DrumBeat: March 30, 2007

Drivers Shrug as Gasoline Prices Soar
But as Americans enter the sixth year of rising oil and gasoline prices, their shift in driving habits this time has been much less extensive. What’s more, in recent weeks, gas consumption has gone up, not down, and drivers are changing their daily driving habits only slightly.

End of oil heralds climate pain

It is mathematically impossible that peak oil will solve climate change.

Although oil is the biggest single source of energy-related greenhouse gases, coal and gas combined are bigger still, and the expected growth in their emissions would overwhelm any reduction from oil.

China to produce liquid fuel from coal

China's first coal liquefaction project, which will go into operation in 2008, will be able to produce more than one million tons of oil a year, significantly reducing the country's dependence on oil imports.

World oil production close to peak

A Swedish scientist estimates that global oil production may reach its peak sooner than expected.

Big Oil spends more, only some see 2007 output up

The world's five largest fully publicly traded oil firms are planning to invest billions of dollars more this year but extra spending may not translate into higher production.

Petrobras: Volumes at Santos Basin Sub-Salt Find Still Unknown

Production tests showed the existence of a "significant volume" of 30 degrees API crude in the 1-RJS-628 exploration well in the BM-S-11 exploration block, Petrobras had said in October.

The stock is dead, long live commodities, says Rogers

The growth in demand for commodities, particularly oil, was due to the demand from mainly China followed by India. "This is just the beginning. The demand by Asia hasn’t even started yet," he said noting that China’s per capita consumption of oil was a fourteenth of that of the US and one tenth that of South Korea and Japan.

Minister defends ethanol policy

Brazil has become a haven for developed and developing countries seeking technology for the use of ethanol as a fuel alternative to oil derivatives, Brazilian Foreign Minister Celso Amorim said yesterday.

His remarks came in response to comments made by Cuban President Fidel Castro in an article published by Cuban state daily Granma yesterday

Luiz Inácio Lula da Silva: Our Biofuels Partnership

HP aims to cut its energy consumption by 20%

The Palo California-based computer and printer maker said today that it plans to reduce its global energy consumption 20 per cent over the next three years, based on 2005 energy use levels.

HP plans to cut energy use by as much as 30 per cent for some printers and 50 per cent for some computer servers. It pledged to reduce carbon dioxide emissions from facilities.

UK slams US biofuel subsidies

"People who are being subsidised to produce renewable fuels in the US are now planning to export that fuel to Europe, where they hope to get a second subsidy when it is sold in Europe," [UK transport minister Stephen] Ladyman told a conference organised by the Environmental Industries Commission, a biofuels industry lobby group.

U.S.: Iran vulnerable on oil product imports

“There are no free moves for Iran. Everything has a consequence,” US Deputy Energy Secretary Clay Sell told Reuters in an interview. “Their dependence on imported products is a vulnerability.”

Addressing Europe’s energy problems

Europe’s increasing dependence on gas and oil imports, especially from Russia, is as dangerous as war. That was the conclusion of a number of experts during the second day of a European Parliament public hearing on 28 February, organised by the Committee on Foreign Affairs, which further analysed the need for a common European foreign policy on energy.

Bill McKibben: Less carbon, more community building

Earlier this month, a draft White House report was leaked to news outlets. The report, a year overdue to the United Nations, said that the United States would be producing almost 20 percent more greenhouse gases in 2020 than it had in 2000 and that the US contribution to global warming would be going up steadily, not sharply and steadily down, as scientists have made clear it must.

Government should keep hands off oil prices

In response to recent rises in gas prices, we are once again hearing calls for the government to "do something" to force prices lower. But no matter what the price of gasoline is, such calls are wrong.

All market fluctuations in the price of gasoline, up or down, are a good thing -- and none of the government's business.

Solar boat makes Atlantic history

A five-strong Swiss crew have sailed into history by completing the first solar-powered transatlantic crossing.

Solar World: Sea sponge solar

It's round, lives underwater and resembles a Cheeto -- and the orange puffball sponge has a thing or two to teach us about making photovoltaic solar cells inexpensively.

Huge jump in corn planting expected As always, the comments are interesting.

The limits of a Green Revolution?

Given the shortage of land suitable for growing more food, the obvious answer would be a new Green Revolution, or another hike in yields. But this may not be possible.

"The difficulty is that we are now pressing against the photosynthetic limits of plants," says the influential environmentalist Lester Brown of the Earth Policy Institute in the United States.

Jim Puplava: Eyes Wide Shut - The Politics of Energy

In the 21st century, “the Great Game” has returned; once again great empires are repositioning themselves in an effort to control the Eurasian landmass. At stake are the vast energy reserves of the Middle East and the Caspian Sea, which contain nearly 75% of the world’s oil reserves.

CNOOC Chief Mum on Gas Field in Disputed Water

The head of China's largest offshore oil producer China National Offshore Oil Corp. on Thursday declined to comment on production at the Chunxiao gas field in the East China Sea where China and Japan are in dispute over resource exploration rights.

Chairman and Chief Executive Officer Fu Chengyu refused to confirm or deny that production at the Chunxiao gas field has started.

China has 2 billion tons of oil in reserves

The Ministry of Land and Resources recently gathered primary statistics on oil and gas reserves from PetroChina Company Limited, China Petroleum and Chemical Corporation, China National Offshore Oil Corporation Limited and some local companies. The data revealed that, as of the end of 2006, China had 2.043 billion tons of petroleum in remaining commercial recoverable reserves, and 2,449 billion cubic meters of natural gas in remaining commercial recoverable reserves.

Shell VP Confirms Gas Development Talks with Iraq

Energy giant Royal Dutch Shell PLC (RDSB.LN) confirmed Thursday that it has been in talks with oil officials from the Iraqi government over the development of the country's gas industry.

In Oil We Trust

For the past two weeks, I've bombarded you with the gloom of oil's future. I apologize for the doomsday antics, but its hard not to be gloomy about Middle Eastern oil.

The good news is that you can still find safe oil investments.

Midwest utilities seek to 'store' wind power in aquifer

Wind power is clean and renewable. Now a group of utilities in Iowa, Minnesota and the Dakotas has a plan to make it reliable.

Quarter of UK Gas Reserves to Be Stored on Island

A quarter of Britain’s gas reserves could be stored more than a mile below the surface of an offshore island to stave off an energy crisis.

Plans have been drawn up to create salt caverns 2,400 metres underground as storage tanks to increase vital reserves to more than 20 days’ supply.

With North Sea gas running out, we will become more reliant on supplies from Russia and Middle Eastern countries. The UK only has 17 days of gas stored in the event of supplies being cut.

Cold fusion is back at the American Chemical Society

After an 18-year hiatus, the American Chemical Society (ACS) seems to be warming to cold fusion. Today that society is holding a symposium at their national meeting in Chicago, Illinois, on 'low-energy nuclear reactions', the official name for cold fusion.

Some say the move shows that researchers are re-opening their eyes to work in this field. Others maintain that there is still no evidence for cold fusion and see the session only as a curiosity.

Crude Awakening: Shrewd filmmaking

Oil is the most important resource in the world today, with all of our conveniences propped up by rich, dark crude. Oil is in the insecticide used to kill cockroaches, and food has petroleum-based fertilizers to help it grow. A Crude Awakening: the Oil Crash shows simply and grippingly that the convenience of modern North American life is tied inexorably to the supply of oil. And that supply is already drying up.

Gov. Patrick announces $2 million energy efficiency

Gov. Deval Patrick announced a new state-funded energy efficiency program designed to help Massachusetts cities duplicate a model unveiled Thursday by Cambridge officials.

...The goal of the Cambridge Energy Alliance is to reduce electrical demand by 15 percent at peak times, reduce annual electricity and water consumption citywide by 10 percent and reduce annual greenhouse gas emissions from the city by 10 percent by 2011.

Russian nuclear plant proposal for Namibia generates controversy

Russian PM offers uranium producer Namibia help in solving a looming power crisis with a small floating nuclear power plant – untried technology - which has created dissension within the country.

ExxonMobil, Saudi Aramco and Sinopec announce petrochemical venture

ExxonMobil, Saudi Aramco and China's No. 2 oil company announced two joint ventures worth a total of $5 billion on Friday to expand a Chinese petrochemical refinery and operate a chain of 750 filling stations.

Ghana mining companies buy their own power plant

The plant, valued at $45 million and expected to generate 80 megawatts of power for the mining companies, was transported into the country from Portland in the United States of America on Wednesday night.

Uganda: Fuel prices up as reserves run dry

UGANDA’s fuel reserves are empty, the Government has announced, as several filling stations in Kampala and the rest of the country have dried up.

Oil aims for $67 on Iran, French strike

Oil climbed toward $67 a barrel Friday on global supply worries caused by tension centered on OPEC member Iran and a strike in France that threatens to crimp summer fuel supplies in the United States.

Crude was up 60 cents at $66.63 a barrel in electronic trade, having jumped 3 percent to a six-month closing high the previous day. London Brent rose 73 cents to $68.61, its eighth day of gains.

Australia faces extreme weather rise, says leaked UN report

Australia will suffer more droughts, fires, floods and storms due to global warming and its famous Great Barrier Reef will be devastated by 2030, according to leaked extracts Friday of a UN report.

Gore wins praise from head of Nobel committee

Former U.S. Vice President Al Gore won praise on Thursday from a man with the power to change lives -- the head of the Nobel Peace Prize committee -- after a speech urging more action to fight global warming.

Could private equity re-energise the US power sector?

What prompts me to write about PE is its current relation to investments in the energy arena. According to one authoritative estimate by Cambridge Energy Research Associates (CERA - which has been so opposed to Peak Oil theory, but which also does quite good work in other areas), the U.S. electric power sector will require about $800 billion of new investment by 2020. By way of comparison, the current net book value of the U.S. power sector is about $700 billion. So right away, the discerning mind can figure out that it will require significant outside investment to keep the lights on in the U.S. over the next 15 years. Much of that new investment will probably come from PE.

U.S. can cut oil imports to zero by 2040, use to zero by 2050

The United States could dramatically cut oil usage over the next 20-30 years at low to no net cost, said Amory B. Lovins, cofounder and CEO of the Colorado-based Rocky Mountain Institute, speaking at Stanford University Wednesday night for a week-long evening series of lectures sponsored by Mineral Acquisition Partners, Inc.

As the United States consumers cry out about high energy prices, including the gasoline to power their Chevy Silverados, they don't think anything in regards to their level of consumption or that we've been there before and will be there again. They assume it's a temporary situation, and it will "pass" after our "elected" representatives nip this thing in the bud.

It's been on my mind a lot lately as people at work gripe how they can't afford the gas prices to drie 50 miles in to work in their Suburban or Expedition. Every time I tell them to switch to a smaller vehicle, and they look at me like I'm asking them to give up sex, chocolate, alcohol, soda, and eating out for Lent.

Don't bother with the small car argument, it's the same thing as calling them stupid (which they are).

Instead... commiserate. Pretend to understand their pain. Show sadness as you tell them that according to Car and Driver ethanol gets 1/3 LESS MILEAGE and costs MORE MONEY. Let 'em chew on that for a while. Rant about the subsidies.

The next time the subject comes up. And it will. Confess your anger at your rising grocery bill. Be sure to blame ethanol.

Whenever possible turn the issue to ethanol. Eventually they will figure the small car angle.

Back in the 80's, people did abandon the large cars. It will happen if the price is high enough, and probably more importantly if people come to believe that higher prices are permanent.

My own little story is that I buy 15 gallons of diesel roughly once every 2-3 weeks or so. I am about to try joining the ranks of bicycle commuters, and I can telecommute from home - by the summer I might be able to cut driving to work to once a or twice a week or so. My own version of biofuels will be things like powerbar, hammergel, apples, bananas and nuts :-).

My girlfriend looked at me like I had two heads when I told her about the idea of bicycle commuting though. She asked me what route I was planning to take - I jokingly suggested that I would take Interstate-66, but she hadn't had her morning coffee yet, and she didn't realize that I was joking until a few seconds later. In reality there are pretty good bicycle trails that I can take to get to the office - a bit on the long side (18 miles one way), but nothing I cannot handle. And for that matter I can really use the exercise to work off the gut that I built up over the winter.

It happened in the '70s, but that was a sudden, sharp spike.

I wonder if the relatively slow rise we've experienced is letting people get used to higher prices. People complain, but they aren't cutting back any more. They're back to buying SUVs, not Priuses.

Like boiling a frog... do it slowly and they won't jump out of the pot.

Actually, a frog *will* jump.

Which is simply proof that frogs are smarter than humans.

A spike would certainly help. But folks in the '70s and early '80s had much more than that. There were recessions and inflation and unemployment and really expensive war and an impeached president -- a thick fog of economic gloom many years even when things were perking up. (GDP rose over the decade as a whole). It all built a mood for change.

Geez all we got are higher gas prices and some shakey mortgages. Foreigners seem willing to finance the war.

But give it time ....

ADDENDUM: Stronger counterculture back then, too.

Yeah and no. We are getting these seasonal spikes in gasoline costs, so every summer people talk about getting a hybrid or some such. It does bring to mind the story about boiling a frog though.

The thing that is different this summer is that the sub-prime mortgage thing has gone sour in an awful hurry. People will no longer be able to take out the home equity loan on their houses to buy a car. I suppose for a lot of people the type of car you drive is a sort of status symbol (that's what the automakers want). How else could one justify spending 50K$ on a vehicle of any sort, really.

I remember years ago I was listening to Click-N-Clack, and they had a story about someone they knew who was very wealthy with old money. They looked in the garage to see what they drove, and they had something ordinary - like a Dodge Dart or some such. The explanation was that any mechanic in the country could work on such a car.

People will no longer be able to take out the home equity loan on their houses to buy a car.

Which means they'll be stuck with their gas-guzzlers, no matter how expensive gas is.

But at least it will be more comfortable if they have to live in their cars.

It did occur to me, when I was reading Deffeyes' book, that the volatility he predicted might lead to people becoming less responsive to price. People start assuming that prices will go back down, if only they wait. Few seem to notice that the lows keep getting higher.

Thinking about the possibilty of for instance a doubling of gas prices, and the potential effects that would have on their lives, is probably simply too much for many.

For millions, the financial squeeze of gas prices will make it ever harder to even get to work in the first place, and then they have to worry about their rising mortgage payments as well.

And then, as mentioned in this thread, there's sharp increases in food prices. Assuming that all these prices wil at some point start going down again may well be mostly a subconscious reaction.

Prayer and denial often feel much better than reality.

"...the financial squeeze of gas prices>>>"

I saw someone buying a $3.50 cup of coffee at a coffee shack while I filled up on $2.99 gallon midgrade. It's still too cheap. Unless you are lower income and payment straped.

I think we could have riots here in the US. I want to look as poor as possible, an old beater car that smells bad and some crappy looking clothes!

I don't see your logic.

Did you only buy one gallon. Did the coffee drinker buy 10 to twenty cups of coffee each day.

Cheap is relative to other options and long term pricing.

Do you need it to make money and function in society is another question.

I like ice cream. A local grocery has it for 5dollars a 1/2 gallon. Two miles roundtrip. I also need several other items. Sams sells the same ice cream for 3dollars a half gallon. I am buying two so thats a 4 dollar savings. The trip will require one gallon of gas for a 24 mile round trip for my vehicle. This savings more than allows for me to pay for the gas to drive my car. I will save more buy making he longer trip, because other items will also offer savings.

I have used more gasoline, but I have saved money.

thats a problem

Quid Clarius Astris
Ubi Bene ibi patria

"Cheap is relative to other options and long term pricing."

Cheap is relative to income, period. If I make $10,000 per year, then gas at X price is ten times more painful to me than if I made $100,000 per year.

For most people in the U.S., given their incomes, gas is still givaway cheap.

Remember, we are only one cubic mile from freedom

Actually, it's more than ten times as painful, because in both cases your necessary, fixed costs (food, heating, etc.) are the same - so you have to subtract that first before comparing. If you need, say, 5000$, your disposable income is 95000 vs 5000 - 19 times as much.

if you make 10k or 100k you just have to find a way to live within your means. shoe leather(er.... i mean shoe vinyl) is waaaaaay cheaper than gasoline.
of course our federal government doesnt have a clue about living within it's means and maybe that is the source of the problem.

The point is that as the price of fuel rises then so rises the cost of everything else.

Pretty soon that CUBIC MILE doesn't mean much for we will all be digging groundhogs out of the banks for food and making shoeleather soup.

In case it's not known there are huge number of folks on FIXED INCOMES!!!!

As fuel(oil.energy.whatever)goes..so goes our economy. Its far far more than something to drive to work. Its life. Its "death on a stick". Your lifestyle means more than driving. Its electricity,food,medicine,fertilizer and ...........

Airdale-screw bicycles..I'm getting back to horses. Yeeehaaawwww
(or mules maybe....giddap Sal)they make such nice road apples..so handy you can even cook with em. Mules is where its at.

We are one cubic mile of muleflesh from freedom.
(sorry,couldn't help myself RC)

Perhaps. The other thing about those 50K$ cars is that people tend to lease them instead of purchasing them, so they can dump them back on the manufacturer.

Folks can get a Honda Civic for about 16K$. Not a hybrid, but it would get 30-40 mpg. Spend about 4-5K more, and you get a hybrid that in theory will get nearly 50mpg.

The hard part is going to be getting people to abandon the status symbol thing.

Dunno about you, but $16,000-$20,000 is not exactly chump change to me.

And it would be less so if I had a mortgage that was bleeding me dry, or a loan on a $50,000 SUV to pay off.

Buy a used Honda, then.

Everyone else will be doing the same. Remember the used Priuses going for more than new?

Those gas-guzzling SUVs won't be taken off the road. The price will drop until they sell.


Listen up: when gas is high enough that people would want to do as you advise, probably in the $4.00 or $5.00 plus range here in the States, the economy will be tanking and people are simply not going to be able to afford new cars even used new cars.

I love this line of thinking which boils down to "the solution to the collapse of the car economy is for people to buy more cars. . . "

Come on Tstreet. If you're on a forum like this one you should be able to see the problem with such thinking. "I can't afford to drive to work. What shall I do? . . . ahh. . . I know . . . I'll buy a new car!!!" and/or "I just lost my job because the economy is tanking as gas goes to $5.00 a gallon . . . What shall I do? . . . Sweet Jesus I'll just buy a new car!!!"

The Prius is a status symbol. They just haven't passed out the book yet that shows people what the latest status symbols are. It's also a chick magnet. :) Actually, I just made that last part up but am trying to start a rumor for all those men trying to attract women with their Chevy Silverados.

We will never abandon the status symbol thing; we just need to change the symbols.

One realises that things in the US are in a serious FUBAR when fuel economies of 30-40mpg are considered good. We have a car that does some 35mpg. It's an old vehicle, reaching the end of its life, and that's the only reason we tolerate such high consumption. If we do buy a new one, never in our minds would we even consider getting a car that wouldn't do at least 45mpg!

I hope I didn't get my figures awfully wrong, though in a way I almost wish I did, since it would mean the US is not that seriously messed up. In Europe the most common metric for fuel economy is "liters per 100 km". Google tells me that 5l/100km (the target number) is about 47mpg. Am I missing something?

Yeah, gas is twice as expensive in Europe. Adjust for that and you've got 23.5 miles to the gallon. In other words, about the same level of financial pain per mile per gallon.

Yeah! When I got my Honda Insight, I started ribbing my wife about her 'gas hog' Subaru Justy (45mpg).

Here in France fuel is expensive, currently at €1.24/litre ($3.50/US gallon). But our cars seem to achieve far better mileage than those in the US, no doubt due to their smaller size. I get circa 45mpg in winter and 55mpg in summer in my Fiat Punto (the Citroen C1 diesel gets 80mpg). A friend gets 55mpg from his secondhand VW Golf diesel.

A car is just another machine and its utility is in going from A to B with its passengers. The Punto costs about US$11,000 new. I wouldn't buy an overly complex and expensive vehicle like a Prius, why would anyone (especially with their limited life and expensive to replace batteries)? The technology already exists to get better MPG from cars and its already mass produced, the only problem seems to be in the mind of people worrying about what's an acceptable vehicle to be seen driving (fashion victims).

Like most on here I believe we're at peak, but I also believe we have to face the future with what we've currently got in the way of useful technology (which excludes about 90% of available technology). I'm also alarmed, as a European, that people in the US seem to think we're going to go from our current situation to a "mad max" scenario overnight or we're going to fix the problem with new technological/political breakthroughs. The threats we will face more than likely will be more mundane, but just as dangerous if not more so.

For example, today people are less hardy than their forefathers, this is a constant complaint by the military, but it also indicates we are also too unfit to live as our forefathers did. The biggest medical complaint around here, amongst people moving to the countryside, is back problems (including me). A serious back injury can mean the end of self-sufficiency, how mundane is that?.

If civilisation as we know it is under threat from its own complexity (ie. dependence on oil, economy, etc), then presumably we have to remove the threat by simplifying and making it less complex (eg. less technology). Probably impossible at the nation state level and probably only achievable at the individual, family or community level acting in their own self-interest.

I look forward to Westexas's article on ELP.

The desire to revert society back to a 'simpler' or less interdependent social structure, while emotionally attractive, can only happen as a result of a catastrophe that destroys the existing social order.

Just like in biology, the inexorable direction of social order is increasing organization and interdependence. This is governed by the 2nd law of thermodynamics (yes, I do have a degree in Physics, and no, that statement is not backwards, despite the common understanding of entropy as "maximum disorder"...)

Note that in biology, evolution always results in a more complex, more organized creature than the ancestor species - never the reverse. Single-celled creatures -> multi-celled creatures -> worms & such -> fish & reptiles -> birds & mammals... The same is true for societies. A more highly organized society, where the individuals have fewer and fewer degrees of freedom, and are more and more interdependent, has higher entropy than a less organized, less interdependent society. (This is my extension of the work of Prigogine, and Brooks and Wiley in modelling entropy for hierarchical information structures). But you can't reduce entropy - so whatever form of "simpler" society we want to achieve must have an even higher entropy than our current society. That implies that there will be vastly fewer choices, and a commensurate loss in security, for individuals in the simpler society

The only way to reduce interdependence is to reduce our standard of living dramatically. Since the only way to do that is to make a lot of people and companies poor who are currently wealthy (by shrinking their markets), and to make each of dramatically less safe than we currently are, it can't happen 'voluntarily'.

Note that it is entirely possible for individuals to live less interdependent lives within the context of the larger interdependent society without losing most of the benefits of the larger social organization. This argument is discussing the transformation of society as a whole, rather than individuals and small communities, which would destroy our ability to sustain most of our modern health care, food production, IT, manufacturing, etc...

I haven't figured out exactly what this means for our world today. Obviously, a catastrophic, or cataleptic decline in society would increase the entropy of society as a whole - so they are certainly very real paths to a 'simpler' social organization. But I can't conceive of any way for society to voluntarily move to a simpler form without a catastrophe (or catalepsis)...

There seems to be some irony that if you truly desire a simpler and less interdependent world, you are asking for a war, or famine, or massive decline in the available energy supply... pain and suffering for billions, and a return to lives that are 'nasty, brutish, and short' within a few generations, at most.

Personally, I do hope that we can sustain our modern, global civilization, and that we can transition, however painfully, to alternative sources of energy. While I am contantly outraged by the behavior of our governments and military and monied elites, and I see clearly the pain and suffering and injustice in the world; I also see that we feed, clothe, educate, nurture, and gainfully employ more people today than ever in history. More people live free from repression, disease, and violence than have ever done so in all of history. This is an extraordinary achievement!!! And we are learning, or re-learning wisdom throughout the world, slowly, painfully accruing lessons on the impact of our now massive presence on the now fragile globe. We are polluting less, we are conserving more, and I believe we will reach equilibrium, if we survive long enough...

So I will fight to preserve what we have; I work to educate friends and family (and soon my town council) to start thinking about lives without petroleum & natural gas. I will support HEV, PHEV, and EV with my consumer dollars; I will install solar HW and electricity and brag about them insufferably to my friends & co-workers. Above all, I will keep a sense of perspective about life, balancing the good and the bad, seeing past fear, toward hope.

And of course, I'll keep reading TOD :-)

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


Awesome post.

I'm sypmathetic to many of the normative political agendas that are now advertising their agenda as a solution to this problem but at the same time I've grown a bit tired of their bullshit, as you explain:

There seems to be some irony that if you truly desire a simpler and less interdependent world, you are asking for a war, or famine, or massive decline in the available energy supply... pain and suffering for billions, and a return to lives that are 'nasty, brutish, and short' within a few generations, at most.

What I find really ironic is there is now a subculture of people flying all around the country going to Peak Oil conferences telling us we need to live a simpler life?! Puh-lease.

sorry but hunter gather lifestyle was not 'nasty, brutish, and short'
it at the same time was not a paradise.
i do not know why people swing from those two extremes, but from what i can see from what all i have read.
it was a hard life, but you were better fed and suffered from less diseases then one can now. though at the same time you did not have people living into their infirm 80's. you had hard years but only when everything else is suffering.
you could get bad injury's but thats the same with farming.
quality vs quantity basically.

Security was orders of magnitude lower for hunter gatherers than it was for successive social organizations: Injury, famine from climate variability, predation (from other tribes and animals competing for the food/land/water resources) led to extremely short live expectancies. Education was non-existant other than for food production knowledge - literacy was not developed until societies were far more copmlex than the hunter-gatherer lifestyle could support.

Although it is a simple treatment, "Guns, Germs, and Steel" is an excellent description of the 'physics' of civilization, and the reasons why we can confidently say that we have progressed immensely since the days of hunter-gatherer societies.

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

The sources before civilization are very sparse. The sources of early civilization are not much more numerous, worse, they are biased as they were conceived by the top beneficiaries of civilization.

People don't fall from stairs if they're civilized?
That is a vulnerability of farmers, not hunter-gatherers. Nomads move when it becomes harder than they like to procure food. Farmers starve if their crop fails/granary burns/land floods/etc..
At least wolves stop being hungry now and then. Cars are always ready to bite. Besides, it's not like the tribal wars have stopped, or have they?
Life expectancy:
Use their cultural bias (i.e. exclude everyone before 3 years - call it a late abortion) and you get a whole different picture.
Come on, every tribe had elaborate customs and a large oral culture.
Finally, a good point. They did lack a broader vision of time and space, and the ability to accumulate knowledge. Still - what's the difference with a large part of today's population?

To conclude, it's not so simple to make an unbiased comparison; let alone a judgement about what kind of life is preferable for a homo sapiens sapiens.

I can't believe you are seriously arguing for a return to cave-man levels of civilisation. Tell you what. How about you practice what you preach ... log off, sell your house and go move to the African bush. Just don't get killed by wild animals, other people or ebola.

It also makes me laugh that you consider passing down creation stories from parent to child as "education". If I were to pass down ancient knowledge to my children they'd probably be taken away by the CPS ... talking crap about the moon and the stars doesn't equal an education in anybodies books.

I am not arguing for a return to caveman levels of civilization. Just providing another viewpoint, namely that history is not a single trend leading from misery, vice and squalor to bliss, virtue and paradise (of which our society would than, coincidentally, happen to be the pinnacle).

The knowledge and culture passed down was adequate for their needs. They wouldn't need a driver's licence, or a degree in Law. As for walking the talk: civilization is taking up all real estate right now, so I don't have the choice at the moment. Neither does my viewpoint require it. Besides, if I were to do that, I would end up cold and starving. Just like a hunter-gatherer in a city today. Civilized skills are not useful as a hunter-gatherer, and vice versa. The concept of "progress" is defined by civilization - of course they are better at it than a tribe.

"I also see that we feed, clothe, educate, nurture, and gainfully employ more people today than ever in history. More people live free from repression, disease, and violence than have ever done so in all of history. This is an extraordinary achievement!!!" Posted by Hindmost

But all this is entirely dependent on abundent and ever growing supplies of cheap energy. (And other finite raw materials as well)

Antoinetta III

No, it's not. We fed, clothed, and gainfully employed many more people than ever before in history long before fossil fuels were discovered.

True. It is interesting though that the major acceleration in population growth that resulted from improved medical 'technology' (like penicillin, vaccines, and doctors learning to wash their hands before delivering babies...) occurred at almost the same time that we harnessed fuels for mechanical work (e.g steam engine).

Clearly, supporting the current (and future!) levels of population is almost literally inconceivable without fossil fuels...

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

Note that in biology, evolution always results in a more complex, more organized creature than the ancestor species - never the reverse. Single-celled creatures -> multi-celled creatures -> worms & such -> fish & reptiles -> birds & mammals...

That's not true. It is one of the most commonly held misconceptions about evolution though.

Evolution has no goal, no end point, no 'feelings' over what is or isn't a better organism. It is a process that ensures that an organism is best adapted to its enviroment, nothing more.

There are plenty of examples of organisms that have shed unessicary complexity to move into new niches or adapt to changing enviroments. Snakes, for example, shed the complexity of limbs to move into their neiche (and some of the most primitive snakes such as pythons still have the residual bone structures).

If the enviroments changes and complexity becomes mal-adaptive then evolution ensures that either that complexity is shed or the complex organism dies out. Which outcome is likely depends on many factors such as the reproductive rate of the organism in question, the nature of the change, the degree of the maladaption, the presence or absence of competing organisms and the rate of the change.

If you are going to subscribe to the super-organism theory of applying biological principles to larger groupings of organisms such as ant colonies or even human society that is fine. But there is nothing inherent in biology that says the direction of change must always be from less complex to more complex.

The only direction that the change must go is from less adapted to more adapted to a particular enviroment.

Excellent summary.

Reminds me of Darwin's quote, "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."

Its so hard to articulate complex ideas in a blog format :-)

I agree that evolution has no goal or end point; I'll try to clarify my contention a bit. The Hierarchical Information theory outlined in "Evolution as Entropy" (Brooks & Wiley) as applied to biology states that the information contained in the genome of a given species & population is governed by the laws of entropy. This is more specific than a discussion of the morphological complexity of the species, and doesn't preclude apparent morphological simplification at speciation. Each speciation event results in a greater entropy in the genome than was present in the genome of the previous species. The higher entropy genome will have more complexity, but fewer of the possible combinations will be expressed in the descendant species. The # of 'excluded' combinations represents the entropy of the genome, and must increase at every speciation.

I don't have a ready description of how that works for the case that you highlighted - presumably the snake genome became more complex as it evolved from the ancestral species, even though specific features such as legs were no longer expressed.

Disclaimer: I am not a biologist, and I am liberally adapting a still-controversial model of information entropy to (loosely) apply it to social hierarchies. This is only a personal model of How The World Works, not a formal theory. This model fits my intuitive understanding of how social systems operate, but I have not explored the literature on this topic, and can't claim that this model is authoritative.

I don't subscribe to the super-organism metaphor (can it really be called a theory, if it doesn't have a causal model?), to the degree that I am familiar with it. I subscribe to the theory that the 2nd law of thermodynamics governs the the information embodied in hierarchical social systems, and the constraints that it imposes are analogous to those that apply to the hierarchical information embodied in the genomes of species. Thus the biological model of evolution can be used as a guiding metaphor for social systems to the degree that the physical information storage and transmission is comparable. Since there are significant differences in the way that information is stored and transmitted in these 2 types of systems, there are limits to the utility of the comparisons.

The inexorable trend toward increasing complexity and interdependence seems to be consistent with history as I understand it; except for catastrophic reductions in population, societies have always progressed from forms of low interdependence to higher interdependence, with commensurate reductions of individual freedoms. Obviously, this would be a tremendously complex contention to justify, with thousands of specific, fascinating cases to argue about. It would make a great Masters or Phd Thesis, I suspect. Someday...

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

"There seems to be some irony that if you truly desire a simpler and less interdependent world, you are asking for a war, or famine, or massive decline in the available energy supply... pain and suffering for billions, and a return to lives that are 'nasty, brutish, and short' within a few generations, at most."

More like within a few YEARS at most. Stuart and Fractional Flow have shown that horizontal drilling and water flooding leads to max production followed by collapse, not the 'long slow decline, forever' of Collin Campbell. The supergiants are set to collapse like a row of dominoes.

One of the biggest mistakes made on this board with forecasting is a focus on maximal cases, rather than the most probable outcomes; The assumptions that lead to nuclear war and total social collapse within a few months result from absolute worst case assumptions: everything has to go wrong at the same time, in the worst possible way for those forecasts to come true. This doesn't mean they are incorrect, but it does mean that they are very unlikely!!! They are more likely than I would like them to be, but they are nonetheless almost as unlikely as the forecasts that assume that everything will go right at exactly the same time. The reality will be between those two extremes, if you look at the scenarios based on actual likelihood.

Note that the data that FF and WT are working with to propose rapid collapse are very unreliable - a lot of good inferential logic, and some great detective work, but they are forced to make many assumptions by the lack of authoritative data.

The reason time matters so much in this type of analysis is that complex systems are very resiliant, and will react to adapt to any change in their environment. You can already see this adaptation happening today in response to the higher oil prices (if you look honestly), and the effort that society will focus on adapting will only increase as the stimulus grows stronger. The longer the collapse in oil supply takes, the better society will be able to adapt to it. Batteries and electric cars will becomre more popular, growers will find alternative sources for nitrogen for their fertilizers, people will conserve more energy as costs go up.

There will also be mal-adaptive responses, such as war, ever more aggressive exploitation of the remaining reserves, etc. Despite the confident predictions of holocaust here, these are also very difficult reactions to predict.

These adaptive forces are very powerful, and there are wide ranges of possible responses, with low confidence associated with any given response. This is the nature of complex system dynamics - prediction accuracy decays _very_ quickly as you move forward in time.

You may be too young to remember the Y2K scare, but the same type of focus on the extreme maximal forecasts was rampant: the computers would all fail, the russians would use that as an excuse to launch WW III. There were detailed analyses of the Russian troop and navy movements, and the rapid decline in the export of platinum and palladium in 1999 was taken as a clear sign that the invasion was imminent. People were stocking up on ammunition, sharing self-sufficiency lore, etc.

Yet, society did adapt, on a crash course of engineering that was truly remarkable. There was no collapse. Was collapse possible? Yes. But it was prevented by adaptation of society.

This crisis is bigger than Y2K by a long shot; the challenge is more fundamental, and the probability of a successful adaptation is much lower than it was in Y2K - I don't mean to compare the 2 crises, or imply that we are guaranteed to adapt to the oil peak; But it is very dangerous, and certainly unproductive, to assume the maximal failure scenario is inevitable.

Cataleptic decline is a very likely outcome (and I might argue has been underway for a decade or so already), and will take a generation or two, not a few years.

Again - rapid societal collapse is possible, but it is not yet likely, and it is certainly not inevitable

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

I'm also alarmed, as a European, that people in the US seem to think that people in the US seem to think we're going to go from our current situation to a "mad max" scenario overnight

I'm alarmed that people on this forum (and others) are ignorant enough of current events that they say things like this.

Plot of Mad Max: A big nasty warlord named "Lord Humongous" leads a group of armoured vehicles round the desert killing people for their oil.

U.S. foreign policy: A big nasty warlord named "Dick Cheney" leads a group of armoured vehicles around the desert killing people for their oil.

"Mad Max" is not something that is going to happen "overnight" because it already happend "last night." Just because the slide to Mad Max hasn't happened in YOUR town doesn't mean it isn't happening around the world as we sit here and type.

See the following cities, all of which have collapsed from great modern cities down to some form of Mad Max type existence due to various aspects of the "long emergency":

Baghdad (due to Peak Oil war)
Detroit (due to Economic collapse)
New Orleans (due to Climate change)

Up next, imho:

Mexico City

As the saying goes, "the future is here, it's just not widely distributed yet."

At any opportunity to press forward an agenda some will.

New Orleans was Climate Change you say..???.

New Orleans was a disaster from. (drumroll). Levees failing. The Hurricane you say is from "climate change". Hurricanes have been happening as long as history.

Have you read Greg Pallast's reports on the levees breaking. When it was reported to the WH. When it was first known. Go to Gregs web site and read that report. Talk about a cover up.

Climate change destroyed New Orleans. Nope, man did it, not the Hurricane. Not built to spec, poor construction, etc etc, and no maintenance, and more.

Heard of those reports about explosions by the residents at those levees. Yea just some nuts, why believe them, right.

Also something very unusual happened when Katrina approached New Orleans. Go watch the satellite imagery. It was headed dead for the city. Direct hit, and then it dropped in intensity. Hurricane two when it came ashore, not a 5 as the media misleads. The water surge got the Gulf, All the water piled up in the Gulf from the 5 force. It still rushed ashore. If the cane had been a 5 on top of that as it crossed land, then what you see would have been much worse.

See the satellite imagery that showed the Eye developing a Pentagon" of clouds spinning inside the eye when it was 5. There was the same effect in other fives earlier. Never seen before.

Then when it was almost to New Orleans. Katrina "jumped" to the east. I mean "jumped" because its so quick between images. bumped is another word some use.

This photo from NASA. http://saturn.jpl.nasa.gov/multimedia/images/image-details.cfm?imageID=2552

Explain this with current physics model that you adhere too I expect.

The implications from this discovery will turn your world upside down if they are "real". Its almost an admission in a way, or its something else.

Chimp, every planet in the solar system is warming, including earth, pluto, Saturn, Jupiter, Mars. The Sun is active as hell, and Nasa just put out a press release saying that they were shocked to find how much more active the suns surface was than expected. They expect the worst Sun spot cycle on record. This photo can explain why. Note it is can. No one should claim victory, but lets see what happens. This photo says that Maxwell and ALL his equations would have been served if Heavyside had not hidden/distributed them. That the people that call Tesla a nut will have to eat crow.


Read this web page for more info.

Hyperphysics and hyperdimensional pyhsics may not be 'the woo woo world that "they" have tried to make it.

wonder why. I mean Nasa only held back this info from the public for how many years it seems. They took a similar photo either 15 or 25 years ago, I saw different statements.

This photo can lead, and I say CAN lead, to what people call "free energy".

Of course understanding what I do about the subject I will say this is also very possible. Man in his current state of "existence" will have at the least great difficulty
9in a very short breakdown in a very complicated subject) "control" this force when experimenting. Military minds in control for long, this would be a problem perhaps.

Of course any similarity between the timing of the release of this image, and all the hub bub about Peak Oil and a new energy source to calm the public, well just might be only a coincidence.

Eugene Malove says there is prove of this technology working in a primitive state. This should scare the hell out of you, because of who is developing it. Not that they will succeed, but of what will happen if they continue to build upon the crude models that they are using. Just my opinion. What the F do I know, huh.

Quid Clarius Astris
Ubi Bene ibi patria

Thanks for posting the Halexandria link. It's been a long time since this layman read anything mentioning scalar tech. It was my earlier reading of Tesla's R&D that led me to scalar electronics.

What you're saying is Dick Cheney will have access to not only an arsenal of hydrogen bombs but also zero-point bombs.

Great, I guess it won't be a very "long" long emergency if that is the case.


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

If you are talking about anti-matter bombs, not in the realm of possibility. We cannot make anti-matter in sufficient quantity for even a single bomb.

It's not an antimatter reference. Zero point energy is well known to exist, and reconciling its existence with the observed properties of the universe is an open problem in physics. The zero-point bomb is a hypothetical device somehow capable of rapidly "extracting" large quantities of zero-point energy, presumably converting them to heat and thus exploding violently. Unfortunately for the putative device, the scale dependence of zero-point effects implies that really impressive energy densities would preclude the use of building blocks as large as atoms.

Mention of this supposed technology occurs in conjunction with mention of "scalar" effects. E.g. if two "vector" fields have the same magnitude and opposite direction, the result from superimposing them is not (as conventionally) a cancellation, but rather the generation of a "scalar" field of twice the intensity. Oddly, the large number of technological devices whose operation depends on field cancellation (common example: UTP ethernet cable) don't seem to suffer ill effects from "scalar" interactions.

The pentagonal flow pattern is intriguing - but not unprecidented: polygonal structures form (apparently) spontaneouly in various fluid systems. Such patterns are easily observed in hydraulic jumps (e.g. see this pdf). Convecting fluids show regular (classically hexagonal) patterns. Although the conditions are very different from the examples given, I would say it is not obvious that the pentagonal cloud structure is unnatural.

Hello djd,

Thanks for your post, and for the references.

Is there any chance you might write this out and put it in some context, so that I can better grasp what your points are? (In fact, a guest post on "zero point energy" from the point of view of physics/engineering might be something the editors would go for...)

I take it you are trying to clarify for us (and I welcome it), what is shown and evidenced by current physics (and engineering) and what is not? I'm with you for sentences one and two, and would welcome more explanation starting w. sentence three.

I think what I'm confused about begins w. paragraph two, where you talk about the "supposed technology", and then go on to give an example. So, from there on, I don't know if you're talking about the "supposed technology" or ...let's see...is the example you give true? Or not?

Anyway, some greater context would be greatly appreciated.

Yes, gas is expensive in Europe... and much more so than your converted price!

Sorry to correct your conversion, Monsr. Burgandy..

Euro 1.24/lt x 3.88 => 4.8113 Euros per US gal.

x 1.3277 => $6.38 per gall

Ah! mea culpa! Your quite right canbrit, I inverted the $/€ rate. Too much burgundy no doubt :)

Some spirited responses to my post, many of which I sympathise with. I have no doubt that we're heading towards a catabolic collapse caused by a complex intertwining of economic chaos, resource depletion, climate change, over population and corresponding geopolitical strife. I've already responded to those threats by selling up and moving to a place I believe (rightly or wrongly) will be less affected by the coming catastrophe (nowhere will be unaffected so its only a matter of degree).

However, I'm also sceptical about the commonly held scenarios that seem to becoming somewhat ingrained in peoples perceptions. Being on the ground and preparing, I need to know what kind of reality we will face in the future, so I can use my current resources (ie. money, health, etc.) effectively to prepare for the problems that will arise. How do we transition? Most likely we will use what we already have to make the transition, not something that doesn't yet exist or exists but offers no real solution now.

Probably the main future threat we face security wise will be from our own government/State. For example, it's more likely that food will be appropriated by the State to feed the cities rather than by marauding gangs of starving city folk.

Hi Burgundy,


re: "...commonly held scenarios that seem to becoming somewhat ingrained in peoples perceptions."

Scenarios are just that - scenarios. I'm interested in the degree to which people can effect change, and in what way. To rule out positive effect is to overlook much of history. How much? What scenarios can we examine, and how thoroughly? What scenarios are excluded by individual bias and/or lack of information?

re: "For example, it's more likely that food will be appropriated by the State to feed the cities rather than by marauding gangs of starving city folk."

This looks to me to be a scenario worth expanding for purposes of positive action. For example, www.ftpf.org.

Which means they'll be stuck with their gas-guzzlers, no matter how expensive gas is

Exactly. That is the flaw in the argument that we'll all gonna switch to PHEVs and be saved, or the calculations of the impact of new-model efficiency based on the historical rate of turnover of the car fleet.

My argument too. Most folks can't afford to buy a new vehicle if they can't sell their current one to someone. Who is going to want these monsters, except as homes?

Think that might be connected to this?

Glut of used cars from U.S. drives down prices

A flood of used cars pouring across the border from the U.S. has helped drive down prices for second-hand vehicles here, a major Canadian bank said in a report Thursday.

The drop in prices for used vehicles is the steepest since the early 1990s recession, and will likely accelerate further as a surge in leased cars come onto the market this year and next, the Scotiabank report also suggests.

"The decline began in Canada last summer, as rising imports of second-hand models from the United States undercut pricing for pre-owned vehicles in Canada," said Carlos Gomes, Scotiabank's auto industry specialist.

"However, the weakness has spread south of the border, with slowing U.S. economic growth beginning to dampen household purchasing power."

The slide in the bank's Canadian used-car price index has accelerated in recent months, the report said, noting that by last month it had dropped to eight per cent below a year ago, the weakest performance since the early 1990s.

The decline reflects a 40 per cent year-over-year surge in the number of second-hand vehicles imported from the U.S., as well as some reduction in demand for pre-owned vehicles, it said.

While the number of late-model imports into Canada from the U.S. has surged four-fold since 2000, Canadian exports of second-hand vehicles to the U.S. have been undercut by the appreciation of the Canadian dollar, it noted.

Canada now has an annual trade deficit in used vehicles of more than 42,000, a turnaround from a surplus of more than 34,000 as recently as 2002.

Although this is based in Canada, I have wondered what the ultimate point to the new car buying binge of the last five years. I figured the used cars HAD to be piling up somewhere. Everyone I know traded in their car in the last three years and got a new one.

Which is why you really need to rethink this comment from below.

I would argue the US automakers are spending a lot of money on advertising and it's doing zilch.

Without the advertising, they'd be gone. What keeps them alive is the ability to sell lifestyle instead of actual product.

Which is what the entire US economy runs on. Fake reality furnished by fake money.

I stay away from TV where I can, but I have a strong hunch that Toyota and Honda spend way less on advertising than GM and Ford.

Yes, the vehicles are the status symbols. If someone were to judge me based upon my vehicles, which I'm sure plenty do, they would either take me as poor (which would not be accurate) or they would take me as not caring about status symbols (which would be correct.) A more correct judgement would be that I'm CHEAP when it comes to things that don't matter, such as the car that I drive and the coffee I drink. 1985 2-seater car with the passenger seat and all interior removed for decreased weight and increased utility. The thing looks like hell but it's not any less safe than it was the day it was purchased by its original owner back in '85. I bought it for $300, fixed it for $60, and it gets as good gas mileage as a Prius while having 287,000+ miles. As a sign I put on my car says, "My car cost less than you CAR PAYMENT."

Soon many more will be riding bicycles to work for small distances and scooters/motorcycles for longer distances as prices increase. :)

A problem with the $300-car strategy is that you may also need to keep the larger car for some purposes, and the insurance cost of a second car may out-weigh the fuel savings. Nevertheless, I've done that, kept two cars, one of which was very small and cheap, in part to set an example out on the road that one CAN get from point A to point B cheaply (and survive to tell the tale).

I want your mechanic who does anything for $60.
Or even the car that has a part for <$60.
I thought I was a cheapskate w/'91 Civic. What is your vehicle anyway? Most '80's production cars were not that good.

1985 Honda Civic CRX HF. My mechanic is me. :) The part needed was an alternator, which was $60 at the local alternator/starter rebuild shop. I turned in the original failed part as a core, and got the rebuilt one for $60.

It's rated at 57mpg hwy, but the best I've gotten out of it is 51mpg combined city/hwy driving. Recently I discovered that two of the 4 cylinders weren't firing due to faulty spark plugs, so maybe after I replace those, I'll be able to hit that 57mpg hwy mark.

In fact, if I hadn't resurrected the car, it would have been sent to the junkyard as a parts car due to it's appearance. It's a real joy to drive, however, as it handles very well. The only problem with it is no A/C, I seem to get harassed more often by the police, and I have no expectations of being able to pick up women while driving the thing. Haha.

CRX HF's are magical little cars. Honda did a couple of interesting tricks to squeeze the fuel mileage out of them and their displacement is a little less than the regular ones and the SI's. Good handling can not only compensate for low power, but decrease braking as well. The ability to carry momentum through turns means you don't have to brake into the turns, and thusly don't have to get on the gas again when exiting. This carrying of momentum through turns also severly agitates mustang owners, whose overweight cars are unable to pull away from a little car making half (to 1/3) the horsepower and twice the fuel economy ::devilish smile::

Indeed! Little 64hp beast, mine is. I originally was planning on taking out the current engine and putting in a 160hp B16 engine, but that was before the gas price spike, and I decided that I liked the car just the way it was. :)

I have a 1988 (second gen) CRX Si with the 1.6 liter 105hp engine, bought it for $1,800. I too had planned on some power upgrades...more specifically rebuilding the original block and supercharging it. But...peak oil, ya know. Not exactly the most prudent thing to do ;) It gets a good 37mpg in mixed usage with more than enough power to satisfy some occasional speed whims.

The interesting thing about forced induction is that you can usually get the power without the corresponding drop in fuel economy when you're cruising. Case in point, ENDYN's 1989 Civic Si (Tiny Link) which makes 487hp while getting 30mpg. I'd like to see someone make an 600-800cc twin cylinder with some serious induction boost, and good aerodynamics. My guess is that they can make a car that has better performance than an Insight while making the same or perhaps much better fuel mileage.

I've thought about getting an Insight, but dropping $10k-$15k (aka 1,250 gal - 1,875 gal of gas @ $8/gal) on a car that doesn't get radically different fuel economy just doesn't make sense to me. I'd be first in line for a Loremo though, if they can bring it to market in the $15k-$20k range.

487 hp while getting 30 mpg (of gasoline) is simply impossible - you'd be going faster than the speed of sound.

487 hp is 363 kW. That's 363 kJ/s, or 1310 MJ/h. The energy content of gasoline is 32 MJ/L, so assuming perfect conversion - which is impossible - a power of 363 kW requires 41 L/h (10.8 US gallons per hour). So, to get 30 mpg while producing 487 hp you'd have to be going 324 miles per hour. If, instead, the engine and drivetrain and tires etc. were 1/3 efficient - about the best you could hope for, especially at these speeds - you'd be burning 123 L/h (32.4 US gallons per hour), meaning 30 mpg would require about 1000 miles per hour.

I very much doubt this car can maintain that speed.

(Quick back-of-the-envelope sanity check: 200 hp aircraft engine at 75% - i.e. 150 hp - burns about 10 USgallons/h. That suggests slightly under 1/3 efficiency, which is about right. Typical speed of a single-engine aircraft with 200 hp is about 150 knots, or about 170 miles per hour -> 17 statute miles per US gallon. That's about right.)

Now, a maximum of 487 hp output from the engine for short periods of acceleration, while the car overall is still able to get 30 mpg - that is possible. My point here is that people easily confuse these issues. Power is power, whether you measure it in horsepower, kilowatts, or chemical potential of a certain amount of fuel per unit time. What you are really interested in is maximum torque for acceleration.

You'll notice in my original comment preceding the statement of power and fuel economy that I said:

"The interesting thing about forced induction is that you can usually get the power without the corresponding drop in fuel economy when you're cruising."

Which, to me at least, is saying the same thing you just said.

JustZisGuy: "Now, a maximum of 487 hp output from the engine for short periods of acceleration, while the car overall is still able to get 30 mpg - that is possible.

It's not a racecar, as you can tell by the article, so it wouldn't be on the gas all the time getting in and out of turns. So as street vehicle, it only uses the power for quick bursts of acceleration, and then settles into a cruise.

My point was that supercharged engines are a different species. Whereas if you try to develop this kind of horsepower with displacement alone, you'll be somewhere around 6 Liter territory (the one in the civic is just less than 1.6 liters) and seeing fuel economy in the mid-teens. The large displacement engine carries the burden of its horsepower all the time, there's always the drag from the big pistons, valvetrain, compression, etc.

But a supercharged engine is able to use a small base displacement and for periods of time cram a lot of fuel and air into the cylinder for power, but when you back off the gas again, return to that small displacement economy again - without the extra drag burden. So theoretically, someone should be able to develop a small displacement motor with high boost that will allow high (enough) power for decent acceleration, but return very high fuel economy when it's not being rung out. My guess is that you could use a 600cc - 800cc twin cylinder engine in civics/echo/corolla and get the same performace, while drastically increasing fuel efficiency.

Hey OldHippie, if you have an older car (say about 86-87 or older) that doesn't have too many electronics on it, then I'll fix it for you for less than $60 per hour. You just have to get it here. :-)

I just bought a Huffy Alumina 8000(used) to ride to work.(I live less than 4 miles away). My car is a 1989 Dodge Aries Wagon. It's paid for. When I need to go farther or need to transport something I use that. No point in buying a new car now.(And, yes, I too could afford to buy any car that strikes my fancy, but why?)(Yes, I'm a penny pincher, I admit it. I just can't get myself to spend money I don't need to.)

A thing to remember about the whole “prices are high, but I drive an SUV” mindset, is that the poor are already hurting. Their suffering started several years back in the third world and is working its way to Americas poorer citizens. The shift in mindset just hasn't percolated up to the middle class yet.

What really made people change was not being able to get gas, or else waiting in LOOONG gas lines for a half hour or more. Price is one thing, risk of not getting it, or having to plan ahead to be able to get it really makes the difference.

I don't think it was the long lines that made people buy fuel efficient cars back in the late 70's/early 80's. The cruising range of a small car isn't typically any greater than in a large car. So you'd have to wait in line just as often with a small car, you'd just be buying less gas when you got to the front of the line.

Besides, from my memory the long lines were just a short term thing. A few weeks? A couple month tops? Most people did not buy a car over that time period.

The lines were not for too long a time, but the high prices and memories went further. I bought a 45 mpg diesel rabbit at the time - it would go over 400 miles between fillups. My current car is a 1991 civic and I get 41 - 44 mpg, depending on winter/summer and I drive for mileage. I regularly fill up after 425-450 miles. 20 gallons in an SUV won't come close.

Mostly, though, I think the impact was on mindset and sense of vulnerability, brought home by the lines. The social mores changed for a period to the attitude that smaller cars and efficiency were something to value and shoot for.

I've got a '97 Jetta TDI that I average around 50 mpg with. It gets around 700 miles to a tank if I drive it easy. I also happen to have a 250 gal tank of home heating oil (same exact fuel as diesel) in my basement that can be used in an emergency. So I figure I've got around 12,000 miles of spare travel range if the worst were to happen :)

I was in College during the Oil Crisis of the 70's. Where I lived and went to school was rural and very wealthy. I had a girlfriend who lived 50 miles away. I never experienced the gas lines or fuel shortages depicted from that time, so obviously some people got all the gas they wanted(my community) and some didn't(big cities and poorer areas). Honest to God, I burned gasoline like it was water during that time and can't remember once sitting in line for it.(although I was outraged when it went to .40 then .60 a gallon.)

I posted an addition to my blog relating to alternatives to oil and natural gas. In this installment, I answer questions like

1. I love my SUV. Why can’t we continue to use oil and gas as in the past?

3. Won’t corn ethanol cover our fossil fuel shortfall?

5. Could we solve our problem by replacing our SUVs with very energy-efficient models, like Priuses?

Eventually, the plan is to put the various installments (probably fixed up somewhat) into a permanent educational website, aimed particularly at high schools and colleges. I am working with Kennesaw State University on this project.

Very nice and informative blog. Good introduction for those previously uninformed on the topic.

Just a couple of days ago we saw a $5 spike in oil on the false rumor that Iran fired a missle at a US ship. I think oil could spike easily if certain actions come about. For instance there is this interesting article:


I wish you luck with the commute. It will probably take about 75 minutes... though the net time (subtracting the car commute) will be a lot less. And I can also tell you that you will feel like a million dollars after about two months. So go for it.

Another thing you will discover is that your life-style sensibility will sharpen. As you ride, you will discover interesting places to live that you would NEVER come across via car. These places will have a good grocery and branch library close at hand. So... more options reveal themselves.

75 minutes sounds about right. If I also subtract time that I would have spent at the gym on the stationary bike, the time spent would be a wash, I think :-).

Initially what I need to do is go to the gym for about 2 weeks to build up a little endurance. I need to get some good panniers to put my work clothes, and I should be ready to go. Last summer, 40 mile rides weren't that big of a deal once I got into the swing of it. We have showers at the office (just picked up the key yesterday), so there is no problem there.

There isn't a great place to lock up the bike at the office. I can chain it to a tree outdoors, or I can just bring it into the office with me. No bike lockers that I have seen so far.

I also am viewed as some kind of alien for commuting by bike, and I only have six miles to travel. Apparently, that distance is unthinkable for the average Oklahoman. I do cheat a little - my office building lacks showers, so in the morning I take the bus (they have bike racks mounted on the front) and ride home in the evening. Total transportation cost per day: $1.00. Rainy days can be a little miserable but fenders help a lot.

Back in the late 80s I was working in Alexandria VA and living two miles away in Belle View. I biked to work and floated the idea of getting rid of my car altogether, getting a folding bike and riding the Metro to get around the city. My girlfriend looked at me in alarm and said, "You've gotta have a car!"

That's where my house is - I know the area well. Getting to work from that location by bicycle was pretty much impossible. Too many roads with poor shoulders and limited bike paths. I suppose I could have constructed a route, but it would be close to 40 miles each way. From my girlfriend's house the story is much better...

The other thing I notice as I look through the maps of the area is the problem of suburban development with all the cul-de-sacs. If things were laid out on a normal grid of some sort, you could ride on the side streets that have light traffic and not get run over. With all of the cul-de-sacs, you are kind of forced out onto those major roads whether you want to be there or not.

Gosh I hate those dead ends that turn a potential 1/2-mile walk into a 4-mile drive...

I guess one good outcome of the falling values of suburban homes will be that it will become more feasible (and acceptable) to demolish a few of the houses to create road (or at least bike path) connections between the cul-de-sacs.

In a lot of places the roads are already there, but they block autos to control traffic through the area. But in Arlington they just have a zillion creeks.

In the early 80s I had to commute from Four Corners to Bethesda MD. Snooping down the back roads I found a pedestrian bridge across a creek that was just wide enough for a bike or moped.

I recall a funny situation. If you biked south on the wide (East side) sidewalk of Washington Boulevard you would pick up the Mt Vernon bike path for an beautiful and low stress ride to Belle View and points south. But just as you crossed the city line, there was an entrance to a ritzy condo development to the East. I guess they didn't like having to wait for bikes, because they put up a gate, I think, requiring that cyclists get off and walk across their driveway (which at that point was really part of the public R.O.W.).

A ton of people used this path for biking, walking and running. Although the condo people were pretty snooty rich, a lot of the cyclists were snooty rich, too. There were a lot of official complaints, and ongoing coverage in the local rag.

Most people just swerved into the road to avoid the gate. I drove in one morning, and someone had set the gate on fire. I moved, so don't know how it was eventually resolved.

A comment on the hidden costs of ethanol and E85

I just did a quick back-of-the-envelope calculation and figured that the driver of a 2006 Flex-Fuel Ford Taurus will spend, conservatively, about 40 minutes more per year at filling stations when using E85 than when using straight gasoline, due to the lower mileage when using E85.

The raw data on mileage I used were from here. My primary assumptions were for 10,000 miles driven/year and that it takes 5 minutes per visit to stop and fill the tank (it is difficult to find statistics from a real ergonomics study).

This is a relatively small increase in opportunity costs associated with ethanol (i.e., would the average person have made good use of that lost 40 minutes/year?) but little things do add up.

There have been excellent discussions on TOD of some of the problematic issues of ethanol production in terms of its impact on food and agriculture and other major components of the economy, but IMO it would be interesting to see estimates of the cumulative effects of the much smaller (and largely hidden) marginal costs of a nationwide switch to E85. On the usage side, examples might include the tiny increased risk to our health associated with slightly more time spent at filling stations breathing the fumes, the cumulative costs to the economy over time of the increased corrosion associated with E85 versus straight gasoline, etc.

On the production side of the pending ethanol expansion, I also wonder about the cumulative effects on the soil of planting, for example, 90:10 corn:soybean ratios versus 50:50 corn:soybean for an extended time. I'm not a farmer, but I imagine that this will eventually alter soil nitrate levels and dynamics and possibly increase the need for FF fertilizers even beyond the base levels needed for corn versus soybeans on a per-crop-year basis.

I don't know if modern farmers plant soybeans only for the value of the soybeans, or what the added value to them of the leguminous nitrates might be, but the invention of crop rotation had a profound effect on the growth of early civilization for a very real reason.

A very lucid presentation on tranportation alternatives from Tesla:
Transportation alternatives

(Apologies if this has been posted before)

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

I just tell them that when things get really bad, they can live in their SUV/truck. I get some very strange looks...

Streetsblog had a post recently about the Tiki Barber ad for the Cadillac Escalade that premiered during the Super Bowl.

Streetsblog says:

[It's] a moody, impressionistic montage that shows the former New York Giants running back driving solo through the streets and over the bridges of New York, talking about "seizing opportunities." The tagline is "Life. Liberty. And the Pursuit."

Auto companies spend billions every year on advertising. They don't spend those billions as a lark. They spend because advertising works, and works very well. Advertising is a hard-nosed business decision. The billions that car companies spend on ads are earned back many times over in vehicle sales.

L A,

I would agree with you on that bit about advertising. When I took my intro courses on marketing I realized really quick how well it worked. It is almost a science and one only need to know which choices to make to create the desired effect. However I would disagree with your assesment that advertising is working well for the automakers. Marketing is most cost effective when the marginal gains to net income are larger than the marginal costs to advertise.

I would argue the US automakers are spending a lot of money on advertising and it's doing zilch. They only need to market sales promotions(crap that's all the time), not just buying time to talk about your name. Depending on the plate name, brand awareness is largely unaffected by not advertising. Now that would change when they dont market for awhile and then step back up to the plate. GM's problem and Ford for that matter, is they need to hit the reset button and can't seem to find it.

tate423: Au contraire, that advertising is working very well - they are still selling those piles of crap called SUVs. Their major problem is that they can't build quality cars, IMO.

A lot of people are insisting that they won't get rid of their big vehicles (I wonder if these are some of the same people who are getting into trouble with their mortgages). What that says to me is that prices have to go a lot higher to change behavior.

NY Times: Drivers Shrug as Gasoline Prices Soar

HOUSTON, March 29 — Prices at the pump are rising again, much as they do every spring as oil traders bid up the price of crude ahead of possible summer shortages. Possibilities for more conflict in Iran and elsewhere in the Middle East are adding to the surge.

But there is something new this time, energy experts say, in how drivers are reacting — or, more accurately, not reacting, even as the price of gas has climbed over the last two months to a national average of more than $2.60 a gallon. It has topped $3 a gallon in many parts of the country, particularly along the Pacific Coast.

... as Americans enter the sixth year of rising oil and gasoline prices, their shift in driving habits this time has been much less extensive. What’s more, in recent weeks, gas consumption has gone up, not down, and drivers are changing their daily driving habits only slightly.

I wonder if one of the reasons gas consumption is rising lateley is because more Americans (and Canadians, for that matter) are opting to drive rather than go thru the hassle of flying what used to be a short plane trip.

It would seem to me that even if miles traveled stayed even, gas consumption would go up due to the lower mileage you get from the now-ethanol-laced "gasoline".

Contra "Drivers Shrug as Gasoline Prices Soar": January 07 Vehicle Miles Travelled went down 0.71% compared to Jan 06. 2006 had 6 negative months in Y-O-Y VMT; 2005 had 5 negative months. Since 79-80 until 2005, the rise in VMT has been inexorable, with only 13 negative months in VMT growth for the whole period from 1981 to 2005.

I realize the point of the article was that gasoline usage is perhaps surprisingly insensitive to price rises. There is, however, some correlation -- at least with the "discretionary" driving at the margin.

OK, this ethanol thing is hitting too close to home and too near to bone!


The following article "Forget Ethanol; Save Corn for Bourbon" from the Detroit News shows that others coming from a non-PO standpoint have also recognized the ethanol craze for the boondogle it is:


In the article, the author states that the ethanol subsidy will amount to $7 billion in '07. I'm wondering however what the direct corn subsidy will be. Doesn't the US gov't basically guarantee a certain floor price for corn, and if corn continues to sell in th $3.80 per bushel range, does this not create a sort of twisted incentive for the gov't to support high corn prices (bc/ then they don't have to support corn with an agricultural subsidy)? I think I heard once that the gov't guaranteed $1.85 as the floor price, and steps in to pay the farmer the difference when it dips below that. So even though the gov't may pay more for the ethanol subsidy, they'll pay nothing for the corn subsidy- or is my understanding of the corn subsidy wrong?

Along the same line of thought:

Milk prices expected to rise 9 percent:
Rising fuel and feed costs seen hitting dairy farmers


Leanan, I think you need to include new key words in your news search; food, price, increase.

CNN had a story about this this morning. They said it's not just beef and milk. It's everything, not least because of the widespread use of corn syrup in the American food industry. The CNN hairdos were all a-twitter over the rising prices of chocolate bars and soda pop.

It may also be my imagination, but things seem to be smaller than they used to be...candy bars, granola bars, less cereal in the box...am I being paranoid?

Charge the same amount, but put less product in a package?

This is typical of a inflationary environments. Hershey used to have a ten cent piece I think. He would purposely vary the size of the bar, but not the price, with the rising/falling costs of cocao. However I think it was the seventies that finally killed this chocolate bar. I have noticed the reeses peanut butter cups in the dollar package are smaller, A LOT. I noticed it real quick, but some people don't. I'm sure you'll see smaller sizes, same prices in an effort to maintain prices. We know costs aren't decreasing.

Makes a lot of sense. Thanks for the observation.

Hi Dragonfly41,

Just a little suggestion...lots of treats can be homemade pretty cheap. One of the least expensive grains is bulk steel-cut organic oats, (fine cut). The fine cut makes them easy to eat raw, or to use for granola.

I heard that the magicians who calculate inflation to keep it low substituted beef with ground meat.

I wonder what they'll do about milk, substitute it with water perhaps?

They have a much better and flexible trick than that to keep the number looking low! Try to understand hedonics and what an absurdity this is as well as how easily it lets the BLS lie about the real inflation rate.

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

Right, but when those checks written at the grocery store start bouncing, people may notice. Personally, I've noticed rapid increases across the board in prices at the local supermarket in recent months. Something like 20-50% in most things that I buy. Not just the produce from California. Dairy, meats, paper products, etc. Even toothpaste.

Source: USDA, industry statistics.

2005-2006 U.S. Corn Use By Segment
Feed/Residual 6.1 billion (54.5%)
Exports 2.1 billion (18.8%)
Ethanol (fuel) 1.6 billion (14.3%)
High Fructose Corn Syrup 530 million (4.7%)
Corn Starch 275 million (2.5%)
Corn Sweeteners 225 million (2.0%)
Cereal/Other 190 million (1.7%)
Beverage Alcohol 135 million (1.2%)

pvilleblue: Looking at your data, just for exports and ethanol, will ethanol pass exports soon. Maybe someone will come up with the "Peak Corn Export Land Model" . . .

Re: "Exxon-Mobil CEO: Oil Volumes Will Keep Growing" Tillerson says that "the world’s oil would not run out in his lifetime". Means nothing... Rex doesn't buy green bananas.

U.S. can cut oil imports to zero by 2040, use to zero by 2050

This guy seems to really believe that the "market will take care of matters". Obviously, in the long term, the market will take care of matters - people will be obliged to buy lighter and more economical cars. However, with 140 million cars in the USA, the changeover could be dramatic.

Nowhere does he mention changing lifestyles or public transport. I guess Europe and Japan have nothing to teach the US.

U.S. can cut oil imports to zero by 2040, use to zero by 2050

I agree that the US will cut oil imports to zero by 2040; because by 2040 no one will have any oil to export.

In 2005, there were just under 232 million passenger vehicles registered in the United States. The US passed the 140 million mark in 1983.

woah it makes 0.77 car pro individual..

Leanan, link to "Quarter of UK Gas Reserves to be Stored on Island" doesn't work.

Sorry, I forgot to put it in. Try it now.

thanks, unfortunately not worth the wait.

The storage they talk about is for 1 billion cubic metres of NG, which is less than 3 days peak supply

Hardly the same as "a quarter of the UK's NG reserves".

On the other hand, if North Sea reserves really are down to only 4 BCM, we have a major problem on our hands.... that's a joke btw....

Just goes to show how journalists don't understand the word "reserves". They seem to think that SA has hundreds of billions of barrels worth of oil stored in tanks somewhere, all they need to do is invest in more spigots.

Though the thought, "why don't I just get rid of my cell
phone", did occurr to me I found this article interesting.

Death of the cell phone charger

Oh God. Just what we need. I think it's terribly cool, however I'm sure it's just as terribly INefficient.

I don't think I'd want to live in MORE RF fields, thank you very much.

Big deal.

China has 2 billion tons of oil in reserves

For China, this nothing to brag about, this is absolutely alarming! Converted to barrels, this is about 14.7 billion barrels. China currently produces about 3.7 million barrels per day. That is about 1.35 billion barrels per year. That means China has a reserves to production ratio of less than 11.

China's cumulative production is about 34 billion barrels. If they have 15 billion barrels left that would give them a total URR of about 49 billion barrels. This means they are about 69% depleted.

Question: Is it possible to be 70% depleted before you reach peak production? I would say there are scenarios where this is possible. Cantarell would be an example. North Ghawar is probably another.

Ron Patterson

China has 2 billion tons of remaining oil reserves. Translated, that means China has roughly 14.66 billion barrels of remaining oil reserves, less than the US which is also post-peak.

Then we read that China is converting 1 million tons of coal to oil per year, which is 7.33 million barrels per year.

But China consumes (according to the last number I can find from the EIA) about 5.6 million barrels per day. That coal to oil plant gives them 1.3 days of oil (assuming no growth in demand, which is absurd).

But more telling is that China uses 2.044 billion barrels of oil per year, or 278 million tons.

That 2 billion ton/14 billion barrel reserve doesn't look so hot now, does it?

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

If 1 ton of coal equals 7,33 barrels with oil, there is no reason to worry about Peak Oil.

Actually I misread that. They are producing 1 million tons of OIL per year which is 7.33 million barrels. The conversion rate, from the article, is 3.45 million tons of coal into around one million tons of oil products. So the rest of my assessment still stands but it's even worse than before.

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

Just referring to hard numbers may be very misleading without trying to put them into a perspective.

One million tons a year or 7,33 Mb/year converts to 0,02 million barrels a day or 0,02 Mb/d.

GreyZone why don't you use some mooooore time to try to understand the perspective of the NUMBERS before you post?

Hey all,

Has anyone got a scorecard running on the number of African/other 3rd world countries having significant oil/gas shortages?

So far, I see Uganda, Zimbabwe, and Nigeria(oddly enough). I am sure there are more...anyone add to this list?

These are the wavefront of demand destruction and it would be good idea, I think, to watch for growth in their ranks.

I have read that Ghana is having some serious energy issues. Not sure if it is oil/gas shortage related.


Global peak: 2007 - 2010
Global decline rate, Post peak: 2-4%
Economic response: Severe global recession, ~5 years, then slow recovery

Nice to meet people with the same hobby I also like to keep track of forgotten wars. Somalia is my current favorite

Philipines - people are cooking with wood on the street

also Nigeria, Iraq have fuel / energy shortages.
Sorry don't have links

Iran to stop selling crude in dollars.

I just now heard it on CNBC. Iran says it will stop selling oil in dollars altogether. People have been arguing for years as to what effect such a move would have. I have been among those who claim it will make no difference whatsoever. Others have said it will make the dollar collapse totally. Most were somewhere in between these two extrems.

Well, now we shall see.

Ron Patterson

Will Iran have any oil to sell?

What if this current round of military action is not about knocking off the mullahs? What if this is about the oil?

Consider another scenario. The vast bulk of Iranian oil production is in the southwestern part of the country. The vast bulk of Iranian oil production is done by non-Persian Arabs. The vast bulk of oil production does nothing to help those producing the oil. This is exactly why there are so many movements outside Iran to oust the mullahs. What they want is not an end to Shiite power but an end to Persian power in the oil producing southwestern provinces.

So what if this entire scenario is being played out to create and trigger an apparently populist movement to free the southwestern (Arabic) provinces from Iranian (Persian) control? Suddenly you create a new state, you recognize that state diplomatically. You create alliances with that state. And you help them fight off their Persian aggressors.

You have:
1. Opened up more oil to the west.
2. Broken the financial backs of the mullahs.
3. Damaged Iranian reputation within the Middle East irreparably.
4. Cut off Iraq from direct Iranian intervention.
5. Created a cassus belli from which to launch further attacks against Iran if they attack the new Arab state that pulled away from Iran.
6. And if your diplomatic ties to this new state are solid, you might go a long ways towards solving the Shiite/Sunni issue in Iraq at the same time.

I don't think an invasion is in the cards, at least as a hostile invading force. I think the invasion, if it comes, is going to be done to prop up a revolutionary government in the southwestern provinces. And if Iran gets ugly, then the US has an excuse to hit them really hard... and still gets to keep the oil.

And I am not suggesting that this will actually work. But if someone in power thinks it will work, that is what matters, because then they might execute such a strategy.

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

GreyZone: While you're working this up, don't exclude the Northwest quadrant and Kurdish interests. Turkey, looking towards Europe, might be willing to overlook a Kurdish exercise to REunite with its Kurdish brothers in NW Iran... (As they say in the Soaps, "there's more to the story".)
Rex says that "the world’s oil would not run out in his lifetime". Means nothing... he doesn't even buy green bananas.

There is a minority opinion that we should have subdivided Iraq as soon as the war was over. This would have given us solid allies in the Kurds who would have then been doing the cross border ops into Iran instead of Iran into Iraq. We could have largely protected the Sunnis, thus retaining Saudi good will, and we could have granted a large degree of autonomy to Shiite Arabs, who also might have been inclined to do cross-border ops into Iran on behalf of their Shiite Arab brethren.

Instead we tried to make them all play nice in the same sandbox and that's not worked too well.

If you can loosen Iran's grip on their Kurdish population and at the same time break clean the Arab Shiites in the southwest sector, then the neocons might consider that a victory in itself.

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

The minority sunnites owned iraq before the war. They will only be satisfied if they get it all back, certainly the oily bits that are now in kurdish and shia regions... the main mistake was dismissing the army and police which is what created an instant army of trained insurgents with quite a bit of time on their hands, courtesy of brenner/rumsfeld, who countered military plans to retain both albeit with new leaders.

G'morning gang.

Hard to know where to stick this mini-thread; I posted it late yesterday and was advised to re-open it today when it might get some attention.

The question was, of the VERY bright minds posting to this list, is there any unanimity of how to personally invest in energy as a hedge against various crashes? Theoretically, what readers of TOD may have that other investors may not is a better-informed idea of where oil supplies may be several years out. IF this can confer an 'edge', it seems worth doing. Particularly by those of us who do not have much in the way of saved $, in my case due to spending it on eco campaigns.

Futures, options, ETF's... if there has been a past discussion of this, or other strategies, in past editions of TOD, could you point me to it? Thanks. I was just educated yesterday to pull my money OUT of the ETF 'USO'.


Well, here you go...

The future of oil 2007-2012:

The future is basically a repeat of the 70's except for one thing; no knight in shining armour is going to rescue us as Ghawar, the N. Slope, and the N. Sea did after 1979. No, this time we will just go permanently down the decline slope. As W. Texas said, exports will be hit hard, driving up the price to well over 200 a barrel. Now, some here have said that this is impossible, the world financial system will crash. Why? This has already happenend before. 1973.
See in the 70's oil went from 10 to 40 and then again to 80 in just a few years. Yes there was hardship but we adapted, we had to, there is no substitute for oil no matter what people think. All, ALL alternatives are based on an oil consuming economy to produce them. You don't produce much corn without a LOT of fertilizer and diesel. That nifty windmill doesn't get built without steel and diesel for the work crews...etc.

So then the price will go up dramatically this year because of the Iran war and then it will never quite come down much after that, but tend to move higher like an acending staircase. We will gripe and moan but we will do Whatever we have to to get oil because without it we do not exist as an industrial society. Those that can't get it in the future (maybe China?) will slowly revert to the past agrarian lifestyle although no with out a great loss of liffe.

Now you see why investinng in oil futures is not a gamble but a near certainty.

So, is there anyone on here who can direct folks like me to an "oil futures for dummies" link, or give advice?

My situation is that I have under 50k to invest, and would not want to get wiped out due to volatility.


50k will not cover a crude futures contract. So you will be leveraged a bit.

There are such things as mini futures. 1/2 value of normal contract.

Get a real book, dude, study it. Jimmy Rogers has a good book on commodities.

dummies' life expectancy in futures trading ....

If you are posing these sorts questions here, you should not go near futures trading.

50k will not cover a crude futures contract.

Huh? The current margin requirements for one crude oil contract is $4,050 with maintenance required at $3,000. That is, when your contract has moved against you and you have less than $3,000 of your initial margin money left, you are required to deposit enough to get it back up to $3,000 or your account will be closed out. You will then get back whatever is left in your margin account.


But $4,050 is all you need though most brokerage houses would require $5,000 to open an account. But that is still a far cry from 50k.

A contract is for 1000 barrels and a move up or down of $1.00 either makes or loses $1,000 for you.

Ron Patterson

Your quotation of my post was too short! :-)

Take a look at the second sentence. I'm very aware of how margin works.

But it's definitely good that you gave the spiel on margin for some folks here. I didn't have the patience.

This might be what you want:


Good luck. You'll probably need it.

Call/Put options on oil stocks might also be a way to go, since these can be bought for as little as a $100 (as opposed to a around $2.5k (?) for a futures contract). You're certain to make mistakes, so make 'em cheap.

I don't see why volatility should wipe you out. Just don't sell stocks on a dip; if you're persuaded peak oil is real, you know the long-term trend is nowhere but up, and you should feel snug riding out dips.


I'm not among the very bright. They will come later and give you the real skinny. But I can give you the necessary background.

Remember: a hedge is where you are willing to spend some money in order to get some protection. You really are hoping your hedge does *not* make you money. The purpose is to offset the pain elsewhere. So, it's very important to figure out how much hedge will cost and how much protection it will afford if various scenarios unfold.

Insist on a full analysis of the hedge before you buy. a)scenario covered b) The costs c) The benefits on payout..... just like an insurance policy although in reality you will be investing in a market-traded instrument.

Any so-called expert that doesn't agree with the previous is completely and utterly full of shit. :-)

Now for the real experts.....

I don't think USO is quite as bad as it has been made out to be. Yes, they lose money on the rollovers, but if oil makes the kind of move that Peak Oilers expect, USO is going to ride it up too.

However if you are a real Peak Oil True Blue Believer, your best bet is going to be futures options. You want way out of the money call options on crude oil, which you can buy very cheaply. Then if Matt Simmons' prediction comes true and oil is worth $200/bbl by 2010, you can make maybe 50 times your "investment" (we will use that word loosely). OTOH if oil doesn't go anywhere, you will lose it all.

As was mentioned the other day, if the only way you can see this NOT happening is if the economy totally tanks, you can hedge against that by buying out of the money put options on stock indexes. These will again make you many times your initial investment if there is a stock market crash.

If you've really guzzled the Kool-Ade and you're convinced we've already peaked, then you could use your existing brokerage account and buy options on oil companies or some of the oil-related funds. These will go out a couple of years and if Saudi Arabia runs into trouble later this year as many TODers are predicting, you could make some real money.

However, more seriously, if your $50K is all you have to invest, I wouldn't put more than $5K or $10K at most into these kinds of speculative investments.

I've been looking at buying options. If things get really bad then this investment would go up a huge amount. On the other hand, the rest of my investments will probably tank. The result would be a wash which I'd be happy with. On the other hand if nothing bad happens then I have only lost a little money spread out over several years. I would look at it as an insurance policy.

I agree, it makes more sense to view these option bets as "insurance" against bad things happening. Consider the money you put in as like an insurance premium, where you pretty much expect to lose it, but if things go a certain way you'll be very glad you did it.

It's easy to get swept up in the mood around here, everyone seems so confident and certain in their predictions, every field and even sub-field is analyzed down to the tiniest variation in production levels. But talk is cheap, and when you are putting your money on the line you need to stay grounded. In the futures market particularly, every time you bet something will go up, there's somebody on the other side betting it'll go down. You have to ask yourself, what do I know that he doesn't know? And, worse, what does he know that I don't? Chances are, unless you've been doing this a long time, he's got more experience than you. Caution is very much in order.

Operation Bite - 4 am April 6 Sneak Attack - Russian Military Sources Warn


Personally, I believe that containment rather than offensive action is the best approach to Iran, and to Islamic fundamentalism overall - especially considering the US experience in the Iraq war.

However, I think if an attack by the US against Iran takes place, that in contrast to what the Russian general predicts, it will involve ground forces,

The islands that control the Strait of Hormuz will likely be seized by US marines to prevent the closing of the shipping channel.


Control of Abu Musa could also directly affect shipping. All of Iran's oil tanker traffic must pass through this area; making the security of the area very important. Former Iranian Foreign Minister Abbas Ali Khalatbar stated that his country occupied the islands so that another country could not "threaten navigation in the Strait of Hormuz to the detriment of all littoral states

Okay - the reinforcing paranoia loop is fully engaged...

Iran halts IAEA cooperation on attack fears

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

It's a tough call whether to give much weight to a report like this. US Intelligence is waging a psy-ops war as we speak against Iran and this could represent some disinformation. It is conceivable that some factions of Russian intelligence or the military are cooperating with the US in a disinformation campaign. See reports of Bush meeting with "controversial" Russian General Shamanov the other day. http://rawstory.com/news/afp/Bush_met_with_controversial_Russian_0329200...

In any event, I will be watching the news closely on April 6th.

you echo my thoughts exactly.

and in your Ghawar is dying link - that guy knew about this 6 years ago? that was before simmons even starting looking into it....whats he think now?

The author is a bicyclist. His more recent writing calls the peak in 03, just as positively as many (including myself) do now.


That's Chip Haynes. He's the guy that wrote:

"Ghawar is Dying"

AND a GREAT, GOTTA READ Humor(dark) named

Sixty Days, Next Year

Here's a snippet of the 60 days story.

It's a diary type of story of a J6P type of guy.
Who KNOWS NOTHING of Peak Oil(or energy in general)

June 14
It all started (for me) with just a small item on an Internet news page, "Trouble in the Kingdom". I thought they were talking about Disney World (the Magic Kingdom) so I clicked on it. Turns out they were talking about "the repercussions of curtailed social services in Saudi Arabia". (Insert a big yawning noise here.) So their kids don't get free day care? Big whoop. I scanned the article for any mention of M. Mouse and then went on with my life. My mistake. No biggie. Really.

June 15
Yesterday's headlines are still today's news? I guess those folks in the sand are really upset about something--it was in all the papers today. Sounds like the Saudi government is in for a tough time trying to rein in a runaway budget--and the locals don't like it one bit. Now their capital (Riyadh?) is a mess with people getting ugly in the streets. Yeah, yeah, yeah, no more subsidized housing. Deal with it, people. Get a job.

June 16
I saw the news today, oh boy. Three Saudi cities are up in flames, people with big guns are going nuts, and everyone that can find a plane is leaving that country in one big hurry. It's like Saigon in a sand box. (Not that I actually remember Saigon.) Local news guys are talking about what it means to us--and our oil. Maybe I'd better go fill up the car before everyone else does. I hate being stuck in long lines.

June 17
Almost forgot to top off my tank. Would have forgot completely if I hadn't heard the guy talking about it on the radio on the drive home from work. The gas station was busy, but not bad. Of course they'd already raised their prices. The creeps. Some people will try to make a buck off of anything. The radio guy said something about us sending in the Marines. Sure. Why not? How many countries can we invade at once?

June 18
No work today, so it's grocery shopping and errands. Good thing I topped off the car's tank yesterday. The gas station was mobbed this morning when I drove by--and I think the price was even higher today. Geez. Even the grocery store seemed crowded. What's with these people? Is there a storm coming or something? I bought what I needed and headed for home. The errands can wait. Who needs this?

June 19
Ok, ok--I get it now. The Saudis have the oil, we buy the oil. The Saudis get our money, we use their oil. Big circle of life. Yadada, yadada. Huge article on it in the newspaper today, and it was easier to stay home and read the paper than try to go out and fight the crowds. If I'm lucky, this will all blow over before I have to go back to that gas station and deal with it any more. I'm just going to settle in and read the paper.

Make sure to hit the link and follow the rest of it.

Chip and I have written back and forth for a couple of years now. Great Guy.

Welcome to the Dim Ages


You're right, it won't matter. The fact that the underlying price is ALWAYS based in dollars, serves as the dollar hegemoney. Pay in Euro's, but what to pay? Well it's $68 USD, which is roughly 45 Euro (skipping the math). At the central bank they must still have the reserevs of dollars to move into Euro's. This is a like a tide change in my opinion. Only more and more will move farther away from us. Remember prices are at the margins.

Many countries can slowly move away from the dollar and attempt an orderly decline, but at some point the marginal seller will create a flood of selling IMO. That marginal seller can be anyone, but at some point the fingers of instability converge and the bottom will drop just like it has for so many other leading countries of their time. We are not different and we are fools to believe we are above losing our prominance - who are we kidding; every country is already laughing and making fun of us on the playground. Was Goliath real, perhaps David?

Dollar Share of Reserves Falls to Lowest Since 1999 (Update3)


Also looked for story several days ago which noted other ME countries moving away from USD. Could not find.

I used to think it did not matter how oil was sold, dollars or euros. But... now I think it matters a great deal. Related to this, many think higher oil is bad for the dollar; actually, the reverse has been true for years. When oil was rising, from 2000 to 8/06, the dollar was fairly flat, confounding buffett who sold it short; when oil fell from 8/06, the dollar fell sharply in sympathy. Why? All importers need dollars to buy their oil, so as the price rises they must somehow acquire even more dollars than the previous year or do without. No problem for the us - we own the press - but tough for many. China/japan, eg, must acquire dollars for most of their commodity imports. And, a plus for both is that they have access to dollars, but not so much euros.

We buy stuff from asia, they buy commodities, commodity sellers either buy us stuff, us bonds or convert (say to euros), in which case the euro sellers either buy us stuff or us bonds. Eliminating the dollar segment of the circle means that there is much less demand for us bonds/exports.

IMO, this is just one more reason for bush to pull the trigger. Russia will bluster but will not be so sad; china, an importer, will be pissed.

...china, an importer, will be pissed.

I would make a guess that, that will be the time when we see Taiwan go back to China....

They would take it in a heartbeat. What would we do?

My two cents on this is that the Dollar, Euro, and Yen (at least) is managed by the central banks as one currency. THey will print one to support the other and place them relative to each other as they want.

So - I agree with Ron, but for a different reason.


So - I agree with Ron, but for a different reason.

Well, I did not give my reason but I will now. It will not matter because any currency can be converted to any other currency in a fraction of a second on the FOREX.

Foreign Exchange trading (also called Forex, FX, or currency trading) describes trading in the many currencies of the world. It is the largest and least regulated market providing the greatest liquidity to investors. Daily volume in the currency markets is around $1.5 trillion. By comparison, the NYSE daily volume averages $25 billion a day.

1.5 trillion dollars is an unimaginalbe amount of money. It is sixty times the daily dollar volume of the NYSE. It is impossible to buy or sell enough currency to "support" any major currency if it starts to slide. The days of currencies being "supported" by banks is over. No bank has that kind of money to gamble in trying to support any currency. If China started dumping greenbacks, the dollar would start to slide, and there would be not one damn thing anyone could possibly do about it.

If Iran wishes to receive only Euros, or Yen, or whatever for its oil, then all any nation has to do is instantly convert their dollars, or whatever currency they have, to the currency that Iran wishes to receive.

Ron Patterson

Let's say I have 10 euros and you have 13 US dollars. You sell the dollars to me, and then I sell them back to you.

With an electronic trading system and a simple software program we could easily make $1.5 trillion worth of transactions and beat the international markets for much less than a day. Care to give a try?

One problem with your little scheme Levin, it would not work. The very simple reason is the difference between the bid and the ask price. That is how the banks make their money. You thought perhaps they did it for free?

There is no commission on the FOREX. You sell at the bid and buy at the ask. The bank pockets the difference. Now the difference is not very much, about three basis points for a major currency, slightly more for the thinly traded currencies. A basis point is one hundredth of a percentage point (0.01%).

So it would cost you three cents to buy $100 worth of a major currency. So to buy $1,000,000,000 (one billion) in any major currency would cost you about $300,000. To make transactions of 1.5 trillion would cost you 450,000,000.

Three cents per hundred dollars aint much, but it is almost half a billion on 1.5 trillion. You got that kind of change Levin.

As I said, no one has enough money to support a major currency if it starts to slide.

Ron Patterson

I know about the spread, but the point was not that Forex works with 13$ swapping around, but that a lot of the transaction volume we observe is simply money moved from the left pocket to the right and back as a result of portfolio adjustments.

In such environment central bank interventions DO matter, simply because of the size of their portfolio and their public exposure - because of the multiplier effect their action cause.

From the "do as I say and not as I do" dept.:


Oh well, somebody would have flown those planes anyway ;)

Rising gas prices in the US are simply an inconvenience for most drivers. Shortages this summer will be a crisis. Long lines and rationing at the pumps. I'm not looking forward to it, but it may be the impetus needed for people to get their heads out of the sand.

Regarding the article "Drivers Shrug as Gasoline Prices Soar", we may be seeing the result of what economists sometimes call "pent-up demand." Pent-up demand helps economies recover from recessions, as consumers who were cautious during a recession eventually have to buy things, so they open their wallet and help trigger a recovery.

This might have happened with regard to oil usage in the last few years. A friend of mine said last summer that they hated to go on a driving vacation, with gas prices being as high as they were. I remember thinking that they would eventually take the vacation even if prices went up more - this family could afford it.

If pent-up demand in the oil market is currently being unleashed, it would mean what looked like an oil demand plateau over the last two years was somewhat artificial. It would also mean that the high oil prices of the last few years did not produce as much demand destruction as thought. They may have produced a "demand delay" rather than a demand destruction.

Maybe some of the people who have recently finally sold the house they were trying to sell for a year are now buying some necessities they put off for a while. Can't build an economy on that!

And now let us go against the trend and post something not very alarming. The North American natural gas situation may be precarious, but the last few weeks have been positive.

Monthly U.S. production numbers for January are posted:
and they show dry gas production for January at 1585 Bcf, up slightly from both January 2006 and January 2005, and down only 6% from the all-time high January figure in 2001.

Natural gas in storage dropped 22 Bcf last week to 1511 Bcf, 21% above the five year average, though 12% below last year's especially fat number.

The one worrisome note continues to be the acceleration in the number of rigs in use, now 19% higher than last year and 100% higher than in 2002 (as of December 2006, the latest numbers I have). It gives the impression that we are working harder and harder to produce the same amount of gas. So far, we have been nearly successful.

can you direct me to stuart's most recent post re: the plateau? With year end data, a great time for an update? TIA

I updated it a couple of days ago for a forthcoming post. Here's a sneak preview - IEA and EIA converging on a very slow rise (about 0.3%/yr right now - much less than typical inter-year variation in growth rate).

hey stuart

I find it hard to believe that there could be errors in any of your work, but I think some of your EIA data points are out of date.

eg. EIA now has December 2005 at 84.7 (compared to your 85.1) and May 2005 at 85.3 (compared to your 84.8). Looks like 2005 data has been revised since you last updated your spreadsheet data?


I'll check it out before I make my post.

Thanks, very interesting. Seems eia/iea have been diverging wrt each other, now 600k/d apart... after a while, this adds up to a lot of barrels. I wonder if the difference is spread around, or mostly associated with one country or region.

BTW, elsewhere on the thread somebody linked to a russian military report suggesting 4/4 date for initiation of iranian hostilities, exclusively air bombardment, but ending up with an attempt to split off the southern oil bearing bit from the rest, and to be run by local arab shias, who may be already doing most of the grunt work in the oil patch, and who presumably are not all that loyal to the northern persian shias. The former probably relate well with iraqi shias, kind of like iraq/iran kurds... brits were quite fond of splitting up ethnic groups, helped keep them weak and disorganized.

More great game stuff, but the recent record of achieving desired ends, which presumably includes us participation in oil development of formerly off limit regions, is not so good. Making omelettes with a blender can end up with egg almost anywhere.

I wonder if it has ever occurred to anybody that it might be cheaper/easier to join the nuke club by buying a couple from nk/pakistan.

I drove past the Iowa wind energy storage site a few weeks ago and it is a rather inconspicuous sightr to see. Their website says this is a sort of hybrid powerplant. Off peak power from the grid will pump the air into the aquifer but natural gas will be used to heat the air as it is released through the turbine. On a per pound of gas basis 3 times as much electricity is generated compared to typical gas turbine powerplants.

Farmers are set to plant the largest corn crop in the US since 1944.

American farmers are planning to plant more corn this year than anytime since World War II, as farmers rush to cash in on high prices bolstered by the demand for ethanol.

The United States Department of Agriculture released a report today on prospective plantings that estimated that American farmers would plant 90.5 million acres of corn in 2007, a 15 percent increase over last year and the most since 1944.

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

I posted an article two days ago that said the biggest crop since 1946. In both instances, I'm thinking: the US population was under 140 million in those days. What did they do with all that corn?

"What did they do with all that corn?"

It wasn't a problem, as the yields back then were half or less than today. The articless are comparing acreage planted, not bushels yield. Need to research the actual bu yield of 46, but litttle time.


1946 -- 88,898 thousand acres planted. Yield = 37.2 bu/ac
2007 -- 90,454 thousand acres planted? Yield = 149.1 bu/ac (2006)

(grain only, doesn't include silage)

This bodes well for peak fertilizer.

... to be followed shortly thereafter by peak people.

Thanks POT. It's a busy spring.

One other point I'd like to make is these articles are projected planting. Who knows what will be planted. And should conditions preclude corn in the corn planting season-mid Ap to early May, farmers can still switch back to soybeans, with their later plant date.

Going against this is record soybean harvests this spring in Brazil and Argentina, 2 largest bean growers. I mentioned this earlier this winter, that SA was looking to record harvests, and it occured.

Alot farmers still wondering if corn prices will hold thru summer, and reluctant to change rotation, still thinking of keeping soy acreage. Some analysts still think corn acreage this year at 88-89 million ac.

OTOH, corn demand is expected to rise to 12.4 billion bu this year, up from record harvest last year of 11.8 bil bu. No doubt alot more will be said before we get to harvest.

After 60 years the corn yield per acre increased 4 times despite soil depletion, erosion, chemicals and the rest of the tripe one often reads on TOD. Does anyone pay any attention to this. I don't think so.

It isn't tripe, practical. Some of the claims made here might be a bit over-heated at times, but you can't write these concerns off. I can cite plenty of papers that back this up, but I have a good idea that you know the story on this.

Yields have indeed increased dramatically since WW II, despite ongoing losses of topsoil, agri-chemical contamination, groundwater depletion, salt accumulation on irrigated lands, etc. But ask any conventional farmer what would happen if suddenly he/she had to give up chemicals and fertilizers and go back to farming the way people did 50 years ago. He'll tell you that "half of the world would starve."

If you believe that a good portion of these spectacular yield increases owe to the the application of petrochemicals and synthetic fertilizers, and then you tell me that you're not concerned for the future of our agricultural systems, then I'd have to wonder what you are smoking.

One problem with that. There won't be enough bees to pollinate the corn crop.


Humans think they can fix a problem, and respond by creating more.

One problem with that. There won't be enough bees to pollinate the corn crop.

Not a problem at all because corn is not pollinated with bees. Corn is pollinated by the wind.

Ron Patterson

Corn is not pollinated by bees. The pollen falls from the tassel at the top of the plant onto the silk at the tip of the ear. During pollination if one walks in a corn field, one will be covered with a yellowish dust of pollen.

Something I read by DurangoBill.

In the last couple of days, near term oil futures contracts have rallied while distant contracts have sold off. On a short term basis this has destroyed the possibility that distant contracts could drag near term contracts upward.

Two possible reasons for these price moves come to mind - and either or both reasons may apply.

1) Worries in regard to oil disruption by a possible new war in Iran would cause speculative buying in near term contracts.

2) The Saudis might be selling distant contracts to “obfuscate” the evidence. Distant contracts are very thinly traded, and it wouldn’t take much effort to drive their prices down. (A few million $ at most, and possibly less than $1 million is all that you would need.)

Isn’t it amazing that these price moves occurred right after the article was posted at The Oil Drum. (As for reason # 2, perhaps somebody in some far off land might be an anonymous reader of The Oil Drum.)



A new Round-Up has been posted today at TOD:Canada.

If this is happening to the richer, we can all imagine what goes on down the chain.

You get to wonder whether this is merely a change in lending standards, or the first visible signs of the credit spigot being shut.

The battle for a ($1 miilion) mortgage

“You’re going to pay the piper for any little mistake,” said Melissa Cohn, the president of Manhattan Mortgage Inc. She said her brokers — who last year arranged more than $3 billion in mortgages, mainly in New York City — were spending twice as much time on each application as they did a month ago because of new lending requirements, and she expects the situation only to get worse.

“The impact is going to be much greater as banks demand that people have clean credit to get the best mortgages,” she said.

Buyers like Lee and Kimberly Au had to adjust their expectations. The Aus wanted to buy a one- or two-bedroom condominium costing $800,000 to $1.25 million at the Atelier on West 42nd Street, now that their 8-year-old son has a modeling contract in New York. But they quickly learned that they could no longer get 100 percent financing, even though Dr. Au makes more than $700,000 a year as a surgeon in Hawaii. So the couple settled on a $625,000 studio and used $62,500 in savings for the down payment.

Eric Eisenberg, the mortgage broker handling the deal, said that even though the Aus put up more cash, the transaction was far more difficult to close than it once would have been.

“About three weeks ago, I would have gotten this done by snapping my fingers,” said Mr. Eisenberg, who is the executive vice president of the EFI Capital Corporation, a mortgage brokerage based in Garden City, N.Y. “Now it’s a very lengthy and time-consuming process where every bit of paperwork has to be done to the T. The guidelines are literally changing every hour.”

Until recently, many New Yorkers found it fairly easy to get mortgages. Then banks that made loans to subprime borrowers started running into trouble when the borrowers found it impossible to pay their mortgages and fell into foreclosure. As a result, banks have cut back on all types of loans.

Hello TODers,

For those of you interested in 'bleeding out' through every body orifice:

Historically, the United States hasn't been immune from dengue — a 1922 outbreak in Texas infected a half-million people. And according to the CDC, dengue returned to southern Texas in 1980 after a 35-year absence. Occasional cases since then have included hemorrhagic dengue.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Solar boat makes Atlantic history

A five-strong Swiss crew have sailed into history by completing the first solar-powered transatlantic crossing.

More than 500 years after the first wind powered crossing...

Hello TODers,

Japan rushes into deployment of Patriot ABMs:


Makes one wonder if they are secretly assembling ICBMs too.

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

As I've said, If there is an attack on Iran, Taiwan is toast. A few carriers would be busy at the time and Taiwan would be very precarious.

Japan may be gearing up in case that scenario should happen. Things would be dicey everywhere for a while.

A line from Dr. Strangelove comes to mind.

As Gen. Buck Turgidson, the George C. Scott character in Dr. Strangelove, put it, "I'm not saying we won't get our hair mussed up, but 10-20 million tops, depending on the breaks."

I suspect that Taiwan is eventually going to be taken over by mainland China no matter what. While a conflict between the US and Iran would give China a great opportunity to roll into Taiwan unopposed, I think they are looking longer term than that and won't go in at that time. One of the big reasons is the Olympics, which are a huge point of national pride and China's opportunity to focus the world's attention on them in a positive manner. The last thing they want is to have half the globe boycott the games.

I realize to many the Olympics seem like a small matter in comparison to bringing the "renegade" province back into the Chinese fold but I suspect the Chinese know very well that the ability of the US to police the globe is going to continue to decline and it will just be a matter of time before they can walk into Taiwan and the US will have only two choices: accept it or play the MAD card. By waiting, China can get their day in the spotlight and also wait for the right time years down the road to stage some sort of pretext for the invasion of Taiwan in the name of national security.

One topic I haven't seen discussed at length here, (though I would not be surprised if in fact it has already been looked at down to a logistic regression versus neural net analysis of the predictive models of the 2nd degree relatives absolute hair length:-) is an alternative approach to creating biofuels, that is, thermal depolymerization. Here's a few links if anyone is so inclined:


I imagine there are a few already sneering, "there can be no solutions cornucopian - er I mean technological solutions to the doom that is PO".

Let's first just look at the purported benefits, which are really so great that its hard to get your head around them. Much of this may be from memory so feel free to ding me.
1) The plant produces its own power from about 15-20% of finished product.
2) It accepts a variety of feed stocks that do not directly impact the food chain including, agricultural waste, discarded tires, plastics, paper and sewage.
3) The amount of these waste streams is sufficient to supply a significant percentage of oil consumption - even in the US.
4) It alleviates waste disposal issues, both bulk waste disposal and problems such as medical waste.
5) When using agricultural waste its end products are diesel fuel, water and fertilizer
6) The diesel oil produced can be refined to other products including gasoline and jet fuel
7) It addresses GW
8) It creates a highly distributed and resilient oil supply network with fuel produced and likely consumed locally.

OK, you get the idea, so this is analogous to the water powered car http://waterpoweredcar.com/inventors.html
well, possibly. Here is what I see as the strongest support for this approach.

1) Smart people investing their money in it, including former CIA director James Woolsey and Howard (Warren's son) Buffet.
2) A pilot plant in Philadelphia evidently had success in converting all the various feedstocks noted above into oil
3) An initial plant in Carthage, MO has been producing and selling oil for over a year. The cost of production for a barrel of oil on this plant has been, so far, about $80. However, this plant has had three strikes against it and is still going. First, it was expected that the feedstock would be free because of pending regulations related to BSE. This didn't come through and, if I recall added about $20/barrel to the cost. Second, they built this first plant FOUR BLOCKS, from downtown and didn't think that lots of rotting chicken carcasses might present an odor problem, an issue which may have also taken on a life of its own. Lastly, in 2006, they did not receive the biofuels incentive of $1/gallon, lawyers. They survived and in 2007 they are receiving the biofuels incentive.

Just think about this for a moment, this very first plant likely produces oil more cheaply than ethanol plants, with better EROEI, does not directly impact the food chain and produces fertilizer as a byproduct. To hell with cellulosic ethanol.

You know the Oil Drum is beginning to gain some well-deserved clout, at least with me it undoubtedly has. I think it would be great if one of the editors approached Brian Appel or someone similar to dialogue on this topic. While Brian's background is in sales, I am still sure :) such a discussion would be very fruitful in people deciding whether they would like to drum up support on this approach to mitigating PO.

Thanks for the links. We have to work on a lot of silver bee-bees. Clearly processing solid waste is one of them. It doesn't get the press of ethanol, but it doesn't mean it is not important. If the waste is already there, and we can figure out a good way to process it, we are ahead of the game.

Yes, yes, more free energy!!! There's no limit really, is there? Is there?

Why on earth did we ever dump our trash in landfills? Dumbest thing we ever did. No wait, that would be the water toilet. We should have been pooping into a 400C furnace all along.

Who does Sadi Carnot think he is? 2nd law? What 2nd law? All we have to do is burn all we produce, and then we can use the energy to produce more, and then we can burn that, and produce more energy. We can breed chickens just to burn them, the world's my oyster. Which I will then burn, so I can make the world my oyster.

We'll be right with you, just get in line there, right behind cold fusion.

Subtly is not your strong suite then I take it!

Listen. We just need to get it right. Horses,mules and oxen are the answers. You can ride them, work(plow) with them, cook with the droppings, and finally eat them. And lastly then eat the grass so you never have to mow again.

Forget the 2nd law. Forget flush toilets. Forget oysters.
And yes forget oil.

Airdale-we are one million mules from freedom

Airdale-we are one million mules from freedom


If the mule thing really catches on, I'm going to invest in a donkey farm (this does NOT mean I'm contributing to the Democratic Nat. Committee!). Ya gotta have a source of mules.

Sorry for the late post but I am just catching up after an an eventful day.

Mules (donkey's and oxen) will certainly have an important role to play
in the future of agriculture. While I will defer to you (and others) experience
on these matters I believe a large draft animal (belgian for example) could
easily eat 5 acres worth of oats and hay a year. Not counting thousands of
gallons of water.

I bring this up only to show that we may not have enough arrrable land to
feed and water all the animals and us too if we were to just replace our tractors with them.

So while they may be a large part of the solution we will have to look at other
ag practices for our sustainability.

Mules are probably a good start, though. :-)

I can drive a tractor but a mule? Lord help us all!


I might add that anyone who is interested in draft animals and horse drawn
implements should check out this website.


check out the "front porch" for the question and answer part of the website
and the "sale barn" for purchases.

I must apologize.
You know I have undergraduate degrees in English and Philosophy, studied Aristotelian logic have two post graduate degrees, built and published the results of a back propagation neural net that improved upon preoperative staging of testicular cancer patients, ah wait, I am getting defensive and boring, but I apologize I can't understand your critique of thermal depolymerization. Golly you must be smart.

I know the seemingly, smirking oblique references to thermodynamics must be backed up by more formal analysis than "We should have been pooping in a 400C furnace all along" Of course this must be a "free energy" scam, former CIA directors and the son of arguably the world's greatest investor are always such suckers with their money.

Yes, this looks too good to be true hence the posted request for any reasoned analysis. Its fine to just say it looks to good to be true but if you don't have anything cogent to add beyond that, as a former English major I would advise dropping what might come across as a fairly snot-nosed tone as I'm certain you didn't mean to offend anyone.


This PO topic is a stressful one which I guess can show forth in different ways. I came out a little hard there and said some things I regret. While this has been a case of dueling sarcasm, which won't help us or anyone else, I will say I am sorry for not just enjoying your sarcasm and leaving it at that.


I really appreciate your saying this. Sarcasm is very tough to deal with, in my experience - (to figure out how to say otherwise when it's the first thing that pops into one's head, to translate when it comes one's way). Thanks for making the effort to keep things going well here.

Well, HeIs, the bottom line is we don't have a 'Theory of Everything', DO WE ??

Looks like they survived their growing pains, although their website is pretty stale...
Apr 2006 Discover article

It isn't clear how commercially successful this will be in the long run, but they lasted longer than most people expected...

It is certainly an attractive proposition, as it essentially recovers energy from our waste stream.

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

A little more comment: This is a viable technology, with a net positive EROEI, assuming that the inputs are truly waste products (which allows you to ignore the energy required to produce the inputs). It will effectively extract a portion of the residual energy from the waste stream, and will largely reduce much of the waste to benign, or even beneficial forms.

Two important notes to address the rather childish criticisms upthread:
+ it recovers only a small fraction of the energy that was originally used to produce the goods, so we won't get enough energy from this to have a hugely significant impact on our overall oil consumption
+ it is relatively expensive now, though the costs seem to be coming down.
+ it is quite complex to tune the process to be efficient for the various input streams, so the plants may either need to be quite specialized for different waste streams, or the waste streams need to be homogenized before being fed into the process.

I think this guy is sitting on a gold mine, frankly. It may be 10 - 20 years before it has scaled up to a point where it can start to reduce our waste streams significantly, but there is real promise.


it is quite complex to tune the process to be efficient for the various input streams, so the plants may either need to be quite specialized for different waste streams, or the waste streams need to be homogenized before being fed into the process.

I agree, if I had to take a wild guess, what will make or break this company is how well they can deal with heterogeniety of the feedstock. As you point out going forward they would need to refine this for specific indications.

Another group I forgot to mention which showed interest in this technology and which again moves it out of the quackery realm is the US government. They have received I believe 35 million in grant funds. In general, a grant application is evaluated for merit by a panel of experts in the field.

As a private company its difficult to get much solid information on this company and they seem to hold their cards close to the vest. So I don't think we will know anytime soon how this approach might compare with say Fischer-Tropsch gasification. Its unfortunate that they encountered the odor problem, its sort of hard to be out there touting the success of your company if a hundred people come out of the woodworks saying it smells like dead possum. I am optimisitic for them and wish them well though it is just a very promising longshot at this time. If it works it is a goldmine and a local, distributed, environmentally benign gold mine.

Mitigation, or "Back To The Future, Part II

Well, frankly, this whole GAO business has actually turned out to be a waste of evreyone’s time, with out of date information, soft guesses intended to offend no one, and a 1973 mentalitiy that didn’t work then, so why do we assume it will work now?

When I get bored with stuff like this, I take a few minutes to recall the fun ways in which countries and regions dealt with this problem in days gone by.

It is easy to forget that in many countries of the world for many years into the auto age, many of them had no home resource of oil or natural gas (it is still true of many, including the powerhouse nations of South Korea and Japan, but that never stops them...), and the Europeans and in particular the British lived very fuel constricted lives before the North Sea started delivering. There is a reason that vintage Brit and European microcars look the way they do and perform the way they do. But still, it was better than walking miles in the rain, and some of the little vehicles are actually very endearing.....case a few out...

United Kingdom





South America



In the fuel crisis of the 1970’s, the Americans faced the future

Of course, at some point, even the Europeans would get weary of sacrifice and decide to move up in the world, leading to two great legendary cars...

The Fiat Topolino


The Citroen 2CV

It may seem silly to believe that a continent could be operated on autos of this scale.
It is to be remembered that for the better part of the automotive age, the Europeans, Japanese, Koreans and British have done it.

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

Nice collection. Were they all mass produced and sold in quantity? Or were some of them flops?

AFAIK, the 2 CV is one of the most sold cars in France, in the 1970's. You can still see some of them driving.. Same for topolino.

There's the Renault 5 too, that has worked great.

Now here is an extremely worrying piece:

LONDON (AFX) - Oil prices hit a new patch of volatility in a rumour-driven market, with talk of the US pulling its citizens out of the gulf state of Bahrain boosting prices.

Analysts noted that unspecified rumours of US citizens being ordered to leave Bahrain are making the rounds, unsettling already jittery markets.

News of US plans to impose sanctions on some Chinese imports also rattled markets, amid speculation that China will take retaliatory action.


Bahrain, of course, is one of the very few Arab countries with a Shia majority that will not be happy if Iran is attacked. And a trade war between China and the US has been predicted recently by many, including Europe2020:

In summary, US leaders are taking steps to « teach a lesson » to China (and to a lesser extent to Japan’s car makers) without realizing (despite Beijing’s warnings, resulting in the current stock crisis) that not only they are in no position to « teach any lesson » to China, but in doing so they are triggering a trade conflict which will contagiously spread to the financial and monetary sectors. It is indeed now in Beijing that the value of US dollars and treasury bonds is determined (not mentioning the value of Fannie Mae’s and Freddie Mac’s shares, in the past few months massively purchased by Asian investors thus following the advice of their US bankers, knowing that Ben Bernanke himself now acknowledges that the amount of their engagements conveys a “systemic risk” for the US economy).