DrumBeat: April 11, 2007

Businesses must look beyond oil, analyst warns
With the era of cheap oil ending, Chuck Taylor believes businesses that rely on the movement of freight must begin thinking in terms of alternatives to the current system.

The logistics expert said the country can start by lowering speed limits and rebuilding railroads to move more freight and people. But the long-term solutions are going to require a different mindset than the way companies currently think about the supply chain.

Chevron reports decline in oil, natural gas production

Chevron Corp. said Tuesday that first-quarter oil and natural gas production fell 1.2% after the Venezuelan government seized bigger stakes in two oil fields.

ConocoPhillips: The anti-Exxon

The Texas-based oil company breaks with the other U.S. majors to support mandatory national regulation of greenhouse gas emissions

Venezuela’s nationalization trend will not sweep Latin America

As Venezuela’s May 1 deadline for nationalization of several major oil operations nears, studies by Standard & Poor’s and Rice University suggest nationalization may not always have dire consequences.

Growing energy nexus: Energy-hungry China looks to Latin America

China's fast-paced economic growth—averaging 9.1% per year in the last decade—can only be sustained by high energy consumption, an increasing amount of which will need to be imported. Given global competition for energy resources, China's energy policy is now focused on securing a steady supply in the medium to long term. This means looking beyond traditional suppliers in Asia and the Middle East and seeking new alliances with potential suppliers in Africa and Latin America. However, while Latin America's importance to China is growing, it will never become a core energy supplier. Further, relations are likely to remain of a commercial nature, and China is not apt to become a committed political ally for Latin America.

Will there be a gas OPEC?

Indicatively, the louder the appeals for a gas OPEC, the fewer demands that Russia should ratify the Energy Charter. The tactic of sidetracking attention works. For Moscow, entry into a coordination cartel is a much less binding step than ratification of the Charter with all of its indigestible protocols. If the leading gas exporters reach some agreements of principle, the rules of the game will undergo a dramatic change.

Who profits from a gas OPEC?

Four years after the fall of Baghdad - which for the neo-cons would signal the advent of the US as "the new OPEC" - a meeting in the tiny Gulf emirate of Qatar may be signaling the birth of a new cartel: a "gas OPEC", grouping countries controlling 73% of the world's gas reserves and 42% of production.

Appetite for ethanol spurs food price inflation

It began with the Mexican tortilla crisis, and is now spreading to the price of everything from meat and milk to Coke.

North America's love affair with ethanol — produced mainly from corn — is unleashing a surprising surge of inflation through the global food supply chain.

No US Corn Shortage Seen Yet Despite Ethanol Demand

The amount of corn used for ethanol continues to climb but the supply of corn is beginning to rebound a bit as livestock feeders seek cheaper sources of animal feed, such as feed wheat, analysts said on Tuesday.

No one is saying the food-versus-fuel debate will go away, but for now it appears the intensity is easing a little, they said.

World Bank Warns of Environment Cost of India Growth

India's robust economic growth will put unprecedented pressures on its land, water, air, soil and forestry resources, a World Bank report said on Tuesday.

Bush Administration Appeals Ruling on Drilling

The Bush administration and the timber industry are appealing a federal court ruling that struck down a policy to allow logging and oil and gas drilling in large undeveloped sections of national forests.

Concentrating solar power better option than nuclear

I refer to 'concentrating solar power' (CSP), the simple but effective technique of concentrating sunlight using mirrors to create heat, and then using the heat to raise steam and drive turbines and generators, just like a conventional power station. It is possible to store solar heat in melted salts so that electricity generation may continue at night or on cloudy days. This technology has been generating electricity successfully in California since 1985 and half a million Californians currently get their electricity from this source. CSP plants are now being planned or built in many parts of the world.

Purdue Energy Center Symposium to Pave the Road to a Hydrogen Economy

With the continued rising cost and demand for oil and gasoline, international leaders will come to Purdue University to share ideas and information on how to end global dependence on fossil fuels and move to a hydrogen economy.

As climate worries grow, cities turn green

Green roofs aren't the future: They're already here. In Chicago, 2.5 million square feet of downtown roof space is now covered with hardy plants such as sedum and prairie grass--the better to lower heating and air-conditioning costs (by 10 percent or more) and dramatically reduce rainwater runoff.

OPEC-10 March Oil Output 26.575M B/D, Up 90,000 B/D Vs Feb

The Organization of Petroleum Exporting Countries raised its crude-oil output in March following two months of cuts, the U.S. Department of Energy said.

The 10 OPEC members subject to production quotas, not including Iraq and recent member Angola, produced 26.575 million barrels a day, up 90,000 barrels a day from February levels, according to a report by the Energy Information Administration. The EIA is the statistics arm of the Energy Department.

China Plans to Boost Oil and Gas Output to Meet Booming Demand

China plans to produce 193 million tons of crude oil and 92 billion cubic meters of natural gas in 2010, said the nation's top planning agency.

Mexican, Colombian, C. American leaders promise to revitalize regional development

Mexican President Felipe Calderon said his country's reduced commitment to the refinery was due to the declining production at its largest oil field Cantarell.

"We want to give the refinery project viability with realistic alternatives while taking care of Mexico's own production and consumption," Calderon said...

Russia to Delay Construction of Pacific Pipeline Due to Oil Shortages

Russian government official said on Tuesday, April 10, that construction of the second leg of Asia-bound Pacific oil pipeline could be delayed by three-four years from its original March 2008 deadline due shortages in oil supply from underdeveloped East Siberian fields.

Siberian Gas Pipeline Bursts for a Second Time in 10 Days

The number of accidents at oil production centres of the Khanty- Mansi Autonomous Area rose by 17.4 per cent in 2005 against the previous year, with 4,200 accidents registered in 2005. Metal corrosion accounts for almost 90 per cent of the accidents.

Look Out: $500 Uranium Is On the Way

And here's the dirty little secret why uranium prices could be stable at $2,000 per pound...

The cost of uranium is only a minuscule part of a power plant's spending. Analysts have reported that nuclear power plants can cost more than $2 billion! That's just the cost of construction, which doesn't include the billions spent on maintenance throughout the plant's lifetime. Spending $2,000 per pound of uranium to keep your plant running is minimal to investors.

Asian Refining Facing Hard Times

Between now and 2011, a spate of new refineries with a total capacity of 7 million barrels per day will be built. Half of that new capacity will be in Asia. The refineries aim to profit from the ongoing global shortage in refining capacity, which has sent crack spreads soaring. However, the threat of overcapacity now looms large.

Chavez Guarantees Latin American Energy Supply for 100 Years - Calls Bush ethanol plan "craziness"

Venezuelan President Hugo Chavez called for the creation of a Latin American energy system to prioritize local markets in a "true energy revolution," guaranteeing oil and gas supply to the region for 100 years.

"All the oil and energy that Latin America needs is here in Venezuela," Chavez said tonight at a graduation ceremony in Caracas. "That resource, once in the hands of the empire, is now in Venezuelan hands, and we have it to share with the people of Cuba and the Caribbean, Nicaragua and Central America, Brazil and South America, at least for 100 years."

Urban farming thrives in Cuba

For the Cubans' recent history proves that, if driven by necessity, people can and will organize grassroots, community-based ways to feed themselves. At the same time, the Cuban experience shows that even a modest amount of government support and investment can greatly amplify community efforts. If - as a growing number of academics warn - industrial nations ever face food supply disruptions due to climate change or peak oil, such lessons will be vital.

Uranium prices rise 19% in one week!

By electrifying railroads and building electric cars (with tax breaks to make them affordable), along with conservation and pursuing alternative fuels, we could rev up our economy and eventually tell OPEC to go stick its oil where the sun don't shine.

Kerry, Gingrich debate global warming

Climate change is heating the earth and also warming relations between Democrat John Kerry and Republican Newt Gingrich.

Building boom fuels climate risk at Spain's beaches

Rapid construction of homes and hotels along Spain's shoreline means its beaches stand a greater risk of disappearing as climate change brings higher sea levels and more coastal erosion, officials said on Tuesday.

UN raises alarm on Africa's delay in addressing climate change

Africa, the continent most vulnerable to the effects of climate change, is not acting urgently enough to stem the dire economic and environmental damage of greenhouse gas emissions, the UN cautioned Tuesday.

Ghana: Government Opts For Nuclear Energy

The government has resolved to opt for nuclear energy as an alternative source of power in a move to avert any future energy crisis in the country.

U.K.: Will your home fail the new energy test?

Hundreds of thousands homes are likely to be given a poor 'green' rating under the Government's new energy efficiency tests.

From 1 June, all houses put up for sale will have to undergo a 'green' audit costing up to £200 and will be given a grade from A to G.

U.S. offers renewable fuel standards for vehicles

The United States announced new standards for renewable fuels for cars and trucks on Tuesday, but stopped short of committing to regulate greenhouse gases that spur global warming.

The renewable fuel standards program aims to cut dependence on foreign oil and curb global warming pollution by expanding the use of ethanol and other alternative fuels, said Stephen Johnson, head of the Environmental Protection Agency.

Uranium price jumps to record 40-year high

The price of uranium has recorded its biggest percentage increase since dealings were first reported almost 40 years ago. The cost of the fuel used in nuclear power plants jumped 19pc to $113 a pound at a US auction last week.

Wildcat growth in oil patch begins to trouble Albertans

The oil sands boom that's brought billions of dollars to Alberta has also brought anxiety to a significant number of citizens, some of whom are questioning the rapid pace of development as the provincial government nears the end of a long oil sands review.

Bodman: Summer gasoline supplies seen adequate - the U.S. Energy Secretary discusses gasoline supplies, the rumored natural gas OPEC, and filling the SPR.

African American Exodus from San Francisco

And, this problem is not unique to San Francisco – it is happening in cities all over the country. As the end of the automobile culture of suburbia draws near due to peak oil, the ones who really are in that higher income bracket are starting to come back to the cities, where everything is close by, often within walking distance. Hence the demand for the gentrification of San Franhatten, and African Americans won’t be the only population we will lose due to being priced out of the housing market.

West Coast to Feel the Pain of High Gas Prices

An oil industry analyst predicts that even if gasoline supplies and prices ease off in the rest of the nation this summer, the West won't be so lucky.

US faces change as climate warms

Chicago and Los Angeles will likely face increasing heat waves. Severe storm surges could hit New York and Boston. And cities that rely on melting snow for water may run into serious shortages.

Snowy forests 'increase warming'

Planting trees in snowy areas may worsen global warming as their canopies absorb sunlight which would otherwise be reflected by the snow, a study says.

New York pledges to reduce greenhouse gas emissions

New York City produced 58 million metric tons of greenhouse gas emissions in 2005, according to officials who promised on Tuesday to cut that by 30 percent by 2030 as the city tries to become a leader in the fight against global warming.

Millions face hunger from climate change

Rising global temperatures could melt Latin America's glaciers within 15 years, cause food shortages affecting 130 million people across Asia by 2050 and wipe out Africa's wheat crop, according to a U.N. report released Tuesday.

Most Americans See Recession in the Next 12 Months (Update1)

By Matthew Benjamin

April 11 (Bloomberg) -- Most Americans expect a recession within a year and disapprove of President George W. Bush's handling of the economy even though the unemployment rate is at a five-year low, a new Bloomberg/Los Angeles Times poll found.

Six in 10 who were surveyed predicted a recession, similar to the 64 percent who anticipated the economy would contract in a December 2000 poll by the Los Angeles Times three months before the last decline. In the current survey, 71 percent of those earning less than $40,000 said they expect a recession compared with about half for those making more than $100,000.


The Great Go-Goop War

By Tom Chalkley (In homage, and with apology, to the late Theodore Geisel)

The Tower was covered with Plumbing and Wheels
(More like those on bikes than on automobiles)
And up near the stoop of its uppermost coop
Spun the biggest of all Wheels--the so-called Great Hoop
The Hoop spun the Wheels and the Wheels turned the Hoop
And the whole shebang ran in a grand loop-de-loop. . . .

As long as it didn't run out of Go-Goop

Go-Goop! The thick, sticky underground soup
That pulsed in the plumbing and turned the Great Hoop!
'Twas Go-Goop that kept the big rollers from rusting!
Go-Goop that kept all the up-thrusters thrusting!
Go-Goop! Fulfilling the Us-ers' desire
To always go higher and higher and HIGHER. . . .

. . . As long as there was enough Goop to be found
In the great Go-Goop bubbles that grew underground

Part I is poorly formatted. Part II is also poorly formatted but includes links to page one, page two etc., which recreates the paper page layout. Part III bites the bullet and limits the artwork to the paper page links.




Also, there seems to be a climate change event this weekend:


The poll shows expectations for a recession, but the betters at Intrade.com don't see it:


Odds are only 17% for a recession before the end of 2007. People who care enough about the issue to put money down are apparently more optimistic than random phone-answerers.

Have these traders ever correctly anticipated a recession?

Prediction markets are fairly new and weren't in use before the last US recession. They do seem to have had a good record in predicting other things.

On the other hand, the "majority of US population" had never been shown statistically to be better than flipping a coin. The consensus at TOD has been imminent recession ever since I started following the discussion two years ago.

Been away for a few days and have been catching up on the Saudi threads (a small book). Unbelievable work, many thanks to all involved.

I noticed someone mentioned that AFK will be delayed until end 2007 - any link to that news?

That might have been me, with more details in this post:

SaudiAramco (Jan 10, 2007):

KPF and KGP are the heart of the Khursaniyah Program and are scheduled to produce oil and process gas in 2007's fourth quarter.

"We know we have a big challenge ahead of us, and it's going to be a tough team effort," said Bill Dudley, president of Oil, Gas and Chemicals for Bechtel, "but we are very confident that we can make this a successful project".


Direct links don't work because the Saudi Aramco website uses Session IDs. For details on Khursaniyah and other projects, choose 'Media Center' then 'News' and then 'Megaprojects'.


Chris Sanders has written an interesting article on how responses to GW may actually be responses to PO. I haven't quite made up my mind about his thesis, but it seems like a fresh point of view.

As it happens, the sorts of policy choices that might be made to conserve energy in a world experiencing increasing scarcity of useable energy reserves are similar to those one might make to reduce greenhouse gas emissions. There is thus a social and political utility to the warming craze beyond mere profit, allowing people to acclimatise to the need to conserve fuel without really understanding why they are doing it. This creates, in the process, a sort of public psychosis; disconnecting, for instance, the rationale for the occupations of Iraq and Afghanistan from the public debate about the war. And economists, who are trained to believe that resource depletion is simply evidence of insufficient investment as opposed to what it really is, evidence of the consumption of finite resources, can construct market “solutions” for what is really at bottom a physical and political problem.


The American government’s position on how to allocate the cost of energy rationing internationally is based on the premise that the biggest users get the biggest share, as opposed to the biggest polluters paying the most.

In this effort it appears to share vital interests with like-minded people in Europe, Japan, China and elsewhere, whose primary concern in a world that is rediscovering scarcity is how to keep most for themselves. This puts them at odds with the bulk of their fellow citizens, be they Americans, British, German, Chinese or Japanese, and since their economies are net buyers of energy they find themselves in opposition to elites in those economies that are net energy producers.

This admittedly oversimplified model explains why, however, it is unlikely that the United States will have to deal with an interruption of capital imports in the immediate future. The people running Japan and China need oil too. This is the basis for the “consensus” touting climate security.

Who said they don’t have a plan? It isn’t fair, it isn’t stable, and it certainly isn’t nice. But it has worked before. Why shouldn’t it work again?


It requires registration but I think it's worth it.

I've always thought we are being prepped for peak oil without knowing it. I cannot believe that the worlds best think tanks do not know about the problem of peak oil, but at the same time they cannot just come out and announce it for fear of causing mass panic. The stock market would tank overnight and most economies would plunge into recession if it were to be offically accepted. So by touting 'we must do something to achive a low carbon world' by using global warming as a smokescreen (albeit a real one!) TPTB have avoided mass panic.


Marco, the problem with your logic is that there are a lot of folks who just don't buy the whole GW thing. A lot of them. So trying to motivate them to conserve fossil fuels from a "it's good for the planet" angle, just isn't going to cut it.

Any top-down effort to reduce fossil fuel consumption will be met -- in the US of A, anyway -- with stiff resistance.

Yeah, GW has been on the agenda since the early 80's at least, and the first time PO was mentioned in the mainstream was Campbell and Laherrere's 1997 article in the Scientific American (if memory serves). OTOH, GW has only come to be more generally accepted after it must have been clear to some people that resource depletion would soon become a serious problem.

My problem is that it is just terribly conspiratorial to think that all those scientists who have come to the conclusion that climate change is a real and rather imminent threat could just be useful idiots serving the agenda of those who have, for most of the past thirty years, attempted to deny there ever was a problem. Then again, from a certain angle Sanders' thesis doesn't sound totally fantastic. If he could explain how it could work without some sort of conspiracy I might think of it as at least possible.

some don't buy the whole GW thing.

some don't buy it's a CO2 thing..

I see climate change, I also differ on what the outcome may be.

How cold does it need to get for the next ice age.

the answer is, it doesn't need to get colder. All thats missing mainly is MOISTURE in the winter. Recall any huge snowfalls and snow storms this year. How man flash floods in the US and across the world. Our Hurricane season last year was not up to predictions, though the Pacific got POUNDED by huge and numerous Typoons. The formation of hurricanes and how they get their energy is a "theory" about warm water etc. This theory may not be correct. Observations show increase in strength when moving into cold waters, which flies in the face of the warmer waters provide the energy. Hurricanes and tornado's, we have much to be learn about them. And that danged pesky formation in the eye's of class 5 that looks all the world like a geomectric pattern.

Have some time visit http://www.meru.org/ there is a thirty minute video on googlevideo. Up until recently the series was up, but they must have objected and put up the "teaser". Its not 'religious" per se, its about how the original hebrew text of Genisis is much more than words, much much more.

The math guys here should get a real kick out of this. Everyone will, its pretty remarkable what this man has discovered.

Quid Clarius Astris
Ubi Bene ibi patria

PrisonerX : I cannot believe that you know so little that you can innocently make so many false statements. You must be a troll. Goodbye.

James Gervais

Sorry Marco, you give governmental think tanks too much credit for really looking ahead and getting action happening. Think tanks tend to 'fight the last war' - deal with what is uppermost in politicians minds. Politicians deal with what might win them the next election. They got caught out by the threat of a flu pandemic, and they haven't really begun to take onboard permanently reducing oil supplies.


Allright it was a dumb idea. I donned my tinfoil hand and threw logic to the wind.

Marco, not so dumb as all that. Without the tinfoil (and me, I love the stuff), it is nevertheless so that GW is scientifically complex, can legitimately, within a certain window, be argued about, etc. etc. It is also clearly an issue of the Commons, which most ordinary people like (even if for. ex. Siberians might prefer to sunbathe more..); it is, for many, experienced (or felt to be experienced) in a proximal way; it induces a kind of shared or blanket guilt; etc. It has a lot going for it as an important issue. So even without deliberate manipulation or ‘conspiracy’ GW distracts from PO, or camouflages it, PO being tied up to big biz interests, international politics, war, etc. in a pointed way that many would prefer not to look at. PO may have short term devastating effects; GW are the natural conditions around us, it is a backdrop, a general ‘force’ as I heard someone say the other day, and is not related to precise evil doing, even if it is generally seen as the outcome of human action - human collective action, that is. So far, GW has not killed any Iraqis.

Would Al Gore have made a movie about energy use, production, and distribution? (I mean specifically not a scary movie about PO.) I think not.

Noisette (same person as Noizette.)

Hi Marco,

Thanks for your comment.

re: "...So by touting 'we must do something to achive a low carbon world' "

One assumption in your sentence here, it seems to me, is the idea that TPTB think in terms of "we". I question this.

To really understand that "we" involves other human beings...with feelings, needs and so much else like oneself...it seems the first requirement would be to open the dialog to "the others" who make up our (mutual) "we".

They (TPTB, assuming they even exist as a group) also experience a great loss, greater for not having known any different.


No Biggie really, but I thought it was worth the post...

Marathon Oil Corp.[NYSE: MRO] announced a new deepwater discovery well in the Green Canyon region of the Gulf of Mexico.

The Droshky No.1 well, previously called Troika Deep, lies about 137 miles south-southwest of Venice, Louisiana, in about 2,900 feet of water. The well was drilled to 21,190 feet, and encountered a reservoir with about 250 of net oil pay, the Houston-based company said.

What does 250 net oil pay mean???

I'm no expert, but since no one else answered I think it means there were 250 vertical feet of oil encountered.

thomas deplume, greetings!
I'm guessing that this is an Eocene discovery in the Green Canyon. Many times in oil discoveries there will be multiple sands or limestones which can be commercially produced. The net oil thickness is calculated by taking the thickness of the sand and subtracting the area occupied by the gas cap and the water in the bottom of the sand. They may be talking about 10 or 20 different sands, which added together equals 250 net feet of oil sand.
At any rate reservoir engineers can take the net oil sands and the bottom hole pressure together with the porosity and the connate water and estimate how much producable oil is in the reservoir. And the reason that's important is this deep water, deep well will be immensely expensive to drill and produce, although a lot less expensive than the Jack 2 well last year.

Hello TODers,

This is an absolutely terrific video commercial for Honda Corp.--perfectly displays the impossible dreams of Fossil Fuel Cornucopians-- we need something equally inspirational like this to make people want to Paradigm Shift:


Does anyone have a wild & crazy idea to help shift peoples' mindset to willingly want Detritus Powerdown and Biosolar Powerup?

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

The Sunseeker solar powered sailplane. Takes off under its own power; longest solar powered cruise to date is 158 miles. Is aiming to break the 1,000-mile distance record. Here are photos from a recent flight over Torrey Pines, CA. Here's a video interview with the inventor.

Brings a new perspective to VFR.

The problem will solve itself.
But not in a nice way.

Sorry Bob, but changing the paradigm isn't going to happen by sending emails to people, handing out flyers and hitting 'diggs'. People are saturated with the kind of messaging in the link your provided.

If you want a paradigm shift, short of TSHTF scenarios that force people to shift, then equally effective mass marketing is needed. We need to "put down the chalk and step away from the blackboard". As much as I like data and charts that won't change things. Emotion, not logic will change peoples minds. We need to raise a bunch of money, hire an ad agency, create a couple of video ads that scare the crap out of people, take some print outs out in magazines and newpapers, etc .... rinse and repeat....

just my thoughts for the morning....

Hello Shawnott,

Thxs for responding. I thought the Honda video would have been more accurate if when the boat was plummeting downward--that was when the commercial needed to end.

I agree with you that more PO people are needed who aren't chalkboard fixated, but who could make video messages or movies that would emotionally appeal in a positive manner to the unwashed masses.

Hey if the infinite growth contingent can always bring out Jimminy Cricket thinking in their propaganda, can't we do the same with our emotional appeal?

Maybe a video showing a tranquil Shire and everyone happily pedaling their bicycles with windturbines and solar panels in abundance. Everyone happily conversing with each other as the lush gardens are nearby with new RRs moving goods in the background as the deer and antelope play nearby. Tiger Woods is now an expert permaculturist, and earns extra money by doing promotion of Schwinn bicycles instead of Buicks. Of course, the video won't mention Overshoot.

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


That is what I do (did) for a living. I choose my jobs now, depending on the client and what the message is. I don't take much work shooting/producing news stories much anymore. I think when they told me to leave the destroyed city from a Tornado and drive 50 miles to do a story because a "baby" had died, leaving the story of total destruction, to go to a subdivision with three homes,.. was the last straw....and its hurting my income. But you have to start drawing lines somewhere.

I have been tossing around how to make a Peak Oil video, commercial. Especially taking Stuarts and the others work from the last few weeks and trying to make it "videoable" for the masses. Even thinking about a "show" that goes up on googlevideo. Solves the bandwidth problem too. There is enough material to do it. Someone to do 3D graphs of the fields from the 2d is something I don't do. Graphics is a major part of this story.

Quid Clarius Astris
Ubi Bene ibi patria

I've come up with an idea for a video commercial that I plan on doing, tapping into the usual method of comedy in commercials. I have yet to write the script, but when I'm ready, I can make the video. (Production & post-production equipment at my disposal compliments of an uncle who is a director.) The basic premise is to present something that is completely absurd as a serious topic.. Such as:

"Peak Solar"
A guy telling us the horrors that will befall us due to Peak Solar, which is coming about of us using TOO MANY solar PV panels, which is draining the sun of it's limited supply of energy. If aren't prepared for this, the sun will go out and we'll all freeze to death. Complete with a few mock graphs, etc... The end would be something along the lines of "Peak Solar isn't real..... Peak Oil is. Find out at:www.theoildrum.com" etc etc.

Put it out on Google Video as a viral marketing method. :) Have a whole series of just asanine "warnings" similar to the Peak Solar, such as alien invasions, the earth suddenly becoming flat, the second coming of the Flying Spaghetti Monster, the moon colliding into the Earth, Potatoes being used as sterlization devices by the Elite, etc, etc. The more absurd, the better. Each time pointing out that the XYZ scenario isn't real, but Peak Oil is..

Interesting Twist Durandal. Good luck

Graywulffe, ok. I have to check into copyright stuff. Those images may not be usable, but I'm thinking of a way to use Fair use as news story/documentary not for profit. Other things too. There is a lot here that could be put into video that can carry a message, especially to the young, like, don't shoot the old guys and girls when the SHTF.

Are you native american, curious from the name, but the spelling tells me no.

Quid Clarius Astris
Ubi Bene ibi patria

Sounds cool. Keep me posted. Note that I would need some decent lead time to fit things into my schedule.

The name: I'm native American in the sense of being born here, but only have a distant genetic heritage (say 4 to 5 generations back) to certain pre-Western-contact tribes.

My name... Well, it's kind of a long story...



"Someone to do 3D graphs of the fields from the 2d is something I don't do. Graphics is a major part of this story."

In the past, I've done 3D and 2D graphics extensively in the name of science education for K-12, and still keep up on much of my skills with freelance work. Don't know if I'd have the time to help out--it would certainly cut down on my TOD reading, for sure!--but it's something I might be able to help out with.



Peter Jackson already made that video as part of The Fellowship of the Ring. Watch scene 2 of the extended edition of the movie and you will see the life that all good doomers secretly hope for after the collapse of civilization.

Watch Mad Max if you want to see what all bad doomers secretly hope for.

The Fellowship of the Ring ? scene two.

Perhaps you mean The Two Towers and the retreat to Helmes Deep, or are you referring to Jacksons "homage" to the true ending where Frodo see's The Shire in flame and ruin in his vision from looking in the water.

IN the book the Shire was taken over by "Sharkey" " (Sauroman's alias after leaving his Tower) the movie killed him there, but thats not the real ending.

You seem very quick to apply labels. Is that something they teach in law school to try cases with.

I'm very familiar with the "making" of movies. Worked on several, and commercials, oh yes I have helped manipulate your thinking their also.

Mad Max, well with that turbo charger and ram air feed, he sure got real good gas mileage didn't he. Drove and speed for miles without a fuel up, out in the outback.

Peter did a MASTERFULL job of brining all three books to the big screen. An accomplishment with lots of "tricks" that made Middle Earth come to life.

You should study the books history and its writer. That book is just more than a "tale". Its much more.

Quid Clarius Astris
Ubi Bene ibi patria

Overreact much?

I was talking about the scene "concerning hobbits", where jackson shows the happy pastoral life that the hobbits lead.

Hi Bob

Actually I was thinking something along the lines of an ad towards soccer moms driving their minivans to the field and then back to thier McMansion. Then show the result of that continued lifestyle for their kids.... "hey soccer mom.... keep doing what you are doing.. and this is how your kids will end up living...." Not quite the tranquil shire.

Anybody know of a cheap or free utility to convert the Honda .flv file to any common video file like .mpg or .wmv?

SUPER works well... flv to avi/mpg... (or v/v) & it's free...


This is precisely what you're looking for:


Do we even know what will happen when the paradigm is changed? Does it just precipitate a market crash sooner? I see no reason that once people have the crap scared out of them that this will necessarily motivate them to think logically and become upbeat about sustainability.

I note this since in the past I have been quite successful at doing international PR to change several paradigms on a large scale. But this one is daunting. In general, once you scare the crap out of people, you need to provide an immediate fix for them to latch onto, something they can do immediately to deal with the cognitive dissonance. The scope of this situation is such that there's no easy fix.

Scaring the crap out of people would be the easy part... what then?


Human nature is that the change won't happen overnight though. Doesn't matter what anyone says or does - some people will refuse to admit that the paradigm is changing for a long time.

The y2k experience can be a guide to how most of society will react to a percived threat.But way too many people went overboard,and ended up w/egg on their faces....which is exactly 180% of what would have been the case in the event that it had turned into a major hit to our society

All the hype that occured with that non-occurance,will also show up when Peak goes mainstream.I'm saveing time and panicing early,planting fruit trees,vines,trying to figure out a low energy,comfortable,secure life style whilst the rest of the world goes mad max.

Its obvious TPTB have decided to play it low key,make no changes to the power structure,and go into peak fullspeed,in high gear,they get a population reduction,the existing social contract smashed{social security,ect gone}and a return to a freemarket, libertarian heaven.Just like Iraq.

Y2k were a real problem, billions were spent solving it and most of the solutions worked. That some people thought the sky would fall down and it costed billions do not mean it was meaningless.

The difference between y2k and peak oil might be that individual companies and institutions could set their computer clock to new years eve 1999 and se what would happen, go uh-uh and fix it.

Peak oil would be alot easier to solve if you could set your companies "clock" to a few years into the decline with different decline rates and see what that do to your customers and suppliers.

The main lesson to be learned from the Y2K experience is that people and institutions with a lot to lose can be expected to do what they can (or make that "do whatever it takes") to prevent or minimize that loss. A lot of Y2K doomers forgot that, which is why their TEOTWAWKI scenarios look so silly in retrospect.

Applied to PO, we can assume that people and institutions with a lot to lose can be expected to do what they can (or whatever it takes) to minimize their losses and preserve their wealth and power. This can be both reassuring and frightening. I tend to doubt that we're going to have TEOTWAKI II, because there are too many rich and powerful people with too much to lose to allow that to happen; this is the reassuring bit. But there are a lot of tools in their "whatever it takes" toolbox, some of which are very frightening indeed.

HI greenish,


re: "...quite successful at doing international PR to change several paradigms on a large scale."

Is there any possibility you could elaborate? I'd be interested.

How do you find out what the varying oil prices around the world are? For example Australia's oil price isn't determined by the prices listed here, it's determined by prices in Singapore.

What sites list the differing types of oil and their relative prices?

Portland starts construction on New Light Rail Line

The offical ground breaking was last month, but April 9th, construction started in earnest at several locations.

The new line is the Green/I-205 line; 6.5 miles south from an existing Eastside junction (Gateway), scheduled to open in September 2009 and ridership is projected to grow to 46,500/weekday.

When I-205 was built, space was left for a future "transitway" and this line uses that ROW. In addition, the Green Line will use a different path from the established Blue, Red and Gold Lines in the Westside downtown area, bringing more destinations close to a station.


One can see how a SYSTEM is developing in Portland (the streetcar is not on the map, but it serves the Westside downtown and plans are for it to be on both sides of river).

IMHO, Portland Oregon is a good model for what many US mid-size cities could do.

Best Hopes for more Urban Rail,


Another major exporter is becoming increasingly unstable:

ALGIERS (Reuters) - Bombs killed 30 people in Algeria's capital on Wednesday, raising fears that political bloodletting had returned to the north African oil exporter.

One of the blasts, believed to be a suicide bombing, ripped part of the facade off the prime minister's headquarters in the centre of Algiers. A second bomb hit Bab Ezzouar on its eastern outskirts, the official APS news agency said.


Big draw in gasoline inventories, 5.5 million barrels down, to less than 200 million barrels.

We are going to start seeing supply problems soon, if we don't get some refineries back on line pretty quickly.

Summary of Weekly Petroleum Data for the Week Ending April 6, 2007

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.7 million barrels compared to the previous week. At 333.4 million barrels, U.S. crude oil inventories are just above the upper end of the average range for this time of year. Total motor gasoline inventories fell by 5.5 million barrels last week, and are just below the lower end of the average range. Distillate fuel inventories inched higher by 0.1 million barrels, and are slightly above the upper end of the average range for this time of year. Heating oil inventories (high-sulfur) fell last week, while diesel fuel inventories (the sum of ultra-low and low-sulfur) inventories reported a modest gain. Propane/propylene inventories rose by 0.7 million barrels last week. Total commercial petroleum inventories declined by 0.3 million barrels last week, and are in the upper half of the average range for this time of year.

Now, these are the first details I'm hearing of
today's report. I heard on 1010 WINS news about
5pm today that gasoline was down but crude and distillates
were both up. Isn't that a little disengenouws?
And I generally have some respect for 1010 WINS news.


In days forward that must be historicaly near lows.

Any thoughts as to it being related to high percent of heavy and sour crude inputs?

What is especially interesting is to look at inventories in both absolute and in terms of Days of Supply in the early Nineties, versus now. The industry routinely kept 27 to 30 days of gasoline supply on hand in the early Nineties. We are probably down to about 21 days now.

I find the argument that, considered in absolute barrels, oil inventories are high to be unacceptable. In fact, I find when I look at days of supply, I see an industry not investing in infrastructure, exactly the same problem as not building new refineries - both of which indicate that the industry itself does not believe it can make money on those investments.

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

Playing Devil's Advocate here, but I thought keeping less inventory on hand was actually a sign of efficiency. Could the industry just have gotten much better at predicting demand and at JIT distribution in 30 years? Is there any reason that such would be desirable in the oil industry like it is in some other manufacturing sectors?

Peak Squid

“Soylent Black is peeeeoppplllllleeee!!!!!”

But how does that work out in absolute terms?

What I'm gathering from your statement is that you are saying that X number barrels in the 1990s would provide us 30 days of supplies. But today X number of barrels would only provide 20 days of supply.

If X is the same in both instance then the issue is we are using X up at a faster rate thus decreasing the number of days of supply we have. In which case the issue isn't so much (or perhaps I should say "purely") one of incoming supply/refining but rather also one of available storage? In order to raise the number of days of supply back to 1990s levels we would need to store more in absolute barrels somewhere.

I guess ultimately my question is, is this a problem due to lack of imports, or refinery capability or due to lack of storage, or maybe all of the above?

Would I be correct in figuring that the tight inventory is not shared equally everywhere and spot outages would become a possibility if the trend continues?

We just returned from a trip to CA. For the first time ever that we are aware of, SF Bay Area gas was more expensive than HI gas. The cheapest we saw was about $3.25 for regular. One place, in Benicia right there AT the refineries, regular was about $3.50 and premium was $3.85. Go figure. When we got home to HI, we passed a station near our house and regular was $2.98. I just sent Gary to top up his tank and fill all of our containers since we'll likely catch up to CA gas prices pretty quickly.

xburb...these were my thoughts a week or so ago. We are awash in crude, but it's not the type that our refineries can process easily (except Valero).

Therefore, crude inventories are going up in the weekly report, but the gasoline inventories are not following suit.

Of course, I am a bit conspiracy minded and this type of reporting would be "cooking the books" in my thinking.

My Driver returned from Seattle late last week.
Diesel $3.10
Reg. $3.25
Premium $3.45

Diesel had been higher than reg for a long time. WT or someone else can tell us why I suspect refining.

Seattle's not quite that bad (from AAA):

Seattle-Bellevue-Everett Regular Mid Premium Diesel
Current $3.067 $3.177 $3.335 $3.009
Month Ago $2.748 $2.847 $2.988 $2.882
Year Ago $2.738 $2.837 $2.978 $2.886

There are 5 refineries in WA (600k bpd) which supply WA and OR and some to CA. Most crude comes from Alaska, although more and more comes from wherever. Gasoline transport is by pipeline, although I don't know how it gets to CA.

State averages are here. CA is at $3.281, so that probably drags the price here up a bit. Oregon has no refineries, and its price is close to that for WA. Idaho (with no refineries either) pays less, but gets most of its gas from refineries in Utah.

In checking that, I came across this interesting story from a few months ago:
Refineries Snub The State

Idaho Attorney General Lawrence G. Wasden last month mailed letters to companies asking them to explain their "extraordinarily high" gas prices. The missive noted one Idaho legislator suggested price regulation might be necessary.

"It is in everyone's best interest (including the refineries') to sell gasoline in Idaho at a price that does not damage Idaho's economy, nor put Idaho businesses and consumers at a competitive disadvantage," Wasden wrote.

An Idaho (bleeding red state) legislator suggesting price regulation?

Earlier in the story, there is something else interesting:

Meanwhile, oil officials in Duchesne and Uintah counties also allege the refineries have reduced the amount of "black wax" crude oil from eastern Utah producers they will process in favor of the cheaper, easier crude imported by express pipeline from Canada.

In addition, Utah producers say refineries are now paying less than ever for the "black wax" product, so named for its high- paraffin, sludgy consistency. This type of crude doesn't travel well -- it essentially congeals into solid wax like a candle -- so it really can't be trucked farther than the two to three hours to the Salt Lake area refineries.

I think the "black wax" might yet again become valuable.

You chart I assume is averages.
Also note the diesel/gas inversion.

WT refining? Heavy crude easier to make diesel with?

My line of inquiry also. I'm just suspicious enough of the reporting to entertain a little ol' sin of omission. Neglegting to mention that the outages are partly b/c this gunk just doesn't run through as good as the old stuff
I know one thing, I'm not buying a V-8 any time soon :)

Excuse my ignorace...but why are some of the refineries not on line? Will they be back soon?

Thanks in advance,
Rick D.

Maintenance/Summer fuel switching I do believe....

Fires, seasonal extended maintenance, etc. I'm sure that refiners are working as hard as they can to get the refinery utilization up ASAP. This happens every year. A key difference is that gasoline demand is so high.

As of January, 2007 world crude oil production was down by a million barrels per day from the 5/05 rate, so I don't think that we need any more refineries, per se. We do need to modify refineries to handle heavy and/or sour crude.

CNBC is talking about $4 gasoline at the pump.

Funny comment "CNBC is talking about $4 gasoline at the pump." Just this week I heard on NPR an "Expert" from somewhere (can't recall exactly who or where) saying gas prices would likely stabilize around $1.85 and then come back down this summer.

Prices are around $1.78 for the country, already above the predicted high of $1.75 for the year put out in January/February. But still early this week the message was that prices were at there high and would come down in a few weeks. Now a completely different forecast. Is it any wonder people that don't track and understand the Peak Oil debate just tune it all out? Who do you believe from day to day? Predictions are all over the place even in one week span of time.

There seems to be an enormous disconnect between what the "experts" say will happen over a 2-6 month time frame and what is actually happening. How many people are hearing the forecast quotes ( and wanting to believe in them) instead of empirically keeping track of what prices are actually doing?

NC, your prices (I'm assuming you are talking retail) are a dollar low.

It's common for at least some refinery capacity to be off-line at any give time. Especially during seasonal transitions, when they have to change the type of fuel they produce. Then there's maintenance, accidents, etc.

However, there's a theory that peak oil will mean more refinery down time. One, there may be so much pressure to keep producing that maintenance is deferred longer than usual. Two, they may be using heavier, sourer crude, which is more difficult to refine and more likely to cause problems.

Continuing with the heavy/sour versus light/sweet theme, I wonder if some refineries are not operating at full capacity because they can't get 100% of the type of crude that they need.

Also, since C+C is down by a million barrels per day from 5/05, that is around 1.1 mbpd or so of product that is not being refined. (I'm guessing at refinery gain)

As crude becomes heavier and more sour, how do you think gasoline prices will change as compared to diesel, all other factors remaining the same? i.e should my next car be gas or diesel?

What seems strange is that refinery capacity increased last week but gasoline production continues to fall.

Last three weeks production:

W/E Capacity Gasoline Distillate
Mar 23 87.0% 8.9 mbd 4.0 mbd
Mar 30 87.0% 8.8 mbd 4.1 mbd
Apr 6 88.4% 8.5 mbd 4.2 mbd

Maybe it's not significant. Pity RR isn't around to give his thoughts.

Distillate and propane production bumped up.

Heavier oil?

Or start importing more gasoline. Imports below a Million per day this week.

Imports below a Million per day this week.

But comparing 2007 to 2006, total imports (crude + product) are up 5% (four week average) and only down 1% YTD. Westexas, is this the import crisis yet?

I'm sure you are correct. We can have an infinite growth rate against a finite resource base, and lower crude oil production plus increased consumption in oil exporting countries will result in higher oil exports.

And Saudi Arabia, Russia and Norway will all soon start showing higher oil exports.

Clearly, the fact that Brent crude is currently 80% higher than its average price in the 20 months prior to 5/05 indicates robust world crude oil supplies.

And the fact that total US crude + product inventories have been drawn down by over 100 million barrels since last fall indicates excess supplies worldwide. In fact, I don't see why we can't keep drawing down our inventories forever in order to meet demand.

In fact, I don't see why we can't keep drawing down our inventories forever in order to meet demand.

This is an old military trick, when you run out of ammo you keep shooting so the enemy won't notice...

Here is the latest "remain calm, all is well" blast from U.S. DOE, issued hours before the EIA announced a 5.5 million barrel drop in gasoline supplies, causing gasoline prices to rise by 2.5 cents today. The operational life of these soothing governments predictions is shrinking each day.

Forecast: Lower gasoline prices by summer

By H. Josef Hebert
The Associated Press

WASHINGTON — Drivers may find gasoline a little cheaper this summer compared with last, despite a 64-cent-a-gallon jump nationally since January.

The Energy Department said Tuesday the recent rise in gasoline costs is likely to slow in the coming weeks, with prices averaging $2.81 a gallon over the vacation driving season, about 3 cents lower than last spring and summer.

But the Energy Information Administration forecast is anything but assured. A month ago, the agency said it believed the cost of regular-grade gasoline would peak in June, averaging $2.67 for the month, a price eclipsed last week. In the Seattle-Bellevue-Everett area, the average price of a gallon of regular Tuesday was $3.06, according to the AAA.

The Fidel, Hugo, The Economist and ethanol thing just gets richer and richer. The spectacle of Fidel preaching economics and land use after leading Cuba though economic hell for 47 years is a real joke. But don't mention his using Cuban land to grow tobacco for his cancer stick cigars. And, by the way, why don't ethanol opponents who decry using corn for energy never make a peep about using land for tobacco and cotton when it could be used for food. Then to have that cornucopian, demand creates supply fiction magazine, The Economist, endorse the great dictator Fidel, the Marxist, is just too much. The giggles are turning into belly laughs. Now comes on stage the only clown that can give GWB a run for his money and calls Bush a crazy, not for the Iraq war black hole, but for ethanol. Meanwhile as Hugo's oil production falls, he kicks out the majors and promises oil for everybody in South America. If you are not rolling in the aisles by now, you must be unconscious.

Cotton is the GREAT bioalternative to oil !

Polyester, nylon, spandex, et al or cool, comfortable cotton :-)

Wool scratches and it is too warm. Linen is nice but it takes land as well.

Best Hopes,


PS: Cotton productivity/acre is high enough to make a difference with a reasonable fraction of land. We can clothe the world in cotton sustainably. And compost worn out clothing after removing the buttons and zippers.

The basic need of humans are food, water, clothing and shelter.

Driving a SUV is not on the list (sorry ethanol lovers) but clothing is.

Cotton is useless in cold weather.

"Cotton is useless in cold weather."

Especially if you are exercising or doing heavy work in cold weather. Cotton holds moisture against your skin whereas wool wicks it away. You'll never see a marathoner wearing a single cotton item. After about 10 or 15 miles of running in cotton socks, feet become a bloody and blistered mess. Even worse is what a cotton shirt will do to the nipples after 10 or so miles (at least in men who wouldn't be wearing a synthetic sports bra under it). Also, never try to hike in hiking boots for more than a few miles with cotton socks for the same reason. Before synthetic fibers, heavy outdoor work was often done in wool or flannel.

**Edit- I realize how off topic this comment seems. My point was to let the doomers know about one more thing they should stock up on before TSHTF- synthetic and wool clothing, especially if toiling outdoors in good and bad weather is part of their vision of what it takes to survive the future.**

Actually, this is very useful information.

Something to look into for durability and ability to wick away moisture is bamboo based fabric. Besides being softer and smoother than cotton, it also has antibacterial and low-allergen properties. In addition, it is claimed to be an environmentally friendly product.

I own many lightweight bamboo fabric sweaters and socks and they are terrific. More knowledgeable input on this alternative would be helpful.

Hemp is historically a very important fiber for clothing, ropes, paper, etc. It's also easy to grown. Until the drug industry wanted to get rid of an unpatented competitor.

I had hemp shirts, nice looking but thick, heavy and not lasting very long because the threading seems brittle.
I think this is because the fiber is more slippery that cotton and does not hold together as well.

Wool scratches and it is too warm.

When's the last time you ventured out of the Big Easy, Alan?
In cold, damp weather, cotton is death.

I have a wool sweater from Fort Williams co-op store in Scotland, I would love to have several more. Nothing like a real hand made wool sweater. Warm, repels water, and lasts a long time if you keep the moths at bay.

Wool in New Orleans, LOL, maybe, maybe, 5 times a year.

Quid Clarius Astris
Ubi Bene ibi patria

Come to think of it, the Icelanders did seem to prefer wool to cotton sweaters. And they raised sheep on land with no other agricultural use except timber (SLOW growing timber at that).


Best Hopes for non-oil fibers (I like linen too despite the wrinkles),


PS: One can live quite well in New Orleans without any wool clothing and I need to travel more than 5 miles from home for work occasionally (like Iceland) but little desire most days.

Alan, I respect you and I love your posts, BUT...
If you've ever hunted in the Adirondacks in November
you will quickly learn to appreciate wool.

Tobacco production is a terrible use for good crop land. Unfortunately, it was, for many years, the money crop in much of the Southeastern US. I don't think you can dump cotton farming into the same bin.

Admittedly, practical, the whole thing is a circus. I guess I should feel priveleged to have a ringside seat but somehow, I don't.

Less than 1% of agricultural land in Cuba is devoted to growing tobacco, while Cuban cigars are the 4th or 5th largest export by value (after tourism, nickel, seafood, ?).

Cuba has had its share of economic problems, some of which were self-imposed. But there has also been a little thing called the embargo. Punishment for insisting on national sovereignty. Nonetheless, every Cuban has access to health care. The country has a lower infant mortality rate than the US. Every Cuban has access to education and work. Cuba has a prison population rate of 487 per 100,000; the rate in the US is 737 per 100,000.

Hugo Chavez has long made clear his position on the war on Iraq. But I suspect that he understands that having the US hoisted with its own petard provides an opportunity for those seeking freedom from the empire and its exploitive, repressive and destructive policies towards countries such as his.

The Economist is wise enough to understand the economic folly of corn/grain/cellulosic ethanol. While one might question if the editorial board shares Castro's empathy with the world's poor, it surely understands how the subsidized ethanol industry will further cripple an already declining economy.

Frankly, with a better grasp of market economics, Castro and Chavez might endorse state-supported agri-business in America. Afterall, a self-devouring beast makes a preferable enemy to a self-sustaining one.

Yes, Cuba is a great place .... that's why they have to force people to stay there, and why so many people will risk their lives to leave.

I wonder how many Cubans are trying to flee to such capitalist paradises as the Honduras, Belize, Guatemala, El Salvador, Mexico...

But it is true that wealth is a magnet. Fish, forests, massive amounts of minerals, massive amounts of coal, natural gas and oil, ten thousand years of buffalo dung spread over vast prairies with temperate climate, isolation from the destruction of wars in the mother countries while benefitting from same, accumulation of capital from the trade and exploitation of slaves and impoverished immigrants... It would have been pretty hard not to have generated wealth from these conditions.

There are how many Mexicans and central Americans in the US?

It will be interesting to watch the flow of people, if the current US decline accelerates post peak-energy into a dystopia characterised by Hans reaching for his revolver everytime someone appeals to a sense of community.

There is no question that capitalism is the most successful way to turn natural resources into 'wealth', and quickly. It's too bad about the second law of thermodynamics.

I thought industrial civilization turned living things into dead things...also known as GNP.

I have always marveled a the irony of promoting free trade with an embargo.

Kerry and Gingrich Hugging Trees -- and (Almost) Each Other

Gingrich is leading the conservative charge towards accepting and acting on climate change. Despite his foibles (I would not want him back in Congress or in the White House), this is a good thing. If the two major sides of the political debate can begin to close the gap on the discussion of global warming, we may get some action.

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

That was a remarkably good and reasonable debate and I surprised myself by not hating Gingrich after the debate. Gingrich actually admitted that GW was urgent and that we need to do something now. He believes in the market a bit too much for my taste but at least he is trying to find a solution rather than taking the usual conservative stance of denial.

We need to use the ability of the market to take action but we cannot expect the market to magically fix the problem without government incentives, disincentives, and, yes, regulation. Perhaps the two sides were closer than one might at first think after the smoke clears. Bush has taken the voluntary approach to global warming ever since he has been in office and our emissions continue to soar. The voluntary approach is just a smokescreen for doing nothing.

And now we hear Bush supports a higher CAFE standards. But read the fine print before you buy. And thanks for wasting your entire presidency in denial.

Anyone that hates Tom Delay with a passion cannot be ALL bad !

(Newt - Tom fued was personal).

And Gingrich IS a thinker.


The guy scares me.

He should scare the bejeezus out of everyone!

Gingrich's recently stated disregard for the First Amendment ought to make it abundantly clear that he is not a "conservative". Newt's objectives need closer scrutiny. His ideology is corporatism so, truthfully, he is more neofascist than anything else.

Always consider the confluence of rhetoric, ideology, and delusion. It shouldn't surprise anyone, for example, that he would support global warming initiatives which tend to disproportionately hammer the little guy (after a few rounds of bait and switch) and simultaneously strengthen the role of an authoritarian and centralized government.

As for the odd pairing of Gingrich and Kerry, that should just be more evidence that polarization of the two party system is more satire than substance. We can add G&K to other odd political pairings: Hillary and Murdoch, Kerry and Heinz, Shriver and Schwartzeneggar, Carville and Matalin, etc.

I don't understand how this could be explained away:

Newt Gingrich became the most prominent figure to suggest military retaliation. The former House speaker said Blair should threaten to destroy Iran's oil-production capacity.

By forcing the Iranians to "go back to walking and using oxen to pull carts," they might overthrow the hard-line government, he said.

Newt is extremely intelligent, but often ends up with the wrong analysis. Partially because as he stated, he trys to fit a solution into his ideology.

How would conservatives fix global warming.....

No Newt, its how do human beings fix it.

"Anyone that hates Tom Delay with a passion cannot be ALL bad!"

I don't know, anyone who can simultaneously rail against Clinton's infidelity and carry on an affair with a much younger congressional aide is pretty much scraping the bottom of the integrity barrel.

I don't have any deep insight into the "feud" but I thought it had more to do with a clash of class affiliation - Delay having blue-collar sensibilities (former exterminator) and nationalistic theocrat leanings and Gingrich having essentially antithetical tastes and convictions.

I'm sure Delay would hate my secular guts and suggest I should be barefoot and pregnant, but I have to admit I respected the consistency of his stance about citizen welfare best left to private charity and then adopting a slew of kids. It kind of made me wonder if at least he had, unlike Gingrich, a few moments of sincerity.

Newt is bipolar. Mania is always popular. The guy has never acknowledged his limits.

He is just plain mad:

Achmadinejad the current leader of the Iranian dictatorship asserts in public on television “we must defeat the Anglo-Saxons and eliminate Israel from the face of the earth” and goes on to assert “it is easy to imagine a time in the near future when Israel and the United States will no longer exist.”

That is just so bollocks it is hard to even come up with a counter argument.

Two or three nuclear weapons on Tel Aviv, Haifa and Jerusalem would be a second Holocaust and could occur at any time.

Iran does not have any nuclear weapons and will not have any in the next 10 years (should they be even trying to make them, of which there is absolutely no evidence)!!!

The British arrest terrorists plotting to bring down ten airliners in one day over the Atlantic. One of the arrested couples planned to use their eight month old baby to hide the bomb material as baby milk. We have no comprehension of the ferocity and savagery we are facing when a mother will kill her own eight month old baby in order to kill us.

And we are totally making this up... but are you going to call us on it...? I didn't think so...

We lack the “long telegram” that Kennan sent from Moscow to describe the sources of Soviet behavior and the NSC-68 strategic plan which Nitze developed in 1950 to outline a 44 year policy of containment.

Lacking clarity of the threat, clarity of definition about our enemies, clarity of strategies for victory we flounder in purely negative and divisive debates about Iraq as though it existed in isolation.

America needs a clear commitment to defeating the forces of violence, oppression and hatred.

America then needs clear strategies that are military, intelligence, diplomatic, information, economic and educational to overwhelm the forces of Islamic Fascism and their dictatorial allies around the world.

While nobody outsidethe US understands our mission, we will make sure everybody understands by the time we are finished!

"It is easy to imagine a time in the near future when Israel and the United States will no longer exist."

That's hardly bollocks. Look how fast the Soviet Union came apart. Even Schwarzenegger has made some noises about how the US is simply too big. Absent big brother, Israel would have to play ball. The Republic of Texas might not be on the Security Council.

I'd also ask for the source of that quote about wiping Israel from the map; there have been some deliberate mistranslations.

cfm in Gray, ME

"Iran does not have any nuclear weapons and will not have any in the next 10 years (should they be even trying to make them, of which there is absolutely no evidence)!!!"

Well, given the fact that Iran is practically surrounded by nuclear-armed entities, they would be crazy not to obtain nuclear weapons themselves. I think the nuclear arms of Pakistan and Israel are more likely to be used.

Mortgage mess spreads to Alt-A segment

Turmoil in the mortgage market is ensnaring more companies who lend to people with decent credit.

The spread of home lending woes beyond loans to those with weak credit threatens to reduce the availability of loans for some consumers and even threaten the existence of some lenders.

Boy...that is a surprise and not predicted by anyone (sarcasm).

They just said on CNN that the average home price in the US is on the verge of dropping. The first time this has EVER happened according to the report.

Here it is on the web:

Home prices to fall for first time in 2007:
Real estate group sees 0.7% drop in prices this year, the first annual decline in nearly 40 years of tracking.


I ran this yesterday in the Round-Up:

Are property taxes in subprime soup?

Chriss Street thinks if you've got a mortgage from a subprime lender in deep financial trouble, and that's a good-sized bunch, you may want to gulp.

The county's tax collector is concerned that some ailing lenders may be unable to get borrowers' payments to their rightful place, such as prepaid property tax payments.
"This is a very serious issue," says Street, who adds the unsettling notion that property owners are still liable for a tax bill even it goes unpaid due to a lender's failure to forward your cash to the tax collector.

The housing market news just keeps getting worse.

Should we start a new "Peak Housing" thread, then?

Implode - O - meter at 54. I don't think it's even been 3 weeks since I first checked this site ... and it was 42 then.


Nice link... make that 55!

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

"threatens to reduce the availability of loans "

The liquidity trap is closing from the Rear End of the horse's ass we call a banking system.

Alan Greenspan is a criminal - it was not Neglect - it was deliberate and premeditated.

"It seems to me you were all asleep at the switch," New Jersey Democrat Robert Menendez said pointedly as he quizzed officials from the Fed...

No Mr Congressmanz, the Greenspan Gang was fully awake and knew full well how this would end. The only ones "asleep at the switch" were the rubes and the politicians.

Greenspan deliberately drew in as much Financial Cannon Fodder as he could using the Housing ATM, ARMS and weak lending standards, so as to keep the ponzi scheme going long enough to retire before the collapse.

Greenspan was no John Law - Law was honest but incompetent - but Greeny should suffer the same or worse fate as Law.

I'm quite interested in seeing how seriously people will question the fiat money/debt schemes foistered on us. My feeling is that it will be whitewashed... but if economic conditions deteriorate enough it might prompt people to investigate thoroughly enough to bring it into the popular consciousness.

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

John Law managed to get out of France.

He died some years later in Venice at the age of 57, not too bad for those days.

Schumer calls for subprime bailout

The federal government should offer troubled borrowers hundreds of millions of dollars to bail them out of subprime mortgage loans, several leading Democratic lawmakers said on Wednesday.

Anyone trying to link this to Kunstler: forget it. That connection is just as non-existent as the one between high gas prices and the housing bubble.

America is being financially drained, prior to, and in anticipation of, the advent of peak oil, not the other way around. Kunstler is right about the outcome, but not the way there: he missed out on the financial markets' role.

Still, a warning: this is not for the easily depressed. People think of the economic system as one that moves in cycles; this time around, though, what could possibly drive the upward crest of the wave?

Poverty is here to stay, and we're just watching its first baby steps. Welcome to the third world.

The New Suburban Poverty

Last December the Brookings Institution published a report showing that from Las Vegas to Boise to Houston, suburban poverty has been growing over the past seven years, in some places slowly, in others by as much as 33 percent.

"The enduring social and fiscal challenges for cities that stem from high poverty are increasingly shared by their suburbs," the report concludes. It's a problem some may assume is confined to the ragged fringes of so-called "inner ring" suburbs that directly border cities, places where the housing stock is older and from which many wealthier residents long ago departed.

But this isn't the case. "Overall...first suburbs did not bear the brunt of increasing suburban poverty in the early 2000s," notes the Brookings report, which found that economic distress has spread to "second-tier suburbs and 'exurbs'" as well.

The result is a historic milestone that has gone strangely ignored:
For the first time ever, more poor Americans live in the suburbs than in all our cities combined.

America is being financially drained, prior to, and in anticipation of, the advent of peak oil, not the other way around. Kunstler is right about the outcome, but not the way there: he missed out on the financial markets' role.

It took me a long time to understand how that works, even though it is the normal functioning of the market. Greider was writing about it in 1991 "Who Will Tell The People". David Kay Johnson "Perfectly Legal" from a couple of years back. But logic is different than understanding. It wasn't until I started studying "growth" a year or so ago it started to sink in.

Once again, it's the core and the periphery. The core is now stateless - a global class of super wealthy and corporations. The periphery is the rest of us poor suckers. The purpose of the machine is to extract wealth from the periphery and feed it to the core. WTO, GATT, Interior - aided and abetted by the likes of Abu Gonzo and the other kleptocrats.

I'd quibble as to whether or not it is preparatory to peak oil. Rather it seems to me that cheap energy has postponed this reckoning. Growth - fuelled by cheap energy - has put it off. Rising tide and all that: the liberal fundamental - that one need not address distribution if everyone does better, even if some do radically better than others. [Trickle down in democratic colors.]

Peak Oil is all about distribution, because the pie is not going to be getting bigger or even staying the same. What is fair and who decides? That's why planning now so there are options is so important.

cfm in Gray, ME

Hi cfm,

Thanks, and I may have asked you this before...

re: "That's why planning now so there are options is so important."

Do you have any ideas about planning - other than on the personal/family level? i.e., on the local, national, international, etc?

This mess will dwarf the S&L crisis before it is over.

Good luck Mr. Schumer, start "bailing." Too bad our debt will require Hyperinflation to "pay" it off.

...time to start working on those "local currencies?"

Big draw in gasoline smaller build in crude than anticipated overall due to demand. Supply was up both domestically and thru imports. Bottom line we are finding the oil somewhere? Iraqi Nigeria? where? demand is still growing...significantly. Refiners are printing money. Draw on inventories only .3 million barrels.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 0.7 million barrels compared to the previous
week. At 333.4 million barrels, U.S. crude oil inventories are just above the
upper end of the average range for this time of year. Total motor gasoline
inventories fell by 5.5 million barrels last week, and are just below the lower
end of the average range. Distillate fuel inventories inched higher by 0.1
million barrels, and are slightly above the upper end of the average range for
this time of year. Heating oil inventories (high-sulfur) fell last week, while
diesel fuel inventories (the sum of ultra-low and low-sulfur) inventories
reported a modest gain. Propane/propylene inventories rose by 0.7 million
barrels last week. Total commercial petroleum inventories declined by 0.3
million barrels last week, and are in the upper half of the average range for
this time of year.

Did anyone expect that the US couldn't get oil, at this point? (real question)

I just assumed (as WT and other probably do), that demand destruction starts in the poorest nations first. So we are getting our oil, just others are not.

The ethical challenge with the 'market' is that we got that oil to fuel growth still, however, other countries need it just for necessities/to feed people.

One could speculate that demand destruction in the US will not occur in until we are past the $100 a barrel mark, and even then I suspect that it will just slow growth down to a crawl(leaving economic woes out for now).

When significant global shortfalls in production(against demand) occur in 2009, then true demand destruction will likely occur. You could easily speculate at $200+ oil in that time frame.

And by 2009, and maybe only in 2009, the world might just wake up to Peak Oil. If someone doesn't blame it on something else and start world war 3.

This is the shoulder season--lowest demand period of the year--just wait a few months, or even weeks.

I expect that even at $100 poorer countries will start going off the cliff while US drivers will feel just minor discomfort adjusting to $4 gasoline - like they adjusted to $2 and $3.

The real question is: how long is the dollar hegemony going to hold and for how long US will be able to obtain oil and other stuff in exchange of nothing else but painted paper. At first I was thinking it will not be that long, but now I'm not so sure... the USD may falter only if there is viable alternative to it, but it looks like the entire financial elite is determined to keep the status quo. If for example the dollar starts to be exchanged for euros, the EU central bank will make sure to print enough euros to keep the parity (something which IMO is happening already - anyone wonder about the reasons for the strong EU growth lately?). The losers of course will be ordinary people seeing their lifetime savings melt by inflation. It tuns out to be a fake competition meant to keep the machine running, just like the Dems vs the Reps in the US. And the machine is the same old one that has been running well for the last century or so - acquiring cheaply the resources of the third world from the first using the monopoly over the financial markets. I don't think this will break soon.

I suspect the poorer countries are feeling it NOW.

The US dollar might hold together for a while still, but I doubt the system will survive depletion...so 2009 is a brick wall for the USD.

I still maintain that TPTB will not let this all come to the light...a MAJOR consumer distraction is coming our way...hmmm....now, who should be blame?

Zero-point / over unity energy: seeing is believing...

free energy elemental rod generator video 1

free energy elemental rod generator video 2

Free Energy Coil Demo

Searl free energy motor
In the 1960's Professor John Searl was building free-energy electricity generators that doubled as flying saucers, but was thrown in jail on the charge that he was stealing electricity from the grid. He was running his home on his energy generator, not from the grid.

...Last weekend, Searl's close friend and business associate Dr. Terry Moore posted two videos at YouTube that demonstrate two mock-up variations that will enable Searl to file for a British patent.

...There are three rings in the full SEG design. The energy generated in the first ring is passed unidirectionally (like a diode) to the next ring, which boosts that power as it is passed to the next ring, and so forth, until it reaches the periphery where it is pulled off as usable electricity, after being run through a step-down transformer to the voltage desired.

This last one may not technically be over unity. But micro scavenging of energy is cool too. Imagine mass producing these in sheets.

Nanogenerator Provides Continuous Direct Current
The nanogenerators take advantage of the unique coupled piezoelectric and semiconducting properties of zinc oxide nanostructures, which produce small electrical charges when they are flexed.

In the 1960's Professor John Searl was building free-energy electricity generators that doubled as flying saucers, but was thrown in jail on the charge that he was stealing electricity from the grid. He was running his home on his energy generator, not from the grid.

Zoe, I'm not trying to pick on you but my skepticism meter went off the scale on that one! Look; it would be a very simple matter to prove to the electric company that you were not stealing power from them. You simply cut the line.

Keep bangin' away Zoe.

I'd suggest you take the next step, builder. I recommend Bearden's book/DVD.

Where IS that 'Theory of Everything' ?

When I hear Zero Point anything I reach for my gun.

Did you watch the video in the links (first and third specifically)? Care to explain it? I'm not a cornucopian. But come on people - until we have a unified force theory, anyone will have to admit that modern physics still doesn't know how a lot of stuff works. And untill that, we can't rule out the possiblity of technologies that make mechanical harvesting of energy look like caveman stuff. Additionally, there is a lot of annectodal evidence that people who have claimed to invent free energy devices in the past have been intimidated, threatened, refused patents, etc. Admit it people. There is a chance that everything we think we know is wrong. And that's exciting. At anyrate, the Steorn results will be out by the end of the year.

Actually, a snippet is coming this Fri. 13, according to Engadget.

Where IS that 'Theory of Everything' ?

Dear TOD;

I would like for the ability to ignore or block people and child comments generated from their ignorance.

Specifically in this instance, 'over unity machines' or as is known to humans who live in this physical reality as 'perpetual motion machines'. The claims are obviously bunk, no single machine thus far created in the history of mankind claimed to be generating a greater output of energy than input has proven true.

Each case when analyzed, demonstrated the inventor had hidden a source of energy to propel the machine, thus invalidating its property and his claims.

Re:Zoe di Magnifico,
People such as yourself should enroll in a local university and take some Thermodynamic courses, or simply waste your lives attempting to duplicate the findings of 'scientists' who research 'perpetual motion machines'. The thermo courses will serve you well in understanding the phenomina, and the inability of yourself to duplicate the 'perpetual motion machine' should demonstrate it.

In addition I am hereby offering you a wager, should you produce a 'perpetual motion machine', and you claim it to be such, I will pay you 1,000,000,000 USD, persuant to the condition of allowing myself to select 10 Professional Engineers (with your joint approval of their selection) whom will examine your device in solitude. If any of the 10 agree you have created a 'perpetual motion machine' you will be given 1,000,000,000 USD or my life savings and future earning potential along with the same of my children, whichever is larger.

However, if all ten agree unanimously that you are a fake, and can demonstrate the method by which you power the machine, you will forfeit to me 15,000 USD as a penalty.


I don't even know why I'm replying to this

How about you take the example videos I listed as entries for your wager. Instead of huffing and puffing, tell me how the people are faking it. Or, you could direct that wager to Steorn. I bet they'd take you up on it, considering that that's essentially what they're doing, and they've spent far more than $15,000 on R&D so far.

Regarding your very rude reply, I lodge a protest of resentment. I know what the 2nd Law of Thermodynamics is. I am not a blockhead, nor even a cornucopian. Do you believe that physics has reached the pinnacle of its development? Do you admit that it hasn't all of the answers? If not please don't accuse me of being one who operates on assumptions or faith. I have no agenda. Please don't crucify me for raising a possiblity. As far as I know, science doesn't work too well in such an environment.

By the way, the third video I listed above is basically what I wanted to link to, but this is the better of the videos from that inventor. The one listed above is of lower quality and not as thorough.

My comments will become ruder now.

You sir are a faker, a snake-oil salesman. Go to school, LEARN something. Get a job Sir. You are a bum Sir. If I were your employer you would have been fired for believing this or for seriously mentioning this or similar type devices.

Here are some select quotes from your video you linked to in case this is not substantial enough.

"high voltage/current of DC...at ~5000Hz

1.5 lb device

121.8 Volts as read from the voltmeter

110-145 volts during operation

capable of 5 amps of electric power at 100 volts

use a 100 W lightbulb, 100 W at 100 volts is one amp"

This is the first correct thing he has said so far.

I note he makes a strong mention that he is turning on the device, but makes no effort to turn any off.

I note he indicates a "DC current with slight frequency" For explanations sake DC is a straight line load, it delivers a consistent voltage, and consistent amperage. If DC power has a slight frequency (which 5000Hz is not) you have got yourself a serious power supply problem, the modulations of the power are going to be destructive to your devices.

He claims "no moving parts", but watch out for the slight vibration! And the gyroscopic effect!!!

Where does his power come from?

As a matter of fact, I retract my previous statements, this man is a boon to science, you should invest all of your money with him. Better yet, give it to me so i can give it to him.

Seriously, go troll somewhere else.
Fark off and quit ruining the good name of science.

To further quote the primary rules of the universe,

In simpler terms, Energy_in - energy_out = d_energy_sys

You cannot beat Entropy, ever (increase in disorder of a system is certain).

but zero kelvin can never be reached!

Bet on the laws of thermodynamics, it has won every contest with "zero energy machines" (and their equivalents) and will win this one.

Russia eyes industrial development of moon

"It is time to think about industrial development of the moon. We are sometimes criticized for making such suggestions too early," Sevastianov was quoted as saying in an interview released on Wednesday.

"But it is time to do this given the limits to natural reserves on Earth and the pace of civilization's progress. Nor can we dismiss the idea of outsourcing harmful industries into space."

"I think it's important to send private people to the moon," Chris Faranetta, the vice president of orbital spaceflight at the agency, told Reuters at Russian mission control near Moscow.

Err, why???

To relieve population pressure?

Growth is determined by the ability of Mankind to reproduce and put more energy to useful work.

The moon is large, very large. It has He isotopes to be mined for "eventual" fusion power. It is a base for mining operations. It is also a large surface area for solar power generation.

The moon is also geologically stable. Mining into the moon can make room for countless humans.

It is however a 'little' outside of current possibilities.

Sending bored billionaires to the moon. I support that. If they stay.

To the Moon!! Alice. err, Russia?

If we can get thru the next 10 to 15 yrs, this will be big. The next resource boom, like coal & Iron, 50 to 100 yrs ago.

We really seem to be getting a lot of cr+p in this thread.

Space travel is dead, the energy costs and the pollution have already killed it.

NASA is just a gravy train kept in brain dead state by pork barrels.

You are completely mistaken in your assumptions, sir. Please go research the actual energy usage of the space program and the actual pollution levels caused by it. Then please understand that even with a nation deep in a depression, a country can build and launch viable rockets. Germany proved that at the outset of WWII. The total energy use of the space program is trivial against total consumption. In fact, given the usefulness of weather satellites and GPS alone, I would argue that any remaining government would continue that program for its pure utility value even at a global oil consumption rate of 10 mbpd total (which is not far off where we were in the late 1930s). Likewise with military ballistic missiles. Even a financially collapsed Russia could maintain and continue to operate its strategic missile forces because they represent such a small cut of energy usage and economic costs of the overall picture.

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

Hi Grey,

re: "...program for its pure utility value..."

Namely, the asteroid collision issue. Although I question the utility of strategic missile forces, and the weaponization of space is more than a travesty.

The spread between WTI and Brent reached $7.00 just before the inventory numbers came out. It is back down to around $6.50 now. The CNBC folks said it was because of "a glut of oil in Cushing, Oklahoma. I am sure this is the primary reason. But a lot of folks look at WTI as the "World Oil Price." This is not so, at least not anymore. Brent, as of 30 minutes ago was $68.88. (It is delayed 30 minutes on Bloomberg.)

Just before the inventory numbers came out WTI was down about a dime. It is up half a buck now to $62.39.

My point is the world's oil supply is getting tight, very tight. That is not reflected in the WTI price however.

Total imports of petroleum products were down 476,000 barrels per day and crude oil imports were down 441,000 barrels per day for the week ending last Friday.

Ron Patterson


I was just going to look at the spread this morning when I find you've done the job for me! Thanks, albeit not earned :)

In % terms we've got a spread of 6.5/62.3= 10.4% spread!? This is insane! I'll shoot off some emails to finance/oil guys that have some good insight on trading oil. I don't agree that WTI doesn't matter. It matters especially when it's so divergent from the world. Oil is fungible, right? Thus is why WTI matters especially when you can make some risk free returns....this is classic arbitrage strategy!

I have posted on this matter a number of times.

WTI at Cushing is not fungible until such a time as the pipelines delivering oil from the Gulf Coast are allowed to flow in reverse, facilitating the flow of Canadian syncrude to the areas where demand and price are highest.

Brent is fully fungible as the oil is delivered in a tanker and can be shipped anywhere in the world.

I am given to understand that the problem with reversing the Cushing pipelines is that insufficient storage exists at the southern end of the pipelines and that tanks will have to be built before flow can be reversed. Estimate build time 12 to 18 months. I assume permission has yet to be granted to build them...


if available storage at Cushing is artificially holding the WTI price at an ever widening spread to Brent, are we at risk of increasing global shipments seeking the higher price (Asia spread appears even worse) and redirecting to Europe?


The WTI discount is due to the lanldocked constraints at Cushing. Light sweet cash crude grades (like LLS) on the Gulf Coast are trading at significant premia to WTI. Even sour gardes (like Mars) are trading at a cash premium to WTI.

US cash crude prices are in line with global crude prices

Thanks BH,

So this glut of oil in Cushing that the NYMEX is trading on is an artificial in effect a "stranded market". Sounds like the only way to force the market discipline on this is for the longs to start standing for and taking delivery. As tate indicated earlier this almost appears to be an arbitrage opportunity. One could almost make the case that the refiners with the huge crack spreads would like to continue this underpricing of oil if contracted against the WTI without the current basis premiums and thus sticking a fat hog on the spread

Your point about the refiners (in the midwest PADD2) is exactly right, they have a significant interest in ensuring WTI remains discounted.

However, your point about "arbitrage" is incorrect. If you take delivery in Cushing you have to do something with the crude. Since you cannot ship it south, you have either to store it or sell it.

If you store it, the rental charge for the tanks will be be as wide as the contango in the futures market, so you will give up all your "profit" in tank rental (and insurance and finance).

If you try to sell it, you will have to sell to one of the local refineries. Since they own the tanks and the pipelines, I leave you to deduce how much they are likely to pay you for the crude.........

This situation smacks of being all too convenient for my tastes. WTI is the "reference" price used in financial discussions throughout the US. With WTI artificially held down, it appears as though oil is not moving up, yet it is. So you have the average consumer seeing the "price" of oil static yet gasoline prices going upwards rapidly.

Who is going to get the blame for this? The oil companies. But I don't see them as the ones who stand to gain the most from this artificial capping of WTI prices.

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

Is it a bit stinky in that the basis levels(premiums) at the coasts are not high enough to move the oil from Cushing. I guess that means not enough $ to move the oil to eastern or western refineries or offshore too. I don't see how this can last indefinately as the economic desire to ship to Cushing is not there. In the meantime the MW refineries get to buy oil for less than the rest of the country and the producers supplying that market make less money discouraging production.
In the longer term the spead will get high enough to move that oil especially when supply tightens a bit more. BH anywhere that you can link us to those gulfcoast crude premiums to WTI. Any guess as to what the spread need to be before you move that oil out of Cushing. Appreciate you sharing your expertise

Thanks for the clarification even though i'm sure it's been explained here before. That clearly explains why it is not arbitraged, but not having watched oil that long, I wonder if the emergence of oil ETFs has even exacerbated the contango.

US cash crude prices are in line with global crude prices.

Not according to "This Week In Petroleum".

Last Friday, closing prices:
Estimated contract prices for:

Ron Patterson

And one analyst fears the spread may cause shortages:


"The spread between Brent and Nymex prices worries Alaron Trading Corp.'s Phil Flynn. If such a wide disparity continues, it could mean lower imports coming to the United States as crude heads to Europe instead, he said.

That would put further pressure on inventories."

From Bloomberg:
"The Brent spread has me worried,'' Flynn said. ``Ships are going to be diverted to Europe because of the higher prices. Our refiners will eat through surplus crude-oil supplies quickly, which will push prices in the U.S. higher."


Not true. Most refiners are not buying WTI. They are paying for other oils that are physically closer to them and paying the market rate.

What is happening is that the artificially constrained WTI price is "telling" the market that oil is "flat" but the reality is that oil is drastically up. I can keep this fiction up forever too, if I simply use a government bureaucrat to routinely shut down (for "violations" of some regulation) any of the refiners who normally buy WTI from Cushing in order to keep the oversupply situation there ongoing.

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


This is all prices in USD, I wonder what this might look like when exchange rts are accounted for. I bet it's actually a wider spread in Euro's based on the strength of the currency. Without getting into some long econ discussion, I realize the price is BASED on USD, but when examing gold in USD or EURO terms - gains on Euro bought gold are significantly more when you account for the increasing purchasing power of the Euro.

It's like a multiplier on top of the gold itself. Nice....but when investing you WANT to hedge out the risks, but in this case the risks are against the dollar so this one can ride, but I'd play it safe and buy some puts against the exchange rts to hedge that out a bit.

Good points Ron. Looks like NGL +17.2% vs. year ago is keeping us from really looking ugly on total petroleum inventories. Also lighter draws in Jet Fuel and distallates than year ago. Maybe the airlines are backing off and using some to the inventories I think the built up during JFM.
Question do you know how subsitutable the NGL's are in the overall picture? i.e where can they displace oil?


My point is the world's oil supply is getting tight.


I was thinking the same thing this morning. Currently Brent is trading pretty close to the upper end of its post-5/05 range.

To recap, 20 months prior to 5/05 the average monthly Brent spot price was $38. After 5/05, about $62, within a range of $54 to $74.

Also, the Saudis just announced price increases of $1 to $4 per barrel.

As of January, 2007, world C+C production was down a million barrels per day from the 5/05 peak, and the cumulative shortfall, between what we would have produced at the 5/05 rate and what we actually produced is on the order of 420 million barrels (EIA).

In other words, we are simply witnessing bidding for declining world crude oil production, and especially for declining world oil exports.


Thanks for the comment about people thinking that WTI as the world oil price. I have certainly been doing that. I haven't really paid attention to the different types of oil and their prices and where they trade.

Maybe someone could give a quick lesson on those differences?

One other possibility is that it is an monetary correction premium.

Eg. EU, Asia, Middle East, Russia markets do NOT want the USD, and since the value is assessed in USD, there is a sale premium on the price.

Someone mentioned trading toilet paper for oil...

However, in the US the WTI exchanges toilet paper all the time...no big deal there.

This spread may only get bigger as the US economy gets shakier.

And, just like the Saudi premium announced this week, it may get harder and harder for the US to get those exports as the economy falters.

However, I do not doubt the tightness in the market, but I think it may be just supporting the current price level rather than allowing it to backtrack.

Either way, it really isn't a pretty picture.

I agree on the USD part. I would do the same thing. How long is the transfer between shipping and payment. This would give you the information to see what they think is the devaluation factor.

Apologize if this is OT. I've read in the last few weeks that people on here have bought long term calls on crude futures contracts. I'm just curious which, specifically, and the reasons.

Personally, I'm looking for around 2010-2012 at 85$ (I expect 110-150 before demand destruction and/or major recession kicks in, lowering the price eventually). Is there a point at which liquidity drops and the bid/ask is too large? I can't seem to find market data for contracts beyond 2010.

Also, with WTI prices lagging compared to Brent, is WTI no longer a reasonable benchark going forward to 2010-2012? Will Brent be more valuable as it serves Europe/Asia? Anyone buy Brent options at ICE or elsewhere? I haven't seen any prices for these beyond 2008.

Just appreciate any details/input. Thanks.

Nothing is riskfree (you know that ofcourse). 3-5 years is an awful long time (you can sell before ofcourse - but will you?). It always boils down to: whats your goals? To earn money, by being active? To cash in 2012? To play it safe?
Say with a major recession 2009 the futures might even drop to below 50$, right?
Then you have the problem that we just might head into a paradigm shift - in this case it can really be that WTI futures get decoupled to worldoil prices. Why not?
Will there be a "reform" on NYMEX? Ot TSHTF paradigm shift, do you really wanna play it on a 5 year contract paper - spooky.
Then you can add your ethical level to that (if you are so inclined)(do you want to own oil barrels -> CO2)?.

Hmm, but I think I didnt add any info to what you were looking for.
Rather raised more questions.

Isnt the oil futures race almost over? I mean two years ago you could really make a good buy, today, with contango (?) the best butter is already gone? How much will you make? 85$/70$= 20% over 3 years. You could as well buy gold.
Or you try to find the next trend and go for it before the market... (which is the scary part, right?).
Why not solar panels stock - should eventually make it and the need will be there, with the same scenario that makes you consider oil futures, and the returns could rather be a doubling in three years (cf Vestas wind power (they are going up up up - so sell now) - I expect something similar with solar the next couple of years).

Last you should consider the dollar, its value and inflation. That at least is some practical comment to you post. Dollar goes down, will it be truly considered in the futures on NYMEX? US inflation goes up, same?

Good luck in your endeavors :)

Thanks for the response. Basically, to me it is a hedge. I want to spend a few thousand dollars and if crude prices are below 85$/brl in 2010 or so, then great, either peak has been delayed or other forms of efficient energy are being used OR (hopefully not) major recession has hit.

I expect the dollar to go down significantly. This will only push the price of oil up further. I don't expect $85, that was the strike price I was targetting. I think $110-150 between 2010 and 2012 is reasonable.

I already have some investments in Euros, which have done well as the dollar has slid from 1.20 to 1.34 - I expect it to go to 1.75$ per Euro in the next few years.

That said, my question is really about the "best" contracts to buy, given a price expectation of $110 in the next 5 years. Options on WTI or Brent? Is there any liquidity or market for 2012 options? I can't find market data for that far(except to 2010 on nymex.com). I don't want barrels and would likely sell half early if the price spikes to that level sooner than 2010.

As I said, it's a hedge and speculative investment for me, if the options are worth $0 at the end, so be it.

Thanks again.

I own some 2010's. They are very illiquid. Options are supposed to be available for 2011's. I havent seen any traded yet. My best bet would be to go long the 2012 futures by buying 1 mini. Dont leverage. A mini costs 500*68 or $34000. If you have $17,000 to invest then that can be could alternative. I think we can safely assume oil futures will not go below $34 , so you wont be forced to sell.
Another strategy would be to go long that contract and short USO ( oil fund). Because of the contango month by month USo keeps losing money. If this persists then by 2010 the fund will be worth zero if oil prices remain constant. If oil prices go to 100 then USo will have the same value in 2010 as now but your futures will appreciate significantly.
This strategy will protect against a short term collapse as you can then cover you USO short and deposit money against your futures.

Ummm... a contract bought at 66 and sold at 110 would be a gain of $44,000 on a $4000 investement. That is, as known in the trade, a 10-bagger. The problem with futures is that you need to have a margin call reserve, so the investment needed per contract is $8,000.....

Hence the recommendation to use 1 mini contract witha lot of reserve.

Yes, a very prudent position and recommendation...some of us like to swing for the fences :)

Actually, for $50,000, I would set up a long corridor, by selling puts at 50-55 and buying calls at 75-80. the 50K can then control about 10 contracts with the generated premiums kept for potential margin calls.

Your comments on the USo short/2012 long srategy. I really think it is fool-proof. Even if short term oil spikes as long as the next month to roll over is higher than current month USO keeps losing value.

This is an interesting point, but I'd rather not be long the actual futures contract. Basically looking to put in approx. 5k-10k and not touch it. Not worry about maintenance if it spikes down for some reason, etc.

I know it's high risk, and if it never gets in the money, ok, I lose it all. But looking for the 10 bagger to the upside. That's why I'm focusing on the options, not the actual contracts.

So I guess I will keep looking at the nymex and ICE call contracts, for 2010-2012. Strike price ~85. But I don't want to pay a fortune in spread if they are very illiquid. I don't see much choice, though. Thanks for the input.

Place GTC limit orders and dont go on the theoretical price. Xpresstrade shows 2011 as vaild options with strikes of 60,65,70 75 and 100.
You may also consider corn which has 2010 contracts. I know corn to ethanol sucks but as long as corn trades below gasoline equivalent people will make ethanol from it. at 3.75 for 2010 corn trades at an approximate $57 a barrel crude. I dont think those subsidies will ever go away also.JMO.
Best of luck.

Warren Buffett just made a large investment in railways. Some thought it was very out of character for him, given that analysts had just downgraded railways.

Shows what they know

Warren is a smart investor and I am sure he has heard what Simmons has had to say recently. I would not be surprised if he reads TOD and if so, I would just like to say, "Hey Warren". We would love some of you financial advice over her at TOD.

Remember that Warren has also been betting against the USD for awhile now.

I dont want to bash warren buffet but he is going to have some problems soon unless he chnages his business profile soon. Geico is not going to do so well post peak and neither are many of his other investments like american express. He can talk till doomsday about "brand value" which wont mean squat in the post peak world. Also he sold out of petro china (25% below current prices as he considered it overvalued. He sold out his huge horde of silver way before the current run-up. Silver could arguably perform much better than many other assets in a post peak world as GDP contracts but total money supply increases leading to constant inflation.

Investing in railways though seems to be a better bet. He should use that $42 billion in cash to buyout a few major oilservice companies before it is too late.

I would furthermore like to add the fact that Buffet owns Coca-cola could be of distinct disadvantage to him. The current run up in demand for ethanol, and subsequent increase in price for the main ingredient (invert sugar) which is itself generated from corn may destabilize coca-cola's earnings and consumption by consumers.

Remember, soft drinks are americas #1 supply of food calories. They passed white bread some time ago. An increase in price of this beverage would cause a decrease in consumption, and unless consumers will tolerate higher prices for coke and other softdrinks they will move to another food calorie source.

I have been keeping tabs on prices of 24 packs of coke and other softdrinks up here in the great white north, and prices have jumped about 1.50-2.00 for 24 cans. From an original price of ~6-7 dollars, the increase is significant.

I totally agree. It is hard to find anyone who can even take a rational look at Buffet's portfolio. I think as auto insurance rates break it will cause insurers to start underwriting more risky policies or policies without sufficient coverage in other areas. Other insurance businesses owned by Buffet will suffer.
Investors were making a big deal about his takeover of a scottish utility company. Utilities are screwed too, I think. They are going to keep having to buy more expensive fuel while there is a huge regulation lag to get higher prices through.

In the NYTimes today is an "Editorial Observer" piece by Verlyn Klinkenborg, Letter From California: A Late-Night Seminar on Lewis Thomas, that contains within it an observation that I feel precisely summarizes everything about our predicaments:

"[T]here is no otherness to the insanity that threatens us now. The insanity is what we call normal, and it is all our own."

If it weren't for Verlyn Klinkenborg's long standing association with the editorial board of the NYTimes, they would never otherwise allow such an astute comment to see the light of day in their pages. Amazing.

That was a brilliant essay. Thanks.

"Refiners in California are in such a sweet spot that no matter how little gasoline they refine, they'll make more money," said Foundation for Taxpayer and Consumer Rights Research Director Judy Dugan. "It's up to lawmakers and regulators to return some balance to the suffering consumers, who are once again paying $50 and up to fill their minivan tanks."

Bad refiners!!! Bad bad bad!! How dare they try to make money!! What kinda system do they think this is?? Capitalism??

Also, I find it rather difficult to shed a tear for these poor saps on the West coast... Why do they insist on driving a minivan or SUV when gas is this costly??

I can't believe they said "suffering"!! Like people here are starving to death! Wow, this country really has its head up its @$$...

Is this country going to become a nanny-fascist state?

It's because we're a bunch of whiners.

When you don't have starvation to be concerned about (even though there ARE people starving in the U.S.), you whine about lesser things like paying the rent, unless that isn't a problem any more, then you whine about gas prices.

I wonder if my grandparent's generation was such a large group of whiners? Oh wait, they grew up in the Great Depression, so after that, probably little was worth whining about in comparison.

From first memory until grandparents died, then parents got old enough to not talk so much, all I ever heard was whining whining whining about the Depression. Only thing that ever happened in history of man(small footnote for WWII).

New solar panel design traps more light

The difference is in the design. Traditional solar panels are often flat and bulky. The new design features an array of nano-towers — like microscopic blades of grass — that add surface area and trap more sunlight.

Also, T. Boone Pickens is supposed to be on CNBC tonight.

I've just put the video on my blog:

Pickens Tells CNBC Oil Is Heading Higher

Oil Shale will save us! Shell will produce environmentally safe (TM) oil out of Canadian sands using a new "Patented Technique":


Peak oil is called off.

Or perhaps not.

Meta-reading of this show again the same trend: everybody knows easy oil is gone. Even the heavy and dirty conventional oil is running out too fast.

Otherwise companies wouldn't be pouring so much money into the environmentally and energywise difficult oil sands, right?

...And the Weekly Standard is led to ask:

What would the world be like if all the oil in Saudi Arabia, Iran, Venezuela, Russia, Iraq, Nigeria, and elsewhere was suddenly nearly worthless?

Well, in the neoconservatives' sick minds the aforementioned countries would likely be bombed until democratic...

Right, yeah. We're accustomed to taking what we want. Now, you are asking us to pay for it?

A childish fantasy.

Samu, you're Finnish right? Can you send me an email at jussisinnemaa(at)hotmail[dot]com please? Cheers!

The Soft Underbelly Beyond Subprime

"These numbers blow the doors off the "containment" theory. Rather than being limited to a few million mortgages, the risks of re-sets or sinking equity affect fully 75% of all households holding mortgages in the U.S."


Freddie, Fannie a 'Concern' To OFHEO
Fixes Cost Much Time and Money, Regulator Says

By David S. Hilzenrath
Washington Post Staff Writer
Wednesday, April 11, 2007; Page D01

Fannie Mae and Freddie Mac, which are trying to fix widespread weaknesses in financial controls that contributed to accounting scandals in 2004 and 2003, "remain a significant supervisory concern," a federal agency responsible for regulating them said yesterday.

The government-chartered mortgage funding companies have taken much more time and money to put their houses in order than either they or regulators expected, the Office of Federal Housing Enterprise Oversight said yesterday in an annual report to Congress.

The scandals revealed severe flaws in the systems the companies use to manage their business and generate financial reports. Although they have corrected past accounting errors, neither company is able to issue timely quarterly financial reports, a basic requirement of any company whose shares trade on the stock markets.

"They dug an extremely, extremely big hole," the director of the regulatory agency, James B. Lockhart III, said at a news conference. "They just basically ignored the infrastructure of these companies for years."

WT, I was discussing the subprime with my wife. After a hugh maturing process of running a business we realize what gets overlooked by the MSM is that these mortage companies run on thin margins and losses take a long time to recover from. The profits from several viable deals are ussed to offset the losses of a few. With overhead being pretty much fixed to many losses or too fast = bankruptcy. Sure you can downsize but this limits the remaining business activities that the losses must be spread over. I think you are right on here, this is a big concern to the economy. Ugly stuff.

Hello TODers,

This is a good example of the highly detailed graphs, simulations, and charts we need to find on KSA and specifically Ghawar. The following link is for 3-D Reservoir Characterization of the House Creek Oil Field, Powder River Basin, Wyoming:


As mentioned before: I now believe my earlier Ghawar oil saturation graphic is insufficiently detailed and hopelessly outdated. We need to find better stuff for SS, F_F, Euan, and other TODers to scrutinize.

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

Currently gasoline inventories in the USA sit at 21.3 days supply. Does anyone know at what level of days supply spot shortages would be expected to occur?

The most commonly used number for minimum operating levels that I have seen is 170 million barrels, which I guess would be about 18 days of supply at current rates of consumption. As I noted above, in the early Nineties, the industry routinely kept 27 to 30 days of supply on hand.

It looks like there are three factors at play now: higher consumption + refinery outages + somewhat weak gasoline imports.

Higher prices, at some point, will curtail demand, and presumably bring in more imports, and hopefully more refineries will be coming back online, but this is just a taste of things to come. As I have been saying for some time, IMO, we are now bidding against the EU and China, instead of regions like Africa.

An excerpt from This Week in Petroleum (EIA):

The latest weekly data showed demand continuing to grow at a strong clip, with the four weeks ending April 6 averaging 9.363 million barrels per day, or 2.5 percent higher than the same period last year. Demand for the week ending April 6, averaged 9.472 million barrels per day, a record for the month of April, far surpassing the previous weekly record for April (9.338 million barrels per day for the week ending April 9, 2004), while data for the week ending March 30 was also a record for March.

With the sharp increase in ethanol blending over the past year, gasoline demand measured in terms of energy content has not grown as fast as the volumetric measure of demand growth cited above, since ethanol has a lower energy content per unit volume than the fuel components it has displaced. But, even taking account of the change in fuel composition, recent data suggest that gasoline demand, however measured, is quite inelastic, meaning that it takes a large increase in prices to significantly affect demand.

...it takes a large increase in prices to significantly affect demand.


My coworker and I had just pulled of the 91 freeway in Riverside this afternoon and I had noticed that the gas station at that off-ramp was selling its lowest grade for 3.31 a gallon. We then stop at a red light, where two of the largest trucks mine eyes have ever beheld sat idling waiting for the green light in front of us. Big knobby tires, 6 inch lift, sport suspension, you name it these trucks had it! Light turns green and they both FLOOR it! Dual exhausts billowing emissions at my coworkers Camry, they take off like rockets. My jaw drops at the sight of such wastefulness.

Even at 3.31/gallon, this type of behavior persists. What price will we pay before we consume fossil fuels responsibly?

You can rest assured that they will likely be the first ones walking. As well as all those monstrous RVs towing Grand Cherokees back and forth across the fruited plain,searching endlessly for that fading Amurkhan Dreamworld.
"Ok Maudie wheres that next casino? Damn injuns! "

Without viable hookups and clean dumping stations?
Oh the horror,the horror!

Boomers don't get it. Wasted lives spent staring at double yellow lines out on the interstates. Sneaking onto the WalMart parking lot late at nite. Shhhhhhh.

Airdale-A Lowrider at 40+ mpg ,when I just have to. Right finger salute to the RV boomers and try to avoid their backpressure windstream.

Good Example.. but peak oil doesn't guarantee peak idiots. They persevere, severely. Don't forget that your eye will be drawn to the squeaky wheels, there, (with the big knobby tires), while some annoying idiot who's going 55 on the interstate will aggravate you too, and you may forget to consider that it's a TOD reader, and the example of one of those out there who is actually working in the other direction from those Loud Bucks..

Gingrich in the ring?

The Kerry v Gingrich debate left a wee teaser at the end that Newt was toying with exploring the possibility of tossing in his hat, TBD next Sept. Sounded like the first viable candidate from the right that actually got me a little nervous, ever since McCain has been doing these PR pratfalls worthy of W himself.
Anybody in New England who wants to connect with some Alt Energy folks might check this out..

Sustainable Energy Conference 2007
Saturday, May 12th
presented by:
The Chewonki Foundation
Wiscasset, Maine

The Chewonki Foundation will hold its 7th annual conference on sustainable energy and global warming on Saturday, May 12. Chewonki's conference has been a much anticipated springtime event for the last seven years -- drawing a motivated cadre of climate change activists, energy and efficiency innovators, and supporters of emerging new alternative technologies. The conference, open to the public by registration, is designed to offer current information on climate change science and practical workshops for people interested in exploring ways to do their energy business using sustainable, renewable energy technologies rather than unsustainable fossil fuels.


From Bloomberg:

Saudi Aramco to Cut Oil Supply to Asia a 7th Month (Update1)
By Nesa Subrahmaniyan

April 12 (Bloomberg) -- Saudi Aramco, the world's largest state oil company, will maintain a cut in crude oil supply to Asian refiners for a seventh month in May.

Saudi Aramco will reduce mainly contracted supply of its Arab Heavy crude exports, said three refinery officials who received notices and asked not to be identified because of confidentiality agreements with the Dhahran, Saudi Arabia-based oil producer. The company has lowered shipments below contract levels since November.

The supply cuts are between 9 percent and 10 percent of contracted volumes, the officials said. Saudi Aramco is lowering exports to Asian refiners in April by an average 9 percent, and the cuts this month and in May are more than the 7 percent reduction in March shipments.

Saudi Aramco's export reduction is to comply with 1.7- million-barrel-a-day production cuts agreed last year by the Organization of Petroleum Exporting Countries.

To contact the reporter on this story: Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net

Last Updated: April 11, 2007 22:37 EDT

Looks more and more like a Saudi peak to me... I thought the Saudis were having a hard time trying to get rid of their heavy sour crude, AND that they were already under their quota... smoke and mirrors, anyone?

Franc (penguinzee)

I should know this, but what reserviors does Arab Heavy come from ?

Not from North Ghawar, the recent focus of discussions (and fears).

Loaned out my copy of Twilight in the Desert, or I would flip through the index.

Aramco does seem to have problems with one of the major reserviors that produce Arab Heavy.

Best Hopes,