DrumBeat: May 5, 2007

Where gasoline is cheap - And why places like Saudi Arabia, Iran, China and Russia are making it more expensive for you.

In Saudi Arabia gasoline costs about 45 cents a gallon. In Iran it's 33 cents. Venezuelans pay less than a quarter.

These absurdly low prices are a direct result of massive government subsidies.

...But it's straining government budgets. More importantly, it's not allowing the free market to do its job. Higher prices on the open market are not leading to a drop in demand, which is keeping the cost of oil high for everyone else.

"Roughly two-thirds of new oil demand is coming from countries that have subsidized oil markets," said Christopher Ruppel, a senior geopolitical analyst with the consulting firm John S. Herold. "So demand is not going to be affected if oil goes from $60 a barrel to $80."

The Next 'Greatest Generation'

That's it . . . the Pentagon has officially smelled the coffee on peak oil.

They're not talking efficiency improvements or pilot projects anymore. Oh no.

Now they're singing a much more plaintive tune:

"We have to wake up. We are at the edge of a precipice and we have one foot over the edge. The only way to avoid going over is to move forward and move forward aggressively with initiatives to develop alternative fuels. Just cutting back won't work," said Milton R. Copulos, president of the National Defense Council Foundation and an expert on the military's energy needs.

Nigeria: Militants Halt 50,000 Bpd Oil Exports

The Nigerian National Petroleum Corporation (NNPC) has declared a force majeure on the exports of 50,000 barrel per day (bpd) from the Okono-Okpoho oilfield following Thursday's attack on the Mystras Floating Production Storage and Offloading (FPSO) vessel by armed militants in the Niger Delta.

Muscle cars come roaring back

Ford is expected to sell at least 170,000 Mustangs annually, Chevy 100,000 Camaros, and Dodge 50,000 Challengers. Hossack said: "Not huge numbers, but profitable numbers while at the same time providing consumers with something not all cars do, a grin and fun for the dollar."

How much fun? If that trio reaches the 320,000 annual sales mark, it would top by 70,000 the number of hybrids sold in the U.S. last year.

South Africa: Many dark days to come

In the wake of this week's blackout in areas east of Johannesburg, energy and construction experts have warned of darker days to come. As thousands of homes and businesses from Bedfordview to Germiston were plunged into darkness during this week's cold snap, the Ekurhuleni metro pointed fingers at Eskom.

Pakistan: Traders reject early shop closure to save electricity

Small traders rejected the government’s decision of early shop closure from May 7 and demanded alternate measures to overcome energy crisis of the country.

Shopkeepers censured the government’s decision for closing markets at 8 pm terming it a step against the small traders and threatened to stage protest until the decision is changed.

Pemex Seeks Union Concessions, Reyes Heroles Says

Petroleos Mexicanos, the third-biggest oil supplier to the U.S., will seek flexibility to move workers around in negotiations of a labor contract that expires in August, said Chief Executive Officer Jesus Reyes Heroles.

Kingdom Aims to Become No. 3 in Petrochemicals Sector

Saudi Arabia has its eyes set on becoming the No. 3 petrochemicals producer by 2015, said Minister of Petroleum and Mineral Resources Ali Al-Naimi at the Arab Economic Forum in Beirut yesterday. The Kingdom is currently ranked No. 10 in the production of petroleum derivatives.

Atomic energy has much room to play in China

In the period between 1995 and 2005, China's nuclear power generation outpaced all other forms of energy in growth, by an annual average of 15.3 percent against the average 9.5 percent for total energy.

In spite of that, the existing nine reactors in commercial operation, totaling 6,990 MW in capacity, account for only 1.6 percent of China's total power generating capacity. Nuclear power production stood at 54.3 billion KWH last year, 1.92 percent of the total electricity output.

New step for uranium trading

When the New York Mercantile Exchange launches a first-of-its-kind uranium futures contracts Sunday, it sets a new stage in the growing uranium market. But the project, a venture with Ux Consulting, is likely not to settle the rocky road uranium prices have ridden lately.

Only the Innovative Truckmakers Will Survive

I wanted to speak with Johansson because I'm looking for answers about the future of ground transportation -- personal, commercial and industrial. Volvo Group has been pouring lots of intelligence and money into developing those answers. Consider the matter of diesel fuel, used by 94 percent of the big rigs on American roads.

Generally, diesel engines are more fuel-efficient than gasoline models -- with "fuel-efficient" in this case being defined as the amount of work done per unit of fuel consumed. It is not the same thing as "fuel economy," a term that speaks more to the cost of fuel used, regardless of work-to-fuel efficiency.

Gasoline prices fuel anger

Some of the nation's drivers are trying to fight fast-rising gasoline prices by staging an Internet-driven "gas out" May 15.

Gov´t sets sights on ex-CEO

The government is investigating several former top executives of state-owned oil giant Pemex for allegedly diverting US$156.7 million in company funds, officials said Friday

John Michael Greer: Religion and peak oil: The twilight of fundamentalism

The contemporary predicament of industrial society, as I suggested in last week’s post, is among other things a religious crisis. The religion of progress, the defining faith of today’s industrial nations, staked its claim to the allegiance of the human spirit on the material benefits it offered its votaries. For the last three centuries, that offer was backed up with an astonishing expansion of wealth that left few lives in the western world unchanged, and gave the religion of progress a strength none of its rivals could easily match.

Saudis aim to boost oil reserves by 76%, gas by 40%

Saudi Arabia aims to increase its crude-oil reserves by 76% and gas reserves by 40%, as it seeks to retain its position as the world’s largest petroleum exporter this century.

Saudi Oil Minister Ali al-Naimi said the country plans to boost oil reserves by 200 billion barrels on top of the 264 billion barrels it currently holds. The kingdom intends to lift gas reserves by 100 trillion cubic feet, or TCF. Saudi Arabia’s current gas reserves stand at 250TCF, al-Naimi told a conference in Beirut on 4 May.

“The Kingdom will continue to be the largest and the most important oil producer and exporter during the 21st century, just as it has been over the past half century,” al-Naimi said.

All that oil and nowhere to go

A combination of East-West geopolitical rivalries and haggling among former Soviet republics is delaying the construction of a series of oil and gas pipelines that could help alleviate the world's energy-supply concerns.

Finding fuels as the oil runs out

John A. Bewick's column Preparing for 'peak oil' praises President Bush for his energy plan. However, this plan is years late and, in any case, made of tissue paper.

Houston's competition for the energy capital title - Dubai knocking Houston from the petroleum pedestal?

“It's the biggest bunch of baloney I’ve ever heard," Matthew Simmons said.

...“I’ve only been to Dubai one time," he said. “Houston for energy is like Hollywood is to the entertainment business. Doesn’t mean many films are made in Hollywood anymore. In fact, they’re not. But are all the decisions made in Hollywood? I think they still are.”

Alaska lawmakers indicted on bribery charges

One current and two former Alaska legislators pleaded not guilty Friday on federal charges they accepted bribes or the promise of future work to benefit an Alaska-based oil services company.

More Evidence for Cold Fusion

Almost two decades ago, Fleischmann and Pons reported excess enthalpy generation in the negatively polarized Pd/D-D2O system, which they attributed to nuclear reactions. In the months and years that followed, other manifestations of nuclear activities in this system were observed, viz. tritium and helium production and transmutation of elements. In this report, we present additional evidence, namely, the emission of highly energetic charged particles emitted from the Pd/D electrode when this system is placed in either an external electrostatic or magnetostatic field. The density of tracks registered by a CR-39 detector was found to be of a magnitude that provides undisputable evidence of their nuclear origin. The experiments were reproducible. A model based upon electron capture is proposed to explain the reaction products observed in the Pd/D-D2O system.

Progress on global warming is questioned

European Union and U.S. leaders are hailing what they say is a a big step toward bridging their sharp differences on global warming. Academics and critics of President Bush's policies, however, question whether he really gave any ground.

Climate report ignored by Chinese media

China's media largely ignored a landmark report on global warming on Saturday as Beijing sweated through an unseasonal heatwave.

The China Daily, an English-language newspaper aimed largely at foreigners, ran a front-page story on the report released in Bangkok outlining measures needed to avert potential disaster brought on by global warming.

However, China's most influential press, including the People's Daily, the mouthpiece of the ruling Communist party, overlooked it entirely.

What I spent my week doing (with pictures):

Surviving Survival Training

The oddest thing is that the simulator has given me an incredible toothache that I have now had for over 24 hours. It rotates between my upper and lower jaw. Very strange, but I think it was triggered by the pressure under water.

I think that you were underpaid last week.

Best Hopes that this was a waste of time,


Thanks for your and everyone elses input re:switching to NG and getting solar. Turns out my utility pays a (0.04) premium for green energy. Still not sure it's worth the investment yet, turns out you need a battery system for the panels to power the house during an outage (say, a hurricane), even if the sun is shining. Still thinking..

Going to switch to instant gas water heater and use hot water heater enclosure as closet, and add utility paid insulation.

Have you looked into improved windows ?

Also attic circulation, a ridge vent and soffits are the best solution.

Best Hopes,


simulator has given me an incredible toothache..

It's the difference between the simulator and a real accident. If you were alive 24 hours after a real helicopter crash in the North Sea, you wouldn't notice the toothache. :)

Not that odd. It's not uncommon for sinus trouble to present as a toothache.

Makes me think how cheap oil really is. Prepare for the worst hope for the best.

This sort of thing sometimes happens in scuba diving - essentially nitrogen bubbles in the teeth - sort of a mini-bends, I guess.

You probably weren't deep enough for long enough for this to be the explanation.

Pressure differential in your maxillary sinus on one side. See your dentist or physician for relief. Yes, very painful, indeed!

Can try vasoconstricting nose spray, e.g. Afrin or Neosynephrin. May work faster than finding a dentist or physician on a weekend!

My sincerest thanks for this advice, as well as to others who suggested it might be a sinus problem. The pain had gotten really intense, and I remembered that I did have some nose spray upstairs. Two squirts up the side with the pain, and the piercing pain went away almost instantly. It is still a little sore, but before the nose spray it felt like I was undergoing a root canal with no anesthetic.

You're more than welcome. Glad you tried it. Often the simplest solution is the best.

very interesting, will link on latoc on monday.

Just curious, what mixture were you breathing through the rebreather?

With a rebreather, you are rebreathing your own air. It is meant to be a temporary thing; not to last more than a couple of minutes at the most as you exit. Think of it as filling a plastic bag with air and placing it over your head. You could breath for a little while, which is supposed to buy you some time.

I thought rebreathers also added oxygen from a small tank as well as recycling some of the breathed out air...? Must be different types, I guess.

There are different types. For these, you take a deep breath, open a valve, and then breathe in and out of the bag through your mouthpiece. They do make them with supplemental air, but the advantage of the kind I used is that it is very compact.

Interesting indeed: Each time, when the world is talking about high or even higer oil prices as it is just happening now, either new "huge" discoveries or awsome increases in reserves are being announced:

- SA is going to increase its reserves 76%
- Kuwait announced last week the discovery of a new "huge" oilfield
- China's discovery is adding 10% of its reserves
- UAE is going to increase its oil output by 60%
- Irak shall have double the reserves previously estimated
- deep water golf of Mexico's reserves shall be just astonishing
- Iran is going to increase its oil output to 5 Bio. barrels per year as soon as 2012
- gulf of Guinea reserves are far bigger than previously thought

Adding up all these points would lead to a crude price of approx. 20 $. That's my guess.

...and joe sixpack says tax those greedy bastards...

And yet we have been warned. If we don't stop this talk about conservation, efficiency, alternative fuels, and changes in lifestyles, SA is going to just show us whose boss by continuing to restrict supply. So, let's give it up for our old buddies SA , and get those Hummers fired up this weekend and just leave them on. Even if you don't want to drive somewhere, crank them up and leave them in the garage.

We need a statement of official policy that, henceforth, announcement of reserves or potential reserves are irrelevant. Our country will pursue a policy of weaning ourselves off oil and other fossil fuels regardless of what the oil countries of the world are doing, not doing, discovering, or not discovering. Anything less is just a distraction.

Canadian Oil Sands profit up
Canadian Oil Sands profit surges on higher output

Whether anyone with easy access oil can sustain the production for more than a few years or not isn't important, it's about time for OPEC to kill the Oil Sands and the deep offshore projects with $20 oil.


Yesterday's close:

Natural Gas (Henry Hub Spot) = $7.82/MMBtu
Crude Oil (WTI Cushing Spot) = $10.59/MMBtu
Natural gas about 74% of the price of crude.

The greater the price differential between crude and natural gas, the more profitable the tar sand project is. But January, 2008 futures tell a somewhat different story:

Jan. Natural Gas (NYMEX) = $9.981/MMBtu
Jan. Crude Oil (NYMEX) = $11.69/MMBtu
Natural gas about 85% of the price of crude. I think profitability will suffer if the futures hold.

I wonder if oil refineries use natural gas for their energy source?

Since natural gas input is about 1/5 of the btu in the product for Syncrude, they will be more profitable in January than they are now. You may be right for other producers, but you have to look at how much gas they use versus how much crude they produce.

It ain't the size of the bucket that matters, its the size of the leak. At this point in the oil game claims about reserve size has little to do with extraction rates. Peak Oil is all about how fast we can suck it out of the ground. The easy oil is gone. The cost of developing all these new reserve claims leads me to believe crude prices will rise to $120 bbl.
Check back in 2017 to see if Brutus11 is right or I am right.

The easy oil is gone.

I would think that is correct, but I don't think it matters. As long as it can be pumped for less than the recent expensive projects can be profitable, the market will get flooded and the price will drop. We need one more 1982 style market flooding and price dive to get the U.S. commuter to buy a new SUV, get China driving and mostly to bankrupt the Tar Sands and similar high cost projects. Once that is done, then the over-production will cause a real shortage and $120/bbl is going to be a fond memory.

Anyone want to buy some prime farmland in Canada? On the edge of the parkland with a foot of dark brown topsoil and plenty of fresh water... check back in 2047 and see if it was a good investment. :)

The trouble is, these are not reported within the context of the longer-term trend. One is given the impression that there have never been any new dicoveries or reserve increases for decades.

Grasping at straws.

But, discoveries DO matter - the Chinese discovery (700m metric tonnes of Proven+Probable reserves (excluding Possible and associated gas reserves) is, what, about 5 billion bbls. Kuwait's discovery, well, we don't seem to have any numbers, but if you assume that Kuwait's current reserves are 50 billion bbls, then the discovery would have to be on the order of 5-10 billion bbls to be 'significant' (in terms of their existing reserves) as they claim. Does this mean that discoveries this year are going to exceed the 8 billion bbls/yr trend they've shown recently? Does anyone know whether a number has been published for 2006 discoveries or when that is likely to happen?

The Iraq, Mexico deep water stuff is probably B.S., for reasons that have been discussed elsewhere. The S.A. claim? God knows.

But, discoveries DO matter - the Chinese discovery (700m metric tonnes of Proven+Probable reserves (excluding Possible and associated gas reserves) is, what, about 5 billion bbls. Kuwait's discovery, well, we don't seem to have any numbers, but if you assume that Kuwait's current reserves are 50 billion bbls, then the discovery would have to be on the order of 5-10 billion bbls to be 'significant' (in terms of their existing reserves) as they claim. Does this mean that discoveries this year are going to exceed the 8 billion bbls/yr trend they've shown recently? Does anyone know whether a number has been published for 2006 discoveries or when that is likely to happen?

The Iraq, Mexico deep water stuff is probably B.S., for reasons that have been discussed elsewhere. The S.A. claim? God knows.

Allah knows !

Off to JazzFest (drier today :-)


the Chinese discovery (700m metric tonnes of Proven+Probable reserves (excluding Possible and associated gas reserves) is, what, about 5 billion bbls

think again

Energy consultant Andrew Hayman of IHS said that under Western standards, Jidong Nanpu would probably have nearer to 650 million barrels of commercially recoverable reserves.

BBC Report. Still a giant field, but a lot different when you look at what is recoverable. This is similar to the stories that Jack was greater than Prudhoe Bay, it just does not work out that way.

Energy consultant Andrew Hayman of IHS said that under Western standards, Jidong Nanpu would probably have nearer to 650 million barrels of commercially recoverable reserves.

Well, you have to look at the positive side. The energy equivalent of 650 million barrels of oil in this field--which will take decades to fully deplete--would take care of total world fossil fuel + nuclear energy consumption for about 72 hours.

where did your 5 gb figure come from ? some articles state that recoverable oil is 650-850 million barrels. and was this timed to coincide with the annual pilgramage to the oricle in omaha?

SA increasing its reserves by 76% is a great idea! I'll bet there are a lot of red faces here since we didn't think of it first.

Indeed, I think I'll increase my reserves too. You know, every time a child stops believing, a fairy dies.

It goes along the lines that in my billfold right now I have a resource, I will increase it by 76%, I now have 35 dollars. Yet the bill still looks like a 20. I'll just be able to go buy 35 dollars worth of items with it. UM, Wait a minute have these guys been sniffing model air plane glue again? Or are they credit card companies that promise me $3,000 dollars of free money if I get their card? Oh wait yet again, They believe that money grows on the shingles of your house, I forgot.

Just everyone remember 1985 when they grew their Oil fields like this. More paper money for the coffers.

i wonder if the saudis dont believe that they are "endowed" with unlimited oil.
not at all unlike some amerikuns who think that we are "endowed" with a right to cheap energy.

Didn't You See? Last Week Saudi Arabia Claimed Saturn's Moon Titan and all the Hydrocarbon resources thereon. The reserves are there, and will be delivered just as soon as they figure out how.

An extra 200 billion barrels. Now where have I heard that before?

I know, 2005:

Gaining credibility would be very easy. Just show us where another Ghawar or two are hiding out; missed all this time.

Ghawar's not dead, it's just resting. It's pining for the fjords.

What ever happened to JD? His blog has been dead since last summer. I miss him, and his optimistic out-look. I think he was hunting rainbows and got lost.

Lisa Margonelli, Author,
"Oil On the Brain: Adventures From the Pump to the Pipeline"

is on over at Puplava's financial sense


Ford is expected to sell at least 170,000 Mustangs annually, Chevy 100,000 Camaros, and Dodge 50,000 Challengers.

Buyers should be sure to get the convertable versions. Parked on the front lawn, top down, passenger compartment filled with topsoil, they should make a great container for growing vegetables!

Nice photos Robert. The toothache sounds like it could be sinusitus. I've had it and it can be quite painfull.

It's in my jaw, though. The pain is running right along my jawbone, but occasionally it moves to the top teeth. Feels just like a horrendous toothache. I hope it doesn't last too much longer.

My sinus problems tend to manifest themselves as extremely tight neck and shoulder muscles (causing a dull headache), sometimes becoming a full blown migraine. Your problem is very likely either sinus or ear related.

The pressure was pretty bad, and my nose filled up with water

Suggest an anti-inflammatory like ibuprofen. Also it may be actuated from a preexisting condition, have you had any previous signs of sinus infections or trauma? You might try douching with a mild warm salt water solution (see drug store for apparatus) or inhalation of Eucalyptus leaves in boiling water along with warm pads. If it continues get a scan.

douching ?


A jet or current of water, sometimes with a dissolved medicating or cleansing agent, applied to a body part, organ, or cavity for medicinal or hygienic purposes.

I assume he was talking about nasal irrigation. They have these special little pots that let you pour water through your nose. I've never done it, but friends of mine who have sinus problems swear it's a big help.

Even if one has no sinus problems, I think it a good idea for prevention of same. Much unusual stuff in the air these days and guess where it collects. An ENT surgeon who I saw for an ear infection douches daily.

Addendum: while on subject of douching; 50/50 % water vinegar solution in the ear-hole for swimmers ear. Try this before using prescription drugs. Cheap, effective and easy on the eardrum.

A doctor recommended to me 50% Isopropyl alcohol 50% vinegar mixture for ears. The alcohol works to dry it out while the vinegar alters the pH.

Thanks, I'll try that.

how is your heart? That sometimes manifests as jaw pain after stress. Best wishes, but advise seeing doctor. pilot

dude, seriously. Get to a doc if it doesn't clear up or get better. quick.

how is your heart? That sometimes manifests as jaw pain after stress. Best wishes, but advise seeing doctor. pilot

My normal resting heart rate is around 48 beats per minute. A doctor told me once that my heart could last me 150 years. And, I wasn't really that stressed during the exercise. The only time I ever felt a little panicky was when I first put the rebreather on outside the pool. I felt like I couldn't breathe, and thought I would throw up. I thought "No way am I going to be able to do this." But after putting it in several times and practicing in the pool a bit, I was very calm during the exercise itself.

As I mentioned above, I took the advice about nose spray, and got near instant relief from the pain. I had no idea that sinus problems could cause this sort of pain, though.

The mandibular nerve, serving the teeth in the lower jaw, is a branch of the same nerve trunk that has a branch to the upper molars, and runs along the floor of the maxillary sinus. Pressure in the Maxillary sinus will cause pain to radiate through both the upper and lower jaws and teeth on the involved side. Vasoconstricting nose drops will possibly open the orifice that drains the sinus, thus allowing the pressure to equalize. If successful, the pain will disappear quickly.

I think you need a dentist. The last time I had something like that I needed an emergency root canal followed by a titanium post and a cap. Don't delay, especially if you have had any bleeding at all. Good luck.

Re; gasoline price subsidies in oil exporting countries

Prices as low as $.25 a gallon don't have to be the result of a subsidy. The costs of production per barrel in many places are still well under ten dollars. I'm not sure what the actual figure is in SA but let's say five dollars - which means $.11 a gallon of light sweet. Add refining and you are merely selling gasoline at cost.

Thus what we have is the foregoing of profit, which can be construed as a subsidy in a backwards way. Why should a government owned entity like Aramco , or any other similar entity, tax its citizens on their oil consumption? Well, if you haven't for a half century, the political backlash would be considerable, if unjustified. The amount of money made by exploiting the current huge differential between existing production costs and export prices makes the taxation of local consumption somewhat irrelevant unless the tax is multiples rather than percentages.

Similar constraints on gasoline taxes exist in the US. Back when oil came out of Texas for a buck fifty, we had two bit gas too. Some places still do. Current world prices have everything to do with a bidding war and the future cost of production rather than any old fossilized costs of forty year old holes.

That said, it is quite a remarkable gulf, so to speak, between a quarter and seven dollars in parts of Europe. This differential pretty much sums up the difference between 1957 and 2007. Hang on to your hats.

Hello Petrosauraus,

The oil exporters' mistake of not practising Peakoil Outreach [which includes voluntary birth controls], then selling energy locally at no-profit rates will hurt their long run viability. If global market rates are locally installed with the profit entirely applied to a local biosolar shift: these exporters will be much better positioned for the postPeak future and will be able to export FFs for an extended period. This will allow further economic leverage to maximize the needed change.

Imagine if Chavez in Venezuela understood and applied these concepts to his country. The country, being just north of the equator, should be striving to become a PV and wind biosolar paradise with maximized mass-transit and relocalized permaculture. Maintaining a network of railbeds is much cheaper than maintaining a network of asphalt and concrete roadbeds, especially if flooding rains are common. Discrete minimal, but highly resilient electrical grids are much cheaper to maintain than a national FF-powered grid.

The ancient detritovore tendency for prefering campfires is the old paradigm, biosolar is the new. An ICE is just a glorified, high tech, under the hood campfire. A FF-powered lightbulb, computer, or home appliance is just another campfire tool whose days are numbered. As the increasing levels of Olduvai blackouts demonstrate: we need to relearn the joy of nightly stargazing instead of building huge FF bonfires to ritualistically dance around and gaze into the flaming glare.

If Chavez has the political power: he should be building Eco-Tech housing, mandating solar water heating, humanure recycling, fresh water optimization, and non-FF organic gardening. IMO, he should only be exchanging FFs for biosolar real assets such as wheelbarrows, bicycles, steel rails and railcars, PV panels, wind-turbines, etc. The importation of personal cars and other non-essential luxury 'wants' should be taxed very highly; the emphasis should be towards 'biosolar needs' to rapidify the biosolar shift.

Protecting people against FF-decline will not be enough; Chavez also needs to insure that the area's biodiversity is maximized too for the coming bottleneck squeeze. A sustainable lifeboat should be valued more greatly than a barren landscape. He should be structuring contracts that welcome the IOCs, but insure no pollution and clear cleanup policies once an oilfield is exhausted; the full bio-restoration of the habitat to remaximize biodiversity.

In short: Chavez should let the FF-campfires go profitably elsewhere to future maximize the daily sunlight harvesting to power nightly biosolar-campfires. A thoughtful FF-decline is far better than maximizing natural and human-powered blowback forces. Time will tell.

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

Venezuela has the 10.2 GW Guri dam (basically tied with Itapu behind 3 Gorges for 2nd largest dam in the world, it is 3rd in MWh production)


Chavez is completing the smaller 2.2 GW Caruchi Hydroelectric plant and just started on the 2.1 GW Tocoma Hydroelectric Power Plant.



This should make a total of 17 GW from the Caroni River Hydroelectric Development Program.

Chavez is also heavily expanding rail; Urban as well as intercity (pre-existing plans that he is speeding up).

For the capital (where most but not all new construction has been focused).


All projects seem to have a completion date within 9 months of the every six year election. One new addition to the subway opened a few months before the election with a couple of stations incomplete (they were bypassed until complete, an innovative approach that I approve of).

Chavez, whatever his other faults & virtues, will leave a legacy in those large 2 GW dams and rail systems that will still be quite useful a century from now.

Best Hopes for Long-lived sustainable infrastructure,


Hello AlanfromBigEasy,

Thxs for the Venezuela update and links. Meanwhile, here in my Asphalt Wonderland, we still seek to pave the desert ASAP, and waste precious water in phenomenal quantities as our drought continues:



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

I agree - its not a subsidy if the sale price is above the production costs.

That article is amazingly narrow-minded. It's feels like "HOW dare they consume 'our' oil on the cheap?!"

It's very close to like complaining when your neighbor wins the lottery and shares with his family, but not you. Poor baby.

Oil export profits are subsidizing entire economies. It's senseless to talk about "free market" for those lucky enough to have money falling from the sky.

I admit that if I was a leader in an exporting country, I'd be more careful if I could. It's not even about conservation, but investing in the future, like Bob says. :)

I agree. There is something wrong with market economics.

IE the market does not work.

And just to make sure there is no misunderstanding about what we are talking about here.

the market does not work.

per capita consumption in russia is less than the US so the solution of equitable living standards is for russia to sell their gas to its own population at US prices?

I find it frightening how quick this recrimination that these other nations are not selling there oil cheap enough. The totally irrational stream of thought represented by this article is beyond the stupid.

arguing about how the global market should be deregulated (in some way) as a solution to finite resource distribution is cataclysmically insane.

at the end of the day what has the price got to do with anything. The more you look at this situation the more distorted it reveals itself to be.

the mismatch in prices created by national boundaries in itself is an indication of market failure to address the reality of human political organization.

"Its their fault there is not enough oil in the ground"

because when you strip it back that is what this train of thought ultimately implies.


I find it frightening how quick this recrimination that these other nations are not selling there oil cheap enough.

The griping is silly, but the local subsidy is ultimately self-defeating even for the exporters:

  • They are losing the benefits of the foregone exports (replacing a 15 MPG vehicle driven 15,000 miles a year with a 40 MPG vehicle saves 625 gallons/year; at $2/gallon subsidy, it would suffice to pay vehicle owners $100/month each and they'd still have the vehicle after it was paid off).
  • By building an infrastructure based on cheap, abundant fuel, the local economy is set up for large dislocations when conditions change.  See the US and Indonesia for examples.

In the end, subsidizing fuel benefits no one.

So we complain when a sovereign country decides about its own economic plans, especially when they don't agree with our own economic plans. Chavez and the other leaders of oil producing countries have the right to make those social policy choices for their own countries. Here in the USA we have made a major policy decision to feed corn to cars - and we are subsidising that. So if you want cheap gas for your SUV move to SA or Venezuela. See if you can get a "green card" for those places.

Yeah, but when there are countries that have such cheap prices, there is a huge incentive to smuggle gas out of the country to other parts of the world. As the price differential becomes even greater, so does the temptation to smuggle.

Wouldn't it make more sense to sell the oil at market prices outside the country and then subsidize the poor directly? The poor can then decide whether they want to use their share of the windfall to purchase direct energy.

That's exactly why so many of us, from T. Boone Pickens down to nobodies like me, think the solution to AGW is a carbon tax with a flat per-taxpayer rebate.  This creates a flat incentive structure with no distortions and subsidizes the needs of those near the bottom of the income scale directly.

Imagine. You are at a gas station filling up your Prius at $5.00 per gallon. The guy next to you, grimacing, is filling up his Escalade. You turn to him and say, "hey buddy, I've got some extra gas coupons. I've got a special deal for you, today only."

I think that while a carbon tax would be a step forward, that a cap and trade system for consumpers would be better. We could do both of course, but the nice thing about cap and trade is that frugal consumers could benefit throughout the year and not just at tax time. Of course, they could also give rebates monthly, but that would be a bit cumbersome.

Imagine:  you get a weekly deductible on your payroll taxes, so your take-home is bigger.  You have a choice between spending it on fuel or on something else.

Anything involving coupons will have a great deal of overhead and fraud.  The allocation step of cap-and-trade is just one more way for politicians to grant favors.  Last, the market value of savings will fall if the technology gets "too far" ahead of the scheduled reductions; this can kill investment.  A per-ton tax and per-taxpayer rebate has none of these problems.

A rebate scheme also needs to take care of people who don't pay payroll taxes. Actually, a weekly deductible might be too frequent. People might start seeing that deductible as something they can immediately plow back into gas purchases. Frankly, I am not sure how effective this rebate scheme would be . Do we have any historical data on a similar scheme to gauge behavior? I am not rejecting it outright but I am not sure we really understand the long term impact.

I do not mean to insist on coupons. We could have something like a credit card which can be filled up periodically with gas credits which could in turn be tradeable on an electronic exchange. Each person could have an electronic account, just like a stock market account to assist him or her in the trades.

In any event, we can have both taxes and cap and trade.

Regardless of what system we use, the politicians can screw it up. With respect to taxes, we really do not have a very good handle of how high those taxes need to be. We would be putting taxes on gasoline with the hope that they would significant reduce consumption. But what politician is going to be willing to continue to increase those taxes until we achieve the desired result. With taxes, the desire d result is just a goal, a wish. We will constantly have to be revisiting this, determining what the new levels are, and then going through the politically painful process of ratcheting up the tax.

If we end up with a tax, it need to be announced beforehand that we will raise the tax by X amount until such a such a reduction in carbon or gasoline consumption is reached. Otherwise, it will fail as soon as we have a recession.

But really, of course, we are debating something that ain't gonna happen either under our current system which is driven by the basic attitudes of the American people. We can't even get CAFE standards that come close to actually solving the problem we have. As it is, we might readdress CAFE in ten years by which time it will be too late to do anything about global warming.

We are back to the basic conundrum. Anything that would actually fix the problem is politically unacceptable. Anything that is politically acceptable will not fix the problem. I consider this the first rule of politics.

What did certain political jurisdictions like Georgia due as a response to Katrina? They actually lowered gas taxes. But they will build the roads, anyway, won't they.

Having said all that and assuming gas taxes with rebates would be the way to go, I still feel we need to aim towards a minimum of ten dollar per gallon gas within no more than three years.

'Saudi Oil Minister Ali al-Naimi said the country plans to boost oil reserves by 200 billion barrels on top of the 264 billion barrels it currently holds.'

I am impressed - previously, only the USGS was able to pull that trick off convincingly, when a B-movie actor and former GE spokesman was taking regular naps in the White House, regaining his strength while playing the role of his life.

Of course, when making up numbers, why not wish for a truly fine Arabian horse too? - no ponies for the Saudi royal family, of course.

This question has been asked before, what is the relationship of the the declining U.S. dollar and the price of oil?

I think "Crude Impact" is a worthwhile documentary, though the pending doom soudtrack gets kind of grating.

I think you all should get on over to Chimps website (he really needs the $) and buy it, show it to all your f&fs.


I wouldn't say I "really need the money." I've got the 6 months in savings and am not sweating next month's rent.

But any and all business is appreciated. I have my eye on a tropical farmlet and am not even in the ballpark of being able to afford it.

What's the ballpark and how many people could it comfortably sustain?

Robert, I had the same questions, but your sinuses are fairly close to you upper roots in your teeth. Ibuprofen can help. Saline spray too. Also curiously I had a fairly intensive root canal performed some years ago and I haven't had any pain since. If it becomes a problem, consider seeing a dentist and it may be that you have some sensitive roots. Hope that helps and I certainly feel your pain.

I had a root canal as well about 4 years ago, and this was just the kind of pain I felt before having it done. It just came on so suddenly. After the upside down exercise in the simulator without a rebreather (you just held your breath and got out), as soon as I popped up to the surface I noticed the headache and toothache. A couple of other people mentioned that they had gotten sudden headaches.

I have ibuprofen, but I also have codeine left over from a recent bout with a kidney stone. Some, I am trying to decide whether to drink 4 beers, or have 1 codeine. Tough choice.

One good thing about the UK:

Codeine is an over-the-counter drug!

And health care is free.

I've never tried it, but NHS run a 24 hour help line on 0845 4647, you at least get to talk to a nurse.

And health care is free.

Only if you're a citizen (or legal resident?). A friend of mine was vacationing in the UK, and severely sprained her ankle on a steep flight of stairs. They wouldn't treat her until she paid, and they wouldn't take credit cards.

Go see a proper Scottish doctor. If your eustachian tube becomes infected and the infection spreads to your inner ear, you could face hearing loss in that ear.

I see more and more people complaining about gas prices. The general public is blaming oil companies (again), and hoping for the government to step in and stop the "gouging".

Some people talk about how important "their" profession is to the economy, and how they deserve special dispensation (i.e. cheaper fuel).

If you scratch the surface, and try and inform them, the sense I get is that the people who are bitching are terrified. They are stretched financially, and looking for a quick fix.

I try and suggest that changes in their lives are required, but a lot of folks don't want to hear about it. There is always a reason why they cannot change.

This must have been what it was like in Salem when they started burning witches.

Blaming the oil companies is really pathetic. Some guy at work was blaming them for the shortage. I told him you could tax 100% of their profits and it still wouldn't help the price of gas. Hobbes's war of all against all is coming, once people find out there isn't going to be enough oil for everybody.

Well, Exxon isn't doing themselves a favor by claiming an ever-increasing supply of oil for the next 25 years, a $400million exit strategy for their CEO, $billion stock buyback schemes, etc.

Their BS is going to come back to bite them in the form of windfall profits tax.

Frankly given the mindset of such people. i don't really think the ceo's care as long as they get their cash at the end. in this country they can always buy themselves out of legal trouble or just move to one of their offices in a country that has no extradition treaty to the u.s.
that is of course if the fascist like government in the us gets off it's rear to prosecute them.

I think you've hit the nail on the head.

I am always puzzled by this idea that the oil companies are cheating us, and they should be taxed or punished and then everything would be OK.

The reason that I'm puzzled by this idea, is that I have long since understood that the oil companies are not cheating, but lying to us. They keep telling us that there are limitless supplies of oil, which is manifestly BS.

This is where the cognitive dissonance creeps in. Ordinary people have not yet understood that the high prices are caused by scarcity -- because they are still believing the message that there is no scarcity.

That is the one reason I don't even blink when I read the e.mails I got the other day about the May 15th no-buy gas. I tried to tell my wife it would not matter unless they did not buy gas for a whole month or some longer than a day length of time, because they still have to gas up and go, not buying it on one day means nothing, its just feel good fluff.

Then I keep seeing the parking lot at the Grocery store where my wife works fill with SUV's that have not one bit of off road dirt on them, drive around and around hunting for parking spaces within easy walk of the doors.

Bink, Bink, the empty well blues are tapping on the dashboard as we speak.

home depot gave their ex ceo a $ 200million exit plan and people are still "investing" in this shit ???

Those painting the Oil companies as innocent victims in all of this are just as pathetic if not more, because many of the oil company defenders are profiting off of the situation.

It takes two to tango, and the economic facts are that as gas supplies become smaller and smaller, a natural monopoly forms and the market breaks down.

You can't have a free market if the supply or demand side is overly constrained.

The only ethical and just response to such a situation is to regulate that market.

Its too bad that none of you will ever understand this as anything but your precious oil companies being victimized.

If the oil industry failed to build enough refinery capacity in past years, maybe that's because it knew something. If the oil industry failed to do enough exploration and development in recent years, maybe that's because it knew something. Remember Cheney's 1999 speech. He knew then that the corporations didn't control enough of the world's oil reserves to deal with rising demand. Oil companies set this trap in advance so that they could plead innocence in later years. Then they could throw their hands up in the air and say "Well, nothing for it but to invade!"

Those painting the Oil companies as innocent victims...

I don't say that oil companies are innocent victims, but Chavez did seize their property (I am not talking about the oil), some of which isn't even paid for. Because many people in this country are shareholders (most probably don't even know it, as they hold shares through pension funds, 401Ks, etc.), then he is stealing from a lot of us.

If you are talking about being innocent victims of the gasoline crunch, I don't say that either. If they had forecast that prices would be where they are now, they would have invested more into refining over recent years (but to dispel another myth, refining capacity has increased by 2 million bpd in the past 10 years).

The only ethical and just response to such a situation is to regulate that market.

I am not opposed to regulation. I am not even opposed to nationalization. So, let's talk through your ideas, and see if we can figure out what might result. What I would like to do is talk through 1). How your proposals would be implemented? and 2). What would be the likely fallout?

I am done for the night, but I will try to respond to your ideas tomorrow (but others will probably get to them first).

As a general FYI, I have had some pretty juicy exchanges with Vinod Khosla today. He wrote to me earlier, upset by this essay:

Vinod Khosla and The Truth

He gave me an "off the record" response, and I responded back and was very frank. He responded again in much more depth (covering several different topics), and I have asked if he minds if I post his response. If he says "Yes", I will publish here as an essay. I think it will generate a lot of discussion.

As part of the regulation process, I suggest that we start with repealing the Thermodynamics Laws, so that we can recycle gasoline.

Congress should then decree that oil fields shall not decline.

Hey Saudi Arabia already does it. Congress does it on other things like the national debt. It'll be easy the paper work is already in the pipeline.

>As part of the regulation process, I suggest that we start with repealing the Thermodynamics Laws, so that we can recycle gasoline.

Congress already did it about a year ago. Its called the Ethanol bill.

I was responding to those that seem to constantly rail against oil consumers as "joe six-pack" or other various blanket slurs against oil consumers. Especially since on the whole it seems that they want to excuse themselves, because they are more educated on peak oil, and not using it as wastefully.

(not conserving nearly as well as those in the third world though, so I'm not quite sure where their moral authority comes from since they are pobably still in the top 25% of consumers on a worldwide per capita basis even with their extensive conservation)

Needless to say, I'm not a big fan of those that think they can make gross generalizations and cast prejudice-based aspersions, as has become vogue on this forum.

The Chavez thing is bad for the oil companies, no question. I do not defend the actions of Venezuela, however I do not condemn them either. On a matter of principle the venezuelans probably should give western oil companies some compensation for property that they are seizing. Those oil companies made plenty of money off of venezuelan oil though, and Venezuela may be able to argue the case very well that the oil company-friendly contracts they entered into in the past serve as plenty of compensation for the investments of foreign companies over the years. I haven't actually heard any arguments from Venezuelan sources to make that evaluation for myself though. I suspect very few others on this board have been exposed to the Venezuelan position on the issue either. As a result I withold judgement, because I don't believe that I have enough evidence to make a judgement.

My proposal for regulation is simply one that re-establishes the market balance. That is going to inevitably involve either price controls to keep the prices in line with what the would be if supply were much higher (something obviously not popular with anybody that wants to conserve oil). The alternative is going to have to be a major tax that allows the prices to rise up in line with what supply scarcity would entail, but forces oil company revenues to remain in line with what they would be if the supply were abundant again.

That second option is one that I advocate, and obviously would involve some major disincentives for oil companies to do anything but let the oil infrastructure to waste away. That is why part of the regulation would have to involve public/private partnerships that would force improvements to the infrastructure as neccesary. This would be something in line with the way things were done with utilities up until de-regulation. The rest of the tax revenues would be directed towards helping the populous deal with the oil shortage by converting to less oil intensive lives (moving in closer to cities, rebuilding the rail system and other electrified transport) Then the remainder would start going towards increasing the amount of research done to bring more energy alternatives online. (something that would disproportionately benefit oil companies since they also happen to be the largest investers in alternatives as well)

The Chavez thing is bad for the oil companies, no question.

It is bad for a lot more than the oil companies. That is the point I keep trying to make.

Those oil companies made plenty of money off of venezuelan oil though...

I would not be so sure about that. They have sunk billions into Venezuela. I don't know that all have even recouped their heavy oil investments.

The alternative is going to have to be a major tax that allows the prices to rise up in line with what supply scarcity would entail

This is the only one that can work. Either you have price controls, along with rations, or you raise the price (either by taxation, or the market does it as it is doing now).

Incidentally (not directed at you), regarding my mention of Vinod Khosla, he declined permission to post our exchange. I am still working with him to get permission for an edited version, but it won't be nearly as juicy.

You own your words, so you can post those and paraphrase him enough to avoid any difficulties.  If he'd rather be read in his own words than your paraphrase, he can always give you permission to post.

I know, I am just trying to be extra courteous. He may be needed as an ally some day. But I did tear into him a bit in my reply. I told him that on many points he is “incredibly biased and unfair”, and very careless with his “facts.” I also reminded him that his constant jetting around the country to vilify the oil industry is made possible because of the jet fuel provided by the oil industry.

He also told me that cellulosic is ahead of schedule, and about to be producing ethanol for less than the cost of grain ethanol. I told him that I think he has surrounded himself with people who are telling him what he wants to hear, and my prediction is that in 5 years there will not be a single 50 million gallon per year cellulosic ethanol plant in this country. For reference, that's the size of an average corn ethanol plant. (There may be some smaller plants 5 years from now, still bleeding red ink).

But I am still negotiating for his blessing on publishing some of the exchange.

For what it's worth (and may be worth what you paid for it) I think you're doing the right thing in not publishing any of your conversation until he gives the OK. Though personally I'd like to see it, you can imagine that if you started just posting everything he said he would become Extremely Cautious about what he said to you and perhaps say nothing at all. Losing the open line with him would be a bigger loss than the gain from sharing any single conversation.

How come every time you Vinod Khosla people talk about him you sound like you are talking about:


Are you a cult or something?

(Not You, Robert, I was adressing the Khosla people.)

(Not You, Robert, I was adressing the Khosla people.)

But there are no "Khosla people" on this forum as far as we know. Most are highly skeptical of ethanol as a solution to peak oil. So who exactly are you addressing? And what has Khosla in common with with Mahesh Yogi other than the fact that they are both of Indian origin? Does Khosla's Indian origin bother you?

I think Chavez is expropriating the assets rather than stealing them. Just the same way my local city does when it needs a piece of property. Of course, you always complain about the process and the unfair price - and usually quite loudly. But since Chavez is a socialist, nay probably even a coummunist, then we must call it stealing and we must insult him for good measure too. But that doesn't change the fact that the oil is an asset of the people of Venezuala, and that the Venezualan government will decide how best to manage the resource for their country. Now isn't that how it works here in the USA? Or did I forget maybe that Exxon and Chevron really do have their own priorities and that those priorities don't necessarily coincide with those of the USA or its citizens or even SUV drivers.

But that doesn't change the fact that the oil is an asset of the people of Venezuala, and that the Venezualan government will decide how best to manage the resource for their country.

It isn't the oil that's the issue. Yes, they have a right to manage their oil as they see fit. But they have no more of a right to those assets than the U.S. government would have to the assets of Venezuelan-owned Citgo.

Well it doesn't matter who we blame, we're still going to run out of oil and the price is still going to go sky high. Even if you had the government run the oil companies, we'd still face high prices because anything less than a high price and more people would be able to afford the oil and there wouldn't be enough.

isnt that what eddie chiles told us back in the '70's : "if you dont have an oil well get one"

eddie chiles also had a lot to say about what made him mad today. it was usually something about the liberals in congress blah blah blah

If you scratch the surface, and try and inform them, the sense I get is that the people who are bitching are terrified. They are stretched financially, and looking for a quick fix.

Just got back from a local art/music festival. We always stop by a vendor who sells some really nice custom artistic jewelry. I usually buy some stuff for my wife. In any case, the vendor said that sales so far this year had been really slow for everyone on the art/music festival circuit, at least in the Southwest. Sales have been so slow that she was really short on cash, so I went to an ATM and paid for some stuff with cash instead of a credit card.

IMO, it's another sign of the ongoing wrenching change in the US economy--from an economy focused on meeting wants to an economy focused on meeting needs. When the majority of Americans live off the discretionary income of other Americans, a lot of jobs are going to be adversely affected.

CTSAGTTTNSOTE--"Cut thy spending and get thee to the non-discretionary side of the economy."

My brother-in-law is an abstract artist and he's doing a bang up business this year. His customers, however, are wealthly types... they are doing better than ever. I think people who cater to the upper class are still doing well, but people who sell non-essentials to us working class stiffs are probably struggling.

i don't know if it's a down turn in sales or not. but for the company i work for. a mail order prescription company, the orders coming in was a little bit on the un-usual side of light. the box and large item packing area of the warehouse was basically idle for long periods of the day.

From the Housing Bubble Blog:

One asked, “How can you tell a recession is not already here, but just unreported?”

A reply, “Exactly. I work at the ground level of the economy these days, at a nonprofit that assists those with low to moderate incomes. This month alone my clients have included an aerospace engineer, an orthodontist, several software engineers, and a hydrologist, not to mention countless realtors, two mortgage loan officers, two furniture sales people–both of whom were earning in excess of $100K before the housing bust; and a new car salesman.”

“All are either newly unemployed or marginally employed (significantly reduced income due to lack of sales). They all report that they are currently living off of their savings. I’d say that the recession is here.”

To which was said, “At least your clientele apparently had enough sense to save some money for the lean times. It bodes ill for the rest of the national economy that the national saving rate has recently remained in negative territory for the longest period since the 1930s.”

A 500 square foot rented apartment, along a mass transit line, with zero or minimal auto use, looks more attractive all the time. Sorry to be sexist, but for us married types, the problem seems to be talking our wives into this living arrangement.

From Urban Survival:
May 4, 2007
Lean and Mean: 150,000 U.S. layoffs for IBM?

I know this couple through my third wife, who live at an extended stay motel. 520 bucks gets you a bed, TV, Shower, AC and heat, They don't have a car, and have a child. The poor and homeless are more intense this year than last.

My parent's house is under 1,000 square feet and 4 of live here. WE have the internet, but not cable, Phones and cell phones, and 3 pets all filled into something small and paid in full.

What is going to get bad is when the savings run out and they still can't find a job or have to work for 1/5 what they were used to working for. That is when they and everyone else start screaming that the job market is flush and the 24 hour fast food joints wonder about reducing staff because the lack of business.

Again there will be some regions of the country that suffer none of the ills that other regions suffer from. Just because of where their funding comes from. I can think of the expansion that is going on in places like Huntsville Alabama, what with 3,000 new Army jobs and up to 3,000 new NASA or related jobs moving to the area.

I know this couple through my third wife, who live at an extended stay motel. 520 bucks gets you a bed, TV, Shower, AC and heat, They don't have a car, and have a child. The poor and homeless are more intense this year than last.

-- I absolutely have noticed this. I live and run a used media business in Harlem. Many of the people here do not even drive but something is squeezing them. Rent,etc. Could it even be hidden inflation?? (Many men here live off of govt money which trickles through the system). This years rent increase was relatively large. Mine goes up this month about 60 bucks (rises a certain amount every 2 years. Typical was 4-5%,this yera was 7% i think)) It is palpable.


For folks without a car, I would guess that heat in the winter and food costs are what are squeezing them.

yeah heat is usually included along w/ water ,both hot & cold. Electric & food would be important though. There was a major transit incresase to $2/ride a few years ago, but that has not gone up lately.

"Could it even be hidden inflation??"

It's the way the govt figures inflation. The "core rate" doesn't include energy or food costs and the "real rate" is based on a system of substitutions. If the price of beef is high, they substitute the price of pork, chicken,etc. (whichever is lowest at the time)on the assumption that the consumer will, if pinched, substitute the lower costing meat and so forth for each category of food.

I was reading an article on one of the financial sites about this and they said the real rate of inflation is more like 8-11% rather than 4.whatever %.

So the people you are talking about are probably feeling the the effects of the real inflation rate instead of the "dummy" inflation that the govt blathers on about.

They do similar neat little tricks with the unenmplyment figures.

As Mark Twain said, "There are lies, damn lies and statistics."


Now LEAN as it was originally designed was a good idea (Toyota Production Systems) to eliminate wastes in manufacturing and production, but the concept is now being used more like a euphemism for downsizing and cutbacks.

Lean manufacturing


My large Kansas City-based wholesale/retail company began the LEAN program about one year ago. It is key to the "Business Transformation" process that was installed company-wide before that. It began with layoffs (private company so you don't hear about it) and has continued with massive outsourcing (our internal PC Helpline has just been outsourced to Mexico).

Recently, there has been a horrible decrease in customer service quality both internally and externally and most full time employees like myself are continually being asked to more and more work (I have a corporate office, home office, and 24/7 cell/pager.)

Welcome to the new world of business!!

I will spend my summer looking for employment closer to home that is less insane in hopes of actually witnessing the development of my 4 and 8 year old kids. I will probably end up taking a HUGE paycut to accomplish this, but I'm willing to accept this because it will give me more time to work on my garden and house improvements.

the company i work for company completely got rid of their hr department by outsourcing it to some company in Montana before i was hired.

Same here in the motorcycle business. The very high end custom work is up, but the everyday work and sales are way down, not what one would expect with fuel above $3.00, but it shows most people look at motorcycles as a toy rather then a viable form of transportation.

People are worried because they realize that it is hard to turn a lifestyle around when they are deep in the hole.
Those that adjusted years ago and live debt free can easily deal with the present and immediate future despite very much reduced earnings.

This wasn't true in the 70's fuel crises, but many of today's motorcycles get no better mileage than the smaller cars (I know someone whose Honda 350 got about the same as my '85 Jetta).  Motorcycles have become lifestyle statements; the new economy vehicles are scooters.

The "@#$&* OPEC" statement is currently a Prius.  In 2009, it may be a VentureOne.  Maybe you'll get some business doing paint for them!

I've not heard about abiotic oil for some time.

Is this another "easy fix" myth that has bitten the dust, or will it be recycled into the discussion again?

Perhaps it is being replaced by the "Earth is an oil-filled ballon" idea, or with new ultra deep water reserves and oozing tar sands and CTL being touted as solutions.

I have been working on an "abiotic drinking water" theory, and "abiotic topsoil" theory, and also an "abiotic climate stabilizating atmosphere" theory, but fear I am too slow in getting my theories together.

I would like to come up with an "abiotic world peace" theory as well, but that topic has some odd kinks to it.

Seems that geopolitical tensions are masking exploration and development of our vast, as yet undiscovered supplies of world peace.

I find that ironic. Maybe its just me.

Life is tough all over. (Sigh.)

Can I get some abiotic help, here?

Or what's the next big thing....?

We seem to have an abiotic population growth.

Bingo! someone, please give the Swede a prize!

'The contemporary predicament of industrial society, as I suggested in last week’s post, is among other things a religious crisis. The religion of progress, the defining faith of today’s industrial nations, staked its claim to the allegiance of the human spirit on the material benefits it offered its votaries.'

Again, decent insight, from within the material benefits of that 'religion.' In fairness, America does seem to have made progress a religious belief, with punishment meted out to heretics - look at the scorn, contempt, and often naked hatred of 'Greens' as the source of so many ills afflicting America - as if environmental concerns are something from the past.

But to expand America's unique perspectives to encompass all 'industrial nations' is a bit much. It is easy to take much for granted in America, and certainly, there are major strands of self-interest in American ideas of progress.

At least in Germany, there is not much of a recognizable religion of progress. There is a certain faith that antibiotics are better than no antibiotics, at least for humans. Using antibiotics in poultry and livestock is illegal, as are growth hormones - as for genetically modified, Europeans seem to have a singular lack of faith in progress. Of course, this generally European wide lack of faith in using such modern technologies has been called a 'trade barrier' by those equally fervent believers of the 'free market.'

America is not the world, a mistake too often made when discussing industrial societies. Especially when you think that the rest of the industrial nations cannot even begin to grasp what Americans, perhaps a majority, believe as 'creationism.'

Greer is an interesting author, but somehow, consistently frustrating. And this time, the confusion is likely more than merely unintentional. Medical knowledge is a fine example of 'the material gifts the great god Progress,' and quite honestly, I think those working in that area will keep washing their hands with sterilizing soap before handling sick patients, the same way that they will sterilize their instruments. At least the competent ones - as it is today, such practices are not always followed, though the excuse of ignorance no longer exists, as it did until the 1840s.

We are so rich, that we take so much for granted - in part, because of progress. Trying to confuse the ideology of 'Progress' with it material benefits is wrong. The material benefits generally stand apart from ideology, regardless of how ideology uses them to support itself. Think of canning food as progress. Think of abundant clean water as progress. Think of electric light as progress. Think of raincoats (rubber or synthetic - doesn't matter) as progress. None of my examples should be controversial, all are less than 2 centuries old (well, water is more complicated) and at least the electric light example has deep social and environmental ramifications - and was a major social goal of Lenin's Soviet Union. However, very few people see electrification as a major pillar of Soviet communism when discussing it. Mainly because the ideology of communism seems to have faded into history, while using electricity remains commonplace. The material benefits far outweigh any ideology.

No need to go on into a deeper discussion about philosophy. There are believers, and there are empiricists ('materialists' is a poor choice) - and generally, the two groups simply don't understand the other's perspectives. However, the empiricists not only have to deal with believers, they also deal with reality, something that most believers seem to have a problem with when it conflicts with their beliefs. Economists, for example.

Noun: progress 'prógres [N. Amer], 'prow`gres [Brit]

1. Gradual improvement or growth or development

If your 'progress' is in line with 'improvement' then water is surely, in your statement (well, water is more complicated), a bit of an understatement. Maybe we need a word to encompass 'beneficial progress' and maybe some more words to indicate whether this 'beneficial progress' is world related or human related and in the latter merely something to do with free cool beer on tap.

I think what you might be driving at is a religion of self interest rather than religion of progress?

At one time I was married to an American woman. We had a big house with a three car garage. She collected so much overpriced junk that we had to park the cars on the street.
The day there was no room in the garage for my motorcycle I left.

I just saw the Greer article. As a lapsed Southern Baptist, I'm always wondering, "what the hell was I thinking back then?"

This article talks about Christian Fundamentalism as being a replacement for the Religion of Progress, but I think it's been more of a synthesis. This is the first time in America's 75-year holiness cycle that we've had a relatively affluent society in place when the fundies waxed powerful. So this time the fundies had to embrace corporate goodies as proof of America's superior holiness. That's a new Calvinist twist for Southerners who in previous cycles had to explain to their redneck (I get to use this word, half my ancestors are from Tennessee) flock why they were so poor, not why they got to bomb the world to fuel their SUVs. This time, dig this, the Elect drive Escalades bought on raw, compounded debt.

That's why this time the fundies have grasped at power that they couldn't have dreamed of in the past. Their followers fill up the red-state 'burbs and enrich McDonalds, the construction industry, and Home Depot. They also naturally support privatization and the carpetbagger firms like Lockheed, Halliburton, Blackwater, etc that run privatized prisons, workfare programs, and the misery plantation called Iraq. Your church tells you to vote GOP, and you get rewarded with $125,000 jobs to punish blacks, punish Arabs, punish the world. Hog heaven!

I think in the past the faith in progress was always tainted in the eyes of my Southern ancestors by being associated with cities, Yankee tycoons, and Jews. They instead nurtured a faith of rebel vengeance and doom. Now, the capitalist right and the racist/neo-confederate right are in a perfect marriage. 9/11 completed the structure of the church by converting the Southerners' paranoia & disruptive racism into a "natural response to global terrorism". The SUV has become the chapel-on-wheels, an act of rolling self-defense that in fact requires overseas offense to keep running, and the blackmail of foreign creditors to keep financing. Beautiful.

I hope to (some) God that Greer is right and my former fellow travelers are circling the drain. Clearly everything I've described rests on the historical joke that most of the oil is in Moslem hands. The great test of the capitalist/fundamentalism combo, to me, was whether the rednecks would make real sacrifices to aid Pope George in his crusade, marching off to war like it was 1914. By and large, they sat on their asses, one boy in 20 sent to the Army and one man in 40 sent to drive Halliburton trucks. The rest stayed home to lie on blogs and gripe about gas prices. That told me that they lacked the will to help Bush carry out a Christian putsch against all the rest of us. If 100 million rednecks had combined their rifles into a right-wing militia to enforce his dictatorship they probably would have succeeded, until the oil ran out. Instead they clung more tightly to their private goodies and let their bills go unpaid. Atomized, they're hopeless.

But one more terrorist attack, and this could all reverse.

There's another aspect to "progress" that this thread seems to be missing. It's the "more" part. Progress in a political and economic sense depends on growth. There's more stuff, so conflict gets finessed. Rising tide. That tide, however, has been running out - maybe since the 70's. Krugman commented a few months back on it - that growth no longer works for most people, but only for a few. Growth itself pushes the tide out now. That would make sense when we're up against resource limits.

cfm in Gray, ME

Good point about 'more.' And possibly, this reliance on 'more' is a more critical feature of American progress - notice how often many European practices are criticized as 'stifling,' 'preventing growth,' or 'static' simply because they impede 'more.'

There is even a not exactly tongue in cheek German expression for this need for more - it is called 'Konsumterror.' Which means, using modern American vocabulary, most Americans live in a consumer terrorist society.


the phrase "Konsumterror" in my perception is not so common any more in Germany. It used to be in the Seventies, along with "Konsumidiot", which describes those who run to buy everything they can.
From 1983 we had a new conservative government from CDU and FDP (the liberals), and there was that new buzz word "Leistung muss sich wieder lohnen" ('performance must pay off again' - is that half way correct?). It was a new era.
While there had been wealthy people before, of course, there was that new spirit of "show what you have". During the Seventies there was rather an attitude of anti-materialism among younger people, but in the Kohl era - strange enough when you take a "christian" party literally, did Jesus promote propensity to consume? - there was a strong change towards featherbrained showing off.

Most interesting in my perspective: Germany had some 30 million cars at that time and somewhat one and a half million of unemployed. At the end of the Kohl era there were more than 40 mio. cars and 5 mio. unemployed, while all the time we were preached how much the car industry meant for our wealth.

Recently oil/gas prices have forced us to drive and consume less, and suddenly unemployement rates are dropping - we even are below 4 mio. now. It's amazing, even if it is very likely no more than a chronological coincidence.

To come to an end: I'm grateful to read such insightful thoughts about the US society in your, Dryki's and super390's posts.

I am not sure what to make of the Greer article. He's got some interesting ideas. But I'm not sure he's right.

Hard times tend to increase extremism, including religious extremism. He may be right that rightwing religious fundamentalism won't prosper. Just as the Black Death resulted in the church being challenged by the flagellants, and the Ghost Dance swept through the Plains Indians while they struggled against European expansion. People may well turn against an established "religion" (be it progress or evangelical Protestantism) that can't save them or their way of life, in favor of something new.

But I could just as easily see it going the other way. Churches, particularly evangelical churches, have become our social safety net. Families are smaller and more dispersed, company and government benefits have been cut back or eliminated. Churches have stepped in to fill the gap. They run food pantries, get jobs for people, provide housing and daycare. Kinda like Hamas. Many require that you join the church to get these benefits, and even if there is no official requirement, the social pressure is intense.

And I don't think this would unwind in the post-carbon age, because this was the way things were in the pre-carbon age. The good old days, when a pregnant woman who was unmarried or widowed would be chased to the next parish so someone else would have to support her and her kid...

I think in the past the faith in progress was always tainted in the eyes of my Southern ancestors by being associated with cities, Yankee tycoons, and Jews. They instead nurtured a faith of rebel vengeance and doom. Now, the capitalist right and the racist/neo-confederate right are in a perfect marriage.

Interesting. I've often wondered how Christianity and capitalism became so tightly entwined. It doesn't seem like a natural marriage. What happened to "give away all your possessions and follow me" and "it's easier for a camel to pass through the eye of a needle than for a wealthy man to enter the kingdom of god"?

I've often wondered how Christianity and capitalism became so tightly entwined

See Predestination

The common mistake is in assuming that organized institutional religion and the Christianity taught by Jesus and his immediate followers are one and the same thing. They most assuredly are not. It is quite possible to be a faithful believer in and follower of Jesus Christ without "benefit" of any of the institutional superstructure that has been built on top of the core essence of real Christianity; maybe it is even easier to do so without their "help". In fact, the coming troubles might well sweep that whole husk away, allowing the inner seed to sprout and blossom.

In fact, the coming troubles might well sweep that whole husk away, allowing the inner seed to sprout and blossom.

I doubt it. I think we're going to need that "institutional superstructure" more than ever. (And I say that as atheist, born and bred.)

Anthropologist Marvin Harris noted that an important function of that kind of religious "superstructure" is to discourage consumption. Pork is unclean. Cows are sacred. No eating meat and milk in the same meal. Usury is a sin. Blessed are the vegetarians. The meek will inherit the earth.

It's a sign of a society that is up against Malthusian limits. The priests, instead of giving material goods to their followers, start telling them that they'll get them in the afterlife. That element of religion has been more or less cast aside in the frenzy of the fossil fuel fiesta, but I suspect it will be back once the party is over.

Amen to that brother or sister.

I have found a large following of people who are the new environmentalist that have God in the center of their lives, and they don't like the big churches that have huge buildings sitting up on the top of hills.

I am fond of the idea of the families meeting in homes and worshiping, rather than the big congragations that pile into a building that costs so much money that could have been better spent helping people, rather than paying the costly Electric bill.

I am a Lutheran.

People always get that quote wrong. The Eye of the Needle is a gate in the wall of Jerusalem, a man can walk through it, but a thin camel would have to crawl or not go in at all. A camel calf might though. Rich people can very easily fall pray to worshiping the means to get their money, or the power that the money affords them, rather than worship God, is the real meaning of that passage.

Incorrect. That is the bible-school equivalent of an urban legend. There never was such a gate.

I agree with Leanan on this one. I think someone invented the story to make a hard saying easier.

Clearly everything I've described rests on the historical joke that most of the oil is in Moslem hands.

Oil is the strength of the earth which is denied Cain upon slaying Abel.

We are evolved (so far?) to relax when our bellies are full and when the kiddos are full and happy.

We seem to be wired to try to maintain as much comfort for ourselves as possible.

Extravagent wealth seems to increase the possibility of us becoming ever more addicted to various aesthetic and even bizarre manifestations material comfort. Gold shower curtains and toilet seats, for example.

We do bizzare and even self destructive things with our potential when we feel assured that our tummies will be filled for awhile.

We can become violent if deprived of food and water and comforts as well, but the really bizzare behaviour seems to come from comfort-sated humans.

Why not invest in environmental research rather than in war? Why not work to understand the human relationship to energy and other resources so as to provide the best opportunities possible for the next generations? Instead we invest in building Vegas.

What an odd species. Progress? Self interest? It seems like we figure out what we want -- usually personal comfort and security -- and then construct a world view around justifying whatever seems to provide that.

This is not necessarily in our own self interest, just as it is not usually progress over generations.

Maybe we extract carbon from the planet and dump it into the air, the soil, the water in order to make ourselves comfortable and then our species will disappear. Is that good or bad? Don't species do that?

Are we really different, or "above" yeast, or just a differently evolved and more complex species doing what yeast does?

I'd like to think that there is more to it than that: some eternal mystical Omega out there pulling us into the future, some secure Alpha in the past pushing us toward something we could universally agree on as progress.

So far we seem to be better at destruction than anything else. We destroy by mistake or unintentionally. We do a superb job of destruction on purpose.

Meanwhile, we speak of noble aspirations and progress as though we can somehow grasp what these are.

Perhaps at the heart of our concern about Peak Oil is a concern that our own comfort and security is bought at the cost of destroying the possibility of comfort and security for many people now living, and indeed at the cost of snuffing out the very lives of those to be born in this next century or so.

Are we trying to make a world where we find comfort and security without it costing the same for others?

The cheap belief in easy progress for all seems inextricably tied to the abundance of cheap and easy petroleum.

What will we believe next? Continued comfort and security for a few at the expense of the masses? Cooperation over competition?

From the link on Saudi Arabia above:

Saudi Arabia ... seeks to retain its position as the world’s largest petroleum exporter this century.

“The Kingdom will continue to be the largest and the most important oil producer and exporter during the 21st century, just as it has been over the past half century,” al-Naimi said.

Being the largest producer, exporter and holding the largest reserves is a source of extreme pride for the Saudis. This makes them the most important people in the world, in their minds anyway.

And people wonder why, why Saudi would not just admit that they have less than 100 billion barresl of reserves, why they would not just admit that their production is in irreversible decline. People, you just do not understand the Saudi mind. You do not understand that the Saudis actually believe this stuff themselves and as long as the world continues to believe it, then it must be so!

At first Saudi said production was deopping because they had no buyers. Then they decided to that all OPEC must voluntarily cut production even though prices were, and still are, at record highs.

And to this day, Saudi Arabia is the only one that has made any significant cuts. OPEC nations of Algeria, Qatar, Libya and the UAE have actually increased production. Others like Venezuela, Iran show slight declines that, like Saudi Arabia, are very likely natural declines. And Iraq and Nigeria are both producing every barrel they can but are hampered by violence.

But I digress. To anyone who understands the Saudis know very well what their motivation is. They are extremely proud of having the most reserves and the greatest production and exports in the world and they will never admit that it might be otherwise. We know Russia now produces more oil than Saudi Arabia but not to worry. Saudi still has more production capacity than Russia. Well, that the story they tell anyway.

Ron Patterson

The fact that aircraft carriers aren't massing off the Saudi coast for a massive injection of "democracy" means that Bush, Cheney, Blair and friends are fully aware that the export cuts are not voluntary. So TOD is not the only place which has a grip on the truth about the state of KSA oil production.

and of course last but not least the KSA Royal family know they will eventually have to move, ( that is take up residence in some other country), once the great populace discovers their means of existance no longer exists. Do you suppose the Royal Bush family will have room for them down in Paraguy??

Actually, there is already a very large, well intrenched muslim community in Paraguay. Seems the Bush's weren't the only ones preparing a South American Home.

I don't get it. It would behoove the KSA to fan the flames of "Peak Oil," and to say they are running out, even if they were not. That would drive the price up. Instead, they announce they have even more gobs of the stuff, following announcements of large finds in China, Mexico, and Gulf of Mexico. And now Iraq is maybe bigger than KSA (some reason to believe that, it has lowest extraction costs in the world). Iran is bringing in foregners to boost production, and may go to 4 mbd within 5 years.
So, either there is a highly coordinated worldwide conspiracy to overstate the amount of oil in the ground (among many different and usually antagonistic players), so as to lower thr price of oil, so the sellers of oil get less money (even though they are the conspirators), or....there is really just gobs of the black stuff out there.
Sheesh. I think a glut is coming on. Peak demand may be with us already. Remember demand fell 11 percent after 1979, did not rebound until 1988, when oil was cheaper. This time around, maybe oil stays up, in the $60 range. We may never use this much oil again.
That's good news.

"either...............worldwide conspiracy ...or.. gobs of oil in the ground". really ? that narrows it down to just 2 (two) possibilities.

CNN can't miss the chance to spread hate propaganda against Russia. Russia has been increasing its oil exports and total production for the last 10 years (when it will peak is beside the point). Russian crude is higher viscosity and has a higher sulfur content. It is sold around $7 per barrel cheaper than Brent. Where the f*ck do these dirtbags at CNN get off accusing Russia of making US gasoline prices higher. The world price of oil is not set by Russia and Russia cannot pump arbitrarily large quantities to make the price come down. It is not Saudi Arabia. In fact, even Saudi Arabia is no longer what it was. Maybe it's Russia's fault that the Saudis are pumping one million barrels per day less this year compared to last. You can never have too much demonization in the sick minds of the CNN propaganda agency.

While I generally agree with you and also believe that some nation, group, entity.. is pushing this demonization of Putin (& I know that this is statement is an easy way to get shot - but here goes - also the demonization of GW Bush)

-- I think that in this article they meant no malice. They were just pointing out that in exporting countries where gas is cheap there is no price signal to moderate consumption and growth in consumption.

-- If you note they also did not say that these countries should raise domestic gasoline prices - it is after all an internal matter.

-- They do rightly point out that in places where subsidies have been removed (ala Indonesia, a former exporter) demand is down because of the price signal.

Russian gasoline prices are *not* subsidized. Russian natural gas prices are. Perhaps the media should stop using the same word for two different types of commodities.


Russians pay $2.68 per gallon while Americans pay $2.88 per gallon. Russia does not have the same policy as Saudi Arabia and Venezuela (where the pices are $0.45 and $0.19, respectively). Like I said, CNN is spewing hate propaganda.

More Useless Information

How much oil does it take for a country to export a barrel of oil

Saudi Arabia .25 barrel of oil used
Russia .55 to export 1 barrel
Canada .88
Mexico .66
The following don't export,
How much oil does it take for them to get a barrel of oil out of the ground
USA 3.98
China 1.95

I was just wondering

So you claim that the production in a given country is a function of the price of extraction? I'd like to see some evidence of this theory other than monetarist voodoo "beliefs". Your post is also non sequitur, CNN claims that Russian domestic gasoline prices are diverting oil that would have subsized poor, starving America. As noted in the USA Today article, low Russian domestic incomes mean that gasoline prices in Russia are effectively more expensive than in Europe. If anything this shows that domestic demand in Russia is suppressed and more oil is being exported than would have been the case if $0.55 was charged for gasoline. So much for the BS comparison to Saudi Arabaia and Venezuela.

Sorry, need to get my formatting down

More Useless Information

How much oil does it take for a country to export a barral of oil

Saudi Arabia .25 Barrels to export 1 barrel
Russia .55 Barrels to export 1 barrel
Canada .88 Barrels to export 1 barrel
Mexico .66 Barrels to export 1 barrel

Non exporting
Oil used to get one out of the ground

usa 3.98 Barrels to get one
China 1.95

I'm sorry, but are you honestly saying that the U.S. needs to essentially import 4 barrels of oil to extract one?

Do you work on reserve numbers too?


I was looking at countries that will be changing from an exporter of oil to an importer in the near future.

One part of the equation is the different between what is pumped out of the ground and what is exported.

WesTexas did something like this a few months ago, in one of his postings. The domestic use verses the Exports will get worst over time.

From The Next 'Greatest Generation' link:
the U.S. military's operations "unsustainable in the long term."

Huh, who'd thunk the idea of of letting a large force to expend its energy swatting at gnats would work?

the Air Force is installing the largest solar plant in the country

So much for the arguments of alien tech, Hydrinos, or Antimatter bombs it would seem.

They have to use the power of the sun, same as it ever was.


I suppose the Navy will eventually revert back to wind power, too.

Hello WNC Observer,

Which is why in my earlier postings I suggested that Earthmarines could get started by protectings the trees that will need to be later harvested for tall masts and structural wood ship-framing. The first post-Olduvai country to have a large navy or pirate navy will have tremendous advantages in global trade.

The Chinese may have an insurmountable future naval advantage if they relearn the ship-building with fast-growing, but light, strong, and flexible bamboo. Of course when global warming is factored in: maybe those in northern Siberia will be the top bamboo warlords.

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

Trivia bit -- China banned the use of wood for fishing boats in 2001 with the few last ones probably out of the yards by now. ( From a book by Michael Yamashita: 'Zheng He -- Tracing the Epic Voyages of China's greatest Explorer')

I doubt that there is a tree left in the world which would make a mainmast for a three decker ship of line.

The British navy switched to composite masts made of thinner timbers bound by iron hoops during the Napoleonic wars. Before that they got their masts from North America (Canada after 1778) and Russia.

There are some 120-160 ft white pines in the college woods natural area near my parents house in NH. Ramrod straight all the way up. Big enough? Or is that a single tree is too narrow? This was the original mast extraction area. There are Mast Roads all over the place. I went to Mast Way Elementary.


Sailing is the bigger than most of you folks seem to think.

Here is a link to Reid Stowe and his 1000 days at sea web blog, and site.

There are still wooden and metal and fiberglass boat builders out there. Sailing is big sport but also still usable as a ways of getting around. In the days and years ahead, it would be profitable for more people to learn about sailing and the life at sea.

If we were to ever lose the ability to fish in big factory vessals, we will see a lot of food drop off the Global food chain. Though it is likely to drop off from overfishing first.

Recent drumbeat articles on gas shortage in Colorado and Iowa, peaked my curiosity. So I did some digging.


What I found did not mesh with the newspaper accounts. I didn't see the price spike that I would expect from a gas shortage. When I imported the data into a spreadsheet, and shorted it by the price of regular, I found that Colorado and Iowa were number 17 and 31.

So I went to gasbuddy.com since they have a better graphing tool. The states currently experiencing dramatic price spike are Ohio, Michigan, Wisconsin, Illinois and Indiana.

Wow. Just wow. If you haven't listened to Lisa Margonelli's interview about her book "Oil On the Brain: Adventures From the Pump to the Pipeline," then you're gonna haf to, NOW.

Financial Sense News Hour

Re:The Next 'Greatest Generation'

It's somewhat curious to see Copulos "speak for" the Pentagon. An interview, one year ago, would seem to indicate his views are not exactly mainstream Defense Department (certainly not the public ones):

It is Copulos' view that the primary reason the U.S. invaded Iraq was because Saddam Hussein "threatened the region's oil supply".

"I would suggest to you that if all that was there was sand, we wouldn't be paying so much attention to the area."

Not included in NDCF's numbers are the ongoing and future costs of treating U.S. military veterans injured in combat either physically and/or psychologically.

His figures only include the on-going operational costs of "shooting people and blowing things up, not to put too fine a point on it."

The interview came on the heels of Copulos' testimony before Congress, in which he explained what the cost of oil really is for America: $480 a barrel.

Oil Drummers: You guys need to go to the BP website, and look at their Statistical Review. It is fascinating – we will reach "Peak Demand" way before we hit "Peak Oil."
Oil demand is declining in Eurasia and North America. And that is before the big price run-up. It was falling in 2005. If any other industry posted the numbers that oil has in the last 20 years, it would be called a "mature" or "declining industry." Instead, we get hysterics when there is any increase in demand.
The Far East is where the vast bulk of the increase in demand comes from. But now that oil has quintupled in price since the late 1990s, look for flattsh results there too, while North American and Eurasian demand continues to recede.
Meanwhile, alternative fuels are pouring into the marketplace, and conservation measures as well. These trends take years to get going, then they keep rolling for years more.
2006 may mark the "Peak Demand" year ever for fossil oil. You guys should be happy. But no, you want to be in hysterics.
The only factor which can change this picture is a big decrease in price. That may happen. If it does not, we have acheived a good thing, "Peak Demand."
Now, we can work on reducing world demand every year.

Sorry, just going to repost this from yesterday w/ a few extra comments at end:

Forbes has been running a series of articles this year on India and in light of what I've read, I would be very surprised if their demand did not continue to rise steadily, long-term. Last month's (2 issues ago I think) installment was on "The Indian people's car," The Tata (just one....), which the company is hoping to roll out for $2500 this fall and the latest issue,hot off the press, has a feature on infrastructure development ,including massive roadbuilding projects, both public and private tolled. Far from plateauing, India and China appear to be really just getting under way in building out western-style national car complexes.

India & CHina will be major demand drivers going forward IMO. These price-driven plateaus are hiccups IMO (Of course demand certainly could be driven down by much higher prices) I will stick w/ what i said in my props to Roger Connor's post, that driving is a hard habit to break.There is a very large gearhead culture developing in these countries w/ the attendant car magazines,aftermarkets etc. These young (and not so young) people will give up driving right before they they give up food (but after sex) Once the car culture in India gets spooled up,assuming it ever gets very far, it will probably be even more stubborn than in china since I think rationing will not go over nearly as well in the former w/ their history of "activist democracy" (ie civil unrest and rioting)


What you may not know, because you have not been reading here long enough, is that when BP releases its annual oil publication there is plenty of interest in reading and digesting it. Happened last year here, and will happen in a few short weeks when the new version comes out.

Also, be careful when using economic theory terms such as "demand" then applying that to a historical record of production. E.g., Iranian revolution, Iran-Iraq war, and in 2005 the storms in the GOM. All reduced production, which if you then look back at the historical record with your biases you are interpreting as reduction in "demand".


Right. They are largely the same thing.

Meanwhile, alternative fuels are pouring into the marketplace, and conservation measures as well. These trends take years to get going, then they keep rolling for years more.

Alternative fuels may be pouring into the marketplace (like a pitcher pours into a lake), but because of the energy required to produce them, there is little net gain.

Demand can be specified at a given price point. Raise the price, and demand will go down. It can also be lowered by economic conditions distinct from constrained oil supplies, but it will certainly be lowered by high prices. Conversely, if oil demand was going down due to other factors, the price would follow. But prices remain high. Saudi Arabia has claimed their lowered production is due to lower demand. If they cut their price in half, however, I'm sure the world would buy more. You can call it "Peak Demand" if you want, but it's really the same thing: the cheap oil is running out. The problem with lowered energy use is that the world economy runs on it and alternatives and conservation can't make up the shortfall in the short run.

Oil Drummers; I am beginning to think there is no Hellish future. No drama. Just higher oil prices limiting demand, and conservation and substitution. Already world oil demand is falling. All the graphs showing the world running out of oil assume 2 percent annually compounded growth, or a doubling of demand in 32 years. What if there is no increase in demand, at $60 a barrel or above? Then we get extra decades, even of the light oil. Heavy oil deposits dwarf light oil deposits.
The real kicker is plug-in hybrids, and urbanization. Every central city in America seems to be experiencing a boom. Plug-in hybrids promise to cut oil consumption radically. We can probably produce 35 percent ethanol-gasoline in this country, especially with combo methane cattle corn ethanol plants, which are very energy positive. (Cow dung is turned into methane, it fires the plant, the wet grain is fed to the cattle. Next I think pig-potato plants are up).
PS I agree with sentiments on this board about the middle class dying off. It is not related to oil however. It is the tax code, trade and possibly immigration. It is a much much more serious problem than the rather esoteric and economically naive idea that we will run out of oil.

I'm not aware of anybody who says we're going to run out of oil.

Are you?

Erect a strawman argument, and then attack it.


I say we're going to run out of oil. If the meaning is that oil is not available to us all at a price we can afford. The theoretical "what is left in the ground" doesn't help me at all.

This is a piece from a text about the gradual introduction of nazism. Since the parallels with peak oil seemed so obvious, here is the link.


"You see," my colleague went on, "one doesn't see exactly where or how to move. Believe me, this is true. Each act, each occasion, is worse than the last, but only a little worse. You wait for the next and the next. You wait for the one great shocking occasion, thinking that others, when such a shock comes, will join with you in resisting somehow. You don't want to act, or even to talk, alone; you don't want to "go out of your way to make trouble." Why not? - Well, you are not in the habit of doing it. And it is not just fear, fear of standing alone, that restrains you; it is also genuine uncertainty.

"Uncertainty is a very important factor, and, instead of decreasing as time goes on, it grows. Outside, in the streets, in the general community, "everyone is happy. One hears no protest, and certainly sees none. You know, in France or Italy there will be slogans against the government painted on walls and fences; in Germany, outside the great cities, perhaps, there is not even this. In the university community, in your own community, you speak privately to you colleagues, some of whom certainly feel as you do; but what do they say? They say, "It's not so bad" or "You're seeing things" or "You're an alarmist."

Every time I read this story I get sick to my stomach. This is the classic "boil the frog" scenario that I'm very afraid of. This could happen in any country at any time. Thanks for posting even though it's such a horrible, disturbing read.

this is scary stuff. I tend to agree we are being led into a slow boil. I was in Walmart recently buying beer, upon paying i was required to show my drivers license. To which I replied, oh i don't look old enough? (I am 45 yrs old), she said thats the law, I must see I.D. And I said, what if I don't have an I.D.? She said I can't sell it to you. I said I am not 18 or 21, yet, wish i was but, do I not look like it? she said: no I.D., no sale!

I think is total bullshit! And I am in Texas!!!

due to inconvience, i showed my I.D. My drivers license was scanned! but I concluded it's Walmarts policy.
but never again! I'll find another place!

Bear in mind that in Tennesee, if you buy a cigarette lighter you must show I.D. Come to find out, the ATF may be watching, and they want to know who's buying. The cashier could lose her job if she sold me a cigarette lighter without asking me for identification. This is crazy!

A slow boil? you bet, we are being boiled, you may not feel the temp yet, but rest assured, we are being boiled.

someone mentioned a while back, that the next president election may be the last. martial law after that. I don't recall the details, but it was spooky. anyone recall that?

seems like it's WalMart that has decided to set the laws, and not the politicians.

Here in the UK, ASDA (owned by WalMart) has unilaterally decided to require ID checks for alcohol and tobacco (the legal age for buying alcohol is 18; that for tobacco is 16).
Except that they want to ID everyone under 21 for alcohol, and won't sell tobacco products to those under 18. As a trial, they are also looking at ID'ing those under 25

Meanwhile, this is seen as a "good thing"...

Actually it is the law, at it's purist form. however there is this concept called "common sense", and I find it hard to believe that anyone aged 18 to 21 looks anything like someone in their 30's or 40's or 50's. and vice versa!!
Hey, the women may get excited about being carded at a later age, but lets face it, I don't look 21. I have no problem for underaged persons being carded for identification.

Anyway, having my state drivers license scanned into a database to read my age for the sole purpose of buying alcohol is a bit over the top. If I looked to be of questionable age, then fair enough!


How do I not know it's not being fed into a state profile on who is buying what?
A bit like the Stasi if you ask me!
A state drivers license is not suppose to be a freakin state or national I.D., it is only required to drive on public roads.
Somewhere along the way, we collectively have surrendered our freedoms of privacy for security.

i read this, and i laugh. not at the article, but at what i was taught in high-school about ww2.
i was taught that somehow the german people were not at fault because of the super power of a certain person's speaking ability.. right, the sad fact is allot of the german people who knew what was going on liked it and greatly out numbered those that did not and those people were quickly silenced.


regards from active senior citizen [45 days younger than Saddam]who is getting into survey writing.

I was interested to see if any responses to my survey at smirking chimp

US - Iran conflict

Recent publication reveals that Zibgniew Brzezinski, Jimmy Carter, and others incited Saddam Hussein to attack Iran through then Jordanian King Hussein I bin Talal.

Anyone want to refine and post the below survey idea?

The Nimitz left San Diego on April 2, 2007 to relieve or join the Eisenhower off Iran.

Where will the Nimitz be on April 2, 2008?

1 Back in San Diego
2 Cruising
3 on the bottom
4 vaporized


An additional comment was added

There are more US carriers in the Gulf than you think

As usual this report vastly understates the true number of US aircraft carriers in the Arabian / Persian Gulf area. There are at least two, and possibly three more carrier task forces in the gulf. These are not nuclear carrier task forces but are certainly formidable naval armadas in their own right. They are the Marine Expeditionary Units, or MEU, which consists of an 800+ ft. long aircraft carrier and the usual support ships of missile frigates and destroyer screens. According to the same gonavy site quoted above the LHD-4 Boxer, LHD-5 Bataan and LHD-6 Bon Homme Richard are in the Centcom AOR.


Always remember, he warned you: “If this were a dictatorship, it would be a heck of a lot easier, just so long as I'm the dictator," Bush joked. (CNN.com, December 18, 2000)


I checked the Commonwealth Edison bill estimator and got results indicating a kwh rate about 10 cents. This does not seem terribly out of line for what is overall one of the rather densely populated states. So what is a retired couple doing with such a whacking lot of electricity? Heating a huge old leaky never-maintained house to eighty degrees with electric resistance heat?

As to the rate freeze, I would be delighted to pay 1997 rates for electricity, gasoline, housing, and other energy-intensive expenses - provided of course that I still got reliable supplies - but I don't find myself privileged with such an an option. And the Illinois electricity system is not in good condition, which adversely affects neighboring states including the one where I live. Would this couple like electric service resembling that in Zimbabwe, which is where we're headed? Would they even survive repeated lengthy blackouts in January or July? And at 1997 rates, where is the vast upcoming investment in wind, solar, and whatever else, supposed to come from? And why do those of us in neighboring states owe Illinoisans a subsidy, which is effectively what the freeze was giving them?

In view of all the whiny demands people are making, we really ought to push the retirement age up to 70 or 72 for everyone, including all public-sector workers. (Even police officers - there are tons and tons of desk jobs.) And live less large.

Years ago, most folks didn't get to live in monster houses or go to Europe every few months. And most folks (except overprivileged government workers in big cities) had to work to age 65 - even at what were then (and in some cases still are) physically hard jobs, like farming, steamfitting, truck driving, and construction. And that was before almost all of today's medical advances. So, I'm not supposed to say this, but perhaps this couple should get off their duffs and go back to work. Or move to a small condo. Or both.

Paul: I'm with you. What is with this 2007 trip where everyone over the age of 60 should be coddled and catered to like an infant? An example: take a good hearted, hard working American citizen aged 20 years. The guy was a poor student because his IQ is 90 and he grew up in a very poor neighbourhood (maybe in a trailer). The current system says COMPETE- which means if you can't keep up- hit the bricks Pal (to paraphrase Alec Baldwin In Glengarry Glen Ross). No sympathy for this loser-just the magic of the invisible hand-no hard feelings.Somehow this attitude is totally unjust when viewing anyone over the age of 60- they need to be treated like helpless infants (even if their net worth exceeds 1 million US). Work? How can they work? They are our treasured SENIOR CITIZENS. Apolgies for the rant.

Right on guys. And NO i don't suspect those folks would like the Zimbabwean-type system:) It's amazing to me how much electric some people use. I run a business out of my 3 bedroom apartment and am around a lot and the electric component of my bill is usually around $29. THis is at close to $0.20/kwh! Certainly they have electric heat and are growing dope in the attic as well.

The only thing to be said in behalf of the oldsters is that they have been lied to for 60+ years, and have lived & planned their lives based upon false information. The youngster has only been lied to for 20 years so far, so there is still a chance for him to wise up.

They are probably living in the same large house they had when they were working and had a large family and haven't bothered to do any updates with respect to energy conservation. I also see these electricity costs as outrageous, so I assume they have an all electric home and make no efforts to conserve.

The prudent amongst us typically downsize when we retire if we are going to be faced with a smaller income. That is what I did and am doing quite well as a result. I would have done it regardless because of a greater concern with my impact on the environment, but budgeting and frugality was the primary motivation factor.

I guess they would like a takeoff on the old Soviet employment system: The electric company pretends to supply electricity, and the customers pretend to pay them.

Just a little bit of background to add here -

Bennett Daviss' article in New Scientist on May 3 is a follow-up piece to the in-depth article on the SPAWAR San Diego research by Steven Krivit and Daviss published in New Energy Times in November.

Apparently, New Scientist chose to neglect the term "low energy nuclear reactions," which those of us observing, and working in the field have now adopted.

The term "cold fusion" was never chosen by Fleischmann and Pons; it was wished on them by the press. It was and is a poor descriptor for the phenomenon. The concept of fusion remains highly speculative, a variety of phenomena are clearly not fusion, and then there is the Widom-Larsen not-fusion theory. (http://www.newenergytimes.com/wltheory)

Related New Energy Times stories:
Report on the 2006 Naval Science and Technology Partnership Conference (Sept. 10, 2006) (http://newenergytimes.com/news/2006/NET18.htm#FROMED)
Extraordinary Evidence (Nov. 10, 2006) (http://newenergytimes.com/news/2006/NET19.htm#ee)
Extraordinary Courage: Report on Some LENR Presentations at the 2007 American Physical Society Meeting (March 16, 2007) (http://newenergytimes.com/news/2007/NET21.htm - apsreport)
Charged Particles for Dummies: A Conversation With Lawrence P.G. Forsley (May 10, 2007) (http://newenergytimes.com/news/2007/NET22.htm)

Steven Krivit
Editor, New Energy Times