solar PV. I should have it paid off in 6 months. So please know that there are people that are listening and taking action. Even if PO is a long ways off, everything I (we've) done is GOOD -- regardless!!! So thanks for being a voice advocating change. I love my new life. We work very hard every day, hard physical labor, but it's been a labor of love.

Fortunately for me (and my husband gets to share the fruits of my labor and pennypinching ways), I worked hard and saved a lot over the years by refusing to buy into the consumer crap. My stereo is 30 years old, most of my furniture is older than that (and it's real wood), my cars are 21 and 35 years old (I bought them both new, do all the repairs myself, and they still pass smog -- even at 250,000 miles). They both get about 24-28mpg since they are small Nissan/Datsuns. Everyone thought I was crazy because I had a great job and drove very old, out of date, low tech cars. I have NO regrets. NONE--58, retired, steady income stream, essentially no debts and no mortgage. And it was all done by working, saving, and ignoring the consumer overload. And my cars start, run well, and get me where I need to go just like all of the big new trucks and SUV's. And when necessary, I can cram a lot of stuff in my little cars.


Needless to say, I guess you have no regrets about downsizing.

NO Regrets. I was getting tired of taking care of that much house (starting from 1980 I had a 900sf house for 8 years, then 2,000sf for 12 years, then 1750sf for 7 years, then 3,000sf for 6 MONTHS).

The last house, a temporary "high-end McMansion" rental prior to our move, made me feel like I was lost in a stadium. I hated it. You couldn't even get to the phone from certain parts of the house before the caller hung up. When I got the first heating bill for $250, that covered a period of 2 weeks, I knew we wouldn't renew the lease no matter what. That $250 for 2 weeks included having the heat shut OFF to 1/2 of the house and the thermostat at 65 days and 50 nights. OUCH. It was just a transition house after we sold our house. I needed some intermediate place to force my husband to get rid of stuff. He tends to be a packrat.

The hardest part was deciding what to keep and what to get rid off. I got rid of the literal equivalent of my first house of 900sf. I'm still downsizing, and every day I sort through some more stuff to give away. Since we got here I given away appliances, clothes, computers, etc. The more I get rid of, the FREER I feel. It's actually a wonderful feeling --- you don't realize what a burden your belongings become. My husband almost lost it when a couple drove up and loaded up the second frige (this place already had one) and drove off with it for $0. I was gleeful -- one more relic gone!!!!

We are still a little cramped because we both have so many hobbies, but we are getting there. Makes me realize that the first house I bought, at 900sf, was just fine.

Nice...please do keep posting your experiences. Gives me inspiration.

good for you

Of course, this only one year, but on the other hand, the average Saudi family has six to seven children, so I would think that they will continue to see large year over year increases in consumption, at least in the short term.

According to the CIA world factbook, KSA TFR in 2001 was 6.25, for 2006 it was 4. Quite a drop, something like 60% in 2 years. Could be they expect hard times ahead.


Regarding your friend's psychology:

I was thinking the other day what if I had gotten married at 25 to a woman who was 22 and we know had a kid, maybe another on the way.

Let's also say I was locked into a typical law firm job and my wife was not willing to consider drastic changes in our lifestyle or location.

Would I, in this situation, even be able to digest this info? My guess is no. Because it would lead to one of two options:

1. We stay put and our swept away by the coming shitstorm. I try to muddle through and convince myself my little urban garden and 5 person PO meetup group is going to be enough to subsist through the chaos. I end up having some type of breakdown since it's pretty obvious how grim things look if we stay put.

2. We get a divorce (extremely costly) and engaged in a custody battle. Wifey wanting to stay in suburbia, me wanting to leave with the kids.

Given these options I suspect my brain would find a way to deny this stuff out of existence. I think many of us are able to consider these issues partly because we have the luxury of being able to.

Hi Chimp,

Having done it, I must admit the difficulty for younger people with children. My heart goes out to them as the choices are so much more difficult. About the only way these folks can really escape is to consider the long term future of their children rather than just the next few years. That's what it's really all about. That said, even small steps are a start in the right direction.

I consider myself very fortunate that I was able to pack up and move someplace with a mild climate and a wonderful food growing environment. I have no children, and except for 2 younger brothers and a few distant cousins, no one lived within a 1,000 miles of me anyway, so a long jump across the pond didn't matter family-wise. And now that I'm really into it, I wish I'd ditched the corporate life long ago as I find this much more rewarding.

Every day I commune with my anole, King Tut, and my gecko, Wiggles, and consider how blessed I am to be here.


Makes me wonder about Tipper Gore. In my experience, women are more likely to be into luxury consumption. (Apologies to the women on the board.)

Thoughtful observations.

I wonder how different spouses must be if one is able to see, the other blind. Where were they looking to go together in marriage? Surely folks still discuss dreams and aspirations before they wed.

Just thought I'd post a comment on the SST of the Atlantic. It seems that this years February 28th Weekly SST is as hot as last years March 29th map.

This is the link to the current SST :-

Essex: If you haven't heard it, there is an interesting interview with Evelyn Garris on Financial Sense on the weekend. She comments on these temps and has a few predictions (including a ferocious hurricane season in the Gulf). Supposedly she nailed her 2006 predictions (including a lacklustre hurricane season)http://www.financialsense.com/

Indeed that does look pretty warm, but it doesn't matter much until hurricane season begins. Last year the SST were extremely warm relative to climatology in April and May, then dropped off to normal levels in the summer, contributing to a light hurricane season.

Hello NASAguy,

As I was reading your post I thought about the impact of melting glaciers on the generation of hurricanes. Does the increase in the amount of cooler water entering the system dampen the hurricane generating capacity? In other words does crushed ice cool things faster than big cube?

Please see Stuart Staniford's Atlantic Circulation Changes for a good introduction to exactly what ice melt is doing to ocean circulation.

After you are done reading that, read Stuart's Hurricanes: Trend or Oscillation? That's a December 2005 piece. Note that Stuart was a couple years ahead of the public debate which only now is really turning towards the notion of global warming increasing the power (and potential damage) of hurricanes.

In fact, I highly recommend that any new reader of TOD go back and read the historical stuff. Every contributor and editor is excellent but I admit to a personal bias towards Stuart's articles plus Heading Out's tutorials (which sadly have generally ceased to continue).

Thanks for the kind words. Actually I am trying to learn some better 3-D modelling programs so that I can do my own illustrations before writing more.

Hi HO,

Just to second...well, you could always add the illustrations later, (maybe, huh?). Looking forward, in any case...

Hello Greg,

To answer your last question, crushed ice cools water more quickly than a big ice cube of the same mass, because more ice surface area is exposed to water. However, how this relates to the seawater/glacier ecosystem with all the other variables thrown in is more complicated. I really don't know how it would affect sea surface temperature in the tropics.

Re: Brazil Accused of Getting Biofuel with Slave Labor...

I think this is something often overlooked. Growing sugarcane in a tropical climate vs. corn in a temperate one isn't the only advantage Brazil has. Brazil also has a relatively small upper class that drives and can afford high prices for fuel, and a lot of poor people to do the grunt labor - and who will never be able to afford a car.

From AP late yesterday:

Bush Seeks Ethanol Alliance With Brazil

Across Latin America's largest nation, Brazilian media are billing the Bush-Silva meeting as a bid to create a new two-nation "OPEC of Ethanol," despite efforts by Brazilian and American officials to downplay the label amid concerns that whatever emerges would be viewed as a price-fixing cartel.

The 'alliance' doesn't really amount to much at this point, as the text of the article lays out. But certainly it's not a complete stretch to think that Brazil's ethanol could be as nettlesome as oil is elsewhere in the world.

This is just the beginning.

The US and Brazil are looking to establish 'book ends' to a prospective biofuel trade pact that will envelop all of the Americas i.e. Chile, Dominican Republic, Peru, Belize et al.

The Inter-American Development Bank and OAS are strong supporters, as are the people behind FTAA (Free Trade Area of the Americas) and the InterAmerican Ethanol Commission of which Jeb Bush is a key figure.

The prospect of a US/Brazil biofuel pact has been nutured by the Brazilians as an important first-step for rapproachment - one that the White House is finally taking up.

Watch for the 54-cent trade tariff on imported ethanol to the first item on the chopping block.

Yeah, Brazil has some 190 Million inhabitants if memory serves, and less cars than Germany (30 mio, I think, compared to some 50 mio in Germany for ~80 mio inhabitants).

Excellent points.

There is also the slash-and-burn, grow 3-6 crops and then abandon (as the land is played out) agricultural methodology employed on Brazilian sugarcane plantations, something only possible when you have billions of hectares of (former) rain forest to take advantage of.

Sugar cane has been cultivated in Brazil since 1532 and is arguably the most environmental of all monocrops in the Americas.

Today, approximately 1% or 4-5 million hectares of the country's arable land base is devoted to sugar cane production in the South/Central and North East.

This is certainly not billions of hectares nor is it even the rainforest areas of Brazil as you assert. If you want a protagonist on that issue, I suggest you knock on the doors of the factory meat sector.

1,000,000 people are employed in the Brazilian sugar/alcohol industry and of these, approximately 20% are directly employed as cane cutters, however, the burning of cane crops -after which cutting takes place- is slated to be phased out by the government over the next 12 years.

Since 30% of Brazilian sugar plantations are harvested mechanically, said burning ban will result in increased mechanization due to green cane cutting efficiency.

This means thousands of jobs for Brazil's poorest and least educated citizens will be lost.

I do not doubt that cane cutting is arduous, nor am I defending the exploitation that has occured or is occuring, however, such events transpire in EVERY country where migrant farm labor is used and the US sugar industry is no exception (see: 'In the Kingdom of Big Sugar', Vanity Fair 2001).

It's easy to villanize a particular sector of a nation's agroeconomy without the proper economic, historic or factual context.

I find it counter-intuitive and abhorrent to ask the slave-class to sell their lives for our convenience.

Those 1,000,000 people must eat, sleep, commute, exercise, party, study, bear children, travel, die, bury and be buried.

This all takes energy that is never calculated in the EROEI studies the Brazilian government publishes. There are no independent peer-reviewed journal articles that have convinced me otherwise and so it appears Brazilian sugar cane is just as environmentally and thermodynamically ridiculous as US corn-ethanol programs.


"Those 1,000,000 people must eat, sleep, commute, exercise, party, study, bear children, travel, die, bury and be buried"

So does every PHD student, Soldier, and short order cook. Normally when calculating EROIE, we don't factor in the energy to make the blue jeans the employees wear. These other things we did in the stone age and will do after the oil age.

Ethanol works here. But BR is not the world.

"Ethanol works here. But BR is not the world."

And that is the key point to take away from this issue.
What works for one locale is not necessarily (or even usually) transferable.

Expanding Brazilian sugarcane production in the 1990's displaced crop food production and grazing on the same land. That food production moved elsewhere, including into former rain forest. So yes, while technically not growing sugarcane in the rain forest, increasing demand for sugarcane IS putting pressure on these areas. This has been documented by the USDA (which I formerly worked for).
Here is an MSM story on the matter:
Ready, arable, cultivatable land is finite.

You might want to take a look at this before judging Brazil's sugarcane industry truly "sustainable":
'Brazil's Ethanol Slaves
200,000 Migrant Sugar Cutters Who Prop Up Renewable Energy Boom'


I am in Campinas right now and the majority of households...actual families have cars. A large portion of single students have motorcycles or bicycles and a few have a car. A car costs 15,000 Reals which is about 7k $US. That is new. A used car is much cheaper. Small economy sized with no airbags no AC just a chariot. I have a 10speed I paid 22$ for. The bulk of drivers are middle class. This upperclass gentry is a myth I see all the time on TOD. matt

I came across a couple of factoids today, researching just how representative Campinas is of Brazil as a whole. What I found surprised me, as I've not been to Brazil since the early 1990's:
* Brazil has 81 vehicles per 100 people. This number has soared nearly tenfold in the last decade, from around 8 per 100 in 1998, but is still an order of magnitude less than the US.
In the U.S. that figure is 765 vehicles per 100 people, nearly ten times as many.

* Oil consumption in Brazil is 4.2 barrels per person per year. In the U.S., oil consumption is 27 barrels per person per year, 6.4 times as much per person as Brazil's.

Even in car-crazy USA, over seven cars per person doesn't sound right. My stepson has two hulks and one that works, but I don't know anyone with more than three cars - other than rich collectors like Jay Leno (and GM dealers, of course) - and I know lots of people with no cars.

Looking at that Nationmaster link, the chart does say "per 100p," but the definition at the top and bottom says "motor vehicles per 1,000 people."

That would put Brazil at 81 per 1000 persons, just about where they were in 1998, per the Tiscali link, and the US at 765 per 1000 persons.

Ah, very true. But that does not change the ratio (over 9:1) in the least, and makes Oilrig medic's personal assessment of nearly every family having one either a local aberration or erroneous.

Nuke crisis resolved as Ahmadinejad is dealt to Knicks

The nuclear crisis with Iran was averted Saturday when Iranian President Mahmoud Ahmadinejad and the entire Iranian nuclear program was traded to the New York Knicks for point guard Stephon Marbury. Iran will also get the Knicks' first two draft picks.

At least the jews have a sense of humor. Too bad geopolitics is not this simple.

Maybe we could trade Bush to congress for Roscoe Bartlett. It seems like the chamber is always empty when Roscoe talks of peak oil so they would not likely miss him and we might not get the trade without losing future draft picks!

(edit - screwed up the link:


The picture is worth the click)

Thanks for the laugh. That picture is hilarious, and the article is very funny as well.
Tom A-B

Re: Finance Junk


For those who want some numbers on the early decline in the housing market. It's only beginning. It will take another year to really unwind.


A question I've pondered while reading about mortgage lenders imploding (http://ml-implode.com/):

When the mortgage company that manages my debt implodes, what happens to my mortgage? Who do I pay my money to?

Also, with all these foreclosure stories in the news, I never hear about the experience of the person going through foreclosure. What is the experience of a person who forecloses on their mortgage? Are they sent off to a labor camp to work off their debt in indentured servitude? How do the revised bankruptcy laws affect the situation?

Tom A-B

Of course I'm not a lawyer, and this isn't legal advice.

From my memory when I was reading up on mortgages, it will vary depending on the state and country, and the terms of your mortgage. For the most part, if you are in good standing, I don't believe that anything happens to it. However, if you are not in good standing the purchaser of your mortgage might be able to accelerate the payback of it. Essentially that means that you'll owe the entire amount standing on the mortgage with a couple of months notice, but you of course won't suffer any early payoff penalties. Which means that you're out mortgage shopping, or else frantically trying to sell the house if you don't happen to have the cash on hand.

Possibly depending on locality, the purchaser of your mortgage might be able to do this even if you're in good standing.

What won't happen is your debt will be forgotten.

I welcome corrections.

Thanks for the explanation on question #1.

What won't happen is your debt will be forgotten.

Now what about question #2, which was in regards to foreclosure. In the plausible scenario of millions of people losing employment and not being able to pay their mortgages (coincident with no buyers to buy the house you can no longer pay for), what happens to all those people and their debt? Labor camp? Bankruptcy doesn't seem to be an option any longer.

Tom A-B

The debt may actually be forgiven since your house is typically the only security you offer against the loan. If it is, then another pleasant thing that typically happens is that you get an 1099 form from your mortgage company for the outstanding part of your mortgage, and you have to pay tax on that. So - if you are foreclosed, and $100K of the mortgage is forgiven after the house is sold, you end up owing (say) 30K in taxes. This is because the 100K is considered income to you. Welcome to the IRS.

The question then is - what happens if I dont pay my taxes?

I have an uncle who has been in the foreclosure (actually started out doing car reposessions) business for decades. As I understand it, his company buys loans from banks when those loans descend to a certain level of payment problems. "Nameplate" banks (the names you see advertising on TV that have bank branches on the corners and ATMs at the malls) do not like to actually foreclose on anyone -- it's bad publicity. So they apparently sell loans that are heading towards forclosure to the these credit companies (like my uncle's) who actually try to get payments going again. I'm sure the techniques that they use are "below" what the nameplate banks are comfortable with. The normal banks probably also have "subsidiaries" that do some similar work (without their valuable name attached).

Anyhow, if these credit companies were to get massively backlogged and overwhelmed on a national scale then I think the Fed would step in and actually buy these loans, just like they buy Treasury debt.

Actually, during the Savings and Loan scandal, the Banks were siezed and the assets sold to people like your uncle.

One way or the other the government/Fed ends up "eating" systemic costs like that. For what it's worth, this is why I feel that outright libertarianism is unwarranted -- government is "short a PUT on the system" for which no one pays them, so to speak.

My uncle's company has had problems finding business over the past several years (when we had very low interest rates and few financing issues), but things are picking up I'm sure. They were apparently only handing "upside down" auto loans for a while and nibbling at mortgage packages. His kind of company actually has to be good at getting used cars sold. I divested from the company a few years ago, so I haven't been keeping track so closely.

Re the New York Times article, it comes with a graphic and a video:

Video: Scratching the Surface - Pumping New Life Into Old Wells

The article (also briefly discussed in yesterday's Drumbeat, downthread), has a few peak oil quotes:

There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading.
Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak — if it has not already — and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline. “I am very, very seriously worried about the future we are facing,” said Kjell Aleklett, the president of the Association for the Study of Peak Oil and Gas. “It is clear that oil is in limited supplies.”

Many oil executives say that these so-called peak-oil theorists fail to take into account the way that sophisticated technology, combined with higher prices that make searches for new oil more affordable, are opening up opportunities to develop supplies. As the industry improves its ability to draw new life from old wells and expands its forays into ever-deeper corners of the globe, it is providing a strong rebuttal in the long-running debate over when the world might run out of oil.
In 1978, when he started his career here, operators believed the [Kern River] field would be abandoned within 15 years. “That’s why peak oil is a moving target,” Mr. Hatlen said. “Oil is always a function of price and technology.”

This piece certainly has the feel of a story attempting to debunk peak oil, but on the theory that there is no such thing as bad press, it is free MSM publicity for peak oil and mentions the word "peak" five times and the phrase "peak oil" or "peak-oil" three times.

It is also interesting that the article claims that the peak oil theory is fading, but fails to mention that T. Boone Pickens and Matthew Simmons have both called the peak - rightly or wrongly - in the last month.

The article mentioned some examples of nonconventional production and secondary/tertiary recovery techniques in the Lower 48. But they somehow failed to mention that Lower 48 production has fallen more than 50% since peaking in 1970, despite all of our technological advances.

It also somehow escaped their attention that the North Sea has shown a steady decline since peaking in 1999.

And somehow, the NYT failed to realize that both of these regions peaked, 29 years apart, in close proximity to the 50% of Qt mark, based on their HL plots.

And it somehow escaped the attention of the NYT that either 13 out of 14 or 14 out of 14 of all super giant oil fields that are, or were, producing one mbpd or more are now in decline.

The function of oil companies in post peak regions, like the world, IMO, is to slow the rate of decline of crude oil production.

Can we find more oil? Yes.

Can we increase the recovery factors? Yes.

Can we increase our nonconventional oil production? Yes.

Will it make a material difference? IMO, NO.

See my "Iron Triangle" comments up the thread.

BTW, if you have comments on this story, I think that you can contact the public editor at the NYT. IMO, the biggest omission in this article is the failure to mention the long term decline in Lower 48 production.

It gets even worse than just omission. That whole article seems to be shooting itself in the foot.

One poster below noted that one of the fields they trot out, Kern River, appears now to be in steep decline despite their magical technology.

The other graph there is one of oil prices, showing that as the price goes up, more oil becomes economically available. But wait - isn't that part of the point? I'm sure lots of oil would be economically available at $1,000/barrel but that surely doesn't help anyone.

But then what are these economically available oil resources that show up at higher prices? Hard to reach, and low EROEI sources including oil sands, and shale. Also, somehow...ethanol makes the list, which last I checked was not oil.

...and expands its forays into ever-deeper corners of the globe, it is providing a strong rebuttal in the long-running debate over when the world might run out of oil.

So, having to go to the ends of the Earth to find oil should somehow comfort us that oil's not getting harder to find and extract.

Except for the extreme bias in the writing, the article does a dandy job of explaining why peak oil is pretty close if not here.

Calorie, thanks for the great post. I viewed the video and thought that was pretty good also. However the bit about new technologies increasing the percentage of recoverable oil a bit misleading. The “new technology” they featured was steam injection. Eyeballing the chart you posted, this “new technology” on the Kern River field began in 1964. That’s 43 years “new”!

And it just emphasizes the point we have all been making here on this list. All new technologies have been in place for decades and have produced just about all the “new” oil they are going to produce. Production from Kern River is now in steep decline. Nay, looking at the chart I would call it collapse!

Ron Patterson


I lived in Cortez, Colorado, in 1980 and the place was in boom-town-mode as a giant pipeline to Texas was being laid from the carbon-dioxide fields west of town.

The CO2 was to be extracted and pumped to Texas to reinvigorate declining oil fields of the time. That was, uh, 27 years ago.

So I wonder if this technology ever really worked very well. The oil companies certainly spent a fortune building the pipeline.

It didn't. Gas (C02) is compressible, water/seawater largely is not (the working principle behind hydraulics, in fact), which meant getting pressure up in the well with water was much easier (and cheaper, for the most part), and why it is in use even in extremely arid climates like Saudia Arabia.

Perhaps not the right place to comment but I sense things are much worse that we think.

My belief is that the vast majority of technologies introcuded during the last 30 years have significantly impacted the rate of extraction/production, but had very little impact on the total ultimate recoverables.

Most casual observers see the Hubbert Peak, etc and define peak as the max point of production rate and equate it to the point where we also have consumed 1/2 of the ultimate recoverables.

In fact what I would suggest is that the technologies have allowed us to increase production even though we may be well beyond the 1/2 point. The technologies of Horizontal wells, better seismic, multi-laterals, short radius, fracturing, better computing capabilities, etc have allowed production increases despite the fact we may have ventured beyond the half way point. We have Distorted the Hubbert Peak so that it is significantly asymetrical.

My conclusion is that the downward slide on the back side may be much steeper than our upward rise, and there will be not new technological enhancements to dampen it.

Does anyone have any numbers taht we could analyze to compare where peak may have occured without the influnces of such technologies?

Excellent Analysis. I think you hit the nail on the head.

People forget that T. Boone Pickens was worth about $350 million dollars 7 years ago. People don't want to pay attention that Pickens is worth a couple billion dollars today. And people really really do not want to hear that Pickens claims he has made most of this money betting on peak oil. In fact, Pickens has gone from about $1.5 billion in early 2005 to a reported $2.4 billion net worth in early 2007.

During the last Pickens interview that I saw he seemed to say that his natural gas shorts are what gained last year, making up for losses in oil long positions. So people who know about PO can still sometimes short "certain" doom.

Pickens, in publicly available interviews last fall, specifically stated that he thought the price of natural gas would be heading lower into winter – although he stated that afterward it should resume climbing.

His short position didn't surprise me. His publicly announcing that position doesn't really surprise me either. It could be interpreted as "talking his trading book" -- i.e. trying to influence the market.

I just worry sometimes that people in TOD will think that a smart guy like Pickens is implying that oil/gas are a one way bet -- especially since there is such widespread knowledge of PO in the financial arena.

Of all the blunders in that article, I think the best is the graphic - which shows the Kern River field has peaked and is now in steep decline (off 30% from peak). Reading the article you would get the impression that production from the Kern field has been continuously increasing! Kneecapped by his own graphics.

It's depressing to see an article in the NYT Science section with so many scientific errors, and so much bias. Peak Oilers are "a small band of retired petroleum geologists" (obviously senile) and "a few members of Congress" (we all know what idiots they are!), but cornucopians are "Many oil executives."

I wrote a letter to the editor; others who can write better should do so as well.

The best place to hide the truth is right out in the open.

I'm reading a book about the dumbing of the public through education. There's a wonderful quote to the effect that the marginally literate can't examine such things as the implications of charts and graphs without the intervention of commentators.

When oil begins its PRECIPITOUS decline, it will be all the Iranians' fault.

The level of brainless comment by the major media is truly impressive. Chevron spent $21/bbl in development/production expense on its California properties in 2006, drilling 600 wells, and the decline rate was "only" 5% year over year.

Of course, a bit more digging in the Chevron annual report (far be it from a reporter to ever do this) would have shown that Chevron's R/P is a whopping 6.25 (so much for being a going concern...), and that's after the purchase of Unocal in 2005. Curiously, the NET of revisions/enhanced recovery for Chevron over the period 2004-2006 was -58 million barrels. Silly me, I thought that the doubling of oil prices from 2004 - 2006 would have meant that all kinds of reserves would have been reclassified as economical. I suspect that positive "enhanced recovery" balanced by negative "revisions" of reserves is simply a "whack a mole" game played by the majors....

Oil companies are already investing in oil sands, this article actually suggests that oil will not be cheaper than $50 a barrel.

A friend emailed me the NYT story and I banged off a fast reply:


Steam injection into a depleted oil field is considered a method of last resort and usually limited to the heavier grades of petroleum. It is extremely energy intensive. It has been used for years in the Athabascan oil sands projects and has issues with the large energy inputs. Natural gas is usually used to heat the water which is also required in huge volumes. The runoff is highly toxic and the production flows of petroleum (or synthetic crude in Alberta) are modest.

Gas and water injection have been used for several decades now. Nitrogen and carbon dioxide are both used. All three methods have been used world-wide. United States production went into decline in 1970 and in spite of these pressurization methods, has continued to decline. Even with these methods, recovery from a field rarely exceeds 35% of the original oil in place.

The prediction that "more oil can be found that ever before" is pure rubbish. Since 1980 and for every year thereafter the world has used more oil than it has found. The last giant field was found in the Gulf of Mexico (Cantarell) back in, I believe, 1974. This field is presently declining at about 40% a year... and that's in spite of massive nitrogen injection projects. Presently the only areas that may hold significant new sources of oil are either the North or South Pole and various deep water projects (so far none of which have resulted in much success). That the petro geologists have literally moved to the extremes of the earth are a sure indicator that the cupboard is bare.

And then there's Daniel Yergin of Cambridge Energy Research Associates... I think that I'll let Yergin speak for himself (May 2005):

Daniel Yergin, chairman of Cambridge Energy Research Associates, believes oil prices will fall sharply in the next two years, settling in at a $30 price floor.

In a May 27 interview with CNBC, Yergin said current high prices should lead to an increase in global oil production, which in turn will cool the market, Dow Jones Newswires reported, noting that Saudi Arabia alone has said it will boost its oil production by 1.5 million barrels a day by the end of the decade.

“I think two years from now, we’ll look more with $30 as a floor than what we’re looking at today,” he said in the interview.

And it is now two years later.

Would you believe that orginizations actually pay many thousands of dollars for CERA's state of the art energy forcasting? Strange but true.

And then there's CERA's guesstimate that we have about 3700 billion barrels (Gb) of oil left. CERA counts oil sands, tar sands, oil shale, Hugo's extra-gooey tar in the Venezuelan Orinoco region, and probably the sludge in your crankcase.

Yeah, the stuff is there but can you really generate the kind of production flows that keep us from killing each other to fill up our pickup trucks?

And another good read is the Energy Information Administration's energy outlook publications. A year or so ago I downloaded the 2000 outlook and noted that they predicted rising production from the UK, even though the British government themselves had fessed up that they were post peak. They have been overly optimistic... or should I just say "wrong" for the US, Norway, Mexico, Canada, Saudi Arabia, Kuwait, Iraq, Iran... do we have a pattern here?

BTW, the Government Accountability Office is supposed to release a report that counters the EIA and CERA crap... if the powers that be will allow it out.

As a lay person, I hope that I wasn't too far off the mark in my response to his message. If I am, just shoot me.



Wonderful letter. I could have not said it better myself.

Can I borrow it?


Why certainly. No need to ask but thanks anyway.


I saw.

I read.

I wept.

PO isn't the problem.

Ape brains is.

Quote of the day...without a doubt. Thank you.

Architecture2030 Challenge

* That all new buildings, developments and major renovations be designed to meet a fossil fuel, greenhouse gas (GHG) emitting, energy consumption performance standard of 50% of the regional (or country) average for that building type.

* That at a minimum, an equal amount of existing building area be renovated annually to meet a fossil-fuel, greenhouse gas (GHG)-emitting, energy-consumption performance standard of 50% of the regional (or country) average for that building type (50% of the regional average through innovative design strategies, the application of renewable technologies and/or the purchase - 20% maximum - of renewable energy).

* That the fossil fuel reduction standard for all new buildings be increased to:

60% in 2010
70% in 2015
80% in 2020
90% in 2025
Carbon-neutral by 2030 (using no fossil-fuel GHG-emitting energy to operate)

www.architecture2030.org. For a list of some of The 2030 Challenge current adopters, supporters and collaborators, go to http://www.2010imperative.org/onboard.html.

Re-engineering an Empire?

In November and December last year, The History Channel convened design teams from three U.S. cities— Chicago, Los Angeles, and New York—and asked them to imagine the architectural and engineering marvels that will define their cities a hundred years from now.


Water is the source of UrbanLab's winning scheme. Dubbed “Growing Water,” it proposes a series of ecoboulevards to be developed throughout the city. These wide green swaths will treat all waste and stormwater naturally in Chicago and return it to the Great Lakes in a closed-loop system.

Each of UrbanLab's major ideas builds upon an existing engineered system within the city. The ecoboulevards extend a network of boulevards and parks that are more than a century old. Closing the loop of water undoes the reversal of flow from the Chicago River (its natural flow was turned back in the 19th century). Finally, a 109-mile-long system of 20th century stormwater drains known as the Deep Tunnel would no longer be necessary. UrbanLab would reprogram the drains as new mass-transportation routes.

The team viewed the entire Engineering an Empire series before starting work on their proposal. “There's a holistic and massive scale to everything they pro. le,” says partner Martin Felsen. “We wanted to work in that manner.” By creating a system of multifunctional natural elements within the city, UrbanLab's intervention simultaneously serves future social, recreational, and economic needs while conserving and sustaining the city's considerable reserves of fresh water.
Los Angeles

Infrastructure—collectively, the large-scale products of civil engineering that propel cars, trains, power, and water across the Los Angeles region—is the theme of L.A. winner Eric Owen Moss' riff on the city of the future.

Of the concretized Los Angeles River and the railroad tracks, huge tower grids, and freeways that effectively organize and subdivide today's Los Angeles, Moss says, “These are huge investments designed to solve very simple engineering problems.”

Moss proposes to bridge these defining elements and reconnect the city. Citing how Trajan's imperial baths were built over the remains of Nero's palace in Rome, Moss sees the future Los Angeles as a complex overlay of new structures and typologies, including a horticultural grid, water towers, what he calls a “NAFTA drape” (a zone for clean manufacturing uses that would help keep those industries in North America, rather than the Far East), new habitation structures spanning bridges and freeways, media towers, and a glass forest of housing.

Unsurprisingly, perhaps, Moss' Los Angeles is the most scenographic of the three winning entries, but Moss notes that his reconception of the city's infrastructure is a public policy proposal as much as a visual concept.
New York

A Manhattan transformed by rising seas, the product of melting polar ice caps, is the apocalyptic starting point of New York 2106 by ARO (Architecture Research Office). A hybrid between a literary fantasy and an Al Gore PowerPoint presentation, this is an elegy to New York's vibrant street life, which would need to be transferred to a new building type—“vanes”—as floodwaters claimed the lowest-lying streets of Manhattan.

“Rather than view [the flooding] as cataclysmic, we saw it as an agent of revitalization and regrowth for the city,” explains ARO principal Adam Yarinsky. The stacked horizontal vanes are suspended like piers over flooded streets and serve the multitude of functions that ARO predicts will remain part of New York life—they're residences, offices, shopping arcades, parks, and gardens. The existing buildings of the city are preserved by the intervention of the vanes. By reinforcing the historic order of the city, the street grid, topped by the grid of vanes, will remain the dominant influence on Manhattan's physical environment.

New York's perennial skyward thrust is augmented by twisting, Buck Rogers–inspired, open-lattice towers placed in the Hudson and East rivers. Providing evaporative cooling and water filtration, they become new vertical landmarks that celebrate the inherent sustainability of the 22nd century city.

Image Gallery


U.S. Heading For Financial Trouble?
Comptroller Says Medicare Program Endangers Financial Stability

When the stock market plunges like it did this week, everyone pays attention. The man you're about to meet says hardly anyone is paying attention to what really threatens our financial future. Like an Old Testament prophet, David Walker has been traveling the country, urging people to "wake up before it's too late."

But David Walker is no wild-eyed zealot. As Steve Kroft reports, David Walker is an accountant, the nation’s top accountant to be exact, the comptroller general of the United States. He has totaled up our government's income, liabilities, and future obligations and concluded the numbers simply don’t add up. And he’s not alone. Its been called the "dirty little secret everyone in Washington knows" – a set of financial truths so inconvenient that most elected officials don’t even want to talk about them, which is exactly why David Walker does.

"I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility," Walker tells Kroft.

David Walker is a prudent man and a highly respected public official. As comptroller general of the United States he runs he Government Accountability Office, the GAO, which audits the government's books and serves as the investigative arm of the U.S. Congress. He has more than 3,000 employees, a budget of a half a billion dollars, and a message he considers urgent.

"I'm going to show you some numbers…they’re all big and they’re all bad," he says.

So bad, that Walker has given up on elected officials and taken his message directly to taxpayers and opinion makers, hoping to shape the debate in the next presidential election.

"You know the American people, I tell you, we've been to 13 cities outside of Washington with the fiscal wake up tour. They are absolutely starved for two things: the truth, and leadership," Walker says.

He calls it a fiscal wake up tour, and he is telling civic groups, university forums and newspaper editorial boards that the U.S. has spent, promised, and borrowed itself into such a deep hole it will be unable to climb out if it doesn’t act now. As Walker sees it, the survival of the republic is at stake.

"What’s going on right now is we’re spending more money than we make…we’re charging it to credit card…and expecting our grandchildren to pay for it. And that’s absolutely outrageous," he told the editorial board of the Seattle Post Intelligencer.

You have heard this before, from Ross Perot 15 years ago. You might have even thought the problem had been solved, when President Clinton announced, "Tonight, I come before you to announce that the federal deficit … will be simply zero."

"Well, those days are gone. We've gone from surpluses to huge deficits and our long range situation is much worse," Walker says.

"President Bush would argue that the economy is in pretty good shape, unemployment is down, the deficit is actually less than expected," Kroft remarks.

"The fact is, is that we don't face an immediate crisis. And, so people say, 'What's the problem?' The answer is, we suffer from a fiscal cancer. It is growing within us. And if we do not treat it, it could have catastrophic consequences for our country," Walker replies.

The cancer, Walker says, are massive entitlement programs we can no longer afford, exacerbated by a demographic glitch that began more than 60 years ago-- a dramatic spike in the fertility rate called the "baby boom."


I'm disappointed that SS and Medicare get the blame when there are lots of other reasons as well.

Goldman Sachs and Wall St. Go Green

Believe it or not, Goldman Sachs's interest in green goes beyond its record profits. The firm chauffeurs execs in hybrid cars, and the "Green Tower," its new $2 billion headquarters rising in Manhattan, is so ecofriendly that switching to a meatless diet may be a healthy career move for employees. So you'd expect any deal that reeks of greenhouse gases to set off alarms. Which is what happened when two of Goldman's clients, the private equity firms Kohlberg Kravis Roberts & Co. and Texas Pacific Group, said they wanted to buy TXU Corp., a Texas utility that has become a poster child for global warming.

I just finished the GBN study linked to in Ignatius' WaPo article in Drumbeat. While claiming to be a systems study of already stressed critical systems - and dire enough - energy gets no discussion. The study begins with a quote from Homer-Dixon's "Upside of Down" and then goes on to skip all of the energy considerations except in regard to additional air conditioning. Same old.

cfm in Gray, ME

Gas Prices Up 33 Cents In Past Month

Rosser identifies two disturbing elements in the oil industry.

Production in Saudi Arabia, which produces 5 percent of the world’s oil, has dropped 10 percent in recent months to 8.5 million barrels per day.

At al Ghawar, the world’s largest oil field, the Saudis are making major efforts to get oil out of the ground.

"They’re ordering lots of oil rigs," Rosser said. "And they’re spending huge amounts of money to increase production."

At the world’ second-largest oil field, Cantarell in Mexico, production has dropped 25 percent in recent months, Rosser explained.

If al Ghawar and Cantarell are in decline, then the world’s oil supply has peaked, he added.

"Those two elements reflect major problems," Rosser said. "I don’t think we’ll see $1 a gallon again. Ever."

Check out the comment at the bottom of the article. There's plenty of oil. The Saudis are just holding out on us. And Dick Cheney is keeping an invention that would give us $3/barrel oil from the market. And Big Oil is up to no good in Iraq. That's the only reason prices are high. It's an outrage to every freedom-loving American, I tell ya.

If al Ghawar and Cantarell are in decline, then the world’s oil supply has peaked, he added.

Of course, Cantarell is crashing, so the only question is Ghawar, and Ron and I (and many others, see the 3/4/07 Drumbeat thread), believe that Ghawar is in decline.

In any case:

Door #1: 13 out of 14 oil fields that are, or were, producing one mbpd or more are in decline.

Door #2: 14 out of 14 oil fields that are, or were, producing one mbpd or more are in decline.

For an alternative view on Saudi on another board in reponse to this oil drum commentator:

If any of these inventoried but utterly fallow fields offer promise for the future, it is difficult to imagine why Aramco, at some point over the last 20 years, would not have begun to develop that potential

We have this response (again not my view):
Well actually it's not at all difficult to imagine. Essentially the Saudi's have way to much oil and basically always have done. It's only recently (2003) that spare actually went to zero and now we're already back in a situation where Saudi has a few million barrels (albiet heavy crude) of spare capacity again. So there was never the incentive to develop the vast majority of Saudi's resources, nor the incentive to explore much for more. Saudi resources are vast and technology advancements have resulted in constant upward revisions to the amount of oil that they can actually get out of those resources.

So I guess it comes down to whether you believe that Saudi is full of 'old tired/obscure fields' or whether you believe that Saudi is largely undeveloped and that most of the projects they're bringing on now are just projects that they've pottered around with before, and which they now feel are extremely viable given technology advancements, increased expertise etc. I have to admit that personally speaking the more research I do the more I come around to the idea that Saudi has vast resources and that the Simmons followers arguement is just bunkum. In fact I have to admit a lot of peak oilers remind me very much of the perpetual perma bears that you get on equity markets talking about the ever coming implossion of the US economy.

But anyway the huge elephant in the room for me is that Saudi has big problems in terms of population growth, finding jobs for younger people etc. Basically if they were really running out of oil then the best thing they could possibly do would be to tell everyone. Oil prices would soar, they'd make a lot of money very quickly (and why worry about the longer term consequences if production is declining so rapidly anyway) and could use this money to change their economy.

In fact they're doing completely the opposite. They're spending billions on raising capacity (which remember they really apparantly know is money wasted), and acting 100% like they're very concerned about the very long term and the potential erosion of very long term oil demand from substitution etc. So the question is do you believe that the Saudi's are (for no decernable reason and totally contrary to their own interests) playing the worlds biggest game of chicken? Not just that - but constantly raising the stakes by bringing forward project timetables and increasing expected production levels, just to make themselves look ultra stupid when it all goes t*ts.

Sometimes the truth is the thing that people want to believe the least. In this case the evidence to me clearly points to the fact that the Saudi's are pretty transparant, tend to do as they say, have world leading expertise and technology and are pretty inovative. Saudi's vs Peak Oilers? - well you already know where my money is.

Any comments?

If the Saudis told people they were running out of oil, it would at least spur movement towards other energy sources. It might also spur violence in Saudi Arabia itself as malcontents realize that this is as good as it gets for KSA.

In fact, the Saudis have in the past stated exactly this - that they fear the world will turn to other energy sources before they've had a chance to milk the maximum value out of their oil reserves.

As for your correspondence, why worry? The planet is over populated anyway and peak oil is just one symptom of the overall problem. The problem will resolve itself too. Your goal should be to ensure that neither you nor your family are "solved" along the way.

Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett

EnglishBosch quotes someone from another list:

I have to admit that personally speaking the more research I do the more I come around to the idea that Saudi has vast resources and that the Simmons followers arguement is just bunkum. In fact I have to admit a lot of peak oilers remind me very much of the perpetual perma bears that you get on equity markets talking about the ever coming implossion of the US economy.

One thing you will notice about people who knock Simmons and his argument is that they never explain exactly where Simmons’ errors are. They never dissect his argument and say “here is where he is wrong” or “here is his mistake’. They just call his argument “bunkum” or some other such nonsense. The man has made an argument and it would behoove those who disagree to reply to his argument, not just call it vile names. And one more glaring error these cornucopians make is they never explain exactly where Saudi’s vast resources lie.

Dr. Nansen G. Saleri, head of Aramco reserve management says Saudi has 260 billion barrels of proven reserves, 368 billion barrels of proven, possible and probable reserves and 608 billion barrels of proven, possible, probable and contingent reserves. Dr. Saleri suggest that ultimate reserves will be more than 900 billion barrels. WOW!

However Aramco Senior Vice President Abdullah Saif says that their existing fields sustain 5 percent-12 percent annual "decline rates. These two statements are totally incompatable with each other. That is unless Saudi has huge reserves somewhere else. Yet we know that Aramco is desperately searching elsewhere for oil, any oil. Yet the only new oil they have discovered since 1989 is a tiny field lying deep in the Rub al-Khali. Proven reserves means they know exactly where it is.

If they know exactly where 260 billion barrels of oil is, then all they have to do is sink a well and let the pressure push it out. But if that is the case, why have they desperately been searching for oil for over thirty years now, spending billions of dollars doing so? There is just something wrong with this picture. But EB’s friend has the answer, it is all just a guise to fool us. Saudi, he says, is just playing the world’s biggest game of chicken “just to make themselves look ultra stupid when it all goes t*ts”. (I have no idea what “t*ts stands for.)

One more point this gentleman brings up. He says that if Saudi is truly running out of oil then the best thing they could do would be announce it to the world. There are several problems here. First, the Saudis may truly believe they have this vast amount of oil and are themselves in denial. And, the royal family may fear an insurrection if the local populace learns that they have squandered their vast wealth just to allow the royal family to live the life of luxury. This would no doubt piss them off to no end. And the US just might have second thoughts about protecting such a repressive regime once they learned there is not much there to protect. They also fear that if the world realizes that neither they, nor the rest of the Middle East have these vast reserves, this will trigger the development of alternatives leaving them with a lot of worthless goo on their hands.

But my main point is that those who actually believe Saudi has such vast reserves, they somehow never explain exactly where these vast resources are located. And they never counter the arguments, like those of Simmons, Jeffery and myself, that go into great detail as to why we believe Saudi is currently on the downslope of their peak.

Ron Patterson

flawless rebuttal. on peak oil you're unstoppable. muchas gracias & thanks englishbosch for the worthy example of opposing views.

From article
"In fact I have to admit a lot of peak oilers remind me very much of the perpetual perma bears that you get on equity markets talking about the ever coming implosion of the US economy"

Wouldn't think he'd wanna lean on that crutch too hard!

Something you said that also came up a few days ago as further reason why Simmons isn't answered.

"And, the royal family may fear an insurrection if the local populace learns that they have squandered their vast wealth...."

It's a talking point OBL has used more than once against the royals.

sa is, indeed, spending billions, but nobody at this site has ever said the money is wasted. Yes, rigs are up 3x and production is down... but nobody thinks that more rigs are by themselves resulting in less production. What many do think is that more rigs are, so far, not sufficient to maintain production. It seems highly likely that had their rig count stayed at 18 production would have declined faster, while what is clear to all is that production/rig is in sharp decline.

The US is in the same boat. We are expanding rigs even as production declines. Nevertheless, the mostly small E&P's think the small amount of oil they manage to produce, and which helps reduce the US decline rate to around 2%, is quite profitable.

Why don't they tell everybody? First, like texans in the early seventies, it may be that many leaders have not yet grasped the idea that production will not increase... this is an epochal change for sa. Those that are aware are concerned that a) their position, even their health, may be in jeopardy if the populace realizes the treasure has been wasted, and b) their opportunity to usefully pad the swiss accounts will end. IMO there are sound reasons for these issues to be, and remain, state secrets.

CL M07 6315 6315 6219 6219 -141
CL Z07 6580 6580 6503 6503 -128
CL Z08 6650 6675 6639 6639 -106
CL Z09 6650 6680 6650 6680 -50
CL Z10 6660 6660 6625 6640 -40
CL Z11 N/A N/A 6570 6570 -70
CL Z12 N/A N/A N/A 6610 -1

RE: Why Iraq's new oil law won't last

See for more, and better, this article in The Nation:

Who Will Get the Oil?

Last year the Oil Ministry allotted $3.5 billion for projects like repairing pipelines, but because of abysmal security and a lack of skilled technicians and managers, the ministry had spent only $40 million as of August 2006. The work was assigned to the ministry's besieged State Company for Oil Projects, which has taken over responsibility for construction, exploration and repair now that Halliburton and Parsons, having been paid billions but done little, have fled.

Exports are now so low and the flow of oil is so intermittent that last year the Iraqi government paid more than $100 million in demurrage charges, or compensation fees to oil tankers that were delayed waiting to load at Basra.

Until the middle of 2006 most of Iraq's oil pipelines were not even equipped with working meters. Earlier in the occupation US viceroy L. Paul Bremer refused to install new ones--why, no one knows.

Non-OPEC oil supply plagued by uncertainty and high costs - CGES


LONDON (AFX) - High costs and the uncertainty of the oil market have prompted the Centre for Global Energy Studies (CGES) to revise downward its forecast for supply growth from non-OPEC producers

The CGES calculated that actual growth in non-OPEC supplies had been over-estimated by an average of more than 400,000 bpd in recent years, said the report entitled 'Non-OPEC production: Rising costs slow output growth.' Increases in total non-OPEC production will reach 1.07 mln bpd in 2007 compared with 456,000 bpd last year, said the CGES in its latest forecast

"The problem is that new projects must first compensate for output declines at existing fields before they can add to overall capacity," explained the report

Unforeseen technical problems, unexpected project delays, bad weather, accidents and geopolitical risks forced the downward revision by the CGES. But, the London-based research centre said, compared to 2006, 2007 will be a banner year for non OPEC output

"If you add up all projects which should come upstream this year the figure is even more than the 1.2 mln bpd which the International Energy is forecasting, but you have to assume they don't come upstream as planned," said Dr Leo Drollas, head of the CGES oil analysis

He added with the uncertainty of the oil market, "even we could be wrong. If the figure is reduced to 500,000 bpd, that could push prices higher."

"The problem is that new projects must first compensate for output declines at existing fields before they can add to overall capacity," explained the report

That's it, in a nutshell.

Help! I am a dilbert when it comes to the workings of a computer. Lately it feels like the movie Groundhog day. Every time I try to back out of a thread my screen defaults to Feb 10th. I can go back to the main page, but only by starting over again. Any thoughts? I am on an I Mac running OS X.

I'm afraid I know nothing about Macs. Except they sucketh for computer games and looketh like Barbie doth use them. ;-) You might try e-mailing SuperG, if none of the resident Worms knows what the problem is.

my mac does the same with safari but not firefox

Sounds like something got stuck somewhere.

Make sure you're running the latest system update. Presently: 10.4.8.
Safari 2.0.4 (419.3).

Suggestion: Start up holding Option-Apple-P-R keys. Keep holding them down through 4 startups (this goes automatically, let the "bell" chime 4x) before releasing the keys. This will zap the parameter RAM.

Wow, and I thought "control-alt-delete" on Windows PCs was ridiculous...

Hey, maybe we could come up w/ a catchy name for new output failing to keep up with declines in existing fields..Yeah, lets call it PEAK OIL!
Amazes(disappoints?) me how these institutions wont connect the dots.

"If you add up all projects which should come upstream this year the figure is even more than the 1.2 mln bpd which the International Energy is forecasting, but you have to assume they don't come upstream as planned," said Dr Leo Drollas, head of the CGES oil analysis.

If the natural decline rate is 5%, as even CERA accepts, then non-OPEC production will need 2.2 mb/d in new production just to stay even.

Ron Patterson

Wow. Even Japan, known for being a very law-aiding society, isn't immune:

Metal thieves steal kids' slides, toilet roof

TOKYO (Reuters) - Children's slides, incense holders from cemeteries and even the roof of a public toilet have disappeared in a spate of metal robberies in Japan prompted by surging steel and copper prices.

Last year, there were about 5,700 such robberies in Japan causing damages worth some 2 billion yen ($17.27 million), and the number of cases is rising, media reports said citing the National Police Agency.

There were four incidents of metals robberies on Sunday alone, including the theft of 550 kg of copper wire worth some 330,000 yen in Gifu prefecture, central Japan, media said.

Last month, thieves stole two stainless steel slides from parks in Saitama prefecture neighboring Tokyo.

They're blaming China:

Industry officials believe the metal was stolen to be sold as scrap to China, feeding a construction boom as Beijing prepares to host the 2008 Olympics.

They always blame the Chinese for crimes... unless it is money laundering in which case it is the North Koreans....

Yeah, I know what you mean.

Still, even here in the U.S., we are blaming the Beijing building boom for the high prices of concrete, steel, and copper.

And I thought it was the endless building of military bases and "embassies" in Iraq?

Whither SAT? Dude, we could really use you these days!!

An MSNBC story pointed to some data on who overseas owns dollars. Despite all the talk of China, Japan still owns more ($644b vs. $350b) US Treasury Securities. Does anyone the numbers for foreign investment in US equities and commodities markets or anywhere else exposed to a declining dollar?


Energy Giant Invests Three Million Dollars in Altair Stock

RENO, NV -- MARCH 5, 2007 -- Altair Nanotechnologies Inc. (Nasdaq: ALTI), a leading manufacturer of safe, high-performance battery pack systems used in electric and hybrid-electric automobiles and stationary power systems, announced today that global power leader AES Corporation (NYSE: AES) has made a $3 million strategic investment in Altair.

AES privately purchased 895,523 treasury shares of Altair common stock at $3.35 per share, the NASDAQ closing price of Altair shares on the day prior to closing. Altair agreed to register the resale of such shares. The purchased shares represent approximately 1.5% of Altair's outstanding common shares. Cowen and Company acted as the financial advisor to Altair for the transaction.

AES is one of the world's largest global power companies, with 2005 revenues of $11 billion. With operations in 26 countries on five continents, AES's generation and distribution facilities have the capacity to serve 100 million people worldwide.

"Advanced battery technologies have the potential to transform both the electricity and transportation sectors", said Robert Hemphill, Executive Vice President of AES. "The batteries that Altairnano is beginning to ship, with their high power density and extended cycle life, offer great promise for powerful, fast charging electric vehicles and other applications."

10 years left to avert more US energy disaster?!

LAST CHANCE: The fight to save a disappearing coast

The satellite map in Kerry St. Pe's office shows the great sweep of marshes protecting New Orleans from the Gulf in bright red, a warning they will vanish by the year 2040, putting the sea at the city's doorstep.

Coastal scientists produced the map three years ago.

They now know they got it wrong.

"People think we still have 20, 30, 40 years left to get this done. They're not even close," said St. Pe, director of the Barataria-Terrebonne National Estuary Program, which seeks to save one of the coast's most threatened and strategically vital zones.

"Ten years is how much time we have left -- if that."


In 10 years, at current land-loss rates:

-- Gulf waves that once ended on barrier island beaches far from the city could be crashing on levees behind suburban lawns.

-- The state will be forced to begin abandoning outlying communities such as Lafitte, Golden Meadow, Cocodrie, Montegut, Leeville, Grand Isle and Port Fourchon.

-- The infrastructure serving a vital portion of the nation's domestic energy production will be exposed to the encroaching Gulf.

-- Many levees built to withstand a few hours of storm surge will be standing in water 24 hours a day -- and facing the monster surges that come with tropical storms.

-- Hurricanes approaching from the south will treat the city like beachfront property, crushing it with forces like those experienced by the Mississippi Gulf Coast during Katrina.

The entire nation would reel from the losses. The state's coastal wetlands, the largest in the continental United States, nourish huge industries that serve all Americans, not just residents of southeastern Louisiana. Twenty-seven percent of America's oil and 30 percent of its gas travels through the state's coast, serving half of the nation's refinery capacity, an infrastructure that few other states would welcome and that would take years to relocate. Ports along the Mississippi River, including the giant Port of New Orleans and the Port of South Louisiana in LaPlace, handle 56 percent of the nation's grain shipments.


Anybody want to join together and make some bumper stickers that say "Food for people, not for SUVs"? Anybody know a place that makes custom bumper stickers in small quantities for a reasonable price?

CafePress, or something of that ilk, would probably be the easiest.

there's the "Ghawar is Dying" sticker (google "Ghawar is dying") you can also get your tote bags, t-shirts, mugs, aprons for those post peak bar-beque's...its a little sick. However, I liked the sticker (#1 provoked question: Ghawar? what's that?)

Got mine a couple years ago. NEAT Sticker.

Great Article. Also see Chip's article

Sixty Days, Next Year
by C. Haynes



A MUST read.

I read that a long time ago but couldn't remember where I'd found it.

I've been thinking about that story every since. Been wanting to reread it.


Just head for the nearest print shop. Any printer can get this one.

The good thing about CafePress and such places is that they'll handle the distribution. You don't have to worry about minimum orders, storage, shipping, etc. They print to order, and handle the shipping for you, too. You just post the URL and anyone can order one sticker or hundreds.

That is interesting. Thanks.

Tea leaves

The energy markets can be very confusing. For example, most at TOD think SA has peaked, while Robert looks at the same data and thinks they have not. The following are various bits and pieces that, mostly, can be agreed with (all production statistics from EIA except where noted.)

C+C is down 200k/d 06/05. Exports/imports are obviously down further.

06 saw weak total liquids production in the first half, 700k/d higher in the second half, flat overall.

Stocks soared in 3q06 on the back of strong production, resulting in the price decline. Stocks are now back to normal, prices still down. Why are prices down if production is flat and Chinese imports continue to surge? It is always supply and demand. The northern hemisphere warm winter helped drive prices down, a cool late winter is not yet sufficient to raise prices. The weather still matters. Meanwhile, US consumption is ramping up.

Total world liquids are up a pretty small 25k/d (0.03%.) (Toders are well aware that there is a declining EROEI associated with world-wide hydrocarbon production, not least tar sands and ethanol. However, and ignoring this, imo total liquids should routinely be corrected for the reduced energy content in ethanol; if this were done, 1/3 of the 900k/d world wide ethanol production would be deducted from total liquids, resulting in a 06/05 decrease of 275k/d.)

SA production is, per SA, down 1Mb/d yoy to 8.5Mb/d. Rigs looking for oil are up 3x from end 04. As far as I know, no new projects will come on line this year, so decline is imo likely to continue down at 12%/year, resulting in 8Mb/d avg 07 and 7.5Mb/d year end 07. If this comes to pass, will the world still believe claims of vast future production? Will it be thought that SA is meanwhile continuing to sacrifice itself for the benefit of their OPEC friends and GW?

Mexican production seems very likely to slide 500k/d by year end 07, with avg 07 down at least this much from avg06.

GOM projects will continue being delayed. US production will likely decline a modest 100k/d year end 07.

Chris sees substantial new production this year from Angola, brazil, Nigeria?, the stans, and therefore thinks ‘no peak before 07.’ But, he does not look for an overall reduction from SA and Mexico of 2+Mb/d from 1/06 to avg 07… Meanwhile, the surge he expected in 06 did not appear. IMO 07 will struggle to stay up with 05/06 peak years… maybe we will look back on the 05-07 plateau.

IMO Russia is the big question mark. Like most gov run oil industries, investment is minimal. We know exports are down, but have we seen the second and last peak in 06?

World-wide rig rates continue to soar, tanker rates are crashing.

NA natural gas

US ng production is up 2% 06/05, but this is misleading because 05 was down from K/R. US peak was 01, Canadian 01/02, US production down 06/04. Canada has recently loaned us 160 rigs (bless their hearts), so US production should be flat yoy, but Canadian production imo will be down 10%, tar sands consumption will be up, so Canadian exports to the US will be down 1Tcf, or 4% of US consumption, and accelerating into next winter.


There are predictions that hurricanes will return to the Atlantic/gom this year. More warm winters, please… maybe GW not all bad.

Nice summary.

Re: correction for ethanol energy content, you may also want to correct the tar sands production for their low EROI, that would be of similar magnitude. As you said, the EROI issue affects all oil and gas production, but we don't have good numbers for the EROI changes over time. But the tar sands are known to have quite low EROI, not clear exactly how low, but even if you assume 5:1 that's about 200 kbpd lost.

I just had this thought that most people think that this si something that can be "FIXED" so to speak.

It's not like having something wrong with your arm or leg where possibly you could get an artificial one.

Peak Oil's problem to our "Body" is more like thinking of replacing your whole nervous system with something else.

It's NOT a "Limb" type of thing. It is the fabric itself of our society.

Can the housing bubble get worse than this? You bet.

This is the moment when Wile E. Coyote looks in the camera, sensing something ain't quite right. He hasn't looked down yet, and certainly not started to fall.

Shares of the four biggest independent subprime lenders -- New Century, Fremont General Corp., Accredited Home Lenders Holding Co. and NovaStar Financial Inc. -- lost at least half their market value in the year ending March 2. New Century shares, which traded at almost $52 last May, today fell $8.34, or 57 percent, to $6.31 as of 9:40 a.m. in New York Stock Exchange composite trading.

Subprime woes: How far, how wide

Problems loans to home buyers with less than top credit has become a big threat to the markets - and the economy.

Oh my, was it only yesterday that I said:

"(The criminal side of the housing bubble hasn't gotten a lot of attention yet, but it will. This may get that particular ball rolling. There's a few nerves rattling in boardrooms right now)?"

One note: the guilty criminal in all of this is Alan Greenspan, him and those he takes orders from.

They could have easily stopped it all at any moment. Thing is, they didn't want to. They instigated it. Drown the American people in debt.

Lawsuits targeting mortgage schemes

Big lenders and Wall Street investors are going after Arizona mortgage brokers, appraisers, real estate agents, title firms and home buyers for fraud.

Dozens of civil lawsuits alleging the gamut of mortgage fraud, from cash-back deals to lying about income on loan documents, have been filed against Valley firms and individuals during the past few months.

Fraud experts and regulators say the lawsuits are only the beginning as the fallout from mortgage fraud starts to hit the Valley. Cash-back scams involve getting a mortgage for more than a home is worth and pocketing the extra money. The deals inflate home values and leave lenders with losses from loans worth far more than the house itself.

"Banks are going to force mortgage brokers to buy back bad loans, and mortgage brokers don't have the money so they are going to go under," said Richard Hagar, a national mortgage and real estate fraud expert with American Home Appraisals based in the Seattle area. "This is the beginning of the wave of lawsuits, lost licenses and criminal indictments in Arizona."

Saint Alan (Greenspan) is in no more danger than is Saint Ron (Reagan). MSM will adjust perceptions as needed. Minitrue always at work. Ignorance is Strength. Freedom is Slavery.

you need to start going away

But he has a point about Reagan - it was during his administration that America turned away from dealing with the problems the previous ten years had revealed, from pollution to 'energy independence.'

Notice that Nixon, Mr. Republican, never gets mentioned as a president that created the EPA or such laws as the Clean Air Act and who also instituted wage and price controls - nice link at http://www.econreview.com/events/wageprice1971b.htm

But strangely, these days, you get court cases like this -


Fascinating - why does Bush hate Nixon's legacy so?

Obviously, Bush hates the sort of Republicans that elected and supported Nixon for two terms.

Except that message never actually seems to be part of what passes for media generated history.

And if you are Greenspan, it helps to be married to a journalist - 'Andrea Mitchell (born October 30, 1946) is an American journalist, television commentator, and writer.

She covers burgeoning international issues for all NBC News broadcasts, including NBC Nightly News with Brian Williams, Today, and MSNBC. She is also often a guest on Hardball with Chris Matthews.

She frequently anchors the 11AM hour of MSNBC Live.'

Sometimes, things are a lot easier to understand when you know a few simple facts - after all, having a wife who is part of a major media outlet is generally considered a plus in image management.

Maybe you should spend a few minutes seeing how many other media figures are married to political figures in DC - could be interesting. Here is another quick one - 'Christiane Amanpour, the chief international correspondent for CNN, was married yesterday to James Phillip Rubin, the Assistant Secretary of State for Public Affairs.'

Not sure who earldaily is directing that comment at, in any case, don't hold your breath.

New Century, the Irvine, California-based home lender in default because of losses from bad loans, said March 2 that U.S. prosecutors have begun a criminal probe of accounting errors and trading in its securities. The company also said it may not survive unless lenders ease terms for providing new financing.

"Up shit creek without a paddle," comes to mind.

anyone think the housing thing alone might be a bit more of a forewarning, damaging but giving the impression that its just a blip, a "correction" that is significant but can be absorbed, and that the realities of the energy situation will have to register specifically for the market to reflect these related inherent instabilities...
'course, depending on KSA they could transition seamlessly I guess

BBC article on micro wind generation and its cost in UK:

This is a comment on the first article titled "A review of 2006 EIA Data; Expectations for Year Ahead".

Since the EIA and IEA data get reworked every month to 60 days aren't we supposed to base our discussion on the data that was given 2 to 6 months ago?

It seems to me that basing an opinion on data that we know will get reworked in 60 days while interesting doesn't give us the real picture.

Just a thought...

hi ammond,

I wrote that article, so I should probably respond :-)

The data does get revised but not enough to change the trends in most countries. You only need to wait a few extra months if you're haggling over whether one month at 84.57 million barrels was 'actually' greater than the next one at 84.53 million.

I could have written the report based on just the first 8 months of data for last year and the result would be pretty much the same. It's the trends rather than the precise figures that I am working with.



An Article from a yr ago on Coal Liquification. Contains Official Pronouncements such as "Oil will remain below $40 for the next 50 yrs"


I just caught this from one of the article excerpts above, with regards to China:

"Crucially in a nation which still relies on agriculture for the majority of its people"

Let me just say that all nations rely on agriculture for all of their people. Period. Don't get confused.

- sgage

Cameco ahead of schedule on remediation at Cigar Lake


Stock really tanked after the mine got flooded in Oct. With uranium prices through the roof and it obviously not going to take half of the 2 yrs originally predicted to bring the mine back online, this might prove a good place to put your money while the rest of the market crashes.

Hello TODers,

Tortillas Spark Inflation, Drive Down Mexico's Peso

Tortilla prices jumped 5.9 percent in January, the most in eight years, after costs climbed for corn, the main ingredient. That increase fanned inflation and a bond market rout that curbed demand for the currency. The peso has fallen 2.4 percent in the past month, making it the world's third-worst performer against the dollar among the 70 currencies tracked by Bloomberg.

``There's a big risk that tortilla price increases will lead to higher wage demands and fuel inflation,'' said Eduardo Perez, head bond trader at Mexico City-based brokerage Valores Mexicanos SA, the country's largest independent brokerage. ``Foreign investors don't like this environment and are selling. This is directly linked to peso weakness.''

The peso may fall further in the next several months as corn prices continue to rise. Corn has soared 15 percent in the past eight weeks and 119 percent since late 2005 as demand for the grain grows from ethanol producers.

``Risks for the peso will begin at the end of April or beginning of May when the pact ends, inflation pressures begin to mount and demand for bonds drops,'' said Luis Raul Rodriguez, head economist at Vector Casa de Bolsa SA, a brokerage in Mexico City.

``It'll be a dangerous moment.''
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Hello TODers,

75% of our farmers' phosphate[P] and potash[K] comes from Florida. How will declining fuels affect the distribution of these minerals all across North America? Recall my earlier posts on how fertilizer corps' stock prices are shooting up. How will this affect food and ethanol prices going forward?

EDIT: Recall my speculation that we should stockpiling huge quantities of fertilizer while energy is still cheap and available. The highest and best general use of natgas is for making fertilizer, not burning for heat or electricity.

A dragline bigger than a barn scoops up 60 yards of Florida sand in its bucket, swings it over a gaping hole in ground and dumps it in a thundering crash.

That's how the mining and processing of most of the phosphorus and potash used on American farms begins.

The dragline is one of many that Mosaic operates in its four phosphate rock mines in central Florida. Mosaic supplies about 75% of the phosphate and potash in the U.S.

But the draglines could go silent in your lifetime.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?


I will have to admit (shame on me :-(, that the first time I read your idea of stockpiling fertilizer, I passed it over lightly without paying much attention.

The more I think about the idea, the more I think I like it, and here's why:

There is now little doubt that we are going to have to start large scale importation of natural gas, presumably by way of LNG.

I am beginning to think that what we should import is more fertilizer, to reduce our need for imported raw gas to manufacture it, and keep the raw gas for the heating and power production needs we still have.

The logic here is for the next say 5 years or so to keep summer injection levels going into storage at an absolute maximum possible level, while importing fertilizer and other easily transportable bulk nat gas based chemicals into the country.

Now, there is a downside to this: We have a nat gas based chemical industry that will protest and loudly. Here's where it gets touchy: We will have to protect them with a bit of "central planning style" subsidy.

The deal is this: We simply are not going to be able to get the needed volume of LNG infrastructure into place in time. Heat and the electric power grid are essential strategic assets. We have to have nat gas for them before anything else, until we can transition off nat gas. Fertilizer is much easier to transport and store than LNG and is not time sensitive in any real way. LNG will be a logistical pain. Fertilizer is as easy to handle gravel.
Note the words "transition off nat gas." We MUST be pushing hard on a nat gas consumption program, using solar hot water, passive solar, wind and PV, and geo-thermal ground coupled heat pumps in new as well as retrofit construction. And that would just be the start. Thin film solar needs to be pushed to the front burner of introduction, as well as possibly a strategic set of nuclear power plants, well placed to maintain grid function no matter what the natural gas situation is. Controversial I know, but we are past the time of analysis paralysis, we are going to have to act, and as with any human action, be willing to live with the consequences.

One more area of development could make this plan work, and that is LPG or propane. This is the often overlooked fuel, clean, like natural gas, produced as a byproduct of gas, and easy to handle and store. It is strategic in it's great portability and stability in storage in a way that few other fuels are.

Long story short, we should be investing now to increase natural gas and propane storage to the maximum degree we can afford, and really looking at the next generation of strategic nuclear plants. Forget this JIT crap when it comes to strategic energy resourses. We need strategic reserve and flexibility, and we need it fast.

Bob, something like your idea used in a strategic planning way now to me now has a greater possibility of working than the much talked about LNG plan, which is just not going to happen. Thanks for opening a bit of a new line of thinking for us...:-)

Roger Conner Jr.
Remember, we are only one cubic mile from freedom

We have started stockpiling fertilizer. Some of it has already gotten more difficult to obtain in the 1.5 years we have been here.

We're composting too, but so far it's not enough for our 50 mac nut trees and 50+ fruit trees and vege garden. This is going to be a big problem down the road and we personally don't have a great solution yet. We may have to collect the garbage of our neighbors who are too lazy to compost.

Saudi production continues to fall like a rock, but they have of course "cut" production according to bloomberg. What discipline.

Hello Roger,

Thxs for responding. I am not a farmer, nor an economist, nor a fertilizer expert, but I can forsee huge food shortages postPeak as Nature forces us to go from detritus topsoil mining to sustainable relocalized permaculture [Humanure recycling and localized composting].

Your ideas have much merit, and are probably better and more completely thought-out than mine. IMO, any program that diverts wasteful natgas burning to building Biosolar goods such as PVs, windmills, solar heaters, insulation, etc is worthwhile. My thought was mandating much of the natgas to the making and stockpiling of fertilizers would rapidly jackup natgas and electricity prices to speed the growth and adaption towards the needed Biosolar mindset.

Regaining the knowledge, skills, and required localized infrastructure will possibly take decades: the early stockpiling of fertilizer to help bridge this transition period can help encourage cooperation, conservation, and minimize Overshoot violence. As I have posted before: I will gladly accept naturally occurring darkness if that energy is redirected to maintaining minimal food and water for as many as possible.

I think once Peakoil Outreach is successful, especially if the masses are informed by rapidly rising prices/diminishing supplies: most will see the wisdom of 150 million wheelbarrows and bicycles vs. 150 million rifles. I think most will relatively peacefully accept a tremendous decline in living standards, but the real danger point of social collapse and blowback violence comes when starvation and disease threatens-- we can best optimize our decline by keeping adequate food safety reserves, which requires keeping adequate fertilizer reserves until localized nutrient recycling predominates.

Recall that long lasting Pre-Detritus societies, such as the Egyptian and Chinese Dynasties, strove to keep at least seven years of essential foodstuffs to bridge the drought periods. This should be the same social goal of a postPeak North America. If the minerals mined in Florida are absolutely essential to maintaining NA agriculture and permaculture, then this distribution need alone should be reason enough to rebuild the transcontinental RR spiderweb now.

Your Quote is profoundly true: "Forget this JIT crap when it comes to strategic energy resourses. We need strategic reserve and flexibility, and we need it fast."

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

I thought the thinking was that farmers would 'stretch' NPK fertilisers with charcoal which was somehow able to amplify the dosage. Assuming it rains eventually Down Under I was planning to to spray onto a field a 2 millimetre slurry of
powdered charcoal with a smidgin of nutrients, K
(potash),P(phosphate) and N (urea). If this black rain idea works the cost will be just a dollar or two per hectare (X 40% per acre) so there will be no need to hoard fertiliser. Of course it may not work.

That sounds closer to engineer poets idea, somethng I have been rereading:

Remember, we are only one cubic mile from freedom