DrumBeat: March 25, 2007

Technology, climate change spark race to claim Arctic resources
Barren and uninhabited, Hans Island is very hard to find on a map.

Yet these days the Frisbee-shaped rock in the Arctic is much in demand — so much so that Canada and Denmark have both staked their claim to it with flags and warships.

The reason: an international race for oil, fish, diamonds and shipping routes, accelerated by the impact of global warming on Earth's frozen north.

Concern grows on refinery safety

Refineries in California and across the country are breaking down with unusual frequency this year, boosting prices at the pump and endangering workers and communities.

The rash of oil plant problems may not be a coincidence. The breakdowns stem from the hard use of aging equipment, a shortage of trained workers, corporate cost cutting and ownership changes, refinery experts say.

T. Boone Pickens to discuss peak oil concerns with Midland audience

I'll talk about world oil peaking, yes. I believe that to be the case, that 85 million barrels a day is the best the world can do. I think we'll be tested in the fourth quarter of this year. Oil demand globally should be 86-87 million barrels a day. Now, that's if the global economy holds up. If the global economy declines any, oil demand should ease. If demand continues to strengthen, prices will move higher and could reach $70 a barrel.

IEA report shows oil demand is up, supplies are down

The IEA report says the Organization for Economic Cooperation and Development inventories decreased 8.6 million barrels in January. The data for February suggests stock piles may have fallen 65.7 million barrels in the OECD nations. This suggests industrialized countries are heading towards their largest decline in reserves (for the first quarter) in 10 years. The data is bullish on numerous fronts.

McFarlane: Renewable Energy Best Solution To Terror Threats

The United States should accelerate development of renewable energy sources because of increased risk from terrorist attacks that could cripple the economy, former national security adviser Robert McFarlane said Saturday.

Speaking at a renewable energy summit organized by Sen. Ken Salazar, McFarlane, who was national security adviser for President Reagan, said an attack last year on a Saudi oil terminal was a warning of what could happen if terrorists carry out their threats to go after oil supplies.

He said a truck filled with explosives came within 100 yards of the oil terminal before it was stopped. Had the attack succeeded, it would have knocked out a terminal that supplies 6 million barrels of oil a day for a year, tripling the cost a barrel of oil to $150 a barrel overnight.

Venezuela fears boom may go bust: Declining currency value and political strategies threaten to hamper oil-rich nation's economic frenzy

Inflation has jumped to 20 percent, imports are more expensive because the local currency's value is dropping and Chavez has moved to nationalize key sectors of the economy, vowing to make Venezuela a socialist country.

Yukos investor warns oil giants: 'We will sue you for billions'

The owners of Yukos have warned BP and other Western companies they face claims for billions of pounds in compensation if they participate in this week's auction of the former Russian oil giant's remaining assets.

Catastrophic Hypothesis: Could Global Warming Melt All Ice On Earth?

Our institute has prepared an atlas of the world's snow and ice resources, which describes all the ice on the earth and even offers a map of the world without ice. It is, however, a model, not a forecast. Yet there are forecasts warning that if the global warming seen at the end of the 20th century continues for several decades, a lot of ice in the Artic Ocean will melt.

China, Venezuela to cement ties with oil deals

Venezuela said on Saturday it was working on a raft of oil deals with China, giving impetus to President Hugo Chavez's attempts to break his country's dependence on oil exports to the United States.

India committed to Iran gas pipeline: oil minister

India is committed to a multi-billion dollar pipeline that will transport gas from energy-rich Iran through Pakistan despite reported objections from United States, Oil Minister Murli Deora said.

China starts drilling 'Asia's deepest' oil well

Energy-hungry China has started drilling what it says will be Asia's deepest oil and gas well, state media said Sunday.

State-owned Sinopec plans for the Chuanke No. 1 Well in southwest Sichuan province to reach a depth of 8,875 metres (30,000 feet) -- more than the height of Mount Everest, Xinhua news agency reported.

Will anxious Arab states soon form a nuclear family?

From Libya to Egypt to fuel-strapped Jordan, Arab countries have signaled their desire to develop nuclear power, even amid a concerted attempt by the United States to tighten the noose around Iran lest it join the nuclear club. These new players are entering a nuclear race in an unstable zone, dominated by two regional powers, Iran and Israel.

Australian city aims for world first climate change blackout

Australia's largest city will be plunged into darkness for an hour on Saturday in an attempt at a world first blackout to raise awareness of global warming, organisers say.

Development in harmony with nature

O'Brien said those who squawk about the costs of going green are shortsighted.

"Between peak oil and climate change, energy is going to get very, very expensive," he said. "The dilemma of the dollar is that dollars don't measure social values. Global warming is the biggest, most colossal catastrophe that the human race has ever seen. You've got to start somewhere."

Renewable sources the key to energy crisis?

Biofuel and other renewable energy sources may hold the key to Africa's energy crisis. Without intervention, this crisis is set to grow. Southern African cities such as Lusaka in Zambia, Harare in Zimbabwe, Gaborone in Botswana and Dar-Es-Salaam in Tanzania will be affected.

Deep economy: Localism, innovation and knowing what's what

I have no faith that people in the United States or elsewhere will voluntarily reduce their standards of living: indeed, outside of a few statistical outliers, like the Amish, I know of no evidence that anyone ever has, at least for very long. The way forward is not by going back to some earlier model of living which we believe to have less impact on the Earth, because people won't accept it, and we need mass popular support for dramatic change if we are to avert catastrophe.

So, we must ask ourselves, How can we deliver the prosperity billions of people expect, while reducing the ecological footprint it exacts?

Open skies deal will undo curbs on CO2, say Greens

Environmental groups warned yesterday that the open skies treaty to liberalise transatlantic flights could undermine efforts to combat climate change.

Five years to save the orangutan

A shocking UN report details how the booming palm oil industry is wiping out one of man's closest relatives as its forest habitat disappears.

Algae Biofuel Company to Grow Miscanthus as Biofuel Feedstock

AlgoDyne Ethanol Energy, the developers of a proprietary based process to continuously harvest algae biomass from photobioreactors to produce electricity and fuel, is acquiring 3,000 acres of agricultural land in Saskatchewan, Canada, to grow bioenergy crops, including Miscanthus.

How to boost Wind Power Development

The current study shows that the existing policy instruments intended to promote wind power are strong enough to make wind power projects competitive, but current legal rules for environmental permits and territorial planning, and public criticism at the local level, create substantial investment uncertainties.

Saudi Arabia not planning oil market crash

The reports that Saudi Arabia is about to engineer oil market collapse so as to contain its over-zealous neighbour, kept echoing in Zurich and London, over the last week or so, as people in the energy fraternity seemed deeply interested in finding out the truth on the issue on the sidelines of an industry conference.

BHP chief's doubts over clean coal technology

The former head of BHP has punctured the optimism of the Howard Government about clean-coal technology by saying the long-term storage of the carbon waste may be as difficult as dealing with nuclear waste.

Clean coal would cost billions

It could cost $4 billion annually to eliminate the carbon dioxide generated by power plants in the Carolinas.

The immense cost for cleaning up coal would be equivalent to building two nuclear power plants every year.

The number 1 slot ;-). How about a discussion on the why's of HL? This is an update of a post I made last week.

Robert Rapier is right to question HL in my view. The production curve on the way up could have taken any shape because it's a economic curve, specifically GDP/(GDP/bbl). Any number of things could have changed it - WW III, bird flu, asteroid strike - you choose. The fact that geology, investment and technology allowed supply to rise to 85mbd is a completely unrelated event. People who think demand creates supply are called economists not engineers.

HL is a theory without a hypothesis. OK, oil production is never a square wave and it rises then falls, and the area under the curve will equal URR at the limit but so what!

There must be some similar process or behavior at work in order for HL to produce similar outcomes in different oil provinces if that is what it is doing. We need an explanation of what HL is measuring. Is it below ground or above ground factors or one driving the other? Here, at least is a hypothesis:

The infrastructure put in place for an oil field closely correlates with the initial estimate of URR. URR(E) determines the size of the investment and thus the rate of extraction. This correlation will tend to produce similar production histories for different oil provinces and similar HL plots.

Is that why HL works? It maybe. Think about Prudoe Bay. What inputs set the size of the pipeline that carries the oil away? It's the kind of investment decision that would attract a huge amount of analysis. Did they take the rate at which the fields could produce and the URR(E) and came up with a flow rate which sized the pipe? No one would put in a big pipe for a small field or visa versa. This stable relationship of geology driving investment size provides a [possible] explanation for the repeatability of HL plots. Colin Campbell has stated that BP's internal URR(E) for Prudoe Bay was spot on but they under reported at the start. Reserves rose as more was moved into proved as per SEC rules.

I for one would like to know what I'm being asked to believe about HL.

The hypothesis is that bell shaped production functions have a linear-like behaviour on a P/Q vs Q graph. It works for Gaussian and time differentiated Logistic functions. But for Gaussian production distributions the linear regime will overestimate the URR since linearity fails as P --> 0 as the P/Q vs Q function curves down towards the Q axis. I think that for large production regions and the world the Gaussian distribution is a better fit. So the whole debate is missing the mark. The URR will be lower than we can predict around the time of the peak. Underpredicting the URR is not the problem.

Here, at least is a hypothesis: The infrastructure put in place for an oil field closely correlates with the initial estimate of URR...

I think there's something to that. Otherwise, in the Prudhoe Bay example, the pipeline capacity (if too small) would have forced a "mesa shape" to the curve.

But suppose that too-small a pipe had been built. If later the URR was seen to be big enough, another pipe would have been proposed. The reason is that when people see an opportunity for profit, they usually pursue it.

In my view the basic assumption behind the Hubbert method is exactly that. Humans are a "weedy" species, that tend to exploit all resources they can. The method expects such growth, which is indeed driven by economics. It does not depend on a specific rate of growth of production (in the initial, exponential, stage). The same math works for any constant rate of growth. In reality the growth rate fluctuates due to non-geologic factors, but in the long run (and the method applies to decades-long periods) there is usually a roughly exponential development, which slowly and eventually becomes affected by depletion (the growth rate slows down) - the first signs of below-ground factors.

I don't believe the downslope will mirror the upslope though, because I can't think of any underlying reason for that.

Thanks for your reply, vtpeaknik. Human economics definitely have a lot to do with it. I agree with you on the downslope not mirroring the upslope. They are separate curves to me - unconstrained human/economic up followed by geology constraint on the way down.

As an aside, I think T. Boone Pickens' prediction above rings true to me. Peak oil is never late for the party. I can't tell you how many times I've heard my own government (UK) say that North Sea is declining 'faster than expected'. How many times do they have to say it before realizing their whole forecasting methodology is wrong? What is more, tax on North Sea production was increased last year. Costs are typically $25/bbl for new production. Add 50% tax and North Sea oil at $50/bbl is marginal. We don't have ANY kind of localization option here with our population density.

I've got to go now. Regards,

I like the "weedy" species analogy. The Oil Shock Model uses that to the maximum effect. It makes the assumption that extraction will be proportional to the amount available, no matter how small or how large the reservoir. I have previously called this a "greedy" analysis. The inbred greed of humans is the basic premise.

BTW, I don't buy an exponential increase. An exponential increase is often mimiced by a series of damped exponentials that get convolved together.

"Would you please please please please please please please stop talking?"

A Hemingway character.

No more tempests in teapots.

You know, I really do agree with you here, although I have to admit that in part the purpose of this blog is to debate the minutiae of things like this....

HL is a theory without a hypothesis. OK, oil production is never a square wave and it rises then falls, and the area under the curve will equal URR at the limit but so what!

OK, let's see.. I think you have sort of answered your own question there, Alan. The hypothesis goes something like this: many natural phenomena follow a bell-shaped curve. I think there's a formal statement of this in the discipline of statistics.

So, what Hubbert was saying, is that oil production will follow this trend regardless of political / economic / etc. issues. Basically we're gonna pump it out and use it as fast as we can in the end. Some of the TOD filk will superciliously say it's a "logistic curve", but they're both just blobs on a graph, near as I can tell. It looks to me like the bell is just the first derivative of the logistic WRT time.

I was trying to explain this in a recent thread, and was duly corrected: Hubbert did not originate "Linearization"; it had been my impression that he did. Anyhoo, the linearization is a clever way of graphing the production curve so that the points (theoretically) fall along a straight line. Furthermore, as time passes and production continues, the estimate gets better (because there is more history [larger Q] in the later points on the graph).

The beauty of linearization is that it allows you to place a ruler on the graph, strike a line, and get an estimate of the URR for the stuff you're trying to predict.

But in the end, it's all just statistics and the actual URR will only be known in hindsight. Many of us have looked at the graphs put together by SS, Khebab, westexas, and others and concluded that peak is probably about now. Since it is a century-long bell curve, there may be as much as 5 - 10 years of uncertainty as to the actual location of the peak — check back in 2025 and we'll know for sure.

The hypothesis goes something like this: many natural phenomena follow a bell-shaped curve. I think there's a formal statement of this in the discipline of statistics.

It's hard to get a Normal distribution (i.e. Gaussian/Bell-shaped) from temporal causal phenomena such as oil discovery and production. Bell-shaped curves extend to infinity in both directions, and our minus infinity is not very long ago. I wish we could, but you can't really hand-wave this stuff away unless you consider the problem from first principles.

Of the things wrong with the HL/Gaussian approach, the fact that it erroneously predicts that the Romans would have used 1.5 molecules of hydrocarbon is the least of its problems :-)

1858 is the start as far as I am concerned. Up to that point, there was little active progress in oil exploration.


Petroleum, in some form or other, is not a substance new in the world's history. More than four thousand years ago, according to Herodotus and confirmed by Diodorus Siculus, asphalt was employed in the construction of the walls and towers of Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus.[10] Great quantities of it were found on the banks of the river Issus, one of the tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and lighting uses of petroleum in the upper levels of their society.

The first oil wells were drilled in China in the 4th century or earlier.[citation needed] They had depths of up to 243 meters and were drilled using bits attached to bamboo poles.[citation needed] The oil was burned to evaporate brine and produce salt. By the 10th century, extensive bamboo pipelines connected oil wells with salt springs. The ancient records of China and Japan are said to contain many allusions to the use of natural gas for lighting and heating. Petroleum was known as burning water in Japan in the 7th century.

It kinda suprised me.

Perhaps surprising history but oil (and NG) didn't become a displacing technology until later in the 19th century. Until then whale oil was used predominately for commercial use,

There must be some similar process or behavior at work in order for HL to produce similar outcomes in different oil provinces if that is what it is doing.

Yes, and I'm surprised there has been so little discussion of this so far on this site. On poster on the HL debate left a clue: creaming curves.

It appears from the empirical evidence that the sizes of oil fields in any oil province are distributed so that there are very few large fields and increasing numbers of increasingly smaller fields. Geologists can't demonstrate from physical laws why this must be so, nor can they give you a formula to predict the distribution, but still that's what the creaming curves tell us.

Given this fact, it is easy to see that simple economics will, in part, govern the history of oil production. All other things being equal (and I know they are not), production from a large field should be more profitable than a smaller field because the costs of exploration and development of a field can be amortized over more barrels of oil. That being the case, larger fields will tend to be developed before smaller fields.

Over time, as fields deplete and production declines, that decline must be offset by the development of an ever larger number of smaller fields, which decline more quickly and must be replaced at an increasing rate if production is to be expanded or even just maintained. At some point, the capacity, financial and technical, of the oil industry to add new production will fail to keep up with the required rate of development and production will peak and go into decline.

There is a hypothesis for you all to chew on.

Would there be any signifigant predictive signalling to be gleaned from the already known drastic reduction in EROEI of pumping Petroleum now as opposed to 60 years ago? It may well still be profitable at an 8:1 EnergyROI, but just the fact that it was not too long ago 100:1 or so seems to be a clear indicator that it takes a vast amount more labor and material than it ever did then to get the same product to our tanks, even WITH these much heralded improvements in technology, EOR, etc.. just better spatulas for scraping the bottom of the barrel.

Of course this continued profitability is not about the supply's continued VIABILITY, but the consumer's addiction/dependency such that he has to pay the ferryman to get over that brook every day.

One more bit on that..

Anyone know what the petrol EROEI was gauged at during the 70's oil crisis?

and above, "Clear Indicator" should have been 'Good reminder' or something..

I always seem to post when I'm exhausted.

to paraphrase Luis de Sousa " 1-Q/Qt is the fraction of the total oil left to produce, meaning that the capacity we have to produce oil at a given moment in time is linearly dependent on the amount of oil still available to produce"

or in other words oil production is analogous to radioactive decay. there is your hypothesis

For Prudhoe Bay look at this analysis:

Everything was put in place, and then they turned on the switch. That's what explains the deferred sudden increase that occurred a few years after discovery.


nrgyman2000 says,

"This would make abovground factors like economics “kick in” for expensive off shore production, tar sands (and possible some others), thus accelerating declines in production (reducing supply), leaving cheaper production (like within OPEC) economical, thus further shifting the supply power to the producers with low OPEX."

Good move, nrgyman2000! That exactly has been the crux of my argument for months here, and for 2 years previous to my discovering TOD. Discussion here at TOD and in other places (including Matthew Simmons excellent book, "Twilight In the Desert" have further convinced me that we must be VERY alert to an inverse effect, very close to the one you mention....It goes something like this:

In the massive price rise caused by the 1970's oil shocks, the Saudi's and Americans, through their ownership at the time in Aramco, had the money to go exploring, and in fact, were able to go producing, when in 1982, the bottom fell out of the oil price, due to a combination of recession/demand destruction, and an influx of non-OPEC oil from the North Sea, the Gulf of Mexico, Latin America (including Mexico), Africa and Canada (among others). Aramco was now completely owned by Saudi Arabia, who gained 100% of the company in 1980. It is fascinating that so many of the changes and confusions we are still discussing today center around 1980. In fact, a timeline of Aramco development, as seen on WIki, is of great interest, fascinating stuff, just in it's raw outlines:

Only 2 years after Saudi government purchase of Aramco, the Saudi's open EXPEC, The Exploration and Petroleum Engineering Center in Dhahran City, Saudi Arabia. As astounding as this may seem today, this was the first real attempt to train Saudi Arabians as technicians and engineers for the Saudi oil industry. Until 1980, the American owners really preferred to know more about Saudi Arabian oil than the Saudi's did. As we know, that has since changed.

So, picture the Saudi situation circa 1980: flush with money from the 1970's massive price spike in oil, but now facing decreasing revenue due to the rapidly collapsing oil price, and with a brand new educational facility and new knowledge about their own oil industry, and control of it, they could do one of two things:

(a) Turn on the taps and develop oil like crazy, at a cost of billions, and then essentially give it away, as they, the British, the Mexicans, and the other players undersold each other to the point of creating a collapse in the oil market price to idiotically low levels (it was already sliding in price further faster than in any period in known history), or,

(b) Out wait the competition, bide their time, let the Brits and Mexicans and others give their oil away, but turn down the taps on the greatest known oil reserves in the world, and spend their time learning, for the day when the oil would be needed....a "swing market" strategy, in which they could play the nice guys, the reliable supplier, smart, and respecting the world's need for "price and supply stability". But don't over deliver, don't undercut the price. The North Sea would hold the price down. Saudi Arabia could afford to wait for the greatest of all prizes. Does all of this sound familiar?

So what changed? Why the sudden price shocks, the run-up, the concern? What happened to the "nice guy" steady as she goes strategy?

Simple: The competitors started to peak: The big thorn in the Saudi side for years had been North Sea oil. Now, North Sea was peaking. The Brits and Norwegians could no longer flood the market when they chose, and undercut the Saudi's oil power. And now, Mexico. If the Mexicans cannot soon demonstrate that they are not at peak, the Saudi's can operate a type of de facto force majeure on the world. They essentially will have no serious competitors.

What they will have is the most well developed, well controlled, well disciplined oil and gas industry in the world. It is a staggering achievement. Look again at the Wiki article timeline for Aramco:

--1993 Saudi Aramco takes charge of Kingdom's domestic refining, marketing, distribution and joint-venture refining interests.
--1994 Maximum sustained crude-oil production capacity is returned to 10 million barrels (1,600,000 m³) per day. Company acquires a 40% equity interest in Petron, largest refiner in the Philippines.
--1995 Company completes a program to build 15 very large crude carriers. Saudi Aramco President and CEO Ali I. Al-Naimi is named the Kingdom's Minister of Petroleum and Mineral Resources, and Chairman of Saudi Aramco. Abdallah S. Jum'ah is named the CEO, President, and Director of Saudi Aramco.
--1998 Saudi Aramco, Texaco and Shell establish Motiva Enterprises LLC, a major refining and marketing joint venture in the southern and eastern United States. (the former "colony" buying the property of the colonizer!)
--1999 HRH Crown Prince 'Abd Allah inaugurates the Shaybah field in the Rub' al-Khali desert, one of the largest projects of its kind in the world goes on stream. The Dhahran-Riyadh-Qasim multi-product pipeline and the Ras Tanura Upgrade project are completed. The second Saudi Aramco-Mobil lubricating oil refinery (Luberef II) in Yanbu' commences operations.
--2005 Saudi Aramco and Sumitomo Chemical Co., Ltd. sign a joint venture agreement for the development of a large, integrated refining and petrochemical complex in the Red Sea town of Rabigh, on Saudi Arabia's west coast.

12 years of the most well orchastrated oil development in history. Now, Saudi offshore development continues unabated, and the Saudi's are returning to Khurais at a cost of hundred (s) of billions of dollars.
Return now to the quote from nrgyman2000's post at the opening of this post. The concern is that in a recession/depression, oil demand, and thus price could fall so fast it would drop the price of oil, destroying the demand for tar sand oil, deep offshore oil and possibly others, and "leaving cheaper production (like within OPEC) economical, thus further shifting the supply power to the producers with low OPEX."

The OPEC nations, and Saudi Arabia in particular, are COUNTING ON IT.
As the North Sea, Mexico and other competitors decline, the Saudi's are assuring us they can fill the gap. What if they can't? Well, that our problem, not theirs. The price goes up, they make huge amounts of money, and retain more and more control of the liquid fuel trade.

But, what if they can fill in the gap, and more? What if we make what would seem to be the most sensable assumption: The Saudi's know more about their oil system now, after 27 years of being able to manage it, to study it, building a complete petroleum university (EXPEC), and training their own technicians in the use of the best technology, than anyone in the world could possibly know about it. They have been able to play a waiting game. They know what they can produce, but MOST IMPORTANTLY, when it will benefit them most to produce it.

Picture it: just as the world petroleum demand goes down due to price, and alternatives such as ethanol, bio-Diesel, butanol, hybrid electric cars begin to really start to catch on, even though they cost more, and investment is finally made in deep sea oil, tar sands in a big way, expensive but needed coal to liquid or gas to liquid facilities.......Saudia Arabia starts to deliver bigtime. The price of oil, already set back due to recession created demand destruction, begins to drop further, and faster.

The government, as they are doing now with ethanol, tries to subsidize the alt fuel industries, gives tax breaks to the oil drillers, but, no help. The industries continue to cost more and more, trying to sell a product that is competing agains oil, which now costs less and less. Private investors begin to bail out of alt energy industries, alt fuels are seen as boondoggle. The Business press blares, "Green, Clean, and Broke: Does The End Of The Peak Scare Mean The End Of The Alt Fuel Bubble?"

The more ethanol, the more subsidized alternative fuel sold, the faster the governement loses money. Financially, it begins to bleed us to death. But, how can we cut loose industries which now provide a portion of America's fuel needs, even if more expensively than the flood of crude oil competition? If the alt fuels die, it gives absolute and full control of the liquid fuel industry to Saudi Arabia and a few other smaller players.

WE will have to decide, one way or the other. We will be trapped. And we will know that if we kill the alt fuels yet again, the prospect of ever getting them off the ground again will next to impossible. We will have shot our last shot, spent our last bullet. With a nation of aging people relient on others (family or professional medical and nursing assistance), we would not be able to change if we wanted to at this late point in the game. The Saudi's of course, would go on a buying spree. American land, farms, hotels, condos, would go into Saudi hands., They would diversify, own property, companies, whole luxury developments.

Somewhere around 2030, Saudi Arabia really begins to peak for the last time. They will still have at least 30 or 40 more years of good production left, but, this time, they will never be able to hurl tens of millions of barrels of oil at the market on short notice. They will not be able to act as "swing" procucer, but by then, no one will. But, it won't matter. The advances in high speed trains, hybrid and electric cars and hydrogen from solar will provide the birth of the new post carbon era, and possibly even nuclear fusion will be ready, filling our cities with light. Spacecraft will be working the moon and asteroids for minerals for fuel cells and batteries.

But, for the Americans, IT REALLY WON'T MATTER. We will have long ago sold our destiny and our future for the last of the oil fix. The Europeans, Japanese, and Chinese will be selling the solar panels and the fuel cells, the Germans and Dutch will be selling well developed solar to hydrogen systems, the ones we said could never be built, all over the world. As an influential power in the world, the United States will be called by many the Austro-Hungarian Empire of the new world.

The mosques will be being built in all the major cities. Our daughters-granddaughters will be learning the new dress code at school, and we will not protest, because for now, they are still being allowed to go to school. Our TV and radio will begin to grow more conservative. We will see more and more photos of Grenada and Seville, showing that a "correct and moral mix" of cultures can hold astounding beauty. The old men and women will smile softly....we recall that message, or one very much like it.....but it was so much easier to give than to recieve....

And as we leave this world, unsure about the fate of our offsprng, we will know that history moves very fast, and defeat deals with those who move slow.....we can only pray for a humane defeat for those who will think of themselves as culturally "American", in the century to come, and who knows, may be allowed to call themselves that, even in public, for many years. Why beat up on the beaten, surely, our new owners will feel that such a little allowence for pride sake is not so dangerous?

(Postscript: Am I saying it will go this way? No. But I am saying that we could be very, very surprised by what developes over the next 20 years.
And if Ghawar and Saudi Arabia have another 20 or 30 years of high output, I challenge someone to tell me how that is "good" news for America?
I am having serious and deep misgivings, and trying to decide:

Would America be better off if Saudi Arabia and the world were peaked, than to be lowered to serf status over decades by our thirst for oil, and our being bled to death by a flood of cheap Arabian oil? You decide. For me, I no longer care how much oil is in the world, or how cheap it can be. If Saudi Arabia will sell it for a dime a barrel, we should be looking for, developing, incorporating non oil methods that do not rely on a day to day government susidy)

Roger Conner

Remember, we are only one cubic mile from freedom

Naaa, the Saudi's are F*****D. They are drilling like bitches in heat already. Anyway give me that cubic mile or i'll whip you.


Actually Roger I did quite enjoy readingyou post, and the link. very interesting. You always appear to hold much faith in Aramco and what they could achieve.

Marco said,
"You always appear to hold much faith in Aramco and what they could achieve."

It is closer to the point to say that I have a great deal of respect for Aramco....but it's the kind of respect you have for an alert lion...I am very, very leery of what might be thier next move....:-)

(my real point was, however, were it to be so, how is a huge amount of Saudi oil good for America, in the long view? Our problem is we keep hoping against odds that we can stay on oil forever, all we have to do is find more....and we may find more, who knows.....I think we should start hoping and working like crazy to get off oil, not see it with dread ("oil's too high, shiit, I guess we have to try to find something else."), but instead as our only chance at real freedom ("if we can get off oil, we have our real chance at freedom, from the OPEC crowd, from the oil companies, from global warming, it can't be that hard, let's do it, and if oil gets cheap, let's do it just as a hobby, we waste money on everything else, why not on getting free from oil?")

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

We are up against the iron traingle and the most powerful lobby groups that have possibly ever existed who will go to great lengths to disinform the public.

My opinion is that the only way to achieve what you are suggesting [is not through continual grinding of our word] is a government coup started by a 'respected' media outlet that is willing to spill the beans. Bringing down the currnet regime and it's stranglehold on our society, IMO, is the only way it is going to happen.

Big brother will fight tooth and nail.


A temporary flooding of the market with cheap oil is not that hard to control, tax it. In USA you could pour the money into your budget deficit and post peak oil investments.

This were the response to falling oil prices in Sweden and manny european countries. But I dont think it were post peak oil planning, I suspect it were simple fiscal greed.

But the US govt won't do that. They would just put the money in the pockets of their cronies. Our govt is way too big for effectiveness and way to corrupt for meaningful change.

Hi Cheryl,

Thanks for your response. To back up your second sentence, there's a new book out- have you seen/heard of) it?
Blackwater: The Rise of the World's Most Powerful Mercenary Army by Jeremy Scahill. I believe he's been interviewed on "Democracy Now" www.democracynow.org, and "Connect the Dots" (KPFK 98.7FM). (but if I try to look it up, I'll lose my place.) Jeremy says the number of Blackwater persons in Iraq is equal to the number of US military persons, if I recall correctly. And then there's the proposals for Blackwater to operate in the US. All scary stuff.

re: "corrupt". Well, all 300 + million of us can't be too corrupt, can we? There are a lot of people trying very hard to make meaningful change. Very hard. Some succeed.

That article reflects the level to which debunkers of peak oil are going. Try to get people to fear the exact opposite of what's happening. It's like a "Hey, look over there", and ripping you off while you look. Saudi Arabia is in pretty dramatic production decline. Period. They are not magically storing huge amounts of oil to flood the market. Anybody that would even think this hasn't a clue.

Hello Magnus, you wrote

A temporary flooding of the market with cheap oil is not that hard to control, tax it. In USA you could pour the money into your budget deficit and post peak oil investments.

Taxation would (in theory) reduce consumption within oil importing countries. This in turn would lower demand, thus further putting a downward pressure on oil prices, assuming a situation with supply surpluses.

I think it is important to be aware of that as of 2005 approximately 64 % of the global net oil exports capacity was controlled by OPEC, and its share is set to increase in the future.

Taxation would drive down demand which could drive down oil prices and brings forward in time the point where expensive production (like deep water, tar sands, GTL etc.) oil production outside of OPEC becomes uneconomical, which reduces supply and reintroduces an upward pressure on oil prices as demand and supplies approaches an equilibrium.

This could result in that a larger portion of the global net oil exports became controlled by OPEC.

Is this a situation that should be desired?

I think high oil prices is a good thing, as it also gives incentives for important diversification of supply sources.

I understand ThatsItImout, that the point he strives to make is that even if developments in SA production and the true size of SA remaining recoverable reserves are important and useful to know and continue to keep an eye on, Peak Oil marks a milestone which hands BIG producers, like SA, a new set of opportunities which can be hard to predict the outcome from. In such a context a decline in SA production of 1 Mb/d is not what is to be feared most, but rather that SA (assuming they are aware of Peak Oil) looks upon this as an opportunity which they patiently have waited for a long time.


Consumers dont care what part of the price is tax or producer revenue. If you were right and taxation during falling prices would make the producers price fall even more then raise the tax even more. The objective is to avoid expansion of oil use and support oil replacement industries, its not about being nice to the oil producers flooding the market.

If this postpones oil production into the future we will get a peak closer in time with a slower decline.

I can add that high oil taxation while crude prices are low propably give a feeling of invoulnerability to higher oil prices. This is true for an idividual consumer if taxes are lowered as prices get higher. But the total situation is worse since the taxation in reality is a way to move economical power to the state, it can still use the money for other projects minus the usual inefficiency in a state bueraucracy. If crude prices get higher this economical margin disappears and can neither be use by the state or individuals. In the peak oil times with real competition between the producers these resources go to expansion of the oil extraction and refining industries as it gets harder to get the oil out of the ground and refine it.

Taxation is not a solution to peak oil but it is a somewhat brutal way to rearrange a societies priorities. Myself I am happy about having had high fuel taxes for about two decades, two years ago I hated it.


Let us try to agree on the principle that increased prices tend to lower demand (consumption) for a product, independent of the reason for the price increase. I am aware that oil demand in industrialized economies is inelastic within a range of prices.

People care about energy prices, and you are probably aware that in Norway gas is sold at what amounts to approximately $7,00 /gallon. If gas prices increases with $0,50 /gallon in Norway it generates a public outcry and the debates (in Norway) then focuses on the levels of taxation.

My point, any government trying to increase taxation on fuel, regardless of present price level, will generate a lot of public heat.

My other point (although not clearly stated) is that we are close to (or may even have passed) peak. Solutions that were effective on the way up to the peak, may not be effective on the way down. In other words we really don’t know how the game will play out post peak as we have no previous experience. I am not convinced that by extrapolating the pre peak solutions to a post peak environment is the way to mitigate peak oil.

I am not convinced to resorting to a solution that now intuitively may seem right. You need to do a “causes and effects” analysis before introducing mitigating solutions.

I also question the wisdom of increased taxation in a post peak environment as this also would affect alternative supply sources and could give a group of countries (a cartel) increased control of supplies.

There was a reason for me to show that OPEC in 2005 controlled 64 % of the global net oil export capacities, and their share grows (with Angola recently becoming a member) and will grow into the future.

Magnus, please reread my post, and I will for your convenience repeat my question subject increased control of the worlds oil flow to a cartel;

Is this a situation that should be desired?


Regarding oil cartels we are already sensitive to such and most countries need to bow towards Russia and Saudi Arabia with neighbours. But depending on local resources and efficiency in turning raw materials into valuble things and services not everybody need to bow as deep.

The given scenario were Saudi Arabia having enough unused spare capacity to flood the market for a few years with the intent of killing investments in efficiency and competing fossil and renewable fuel production.

In such a scenario fuel prices will be falling and taxation can be introduced that absorbes the fall in fuel prices. You can call it am enviromental or CO2 tax to get some public approval. Or the falling fuel prices can fuel an economical boom in car use, car services and car adapted infrastructure wich taken to its extreme makes the running of a society very dependant on cheap fuel.

Another idea is that this has already happened.

The important part is probably how a society build its infrastructure. If it builds flexibility to live with small ammounts of car transportation and with high energy efficiency or not. This kind of investments takes decades and if a sudden crisis happens you have to do the best with what you already got.

This makes me optimistic about my own country and European neighbours and it seems to make manny US citizens on the oil drum pessimistic. I think you are too pesimistic since you have a vast civil construction industry that could do enourmous ammounts of work within a few years and your population is much more accustomed to move around to get jobs. You have the physical ability to do a lot, you only have to, well, do it.

The desired situation is to have most of your countries population in beutiful towns where bicycling, car traffic and public transportation works in parallell and use the best or good technology in all sectors of society. Then it is very good to have local biomass, hydro and so on. Those who dont have that will be even more dependant on efficiency and high tech such as nuclear power to make themselves into attractive trading partners.

I think we are halfway there where I live, another two decades of investments and most will be built and updated to at least todays state of the art. I find this much more important then worrying about cartel creation that I anyway cant influence and my country have no jurisdiction about it, even EU cant do much about it. Investments that are significant for me and my neighbours can be initiated on municipiality level and even more can be done by large corporations and by the state while we cant do anything about the cartles on any level.

I would rather try to figure out if we can get the cartels to invest locally. The Swedish located refineries that are foreign owned by these dreaded corporations are being reoriented from the local market to the export market as mostly the heating oil market disappears. Wonder if there is anything we can do to support such investments since it is nice to have this industry here creating jobs, constructive international relations and supply security.

Hi NGM2,

This is an interesting comment, thanks.

re: "You need to do a “causes and effects” analysis before introducing mitigating solutions."

I'm wondering if you've done any thinking on this...? Or, if you might want to...and share w. us. Do you have specific examples in mind?

Hello ThatsItImout,

This is interesting (I am also impressed by the size of your post). I also believe there is more to what is happening within OPEC than just monitoring production developments (which of course also is useful and important).

If it is that OPEC are aware of Peak Oil, I think it could be a useful exercise and an educational debate to try to understand how that could shift the scales and also increasingly become a political factor. I read somewhere that during the oil embargo of 1973 the Arabs were aware of that US had peaked. Anyone who can confirm?

I reread a recent presentation by Dr Shokri Ghanem (inspired by your post, Roger) and have attached some snippets from said presentation (I’m sorry I don’t have a link, I have the presentation in pdf-format.) You may read and judge by your own.

From the 27th Oil & Money Conference in 2006 and the presentation by its guest of honour “Is the era of cheap oil really over?” by Dr Shokri Ghanem, Chairman of the People’s Committee, the National Oil Corporation (NOC) of Libya and former Director of the Research Division at the OPEC Secretariat in Vienna.

Dr Shokri Ghanem ceartinly possess an impressive knowledge about the oil and energy industry.

“The question of Peak Oil” The question of peak oil output, which once was the concern of few individuals, has become a concern of some countries, as well as several organizations. Despite the fact that many are unhappy with Hubbert’s peak oil predictions, his 1970 peak oil theory for the US turned out to be quite accurate, and for many, particularly the pessimists, his end-of-the-century peak oil predictions for the world also proved to be correct”

However, while some of the more pessimistic oil specialists are declaring that peak oil has already been passed, or at its best is here now, others believe it is not going to arrive before 2010. Some optimists give the world a little more breathing space – that is to say up to 2020, and perhaps even up to 2030. However, all in all, most would appear to agree that peak oil output is not very far away for all of us. It could take place sometime within the next decade or so, which in fact means that there is not much time left for a world economy to be driven largely by oil.

Furthermore, under any of these scenarios, and since peak oil output is not about the time at which oil will run out, but the time at which production can no longer be increased demand, it seems the only way the oil price can go is up.

This conclusion seems to be in line with the view held by the peak oil output advocates who argue that the ongoing oil price rises are mainly due to supply-demand imbalances. This is because we are at, or near, the production peak of world oil, if not on the downward slope of Hubbert’s peak curve. This is not to deny the role of other factors (such as geopolitical), but only to stress the importance of supply and demand for crude oil as the prime factor in determining the price of the commodity.”

… a bit further in the presentation

“The future of oil prices” ”Some analysts now say that nothing short of a major worldwide economic recession in the major consuming markets can turn down the price of oil. So, what can we conclude from this? First, it is highly likely that $20/b or even $30/b oil is a thing of the past.

Second, if current supply-demand imbalances, both for crude oil and refined petroleum products, persist
- and there is no reason for this situation not to persist
- then one can only conclude that a return to $40-50/b seems quite unlikely. Even though there are some who would still disagree and would hope to see the price of oil falling – even below $40/b – they also say that the history of the oil industry is characterized by volatile changes in price.

Third, $70/b plus oil may be quite likely if the world economy continues to grow at the rates experienced in 2004 and 2005. These rates may cause demand for oil to increase proportionally and it may even start to exceed available supply.

If the tensions seen in so many areas of the world, especially the Middle East, are not reduced and disrupt some supplies, a noticeable gap in supply and demand will occur earlier than the revised Hubbert-type analysis would suggest….

Based on the previous conclusions, although there are, of course, some negative consequences of persistent high oil prices and the end of the era of cheap oil, there are also a number of positive consequences, or more appropriately “opportunities” that arise. High oil prices can lead to, first and foremost, more aggressive exploration and production policies by the major international oil companies, as well as the national governments of the oil producing countries. However, the pursuit of such policies entails monumental financial commitment of the type required by truly enlarged exploration and production programmes.

It is an impressive presentation that reveals that Dr Shokri Ghanem has a superb understanding of renewables, conservation and nuclear and the challenges with the tar sands and oil shale.

OPEC expands it numbers of members, Angola have become a member and Ecuador is considering rejoining (it was said somewhere they never actually left).

During a recent visit to Libya by, among others, the Norwegian Minister of Oil and Energy (MOE), it was reported in media that Dr Shokri Ghanem made the Norwegian MOE aware that he (Dr Shokri Ghanem) knew Norwegian oil production peaked several years ago (in 2001).

Does this reveal the outlines of a pattern or/and a strategy?

Seems like OPEC is keeping a watchful eye on the competition, but what are their real intentions? What are their strategies ?

NGM2 (in Norway)

Hi NGM2, (in Norway),

Thanks so much for posting this. It's really intresting. I'm wondering, since you have the PDF - is there a website where you might post it, w. link? Or some way you might perhaps be able to send it to the TOD editors (or even to me) and they add it to the archives? Or, perhaps to Energy Bulletin? It would be nice to have the entire presentation available.

What is the "Oil and Money" conference?

I'm also wondering, re: "What are their strategies ?"
Well, this presumes they might have agreement on goals, not to mention strategies. I would tend to question this.

Still, do you have an answer (or thoughts about answer?)

That remains my fear too - that the Middle East is holding back production capacity and will be able to flood the markets if alternatives to Crude Oil gain some threshold market-share.


According to BP Statistical Review 2006 OPEC controlled 75 % of the global oil reserves, 42 % of the global oil production and MOST IMPORTANTLY approximately 64 % of the global net oil exports capacity in 2005.

Since 2005 Angola has joined and Ecuador is considering rejoining OPEC.


After some time with supply driven price increases on oil (and other energy), the major industrialized economies enter into a recession that gradually develops into a severe depression.

This economical downturn lowers demand for oil and puts a downward pressure on oil prices that gradually declines towards the $30 - 40/b range (a cartel that controls two thirds of the worlds net oil export capacities, could use this opportunity to weaken their competition, and thus increase their relative share of the market thus strengthening the cartel and maximize the profitability of the products (being a non renewable resource) from the cartel in the long term. A low price would influence oil developments requiring such prices as a minimum of $30 - 40/b range to become economical robust, or developments in a late state of production (tail end) requiring an oil price say in the $30 - 40/b range to break even or as a minimum to recover OPEX (operational expenses).

A cartel could seize upon such an opportunity and if it has the capacities (and will) to control the prices and reduce incentives for exploration and developments of alternative supply sources from competitors. This would after some time increase their iron grip on the importers (by reducing or slowing development of alternatives) and put them in a position where they may become selective of customers, set prices, or attaches other requirements to customers etc. being aware of the oils importance for the economies of their customers.



You give OPEC far too much credit
This assumes the OPEC cartel is a real cartel.
OPEC is a bunch of countries desperate to keep domestic strife in check by using oil revenue.
All of OPEC is pumping flat out

From Bloomberg;
March 26 (Bloomberg) -- Saudi Arabia is shipping less oil to customers. OPEC by February reduced daily output by 1 million barrels. Global inventories this year fell the most in a decade.
Credit Ali al-Naimi, oil minister of Saudi Arabia, the world's largest exporter, who told OPEC members that production cuts would stop a six-month decline in oil. Crude this year rebounded 26 percent from a 20-month low to $62.81 a barrel.
``We are happy with the level of compliance,'' Mohamed al- Hamli, president of the Organization of Petroleum Exporting Countries, said in an interview in Bangkok on March 22.
OPEC's unity may keep oil from dropping below $50 a barrel for years to come, energy experts say. While global demand, supply disruptions in Nigeria and concern about a conflict with Iran contribute to higher energy costs, the 12-nation consortium's decision to pump less oil underpins crude prices.
``They've learned their lessons,'' said Daniel Yergin, author of the Pulitzer-winning history of the oil industry, ``The Prize: The Epic Quest for Oil, Money & Power.'' ``They like this band from $50 to $60 and they prefer the upper part of the band rather than the lower part,'' he said in a March 22 interview in Washington. ``They've been pretty effective.''

Does the above support your views polytropos?

polytropos, you should be worried....very WORRIED?


this is classic American conspiracy theory - applied to oil
why are all the american enemies sly cunning and devious?
they patiently wait for years for the americans to fall into their carefully constructed trap

its been applied to the japanese, the germans, the russians, the cubans the "enemy du jour"

you know - I think the Africans are just pretending to be screwed up - to lull us into a false sense of security. All the slaves we thought we "captured" and brought to the new world - really sleeper cells - just waiting...


"Australia's largest city will be plunged into darkness for an hour on Saturday in an attempt at a world first blackout to raise awareness of global warming, organisers say. A successful switch-off could then be copied by major cities around the world in a drive to reduce the greenhouse gas emissions blamed for climate change..."

As in, this could become a common occurence?
I notice Peak Oil and energy concern is not the issue...

"You can never solve a problem on the level on which it was created."
Albert Einstein

Instead of raising awareness I think they are going to find out that there are a lot of people who ignore politics until the lights go out -- and then they get really upset. The rolling blackouts in the early 2000s in California -- largely being the cause of the ouster of Gray Davis -- are a perfect example. A one hour blackout may not be a big deal normally but that it was done as a political stunt is going to rub a lot of people the wrong way.

In today's WaPo:

Corn Can't Solve Our Problem


The world has come full circle. A century ago our first transportation biofuels -- the hay and oats fed to our horses -- were replaced by gasoline. Today, ethanol from corn and biodiesel from soybeans have begun edging out gasoline and diesel.

This has been hailed as an overwhelmingly positive development that will help us reduce the threat of climate change and ease our dependence on foreign oil. In political circles, ethanol is the flavor of the day, and presidential candidates have been cycling through Iowa extolling its benefits. Lost in the ethanol-induced euphoria, however, is the fact that three of our most fundamental needs -- food, energy, and a livable and sustainable environment -- are now in direct conflict. Moreover, our recent analyses of the full costs and benefits of various biofuels, performed at the University of Minnesota, present a markedly different and more nuanced picture than has been heard on the campaign trail.

Actually, it was Friday's WaPo. ;-)

The prairie grass stuff was kind of interesting. Though I wonder how it would hold up to harvesting year after year. A lot of the switchgrass studies have that flaw. Switchgrass grown as pasture, or for a few years as a research project, is not the same thing as harvesting it for biofuels year after year after year.

There's a post in the archives where someone looked at that. Bottom line was, if you used marginal land the yield was going to be marginal too. If you used good land with irrigation and fertilizer it would be better than corn, but not an order of magnitude or anything.

I haven't seen any studies myself but I would think that switchgrass and other prairie grasses would be easier to grow year after year. They don't require fertilizer and most of the nutrients retreat to the roots at regular intervals which makes it easy to know when to harvest. They also handle water better than corn.

If you find any studies, please post them because I would expect plants that evolved on the prairies to be well suited to those conditions.

Well, here's the post:


It's not a lab study, but he seems to know what he was talking about as far as agriculture.

Since someone's putting my name up here...

A few random thoughts about ethanol (and biomass ethanol);

1) In 2006, ethanol went from being 2.6% to 3.2% of our gasoline supply by volume. Fleet miles per gallon went from 21.3 mpg to 21.2 mpg, i.e., declined by 0.4%. While I realize there are many factors determining fleet mileage, if ethanol is the primary culprit in this reduction it suggests that we really need something like 3 gallons of ethanol to displace one gallon of gasoline, rather than the 1.5 gallons to replace 1 gallon of gasoline usually quoted. This result surprised me, as I thought that fleet fuel mileage would have increased in 2006 due to the trend away from SUVs, etc. for new car purchases.

2) A number of sources have suggested that the minimum size for a successful biomass-to-ethanol plant is 100 million gallons per year, or roughly 6500 barrels of ethanol per day. One ton of biomass generates roughly 2 barrels of ethanol, so that is equivalent to 3250 tons of biomass per day. One semi truck can carry roughly 10 tons of biomass (about 30 of those big round bales people may have seen), so that level will require 325 truck loads per day. Over an 8 hour day (reasonable, as no one wants to be loading hay at night, and we're talking winter in the midwest), that means a truck will arrive at the ethanol plant every 2 minutes. Assuming 3 trips/truck per day, which might be a bit high, that means each plant will require 100 biomass delivery trucks, and probably 2-3 times that number of workers (driver plus loading help). Wait - the actual number would probably be somewhat more than that, as the "ethanol poo" would have to be trucked away as well. For reference, a 100 million gallon corn ethanol plant employs about 40 people. Corn delivery by rail (easy), corn storage (easy), distiller's grain removal (easy). Biomass delivery (hard and labor intensive), biomass storage (messy and difficult), by-product removal (messy and difficult).

3) The article mentioned roadsides in addition to conservation reserve lands (CRP) as a possible source for hay/biomass. One square mile of farmland will have roughly 15 acres in roadside/ditch associated with it. Assuming 5 tons/acre biomass yield, our 100 million gallon biomass plant will need the roadsides of 50 square miles of land per day. The yearly average one-way truck trip to pick up that biomass for our 100 million gallon plant would be something on the order of 75 miles (counting the fact that country roads do not run straight!). Trucking would burn up pretty close to 20% of the energy created by the ethanol plant itself.

How about we just pay people to conserve energy? It'd be alot easier...

One idea for wild harvested biomass is to render it onsite via skidmounted pyrolysis plants dotted around a region. The liquid goo can be taken away in a tanker truck for refining at a central location. Some charcoal can be returned to the local soil. This saves a huge effort and anxiety about crop cultivation. The costs need to come down but it takes us back to our hunter-gatherer roots.

One semi truck can carry roughly 10 tons of biomass (about 30 of those big round bales people may have seen), so that level will require 325 truck loads per day.

Which is why on-site processing is going to have to be the successful design is going to have to allow not only 'local' processing, but also easy to use, and somehow powered by reneewable energy.

How to make such devices easy to clean, easy to feed, and cheap enough to be cash positive quickly are the engineering challenges I've yet to see addressed. I can backyard a 55 gallon drum and a heilostat, but that unit doesn't capture the out gassing.

Not to mention such a system would keep the micro and macro elements from the soil would be return TO the soil where it came from.

How about we just pay people to conserve energy?
Already being done in many markets.

And, of course, the perfection of the invisible hand will make sure all is OK. *wink*

Impossible. Moving a mobile processing plant to sites spread out over 50 square miles is less feasible than trucking to a central location. And you will not have the water and air treatment to meet emission standards.

I'd tip pyrolysis to increase about as fast as corn ethanol shrinks under PO and GW. Here's a couple of players
Down the track maybe it could team up with Purdue's solar hydrogenation concept

Moving a mobile processing plant

I never envisioned a mobile plant model, due to the cost issues of mobility.

Mobility is addressed by a low-cost equipment model.

But many of people who are busy pimping for the bio-fuels via pryolosis method are also trying to sell how a 100+ psi pressure vessel is a good plan, and how putting the ash/char back on the land is not an issue.


There is a poster in yesterdays drumbeat who appears to be posting merely to rile people up (i.e. no worthwhile info, copious personal insults, and many posts sequentially). The name is THX_1138. What's the most appropriate way to relay this type of info in the future? You can delete this post once you're done with it.

I think that was our old pal Oil_CEO. Posting while intoxicated, probably. Everyone did the right thing by ignoring him.

At least switchgrass is a perennial with deep roots. Unless they were dumb enough to hybridize it to profit from the seed, as in GM corn, it would not have to be planted every year and enough seed would fall to replenish plants that fail.

I have a patch of switchgrass and indian grass growing in my yard and it is certainly hardy!

It might have appeared online on Friday, but it was in the dead tree edition that I picked up off the doorstep this morning :-).

If you read the David Tilman study closely, those test plots were harvested every year and the biomass increased. The biggest increase was on the plots with the highest plant diversity.
The link one more time.

It was only ten years, though.

I have 160 acres very similar to the composition (16 species) in the Tilman Study, planted in 1993 and the quality and quantity of biomass gets better every year. I have said before, for a sustainable biomass production, a rotation should be put in place (harvest 1/2 or 2/3 each year) and the diverse native prairie will produce indefinitely. All this can be done without chemicals or fertilization, I use neither.

I would think eventually, some nutrients would have to be added back in.

Might be worth burning for heat, like they do in Europe. I don't see this as replacing ethanol, though, for the reasons Kyle says. Not to mention that thing about cellulosic ethanol being a technical challenge similar to that of nuclear fusion.

The rich soils of the tallgrass prairie region are a result of thousands of years being prairie. Yes the biomass can be pelletized and burned, about 16 million btu's per ton, same as hardwood. The cellulosic breakdown puzzle is a good one and much research is being undertaken. In MN we have a Bio-energy Initiatives Bill moving forward, SF 480 and HF 589. Is ethanol, butanol going to replace the current consumption of gasoline, no but it may provide fuel for food production and the occasional Sunday drive.

The rich soils of the tallgrass prairie region are a result of thousands of years being prairie.

Yeah, but nobody was removing the grasses. They lived and died there, and the nutrients went back to the soil. Or they were eaten, and the nutrients deposited not far away.

I think local use is the key, which may mean the best use would be to power farm equipment.

Having productive land will be an increasingly valuable asset (Think the TV show Bonanza). The fuel (biomass) that can be produced on the farm may not power the US fleet, that's OK as this is our undoing from a GW perspective. More and more as fossil fuel resources become scarce and expensive, farm based fuels may be the only game in town.

Lovely, it becomes clearer every day, that so called CLEAN COAL is just garbage.

You better hope you're wrong, because the thousands of existing coal power plants will be your doom otherwise.

In that sense, we are indeed doomed. Even if sequestration technology is developed, and even if it is deployed (by decree), there is no question that using it will be very expensive, using a significant portion of the power output of a power plant. And a sequestration scheme tacked on to an existing plant is optional in its operation. So when push comes to shove, when people are whining about the cost of electricity, and there are rolling blackouts due to insufficient supply, why would the power producers not shut off the sequestration? Who would enforce it?

Beats me. What I would do right now is start equipping every coal steam plant and IGCC unit with solar collectors and wind turbines. The solar collectors would preheat the working fluids and reduce the amount of fuel required for the power plant, thereby less CO2. The wind turbines would direct drive compressors and be dedicated to CO2 sequestration, using underground aquifiers. Sure they would be intermittent, but half the CO2 sequestered would be better than none. At some point you could use the compression equipment to infuse CO2 in algae ponds, if they ever work out.

From home to house of cards: Subprime bust hammers families

When subprime lenders sell mortgages, they sign contracts promising that loans will meet certain standards and performance measures. Otherwise, the lenders are obligated to take the loans back.

Sebring found a buyer — just as Wall Street began taking notice of the spike in foreclosures and the resulting squeeze on lenders. The deal fell through and the next morning executives at what had been one of Dallas' fastest growing companies gathered their 325 employees to announce they were shutting down.

That would be no big deal if it were only the tale of a single company. But in recent months, more than two dozen subprime lenders have stumbled or failed.

The question now is just how many more bad loans like the Snearys' are still out there — and who will be left holding the bag.

More notes from the housing bubble:


(interesting choice of URL by somebody at AP or Yahoo? Compare with the title linked by Leanan. The visible article title in this case is "Group meets in shadow of foreclosures")

On a Wednesday morning, 30 people ... pack a small classroom in the basement of the Adams County Housing Authority, northeast of Denver. They are here because foreclosure is close behind. A new group has filled the room every two weeks since July.

"This is about choices and sacrifices," housing counselor MaryEllen De Los Santos tells them. "Ask yourself continuously, `Do I want to keep my house?'"

De Los Santos is no fan of lenders who sign people to mortgages they can't afford. But, she tells homeowners, responsibility also falls on them. Talking to dozens of families has convinced her of that. ...

Stout's best hope is a "short sale," where a lender approves a sale for less than the value of a loan, taking a loss but avoiding the time and expense of foreclosure. The homeowner keeps a foreclosure off their record, giving them a chance to start over.

The problem is that there are way too many homes for sale and way too few buyers.

Not far from Stout's home, real estate agent Bill Thornton threads through subdivisions, pointing out all the homes sitting dark. "Price Reduced," a real estate sign in one yard says. "I'm Gorgeous," says a sign on another. Some have "No Trespassing" signs taped to the living room windows.

"If you eyeball it and it's empty," Thornton says, "it's usually either foreclosure or bankruptcy."

The housing situation seems to me to be the most unevenly reported story I have read in a long time. For every article like the one you posted Leanan, there is one like this:

U.S. Economy: Existing Home Sales Surge in February (Update3)

Purchases increased 3.9 percent in February to an annual rate of 6.69 million, the National Association of Realtors said today in Washington. Sales have risen in each of the past three months, a streak not matched since April 2004 in the midst of the five-year housing boom.

``We expect the drag on the economy from housing will be gone by mid-year,'' said Dean Maki, chief U.S. economist at Barclays Capital in New York. The rebound in sales is ``an important development.''

It seems like this is more a scandal about a segment of the market, the borrowers of subprime loans, that never should have received loans in the first place set against a backdrop of a thriving housing market.

That is a typical prime example of how misleading American journalism has become. I don't know where you got this, your link is dead, but Bloomberg reported on the same numbers Friday:

Home Resales in U.S. Rise 3.9%, Most in Three Years

Sales of previously owned homes in the U.S. unexpectedly rose 3.9 percent in February, the biggest monthly gain in almost three years, a sign the housing market is recovering even as lending standards tighten.

Purchases increased last month to an annual rate of 6.69 million, from 6.44 million in January, the National Association of Realtors said today in Washington.

Sales were down 3.6 percent from a year earlier.

The report, together with a gain in February housing starts reported this week, bolsters the view that housing will gradually stop being a drag on economic growth. Falling prices and low borrowing costs are supporting demand, easing concern that defaults on subprime mortgages will worsen the glut of homes, economists said.

It looks good, that rise, doesn't it? But all it means is that more homes were sold in February than in January. Year over year, sales are down. Still, that is not the headline, for some reason.

What this will do is draw yet another batch of ignorant suckers into the market, and in debt. As someone said earlier this week: "Only an idiot would buy a house today". Well, we have a country full of them.

If you need falling prices to support your market, you have a big problem, because falling prices get a whole lot of people in trouble. What would the geniuses who come up with this utter nonsense suggest we do next to prop up the business? Prices would have to keep falling, don't you think?

The housing market recovers because prices are falling?

Sales have risen in each of the past three months

I find the way they report such things to be very misleading. When they say "february sales are up X %" they mean relative to february 2006, not january 2007. The "3 months" increase does not mean sales went up in each month relative to the previous month, just that the sales in the quarter were higher than in the quarter a year earlier. I would much prefer they compare with the previous month. (There is a strong seasonality to house sales, so they can do a seasonal correction before comparing with the previous month.)

In this case they are reporting units (houses) sold, that too is different from most economic reporting. Usually we only hear about dollars of sales, which has its problems too. (E.g. the ludicrous rumors that the USA is now a net importer of food - that may be true for dollars, but certainly not for calories!) But the housing industry is trying to keep its own spirits up by reporting the higher number of houses sold. The same report usually also mentions that the price of each house has meanwhile declined.

Also would be nice to know the distribution of house prices -- and sizes. Reporting just an average or median is not enough. Is it the cheaper, or the smaller, houses that are now selling? How does the distributions of house sizes and prices sold compare to the distributions of house sizes and asking prices in the total for-sale pool?

It would also be informative to know the breakdown of these sales in terms of principle residences vs investment or vacation homes. Serfdom begins when more people become dependent on the "owners" - land owners, business owners, capital owners, water rights owners, energy owners...

Yea, I saw that too. You can report it any way you like it would appear. This is a link to a really nice chart. While reported sales increased vrs. january the increase in homes available for sale increased at an even greater clip. This chart should scare you...

Now the nextlink is for the chart they quote "sales rising 3.9%". Funny thing sales are down compared to the last 2 years during february.

Take the time to link to these and look, or look at the mainpage listed below(even better)- the charts are on the front down a ways. If you ever think the media has your interests at heart this will fire you up.
Housing sales increased-truth but only in the context that they use....smoke and mirrors...
I reccomend reading the site these came from

Over on Econbrowser website, Prof. Hamilton continues his discussion about housing:
with some interesting reader comments too.

The Prof. makes the point that the fundamentals, especially unemployment, are still paramount in understanding housing.

RE: Unemployment...
I found this chart posted over on W & G. It is an unemployment chart. What stuck me as VERY, VERY interesting is not what most people would see in this. There is a gradual curve downward in unemployment from each "recovery" followed by a sharp almost vertical rise in unemployment during a recession.

This chart would show that we should be very concerned by low unemployment. The lowest point of unemployment appears right before the next recession in most cases. Look and see for yourself.



Look at this one for a updated scorecard on the lenders that went out of business.

It was twenty something when I first found the site in Jan.


Here are some others for this subject.



So Ohio is going to bail out (some) subprime by issuing bonds and who will bail out those bonds if they need it - Helicopter Ben?
I wonder who they are bailing out and thier political ties..

Via Econbrowser I found the following report on the subprime loan situation very interesting:


(Readable Google cache here.)

"Assessing subprime lending from 1998-2004, CRL reports in Losing Ground that refinance loans were a majority of all subprime originations.

"A survey published in Housing Policy Debate in 2004 by staff from Opinion Research Corporation, Freddie Mac, and Equitec revealed that only 14.2% of subprime borrowers reported taking their loan to purchase a first home."

This is a big unreported part of this story! Most subprime loans are refinances and are not loans to purchase homes. Yet time after time I read these sob stories about people who are "victimized" by "predatory lenders" and it's always about people who have bought homes. Readers should be aware that this is a small part of the picture.

In other words, subprime loans have mostly been used by homeowners who wanted to dip into the piggy bank of their rising equity. That doesn't present quite as sympathetic a "victim" picture so we don't hear about it so much. But that's the true story of what's going on here.

It means that the crackdown in the subprime market won't by itself do that much to reduce demand for new homes, because most home buyers are not using subprime loans. It's still a concern for people who are being foreclosed on, it doesn't matter that the reason is they got too greedy in terms of wanting to cash in their home equity. They lose their homes no matter the reason, and if more and more of those homes go on the market at fire sale prices, it will depress everyone's house values. But people should be aware that the effect is mostly on the supply side, not so much on the demand side. The absence of subprime loans won't curb demand much.

I'd guess they wanted the cash to pay down their credit card debt.

Peak Oil Bluepers #2



Oh my...pretty funny, but let's not crack open that can again...pleeeeaaaasseeee!!! Things seem to have settled somewhat.


Okay, please help the acronym impaired...

Rolling On The Floor Laughing My Ass Off.

Mahalo Cid!

'O wau no me ka mahalo.

We often talk here about a near future in the USA that would include a shrinking economy along with increasing inequality, leading to a "neofeudalism". But how will people react? Will a century of political freedom and a strong middle class be forgotten? One subquestion is how will labor unions fare:


On a frigid winter afternoon, scores of people stood shoulder-to-shoulder on Cincinnati's downtown Fountain Square, to chant, cheer, give speeches and wave placards and banners in support of better economic opportunity and union rights.

Linda Watson, a janitor, told of life at minimum wage, depending on a bus for transportation, lacking coverage to pay for medicine, hoping that becoming unionized could help. ...

Mark Weaver, a veteran Columbus-based Republican strategist, said that while unions remain effective at mobilizing their voters, they are being eclipsed in political importance.

"One thing that we know is that 40 years ago, labor unions were the Tyrannosaurus Rex of politics," he said. "Today, they are a smaller, less-dangerous dinosaur. Whether they'll soon be extinct remains to be seen."

A half century ago, about a third of American workers were members of unions. Federal labor statistics show that's down to 12 percent, after a loss last year of more than 325,000 workers from union ranks.

The fall has been most pronounced in the industrial Midwest, where hundreds of thousands of union jobs have disappeared and unions in states such as Indiana and Ohio have seen double-digit percentage drops in membership over the last two decades. ...

Spotty health care protection and crumbling pensions are concerns for many Americans and issues that labor frequently cites as proof of the continuing need for unions. Some union leaders say they offer companies dedicated, skilled workers, and are adjusting to today's realities by agreeing to flexible work rules and other measures to cut costs and increase productivity. ...

- note the reference to "depending on a bus for transportation" as the yardstick of poverty. So will conditions where gobalization is contracting and agricultural labor increasing be conducive to more labor organizing, or a further slide towards feudalism?

Yeah, well I've mentioned the post-democratic society a few times so I'll take up the challange so to speak. This is vast and complicated subject, so I'll be simplifying a lot here.

Some form of fuedalism would appear to be a reasonable model for a post-carbon world where energy surplies are severely constrained. I've been speculating that there is a renewable, large scale, form of energy available to us in spectacular quantities and in our type of society it remains untapped. All that might change in the future. I'm talking about slave labour, or the muscles of peasants.

Now, admittedly, this sounds pretty far out at the moment, yet only a hundred years ago farming and basic food production required masses of intensive human labour and two hundred years ago perhaps 90% of the population of Europe worked and lived on the land producing food. So we've been there before. In a post oil world, whose to say we won't be going back there?

In fact I'd go so far as to say that energy from muscle power is likely to make big comeback unless we find an easily available, cheap, flexible, substitute for oil and gas. It would appear that what a civilization like ours requires is something to replace oil and gas, which is actually better than oil and gas, cheaper and more abundant; that's been the trend for last couple of centuries hasn't it? Ever easier and better forms of energy have been the foundation and lifeblood of our civilization of ease and plenty. But what of now? Where is the next great easy and cheap energy source? Perhaps if we could almost magically harness the power of sunlight and turn that into masses of cheap electricity. I'm thinking of something like tiny, safe, nuclear fusion reactors in every car, truck and train. Every house with it's own fusion nuclear reactor, energy would be so cheap we wouldn't even have to meter it!

Unfortunately I don't see that kind of technology just around the corner any time soon.

So perhaps our children's children will all be back working the land.

The physics of nuclear fusion reactors is such that you can't ever have a small one.

In order to get self-sustaining ignition you have to get big, really really big. Confinement gets better with size: surface area to volume effects. Probably the smallest feasible commercial reactor might be 3 or 4 GW, and be stupendously expensive, who knows exactly, but possibly $100 billion.

Also, as anticipated, fusion reactors will produce fast neutrons. 1 watt of neutrons could be lethal in a short amount of time. The plant will have to produce multiple gigawatts of them. No such thing as a 'neighborhood' fusion reactor.

If you dream about the 'aneutronic reactions' requiring Helium-3 mined from the moon or something, then the requirments on confinement are even worse. D-T (deuterium-tritium) has the highest cross section (chance for nuclear reaction) but it produces lots of neutrons.

By the way, an intense, controllable neutron source like that could conceivably be a nice thing to upconvert natural U-238 to fissile Pu-239 for weaponry, and you can turn it off before making contaminating Pu-240.

I predict nuclear fusion will be insignificant as a power source for 100 years. Still research is good because there's a chance somebody might come up with something very clever and I'd be wrong.

But for planning I'd count on fission, not fusion.

Simple physical difference that shooting an uncharged neutron into a positively charged nucleus is much easier than shooting same-charged, and repelling nuclei at each other. Almost all the time, they push themselves apart and equilibrate to higher entropy heat, against what you need for reactions.

For fission we need some fast reactors/accelerator transmutators to greatly reduce the long-lived actinides from the waste. At that point geological storage is going to be quite safe over the half-lives of the rest of the waste.

Think about it this way: we are looking at 4th generation fission reactors now, versus 0th generation fusion reactors.

In fission we went from first discovery of physical feasibility (Fermi) to large scale production (Hanford) in 6 years: 1939--1945. We discovered fusion reaction (e.g. D-T) even earlier than fission, and yet we are barely at the Fermi stage.

It may be that breakeven fusion requires humongous reactors, and it may not. Check out IEC fusion. Despite the deviation from the ITER concept, there's no theoreticaly reason it couldn't work. Maybe it can't, and almost certainly it won't, but that may just be due to the nature of getting big science funded. The mavericks just getting short shrift.


Despite the deviation from the ITER concept, there's no theoreticaly reason it couldn't work.

Unfortunately this isn't true.

There was a very powerful theoretical study (PhD thesis, Todd Rider, MIT) limiting best case power output from such schemes, well below what is necessary practically.

Unless there is some big mistake in Rider's and others' work (who come to similar conclusions) it doesn't seem feasible.

The essential idea is seemingly very attractive, but flawed.

The idea is that since only the very fastest nuclei, in the upper tail of the distribution, are important for fusion if you can get a non-equilibrium velocity distribution, e.g. by these electrostatic/RF schemes, then you could greatly increase the fusion cross section with only a small change in average energy. I thought of the same thing myself one day.

The problem is that because nuclei are both positively charged, the 'near collisions' result in repulsions and scattering, quickly thermalizing the distribution to classical Maxwellian. I don't know the exact figure but the nuclei have to have thousands to millions of 'near collisions' before they have a true collision and a chance of a nuclear reaction.

This is why the magnetic confinement is so important, attempts to keep the energy well inside the plasma without losses (magnetic fields I believe do no work upon charged particles), and giving the nuclei the many upon many chances that they need for the reaction to happen.

Problems here are of course the turbulence and complex dynamics which result in leakages and wall collisions.

Same things happen in the IEC style devices, but may be even worse as you have to have physical things right inside the plasma---and if made out of metal (as conductors usually are) this will result in higher Z (atomic number) nuclei being burned off, and these will radiate away energy significantly faster out from the system, lowering fusion potential.

It's a very very very hard problem.

It's possible (barely) that Bussard has found some way around these issues, but this requires very serious analysis from experts.

I suggest you watch the video of Bussard's talk. There are no "physical things inside the plasma" - his configuration uses a virtual anode at the centre of the plasma to accelerate particles.

very interesting Writerman, i also believe muscle labour is going to be a growing business as we enter peak oil. it could also help on transportation. however,

if once 90% of the population worked the land, what percentage of the current population would even be capable of such a life these days? most people i know smoke, drink and drive a car from a to b for everything from work to play to the groceries. how are people who need a smoke every hour, who can not run for ten minutes, and are often overweight going to be working the land, or transporting goods?

the sad truth is that this society has made the average human weak and lazy.

Lone Wolf,

The weak and the lazy humans will go to the wall!

Harsh, but probable. My father was captured by the Red Army at the start of World War Two and sent to a prisoner of war camp above the arctic circle in Siberia. The camp wa a tough environment to put it mildly. The prisoners were divided into work teams, mostly cutting down trees with saws and axes and using the tree-trunks to build roads through the wilderness. The rations were a bare minimum. One could get more food if one fulfilled the minimum quota and cut down more trees. So one had to work to eat and survive, no work - no food! It was basically slave labour, and Stalin used a lot of slaves in his workcamps.

Mao used millions of Chinese peasants to dig canals, build roads, bridges and lots of other stuff. It's not impossible to do an awful lot of things just using human labour and primative technology.

I'm not saying that it's likely we'll go down the path to a rural existence, agriculture based on peasant labour, things may turn nasty long before that happens. I was just wondering where we were going to find a readily available source of energy and it suddenly occured to me that it was all around and it was us!

I realize this may appear provocative and unlikely, but I was just speculating about possible futures. Things that appear far-fetched today may seem ordinary tomorrow, especially if we don't have an alternative. One thing is clear, there are an awful lot of us around, a ready and versatile source of energy waiting to be tapped!

I'm sure most of us would get into shape and learn how to work hard in the fields if we had to. Those that could not would eventually fade away. Of course the fact that there are so many of us, is both an opportunity, a problem and a challange. Compared to 18th. century Europe there are so many of us. Can we feed ourselves without fossil fuel agriculture? It's a big, complicated subject.

I do have a prediction though. Peak Humankind will occur within the next few decades and the decline post peak may be steeper than we care to imagine.

"We often talk here about a near future in the USA that would include a shrinking economy along with increasing inequality, leading to a "neofeudalism". But how will people react?"

That's why they spent the last 30 years turning the people into sheep. They have followed policies to ensure that a dwindling number would be able to afford an education past high school other than "technical schools" which focus only on the specific skills trained for. They learned in the '60's that a broader education gave people critical thinking skills which led people to question. A line from a Moody Blues song comes to mind, "It riles them to believe that we percieve the webs they weave". In the United States, Logic and Epistemology are not usually encountered until college. Since they are a part of elementary education in Europe, I believe their omission in public education in the United States is a result of Policy. Children in the United States are taught to 'believe' not to think. People in the US are also conditioned to respond to injustice and loss with fatalism. They say, "Well, what can be done about it?" then go on as before. They are conditioned to believe 'Nothing Can Be Done' and to submit. They have been raised to be perfect sheep that don't question being fleeced. The problem is that, like sheep, they will be unable to take care of themselves if the protected little world they live in ceases to exist.
Also, a large percentage of Americans are office workers. They are totally unsuited to manual labor. They would probably make useless peasants. Thus, I believe they will be seen as expendable. Immigrants from Central American countries, being accustomed to hard labor and oppression, will be seen as better replacements when the need for agricultural workers grow. Thus, the current administration's attitude towards illegal immigration.

Sounds about right, Cid.

I worked my way through school to get a good classical education. History, government, politics, geography, energy, science, journalism and economics.

I feel very lonely sometimes trying to find anyone to talk to about these things. People are oblivious to issues of core importance to their lives.

You should be very happy finding the Oil Drum then.


Your scenario makes the most sense of all.
It fits Haliburtons move also.
I think we all see the end of the petrodollar, or perhaps a new petrodollar world currency with the picture of a Saudi king on the front.

Adaptation, american style:


At the state level, in California, the Clean Alternative Energy Act is an initiative funded largely by Doerr and fellow venture capitalist Vinod Khosla. Thanks to them it will appear on the state's ballot in November as Proposition 87. The measure would tax the production of oil in the Golden State and use the $4 billion in proceeds to fund research in alternative energy, which could be turned into intellectual property for venture capital-backed startups to exploit.

Global peak: 2007 - 2010
Global decline rate, Post peak: 2%
Economic response: Severe global recession, ~5 years, then slow recovery

The calendar has stopped advancing! Have we reached peak dates?

Oops. Lost track of time.

Any chance we'll get Daylight Savings Time on the clock before November?

best compliment TOD could get to me is my 2 close

friends I can really talk PO with ,lately have begun

reading TOD regularly. & of course this is even with the

recent troll pbs. & conflicts re HL.

Refineries in California and across the country are breaking down with unusual frequency this year, boosting prices at the pump and endangering workers and communities.

The rash of oil plant problems may not be a coincidence. The breakdowns stem from the hard use of aging equipment, a shortage of trained workers, corporate cost cutting and ownership changes, refinery experts say.

Gee, they said exactly the same thing in the summer of 1999 or 2000 here in California regarding the electricity plants.

Plants were suddenly going "out for maintenance" --- blamed of course on previous 'underinvestment' and those bad California 'environmentalists', yadda yadda.

As I suspected at the time, it turned out to be a complete scam, draining, quite literally, the California tax payer and transfering wealth to Houston et al.

The former head of BHP has punctured the optimism of the Howard Government about clean-coal technology by saying the long-term storage of the carbon waste may be as difficult as dealing with nuclear waste.

"may" be? What about "much harder than nuclear waste"?

Nuclear waste is extremely compact for the energy it created, solid, and easily monitorable remotely. Nasty stuff, but small enough that you can contain it and watch it until we get the balls to transmute the long-lived actinides inside. Let's take as an example, that current nuclear waste is being rather adequately sequestered as we speak.

"sequestering CO2" is mostly imaginary technology, and it's very hard to tell when the sequestering is working or not.

The best way to sequester carbon is not digging it up in the first place. Coal is very well sequestered carbon and ought to remain that way, in the ground.

I have a novel idea.
Build some new power plants and refineries in CA.
Oh wait - I know - NIMBY.

Either control your own destiny - or quit whining because other states and locales make steps to control you.

Refineries in California and across the country are breaking down with unusual frequency this year, boosting prices at the pump and endangering workers and communities.


01 Feb 1996, Martinez, CA

The entire house shuddered. I quickly looked up from the book in hand. Windows flexed, walls creaked, nick-knacks on shelves danced. As a low rumble permeated every wall, I sat up stiffly.

Earthquake? Primary waves?

Familiar with California "weather," I anticipated that the disturbance would intensify with the arrival of the expected secondary waves. But, now, the house stood still.

The short temblor seemed strange to me. The house walls had shaken, for sure, but the ground didn't seem to move much. The couch hadn't shimmied. As the realizations occurred to me, the low rumble returned. This time, the sound steadily increased in intensity. Like from a wing of ground-hugging jets on fast-approach. I wondered, did I just experience a sonic boom?

Maybe. Maybe some military aircraft were training outside. I stood up, and headed for the door. Quickly. The rumbling had reached almost disturbing proportions. I wanted to see the action.

I raced outside. The evening air was cool, moist. The sweet smell of flowers tickled my nose. No low-flying planes were visible. The powerful, thundering roar seemed to originate from the other side of the house. I walked toward the street, so that I could look to the north.

A black mushroom-shaped cloud lifted high into the heavens, its base accented in the eerie orange light of a major fire.

Ah, an explosion! The refinery. As the crow flies, I lived a little more than a mile from the facility. I raced inside, grabbed my camera, and headed for the neighborhood's little park, which afforded a good view to the north. Many people from the suburb migrated with me to the top of the little hill. It was all-kinds-of-eerie in the fading dusk light, with families gathering to watch the upheaval that befell the refinery. It seemed that we had gathered as a homage to our god, hoping that the powerful being could somehow be appeased by our attention, and we could again feel safe.

The fire seemed to be spreading. The smoke poured upward, a seething, black wraith. The rumble continued, but had changed pitch downward and seemed to be slowly calming. It would be hours before the fossil fuel god, the deity that contributed so powerfully to our typically quiet and comfortable suburban lives, would be appeased.


For some interesting details, see: Major Accidents at Chemical/Refinery Plants in Contra Costa County, CA.



Some positive things to bring to TOD today:

First, congrats to GreenMan for getting his "A Peak Oil credo" published in Energy Bulletin:


Second, in my latest edition of Popular Science, there are some new wave generator designs that are interesting, although the company actually released the news in 2006:

First, the Australian company's bio:

BioPower Systems Pty. Ltd. is commercialising award-winning biomimetic ocean energy conversion technologies. We have adopted nature’s mechanisms for survival and energy conversion in the marine environment and have applied these in the development of our proprietary wave and tidal energy systems.

Our technologies inherit benefits developed during 3.8 Billion years of evolutionary optimization in nature’s ocean laboratory.The resulting systems move and sway in tune with the forces of the ocean, and naturally streamline when extreme conditions prevail. This leads to low design thresholds and associated low costs.

The inherently simple bioWAVE™ and bioSTREAM™ devices are designed to supply utility-scale grid-connected renewable energy using lightweight modular systems. These systems will reside beneath the ocean surface, out of view, and in harmony with the living creatures that inspired their design.


Now, check these out:

Tech Brief:

Tech Brief:

Which reminds me of Leanan's post the other day:


The problem will solve itself.

But not in a nice way.

Yeaterday while I was looking at different models that have been used to predict oil production when I came across this post by Stuart "Extropolating World Production"


In it he observed that world oil production had gone through periods in which it could be approximated by expontial growth vith rates that changed every few decades. He listed these in a table:

1860-1891 13.9%
1891-1929 7.9%
1929-1942 3.9%
1942-1973 7.4%
1973-1979 2.1%
1979-1983 -4.0%
1983-2004 1.5%

Interesting, I thought, how would this look if I used this to approximate past production before 1973 and did a P/Q vs Q plot. It looks similar to, but much smoother than, the ones I've seen using real data.

Image Hosted by ImageShack.us

I've highlighted the dip produced by the drop in the the growth rate from 7.9 to 3.9 % per year.

This appears to be a bug in the HL method. A change from unrestrained growth to a slower growth rate because of outside forces, such as economic probems in this case or a cartel restraining production to support prices as a more recent example, will cause the data to produce a descending line. If continued long enough this can appear in a HL as being beyond 50% of projected URR.

My simulated HL didn't quite reach 50% but the plot in Stuart's post looked somewhat steeper. What does the HL look like using actual data? After some searhing I was able to find data that Khebab was kind enough to make publicly available. This is the result.

Image Hosted by ImageShack.us

I selected a section that looks fairly stable, there is a dip caused by the Great Depression but it does returns to and follow the line afterwards, and did a HL of the data. I found that in 1942 the world appeared to be at 53% of projected URR.

As would have been predicted if someone did a HL at the time oil production was down the year the HL past 50%. In another interesting coincidence 1942 was the year Germany lauched Operation Edelweiss in an attempt to capture the Baku oil fields.

I have had this same discussion with everyone from Michael Lynch, to Robert, to Euan, to Alan.

The recurring theme is an attempt to show the HL method gives wrong answers, by focusing on the early (noisier) portion of the data set.

Most large producing regions have P/Q intercepts between 5% and 10% (Russia is 10.4%).

Take a look at the world HL plot: http://static.flickr.com/54/145149301_b930ef7bc4_o.png

Notice any difference between the data that Alan used to perform a fit to, and this plot?

During George Bush's first term, the world used about 10% of all crude oil that has ever been consumed. Based on Deffeyes' plot, during Bush's second term, the world will use about 10% of all remaining conventional crude oil reserves.

In any case, world crude oil production is declining, as Deffeyes predicted (EIA).

Robert and Euan are predicting world crude oil production declines some time around 2012, plus or minus. Yergin says we don't have to worry about it for decades.

Just curious, why all of the criticism of and attacks on the HL method--even as world crude oil production is declining as predicted--but no criticism or questioning of the methods used by Robert, Euan, Daniel Yergin, et al, who have been predicting rising world crude oil production?

Just curious, why all of the criticism of and attacks on the HL method

We're trying to catch up with the number of times you've made posts based on it. Only 836 to go.

During George Bush's first term, the world used about 10% of all crude oil that has ever been consumed. Based on Deffeyes' plot, during Bush's second term, the world will use about 10% of all remaining conventional crude oil reserves.

WOW Jeff, those are pretty stunning numbers, so stunning that they are hard to grok...

Can you direct me to your Export land model?

Follow the money; that will bring you to a refinery. From there, follow the empty oil tankers returning to the Gulf. When they turn left to fill up, keep going until you are in the middle of a civil war; then turn right. After a few miles you are standing on top of a nuclear bunker. Knock on the door and politely ask if you may come in.

Hi Jeffrey,

Thanks for your comments. I think I'm finally getting what you're saying, WRT

"...no criticism or questioning of the methods used by Robert, Euan, Daniel Yergin, et al, who have been predicting rising world crude oil production?"

Is your perception that you are being questioned, while Robert is not being questioned in regard to what he uses as a positive approach to coming up w. the dates he's mentioned? (2012 +/- 3 or 4 years, is my recall.)

Actually, my recall is Euan did get a lot of response, didn't he? And Daniel Yergin has been responded to in numerous posts, (I'd say - made fun of - probably not the best thing to do for public consumption, though of course, it may "let off steam" for people in the short term...)

And Yergin would probably be considered as an "object/target" in the CERA responses, wouldn't he?

If so, that just leaves Robert. I've asked Robert what his preferred method is (and dates) and he has mentioned the megaprojects approach, (as best I can tell.)

So, it seems Robert's ideas about a better way to look at it would fall in the same camp as Skrebowski's approach -yes? So...I myself haven't looked for specific critiques of this. Perhaps there aren't any - ? (Although now that I think of it, I think there were some mentioned when it came to discussing the recent dissertation on giant fields...)

Anyway, it seems to me that as long as there's some confusion about HL, it's good to clear it up - just to offer an explanation of what may be the motives of people questioning and/or challenging (including Robert).

It seems to me that the strength of your and others ideas of peak dates rests on the numerous real-world factors that come into play. (Discoveries declining, agreed peak of "sweet light", etc.) And, of course, it's quite perceptive to attempt to understand the positions of countries and regions wrt their individual (and collective) "import/export" status as it develops over time. This cannot be understated.

Since Deffeyes originally came up with HL as a way to simplify Hubbert's original work, perhaps the best thing would be to compile a list of HL questions and invite Deffeyes to answer?

As far as challenges to your work...I find your contribution invaluable, and the same for Robert's presence and contribution. My guess is this is true for many more people that either of you may realize.

The world was well before the discovery peak in 1942. So new additions moved the curve upward as the URR got larger. This is not a bug in the HL method. HL cannot forecast new discoveries, it only applies to mature, maximally produced regions where new discoveries are negligible or non-existent. As long as the production is bell shaped something can be said about the URR. Multiple peaks change the goal posts. The problem with the HL method is that it is based on the logistic approximation for the cumulative production and so overestimates the URR.

For those of you who are concerned about catabolic collapse, until that time comes, there will be plenty of skilled people capable of establishing order. Check out this cheery little piece from The Nation.

Catabolic collapse is not an event, but a process. And the chances are, those guys will just be helping it along. If its history is ever told.

The problem will solve itself.

But not in a nice way.

African Americans will bear the brunt of the collapsing subprime mortgage market

The subprime market is mostly poor people, senior citizens, and the disabled; people with weak credit histories. But a major section of this market is African American and other people of color.

The effect of this crisis will be devastating for them. In these communities, “…something very nasty is going down.” writes John Gapper in the Financial Times. We should remember that these comments come from a leading commentator of one of the world’s leading journals of big business.

Gapper continues, “Some 52 percent of loans made to black people in 2005 were subprime and 80 percent of these subprime loans were exploding Arms.” (Adjustable Rate Mortgage)

Martin Eakes, a credit union CEO claims estimates that 2.2 million families could lose their homes to foreclosure. This catastrophe, claims Eakes, could become “the largest loss of African-American wealth in American history.”

Note: If home values fall back to historical trendlines, they would on average go down about 50%, or $10 trillion. This would be the largest loss of American wealth in history, period.

On top of that, it would shake the entire economy to the core. You can't take that kind of money out of the US economy without causing shockwaves..

The real estate loan market rests on credit derivatives, which are likely worth some $40 trillion worldwide. Global derivatives in total were estimated recently by the Financial Times at $450 trillion. If these Godzilla's start moving, it's time to look for cover, which won't be found in a highly leveraged home.

Would you be OK if your home lost half its value, while you keep paying interest over the initial principal? If not, watch out, check your options while you still can. One of the effects of a major crash will necessarily be job losses.

Alternatively, feel free to disregard these warnings. But do remember that this $20 trillion residential real estate market was just $10 trillion in 2000. The increase has come from 2 sources: interest rates were cut from 6.5% to 1%, and the money supply doubled.

Evidently, the interest rate has been raised again already. Next, the money will start disappearing. It's inevitable, since there was no real valkue added anywhere in the economy. You can't borrow your way into prosperity.

Hi HeIsSoFly,

You quoted the Financial Times: "The real estate loan market rests on credit derivatives, which are likely worth some $40 trillion worldwide." This is misleading as the credit derivatives are not worth $40 trillion. The $40 trillion is an estimate of the underlying value of the assets (real estate loans are probably a big part of these underlying assets) that they protect. The market value or worth of these credit derivatives is probably about $600 billion (estimated from www.bis.org).

There appears to be a competition among journalists to state the biggest number possible in relation to the global derivatives market, without fully understanding the meaning of these big numbers.

Here is a recent statement from Bob Chapman

”Another important event has been the accelerating meltdown of the $1.3 trillion subprime mortgage market. The failure in this market is affecting the better quality mortgage market, the junk bond market, the general use of risk speculation, the $600 trillion unregulated derivatives market and the more than trillion dollar hedge fund operations.”

His first sentence states that value of the subprime mortgages is $1.3 trillion. This seems reasonable.

The second sentence mentions a $600 trillion unregulated derivatives market. What does this big number really represent? Does it mean these derivatives have a market value of $600 trillion? No.

The link below is from the International Swaps and Derivatives Association and shows the value of derivatives as at the end of first half, 2006.

Total interest rate and currency derivatives are $US250 trillion; credit default swaps, $US26 trillion; and equity derivatives, $US6 trillion. The total is $US282 trillion. However, reading the top of the table the words “notional amounts outstanding” are used to measure the derivatives. What does that mean? – doesn’t sound like market value…

This report, released by the Bank for International Settlements (BIS), might provide some answers
Monetary and Economic Department - OTC derivatives market activity in the first half of 2006 - November 2006

Table 1, on page 7 of the above report gives a split of the global derivatives market. The top of the table shows two headings “Notional amounts outstanding” and “Gross market values”. At the end of June 2006, the grand total for notional amounts outstanding was $US369 trillion and the gross market value was $US10 trillion. If you think of derivatives as financial insurance then the premium rates are 10/369 or 2.7% to insure the underlying notional value. Bob Chapman should restate the paragraph above to say that the market value of the derivatives market is about 2.7% of $US600 trillion or $US16 trillion.

The graph below shows the recent growth of the three largest categories of global derivatives. Note the high credit default swap growth rate.

Let’s have a closer look at the risks of the CDS derivatives.

Credit Default Swap (CDS) Derivatives and Subprime Mortgages

Here is another graph showing the explosive CDS growth, doubling each year. The notional value has doubled every year. Note also how the CDS growth, starting in 2001, coincides with the start of the growth in the subprime mortgage market, when US fed interest rates were under 2%.

This article states the worry about CDS

”NEW YORK: Goldman Sachs, Merrill Lynch and Morgan Stanley, which earned a record $24.5 billion in 2006, suddenly have become so speculative that their own traders are valuing the three biggest securities firms as barely more creditworthy than junk bonds.

Prices for credit-default swaps linked to the bonds of the New York investment banks this week traded at levels that equate to debt ratings of Baa2, according to Moody's Investors Service.”

“The swaps on the debt of Goldman, for example, have risen to $32,775 per $10 million in bonds, up from $21,500 at the start of the year, according to prices compiled by CMA Datavision in London. The price touched $35,000 on Wednesday, the highest level since June 2005.

And it is likely that Goldman's own traders were among those pushing the price higher. Goldman and Morgan Stanley were among the top five banks on credit-default swaps in 2005, a group that represented 86 percent of the market, according to Fitch Ratings. Lehman, Merrill and Bear Stearns were among the top 12.

Contracts tied to Morgan Stanley, Merrill, Lehman Brothers Holdings and Bear Stearns are also trading at 19-month highs, and their price increases were larger than an index that measures credit risk for investment-grade companies in North America.

By contrast, default swaps for Deutsche Bank in Germany, which has little exposure to the U.S. housing market, are near a record low at €9,800, $12,935.”

CDS prices for bonds of Goldman Sachs, Merrill Lynch and Morgan Stanley have risen sharply due partly to the subprime mortgage market problems. CDS prices for Deutsche Bank are very low due to little exposure to the US housing market.

Another article mentions CDS (called credit derivatives in this case and also incorrectly implies that $30 trillion is the market value of the credit derivatives)

”As the opaque, $30 trillion credit derivatives market shakes, the hedge funds and banks that dominate this market are getting hit with widespread losses, by all reports. Trading volume on credit default swaps indexes in European markets was estimated at "three times the average weekly volume," by Deutsche Bank and Dresdner Kleinwort. Volumes on U.S. collateralized debt obligation (CDO) markets were thought to be even larger. "Both [Wall] Street and clients have been caught long.... Some peoples' year was wiped out on Tuesday [Feb. 27]," reported Martin Schüler of Dresdner.”

In a worst case scenario of say a 10% default on the notional underlying value of $US30 trillion CDS, this means that the CDS issuers may have to pay 10% of $US30 trillion or $US3 trillion dollars. What happens if the CDS issuers cannot pay? Let’s hope that government central banks will bail them out.

If there is also an oil price shock in the fourth quarter of this year, the resulting inflation increase could cause more problems in the subprime mortgage market. This could cause further CDS price increases.


Your graphs run from my screen all the way to, I'm forced to guess here, my second floor bathroom. So they don't tell me much.

You confuse credit derivatives with total derivatives. The credit derivatives market is about $40 trillion, but the total derivatives market is over 10 times as big. Most of that consists of betting on exchange rates. So your first paragraph is a bit off. Credit derivatives are a novel, 21st century, invention, click on the Gillian Tett link below. The underlying assets value is just a few trillion$. Derivatives as a whole have been around much longer.

I think part of the confusion stems from, what I'm guilty of as well, paying not enough attention to the correct wording of the difference between describing an annual market in derivatives of $450 trillion and stating that the underlying assets have that same value. They obviously don't have to. Nor could they. That's why we came up with fractional banking. Party!!!

But the market is still trading that amount. And that, which is where you go astray, means that you can't simply get off the hook for the 10% in underlying "real" value: the traders will have leveraged a much larger percentage in order to be able to play the game. That is what the big problem is, or soon will likely be. The big players -yes, that is your pension fund too- have borrowed many times more than their collateral is worth, just to play on. It's gone well for a few years, and they get bolder all the time. With your pension money.

There is no trade is real assets, but the remaining debts, after the smoke clears, wil be starkly real. As will the losses. Once the value of the "real assets" starts falling, the derivatives fall ten times as hard. That's the game.

Whether the total derivatives market is to be valued at $300 or $600 trillion, is anyone's guess. The BIS is a shaky source of information, their personnel gets selected for their ability to lie, like the Fed. Think Soprano's headquarters.

I go with Gillian Tett at the Financial Times, who, after researching the derivatives market, estimates it at $450 trillion. Mind you, it's the opaqueness inherent in the scheme that makes it so dangerous and volatile. There is so much going on away from any public radar and scrutiny, that nobody really knows. Hedge funds are unregulated to a very large extent, much of the trade crosses borders, and the speed is too much for any regulator to keep up with.

There are already lots of pension funds that have bought $10 billion worth of 'something", that is no longer worth more than $4 billion. As long as they don't try to sell the "somethings", though, these kinds of losses won't be discovered until there are full audits of their assets, since no-one really knows what these things represent. Fun times ahead.

PS Credit derivatives and credit default swaps are not the same thing: the latter is a sub-set of the former. For full explanation please see here .


You say "whether the total derivatives market is to be valued at $300 or $600 trillion". Do you think this is a market value or notional value? Understanding the difference is critical.

From wikipedia -

"the total notional amounts outstanding of OTC derivatives was $248 trillion with a gross market value of $9.1 trillion".

"The swaps on the debt of Goldman, for example, have risen to $32,775 per $10 million in bonds". What is the market value and the notional value of the swap? The market value is $32,775 and the notional value is $10 million.

However, in this example almost all journalists would say that the value of this swap is $10 million. It's nonsense and is misleading which creates unnecessary alarm.

The following article from the Federal Reserve Bank of Dallas
"Debunking Derivatives Delirium" might help

The numbers used above are from 2002 but the explanation still applies.

"Fact Versus Fiction

Derivatives usage has grown a lot, propelled by advances in information technology and financial theory. But the magnitude of derivatives activities is often exaggerated, contributing to a false sense of alarm.

Based on notional value, the measure the media typically use, U.S. commercial banks now hold about $55 trillion in derivatives, compared with $7 trillion in 1990 (Chart 1). Interest rate contracts account for the vast majority.

But while derivatives activities have grown tremendously by any measure, notional value overstates their magnitude. The notional $55 trillion is roughly five times the U.S. economy’s annual output. Such an amazing figure should be interpreted with care. For derivatives, notional value is the amount on which interest and other payments are based. Notional value typically does not change hands; it is simply a quantity used to calculate payments. Understanding this distinction requires some detail on how typical derivative contracts work."

Gillian Tett contributes to the "false sense of alarm".

"By Gillian Tett
The Australian, Sydney
Monday, November 20, 2006


The global derivatives market surged by almost a quarter to $US370 trillion in the first half of this year as bankers, investors, and companies turned to these complex instruments to manage their risks or place speculative bets on markets.

At the end of June, the face value of all outstanding derivatives contracts in the global over-the-counter (OTC) market had risen 24 percent or $70,000 billion, according to the Bank for International Settlements in Basel. The latest figures mean the derivatives world has almost quadrupled in size since the start of the decade, with a face value on its contracts 30 times the size of the US economy."

Comparison of the face value or notional value of derivatives to the US economy is nonsense and misleading. Its main purpose is to generate attention. A US economy is closer to an income than an asset. The notional or face value of derivatives isn't income, it's not even an asset.

Here's a number for you - it's probably not accurate. "In 1998 dollars, the global infrastructure is worth approximately 4 quadrillion dollars. That’s a 4 with 15 zeros."

Suppose that there is insurance on that global infrastructure. The notional value of the insurance contracts is $4,000 trillion. This is 333 times the size of the US economy - the world must be doomed now.

Derivatives can be a useful tool for managing risk. Unfortunately the lack of understanding of notional value and market value overestimates the dangers of derivatives. Nevertheless, I have concerns about the high growth rate of credit derivatives.

Hello TODers,

Kick 'em when they are helpless, or Dieoff at IMF speed:
Zimbabwe: IMF Board Calls On Country to Pay $129 Million

THE International Monetary Fund (IMF) executive made no decision on the contentious issue of restoring Zimbabwe's voting and related rights, but "expressed deep concern over the deteriorating economic and social conditions" in the country and called for payment of outstanding arrears.

The Food Situation In Zimbabwe 2007

For those who have not read my previous articles on maize in particular, I would like to mention that the first source of food shortage is the supply of seed. Seed farmers, who the government had said should be spared under the now infamous land reform, had their farms nevertheless taken. New farmers were recruited to produce seed. Because of inexperience, their yields were just around two tonnes per hacter instead of the average five tonnes. A lot of the new farmers have stopped seed production for various reasons including viability, labour etc. I know several farmers who have abandoned seed production.

Shortage of seed will be with us for a long time. We know that the silos are empty.

The national requirement is 2,000,000t of maize. The production will be 700,000t. This gives a shortfall of 1,300,000t. There is no foreign currency to import maize of this magnitude. Mr. Gumbo has the audacity to tell the nation that they will not seek assistance from any body as they have the ability to feed the nation.

Where is this ability? The country is completely grounded because there is no fuel. There is no foreign currency to import power. Hwange is unable to operate. Bulawayo has run out of water. Harare residents are drinking untreated water because amongst other problems, there is no foreign currency to import chemicals. I could go on and on.

This next article was written in Aug 2004 [Please check out the photos] Obviously, things have gotten much worse since then:
Private security systems such as insurances and pensions no longer fulfil their expected functions. Health insurance is too expensive and requires unaffordable "co-payments" for most procedures; as more and more people withdraw membership, the medical aid societies are likely to collapse. Life insurances, funeral insurances, education plans, all of which were thriving five years ago, are no longer viable. The runaway inflation has destroyed the benefits of such insurances, so that a life insurance policy designed to keep a family for months if not years after the death of a bread-winner doesn't even pay for the funeral. A funeral insurance doesn't pay for the digging of the grave. Pensions make one want to weep and have led to many suicides. A person who retired four years ago on a comfortable pension can't pay their rent, can't buy clothing, and is lucky if they can buy one bag of mealie meal a month with their meagre income. Some have joined the tide of emigration to earn enough to provide for the days when they can't work any more. Others have returned to full time work at the age of 70.

Ninjas for Zimbabwe

March 25, 2007: Angola is vociferously denying that it will send special paramilitary police to Zimbabwe. But over the last few days, word on the street has been that Angola had agreed to provide Zimbabwe's government with up to 2,500 special police. The reports even mentioned numbers and arrival dates. A thousand police are to arrive the first week of April. Three groups of 500 will deploy from Angola to Zimbabwe sometime after that.

Angolas' special paramilitary police are a capable force that has a violent reputation and is known for its loyalty to Angolan President Jose Eduardo dos Santos. The special paramilitary police also serve in the Angolan president's presidential guard. Dos Santos has led Angola since 1979. Like Mugabe, Dos Santos has been in power a long time. The special paramilitary police are sometimes called "ninjas" because they wear black uniforms. Reports from Zimbabwe suggest Mugabe's government no longer fully trusts its police. Hiring Angolans –or any outside mercenary force-- would also serve as a check on disgruntled members of Mugabe's ZANU-PF party.

But Zimbabwe is also broke. Not a lot of spare cash for foreign mercenaries. But if you are at the end of your rope, perhaps the mercs will insure that you can safely skip the country. When all else fails, there's always luxurious exile, paid for by all the money you stole and stashed in foreign bank accounts.

So will Pres. Mugabe pay off the IMF to help his people? Or will the IMF write-off the debt and rush aid to Zimbabwe? Or will Mugabe use his Zimbabwean funds for himself to live in exile, while his country goes to hell?

What are the long range postPeak strategy plans for Zimbabwe? Have the IMF, WTO, World Bank, and other Orgs. clearly outlined their plans? Or does it get even worse from here?

Have the IMF, WTO, World Bank, and other Orgs. clearly outlined their postPeak plans for Mexico, the US, other countries? I suspect that most of us will be looking for any work at age 70, and much younger too -- got your bicycle and wheelbarrow?

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

We have seen it again and again. Mugabe will flee and the IMF will leave Zimbabwe to starve as they are Black and they are African.(Famine in Africa has come to be seen as 'normal' by 1st world nations.)

Hello Cid Yama,


I have nothing against Oprah's charitable goals, in fact, I applaud her efforts. I just wonder if the curricula and goals include extensive postPeak education to get the most bang for her philanthropic bucks.

Will the kids learn animal husbandry, butchering, and veterinarian skills, humanure and other closed loop recycling tactics, sound potable water and irrigation tactics, birth control and ecologic sustainability, forestry and fishing, and so on?

Or are they all planning on becoming future astronauts, life insurance salesmen, designers of next-gen tanning salons, SUV salespeople, hip-hop musicians and supermodels, and live in McMansions? In short: is Oprah their role model or is the 20,000 year old Bushman/San culture a better long-run postPeak goal?


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

The best approximation to the H/L curve that I’ve seen from this sight was the post on the rise and fall of Whale oil production. I don’t think anyone really has a good handle on the future of coal at this point.

Hello TODers,

Training our young men for the near-future?
Tom Clancy's Ghost Recon Advanced Warfighter 2 builds off of the events in the first game and places gamers in control of the U.S. military's elite fighting unit, the Ghosts. In the year 2014, the rising conflict between Mexican loyalists and insurgent rebel forces has thrown Mexico into full-scale civil war. Under the command of Captain Scott Mitchell, the Ghosts are called upon to face an imminent threat to the United States. The fate of two countries now lies in the hands of the Ghosts as they fend off an attack on U.S. soil. Equipped with the most cutting-edge weaponry and technology, the Ghosts must battle on both sides of the border to neutralize the escalating rebel threat.

Groundbreaking Visual Experience: The war zone in Tom Clancy's Ghost Recon Advanced Warfighter comes to life as you navigate through trash-strewn streets and pick off enemies from behind bomb-scarred structures. The cutting-edge physics and particle systems will show you some of the most intense and realistic explosions, smoke, and environment destruction ever seen in a video game.

All-New Battlegrounds: For the first time ever, the Ghosts will defend U.S. soil from a cross-border attack, taking the fight to all-new locations. The Ghosts will battle enemies in mountain terrains, barren deserts and even on their home turf in El Paso, Texas.

Will today's 13 year olds lust for the real thing postPeak, or instead, are their parents strongly lobbying their local PTAs to reform the curricula for the teaching of relocalized permaculture?

150 million rifles or 150 million bicycles and wheelbarrows?

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

My wife's cousins boys(3 of them) were big time into these twitch games at about 12 or so years of age.

One developed autism and one of the other began have epileptic seizures. My nephew played one of those Clancy games for years. He finally flunked out of college , never could socialize, and now works at a car wash. He was touted as a bright boy and was when he would visit me on the farm. He is now wasted and has no real future at the age of 19 except menial jobs from now on. His life is in front of a monitor or twitching away on a Gameboy.

That's one scary tale.


I was just going to edit my post, to say welcome back Airdale, I saw your response to Todd, and you guys are truly invaluable here, but I was trumped by the primate, so no more editing.

Hey Matt, did you get your nom-de-plume from Oliver Sacks, by any chance? He's a neurologist, The Man Who Mistook His Wife For A Hat, Awakenings (film: Robin Williams). I imagine Airdale looks like him, by the way.

I saw Sacks long ago explaining how and why he felt people have a very profound level of trust in each other. Which leads to big questions marks, of course. But his explanation was good: imagine we would hand out driver's licenses to chimpanzees, would you feel safe on the road?

Nice story for y'all:

Terror Database Has Quadrupled In Four Years

Hi HeIs,

I came back after the clowns and trolls were gone. Much more civilized now.

I could never never get up to Todd's level. He has been at the sustainable thing a long long time. I am still on the grid and using lots of fuel and other commodities but I am ready to break off at any time.

I just hate to give up my Harley and Jeep. Well time to start thinking about a few mules then.


Hello Airdale,

Thxs for responding. I have no idea if those kids' problems are related to gameplay or some other reason--I will leave it up to the experts.

But I do think that a tribesperson, hunter, fisherman, or farmer, who is quite comfortable with killing, bleeding out, gutting, then butchering food is much better mentally prepared postPeak than some kid that is squeamish at mere thought of touching a defrosted raw turkey and is constantly being 'reborn' by hitting the Restart button.

The only games I infrequently play is Solitaire and Free Cell--never understood why kids spend hours developing 'twitch skills' either. At the very least: parents should take their kids fishing, then teach them the simple basics of running a filet knife down the spine and ribcage.

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

A whole generation spends hours every day playing these games. Some have morally offensive plotlines - wargames. Some are about skateboarding or football but the twitch is the same. One more mass experiment with no control and no restraint.

The only limit is how much product the vendor can move. Few parents do anything but buy. The kids are quiet if you get them the games.

The trick is to get your kids into writing computer games ...

The problem will solve itself.

But not in a nice way.

My 22 year old nephew is also a gameboy zombie. He is so dead to the world he has never achieved in school or held a real job. His mother earned an advanced physics degree under Nobel Laurate P.A.M. Dirac. IMO, this young man is actually brain damaged from electronic gaming.

Hi all,

A report of a recent study...

Full story: http://www.energybulletin.net/26384.html

I'm wondering, in the case of these sad, "real-life" examples...I was just curious if you think there's any way you (both?) might intervene...? "Have a talk"...or ?

I mean (not to use the personal example), but if there was a lack of attention (not w. these particular people...just in general), lack of "other things to do", lack of interaction (fun? work? fun chores? fun group activities?) - perhaps some interaction now might go a ways...ie., "...someone notices." "Someone notices and cares."

His mother earned an advanced physics degree under Nobel Laurate P.A.M. Dirac.

No fair, that's a single delta function data point !!!!

Comment also posted on TOD Canada

Here is a link to a CBC piece on peak oil from almost two years ago:

Also I have been struggling with what the future might be on my personal,family,local and greater levels.
Also trying to attract some attention here locally. Here are my thoughts on my local peak oil group.

Someone was contending above tha KSA was going to give it to the US is the ass by ruling the oil market and through higher oil prices just own us. And the rest of OPEC was going to get in on it too.


Last I heard about, KSA didn't have an army, navy, airforce or ANYTHING that could stop us or anybody from taking their damn oil!

If, and when, the gloves come off why wouldn't the US or "someone else" just take the oil????? They can't stop it. It is cheap to do if you don't care about the body count (20 million+).

This is what empires have done all through history and it will happen again. Do you really think that the world's greatest superpower is going to bow to a bunch of shieks and let their country go down the tubes....or would they just take what they want (OIL) and let KSA be damned?

I vote for taking the oil. If only because it will give us a fes more years to figure out what to do next...

Last I heard about, KSA didn't have an army, navy, airforce or ANYTHING that could stop us or anybody from taking their damn oil!

Osama bin Laden and his kind could make it very painful to do so.

How long would an occupying force in Saudi Arabia be able to protect the oil export infrastructure from attacks and sabotage? It doesn't happen in Iraq, and in S.A. the resistance would be even more virulent.

OSB and his kind?.....

C'mon.. if we invade and take over KSA its for real... no BS like spreading democracy... it will BE about the OIL... and no one will dare stop us or...nukes will fly...

Iraq was the opening move...pawn to bishop 3....KSA is checkmate....Also notice most of KSA oil and infrastructure is in the NE corner of the kingdom... quite easy to cordon off and protect if you don't mind the casuluaties.

I really don't see anyone on the Oil Drum address PO from this viewpoint. The viewpoint of WW3

We are strongly discouraged from discussing such things on this site. We are also not supposed to discuss the spectacular event that launched the endless "War on Terror".

However the obvious point has been occasionally raised: What if TPTB have been very aware of peak oil since the 1990s or long before? What if they believed that declining energy production will lead to the dieoff of billions of people in the 21st century. What would they do to enhance their chances of retaining their lives, wealth, and power? Prepare for martial law? Launch energy wars? Create a pretext to justify these draconian actions?

Korg is correct from a geopolitical stand point. There are plenty of ways to get it done, but we will not let go of the ME. No way. I suspect the best way to get it done would be to have the Chinese mass there extra men against the Indians and Pakistanis then let a nuke go on that group. Try to take out 2 billion and then manage decline with the remaining population. We will have demand destruction, famine and control. Prevailing winds take out china, japan and west coast. Everyone takes a hit.

Last I heard about, KSA didn't have an army, navy, airforce or ANYTHING that could stop us or anybody from taking their damn oil!

Osama bin Laden and his kind could make it very painful to do so.

How long would an occupying force in Saudi Arabia be able to protect the oil export infrastructure from attacks and sabotage? It doesn't happen in Iraq, and in Arabia the resistance would be even more virulent.

Actually that's the peak oil debunkers new ploy. To explain away declining oil production they are claiming this grand conspiracy where they are magically stashing away billions of barrels of oil that they are going to somehow drop on the market all at once for some nefarious purpose. Don't even listen to it. It's all BS.

Yeah, it worked great in Iraq...

I am swayed by that argument.
Do policy makers care?

Interestingly, Korg has returned us to the Subject that I opened near the top of this string, Saudi Arabia and it's obviously increasingly powerful position vis a vie oil markets.

Admittedly, Korg's solution may seem a bit clumsy, in the way that Alexander was said to have solved the Gordian knot riddle (one swipe of the sword), but you would be surprised how popular the "Korg" model is down at street level. I know I have been hearing the "bomb thier azz and take thier oil" theory since the 1970's, it is a propasal with staying power, being exceeded only by "peak" as a theory with a long pedigree!

Of course, the "bomb them, take it" model has some problems, even if you leave aside the moral/legal aspects, as we have seen in Iraq. Force is a limited tool, lacking long term flexibility. Oil is not something you just "take" and walk away with. You have to stay, develop the resources, put the equipment and manpower in, and work to at least some degree with local ports, water transportation and logistical suppliers. You can't "take the money and run", you have to stay.

Now to the replies to my post: Cid Yama had an interesting comment:
"That article reflects the level to which debunkers of peak oil are going. Try to get people to fear the exact opposite of what's happening. It's like a "Hey, look over there", and ripping you off while you look. Saudi Arabia is in pretty dramatic production decline. Period. They are not magically storing huge amounts of oil to flood the market. Anybody that would even think this hasn't a clue."

In my own case, I think I have made it clear often enough that I am convinced peak is coming, and in fact could already be behind us. We must recall that the U.S. government did not admit to peak in the U.S. until 9 years (!) after the event, and even then with caveats. If we peaked in 2005 as some say, it may not be clearly visable to the public at large until 2014 or so.

On the other side of the coin, we must try to be prepared for the other side of the sword, i.e., even a small misjudgement means we may not be at "peak" oil per se until a decade or two later (i.e. roughly 2025 or 2030 at latest), which as has been pointed out by others here, would be meaningless, an eyeblink in the long history of civilization.

But it could have huge implications for those people and firms engaged in alternative energy and conservation research and business. A drop of some 5 years plus in oil prices would essentially destroy the alternative industry.

nrgyman2000 said "A temporary flooding of the market with cheap oil is not that hard to control, tax it. In USA you could pour the money into your budget deficit and post peak oil investments." Of course, that is the difference betwen Europe, which uses half the amount of oil per person as the U.S., and America, which could have (and in fact was lobbied to by the losing faction) taxed oil and held the price up in the 1980's to protect the investement in lower consumption and alternatives we were then making. It was rejected as an option, the price of oil and gasoline callapsed, and we know the rest of the story....

nrgyman2000 then has a pair of nice posts, one with extracts by by Dr Shokri Ghanem, Chairman of the People’s Committee, the National Oil Corporation (NOC) of Libya,and the other just below it under the title,

I won't quote from them, they are well worth reading completely, just up this string, but they and the other responders are going the direction that I have been working in for some time, that being the attempt to understand the "chess game" and the moves of the big oil producers coming down the stretch to the finish of the "carbon era". There are several conceptions that seem to be accepted as articles of faith that I am interested in verifying questioning:

(a) We take it as an article of faith that OPEC is/has been producing "flat out" to hold production up to it's current levels. How can we know this?

(b) We take it as an article of faith that we are well aware of how much oil Saudi Arabia has, and can produce. How do we know this?

(c) We take it as an article of faith that the recent price rise is proof that there is simply a supply constraint on oil, not that any of the large producers may want to see a rise in price (which to this date has not been any greater than would be expected and needed to re-align oil prices to inflation and the rising cost of extracting oil in difficult environment and a dangerous world)
What real evidence do we have of a geological limit on TOTAL production in the world? (note: we are not talking about a limit on production from aging fields...they are certainly long in the tooth, but we are talking about world total discovery and production. This is not a debunking of peak, but merely questioning the timing and who may still have surplus oil in the ground that can be developed with effort and money (the big factor given that oil has been givaway cheap for so long until recently)

(d) How would a massive surplus of Saudi oil, were it to exist, be of benefit to the U.S.? This to me is big. A surplus of Saudi oil would be good for them, yes, but for us, it would mean spiraling balance of payment problems, increased waste, the death of the alternative energy industry in the U.S., increased greenhouse gas emissions, increased geopolitcial and military pressures....on and on. What we seem to most wish for is slavery instead of change.

(e) Is it possible to plan ahead for both edges of the sword being used? In other words, how does one plan for peak, which will surely come (and almost as certain come completely without warning), and also plan for surplus of imported oil (and with LNG, natural gas as well) leaving us more and more unstable as a nation, and declining in national wealth?

These are the complex issues that policy makers, organizations, companies, towns and cities across the U.S. and the world must confront. It is not a simple "That's it, we're out" situation, (some irony there, huh, given my handle...:-) scenario.

Even using the scenarios of ASPO as given in thier most recent newsletter, there will be a LOT of oil and gas in the world out to the middle of the century (2050). There will NOT be a return to horses worldwide or a "stone age" (barring nuclear war or some other catastrophic event, but there will be a mix of powershifts, power grabs, technology, social change, and order/disorder as everyone tries to get to where they want to be/need to be in the new pecking order.

The biggest player, the great unknown, is Saudi Arabia. What are they able to produce, and do they even know? How do they see this game? How confrontational/concilatory will they be? What is the TRUE nature of the Saudi/U.S. relationship, and Saudi's relationship with the world? There are of course other big producers, but I have chosen, at least for awhile to narrow my focus to Saudi Arabia and the OPEC group. Why? As Matthew Simmons says, "When Ghawar peaks, Saudi Arabia has peaked (is this provable?) and when Saudi Arabia has peaked, the world has essentially peaked (is this provable?)." Saudi Arabia's importance to the future of the Western modern world grows by the minute. This alone should be great cause for concern, interest, and show us the need for change. The nature of that change is what is in question.

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

Roger you wrote;

nrgyman2000 said "A temporary flooding of the market with cheap oil is not that hard to control, tax it. In USA you could pour the money into your budget deficit and post peak oil investments." ………

NO!!! Roger, it was not me, nrgyman2000, who wrote that.
It was the SWEDE Magnus Redin who should be credited, I responded to his proposal, which I don’t think is the answer in a post peak environment.


Roger , I tend to agree with much of your response to many of the commentators to your post reverting to the simplistic “use of force” method as a way to mitigate Peak Oil. This strongly reminds me of something Leonard Cohen (the Canadian singer and lyrics writer) recently said in an interview;

“You want like what comes after America.”

The “use of force” responses should be expected to appear with increased frequencies and slowly merge into the collective popular solution as more people become aware of the potential effects from Peak oil.

And Roger, I think you are introducing a new and valuable dimension to the peak oil debate that deserves to be more thoroughly (and seriously) discussed, because it could be that a decline in KSA (though serious) does not give a well defined picture of all the real long time threats.

Roger, I admittedly am not in agreement with all your viewpoints, but there is something in your thoughts that deserves to be taken some further steps.

That is why I also believe it would be wise to read papers/presentations from people who through several years has been actively and centrally engaged in the strategy processes within OPEC, like Dr Shokri Ghanem.


nrgyman2000, sorry about the mis-atribution....I was scrolling back up the string and must have gotten one post off....and nice to hear from a fellow Leonard Cohen fan!

By the way, in relation to the Saudi situation, Stuart Staniford has a FANTASTIC new article on TOD today, excellent in every way....:-)

Remember, we are only one cubic mile from freedom

I don't we'll be doing that, not least because we're busy in Iraq.

But I do think the Saudis are afraid we'll invade, or otherwise undermine the royal family. That will probably keep them from doing something like this.

Hi Leanan,

Maybe you can put this link on the drumbeat for today.


Peak oil thriller hits German best-seller list
by Staff

A peak oil thriller from a popular German novelist has hit the best-seller lists. The 750-page novel is written in a style like that of Michael Crichton's techno-thrillers, and covers many of the themes discussed in the peak oil community.

Ausgebrannt ("Burned Out" in English) was published in February and reached #7 on the Spiegel best-seller list (it's now #10).

There's also an interview with the author, some of which is translated into English.

Two questions

"...Do you expect Peak Oil soon?

We'll only know that we've reached maximum production in retrospect. "In the rearview mirror," as M. King Hubbert put it. At the moment it looks as if we are at least in a plateau, so that it could be that we have just passed the peak. ...

... When I came to understand the consequences of Peak Oil, I felt the need to tell friends and acquaintences about it; however, I encountered only lack of understanding. Do you think that putting this topic into a thriller will lead to better acceptance?

In any case, it should be helpful to put a gripping book into someone's hand and be able to say to them, "Here. Read it. It explains it better than I can in three boring sentences." Many people have done the same thing with my novel, Eine Billion Dollar that dealt with a similarly explosive topic."

Very Probable Conspiracy Theory

References theoildrum .


Wow that flesh's it out better than I thought when I first posted the idea. I am glad someone put some dates and facts behind the idea.


On The Oil Drum post that he links to his article he gives you credit as his Muse for the article.