DrumBeat: April 10, 2007

Jeff Vail: The Design Imperative
It seems unlikely that the “way of thinking” that got us into this crisis will also get us out. That old “way of thinking” is the same one that is currently trying to solve the energy crisis through efficiency and “alternatives.” The Design Imperative is the suggestion that we should focus instead on the conscious development of technics — a new way of thinking.

Dangerous Curves Ahead

Decline curves graphically depict the rates at which oil and gas well production levels fall -- or plummet -- over time. They may also illustrate how unlikely it is that the world's oil producers will be able to meet the expected increases in global demand. Energy giant ExxonMobil and the Energy Information Administration arm of the U.S. Department of Energy are just two of the many entities that have studied this important question.

TXU seeks to build biggest U.S. nuclear plants

Utility company TXU, which scrapped plans to build eight coal-fired plants when it agreed to be acquired by two private equity firms, is now hoping to build the biggest nuclear power plants in the United States, said the Wall Street Journal.

Company of the year: Chevron Corp.

The key to Chevron's success in 2006? Crude oil prices. They rose as high as $77 per barrel on the New York Mercantile Exchange, averaged $66 for the year and never fell below $55. Just five years ago, people worried if the price topped $35.

Sinopec in Talks on Iran's Oil Field

China Petroleum & Chemical Corp., best known as Sinopec, said Tuesday it does not plan to buy liquified natural gas from Iran because the price is too high, but that it is in talks on cooperating on oil production.

Japan May Propose Specific Areas for Joint Gas Production

Japan has begun considering the possibility of proposing to China that the two nations specify areas in the East China Sea where they should jointly produce natural gas after first confirming a broad 2006 agreement on joint production, Japanese government officials said Saturday.

UAE to increase oil output up to 5mbpd

The UAE is set to increase its oil production to over five million barrel per day within the next seven years, UAE Foreign Minister Shaikh Abdullah bin Zayed Al Nahyan announced here yesterday.

Russia: Searching for alternative sources of energy

The development of unconventional and renewable energy sources is a major challenge facing humankind in the twenty-first century. Technologies such as nuclear fusion and biofuels will prove vital if humankind is to find an alternative to hydrocarbons.

The Oil Crisis leads to gold and silver

On the surface we see that responsible forecasters have forecast oil to drop to $50, but already at the early stage of the oil year it has climbed to the mid-$60 level.

On the surface we have media attention focused on the symptoms of these problems separately and without bringing them together as one would see tributaries of a river come together to make a more powerful and major force overwhelming the ‘big’ picture.

India: Edible oil crisis

An edible oil crisis is around the corner though policy planners do not seem to realise this. The oilseed production has dropped this year by a whopping 17 per cent to 23.26 million tonnes, falling below 24.38 million tonne harvested a decade ago in 1996-97. The dependence on imports for meeting the needs, which was a mere 3 per cent in the early 1990s, has shot up to over 40 per cent. What adds to the worry is that the edible oil availability in the international market is likely to dwindle due to the large scale diversion of these oils to bio-fuel production. This may make it difficult even to import enough edible oils.

India to depend on renewable sources to meet energy needs

India will be dependent on renewable sources such as solar, hydro and biofuels to meet 50 per cent of its energy requirements by 2050.

Through the use efficiency measures the country will also be able to reduce 50 per cent of its energy consumption.

Prodding car makers to sell plug-in electric vehicles

Here's an ad we'd like to see: "Car for sale. Late model PHEV. Zippy acceleration, 100 miles per gallon of gasoline, zero tailpipe emissions for typical daily operation. Matches the driving range of any car on the road today at half the operating cost. Fun to drive, helps secure our nation's energy supply, greatly reduces greenhouse gas emissions. Batteries included."

Nigeria: Crude Oil Attracts US, EU to Gulf of Guinea

Osita Chukwuemeka Eze, an erudite professor and seasoned administrator, is renowned in the research community both in Nigeria and outside. His experience in the fields of Law, International Relations and Strategic Studies is as vast as the face of Atlantic Oceans. Currently Director General of Nigerian Institutite of International Affairs (NIIA), Eze in interview with Gboyega Akinsanmi fields questions on Nigeria's big brother roles in Africa, increasing militant activities in the Niger Delta, US presence in the Gulf of Guinea among others issues.

George Monbiot: There is climate change censorship - and it's the deniers who dish it out

Global warming scientists are under intense pressure to water down findings, and are then accused of silencing their critics.

Michael J. Economides: For the Oil Companies, Public Rhetoric = Big Profits

Al Gore is a darling of the oil companies. They also really love peak-oil Cassandras and are enamored with energy alternatives like biofuels, wind, and solar. The myths du jour, preposterous and transparently idiotic as they may be, are not opposed by the presumed bogeymen in the oil industry, the supposed culprits of the situation. In fact, it is in the oil companies’ interest to promote the myths and even prolong them.

Kurt Cobb: A peak by any other name is still a peak

Just how much violence, war or state coercion Yergin might be willing to accept to solve these problems is unclear, especially since Yergin styles himself as a free market advocate. But he may not quality for inclusion in the reality-based community if he believes that rational problem-solving will somehow allow us to overcome all of the hurdles he enumerates.

India: Centre eyes Gulf, Africa for fertiliser JVs

The Centre has asked the department of fertilisers to explore options of procurement from the Gulf, sub-Saharan Africa and north Africa. It has also asked the department to look into the possibilities of establishing joint ventures in these countries to cater to the growing Indian market.

Detroit Should Thank the Supremes

In the long run, automakers would be better off if they would embrace strong regulation now, because it might be the only thing that can save them from themselves.

New Hampshire: Bill's backers want more plants like Schiller

The incentives in House Bill 873, co-sponsored by Sen. Martha Fuller Clark, D-Portsmouth, and Rep. David Borden, D-New Castle, would also help dozens of existing hydroelectric dams and wood-fired power plants. It might even build wind farms to capture the sea breeze off Portsmouth and Rye.

"I personally have no problem with a wind farm off the coast," Clark said. "We're facing an energy crisis and climate change. We have some hard choices."

Healthy Planet, Hefty Wallets

As one speaker at the conference put it, “a perfect storm is brewing.” I know--cliché. But he’s right.

We’re looking straight at triple-digit oil.

Love in the apocalypse - Conor Oberst has turned his Bright Eyes on the future and it's not looking good

Does he sense an apocalypse now? "I do. But I think a more plausible apocalypse than, say, the end of the Mayan calendar would be. Something that's down to climate change or when we reach the peak oil stage. Throughout history there have been times when people thought 'this is it', but I think there are currently more immediate threats to humans than ever before.

Engineer: Offshore Platforms Need More Height

Offshore oil and natural gas platforms in the Gulf of Mexico need to be built as much as 10 feet higher than had been thought, an engineer told the National Hurricane Conference on Thursday.

Research prompted by hurricanes in 2004 and 2005 indicates that new platforms should have decks as high as 50 to 60 feet above the surface -- 5 to 10 feet higher than current standards call for, said Frank J. Puskar, president of Houston-based Energy Engineering Inc.

"This is a big, big change for our industry," Puskar said at a session about hurricanes and offshore petroleum.

New Hampshire: Gas-fired facilities up for sale

Both plants took a financial beating when the price of natural gas spiked two- and three-fold soon after they went on line. A wave of similar gas-fired projects drove up the price of their fuel and caused a short-term 8,000-megawatt oversupply of power in New England. But no new projects have come on line in the last several years, and ISO-New England power grid is projecting a 4,300-megawatt shortage by 2015.

Ghana - Energy crisis: Nigeria has its own share

The Nigeria Gas Company (NGC) announced it was shutting down its pipeline by Saturday for 10 days to enable it effect maintenance on the lines feeding Lagos Thermal Station in Egbin near Lagos.

This means that the worsening power supply c

IMEF seeks to strengthen Pemex

The report said: "A strategic vision and the implementation of a Corporate Government are necessary to visualize Pemex as an energy sector company and not just a producer and exporter of crude oil and gas."

Mexico slow to embrace ethanol on funding issues

Mexico is not expected to introduce ethanol into its gasoline mix any time soon despite the strong push in the United States to use green fuels produced from renewable resources, an oil consultant said on Monday.

Gas Forum to Set Up Commission to Study Pricing Policy

The Gas Exporting Countries Forum has decided to set up a high-level commission to study the issues facing the gas market, such as the pricing mechanism, infrastructure and relations with customers, Russia's oil minister said Monday.

Two Turkish Engineers Kidnapped in Nigeria

Two Turkish engineers were kidnapped in southern Nigeria, Turkey's Anatolia news agency reported on Saturday.

...Turkish diplomatic sources were quoted by Anatolia as saying that the kidnapping occurred in a region where oil companies were densely located and these kinds of incidents are common

India eyes oil, gas in Uzbekistan, Azerbaijan

Indian state-run firms will scout for oil and gas assets in Uzbekistan and Azerbaijan during a weeklong visit by junior commerce minister Jairam Ramesh from Tuesday, the government said.

Japan gives $850m to develop Iraq's oil sector

An official at the Iraqi government said that the Japanese government has lent Iraq $850 million repayable over forty years at an interest rate of 0.75 percent yearly, AFP reported.

Chavez, oil companies on collision course

With President Hugo Chavez setting a May 1 deadline for an ambitious plan to wrest control of several major oil projects from American and European companies, a showdown is looming here over access to some of the most coveted energy resources outside the Middle East.

Moving beyond empty threats to cut off all oil exports to the U.S., officials have recently stepped up pressure on the oil companies operating here, warning that they might sell American refineries meant to process Venezuelan crude oil.

"Chavez is playing a game of chicken with the largest oil companies in the world," said Pietro Pitts, an oil analyst who publishes LatinPetroleum, an industry magazine based here. "And for the moment he is winning."

The fundamental and cyclical position of the GCC business cycle

The problem is that cyclical downturns always have to be played through the cycle. That means the US slowdown becomes something near or actually a recession, and that will certainly put a damper on oil and gas prices as demand will fall both from the US and from the nations exporting to the US.

Whether this slowdown in hydrocarbon demand lasts for long is another issue. It could be that supply side constraints, vis-a-vis peak oil are now so critical that the world is facing a fundamental up shift in oil and gas prices. But that will not stop the cycle turning through a phase of lower prices as cyclical demand falls due to a US slowdown or recession.

Brazil buying more Malyasian palm oil

BRAZIL, a major global producer of soyaoil, is buying more palm oil from Malaysia in an effort to meet its government's mandate on the use of 2 per cent biodiesel (B2) content in diesel next year.

Automakers challenge Vermont emissions law

The U.S. auto industry challenges Vermont in court on Tuesday, trying to block efforts by 10 states adopting stricter limits on vehicle emissions of carbon dioxide, a main greenhouse gas.

Millions face hunger from climate change

Warming temperatures could result in food shortages for 130 million people by 2050 and threaten to cause drought and higher seas in Australia and New Zealand by 2030, according to a U.N. report released Tuesday.

Megastars to rock the world in giant Live Earth concerts

Madonna, Genesis and the re-formed Police will top a galaxy of stars rocking the world against climate change in seven mammoth concerts around the globe on July 7, organizers said Tuesday.

More than 100 acts will perform in the giant 24-hour Live Earth concert relay -- the brainchild of former US vice-president Al Gore -- spanning Sydney, Tokyo, Shanghai, Johannesburg, London, Rio de Janeiro and New York.

Scientists Detail Climate Changes, Poles to Tropics

From the poles to the tropics, the earth’s climate and ecosystems are already being shaped by the atmospheric buildup of greenhouse gases and face inevitable, possibly profound, alteration, the world’s leading scientific panel on climate change said Friday.

BBC Special Report: Climate change around the world

'No April power cuts' in Mumbai

There will be no power cuts in India's financial capital, Mumbai (Bombay), in April, power companies say.

...But it gave no guarantee of continuous electricity for residents in the peak summer months of May and June.

Study: Price gouging gas bill costly

With Congress potentially moving forward on a law to penalize oil and gas companies for price gouging, a new study says doing so would cost the economy about $1.9 billion during a national emergency on the scale of hurricanes Katrina and Rita.

The study, to be released Tuesday by the American Council for Capital Formation, argues that such legislation would cause long lines at service stations and fuel shortages reminiscent of the 1970s energy crisis. Oil companies, worried about being penalized for gouging, would shy away from paying higher prices to bring in more supplies, the study said.

Environmentalists cheer pipeline vote

An energy company was dealt a serious blow to its efforts to build a floating liquefied natural gas terminal off the Southern California coast when a state panel refused to grant a lease for pipelines essential to the project.

Exxon to Boost Output a Million Barrels a Day

Exxon Mobil Corp. (NYSE: XOM) said it plans on boosting oil output a million barrels a day as the world's No. 1 oil company begins a three-year strategy to take on 20 new projects thanks to the windfall profits earned in 2006.

Exxon Mobil chief executive Rex Tillerson said the company plans on spending $20 billion per year to boost production by 1 million barrels per day. Tillerson's sitting on close to $40 billion in cash from earnings last year alone and Exxon is going to spend the money to boost its production rate.

China March crude imports rise 9% to near record

China's imports of crude oil jumped 8.9 per cent in March from a year earlier to a near record, official data showed, as refiners took advantage of low prices to build up their stockpiles ahead of a spring demand surge.

The ethanol food crisis

The latest "science" report from the Intergovernmental Panel on Climate Change landed Friday, but it contains not a word on the latest climate-science fiasco. Somewhere there should have been a typical IPCC alarm-riddled sentence to alert us to a very real and immediate climate crisis: the ethanol-food disaster.

Problems Brewing as EU Farmers Switch to Biofuels

European beer brewers may face increasingly tight malt supplies later this year as farmers switch to grains for biofuel production, the head of a leading German malt marketing company said on Thursday.

Here's another bit about the rumoured Saudi Dow takeover. If true, this may be an indication that the Saudis understand how difficult it will be to transport and distribute LNG to north America. If they buy Dow (and shut it down), the chemical industry can be moved to the gulf. Finished chemicals are easier to ship than LNG. This process has already started, with enormous ammonia and urea plants under way in Bahrain, and Dow's shareholders must know it. Resistance is futile..
Meanwhile, we will burn what gas we have left. Hmm.

Well, it seems to be peak almost everything. Are we all freaking doomed, as the Mogambo Guru says. Or is it that we who are in the know, and have prepared, and live in the right place are those who are going most likely to survive?

I have done all the preparations that i can think of: Supply of one year canned food, weapons and ammunition,tools, no depth, savings in gold, small rural house by a river with fish and possibility to grow vegetables in the summer, woodstove, bicykles, small car(and no need for car anyway if it really is going to be tough times).

The place is in northern Sweden near the arctic circle, which means that the area is sparsely inhabited. The only problem is to survive the long winters. But with 8 kubikmeters of wood it is no problem even if you are off grid.
Then i believe, that we will maintain electricity in Sweden, because we have now 50% nuclear and 50% hydroelectric. The only question is if there will be problems with maintainence of theese systems without oil?

Interesting times ahead indeed.


Lotta good prep there, Kenneth.

'Depth' caught me for a second.. aha! "Debt!" That's a big one.

I think two of the 'Medium Tech' items to stock up on and find applications for is Glass and Mirror Surfaces. Solar Ovens, Hot Water and Air Heaters, Greenhouses, Concentrators, Mirrors can help make the most out of candle and lantern light. Glass containers are invaluable for food and water storage.

Also good to have a 'boneyard' of useful scraps. Metals, Plastics, Mechanical bits, linkages, wheels.. etc.

Make friends with the Tomte's too. You'll need em.


Hi Bob
Yes i have thought about green house an so on, and we will perhaps buy those also.


Two things I'm doing:

1. Learning Organic/Permaculture/Low Energy Farming.

2. Praying for a techno-fix. :)

Wwo is the tomte´s?


As I understood it, the Tomte's are like Swedish Forest Gnomes/Elves, if you will. The Yul Tomte (Jul?) is the 'Christmas Elf'. Magical Little Folk who traipse about your barns at night, whispering to the cows, and leaving little buckets of Abiotic Oil on your doorstep.

My Grandfather was a Johannson from Linkoping, down south of Stockholm. Maybe its a southern thing..


No, it's the same in the whole of Sweden, and you're mostly correct. A 'tomte' would be a gnome/elf. The Tomte with a capital T would be Father Christmas.

You 're spot on Bob! You know your Tomtes alright!

Whish I got the type leaving me abiotic oil, I actually belive more in the Tomte than the abiotic oil though... ;)

Yes Santa is called Jultomte

Nice, Linköping is my home town. We seem to have fairly "green" infrastructure when compared with the US norm but a lot more can be done.

My main peak oil preparation is to study engineering and energy to get a job in that sector but first I need to find some inspiration on how to specialise. Sadly it isent going especially well, I am not good at selling myself. And instead of specialising I pondered peak oil close to being depressed and ended up with an overall peak oil + global warming + swedish industry view wide as an encyclopedia that is useless for making a living, oups...

The long shot is to try to influence municipiality and national politics, hard but I might have made a tiny difference, its hard to measure. I am good at finding and combining ideas and not especially good at politics. ;-)

In case TSHTF I joined the home guard since I anyway cant avoid trying to help with serious problems and I rather try togeather with other people and with at least some resources to bear on a problem.

Stocking up with a years worth of food or having a garden is useless if you cant earn a living, priority one is to find some company etc that needs a person like me.

Impressive prep Kenneth! But 8 m3 of firewood is not really much, hope you got your own forrest too!

Anyway, I'm a Swede too :) , but live in the suburbs of Stockholm. I'm not extremely pessimistic about this peak oil thing, but sure as hell prices gonna go up on petrol and energy as a whole.

My preps are as follows:
- Geotermal heat pump for my house with possibillity to combine with solar heat
- Woodstove (guess I'll have to burn the furniture if the shit really hits the fan...)
- Better insulation of the house (only made like 25% of the house this far)
- The house is only 1 km (0,7 miljes) from an electric train so I do not have to use any car to get to work etc.
- Old tough military bicycle will get me the short distances
- Ethanol compatible car (Yes a bought the hype when I bought the car...)

Mayor worry for me is my debt, it is like 80% of the market value of the house.

I hope this will be enough, but if it failes I own 25% of a farmhouse with a lot of forrest and arrable land 200 km (140 miles) north of Stockholm


Actually 8 m3 wood is all that we need for the winter heating. The house is only 65 squaremeter, well insulated with new superwindows.

For you i think that you should go out of debt, but that could of cource be difficult, if you must live in Stockholm because you have a job there. I myself am newly retired, so i have had the time to pay off all debts.

Plan for reallocation out of the city if all goes ugly. The problem in Stockholm, is that there is a housingbubble, which will burst within a couple of years. You should sell NOW and rent in the mean time.


I know Kenneth, there is a bubble, it is just a question of how big it is. I love my house and take my chances that the bubble is small and will not burst to violently...

¿Why no debt? If it is all going to go down burnin', ¿why not pile up a nice pile of debt in paper, in exchange for some real stuff? Get yourself a nice tool shop, or some sheep and cows. Something you can do for a living while the crash comes, and then you will find yourself in an very viable position.

Well, I do not belive that civilisation will be over after peak oil. I actually belive that technology will save the day, BUT we will have a lot of pain in a couple of decades and if energy prices really take of, so will inflation and then the interest rates will be higher. That is the reason to keep debt down.

I do not believe I will have to retreat to the farm I partly own, but since it is my summer house anyway, I call it my plan B to get some cred from the hard core doomers :)

If you believe both iflation and interest rates will go up (like I do in the medium to the long term) maybe the most prudent thing would be to draw on a line of credit with fixed interest rate now, even if this is at premium to current rate. Thus you will be repaying your debt with devaluating money and your interest rate payments won't go up - a win win situation.

Thanks for proposal LevinK, but the premium is to high for me, I take my chances with the not fixed interet rate loans. However, I allways keep 150,000 SEK (20,000$) easy awailable on the bank in case it is needed in short notice. That is my back up.

Buy some gold fore theese 150 000 SEK.


I do not know really if gold is so valuable anymore. All the money in the world are fiat-money nowadays, gold is just like any other commodity I guess. Why would we need a lot of gold in a post peak world?

Because gold has "real" value, while fiat currencies don't. Other physical commodities have real value too, gold is just one of the most "condensed".

Nope, gold only has the value of what someone want to buy it for. And why is gold a good investment in a peak oil world?

gold is just like any other commodity I guess.

And just like any other commodity, its value is based upon the amount of energy involved in its production. Therefore, its value is constant, regardless of what happens to the currency you buy it in. Its value cannot (over any long term) be affected by the fluctuations of fiat currencies.

Gold has been the gold standard of commodities because it doesn't rust, doesn't rot, can be subdivided into extremely small amounts, and cannot be faked. As long as the world utilizes some form of currency in place of the barter system, gold will be the ultimate form of wealth.

"And just like any other commodity, its value is based upon the amount of energy involved in its production."

No, this is pointless neoMarxism. Gold is worth what you are willing to pay for it or trade it for

Agreed. Gold was still worth something in Argentina during the collapse (though they recommended small pieces, like gold wedding rings, since you couldn't "cash" larger ones). But in Sarajevo, they said things like shampoo and cast iron cookware were more valued than gold:

After awhile, even gold can lose its luster. But there is no luxury in war quite like toilet paper. Its surplus value is greater than gold's.

Eventually, the war stops and all of the S has HTF. At that point, people will start making shampoo, skillets and toilet paper to sell. That is when the gold will be quite a bit more valuable than any barter item. Barter economies are not efficient, and will not last for any significant amount of time.

It is tough to buy toilet paper with a skillet.

Over the short term, yes the value of gold can decrease. However, over the long term, the value has to be based upon the cost to extract. As with any other commodity, if it sells for less than the cost to extract, new extraction will cease, driving up the cost over the long term. Since the mining cost for gold will not go down in the future, the true value of gold can only go up.

Gold will only lose its value if people no longer consider it to be the ultimate means to store wealth. With 6000 years of history on my side, I am not too worried about that happening.

Agreed, although even if gold is no longer seen as the ultimate means to store wealth, it has other properties that people will desire. Not only will gold and silver retain value in the long run as effective forms of money, they also have value in medicine, electronics, jewellery, photography, etc. They have had other uses beyond merely storing wealth for 1000s of years. That will not change.

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

http://www.vvbgc.se/ they are experimenting with turning all kinds of biofuel including wood into gas and vehicle fuel.

Not a bad Idea! Maybe you could train the cows to attack the bankers when they come looking for their money...

Tom A-B


mogambo guru !!! lol

Maybe I am missing the math on Exxon Mobil, but this company wants to increase production by 15%, while essentially doubling its E&P budget. Note that the present budget has just been able to hold production flat. I think that this announcement is more political than economic.

It's rather simple, isn't it? Exploration costs have gone exponential.

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

"I think that this announcement is more political than economic."

A CERA/Saudi-type PR Puff piece to comfort the complacent, sleepy Saps, and to try and deflect criticism and scapegoating of the Oil Barrons by the increasingly bewildered and desperate Congress of Limpwristed, brain-dead politicians.

1,000,000 bbl per day for $2 billion dollars! thats $2,000 per barrel per day of production, better cost to production than Exxon has achieved since about 1950, in spite of their not being allowed to explore and operate in 85% of the world's basins! Better buy the stock, its obvious that XOM has hired some Enron alumnus MBAs and former Arthur Anderson partners to help reform their old-fashioned accounting and stick-in-the-mud economic projections!(that's irony,you humorless nerds!)

Just a note about the malt article - it is not merely the price of grain for biofuel which seems worthwhile to farmers, it is the reduced risk connected to that price. Barley intended for fuel ethanol is not subjected to very stringent demands by the purchaser, which makes the farmer's income much less dependent on variables like the weather.

This is an interesting point - not that I personally have any interest in the ethanol debate (biodiesel, broadly defined, can provide the necessary fuel to keep mechanical farming practical, while most of the ethanol debate in the U.S. seems based on the desire to keep consumers driving to the mall, while making sure tax money is spread to the well connected to keep those consumers' dream alive).

Growing a crop intended to literally burn may be much easier than growing a food crop, once you look at the details involved. There seem to be more variables involved than simply food or fuel, at least when looked at through a farmer's perspective.

A very good observation - one made even more so in a world of climate fluctuation.

Syntec, can I have an email address - I have question about Syntec. Thanks

My address is "berninio" with hotmail server.

"Growing a crop intended to literally burn may be much easier than growing a food crop, once you look at the details involved. There seem to be more variables involved than simply food or fuel, at least when looked at through a farmer's perspective."

I would submit that the farmers costs are not that inflexible.
Easier? He has to work just as hard.

If you are talking about being 'docked' at the grainery then perhaps that would be true but the farmer may not be certain where the crop is going and to who. The grainery might not be interested in taking damaged grain into its bins along with good grain. Hard to separate.

If you were contracting to a specific entity ,then yes some savings might possibly be gained but overall the farmer has to produce "BUSHELS". He is paid by the bushels and by the quality of those bushels. Each load is probed and analyzed at you pull the tractor trailer into the grainery. Before you dump its moisture is determined, the damage and many other factors are ascertained. If say your corn has high moisture then they may tell you to go somewhere else. Happens. I have seen it,never happened to me as yet since the combine tells you the moisture, if your sensor is working correctly.

I suppose an ethanol plant might not care of the corn was damaged, cracked or very dirty or high in moisture but I believe that they would dock you. Not sure since that has not happened here as yet as the plants are still coming up.

But will seeds costs go down? Will fertilizer go down? Will diesel fuel go down? Will labor go down? Will equipment costs go down? Will trucking go down? Will crop insurance go down? Will the interest on farm debts decrease? Will farmers want to grow subpar crops and take subpar prices after all the above factors are weighted? I really doubt it.

All good points, though to the extremely tiny amount I know something about farming here, a lot of the grain is quite sensitive to the weather - German farmers tend to plant a lot more 'variable' crops like dinkel (smelt, it seems in English) - where the amount of protein, for example, can seemingly vary from 20% to 40% per harvest. Barley is much the same, when used for malting - by no means can all harvested barley be turned into good malt. A farmer here can then accept a fixed price, regardless of quality, whereas barley for beer can be a risk.

No question that the fixed costs don't really change much - but the final payout may, depending on how this year's weather turns out.

Growing a crop intended to literally burn may be much easier than growing a food crop, once you look at the details involved. There seem to be more variables involved than simply food or fuel, at least when looked at through a farmer's perspective.

I heard someone argue, only half jesting, that it might be far more effective to run powerplants and engines on fertilizer and skip the plant part alltogether. The stuff does burn, you know. It even explodes.

This is the quote I am afraid people will focus on from the BBC report on climate change ( and other reports of IPCC findings)

Global agricultural production potential is likely to increase with increases in global average temperature up to about 3C, but above this it is very likely to decrease.

Since everyone hopes/ expects that the increase will be less than 3 degrees centigrade, the implication is that the net impact will be positive on food production.

I can't believe increased food production will actually occur with rising temperatures, especially when the combined impact of peak oil is considered. The world will need to do more and more irrigating, when water is getting more and more scarce. Fertilizer will become increasingly high priced. Diesel for farm equipment and transportation will increase in cost.

But people will read this an think that real problems are still years away, if they happen at all, and the short-term impacts are likely favorable.

All our problems are years away, and have been for years.

We live in the best of all possible worlds, after all.

I came into college thinking that....

Global warming(climate change)

I disagree that all these changes "are years away".

Right now I am looking out my window at trees whose leaves are dead. My fruit trees will produce nothing this year.

Much of the US is reporting that this years orchards were very heavily damaged. If the nut trees in the woods bear no nuts then many many animals will be hard put to find food. Wild turkeys,deer and squirrels to name a few.

We had a very cold Feburary followed by a very warm March(sometimes close to 90 degrees here) and then this week or two of subfreezing temperatures. In fact last nite was another freeze warming with temperatures in the mid 20's.

Just google : fruit frost damage...and click on NEWS to see what has happened.

We have severe problems with bee hives and now massive damage to fruit and berries. The news is not yet developed on what happened to the wheat and corn. Hopefully it won't be too damaging.

The world of Climate Change is upon us right now. Not years away. Extreme changes may produce averages that are normal. If this is all anyone sees then they are being fooled.

Last year was recorded as the warmest on record.

Please don't tell me the effects are not happening right now.

Our fruit and nuts are gone for the year also. We covered the peas and lettuce and hope it has survived. Longest spring freeze on record, I hear (six nights of sub-freezing temperatures.)

Yesterday evening I was looking for a snack to eat before bed and I thought to myself "I'm not really hungry". But yet I had to have that snack.

I wonder what it will be like when a meal a day is a blessing. Hunger will feel normal, just like being full these days feels normal.

Tom A-B

Hi airdale,

Sorry to hear all the damage you are getting.

What hardiness zone are you used to, I am on the coast with hardiness of about 8 on a scale of 11.

So far we have had a relatively uneventful but warmer spring. Year before last we got a false spring with cold snap and lots of winds which did the cherries no good at all. Main problem where I am is increased survival overwinter of several pests.

While it is still around I am going to put a couple rolls of poly in the basement. I have the end of one roll I scrounged from the back of a plastic bag manufacturer about 20 years ago that has not deteriorated to any degree that I can see.

Hi,,,my hardiness zone.

Well using this USDA map:


which unlike the old one, has 20 or so zones.

I am in 6b. Editted to change from 6a to 6b.

I just spoke to a person in the Piedmont of N. Carolina ,talking to her about grits and corn, and she said every fruit tree there was done for...gone totally. This is the middle of N. Carolina. All around the south where we had this very warm March the results appear to be the same.

Of course the MSM doesn't speak of these things. The connections to wildlife and food prices are evident. BUT no one is listening. No one wants to listen. And thats where I derive the belief that we are walking down the track on a high overpass with the big freight train headed right at us. No time to brake and no shoulders to jump off onto.

I was talking to her about the subject of grits and found that no one is processing them the old fashioned way using an alkaline process to unlock the niacin. I had brought 15 lbs. of stoneground grits from them my last trip there. Eating some right now as a matter of fact.

Check the new hardiness zone map I referred to. Are you west coast then or east?


Am on west coast, and your hardiness map puts me still in zone 8. Looks a bit cooler where you are.

About 'listening', I called my brother yesterday to thank him for a present on my arrival to the state of government subsidized coothood. 65. and tried to talk to him a bit about peak and he really didn't want to go down that track. So we talked about the weather instead. ;)

Do you have a dug in greenhouse? A US senator in the 60's fed up with the system, went back to the land and had a large one. I've always thought this was such a good idea, having spent several winters in the Canadian prairies. Bottom heat from below ground with sun from the top, if oil hadn't been so cheap I think there would be more happening that way now.

Dug-in Greenhouses...

That's part of my plan, adding a mulch/compost/biogas system to the north or end walls, where they'll get solar gain to keep working through the winter, and provide insulation and thermal mass to the G-house in general.

Jean Pain's biogas system is the main inspiration, but building these piles into bins that adjoin (with Cinderblock walls, possibly) structures, instead of piping that heat over to the buildings. It's a concept-in-progress.. would be up in the White Mts. in western Maine.

From the 'New Independent Home' - by Chelsea Green pub.1999
"Elliot Coleman reports that his gardens (in greenhouses) in Maine are so productive in Autumn, Winter and Spring that he takes Summers off.
Here's his book. Most of the Gardeners up here seem to know him.

Bob Fiske

LEt me offer up:


(looking about sunnyjohn isn't a bad plan anyway)

Thanks Eric!

I have written about the "Cool Tube" that my family built into a Passive Solar house in Maine in the 80's, and this is the closest thing to it that I've seen since.

Good info in that page!


Thanks both of you,

I will read the two articles in bed tonight, it will make a pleasant change from what I am reading right now Twilght in the Desert which of course you know, and The End of the Line (how Overfishing Is Changing the World and What We Eat) by Charles Clover which perhaps you haven't...makes interesting if not optomisic reading about our diminishing finny friends. Oops, just took another look at your link Eric and it has links on links, my my what a lot of work done there.

About the book, airdale, I went to try to order it from the local library and found that I couldn't because it is already on order by my wife, she ordered it about two weeks ago so should be reading it soon.

As far as green houses here in the winter, as you can see from the spreadsheet below, (of a nearby Island) that sun in winter just doesn't happen. I am going to look into some high intensity lighting for this next winter...maybe grab a beach towel and go spend my days there, no kidding it gets pretty bleak in those months and I will gladly trade some of our mild temperatures for some of your sun and cold at that time, and pay peak shipping charges too..


I was kidding about the years away, as the future then is our now, but in terms of fruit - I grew up in Northern Virginia, and several times, essentially the entire apple harvest was wiped out due to weather - either spring, summer, or fall. Whether too cold, too dry, too wet, too hot - extremes were a given over a long enough time frame. And generally, what was seen as a total loss wasn't - there was a certain resiliency.

Such things are normal, not extraordinary. I find that the idea of normality has seemingly changed about as much as the weather. Though the weather in Germany is currently unprecedented - the strawberries are already larger than 1/4", the daffodils are done, and all the fruit trees are in glorious bloom, with few bees. Yesterday, my pear tree had two honey bees, more than many cherry trees seemed to be attracting.

I believe in climate change - it always has before, and I expect it to in the future.


The problem was not the frigid killing frost of early April. It was the extremely warm month of March that caused this.

Yes it has happened to some degree in the past. I have owned this farm for nigh onto 20 yrs and never saw the weather produce quite this amount of damage before. I usually would get some fruit always. Maybe at least some pears.

This time pears didn't even bloom that I could see.

The rhythms of nature and its effects on our foodstuffs is what we live by. This huge, huge population of conspicuous consuming people don't realize that. Last year was very contentious with very bad winds,rains and flooding right at harvest. Many farmers here took a bad hit. Some just made ends meet and no profits. Granted corn doubled but if your corn was down in the mud then it didn't matter. We had standing water over huge numbers of acres. The stalks just fell over. Its lucky this doesn't happen everywhere in the corn belt.

Yes, SW Missouri (and I assume other parts of
the state) lost many acres of fruit in the
freeze. I managed to save the above ground
vegetables in my gardens by covering them with blankets and
placing milk jugs filled with hot water under
the blankets. But the number of record breaking
events we've had the last couple of years is
very alarming and, I do believe, due to climate
change. One more reason to localize food pro-
duction and change one crop planting to more varied crops.

Sadly, I don't see much of that happening except
on the individual level. Quite scary.


Hello Airdale -

Sorry to hear about your trees and crops. The honeybee situation is very troubling...

As you say - I also believe we are witnessing effects of climate change now.

I live in upstate NY and I recognize this is purely anecdotal evidence but I do have a fairly keen eye for changes in the natural world. One thing I've noticed over the past couple years is that the wind in these parts just does not let up anymore. I swear I remember when nice weather would settle into the region and you'd have some gentle breezes for a few days. Now it just blows and blows during every season - and the extremes seem more pronounced as well.

I really noticed it one night this winter when I kept thinking a train was frequently going by on a nearby track - but the rumble of the "train" just never seemed to go away... I ignored it for awhile before focusing on it again and thinking it was very strange. I finally went outside and realized the roar was the constant pummeling of the forest off to the west of me. Since I figured it out we've had 8 or 10 "events" of similar intensity. One particulary bad night brought down a 50 ft white pine tree directly into my driveway.

The planet heating up is really tightening those pressure gradients... As someone said "the energy has to go somewhere..."

I've experienced the same thing here in the mountains of Colorado. This year we had a record number of trees down. But frankly, I don't know whether it has anything to do with warming.

Paleoclimatology indicates that most of North America has been desert through the most recent million years of history. It is only rarely that it springs to life as now. The assumption is just that - an assumption. I have seen very little that would back that assumption up other than misplaced cornucopian optimism.

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

To futher expand on that, most of prehistory's interglacials (of which we are now living in) have been relatively short lived. Scrutiny of the vostoc ice cores datign back 400,000 years show temperatures mostly residing in a low temperatur glacial state, interspersed by brief warm interglacial periods, with violent climatic forcing during transition times.

To say we are actually very lucky to be living during this age is getting the cart before the horse. It requires a paradigm shift as the reason we are likely at this technological level is because of the relativley long (short by geological standard) stable warm period - which by historical standard is not the norm.

Sorry to shatter everyones illusions that climate always has been and should remain unchanging.


Surely people don't believe that climate is unchanging...

Looking at the data provided by the ice cores (and other proxies) it obvious that the climate follows a pattern of ice-ages punctuated by inter-glacial warm periods. (see Milankovitch Cycle)

What is "peculiar" about our current situation is that we are experiencing conditions which are "out of cycle". Just as we reached the cyclical high point of the current inter-glacial, we appear to have perturbed the system (with a small increase of GHG concentrations) enough to move outside it's regular cycle.

Apologies if i've misinterpreted your comment.

No you haven't misinterpruted my comment. But we are not experiencing conditions which are out of cycle. This is wrong. Careful examination of the CO2 and temp data for the Vostoc core shows variablitlity on the duration of these interglacials from between 35000 and 10000 years.


We are currently about 12000 through the current interglacial so still plenty of scope for futher warming. Secondly temperatures rose up to 3degC above current mean. Check the graph above. So we can still rise a further 2degC and still be within the boundaries of past historic warming.

However that said, IF the anthropogenic component of the warming (ie 1degC since the start of the industrial revolution)is augmenting a natural upwards tendancy then, as many climate scients have correctly said, this could lead to runaway heating (feedback loop scenario) whereby the earth is perturbed out of it's pattern. This is a big IF and scientist do not fully understand the mechanisms that cause natural climate forcing in the first place. Once we understand this ONLY Then are we able to factor in the anthropogenic component of global warming and understand the full implications of our raising of CO2 to levels 100-150 above those seen in the last 600,000 years.


I really don't know why i worry about these things... having read your comment, and looked a picture, i feel reassured that the scientists working on the IPCC reports are just out to scare me.

I am reading everything I can find on the subject, on both sides of the argument and have been doing so for a few years. It's an incredibly interesting subject. I would never dismiss the IPCC, but there is also plenty of study materials on past historic climate change and they continue to mount up as we get an ever bigger and better understanding of the system earth as a whole.


Similarly, i've spent most of the last year not working and studying in this field. I have a science background, but don't kid myself about becoming an expert in another field. My degree is in chemistry, a lot of the basic science is the same, but...

IPCC represents an attempt by the climate science community to present it's finding to the world governments. If you listen to the likes of Jim Hansen, Gavin Schmidt, it's pretty clear that they believe that they understand enough of the system to make some pretty detailed predictions of future events, and explain mcuh of the past climate record. Perhaps more importantly, their models are tracking reality.

It's important that there are people in the science community (although many of the naysayers are not) who challenge these results. However, it is a mistake to see each challenge as a blow to the current consensus. What will impact the prevailing view is not the challenge, but better results.

Understanding the paleoclimate is a critical baseline, but at the same time it is important to recognise what has changed. The effect of GHGs in the atmosphere is simple science (see the latest on realclimate to see how simple), and for another theory to become predominant the degree to which we have changed the composition of the atmosphere will have to be explained away.

As far as i'm concerned AGW is the currently the only game in town, and the bar for alternative explanations is getting higher and higher.

Here are the problems:

1. We are experiencing a warming that is far faster than any prior records indicate.
2. Every warming event led to an ice age. "Abrupt" climate change is called that for a reason. Ice ages can begin in as little as 5 years and often within a decade or two tops.
3. Our global population is in overshoot. To sustain 7 billion people, we need the agricultural systems that we have today. We have NO guarantee that a warming or cooling planetary climate will be more hospitable. Therefore, forcing the climate to change via anthropogenic action is dangerous if we do not understand it.

If we fully understood climate and if we knew that warming the planet would result in a more hospitable planet, then we might argue that it's a good thing. But past temperature records are not so kind. A warmer earth tended to mean a mostly desert of North America. A warmer earth tended to mean more desert in Australia. A warmer earth tended to mean more desert in central Eurasia. Those are the three great grain baskets of the world. Losing even one would be catastrophic. Losing all three would likely mean billions of deaths.

And a colder earth, as during the ice ages, was far less hospitable than now.

We thought we had several thousand more years to figure out climate before the current interglacial was due to end. Now we are rushing headlong into some unknown situation. Therefore the best recommendation is to stop, right now, and figure out climate before we go forcing it off early in one direction or another.

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

Hi Grey,

Thanks for your comment.

re: "...figure out climate before we go forcing it off early in one direction or another."

Do you really think we have the capability to force it in either direction, or was this kind of a figure of speech?

Of course "we" can!

It's called Nuclear Winter.



Yes I do. The evidence is overwhelming that we are now causing a forcing into a higher temperature situation without understanding the impacts of that situation. I will tell you though that I recently saw a Pentagon white paper reviewing the security threat of climate change so someone is thinking about this.

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

Hi Grey,

Thanks and the limitations of written communication are sometimes frustrating to me. I meant to emphasis the "either" in his comment above. I assume the human forcing (unintended) toward warming. I was asking about the opposite.

Re: "...white paper..."

Have you seen any of interest re: peak oil, economic effects, mitigation, etc.?

I don't disagree with any of that. Climate change happens. Messing with chaotic systems is likely to end in disaster. It's my contention that we are doing just that - by changing the composition of the atmosphere in measurable ways we risk perturbing the system.

The climate has been ticking along quite nicely for a long time, settling into a fairly predictable long-term cycle. Natural events periodically shifted the extremes, but the cycle was maintained. In reality that's what our little terrascaping experiment is likely to do: shift the extremes.

Unfortunately for us, with a population of 7 billion we don't have much room for manoeuvre... in to the unknown we go!

I in no way discount the threat of global warming. But I agree with Matthew Simmons that peak oil is going to hit first and harder than global warming, at least in the near term. This apparently seems to be the opinion of William Ruddiman in Plows, Pagues and Petroleum, a climate researcher, not a petroleum geologist.

What I really fear is peak oil hitting us unprepared, leaving civilization reeling from the blow then climate change sweeps in and finishes the job.

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

Fun new science discoveries


Water discovered on first Extro-planet


Sunspot record now and the relationship with climate, new study, and tries to tie in last twenty years is CO2 as an argument. Requires a rethinking then of whole CO2 theory. lets hear it. sounds more like political pandering in the face of other evidence,


Eruption of the century, of course the volcanic activty below and above the surface doens't get much press, ho hum.


Nile shows suns influence on climate. This makes Greenland ice cores and now "mud cores", and a set of very accurate Nile river water readings.

Quid Clarius Astris
Ubi Bene ibi patria


Sunspot record now and the relationship with climate, new study, and tries to tie in last twenty years is CO2 as an argument. Requires a rethinking then of whole CO2 theory. lets hear it. sounds more like political pandering in the face of other evidence,

Pandering? More like utter tripe. If believable the sun would be heating the upper atmosphere, stratosphere IIRC, that is not where the action is, GH gases congregate much lower.

I am not sure what you are saying.

And I don't think that the claim is the actual heat from the sun activity is causing the change in climate. Sunspots also mean more opportunity for flares, which emit tremendous amouts of energy, and effect our planet in multiple ways. X flares if pointed in the direction of the earth can fry the grid and you.

I put the volcano activity and a link to this location which follows many events in real time


(if your in an event go look and see if you made their list ;). Even car accidents in the US can appear. But look at the long long list of volcano activity, I think 30 would be a "normal" number at a time. Way above that and have been.

Volcanic/tectonic activity has been very active the last few years. It wasn't promoted, but Yellowstone seems to showing some very "odd" behaviour. Not that it would blow, they can't say that. But when a great amount of land "rises" against the Tetons and the Tetons' "sink" from this rise in a short period of years. Well,,, magma on the move.

I don't have to remind you that a volcanic eruption or several large eruptions can put us into an instant cold period, no matter what the sun is doing, or how much CO2 and other gas the volcano pumps out,. The end of the "little ice age" was extended and had a summer that never happened. Have you read about that experience.

Many factors can effect climate.

Roger can you explain which drives the planets atmosphere, and thus the climate, is it CO2 or is it Water vapor H20. Does CO2 drive temp or does temp create more CO2. Which follows the other. What amount of Co2 is in the atmosphere and what amount of water vapor is in the atmosphere.

Quid Clarius Astris
Ubi Bene ibi patria

the net impact will be positive on food production.

"Climate change is predicted to reduce U.S. crop yields by 25%-80%"

I already linked this, not a single comment, not even denial from the "usual suspects"

Nigeria: Militants Vow to Engage Federal Government in War

A coalition of militants under the aegis of "Coalition of Niger Delta Forces" have issued the Federal Government with 72 hours ultimatum to withdraw all military personnel from the Niger Delta, release Alhaji Asari Dokubo and Raphael Uwazurike or they will declare a full blown war on them.

At the expiration of the time of the ultimatum, the militants also advised all foreigners to leave the Niger Delta as they could be affected in the conflagration they were going to precipitate...

Nigeria: Militancy - Amicus Calls for UK Coy Withdrawal From Nigeria

AN OFFSHORE union leader has called on all British oil companies including oil rigs to pull out of the volatile Niger Delta region owing to the rising level of disruption to oil and gas exploration and production activities in area...

"How many more people have to be killed or kidnapped before other companies get the message?" He added...

...the Federal Government last week launched the 2007 licensing round for oil and gas blocks. However... there are indications that the round may not draw the majors and large independents Nigeria is accustomed to attracting.

About a year ago, I posted a link to a Peak Oil future output modeling program I had written. I soon realized that the first version was difficult to use and presented several data presentation errors, therefor I decided to rewrite the program.

Like the first version the new version currently only runs on Windows 2K and XP operating systems. I have looked for someone to create the program in Flash for web page interactive use, but so far no one has accepted the request.

In this version, I have updated the Hubbert Linearization function to include an interactive Linear Least Squares best fit to the current dataset. The width of data points used in the best fit is selectable from the dialog front panel. Clicking and holding the left mouse on the graph while moving left and right will fit the line at the current mouse position. The end UUR is displayed derived from the best fit intercept with the x axis.

Additional information is available on the linked web page, where the 275K zip file can be downloaded.

I request anyone with suggestions how to improve this tool to contact me at the email address on the linked page or at the email address for my TOC user information.

Although I realize that this modeling tool is quite simple and perhaps not very useful for serious study, I hope it does offer the users a way to create future oil supply scenarios and observe how the HL graph represents the calculated production.

Peak oil modeling tool

"I request anyone with suggestions how to improve this tool to contact me"

My only suggestion would be to include random "above ground" factors like those that made the shoulder on the left-side of the graph on the way up.

Maybe give varying weight to each possibility and place their probabilities highest at the peak and slightly post peak. For example, Nigerian "Vandals" have a relatively low weighting while having Iran go "off-line" (for whatever reason) and possibly escalating middle east crisis engulfing SA etc and knocking out the majority of their output would have much higher weight (you can vary the "probability" of each as you see fit, and estimate the effect, or "weight" of each as you see fit).

And then try to model the "recovery" period to get back to some sort of normal productionfrom these traumas - assuming it's possible (i.e. the mid-east doesn't become a radioactive waste land). This could be based on the rate at which it would take to rebuild and maintain infrastructure in the various regions (Niger Delta vs S.A. etc... maybe use past examples like GOM after Katrina, or Iran or Russia after the change in government, or Iraq after the US invasion...).

Good luck with modeling the Stairway to Hades!


Thanks for:

Good luck with modeling the Stairway to Hades!

Very apropos, how about putting that to music?

Considering you wrote the thing in C / C++, I think that a conversion to Java would be easier than a conversion to flash. My Java skills are pretty rusty, but if I had the TIME, I would volunteer. Right now all of my free time that can be spent programming is doing some freelance PHP and MySQL work. I wouldn't worry too much that it's a Windows based product. I say that, and I have a Mac. haha. (I also have a Windows box that I use on occasion out of necessity.)

Hello Durandal,

That would be wonderful if you could port this concept to Java. Perhaps the tool could then be added as a link on TOD for everyone to use.

Send me an email for the source code.

Wow, that is really cool. Thanks

Oops, it's Shale Oil Again:

Can Royal Dutch Shell's Shale Extraction Technique End 'Peak Oil' Paranoia?

That's about to change, though, as engineers at Royal Dutch Shell (RDS.A) have applied for a patent on a new method of extracting shale oil cheaply and cleanly. (As an interesting side note, it is the largest patent application in U.S. history.) Amazingly, this method:

  • Is cleaner than conventional drilling
  • Generates the highest grade of light-sweet crude oil, which burns cleaner than other varieties
  • Becomes profitable with oil just north of $30 a barrel (which we've already blown past)

In other words, with Shell's new technique, it actually benefits the environment to switch to shale oil. I found this hard to believe at first, but seeing as I am a patent lawyer, I decided to pull the patent application to see for myself. When I saw the invention laid out on paper, I was convinced that it would work.

You could read for yourself, but as he's a patent lawyer, I think we should trust him.

OK, maybe not. (recommended)

It is funny that a supposed patent attorney is not listed as a registered patent attorny on the USPTO website or even listed as an attorney on Martindale.com.

The patent application is 20040015023 if anyone wants to check it out. 5383 claims in that application. That is seriously insane!!!

ROFLMAO...that is a good graphic....baked potatos.

Don't laugh. Once we figure out corn is a loser, we will then go on to baked potatoes. Well, what about the energy content of raw potatoes?

Actually, more discussion is needed about that cattle manure category. I did a research paper back in my college days during the mid 70s energy crisis about the conversion of agricultural and human wastes into methane. It turns out that this is not a new technology, they had been already doing it for years in India and a few other places. The technology is inexpensive and scaleable from individual households/farms up to cities. It is a good example of an EF Schumacher "Small is Beautiful" technology.

Given that methane gas released into the atmosphere from agricultural operations and human sewage is a much more potent greenhouse gas than CO2, there is clearly an added importance in capturing and burning the stuff up.

This would by no means be a "silver bullet" but it does fit in the "silver BB" category. It would be interesting to see what percentage of our present natural gas consumption could be covered by this resource if it were developed.

I am surprised I have not found more discussion about it - although I suppose that talking about gleaming new wind generators and PV arrays are more attractive than talking about dung. ;-)

My good man, the world's only superpower will not be run on poo!

Of course not Toliver old thing, that is a superpower's chief export!

If dung is an interest of yours I may have a link to contribute. Try this: http://beef.unl.edu/. This link may be a haystack rather than the needle.

I got it from my neighbor who is a grad student. He just did his thesis on potassium levels in dung to be used as fertilizer.

'Dung to methane' searches will probably (finger) labor intensive. ;)

Where IS that 'Theory of Everything' ?

I am surprised I have not found more discussion about it - although I suppose that talking about gleaming new wind generators and PV arrays are more attractive than talking about dung. ;-)

Anaerobic digestion was previously discussed here.

A fair # of municipal sewage treatment plants are now starting to find a use for sewage nethane. Run it through a generator and use the power internally. Use it (or generator exhaust) for heat when needed (such as winter).

Best Hopes for ...


Holy Cow!

Manure is that energy dense? That means that corn ethanol is even better than we thought! Because the manure is excreted from the cows which eat the dry distillers grains which is not eaten by the yeast which feed on the sugars which come from the corn (which is not eaten by humans). The EROEI is going up just thinking about it.

Larger is better when the biogas is to be upgraded to wehicle fuel standard since that is an expencive piece of equipment. In my home town Linköping 5% of all wehicle fuel sold is biogas.

This quote, from Joule's "Shell's Shale extraction Technique" above is halarious:

In fact, once shale production takes off, we could easily become the world's biggest exporter of oil, with China as our biggest customer. Strange as it may sound, it is quite possible that, within our lifetimes, Chinese government officials may take to fretting about their dependence on "Middle-Western" oil.

None of these wild eyed cornucopians ever looks at "flow rate". That is, even if Shell's scheme actually works, as the other article states, it just might produce 100,000 barrels per day, perhaps by 2020.

And that will make the USA the world's largest oil exporter? Yeah right! Do these silly cornucopians have even half a brain?

Ron Patterson

Russian energy news and opinion:
The Northern Sea Route is a highly important factor in developing hydrocarbon deposits on Russia's Arctic shelf, which contains an estimated 62.5 trillion cubic meters of natural gas, nine billion metric tons of crude oil in offshore deposits and 3.5 billion metric tons of oil on shore. This accounts for 25% of global hydrocarbon deposits. There are plans to produce up to seven million metric tons of oil at the Prirazlomnoye deposit in the Pechora Bay, in the south-west part of the Barents Sea. The Shtokman gas-condensate deposit in the Barents Sea and deposits in the Kara Sea and the Laptev Sea also contain tremendous amounts of natural gas.

I posted this yesterday
Mr WeatherGlass,

Although I disagree with Mr Luddite on purpose only I believe it is to speed up the process of GW to access the oil in the Artic. I understand it is 25% of world reserves untouched at this time. Just a thought. Unfortunately this Weather Modification also has multiple and varied uses and purposes. Imagine if you will...

Mr sendoilplease(SOP) I believe is a troll. Here are a few of his most recent greatest hits:

sendoilplease on April 9, 2007 - 10:19pm
Davet, these people are beyond hope. Trying to explain anything to them will only encourage them.

sendoilplease on April 9, 2007 - 10:11pm
I can't believe something this stupid is being discussed on TOD. Talk about fucking retarded. Next larry the lunatic will bring up aliens living among us and "faked" moon landings.

Here is a SOP comment on Israel launching rockets: into Gaza

From a golden oldie favorite of mine (and apparently cids):

"I watched with glee while your kings and queens
fought for Ten Decades, for the Godz they made..."

comment from SOP:
As for "conservation measures," I bet many will be long forgotten within a decade. Many parts of our world we now call "civilized" will likely re-enact the tale of Easter Island before whats left of the Herd moves on.

Comment on Ethanol:
(GOD) Shows Ethanol Good for America

Vinod, appeals to the modern peasant's diety in hopes of winning the PR battle...

I wonder if he has a ranch in paraguay too ?

Comments about Israeli conflict:
Pick your favorite team (for whatever reason), make your excuses and apologies now in advance, but also make some popcorn and watch from a safe distance if you can.

davet posts this:
davet on April 9, 2007 - 6:46pm
What you're really seeing is regions of differing humidities. When an AC reaches a region of supersaturation a contrail forms. Different air parcels can have widely varying humidities, so it looks like contrails are turned on and off.

No literature to back it up, just a stupid inane comment.. It is obvious neither troll viewed the link I provided. I also was in contact with our Air Force and they have a interesting PDF on Contrails that state they should only last for 30 minutes max(complete with satellite imagery) google it.
Chemtrails are absolutely Peak Oil related and they are contributing to the degrading of our Bios-sphere
Keep in mind this is being done in many places and countries but not all. Yet the countries this is not happennig have jet aircraft. Look up, if your over 30 you should know what an actual condensation trail should look like. Should it look like any of the many pictures in the link I provided?.

There very well may be 25% of the world's remaining undeveloped oil and gas in the Artic and Antartic. But it will take consistent prices of over $200/bbl to make them worth developing. The climate is extreme, with winds that consistently exceed hurricane force. Right now drilling can only be done on the North Slope during the winter when the permafrost is frozen. And Russia owns 3/4ths of the Artic Sea and is unlikely to allow their resources to be exploited at any reasonable cost.
It doesn't really matter how large the reserves are if we can't afford them. Exponentially rising costs is the real lesson to be learned from Peak Oil.

"Exponentially rising costs is the real lesson to be learned from Peak Oil."

I strongly concur.

I think WT once phrased it as something like, "Forced conservation is on the way". Forced conservation might be the most benign outcome ...

Just how these cost hikes ripple through the world economy is the big question I am currently pondering. I would like my investment portfolio to at least offset these cost hikes on my standard of living. I'd also like to profit above beyond the hit to my standard of living, but hedging the upcoming rise in costs is my first concern.

There very well may be 25% of the world's remaining undeveloped oil and gas in the Artic and Antartic. But it will take consistent prices of over $200/bbl to make them worth developing. The climate is extreme, with winds that consistently exceed hurricane force. Right now drilling can only be done on the North Slope during the winter when the permafrost is frozen. And Russia owns 3/4ths of the Artic Sea and is unlikely to allow their resources to be exploited at any reasonable cost.
It doesn't really matter how large the reserves are if we can't afford them. Exponentially rising costs is the real lesson to be learned from Peak Oil.

Reply to FFF:

You linked to this -

http://imageevent.com/firesat/strangedaysstrangeskies?z=3&c=4&n=1&m=-1&w addresing me. I wish you didn't.

In summary, deliberately placed chemical contrails are alleged to be doing Bad Things.

I found nothing to suggest that these claims are peer-reviewed in any reputable journal. Extraordinary claims demand extraordinary evidence.

IMO, these sorts of postings by fossilfuelfugue and Larry The Luddite bring disrepute to TOD, and waste everybodys' time. I filed those posters to the looney bin.

There is no peer review because the peers are silent ,the weathermen on tv never mention this phenomena.Will you go outside on a sunny morning and explain why these patterns appear in the sky and then later a perfectly sunny day has turned to smaze?

Dear Dr WeatherGlass,
Rest assured this will be the last time I address you. You have done a familiar trick , ask for proof, then when it is offered, place conditions on that proof not previously called for. You asked for sources and links to back up Mr Luddites troubling statements. Now they must be peer reviewed. Tell me Dr., all these posts on the Saudi oilfields, have they been "Peer-Reviewed"? If so by whom? Maybe Dr. Fractional_Flow? How about the emminent scientist Dr.Mearns?
Seriously, your Eyes should be all the proof you need.
All the cornucopian forecasts by CERA,EIA, do you believe them? Are they "Peer-Reviewed? The 9-11 commission report, do you believe that? Was that "Peer-Reviewed"?
I struggled with this myself. How could this be? Why would this be? In fact I have chosen to believe those that support this program must be doing it for money. So I reached my own conclusion as to Artic oil access as I stated in my brief post to you. This is my opinion alone. You may or may not have opinions not shared by the majority, does this make you a loon? The postings that do the most harm to this or any forum are those filled with Ignorance and Arrogance.
Ubi Dubium Ibi Liberatas!

I thought that Oil CEO was not allowed to post anymore ;-)

Roger: I think you are correct.
I was thinking yesterday how after all the serious discussion, that it was nice someone could bring a little levity to the discussion. Then the levity was joined and now we are in for the second round.

Who remembers the good old days when TOD had interminable threads about best concealed carry handguns for short fat elderly (massively virile) bipolar Jewish men?

MSNBC has a special report on The Mortgage Mess:

For some, the lesson learned is: “buyer beware.” But a series of interviews with subprime borrowers, mortgage lenders, appraisers, current and former regulators, and the inspector general of the Department of Housing and Urban Development paints a different picture — of a widespread pattern of questionable lending practices and outright fraud that has already sparked a wave of criminal and civil actions against various players in the $10 trillion market for residential mortgages.


Citigroup's CEO Charles Prince is due to detail the company's cost-cutting efforts Wednesday. According to reports, some 26,000 Citigroup employees will be reassigned, or their positions will be cut altogether.

Who knows what the longer term outcome will be--deflation or hyper-inflation--but the short to medium term trend is pretty clear: deflation in the auto/housing/finance sectors and inflation in the food/energy sectors.

Assuming that world crude oil production continues to be below the 5/05 peak rate (EIA), next month we will have seen two years of lower crude oil production rates, while oil prices have been about two-thirds higher than in the 20 months prior to 5/05.

I think that a lot of homeowners are at the end of their rope. They can't pay all of their bills and they can't borrow any more money.

You have problems in US like you say, but we in Europe(Sweden) have no big problems with gasolineprices or housepricis. We have a housingbubble here in Europe also, but we have not the insane speculation with flippers and so on, like you have. But the bursting of your housingbubble will drag down us all worldwide.


>I think that a lot of homeowners are at the end of their rope. They can't pay all of their bills and they can't borrow any more money.

FWIW: I have read articles that add fuel to your statement. Towns and cities are reporting increases in deliquent property taxes. Deliquencies in Condo fees are also rising. Sorry I don't have links for these.

Altough I disagree that this is directly caused by higher energy prices. Sure they are making an impact, but the housing bubble would have eventually popped even if energy prices remained low.

There is a good chance that will probably see demand destruction as over extended consumers are forced to cut spending and the unemployment rises. This leaves an opening for energy price declines in the future.

I think the best option for our near term future is a strong recession to kill off unneccearly expansion and buying us some time. A recession is by far much better than a severe energy crisis that we are heading straight towards.

>Who knows what the longer term outcome will be--deflation or hyper-inflation

I am leaning towards a mixed bag. The fed is doing a lot of repo purchases this year to prevent long term interest rates from rising. I suspect that when housing really starts to slide the fed will cut raises. So we make face a situation where some assets and services decline in price (deflation) and others assets and services inflate because of the lower rates. My guess is good as anyone elses since is virtually impossible to determine how market forces and gov't involvement will affect the economy.

A story on outright fraud in the Washington Post


As more of these cases come to light around the nation, the question is: How much did an epidemic of fraud contribute to the frenzied housing market of recent years?

The answer appears to be a lot in selected areas.

As related to Peak Oil, it is my understanding that the Chinese bought a lot of the mortgage backed securities wityh their $1 trillion.

They will NOT be happy when the underlying values plummet ($ value of mortgages goes down, and US $ goes down !) and will be disinclined to add to their hoard *already signs of this).

China has already indicated that they would like to hoard "real things" (copper, nickel, OIL) instead of paper with their trade surpluses. Let someone else hold the US $ (China seems open to holding more euros & yen to "diversify").

As Post-Peak Oil approaches, and oil prices steadily increase, the US can only pay for additional imports with $ and $ based assets (including mortgages), not with exports of goods & services like the rest of the world. One of our primary exports (mortgages) is now in critical danger of losing it's overseas market appeal (fraud destroys confidence quickly.

How will we buy oil at euro 50/barrel (today) much less at euro 80/barrel with just agricultural, Boeing, Microsoft and Hollywood exports ?

Best Hopes,



In Atlanta, entire neighborhoods and condominium developments, especially those in affluent areas, were hit by organized fraud rings. Initially, these schemes pumped up housing values for everyone as artificially high appraisals helped the swindlers get inflated loans. Legitimate home buyers rushed in to get a piece of what they thought was a soaring real estate market. Now as the fraud is being exposed, their home values are taking a hit.

As more of these cases come to light around the nation, the question is: How much did an epidemic of fraud contribute to the frenzied housing market of recent years?

While you can argue that those who were sucked into the scam should have known better, you have to feel sorry for the truly innocent bystanders:

Bill Cleary was one of the first to buy a condo in Deere Lofts, in a bustling area in downtown Atlanta. He was lured by the amenities -- hardwood floors, high ceilings -- as well as advertisements glamorizing the area. In 2001, he paid $213,000 for a two-bedroom unit.

Then Hill bought 40 units at a discount from the builder and started flipping them for about $400,000. The non-Hill condos left on the market were quickly snatched up.

But all of Hill's units ended up in foreclosure. Because Hill stopped paying homeowner dues, the condo association nearly went bankrupt and the building went downhill. Three years after Cleary bought his place, comparable two-bedroom units were selling for $130,000. "All of the promises they made went up in smoke," Cleary said of the developers.

Never mind.

I had friends who lived in the Deere Lofts. They got burnt by Hill as they were in a lease to own program in which he basically pocketed the money that was suppose to go to their downpayment. He also took control of the HOA and changed many of the contracts to companies he or his associates owned. But I'm really surprised that this was able to happen because it is standard boilerplate for condos that have strict 25% ownership and rental limits. In my building we are trying to reduce it even lower, perhaps into the single digits. I sounds like the developer played a willing part in getting Hill into the position he needed to play his game but the buyers should have either known or been alerted by their buyers agent that the missing 25% limit is a huge red flag of trouble.

Those who were looking for easy money and bought at 400k will probably never make their money because (or more accurately, the bank will never make their money back) but those like Bill Cleary who bought at the market value when the building opened should be fine in the long run. The values crashed on the sudden oversupply of units when Hill's units were taken back by the bank and put on the market. The area around the Deere Lofts keeps improving and there are other developments doing quite well nearby. Unlike many cookiecuter developments on the exurban fringe, this particular loft building is located intown so metro Atlanta's horrible traffic can be avoided and is in an actual historic building rather than a Centrex or Toll Brothers special.

The larger housing bubble will hurt all properties, but for those at the Deere Lofts who didn't play the ponzi game, I suspect they're going to be in better shape than most.

Makes me think of a comment I read over at the Housing Bubble blog...

Went something like this:

Housing was not, is not, and never will be an asset. It is a desirable liability.

The housing "industry", instead of selling shelter did nothing but cheerlead for a house as an asset. All the while conveniently ignoring the substantial cost (time and money) of owning a home.

The people now getting burnt never once thought of these places as anything but "assets". Now they're getting buried by their greed. I don't feel sorry for them at all.

With Agriculture

Hi jm,

Good point. Could you possibly elaborate sometime?
For one thing, amount of oil and NG required to keep up the current (expanding?) ag base. Amount of subsidy currently in place?

It seems this would be an important thing to look at in more detail.

Today's Round-Up focuses primarily on the on-going housing market meltdown in the US and associated issues of debt, credit and fraud.

This may have been posted before, but if so I missed it:

It discusses the possibility that Russia may voluntarily cap its oil production. The premise is that Putin thinks Russia doesn't need the money now, and the oil may be worth more later.

It's certainly logical to expect that those who control significant quantities of a given resource will want to meter it out so as to maximize their long-term gain. This thinking really flies in the face of the concept of "free markets," though, as the market, no doubt, would say "Oh, let's use what we have freely now, because this will maximize economic activity and help fuel the search for substitutes when supplies begin to dwindle."

While most of us here are admittedly duffers when it comes to economics, you don't have to be a Nobel Laureate to understand that without a stable and predictable energy supply, the industrial/consumer economy is likely to come crashing down. Thus, I suspect that the thought that the national interests that now control the bulk of the world's petroleum supplies might decide to sit on their resources and dribble them out slowly, must scare the bejeezus out of TPTB. This, I think, is what is behind a lot of Peak Oil denial: a fear that, once the concept of Peak Oil is generally accepted by all, that the self-serving behaviors of the various players will bring on political and economic instability that will ultimately wreck the world economy -- a valid concern, to be sure.

WHne faced with peaking production, it appears that it is ALWAYS best to claim "voluntary" cuts. Then people (EU for Russia, US for KSA) will come begging and give political concessions.

Best Hopes,


Hi AlanFromBigEasy.

It seems reasonable that producers, esp Russia, should voluntarily cut production. How much funny paper do they really need? Besides, wouldn't it be smart to undercut the economies of nations that are in fact quite hostile?

I thought the summary paragraph was good:

In summary, if and when Russia caps its oil production, it will send alarm signals worldwide for two reasons. As Russian oil consumption is currently growing, oil exports will correspondingly fall at a similar rate. Secondly, capping production may set an example that others will want to follow, especially if global oil production is seen to be peaking any time between now and 2015.

"Voluntary" production cutbacks seem to be spreading. I posted this story yesterday:


Monday, April 9, 2007. Issue 3632. Page 6.
(Russian) Oil and Gas Reserves Shrinking

The country's oil reserves shrank by 7.3 billion barrels from 1994 to 2005 as the country failed to replace dwindling West Siberian reserves with new discoveries in East Siberia and other regions, an official said Friday.

"At the current rate of growth in oil production, there won't be enough reserves to keep up," Fyodorov said.

Many fields that were harvested hastily now produce much more water than oil.

All the oil possessing nations are under enormous pressure from the oil-consuming nations, led by you-know-who, to ramp up production now. The stronger the bargaining position of these nations, the less they'll give in, except to supply the home market.

"...the oil may be worth more later." ? May? Right now it would be far smarter to burn dollar bills for heat, because they for sure are not going to be worth more tomorrow. Oil is the world's true currency, and will rapidly appreciate. Having said that, it occurs to me that rapid appreciation is not a desirable feature in a currency because everyone wants to hoard it, not spend it. So we have a situation in which the dollar, heretofore the world's currency, is something everyone wants to spend and unload -- one of things keeping the world economy going, such as it is. But the ascendant currency (oil) cannot in any way sustain the current global economy precisely because of its appreciation.

The clearest case of oil acting as a currency is Venezuela, which is bartering oil for doctors and other things in LA. I believe that there is a very deep threat to the existing order, not just in the fall of the dollar, but in return to barter. The power of international capital is radically undermined by such developments.

I believe that there is a very deep threat to the existing order, not just in the fall of the dollar, but in return to barter. The power of international capital is radically undermined by such developments.

I've begun to phrase it this way. If food and energy producers declined to accept dollars, what things of value--goods and/or services--could you trade the food and energy producers in exchange for food and energy?

I wonder if we could quantify a ratio (P/C), where P = Production of essential goods and services and C = Consumption.

You want to strive for a P/C ratio of more than one. You can do it two ways--by increasing your production of essential goods and services and/or by cutting your consumption, in other words, ELP.

One could argue that the food and energy producers will be buying luxury goods and services, but I think that conspicuous consumption will increasingly be frowned upon, especially as the overall economy contracts, and food and energy producers can't offset the overall contraction.

So, an example of where one would not want to be would be the owner of a large hotel in Las Vegas, driving an H2 Hummer to and from a multi-million dollar McMansion.

WT, you're a spoilsport. Surely sex, drugs and rock 'n roll will retain their value in the exportland model.

Some things have eternal value.

Well, I've got a nice little farm. Maybe I'll trade some Anasazi beans for a big, slightly used, thin-screen TV.

Will there continue to be TV?

Of course.The oil companies would continue to advertise that there is no peak oil. CNBC will keeping touting the new "million" barrel wells which will produce 300 barrels per day and save us from this crisis.

For the Oil Companies, Public Rhetoric = Big Profits

Saudi Arabia and Russia, with proper investment and management, can increase their current production by 50 percent, at least. Indeed, since the publication of a book claiming the country was in its oil twilight, Saudi Arabia has increased its production by 25 percent.

It would be nice if these journalists would back up their claims with some hard numbers or facts. Can anybody tell me how much investment would be required to increase Russian and Saudi production by 50 percent? Also, can anybody tell me how Saudi production has increased 25 percent since Simmons book was published (which I believe was last June, according to Gulf Publishing Company)?

Im gonna take a wild guess and say that he actually means production capacity...

Michael Economides is a purveyor of spin. “Man-made global warming is a sinister hoax,” he says. He doesn’t buy the CO2 connection. Okay. Should we assume from his article that there’s no climate change either? Seems he wants us to take that road. Don’t worry, be happy. You know the deal. His higher authority will protect us.

On peak oil, he spins the same worn out argument that “…, we will not run out of oil.” No shit. “We have centuries left of commercial production….,” he respins. Again, no kidding. But, at how many millions of barrels per day? He gives no data.

More spin: the peak oil/global warming crowd is responsible for today’s high fuel prices and the global warming hoax.

He suggests: If only scientists, peak oil geologists, physicists, elitists, and pseudo-scientists would keep their collective mouth’s shut, oil would be selling at $30 / barrel and the world would cool…we’d have chilly evenings.

So, please, everyone a moment of silence…

I dunno. It seems the content of that site reads like one of those industry-sponsored Stink Tanks. I clicked here and told them what I thought about their claim of Saudi production.

May I ask what your thoughts were?

I thought he was lying, and said so. I wrote:

He said, "Indeed, since the publication of a book claiming the country was in its oil twilight, Saudi Arabia has increased its production by 25 percent." The truth of the matter is, Saudi production has fallen by more than 9%

He wrote back and it turns out he was referencing a chart on this EIA page about Saudi Arabia, which shows a large jump in their production through 2006. Trouble is, the page was written in August, 2005!.

I wrote back showed him where the actual EIA production figures are located:

Your article cited the publication of the book Twilight in the Desert, which was published in June, 2005. Saudi Arabia's Crude+Condensate production for that month was 9.6mbpd. January, 2007's figures show a C+C production of 8.75 mbpd.

It's amazing that he was that disconnected from the actual numbers.

Hey, WT, he's an economist - IE. a scientist wannabe, a dreamer of endlessness, a belever that money really means something. What do you want from him? Reality?

James Gervais

Nothing gets past TOD!!! =D

Unreal. That guy is a career peak oil denier, though, so I guess I shouldn't be surprised.

Edit: Talking out my arse... =D

Serial car thief only after the fuel

A serial car thief in Myanmar who stole 11 vehicles in six months was only after the fuel, which is severely rationed in the military-run former Burma, a police source said on Tuesday.

Police caught Maung Myo Win red-handed last month as he was trying to climb into a minivan in downtown Yangon, the semi-official Myanmar-language Crime Journal reported.

Under questioning, it emerged he had been involved in at least 10 other vehicle thefts in which the cars were left in another part of the capital with empty fuel tanks.

Gas price hikes to ease, government says

WASHINGTON - Motorists can expect an easing of the recent gasoline price surge in coming weeks, with costs averaging about what they did last summer over the heavy vacation driving season, the government said Tuesday.

The Energy Department predicted that the average nationwide cost of regular-grade gasoline would likely peak at $2.87 a gallon in May, up only 7 cents over the average last week.



Light, sweet crude for May delivery rose 39 cents to $61.90 by midday in Europe in electronic trading on the New York Mercantile Exchange. May Brent on the ICE Futures exchange rose 16 cents to $66.75 a barrel.

Over $5 premium? I wish I could play this spread!!!!!

The contango in WTI is also remarkable...
As of 2:15 EST

May 07 62.06 +0.55
Jun 07 65.06 +0.75
Jul 07 66.80 +0.68

$3.00 now vs $2.80 this morning for May-Jun. This is why the USO ETF is a mug's game. The benchmark Dec 12 contract is up $1.03 (a huge move for this contract). My take is that WTI is slowly losing its usefulness as a meaningful benchmark for world oil markets.

This is why the USO ETF is a mug's game.

Could you spell this out a little?

My understanding is that this ETF invests in the front-month futures contract. Every month as the contract execution data approaches, it has to sell out it's position and buy the next month position. By selling in quantity and then buying in quantity, it is selling low and buying high.

Zackly....if the current contango remains in place you getting smoked 5% every month... USO makes sense if future oil is cheaper than spot, as it stands now, you can only make money if oil rises faster than the 1-3 month contango, i.e. ~5% per month

Anyone help me with this? I have been trying to access the DTI information from the UK relating to the latter's UK oil production. Previously on the DTIs website there was easily accessible up to date info on North Sea production. However they have just seemingly revamped their website and I am darned if I can find it? Is it me being dim or have they disappeared it because it makes such depressing reading? TIA

Ta FTX, however that is on a field by field basis - I seem to recall they used to publish total UK figures (and they were only a month or so behind), and they also published data in terms on the UK oil balance ie whether the UK was an importer/exporter in any given month/year - this seems to have disappeared??? It really was a most useful data set - someone else linked into the most recent set of data a month or so ago, then they revamped the site and it seems to have gone......

Try http://www.dti.gov.uk/energy/statistics/source/oil/page18470.html

The link for the monthly data is towards the bottom of the page.

thanks a lot Coilin, that was just what I was after!

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

Forgive me for the length of this but it simply can not be done in a short manner.
Sometimes it is helpful to go back and look at history to see where we are making mistakes or where we are hitting the nail on the head. Recently we have been treated to a number of detailed discussions on the current state of affairs in Saudi Arabia and other countries in order to extrapolate out the most likely future for our oil supply. It has been an extremely interesting discourse with numerous short term flare ups of nit picking on specifics. While primarily an academic exercise, to be sure, it was nonetheless helpful in developing better consensus among the many lurking TOD personnel, including myself. But is looking at detail the only way to go? We tend to rapidly forget the History.
It’s 1954- M. King Hubbert stuns the oil patch with his proclamations that the U.S. would likely reach peak production in or around 1970. This was over 50 years ago folks and general consensus at the time and well into the middle of the seventies was that he was nuts. For all intense and purposes, he was right on the money. His later predictions had world production peaking in or around 2000. He had no way of knowing the incredible advances in technology which would expand both the areas of oil we could tap and the amounts we could extract from each area, or the effect politics might have on production. He also had no way of knowing the vast number of ways we would expand our utilization of the black gold. One seems to have somewhat cancelled the others and he probably was not very far off.
Mid 1990-s A group of petroleum savvy individuals expand on Hubbert’s work and bring to some level of public discourse the term “peak oil” The early people include Colin Campbell, Buzz Iverson, Richard Duncan, Robert Youngquist, Jean Laherrere, Cutler Cleveland, Albert Bartlett, Richard Heinberg, and Kenneth Deffeyes. Campbell and Laherrere joined up in early 1990’s to form a company called Petroconsultants in Geneva. The company bought and otherwise obtained as much geological data as they could acquire and sold it to prospective oil explorers. It was while they reviewed all this data they became convinced 1. there was not as much oil yet to be found as was conventionally believed, and 2. Discovery had peaked in the 1960’s. They started digging further while founding ASPO. This effort attracted other individuals including Kjell Aleklett and Samsam Bakhtiari who expanded their own writings on Peak Oil. The most notable prognostication of this group was that the North Sea would peak around 2000. The EIA, IEA and all of the companies working the North Sea disagreed vehemently. The North Sea peaked in 2000, and has been in a steep decline since then.
In the meantime, Matt Simmons, who owned and ran the largest oil and gas investment banking firm in the world, was writing and speaking about the apparent conundrum that while we needed to increase our oil infrastructure dramatically in order to continue to grow our economy, we were just not doing that. We were not building enough refineries, pipelines, tankers, and drilling rigs. We were also not training enough people. In 1997 or 98 he had a meeting with Campbell and, seemingly, at least partly as a result of that meeting, became a Peak Oil spokesman.
1999 T. Boone Pickens announces that peak oil is coming and starts an investment group based on that premise. He makes a ton of money in the next 7 years.
1999 - 2000- The EIA holds a meeting to discuss the future of natural gas in North America. 250 of the best and brightest minds associated with the gas industry. They issued a report in Jan of 2000 stating that the present production of 15 trillion cubic feet per year would grow to 30 trillion by 2015 and that the price would remain below $3.00 a therm. Only Matt Simmons and Joseph Riva would not sign this document. Riva had been the principal non partisan advisor to both houses of congress for 15 years. He had written 3 books and numerous articles on the state of our gas supplies. Simmons’ company had just completed a comprehensive review of gas production and rates of depletion in Texas. Both felt there was no way we would increase our supplies. One month after this report was released the price hit $10.00 a therm and $40. on the spot market. There has been no supply increase and the number of well completions required to maintain level production has tripled. Much of the fertilizer production in the U.S. has shut down. The treadmill seems to be reaching it’s limit this summer. All of the E&P people and large producers were certain those increases would happen, as was the EIA. Conventional wisdom fails again for the third major time.
Early 2000’s- Numerous people become aware of peak oil and begin to discuss it’s ramifications. Sites like TOD, the Energy Bulletin, Peak Oil .com etc. spring up and more and better analysis comes forward.
2001 spring- Simmons has a 1 hour meeting with Bush and a subsequent presentation to both houses of congress on peak oil. Kennedy announces about 5 minutes into the presentation that this was an issue of national security and it should be a closed session. The reporters are thrown out and Simmons finishes his presentation. Roscoe Bartlett appears to be the only one to listen.
The great Yibal field goes into precipitous decline. A shock to the owners and the company providing production expertise. It is the first obvious view of the decline rates of fields aggressively developed. It is predicted on numerous sites that Cantarell is about to peak. Kuwait announces that Burgan has peaked and is in decline. Richard Rainwater jumps on the bandwagon. Numerous books are written. Simmons breaks new ground by claiming the Saudis may not have as much as previously assumed and publishes a well researched book to support the claim.
2005- Cantarell peaks as seemingly does the world. At least there is no significant increase for the last two years. Deffeyes, Simmons, and Pickens all announce Peak oil is here. Kuwait cuts their reserve numbers in half.
2006 - Oil hits $78 a barrel and demand destruction begins to crush the third world. West Texas export land model theory comes true as Russia exports drop while supplies increase. Saudi production drops. Even at the present price of $60+ oil has risen an average of 22% per year since 1999. Try plugging that in for 5 more years!
2007- Looking back on all that, do we really want to listen to people like CERA, or the EIA or the IEA?

treeman...excellent historical wrap up and revisitation. This PO debate has really been a slow ball rolling over many years and it does appear to be picking up steam.

I've always liked looking at history to understand where things have evolved to where they are today...the generations of thinkers and cohorts...TOD is really a fairly recent phenomena in the PO debate and is built off the shoulders of other giants.

Thanks for giving us all perspective...we've been looking at the trees for the last few weeks...good to see the forest every once in awhile.

Nice review! It would be great to have this history written with all the references. That would be really pursuasive for non belivers!

I really enjoyed this summary. Indeed, it would be great to see this with the references.

I just plugged and chugged the numbers based on a 22% YOY increase in oil price, as seen from 1999-present:

2007: $60/bl
2008: $73/bl
2009: $89/bl
2010: $109/bl
2011: $133/bl
2012: $162/bl
2013: up, up and away!

I wonder though, what things might look like when most nations are drowning in the rising economic tide and suffering from extreme oil scarcity (due to being outbid), and the bidding war is simply between the most wealthy nations, say the top five to ten? How close are we to this situation?



Nice example...prices are hard to predict.

But even at $162/bbl in 2012 (not adjusting for inflation I suspect), oil will be ONLY...

24 cents a cup.

Still sounds too cheap given that you will be 3 years past PEAK ALL LIQUIDS.

Great point.

Seems like there's room for one hell of a price shock in the next few years. :o(



Very good review!

The forecasts of CERA, EIA, IEA and ExxonMobil are always optimistic.

Saudi production of crude & condensate(C&C) is in decline.

It looks like Russia's C&C production will decline next, either voluntarily or not.

An oil pipeline is being delayed by three to four years because reserves not increasing fast enough.


Russia is also re-checking Siberian oil licences just in case they can find more assets to nationalise.

If Putin can engineer a small reduction in supply, this could increase oil prices significantly and transfer more wealth to oil producers such as Russia.

Maybe the red zone in my chart below should start earlier - what about this summer?

(click to enlarge)

Actually I think this summer is the first taste of TSHTF. We will go through a couple more iterations of demand destruction because we can. There is an enormous capacity for conservation yet available in the old US of A. But 5 years from now the pain will be severe. Prepare as best you can.

Hi Treeman,

Thanks and just a "second" to the suggestion to add references and links. It's good to have the recent history perspective.

(And perhaps post as a guest article?)

I just read the Matt Simmons interview on FSNO. Although he agrees with most TOD posters that the peak is now, he is not nearly as pessimistic about the future of the US economy. He feels that potentially the economy can be re-engineered into a more compact model,less based on transport and suburbia. Personally, I think he's right- we are post peak but the global economic system will survive intact.

The global economic system was already in its final stages. No room to expand anymore. Not enough people anymore who want to work for a pittance. Consequently, the promises of future prosperity for everyone will be recognized as empty.

More Russian Oil News

Russia warns of delay of oil pipeline to Asian-Pacific region

"Due to a delay in reserves growth, the building of the second phase of the pipeline, which means, an expansion to 80 million tons of oil per year, may be postponed by three to four years,"

Russia to Delay Construction of Pacific Pipeline Due to Oil Shortages
This article says that the first leg of the pipeline has capacity of 220 mb/yr and that the second leg(or phase) has capacity of 366.5 mb/yr.

This means that due to Russia's difficulty (or maybe a deliberate tactic?) of converting resources into oil production, 366.5 mb/yr or about 1 million barrels/day of extra oil production capacity could be delayed by three to four years!

This is more evidence that the world's oil(C&C) supply has passed peak.